2002 COGNIZANT FINANCIAL REVIEW Selected Consolidated Financial Data each of the years ended December 31, 1998 and 1999 are derived from the audited financial statements not included elsewhere herein. The selected consolidated financial information for 2000, 2001 and 2002 should be read in conjunction with the Consolidated Financial Statements and the Notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” which are included elsewhere in this Annual Report. The following table sets forth selected consolidated historical financial data of the Company as of the dates and for the periods indicated. The selected consolidated financial data set forth below for the Company as of December 31, 2001 and 2002 and for each of the three years in the period ended December 31, 2002 has been derived from the audited financial statements included elsewhere herein. The selected consolidated financial data set forth below for the Company as of December 31, 1998, 1999 and 2000 and for Year Ended December 31, (in thousands, except per share data) 1998 1999 2000 2001 2002 Consolidated Statement of Operations Data: Revenues $ 45,031 $ 74,084 $ 122,758 $ 158,969 $ 208,657 Revenues - related party 13,575 14,820 14,273 18,809 20,429 Total revenues 58,606 88,904 137,031 177,778 229,086 Cost of revenues 31,919 46,161 70,437 90,848 122,701 Gross profit 26,687 42,743 66,594 86,930 106,385 Selling, general and administrative expenses 15,547 23,061 35,959 44,942 53,345 Depreciation and amortization expense 2,222 3,037 4,507 6,368 7,842 Income from operations 8,918 16,645 26,128 35,620 45,198 Other income (expense): Interest income 638 1,263 2,649 2,501 1,808 Split-off costs – – – – (1,680) Impairment loss on investment – – – (1,955) – Other income (expense) - net 83 37 (530) (767) (235) Total other income (expense) 721 1,300 2,119 (221) (107) Income before provision for income taxes 9,639 17,945 28,247 35,399 45,091 Provision for income taxes (3,606) (6,711) (10,564) (13,239) (10,529) Net income $ 6,033 $ 11,234 $ 17,683 $ 22,160 $ 34,562 Net income per share, basic $ 0.13 $ 0.20 $ 0.32 $ 0.39 $ 0.58 Net income per share, diluted $ 0.12 $ 0.19 $ 0.29 $ 0.36 $ 0.54 Weighted average number of common shares outstanding 47,658 55,026 55,695 57,051 59,241 Weighted average number of common shares and stock options outstanding 49,614 58,248 60,768 61,113 63,693 Consolidated Statement of Financial Position Data: Cash and cash equivalents $ 28,418 $ 42,641 $ 61,976 $ 84,977 $1 26,211 Working capital 29,416 43,507 61,501 95,637 134,347 Total assets 51,679 69,026 109,540 144,983 231,473 Due to related party 9 – 8 – – Stockholders’ equity 32,616 45,461 66,116 98,792 165,481 40 galperin design, inc., nyc