Good morning, and welcome to the Zebra Technologies 2012 second quarter earnings release conference call. Joining us today from Zebra Technologies are Anders Gustafsson, CEO; Mike Smiley, CFO; Mike Terzich, Senior Vice President, Global Sales and Marketing; and Doug Fox, Vice President, Investor Relations. (Operator Instructions) And now, I would like to introduce Mr. Doug Fox of Zebra Technologies.

Good morning, thank you for joining us today. Certain statements made on this call will relate to future events or circumstances and they therefore will be forward-looking statements within the meaning of the Securities Litigation Reform Act of 1995. Words such as expect, believe and anticipate are a few examples of words identifying a forward-looking statement. Forward-looking information is subject to various risks and uncertainties, which could significantly affect expected results. Risk factors were noted in the news release issued this morning and are also described in Zebra's 10-K for the year ended December 31, 2011, which is on filed with the SEC. Now, let me turn the call over to Anders Gustafsson for some brief opening remarks.

Thank you, Doug, and good morning everyone. For the second quarter Zebra reported sales of $247 million and earnings from continuing operations of $0.58 per share. Second quarter revenues reflect the constraints of the business environment in Europe, where parts of Western Europe were more challenged than had been expected. At the same time, the execution of our strategies to take share, penetrate key industries more deeply and build stronger ties from strategic accounts resulted in our delivering year-over-year and sequential sales growth, including strong growth in several emerging regions, 10% sales growth in North America and a new record for printer shipments. The operational resilience of our business helped sustain a high gross margin of nearly 49%. We also maintained operating expenses in line with guidance with some anticipated expenditures for M&A, and other meaningful investments that position Zebra for long-term success and improving investment returns. We generated a strong $45.2 million in free cash flow reflecting continued effective management of working capital. During the quarter we returned $14.9 million to shareholders through the buyback of 409,000 shares. Shortly after the end of the quarter, we announced the acquisition of LaserBand, which substantially enhances Zebra's position in healthcare, an attractive area for growth with industry-leading patient identification solutions. Even with the current economic challenges all companies faced, we continue to have great confidence in Zebra's future. As our accomplishments in the second quarter demonstrate, we continue to build greater value for our customers and shareholders. Over the past year, we have sharpened our focus on key industries with significant opportunity, such as retail, healthcare and manufacturing. Our performance in North America and emerging regions demonstrates the effectiveness of these strategies. Zebra together with our partners is working to create a smarter, more connected business community. We are pursuing this…

Thank you, Anders. Let me highlight some of the key components of Zebra's results for the second quarter. My comments will principally focus on year-over-year changes and the performance of Zebra's operations. First, weakness in EMEA and the impact of the strong U.S. dollar against the euro was offset by strong sales growth in North America. Second, gross margin, which was within guidance, declined from the very high level a year-ago, principally because of mix and foreign exchange. Third, operating expenses include certain expenditures that we expect to moderate in the second half for the year. And fourth, the income tax rate reflects the implementation of a new European holding company structure for major non-U.S. affiliate operations. Let's review sales. For the quarter, sales increased 0.6% from $245.5 million last year to $247.1 million this year. The impact of foreign exchange, net of hedges reduced sales by $4.8 million or $0.05 per share. Sales for North America up 10% advanced $5 million on a sequential basis. During the quarter, we saw continued strength in our run rate business and we had broad-based sales into retail, manufacturing and transportation logistics customers. The impact of our growth strategies is evident as we achieved this growth, despite of a significant decline in sales to our largest retail customer. In EMEA with sales down 9%, sales growth in France, Spain, Turkey, Russia and the Middle East, partially offset the weakness in other sub-regions. On a euro basis, sales declined 1.5%. Notable sales included shipments of mobile printers to customers in rail, retail and utilities. Asia-Pacific was down 6% in year-over-year sales and up 8% sequentially. Strengthened Japan, Greater China and India support the sequential improvement. This activity offset a continued slowdown in Korea and other areas that were affected by reduced exports to Europe.…

