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us-gaap:SeriesBPreferredStockMember
2011-06-30
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iso4217:USD
xbrli:shares
iso4217:USD
xbrli:shares
false
--12-31
Q2
2011
2011-06-30
10-Q
0000874396
12082943
Accelerated Filer
LIFETIME BRANDS, INC
286000
-21000
14482000
14416000
19414000
20807000
72795000
58924000
31962000
23375000
-5177000
-4129000
<font style="font-family: Times New Roman;" class="_mt" size="2">
</font>
<div>
<p style="margin-top: 18px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>NOTE J </b>— <b>OTHER </b></font></p>
<p style="margin-top: 6px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Cash Dividends </b></font></p>
<p style="margin-top: 6px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">In March 2011, the Company resumed the declaration of cash dividends on its outstanding shares of common stock. Dividends declared in 2011 are as follows: </font></p>
<p style="margin-top: 0px; margin-bottom: 0px; font-size: 12px;"> </p>
<table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="84%" align="center">
<tr><td> </td>
<td valign="bottom" width="23%"> </td>
<td> </td>
<td valign="bottom" width="23%"> </td>
<td> </td>
<td valign="bottom" width="23%"> </td>
<td> </td></tr>
<tr><td valign="bottom" nowrap="nowrap">
<p style="border-bottom: #000000 1px solid; width: 81pt;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Dividend per share</b></font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Date declared</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Date of record</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Payment date</b></font></td></tr>
<tr bgcolor="#cceeff"><td valign="top"><font style="font-family: Times New Roman;" class="_mt" size="2">$0.025</font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">March 4, 2011</font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">May 2, 2011</font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">May 16, 2011</font></td></tr>
<tr><td valign="top"><font style="font-family: Times New Roman;" class="_mt" size="2">$0.025</font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">June 27, 2011</font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">August 2, 2011</font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">August 16, 2011</font></td></tr></table>
<p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">On May 16, 2011, the Company paid cash dividends of $302,000, which reduced retained earnings. In the three months ended June 30, 2011, the Company reduced retained earnings for the accrual of $302,000 relating to the dividend payable on August 16, 2011. </font></p>
<p style="margin-top: 0px; margin-bottom: 0px; font-size: 12px;"> </p>
<table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="80%">
<tr><td width="88%"> </td>
<td valign="bottom" width="2%"> </td>
<td> </td>
<td> </td>
<td> </td>
<td valign="bottom" width="2%"> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr><td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Supplemental cash flow information</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="6" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Six Months Ended<br />June 30,</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td></tr>
<tr><td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>2011</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>2010</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td></tr>
<tr><td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom" colspan="6" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b> </b>(in thousands)<b> </b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td></tr>
<tr bgcolor="#cceeff"><td valign="top">
<p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Supplemental disclosure of cash flow information:</b></font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" colspan="5"> </td>
<td valign="bottom"> </td></tr>
<tr><td height="8"> </td>
<td height="8" colspan="4"> </td>
<td height="8" colspan="4"> </td></tr>
<tr><td valign="top">
<p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Cash paid for interest</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">3,471</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">3,710</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td></tr>
<tr bgcolor="#cceeff"><td valign="top">
<p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Cash paid for taxes</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">5,169</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">1,110</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td></tr>
<tr><td height="8"> </td>
<td height="8" colspan="4"> </td>
<td height="8" colspan="4"> </td></tr>
<tr><td valign="top">
<p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Non-cash investing activities:</b></font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td></tr>
<tr><td height="8"> </td>
<td height="8" colspan="4"> </td>
<td height="8" colspan="4"> </td></tr>
<tr bgcolor="#cceeff"><td valign="top">
<p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Grupo Vasconia, S.A.B. translation adjustment</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(1,049</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">130</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td></tr></table>
<p style="margin-top: 12px; margin-bottom: 0px; font-size: 1px;"> </p>
<table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="92%" align="center">
<tr><td width="72%"> </td>
<td valign="bottom" width="3%"> </td>
<td> </td>
<td> </td>
<td> </td>
<td valign="bottom" width="3%"> </td>
<td> </td>
<td> </td>
<td> </td>
<td valign="bottom" width="3%"> </td>
<td> </td>
<td> </td>
<td> </td>
<td valign="bottom" width="3%"> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr><td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Comprehensive income (loss)</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="6" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Three Months Ended</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="2"><b>June 30,</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="6" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Six Months Ended<br />June 30,</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td></tr>
<tr><td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>2011</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>2010</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>2011</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>2010</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td></tr>
<tr><td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom" colspan="14" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b> </b>(in thousands)<b> </b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td></tr>
<tr bgcolor="#cceeff"><td valign="top">
<p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Net income (loss)</b></font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">2,063</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(981</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">1,114</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(252</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td></tr>
<tr><td valign="top">
<p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Derivative fair value adjustment, net of taxes</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">— </font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">— </font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">— </font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">57</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td></tr>
<tr bgcolor="#cceeff"><td valign="top">
<p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Grupo Vasconia, S.A.B. foreign currency translation adjustment, net of taxes</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(176</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(659</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">1,049</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(79</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td></tr>
<tr><td valign="top">
<p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Derivative hedge de-designation</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">— </font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">97</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">— </font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">207</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td></tr>
<tr style="font-size: 1px;"><td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td> </td></tr>
<tr bgcolor="#cceeff"><td valign="top">
<p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Total comprehensive income (loss)</b></font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">1,887</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(1,543</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">2,163</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(67</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td></tr>
