SC 13E3

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13E-3

RULE 13e-3 TRANSACTION STATEMENT

UNDER SECTION 13(E) OF THE SECURITIES EXCHANGE ACT OF 1934

METROLOGIC INSTRUMENTS, INC.

(Name of the Issuer)

Metrologic Instruments, Inc.

Meteor Holding Corporation

Meteor Merger Corporation

C. Harry Knowles

(Name of Person(s) Filing Statement)

Common Stock, par value $0.01 per share

(Title of Class of Securities)

591676101

(CUSIP Number of Class of Securities)

	Dipanjan Deb
C. Harry Knowles	President
Chairman of the Board and	Meteor Holding Corporation
Interim Chief Executive Officer	Meteor Merger Corporation
Metrologic Instruments, Inc.	c/o Francisco Partners
90 Coles Road	2882 Sand Hill Road, Suite 280
Blackwood, New Jersey 08012	Menlo Park, California 94025
(856) 228-8100	(650) 233-2900
(Name, Address and Telephone Number of Persons Authorized to Receive Notices and Communications on Behalf of Person(s) Filing Statement)

Copies to:

Justin P. Klein, Esq.
Ballard Spahr Andrews & Ingersoll, LLP
1735 Market Street, 51st Floor
Philadelphia, Pennsylvania 19103
(215) 864-8606 Barry M. Abelson, Esq.
Pepper Hamilton LLP
3000 Two Logan Square
18th and Arch Streets
Philadelphia, Pennsylvania 19103
(215) 981-4282 Larry W. Sonsini, Esq.
John A. Fore, Esq.
Robert T. Ishii, Esq.
Wilson Sonsini Goodrich & Rosati
Professional Corporation
650 Page Mill Road
Palo Alto, California 94304
(650) 493-9300

This statement is filed in connection with (check the appropriate box):

x    a.	The filing of solicitation materials or an information statement subject to Regulation 14A, Regulation 14-C or Rule 13e-3(c) under the Securities Exchange Act of 1934 (the “Act”).
o    b.	The filing of a registration statement under the Securities Act of 1933.
o    c.	A tender offer.
o    d.	None of the above.

Check the following box if the soliciting materials or information statement referred to in checking box (a) are preliminary copies: x

Check the following box if the filing is a final amendment reporting the results of the transaction: o

CALCULATION OF FILING FEE

Transaction Valuation(1)	Amount of Filing Fee(2)
$369,128,879	$39,497

(1)	Pursuant to an Agreement and Plan of Merger by and between Meteor Holding Corporation, Meteor Merger Corporation and the Registrant dated as of September 12, 2006, Meteor Merger Corporation will merge with and into the Registrant and each outstanding share of common stock of the Registrant shall be converted into the right to receive $18.50, without interest, except for shares that are owned by the Registrant as treasury stock or owned by Meteor Holding Corporation or any wholly owned subsidiary of Meteor Holding Corporation or the Registrant, which will be cancelled without any payment therefor.  Pursuant to Contribution and Voting Agreements between Meteor Merger Corporation and certain shareholders of the Registrant dated as of September 12, 2006, such shareholders will contribute an aggregate of 3,384,463 shares of common stock of the Registrant to Meteor Holding Corporation immediately prior to the merger in exchange for shares of Meteor Holding Corporation.  Each holder of options to acquire the Registrant’s common stock with an exercise price that is less than $18.50 per share shall be entitled to receive, in consideration of the cancellation of such stock options, an amount (net of applicable taxes) equal to the product of (i) the excess of $18.50 per share of common stock over the exercise price per share of common stock subject to such stock option, multiplied by (ii) the total number of shares subject to such stock option.  Each holder of options with an exercise price that is greater than or equal to $18.50 per share will receive $1.00 per award.  Each holder of warrants to acquire the Registrant’s common stock shall be entitled to receive upon exercise an amount (net of applicable taxes) equal to the product of (i) the excess of $18.50 per share of common stock over the exercise price per share of common stock subject to such warrant, multiplied by (ii) the total number of shares subject to such warrant.  As of October 2, 2006, there were 22,770,094 shares of common stock of the Registrant issued and outstanding, 521,630 shares of common stock of the Registrant subject to outstanding stock options with an exercise price that is less than $18.50 per share, with a weighted-average exercise price of $4.00 per share, 220 option awards covering 1,226,500 shares of common stock of the Registrant with an exercise price that is greater than or equal to $18.50 per share, and 195,000 shares of common stock of the Registrant subject to outstanding warrants, with an exercise price of $3.47 per share.  The filing fee was determined by adding (w) the product of (i) the number of shares of Common Stock that are proposed to be acquired in the transactions (calculated by subtracting 3,384,463 from 22,770,094) and (ii) the transaction consideration of $18.50 per share of common stock, plus (x) the product of (1) the total number of shares of Metrologic common stock subject to outstanding stock options with an exercise price that is less than $18.50 per share multiplied by (2) the excess of $18.50 over the weighted average exercise price for such stock options, plus (y) the product of (1) the total number of option awards with an exercise price that is greater than or equal to $18.50 multiplied by (2) $1.00 plus (z) the product of (1) the total number of shares of Metrologic common stock subject to outstanding warrants multiplied by (2) the excess of $18.50 over the exercise price for such warrants ((w), (x), (y) and (z) together, the “Merger Consideration”).
(2)	The filing fee was calculated in accordance with Rule 240.0-11 under the Exchange Act, by multiplying the Merger Consideration by 0.000107.
x	Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) under the Act and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
	Amount Previously Paid:  $39,497
	Form or Registration No.:  Schedule 14A
	Filing Party:  Metrologic Instruments, Inc.
	Date Filed:  October 5, 2006

Introduction

This Rule 13E-3 Transaction Statement on Schedule 13E-3 (the “Statement”) is being filed by (1) Metrologic Instruments, Inc., a New Jersey corporation (the “Company” or “Metrologic”), the issuer of common stock, par value $0.01 per share (the “Common Stock”), that is the subject of the Rule 13e-3 transaction, (2) Meteor Holding Corporation, a Delaware corporation (“Meteor Holding Corporation”), (3) Meteor Merger Corporation, a New Jersey corporation (“Meteor Merger Corporation”) and (4) C. Harry Knowles, an individual, the Chairman of the Board of Directors and interim Chief Executive Officer of Metrologic (together with Metrologic, Meteor Holding Corporation and Meteor Merger Corporation, the “Filing Persons”).

Pursuant to the Agreement and Plan of Merger (the “Merger Agreement”), dated as of September 12, 2006, by and among Meteor Holding Corporation, Meteor Merger Corporation and the Company, Meteor Merger Corporation will merge with and into the Company, and the Company will continue as the surviving corporation and a wholly owned subsidiary of Meteor Holding Corporation (the “Merger”).  In connection with the Merger, each share of Common Stock issued and outstanding immediately prior to the effective time of the Merger will be converted into the right to receive $18.50 in cash, without interest, other than shares owned by the Company as treasury stock or owned by Meteor Holding Corporation or any wholly owned subsidiary of Meteor Holding Corporation or the Company, which will be cancelled without any payment therefor.  Each holder of options to purchase Metrologic Common Stock under the Company’s 2004 Equity Incentive Plan with an exercise price that is less than $18.50 per share will receive cash, without interest, in an amount equal to the product of (1) the total number of shares of Metrologic Common Stock subject to the option multiplied by (2) the excess of $18.50 over the exercise price per share of Metrologic Common Stock subject to such option, less any applicable taxes.  Each holder of options granted under our 2004 Equity Incentive Plan with an exercise price that is greater than or equal to $18.50 per share will receive $1.00 per award.  Metrologic expects to make an offer to holders of options granted under its 1994 Incentive Plan to cancel all of their options in exchange for a cash payment, without interest, equal to the product of (1) the total number of shares of Metrologic Common Stock subject to the option multiplied by (2) the excess of $18.50 over the exercise price per share of Metrologic Common Stock subject to such option, less any applicable taxes.  All of the options held by employees who will be eligible to participate in the offer have exercise prices that are less than $18.50 per share.  Each holder of warrants to acquire the Company’s Common Stock will be entitled to receive, upon exercise of each such warrant, an amount (net of applicable taxes) equal to the product of (i) the excess of $18.50 per share of Common Stock over the exercise price per share of Common Stock subject to such warrant, multiplied by (ii) the total number of shares subject to such warrant.

As of the date of this Statement, FP-Metrologic, LLC, an entity affiliated with Francisco Partners II, L.P., a private equity firm, is the sole stockholder of Meteor Holding Corporation.  Pursuant to the terms of a contribution and voting agreement dated as of September 12, 2006 among Meteor Holding Corporation, C. Harry Knowles, Chairman of the board of directors and interim Chief Executive Officer of the Company, and certain of his related family trusts and charitable entities, and a contribution and voting agreement dated as of September 12, 2006 among Meteor Holding Corporation, Elliott Associates, L.P. and Elliott International, L.P., multi-strategy hedge funds under common management that are current shareholders of Metrologic, Mr. Knowles, Elliott Associates, L.P. and Elliott International, L.P., have each agreed, severally and not jointly, to contribute an aggregate of 3,384,463 shares of Common Stock that they beneficially own to Meteor Holding Corporation immediately prior to the closing of the merger in exchange for shares of capital stock of Meteor Holding Corporation.

As a result of the Merger, current shareholders of the Company, other than C. Harry Knowles, Elliott Associates, L.P. and Elliott International, L.P., will cease to have ownership interests in the Company or rights as shareholders of the Company, and will not participate in any future earnings or growth of the Company or benefit from any appreciation in value of the Company.

Concurrently with the filing of this Statement, the Company is filing with the Securities and Exchange Commission a preliminary Proxy Statement (the “Proxy Statement”) under Regulation 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), relating to a special meeting of the shareholders of the Company at which the shareholders of the Company will consider and vote upon a proposal to approve the Merger Agreement.  At the special meeting, the approval of the Merger Agreement requires the affirmative vote of a majority of the votes cast by the holders of shares of Common Stock present in person or represented by proxy at the special meeting and entitled to vote thereon.

The cross references below are being supplied pursuant to General Instruction G to Schedule 13E-3 and show the location in the Proxy Statement of the information required to be included in response to the items of Schedule 13E-3.  The information contained in the Proxy Statement, including all annexes thereto, is incorporated in its entirety herein by this reference, and the responses to each Item in this Schedule 13E-3 are qualified in their entirety by the information contained in the Proxy Statement.

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The filing of this Statement shall not be construed as an admission by any of the Filing Persons, or by any affiliate of a Filing Person, that Metrologic is “controlled” by any other Filing Person or that any Filing Person is an “affiliate” of Metrologic within the meaning of Rule 13e-3 under Section 13(e) of the Exchange Act.

All information contained in this Statement concerning any Filing Person has been provided by such Filing Person and no other Filing Person, including the Company, takes responsibility for the accuracy of any information not supplied by such Filing Person.

Item 1. Summary Term Sheet

The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SUMMARY TERM SHEET”

“QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING”

Item 2. Subject Company Information

(a) Name and Address.    The Company’s name and the address and telephone number of its principal executive office are as follows:

Metrologic Instruments, Inc.

90 Coles Road

Blackwood, NJ  08012

(856) 228-8100

(b) Securities.    The securities of the Company that are the subject matter of this Statement is the Common Stock, par value $0.01 per share, of the Company (the “Common Stock”).  As of October 3, 2006, 22,770,094 shares of Common Stock were outstanding.  The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING”

“THE SPECIAL MEETING – Record Date, Quorum and Voting Power”

“PERSONS OWNING MORE THAN FIVE PERCENT OF STOCK”

“SECURITY OWNERSHIP BY MANAGEMENT”

(c) Trading Market and Price.    The information set forth in the Proxy Statement under the caption “MARKET PRICES OF THE COMPANY’S COMMON STOCK” is incorporated herein by reference.

(d) Dividends.    The information set forth in the Proxy Statement under the caption “DIVIDEND POLICY” is incorporated herein by reference.

(e) Prior Public Offerings.    The information set forth in the Proxy Statement under the caption “TRANSACTIONS IN THE COMPANY’S STOCK” is incorporated herein by reference.

(f) Prior Stock Purchases.    The information set forth in the Proxy Statement under the caption “TRANSACTIONS IN THE COMPANY’S STOCK” is incorporated herein by reference.

Item 3. Identity and Background of Filing Person(s)

(a) Name and Address.    The information set forth in Schedules I, II, III and IV to this Statement and the information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SUMMARY TERM SHEET”

“QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING”

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 “THE PARTIES TO THE MERGER”

“CURRENT EXECUTIVE OFFICERS AND DIRECTORS OF THE COMPANY”

(b) Business and Background of Entities.    The information set forth in Schedules I, II, III and IV to this Statement and the information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SUMMARY TERM SHEET”

“THE PARTIES TO THE MERGER”

(c) Business and Background of Natural Persons.    The information set forth in Schedules I, II, III and IV to this Transaction Statement and the information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“CURRENT EXECUTIVE OFFICERS AND DIRECTORS OF THE COMPANY”

Item 4. Terms of the Transaction

(a) Material Terms.    The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SUMMARY TERM SHEET”

“QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING”

“SPECIAL FACTORS – Background of the Merger”

“SPECIAL FACTORS – Recommendations of the Special Committee and the Board of Directors”

“SPECIAL FACTORS – Reasons for the Special Committee’s Recommendation”

“SPECIAL FACTORS – Reasons for the Board’s Recommendation”

“SPECIAL FACTORS – Purposes, Reasons and Plans for Metrologic After the Merger”

“SPECIAL FACTORS – Financing of the Merger”

“SPECIAL FACTORS – Certain Effects of the Merger”

“SPECIAL FACTORS – Interests of Certain Persons in the Merger”

“SPECIAL FACTORS – Material U.S. Federal Income Tax Consequences”

“SPECIAL FACTORS – Accounting Treatment”

“THE SPECIAL MEETING – Required Vote”

“THE SPECIAL MEETING – Voting by Directors and Executive Officers”

“THE MERGER AGREEMENT” (PROPOSAL NO. 1)

“OTHER AGREEMENTS RELATING TO OUR SECURITIES – Contribution and Voting Agreements”

“OTHER AGREEMENTS RELATING TO OUR SECURITIES – Confidentiality and Standstill Agreement”

ANNEX A – Agreement and Plan of Merger

ANNEX C-1 – Knowles Contribution and Voting Agreement

ANNEX C-2 – Elliott Contribution and Voting Agreement

(c) Different Terms.    The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SUMMARY TERM SHEET”

“QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING”

“SPECIAL FACTORS – Certain Effects of the Merger”

“SPECIAL FACTORS – Financing of the Merger”

“SPECIAL FACTORS – Interests of Certain Persons in the Merger”

“SPECIAL FACTORS – Provisions for Unaffiliated Shareholders”

“THE SPECIAL MEETING – Voting by Directors and Executive Officers”

“THE MERGER AGREEMENT (PROPOSAL NO. 1) – Treatment of Stock, Options and Warrants”

“THE MERGER AGREEMENT (PROPOSAL NO. 1) – Indemnification”

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“OTHER AGREEMENTS RELATING TO OUR SECURITIES – Contribution and Voting Agreements”

“OTHER AGREEMENTS RELATING TO OUR SECURITIES – Confidentiality and Standstill Agreement”

ANNEX A – Agreement and Plan of Merger

ANNEX C-1 – Knowles Contribution and Voting Agreement

ANNEX C-2 – Elliott Contribution and Voting Agreement

(d) Appraisal Rights.    The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SUMMARY TERM SHEET”

“QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING”

(e) Provisions for Unaffiliated Security Holders.    The information set forth in the Proxy Statement under the caption “SPECIAL FACTORS – Provisions for Unaffiliated Shareholders” is incorporated herein by reference.

(f) Eligibility for Listing or Trading.    Not applicable.

Item 5. Past Contacts, Transactions, Negotiations and Agreements

(a) Transactions.    The information set forth in the Proxy Statement under the caption “RELATED PARTY TRANSACTIONS” is incorporated herein by reference.

