Revenues for the third fiscal quarter ended September 30, 2009, decreased to $47,746,000, compared to $51,278,000 for the corresponding period a year ago and $50,627,000 for the second quarter of 2009. Gross margin decreased to $20,668,000 for the third quarter of 2009, compared to $21,903,000 for the corresponding period a year ago and $22,598,000 for the second quarter of 2009. Gross margin, as a percentage of revenue, increased to 43.3% for the third quarter of 2009 compared to 42.7% for the third quarter of 2008, but decreased on a sequential basis from 44.6% for the second quarter of 2009. Net income for the third quarter was $1,691,000, or $0.04 per diluted share, compared to net income of $609,000, or $0.01 per diluted share, for the corresponding period a year ago and net income of $1,341,000, or $0.03 per diluted share, for the second quarter of 2009.

Results for the third quarter of 2009 included a payment of $750,000 received from a vendor with which the Company had entered into a release and settlement agreement resolving alleged product performance issues with certain of the vendor's products. The payment was recorded in "Gain from litigation-related and other settlements, net" in the Company's consolidated statement of operations.

Revenues for the nine months ended September 30, 2009, decreased to $148,821,000 from $154,044,000 for the corresponding period a year ago. Net income for the nine month period was $489,000, or $0.01 per diluted share, compared to a net loss of $(94,000) or $(0.00) per diluted share, for the corresponding period a year ago. The operating results were negatively impacted by aggregate pre-tax charges of $4,083,000 for the cost of severance and other employee-related costs in connection with workforce reductions implemented during the nine months ended September 30, 2009, partially offset by the settlement payment discussed above.

The book-to-bill ratio for the third quarter of 2009 was 1.19:1, as compared to 0.79:1 for the second quarter of 2009. Backlog at the end of the third quarter of 2009 was $50,502,000, as compared to $41,515,000 at the end of the second quarter of 2009.