Net revenue for the three months ended December 31, 2009 was $117.4 million, up 16.0% compared to $101.2 million in the third quarter of 2009, primarily due to higher product shipments in Northern and Southern European markets. Fourth quarter 2009 net revenue declined 2.6% compared to net revenue of $120.5 million in the fourth quarter of 2008. This decrease is due to lower revenue primarily from the Americas partially offset by increases in revenue from Northern Europe as well as Asia-Pacific.

Gross profit for the three months ended December 31, 2009 increased to $36.8 million or 31.3% of net revenue from $33.2 million or 32.8% of net revenue in the third quarter of 2009 and $32.2 million or 26.7% of net revenue in the fourth quarter of 2008. Fourth quarter gross profit percentage declined sequentially due to higher period costs, geographic sales mix weighted to lower average selling price markets, a one-time high margin third quarter extended warranty sale that did not recur in the fourth quarter of 2009 and certain restructuring costs related to our Brazil and Australian service operations. Gross profit percentage for the three months ended December 31, 2009 included 34.1% product gross profit and 24.7% service gross profit, compared to 35.2% and 28.7% in the third quarter of 2009 and 28.8% and 23.4% in the prior year period.

Non-GAAP gross profit for the three months ended December 31, 2009 was $38.1 million or 32.4% of revenue, compared to $34.0 million or 33.6% of revenue in the third quarter of 2009 and $33.2 million or 27.5% of revenue in the fourth quarter 2008. The non-GAAP gross profit excludes restructuring costs, amortization of purchased intangibles, and stock-based compensation. Non-GAAP gross profit for the three months ended December 31, 2009 included 34.1% product gross profit and 26.6% service gross profit, versus 35.3% and 28.5% in the third quarter 2009 and 28.9% and 23.4% in the prior year period.

Operating expenses for the three months ended December 31, 2009 were $33.8 million or 28.8% of net revenue, compared to $30.5 million or 30.2% of net revenue in the prior quarter and $102.1 million, which included a $67.8 million impairment of goodwill and intangibles, or 84.7% of net revenue for the fourth quarter of 2008. The sequential increase in operating expense was primarily related to the acceleration of specific product development and certification activities and an increase in selling general and administrative expense related to marketing and year-end audit costs. The year-over-year decrease in operating expenses is related to continued synergies from last year's acquisition of Thales e-Transactions along with other recent restructuring activities.

Non-GAAP operating expenses for the three months ended December 31, 2009 were $31.7 million or 27.0% of revenue, compared to $28.0 million or 27.7% of revenue in the prior quarter and $31.4 million or 26.1% of revenue for the same period in 2008.

Operating income for the three months ended December 31, 2009 was $2.9 million, compared to $2.7 million in the third quarter of 2009 and a loss of $69.9 million in the fourth quarter of 2008. Non-GAAP operating income for the three months ended December 31, 2009 was $6.3 million, versus $5.9 million in the prior quarter and $1.8 million in the fourth quarter of 2008.

The loss from discontinued operations of $0.5 million is primarily related to a European leasing and service operation that the Company is marketing for sale. During the fourth quarter of 2009, the Company committed to a plan to divest this European leasing and service operation, and the results of this operation have been excluded from all continuing operating results included in this earnings release.

Net income for the three months ended December 31, 2009 was $0.6 million or $0.01 per fully diluted share, versus $1.2 million or $0.02 per diluted share in the third quarter of 2009 and a loss of $74.8 million or $1.40 per share in the fourth quarter of 2008. Net income for the fourth quarter of 2009 includes a net tax benefit from certain foreign tax matters of $0.7 million, partially offset by a non-cash interest charge of $0.5 million associated with the early retirement of a $3.0 million in debt during the quarter. Non-GAAP net income before discontinued operations for the three months ended December 31, 2009 was $4.6 million or $0.08 per diluted share, compared to $4.0 million or $0.07 per fully diluted share in the prior quarter and a loss of $2.5 million or $0.05 per share for the same period in 2008.

Adjusted EBITDA (Earnings before interest, taxes, depreciation, amortization, stock-based compensation, restructuring charges and goodwill and intangible write-downs) for the three months ended December 31, 2009 was $9.2 million, compared to $8.4 million in the prior quarter and adjusted EBITDA of $4.5 million in the prior year period.

Cash increased from $50.7 million at September 30, 2009 to $55.0 million at December 31, 2009. Cash flow from operating activities for the fourth quarter of 2009 was $13.6 million.

For the full year, net revenue decreased $27.3 million from $434.2 million in 2008 to $406.9 million in 2009. Despite the decrease in year over year revenue, non-GAAP gross profit increased $3.3 million from $129.5 million or 29.8% of revenue in 2008, to $132.8 million or 32.6% of revenue in 2009. Non-GAAP operating income in 2009 increased to $17.1 million from $9.8 million in 2008 and non-GAAP net income before discontinued operations improved from $1.7 million or $0.03 per diluted share in 2008 to $7.9 million or $0.15 per diluted share in 2009. Adjusted EBITDA increased by $7.6 million from $19.7 million in 2008 to $27.3 million in 2009.

"Despite the worst economic recession in some 70 years, we had three consecutive quarters of operating income and net income, generated significant positive cash flow, and strengthened the Company's balance sheet in 2009. On a full year basis we increased both product and service margins and believe that we have implemented ongoing activities for future margin expansion. The global recession was, for us, most pronounced in North America, and we have added additional resources to ramp up that sector," said Philippe Tartavull, Chief Executive Officer and President. "With an expectation of stronger full year demand, a solid set of existing and planned products, and an increased focus on higher margin revenue such as our integrated payment solutions, we are proceeding into 2010 with confidence."