CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, (IN THOUSANDS) 2003 2002 2001 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 5,057 $ 2,589 $ 9,754 Adjustments to reconcile net income to net cash provided by operating activities: Cumulative effect of accounting change, net of tax — 1,641 — Gain on disposal of discontinued operations  (165) (165) (5,492) Depreciation and amortization 4,746 4,384 4,569 Deferred income taxes 1,639 366 316 Tax benefit related to stock plans 515 82 1,238 Other 34 127 (428) 11,826 9,024 9,957 Changes in operating assets and liabilities: Accounts receivable 495 838 (384) Inventories (1,003) 803 (1,004) Prepaid expenses 379 (810) (888) Other non-current assets 8 (240) 301 Accounts payable and accrued liabilities 1,008 (307) 934 Accrued income and other taxes (208) 750 (78) Other non-current liabilities 199 (190) (135) Net cash provided by continuing operations 12,704 9,868 8,703 Net cash provided by discontinued operations 165 165 165 12,869 10,033 8,868 CASH FLOWS FROM INVESTING ACTIVITIES: Property, plant and equipment additions (4,215) (3,279) (2,808) Patent sale — — 428 (4,215) (3,279) (2,380) CASH FLOWS FROM FINANCING ACTIVITIES: Net change in line of credit (6,050) (6,788) 9,725 Issuance of treasury stock 2,656 409 1,778 Purchase of treasury stock (4,909) (564) (17,608) Dividends paid (406) — — (8,709) (6,943) (6,105) NET CHANGE IN CASH AND CASH EQUIVALENTS (55) (189) 383 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 353 542 159 CASH AND CASH EQUIVALENTS, END OF YEAR $ 298 $ 353 $ 542 CASH PAID FOR: Interest $ 207 $ 418 $ 272 Income taxes (net of refunds) 554 (340) 1,217 The accompanying notes are an integral part of these statements. 10