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   <TITLE>q32011earnings.htm - Generated by SEC Publisher for SEC Filing</TITLE>
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<P style="MARGIN-TOP: 3px; MARGIN-BOTTOM: 0px" align=center><FONT size=5 face="Times New Roman"><B>UNITED STATES </B></FONT></P>

<P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align=center><FONT size=5 face="Times New Roman"><B>SECURITIES AND EXCHANGE COMMISSION </B></FONT></P>

<P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align=center><FONT size=3 face="Times New Roman"><B>Washington, DC 20549 </B></FONT></P>

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   <TD width="32%" align=center>&nbsp;</TD>

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   <TD width="32%" align=center>&nbsp; </TD>

   <TD width="40%" align=center><B><FONT size=5 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">FORM 8-K</FONT></B></TD>

   <TD width="32%" align=center>&nbsp; </TD></TR>

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<DIV style="TEXT-INDENT: 0pt; DISPLAY: block">&nbsp;</DIV>

<DIV style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align=center><FONT style="DISPLAY: inline; FONT-FAMILY: '''''''''''''''''''''''''''Arial'''''''''''''''''''''''''''; FONT-SIZE: 14pt; FONT-WEIGHT: bold" face=Arial>CURRENT REPORT</FONT></DIV>

<DIV style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align=center><STRONG></STRONG>&nbsp;</DIV>

<DIV style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align=center><STRONG><FONT face=Arial>PURSUANT TO SECTION 13 OR 15(d) OF THE</FONT></STRONG></DIV>

<DIV style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align=center><STRONG><FONT face=Arial>SECURITIES EXCHANGE ACT OF 1934</FONT></STRONG>&nbsp;</DIV><STRONG></STRONG></DIV>

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<DIV style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align=center><BR>&nbsp;</DIV>

<DIV style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align=center><FONT style="DISPLAY: inline; FONT-FAMILY: Times New Roman, serif; FONT-SIZE: 12pt"><FONT size=2 face=Arial>Date of Report </FONT><FONT face=Arial><FONT size=1>(Date of earliest event reported)</FONT>:&nbsp;&nbsp;<FONT size=2 face=Arial>November 10</FONT><FONT size=2>,&nbsp;2011</FONT></FONT></FONT></DIV>

<DIV style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align=center>&nbsp;</DIV>

<DIV style="TEXT-INDENT: 0pt; DISPLAY: block"><BR>&nbsp;

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   <IMG border=0 src="ptlogo.gif" width=133 height=50> &nbsp;</P></TD>

   <TD width="65%" align=left><FONT style="FONT-SIZE: 16pt"><B><FONT style="FONT-SIZE: 14pt" face=Arial>PERFORMANCE TECHNOLOGIES, INCORPORATED</FONT></B></FONT></TD></TR></TABLE></DIV>

<DIV style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align=center><FONT style="DISPLAY: inline; FONT-FAMILY: 'Arial'" size=1 face=Arial></FONT>&nbsp;</DIV>

<DIV style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align=center><FONT style="DISPLAY: inline; FONT-FAMILY: 'Arial'" size=1 face=Arial>(Exact name of registrant as specified in its charter)</FONT></DIV>

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   <TD vAlign=bottom width="18%" align=left><FONT style="DISPLAY: inline; FONT-FAMILY: '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''times new roman'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''; FONT-SIZE: 8pt">&nbsp; </FONT></TD>

   <TD vAlign=bottom width="2%" align=left><FONT style="DISPLAY: inline; FONT-FAMILY: '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''times new roman'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''; FONT-SIZE: 8pt">&nbsp; </FONT></TD>

   <TD vAlign=bottom width="15%" align=left><FONT style="DISPLAY: inline; FONT-FAMILY: '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''times new roman'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''; FONT-SIZE: 8pt">&nbsp; </FONT></TD>

   <TD vAlign=bottom width="2%" align=left><FONT style="DISPLAY: inline; FONT-FAMILY: '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''times new roman'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''; FONT-SIZE: 8pt">&nbsp; </FONT></TD>

   <TD vAlign=bottom width="17%" align=left><FONT style="DISPLAY: inline; FONT-FAMILY: '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''times new roman'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''; FONT-SIZE: 8pt">&nbsp; </FONT></TD></TR>

<TR>

   <TD vAlign=top width="18%">

   <DIV style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align=center><FONT style="DISPLAY: inline; FONT-FAMILY: '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''times new roman'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''; FONT-SIZE: 10pt; FONT-WEIGHT: bold" face=Arial>Delaware</FONT></DIV>

   <DIV style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align=center><FONT style="DISPLAY: inline; FONT-FAMILY: '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''times new roman'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''" size=1 face=Arial>(State or other jurisdiction</FONT></DIV>

   <DIV style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align=center><FONT style="DISPLAY: inline; FONT-FAMILY: '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''times new roman'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''" size=1 face=Arial>of incorporation)</FONT></DIV></TD>

   <TD vAlign=bottom width="2%" align=left><FONT style="DISPLAY: inline; FONT-FAMILY: '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''times new roman'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''; FONT-SIZE: 8pt">&nbsp; </FONT></TD>

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   <DIV style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align=center><FONT style="DISPLAY: inline; FONT-FAMILY: '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''times new roman'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''; FONT-SIZE: 10pt; FONT-WEIGHT: bold" face=Arial>02-27460</FONT></DIV>

   <DIV style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align=center><FONT style="DISPLAY: inline; FONT-FAMILY: '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''times new roman'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''" size=1 face=Arial>(Commission</FONT></DIV>

   <DIV style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align=center><FONT style="DISPLAY: inline; FONT-FAMILY: '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''times new roman'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''" size=1 face=Arial>File Number)</FONT></DIV></TD>

   <TD vAlign=bottom width="2%" align=left><FONT style="DISPLAY: inline; FONT-FAMILY: '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''times new roman'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''; FONT-SIZE: 8pt">&nbsp; </FONT></TD>

   <TD vAlign=top width="17%">

   <DIV style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align=center><FONT style="DISPLAY: inline; FONT-FAMILY: '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''times new roman'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''; FONT-SIZE: 10pt; FONT-WEIGHT: bold" face=Arial>16-1158413</FONT></DIV>

   <DIV style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align=center><FONT style="DISPLAY: inline; FONT-FAMILY: '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''times new roman'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''" size=1 face=Arial>(IRS Employer</FONT></DIV>

   <DIV style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align=center><FONT style="DISPLAY: inline; FONT-FAMILY: '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''times new roman'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''" size=1 face=Arial>Identification No.)</FONT></DIV></TD></TR>

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   <TD vAlign=top width="18%"><FONT style="DISPLAY: inline; FONT-FAMILY: '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''times new roman'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''; FONT-SIZE: 8pt">&nbsp; </FONT></TD>

   <TD vAlign=bottom width="2%" align=left><FONT style="DISPLAY: inline; FONT-FAMILY: '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''times new roman'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''; FONT-SIZE: 8pt">&nbsp; </FONT></TD>

   <TD vAlign=top width="15%"><FONT style="DISPLAY: inline; FONT-FAMILY: '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''times new roman'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''; FONT-SIZE: 8pt">&nbsp; </FONT></TD>

   <TD vAlign=bottom width="2%" align=left><FONT style="DISPLAY: inline; FONT-FAMILY: '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''times new roman'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''; FONT-SIZE: 8pt">&nbsp; </FONT></TD>

   <TD vAlign=top width="17%"><FONT style="DISPLAY: inline; FONT-FAMILY: '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''times new roman'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''; FONT-SIZE: 8pt">&nbsp; </FONT></TD></TR>

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   <TD vAlign=top width="35%" colSpan=3>

   <DIV style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align=center><FONT style="DISPLAY: inline; FONT-FAMILY: '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''times new roman'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''; FONT-SIZE: 10pt; FONT-WEIGHT: bold" face=Arial>205 Indigo Creek Drive</FONT></DIV>

   <DIV style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align=center><FONT style="DISPLAY: inline; FONT-FAMILY: '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''times new roman'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''; FONT-SIZE: 10pt; FONT-WEIGHT: bold" face=Arial>&nbsp;Rochester, New York</FONT></DIV></TD>

   <TD vAlign=bottom width="2%" align=left><FONT style="DISPLAY: inline; FONT-FAMILY: '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''times new roman'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''; FONT-SIZE: 8pt">&nbsp; </FONT></TD>

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   <DIV style="TEXT-INDENT: 0pt; DISPLAY: block">&nbsp;</DIV>

   <DIV style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align=center><FONT style="DISPLAY: inline; FONT-FAMILY: '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''times new roman'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''; FONT-SIZE: 10pt; FONT-WEIGHT: bold" face=Arial>14626</FONT></DIV></TD></TR>

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   <DIV style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align=center><FONT style="DISPLAY: inline; FONT-FAMILY: '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''times new roman'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''" size=1 face=Arial>(Address of principal executive offices)</FONT></DIV></TD>

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   <DIV style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align=center><FONT style="DISPLAY: inline; FONT-FAMILY: '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''times new roman'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''" size=1 face=Arial>(Zip Code)</FONT></DIV></TD></TR></TABLE>

<P></P></DIV>

<DIV style="TEXT-INDENT: 0pt; DISPLAY: block"><BR></DIV>

<DIV style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align=center><FONT style="DISPLAY: inline; FONT-FAMILY: Times New Roman, serif; FONT-SIZE: 11pt; FONT-WEIGHT: bold" face=Arial>(585) 256-0200&nbsp;&nbsp;&nbsp; </FONT></DIV>

<DIV style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align=center><FONT style="DISPLAY: inline" size=1 face=Arial>(Registrant&#8217;s telephone number, including area code)</FONT></DIV>

<DIV style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align=justify>&nbsp;</DIV>

<DIV style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align=justify><FONT style="DISPLAY: inline" size=2 face=Arial>Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):</FONT></DIV>

<DIV style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align=justify>&nbsp;</DIV>

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   <DIV style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><FONT style="DISPLAY: inline; FONT-SIZE: 10pt" face="Times New Roman">[&nbsp;&nbsp;]</FONT></DIV></TD>

