Good day ladies and gentlemen and welcome to the first quarter 2011 OSI Systems earnings conference call. My name is Chris and I’ll be your operator for today. (Operator Instructions). As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Mr. Alan Edrick, Chief Financial Officer. Please proceed.

Thank you. Good morning and thank you for joining us today. I’m Alan Edrick, Executive Vice President and Chief Financial Officer 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 Council. Welcome to the OSI Systems first quarter of fiscal 2011 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 and 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 rating 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 first quarter results. The press release has also been filed with 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 first 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 continue to invest in key sales markets and R&D programs to drive bookings. As a result of these programs, which have led to an outstanding backlog, we anticipate seeing an acceleration of sales growth, that when coupled with our demonstrated margin expansion, is expected to continue the strong earnings momentum. Highlights for our first quarter of fiscal 2011 are as follows. First, Q1 bookings of $196 million were outstanding, shattering our previous record of $175 million. This led to a record backlog of $308 million, a 28 percent increase from the June backlog of $240 million, which in and of itself was a record. Leading the growth was our Security Division, Rapiscan, which posted a Q1 book to bill ratio of 2.2, resulting in a new record Security backlog of $205 million. Although a small portion of the growth in backlog was driven by the push out of deliveries based upon customer requests which impacted Q1 sales, the vast majority of the growth was driven by very strong U.S. Security bookings. We also saw growth in both our Healthcare and Opto Division backlogs, providing added visibility for sales growth over the remainder of our fiscal year. Second, although sales declined four percent for the quarter, due in part to customer push outs as just mentioned, we reported a 36 percent increase in Q1 to diluted earnings per share excluding restructuring charges. This quarter’s results mark the strongest Q1 EPS in the past eight years and the thirteenth quarter out of the last 14 that we generated year over year earnings growth. Continued improvement in operating efficiencies, leading to gross margin expansion, coupled with the cost containment initiatives drove the solid improvement. Third, we reported positive free cash flow for the eleventh consecutive quarter for an aggregate of over $82 million generated over this period. For the quarter, we generated approximately $8 million in free cash flow, representing approximately $0.40 per share. And fourth, subsequent to quarter end, we announced the completion of a new $250 million credit facility on very favorable terms. Concurrent with closing the facility, we applied a portion of our existing cash balances to pay off a term loan of approximately $25 million that was outstanding under the former facility. As a result, our debt now consists of about $4 million in real estate loans and capital leases. We believe this new five year facility positions us exceptionally well to capture growth opportunities. We entered Q1 with strong expectations for bookings. We are pleased to have surpassed our internal expectations at quarter end backlog and believe we are well positioned for strong top line growth and operating margin expansion. I will provide additional financial details and will discuss our fiscal 2011 guidance. But first, let me turn to call over to Deepak.

