Good afternoon, and welcome to the Flextronics International First Quarter Fiscal Year 2012 Earnings Conference Call. Today’s call is being recorded, and all lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. At this time, for opening remarks and introductions, I would like to turn the call over to Mr. Kevin Kessel, Flextronics’ Vice President Investor Relations. Sir, you may begin.

Thank you, Tamara. And welcome to Flextronics’ conference call to discuss the results of our fiscal 2012 first quarter ended July 1, 2011. Joining me on the call today is our Chief Executive Officer, Mike McNamara, and our Chief Financial Officer, Paul Read. The presentation that corresponds to our comments today is posted on the Investors section of our website under Conference Calls and Presentations and it can also be accessed directly from our investor relations home page. Our agenda for today’s call will begin with Paul Read reviewing the financial results of our first quarter of fiscal 2012 and Mike McNamara will follow-up with the discussion of our current business trends, and he will also conclude with our guidance for the second quarter of fiscal 2012 ending in September. Following that, we will take your questions. Please turn to slide two, for a review of the risks and non-GAAP disclosures. This presentation contains statements that are forward-looking. These statements are based on current expectations and assumptions that are subject to risks and uncertainties, which may cause actual results to differ materially from those set forth in this presentation. Such information is subject to change, and we undertake no duty or obligation to revise, update, or inform you of any changes to forward-looking statements. For a discussion of the risks and uncertainties, you should review our filings with the Securities and Exchange Commission, specifically our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and any amendments thereto. This presentation references both GAAP and non-GAAP financial measures. Please refer to the schedules to our earnings press release and the GAAP versus non-GAAP reconciliation in the Investors section of our website, which contain the reconciliation of the adjusted financial measures to the most directly comparable GAAP measures. I will now turn the call over to our Chief Financial Officer, Paul Read. Paul?

Thank you, Kevin. And welcome, everyone to our call. Please turn to slide three. We generated $7.55 billion in revenue for our fiscal 2012 first quarter, which is at the high-end of our guidance range of $7.1 billion to $7.6 billion. Revenue rose $982 million or 15% from the $6.57 billion we reported last year, and 10% sequentially. Our first quarter adjusted operating income was $197 million, up 4% year-over-year. And GAAP operating income was $184 million for the first quarter, up 5% versus our prior year. Adjusted net income for the first quarter was $157 million, up 2% from the year ago levels. And our GAAP net income for the first quarter was $132 million, up 12% year-over-year. Reported adjusted earnings per diluted share for the June quarter $0.21, which was within our EPS guidance range of $0.20 to $0.23 and up 11% from the $0.19 we had last year. Our GAAP EPS for the first quarter was $0.17, 21% above the year ago GAAP EPS of $0.14. Our diluted weighted average shares outstanding or WASO for the quarter was 760 million, this was a reduction of 8% or 64 million shares in flow compared with $824 million shares reported year ago. This reduction was driven by our share buyback program. During the quarter we completed our third $200 million share buyback program as we repurchased approximately 29 million shares $200 million. Overall since our recent buybacks began in June of last year, we repurchased $600 million within our stocks totalling 94 million shares or 11% of our diluted weighted average outstanding shares. The average cost of our recent buybacks today the rate has been at $6.36. In today’s press release, we announced that our Board of Directors have given authorization for a new $200 million share purchase. In…

Thank you, Paul and welcome to everyone on the call today. Taking a high level deal of our recent quarter reveals that every one of our four business groups grew double-digits year-over-year. In addition, three of them also grew double-digit sequentially. We continue to actively manage our portfolio and accelerate our leadership in our non High Velocity businesses. This performance illustrates the diversification of our business model and our broad based success across all the markets we participated in. In terms of the overall business environment, it is stable and we remained confident that our growth across all the business groups displays were continuing good growth going forward. The one exception to this is our planned exit from the ODM PC business. This exit is progressing as we planned, while it will create a temporary revenue headwind for our High Velocity Solutions business group, but benefits to our profitability are significant. In addition, our business will benefit from reduced risk profiles and the ability to reemploy the associated assets into other profitable parts of our business. A quarter ago the big topic at the macro level was the crisis in Japan and what’s the impact on Flextronics and the supply chain might ultimately be. We guided to a wider range for our June quarter as a result of the uncertainties at the time. However, we were able to mitigate any material impacts on the Japan earthquake and avoid disruptions to our customer programs. Please turn to slide 10. In our recent Investor and Analyst Day, we reclassified our five market segments into four business groups that better approximate the way we go to market. This slide represents our recent results in this new way along with history for fiscal 2011. We have also published additional historical breakdowns for our four…

