Good morning and welcome to IPG Photonics Third Quarter 2012 Financial Results Conference Call. Today’s call is being recorded and webcast. There will be an opportunity for questions at the end of the call. [Operator Instructions] At this time, I would like to turn the call over to Mr. Angelo Lopresti, IPG’s Vice President, General Counsel and Secretary, for introductions. Please go ahead, sir.

Thank you and good morning, everyone. With us today is IPG Photonics Chairman and Chief Executive Officer, Dr. Valentin Gapontsev, and Vice President and Chief Financial Officer, Tim Mammen. Statements made during the course of this conference call that discuss management’s or the company’s intentions, expectations or predictions of the future are forward-looking statements. These forward-looking statements are subject to known and unknown risks and uncertainties that could cause the company’s actual results to differ materially from those projected in such forward-looking statements. These risks and uncertainties include those detailed in IPG PhotonicsForm 10-K for the year ended December 31, 2011, and other reports on file with the Securities and Exchange Commission. Copies of these filings may be obtained by visiting the Investors section of IPG’s website at investor.ipgphotonics.com/sec.cfm or by contacting the company directly. You may also find copies on the SEC’s website at www.sec.gov. Any forward-looking statements made on this call are the company’s expectations or predictions only as of today, October 31, 2012. The company assumes no obligation to publicly release any updates or revisions to any such statements. We will post these prepared remarks on our website following the completion of the call. Please go to www.ipgphotonics.com and select Investors to review these remarks. I’ll now turn the call over to Dr. Valentin Gapontsev.

Thank you, Angelo. Good morning, everyone. For this third quarter of 2012, we achieved record results once again on both the top and bottom lines. Our revenues increased 21% and net income was up 29% from the prior year. Our growth is attributable to our ability to continue to execute well on our strategy and to displace existing laser technologies across a wide range of applications in material processing and to ensure that we maintain our sales leadership. Our leadership position is strengthening even as several companies claim that they may have a viable and competing fiber laser solution. In certain specialty marking applications, we believe we have gained share again against competing fiber and non-fiber laser suppliers. We have been successful in penetrating material processing applications, such as cutting, welding, cladding, marking and engraving by displacing traditional methods. We believe we are close to seeing more widespread adoption of fiber lasers for the high-speed drilling and trepanning of holes in the aerospace industry, an application we have been working on for several months. To continue our success, we are expanding our current offerings through new products that improve our ability to serve customer needs in the fine processing as well as unique applications in different industries. We continue to add to the list of application and systems for which IPG laser are qualified and designed into. In addition, we have been selectively pursuing entry into the laser system business. We do not intend to compete with our existing OEM customers because our focus will be on becoming qualified to develop systems for new and specialized value-added applications in welding, cladding, micro-electronics processing and ablation, or to penetrate geographic areas not currently well served with – by existing suppliers of cutting systems. This is an important strategic plan that we…

Thank you, Valentin, and good morning, everyone. I’ll start with a review of our end markets, products and geographic regions. After that, I’ll provide highlights from our income statement and balance sheet and close with our guidance. Third quarter materials processing sales increased 21% year-over-year to $137.4 million, accounting for 88% of total sales during the quarter. The materials processing applications that drove much of our growth in the third quarter include marking and engraving, cutting and welding, predominantly for use in automotive, general manufacturing and heavy industries. Other applications, which include telecom, advanced and medical, accounted for the remaining 12% of sales. Revenue from these other applications increased 26% year-over-year to $18.7 million. Sales of high-power lasers, which accounted for 43% of total revenue, increased 16% year-over-year to $67.1 million. Our high-power lasers are primarily used for cutting and welding applications. During Q3, we began to see demand from the aerospace market, using our lasers for drilling applications. On a smaller scale, we also sell into niche applications that include cladding, annealing and ablation technology. In addition, Q3 benefited from $4.5 million of sales of high-brightness lasers used in advanced applications. Pulsed laser sales had another record quarter with sales of $50.4 million, which accounted for 32% of total revenues and increased 51% compared with last year. We benefited from significant demand in the consumer electronics markets during the quarter. Marking in consumer electronics is an application in which we have gained share from other fiber and non-laser suppliers with our introduction of pulsed lasers with higher power and better beam qualities. While sales in Q4 for this application will be lower because of completion in Q3 of several major projects, we believe that this is an application that will benefit our sales in the longer term as end…

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Zach Larkin of Stephens. Please proceed with your question. Mr. Larkin, your line is now live. Zach Larkin – Stephens: Can you hear me?