Thank you, Mike. Within the uncertainty of the boarder economic landscape, Zebra continues to expand its industry leadership. Our multiple competitive advantages, including our range of innovative products and services, global scale and financial strength are driving more business with more customers worldwide. The strategies we have implemented are resulting in deeper, more strategic engagements with companies seeking to improve their operations. And the increasing diversity of our business, across products, geographies and customers, enables Zebra to effectively manage the business in good times and bad. As we look to the second half of 2012, we will continue to execute on those strategies to deliver profitable revenue growth. We have proven our ability to mange the business effectively through challenging times. This period is no different. We will remain agile and responsive in the current business climate as we continue to invest prudently for future success. Zebra is well positioned to drive growth and improved profitability. The success of our investments enhances our confidence in Zebra's future and in our capacity for shareholder value creation. The ongoing expansion of Zebra's geographic footprint and sales organization continues of pay off. In emerging regions, improved sales coverage has generated high growth in underserved areas. Since the end of 2009, we have increased number of sales and marketing personnel outside of North America by approximately 45% off a low base, with the best majority in emerging markets. This greater presence offers considerable opportunities for increasing business overtime. In North America and Western Europe, our sales growth with strategic accounts and share gain through distribution also demonstrate the growing success of our strategies to penetrate existing markets more deeply with our core thermal printing, Passive RFID and real-time location solutions. We're also optimistic about our future business in healthcare. LaserBand offer Zebra an outstanding platform for profitable growth in attractive market segment, as hospitals push to improve patient safety with implementation of more effective patient ID systems. The LaserBand acquisition also enhances the Zebra's position in supplies, which we have identified and articulated as an area of an intended growth. Finally, driving innovation is creating value for our customers and increasing investment returns for Zebra. We have increased a cadence of new product development as well as the efficiency of the product development process. New development models and processes are enabling Zebra to introduce products with unique features that truly differentiate us from the competition. Our new tabletop printers and our increasingly successful line of card printers are two examples of how superior products are enabling us to capture even more business opportunity. This concludes our prepare remarks. And I thank you for your attention this morning. I would now like to turn the call back to Doug for Q&A.

Thank you, Anders. Before we open the call to your questions, let me ask that you limit yourself to one question and one follow-up. In addition, Mike and I will be available after the call for any further discussions. In addition, our next call is currently scheduled for November 1.

(Operator Instructions) Our first question is from Michael Holt with Morningstar Equity.

I wanted a follow-up on your comments about the product mix shift with the DSPs fell pretty dramatically, down 16%. But of course as you mentioned, the unit shipment is up 19%. Seems pretty clear there is a product mix shift going on here. But I was wondering if you could elaborate are there any other dynamics at work? Are we seeing weakness in tabletop printers? Do you still feel like you have pricing power in the emerging markets relative to some of the other competitors or any color you can provide?

First with respect to the AUP decline that you saw that is almost exclusively driven by mix shift and foreign exchange. So substantial impact by foreign exchange, but also mix, we had the record quarters for both desktop and mobile printers this quarter, but they have lower price points than our other products and drove a big part of that mix shift.

And for my follow-up, I guess if we continue down the path of this mix shift and we've seen the current direction. How should we think about the impact to gross margin over the long term?

All our products have gross margins that are fairly similar, more similar than most of our investors believe. And as you look at this quarter, where we had a substantial growth in our desktop and mobile printers, we still maintained very strong gross margins in the year, 540% range. And that was also in the face of the fairly substantial reduction in the euro exchange rate.

Actually, if you look at the gross margin adjusted for FX, we reported 48.7% for the second quarter, we restated for FX to be 49.4% compared with 49.6% a year ago. So in reality FX really is a major contributor to our margin.

And we've worked very hard to make sure we continue to cost reduce our products and take advantage of the sale we have to protect the gross margin. That's something that's factors in for the company. And we see that this is very, very important to make sure we maintain that.

Our next question is from Keith Housum with Northcoast Research.

