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   <TITLE>q12011earnings.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>
     <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; 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><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>May</FONT><FONT size=2> 11,&nbsp;2011</FONT></FONT></FONT></DIV>
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     <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>
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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: 'Arial'" size=1 face=Arial>(Exact name of registrant as specified in its charter)</FONT></DIV>
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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>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>
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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>
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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>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="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>
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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>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>
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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>
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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, 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&#146;s telephone number, including area code)</FONT></DIV>
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<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>
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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>
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<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 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">May 11</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 <FONT face="Times New Roman">ended March&nbsp;31, 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">May</FONT> <FONT size=2 face="Times New Roman">11</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"><B>SIGNATURES</B></FONT></P>
<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="14%" align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif"><FONT size=2 face="Times New Roman">May 12</FONT>, 2011</FONT></TD>
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     <TD style="BORDER-BOTTOM: #000000 1px solid" width="43%" 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="43%" align=left><FONT size=2 face="Times New Roman">John M. Slusser</FONT></TD>
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     <TD width="14%" align=left>&nbsp; </TD>
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     <TD width="43%" 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="14%" 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">May 12</FONT></FONT>, 2011</FONT></TD>
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     <TD style="BORDER-BOTTOM: #000000 1px solid" width="43%" 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="43%" align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Dorrance W. Lamb</FONT> </TD>
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     <TD width="43%" 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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     <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 First Quarter 2011 Financial Results</FONT></B></P>
<P style="TEXT-INDENT: 30px; MARGIN-LEFT: 30px" align=left><FONT style="FONT-SIZE: 10pt" face="Times New Roman">ROCHESTER, NY &#150; </FONT><FONT style="FONT-SIZE: 10pt" face="Times New Roman">May 11, 2011 </FONT><FONT style="FONT-SIZE: 10pt" face="Times New Roman">-- PT (NASDAQ: PTIX), the recently rebranded Performance Technologies, a leading global provider of advanced network communications solutions, today announced its financial results for the first quarter 201</FONT><FONT style="FONT-SIZE: 10pt" face="Times New Roman">1</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 first quarter 2011 amounted to $9.7 million, compared to $7.4 million in the first quarter 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 first quarter 2011 amounted to ($1.1 million), or ($.10) per basic share, based on 11.1 million shares outstanding, including restructuring charges of $.01 per share and stock compensation expense of $.01 per share. The GAAP net loss in the first quarter 2010 amounted to ($1.9 million), or ($.17) per basic share, including restructuring charges of $.01 per share and stock 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">On a non-GAAP basis, the net loss in the first quarter 2011 amounted to ($0.3 million), or ($.03) per basic share, compared to a net loss of ($1.5 million), or ($.14) per basic share in the first quarter 2010. Please refer to the reconciliations 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 March 31, 2011, the Company's working capital position was $18.4 million including cash and investments amounting to $10.8 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">&#147;While we are disappointed that our first quarter results still show a net loss, there are certainly many encouraging signs for PT," said John Slusser, president and chief executive officer. "Our first quarter acquisition of the former Nortel signaling technologies from GENBAND, along with our strategic alliance with this growing and exciting company, are already bearing fruit and contributing meaningfully to PT's operations. We have now substantially completed transferring our San Luis Obispo engineering projects to our Rochester engineering staff and closed that facility. With this transfer, we now have, on a going forward basis, the full benefit from our expense reduction program announced last December. As we announced last quarter and as we see in this quarter's results, we expect that revenues in 2011 will begin to reflect growth generated by the investments we made over the past several years.&#148;</FONT></P>
