Welcome to the NeoPhotonics’ Third Quarter 2013 Business Update Call. This call is being webcast live on the NeoPhotonics’ Event Calendar webpage at www.neophotonics.com. This call is the property of NeoPhotonics and any recording, reproduction or transmission of this call without the expressed written consent of NeoPhotonics is prohibited. You may listen to a webcast replay of this call by going to the NeoPhotonics webpage. I would now like to turn the call over to Erica Mannion at Sapphire Investor Relations, Investor Relations for NeoPhotonics.

Good morning. Thank you for joining us today for NeoPhotonics’ third quarter business update. With me today are Tim Jenks, Chairman and CEO, and Cal Hoagland, Interim CFO. Tim will begin with a general summary of the progress made during NeoPhotonics’ third quarter, followed by Cal who will discuss certain financial matters, our new auditor appointment, and reasons for the delay in filing. Tim will continue with a discussion of the industry and technology trends and future growth opportunities for the -- before the Company opens the call up for questions. The call today may contain forward-looking statements that involve risks and uncertainties. These include statements related to NeoPhotonics’ future quarterly filings, business outlook for the quarter ending December 31, 2013, future periods and industry trends, and forward-looking statements that management may make in response to questions. Actual results may differ materially from forward-looking statements. Factors that could cause results to differ materially from these statements include those described in yesterday’s press release, as well as those detailed in the section entitled Risk Factors of the Company’s Annual and Quarterly Reports on Forms10-K and 10-Q most recently filed with the SEC. NeoPhotonics cautions you not to place undue reliance on forward-looking statements, and that these statements speak only as of the date they are made. Non-GAAP financial measures will be discussed today. Please visit NeoPhotonics’ Investor Relations webpage for the Company’s press release, which contains an explanation of these non-GAAP financial measures. Before I turn the call over to Tim, I would like to mention that management will be presenting at the upcoming conferences taking place in the first quarter of 2014. Needham & Company’s Technology Conference, the week of January 13th in New York City, Stifel Nicolaus’ Technology, Media & Internet Conference, the week of February 10th in San Francisco, and Raymond James’ Institutional Investors Conference, the week of March 3rd in Orlando, Florida. Now, I will turn the call over to CEO, Tim Jenks.

Thank you for joining us today. NeoPhotonics made solid progress during the last year and we continued that trajectory in our third quarter of 2013. We are proud to report the highest revenue in the Company’s history at $76.8 million, which was toward the higher end of our projected range of $72 million to $78 million. We continued to accelerate our 100 gigabit per second product suite. In conjunction, we saw good results from the strategic acquisition of LAPIS Semiconductor Optical Components Unit that we closed in the first quarter, and which enhanced our 100G product portfolio. I will refer to this business henceforth as NeoPhotonics Semiconductor. And we continue to see strong traction with our 100G and Coherent products and momentum with new products in the pipeline. We are pleased that we continue to achieve sequential growth, both organically and in the acquired NeoPhotonics Semiconductor business. Before I continue with the usual business overview, I would like to bring your attention to the press release we sent out after the market closed yesterday, in which we stated that we will be delayed in filing our Form 10-Q. While we are working diligently to resolve the underlying issue, I believe it’s important to note that our filing delay has no impact on our ongoing business activities and progress. I will now turn the call over to Cal Hoagland, our Interim Chief Financial Officer, to provide more details and then I’ll come back on the line to provide a more in depth update on our business progress. Cal?

Thank you, Tim, and good morning. For those of you who may be new to NeoPhotonics, I succeeded JD Fay as Interim CFO in early September. Since that time I’ve had the pleasure of working with a dedicated team that is driving to further enhance its position as a leader in the 100G network communications space. In our press release today we announced that Deloitte LLP has been appointed as our new audit partner, effective November 15, 2013. In addition we announced that we are delayed in filing our Form 10-Q for September 30, 2013 period due to a purchase price accounting issue, and as well, its relation to our previously announced change in auditor. Today we are limiting our discussion to just the Revenue and Cash Balances as we are working to finish a complete review of the Purchase Price Accounting related to NeoPhotonics Semiconductor and to allow our new auditors time to review our completed Financials. As a result, we cannot make any comments on any additional line items. As to when we will file our Q1, Q2, and Q3 financials we are not able to make an estimate at this time, but we are committed to completing them as urgently as we possibly can. The Company’s quarterly report on Form 10-Q/A for the first quarter of 2013 previously filed with the SEC included a real estate registration tax on property acquired in Japan in the acquisition of approximately $0.5 million, as part of the purchase price of NeoPhotonics Semiconductor. Upon a further examination as to the nature and party legally responsible for the payment of the real estate registration tax, we have determined the tax should have been expensed as an acquisition cost. As such, the Company is determined that we will need to restate our financial…

