Greetings, and welcome to the Pro-Dex Update Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Michael Berthelot, Chief Executive Officer of Pro-Dex. Thank you, you may begin.

Thank you, Manny, and thank you all for joining us to review the results for the second quarter and first 6 months of fiscal year 2013. On today's call, Hal Hurwitz, our CFO, will provide us with a synopsis of our operating results, after which, I will share my comments. Then, as Manny mentioned, we will open up the call to your questions. Hal?

Thank you, Mike. Before beginning my comments, I ask our participants and listeners to note that the comments made on this call may include statements that are forward-looking within the meaning of securities law. 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 a future event. For more information, please refer to the risk factors discussed in the company's Form 10-K for the year ended June 30, 2012, our Form 10-Q that we expect to file within the next few 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. My discussion of our results for the fiscal year 2013 second quarter and the first 6 months 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. First of all, we'll talk about the second quarter. Sales for the quarter ended December 31, 2012, decreased 25% to $3 million from $4 million for the corresponding quarter in 2011. As the company has previously discussed, this decrease was primarily the result of reductions in purchases of the companies powered surgical instrument products by its former largest customer, partially offset by increases in such surgical instrument sales to other customers. Excluding sales to the company's former largest customer, which represented the reduction of $1.5 million in last year's second quarter, sales increased $524,000,…

Thank you, Hal. As we noted in today's release, we believe that the second fiscal quarter shows continuing progress in our effort to move Pro-Dex forward. Although sales for the quarter were down $1 million from last year's second quarter, our operating loss was only $35,000 more than last year. Our gross margin was stronger, our operating expenses were lower, our quoting activity was up, our bookings were strong and our backlog continues to grow. We believe that based on our backlog and shipping schedule for the third and fourth fiscal quarters, and the fact that during the second quarter, both of our facilities were closed for 2 full weeks, during the Thanksgiving, Christmas and New Year holidays, the second quarter should be our weakest in fiscal 2013. Hal has already given you the financial details for the quarter and 6 months, but I will spend a little time adding some color to what is going on in our business and talking about the activities we are undertaking with regards to our four-pillared strategy. Our focus on 2 pillars: increasing sales and innovating our products and quality, continues to gain traction. Our VP of sales and director of marketing, along with our R&D and quality team, have spent considerable time pursuing opportunities for powered surgical instrument sales. We actively participate in industry trade shows and it is through conversations at these shows that the majority of our new business contacts begin. Although, we do occasionally receive leads generated through our website and various industry publications in which we advertise. During the first half of fiscal 2013, we made significant quotes or proposals for new business to 8 potentially new customers. So far, we have won one of those proposals, lost 2 and 5 remain under consideration or are in negotiation…

[Operator Instructions] Our first question is from Mark Murphy [ph] a private investor.

I'm wondering if the non-large customer revenues were scheduled to be, I think you guys said, $12 million to $14 million this year, and you had a booking half of $9 million, run rate of $18 million, do you see that -- can you add any color to that $9 million of bookings in terms of whether it came from long lead orders of existing customers, let's say somebody ordering something out 2 or 3 years versus how much, if any, of it came from the traction you're getting under sales color?

Okay. Well, to -- a multipart question, and I'll answer each part of it. First, the operating target that we shared with everyone back in May was, I believe, revenues of $11 million for fiscal 2013. Our breakeven point is approximately $13 million to $14 million depending on margin. So that's where those 2 numbers come from. The bookings and the backlog and frame contracts -- the longest frame contract we have entered into was for 18 months, and that covered the lead time to get the components in to begin manufacturing. So we gave ourselves 6 months to get all the components and then we will start shipping out over the next 12 months. So none of the frame contracts sell out to 3 years, they are generally for a 12-year -- 12 months of manufacturing.

So, in the -- in an $11 million non-revenue -- non-large customer revenue, with $9 million of bookings in 6 months, is any of that related to traction of new customers or new products?

It's related to both. And we'll -- if we use the word, new products, let's say it's derivations of old products, but products that have new numbers on them, shall we say. So if we treat it as a newly developed product, so that's just part of it.

That makes sense. That $9 million, so staggering, so incredible, which is great, and yet the sharing of [indiscernible] sales puller was -- we've landed one account, that's 2 years away from generating revenue and yet, in the last 6 months, you've booked $9 million of new revenue, hard-core, so I'm just trying to somehow have those dots connect. You're obviously doing something right, but that $9 million booking number is incredible.

Well, yes. The group is here, Mark, as you know well, it's a really good group of people. And they have done an incredible job of identifying opportunities and going after them. That backlog does not include, I don't believe, any revenue from that one product that we won.

Okay.

So these are all hard-core. We are manufacturing these products. We have definite shipping dates and it just makes throughput much, much easier. I would caution anyone, in fact, I would say just, flat don't do it, don't multiply that $9 million times 2.

Okay.

Okay, that is not sustainable based on where we are in this program. We're going to win some more projects and we'll have some more things but I wouldn't multiply at this stage.

We have no further questions in the queue at this time. And now, would you like to make any additional or closing remarks?

Yes, thank you, Manny. I would like to thank everybody for joining us today. We appreciate your interest, your time and your support for the company and we look forward to speaking with you in April when we report our third quarter fiscal financial results. Thank you.

Thank you. Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.