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		Per Share				Total
Public offering price		$	16.5000			$	90,750,000
Underwriting discount		$	0.9075			$	4,991,250
Proceeds, before expenses, to Eagle Test Systems		$	15.5925			$	31,185,000
Proceeds, before expenses, to the selling stockholders		$	15.5925			$	54,573,750

Banc of America Securities LLC	Lehman Brothers	Deutsche Bank Securities

A.G. Edwards	Canaccord Adams

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		Page
Prospectus Summary			1
Risk Factors			7
Forward Looking Statements and Projections			19
Use of Proceeds			20
Price Range of Common Stock			20
Dividend Policy			20
Capitalization			21
Selected Consolidated Financial and Other Data			22
Management’s Discussion and Analysis of Financial Condition and Results of Operations			24
Business			38
Management			50
Certain Relationships and Related Transactions			62
Principal and Selling Stockholders			66
Description of Capital Stock			68
Shares Eligible for Future Sale			71
Underwriting			73
Legal Matters			79
Experts			79
Where You Can Find Additional Information			79
Index to Consolidated Financial Statements			F-1

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	The highly cyclical nature of the semiconductor industry could adversely affect our operating results.

	•	decreased customer orders, test systems shipments and revenue;
	•	decreases in backlog;
	•	decreases in the ASPs of our test systems;
	•	delays in order commitments;
	•	lower operating margins;
	•	increases in order cancellations and customer-requested shipment delays;
	•	excess production capacity;
	•	delays in collecting accounts receivable; and
	•	excessive inventory levels.

	Our quarterly operating results may fluctuate significantly from period to period and this may cause our stock price to decline.

	•	rapid shifts in demand for, or acceptance of, our products as a result of the cyclical nature of the semiconductor equipment industry or otherwise, often resulting in sharp reductions in equipment sales during industry downturns and increased equipment sales during periods of industry recovery;

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	•	the loss of a significant customer or reduced capital spending by a customer;
	•	delays, cancellations or reschedulings, or other changes in the timing or terms of product shipments;
	•	acceleration or postponement of existing customer order delivery dates;
	•	delays in acceptance of products as a result of our failure to meet customers’ specifications;
	•	the timing of our new product introductions, and market acceptance of our new products and enhanced versions of our existing products;
	•	our competitors’ announcements of new products, services or technological innovations, which can, among other things, render our products less competitive;
	•	competitive pressures resulting in lower ASPs for our test systems;
	•	lower gross margins in any period due to changes in our product mix or increased prices for components;
	•	our inability to quickly reduce our fixed costs or management’s decision to maintain headcount notwithstanding decreased demand for our products;
	•	disruptions in our manufacturing or in our supply of components, causing us to delay shipment of our products; and
	•	write-offs of excess or obsolete inventory and accounts receivable that are not collectible.

	We depend on a small number of customers for a significant portion of our sales, and the loss of any of these customers will adversely affect our revenue.

	We face difficulty in obtaining new customers because of the high cost of switching test equipment vendors in our markets.

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	Our sales cycle is long, requires significant investment, and may not result in additional sales.

	•	the capital expenditure budgets and capital equipment needs of our customers;
	•	the willingness and ability of customers to incur the expense of adopting new product platforms;
	•	the internal technical capabilities and sophistication of our customers;
	•	the efforts and effectiveness of our sales force; and
	•	the need for and our success in demonstrating our technical and manufacturing capabilities to meet our customers’ requirements.

	We face substantial competition that, among other things, may adversely affect our sales and may lead to price pressure.

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	We rely on a few key employees and our success depends on our ability to hire and retain key personnel.

If we fail to maintain adequate internal control over financial reporting, if we are unable to timely complete our assessment of the effectiveness of our internal control over financial reporting, or if our independent registered public accounting firm cannot attest to our assessment of our internal control over financial reporting, we may be subject to regulatory sanctions and a loss of public confidence and the trading price of our stock could be negatively impacted.

	We have grown rapidly and if we fail to manage our growth, our business will suffer.

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	If we are not successful in developing new and enhanced products, we will lose market share to our competitors and our operating results will suffer.

	•	successfully develop and commercialize innovative products that are differentiated from our competitors’ offerings;
	•	properly and quickly identify customer needs and anticipate technological advances and industry trends;
	•	quickly adjust to changing industry conditions and product announcements by competitors; and
	•	establish manufacturing processes that will enable us to build and timely deliver new or enhanced products to specification in sufficient volumes.

	Products that do not meet customer specifications or that contain defects could cause us to lose customers and revenue.

	You should not rely on our level of backlog as an indication of our future revenues.

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	We obtain some of the components and subassemblies included in our test systems from a limited number of suppliers and subcontractors, which may result in production delays, loss of revenue or increased costs.

	If we cannot accurately plan the production of products to meet our customers’ demands, we could incur excess inventory or miss sales opportunities.

	Our manufacturing activities are conducted at a single facility, and any prolonged disruption in the operations of that facility could have a material adverse effect on our revenue.

	We have no experience with acquiring other companies and our future efforts to do so may subject us to significant costs without the realization of the anticipated benefits of those acquisitions.

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	•	difficulties in integrating the products, operations or personnel of acquired companies into our business;
	•	diversion of our management’s attention from our ongoing operations;
	•	additional expenses associated with amortization of acquired assets or impairment of acquired goodwill;
	•	difficulties in maintaining uniform standards, controls, procedures and policies;
	•	potential impairment of existing relationships with employees, suppliers and customers as a result of the difficulties in integration of new management personnel; and
	•	dilution to our stockholders in the event we issue stock to finance an acquisition or increased leverage if we incur debt to finance an acquisition.

	Economic, political and other risks associated with international sales and operations, particularly in Asia, could adversely affect our revenue.

	•	economic and political instability;
	•	compliance with foreign and domestic laws and regulations;
	•	changes in foreign and domestic legal and regulatory requirements or policies resulting in burdensome government controls, tariffs, restrictions, embargoes or export license requirements;
	•	longer payment cycles common in foreign markets;
	•	difficulties in staffing and managing our international operations;
	•	less favorable foreign intellectual property laws making it more difficult to protect our technology from appropriation by competitors;
	•	potentially adverse tax treatment;
	•	difficulties with distributors;
	•	difficulties collecting our accounts receivable; and
	•	natural disasters.

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	We could experience a decline in international sales due to currency fluctuations.

	Accounting for employee stock options using the fair value method could significantly reduce our net income.

	Third parties may claim we are infringing their intellectual property rights, and we could be prevented from selling our products or services, or suffer significant litigation or licensing expenses, even if these claims have no merit.

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	Third parties may infringe or design around our intellectual property rights, and we may expend significant resources enforcing our rights or suffer competitive injury.

	Our efforts to protect our intellectual property may be less effective in some foreign countries where intellectual property rights are not as well protected as in the United States.

	The price of our common stock may be volatile.

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	•	our inability to accurately predict future downturns in the semiconductor industry and scale our operations accordingly, and, correspondingly, our ability to meet increased demand during periods of industry rebound;
	•	new product introductions, which may require us to incur additional costs in early production phases;
	•	significant volatility in the market price and trading volume of ATE companies and other semiconductor equipment companies;
	•	announcements of technical innovations, new products or product enhancements, strategic alliances or significant agreements by us or by our competitors;
	•	catastrophic events;
	•	securing or losing a material customer or customers given our significant customer concentration;
	•	sales or distributions of large blocks of our stock; or
	•	departures of key personnel.

	If a substantial number of shares become available for sale and are sold in a short period of time, the market price of our common stock could decline.

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	If securities or industry analysts do not regularly publish research reports or financial forecasts about our business, or if they issue an adverse opinion regarding us or other companies in our industry, our stock price could decline.

	Officers, directors and principal stockholders will continue to have substantial control over us after this offering and could limit your ability to influence the outcome of key transactions, including a change of control.

	Provisions in our certificate of incorporation and by-laws may deter third parties from acquiring us.

	•	our board of directors is divided into three classes serving staggered three-year terms;
	•	only our board of directors may call special meetings of our stockholders;
	•	our stockholders may take action only at a meeting of our stockholders and not by written consent;
	•	we have authorized undesignated preferred stock, the terms of which may be established and shares of which may be issued without stockholder approval and may be used in connection with the adoption of a stockholder rights plan;
	•	stockholder approval of amendments of our certificate of incorporation or by-laws require a vote of 75% of our outstanding shares;
	•	vacancies on the board of directors may be filled only by the directors;
	•	our directors may be removed only for cause by the affirmative vote of the holders of 75% of the votes that all stockholders would be entitled to cast in the election of directors; and
	•	we require advance notice for stockholder proposals.

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	Section 203 of the Delaware General Corporation Law may delay, defer or prevent a change in control that our stockholders might consider to be in their best interests.

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Fiscal 2006		High				Low
Second Quarter (commencing March 8, 2006)		$	15.50			$	13.88
Third Quarter			17.77				14.00
Fourth Quarter (through September 27, 2006)			19.47				12.33

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	•	on an actual basis; and
	•	on an as adjusted basis to reflect the sale of 2,000,000 shares of common stock that we are offering at a public offering price of $16.50 per share, and the application of the estimated net proceeds therefrom as described in “Use of Proceeds.”

			As of June 30, 2006
			(unaudited)
			Actual				As Adjusted
			(In thousands, except
			share and per share
			data)
Capital lease obligations			$	706			$	706
Stockholders’ equity (deficit):
	Preferred stock, par value $0.01 per share; 10,000,000 shares authorized, no shares issued or outstanding, actual and as adjusted			—				—
	Common stock, par value $0.01 per share, 90,000,000 shares authorized, 20,655,283 shares issued and outstanding, actual; 90,000,000 shares authorized, 22,655,283 shares issued and outstanding, as adjusted(1)			207				227
Additional paid-in capital				138,899				169,364
Retained earnings (deficit)				(42,776	)			(42,776	)
Total stockholders’ equity (deficit)				96,330				126,815
Total capitalization			$	97,036			$	127,521

(1)	Excludes 764,500 shares of our common stock issuable upon exercise of outstanding stock options and 2,575,000 additional shares of our common stock available for grant under our option plan as of June 30, 2006, and assumes no exercise of stock options after such date.