<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">&#149; In January 2011, PT acquired specific signaling assets from GENBAND that included its Universal Signaling Point (USP) and SP2000 products and related intellectual property rights. In addition, PT has entered into a long-term agreement with GENBAND under which PT will provide GENBAND with development, support and maintenance of signaling solutions as integral elements of GENBAND's premier switching portfolio. </FONT></P>
<P style="TEXT-INDENT: 30px; MARGIN-LEFT: 30px" align=center>1</P>
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<P style="TEXT-INDENT: 0px; MARGIN-LEFT: 60px" align=left><FONT style="FONT-SIZE: 10pt" face="Times New Roman">&#149; During the first quarter, PT received and shipped an order amounting to nearly $3 million to supply SEGway&#153; Signaling solutions to a major international wireless carrier. Revenues from this order are anticipated to be recognized during the second half of 2011 as the solutions are installed.</FONT></P>
<P style="TEXT-INDENT: 0px; MARGIN-LEFT: 60px" align=left><FONT style="FONT-SIZE: 10pt" face="Times New Roman">&#149; PT introduced its highest capacity STP and Signaling Gateway platform to date, the SEGway X401e. The latest addition to PT's signaling portfolio addresses the challenges faced by large carriers planning to grow or migrate their networks to next-generation capability.</FONT></P>
<P style="TEXT-INDENT: 0px; MARGIN-LEFT: 60px" align=left><FONT style="FONT-SIZE: 10pt" face="Times New Roman">&#149; PT received a Supplier Excellence Award for outstanding quality and performance by Raytheon Integrated Defense Systems. PT is a supplier to Raytheon of mission critical hardware and software to facilitate critical radar and data communications in the Shipboard Self Defense System (SSDS), Patriot Air and Missile Defense System, and Solipsys Meridian programs.</FONT></P>
<P style="TEXT-INDENT: 0px; MARGIN-LEFT: 30px" align=left><B><FONT style="FONT-SIZE: 10pt" face="Times New Roman">Business Overview: </FONT></B></P>
<P style="TEXT-INDENT: 30px; MARGIN-LEFT: 30px" align=left><FONT style="FONT-SIZE: 10pt" face="Times New Roman">The Company globally targets two primary vertical markets for its network communications products, namely telecommunications, and military, aerospace and government systems. The telecommunications market, historically our largest vertical market, is fundamentally driven by investments in network infrastructure by carriers and service providers. Telecommunications market revenues derived from our IPnexus&#174; Application-Ready Systems products, which are sold to OEMs, depend primarily on broad, multi-year deployments of next-generation telecommunications infrastructure. Telecommunications market revenues generated from Service Providers, purchasing our SEGway, Xpress&#153;, UPS and SP2000 product lines, result from investments necessary to support existing and evolving service demands such as text messaging and the transition to Internet-based communications networks. Sales into the military, aerospace and government systems market are typically to prime contractors and system integrators that reflect investment levels by various government agencies and military branches in specific programs and projects requiring enhanced communications capabilities. The timing of military, aerospace and government systems shipments for the most part is highly unpredictable.</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 carrier, 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 Company's entire line of offerings is anchored by IPnexus&#174;, 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&#174; development environment and rich suite of communications protocols (PT's Nexusware&#174;) of IPnexus Application-Ready Systems as a cornerstone component of their end product value proposition. PT's SEGway&#153; Signaling Solutions provide low cost, high density signaling, advanced routing, IP migration, gateway capabilities, SIP bridge, and core-to-edge distributed intelligence. The Company's Xpress&#153; 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, 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 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 developed technologies, (b) stock-based compensation, (c) acquisition costs, (d) restructuring costs, and (e) other legal costs. </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 Thursday, May 12, 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 May 12 through May 16, 2011. To access the recording, participants should dial (866) 245-6755 or (416) 915-1035 using passcode 921777. 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>
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     <TD colSpan=8 align=center><B>CONSOLIDATED BALANCE SHEETS</B></TD></TR>
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     <TD style="BORDER-BOTTOM: #000000 1pt solid" rowSpan=2 colSpan=3 align=center><B>March&nbsp;31,</B><BR>
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     <TD rowSpan=2 align=center></TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" rowSpan=2 colSpan=3 align=center><B>December 31,</B><BR>
<B>2010</B></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>&nbsp;</TD>
     <TD></TD></TR>
<TR vAlign=bottom>
     <TD style="BACKGROUND-COLOR: #80ffff" align=left>Current assets:&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=right></TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></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></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;Cash and cash equivalents&nbsp;</TD>
     <TD align=right>$</TD>
     <TD align=right>5,084,000</TD>
     <TD align=right></TD>
     <TD align=right></TD>
     <TD align=right>$</TD>
     <TD align=right>12,796,000</TD>
     <TD align=right></TD></TR>
<TR vAlign=bottom>
     <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp; &nbsp;Investments&nbsp;</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>&nbsp;</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>4,269,000</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>&nbsp;</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>3,753,000</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;Accounts receivable&nbsp;</TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right>8,242,000</TD>
     <TD align=right></TD>
