Pennsylvania
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0-22920
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11-2948749
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(I.R.S. Employer
Identification No.)
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[ ]
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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[ ]
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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[ ]
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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99.1
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Press Release, dated July 28, 2011
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99.1
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Press Release, dated July 28, 2011
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Three Months Ended
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Six Months Ended
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June 30
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June 30
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2011
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2010
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2011
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2010
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M2M Service Revenues ($ millions)
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9.4 | 8.1 | 18.4 | 16.0 | ||||||||||||
M2M Hardware Revenues ($ millions)
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4.7 | 6.3 | 9.2 | 11.1 | ||||||||||||
Gross Margin
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43.8 | % | 43.0 | % | 44.0 | % | 43.5 | % | ||||||||
GAAP Net Earnings ($ thousands)
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340 | 387 | 570 | 356 | ||||||||||||
Earnings per share ($)
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0.02 | 0.03 | 0.04 | 0.02 | ||||||||||||
New subscriptions
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42,000 | 50,000 | 95,000 | 90,000 | ||||||||||||
Cumulative subscriptions
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1,266,000 | 1,027,000 | 1,266,000 | 1,027,000 |
·
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Increased subscriptions by 23% to 1,266,000 at the end of the second quarter of 2011, compared to 1,027,000 recorded at the end of the second quarter of 2010. During the quarter ended June 30, 2011, the Company added 42,000 net subscriptions, as compared to 50,000 net subscriptions added in the second quarter of 2010.
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·
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Reported M2M revenues of $14.2 million in the second quarter of 2011, compared to $14.4 million in the second quarter of 2010. During the quarter ended June 30, 2011, the Company reported M2M service revenues of $9.4 million and M2M hardware revenues of $4.7 million compared to $8.1 million in service revenues and $6.3 million in hardware revenues, respectively, during the same period in 2010.
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·
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Consolidated gross margin for the three months ended June 30, 2011 was 43.8% compared to 43.0% during the same period in 2010.
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·
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GAAP net earnings for three and six months ended June 30, 2011 were $340,000 and $570,000 respectively compared to $387,000 and $356,000 for the same periods in 2010.
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·
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Numerex ended the second quarter of 2011 with cash and cash equivalents of $10.5 million compared to $4.1 million at the end of the first quarter of 2011. The increase in cash and cash equivalents was primarily due to the drawdown of $6.0 million from our credit facility as well as positive cash flow from operations.
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·
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Announced it is a member of two gold Value Chain Award winning teams recognized during the recent Connected World Conference sponsored by Connected World magazine. The company won awards in both the Hospitality and Supply Chain and Logistics categories.
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·
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Opened its London office and announced a collaboration with Arkessa Limited, a UK-based M2M wireless service provider to foster Numerex's advance in the European M2M market.
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·
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Announced that the Company's GSM communicators for commercial burglary and fire applications have received Underwriters Laboratory (UL) Listing.
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·
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Continued to actively participate in M2M standards-related activity with major standardization organizations from around the world.
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Numerex Corp.
