Joe Greenhaigh – Vice President Investor Relations & Corporate Treasurer Guerrino De Luca – Chairman of the Board Bracken P. Darrell – President & Chief Executive Officer Erik K. Bardman – Chief Financial Officer & Senior Vice President Finance

John Bright – Avondale Partners [Alex Faher – Xon] Simon Schafer – Goldman Sachs Paul Coster – JP Morgan Andrew Gardiner – Barclays Capital Tavis McCourt – Raymond James Michael Foeth – Vontobel Andrew Humphrey – Morgan Stanley Corey Barrett – Pacific Crest Joern Iffert – UBS

Welcome to the first quarter financial results conference call for Logitech. At this time all participants are in listen only mode. We will be conducting a question and answer session and instructions will follow at that time. This call is being recorded for replay purposes and may not be reproduced in whole or in part without written authorization from Logitech. I would now like to introduce your host for today’s call Mr. Joe Greenhaigh, Vice President of Investor Relations and Corporate Treasurer at Logitech.

Welcome to the Logitech conference call to discuss the company’s results for the first quarter ended June 30, 2012. The press release, our prepared remarks and slides, and the live webcast of this call are available online at www.Logitech.com. As noted in our press release we have published our prepared remarks on our website in advance of this call. Those remarks are intended to serve in place of extended formal comments and we will not repeat them on this call. During the course of this call we may make forward-looking statements including forward-looking statements with respect to future operating results that are being made under the Safe Harbor of the Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those anticipated in the statements. Factors that could cause actual results to differ materially include those set forth in Logitech’s annual report on Forms 10K dated May 30, 2012 which is available online on the SEC EDGAR database and in the final paragraphs in the press release and prepared remarks reporting first quarter results available at www.Logitech.com. The forward-looking statements made during this call represent managements’ outlook only as of today and the company undertakes no obligation to update or revise any forward-looking statements as a result of new developments or otherwise. This call is being recorded and will be available for replay on the Logitech website. Joining us today are Guerrino De Luca, Chairman and Chief Executive Officer; Bracken Darrell, President; and Erik Bardman, Senior Vice President of Finance and Chief Financial Officer. I’d now like to turn the call over to Guerrino.

I obviously cannot be pleased with the operating loss we generated in the quarter but I’m encouraged that our results were consistent with our expectations reflecting the modest performance of the product portfolio that is mostly made up of our older products. When I isolate some of the factors that negatively impacted our profitability it’s clear to us that our results are similar to the prior year which is what we expected at the current stage of our turnaround. Our restructuring related costs totaled roughly $34 million in Q1. This is essentially the same amount as last year’s write down of our Logitech review of inventory. This year we also incurred $4.3 million in costs associated with the exit from our old campus in Freemont California and another $4.5 million related to the acceleration of our product portfolio simplification efforts which Bracken will address shortly. All these changes will positively impact our operating results in the future. I want to specifically mention two highlights in the quarters. First, I was very encouraged with the growth we achieved in EMEA with sales up by 28% in local currency. We’re well positioned in EMEA for a significant improvement in sales and profitability during the remainder of the fiscal year compared to the prior year. I was also pleased with the double digit growth in both the desktop keyboard and the audio product categories. The strong initial sales of the new generations of products recently added to our portfolio were significant factors in the growth achieved in both categories. I will now turn the call over to Bracken and I will return after him to comment on some elements of the proxy we filed earlier this week and on our strategy going forward.