     <TD align=right></TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right>5,478,000</TD>
     <TD align=right></TD></TR>
<TR vAlign=bottom>
     <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp; &nbsp;Inventories&nbsp;</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>&nbsp;</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>7,635,000</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>&nbsp;</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>7,787,000</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;&nbsp; Prepaid expenses and other assets&nbsp;</TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right>1,058,000</TD>
     <TD align=right></TD>
     <TD align=right></TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right>940,000</TD>
     <TD align=right></TD></TR>
<TR vAlign=bottom>
     <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;&nbsp; Prepaid income taxes</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>&nbsp;</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>110,000</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>&nbsp;</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>31,000</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;&nbsp; Fair value of foreign currency hedges&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>&nbsp;&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>&nbsp; </TD>
     <TD align=right></TD>
     <TD align=right></TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>&nbsp;&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>17,000</TD>
     <TD align=right></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 current assets&nbsp;</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>&nbsp;</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>26,398,000</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>&nbsp;</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>30,802,000</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD></TR>
<TR>
     <TD colSpan=7>&nbsp;</TD>
     <TD></TD></TR>
<TR vAlign=bottom>
     <TD style="BACKGROUND-COLOR: #80ffff" align=left>Investments&nbsp;</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>&nbsp;</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>1,441,000</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>&nbsp;</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>2,677,000</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD></TR>
<TR vAlign=bottom>
     <TD align=left>Property, equipment and improvements, net&nbsp;</TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right>2,629,000</TD>
     <TD align=right></TD>
     <TD align=right></TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right>2,162,000</TD>
     <TD align=right></TD></TR>
<TR vAlign=bottom>
     <TD style="BACKGROUND-COLOR: #80ffff" align=left>Software development costs, net</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>&nbsp;</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>4,053,000</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>&nbsp;</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>3,994,000</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD></TR>
<TR vAlign=bottom>
     <TD align=left>Purchased intangible assets, net</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right>&nbsp;5,264,000</TD>
     <TD align=right></TD>
     <TD align=right></TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right>805,000</TD>
     <TD align=right></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 assets&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>39,785,000</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD>
     <TD style="BORDER-BOTTOM: #000000 2pt double; BACKGROUND-COLOR: #80ffff" align=right>$</TD>
     <TD style="BORDER-BOTTOM: #000000 2pt double; BACKGROUND-COLOR: #80ffff" align=right>40,440,000</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD></TR></TABLE><BR>
<TABLE style="FONT-FAMILY: '''''''''''''''''''''''''''''''''''''Times New Roman'''''''''''''''''''''''''''''''''''''; FONT-SIZE: 9pt" border=0 cellSpacing=0 width="100%">
<TR>
     <TD width="75%"></TD>
     <TD width="1%"></TD>
     <TD width="9%"></TD>
     <TD width="1%"></TD>
     <TD width="3%"></TD>
     <TD width="1%"></TD>
     <TD width="9%"></TD>
     <TD width="1%"></TD></TR>
<TR vAlign=bottom>
     <TD style="BACKGROUND-COLOR: #80ffff" colSpan=8 align=center><B>LIABILITIES AND STOCKHOLDERS&#146; EQUITY</B></TD></TR>
<TR>
     <TD colSpan=8>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BACKGROUND-COLOR: #80ffff" align=left>Current liabilities:&nbsp;</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>&nbsp;</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=left></TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;Accounts payable&nbsp;</TD>
     <TD align=right>$</TD>
     <TD align=right>1,687,000</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>1,000,000</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 vAlign=bottom>
     <TD align=left>&nbsp;&nbsp;&nbsp;Accrued expenses&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right>5,299,000 </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;4,865,000</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>7,986,000</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>51,000</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>8,037,000</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&#146; 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>17,131,000</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>24,302,000</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></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&#146; equity&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>31,748,000</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&#146; 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>39,785,000</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"></FONT>&nbsp;</P>
<P align=center><FONT style="FONT-SIZE: 10pt" face="Times New Roman"></FONT>&nbsp;</P>
<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>
<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 colSpan=8 align=center><B>PERFORMANCE TECHNOLOGIES, INCORPORATED AND SUBSIDIARIES</B></TD></TR>
<TR vAlign=bottom>
     <TD colSpan=8 align=center><B>CONSOLIDATED STATEMENTS OF OPERATIONS</B></TD></TR>
