"While broadband service providers continue to evaluate the uncertainty associated with governmental regulation and economic factors that significantly affected last year's second quarter revenues and continued throughout the 2012 calendar year, there has been some increase in clarity. We see the investment in capital equipment relating to fiber-to-the-home and fiber-to-the-antenna beginning to strengthen.""Revenues and gross profits were positively affected by a higher percentage of product sales associated with optical component technologies. Our FiberDeep fiber termination process, which enables us to deliver terminated fiber products, such as optical components, with a performance guarantee twice that of the industry standard, is a crucial differentiator of these technologies. In addition, the significant increase in volumes over the previous fiscal year allows the company to better absorb the overhead costs associated with our manufacturing processes." "The majority of operating expense increases were the results of variable costs associated with compensation initiatives designed to drive our performance. Approximately $400,000 of our $694,000 operating expense increase was additional sales commissions and accrued incentive costs. In addition, in comparison to the same period last year, the company incurred an increase of approximately $100,000 in non-cash expense associated with previously issued equity grants." "As a result of significant project business awarded during the quarter, bookings for the second quarter of 2013 surpassed revenue by $2.9 million, with the company posting a record backlog of $4.6 million. The Company previously announced that we have entered into a lease agreement that increases manufacturing and warehouse space in our facility by 30%. The Company continues to make controlled investments in inventory to ensure we can continue to provide the quick-turn lead-time our customers demand and deserve. " "While our balance sheet remains strong with no debt and nearly $20 million in cash, cash equivalents and investments, the Company made investments during the quarter in capital equipment associated with the manufacture of new product offerings and cost reduction initiatives."