Alan I. Edrick - Chief Financial Officer, Principal Accounting Officer and Executive Vice President Deepak Chopra - Founder, Chairman of the Board, Chief Executive Officer and President Ajay Mehra - Executive Vice President, Director, President of Rapiscan Systems and President of Security Division

Timothy J. Quillin - Stephens Inc., Research Division Matthew Dolan - Roth Capital Partners, LLC, Research Division Yair Reiner - Oppenheimer & Co. Inc., Research Division Brian W. Ruttenbur - CRT Capital Group LLC, Research Division Josephine Lin Millward - The Benchmark Company, LLC, Research Division

Welcome to the Q3 2013 OSI Systems Earnings Conference Call. My name is Richard, and I'll be your operator for today's call. [Operator Instructions] Please note that this conference is being recorded. I will now turn the call over to Mr. Alan Edrick. Mr. Edrick, you may begin. Alan I. Edrick: Good morning, and thank you for joining us. I'm Alan Edrick, Executive Vice President and CFO of OSI Systems. And 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 Third Quarter Fiscal 2013 Conference Call. We'd like to extend a special welcome to anyone who is a first-time participant on our conference calls. Earlier today, we issued a press release announcing our third quarter fiscal 2013 financial results. Before we discuss 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 officers on this call about future company performance, as well as certain responses by company officers to questions posed about future operating matters. 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 or its officers. These factors include the risk factors set forth in the company's last annual report on Form 10-K and other 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, subsequent events, future results or otherwise. During today's call, we may refer to both GAAP and non-GAAP financial measures of the company's operating and financial results. For information regarding non-GAAP measures and comparable GAAP measures and a quantitative reconciliation of those figures, please refer to today's press release, which has been furnished to the SEC as an exhibit to a current report on Form 8-K. Before turning the call over to Deepak to discuss the business in more detail, I will provide a high-level overview of our financial performance. We will again touch on several themes that we discussed during past conference calls. Highlights for our third quarter of fiscal '13 are as follows: First, despite a challenging macro environment, we again reported record Q3 earnings, as we experienced significant expansion of our gross and our operating margins, leading to earnings per diluted share of $0.74 excluding restructuring and other charges. This marks the 15th consecutive quarter in which we have generated double-digit year-over-year non-GAAP EPS growth. Second, the record earnings were especially noteworthy given that Q3 sales were down. Strong operating margins from our Security business, including turnkey screening services and diligent cost management, which has been a hallmark of our financial management, again paved the way to significant earnings growth. From a top line point of view, we had an extremely difficult comp. Last year's Q3 sales growth of 19% was driven in large part by $42 million in sales from our $98 million U.S. Army entry control point systems integration contract. As a result, we saw an 11% decrease in sales in Security in Q3. However, excluding the impact from this large contract, OSI sales increased 18% over last quarter, and our Security division grew 41% in Q3 of fiscal '13. Our opto division continued the strong revenue momentum it has displayed throughout this year, posting 10% growth. The Healthcare division results were again less than expected. You will recall that in our December quarter, Healthcare sales were down 5% due primarily to a significant decrease in EMEA sales. We believe last quarter's EMEA sales were an anomaly, and that seems to have been the case as they increased slightly in Q3 year-over-year. However, we experienced softness in North America and the emerging markets, which led to a 9% overall decrease in revenues. We will speak more to this later in the call. Third, our bookings were very strong in both opto and Security. Our backlog is over $1 billion, which is comparable to the amount as of December 31, 2012, and provides very good visibility for both divisions over the next year. And finally, our multi-year Mexico turnkey program continues to ramp up nicely, and we remain on track to meet the timelines discussed on our last call. We are very pleased with how the turnkey strategy has unfolded, and with the large majority of the project CapEx investment behind us, we expect our current business can generate significant free cash flow over the next 12 months and beyond. Although the top line was challenging in Q3, we are pleased to report another strong quarter of bottom line performance, and we remain very enthusiastic about our future. Over the past 5 years, we've been focused on expanding our operating margins, and the results of fiscal '13 to date again show strong growth on this goal. I will provide additional financial details and will discuss our fourth quarter guidance, but first, let me turn the call over to Deepak.