<TR vAlign=bottom>
     <TD colSpan=8 align=center><B>(unaudited)</B></TD></TR>
<TR>
     <TD colSpan=7>&nbsp;</TD>
     <TD></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD rowSpan=2 colSpan=7 align=center><B>Three&nbsp;Months Ended</B><BR>
<B>March&nbsp;31,</B></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" colSpan=3 align=center><B>2011</B></TD>
     <TD align=right></TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" colSpan=3 align=center><B>2010</B></TD></TR>
<TR>
     <TD colSpan=7>&nbsp;</TD>
     <TD></TD></TR>
<TR vAlign=bottom>
     <TD bgColor=#80ffff align=left>Sales&nbsp;</TD>
     <TD bgColor=#80ffff align=right>$</TD>
     <TD bgColor=#80ffff align=right>9,672,000</TD>
     <TD bgColor=#80ffff align=left>&nbsp;</TD>
     <TD bgColor=#80ffff align=right></TD>
     <TD bgColor=#80ffff align=right>$</TD>
     <TD bgColor=#80ffff align=right>7,355,000</TD>
     <TD bgColor=#80ffff align=right></TD></TR>
<TR vAlign=bottom>
     <TD align=left>Cost of goods sold&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right>5,179,000</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right></TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right>3,457,000</TD>
     <TD align=right></TD></TR>
<TR vAlign=bottom>
     <TD bgColor=#80ffff align=left>Gross profit&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" bgColor=#80ffff align=right>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" bgColor=#80ffff align=right>4,493,000</TD>
     <TD bgColor=#80ffff align=left>&nbsp;</TD>
     <TD bgColor=#80ffff align=right></TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" bgColor=#80ffff align=right>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" bgColor=#80ffff align=right>3,898,000</TD>
     <TD bgColor=#80ffff align=right></TD></TR>
<TR>
     <TD colSpan=7>&nbsp;</TD>
     <TD></TD></TR>
<TR vAlign=bottom>
     <TD bgColor=#80ffff align=left>Operating expenses:&nbsp;</TD>
     <TD bgColor=#80ffff align=right>&nbsp;</TD>
     <TD bgColor=#80ffff align=left>&nbsp;</TD>
     <TD bgColor=#80ffff align=left>&nbsp;</TD>
     <TD bgColor=#80ffff align=right></TD>
     <TD bgColor=#80ffff align=right>&nbsp;</TD>
     <TD bgColor=#80ffff align=left>&nbsp;</TD>
     <TD bgColor=#80ffff align=left></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp;Selling and marketing&nbsp;</TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right>1,923,000</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right></TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right>2,373,000</TD>
     <TD align=right></TD></TR>
<TR vAlign=bottom>
     <TD bgColor=#80ffff align=left>&nbsp;&nbsp;&nbsp;Research and development&nbsp;</TD>
     <TD bgColor=#80ffff align=right>&nbsp;</TD>
     <TD bgColor=#80ffff align=right>2,180,000</TD>
     <TD bgColor=#80ffff align=left>&nbsp;</TD>
     <TD bgColor=#80ffff align=right></TD>
     <TD bgColor=#80ffff align=right>&nbsp;</TD>
     <TD bgColor=#80ffff align=right>1,990,000</TD>
     <TD bgColor=#80ffff align=right></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;&nbsp;&nbsp;General and administrative&nbsp;</TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right>1,492,000</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right></TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right>1,308,000</TD>
     <TD align=right></TD></TR>
<TR vAlign=bottom>
     <TD bgColor=#80ffff align=left>&nbsp;&nbsp; Restructuring charges&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" bgColor=#80ffff align=right>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" bgColor=#80ffff align=right>122,000</TD>
     <TD bgColor=#80ffff align=left></TD>
     <TD bgColor=#80ffff align=right></TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" bgColor=#80ffff align=right>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" bgColor=#80ffff align=right>63,000</TD>
     <TD bgColor=#80ffff align=right></TD></TR>
<TR vAlign=bottom>
     <TD 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 1pt solid" align=right>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right>5,717,000</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right></TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right>5,734,000</TD>
     <TD align=right></TD></TR>
<TR vAlign=bottom>
     <TD bgColor=#80ffff align=left>Loss from operations&nbsp;</TD>
     <TD bgColor=#80ffff align=right>&nbsp;</TD>
     <TD bgColor=#80ffff align=right>(1,224,000</TD>
     <TD bgColor=#80ffff align=left>)&nbsp;</TD>
     <TD bgColor=#80ffff align=right></TD>
     <TD bgColor=#80ffff align=right>&nbsp;</TD>
     <TD bgColor=#80ffff align=right>(1,836,000</TD>
     <TD bgColor=#80ffff align=left>)</TD></TR>
<TR>
     <TD colSpan=7>&nbsp;</TD>
     <TD></TD></TR>
<TR vAlign=bottom>
     <TD bgColor=#80ffff align=left>Other income, net&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" bgColor=#80ffff align=right>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" bgColor=#80ffff align=right>75,000</TD>
     <TD bgColor=#80ffff align=left>&nbsp;</TD>
     <TD bgColor=#80ffff align=right></TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" bgColor=#80ffff align=right>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" bgColor=#80ffff align=right>63,000</TD>
     <TD bgColor=#80ffff align=right></TD></TR>
<TR vAlign=bottom>
     <TD align=left>Loss before income taxes&nbsp;</TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right>(1,149,000</TD>
     <TD align=left>)&nbsp;</TD>
     <TD align=right></TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right>(1,773,000</TD>
     <TD align=left>)</TD></TR>
<TR>
     <TD bgColor=#80ffff colSpan=7>&nbsp;</TD>
     <TD bgColor=#80ffff></TD></TR>
<TR vAlign=bottom>
     <TD align=left>Income tax&nbsp;(benefit) provision</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right>(51,000</TD>
     <TD align=left>)&nbsp;</TD>
     <TD align=right></TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right>127,000</TD>
     <TD align=left></TD></TR>
<TR vAlign=bottom>
     <TD bgColor=#80ffff 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" bgColor=#80ffff align=right>$</TD>
     <TD style="BORDER-BOTTOM: #000000 2pt double" bgColor=#80ffff align=right>(1,098,000</TD>
     <TD bgColor=#80ffff vAlign=top align=left>)&nbsp;</TD>
