Good morning and welcome to IPG Photonics' First Quarter 2015 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. 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. Angelo P. Lopresti - Secretary, Senior Vice President & General Counsel: 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, 2014 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 or by contacting the company directly. You may also find copies on the SEC's website. Any forward-looking statements made on this call are the company's expectations or predictions only as of today, April 28, 2015. The company assumes no obligation to publicly release any updates or revisions to such statements. We will post these prepared remarks on our website following the completion of the call. I'll now turn the call over to Dr. Valentin Gapontsev. Valentin P. Gapontsev - Chairman & Chief Executive Officer: Thank you, Angelo. Good morning, everyone. IPG delivered another strong quarter and we are…

Thank you. At this time, we will be conducting a question-and-answer session. Thank you. Our first question comes from the line of Mark Douglass with Longbow Research. Please proceed with your question.

Hi. Good morning, gentlemen. Timothy P. V. Mammen - Chief Financial Officer & Senior Vice President: Good morning, Mark. Valentin P. Gapontsev - Chairman & Chief Executive Officer: Good morning.

Tim, so you're going to keep getting this question, the cash on the balance sheet keeps piling up. Any thoughts on what's going to happen with that cash in the near term, dividends or anything like that, share repurchases? Timothy P. V. Mammen - Chief Financial Officer & Senior Vice President: At this point, we've not changed the strategy at all that we articulated, albeit five weeks or six weeks ago at the end of 2014. So as we've discussed previously, if you look at the end markets that we operate in, we are still relatively early in penetrating many of the applications and potential end-users for lasers. Valentin articulated in his part of the call today numerous new applications that the company is targeting that take us beyond the industrial area. So our view is that, strategically, it's extremely important to continue to maintain a healthy and strong cash position with the view to deploying that through acquisitions as and when we find stuff that is compelling, either from a technology or valuation point view. I think that if we were much more mature and further developed into these end markets, we'd be talking more actively about returning some of that cash to shareholders or using it in other ways. I still, I'm very firmly of the opinion that, given where we stand, the strategy of the company is pursuing by being conservative and cautious and looking at acquisitions rather than rushing into things is very important, and I think patience is required in relation to that strategy. And that basically continues to be the point of view that we have and hasn't changed in the last couple of months. I think the worst thing for us to do would be to go out and rush into some acquisition that wasn't particularly good.

Yeah. I'm not necessarily thinking of acquisitions, just the cash flow position and the generation has been so strong, more than outpacing your CapEx needs, just returning some of that to shareholders by other means, but didn't sound like that that's really changing. On China, can you describe a little bit about what's happening on the ground in China? Investors continue to ask about how you can be doing so well in China, given the macro headwinds that appear to be there in the industrial manufacturing space. But can you discuss a little bit more in detail how you're performing in China and what's going on in China for IPG? Timothy P. V. Mammen - Chief Financial Officer & Senior Vice President: So, correct me if I'm wrong, but my recollection is that this has been a concern of investors for about four years, and we've continued to execute extremely well in that area. Fiber laser adoption and penetration has continued to grow. That's been achieved by IPG working very, very closely with OEMs and other customers on the ground there. We started with a business that was predominantly a market engraving if you go back five years or more years. We've diversified the application set, so that developed into cutting applications. We're now getting into more and more welding applications. There is a significant amount of R&D that's going on in China with advanced welding applications. We mentioned some welding in the aerospace industry where potential replacement of rivets within the joining technologies is being looked at in China. So you have a very diverse set of applications. You have an investment that IPG has made on the ground in service, sales, application support and very close relationships with customers that mean that we've benefited from the overall growth in the industrial sector. The other thing that is interesting is that, yes, the macro climate at least to the headline has weakened. Growth is expected to be 7%, the lowest level in almost 20 years. It's still not driving through on the more advanced side of the industrial market and the way I've characterized that previously is that there is a very real impetus in China to transition from being a low cost manufacturing region to being a very advanced manufacturing region in a similar manner to what's being achieved by other countries in Asia. So that drive benefits laser sales in general and continues to offset some of the perceived weakness in the economy. In addition to that, we sell a lot of lasers to people in the consumer electronics industry that are selling products worldwide and not just in China, and those companies continue to perform very well. So that ends up benefiting us. So there are many different aspects to our performance in China, our good performance in China.