<tr style="font-size: 1px;"><td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td></tr></table>
<p style="margin-top: 18px; margin-bottom: 0px; font-size: 1px;"> </p>
<p style="margin-top: 0px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b><a name="tx191571_7"> </a></b></font></p></div>
131350000
132789000
12611000
5504000
1357000
464000
277586000
272362000
182253000
177223000
682000
886000
3351000
1940000
204000
-1411000
3351000
1940000
<p style="margin-top: 0px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>NOTE I — CONTINGENCIES </b></font></p>
<p style="margin-top: 6px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">Wallace Silversmiths de Puerto Rico, Ltd. ("Wallace de Puerto Rico"), a wholly-owned subsidiary of the Company, operates a manufacturing facility in San Germán, Puerto Rico, that is leased from the Puerto Rico Industrial Development Company ("PRIDCO"). In March 2008, the United States Environmental Protection Agency (the "EPA") announced that the San Germán Ground Water Contamination site in Puerto Rico (the "Site") had been added to the Superfund National Priorities List due to contamination present in the local drinking water supply. </font></p>
<p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">In May 2008, Wallace de Puerto Rico received from the EPA a Notice of Potential Liability and Request for Information Pursuant to 42 U.S.C. Sections 9607(a) and 9604(e) of the Comprehensive Environmental Response, Compensation, Liability Act. The Company responded to the EPA's Request for Information on behalf of Wallace. In July, 2011, Wallace de Puerto Rico received a letter from the EPA requesting access to the property that it leases from PRIDCO. </font></p>
<p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">The Company has received no information and is not aware of any determination by the EPA that any remedial action is warranted for the Site; and, accordingly, is not able to estimate the extent of any possible liability. </font></p>
<p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">The Company is, from time to time, involved in other legal proceedings. The Company believes that other current litigation is routine in nature and incidental to the conduct of the Company's business, and that none of this litigation, individually or collectively, would have a material adverse effect on the Company's consolidated financial position, results of operations or cash flows. </font></p>
0.050
0.025
0.01
0.01
25000000
25000000
12064543
12082943
12064543
12082943
121000
121000
23557000
24021000
106894000
52942000
114708000
56325000
<font style="font-family: Times New Roman;" class="_mt" size="2">
</font>
<div>
<p style="margin-top: 18px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>NOTE D </b>— <b>DEBT </b></font></p>
<p style="margin-top: 6px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2"><i>Revolving Credit Facility </i></font></p>
<p style="margin-top: 6px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">The Company has a $125.0 million secured credit agreement (the "Revolving Credit Facility"), which matures on June 9, 2015, with a bank group led by JPMorgan Chase Bank, N.A. </font></p>
<p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">Borrowings under the Revolving Credit Facility bear interest, at the Company's option, at one of the following rates: (i) the Alternate Base Rate, defined as the greater of the Prime Rate, Federal Funds Rate plus 0.5% or the Adjusted LIBOR rate plus 1.0%, plus a margin of 1.25% to 1.75%, or (ii) the Eurodollar Rate, defined as the Adjusted LIBOR Rate plus a margin of 2.25% to 2.75%. The respective margin is based upon availability. In addition, the Company pays a commitment fee of 0.50% on the unused portion of the Revolving Credit Facility. Availability under the Revolving Credit Facility was approximately 58.1% of the total facility commitment at June 30, 2011. </font></p>
<p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">At June 30, 2011, the Company had $1.4 million of open letters of credit and $17.4 million of borrowings outstanding under the Revolving Credit Facility. Interest rates on outstanding borrowings at June 30, 2011 ranged from 2.50% to 4.50%. </font></p>
<p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">Pursuant to the provisions of ASC Topic No. 470-10, <i>Short-term Obligations Expected to be Refinanced,</i> at June 30, 2011, the Company classified the Revolving Credit Facility as a long-term liability based on the Company's intent and ability to repay the loan. Repayments are planned to the extent that such anticipated cash flows are generated, although the Company is not obligated to repay any portion of the debt until maturity of the facility in June 2015, provided that availability exists under the facility. The Company expects that it will continue to borrow (subject to availability) and repay funds under the facility based on corporate requirements including, but not limited to, working capital needs. </font></p>
<p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">During the quarter ended June 30, 2010, the Company recognized a loss before income taxes of approximately $408,000 in connection with the repayment of the prior credit agreement, consisting of the write-off of unamortized debt issuance costs, which was included in loss on early retirement of debt in the accompanying condensed consolidated statements of operations. </font></p>
<p style="margin-top: 6px; margin-bottom: 0px; font-size: 1px;"> </p>
<p style="margin-top: 0px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2"><i>Term Loan </i></font></p>
<p style="margin-top: 6px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">The Company has a $40.0 million second lien credit agreement (the "Term Loan"), which matures on June 8, 2015, with Citibank, N.A. </font></p>
<p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">The Term Loan bears interest, at the Company's option, at one of the following rates: (i) the Alternate Base Rate, defined as the greater of the corporate rate published by the lender and the Federal Funds Rate plus 0.50% provided that such calculated rate is a minimum of 2.50%, plus a margin of 7.50%, or (ii) the Adjusted LIBOR rate which shall be a minimum of 1.50%, plus a margin of 8.50%. The interest rate on the outstanding borrowings at June 30, 2011 was 10.0%. </font></p>
<p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">The Term Loan requires the Company to have EBITDA, as defined, of not less than $30.0 million for the trailing four fiscal quarters and limits capital expenditures to $7.5 million for the year ending December 31, 2011. The Company was in compliance with these financial covenants at June 30, 2011. </font></p>
<p style="margin-top: 18px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2"><i>4.75% Convertible Senior Notes </i></font></p>
<p style="margin-top: 6px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">At June 30, 2011, the Company had outstanding $24.1 million aggregate principal amount of the Notes due July 15, 2011. Pursuant to the provisions of ASC Topic No. 470-10, the Company classified the Notes as a long-term liability based on the Company's intent and ability to repay the Notes with borrowings from the Revolving Credit Facility. On July 15, 2011, the Company retired the $24.1 million aggregate principal amount of the Notes with borrowings from the Revolving Credit Facility. </font></p>
<p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">At June 30, 2011 and December 31, 2010, the carrying amounts of the debt and equity components of the Notes were as follows (in thousands): </font></p>
<p style="margin-top: 0px; margin-bottom: 0px; font-size: 12px;"> </p>
<table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="76%" align="center">
<tr><td width="67%"> </td>
<td valign="bottom" width="8%"> </td>
<td> </td>
<td> </td>
<td> </td>
<td valign="bottom" width="8%"> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr><td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>June 30,</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="2"><b>2011</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>December 31,<br />2010</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td></tr>
<tr bgcolor="#cceeff"><td valign="top">
<p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Carrying amount of equity component, net of tax</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2"> 8,262</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">8,262</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td></tr>
<tr style="font-size: 1px;"><td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td></tr>
<tr><td height="8"> </td>
<td height="8" colspan="4"> </td>
<td height="8" colspan="4"> </td></tr>
<tr><td valign="top">
