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TRANSACT TECHNOLOGIES INC
0001017303
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2017
Q2
10-Q
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<div style="font-family: 'Times New Roman', Times, serif; font-size: 9pt;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-weight: bold; text-align: justify; line-height: 11.4pt;">1. Basis of presentation</div><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 11.4pt;">The accompanying unaudited financial statements of TransAct Technologies Incorporated ("the Company") have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information.  Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America to be included in full year financial statements.  In the opinion of management, all adjustments considered necessary for a fair statement of the results for the periods presented have been included and are of a normal recurring nature.  The December 31, 2016 Condensed Consolidated Balance Sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America.  These interim financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2016 included in our Annual Report on Form 10-K.</div><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 11.4pt;">The financial position and results of operations of our U.K. subsidiary are measured using local currency as the functional currency.  Assets and liabilities of such subsidiary have been translated at the end of period exchange rates, and related revenues and expenses have been translated at the weighted average exchange rates with the resulting translation gain or loss recorded in accumulated other comprehensive income (loss) in the Condensed Consolidated Balance Sheets.  Transaction gains and losses are included in other income (expenses) in the Condensed Consolidated Statements of Income.</div><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 11.4pt;">The results of operations for the three and six months ended June 30, 2017 are not necessarily indicative of the results to be expected for the full year.</div><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div></div>
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<div style="font-family: 'Times New Roman', Times, serif; font-size: 9pt;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-weight: bold; text-align: justify; line-height: 11.4pt;">4. Earnings per share</div><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 11.4pt;">The following table sets forth the reconciliation of basic weighted average shares outstanding and diluted weighted average shares outstanding:</div><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div><table cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times, serif; width: 100%;"><tr><td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;"> </div></td><td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;"> </td><td colspan="6" valign="bottom" style="vertical-align: bottom; border-bottom: #000000 2px solid;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-weight: bold; text-align: center; line-height: 11.4pt;">Three Months Ended June 30,</div></td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; padding-bottom: 2px; text-align: left;"> </td><td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;"> </td><td colspan="6" valign="bottom" style="vertical-align: bottom; border-bottom: #000000 2px solid;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-weight: bold; text-align: center; line-height: 11.4pt;">Six Months Ended June 30,</div></td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; padding-bottom: 2px; text-align: left;"> </td></tr><tr><td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;"> </div></td><td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;"> </td><td colspan="2" valign="bottom" style="vertical-align: bottom; border-bottom: #000000 2px solid;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-weight: bold; text-align: center; line-height: 11.4pt;">2017</div></td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; padding-bottom: 2px; text-align: left;"> </td><td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;"> </td><td colspan="2" valign="bottom" style="vertical-align: bottom; border-bottom: #000000 2px solid;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: center; line-height: 11.4pt;">2016</div></td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; padding-bottom: 2px; text-align: left;"> </td><td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;"> </td><td colspan="2" valign="bottom" style="vertical-align: bottom; border-bottom: #000000 2px solid;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-weight: bold; text-align: center; line-height: 11.4pt;">2017</div></td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; padding-bottom: 2px; text-align: left;"> </td><td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;"> </td><td colspan="2" valign="bottom" style="vertical-align: bottom; border-bottom: #000000 2px solid;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: center; line-height: 11.4pt;">2016</div></td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; padding-bottom: 2px; text-align: left;"> </td></tr><tr><td valign="bottom" style="vertical-align: bottom;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;"> </div></td><td valign="bottom" style="vertical-align: bottom;"> </td><td colspan="14" valign="bottom" style="vertical-align: bottom;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-style: italic; text-align: center; line-height: 11.4pt;">(In thousands, except per share data)</div></td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; text-align: left;"> </td></tr><tr><td valign="bottom" style="vertical-align: bottom;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;"> </div></td><td valign="bottom" style="vertical-align: bottom;"> </td><td colspan="2" valign="bottom" style="vertical-align: bottom;"> </td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; text-align: left;"> </td><td valign="bottom" style="vertical-align: bottom;"> </td><td colspan="2" valign="bottom" style="vertical-align: bottom;"> </td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; text-align: left;"> </td><td valign="bottom" style="vertical-align: bottom;"> </td><td colspan="2" valign="bottom" style="vertical-align: bottom;"> </td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; text-align: left;"> </td><td valign="bottom" style="vertical-align: bottom;"> </td><td colspan="2" valign="bottom" style="vertical-align: bottom;"> </td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; text-align: left;"> </td></tr><tr><td valign="bottom" style="vertical-align: bottom;"> </td><td valign="bottom" style="vertical-align: bottom;"> </td><td colspan="2" valign="bottom" style="vertical-align: bottom;"> </td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; text-align: left;"> </td><td valign="bottom" style="vertical-align: bottom;"> </td><td colspan="2" valign="bottom" style="vertical-align: bottom;"> </td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; text-align: left;"> </td><td valign="bottom" style="vertical-align: bottom;"> </td><td colspan="2" valign="bottom" style="vertical-align: bottom;"> </td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; text-align: left;"> </td><td valign="bottom" style="vertical-align: bottom;"> </td><td colspan="2" valign="bottom" style="vertical-align: bottom;"> </td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; text-align: left;"> </td></tr><tr><td valign="bottom" style="width: 52%; vertical-align: bottom; padding-bottom: 4px; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;">Net income</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 