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TRANSACT TECHNOLOGIES INC 10-K --12-31 8651684 64500000 false 0001017303 Yes No Accelerated Filer No 2012 FY 2012-12-31

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <a id="notes" name="notes"></a>1. Description of business </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> TransAct Technologies Incorporated (“TransAct” or the “Company”), which has its headquarters in Hamden, CT and its primary operating facility in Ithaca, NY, operates in one operating segment: market specific solutions, including printers, terminals, software and other products for transaction-based and other industries.  These industries include casino, gaming, lottery, banking, point-of-sale, food safety, oil and gas and medical and mobile.  Our printers are designed based on market-specific requirements and are sold under the Ithaca®, Epic and Printrex® product brands.  We distribute our products through OEMs, value-added resellers, selected distributors, and directly to end-users.  Our product distribution spans across the Americas, Europe, the Middle East, Africa, Asia, Australia, the Caribbean Islands and the South Pacific.  We also generate revenue from the after-market side of the business, providing printer service, supplies and spare parts in addition to  revenue from our software solution, the EPICENTRALTM Print System (“EPICENTRALTM”), that enables casino operators to create promotional coupons and marketing messages and print them in real-time at the slot machine. </div>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> 2. Summary of significant accounting policies </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Principles of consolidation:  The accompanying Consolidated Financial Statements include the accounts of TransAct and its wholly-owned subsidiaries, which require consolidation, after the elimination of intercompany accounts, transactions and unrealized profit. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Reclassifications:  Certain amounts in the prior years’ financial statements have been reclassified to conform to the current year’s presentation. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Use of estimates:  The accompanying Consolidated Financial Statements were prepared using estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and disclosure of contingent assets and liabilities as of the date of the Consolidated Financial Statements and the reported amounts of sales and expenses during the reporting period. Actual results could differ from those estimates. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Segment reporting: We apply the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 280, “Segment Reporting.”  We view our operations and manage our business as one segment: the design, development, manufacture and sale of transaction-based and specialty printing solutions and related service, supplies and replacement parts.  Factors used to identify TransAct’s single operating segment include the organizational structure of the Company and the financial information available for evaluation by the chief operating decision-maker in making decisions about how to allocate resources and assess performance. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Cash and cash equivalents:  We consider all highly liquid investments with a maturity date of three months or less at date of purchase to be cash equivalents. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Allowance for doubtful accounts:  We establish an allowance for doubtful accounts to ensure trade receivables are valued appropriately. We maintain an allowance for doubtful accounts based on a variety of factors, including the length of time receivables are past due, significant one-time events and historical experience.  We record a specific allowance for individual accounts when we become aware of a customer’s inability to meet its financial obligations, such as in the case of bankruptcy filings or deterioration in the customer’s operating results or financial position.  If circumstances related to customers change, we would further adjust estimates of the recoverability of receivables.  Allowances for doubtful accounts on accounts receivable balances were $66,000 as of December 31, 2012 and $70,000 as of December 31, 2011. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> The following table summarizes the activity recorded in the valuation account for accounts receivable: </div> <table cellpadding="0" cellspacing="0" width="60%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"> <tr> <td valign="bottom" width="64%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="8" valign="bottom" width="34%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> Year ended December 31, </div> </td> </tr> <tr> <td valign="bottom" width="64%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> (In thousands) </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2012 </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2011 </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2010 </div> </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Balance, beginning of period </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 70 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 57 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 57 </td> </tr> <tr> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Additions charged to costs and expenses </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> - </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 1 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> - </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Acquisition of business </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> - </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 15 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> - </td> </tr> <tr> <td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Deductions </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> (4) </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> (3) </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> - </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 4px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Balance, end of period </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 66 </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 70 </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 57 </td> </tr> </table> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Inventories:  Inventories are stated at the lower of cost (principally standard cost, which approximates actual cost on a first-in, first-out basis) or market.  We review market value based on historical usage and estimates of future demand.  Based on these reviews, inventory write-downs are recorded, as necessary, to reflect estimated obsolescence, excess quantities and market value.   </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Fixed assets:  Fixed assets are stated at cost.  Depreciation is recorded using the straight-line method over the estimated useful lives.  The estimated useful life of tooling is five years; machinery and equipment is ten years; furniture and office equipment is five to ten years; and computer software and equipment is three to seven years.  Leasehold improvements are amortized over the shorter of the term of the lease or the useful life of the asset.  Costs related to repairs and maintenance are expensed as incurred.  The costs of sold or retired assets are removed from the related asset and accumulated depreciation accounts and any gain or loss is recognized.  Depreciation expense was $1,183,000, $1,339,000 and $1,446,000 in 2012, 2011 and 2010, respectively. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Leases:  Rent expense under non-cancelable operating leases with scheduled rent increases or free rent periods are accounted for on a straight-line basis over the lease term, beginning on the date of control of physical use of the asset or of initial possession.  The amount of the excess of straight-line rent expense over scheduled payments is recorded as a deferred liability.  Construction allowances and other such lease incentives are recorded as deferred credits, and are amortized on a straight-line basis as a reduction of rent expense beginning in the period they are deemed to be earned, which generally coincides with the occupancy date. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> 2. Summary of significant accounting policies (continued) </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Goodwill and Intangible assets: We acquire businesses in purchase transactions that result in the recognition of goodwill and intangible assets. The determination of the value of intangible assets requires management to make estimates and assumptions. In accordance with Accounting Standards Codification (“ASC”) 350-20 “Goodwill”, acquired goodwill is not amortized but is subject to impairment testing at least annually and when an event occurs or circumstances change, that indicate it is more likely than not an impairment exists. Factors considered that may trigger an impairment review are: significant underperformance relative to expected historical or projected future operating results; significant changes in the manner of use of acquired assets or the strategy for the overall business; significant negative industry or economic trends; and significant decline in market capitalization relative to net book value. Definite lived intangible assets are amortized and are tested for impairment when appropriate. We have determined that no goodwill impairment has occurred based on our assessment as of December 31, 2012 when the impairment review is performed. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Revenue recognition: Our typical contracts include the sale of printers, which are sometimes accompanied by separately-priced extended warranty contracts.  We also sell replacement parts, consumables, and other repair services (sometimes pursuant to multi-year product maintenance contracts), which are not included in the original printer sale and are ordered by the customer as needed.  We recognize revenue pursuant to the guidance within ASC 605, “Revenue Recognition” (ASC 605).  Specifically, revenue is recognized when evidence of an arrangement exists, delivery (based on shipping terms, which are generally FOB shipping point) has occurred, the selling price is fixed and determinable, and collectability is reasonably assured.  We recognize revenue from the sale of printers to our distributors and resellers on a sell-in basis and on substantially the same terms as we recognize revenue from all our other customers.  We provide for an estimate of product returns and price protection based on historical experience at the time of revenue recognition. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> We have developed a new software solution, the EPICENTRALTM Print System (“EPICENTRALTM”), that will enable casino operators to create promotional coupons and marketing messages and to print them in real-time at the slot machine.  Revenue arrangements for EPICENTRALTM include multiple deliverables and as a result such arrangements are accounted for in accordance with both ASC 605-25, “Multiple-Element Arrangements” and ASC 985-605, “Software.”  EPICENTRALTM is primarily comprised of both a software component, which is licensed, and a hardware component, which can either be leased or sold to end users, and both components are integrated to deliver the system’s full functionality. Under leasing arrangements, revenue is generally recognized ratably over the lease term, excluding revenue allocated to installation, which is recognized upon completion. In an arrangement where the hardware is purchased, revenue, inclusive of software license fees, is generally recognized upon installation and formal acceptance by the customer. For EPICENTRALTM and other multiple deliverable arrangements, we consider whether the deliverables in an arrangement are within the scope of existing higher-level GAAP and apply such literature to the extent that it provides guidance regarding whether to separate multiple-deliverable arrangements and how to allocate value among those separate units of accounting.  We also determine whether revenue arrangements consist of more than one unit of accounting at inception of the arrangement and recognize revenue as each item in the arrangement is delivered. We allocate arrangement consideration to the separate units of accounting based on the relative fair value for all units of accounting in the arrangement, except where amounts allocable to the delivered units is limited to that which is contingent upon the delivery of additional deliverables or meeting other specified performance conditions. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Revenue related to extended warranty and product maintenance contracts is recognized pursuant to ASC 605-20-25, “Separately Priced Extended Warranty and Product Maintenance Contracts.”  Pursuant to this provision, revenue related to separately priced product maintenance contracts is deferred and recognized over the term of the maintenance period.  We record deferred revenue for advance payments received from customers for maintenance contracts. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Our customers have the right to return products that do not function properly within a limited time after delivery.  