SECURITIES AND EXCHANGE
    COMMISSION
 Washington, D.C.
    20549
    FORM 10-Q
  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF  THE SECURITIES EXCHANGE ACT OF 1934For the quarter ended March 31,
    2009ORTRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934   Commission File
    No. 0-30821
  TELECOMMUNICATION SYSTEMS,
    INC.
   MARYLAND(State or Other Jurisdiction ofIncorporation or Organization)275 West Street, Annapolis, MD(Address of principal executive offices)

52-1526369(I.R.S. Employer Identification No.)21401(Zip Code)   (410) 263-7616
   þ o
  Regulation S-T o þ
  12b-2
  Large accelerated filer o

Accelerated filer þ

Non-accelerated filero
    (Do not check if a smaller reporting company)

Smaller reporting company o   Rule 12b-2 o þ
    Shares outstandingas of March 31,Title of Each Class

2009Class A Common Stock, par value$0.01 per share


39,312,542Class B Common Stock, par value$0.01 per share


6,626,334Total Common Stock Outstanding


45,938,876




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##### 





INDEX
  TELECOMMUNICATION
    SYSTEMS, INC.
   
 PagePART I. FINANCIAL INFORMATIONItem 1.


Financial Statements (Unaudited)Consolidated Statements of Operations for the
    three-months ended March 31, 2009 and 2008


1Consolidated Balance Sheets as of March 31,
    2009 and December 31, 2008


2Consolidated Statement of Stockholders
    Equity for the three-months ended March 31, 2009


3Consolidated Statements of Cash Flows for the
    three-months ended March 31, 2009 and 2008


4Notes to Consolidated Financial Statements


5Item 2.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


16Item 3.


Quantitative and Qualitative Disclosures About
    Market Risk


27Item 4.


Controls and Procedures


27PART II. OTHER INFORMATIONItem 1.


Legal Proceedings


28Item 1A.


Risk Factors


29Item 2.


Unregistered Sales of Equity Securities and Use
    of Proceeds


29Item 3.


Defaults Upon Senior Securities


29Item 4.


Submission of Matters to a Vote of Security
    Holders


29Item 5.


Other Information


29Item 6.


Exhibits


29SIGNATURES


30




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##### 



TeleCommunication
    Systems, Inc.Consolidated Statements of Operations
    (amounts in thousands, except per share data)
    (unaudited)
  Three Months EndedMarch 31,2009


2008RevenueServices

$
30,624


$
22,766Systems


39,877



17,647Total revenue


70,501



40,413Direct costs of revenueDirect cost of services


18,369



13,658Direct cost of systems, including amortization of software
    development costs of $560 and $409, respectively


26,888



7,191Total direct cost of revenue


45,257



20,849Services gross profit


12,255



9,108Systems gross profit


12,989



10,456Total gross profit


25,244



19,564Operating costs and expensesResearch and development expense


4,874



4,088Sales and marketing expense


3,991



3,099General and administrative expense


6,892



5,318Depreciation and amortization of property and equipment


1,454



1,490Amortization of acquired intangible assets


37



37Total operating costs and expenses


17,248



14,032Operating income


7,996



5,532Interest expense


(188
)


(329
)Amortization of debt discount and debt issuance expenses


(5
)


(124
)Other income/(expense), net


179



(413
)Income before income taxes


7,982



4,666Provision for income taxes


(3,115
)


(48
)Net income

$
4,867


$
4,618Net income per share-basic

$
0.11


$
0.11Net income per share-diluted

$
0.10


$
0.11Weighted average shares outstanding-basic


45,567



42,273Weighted average shares outstanding-diluted


51,225



43,778    1




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##### 



TeleCommunication
    Systems, Inc.
  Consolidated
    Balance Sheets
 (amounts in
    thousands, except share data)
  March 31,


December 31,2009


2008(unaudited)AssetsCurrent assets:Cash and cash equivalents

$
35,329


$
38,977Accounts receivable, net of allowance of $425 in 2009 and $285
    in 2008


58,528



61,827Unbilled receivables


20,826



21,797Inventory


3,957



2,715Deferred income taxes


9,736



9,736Other current assets


5,961



3,869Total current assets


134,337



138,921Property and equipment, net of accumulated depreciation and
    amortization of $42,722 in 2009 and $41,268 in 2008


12,803



12,391Software development costs, net of accumulated amortization of
    $7,432 in 2009 and $6,873 in 2008


2,356



2,773Acquired intangible assets, net of accumulated amortization of
    $693 in 2009 and $656 in 2008


