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Quarterly Results of OperationsThe following table sets forth, for the periods indicated, data regarding our revenues, operatingexpenses and net income (loss). We derived this data from our unaudited consolidated financialstatements and, in the opinion of management, this data includes all adjustments, consisting only ofnormal recurring entries, that are necessary for a fair presentation of our financial position and resultsof operations for these periods. The operating results in any quarter are not necessarily indicative ofthe results that may be expected for any future period.Three Months EndedNovember 30, August 31, May 31, February 28, November 30, August 31, May 31, February 29,2005 2005 2005 2005 2004 2004 2004 2004(unaudited)(U.S. dollars in thousands)Revenues .......... $203,564 $163,918 $169,604 $ 142,523 $116,701 $ 114,906 $108,122 $119,285Cost of revenues—noncashequitycompensation ...... — — — — 36 7,791 — —Cost of revenues—other . 159,334 130,788 132,353 112,840 92,451 88,848 84,884 90,375Gross profit ......... 44,230 33,130 37,251 29,683 24,214 18,267 23,238 28,910Operating expenses:Research anddevelopment—developmentarrangement ..... — — — — — — — (6,000)Research anddevelopment—noncashequitycompensation ..... — — — — 83 23,876 — —Research anddevelopment—other 16,845 14,062 12,858 10,562 10,597 9,660 9,222 7,950Selling, general andadministrative—noncashequitycompensation ..... 207 240 191 190 478 135,885 — —Selling, general andadministrative—other .......... 11,531 9,164 8,914 8,405 7,884 7,538 6,257 6,358Amortization ofintangible assets . . . 1,658 834 328 398 397 378 362 —In-process researchand development . . 1,000 — 2,230 — 852 — — —Other costs ......... — — — — (201) 726 439 1,424Total operating expenses . 31,241 24,300 24,521 19,555 20,090 178,063 16,280 9,732Operating income (loss) . 12,989 8,830 12,730 10,128 4,124 (159,796) 6,958 19,178Interest income(expense), net ...... 156 351 320 349 147 77 (20) 848Income (loss) beforeincome taxes ....... 13,145 9,181 13,050 10,477 4,271 (159,719) 6,938 20,026Provision (benefit) forincome taxes ....... (394) 1,324 2,000 1,034 (3,937) (6,338) 1,881 2,155Net income (loss) fromcontinuing operations . $ 13,539 $ 7,857 $ 11,050 $ 9,443 $ 8,208 $(153,381) $ 5,057 $ 17,871Our operating results have varied on a quarterly basis during our history. We expect to experiencesignificant fluctuations in our future operating results due to a variety of factors, many of which we donot control. Factors that may affect our operating results include: the loss of significant customers; the54