GAAP gross margin for the second quarter of 2012 was 22.9%, compared to 24.8% for the second quarter of 2011 and 27.7% for the first quarter of 2012. The decline in gross margin relative to the first quarter of 2012 was due to impairing assets associated with winding down the company's UVS business, lower revenues and thus margin to cover fixed supply chain costs and increased costs associated with service inventory.

GAAP operating expenses for the second quarter of 2012 were $15.6 million, as compared to $15.1 million for the second quarter of 2011 and $17.1 million in the first quarter of 2012.  GAAP net loss for the second quarter of 2012 was $5.0 million, or $(0.09) per share, as compared to a net loss of $1.9 million, or $(0.04) per share, for the second quarter of 2011, and net loss of $1.9 million, or $(0.03) per share, for the first quarter of 2012.

Second Quarter 2012 Non-GAAP Financial Detail:

The company recognized non-GAAP net revenue of $47.7 million for the second quarter of 2012, compared to $52.5 million for the second quarter of 2011 and $54.6 million for the first quarter of 2012.

Non-GAAP gross margin was 27.4% for the second quarter of 2012, compared to 26.1% for the second quarter of 2011 and 29.3% for the first quarter of 2012.  Total non-GAAP operating expenses for the second quarter of 2012 were $14.6 million, as compared to $12.0 million for the second quarter of 2011 and $14.2 million for the first quarter of 2012.

Non-GAAP net loss for the second quarter of 2012 was $1.9 million, or $(0.03) per share, as compared to a second quarter 2011 non-GAAP net income of $1.6 million, or $0.03 per share, and first quarter 2012 non-GAAP net income of $1.9 million, or $0.03 per share. Non-GAAP EBITDA for the second quarter of 2012 was negative $0.9 million compared to positive $2.2 million for the second quarter of 2011 and positive $2.3 million for the first quarter of 2012.

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