We monitor and track product returns and record a provision for the estimated future returns based on historical experience.  Returns have historically been within expectations and the provisions established. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> We offer some of our customers price protection as an incentive to carry inventory of our product.  These price protection plans provide that if we lower prices, we will credit them for the price decrease on inventory they hold.  Our customers typically carry limited amounts of inventory, and we infrequently lower prices on current products.  As a result, the amounts paid under these plans have not been material. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> We charge our customers for shipping and handling services.  The amounts billed to customers are recorded as revenue when the product ships.  Any costs incurred related to these services are included in cost of sales. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Concentration of credit risk:  Financial instruments that potentially expose us to concentrations of credit risk are limited to cash and cash equivalents held by our banks in excess of insured limits and accounts receivable. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Accounts receivable from customers representing 10% or more of total accounts receivable were as follows: </div> <table cellpadding="0" cellspacing="0" width="60%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"> <tr> <td valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="5" valign="bottom" width="22%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> December 31, </div> </td> </tr> <tr> <td valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2012 </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2011 </div> </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="76%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> GTECH </div> </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 37% </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 13% </td> </tr> <tr> <td align="left" valign="bottom" width="76%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Customer A </div> </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 17% </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 20% </td> </tr> </table> <div style="TEXT-INDENT: 0pt; DISPLAY: block"> 2. Summary of significant accounting policies (continued) </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Sales to customers representing 10% or more of total net sales were as follows: </div> <table cellpadding="0" cellspacing="0" width="60%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"> <tr> <td valign="bottom" width="64%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="8" valign="bottom" width="34%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> Year ended December 31, </div> </td> </tr> <tr> <td valign="bottom" width="64%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2012 </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2011 </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2010 </div> </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> GTECH </div> </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 18% </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 26% </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 12% </td> </tr> <tr> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Customer A </div> </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 15% </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 13% </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 14% </td> </tr> </table> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Warranty:  We generally warrant our products for up to 36 months and record the estimated cost of such product warranties at the time the sale is recorded.  Estimated warranty costs are based upon actual past experience of product repairs and the related estimated cost of labor and material to make the necessary repairs. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> The following table summarizes the activity recorded in the accrued product warranty liability: </div> <table cellpadding="0" cellspacing="0" width="60%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"> <tr> <td valign="bottom" width="64%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="8" valign="bottom" width="34%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> Year ended December 31, </div> </td> </tr> <tr> <td valign="bottom" width="64%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> (In thousands) </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2012 </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2011 </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2010 </div> </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Balance, beginning of period </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 421 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 249 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 233 </td> </tr> <tr> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Accruals for warranties issued during the period </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 105 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 146 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 84 </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Changes in estimates </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> (1) </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 326 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 172 </td> </tr> <tr> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Acquisition of business </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> - </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 25 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> - </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Settlements during the period </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> (251) </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> (325) </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> (240) </td> </tr> <tr> <td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 4px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Balance, end of period </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 274 </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 421 </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 249 </td> </tr> </table> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Approximately $101,000 and $106,000 of the accrued product warranty liability were classified as long-term at December 31, 2012 and 2011, respectively. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Research and development expenses:  Research and development expenses include engineering, design and product development expenses incurred in connection with specialized engineering and design to introduce new products and to customize existing products, and are expensed as a component of operating expenses as incurred.  We recorded approximately $4,239,000, $3,418,000 and $3,000,000 of research and development expenses in 2012, 2011 and 2010, respectively. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Costs incurred in researching and developing a computer software product are charged to expense until technological feasibility has been established at which point all material software costs are capitalized within Intangible assets in our Consolidated Balance Sheet until the product is available for general release to customers.  While judgment is required in determining when technological feasibility of a product is established, we have determined that it is reached after all high-risk development issues have been documented in a formal detailed plan design.  The amortization of these costs will be included in cost of sales over the estimated life of the product.  During 2010 we began the development of EPICENTRALTM and unamortized development costs for such software were approximately $528,000 and $682,000 as of December 31, 2012 and 2011, respectively.  The total amount charged to cost of sales for capitalized software development costs was approximately $189,000 and $62,000 in 2012 and 2011, respectively, with no such charges in 2010. The weighted-average amortization period of unamortized capitalized software developments costs is 3 years. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Advertising:  Advertising costs are expensed as incurred.  Advertising expenses, which are included in selling and marketing expense on the accompanying Consolidated Statements of Income, for 2012, 2011 and 2010 totaled $949,000, $871,000 and $824,000, respectively. These expenses include items such as consulting and professional services, tradeshows, and print advertising. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Restructuring:  We continually evaluate our cost structure to ensure that it is appropriately positioned to respond to changing market conditions. We record pre-tax restructuring charges in accordance with ASC 420-10-25-4, “Exit or Disposal Cost Obligations.” See Note 8 for further discussion. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Income taxes:  The income tax amounts reflected in the accompanying Consolidated Financial Statements are accounted for under the liability method in accordance with ASC 740, “Income Taxes.”  Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards.  Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.  We assess the likelihood that net deferred tax assets will be realized from future taxable income, and to the extent that we believe that realization is not likely, we establish a valuation allowance.  In accordance with ASC 740, we identified, evaluated and measured the amount of benefits to be recognized for our tax return positions.  See Note 13 for information regarding our accounting for income taxes. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Foreign currency translation:  The financial position and results of operations of our foreign subsidiary in the United Kingdom are measured using local currency as the functional currency.  Assets and liabilities of such subsidiary have been translated into U.S. dollars at the year-end exchange rate, related sales and expenses have been translated at the average exchange rate for the year, and shareholders’ equity has been translated at historical exchange rates.  The resulting translation gains or losses, net of tax, are recorded in shareholders’ equity as a cumulative translation adjustment, which is a component of </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> 2. Summary of significant accounting policies (continued) </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> accumulated other comprehensive income.  Foreign currency transaction gains and losses, including those related to intercompany balances, are recognized in Other, net on the Consolidated Statements of Income. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Share-based payments: At December 31, 2012, we had share-based employee compensation plans, which are described more fully in Note 12 - Stock incentive plans.  We account for those plans under the recognition and measurement principles of ASC 718, “Compensation – Stock Compensation.”  Share-based compensation expense is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the employee’s requisite service period.  We have no awards with market or performance conditions. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> We use the Black-Scholes option-pricing model to calculate the fair value of share based awards.  The key assumptions for this valuation method include the expected term of the option, stock price volatility, risk-free interest rate, dividend yield, market price of our underlying stock and exercise price.  Many of these assumptions are judgmental and highly sensitive in the determination of compensation expense.  In addition, we estimate forfeitures when recognizing compensation expense, and we adjust our estimate of forfeitures over the requisite service period based on the extent to which actual forfeitures differ, or are expected to differ, from such estimates.  Changes in estimated forfeitures are recognized through a cumulative true-up adjustment in the period of change and also impacts the amount of compensation expense to be recognized in future periods. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Net income and loss per share:  We report net income or loss per share in accordance with ASC 260, “Earnings per Share (EPS).” Under this guidance, basic EPS, which excludes dilution, is computed by dividing income or loss available to common shareholders by the weighted average number of common shares outstanding for the period.  Unvested restricted stock is excluded from the calculation of weighted average common shares for basic EPS.  Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.  Diluted EPS includes restricted stock and in-the-money stock options using the treasury stock method.  During a loss period, the assumed exercise of in-the-money stock options has an anti-dilutive effect, and therefore, these instruments are excluded from the computation of dilutive EPS.  See Note 14 - Earnings per Share. </div>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">three</div>