I want to comment briefly on the restructuring initiatives we announced in late April. As painful as the process of restructuring is for any organization I was really pleased with the speed and the quality of our execution. We moved aggressively, we moved with precision as we laid the foundation for a cost structure that will improve our profitability and support our future growth initiatives. We’re confident that the restructuring will result in the reduction of approximately $80 million in annual operating costs with the positive impact on our financials becoming fully visible in the second half of this fiscal year. The vast majority of our restructuring actions are now behind us and we’re focused on improved performance. A critical element in our improvement efforts is the simplification of our organization and our product portfolio. There’s still much work to be done but let me update you on the progress. One example of our simplified organization involves marketing or our marketing function. We have completed the consolidation of our brand management and product portfolio management under the leadership of the business groups. This change provides us with clarified ownership and accountability and a greater consistency of brand and product marketing in each of our business groups. While the benefits of this change will become fully visible in next fiscal year, you can expect to start seeing the benefits as we roll out our new music products later this quarter. I’ve invested a significant portion of my time over the first 90 days here taking a deep dive into our product roadmap for the current year and beyond and I’m really encouraged and excited. We have many innovative products coming. It’s very clear to me how important it is to simplify our existing portfolio to ensure these products get a chance…

As you know we’ve asked our shareholders to approve a onetime dividend in an amount of roughly $126 million Swiss Francs. Historically we have awarded our shareholders with strong financial performance and growth in our share price. In fiscal 2012 we delivered poor financial performance and our share price declined significantly. In view of this we determined that we could best reward our shareholders by taking advantage of our strong cash position to offer a onetime distribution that is not subject to Swiss withholding tax for any of our shareholders. Assuming we receive shareholder approval for this proposal in September, by the end of Q2 between repurchases in Q1 and the proposed dividend we will have returned roughly $220 million to our shareholders during the first half of the fiscal year. We view share repurchases and the onetime dividend as being similar vehicles to return cash to our shareholders. Given the anticipated size of this distribution you should not expect to see a continuation of our aggressive share repurchase activities during the current quarter. There’s only been one other year in our history when we have exceeded the amount we expect to return to our shareholders in the first half of this year and that was over the course of a full fiscal year. We have $4 million remaining in our existing program and have no plan to request approval for a new program for the time being. Regarding our turnaround strategy I want to emphasize that nothing has materially changed from the plans we shared with you last quarter. Our execution is focused on great products in hot categories, reduction in our cost base, and the simplification of our product portfolio and of our company. We’re pleased with the initial results of the newest additions to our product portfolio in the audio [inaudible] and keyboard categories and we eagerly anticipate the launch of the majority of our new products later this quarter. We believe these products address strong consumer trends in music, tablets, touch driven navigation and the digital home and will significantly strengthen our offering across all categories. In addition to the stronger new products we expect to benefit from the simplification of our organization, processes, and product portfolio from cost savings from the restructuring. As planned, the modest initial savings we’ve already seen from the restructuring are expected to grow significantly as we move through the fiscal year. We remain on track with the plan we set a quarter ago to deliver improved performance starting in the second half of fiscal year 2013. Now Bracken, Erik and I are available to take your questions. Please follow the instructions of the operator.

(Operator Instructions) Your first question comes from John Bright – Avondale Partners. John Bright – Avondale Partners: Can you quantify what were the impacts on the gross margin in the particular quarter? And then looking forward, talk about what kind of impact we might expect from the streamlining of the product portfolio and how quickly the $80 million in cost reduction might materialize over the year?

Let me touch on both of your questions there. In terms of the gross margin in the quarter, what are the factors impacting it, there’s a couple of things and I think the theme I’d really emphasize here that there are multiple of things that we’ve chosen to do in the business given where we are in the turnaround and where we want to take the business that reflect themselves in the gross margin. A couple of those, we mentioned and Guerrino touched on it, made the decision to be opportunistic and accelerate some of the efforts to streamline our portfolio, reduce some of that clutter. That was about $4.5 million impacting gross profit in the quarter. There was also a piece of our restructuring so we had a total of $34 million of restructuring related costs in the quarter, $3 million of that was related to products and things we decided to exit related to the restructuring and that also had a negative impact on gross profit in the quarter. We also had a small element related to a likely patent settlement that we needed to accrue for in the quarter. Those were all things that you would see impacting our gross margin and then if you looked at it we had normal seasonality. If you looked at it on a sequential basis when you go from a Q4 quarter which is a much higher volume quarter than Q1 which as you know is our lowest volume quarter of the year, all those factors are impacting our gross margin as well as some product mix that we normally see in the quarter. But like I said, for us we took a couple deliberate steps that really impacted it but we think they all position us very well for what we’re doing in the turnaround and where we’re going. I think to your second question where you asked about how fast does the $80 million of annual savings materialize, the thing we feel good about and I think Bracken touched on it, is we feel very good about our execution. We’ve taken those initial steps in the turnaround in terms of the people costs reduction, the other things we needed to do to simplify the business. Now, it will take some time for those to start to materialize. You will really start to see them in the second half of the fiscal year and what I would say is our exit rate, when we exit FY 13 we will be on a full run rate to realize that $80 million and we fully expect to see that throughout FY 14.