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																								Nine Months
				Year Ended September 30,																				Ended June 30,
				2001				2002				2003				2004				2005				2005				2006
																								(unaudited)
Consolidated Statement of Net Income Data:
Net revenue				$	37,550			$	25,918			$	55,766			$	111,210			$	63,477			$	34,954			$	87,791
Cost of goods sold					12,711				8,556				20,457				37,337				26,596				16,000				28,605
		Gross profit			24,839				17,362				35,309				73,873				36,881				18,954				59,186
Operating expenses
	Selling, general and administrative				12,247				10,949				16,491				23,932				21,066				14,630				21,259
	Research and development				2,607				3,240				3,113				6,051				7,883				5,800				6,555
	Write-off of offering expense				—				—				—				1,858				—				—				—
		Operating income (loss)			9,985				3,173				15,705				42,032				7,932				(1,476	)			31,372
Interest expense					39				30				31				3,887				3,910				2,928				3,481
Increase (decrease) in value of warrants					—				—				—				1,548				(599	)			(384	)			5,466
Other (income) and expense, net					(459	)			633				(636	)			(408	)			(2,274	)			(669	)			(1,052	)
	Income (loss) before taxes				10,405				2,510				16,310				37,005				6,895				(3,351	)			23,477
Provision (benefit) for income taxes					4,047				864				6,706				14,952				(524	)			(3,427	)			10,158
	Net income			$	6,358			$	1,646			$	9,604			$	22,053			$	7,419			$	76			$	13,319
Earnings Per Share Data:
Net income per share, basic (1)				$	0.44			$	0.11			$	0.67			$	1.58			$	0.53			$	0.01			$	0.16
Net income (loss) per share, diluted (1)					0.44				0.11				0.67				1.46				0.36				(0.11	)			0.09
Weighted average shares outstanding, basic					14,390,000				14,390,000				14,365,017				5,396,248				5,396,248				5,396,248				11,782,483
Weighted average shares outstanding, diluted					14,390,000				14,390,000				14,390,337				14,009,533				14,513,227				14,512,892				16,973,554
Selected Operating Data:
Gross margin					66.1	%			67.0	%			63.3	%			66.4	%			58.1	%			54.2	%			67.4	%
Operating margin					26.6	%			12.2	%			28.2	%			37.8	%			12.5	%			(4.2	)%			35.7	%

(1)

The difference between the fair market value of our previously outstanding Redeemable Preferred Stock at date of issue of $21.1 million and the redemption price of $32.5 million paid on March 14, 2006 with proceeds from our initial public offering was charged to retained earnings in March 2006 when the redemption occurred. This $11.4 million adjustment is used to reduce net income to arrive at income available to common stockholders for purposes of calculating earnings per common — basic and diluted shares for the nine months ended June 30, 2006 in accordance with EITF Topic D-42 — “The Effect on the Calculation of Earnings per Share for the Redemption or Induced Conversion of Preferred Stock”.

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																						As of
		As of September 30,																				June 30,
		2001				2002				2003				2004				2005				2006
		(unaudited)																				(unaudited)
Consolidated Balance Sheet Data:
Cash, cash equivalents and marketable securities		$	20,865			$	20,573			$	21,961			$	23,733			$	22,676			$	63,614
Working capital			23,563				25,375				18,919				39,276				41,617				85,902
Total assets			35,495				43,505				50,852				91,752				66,171				126,372
Capital lease obligations			—				—				—				—				890				706
Redeemable warrants			—				—				1,718				3,266				2,667				—
Senior subordinated convertible notes			—				—				28,282				28,561				28,843				—
Series A convertible preferred stock			—				—				65,000				65,000				65,000				—
Total stockholders’ equity (deficit)			25,083				27,043				(73,620	)			(51,433	)			(44,587	)			96,330

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	•	we have a written sales agreement;
	•	delivery has occurred or services have been rendered;
	•	the price is fixed or determinable; and
	•	collectibility is reasonably assured.

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																Nine Months
				Year Ended												Ended
				September 30,												June 30,
				2003				2004				2005				2005				2006
Net revenue					100.0	%			100.0	%			100.0	%			100.0	%			100.0	%
Cost of goods sold					36.7				33.6				41.9				45.8				32.6
		Gross profit			63.3				66.4				58.1				54.2				67.4
Operating expenses
	Selling, general and administrative				29.5				21.5				33.2				41.8				24.2
	Research and development				5.6				5.4				12.4				16.6				7.5
	Write-off of offering expenses				—				1.7				—				—				—
		Operating income (loss)			28.2				37.8				12.5				(4.2	)			35.7
Interest expense					0.1				3.5				6.1				8.4				4.0
Increase (decrease) in value of warrants					—				1.4				(0.9	)			(1.1	)			6.2
Other (income) and expense, net					(1.1	)			(0.4	)			(3.6	)			(1.9	)			(1.2	)
	Income (loss) before taxes				29.2				33.3				10.9				(9.6	)			26.7
Provision (benefit) for income taxes					12.0				13.5				(0.8	)			(9.8	)			11.5
	Net income				17.2	%			19.8	%			11.7	%			0.2	%			15.2	%

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																										Nine Months Ended
		Year Ended September 30,																								June 30,
		2003								2004								2005								2005								2006
United States		$	23,503				42.1	%		$	24,031				21.6	%		$	29,295				46.2	%		$	20,288				58.0	%		$	27,219				31.0	%
Malaysia			18,642				33.4				56,720				51.0				13,602				21.4				3,674				10.5				34,736				39.6
Other			13,621				24.5				30,459				27.4				20,580				32.4				10,992				31.5				25,836				29.4
Total		$	55,766				100.0	%		$	111,210				100.0	%		$	63,477				100.0	%		$	34,954				100.0	%		$	87,791				100.0	%

														Nine Months
		Year Ended												Ended
		September 30,												June 30,
		2003				2004				2005				2005				2006
National Semiconductor Corporation			38.8	%			36.1	%			*	%			12.4	%			10.2	%
Texas Instruments Incorporated			*				31.9				44.3				35.5				51.4
Intersil Corporation			20.0				*				*				*				*

	*	Less than 10%.

	Comparison of Nine Months Ended June 30, 2006 and 2005

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	Comparison of Years Ended September 30, 2005 and 2004

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	Comparison of Years Ended September 30, 2004 and 2003

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	Quarterly Results of Operations

				Quarter Ended
				Dec. 31,				March 31,				June 30,				Sept. 30,				Dec. 31,				March 31,				June 30,				Sept. 30,				Dec. 31,				March 31,				June 30,
				2003				2004				2004				2004				2004				2005				2005				2005				2005				2006				2006
Net revenue				$	19,862			$	27,294			$	27,888			$	36,166			$	20,191			$	8,600			$	6,163			$	28,523			$	22,447			$	28,565			$	36,779
Cost of goods sold					6,308				8,630				9,991				12,408				7,680				5,027				3,293				10,596				7,029				9,319				12,256
Gross profit					13,554				18,664				17,897				23,758				12,511				3,573				2,870				17,927				15,418				19,246				24,523
Operating expenses
	Selling, general and administrative				4,690				4,987				6,218				8,037				4,614				5,045				4,971				6,436				6,288				6,958				8,014
	Research and development				1,173				1,242				1,578				2,058				2,089				2,010				1,701				2,083				2,076				2,392				2,088
	Write-off of offering expenses				—				—				—				1,858				—				—				—				—				—				—				—
		Operating income (loss)			7,691				12,435				10,101				11,805				5,808				(3,482	)			(3,802	)			9,408				7,054				9,896				14,421
Interest expense					974				971				970				972				970				976				982				982				980				2,430				71
Increase (decrease) in value of warrants					1,816				740				(588	)			(420	)			(21	)			(420	)			57				(215	)			2,191				3,275				—
Other (income) and expense					(139	)			(140	)			(31	)			(98	)			(166	)			(418	)			(85	)			(1,605	)			(157	)			(315	)			(582	)
	Income (loss) before taxes				5,040				10,864				9,750				11,351				5,025				(3,620	)			(4,756	)			10,246				4,040				4,506				14,932
Provision (benefit) for income taxes					2,704				4,588				3,647				4,013				1,970				(1,571	)			(3,826	)			2,903				2,165				2,733				5,260
	Net income (loss)			$	2,336			$	6,276			$	6,103			$	7,338			$	3,055			$	(2,049	)		$	(930	)		$	7,343			$	1,875			$	1,773			$	9,672

				Quarter Ended
				Dec. 31,				March 31,				June 30,				Sept. 30,				Dec. 31,				March 31,				June 30,				Sept. 30,				Dec. 31,				March 31,				June 30,
				2003				2004				2004				2004				2004				2005				2005				2005				2005				2006				2006
Net revenue					100.0	%			100.0	%			100.0	%			100.0	%			100.0	%			100.0	%			100.0	%			100.0	%			100.0	%			100.0	%			100.0	%
Cost of goods sold					31.8				31.6				35.8				34.3				38.0				58.5				53.4				37.1				31.3				32.6				33.3
Gross profit					68.2				68.4				64.2				65.7				62.0				41.5				46.6				62.9				68.7				67.4				66.7
Operating expenses
	Selling, general and administrative				23.6				18.3				22.3				22.3				22.9				58.7				80.7				22.6				28.0				24.4				21.8
	Research and development				5.9				4.6				5.7				5.7				10.3				23.3				27.6				7.3				9.3				8.4				5.7
	Write-off of offering expenses				—				—				—				5.1				—				—				—				—				—				—				—
		Operating income (loss)			38.7				45.5				36.2				32.6				28.8				(40.5	)			(61.7	)			33.0				31.4				34.6				39.2
Interest expense					4.9				3.5				3.4				2.7				4.8				11.3				15.9				3.4				4.4				8.5				0.2
Increase (decrease) in value of warrants					9.1				2.7				(2.1	)			(1.2	)			(0.1	)			(4.9	)			0.9				(0.7	)			9.7				11.4				—
Other (income) and expense					(0.7	)			(0.5	)			(0.1	)			(0.3	)			(0.8	)			(4.8	)			(1.3	)			(5.6	)			(0.7	)			(1.1	)			(1.6	)
	Income (loss) before taxes				25.4				39.8				35.0				31.4				24.9				(42.1	)			(77.2	)			35.9				18.0				15.8				40.6
Provision (benefit) for income taxes					13.6				16.8				13.1				11.1				9.8				(18.3	)			(62.1	)			10.2				9.6				9.6				14.3
	Net income (loss)				11.8	%			23.0	%			21.9	%			20.3	%			15.1	%			(23.8	)%			(15.1	)%			25.7	%			8.4	%			6.2	%			26.3	%

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			Payments Due in
							Less Than												More Than
			Total				1 Year				1-3 Years				4-5 Years				5 Years
Operating lease obligations			$	13,629			$	2,124			$	3,544			$	3,070			$	4,891
Capital lease obligations				751				286				463				2				—
Purchase commitments(1)				10,197				10,197				—				—				—
	Total		$	24,577			$	12,607			$	4,007			$	3,072			$	4,891

(1)	The purchase commitments primarily represent the value of purchase orders issued for raw materials and purchased services that have been scheduled for fulfillment in the next six to eight months.