<p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Principal amount of debt component</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">24,100</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">24,100</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td></tr>
<tr bgcolor="#cceeff"><td valign="top">
<p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Unamortized discount</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(79</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(543</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td></tr>
<tr style="font-size: 1px;"><td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td> </td></tr>
<tr><td valign="top">
<p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Carrying amount of debt component</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">24,021</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">23,557</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td></tr>
<tr style="font-size: 1px;"><td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td></tr></table>
<p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">The effective interest rate of the debt component was 9.02% at the date of issuance. Total interest expense recognized related to the Notes, including amortization of the debt discount and offering costs, was $587,000 and $1.6 million for the three months ended June 30, 2011 and 2010, respectively, and $1.2 million and $3.3 million for the six months ended June 30, 2011 and 2010, respectively. </font></p>
<p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">Included in the loss on early retirement of debt in the accompanying condensed consolidated statement of operations was a loss before income taxes of $356,000 related to the debt component of the portion of the Notes repurchased in June 2010 and unamortized debt discount and issuance costs written off. </font></p></div>
1124000
1124000
1429000
1603000
5000000
4015000
-0.02
-0.08
0.09
0.17
-0.02
-0.08
0.09
0.17
<font style="font-family: Times New Roman;" class="_mt" size="2">
</font>
<div>
<p style="margin-top: 0px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>NOTE F — INCOME (LOSS) PER COMMON SHARE </b><b><i> </i></b><b> </b></font></p>
<p style="margin-top: 6px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">Basic income (loss) per common share has been computed by dividing net income (loss) by the weighted-average number of shares of the Company's common stock outstanding. Diluted income (loss) per common share adjusts net income (loss) and basic income (loss) per common share for the effect of all potentially dilutive shares of the Company's common stock. The calculations of basic and diluted income (loss) per common share for the three and six month periods ended June 30, 2011 and 2010 are as follows: </font></p>
<p style="margin-top: 0px; margin-bottom: 0px; font-size: 12px;"> </p>
<table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="92%" align="center">
<tr><td width="68%"> </td>
<td valign="bottom" width="4%"> </td>
<td> </td>
<td> </td>
<td> </td>
<td valign="bottom" width="4%"> </td>
<td> </td>
<td> </td>
<td> </td>
<td valign="bottom" width="4%"> </td>
<td> </td>
<td> </td>
<td> </td>
<td valign="bottom" width="4%"> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr><td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="6" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Three Months Ended</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="2"><b>June 30,</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="6" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Six Months Ended</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="2"><b>June 30,</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td></tr>
<tr><td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>2011</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>2010</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>2011</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>2010</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td></tr>
<tr><td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom" colspan="14" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b> </b>(in thousands, except per share amounts)<b> </b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td></tr>
<tr><td height="8"> </td>
<td height="8" colspan="4"> </td>
<td height="8" colspan="4"> </td>
<td height="8" colspan="4"> </td>
<td height="8" colspan="4"> </td></tr>
<tr bgcolor="#cceeff"><td valign="top">
<p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Net income (loss) - basic</b></font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">2,063</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(981</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">1,114</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(252</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td></tr>
<tr><td valign="top">
<p style="text-indent: -1em; margin-left: 2em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Net interest expense, 4.75% Convertible Senior Notes</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">— </font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">— </font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">— </font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">— </font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td></tr>
<tr style="font-size: 1px;"><td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td> </td></tr>
<tr bgcolor="#cceeff"><td valign="top">
<p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Net income (loss) - diluted</b></font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">2,063</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(981</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">1,114</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(252</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td></tr>
<tr style="font-size: 1px;"><td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td></tr>
<tr><td height="8"> </td>
<td height="8" colspan="4"> </td>
<td height="8" colspan="4"> </td>
<td height="8" colspan="4"> </td>
<td height="8" colspan="4"> </td></tr>
<tr><td valign="top">
<p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Weighted-average shares outstanding – basic</b></font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">12,070</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">12,027</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">12,068</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">12,021</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td></tr>
<tr bgcolor="#cceeff"><td valign="top">
<p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Effect of dilutive securities:</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td></tr>
<tr><td valign="top">
<p style="text-indent: -1em; margin-left: 2em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Stock options</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">416</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">— </font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">427</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">— </font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td></tr>
<tr bgcolor="#cceeff"><td valign="top">
<p style="text-indent: -1em; margin-left: 2em;"><font style="font-family: Times New Roman;" class="_mt" size="2">4.75% Convertible Senior Notes</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">— </font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">— </font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">— </font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">— </font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td></tr>
<tr style="font-size: 1px;"><td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td> </td></tr>
<tr><td valign="top">
<p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Weighted-average shares outstanding – diluted</b></font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">12,486</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">12,027</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">12,495</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">12,021</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td></tr>
<tr style="font-size: 1px;"><td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td></tr>
<tr><td height="8"> </td>
<td height="8" colspan="4"> </td>
<td height="8" colspan="4"> </td>
<td height="8" colspan="4"> </td>
<td height="8" colspan="4"> </td></tr>
<tr bgcolor="#cceeff"><td valign="top">
<p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Basic income (loss) per common share</b></font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">0.17</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(0.08</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">0.09</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(0.02</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td></tr>