4px; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">867</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 4px; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">753</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 4px; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">1,810</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 4px; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">1,378</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #cceeff;"> </td></tr><tr><td valign="bottom" style="width: 52%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"> </td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"> </td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"> </td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"> </td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td></tr><tr><td valign="bottom" style="width: 52%; vertical-align: bottom; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;">Shares:</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #cceeff;"> </td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #cceeff;"> </td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #cceeff;"> </td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #cceeff;"> </td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td></tr><tr><td valign="bottom" style="width: 52%; vertical-align: bottom; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;">Basic:  Weighted average common shares outstanding</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">7,408</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">7,689</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">7,402</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">7,761</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td></tr><tr><td valign="bottom" style="width: 52%; vertical-align: bottom; padding-bottom: 2px; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;">Add:  Dilutive effect of outstanding options and restricted stock units as determined by the treasury stock method</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 2px; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">106</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 2px; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">54</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 2px; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">67</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 2px; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">52</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; background-color: #cceeff;"> </td></tr><tr><td valign="bottom" style="width: 52%; vertical-align: bottom; padding-bottom: 4px; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; margin-left: 27pt; line-height: 11.4pt; text-indent: -27pt;">Diluted:  Weighted average common and common equivalent shares outstanding</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 4px; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">7,514</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 4px; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">7,743</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 4px; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">7,469</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 4px; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">7,813</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #ffffff;"> </td></tr><tr><td valign="bottom" style="width: 52%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #cceeff;"> </td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #cceeff;"> </td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #cceeff;"> </td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #cceeff;"> </td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td></tr><tr><td valign="bottom" style="width: 52%; vertical-align: bottom; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;">Net income per common share:</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"> </td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"> </td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"> </td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"> </td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td></tr><tr><td valign="bottom" style="width: 52%; vertical-align: bottom; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; margin-left: 18pt; line-height: 11.4pt;">Basic</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">0.12</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">0.10</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">0.24</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">0.18</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td></tr><tr><td valign="bottom" style="width: 52%; vertical-align: bottom; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; margin-left: 18pt; line-height: 11.4pt;">Diluted</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">0.12</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">0.10</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">0.24</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">0.18</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td></tr></table><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 11.4pt;">The computation of diluted earnings per share excludes the effect of the potential exercise of stock awards, including stock options and restricted stock units, when the average market price of the common stock is lower than the exercise price of the related stock award during the period.  These outstanding stock awards are not included in the computation of diluted earnings per share because the effect would be anti-dilutive.  For the three months ended June 30, 2017 and 2016, there were 407,000 and 827,000, respectively, of potentially dilutive shares consisting of stock awards that were excluded from the calculation of earnings per diluted share.  For the six months ended June 30, 2017 and 2016, there were 732,000 and 827,000, respectively, of potentially dilutive shares consisting of stock awards that were excluded from the calculation of earnings per diluted share.</div><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;"> </div></div>
-5000
-12000
0.331
0.329
0.32
0.326
-18000
0
105000
131000
81000
168000
277000
267000
249000
272000
123000
136000
3122000
3281000
-9000
12000
5000
0
1935000
4082000
2070000
3852000
2621000
2621000
5983000
6430000
12523000
11868000
1296000
2698000
2044000
1108000
<div style="font-family: 'Times New Roman', Times, serif; font-size: 9pt;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-weight: bold; text-align: justify; line-height: 11.4pt;">6. Income taxes</div><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 11.4pt;">We recorded an income tax provision for the second quarter of 2017 of $429,000 at an effective tax rate of 33.1%, compared to an income tax provision during the second quarter of 2016 of $355,000 at an effective tax rate of 32.0%.  For the six months ended June 30, 2017, we recorded an income tax provision of $888,000 at an effective tax rate of 32.9%, compared to an income tax provision during the six months ended June 30, 2016 of $666,000 at an effective tax rate of 32.6%.  </div><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 11.4pt;">We are subject to U.S. federal income tax, as well as income tax in certain state and foreign jurisdictions.  We have substantially concluded all U.S. federal income tax, state and local, and foreign tax regulatory examination matters through 2012.  During 2013, an examination of our 2010 federal tax return was completed.  However, our federal tax returns for the years 2013 through 2015 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 Condensed Consolidated Financial Statements.  No state or foreign tax jurisdiction income tax returns are currently under examination. As of June 30, 2017, we had $111,000 of total gross unrecognized tax benefits that, if recognized, would favorably affect the effective income tax rate in any future periods. We expect $31,000 of our  $111,000 of unrecognized tax benefits will reverse in 2017 upon expiration of the statute of limitations.</div><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 11.4pt;">We recognize interest and penalties related to uncertain tax positions in the income tax provision.  As of June 30, 2017, we have $25,000 of accrued interest and penalties related to uncertain tax positions.</div><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div></div>