Thank you.

Our next question comes from the line of Tom Hayes with Northcoast Research. Please proceed with your questions.

Thank you. Thanks for taking my question. Tim, on the strength that you're seeing in the Japan cutting market, I was just wondering how would you size up the penetration rates right now of fiber lasers in that market? Timothy P. V. Mammen - Chief Financial Officer & Senior Vice President: Still relatively early stages. So, this growth was sort of really the first acceleration to our main OEMs that we had seen: it's being gradually building last year and really started to accelerate this year. That probably still – they've maybe transitioned from between 5% and 10% towards 20% and the targets they've told us over the next two years is to move towards 50% to 60% utilization of fiber lasers. We think potentially that goes high, given the general trends in the cutting industry.

Okay, great. And then Valentin mentioned in his opening remarks two of your new cutting technologies. I'm just wondering if you could maybe talk about the availability of those currently in the market? And then, are those sold separately or typically with systems or can it be both? Timothy P. V. Mammen - Chief Financial Officer & Senior Vice President: The question relates to the thick metal – ultra thick metal cutting that you talked about. Valentin P. Gapontsev - Chairman & Chief Executive Officer: Now the old manufacturing cutting system stay time to put on (38:38) the 1 kW, 2 kW laser use to the – use 5 kW, 4 kW, even 6 kW laser. But a lot of new opportunities is open to use technology with many 10 kW fiber laser. It's much faster and provide also very good quality today for thick metal cutting and so on. We try to convince the best our customer to go faster in this direction but they're very conservative still, don't put in the average time to overcome 10 kW. So we have made decision why not to provide our sales such solution to market to investigate market and to show the cutting manufacturing leaders that a lot of new opportunities here. And we indicate we won't compete with our customer. We provide solution which they're still not very interested. It's our policy and the direction.

Great, thank you. Valentin P. Gapontsev - Chairman & Chief Executive Officer: We believe, we can sell the manufacturing of 100 cutting machines during the year only with so high power. We develop new application also (40:00) implementation, this application and we develop on for machine solutions, high quality, and we really like to (40:17) this new application. Now with high power laser, it's a lot of touch it's not (40:21) in cutting, welding, cladding, and other and got new large scale opportunities.

Thanks for the color. Valentin P. Gapontsev - Chairman & Chief Executive Officer: We're ready to supply to any other integrator our – the best lasers, the optical solutions for the optical heads you need and so on. But if – from our side, we'll open door for everybody, but for this application, we again develop own full complete solution, including process and technology, hardware, machines, software, all to provide to some large applications our own solutions. And we're very successful in this direction now.

Thank you.

Our next question comes from the line of Jim Ricchiuti with Needham & Company. Please proceed with your question. Jim A. Ricchiuti - Needham & Co. LLC: Thank you. Good morning. You're talking a lot or at least it appears to be spending more time talking about new applications and new products. I'm wondering if there is any way to think about this in terms of are you anticipating a bigger contribution from these areas in 2015 relative to last year? I mean, what in particular should we be focusing on in the balance of the year as you talk about some of these newer areas? Timothy P. V. Mammen - Chief Financial Officer & Senior Vice President: I think some of them – Jim, it's a good question. We're working on different technologies and applications that point the way to the growth of the company over a two-year to three-year time horizon rather than necessarily over the next three months to six months. We're cognizant of the fact that as you get more and more penetrated in the industrial applications, the growth of the company in the medium to the longer-term is going to have to come from very innovative R&D in other areas and, in some instances, we're being driven in this direction by our customers who are seeking these solutions. In other areas, we are identifying areas where we think the fiber laser could have significant opportunities. So, in the nearer term, you're probably looking at some of the ablative and paint stripping processes where, as Valentin said, the initial work is already really done and completed on developing complete systems that can strip aircraft, and now what they want is someone who can supply the system and support the systems in the field on a commercial…