   <TD>

   <DIV align=justify><FONT style="DISPLAY: inline; FONT-FAMILY: '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''Times New Roman'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''; FONT-SIZE: 9pt" face=Arial>Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</FONT></DIV></TD></TR></TABLE></DIV>

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   <DIV style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><FONT style="DISPLAY: inline; FONT-FAMILY: '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''Times New Roman'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''; FONT-SIZE: 10pt" face=Arial>[&nbsp;&nbsp;]</FONT></DIV></TD>

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   <DIV align=justify><FONT style="DISPLAY: inline; FONT-FAMILY: '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''Times New Roman'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''; FONT-SIZE: 9pt" face=Arial>Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</FONT></DIV></TD></TR></TABLE></DIV>

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<P align=justify><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Item 2.02 Results of Operations and Financial Condition</FONT></B></P>

<P align=justify><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">On <FONT face="Times New Roman">November 10</FONT>, 2011, Performance Technologies, Incorporated <FONT size=2 face="Times New Roman">("PT") </FONT>issued a press release announcing its results of operations for the quarter and&nbsp;<FONT size=2 face="Times New Roman">nine</FONT> months <FONT face="Times New Roman">ended September 30, 2011</FONT>. A copy of the press release is being furnished as Exhibit 99.1 to this Form 8-K.</FONT></P>

<P align=justify><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(c) Exhibits.</FONT></P>

<P align=justify><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(99.1) Press release issued by PT on <FONT size=2 face="Times New Roman">November</FONT> <FONT size=2 face="Times New Roman">10</FONT>, 201<FONT size=2 face="Times New Roman">1</FONT>. </FONT></P>

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<P align=justify><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.</FONT></P>

<P align=justify><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></B></P>

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   <TD width="18%" align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif"><FONT size=2 face="Times New Roman">November 10</FONT>, 2011</FONT></TD>

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   <TD style="BORDER-BOTTOM: #000000 1px solid" width="45%" align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">By /s/ John M. Slusser</FONT>&nbsp; </TD>

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   <TD width="45%" align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">President and Chief Executive Officer</FONT>&nbsp; </TD>

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   <TD width="18%" align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif"><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif"><FONT size=2 face="Times New Roman">November 10</FONT></FONT>, 2011</FONT></TD>

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   <TD style="BORDER-BOTTOM: #000000 1px solid" width="45%" align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">By /s/ Dorrance W. Lamb</FONT>&nbsp; </TD>

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   <TD width="45%" align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Chief Financial Officer and Senior Vice President of Finance</FONT>&nbsp; </TD>

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<P style="TEXT-INDENT: 30px; MARGIN-LEFT: 30px" align=right><FONT style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><B>EXHIBIT 99.1</B></FONT></P>

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   <TD noWrap><B>For more information contact:</B><BR>Dorrance W. Lamb<BR>SVP and Chief Financial Officer<BR>PT<BR>585-256-0200 ext. 7276<BR>http://www.pt.com<BR><U><FONT color=#0000ff>finance@pt.com</FONT></U></TD></TR></TABLE></P>

<P style="TEXT-INDENT: 30px; MARGIN-LEFT: 30px" align=center><B><FONT style="FONT-SIZE: 10pt" face="Times New Roman">PT Announces&nbsp;Third Quarter 2011 Financial Results</FONT></B></P>

<P style="TEXT-INDENT: 30px; MARGIN-LEFT: 30px" align=center><STRONG><FONT size=2>"Earns $.07 per share for the quarter on a Non-GAAP Basis"</FONT></STRONG></P>

<P style="TEXT-INDENT: 30px; MARGIN-LEFT: 30px" align=left><FONT style="FONT-SIZE: 10pt" face="Times New Roman">ROCHESTER, NY &#8211; November</FONT><FONT style="FONT-SIZE: 10pt" face="Times New Roman"> 10, 2011 </FONT><FONT style="FONT-SIZE: 10pt" face="Times New Roman">-- PT (NASDAQ: PTIX), a leading global supplier of advanced network communications, today announced its unaudited financial results for the third quarter 2011</FONT><FONT style="FONT-SIZE: 10pt" face="Times New Roman">.&nbsp; </FONT></P>

<P style="TEXT-INDENT: 30px; MARGIN-LEFT: 30px" align=left><FONT style="FONT-SIZE: 10pt" face="Times New Roman">Revenue in the third quarter 2011 amounted to $9.0 million, compared to $6.3 million in the third quarter 2010. Revenue for the nine months ended September 30, 2011 amounted to $27.1 million, compared to $21.1 million during the corresponding period in 2010.</FONT></P>

<P style="TEXT-INDENT: 30px; MARGIN-LEFT: 30px" align=left><FONT style="FONT-SIZE: 10pt" face="Times New Roman">On the basis of generally accepted accounting principles (GAAP), the net loss in the third quarter 2011 amounted to ($.1 million), or ($.01) per basic share, including a restructuring charge of $.01 per share, an impairment charge of $.04 per share, amortization of purchased intangible assets of $.03 per share and stock-based compensation expense of $.01 per share, based on 11.1 million shares outstanding. The GAAP net loss in the third quarter 2010 amounted to ($2.9 million), or ($.26) per basic share, including litigation expenses of $.05 per share, a restructuring charge of $.01 per share and stock-based compensation expense of $.01 per share, based on 11.1 million shares outstanding.</FONT></P>

<P style="TEXT-INDENT: 30px; MARGIN-LEFT: 30px" align=left><FONT style="FONT-SIZE: 10pt" face="Times New Roman">The GAAP net loss for the nine months ended September 30, 2011 amounted to ($1.6 million), or ($.15) per basic share, including a restructuring charge of $.02 per share, an impairment charge of $.04 per share, amortization of purchased intangible assets of $.07 per share, litigation expenses of $.04 per share, and stock-based compensation of $.02 per share, based on 11.1 million shares outstanding. The GAAP net loss for the nine months ended September 30, 2010 amounted to ($6.8 million), or ($.61) per basic share, including litigation expenses of $.08 per share, a restructuring charge of $.02 per share, stock-based compensation of $.03 per share, and a discrete income tax provision of $.01 per share, based on 11.1 million shares outstanding.</FONT></P>

<P style="TEXT-INDENT: 30px; MARGIN-LEFT: 30px" align=left><FONT style="FONT-SIZE: 10pt" face="Times New Roman">On a non-GAAP basis, the Company had net income in the third quarter 2011 amounting to $.7 million, or $.07 per diluted share, compared to a net loss of ($2.2 million), or ($.20) per basic share in the third quarter 2010. The Company had net income on a non-GAAP basis for the nine months ended September 30, 2011 amounting to $.5 million, or $.04 per diluted share, compared to a net loss of ($5.4 million), or ($.48) per basic share in the nine months ended September 30, 2010. Please refer to the reconciliation between GAAP and non-GAAP financial measures contained in this release.</FONT></P>

<P style="TEXT-INDENT: 30px; MARGIN-LEFT: 30px" align=left><FONT style="FONT-SIZE: 10pt" face="Times New Roman">On September 30, 2011, the Company's working capital position was $18.3 million including cash and investments amounting to $12.4 million, and the Company had no long-term debt.</FONT></P>

<P style="TEXT-INDENT: 30px; MARGIN-LEFT: 30px" align=left><FONT style="FONT-SIZE: 10pt" face="Times New Roman">&#8220;While PT fell just short of breakeven for the quarter, we are pleased to report that we were solidly profitable on a non-GAAP basis,&#8221; said John Slusser, president and chief executive officer.&nbsp; </FONT><FONT style="FONT-SIZE: 10pt" face="Times New Roman">&#8220;</FONT><FONT style="FONT-SIZE: 10pt" face="Times New Roman">Returning to profitability is a fundamental objective for our management team. Our multi-pronged product initiatives coupled with our new sales alliances have driven a meaningful increase in year-over-year revenue and gross profit. In addition, our expense reduction initiatives are paying off. We are grateful for the continued patience of our shareholders and for the ingenuity and hard work of our PT team.&#8221;</FONT></P>

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<P style="TEXT-INDENT: 0px; MARGIN-LEFT: 30px" align=left><B><FONT style="FONT-SIZE: 10pt" face="Times New Roman">Recent Highlights</FONT></B></P>

<P style="TEXT-INDENT: 0px; MARGIN-LEFT: 60px" align=left><FONT style="FONT-SIZE: 10pt" face="Times New Roman">&#8226; In May 2011, PT announced a major international wireless carrier order amounting to nearly $3 million with Globacom, one of Africa's fastest growing mobile telecommunications companies. The Company recorded its first revenue from this order in the third quarter 2011 and expects the remainder of the order to be recognized in the fourth quarter 2011 and first quarter 2012. As part of this supply agreement, Globacom will be deploying PT's SEGway&#8482; Signaling solutions in Nigeria and Ghana and will include both Mobile Number Portability (MNP) and Short Message Service Defense (SMS-D) functions.</FONT></P>

<P style="TEXT-INDENT: 0px; MARGIN-LEFT: 60px" align=left><FONT style="FONT-SIZE: 10pt" face="Times New Roman">&#8226; In June 2011, PT announced a revolutionary new open-standards solution set, now named Monterey 8000. At the just concluded 2011 ATCA Summit in San Jose, California, PT was awarded "Best in Show-Hardware" for the Monterey 8000 product. First of its kind in the industry, the Monterey 8000 is an enhanced application-ready platform that combines compatibility with the latest MicroTCA.4 standard with superset extensions including 40GbE backplane performance and a doubling of the available power budget per blade to support the ever increasing demands of multi-core and special purpose processors.</FONT></P>

<P style="TEXT-INDENT: 0px; MARGIN-LEFT: 60px" align=left><FONT style="FONT-SIZE: 10pt" face="Times New Roman">&#8226; In early October, PT announced the addition of Xpress Telemarketer Guard&#8482; (TMG) to its Xpress suite of next-generation network solutions. TMG is an advanced software feature that enables residential subscribers to intercept and divert annoying telemarketing calls. TMG is expected to generate interest among service providers worldwide, and is already offered in a major carrier's North American network. </FONT></P>

