Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from John Harmon - Needham & Company.
John Harmon - Needham & Co.
A couple of questions, Steve, could you please talk about the debt situation. I know there’s certain information you can’t give in a public forum, but talk about the most likely scenario about how this plays out in your view and add whatever you can just to let us know the steps you’re taking to be in control of the situation rather than being driven by what the capital markets are doing.
Stephen Workman
Well, I’d like to lay out the roadmap in detail. I will just tell you that we have a number of alternatives, which we’re looking at to address the convertible debt market in both volatile and less volatile markets. And ultimately we’re going to make a decision that will try to balance all of the various constituencies here at the end of the day.
Again, I would repeat that we do generate EBITDA. We do have debt capacity and the size of that obviously depends to a certain degree on revenue levels, as well as our success in continuing to reduce costs. I don’t think I can be too much more specific at this point in time.
John Harmon - Needham & Co.
Earlier on you had expected to be up sequentially in terms of revenues in the April quarter mostly due to new design wins, and you talked about a couple new products that are shipping already. About how much revenue do you think you might be getting from new product wins in your fourth quarter?
Jerry Rawls
Less than what we expected.
John Harmon - Needham & Co.
And just finally, looking at your short reach SAN/LAN transceiver line, currently that this product category ought to be growing less fast than other products and probably has the highest degree of pricing pressure. Is in this type of product category EBITDA positive and what can you do over the remaining lifetime of these products to keep it that way?
Stephen Workman
I’m sorry. We’re talking about the 10gig?
John Harmon - Needham & Co
No. Short reach SAN/LAN transceivers. Are they profitable enough?
Stephen Workman
I think 10gig is very profitable. Then again that was the one area that was up on a sequential basis this past quarter and we look for that to be up again. And if you look at the market forecasts, of course, we all know those are wrong, but directionally speaking, if you look at the volumes for short distance 10gig, there’s a phenomenal amount of growth that is expected.
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