Alan Edrick – Executive Vice President and CFO Deepak Chopra – President and CEO Ajay Mehra – President, Security Division, Rapiscan Systems Victor Sze – General Counsel

Brian Ruttenbur – Morgan Keegan Rick Hoss – Roth Capital Partners Tim Quillin – Stephens Inc. Michael Kim – Imperial Capital Josephine Millward – The Benchmark Company

Good day, ladies and gentlemen. And welcome to the Fourth Quarter 2010 OSI Systems Earnings Conference Call. My name is Michelle, and I will be your operator for today. At this time, all participants are in listen-only mode. We will be conducting a question-and-answer session towards the end of today’s conference. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes. I will now turn the presentation over to your host for today, Mr. Alan Edrick, CFO. Please proceed.

Good morning and thank you for joining us. I’m Alan Edrick, Executive Vice President and CFO of OSI Systems. I’m here today with Deepak Chopra, our President and CEO; Ajay Mehra, President of our Security Division, Rapiscan Systems; and Victor Sze, our General Counsel. Welcome to the OSI Systems fourth quarter of fiscal 2010 conference call. We’d like to extend a special welcome to anyone who is a first time participant on our conference calls. Please also note that this presentation is being webcast and will remain on our website for approximately two weeks. Before discussing our financial and operational highlights, I’d like to read the following statement. In connection with this conference call the company wishes to take advantage of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 with respect to statements that may be deemed to be forward-looking statements under the Act. Such forward-looking statements could include general or specific comments by company officials on this call about future company performance, as well as certain responses to questions posed to company officials about future operating matters. During today’s conference call we may refer to both GAAP and non-GAAP financial measures of the company’s operating and financial results. For complete information regarding non-GAAP measures, the most directly comparable GAAP measures and a quantitative reconciliation of those figures, please refer to today’s press release regarding our fourth quarter results. The press release has also been furnished to the SEC as part of a Form 8-K. The company wishes to caution participants on this call that numerous factors could cause actual results to differ materially from any forward-looking statements made by the company. These factors include the risk factors set forth in the company’s SEC filings. Any forward-looking statements made on this call speak only as of the date of this call, and the company undertakes no obligation to revise or to update any forward-looking statements, whether as a result of new information, future results or otherwise. Before turning the call over to Deepak, I will provide a high level overview of our financial performance during our fourth quarter. We will again touch on several themes that we discussed during past conference calls. We continue to execute on our core strategy of generating meaningful earnings growth and free cash flow. Simultaneously, we are investing in key sales markets and R&D programs to drive the topline. As a result of these programs, amongst other factors, we anticipate seeing an acceleration of sales growth that when coupled with our demonstrated margin expansion is expected to continue our strong earnings momentum. Highlights for our fourth quarter of fiscal 2010 are as follows. First, we returned to strong double-digit year-over-year Q4 sales growth of 19%. Leading the way was our Security Division, which posted record quarterly revenue of $76 million, representing 29% growth, the strongest quarterly growth since the second quarter of fiscal 2008. Our Healthcare Division also rebounded strongly, recording 15% sales growth, while our Opto Division finished the year on a high note, as well as sales increased 6%. Second, we reported a solid bottom line as our operating margin expansion led to a 62% increase in Q4 diluted earnings per share, excluding restructuring and other charges. For the full year, we reported normalized EPS growth of 53% or $1.39 per share, which exceeded our previous guidance primarily due to the strength of our Q4 sales in Healthcare. The key to the annual earnings growth has been the successful and sustained implementation of our global cost improvement initiatives coupled with demonstrated operating efficiencies. Third, with outstanding bookings of $175 million in Q4, we ended the quarter with a record backlog providing good visibility into fiscal 2011 sales. And fourth, we reported positive free cash flow for the 10th consecutive quarter. During Q4, we generated $6.6 million of free cash flow while for the full fiscal year generated a record of $34.1 million of free cash flow or approximately $1.85 per diluted share. As a result, we moved from a net debt position to a solid net cash position as of the end of June 2010. In summary, we are pleased with the financial performance as nearly all metrics improved significantly. As the economy rebounds, we believe we are well positioned for significant topline growth and operating margin expansion. I will provide additional financial details and will discuss our fiscal 2011 guidance later on this call, but first, let me turn the call over to Deepak.