<P style="TEXT-INDENT: 30px; MARGIN-LEFT: 30px" align=left><FONT style="FONT-SIZE: 10pt" face="Times New Roman">More in-depth discussions of the Company's strategy and financial performance can be found in the Company's periodic reports on Form 10-K and Form 10-Q, as filed with the Securities and Exchange Commission.</FONT></P>

<P style="TEXT-INDENT: 0px; MARGIN-LEFT: 30px" align=left><B><FONT style="FONT-SIZE: 10pt" face="Times New Roman">About PT (www.pt.com)</FONT></B></P>

<P style="TEXT-INDENT: 30px; MARGIN-LEFT: 30px" align=left><FONT style="FONT-SIZE: 10pt" face="Times New Roman">PT (NASDAQ: PTIX) is a global supplier of advanced network communications solutions to service provider, government, and OEM markets. PT's portfolio includes IP-centric network elements and applications designed for high availability, scalability, and long life cycle deployments. The industry-leading Monterey MicroTCA and IPnexus platforms anchor the company's broad range of offerings on PT's own IP-native, highly integrated platforms and element management systems. OEMs and application developers, including PT itself, leverage the robust carrier grade Linux development environment and rich suite of communications protocols (PT's NexusWare) of IPnexus Application-Ready Systems as a cornerstone component of their end product value proposition. PT's SEGway Signaling Solutions provide affordable, high density signaling, advanced routing for LTE and IMS applications, IP migration, gateway capabilities, SIP bridging, and core-to-edge distributed intelligence, as well as features such as Number Portability and SMS Spam Defense. The company's Xpress NGN applications enable evolving Mobile 2.0, Multi-media, and IMS based revenue-generating services. PT is headquartered in Rochester, NY and maintains sales and engineering offices around the world.</FONT></P>

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<P style="TEXT-INDENT: 0px; MARGIN-LEFT: 30px" align=left><B><FONT style="FONT-SIZE: 10pt" face="Times New Roman">Forward-Looking Statements</FONT></B></P>

<P style="TEXT-INDENT: 30px; MARGIN-LEFT: 30px" align=left><FONT style="FONT-SIZE: 10pt" face="Times New Roman">The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for certain forward-looking statements. This press release contains forward-looking statements which reflect the Company's current views with respect to future events and financial performance, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and is subject to the safe harbor provisions of those Sections. The Company's future operating results are subject to various risks and uncertainties and could differ materially from those discussed in the forward-looking statements and may be affected by various trends and factors which are beyond the Company's control. These risks and uncertainties include, among other factors, business and economic conditions, rapid technological changes accompanied by frequent new product introductions, competitive pressures, dependence on key customers, inability to gauge order flows from customers, fluctuations in quarterly and annual results, the reliance on a limited number of third party suppliers, limitations of PT's manufacturing capacity and arrangements, the protection of PT's proprietary technology, errors or defects in our products, the effects of pending or threatened litigation, the dependence on key personnel, changes in critical accounting estimates, potential impairments related to investments, foreign regulations, possible loss or significant curtailment of significant government contracts or subcontracts, and potential material weaknesses in internal control over financial reporting. In addition, during weak or uncertain economic periods, customers' visibility deteriorates causing delays in the placement of their orders. These factors often result in a substantial portion of PT's revenue being derived from orders placed within a quarter and shipped in the final month of the same quarter. Forward-looking statements should be read in conjunction with the most recent audited Consolidated Financial Statements, the Notes thereto, Risk Factors, and Management's Discussion and Analysis of Financial Condition and Results of Operations of the Company, as contained in the Company's Annual Report on Form 10-K, and other documents filed with the Securities and Exchange Commission.</FONT></P>

<P style="TEXT-INDENT: 0px; MARGIN-LEFT: 30px" align=left><B><FONT style="FONT-SIZE: 10pt" face="Times New Roman">Non-GAAP Financial Measures</FONT></B></P>

<P style="TEXT-INDENT: 30px; MARGIN-LEFT: 30px" align=left><FONT style="FONT-SIZE: 10pt" face="Times New Roman">As a supplement to the GAAP-based consolidated financial statements contained in this press release, the Company is providing a presentation of non-GAAP financial measures which can be useful to investors to gain an overall understanding of the Company's current financial performance. Specifically, the Company believes the non-GAAP financial measures provide useful information to investors by excluding certain expenses the Company believes are not indicative of its core operating results. The non-GAAP financial measures exclude certain expenses such as the effects of (a) amortization of purchased intangible assets, (b) stock-based compensation, (c) restructuring costs, (d) litigation costs, and (e) impairment charges. </FONT></P>

<P style="TEXT-INDENT: 30px; MARGIN-LEFT: 30px" align=left><FONT style="FONT-SIZE: 10pt" face="Times New Roman">Management utilizes a number of different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall performance of our business, in making operating decisions and forecasting and planning for future periods. We also consider the use of the non-GAAP financial measures to be helpful in assessing various aspects of our business operations.</FONT></P>

<P style="TEXT-INDENT: 30px; MARGIN-LEFT: 30px" align=left><FONT style="FONT-SIZE: 10pt" face="Times New Roman">Non-GAAP financial measures are not meant to be considered a substitute for the corresponding GAAP financial information and should not be considered in isolation from measures of financial performance prepared in accordance with GAAP. Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool and that these measures should only be used to evaluate the Company's results of operations in conjunction with the corresponding GAAP financial information.</FONT></P>

<P style="TEXT-INDENT: 30px; MARGIN-LEFT: 30px" align=left><FONT style="FONT-SIZE: 10pt" face="Times New Roman">A reconciliation of non-GAAP measures to GAAP measures is included herein.</FONT></P>

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<P style="TEXT-INDENT: 30px; MARGIN-LEFT: 30px" align=left><FONT style="FONT-SIZE: 10pt" face="Times New Roman">A conference call will be held on Friday, November 11, at 10:00 a.m., New York time, to discuss the results. All institutional investors can participate in the conference by dialing (866) 250-5144 or (416) 849-6163. The call will be available simultaneously for all other investors at (866) 494-3387 or (416) 915-1198. A digital recording of this conference call may be accessed immediately after its completion from November 11 through November 15, 2011. To access the recording, participants should dial (866) 245-6755 or (416) 915-1035 using passcode 967367. A live webcast of the conference call will be available on the PT website at www.pt.com and will be archived to the site within two hours after the completion of the call.</FONT></P>

<P style="TEXT-INDENT: 30px; MARGIN-LEFT: 30px" align=left><FONT style="FONT-SIZE: 10pt" face="Times New Roman">PT is a trademark of Performance Technologies, Inc. The names of actual companies, products, or services may be the trademarks, registered trademarks, or service marks of their respective owners in the United States and/or other countries.</FONT></P>

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   <TD width="100%" colSpan=8 align=center><B>PERFORMANCE TECHNOLOGIES, INCORPORATED AND SUBSIDIARIES</B></TD></TR>

<TR vAlign=bottom>

   <TD width="100%" colSpan=8 align=center><B>CONSOLIDATED BALANCE SHEETS</B></TD></TR>

<TR vAlign=bottom>

   <TD width="100%" colSpan=8 align=center><B>(unaudited)</B></TD></TR>

<TR>

   <TD width="99%" colSpan=7>&nbsp;</TD>

   <TD width="1%"></TD></TR>

<TR vAlign=bottom>

   <TD width="100%" colSpan=8 align=center><B>ASSETS</B></TD></TR>

<TR>

   <TD width="99%" colSpan=7>&nbsp;</TD>

   <TD width="1%"></TD></TR>

<TR vAlign=bottom>

   <TD width="73%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid" rowSpan=2 width="12%" colSpan=3 align=center><B>September 30,</B><BR><B>2011</B></TD>

   <TD rowSpan=2 width="3%" align=center></TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid" rowSpan=2 width="12%" colSpan=3 align=center><B>December 31,</B><BR><B>2010</B></TD></TR>

<TR vAlign=bottom>

   <TD width="73%" align=left>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=7>&nbsp;</TD>

   <TD width="1%"></TD></TR>

<TR vAlign=bottom>

   <TD style="BACKGROUND-COLOR: #80ffff" width="73%" align=left>Current assets:&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="10%" align=left>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="10%" align=left>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left></TD></TR>

<TR vAlign=bottom>

   <TD width="73%" align=left>&nbsp; &nbsp;Cash and cash equivalents&nbsp;</TD>

   <TD width="1%" align=right>$</TD>

   <TD width="10%" align=right>9,483,000</TD>

   <TD width="1%" align=right></TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right>$</TD>

   <TD width="10%" align=right>12,796,000</TD>

   <TD width="1%" align=right></TD></TR>

<TR vAlign=bottom>

   <TD style="BACKGROUND-COLOR: #80ffff" width="73%" align=left>&nbsp; &nbsp;Investments&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="10%" align=right>885,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="10%" align=right>3,753,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD></TR>

<TR vAlign=bottom>

   <TD width="73%" align=left>&nbsp; &nbsp;Accounts receivable&nbsp;</TD>

   <TD width="1%" align=right>&nbsp;</TD>

   <TD width="10%" align=right>8,023,000</TD>

   <TD width="1%" align=right></TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right>&nbsp;</TD>

   <TD width="10%" align=right>5,478,000</TD>

   <TD width="1%" align=right></TD></TR>

<TR vAlign=bottom>

   <TD style="BACKGROUND-COLOR: #80ffff" width="73%" align=left>&nbsp; &nbsp;Inventories&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="10%" align=right>6,106,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="10%" align=right>7,787,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD></TR>

<TR vAlign=bottom>

   <TD width="73%" align=left>&nbsp;&nbsp; Prepaid expenses and other assets&nbsp;</TD>

   <TD width="1%" align=right>&nbsp;</TD>

   <TD width="10%" align=right>1,208,000</TD>

   <TD width="1%" align=right></TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right>&nbsp;</TD>