Our next question comes from the line of Joe Maxa with Dougherty & Company. Please go ahead with your questions. Joe Maxa - Dougherty & Co. LLC: Thank you. I wanted to follow up on the paint stripping system that you talked about. Have you had orders for that yet or is it still too early? Valentin P. Gapontsev - Chairman & Chief Executive Officer: (46:08) our laser to – already working for paint removal in the field, already working. It's a laser – it's our classical CW laser. For example, in one location, only one center, six-hour – 6 kilowatt lasers working very successfully. We have this laser, the customer possible qualification and are now looking for mass use. But we develop as much a better pulsed laser – multi-kilowatt pulsed laser, not CW, they open now still a new opportunity for this. So it's really now the time, new phase when really the demand will grow very fast. It's only still – they don't have customer, don't have real good quality manufacturer. We're ready to take such position. Joe Maxa - Dougherty & Co. LLC: Okay. And you mentioned the... Valentin P. Gapontsev - Chairman & Chief Executive Officer: Full system, not only a laser, full system, it's mobile system – a vertical mobile system, which include not only laser, not only a robot, but include also very complicated scanning system software to make maps, for example, aircraft before to – you won't have to prepare, it's a complicated system, but we are ready to take such responsibility. Joe Maxa - Dougherty & Co. LLC: I see, okay. Also you mentioned the seam stepper, it sound like was maybe gaining some traction and that had in the past talked to be about a pretty big opportunity for the…

Our next question comes from the line of Krish Sankar with Bank of America. Please proceed with your question.

Yeah. Hi. Thanks for taking my question. I had two quick ones. Tim, what kind of gross margin do you expect in the June quarter compared to the March? Timothy P. V. Mammen - Chief Financial Officer & Senior Vice President: Krish, we don't give any specific guidance on gross margin. Clearly with the level of revenue we've got and the strong performance of the business, we expect to be towards the top-end of the range. You probably see a bit of a pickup in operating expenses as well as the pro rating of bonus accruals and some of the benefit on SG&A drops off. So in order to generate the guidance range that I gave on earnings, you inevitably have to be reported at the top of the range on gross margin and similar range on operating expenses, maybe a little bit higher on operating margin for Q2.

Got it. Got it. That's helpful. And then, would you be interested in sharing, I'm kind of curious on your China sales. What is the ASP range of the lasers you sell in China? Or if you don't want to disclose that, what is the ASP in China compared to, let's say North America or Europe? Timothy P. V. Mammen - Chief Financial Officer & Senior Vice President: Average selling prices in China outside of the very low-cost pulsed lasers that we have are similar to elsewhere in the world relative to the volumes that the customers take. So we have some of our largest volume customers in China and they clearly benefit from pricing discounts. There is no fundamental difference otherwise in the pricing strategy there. Obviously, to compete in the pulsed laser business, again some of the lower-cost manufacturers there, we've done a lot of work to reduce both the cost and the selling price of the lowest power pulsed lasers.

Thank you very much.

Our next question comes from the line of Patrick Newton with Stifel. Please proceed with your question. Patrick M. Newton - Stifel, Nicolaus & Co., Inc.: Yeah. Good morning, Tim and Valentin. Thank you for taking my questions. I guess my first one is, in response to prior questions you talked about increasing fiber laser penetration in China and then Japan, cutting penetration moving to the mid-20%. I'm curious if you look at the cutting market in total, where do you see overall fiber laser penetration and could you give us some of the stats similar to Japan on North America, Europe, and China? Timothy P. V. Mammen - Chief Financial Officer & Senior Vice President: I think in Europe you're seeing people transition already to more than 50% and the view is again that they'll move overall up into the sort of 80% level or more if fiber continues to gain acceptance in the way that it has. In North America, it really is reflected, because the most of the manufacturers who supply North America are either European or Japanese companies. In Europe and China, definitely, the penetration on cutting applications is ahead of where it was in Japan, we've articulated that on many occasions. It's good to see the changes in Japan that are starting to take place now. Overall, on the market, it's a bit difficult to answer the question. You're probably trending towards about 35% to 40% penetration of the entire cutting market at kilowatt and above. So still significant opportunity for growth there if the overall trends that are expected over the coming years continue. Patrick M. Newton - Stifel, Nicolaus & Co., Inc.: And if you remove the vertically integrated players, where do you think that penetration would shift to? Timothy P. V. Mammen…

