Cost of revenue

Gross profit

Operating expenses:

Selling expense

Engineering and product development expense

General and administrative expense

Total operating expenses

Operating income

Interest expense

)

Other income (expense)

)

Earnings before income tax expense

Income tax expense

Net earnings

Earnings per common share - basic

Weighted average common shares outstanding - basic

Earnings per common share - diluted

Weighted average common shares and common share equivalents outstanding - diluted

June 30,

December 31,

(Unaudited)

Current assets:

Cash and cash equivalents

Restricted cash

Trade accounts receivable, net of allowance for credit losses of $501 and $496, respectively

Inventories

Prepaid expenses and other current assets

Total current assets

Property and equipment:

Machinery and equipment

Leasehold improvements

Gross property and equipment

Less: accumulated depreciation

)

)

Net property and equipment

Right-of-use assets, net

Goodwill

Intangible assets, net

Deferred tax assets

Restricted certificates of deposit

Other assets

Total assets

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Current portion of Term Note

Current portion of operating lease liabilities

Accounts payable

Accrued wages and benefits

Accrued professional fees

Customer deposits and deferred revenue

Accrued sales commissions

Domestic and foreign income taxes payable

Other current liabilities

Total current liabilities

Operating lease liabilities, net of current portion

Term Note, net of current portion

Contingent consideration

Other liabilities

Total liabilities

Commitments and Contingencies

Stockholders' equity:

Preferred stock, $0.01 par value; 5,000,000 shares authorized; no shares issued or outstanding

Common stock, $0.01 par value; 20,000,000 shares authorized; 12,185,220 and 11,063,271 shares issued, respectively

Additional paid-in capital

Retained earnings

Accumulated other comprehensive earnings

Treasury stock, at cost; 38,514 and 34,308 shares, respectively

)

)

Total stockholders' equity

Total liabilities and stockholders' equity

(Unaudited)

Net earnings

Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:

Depreciation and amortization

Provision for excess and obsolete inventory

Foreign exchange (gain) loss

Amortization of deferred compensation related to stock-based awards

Discount on shares sold under Employee Stock Purchase Plan

Loss on disposal of property and equipment

Deferred income tax benefit

)

Changes in assets and liabilities:

Trade accounts receivable

)

Inventories

)

Prepaid expenses and other current assets

)

Other assets

)

Operating lease liabilities

)

Accounts payable

Accrued wages and benefits

)

Accrued professional fees

)

Customer deposits and deferred revenue

)

Accrued sales commissions

Domestic and foreign income taxes payable

)

Other current liabilities

Other liabilities

Net cash provided by (used in) operating activities

)

CASH FLOWS FROM INVESTING ACTIVITIES

Refund of final working capital adjustment related to Acculogic

Purchase of property and equipment

)

Purchase of short-term investments

)

Net cash used in investing activities

)

CASH FLOWS FROM FINANCING ACTIVITIES

Net proceeds from public offering of common stock

Repayments of Term Note

)

Proceeds from shares sold under Employee Stock Purchase Plan

Proceeds from stock options exercised

Acquisition of treasury stock-shares surrendered by employees to satisfy tax liability

)

Net cash provided by (used in) financing activities

)

Effects of exchange rates on cash

Net cash provided by (used in) all activities

)

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Cash payments for:

Domestic and foreign income taxes

Estimated adjusted EPS (Non-GAAP)