CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share data)
Three Months Ended Years Ended
December 31, September 30, December 31,
2006 2005 2006 2006 2005
Sales $104,533 $80,387 $107,688 $410,742 $325,482
Cost of sales 59,639 50,196 60,674 235,524 208,401
Gross profit 44,894 30,191 47,014 175,218 117,081
Operating expenses:
Research and
development 12,240 9,635 11,345 44,848 39,720
Selling, general
and administrative 15,535 13,671 16,856 61,037 53,631
Amortization of
intangible assets 450 481 453 1,833 2,050
Restructuring
charges 20 166 31 111 2,706
Litigation
settlement -- -- -- -- 3,000
Total
operating
expenses 28,245 23,953 28,685 107,829 101,107
Income from operations 16,649 6,238 18,329 67,389 15,974
Other income (expense),
net 1,060 123 1,044 4,677 (7,479)
Income from continuing
operations before
income taxes 17,709 6,361 19,373 72,066 8,495
Benefit (provision) for
income taxes 21,697 (1,330) (2,381) 15,118 (4,873)
Income from continuing
operations 39,406 5,031 16,992 87,184 3,622
Gain on sale of
discontinued assets 1,000 5,210 -- 1,138 7,855
Results of discontinued
operations -- (216) -- -- 1,340
Income from
discontinued
operations 1,000 4,994 -- 1,138 9,195
Net income $40,406 $10,025 $16,992 $88,322 $12,817
Net income per basic
share
Income from
continuing
operations $0.88 $0.11 $0.38 $1.95 $0.10
Income from
discontinued
operations $0.02 $0.11 $-- $0.03 $0.25
Basic earnings
per share $0.90 $0.23 $0.38 $1.98 $0.35
Net income per diluted
share
Income from
continuing
operations $0.87 $0.11 $0.38 $1.93 $0.10
Income from
discontinued
operations $0.02 $0.11 $-- $0.03 $0.25
Diluted earnings
per share $0.89 $0.22 $0.38 $1.95 $0.34
Basic weighted-average
common shares
outstanding 44,826 44,416 44,762 44,721 37,084
Diluted weighted-average
common shares
outstanding 45,345 44,902 45,166 45,265 37,434
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands)
December 31, December 31,
2006 2005
ASSETS
Current assets:
Cash and cash equivalents $58,240 $52,874
Marketable securities 85,978 6,811
Accounts receivable, net 71,956 64,900
Inventories, net 52,778 56,199
Deferred income taxes 24,434 --
Other current assets 7,341 10,865
Total current assets 300,727 191,649
Property and equipment, net 33,571 39,294
Deposits and other 2,640 3,808
Goodwill and intangibles, net 65,584 69,843
Customer service equipment, net 832 2,407
Deferred income tax assets, net 8,549 3,116
Total assets $411,903 $310,117
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $16,310 $22,028
Other accrued expenses 36,488 23,977
Current portion of capital leases
and senior borrowings 131 2,011
Total current liabilities 52,929 48,016
Long-term liabilities:
Capital leases and senior borrowings 198 2,179
Other long-term liabilities 2,986 2,492
Total long-term liabilities 3,184 4,671
Total liabilities 56,113 52,687
Stockholders' equity 355,790 257,430
Total liabilities and
stockholders' equity $411,903 $310,117
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
RECONCILIATION OF GAAP EARNINGS TO "ADJUSTED" EARNINGS
(in thousands, except per share data)
Three Months Ended Twelve Months Ended
December 31, 2006 December 31, 2006
GAAP Adjustment "Adjusted" GAAP Adjustment "Adjusted"
Sales $104,533 $-- $104,533 $410,742 $-- $410,742
Cost of sales 59,639 -- 59,639 235,524 -- 235,524
Gross profit 44,894 -- 44,894 175,218 -- 175,218
Operating
expenses 28,245 -- 28,245 107,829 -- 107,829
Income from
operations 16,649 -- 16,649 67,389 -- 67,389
Other income
(expense), net 1,060 -- 1,060 4,677 -- 4,677
Income from
continuing
operations
before income
taxes 17,709 -- 17,709 72,066 -- 72,066
Benefit
(provision)
for income
taxes 21,697 (23,492)(1) (1,795) 15,118 (23,492)(1) (8,374)
Income from
continuing
operations 39,406 (23,492) 15,914 87,184 (23,492) 63,692
Gain on sale
of discontinued
assets 1,000 -- 1,000 1,138 -- 1,138
Income from
discontinued
operations 1,000 -- 1,000 1,138 -- 1,138
Net income $40,406 $(23,492) $16,914 $88,322 $(23,492) $64,830
Net income per
basic share
Income from
continuing
operations $0.88 $(0.52) $0.36 $1.95 $(0.53) $1.43
Income from
discontinued
operations $0.02 $-- $0.02 $0.03 $-- $0.03
Basic earnings
per share $0.90 $(0.52) $0.38 $1.98 $(0.53) $1.45
Net income per
diluted share
Income from
continuing
operations $0.87 $(0.52) $0.35 $1.93 $(0.52) $1.41
Income from
discontinued
operations $0.02 $-- $0.02 $0.03 $-- $0.03
Diluted
earnings per
share $0.89 $(0.52) $0.37 $1.95 $(0.52) $1.43
Basic weighted-
average common
shares
outstanding 44,826 44,721
Diluted weighted-
average common
shares
outstanding 45,345 45,265
(1) To eliminate the effect of the reversal of the valuation allowance on
net deferred tax assets at December 31, 2006. We assess the
recoverability of our net deferred tax assets on a quarterly basis,
in accordance with SFAS No. 109, to determine if it is more likely
than not that our net deferred tax assets will be realized. Based
on our 2006 operating results, our management concluded that it was
more likely than not that the majority of net deferred tax assets
would be realized and recorded a reduction in the valuation allowance
of approximately $23.5 million in the fourth quarter of 2006.