Kathy Madison - Investor Relations Zeynep Hakimoglu - President, Chief Executive Officer and Chairman Narsi Narayanan - Senior Vice President of Finance and Corporate Secretary.

Lisa Springer - Singular Research Chip Saye - AWH Capital George Melas - MKH Management Dennis Van Zelfden - Brazos Research.

Good morning, everyone, and welcome to the ClearOne’s 2016 Third Quarter Financial Results Conference Call. This call is being recorded. At this time, for opening remarks and introductions, I would now like to turn the call over to Company’s Investor Relations representative, Ms. Kathy Madison of LHA. Ms. Madison, please go ahead..

Thank you. Welcome everyone and thank you for joining us today for the ClearOne 2016 third quarter results conference call. On the call today are Zee Hakimoglu, President and CEO and Narsi Narayanan Senior Vice President of Finance. Please note this call is being broadcast live on the Internet at www.clearone.com.

And a playback will be available for at least three months. Before we begin, I would like to make a cautionary statement and remind everyone that all of the information discussed on the call today is covered under the Safe Harbor provisions of the Litigation Reform Act.

The company’s discussion today will include forward-looking information reflecting management’s current forecast of certain aspects of the company’s future, and our actual results could differ materially from those stated or implied. Today, we will open with review of financial highlights, the growth strategy and operational accomplishment.

Then Narsi will provide a detailed discussion of the financial results. Prior to opening the call for question, Zee will return with the summary and the company's vision and outlook. Now, it is my pleasure to turn the call over to Zee..

Thank you Kathy. We have worked hard to make ClearOne the only player and professional AV that brings the full value changes to the AV conferencing collaboration and network screening market. We finally achieved this through strategic acquisition and internal technology development.

We were not there a year ago, but we are confident we are there now and have yet to realize the full potential of ClearOne. We have enhanced our offerings, which have expanded our total addressable market, while our initiatives have started bearing fruit in the form of accelerated growth in video revenue.

We expect our new audio solutions will also contribute to drive 2017 growth and long-term shareholder value. Regarding the third quarter 2016 financial results, revenue was $12.9 million compared to $15.9 million a year ago.

While a portion of the decline was not surprising reflecting the transition to our recently introduced next generation audio conferencing platform that caused some integrator to delay purchasing our products, it is still disappointing.

Nonetheless, we will not allow the near term challenge to distract from our progress and we are delighted with our video products. In fact, Q3 sales for video has more than doubled compared to last year’s third quarter and delivered eight quarters of growth out of the past nine quarters.

For Q3, the company reported non-GAAP gross margins of 62% and remain profitable with non-GAAP net income of $2.0 million. We continue to create shareholder value with our dividend and our stock repurchase program.

ClearOne continues to drive ahead executing on our strategic initiatives, all of which create underlying value for the company every quarter and every year. For example, we received two new patents in Q3; the first patent relates to spatial audio technology, an exciting new frontier for conferencing.

The benefits of this patent can be used to improve intelligibility and reduce listener fatigue in the conference. The second patent relates to multi-point video conferencing technology.

It improves the performance of a video multi controlled unit known as an MCU by enabling significant computational savings that can be important for cloud based video bridging system. We are forging ahead with the utmost confidence in our products, people and the execution of our strategy.

We are enthused by the responses from our partners who have been evaluating our next gen audio platform and who are giving phenomenal reviews, which match the enthusiasm of our sales and marketing team.

The company focuses on two critically important core pillars to win and grow; the first is providing a compelling business proposition to target and intercept the quickly evolving AV market with differentiated and competitive technology to meet new market needs.

The second is targeting the business need of our AV channel practitioners; the integrators and consultants who are the key to selling and servicing this evolving market. I'll provide more detail on this focus of ensuring ClearOne is meeting the evolving market need.

Enterprise meeting rooms are undergoing significant changes; the mix of workspaces between large, medium and small rooms is changing in favor of increasing the number of smaller spaces. AV technology expectations are also changing to meet the myths of these new rooms.

On top of this, the increasing number of workers outside the traditional centralized workspace has become an important factor driving organizational collaborated and communication investments. These workers also need ready and easy access to follow the conferencing, collaboration and network-streaming tool.

In the past enterprises focused on designing elaborate Boardroom equipped with the latest most expensive technology for a limited use. These rooms are still being designed and continue to grow; albeit more sensitive to cost.