Our first question comes from Amitabh Passi with UBS. Your line is open. Amitabh Passi – UBS: Hi, thank you. Paul, perhaps the first one for you, I thought I heard you say there was a 50 basis point drag in the June quarter. Just wondering was all of that just related to computing ODM business? It seems like some of your components business is still a drag. And I was wondering that the services business would drag and exiting that, so that has a negative drag? So maybe just some understanding of how we think about the 50 basis point impact broken down across computing, components and then maybe services, if and that had an impact?

Yeah, thanks, Amit. So the 50 basis point I referred to was two of these ODM PC business exiting. So in that slide that you see in the deck, when you take out the revenue $663 million, you strip out the losses, the $19 million, you get a 50 basis point swing up to 3.1%. That’s inline with what we were saying at the Analyst Day, there was a 50 basis points seen there as well. So nothing has changed there. Components, we said that we have some improvement there for the back end of the year, focus that improvement. And so our components in the quarter, not Multek, Multek is profitable, but camera modules and power. Power is particular because we were doing some restructuring there, with a couple facilities to accelerate the improvement, performance, which you will see now at the back end of the year. But components lost about $0.01 a share for us this quarter. And so if you take the swing from a $0.01 a share to making 4% profit, which back into the year here on about roughly quarterly revenues about $600 million. You get about another 40 basis points swing in margin there as well. So you put those two together and we’re at 3.5% profit levels. So that’s as simple as that and that’s how we plan and that’s what we targeted. Amitabh Passi – UBS: Great and then just a follow-up for Mike. Mike any comments on just sort of the big macro sort of demand environment, I mean one of your smaller competitors reported this morning and kind of like just about order volatility, economic malaise, I mean lot of just said down beaten comments, yet your guidance seemed relatively robust. So just maybe if you can comment by end market what you’re seeing maybe just what the sentiment and the physiologies out there with respect to your customer base?

Yeah, I think the macro-environment is a little soft, we find it a little challenging from that standpoint so we’re seeing some reduction in some of our orders. The best that we have is, we just have a really, really strong book of business once you get outside of the ODM PC business and get way from the high velocity or the mobile com, the big mobile com customers that we have. Once you get outside of that, we have a very, very strong book of business a lot of this, which was booked last year. So a lot of what we’re seeing it is we’re seeing an offset of that softness with additional bookings that we’ve been able to bring on over the last couple of quarter. So I would agree there is a little bit of softness in the marketplace, so I think we are going to see that for the next couple of quarters, but fortunately we have quite a bit of top side adjustment and as a result of these bookings. Amitabh Passi – UBS: Okay. Thanks. I’ll jump back in queue.

Next question comes from Shawn Harrison with Longbow Research. Your line is open. Shawn Harrison – Longbow Research: Hi, good evening, just wanted to I guess get on that and look to that book of business maybe outside of high reliability in industrial and emerging. Are you still seeing kind of a good traction in the integrated network and high velocity that similar to last year is kind of that bookings slow down too?

The integrated networking solution just saw that, we grew 10% this year sequentially branded, March was a little bit light for us. But overall for the year, we expected to be in the double digits. So now we’re not seeing a slowdown there, we’re actually pretty positive, we’ve been able to book programs in virtually every one of the major networking companies whether they are U.S., European, or Chinese. So we’ve been very, very fortunate from that standpoint. The high velocity solution, I think that’s your other question, that’s going to be dominated by some of the big mobile customers, as you know. So we’re not anticipating much growth in that segment over the course of this year and not just because of that, but because of that PC ODM will decrease as well out into the final portion of the year. So we’re going to expect that whole group to be relatively flat maybe a little bit down on an entire year basis. But like I said in the scripts, all the other three groups, where the profitability is a little bit higher or a lot higher I should say, all those three groups are, we do expect to grow at double-digit this year. Shawn Harrison – Longbow Research: Okay. And then there is a brief follow-up, Paul just the SG&A was maybe a little higher than probably, as truly is modeling for this quarter. I guess expectations going forward?