Thank you Cal. Notwithstanding the recent determination regarding the purchase price accounting for NeoPhotonics Semiconductor, we are pleased with our continued progress. NeoPhotonics is a leading designer and manufacturer of photonic integrated circuit, or PIC, based optoelectronic modules and subsystems for bandwidth-intensive, high-speed communications networks. Our products enable cost-effective, high-speed data transmission and efficient allocation of bandwidth over communications networks. As network speeds have moved from 10G to 40G to 100G, we have been enjoying rapid growth with our leadership in 100G applications, as we provide a suite of solutions to customers for Coherent and other high speed networks. Our business continues to be driven by our 100G products including those used in telecom Coherent networks, plus contributions from NeoPhotonics Semiconductor, notably also for 100G products. Revenue from our high-speed products was $28.4 million or 37% of total revenue in the third quarter. This is an increase of 31% from the third quarter of 2012. Our 100G product group was the largest contributor to our highest revenue quarter in the Company’s history. Today we have a strong suite of solutions for 100G transmission. That our customers are utilizing for next generation designs due to superior performance as well as cost competitiveness. We continue to work on increasing our content per port in 100G systems, and we believe that our percent of revenue in the 100G business is one of the highest of companies in the market for optical modules and subsystems, and we continue to see expectations for ramping in this early part of a multi-year investment cycle for 100G systems. In the industry going forward, we expect to see modest increases in carrier CapEx, such as was recently announced by Verizon, and new program awards for 100G transport and metro deployments, which we would expect to result in increasing…

Absolutely. (Operator Instructions) We’ll take our first question from Alex Henderson from Needham. and: Absolutely. (Operator Instructions) We’ll take our first question from Alex Henderson from Needham.

Two questions, first one sort of obvious which is I’m a little confused at why you can’t give us a little bit more detail on the full income statement given the magnitude of the accounting adjustment you’re talking about is only a $1.5 million which looks like it was in prior periods as opposed to something that would be impacting the current quarter? And can you give us at least some sense of what’s going on in your OpEx lines so that we have at least some sort of baseline to work off of? And then second, on the demand side of the equation. Can you talk a little bit more about the timing and structure and magnitude of what you’re hearing out of China? Obviously the hockey stick of demand associated with big build has not occurred, but it does sound like China was a little stronger seasonally than it was in the prior quarter. And when would you expect that Chinese business hockey stick to start to kick in, what kind of magnitude would you think that that would look like? Needham & Company: Two questions, first one sort of obvious which is I’m a little confused at why you can’t give us a little bit more detail on the full income statement given the magnitude of the accounting adjustment you’re talking about is only a $1.5 million which looks like it was in prior periods as opposed to something that would be impacting the current quarter? And can you give us at least some sense of what’s going on in your OpEx lines so that we have at least some sort of baseline to work off of? And then second, on the demand side of the equation. Can you talk a little bit more about the timing and structure and magnitude of what you’re hearing out of China? Obviously the hockey stick of demand associated with big build has not occurred, but it does sound like China was a little stronger seasonally than it was in the prior quarter. And when would you expect that Chinese business hockey stick to start to kick in, what kind of magnitude would you think that that would look like?

With respect to the accounting questions, maybe Cal can first address that.

What we’re dealing there was a purchase price and its allocation and that has a ripple through effect from Q1, Q2 and Q3. So we want make sure that we have that bucket did correctly between the quarters. And as also there is some mechanics of making sure that we get all the other items in there too. And then lastly we have new auditors coming and taking look at this as you recall our pervious auditors resigned effective the 15th, they indicated they were not able to complete the review prior to our filing date so we have new auditors. And they may possibly take a slightly different look at things. So those are items that are in consideration and why we are at this point in time not coming out with further information. In regards to the OpEx line, at this point in time we can't give any further guidance in this. The acquisition of NeoSemi does have an impact on our OpEx.