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	The Importance of Testing in Semiconductor Production; The ATE Market

	•	Wafer Probe Test. After wafer fabrication, a test system performs electrical testing of individual devices while still in wafer form for initial pass/fail verification by moving the wafer into contact with a wafer probe card. Semiconductors are tested at this stage to avoid the additional costs associated with assembling, packaging and further testing of defective semiconductors.
	•	Final Test. After the individual semiconductor devices, called die, that fail the wafer probe test are discarded, the remaining die are assembled into packages. Manufacturers then test the packaged devices over a range of potential operating conditions to measure their functionality against precise performance specifications. Final test works to ensure that a device meets the manufacturer’s quality standards prior to shipping.

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	•	Need for High Throughput Testing. A test system’s throughput, or the number of devices that can be tested on a single test system in a given period of time, is a principal driver of cost-of-test. Improving throughput allows semiconductor manufacturers to meet increased capacity demands with fewer test systems, and consequently less ancillary equipment. The most effective method of increasing test throughput is to test multiple devices simultaneously on the same test system, or in parallel, on multiple test sites. The benefits are lower overall capital expenditures and less required floor space for a given increment of capacity. Although this multi-site, parallel test approach is widely employed for high volume production of digital and memory devices, it has proved challenging for analog and mixed-signal device testing due to the nature of the electrical properties of analog devices and the current architecture of many analog and mixed-signal test systems.
	•	Demand for Greater Testing Accuracy and Repeatability. The percentage of functioning devices per production run, known as yield, is a key measurement in determining the cost of semiconductor manufacturing. While yield losses can occur at multiple points during the manufacturing process, yield can be particularly affected during the testing process when functioning, or “good,” devices are deemed “bad” by test equipment incapable of making high precision measurements. Since lower yields have a direct impact on profitability, semiconductor manufacturers seek test equipment capable of highly accurate, repeatable results. Greater precision increases the likelihood that good devices will pass and defective devices will fail. In multi-site testing, test accuracy and repeatability can be compromised when electrical signals from a device failure from one site influence the test results at another site. This occurs in conventional test systems because the test instrumentation connected to each DUT is electrically linked by a common signal and power pathway, known as a common ground pathway, in the test system. For this reason, semiconductor manufacturers seek test solutions capable of producing precise, repeatable results and that minimize undesired interaction between devices undergoing simultaneous multi-site test.
	•	Demand for Scalable, Flexible Solutions. ATE providers have traditionally offered test systems that emphasize solutions for the most advanced semiconductors, such as those with high digital pin counts and high operating frequencies. The challenges associated with testing these complex devices have resulted in test systems that are increasingly expensive to acquire, operate and maintain. Often, the functionality of these test systems greatly exceeds the test requirements for many low-priced, high-volume devices and cannot be scaled down in a cost-effective manner to address the specific requirements of these particular devices. In other cases, the test equipment offered at lower prices has proven incapable of providing the multi-site, parallel test capability required to achieve high throughput. Due to the lack of flexibility in traditional ATE architecture, semiconductor manufacturers require test equipment with the capability to cost-effectively scale functionality to meet the test requirements of a wide range of devices.
	•	High Cost of Changing Test Platforms. Although more cost-effective test platforms may be available for testing many devices, the costs associated with migrating, or switching, to a new platform are often significant enough to cause semiconductor manufacturers to stay with their current, less efficient, test platforms. The switching costs associated with replacing an existing test solution include the capital expense of the new test system, the cost of developing and integrating new test programs and associated hardware, the expense associated with investment in ancillary hardware and other accessories, and the re-training and facility improvements necessary to support the new ATE environment. In addition, switching costs decrease the overall efficiency of the test process due to the increased time required for engineering and production staff to evaluate and validate new test systems. These high switching costs often make semiconductor manufacturers reluctant to switch to a new test platform, despite the new platform’s ability to provide higher throughput and lower cost-of-test.

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	•	Our proprietary SmartPintm technology shortens the time required to complete the test routine for each individual device. SmartPintm technology enables high-speed, sequential subtests in which the test instrumentation completes an entire range of test parameters without software intervention or the time consuming task of opening and closing relays. In addition, with onboard DSP processing technology, SmartPintm eliminates the need for data and test results to cross long signal paths in order to be collected and analyzed.
	•	Our test systems optimize simultaneous, or parallel, testing across multiple sites on the same test system. We refer to this capability as SimulTesttm. Our architecture enables test routine replication across multiple sites by dedicating signal sourcing and measurement resources, for current and voltage, and local signal processing to each pin on the DUT. This permits one test system to effectively test multiple devices simultaneously, which is critical for cost-efficient, multi-site, parallel testing.

	•	Our equipment allows customers to perform tests with a high degree of precision by narrowing the range of test tolerances, or guard bands. Reduced guard bands improve yield by allowing device manufacturers to measure closer to the established performance limits of the device.
	•	The analog resource boards in our test systems are designed with independent computer interfaces, power supplies and independent ground connections that eliminate the need for a shared communication and electrical pathway. By avoiding the use of a common ground pathway, the test results from one device are isolated and avoid undesirable interactions with devices undergoing simultaneous test within the same test system.

	•	Our test instruments, or resource boards, provide dedicated functionality and capability, which allow customers to tailor their test system capabilities to the specific testing needs of their devices. Our ATE is designed utilizing modular hardware and off-the-shelf electrical components that allow us to develop new features at the resource board level in a short time period. Our architecture also enables customers to upgrade their test system capability by simply adding another board or replacing an existing board within an existing test system. This is a more cost efficient and less time consuming approach than replacing the entire test system, as is required by many competing systems.
	•	A majority of our analog resource boards can be employed in any of the test platforms we offer, allowing our customers to utilize identical hardware across our entire product line. This approach offers compatibility across a wide range of products, as well as easy replacement and support of individual resource boards. In addition, our entire test system product line operates under a uniform

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		software environment, allowing customers to move seamlessly to different test system types by utilizing a common operating environment.

	•	Innovate to Enable Low Overall Cost-of-Test. We will continue to offer technologically advanced products and services that improve efficiency and provide superior performance. We intend to leverage our test system technology and architecture to further enable multi-site, parallel testing, higher throughput and greater test precision, while offering customers the flexibility to upgrade and reconfigure existing test systems as their testing needs evolve. We plan to continue to engage in research and development activities to extend our SmartPintm, SimulTesttm and Chameleontm technologies and other proprietary technologies to enable our customers to achieve the highest return on their investment and decrease their overall cost-of-test.
	•	Focus on High-Volume, Cost Sensitive Devices. We focus on delivering test systems for high-volume, high-performance analog, mixed-signal, and RF devices. These devices are used in a broad and growing range of high-volume consumer products such as cellular telephones, computers, digital cameras, MP3 players and automotive electronics. Decreasing the cost-of-test will become increasingly important to device manufacturers competing in these markets as their products experience reductions in ASPs. We believe our focused approach enables us to better serve these markets than vendors who compete across a broader range of markets.
	•	Increase Our Market Share within Our Targeted Markets. We will continue to seek opportunities to increase sales to existing and new customers by expanding the quantity and types of devices that we are capable of testing, including devices that our customers and prospective customers currently test on

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		competitors’ test systems. In addition, we plan to penetrate new production sites within our customers’ overall manufacturing operations. We believe that we can gain market share from our competitors and obtain new business as new customers seek to reduce cost-of-test across their product lines. We intend to gain share within customer segments that we have not traditionally targeted, such as fabless device manufacturers and test and assembly contractors. Finally, we intend to continue to expand our geographic presence which grew significantly with the opening of five new offices in Asia and Europe in fiscal 2005, and we intend to continue to make additional investments in our sales, marketing and service operations in these markets.
	•	Expand Our Addressable Market by Broadening Test Capabilities. Through new product enhancements and expanded customer focus, we have recently begun to expand our addressable markets to include test solutions for other mid to low-complexity semiconductors such as discrete devices, data converters and automotive products. We believe that our demonstrated expertise and proven value proposition in the analog, mixed-signal and RF device markets which are characterized by high-volume and cost-sensitive products, such as power and battery management devices, should enable us to compete effectively in these newer markets which present similar cost-of-test challenges.
	•	Maintain Profitable Growth Through Our Flexible Business Model. We outsource a substantial portion of our subassembly manufacturing functions to third parties, and focus our manufacturing efforts on final test, assembly and integration. This allows us to be flexible during industry downturns while maintaining the quality of our products. In addition, our modular system architecture is designed to allow us to offer new products and enhancements in a short period of time and at low incremental cost. These strategies provide us with a flexible business model and better enable us to respond to the cyclical changes in our industry.

