We expect that our fourth quarter will be profitable quarter and will close out 2013 with a record profitability on financial performance.
JTIC anticipated certification will be completed this quarter enabling Zhone to pursue military and federal government contracts around the world.
As mentioned on our last earnings call, we continued to see tremendous traction in the hospitality market.
Going forward, we expect similar sequential revenue growth for the fourth quarter of 2013 somewhere in the mid single-digit percentage range driven by a larger than usual pipeline of business and continued customer demand for our products.
As Mory mentioned, we believe gross margins are at the beginning of a long-term expansion period resulting from improved pricing and product cost reductions.
As we have mentioned before, we anticipate that operating expenses will continue at this level and can be leveraged to support the anticipated revenue growth thereby leading to improved profitability.
When we entered 2013, our primary financial goal was to generate profitability for the year as a whole. During the year, we added the objective of achieving greater profitability in each consecutive quarter. As we begin the final quarter of 2013, both of these financial objectives are clearly insight and we are confident that our strategy is working. Our industry-leading MXK and the new FiberLAN Optical LAN Solution make us optimistic that we can continue on the path adding momentum as we move forward.
I believe we are on our plan for FiberLAN as we had outlined that before and we are working towards that. We see lots of interest lately in the hospitality area. We have announced one hotel chain and we are in the course of getting some other contracts with some other hotel chains. And we are feeling optimistic about FiberLAN. FiberLANs affecting our product would be really an increase in the gross margin and revenue.
Orin Hirschman - ...So if I remember correctly from that call, it was $20 million to $40 million for a wide range for next year 2014. Is that still the range that’s a comfortable range?
Mory Ejabat - That’s the plan we have and that’s what we are executing too.
Orin Hirschman - And you mentioned some add-ons to the FiberLAN family that will help you continue to gain a leap over Tellabs, when can we hope to see something like that?
Mory Ejabat - You may probably see some announcement from us this quarter.
Orin Hirschman - Okay, great. And just last question in terms of Tellabs, I haven’t really followed them in terms of their specific product lines, and they announced any major hospitality wins, where are they in terms of out there first, but where are they in terms of getting customers and particularly on the government side?
Mory Ejabat - Well, the only place we see Tellabs is on the government side and that’s because they have the J-Tech approval. We are in the process of getting the J-Tech approval and hopefully this government shutdown didn’t affect our progress and we are hoping to have that this quarter.
Unidentified Analyst Okay. My understanding is that Zhone was going – was involved in some discussions with some major integrators for Motorola business, because Motorola is apparently abandoning optical LAN business, is there any progress to report on that front?
Mory Ejabat - Yes, definitely. We are working with the integrators and we are getting close to winning couple of deals with them and we are hopeful that, that will happen soon. As you know, Motorola business is not supported anymore. So we are seeing a good market opportunity in that area.