But as I mentioned conferencing and collaboration needs have extended the smaller workspaces called huddle rooms; these huddle rooms are used for ad-hoc and actual conferencing in collaboration. Some pundits in the industry say the demand is driven by millennial and is growing in double-digits.

Huddle rooms are equipped with audio, video and display technology, like their elaborate large room counterparts, but needs to be scaled to meet smaller spaces and lower budget.

The investment for scaled huddle rooms is attractive for large enterprises as well as the lower investments bring these scaled solutions now within the reach of small and medium businesses. The proliferation of huddle rooms adds significant opportunities for ClearOne.

So, how has ClearOne positioned itself to win in this evolving market? We are bringing our highly disruptive scalable and cost effective audio/video conferencing and collaboration and streaming products to more workspace and more businesses worldwide.

I’ll review a few great - our new Collaborate Versa product embraces the idea of a scalable huddle room and encourages to bring their own apps known as BYOA concept.

Our new Collaborate Pro video conferencing and collaboration products also scale from huddle room to boardroom to cloud without compromising quality and address the market trends transition in a way from high cost, big-iron video conferencing equipment to low cost appliances and cloud base services for this tool.

We also have introduced budget friendly encoder and decoder technology to expand our IP base network media streaming solution VIEW; these are scaled for extension to the huddle room and will ship before the end of the year.

On the audio side, a competitively price and highly scalable new flagship CONVERGE Pro 2 platform along with our complimentary microphone especially the new Beamforming Microphone equally address the demand of this evolving room mix from huddle to large scale auditorium. All these new audio products will ship before the end of the year.

Clearly, ClearOne is perfectly positioned to take advantage of the AV markets global growth opportunity while enlarging its dominant in the traditional audio conferencing environment. Now on to the second pillar that servicing need of the channel AV practitioner who sell and service our solutions in this complex evolving market.

In fact, the AV consultants and integrator hold the key to successfully introducing and driving penetration of our solutions for us to succeed. We strive to build outstanding channel relationships and prioritize innovation that make ClearOne very natural choice as their preferred partner.

Today, ClearOne is the only player that brings the most complete suite of complimentary and coordinated solutions to the Pro AV market that can connect, interoperate and scale across enterprises of any size, for any workspace, for all conferencing collaboration and streaming application.

Our complimentary solutions were design from concept stage by ClearOne engineers to seamlessly and easily integrate with each other.

This helps AV consultants and integrator to simplify their solutions selection and design, secure interoperability, mitigate unforeseen installation problem, eliminate multiple vendors passing the book and avoid post installation [Indiscernible].

By using ClearOne AV product from soup to nut, the practitioners can design and install project quicker and easier, ensure customer satisfaction, get paid better and preserve profitability we call this the ClearOne value chain. This chain has helped us to secure some great wins. I’ll review some of our successes in Q3 now.

For our video conferencing and media collaboration products wins included two Fortune 100 oil and gas companies, a very large healthcare organization, a Fortune 100 sports apparel company, a Major League backed football team, two Fortune 500 technology companies, a Fortune 500 automobile company, a couple educational institutions and projects for U.S.

and international government. For our network media screening video product VIEW, wins included a Major League football team, a Fortune 500 defense company, a Fortune 500 automobile parts company, a couple of hospitality companies; as well as a couple of international government projects.

For our wireless mic wins, these included a Fortune 100 technology company, a Fortune 100 healthcare company, a Fortune 100 automobile company and two space research organizations along with the large government project.

In addition, we have a sampling of known opportunities for our just launched CONVERGE Pro 2 audio conferencing platform and Beamforming Microphone 2 that includes a very large project with a Fortune 100 automobile company for which we have already secured a booking or a portion of the project.

Also in terms of opportunities we have leading software and technology companies including Fortune 100 companies in these, multiple educational institutions including an Ivy League University, a Fortune 100 capital equipment and management company; a Fortune 100 metals company.

A Fortune 500 bank, a Fortune 100 entertainment company; a Fortune 500 pharma company; a top 10 ranked hotel group; a large utility company; two energy companies; two prestigious consulting companies; a defense research company; and a foreign government project.

This sampling reinforces our confident in our strategy and the continuing success of our product. In summary, we have confidence in our new product sets, and our profitability gives us the ability to invest in the business and continuously build value and we are committed to doing just that. Now I'll turn the call over to Narsi..

