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<div style="width: 7.5in; font-family: 'Times New Roman',Times,serif; margin-left: 0.25in;">
<div style="margin-top: 10pt; font-size: 10pt;" align="justify"><b>(6) Accrued and Other Liabilities</b> </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">Accrued liabilities at September 30, 2011 and December 31, 2010 were as follows: </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="72%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b><i>(in thousands)</i></b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2011</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Compensation and benefits</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">6,134</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">6,786</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Vendor accruals</div></td>
<td> </td>
<td> </td>
<td align="right">2,262</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,259</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Accrued professional fees</div></td>
<td> </td>
<td> </td>
<td align="right">356</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">451</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Accrued taxes</div></td>
<td> </td>
<td> </td>
<td align="right">3,607</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,102</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Royalties payable</div></td>
<td> </td>
<td> </td>
<td align="right">260</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">439</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Accrued interest</div></td>
<td> </td>
<td> </td>
<td align="right">45</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">48</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Non-contractual obligation to repurchase</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">27</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Contractual obligation due to acquisitions</div></td>
<td> </td>
<td> </td>
<td align="right">6,197</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,356</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Accrued other</div></td>
<td> </td>
<td> </td>
<td align="right">704</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">501</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">19,565</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">17,969</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<p style="font-size: 10pt;" align="center"> </p>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">Other liabilities at September 30, 2011 and December 31, 2010 were as follows: </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="72%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b><i>(in thousands)</i></b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2011</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Defined benefit pension obligation</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">3,386</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3,394</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Long-term tax liability</div></td>
<td> </td>
<td> </td>
<td align="right">804</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">756</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Earnouts related to acquisitions</div></td>
<td> </td>
<td> </td>
<td align="right">2,681</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,660</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Deferred tax liability</div></td>
<td> </td>
<td> </td>
<td align="right">3,189</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,134</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Other long-term liabilities</div></td>
<td> </td>
<td> </td>
<td align="right">173</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">17</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Total</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">10,233</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">9,961</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td></tr></table></div></div>
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<div style="width: 7.5in; font-family: 'Times New Roman',Times,serif; margin-left: 0.25in;">
<div style="margin-top: 10pt; font-size: 10pt;" align="justify"><b>(2) Acquisitions</b> </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">In addition to the acquisitions previously disclosed, the Company completed acquisitions in the third quarter of 2011, which are discussed below. </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">On July 19, 2011, the Company acquired the assets of Alibre Inc. ("Alibre"), a provider of design productivity solutions. Alibre's operations have been integrated into the Company and future revenue will be included in printers and other products and services revenue. The fair value of the consideration paid for this acquisition was $3,800, all of which was paid in cash and was allocated to the assets purchased and liabilities assumed based on the estimated fair values at the date of acquisition, and is included in the table below which summarizes third quarter 2011 acquisitions. </div></div>
<div style="width: 7.5in; font-family: 'Times New Roman',Times,serif; margin-left: 0.25in;">
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">On August 9, 2011, the Company acquired certain assets of Content Media, Inc. related to the Botmill printer ("Botmill"). Botmill is a manufacturer of desktop 3D printers, kits, materials and accessories. Botmill's operations have been integrated into the Company and future revenue will be included in printers and other products revenue. The fair value of the consideration paid for this acquisition was $17, all of which was paid in cash, and was allocated to the assets purchased based on the estimated fair values at the date of acquisition, and is included in the table below which summarizes third quarter 2011 acquisitions. </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">Subject to the terms and conditions of the acquisition agreement, the sellers have the right to earn an additional amount up to a maximum of $1,000, pursuant to an earn-out formula set forth in the acquisition agreement, for a period of three years, which commenced on September 1, 2011. As of September 30, 2011, no accrued liability was recorded for the earnout. The Company will re-evaluate the earnout in future periods to determine if a liability is to be accrued. </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">On September 20, 2011, the Company acquired the shares of Formero Pty, Ltd. and its wholly-owned subsidiary XYZ Innovation ("Formero"). Formero, based in Australia, with an office in China, is a provider of on-demand custom parts services and a distributor of 3D printers. Formero's operations have been integrated into the Company and included in services revenue and printers and other products revenue. The fair value of the consideration paid for this acquisition, net of cash acquired, was $5,838, all of which was paid in cash and was allocated to the assets purchased and liabilities assumed based on the estimated fair values at the date of acquisition, and is included in the table below which summarizes third quarter 2011 acquisitions. </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">Subject to the terms and conditions of the acquisition agreement, the sellers have the right to earn an additional amount of up to a maximum of approximately $2,012, based on the exchange rate at the date of acquisition, pursuant to an earn-out formula set forth in the acquisition agreement, for a period of three years, which commenced on October 1, 2011. As of September 30, 2011, an accrued liability of approximately $1,862, based on the exchange rate at the date of acquisition, was recorded for the earnout. The earnout was determined to be acquisition consideration and therefore is reflected as part of goodwill. </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">The amounts related to the acquisitions of these businesses were allocated to the assets acquired and the liabilities assumed and included in the Company's condensed consolidated balance sheet at September 30, 2011 as follows: </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="86%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b><i>(in thousands)</i></b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2011</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Fixed assets</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,100</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Intangible assets</div></td>
<td> </td>
<td> </td>
<td align="right">11,144</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other assets, net of cash acquired and liabilities assumed</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,589</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Net assets acquired</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">9,655</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">These acquisitions were not significant, either individually or in aggregate; therefore, no pro-forma financial information is provided for these acquisitions. </div>
