Mr. Schultz continued: “The restructuring we began in the third quarter of 2011 continued into January 2012. In January we implemented measures throughout the Company to better align the cost structure of our business to our market opportunities, including eliminating some general and administrative costs. The restructuring included an 8% reduction in our workforce. This enables us to better focus our resources on investments in product development and international expansion. Further, Austin Taylor, our UK operation, which has struggled with profitability in the last few years, has been significantly transformed and is now a part of our Suttle business unit, maintaining a number of strategic accounts and participating in Suttle’s initiatives to expand its global reach into Europe and the Middle East. We do not anticipate future losses from Austin Taylor’s operations.

“As we look ahead, we believe each of our three continuing business units is well positioned to meet the challenges of 2012. Our Suttle business has realigned its organization to improve margins and invest in additional engineering and sales resources. In 2011, we launched several new product initiatives for copper and fiber connectivity solutions, expanding Suttle’s reach in their existing customer base as well as adding new customers in Latin America, that we expect will contribute to our revenues in 2012. In addition, Suttle is introducing several innovative products to its customer base and these are planned to more than offset an anticipated decline in its legacy products.

“Our JDL business unit had a strong 2011, which included completing the installation of its record $18 million project for one of the largest school districts in the country. JDL is continuing to support this customer in new initiatives and, building on knowledge gained from its K-12 business, is actively marketing its IT capabilities to small to medium sized commercial businesses. Its focus is to enable customers to access their data anywhere, anytime with virtualization and cloud solutions and to also assist their IT departments by remotely monitoring and maintaining their network infrastructure. We believe JDL is well-positioned to capture part of the growth in these markets.

“Transition Networks’ performance in 2011 was exceptional, and it is bringing the energy from 2011 into the new year as it continues to invest in developing its capabilities to grow in the enterprise, service provider, and industrial markets. Our acquisition of Patapsco in 2011 was an important addition to Transition Networks’ capabilities to serve the mobile backhaul and government markets. While the nature of Transition Networks’ business often results in swings in revenue, we believe it is well positioned to continue growing over the long term.

“In addition, our long term performance will be significantly strengthened as we begin deploying in 2012 a new Enterprise Resource Planning (ERP) system, which is a major initiative that we began in 2011. Our new ERP system will standardize all CSI business units on a common platform. This will have a positive impact on all aspects of our business. It will bring efficiencies in the cycle from product concept to product development to bringing products to market; it will enable us to lower manufacturing costs and better manage our supply chain; and it will give us many tools to provide improved customer service. Implementing a new ERP system is a significant investment for the organization, but the dividends will be substantial in improved execution and enhanced service to our customers.