----

----

| x | Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 for the Quarterly period ended April 2, 2011 |
|---|---------------------------------------------------------------------------------------------------------------------------------------|

| o | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from __________ to __________ |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------|

| MINNESOTA                                                            |   | 41-0908057                           |
|----------------------------------------------------------------------|--------|--------------------------------------|
| (State or other jurisdiction of incorporation or organization)  |   | (I.R.S. Employer Identification No.) |

----

----

----

DEX

|                             |                                                                                                            | Page No. |
|----------------------------------|-----------------------------------------------------------------------------------------------------------------|----------|
|                             |                                                                                                            |     |
| PART I - FINANCIAL INFORMATION   |                                                                                                            |
|                             |                                                                                                            |     |
|                             | Item 1. Financial Statements (unaudited)                                                                        |     |
|                             |                                                                                                            |     |
|                             | Consolidated Balance Sheets as of April 2, 2011 and October 2, 2010                                             | 2        |
|                             |                                                                                                            |     |
|                             | Consolidated Statements of Income for the Three and Six Fiscal Months Ended April 2, 2011 and April 3, 2010     | 3        |
|                             |                                                                                                            |     |
|                             | Consolidated Statements of Cash Flows for the Three and Six Fiscal Months Ended April 2, 2011 and April 3, 2010 | 4        |
|                             |                                                                                                            |     |
|                             | Condensed Notes to Consolidated Financial Statements                                                            | 5 - 16   |
|                             |                                                                                                            |     |
|                             | Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations        | 17 - 31  |
|                             |                                                                                                            |     |
|                             | Item 3. Quantitative and Qualitative Disclosures About Market Risk                                    | 31 - 32  |
|                             |                                                                                                            |     |
|                             | Item 4. Controls and Procedures                                                                            | 32       |
|                             |                                                                                                            |     |
| PART II –OTHER INFORMATION |                                                                                                            |
|                             |                                                                                                            |     |
|                             | Item 1.     Legal Proceedings                                                               | 32       |
|                             |                                                                                                            |     |
|                             | Item 1A.  Risk Factors                                                                                     | 32 - 33  |
|                             |                                                                                                            |     |
|                             | Item 6.     Exhibits                                                                             | 33       |
|                             |                                                                                                            |     |
| SIGNATURES                       | 34                                                                                                              |