<div style="margin-top: 10pt; font-size: 10pt;" align="justify"><i>Subsequent acquisition</i> </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">On October 4, 2011, the Company acquired the shares of Kemo Modelmakerij B.V. ("Kemo"). Kemo, based in The Netherlands, is a provider of on-demand custom parts services. The Company is in the process of integrating Kemo. The fair value of the consideration paid for this acquisition, net of cash acquired, was approximately $4,006, based on the exchange rate at the date of acquisition, all of which was paid in cash, and will be allocated to the assets purchased and liabilities assumed based on the estimated fair values at the date of acquisition. Due to the timing of this acquisition, at the time of this filing the Company is in the process of allocating the fair values of the assets purchased, liabilities assumed, and other intangibles identified as of the acquisition date, with any excess to be recorded as goodwill. Future revenue from this acquisition will be reported in services revenue. The Kemo acquisition is not significant to the Company's consolidated financial statements. </div></div>
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<div style="width: 7.5in; font-family: 'Times New Roman',Times,serif; margin-left: 0.25in;">
<div style="margin-top: 10pt; font-size: 10pt;" align="justify"><b>(14) Commitments and Contingencies</b> </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">The Company leases office space and certain furniture and fixtures under various non-cancelable operating leases. Rent expense under operating leases was $652 and $1,921 for the quarter and nine months ended September 30, 2011, respectively, compared to $203 and $584 for the quarter and nine months ended September 30, 2010, respectively. </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">As of September 30, 2011, the Company has supply commitments with third party assemblers for printer assemblies for 2011 that total $9,146. </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">For certain of our recent acquisitions, the Company is obligated for the payment of deferred purchase price totaling $3,720, based upon the exchange rate at the date of acquisition, all of which is due in 2011. As of September 2010, the Company had obligations for the payment of deferred purchase price for certain acquisitions totaling $315. Certain of these acquisitions also contain earnout provisions under which the sellers of the acquired businesses can earn additional amounts. The total liabilities recorded for these earnouts as of September 30, 2011 was $5,158 and is included in other liabilities. As of September 30, 2010, the Company had no liabilities recorded for earnouts related to acquisitions. See Note 2 for details of acquisitions and related commitments. </div>
<div style="margin-top: 10pt; font-size: 10pt;" align="justify"><i>Litigation</i> </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">On March 14, 2008, DSM Desotech Inc. filed a complaint, in an action titled <i>DSM Desotech Inc. v. 3D Systems Corporation and 3D Systems, Inc. </i>in the United States District Court for the Northern District of Illinois (Eastern Division), asserting that the Company engaged in anticompetitive behavior with respect to resins used in certain stereolithography machines. The complaint further asserted that the Company is infringing on two of DSM Desotech's patents relating to stereolithography machines. DSM Desotech subsequently filed two amendments to its complaint in which it reasserted its original causes of action or asserted additional causes of action. The Company filed answers to DSM Desotech's complaints in which, among other things, it denied the material allegations of the complaints. On July 20, 2010, the Court issued a decision relating to the construction of the claims of the patents-in-suit following the Markman hearing held on September 16, 2009. In that decision, the Court generally adopted the claim constructions proposed by the Company. </div>
<p style="text-indent: 32px; font-size: 10pt;" align="center"> </p>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">Fact discovery regarding the claims pending in this case concluded January 31, 2011, and this case remains in the pre-trial stage. </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">The Company understands that DSM Desotech estimates the damages associated with its claims to be in excess of $40,000. The Company intends to continue vigorously contesting all the claims asserted by DSM Desotech. </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">The Company has been pursuing patent infringement litigation against EnvisionTec, Inc. and certain of its related companies since 2005. In this litigation, the Company asserted that EnvisionTec infringed the Company's patents covering various three-dimensional solid imaging products and methods for creating physical three-dimensional models of an object and has sought injunctive relief and damages. EnvisionTec's Perfactory machine and Vanquish machine (the Vanquish is now marketed as the PerfactoryXede and PerfactoryXtreme) are the two products accused of patent infringement. </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">A jury trial was held in September 2010. Following that trial, the jury issued a verdict to the effect that EnvisionTec's Vanquish machines infringe one of the Company's patents, and the Court entered judgment on that verdict on October 7, 2010. On March 10, 2011, the Court issued a second amended judgment to the effect that EnvisionTec's Perfactory and Vanquish machines infringe one patent and its Vanquish machines infringe a second patent. </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">On April 7, 2011, EnvisionTec filed a Notice of Appeal with the United States Court of Appeals for the Federal Circuit, which granted the Company's motion to dismiss that appeal on August 17, 2011. On October 6, 2011, the Court entered a third amended judgment declaring that the judgment of infringement referred to above is a final judgment. On October 13, 2011, the Court denied Envisiontec's motion to stay damages discovery, and damages discovery is underway. The Company intends to pursue claims for damages against EnvisionTec. </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">On July 14, 2010, MSK K.K., a Japanese company, filed a complaint against the Company's Japanese subsidiary in the Tokyo District Court asserting, among other things, that the Company's subsidiary failed to satisfy certain alleged performance guarantees associated with the use of certain materials in two printers purchased from the Company in 2007. </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">The plaintiff is seeking damages in excess of $1,600. The Company intends to continue to vigorously contest the claims asserted by MSK K.K. </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">The Company is also involved in various other legal matters incidental to its business. The Company's management believes, after consulting with counsel, that the disposition of these other matters will not have a material effect on the Company's consolidated results of operations or consolidated financial position. </div></div>
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<div style="width: 7.5in; font-family: 'Times New Roman',Times,serif; margin-left: 0.25in;">
<div style="margin-top: 10pt; font-size: 10pt;" align="justify"><b>(7) Hedging Activities and Financial Instruments</b> </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">The Company conducts business in various countries using both the functional currencies of those countries and other currencies to effect cross border transactions. As a result, the Company is subject to the risk that fluctuations in foreign exchange rates between the dates that those transactions are entered into and their respective settlement dates will result in a foreign exchange gain or loss. When practicable, the Company endeavors to match assets and liabilities in the same currency on its balance sheet and those of its subsidiaries in order to reduce these risks. When appropriate, the Company enters into foreign currency contracts to hedge exposures arising from those transactions. The Company has elected not to prepare and maintain the documentation to qualify for hedge accounting treatment under ASC 815, "Derivatives and Hedging," therefore, all gains and losses (realized or unrealized) are recognized in "Interest and other expense (income), net" in the condensed consolidated statements of operations and comprehensive income. Depending on their fair value at the end of the reporting period, derivatives are recorded either in prepaid expenses and other current assets or in accrued and other liabilities on the condensed consolidated balance sheet. </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">There were no foreign currency contracts outstanding at September 30, 2011 or December 31, 2010. </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">The total foreign currency impact on the condensed consolidated statements of operations and comprehensive income for the quarter and nine months ended September 30, 2011 was a loss of $575 and a gain of $36, respectively, compared to gains of $681 and $140, respectively, for the quarter and nine months ended September 30, 2010. </div></div>
<div style="width: 7.5in; font-family: 'Times New Roman',Times,serif; margin-left: 0.25in;">