Thank you, Alan, and again, good morning, and welcome to OSI Systems' earnings conference call for the third quarter of fiscal 2013. As Alan mentioned, in spite of a couple of soft revenue quarters, OSI achieved year-to-date revenue growth of 3% and leveraged this modest top line growth to a very strong EPS growth, which Alan discussed earlier and will provide additional details shortly. We entered the year aware of a very tough revenue comparison in the second half related to last year's $98 million integrated products contract by our Rapiscan Security division. We believed that despite the tough comps, we would be able to grow with a strong pipeline of opportunities. The impact of delayed U.S. spending in security and hospital purchases, as well as continued weakness in the European government sector, has caused a reduction in our revenue. Although our current revenue guidance for the full fiscal year is about $65 million lower than our initial estimates at the midpoint, our team's ability to expand margins has been superb, providing us confidence in our ability to meet the earnings goals we set out at the beginning of the fiscal 2013. This performance is a testament to our team's ability and agility in its planning and execution and response to changes in the marketplace. In Q3, our revenues were $198 million, and we delivered an operating margin of 10.9%, excluding the impact of restructuring and other charges. We now have had 2 consecutive quarters of double-digit operating margin, a first for the company since 2003. We continue to maintain a robust product development and opportunity pipeline and manage for the long term while retaining the ability to withstand the global macro dynamics currently in effect. So even during flat demand in some regions, we continued to make market share gains by expanding our customer base and marketing recently launched products. As such, we believe we are well positioned for both strong top line and bottom line growth as we enter fiscal '14 in just over 2 months. Now let's review the highlights for the quarter for each division, starting with our Security division, Rapiscan. Over the past few years, our team has strategically added products and services to an already broad portfolio of inspection solutions. In addition to our core platforms based on excellent technology, we have added product lines for radiation monitoring and trace detection solutions, both well received in the industry. We also focused on developing our screening services model, and our efforts have resulted in 2 significant wins, namely the turnkey screening services provided to Puerto Rico and Mexico. All in all, Q3 was a very successful quarter for Rapiscan, with revenues growing 41%, excluding the Army integrated products contract revenue comp and an all-time record operating margin of approximately 16%. In spite of the uneven global economic recovery, Rapiscan made excellent progress in sales and bookings during the quarter, especially in key international growth regions. Our bookings for the quarter for Rapiscan were north of $80 million even with the uncertainty in Washington. Our Eagle Mobile and fixed cargo inspection systems continued to be attractive for customers that are increasingly participating in commerce and seeking greater border security. With a comprehensive set of nonintrusive inspection solutions, we are very optimistic about our potential to grow globally. We are in active discussions with aviation customers who have shown strong interest in adopting our ultra-high-speed Hold Baggage Inspection Screening technology, the RTT. As I mentioned in my last conference call that we were very confident and started booking orders for these RTT products by our fiscal year end, I am very pleased to announce that we have received our first orders for the RTT product from an international customer in this quarter. That's Q3. I should also note here that we continue to work with TSA towards certification of the RTT for the U.S. aviation market and are targeting to the end of calendar year as mentioned earlier. We're also in great position with our turnkey services business. During the quarter, the project in Mexico continues to make strong progress. With Puerto Rico and Mexico now running, we are capitalizing on worldwide interest for turnkey screening services and are in active discussions with potential customers. Moving on to Healthcare division. Spacelabs had a tough quarter as revenues declined. During the quarter, as Alan has mentioned, we did see a modest improvement for growth in the EMEA region from last year. Although revenues in the U.S. were softer due to customer pushouts and the continuing uncertain economic recovery. Regardless, we continue to be relentless in our driving towards our long-term goals. We also continue to gain traction with the recently launched products and are in a good position to capture new opportunities in our fourth quarter and beyond. We are very confident about a strong fourth quarter. Our new state-of-the-art anesthesia system, Arkon, has been well received in the market during its initial introduction, and our GPO relationships and direct sales force continue to drive the expansion of the opportunity pipeline engaging new customers for the XPREZZON patient-monitoring line of products. Moving on to our Optoelectronic division. We are very proud that the division grew revenues by 10%. We continue to gain new customers in several key industries and are well positioned to grow by leveraging our global manufacturing footprint. Achieving record Q3 earnings with a lower top line makes us more confident in our ability to successfully manage our business through the choppy global economic environment we currently face and build long-term value. I would like to thank our