	Test Systems

Data

Conversion

Complex

Analog

Digital

RF

Multi-Site

Power

RF and

and Video

Mixed-

Precision

Test System

Channels

Pins

Ports

Capability

Management

Wireless

Processing

Automotive

Signal

Linear

Discretes

ETS-600

480

256

32

64

ü

ü

ü

ü

ü

ü

ETS-364

240

128

16

64

ü

ü

ü

ü

ü

ü

ETS-300

240

32

—

32

ü

ü

ü

ETS-200

120

16

—

16

ü

ü

ü

ETS-200T

48

—

—

16

ü

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	Software Products

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Agape Packaging Mfg. Co.   Ltd. Allegro MicroSystems, Inc. AMI Semiconductor, Inc. Amkor Technology, Inc. ASE Electronics (M) Sdn.   Bhd. Carsem Sdn. Bhd Fairchild Semiconductor   International, Inc.		Guidant Corporation HANA Semiconductor   (Ayutthaya) Co.,  Ltd. Hewlett-Packard Company International Rectifier   Corporation Intersil Corporation Jiangsu Changjiang Electronics   Technology Co., Ltd. Microchip Technology   Incorporated		Microsemi Integrated Products Myson Century Inc. National Semiconductor Corporation NS Electronics Bangkok Ltd O2MICRO, Inc. ON Semiconductor Corporation STATS ChipPAC Ltd. Texas Instruments Incorporated Unitive Electronics, Inc.

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Name		Age				Position
Executive Officers and Directors
Leonard A. Foxman			61			Chief Executive Officer, President and Director
Theodore D. Foxman			31			Chief Operating Officer, Executive Vice President and Director
Stephen J. Hawrysz			47			Chief Financial Officer
Jack E. Weimer			49			Chief Technical Officer and Vice President of Technical Solutions
Michael C. Child(2)(3)			51			Director
Ross W. Manire(1)(2)			53			Director
William H. Gibbs(1)(2)(3)			62			Director
David B. Mullen(1)(3)			55			Director
Other Key Employees
James M. Bolotin			44			Controller/Chief Accounting Officer
Dale R. Buxton			42			Vice President/Asia
John Connell			48			Vice President/Manufacturing Engineering
Daniel Faia			38			Vice President/North America
Adam B. Plummer			31			Vice President/Information Technology
Stanley B. Semuskie			56			Vice President/Customer Service
Rene J. Verhaegen			59			Vice President/Europe

(1)	Member of the audit committee.
(2)	Member of the compensation committee.
(3)	Member of the nominating and corporate governance committee.

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	•	appointing, approving the compensation of, and assessing the independence of our independent auditor;
	•	overseeing the work of our independent auditor, including the receipt and consideration of certain reports from the independent auditor;
	•	resolving disagreements between management and our independent auditor;
	•	pre-approving auditing and permissible non-audit services, and the terms of such services, to be provided by our independent auditor;
	•	reviewing and discussing with management and the independent auditors our annual and quarterly financial statements and related disclosures;
	•	coordinating the oversight of our internal control over financial reporting, disclosure controls and procedures and code of business conduct and ethics;
	•	discussing our risk management policies;
	•	establishing policies regarding hiring employees from the independent auditor and procedures for the receipt and retention of accounting related complaints and concerns;
	•	meeting independently with our independent auditors and management; and
	•	preparing the audit committee report required by SEC rules to be included in our proxy statements.

	•	annually reviewing and approving corporate goals and objectives relevant to compensation of our chief executive officer;
	•	evaluating the performance of our chief executive officer in light of such corporate goals and objectives and determining the compensation of our chief executive officer;
	•	determining the compensation of our other executive officers;
	•	overseeing an evaluation of our senior executives;
	•	overseeing and administering our incentive-based compensation plans and equity-based plans; and
	•	reviewing and making recommendations to the board with respect to director compensation.

	•	developing and recommending to the board criteria for board and committee membership;
	•	establishing procedures for identifying and evaluating director candidates including nominees recommended by stockholders;
	•	identifying individuals qualified to become board members;
	•	establishing procedures for stockholders to submit recommendations for director candidates;

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	•	recommending to the board the persons to be nominated for election as directors and to each of the board’s committees;
	•	developing and recommending to the board a set of corporate governance guidelines; and
	•	overseeing the evaluation of the board and management.

	Fees and Expenses

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	Compensation Earned

							Annual Compensation												Long Term Compensation
																			Awards								Payouts
																			Restricted				Securities
																			Stock				Underlying
							Base								Other Annual				Awards				Options				LTIP Payouts				All Other
Name and Principal Position			Year				Salary ($)				Bonus ($)				Compensation ($)				($)				(#)				($)				Compensation ($)
Leonard Foxman,				2005				350,000				142,500				*				—				—				—				—
	Chief Executive Officer,			2004				347,337				560,000				*				—				—				—				—
	President and Director			2003				200,000				72,200				42,200	(1)			—				—				—				—
Theodore Foxman,				2005				400,000				115,000				*				—				—				—				—
	Chief Operating Officer,			2004				397,764				640,000				*				—				75,000				—				—
	Executive Vice			2003				250,000				500,000				*	(2)			—				—				—				—
	President and Director
Stephen J Hawrysz,				2005				190,000				77,500				*				—				—				—				—
	Chief Financial Officer			2004	(3)			93,442				66,000				*				—				80,000				—				—
				2003				—				—				—				—				—				—				—
Jack E. Weimer,				2005				150,000				62,000				*				—				—				—				—
	Chief Technical Officer			2004				148,698				180,000				*				—				70,000				—				—
				2003				98,753				275,251				*				—				—				—				—
Steven R. Dollens(4),				2005				250,000				62,000				*				—				—				—				—
	Vice President of			2004				220,242				300,000				*				—				120,000				—				—
	Product Development			2003				166,905				238,309				153,517	(5)			—				—				—				—

*	Excludes benefits and perquisites received by the named executive officers that do not exceed the lesser of $50,000 or 10% of any such named executive officer’s annual compensation.

(1)	Represents (i) a contribution of $16,702 made by us for the benefit of Mr. Foxman to the Money Purchase Pension Plan, (ii) a contribution of $20,000 made by us for the benefit of Mr. Foxman to the Profit Sharing Plan, (iii) a contribution of $3,298 made by us for the benefit of Mr. Foxman to the Employee Stock Ownership Plan, and (iv) payment of $2,200 for automobile expenses. Does not include $1,450,000 paid to Mr. Foxman by Pacific Support Group, Partners. See “Certain Relationships and Related Transactions — Transactions with Pacific Support Group, Partners.”
(2)	Does not include $1,012,500 paid to Mr. Foxman and immediate family members living in his household by Pacific Support Group, Partners. See “Certain Relationships and Related Transactions — Transactions with Pacific Support Group, Partners.”
(3)	Represents partial year compensation as Mr. Hawrysz’s employment commenced March 1, 2004.
(4)	Mr. Dollens’ employment terminated June 21, 2006.
(5)	Represents (i) sales commission earned of $112,737, (ii) a contribution of $16,702 made by us on behalf of Mr. Dollens to the Money Purchase Pension Plan, (iii) a contribution of $20,000 made by us on behalf of Mr. Dollens to the Profit Sharing Plan, (iv) a contribution of $3,298 made by us on behalf of Mr. Dollens to the Employee Stock Ownership Plan, and (v) a payment of $780 for automobile expenses.

	Option Grants in Last Fiscal Year

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	Option Exercises in Last Fiscal Year and Fiscal Year End Option Values

		Number of Securities								Value of unexercised In-
		Underlying Unexercised								The-Money Options at
		Options at Fiscal Year End								Fiscal Year End
Name		Exercisable				Unexercisable				Exercisable				Unexercisable
Leonard Foxman			0				0			$	0			$	0
Theodore Foxman			31,250				43,750				287,500				402,500
Jack E. Weimer			23,438				46,562				153,906				291,094
Stephen J. Hawrysz			29,167				50,833				219,792				370,208
Steven R. Dollens(1)			41,667				78,333				295,833				524,167

(1)	Mr. Dollens’ options were forfeited in connection with the termination of his employment on June 21, 2006.

	2003 Stock Option and Grant Plan

	2006 Stock Option and Incentive Plan

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	Profit Sharing Plan

	Money Purchase Pension Plan

	Employee Stock Ownership Plan

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	Employment Agreements

	Non-Competition Agreement

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	•	any breach of the director’s duty of loyalty to us or our stockholders;
	•	any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;
	•	any unlawful payments related to dividends or unlawful stock repurchases, redemptions or other distributions; or
	•	any transaction from which the director derived an improper personal benefit.

	•	we will indemnify our directors, officers and, in the discretion of our board of directors, certain employees to the fullest extent permitted by the Delaware General Corporation Law; and
	•	we will advance expenses, including attorneys’ fees, to our directors and, in the discretion of our board of directors, to our officers and certain employees, in connection with legal proceedings, subject to limited exceptions.

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		Number of				Aggregate				Aggregate Amount
Holder		Shares Redeemed				Redemption Price				of Special Dividends
Leonard Foxman			4,576,350			$	48,339,484			$	7,909,755
Foxman Family LLC			2,885,938				30,483,843				4,988,048
Employee Stock Ownership Plan			1,390,943				14,692,385				2,404,105
Jack E. Weimer			127,748				1,349,373				220,797
Steven R. Dollens			12,773				134,915				22,076

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	•	each beneficial owner of more than 5% of our outstanding common stock;
	•	each of our named executive officers;
	•	each of our directors;
	•	all of our executive officers and directors as a group; and
	•	the selling stockholders.