525



562Goodwill


1,813



1,813Deferred income taxes


21,344



24,309Other assets


1,328



1,190Total assets

$
174,506


$
181,959Liabilities and stockholders equityCurrent liabilities:Accounts payable and accrued expenses

$
23,137


$
34,345Accrued payroll and related liabilities


7,292



17,243Deferred revenue


9,231



4,349Current portion of capital lease obligations and notes payable


4,182



3,837Total current liabilities


43,842



59,774Capital lease obligations and notes payable, less current portion


8,537



7,913Stockholders equity:Class A Common Stock; $0.01 par value:Authorized shares  225,000,000; issued and
    outstanding shares of 39,312,542 in 2009 and 38,527,234 in 2008


393



385Class B Common Stock; $0.01 par value:Authorized shares  75,000,000; issued and outstanding
    shares of 6,626,334 in 2009 and 6,876,334 in 2008


67



69Additional paid-in capital


243,541



240,559Accumulated other comprehensive income


12



12Accumulated deficit


(121,886
)


(126,753
)Total stockholders equity


122,127



114,272Total liabilities and stockholders equity

$
174,506


$
181,959    2




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##### 



TeleCommunication
    Systems, Inc.Consolidated Statement of Stockholders
    Equity
    (amounts in thousands, except share data)
    (unaudited)
  AccumulatedClass A


Class B


Additional


OtherCommon


Common


Paid-In


Comprehensive


AccumulatedStock


Stock


Capital


Income/(Loss)


Deficit


TotalBalance at January 1, 2009

$
385


$
69


$
240,559


$
12


$
(126,753
)

$
114,272Options exercised for the purchase of 519,867 shares of
    Class A Common Stock


5







1,927











1,932Issuance of 15,441 shares of Class A Common Stock
    under Employee Stock Purchase Plan


1







89











90Stock compensation expense










966











966Conversion of 250,000 shares of Class B Common Stock
    to Class A Common Stock


2



(2
)














Net income for the three-months ended March 31, 2009


















4,867



4,867Balance at March 31, 2009

$
393


$
67


$
243,541


$
12


$
(121,886
)

$
122,127    3




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##### 



TeleCommunication
    Systems, Inc.
 Consolidated
    Statements of Cash Flows
    (amounts in thousands)
    (unaudited)  Three Months EndedMarch 31,2009


2008Operating activities:Net income

$
4,867


$
4,618Adjustments to reconcile net income to net cash provided
    by/(used in) operating activities:Depreciation and amortization of property and equipment


1,454



1,490Amortization of acquired intangible assets


37



37Deferred tax provision


2,965



Non-cash stock compensation expense


966



975Amortization of software development costs


560



409Amortization of deferred financing fees


5



128Impairment of marketable securities






482Other non-cash (income)/expense


(6
)


14Changes in operating assets and liabilities:Accounts receivable, net


3,299



(3,325
)Unbilled receivables


971



2,459Inventory


(1,242
)


860Other current assets


(2,092
)


(2,093
)Other assets


(137
)


86Accounts payable and accrued expenses


(11,208
)


15Accrued payroll and related liabilities


(9,951
)


(1,115
)Deferred revenue


4,882



2,596Total net cash provided by/(used in) operating activities


(4,630
)


7,636Investing activities:Purchases of property and equipment, net of cash acquired


184



(442
)Capitalized software development costs


(143
)


(219
)Total net cash provided by/(used in) investing activities


41



(661
)Financing activities:Payments on long-term debt and capital lease obligations


(1,081
)


(4,584
)Proceeds from exercise of employee stock options and sale of
    stock


2,022



115Total net cash provided by/(used in) financing activities


941



(4,469
)Net increase/(decrease) in cash


(3,648
)


2,506Cash and cash equivalents at the beginning of the period


38,977



15,955Cash and cash equivalents at the end of the period

$
35,329


$
18,461    4




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##### 



TeleCommunication
    Systems, Inc.Notes to Consolidated Financial Statements
    March 31, 2009
    (amounts in thousands, except per share amounts)
    (unaudited)
  1.
    Basis of
    Presentation and Summary of Significant Accounting
    Policies  Basis of Presentation. Form 10-Q Regulation S-X. Form 10-K.
  Use of Estimates.
  Investments in Marketable Securities and Note
    Receivable.
  Other Comprehensive
    Income/(Loss).
  Stock-Based Compensation. Share Based
    Payment
  Earnings per share.
 5