Thank you, Zee, and good morning everyone. Before I begin, I would like to note that I will be discussing certain non-GAAP financial measures. A reconciliation is included in our earnings release. Now, I will turn to our financial results for the third quarter of 2016 compared to the third quarter of 2015.

Net revenue was $12.9 million compared to $15.9 million; and according to an agreement, we recorded three quarters of licensing fees in Q3 of 2015. Year-over-year video product sales more than doubled.

However, this was more than offset by the impact of the global economic slowdown especially in the Middle East, Northern Europe, Asia Pacific and South Africa; and the transition to our next generation professional audio conferencing platform, which we launched in June.

Here are the year-over-year revenue change in percentage by region; America down by 15%, Asia Pacific including Middle East down by 23% and Europe and Africa down by 38%. Year-over-year revenue changed in percentage by product, professional audio down by 25%, UC end-points down by 26% and video up by 109%.

Sequentially, revenue grew 8% compared to $12 million in the second quarter driven by growth in video and professional audio conferencing products. Notably, our video product sales increased in eight out of the nine most recent quarters.

Non-GAAP gross profit margin were 62% compared to 64%, the decrease in margin percent reflects an unfavorable shift in product and licensing mix offset partially by a lower inventory obsolescence costs in 2016 Q3.

Non-GAAP operating expenses were $5.5 million down from $6 million, reflecting lower commission to independent agent and lower trade costs. Non-GAAP operating income was $2.5 million compared to $4.2 million. The effective tax rate was 21% compared to 32% a year ago.

Non-GAAP rate income was $2 million or $0.22 per diluted share, compared to $2.8 million or $0.30 per diluted share. Non-GAAP adjusted EBITDA was $2.7 million compared to $4.4 million last year. Turning to our year-to-date analysis, we see the same factors mostly impacting our results.

For the nine-months, ended September 30, 2016, revenue was $37.9 million compared to $43.5 million for the first nine-months of 2015. Non-GAAP gross margin were stable at 54%, non-GAAP net income was $5.2 million or $0.55 per diluted share compared to $6.4 million or $0.67 per diluted share.

NON-GAAP adjusted EBITDA was $7.7 million compared to $10.5 million. Turning to the balance sheet, we continue to be very strong. Cash, cash equivalents and investments were $40.1 million at September 30, 2016 up marginally from $39.8 million at December 31, 2015, still without any debt.

Once again, we paid dividend and $0.05 a share was declared and about $450,000 was paid in Q3. On November 1, dividend of $0.05 per share of Q4 was declared. Further, during the quarter, we purchased approximately 92,000 share for about $1 million.

This brings the total since March 2016 in this latest stock repurchase program was launched to approximately 466,000 share amounting to $5.1 million. We intend to continue to repurchase our shares in open market subject to price, volume and other Safe Harbor restriction. Thank you. Now, I will turn the call back to Zee..

Thank you Narsi. We now have critical strategic math to dominate the AV market, we are the only player in the Pro AV market that can connect interoperate and scale across enterprises of any size, for any workplace, for all conferencing collaboration and streaming applications.

Through our outstanding channel relationships and prioritization of innovative product, we are well positioned to take advantage of the global growth opportunity by expanding share in the traditional audio conferencing environment and then network media streaming market.

As a distinguished brand bringing the full value chain to the professional AV market, ClearOne is well positioned to return to growth in 2017 while our strong balance sheet will enable us to pay dividend and repurchase stock and invest in its future continuing to create shareholder value.

We look forward to reporting our progress in the quarters ahead. Thank you. Operator we may now open the call for questions..

Thank you. [Operator Instructions] And our first question comes from Ian Corydon with B. Riley. Your line is now open..

Hi, this is actually [indiscernible] on for Ian; thanks for taking my question.

Could you please provide a revenue breakdown by product category professional, communications and video please?.

For Q3 the revenue mix for Pro was about 78%, UC was about 11%, and the video was about 12%..

I'm sorry the last one was 12%?.

Yes, video is 12%, yes..

Okay thank you.

Do you think gross margin can return to the levels you achieved in Q1 and Q2, and in Q4 or into next year?.

We think in Q4 we will be able to maintain our year-to-date [Indiscernible] margin actually..

Okay, and then the year following?.

The year following, we have launched a new CONVERGE Pro 2 platform, the margins for CONVERGE Pro 2 platform is marginally lower than our current set of products; so the gross margin mix will depend on several factors, including the regional contribution types of the project, volume all those things.