employees, customers and shareholders for their continuing support. We look forward to a strong fourth quarter and soon embarking on an exciting fiscal '14. With that, I'm going to turn the call back over to Alan to talk in detail about our financial performance before opening the call for questions. Thank you. Alan I. Edrick: Thank you, Deepak. Our focus on higher-margin growth initiatives and operating improvements throughout the company has succeeded in delivering significant earnings growth. As our fiscal '14 is only about 2 months away, we are very excited about the prospects for both top line and bottom line growth, as we transition past the challenging second half comp. I will speak to our fourth quarter guidance shortly, but first, let me review in more detail the financial results for the third quarter. Net revenues in the third quarter of fiscal '13 were down 5% versus Q3 last year. As we said, revenues from our Security division decreased 11% in the third quarter. Though as we previously discussed, this was primarily due to the impact of the U.S. Army integrated products contract. Again, excluding the prior year impact on revenues from this program, our Security division sales increased by 41%. Our opto division continued the double-digit revenue growth momentum from the first half by delivering 10% sales growth as a result of continued success in broadening our customer base. And finally, as Deepak discussed, our Healthcare division revenues dipped by 9% in Q3 with some general global softness. We do believe this division is primed for a very strong sales in Q4. The Q3 gross margin of 36.2% was very encouraging, up by a significant 300 basis points from the same quarter last year. This increase was mainly attributable to a better mix of revenue in our Security division, including increased turnkey sales. As we move to OpEx, our Q3 SG&A was up just $700,000 despite incremental costs in our Security division related to supporting our turnkey screening services. And we continue to invest significant resources in R&D to enhance both our Security and our Healthcare product offerings. Our R&D spending as a percentage of revenue was 6.2% in the third quarter of fiscal '13, which was comparable to last year. We believe our efforts will enable us to capture major opportunities in our core markets, as we continue to introduce innovative products and programs to enhance future growth. We are seeing the results of these efforts in a significant number of new products that are being released. Our effective tax rate for the year is currently projected at 27.3%. The Q3 effective tax rate benefited from the reinstatement of the federal research and experimentation credit. Our provision for income taxes is dependent on the mix of income from U.S. and foreign locations due to tax rate differences among countries, as well as the impact of permanent taxable differences and valuation allowances among other items. Gross margin expansion, coupled with solid cost management, led to Q3 EPS per diluted share of $0.66 as compared to $0.62 in the comparable prior year period. And excluding restructuring and other charges, our non-GAAP EPS was $0.74 per diluted share as compared to $0.65 per diluted share for the comparable period. Moving to cash flow. As we mentioned on recent quarterly calls, we expect to see significant volatility in cash flow in fiscal '13, largely as a result of the Mexico program. Our cash flow from operations through the first 9 months of fiscal '13 was $57 million. This operating cash flow was used to partially fund our CapEx, which totaled $139 million in the first 9 months of the year. This is consistent with our previous guidance that CapEx will be significantly higher than historical norms in support of our Mexico program. In addition, we continued our stock buyback program and recently purchased approximately 8 million in stock during the quarter. Our Board of Directors has recently approved a 1 million share increase to the authorized shares for the buyback program. We expect the current business to lead to very strong free cash flow, with the heaviest part of the spending on Mexico behind us. Finally, turning to an update of our fiscal '13 guidance. As Deepak described, with U.S. government spending softer than previously anticipated and added conservatism on Healthcare following 2 disappointing quarters even though we fully expect a strong Q4, our guidance for fourth quarter revenues is $220 million to $230 million. It is again important to note that in the June quarter of fiscal '12, our Security division generated $47 million in revenue from the U.S. Army integrated products contract. Excluding these revenues, our guidance suggests Q4 revenue growth of 17% to 22%. During fiscal '12, over $90 million of the $98 million of this contract was recognized as revenues. As we head into fiscal '14, the sales headwind of this difficult sales comp from this contract is behind us. We continue to expect solid gross and operating margins, leading to significant growth in diluted earnings per share. We anticipate diluted EPS of $1.02 to $1.09 excluding restructuring and other charges, which represents 29% to 38% growth over fiscal '12 in our fourth quarter. During the past few years, we have transformed OSI into a company that consistently delivers a strong bottom line capable of significant free cash flow generation. The investments we had made in the past have enabled OSI to become the leader in turnkey screening services, allowing the company to perform very well despite a difficult worldwide economic environment. We believe we are well positioned for continued operating margin expansion in the coming years, and we look forward to sharing our progress on upcoming calls. Thank you for listening to this conference call. Operator?