		Beneficial Ownership												Beneficial Ownership
		Prior to Offering												After Offering
		Shares								Shares				Shares
Name and Address of		Beneficially								Being				Beneficially
Beneficial Owner (1)		Owned				Percentage				Offered				Owned				Percentage
TA Associates Funds(2)			9,115,288				44.1	%			2,500,000				6,615,288				29.2	%
Leonard A. Foxman(3)			4,941,937				23.9				1,000,000				3,941,937				17.4
Foxman Family LLC(4)			3,361,562				16.3				1,000,000				2,361,562				10.4
Theodore D. Foxman(5)			54,986				*				—				54,986				*
Eagle Test Systems, Inc. Employee Stock Ownership Plan(6)			834,565				4.0				—				834,565				3.7
Jack E. Weimer(7)			153,032				*				—				153,032				*
Stephen J. Hawrysz(8)			72,651				*				—				72,651				*
Michael C. Child(9)			9,115,288				44.1				2,500,000				6,615,288				29.2
Ross W. Manire(10)			17,083				*				—				17,083				*
William H. Gibbs(11)			11,528				*				—				11,528				*
David B. Mullen(12)			11,528				*				—				11,528				*
All executive officers and directors as a group (8 persons)(13)			14,334,428				68.8	%			3,500,000				10,834,428				47.5	%

	*	Represents less than 1% of the outstanding shares of common stock.

(1)	Except as otherwise indicated, addresses are c/o Eagle Test Systems, Inc., 2200 Millbrook Drive, Buffalo Grove, IL 60089. The address of TA Associates, Inc. and Mr. Child is c/o TA Associates, Inc., High Street Tower, Suite 2500, 125 High Street, Boston, MA 02110.

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(2)	Amounts shown reflect the aggregate number of shares of common stock held by TA IX L.P., TA/Atlantic and Pacific IV L.P., TA Strategic Partners Fund A L.P., TA Strategic Partners Fund B L.P., TA Investors LLC and TA Subordinated Debt Fund, L.P. (collectively, the “TA Associates Funds”).
	Investment and voting control of the TA Associates Funds is held by TA Associates, Inc. No stockholder, director or officer of TA Associates, Inc. has voting or investment power with respect to our shares of common stock held by the TA Associates Funds. Voting and investment power with respect to such shares is vested in a three-person investment committee consisting of the following employees of TA Associates: Messrs. Michael C. Child, C. Kevin Landry and P. Andrews McLane. Mr. Child is a Managing Director of TA Associates, Inc., the manager of the general partner of TA IX L.P. and TA Subordinated Debt Fund L.P.; the manager of TA Investors LLC; and the general partner of TA/Atlantic and Pacific IV L.P., TA Strategic Partners Fund A L.P. and TA Strategic Partners Fund B L.P. Mr. Child has been a member of our board of directors since October 2003. See Note 9 below.
(3)	Includes 3,361,562 shares held by Foxman Family LLC prior to this offering, of which Leonard Foxman is the manager. Leonard Foxman has voting and investment power with respect to the shares held of record by Foxman Family LLC and is the father of Theodore Foxman and Robin Cleek. Leonard Foxman has no economic interest in Foxman Family LLC. The members of Foxman Family LLC are ten trusts for the benefit of Theodore Foxman and his descendants, of which Theodore Foxman is the trustee and which trusts collectively have a 62.5% economic interest in Foxman Family LLC, and six trusts for the benefit of Mrs. Robin Cleek and her descendants, of which Mrs. Cleek is the trustee and which trusts collectively have a 37.5% economic interest in Foxman Family LLC. Also includes 834,565 shares held by the Employee Stock Ownership Plan, of which Leonard Foxman is the trustee, which position has shared voting and sole investment power in connection with certain matters with respect to such shares. Leonard Foxman disclaims beneficial ownership of such shares, except to the extent of 29,404 shares which he holds as a participant in the Employee Stock Ownership Plan.
(4)	See Note 3 above.
(5)	Includes 48,438 shares subject to options that are immediately exercisable or exercisable within 60 days of June 30, 2006. Also includes 6,548 shares Theodore Foxman holds as a participant in the Employee Stock Ownership Plan. Does not include 3,361,562 shares held by Foxman Family LLC, in which trusts for the benefit of Theodore Foxman and his descendants have a 62.5% economic interest, but over which Theodore Foxman does not have voting or investment power. Theodore Foxman is the trustee of such trusts.
(6)	Leonard Foxman is the trustee of the Employee Stock Ownership Plan and has shared voting and sole investment power in connection with certain matters with respect to the shares held by such plan. Presently, shares of our common stock held by the trustee as part of the Employee Stock Ownership Plan assets are voted by the trustee. The trustee shares this voting power with the Employee Stock Ownership Plan participants, who are entitled to direct the trustee as to the manner in which all shares allocated to their respective accounts will be voted with respect to all matters subject to a shareholder vote. Common stock held by the Employee Stock Ownership Plan on behalf of executive officers are reported in the Employee Stock Ownership Plan’s and the trustee’s common stock ownership listing as well as in the common stock ownership listings for the respective executive officers and for executive officers and directors as a group.
(7)	Includes 39,479 shares subject to options that are immediately exercisable or exercisable within 60 days of June 30, 2006. Also includes 36,906 shares which Mr. Weimer holds as a participant in the Employee Stock Ownership Plan, over which he has shared voting power.
(8)	Includes 47,500 shares subject to options that are immediately exercisable or exercisable within 60 days of June 30, 2006. Also includes 151 shares which Mr. Hawrysz holds as a participant in the Employee Stock Ownership Plan, over which he has shared voting power.
(9)	Mr. Child is a managing director of TA Associates, Inc. and may be considered to have beneficial ownership of TA Associates, Inc.’s interest in us. Mr. Child disclaims beneficial ownership of all such shares. Mr. Child has been a member of our board of directors since October 2003. See Note 2 above.
(10)	Includes 17,083 shares subject to options that are immediately exercisable or exercisable within 60 days of June 30, 2006.
(11)	Includes 11,528 shares subject to options that are immediately exercisable within 60 days of June 30, 2006.
(12)	Includes 11,528 shares subject to options that are immediately exercisable within 60 days of June 30, 2006.
(13)	Includes 175,556 shares subject to options that are immediately exercisable or exercisable within 60 days of June 30, 2006, 834,565 shares held in the Employee Stock Ownership Plan.

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	•	before the stockholder became interested, the board of directors approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;
	•	upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding, shares owned by persons who are directors and also officers, and employee stock plans, in some instances; or
	•	at or after the time the stockholder became interested, the business combination was approved by the board of directors of the corporation and authorized at an annual or special meeting of the stockholders by the affirmative vote of at least two-thirds of the outstanding voting stock which is not owned by the interested stockholder.

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	•	by gift, will or intestate succession to immediate family members; and
	•	to any trust for the direct or indirect benefit of the transferor or his or her immediate family;

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	•	grant options pursuant to our currently existing stock plans.

	•	1% of the number of shares of our common stock then outstanding, which will equal approximately 226,553 shares immediately after this offering; or
	•	the average weekly trading volume in our common stock on the Nasdaq Global Market during the four calendar weeks preceding the filing of a notice on Form 144 with respect to such sale.

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Underwriters		Number of Shares
Banc of America Securities LLC			1,925,000
Lehman Brothers Inc.			1,650,000
Deutsche Bank Securities Inc.			1,100,000
A.G. Edwards & Sons, Inc.			412,500
Canaccord Adams Inc.			412,500
Total			5,500,000

	•	the obligation to purchase all of the shares of common stock offered hereby (other than shares of common stock covered by the option to purchase additional shares as described below) if any of the shares is purchased;
	•	the representations and warranties made by us and the selling stockholders to the underwriters are true;
	•	there is no material change in the financial markets; and
	•	we and the selling stockholders deliver customary closing documents to the underwriters.

						Total
		Per
		Share				No Exercise				Full Exercise
Paid by Eagle Test		$	0.9075			$	1,815,000			$	2,563,688
Paid by the selling stockholders		$	0.9075			$	3,176,250			$	3,176,250

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	•	during the last 17 days of the 90-day restricted period we issue an earnings release or announce material news or a material event relating to us occurs; or
	•	prior to the expiration of the 90-day restricted period, we announce that we will release earnings results during the 16-day period beginning on the last day of the 90-day period,

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	•	A short position involves sales by the underwriters of shares in excess of the number of shares the underwriters are obligated to purchase, which creates a syndicate short position. The short position may be either a covered short position or a naked short position. In a covered short position, the number of shares involved in the sales by the underwriters is not greater than the number of shares that they may purchase by exercising their option to purchase additional shares. In a naked short position, the number of shares involved is greater than the number of shares in their option to purchase additional shares. The underwriters may close out any short position by either exercising their option to purchase additional shares and/or purchasing shares in the open market.
	•	Stabilizing transactions permit bids to purchase common stock so long as the stabilizing bids do not exceed a specified maximum.
	•	Syndicate covering transactions involve purchases of the common stock in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the source of shares to close out the short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through their option to purchase additional shares. If the underwriters sell more shares than could be covered by their option to purchase additional shares, creating a naked short position, the position can only be closed out by buying shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there could be downward pressure on the price of the shares in the open market after pricing that could adversely affect investors who purchase in the offering.
	•	Penalty bids permit the underwriters to reclaim a selling concession from a syndicate member when the common stock originally sold by the syndicate member is purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions.

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	(a) to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose corporate purpose is solely to invest in securities;
	(b) to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000 and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts; or
	(c) in any other circumstances which do not require the publication by us of a prospectus pursuant to Article 3 of the Prospectus Directive.

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	(i) it has not offered or sold and will not offer or sell shares of our common stock other than to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or as agent) for the purposes of their businesses or who it is reasonable to expect will acquire, hold, manage or dispose of investments (as principal or agent) for the purposes of their businesses where the issue of the shares would otherwise constitute a contravention of Section 19 of the Financial Services and Markets Act 2000, or the FSMA, by the Issuer;
	(ii) it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of the shares in circumstances in which Section 21(1) of the FSMA does not apply to us; and
	(iii) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the shares in, from or otherwise involving the United Kingdom.