Yeah, I think that’s, we’ve had some growth in SG&A and I think we’re just resizing some of the growth ahead of us, but on a go-forward basis we’re about at that 210 to 215 range, pretty stable at that level. Shawn Harrison – Longbow Research: Okay. Thank you very much.

Next question comes from Sherri Scribner with Deutsche Bank. Your line is open. Kevin Leblanc – Deutsche Bank: Hi, this is actually Kevin Leblanc on behalf of Sherri Scribner. What are the things was buried in deed, include myself, just again on commodity costs and labor prices and is that something that pressing your margins, especially on the component side of the business and especially with the Chinese labor cost?

Well, the labor cost we kind of baked in, we went through probably a 20% average increase this year, which kicked-in in April. So without doubt that’s the headwind, additionally commodity costs have continued to be quite strong. So most of the things are headwinds, but not unanticipated and but certainly favorable and now we can make more money, there is no question about that. But I think it’s just the environment that we need to operate in, we need to go deal with it and we have to have enough productivity to offset those kinds of changes or be able to attach some of those cost back into the customers and both of which we worked on pretty actively. So for sure the headwinds is going to keep going up and but in the meantime well, it’s just part of our business and we need to go deal with that. Kevin Leblanc – Deutsche Bank: Excellent. Thank you and just one last question. You had mentioned a few new deal wins de-ramping in the next quarter in the services segment, which is higher margin. Would you be able to roll the size of those winds or if you guys move the could move the year at all on operating margins?

Your question, I'm sorry, your question was? Kevin Leblanc – Deutsche Bank: It was the size of the deal wins that are ramping in the services?

So the services business, we’re at a couple of $100 million only of additional business in that business over the course of the year, and it will come with, substantially higher than EMS margin, so you can, you factor in EMS margins are twice, say twice the EMS margins, for this is nice round numbers and factoring in a couple of $100 million. So you can see it, I mean I won’t it moving the needle, but every group that helps right. Kevin Leblanc – Deutsche Bank: Excellent. Thank you.

Next question comes from Amit Daryanani from RBC Capital Markets. Your line is open. Amit Daryanani – RBC Capital Markets: Yes, good afternoon, guys, lots of questions, looking at the operating margins, when I look at what you guys give at the Analyst Day, the midpoint was $6.7 million revenues, 3.3% op margins, extra PC business. So we came in at $6.9 million revenue, but the op margins at 3.1%, could you explain why the degradation operating margins versus the midpoint of your guidance excluding the PC business?

Yeah, I think it’s quite similar Amit, I think what we said in the Analyst Day was 3.2 kind of number and we’ve lost about 10 basis points on that and that was entirely a component issue. We still get break even this quarter and we lost about $0.01 a share, which is worth about 10 basis points. That was really the only surprise that came out. Amit Daryanani – RBC Capital Markets: Got it. And then maybe we still look at the high velocity business, one of your big handset customers there has their own set of challenges. And I'm curious what you guys see, I guess little concern that they may miss the product we first cycle and units could be done dramatically again, are you guys worried about that and how do you plan to work around that to mitigate any further impact to your P&L?

Well, obviously, we work with the customers pretty closely, a lot of that capacity that we have is it’s certainly movable. So they’re in existing factories, and they use capacities that are very similar to any other product. So we just move those around as the case maybe, we’re not, there is quite a bit of a big ramp that’s anticipated over the course of the next couple of months, and so we’re pretty much all hands on deck to make sure that ramp happens. There is a pretty strong refresh coming out in the lot of new products, so we’re going to be optimistic about how those work out. However, the demand goes down then we’ll expect to move our equipment around and just use it that way. One of the benefits is, of growing every year and we kind of mention all these other different segments growing about, growing double-digits over the course of FY ‘12 and all those public segments are going to need capacity in what’s just redeployed fast if we needed it back. Right now we’re optimistic that we’ll see quite a bit of upside with the mobile customers to, as the products come out and hopefully they’re successful. But if we’re not, we’ll just move the capacity around the world, we’ll go deal with it. And of course, it will be a slight headwind on our earnings. But the numbers that we provide you kind of anticipate those challenges in the market place, so we already base that into our go forward forecast, and we’ll do the best we can to go mitigate it, should it be a problem. Amit Daryanani – RBC Capital Markets: Mike, just to clarify it seems like so the capacity is clearly movable and something like for industry deployed to warrant some other products fairly quickly, all right in case demand doesn’t show up.

