Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from Larry Solow - CJS Securities
Larry Solow - CJS Securities
Jim, could you maybe give just a little more color? I know in your challenges slide that you discussed further erosion CT. Would that be net-net, I know you set Q1 as kind of a base. Do you expect potentially that number to go below your base?
James Green
On the medical CT side, there is a lot of pressure in the U.S., specifically in CT imaging. Until we really start to see new orders generated by customers in the calendar year, it’s an area that we’re just very sensitive to. So when we look at budgets in the U.S. with hospitals, we would expect that there could be further erosion in the CT side for CT imaging, specifically for hospitals. So it’s an area that we’re just watching very closely.
Larry Solow - CJS Securities
And then you talked about maybe some improvement in the guidance subsystem side, and I guess MRI is still under a little pressure, so overall you think that medical could actually fall below your Q1 number?
James Green
You know at this point, it’s very difficult to say, but just overall we would expect to see some downward pressure on the CT side, which we also expect to see some offsets on the guidance side for CT, for the radiation treatment, plus also some upsides on the specialized ultrasound side. So net-net, I wouldn’t really say that there’s a big drive one way or the other, that we would expect some downside in one area with some upside on the other. We would expect to see much of that cancel.
Larry Solow - CJS Securities
And then on the securities side, could you maybe just give a little more color on this $344 million number you had out in your press release for L-3 and is that procurement over a certain period of time and what percentage of that revenue roughly would you stand to get?
James Green
Well when we looked at that, and of course we were incredibly excited, not just because we saw the nice large number, but it was really a validation that TSA plans to purchase both of our two new products, the XLB and the KING COBRA or eXaminer SX version. So that’s what really got us excited. When we look at the detail, much of what they disclosed is associated with the current 6,000 base systems, and that’s spread out, according to that initial release, over five years.
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