Good morning and welcome to IPG Photonics’ Second Quarter 2013 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 Senior 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 Photonics’ Form 10-K for the year ended December 31, 2012, and other reports on file with the Securities and Exchange Commission. Copies of these filings may be obtained by visiting the Investor section of IPG’s website at investor.ipgphotonics.com/sec.cfm or by contacting the company directly. You may also find copy 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, July 30, 2013. 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 turn the call over to Dr. Gapontsev.

Good morning everyone. IPG performed well during the second quarter with 22% year-over-year revenue growth much of our growth came from sales of material processing applications with a strong contribution from Asia and the U.S. Gross margins during the quarter were within our target range at 53.5% and we grew our bottom-line by 11% but still a real innovator. Our net income comparison was relatively impacted by (largely FX) gain in 2012 and in 2013 by increased cost from the investments we are making in R&D, selling and other areas will support and drive future growth of IPG. We continue to see solid demand in both of our end markets and we maintain a strong technological advantage over our competition. Our fiber lasers continue to take market share from conventional laser technologies like CO2 and YAG particularly for cutting and welding applications. Material processing applications account for 94% of our total sales. Many of our OEMs are increasing the percentage of fiber laser they buy from us versus conventional lasers. Because of this success our cutting OEMs set with fiber lasers for thin steel cutting demand for high-power lasers to cut thick metal is increasing as for the thin and thick metal cutting has improved. Another application which presents exciting opportunity is growth for additive manufacturing which includes 3D printing, (inaudible). In this application the IPG lasers are useful for manufacturing parts from powders made of metals or other materials. We continued this application for years and most of the (inaudible) metal, mobile manufacturers from metal additive manufacturing use IPG’s fiber laser with a unique performance of our fiber lasers, customers are developing terrific new applications. For example recently a customer in China manufactured a large – recast large and sophisticated part out of special (effects) with our entry level…

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 statements and balance sheet, and close with our guidance. As Valentin mentioned second quarter revenue grew 22% to $168.2 million from a $137.9 million a year ago primarily driven by growth in materials processing. Materials processing sales increased 26% year-over-year, to $157.6 million accounting for 94% of total sales during the quarter. We continue to make progress in penetrating OEMs for materials processing applications particularly in China, Europe, Turkey and the U.S. We believe we are continuing to win significant market share versus conventional CO2 lasers used for cutting applications. Other applications which include telecom, advanced and medical accounted for the remaining 6% of sales. Revenue from these other applications decreased 22% year-over-year to $10.6 million, much of the decline was due to weak telecom demand primarily in Russia. Sales of high-power lasers which accounted for 51% of total revenue increased 38% year-over-year to $85.4 million. IPG’s high-power fiber lasers are being widely accepted for cutting and welding applications particularly in the auto industry as well as with OEMs who serve various general manufacturing needs. We have begun to penetrate additional markets like aerospace, heavy industry and construction as the benefit to using fiber laser technologies become more widely adopted. Recently IPG also started to market its laser seam stepper with potential new customers around the globe. This is the first time that IPG has marketed the newest version of this device on a more widespread basis not only to the automotive industry but also to companies producing other products such as kitchen appliances. Pulsed laser sales were $40 million which accounted for 24% of total revenues and increased 5% compared with…

Thank you. We’ll now be conducting the question and answer session. (Operator Instructions). Thank you. Our first question comes from the line of Krish Sankar of Bank of America. Please proceed with your question. Krish Sankar – Bank of America: Yeah hi, thanks for taking my question. I had a couple of them, Tim in terms of your guidance can you tell what gross margin and OpEx are you forecasting in for September?

Gross margins we used on the guidance were in the range of 53% to 54% so pretty similar to Q2 and OpEx should be relatively stable between the second and third quarter so we didn’t change any assumptions around that fundamentally. Krish Sankar – Bank of America: Got it, all right. And then it clearly seems like you guys are doing a pretty good job in China with the strength in June despite like the weakness that’s happening in the macro. If I look at the last couple of years should we assume normal seasonality in China in Q4?

It’s a little bit early to start talking about Q4 but I would expect yes normal seasonality for Q4 in China where it tends to be a weaker quarter there. Krish Sankar – Bank of America: Got it. And then just final question, in terms of September quarter guidance can you just give us an idea of what you are forecasting for the different segments high-power, medium power pulsed laser either Q–over-Q or year-over-year?