----

Index

ION

ments

Balance Sheets

|                                                                                                            |   | April 2, |    |   | October 2, |   |
|-----------------------------------------------------------------------------------------------------------------|--------|---------------|---------|--------|-----------------|--------|
|                                                                                                            |   | 2011          |    |   | 2010            |   |
| ASSETS                                                                                                          |   |          |    |   |            |   |
|                                                                                                            |   |          |    |   |            |   |
| Current Assets:                                                                                                 |   |          |    |   |            |   |
| Cash and cash equivalents                                                                                       |   | $             | 105,712 |   |            | $      | 76,611 |   |
| Accounts receivable, net of allowances for doubtful accounts of $1,301 and  $1,358 respectively            |   |          | 70,024  |   |            |   | 66,369 |   |
| Unbilled accounts receivable                                                                                    |   |          | 31,891  |   |            |   | 26,389 |   |
| Inventories                                                                                                     |   |          | 60,700  |   |            |   | 51,792 |   |
| Prepaid expenses and other current assets                                                                       |   |          | 5,869   |   |            |   | 10,799 |   |
| Deferred income taxes                                                                                           |   |          | 13,026  |   |            |   | 12,742 |   |
| Total current assets                                                                                            |   |          | 287,222 |   |            |   | 244,702 |   |
|                                                                                                            |   |          |    |   |            |   |   |   |
|                                                                                                            |   |          |    |   |            |   |   |   |
| Property and equipment, net                                                                                     |   |          | 56,997  |   |            |   | 56,444 |   |
| Goodwill                                                                                                        |   |          | 15,741  |   |            |   | 15,429 |   |
| Other intangible assets, net                                                                                    |   |          | 25,052  |   |            |   | 24,753 |   |
| Other assets                                                                                                    |   |          | 3,449   |   |            |   | 3,368 |   |
| Deferred income taxes                                                                                           |   |          | 1,764   |   |            |   | 1,709 |   |
| Total Assets                                                                                                    |   | $             | 390,225 |   |            | $      | 346,405 |   |
|                                                                                                            |   |          |    |   |            |   |   |   |
| LIABILITIES AND SHAREHOLDERS' INVESTMENT                                                                        |   |          |    |   |            |   |   |   |
|                                                                                                            |   |          |    |   |            |   |   |   |
| Current Liabilities:                                                                                            |   |          |    |   |            |   |   |   |
| Short-term borrowings                                                                                           |   | $             | 40,220  |   |            | $      | 40,229 |   |
| Accounts payable                                                                                                |   |          | 25,446  |   |            |   | 21,818 |   |
| Accrued payroll and related costs                                                                               |   |          | 25,177  |   |            |   | 32,725 |   |
| Advance payments from customers                                                                                 |   |          | 53,702  |   |            |   | 44,000 |   |
| Accrued warranty costs                                                                                          |   |          | 6,371   |   |            |   | 7,505 |   |
| Accrued income taxes                                                                                            |   |          | 5,612   |   |            |   | 2,642 |   |
| Deferred income taxes                                                                                           |   |          | 1,746   |   |            |   | 996 |   |
| Other accrued liabilities                                                                                       |   |          | 13,291  |   |            |   | 11,925 |   |
| Total current liabilities                                                                                       |   |          | 171,565 |   |            |   | 161,840 |   |
|                                                                                                            |   |          |    |   |            |   |   |   |
| Deferred income taxes                                                                                           |   |          | 5,910   |   |            |   | 6,057 |   |
| Non-current accrued income taxes                                                                                |   |          | 4,639   |   |            |   | 4,181 |   |
| Pension benefit plan                                                                                            |   |          | 4,101   |   |            |   | 3,080 |   |
| Other long-term liabilities                                                                                     |   |          | 4,709   |   |            |   | 5,141 |   |
| Total Liabilities                                                                                               |   |          | 190,924 |   |            |   | 180,299 |   |
|                                                                                                            |   |          |    |   |            |   |   |   |
| Shareholders' Investment:                                                                                       |   |          |    |   |            |   |   |   |
| Common stock, $.25 par; 64,000 shares authorized: 15,548 and 15,264 shares issued and outstanding, respectively |   |          | 3,887   |   |            |   | 3,816 |   |
| Retained earnings                                                                                               |   |          | 178,382 |   |            |   | 147,609 |   |
| Accumulated other comprehensive income                                                                          |   |          | 17,032  |   |            |   | 14,681 |   |
| Total Shareholders' Investment                                                                                  |   |          | 199,301 |   |            |   | 166,106 |   |
| Total Liabilities and Shareholders' Investment                                                                  |   | $             | 390,225 |   |            | $      | 346,405 |   |
|                                                                                                            |   |          |    |   |            |   |   |   |
| The accompanying condensed notes to consolidated financial statements are an integral part of these statements. |   |

