Good day, everyone and welcome to the Aviat Networks’ Earnings Conference Call. Today’s conference is being recorded. I would like to introduce today’s host, Glenn Wiener. Please go ahead, sir.

Thank you, operator, and good morning to all. Welcome to Aviat Networks’ fiscal 2016 second quarter results conference call. My name is Glenn Wiener, I am President and CEO of GW Communications, and I recently came on board supporting Aviat and its communications initiatives. My contact information can be found on the company’s result announcement, which was issued yesterday after market close, and by all means, please feel free to reach out to me should you have any questions. I’m joined today by Mike Pangia, President and Chief Executive Officer; and Ralph Marimon, the Chief Financial Officer. This call is being broadcast live over the Internet for all interested parties and the webcast will be archived on the Investors Relations page of our website. During today’s call, management may make forward-looking statements regarding Aviat’s business, including statements relating to projections of earnings and revenue, business drivers, the timing and capabilities of new products, network expansion by mobile and private network operators and economic activity in different regions. These and other forward-looking statements involve assumptions, risks and uncertainties that could cause actual results to differ materially from those statements. Please note these forward-looking statements reflect the company’s opinions only as of the date of this call and the company undertakes no obligation to revise or publicly release the results of any revision of these forward-looking statements in light of new information or future events. In addition, during today’s call, management will be referencing both GAAP and non-GAAP financial measures. A copy of the press release and financial tables, which include a GAAP to non-GAAP reconciliation and other supplemental financial information, is also available on the company’s website in the Investor Relation section. I would like to thank you all for your interest and support of Aviat, and with that, I will turn the call over to Mike.

As I am sure you saw from our announcement yesterday, our revenues were within the range we provided last quarter and our adjusted EBITDA loss was slightly higher than we expected, primarily as a result of lower margins, which Ralph will touch upon a bit later. We continued to manage our costs reducing total expenses by approximately 23% compared to last year and we generated cash increasing our net cash position $3.7 million sequentially and $4.8 million over the past two quarters. We continued to focus on improving our working capital management and better aligning both our customer-facing and back-end support structures and have aggressive plans to drive continuous improvements. We’ve been winning business in building our pipeline, though in some cases conversion into revenues has not materialized as quickly as we had hoped. To start, I am concerned with the uncertain spending outlook within the mobile operator side of our business. Overall, we have seen a slowdown in capital spending with projects being delayed and pushed to the right. In response, we've done a lot over the past year to solidify our position with our mobile operators and sales, product development and increased focus on service and support. We remain well-positioned and believe we can sustain the current revenue run rate for this part of our business for the next few quarters. We expect that in the quarters or after, as the transition to the next technology cycle begins, whether it’s LTE or 5G, more consistent and predictable growth with mobile operators will resume, and we continue to explore opportunities with other Tier 1 operators. In the private network vertical, we continue to book a steady business and have experienced growth on a year-over-year basis through the first six months of the fiscal year. However, as we have indicated…

Thanks, Mike, and good morning. I will begin with a review of our Q2 results on a non-GAAP basis and then make a few remarks around our cash position and balance sheet. You can refer to our press release which is up on our site in the Investor Relations News Release section for our audited GAAP financial statements along with a reconciliation of non-GAAP financial measures. Revenue for fiscal Q2 came in at $70.4 million down 11.6% sequentially and 22.6% year-over-year. This was expected and, as Mike noted, within the guidance range we provided last quarter. Product revenue was approximately 63% of sales and services was 37% of sales, compared to product revenue of 67% and service revenue of 33% in fiscal Q1. Non-GAAP gross margin was 23.3% as compared to 26.4% in Q1 and 26.4% in Q2 of fiscal '15. Product gross margin of 25.4% was below the 30.7% reported in Q1 and 26.4% reported in Q2 last year. Services gross margin was 19.7% which is up sequentially from 17.4% in Q1 and down from 26.4% in Q2 last year. The declines in both product and service margin is due primarily to lower volumes which have prevented us from absorbing relatively flat supply chain costs. For fiscal Q2, our non-GAAP operating expenses totaled $21 million down approximately 5.4% sequentially and 22.8% compared to Q2 of fiscal '15. On a year-over-year basis, we had a substantial decrease in selling and administrative expenses, down $4.9 million or approximately 23.6%, primarily a result of the cost control measures we implemented as well as reduction in professional fees. R&D spend declined by $0.4 million sequentially and $1.3 million versus last year's second quarter, though as a percentage of sales, it remained around 7% to 7.5%. As compared to last year, the decline in…

