The Company reported operating income for the six months ended June 30, 2009 of $203,000 compared to operating income of $263,000 for the six months ended June 30, 2008. The Company recorded a net loss of $395,000, ($0.04) per share (basic and diluted) for the six months ended June 30, 2009, compared to the net loss of $946,000, ($1.05) per share (basic and diluted) for the six months ended June 30, 2008.

Sales were $6,422,000 for the quarter ended June 30, 2009 versus $6,677,000 for the quarter ended June 30, 2008, a decrease of approximately $255,000 (4%). Copper Connection/Protection sales were $4,889,000 for the quarter ended June 30, 2009 versus $5,455,000 for the quarter ended June 30, 2008, a decrease of $566,000 (10%). The decrease was primarily due to decreased sales to British Telecommunications and its systems integrators of approximately $1,400,000 partially offset by increased sales to Telmex of $720,000. Signal Processing sales for the quarter ended June 30, 2009 were $1,533,000 versus $1,222,000 for the quarter ended June 30, 2008, an increase of $311,000 (25%). The increase in Signal revenue was primarily due to an increase in orders placed by the military sector.

Sales were $14,075,000 for the six months ended June 30, 2009 versus $13,222,000 for the six months ended June 30, 2008, an increase of approximately $853,000 (6%). Copper Connection/Protection sales were $11,109,000 for the six months ended June 30, 2009 versus $10,847,000 for the six months ended June 30, 2008, an increase of $262,000 (2%). The increase in sales was primarily a result of increased sales to Telmex of approximately $2,137,000 offset by decreased sales to British Telecommunications and its systems integrators of approximately $985,000 and a decline in sales of $761,000 to another customer, which was less than a 10% customer in the six months ended June 30, 2008. Signal Processing sales for the six months ended June 30, 2009 were $2,966,000 versus $2,375,000 for the six months ended June 30, 2008, an increase of $591,000 (25%). The increase in sales results from increased military orders received during the six month period.

The overall gross margin was 24% for the quarter ended June 30, 2009, compared to 28% for the quarter ended June 30, 2008. Gross margin of the six months ended June 30, 2009 was 25% compared to 28% for the six months ended June 30, 2008. The decrease for the quarter and six months is primarily related to the strength of the dollar against the British pound and a change in product mix in the connection/protection segment. We do not engage in hedging to reduce the impact of currency fluctuations.

Operating expenses for the quarter ended June 30, 2009 remained generally constant from the same period in 2008. Operating expenses for the six months ended June 30, 2009 decreased $122,000 (4%) to $3,298,000 from $3,420,000 for the same period in 2008. The decrease results primarily from a reduction in advertising, overall cost cutting initiatives, and reduced research and development expenses offset in part by an increase in professional fees.

Interest expense (net of interest and other income) decreased by $161,000 for the quarter ended June 30, 2009 compared to the quarter ended June 30, 2008 and decreased by $723,000 for the six months ended June 30, 2009 as compared to the same period in 2008.