Thank you Alan. And again, good morning and welcome to the OSI System earnings conference call for the first quarter of fiscal 2011. We are very excited to see the tremendous demand in the marketplace for our products. The strong bookings during the quarter resulted in ending backlog of $308 million which is a company record. I would like to spend some time focusing on the highlights for the quarter, and discussing each of our businesses. Let’s start with our Security Division, Rapiscan, where bookings increased 46 percent to $112 million, a new record. The Security backlog was $205 million at the end of the quarter, approximately 41 percent higher when compared with the first quarter of the prior year. Our sales were up eight percent in Q1, and would have been higher if not for the timing of a few shipments where customers pushed out the delivery date to Q2. In September, we received the largest indefinite delivery, indefinite quantity order in Rapiscan’s history when we were awarded a $325 million contract by the U.S. Transportation Security Administration for the Rapiscan 620 Dual View advanced technology check point X-ray baggage inspection system. We already received a $35 million purchase order from the TSA under the terms of this five year IDIQ. We anticipate additional orders in the future as the TSA continues the replacement of the present check point systems. In addition, we received a major award to provide inspection systems that protect borders, travelers and critical infrastructure. These wins are from government and commercial customers from a variety of geographic regions. We also gained several new customers both domestic and international for our Eagle Mobile High Energy X-ray cargo and vehicle inspection systems, which can identify the presence of weapons, explosives and narcotics. The Eagle series is a road mobile inspections system that can be quickly deployed in minutes at a port, check point or border crossing and allows the customer the flexibility to optimize the system’s usage and re-locate it to another area of likely threat. We anticipate further growth in the cargo market segment with our Eagle product line for cargo and vehicle inspection products as we have set the industry standard for detection excellence through put, and reliability. Our Secure 1000 single port system, the world’s most widely deployed advanced people screening, body scanner solution, continues to be installed in new locations. Most notably, during the past quarter, Secure 1000 systems were installed at the Los Angeles International and Chicago O’Hare, some of the world’s busiest airports. As a background, in fiscal 2010, the TSA awarded Rapiscan a $173 million IDIQ contract to provide advanced imaging technology AID Systems, such as the Secure 1000. Because of Secure 1000’s superior imaging capabilities, we are also receiving strong interest from non-aviation customers. We have developed the Secure 1000 man portable, a ruggedized model that was developed specifically for applications that require rapid deployment, mobility and durability as well as superior threat detection. The Secure MP is an ideal portable solution for military, police, corrections, event security and protection of critical infrastructure to detect concealed threats and contraband items. We own a lot of IP intellectual property in this product line. In the Screening Services segment, the construction phase has begun by the Port of San Juan, Puerto Rico for this project. As you know, in fiscal 2010, we received a ten year cargo scanning services contract with the Port of Puerto Rico Port Authority. We anticipate that the operation will start for this contract towards the latter part of this quarter as construction activity has commenced at the port to ready the sites for screening. Our equipment has started arriving in Puerto Rico. We continue to see strong interest in the marketplace for a turnkey approach to meet screening needs. Our broad portfolio of screening platforms makes us an ideal partner for customers that have diversified screening requirements and seek a full service solution. A key to success in the programs mentioned above, have been our relentless focus on R&D and working closely with our customers to develop versatile solutions to address the evolving threats to public safety. Because of our strong capabilities in research, during the quarter, we were awarded a multi-year contract valued at up to $12 million if all options are exercised by the Domestic Nuclear Detection Office to develop advanced methods to detect nuclear materials. In addition to an established security customer base in the U.S., Europe and Latin America, we continue to gain new customers in Eastern Europe, India, Middle East and Africa for our advanced personal screening check point and cargo solutions. Our quotation activity has never been as strong as today. After the quarter ended, in early October, we also announced the High Energy Mobile Cargo order from Customs and Border Control for approximately $24 million. Let’s go to Healthcare. Despite a challenging environment, our Healthcare Division continues to perform admirably. On a sales base in the quarter that was lower by two percent, Healthcare delivered 90 percent higher operating income when compared to the first quarter in the prior year. As Alan mentioned, this was the best Q1 profit performance in the Healthcare Division’s history. In order to become more efficient, U.S. hospitals continue to make strategic technology implementations including upgrading station monitoring and data connectivity systems. As an example, during the quarter, the Healthcare Division won the opportunity to provide the patient monitoring and connectivity solutions to a prominent Florida hospital. The equipment will be installed throughout the hospital’s cardiology and cardiovascular units. Our connectivity solution ICS G2, enables the seamless transfer of critical patient data to the hospital information system. We continue to implement a strategy to meet the needs of smaller hospitals and clinics in the U.S. and focus on developing solutions that target emerging markets. As examples of international growth in Healthcare, we received a contract from the Indian government to provide advanced anesthesia work stations which integrate our Ultra View Patient monitoring and (Beleze) ventilation technologies. We also provided patient monitoring and ICSG-2 connectivity solutions to 14 hospitals in Romania. This was a World Bank project where we worked