Thank you, Alan. And again, good morning and welcome to the OSI Systems’ earnings conference call for the fourth quarter and full year fiscal 2010. As Alan pointed out, our strong financial performance continues with growth in revenues, earnings and cash flows. The fourth quarter each of our divisions delivered a revenue and operating profit growth from the prior year. Based on non-GAAP measures, our fiscal 2010 diluted EPS was $1.39, which is an increase of 53% over the prior year. In a difficult economic environment, we continued to penetrate new markets, introduce new products and streamline our cost structure. Looking ahead, OSI is well positioned to achieve topline growth with ample opportunities in each division. I’d like to spend some time focusing on our business segments. Let’s start with our Security Division, Rapiscan, which continues to perform very well. Revenues increased 29% in Q4 to $76 million and our operating profit more than tripled from the prior year. Security backlog was $145 million, approximately 24% higher when compared to the fourth quarter of the prior year, positioning us well as we enter fiscal 2011. Our screening and detection solutions are certainly well received in the marketplace globally. During the fourth quarter, we received several notable orders in cargo and checkpoint screening solutions. Our Secure series body scanner solutions were installed at numerous major airports. We believe that airports are increasingly seeing the value of the Secure’s proprietary detection technology, both from a threat detection and airport efficiency perspective. For example, Manchester International Airport in the U.K., which has deployed the Secure 1000 after analyzing other alternate technologies, was recently named ACI Airport of the year, in part because of the success of the Secure 1000 in improving checkpoint security, throughput and customer satisfaction. Earlier in the year, we announced the receipt of 173 million indefinite delivery, indefinite quantity order from the TSA for our Secure 1000 Single Pose Systems. We continue to remain one of only two TSA qualified vendors for body scanners. We have also received orders for Secure products from non-aviation customers. This continues to reinforce that many of our customers even outside the aviation sector, see the value of a comprehensive body scanning solution. The Secure series, based on advanced backscatter technology has rapidly become the most widely deployed advanced people screening solution in the world. There is also growing demand for Rapiscan Air Cargo Solutions to meet the TSA air cargo screening mandates. During Q4, we received initial contract awards to supply air cargo inspection systems to two major international airlines, which helped them meet the TSA certified cargo screening program that requires 100% inspection of all cargo carried in passenger aircraft. The A1000, our latest large cargo scanning system further differentiates our product offering and allows for faster and more comprehensive screening for air cargo. We now have 10 separate screening platforms on the TSA qualified technology list that provide a broad set of solutions to serve the needs of the air cargo companies and comply with the U.S. mandate for 100% air cargo inspection. As air cargo carriers optimize their screening logistics, we are confident that we will continue to realize orders from the air cargo inspection product family. During fiscal 2010, we continued to expand our geographic reach and customer base for cargo, vehicle and baggage inspection products. And on Eagle cargo and vehicle inspection product line we received numerous orders both domestically in U.S. and international. We believe that these contracts demonstrate the growing demand for the Eagle CVI systems unique combination of high resolution image quality and comprehensive detection. In fiscal 2010, we also received a 10-year cargo scanning services contract with the Puerto Rico Ports Authority. We are in the process of completing the screening infrastructure and expect revenues to begin sometime in Q2. The turnkey services solution is an innovative approach that offers a variable cost alternative to ports to meet their cargo scanning needs. For us, it creates a recurring revenue stream to complement our cargo screening platform sales. In our baggage and parcel inspection and whole baggage screening product lines, we received approximately a $35 million order for checked baggage inspection systems for airports in Mexico and an order from the Delhi Metro Rail Authority in India for the deployment of systems to inspect passenger baggage on the mass transit system in New Delhi. In our long tradition of providing screening solutions to sporting events, we were a provider of Security systems at the World Cup tournament. With a broad portfolio of screening platforms and global marketing and sales reach, we will continue to add new customers and find ways to enter new market segments. Our R&D pipeline in security products continues to be robust and we expect to introduce numerous new products in the coming quarters. Moving to Healthcare Division. Our Healthcare Division reported Q4 sales of 15% and delivered an impressive operating margin of 9.1%, excluding any restructuring charges. For fiscal 2010, on roughly the same level of sales as the prior year, we more than doubled our operating profit. This exemplifies the strength of the operating leverage we’ve created in this division and our effectiveness in penetrating the higher growth markets of China, India and Latin America. The emphasis on overseas markets during a challenging period in the developed markets allowed us to prosper in 2010 and places us in a good position to grow in all regions as the global economy improves. Examples of some wins overseas, patient monitoring sales to several hospital projects in China, diagnostic cardiology, anesthesia and patient monitoring sales to several customers in Mexico and anesthesia delivery systems sold to customers in India. With our new product introductions such as elance product line, Ultraview series and the CardioExpress ECG, we should have ample opportunities to compete and win our share of business. Our pipeline, again, in new product introduction in the Healthcare over the next 12 to 18 months is the largest in the history of the company. As the North American Healthcare market further rebounds, we are confident of our ability to deliverable profitable growth in fiscal 2011. In the fourth quarter, Optoelectronics revenues increased 6% from prior year and fiscal 2010 third party revenues were $137 million, slightly above the prior year, as expected. As you know, this division serves OEMs in aerospace, defense, medical and industrial markets and it is a challenging environment there. It also plays a pivotal role in supporting the Security and Healthcare Divisions of OSI. Given its diverse customer base, Optoelectronics most reflects the macroeconomic environment and thus, we consider top line growth to be a very positive sign. We ended fiscal 2010 with a record high backlog of $240 million, an 18% higher than the prior year. With a record backlog and exciting propects in each division, we look forward to delivering growth in revenues and profits in fiscal 2011. With that, I’m going to hand the call back over to Alan to talk in greater detail about our financial performance before opening the call for questions. Thank you.

