Question-and-Answer Session
Operator: Thank you. (Operator Instructions). Our first question will come from John Harmon with Needham & Company.
John Harmon - Needham & Company
Hi good morning.
John Markovich
Good morning, John.
John Harmon - Needham & Company
A couple of questions please, maybe I didn't hear, I heard you gave some revenue guidance for your Fiber Optics business but I didn't hear you give any guidance for your Photovoltaics business?
Hong Hou
Yeah, John, so for the sort of Photovoltaics business we have a better visibility than Fiber Optics business. Probably the best we can expect, it is flat quarter-over-quarter. Our Fiber Optics business... there is a range we gave from minus 15% to flat on a sequential basis.
John Harmon - Needham & Company
Okay. Thank you. Help me with the numbers please, I don't know if you gave any EBITDA number, but it looks like your cash decreased by about 5 million in the quarter. Certainly you are looking at revenues down a little bit than the March quarter. And assuming you took all of your annual cost reductions, 9 million a year, that's a couple of million a quarter. So you'd still probably be burning about 3 to 4 million a quarter after your cost reductions, am I doing the math correctly?
John Markovich
You are, John.
Hong Hou
Yeah, John. Instead of... one asset in there is well run in (ph) capital. We added into the quarter totaled up about 70 to $75 million, that's our inventory level. And the quality after the revaluation of this inventory is fairly good. They are several products that access inventory. So that's why we said, we place very strong emphasis on the working capital management. We can convert a lot of the inventory into cash, we expect to do that in this quarter.
John Harmon - Needham & Company
Thank you, but a follow up to that one please. You said you would have to add some inventory to participate in VMI program and optical, how much inventory you think that would mean?
Hong Hou
The VMI inventory level is anywhere some 3 to $7 million and that's in a way a one-time event. We have done for major product lines by the end of September, so we added parallel optical transmitters and receivers into the VMI inventory. So in that bucket probably the inventory level will increase by a couple of million dollars. Just across the boards, we have a very high inventory level, because the comfort manufacturing models, you will give us forecast, they'll purchase the material on our all behalf. When the demand drops, all of sudden, we can't react right away, so a lot of inventory flow over to ourselves. So we put a lot of efforts in analyzing that, in this quarter and next quarters. We're going to be liquidating a lot of the inventory we have.
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