This is actually John Barta on line for Keith. And I guess a little bit of follow-up with the pricing. Is that more the older products coming offline and maybe a little steeper discount in international regions than just the newer products selling?

You mean why our desktop and mobile printers selling price.

Yes, with the average selling price coming down?

If you look at the average selling price within each product family, it was very stable. So there is really a mix issue from that perspective and we just had more larger deals in the mobile and desktop space this quarter. And the tabletop space was not quite as robust as they have been historically.

I think as Anders mentioned earlier that the introduction of the ZT200 has been very attractive in the market. So I think we're not expecting sort of a long-term negative reflection on our high-end products. We think that continued very attractive market for us.

And then, I guess just one follow-up, do you disclose the percent of sales with your largest distributor?

Yes, we do.

Next is Tim Mulrooney from William Blair.

Just looking at sales by region a little bit. North America came in stronger than we expected, Europe was pretty much as expected, but the Asia-Pacific region was a little weaker than expected. We know you guys are investing pretty heavily over there in sales and marketing. Was there a specific region that was weaker there? Can you tell us a little bit more about that region?

First I would say for emerging markets as a whole, we've talked quite a lot about that. We had great growth in emerging markets since we started investing in those and we continue to see very nice opportunities for additional growth. And this quarter we highlighted some of the EMEA emerging market regions like Russia, Turkey and Middle East, which grew about 15% as a group. Turkey has been a great market for us over last several years and grown very nicely. We actually had an event in Turkey, two weeks back, when both Mike Terzich and myself were there and we hosted 50 of our closest reseller partners there. And they were certainly very enthusiastic about what was going on in Turkey from an economy perspective, but also from what we are doing to help them. And they certainly seem to have great confidence around their future. If you look at the more specifically saying in Asia, China had great growth in 2010 and 2011. It was a good sequential growth this quarter, but the year-over-year growth was more modest. Here, I would say we're really seeing how our strategy is expected to work. We started by entering their country with manufacturing and I think we still have lots of good manufacturing opportunities pursue. Although, the manufacturing sectors little softer today based on a reduction of exports, primarily through Europe but also to the U.S. But we're seeing now the benefits of the growing middle class in China. And now, we're expanding into more retail opportunities, healthcare opportunities and more government opportunities, too. So we are expanding our base of business in these countries quite substantially. We feel good about the growth opportunities and we will continue to drive those strategies, but a substantial part of investments we've made. Most of those markets have already made. Now, I see that we have great opportunities for earnings leverage in these markets as they start growing faster. But just to get back to the question that was asked before, our largest customer at the end of June was 20.8% compared to 18.9% for the year ago quarter, and our second largest customer is 10.6% compared to 10.5% for the year ago quarter. Keep in mind, both of these are distributors. So as a result there really is no indication of certain end demand, it's just really sort of what channel our products are selling through.

And if I could have just one follow-up question, I think you mentioned that gross margin would have been 49.4%. Was that excluding foreign currency? In other words if gross margin contracted 90 basis point year-over-year with 70 of those basis points related to FX and only 20 basis point related to mix?

Yes. So actually I restated Q2 using the same FX rate that would have been affected, that was in place last year. Like our gross margin were gone from 48.7% to 49.4%. Now, keep in mind that adjusting our revenue and also the impact of our hedges. So the full FX impact really sort of puts us right back in the ballpark of where we were a year ago. And when you really think about the business, you realize that although Europe was tough, a lot of that was just exchange rates, so fundamentally the business was now off at March in Europe and given the economy, I think we feel good about that.

Next is Jason Rodgers with Great Lakes Review.

Looking at G&A, up 18% from the year ago, could you discuss the reason for that? And what do you expect from that going forward?

