DDi (DDIC)

Gross Profit

Gross profit for the first quarter of 2009 was $7.3 million, or 18.5% of net sales, compared to $9.7 million, or 20.6% of net sales, for the same period in 2008. The decrease in gross profit was primarily due to less efficient absorption of fixed costs on lower net sales, partially offset by decreases in material and labor costs.

Gross Profit

Gross profit for 2008 was $38.8 million, or 20.3% of net sales, compared to $34.9 million, or 19.3% of net sales, in 2007. The increase in gross profit as a percentage of net sales was primarily a function of better absorption of overhead on higher sales, improved operational performance related to yields and overage, and to a lesser extent, to slightly higher unit pricing relative to the product mix shift towards higher technology products. These improvements were partially offset by an increase in depreciation expense related to capital equipment upgrades to increase our technological capabilities as well as expanded capacity in certain manufacturing process areas and to an increase in non-cash compensation and factory and management compensation expenses.

Gross Profit

Gross profit for 2008 was $38.8 million, or 20.3% of net sales, compared to $34.9 million, or 19.3% of net sales, in 2007. The increase in gross profit as a percentage of net sales was primarily a function of better absorption of overhead on higher sales, improved operational performance related to yields and overage, and to a lesser extent, to slightly higher unit pricing relative to the product mix shift towards higher technology products. These improvements were partially offset by an increase in depreciation expense related to capital equipment upgrades to increase our technological capabilities as well as expanded capacity in certain manufacturing process areas and to an increase in non-cash compensation and factory and management compensation expenses.

Gross Profit

Gross
profit for 2008 was $38.8 million, or 20.3% of net sales, compared to $34.9 million, or 19.3% of net sales, in 2007. The increase in gross profit as a percentage of net sales was primarily a function of better absorption of overhead on
higher sales, improved operational performance related to yields and overage, and to a lesser extent, to slightly higher unit pricing relative to the product mix shift towards higher technology products. These improvements were partially offset by
an increase in depreciation expense related to capital equipment upgrades to increase our technological capabilities as well as expanded capacity in certain manufacturing process areas and to an increase in non-cash compensation and factory and
management compensation expenses.

Gross Profit

Gross
profit for 2008 was $38.8 million, or 20.3% of net sales, compared to $34.9 million, or 19.3% of net sales, in 2007. The increase in gross profit as a percentage of net sales was primarily a function of better absorption of overhead on
higher sales, improved operational performance related to yields and overage, and to a lesser extent, to slightly higher unit pricing relative to the product mix shift towards higher technology products. These improvements were partially offset by
an increase in depreciation expense related to capital equipment upgrades to increase our technological capabilities as well as expanded capacity in certain manufacturing process areas and to an increase in non-cash compensation and factory and
management compensation expenses.

Gross Profit

Gross profit for 2007 was $34.9 million, or 19.3% of net sales, compared to $37.9 million, or 19.1% of net sales, in 2006. Excluding the impact of the divested assembly business, PCB gross margin decreased from approximately 20.5% of net sales in 2006. The decrease in PCB gross profit as a percentage of sales was primarily due to: (i) higher material costs as a percentage of sales due to a shift in mix to higher technology products and to raw material price increases; (ii) an increase in depreciation expense related to capital equipment upgrades to increase our technological capabilities as well as expand capacity in certain manufacturing process areas; and (iii) lower overall plant capacity utilization. These increases were partially offset by a decrease in factory and management incentive bonus compensation.

Gross Profit

Gross profit for 2007 was $34.9 million, or 19.3% of net sales, compared to $37.9 million, or 19.1% of net sales, in 2006. Excluding the impact of the divested assembly business, PCB gross margin decreased from approximately 20.5% of net sales in 2006. The decrease in PCB gross profit as a percentage of sales was primarily due to: (i) higher material costs as a percentage of sales due to a shift in mix to higher technology products and to raw material price increases; (ii) an increase in depreciation expense related to capital equipment upgrades to increase our technological capabilities as well as expand capacity in certain manufacturing process areas; and (iii) lower overall plant capacity utilization. These increases were partially offset by a decrease in factory and management incentive bonus compensation.

Gross Profit

Gross profit for 2007 was $34.9 million, or 19.3% of net sales, compared to $37.9 million, or 19.1% of net sales, in 2006.
Excluding the impact of the divested assembly business, PCB gross margin decreased from approximately 20.5% of net sales in 2006. The decrease in PCB gross profit as a percentage of sales was primarily due to: (i) higher material costs as a
percentage of sales due to a shift in mix to higher technology products and to raw material price increases; (ii) an increase in depreciation expense related to capital equipment upgrades to increase our technological capabilities as well as
expand capacity in certain manufacturing process areas; and (iii) lower overall plant capacity utilization. These increases were partially offset by a decrease in factory and management incentive bonus compensation.

