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<SEC-DOCUMENT>0000356037-04-000026.txt : 20040805
<SEC-HEADER>0000356037-04-000026.hdr.sgml : 20040805
<ACCEPTANCE-DATETIME>20040805153738
ACCESSION NUMBER:		0000356037-04-000026
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20040630
ITEM INFORMATION:		Results of Operations and Financial Condition
FILED AS OF DATE:		20040805

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CSP INC /MA/
		CENTRAL INDEX KEY:			0000356037
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373]
		IRS NUMBER:				042441294
		STATE OF INCORPORATION:			MA
		FISCAL YEAR END:			0831

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-10843
		FILM NUMBER:		04954718

	BUSINESS ADDRESS:	
		STREET 1:		43 MANNING ROAD
		CITY:			BILLERICA
		STATE:			MA
		ZIP:			01821
		BUSINESS PHONE:		9786637598

	MAIL ADDRESS:	
		STREET 1:		43 MANNING ROAD
		CITY:			BILLERICA
		STATE:			MA
		ZIP:			01821
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>form8kpressq3604.htm
<DESCRIPTION>FORM 8K PRESS RELEASE Q3 6/30/04
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<TITLE>SECURITIES AND EXCHANGE COMMISSION</TITLE>
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<B><FONT SIZE=4><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;UNITED STATES</P>
</B></FONT><P>&#9;&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT SIZE=4>SECURITIES AND EXCHANGE COMMISSION</P>
</B></FONT><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Washington, DC 20549</P>

<B><FONT SIZE=6><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FORM 8-K</P>
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<B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934</P>
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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Date of Report:     August 5, 2004</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CSP Incorporated</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Exact name of the registrant as specified in its charter)</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commission file number 0-10843</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Massachusetts</B>&nbsp;</U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<B><U>04-2441294</P>
</B></U><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(State or jurisdiction of &#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(IRS Employer Identification</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;incorporation or organization)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;number)</P>

<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>43 Manning Road, Billerica, Massachusetts</B></U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>01821-3901</P>
</B></U><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Address of principal executive offices) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Zip Code)</P>

<P>&nbsp;</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>(978) 663-7598</P>
</U><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Registrant's telephone number, including area code)</P>

<P>Form 8-K</P>
<P>CURRENT REPORT dated August 5, 2004</P>
<P>CSP Inc.</P>

<B><P>Item&nbsp;&nbsp;&nbsp;Financial Statements and Exhibits.</P>
<P>7.</P>
</B><P>(c)&nbsp;&nbsp;Exhibits</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;99.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Press release announcing third quarter and year to date financial results, issued by &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CSP Inc. on August 5, 2004.</P>

<B><P>Item&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Regulation FD Disclosure (including Item 12 information).</P>
<P>9.</P>
</B><P>In accordance with Securities and Exchange Commission Release No. 33-8216, the following information, intended to be furnished under "Item 12.  Results of Operations and Financial Condition," is instead furnished under this "Item9. Regulation FD Disclosure."</P>
<P>On August 5, 2004, CSP Inc issued a press release announcing financial results for the third quarter and year to date for 2004.  A copy of the press release is attached as Exhibit 99.1 hereto and is incorporated herein by reference.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>

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<P>Form 8-K</P>
<P>CURRENT REPORT dated August 5, 2004</P>

<P>CSP Inc.</P>

<P>SIGNATURE</P>

<P>&nbsp;</P>
<P>Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.</P>

<P>&#9;&#9;&#9;&#9;&#9;&#9;CSP INC.</P>
<P>&#9;&#9;&#9;&#9;&#9;</P>

<P>August 5, 2004</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;/s/Gary W. Levine</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;---------------------------</P>
<P>Gary W. Levine, Vice President-Finance and Principal Accounting Officer</P>
<P>&#9;</P>

