Hello and welcome to the Lantronix Inc. Third Quarter Fiscal Year 2015 Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there’ll be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to E.E. Wang. Please go ahead.

Thank you, Amy. Good afternoon everyone and thank you for joining the Lantronix Fiscal 2015 Third Quarter Conference Call. Joining us on the call today are Kurt Busch, Lantronix’s Chief Executive Officer; and Jeremy Whitaker, Lantronix’s Chief Financial Officer. A live and archived webcast of today’s call will be available on the Company’s Web site at www.lantronix.com. In addition, a phone replay will be available starting at 08:00 PM Eastern, 05:00 PM Pacific today through May 5th, by dialing 877-344-7529 in the U.S. or for international callers, 412-317-0888 and entering pass code 10064423. During this call, management may make forward-looking statements, which involve risks and uncertainties that could cause Lantronix’s results to differ materially from management’s current expectations. We encourage you to review the cautionary statements and risk factors contained in the earnings release, which was furnished to the SEC today and is available on our Web site, and in the Company’s SEC filings such as its 10-K and 10-Qs. Lantronix undertakes no obligation to revise or update publicly any forward-looking statements to reflect future events or circumstances. Also please note that during this call, the Company will discuss some non-GAAP financial measures. Today’s earnings release, which is posted in the Investor Relations section of our Web site, describes the differences between our non-GAAP and GAAP reporting and presents reconciliations for the non-GAAP financial measures that we use. I’ll now turn the call over to Kurt Busch, President and CEO of Lantronix.

Thank you E.E., and thank you to everyone joining us this afternoon. Starting this quarter, we will be providing financial details regarding our new products which as we’ve stated in the past are a key element of our growth strategy. We achieved 33% year-over-year increase in new product revenues during the third quarter of FY ’15 compared with the same period last year. For the fiscal year-to-date, new product revenues were up 59% for the nine months ended March 31, 2015 compared with the same period last year. We’re pleased that the year-to-date new product revenues have already exceeded full FY ’14 new product revenues. Total revenues continued to be affected by decline in legacy products and weakness in customer capital spending that impacted the timing of projects. These resulted in total revenues being down year-over-year and sequentially. Despite challenging near-term conditions we are focused on executing to our growth strategy of delivering disciplined and innovative product development; engaging with tier I accounts and expanding our sales and marketing efforts worldwide. As new products become a larger percentage of our revenues, we believe that these actions will ultimately create long-term profitable growth. Before I go into more detail on our progress and expectation, I'd like to turn the call to Jeremy to go over our financial highlights.

Thank you, Kurt. Please refer to today's news release and the financial information in the Investor Relations section of our Web site for additional details that will supplement my financial commentary. Now, I'd like to take a few minutes to go over the highlights of our results for the third quarter of fiscal 2015. As discussed on previous calls our revenue has a history of fluctuating from quarter-to-quarter due to the nature of our project based sales cycles. As Kurt mentioned earlier, starting this quarter we will be providing more detail regarding our new product revenue. We define new products as products that have been released since the start of the second quarter of fiscal 2012. Net revenue for the third quarter of fiscal 2015 was 10.4 million compared with 11.6 million for the third quarter of fiscal 2014, and 10.7 million for the second quarter of fiscal 2015. The year-over-year and sequential decreases in net revenue were primarily due to decline in legacy product sales and weakness in capital spending that impact the timing of customer projects. The year-over-year decline in legacy products was partially offset by 33% growth in new product revenue. During the third quarter of fiscal 2015, new product revenue was 1.7 million compared with 1.2 million for the third quarter of fiscal 2014, and flat with the second quarter of fiscal 2015. Fiscal year-to-date net revenue was 32.7 million compared with 33.4 million for the same period last year. Fiscal year-to-date new product sales were 5 million, up 59% compared with 3.2 million for the same period last fiscal year. Since this is the first time that we are disclosing revenue from new products we will provide data for the last three fiscal years. New product revenue was 4.6 million in fiscal 2014, 3.0 million…

Thank you, Jeremy. Today Lantronix is enabling the Internet of Things by solving key issues relating to mobility, management and security that are applicable to a wide range of industries from healthcare, energy, retail, security and other verticals. In fact, it is likely that the Lantronix’s product has touched some part of your world. Just a few examples of this are: In hospitals, Lantronix’s products have been deployed to securely connect medical devices to the network and proving the safety and effectiveness of treatment by providing medical professionals with the real time access to accurate patient data. Lantronix’s solutions enable organizations to securely connect to industrial machines providing access to real time data and allowing end users to manage and conserve energy and other valuable resources. Our management solutions allow companies from retail shops to hotels and data center to reduce cost and downtime associated with managing resources in remote and branch locations. As I stated on previous calls, our growth strategy is focused on disciplined and innovative product development engagement with tier I accounts and expansion of sales channels worldwide. I’d like to take a few minutes to update you on this specific progress Lantronix has made in these areas and the results we’ve delivered in our OEM module and enterprise solutions product line during the third quarter of FY15. Over the last 3 years we’ve introduced significant new product families in both our product lines. Our plan was to release the production on average 1 new product per quarter. During the third quarter of FY15, we continued to meet this goals, when we released to production and began volume shipment of the xPico Wi-Fi SMT, the newest addition of our xPico Wi-Fi embedded device of our product family. Despite the long time from design win to production ramp,…

Thank you. [Operator Instructions] Our first question comes from Jaeson Schmidt at Lake Street Capital Markets.

[Operator Instructions] Our next question is from Mark Spiegel with Stanphyl Capital

Hey guys. I see two good things in this report. And unfortunately it looks almost like only two good things, but they might be meaningful. Sequential revenue overall was down 2.7% with last quarter was down 7% versus the quarter before that. Has the business stabilized in terms of revenue?

As a reminder, I’m sorry, you have another question. Go ahead sir.

Okay. I don’t know what have the operator kind of came in and cut me off there. The new products are sequentially flat from last quarter. So why is that?

So we’re now, I don’t know five years into this alleged economic recovery, which if you saw the GDP report this morning is really not much of recovery at all. What makes you think that enterprise capital spending is going to comeback if that hasn’t comeback by now?

Last one, as I said one of the good things is that you’ve appeared to have generated around $200,000 in cash this quarter. Now you mentioned a letter of credit, I don’t know how that works into that, and can you talk a little bit about cash consumption going forward?

So you really consumed around $400,000 in cash, is what you’re saying?

And do you have any color on what that’s going to look like going forward, the cash consumption?

So in another quarter you’re just reporting what is I mean, all those to be equal, essentially $400,000 of consumption you’re saying. When you say right now you’re within 200,000 [indiscernible] like, the quarter we’re in right now -- I mean that you’ve cut it by another 200,000?

So any color on your cutting expense I mean at this level of revenue, is that where that’s going to stay?

All right, I have no more questions.

At this time I show no other questions. Would you like to make any closing remarks Mr. Busch?

Thank you operator. I’d actually like to thank everyone for your participation on our call today. We look forward to updating you on our progress, achievement and actions when we report on our fiscal 2015 results in late August.

The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.