     <TD bgColor=#80ffff align=right></TD>
     <TD style="BORDER-BOTTOM: #000000 2pt double" bgColor=#80ffff align=right>$</TD>
     <TD style="BORDER-BOTTOM: #000000 2pt double" bgColor=#80ffff align=right>(1,900,000</TD>
     <TD bgColor=#80ffff align=left>)</TD></TR>
<TR>
     <TD colSpan=7>&nbsp;</TD>
     <TD></TD></TR>
<TR>
     <TD bgColor=#80ffff colSpan=7>&nbsp;</TD>
     <TD bgColor=#80ffff></TD></TR>
<TR vAlign=bottom>
     <TD align=left>Basic loss per share&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 2pt double" align=right>$&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 2pt double" align=right>(.10</TD>
     <TD vAlign=top align=left>)&nbsp;</TD>
     <TD align=right></TD>
     <TD style="BORDER-BOTTOM: #000000 2pt double" align=right>$</TD>
     <TD style="BORDER-BOTTOM: #000000 2pt double" align=right>(.17</TD>
     <TD align=left>)</TD></TR>
<TR>
     <TD bgColor=#80ffff colSpan=7>&nbsp;</TD>
     <TD bgColor=#80ffff></TD></TR>
<TR vAlign=bottom>
     <TD align=left>Weighted average common shares&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 2pt double" align=right>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 2pt double" align=right>11,116,000</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right></TD>
     <TD style="BORDER-BOTTOM: #000000 2pt double" align=right>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 2pt double" align=right>11,116,000</TD>
     <TD 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>&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>
<P align=center>&nbsp;</P>
<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 colSpan=8 align=center><B>PERFORMANCE TECHNOLOGIES, INCORPORATED AND SUBSIDIARIES</B></TD></TR>
<TR vAlign=bottom>
     <TD colSpan=8 align=center><B>RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES</B></TD></TR>
<TR vAlign=bottom>
     <TD colSpan=8 align=center><B>(unaudited)</B></TD></TR>
<TR>
     <TD colSpan=7>&nbsp;</TD>
     <TD></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD rowSpan=2 colSpan=7 align=center><B>Three&nbsp;Months Ended</B><BR>
<B>March&nbsp;31,</B></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" colSpan=3 align=center><B>2011</B></TD>
     <TD align=right></TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" colSpan=3 align=center><B>2010</B></TD></TR>
<TR>
     <TD colSpan=7>&nbsp;</TD>
     <TD></TD></TR>
<TR vAlign=bottom>
     <TD align=left><B>Gross Profit Reconciliation</B></TD>
     <TD align=right></TD>
     <TD align=right></TD>
     <TD align=left></TD>
     <TD align=right></TD>
     <TD align=right></TD>
     <TD align=right></TD>
     <TD align=right></TD></TR>
<TR vAlign=bottom>
     <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp; GAAP gross profit&nbsp;</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>$</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>4,493,000</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>$</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>3,898,000</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;&nbsp;&nbsp;&nbsp; Amortization of purchased intangible assets (a)</TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right>255,000</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right></TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right></TD>
     <TD align=right></TD></TR>
<TR vAlign=bottom>
     <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;&nbsp;&nbsp;&nbsp; Stock-based compensation (b)</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" align=right>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" align=right>3,000</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=left></TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" align=right>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" align=right>7,000</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD></TR>
<TR vAlign=bottom>
     <TD 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" align=right>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>4,751,000</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=right></TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>3,905,000</TD>
     <TD align=right></TD></TR>
<TR vAlign=bottom>
     <TD style="BACKGROUND-COLOR: #80ffff" 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" align=right></TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>49.1</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=left>%</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>53.1</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>%</TD></TR></TABLE>
<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 align=left><B>&nbsp;</B></TD>
     <TD align=right></TD>
     <TD align=right>&nbsp;</TD>
     <TD align=left></TD>
     <TD align=right></TD>
     <TD align=right></TD>
     <TD align=right></TD>
     <TD align=right></TD></TR>
<TR vAlign=bottom>
     <TD align=left><B>Operating Expense Reconciliation</B></TD>
     <TD align=right></TD>
     <TD align=right></TD>
     <TD align=left></TD>
     <TD align=right></TD>
     <TD align=right></TD>
     <TD align=right></TD>
     <TD align=right></TD></TR>
<TR vAlign=bottom>
     <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp; GAAP operating expense</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>5,717,000</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>5,734,000</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;&nbsp;&nbsp;&nbsp; Stock-based compensation (b)</TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right>(86,000</TD>
     <TD align=left>)&nbsp;</TD>
     <TD align=right></TD>
     <TD align=right>&nbsp;</TD>
     <TD align=right>(151,000</TD>
     <TD align=left>)&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;&nbsp;&nbsp;&nbsp; Restructuring costs (c)</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>(122,000</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=left>)</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>(63,000</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=left>)</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other legal expenses&nbsp;(d)</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>(347,000</TD>
     <TD align=left>)</TD>
     <TD align=right></TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>(150,000</TD>