<div style="margin-top: 10pt; font-size: 10pt;" align="justify"><b>(8) Share-based Compensation Plans</b> </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">The Company records share-based compensation expense in selling, general and administrative expenses in the condensed consolidated statements of operations and comprehensive income. The 2010 data below has been adjusted to reflect the two-for-one stock split, in the nature of a stock dividend, that the Company completed during the second quarter of 2011. </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">Share-based compensation expense for the quarter and nine months ended September 30, 2011 and 2010 was as follows: </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="6" nowrap="nowrap" align="center"><b>Quarter Ended September 30,</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="6" nowrap="nowrap" align="center"><b>Nine months Ended September 30,</b></td>
<td> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b><i>(in thousands)</i></b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2011</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2011</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Restricted stock awards </div></td>
<td> </td>
<td align="left">$</td>
<td align="right">593</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">268</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,827</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,057</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">The number of shares of restricted common stock awarded and the weighted average fair value per share during the quarter and nine months ended September 30, 2011 and 2010 were as follows: </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="14" nowrap="nowrap" align="center"><b>Quarter Ended September 30,</b></td>
<td> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="6" nowrap="nowrap" align="center"><b>2011</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="6" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Weighted Average</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Weighted Average</b></td>
<td> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b><i>(in thousands, except per share amounts)</i></b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Shares Awarded</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Fair Value</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Shares Awarded</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Fair Value</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Restricted stock awards:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Granted under the 2004 Incentive Stock Plan</div></td>
<td> </td>
<td> </td>
<td align="right">46</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">22.65</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">40</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">6.58</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Granted under the 2004 Restricted Stock Plan for Non-Employee Directors</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total restricted stock awards</div></td>
<td> </td>
<td> </td>
<td align="right">46</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">22.65</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">40</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">6.58</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr></table></div>
<p style="font-size: 10pt;" align="center"> </p>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="14" nowrap="nowrap" align="center"><b>Nine months Ended September 30,</b></td>
<td> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="6" nowrap="nowrap" align="center"><b>2011</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="6" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Weighted Average</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Weighted Average</b></td>
<td> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b><i>(in thousands, except per share amounts)</i></b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Shares Awarded</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Fair Value</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Shares Awarded</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Fair Value</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Restricted stock awards:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Granted under the 2004 Incentive Stock Plan</div></td>
<td> </td>
<td> </td>
<td align="right">198</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">20.49</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">144</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">6.85</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Granted under the 2004 Restricted Stock Plan for Non-Employee Directors</div></td>
<td> </td>
<td> </td>
<td align="right">16</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">18.23</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">36</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7.15</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total restricted stock awards</div></td>
<td> </td>
<td> </td>
<td align="right">214</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">20.32</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">180</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">6.91</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr></table></div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">In the nine months ended September 30, 2011, the Company granted restricted stock awards covering 198 shares of common stock pursuant to the Company's 2004 Incentive Stock Plan. Of the 198 shares granted in the nine months ended September 30, 2011, 10 shares were awarded to executive officers of the Company. Additionally, of the 46 shares granted in the third quarter of 2011, 15 remained subject to acceptance at September 30, 2011. In the first nine months of 2010, the Company granted restricted stock awards covering 144 shares of common stock pursuant to the Company's 2004 Incentive Stock Plan, none of which were awarded to executive officers of the Company. </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">In the third quarters of 2011 and 2010, the Company did not issue any shares of common stock pursuant to the Company's 2004 Restricted Stock Plan for Non-Employee Directors. Stock compensation expense for directors totaled $0 and $300 for the quarter and nine months ended September 30, 2011, compared to $0 and $257 for the quarter and nine months ended September 30, 2010. </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">Effective April 1, 2011, the Board of Directors amended the 2004 Restricted Stock Plan for Non-Employee Directors to limit the value of any award of shares made to an eligible director to $50, valued on the date of the award. </div></div>
-26000
26000
0.22
0.12
0.55
0.14
0.22
0.11
0.54
0.14
<div style="width: 7.5in; font-family: 'Times New Roman',Times,serif; margin-left: 0.25in;">
<div style="margin-top: 10pt; font-size: 10pt;" align="justify"><b>(10) Earnings Per Share</b> </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">The Company presents basic and diluted earnings per share ("EPS") amounts. Basic EPS is calculated by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the applicable period. Diluted EPS is calculated by dividing net income by the weighted average number of common and common equivalent shares outstanding during the applicable period. </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">The following table reconciles basic weighted average outstanding shares to diluted weighted average outstanding shares for the quarter and nine months ended September 30, 2011 and 2010: </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="6" nowrap="nowrap" align="center"><b>Quarter Ended September 30,</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="6" nowrap="nowrap" align="center"><b>Nine months Ended September 30,</b></td>
<td> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b><i>(in thousands, except per share amounts)</i></b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2011</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2011</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Numerator:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Net income — numerator for basic net earnings per share</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">7,220</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">5,368</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">27,415</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">10,123</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Add: Effect of dilutive securities</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Stock options and other equity compensation</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Numerator for dilutive earnings per share</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">7,220</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">5,368</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">27,415</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">10,123</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr><td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Denominator:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Weighted average shares — denominator for basic net earnings per share</div></td>
<td> </td>
<td> </td>