Exactly. We still spend about $450 million a year on CapEx, and to the extent that any particular customer has excess equipment, we’ll just redeploy it and it’s one of the benefits, like I said that have a pretty strong growth in a lot of the other segments, if I use in a lot of the same capacity. Amit Daryanani – RBC Capital Markets: Thanks a lot.

Next question comes from Brian Alexander with Raymond James. Your line is open. Brian Alexander – Raymond James: Yeah. Just maybe following up on the margin question, could you just walk through the sequential gross margin decline you saw of about 30 basis points, obviously revenue was up nicely in the quarter. Yeah, and if I look at the incremental gross margin sequentially, it was only about 2.5%. So what specifically drove the weakness in gross margin sequentially, it doesn’t sound like you had incremental losses in PCs or components. So I’m just struggling to understand why such a big downtick in gross margin?

Yes, Brian so what we had was PC ODM, the volumes did ramp, and so there were some additional losses there that affects us of course. We also had some increase in SG&A, that I’ve talked to a little bit earlier on about $10 million increase there, so that help the margin a little bit on a sequential basis. And the mix, so as we grow on the seasonal quarters come out, add to those spend, you get a little bit of a margin mix issue, but all that together, for us it’s roughly about a 20 basis points off of March quarter, so that’s kind of how we explain that.

And I’ll also add to it, Brian that, we added these mobile phones, some of these mobile phone programs have delayed. You can’t immediately redeploy capacity, and I’ve added something (inaudible) to leave capacity in place because of the ramp just moves a quarter, it doesn’t go away and that’s fairly. So we have a pretty significant change from Q1 to Q2, which resulted in some challenges on the OP line, just as a result of some of those mobile phone push up. Brian Alexander – Raymond James: Okay. And just a follow up on the revenue guidance up 3% sequentially at the mid point, it seems to below seasonal, and I think on a year-over-year basis it will be up about 5%. A quarter ago, I think you thought you would grow double-digits in each segment Mike, so what changed from last quarter to this quarter particularly in the industrial, in the integrated segments. I think if I look at your September guidance by segment, both of those are expected to grow below 10% year-over-year, but you seem very confident that for the year, they should both grow double-digits. So I guess what changed in those two segments, and then going forward, what has to happen for you to grow double digits in those segments, is it macro driven or do you have a lot of visibility because of the program wins?

Yeah, sometimes the quarterly results aren’t really reflecting the yearly average, sometimes there’s certain adjustments. As a good example, I can use those, last year we grew integrated networking services by 10%, yet Q4 was off substantially, I mean, they got nervous about it, optical was a little bit down and said, don’t worry about it, just some program delays and such. But improved for the whole year last year, integrating network service by 10%. This go forward year, you know in FY ’11, we also expect to grow over 10%, still even with some of the comments I made on the softer economy. And that’s largely driven on the strength of many new program wins and a lot of the programs that we are in are kind of the newer programs that have the most attraction or the most future type of attraction potentially in the market place. So sometimes these quarterly changes don’t, you can’t lead too much into them, you mentioned industrial. Industrial is up 17% sequentially this quarter relative to the March quarter. And this next quarter it’s down by single digits, but if you take an average of the two, and then it’s growing, say it’s going to be 5%, you take 17 and 5 in all the 7 you’ve got very, very strong average sequential growth. So it again, we see the programs that we’ve booked that we layer on, on top of the existing customer forecast, and once again we think we’re nicely in the range to achieve double-digit growth. So I think sometimes the quarterly, kind of this and by the way the industrial, I think a lot of what that’s driven now, as I mentioned was things like capital equipment which is actually quite strong last time and it tends to run in little mini cycles because it tends to burst and then it tends to back off quite a bit. So we’re just seeing the back off cycle right now, usually it takes a quarter, you don’t tune that, and then it goes back up and goes into a burst. So I think when we look at the whole picture, and we look across the quarterly disruptions, I think it ends up being a pretty solid growth picture for us and we’ll continue to be quite bullish about how all those groups have been out there. Brian Alexander – Raymond James: If I could just make a follow-up or a last question, quick one for Paul, the share count, I think you said, 750, I just wanted to clarify that for September because that was not seen to factor in any potential buybacks in the September quarter, I just want to clarify.