Thanks. Our next question comes from the line of Jeremie Capron with CLSA. Please proceed with your question.

Hi. Good morning, Valentin and Tim, and thanks for squeezing me in. I wanted to follow-up on this $5 million acquisition, more specifically, I wanted to confirm that this is a Russian company that you bought, and also I'm wondering if you are seeing more actionable acquisition opportunities in the remainder of this year? Valentin P. Gapontsev - Chairman & Chief Executive Officer: It's not a Russian company, it's a Belarusian company. Our neighbor – a Russian neighbor, but it's not Russian, Belarusian company. It's very rich company which have -it's 25 years old, we have very good portfolio of the very special controller for 5D processing. They have also very skilled team of people, not a large team, but very skilled person. They worked many years together, now they join us as our division. Timothy P. V. Mammen - Chief Financial Officer & Senior Vice President: And then the second part of the question is what's the perspective on opportunities for the systems? Valentin P. Gapontsev - Chairman & Chief Executive Officer: It improve, very essential, our ability to develop high-quality complicated coat (59:12) system has also opened for us new opportunities. It's exactly our target to provide to customers a more and more integrated solution, not only optical solution, but the most customer need for full complete solution or the way that it's only optic, it's only part of the machine, they need complete machine and we – our target, but we're able to provide such complete solution.

Okay. And do you see any more potential acquisitions in the rest of the year? Valentin P. Gapontsev - Chairman & Chief Executive Officer: We're always working and investigate many opportunities, but it's a complicated process, takes a lot of time, it's a lot of problem each time. But we're working seriously in this direction. But we are looking for not just to make some of this additional business, we are looking for real synergy because IPG is a very vertical integrated company and not like this – a lot of with the companies, which each is practical independent and many other cut platform (01:00:37). We're looking for synergy. It's much more difficult than just to buy some additional businesses.

Thank you.

Our next question is a follow up from the line of Mark Douglass with Longbow Research. Please go ahead with your question.

Hello, again. Tim, what kind of currency headwind on the sales line is baked into your second quarter guidance? Not the currency, just... Timothy P. V. Mammen - Chief Financial Officer & Senior Vice President: We gave the actual exchange rates that we use to generate the guidance. So we used euros to the dollar of $1 being worth €0.93 and similarly on the ruble and the Japanese yen, we used the current exchange rates to translate the forecasts we received from our different entities into dollars. So relative to current exchange rate, the currency is fully baked in. Relative to a year ago, I would estimate that the guidance range is about $20 million lower than it would otherwise have been if exchange rates were the same as one year ago. So the currency headwinds in Q2 would be similar to those in Q1, but we factored that into account within the guidance range. We're trying to make that very clear in the script by actually giving you the exchange rates we've used.

Right, right, I just was on a year-over-year basis and I figured it was going to be similar to 1Q, but I just wanted to confirm that. So, thank you.

Thank you. Valentin P. Gapontsev - Chairman & Chief Executive Officer: The more – perhaps what we worry about stability of dollar because our many more and more serious (01:02:45) short time would be a serious change of the dollar.

Thank you. At this time, we've reached the end of our question-and-answer session and now I'd like to turn the floor back over to Valentin Gapontsev for closing comments. Valentin P. Gapontsev - Chairman & Chief Executive Officer: Thank you for joining us this morning again and we are looking forward of speaking with you on the next quarter's call. We hope it would be great to report again. Timothy P. V. Mammen - Chief Financial Officer & Senior Vice President: Thank you, everybody.