66000

70000

five

ten

1183000

1339000

1446000

one

101000

106000

4239000

3418000

3000000

528000

682000

189000

62000

949000

871000

824000

70000

57000

1000

15000

-4000

-3000

66000

37%

13%

17%

20%

12%

14%

421000

249000

233000

105000

146000

84000

-1000

326000

172000

25000

-251000

-325000

-240000

274000

4000000

30%

200000

2400000

960000

680000

280000

0.04

0.05

1600000

8900000

$1,152,000

159000

78000

1892000

23000

139000

78000

<table cellpadding="0" cellspacing="0" width="60%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="88%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Purchase Price Allocation (In thousands): </div> </td> <td valign="bottom" width="1%">   </td> <td colspan="2" valign="bottom" width="10%">   </td> </tr> <tr> <td align="left" valign="bottom" width="88%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Receivables </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 673 </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="88%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Inventories </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 677 </td> </tr> <tr> <td align="left" valign="bottom" width="88%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Fixed assets </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 11 </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="88%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Other current assets </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 6 </td> </tr> <tr> <td align="left" valign="bottom" width="88%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Intangible assets </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 2,280 </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="88%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Goodwill </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 1,152 </td> </tr> <tr> <td align="left" valign="bottom" width="88%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Other assets </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 22 </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="88%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Initial estimate for liability related to potential future contingent consideration </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> (680) </td> </tr> <tr> <td align="left" valign="bottom" width="88%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Other liabilities </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> (141) </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="88%" style="PADDING-BOTTOM: 4px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Total purchase price </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 4,000 </td> </tr> <tr> <td align="left" valign="bottom" width="88%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Intangible Assets: </div> </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="88%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Customer relationships </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 1,300 </td> </tr> <tr> <td align="left" valign="bottom" width="88%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Trademark </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 480 </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="88%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Developed technology </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 420 </td> </tr> <tr> <td align="left" valign="bottom" width="88%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Other </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 80 </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="88%" style="PADDING-BOTTOM: 4px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Total Intangible assets </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 2,280 </td> </tr> <tr> <td align="left" valign="bottom" width="88%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Intangible Asset Weighted Average Amortization Period: </div> </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="88%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Customer relationships </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td align="right" colspan="2" valign="bottom" width="10%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"> 6 years </div> </td> </tr> <tr> <td align="left" valign="bottom" width="88%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Trademark </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td align="right" colspan="2" valign="bottom" width="10%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"> 10 years </div> </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="88%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Developed technology </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td align="right" colspan="2" valign="bottom" width="10%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"> 9 years </div> </td> </tr> <tr> <td align="left" valign="bottom" width="88%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Other </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 1.2 years </div> </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="88%" style="PADDING-BOTTOM: 4px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Total weighted average </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 7.2 years </div> </td> </tr> </table>

673000

677000

11000

6000

2,280

1152000

22000

-680000

(141)

1300000

480000

420000

80000

2280000

103000

69694000

68617000

5025000

3865000

6871000

6863000

71000

3450000

7217000

12913000

12463000

1555000

1543000

5546000

5315000

1800000

1763000

21814000

21084000

-18925000

-18053000

2889000

3031000

413000

327000

<table cellpadding="0" cellspacing="0" width="60%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"> <tr> <td valign="bottom" width="52%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="13" valign="bottom" width="46%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> December 31, </div> </td> </tr> <tr> <td valign="bottom" width="52%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="6" valign="bottom" width="22%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2012 </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="6" valign="bottom" width="22%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2011 </div> </td> </tr> <tr> <td align="left" valign="bottom" width="52%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block">   </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> (In thousands) </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> Gross Amount </div> </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> Accumulated Amortization </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> Gross Amount </div> </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> Accumulated Amortization </div> </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="52%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Purchased technology </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 1,563 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> (679) </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 1,528 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> (443) </td> </tr> <tr> <td align="left" valign="bottom" width="52%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Customer relationships </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 1,300 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> (296) </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 1,300 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> (79) </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="52%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Trademark </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 480 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> (65) </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 480 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> (18) </td> </tr> <tr> <td align="left" valign="bottom" width="52%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Covenant not to compete </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 146 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> (146) </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 146 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> (136) </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="52%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Patents </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 57 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> (32) </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 57 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> (29) </td> </tr> <tr> <td align="left" valign="bottom" width="52%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Other </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 80 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> (80) </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 80 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> (25) </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="52%" style="PADDING-BOTTOM: 4px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"> Total </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 3,626 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> (1,298) </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 3,591 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> (730) </td> </tr> </table>

1563000

-679000

1528000

-443000

-296000

1300000

-79000

-65000

480000

-18000

146000

-146000

146000

-136000

57000

-32000

57000

-29000

80000

-80000

80000

-25000

3626000

3591000

1770000

1702000

173000

315000

189000

95000

795000

520000

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> 8. Accrued business consolidation and restructuring expenses </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> In January 2012, we determined that we no longer needed to maintain the existing Printrex manufacturing facility in San Jose, California, along with certain redundant headcount.  As a result, we incurred expenses of $138,000 in 2012 for employee termination benefits related to these employee reductions as well as moving costs and the closing of the San Jose manufacturing operations that was completed as of December 31, 2012.  This restructuring charge was recorded in accordance with ASC 420-10-25-4 “Exit or Disposal Cost Obligations” and is included within Business consolidation and restructuring expenses in the accompanying Consolidated Statements of Income.  Cash payments made under this restructuring plan were completed by October 2012. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> In May 2011, we closed our New Britain, CT service facility which primarily serviced our first generation legacy lottery printers for GTECH Corporation (“GTECH”) and incurred $184,000 in facility closure and severance costs in the second quarter of 2011.  These restructuring activities reduced the number of employees and closed a facility, which caused us to incur costs for employee termination benefits related to these employee reductions as well as lease termination costs and the disposal of fixed assets.  Cash payments made under this restructuring plan were completed by April 2012. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"> 8. Accrued business consolidation and restructuring expenses (continued) </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> In 2010, due to the completion of the move of a substantial portion of our printer production to a contract manufacturer in China, we initiated and completed certain restructuring programs to better utilize our workforce.  These restructuring activities reduced the number of employees and caused us to incur costs for employee termination benefits related to the employee reductions.  During 2010, we recorded restructuring charges of approximately $156,000 which were included within general and administrative expenses in the accompanying Consolidated Statements of Income. The restructuring activity during 2010 included severance costs related to the termination of 16 employees. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> The following table summarizes the activity recorded in accrued restructuring expenses during 2012 and 2011, and is included in accrued liabilities in the accompanying Consolidated Balance Sheets. </div> <table cellpadding="0" cellspacing="0" width="60%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"> <tr> <td valign="bottom" width="76%">   </td> <td valign="bottom" width="1%">   </td> <td colspan="5" valign="bottom" width="22%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"> December 31, </div> </td> </tr> <tr> <td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> (In thousands) </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2012 </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2011 </div> </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="76%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Accrual balance, beginning of period </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 45 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> - </td> </tr> <tr> <td align="left" valign="bottom" width="76%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Severance & moving charges </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 138 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 134 </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="76%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Non-cancelable lease payments </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> - </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 26 </td> </tr> <tr> <td align="left" valign="bottom" width="76%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Cash payments </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> (183) </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> (115) </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 4px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Accrual balance, end of period </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> - </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 45 </td> </tr> </table>