   <TD width="10%" align=right>940,000</TD>

   <TD width="1%" align=right></TD></TR>

<TR vAlign=bottom>

   <TD style="BACKGROUND-COLOR: #80ffff" width="73%" align=left>&nbsp;&nbsp; Prepaid income taxes</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="10%" align=right>166,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="10%" align=right>31,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD></TR>

<TR vAlign=bottom>

   <TD width="73%" align=left>&nbsp;&nbsp; Fair value of foreign currency hedges&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=right>&nbsp;&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right>&nbsp; </TD>

   <TD width="1%" align=right></TD>

   <TD width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=right>&nbsp;&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right>17,000</TD>

   <TD width="1%" align=right></TD></TR>

<TR vAlign=bottom>

   <TD style="BACKGROUND-COLOR: #80ffff" width="73%" align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="10%" align=right>25,871,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="10%" align=right>30,802,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD></TR>

<TR>

   <TD width="99%" colSpan=7>&nbsp;</TD>

   <TD width="1%"></TD></TR>

<TR vAlign=bottom>

   <TD style="BACKGROUND-COLOR: #80ffff" width="73%" align=left>Investments&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="10%" align=right>2,054,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="10%" align=right>2,677,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD></TR>

<TR vAlign=bottom>

   <TD width="73%" align=left>Property, equipment and improvements, net&nbsp;</TD>

   <TD width="1%" align=right>&nbsp;</TD>

   <TD width="10%" align=right>2,002,000</TD>

   <TD width="1%" align=right></TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right>&nbsp;</TD>

   <TD width="10%" align=right>2,162,000</TD>

   <TD width="1%" align=right></TD></TR>

<TR vAlign=bottom>

   <TD style="BACKGROUND-COLOR: #80ffff" width="73%" align=left>Software development costs, net</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="10%" align=right>4,220,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="10%" align=right>3,995,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD></TR>

<TR vAlign=bottom>

   <TD width="73%" align=left>Purchased intangible assets, net</TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid" width="10%" align=right>&nbsp;4,660,000</TD>

   <TD width="1%" align=right></TD>

   <TD width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid" width="10%" align=right>804,000</TD>

   <TD width="1%" align=right></TD></TR>

<TR vAlign=bottom>

   <TD style="BACKGROUND-COLOR: #80ffff" width="73%" align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 2pt double; BACKGROUND-COLOR: #80ffff" width="1%" align=right>$</TD>

   <TD style="BORDER-BOTTOM: #000000 2pt double; BACKGROUND-COLOR: #80ffff" width="10%" align=right>38,807,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 2pt double; BACKGROUND-COLOR: #80ffff" width="1%" align=right>$</TD>

   <TD style="BORDER-BOTTOM: #000000 2pt double; BACKGROUND-COLOR: #80ffff" width="10%" align=right>40,440,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD></TR></TABLE><BR>

<TABLE style="FONT-FAMILY: '''''''''''''''''''''''''''''''''''''Times New Roman'''''''''''''''''''''''''''''''''''''; FONT-SIZE: 9pt" border=0 cellSpacing=0 width="100%">



<TR>

   <TD width="75%"></TD>

   <TD width="1%"></TD>

   <TD width="9%"></TD>

   <TD width="1%"></TD>

   <TD width="3%"></TD>

   <TD width="1%"></TD>

   <TD width="9%"></TD>

   <TD width="1%"></TD></TR>

<TR vAlign=bottom>

   <TD style="BACKGROUND-COLOR: #80ffff" colSpan=8 align=center><B>LIABILITIES AND STOCKHOLDERS&#8217; EQUITY</B></TD></TR>

<TR>

   <TD colSpan=8>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left>Current liabilities:&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=right>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp; &nbsp;Accounts payable&nbsp;</TD>

   <TD align=right>$</TD>

   <TD align=right>1,115,000</TD>

   <TD align=left></TD>

   <TD align=left>&nbsp;</TD>

   <TD align=left>$</TD>

   <TD align=right>2,756,000</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;&nbsp;&nbsp;Other payable</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=right>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=right>992,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;</TD></TR>

<TR height=20>

   <TD align=left>&nbsp;&nbsp; Deferred revenue</TD>

   <TD align=right></TD>

   <TD align=right>3,347,000</TD>

   <TD align=left></TD>

   <TD align=left></TD>

   <TD align=left></TD>

   <TD align=right>1,946,000</TD>

   <TD align=left></TD></TR>

<TR height=20>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;&nbsp; Accrued expenses</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=right>1,962,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=right>2,919,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;&nbsp; Fair value of foreign currency hedges&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right>115,000&nbsp;</TD>

   <TD align=left></TD>

   <TD align=left></TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right>&nbsp;</TD>

   <TD align=left></TD></TR>

<TR vAlign=bottom>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Total current liabilities&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=right>&nbsp;&nbsp;&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=right>7,531,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;&nbsp; </TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=right>7,621,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>Deferred income taxes</TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>82,000</TD>

   <TD align=left></TD>

   <TD align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>51,000</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid; BACKGROUND-COLOR: #80ffff" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" align=right>7,613,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid; BACKGROUND-COLOR: #80ffff" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" align=right>7,672,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;</TD></TR>

<TR>

   <TD colSpan=8>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left>Stockholders&#8217; equity:&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=right>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp; &nbsp;Preferred stock&nbsp;</TD>

   <TD align=right>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=left></TD>

   <TD align=left>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp; &nbsp;Common stock&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=right>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=right>133,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=right>133,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp; &nbsp;Additional paid-in capital&nbsp;</TD>

   <TD align=right>&nbsp;</TD>

   <TD align=right>17,276,000</TD>

   <TD align=left></TD>

   <TD align=left>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=right>17,042,000</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp; &nbsp;Retained earnings&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=right>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=right>23,764,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=right>25,400,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp; &nbsp;Accumulated other comprehensive income&nbsp;</TD>

   <TD align=right>&nbsp;</TD>

   <TD align=right>(161,000</TD>

   <TD align=left>)</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=right>11,000</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp; &nbsp;Treasury stock&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid; BACKGROUND-COLOR: #80ffff" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" align=right>(9,818,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left>)&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left></TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid; BACKGROUND-COLOR: #80ffff" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" align=right>(9,818,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left>)&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Total stockholders&#8217; equity&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>31,194,000</TD>

   <TD align=left></TD>

   <TD align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>32,768,000</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Total liabilities and stockholders&#8217; equity&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 2pt double; BACKGROUND-COLOR: #80ffff" align=right>$</TD>

   <TD style="BORDER-BOTTOM: #000000 2pt double; BACKGROUND-COLOR: #80ffff" align=right>38,807,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 2pt double; BACKGROUND-COLOR: #80ffff" align=left>$</TD>

   <TD style="BORDER-BOTTOM: #000000 2pt double; BACKGROUND-COLOR: #80ffff" align=right>40,440,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;</TD></TR>

<TR height=20>

   <TD align=left></TD>

   <TD align=right></TD>

   <TD align=right></TD>

   <TD align=left></TD>

   <TD align=left></TD>

   <TD align=left></TD>

   <TD align=right></TD>

   <TD align=left></TD></TR></TABLE>

<P align=center><FONT style="FONT-SIZE: 10pt" face="Times New Roman">5</FONT></P>

<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<A name="page_6"></A>&nbsp;

<TABLE style="FONT-FAMILY: '''''''''''''''''''''''''''''''''''''''''''Times New Roman'''''''''''''''''''''''''''''''''''''''''''; FONT-SIZE: 9pt" border=0 cellSpacing=0 width="100%">



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<TR vAlign=bottom>

   <TD width="100%" colSpan=16 align=center><B>PERFORMANCE TECHNOLOGIES, INCORPORATED AND SUBSIDIARIES</B></TD></TR>

<TR vAlign=bottom>

   <TD width="100%" colSpan=16 align=center><B>CONSOLIDATED STATEMENTS OF OPERATIONS</B></TD></TR>

<TR vAlign=bottom>

   <TD width="100%" colSpan=16 align=center><B>(unaudited)</B></TD></TR>

<TR>

   <TD width="99%" colSpan=15>&nbsp;</TD>

   <TD width="1%"></TD></TR>

<TR vAlign=bottom>

   <TD width="47%" align=left>&nbsp;</TD>

   <TD rowSpan=2 width="25%" colSpan=7 align=center><B></B><B></B><B></B><B></B><B></B><B></B><B><B>Three&nbsp;Months Ended</B><BR><B>September&nbsp;30,</B></B></TD>

   <TD rowSpan=2 width="3%" align=center><B></B></TD>

   <TD rowSpan=2 width="25%" colSpan=7 align=center><B>Nine&nbsp;Months Ended</B><BR><B>September&nbsp;30,</B></TD></TR>

<TR vAlign=bottom>

   <TD width="47%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="47%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" colSpan=3 align=center><B></B><B></B><B><B>2011</B></B></TD>

   <TD width="3%" align=center><B></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" colSpan=3 align=center><B></B><B></B><B>2010</B></TD>

   <TD width="3%" align=center><B></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid" width="11%" colSpan=3 align=center><B>2011</B></TD>

   <TD width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid" width="11%" colSpan=3 align=center><B>2010</B></TD></TR>

<TR>

   <TD width="99%" colSpan=15>&nbsp;</TD>

   <TD width="1%"></TD></TR>

<TR vAlign=bottom>

   <TD style="BACKGROUND-COLOR: #80ffff" width="47%" align=left>Sales&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right>$</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right>9,000,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right>$</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right>6,307,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right>$</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right>27,125,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right>$</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right>21,111,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD></TR>

<TR vAlign=bottom>

   <TD width="47%" align=left>Cost of goods sold&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right>4,454,000</TD>

   <TD width="1%" align=right></TD>

   <TD width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right>3,801,000</TD>

   <TD width="1%" align=right></TD>

   <TD width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid" width="9%" align=right>14,419,000</TD>

   <TD width="1%" align=left>&nbsp;</TD>

   <TD width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid" width="9%" align=right>11,428,000</TD>

