Pennsylvania
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0-22920
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11-2948749
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----------------
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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 October 27, 2011
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99.1
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Press Release, dated October 27, 2011
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Three Months Ended
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Nine Months Ended
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September 30
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September 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 Recurring Revenue ($ millions)
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9.8 | 8.6 | 28.3 | 24.7 | ||||||||||||
M2M Embedded Device and Hardware Revenue
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4.9 | 6.3 | 14.1 | 17.4 | ||||||||||||
($ millions)
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Gross Margin
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45.4 | % | 44.6 | % | 44.5 | % | 43.9 | % | ||||||||
GAAP Net earnings ($ millions)
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0.6 | 0.7 | 1.2 | 1.0 | ||||||||||||
Earnings Per Share
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0.04 | 0.04 | 0.08 | 0.07 | ||||||||||||
Non-GAAP Net Earnings before non-Cash &
exceptional Items ($ millions)
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1.9 | 1.8 | 4.3 | 4.9 | ||||||||||||
New subscriptions
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80,000 | 75,000 | 175,000 | 164,000 | ||||||||||||
Total subscriptions
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1,346,000 | 1,102,000 | 1,346,000 | 1,102,000 |
·
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Increased subscriptions by 22% to 1,346,000 at the end of the third quarter of 2011, compared to 1,266,000 and 1,102,000 recorded at the end second quarter of 2011 and at the end of the third quarter of 2010, respectively. During the third quarter of 2011, the Company added 79,000 net subscriptions, as compared to 42,000 net subscriptions added in the second quarter of 2011 and the 75,000 net subscriptions added in the third quarter of 2010.
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·
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Reported M2M revenues of $14.7 million in the third quarter of 2011, compared to $14.2 million in the second quarter of 2011 and $14.9 million in the third quarter of 2010. During the quarter ended September 30, 2011, the Company reported M2M recurring revenues of $9.8 million, as compared $9.4 million in the second quarter of 2011 and $8.6 million during the third quarter of 2010.
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·
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Consolidated gross margin for the third quarter of 2011 was 45.4% compared to 43.8% in the second quarter of 2011 and 44.6% during the third quarter in 2010.
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·
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GAAP net earnings for third quarter of 2011 were $592,000 compared to $340,000 in the second quarter of 2011 and $657,000 during the third quarter of 2010.
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·
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Non-GAAP net earnings before non-cash charges and litigation related legal fees was $1.9 million during the third quarter of 2011 compared to $1.3 million for the second quarter of 2011 and $1.8 million for the third quarter of 2010. A reconciliation of this measure to GAAP results has been provided in the financial table below and further discussion of this measure as compared to GAAP is included elsewhere in this press release.
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Three Months Ended
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September 30,
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June 30,
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September 30,
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||||||||||
2011
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2011
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2010
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(unaudited)
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Net income
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$ | 592 | $ | 340 | $ | 657 | ||||||
Non-cash compensation
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358 | 237 | 263 | |||||||||
Litigation related fees and settlement costs
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169 | - | 83 | |||||||||
Depreciation and amortization
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799 | 766 | 810 | |||||||||
Net income before non-cash items
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$ | 1,918 | $ | 1,343 | $ | 1,813 | ||||||
Basic earnings per common share
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$ | 0.13 | $ | 0.09 | $ | 0.12 | ||||||
Diluted earnings per common share
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$ | 0.12 | $ | 0.08 | $ | 0.12 | ||||||
Number of shares used in per share calculation
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Basic
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15,071 | 15,053 | 15,078 | |||||||||
Diluted
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15,612 | 15,844 | 15,382 |
·
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Named by Connected World magazine on the list of the 100 most innovative M2M technology and connected device providers (“CW 100”). Numerex's continuing presence on this prestigious international list recognizes the company's overall success and impact on the direction of the fast-paced M2M industry.
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·
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Launched FASTTrack Fleet™ tracking, monitoring and theft recovery platform which integrates a configurable web-based application with a variety of monitoring devices that connects via satellite or cellular.