(b), (c) Significant Corporate Events; Negotiations or Contracts.    The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SUMMARY TERM SHEET”

“QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING”

“SPECIAL FACTORS – Background of the Merger”

“SPECIAL FACTORS – Recommendations of the Special Committee and the Board of Directors”

“SPECIAL FACTORS – Reasons for the Special Committee’s Recommendation”

“SPECIAL FACTORS – Reasons for the Board’s Recommendation”

“SPECIAL FACTORS – Interests of Certain Persons in the Merger”

“SPECIAL FACTORS – Financing of the Merger”

“THE SPECIAL MEETING – Voting by Directors and Executive Officers”

“THE MERGER AGREEMENT” (PROPOSAL NO. 1)

 “OTHER AGREEMENTS RELATING TO OUR SECURITIES”

ANNEX A – Agreement and Plan of Merger

ANNEX C-1 – Knowles Contribution and Voting Agreement

ANNEX C-2 – Elliott Contribution and Voting Agreement

(e) Agreements Involving the Subject Company’s Securities.    The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SUMMARY TERM SHEET”

“QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING”

“SPECIAL FACTORS – Certain Effects of the Merger”

 “SPECIAL FACTORS – Interests of Certain Persons in the Merger”

“SPECIAL FACTORS – Financing of the Merger”

“THE SPECIAL MEETING – Voting by Directors and Executive Officers”

“THE MERGER AGREEMENT” (PROPOSAL NO. 1)

 “OTHER AGREEMENTS RELATING TO OUR SECURITIES”

ANNEX A – Agreement and Plan of Merger

ANNEX C-1 – Knowles Contribution and Voting Agreement

ANNEX C-2 – Elliott Contribution and Voting Agreement

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Item 6. Purpose of the Transaction and Plans or Proposals

(b) Use of Securities Acquired.    The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SUMMARY TERM SHEET”

“QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING”

“SPECIAL FACTORS – Purposes, Reasons and Plans for Metrologic After the Merger”

“SPECIAL FACTORS – Certain Effects of the Merger”

“THE MERGER AGREEMENT (PROPOSAL NO. 1) – Treatment of Stock, Options and Warrants”

ANNEX A – Agreement and Plan of Merger

(c)(1)-(8) Plans.    The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SUMMARY TERM SHEET”

“QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING”

“SPECIAL FACTORS – Purposes, Reasons and Plans for Metrologic After the Merger”

“SPECIAL FACTORS – Certain Effects of the Merger”

“SPECIAL FACTORS – Financing of the Merger”

“SPECIAL FACTORS – Interests of Certain Persons in the Merger”

“THE MERGER AGREEMENT” (PROPOSAL NO. 1)

“OTHER AGREEMENTS RELATING TO OUR SECURITIES – Contribution and Voting Agreements”

ANNEX A – Agreement and Plan of Merger

ANNEX C-1 – Knowles Contribution and Voting Agreement

ANNEX C-2 – Elliott Contribution and Voting Agreement

Item 7. Purposes, Alternatives, Reasons and Effects

(a) Purposes.    The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SUMMARY TERM SHEET – The Merger and Related Matters”

“SPECIAL FACTORS – Background of the Merger”

“SPECIAL FACTORS – Recommendations of the Special Committee and the Board of Directors”

“SPECIAL FACTORS – Reasons for the Special Committee’s Recommendation”

“SPECIAL FACTORS – Reasons for the Board’s Recommendation”

“SPECIAL FACTORS – Purposes, Reasons and Plans for Metrologic After the Merger”

“SPECIAL FACTORS – Certain Effects of the Merger”

(b) Alternatives.    The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SPECIAL FACTORS – Background of the Merger”

“SPECIAL FACTORS – Reasons for the Special Committee’s Recommendation”

“SPECIAL FACTORS – Reasons for the Board’s Recommendation”

“SPECIAL FACTORS – Purposes, Reasons and Plans for Metrologic After the Merger”

(c) Reasons.    The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

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“SUMMARY TERM SHEET – The Merger and Related Matters”

“SPECIAL FACTORS – Background of the Merger”

“SPECIAL FACTORS – Recommendations of the Special Committee and the Board of Directors”

“SPECIAL FACTORS – Reasons for the Special Committee’s Recommendation”

“SPECIAL FACTORS – Reasons for the Board’s Recommendation”

“SPECIAL FACTORS – Opinion of Needham & Company, LLC”

“SPECIAL FACTORS – Position of C. Harry Knowles as to Fairness”

“SPECIAL FACTORS – Position of Meteor Holding Corporation and Meteor Merger Corporation as to Fairness”

“SPECIAL FACTORS – Purposes, Reasons and Plans for Metrologic After the Merger”

“SPECIAL FACTORS – Certain Effects of the Merger”

“SPECIAL FACTORS – Effects on the Company if the Merger is Not Completed”

“SPECIAL FACTORS – Interests of Certain Persons in the Merger”

ANNEX B – Opinion of Needham & Company, LLC

ANNEX C-1 – Knowles Contribution and Voting Agreement

ANNEX C-2 – Elliott Contribution and Voting Agreement

(d) Effects.    The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SUMMARY TERM SHEET”

“QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING”

“SPECIAL FACTORS – Background of the Merger”

“SPECIAL FACTORS – Purposes, Reasons and Plans for Metrologic After the Merger”

“SPECIAL FACTORS – Certain Effects of the Merger”

“SPECIAL FACTORS – Effects on the Company if the Merger is Not Completed”

“SPECIAL FACTORS – Financing of the Merger”

“SPECIAL FACTORS – Interests of Certain Persons in the Merger”

“SPECIAL FACTORS – Material U.S. Federal Income Tax Consequences”

“SPECIAL FACTORS – Fees and Expenses of the Merger”

 “THE MERGER AGREEMENT” (PROPOSAL NO. 1)

ANNEX A – Agreement and Plan of Merger

Item 8. Fairness of the Transaction

(a), (b) Fairness; Factors Considered in Determining Fairness.    The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SUMMARY TERM SHEET”

“QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING”

“SPECIAL FACTORS – Background of the Merger”

“SPECIAL FACTORS – Recommendations of the Special Committee and the Board of Directors”

“SPECIAL FACTORS – Reasons for the Special Committee’s Recommendation”

“SPECIAL FACTORS – Reasons for the Board’s Recommendation”

“SPECIAL FACTORS – Opinion of Needham & Company, LLC”

“SPECIAL FACTORS – Position of C. Harry Knowles as to Fairness”

“SPECIAL FACTORS – Position of Meteor Holding Corporation and Meteor Merger Corporation as to Fairness”

ANNEX B – Opinion of Needham & Company, LLC

(c) Approval of Security Holders.    The transaction is not structured so that the approval of at least a majority of unaffiliated security holders is required. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SUMMARY TERM SHEET”

“QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER”

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“SPECIAL FACTORS – Background of the Merger”

“SPECIAL FACTORS – Recommendations of the Special Committee and the Board of Directors”

“SPECIAL FACTORS – Reasons for the Special Committee’s Recommendation”

“SPECIAL FACTORS – Reasons for the Board’s Recommendation”

“SPECIAL FACTORS – Provisions for Unaffiliated Shareholders”

“THE SPECIAL MEETING – Record Date, Quorum and Voting Power”

“THE SPECIAL MEETING – Required Vote”

“THE SPECIAL MEETING – Voting by Directors and Executive Officers”

“THE MERGER AGREEMENT (PROPOSAL NO. 1) – Conditions to Completion of the Merger”

ANNEX A – Agreement and Plan of Merger

ANNEX C-1 – Knowles Contribution and Voting Agreement

ANNEX C-2 – Elliott Contribution and Voting Agreement

(d) Unaffiliated Representative.    The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SUMMARY TERM SHEET”

“QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER”

“SPECIAL FACTORS – Background of the Merger”

“SPECIAL FACTORS – Recommendations of the Special Committee and the Board of Directors”

“SPECIAL FACTORS – Reasons for the Special Committee’s Recommendation”

“SPECIAL FACTORS – Reasons for the Board’s Recommendation”

“SPECIAL FACTORS – Opinion of Needham & Company, LLC”

“SPECIAL FACTORS – Provisions for Unaffiliated Shareholders”

ANNEX B – Opinion of Needham & Company, LLC

(e) Approval of Directors.    The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SUMMARY TERM SHEET”

“QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER”

“SPECIAL FACTORS – Background of the Merger”

“SPECIAL FACTORS – Recommendations of the Special Committee and the Board of Directors”

(f) Other Offers.    The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SPECIAL FACTORS – Background of the Merger”

“SPECIAL FACTORS – Reasons for the Special Committee’s Recommendation”

Item 9. Reports, Opinions, Appraisals and Negotiations

(a),(b) Report, Opinion or Appraisal; Preparer and Summary of the Report, Opinion or Appraisal. The presentation of Needham & Company, LLC to the Special Committee of the Board of Directors of Metrologic, dated September 11, 2006, is attached hereto as Exhibit (c)(2) and is incorporated herein by reference. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SPECIAL FACTORS – Background of the Merger”

“SPECIAL FACTORS – Recommendations of the Special Committee and the Board of Directors”

“SPECIAL FACTORS – Reasons for the Special Committee’s Recommendation”

“SPECIAL FACTORS – Reasons for the Board’s Recommendation”

“SPECIAL FACTORS – Opinion of Needham & Company, LLC”

“WHERE YOU CAN FIND ADDITIONAL INFORMATION”

“INCORPORATION BY REFERENCE”

ANNEX B – Opinion of Needham & Company, LLC

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(c) Availability of Documents.    The reports, opinions or appraisals referenced in this Item 9 will be made available for inspection and copying at the principal executive offices of the Company during its regular business hours by any interested holder of Metrologic common stock or representative who has been so designated in writing.

Item 10. Source and Amounts of Funds or Other Consideration

(a),(b),(d) Source of Funds; Conditions; Borrowed Funds.    The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SUMMARY TERM SHEET”

“QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER”

“SPECIAL FACTORS – Financing of the Merger”

“MERGER AGREEMENT (PROPOSAL NO. 1) – Financing”

“MERGER AGREEMENT (PROPOSAL NO. 1) – Conditions to Completion of the Merger”

“OTHER AGREEMENTS RELATING TO OUR SECURITIES – Contribution and Voting Agreements”

ANNEX A – Agreement and Plan of Merger

ANNEX C-1 – Knowles Contribution and Voting Agreement

ANNEX C-2 – Elliott Contribution and Voting Agreement

(c) Expenses.    The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SPECIAL FACTORS – Fees and Expenses of the Merger”

“THE MERGER AGREEMENT (PROPOSAL NO. 1) – Fees and Expenses”

ANNEX A – Agreement and Plan of Merger

Item 11. Interest in Securities of the Subject Company

(a) Securities Ownership.    The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“PERSONS OWNING MORE THAN FIVE PERCENT OF STOCK”

“SECURITY OWNERSHIP BY MANAGEMENT”

“OTHER AGREEMENTS RELATING TO OUR SECURITIES – Contribution and Voting Agreements”

ANNEX C-1 – Knowles Contribution and Voting Agreement

ANNEX C-2 – Elliott Contribution and Voting Agreement

(b) Securities Transactions.    The information set forth in Schedule III and Schedule IV to this Statement, under the heading “Securities Transactions”, and the information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SUMMARY TERM SHEET”

“QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER”

“SPECIAL FACTORS – Financing of the Merger”

“SPECIAL FACTORS – Interests of Certain Persons in the Merger”

“THE SPECIAL MEETING – Voting by Directors and Executive Officers”

“THE MERGER AGREEMENT (PROPOSAL NO. 1)”

“OTHER AGREEMENTS RELATING TO OUR SECURITIES –

“TRANSACTIONS IN THE COMPANY’S STOCK”

ANNEX A – Agreement and Plan of Merger

ANNEX C-1 – Knowles Contribution and Voting Agreement

ANNEX C-2 – Elliott Contribution and Voting Agreement

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Item 12. The Solicitation or Recommendation

(d) Intent to Tender or Vote in a Going-Private Transaction.    The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SUMMARY TERM SHEET”

“QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER”

“SPECIAL FACTORS – Position of C. Harry Knowles as to Fairness”

 “SPECIAL FACTORS – Interests of Certain Persons in the Merger”

“THE SPECIAL MEETING – Voting by Directors and Executive Officers”

“OTHER AGREEMENTS RELATING TO OUR SECURITIES – Contribution and Voting Agreements”

ANNEX C-1 – Knowles Contribution and Voting Agreement

(e) Recommendations of Others.    The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SUMMARY TERM SHEET”

“QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER”

“SPECIAL FACTORS – Recommendations of the Special Committee and the Board of Directors”

“SPECIAL FACTORS – Reasons for the Board’s Recommendation”

Item 13. Financial Statements

(a) Financial Statements.    The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA”

“WHERE YOU CAN FIND ADDITIONAL INFORMATION”

“INCORPORATION BY REFERENCE”

The audited financial statements set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2005 and the unaudited financial statements set forth in the Company’s Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2006 and June 30, 2006 are incorporated by reference herein.

(b) Pro Forma Information.    Not applicable.

Item 14. Persons/Assets, Retained, Employed, Compensated or Used

(a),(b) Solicitations or Recommendations; Employees and Corporate Assets.    The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SUMMARY TERM SHEET”

“QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER”

“SPECIAL FACTORS – Background of the Merger”

“SPECIAL FACTORS – Fees and Expenses of the Merger”

“THE SPECIAL MEETING – Proxy Solicitation; Expenses of Proxy Solicitation”

Item 15. Additional Information

(b) Other Material Information.    The information set forth in the Proxy Statement and annexes thereto filed contemporaneously herewith is incorporated in its entirety herein by reference.

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Item 16. Exhibits

Exhibit Number	Description
(a)(1)	Letter to Shareholders of Metrologic Instruments, Inc., dated                   , 2006 incorporated herein by reference to the Proxy Statement
(a)(2)	Notice of Special Meeting of Shareholders of Metrologic Instruments, Inc., incorporated herein by reference to the Proxy Statement
(a)(3)	Preliminary Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on October 5, 2006, incorporated herein by reference to the Proxy Statement
(a)(4)	Form of proxy card, filed with the Securities and Exchange Commission along with the Proxy Statement, incorporated herein by reference to the Proxy Statement
(b)(1)	Debt Commitment Letter by and between Meteor Holding Corporation and Morgan Stanley Senior Funding, Inc. dated September 12, 2006 (incorporated by reference to Exhibit 99.4 to the Schedule 13D filed on September 22, 2006 by Meteor Holding Corporation, FP-Metrologic, LLC, Francisco Partners II, L.P., Francisco Partners Parallel Fund II, L.P., Francisco Partners GP II, L.P. and Francisco Partners GP II Management, LLC)
(c)(1)	Opinion of Needham & Company, LLC, dated September 11, 2006, incorporated herein by reference to Annex B to the Proxy Statement
(c)(2)	Valuation discussion materials presented by Needham & Company, LLC to the Special Committee of the Metrologic Instruments, Inc. Board of Directors on September 6, 2006.
(c)(3)	Presentation of Needham & Company, LLC, to the Special Committee and the Board of Directors, dated September 11, 2006
(d)(1)	Agreement and Plan of Merger, dated as of September 12, 2006, by and among Meteor Holding Corporation, Meteor Merger Corporation and Metrologic Instruments, Inc., incorporated herein by reference to Annex A to the Proxy Statement
(d)(2)	Contribution and Voting Agreement, dated as of September 12, 2006, among Meteor Holding Corporation, C. Harry Knowles, Janet H. Knowles and certain related family trusts and charitable entities, incorporated herein by reference to Annex C-1 to the Proxy Statement
(d)(3)	Contribution and Voting Agreement, dated as of September 12, 2006, among Meteor Holding Corporation, Elliott Associates, L.P. and Elliott International, L.P., incorporated herein by reference to Annex C-2 to the Proxy Statement
(d)(4)	Letter Agreement regarding Termination Fee dated September 12, 2006 between Meteor Holding Corporation and Elliott Associates, L.P. (incorporated by reference to Exhibit 99.5 to the Schedule 13D filed on September 22, 2006 by Meteor Holding Corporation, FP-Metrologic, LLC, Francisco Partners II, L,P., Francisco Partners Parallel Fund II, L.P., Francisco Partners GP II, L.P. and Francisco Partners GP II Management, LLC)

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SIGNATURES

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated as of October 4, 2006

METROLOGIC INSTRUMENTS, INC.
By:	/s/ C. Harry Knowles
Name:	C. Harry Knowles
Title:	Interim Chief Executive Officer
METEOR HOLDING CORPORATION
By:	/s/ Dipanjan Deb
Name:	Dipanjan Deb
Title:	President
METEOR MERGER CORPORATION
By:	/s/ Dipanjan Deb
Name:	Dipanjan Deb
Title:	President
C. HARRY KNOWLES
/s/ C. Harry Knowles
C. Harry Knowles

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EXHIBIT INDEX

Exhibit Number	Description
(a)(1)	Letter to Shareholders of Metrologic Instruments, Inc., dated            , 2006 incorporated herein by reference to the Proxy Statement
(a)(2)	Notice of Special Meeting of Shareholders of Metrologic Instruments, Inc., incorporated herein by reference to the Proxy Statement
(a)(3)	Preliminary Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on October 5, 2006, incorporated herein by reference to the Proxy Statement
(a)(4)	Form of proxy card, filed with the Securities and Exchange Commission along with the Proxy Statement, incorporated herein by reference to the Proxy Statement
(b)(1)	Debt Commitment Letter by and between Meteor Holding Corporation and Morgan Stanley Senior Funding, Inc. dated September 12, 2006 (incorporated by reference to Exhibit 99.4 to the Schedule 13D filed on September 22, 2006 by Meteor Holding Corporation, FP-Metrologic, LLC, Francisco Partners II, L.P., Francisco Partners Parallel Fund II, L.P., Francisco Partners GP II, L.P. and Francisco Partners GP II Management, LLC)
(c)(1)	Opinion of Needham & Company, LLC, dated September 11, 2006, incorporated herein by reference to Annex B to the Proxy Statement
(c)(2)	Valuation discussion materials presented by Needham & Company, LLC to the Special Committee of the Metrologic Instruments, Inc. Board of Directors on September 6, 2006.
(c)(3)	Presentation of Needham & Company, LLC, to the Special Committee and the Board of Directors, dated September 11, 2006
(d)(1)	Agreement and Plan of Merger, dated as of September 12, 2006, by and among Meteor Holding Corporation, Meteor Merger Corporation and Metrologic Instruments, Inc., incorporated herein by reference to Annex A to the Proxy Statement
(d)(2)	Contribution and Voting Agreement, dated as of September 12, 2006, among Meteor Holding Corporation, C. Harry Knowles, Janet H. Knowles and certain related family trusts and charitable entities, incorporated herein by reference to Annex C-1 to the Proxy Statement
(d)(3)	Contribution and Voting Agreement, dated as of September 12, 2006, among Meteor Holding Corporation, Elliott Associates, L.P. and Elliott International, L.P., incorporated herein by reference to Annex C-2 to the Proxy Statement
(d)(4)	Letter Agreement regarding Termination Fee dated September 12, 2006 between Meteor Holding Corporation and Elliott Associates, L.P. (incorporated by reference to Exhibit 99.5 to the Schedule 13D filed on September 22, 2006 by Meteor Holding Corporation, FP-Metrologic, LLC, Francisco Partners II, L,P., Francisco Partners Parallel Fund II, L.P., Francisco Partners GP II, L.P. and Francisco Partners GP II Management, LLC)

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Schedule I

Information Concerning Meteor Holding Corporation

Meteor Holding Corporation is a Delaware corporation that was incorporated on September 1, 2006 solely for the purpose of completing the Merger and the relating financings and transactions. As of the date of this Statement, FP-Metrologic, LLC is the sole stockholder of Meteor Holding Corporation.

