CONSOLIDATED STATEMENTS OF INCOME FOR THE YEAR ENDED DECEMBER 31, (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) 2003 2002 2001 Revenues $ 62,803 $ 59,533 $ 57,605 Cost of Goods Sold 40,564 39,236 35,777 Gross Profit 22,239 20,297 21,828 Operating Expenses: Selling 5,594 5,343 6,248 General and administrative 7,576 6,992 7,849 Research and development 2,146 2,180 1,911 15,316 14,515 16,008 Operating Income  6,923 5,782 5,820 Interest Income 69 78 77 Interest Expense (195) (432) (300) Other Income (Expense), net (26) 40 468 Income from Continuing Operations before Provision for Income Taxes 6,771 5,468 6,065 Income Tax Provision  (1,879) (1,403) (1,803) Income from Continuing Operations 4,892 4,065 4,262 Gain on Disposal of Discontinued Operations, net of tax  165 165 5,492 Cumulative Effect of Accounting Change, net of tax  — (1,641) — Net Income $ 5,057 $ 2,589 $ 9,754 Income Per Basic Share: Continuing operations $ 2.86 $ 2.37 $ 2.10 Discontinued operations .10 .10 2.70 Cumulative effect of accounting change — (.96) — Net Income Per Basic Share $ 2.96 $ 1.51 $ 4.80 Weighted Average Basic Shares Outstanding 1,711 1,711 2,033 Income Per Diluted Share: Continuing operations $ 2.66 $ 2.18 $ 1.88 Discontinued operations .09 .09 2.42 Cumulative effect of accounting change — (.88) — Net Income Per Diluted Share $ 2.75 $ 1.39 $ 4.30 Weighted Average Diluted Shares Outstanding 1,839 1,863 2,272 8 The accompanying notes are an integral part of these statements.