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Unaudited Financial Statements
	Condensed Consolidated Balance Sheets as of September 30, 2005 and June 30, 2006			F-2
	Condensed Consolidated Statements of Net Income (Loss) and Comprehensive Income (Loss) for the three and nine months ended June 30, 2005 and 2006			F-3
	Condensed Consolidated Statements of Cash Flows for the nine months ended June 30, 2005 and 2006			F-4
	Notes to Condensed Consolidated Financial Statements			F-5
Audited Financial Statements
	Report of Independent Registered Public Accounting Firm			FF-1
	Consolidated Balance Sheets as of September 30, 2004 and 2005			FF-2
	Consolidated Statements of Net Income and Comprehensive Income for the years ended September 30, 2003, 2004 and 2005			FF-3
	Consolidated Statements of Stockholders’ Equity (Deficit) for the years ended September 30, 2003, 2004 and 2005			FF-4
	Consolidated Statements of Cash Flows for the years ended September 30, 2003, 2004 and 2005			FF-5
	Notes to Consolidated Financial Statements			FF-6

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				September 30,				June 30,
				2005				2006
								(Unaudited)
ASSETS
Current assets:
	Cash and cash equivalents			$	9,976			$	37,914
	Marketable securities				12,700				25,700
	Accounts receivable, net of allowances of $1,240 and $1,393				9,202				19,897
	Inventories				17,707				22,601
	Deferred income taxes				3,426				5,969
	Prepaid expenses and other current assets				548				1,876
		Total current assets			53,559				113,957
Property, plant and equipment, net					12,135				11,723
Other assets					477				692
		Total assets		$	66,171			$	126,372
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
	Accounts payable			$	1,523			$	7,901
	Current portion of long-term debt				249				258
	Deferred revenue				3,419				8,606
	Accrued compensation and related liabilities				3,103				4,414
	Accrued income taxes				767				4,004
	Other accrued expenses				2,881				2,872
		Total current liabilities			11,942				28,055
Long-term liabilities:
	Long-term debt, less current portion				29,484				448
	Redeemable warrants				2,667				—
	Deferred income taxes				1,272				1,110
	Other long-term liabilities				393				429
		Total long-term liabilities			33,816				1,987
Series A convertible preferred stock, par value $0.01 per share, 3,437 shares authorized and 3,436 shares issued as of September 30, 2005, no shares authorized, issued, or outstanding as of June 30, 2006					65,000				—
Stockholders’ equity (deficit):
	Preferred stock, par value $0.01 per share no shares authorized, issued or outstanding as of September 30, 2005 and 10,000,000 shares authorized, no shares issued or outstanding as of June 30, 2006				—				—
	Common stock, par value $0.01 per share, 15,495,325 and 90,000,000 shares authorized as of September 30, 2005 and June 30, 2006, respectively; 5,396,248 and 20,655,283 shares outstanding as of September 30, 2005 and June 30, 2006, respectively				54				207
	Additional paid in capital				156				138,899
	Accumulated deficit				(44,665	)			(42,776	)
	Deferred stock compensation expense				(132	)			—
		Total stockholders’ equity (deficit)			(44,587	)			96,330
		Total liabilities and stockholders’ equity (deficit)		$	66,171			$	126,372

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				Three Months Ended June 30,								Nine Months Ended June 30,
				2005				2006				2005				2006
				(Unaudited)								(Unaudited)
Net revenue				$	6,163			$	36,779			$	34,954			$	87,791
Cost of goods sold					3,293				12,256				16,000				28,605
	Gross profit				2,870				24,523				18,954				59,186
Operating expenses
	Selling, general and administrative				4,971				8,014				14,630				21,259
	Research and development				1,701				2,088				5,800				6,555
		Operating income (loss)			(3,802	)			14,421				(1,476	)			31,372
Interest expense					982				71				2,928				3,481
Other (income) and expense
	Income from marketable securities				(88	)			(615	)			(381	)			(1,097	)
	Investment impairments				—				—				—				24
	Increase (decrease) in value of warrants				57				—				(384	)			5,466
	Other (income) expense, net				3				33				(288	)			21
	Income (loss) before taxes				(4,756	)			14,932				(3,351	)			23,477
Provision (benefit) for income taxes					(3,826	)			5,260				(3,427	)			10,158
	Net income (loss)			$	(930	)		$	9,672			$	76			$	13,319
Net income (loss) per share, basic				$	(0.17	)		$	0.47			$	0.01			$	0.16
Net income (loss) per share, diluted				$	(0.17	)		$	0.46			$	(0.11	)		$	0.09
Weighted average shares outstanding, basic					5,396,248				20,651,934				5,396,248				11,782,483
Weighted average shares outstanding, diluted					5,396,248				20,937,003				14,512,892				16,973,554
Comprehensive income (loss):
	Net income (loss)			$	(930	)		$	9,672			$	76			$	13,319
	Unrealized gain on marketable securities, net of taxes				57				—				109				—
Comprehensive income (loss)				$	(873	)		$	9,672			$	185			$	13,319
Income (loss) available to common stockholders:
Net income (loss)				$	(930	)		$	9,672			$	76			$	13,319
Retained earnings adjustment for redemption of redeemable preferred stock					—				—				—				(11,430	)
Net income allocated to preferred stockholders					—				—				(47	)			—
Income (loss) available to common stockholders				$	(930	)		$	9,672			$	29			$	1,889

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					Nine Months Ended
					June 30,
					2005				2006
					(Unaudited)
Cash flows from operating activities:
	Net income				$	76			$	13,319
	Adjustments to reconcile net income to net cash provided by (used in) operating activities:
		Depreciation and amortization				1,443				2,253
		Investment impairments				—				24
		Realized (gain) loss on sale of marketable securities				(72	)			—
		Gain on sale of property and equipment				(246	)			—
		Accretion of discount and redemption premium on long-term debt				211				1,752
		Increase (decrease) in value of warrants				(384	)			5,466
		Non cash compensation related to stock options				35				285
		Deferred income taxes				3,495				(2,705	)
		Changes in operating assets and liabilities:
			Accounts receivable			15,480				(10,695	)
			Inventories			3,762				(4,894	)
			Prepaid expenses and other current assets			(387	)			(1,328	)
			Other assets			(46	)			(239	)
			Accounts payable			(5,175	)			6,378
			Deferred revenue			(9,423	)			5,187
			Accrued compensation and related liabilities			(4,369	)			1,311
			Accrued income taxes			(6,694	)			3,237
			Other accrued expenses			(1,833	)			(9	)
			Other liabilities			2				35
			Net cash provided by (used in) operating activities			(4,125	)			19,377
Cash flows from investing activities:
	Purchases of marketable securities					(26	)			(13,000	)
	Sale of property and equipment					659				—
	Capital expenditures					(5,654	)			(1,840	)
			Net cash used in investing activities			(5,021	)			(14,840	)
Cash flows from financing activities:
	Payments of long-term debt					—				(30,595	)
	Payments of capital lease obligations					(82	)			(184	)
	Redemption of redeemable preferred stock					—				(32,500	)
	Proceeds from issuance of common stock, net of issuance costs					—				86,680
			Net cash provided by (used in) financing activities			(82	)			23,401
Net increase (decrease) in cash and cash equivalents						(9,228	)			27,938
Cash and cash equivalents at beginning of period						17,303				9,976
Cash and cash equivalents at end of period					$	8,075			$	37,914

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1.	The Company

2.	Summary of Significant Accounting Policies

	Basis of Presentation

	Preparation of Financial Statements and Use of Estimates

	Unaudited Interim Results

F-5

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	Stock Options

3.	Inventories

		September 30,				June 30,
		2005				2006
Raw materials		$	7,683			$	6,790
Work-in-process			1,865				7,698
Finished goods			7,434				5,965
Inventory at customers under purchase orders			725				2,148
		$	17,707			$	22,601

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4.	Initial Public Offering

	Recapitalization

	Common Stock

	Preferred Stock

	Series A Convertible Preferred Stock/ Redeemable Preferred Stock

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	Long-term Debt

	Senior Subordinated Convertible Notes/ Senior Subordinated Notes

	Warrants

5.	Long-Term Debt

		September 30,				June 30,
		2005				2006
Senior Subordinated Convertible Notes, net of discount of $1,157 at September 30, 2005		$	28,843			$	—
Capital lease obligations			890				706
		$	29,733			$	706
Less current portion of capital lease obligations			(249	)			(258	)
		$	29,484			$	448

6.	Net Income Per Share

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				Three Months Ended June 30,								Nine Months Ended June 30,
				2005				2006				2005				2006
Net income (loss)				$	(930	)		$	9,672			$	76			$	13,319
Basic EPS:
	Adjustments to income:
		Retained earnings adjustment for conversion of redeemable preferred stock			—				—				—				(11,430	)*
		Net income allocated to convertible preferred shares			—				—				(47	)			—
	Income (loss) available to common stockholders				(930	)			9,672				29				1,889
	Weighted-average common shares outstanding				5,396,248				20,651,934				5,396,248				11,782,483
	Basic net income (loss) per common share			$	(0.17	)		$	0.47			$	0.01			$	0.16
Diluted EPS:
	Adjustments to income:
		Dividend on redeemable preferred stock — as converted		$	—**			$	—			$	(1,234	)		$	(406	)
		Warrant value adjustment			—**				—				(384	)			—**
	Income (loss) available to common stockholders			$	(930	)		$	9,672			$	(1,542	)		$	1,483
	Weighted-average common shares outstanding				5,396,248				20,651,934				5,396,248				11,782,483
	Plus impact of convertible preferred stock and warrants and stock options, as applicable				—**				285,069				9,116,644				5,191,071
Diluted common shares					5,396,248				20,937,003				14,512,892				16,973,554
Diluted net income (loss) per common share				$	(0.17	)		$	0.46			$	(0.11	)		$	0.09

*	The difference between the fair market value of the Redeemable Preferred Stock at date of issue of $21,070 and the redemption price of $32,500 was charged to retained earnings in March 2006, when the redemption occurred. This adjustment is used to reduce net income to arrive at income available to common stockholders for purposes of calculating earnings per common share in accordance with EITF

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	Topic D-42 — “The Effect on the Calculation of Earnings per Share for the Redemption or Induced Conversion of Preferred Stock”.