<td align="right">50,450</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">46,294</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">49,455</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">46,020</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Add: Effect of dilutive securities</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Stock options and other equity compensation</div></td>
<td> </td>
<td> </td>
<td align="right">952</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">588</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,020</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">584</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Denominator for dilutive earnings per share</div></td>
<td> </td>
<td> </td>
<td align="right">51,402</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">46,882</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">50,475</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">46,604</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Earnings per share</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Basic</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">0.14</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.12</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.55</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.22</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Diluted</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">0.14</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.11</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.54</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.22</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Unexercised employee stock options excluded from diluted earnings per share <sup style="font-size: 85%; vertical-align: text-top;">(1)</sup></div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">280</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">266</td>
<td> </td></tr></table></div>
<div align="left">
<div style="margin-top: 10pt; width: 18%; font-size: 3pt; border-top: #000000 1px solid;"> </div></div>
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="font-size: 6pt;"><td width="3%"> </td>
<td width="1%"> </td>
<td width="96%"> </td></tr>
<tr valign="top"><td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top;">(1)</sup></td>
<td> </td>
<td>
<div style="text-align: justify;">The average outstanding diluted shares calculation excludes options with an exercise price that exceeds the average market price of shares during the period, since the effect of their inclusion would have been anti-dilutive resulting in an increase to the net earnings per share. <sup style="font-size: 85%; vertical-align: text-top;"> </sup></div></td></tr></table></div>
665000
-156000
<div style="width: 7.5in; font-family: 'Times New Roman',Times,serif; margin-left: 0.25in;">
<div style="margin-top: 10pt; font-size: 10pt;" align="justify"><b>(11) Fair Value Measurements</b> </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">ASC 820, "Fair Value Measurements and Disclosures," defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs that may be used to measure fair value: </div>
<div style="margin-top: 10pt; text-indent: 32px; margin-left: 4%; font-size: 10pt;" align="justify"><i>Level 1 </i>— Quoted prices in active markets for identical assets or liabilities; </div>
<div style="margin-top: 10pt; text-indent: 32px; margin-left: 4%; font-size: 10pt;" align="justify"><i>Level 2 </i>— Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or </div>
<div style="margin-top: 10pt; text-indent: 32px; margin-left: 4%; font-size: 10pt;" align="justify"><i>Level 3 </i>— Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">For the Company, the above standard applies to cash equivalents and foreign exchange contracts. The Company utilizes the market approach to measure fair value for its financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">Assets and liabilities measured at fair value on a recurring basis are summarized below: </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="14" nowrap="nowrap" align="center"><b>Fair Value Measurements as of September 30, 2011</b></td>
<td> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b><i>(in thousands)</i></b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Level 1</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Level 2</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Level 3</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Total</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cash equivalents <sup style="font-size: 85%; vertical-align: text-top;">(1)</sup></div></td>
<td> </td>
<td align="left">$</td>
<td align="right">37,692</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">37,692</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div align="left">
<div style="margin-top: 10pt; width: 18%; font-size: 3pt; border-top: #000000 1px solid;"> </div></div>
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="font-size: 6pt;"><td width="3%"> </td>
<td width="1%"> </td>
<td width="96%"> </td></tr>
<tr valign="top"><td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top;">(1)</sup></td>
<td> </td>
<td>
<div style="text-align: justify;">Cash equivalents include funds held in money market instruments and are reported at their current carrying value, which approximates fair value due to the short-term nature of these instruments and are included in cash and cash equivalents in the consolidated balance sheet.</div></td></tr></table>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">The Company did not have any transfers of assets and liabilities between Level 1 and Level 2 of the fair value measurement hierarchy during the quarter or nine months ended September 30, 2011. </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">In addition to the financial assets included in the above table, certain of our non-financial assets and liabilities are to be initially measured at fair value on a non-recurring basis. This includes items such as non-financial assets and liabilities initially measured at fair value in a business combination (but not measured at fair value in subsequent periods) and non-financial, long-lived assets measured at fair value for an impairment assessment. In general, non-financial assets and liabilities including goodwill, other intangible assets and property and equipment are measured at fair value when there is an indication of impairment and are recorded at fair value only when impairment is recognized. The Company has not recorded any impairments related to such assets and has had no other significant non-financial assets or non-financial liabilities requiring adjustments or write-downs to fair value as of September 30, 2011 or December 31, 2010. </div></div>
-49000
-82000
58978000
82076000
49105000
18828000
76164000
27763000
10890000
5652000
23738000
8137000
<div style="width: 7.5in; font-family: 'Times New Roman',Times,serif; margin-left: 0.25in;">
<div style="margin-top: 10pt; font-size: 10pt;" align="justify"><b>(12) Income Taxes</b> </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">The Company's effective tax rates were 11.3% and (15.5)% for the quarter and nine months ended September 30, 2011, respectively, compared to 5.0% and 7.0% for the quarter and nine months ended September 30, 2010, respectively. </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">In conjunction with the Company's ongoing review of its actual results and anticipated future earnings, the Company assesses the possibility of releasing the valuation allowance remaining on its U.S. net deferred tax assets. During the second quarter of 2011, based upon recent results of operations and expected profitability in the future, the Company concluded that is more likely than not that a portion of the U.S. net deferred tax assets will be realized. As a result, in accordance with ASC 740, the Company reversed $17,000 of the valuation allowance applied to U.S. net deferred tax assets. The reversal of the valuation allowance resulted in a non-cash income tax benefit of $6,221. There were no releases during the quarter ended September 30, 2011. As of September 30, 2011, the Company has a valuation allowance remaining on its U.S. net deferred tax assets of $17,098. </div>
<p style="text-indent: 32px; font-size: 10pt;" align="center"> </p>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">Tax years 2007 to 2010 remain subject to examination by the U.S. Internal Revenue Service. The Company has utilized a portion of its U.S. loss carryforwards covering the years 1997 through 2003. Should the Company utilize any of its remaining losses, which date back to 2003, these would be subject to examination. The Company files income tax returns (which are open to examination beginning in the year shown in parentheses) in France (2005), Germany (2006), Japan (2005), Italy (2005), Switzerland (2005) and the United Kingdom (2007). </div></div>
274000
994000
767000
284000
-3677000
917000
155000
2568000
-1308000
-4777000
1892000
37000
1973000
608000
317000
-1106000
2160000
5000000
-315000
940000
-920000
293000
<div style="width: 7.5in; font-family: 'Times New Roman',Times,serif; margin-left: 0.25in;">
