For the second quarter of 2009, the Company recorded a net profit of $1.2 million or $0.13 per diluted share compared to a net profit of $0.3 million or $0.03 per diluted share in the second quarter of 2008. Revenue for the second quarter of 2009 was $10.5 million, an 18.6% decrease from the $12.9 million reported for the second quarter of 2008. However, gross margins improved to 45.9% from 41.3% and cash generated from operations was $1.9 million for the second quarter compared to a decrease of $0.7 million for the comparable period in 2008.

"We have recorded our second consecutive quarter of profitability which is an outstanding achievement given the current economy. Of particular note, we have also been profitable at the operating income level for two consecutive quarters," stated Mr. Theodore A. Boutacoff, President and CEO. "Our margins have improved, we are controlling our operating expenses well and our cash generation continues to be excellent. We are beginning to see the benefits of creating a very efficient and scalable business."

"At the start of 2008, we laid out our vision and strategy for the Company. Our first objective was, and continues to be, cash generation. We have been very successful in this effort and have generated over $9 million in cash over the last six quarters; of which $6.3 million was used to pay our outstanding balance to American Medical Systems in full, and we have reduced our bank debt by $1.5 million. Our second objective was to drive the Company to profitability and we have now achieved two consecutive profitable quarters. With this momentum, we are turning our attention to our third objective which is growth. As the economy improves we anticipate seeing our current business grow. In addition, together with our internal product development we are looking at opportunities outside the Company to add complementary products that will allow us to strengthen our position within existing markets."

In April 2007 we entered into an agreement with Synergetics USA, Inc. relating to the settlement of legal claims for patent infringement. The settlement agreement called for an initial payment of $2.5 million, which was received in the second quarter of 2007, and five subsequent annual payments of $0.8 million, totaling $6.5 million. We received payments of $0.8 million in the second quarters of 2008 and 2009 and expect to receive annual payments of $0.8 million relating to this agreement in the second quarters of 2010, 2011 and 2012. These amounts are shown in our income statement as part of other income.