Yes, we can hear you now, Zach. Zach Larkin – Stephens: Okay, hey, sorry for that. Hey, congratulations on another great quarter. First off, I just wondered if you could talk about any specific or kind of what you thought were the most significant design wins that you had in the quarter. Valentin talked about a lot of different new product introductions, and just wondering which ones you guys view as the most significant as we’re looking forward?

I think one of the more significant ones is the continued development of the aerospace drilling application, which we think will be a growth driver next year. The second one is continued development of QCW customer relationships. The indications from several end users are that they will ramp significantly demand in 2013. And then some of the semiconductor applications at shorter wavelengths next year. Zach Larkin – Stephens: Okay.

I disagree with Tim. Number one is for go towards the highest expectation (ph) QCW in which we now start to introduce the market. We did not particularly participate in this market niche. (Inaudible) ways in which we start to introduce market we hope will change situation there shortly (ph) for big demand, but current (ph) or existing lasers do not meet the customer requirement. Our laser we believe will meet all the requirements of the large quantity of customers. QCW is number two, because QCW we developed to introduce two years ago, and now we did it. The fate of test from different suppliers’ qualification are going very well, so next year would be (ph) a very much introduction to OEMs, many OEMs. Zach Larkin – Stephens: Thank you very much for that color. And then as you look at guidance, I wondered if you could comment a little bit how much of the sequential decline is driven mainly off of, if you can quantify maybe, the consumer impact and then also give us a sense for the margin profiles that are assumed in the varying ranges of the guidance?

So some of it is the consumer electronics, let’s say more of it is the seasonality in China. This is the second year that we’ve experienced this. And as the China business has got bigger, this seasonality has changed where historically we used to have a stronger Q4 and a weaker Q1. In terms of the margins, at the top end of the range my gross margins are at around 54% or slightly higher and operating margins at 38% and at the bottom of the range they’re slightly lower than that. I think if people are looking at their models for next year, this impact of the seasonality for Q4 should be taken into account to a greater degree, but also what’s clear is that Q2 and Q3 actually benefit a little bit from stronger growth than we’ve historically had. So I think those are the key takeaways from this at the moment.

Also some impacts we have ...

Thank you.

Because some (ph) overseas orders which we plan to ship in (ph) Q2. Customer asked to shift delivery to the beginning of next year due to their problem. This is also (ph) indication in our guidance.

Thank you. Our next question comes from the line of Patrick Newton of Stifel, Nicolaus. Please, proceed with your question. Patrick Newton – Stifel, Nicolaus & Co: Yeah, good morning. Thanks, Tim and Valentin for taking my questions. I guess pertaining to the margin outlook that you just gave, Tim, is that more of an impact of you moving into the systems level business or is it the lack of having some of this high brightness in the quarter? Because it seems like a pretty significant step down on a sequential basis, so if you could help us flush out what’s driving that gross and operating margin outlook?

Well, I don’t think it’s that significant a step down. I think part of it is obviously slightly lower sales of our high-brightness, but with lower revenue activity, you have slightly lower absorption of fixed costs. That’s the primary driver. It’s not really an impact of the systems business, and I really don’t think it’s a significant decrease in margin profile, given a slightly lower revenue number. Patrick Newton – Stifel, Nicolaus & Co: All right. I guess that’s fair. And then I guess, Tim, to kind of dive into the revenue guidance expectation. You’re clearly alluding to the pulsed laser business taking a breather in 4Q, but can you walk us through what your expectations are for the high power business? And the reason I ask is, is it seems like over the last six years you’ve averaged more than a 30% sequential growth rate in 4Q for your high power fiber laser business. Even last year we had kind of a very challenged macro environment and tough trends in China. You were still able to grow that business nearly 12% sequentially. So can you walk us through how we should think about that high power business in 4Q?

We don’t give specific guidance around that. The high power business will not be as weak as the pulsed business in the fourth quarter. You’ll have some sales of – lower sales of the higher brightness which will impact the high power. We’ve just been going through that kind of granularity around that, I think it’ll be a reasonable quarter on high power, but a weaker quarter on pulsed. As Valentin mentioned, there’s actually a series of orders due for delivery in Japan, including the 100-kilowatt laser, which is actually going to be in Q1. We were hoping to get that out in Q4. There’s another significant order that’s come in Japan as well for over 50 kilowatts of different types of lasers. That’ll be in Q1. So we’re missing a little bit of that seasonality on high power in the fourth quarter, too.