Thank you, Deepak. As mentioned on each of our conference calls over the past few years, we continue to focus on operating efficiencies in order to drive significant earnings growth and free cash flow. We are pleased to have been able to meet these goals in the challenging sales environment, though the fourth quarter certainly reflects a change. This provides us a great deal of confidence about OSI’s potential earnings power as business segments strengthen and revenues increase which is the situation we experienced in the fourth quarter. I will speak to our guidance shortly but first let me review the financial results of the quarter. As mentioned earlier, each of our divisions saw significant top line growth in the fourth quarter, specifically net sales increased 19% which was at the high end of our recent guidance to $165 million. This increase was driven in part by a 29% increase in sales in our Security Division, led by our people screening products. Net sales increased in our Healthcare Division by 15%, driven by improving conditions in North America and continued high demand in the emerging markets. In past conference calls, we mentioned that we did not believe that we were losing potential sales to our competitors and that the market would ultimately need to improve to meet pent-up demand. Sales in our Opto Division increased approximately 6%, driven by sales of our higher margin commercial Optoelectronics products. Due to our ongoing lean and global supply chain initiatives as well as the product mix and economies of scale, our gross margin improved significantly. We achieved a 450 basis point improvement in gross margin during the quarter, to 38.7% from 34.2% in the prior year as our gross margin improved in all three divisions. Our gross margin typically varies from quarter to quarter as a result of a number of factors including our product mix, unit volumes, pricing, inventory reserves and capacity utilization. For the fiscal year, our gross margin improved markedly to 36.6% from 34.1% in fiscal 2009. In support of our 19% Q4 revenue growth as well as anticipated growth in fiscal ‘11, our SG&A expenses increased in absolute dollars though it decreased as a percentage of sales on a sequential basis. For the fiscal year, with strong cost discipline, well embedded in the culture of the organization, our SG&A expenses were relatively in line with the prior year. We continue to invest significant resources in R&D to enhance our Security and Healthcare product offerings. To this end, our R&D spending in the fourth quarter increased by $1.7 million over the prior year to $11.1 million. This equates to 6.7% of net sales, which was comparable to the 6.8% reported in the prior year quarter. We continue to invest resources in technologies, to add value to our Security and our Healthcare product offerings. As a result, we believe these efforts will enable the company to capture major opportunities in our core markets in the future. Our effective tax rate for the fourth quarter was 37.9% and 32.7% for the full year. Our provision for income taxes is dependent on the mix of income from U.S. and foreign locations due to tax rate differences among such countries as well as the impact of permanent taxable differences. As we updated our tax provision following the filing of our tax returns including the review of permanent tax differences, such analysis resulted in a higher Q4 tax provision. And as a result of the improved financial metrics, we reported a significant improvement in our Q4 net income, resulting in a 75% improvement in our diluted EPS of $0.42 per share, compared to $0.24 in the prior year. However, if we exclude the impact of restructuring and other charges, our non-GAAP normalized EPS for Q4 would have been approximately $0.47 per share, as compared to $0.29 per diluted share in the prior year or an increase of 62%. For the full fiscal year, our normalized diluted earnings per share increased 53% to $1.39 a share. Moving to cash flow. We generated operating cash flow of approximately $12 million during Q4 and $52 million in fiscal 2010, driven by our improved profitability, coupled with continued focus on working capital management. For Q4, capital expenditures were $5.7 million, a majority of which was for equipment costs in support of our Security Division’s Puerto Rico project while depreciation and amortization in total was $5.4 million. As a result of our strong cash flow, we were able to reduce our debt balance by $16 million in fiscal ‘10 and finish the year in a net cash position for the first time since 2004. Generating strong cash flow continues to be one of our top priorities and we are very pleased with the consistent and sustained progress we have made in this effort. Now, let’s turn to our 2011 guidance. Though market challenges were present throughout fiscal ‘10, we feel in the fourth quarter results help to confirm that the top line outlook is much better than we have seen during the past two years. With this momentum and our record backlog, we anticipate fiscal 2011 annual sales growth of 7% to 10%. As with fiscal 2010, we expect that fiscal 2011 sales will be more heavily weighted towards our second half. We expect to continue our trend of improving our operating margins which will allow us to leverage the anticipated increase in sales and grow our earnings at a faster pace. As a result, we anticipate that our earnings per share, excluding the impact of restructuring and other charges, will increase strongly by approximately 20% to 30% to $1.67 to $1.80 per diluted share in fiscal ‘11. Turning back to fiscal ‘09, we undertook decisive and meaningful actions to right size our business in response to economic conditions and to cement a culture of continuous monitoring and management of our operating cost structures. In fiscal 2010, with the bulk of these efforts behind us, we continue the efforts though at a somewhat lesser pace. These actions position us for further earnings leverage in fiscal ‘11. During the past few years, we have transformed our company into a consistent performer, in a difficult economic environment, we have been able to significantly improve both earnings and cash flow and have built a strong foundation for significant future earnings power. Thank you for listening to this conference call. And at this time, I’d like to open the call to questions.