No, I said, 740. Brian Alexander – Raymond James: Oh, sorry.

Which doesn’t kind of place any additional buybacks over and above what we’ve done and completed in the June quarter. Brian Alexander – Raymond James: Okay, great. Thanks.

Next question comes from Craig Hettenbach with Goldman Sachs. Your line is open. Craig Hettenbach – Goldman Sachs: Yes, thank you. You commented that Japan wasn't as bad as you expected. Can you talk about how you see things today, whether it's inventory or demand trends in relation to Japan?

So I think, and the next is what I observe, I mean, everybody thought it was going to be a big problem and a lot of the problem that people anticipated was some of the uncertainty not just in the core component base, but maybe even in the sub-components and how those might ripple through the industry, it was difficult to see at the time. but the response was quick; I think the industry moved very, very rapidly. and so it’s a kind of created a pretty minimal impact on most of the electronics base of businesses around the world, the only, the major exception to that is the automotive in Japan as you probably know. But everything else actually reacted quickly, and again, it created some headwinds in terms of the need to expedite parts that we have to maybe buy, pay extra for some parts, we have to bring out some additional inventory when we’re worried about it. There were certainly headwinds associated with it, but all in all, I think the response was very, very positive by the industry. So I think, and the next is what I observe, I mean, everybody thought it was going to be a big problem and a lot of the problem that people anticipated was some of the uncertainty not just in the core component base, but maybe even in the sub-components and how those might ripple through the industry, it was difficult to see at the time. but the response was quick; I think the industry moved very, very rapidly. and so it’s a kind of created a pretty minimal impact on most of the electronics base of businesses around the world, the only, the major exception to that is the automotive in Japan as you probably know. But everything else actually reacted quickly, and again, it created some headwinds in terms of the need to expedite parts that we have to maybe buy, pay extra for some parts, we have to bring out some additional inventory when we’re worried about it. There were certainly headwinds associated with it, but all in all, I think the response was very, very positive by the industry. Craig Hettenbach – Goldman Sachs: Okay. And then if I can follow up, as you exit the PC ODM business, can you talk about the new business segment categories, where you expect to focus most in terms of driving growth on a go-forward basis longer term?

Craig Hettenbach – Goldman Sachs: Okay, thank you.

Next question comes from Jim Suva from Citigroup. Your line is open. Jim Suva – Citigroup: Thanks guys for taking the call. A quick question on the components. The commentary about it appears that they're actually getting worse. Can you help us understand why components are getting worse, as I would assume your management is all over this issue, as it's kind of been a perplexing cold for the company for a little bit of time. And then maybe more importantly looking forward, rather than back, with many of your customers ramping pretty healthily here in the back half of the year, any thoughts around are you changing the way you're pricing things or the way you're yielding or rolling out processes to make sure that the components don't have a bit of a hiccup here with your strong ramps? Thanks.

Yeah. So Jim, you have to kind of may be look at it from where we look at it. So first of all multi continues to make improvements, it’s made improvements probably every quarter for like about six different, six quarters in the past. And it’s just moved through our seasonally lower March, June kind of period and then it hits a ramp up September, December. So being comfortable in the March, December, March, June timeframe and going over with a pretty solid book of business, which is what we do have, it leverages that fixed asset base very, very effectively. So we actually think that one is on track, we’re not too worried about it, it seems to make progress every quarter, we have to let them know how we’re in the business and it’s very predictable the customers enter in and we’re quite comfortable with that one. On the camera module business, it’s a little bit, the challenge that we had last year were built around being able to achieve the yields, and we implemented a very good process, it was a state-of-the-art process, when we launched that process no one else in the world had it, that’s why we ended up booking all the business. It under achieved in terms of, that wasn’t under achieved, it just didn’t hit our yield targets for about six months, we would have liked to seeing it hit our yield targets in two months, but it was some significant unpredictability and it was simultaneously hit with massive volume increases on a continuous basis. So we never had time to go fix these things and we kept chasing volume for the customer. So what’s happened is, that business is now stabilized. In fact the last quarter, six months the yields we’ve been…