(ph) Now we’ve received very substantial orders for system in Russia, but (ph) approached, we did not have enough space to make this in quarter four. It’s quite custom, a hard custom, to ship in quarter four. But now when we (ph) introduce new our facility ready during few weeks when we will start to really see this help manufacturing capacity and so on (ph) 4Q, the quarter in Q1 and Q2.

Thank you. Our next question comes from the line of Joe Maxa of Dougherty & Company. Please proceed with your question. Joe Maxa – Dougherty & Company: Thank you. Can you just elaborate a little more on where you’re seeing the macro weakness, and specifically by geography? Any area more than the other?

Joe Maxa – Dougherty & Co : Okay. And I know you’re not giving an outlook for next year yet. Q1 tends to be flattish with Q4 last couple of years, for example. You have a few orders pushed to Q1, is that a reasonable expectation?

Well, we’ve had orders. I don’t know whether you call them pushed. They’ve been requested to be delivered in the first quarter, particularly in Japan. I don’t really understand your question, Joe. Joe Maxa – Dougherty & Co: I was just wondering if we should be looking at Q1 being roughly in line with Q4.

It’s way too early to talk about Q1. We don’t give guidance for Q1 on our Q3 conference call.

And thank you. Our next question comes from the line of Jiwon Lee of Sidoti. Please proceed with your question. Jiwon Lee – Sidoti & Co: Thank you and good morning.

Hi, Jiwon. Jiwon Lee – Sidoti & Co: Just first off, I wanted to ask about your sort of a near to mid-term strategy, especially with the JPSA. You highlighted some opportunities in Russia with the Gazprom. Outside of that, how do you see that business trending, I mean, in terms of the revenue and margin profile? Thank you.

(ph) You want to take this one?

JPSA, now we revised their product portfolio and application. We introduced – we given them additional with these (ph) other applications. So we believe next year the contribution JPSA would be very essential. They have to double, triple the business during – compared to this year. Not only JPSA because we have created during the last couple of years, we have very powerful system team also in Russia and here in Oxford. So total now for – during very short time, we created for system manufacture – development and the – manufacturing and development, we create team, more than 80 high-quality professionals, including JPSA, Russia and in U.S. also. We believe we now (ph) initiating and creating many very high-quality teams, especially in Russia, but not only in Russia. Also in America, now that we start to sell (ph) advance of system for American customers. So we hope next year our business in – system business will grow very fast. Jiwon Lee – Sidoti & Co: Great. And my follow-up question is, given the order trends that you saw in the third quarter and so far in the fourth quarter, how comfortable are you about your fourth quarter revenue guidance?

The methodology I’ve used on the fourth quarter is exactly the same as the methodology I’ve used historically. So at the top end of the range we have about 75% of orders in-hand, and at the bottom of the range about 80%. So that’s a very similar proportion to the one I’ve used historically.

But this method (ph) worked very well typically, but for fourth quarter situation often is very different because the end of the year a lot of people (ph) stopped – have not – still have money (ph) like to get expenses) exactly where it was delivered in quarter four. So we can expect (ph) it to change. We have a good chance to expect additional order to compare what Tim calculated revenue based on usual methodology. But we could not put into forecast. That’s not confirmed orders.

Thank you. Our next question comes from the line of Krish Sankar of Bank of America. Please proceed with your question. Krish Sankar – Bank of America Merrill Lynch: Yeah, hi. Thanks for taking my question. I have a few of them. Tim, you kind of highlighted about the seasonality you’re seeing in China. I’m kind of curious, are there any other geographies where you see seasonality? Or is China the only one where you typically see seasonality?

In the fourth quarter, China is normally the only one where we’ve seen seasonality these last two years. I think you have some macro headwinds in Europe this year as well. The other seasonality you see is generally in the first quarter, it’s a very slow start in Russia. We’ve always highlighted that one. The first four to five weeks of Q1 can also be – continue to be weak in China until you get through Chinese New Year, and then things pick-up very quickly. And then as budgets get firmed up, you tend to see order flow pick-up in North America by about the end – the middle of February through March. So historically the weaker quarters we’ve had are Q1, and Q4 has been stronger, but now as the Chinese business has grown to be a lot larger, this seasonality is the second year that we’ve really seen this. I think 2010 is a little bit of an anomaly because we were coming off a very weak 2009 and there was the very strong recovery that the whole laser industry experienced. I think if you look at some of the other laser companies, our seasonality is beginning to mirror theirs more closely, particularly with Q4. Krish Sankar – Bank of America Merrill Lynch: Got it. Okay. That’s helpful. And then what was sales to China and Russia in Q3?