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##### 



TeleCommunication
    Systems, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Three MonthsEndedMarch 31,2009


2008Basic weighted average common shares outstanding


45,567



42,273Dilutive options outstanding


5,160



1,035Dilutive warrants outstanding


498



470Diluted weighted average common shares outstanding used in the
    calculation of diluted income


51,225



43,778   Income Taxes.
      Fair Value of Financial Instruments.
 6




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##### 



TeleCommunication
    Systems, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Recent Accounting
    Pronouncements.
      Noncontrolling Interests in Consolidated Financial
    Statements, an amendment of ARB No. 51
  2.
    Stock-Based
    Compensation     7




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##### 



TeleCommunication
    Systems, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Three MonthsEnded March 31,2009


2008Stock compensation:Stock options granted at fair value

$
925


$
931Restricted stock


25



33Employee stock purchase plan


16



11Total stock compensation

$
966


$
975     Three Months Ended March 31,2009


2008Comm.


Gvmt


Total


Comm.


Gvmt


TotalStock compensation included in direct cost of revenue:Direct cost of services

$
270


$
121


$
391


$
301


$
129


$
430Direct cost of systems


45



186



231



45



172



217Total stock compensation included in direct costs of revenue

$
315


$
307


$
622


$
346


$
301


$
647   Three MonthsEndedMarch 31,2009


2008Stock compensation included in operating expenses:Research and development expense

$
225


$
213Sales and marketing expense


78



71General and administrative expense


41



44Total stock compensation included in operating expenses

$
344


$
328  8




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##### 



TeleCommunication
    Systems, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    WeightedAverageNumber of


Exercise(Share amounts in thousands)

Options


PriceOutstanding, beginning of year


11,676


$
3.77Granted


1,389


$
8.09Exercised


(520
)

$
3.72Forfeited


(119
)

$
4.46Outstanding, at March 31, 2009


12,426


$
4.25Exercisable, at March 31, 2009


7,439


$
3.92Vested and expected to vest at March 31, 2009


10,910


$
4.18Estimated weighted-average grant-date fair value of options
    granted during the year

$
4.58Weighted-average remaining contractual life of options
    outstanding at March 31, 2009


6.7 years   WeightedAverageNumber of


FairOptions


ValueNon-vested, beginning of year


5,368


$
2.21Forfeited


(109
)

$
2.82Vested


1,661


$
2.12Exercisable, at March 31, 2009


7,439


$
3.28Non-vested, at March 31, 2009


4,987


$
2.88     Weighted-AverageWeighted-Average


Remaining Contractual





Weighted-AverageOptions


Exercise Prices of


Life of Options


Options


Exercise Prices ofExercise Prices

Outstanding


Options Outstanding


Outstanding (Years)


Exercisable


Options Exercisable$ 1.07 - $ 2.61


2,787


$
2.41



6.34



2,296


$
2.40$ 2.61 - $ 5.21


6,150


$
3.35



6.71



3,273


$
3.33$ 5.21 - $ 7.82


2,085


$
6.76



4.96



1,840


$
6.75$ 7.82 - $10.42


1,399


$
8.09



9.79



25


$
8.30$10.42 - $26.05


5


$
23.37



1.16



5


$
23.3712,426











7,439    9




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##### 



TeleCommunication
    Systems, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Three Months Ended March 31,2009

2008Expected life (in years)

5.5

5.5Risk-free interest rate(%)

1.7%-1.9%

2.8%-3.28%Volatility(%)

63%-64%

66%-67%Dividend yield(%)

0%

0%   3.
    Supplemental
    Disclosure of Cash Flow Information        4.
    Fair Value
    Measurements            Fair Valueas of


Fair Value Measurements at 3/31/20093/31/2009


Using Fair Value HierarchyTotal


Level 1


Level 2


Level 3AssetsCash and cash equivalents

$
35,329


$
35,329


$



$
Marketable securities available-for-sale


78



78







$
35,407


$
35,407


$



$
    10




---



##### 



TeleCommunication
    Systems, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  5.
    Segment
    Information    ®
  ®
      Three Months Ended March 31,2009


2008Comm.


Gvmt


Total


Comm.