Set forth below are the directors and executive officers of Meteor Holding Corporation, the date they became a director or executive officer, their current occupation and their material employment during the last five years, as of September 30, 2006. Messrs. Deb and Kowal are United States citizens. Mr. ibnAle is a Canadian citizen and a permanent resident of the United States. Each of the directors and executive officers of Meteor Holding Corporation has his principal business address and telephone at c/o Francisco Partners, 2882 Sand Hill Road, Suite 280, Menlo Park, California 94025, (650) 233-2999.

Name	Occupation or Employment
Dipanjan Deb	Mr. Deb has served as a director of Meteor Holding Corporation since September 1, 2006 and as President since September 11, 2006. Mr. Deb is a founder and Managing Partner of Francisco Partners, a private equity firm, and has been a Partner since its formation in August 1999. Prior to founding Francisco Partners, Mr. Deb was a principal with Texas Pacific Group, a private equity firm. Earlier in his career, Mr. Deb was director of semiconductor banking at Robertson Stephens & Company, an investment bank, and a management consultant at McKinsey & Company, a consulting firm. Mr. Deb serves on the board of directors of AMI (AMIS), MagnaChip, SMART Modular and Ultra Clean Technology (UCTT).
David T. ibnAle	Mr. ibnAle has served as the Vice President and Treasurer of Meteor Holding Corporation since September 11, 2006. Mr. ibnAle is a Principal with Francisco Partners. Prior to joining Francisco Partners, Mr. ibnAle was an Associate with Summit Partners LP, a private equity firm, where he was involved in identifying, executing and managing private equity investments in companies in a variety of technology segments including IT services, transaction processing, communications equipment, semiconductor devices and semiconductor capital equipment. Earlier in his career, Mr. ibnAle worked as an Analyst in the Corporate Finance Department of Morgan Stanley & Co., an investment bank, and he has also worked in the Fixed Income, Currencies and Commodities Division of Goldman Sachs, an investment bank. Mr. ibnAle serves on the board of directors of ECI and Ultra Clean Technology Holdings (UCTT).
Andrew Kowal	Mr. Kowal has served as a director of Meteor Holding Corporation since September 1, 2006 and as Vice President and Secretary since September 11, 2006. Mr. Kowal is a Vice President with Francisco Partners and has been employed by them since 2001. Prior to joining Francisco Partners in 2001, Mr. Kowal was a member of Princes Gate Investors, a private equity fund within Morgan Stanley, where he was responsible for the identification, evaluation and execution of private equity transactions in a variety of industries, including information technology and hardware. Mr. Kowal serves on the board of directors of ADERANT.

During the past five years, none of Meteor Holding Corporation or its executive officers, directors or controlling persons have been convicted in a criminal proceeding (other than traffic violations or similar misdemeanors) or been a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining that person or entity from

14

future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws.

15

Schedule II

Information Concerning Meteor Merger Corporation

Meteor Merger Corporation is a New Jersey corporation that was incorporated on September 1, 2006 solely for the purpose of completing the Merger and the relating financings and transactions. As of the date of this Statement, Meteor Holding Corporation is the sole stockholder of Meteor Merger Corporation.

Set forth below are the directors and executive officers of Meteor Merger Corporation, the date they became a director or executive officer, their current occupation and their material employment during the last five years, as of September 30, 2006. Messrs. Deb and Kowal are United States citizens. Mr. ibnAle is a Canadian citizen and a permanent resident of the United States. Each of the directors and executive officers of Meteor Merger Corporation has his principal business address and telephone at c/o Francisco Partners, 2882 Sand Hill Road, Suite 280, Menlo Park, California 94025, (650) 233-2999.

Name	Occupation or Employment
Dipanjan Deb	Mr. Deb has served as the sole director of Meteor Merger Corporation since August 31, 2006 and as President since September 11, 2006. Mr. Deb’s principal occupation and material employment is set forth in “Schedule I – Information Concerning Meteor Holding Corporation.”
David T. ibnAle	Mr. ibnAle has served as the Vice President and Treasurer of Meteor Merger Corporation since September 11, 2006. Mr. ibnAle’s principal occupation and material employment is set forth in “Schedule I – Information Concerning Meteor Holding Corporation.”
Andrew Kowal	Mr. Kowal has served as Vice President and Secretary of Meteor Merger Corporation since September 11, 2006. Mr. Kowal’s principal occupation and material employment is set forth in “Schedule I – Information Concerning Meteor Holding Corporation.”

During the past five years, none of Meteor Merger Corporation or its executive officers, directors or controlling persons have been convicted in a criminal proceeding (other than traffic violations or similar misdemeanors) or been a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining that person or entity from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws.

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Schedule III

Information Concerning FP-Metrologic, LLC, Francisco Partners II, L.P., Francisco Partners Parallel Fund II, L.P., Francisco Partners GP II, L.P., Francisco Partners GP II Management, LLC

As of the date of this Statement, FP-Metrologic LLC is the sole stockholder of Meteor Holding Corporation. The principal business of FP-Metrologic, LLC is to invest directly or indirectly in various companies.

Francisco Partners II, L.P. and Francisco Partners Parallel Fund II, L.P. are the sole members of FP-Metrologic, LLC. The principal business of Francisco Partners II, L.P. and Francisco Partners Parallel Fund II, L.P. is to invest directly or indirectly in various companies. Francisco Partners GP II, L.P. is the general partner of Francisco Partners II, L.P. and Francisco Partners Parallel Fund II, L.P. The principal business of Francisco Partners GP II, L.P. is to serve as the general partner of various limited partnerships.

Francisco Partners GP II Management, LLC serves as general partner of Francisco Partners GP II, L.P. The principal business of Francisco Partners GP II Management, LLC is to serve as general partner of Francisco Partners GP II, L.P. and provide management services to Francisco Partners II, L.P. and Francisco Partners Parallel Fund II, L.P. at the request of Francisco Partners GP II, L.P.

Dipanjan Deb, David T. ibnAle and Andrew Kowal are managers of FP-Metrologic, LLC. Information regarding Messrs. Deb, ibnAle and Kowal is set forth in “Schedule I – Information Concerning Meteor Holding Corporation.”

The current principal occupation and material employment of each of the managing directors of Francisco Partners GP II, L.P. who are not officers or directors of Meteor Holding Corporation and/or Meteor Merger Corporation is as follows. Each managing director set forth below is also a member of Francisco Partners GP II Management, LLC.

Name	Occupation or Employment
David M. Stanton	Mr. Stanton is a Managing Director of Francisco Partners GP II, L.P. and a Member of Francisco Partners GP II Management, LLC. Mr. Stanton is a founder of Francisco Partners and has been its Managing Partner since its formation in August 1999. Prior to founding Francisco Partners, Mr. Stanton led the technology investing activities of Texas Pacific Group, a private equity fund, from 1994 until August 1999. Prior to joining Texas Pacific Group, he was a venture capitalist with Trinity Ventures, which specializes in investments in information technology, software and telecommunications companies. Earlier in his career, Mr. Stanton was a strategy consultant with Bain & Company. Mr. Stanton serves as the chairman of the board of directors of GXS and as a director of AMI and C-MAC.
Benjamin Ball	Mr. Ball is a Managing Director of Francisco Partners GP II, L.P. and a Member of Francisco Partners GP II Management, LLC. Mr. Ball is a founder of Francisco Partners and has been a Partner since its formation in August 1999. Prior to founding Francisco Partners, Mr. Ball was a Vice President with TA Associates where he led private equity investments in the software, semiconductor and communications segments. Previously, he worked for Genstar Capital LLC, a middle-market LBO firm, where he focused on investments in the semiconductor, capital equipment and communications industries. Earlier in his career, Mr. Ball worked for AEA Investors, a New York-based private equity firm, and also for the consulting firm of Bain & Company. Mr. Ball serves on the board of directors of ECI, Legerity and WebTrends.
Neil M. Garfinkel	Mr. Garfinkel is a Managing Director of Francisco Partners GP II, L.P. and a

17

	Member of Francisco Partners GP II Management, LLC. Mr. Garfinkel is a founder of Francisco Partners and has been a Partner since its formation in August 1999. Prior to founding Francisco Partners, Mr. Garfinkel was a Managing Director of Friedman Fleischer & Lowe, a leading San Francisco private equity firm where he co-led the firm’s information technology investing. Previously, Mr. Garfinkel was a Vice President with Summit Partners, L.P., where he was responsible for private equity transactions in the software and IT services sectors. Earlier in his career, Mr. Garfinkel was an attorney with Wilson Sonsini Goodrich and Rosati in Palo Alto and with Cravath, Swaine & Moore in New York. Mr. Garfinkel serves on the board of directors of AKQA, Foundation 9 Entertainment, FrontRange Solutions, LYNX Medical Systems, WebTrends and the US-India Venture Capital Association.
Keith Geeslin	Mr. Geeslin is a Managing Director of Francisco Partners GP II, L.P. and a Member of Francisco Partners GP II Management, LLC. Mr. Geeslin joined Francisco Partners as a Partner in January 2004. Prior to joining Francisco Partners, Mr. Geeslin spent 19 years with the Sprout Group. Mr. Geeslin joined Sprout in 1984, became a General Partner in 1988, and became Sprout’s Managing Partner in 2000. Earlier in his career, he was the general manager of a division of Tymshare, Inc. and held various positions at its Tymnet subsidiary from 1980 to 1984. He was also previously a staff member of the U.S. Senate Commerce Committee. Mr. Geeslin serves on the board of directors of Blue Coat, CommVault Systems, Synaptics (SYNA) and yIPes Communications.
David Golob	Mr. Golob is a Managing Director of Francisco Partners GP II, L.P. and a Member of Francisco Partners GP II Management, LLC. Mr. Golob has been a Partner with Francisco Partners since joining the firm in September 2001. From 1998 to 2000, Mr. Golob was a Managing Director with Tiger Management, a $20 billion hedge fund based in New York, where he was co-head of the global technology group and focused in the software industry. Prior to Tiger Management, Mr. Golob spent seven years as a private equity investor focused on the software industry at General Atlantic Partners and Sutter Hill Ventures. Earlier in his career, Mr. Golob was a management consultant with McKinsey & Company and a Product Manager with Newport Systems Solutions, Inc. (acquired by Cisco). Mr. Golob serves on the board of directors of AttachmateWRQ, Barracuda Networks, GXS, Primavera and RedPrairie Corporation.

During the past five years, none of FP-Metrologic, LLC, FP-Metrologic, LLC, Francisco Partners II, L.P., Francisco Partners Parallel Fund II, L.P., Francisco Partners GP II, L.P., Francisco Partners GP II Management, LLC or any of its managers, managing directors or members as listed above have been convicted in a criminal proceeding (other than traffic violations or similar misdemeanors) or been a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining that person or entity from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws.

The business address of each of FP-Metrologic, LLC, Francisco Partners II, L.P., Francisco Partners Parallel Fund II, L.P., Francisco Partners GP II, L.P., Francisco Partners GP II Management, LLC and persons listed above is:

c/o Francisco Partners

2882 Sand Hill Road, Suite 280

Menlo Park, California 94025

(650) 233-2999

Securities Transactions

During the past 60 days, none of FP-Metrologic, LLC, Francisco Partners II, L,P., Francisco Partners Parallel Fund II, L.P., Francisco Partners GP II, L.P. and Francisco Partners GP II Management, LLC or any of the persons listed above has engaged in any transactions in Metrologic common stock.

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Schedule IV

Information Concerning the Elliott Investors

Each of Elliott Associates, L.P., a Delaware limited partnership (“Elliott”), Elliott International, L.P., a Cayman Islands limited partnership (“Elliott International”), and Elliott International Capital Advisors Inc., a Delaware corporation and investment manager for Elliott International (“EICA”), may be deemed to be a member of a group, within the meaning of Rule 13d-5 promulgated under the Securities Exchange Act of 1934, with the filing persons. The following information is provided to comply with Instruction C to Schedule 13e-3 under the Exchange Act. The filing of this Transaction Statement and the information contained in this Schedule IV shall not be construed as an admission that any person identified on this Schedule IV is a member of any such group, that Metrologic is “controlled” by any such person or that any such person is an “affiliate” of Metrologic within the meaning of Rule 13e-3 under Section 13(e) of the Exchange Act.

During the past five years, none of the persons listed below have been convicted in a criminal proceeding (other than traffic violations or similar misdemeanors) or been a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining that person or entity from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws.

ELLIOTT

The business address of Elliott is 712 Fifth Avenue,  36th Floor, New York, New York 10019. The principal business of Elliott is to purchase, sell, trade and invest in securities.

Paul E. Singer (“Singer”), Elliott Capital Advisors, L.P., a Delaware limited partnership (“Capital Advisors”), which is controlled by Singer, and Elliott Special GP, LLC, a Delaware limited liability company (“Special GP”), which is controlled by Singer, are the general partners of Elliott.

SINGER

Singer’s business address is 712 Fifth Avenue, 36th Floor, New York, New York 10019. Singer’s principal business is to serve as a general partner of Elliott and Capital Advisors, as the president of EICA, and as a managing member of Special GP.

CAPITAL ADVISORS

The business address of Capital Advisors is 712 Fifth Avenue, 36th Floor, New York, New York 10019. The principal business of Capital Advisors is the furnishing of investment advisory services. Capital Advisors also serves as a managing member of Special GP.

The names, business addresses, and present principal occupation or employment of the general partners of Capital Advisors are as follows:

NAME	ADDRESS	OCCUPATION
Paul E. Singer	712 Fifth Avenue 36th Floor New York, New York 10019	General partner of Elliott and Capital Advisors; President of EICA; and a managing member of Special GP
Braxton Associates, Inc.	712 Fifth Avenue 36th Floor New York, New York 10019	The principal business of Braxton Associates, Inc. is serving as general partner of Capital Advisors
Elliott Asset Management LLC	712 Fifth Avenue 36th Floor New York, New York 10019	General Partner of Capital Advisors

19

The name, business address, and present principal occupation or employment of the sole director and executive officer of Braxton Associates, Inc. are as follows:

NAME	ADDRESS	OCCUPATION
Paul E. Singer	712 Fifth Avenue 36th Floor New York, New York 10019	General partner of Elliott and Capital Advisors; President of EICA; and a managing member of Special GP

ELLIOTT SPECIAL GP, LLC

The business address of Special GP is 712 Fifth Avenue, 36th Floor, New York, New York 10019. The principal business of Special GP is serving as a general partner of Elliott.

The names, business address, and present principal occupation or employment of the managing members of Special GP are as follows:

NAME	ADDRESS	OCCUPATION
Paul E. Singer	712 Fifth Avenue 36th Floor New York, New York 10019	General partner of Elliott and Capital Advisors; President of EICA; and a managing member of Special GP
Braxton Associates, Inc.	712 Fifth Avenue 36th Floor New York, New York 10019	The principal business of Braxton Associates, Inc. is serving as general partner of Capital Advisors
Elliott Asset Management LLC	712 Fifth Avenue 36th Floor New York, New York 10019	General partner of Capital Advisors

20

ELLIOTT INTERNATIONAL

The business address of Elliott International is c/o Maples & Calder, P.O. Box 309, Ugland House, South Church Street, George Town, Cayman Islands, British West Indies. The principal business of Elliott International is to purchase, sell, trade and invest in securities.

The name, business address, and present principal occupation or employment of the general partner of Elliott International is as follows:

NAME	ADDRESS	OCCUPATION
Hambledon, Inc.	c/o Maples & Calder P.O. Box 309, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands, British West Indies	General partner of Elliott International

HAMBLEDON

Hambledon, Inc., a Cayman Islands corporation (“Hambledon”), which is also controlled by Singer, is the sole general partner of Elliott International

The name, business address, and present principal occupation or employment of the sole director and executive officer of Hambledon are as follows:

NAME	ADDRESS	OCCUPATION
Paul E. Singer	712 Fifth Avenue 36th Floor New York, New York 10019	General partner of Elliott and Capital Advisors; President of EICA; and a managing member of Special GP

EICA

The business address of EICA is 712 Fifth Avenue, 36th Floor, New York, New York 10019. The principal business of EICA is to act as investment manager for Elliott International.

The name, business address, and present principal occupation or employment of the sole director and executive officer of EICA is as follows:

21

NAME	ADDRESS	OCCUPATION
Paul E. Singer	712 Fifth Avenue 36th Floor New York, New York 10019	General partner of Elliott and Capital Advisors; President of EICA; and a managing member of Special GP

Securities Transactions

The following transactions in the Metrologic common stock were effected by Elliott during the past sixty (60) days:

DATE	SHARES BOUGHT (SOLD)		APPROX. PRICE PER SHARE (EXCL. OF COMMISSIONS)
09-12-2006	3,080		$	18.10
09-12-2006	(3,080	)	$	18.10

The following transactions in the Metrologic common stock were effected by Elliott International during the past sixty (60) days:

DATE	SHARES BOUGHT (SOLD)		APPROX. PRICE PER SHARE (EXCL. OF COMMISSIONS)
09-12-2006	4,620		$	18.10
09-12-2006	(4,620	)	$	18.10

All of the above transactions were effected on the NASDAQ Global Select Market.

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EX-99.(C)(2)

Exhibit (c) (2)

 

445 Park Avenue New York, NY 10022-4406 (212) 371-8300 One Post Office Square Boston, MA 02109 (617) 457-0900 3000 Sand Hill Road, Building 2 Menlo Park, CA 94025 (650) 854-9111 One Ferry Building San Francisco, CA 94111 (415) 262-4860 Presentation to the Board of Directors September 11, 2006 Project Meteor Confidential

 

Presentation Basis This presentation was prepared on a confidential basis exclusively for the benefit and use of the Board of Directors of “Meteor” (the “Company”) to evaluate the fairness from a financial point of view of the transaction described herein. It is not a recommendation as to how any Board member should vote, and does not carry any right of publication or disclosure. Neither this presentation nor any of its contents may be used for any other purpose without the prior written consent of Needham & Company, LLC. The information contained in this material was obtained from the Company and other sources. Any financial estimates and projections contained herein have been prepared by management or are based upon such estimates and projections, and involve numerous and significant subjective determinations, which may or may not be correct. No representation or warranty, expressed or implied, is made as to the accuracy or completeness of such information and nothing contained herein is, or shall be relied upon as, a promise or representation, whether as to the past or the future. This material was not prepared for use by readers not as familiar with the business and affairs of the Company as the Board of Directors and, accordingly, Needham & Company, LLC takes no responsibility for the accompanying material when used by persons other than the Board of Directors of the Company.