Yes. It was up for a couple of reasons. The first thing is we did expand a meaningful amount in helping putting this new legal-entity structure. Again, in past the circumstances changed that required us to sort of reexamine that structure, and we had to work with some tax professionals to help us put that in place. One of the things, I think you recall, we implemented our new ERP system. And we spent out little bit more in this quarter. I'd like you use the term stabilizing or enhancing the system to make sure it's meeting our needs. I'll let you know, this quarter it worked extremely well. We had more throughput at the end of the quarter than I think we've ever had in the company. So it's working well. We've spend money to make sure that went well. We also had, I think we pointed out M&A expenses that went through. And then lastly, we all had a little bit more depreciation on the software maintenance cost associated with the new ERP system. So with that that went up. Now, the point is as going forward, we don't expect to have as much spending on our stabilization of the ERP systems. So that should neutralize. We're not projecting the same amount of M&A spends next quarter. So all those things are sort of leading towards a more neutralized spend in the third quarter.

And then looking at CapEx, if you could share your thoughts on 2012, as well as next year? And then finally the tax rate, early guesses for next year.

I think what we have actually for our CapEx is, I think we're pretty consistent quarter-to-quarter. And we're spending roughly around, I think about $5 million a quarter. I expect that to go down a little bit next year, because I don't see a cap rising quite as much for IT, going forward. Now, as far as the tax rate, I think we talked about what we expect the tax rate to be for the rest of this year. I really don't want to get on next year, because by the way that requires me to sort of guesstimate, where profits are going to be by country and stuff like that is very sensitive to that. But my sense is for your model, I would just try to use what we are projecting for the second half of the year, use that for next year also.

Next is Vincent Tang from Lockwell Investments.

Mike, can you share your thoughts on future buybacks, any potential dividend program. Just look to get your thoughts there.

I think one of the things as we continue to buyback stock. I think we see great value in the company. We look at everything from risk adjusted basis. I will let you know that we spent a fair amount of capital beginning of the third quarter buying LaserBand, roughly $58 million. I don't see us stopping doing buybacks, but we will evaluate all of our alternatives and compare doing acquisitions with M&A and our buybacks and also investing in the company. So at this point, I would say we'll continue to do buybacks likely.

And how do dividends fit into that equation?

At this point, we're not paying a dividend. We talked about that a lot, because we think returning capital to our shareholders is important. We feel like we've returned a lot of capital through share buybacks and we expect, we'll continue to. But at this point we haven't decided to implement a dividend for the company.

My follow-up question is what are you seeing in terms of the M&A, how does that pipeline look?

Our M&A strategy have been changed from what it was previously. We first started by looking at making sure we use our resources in those activities that has the potential of generating the highest risk adjusted returns. And specifically with M&A, the first step that any deal has to go through this probably strategic outlook and make sure it fits our strategy. It enhances our ability to executing our strategy and accelerates the execution of our strategy. But I would say at this stage that we are interested in continuing to do modest sized deals. It looks like asset prices might be more attractive as we go forward, based on the economic outlook. And we have the financial resources to be able to, based on what's opportunistic and pickup good acquisition as they come along for reasonable prices.

Next is Tony Kure with KeyBanc.

Just wanted to ask about LaserBand, a little bit, obviously the healthcare pushes the strategy there. Just if you can provide a little color on the operating margin profile with LaserBand. I know you talked about it being immediately accretive. I'm sure you didn't take on that to do that so. Could you talk about what kind of accretion we're talking about, at least may be give some colors as far as the margin profile relative to Zebra overall?

We did state that it's going to be immediately accretive, but I would let you know, that was not the only hurdle we used for buying that company. We also mentioned that sales for the LaserBand was running on $24 million a year. The gross margin and an operating margin is similar to Zebra. I would say, it's quite better than our regular label business but not as good as the overall business, before what we invested in. We probably we had a very attractive return on capital for that investment.

So if this is closed then, is there some a couple of pennies of accretion, in factored into your third quarter and then obviously, it will be in the fourth quarter also then?

Well, we do plan holding on to LaserBand through the fourth quarter. Obviously, given your margin similar to Zebra and we're running at $24 million annual sales, obviously that would be naturally accretive and naturally we've baked into our forecast.

And just one quick follow-up on the strength of North America was pretty strong, and I think the comment was made despite weakness with the largest retail customer. Was that a too, just a second quarter event? And that may be pushes to some volume out to the second half or if you can just provide a little color, is there something else going on as far as that customer?