Gross Profit

Gross profit for 2007 was $34.9 million, or 19.3% of net sales, compared to $37.9 million, or 19.1% of net sales, in 2006.
Excluding the impact of the divested assembly business, PCB gross margin decreased from approximately 20.5% of net sales in 2006. The decrease in PCB gross profit as a percentage of sales was primarily due to: (i) higher material costs as a
percentage of sales due to a shift in mix to higher technology products and to raw material price increases; (ii) an increase in depreciation expense related to capital equipment upgrades to increase our technological capabilities as well as
expand capacity in certain manufacturing process areas; and (iii) lower overall plant capacity utilization. These increases were partially offset by a decrease in factory and management incentive bonus compensation.

Gross Profit

Gross profit for the nine months ended September 30, 2008 was $30.3 million, or 20.5% of net sales, compared to $27.0 million, or 19.9% of net sales, for the same period in 2007. The increase in the gross profit percentage from the prior year was primarily a function of higher sales volume, improved average pricing related to the mix of product shipped, and improved operational performance and cost reduction initiatives.

Gross Profit

Gross profit for the six months ended June 30, 2008 was $20.1 million, or 20.4% of net sales, compared to $19.3 million, or 20.8% of net sales for the same period in 2007. The decrease in the gross profit percentage from the prior year was primarily due to higher labor costs including overtime. As we experienced an increase in demand in the latter part of the first quarter and into the second quarter, we ramped up quickly by adding extra headcount and incurring more overtime to meet demand, which drove labor costs higher and resulted in labor inefficiencies as new employees were trained and became fully productive. To a lesser extent, increased utilities and maintenance costs as well as higher depreciation expense also added to the reduction in the gross profit percentage.

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Table of Contents

Gross Profit

Gross profit for the first quarter of 2008 was $9.7 million, or 20.6% of net sales, compared to $8.0 million, or 18.4% of net sales, for the same period in 2007. The increase in gross profit was primarily due to an increase in volume of shipments, an improvement in average pricing attributed to a shift in mix to higher technology-based products, and better absorption of fixed costs, partially offset by an increase in management and factory performance incentives accrued in the first quarter of 2008 compared to the first quarter of 2007.

Gross Profit

Gross profit was $37.9 million, or 19.1% of net sales, in 2006 compared to $26.7 million, or 14.4% of net sales in 2005. The increase in gross profit in 2006 compared to 2005 was primarily the result of: (i) higher 2006 revenue as compared to 2005 resulting in a higher contribution margin; (ii) a $3.0 million reduction in non-cash compensation; (iii) operational efficiencies and reduction of fixed costs associated with the closure of our Arizona facility in 2005; (iv) a $1.3 million restructuring related inventory impairment charge incurred in 2005 associated with the closure of our Arizona facility that was not incurred in 2006; and (v) a reduction of certain administrative and technology resources in 2006 previously focused on production and operations activities. Offsetting these items in 2006 was incentive bonus compensation of approximately $900,000.

Gross Profit

SIZE="2">Gross profit was $37.9 million, or 19.1% of net sales, in 2006 compared to $26.7 million, or 14.4% of net sales in 2005. The increase in gross profit in 2006 compared to 2005 was primarily the result of: (i) higher 2006
revenue as compared to 2005 resulting in a higher contribution margin; (ii) a $3.0 million reduction in non-cash compensation; (iii) operational efficiencies and reduction of fixed costs associated with the closure of our Arizona
facility in 2005; (iv) a $1.3 million restructuring related inventory impairment charge incurred in 2005 associated with the closure of our Arizona facility that was not incurred in 2006; and (v) a reduction of certain administrative
and technology resources in 2006 previously focused on production and operations activities. Offsetting these items in 2006 was incentive bonus compensation of approximately $900,000.

FACE="Times New Roman" SIZE="2">Non-Cash Compensation

The following table sets forth select data related to non-cash compensation
(in thousands):

In 2006, non-cash compensation expense was recorded in accordance with the fair value recognition
provisions of SFAS 123R using the modified prospective application transition method. Under this transition method, stock-based compensation cost recognized in 2006 included: (i) compensation cost for all unvested stock-based awards
granted prior to January 1, 2006 based on the grant-date fair value estimated in accordance with the original provisions of SFAS 123, net of estimated forfeitures; and (ii) compensation cost for all stock-based awards granted or
modified subsequent to January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of SFAS 123R, net of estimated forfeitures. In 2005, non-cash compensation related to amortization of deferred
compensation net of actual forfeitures for stock options that were granted with exercise prices that were less than the fair market value of our common stock at the date of grant and restricted stock.

Gross Profit

Gross profit for the nine months ended September 30, 2007 was 19.9% of net sales compared to 19.0% of total net sales and 20.8% of PCB sales for the same period in 2006. The decrease in gross profit as a percentage of net PCB sales was primarily due to higher material costs as a percentage of sales due to a shift in mix to higher technology products and to raw material price increases, as well as to lower capacity utilization.

Gross Profit

Gross margin for the six months ended June 30, 2007 was 20.8% of net sales compared to 19.7% of net sales and 20.9% of PCB sales for the same period in 2006. While the PCB gross margin percentage was essentially flat on higher sales volumes and higher average pricing attributed to the change in mix to higher technology-based products, there were offsetting factors including higher material costs and a $175,000 increase in management and factory performance incentives accrued in the first half of 2007 compared to the same period in 2006.