     <TD align=left>)</TD></TR>
<TR vAlign=bottom>
     <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; Non-GAAP operating expenses</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" align=right>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" align=right>5,162,000</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" align=right>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" align=right>5,370,000</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD></TR></TABLE>
<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 align=left><B>&nbsp;</B></TD>
     <TD align=right></TD>
     <TD align=right>&nbsp;</TD>
     <TD align=left></TD>
     <TD align=right></TD>
     <TD align=right></TD>
     <TD align=right></TD>
     <TD align=right></TD></TR>
<TR vAlign=bottom>
     <TD align=left><B>Net Loss Reconciliation</B></TD>
     <TD align=right></TD>
     <TD align=right></TD>
     <TD align=left></TD>
     <TD align=right></TD>
     <TD align=right></TD>
     <TD align=right></TD>
     <TD align=right></TD></TR>
<TR vAlign=bottom>
     <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp; GAAP net loss</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>(1,098,000</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=left>)&nbsp;</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>(1,900,000</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=left>)</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;&nbsp;&nbsp;&nbsp; Amortization of purchased intangible assets (a)</TD>
     <TD align=right></TD>
     <TD align=right>255,000</TD>
     <TD align=left></TD>
     <TD align=right></TD>
     <TD align=right></TD>
     <TD align=right></TD>
     <TD align=right></TD></TR>
<TR vAlign=bottom>
     <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;&nbsp;&nbsp;&nbsp; Stock-based compensation (b)</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>&nbsp;</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>89,000</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>&nbsp;</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right>158,000</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;&nbsp;&nbsp;&nbsp; Restructuring costs (c)</TD>
     <TD align=right></TD>
     <TD align=right>122,000</TD>
     <TD align=left></TD>
     <TD align=right></TD>
     <TD align=right></TD>
     <TD align=right>63,000</TD>
     <TD align=left></TD></TR>
<TR vAlign=bottom>
     <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other legal expenses&nbsp;(d)</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" align=right>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" align=right>347,000</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=left></TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" align=right>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" align=right>150,000</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=left></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; Non-GAAP net loss</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>$</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>(285,000</TD>
     <TD align=left>)&nbsp;</TD>
     <TD align=right></TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>$</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>(1,529,000</TD>
     <TD align=left>)</TD></TR></TABLE>
<TABLE style="FONT-FAMILY: '''''''''''''''''''''''''''''''''''''''''''Times New Roman'''''''''''''''''''''''''''''''''''''''''''; FONT-SIZE: 9pt" border=0 cellSpacing=0 width="100%">
<TR>
     <TD width="75%">
<P>&nbsp;</P>
</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 height=20>
     <TD align=left><B>Loss per Common Share</B></TD>
     <TD align=right></TD>
     <TD align=right></TD>
     <TD align=left></TD>
     <TD align=right></TD>
     <TD align=right></TD>
     <TD align=right></TD>
     <TD align=right></TD></TR>
<TR vAlign=bottom>
     <TD style="BACKGROUND-COLOR: #80ffff" align=left>&nbsp; GAAP basic net loss per common share</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" align=right>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" align=right>(0.10</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=left>)&nbsp;</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=right></TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" align=right>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #80ffff" align=right>(0.17</TD>
     <TD style="BACKGROUND-COLOR: #80ffff" align=left>)</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;&nbsp;Non-GAAP basic net loss per common share</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>$</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>(0.03</TD>
     <TD align=left>)&nbsp;</TD>
     <TD align=right></TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>$</TD>
     <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>(0.14</TD>
     <TD 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 value 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">&nbsp;(d)</FONT></SUP><FONT style="FONT-SIZE: 8pt" lang=EN-US face="Times New Roman">&nbsp; Other legal costs - expenses not indicative of core operating activities.</FONT></P>
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<P style="MARGIN: 0in 0in 0pt; page: WordSection1" align=center><FONT size=2>7</FONT></P>

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q12011earnings.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)
:
May
11, 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
May 11
, 2011, Performance Technologies, Incorporated
("PT")
issued a press release announcing its results of operations for the quarter
ended March 31, 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
May
11
, 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
May 12
, 2011
By /s/ John M. Slusser
John M. Slusser
President and Chief Executive Officer
May 12
, 2011
By /s/ Dorrance W. Lamb
Dorrance W. Lamb
Chief Financial Officer and Senior Vice President of Finance
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 First Quarter 2011 Financial Results
ROCHESTER, NY –
May 11, 2011
-- PT (NASDAQ: PTIX), the recently rebranded Performance Technologies, a leading global provider of advanced network communications solutions, today announced its financial results for the first quarter 201
1
.