<tr style="font-size: 1px;"><td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td></tr>
<tr><td height="8"> </td>
<td height="8" colspan="4"> </td>
<td height="8" colspan="4"> </td>
<td height="8" colspan="4"> </td>
<td height="8" colspan="4"> </td></tr>
<tr><td valign="top">
<p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Diluted income (loss) per common share</b></font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">0.17</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(0.08</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">0.09</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(0.02</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td></tr>
<tr style="font-size: 1px;"><td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td></tr></table>
<p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">The computation of diluted income (loss) per common share for the three months ended June 30, 2011 and 2010 excludes: (i) options to purchase 1,146,150 shares and 2,310,650 shares, respectively; and (ii) 860,714 shares and 2,405,141 shares of the Company's common stock issuable upon the conversion of the Company's Notes and related interest expense, respectively. The computation of diluted income (loss) per common share for the six months ended June 30, 2011 and 2010 excludes: (i) options to purchase 1,756,075 shares and 1,504,075 shares, respectively; and (ii) 860,714 shares and 2,541,101 shares of the Company's common stock issuable upon the conversion of the Company's Notes and related interest expense, respectively. The above shares were excluded due to their antidilutive effects. </font></p></div>
24068000
25708000
<p style="margin-top: 0px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>NOTE B </b>— <b>EQUITY INVESTMENTS </b></font></p>
<p style="margin-top: 6px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">The Company owns a 30% interest in Grupo Vasconia S.A.B. ("Vasconia"). The Company accounts for its investment in Vasconia using the equity method of accounting and records its proportionate share of Vasconia's net income in the Company's statement of operations. Accordingly, the Company has recorded its proportionate share of Vasconia's net income (reduced for amortization expense related to the customer relationships acquired) for the three and six month periods ended June 30, 2011 and 2010 in the accompanying condensed consolidated statements of operations. The value of the Company's investment balance has been translated from Mexican Pesos ("MXN") to U.S. Dollars ("USD") using the spot rate of MXN 11.78 and MXN 12.83 at June 30, 2011 and 2010, respectively. The Company's proportionate share of Vasconia's net income has been translated from MXN to USD using the average daily exchange rate of MXN 11.74 and MXN 12.55 during the three months ended June 30, 2011 and 2010, respectively, and MXN 11.91 and MXN 12.66 during the six months ended June 30, 2011 and 2010, respectively. The effect of the translation of the Company's investment resulted in an increase to the investment balance of $1.0 million during the six months ended June 30, 2011 and a decrease to the investment balance of $130,000 during the six months ended June 30, 2010 (also see Note J). These translation effects are recorded in accumulated other comprehensive loss. Included in prepaid expenses and other current assets at June 30, 2011 and December 31, 2010 are amounts due from Vasconia of $111,000 and $102,000, respectively. During the three months ended June 30, 2011, the Company received a cash dividend of $466,000 from Vasconia related to its 2010 earnings, which is accounted for as a reduction to the cost basis of the investment. </font></p>
<p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">Summarized income statement information for Vasconia in USD and MXN is as follows: </font></p>
<p style="margin-top: 0px; margin-bottom: 0px; font-size: 12px;"> </p>
<table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="92%" align="center">
<tr><td width="66%"> </td>
<td valign="bottom" width="3%"> </td>
<td> </td>
<td> </td>
<td> </td>
<td valign="bottom" width="3%"> </td>
<td> </td>
<td> </td>
<td> </td>
<td valign="bottom" width="3%"> </td>
<td> </td>
<td> </td>
<td> </td>
<td valign="bottom" width="3%"> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr><td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="14" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Three Months Ended</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="2"><b>June 30,</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td></tr>
<tr><td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="6" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>2011</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="6" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>2010</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td></tr>
<tr><td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom" colspan="14" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b> </b>(in thousands)<b> </b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td></tr>
<tr><td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2">USD</font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2">MXN</font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2">USD</font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2">MXN</font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td></tr>
<tr bgcolor="#cceeff"><td valign="top">
<p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Net Sales</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">30,909</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">362,784</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">25,326</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">317,802</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td></tr>
<tr><td valign="top">
<p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Gross Profit</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">8,364</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">98,168</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">7,694</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">96,548</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td></tr>
<tr bgcolor="#cceeff"><td valign="top">
<p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Income from operations</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">3,127</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">36,697</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">3,370</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">42,284</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td></tr>
<tr><td valign="top">
<p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Net Income</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">2,116</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">24,838</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">1,801</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">22,599</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td></tr>
<tr><td height="16"> </td>
<td height="16" colspan="16"> </td></tr>
<tr><td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="14" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Six Months Ended</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="2"><b>June 30,</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td></tr>
<tr><td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="6" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>2011</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="6" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>2010</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td></tr>
<tr><td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom" colspan="14" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b> </b>(in thousands)<b> </b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td></tr>
<tr><td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b> </b>USD<b> </b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2">MXN</font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2">USD</font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2">MXN</font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td></tr>
<tr bgcolor="#cceeff"><td valign="top">
<p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Net Sales</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">59,480</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">708,261</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">50,464</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">638,927</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td></tr>
<tr><td valign="top">
<p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Gross Profit</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">16,447</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">195,905</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">15,023</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">190,169</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td></tr>