Gvmt


TotalRevenueServices

$
17,807


$
12,817


$
30,624


$
15,536


$
7,230


$
22,766Systems


7,763



32,114



39,877



10,706



6,941



17,647Total revenue


25,570



44,931



70,501



26,242



14,171



40,413Operating costs and expensesDirect cost of services


8,191



10,178



18,369



7,959



5,699



13,658Direct cost of systems


1,888



25,000



26,888



2,046



5,145



7,191Total direct costs


10,079



35,178



45,257



10,005



10,844



20,849Gross profitServices gross profit


9,616



2,639



12,255



7,577



1,531



9,108Systems gross profit


5,875



7,114



12,989



8,660



1,796



10,456Total gross profit

$
15,491


$
9,753


$
25,244


$
16,237


$
3,327


$
19,564   11




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##### 



TeleCommunication
    Systems, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Three Months EndedMarch 31,2009


2008Total segment gross profit

$
25,244


$
19,564Research and development expense


(4,874
)


(4,088
)Sales and marketing expense


(3,991
)


(3,099
)General and administrative expense


(6,892
)


(5,318
)Depreciation and amortization of property and equipment


(1,454
)


(1,490
)Amortization of acquired intangible assets


(37
)


(37
)Interest expense


(188
)


(329
)Amortization of debt discount and debt issuance expenses


(5
)


(124
)Other income/(expense), net


179



(413
)Income before income taxes


7,982



4,666Provision for income taxes


(3,115
)


(48
)Net income

$
4,867


$
4,618   6.
    Inventory  Mar. 31,


Dec. 31,2009


2008Component parts

$
3,197


$
1,763Finished goods


760



952Total inventory at period end

$
3,957


$
2,715   7.
    Acquired
    Intangible Assets and Capitalized Software Development
    Costs  March 31, 2009


December 31, 2008Gross








GrossCarrying


Accumulated





Carrying


AccumulatedAmount


Amortization


Net


Amount


Amortization


NetAcquired intangible assets:Customer Lists

$
606


$
550


$
56


$
606


$
521


$
85Trademarks & Patents


612



143



469



612



135



477Software development costs, including acquired technology


9,789



7,433



2,356



9,646



6,873



2,773Total

$
11,007


$
8,126


$
2,881


$
10,864


$
7,529


$
3,335Estimated future amortization expense:Nine-months ending December 31, 2009

$
1,279Year ending December 31, 2010

$
814Year ending December 31, 2011

$
255Year ending December 31, 2012

$
108Year ending December 31, 2013

$
108Thereafter

$
317$
2,881  12




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##### 



TeleCommunication
    Systems, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    8.
    Concentrations
    of Credit Risk and Major Customers      % of Total Revenue For the ThreeMonths EndedMarch 31,Customer

Segment

2009


2008U.S. Government

Government


48
%


24
%Customer A

Commercial


20
%


35
%   As of March 31, 2009Accounts


UnbilledCustomer

Segment

Receivable


ReceivablesU.S. Government

Government


40
%


56
%Customer A

Commercial


35
%


10
%   9.
    Lines of
    Credit and Financing Arrangements       13




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##### 



TeleCommunication
    Systems, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    3-year
    10.
    Income
    taxes      11.
    Commitments
    and Contingencies    No. 01-CV-9500.
 14




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##### 



TeleCommunication
    Systems, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Rule 10b-5 Rule 10b-5
     15




---



##### 



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Form 10-Q Form 10-Q). Form 10-Q Form 10-Q
    Critical
    Accounting Policies and Estimates
   16




---



##### 



Form 10-K Form 10-K). Form 10-Q
  Overview
    Form 10-K Form 10-Q.
  Indicators of Our
    Financial and Operating Performance
    
    Revenue and gross profit.  We derive revenue
    from the sales of systems and services including recurring
    monthly service and subscriber fees, maintenance fees, software
    licenses and related service fees for the design, development,
    and deployment of software and communication systems, and
    products and services derived from the delivery of information
    processing and communication systems to governmental agencies.
    Gross profit represents revenue minus direct cost of revenue,
    including certain non-cash costs.  The major items
    comprising our cost of revenue are compensation and benefits,
    third-party hardware and software, amortization of software
    development costs, non-cash stock-based compensation, and
    overhead expenses. The costs of hardware and third-party
    software are primarily associated with the delivery of systems,
    and fluctuate from period to period as a result of the relative
    volume, mix of projects, level of service support required and
    the complexity of customized products and services delivered.
    Amortization of software development costs, including acquired
    technology, is associated with the recognition of systems
    revenue from our Commercial Segment.
    Operating expenses.  Our operating expenses are
    primarily compensation and benefits, professional fees, facility
    costs, marketing and sales-related expenses, and travel costs as
    well as certain non-cash expenses such as non-cash stock
    compensation expense, depreciation and amortization of property
    and equipment, and amortization of acquired intangible assets. 17




