The Company is extremely disappointed in this quarterly loss, following on 14 consecutive quarters of positive EBITDAS generating $11,000,000. Approximately $150,000 of this loss was occasioned by extraordinary items. Additionally, the Company could have – as in past years – reacted more quickly and decisively to its seasonal slowdown to mitigate the impact on profitability. Changes are in the process of being implemented to avoid a recurrence.

Non-GAAP Net Income before SBC is determined as follows:
  Q3 2012 Q3 2011 YTD 2012 YTD 2011
Net Income (loss) $(376,000)  $245,000 $628,000 $1,339,000
Add back SBC 32,000 27,000 122,000  260,000
Net income before SBC $(344,000)  $272,000 $750,000   $1,599,000
         
Non-GAAP Net Income per share before SBC is determined as follows:
  Q3 2012 Q3 2011  YTD 2012 YTD 2011
Net Income (loss) per share $(0.13)   $0.07 $0.21  $0.39
Add back SBC per share  0.01  0.01  0.04  0.07
Net Income per share before SBC  $(0.12)  $0.08  $0.25  $0.46
         
Pro-forma results for EBITDAS, as defined below, are determined as follows:
   Q3 2012  Q3 2011 YTD 2012  YTD 2011
Net Income (loss) $(376,000) $245,000 $628,000 $1,339,000
         
Add back:        
Interest  4,000  14,000  11,000  64,000
Depreciation and Amortization  177,000  170,000  499,000  506,000
Non-cash stock based compensation 32,000 27,000 122,000 260,000
Non-cash income tax expense  (98,000)  100,000  307,000  620,000
         
Total Add Backs 115,000 311,000 939,000 1,450,000
         
EBITDAS $261,000 $556,000 $1,567,000 $2,789,000
         
EBITDAS per share reconciles to earnings per share as follows:
  Q3 2012 Q3 2011 YTD 2012 YTD 2011
Net Income (loss) per share $(0.13)  $0.07  $0.21  $0.39 
         
Add back:        
Interest 0.00 0.01 0.00 0.02
Depreciation and Amortization 0.06 0.05 0.16 0.14
Non-cash stock based compensation 0.01 0.01 0.04 0.07
Non-cash income tax expense (0.03) 0.03 0.10 0.18
         
EBITDAS per share  $(0.09)  $0.17  $0.51  $0.80
         

Gross profit margin for the quarter was 26.2%, down from 36.9% in the same quarter last year. This quarter's margin was directly impacted by extraordinary items, listing fees and poor promotional performance. In the past several years the Company has maintained gross profit margin in excess of 35%, as presently calculated.

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