Good morning and welcome to IPG Photonics' Second 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, July 28, 2015. 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. I'll now turn the call over to Dr. Valentin Gapontsev. Valentin P. Gapontsev - Chairman & Chief Executive Officer: Good morning, everyone. First of all, I want to congratulate our management team…

Thank you Thank you. Our first question comes from the line of Krish Sankar with Bank of America Merrill Lynch. Please proceed with your question.

Hi. Thanks for taking my question. I have two of them. First one either Valentin or Tim, thanks for the clarification on the Han's Laser. I'm kind of curious, you did say that many of your OEM customers have tried to make fiber lasers themselves and I do understand it's a very difficult technology and that you guys have a significant cost advantage. So why do your customers still try to make these captive lasers when they learn from other folks that it's not that easy to do it or get any cost advantages? Valentin P. Gapontsev - Chairman & Chief Executive Officer: It's mentality of people typical with one of the OEM customers clearly (27:17) woven laser or (27:20) we have some worry about if their concerns, okay, we'll have some sales advantage, but it's not serious, practical. Second, it is also they hope to get some of the cost advantage, but we control the prices and we dictate this in our sales prices typical lower than the cost of manufacturing of such laser with some customer who are really making some prototype. And so they are much more expensive than our sales price.

Got it. And then as a follow-up, given all the noise around China both in terms of macro and how the market environment there is doing, have you seen any slowdown? And I remember asking you this question in the past, too, and you guys seem to be defying all the China trends. So I'm kind of curious A, have you seen any kind of change in China after a record quarter? And B, is it again a function of the fact that your technology is more replacing legacy technologies or is it the fact that the ASPs are pretty low? Thank you. Timothy P. V. Mammen - Chief Financial Officer & Senior Vice President: So to-date, we have not seen any change in order flow out of China. We had a very good quarter and guidance includes another strong quarter from China. So, right now, with all even the economic uncertainty out there and all the noise, we are not really seeing any changes around demand patterns. I think you continue to see local suppliers in China gain traction as well as a diversification of the application set and displacement of traditional technologies with lasers. I've talked previously about the desire of Chinese manufacturers to come view it as more high quality manufacturing. And I think that trend continues to take hold. There's a lot of R&D that's going on not just around the cutting applications that are well developed, but in more advanced welding application, some of the most advanced 3D printing applications we've seen has happened in China. So that thesis around improving the quality of manufacturing, increasing drive towards automation using robotics also helps laser sales. So we think that continues to provide the momentum that we are seeing in China.

Got it. Valentin P. Gapontsev - Chairman & Chief Executive Officer: (30:00) some increasing problems. There is many manufacture work for new technology to improve this position in the market. So even it's not for the mix shift, it's the total drop of economy with sales of high-technology product.

Got it. Thanks, Valentin. Pretty helpful.

Our next 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: Hi, Mark. How are you?

Good. Tim talking about automotive, so can you walk around the globe? It sounded like – I think it's good everywhere, but can you describe some of the developments in automotive and where they're investing and how they're investing? Timothy P. V. Mammen - Chief Financial Officer & Senior Vice President: Yeah. Demand from the automotive all round the world continues to be good. I think our penetration into both the end manufacturers and Tier 1 and Tier 2 suppliers is very strong. It's across the usual applications as well as the more specialized applications, the cutting applications for 3D, which one of our OEMs supply, the welding applications we've seen good traction out of. And then we started to get orders for these brazing lasers in Europe and have got many different people evaluating that product. We mentioned in Japan we're seeing good demand out of welding applications as well. There are some slightly lower volume much more advanced application. We're seeing people using the lasers for structuring, for example, the internal cylinder chambers to improve fuel efficiency and reduce, I think, its friction between the piston head and the cylinder. So you can get down to some very specific and very specialized applications as well. Some of the welding applications are going into the air bag detonators too. So we're helping to solve some of the problems that have been encountered in that industry. So it's a pretty diverse and continues – I think we're actually sort of seeing some additional traction on the automotive side. People are starting to re-appreciate the value of the lasers and I think our competitive position particularly with regard to the main manufacturer in Germany has been strengthened over the last couple of years. I think people – if you go back two years, were giving some weight to the main competitor in Germany where as we think now where we're starting to gain some additional – over the last few years have worked very hard to gain back some of the traction with everybody around the world.