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</FONT><P>Contact:</P>
<P>      &#9;&#9;Gary Levine</P>
<P>&#9;&#9;Chief Financial Officer</P>
<P>&#9;&#9;CSP Inc.</P>
<P>&#9;&#9;Tel:  978.663.7598 ext. 1200</P>
<P>&#9;&#9;Fax: 978.663.0150</P>
<B><FONT FACE="Courier"><P ALIGN="CENTER"></P>
<P ALIGN="CENTER">&nbsp;</P>
</FONT><P ALIGN="CENTER">CSP INC. REPORTS THIRD-QUARTER FISCAL 2004 FINANCIAL RESULTS</P>
</B><FONT FACE="Courier">
</FONT><B><I><P ALIGN="CENTER">&nbsp;</P>
</B></I><P>BILLERICA, MA, August 5, 2004 - CSP Inc. (NASDAQ: CSPI), a provider of IT solutions, systems integration services and dense cluster computing systems, today reported financial results for the third quarter ended June 30, 2004.</P>
<P>For the third quarter of fiscal 2004, sales increased to $14.3 million from $7.0 million for the year-earlier quarter.  CSP Inc. posted net income of $438,000, or $0.12 per diluted share, compared with a net loss of $(340,000), or $(0.10) per share, for the third quarter of fiscal 2003. </P>
<P>For the nine-month period ended June 30, 2004, the Company increased sales to $38.3 million compared with sales of $21.6 million for the nine-month period of fiscal 2003.  CSP reported net income of $688,000, or $0.18 per diluted share, for the first nine months of fiscal 2004 compared with a net loss of $(939,000), or $(0.27) per diluted share, for the first nine months of fiscal 2003. </P>
<P>Chairman, President and Chief Executive Officer Alexander R. Lupinetti said, &quot;Our ability to execute on our strategy and capitalize on positive trends in the market enabled us to report our highest revenue quarter in four years and our highest quarter for net income in more than three years.&quot;  </P>
<P>&quot;Our MultiComputer Division performed very well during the quarter, buoyed by our previously announced contract wins, including our agreement to supply Series 2000 MultiComputers for the U.S. Navy's E-2C Hawkeye aircraft,&quot; continued Lupinetti.  &quot;Our steadily improving financial results demonstrate that our strategy for our MultiComputer business is working.  This strategy centers on offering architecturally superior systems based on open systems; leading the market in price-performance and being the first to market with new processors.  In addition, the trend toward the use of ruggedized DSP systems in airborne surveillance offers new opportunities for CSP as we sell our products higher up the value chain.&quot;</P>
<P>&quot;We recently passed the one-year anniversary of the Company's acquisition of Technisource and its integration into CSP as MODCOMP's Systems and Solutions Division -- and the results have been excellent,&quot; said Lupinetti.  &quot;The ability of this Division to provide best-of-breed IT solutions for multi-vendor environments including systems, integration, maintenance and professional services, has enabled us to capitalize on an improved IT spending environment.  During the quarter, we saw significant demand for servers, storage and associated services.  This, coupled with continued strength from our Germany and U.K. subsidiaries, contributed to MODCOMP's stellar performance in the third fiscal quarter.&quot;  </P>
<P>&quot;We continue to be optimistic about the demand environment as we approach the new fiscal year, and will execute on our strategic plans to capitalize on opportunities across our businesses,&quot; concluded Lupinetti.  </P>
<B><P>Safe Harbor</P>
</B><P>The Company wishes to take advantage of the &quot;Safe Harbor&quot; provisions of the Private Securities Litigation Reform Act of 1995 with respect to statements that may be deemed to be forward-looking under the Act.  Such forward-looking statements may include, but are not limited to, those relating to the Company's optimism regarding the demand environment, the execution of its MultiComputer and MODCOMP growth strategies and its plans to ruggedize its MultiComputer products.  The Company cautions that numerous factors could cause actual results to differ materially from any forward-looking statements made by the Company.  Such risks include general economic conditions, market factors, competitive factors and pricing pressures, and others described in the Company's filings with the SEC.  Please refer to the section on forward-looking statements included in the Company's filings with the Securities and Exchange Commission.</P>
<B><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">About CSP Inc.</P>
</B><P>Based in Billerica, Massachusetts and founded in 1968, CSP Inc. (NASDAQ: CSPI) and its subsidiaries develop and market best of breed IT solutions, image processing software, systems integration services, and high-performance computer systems.  Our Systems segment includes the MultiComputer Division supplies high-performance Linux cluster systems for a broad array of defense applications, including radar, sonar and surveillance signal processing.  The Company's MODCOMP, Inc. subsidiary, also par of our Service and Systems Integration segment founded in 1970, is a leading provider of IT solutions and systems integration services. MODCOMP works with third parties to develop customized solutions in the global IT markets and has offices in the U.S., U.K., and Germany.  More information about CSP is available on the company's website at www.cspi.com.  To learn more about MODCOMP, Inc., consult www.modcomp.com.  More information about Scanalytics, Inc. is available at www.scanalytics.com.</P>
<I>
<P>The consolidated statements of operations and consolidated balance sheets follow.</P>
</I><FONT FACE="Courier"><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
<I><P>The consolidated statements of operations and consolidated balance sheets follow.</P>

