[X]
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QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
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For
the quarterly period ended March 31, 2009
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[
]
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
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New
York
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11-2160665
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(State
or other jurisdiction of
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(I.R.S.
Employer
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|
incorporation
or organization)
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Identification
No.)
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89
Arkay Drive, Hauppauge, New York
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11788
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(Address
of principal executive offices)
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(Zip
Code)
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[x] Yes
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[
] No
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[
] Yes
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[
] No
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Large
accelerated filer [ ]
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Accelerated
filer [ ]
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Non-accelerated
filer [ ]
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Smaller
reporting company [x]
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(Do
not check if a smaller reporting company)
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Three Months Ended
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3/31/09
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3/31/08
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Net
sales
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$ | 14,706,475 | $ | 15,335,168 | ||||
Cost
of sales
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8,149,336 | 8,538,718 | ||||||
Gross
profit
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6,557,139 | 6,796,450 | ||||||
Operating
expenses:
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||||||||
Selling,
general and
administrative
expense
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4,565,229 | 4,950,571 | ||||||
Engineering
& development expense
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1,372,743 | 1,521,272 | ||||||
5,937,972 | 6,471,843 | |||||||
Operating
income
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619,167 | 324,607 | ||||||
Interest
income
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(14,286 | ) | (60,825 | ) | ||||
Interest
expense
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- | 10,614 | ||||||
Other
expense
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13,584 | - | ||||||
Income
before income taxes
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619,869 | 374,818 | ||||||
Income
tax expense
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230,000 | 169,000 | ||||||
Net
income
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$ | 389,869 | $ | 205,818 | ||||
Earnings per share:
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||||||||
Basic
and diluted
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$ | .08 | $ | .04 | ||||
Shares
used in computing
earnings
per share:
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||||||||
Basic
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4,619,220 | 4,810,191 | ||||||
Diluted
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4,720,671 | 4,998,260 | ||||||
Six Months Ended
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3/31/09
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3/31/08
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Net
sales
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$ | 30,406,704 | $ | 30,978,709 | ||||
Cost
of sales
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16,702,396 | 17,254,896 | ||||||
Gross
profit
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13,704,308 | 13,723,813 | ||||||
Operating
expenses:
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Selling,
general and
administrative
expense
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9,369,209 | 9,967,994 | ||||||
Engineering
& development expense
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2,899,628 | 2,914,335 | ||||||
12,268,837 | 12,882,329 | |||||||
Operating
income
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1,435,471 | 841,484 | ||||||
Interest
income
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(51,776 | ) | (148,929 | ) | ||||
Interest
expense
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- | 42,684 | ||||||
Other
expense
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59,392 | - | ||||||
Income
before income taxes
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1,427,855 | 947,729 | ||||||
Income
tax expense
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530,000 | 397,000 | ||||||
Net
income
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$ | 897,855 | $ | 550,729 | ||||
Earnings per share:
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Basic
and diluted
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$ | .19 | $ | .11 | ||||
Shares
used in computing
earnings
per share:
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||||||||
Basic
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4,648,211 | 4,805,964 | ||||||
Diluted
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4,745,350 | 5,031,780 | ||||||
ASSETS
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3/31/09
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9/30/08
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(Unaudited)
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CURRENT ASSETS
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Cash
and cash equivalents
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$ | 11,280,300 | $ | 9,560,966 | ||||
Marketable
securities
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175,558 | 227,237 | ||||||
Accounts
receivable, net