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Condensed Consolidated Statement of Operations
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(In thousands, except per share data)
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(Unaudited)
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Three Months Ended
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Q211 v Q210
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Six Months Ended
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06/30/11
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06/30/10
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Change
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% Change
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06/30/11
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06/30/10
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Change
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% Change
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Net sales:
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Hardware
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$ | 4,751 | $ | 6,467 | $ | (1,716 | ) | -27 | % | $ | 9,336 | $ | 11,285 | $ | (1,949 | ) | -17 | % | ||||||||||||||
Service
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9,622 | 8,431 | 1,191 | 14 | % | 18,806 | 16,635 | 2,171 | 13 | % | ||||||||||||||||||||||
Total net sales
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14,373 | 14,898 | (525 | ) | -4 | % | 28,142 | 27,920 | 222 | 1 | % | |||||||||||||||||||||
Cost of hardware sales
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4,117 | 5,066 | (949 | ) | -19 | % | 8,043 | 9,102 | (1,059 | ) | -12 | % | ||||||||||||||||||||
Cost of services
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3,956 | 3,425 | 531 | 16 | % | 7,713 | 6,659 | 1,054 | 16 | % | ||||||||||||||||||||||
Gross Profit
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6,300 | 6,407 | (107 | ) | -2 | % | 12,386 | 12,159 | 227 | 2 | % | |||||||||||||||||||||
43.8 | % | 43.0 | % | 44.0 | % | 43.5 | % | |||||||||||||||||||||||||
Sales and marketing expenses
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2,229 | 1,759 | 470 | 27 | % | 4,397 | 3,546 | 851 | 24 | % | ||||||||||||||||||||||
General, administrative and legal expenses
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2,271 | 2,517 | (246 | ) | -10 | % | 4,469 | 4,916 | (447 | ) | -9 | % | ||||||||||||||||||||
Engineering and development expenses
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574 | 780 | (206 | ) | -26 | % | 1,168 | 1,372 | (204 | ) | -15 | % | ||||||||||||||||||||
Bad Debt Expense
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98 | 107 | (9 | ) | -8 | % | 179 | 164 | 15 | 9 | % | |||||||||||||||||||||
Depreciation and amortization
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766 | 860 | (94 | ) | -11 | % | 1,541 | 1,732 | (191 | ) | -11 | % | ||||||||||||||||||||
Operating earnings
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362 | 384 | (22 | ) | -6 | % | 632 | 429 | 203 | 47 | % | |||||||||||||||||||||
Interest expense
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(21 | ) | (5 | ) | (16 | ) | 320 | % | (47 | ) | (19 | ) | (28 | ) | 147 | % | ||||||||||||||||
Other income
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15 | - | 15 |
nm
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15 | (40 | ) | 55 | -138 | % | ||||||||||||||||||||||
Earnings before tax
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356 | 379 | (23 | ) | -6 | % | 600 | 370 | 230 | 62 | % | |||||||||||||||||||||
Provision (benefit) for income tax
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16 | (8 | ) | 24 | -300 | % | 30 | 14 | 16 | 114 | % | |||||||||||||||||||||
Net earnings
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$ | 340 | $ | 387 | $ | (47 | ) | -12 | % | $ | 570 | $ | 356 | $ | 214 | 60 | % | |||||||||||||||
Basic earnings per common share
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$ | 0.02 | $ | 0.03 | $ | 0.04 | $ | 0.02 | ||||||||||||||||||||||||
Diluted earnings per common share
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$ | 0.02 | $ | 0.03 | $ | 0.04 | $ | 0.02 | ||||||||||||||||||||||||
Number of shares used in per share calculation
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Basic
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15,053 | 15,074 | 15,019 | 15,076 | ||||||||||||||||||||||||||||
Diluted
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15,844 | 15,234 | 15,767 | 15,226 |
Numerex Corp.
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Supplemental Sales Information
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(in thousands)
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Three Months Ended
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Six Months Ended
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June 30,
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June 30,
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(In thousands)
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2011
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2010
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change
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% change
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2011
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2010
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change
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% change
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Net Sales:
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M2M Services Group
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Hardware
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$ | 4,705 | $ | 6,305 | $ | (1,600 | ) | -25.4 | % | $ | 9,177 | $ | 11,061 | $ | (1,884 | ) | -17.0 | % | ||||||||||||||
Services
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9,446 | 8,128 | 1,318 | 16.2 | % | 18,442 | 16,038 | 2,404 | 15.0 | % | ||||||||||||||||||||||
Sub-Total
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14,151 | 14,433 | (282 | ) | -2.0 | % | 27,619 | 27,099 | 520 | 1.9 | % | |||||||||||||||||||||
Other Service
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Hardware
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46 | 162 | (116 | ) | -71.6 | % | 159 | 224 | (65 | ) | -29.0 | % | ||||||||||||||||||||
Services
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176 | 303 | (127 | ) | -41.9 | % | 364 | 597 | (233 | ) | -39.0 | % | ||||||||||||||||||||
Sub-Total
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222 | 465 | (243 | ) | -52.3 | % | 523 | 821 | (298 | ) | -36.3 | % | ||||||||||||||||||||
Total Net Sales
