Note 2 - Restatement

9 Months Ended

Jun. 30, 2011

Accounting Changes and Error Corrections [Text Block]

2.	Restatement

The Company has restated its Consolidated Statements of Operations for the three-month and nine-month periods ended June 30, 2011 and 2010 to reflect adjustments and reclassifications of revenue and cost of sales, in connection with the identification of sales that are maintenance and support services provided by third parties where the Company is not the primary obligor of the service, which requires presentation of the revenue reported by the Company net of the cost of the services as opposed to recognition of the gross sales value of the services. In addition, the Company identified certain other services provided pursuant to third party contracts for which the Company is the primary obligor and reported these services correctly at the gross sales value; however these services were reported as product revenue and should have been included as service revenue. We have therefore, reclassified both the revenue and cost of sales for these services from product revenue and product cost of sales to service revenue and service cost of sales.

The adjustments made to the restated financial statements referred to above did not affect gross profit, income before taxes, net income, cash flow, total assets, total liabilities, retained earnings or total shareholder equity as of or for the quarters and nine-month periods ended June 30, 2011 and 2010.

The tables below show the impact to the statements of operations for the restated periods.

	Three months ended June 30, 2011 (unaudited)									Three months June 30, 2010 (unaudited)
	As reported			Restatement Adjustment			Restated			As reported			Restatement Adjustment			Restated
	(Amounts in thousands except for per share data)
Sales:
Product	$	16,416		$	(1,690	)	$	14,726		$	23,753		$	(2,740	)	$	21,013
Services		3,265			798			4,063			4,815			1,183			5,998
Total sales		19,681			(892	)		18,789			28,568			(1,557	)		27,011

Cost of sales:
Product		13,690			(1,434	)		12,256			21,153			(2,341	)		18,812
Services		2,370			542			2,912			2,519			784			3,303
Total cost of sales		16,060			(892	)		15,168			23,672			(1,557	)		22,115

Gross profit		3,621			-			3,621			4,896			-			4,896

Operatingexpenses		3,892			-			3,892			4,238			-			4,238
Operating income		(271	)		-			(271	)		658			-			658
Other income (expense), net		(33	)		-			(33	)		(10	)		-			(10	)
Income before income taxes		(304	)		-			(304	)		648			-			648
Income tax expense		(90	)		-			(90	)		27			-			27
Net income	$	(214	)		-		$	(214	)	$	621			-		$	621

Net income per share – basic	$	(0.06	)		-		$	(0.06	)	$	0.17			-		$	0.17
Weighted average shares outstanding – basic		3,428			-			3,428			3,548			-			3,548
Net income per share – diluted	$	(0.06	)		-		$	(0.06	)	$	0.17			-		$	0.17
Weighted average shares outstanding – diluted		3,428			-			3,428			3,574			-			3,574

	Nine months ended June 30, 2011 (unaudited)									Nine months ended June 30, 2010 (unaudited)
	As reported			Restatement Adjustment			Restated			As reported			Restatement Adjustment			Restated
	(Amounts in thousands except for per share data)
Sales:
Product	$	49,566		$	(6,782	)	$	42,784		$	59,549		$	(6,756	)	$	52,793
Services		11,434			2,827			14,261			11,601			3,276			14,877
Total sales		61,000			(3,955	)		57,045			71,150			(3,480	)		67,670


Cost of sales:
Product		41,440			(5,809	)		35,631			50,729			(5,889	)		44,840
Services		7,162			1,854			9,016			7,731			2,409			10,140
Total cost of sales		48,602			(3,955	)		44,647			58,460			(3,480	)		54,980

Gross profit		12,398			-			12,398			12,690			-			12,690

Operatingexpenses		11,595			-			11,595			11,608			-			11,608

Operating income		803			-			803			1,082			-			1,082

Other income (expense), net		(55	)		-			(55	)		(46	)		-			(46	)

Income before income taxes		748			-			748			1,036			-			1,036
Income tax expense		287			-			287			168			-			168
Net income	$	461			-		$	461		$	868			-		$	868

Net income per share – basic	$	0.13			-		$	0.13		$	0.24			-		$	0.24
Weighted average shares outstanding – basic		3,446			-			3,446			3,545			-			3,545
Net income per share – diluted	$	0.13			-		$	0.13		$	0.24			-		$	0.24
Weighted average shares outstanding – diluted		3,485			-			3,485			3,574			-			3,574

- Definition

The entire disclosure for reporting accounting changes and error corrections. It includes the conveyance of information necessary for a user of the Company's financial information to understand all aspects and required disclosure information concerning all changes and error corrections reported in the Company's financial statements for the period.

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