<tr bgcolor="#cceeff"><td valign="top">
<p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Income from operations</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">6,452</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">76,903</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">6,904</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">87,430</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td></tr>
<tr><td valign="top">
<p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Net Income</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">4,247</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">50,606</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">4,117</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">52,191</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td></tr></table>
<p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">The Company recorded equity in earnings of Vasconia, net of taxes, of $544,000 and $478,000 for the three months ended June 30, 2011 and 2010, respectively, and $1.0 million and $1.1 million for the six months ended June 30, 2011 and 2010, respectively. </font></p>
<p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">The Company also has a 50% joint venture investment in World Alliance Enterprises Limited, a Hong-Kong based company that primarily sells kitchenware and cutlery products to retailers other than in North and South America. During the three months ended June 30, 2011, the Company recorded equity in earnings of $315,000, net of taxes. This reflects the cumulative results of this investment through June 30, 2011. Operating activities of this investment for the remainder of 2011 is expected to be immaterial. </font></p>
-764000
-764000
-788000
-886000
310000
2312000
1148000
478000
1324000
859000
750000
858000
<font style="font-family: Times New Roman;" class="_mt" size="2">
</font>
<div>
<p style="margin-top: 18px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>NOTE G — INCOME TAXES </b></font></p>
<p style="margin-top: 6px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">As of December 31, 2010, the Company had fully utilized the Federal net operating loss and other credit carryforwards generated in previous years. The Company has generated various state net operating loss carryforwards of $8.6 million that will begin to expire in 2014. The Company has net operating losses in foreign jurisdictions of $4.0 million that will begin to expire in 2013. In accordance with ASC Topic No. 740,<i> Income Taxes, </i>the Company has offset its total deferred tax assets with certain deferred tax liabilities that are expected to reverse in the carryforward period. As of December 31, 2010, management had determined that it was "more likely than not" that certain deferred tax assets would be realized and the corresponding valuation allowance had been released based on the Company's ability to utilize deferred tax assets currently and the expected future use of temporary differences in the carryback period. The Company did not release any valuation allowance during the six months ended June 30, 2011 as the evaluation of the realization of deferred tax assets was unchanged. </font></p>
<p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">The estimated value of the Company's tax positions at June 30, 2011 is a liability of $407,000. If the Company's tax positions are sustained by the taxing authorities in favor of the Company, the Company's liability would be reduced by $331,000, all of which would impact the Company's tax provision. On a quarterly basis, the Company evaluates its tax positions and revises its estimates accordingly. The Company believes that $153,000 of its tax positions will be resolved within the next twelve months. </font></p>
<p style="margin-top: 12px; margin-bottom: 0px; font-size: 1px;"> </p>
<p style="margin-top: 0px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">The Company has identified the following jurisdictions as "major" tax jurisdictions: U.S. Federal, California, Massachusetts, Pennsylvania, New York and New Jersey. The Company is no longer subject to U.S. Federal income tax examinations for the years prior to 2009. The periods subject to examination for the Company's major state jurisdictions are the years ended 2007 through 2010. </font></p>
<p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">The Company's policy for recording interest and penalties is to record such items as a component of income taxes. Interest and penalties were not material to the Company's financial position, results of operations or cash flows as of and for the six months ended June 30, 2011 and 2010. </font></p></div>
612000
573000
520000
1108000
-8943000
-13871000
-906000
-4854000
10762000
10571000
6892000
-7485000
-99000
-643000
951000
<p style="margin-top: 18px; margin-bottom: 0px; font-size: 1px;"> </p>
<p style="margin-top: 0px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>NOTE C — INTANGIBLE ASSETS </b></font></p>
<p style="margin-top: 6px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">Intangible assets, all of which relate to the Company's Wholesale segment, consist of the following (in thousands): </font></p>
<p style="margin-top: 0px; margin-bottom: 0px; font-size: 12px;"> </p>
<table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%" align="center">
<tr><td width="68%"> </td>
<td valign="bottom" width="1%"> </td>
<td> </td>
<td> </td>
<td> </td>
<td valign="bottom" width="1%"> </td>
<td> </td>
<td> </td>
<td> </td>
<td valign="bottom" width="1%"> </td>
<td> </td>
<td> </td>
<td> </td>
<td valign="bottom" width="1%"> </td>
<td> </td>
<td> </td>
<td> </td>
<td valign="bottom" width="1%"> </td>
<td> </td>
<td> </td>
<td> </td>
<td valign="bottom" width="1%"> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr><td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="10" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>June 30, 2011</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="10" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>December 31, 2010</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td></tr>
<tr><td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Gross</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Accumulated<br />Amortization</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Net</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Gross</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Accumulated<br />Amortization</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Net</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td></tr>
<tr bgcolor="#cceeff"><td valign="top">
<p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Indefinite-lived intangible assets:</b></font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td></tr>
<tr><td valign="top">
<p style="text-indent: -1em; margin-left: 5em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Trade names</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2"> 19,433</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">— </font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2"> 19,433</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2"> 19,433</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">— </font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2"> 19,433</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td></tr>
<tr><td height="8"> </td>
<td height="8" colspan="4"> </td>
<td height="8" colspan="4"> </td>
<td height="8" colspan="4"> </td>
<td height="8" colspan="4"> </td>
<td height="8" colspan="4"> </td>
<td height="8" colspan="4"> </td></tr>
<tr bgcolor="#cceeff"><td valign="top">
<p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Finite-lived intangible assets:</b></font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td></tr>
<tr><td valign="top">
<p style="text-indent: -1em; margin-left: 5em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Licenses</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">15,847</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(6,413</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">9,434</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">15,847</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(6,186</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">9,661</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td></tr>
<tr bgcolor="#cceeff"><td valign="top">
<p style="text-indent: -1em; margin-left: 5em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Trade names</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">2,477</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(1,309</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">1,168</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">2,477</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(1,267</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">1,210</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td></tr>