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##### 




    Liquidity and cash flows.  The primary driver
    of our cash flows is the results of our operations. Important
    other sources of our liquidity are our leases secured for the
    purchase of equipment and potential borrowings under our credit
    lines.
    Balance sheet.  We view cash, working capital,
    and accounts receivable balances and days revenue in receivables
    outstanding as important indicators of our financial health.  Results of
    Operations
  Revenue and Cost
    of Revenue
    Commercial
    Segment:
  Three MonthsEnded March 31,


2009 vs. 2008($ in millions)

2009


2008


$


%Services revenue

$
17.8


$
15.5


$
2.3



15
%Systems revenue


7.8



10.7



(2.9
)


(27
)%Commercial Segment revenue


25.6



26.2



(0.6
)


(2
)%Direct cost of services revenue


8.2



7.9



0.3



4
%Direct cost of systems revenue


1.9



2.0



(0.1
)


(5
)%Commercial Segment cost of revenue


10.1



9.9



0.2



2
%Services gross profit


9.6



7.6



2.0



26
%Systems gross profit


5.9



8.7



(2.8
)


32
%Commercial Segment gross
    profit1

$
15.5


$
16.3


$
(0.8
)


(5
)%Segment gross profit as a percent of revenue


61
%


62
%     1 See

    discussion of segment reporting in Note 5 to the
    accompanying unaudited consolidated financial statements  Commercial
    Services Revenue, Cost of Revenue, and Gross Profit:
    ®
   18




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##### 



Commercial
    Systems Revenue, Cost of Revenue, and Gross Profit:
         19




---



##### 



Government
    Segment:
  Three MonthsEnded March 31,


2009 vs. 2008($ in millions)

2009


2008


$


%Services revenue

$
12.8


$
7.3


$
5.5



75
%Systems revenue


32.1



6.9



25.2



365
%Government Segment revenue


44.9



14.2



30.7



216
%Direct cost of services revenue


10.2



5.7



4.5



79
%Direct cost of systems revenue


25.0



5.1



19.9



390
%Government Segment cost of revenue


35.2



10.8



22.4



226
%Services gross profit


2.6



1.5



1.1



73
%Systems gross profit


7.1



1.8



5.3



294
%Government Segment gross
    profit1

$
9.7


$
3.3


$
6.4



194
%Segment gross profit as a percent of revenue


22
%


23
%     1 See

    discussion of segment reporting in Note 5 to the
    accompanying unaudited consolidated financial statements    Government
    Services Revenue, Cost of Revenue, and Gross Profit:
      Government
    Systems Revenue, Cost of Revenue, and Gross Profit:
  ®
 20




---



##### 



® 5-year
      Revenue
    Backlog
    Three MonthsEnded March 31,


2009 vs. 2008($ in millions)

2009


2008


$


%Commercial Segment

$
87.8


$
89.9


$
(2.1
)


(2
)%Government Segment


68.9



34.9



34.0



97
%Total funded contract backlog

$
156.7


$
124.8


$
31.9



26
%Commercial Segment

$
91.1


$
98.6


$
(7.5
)


(8
)%Government Segment


323.4



126.4



197.0



156
%Total backlog of orders and commitments, including customer
    options

$
414.5


$
225.0


$
189.5



84
%Expected to be realized within next 12 months

$
115.5


$
78.0


$
37.5



48
%   and/or
  Operating
    Expenses
  Research and
    development expense:
  Three MonthsEndedMarch 31,

2009 vs. 2008($ in millions)

2009

2008

$

%Research and development expense

$
4.9


$
4.1


$
0.8



20
%Percent of total revenue


7
%


10
%  21




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##### 



product-by-product
    Sales and
    marketing expense:
  Three MonthsEndedMarch 31,

2009 vs. 2008($ in millions)

2009

2008

$

%Sales and marketing expense

$
4.0


$
3.1


$
0.9



29
%Percent of total revenue


6
%


8
%    22




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##### 



General and
    administrative expense:
  Three MonthsEndedMarch 31,

2009 vs. 2008($ in millions)

2009

2008

$

%General and administrative expense

$
6.9


$
5.3


$
1.6



30
%Percent of total revenue


10
%


13
%     Depreciation and
    amortization of property and equipment:
  Three MonthsEndedMarch 31,

2009 vs. 2008($ in millions)