 

Table of Contents Valuation Analyses Stock Price Trading Analysis Public Company Valuation Analysis Selected M&A Transactions Analysis Premiums Paid Analysis Discounted Cash Flow Analysis Section 3 Meteor Financial Overview Section 2 Summary of the Transaction Terms Section 1

 

Summary of the Transaction Terms

 

Summary of the Transaction Terms Harry Knowles to enter into contribution and voting agreement to contribute shares of Meteor stock in exchange for purchaser’s stock and to vote in favor of the Transaction. Rollover of Equity: 4.0% of the fully-diluted equity value of Meteor Break-Up Fee: 2.0% of the fully-diluted equity value of Meteor Reverse Break-Up Fee: Francisco Partners Acquiror Name: Meteor Target Name: Francisco acquires Meteor for $18.50 per share in cash. With $84.3 million of net cash(1), the enterprise value is $346.6 million. Transaction subject to approval by Meteor shareholders. Divestiture of Apollo would occur prior to shareholder vote. Transaction Form: Francisco has received commitment letters to provide debt financing in an amount of $235 million. Financing Commitments: Approve Transaction – September 11, 2006 Closing – December 2006 Timing: 13.1% (based on 09/08/06 closing price) 24.6% (based on 09/08/06 50-day moving average) Implied Premium: Notes: Reflects draft merger agreement dated September 6, 2006. (1) As of June 30th, 2006. Assumes $35.1 million of net cash proceeds are generated from the sale of Apollo.

 

Purchase Price Ratio Analysis – Meteor without Apollo ($ in Thousands) Notes: (1) Reflects common share equivalents underlying options as calculated using the Treasury Stock method. (2) Represents the product of Purchase Price per Share and Target Diluted Shares Outstanding. (3) Data reflects internal management estimate of Meteor financial performance without the contribution of the Apollo division and historical performance. Purchase Price per Share:18.50$ Purchase Price Premium/(Discount) to:Current stock price (09/08/06)16.36$ 13.1%Price 5 Days Ago16.1414.6%Price 30 Days Ago14.1730.6%Price 60 Days Ago14.3229.2%Price 90 Days Ag o16.5411.9%Target Shares Outstanding22,687Additional Shares from Option Conversion(1)608Target Diluted Shares Outstanding23,294Equity Value(2)430,946$ Plus: Total Debt as of 06/30/0616,576Less: Cash as of 06/30/06(65,737)Less: Estimated net cash proceeds from Apollo divestiture(35,163)Enterprise Value346,622$ Meteor Financial Data (3)Enterprise Value as a Multiple of:Twelve Months Ending December 31, 2005A Revenue178,317$ 1.9xTwelve Months Ending September 30, 2006E Revenue209,9601.7xTwelve Months Ending December 31, 2006E Revenue219,9261.6xTwelve Months Ending December 31, 2005A EBITDA35,957$ 9.6xTwelve Months Ending September 30, 2006E EBITDA30,46311.4xTwelve Months Ending December 31, 2006E EBITDA30,91711.2xTwelve Months Ending December 31, 2005 A EBIT31,043$ 11.2xTwelve Months Ending September 30, 2006E EBIT24,07614.4xTwelve Months Ending December 31, 2006E EBIT24,26214.3xEquity Value as a Multiple of:Twelve Months Ending December 31, 2005A Net Income26,669$ 16.2xTwelve Months Ending September 30, 2006E Net Income21,96419.6xTwelve Months Ending December 31, 2006E Net Income17,16825.1xBook Value (06/30/06)186,446$ 2.3x

 

Meteor Financial Overview

 

Management Case – Meteor without Apollo ($ in millions) Notes: (1) Data reflects internal management estimate of Meteor financial performance without the contribution of the Apollo division and historical performance. (2) Excludes non-recurring items and one-time charges and benefits. Fiscal Year Ending December 31,2004A2005A2006E (1)2007E (1)2008E (1)2009E (1)2010E (1)Revenue$149.6$178.3$219.9$272.3$335.9$409.5$494.2Cost of goods sold75.594.6126.9149.8180.3218.0256.3Gross profit74.183.793.0122.5155.6191.6237.9Research & development6.47.410.614.417.220.825.6SG&A33.057.059.553.962.873.185.0Other operating expense6.90.90.012.512.713.113.6Total operating expenses46.265.370.280.892.7107.0124.1GAAP EBIT27.818.422.841.762.984.6113.8Interest and other income (expense)2.22.418.84.76.79.513.2EBT30.020.941.646.369.6< /font>94.1127.0Income taxes 9.94.214.816.725.133.945.7GAAP Net Income$20.1$16.6$26.8$29.7$44.6$60.2$81.3Add back: Non-recurring items, net of tax$0.0$10.0($9.6)$0.0$0.0$0.0< font size="1" color="white" style="color:white;font-size:1.0pt;">$0.0Non-GAAP Net income$20.1$26.7$17.2$29.7$44.6$60.2$81.3Non-GAAP EPS$0.88$1.15$0.74$1.28$1.92$2.60$3.50Fully Diluted Shares Outstanding23.023.123.223.223.223.223.2Non-GAAP EBITDA(2)$31.9$36.0$30.9$50.7$72.9$95.4$124.4Non-GAAP EBIT(2)$27.8$31.0$24.3$41.7$62.9$84.6$113.8Growth Analysis/Assumptions:Revenue growth 26.4%19.2%23.3%23.8%23.4%21.9%20.7%Margin Analysis/Assumptions:Gross margin49.5%47.0%42.3%45.0%46.3%46.8%48.1%R&D4.2%4.2%4.8%5.3%5.1%5.1%5.2%SG&A22.1%32.0%27.1%19.8%18.7%17.8%17.2%EBITDA margin(2)21.3%20.2%14.1%18.6%21.7%23.3%25.2%Operating margin(2)18.6%17.4%11.0%15.3%18.7%20.7%23.0%Profit margin(2)13.4%15.0%7.8%10.9%13.3%14.7%16.4%Tax Rate33.0%20.3%35.6%36.0%36.0%36.0%36.0%

 

Management Case – Non-GAAP Reconciliation ($ in millions) Notes: (1) Data reflects Meteor internal projections. Fiscal Year Ending December 31,2004A2005A2006E (1)2007E (1)2008E (1)2009E (1)2010E (1)GAAP EBIT27.8$ 18.4$ 22.8$ 41.7$ 62.9$ 84.6$ 113.8$ Payments related to Symbol litigation-12.61.5----Sub-to tal non-recurring charges-$ 12.6$ 1.5$ -$ -$ -$ -$ Non-GAAP EBIT27.8$ 31.0$ 24.3$ 41.7$ 62.9< /font>$ 84.6$ 113.8$ Interest & other income (expense)Gain on AOA sale, book basis, pre-tax--16.4----Total non-recurring charges- $ 12.6$ (15.0)$ -$ -$ -$ -$ GAAP Net Income20.1$ 16.6$ 26.8$ 29.7$ 44.6$ 60.2$ 81.3$ Non-recurring items, net of tax-10.0(9.6)----Non-GAAP Net Income20.1$ 26.7$ 17.2$ 29.7$ 44.6$ 60.2$ 81.3$ 

 

Valuation Analyses

 

Stock Price Trading Analysis

 

LTM Stock Price Performance Source: Factset, September 8, 2006. Note:Selected Companies include Datalogic SpA, NCR Corp., Symbol Technologies, Intermec, Inc., Zebra Technologies Corp. 9/8/0510/7/0511/8/0512/9/051/6/062/8/063/10/064/10/065/11/066/9/067/11/068/11/069/11/06708090100110120130140Indexed PriceS&P 500 IndexNasdaq Composite IndexMeteorSelected Companies

 

5 Year Stock Price Performance Source: Factset, September 8, 2006. Note:Selected Companies include Datalogic SpA, NCR Corp., Symbol Technologies, Intermec, Inc., Zebra Technologies Corp. 9/7/012/6/027/9/0212/6/025/9/0310/9/033/10/048/9/041/7/056/10/0511/10/054/11/069/11/06-1001003005007009001,1001,3001,500Indexed PriceS&P 500 IndexNasdaq Composite IndexMeteorSelected Companies

 

Stock Price Performance Since July 1, 2005 Source: Factset, September 8, 2006. 7/1/059/1/0511/2/051/4/063/7/065/9/067/10/069/11/06$10.00$12.00$14.00$16.00$18.00$20.00$22.00$24.00$26.00Share Price02004006008001,0001,200Volume in ThousandsPrice/Volume in U.S. Dollar01-Jul-2005 - 08-Sep-2006

 

5 Year Stock Price Performance Source: Factset, September 8, 2006. Offer = $18.50 9/7/015/24/022/11/0310/31/037/16/044/6/0512/23/059/11/06$0.00$5.00$10.00$15.00$20.00$25.00$30.00$35.00$40.00Share Price05001,0001,5002,0002,5003,000Volume in ThousandsPrice/Volume in U.S. Dollar07-Sep-2001 - 08-Sep-2006

 

Volume Traded At Various Price Levels 3 Month 6 Month 1 Year 3 Year Source:FactSet, as of September 8, 2006. $13.44 - $14.08$14.08 - $14.72$14.72 - $15.36$15.36 - $16.00$16.00 - $16.64$16.64 - $17.28Price0.00.51.01.52.02.53.03.54.0Volume in (Millions)10.3%33.7%33.2%1.1%21.7%0.0%$13.94 - $15.94$15.94 - $17.94$17.94 - $19.94$19.94 - $21.94$21.94 - $23.94Price4.05.06.07.08.09.010.011.012.013.0Volume in (Millions)31.2%16.5%19.1%20.0%13.3%$12.38 - $16.38$16.38 - $20.38$20.38 - $24.38$24.38 - $28.38$28.38 - $32.38Price5.010.015.020.025.030.035.040.045.050.055.0Volume in (Millions)29.7%31.9%21.4%11.7%5.2%$13.11 - $15.11$15.11 - $17.11$17.11 - $19.11$19.11 - $21.11$21.11 - $23.11Price1.02.03.04.05.06.07.08.09.010.0Volume in (Millions)39.3%30.7%8.2%6.9%14.9%

 

Public Company Valuation Analysis

 

Public Company Valuation Analysis – Valuation MetricsNotes: (1) Market value reflects common share equivalents underlying options and warrants as calculated using the treasury stock method. (2) Financial data underlying multiples converted to USD at an exchange rate of $1.2673. (3) Enterprise Value reflects $35 million of net proceeds from sale of Apollo. Financial data underlying multiples excludes the contribution of Apollo. Source: SEC company filings, Wall Street consensus estimates and FactSet. Current market statistics as of September 08, 2006. All financials are net of non-recurring events. Long-term securities are included in cash balances. (in thousands, except per share amounts)Enterprise Value /Market EnterpriseRevenuesEBITDALTMPrice / EPSCompanyValue(1)ValueLTMCY '06ECY '07ELTMCY '06ECY '07EEBITLTMCY '06E CY '07EDatalogic SPA (2)444,693$ 514,257$ 1.5x1.1xNA14.1xNANA16.1x20.4x29.1xNANC R Corporation6,253,7665,835,7661.0x1.0x0.9x8.7x8.6x7.6x13.5x13.2x18.0x15.2xSymbol Technologies, Inc.3,169,4092,977,8781.7x1.6x1.5x13.3x11.8x10.1x19.4x23.4x26.4x20.1xIntermec Inc.1,782,7201,559,9071.7x1.6x1.5x19.5x19.5x14.3x22.3x33.0x36.9x26.1xZebra Technologies Corp.2,376,4681,791,6212.5x2.4x2.2x10.7x11.2x10.0x11.7x21.2x21.9x19.3xMean2,805,411$ 2,535,886$1.7x1.5x1.5x13.3x12.8x10.5x16.6x22.2x26.5x20.2xMedian2,376,4681,791,6211.7x1.6x1.5x13.3x11.5x10.1x16.1x21.2x26.4x19.7xHigh 6,253,7665,835,7662.5x2.4x2.2x19.5x19.5x14.3x22.3x33.0x36.9x26.1xLow444,693514,2571.0x1.0x0.9x8.7x8.6x7.6x11.7x13. 2x18.0x15.2xMgmt. Case at $18.50 per share (3)430,946$ 346,622$1.7x1.6x1.3x11.4x11.2x6.8x14.4x19.5x25.0x14.5xStreet Estimates, at $18.50(3)430,946$ 346,622$ 1.7x1.6x1.4x11.4xNANA14.4x19.5x24.5x19.0x

 

Public Company Valuation Analysis – Market StatisticsNotes: (1) Includes common share equivalents underlying options and warrants as calculated using the treasury stock method. (2) Enterprise Value reflects $35 million of net proceeds from sale of Apollo. Multiples exclude the contribution of Apollo. Source: SEC company filings, Wall Street consensus estimates and FactSet. Current market statistics as of September 08, 2006. Long-term securities are included in cash balances. (in thousands, except per share amounts)Price52 Week RangeSharesMarket EnterpriseCompanyTicker9/8/2006HighLowOutstanding(1)ValueValueDatalogic SPADAL IM7.01$ 9.16$ 6.53$ 63,419444,693$ 514,257$ NCR CorporationNCR34.6144.4529.09180,6926,253,7665,835,766Symbol Technologies, Inc.SBL11.8713.708.01267,0103,169,4092,977,878Intermec Inc.IN27.6638.8120.5064,4511,782,7201,559,907Zebra Technologies Corp.ZBRA33.5347.9729.2370,8762,376,4681,791,621Mgmt. Case at $18.50 per share (2)18.50$ 23,294430,946$ 346,622$ Street Estimates, at $18.50(2)18.50$ 23,294430,946$ 346,622$ 

 

Public Company Valuation Analysis – Growth AnalysisNotes: (1) Financial data converted to USD at an exchange rate of $1.2673. (2) Excludes the contribution of Apollo. Source: SEC company filings, Wall Street consensus estimates. All financials are net of non-recurring events. (in thousands, except per share amounts)RevenueEBITDAEPSLast Twelve MonthsCompanyCY '05ACY '06ECY '07ECY '05ACY '06ECY '07ECY '05ACY '06ECY '07EDatalogic SPA (1)264,368$ 484,438$ NANA39,981$ NANANA0.41$ 0.24$ NANANCR Corporation6,028,0006,115,2006,265,0702.5%657,000674,980 763,76013.2%2.801.922.2818.8%Symbol Technologies, Inc.1,765,6311,819,9501,944,9706.9%168,006252,680295,56017.0%0.340.450.5931.1%Intermec Inc.875,482954,4101,026,3307.5%67,74679,880108,98036.4%0.630.751.0641.3%Zebra Technologies Corp.702,271746,690809,5408.4%169,327159,930178,63011.7%1.561.531.7413.7%Mean6.3%19.6%26.2%Median7.2%15.1%24.9%High 8.4%36.4%41.3%Low2.5%11.7%13.7%Mgmt. Case at $18.50 per share (2)178,317$ 219,926$ 272,263$ 23.8%35,957$ 30,917$ 50,714$ 64.0%1.15$ 0.74$ 1.28$ 73.0%Street Estimates, at $18.50(2)178,317$ 216,149$ 242,163$ 12.0%35,957$ NANANA1.15$ 0.75$ 0.97$ 28.7%07E/06E Growth07E/06E Growth07E/06E Growth

 

Public Company Valuation Analysis – Margin AnalysisNotes: (1) Financial data converted to USD at an exchange rate of $1.2673. (2) Excludes the contribution of Apollo. Source: SEC company filings, Wall Street consensus estimates. All financials are net of non-recurring events. (in thousands, except per share amounts)Last Twelve MonthsLTM Margin AnalysisCompanyGross ProfitEBITDAEBITNet IncomeGross ProfitEBITDAEBITNet IncomeDatalogic SPA (1)159,192$ 36,516$ 31,887$ 15,041$ 47.0%10.8%9.4%4.4%NCR Corporation1,741,000672,000433,000491,00028.9%11.1%7.2%8.1%Symbol Technologies, Inc.814,640223,489153,134111,19245.8%12.6%8.6%6.3%Intermec Inc.382,57279,89569,83654,04641.6%8.7%7.6%5.9%Zebra Technologies Corp.350,129167,629153,624112,91748.8%23.3%21.4%15.7%Mean42.4%13.3%10.8%8.1%Median45.8%11.1%8.6%6.3%High 48.8%23.3%21.4%15.7%Low28.9%8.7%7.2%4.4%Mgmt. Case at $18.50 per share (2)89,522$ 30,463$ 24,076$ 21,964$ 42.6%14.5%11.5%10.5%Street Estimates, at $18.50(2)89,522$ 30,463$ 24,076$ 21,964$ 42.6%14.5%11.5%10.5%

 

Public Company Valuation Analysis – Balance Sheet MetricsNotes: (1) Financial data converted to USD at an exchange rate of $1.2673. (2) Enterprise Value reflects $35 million of proceeds from sale of Apollo. Multiples exclude the contribution of Apollo. Source: SEC company filings. Long-term securities are included in cash balances. (in thousands, except per share amounts)Balance Sheet DataCash &TotalPref. Stock+CommonTotalTotal Debt/CompanyCash Equiv.DebtMin. InterestEquityCapitalizationTotal Cap.Datalogic SPA (1)43,642$ 113,205$ -$ 253,310$ 366,516$ 30 .9%NCR Corporation747,000307,00022,0002,121,0002,450,00012.5%Symbol Technologies, Inc.258,19766,666-1,284,4311,351,0974.9%Intermec Inc.322,813100,000-518,798618,79816.2%Zebra Technologies Corp.584,847--921,069921,0690.0%Mgmt. Case at $18.50 per share (2)100,900$ 16,576$ -$ 186,446$ 203,022$ 8.2%Street Estimates, at $18.50(2)100,900$ 16,576$ -$ 186,446$ 203,022$ 8.2%