<tr><td valign="top">
<p style="text-indent: -1em; margin-left: 5em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Customer relationships</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">586</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(558</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">28</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">586</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(530</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">56</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td></tr>
<tr bgcolor="#cceeff"><td valign="top">
<p style="text-indent: -1em; margin-left: 5em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Patents</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">584</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(143</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">441</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">584</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(126</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">458</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td></tr>
<tr style="font-size: 1px;"><td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td> </td></tr>
<tr><td valign="top">
<p style="text-indent: -1em; margin-left: 3em;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Total</b></font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">38,927</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(8,423</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">30,504</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">38,927</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(8,109</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">30,818</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td></tr>
<tr style="font-size: 1px;"><td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td></tr></table>
30818000
30504000
5073000
2644000
4018000
2039000
99935000
110506000
277586000
272362000
60512000
44364000
4100000
10000000
17354000
40000000
40000000
-9665000
2914000
-1251000
-2066000
11120000
-2259000
-252000
-981000
1114000
2063000
5049000
2522000
4328000
4351000
<font style="font-family: Times New Roman;" class="_mt" size="2">
</font>
<div>
<p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>NOTE A — BASIS OF PRESENTATION AND SUMMARY ACCOUNTING POLICIES </b></font></p>
<p style="margin-top: 6px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Organization and business </b></font></p>
<p style="margin-top: 6px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">Lifetime Brands, Inc. (the "Company") designs, markets and distributes a broad range of consumer products used in the home, including kitchenware, tabletop, home décor and lifestyle products, and markets its products under a number of brand names and trademarks, which are either owned or licensed. The Company markets and sells its products principally on a wholesale basis to retailers throughout North America. The Company also markets and sells certain products directly to the consumer through its Pfaltzgraff®, Mikasa®, Housewares Deals™ and Lifetime Sterling™ Internet websites. </font></p>
<p style="margin-top: 18px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Basis of presentation </b></font></p>
<p style="margin-top: 6px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring accruals, considered necessary for a fair presentation have been included. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2010. Operating results for the three and six month periods ended June 30, 2011 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011. </font></p>
<p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">The Company's business and working capital needs are highly seasonal, with a majority of sales occurring in the third and fourth quarters. In 2010, 2009 and 2008, net sales for the third and fourth quarters accounted for 60%, 58%, and 61% of total annual net sales, respectively. In anticipation of the pre-holiday shipping season, inventory levels increase primarily in the June through October time period. </font></p>
<p style="margin-top: 18px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Revenue recognition </b></font></p>
<p style="margin-top: 6px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">Wholesale sales and Retail Direct sales are recognized when title passes to the customer. Wholesale sales are recognized at shipping point and Retail Direct sales are recognized upon delivery to the customer. Shipping and handling fees that are billed to customers in sales transactions are included in net sales and amounted to $274,000 and $386,000 for the three months ended June 30, 2011 and 2010, respectively, and $729,000 and $904,000 for the six months ended June 30, 2011 and 2010, respectively. Net sales exclude taxes that are collected from customers and remitted to the taxing authorities. </font></p>
<p style="margin-top: 18px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Distribution expenses </b></font></p>
<p style="margin-top: 6px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">Distribution expenses consist primarily of warehousing expenses, handling costs of products sold and freight-out expenses. </font></p>
<p style="margin-top: 6px; margin-bottom: 0px; font-size: 1px;"> </p>
<p style="margin-top: 0px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Inventory </b></font></p>
<p style="margin-top: 6px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">Inventory consists principally of finished goods sourced from third-party suppliers. Inventory also includes finished goods, work in process and raw materials related to the Company's manufacture of sterling silver products. Inventory is priced by the lower of cost (first-in, first-out basis) or market method. The Company estimates the selling price of its inventory on a product by product basis based on the current selling environment. If the estimated selling price is lower than the inventory's cost, the Company reduces the value of the inventory to its net realizable value. </font></p>
<p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">The components of inventory are as follows: </font></p>
<p style="margin-top: 0px; margin-bottom: 0px; font-size: 12px;"> </p>
<table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="76%" align="center">
<tr><td width="73%"> </td>
<td valign="bottom" width="7%"> </td>
<td> </td>
<td> </td>
<td> </td>
<td valign="bottom" width="7%"> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr><td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>June 30,</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="2"><b>2011</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>December 31,<br />2010</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td></tr>
<tr><td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom" colspan="6" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b> </b>(in thousands)<b> </b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td></tr>
<tr bgcolor="#cceeff"><td valign="top">
<p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Finished goods</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">106,730</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">96,375</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td></tr>
<tr><td valign="top">
<p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Work in process</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">2,066</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">1,890</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td></tr>
<tr bgcolor="#cceeff"><td valign="top">
<p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Raw materials</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">1,710</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">1,670</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td></tr>
<tr style="font-size: 1px;"><td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td> </td></tr>
<tr><td valign="top">
<p style="text-indent: -1em; margin-left: 3em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Total</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">110,506</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">99,935</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td></tr>
<tr style="font-size: 1px;"><td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td></tr></table>
<p style="margin-top: 18px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Fair value measurements </b></font></p>
<p style="margin-top: 6px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">ASC Topic No. 820, <i>Fair Value Measurements and Disclosures</i>, provides enhanced guidance for using fair value to measure assets and liabilities and establishes a common definition of fair value, provides a framework for measuring fair value under U.S. generally accepted accounting principles and expands disclosure requirements about fair value measurements. Fair value measurements included in the Company's condensed consolidated financial statements relate to the Company's convertible senior notes described in Note D. </font></p>