(Operator Instructions) Your first question comes from the line of Brian Ruttenbur from Morgan Keegan. Please proceed. Brian Ruttenbur – Morgan Keegan: Thank you very much. Great quarter and great year. Couple questions, couple housekeeping, security backlog again and then CapEx in the quarter and then CapEx related specifically the Puerto Rico, can you give me those numbers, Alan.

Sure, Brian. The security backlog at the end of June was approximately $145 million. The capital expenditures for the quarter, for the whole company was about $5.7 million and heavy proportion of that was for the Puerto Rico project. In total for the year our capital expenditures were about $18 million. Brian Ruttenbur – Morgan Keegan: Thanks. Is there any other CapEx related to Puerto Rico that is going to be coming in by year end, calendar year end.

We’ll see a little bit more in this quarter as we complete everything off, but bulk of the spending was put behind us in fiscal 2010. Brian Ruttenbur – Morgan Keegan: Okay. And then couple more housekeeping. Tax rate in fiscal ‘11 in that guidance, what tax rate are you using?

Well, we think our tax rate will be in the, sort of, the 30% to 31% range, plus or minus depending upon the mix of income from various countries, but in that general range, plus or minus. Brian Ruttenbur – Morgan Keegan: Okay. And then healthcare trends since the end of the quarter, how have they been doing? I know seasonally this is the weakest quarter for healthcare in July and August, those months. Can you talk about how -- what kind of trends you’re seeing year-over-year, has there been a dramatic drop-offs, obviously from the end of June, but how is it doing year-over-year?

Keep in mind, Brian that this quarter is the weakest quarter because everybody goes on holiday. We believe that for the year healthcare will show growth. Brian Ruttenbur – Morgan Keegan: Right. Are you seeing any kind of rebound from last year, July, August last year to July, August this year in the Healthcare Division?

We definitely see positive signs, but like I say if the customer has gone to vacation, it’s difficult to say anything. But definitely we are very positive for the year. Brian Ruttenbur – Morgan Keegan: Okay. And then the last question, confidence in Puerto Rico happening by calendar year end that’s gotten pushed a couple quarters, can you give us some specifics on why you’re more confident that it’s going to happen by December this year and versus earlier or later?