2009

2008

$

%Depreciation and amortization of property and equipment

$
1.5


$
1.5


$




Average gross cost of property and equipment during the period

$
54.6


$
48.0


$
6.6



14
%     Amortization of
    acquired intangible assets:
  Three MonthsEndedMarch 31

2009 vs. 2008($ in millions)

2009

2008

$

%Amortization of acquired intangible assets

$
0.1


$
0.1


$




     Interest
    expense:
  Three MonthsEndedMarch 31


2009 vs. 2008($ in millions)

2009


2008


$


%Interest expense incurred on notes payable

$
0.1


$
0.3


$
(0.2
)


(67
)%Interest expense incurred on capital lease obligations


0.1



0.1







NMAmortization of deferred financing fees






0.1



(0.1
)


(100
)%Total interest and financing expense

$
0.2


$
0.5


$
(0.3
)


(60
)%    23




---



##### 



Other
    income/(expense), net:
    Income
    taxes:
    Net
    income:
  Three MonthsEndedMarch 31,

2009 vs. 2008($ in millions)

2009

2008

$

%Net income

$
4.9


$
4.6


$
0.3



7
%    24




---



##### 



Liquidity and
    Capital Resources
  Three MonthsEndedMarch 31,


2009 vs. 2008($ in millions)

2009


2008


$


%Net cash and cash equivalents provided by/(used in):Income

$
4.9


$
4.6


$
0.3



7
%Non-cash charges


3.0



3.5



(0.5
)


(14
)%Deferred income tax provision


3.0







3.0



100
%Net changes in working capital including changes in other assets


(15.5
)


(0.5
)


(15.0
)


(3000
)%Operating activities


(4.6
)


7.6



(12.2
)


(161
)%Purchases of property and equipment, net of cash acquired


0.1



(0.4
)


0.5



125
%Capitalized software development costs


(0.1
)


(0.2
)


0.1



50
%Payments on long-term debt and capital lease payments


(1.1
)


(4.6
)


3.5



76
%Other financing activities


2.0



0.1



1.9



1900
%Net increase/(decrease) in cash

$
(3.7
)

$
2.5


$
(6.2
)


(248
)%Days revenue in receivables, including unbilled receivables


101



81   Capital resources:
  Sources and uses of cash:
  Operations:
  Investing activities:
  Financing activities:
   25




---



##### 



Off-Balance Sheet
    Arrangements
    Contractual
    Commitments
    Within 12


1-3


3-5


More than($ in millions)

Months


Years


Years


5 Years


TotalNotes payable

$
2.5


$
4.5


$
0.7


$



$
7.7Capital lease obligations


2.5



3.4



0.8







6.7Operating leases


3.4



3.8



1.2



0.4



8.8Total contractual commitments

$
8.4


$
11.7


$
2.7


$
0.4


$
23.2  26




---



##### 



Item 3.
    Quantitative
    and Qualitative Disclosures About Market Risk  Interest Rate
    Risk
  Form 10-K.
  Foreign Currency
    Risk
    Form 10-K.
  Item 4.
    Controls
    and Procedures    Rule 13a-15(b),
   27




---



##### 



PART II. 
    OTHER INFORMATION  Item 1.
    Legal
    Proceedings  No. 01-CV-9500. Rule 10b-5 Rule 10b-5
   28




---



##### 



Item 1A.
    Risk
    Factors  Form 10-K.
  Item 2.
    Unregistered
    Sales of Equity Securities and Use of Proceeds    Item 3.
    Defaults
    Upon Senior Securities    Item 4.
    Submission
    of Matters to a Vote of Security Holders    Item 5.
    Other
    Information      Item 6.
    Exhibits  ExhibitNumbers

Description31
.1

Certification of CEO required by the Securities and Exchange
    Commission Rule 13a-14(a) or 15d-14(a)31
.2

Certification of CFO required by the Securities and Exchange
    Commission Rule 13a-14(a) or 15d-14(a)32
.1

Certification pursuant to 18 U.S.C. Section 1350, as
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 200232
.2

Certification pursuant to 18 U.S.C. Section 1350, as
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
    2002  29




---



##### 



SIGNATURES       By:
    /s/  Maurice
    B. Tosé       /s/ Maurice B. ToséMaurice B. ToséMay 1, 2009

Chairman, President and Chief Executive Officer
    (Principal Executive Officer)/s/ Thomas M. Brandt, Jr.Thomas M. Brandt, Jr.May 1, 2009

Senior Vice President and Chief Financial Officer
    (Principal Financial Officer)  30