888000
429000
355000
666000
210000
0
1871000
-1527000
-1272000
-28000
-189000
-2273000
205000
209000
3203000
-3184000
45000
299000
54000
106000
67000
52000
386000
545000
-16000
-7000
-8000
-11000
9707000
9521000
2504000
3401000
<div style="font-family: 'Times New Roman', Times, serif; font-size: 9pt;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-weight: bold; text-align: justify; line-height: 11.4pt;">2. Inventories, net</div><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 11.4pt;">The components of inventories, net are:</div><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div><table cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times, serif; width: 100%;"><tr><td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;"> </div></td><td colspan="3" valign="bottom" style="vertical-align: bottom; border-bottom: #000000 2px solid;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-weight: bold; text-align: center; line-height: 11.4pt;">June 30, </div><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-weight: bold; text-align: center; line-height: 11.4pt;">2017</div></td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; padding-bottom: 2px; text-align: left;"> </td><td colspan="3" valign="bottom" style="vertical-align: bottom; border-bottom: #000000 2px solid;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-weight: bold; text-align: center; line-height: 11.4pt;">December 31, </div><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-weight: bold; text-align: center; line-height: 11.4pt;">2016</div></td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; padding-bottom: 2px; text-align: left;"> </td></tr><tr><td valign="bottom" style="vertical-align: bottom;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;"> </div></td><td colspan="7" valign="bottom" style="vertical-align: bottom;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-style: italic; text-align: center; line-height: 11.4pt;">(In thousands)</div></td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; text-align: left;"> </td></tr><tr><td valign="bottom" style="vertical-align: bottom;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;"> </div></td><td colspan="3" valign="bottom" style="vertical-align: bottom;"> </td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; text-align: left;"> </td><td colspan="3" valign="bottom" style="vertical-align: bottom;"> </td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; text-align: left;"> </td></tr><tr><td valign="bottom" style="width: 76%; vertical-align: bottom; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;">Raw materials and purchased component parts</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">7,010</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">6,298</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td></tr><tr><td valign="bottom" style="width: 76%; vertical-align: bottom; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;">Work-in-process</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">7</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">8</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td></tr><tr><td valign="bottom" style="width: 76%; vertical-align: bottom; padding-bottom: 2px; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;">Finished goods</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 2px; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">2,504</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 2px; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">3,401</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; background-color: #cceeff;"> </td></tr><tr><td valign="bottom" style="width: 76%; vertical-align: bottom; padding-bottom: 4px; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;"> </div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 4px; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">9,521</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 4px; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">9,707</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #ffffff;"> </td></tr></table><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div></div>
7000
8000
6298000
7010000
7933000
6534000
32042000
31474000
7424000
6016000
518000
509000
-322000
-409000
-3482000
-1183000
1898000
3971000
867000
753000
1810000
1378000
<div style="font-family: 'Times New Roman', Times, serif; font-size: 9pt;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-weight: bold; text-align: left; line-height: 11.4pt;">7. Accounting pronouncements</div><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;">The following accounting pronouncements will be adopted in future reporting periods:</div><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 11.4pt;">In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, "Revenue from Contracts with Customers." This ASU is intended to clarify the principles for recognizing revenue by removing inconsistencies in revenue requirements; providing a more robust framework for addressing revenue issues; improving comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets; and providing more useful information to users of financial statements through improved revenue disclosure requirements. In applying the amended guidance, an entity will (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the contract's performance obligations; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. Entities have the option of using either a full retrospective approach or modified retrospective approach to adopt the amended guidance.  The amended guidance applies to all contracts with customers except those that are within the scope of other topics in the FASB Accounting Standards Codification.  We are currently evaluating the impact this ASU may have on our consolidated financial position, results of operations or cash flows.  During the first quarter of 2017 we engaged a national accounting firm to assist management in implementing the new standard.</div><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 11.4pt;">We have developed a project plan to review our revenue streams and determine the impact of the new standard, if any, to each revenue stream.  We have made significant progress on our project plan but have not finalized our evaluation on whether the new standard will result in changes to our revenue recognition policies.  During the remainder of the year we will continue to evaluate the potential impact, and if needed, establish policies, identify system impacts, integrate the standard into the financial reporting processes and systems, and develop an understanding of the financial impact of this standard on the Company's consolidated financial statements. The Company currently anticipates adopting the amended guidance using the modified retrospective transition approach, with any cumulative effect of initially adopting this standard recognized through retained earnings at the date of adoption.  The provisions of this standard are effective for interim and annual periods beginning after December 15, 2017.  