closely with the ministries of health and finance of Romania. These activities are the latest examples of our exciting progress in countries that have a growing need for cost effective health care solutions. As mentioned in our previous quarterly call, for the next 12 to 18 months, we would have the largest introduction of new products in the Healthcare Division. Optoelectronics Division – The Optoelectronics Division delivered an operating profit of $3.4 million on an 8.2 percent operating margin on a sales level, which was actually eight percent lower when compared to the prior year. Operating margins improved from the prior period and the lower revenue in the quarter was expected as the prior year quarter sales were favorably impacted by a major defense OEM contract. OSI has exciting prospects where we can grow through strategic investments in all our divisions. To that end, we recently entered into a new five year $250 million revolving credit facility. We are pleased to have entered into this larger credit facility that provides OSI with additional access to capital and enhanced features as compared with our prior credit facility. The facility, combined with a strong balance sheet positions us well to continue to implement our plan of growth both organically and inorganically to deliver further to OSI shareholders. I am proud of our team and its ability to manage the business, provide quarter over quarter growth in earnings and stay focused on our strategic objectives. With our robust backlog and abundant prospects in each division, I’m confident that we will continue to meet or exceed our objectives for 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 growth initiatives and operating improvements throughout the company in order to drive significant earnings growth and free cash flow. We are pleased with both the earnings momentum and free cash flow generated during what has been a challenging sales environment. This disciplined approach coupled with a very strong backlog provides us with a great deal of confidence about our potential earnings power as revenues increase. I will speak to our guidance shortly, but first let me review the financial results of the first quarter. As Deepak mentioned, net sales in our Security Division increased by eight percent led by continued strong demand for and shipments of our people screening products. Bookings increased 45 percent driven by growth in our baggage and parcel inspection and cargo product lines. Healthcare sales were again soft, declining by two percent and Opto sales, as expected, decreased eight percent as the prior year quarter was favorably impacted by heavy sales on a large defense industry contract that we have said would decline in volume going forward. Due to ongoing lean and global supply chain initiatives, as well as the product mix, our gross margin improved significantly. We achieved a 330 basis point improvement in gross margin during the quarter to 36.5 percent from 33.2 percent 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 product mix, unit volumes, pricing, inventory reserves and capacity utilization. With strong cost controls in place, our Q1 SG&A expenses were comparable to last year, decreasing about one percent. We continue to invest significant resources in R&D to enhance our Security and Healthcare product offerings. To this end, our R&D spending increased 16 percent in the first quarter to $9.2 million, with such incremental investment this quarter, occurring in our Security business. We continue to invest resources and technologies to add value to our Security and 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 quarter was 30 percent compared to 30.2 percent in Q1 last 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 a result of the improved financial metrics, we reported a significant improvement in our diluted EPS of $0.18 per share compared to $0.14 in the comparable prior year period. Excluding the impact of restructuring charges, our non-GAAP normalized EPS for Q1 would have been approximately $0.19 per diluted share, representing a 36 percent increase over last year. Moving to cash flow, we generating operating cash flow of $9.6 million during Q1 driven by our improved profitability as well as our continued focus on working capital management, resulting in strong collections, which were partially offset by a buildup of inventory to support the backlog. Capital expenditures were on the lighter side this quarter, totaling $2 million, while depreciation and amortization was about $4.5 million. We paid off approximately 47 million of debt during the quarter and subsequent to quarter end, retired $25 million of our term debt concurrent with entering into our new credit facility. Overall, our net cash position increased 64 percent in Q1. As mentioned in previous conference calls, generating strong cash flow continues to be a top priority, and we are pleased with the sustained progress we have made. With strong top line growth forecasted over the remainder of the year, investments and working capital are expected to be required. Finally, turning to our fiscal 2011 guidance; with the strong backlog providing improved visibility, we are anticipating sales growth of 12 to 15 percent over the remaining three quarters of our fiscal year. As mentioned on our last call, and consistent with our prior year 2010 results, we expect that fiscal ‘11 sales will be more heavily weighted towards the second half. That being said, we’re anticipating strong sales growth during the December quarter. We remain confident in the outlook on earnings. By leveraging our infrastructure on higher sales volumes, we anticipate continued net margin expansion. With the strong Q1 performance, a record backlog, we are increasing our EPS guidance to $1.70 to $1.82 per diluted share excluding restructuring and other charges, representing a 22 to 31 percent increase over fiscal 2010. During the past few years, we have transformed our company into a sustainable and consistent performer. The impact of the economic issues notwithstanding, we have also built a strong foundation for significant future earnings power. Given the operational improvements that we have implemented over the past three years, coupled with the restructuring activities that have reduced our cost structure, we believe we are well positioned for continued operating margin expansion in the coming year. Thank you for listening to this conference call, and at this time, I’d like to open the call to questions.