----

Index

nco

|                                                           |   | Three Fiscal Months Ended |    |   | Six Fiscal Months Ended |   |
|----------------------------------------------------------------|--------|---------------------------|---------|--------|-------------------------|--------|
|                                                           |   | April 2,             |    |   | April 3,           |   |   | April 2, |   |   | April 3, |   |
|                                                           |   | 2011                      |    |   | 2010                    |   |   | 2011 |   |   | 2010 |   |
|                                                           |   |                      |    |   |                    |   |   |   |   |   |   |   |
| Revenue:                                                       |   |                      |    |   |                    |   |   |   |   |   |   |   |
| Product                                                        |   | $                         | 97,029  |   |                    | $      | 79,256 |   |   | $ | 186,930 |   |   | $ | 154,041 |   |
| Service                                                        |   |                      | 16,032  |   |                    |   | 15,014 |   |   |   | 32,007 |   |   |   | 29,189 |   |
| Total revenue                                                  |   |                      | 113,061 |   |                    |   | 94,270 |   |   |   | 218,937 |   |   |   | 183,230 |   |
| Cost of sales:                                                 |   |                      |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Product                                                        |   |                      | 56,430  |   |                    |   | 47,762 |   |   |   | 107,329 |   |   |   | 94,589 |   |
| Service                                                        |   |                      | 7,724   |   |                    |   | 7,980 |   |   |   | 16,029 |   |   |   | 14,931 |   |
| Total cost of sales                                            |   |                      | 64,154  |   |                    |   | 55,742 |   |   |   | 123,358 |   |   |   | 109,520 |   |
| Gross profit                                                   |   |                      | 48,907  |   |                    |   | 38,528 |   |   |   | 95,579 |   |   |   | 73,710 |   |
|                                                           |   |                      |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Operating expenses:                                            |   |                      |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Selling and marketing                                          |   |                      | 17,151  |   |                    |   | 16,270 |   |   |   | 33,730 |   |   |   | 32,256 |   |
| General and administrative                                     |   |                      | 10,329  |   |                    |   | 8,483 |   |   |   | 18,820 |   |   |   | 17,881 |   |
| Research and development                                       |   |                      | 3,558   |   |                    |   | 3,682 |   |   |   | 6,686 |   |   |   | 7,052 |   |
| Total operating expenses                                       |   |                      | 31,038  |   |                    |   | 28,435 |   |   |   | 59,236 |   |   |   | 57,189 |   |
|                                                           |   |                      |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |
|                                                           |   |                      |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Income from operations                                         |   |                      | 17,869  |   |                    |   | 10,093 |   |   |   | 36,343 |   |   |   | 16,521 |   |
|                                                           |   |                      |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense                                               |   |                      | (384    | )      |                    |   | (485 | ) |   |   | (854 | ) |   |   | (956 | ) |
| Interest income                                                |   |                      | 61      |   |                    |   | 56 |   |   |   | 104 |   |   |   | 119 |   |
| Other income (expense), net                                    |   |                      | 60      |   |                    |   | (4 | ) |   |   | 117 |   |   |   | (323 | ) |
|                                                           |   |                      |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Income before income taxes                                     |   |                      | 17,606  |   |                    |   | 9,660 |   |   |   | 35,710 |   |   |   | 15,361 |   |
| Provision for income taxes                                     |   |                      | 5,798   |   |                    |   | 3,486 |   |   |   | 10,613 |   |   |   | 5,350 |   |
| Net income                                                     |   | $                         | 11,808  |   |                    | $      | 6,174 |   |   | $ | 25,097 |   |   | $ | 10,011 |   |
|                                                           |   |                      |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Earnings per share:                                            |   |                      |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Basic-                                                         |   |                      |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Earnings per share                                             |   | $                         | 0.77    |   |                    | $      | 0.37 |   |   | $ | 1.63 |   |   | $ | 0.61 |   |
| Weighted average number of common shares outstanding - basic   |   |                      | 15,430  |   |                    |   | 16,467 |   |   |   | 15,367 |   |   |   | 16,523 |   |
|                                                           |   |                      |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Diluted-                                                       |   |                      |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Earnings per share                                             |   | $                         | 0.75    |   |                    | $      | 0.37 |   |   | $ | 1.60 |   |   | $ | 0.60 |   |
| Weighted average number of common shares outstanding - diluted |   |                      | 15,838  |   |                    |   | 16,531 |   |   |   | 15,682 |   |   |   | 16,574 |   |

|                                                                                                            |
|-----------------------------------------------------------------------------------------------------------------|
| The accompanying condensed notes to consolidated financial statements are an integral part of these statements. |