I am going to go to the demand side question and specifically related to China. In prior conference calls we have talked about what we were hearing notably with China Mobile, China Telecom expressions for tenders and their volumes, which were talked about in the range of 10,000 lines. We're still hearing numbers in the high single-digit thousands for lined deployments of 100G for the same carriers, but it's not more specific now actually than it was previously. So I would expect that in November-December there is some more clarity because all of the network equipment suppliers are dealing with vendors on share awards and supply contracts for the next year. And therefore I would expect greater clarity, but Alex I don't really have more detail to share than this.

(Operator Instructions) And we'll take our next question from Jorge Rivas from Craig Hallum. Your line is open.

I am sorry. Can you hear me now? Craig Hallum: I am sorry. Can you hear me now?

Yeah go ahead Jorge.

First question on two of your top customers, I noticed that Ciena and Huawei were down sequentially when the quarter grew a little bit, just wondering if there is anything going on there? I noticed that Ciena guided for revenues to go up 5% for the October quarter. So just trying to reconcile those different trends I guess. Craig Hallum: First question on two of your top customers, I noticed that Ciena and Huawei were down sequentially when the quarter grew a little bit, just wondering if there is anything going on there? I noticed that Ciena guided for revenues to go up 5% for the October quarter. So just trying to reconcile those different trends I guess.

Very well the, let's see we did report also that Alcatel was sequentially up and quite a bit. And so Alcatel went to 18% of revenue and then as you noted Huawei and Ciena proportionally did decline. We did also note in the prior conference call that Ciena was up quite a bit. So sequentially in the prior quarter the second quarter of Ciena was played up as their WaveLogic 3 system had launched and there was quite a surge. And then I think we are into a more normalized view. But proportionately your observation is correct, we did see a little bit more Access business this quarter on a percent basis, but there aren't megatrends going on with any of these guys, but there are differences as to what they take in each quarter. So Ciena was strong in the second quarter and Alcatel was strong in the third quarter.

My other question it’s about for next quarter guidance, can you give us some color on the segments and how we should expect them to perform? Craig Hallum: My other question it’s about for next quarter guidance, can you give us some color on the segments and how we should expect them to perform?

Well let's see, we have -- we're guiding $70 million to $76 million for the fourth quarter the -- recall as Cal noted that in the fourth quarter we do have negotiations that happened. So as those negotiations happen in November and December timeframe depending on the customer that does have a downward impact on revenue and margin. On a product group basis, we would generally expect things to be relatively flat. The speed and agility segment will still be the largest piece of our business. We're continuing to see strength there as well as strength overall in our 100G products, the Access business relatively flat both on a percentage basis and a revenue basis. So I wouldn't lead you to any major changes in those.

And then one last question if I may. Can you give us the growth -- sequential growth number for 100G in the third quarter? Craig Hallum: And then one last question if I may. Can you give us the growth -- sequential growth number for 100G in the third quarter?

Sure. Hang on just one moment. So in the -- on a sequential basis the total growth let's see in 2013 third quarter the whole business is actually down just very slightly like 2% or 3%, actually 3%. We had a fair amount of inventory at the end of the second quarter, so on a sequential basis that's down just a smidgeon. And on a volume basis proportionately, is that what you're looking at?

Yes. Craig Hallum: Yes.

Okay.

(Operator Instructions) We'll take a follow-up question from Alex Henderson from Needham.

So could you give us a little bit more sense of what your timeline is on the micro-ITLA in terms of your sampling now, when does it go to full production, when do you think that that becomes a material contributor to revenues? Needham & Company: So could you give us a little bit more sense of what your timeline is on the micro-ITLA in terms of your sampling now, when does it go to full production, when do you think that that becomes a material contributor to revenues?

We are sampling that product now and our expectation is that we would have what we would refer to as general availability in Q1. And so we would expect it to be material in the second half, but with the GA in Q1 it's really in the second quarter that it's material as opposed to the first quarter, because it will just start to grow in the first quarter.

And the pricing/margin associated with that product versus the existing 100G product there is, how should we be thinking about that? Needham & Company: And the pricing/margin associated with that product versus the existing 100G product there is, how should we be thinking about that?

Well, let's see, in general terms the 100G, the existing ITLA or integrated tunable laser assembly and the micro-ITLA aren't, they're not really direct replacements in the sense that people don’t remove and replace one and put the other one in necessarily but it is often used in new designs. There is for the smaller form factor and higher performance there is some level of price premium, but we would expect that they'll go to parity actually over the course of a year or so, but it does start off with a premium for the micro.