(Operator Instructions) Our first question comes from Brian Ruttenbur of Morgan Keegan. Please proceed.

Thank you very much. Good quarter. Questions first of all, Puerto Rico, can you tell me where they are? You said they started construction process. It should be a relatively short process. Is there anything else that would hang this up besides moving the dirt?

No. Brian, it’s Deepak here. You said it. It is moving the dirt. It’s pouring some concrete pads, building some walls around. We are watching it day by day and we still think that it will start and go live sometime this quarter.

OK. And so there’s no other government approval that once the construction is started there should be – unless there’s some kind of labor strike – there should be, everything should move forward then. Is that correct?

I don’t think so except if there is a Tsunami.

OK. Very good. Next quarter, moving on over to Alan, a couple questions. Gross margins were real strong this quarter, in first quarter. Do we expect that trend to be you know, in the 36 percent plus gross margin going forward for the next couple of quarters?

We do, Brian. I mean it certainly depends on our mix of products, but with the economies of scale associated with a larger revenue base, and increases projected in the various product lines that we’re thinking, we do anticipate that margins will at or higher than the amount you mentioned.

OK. G&A, R&D were a little bit less than we anticipated in the first quarter. You know, seasonally it’s relatively low versus the other quarters of the year. How should we be looking at G&A and R&D going forward on either a year over year or sequential basis or percentage of revenue, or give us something to look at.

Sure Brian. It’s Alan. From a SG&A perspective I would anticipate that on a percentage of revenue basis, it will continue to decline on a year over year basis. However, on an absolute dollar basis it will increase. Recall this being a lower revenue quarter; the variable costs associated with that such as commissions are lower. So anticipate that on an absolute dollar basis you’ll see a little bit of increase year over year and on a percentage of revenue, we’ll see a decrease.

OK. And then backlog and bookings, the trends are typically the summer months, the spring and summer months you have good backlog and bookings. Typically in the December and March periods you have not as strong of backlog. Is that a trend that’s going to continue or is the international market so strong on the security side that that trend will change?

Would you repeat that again Brian?

OK. So I’m basically looking at book backlog for the December and March period. I’m trying to figure out seasonally you have declines historically during those periods you know, from these peak levels. And I’m trying to figure out if you’re going to have a seasonal decline in the December and March periods this year or do you anticipate that there’s such strong business that you’re going to have actual increases in backlog from these levels?

I think Brian, this is Ajay. You know, keep in mind that obviously the fiscal year for U.S. ended in September and we had a record backlog of $112 million. Now traditionally yes, the second quarter, the backlog, the bookings have been lower. You know for us to comment quarter by quarter, it’s going to be very hard to do, but we do see internationally right now, very, very strong activity. And I think that’s the most I can give you at this point.

OK. So you still, you don’t see anything different on the U.S. side, but you see probably increased activity year over year on the international side. Is that fair to say?

Well yes. I think internationally you’re seeing increased activity. I think U.S. traditionally quarter two is lower than quarter one because of the fiscal year.

OK. And then last question on, just on Healthcare. How are things trending post the end of the quarter? Have things picked up in October?

Again, we can’t look at it by just month to month. Basically we feel very good about it, that the Healthcare and Optoelectronics both, the businesses will grow. The second half is going to be very strong.

OK. Thank you.

Our next question comes from the line of Rick Hoss of Roth Capital Partners. Please proceed.

Hi, good morning gentlemen.

Good morning.

I know you don’t break out Healthcare and Opto backlogs, but directionally can you tell us if Healthcare backlog grew sequentially and are these record high like Security and (thermal) company?

Hey Rick, this is Alan. Yes, we don’t tell exactly what the Healthcare backlog is. It has grown both sequentially as well as year over year.

OK. And this quarter’s backlog in Healthcare, is that an all-time high or no?

It is not at an all-time high, but it has increased nicely.

OK. And then Puerto Rico, are you still estimating revenue in the $10 to $30 million range per year? I know, I think it was announced as $100 to $300 million over ten years, right?

Well Rick, this is Alan. We have never given any guidance on revenue or profitability on the Puerto Rico contract. The numbers you’re referring to are certain estimates that have put out by different analysts. We have refrained from giving any financial guidance until we have a quarter under our belt.

OK. Fair enough. And then on the M&A side of things, are you seeing valuations start to come in line? It seems like with other companies that I follow, that there’s a wide gap previously over the last 18 months between valuations as far as sellers and buyers, and I’ve seen that narrow. Are you seeing the same thing?

Well obviously there are certain deals that have been done in the Security space especially, Reveal and some of the other ones. ICX, they are all over the place. I don’t know how to answer that between the sellers and buyers. I mean, we continue to monitor that and with a strong balance sheet we are looking at all opportunities to grow the company both organically and inorganically, not only just in Security but in Healthcare and Opto.

To put it differently then, today compared to say 12 months ago, are there greater odds for effecting a transaction?

Well you know, we have a pretty active M&A activity. We continue to look at it in all three areas, so I don’t know how to judge the odds one way or the other, but we definitely are looking all over.