138000

184000

156000

Restructuring Accrual Rollforward <table cellpadding="0" cellspacing="0" width="60%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"> <tr> <td valign="bottom" width="76%">   </td> <td valign="bottom" width="1%">   </td> <td colspan="5" valign="bottom" width="22%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"> December 31, </div> </td> </tr> <tr> <td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> (In thousands) </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2012 </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2011 </div> </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="76%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Accrual balance, beginning of period </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 45 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> - </td> </tr> <tr> <td align="left" valign="bottom" width="76%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Severance & moving charges </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 138 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 134 </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="76%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Non-cancelable lease payments </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> - </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 26 </td> </tr> <tr> <td align="left" valign="bottom" width="76%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Cash payments </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> (183) </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> (115) </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 4px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Accrual balance, end of period </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> - </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 45 </td> </tr> </table>

45000

138000

134000

26000

-183000

-115000

280000

201000

223000

20000000

0.0025

31000

$5,000,000

20000000

1005000

1030000

1047000

836000

806000

808000

561000

78000

12. Stock incentive plans <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Stock incentive plans.  We currently have four primary stock incentive plans: the 1996 Stock Plan, which provided for the grant of awards to officers and other key employees of the Company; the 1996 Directors’ Stock Plan, which provided for non-discretionary awards to non-employee directors; the 2001 Employee Stock Plan, which provided for the grant of awards to key employees of the Company and other non-employees who provided services to the Company; and the 2005 Equity Incentive Plan, which provides for awards to executives, key employees, directors and consultants.  The plans generally provide for awards in the form of: (i) incentive stock options, (ii) non-qualified stock options, (iii) restricted stock, (iv) restricted stock units, (v) stock appreciation rights or (vi) limited stock appreciation rights.  However, the 2001 Employee Stock Plan does not provide for incentive stock option awards.  Options granted under these plans have exercise prices equal to 100% of the fair market value of the common stock at the date of grant.  Options granted have a ten-year term and generally vest over a three- to five-year period, unless automatically accelerated for certain defined events.  As of May 2005, no new awards will be made under the 1996 Stock Plan, the 1996 Directors’ Stock Plan or the 2001 Employee Stock Plan.  Under our 2005 Equity Incentive Plan, we may authorize up to 1,200,000 of shares of TransAct common stock.  At December 31, 2012, 302,243 shares of common stock remained available for issuance under the 2005 Equity Incentive Plan. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Under the assumptions indicated below, the weighted-average fair value of stock option grants for the years ended December 31, 2012, 2011 and 2010 was $6.91, $10.42 and $7.45, respectively.  The table below indicates the key assumptions used in the option valuation calculations for options granted in the years ended December 31, 2012, 2011 and 2010 and a discussion of our methodology for developing each of the assumptions used in the valuation model: </div> <table cellpadding="0" cellspacing="0" width="60%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"> <tr> <td valign="bottom" width="64%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="8" valign="bottom" width="34%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> Year ended December 31, </div> </td> </tr> <tr> <td valign="bottom" width="64%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2012 </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2011 </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2010 </div> </td> </tr> <tr style="background-color: #CCEEFF;"> <td valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Expected option term </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td align="right" colspan="2" valign="bottom" width="10%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"> 6.7 years </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td align="right" colspan="2" valign="bottom" width="10%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"> 6.8 years </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td align="right" colspan="2" valign="bottom" width="10%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"> 6.1 years </div> </td> </tr> <tr> <td valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Expected volatility </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 57.8% </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 62.5% </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 66.8% </td> </tr> <tr style="background-color: #CCEEFF;"> <td valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Risk-free interest rate </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 0.8% </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 2.0% </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 2.3% </td> </tr> <tr> <td valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Dividend yield </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> - %  </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> - % </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> - % </td> </tr> </table> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Expected Option Term - This is the weighted average period of time over which the options granted are expected to remain outstanding giving consideration to our historical exercise patterns.  Options granted have a maximum term of ten years and an increase in the expected term will increase compensation expense. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Expected Volatility – The stock volatility for each grant is measured using the weighted average of historical daily price changes of our common stock over the most recent period approximately equal to the expected option term of the grant.  An increase in the expected volatility factor will increase compensation expense. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Risk-Free Interest Rate - This is the U.S. Treasury rate in effect at the time of grant having a term approximately equal to the expected term of the option.  An increase in the risk-free interest rate will increase compensation expense. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Dividend Yield – We began paying a quarterly dividend of $.06 per share to common shareholders in December 2012. We will develop an assumption for our dividend yield beginning with stock option grants made in 2013. An increase in the dividend yield will decrease compensation expense. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> For the years ending December 31, 2012, 2011 and 2010, we recorded $520,000, $587,000, and $565,000 of share-based compensation expense, respectively, included primarily in general and administrative expense in our Consolidated Statements of Income.  We also recorded income tax benefits of approximately $183,000, $195,000, and $186,000 in 2012, 2011, and 2010 respectively, related to such share-based compensation.  At December 31, 2012, these benefits are recorded as a deferred tax asset in the Consolidated Balance Sheets. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> The 1996 Stock Plan, 1996 Directors’ Stock Plan, 2001 Employee Stock Plan and 2005 Equity Incentive Plan option activity is summarized below: </div> <table cellpadding="0" cellspacing="0" width="60%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"> <tr> <td valign="bottom" width="46%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block">   </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> Number of Shares </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> Weighted Average Exercise Price </div> </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="12%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> Weighted Average Remaining Contractual Term </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> Aggregate Intrinsic Value </div> </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="46%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Outstanding at December 31, 2011 </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="11%" style="TEXT-ALIGN: right"> 816,708 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="11%" style="TEXT-ALIGN: right"> 8.06 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="12%">   </td> <td valign="bottom" width="1%">   </td> <td colspan="2" valign="bottom" width="12%">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr> <td align="left" valign="bottom" width="46%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"> Granted </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="11%" style="TEXT-ALIGN: right"> 145,000 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="11%" style="TEXT-ALIGN: right"> 6.91 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="12%">   </td> <td valign="bottom" width="1%">   </td> <td colspan="2" valign="bottom" width="12%">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="46%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"> Exercised </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="11%" style="TEXT-ALIGN: right"> (51,122) </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="11%" style="TEXT-ALIGN: right"> 3.37 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="12%">   </td> <td valign="bottom" width="1%">   </td> <td colspan="2" valign="bottom" width="12%">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr> <td align="left" valign="bottom" width="46%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"> Forfeited </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="11%" style="TEXT-ALIGN: right"> (60,125) </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="11%" style="TEXT-ALIGN: right"> 7.42 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="12%">   </td> <td valign="bottom" width="1%">   </td> <td colspan="2" valign="bottom" width="12%">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="46%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"> Cancelled </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="11%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> (500) </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="11%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 7.45 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="12%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: left">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> </tr> <tr> <td align="left" valign="bottom" width="46%" style="PADDING-BOTTOM: 4px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Outstanding at December 31, 2012 </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 849,961 </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 8.19 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 5.4 years </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 765,000 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="46%" style="PADDING-BOTTOM: 4px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Options exercisable at December 31, 2012 </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 525,961 </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 8.85 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 3.7 years </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 463,000 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> </tr> <tr> <td align="left" valign="bottom" width="46%" style="PADDING-BOTTOM: 4px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Options vested or expected to vest </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 775,860 </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 7.84 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 5.9 years </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 737,000 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> </tr> </table> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> 12. Stock incentive plans (continued) </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Shares that are issued upon exercise of employee stock options are newly issued shares and not issued from treasury stock.  As of December 31, 2012, unrecognized compensation cost related to stock options is approximately $1,018,000, which is expected to be recognized over a weighted average period of 2.5 years. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> The total intrinsic value of stock options exercised was $222,000, $1,576,000 and $299,000 and the total fair value of stock options vested was $641,000, $504,000, and $424,000 during the years ended December 31, 2012, 2011 and 2010, respectively.  Cash received from option exercises was $172,000, $959,000 and $393,000 for 2012, 2011 and 2010, respectively.  We recorded a realized tax benefit in 2012 from equity-based awards of $57,000 related to options exercised which has been included as a component of cash flows from financing activities in the Consolidated Statement of Cash Flows. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Restricted stock: Under the 1996 Stock Plan, 2001 Employee Stock Plan and 2005 Equity Incentive Plan, we granted shares of restricted common stock, for no consideration, to our officers, directors and certain key employees. As of December 31, 2012, there was no unrecognized compensation cost related to restricted stock and all previously issued restricted shares are fully vested. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> We paid a portion of the 2011, 2010 and 2009 incentive bonus for the chief executive officer and chief financial officer in the form of 20,055, 14,323 and 10,204 deferred stock units, respectively, with a corresponding credit recorded to Additional Paid in Capital in the amounts of $134,000, $141,000 and $77,000 in 2012, 2011 and 2010, respectively.  Such deferred stock units were granted in March 2012, 2011 and 2010, respectively, and were fully vested at the time of grant.  These units will be converted three years from the grant date to shares of the Company’s common stock on a one-for-one basis.  The weighted average exercise price of the deferred stock units was $7.92. </div>