But it's competitively priced and it's profitable to be marginally lower than the current set of products..

Do, you have any idea platform will comprise what percentage of overall revenue?.

Can you repeat? Overall revenue I didn’t not get the first part?.

Yes. So, my interpretation is you are saying you are not 100% saying, because there is new products coming online that has a lower margin and I'm just asking is there any sense that we can get what revenue contribution you are expecting for platform..

When I was talking about long-term the CONVERGE Pro 2 platform will be a flagship product. Remember, our current professional product line contribute close to along with microphones, they contribute above 70% of our revenue that’s the entire professional audio ecosystem. So that would be our flagship.

So when you talk about the margins, it affects the overall gross margin for the entire company actually, it's not just a fraction..

Okay, that’s helpful thank you.

Last question from me is $2.4 million the right quarterly SG&A run rate that we see, you are thinking about going forward?.

We are currently benefited by a lower commissions that’s due to lower turnover. It's pushing up our commissions are linear to our revenue, so when revenue goes up you will see increase in that part of - there is some market been actually..

Okay, that is helpful.

And with revenue expected to increase in 2017, you are thinking that SG&A will rise?.

Yes..

Okay. Thank you..

Okay..

Our next question comes from Lisa Springer with Singular Research. Your line is now open..

Good morning. Zee, you gave us view about what is in pipeline in terms of interest for the Fortune 100 companies.

Of the companies, you talked about what is the mix between that have been existing ClearOne customer service switching to the new technology and companies that are totally new customers ClearOne?.

That’s a great question, but I’m afraid, I don’t have the answer to that. We have been selling into Fortune 100 and 500 companies basically for the life of ClearOne, so we will always continue to do that.

I can't say these are mix, but I can tell certainly that - maybe the more important question is that we have had an opportunity to sell these video products into some of our existing customers and that’s important to us..

Okay.

And the other question I wanted to ask you, you mentioned the two new patents, when might we see products that are incorporating in technology from those patents?.

In those patents, we are actually using some of the technology in our video products that’s one, and in many of our patents for the most part of the used patents in our product, because we come up with the ideas early in their development. But on the special audio, I would say that those are patents that are in development..

Okay. Great, thank you..

Did I answer your question?.

Yes..

Okay..

[Operator Instruction] And our next question comes from Chip Saye with AWH Capital. Your line is now open..

Hey thanks for taking my question. Good morning.

Are all of the SKUs shipping now for the Pro audio to new upgraded next generation product?.

No, we have 10 SKUs and we will be shipping all SKUs by the end of the year including the Beamformer..

Are we shipping the Beamformer now?.

We're not shipping the Beamformer 2 now; it's along with our CONVERGE Pro 2..

Okay.

Secondly, you went through a lot of wins I think or examples of customers; can you talk about in the video business the grow, what are some of the used cases you were seeing for the business you sold this quarter?.

Well the used cases for video, media collaboration and video conferencing are really exactly as I described, which is they want a low cost solution in smaller rooms for media collaboration. In some cases they love our camera, in some cases they love the entire solution; we offer both cloud based end room appliances.

And larger organizations people still needing rooms as I mentioned; and they have workers outside the facility, but they still have facilities with room where they want to meet; and our price points and our functionality is second to none..

Okay.

I was wondering because I made some calls to the channel and I heard, your UNITE 200 camera is doing really well and I just wanted to know if that would be for the huddle rooms that you discussed?.

It can be used for the huddle rooms and it is used for smaller rooms; it can be; it depends on the application; but you certainly need very good audio and a good camera for any function, where you are going to be doing especially conferencing.

It also can be used with the network media streaming solution; because an IP camera which it is very powerful by the way, it's can also be a store for streaming applications such as security or video, training, video, schools et cetera., so it's really cost the device for all video applications..

All right. This is for Narsi I guess, thanks for that Zee.

Narsi the shares bought back in the quarter, I think you have purchased 226,000 shares, in the quarter is that right or is that since the beginning of the program?.

No, no, we have purchased 92,000 during the quarter; I think it was like 456,000 so far since March when we started the program actually. So, total….

What was the price paid for the shares bought in the quarter, do you have that?.

It's about $1 million, about $11 per share..

Okay. I appreciate it. Thanks for taking the questions..

Thanks Chip..

Our next question comes from George Melas from MKH Management. Your line is now open..

Thank you, good morning Zee and Narsi, how are you?.