You asked another sort of forward-looking question about what to expect with margin if I recall. We’re not providing any guidance of any elements of our P&L but from what Erik and Bracken said you should expect on one side through the elimination of certain one offs that will not be there and on the other side some elements of this simplification which will continue to manifest itself as Bracken said, as we take opportunistic actions. Now, the actions we’ve taken this quarter relate to products that we will sell. So there is a forward-looking component in the actions we have taken this quarter. We made price protection for example is related to products we will sell so you will not see that again in a way and it’s sort of in anticipation of something. Now, there may be more of that as we complete the transition. Bracken wanted and I fully support, to make sure we completed that transition by fiscal ’13 end and so some of that will occur in Q2, or maybe in Q3 so it’s very hard to anticipate. But let’s say there are several unique elements in this gross margin, we don’t expect them to repeat themselves, we expect our gross margin to improve. By how much and how fast is part of the fact that we’re not providing detailed guidance. John Bright – Avondale Partners: Three follow ups on that, how would you characterize gross margin normalized for the events in the quarter, one? Two, maybe characterize the LifeSize gross margin and whether competition played a factor in the gross margin for LifeSize, or the peripheral segment. Then three, you talked about the new products in your prepared text such as Harmony, several new pointing devices associated with Windows 8 with navigation capability and then other digital home type products. What do you think those gross margins look like relative to the corporate gross margin? So are we replacing new products with better gross margins? Those are the three follow ups.

Let me talk about LifeSize for a second quickly. There is nothing to report on LifeSize, very solid margin performance, we don’t see any particular impact of competitive or other positions in the gross margin of LifeSize so that is kind of a constant as far as we have seen. I will let Erik talk to you about a normalization of the gross margin of the one off events. When it comes to new products we’ve said we will announce products in music, in the digital home and pointing devices, they all are a very different blend of margins. This has been a portfolio company forever and will continue to be so we don’t expect structural change in the profile of the gross margin of the company as far as we can see today. I will leave it at that at this point.

I think to your other question, if you were going to normalize for all the onetime impacts on gross margin in the quarter, we don’t typically breakout individual components of that but what I would say is directionally if you remove the onetime items that we talked about, the price protection and the other things we’ve taken to move products through faster, the products that we will sell, the restructuring component, the likely patent settlement accrual that we needed to make, you’d be pretty close to normal seasonality of going from a Q4 to a Q1 and would put you more in a normal range of gross margin for us. When you look at it on a year-over-year basis the one thing you need to normalize for is last year we had the Logitech review charge. If you actually were to remove that our gross margin did decline a little bit year-over-year but all of that was driven by a significantly weaker Euro on a year-over-year basis.

So basically the net of this is if you take review out of last year and you take the impact of the Euro away, the gross margin was rather stable relative to last year. John Bright – Avondale Partners: Which on a long term basis, I think you mentioned, no major change in the portfolio? I know you’re not providing guidance, but when we think about the peripheral segment of your business should we still think about it as a 32% to 34% gross margin basis?

Well, the fact that you indicated this range it’s actually much lower than the range we had in our latest tabled business model which we said forget about it. So we haven’t gone back there. What can I say, I think it’s not far from a reasonable assumption but I won’t confirm or deny it.