<p style="margin-top: 18px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Fair value of financial instruments </b></font></p>
<p style="margin-top: 6px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">The Company determined the carrying amounts of cash and cash equivalents, accounts receivable and accounts payable are reasonable estimates of their fair values because of their short-term nature. The Company determined that the carrying amounts of borrowings outstanding under its revolving credit facility approximate fair value since such borrowings bear interest at variable market rates. The fair value of the Company's $24.1 million 4.75% Convertible Senior Notes (the "Notes") at June 30, 2011 was $24.1 million and was determined based on Level 2 observable inputs consisting of the most recent quoted price for the Notes obtained from the FINRA Trade Reporting and Compliance Engine™ system at June 30, 2011. </font></p>
<p style="margin-top: 18px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Health insurance </b></font></p>
<p style="margin-top: 6px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">The Company offers health benefits to its employees under plans, a substantial portion of which has been self insured since February 2011. The self-insured plan is administered by a third party and the Company purchases stop loss coverage. The Company accrues for unpaid reported claims and estimated claims incurred but not yet reported. Although management believes its estimate for accrued medical claims inclusive of claims incurred but not yet reported is reasonable, actual claims may vary significantly from the estimate. </font></p>
<p style="margin-top: 18px; margin-bottom: 0px; font-size: 1px;"> </p></div>
4354000
4469000
302000
3058000
1251000
2066000
0.01
0.01
100
2000000
100
2000000
0
0
0
0
5048000
4729000
10000000
58828000
3254000
57000
15000
36093000
34458000
51028000
89000
59000
24601000
1312000
1823000
175625000
86889000
182144000
90371000
<p style="margin-top: 0px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>NOTE E </b>— <b>STOCK COMPENSATION </b></font></p>
<p style="margin-top: 6px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">A summary of the Company's stock option activity and related information for the six months ended June 30, 2011 is as follows: </font></p>
<p style="margin-top: 0px; margin-bottom: 0px; font-size: 12px;"> </p>
<table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="92%" align="center">
<tr><td width="55%"> </td>
<td valign="bottom" width="3%"> </td>
<td> </td>
<td> </td>
<td> </td>
<td valign="bottom" width="3%"> </td>
<td> </td>
<td> </td>
<td> </td>
<td valign="bottom" width="3%"> </td>
<td> </td>
<td> </td>
<td> </td>
<td valign="bottom" width="3%"> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr><td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b> Options </b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Weighted-</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="2"><b>average</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="2"><b>exercise</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="2"><b>price</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Weighted-<br />average<br />remaining<br />contractual life<br />(years)</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Aggregate<br />intrinsic</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="2"><b>value</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td></tr>
<tr bgcolor="#cceeff"><td valign="top">
<p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Options outstanding, January 1, 2011</b></font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">2,219,200</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2"> 12.46</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td></tr>
<tr><td valign="top">
<p style="text-indent: -1em; margin-left: 3em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Grants</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">376,500</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">11.16</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td></tr>
<tr bgcolor="#cceeff"><td valign="top">
<p style="text-indent: -1em; margin-left: 3em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Exercises</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(4,500</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">3.26</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td></tr>
<tr><td valign="top">
<p style="text-indent: -1em; margin-left: 3em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Cancellations</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(9,300</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">12.40</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td></tr>
<tr style="font-size: 1px;"><td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td></tr>
<tr bgcolor="#cceeff"><td valign="top">
<p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Options outstanding, June 30, 2011</b></font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">2,581,900</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">12.29</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">6.75</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2"> 7,572,163</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td></tr>
<tr style="font-size: 1px;"><td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td></tr>
<tr><td valign="top">
<p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Options exercisable, June 30, 2011</b></font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">1,376,950</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">13.73</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">5.25</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">4,745,023</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td></tr>
<tr style="font-size: 1px;"><td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td></tr></table>
<p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value that would have been received by the option holders had all option holders exercised their stock options on June 30, 2011. The intrinsic value is calculated for each in-the-money stock option as the difference between the closing price of the Company's common stock on June 30, 2011 and the exercise price. </font></p>
<p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">The total intrinsic value of stock options exercised for the six months ended June 30, 2011 and 2010 was $41,000 and $234,000, respectively. The intrinsic value of a stock option that is exercised is calculated at the date of exercise. </font></p>
<p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">The Company recognized stock compensation expense of $675,000 and $741,000 for the three months ended June 30, 2011 and 2010, respectively, and $1.4 million for both the six months ended June 30, 2011 and 2010. </font></p>
<p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">Total unrecognized compensation cost related to unvested stock options at June 30, 2011, before the effect of income taxes, was $5.6 million and is expected to be recognized over a weighted-average period of 1.88 years. </font></p>
<p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">During the three months ended, June 30, 2011, the Company granted an aggregate of 13,900 shares of restricted stock to its independent directors as part of their annual retainer that vests 100% one year from the date of grant. The restricted stock had a fair value of $150,000 at the grant date that will be recognized in expense over the one year vesting period. On August 4, 2011, the Company granted an aggregate of 7,500 shares of restricted stock to its independent directors that vests one year from the date of grant. The restricted stock had a fair value of $80,000 at the grant date that will be recognized in expense over the one year vesting period. </font></p>
<p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">At June 30, 2011, there were 352,826 shares available for grants of awards under the Company's 2000 Long-Term Incentive Plan. </font></p>
<div>
<p style="margin-top: 18px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>NOTE H — BUSINESS SEGMENTS </b></font></p>
<p style="margin-top: 6px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">The Company operates in two reportable business segments; the Wholesale segment, the Company's primary business, in which the Company designs, markets and distributes products to retailers and distributors, and the Retail Direct segment, in which the Company markets and sells to consumers through its Pfaltzgraff®, Mikasa®, Housewares Deals™ and Lifetime Sterling™ Internet websites. </font></p>