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Hardware
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4,751 | 6,467 | (1,716 | ) | -26.5 | % | 9,336 | 11,285 | (1,949 | ) | -17.3 | % | ||||||||||||||||||||
Service
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9,622 | 8,431 | 1,191 | 14.1 | % | 18,806 | 16,635 | 2,171 | 13.1 | % | ||||||||||||||||||||||
Total
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$ | 14,373 | $ | 14,898 | $ | (525 | ) | -3.5 | % | $ | 28,142 | $ | 27,920 | $ | 222 | 0.8 | % |
Reconciliation of Non-GAAP Measures
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Three Months Ended
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Six Months Ended
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June 30,
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June 30,
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2011
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2010
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2011
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2010
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(unaudited)
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(unaudited)
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(in thousands)
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Net earnings (GAAP)
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$ | 340 | $ | 387 | $ | 570 | $ | 356 | ||||||||
Non-cash compensation
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237 | 225 | 430 | 488 | ||||||||||||
Litigation related fees
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- | 331 | - | 524 | ||||||||||||
Depreciation and amortization
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766 | 860 | 1,541 | 1,732 | ||||||||||||
Net earnings before non-cash items
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$ | 1,343 | $ | 1,803 | $ | 2,541 | $ | 3,100 |
Consolidated Balance Sheets
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(In thousands)
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June 30,
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December 31,
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2011
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2010
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unaudited
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ASSETS
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CURRENT ASSETS
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Cash and cash equivalents
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$ | 10,543 | $ | 10,251 | ||||
Restricted cash
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265 | 265 | ||||||
Accounts receivable, less allowance for doubtful accounts of $489
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at June 30, 2011 and $356 at December 31, 2010:
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6,502 | 6,518 | ||||||
Inventory
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4,989 | 4,820 | ||||||
Prepaid expenses and other current assets
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1,633 | 1,926 | ||||||
TOTAL CURRENT ASSETS
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23,932 | 23,780 | ||||||
Property and equipment, net
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1,453 | 1,392 | ||||||
Goodwill, net
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23,787 | 23,787 | ||||||
Other intangibles, net
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4,454 | 4,741 | ||||||
Software, net
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2,938 | 3,115 | ||||||
Other assets - long term
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1,451 | 331 | ||||||
TOTAL ASSETS
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$ | 58,015 | $ | 57,146 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
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CURRENT LIABILITIES
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Accounts payable
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$ | 5,972 | $ | 7,507 | ||||
Other current liabilities
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1,094 | 3,765 | ||||||
Note payable
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6,000 | - | ||||||
Deferred revenues
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1,837 | 1,864 | ||||||
Obligations under capital leases
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463 | 447 | ||||||
TOTAL CURRENT LIABILITIES
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15,366 | 13,583 | ||||||
LONG TERM LIABILITIES
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Obligations under capital leases and other long-term liabilities
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- | 237 | ||||||
Deferred income taxes
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- | - | ||||||
Other long term liabilities
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542 | 608 | ||||||
TOTAL LONG TERM LIABILITIES
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542 | 845 | ||||||
COMMITMENTS AND CONTINGENCIES (Note M)
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SHAREHOLDERS’ EQUITY
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Preferred stock - no par value; authorized 3,000,000; none issued
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- | - | ||||||
Class A common stock - no par value, authorized 30,000,000, issued 16,626,082
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shares at June 30, 2011 and 16,362,937 shares at December 31, 2010;
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outstanding 15,064,440 shares at June 30, 2011 and 15,122,128 shares
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at December 31, 2010
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59,025 | 57,696 | ||||||
Class B common stock – no par value; authorized 5,000,000; none issued
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- | - | ||||||
Additional paid-in-capital
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6,791 | 6,403 | ||||||
Treasury stock, at cost, 1,561,642 shares on June 30, 2011
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and 1,240,89 shares on December 31, 2010
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(8,136 | ) | (5,239 | ) | ||||
Accumulated other comprehensive earnings (loss)
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(1 | ) | - | |||||
Retained deficit
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(15,572 | ) | (16,142 | ) | ||||
TOTAL SHAREHOLDERS' EQUITY
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42,107 | 42,718 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
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$ | 58,015 | $ | 57,146 |