 

Public Company Valuation Analysis – Historic and Projected MetricsSource:Capital IQ as of September 8, 2006. (1) Historical figures for Meteor from SEC filings, including Apollo. Projected metrics reflect management projections excluding Apollo. (2) 2006 revenue growth rate excludes the contribution from Apollo for 2005 and 2006. Gross Margin20022003200420052006EDatalogic SpA21.5%19.3%17.9%48.9%NANCR Corp.28.4%27.4%27.0%28.7%NASymbol Technologies Inc.36.6%44.4%47.1%44.8%NAIntermec Inc.45.1%41.0%42.6%41.4%NAZebra Technologies Corp.48.5%50.9%51.8%50.4%NAMean36.0%36.6%37.3%42.9%NAMeteor (1)35.8%42.3%45.9%43.2%42.3%

 

Public Company Valuation Analysis – Historic and Projected MetricsSource:Capital IQ as of September 8, 2006. (1) Historical figures for Meteor from SEC filings, including Apollo. Projected metrics reflect management projections excluding Apollo. Operating Margin20022003200420052006EDatalogic SpA8.3%8.1%9.7%11.9%NANCR Corp.3.4%2.3%3.9%6.8%7.5%Symbol Technologies Inc.2.5%6.6%8.4%5.5%9.8%Intermec Inc.11.6%6.3% 8.1%6.6%7.5%Zebra Technologies Corp.22.1%24.5%26.7%22.2%19.5%Mean9.6%9.5%11.4%10.6%11.1%Meteor (1)5.4%14.6%17.8%15.9%11.0%EBITDA Margin20022003200420052006EDatalogic SpA14.6%12.9%12.3%15.1%NANCR Corp.9.3%7.9%8.5%10.9%11.0%Sym bol Technologies Inc.7.4%11.1%12.9%9.5%13.9%Intermec Inc.14.0%8.3%9.5%7.7%8.4%Zebra Technologies Corp.24.7%26.6%28.6%24.1%21.4%Mean14.0%13.4%< font size="1" color="white" style="color:white;font-size:1.0pt;">14.3%13.5%13.7%Meteor (1)8.3%17.3%20.5%19.3%14.1%

 

Public Company Valuation Analysis – Historic and Projected MetricsSource:Capital IQ as of September 8, 2006. (1) Historical figures for Meteor from SEC filings, including Apollo. Projected metrics reflect management projections excluding Apollo. Net Margin20022003200420052006EDatalogic SpA4.7%4.8%5.6%7.6%NANCR Corp.-3.9%1.0%4.8%8.8%5.8%Symbol Technologies Inc.-3.2%0.2%4.7%4.9%6.5%Intermec Inc.0.3%1.6%2.7%4.6%5.1%Zebra Technologies Corp.15.1%17.1%18.2%16.0%14.5%Mean2.6%4.9%7.2%8.4%8.0%Meteor (1)1.8%10.1%12.7%12.3%7.8%

 

Selected M&A Transactions Analysis

 

Selected Display, Vision and Imaging M&A Transactions Analysis Notes: (1) Enterprise Value assumed equal to Equity Value where Target Company’s balance sheet is not available. (2) Not included for the purpose of calculating summary statistics (3) Target revenue provided by Metrologic Instruments in segmented sales analysis. (4) Target revenue provided by 2002 press release. (5) Enterprise Value reflects estimated $35.1 million of net cash proceeds from sale of Apollo. ($ in millions) Transactions Valued between $10M - $500M Closed January 1, 2000 to present Annc.CloseEquityEnterpriseEnterprise Value / LTMEquity Value /DateDateAcquirorTargetTarget BusinessValueValueSalesEBITDAEBITLTM Net Inc.Book Value11/07/0501/27/06SingulusRAG AGManufactures systems solutions for producers$ 12.1 $ 19.5 $ 163.7 $ 3.3 $ (8.2)$ (27.7)$ 73.3 Technologies SAof optical storage media0.1x5.9xNMNM0.2x10/24/0512/01/05Datalogic SpAPSC Group LLCProvides information tech. services and195.0 195.0 (1) 228.0 21.6 11.3 2.4 NA manufactures fixed position bar code scanners0.9x9.0x17.3x81.3x(2) NA05/09/0505/09/05Cognex Corp.DVT Corp.Dvlps general purpose machine vision systems115.0 110.8 29.3 6.9 6.1 4.1 13.7 and smart camera products3.8x16.1x18.2x28.0x8.4x03/23/0505/02/05Axsys Technologies, Diversified Optical Manufactures thermal surveillance camera 62.4 60.0 (1) 22.0 3.7 2.7 2.5 7.3 Inc.Products, Inc.systems and lenses2.7x16.2x22.2x25.0x8.5x02/03/0503/01/05Datalogic SpAInformatics, Ltd.Manufactures and markets bar coding 26.2 26.2 (1) 34.0 NA NA NA NA products0.8xNANANANA02/14/0502/14/05Cypress Semiconductor Corp.SMal Camera Designs and manufactures digital cameras 42.5 63.2 9.9 (6.8)(7.6)(7.6)(18.2)Technologies, Inc.and provides digital imaging solutions6.4xNMNMNMNM09/27/0409/27/04Metrologic Instruments, Inc.Omniplanar, Inc.(3)Develops sensors and computer hardware 13.0 13.0 (1) 2.6 NA NA NANA NA Instruments, Inc.and software technology for bar code reading5.0xNANANANA10/16/0311/21/03Danaher CorporationAccu-Sort Systems, Manufacture and marketing of fixed position 63.0 63.0 (1) 90.0 NA NA NA NA Inc.industrial bar code scanners0.7xNANANANA11/21/0201/02/03Danaher Corp.Willett International LtdMfr industrial coding, labeling, and bar code products83.0 110.0 110.0 NA NA NA NA 1.0xNANANANA11/23/0211/23/02Littlejohn & Co.PSC Group LLC(4)Provides information tech. services and144.0 144.0 (1) 169.0 NA NA NM NA Instruments, Inc.manufactures fixed position bar code scanners0.9xNANANMNA12/22/0001/08/01Metrologic Adaptive Optics Provides high speed industrial scanning19.0 19.0 (1) 20.0 NA NA NM NA Instruments, Inc.Associates Inc.(3)1.0xNANANMNA03/21/0004/03/00Zebra Technologies Comtec Information Systems Inc.Dvlp data processing, automatic identification88.7 88.4 57.7 10.7 9.9 9.6 19.0 Corp.and printing systems1.5x8.3x8.9x9.2x4.7xHigh$ 230.0 $ 268.0 6.4x16.2x22.2x28.0x8.5xMean72.0 76.0 2.1x11.1x16.6x20.7x5.4xMedian62.7 63.1 1.0x9.0x17.7x25.0x6.5xLow12.1 13.0 0.1x5.9x8.9x9.2x0.2xMgmt. Case at $18.50 per share(5)430.9$ 346.6$ $ 210.0 $ 30.5 $ 24.1 $ 22.0 $ 186.4 1.7x11.4x14.4x19.6x2.3x

 

Premiums Paid Analysis

 

Premiums Paid Analysis(1)Source: Factset, Mergerstat September 8, 2006. (1) Limited to transactions involving 100% ownership acquired. Selected Acquisitions of Public Technology and Technology-Enabled Services Companies Transactions Valued between $100M - $1,000M (Closed September 8, 2005 – Present) ClosePremiumPremiumPremiumPremiumPremiumDateAcquirorTargetTarget Business Description1 Day5 Day30 Day60 Day90 Day8/29/2006Viisage Technology, Inc.Identix, Inc.Designs and manufactures bio-metric scanning systems45%61%70%87%74%8/4/2006Telepacific Communications CorpMpower Holding Corp.Provides telecommunications and Internet services3%15%31%56%59%8/3/2006Assa Abloy ABFargo Electronics, Inc.Manufactures desktops and other computer equipment57%55%53%35%26%8/2/2006Extensity, Inc.Systems Union Group PLCDevelops computer software solutions5%14%7%22%24%7/12/2006Apollo Management LPSOURCECORP, Inc.Provides document managing services, including micro-graphic and electronic imaging-3%-3%-6%-4%14%7/7/2006Applied Materials, Inc.Applied Films Corp.Supplies thin film coated glass for liquid crystal displays24%36%46%36%36%7/6/2006JDA Software Group, Inc.Manugistics Group, Inc.Dvlp software products for synchronized SCM4%9%13%21%37%7/5/2006AttachmateWRQ, Inc.NetIQ Corp.Pvd e-business infrastructure mgmt software for Windows NT and Windows 2000 based systems14%8%10%-7%0%7/5/2006X-Rite, Inc.Amazys Holding AGDvlp color management solutions, including instrumentation, software and services34%42%45%45%41%7/3/2006< /font>Oracle Corp.Portal Software, Inc.Provides billing and revenue management solutions for communications and media companies17%16%46%105%115%7/1/2006Sprint Nextel Corp.UbiquiTel, Inc.Provides Sprint PCS digital communications services2%2%8%2%5%6/21/2006Micron Technology, Inc.Lexar Media, Inc.Dvlp digital film and connectivity products for the digital photography market19%19%3%1%6%6/7/2006General Electric Co.SBS Technologies, Inc.Designs and builds open architecture embedded computer products55%56%47%69%64%6/6/2006HG Investment Managers Ltd.Visma ASADevelops and publishes management software8%9%31%39%41%5/15/2006NBC Universal, Inc.iVillage, Inc.Provides services such as e-mail, message boards, and chat rooms7%1%8%0%15%5/11/2006Dassault Systemes SAMatrixOne, Inc.Develops collaborative product lifecycle management software solutions21%26%39%39%44%5/4/2006Tudor Investment Corp. / Prides Capital / Belfer MgmtPegasus Solutions, Inc.Provides transaction processing and electronic commerce services to the hotel industry15%20%13%6%-11%4/28/2006Microsemi Corp.Advanced Power Technology, Inc.Manufactures and markets high power, high voltage, high performance semiconductors28%31%63%64%71%4/25/2006Lawson Software, Inc.Intentia International ABDevelops e-business solutions38%47%57%16%13%

 

Premiums Paid Analysis(1)Source: Factset, Mergerstat September 8, 2006. (1) Limited to transactions involving 100% ownership acquired. Selected Acquisitions of Public Technology and Technology-Enabled Services Companies Transactions Valued between $100M - $1,000M (Closed September 8, 2005 – Present) ClosePremiumPremiumPremiumPremiumPremiumDateAcquirorTargetTarget Business Description1 Day5 Day30 Day60 Day90 Day4/21/2006Commander Communications Ltd.Volante Group Ltd.Provides information technology services15%17%4%-29%-32%4/6/2006West Corp.Evoke Comms., Inc.Provides web and telephone conferencing services32%32%35%26%22%4/4/2006West Corp.Intrado, Inc.Provides operations support systems services to local exchange and wireless carriers13%14%16%39%58%3/31/2006Infor Global Solutions, Inc.Datastream Systems, Inc.Provides prepackaged software services17%24%23%23%42%3/30/2006SES Global SANew Skies SatellitesOperates as holding company with interest in satellite communications-4%-3%0%4%13%3/14/2006Golden Gate CapitalGEAC Computer Corp. Ltd.Provides software solutions27%25%18%10%27%3/10/2006Liberty Media Corp.Fun Technologies PLCDevelops gaming and exchange betting software28%34%51%26%33%3/10/2006Silver Lake PartnersSERENA Software, Inc.Provides enterprise software change management solutions1%7%20%33%25%3/3/2006Global Healthcare Exchange LLCNeoforma, Inc.Provides e-commerce services to healthcare industry12%18%32%47%46%3/1/2006 Gores Group / Tennenbaum CapitalEnterasys Networks, Inc.Dvlp standards based LAN and WAN connectivity hardware and software products32%30%31%51%98%2/15/2006International Business Machines Corp.Micromuse, Inc.Provides business assurance software solutions39%31%27%36%69%2/15/2006Electronic Arts, Inc.JAMDAT Mobile, Inc.Develops wireless gaming software for mobile devices21%14%45%10%-6%2/15/2006Rudolph Technologies, Inc.August Technology Corp.Pvd critical process enhancing information to microelectronic device manufacturers35%15%11%30%12%2/13/2006Videsh Sanchar Nigam Ltd.Teleglobe Int'l Holdings Ltd.Provides telephone and other telecommunications services22%34%80%45%16%2/10/2006< /font>Nokia OyjIntellisync Corp.Develops and provides mobile application software products and related services-5%1%14%41%97%2/10/2006Investcorp Bank BSCCCC Information Services GroupSupplies advanced software and communications systems to the automotive claims industry4%4%15%13%12%2/9/2006Liberty Media Corp.Provide Commerce, Inc.Provides online shopping services for perishable goods12%17%48%30%37%1/12/2006Secure Computing Corp.CyberGuard Corp.Develops software and manufactures hardware for real-time computers12%13%45%37%18%1/10/2006Symantec Corp.BindView DevelopmentProvides security management software solutions14%14%31%46%27%

 

Premiums Paid Analysis(1) Source: Factset, Mergerstat September 8, 2006. (1) Limited to transactions involving 100% ownership acquired. Selected Acquisitions of Public Technology and Technology-Enabled Services Companies Transactions Valued between $100M - $1,000M (Closed September 8, 2005 – Present) ClosePremiumPremiumPremiumPremiumPremiumDateAcquirorTargetTarget Business Description1 Day5 Day30 Day60 Day90 Day1/6/2006Per-Se Technologies, Inc.NDCHealth Corp.Provides transaction processing services and application systems10%8%7%18%22%12/30/2005EMC Corp.Captiva Software Corp.Provides management solutions25%32%11%37%52%12/29/2005Autonomy Corp. PLCVerity, Inc.Provides business search and process management software30%35%27%39%51%12/19/2005Hewlett-Packard Co.Peregrine Systems, Inc.Dvlp integrated suite of applications that automate the management of complex infrastructures37%35%35%14%17%11/23/2005The Carlyle Group LLCSS&C Technologies, Inc.Develops investment and financial management software13%11%24%39%61%11/14/2005Access Co., Ltd.PalmSource, Inc.Develops and licenses platform software83%76%137%95%103%11/11/2005Elisa OyjSaunalahti Group OyjProvides Internet services10%10%13%32%7%11/4/2005Vector Capital LLCRegister.com, Inc.Provides Internet domain registration services2%1%8%38%33%10/27/2005Brooks Automation, Inc.Helix Technology Corp.Makes cryogenic and vacuum equipment used by makers of semiconductors25%33%27%49%13%10/25/2005Harris Corp.Leitch Technology Corp.Dvlp broadcast TV products, video servers, and telecommunications products40%41%39%27%62%10/24/2005 EAS Group, Inc.Brooktrout, Inc.Manufactures, designs and markets computer hardware and software products38%39%17%32%36%10/21/2005< font size="1" color="white" style="color:white;font-size:1.0pt;">BEA Systems, Inc.Plumtree Software, Inc.Develops, markets and sells corporate portal software and related services18%28%24%25%25%10/3/2005Schneider Electric SABEI Technologies, Inc.Manufactures electronic sensors and engineered subsystems20%15%28%53%43%9/30/2005The News Corp. Ltd.Intermix Media, Inc.Provides internet marketing and entertainment services12%24%91%135%43%9/29/2005Cerberus Capital Management LPEpiphany, Inc.Develops customer relationship software8%11%20%30%19%9/23/2005Concerto Software, Inc.Aspect CommunicationsProvides enterprise communication solutions and services4%8%32%18%9%9/16/2005ScanSoft, Inc.Nuance CommunicationsDvlp a voice interface platform software enabling Internet access from a telephone28%39%57%27%36%Mean20%23%31%34%35%Median17%18%27%32%33%Mgmt. Case at $18.50 per share13%15%31%29%12%

 

Discounted Cash Flow Analysis

 

Free Cash Flow Analysis – Management Forecasts, Meteor without Apollo ($ in millions) Notes: (1) Data reflects Meteor internal projections. (2) Excludes non-recurring items and one-time charges and benefits. Fiscal Year Ending December 31,2004A2005A2006E (1)2007E (1)2008E (1)2009E (1)2010E (1)Revenue$149.6$178.3$219.9$272.3$335.9$409.5$494.2Cost of goods sold75.594.6126.9149.8180.3218.0256.3Gross profit74.183.793.0122.5155.6191.6237.9Research & development6.47.410.614.417.220.825.6Sales, General & Administrative33.057.059.553.962.873.185.0Other operating expense6.90.90.012.512.713.113.6Total operating expenses46.265.370.280.892.7107.0124.1GAAP EBIT27.818.422.841.762.984.6113.8Interest and other income (expense)2.22.418.84.76.79.513.2EBT30.020.941.646.369.6< /font>94.1127.0Income taxes 9.94.214.816.725.133.945.7GAAP Net Income$20.1$16.6$26.8$29.7$44.6$60.2$81.3Add back: Non-recurring items, net of tax$0.0$10.0($9.6)$0.0$0.0$0.0< font size="1" color="white" style="color:white;font-size:1.0pt;">$0.0Non-GAAP Net income$20.1$26.7$17.2$29.7$44.6$60.2$81.3Non-GAAP EPS$0.88$1.15$0.74$1.28$1.92$2.60$3.50Fully Diluted Shares Outstanding23.023.123.223.223.223.223.2Non-GAAP EBITDA(2)$31.9$36.0$30.9$50.7$72.9$95.4$124.4Non-GAAP EBIT(2)$27.8$31.0$24.3$41.7$62.9$84.6$113.8Free Cash Flow:Non-GAAP EBIT27.831.024.341.762.984.6113.8Amortization (1)1.32.23.33.53.42.81.1EBITA29.233.227.645.266.387.4114.9Net taxes (36.0%)(10.5)(12.0)(9.9)(16.3)(23.9)(31.5)(41.4)Tax affected EBITA18.721.317.728.942.455.973.5Plus: depreciation (1)2.72.73.35.66.68.09.5Less: capital expenditures (1)4.04.97.317.515.018.417.3Less: working capital requirements (1)(0.4)5.89.5(2.4)7.78.812.5Unlevered free cash flow17.813.34.219.326.436.753.2