We will adopt the amended guidance on January 1, 2018 at which time it becomes effective for the Company.</div><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 11.4pt;">In February 2016, the FASB issued ASU No. 2016-02, <font style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-style: italic;">Leases (Topic 842</font>), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors).  The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee.  This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively.  A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification.  Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today.  ASU 2016-02 supersedes the previous leases standard, ASC 840, <font style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-style: italic;">Leases</font>, and is effective for public entities for annual periods beginning after December 15, 2018 and for interim periods within those fiscal years.  Early adoption is permitted.  The Company is currently evaluating the impact that the adoption of ASU 2016-02 will have on its financial statements.  </div><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 11.4pt;">In January 2017, the FASB issued ASU 2017-04, <font style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-style: italic;">Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment</font>. This ASU eliminates Step 2 of the current goodwill impairment test, which requires a hypothetical purchase price allocation to measure goodwill impairment. A goodwill impairment loss will instead be measured at the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the recorded amount of goodwill. The provisions of this standard are effective for years beginning after December 15, 2019, with early adoption permitted for any impairment test performed on testing dates after January 1, 2017. The Company is currently evaluating the impact that the adoption of ASU 2017-04 will have on its financial statements.</div><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div><div style="margin-bottom: 12pt; font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 12pt;">In May 2017, the FASB issued ASU No. 2017-09, "Compensation-Stock Compensation: Scope of modification accounting".  ASU 2017-09 provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718.  ASU No. 2017-09 is effective for fiscal years beginning after December 15, 2017, with early adoption permitted, including during an interim period for which financial statements have not yet been made available for issuance.  The amendments should be applied prospectively to an award modified on or after the adoption date.  The Company is -currently evaluating the impact that the adoption of ASU 2017-09 will have on its financial statements.</div><div style="margin-bottom: 12pt; font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 12pt;"> </div><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 11.4pt;">The following accounting pronouncements were adopted during 2017:</div><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 11.4pt;">In July 2015, FASB issued ASU 2015-11, "Simplifying the Measurement of Inventory." This ASU changes the measurement principle for inventory from the lower of cost or market to lower of cost or net realizable value. Net realizable value is defined as the estimated selling prices in the ordinary course of business less reasonably predictable costs of completion, disposal and transportation. The provisions of this ASU became effective for years beginning after December 15, 2016.  The Company adopted this guidance in the first quarter of 2017 and the adoption has not resulted in a change to the value of inventory.</div><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 11.4pt;">In March 2016, the FASB issued ASU 2016-09, "Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting."   This ASU is intended to simplify several aspects of the accounting for share based payment transactions. The amended guidance requires that all tax effects related to share-based payments are recorded at settlement (or expiration) through the income statement, rather than through equity. Cash flows related to excess tax benefits will no longer be separately classified as a financing activity apart from other income tax cash flows. The amended guidance also allows for an employer to repurchase additional employee shares for tax withholding purposes without requiring liability accounting and clarifies that all cash payments made to tax authorities on an employee's behalf for withheld shares should be presented as a financing activity on the Consolidated Statements of Cash Flows. This ASU became effective for years beginning after December 15, 2016, and interim periods within those fiscal years, beginning after December 15, 2016.</div><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 11.4pt;">The Company adopted ASU 2016-09 in the first quarter of 2017.  This adoption required the Company to reflect any adjustments as of January 1, 2017, the beginning of the annual period that includes the interim period of adoption.  There was no impact during the first six months of 2017 upon adopting the standard, as we had no stock options exercised that required us to recognize an excess tax benefit in the provision for income taxes.  In the first six months of 2016, there were 3,750 options exercised that required $1,000 of excess tax benefits to be recorded in additional paid-in-capital, as was required pursuant to the prior accounting guidance.</div><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 11.4pt;">In connection with the adoption of ASU 2016-09, in the first quarter of 2017, the Company made an accounting policy election to no longer estimate forfeitures expected to occur to determine the amount of compensation cost to be recognized in each period.  This election required the cumulative effect of the change to be recorded to retained earnings.  As of January 1, 2017, we recorded $31,000 to decrease retained earnings and increase additional paid-in capital for the difference between the amount of compensation cost previously recorded and the amount that would have been recorded without assuming forfeitures.</div><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 11.4pt;">The presentation requirements for cash flows related to excess tax benefits and employee taxes paid for withheld shares were applied retrospectively to all periods presented. This resulted in an increase in both net cash provided by operating activities and net cash used by financing activities of $18,000 for the first six months of 2017, respectively.   </div><div style="line-height: 11.4pt;"> </div><div style="line-height: 11.4pt;"> </div><div style="line-height: 11.4pt;"> </div><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" />  </div><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div></div>
9801000
5124000
4883000
9829000
1306000
2722000
1100000
2039000
7000
-14000
5000
-18000
674000
372000
35000
36000
-8000
15000
-2000
16000
264000
254000
0
2273000
1232000
1250000
609000
663000
409000
330000
8000
0
23000
85000