We don’t go into that kind of granularity relative to guidance on specific product lines. So, we’ve never really gone to that detail Krish I am not going to go there right now. Krish Sankar – Bank of America: Got it. Thank you.

Our next question comes from the line of Patrick Newton with Stifel. Please proceed with your question. Patrick Newton – Stifel: Hey good morning. Thanks for taking my question. Just a couple of housekeeping items, I guess Tim could you provide us with Russia’s sales in the quarter and also what the contribution from Mobius was both from quarter and expectations baked for September quarter?

Russia is less than 10% of sales so we don’t disclose that. And Mobius is really an R&D team that was acquired so at the moment the sales from those UV lasers are negligible it’s a very much development program for the new product line and I will say that they’ve had a – starting to gain some traction in terms of accelerating that program I think Valentin is pretty pleased with how that acquisition is being integrated on a technology basis.

Regarding Russia, I reckon we’re reporting that Russia it’s a very big manufacturer and 90% of the Russian practical of this. However what they’re making contribution is expert to the first and final products outside of Russia. And Russia is still business is low due to a very specific condition there. Our major problem with any American public company in such country like Russia indeed so we’re on very high level of corruption so could not use any distribution network there we have to walk build our own network it’s a large country it takes time by series of investments to build own distribution network to protect it against of any corruption. Other problem in the Russia that Russia doesn’t have integrated networks strong integrators practically for example India and China which have enormous integration network of companies but Russia and India do not have further problem there to have supply to cut the money and finish in view of the need for a pool of complete solutions. They don’t need only a waiver. In our targeted, we’re often, region and Russia because of the complete solution the way we’re presenting and the way of this we believe that for this year, we have reached, laid a more progress in this direction so probably in two, three years (inaudible) own portfolio of the system of products and also we’ve built network distribution, our national wide network how to provide servicing of the product into Europe. Patrick Newton – Stifel: All right. Thank you. And then I guess, Tim it seems goodwill declined sequentially from about $3.3 million to $500,000 roughly sequentially in the June quarter. Did that have – was that write-down had any kind of impact on OpEx in the quarter?

As I mentioned in the script the goodwill write-down net of contingent consideration payable, which we don’t think we’re going to have to pay was about $350,000. Patrick Newton – Stifel: Okay so nothing material. So, as we think about OpEx you kind of already alluded to this there was no – there was no uptick from the goodwill, no material uptick in the June quarter that isn’t kind of run through into the September quarter?

Correct. We don’t assume any fundamental changes in OpEx. Patrick Newton – Stifel: Okay.

And continue into Q3. Patrick Newton – Stifel: Okay. And then could you provide us with an update on that 100 unit automotive order. Can you kind of help us understand the contribution of the current quarter any updated thoughts around the linearity of deliveries over the next nine months plus or minus?

No. They started to call off units and there was several units delivered in June and units continue to be called off at this time. There is no specific update on exactly how many units are going to be delivered each quarter over the coming year or so. Patrick Newton – Stifel: Still relatively linear I think was how you last – talked about it last quarter?

There was – we’ve said I don’t have any new information about it in terms of specifically what’s going to be called Patrick. Patrick Newton – Stifel: Okay. And then I guess, just one last one on China just to kind of dig into the strength there I mean great quarter up 50% year-over-year and it looks like about 35% sequentially. How should we think about China specifically on a sequential basis how sustainable is that given some of the macro trends? I mean clearly you are able to buck them for a quarter but do you have any concerns of tightening credit situations or of the industrial productivity slowing at all in that geography?

First I get you with the comment that we can buck them for a quarter. I think we’ve bucking trends in China for about two years that business is growing very well. We’re strengthening the management team, diversification of applications, strong growth and real penetration on OEMs on the cutting business, where our market share and displacements of legacy technologies has been tremendous growth in the welding applications. We still have a strong pipeline of potential automotive orders that which I think we’ve closed a number of automotive orders. We mentioned that we’re gaining some share on new additive manufacturing applications in Asia some of those were in China. We had very strong sales of QCW lasers for welding of consumer electronic frames so it’s a pretty diversified business. Sequentially I don’t think, you are going to see any dramatic growth in China, but we’ve got a solid backlog coming into the quarter and that’s pretty much the trend that we see annually is that you ramp up into Q2 and Q3, Q2 and Q3 can be pretty similar and then you have a generally a bit of seasonal weakness into Q4. We’re not seeing at this point and time significant impact related to credit tightening or lack of liquidity. It’s something that we monitor on an ongoing basis and clearly the situation can change pretty quickly. Often what would happen if that does tighten you are unable to collect some of the prepayments from customers and you may have to delay shipments but we’re not seeing any of that at this point and time. Patrick Newton – Stifel: Great. Thank you for taking my questions.