<div style="margin-top: 10pt; font-size: 10pt;" align="justify"><b>(5) Intangible Assets</b> </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">Intangible assets other than goodwill at September 30, 2011 and December 31, 2010 were as follows: </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="28%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="7%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="7%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="7%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="7%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="7%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="7%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="10" nowrap="nowrap" align="center"><b>2011</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="10" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Accumulated</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Accumulated</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"> </td>
<td> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b><i>(in thousands)</i></b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Cost</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Amortization</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Net</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Cost</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Amortization</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Net</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Licenses</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">5,875</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(5,875</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">5,875</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(5,875</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Patent costs</div></td>
<td> </td>
<td> </td>
<td align="right">16,311</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(13,806</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">2,505</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">16,296</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(13,632</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">2,664</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Acquired technology</div></td>
<td> </td>
<td> </td>
<td align="right">11,064</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(10,367</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">697</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11,064</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(10,304</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">760</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Internally developed software</div></td>
<td> </td>
<td> </td>
<td align="right">17,847</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(9,588</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">8,259</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,984</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(8,936</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">1,048</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Customer relationships</div></td>
<td> </td>
<td> </td>
<td align="right">17,115</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,110</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">16,005</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10,253</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(300</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">9,953</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Non-compete agreements</div></td>
<td> </td>
<td> </td>
<td align="right">8,552</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,575</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">6,977</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,875</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(840</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">3,035</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Trade names</div></td>
<td> </td>
<td> </td>
<td align="right">4,657</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(137</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">4,520</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">883</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(68</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">815</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other</div></td>
<td> </td>
<td> </td>
<td align="right">1,923</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,228</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">695</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">974</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(974</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">83,344</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(43,686</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">39,658</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">59,204</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(40,929</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">18,275</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">For the nine months ended September 30, 2011 and 2010, the Company capitalized $305 and $243, respectively, of costs incurred to acquire, develop and extend patents in the United States and various other countries. </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">Amortization expense for intangible assets for the quarter and nine months ended September 30, 2011 was $855 and $2,806, respectively, compared to $282 and $844 for the quarter and nine months ended September 30, 2010. </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">Annual amortization expense for intangible assets for 2011, 2012, 2013, 2014 and 2015 is expected to be $4,002; $4,643; $4,622; $4,604 and $4,445, respectively. </div></div>
18275000
39658000
442000
418000
<div style="width: 7.5in; font-family: 'Times New Roman',Times,serif; margin-left: 0.25in;">
<div style="margin-top: 10pt; font-size: 10pt;" align="justify"><b>(3) Inventories</b> </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">Components of inventories, net at September 30, 2011 and December 31, 2010 were as follows: </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="72%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b><i>(in thousands)</i></b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2011</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Raw materials</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">7,848</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">6,742</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Work in process</div></td>
<td> </td>
<td> </td>
<td align="right">631</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">195</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Finished goods and parts</div></td>
<td> </td>
<td> </td>
<td align="right">21,527</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">19,079</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Total</div></td>
<td> </td>
<td> </td>
<td align="right">30,006</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">26,016</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Less: Reserves</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,165</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,205</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Inventories, net</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">27,841</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">23,811</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div></div>
23811000
27841000
2205000
2165000
75681000
77367000
208800000
306930000
57665000
59549000
103000
64071000
-10342000
-47430000
18472000
18783000
10123000
5368000
27415000
27415000
7220000
37873000
13668000
51961000
18972000
11232000
5160000
24203000
8791000
<div style="width: 7.5in; font-family: 'Times New Roman',Times,serif; margin-left: 0.25in;">
<div style="margin-top: 10pt; font-size: 10pt;" align="justify"><b>(1) Basis of Presentation</b> </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">The accompanying unaudited condensed consolidated financial statements include the accounts of 3D Systems Corporation and its subsidiaries (collectively, the "Company"). All significant intercompany transactions and balances have been eliminated in consolidation. The unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") and the rules and regulations of the Securities and Exchange Commission ("SEC") applicable to interim reports. Accordingly, they do not include all the information and notes required by GAAP for complete financial statements and should be read in conjunction with the audited financial statements included in the Company's Annual Report on Form 10-K ("Form 10-K") for the year ended December 31, 2010. </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">In the opinion of management, the unaudited condensed consolidated financial statements contain all adjustments, consisting of adjustments of a normal recurring nature, necessary to present fairly the financial position, results of operations and cash flows for the periods presented. The results of operations for the quarter and nine months ended September 30, 2011 are not necessarily indicative of the results to be expected for the full year. </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results may differ from these estimates and assumptions. </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">Certain prior period amounts presented in the accompanying footnotes have been reclassified to conform to current year presentation. </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">The Company's Board of Directors approved a two-for-one stock split, effected in the form of a 100% stock dividend, which was paid on May 18, 2011 to stockholders of record at the close of business on May 9, 2011. The Company's stockholders received one additional share of common stock for each share of common stock owned. This did not change the proportionate interest that a stockholder maintained in the Company. All share and per share amounts set forth in this report, including earnings per share and the weighted average number of shares outstanding for basic and diluted earnings per share, for each respective period have been adjusted to reflect the two-for-one stock split. </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">All amounts presented in the accompanying footnotes are presented in thousands, except for per share information. </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">The Company has evaluated subsequent events from the date of the condensed consolidated balance sheet through the date of the filing of this Form 10-Q. During this period, no material recognizable subsequent events were identified. See Note 2 and Note 15 for a description of subsequent events that are not significant to the Company's consolidated financial statements. </div>