ten

1200000

302243

6.91

10.42

7.45

ten

520000

587000

565000

183000

195000

186000

1018000

2.5

222000

1576000

299000

641000

504000

424000

172000

959000

393000

57000

134000

141000

77000

7.92

0.578

0.625

0.668

0.008

0.020

0.023

<table cellpadding="0" cellspacing="0" width="60%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"> <tr> <td valign="bottom" width="46%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block">   </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> Number of Shares </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> Weighted Average Exercise Price </div> </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="12%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> Weighted Average Remaining Contractual Term </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> Aggregate Intrinsic Value </div> </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="46%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Outstanding at December 31, 2011 </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="11%" style="TEXT-ALIGN: right"> 816,708 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="11%" style="TEXT-ALIGN: right"> 8.06 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="12%">   </td> <td valign="bottom" width="1%">   </td> <td colspan="2" valign="bottom" width="12%">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr> <td align="left" valign="bottom" width="46%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"> Granted </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="11%" style="TEXT-ALIGN: right"> 145,000 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="11%" style="TEXT-ALIGN: right"> 6.91 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="12%">   </td> <td valign="bottom" width="1%">   </td> <td colspan="2" valign="bottom" width="12%">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="46%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"> Exercised </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="11%" style="TEXT-ALIGN: right"> (51,122) </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="11%" style="TEXT-ALIGN: right"> 3.37 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="12%">   </td> <td valign="bottom" width="1%">   </td> <td colspan="2" valign="bottom" width="12%">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr> <td align="left" valign="bottom" width="46%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"> Forfeited </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="11%" style="TEXT-ALIGN: right"> (60,125) </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="11%" style="TEXT-ALIGN: right"> 7.42 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="12%">   </td> <td valign="bottom" width="1%">   </td> <td colspan="2" valign="bottom" width="12%">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="46%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"> Cancelled </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="11%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> (500) </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="11%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 7.45 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="12%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: left">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> </tr> <tr> <td align="left" valign="bottom" width="46%" style="PADDING-BOTTOM: 4px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Outstanding at December 31, 2012 </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 849,961 </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 8.19 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 5.4 years </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 765,000 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="46%" style="PADDING-BOTTOM: 4px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Options exercisable at December 31, 2012 </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 525,961 </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 8.85 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 3.7 years </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 463,000 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> </tr> <tr> <td align="left" valign="bottom" width="46%" style="PADDING-BOTTOM: 4px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Options vested or expected to vest </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 775,860 </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 7.84 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 5.9 years </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 737,000 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> </tr> </table>