I'll answer the overall kind of North America question, first. Now we can how deep we kind of go into the specific question about customers. We saw a very broad based strength in North America, across all verticals, basically. But we had a normal large deal flow in the quarter. We started to see nice momentum from the strategic account sales initiatives we took in place last year. Now those we mentioned that on the last call and we will kind of say this call that the customers that we have identified for our high touch sales organization, when we exclude our largest customer, are growing very nicely. And they're giving us nice insights into their requirements and better understanding their needs. We have some ancillary benefits from their perspective. And I think it's been a good story for us over last year. Now we've had four consecutively stronger quarters in North America with the 10% growth, and it's a long time since we had 10% growth in North America. So feel very good about that. And manufacturing was vertical that did well. Retail is a second tier. Retail have started to invest more in technology to help enhance both the customer experience, but also to improve the operational efficiency in their stores. So the output for North America, I would say, it's still some uncertainty as to what the economy is going to do. But we are optimistic about our position and we feel good that investments we've made in strategic sales and strengthening our vertical marketing activities it's going to drive good growth for us in retail, in government, in healthcare. And Mike, if you want to add any.

Tony, just a couple other points, I think Anders has covered most of what's really taking place in North America. In the prepared comments, we noted our very solid run rate business in North America that was principally driven from the manufacturing warehousing distribution segment of our business. Tier two retail, as Anders said was very strong and this is particularly encouraging because our tier one retailer was significantly down on a year-over-year basis. And so the offset was very positive. We had roughly 30% growth in the healthcare space in North America, which was fueled by a lot of the wristband applications and this kind of further cements the attractiveness of the LaserBand acquisition. And so it's been a pretty diverse mix. It is the second best quarter ever. It is the strongest quarter since the fourth quarter of 2006 in North America.

(Operator Instructions) Next is Travis McCourt with Raymond James.

Anders wondered if you could talk a little bit about where the LaserBand acquisition brings you in healthcare vertical. Are there distributions synergies or cross-selling potential with that product line? And then a follow-up for Mike on the cash question. How much of your cash is useable in the U.S. and how much is potentially stranded overseas at this point?

So first on LaserBand. Healthcare has been a strategic vertical market for us for sometime. It's been our fastest growing vertical market for a probably last five years. It's still doesn't have the same provenance as manufacturing a retail but it's been a very attractive market for us. And Q2 had been great growth in our wristband sales, globally, North America specifically, but also globally. So when we looked at LaserBand, we saw our great fit, a company that can really help to strengthen the Zebra platform. We have been exclusively dealing with external printing solutions and LaserBand has both thermal and laser printed wrist bands. So we saw a great opportunity to basically, more offer broader solutions, be more neutral to when we talk to our customers and whatever preference they have, we could supply. And we accessed a bigger platform so we can continue to expand off. So we thought that was very attractive. And they have very strong position in North America. Their position outside of North America is know where near to strong, so we thought we had great opportunities to leverage our strong international distribution capability to take them into Europe first and also to Asia and back to America.

And then to your question, at the end of the quarter we have about $388 million of cash investments, and roughly $140 million of that is half overseas. I would argue. We don't use a cash conclusion trap. We really think we have some attractive investments overseas that we plan of utilizing. And that's one of the reasons we invested in restructure and our legal entity structure overseas to build investments. We have talked about supplies and stuff overseas trying to build and so we expected to utilize some of that cash overseas, but specifically we $140 million, right now.