China was about $34 million. Russia was about $9.5 million.

Thank you. Our next question comes from the line of Jagadish Iyer of Piper Jaffray. Please proceed with your question. Jagadish Iyer – Piper Jaffray: Yes. Thanks for taking my question. Two questions, Tim. First, can you just give us an update on where you are in terms of your cost reduction of your laser diodes? I know that it’s about the end of the year and what do you think project – you can project for next year? Then I have a follow up, please.

I think we continue to make very good progress. We’ve actually achieved all of the cost reductions that we had discussed at the beginning of the year. That’s now starting to flow through into the builds of material on a fuller basis. So, for example, the new PLD-40, the new PLD-120 for the QCW, in certain instances, the cost per watt is down at $2 or less. On some of this – the CW for PLD-40 it’s below $2.50. So all of those targets have already been achieved in terms of the product and then as we use older inventory and transition more fully to using the newer diode, that will start to flow through more fully during – started in Q3, more fully in Q4 and then into Q1. Jagadish Iyer – Piper Jaffray: Okay. But how should we think about on a year-over-year basis, like this time next year? Is there some kind of color that you can give in terms of some – what kind of cost reduction targets you have in mind or – for the laser diodes?

Not at this point in time. I think we’ve just made a huge step going from – I talked about last September, we were at over $3.50 a watt and now we’re down at $2. I mean, that’s a pretty significant step. I don’t think we’re ready to articulate going down to $1.25 or $1.50 quite yet. I think we have to get this fully implemented first. I will say that there are other areas. Valentin mentioned we just brought on-stream the PC board manufacturing. There will be costs that are reduced on that. Some of the other accessories and components, the switches, the cost starts to come down there.

We have working very hard to decrease cost and improve performance many critical components, not only diodes, we are working also on PCB, Tim mentioned, that will give us just estimate the savings per year like $5 million to $7 million. We now starting to make own power supplies for high power (ph) and other to save additional $6 million to $10 million savings. Before we – up to now, we used from our outsource power supplies, quality and performance and the price (ph) they won’t meet our new expectation (ph) how we will develop own much better and cheaper. We’ll also develop new generation of the output accessories for optical for high power, again much, much cheaper than before. We starting (ph) to sell our own optical sets for cutting, drill, welding and other applications, also very big savings. So in total, our saving program we hope next year will (ph) net us additional saving up to $20 million to $30 million on my – minimum, is my expectation. Regarding diodes, we are now – we – up to now we practically did not sell diode separately in spite of a lot of requests. The main reason was we did not have enough – our demand of own demand for diodes was higher than we produce in spite of (ph) what we increased dramatically the manufacturing of that. (ph) But no, we did not have enough space for packaging. Now we finishing new facilities here in Oxford for packaging. This new facility, 60,000 square feet. Then we can (ph) double in our assembly team. And so we can open door for direct sales of diodes to our other customers. It also can help give us additional substantial revenue. Jagadish Iyer – Piper Jaffray: Okay. Thanks for the color. Just...

Volume – also (ph) depend for volume. As more power, we will produce more diodes (ph) for each that will go down farther. This year (ph) we’ll them about 18 megawatt of optical power, next year we have – can make 30% to 40% more. Jagadish Iyer – Piper Jaffray: Okay. Yeah. Just on a follow-up, just two-part on this one. First, on the China, I don’t know whether you have given enough clarity on this one, Tim. Which sub-segment is weaker in Q4? Is it the consumer side or is it the auto side? Can you give some color please?

I think it’s sort of generally across the board. Part of it’s consumer. And you also see some of the cutting customers. They reduced a little bit of their inventory coming into the end of the year. That total take is also down. So it’s in general across the board. Our automotive business, by the way, in China, is only just starting to really gain a significant amount of traction. We won a couple of orders in Q3, and we’ve also identified tens of millions of dollars of potential business next year that we expect to be a strong growth driver in China, and we’re at a much earlier stage of identifying that and working with the end customer. So our general manager and vice president in Asia is extremely optimistic that we’ll actually build significantly on the automotive business in China next year. So automotive has not yet been a real strong growth driver for us in China. It’s been a reasonable one, but there’s a lot of new opportunities that we’re at an early stage of identifying that gives us actually a greater degree of optimism for that next year.

During the last months we had many meetings with our top Chinese customers. They all – they have problems (ph) in this last quarter into third and fourth quarter this year. They still have a large inventory, but they very optimistic about next year, all of them.