Your next question comes from [Alex Faher – Xon]. [Alex Faher – Xon]: First one related to this patent dispute or patent settlement you’re trying to sort out in Q1, there’s been market chatter this morning on this side of the pond that it might be related to Apple and thereby somewhat questioning on your long term success with Apple’s peripherals. I don’t know if you could give us a little bit of color on that? Second one would be on sell in versus sell through in Europe, and Middle East, and Africa there seems to have been a little bit of channel inventory rebuilding here? If you could help us understand what’s going on that would be helpful.

On the first part on the patent settlement in preparation of this call we had discussed that we would not go into detail on the settlement. But based on that speculation that you mentioned I have to say that there is absolutely nothing true about the fact that this settlement might be with Apple Computer. I can’t deny it more firmly than that.

To your other question about the sell in versus sell through and the differences you’re seeing in EMEA in this quarter, it’s really driven by one primary thing is that when you compare year-over-year growth rates like that last year we have a very favorable comp when you look at this quarter versus last year for EMEA. Just to give you some perspective, first quarter of last year in EMEA was a very, very difficult quarter for the region. We had too high levels of channel inventory, we had a very high level of returns so when you compare the two it creates this big gap. I think the better way to give you a sense to your main question here is are we starting to build too much channel inventory in Europe the answer is absolutely no. When I look at my absolute levels of channel inventory in EMEA in the quarter it was down 2% year-over-year and it was down 2% sequentially. When you also look at my sell through trends for the last couple of quarters in EMEA, they’ve been relatively stable. So I think the short answer to your question is no, we’re very happy with the channel levels in EMEA and we think we’re well positioned given where we are in the year and how we go forward from here. [Alex Faher – Xon]: Maybe just a last one, regarding Windows 8 let’s say Touch Mouse or sort of new peripherals, do you think we’ll see any of that in the current quarter or is this too early considering that Windows 8 will launch at the very end of October?

By the way the fact that it’s going to be Touch Mouse is a speculation on your part, we have not discussed which products we’re introducing with Windows 8. But, it is too early to talk about Q2 because Windows 8 ships hopefully or maybe at the end of October and it will be a little bit kind of out of place for us to introduce products before the main platform ships.

Your next question comes from Simon Schafer – Goldman Sachs. Simon Schafer – Goldman Sachs: Actually I was interested in your description of new generation of products and obviously some bigger ramp to come towards the second half of the fiscal year. I mean, in your mind, what percentage of the business today is what you would consider legacy versus sort of new generation? And what might that mix look like towards the tail end of the year? That would be helpful.

Let me answer this and I hope I can catch the spirit of your question. We don’t consider anything legacy actually. There is a few categories of margin on an amount of our categories that are PC webcams for the consumers, that are kind of like [inaudible] properly speaking, we have to fight to maintain the decline or to manage the decline properly. We don’t expect those categories to grow. But, the majority of the categories have the potential one way or another and I wouldn’t consider legacy. If by legacy if you mean PC related, I would say there will be a decline on the mix of PC related and when I say PC I mean Windows platform related. On the other side, after a lull in sales of PCs which obviously have impacted everybody which has to do with waiting for Windows 8, who knows what’s going to happen when Windows 8 starts and whether the PC legacy will be revitalized. We certainly believe that something will happen on that and we want to take advantage of it. But structurally we are bringing the company beyond the traditional platform. The entire music launch is focused on that and it’s not insignificant, it’s actually centered around a model of Smartphone and tablets. We believe that people will increasingly carry their music or stream their music from their phone or tablet and as such it becomes the number one play around the fastest growing platform out there which is the Smartphone and if we are successful that will definitely change the mix. So directionally less of our business will be related to the Windows platform. But you know, I am one of those people that say I want to grow the Windows side of the business and grow the non…

Let me talk about the Euro for a second. Yes, not only the Euro has been deteriorating but it has been deteriorating fast and this has always been a yellow flag that we pointed to you all and to our shareholders saying if the Euro moves slowly you can go from $1.50 to $1 without any material impact on what we do because of the ongoing pricing actions that we take. When the Euro deteriorates very fast that is not possible to do. On the other hand, we are on the verge of introducing several new products and of course we have a one off opportunity to price them and of course those pricings will be made keeping in mind both the market conditions, the competitive dynamics, and the Euro. Now the good news is that most, if not all, of our competitors are dollar denominated and therefore the world will go that way no matter what. In terms of whether we expect the sequential improvement excluding the one offs or not, I would refrain from answering.