Our next question is from the line of Jim Ricchiuti of Needham & Company. Please proceed with your question Jim Ricchiuti – Needham & Company: Thank you and good morning. I just wanted to ask a question regarding the QCW and the glass cutting application is this for a display glass application and can you maybe elaborate on how you see that market developing for you?

We don’t believe the actual display is some smaller glass parts. It’s a relatively new application Jim. There were projects. I think it’s a typical example of applications, where projects will come and cycle in and cycle out. I think it is a potential key area of growth as more and more people try to cut different types of glass with lasers over the coming years. But this is not yet into the display side a lot of the display glass cutting applications are underdevelopments and using different types of technology. We can’t really disclose that much more about it. Jim Ricchiuti – Needham & Company: Okay but it’s not – it’s so is it a consumer electronics application or is it something outside of consumer electronics?

We believe it’s within consumer electronics.

It is – I’ll go with consumer. It’s not only glass, but ceramic glass for example using ceramic and glass with the way our lasers speak of this region and for this we’re minimum 10 times reported – to compare to technologies. But it’s not only consumer electronics. It’s also the contraction new fort them, new from market windows and our employing to contraction of (inaudible) our lasers very suitable and with not only laser for this, for the (inaudible) contraction wise. Jim Ricchiuti – Needham & Company: Valentin thank you for that. And then question on pricing. Tim as you described the competitive landscape and I’m referring to the high power segment of the market it seems like you are still in a very strong position and I’m wondering if that is affecting the way you are thinking about pricing in terms of going after the market. You have obviously been moving down the price curve to spur adoption of the technology. But at this point is there any thought to taking the foot off the gas pedal temporarily. I wonder if you just talk about the pricing environment and how you view it.

Well pricing point is, we’re all working very hard long time to decrease cost of manufacturing of our laser especially in March quarter and we’re very successful for instance high powering lasers every year with relative with the last quarter by 10% to 15% as minimum sometimes 20% per year. This year is not an exception. So, (inaudible) on how to control pricing. Our price policy based on the, for us to open door for used laser for more and more applications, which is very sensitive to the price from other site also (inaudible) to control the situation and markets (inaudible). Jim Ricchiuti – Needham & Company: Okay. Thanks very much.

Our next question is from the line of Avinash Kant of DA Davidson. Please proceed with your question. Avinash Kant – DA Davidson: Good morning Valentin and Tim. A few questions. The first one, could you give us some idea how much exposure did you have to the automotive market in the quarter like what percentage of business it was exactly?

It wasn’t anything fundamentally different from previous quarters that once the orders being called off in Europe, we continue to see quite a number of lasers called off on a regular basis by some of the major Asian manufacturers and we had good orders and deliveries in North America Avinash as well. So, typically we can identify around 15% of sales and then there is some other portion of sales for cutting and marketing systems that goes into automotive that we can’t really identify. So, no fundamental change that I have noticed. Avinash Kant – DA Davidson: Okay but any visibility in terms of getting some of the larger orders from other automotive players beyond what you’ve already received? There was at least one that you are expecting…

It depends on the market situation. The Europe as we know is now this year sales in have done much companies it’s not increase and decrease (inaudible) biggest place in the market segment. Of course the delays in the print probably expansion of the production lines but in other regions there is still record situation, where we are working with companies and with production perhaps with for 2014 plan to increase to install a new production line and to increase production. In the case, there is more open for new technologies in current production line of costs, where you can say what you market in spite they recognize big advantage of new technology, IPG technology in particularly but they’re not very up to invest in this to replace old technology, if this is a major problem why did you go and go on a big potential but where you need to go especially market now is not as it was 10 years ago. Avinash Kant – DA Davidson: Okay. I just want to check a number Tim, maybe what was the medium power sales, I may have missed it.

Medium power sales were $15.7 million. Avinash Kant – DA Davidson: Thank you so much.

