Washington (State of Incorporation)

91-1011792 (I.R.S. Employer Identification Number)

				Page
Part 1:    FINANCIAL INFORMATION
Item 1:    FINANCIAL STATEMENTS (UNAUDITED)
		Condensed Consolidated Statements of Operations		1
		Condensed Consolidated Balance Sheets		2
		Condensed Consolidated Statements of Cash Flows		3
		NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
		Note 1:     Summary of Significant Accounting Policies		4
		Note 2:     Short-Term Investments		4
		Note 3:     Earnings Per Share and Capital Structure		5
		Note 4:     Balance Sheet Components		6
		Note 5:     Business Combination		6
		Note 6:     Segment Information		7
		Note 7:     Restructuring		8
		Note 8:     Contingencies		9
		Note 9:     Comprehensive Income		9
		Note 10:   Goodwill		9
		Note 11:   Identified Intangible Assets		10
		Note 12:   New Accounting Pronouncements		10
Item 2:     MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
		Certain Forward-Looking Statements		11
		RESULTS OF OPERATIONS		11
		Electric Systems		12
		Natural Gas Systems		12
		Water and Public Power Systems		12
		International Systems		12
		Bookings and Backlog		13
		Operating Expenses, excluding IPR&D and Restructurings		13
		Purchased In-Process Research and Development		14
		Other Income (Expense) and Income Taxes		14
		FCC Regulation and Allocation of Radio Frequencies		14
		FINANCIAL CONDITION
		Cash Flow Information		15
		New Accounting Pronouncements		16
		Business Outlook		17
Item 3:     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK				18
Part 2:    Other Information
Item 1:     Legal Proceedings				19
Item 4:     Submission of Matters to a Vote of Security Holders				19
Item 6:     Exhibits and Reports on Form 8-K				20
Signature				21

		Three months ended June 30,								Six months ended June 30,
		2002				2001				2002				2001
		(Unaudited, in thousands, except per share data)
Revenues
Sales		$	61,858			$	42,404			$	112,044			$	79,636
Service			10,581				10,610				22,470				20,849
Total revenues			72,439				53,014				134,514				100,485
Cost of revenues
Sales			31,580				23,584				57,123				45,105
Service			7,008				6,288				16,253				13,557
Total cost of revenues			38,588				29,872				73,376				58,662
Gross profit			33,851				23,142				61,138				41,823
Operating expenses
Sales and marketing			8,233				6,486				15,277				12,071
Product development			10,388				7,642				17,895				13,381
General and administrative			5,612				3,603				10,086				6,878
Amortization of intangibles			573				366				910				732
Restructurings			—				(807	)			—				(807	)
In-process research and development (IPR&D)			(200	)			—				7,200				—
Total operating expenses			24,606				17,290				51,368				32,255
Operating income			9,245				5,852				9,770				9,568
Other income (expense)
Equity in affiliates			50				(64	)			46				(41	)
Interest and other, net			705				(737	)			(128	)			(2,031	)
Total other income (expense)			755				(801	)			(82	)			(2,072	)
Income before income taxes			10,000				5,051				9,688				7,496
Income tax provision			(3,675	)			(1,893	)			(6,333	)			(2,849	)
Net income		$	6,325			$	3,158			$	3,355			$	4,647
Earnings per share
Basic net income per share		$	0.32			$	0.20			$	0.18			$	0.30
Diluted net income per share		$	0.28			$	0.18			$	0.17			$	0.27
Average number of shares outstanding
Basic			19,775				15,513				18,174				15,449
Diluted			22,672				18,716				20,051				18,137

		June 30, 2002				December 31, 2001
		(Unaudited, in thousands)
ASSETS
Current assets
Cash and cash equivalents		$	18,631			$	20,582
Short-term investments, available for sale			23,811				22,199
Accounts receivable, net			44,534				52,345
Inventories, net			20,252				16,281
Deferred income taxes, net			4,353				4,134
Other			3,305				1,192
Total current assets			114,886				116,733
Property, plant and equipment, net			28,032				25,918
Equipment used in outsourcing, net			12,242				12,918
Intangible assets, net			10,924				4,419
Goodwill, net			32,824				6,616
Restricted cash			—				5,100
Deferred income taxes, net			29,088				24,952
Other			7,943				6,035
Total assets		$	235,939			$	202,691
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses		$	24,564			$	24,689
Wages and benefits payable			11,041				11,611
Current portion of long-term debt			678				229
Deferred revenue			11,338				13,558
Total current liabilities			47,621				50,087