 

Discounted Cash Flow – Management Forecasts, Meteor without Apollo ($ in millions) Notes: (1) Terminal Value is based on a multiple of FY2010E EBITDA of $124.4 million. (2) Net Cash as of June 30, 2006, assuming $35.1 million net cash proceeds from the sale of Apollo. Source: Meteor management Discount Rate10.0%12.5%15.0%17.5%20.0%PV of Fr ee Cash Flows (2007 to 2010)103.3$ 97.0$ 91.3$ 86.1$ 81.3$ Discount RatePlus: Present Value of Terminal Value10.0%12.5%15.0%17.5%20.0%Based on Multiple of 2010E EBITDA (1):8.0x679.7621.2569.0522.1479.99.0x764.6698.9640.1587.3539.910.0x849.6776.6711.2652.6599.9Discount RateEquals: Enterprise Value10.0%12.5%15.0%17.5%20.0%Based on Multiple of 2010E EBITDA (1):8.0x783.0718.3660.3608.2561.29.0x867.9795.9731.4673.4621.210.0x952.9873.6802.5738.7681.2Plus: Net Cash (2)84.3$ 84.3$ 84.3$ 84.3$ 84.3$ Discount RateEquals: Equity Value10.0%12.5%15.0%17.5%20.0%Based on Multiple of 2010E EBITDA ( 1):8.0x867.3802.6744.6692.5645.69.0x952.3880.3815.7757.8705.510.0x1,037.2957.9886.8823.0765.5Divided by: Fully Diluted Shares Outstanding23.323.323.323.323.3Discount Rate Equals: Equity Value Per Share10.0%12.5%15.0%17.5%20.0%Based on Multiple of 2010E EBITDA (1):8.0x37.26$ 34.48$ 31.99$ 29.75$ 27.74$ 9.0x40.9137.8235.0532.5630.3110.0x44.5641.1638.1035.3632.89

 

Management Case – Meteor without Apollo ($ in millions) Notes: (1) Data reflects internal management estimate of Meteor financial performance without the contribution of the Apollo division and historical performance. (2) Excludes non-recurring items and one-time charges and benefits. Fiscal Year Ended December 31, 2005(1) Fiscal Year Ending December 31, 2006(1) Revenue  Q1 05A Q2 05A Q3 05A Q4 05A Q1 06A Q2 06A Q3 06E Q4 06E $39.5 $40.9 $45.9 $52.0 $52.0 $52.9 $53.0 $62.0 Cost of goods sold Gross profit 20.7 21.3 24.1 28.6 30.7 30.2 31.0 35.1 18.8 19.7 21.8 23.5 21.3 22.7 22.0 26.9 Research & development 1.7 2.0 2.0 1.7 2.2 2.4 2.9 3.1 SG&A 10.6 11.2 10.6 24.6 13.7 14.9 16.1 14.8 Other operating expense Total operating expenses 0.0 0.1 0.0 0.8 0.0 0.0 0.0 0.0 12.3 13.2 12.6 27.1 16.0 17.3 19.1 17.8 GAAP EBIT 6.4 6.4 9.3 (3.7) 5.4 5.4 2.9 9.1 Interest and other income (expense) EBT (0.5) 0.2 2.3 0.5 0.4 0.6 0.5 17.3 5.9 6.6 11.5 (3.2) 5.8 6.0 3.4 26.4 Income taxes 2.0 2.5 4.1 (4.3) 2.0 2.1 1.2 9.4 GAAP Net Income $3.9 $4.2 $7.4 $1.2 $3.7 $3.9 $2.2 $17.0 Add back: Non-recurring items, net of tax $0.0 $0.0 $0.0 $10.0 $0.5 $0.4 $0.0 ($10.5) Non-GAAP Net income $3.9 $4.2 $7.4 $11.2 $4.3 $4.3 $2.2 $6.4 Non-GAAP EPS $0.17 $0.18 $0.32 $0.48 $0.18 $0.19 $0.09 $0.28 Fully Diluted Shares Outstanding 23.1 23.1 23.1 23.2 23.2 23.2 23.2 23.2 Non-GAAP EBITDA(2) $7.3 $7.3 $10.8 $10.5 $7.7 $7.6 $4.7 $11.0 Non-GAAP EBIT(2) $6.4 $6.4 $9.3 $8.9 $6.2 $6.1 $2.9 $9.1 Margin Analysis/Assumptions: Gross margin 47.6% 48.0% 47.5% 45.1% 41.0% 43.0% 41.5% 43.5% R&D 4.4% 4.9% 4.4% 3.2% 4.3% 4.6% 5.5% 4.9% SG&A 26.8% 27.3% 23.0% 47.4% 26.4% 28.1% 30.4% 23.8% EBITDA margin(2) 18.6% 17.9% 23.5% 20.2% 14.7% 14.3% 8.9% 17.7% Operating margin(2) 16.3% 15.7% 20.2% 17.1% 11.8% 11.4% 5.5% 14.7% Profit margin(2) 9.9% 10.2% 16.1% 21.5% 8.2% 8.2% 4.1% 10.4%

 

Wall Street Consensus Estimates ($ in thousands) Notes: (1) Source: Institutional Brokers' Estimate System (I/B/E/S) (2) Represents the arithmetic mean of the Analyst Estimates shown for that period Analyst Estimates(1)Consensus Estimates(2)Published DateQ3 FY 06EQ4 FY 06EFY 07EQ3 FY 06EQ4 FY 06EFY 07ERevenueDougherty & Company07/29/0663,010$ 64,231$ 288,006$ Needham & Company07/29/0661,50066,000280,500Raymond James & Associates07/29/0659,74068,130285,42061,832$ 67,234$ 284,863$ Weeden & Company09/01/0661,74070,940281,570William Blair & Company05/12/0663,17166,867288,820EBITDougherty & Company07/29/066,819$ 6,113$ 33,619$ Needham & Company07/29/066,3388,33234,057Raymond James & Associates07/29/067,6509,33037,2207,196$ 8,634$ 37,057$ Weeden & Company09/01/068,10010,70041,100William Blair & Company05/12/067,0758,69339,291Net IncomeDougherty & Company07/29/064,781$ 4,342$ 23,290$ Needham & Company07/29/064,3445,62023,016Raymond James & Associates07/29/065,1706,30025,4904,903$ 5,823$ 25,051$ Weeden & Company09/01/065,5007,10027,600William Blair & Company05/12/064,7205,75525,859

 

Wall Street Consensus Estimates without Apollo Contribution(1) Notes: Source: Institutional Brokers' Estimate System (I/B/E/S) (1) Wall Street Consensus estimates without Apollo represents Wall Street consensus estimates for Meteor, with Apollo's management forecasts deducted. Less: Equals: ($ in thousands) Wall Street Consensus - Without ApolloQ3 FY06EQ4 FY06EFY07E53,845$ 57,416$ 242,163$6,9226,12232,7844,7274,21622,538Wall Street Consensus EstimatesMgmt Forecast - ApolloQ3 FY06EQ4 FY06EFY07ERevenue61,832$ 67,234$ 284,863$EBIT7,1968,63437,057Net Income4,9035,82325,051Mgmt Forecast - ApolloWall Street Consensus - Without ApolloQ3 FY06EQ4 FY06EFY07E7,987$ 9,818$ 42,700$ 2742,5124,2741761,6082,513

 

Management Case Versus Wall Street Consensus Estimates Notes: Source: Institutional Brokers' Estimate System (IBES), Meteor management forecasts (1) Wall Street Consensus estimates without Apollo represents Wall Street consensus estimates for Meteor, with Apollo's management forecasts deducted. (2) Represents the amount by which Wall St. Estimates without Apollo are in excess or deficit to Management Forecast Without Apollo for the same period. ($ in thousands) (2) Mgmt Forecast - Without ApolloWall St. Estimates Without Apollo(1)Diff. Between Mgmt. and Street, $Diff. Between Mgmt. and Street, %Q3 FY06EQ4 FY06EFY07EQ3 FY06EQ4 FY06EFY07EQ3 FY06EQ4 FY06EFY07ERevenue53,047$ 61,991$ 272,263$53,845$ 57,416$ 242,163$(798)$ 4,575$ 30,100$ EBIT2,9449,10541,6906,9226,12232,784(3,978)2,9848,907Net Income2,1736,43629,6584,7274,21622,538(2,554)2,2207,120

 

Free Cash Flow Analysis – 10% Growth Sensitivity Case ($ in millions) Notes: (1) Data reflects internal management estimate of Meteor financial performance without the contribution of the Apollo division and historical performance. (2) Sensitivity case based on 10% growth rate with expense ratios equal to management estimates for FY2006E. (3) Assumes 10% long-term revenue growth for FY2007E-FY2010E. (4) Assumes operating expenses are held constant as a % of sales for FY2007E-FY2010E, based on FY2006E levels. (5) Assumed Meteor earns 4.0% interest on cash for FY2007E-FY2010E (6) Assumes Meteor is taxed at 36% for FY2007E-FY2010E, based on guidance from Meteor management. (7) Excludes non-recurring items and one-time charges Fiscal Year Ending December 31,2004A2005A2006E (1)2007E (2)2008E (2)2009E (2)2010E (2)Revenue(3) $149.6$178.3$219.9$241.9$266.1$292.7$322.0Cost of goods sold75.594.6126.9139.6153.6168.9185.8Gross profit74.183.793.0102.3112.5123.8136.2Research & development(4)6.47.410.611.712.914.215.6Sales, General & Administrative(4)33.057.059.563.970.277.385.0Other operating expense(4)6.90.90.00.00.00.00.0Total operating expenses46.265.370.275.683.191.4100.6GAAP EBIT27.818.422.826.729.432.335.6Interest and other income (expense)(5)2.22.418.83.53.84.14.4EBT30.020.941.630.333.236.440.0Income taxes(6)9.94.214.810.911.913.114.4GAAP Net Income$20.1$16.6$26.8$19.4$21.2$23.3$25.6Add back: Non-recurring items, net of tax$0.0$10.0($9.6)$0.0$0.0$0.0< font size="1" color="white" style="color:white;font-size:1.0pt;">$0.0Non-GAAP Net income$20.1$26.7$17.2$19.4$21.2$23.3$25.6Non-GAAP EPS$0.88$1.15$0.74$0.83$0.92$1.00$1.10Fully Diluted Shares Outstanding23.023.123.223.223.223.223.2Non-GAAP EBITDA(7)$31.9$36.0$30.9$35.7$39.4$43.1$46.2Non-GAAP EBIT(7)$27.8$31.0$24.3$26.7$29.4$32.3$35.6Free Cash Flow:Non-GAAP EBIT27.831.024.326.729.432.335.6Amortization (1)1.32.23.33.53.42.81.1EBITA29.233.227.630.232.835.236.7Net taxes (36.0%)(9.6)(6.8)(9.9)(10.9)(11.8)(12.7)(13.2)Tax affected EBITA19.526.517.719.321.022.523.5Plus: depreciation (1)2.72.73.35.66.68.09.5Less: capital expenditures (1)4.04.97.38.08.89.710.7Less: working capital requirements (1)(0.4)5.89.510.511.512.713.9Unlevered free cash flow18.618.54.26.47.28.18.3

 

Management Case – 10% Growth Sensitivity Case ($ in millions) Notes: (1) Data reflects internal management estimate of Meteor financial performance without the contribution of the Apollo division and historical performance. (2) Sensitivity case based on 10% growth rate with expense ratios equal to management estimates for FY2006E. (3) Assumes 10% long-term revenue growth for FY2007E-FY2010E. (4) Assumes operating expenses are held constant as a % of sales for FY2007E-FY2010E, based on FY2006E levels. (5) Assumed Meteor earns 4.0% interest on cash for FY2007E-FY2010E (6) Assumes Meteor is taxed at 36% for FY2007E-FY2010E, based on guidance from Meteor management. (7) Excludes non-recurring items and one-time charges Fiscal Year Ending December 31,2004A2005A2006E (1)2007E (2)2008E (2)2009E (2)2010E (2)Revenue(3) $149.6$178.3$219.9$241.9$266.1$292.7$322.0Cost of goods sold75.594.6126.9139.6153.6168.9185.8Gross profit74.183.793.0102.3112.5123.8136.2Research & development(4)6.47.410.611.712.914.215.6Sales, General & Administrative(4)33.057.059.563.970.277.385.0Other operating expense(4)6.90.90.00.00.00.00.0Total operating expenses46.265.370.275.683.191.4100.6GAAP EBIT27.818.422.826.729.432.335.6Interest and other income (expense)(5)2.22.418.83.53.84.14.4EBT30.020.941.630.333.236.440.0Income taxes(6)9.94.214.810.911.913.114.4GAAP Net Income$20.1$16.6$26.8$19.4$21.2$23.3$25.6Add back: Non-recurring items, net of tax$0.0$10.0($9.6)$0.0$0.0$0.0< font size="1" color="white" style="color:white;font-size:1.0pt;">$0.0Non-GAAP Net income$20.1$26.7$17.2$19.4$21.2$23.3$25.6Non-GAAP EPS$0.88$1.15$0.74$0.83$0.92$1.00$1.10Fully Diluted Shares Outstanding23.023.123.223.223.223.223.2Non-GAAP EBITDA(7)$31.9$36.0$30.9$35.7$39.4$43.1$46.2Non-GAAP EBIT(7)$27.8$31.0$24.3$26.7$29.4$32.3$35.6Growth Analysis/Assumptions:Revenue growth 26.4%19.2%23.3%10.0%10.0%10.0%10.0%Margin Analysis/Assumptions:Gross margin49.5%47.0%42.3%42.3%42.3%42.3%42.3%R&D4.2%4.2%4.8%4.8%4.8%4.8%4.8%SG&A22.1%32.0%27.1%26.4%26.4%26.4%26.4%EBITDA margin(2)21.3%20.2%14.1%14.8%14.8%14.7%14.3%Operating margin(2)18.6%17.4%11.0%11.0%11.0%11.0%11.0%Profit margin(2)13.4%15.0%7.8%8.0%8.0%8.0%7.9%Tax Rate33.0%20.3%36.0%36.0%36.0%36.0%36.0%

 

Discounted Cash Flow – 10% Growth Sensitivity Case ($ in millions) Notes: (1) Terminal Value is based on a multiple of FY2010E EBITDA of $46.2 million. (2) Net Cash as of June 30, 2006, assuming $35.1 million net cash proceeds from the sale of AOA. Sensitivity case based on 10% growth rate with expense ratios equal to management estimates for FY2006E. Discount Rate10.0%12.5%15.0%17.5%20.0%PV of Free Cash Flows (2007 to 2010)23.5$ 22.2$ 21.1$ 20.0$ 19.0$ Discount RatePlus: Present Value of Terminal Value10.0%12.5%15.0%17.5%20.0%Based on Multiple of 2010E EBITDA (1):8.0x252.2230.5211.1193.7178.19.0x283.7259.3237.5217.9200.310.0x315.2288.1263.9242.1222.6Discount RateEquals: Enterprise Value10.0%12.5%15.0%17.5%20.0%Based on Multiple of 2010E EBITDA (1):8.0x275.7252.7232.2213.7197.19.0x307.2281.5258.5237.9219.310.0x338.7310.4284.9262.1241.6Plus: Net Cash (2)84.3$ 84.3$ 84.3$ 84.3$ 84.3$ Discount RateEquals: Equity Value10.0%12.5%15.0%17.5%20.0%Based on Multiple of 2010E EBITDA ( 1):8.0x360.0337.1316.5298.0281.49.0x391.5365.9342.9322.2303.610.0x423.1394.7369.3346.4325.9Divided by: Fully Diluted Shares Outstanding23.323.323.323.323.3Discount Rate Equals: Equity Value Per Share10.0%12.5%15.0%17.5%20.0%Based on Multiple of 2010E EBITDA (1):8.0x15.47$ 14.48$ 13.60$ 12.80$ 12.09$ 9.0x16.8215.7214.7313.8413.0510.0x18.1816.9615.8714.8814.00

 

Discounted Cash Flow – Sensitivity Analysis ($ in millions) Notes: (1) Assumes FY2007E-FY2010E free cash flows and terminal value are discounted at 15.0% discount rate. (2) Terminal Value is based on a multiple of FY2010E EBITDA of $46.2 million. (3) Net Cash as of June 30, 2006, assuming $35.1 million net cash proceeds from the sale of Apollo. Assumed Long-Term Revenue Growth Rate Assumed Long-Term Revenue Growth Rate Assumed Long-Term Revenue Growth Rate Implied Enterprise Value(1)Assumed Multiple of 2010 EBITDA(2)7.0x8.0x9.0x10.0x11.0x17.5%291.2$ 323.7$ 356.3$ 388.8$ 421.3$ 15.0%270.3300.6331.036 1.3391.712.5%250.6278.9307.2335.5363.810.0%232.2258.5284.9311.3337.7 7.5%214.8239.4264.0288.6313.25.0%198.6221.5244.5267.4290.42.5%183.4204.8226.2247.6269.00.0%169.3189.2209.1229.1249.0Plus: Net Cash (3)84.3$ 84.3$ 84.3$ 84.3$ 84.3$ Equal s: Equity ValueAssumed Multiple of 2010 EBITDA(2)7.0x8.0x9.0x10.0x11.0x17.5%375.5$ 408.1$ 440.6$ 473.1$ 505.6$ 15.0%354.6385.0415.3445.7476.012.5%335.0363.3391.6419.9448.210.0%316.5342.9369.3395.6422.07.5%299.2323.8348.4373.0397.65.0%282.9305.9328.8351.7374.72.5%267.8289.1310.5331.9353.30.0%253.6273.5293.5313.4333.3Divided by: Fully Diluted Shares OutstandingEquity Value per ShareAssumed Multiple of 2010 EBITDA(2)7.0x8.0x9.0x10.0x11.0x17.5%16.13$ 17.53$ 18.93$ 20.33$ 21.73$ 15.0%15.2416.5417.8419.1520.4512.5%14.3915.6116.8218.0419.2610.0%13.6014.7315.8717.0018.137.5%12.8513.9114.9716.0217.085.0%12.1613.1414.1315.1116.102.5%11.5012.4213.34 14.2615.180.0%10.9011.7512.6113.4714.32