<div style="margin-top: 10pt; font-size: 10pt;" align="justify"><i>Recent Accounting Pronouncements</i> </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">In September 2011, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2011-8 ("ASU 2011-8), "Intangibles — Goodwill and Other (Topic 350)." ASU 2011-8 is intended to simplify the testing of goodwill for impairment by permitting an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in Topic 350. ASU 2011-8 will become effective for fiscal years beginning after December 15, 2011, with early adoption permitted in limited circumstances. The standard will become effective for the Company in January 2012 and the adoption is not expected to have a significant impact on the Company's consolidated financial statements. </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">No other new accounting pronouncements issued or effective during the third quarter of 2011 have had or are expected to have an impact on the Company's consolidated financial statements. </div></div>
17969000
19565000
3738000
3833000
557000
1831000
-250000
-250000
-2873000
10674000
7213000
27165000
4342000
6000
-14000
5000
9961000
10233000
9086000
44830000
243000
305000
1019000
2295000
<div style="width: 7.5in; font-family: 'Times New Roman',Times,serif; margin-left: 0.25in;">
<div style="margin-top: 10pt; font-size: 10pt;" align="justify"><b>(9) International Retirement Plan</b> </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">The following table shows the components of net periodic benefit costs and other amounts recognized in the condensed consolidated statements of operations and comprehensive income for the quarter and nine months ended September 30, 2011 and 2010: </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="6" nowrap="nowrap" align="center"><b>Quarter Ended September 30,</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="6" nowrap="nowrap" align="center"><b>Nine months Ended September 30,</b></td>
<td> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b><i>(in thousands)</i></b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2011</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2011</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Service cost</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">28</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">24</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">85</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">74</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Interest cost</div></td>
<td> </td>
<td> </td>
<td align="right">31</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">95</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">70</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">59</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">46</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">180</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">144</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div></div>
5000000
5000000
0
0
1295000
2434000
62054000
262000
2378000
-189000
6000
<div style="width: 7.5in; font-family: 'Times New Roman',Times,serif; margin-left: 0.25in;">
<div style="width: 7.5in; font-family: 'Times New Roman',Times,serif; margin-left: 0.25in;">
<div style="margin-top: 10pt; font-size: 10pt;" align="justify"><b>(4) Property and Equipment</b> </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">Property and equipment, net at September 30, 2011 and December 31, 2010 were as follows: </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="58%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Useful Life</b></td>
<td> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b><i>(in thousands, except years</i></b><b>)</b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2011</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>(in years)</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Land</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">541</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">152</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">N/A</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Building</div></td>
<td> </td>
<td> </td>
<td align="right">9,204</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,574</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">25</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Machinery and equipment</div></td>
<td> </td>
<td> </td>
<td align="right">34,235</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">30,460</td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">3-7</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Capitalized software — ERP</div></td>
<td> </td>
<td> </td>
<td align="right">3,143</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,143</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Office furniture and equipment</div></td>
<td> </td>
<td> </td>
<td align="right">3,152</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,051</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Leasehold improvements</div></td>
<td> </td>
<td> </td>
<td align="right">5,855</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,504</td>
<td> </td>
<td> </td>
<td colspan="3" align="center">Life of lease</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Rental equipment</div></td>
<td> </td>
<td> </td>
<td align="right">58</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">506</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Construction in progress</div></td>
<td> </td>
<td> </td>
<td align="right">1,893</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">980</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">N/A</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Total property and equipment</div></td>
<td> </td>
<td> </td>
<td align="right">58,081</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">53,370</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Less: Accumulated depreciation and amortization</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(29,377</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(25,701</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total property and equipment, net</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">28,704</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">27,669</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr></table></div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">Depreciation and amortization expense on property and equipment for the quarter and nine months ended September 30, 2011 was $1,547 and $4,596, respectively, compared to $1,644 and $4,511 for the quarter and nine months ended September 30, 2010. </div></div></div>
27669000
28704000
-118000
929000
159000
172000
7979000
2708000
9737000
3872000
11000
214000
-57925000
-30536000
75783000
28742000
95002000
33248000
108273000
41503000
160563000
57538000
32490000
12761000
65561000
24290000
<div style="width: 7.5in; font-family: 'Times New Roman',Times,serif; margin-left: 0.25in;">
<div style="margin-top: 10pt; font-size: 10pt;" align="justify"><b>(15) Subsequent Events</b> </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">On October 4, 2011, the Company acquired Kemo Modelmakerij B.V. ("Kemo"). Future revenue from this acquisition will be reported in services revenue. The Kemo acquisition is not significant to the Company's financial statements. See Note 2. </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">In October, the Company held a Special Meeting of Stockholders of 3D Systems Corporation. At the special meeting stockholders approved an amendment to the Company's Certificate of Incorporation to increase the number of authorized shares of Common Stock from 60,000 shares to 120,000 shares. The newly authorized shares of Common Stock would be issuable for any proper corporate purpose, including future acquisitions, capital-raising or financing transactions involving Common Stock, convertible securities or other equity securities, stock splits, stock dividends and current or future equity compensation plans. These additional shares will provide the Company the flexibility to issue shares for future corporate needs without potential expense or delay incident to obtaining stockholder approval for any particular issuance. </div></div>