Thanks, Ralph. One other item I'd like to address before opening up the call for questions is our listing status. As we've announced in our Form 8-K filing in January, the company received a delisting notice from NASDAQ based on the trading of our shares and some $1 status. The board and management team place a great emphasis on shareholder communications and we are not pleased with trading over the past several quarters and our current valuation. We are working to address this and have 180 days from the time we receive the notice to bring the stock price over $1 or follow-up plan with NASDAQ regarding our plans to do so. We're focusing on our business and addressing areas we can improve upon, so the company's financial results and financial position improves. Concurrently, we're going to be more active in telling our story and meeting with shareholders and prospective investors over the coming quarters. The board will explore any and all avenues that will enhance shareholder value and we will provide you all with any material updates as they occur. Operator, we're now ready for any questions.

[Operator Instructions] And we'll take our first question from Jim Kennedy with Marathon Capital. Your line is open. Jim Kennedy with Marathon Capital, your line is open.

Hi, Mike.

Hi, Jim. How are you?

Good. Congratulations on the great cash management. Question for you. As you implement your expense controls and reductions, can you talk a little bit about, you referenced Next-Gen technology coming in ’17, ’18, should we be concerned at all or how are you positioning yourself from an R&D standpoint to be ready to benefit from either upgrades or improvements in the technology itself?

Thanks, Jim. So we have a very compelling roadmap that we continue to invest in. Our roadmap is very much aligned with our customer expectation. This is across all of our segments. And we’re very excited about the continued evolution and innovation in our roadmap and when we’re focusing in around our investment priorities, this is an area that also we’ve invested in process improvements to improve our utilization and the effectiveness of the resources we have that are doing the development, which actually should improve the confidence that we have in meeting the milestones associated with that roadmap.

Good. And second question relative to the private sector, I’m assuming that you’re throwing the public safety into that sector as opposed to the carrier sector, is that correct?

Yeah, absolutely.

Can you talk a little bit about, I noticed I believe it was Motorola who was 10% customer, can you talk a little bit about what you are delivering or doing in that space that, say, positions you well, why you, why not other people, are you one of five choices and just establish to be the quarter or two for Motorola?

Yeah. No. We’ve got a long history with, not only with Motorola, but with other large integrators in the public safety domain. And as I mentioned in my prepared remarks, we’ve seen a significant increase in our private networks business, the funnel continues to be strong. Several of those end user accounts are all -- are prime for those accounts, our companies like Motorola and we work effectively with them, we have for years and that would put us in a leading position with them as it relates to the public safety area. And our strength, our core strength in this space is we have been in this particular vertical for several years, our products are built to be mission critical, but high on security and we also have a strong services portfolio that would complement the capabilities of a partner like Motorola. So, connected to the opportunities we see in the public safety area and our relationship with them isn’t just in North America, but on the international front.

Got you. Could you talk to us briefly about what’s driving the public safety -- the increase in public safety spending, is it mandates from Congress, is it being done at the state level, where is that money coming from?

Yeah. I mean, I think the money is coming from different sources, but it’s all about ensuring that first responder networks are built to be suited to address any major activity that could take place and I think these are the areas where as budgets are developed for state and local agencies, the priority for these areas remains intact, despite any pressure there may be on reductions.

Got you. Okay. Thanks, Mike.

Thank you, Jim.

[Operator Instructions]

And operator, while we pause, just one clarification in the financial remarks, the adjusted EBITDA in the first quarter of fiscal ‘16 was 700,000, not 7 million, if we can just have that corrected.

And it appears we have no further questions at this time. I’ll turn the call back to our presenters for any closing remarks today.

Ladies and gentlemen, thank you for all for joining us. We appreciate the interest and as I said, if you have any follow-up questions, by all means, feel free to reach out to me directly and on behalf of Mike and Ralph, thank you and we’ll speak with you shortly. Take care.

Thank you.

This does conclude today’s program. Thank you for your participation. You may disconnect at any time.