Balance Sheet

The company had $35.6 million of cash and cash equivalents at July 1, 2011 compared with $35.9 million at December 31, 2010. Capital expenditures, the company’s majority-owned subsidiary’s purchase of its common stock, and dividend payments were offset by borrowing to facilitate liquidity and funding of restructuring actions.

While the company was in compliance with all covenants of its existing credit agreement on July 1, 2011, the agreement did not contemplate the resources necessary to carry out the company’s strategic turnaround plan, nor did it anticipate the soft market demand, particularly in network, and highly uncertain economic climate in 2011. Accordingly, on August 5, 2011, the company finalized an amendment to its credit agreement which will enhance the company’s borrowing flexibility in support of the execution of the strategic turnaround priorities. Under the terms of the amendment, the total credit facility was reduced from $100 million to $70 million – still well within the company’s expected borrowing needs. In connection with increasing leverage covenants and other changes, the interest rate was also increased. The company expects to pay total fees and expenses of $1.2 million in connection with executing the amendment.

Dividend

The company’s board of directors declared a quarterly dividend of $0.025 per common share, payable on October 21, 2011 to shareholders of record on October 7, 2011. The company also announced that it does not expect to pay dividends beyond 2011. The company has concluded that these funds can generate a higher return if used to continue its strategic turnaround plan and fund long-term growth of the company.

Third Quarter 2011 Outlook

“As we look to the third quarter, with the global economy being quite uncertain, we expect traditional seasonal top line growth to be restrained,” said Faison.

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