816708

8.06

145000

6.91

-51122000

3.37

-60125

7.42

-500

7.45

849961

8.19

765000000

525961

8.85

463000000

775860

7.84

737000000

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> 13. Income taxes </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> The components of the income tax provision are as follows: </div> <table cellpadding="0" cellspacing="0" width="60%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"> <tr> <td valign="bottom" width="64%">   </td> <td valign="bottom" width="1%">   </td> <td colspan="8" valign="bottom" width="34%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"> Year Ended December 31, </div> </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr> <td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> (In thousands) </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2012 </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2011 </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2010 </div> </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Current: </div> </td> <td valign="bottom" width="1%">   </td> <td colspan="2" valign="bottom" width="10%">   </td> <td valign="bottom" width="1%">   </td> <td colspan="2" valign="bottom" width="10%">   </td> <td valign="bottom" width="1%">   </td> <td colspan="2" valign="bottom" width="10%">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="left"> Federal </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 1,973 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 1,695 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 1,297 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="left"> State </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 46 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 74 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 51 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr> <td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="left"> Foreign </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 40 </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 44 </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 35 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td valign="bottom" width="64%" style="PADDING-BOTTOM: 2px">   </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 2,059 </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 1,813 </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 1,383 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> </tr> <tr> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Deferred: </div> </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="left"> Federal </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> (116) </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 448 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 457 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="left"> State </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 21 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 71 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 82 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="left"> Foreign </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> - </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> - </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 1 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> </tr> <tr> <td valign="bottom" width="64%" style="PADDING-BOTTOM: 2px">   </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> (95) </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 519 </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 540 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 4px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Income tax provision </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 1,964 </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 2,332 </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 1,923 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> </tr> </table> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Our effective tax rates were 35.2%, 33.3% and 33.0% for the years ended December 31, 2012, 2011 and 2010, respectively.  The effective tax rate for 2012 is higher because it does not include a benefit from the federal research and development (“R&D”) credit, which is normally included in our tax rate, as this credit expired at the end of 2011 and was not renewed until January 2, 2013 as a component of the American Taxpayer Relief Act of 2012 (the “Act”). Since the Act was not signed until 2013, the cumulative impact of the 2012 R&D credit will be reflected as a discrete item in the first quarter of 2013. Had the R&D credit been included in our effective tax rate for 2012, it would have lowered our income tax provision and effective tax rate, by approximately $220,000 and 400 basis points. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> At December 31, 2012, we have no federal or state net operating loss carryforwards.  We also have approximately $51,000 in state tax credit carryforwards that begin to expire in 2013.  Foreign income before taxes was $92,000, $68,000 and $35,000 in 2012, 2011 and 2010, respectively. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"> 13. Income taxes (continued) </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the Consolidated Financial Statements.  Our gross deferred tax assets and liabilities were comprised of the following: </div> <table cellpadding="0" cellspacing="0" width="60%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"> <tr> <td valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="5" valign="bottom" width="22%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> December 31, </div> </td> </tr> <tr> <td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> (In thousands) </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2012 </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2011 </div> </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="76%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Deferred tax assets: </div> </td> <td valign="bottom" width="1%">   </td> <td colspan="2" valign="bottom" width="10%">   </td> <td valign="bottom" width="1%">   </td> <td colspan="2" valign="bottom" width="10%">   </td> </tr> <tr> <td align="left" valign="bottom" width="76%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 45pt; MARGIN-RIGHT: 0pt" align="left"> Foreign net operating losses </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 186 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 149 </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="76%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 45pt; MARGIN-RIGHT: 0pt" align="left"> Capitalized research and development </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 136 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 204 </td> </tr> <tr> <td align="left" valign="bottom" width="76%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 45pt; MARGIN-RIGHT: 0pt" align="left"> Inventory reserves </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 961 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 1,169 </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="76%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 45pt; MARGIN-RIGHT: 0pt" align="left"> Deferred revenue </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 79 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 98 </td> </tr> <tr> <td align="left" valign="bottom" width="76%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 45pt; MARGIN-RIGHT: 0pt" align="left"> Warranty reserve </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 96 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 148 </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="76%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 45pt; MARGIN-RIGHT: 0pt" align="left"> Stock compensation expense </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 1,036 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 810 </td> </tr> <tr> <td align="left" valign="bottom" width="76%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 45pt; MARGIN-RIGHT: 0pt" align="left"> Foreign tax and other credits </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 34 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 47 </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 45pt; MARGIN-RIGHT: 0pt" align="left"> Other liabilities and reserves </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 705 </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 595 </td> </tr> <tr> <td align="left" valign="bottom" width="76%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 81pt; MARGIN-RIGHT: 0pt" align="left"> Gross deferred tax assets </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 3,233 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 3,220 </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 81pt; MARGIN-RIGHT: 0pt" align="left"> Valuation allowance </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> (216) </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> (176) </td> </tr> <tr> <td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 117pt; MARGIN-RIGHT: 0pt" align="left"> Net deferred tax assets </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 3,017 </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 3,044 </td> </tr> <tr style="background-color: #CCEEFF;"> <td valign="bottom" width="76%">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> </tr> <tr> <td align="left" valign="bottom" width="76%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Deferred tax liabilities: </div> </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="76%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 45pt; MARGIN-RIGHT: 0pt" align="left"> Depreciation </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 365 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 422 </td> </tr> <tr> <td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 45pt; MARGIN-RIGHT: 0pt" align="left"> Other </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 37 </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 96 </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 117pt; MARGIN-RIGHT: 0pt" align="left"> Net deferred tax liabilities </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 402 </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 518 </td> </tr> <tr> <td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 4px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Total net deferred tax assets </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 2,615 </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 2,526 </td> </tr> </table> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> A valuation allowance of $216,000 has been established for foreign net operating  loss carryforwards of $186,000 and state tax credit carryforwards of $30,000 that are not expected to be used. The following table summarizes the activity recorded in the valuation allowance on the deferred tax assets: </div> <table cellpadding="0" cellspacing="0" width="60%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"> <tr> <td valign="bottom" width="64%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="10" valign="bottom" width="34%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> Year ended December 31, </div> </td> </tr> <tr> <td valign="bottom" width="64%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> (In thousands) </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2012 </div> </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2011 </div> </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2010 </div> </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Balance, beginning of period </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 176 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 125 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 76 </td> </tr> <tr> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Additions charged to income tax provision </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 40 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 51 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 55 </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Reductions credited to income tax provision </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> - </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> - </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> (6) </td> </tr> <tr> <td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 4px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Balance, end of period </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 216 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 176 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 125 </td> </tr> </table> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Differences between the U.S. statutory federal income tax rate and our effective income tax rate are analyzed below: </div> <table cellpadding="0" cellspacing="0" width="60%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"> <tr> <td valign="bottom" width="64%">   </td> <td valign="bottom" width="1%">   </td> <td colspan="8" valign="bottom" width="34%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"> Year Ended December 31, </div> </td> </tr> <tr> <td valign="bottom" width="64%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2012 </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2011 </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2010 </div> </td> </tr> <tr> <td valign="bottom" width="64%">   </td> <td valign="bottom" width="1%">   </td> <td colspan="2" valign="bottom" width="10%">   </td> <td valign="bottom" width="1%">   </td> <td colspan="2" valign="bottom" width="10%">   </td> <td valign="bottom" width="1%">   </td> <td colspan="2" valign="bottom" width="10%">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Federal statutory tax rate </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 34.0% </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 34.0% </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 34.0% </td> </tr> <tr> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> State income taxes, net of federal income taxes </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 0.8 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 1.4 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 1.5 </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Tax benefit from tax credits, net of valuation allowance </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> - </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> (2.7) </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> (2.9) </td> </tr> <tr> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Valuation allowance and tax accruals </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 0.9 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 0.7 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 0.8 </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Permanent items </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> (0.8) </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> (0.4) </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> (0.2) </td> </tr> <tr> <td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Other </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 0.3 </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 0.3 </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> (0.2) </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 4px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Effective tax rate </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 35.2% </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 33.3% </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 33.0% </td> </tr> </table> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> At December 31, 2012 and 2011, we had approximately $251,000 and $228,000 of total gross unrecognized tax benefits that, if recognized, would favorably affect the effective income tax rate in any future periods.  We are not aware of any events that could occur within the next twelve months that could cause a significant change in the total amount of unrecognized tax benefits.  A tabular reconciliation of the gross amounts of unrecognized tax benefits at the beginning and end of the year is as follows: </div> <table cellpadding="0" cellspacing="0" width="60%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"> <tr> <td valign="bottom" width="76%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">  (In thousands) </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2012 </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2011 </div> </td> </tr> <tr style="background-color: #CCEEFF;"> <td valign="bottom" width="76%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Unrecognized tax benefits as of January 1 </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 228 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 201 </td> </tr> <tr> <td align="left" valign="bottom" width="76%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Tax positions taken during the current period </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 23 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 53 </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Lapse of statute of limitations </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> - </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> (26) </td> </tr> <tr> <td valign="bottom" width="76%" style="PADDING-BOTTOM: 4px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Unrecognized tax benefits as of December 31 </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 251 </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 228 </td> </tr> </table> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> 13. Income taxes (continued) </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> We are subject to U.S. federal income tax as well as income tax of certain state and foreign jurisdictions.  We have substantially concluded all U.S. federal income tax, state and local, and foreign tax matters through 2003.  During 2008, a limited scope examination of our 2005 and 2006 federal tax returns was completed.  However, our federal tax returns for the years 2004 through 2011 remain open to examination. Various state and foreign tax jurisdiction tax years remain open to examination as well, though we believe that any additional assessment would be immaterial to the Consolidated Financial Statements.  Subsequent to December 31, 2012, we were notified that our 2010 federal tax return will be examined. No state or foreign tax jurisdiction income tax returns are currently under examination. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> We do not anticipate that the total unrecognized tax benefits of approximately $251,000 will significantly change due to the settlement of audits and the expiration of statute of limitations prior to December 31, 2013. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> We recognize interest and penalties related to uncertain tax positions in the income tax provision.  As of December 31, 2012 and 2011, we have approximately $46,000 and $23,000, respectively, of accrued interest and penalties related to uncertain tax positions. </div>

0.352

0.333

0.330

220000

$51,000

92000

68000

35000

216000

186000

30000

251000

228000

251000

46000

23000

<table cellpadding="0" cellspacing="0" width="60%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"> <tr> <td valign="bottom" width="64%">   </td> <td valign="bottom" width="1%">   </td> <td colspan="8" valign="bottom" width="34%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"> Year Ended December 31, </div> </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr> <td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> (In thousands) </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2012 </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2011 </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2010 </div> </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Current: </div> </td> <td valign="bottom" width="1%">   </td> <td colspan="2" valign="bottom" width="10%">   </td> <td valign="bottom" width="1%">   </td> <td colspan="2" valign="bottom" width="10%">   </td> <td valign="bottom" width="1%">   </td> <td colspan="2" valign="bottom" width="10%">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="left"> Federal </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 1,973 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 1,695 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 1,297 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="left"> State </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 46 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 74 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 51 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr> <td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="left"> Foreign </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 40 </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 44 </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 35 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td valign="bottom" width="64%" style="PADDING-BOTTOM: 2px">   </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 2,059 </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 1,813 </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 1,383 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> </tr> <tr> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Deferred: </div> </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="left"> Federal </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> (116) </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 448 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 457 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="left"> State </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 21 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 71 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 82 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="left"> Foreign </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> - </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> - </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 1 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> </tr> <tr> <td valign="bottom" width="64%" style="PADDING-BOTTOM: 2px">   </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> (95) </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 519 </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 540 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 4px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Income tax provision </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 1,964 </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 2,332 </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 1,923 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> </tr> </table>