Yeah, the amortization for sure is winding down. Its lot of Solectron kind of integration, amortization issues. So you should expect a decline of them over time, it’s on that track. Stock based compensation; I wouldn’t say we’ve changed anything, Jim. It is largely dependent on the stock price and the grants, et cetera, but you should assume that that’s fairly flattened that range. But what we’re looking forward to is this adjusted to GAAP EPS, which is roughly $0.04 probably trend down towards more like $0.03 next year. And the closer it gets the better we feel about that. Jim Suva – Citigroup: That’s great. Thank you very much for your time gentlemen.

Thank you, Jim.

Next question comes from Brian White from Ticonderoga. Your line is open. Brian White – Ticonderoga Securities: Yes, Paul on the sales guidance for September quarter, I think someone pointed out it's below average. I calculated typically you see about a 10% uptick. You're guiding to a 3% uptick. And I'm wondering what piece of that is related to just a slower macro environment, and what piece is related to exiting the PC business, specifically on the September quarter?

Well I think you have to first acknowledge that June was strong for us by a couple hundred million dollars. So some of that is little bit of a pulling perhaps that Mike talked about for the year, I was fully anticipating these pretty strong numbers for these business groups. In ODM PC, a significant, certainly a big contributor of March to June, and should be in that range for the September-December period. So I think that’s – we continue to be cautious about our guidance range on the revenue side, back in the March quarters remember we kind of missed it, but it’s a seasonal period with consumer products and in the mobile area there is obviously some concern and we got to be cautious about bad ODM PC a big number, but they could of plus or minus 100 million pretty easily. So I think that that’s how we framed anyway our guidance level this September. Brian White – Ticonderoga Securities: But Paul, should we assume some exit of the PC business in the September quarter versus the June quarter, or no?

No, no, I think its, it kind of peaks in the September quarter then you will see an exit more in the December quarter. Brian White – Ticonderoga Securities: Okay. On inventory dollars, will they decline sequentially in the September quarter?

I don’t think so, because you’re building for December quarter, which is typically a high quarter. And so I think you’d probably see the same level maybe up a little at the end of the quarter there? Brian White – Ticonderoga Securities: Okay, thank you.

Next question comes from Louis Miscioscia from Collins Stewart. Your line is open. Louis Miscioscia – Collins Stewart: Okay, great, thank you. Maybe if you could go into the PC business in a little bit more detail, in the sense you obviously gave the comment that it's going to peak in September and then start to fall off in December. How fast should we expect it to fall off in calendar 2012? And then along with that, you also gave 3.5% operating margin guidance. If it's not falling off that fast, does that change or does that fall off very quickly in March or something?

I think that’s with any product like this, Lou, we’re anticipating volumes through the majority of the December quarter, not entirely because the month of December is usually pretty slow from a manufacturing and shipping perspective, it’s easy on the shelves by then. So we will see a lower revenue number in December, this September. But again these are all forecast numbers and it’s a consumer product that you just got to know how it sells. But it went very strong here in June and we anticipated, peaking a little bit in September then declining in December is kind of how to look at it.

What I can say is, when we did the Analyst Day, we kind of had some uncertainty as to when the programs would roll off. And I would say at this point we have well over a 90% certainty that it ends in the Q3 period. And then you will get a pretty significant kick in operating profit almost immediately. Louis Miscioscia – Collins Stewart: Okay. So most of it ends in December so that 3.5% operating margin guidance was not calendar year-end being December, it was more fiscal year-end March?

Correct.

That’s correct. I think you have to assume that we’re going to pop that 3.5% like Paul said, we got things going on, we got the component switch, we continue to get more and more comfortable with as we talked about. And the second path that we get is when ODMs just rolls off and it will and there is 90% chance that rolls off in December. I mean I’d say 100% but there is never any sure thing here. But we have quite a bit of good visibility from our customer when they would like that program to end. So I think it’s reasonably de-risk, I think it’ll be out in December quarter, but it’s not until it’s out where we see the operating profit really kicked. But you see kick a little bit because there is free components coming up. But you’ll get both benefits in the March quarter. Louis Miscioscia – Collins Stewart: Okay. And then just a clarification if you could add, in the component area, obviously you've got power cameras, Multek, and then you've always had plastics and metal bending. Could you give us any breakdown as to which one is may be the majority, or any one 50% and maybe the breakup of the rest?