----

Index

Cas

|                                                                                                            |   | Six Fiscal Months Ended |    |
|-----------------------------------------------------------------------------------------------------------------|--------|-------------------------|---------|
|                                                                                                            |   | April 2,           |    |   | April 3, |   |
|                                                                                                            |   | 2011                    |    |   | 2010 |   |
|                                                                                                            |   |                    |    |   |   |   |
| Cash flows from operating activities:                                                                           |   |                    |    |   |   |   |
| Net income                                                                                                      |   | $                       | 25,097  |   |   | $ | 10,011 |   |
| Adjustments to reconcile net income to net cash provided by operating activities:                               |   |                    |    |   |   |   |   |   |
| Stock-based compensation                                                                                        |   |                    | 1,541   |   |   |   | 1,224 |   |
| Net periodic pension benefit cost                                                                               |   |                    | 354     |   |   |   | 211 |   |
| Depreciation and amortization                                                                                   |   |                    | 6,418   |   |   |   | 6,434 |   |
| Deferred income taxes                                                                                           |   |                    | 245     |   |   |   | 347 |   |
| Bad debt provision                                                                                              |   |                    | 403     |   |   |   | (203 | ) |
|                                                                                                            |   |                    |    |   |   |   |   |   |
| Changes in operating assets and liabilities:                                                                    |   |                    |    |   |   |   |   |   |
| Accounts and unbilled contracts receivable                                                                      |   |                    | (8,471  | ) |   |   | 7,347 |   |
| Inventories                                                                                                     |   |                    | (8,466  | ) |   |   | 1,048 |   |
| Prepaid expenses                                                                                                |   |                    | (1,627  | ) |   |   | (1,130 | ) |
| Accounts payable                                                                                                |   |                    | 3,404   |   |   |   | 974 |   |
| Accrued payroll and related costs                                                                               |   |                    | (6,737  | ) |   |   | 393 |   |
| Advance payments from customers                                                                                 |   |                    | 9,292   |   |   |   | 4,163 |   |
| Accrued warranty costs                                                                                          |   |                    | (1,205  | ) |   |   | (998 | ) |
| Other assets and liabilities                                                                                    |   |                    | 7,185   |   |   |   | (1,960 | ) |
| Net cash provided by operating activities                                                             |   |                    | 27,433  |   |   |   | 27,861 |   |
|                                                                                                            |   |                    |    |   |   |   |   |   |
| Cash flows from investing activities:                                                                           |   |                    |    |   |   |   |   |   |
| Purchases of property and equipment                                                                             |   |                    | (4,740  | ) |   |   | (5,008 | ) |
| Purchase of business                                                                                            |   |                    | -       |   |   |   | (478 | ) |
| Net cash used in investing activities                                                                 |   |                    | (4,740  | ) |   |   | (5,486 | ) |
|                                                                                                            |   |                    |    |   |   |   |   |   |
| Cash flows from financing activities:                                                                           |   |                    |    |   |   |   |   |   |
| Net (repayments) receipts under short-term borrowings                                                           |   |                    | (7      | ) |   |   | 84 |   |
| Cash dividends                                                                                                  |   |                    | (6,173  | ) |   |   | (7,373 | ) |
| Proceeds from exercise of stock options and employee stock purchase plan                                        |   |                    | 10,809  |   |   |   | 343 |   |
| Payments to purchase and retire common stock                                                                    |   |                    | -       |   |   |   | (5,913 | ) |
| Net cash provided by (used in) financing activities                                                             |   |                    | 4,629   |   |   |   | (12,859 | ) |
|                                                                                                            |   |                    |    |   |   |   |   |   |
| Effect of exchange rate on changes in cash                                                                      |   |                    | 1,779   |   |   |   | (6,319 | ) |
|                                                                                                            |   |                    |    |   |   |   |   |   |
| Net increase in cash and cash equivalents                                                                       |   |                    | 29,101  |   |   |   | 3,197 |   |
|                                                                                                            |   |                    |    |   |   |   |   |   |
| Cash and cash equivalents, at beginning of period                                                               |   |                    | 76,611  |   |   |   | 118,885 |   |
| Cash and cash equivalents, at end of period                                                                     |   | $                       | 105,712 |   |   | $ | 122,082 |   |
|                                                                                                            |   |                    |    |   |   |   |   |   |
| Supplemental disclosure of cash flow information:                                                               |   |                    |    |   |   |   |   |   |
| Cash paid during the period for -                                                                               |   |                    |    |   |   |   |   |   |
| Interest                                                                                                        |   | $                       | 688     |   |   | $ | 756 |   |
| Income taxes                                                                                                    |   | $                       | 444     |   |   | $ | 4,755 |   |
|                                                                                                            |   |                    |    |   |   |   |   |   |
| The accompanying condensed notes to consolidated financial statements are an integral part of these statements. |   |

----

Index

CONSOLIDATED FINANCIAL 

----

Index

|                                              |   | April 2, 2011       |   |   | October 2, 2010 |   |
|---------------------------------------------------|--------|--------------------------|--------|--------|----------------------|--------|
|                                              |   | (expressed in thousands) |   |
| Customer projects in various stages of completion |   | $                        | 18,383 |   |                 | $      | 16,126 |   |
| Components, assemblies and parts                  |   |                     | 42,317 |   |                 |   | 35,666 |   |
| Total                                             |   | $                        | 60,700 |   |                 | $      | 51,792 |   |

----

Index

|                                  |   | Three Fiscal Months Ended            |   |   | Six Fiscal Months Ended |   |
|---------------------------------------|--------|--------------------------------------|--------|--------|-------------------------|--------|
|                                  |   | April 2,                             |   |   | April 3,                |   |   | April 2, |   |   | April 3, |   |
|                                  |   | 2011                                 |   |   | 2010                    |   |   | 2011 |   |   | 2010 |   |
|                                  |   |   (expressed in thousands) |   |
| Beginning balance                     |   | $                                    | 6,735  |   |                    | $      | 10,001 |   |   | $ | 7,505 |   |   | $ | 9,774 |   |
| Warranty provisions                   |   |                                 | 1,073  |   |                    |   | 742 |   |   |   | 1,586 |   |   |   | 3,019 |   |
| Warranty claims                       |   |                                 | (1,482 | )      |                    |   | (2,018 | ) |   |   | (2,930 | ) |   |   | (4,017 | ) |
| Adjustments to preexisting warranties |   |                                 | (100   | )      |                    |   | - |   |   |   | 139 |   |   |   | - |   |
| Currency translation                  |   |                                 | 145    |   |                    |   | (154 | ) |   |   | 71 |   |   |   | (205 | ) |
| Ending balance                        |   | $                                    | 6,371  |   |                    | $      | 8,571 |   |   | $ | 6,371 |   |   | $ | 8,571 |   |