Yes? Alan I. Edrick: We will open the call to questions.

[Operator Instructions] Our first question online comes from Tim Quillin from Stephens Inc. Timothy J. Quillin - Stephens Inc., Research Division: In terms of your guidance for the fourth quarter, could you just characterize the level of visibility that you have now relative to that guidance compared to the type of visibility you would have at this time in the quarter in previous times? If there's some way to quantify that, that would be great. Alan I. Edrick: Sure, Tim. This is Alan. As we're 3.5 weeks or so into the quarter, I think our visibility for the remainder of the fiscal year, which is now just a few months away, is stronger than it typically would be for when there's a longer period in time. We have very strong visibility, particularly into our Security and opto business. Our Healthcare business, as you can imagine after 2 disappointing quarters, has been thoroughly vetted for the fourth quarter. And although it's not a backlog business like Security and opto, we feel that our funnel of opportunities has frankly never been stronger. We believe that coming into the second half of the fiscal year that it was heavily loaded to the June quarter, though we are anticipating that March would have been stronger. But we do feel good overall. So overall, we feel very good about the visibility that we have and the guidance that has been provided. Timothy J. Quillin - Stephens Inc., Research Division: And just want to make sure I understand on the Healthcare side that you think there's the potential for growth in revenue year-over-year in the Healthcare segment in the fourth quarter? Alan I. Edrick: Yes, Tim, it's Alan. There certainly is that potential. Q4 last year was a very strong quarter for us. Clearly sequentially, the Q4 in June will be much, much stronger than March, but we do believe there is the potential for year-over-year growth in addition to sequential growth. Timothy J. Quillin - Stephens Inc., Research Division: Got it. Got it. And then, Deepak, it was great to hear that you've gotten at least one order for RTTs in Europe. If you could talk about maybe the size of that and what the pipeline looks like just in Europe for RTT?

Thanks, Tim. For competitive reasons, again, I don't want to talk about the size of the order except it is for multiple units, and it's at a very healthy margin. We are very, very happy about it, and the pipeline, not just in Europe but internationally, looks as strong as ever. Obviously, as we have said in the previous conference calls, with all these turmoil that's going on, there is always the tendency for customers to push. But they are approaching the red lines, and we are very, very confident that we will score this as a big home run. And we had mentioned before that we were confident of booking our first orders by the end of our fiscal year, and we are happy to announce that we did it in Q3, so very, very happy with that. Timothy J. Quillin - Stephens Inc., Research Division: Yes, that's a good news for sure. I know that -- I don't think you mentioned in your prepared script and haven't really wanted to talk too much about it, but there was -- the Department of Defense put out a formal notification to Congress on the potential foreign military sale to Iraq. And there was very specific quantities discussed in there, and at least a dollar amount that I know is maybe more of a ceiling amount. But it's a big potential order, and so I just want to understand how you're thinking about that in terms of the timing or what is the remaining process before you get to an order or orders there?

Tim, this is Ajay. I think that you've all read what the DoD announcement was, and we continue to work with them and the Iraqis. But at this point, it would be really inappropriate for us to even comment any further. When we have more information, when we have -- when and if we book the order, we'll talk about it.

Tim, this is Deepak. Just to add onto what Ajay's saying, you know our policy that until we actually book the order, we don't talk about it. This was a news by the DoD, not by the company. We obviously are excited. We are working on both sides, the Iraqis and the Americans. And until it happens, we don't want to talk about it. Timothy J. Quillin - Stephens Inc., Research Division: Okay. Now can you just confirm whether this would be funded by the U.S. government in any way and thus, subject to sequester?

I think we're not going to go into how it's getting funded, et cetera, but we don't anticipate the sequester to affect us. Timothy J. Quillin - Stephens Inc., Research Division: Okay. And then just last detail questions and I'll let others step in. But Alan, and you may have said this, but what was the depreciation and amortization for the quarter? And what do you expect that to be on a full run rate once you're done with the capital expenditures related to the Mexico project? Alan I. Edrick: Sure, Tim. Our depreciation and amortization for Q3 was a little bit north of $7 million. It will increase significantly as we move further along in the project. We don't guide to D&A as a specific line item level, but you'll start to see it in Q4 and Q1. You'll start to see a real ramp up in that depreciation and amortization number, leading to very, very strong EBITDA for the company. Timothy J. Quillin - Stephens Inc., Research Division: Yes. And how about the remaining CapEx? What kind of 4Q CapEx do you expect? Alan I. Edrick: We'll continue to have some significant CapEx in Q4, but it's going to moderate from the levels that we have seen previously, and as we head into fiscal '14, even further.

