Greetings, and welcome to the Pro-Dex Fiscal 2013 First Quarter Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. Please note that the comments made on this call may include statements that are forward looking within the meaning of securities laws. These forward-looking statements may include, without limitation, statements related to anticipated industry trends and the company's plans, products, perspectives and strategies, both preliminary and projected. Actual results or trends could differ materially. We undertake no obligation to revise or publicly revise the results of any revision to the forward-looking statements in light of new information or further events. For more information, please refer to the risk factors discussed in our company's Form 10-K for the year ended June 30, 2012, our Form 10-Q that we expect to file within the next 2 weeks, and the Form 8-K we are filing with the SEC today along with the attached press release issued today, all of which can be obtained from the SEC or by visiting our website at www.pro-dex.com. I would now like to turn the conference over to Michael Berthelot. Please go ahead, sir.

Thank you, Stacy, and thank you all for joining us to review the results for the first quarter of fiscal year 2013. On today's call, Hal Hurwitz, our CFO, will provide us with the synopsis of our operating results, after which I will share my comments. Then, as Stacy mentioned, we will open up the call to your questions.

Thank you, Mike. My discussion of our results for the fiscal 2013 first quarter will relate to our continuing operations, meaning that the results of our former Astromec motor product line, which was sold in February 2012, will be excluded. Sales for the quarter ended September 30, 2012, decreased 31% to $3.5 million, from $5 million for the corresponding quarter in 2011. As we have disclosed previously, the decreases in sales were primarily the result of the continuation of a reduction in purchases of our medical device products by our former largest customer. Excluding sales to the former customer from the comparison of 2012 to 2011, the company's surgical product sales increased $548,000 in 2012. In addition, motion control system sales increased $138,000 in the 2012 quarter when compared to the corresponding period in 2011. Gross profit for the quarter ended September 30, 2012, was $1.2 million or 36% of sales compared to gross profit of $2.1 million or 42% of sales for the year ago period. This decrease resulted primarily from the year-over-year decrease in sales and the related effects on manufacturing at lower sales volumes. Operating expenses, which includes selling, general and administrative, and research and development expenses for the quarter ended September 30, 2012, decreased 26% to $1.3 million from $1.8 million in the prior year's corresponding quarter. The decrease reflects the broad-based effect of the company's cost-reduction efforts, evidenced by reductions of $100,000 or 27% in selling expenses; $208,000 or 25% in general and administrative expenses; and $155,000 or 28% in research and development expenses. All of these departmental reductions reflected, among other items, a focus on the elimination of noncritical activities and the previously announced reductions in force and company-wide 5% decrease in base compensation. Pre-tax loss from continuing operations was $58,000 for the quarter compared to pre-tax income from continuing operations of $347,000 in the corresponding 2011 period. Net loss for the quarter ended June -- September 30, 2012, was $17,000 or $0.01 per diluted share compared to net income of $446,000 or $0.14 per diluted share in the corresponding 2011 quarter. During the quarter ended September 30, 2012, we used $172,000 of cash in operating activities and repaid the entire outstanding balance on the term loan from Union Bank, amounting to $685,000. Cash on hand at September 30, 2012, was $3.1 million compared to $4.1 million at June 30, 2011. With that, I will turn the call back over to Mike for his review and outlook comments.

Thank you, Hal. As we said in this afternoon's release, we believe that the first quarter of fiscal 2013 marks the beginning of the beginning of Pro-Dex's resurgence as a focused developer and manufacturer of powered surgical instruments. We had a strong quarter reporting, as Hal mentioned moments ago, a very small net loss, a smaller than anticipated loss from continuing operations and EBITDA of $141,000, of which $100,000 was from continuing operations. We were able to achieve these results not only as a result of our attention reducing costs, especially SG&A cost, which we cut by 26% from last year's first quarter and 17% from the preceding quarter, but also by improving the efficiency of our manufacturing operations as evidenced by the increase in our gross margin to 36%, the highest in 4 consecutive quarters even while quarterly sales were the lowest over the same period. We will continue our efforts to exert discipline in our cost structure, and we'll limit our SG&A investments to those areas where we believe the value added of such expenditures will be realized quickly and directly. Our increased sales efforts have shown immediate positive results in the 25% increase in powered surgical instrument sales, excluding the sales last year to our former largest customer, and a 32% increase in motion control product sales, which blend together to yield 26% aggregate sales growth when compared to last year's first quarter without the sales to our former largest customer. Our focused efforts to establish ourselves as the go-to company for powered surgical instruments is showing benefit in both the long and near term. While our book-to-bill ratio for the first quarter was 1.14, our bookings for the first 3 weeks of October amounted to over $3.5 million, for total bookings for the first 4 months…

[Operator Instructions] Our first question comes from Mark Murphy, Private Investor.

Two quick questions. One is the press release refers to 3 new customer product development projects that have begun. Can you put any color without names or anything or products on size or length of time, or when those might start seeing the revenue line?

Yes, I -- as you know, I can't put names on them...

Yes, I know that.

Certainly, Mark. But...

Any color that you can put on those 3 new projects just in terms of size or timing.

Though -- if I try to put it in terms of size, it's going to get a little too into forward-looking estimates of revenue. But let me say this, what those projects are, is they are derivations of our basic driver. And so what we're doing is we're looking at expanding it into multiple applications. Let's say, maxi-cranial facial [ph] , spinal, general orthopedics. And so we have actual projects in place that are doing defined modifications for each of those procedures for specific customers.

Our next question comes from Christian Liang [ph] with Red Oak Partners.

I was just curious what the backlog was at the end of the quarter?

Let's see. The backlog at the end of the quarter, well, it's up 1.14.

Was it 5.3 at the end of the year?

Okay, you've got me flat-footed here.

Yes, me as well. I can get that for you.

We'll have to get that for you. It would have been up a bit from the end of the year.

Okay. Was there any revenue contribution in the current quarter from the previous large customer or was that a 0?

There were no new product sales to the new customer. However, repairs continue to be a revenue source.

So -- and I think it was about $0.5 million in the last quarter, and that maybe continue ongoing or a slow decline?

Well, it wasn't $0.5 million in the last quarter.

No?

I think it was in excess of $300,000 for the year, if I recall.

Oh, okay. So a relatively a small number?

A relatively small number is a fair description.

And then last question. Just was there any update on the return of capital? Is that still part of the plan between now and the end of the year to come to a decision?

Well, we are looking at that, and we are eagerly anticipating what happens 12 days from today because that will seriously impact the timing of anything we might do. If we're going to make any kind of application of shareholder cash to shareholders, we want to make sure shareholders get to keep the better part of that cash.

[Operator Instructions] Gentlemen, there are no further questions at this time.

Okay, great, thank you. Thank you, Stacy. So with that, I'd like to thank everybody for joining us today. Stacy, thank you for moderating. We appreciate everyone's interest and your time and support of the company and look forward to speaking with you in January when we report our final -- or our second quarter financial results. Thank you.

This conclude today's teleconference. You may now disconnect your lines at this time. Thank you for your participation.