   <TD width="1%" align=right></TD></TR>

<TR vAlign=bottom>

   <TD style="BACKGROUND-COLOR: #80ffff" width="47%" align=left>Gross profit&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="9%" align=right>4,546,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="9%" align=right>2,506,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid; BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid; BACKGROUND-COLOR: #80ffff" width="9%" align=right>12,706,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid; BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid; BACKGROUND-COLOR: #80ffff" width="9%" align=right>9,683,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD></TR>

<TR>

   <TD width="99%" colSpan=15>&nbsp;</TD>

   <TD width="1%"></TD></TR>

<TR vAlign=bottom>

   <TD style="BACKGROUND-COLOR: #80ffff" width="47%" align=left>Operating expenses:&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=left>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=left>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left></TD></TR>

<TR vAlign=bottom>

   <TD width="47%" align=left>&nbsp; &nbsp;Selling and marketing&nbsp;</TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right>1,585,000</TD>

   <TD width="1%" align=right></TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right>1,976,000</TD>

   <TD width="1%" align=right></TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right>&nbsp;</TD>

   <TD width="9%" align=right>4,966,000</TD>

   <TD width="1%" align=left>&nbsp;</TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right>&nbsp;</TD>

   <TD width="9%" align=right>6,383,000</TD>

   <TD width="1%" align=right></TD></TR>

<TR vAlign=bottom>

   <TD style="BACKGROUND-COLOR: #80ffff" width="47%" align=left>&nbsp;&nbsp;&nbsp;Research and development&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right>1,593,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right>1,827,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right>5,342,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right>5,709,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD></TR>

<TR vAlign=bottom>

   <TD width="47%" align=left>&nbsp;&nbsp;&nbsp;General and administrative&nbsp;</TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right>981,000</TD>

   <TD width="1%" align=right></TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right>1,661,000</TD>

   <TD width="1%" align=right></TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right>&nbsp;</TD>

   <TD width="9%" align=right>3,590,000</TD>

   <TD width="1%" align=left>&nbsp;</TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right>&nbsp;</TD>

   <TD width="9%" align=right>4,334,000</TD>

   <TD width="1%" align=right></TD></TR>

<TR height=20>

   <TD style="BACKGROUND-COLOR: #80ffff" width="47%" align=left>&nbsp;&nbsp; Impairment charge -&nbsp;vendor software</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right>400,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right>400,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD></TR>

<TR vAlign=bottom>

   <TD width="47%" align=left>&nbsp;&nbsp; Restructuring charges&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right>71,000</TD>

   <TD width="1%" align=right></TD>

   <TD width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=right>&nbsp;&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right>69,000</TD>

   <TD width="1%" align=right></TD>

   <TD width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid" width="9%" align=right>253,000</TD>

   <TD width="1%" align=left></TD>

   <TD width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid" width="9%" align=right>196,000</TD>

   <TD width="1%" align=right></TD></TR>

<TR vAlign=bottom>

   <TD style="BACKGROUND-COLOR: #80ffff" width="47%" align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total operating expenses&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="9%" align=right>4,630,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="9%" align=right>5,533,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid; BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid; BACKGROUND-COLOR: #80ffff" width="9%" align=right>14,551,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid; BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid; BACKGROUND-COLOR: #80ffff" width="9%" align=right>16,622,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD></TR>

<TR vAlign=bottom>

   <TD width="47%" align=left>Loss from operations&nbsp;</TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right>(84,000</TD>

   <TD width="1%" align=left>)</TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right>(3,027,000</TD>

   <TD width="1%" align=left>)</TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right>&nbsp;</TD>

   <TD width="9%" align=right>(1,845,000</TD>

   <TD width="1%" align=left>)&nbsp;</TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right>&nbsp;</TD>

   <TD width="9%" align=right>(6,939,000</TD>

   <TD width="1%" align=left>)</TD></TR>

<TR>

   <TD style="BACKGROUND-COLOR: #80ffff" width="99%" colSpan=15>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%"></TD></TR>

<TR vAlign=bottom>

   <TD width="47%" align=left>Other (expense) income, net&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right>(4,000</TD>

   <TD width="1%" align=right>)</TD>

   <TD width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right>65,000</TD>

   <TD width="1%" align=right></TD>

   <TD width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid" width="9%" align=right>86,000</TD>

   <TD width="1%" align=left>&nbsp;</TD>

   <TD width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid" width="9%" align=right>170,000</TD>

   <TD width="1%" align=right></TD></TR>

<TR vAlign=bottom>

   <TD style="BACKGROUND-COLOR: #80ffff" width="47%" align=left>Loss before income taxes&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right>(88,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left>)</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right>(2,962,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left>)</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right>(1,759,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left>)&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right>(6,769,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left>)</TD></TR>

<TR>

   <TD width="99%" colSpan=15>&nbsp;</TD>

   <TD width="1%"></TD></TR>

<TR vAlign=bottom>

   <TD style="BACKGROUND-COLOR: #80ffff" width="47%" align=left>Income tax&nbsp;(benefit) provision</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="9%" align=right>(2,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left>)</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="9%" align=right>(33,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left>)</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid; BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid; BACKGROUND-COLOR: #80ffff" width="9%" align=right>(123,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left>)&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid; BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid; BACKGROUND-COLOR: #80ffff" width="9%" align=right>20,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left></TD></TR>

<TR vAlign=bottom>

   <TD width="47%" align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net loss</TD>

   <TD style="BORDER-BOTTOM: #000000 2pt double" width="1%" align=right>$</TD>

   <TD style="BORDER-BOTTOM: #000000 2pt double" width="9%" align=right>(86,000</TD>

   <TD width="1%" align=right>)</TD>

   <TD width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 2pt double" width="1%" align=right>$</TD>

   <TD style="BORDER-BOTTOM: #000000 2pt double" width="9%" align=right>(2,929,000</TD>

   <TD width="1%" align=left>)</TD>

   <TD width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 2pt double" width="1%" align=right>$</TD>

   <TD style="BORDER-BOTTOM: #000000 2pt double" width="9%" align=right>(1,636,000</TD>

   <TD vAlign=top width="1%" align=left>)&nbsp;</TD>

   <TD width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 2pt double" width="1%" align=right>$</TD>

   <TD style="BORDER-BOTTOM: #000000 2pt double" width="9%" align=right>(6,789,000</TD>

   <TD width="1%" align=left>)</TD></TR>

<TR>

   <TD style="BACKGROUND-COLOR: #80ffff" width="99%" colSpan=15>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%"></TD></TR>

<TR>

   <TD width="99%" colSpan=15>&nbsp;</TD>

   <TD width="1%"></TD></TR>

<TR vAlign=bottom>

   <TD style="BACKGROUND-COLOR: #80ffff" width="47%" align=left>Basic loss per share&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 2pt double; BACKGROUND-COLOR: #80ffff" width="1%" align=right>$</TD>

   <TD style="BORDER-BOTTOM: #000000 2pt double; BACKGROUND-COLOR: #80ffff" width="9%" align=right>(.01</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left>)</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 2pt double; BACKGROUND-COLOR: #80ffff" width="1%" align=right>$</TD>

   <TD style="BORDER-BOTTOM: #000000 2pt double; BACKGROUND-COLOR: #80ffff" width="9%" align=right>(.26</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left>)</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 2pt double; BACKGROUND-COLOR: #80ffff" width="1%" align=right>$</TD>

   <TD style="BORDER-BOTTOM: #000000 2pt double; BACKGROUND-COLOR: #80ffff" width="9%" align=right>(.15</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" vAlign=top width="1%" align=left>)&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 2pt double; BACKGROUND-COLOR: #80ffff" width="1%" align=right>$</TD>

   <TD style="BORDER-BOTTOM: #000000 2pt double; BACKGROUND-COLOR: #80ffff" width="9%" align=right>(.61</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left>)</TD></TR>

<TR>

   <TD width="99%" colSpan=15>&nbsp;</TD>

   <TD width="1%"></TD></TR>

<TR vAlign=bottom>

   <TD style="BACKGROUND-COLOR: #80ffff" width="47%" align=left>Weighted average common shares&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 2pt double; BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 2pt double; BACKGROUND-COLOR: #80ffff" width="9%" align=right>11,116,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 2pt double; BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 2pt double; BACKGROUND-COLOR: #80ffff" width="9%" align=right>11,116,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 2pt double; BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 2pt double; BACKGROUND-COLOR: #80ffff" width="9%" align=right>11,116,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 2pt double; BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 2pt double; BACKGROUND-COLOR: #80ffff" width="9%" align=right>11,116,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD></TR></TABLE><BR>

<P align=center>&nbsp;</P>

<P align=center>&nbsp;</P>

<P align=center>&nbsp;</P>

<P align=center>&nbsp;</P>

<P align=center><FONT style="FONT-SIZE: 10pt" face="Times New Roman">6</FONT></P>

<DIV style="PAGE-BREAK-BEFORE: always">&nbsp;</DIV>

<TABLE style="FONT-FAMILY: '''''''''''''''''''''''''''''''''''''''''''Times New Roman'''''''''''''''''''''''''''''''''''''''''''; FONT-SIZE: 9pt" border=0 cellSpacing=0 width="100%">



<TR>

   <TD width="47%"></TD>

   <TD width="1%"></TD>

   <TD width="9%"></TD>

   <TD width="1%"></TD>

   <TD width="3%"></TD>

   <TD width="1%"></TD>

   <TD width="9%"></TD>

   <TD width="1%"></TD>

   <TD width="3%"></TD>

   <TD width="1%"></TD>

   <TD width="9%"></TD>

   <TD width="1%"></TD>

   <TD width="3%"></TD>

   <TD width="1%"></TD>

   <TD width="9%"></TD>

   <TD width="1%"></TD></TR>

<TR vAlign=bottom>

   <TD width="100%" colSpan=16 align=center><B>PERFORMANCE TECHNOLOGIES, INCORPORATED AND SUBSIDIARIES</B></TD></TR>

<TR vAlign=bottom>

   <TD width="100%" colSpan=16 align=center><B>RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES</B></TD></TR>