OK. And then last, tax rate, did you say 30 to 31 percent for the full year? Is that what?

Yes, our effective tax rate for the quarter was 30 percent and we think that is a pretty good rate plus or minus for the full year.

OK. Perfect. Thanks guys.

Our next question comes from the line of Tim Quillin of Stephens Inc. Please proceed.

Good morning. Nice quarter. Can you give us an update on the progress with your RTT in certification and is it such that if you are able to get lab certified that you’ll have enough data through field testing in the U.K. that you can start selling once you get lab certified? Or how does that process work? Thanks.

Well right now Tim, we are in test. We’re very excited about our prospects both in U.S. and international. Because it’s active testing going on, it’s very difficult to comment beyond that. We continue to be excited about it.

Is it something where you have a time frame in your mind about when it could be certified?

I think, it this Ajay. For competitive reasons you know, I really don’t want to comment on it. You know we are actively pursuing various tests and I’ll leave it at that.

OK. And Ajay as well, can you comment a little bit about the pipeline that you have for the S2 Global business and I know there’s probably a lot of customers that will look at what’s happening in Puerto Rico, but maybe if you can give us a sense of how many customers will be looking at what you’re doing in Puerto Rico.

I think that you know, we’ve got interest pretty much on every continent and there’s a lot of questions, a lot of activity. You know the numbers, I’m not going to comment on, but very, very strong activity in that area and a lot of customers really like the concept that we’ve presented to them

Tim, this is Deepak. Just to add on to it, we said on the last conference call all cargo screening sale potential large contracts can also be a people scan contract, so we continue to mix both the potential for winning a sale and talking about whether their customer would like a people scan as a partnership. So it’s not that there are different buckets. We continue to look at it, and as I mentioned before, we have never seen the activity so much as we have seen today on these kind of cargo opportunities both or sale and for people scan.

That’s great. And Alan, I think you mentioned that you paid down the $25 million in term debt and I’m not sure. Does that mean that you used cash to pay it down, and what is your net debt position and what kind of interest expense should we be assuming for this fiscal year? Thanks.

Sure Tim. Yes, we had $56 million in cash at quarter end, and we utilized a portion of that cash to pay off the term debt of about $25 million subsequent to quarter end in October when we did the new facility. The new facility’s interest rate is at LIBOR plus two percent, which as you know is very favorable in today’s climate. Going forward, we would anticipate interest expense in the relative range of what you’ve seen before because recall that interest expense is not only term debt, but it’s letters of credit, and as our business is growing with Rapiscan, there’s more and more letters of credit and bonds used to support that growth, and of course with a larger facility, the unused commitment fees.

OK, great. Thank you

Our next question comes from the line of Michael Kim of Imperial Capital. Please proceed.

Hi good morning guys. Just Alan, going back to your guidance, and maybe at a high level, can you, I think in the past breaking out Security and Healthcare and Opto, at least just in general terms and if you think revenue in Security continues to grow somewhere in the mid to high teens and Healthcare single digits.

Sure Michael. We tend to give guidance on an overall OSI wide basis as opposed to per division. We do believe that the growth in fiscal 2011 will be led by Rapiscan which will have a high double digit type growth and that will lead the way in both of our sales and earnings momentum.

And then just on Opto, I think you commented that you’re continuing to expect positive growth in the Opto division. You know considering the first half was pretty difficult comp year on year are you referring to second half being positive over second half last year or for the entire fiscal year achieving growth?

Well we believe that there’s an opportunity for the entire fiscal year to achieve growth, but certainly your comment is right. With very difficult comps, particularly in Q1, the real growth that will be taking place in the Opto division is more second half loaded similar to the entire company, though we are anticipating a pickup in our second quarter as well.

And then just in terms of, though I guess the sequential growth through the rest of the year, would the customer delay in Q1, is it your sense that Q2 you know, looks a little bit more flat with the second half than what we saw in prior years?

We tend to see – this is Alan again – we tend to see some seasonality whereby Q2 and Q4 tended to be our strongest quarters. Q1 and Q3, a little bit lower. I think with the strong backlog that we have, that does lend some credence to Q3 being stronger than it has historically been and seeing a Q2, Q3, Q4 all three of those quarters actually being quite strong in and of themselves.

And the customer delay, was that on your part or was it on the customer’s essentially pushing out their delivery timing. Can you expand on your commentary?

It’s Deepak here. It’s the customer’s request.