Revenue in the first quarter 2011 amounted to $9.7 million, compared to $7.4 million in the first quarter 2010.
On the basis of generally accepted accounting principles (GAAP), the net loss in the first quarter 2011 amounted to ($1.1 million), or ($.10) per basic share, based on 11.1 million shares outstanding, including restructuring charges of $.01 per share and stock compensation expense of $.01 per share. The GAAP net loss in the first quarter 2010 amounted to ($1.9 million), or ($.17) per basic share, including restructuring charges of $.01 per share and stock compensation expense of $.01 per share, based on 11.1 million shares outstanding.
On a non-GAAP basis, the net loss in the first quarter 2011 amounted to ($0.3 million), or ($.03) per basic share, compared to a net loss of ($1.5 million), or ($.14) per basic share in the first quarter 2010. Please refer to the reconciliations between GAAP and non-GAAP financial measures contained in this release.
On March 31, 2011, the Company's working capital position was $18.4 million including cash and investments amounting to $10.8 million, and the Company had no long-term debt.
"While we are disappointed that our first quarter results still show a net loss, there are certainly many encouraging signs for PT," said John Slusser, president and chief executive officer. "Our first quarter acquisition of the former Nortel signaling technologies from GENBAND, along with our strategic alliance with this growing and exciting company, are already bearing fruit and contributing meaningfully to PT's operations. We have now substantially completed transferring our San Luis Obispo engineering projects to our Rochester engineering staff and closed that facility. With this transfer, we now have, on a going forward basis, the full benefit from our expense reduction program announced last December. As we announced last quarter and as we see in this quarter's results, we expect that revenues in 2011 will begin to reflect growth generated by the investments we made over the past several years."
Recent Highlights
• In January 2011, PT acquired specific signaling assets from GENBAND that included its Universal Signaling Point (USP) and SP2000 products and related intellectual property rights. In addition, PT has entered into a long-term agreement with GENBAND under which PT will provide GENBAND with development, support and maintenance of signaling solutions as integral elements of GENBAND's premier switching portfolio.
1
• During the first quarter, PT received and shipped an order amounting to nearly $3 million to supply SEGway™ Signaling solutions to a major international wireless carrier. Revenues from this order are anticipated to be recognized during the second half of 2011 as the solutions are installed.
• PT introduced its highest capacity STP and Signaling Gateway platform to date, the SEGway X401e. The latest addition to PT's signaling portfolio addresses the challenges faced by large carriers planning to grow or migrate their networks to next-generation capability.
• PT received a Supplier Excellence Award for outstanding quality and performance by Raytheon Integrated Defense Systems. PT is a supplier to Raytheon of mission critical hardware and software to facilitate critical radar and data communications in the Shipboard Self Defense System (SSDS), Patriot Air and Missile Defense System, and Solipsys Meridian programs.
Business Overview:
The Company globally targets two primary vertical markets for its network communications products, namely telecommunications, and military, aerospace and government systems. The telecommunications market, historically our largest vertical market, is fundamentally driven by investments in network infrastructure by carriers and service providers. Telecommunications market revenues derived from our IPnexus® Application-Ready Systems products, which are sold to OEMs, depend primarily on broad, multi-year deployments of next-generation telecommunications infrastructure. Telecommunications market revenues generated from Service Providers, purchasing our SEGway, Xpress™, UPS and SP2000 product lines, result from investments necessary to support existing and evolving service demands such as text messaging and the transition to Internet-based communications networks. Sales into the military, aerospace and government systems market are typically to prime contractors and system integrators that reflect investment levels by various government agencies and military branches in specific programs and projects requiring enhanced communications capabilities. The timing of military, aerospace and government systems shipments for the most part is highly unpredictable.