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</I></FONT><B><FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CSP INC. AND SUBSIDIARIES<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CONSOLIDATED BALANCE SHEETS<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Amounts in thousands, except par value)</P></B></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=690>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17>
<B><FONT SIZE=3><P ALIGN="CENTER">June 30,</B></FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17>
<B><FONT SIZE=3><P ALIGN="CENTER">September 30</B></FONT></TD>
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<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17>
<B><U><FONT SIZE=3><P ALIGN="CENTER">2004</B></U></FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17>
<B><U><FONT SIZE=3><P ALIGN="CENTER">2003</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17>
<B><FONT SIZE=3><P ALIGN="CENTER">(Unaudited)</B></FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17>
<B><FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Assets</U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>Current assets:</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;Cash and short-term investments</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">$12,262</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">$10,494</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;Accounts receivable, net</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">7,326</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">5,429</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17>
<P>&nbsp;&nbsp;<FONT SIZE=3>Inventories</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">2,739</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">2,034</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;Other current assets</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">    1,155</U></FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">    2,575</U></FONT></TD>
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<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">23,482</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">20,532</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>Property, equipment and improvements, net</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">1,046</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">944</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>Other assets:</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">    5,591</U></FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">    4,949</U></FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">$30,119</U></FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">$26,425</U></FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17>
<B><FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Liabilities and Shareholders' Equity</B></U></FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>Current liabilities:</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;Accounts payable and accrued expenses</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">    8,735</U></FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">   6,483</U></FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">8,735</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">6,483</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>Other liabilities</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">8,643</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">8,010</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>Shareholders' equity</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">  12,741</U></FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">  11,932</U></FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and shareholders' equity</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">$30,119</U></FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">$26,425</U></FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
</TABLE>

<B><FONT SIZE=3>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
</B></FONT><FONT FACE="Courier"><P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
</FONT><B><FONT SIZE=3><P>&nbsp;</P>
</B></FONT><FONT FACE="Courier"><P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
</FONT><B><FONT SIZE=3><P>&nbsp;</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CSP INC. AND SUBSIDIARIES<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Amounts in thousands, except for per share data)<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>/-For the three months ended-//-For the six months ended-/</P></B></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=666>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<B><FONT SIZE=3><P ALIGN="CENTER">June 30,</B></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<B><FONT SIZE=3><P ALIGN="CENTER">June 30,</B></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<B><FONT SIZE=3><P ALIGN="CENTER">June 30,</B></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<B><FONT SIZE=3><P ALIGN="CENTER">June 30,</B></FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<B><U><FONT SIZE=3><P ALIGN="CENTER">2004</B></U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<B><U><FONT SIZE=3><P ALIGN="CENTER">2003</B></U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<B><U><FONT SIZE=3><P ALIGN="CENTER">2004</P>
</U><P ALIGN="CENTER"></B></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<B><U><FONT SIZE=3><P ALIGN="CENTER">2003</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<B><FONT SIZE=3><P>Sales:</B></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;Systems</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">$2,709</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">$1,869</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">$5,892</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">$4,135</FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;Service and system integration</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">10,970</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">4,510</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">30,307</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">15,503</FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;E-business software</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">352</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">293</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">994</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">946</FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;Other software</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">     270</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">    289</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">   1,074</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">      969</U></FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total sales</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">14,301</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">6,961</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">38,267</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">21,553</FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<B><FONT SIZE=3><P>Cost of Sales:</B></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;Systems</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">1,071</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">770</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">2,230</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">2,052</FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;Service and systems integration</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">8,923</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">3,667</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">24,673</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">12,369</FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;E-business software</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">146</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">159</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">417</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">511</FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;Other software</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">       52</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">       43</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">     304</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">      202</U></FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total cost of sales</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">10,192</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">  4,639</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">27,624</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT"> 15,134</U></FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;   &nbsp;Gross profit</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">4,109</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">2,322</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">10,643</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">6,419</FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<B><FONT SIZE=3><P>Operating expenses:</B></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;Engineering and development</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">794</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">873</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">2,292</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">2,722</FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;Selling, general &amp; administrative</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">   2,692</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">   2,011</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">   7,494</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">   5,590</U></FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">   3,486</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">   2,884</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">   9,786</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">   8,312</U></FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<B><FONT SIZE=3><P>Operating profit (loss)</B></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">623</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">(562)</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">857</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">(1,893)</FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<B><FONT SIZE=3><P>Other income(expense):</B></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;Other income (expense)</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">       (9)</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">     158</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">       98</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">   1,392</U></FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other income, net</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">(9)</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">158</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">98</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">1,392</FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>Income (loss) before income taxes</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">614</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">(404)</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">955</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">(501)</FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>Income tax provision (benefit)</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">      176</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">      (64)</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">     267</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">       438</U></FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Net income (loss)</B></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">    $438</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">  ($340)</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">   $688</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">  ($939)</U></FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>Net income (loss) per share -  basic</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">   $0.12</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT"> ($0.10)</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">  $0.19</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT"> ($0.27)</U></FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>Weighted average shares outstanding - basic</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">   3,566</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">    3,537</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">  3,559</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">    3,533</U></FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>Net income (loss) per share - diluted</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">   $0.12</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">  ($0.10)</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">  $0.18</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT"> ($0.27)</U></FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>Weighted average shares outstanding-diluted</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">   3,746</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">    3,537</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">  3,741</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">    3,533</U></FONT></TD>
</TR>
</TABLE>

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