----

Index

|                          |   | April 2,            |     |   | October 2, |   |
|-------------------------------|--------|--------------------------|----------|--------|-----------------|--------|
|                          |   | 2011                     |     |   | 2010            |   |
|                          |   | (expressed in thousands) |     |
| Land and improvements         |   | $                        | 1,715    |   |            | $      | 1,714 |   |
| Buildings and improvements    |   |                     | 53,085   |   |            |   | 52,535 |   |
| Machinery and equipment       |   |                     | 108,843  |   |            |   | 104,405 |   |
| Total                         |   |                     | 163,643  |   |            |   | 158,654 |   |
| Less accumulated depreciation |   |                     | (106,646 | )      |            |   | (102,210 | ) |
| Property and equipment, net   |   | $                        | 56,997   |   |            | $      | 56,444 |   |

|                       |   | April 2, 2011            |   |
|----------------------------|--------|--------------------------|--------|
|                       |   |                     |   |   |   |   |   |   |   |   | Weighted |   |
|                       |   |                     |   |   |   |   |   |   |   |   | Average |   |
|                       |   | Gross Carrying      |   |   | Accumulated |   |   | Net Carrying |   |   | Useful Life |   |
|                       |   | Amount                   |   |   | Amortization |   |   | Value |   |   | (in Years) |   |
|                       |   | (expressed in thousands) |   |   |   |   |
| Software development costs |   | $                        | 13,266 |   |   | $ | (2,818 | ) |   | $ | 10,448 |   |   |   | 5.9 |   |
| Patents                    |   |                     | 9,678  |   |   |   | (1,721 | ) |   |   | 7,957 |   |   |   | 15.3 |   |
| Trademarks and trade names |   |                     | 5,796  |   |   |   | (706 | ) |   |   | 5,090 |   |   |   | 30.2 |   |
| Non-compete agreements     |   |                     | 2,535  |   |   |   | (2,113 | ) |   |   | 422 |   |   |   | 3.0 |   |
| Land-use rights            |   |                     | 1,191  |   |   |   | (56 | ) |   |   | 1,135 |   |   |   | 47.8 |   |
| Total                      |   | $                        | 32,466 |   |   | $ | (7,414 | ) |   | $ | 25,052 |   |   |   | 14.2 |   |

|                       |   | October 2, 2010          |   |
|----------------------------|--------|--------------------------|--------|
|                       |   |                     |   |   |   |   |   |   |   |   | Weighted |   |
|                       |   |                     |   |   |   |   |   |   |   |   | Average |   |
|                       |   | Gross Carrying      |   |   | Accumulated |   |   | Net Carrying |   |   | Useful Life |   |
|                       |   | Amount                   |   |   | Amortization |   |   | Value |   |   | (in Years) |   |
|                       |   | (expressed in thousands) |   |   |   |   |
| Software development costs |   | $                        | 11,640 |   |   | $ | (2,062 | ) |   | $ | 9,578 |   |   |   | 6.0 |   |
| Patents                    |   |                     | 9,484  |   |   |   | (1,347 | ) |   |   | 8,137 |   |   |   | 15.3 |   |
| Trademarks and trade names |   |                     | 5,689  |   |   |   | (603 | ) |   |   | 5,086 |   |   |   | 30.2 |   |
| Non-compete agreements     |   |                     | 2,485  |   |   |   | (1,657 | ) |   |   | 828 |   |   |   | 3.0 |   |
| Land-use rights            |   |                     | 1,167  |   |   |   | (43 | ) |   |   | 1,124 |   |   |   | 47.8 |   |
| Total                      |   | $                        | 30,465 |   |   | $ | (5,712 | ) |   | $ | 24,753 |   |   |   | 14.7 |   |