And is there a gross margin impact on the startup cost of this product line, how should we be thinking of the feathering in the increased initial volumes, low margins, that kind of thing when you first start launching the project and how rapidly does that change from start up mode to volume production where your margins are normalized? Needham & Company: And is there a gross margin impact on the startup cost of this product line, how should we be thinking of the feathering in the increased initial volumes, low margins, that kind of thing when you first start launching the project and how rapidly does that change from start up mode to volume production where your margins are normalized?

Well, let's see the, from a production point of view the two products have a lot of similarity in the production locations and production processing. The result of that is that there is an overlap or a crossover between the two productions, so overtime as volume increases in the micro than it becomes the dominant player in the production lines but they're to a large extent the production processes are done together and they do, they're produced in the same facility and they're produced largely sharing similar equipment. The margin on a new product that we're just starting to produce is a little difficult to predict. If there are any teething issues than you can have, you can in some cases have a slightly lower margin although the expectation is that generally speaking it would be slightly higher overtime than the existing base product.

So in the second quarter when it's going from initial launch to modest volumes, should we anticipate that the margins on the product will be lower than the corporate averages or will it be particularly new to that level? Needham & Company: So in the second quarter when it's going from initial launch to modest volumes, should we anticipate that the margins on the product will be lower than the corporate averages or will it be particularly new to that level?

They're highly -- you should expect it to be in line with the corporate average and I would expect that as it matures in the second half of the year it’ll be a positive contributor.

And the same questions around the CFP2 form factor product and can you delineate between SR and LR? Needham & Company: And the same questions around the CFP2 form factor product and can you delineate between SR and LR?

Yes, sure, so first of all just to note, we, I know you know this Alex, but just to cover it though, we manufacture today a CFP so this 100G pluggable module. And then we go to a next generation which is approximately half the size and that's the CFP2. The CFP2 we have in variations that is both the LR4 and the LR10, you asked about SR, the short reach version, all of ours are long reach. And so we do have both the 100G provided with 10 lanes of 10G and we have the 100G provided with four lanes of 25G, so different variance both LR. The two products have quite high internally produced content. With that high content they actually have margin profiles that are reasonably similar. And it would be different if for example lot of the content was purchased from outside but they’re actually very strong vertical integration products.

And the timing of ramping these LR2 -- I mean the CFP2 form factors? Needham & Company: And the timing of ramping these LR2 -- I mean the CFP2 form factors?

So for CFP2 that -- both versions of that product have GAs that are in the same timeframe as the last product we talked, the micro-ITLA. However, the design in there expectation is that volume will take a bit longer. So, we would be predicting that in the second half, so third quarter, fourth quarter as opposed to the micro-ITLA which I said in the second quarter.

Obviously these are datacenter products, can you talk about what else you sell into the datacenter other than these two products. What portion of your -- in aggregate what portion of your business is datacenter you mention that as an area of future growth. How do you see that transitioning overtime relative to the broader mix? Needham & Company: Obviously these are datacenter products, can you talk about what else you sell into the datacenter other than these two products. What portion of your -- in aggregate what portion of your business is datacenter you mention that as an area of future growth. How do you see that transitioning overtime relative to the broader mix?

Yes, so the products, first of all the datacenter products are covering both 10G and 100G. And so in 10G we’re talking about for example SFP+ 10G transceiver products and in 100G we’re talking CFP, CFP2 type transceiver products. Today the, probably a majority of our shipments of these products go to telecos but they’re often connecting doing router connects for example between router in a datacenter and then connecting that to the telecom operator’s central office. And so there are some applications that maybe within the datacenter, but it’s often datacenter to teleco via the router interconnect on CFP. SFP+ can be more broadly used as it’s an MSA product.

And the scale of the 10G piece of your business? Needham & Company: And the scale of the 10G piece of your business?

10G is relatively small. So, it’s single-digits for us, single-digit percent for us.

It appears there are no further questions at this time. Tim Jenks, at this time I’ll turn the conference back over to you for any additional or closing remarks.

Well, thank you to everyone for joining us today. In closing I would like to thank everyone for joining the call and given our record revenue in the quarter, it’s regrettable that we were not able to share more detail on the third quarter financial results at this time. However, as our guidance indicates, the business continues to perform well and we remain very excited about the opportunity which lies in front of us. Thank you very much.

This concludes today’s conference. Thank you for your participation.