Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Romit Shah – Barclays Capital.
Romit Shah – Barclays Capital
I’ve got a couple, just first on the op ex guide of $7 to $7.5 million, can you tell us if you ex out some of the one timers that may be hitting in Q1 what the run rate might look like?
Gary R. Larsen
What we’re expecting Romit, and we should see this in Q2 is that we’ll be probably about 15% down from that range I gave in Q1 so we’d expect to be in the low $6 million range once these actions are fully in place and some of the one timers work their way out in Q1.
Romit Shah – Barclays Capital
If I think about your op ex going forward and some of the cost reduction measures you’ve taken can you give us a sense of what revenues you need to get to cash breakeven?
Gary R. Larsen
Once we’re at the low $6 range with the margin levels we’re expecting this year, that puts us probably in the high $13 million range for cash revenue breakeven.
Romit Shah – Barclays Capital
My last question guys is just on your comments about just the revenues being weak. Some of the other PC suppliers like NVIDIA and [Intersil] have talked about shortages and there’s been some chatter about rush orders and it sounded like the PC chip supply chain may have over corrected at least temporarily so I’m a little surprised to hear you guys talk about inventory still being at elevated levels. So, I’m just wondering if we could get just a little more color on maybe way AuthenTec is in a bit of a different position as we stand here in Q1?
F. Scott Moody
I think two things first off we’re really seeing order trends change on a daily or weekly basis at this point Romit. So, my opinion on any given day might be slightly different in terms of what we see so there’s still quite a bit of fluctuations. I think that’s probably what guys like NVIDIA and [Intersil] see as well. We see some of that with specific OEMs.
At the same time whereas they might be used on larger percentage of the laptops out there. As I had mentioned earlier we have generally been used in the higher end laptops which I think has been hit proportionately a little more. Then, a number of our sensors, a couple of our customers have offered them, at least on certain models, as a build-to-order. So, I think those two things might make us a little bit different than other guys but there is a lot of flexibility between OEMs and even weekly in what we see as order demand now, part of the reason we gave a relatively wide revenue range.
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