EX-99.(C)(3)

Exhibit (c) (3)

 

September 6, 2006 Valuation Materials for the Special Committee 445 Park Avenue New York, NY 10022-4406 (212) 371-8300 One Post Office Square, 19th Floor Boston, MA 02109 (617) 457-0910 3000 Sand Hill Road, Building 2 Menlo Park, CA 94025 (650) 854-9111 One Ferry Building, Suite 240 San Francisco, CA 94111 (415) 262-4860 Project Meteor

 

Table of Contents Review of Financial Projections Section 1 Public Company Valuation Analysis M&A Transaction Analysis Premiums Paid Analysis Purchase Price Ratio Analysis Stock Price Trading Analysis Preliminary Valuation Analyses Section 2

 

Review of Financial Projections

 

Management Case – Meteor without AOA ($ in millions) Notes: (1) Data reflects Meteor internal projections. (2) Excludes non-recurring items and one-time charges Fiscal Year Ending December 31,2004A2005A2006E (1)2007E (1)2008E (1)2009E (1)2010E (1)Revenue$149.6$178.3$219.9$272.3$335.9$409.5$494.2Cost of goods sold75.594.6126.9149.8180.3218.0256.3Gross profit74.183.793.0122.5155.6191.6237.9Research & development6.47.210.614.417.220.825.6SG&A33.051.247.253.962.873.185.0Other operating expense6.96.912.312.512.713.113.6Total operating expenses46.265.370.280.892.7107.0124.1GAAP EBIT27.818.422.841.762.984.6113.8Interest and other income (expense)2.21.918.84.76.79.513.2EBT30.020.341.646.369.6< /font>94.1127.0Income taxes 9.94.514.816.725.133.945.7GAAP Net Income$20.1$15.8$26.8$29.7$44.6$60.2$81.3Add back: Non-recurring items, net of tax$0.0$9.8($9.6)$0.0$0.0$0.0$0.0Non-GAAP Net income$20.1$25.7$17.2$29.7$44.6$60.2$81.3Non-GAAP EPS$0.88$1.11$0.74$1.28$1.92$2.60$3.50Fully Diluted Shares Outstanding23.023.123.223.223.223.223.2Non-GAAP EBITDA(2)$31.9$37.1$30.9$50.7$72.9$95.4$124.4Non-GAAP EBIT(2)$27.8$31.0$24.3$41.7$62.9$84.6$113.8Growth Analysis/Assumptions:Revenue growth 26.4%19.2%23.3%23.8%23.4%21.9%20.7%Margin Analysis/Assumptions:Gross margin49.5%47.0%42.3%45.0%46.3%46.8%48.1%R&D4.2%4.0%4.8%5.3%5.1%5.1%5.2%SG&A22.1%28.7%21.5%19.8%18.7%17.8%17.2%EBITDA margin(2)21.3%20.8%14.1%18.6%21.7%23.3%25.2%Operating margin(2)18.6%17.4%11.0%15.3%18.7%20.7%23.0%Profit margin(2)13.4%14.4%7.8%10.9%13.3%14.7%16.4%Tax Rate33.0%22.0%35.6%36.0%36.0%36.0%36.0%

 

Management Case – Non-GAAP Reconciliation ($ in millions) Notes: (1) Data reflects Meteor internal projections. Fiscal Year Ending December 31,2004A2005A2006E (1)2007E (1)2008E (1)2009E (1)2010E (1)GAAP EBIT27.8$ 18.4$ 22.8$ 41.7$ 62.9$ 84.6$ 113.8$ Payments related to Symbol litigation-12.61.5----Sub-to tal non-recurring charges-$ 12.6$ 1.5$ -$ -$ -$ -$ Non-GAAP EBIT27.8$ 31.0$ 24.3$ 41.7$ 62.9< /font>$ 84.6$ 113.8$ Interest & other income (expense)Gain on AOA sale, book basis, pre-tax--16.4----Total non-recurring charges- $ 12.6$ (15.0)$ -$ -$ -$ -$ GAAP Net Income20.1$ 15.8$ 26.8$ 29.7$ 44.6$ 60.2$ 81.3$ Non-recurring items, net of tax-9.8(9.6)----Non-GAAP Net Income20.1$ 25.7$ 17.2$ 29.7$ 44.6$ 60.2$ 81.3$ 

 

Preliminary Valuation Analyses

 

Purchase Price Ratio Analysis

 

Purchase Price Ratio Analysis – Meteor without AOA ($ in Thousands) Notes: (1) Reflects common share equivalents underlying options as calculated using the Treasury Stock method. (2) Source: Meteor management forecasts without AOA and historical performance. (3) Reflects Francisco Partners estimates based on input from Meteor management. Assumed Mid-Point Current Offer Purchase Price per Share:18.00$ 18.50$ 19.00$ 19.50$ 20.00$ Purchase Price Premium/(Discount) to:Current stock price (09/05/06)16.32$ 10.3%13.4%16.4%19.5%22.5%Price 5 Days Ago16.509.1%12.1%15.2%18.2%21.2%Price 30 Days Ago14.7721.9%25.3%28.6%32.0%35.4%Price 60 Days Ago14.9820.2%23.5%26.8%30.2%33.5%Price 90 Days Ago17.502.9%5.7%8.6%11.4%14.3%Target Shares Outstanding22,68722,68722,68722,68722,687Additional Shares from Option Conversion(1)603608612615619Target Diluted Shares Outstanding23,29023,29423,29823,30223,306Equity Value419,222$ 430,946$ 442,670$ 454,395$ 466,119$ Plus: Total Debt as of 06/30/0616,57616,57616,57616,57616,576Less: Cash as of 06/30/06(65,737)(65,737)(65,737)(65,737)(65,737)Less: Net cash proceeds from AOA divestiture(35,163)(35,163)(35,163)(35,163)(35,163)Enterprise Value334,898$ 346,622$ 358,346$ 370,071$ 381,795$ Meteor Projected Financials (2)Enterprise Value as a Multiple of:Twelve Months Ending December 31, 2005A Revenue178,317$ 1.9x1.9x2.0x2.1x2.1xTwelve Months Ending September 30, 2006E Revenue(3)209,9601.6x1.7x1.7x1.8x1.8xTwelve Months Ending December 31, 2006E Revenue219,9261.5x1.6x1.6x1.7x1.7xTwelve Months Ending December 31, 2005A EBITDA37,124$ 9.0x9.3x9.7x10.0x10.3xTwelve Months Ending September 30, 2006E EBITDA(3)30,16211.1x11.5x11.9x12.3x12.7xTwelve Months Ending December 31, 2006E EBITDA30,91710.8x11.2x11.6x12.0x12.3xTwelve Months Ending December 31, 2005A EBIT31,021$ 10.8x11.2x11.6x11.9x12.3xTwelve Months Ending September 30, 2006E EBIT(3)23,77414.1x14.6x15.1x15.6x16.1xTwelve Months Ending December 31, 2006E EBIT24,26213.8x14.3x14.8x15.3x15.7xEquity Value as a Multiple of:Twelve Months Ending December 31, 2005A Net Income25,674$ 16.3x16.8x17.2x17.7x18.2xTwelve Months Ending December 31, 2006E Net Income17,16824.4x25.1x25.8x26.5x27.2xBook Value (06/30/06)186,446$ 2.2x2.3x2.4x2.4x2.5x

 

Stock Price Trading Analysis

 

LTM Stock Price Performance Source: Factset, September 5, 2006. Note:Selected Companies include Datalogic SpA, NCR Corp., Symbol Technologies, Intermec, Inc., Zebra Technologies Corp. 9/2/059/30/0511/2/0512/2/051/2/062/2/063/3/064/4/065/5/066/5/067/5/068/4/069/5/06708090100110120130 140150Indexed PriceS&P 500 IndexNasdaq Composite IndexMeteorSelected Companie s

 

5 Year Stock Price Performance Source: Factset, September 5, 2006. Note:Selected Companies include Datalogic SpA, NCR Corp., Symbol Technologies, Intermec, Inc., Zebra Technologies Corp. 9/4/012/1/027/5/0212/4/025/6/0310/3/033/5/048/4/041/4/056/3/0511/4/054/5/069/5/06-1001003005007009001,1001,300Indexed PriceS&P 500 IndexNasdaq Composite IndexMeteorSelected Companies

 

Stock Price Performance Since July 1, 2005 Source: Factset, September 5, 2006. 7/1/058/31/0511/1/051/2/063/3/065/5/067/6/069/6/06$10.00$12.00$14.00$16.00$18.00$20.00$22.00$24.00$26.00Share Price02004006008001,0001,200Volume in ThousandsPrice/Volume in U.S. Dollar01-Jul-2005 - 05-Sep-2006

 

5 Year Stock Price Performance Source: Factset, September 5, 2006. 8/31/015/17/022/4/0310/24/037/9/043/30/0512/16/059/4/06$0.00$5.00$10.00$15.00$20.00$25.00$30.00$35.00$40.00Share Price05001,0001,5002,0002,5003,000Volume in ThousandsPrice/Volume in U.S. Dollar31-Aug-2001 - 01-Sep-2006

 

Volume Traded At Various Price Levels 3 Month 6 Month 1 Year 3 Year Source:FactSet, as of September 5, 2006. $13.44 - $14.08$14.08 - $14.72$14.72 - $15.36$15.36 - $16.00$16.00 - $16.64$16.64 - $17.28Price0.00.51.01.52.02.53.03.54.04.55.0Volume in (Millions)10.0%32.7%40.3%1.1%16.0%0.0%$13.94 - $15.94$15.94 - $17.94$17.94 - $19.94$19.94 - $21.94$21.94 - $23.94Price4.05.06.07.08.09.010.011.012.013.0Volume in (Millions)31.7%15.0%19.4%20.3%13.5%$12.38 - $16.38$16.38 - $20.38$20.38 - $24.38$24.38 - $28.38$28.38 - $32.38Price5.010.015.020.025.030.035.040.045.050.055.0Volume in (Millions)29.2%32.2%21.7%11.6%5.2%$13.11 - $15.11$15.11 - $17.11$17.11 - $19.11$19.11 - $21.11$21.11 - $23.11Price1.02.03.04.05.06.07.08.09.010.0Volume in (Millions)38.7%27.8%8.1%6.8%18.6%

 

Public Company Valuation Analysis

 

Public Company Valuation Analysis – Valuation MetricsNotes: (1) Market value reflects common share equivalents underlying options and warrants as calculated using the treasury stock method. (2) Financial data underlying multiples converted to USD at an exchange rate of $1.2835. (3) Enterprise Value reflects $35 million of net proceeds from sale of AOA. LTM financial data represents Francisco Partners estimates based on input from Meteor management.and excludes the contribution of AOA. Source: SEC company filings, Wall Street consensus estimates and FactSet. Current market statistics as of August 21, 2006. All financials are net of non-recurring events. Long-term securities are included in cash balances. (in thousands, except per share amounts)Enterprise Value /Market EnterpriseRevenuesEBITDALTMPrice / EPSCompanyValue(1)ValueLTMCY '06ECY '07ELTMCY '06ECY '07EEBITLTMCY '06ECY '07EDatalogic SPA(2)452,380$ 522,739$ 1.5x1.1xNA14.2xNANA16.2x20.9x29.3xNANCR Corporation6,288,9835,870,9831.0x1.0x0.9x8.7x8.7x7.7x13.6x13.3x18.1x15.3xS ymbol Technologies, Inc.3,196,9693,005,4381.7x1.7x1.6x13.4x11.9x10.2x19.6x23.5x26.6x20.6xIntermec Inc.1,975,9451,753,1321.9x1.8x1.7x21.9x21.9x 16.1x25.1x36.6x41.4x29.5xZebra Technologies Corp.2,454,5211,869,6742.6x2.5x2.3x11.2x11.7x10.5x12.2x21.9x22.6x19.9xMean2,873,760$ 2,604,393$1.7x1.6x1.6x13.9x13.6x11.1x17.3x23.2x27.6x21.3xMedian2,454,5211,869,6741.7x1.7x1.6x13.4x11.8x10.3x16.2x21.9x26.6x20.3xHigh 6,288,9835,870,9832.6x2.5x2.3x21.9x21.9x16.1x25.1x36.6x41.4x29.5xLow452,380522,7391.0x1.0x0.9x8.7x8.7x7.7x12.2x13.3x18.1x15.3xMgmt. Case at $19.00 per share(3)442,670$ 358,346$1.7x1.6x1.3x11.9x11.6x7.1x15.1xNA25.7x14.9x

 

Public Company Valuation Analysis – Market StatisticsNotes: (1) Includes common share equivalents underlying options and warrants as calculated using the treasury stock method. (2) Enterprise Value reflects $35 million of net proceeds from sale of AOA. Source: SEC company filings, Wall Street consensus estimates and FactSet. Current market statistics as of September 05, 2006. Long-term securities are included in cash balances. (in thousands, except per share amounts)Price52 Week RangeSharesMarket EnterpriseCompanyTicker9/5/2006HighLowOutstanding(1)ValueValueDatalogic SPADAL IM7.13$ 9.16$ 6.53$ 63,419452,380$ 522,739$ NCR CorporationNCR34.8044.4529.09180,7186,288,9835,870,983Symbol Technologies, Inc.SBL11.9513.708.01267,5293,196,9693,005,438Intermec Inc.IN30.6538.8120.5064,4681,975,9451,753,132Zebra Technologies Corp.ZBRA34.6347.9729.2370,8782,454,5211,869,674Mgmt. Case at $19.00 per share(2)19.00$ 23,298442,670$ 358,346$ 

 

Public Company Valuation Analysis – Growth AnalysisNotes: (1) Financial data converted to USD at an exchange rate of $1.2818. (2) Excludes the contribution of AOA. Source: SEC company filings, Wall Street consensus estimates and FactSet. All financials are net of non-recurring events. (in thousands, except per share amounts)RevenueEBITDAEPSLast Twelve MonthsCompanyCY '05ACY '06ECY '07ECY '05ACY '06ECY '07ECY '05ACY '06ECY '07EDatalogic SPA(1)267,392$ 489,981$ NA83.2%40,438$ NANANA< /font>0.41$ 0.24$ NA-40.8%NCR Corporation6,028,0006,115,2006,265,0701.4%657,000674,980763,7602.7%2.801.922.28-31.4%Symbol Technologies, Inc.1,765,6311,818,5101,937,5703.0%168,006252,680295,56050.4%0.340.450.5830.9%Intermec Inc.875,482952,4001,023,2808.8%67,74679,880108,98017.9%0.630.741.0416.8%Zebra Technologies Corp.702,271 747,430811,9306.4%169,327159,930178,630-5.5%1.561.531.74-1.7%Mean20.6%16.4%-5.2%Median6.4%10.3%-1.7%High 83.2%50.4%30.9%Low1.4%-5.5%-40.8%Mgmt. Case a t $19.00 per share(2)178,317$ 219,926$ 272,263$ 23.3%37,124$ 30,917$ 50,714$ -16.7%1.11$ 0.74$ 1.28$ -3 3.4%06E/05A Growth06E/05A Growth06E/05A Growth

 

Public Company Valuation Analysis – Margin AnalysisNotes: (1) Financial data converted to USD at an exchange rate of $1.2818. (2) LTM financial data represents Francisco Partners estimates based on input from Meteor management.and excludes the contribution of AOA. Source: SEC company filings, Wall Street consensus estimates and FactSet. All financials are net of non-recurring events. (in thousands, except per share amounts)Last Twelve MonthsLTM Margin AnalysisCompanyGross ProfitEBITDAEBITNet IncomeGross ProfitEBITDAEBITNet IncomeDatalogic SPA(1)161,013$ 36,934$ 32,251$ 14,944$ 47.0%< font size="1" color="white" style="color:white;font-size:1.0pt;">10.8%9.4%4.4%NCR Corporation1,741,000672,000433,000491,00028.9%11.1%7.2%8.1%Symbol Technologies, Inc.814,640223,489153,134111,19245.8%12.6%8.6%6.3%Intermec Inc.382,57279,89569,83654,04641.6%8.7%7.6%5.9%Zebra Technologies Corp.350,129167,629153,624112,91748.8%23.3%21.4%15.7%Mean42.4%13.3%10.8%8.1%Median45.8%11.1%8.6%6.3%High 48.8%23.3%21.4%15.7%Low28.9%8.7%7.2%4.4%Mgmt. Case at $19.00 per share(2)89,030$ 30,162$ 23,774$ NA42.4%14.4%11.3%< /font>NA

 

Public Company Valuation Analysis – Balance Sheet MetricsNotes: (1) Financial data converted to USD at an exchange rate of $1.2818. (2) Cash balance includes $35 million of proceeds from sale of AOA. Source: SEC company filings and FactSet. Long-term securities are included in cash balances. (in thousands, except per share amounts)Balance Sheet DataCash &TotalPref. Stock+CommonTotalTotal Debt/CompanyCash Equiv.DebtMin. InterestEquityCapitalizationTotal Cap.Datalogic SPA(1)44,141$ 114,501$ -$ 256,209$ 370,709$ 30.9%NCR Corporation747,000307,00022,0002,121,0002,450,00012.5%Symbol Technologies, Inc.258,19766,666-1,284,4311,351,0974.9%Intermec Inc.322,813100,000-518,798618,79816.2%Zebra Technologies Corp.584,847--921,069921,0690.0%Mgmt. Case at $19.00 per share(2)100,900$ 16,576$ -$ 186,446$ 203,022$ 8.2%