Your next question comes from Paul Coster – JP Morgan. Paul Coster – JP Morgan: You’re shifting your focus a little bit to the Apple platform it sounds like and of course you get less visibility into their product roadmap relative to the Windows world in aggregate anyway. Can you just talk a little bit about how you design in anticipation of what Apple is bringing out? For instance, if they bring out an iPad mini how would you respond to that? Does it matter to you what the format is and does this impede your ability to respond quickly?

In certain cases especially for existing products which is part of the way we address all platforms, obviously a change in the shape of the platform impacts our need to be fast, let’s put it this way. So there’s no other way than running very fast and making sure you’re close to it. We are in no way handicapped vis-à-vis anybody else. Now that the Apple platforms are squarely front and center in our priorities, believe me we can do wonders and the example of the ultra thin keyboard, there couldn’t be a better example. For a while we’ve been just dancing around with the iPad and with source product, etc. and finally we put the muscles in place and really [inaudible]. The good news on the Apple platform though and you hear the rumors and you can see what the market is doing, is that it’s increasingly a wireless platform and that is tremendously important for us. The connectivity will be increasingly wireless Bluetooth, and Wi-Fi, and airplane will significantly grow in importance for the platform. For example, the rumors and speculation and I have no idea if they’re true, that Apple will change their connectors, etc., etc. Now, if this world was a world of dockable products, and we have some, this would be a significant change but this world is increasingly a world of wireless products. You will see in our products in our music roadmap that wireless plays a major, major role and that should help sort of somewhat decouple those changes that Apple will bring to the market from a roadmap. So it’s kind of a mixed answer, for some products we just have to run fast and be opportunistic. For others, I think that the secular trends will help in a way all accessory makers and certainly us. Paul Coster – JP Morgan: Just going to guidance, I realize you’re not going to comment upon things but let’s just sort of go back to January 25th which is the last time you commented on what might happen this year. At that time you talked of the revenues not being down. Now, since then obviously the macro environment has deteriorated a bit, but I think internally you are now calling your product line which I think makes it a little bit tough to achieve that, can you just talk about puts and takes since you last commented on overall revenues? You’re welcome to state that revenues won’t be down this year but it sounds to me like that’s a bit of a stretch now.

Well I’m not making any statements of revenue. I don’t think I did make statements of revenue in that past but I might have I don’t have a perfect memory. First of all the simplification of the portfolio has nothing to do with revenue. Let’s face it, there may be some short term impact here and there but in the grand scheme of things for a company that generates more than $2 billion in revenue, those are [inaudible] are not a significant component. So take out of your mind that simplification of our product line equals less revenues. Simplification of our product line will equal long term more revenue because it will make it easier to launch powerful products and to select them on the side of the consumer. That’s a fact. It’s a long term statement and you might remind me in two or three calls that I said it. In terms of this year, there are headwinds that have to do with the Euro certainly, but we have dynamite in the portfolio and we are very hopeful that the consumers will respond well. As I said, I’m not going to say more about what we expect but we expect improved performance in the second half and I leave it up to you to figure out what that means.

Your next question comes from Andrew Gardiner – Barclays Capital. Andrew Gardiner – Barclays Capital: I had a question regarding the pricing action you said you’ve taken in the prior quarter and are likely to continue taking for certain parts of the portfolio, in the slides you presented the average selling price your quoting is down but not significantly. So I’m just wondering about sort of the size of the cuts you are making or perhaps the amount of the product portfolio it was affecting? And also I suppose, which segments it hit more than others? Just a bit more detail around that would be helpful from both the quarter as well as perhaps how you see it in the current quarter.

It’s a little hard to be really specific because it’s fairly broad based in terms of what products it affects. As Guerrino quoted in the beginning, this is really about reducing some retail pricing as we go forward, price protection to move some of the products out across the board that are frankly just weaker performers that need to be exited from the portfolio.

