Question-and-Answer Session
Operator
(Operator Instructions) The first question comes from the line of Ted Kuntz – Needham & Company.
Ted Kuntz – Needham & Company
The revenues were a little bit light as you indicated and the guidance as a little bit lower than what we had modeled. Would you say that is exclusively, the timing issue is on the defense side but it sounds like the commercial business is very, very soft. Maybe you could just comment a bit more on the commercial business and what you are seeing and the outlook for that?
Richard Southworth
The commercial business is not getting any softer than it was in the second quarter but it is flat. We had expected some rebound going into the fourth quarter. We have not seen that yet. The softness that we see were in expected shipments for our defense segment and for products where we are sole sourced and the programs have just?the orders were just delayed for our third quarter shipment. Our product is actually all manufactured. We certainly expect to ship that in the fourth quarter.
Ted Kuntz – Needham & Company
Are you seeing any light at the end of the tunnel on commercial or are the lead times here very short and you will be okay without much advanced notice for pick up?
Richard Southworth
The lead time in the commercial markets are very short. We are still designing many new products and solutions for our customers, but we really expect that we will only see it in a few weeks of when their actual demand is and when they release the orders. We are not going to have a lot of visibility for when that change takes place.
Ted Kuntz – Needham & Company
Is that true both on the communications side as well as the medical side? Those are your two biggest sub sectors in that commercial space.
Richard Southworth
Actually the communications side we are seeing some indications of an uptick but the medical demand is still very flat.
Ted Kuntz – Needham & Company
Is it due to any kind of market share changes do you feel or is it just a flow through to the end markets?
Richard Southworth
It has nothing to do with market share or the loss of market share. In almost all of our applications we are sole on. It is just our end customer sales have been I guess very soft.
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