1973000

1695000

1297000

46000

74000

51000

40000

44000

35000

2059000

1813000

1383000

-116000

448000

457000

21000

71000

82000

1000

<table cellpadding="0" cellspacing="0" width="60%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"> <tr> <td valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="5" valign="bottom" width="22%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> December 31, </div> </td> </tr> <tr> <td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> (In thousands) </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2012 </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2011 </div> </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="76%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Deferred tax assets: </div> </td> <td valign="bottom" width="1%">   </td> <td colspan="2" valign="bottom" width="10%">   </td> <td valign="bottom" width="1%">   </td> <td colspan="2" valign="bottom" width="10%">   </td> </tr> <tr> <td align="left" valign="bottom" width="76%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 45pt; MARGIN-RIGHT: 0pt" align="left"> Foreign net operating losses </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 186 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 149 </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="76%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 45pt; MARGIN-RIGHT: 0pt" align="left"> Capitalized research and development </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 136 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 204 </td> </tr> <tr> <td align="left" valign="bottom" width="76%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 45pt; MARGIN-RIGHT: 0pt" align="left"> Inventory reserves </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 961 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 1,169 </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="76%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 45pt; MARGIN-RIGHT: 0pt" align="left"> Deferred revenue </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 79 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 98 </td> </tr> <tr> <td align="left" valign="bottom" width="76%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 45pt; MARGIN-RIGHT: 0pt" align="left"> Warranty reserve </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 96 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 148 </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="76%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 45pt; MARGIN-RIGHT: 0pt" align="left"> Stock compensation expense </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 1,036 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 810 </td> </tr> <tr> <td align="left" valign="bottom" width="76%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 45pt; MARGIN-RIGHT: 0pt" align="left"> Foreign tax and other credits </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 34 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 47 </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 45pt; MARGIN-RIGHT: 0pt" align="left"> Other liabilities and reserves </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 705 </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 595 </td> </tr> <tr> <td align="left" valign="bottom" width="76%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 81pt; MARGIN-RIGHT: 0pt" align="left"> Gross deferred tax assets </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 3,233 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 3,220 </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 81pt; MARGIN-RIGHT: 0pt" align="left"> Valuation allowance </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> (216) </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> (176) </td> </tr> <tr> <td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 117pt; MARGIN-RIGHT: 0pt" align="left"> Net deferred tax assets </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 3,017 </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 3,044 </td> </tr> <tr style="background-color: #CCEEFF;"> <td valign="bottom" width="76%">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> </tr> <tr> <td align="left" valign="bottom" width="76%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Deferred tax liabilities: </div> </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="76%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 45pt; MARGIN-RIGHT: 0pt" align="left"> Depreciation </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 365 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 422 </td> </tr> <tr> <td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 45pt; MARGIN-RIGHT: 0pt" align="left"> Other </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 37 </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 96 </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 117pt; MARGIN-RIGHT: 0pt" align="left"> Net deferred tax liabilities </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 402 </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 518 </td> </tr> <tr> <td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 4px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Total net deferred tax assets </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 2,615 </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 2,526 </td> </tr> </table>

186000

149000

136000

204000

961000

1169000

79000

98000

96000

148000

1036000

810000

34000

47000

-705000

-595000

3233000

3220000

176000

3017000

3044000

365000

422000

-37000

-96000

402000

518000

2615000

2526000

176000

125000

76000

40000

51000

55000

-6000

216000

0.340

0.008

0.014

0.015

-0.027

-0.029

0.009

0.007

0.008

-0.008

-0.004

-0.002

0.003

-0.002

<table cellpadding="0" cellspacing="0" width="60%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"> <tr> <td valign="bottom" width="76%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">  (In thousands) </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2012 </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2011 </div> </td> </tr> <tr style="background-color: #CCEEFF;"> <td valign="bottom" width="76%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Unrecognized tax benefits as of January 1 </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 228 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 201 </td> </tr> <tr> <td align="left" valign="bottom" width="76%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Tax positions taken during the current period </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 23 </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 53 </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Lapse of statute of limitations </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> - </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> (26) </td> </tr> <tr> <td valign="bottom" width="76%" style="PADDING-BOTTOM: 4px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Unrecognized tax benefits as of December 31 </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 251 </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 228 </td> </tr> </table>

201000

23000

53000

-26000

<div style="TEXT-INDENT: 0pt; DISPLAY: block"> 14. Earnings per share </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> For 2012, 2011 and 2010, earnings per share were computed as follows (in thousands, except per share amounts): </div> <table cellpadding="0" cellspacing="0" width="60%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"> <tr> <td valign="bottom" width="64%">   </td> <td valign="bottom" width="1%">   </td> <td colspan="10" valign="bottom" width="34%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"> Year Ended December 31, </div> </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr> <td valign="bottom" width="64%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2012 </div> </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2011 </div> </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2010 </div> </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 4px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Net income </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 3,621 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 4,676 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 3,904 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> </tr> <tr> <td valign="bottom" width="64%">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Shares: </div> </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Basic:  Weighted average common shares outstanding </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 9,032 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 9,443 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 9,390 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Add:  Dilutive effect of outstanding options as determined by the treasury stock method </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 89 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 160 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 200 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> </tr> <tr> <td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 4px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Diluted:  Weighted average common and common equivalent shares outstanding </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 9,121 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 9,603 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 9,590 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td valign="bottom" width="64%">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Net income per common share: </div> </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="left"> Basic </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 0.40 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 0.50 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 0.42 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="left"> Diluted </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 0.40 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 0.49 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 0.41 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> </table> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> We compute earnings per share using the two-class method, which is an earnings allocation formula that determines earnings per share for common stock and participating securities.  Restricted stock granted by the Company is considered a participating security since it contains a non-forfeitable right to dividends. </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Certain stock-based awards were not included in the full year computation of earnings per diluted share because the effect would be anti-dilutive.  Anti-dilutive stock options, restricted shares and deferred stock units excluded from the computation of earnings per dilutive share were 585,125, 309,250, and 367,750, at December 31, 2012, 2011 and 2010 respectively. </div>

585125309250

367750

<table cellpadding="0" cellspacing="0" width="60%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"> <tr> <td valign="bottom" width="64%">   </td> <td valign="bottom" width="1%">   </td> <td colspan="10" valign="bottom" width="34%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"> Year Ended December 31, </div> </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr> <td valign="bottom" width="64%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2012 </div> </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2011 </div> </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2010 </div> </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 4px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Net income </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 3,621 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 4,676 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 3,904 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> </tr> <tr> <td valign="bottom" width="64%">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Shares: </div> </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Basic:  Weighted average common shares outstanding </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 9,032 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 9,443 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 9,390 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Add:  Dilutive effect of outstanding options as determined by the treasury stock method </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 89 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 160 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 200 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> </tr> <tr> <td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 4px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Diluted:  Weighted average common and common equivalent shares outstanding </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 9,121 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 9,603 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 9,590 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td valign="bottom" width="64%">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Net income per common share: </div> </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="left"> Basic </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 0.40 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 0.50 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 0.42 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="left"> Diluted </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 0.40 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 0.49 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 0.41 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> </table>