<div style="font-family: 'Times New Roman', Times, serif; font-size: 9pt;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-weight: bold; text-align: justify; line-height: 11.4pt;">3. Accrued product warranty liability</div><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 11.4pt;">We generally warrant our products for up to 24 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="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 11.4pt;">The following table summarizes the activity recorded in the accrued product warranty liability during the six months ended June 30, 2017 and 2016:</div><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div><table cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times, serif; width: 100%;"><tr><td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;"> </div></td><td colspan="7" valign="bottom" style="vertical-align: bottom; border-bottom: #000000 2px solid;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-weight: bold; text-align: center; line-height: 11.4pt;">Six Months Ended June 30,</div></td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; padding-bottom: 2px; text-align: left;"> </td></tr><tr><td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;"> </div></td><td colspan="3" valign="bottom" style="vertical-align: bottom; border-bottom: #000000 2px solid;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-weight: bold; text-align: center; line-height: 11.4pt;">2017</div></td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; padding-bottom: 2px; text-align: left;"> </td><td colspan="3" valign="bottom" style="vertical-align: bottom; border-bottom: #000000 2px solid;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-weight: bold; text-align: center; line-height: 11.4pt;">2016</div></td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; padding-bottom: 2px; text-align: left;"> </td></tr><tr><td valign="bottom" style="vertical-align: bottom;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;"> </div></td><td colspan="7" valign="bottom" style="vertical-align: bottom;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-style: italic; text-align: center; line-height: 11.4pt;">(In thousands)</div></td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; text-align: left;"> </td></tr><tr><td valign="bottom" style="vertical-align: bottom;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;"> </div></td><td colspan="3" valign="bottom" style="vertical-align: bottom;"> </td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; text-align: left;"> </td><td colspan="3" valign="bottom" style="vertical-align: bottom;"> </td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; text-align: left;"> </td></tr><tr><td valign="bottom" style="width: 76%; vertical-align: bottom; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;">Balance, beginning of period</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">267</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">277</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td></tr><tr><td valign="bottom" style="width: 76%; vertical-align: bottom; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;">Warranties issued</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">105</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">131</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td></tr><tr><td valign="bottom" style="width: 76%; vertical-align: bottom; padding-bottom: 2px; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;">Warranty settlements</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 2px; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">(123</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">)</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 2px; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">(136</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">)</div></td></tr><tr><td valign="bottom" style="width: 76%; vertical-align: bottom; padding-bottom: 4px; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;">Balance, end of period</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 4px; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">249</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 4px; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">272</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #ffffff;"> </td></tr></table><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 11.4pt;">As of June 30, 2017, $168,000 of the accrued product warranty liability is classified as current in "Accrued liabilities" in the Condensed Consolidated Balance Sheets and the remaining $81,000 is classified as long-term in "Other liabilities".</div><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div></div>
2262000
2241000
7404000
10585000
2013000
1020000
1089000
2325000
24686000
24157000
27593000
14801000
13596000
29158000
<div style="font-family: 'Times New Roman', Times, serif; font-size: 9pt;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 11.4pt;">The components of inventories, net are:</div><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div><table cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times, serif; width: 100%;"><tr><td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;"> </div></td><td colspan="3" valign="bottom" style="vertical-align: bottom; border-bottom: #000000 2px solid;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-weight: bold; text-align: center; line-height: 11.4pt;">June 30, </div><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-weight: bold; text-align: center; line-height: 11.4pt;">2017</div></td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; padding-bottom: 2px; text-align: left;"> </td><td colspan="3" valign="bottom" style="vertical-align: bottom; border-bottom: #000000 2px solid;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-weight: bold; text-align: center; line-height: 11.4pt;">December 31, </div><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-weight: bold; text-align: center; line-height: 11.4pt;">2016</div></td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; padding-bottom: 2px; text-align: left;"> </td></tr><tr><td valign="bottom" style="vertical-align: bottom;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;"> </div></td><td colspan="7" valign="bottom" style="vertical-align: bottom;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-style: italic; text-align: center; line-height: 11.4pt;">(In thousands)</div></td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; text-align: left;"> </td></tr><tr><td valign="bottom" style="vertical-align: bottom;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;"> </div></td><td colspan="3" valign="bottom" style="vertical-align: bottom;"> </td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; text-align: left;"> </td><td colspan="3" valign="bottom" style="vertical-align: bottom;"> </td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; text-align: left;"> </td></tr><tr><td valign="bottom" style="width: 76%; vertical-align: bottom; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;">Raw materials and purchased component parts</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">7,010</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">6,298</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td></tr><tr><td valign="bottom" style="width: 76%; vertical-align: bottom; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;">Work-in-process</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">7</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">8</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td></tr><tr><td valign="bottom" style="width: 76%; vertical-align: bottom; padding-bottom: 2px; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;">Finished goods</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 2px; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">2,504</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 2px; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">3,401</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; background-color: #cceeff;"> </td></tr><tr><td valign="bottom" style="width: 76%; vertical-align: bottom; padding-bottom: 4px; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;"> </div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 4px; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">9,521</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 4px; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">9,707</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #ffffff;"> </td></tr></table><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div></div>