Good morning George..

Hi George..

Good morning. Zee, thank you for the color that you provided on the deals and on the pipelines.

Can you have me understand a little bit better the pipeline, you talked about one potentially very large deal where you have some bookings? The deals that you mentioned in the pipeline, are these deals that your manufactures rep or you're working together with the borrowers, can you help us to explain that?.

Well, the way we work is we have a model, which includes distributors, value added resellers and own sales team as well as our own manufacturing rep. In some cases, our own sales guys may approach to direct customer and know about it, and then we hear that with a distributor.

In other cases, manufacturing rep may know of a project and lead that project and our sales guys may know about it. It is not a 100% cross over. Right now, I would say that the distributors are not as deeply involved because we have not been stocking products yet..

Okay.

And those customers that or those deals that you mentioned are the deals that have that they have committed to you or that you are working on in a competitive situation?.

Of course, there is hardly any situation and that I can't think of one, but it's not competitive. But we have broadened the demo unit that we have, that we distributed to our sales.

And the demo units we have shown and retrieved, and it looks like they have made pretty growth commitment that when shipping product comes, it looks like they have somewhat committed that will be a ClearOne product.

Of course, anything can happen but these were opportunities that we felt confident about and that we are sharing with you because we think it is important for you to know that the market has embraced on new solution on new platform..

Okay.

And so how do you see the uptick of that product compared to other product that you brought to the market especially the first generation CONVERGE Pro?.

Well, the first generation actually we have had five generations. We have the AP with ZAP, the CONVERGE Pro 1 and now CONVERGE Pro 2 that they were probably modeled before that before my time. Nevertheless, we have a very solid footing in the Pro audio conferencing installed market.

And we anticipate that we will establish our footprints as we always have, of course there are more competitors in the market, but we think that we are going to be adding features; and as I have said, the entire value change that makes our product extremely attractive. I’ll say also that our Beamformering 2 is very unique in the market.

We have competitors trying to, basically, duplicate our Beamforming 1, which they had not succeeded at all. In fact, it was the basis for one of our win recently for the CONVERGE Pro 2 that we spoke about. So, we are very far ahead in terms of technology and the value to the integrator consultant.

And some of it is product, but some of it is brand and value as I mentioned profit, profitability, support and that has continues with AP 2..

Okay.

And is the Beamforming 2 is that going to be attached to the Pro 2 or you are going to sell it separately?.

No, the Beamforming 2 like it's earlier version Beamforming 1, it's sold with the AP 2 because there is advanced functioning between the two which makes its performance superior in the market..

And then a quick question on your audio distribution product, the Matrix, I think that is went back to the drawing board, is there any sense that you're going to bring that to market in 2017?.

Yes, in fact I didn't mention it on this call [Indiscernible] but I must say. But we're still working on that product. The product hasn't really gone back to the drawing board.

We did release the core element which the Matrix switch fabric for that solution, and we're working on the low cost endpoints which again will scale, and we will announce that product at next InfoComm with a firm shipping date..

And that's the next InfoComm that's going to be in next year?.

Yes, we're hoping to be shipping near that time maybe few months later, but it's certainly on the drawing board still..

And then regarding the video product, to what extent are those sold separately from your audio, I mean to different customers or to what extent are you buyers sort of leveraging their relationships with their customers and basically adding -- selling the video and the networking; the streaming as well?.

The answer is, we're going to our existing customers of course for introducing our new video product. But note that our video product spans from cloud all the way to a professional video system, which includes our mixer, our Beamforming Mic, it can also work with our Ceiling Mic.

So when they buy these units, we pretty much integrated at a SKU the audio component. For example if here in a room and you want to buy a low cost appliance, we've already got the audio component added to it. So, they know what's for their audio, now we're getting to have the notes for our video.

But the SKUs are complete; audio, video, control et cetera..

And then maybe I didn't ask my question correctly, that how, maybe something like what percentage of your video sales are to customers that don't have your audio? So, is it to new customers as opposed to leveraging the end customer relationship that you or buyers have?.

I'm afraid I can't say -- we've been in business so long, and we don't always have exposure to every end customer especially if they're smaller, the distributer will ship it themselves, and we to the integrator who will then ship it to the end customer. So, we don't have full exposure to every end customer. So, I couldn't answer that.

But as I mentioned before, we're pleased that some of our Fortune 500 and 100 customers have taken a look at our video products and have purchased..