The breakup for the rest, we kind of run along side of our core business, we don’t separate it out. We look at lot of it. So when we talk about the components profitability, we’re only talking about power and cameras and Multek. We actually run the other businesses right in, embedded in the standard EMS businesses. Louis Miscioscia – Collins Stewart: Okay. Then maybe the percent of Multek, what – at least 50% or over 50% of all that?

I think Multek is kind of around 35% and then camera margins is the smallest probably about 25% and then you’ve got the balance to power. Louis Miscioscia – Collins Stewart: Okay. Thanks guys.

It is probably 40% for Multek. Louis Miscioscia – Collins Stewart: Thank you.

You’re welcome.

The next question comes from Wamsi Mohan from Bank of America. Your line is open. Wamsi Mohan – Bank of America Merrill Lynch: Yes, thank you. Mike, thanks for all the color on components. So from your commentary, it sounds Multek's already doing well, camera modules the yields are getting better, and the wins are based on existing technology, so there's sort of a de-risking factor over there. So, sequentially it sounds like we should be expecting an improvement as we go through the course of the year, and obviously you're indicating you can get to 3.5% by the end of the fiscal year. But when you look at your guidance – your mid-point or you pick maybe wherever in the range – you're still at operating margin of 2.6%, including the PC ODM business. If the impact of the exit of that is similar in magnitude, so 50 basis points as it was this quarter, then your operating margins are still at 3.1%, which is still flat quarter-on-quarter. So, I guess I'm trying to reconcile, is that guidance basically assuming no improvement in components for next quarter? And why not, because it sounds like the revenues will be higher for components for next quarter, or is there some other offset that haven’t addressed?

Yeah. I think there’s a little bit of offset in some of the other, so anyways what we assume in there is we do assume an increase, an improvement in component. So we definitely think components will run over breakeven in Q2 in the September quarter. We do have some headwinds and I would say some profit challenges as a result of some of the big mobile customers. So now, if you – we already talked about that being a problem for this quarter, this last quarter and this coming quarter. We’ve not quicken any utilization, because of some delayed product ramps. So that actually is a little bit of an additional headwind, but it probably goes away pretty quickly. So the other pieces of the business that are slightly effective most notably the mobile com business that actually kicks in the Q2. And then just sort of we expect in Q3 and Q4 as we expect the mobile com business to turnaround very rapidly and then in fact that would be reasonably strong in Q3 and Q4. And that’s even taking some significant de-rates off of the customer forecast. So we’ve been with very significant de-rates up the current forecast, we expect Q3 and Q4 to come back pretty aggressively. I’d say just now as you get this other part of the business, which is mobile phones and Q1 and Q2 are really weak. And that’s a headwind for us in these two quarters. Wamsi Mohan – Bank of America Merrill Lynch: Okay. And would you – could you maybe quantify the magnitude of that headwind?

Well, I suspect you – I don’t know the number exactly but you’ll see a significant change in profitability, as mobile com probably goes up $0.02 or $0.03 from Q2 to Q3. It's significant. Wamsi Mohan – Bank of America Merrill Lynch: Okay. Thank you.

Next question comes from Matt Sheerin with Stifel Nicolaus. Your line is open. Matt Sheerin – Stifel, Nicolaus and Company: Yes, thanks. I just want to go back to the ODM business, which you're phasing out. As you wind that down, will there be any near-term financial implications, whether it be restructuring charges, any other headwinds in terms of another headwind to profitability? And looking at that capacity, you talked about back-filling some capacity, some other areas. But are you confident that you can fill that capacity, or will you really have to actually shut down plants and lay off workers, et cetera?