And what was the magnitude of that shift? Can you frame in rough terms what that looked like?

This is Alan. It was in the neighborhood of about $7 to $8 million.

And then Ajay, just a couple of specific programs on AIT. I think one of your competitors submitted some software upgrades for testing. Are you also submitting some upgrades for privacy considerations and how that might affect the delivery timing for the balance of the year?

We are working very closely with the TSA and you know, submitting all kinds of software upgrades that they’ve requested. And in terms of specifically, what they do, what they don’t do, I’ll defer that to the TSA, but we are also working very closely with them.

Is there any reason to expect that their target year end for the AIT program would be any different based on your, what your visibility is right now?

Right now, whatever they told us is what we’re going through with. We don’t see any differences from what they’ve told us over the last several weeks.

OK. And then just briefly on the AT X-ray, you know obviously very nice sized IDIQ. You have one other major competitor there. Do you have a sense that there would be a significant shift in the mix from the previous deployments or pretty much as is with previous years?

Oh, you know I think we feel very good. We have the largest share in terms of total quantity and we feel very good about our prospects going forward.

OK. Great. Thank you very much.

Our next question comes from the line of Josephine Millward of Benchmark Company. Please proceed.

Morning.

Good morning.

Deepak, can you talk about what are you only expecting high single digit, sorry, what are you only expecting you know, mid to high double digit growth in Security when your Security backlog is up you know about 40 percent and it doesn’t include Puerto Rico. Shouldn’t Security grow, do better than that in fiscal ‘11?

This is Deepak here. Alan, just to correct, I don’t think we’ve ever said Security single digit. We have said ...

Oh no, I meant a double, mid 15 to 20 percent. Sorry, I you know, I didn’t get that right, but that’s what I was asking.

Well, backlog is strong is strong. As you know, the (government) fiscal year ended in September. We’ve always historically had this quarter quite strong and we look at it as Ajay mentioned, the international sector is also, we’re anticipating good growth. I think in the teens is a very healthy growth for Security and definitely in all the calls, we do not include (inaudible) in our backlog.

But Deepak, I’m asking, what I’m asking is if you think Security can do better in the coming year based on your bookings and your backlog, because your Security backlog is up 40 percent from last year.

Alan, you want to add? I still don’t understand the question, Josephine.

Well, I think your expectation for growth in Security in the coming year, it’s in the mid-teens right, or higher. You know my question to you, do you think you Security can do better you know based on the strong bookings we’ve seen during the quarter. I don’t understand why your outlook isn’t better because of all the business you’ve booked in Security.

I think we are a very conservative company.

OK. That’s fair. Can you give us an update on the new distribution channels targeting small to medium hospitals in the U.S. and how much revenue contribution do you anticipate from these new channels in the second half for Healthcare, and a breakdown for emerging markets in your Healthcare business in terms of revenue mix.

Josephine you know that I’m not going to give you that information. We never break it down to that detail for competitive reasons, so we do, Alan has mentioned many times on previous conference calls, we have a manufacturer’s rep channel that we hired sometime a year ago. We are excited about the prospects. We have a whole portfolio of new products coming out both geared up for those smaller hospitals and the emerging markets. But to break it down into those kind of categories, frankly even, firstly I don’t have it at my fingertips, but even if I do, I cannot give that away for competitive reasons.

OK. What about, do you think is your plan on track and do you anticipate growth in contributions on these new distribution channels you have here?

Yes we do.

That’s great. In terms of Opto, I believe you have a round $40 million of business to offset this year from ITT, for the electronic jammers. Is that right and do you think Opto could get too flat this year?

Josephine, this is Alan, and yes that was significant business last year. Recall that that is not a number that needs to be replaced in its entirely because there continues to be business in fiscal 2011, and significant business. We do believe there is the potential or Opto to even grow this particular fiscal year, even with that change.

Thank you very much.

There are no further questions at this time.

Thank you very much. In summary, I’m very excited about the prospects going into Q2, Q3, Q4 with a very strong backlog. Our prospects in Security both domestically, internationally look very good. We’re looking forward to starting the Puerto Rico program. Healthcare though continues to be challenging. We see growth opportunities both in the domestic and the international market. We have a whole portfolio of new products coming out in the next eight to 12 months in the Healthcare area. The Opto as Alan mentioned, we have some great prospects. So we look at it that the Q2, Q3, Q4 are going to be growth, profitable, and we’re very confident about our prospects. Thank you very much.