<TR vAlign=bottom>

   <TD width="100%" colSpan=16 align=center><B>(unaudited)</B></TD></TR>

<TR>

   <TD width="99%" colSpan=15>&nbsp;</TD>

   <TD width="1%"></TD></TR>

<TR vAlign=bottom>

   <TD width="47%" align=left>&nbsp;</TD>

   <TD rowSpan=2 width="25%" colSpan=7 align=center><B></B><B></B><B></B><B></B><B></B><B></B><B><B>Three&nbsp;Months Ended</B><BR><B>September&nbsp;30,</B></B></TD>

   <TD rowSpan=2 width="3%" align=center><B></B></TD>

   <TD rowSpan=2 width="25%" colSpan=7 align=center><B>Nine&nbsp;Months Ended</B><BR><B>September&nbsp;30,</B></TD></TR>

<TR vAlign=bottom>

   <TD width="47%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="47%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" colSpan=3 align=center><B></B><B></B><B>2011</B></TD>

   <TD width="3%" align=center><B></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" colSpan=3 align=center><B></B><B></B><B>2010</B></TD>

   <TD width="3%" align=center><B></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid" width="11%" colSpan=3 align=center><B>2011</B></TD>

   <TD width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1pt solid" width="11%" colSpan=3 align=center><B>2010</B></TD></TR>

<TR vAlign=bottom>

   <TD width="47%" align=left><B>Gross Profit Reconciliation</B></TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right></TD>

   <TD width="1%" align=left></TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right></TD>

   <TD width="1%" align=right></TD></TR>

<TR vAlign=bottom>

   <TD style="BACKGROUND-COLOR: #80ffff" width="47%" align=left>&nbsp; GAAP gross profit&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right>$</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right>4,546,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right>$</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right>2,506,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right>$</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right>12,706,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right>$</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right>9,683,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD></TR>

<TR vAlign=bottom>

   <TD width="47%" align=left>&nbsp;&nbsp;&nbsp;&nbsp; Amortization of purchased intangible assets (a)</TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right>280,000</TD>

   <TD width="1%" align=right></TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right>&nbsp;</TD>

   <TD width="9%" align=right>812,000</TD>

   <TD width="1%" align=left>&nbsp;</TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right>&nbsp;</TD>

   <TD width="9%" align=right></TD>

   <TD width="1%" align=right></TD></TR>

<TR vAlign=bottom>

   <TD style="BACKGROUND-COLOR: #80ffff" width="47%" align=left>&nbsp;&nbsp;&nbsp;&nbsp; Stock-based compensation (b)</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="9%" align=right>3,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="9%" align=right>4,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="9%" align=right>9,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="9%" align=right>17,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD></TR>

<TR vAlign=bottom>

   <TD width="47%" align=left>&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; Non-GAAP gross profit&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right>4,829,000</TD>

   <TD width="1%" align=right></TD>

   <TD width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right>2,510,000</TD>

   <TD width="1%" align=right></TD>

   <TD width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=right>&nbsp;&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right>13,527,000</TD>

   <TD width="1%" align=left>&nbsp;</TD>

   <TD width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=right>&nbsp; </TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right>9,700,000</TD>

   <TD width="1%" align=right></TD></TR>

<TR vAlign=bottom>

   <TD style="BACKGROUND-COLOR: #80ffff" width="47%" align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-GAAP gross profit percentage of sales&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right>53.7%</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right>39.8%</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right>49.9%</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right>45.9%</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD></TR>

<TR height=20>

   <TD width="47%" align=left></TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right></TD>

   <TD width="1%" align=left></TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right></TD>

   <TD width="1%" align=right></TD></TR>

<TR height=20>

   <TD style="BACKGROUND-COLOR: #80ffff" width="47%" align=left><B>Operating Expense Reconciliation</B></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD></TR>

<TR height=20>

   <TD width="47%" align=left>&nbsp; GAAP operating expense</TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right>4,630,000</TD>

   <TD width="1%" align=left></TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right>5,533,000</TD>

   <TD width="1%" align=right></TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right>14,551,000</TD>

   <TD width="1%" align=left></TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right>16,622,000</TD>

   <TD width="1%" align=right></TD></TR>

<TR height=20>

   <TD style="BACKGROUND-COLOR: #80ffff" width="47%" align=left>&nbsp;&nbsp;&nbsp;&nbsp; Stock-based compensation (b)</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right>(63,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left>)</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right>(67,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right>)</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right>(225,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left>)</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right>(341,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left>)</TD></TR>

<TR height=20>

   <TD width="47%" align=left>&nbsp;&nbsp;&nbsp;&nbsp; Restructuring costs (c)</TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right>(71,000</TD>

   <TD width="1%" align=left>)</TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right>(69,000</TD>

   <TD width="1%" align=right>)</TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right>(253,000</TD>

   <TD width="1%" align=left>)</TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right>(196,000</TD>

   <TD width="1%" align=left>)</TD></TR>

<TR height=20>

   <TD style="BACKGROUND-COLOR: #80ffff" width="47%" align=left>&nbsp;&nbsp;&nbsp;&nbsp; Litigation expenses (d)</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right>(563,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right>)</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right>(414,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left>)</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right>(863,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left>)</TD></TR>

<TR height=20>

   <TD width="47%" align=left>&nbsp;&nbsp;&nbsp;&nbsp; Impairment charge - vendor software (e)</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right>(400,000</TD>

   <TD width="1%" align=left>)</TD>

   <TD width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right>&nbsp;</TD>

   <TD width="1%" align=right></TD>

   <TD width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right>(400,000</TD>

   <TD width="1%" align=left>)</TD>

   <TD width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right>&nbsp;</TD>

   <TD width="1%" align=right></TD></TR>

<TR height=20>

   <TD style="BACKGROUND-COLOR: #80ffff" width="47%" align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-GAAP operating expenses</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="9%" align=right>4,096,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="9%" align=right>4,834,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="9%" align=right>13,259,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="9%" align=right>15,222,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD></TR>

<TR height=20>

   <TD width="47%" align=left></TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right></TD>

   <TD width="1%" align=left></TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right></TD>

   <TD width="1%" align=right></TD></TR>

<TR height=20>

   <TD style="BACKGROUND-COLOR: #80ffff" width="47%" align=left><B>Net Loss Reconciliation</B></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD></TR>

<TR height=20>

   <TD width="47%" align=left>

   <P>&nbsp; GAAP net loss</P></TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right>(86,000</TD>

   <TD width="1%" align=left>)</TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right>(2,929,000</TD>

   <TD width="1%" align=left>)</TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right>(1,636,000</TD>

   <TD width="1%" align=left>)</TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right>(6,789,000</TD>

   <TD width="1%" align=left>)</TD></TR>

<TR height=20>

   <TD style="BACKGROUND-COLOR: #80ffff" width="47%" align=left>&nbsp;&nbsp;&nbsp;&nbsp; Amortization of purchased intangible assets (a)</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right>280,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right>812,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD></TR>

<TR height=20>

   <TD width="47%" align=left>&nbsp;&nbsp;&nbsp;&nbsp; Stock-based compensation (b)</TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right>66,000</TD>

   <TD width="1%" align=right></TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right>71,000</TD>

   <TD width="1%" align=right></TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right>234,000</TD>

   <TD width="1%" align=left></TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right>358,000</TD>

   <TD width="1%" align=right></TD></TR>

<TR height=20>

   <TD style="BACKGROUND-COLOR: #80ffff" width="47%" align=left>&nbsp;&nbsp;&nbsp;&nbsp; Restructuring costs (c)</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right>71,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right>69,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right>253,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right>196,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD></TR>

<TR height=20>

   <TD width="47%" align=left>&nbsp;&nbsp;&nbsp;&nbsp; Litigation expenses (d)</TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right>&nbsp;</TD>

   <TD width="1%" align=right></TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right>563,000</TD>

   <TD width="1%" align=right></TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right>414,000</TD>

   <TD width="1%" align=left></TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right>863,000</TD>

   <TD width="1%" align=right></TD></TR>

<TR height=20>

   <TD style="BACKGROUND-COLOR: #80ffff" width="47%" align=left>&nbsp;&nbsp;&nbsp;&nbsp; Impairment charge -&nbsp;vendor software (e)</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="9%" align=right>400,000</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="9%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="9%" align=right>400,000</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="1%" align=left></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="1%" align=right>&nbsp;&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="9%" align=right>&nbsp;</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD></TR>

<TR height=20>

   <TD width="47%" align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-GAAP net income (loss)</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=right>$</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right>731,000</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=right>$</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right>(2,226,000</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=left>)</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=right>$</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right>477,000</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=left></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=right>$</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right>(5,372,000</TD>

   <TD width="1%" align=left>)</TD></TR>

<TR height=20>

   <TD style="BACKGROUND-COLOR: #80ffff" width="47%" align=left></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="9%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD></TR>

<TR height=20>

   <TD width="47%" align=left><B>Loss per Common Share</B></TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right></TD>

   <TD width="1%" align=left></TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right></TD>

   <TD width="1%" align=right></TD></TR>

<TR height=20>

   <TD style="BACKGROUND-COLOR: #80ffff" width="47%" align=left>&nbsp;&nbsp;&nbsp;&nbsp; GAAP basic net loss per share</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="1%" align=right>$</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="9%" align=right>(.01</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left>)</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="1%" align=right>$</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="9%" align=right>(.26</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left>)</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="1%" align=right>$</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="9%" align=right>(.15</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left>)</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="1%" align=right>$</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="9%" align=right>(.61</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left>)</TD></TR>

<TR height=20>

   <TD width="47%" align=left>

   <P>&nbsp;&nbsp;&nbsp;&nbsp; Non-GAAP basic and diluted (f) net income</P></TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right></TD>

   <TD width="1%" align=left></TD>

   <TD width="3%" align=right></TD>

   <TD width="1%" align=right></TD>

   <TD width="9%" align=right></TD>

   <TD width="1%" align=right></TD></TR>

<TR height=20>

   <TD style="BACKGROUND-COLOR: #80ffff" width="47%" align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (loss) per share</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="1%" align=right>$</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="9%" align=right>.07</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=right></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="1%" align=right>$</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="9%" align=right>(.20</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left>)</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="1%" align=right>$</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="9%" align=right>.04</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left></TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="3%" align=right></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="1%" align=right>$</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" width="9%" align=right>(.48</TD>