**	This element of the diluted EPS computation is not applicable since the impact on the computation would be anti-dilutive.

7.	Income Taxes

8.	Stock Option Plans

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							Weighted
			Outstanding				Average
			Options				Exercise Price
Outstanding at September 30, 2005				703,111			$	8.29
	Granted			350,000				10.84
	Exercised			(13,750	)			6.73
	Forfeited			(274,861	)			8.89
Outstanding at June 30, 2006				764,500			$	9.27

							Weighted
							Average
							Grant-Date
Non-Vested Options			Options				Fair Value
Non-vested at September 30, 2005				—			$	—
	Granted			350,000				5.21
	Vested			(47,639	)			3.69
	Forfeited			—				—
Non-vested at June 30, 2006				302,361			$	5.44

		Options Outstanding												Options Vested
						Weighted-				Weighted-								Weighted-
						Average				Average								Average
		Number				Remaining				Exercise				Number				Exercise
Exercise Price		Outstanding				Life				Price				Exercisable				Price
$6.00 - $ 7.00			319,500				8.41			$	6.32				122,833			$	6.25
$8.00 - $10.00			383,611				8.83			$	9.92				132,257			$	10.00
			703,111												255,090

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		Options Outstanding												Options Vested
						Weighted-				Weighted-								Weighted-
						Average				Average								Average
		Number				Remaining				Exercise				Number				Exercise
Exercise Price		Outstanding				Life				Price				Exercisable				Price
$6.00 - $7.00			309,500				8.08			$	6.56				151,531			$	6.45
$8.00 - $10.00			240,000				8.33			$	9.46				100,208			$	9.88
$11.00 - $13.00			190,000				9.64			$	12.58				24,722			$	11.40
$14.00 - $16.00			25,000				9.83			$	15.80				—			$	—
			764,500												276,461

9.	Commitments and Contingencies

	Contingencies

	Product Warranty

			Nine Months
			Ended June 30,
			2005				2006
Balance at beginning of period			$	1,271			$	563
	Warranty expenditures			(1,142	)			(727	)
	Provisions for warranty			441				987
Balance at end of period			$	570			$	823

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FF-1

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					September 30,
					2004				2005
ASSETS
	Current assets:
		Cash and cash equivalents			$	17,303			$	9,976
		Marketable securities				6,430				12,700
		Accounts receivable, net of allowances, of $1,220 and $1,240				23,535				9,202
		Inventories				27,666				17,707
		Deferred income taxes				9,703				3,426
		Prepaid expenses and other current assets				158				548
			Total current assets			84,795				53,559
	Property, plant and equipment, net					6,633				12,135
	Other assets					324				477
			Total assets		$	91,752			$	66,171
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
	Current liabilities:
		Accounts payable			$	6,877			$	1,523
		Current portion of long-term debt				—				249
		Deferred revenue				18,884				3,419
		Accrued compensation and related liabilities				6,361				3,103
		Accrued income taxes				8,206				767
		Other accrued expenses				5,191				2,881
			Total current liabilities			45,519				11,942
	Long-term liabilities:
		Long-term debt, less current portion				28,561				29,484
		Redeemable warrants				3,266				2,667
		Deferred income taxes				753				1,272
		Other long-term liabilities				86				393
			Total long-term liabilities			32,666				33,816
	Series A convertible preferred stock, par value $0.01 per share, 3,437 shares authorized and 3,436 shares issued as of September 30, 2004 and September 30, 2005					65,000				65,000
	Stockholders’ equity (deficit):
		Common stock, par value $0.01 per share, 15,195,325 and 15,495,325 shares authorized as of September 30, 2004 and 2005, respectively; 5,396,248 outstanding as of September 30, 2004 and 2005				54				54
		Additional paid in capital				156				156
		Accumulated deficit				(52,084	)			(44,665	)
		Deferred stock compensation expense				(180	)			(132	)
		Accumulated other comprehensive income				621				—
			Total stockholders’ equity (deficit)			(51,433	)			(44,587	)
			Total liabilities and stockholders’ equity (deficit)		$	91,752			$	66,171

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				Year Ended September 30,
				2003				2004				2005
Net revenue				$	55,766			$	111,210			$	63,477
Cost of goods sold					20,457				37,337				26,596
	Gross profit				35,309				73,873				36,881
Operating expenses
	Selling, general and administrative				16,491				23,932				21,066
	Research and development				3,113				6,051				7,883
	Write-off of offering expenses				—				1,858				—
		Operating income			15,705				42,032				7,932
Interest expense					31				3,887				3,910
Other (income) and expense
	Income from marketable securities				(502	)			(438	)			(2,017	)
	Investment impairments				18				9				18
	Increase (decrease) in value of warrants				—				1,548				(599	)
	Other (income) and expense, net				(152	)			21				(275	)
	Income before taxes				16,310				37,005				6,895
Provision (benefit) for income taxes					6,706				14,952				(524	)
	Net income			$	9,604			$	22,053			$	7,419
Net income per share, basic				$	0.67			$	1.58			$	0.53
Net income per share, diluted				$	0.67			$	1.46			$	0.36
Weighted average shares outstanding, basic					14,365,017				5,396,248				5,396,248
Weighted average shares outstanding, diluted					14,390,337				14,009,533				14,513,227
Comprehensive Income:
	Net income			$	9,604			$	22,053			$	7,419
	Unrealized gain/(loss) on marketable securities, net of taxes				278				104				—
	Realized net gain on marketable securities, net of taxes				—				—				(621	)
Comprehensive income				$	9,882			$	22,157			$	6,798

FF-3

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																		Deferred				Accumulated
		Common Stock								Retained				Additional				Stock				Other				Total
										Earnings				Paid In				Compensation				Comprehensive				Stockholders’
		Shares				Amount				(Deficit)				Capital				Expense				Income				Equity (Deficit)
Balance at September 30, 2002			14,390,000			$	6			$	26,798			$	—			$	—			$	239			$	27,043
Net income			—				—				9,604				—				—				—				9,604
Dividends paid and declared ($1.08 per share)			—				—				(15,545	)			—				—				—				(15,545	)
Recapitalization			(8,993,752	)			(6	)			(94,994	)			—				—				—				(95,000	)
Unrealized gain on marketable securities, net of taxes of $185																							278				278
Balance at September 30, 2003			5,396,248			$	—			$	(74,137	)		$	—			$	—			$	517			$	(73,620	)
Net income			—				—				22,053				—				—				—				22,053
Recapitalization			—				54				—				(54	)			—				—				—
Deferred compensation expense related to issuance of stock options			—				—				—				210				(210	)			—				—
Compensation expense related to stock options			—				—				—				—				30				—				30
Unrealized gain on marketable securities, net of taxes of $69			—				—				—				—				—				104				104
Balance at September 30, 2004			5,396,248			$	54			$	(52,084	)		$	156			$	(180	)		$	621			$	(51,433	)
Net income			—				—				7,419				—				—				—				7,419
Compensation expense related to stock options			—				—				—				—				48				—				48
Reclassification adjustment for realized gain on marketable securities, net of taxes $(450)			—				—				—				—				—				(621	)			(621	)
Balance at September 30, 2005			5,396,248			$	54			$	(44,665	)		$	156			$	(132	)		$	—			$	(44,587	)

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					Year Ended September 30,
					2003				2004				2005
Cash flows from operating activities:
	Net income				$	9,604			$	22,053			$	7,419
	Adjustments to reconcile net income to net cash provided by (used in) operating activities:
		Depreciation and amortization				677				1,270				2,169
		Investment impairments				18				9				18
		Realized (gain) loss on sale of marketable securities				(149	)			(227	)			(1,616	)
		Gain on sale of property and equipment				—				—				(247	)
		Accretion of discount on long-term debt				—				279				282
		Increase (decrease) in value of warrants				—				1,548				(599	)
		Non cash compensation related to stock options				—				30				48
		Deferred income taxes				(762	)			(4,194	)			7,246
		Changes in operating assets and liabilities:
			Accounts receivable			(2,922	)			(15,556	)			14,333
			Inventories			(527	)			(16,133	)			9,959
			Prepaid expenses and other current assets			(133	)			92				(390	)
			Other assets			58				(29	)			(153	)
			Accounts payable			(375	)			2,746				(5,354	)
			Deferred revenue			2,159				11,233				(15,465	)
			Accrued compensation and related liabilities			2,446				2,190				(3,258	)
			Accrued income taxes			6,344				(421	)			(7,439	)
			Other accrued expenses			(88	)			3,486				(2,310	)
			Other liabilities			(1	)			27				310
			Net cash provided by operating activities			16,349				8,403				4,953
Cash flows from investing activities:
	Purchases of marketable securities					(9,149	)			(1,131	)			(12,700	)
	Proceeds from the sales of investments					12,951				10,835				6,957
	Sale of property and equipment					—				—				659
	Capital expenditures					(2,022	)			(4,614	)			(7,055	)
			Net cash provided by (used in) investing activities			1,780				5,090				(12,139	)
Cash flows from financing activities:
	Payments of long-term debt					(34	)			(294	)			—
	Payments of capital lease obligations					—				—				(141	)
	Common stock redemption					(95,000	)			—				—
	Proceeds from issuance of long-term debt					30,000				—				—
	Proceeds from issuance of preferred stock					65,000				—				—
	Dividends paid					(13,500	)			(2,045	)			—
			Net cash (used in) financing activities			(13,534	)			(2,339	)			(141	)
Net increase (decrease) in cash and cash equivalents						4,595				11,154				(7,327	)
Cash and cash equivalents at beginning of period						1,554				6,149				17,303
Cash and cash equivalents at end of period					$	6,149			$	17,303			$	9,976
Supplemental disclosures:
	Interest paid				$	32			$	2,700			$	3,628
	Income tax refunds					—				—				(3,266	)
	Income taxes paid					2,017				19,673				2,932
	Dividends declared but not paid					2,045				—				—
	Capital lease obligations					—				—				1,031