And then just final question, does Beam manufacturing transition is that complete and the inventory scrap is that because of a product redesign or what was the reason for that?.

Narsi, can get that one..

Actually, it's a combination of few things. One is of course the type of raw materials and things that we used in our facility. We find that it would be easier and better for them to source their own things and version something is changed, and we don’t get to use those product, that’s one reason.

Second reason is when you go through the list of things that we have always been using and when you go through full revamp of trying to tear out the shells and looking at what to be used, what not to be used. We find out things that are no longer viable, it's more -- so you go through that process.

So, it's a complete investigation of what and something are also got demised actually when you go through several transact issues. Some of products are move to Salt Lake City. Some are moved to our outsourcing facility at outside. We are inspecting them and ship. You lose some parts to the processors. All this things have happened.

But the transit it still has been smooth and it's done actually, manufacture is going fine. We are still going through inventory kind of ramping up in terms of -- we introduce a lot of different frequencies and things. So, we are aligning our forecast and production to meet those demands.

It's a little bit of a challenge, but the production is still running smoothly actually..

And our next question comes from Dennis Van Zelfden with Brazos Research. Your line is now open..

From a big picture standpoint, do you see any laid up in the global headwinds such as currency, economic conditions et cetera that have negatively impacted revenue over the past several quarters?.

Well, what of course it's subject is the same for any business that is interested in making capital expenditures to grow their business. In the Southwest, we have the challenge with the oil companies. Their investment in the capital equipment is less than it had been oil refine high.

Eventually, they will retool their business models and everyone is retooling their business models. So, that they continue to grow based on the conditions that we have. Europe, Northern Europe was a little bit impacted obviously more than little bit impacted when the Brexit fear was going along.

Southern Europe has been in a malaise I think since the beginning of their recession. And quite frankly, I don’t see a big change their.

The Middle East was doing very well with oil, but again they are putting investment not only in oil infrastructure, they are repositioning so that they can add other industries for their survival and they are doing that in Dubai for example which is hospitality and other things.

In China, the government cracked down on corruption with very-very severe and people and businesses were very careful in constructing new projects. The building construction is slightly slowed, more than slowed, I should say. So, overall, every economy has been impacted by their own specific issue.

But the good news is as I think the companies are adjusting to it and for the ClearOne offering, we do not offer -- but while we have high end systems everyone of our solutions from soup to nuts gives us the ability to offer a complete suite from audio to video, upscale solutions based on their investments.

The entire huddle room concept is one that sort of a new economy concept where they will put more room, lower priced, so that they can get better efficiency out of their organization. So, I think we've got the right products at the right time for today's economy to make the most of it and we see growth ahead..

Well, I mean, it does seem like your feature, your performance, your technology, your value, and so on and so forth are in fact better than what's out there, but yet you're still not immune to what's going on in the world?.

No, we're not immune. We could only..

Okay, what..

Go right ahead..

Do you see any light at the end of the tunnel with respect to those global headwinds? Those things that you mentioned, are they getting better? Are they getting worse?.

I wish I was the predictor of the economy. I'm not, but I can say that given the conditions we have today, things of course they improve when only get better. But we have the right solution, if they get worse, I can't, I should not say if they get worse.

But I do believe, we have the right solutions to scale and the tool that businesses still need to survive. Let me give you an example, our COLLABORATE Pro, say 600 or 300; it's what you call an arm, Swiss Army knight.

In one solution that ranges in size from say $5,000, $4,000 all the way up to $11,000, as opposed to prior systems that could cause the $100,000 and more. We include video conferencing, display technology such as wireless presentations, solutions such as barcode that are separate unit. We have a capture station all based on software.

We could do whiteboarding, recording, streaming, wireless presentation, video conferencing both in the cloud and in the room, traditional video conferencing to interoperate with traditional systems; all of this for just a few $1,000.

This is where the market is going and we have solutions across the span of our products including our Pro audio which is highly-highly scalable now to meet those budgetary needs for technology investments. I'm extremely confident that we have positioned ourselves, not just because of the economy because of the technology that's available to do this..

Okay thank you. Hopefully, they will get better..

Yes, we all hope so. Dennis, thank you..

At this time, I am showing no further questions. I would like to turn the call back over to Zee Hakimoglu for closing remarks..

I thank you for your time and look forward to updating you in the quarters ahead. Thank you. Operator, back to you..

Thank you, ladies and gentlemen. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone have a great day..