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10,321,266 | 14,763,914 | ||||||
Inventories:
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Parts,
components, and materials
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4,560,312 | 3,612,862 | ||||||
Work-in-process
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2,512,539 | 2,407,980 | ||||||
Finished
products
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5,912,735 | 6,545,046 | ||||||
12,985,586 | 12,565,888 | |||||||
Deferred
income taxes
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1,300,299 | 1,230,702 | ||||||
Prepaid
expenses and other current assets
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638,777 | 818,768 | ||||||
TOTAL
CURRENT ASSETS
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36,701,786 | 39,167,475 | ||||||
Property,
plant and equipment
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12,545,945 | 12,971,714 | ||||||
Less
accumulated depreciation and amortization
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(7,598,916 | ) | (7,670,717 | ) | ||||
4,947,029 | 5,300,997 | |||||||
Deferred
income taxes
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869,556 | 1,224,120 | ||||||
Other
assets
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1,062,958 | 1,271,683 | ||||||
TOTAL
ASSETS
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$ | 43,581,329 | $ | 46,964,275 | ||||
LIABILITIES AND SHAREHOLDERS’
EQUITY
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||||||||
CURRENT LIABILITIES
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Accounts
payable
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3,399,956 | 4,267,620 | ||||||
Accrued
compensation and employee benefits
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2,010,237 | 2,779,368 | ||||||
Accrued
expenses
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1,646,000 | 1,760,147 | ||||||
Unearned
revenue
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662,959 | 872,195 | ||||||
Income
taxes payable
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144,491 | 307,242 | ||||||
TOTAL
CURRENT LIABILITIES
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7,863,643 | 9,986,572 | ||||||
Unearned
revenue
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309,590 | 303,857 | ||||||
Other
long-term liabilities
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2,059,165 | 2,069,866 | ||||||
TOTAL
LIABILITIES
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10,232,398 | 12,360,295 | ||||||
SHAREHOLDERS’ EQUITY
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||||||||
Common
stock, par value $.01
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51,556 | 51,246 | ||||||
Capital
in excess of par value
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23,503,570 | 23,261,936 | ||||||
Retained
earnings
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13,232,638 | 12,334,783 | ||||||
Less
treasury stock, at cost
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(2,633,694 | ) | (1,768,135 | ) | ||||
Accumulated
other comprehensive income (loss)
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(805,139 | ) | 724,150 | |||||
TOTAL
SHAREHOLDERS’ EQUITY
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33,348,931 | 34,603,980 | ||||||
TOTAL
LIABILITIES AND SHAREHOLDERS’ EQUITY
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$ | 43,581,329 | $ | 46,964,275 | ||||
Six Months Ended
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3/31/09
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3/31/08
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Cash
flows from operating activities:
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Net
income
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$ | 897,855 | $ | 550,729 | ||||
Adjustments
to reconcile net income to
net
cash provided by operating activities:
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Depreciation
and amortization
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348,905 | 400,547 | ||||||
Amortization
of deferred compensation
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9,719 | 5,320 | ||||||
Stock
compensation expense
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145,215 | 40,155 | ||||||
Deferred
income taxes
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343,708 | 180,781 | ||||||
Change
in assets and liabilities:
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Accounts
receivable, net
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3,375,049 | 2,069,039 | ||||||
Inventories
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(1,074,394 | ) | (476,337 | ) | ||||
Prepaid
expenses and other current assets
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(12,406 | ) | (211,000 | ) | ||||
Other
assets
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208,725 | (4,603 | ) | |||||
Accounts
payable
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(559,952 | ) | 348,013 | |||||
Accrued
compensation and employee benefits
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(672,693 | ) | (952,295 | ) | ||||
Accrued
expenses
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(136,358 | ) | (184,453 | ) | ||||
Unearned
revenue
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(195,800 | ) | (82,454 | ) | ||||
Income
taxes payable
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(110,745 | ) | 100,111 | |||||
Other
liabilities
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(7,864 | ) | 51,389 | |||||
Net
cash provided by operating activities
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2,558,964 | 1,834,942 | ||||||
Cash
flows from investing activities:
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Capital
expenditures
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(244,892 | ) | (276,181 | ) | ||||
Net
decrease in marketable securities
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56,421 | 4,412 | ||||||
Net
cash used in investing activities
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(188,471 | ) | (271,769 | ) | ||||
Cash
flows from financing activities:
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Repurchases
of common stock
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(837,559 | ) | - | |||||
Proceeds