And our next question is from the line of Jagadish Iyer with Piper Jaffray. Please state your question. Jagadish Iyer – Piper Jaffray: Yeah. Thanks for taking my question. Two questions Tim, first how should we be thinking about the gross margin trajectory, I think Valentin made some comments about expansion of capacities in Russia as well as in the U.S. as well as I guess in China in the backdrop of expanding capacity pricing that you’re seeing and your cost reduction initiatives. I’m not looking specifically for a number but I just wanted to see well how should we be thinking about it as we look at it for the second half of this year and into 2014? How sustainable could the gross margins be?

As explained before that we are – our positive to hold gross margin we have between 50% and 55% well of course temporarily we can increase margin only for 60% 65% but for account to the increased sales that it might go with – we will prefer to increasing to our sales and production out of the distribute our lasers much more in many new applications then took hold just look for temporarily for gross margin because the strategic for a long time you could not exaggerate you have to invest, you have to invest, you have to develop new product, you have to prepare new manufacturing capacity (inaudible) into increased productivity and so it’s all cost money and we are working very seriously because we allot one year or a few years companies in market with that if you’re looking for long time to say in whole region for additional market for 50-50 pipe it’s enough for them we – but we cannot promise you to grow our gross margin deposits. But we’ll however we are very sure we have formed this level a long time. Jagadish Iyer – Piper Jaffray: Okay. So another question is how should we be thinking about the systems business for the second half of this year in terms of contribution to the total revenue, please?

It depends when you’re talking out in the world to – for example there is a quite a lot of orders we’re working on in North America, there is a couple of orders in Europe these are actually fairly high value added systems, it still going to be a relatively small parts of total revenue. In Q4 you could see some pickup in the systems business in Russia but again it’s still going to be well below 10% of total revenue. So you can see it’s working hard in developing that business in specific geographies like Russia and outside of Russia we’re focused on very value added type applications there is a recent order we got for our cladding system that’s extremely high value add but it’s taking time to get some traction there I think that it’s going to take time to build that business up to say $50 million run rate is we’ve always maintained. Jagadish Iyer – Piper Jaffray: Okay. And just a question for Valentin, I just had a quick question Valentin, I was wondering do you have any updated view in terms of the overall fiber laser growth for this year and any thoughts early for 2014. Thank you.

We haven’t updated you on the growth of the fiber laser market at the moment.

But still fiber laser market still below 5 for first generation we expect next five year we’ll have very serious growth but want to grow limit this market it’s for many application well it’s starting to introduce all the ways of the test qualifications for customer only every month you also we will – we expect next quarterly year for revenue a year with a very big growth. Jagadish Iyer – Piper Jaffray: Thank you.

But we are not sleeping, we develop new and new products introduced for new application for example we have told them next year we’ll have serious contribution from UV lasers from new generation (inaudible) lasers and so on now which is players in this market as I said before still not sufficient for the market and not this market to grow it’s a very limited due to best quality of lasers which and very high cost of this laser which I think current place this market provided to customers, customer is not fit at all we expect new generation of lasers which will allow them to open door for (inaudible) of the laser for many application. We’re ready to provide to customers to meet their expectation.

Our next question comes from the line of Tom Haynes with Thompson Research. Please proceed with your question. Tom Haynes – Thompson Research: Thanks. Good morning gentlemen.

Hi, Tom. Tom Haynes – Thompson Research: I was just wondering maybe you could elaborate a little bit on your involvement in the additive manufacturing space is that a new market, it sounds like it’s a new market for you but I don’t think we’ve talked about it all?

No, I think it’s – well first of all it’s a market we’ve been involved in for probably over 10 years one of our oldest customers in Europe, he’s been around doing this process for us considerable period of time. Just about all of the major manufacturers of additive manufacturing equipment to our customers of IPG or a small company in the UK, our view on that market is a lot of the growth has come out of the plastics additive manufacturing. I think the view is that the plastic side is going to slow down and really the value add the engineered parts is much more on the metal side and that plays a much more favorably into IPG’s hands because most of the deposition technologies are laid to the used on their own on the metal side. So clearly there is a lot of interest in this area, we believe that we provide the unique fiber laser solutions out in the Gulf we’ve been sold into most of the major customers in those areas for a considerable period of time. We also think that additive manufacturing expands beyond just the simple engineered parts put into strong growth for example for cladding which is another deposition technology historically we think more and more lasers will be used for high speed cladding and deposition processes as well.