Thank you. Our next question comes from the line of Mark Miller of Noble Financial Capital Markets. Please proceed with your question Mark Miller – Noble Financial Capital Markets: I just wanted to pursue a little bit more about China. I mean, ROFIN-SINAR indicated they had seen in July some weakness from machine tool customers. But you’re kind of saying it was – it’s kind of across the board. I was just wondering if machine tool was impacting you also?

I mean, all of our customers are – I mean, the lasers are used in basically machine tool applications, whether it’s cutting or welding or drilling, across a fairly wide variety of industries. I’m not sure I get the specificity of the question, Mark. Mark Miller – Noble Financial Capital Markets: Okay. Well, let’s – the other question I wanted was about linearity of orders. I know – I believe August is typically weaker for you, and I was just wondering how linear orders were or how normal orders – the order pattern was last quarter?

August, September, it was not good months, but October going very well and we hope November and December also will go very well.

Thank you. [Operator Instructions] Our next question comes from the line of Jim Ricchiuti of Needham and Company. Please proceed with your question. Jim Ricchiuti – Needham & Co: Hi, good morning. I was wondering if you could help us with the pulsed laser business. What portion of that now is consumer electronics-related and how much is that up for you year-over-year?

From that point, we have very large order during the last three months with (ph) delivery from Apple family. It’s very much (ph) over with order and delivery. Now we finish the delivery and so we’re now waiting. They promised us new orders in beginning next year. We – of about 3,000 lasers was delivered only during last three months of such applications.

It’s probably about 25% of the total pulsed business for the year, Jim.

But it’s now we introduce – we have introduced new laser, not typical pulsed laser for marking. This new laser we made it for special request of this, Apple, and we – they start to – only started (ph) first much shorter because it’s much more perfect with shorter pulsed, very high quality lasers. Now (ph) we will offer this family of new pulsed lasers. We only starting. It would be big step in different, new, much more perfect pulsed laser, which don’t have any competition yet in the market.

Thank you. Our next question comes from the line of Tom Hayes of Thompson Research Group. Please proceed with your question. Tom Hayes – Thompson Research Group: Thank you. Good morning, gentlemen.

Hi, Tom. How are you? Tom Hayes – Thompson Research Group: Good. I was just wondering, we talked about it on previous calls, the strength that you see in the automotive sector. We touched briefly on it, what you’re seeing in China, but I just – more globally, if you could talk about what you saw in the third quarter and expectations for the fourth quarter?

We have actually a strong culture in automotive, particularly in North America in the third quarter. We really highlighted that that was going to be a growth driver coming into the end of Q2. We took a strong order flow in Q2 and then we’d – we said we’d have a big pick-up in North America. So that was very good. We’ve identified, as I mentioned, some of these opportunities in China for next year, but we actually won some smaller orders for the first time in China. In Europe we won a couple of orders, I mentioned, in France, which was very important even though, again, not so big in size, but they’re an area where one of our largest competitors has been particularly strong. The rest of the European business we haven’t turned into a 100-unit order this year from any of the major customers. They’ve been deploying smaller units through this year, given some of the headwinds that they’ve had in Europe. But the automotive was really strong in North America. It was very pleasing to see that.

But we, automotive now, we’re going into new phase when we shipping not just lasers. We are starting to ship full welding systems. We develop unique welding system, which acts much better and really able now to master the placement over the spot weld – welders in the (Inaudible) assembly, in service and so on. It’s first time such a system is developed in – also it was one system which can work without any (Inaudible) and so an enormous saving. At first we develop system work with Volkswagen. Volkswagen (Inaudible) start to use third generation of this new welders in their production lines (Inaudible) in Germany. They’re now in China and Mexico (ph) and so when did all this start. We develop now during short time, only during one quarter, second to third generation, much better. Now we will open door for all other customer. We have (ph) combine of main automotive customer, all they require for immediate delivery is to start to test this system. We believe (ph) that this would be change in this welding application for automotive. We introduce (Inaudible) manual system, because the robotic system which we (ph) give for first generation use only for large volume production line which produce more than 1,000 cars per day. But the most production (ph) line which has much width, some hundred cars per day, but they don’t use practically the robotic welders. They use manual. Before manual laser welder did not exist at all. Now we develop, demonstrate and qualify a manual laser welder. For this our consultant from automotive (Inaudible) it would be huge demands for such system. The first reaction, first exhibition (ph) we have at all automotive companies will visit us, all the required for tests (Inaudible).