Brian, this is Ajay. We’ve obviously made quite a bit of progress over the last couple of months. As always, summer months are a little slow but we feel pretty comfortable that it’s going to -- our prediction that it’s going to start sometime in Q2. We’ve actually already delivered our first piece of equipment there so we’re going through the process. We’ll keep you informed. But right now, Q2 is what we’re looking at. Brian Ruttenbur – Morgan Keegan: Can you give me some kind of specifics? Is it working with organized labor down there? Is it getting the proper permits? Is it -- could you tell me what has caused the six month delay with Puerto Rico.

I think it’s a different stuff. But right now we’re down to really getting the sites prepared and the construction completed and that’s where we are. Brian Ruttenbur – Morgan Keegan: Okay. Thank you.

Your next question comes from the line of Rick Hoss of Roth Capital Partners. Please proceed. Rick Hoss – Roth Capital Partners: Hi. Good morning, gentlemen. The use of cash, anything there M&A, reinvest in the business any insight there?

Well, you know even if we have something, we’re not going to say it. But our balance sheet is getting stronger and we look at all opportunities both internal growth, both in the healthcare and security and opportunity wise we continue to look at all alternatives. Rick Hoss – Roth Capital Partners: Okay. That’s more what I was getting at, it would be both security and healthcare.

Yeah. Rick Hoss – Roth Capital Partners: Okay. And then Alan, restructuring in 2011 continue charges, how should we look at that?

Yeah, Rick. We think the bulk of the heavy lifting on the restructuring that we have done over the past several years is behind us. But in our ongoing mantra of continuous improvement, seeing where we could further make some changes, there may be some restructuring that is done in physical 2011, but we would anticipate that that will be at a lesser amount than in years past and maybe more on the international side. Rick Hoss – Roth Capital Partners: Okay. So maybe a million, million and a half for the year something like that?

We would anticipate it being less than we just had in fiscal 2010, yeah. Rick Hoss – Roth Capital Partners: Okay. And then an update on the displacement of metal detectors, that seems to be a theme in the more higher throughput airports and then along the same lines, maybe Ajay you can answer this, what sort of -- can you give a comparison on the throughput times? I know TSA was evaluating the whole body imaging versus the removal of your shoes and your computer or I guess your computer -- removal of your shoes and your jacket and other things?

You know, I think that we’re obviously working very closely with TSA and other customers and the specifics, it would be unwise for me to comment on, but we’re moving along and obviously from an operational standpoint, TSA and others want to make this as seamless and as fast as possible going forward. In terms of the first part of your question on the metal detectors, it’s a process that we’re going through, keep in mind, metal detectors is not just aviation, metal detectors is a much wider market. Aviation is a very small part of that market. So we’ll see how that trend goes over the next few years but it’s really not something that we’re that concerned about. Keep in mind, metal detectors is a small portion of our overall business. Rick Hoss – Roth Capital Partners: Right. I guess, my question is what are metal detectors really detecting these days, I mean other than the obvious metallic threat of some sort, but I think all threats at this point have moved beyond that, right? So I mean, is that question asked and what are you really -- what’s the function of them?

Roth its Deepak here. I think the metal detector is not being eliminated. I think it will become an integral part of the inspection. Rick Hoss – Roth Capital Partners: Okay. Thanks, gentlemen.

Your next question comes from the line of Tim Quillin of Stephens Inc. Please proceed. Tim Quillin – Stephens Inc.: Nice quarter.

Thank you. Tim Quillin – Stephens Inc.: With, Alan, I guess first of all, did you say that depreciation and amortization was $5.4 million in the fourth quarter?

Tim, that is correct. Tim Quillin – Stephens Inc.: What are the expectations for D&A in fiscal ‘11?

We would anticipate that D&A for fiscal ‘11 will be at a little bit lower run rate than what we saw in the fourth quarter as some of our stuff has become fully retired. Tim Quillin – Stephens Inc.: Got you. And how about you mentioned that there’s still maybe a little incremental CapEx from Puerto Rico in the first quarter but what are your full year CapEx expectations?

We generally see our CapEx somewhere in the neighborhood of $15 to $17 million type range excluding any future type projects such as Puerto Rico. Tim Quillin – Stephens Inc.: Okay. And you’ve done a great job over the past few years of making some improvements in working capital. Do you still see room for improvement in inventories or receivables?