I want to add a little bit of color to Anders comment, because I think that the wristbands phase in the healthcare market for us is very exciting. And I want to share with you what we see from a mandate perspective. There is a number of mandates centered in the United States, around the electronic health record. This has requirements for computerized physician order entry, and closed loop medication administration. When you look at the mandate and the result of that, it drives a lot of opportunity for bar-coding and for wristbanding. And in the United States approximately 30% of those hospitals have started to deploy, 70% have not been those. In those 30%, that have deployed, they've really just deployed at the single application layer. So the combination of a thermal portfolio from Zebra and laser portfolio from LaserBand really introduces a wider range of opportunity to us. You go outside the United States and some of the phenomenon we're seeing in the emerging markets, where we've talked a lot about that we have talk a lot about the rise of the middle class. So what's happening in those marketplaces is the demand for improved healthcare. Healthcare safety, healthcare services, is on the increase. What LaserBand bring us in those markets. We can leverage for Zebra International infrastructure, but it gives us an opportunity to introduce wristbanding where they don't have to purchase capital equipment. This effectively works off the already installed laser printers that they have in their hospital organizations. So it's a low cost of entry introduces wristbanding into those hospitals. We think we're going to be able to follow-up with thermal solutions where they are appropriate. So the sum of the two is a really exciting proposition for us.

Maybe the last thing to just say on LaserBand also, that we're very excited about the team that we've got from LaserBand. There is a small team, but they are fully dedicated to the healthcare space. So they're kind of experts in that. And we think we can build a nice organization around. And really take advantage of their vertical expertise.

The other thing, sure I'd say is these are wristbands that are patented, which you really wouldn't expect in sort of this market. But it is something that's a real competitive advantage that we thought was worthwhile.

And Mike, in terms of the follow-up on the cash question, does just the new organizational structure changed at all where the incremental free cash flow end ups landing U.S. versus international?

No, it really doesn't. Not really that. It really sort of allows us within our international organization to more freely move capital around outside North America and cost effectively invest it overseas.

Next is Greg Halter from Great Lakes Review.

Back on the wristband market, I wondered if you could discuss the total size of that market and maybe what share you guys have currently, and what it's growing at.

It's really hard to talk about the size of the market in that respect. I would be comfortable saying that between LaserBand and Zebra, we have a very, very, very strong position when it comes to the printed wristbands, but there is also other wristbands that are handwritten and are quite not yet part of the electronic health record mandate. So I think we believe it's a very large market and growing at a very healthy pace. But I don't want to talk about what market share we have.

I would say, Greg, the other piece of that is, if the Andres point, there is a good portion of that market is unprinted today. And when you look the significant amount of population that resides outside of the United States, there is a tremendous amount of opportunity.

And would you anticipate working in conjunction with the thermal laser, or do you expect any cannibalization of your product with theirs or does it really not matter?

No. it's actually, we see them being very complimentary. There are certain applications within a hospital that thermal maybe get better solution. The laser solution, Mike Smiley mentioned, we have a lot of patents around that solution that we've acquired. One of the interesting applications is the laminated band, so it has a very durability content. So it resists a lot what happens in a hospital environment. But the two solutions in combination will find themselves in the same hospital in different applications. But what we want to leverage is the fact that on a combined basis, we become a much more significant brand in the wristbanding space. And we're going to leverage the sales field and infrastructures that we've acquired through LaserBand to drive a lot of sales forward.

And one other quick one, if I could sneak it in, are there other things that you're doing in hospital environment that you could lever off of your own products as well as LaserBand's?

Yes. And when you think about the portfolio that we have, when you think about from a hospital supply chain perspective, hospitals offer an enormous possibility for us. And tremendous potential from just simple bar coding at various stages of critical assets all the way through real-time location of those assets, right. So one of the other ultimate opportunities is when you look at all the capital equipment that deployed in a hospital, that the hospitals are very challenged on the ability to find it. Ultimately, locating it quickly and understanding the condition that that piece of equipment is in and is it available for use becomes another longer-term opportunity play for us. So there are number of places for us to go. We can extend other cartridge like thermal applications in non-wristbanding solutions. So when you think about medical specimen labeling, laboratories, things of that nature. So we see the hospital ecosystem as very under penetrated, very underserved, and this is really our first foray in establishing a broader position.

Next is Rich Glass with Lockwell Investments.