Thank you. Our next question comes from the line of Avinash Kant with D.A. Davidson & Co. Please proceed with your question. Avinash Kant – D. A. Davidson & Co: Good morning, Valentin and Tim. So, expanding a little bit on the automotive opportunity, I don’t know if you gave the overall revenue percentage from automotive in the current quarter. And what I was more interested in finding out is, Japan, how are you doing in the automotive side in Japan? And where do you – when do you think the adoption there is going to kick in or start to ramp?

We – Japan is – all of the automotive company in Japan use our lasers but in limited quantity. The biggest of them now report us after many years qualification, they (ph) face final decision, start with IPG lasers. Before they tried to use Japanese-made legacy lasers but now they have principal decisions start with IPG lasers. We received a message, I don’t – could not mention the names, but it’s top Japanese companies. And we start to get from them first – orders start to run from Japanese (ph) past custom.

Thank you. Our next question comes from the line of...

(ph) Total next year will be double, triple, maybe even much more, and later we’ll ship to Japanese automotive.

Thank you. Our next question comes from the line of Mark Douglass of Longbow Research. Please proceed with your question. Mark Douglass – Longbow Research: Good morning, gentlemen. First question is, how much of 4Q do you have baked in for Sercel on the top line and bottom line, (ph) impact ?

It’s a pretty small contribution in the fourth quarter. That run rate is about $2 million to $3 million a quarter. It’ll depend upon, at the top end of that range, there’s a couple of systems that will have to be shipped in December. At the bottom end, there’s a couple less. So $2 million to $3 million top and bottom end of the range. At the bottom end of the range, they still lose a couple of cents. At the top end of the range they just about break even.

Thank you. Our next question comes from the line of Olga Levinzon of Barclays. Please proceed with your question. Olga Levinzon – Barclays Capital: Hi. Thank you for taking my question. Just as a follow-up on the JPSA contribution and how we should be thinking about the impact to OpEx going forward, I guess at the current – if we assume sort of a (ph) mid-150s range, so, in line with what you reported for the September quarter, what’s the target OpEx range? And within that, you talked about the sales percentage of the overall revenues declining year on year. Can you talk about the drivers there and, now that JPSA is within the mix, how we should think about that going forward?

At the top end of the range, the numbers I gave included JPSA in them. So my gross margin number for the top end of the range is about 54.5% on gross margin and 38% at OpEx. I think on G&A they add about $0.5 million a quarter, and on selling and R&D, it’s a little bit less. But I’ll have to check the specific numbers. They’re not particularly immaterial. So the top of the range on the guidance in the gross margin and operating margin at 54.5% and 38% already includes JPSA in them. Is that clear, Olga? Olga Levinzon – Barclays Capital: Going forward, especially assuming your business continues to ramp, including JPSA, should we be thinking that SG&A should be in the sort of 11% to 12% range as a percentage of your total sales? Or kind of what are the drivers there?

SG&A in this quarter was – let me just check the numbers in total – it’s not going to fundamentally change as revenue continues to increase, because the JPSA numbers are just not that big. So at 7%, just under 7% on G&A this quarter, and selling was 4%. So you’re at 11%. Yeah. 11% to 12% is perfectly reasonable, if we can continue to see some nice growth in the business overall next year. So there’s not going to be any material change in head count for example related to JPSA. They already have a well built out head count infrastructure both around R&D, in general and administrative and also their manufacturing. We’re actually continuing to hold that team together, because we believe that pretty quickly we can drive their revenue back up. So – but we also don’t need to add a tremendous amount of head count to execute on their systems. We may have to add a couple of, for example, sales people specific to their technology and applications in Asia that would be based in our offices, but we don’t need to go out and hire 50 people to support he JPSA business.

Regarding machine business, our new machine business. JPSA not – we don’t (ph) win JPSA, we remain core. The main business we’ll make with our Russian team in Russia and other neighbor countries, and (ph) all this (project, which we’re talking about, it’s the many (ph) tense project, that is project now in development there. All this have we – based on the gross margin the same, and labor what we have to run sales of lasers, more than 50% is minimum. And we able to make heavy (Inaudible) all this, laser (ph) sourced for the fabric core parts of systems, motion systems to install and we’re able to make very profitable machine business.

Thank you. At this time we have reached the end of the Q&A session. I will now turn the conference back over to Dr. Gapontsev for any closing or additional remark.

Okay. After questions are done, thank you for participating on our call today. We look forward to reporting our Q4 results next year, hope they will be successful.

Thank you, everybody.

Thank you. And that concludes our conference call. Thank you for joining us today.