Okay, that's helpful. On the brazing orders in Europe, is this – are these new platforms that are transitioning to brazing or is this substitution of other brazing lasers that are already in place? Valentin P. Gapontsev - Chairman & Chief Executive Officer: The conventional lasers control a very serious problem with new materials and so on for braze quality was very critical. We develop what they ask us to develop. We helped them after many attempts before to make their sales force with added partners and we very shortly developed an excellent technology for brazing which resolved all their problems. So it's fully qualified, now we started mass use in all production line. In other case, the brazing market now know about this result and also start asking us to test and are extremely interested in this new technology, new patent technology. Timothy P. V. Mammen - Chief Financial Officer & Senior Vice President: So the existing product lines and existing platforms, it's not just waiting for new platforms.

Right. Okay. And then finally, Seam Stepper, how is that working in the quarter and the year? Valentin P. Gapontsev - Chairman & Chief Executive Officer: Well, also now we are past qualification – and now we've started the process of mark our OEM purchase, before it was only the shipment for test with a few units now although we are starting to see real OEM business with Seam Steppers.

Right. Thank you.

Our next question comes from the line of Joe Maxa with Dougherty & Company. Please proceed with your question. Joe Maxa - Dougherty & Co. LLC: Thank you and congrats on a nice quarter and outlook. Question I have is – it's a pretty big step-up in revenue, let's say, over the last four quarters, Q2 and then Q3 going up to perhaps as high as $250 million, talked about a lot of new applications, lot of strength, but I am wondering if there is a few that are really driving that growth – that big growth from let's say the $200 million level up to perhaps $250 million? Timothy P. V. Mammen - Chief Financial Officer & Senior Vice President: It continues to be the – probably the four main applications primarily, cutting, welding, brazing, additive manufacturing clearly is growing very strongly this year and marking and engraving while it is not growing strongly it continues to be a very, very significant application for us. The other newer applications like cleaning and stripping are still relatively small. They are sort of 1% or 2% of revenue and still represent significant opportunities in the future. So the additive – the deposition as well as the ablative process is still really starting out. Some of the microprocessing applications continue to be small, Joe. So this growth is really being driven around the core applications and we still have to benefit from significant demand traction on newer applications that we continue to work on and develop with customers. Joe Maxa - Dougherty & Co. LLC: And so what's the growth in the core? Is that clearly driven by increases in technology efficiencies? More lasers being qualified at various customers and that's really what we are thinking about when we're saying driving by…

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, Valentin and Tim very solid results. And thank you for taking my questions. One is that I wanted to clarify, Tim; did I hear correctly that China revenue was $92.9 million in the quarter? Timothy P. V. Mammen - Chief Financial Officer & Senior Vice President: Yeah, $92 million odd. I can't remember whether it's $99.9 million – yes, $92.9 million-plus. Patrick M. Newton - Stifel, Nicolaus & Co., Inc.: Okay. So, I guess, just focusing in on that I think you answered earlier question on Chinese demand that you are not seeing any type of slowdown at all despite having, I guess, a significant number of infrastructure data points that have definitely been coming under pressure. And I think you said that the main reason is in essence China focusing on becoming high-tech manufacturing. But I guess, as you sit here today and you just printed your fastest year-over-year growth in China in roughly two years, do you have any creeping concerns at all maybe that cutting penetration in China is higher than in other markets so that could lead to slowing growth, that sell-through of auto is showing some signs of fatigue, that household softness could pressure white goods, any creeping concerns there at all from your end or do you see this acceleration in China as being sustainable? Timothy P. V. Mammen - Chief Financial Officer & Senior Vice President: You know, I've said within the Q3 guidance, we continue to have a strong number from China within that guidance. We've continued to see strong order growth year-over-year through the second quarter. It's being driven by the materials…

Our next question comes from the line of Jim Ricchiuti with Needham & Company. Please proceed with your question. Jim A. Ricchiuti - Needham & Co. LLC: Hi. Thanks. Good morning. I was wondering if you might be able to size this opportunity for the three beam brazing application that you are having some traction in the automotive market. Is there – is it too early to size that? Timothy P. V. Mammen - Chief Financial Officer & Senior Vice President: I think it is a little bit too early to be able to size it, Jim. As we said we've got some initial orders from one automotive company and other people are evaluating it. I don't know whether it's going to be a – do you have any idea, even it's like a 100 units a year or 200 units a year for brazing? We just don't know at this point in time. Valentin P. Gapontsev - Chairman & Chief Executive Officer: Brazing, it's a large business. It's a large business and so on. Before they use from the diode systems for these but were very – lot of problem with the quality. It's very serious problem and we resolve of this problem, but today – now it qualifies (49:52) in the major, largest of the customers, open door for application for all the factories worldwide and the others also looking to use this. So we expect sales of only brazing lasers would be many hundred units per year. Jim A. Ricchiuti - Needham & Co. LLC: Okay. Valentin P. Gapontsev - Chairman & Chief Executive Officer: But brazing is only one of the application. Now with our credibility and connections in the automotive market, we improved our margin. Now (50:28) or the customer – major customer opened door…