Yeah. Thanks. Our teams really have done a fine job improving our overall working capital management. That being said, I think there are still further opportunities for us, more in the area of our inventory turns, our DSOs, I think we will never satisfied that it’s optimized, I think we’ve done a pretty good job. I think there is a little bit more opportunity for us to continue to improve our overall inventory turns but all three divisions made substantial progress in fiscal 2010. Tim Quillin – Stephens Inc.: Good. Ajay, there’s a lot going on the security side. A lot of different opportunities, maybe a broader set of opportunities you’re addressing than ever before. But if you put that all together, what are you thinking in terms of growth expectations in fiscal ‘11?

I think -- let me just answer the first part of the question. We’re looking at opportunities, whether it’s in the Cargo area, whether it’s in our conventional people screening, pretty much all over the place, domestically, internationally and our activity, quotation activity is in some areas strongest I’ve ever seen. So we feel very good about that. In terms of specific growth rates, I think I’ll defer to Alan on that, but we feel very good compared to what we’ve obviously done last year.

Alan, you want to comment on it?

Sure. I think the growth profile in our Security Division is very attractive. We would be anticipating, seeing something in the mid to possibly even high teens type of growth rate. Tim Quillin – Stephens Inc.: That sounds great. And on the healthcare side, you mentioned that you’ve diversified or managed to penetrate some of the international markets but what is the outlook for the domestic Healthcare business?

Better than last year. Tim Quillin – Stephens Inc.: Let me ask it this way. Is the growth in the Healthcare business primarily going to come from the international markets, or do you expect the domestic rebound to be strong enough to be the primary driver of growth?

In both. Basically we have invested a lot over the last couple of years in new products, some of them geared up more towards the international market, but as you know, a big focus of our business, revenue comes from the domestic side. So both sides, domestic and international, we expect growth. We expect the Healthcare Group to be at, in the single digit growth for the year. Tim Quillin – Stephens Inc.: Okay. A couple years ago, I think especially we had thought that maybe when you got the Healthcare business to a certain level of profitability and felt that it was worth or it could get fair value for it, that you might sell it. What is your thought, your current thoughts on the potential sale of the Healthcare business? Thank you.

I’m not going to answer that anyway. All I’m going to answer is that as a group management, we are very excited about all the three segments of our business and especially with some of the things we have done in the Healthcare business, at such a leveraged thing that any revenue increase drops profit to the bottom line. We’re building up all businesses. Tim Quillin – Stephens Inc.: Great. Thanks a lot.

Your next question comes from the line of Michael Kim from Imperial Capital. Please proceed. Michael Kim – Imperial Capital: Hi. Good morning, guys. First, on the security revenues in the quarter, was the growth primarily -- was the growth fairly broad-based across cargo and conventional or did you see particular strength in an area and also was the contribution partially driven on the body scanning side? Thanks.

I think the growth was broad-based but it was definitely more on the conventional side. We saw a very strong quarter there as well as on the body scanners and I think that going forward, we’re obviously hoping to get broad rate growth across the board. Michael Kim – Imperial Capital: And just specific on the body scanning side, have you seen any indications of a change in the deployment schedule, if you had to look over the next 12 months, just given some of the commentary from TSA and how that intersects with your expectations?

We work with the TSA and specifically on schedules, I can’t comment. Obviously they look at what their needs are at specific airports and we follow what those needs are. Michael Kim – Imperial Capital: Okay. And then just turning on the cargo scanning services side, are you seeing increase in your pipeline with some additional opportunities beyond Puerto Rico or is it your sense that a lot of ports are maybe looking at Puerto Rico as a test case and then making decisions after that?

I think it’s a combination of all. I mean, we are seeing very strong activity on our cargo. We are looking at other opportunities, specifically on the scanning side. And I think that we’ll keep you informed quarter-by-quarter basis, but like I said earlier, the pipeline is very robust right now.

Just to add on to it, our activity in the cargo sector especially has never been as strong as we see today. Michael Kim – Imperial Capital: Great. And then Alan, one quick question for you. With R&D at somewhat of an elevated level, do you expect that to carry through the remainder of the fiscal year or are there a number of projects that you would expect to taper off toward the second half?