<div style="font-family: 'Times New Roman', Times, serif; font-size: 9pt;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 11.4pt;">The following table sets forth the reconciliation of basic weighted average shares outstanding and diluted weighted average shares outstanding:</div><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div><table cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times, serif; width: 100%;"><tr><td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;"> </div></td><td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;"> </td><td colspan="6" valign="bottom" style="vertical-align: bottom; border-bottom: #000000 2px solid;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-weight: bold; text-align: center; line-height: 11.4pt;">Three Months Ended June 30,</div></td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; padding-bottom: 2px; text-align: left;"> </td><td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;"> </td><td colspan="6" valign="bottom" style="vertical-align: bottom; border-bottom: #000000 2px solid;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-weight: bold; text-align: center; line-height: 11.4pt;">Six Months Ended June 30,</div></td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; padding-bottom: 2px; text-align: left;"> </td></tr><tr><td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;"> </div></td><td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;"> </td><td colspan="2" valign="bottom" style="vertical-align: bottom; border-bottom: #000000 2px solid;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-weight: bold; text-align: center; line-height: 11.4pt;">2017</div></td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; padding-bottom: 2px; text-align: left;"> </td><td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;"> </td><td colspan="2" valign="bottom" style="vertical-align: bottom; border-bottom: #000000 2px solid;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: center; line-height: 11.4pt;">2016</div></td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; padding-bottom: 2px; text-align: left;"> </td><td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;"> </td><td colspan="2" valign="bottom" style="vertical-align: bottom; border-bottom: #000000 2px solid;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-weight: bold; text-align: center; line-height: 11.4pt;">2017</div></td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; padding-bottom: 2px; text-align: left;"> </td><td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;"> </td><td colspan="2" valign="bottom" style="vertical-align: bottom; border-bottom: #000000 2px solid;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: center; line-height: 11.4pt;">2016</div></td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; padding-bottom: 2px; text-align: left;"> </td></tr><tr><td valign="bottom" style="vertical-align: bottom;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;"> </div></td><td valign="bottom" style="vertical-align: bottom;"> </td><td colspan="14" valign="bottom" style="vertical-align: bottom;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-style: italic; text-align: center; line-height: 11.4pt;">(In thousands, except per share data)</div></td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; text-align: left;"> </td></tr><tr><td valign="bottom" style="vertical-align: bottom;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;"> </div></td><td valign="bottom" style="vertical-align: bottom;"> </td><td colspan="2" valign="bottom" style="vertical-align: bottom;"> </td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; text-align: left;"> </td><td valign="bottom" style="vertical-align: bottom;"> </td><td colspan="2" valign="bottom" style="vertical-align: bottom;"> </td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; text-align: left;"> </td><td valign="bottom" style="vertical-align: bottom;"> </td><td colspan="2" valign="bottom" style="vertical-align: bottom;"> </td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; text-align: left;"> </td><td valign="bottom" style="vertical-align: bottom;"> </td><td colspan="2" valign="bottom" style="vertical-align: bottom;"> </td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; text-align: left;"> </td></tr><tr><td valign="bottom" style="vertical-align: bottom;"> </td><td valign="bottom" style="vertical-align: bottom;"> </td><td colspan="2" valign="bottom" style="vertical-align: bottom;"> </td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; text-align: left;"> </td><td valign="bottom" style="vertical-align: bottom;"> </td><td colspan="2" valign="bottom" style="vertical-align: bottom;"> </td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; text-align: left;"> </td><td valign="bottom" style="vertical-align: bottom;"> </td><td colspan="2" valign="bottom" style="vertical-align: bottom;"> </td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; text-align: left;"> </td><td valign="bottom" style="vertical-align: bottom;"> </td><td colspan="2" valign="bottom" style="vertical-align: bottom;"> </td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; text-align: left;"> </td></tr><tr><td valign="bottom" style="width: 52%; vertical-align: bottom; padding-bottom: 4px; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;">Net income</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 4px; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">867</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 4px; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">753</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 4px; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">1,810</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 4px; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">1,378</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #cceeff;"> </td></tr><tr><td valign="bottom" style="width: 52%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"> </td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"> </td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"> </td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"> </td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td></tr><tr><td valign="bottom" style="width: 52%; vertical-align: bottom; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;">Shares:</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #cceeff;"> </td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #cceeff;"> </td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #cceeff;"> </td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #cceeff;"> </td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td></tr><tr><td valign="bottom" style="width: 52%; vertical-align: bottom; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;">Basic:  Weighted average common shares outstanding</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">7,408</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">7,689</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">7,402</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">7,761</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td></tr><tr><td valign="bottom" style="width: 52%; vertical-align: bottom; padding-bottom: 2px; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;">Add:  Dilutive effect of outstanding options and restricted stock units as determined by the treasury stock method</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 2px; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">106</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 