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

Thanks. Good morning and congratulations on your continued strong performance. I wanted to ask Tim about the margin trajectory. Obviously, you're trending towards the high end of the target range for gross margins and we're seeing good operating leverage here. Could you comment on what we should expect as your volumes continue to grow? Orders seems to be very healthy here and also tie this into your pricing dynamics, how the average selling price is falling in recent months. Thanks very much. Timothy P. V. Mammen - Chief Financial Officer & Senior Vice President: So we're not providing any change to the margin profile in terms of like gross margins. We still think that the top end of the range of 55% is reasonable. It still fits with the overall strategy that we have to drive increasing use and penetration of lasers into many different applications. As usual, you will have puts and takes around gross margin. You will have some probably pricing pressure at the lower end of the product line. We've seen that with pulsed lasers and that will – that pricing pressure on those products would reduce those margins slightly. And then you've got new product introductions at the higher end of the line that will improve your gross margins. You've got transitions in cutting lasers that continue to move up power level that should benefit margins a bit and the new product introductions in micro processing and the optical heads and other areas. So it continues to be a strategy that's not driven by driving gross margins up to 60%, it's a strategy that's driven by driving laser adoption into existing and new applications. In the third quarter, the top end of the range, if you build your models out, it would assume that operating margins are quite high. They are above the sort of underlying 38% that we had in Q2. But you have to remember that we are now continuing to invest on, for example, the selling side we mentioned that we are going to open up some new sales offices around the world. So we need to continue to invest on those operating expenses, on selling, on R&D and continuing to invest on G&A. So I don't expect operating expenses to continue on a downward trajectory. This is a complex business. We have operations all around the world, and we need people on the selling side, the application side and the G&A side to support all the work that's done to bring new product to work to market on the R&D side. So, you may see, as I have always mentioned, very strong revenue quarters made from time-to-time left operating margins above sort of medium-term trajectory that we estimate. But, overall, we don't see any fundamental shift in the business model nor are we targeting one at the moment. We're very happy. We think the business model is basically stellar.

Our next question comes from the line of Mark Miller with The Benchmark Company. Please proceed with your question.

I was just wondering an update on some of your newer opportunities. I think you mentioned stripping was rather small, but what about 3D printing? And I apologize if I missed this, if you give us an update on the UV fiber laser? Valentin P. Gapontsev - Chairman & Chief Executive Officer: UV fiber laser, we didn't make a great development there, but still – now we still – we started to sell such lasers. But most of them are still in a stage of verification testing and certification. So, we lifetime test and so on. But principal development are going extremely well and really we'll soon introduce market family of such lasers for different application. Very different, very much more efficient, compact and reliable and also much cheaper than existing market. So this way we hope to become major player in the market niche. We developed this perfect technology for non-linear crystals and more bigger programs from point lifetime the year which it's sold (58:56). Now with this technology with so much production in Marlborough, Massachusetts, crystal growth and processing center, we really hope it would be (59:09) not possible to make (59:10). Timothy P. V. Mammen - Chief Financial Officer & Senior Vice President: And then just on the additive manufacturing, Mark, we had mentioned that the run rate on sales was about on a – above a $30 million a year basis and that represents more than 50% growth compared to last year. And Valentin gave some color on additional additive manufacturing work that's going on. Most of the other applications tend to be 1% or 2% type applications. There is an increasing diversity of them. The cleaning and stripping has become more of an OEM business in the last year than it was in 2014, for example, it's still relatively small. The cladding business continues to grow some of the industries we served there, for example, the oil and gas industry. The aesthetic applications have continued to perform well. That generally tends to be a function of actually a positive signal on the economic growth. So, people tend to use the dermatological and the aesthetic side of things when the economy is looking a bit stronger because they've got money to spend. We are seeing also good sales in Asia because our lasers function well there. So there's a diverse – an increasingly diverse set. The drilling application, for example, that's going pretty well this year. It's still relatively small, but it's a couple of million dollars a year.

Thank you. At this time, we have reached the end of the question-and-answer session. I would now like to turn the conference back over to Dr. Gapontsev for any closing or additional remarks. Valentin P. Gapontsev - Chairman & Chief Executive Officer: Thank you. Thank you for joining us this morning. We look forward to speaking with you on next quarter's call.

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