<p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">The Company has segmented its operations to reflect the manner in which management reviews and evaluates the results of its operations. While both segments distribute similar products, the segments are distinct due to the different types of customers and the different methods the Company uses to sell, market and distribute the products. </font></p>
<p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">Management evaluates the performance of the Wholesale and Retail Direct segments based on net sales and income (loss) from operations. Such measures give recognition to specifically identifiable operating costs such as cost of sales, distribution expenses and selling, general and administrative expenses. Certain general and administrative expenses, such as senior executive salaries and benefits, stock compensation, director fees and accounting, legal and consulting fees, are not allocated to the specific segments and are reflected as unallocated corporate expenses. </font></p>
<p style="margin-top: 0px; margin-bottom: 0px; font-size: 12px;"> </p>
<table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="92%" align="center">
<tr><td width="66%"> </td>
<td valign="bottom" width="3%"> </td>
<td> </td>
<td> </td>
<td> </td>
<td valign="bottom" width="3%"> </td>
<td> </td>
<td> </td>
<td> </td>
<td valign="bottom" width="3%"> </td>
<td> </td>
<td> </td>
<td> </td>
<td valign="bottom" width="3%"> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr><td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="6" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Three Months Ended<br />June 30,</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="6" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Six Months Ended</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="2"><b>June 30,</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td></tr>
<tr><td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>2011</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>2010</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>2011</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>2010</b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td></tr>
<tr><td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom" colspan="14" align="center"><font style="font-family: Times New Roman;" class="_mt" size="2"><b> </b>(in thousands)<b> </b></font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td></tr>
<tr bgcolor="#cceeff"><td valign="top">
<p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Net sales</b></font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td></tr>
<tr><td valign="top">
<p style="text-indent: -1em; margin-left: 2em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Wholesale</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">86,301</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">81,530</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">171,204</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">163,640</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td></tr>
<tr bgcolor="#cceeff"><td valign="top">
<p style="text-indent: -1em; margin-left: 2em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Retail Direct</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">4,070</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">5,359</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">10,940</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">11,985</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td></tr>
<tr style="font-size: 1px;"><td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td> </td></tr>
<tr><td valign="top">
<p style="text-indent: -1em; margin-left: 3em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Total net sales</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">90,371</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">86,889</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">182,144</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">175,625</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td></tr>
<tr style="font-size: 1px;"><td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td></tr>
<tr><td height="8"> </td>
<td height="8" colspan="4"> </td>
<td height="8" colspan="4"> </td>
<td height="8" colspan="4"> </td>
<td height="8" colspan="4"> </td></tr>
<tr bgcolor="#cceeff"><td valign="top">
<p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Income (loss) from operations</b></font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td></tr>
<tr><td valign="top">
<p style="text-indent: -1em; margin-left: 2em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Wholesale</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">7,136</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">5,637</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">10,050</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">10,658</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td></tr>
<tr bgcolor="#cceeff"><td valign="top">
<p style="text-indent: -1em; margin-left: 2em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Retail Direct</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(316</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(288</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(420</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(418</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td></tr>
<tr><td valign="top">
<p style="text-indent: -1em; margin-left: 2em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Unallocated corporate expenses</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(2,469</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(2,827</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(5,302</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(5,191</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td></tr>
<tr style="font-size: 1px;"><td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td> </td></tr>
<tr bgcolor="#cceeff"><td valign="top">
<p style="text-indent: -1em; margin-left: 3em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Total income from operations</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">4,351</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">2,522</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">4,328</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">5,049</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td></tr>
<tr style="font-size: 1px;"><td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td></tr>
<tr><td height="8"> </td>
<td height="8" colspan="4"> </td>
<td height="8" colspan="4"> </td>
<td height="8" colspan="4"> </td>
<td height="8" colspan="4"> </td></tr>
<tr><td valign="top">
<p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Depreciation and amortization</b></font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td></tr>
<tr bgcolor="#cceeff"><td valign="top">
<p style="text-indent: -1em; margin-left: 2em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Wholesale</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(1,931</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(2,435</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(3,906</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(4,954</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td></tr>
<tr><td valign="top">
<p style="text-indent: -1em; margin-left: 2em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Retail Direct</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(89</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(23</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(109</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(46</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td></tr>
<tr style="font-size: 1px;"><td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 1px solid;"> </p></td>
<td> </td></tr>
<tr bgcolor="#cceeff"><td valign="top">
<p style="text-indent: -1em; margin-left: 3em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Total depreciation and amortization</font></p></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(2,020</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(2,458</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(4,015</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td>
<td valign="bottom"><font class="_mt" size="1"> </font></td>
<td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(5,000</font></td>
<td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">) </font></td></tr>
<tr style="font-size: 1px;"><td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td valign="bottom">
<p style="border-top: #000000 3px double;"> </p></td>
<td> </td></tr></table>
<p style="margin-top: 6px; margin-bottom: 0px; font-size: 1px;"> </p></div>
19730000
9597000
20246000
9306000
43952000
21828000
42862000
20389000
1400000
1423000
127606000
130604000
226000
6000
5036000
182000