2px; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">54</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 2px; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">67</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 2px; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">52</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; background-color: #cceeff;"> </td></tr><tr><td valign="bottom" style="width: 52%; vertical-align: bottom; padding-bottom: 4px; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; margin-left: 27pt; line-height: 11.4pt; text-indent: -27pt;">Diluted:  Weighted average common and common equivalent shares outstanding</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 4px; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">7,514</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 4px; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">7,743</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 4px; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">7,469</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 4px; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">7,813</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #ffffff;"> </td></tr><tr><td valign="bottom" style="width: 52%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #cceeff;"> </td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #cceeff;"> </td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #cceeff;"> </td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #cceeff;"> </td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td></tr><tr><td valign="bottom" style="width: 52%; vertical-align: bottom; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;">Net income per common share:</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"> </td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"> </td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"> </td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"> </td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td></tr><tr><td valign="bottom" style="width: 52%; vertical-align: bottom; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; margin-left: 18pt; line-height: 11.4pt;">Basic</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">0.12</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">0.10</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">0.24</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">0.18</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td></tr><tr><td valign="bottom" style="width: 52%; vertical-align: bottom; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; margin-left: 18pt; line-height: 11.4pt;">Diluted</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">0.12</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">0.10</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">0.24</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">0.18</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td></tr></table><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div></div>
<div style="font-family: 'Times New Roman', Times, serif; font-size: 9pt;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 11.4pt;">The following table summarizes the activity recorded in the accrued product warranty liability during the six months ended June 30, 2017 and 2016:</div><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div><table cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times, serif; width: 100%;"><tr><td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;"> </div></td><td colspan="7" valign="bottom" style="vertical-align: bottom; border-bottom: #000000 2px solid;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-weight: bold; text-align: center; line-height: 11.4pt;">Six Months Ended June 30,</div></td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; padding-bottom: 2px; text-align: left;"> </td></tr><tr><td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;"> </div></td><td colspan="3" valign="bottom" style="vertical-align: bottom; border-bottom: #000000 2px solid;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-weight: bold; text-align: center; line-height: 11.4pt;">2017</div></td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; padding-bottom: 2px; text-align: left;"> </td><td colspan="3" valign="bottom" style="vertical-align: bottom; border-bottom: #000000 2px solid;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-weight: bold; text-align: center; line-height: 11.4pt;">2016</div></td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; padding-bottom: 2px; text-align: left;"> </td></tr><tr><td valign="bottom" style="vertical-align: bottom;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;"> </div></td><td colspan="7" valign="bottom" style="vertical-align: bottom;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-style: italic; text-align: center; line-height: 11.4pt;">(In thousands)</div></td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; text-align: left;"> </td></tr><tr><td valign="bottom" style="vertical-align: bottom;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;"> </div></td><td colspan="3" valign="bottom" style="vertical-align: bottom;"> </td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; text-align: left;"> </td><td colspan="3" valign="bottom" style="vertical-align: bottom;"> </td><td nowrap="nowrap" valign="bottom" style="vertical-align: bottom; text-align: left;"> </td></tr><tr><td valign="bottom" style="width: 76%; vertical-align: bottom; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;">Balance, beginning of period</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">267</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">277</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td></tr><tr><td valign="bottom" style="width: 76%; vertical-align: bottom; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;">Warranties issued</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">105</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">131</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td></tr><tr><td valign="bottom" style="width: 76%; vertical-align: bottom; padding-bottom: 2px; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;">Warranty settlements</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 2px; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">(123</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">)</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 2px; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">(136</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">)</div></td></tr><tr><td valign="bottom" style="width: 76%; vertical-align: bottom; padding-bottom: 4px; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;">Balance, end of period</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 4px; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">249</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 4px; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">272</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #ffffff;"> </td></tr></table><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div></div>