Our next question online comes from Matt Dolan from Roth Capital Partners. Matthew Dolan - Roth Capital Partners, LLC, Research Division: So I first wanted just touch on the operating margins. They're obviously trending higher especially on the Rapiscan side. Should we expect these gains to at least be maintained? Or is there room for additional expansion from here? I know you gave some commentary on '14 but maybe you can just directionally help us out. Alan I. Edrick: Sure, Matt. This is Alan. Yes, we're very pleased with our operating margins and our gross margins in Q3. We do believe that there's opportunities for those margins to continue to improve. Our core business in Rapiscan has been improving the margins. And certainly, the turnkey screening solutions part of our business has really been contributing nicely. And as that ramps up, it could lead to even higher operating margin expansion. So we are encouraged by that, and we do expect to see operating margin expansions going forward as well. So we think the rate you saw in Q3 can be improved upon. Matthew Dolan - Roth Capital Partners, LLC, Research Division: Okay. And then following up on the Healthcare side, I know in the U.S. earlier this year, utilization at the hospital level has been a little choppy. Is this something that you're seeing pockets of softness? Or is this more of a national general trend that you're seeing with that side of the business?

Matt, this is Deepak here. I think the better way to answer that is that since November, December, January, February, there's been what I call a drag. Everybody just basically went into what I call hibernation. The hospitals at the top level sort of put their orders on hold. We haven't lost any, and I'm sure you're talking to the other companies. Everybody's been sort of in a holding pattern, but we believe that just like what [indiscernible] was saying, what Alan said, I think people are just settling down, and it's going to open up. And we are very comfortable that Q4 will be as strong, if not, better than last year's. Matthew Dolan - Roth Capital Partners, LLC, Research Division: So just maybe to follow up on that, I think previously, you talked about getting towards a double-digit growth rate for Healthcare. Is that still a goal that's realistic for you over time?

The answer is yes, especially with the economy improving both here before in the rest of the world and this uncertainty going away and our extra benefit of the new product launch.

Our next question online comes from Yair Reiner from Oppenheimer. Yair Reiner - Oppenheimer & Co. Inc., Research Division: So first, I just wanted to follow up on the margin question. If we look specifically at the Security business, I think x some of the impairment costs and so forth, the margin is around 18%. Is there any reason to believe that, that is not the right base level to model for that segment going forward? Alan I. Edrick: Yair, this is Alan. Yes, your numbers are right, and it was a terrific quarter. And you're seeing the impact of turnkey increasing. There's always a different mix of business from a quarter-to-quarter perspective, so based on that revenue level and the contributions from different businesses, will play into effect what will happen to our operating margins in Security. But we do believe as a general nature that the operating margins are going to be significantly higher than we've historically seen in that business based on the business model changes that we've made and has been part of our strategy. Yair Reiner - Oppenheimer & Co. Inc., Research Division: Got it. And then in terms of the cash flows, you said they're going to be significant going forward. Is the right way to think about that is if free cash flow equal to or greater than adjusted income starting in the fourth quarter? Or if not, how should we quantify significant in this case? Alan I. Edrick: Yes, so what we do believe even beginning in this quarter, the June quarter, there's the opportunity for significant free cash flow, which could exceed the net income levels. A lot of factors go into that in terms of timing of collections and payments and the like. We expect to have a little bit more commentary on free cash flow as we head into fiscal '14. But we do believe that this quarter and future quarters is going to -- can generate some real significant free cash flow, which will result in a nice yield. Yair Reiner - Oppenheimer & Co. Inc., Research Division: Got it. And then a follow-up on RTT, I realized that maybe you can't start naming all of your prospects. But can you maybe give us an idea of what should we think about as the bogey for the contribution for RTT in FY '14? What would be a reasonable expectation for you internally in terms of what that new product can bring to the company next year?