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·
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Announced the introduction of the 2550 GSM Alarm Communicator with Underwriters Laboratory (UL) Listing and expanded alarm protocols for greater compatibility. The model now carries a UL Listing for UL-1023 (Standard for Household Burglar Alarm System Units) and UL-985 (Standard for Household Fire Warning System Units).
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·
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Launched its new satellite-based product (Numerex Satellite FLEX™) which is a lightweight, yet rugged GPS-enabled asset tracking solution. The multi-year battery powered device with highly-reliable worldwide coverage can also be used as a wireless sensor hub to provide additional systems monitoring.
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·
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Developed a new partner program allowing hardware and original equipment manufacturers (OEMs) to effectively reduce the price of their smart devices, modules, and modems by embedding Numerex network technology through a credit-based program.
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·
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Organized a well attended international M2M conference in Atlanta, GA, in collaboration with the Georgia Institute of Technology and the Telecommunications Industry Association.
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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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Nine Months Ended
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09/30/11
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09/30/10
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Change
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% Change
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09/30/11
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09/30/10
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Change
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% Change
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Net revenues:
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M2M recurring revenue
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9,856 | 8,649 | 1,207 | 14 | % | 28,298 | 24,686 | 3,612 | 15 | % | ||||||||||||||||||||||
M2M embedded devices and hardware
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4,885 | 6,299 | (1,414 | ) | -22 | % | 14,062 | 17,360 | (3,298 | ) | -19 | % | ||||||||||||||||||||
Other services revenue
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310 | 457 | (147 | ) | -32 | % | 833 | 1,278 | (445 | ) | -35 | % | ||||||||||||||||||||
Total net revenues:
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15,051 | 15,405 | (354 | ) | -2 | % | 43,193 | 43,324 | (131 | ) | 0 | % | ||||||||||||||||||||
Cost of M2M recurring revenue
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3,979 | 3,307 | 672 | 20 | % | 11,506 | 9,698 | 1,808 | 19 | % | ||||||||||||||||||||||
Cost of M2M embedded devices and hardware
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4,047 | 5,031 | (984 | ) | -20 | % | 11,970 | 13,980 | (2,010 | ) | -14 | % | ||||||||||||||||||||
Cost of Other services cost of revenues
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190 | 201 | (11 | ) | -5 | % | 497 | 622 | (125 | ) | -20 | % | ||||||||||||||||||||
Gross Profit
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6,835 | 6,866 | (31 | ) | 0 | % | 19,220 | 19,024 | 196 | 1 | % | |||||||||||||||||||||
45.4 | % | 44.6 | % | 44.5 | % | 43.9 | % | |||||||||||||||||||||||||
Sales and marketing expenses
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2,137 | 1,744 | 393 | 23 | % | 6,713 | 5,457 | 1,256 | 23 | % | ||||||||||||||||||||||
General, administrative and legal expenses
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2,304 | 2,673 | (369 | ) | -14 | % | 6,772 | 7,586 | (814 | ) | -11 | % | ||||||||||||||||||||
Engineering and development expenses
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809 | 888 | (79 | ) | -9 | % | 1,977 | 2,260 | (283 | ) | -13 | % | ||||||||||||||||||||
Depreciation and amortization
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799 | 810 | (11 | ) | -1 | % | 2,340 | 2,542 | (202 | ) | -8 | % | ||||||||||||||||||||
Total operating expenses
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6,049 | 6,115 | (66 | ) | -1 | % | 17,802 | 17,845 | (43 | ) | 0 | % | ||||||||||||||||||||
Operating earnings
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786 | 751 | 35 | 5 | % | 1,418 | 1,179 | 239 | 20 | % | ||||||||||||||||||||||
Interest expense
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(86 | ) | (44 | ) | (42 | ) | 95 | % | (134 | ) | (62 | ) | (72 | ) | 116 | % | ||||||||||||||||
Other income
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1 | 9 | (8 | ) | -89 | % | 16 | (31 | ) | 47 | -152 | % | ||||||||||||||||||||
Earnings before tax
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701 | 716 | (15 | ) | -2 | % | 1,300 | 1,086 | 214 | 20 | % | |||||||||||||||||||||
Provision for income tax
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109 | 59 | 50 | 85 | % | 138 | 73 | 65 | 89 | % | ||||||||||||||||||||||
Net earnings
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$ | 592 | $ | 657 | $ | (65 | ) | -10 | % | $ | 1,162 | $ | 1,013 | $ | 149 | 15 | % | |||||||||||||||
Basic earnings per common share
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$ | 0.04 | $ | 0.04 | $ | 0.08 | $ | 0.07 | ||||||||||||||||||||||||
Diluted earnings per common share
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$ | 0.04 | $ | 0.04 | $ | 0.07 | $ | 0.07 | ||||||||||||||||||||||||