----

Index

|                                       |   | Three Fiscal Months Ended                       |   |   | Six Fiscal Months Ended |   |
|--------------------------------------------|--------|-------------------------------------------------|--------|--------|-------------------------|--------|
|                                       |   | April 2,                                        |   |   | April 3,                |   |   | April 2, |   |   | April 3, |   |
|                                       |   | 2011                                            |   |   | 2010                    |   |   | 2011 |   |   | 2010 |   |
|                                       |   | (expressed in thousands, except per share data) |   |
|                                       |   |                                            |   |   |                    |   |   |   |   |   |   |   |
| Net income                                 |   | $                                               | 11,808 |   |                    | $      | 6,174 |   |   | $ | 25,097 |   |   | $ | 10,011 |   |
|                                       |   |                                            |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average common shares outstanding |   |                                            | 15,430 |   |                    |   | 16,467 |   |   |   | 15,367 |   |   |   | 16,523 |   |
| Dilutive potential common shares           |   |                                            | 408    |   |                    |   | 64 |   |   |   | 315 |   |   |   | 51 |   |
| Total diluted weighted shares outstanding  |   |                                            | 15,838 |   |                    |   | 16,531 |   |   |   | 15,682 |   |   |   | 16,574 |   |
|                                       |   |                                            |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Earnings per share:                        |   |                                            |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                      |   | $                                               | 0.77   |   |                    | $      | 0.37 |   |   | $ | 1.63 |   |   | $ | 0.61 |   |
| Diluted                                    |   | $                                               | 0.75   |   |                    | $      | 0.37 |   |   | $ | 1.60 |   |   | $ | 0.60 |   |

----

Index

|                               |   | Three Fiscal Months Ended |    |   | Six Fiscal Months Ended |   |
|------------------------------------|--------|---------------------------|---------|--------|-------------------------|--------|
|                               |   | April 2,                  |    |   | April 3,                |   |   | April 2, |   |   | April 3, |   |
|                               |   | 2011                      |    |   | 2010                    |   |   | 2011 |   |   | 2010 |   |
|                               |   | (expressed in thousands)  |    |
| Revenue by Segment:                |   |                      |    |   |                    |   |   |   |   |   |   |   |
| Test                               |   | $                         | 86,761  |   |                    | $      | 75,331 |   |   | $ | 169,303 |   |   | $ | 147,204 |   |
| Sensors                            |   |                      | 26,300  |   |                    |   | 18,939 |   |   |   | 49,634 |   |   |   | 36,026 |   |
| Total revenue                      |   | $                         | 113,061 |   |                    | $      | 94,270 |   |   | $ | 218,937 |   |   | $ | 183,230 |   |
|                               |   |                      |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Income from Operations by Segment: |   |                      |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Test                               |   | $                         | 9,842   |   |                    | $      | 6,283 |   |   | $ | 22,595 |   |   | $ | 9,520 |   |
| Sensors                            |   |                      | 8,027   |   |                    |   | 3,810 |   |   |   | 13,748 |   |   |   | 7,001 |   |
| Total income from operations       |   | $                         | 17,869  |   |                    | $      | 10,093 |   |   | $ | 36,343 |   |   | $ | 16,521 |   |

----

Index

|                                  |   | April 2, 2011            |   |
|---------------------------------------|--------|--------------------------|--------|
|                                  |   | Prepaid Expenses    |   |   |   |   |
|                                  |   | and Other           |   |   | Other Accrued |   |
|                                  |   | Current Assets      |   |   | Liabilities |   |
| Designated hedge derivatives:         |   | (expressed in thousands) |   |
| Foreign exchange cash flow hedges     |   | $                        | 97     |   |   | $ | 826 |   |
| Interest rate swaps                   |   |                     | -      |   |   |   | 950 |   |
| Total designated hedge derivatives    |   |                     | 97     |   |   |   | 1,776 |   |
|                                  |   |                     |   |   |   |   |   |   |
| Derivatives not designated as hedges: |   |                     | -      |   |   |   | 36 |   |
| Total hedge and other derivatives     |   | $                        | 97     |   |   | $ | 1,812 |   |

|                                       |   | October 2, 2010          |   |
|--------------------------------------------|--------|--------------------------|--------|
|                                       |   | Prepaid Expenses    |   |   |   |   |
|                                       |   | and Other           |   |   | Other Accrued |   |
|                                       |   | Current Assets      |   |   | Liabilities |   |
| Designated hedge derivatives:              |   | (expressed in thousands) |   |
| Foreign exchange cash flow hedges          |   | $                        | 126    |   |   | $ | 547 |   |
| Interest rate swaps                        |   |                     | -      |   |   |   | 1,406 |   |
| Total designated hedge derivatives         |   |                     | 126    |   |   |   | 1,953 |   |
|                                       |   |                     |   |   |   |   |   |   |
| Derivatives not designated as hedges:      |   |                     |   |   |   |   |   |   |
| Foreign exchange balance sheet derivatives |   |                     | -      |   |   |   | 1,023 |   |
| Total hedge and other derivatives          |   | $                        | 126    |   |   | $ | 2,976 |   |

