Revenue for the three months ended June 30, 2009 was $106.8 million, up 28% over first quarter 2009 revenue of $83.6 million. All regions reported significant sequential revenue gains. Revenue declined 14% compared to second quarter 2008 revenue of $124.2 million. The year-over-year decrease is primarily related to the impact of the stronger U.S. dollar on foreign denominated revenue in Europe, Brazil and Australia. Using constant foreign currency exchange rates from the prior year, revenue would have declined only 3.4% primarily due to the challenging economic environment.

GAAP gross profit for the three months ended June 30, 2009 was $34.1 million or 31.9% of revenue, versus $24.3 million or 29.1% of revenue in the prior quarter and $33.6 million or 27.0% in the second quarter of 2008. Second quarter consolidated gross margin improved sequentially due to more favorable contract manufacturing pricing and increased sales of higher margin networking, unattended and ISO sales. GAAP gross margin for the three months ended June 30, 2009 included 36.9% product gross margin and 20.1% service gross margin, compared to margins of 32.8% and 23.3% in the first quarter and 30.3% and 20.8% in the prior year period. Non-GAAP gross profit for the three months ended June 30, 2009 was $35.7 million or 33.5% of revenue, compared to $25.1 million or 30.0% in the prior quarter and $36.4 million or 29.3% in the second quarter 2008. The non-GAAP gross profit excludes one-time restructuring costs, amortization of purchased intangibles, and non-cash stock-based compensation. Non-GAAP gross margin for the three months ended June 30, 2009 included 37.1% product gross margin and 22.9% service gross margin, versus 32.9% and 23.3% in first quarter 2009 and 32.2% and 20.8% in the prior year period.

GAAP operating expenses for the three months ended June 30, 2009 were $31.0 million or 29.0% of revenue, compared to $30.8 million or 36.9% in the prior quarter and $41.7 million or 33.5% for the same period in 2008. Non-GAAP operating expenses for the three months ended June 30, 2009 were $28.1 million or 26.3% of revenue, compared to $28.8 million or 34.4% in the prior quarter and $37.2 million or 29.9% for the same period in 2008. Non-GAAP operating expenses exclude the previously mentioned expense items as well as professional fees incurred related to the 2008 acquisition of the Thales e-Transactions business ("TeT"). The year over year decrease in operating expenses were related to continued synergies from last year's acquisition of TeT, cost control activities and the benefit of lower exchange rates in foreign currency translation of foreign denominated expenses.

GAAP operating income for the three months ended June 30, 2009 was $3.1 million versus a loss of $6.5 million in the prior quarter and a loss of $8.1 million in the second quarter of 2008. Non-GAAP operating income for the three months ended June 30, 2009 was $7.7 million versus a loss of $3.7 million in the prior quarter and a loss of $0.7 million in the second quarter of 2008.

GAAP net income for the three months ended June 30, 2009 was $1.3 million or $0.02 per fully diluted share versus a GAAP net loss of $9.9 million or ($0.19) per share in the first quarter of 2009 and a net loss of $10.9 million or ($0.20) per share in the second quarter of 2008. Non-GAAP net income for the three months ended June 30, 2009 was $5.6 million or $0.11 per fully diluted share compared to a loss of $7.1 million or $(0.13) per share in the prior quarter and a loss of $3.6 million or $(0.07) per share for the same period in 2008.

Adjusted EBITDAS (Earnings before interest, taxes, depreciation, amortization, stock-based compensation and restructuring costs) for the three months ended June 30, 2009 increased to $10.0 million compared to a loss of $1.2 million in the prior quarter and adjusted EBITDAS income of $1.9 million in the prior year period. Cash flow from operations for the second quarter was $10.2 million and as a result, cash increased from $31.1 million at March 31, 2009 to $40.5 million at June 30, 2009.

"I am very pleased with the Company's performance this quarter, even more so following a period that was by all accounts the severest economic crisis in modern times," said Philippe Tartavull, Chief Executive Officer and President. "Sequential revenue was up significantly across all regions. We expanded our customer base, improved margins and profitability and strengthened our balance sheet. In addition, the integration of the operations related to our 2008 acquisition of Thales e-Transactions is effectively complete."

"Acceptance of our Optimum product line has been demonstrated by the array of certifications completed this quarter including the recently announced French and German certifications," continued Mr. Tartavull. "We fully expect this momentum to carry forward as the Optimum family gains further traction in new markets and additional certifications. We also continue to see some positive signs in the overall economy; however, we remain cautious on the potential impact on near-term top line revenue growth and profits, and are tightly controlling operating expenses while focusing on high quality and high security solutions for our customers."

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