89000

160000

200000

<div style="TEXT-INDENT: 0pt; DISPLAY: block"> 15. Stock repurchase program </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> We maintain a stock repurchase program (the “Stock Repurchase Program”) whereby we are authorized to repurchase up to $15,000,000, as increased from $10,000,000 in March 2012 through Board of Director approval, of our outstanding shares of common stock from time to time in the open market over a three-year period ending May 27, 2013, depending on market conditions, share price and other factors.  We use the cost method to account for treasury stock purchases, under which the price paid for the stock is charged to the treasury stock account.  Repurchases of our common stock are accounted for as of the settlement date. For the year ended December 31, 2012, we repurchased 721,184 shares of common stock for approximately $5,938,000, at an average price of $8.23 per share, under the Stock Repurchase Program. From January 1, 2005 through December 31, 2012, we repurchased a total of 2,182,877 shares of common stock for approximately $17,333,000 under all of our stock repurchase programs, at an average price of $7.94 per share. At December 31, 2012, approximately $6,206,000 remains authorized for future repurchases under the Stock Repurchase Program. </div>

$15,000,000

721184

5938000

8.23

2182877

17333000

7.94

$6,206,000

<div style="TEXT-INDENT: 0pt; DISPLAY: block"> 16. Geographic area information </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Information regarding our operations by geographic area is contained in the following table.  These amounts in the geographic area table are based on the location of the customer and vendor. </div> <table cellpadding="0" cellspacing="0" width="60%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"> <tr> <td valign="bottom" width="64%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="10" valign="bottom" width="34%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> Year Ended December 31, </div> </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> </tr> <tr> <td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> (In thousands) </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2012 </div> </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2011 </div> </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2010 </div> </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Net sales: </div> </td> <td valign="bottom" width="1%">   </td> <td colspan="2" valign="bottom" width="10%">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%">   </td> <td colspan="2" valign="bottom" width="10%">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%">   </td> <td colspan="2" valign="bottom" width="10%">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"> United States </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 49,932 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 49,301 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 44,101 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"> International </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 18,454 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 16,668 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 19,093 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> </tr> <tr> <td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 4px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="left"> Total </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 68,386 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 65,969 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 63,194 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td valign="bottom" width="64%">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Fixed assets, net: </div> </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"> United States </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 1,941 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 2,129 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 2,694 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr> <td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"> International </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 1,361 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 1,229 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 1,377 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 4px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="left"> Total </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 3,302 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 3,358 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 4,071 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> </tr> </table> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> Sales to international customers were approximately 27%, 25%, and 30% in 2012, 2011, and 2010 respectively.  Sales to the United Kingdom represented 52%, 51%, and 43%, sales to the Pacific Rim (which includes Australia and Asia) represented 18%, 25%, and 18%, and sales to Canada represented 16%, 6%, and 20% of total international sales in 2012, 2011, and 2010 respectively.  International long-lived assets consist of net fixed assets located at our foreign subsidiary in the United Kingdom as well as our contract manufacturers in China, Malaysia and Mexico. </div>

0.27

0.25

0.30

0.52

0.51

0.43

<table cellpadding="0" cellspacing="0" width="60%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"> <tr> <td valign="bottom" width="64%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="10" valign="bottom" width="34%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> Year Ended December 31, </div> </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> </tr> <tr> <td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> (In thousands) </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2012 </div> </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2011 </div> </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> 2010 </div> </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Net sales: </div> </td> <td valign="bottom" width="1%">   </td> <td colspan="2" valign="bottom" width="10%">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%">   </td> <td colspan="2" valign="bottom" width="10%">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%">   </td> <td colspan="2" valign="bottom" width="10%">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"> United States </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 49,932 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 49,301 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 44,101 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"> International </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 18,454 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 16,668 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 19,093 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> </tr> <tr> <td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 4px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="left"> Total </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 68,386 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 65,969 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 63,194 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td valign="bottom" width="64%">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> Fixed assets, net: </div> </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="64%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"> United States </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 1,941 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 2,129 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 2,694 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr> <td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"> International </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 1,361 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 1,229 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: right"> 1,377 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 4px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="left"> Total </div> </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 3,302 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 3,358 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> <td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px"> $ </td> <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px double; TEXT-ALIGN: right"> 4,071 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">   </td> </tr> </table>

68386

65969

63194

1941

2129

2694

1361

1229

1377

3302

3358

4071

<table cellpadding="0" cellspacing="0" width="60%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"> <tr> <td valign="bottom" width="52%" style="PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="14" valign="bottom" width="46%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> Quarter Ended </div> </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> </tr> <tr> <td valign="bottom" width="52%" style="PADDING-BOTTOM: 2px"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> (In thousands, except per share amounts) </div> </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> March 31 </div> </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> June 30 </div> </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> September 30 </div> </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">   </td> <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"> December 31 </div> </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">   </td> </tr> <tr> <td valign="bottom" width="52%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> 2012: </div> </td> <td valign="bottom" width="1%">   </td> <td colspan="2" valign="bottom" width="10%">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%">   </td> <td colspan="2" valign="bottom" width="10%">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%">   </td> <td colspan="2" valign="bottom" width="10%">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%">   </td> <td colspan="2" valign="bottom" width="10%">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td valign="bottom" width="52%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="justify"> Net sales </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 17,559 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 15,853 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 15,358 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 19,616 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr> <td valign="bottom" width="52%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="justify"> Gross profit </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 6,778 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 5,842 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 5,679 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 7,683 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td valign="bottom" width="52%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="justify"> Net income </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 1,208 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 508 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 23 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 1,882 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr> <td valign="bottom" width="52%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="justify"> Net income per share: </div> </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td valign="bottom" width="52%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 72pt; MARGIN-RIGHT: 0pt" align="justify"> Basic </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 0.13 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 0.06 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 0.00 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 0.21 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr> <td valign="bottom" width="52%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 72pt; MARGIN-RIGHT: 0pt" align="justify"> Diluted </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 0.13 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 0.06 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 0.00 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 0.21 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> </table>

17559000

15853000

15358000

19616000

6778000

5842000

5679000

7683000

1208000

508000

23000

1882000

0.13

0.06

0.00

0.21

0.13

0.06

0.00

0.21

<table cellpadding="0" cellspacing="0" width="60%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"> <tr> <td valign="bottom" width="52%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> 2011: </div> </td> <td valign="bottom" width="1%">   </td> <td colspan="2" valign="bottom" width="10%">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%">   </td> <td colspan="2" valign="bottom" width="10%">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%">   </td> <td colspan="2" valign="bottom" width="10%">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%">   </td> <td colspan="2" valign="bottom" width="10%">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td valign="bottom" width="52%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="justify"> Net sales </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 20,694 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 17,519 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 14,111 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: right"> $ </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 13,645 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr> <td valign="bottom" width="52%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="justify"> Gross profit </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 6,932 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 6,663 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 5,350 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 5,681 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td valign="bottom" width="52%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="justify"> Net income </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 1,825 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 1,442 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 839 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 570 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr> <td valign="bottom" width="52%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="justify"> Net income per share: </div> </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right">   </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr style="background-color: #CCEEFF;"> <td valign="bottom" width="52%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 72pt; MARGIN-RIGHT: 0pt" align="justify"> Basic </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 0.19 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 0.15 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 0.09 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 0.06 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> <tr> <td valign="bottom" width="52%"> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 72pt; MARGIN-RIGHT: 0pt" align="justify"> Diluted </div> </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 0.19 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 0.15 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 0.09 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td align="right" valign="bottom" width="1%">   </td> <td valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> <td valign="bottom" width="9%" style="TEXT-ALIGN: right"> 0.06 </td> <td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">   </td> </tr> </table>

20694000

17519000

14111000

13645000

6932000

6663000

5350000

5681000

1825000

1442000

839000

570000

0.19

0.15

0.09

0.06

0.19

0.15

0.09

0.06