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 carrier, 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 Company's entire line of offerings is anchored by IPnexus®, 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 low cost, high density signaling, advanced routing, IP migration, gateway capabilities, SIP bridge, and core-to-edge distributed intelligence. 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, 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 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 developed technologies, (b) stock-based compensation, (c) acquisition costs, (d) restructuring costs, and (e) other legal costs.
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.
###
3
A conference call will be held on Thursday, May 12, 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 May 12 through May 16, 2011. To access the recording, participants should dial (866) 245-6755 or (416) 915-1035 using passcode 921777. 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.
4
PERFORMANCE TECHNOLOGIES, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)
ASSETS
March 31,
2011
December 31,
2010
Current assets:
Cash and cash equivalents
$
5,084,000
$
12,796,000
Investments
4,269,000
3,753,000
Accounts receivable
8,242,000
5,478,000
Inventories
7,635,000
7,787,000
Prepaid expenses and other assets
1,058,000
940,000
Prepaid income taxes
110,000
31,000
Fair value of foreign currency hedges
17,000
Total current assets
26,398,000
30,802,000
Investments
1,441,000
2,677,000
Property, equipment and improvements, net
2,629,000
2,162,000
Software development costs, net
4,053,000
3,994,000
Purchased intangible assets, net
5,264,000
805,000
Total assets
$
39,785,000
$
40,440,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
$
1,687,000
$
2,756,000
Other payable
1,000,000
Accrued expenses
5,299,000
4,865,000
Total current liabilities
7,986,000
7,621,000
Deferred income taxes
51,000
51,000
Total liabilities
8,037,000
7,672,000
Stockholders' equity:
Preferred stock
Common stock
133,000
133,000
Additional paid-in capital
17,131,000
17,042,000
Retained earnings
24,302,000
25,400,000
Accumulated other comprehensive income
11,000
Treasury stock
(9,818,000
)
(9,818,000
)
Total stockholders' equity
31,748,000
32,768,000
Total liabilities and stockholders' equity
$
39,785,000
$
40,440,000
5
PERFORMANCE TECHNOLOGIES, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended
March 31,
2011
2010
Sales
$
9,672,000
$
7,355,000
Cost of goods sold
5,179,000
3,457,000
Gross profit
4,493,000
3,898,000
Operating expenses:
Selling and marketing
1,923,000
2,373,000
Research and development
2,180,000
1,990,000
General and administrative
1,492,000
1,308,000
Restructuring charges
122,000
63,000
Total operating expenses
5,717,000
5,734,000
Loss from operations
(1,224,000
)
(1,836,000
)
Other income, net
75,000
63,000
Loss before income taxes
(1,149,000
)
(1,773,000
)
Income tax (benefit) provision
(51,000
)
127,000
Net loss
$
(1,098,000
)
$
(1,900,000
)
Basic loss per share
$
(.10
)
$
(.17
)
Weighted average common shares
11,116,000
11,116,000
6
PERFORMANCE TECHNOLOGIES, INCORPORATED AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(unaudited)
Three Months Ended
March 31,
2011
2010
Gross Profit Reconciliation
GAAP gross profit
$
4,493,000
$
3,898,000
Amortization of purchased intangible assets (a)
255,000
Stock-based compensation (b)
3,000
7,000
Non-GAAP gross profit
4,751,000
3,905,000
Non-GAAP gross profit percentage of sales
49.1
%
53.1
%
Operating Expense Reconciliation
GAAP operating expense
5,717,000
5,734,000
Stock-based compensation (b)
(86,000
)
(151,000
)
Restructuring costs (c)
(122,000
)
(63,000
)
Other legal expenses (d)
(347,000
)
(150,000
)
Non-GAAP operating expenses
5,162,000
5,370,000
Net Loss Reconciliation
GAAP net loss
(1,098,000
)
(1,900,000
)
Amortization of purchased intangible assets (a)
255,000
Stock-based compensation (b)
89,000
158,000
Restructuring costs (c)
122,000
63,000
Other legal expenses (d)
347,000
150,000
Non-GAAP net loss
$
(285,000
)
$
(1,529,000
)
Loss per Common Share
GAAP basic net loss per common share
(0.10
)
(0.17
)
Non-GAAP basic net loss per common share
$
(0.03
)
$
(0.14
)
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 value 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)
Other legal costs - expenses not indicative of core operating activities.
7