<div style="font-family: 'Times New Roman', Times, serif; font-size: 9pt;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 11.4pt;">Changes in shareholders' equity for the six months ended June 30, 2017 were as follows (in thousands):</div><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div><table cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times, serif; width: 100%;"><tr><td valign="bottom" style="width: 88%; vertical-align: bottom; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;">Balance at December 31, 2016</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">24,109</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td></tr><tr><td valign="bottom" style="width: 88%; vertical-align: bottom; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 11.4pt;">Net income</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">1,810</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td></tr><tr><td valign="bottom" style="width: 88%; vertical-align: bottom; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;">Share-based compensation expense</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">296</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td></tr><tr><td valign="bottom" style="width: 88%; vertical-align: bottom; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;">Issuance of shares from exercise of stock options</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">85</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td></tr><tr><td valign="bottom" style="width: 88%; vertical-align: bottom; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;">Foreign currency translation adjustment</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">7</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td></tr><tr><td valign="bottom" style="width: 88%; vertical-align: bottom; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;">Relinquishment of fully vested deferred stock units</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">(18</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">)</div></td></tr><tr><td valign="bottom" style="width: 88%; vertical-align: bottom; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 11.4pt;">Reversal of deferred tax asset in connection with stock options forfeited</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">(99</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">)</div></td></tr><tr><td valign="bottom" style="width: 88%; vertical-align: bottom; padding-bottom: 2px; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 11.4pt;">Dividends declared and paid on common stock</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 2px; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">(1,250</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">)</div></td></tr><tr><td valign="bottom" style="width: 88%; vertical-align: bottom; padding-bottom: 4px; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;">Balance at June 30, 2017</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 4px; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">24,940</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #cceeff;"> </td></tr></table><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div></div>
3706000
2034000
1859000
3652000
305000
296000
85000
-18000
<div style="font-family: 'Times New Roman', Times, serif; font-size: 9pt;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; font-weight: bold; text-align: justify; line-height: 11.4pt;">5. Shareholders' equity</div><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 11.4pt;">Changes in shareholders' equity for the six months ended June 30, 2017 were as follows (in thousands):</div><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div><table cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times, serif; width: 100%;"><tr><td valign="bottom" style="width: 88%; vertical-align: bottom; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;">Balance at December 31, 2016</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">24,109</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td></tr><tr><td valign="bottom" style="width: 88%; vertical-align: bottom; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 11.4pt;">Net income</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">1,810</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td></tr><tr><td valign="bottom" style="width: 88%; vertical-align: bottom; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;">Share-based compensation expense</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">296</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td></tr><tr><td valign="bottom" style="width: 88%; vertical-align: bottom; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;">Issuance of shares from exercise of stock options</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">85</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td></tr><tr><td valign="bottom" style="width: 88%; vertical-align: bottom; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;">Foreign currency translation adjustment</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">7</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td></tr><tr><td valign="bottom" style="width: 88%; vertical-align: bottom; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;">Relinquishment of fully vested deferred stock units</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">(18</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">)</div></td></tr><tr><td valign="bottom" style="width: 88%; vertical-align: bottom; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 11.4pt;">Reversal of deferred tax asset in connection with stock options forfeited</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">(99</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; text-align: left; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">)</div></td></tr><tr><td valign="bottom" style="width: 88%; vertical-align: bottom; padding-bottom: 2px; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 11.4pt;">Dividends declared and paid on common stock</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 2px; background-color: #ffffff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; background-color: #ffffff;"> </td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: right; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">(1,250</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 2px solid; text-align: left; background-color: #ffffff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">)</div></td></tr><tr><td valign="bottom" style="width: 88%; vertical-align: bottom; padding-bottom: 4px; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: left; line-height: 11.4pt;">Balance at June 30, 2017</div></td><td valign="bottom" style="width: 1%; vertical-align: bottom; padding-bottom: 4px; background-color: #cceeff;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">$</div></td><td valign="bottom" style="width: 9%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: right; background-color: #cceeff;"><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; line-height: 11.4pt;">24,940</div></td><td nowrap="nowrap" valign="bottom" style="width: 1%; vertical-align: bottom; border-bottom: #000000 4px double; text-align: left; background-color: #cceeff;"> </td></tr></table><div style="line-height: 11.4pt;"><br style="line-height: 11.4pt;" /></div><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 11.4pt;">For the three months ended June 30, 2017, our Board of Directors declared a quarterly cash dividend of $0.09 per share, totaling $663,000, which was paid in June 2017 to common shareholders of record at the close of business on May 19, 2017.  For the three months ended June 30, 2016, dividends declared and paid totaled $609,000, or $0.08 per share.  For the six months ended  June 30, 2017 and 2016, dividends declared and paid totaled $1,250,000, or $0.17 per share, and $1,232,000, or $0.16 per share, respectively.</div><div style="font-size: 10pt; font-family: 'Times New Roman', Times, serif; text-align: justify; line-height: 11.4pt;"> </div></div>
24940000
24109000
3851967
3851967
29752000
29752000
31000
111000
25000
7743000
7514000
7469000
7813000
7408000
7689000
7402000
7761000
-24000
8000
-10000
5000
P24M