To add some additional color to that Andrew, it was in EMEA and AMR, we mentioned $4.5 million and as Bracken mentioned it’s for products – a little bit of products that we were selling in Q1 but they were mostly for products that we’re going to be selling in Q2, Q3, and Q4. It just accelerates creating that space and that visibility so there’s less clutter when the consumer gets there and our new products role out and better visibility.

Let me make sort of a forward-looking statement regarding ASPs in a second so that we break the rule of not talking. The small decline that you’ve seen is in part due to these actions and mix and everything, but moving forward you should expect our new portfolio to actually lift the average selling price up quite a bit to historical norm. Andrew Gardiner – Barclays Capital: Also, just on the Americas and I suppose sort of opposite to the question on EMEA earlier where in the Americas you have seen your channel inventory shrink again, is that broad based? Is it something you’re directing through some of these actions or is it more a reaction of your channel partners?

No, I think the answer to that one what we’re seeing in the Americas you’re right, our channel was down about 3% sequentially and about 12% year-over-year. I wouldn’t say there’s anything structurally different with our channel partners. We all read in the news what our channel partners are facing from an end consumer perspective, there’s no change there. We think we’ve got about the right level of channel in the Americas and as we talked about, we’re really focused on making sure that we’ve got the right positioning as we start to go through the season over the next call it two to three months where we’re going to be releasing a whole host of new products.

Your next question comes from Tavis McCourt – Raymond James. Tavis McCourt – Raymond James: We talked a bit about gross margins on the call, what I’m wondering is historically on your more PC centric peripherals it’s been a pretty good industry structure with you guys kind of the borderline dominate industry player. A lot of these Apple peripherals it’s a different market, right? You’ve got a lot of competition albeit a lot of smalls without a ton of brand recognition, but I’m wondering how do you view that in terms of the potential gross margin profile over time in these iPad and Smartphone peripherals versus what you’ve enjoyed in the PC space?

I was hoping to have answered this question before in the sense that it’s a mixed bag. In some cases the competitive dynamics of the new markets we are going to enter are different. You’re right, we’ve been borderline dominate and we are borderline dominate in a number of categories today around the PC. We’re becoming, and I hate to say that on a public call, but relatively dominate in the iPad sort of keyboard accessory market. We’ve seem to have been doing well. In some cases our new products will just bring us to lower margins, in other cases our new products will bring us higher margin and I would say it is too early to tell where structurally the gross margin will fit. That’s another reason why again our business model is tabled. We need more data and more actual results to figure out this matter. We conceptualize the same way you do but we also know what we can do with costs and what we can do with respect to business efficiency and what we can do with great products. I’m not in a position to answer firmly to this question. I think you should not expect a structural change in the way our model will look like but whether this is going to be 31% to 33%, 32% to 34%, 33% to 35%, way too early to tell. Tavis McCourt – Raymond James: Then a follow up, you had mentioned earlier in the call that the restructuring activities are largely over so I’m trying to harmonize that with the commentary that we won’t really be seeing the full impact in the P&L until we exit the year. Is it that you’re using some of these statements near term to reinvest in other areas or kind of help me harmonize those two facts.

To give you a sense of it, it really comes down to tactically the bulk of what we did. So of the $34 million of restructuring related cost that we recognized in the quarter, $31 million of that is primarily related to personnel, reduction in personnel. Just to give you a very tactical example, here in the US we made that decision, we made that announcement I think it was in the first or second week of June, it’s about 60 to 70 days in many cases before those impacted employees would leave the payroll. So it’s actually in Q2 when you’d actually start to see some of those costs come down. So it’s really that and then when you look at other places in the world where we’ve unfortunately had an impact on employees in Europe it takes even a little bit longer for that to actually play out so that’s probably the single biggest factor why you will see the savings start to show up. It’s certainly not that we’re taking some really near term savings and investing them in a different way.