We’re losing $20 million a quarter just having a few million dollars of charges kind of in the noise. So if we would have to lay off workers, it’d probably pretty minimal relative to the kind of losses that we’re undergoing so the return on that investment is probably going to be like a month, if not faster. There may be some residual headwinds in terms of some excess inventory that sort of thing, we run that business at about 35 inventory turns, so it runs real fast. So it takes a lot of the risk out of having any sort of residual problems. There may be some tools and such and some cleanup items. I mean there will be some cleanup items associated with it, but with the $20 million burn per quarter, pretty quickly. So I think you will see some of that and I think if we just think about the business losing $20 million to $25 million through the December quarter then I think that has a covering anything that we could be thinking of. Matt Sheerin – Stifel, Nicolaus and Company: Okay. And back to the mobility business, just clarifying. Sounds like you said it was weak and down significantly quarter-on-quarter, year-on-year. Sounds like it's going to be weak next quarter, but still up sequentially? Is that correct, but in magnitude still relatively weak?

This September quarter will be weak. Matt Sheerin – Stifel, Nicolaus and Company: Will it be up sequentially or not?

I think it's relatively flat.

Little flat this quarter and this quarter is a big headwind for us. September quarter will be relatively flat. Now the forecast I am giving on that being flat is significantly less than maybe customer’s expectations. So if it comes through and there is more there, then we will build more, but we are assuming for our financial forecast that is kind of a flat through the June quarter. And then we'd expect the next two quarters to be pretty heavy. So even if the customers, even mildly successful, there will be a significant increase in revenue and OP contribution. Matt Sheerin – Stifel, Nicolaus and Company: Okay. And just last quick question, could you tell us what percentage of revenue came from your top 10 customers and whether you had any 10% customers?

We have one 10% customer, which is HP and the total for the top 10 is 55%. Matt Sheerin – Stifel, Nicolaus and Company: Okay, thanks a lot.

Next question comes from Steven J. O'Brien, JPMorgan, your line is open. Steven J. O'Brien – JPMorgan: Hi, thanks for taking my question. Mike, you talked about de-rating your customer forecast in the mobile area, but is there any progress in terms of diversification in your customer base that can provide you with a level of confidence going into the seasonal build period for mobile devices that's more than just sort of discounting your major customers forecast?

Yes. Well one of the things that we’re trying to do by just having a high velocity segment is we're trying to create within this really a consumer division, we're trying to create a bundle of products to create the diversification. So we're no longer focused just running a mobile com business, we're focused on creating a diversified consumer business. So that’s kind of how we think about it from now on. We’ll probably spend less time talking about mobile commerce, we transition and we're just talking about high velocity. But the way we think about it is as we have to have a broadly diversified consumer business and today there was things like as you know we’re doing Xbox, that’s a gaming product. We do printers, we do films, we’ll continue to do a firm EMS kind of computing kind of businesses. So there is still going to be it. So what we're going to think about is how do we diversify that set of consumer products because we just don't have a lot of very specific investments towards any one of those individual products that tend to use a little bit, a lot of the same equipment, and so we think about that. That being said we also this last quarter we booked some business with CTV to do their phones. We already have a very substantial business doing phones with Huwaii that’s growing pretty rapidly, and we have a number of other Japanese customers still got you’ve heard in the past. And quite frankly we’re very, very actively working on trying to penetrate some of the tier 1s that are coming up very actively. So the answer is we’re trying to run velocity as it hit itself diversified so we don't have exposure to any one particular product category within consumer. But as we look to do that we are very rapidly trying to diversify our mobile business as well. Steven J. O'Brien – JPMorgan: Great. And if I could follow up, sounds like there were some restructuring costs, specifically in the power supply business that you didn't call out. Were there any other areas where you did some reallocating of resources, you had some costs that maybe would be above the norm, but not something you called out this quarter?

No, I think the power supply was where we had restructured a couple of facilities, but we’re now excited about its nose level. There is always thinks we do which we don’t call out, but most exciting is probably all the restructuring of power. Steven J. O'Brien – JPMorgan: All right, thanks.

Operator, we are little over time, we can take one more.

And the last question comes from Sean Hannan from Needham & Company. Your line is open. Sean your line is open, why don’t you check the mute button.

I think Sean’s gone. Okay, so if Sean is not here, lets just wrap it up. I think Kevin has a the closing comment.

Yeah, thanks. Thanks everybody for joining us. You can access a reply of the call and obtain a transcript on our website. It should be posted by tomorrow, and this concludes the call. Good-bye.

Thank you everybody. Bye-bye.

That concludes today’s call. Thank you for participating you may disconnect at this time.