<div style="width: 7.5in; font-family: 'Times New Roman',Times,serif; margin-left: 0.25in;">
<div style="margin-top: 10pt; font-size: 10pt;" align="justify"><b>(13) Segment Information</b> </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">The Company operates in one reportable business segment. The Company conducts its business through subsidiaries in the United States, a subsidiary in Switzerland that operates a research and production facility, and sales and services offices, including custom parts services, operated by subsidiaries in Europe (France, Germany, Italy, The Netherlands and the United Kingdom) and in Asia-Pacific (Australia, China and Japan). The Company has historically disclosed summarized financial information for the geographic areas of operations as if they were segments in accordance with ASC 280, "Segment Reporting." </div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">Summarized financial information concerning the Company's geographical operations is shown in the following tables: </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="6" nowrap="nowrap" align="center"><b>Quarter Ended September 30,</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="6" nowrap="nowrap" align="center"><b>Nine months Ended September 30,</b></td>
<td> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b><i>(in thousands)</i></b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2011</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2011</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Revenue from unaffiliated customers:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">United States</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">31,679</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">18,146</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">83,165</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">49,690</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Germany</div></td>
<td> </td>
<td> </td>
<td align="right">8,288</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,773</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">23,330</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">17,091</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Other Europe</div></td>
<td> </td>
<td> </td>
<td align="right">12,061</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11,037</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">33,701</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">25,860</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Asia Pacific</div></td>
<td> </td>
<td> </td>
<td align="right">5,510</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,547</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">20,367</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">15,632</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Total</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">57,538</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">41,503</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">160,563</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">108,273</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">The Company's revenues from unaffiliated customers by type are as follows: </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="6" nowrap="nowrap" align="center"><b>Quarter Ended September 30,</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="6" nowrap="nowrap" align="center"><b>Nine months Ended September 30,</b></td>
<td> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b><i>(in thousands)</i></b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2011</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2011</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Printers and other products</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">14,791</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">14,506</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">44,519</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">33,961</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Print materials</div></td>
<td> </td>
<td> </td>
<td align="right">18,457</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">14,236</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">50,483</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">41,822</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Services</div></td>
<td> </td>
<td> </td>
<td align="right">24,290</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">12,761</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">65,561</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">32,490</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total revenue</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">57,538</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">41,503</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">160,563</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">108,273</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">Intercompany sales are as follows: </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="30%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="18" nowrap="nowrap" align="center"><b>Quarter Ended September 30, 2011</b></td>
<td> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="18" nowrap="nowrap" align="center"><b>Intercompany Sales to</b></td>
<td> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>United</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Other</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Asia</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"> </td>
<td> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b><i>(in thousands)</i></b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>States</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Germany</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Europe</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Pacific</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Total</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">United States</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3,968</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2,270</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">681</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">6,919</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Germany</div></td>
<td> </td>
<td> </td>
<td align="right">8</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,063</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,071</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other Europe</div></td>
<td> </td>
<td> </td>
<td align="right">3,524</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,531</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Asia Pacific</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">3,532</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3,968</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3,340</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">681</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">11,521</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="30%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="18" nowrap="nowrap" align="center"><b>Quarter Ended September 30, 2010</b></td>
<td> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="18" nowrap="nowrap" align="center"><b>Intercompany Sales to</b></td>
<td> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>United</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Other</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Asia</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"> </td>
<td> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b><i>(in thousands)</i></b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>States</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Germany</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Europe</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Pacific</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Total</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">United States</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2,526</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3,917</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">598</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">7,041</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Germany</div></td>
<td> </td>
<td> </td>
<td align="right">29</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">540</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">569</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other Europe</div></td>
<td> </td>
<td> </td>
<td align="right">2,079</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(169</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(26</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,884</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Asia Pacific</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">2,108</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2,357</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">4,431</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">598</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">9,494</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="30%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="18" nowrap="nowrap" align="center"><b>Nine months Ended September 30, 2011</b></td>
