Question-and-Answer Session
Operator
(Operator Instructions). Your first question comes from the line of Brett Hodess with Merrill Lynch. Mr. Hodess your line is open.
Brett Hodess - Merrill Lynch
Hello.
Arthur Zafiropoulo
Hello.
Brett Hodess - Merrill Lynch
Hello can you hear me.
Arthur Zafiropoulo
Yes, we can Brett.
Brett Hodess - Merrill Lynch
Okay, thanks. Two questions Art, first the LSA product line, you mentioned in the press release I think based on the orders, say it looks like you probably booked three units or so in the quarter so does that mean you are going to enter the year with about. I think it's either 5 or 6 units based on the percentages Bruce gave in backlog for revenue recognition this year?
Arthur Zafiropoulo
That sounds about right Brett.
Brett Hodess - Merrill Lynch
Okay.
Bruce Wright
What you can do Brett is it’s a manufacture size with a commentary about the total revenue of $62 million. What I can say as far as 60 - as far as systems backlog and I made the comment about 56% being in LP in addition, about a third is in advanced packaging and you already know the ASPs and so with that information I think you can turn the crank and the number of units will fall out pretty easily for you.
Brett Hodess - Merrill Lynch
Great excellent. Like you said 32% was in advanced packaging Bruce?
Bruce Wright
Yeah.
Brett Hodess - Merrill Lynch
Okay all right. Secondly if you look at the cost structure, obviously it’s much better than we anticipated in the fourth quarter. So, the mix as you roll into this year given the backlog it sounds in the short-term, mix will be largely AP and nano, which has very high margin. But, if the, LSA is the largest portion of the mix as you roll through the year, you must be expecting the LSA margins to be improving quite a bit in the second half when you start to recognize those revenues?
Bruce Wright
That’s a good assumption now, I don’t know how close I want to get to improve a great amount they are - the LSA margins are continually improving that our operating model for the company is for gross margins of 50% or greater in operating margins a 15% or greater and you’ve seen how we kept that this in the fourth quarter from a gross margin standpoint and are approaching very closely that in the operating margin standpoint with operating margins of a 11%. With the margins as you stated being better than the operating model in both nanotechnology and advanced packaging we are seeing continuous increase in the margins for LSA. And they are just getting better and better they are not yet at the operating model level, but we are getting close.
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