----

Index

|                                                                                                                                        |   | Three Fiscal Months Ended |   |   | Six Fiscal Months Ended |   |
|---------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------|--------|--------|-------------------------|--------|
|                                                                                                                                        |   | April, 2                  |   |   | April 3,                |   |   | April, 2 |   |   | April 3, |   |
|                                                                                                                                        |   | 2011                      |   |   | 2010                    |   |   | 2011 |   |   | 2010 |   |
|                                                                                                                                        |   | (expressed in thousands)  |   |
| Beginning unrealized net (loss) gain in AOCI                                                                                                |   | $                         | (269   | )      |                    | $      | 8 |   |   | $ | (384 | ) |   | $ | (519 | ) |
| Net loss reclassified into Revenue (effective portion)                                                                                      |   |                      | 250    |   |                    |   | 81 |   |   |   | 409 |   |   |   | 435 |   |
| Net loss reclassified into Revenue upon the removal of a hedge designation on an underlying foreign currency transaction that was cancelled |   |                      | -      |   |                    |   | - |   |   |   | 7 |   |   |   | - |   |
| Net (loss) gain recognized in OCI (effective portion)                                                                                       |   |                      | (616   | )      |                    |   | 170 |   |   |   | (667 | ) |   |   | 343 |   |
| Ending unrealized net (loss) gain in AOCI                                                                                                   |   | $                         | (635   | )      |                    | $      | 259 |   |   | $ | (635 | ) |   | $ | 259 |   |

| Outstanding Interest Rate Swaps: |   |             |   |          |   |   |      |   |   |
|----------------------------------|--------|------------------|--------|---------------|--------|--------|-----------|--------|--------|
|                             |   |             |   | Notional      |   |   | Reference |   |   | Basis |   |
| Start Date                       |   | End Date         |   | Amount        |   |   | Rate      |   |   | Spread |   |
|                             |   |             |   | (in millions) |   |   |      |   |   |   |   |
| July 25, 2008                    |   | July 25, 2012    |   | $             | 13.0   |   |      |   | 4.24   | % |   |   | 0.45 | % |
| November 6, 2008                 |   | November 7, 2011 |   |          | 11.0   |   |      |   | 3.59   | % |   |   | 0.45 | % |
|                             |   | Total            |   | $             | 24.0   |   |      |   |   |   |   |   |   |   |

----

Index

| Forward Interest Rate Swaps: |   |               |   |          |   |   |      |   |   |
|------------------------------|--------|--------------------|--------|---------------|--------|--------|-----------|--------|--------|
|                         |   |               |   | Notional      |   |   | Reference |   |   | Basis |   |
| Start Date                   |   | End Date           |   | Amount        |   |   | Rate      |   |   | Spread |   |
|                         |   |               |   | (in millions) |   |   |      |   |   |   |   |
| December 7, 2011             |   | September 7, 2012  |   | $             | 11.0   |   |      |   | 1.02   | % |   |   | 0.45 | % |
| December 20, 2011            |   | September 20, 2012 |   |          | 6.0    |   |      |   | 1.06   | % |   |   | 0.45 | % |
| December 29, 2011            |   | September 28, 2012 |   |          | 10.0   |   |      |   | 1.08   | % |   |   | 0.45 | % |
|                         |   | Total              |   | $             | 27.0   |   |      |   |   |   |   |   |   |   |

|                                                            |   | Three Fiscal Months Ended |   |   | Six Fiscal Months Ended |   |
|-----------------------------------------------------------------|--------|---------------------------|--------|--------|-------------------------|--------|
|                                                            |   | April 2,                  |   |   | April 3,                |   |   | April 2, |   |   | April 3, |   |
|                                                            |   | 2011                      |   |   | 2010                    |   |   | 2011 |   |   | 2010 |   |
|                                                            |   | (expressed in thousands)  |   |
| Beginning unrealized net loss in AOCI                           |   | $                         | (1,101 | )      |                    | $      | (1,646 | ) |   | $ | (1,406 | ) |   | $ | (1,894 | ) |
| Net loss reclassified into Interest expense (effective portion) |   |                      | 220    |   |                    |   | 306 |   |   |   | 517 |   |   |   | 617 |   |
| Net loss recognized in OCI (effective portion)                  |   |                      | (69    | )      |                    |   | (282 | ) |   |   | (61 | ) |   |   | (345 | ) |
| Ending unrealized net loss in AOCI                              |   | $                         | (950   | )      |                    | $      | (1,622 | ) |   | $ | (950 | ) |   | $ | (1,622 | ) |

|                                                      |   | Three Fiscal Months Ended |   |   | Six Fiscal Months Ended |   |
|-----------------------------------------------------------|--------|---------------------------|--------|--------|-------------------------|--------|
|                                                      |   | April 2,                  |   |   | April 3,                |   |   | April 2, |   |   | April 3, |   |
|                                                      |   | 2011                      |   |   | 2010                    |   |   | 2011 |   |   | 2010 |   |
|                                                      |   | (expressed in thousands)  |   |
| Net (loss) gain recognized in Other income (expense), net |   | $                         | (629   | )      |                    | $      | (21 | ) |   | $ | (500 | ) |   | $ | 76 |   |