<td> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="18" nowrap="nowrap" align="center"><b>Intercompany Sales to</b></td>
<td> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>United</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Other</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Asia</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"> </td>
<td> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b><i>(in thousands)</i></b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>States</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Germany</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Europe</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Pacific</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Total</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">United States</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">11,265</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">6,222</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2,812</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">20,299</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Germany</div></td>
<td> </td>
<td> </td>
<td align="right">118</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,466</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,584</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other Europe</div></td>
<td> </td>
<td> </td>
<td align="right">9,396</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">19</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,416</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Asia Pacific</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">9,514</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">11,266</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">8,707</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2,812</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">32,299</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<p style="font-size: 10pt;" align="center"> </p>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="30%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="18" nowrap="nowrap" align="center"><b>Nine months Ended September 30, 2010</b></td>
<td> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="18" nowrap="nowrap" align="center"><b>Intercompany Sales to</b></td>
<td> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>United</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Other</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Asia</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"> </td>
<td> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b><i>(in thousands)</i></b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>States</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Germany</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Europe</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Pacific</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Total</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">United States</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">9,671</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">8,296</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,982</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">19,949</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Germany</div></td>
<td> </td>
<td> </td>
<td align="right">263</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,777</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,040</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other Europe</div></td>
<td> </td>
<td> </td>
<td align="right">6,243</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">52</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,296</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Asia Pacific</div></td>
<td> </td>
<td> </td>
<td align="right">34</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">34</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">6,540</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">9,723</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">11,074</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,982</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">29,319</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div style="margin-top: 10pt; text-indent: 32px; font-size: 10pt;" align="justify">All revenue between geographic areas is recorded at prices that provide for an allocation of profit between entities. Income from operations and assets for each geographic area are as follows: </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="6" nowrap="nowrap" align="center"><b>Quarter Ended September 30,</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="6" nowrap="nowrap" align="center"><b>Nine months Ended September 30,</b></td>
<td> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b><i>(in thousands)</i></b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2011</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2011</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Income from operations:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">United States</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">5,840</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2,295</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">12,975</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">4,413</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Germany</div></td>
<td> </td>
<td> </td>
<td align="right">158</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">190</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">985</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">691</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Other Europe</div></td>
<td> </td>
<td> </td>
<td align="right">1,247</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">378</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,880</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,280</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Asia Pacific</div></td>
<td> </td>
<td> </td>
<td align="right">1,556</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,101</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,327</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,481</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Subtotal</div></td>
<td> </td>
<td> </td>
<td align="right">8,801</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,964</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">24,167</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10,865</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Inter-segment elimination</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(10</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">196</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">36</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">367</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Total</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">8,791</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">5,160</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">24,203</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">11,232</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="72%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>September 30,</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>December 31,</b></td>
<td> </td></tr>
<tr style="font-size: 10pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b><i>(in thousands)</i></b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2011</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Assets:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">United States</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">197,506</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">113,249</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Germany</div></td>
<td> </td>
<td> </td>
<td align="right">14,624</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">17,231</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Other Europe</div></td>
<td> </td>
<td> </td>
<td align="right">71,814</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">67,790</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Asia Pacific</div></td>
<td> </td>
<td> </td>
<td align="right">22,986</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10,530</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Total</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">306,930</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">208,800</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div></div>
29894000
10960000
42224000
15100000
1057000
1827000
23474000
134000
50842000
324000
133119000
4958000
186252000
23000
-57925000
-189000
229563000
4708000
255555000
51000
-30536000
-215000
110000
1495000
227000
190000
8000
200000
3915000
3042000
3042000
62054000
62052000
2000
202000
228000
-26000
2154000
2154000
268000
324000
189000
215000
Inventory is transferred from inventory to property and equipment at cost when the Company requires additional machines for training, demonstration or short-term rentals.
In general, an asset is transferred from property and equipment, net, into inventory at its net book value when the Company has identified a potential sale for a used machine. The machine is removed from inventory upon recognition of the sale.
Amounts not shown due to rounding.