Well, this is Deepak, Yair. Again, for competitive reasons, looking into 2014, difficult to go back and pin an actual number or the number of people we're working with. But we've always maintained that this is regulatory driven. It's a replacement cycle. And as the economies get stabilized in Europe and other places, we believe that this is a very big game changer for Rapiscan. There are a lot of potentials, and as we start putting the units out there, more and more people will get comfortable with it. So -- and I think we also said in the previous conference calls, it's not going to be a floodgate opening. I know people will try 1 unit, 2 units, multiple units, and then go look at it. And secondly, the other thing we want to caution everybody is the sales cycle and the install cycle is very different from a normal machine because you're integrating these complicated systems in the baggage handling system at airports. So we believe that 2014 will be a great start for us, and the ramp-up will start. And we look at it as a significant revenue and margin driver for the company. Yair Reiner - Oppenheimer & Co. Inc., Research Division: Great. And then just one more if I could. This one's probably for you, Alan. You've had to revise your forecast here for a couple of quarters in a row. And so I was just wondering maybe you can give us a little primer on the methodology that OSI uses to build its forecast and its guidance, and whether in light of the changes here over the last couple of quarters, whether you've seen a need to go back and revisit the way that process is working or should work going forward? Alan I. Edrick: Sure, Yair. It's a fair question in light of the changes the last couple of quarters. As we look back historically, we've had a pretty strong process and compiling our revenue forecast and our earnings forecast and then translating that into guidance. And in the past, there have been some quarters where we haven't made the revenue number as a consensus from the street, but we've made that earnings number. Certainly in light of the last couple of quarters, we have revisited our process because we've seen the -- we've seen some significant comedowns in the revenue guidance, as Deepak had alluded to, from the start of the year. Some of it, outside of our control. We did not anticipate the level of delayed spending both by the U.S. government and by hospitals. So as we look to do guidance going forward, we'll certainly compile our numbers and provide some -- probably some added conservatism in it. And we expect that, as we enter fiscal '14, the guidance that we'll provide for revenues and earnings will be significant yet achievable.

[Operator Instructions] Our next question comes from Brian Ruttenbur from CRT Capital Group. Brian W. Ruttenbur - CRT Capital Group LLC, Research Division: First question is on the body scanners. Is that issue 100% behind us? Have you gotten the final letters? What's left if anything?

Well, it's Deepak here, Brian. As we mentioned in the last conference call, we have resolved our agreement with TSA, and we are working diligently with TSA to redeploy these units at other government agencies. And the other thing is that the other area that we said in the last conference call with the DHS, there's no change from last conference call. We continue to work with them, and there is no progress of any conclusion on it. Brian W. Ruttenbur - CRT Capital Group LLC, Research Division: Okay. And then one -- a couple of other questions on timing of certification. I think that you had talked about at previous conference call that you think that this calendar year, it's realistic or a potential for realism on certification from the TSA for the RTT. Is that still going down the correct path for the timing?

That's true, Brian. To the best of our knowledge, we continue to work with them, and I did mention in my thing that we're still targeting before the end of the calendar year. Brian W. Ruttenbur - CRT Capital Group LLC, Research Division: Okay. So along those same lines, I think that in terms of Mexico-type business, you were targeting 1, maybe 2 new wins this calendar year. Is that still the case?

Brian, I just want to correct it. I never said 1 or 2. What I did say specifically is we are in active discussions with multiple customers. And we are feeling very good and confident that before the calendar year is over, we will have some more good news. Brian W. Ruttenbur - CRT Capital Group LLC, Research Division: Okay, very good. And then in terms of the RTT, can you talk at least the size of the order? Is it 1 customer, 2 customers? Is it 3 units, 1 unit? Can you give us some kind of guidance there?

You know my answer already. I'm not going to give you the amount, but I will answer to that question that it's one customer, and it's for multiple units. Brian W. Ruttenbur - CRT Capital Group LLC, Research Division: Okay. And there's competition out there, as I understand, for high-speed units, from Smith and others that are going into this area. Is anybody else getting traction, getting orders from that same customer or different customers that you're aware of?