   <TD style="BACKGROUND-COLOR: #80ffff" width="1%" align=left>)</TD></TR></TABLE>

<P style="MARGIN: 0in 0in 0pt; page: WordSection1"><FONT style="FONT-SIZE: 10pt" lang=EN-US face="Times New Roman"></FONT>&nbsp;</P>

<P style="MARGIN: 0in 0in 0pt; page: WordSection1"><FONT style="FONT-SIZE: 8pt" lang=EN-US face="Times New Roman">The Non-GAAP measures above, and its reconciliation to our GAAP results for the periods presented, reflect adjustments relating to the following items: </FONT></P>

<P style="MARGIN: 0in 0in 0pt; page: WordSection1">&nbsp;</P>

<DIV style="page: WordSection1"><FONT style="FONT-SIZE: 10pt" lang=EN-US face=Arial,sans-serif><SUP><FONT style="FONT-SIZE: 8pt" face="Times New Roman">(a)&nbsp;&nbsp;&nbsp; </FONT></SUP><FONT style="FONT-SIZE: 8pt" face="Times New Roman">Amortization of purchased intangible assets</FONT></FONT> <FONT style="FONT-SIZE: 8pt" lang=EN-US face="Times New Roman">- a non-cash expense arising from the acquisition of intangible assets that the Company is required to amortize over their expected useful life. The&nbsp;amount of purchased intangible assets increased significantly as a result of the acquisition of the USP and SP2000 signaling technologies acquired from GENBAND.</FONT> </DIV>

<DIV style="page: WordSection1"><SUP><FONT style="FONT-SIZE: 8pt" lang=EN-US face="Times New Roman">(b)&nbsp;&nbsp;&nbsp; </FONT></SUP><FONT style="FONT-SIZE: 8pt" lang=EN-US face="Times New Roman">Stock-based compensation costs - a non-cash expense incurred in accordance with share-based compensation accounting guidance. </FONT></DIV>

<P style="MARGIN: 0in 0in 0pt; page: WordSection1"><SUP><FONT style="FONT-SIZE: 8pt" lang=EN-US face="Times New Roman">(c) </FONT></SUP><FONT style="FONT-SIZE: 8pt" lang=EN-US face="Times New Roman">&nbsp;&nbsp;&nbsp;Restructuring costs</FONT> <FONT style="FONT-SIZE: 8pt" lang=EN-US face="Times New Roman">- costs incurred as a result of restructuring activities taken to bring operating expenses more in line with expected revenues.&nbsp; </FONT></P>

<P style="MARGIN: 0in 0in 0pt; page: WordSection1"><SUP><FONT style="FONT-SIZE: 8pt" lang=EN-US face="Times New Roman">(d)</FONT></SUP><FONT style="FONT-SIZE: 8pt" lang=EN-US face="Times New Roman">&nbsp;&nbsp;&nbsp; Litigation expenses - legal expenses not indicative of core operating activities.</FONT></P>

<P style="MARGIN: 0in 0in 0pt; page: WordSection1"><SUP><FONT style="FONT-SIZE: 8pt" lang=EN-US face="Times New Roman">(e)</FONT></SUP><FONT style="FONT-SIZE: 8pt" lang=EN-US face="Times New Roman">&nbsp;&nbsp;&nbsp; Impairment charge -&nbsp;vendor software - One-time impairment charge recorded in connection with the termination of a marketing&nbsp;reseller agreement with a vendor, not indicative of core operating activities.</FONT></P>

<P style="MARGIN: 0in 0in 0pt; page: WordSection1"><SUP><FONT style="FONT-SIZE: 8pt" lang=EN-US face="Times New Roman">(f)</FONT></SUP><FONT style="FONT-SIZE: 8pt" lang=EN-US face="Times New Roman">&nbsp;&nbsp;&nbsp; Basic and diluted net income per common share are identical for the three and nine months ended September 30, 2011.</FONT></P>

<P style="MARGIN: 0in 0in 0pt; page: WordSection1">&nbsp;</P>

<P style="MARGIN: 0in 0in 0pt; page: WordSection1" align=center><FONT size=2>7</FONT></P>