from exercise of stock options
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59,010 | 59,268 | ||||||
Repayments
of debt
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- | (1,740,335 | ) | |||||
Net
cash used in financing activities
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(778,549 | ) | (1,681,067 | ) | ||||
Effect
of exchange rate changes on cash
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127,390 | 66,771 | ||||||
Net
increase (decrease) in cash
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1,719,334 | (51,123 | ) | |||||
Cash
at beginning of year
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9,560,966 | 8,808,110 | ||||||
Cash
at end of period
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$ | 11,280,300 | $ | 8,756,987 |
Three
Months
Ended March 31,
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Six
Months
Ended March 31,
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2009
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2008
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2009
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2008
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Basic EPS Computation
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Net
income
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$ | 389,869 | $ | 205,818 | $ | 897,855 | $ | 550,729 | ||||||||
Weighted
average
shares
outstanding
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4,619,220 | 4,810,191 | 4,648,211 | 4,805,964 | ||||||||||||
Basic
earnings
per
share
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$ | .08 | $ | .04 | $ | .19 | $ | .11 |
Three
Months
Ended March 31,
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Six
Months
Ended March 31,
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2009
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2008
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2009
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2008
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Diluted EPS Computation
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Net
income
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$ | 389,869 | $ | 205,818 | $ | 897,855 | $ | 550,729 | ||||||||
Weighted
average
shares
outstanding
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4,619,220 | 4,810,191 | 4,648,211 | 4,805,964 | ||||||||||||
Stock
options
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77,642 | 163,984 | 74,084 | 200,401 | ||||||||||||
Stock
compensation
arrangements
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23,809 | 24,085 | 23,055 | 25,415 | ||||||||||||
Diluted
shares outstanding
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4,720,671 | 4,998,260 | 4,745,350 | 5,031,780 | ||||||||||||
Diluted
earnings
per
share
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$ | .08 | $ | .04 | $ | .19 | $ | .11 |
Three
Months
Ended March 31,
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Six
Months
Ended March 31,
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2009
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2008
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2009
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2008
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Net
income
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$ | 389,869 | $ | 205,818 | $ | 897,855 | $ | 550,729 | ||||||||
Other
comprehensive income
(loss),
net of tax:
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Unrealized
gain
on
securities
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445 | 1,964 | 2,988 | 4,311 | ||||||||||||
Unrealized
gain (loss)
on
derivatives
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(140,966 | ) | (19,307 | ) | (121,492 | ) | 38,106 | |||||||||
Foreign
currency
translation
adjustment
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(131,595 | ) | 110,564 | (1,410,785 | ) | (124,742 | ) | |||||||||
Comprehensive
income (loss)
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$ | 117,753 | $ | 299,039 | $ | (631,434 | ) | $ | 468,404 |
March
31,
2009
|
September
30,
2008
|
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Foreign
currency translation adjustment
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$ | (745,929 | ) | $ | 664,856 | |||
Unrealized
gain (loss) on derivatives, net of tax
|
(62,044 | ) | 59,448 | |||||
Unrealized
gain (loss) on securities, net of tax
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2,834 | (154 | ) | |||||
Accumulated
other comprehensive income (loss)
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$ | (805,139 | ) | $ | 724,150 | |||
Payments
Due
By
Period
|
Debt
Repayments
|
Lease
Commitments
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Total
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|||||||||
Less
than 1 year
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$ | - | $ | 535,000 | $ | 535,000 | ||||||
1-3
years
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- | 371,000 | 371,000 | |||||||||
3-5
years
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- | - | - | |||||||||
Total
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$ | - | $ | 906,000 | $ | 906,000 |
Period
|
Total
Number
of
Shares
Purchased
|
Average
Price
Paid
per Share
|
Approximate
Dollar Value
of
Shares that May Yet Be
Purchased Under the
Programs
|
|||||||||
01/01/09-01/31/09
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37,424 | $ | 5.41 | $ | 1,084,514 | |||||||
02/01/09-02/28/09
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7,000 | $ | 5.62 | $ | 1,045,168 | |||||||
03/01/09-03/31/09
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11,449 | $ | 5.00 | $ | 987,950 | |||||||
Total
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55,873 | $ | 5.35 | |||||||||
/s/ Kenneth M. Darby
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/s/ John M. Badke
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Kenneth
M. Darby
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John
M. Badke
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Chairman
and
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Senior
Vice President, Finance and
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Chief
Executive Officer
|
Chief
Financial Officer
|