This is, as we've said before, we are very, very happy that there is competition because as you go look at the new product, this is a revolutionary product, high speed, and it's good to have competition. We encourage our competition. And I'm not going to comment on it whether with the same customer we got the order, whether there's any traction from the other side. I'm sure that they are as active as we are looking at various potential customers. We are aware of them. We are happy to see them. We believe that in a side-by-side test, we still think that price to performance and ownership, we have the best solution. Brian W. Ruttenbur - CRT Capital Group LLC, Research Division: Okay, very good. Last question on Mexico, can you tell us how many sites are up and how many sites in total are going to be up by the end of June? Give us some kind of -- or percentages if you don't want to talk number of sites. You have 20% up or 50% up. Can you give us something along those lines? Alan I. Edrick: Sure, Brian. It's Alan. Yes, as we described before, we're not allowed to disclose the number of sites by our customer, very sensitive information. But we do believe that from a revenue perspective, we'll be -- we'll probably be recognizing somewhere close to 3/4 of the run rate in the fourth quarter thereabouts. So we're making great progress, and by the end of the calendar year, we expect to be, if not fully, nearly fully operational. Brian W. Ruttenbur - CRT Capital Group LLC, Research Division: So does that mean that the next quarter, the September period, then you would be at 90% or 100%. Is it the percent in terms of revenue recognition? Alan I. Edrick: Yes, it would be above where we'd be in June. So it'll be -- it will be climbing up, not necessarily the 90% or 100%, but it will be climbing up.

Our next question online comes from Josephine Millward from Benchmark Company. Josephine Lin Millward - The Benchmark Company, LLC, Research Division: Deepak, did you say Security bookings were $80 million for the quarter?

That's true, Josephine. And that booking number is non-any-turnkey business. Josephine Lin Millward - The Benchmark Company, LLC, Research Division: Right. Can you give me your Security funded backlog? Alan I. Edrick: Our Security backlog overall, Josephine, from -- excluding turnkey services increased from the same quarter, from basically from the December quarter. We're up about 5%. Josephine Lin Millward - The Benchmark Company, LLC, Research Division: Okay, that's helpful. So looking ahead in fiscal year '14, you're going to have a much easier comp without the army contract. You have Mexico ramping. Do you think you can return to double-digit growth in Security?

Definitely. Josephine Lin Millward - The Benchmark Company, LLC, Research Division: So -- and I know you're not entirely -- you're not done with your planning for fiscal year '14, Deepak. But can you just talk about what you see as key drivers in '14?

Well, Josephine, yes, in the Security area, we have maintained that we have multiple products. The key drivers that we are focused in are these turnkey screening service, the RTT product line, the cargo product line expansion and continuing to move forward with our new products, the Trace and the Radiation. In the Healthcare, we are very excited about the Arkon anesthesia ramp-up. We are also on the other new product launches, the XPREZZON, the qube and the other products. In the opto, we continue to look at gaining traction with new customers and with our global footprint in manufacturing continuing to work what we call a strategic way to look at our customers in the opto area where we carry them from fast turnaround prototyping in stateside U.S. to high-volume production without -- seamlessly without them having to go -- to look at a different vendor. So these are the main drivers. We continue to look at it. And as Alan has mentioned, besides the drivers to the top line, we continue to focus and continue to improve our operation efficiency to continue increase our margin expansion. Josephine Lin Millward - The Benchmark Company, LLC, Research Division: Just a follow-up, the Department of Energy had a solicitation for Radiation Detection through a program called the Second Line of Defense last year. Can you give us an update on where we stand on that program and whether you view that as an opportunity in the coming year?

I think we're going to get more clarity on that program probably in next fiscal year. There has been delays on that program, but we are actively working with them with the current program that we have. Josephine Lin Millward - The Benchmark Company, LLC, Research Division: Do you think there's going to be a new solicitation, Ajay? And can we see that before the end of this calendar year?

You know what, I think a lot just depends on what happens in Washington. I will be guessing, so I would leave it at that. When we have more information, we'll provide that to you. Josephine Lin Millward - The Benchmark Company, LLC, Research Division: And Alan, can you give me a tax rate for '14? What do you think we should use? Alan I. Edrick: Little bit too early to say for '14. We'll be providing our guidance on our next conference call. Josephine Lin Millward - The Benchmark Company, LLC, Research Division: Okay. But for '13, I think -- you think we should use roughly 27% for the full year, right? Alan I. Edrick: Yes. I think we said 27% and change.