Just to complete Erik’s answer the restructuring is not exclusively personnel related. We are saving and changing things in a number of other parts of the company and we talked about an $80 million of net savings which means that some of the savings will be bigger than $80 million on an annual basis and some of that will go back into initiatives to strengthen the growth in the categories that we see have potential to grow. The timing of all these things may confuse the quarter-by-quarter result. In that sense you’re suggesting that some of that money may be invested? Yes, some of that money may be invested in the short term. We remain on track to save a net $80 million on an annual basis and that’s all there is. It’s personnel, it’s other things, and its investments. Tavis McCourt – Raymond James: Finally, Bracken you mentioned one of the things you wanted to do is decrease the SKU count and complexity. I was wondering to you plan any big changes on the supply chain strategy as you go through this restructuring?

No, we don’t have any major plans on the supply chain strategy. No major plans to change the supply chain. What we are doing and we have done over the last 18 months is continue to improve the efficiency of our supply chain and actually lower our cost there and I would expect that we’d be able to systematically lower our inventories over time as we get a tighter and tighter portfolio the next couple of years.

Your next question comes from Michael Foeth – Vontobel. Michael Foeth – Vontobel: Three questions, the first one relating to cap ex, you had I think, a bit above usual cap ex spending in the quarter and I was wondering what it’s for and what we should expect going forward? Then, if you could maybe address how you will deal with the decline in your OEM business and how we should look at that business going forward? Then, eventually if you could give us an update on how your enterprise business or B-to-B activity of retail products is doing and progressing?

To your first question about cap ex, there wasn’t anything structurally different that we did in the quarter. I guess the best way to look at it is we don’t anticipate that our full year cap ex spending would be anything else outside our normal historical ranges so that would continue to be consistent. Sometimes we get things where something happens very late in one quarter or early in a following quarter. So no change and we’d expect it to still be consistent with historical averages.

On the OEM let me take that one. First, there’s a lot to like about the OEM business actually because it’s sort of the birthright of the company and what I’ve been able to see very clearly is it’s driving a cost conscious frugality mentality that pervades everything. So it’s a really nice component of this business and I’m not particularly worried about the OEM business over the near or medium term. I think we’ve got things going that will make it so the OEM business will be just fine. On the B-to-B side, we’re not disclosing yet exactly what performance we’re showing on the B-to-B business but we feel very good about what’s happening there. We’ve got a nice array of products out and coming and we expect to continue to see good strong growth there.

(Operator Instructions) Your next question comes from Andrew Humphrey – Morgan Stanley. Andrew Humphrey – Morgan Stanley: Firstly, on the cost saving program you’re speaking very confidently about achieving the $80 million run rate by the end of this financial year. I think your last update when you also gave guidance on the one offs you indicated you’d identified 60% of those savings from personnel reductions. Can you give us an indication of what’s giving you confidence on the remaining 40% and the sort of one offs associated with that? Secondly, on the patents, I can understand that you wouldn’t want to try and prejudge any settlement on that but can you give us an indication of what area that’s in, in terms of which product area? Finally, on LifeSize we saw a bit of an improvement compared to the previous quarters year-on-year growth rate, can you give an indication of whether you’re viewing that as an inflection point or whether conditions are still pretty tough as far as corporate investment cycles in that area are concerned?

Let me take the patent question. I answered very clearly about this not being with Apple, we have no pending litigation with Apple that I know of. This has to do with remotes and I will not go further than that. Regarding LifeSize, that part of the question, it’s too early to tell. I think that the company is in the middle of a refocusing on what the competitor differentiation is and where it applies and how it is sold to our small to medium sized enterprise customers. They’ve made some progress, I’m definitely not yet happy but they are on the right track. They are directionally doing fine but there’s nothing more substantial to report.