Can you maybe help us understand what confluence of events maybe it would take to get you guys to be more active on the buyback? What are the impediments here, unless you're picking up acquisitions in big way in terms of doing meaningful sizeable acquisitions, which I think with the old strategy and not in the more recent strategy, given what's going on around with your evaluation? How can you justify sitting on the pile of cash that we've been sitting on for quite a while, as the stock performance has not been so great for a while, as well and it would seem to be very accretive to put the cash to work. And well as we've seen in any matter given that it's earning nothing. So doing an acquisition here is accretive, but buying back your own stock is certainly lower risk than doing an acquisition of an outside company. So what would it take to get more aggressive on the buyback or maybe do something meaningful like a Dutch tender?

If you look at our performance in buybacks over the last, I'll say, five years. I think we've bought back about $750 million worth of equity. That's a pretty substantial commitment, I think from our side. At least, I thought if it does that. And we've been able to step-up and down our buybacks based on what we see in the markets very substantially. If you look at Q3 of last year, we actually brought back 1.8 million shares in one quarter. We step down a little bit after that because our share price was performing very nicely in Q4 and Q1. In Q2, we were a bit more cautious as we were working on the LaserBand acquisition. But we're still committed to buying back shares. And I don't think we will say anything has changed with our strategy today.

Next is Marty Moser with Northwestern Mutual.

I guess, kind of along those same lines, free cash flow has been really good the first two quarters. Maybe, talk a little bit about the second half and then the FX hit that you're assuming in your guide for next quarter.

The FX we're assuming, again, just for the third quarter $1.23. I don't know if it's going to be fair but were assuming $1.23 which obviously impact on us there. As far as deploying cash flow, again, we've invested $58 million in LaserBand. We realized, we still have a fair amount of capital. And we planned putting it to work and doing share buyback. It's not but we're not doing that, we're even. So I see ourselves continuing to do that but I will argue that we have talked about some attractive ways to continue to build the business. And we evaluate those on a risk adjusted basis, just sort of to see how we look at those. We do feel the LaserBand business definitely is an attractive investment, relative to buyback the company stock. But I don't see us stopping buying back company stock, going forward.

I guess, the question really was you had like $85 million in free cash flow in the first half. I assume that goes down somewhat in the second half, I'm just asking how much?

I don't know that. By the way a good chunk of that was a new proportion that was inventory reductions. And by the way I think we still have the opportunity continue to optimize our inventory. So my sense is we will have a good second half. It may not be quite as strong as the first half, but pretty close to that. Historically, our cash flow in the first half pretended to be weaker than the second half, as we had a number of tax payments, there were due. So we still expect good cash flow for the reminder of the year. And the other I forget to mention is we also had a settlement also had settlement of the net escrowed funds for the sale of Navis in the first quarter but, is also in second quarter. Close in the second half.

And then, if I could just maybe talk about Asia and Latin America trends as you see them. Latin America held up pretty good, but it sound like you didn't get the big projects. And Asia has just kind of been overwhelmed with the contract manufacture side. I'm wondering when that that might change?

So I think in back to what I talked a little bit earlier. We've had various attractive growth rates from our emerging market investments. And in Asia, we've seen great performance out of China, India and other countries over the last three years. But the economic situation in Europe is putting up a bit of a damper on the export oriented business. So that's impacting China to some degree and it's impacting Korea for us. But the other parts I would highlight here would be FX, which is an important factor in many of these countries. So we sell in dollars to them and they sell in their local currency to their customers. So two countries that tend to be particularly sensitive to FX is Brazil and India, and both the Riyal and the Rupee, have weakened substantially against the dollar over the last three months and this year. So that means that our customers are a little more cautious about how to engage with billing inventory or going after deals that they've been. They want to make sure that they protect their margins. But I'd certainly say that we feel very good about our overall strategy, and our ability to continue to grow positively and expand our leadership in the industry. And I think even in the last quarter, where life was a bit, we feel confident that we've continue to extend our leadership and gaining shares in the industry. And it's obviously, in absolute terms it has been quite as attractive, but I think on relative terms, we didn't perform in very well.

That was our final question, ladies and gentlemen. I will now turn the conference over to Doug for closing comments.