We have a follow-up question online from Tim Quillin from Stephens Inc. Timothy J. Quillin - Stephens Inc., Research Division: You announced an expansion of your stock repurchase plan. I'm just wondering how you're thinking about buybacks and more generally capital allocation now that you should start to generate a lot of free cash flow, and you still have a very clean balance sheet. Alan I. Edrick: Sure. Tim, this is Alan. Yes, we did announce an expansion of 1 million shares to our stock repurchase program. We had -- we still had about 400,000 and change of shares, and now we have over 1.4 million. As we are generating free cash flow and we're -- we look at our valuation, we certainly think that it could be an attractive time to continue buying back shares. So we'll go in opportunistically from time to time and execute on the program. Timothy J. Quillin - Stephens Inc., Research Division: Okay. And would you expect to be -- when your window opens up a couple of days up from now, would you expect to be buying the stock? Alan I. Edrick: We really don't comment on the timing of when we repurchase shares. Timothy J. Quillin - Stephens Inc., Research Division: Okay. The Optoelectronics margins were a little bit lower than I expected even excluding out the restructuring charge. I know it ebbs and flows a little bit there. But was there anything of note in the margins? Alan I. Edrick: Yes. Tim, it's Alan. The main driver really was the mix of business. We had higher sales in our, what we call, our OSI Electronics, some of the electronic manufacturing services. Those inherently carry a bit lower margin, so it was really attributed to that. Timothy J. Quillin - Stephens Inc., Research Division: And what kind of margin would you think that you would have or what kind of mix would you expect to have in the fourth quarter and as we think about fiscal '14? Alan I. Edrick: I think in the fourth quarter, it'll still be a little bit more shifted towards that, our OSI Electronics business. But as we head into fiscal '14, I think some of the core Optoelectronics that generate some of the higher margin will be a bit stronger. I think that's probably the best way of characterizing it. Timothy J. Quillin - Stephens Inc., Research Division: Right, okay. On the Arkon product, you mentioned a couple of times -- I wonder if you can just talk about what a typical sale looks like on Arkon in terms of number of units and kind of rough order of magnitude, what the average selling price of a single unit is and how it might ramp up kind of the pace of ramping up that business.

Tim, the typical -- there's no typical sale. It can change from one machine to multiple machines. The typical ASPs, depending upon the options that the customer asks for, is about at $55,000 to $60,000. So it's a pretty healthy number with good margins. And the marketplace basically is pretty big, and we think of it that the marketplace is very anxious to get another competitor compared to the Stalwarts, like the Datrix Sumida [ph] and the Drägers of this world. So -- and it goes in hand in hand. We call on the same customers as the monitors. So this was just [indiscernible] natural for us. And we think that this product will generate a lot of sales. And it's not like a monitor that you can just book and ship. This will have a little bit extra time, but it'll still be able to book and ship in the same quarter. Timothy J. Quillin - Stephens Inc., Research Division: Okay. And would you be hoping to get to a 5% market share over the next couple of years? Do you have market share targets?

Well, we are hoping to do better than 5%. We've always said that we would like to get up to 10% market share, and it's a market where it's a nascent market, we are starting from ground 0. Obviously, the challenge is to go after the incumbents, but with the opening and the relative reception that we have got and the features we've got built into it -- and keep in mind that this unit was designed from bottoms up where all the imports over a 2-year period was taken from the user. So we've got rave reviews, and I think we are targeting at a 10% market share ultimately when we get completely launched. Timothy J. Quillin - Stephens Inc., Research Division: Okay. And then on the turnkey services business, I've kind of conceived of this or thought about the fact that you have a half dozen or so pipeline opportunities at various stages. But how is that pipeline growing? So you've executed well on a couple of different projects. I know there's a lot of interest around the world. Is the pipeline expanding or the number of opportunities you're working on growing?

I think, Tim, we've always said to you that we consider ourselves to be pioneers in this conversion from sale to a turnkey by a manufacturer. So the first thing we have said in many times in our previous conference calls, every potential large cargo customer, buying customer can be also a customer for a turnkey. So there's not a number of -- number of half a dozen or 6 or 2 opportunities. It's on a multiple front. Just like we talk to people buying multiple units for cargo to buy, we continue to work with them potentially to look at it, any of them can be converted to a turnkey. And we said in the last conference call and we said it again today, we are in active discussions with multiple turnkey potential customers. And we feel better today than we felt in the last conference call of closing these deals before the calendar year. Timothy J. Quillin - Stephens Inc., Research Division: That would be great. And just last detail, Alan. The stock compensation for the quarter? Alan I. Edrick: The stock compensation expense for the quarter was about $4 million.

[Operator Instructions] And at this time, I'm showing no further questions.

Ladies and gentlemen, thank you once again for attending our conference call. We're looking forward to finishing fiscal 2013 on a high note and speaking with you all once again next quarter. We are very, very confident looking at the optimistic 2014. We have an excellent employee staff. We have good products, and with this uncertainty behind us, we look forward to a strong 2014. Thank you.

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.