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1.	The Company

2.	Summary of Significant Accounting Policies

	Basis of Presentation

	Preparation of Financial Statements and Use of Estimates

	Revenue Recognition

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	Shipping and Handling Costs

	Product Warranty Costs

	Research and Development Costs

	Income Taxes

	Cash, Cash Equivalents and Marketable Securities

	Inventories

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	Property and Equipment

	Stock Options

		Year Ended September 30
		2003				2004				2005
As reported		$	9,604			$	22,053			$	7,419
Stock-based compensation expense, net of tax			—				18				28
Pro forma stock-based compensation expense, net of tax			—				(73	)			(113	)
Pro forma net income attributable to common stockholders		$	9,604			$	21,998			$	7,334

			Year Ended September 30
			2003				2004				2005
Pro forma net income per share attributable to common stockholders
	Basic		$	0.67			$	1.57			$	0.52
	Diluted		$	0.67			$	1.46			$	0.35
Net income per share attributable to common stockholders as reported
	Basic		$	0.67			$	1.58			$	0.53
	Diluted		$	0.67			$	1.46			$	0.36

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	Fair Value of Financial Instruments

	Recent Accounting Pronouncements

3.	Marketable Securities

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			Amortized				Unrealized				Unrealized				Market
			Cost				Gains				(Losses)				Value
September 30, 2004
	Government — Debt		$	2,975			$	359			$	—			$	3,334
	Corporate — Equities			2,076				728				(28	)			2,776
	Other			308				31				(19	)			320
			$	5,359			$	1,118			$	(47	)		$	6,430
September 30, 2005
	Government — Debt		$	—			$	—			$	—			$	—
	Corporate — Equities			—				—				—				—
	Auction rate securities			1,700				—				—				1,700
	Variable rate demand notes			11,000				—				—				11,000
				12,700				—				—				12,700

		September 30
		2004				2005
Less than 1 year		$	—			$	—
1 - 5 Years			—				—
5 - 10 Years			3,334				—
Over 10 Years			—				12,700
		$	3,334			$	12,700

		Year Ended
		September 30
		2003				2004				2005
Interest income		$	307			$	141			$	331
Dividend income			46				70				70
Net realized gains from sales of marketable securities			149				227				1,616
Income from marketable securities		$	502			$	438			$	2,017

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4.	Inventories

		September 30
		2004				2005
Raw materials		$	7,879			$	7,683
Work-in-process			7,310				1,865
Finished goods			8,749				7,434
Inventory at customers under purchase orders			3,728				725
		$	27,666			$	17,707

5.	Property and Equipment

		September 30								Depreciable
										Life
		2004				2005				(in Years)
Land		$	72			$	—				—
Buildings			649				161				30
Building improvements			811				127				10
Leasehold improvements			—				3,575				10
Equipment			7,345				10,672				3-5
Office furniture			537				1,636				5-7
Software			783				952				3
			10,197				17,123
Less accumulated depreciation			(3,564	)			(4,988	)
		$	6,633			$	12,135

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6.	Stockholders’ Equity and Preferred Stock

	Recapitalization

	Change in Authorized Shares — The Company’s Articles of Incorporation were amended to increase the authorized capital stock of the Company from 14,874 shares to 15,202,199 shares and authorized common shares from 20,000,000 shares with no par value to 15,195,325 shares with a par value of $.01 per share.
	Stock Dividend — Declared a common stock split in the form of a stock dividend. The common shares were split on a 2,500:1 basis for common shares outstanding at December 2, 2003.

	Common Stock

	Reserved Shares of Common Stock

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	Preferred Stock

	Series A Convertible Preferred Stock

	Redeemable Preferred Stock

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7.	Investment by TA Associates

8.	Long-Term Debt

		September 30
		2004				2005
Senior Subordinated Convertible Notes, net of discounts of $1,439 and $1,157 at September 30, 2004 and 2005, respectively		$	28,561			$	28,843
Capital lease obligations			—				890
		$	28,561			$	29,733
Less current portion of capital lease obligations			—				(249	)
		$	28,561			$	29,484

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9.	Net Income Per Share

				Year Ended September 30
				2003				2004				2005
Net income				$	9,604			$	22,053			$	7,419
Basic EPS:
	Adjustments to income:
		Net income allocated to convertible preferred shares			—				(13,544	)			(4,557	)
	Income available to common shareholders				9,604				8,509				2,862
	Weighted-average common share outstanding				14,365,017				5,396,248				5,396,248
	Basic net income per share			$	0.67			$	1.58			$	0.53
Diluted EPS:
	Adjustments to Income:
		Dividend on Redeemable Preferred stock as converted — 5% cumulative		$	—			$	(1,656	)		$	(1,656	)
		Warrant value adjustment			—				—*				(599	)
	Income available to common shareholders			$	9,604			$	20,397			$	5,164
	Weighted-average common shares outstanding				14,365,017				5,396,248				5,396,248
	Plus impact of convertible preferred stock and warrants and stock options, as applicable				25,320				8,613,285				9,116,979
Diluted common shares					14,390,337				14,009,533				14,513,227
Diluted EPS				$	0.67			$	1.46			$	0.36

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10.	Income Taxes

			Year Ended
			September 30
			2003				2004				2005
Current:
	Federal		$	5,682			$	15,433			$	(5,400	)
	State			1,786				3,866				(1,920	)
Total current				7,468				19,299				(7,320	)
Deferred:
	Federal			(580	)			(3,476	)			5,013
	State			(182	)			(871	)			1,783
Total deferred				(762	)			(4,347	)			6,796
Total income tax expense			$	6,706			$	14,952			$	(524	)

		September 30
		2003				2004				2005
Federal statutory rate			35.0	%			35.0	%			35.0	%
State income taxes, net of federal income tax effect			6.4				5.2				3.7
Capital loss carryover			—				—				(2.0	)
Research and development tax credits			(0.4	)			(0.3	)			(1.8	)
Nondeductible increase (decrease) in value of warrants			—				1.7				(3.4	)
Extraterritorial income exclusion			—				(1.1	)			(3.0	)
Provision to return adjustments			—				—				(23.0	)
Reduction in tax accrual			—				—				(13.8	)
Other			0.1				(0.1	)			0.7
Effective tax rate			41.1	%			40.4	%			(7.6	)%

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			September 30
			2004				2005
Deferred tax assets:
	Allowance for accounts receivable		$	491			$	491
	Impairment losses on marketable securities			335				8
	Inventory valuation reserves			2,304				2,027
	Deferred revenue			6,132				494
	Other accrued expenses			872				406
Total deferred tax assets				10,134				3,426
Deferred tax liabilities:
	Depreciation			(753	)			(1,272	)
	Unrealized gain on marketable securities			(431	)			—
Total deferred tax liabilities				(1,184	)			(1,272	)
Net deferred tax assets			$	8,950			$	2,154

11.	Employee Benefit Plans

	Employee Stock Ownership Plan

	Other Compensation Plans

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12.	Stock Option Plan

			Outstanding				Weighted Average
			Options				Exercise Price
Outstanding at September 30, 2003				—				—
	Granted			664,500			$	8.37
	Exercised			—				—
	Forfeited			—				—
Outstanding at September 30, 2004				664,500			$	8.37
	Granted			45,000				7.33
	Exercised			—				—
	Forfeited			(6,389	)			10.00
Outstanding at September 30, 2005				703,111			$	8.29

Options Outstanding																Options Vested
								Weighted-				Weighted-								Weighted-
Exercise				Number				Average				Average				Number				Average
Price				Outstanding				Remaining Life				Exercise Price				Exercisable				Exercise Price
	$6.00-$7.00				319,500				8.41			$	6.32				122,833			$	6.25
	$8.00-$10.00				383,611				8.83			$	9.92				132,257			$	10.00
					703,111												255,090

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13.	Concentration of Credit Risk

		Years Ended
		September 30
		2003				2004				2005
National Semiconductor Corporation			38.8	%			36.1	%			*
Texas Instruments Incorporated			*				31.9				44.3	%
Intersil Corporation			20.0				*				*
			58.8	%			68.0	%			44.3	%

	*	Less than 10%

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14.	Other Comprehensive Income

		Year Ended
		September 30
		2003				2004				2005
Change in net unrealized holdings gains (losses) on marketable securities, net of tax of $238, $160, and $0 in 2003, 2004, and 2005, respectively		$	358			$	240			$	—
Less adjustment for net gain (loss) on investments included in net income, net of tax of $53, $91, and $450 in 2003, 2004, and 2005, respectively			80				136				621
Other comprehensive income, net of taxes		$	278			$	104			$	(621	)

15.	Industry and Geographic Segment Information

	Operating Segments

	Geographic Information

		Year Ended September 30
		2003				2004				2005
United States		$	23,503			$	24,031			$	29,295
Malaysia			18,642				56,720				13,602
Other			13,621				30,459				20,580

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16.	Commitments and Contingencies

	Lease Commitments

		September 30, 2005
		Operating				Capital
		Leases				Leases
2006		$	2,119			$	286
2007			2,048				286
2008			1,780				276
2009			1,584				117
2010			1,574				2
Thereafter			5,857				—
Total minimum lease payments		$	14,962				967
Less amount representing interest							(77	)
Present value of capital lease obligations						$	890

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	Product Warranty

Product Warranty Activity
Balance at September 30, 2002			$	220
	Warranty expenditures			(605	)
	Provision for warranty			885
Balance at September 30, 2003				500
	Warranty expenditures			(862	)
	Provision for warranty			1,633
Balance at September 30, 2004				1,271
	Warranty expenditures			(1,416	)
	Provision for warranty			708
Balance at September 30, 2005			$	563

17.	Related Party Transactions

18.	Write-off of Offering Expenses

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Banc of America Securities LLC	Lehman Brothers	Deutsche Bank Securities

A.G. Edwards	Canaccord Adams