With all said now they’re used for the 1-micron in our lasers for this little more fleet but now we provide also highest quality and cheap this 2-micron laser which very suitable for plastic providing and the 3D printing and so we qualify lot of per calcium (inaudible) and now develop highest quality of high power they did laser for the first ten of this laser for some – by some customers that we have shown the results out of the many cases of more fine what we – this sintering and so it’s a new way of opening the opportunities of the before touch wave lengths were not available. Now we open door for such open lasers for market use. Tom Haynes – Thompson Research: Is it mostly the high-power lasers which gets sold in the market?

Historically it supposed to be not medium power lasers so we’re now starting to see as we mentioned the customer had recently purchased a 10 kilowatt laser which is very high-power stat application to produce a pretty large part from different types of alloys. So some of the bigger parts of power of laser is increasing we’ve also heard from one of our oldest customers who is historically bought 2 to 400 watt lasers that’s starting to consider moving up into the kilowatt scale range so again probably to produce larger parts.

Well it’s probably a much highest peak. Tom Haynes – Thompson Research: Okay. Just a follow-up. It sounds like the seam stepper programs were way long nicely. Do you feel that the markets for the appliance is larger than the opportunity in the automobile sector for the same stepper?

It’s difficult to say immediately this time we have started marketing to couple of companies and the potential demand for welding on appliances and other general manufacturing is substantial, I can’t quantify whether it is big as the automotive or not but it’s pretty substantial in those areas as well with millions of units of products produced a year. Tom Haynes – Thompson Research: Great. Thank you.

Thank you. (Operator Instructions). The next question is from the line of Mark Douglass with Longbow Research. Please proceed with your question. Mark Douglass – Longbow Research: Hi, good morning gentlemen.

Good morning, Mark.

Good morning. Mark Douglass – Longbow Research: In the prepared remarks you talked about German automotive being down or at least weak. Do you see this is a more positive spending or they slowing down investments in general for the foreseeable future?

Generally gave an specific commentary about European automotive, the European automotive is recognized as being weak at the moment in terms of total output. We had call offs against on main agreement that we signed with one of the main companies as well as other orders placed. So, in terms of automotive end market has been it’s been relatively anemic for several quarters most of our growth on automotive is coming from Asia and – and North America. So, I think until you see a little bit of an improvement in the economic situation there you’re seeing a little bit of a pause in some of the deployments for different applications but we continue to work closely with just about every single company there and some of them are deploying outside of Europe for their new factories for example in Asia and we’ve got orders there as well.

And now the largest Japanese company qualify our laser for market use in their production while also they are going very slow but now they’re finishing claim that performance have to by proof to use in these with Japanese automotive industry and Korea wants a new phase of penetration Korean market with our new product for automotive. The major our – the potential – we have now with seam stepper it’s a unique product with open and lot of new opportunities is there it’s new where we replaced other systems as spot welders. Now in the use only automotive industry up to 100,000 spot welders 100,000 where we replace our seam stepper much better provides much higher quality and also the better condition environment they have this in (inaudible). So, the result even 10% to replace it from this out and it’s a huge business and we’re going successfully now with this direction now with many companies relating test and qualification of our seam steppers we started this process outperform what you see receptive occasionally couple of months ago where there was during next year it would be – we’ll start much penetration on the replacement of spot welders in mainly – not only automotive also different manufacturers of refrigerators mainly are when they produce it for new opportunity for them. Mark Douglass – Longbow Research: Okay. With that seam stepper are those sales coming, well you already have a pretty good installed base or is it a – there is more growth available for the fiber lasers, is this going to be a mix of currently installed fiber lasers plus new installs or mostly going to come along with new fiber laser sales as well?

Seam stepper – includes fiber laser very typical from total (inaudible) of what fiber laser inside of the seam steppers controller but also its the various special optical (inaudible) we sold largest capacity with major – if you press time where that could be used without any protection ISF installed once it open the reserve of their major problem with laser they now they have to put the laser automotive in large cabins very expensive each such cabin cost up to $1 million it’s all create a lot of problem addition of what, with our seam stepper first time which qualified to use without any protection against so far. It’s enormous step required but instead by would first introduce such technology in the market.

Thank you. Our next question is coming from the line of Jiwon Lee of Sidoti. Please proceed with your question. Jiwon Lee – Sidoti: Thank you. Just I wanted to get back to the second half quarter expectation. So, mainly the second half quarter is largely driven by the similar market dynamics or could you point to a couple of areas that might be a little bit different in the second half versus the first half?