 

Public Company Valuation Analysis – Historic MetricsSource:Capital IQ as of September 5, 2006. Revenue Growth20022003200420052006Datalogic SpANA11.6%12.5%40.8%83.2%NCR Corp.-5.6%0.2%6.9%0.7%1.4%Symbol Technologies Inc.-5.8%9.2%13.2%1.9%3.0%Intermec Inc.-47.9%-5.1%14.8%7.9%8.8%Zebra Technologies Corp.5.7%12.8%23.6%5.9%6.4%Mean-13.4%5.7%14.2%11.5%20.6%Meteor3.4%19.2%28.9%18.3%23.3% Gross Margin 2002 2003 2004 2005 2006 Datalogic SpA 21.5% 19.3% 17.9% 48.9% NA NCR Corp. 28.4% 27.4% 27.0% 28.7% NA Symbol Technologies Inc. 36.6% 44.4% 47.1% 44.8% NA Intermec Inc. 45.1% 41.0% 42.6% 41.4% NA Zebra Technologies Corp. 48.5% 50.9% 51.8% 50.4% NA Mean 36.0% 36.6% 37.3% 42.9% NA Meteor 35.8% 42.3% 45.9% 43.2% 42.3%

 

Operating Margin 2002 2003 2004 2005 2006 Datalogic SpA 8.3% 8.1% 9.7% 11.9% NA NCR Corp. 3.4% 2.3% 3.9% 6.8% 7.5% Symbol Technologies Inc. 2.5% 6.6% 8.4% 5.5% 9.8% Intermec Inc. 11.6% 6.3% 8.1% 6.6% 7.4% Zebra Technologies Corp. 22.1% 24.5% 26.7% 22.2% 19.4% Mean 9.6% 9.5% 11.4% 10.6% 11.0% Meteor 5.4% 14.6% 17.8% 15.9% 11.0%Public Company Valuation Analysis – Historic MetricsSource:Capital IQ as of September 5, 2006. EBITDA Margin20022003200420052006Datalogic SpA 14.6%12.9%12.3%15.1%NANCR Corp.9.3%7.9%8.5%10.9%11.0%Symbol Technologies Inc.7.4%< /font>11.1%12.9%9.5%13.9%Intermec Inc.14.0%8.3%9.5%7.7%8.4%Zebra Technologies Corp.24.7%26.6%28.6%24.1%21.4%Mean14.0%13.4%14.3%13.5%13.7%Meteor8.3%17.3%20.5%19.3%14.1%

 

Public Company Valuation Analysis – Historic MetricsSource:Capital IQ as of September 5, 2006. Net Margin20022003200420052006Datalogic SpA4.7%4.8%5.6%7.5%NANCR Corp.-3.9%1.0%4.8%8.8%5.8%Symbol Technologies Inc.-3.2%0.2%4.7%4.9%6.4% Intermec Inc.0.3%1.6%2.7%4.6%5.1%Zebra Technologies Corp.15.1%17.1%18.2%16.0%14.5%Mean2.6%4.9%7.2%8.3%8.0%Meteor1.8%10.1%12.7%12.3%7.8%

 

M&A Transaction Analysis

 

Selected M&A Transactions Analysis Notes: (1) Enterprise Value for transactions assumed equal to Equity Value for private company analysis. (2) Not included for the purpose of calculating summary statistics (3) Target revenue provided by Metrologic Instruments in segmented sales analysis. (4) Target revenue provided by 2002 press release. (5) Enterprise Value reflects $35 million of net proceeds from sale of AOA. LTM financial data represents Francisco Partners estimates based on input from Meteor management.and excludes the contribution of AOA. ($ in millions) Transactions Valued between $10M - $500M Annc.CloseEquityEnterpriseEnterprise Value / LTMEquity Value /DateDateAcquirorTargetTarget BusinessValueValueSalesEBITDAEBITLTM Net Inc.Book Value11/07/0501/27/06SingulusRAG AGManufactures systems solutions for producers$ 12.1 $ 19.5 $ 163.7 $ 3.3 $ (8.2)$ (27.7)$ 73.3 Technologies SAof optical storage media0.1x5.9xNMNM0.2x10/24/0512/01/05Datalogic SpAPSC Group LLCProvides information tech. services and195.0 195.0 (1) 228.0 21.6 11.3 2.4 NA manufactures fixed position bar code scanners0.9x9.0x17.3x81.3x(2) NA05/09/0505/09/05Cognex Corp.DVT Corp.Dvlps general purpose machine vision systems115.0 110.8 29.3 6.9 6.1 4.1 13.7 and smart camera products3.8x16.1x18.2x28.0x8.4x03/23/0505/02/05Axsys Technologies, Diversified Optical Manufactures thermal surveillance camera 62.4 60.0 (1) 22.0 3.7 2.7 2.5 7.3 Inc.Products, Inc.systems and lenses2.7x16.2x22.2x25.0x8.5x02/03/0503/01/05Datalogic SpAInformatics, Ltd.Manufactures and markets bar coding 26.2 26.2 (1) 34.0 NA NA NA NA products0.8xNANANANA02/14/0502/14/05Cypress Semiconductor Corp.SMal Camera Designs and manufactures digital cameras 42.5 63.2 9.9 (6.8)(7.6)(7.6)(18.2)Technologies, Inc.and provides digital imaging solutions6.4xNMNMNMNM09/27/0409/27/04Metrologic Instruments, Inc.Omniplanar, Inc.(3)Develops sensors and computer hardware 13.0 13.0 (1) 2.6 NA NA NANA NA Instruments, Inc.and software technology for bar code reading5.0xNANANANA07/26/0409/09/04Symbol Technologies, Matrics, Inc.Designs and manufactures radio frequency 230.0 268.0 6.4 (16.3)(16.4)(19.1)(34.8)Inc.identification labels and tags41.9x(2) NMNMNMNM10/16/0311/21/03Danaher CorporationAccu-Sort Systems, Manufacture and marketing of fixed position 63.0 63.0 (1) 90.0 NA NA NA NA Inc.industrial bar code scanners0.7xNANANANA11/23/0211/23/02Littlejohn & Co.PSC Group LLC(4)Provides information tech. services and144.0 144.0 (1) 169.0 NA NA NM NA Instruments, Inc.manufactures fixed position bar code scanners0.9xNANANMNA12/22/0001/08/01Metrologic Adaptive Optics Provides high speed industrial scanning19.0 19.0 (1) 20.0 NA NA NM NA Instruments, Inc.Associates Inc.(3)1.0xNANANMNA03/21/0004/03/00Zebra Technologies Comtec Information Systems Inc.Dvlp data processing, automatic identification88.7 88.4 57.7 10.7 9.9 9.6 19.0 Corp.and printing systems1.5x8.3x8.9x9.2x4.7xHigh$ 230.0 $ 268.0 6.4x16.2x22.2x28.0x8.5xMean84.2 89.2 2.2x11.1x16.6x20.7x5.4xMedian62.7 63.1 1.0x9.0x17.7x25.0x6.5xLow12.1 13.0 0.1x5.9x8.9x9.2x0.2xMgmt. Case at $19.00 per share(5)442.7$ 358.3$ $ 210.0 $ 30.2 $ 23.8 NA $ 186.4 1.7x11.9x15.1xNA2.4x

 

Premiums Paid Analysis

 

Premiums Paid Analysis(1)Source: Factset, Mergerstat September 5, 2006. (1) Limited to transactions involving 100% ownership acquired. Transactions Valued between $100M - $1,000M (Closed September 5, 2005 – Present) ClosePrice /Equity ValueEnt. ValuePremiumPremiumPremiumPremiumPremiumDateAcquirorTargetTarget Business DescriptionShare($mm)($mm)1 Day5 Day30 Day60 Day90 Day8/29/2006Viisage Technology, Inc.Identix, Inc.Designs and manufactures bio-metric scanning systems$ 6.67 $ 598.2 $ 577.7 15%28%36%49%39%8/4/2006Telepacific Communications CorpMpower Holding Corp.Provides telecommunications and Internet services1.92 175.9 181.3 3%15%31%56%59%8/3/2006Assa Abloy ABFargo Electronics, Inc.Manufactures desktops and other computer equipment25.50 326.2 288.9 57%55%53%35%26%8/2/2006Extensity, Inc.Systems Union Group PLCDevelops computer software solutions3.73 409.8 406.5 3%14%-84%-85%-85%7/12/2006Apollo Management LPSOURCECORP, Inc.Provides document managing services, including micro-graphic and electronic imaging25.00 389.8 446.1 -3%-3%-6%-4%14%7/7/2006Applied Materials, Inc.Applied Films Corp.Supplies thin film coated glass for liquid crystal displays28.50 447.4 411.9 24%36%46%36%36%7/6/2006< font size="1" color="white" style="color:white;font-size:1.0pt;">JDA Software Group, Inc.Manugistics Group, Inc.Dvlp software products for synchronized SCM2.50 210.3 307.1 4%9%13%21%37%7/5/2006AttachmateWRQ, Inc.NetIQ Corp.Pvd e-business infrastructure mgmt software for Windows NT and Windows 2000 based systems12.20 484.5 440.6 14%8%10%-7%0%7/5/2006X-Rite, Inc.Amazys Holding AGDvlp color management solutions, including instrumentation, software and services63.79 201.4 174.3 3%11%9%9%7%7/3/2006Oracle Corp.Portal Software, Inc.Provides billing and revenue management solutions for communications and media companies4.90 211.7 187.2 17%16%46%105%115%7/1/2006Sprint Nextel Corp.UbiquiTel, Inc.Provides Sprint PCS digital communications services10.35 975.2 1,277.8 2%2%8%2%5%6/21/2006Micron Technology, Inc.Lexar Media, Inc.Dvlp digital film and connectivity products for the digital photography market9.46 782.4 794.7 33%34%16%14%19%6/7/2006General Electric Co.SBS Technologies, Inc.Designs and builds open architecture embedded computer products16.50 259.6 206.4 55%56%47%69%64%6/6/2006HG Investment Managers Ltd.Visma ASADevelops and publishes management software20.57 658.3 690.9 5%5%28%35%40%5/15/2006NBC Universal, Inc.iVillage, Inc.Provides services such as e-mail, message boards, and chat rooms8.50 618.3 562.4 7%1%8%0%15%5/11/2006Dassault Systemes SAMatrixOne, Inc.Develops collaborative product lifecycle management software solutions7.25 378.8 280.2 21%26%39%39%44%5/4/2006Tudor Investment Corp. / Prides Capital / Belfer MgmtPegasus Solutions, Inc.Provides transaction processing and electronic commerce services to the hotel industry9.50 197.6 245.5 15%20%13%6%-11%4/28/2006Microsemi Corp.Advanced Power Technology, Inc.Manufactures and markets high power, high voltage, high performance semiconductors13.87 153.3 151.8 46%49%85%86%94%4/25/2006Lawson Software, Inc.Intentia International ABDevelops e-business solutions3.82 621.2 588.4 93%110%125%66%65%4/21/2006Commander Communications Ltd.Volante Group Ltd.Provides information technology services1.09 109.3 101.6 31%35%65%4%3%

 

Premiums Paid Analysis(1)Source: Factset, Mergerstat September 5, 2006. (1) Limited to transactions involving 100% ownership acquired. Transactions Valued between $100M - $1,000M (Closed September 5, 2005 – Present) ClosePrice /Equity ValueEnt. ValuePremiumPremiumPremiumPremiumPremiumDateAcquirorTargetTarget Business DescriptionShare($mm)($mm)1 Day5 Day30 Day60 Day90 Day4/6/2006West Corp.Evoke Comms., Inc.Provides web and telephone conferencing services2.70 149.7 139.1 32%32%35%26%22%4/4/2006West Corp.Intrado, Inc.Provides operations support systems services to local exchange and wireless carriers26.00 464.0 464.0 13%14%16%39%58%3/31/2006Infor Global Solutions, Inc.Datastream Systems, Inc.Provides prepackaged software services10.26 205.1 155.1 17%19%23%23%42%3/30/2006< /font>SES Global SANew Skies Satellites HoldingsOperates as holding company with interest in satellite communications22.52 727.4 1,073.5 -4%-3%0%4%13%3/14/2006Golden Gate CapitalGEAC Computer Corp. Ltd.Provides software solutions11.10 958.8 771.3 27%25%18%10%27%3/10/2006Liberty Media Corp.Fun Technologies PLCDevelops gaming and exchange betting software6.10 107.8 72.7 23%30%-78%-80%-81%3/10/2006Silver Lake PartnersSERENA Software, Inc.Provides enterprise software change management solutions24.00 987.3 1,118.9 1%7%20%33%25%3/3/2006Global Healthcare Exchange LLCNeoforma, Inc.Provides e-commerce services to healthcare industry10.00 207.1 186.1 12%18%32%47%46%3/1/2006Gores Group / Tennenbaum CapitalEnterasys Networks, Inc.Dvlp standards based LAN and WAN connectivity hardware and software products13.92 380.4 311.6 32%30%31%51%98%2/15/2006International Business Machines Corp.Micromuse, Inc.Provides business assurance software solutions10.00 796.9 743.2 39%31%27%36%69%2/15/2006Electronic Arts, Inc.JAMDAT Mobile, Inc.Develops wireless gaming software for mobile devices27.00 670.8 673.6 21%14%45%10%-6%2/15/2006Rudolph Technologies, Inc.August Technology Corp.Pvd critical process enhancing information to microelectronic device manufacturers10.50 192.1 186.6 35%15%11%30%12%2/13/2006Videsh Sanchar Nigam Ltd.Teleglobe Int'l Holdings Ltd.Provides telephone and other telecommunications services4.50 176.3 242.2 22%34%80%45%16%2/10/2006Nokia OyjIntellisync Corp.Develops and provides mobile application software products and related services5.25 353.1 391.4 -5%1%14%41%97%2/10/2006Investcorp Bank BSCCCC Information Services GroupSupplies advanced software and communications systems to the automotive claims industry26.50 439.1 578.0 4%4%15%13%12%2/9/2006Liberty Media Corp.Provide Commerce, Inc.Provides online shopping services for perishable goods33.75 404.9 400.7 12%17%48%30%37%1/12/2006Secure Computing Corp.CyberGuard Corp.Develops software and manufactures hardware for real-time computers8.82 271.1 259.7 12%13%45%37%18%1/10/2006Symantec Corp.BindView DevelopmentProvides security management software solutions4.00 195.0 166.2 14%14%31%46%27%1/6/2006Per-Se Technologies, Inc.NDCHealth Corp.Provides transaction processing services and application systems19.59 709.2 961.4 10%9%7%19%23%12/30/2005EMC Corp.Captiva Software Corp.Provides management solutions22.25 298.2 278.3 25%32%11%37%52%

 

Premiums Paid Analysis(1) Source: Factset, Mergerstat September 5, 2006. (1) Limited to transactions involving 100% ownership acquired. Meteor Enterprise Value reflects $35 million of net proceeds from sale of AOA. Transactions Valued between $100M - $1,000M (Closed September 5, 2005 – Present) ClosePrice /Equity ValueEnt. ValuePremiumPremiumPremiumPremiumPremiumDateAcquirorTargetTarget Business DescriptionShare($mm)($mm)1 Day5 Day30 Day60 Day90 Day12/29/2005Autonomy Corp. PLCVerity, Inc.Provides business search and process management software13.50 483.4 377.3 30%35%27%39%51%12/19/2005Hewlett-Packard Co.Peregrine Systems, Inc.Dvlp integrated suite of applications that automate the management of complex infrastructures26.08 393.2 363.8 37%35%35%14%17%11/23/2005The Carlyle Group LLCSS&C Technologies, Inc.Develops investment and financial management software37.25 856.7 833.7 13%11%24%39%61%11/14/2005Access Co., Ltd.PalmSource, Inc.Develops and licenses platform software18.50 311.7 295.2 83%76%137%95%103%11/11/2005Elisa OyjSaunalahti Group OyjProvides Internet services3.31 453.9 504.4 33%33%37%53%65%11/4/2005Vector Capital LLCRegister.com, Inc.Provides Internet domain registration services7.81 196.3 143.9 2%1%8%38%33%10/27/2005Brooks Automation, Inc.Helix Technology Corp.Makes cryogenic and vacuum equipment used by makers of semiconductors14.09 368.1 357.8 1%8%-38%-38%-43%10/25/2005Harris Corp.Leitch Technology Corp.Dvlp broadcast TV products, video servers, and telecommunications products11.42 447.0 426.9 39%40%35%23%57%10/24/2005EAS Group, Inc.Brooktrout, Inc.Manufactures, designs and markets computer hardware and software products13.05 166.4 151.7 38%39%17%32%36%10/21/2005BEA Systems, Inc.Plumtree Software, Inc.Develops, markets and sells corporate portal software and related services5.50 183.2 170.6 18%28%24%25%25%10/3/2005Schneider Electric SABEI Technologies, Inc.Manufactures electronic sensors and engineered subsystems35.00 524.2 547.3 20%15%28%53%43%9/30/2005The News Corp. Ltd.Intermix Media, Inc.Provides internet marketing and entertainment services12.00 418.7 414.0 12%24%91%135%43%9/29/2005 Cerberus Capital Management LPEpiphany, Inc.Develops customer relationship software4.20 325.7 326.6 8%11%20%30%19%9/23/2005Concerto Software, Inc.Aspect CommunicationsProvides enterprise communication solutions and services11.60 715.6 610.5 4%1%32%18%9%9/16/2005ScanSoft, Inc.Nuance CommunicationsDvlp a voice interface platform software enabling Internet access from a telephone6.01 217.2 147.7 97%111%66%34%44%Mean22%25%28%30%32%Median17%18%27%33%33%Mgmt. Case at $19.00 per share$19.00$442.67$358.3516%15%29%27%9%