Number of shares used in per share calculation
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Basic
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15,071 | 15,078 | 15,036 | 15,077 | ||||||||||||||||||||||||||||
Diluted
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15,612 | 15,363 | 15,744 | 15,262 |
Reconciliation of non-GAAP Measures
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Three Months Ended
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Nine Months Ended
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September 30,
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September 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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Net earnings (GAAP)
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$ | 592 | $ | 657 | $ | 1,162 | $ | 1,013 | ||||||||
Non-cash compensation
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358 | 263 | 795 | 751 | ||||||||||||
Litigation related fees and settlement costs
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169 | 83 | 169 | 613 | ||||||||||||
Depreciation and amortization
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799 | 810 | 2,340 | 2,542 | ||||||||||||
Net earnings before non-cash items
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$ | 1,918 | $ | 1,813 | $ | 4,466 | $ | 4,919 | ||||||||
Basic earnings per common share
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$ | 0.13 | $ | 0.12 | $ | 0.30 | $ | 0.33 | ||||||||
Diluted earnings per common share
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$ | 0.12 | $ | 0.12 | $ | 0.28 | $ | 0.32 | ||||||||
Number of shares used in per share calculation
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Basic
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15,071 | 15,078 | 15,036 | 15,077 | ||||||||||||
Diluted
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15,612 | 15,382 | 15,744 | 15,294 |
Consolidated Balance Sheets
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(In thousands)
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September 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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$ | 9,915 | $ | 10,251 | ||||
Restricted cash
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265 | 265 | ||||||
Accounts receivable, less allowance for doubtful accounts of $609
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at September 30, 2011 and $356 at December 31, 2010:
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7,731 | 6,518 | ||||||
Inventory
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5,958 | 4,820 | ||||||
Prepaid expenses and other current assets
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1,390 | 1,926 | ||||||
TOTAL CURRENT ASSETS
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25,259 | 23,780 | ||||||
Property and equipment, net
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1,646 | 1,392 | ||||||
Goodwill, net
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23,787 | 23,787 | ||||||
Other intangibles, net
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4,185 | 4,741 | ||||||
Software, net
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3,111 | 3,115 | ||||||
Other assets - long term
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1,437 | 331 | ||||||
TOTAL ASSETS
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$ | 59,425 | $ | 57,146 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
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CURRENT LIABILITIES
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Accounts payable
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$ | 6,765 | $ | 7,507 | ||||
Other current liabilities
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914 | 3,765 | ||||||
Note payable
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1,200 | - | ||||||
Deferred revenues
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1,637 | 1,864 | ||||||
Obligations under capital leases
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352 | 447 | ||||||
TOTAL CURRENT LIABILITIES
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10,868 | 13,583 | ||||||
LONG TERM LIABILITIES
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Note payable - LT
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4,800 | - | ||||||
Obligations under capital leases and other long-term liabilities
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- | 237 | ||||||
Other long term liabilities
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539 | 608 | ||||||
TOTAL LONG TERM LIABILITIES
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5,339 | 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 16,681,381
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shares at September 30, 2011 and 16,362,937 shares at December 31, 2010;
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||||||||
outstanding 15,119,739 shares at September 30, 2011 and 15,122,128 shares
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||||||||
at December 31, 2010
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59,188 | 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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7,030 | 6,403 | ||||||
Treasury stock, at cost, 1,561,642 shares on September 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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(10 | ) | - | |||||
Retained deficit
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(14,981 | ) | (16,142 | ) | ||||
TOTAL SHAREHOLDERS' EQUITY
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43,091 | 42,718 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
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$ | 59,298 | $ | 57,146 |