Yeah. As Deepak mentioned a bit earlier in the call, we have a number of new product introductions coming out in both our healthcare and in our security portfolios. So as a result, we would anticipate that our R&D spending for the year will approximate on a percentage of sales something similar to what it was this year or maybe even a slight uptick, though of course in absolute dollars that would represent a little bit more investment for the new product offerings that we have coming out. Michael Kim – Imperial Capital: Great. Thank you very much.

(Operator Instructions) Your next question comes from the line of Josephine Millward, The Benchmark Company. Please proceed. Josephine Millward – The Benchmark Company: Good morning.

Good morning. Josephine Millward – The Benchmark Company: Great quarter. Deepak and Ajay, it looks like you had very strong security bookings relative to what you announced. You only press released about $25 million. Now, can you give us more color on the orders you received during the quarter in security, whether they were mostly cargo, conventional x-ray, body scanner and what drove such strong bookings? Thank you.

Josephine, we’ve always said that we don’t announce every order that we book. The very fact that we did not announce all the other orders was the reason we didn’t want to announce. Josephine Millward – The Benchmark Company: So you don’t want to talk about them?

Yeah. Josephine Millward – The Benchmark Company: Okay. Now, Deepak, traditionally September is a very strong bookings quarter for you and do you expect this trend to continue in light of the protest that’s ongoing with customs and border protection? And how do you expect the protest at CPB and the state department to be resolved? Can you give us timing and how you think this is going to play out?

Well, again, on both those items, I’m not -- we’re not going to comment on it. They’re active, they’re active. As far as September quarter, that’s true, it’s relatively a strong quarter because of year end and we expect the bookings to be quite good. We expect this year security to have a very healthy growth. Josephine Millward – The Benchmark Company: That’s great. On that subject, can you give us a sense of what your assumption is for Puerto Rico in the coming fiscal year, just roughly? Because I know it depends on how the program ramps, but if you could give us a sense of what you have reflected in your guidance.

Well, number one, we have said that we would be able to talk more once the program starts, so I think at the next conference call as we are expecting Q2 to start some of the revenue. We will be able to talk a little bit more. All we can say is that we are very excited about it.

Great. Can you talk more about your new product introduction in security? Because it sounds like you have been developing products to address specific customer requirements. If you can speak in general terms about what areas you’re targeting and when we might see these new products?

Ajay?

Josephine, I think we’re obviously always looking at different areas and definitely looking at being customer centric and see what solutions we can provide to our customers. Having said that, if you look at the new products that we’ve introduced in the last year, they are in our cargo, metal gates, people screening and WBI and in our conventional product line, so it’s really across the product line and as we see new threats emerging, as we see new opportunities, that’s what we are going to address and that’s what we’re going to do moving forward as well.

Just to add on to that, Josephine, as we’ve always said, we are a broad-based scanning company. We have a very good pipeline of new products in all areas. We expect new product introduction in cargo as Ajay mentioned. We have new introductions in body scanning. We have new introductions in metal gates, new introductions in all products. Josephine Millward – The Benchmark Company: Okay. Can you give us an update on your development for checked baggage? My understanding it’s -- TSA, it continues to push the checked baggage explosive detection system upgrade to the right. We may not see a qualified vendor list until early next year. Can you talk about how this might impact your effort and where you might see this market going?

Well, we’ve always said that’s one area of the market we’ve invested quite heavily and we continue to invest in that marketplace.

It’s an ongoing process.

It’s an ongoing process. Josephine Millward – The Benchmark Company: So do you see that delay as a positive or negative? And where do you stand in the certification process?

We’re not going to comment on that.

I think that we just have to do what the government wants us to do and that’s what we’ll follow through.

You can appreciate it for competitive reasons. We don’t want to comment on where we stand. All we can say is we’re very happy with our progress. Josephine Millward – The Benchmark Company: Thank you very much.

You have no further questions at this time.

In closing, I would just like to iterate that this has been a great year for us. Q4 gives us an indication what 2011 is going to look like. We are already excited about all three divisions. And I want to thank all the employees. It’s been hard work. It’s been a challenging environment. We are very excited about our Security Division prospects. We are very excited about our Healthcare Division prospective and the Optoelectronics group as the economy improves will also see positive results. Thank you very much.

Thank you for your participation in today’s conference. This concludes the presentation and you may now disconnect. Have a great day.