</BODY>

</HTML>
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q32011earnings.htm - Generated by SEC Publisher for SEC Filing
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report
(Date of earliest event reported)
:
November 10
, 2011
PERFORMANCE TECHNOLOGIES, INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction
of incorporation)
02-27460
(Commission
File Number)
16-1158413
(IRS Employer
Identification No.)
205 Indigo Creek Drive
Rochester, New York
14626
(Address of principal executive offices)
(Zip Code)
(585) 256-0200
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):
[  ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]
P
re-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition
On
November 10
, 2011, Performance Technologies, Incorporated
("PT")
issued a press release announcing its results of operations for the quarter and
nine
months
ended September 30, 2011
. A copy of the press release is being furnished as Exhibit 99.1 to this Form 8-K.
(c) Exhibits.
(99.1) Press release issued by PT on
November
10
, 201
1
.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
PERFORMANCE TECHNOLOGIES, INCORPORATED
November 10
, 2011
By /s/ John M. Slusser
John M. Slusser
President and Chief Executive Officer
November 10
, 2011
By /s/ Dorrance W. Lamb
Dorrance W. Lamb
Chief Financial Officer and Senior Vice President of Finance
EXHIBIT 99.1
For more information contact:
Dorrance W. Lamb
SVP and Chief Financial Officer
PT
585-256-0200 ext. 7276
http://www.pt.com
finance@pt.com
PT Announces Third Quarter 2011 Financial Results
"Earns $.07 per share for the quarter on a Non-GAAP Basis"
ROCHESTER, NY – November
10, 2011
-- PT (NASDAQ: PTIX), a leading global supplier of advanced network communications, today announced its unaudited financial results for the third quarter 2011
.
Revenue in the third quarter 2011 amounted to $9.0 million, compared to $6.3 million in the third quarter 2010. Revenue for the nine months ended September 30, 2011 amounted to $27.1 million, compared to $21.1 million during the corresponding period in 2010.
On the basis of generally accepted accounting principles (GAAP), the net loss in the third quarter 2011 amounted to ($.1 million), or ($.01) per basic share, including a restructuring charge of $.01 per share, an impairment charge of $.04 per share, amortization of purchased intangible assets of $.03 per share and stock-based compensation expense of $.01 per share, based on 11.1 million shares outstanding. The GAAP net loss in the third quarter 2010 amounted to ($2.9 million), or ($.26) per basic share, including litigation expenses of $.05 per share, a restructuring charge of $.01 per share and stock-based compensation expense of $.01 per share, based on 11.1 million shares outstanding.
The GAAP net loss for the nine months ended September 30, 2011 amounted to ($1.6 million), or ($.15) per basic share, including a restructuring charge of $.02 per share, an impairment charge of $.04 per share, amortization of purchased intangible assets of $.07 per share, litigation expenses of $.04 per share, and stock-based compensation of $.02 per share, based on 11.1 million shares outstanding. The GAAP net loss for the nine months ended September 30, 2010 amounted to ($6.8 million), or ($.61) per basic share, including litigation expenses of $.08 per share, a restructuring charge of $.02 per share, stock-based compensation of $.03 per share, and a discrete income tax provision of $.01 per share, based on 11.1 million shares outstanding.
On a non-GAAP basis, the Company had net income in the third quarter 2011 amounting to $.7 million, or $.07 per diluted share, compared to a net loss of ($2.2 million), or ($.20) per basic share in the third quarter 2010. The Company had net income on a non-GAAP basis for the nine months ended September 30, 2011 amounting to $.5 million, or $.04 per diluted share, compared to a net loss of ($5.4 million), or ($.48) per basic share in the nine months ended September 30, 2010. Please refer to the reconciliation between GAAP and non-GAAP financial measures contained in this release.
On September 30, 2011, the Company's working capital position was $18.3 million including cash and investments amounting to $12.4 million, and the Company had no long-term debt.
"While PT fell just short of breakeven for the quarter, we are pleased to report that we were solidly profitable on a non-GAAP basis," said John Slusser, president and chief executive officer.
"
Returning to profitability is a fundamental objective for our management team. Our multi-pronged product initiatives coupled with our new sales alliances have driven a meaningful increase in year-over-year revenue and gross profit. In addition, our expense reduction initiatives are paying off. We are grateful for the continued patience of our shareholders and for the ingenuity and hard work of our PT team."
1
Recent Highlights
• In May 2011, PT announced a major international wireless carrier order amounting to nearly $3 million with Globacom, one of Africa's fastest growing mobile telecommunications companies. The Company recorded its first revenue from this order in the third quarter 2011 and expects the remainder of the order to be recognized in the fourth quarter 2011 and first quarter 2012. As part of this supply agreement, Globacom will be deploying PT's SEGway™ Signaling solutions in Nigeria and Ghana and will include both Mobile Number Portability (MNP) and Short Message Service Defense (SMS-D) functions.
• In June 2011, PT announced a revolutionary new open-standards solution set, now named Monterey 8000. At the just concluded 2011 ATCA Summit in San Jose, California, PT was awarded "Best in Show-Hardware" for the Monterey 8000 product. First of its kind in the industry, the Monterey 8000 is an enhanced application-ready platform that combines compatibility with the latest MicroTCA.4 standard with superset extensions including 40GbE backplane performance and a doubling of the available power budget per blade to support the ever increasing demands of multi-core and special purpose processors.
• In early October, PT announced the addition of Xpress Telemarketer Guard™ (TMG) to its Xpress suite of next-generation network solutions. TMG is an advanced software feature that enables residential subscribers to intercept and divert annoying telemarketing calls. TMG is expected to generate interest among service providers worldwide, and is already offered in a major carrier's North American network.
More in-depth discussions of the Company's strategy and financial performance can be found in the Company's periodic reports on Form 10-K and Form 10-Q, as filed with the Securities and Exchange Commission.
About PT (www.pt.com)
PT (NASDAQ: PTIX) is a global supplier of advanced network communications solutions to service provider, government, and OEM markets. PT's portfolio includes IP-centric network elements and applications designed for high availability, scalability, and long life cycle deployments. The industry-leading Monterey MicroTCA and IPnexus platforms anchor the company's broad range of offerings on PT's own IP-native, highly integrated platforms and element management systems. OEMs and application developers, including PT itself, leverage the robust carrier grade Linux development environment and rich suite of communications protocols (PT's NexusWare) of IPnexus Application-Ready Systems as a cornerstone component of their end product value proposition. PT's SEGway Signaling Solutions provide affordable, high density signaling, advanced routing for LTE and IMS applications, IP migration, gateway capabilities, SIP bridging, and core-to-edge distributed intelligence, as well as features such as Number Portability and SMS Spam Defense. The company's Xpress NGN applications enable evolving Mobile 2.0, Multi-media, and IMS based revenue-generating services. PT is headquartered in Rochester, NY and maintains sales and engineering offices around the world.
2
Forward-Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for certain forward-looking statements. This press release contains forward-looking statements which reflect the Company's current views with respect to future events and financial performance, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and is subject to the safe harbor provisions of those Sections. The Company's future operating results are subject to various risks and uncertainties and could differ materially from those discussed in the forward-looking statements and may be affected by various trends and factors which are beyond the Company's control. These risks and uncertainties include, among other factors, business and economic conditions, rapid technological changes accompanied by frequent new product introductions, competitive pressures, dependence on key customers, inability to gauge order flows from customers, fluctuations in quarterly and annual results, the reliance on a limited number of third party suppliers, limitations of PT's manufacturing capacity and arrangements, the protection of PT's proprietary technology, errors or defects in our products, the effects of pending or threatened litigation, the dependence on key personnel, changes in critical accounting estimates, potential impairments related to investments, foreign regulations, possible loss or significant curtailment of significant government contracts or subcontracts, and potential material weaknesses in internal control over financial reporting. In addition, during weak or uncertain economic periods, customers' visibility deteriorates causing delays in the placement of their orders. These factors often result in a substantial portion of PT's revenue being derived from orders placed within a quarter and shipped in the final month of the same quarter. Forward-looking statements should be read in conjunction with the most recent audited Consolidated Financial Statements, the Notes thereto, Risk Factors, and Management's Discussion and Analysis of Financial Condition and Results of Operations of the Company, as contained in the Company's Annual Report on Form 10-K, and other documents filed with the Securities and Exchange Commission.
Non-GAAP Financial Measures
As a supplement to the GAAP-based consolidated financial statements contained in this press release, the Company is providing a presentation of non-GAAP financial measures which can be useful to investors to gain an overall understanding of the Company's current financial performance. Specifically, the Company believes the non-GAAP financial measures provide useful information to investors by excluding certain expenses the Company believes are not indicative of its core operating results. The non-GAAP financial measures exclude certain expenses such as the effects of (a) amortization of purchased intangible assets, (b) stock-based compensation, (c) restructuring costs, (d) litigation costs, and (e) impairment charges.
Management utilizes a number of different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall performance of our business, in making operating decisions and forecasting and planning for future periods. We also consider the use of the non-GAAP financial measures to be helpful in assessing various aspects of our business operations.
Non-GAAP financial measures are not meant to be considered a substitute for the corresponding GAAP financial information and should not be considered in isolation from measures of financial performance prepared in accordance with GAAP. Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool and that these measures should only be used to evaluate the Company's results of operations in conjunction with the corresponding GAAP financial information.
A reconciliation of non-GAAP measures to GAAP measures is included herein.
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3
A conference call will be held on Friday, November 11, at 10:00 a.m., New York time, to discuss the results. All institutional investors can participate in the conference by dialing (866) 250-5144 or (416) 849-6163. The call will be available simultaneously for all other investors at (866) 494-3387 or (416) 915-1198. A digital recording of this conference call may be accessed immediately after its completion from November 11 through November 15, 2011. To access the recording, participants should dial (866) 245-6755 or (416) 915-1035 using passcode 967367. A live webcast of the conference call will be available on the PT website at www.pt.com and will be archived to the site within two hours after the completion of the call.
PT is a trademark of Performance Technologies, Inc. The names of actual companies, products, or services may be the trademarks, registered trademarks, or service marks of their respective owners in the United States and/or other countries.
4
PERFORMANCE TECHNOLOGIES, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)
ASSETS
September 30,
2011
December 31,
2010
Current assets:
Cash and cash equivalents
$
9,483,000
$
12,796,000
Investments
885,000
3,753,000
Accounts receivable
8,023,000
5,478,000
Inventories
6,106,000
7,787,000
Prepaid expenses and other assets
1,208,000
940,000
Prepaid income taxes
166,000
31,000
Fair value of foreign currency hedges
17,000
Total current assets
25,871,000
30,802,000
Investments
2,054,000
2,677,000
Property, equipment and improvements, net
2,002,000
2,162,000
Software development costs, net
4,220,000
3,995,000
Purchased intangible assets, net
4,660,000
804,000
Total assets
$
38,807,000
$
40,440,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
$
1,115,000
$
2,756,000
Other payable
992,000
Deferred revenue
3,347,000
1,946,000
Accrued expenses
1,962,000
2,919,000
Fair value of foreign currency hedges
115,000
Total current liabilities
7,531,000
7,621,000
Deferred income taxes
82,000
51,000
Total liabilities
7,613,000
7,672,000
Stockholders' equity:
Preferred stock
Common stock
133,000
133,000
Additional paid-in capital
17,276,000
17,042,000
Retained earnings
23,764,000
25,400,000
Accumulated other comprehensive income
(161,000
)
11,000
Treasury stock
(9,818,000
)
(9,818,000
)
Total stockholders' equity
31,194,000
32,768,000
Total liabilities and stockholders' equity
$
38,807,000
$
40,440,000
5
PERFORMANCE TECHNOLOGIES, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2011
2010
2011
2010
Sales
$
9,000,000
$
6,307,000
$
27,125,000
$
21,111,000
Cost of goods sold
4,454,000
3,801,000
14,419,000
11,428,000
Gross profit
4,546,000
2,506,000
12,706,000
9,683,000
Operating expenses:
Selling and marketing
1,585,000
1,976,000
4,966,000
6,383,000
Research and development
1,593,000
1,827,000
5,342,000
5,709,000
General and administrative
981,000
1,661,000
3,590,000
4,334,000
Impairment charge - vendor software
400,000
400,000
Restructuring charges
71,000
69,000
253,000
196,000
Total operating expenses
4,630,000
5,533,000
14,551,000
16,622,000
Loss from operations
(84,000
)
(3,027,000
)
(1,845,000
)
(6,939,000
)
Other (expense) income, net
(4,000
)
65,000
86,000
170,000
Loss before income taxes
(88,000
)
(2,962,000
)
(1,759,000
)
(6,769,000
)
Income tax (benefit) provision
(2,000
)
(33,000
)
(123,000
)
20,000
Net loss
$
(86,000
)
$
(2,929,000
)
$
(1,636,000
)
$
(6,789,000
)
Basic loss per share
$
(.01
)
$
(.26
)
$
(.15
)
$
(.61
)
Weighted average common shares
11,116,000
11,116,000
11,116,000
11,116,000
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PERFORMANCE TECHNOLOGIES, INCORPORATED AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2011
2010
2011
2010
Gross Profit Reconciliation
GAAP gross profit
$
4,546,000
$
2,506,000
$
12,706,000
$
9,683,000
Amortization of purchased intangible assets (a)
280,000
812,000
Stock-based compensation (b)
3,000
4,000
9,000
17,000
Non-GAAP gross profit
4,829,000
2,510,000
13,527,000
9,700,000
Non-GAAP gross profit percentage of sales
53.7%
39.8%
49.9%
45.9%
Operating Expense Reconciliation
GAAP operating expense
4,630,000
5,533,000
14,551,000
16,622,000
Stock-based compensation (b)
(63,000
)
(67,000
)
(225,000
)
(341,000
)
Restructuring costs (c)
(71,000
)
(69,000
)
(253,000
)
(196,000
)
Litigation expenses (d)
(563,000
)
(414,000
)
(863,000
)
Impairment charge - vendor software (e)
(400,000
)
(400,000
)
Non-GAAP operating expenses
4,096,000
4,834,000
13,259,000
15,222,000
Net Loss Reconciliation
GAAP net loss
(86,000
)
(2,929,000
)
(1,636,000
)
(6,789,000
)
Amortization of purchased intangible assets (a)
280,000
812,000
Stock-based compensation (b)
66,000
71,000
234,000
358,000
Restructuring costs (c)
71,000
69,000
253,000
196,000
Litigation expenses (d)
563,000
414,000
863,000
Impairment charge - vendor software (e)
400,000
400,000
Non-GAAP net income (loss)
$
731,000
$
(2,226,000
)
$
477,000
$
(5,372,000
)
Loss per Common Share
GAAP basic net loss per share
$
(.01
)
$
(.26
)
$
(.15
)
$
(.61
)
Non-GAAP basic and diluted (f) net income
(loss) per share
$
.07
$
(.20
)
$
.04
$
(.48
)
The Non-GAAP measures above, and its reconciliation to our GAAP results for the periods presented, reflect adjustments relating to the following items:
(a)
Amortization of purchased intangible assets
- a non-cash expense arising from the acquisition of intangible assets that the Company is required to amortize over their expected useful life. The amount of purchased intangible assets increased significantly as a result of the acquisition of the USP and SP2000 signaling technologies acquired from GENBAND.
(b)
Stock-based compensation costs - a non-cash expense incurred in accordance with share-based compensation accounting guidance.
(c)
Restructuring costs
- costs incurred as a result of restructuring activities taken to bring operating expenses more in line with expected revenues.
(d)
Litigation expenses - legal expenses not indicative of core operating activities.
(e)
Impairment charge - vendor software - One-time impairment charge recorded in connection with the termination of a marketing reseller agreement with a vendor, not indicative of core operating activities.
(f)
Basic and diluted net income per common share are identical for the three and nine months ended September 30, 2011.
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