Then to your first question about what gives us confidence about the cost reductions, you’re right, the first step that you can visibly see is the reduction in personnel and that’s taken place. But simultaneous to that, this is not just an effort as obviously you’ve hear us talk about, of just changing our costs for a quarter or two or just personnel reductions. This is a comprehensive effort across the company led by Bracken, to really look at how are we going to position the company and how are we going to change the cost structure to where it needs to be not just now but cost structure a year, year and a half from now. So when we did that and we came up with detailed operating plans, personnel reduction as a piece of it but at the same time we were looking at how do we simplify things within the company, how do we streamline, how do we go after operational savings. So those plans were done at the same time. You will see the benefits of those over time and we said primarily in the second half of the year and for sure in the exit rate, but we have confidence because it is a comprehensive plan don’t together, executed at the same time and you’ll continue to see us update you on how we are doing.

I’m not sure if I heard you ask a question, and maybe I heard something wrong, but let me answer the question that you did not ask. You were sorting alluding to one offs, the one offs that you’ve seen in restructuring in mostly personnel but not only personnel related. We don’t expect these one offs to be repeated for the rest of the savings if that’s what the question is. Some of those do not require write offs or anything.

Maybe to add to that, if what you’re also trying to understand is how much more restructuring do we anticipate it was a total of $34 million that was related to restructuring this quarter and I would say somewhere between $2 to $4 million spread out over the next three fiscal quarters would be my current estimate just to give you a sense. And like I said, it could be slightly higher, slightly lower than that, but that is the totality of what we anticipate would be restructuring related this fiscal year.

Your next question comes from Corey Barrett – Pacific Crest. Corey Barrett – Pacific Crest: First, can you just quantify how much revenue in the quarter came from products that are being discontinued and how much came from or as a result of the aggressive pricing actions?

First of all I don’t think – in fact, the aggressive pricing actions reduced the revenues rather than increase it. The point that Erik was making about $4.5 million impact on the gross profit of the company due to this price action is also reflected in that top line. It’s strictly a top line change. But in terms of the impact, first of all the vast majority of the products that we plan to discontinue contributed marginally to our revenue. They contributed to our confusion, they contributed to our supply chain, they contributed to the pain on the shelf, that they did, and they contributed to our need to move them aggressively because they’re slow movers. Yes, they did. They did not contribute – in fact, they ended up not contributing in any significant way to the top line. Corey Barrett – Pacific Crest: Then back on OEM sales, should we expect a rebound there relative to the sequential decline we saw there this quarter?

For the time being the OEM sales follow strictly the pattern of sales of PCs. They are as you know, very related to desktops certainly not the most favored PC format these days. So a rebound in desktops would definitely improve the performance of OEM currently. Will there be a rebound in desktops? We don’t anticipate that. What Bracken was referring to was there’s more that we can do in OEM with these customers or some of them but it’s too early to tell when and how much this will improve our performance in that area. I am a strong supporter of the business. As Bracken said, it’s not only the roots of the company but it’s the source of an enormous visibility on the PC market and an enormous discipline in cost and that is an intangible that is very hard to report in a segmented view in what the OEM sales are for the market. That said, we are working on those too. Corey Barrett – Pacific Crest: Then lastly, can you provide detail on the puts and takes of the impacts on gross margins from product mix in the quarter?

Let me touch on that a little bit, we don’t break out the individual impacts but what I would say is it was not the largest impact by far in terms of impacting the gross margin. And just to spend a second on it, when we talk product mix what you’re going to see is that’s changed within a product category so we might have an individual SKU that has a higher gross margin than another one and so that changes from time-to-time. And then also between categories, we have some structurally lower gross margin categories in our portfolio and some that are very, very high and when the sales mix between those as well as within, that’s what we mean when we talk about product mix. We do see it every quarter. Sometimes we benefit from it, sometimes it works against us a little bit and that was actually the case this quarter. But it certainly wasn’t one of the one or two biggest variables this quarter.

(Operator Instructions) Your next question comes from Joern Iffert – UBS. Joern Iffert – UBS: It’s a question for the other peripherals, may I ask if you are aware that Apple has patents surrounding any iPod keyboard covers? This would be my first question. The second question, are you even aware that Apple is potentially launching an own branded iPad keyboard cover?

If we knew what Apple plans to do we would be richer people. No, we’re not aware of either of those.

Ladies and gentlemen that concludes our conference call for today. You may all now disconnect. Thank you.