I think the dynamics are broadly similarly and have another good quarter in China because there is strong backlog there. We actually had a very strong quarter in order flow out of Japan in Q2 whilst revenue was a little bit lighter there, that will be looking for a slightly changed dynamic we’re expecting growth in revenue out of Japan. Clearly in the second half of the year you expect Russian business to pick up because of the basing of capital expenditures. And then in Q3 we got strong backlog coming into the quarter end in North America so you’d expect a good quarter there. In terms of end markets and products with product lines I think you continue to see generally the same dynamics around areas. Jiwon Lee – Sidoti: Okay, that’s helpful. And the second follow-up the pricing dynamics outside of your own initiatives and what’s not, did you guys observe any different dynamics within the laser industry into July?

We haven’t noticed anything in particular around the industry in general on pricing, nothing that I’ve heard reported to me or from our sales group, so no. Jiwon Lee – Sidoti: And that include…

Have you noticed something Jiwon? Jiwon Lee – Sidoti: Not that I can’t recall but I’m trying to think whether that includes sort of the Chinese market the Japanese market not just here but sort of globally your European market?

We haven’t really heard anything I mean I think there is a rumor out there that IPG was going to suddenly drop the price of pulsed lasers by 25% I think. I don’t know where that came from. We clearly are always introducing new product that has lower cost related to it so try and penetrate new applications. We’re looking at completely new designed pulsed lasers to try and get greater market share from very low cost YAG lasers but some of the rumors out there in the market I don’t think are with foundation.

This is no way this is that you said problem we have the competitors won’t change these manufacturers for a low end pulsed laser and low end very low quality pulsed laser they provide cheaper price but now with the way open now we’re giving cheaper than they provide with the remainder for us the same high product. But our major – the where we’re looking for high grade pulsed laser we developed during the last year and this year new generation both high, much higher peak power the short pulsed lasers sophisticated, now with the wrong customers (inaudible) customer come to this new product even much more profitable – product in the high price also but so obviously we probably we are expecting that the performance with this new product there is many other people in the market. Only for consumer electronics throughout the year we’ve sold a large quantity of such laser for (inaudible) and other guys similar guys and so and they very (inaudible) laser.

Thanks. Our next question comes from the line of Joe Maxa with Dougherty & Company. Please proceed with your question. Joe Maxa – Dougherty & Company: Thank you. In China you talked about what a diverse growth – growth and diverse application I wonder if there is just one or two that is all the majority of the sequential growth that you can point to or the driver was for such a big movement?

It’s across the main applications, that was strong growth in some welding particularly strong growth in cutting where we’ve highlighted I think this over the last year or year and a half Joe there is the way to which fiber laser technology is being adopted by the major OEMs, there as compared to C02 is even faster than around the rest of the world although we’ve actually seen a big pick up in some of the main OEMs in Europe as well. So people don’t seem to be so waited to some of the older technologies they want the latest and best and most efficient and most productive technology. So we haven’t lost any share against on the fiber laser competitors on cutting applications and we certainly seen our share of the cutting market grow very dramatically. We saw a strong growth for the QCW for some of the welding the micro welding applications I’d referenced with frames for consumer electronics and another good quarter on some of the marking applications both high quality marking applications as well as some of the more general manufacturing. So, it really was across the board on different applications with different OEMs and then also Joe of the very high power 10-kilowatt lasers on deposition manufacturing additive manufacturing applications. Joe Maxa – Dougherty & Company: I see. And one other question on the advanced application side what you’re seeing there and how long or when do you expect that could be a growth driver again for you?

The advanced application just continues to be an uneven business quarter-to-quarter we did deliver several of the high-brightness lasers in Q2, there was an order that was taken in the first quarter, backlog there is a couple of units to go out in the third quarter. So to get to more even growth in that end market with or more even revenue with growth requires those applications to be commercialized. And I think we’re probably still 18 months away from having serious visibility into that. There are other orders that we expect to get from time to time but it’s just it continue to be an uneven business, we’re not losing that business to any of our competitors certainly no one else is capable of producing these high-brightness lasers at the parallel levels or even lower parallel levels as compared to IPG, it’s just a question of waiting for that market to develop more consistently.

Well Joe we like to get our lasers in those they’re going around but they don’t have budget and most of these people don’t have budget, they’re asking budget but you understand the background, this is a problem with advanced application which is very slow business. But we don’t have any you can say only on the market value for all this. Joe Maxa – Dougherty & Company: Thank you.

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

Thank you for joining us. We look forward to speaking with you next quarter with good news again.

Thank you, everyone.

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