----

Index

|                   |   | April 2, 2011            |   |
|------------------------|--------|--------------------------|--------|
|                   |   | Level 1                  |   |   | Level 2 |   |   | Level 3 |   |   | Total |   |
| Assets:                |   | (expressed in thousands) |   |
| Currency contracts(1)  |   | $                        | -      |   |   | $ | 97 |   |   | $ | - |   |   | $ | 97 |   |
| Total assets           |   | $                        | -      |   |   | $ | 97 |   |   | $ | - |   |   | $ | 97 |   |
|                   |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities:           |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Currency contracts(1)  |   | $                        | -      |   |   | $ | 862 |   |   | $ | - |   |   | $ | 862 |   |
| Interest rate swaps(2) |   |                     | -      |   |   |   | 950 |   |   |   | - |   |   |   | 950 |   |
| Total liabilities      |   | $                        | -      |   |   | $ | 1,812 |   |   | $ | - |   |   | $ | 1,812 |   |

|                   |   | October 2, 2010          |   |
|------------------------|--------|--------------------------|--------|
|                   |   | Level 1                  |   |   | Level 2 |   |   | Level 3 |   |   | Total |   |
| Assets:                |   | (expressed in thousands) |   |
| Currency contracts(1)  |   | $                        | -      |   |   | $ | 126 |   |   | $ | - |   |   | $ | 126 |   |
| Total assets           |   | $                        | -      |   |   | $ | 126 |   |   | $ | - |   |   | $ | 126 |   |
|                   |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities:           |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Currency contracts(1)  |   | $                        | -      |   |   | $ | 1,570 |   |   | $ | - |   |   | $ | 1,570 |   |
| Interest rate swaps(2) |   |                     | -      |   |   |   | 1,406 |   |   |   | - |   |   |   | 1,406 |   |
| Total liabilities      |   | $                        | -      |   |   | $ | 2,976 |   |   | $ | - |   |   | $ | 2,976 |   |

|   | (1) | Based on observable market transactions of spot currency rates and forward currency rates on equivalently-termed instruments. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Based on LIBOR and swap rates. |
|--------|-----|--------------------------------|

----

Index

|                                                |   | Three Fiscal Months Ended |   |   | Six Fiscal Months Ended |   |
|-----------------------------------------------------|--------|---------------------------|--------|--------|-------------------------|--------|
|                                                |   | April 2,                  |   |   | April 3,                |   |   | April 2, |   |   | April 3, |   |
|                                                |   | 2011                      |   |   | 2010                    |   |   | 2011 |   |   | 2010 |   |
|                                                |   | (expressed in thousands)  |   |
|                                                |   |                      |   |   |                    |   |   |   |   |   |   |   |
| Net income                                          |   | $                         | 11,808 |   |                    | $      | 6,174 |   |   | $ | 25,097 |   |   | $ | 10,011 |   |
| Change in cumulative translation adjustment         |   |                      | 4,119  |   |                    |   | (6,512 | ) |   |   | 2,788 |   |   |   | (8,712 | ) |
| Pension benefit plan adjustments                    |   |                      | (238   | )      |                    |   | (111 | ) |   |   | (564 | ) |   |   | (54 | ) |
| Change in unrealized loss on derivative instruments |   |                      | (134   | )      |                    |   | 173 |   |   |   | 127 |   |   |   | 657 |   |
| Comprehensive income                                |   | $                         | 15,555 |   |                    | $      | (276 | ) |   | $ | 27,448 |   |   | $ | 1,902 |   |

|                                                                                                                                                                                               |   | April 2,            |   |   | October 2, |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|--------|--------|-----------------|--------|
|                                                                                                                                                                                               |   | 2011                     |   |   | 2010            |   |
|                                                                                                                                                                                               |   | (expressed in thousands) |   |
| Bank line of credit, monthly U.S. LIBOR plus 45 basis points (0.76% rate in effect at April 2, 2011), maturing April 2011, with optional month-to-month term renewal and loan repricing until 2012 |   | $                        | 40,000 |   |            | $      | 40,000 |   |
| Notes payable, non-interest bearing                                                                                                                                                                |   |                     | 220    |   |            |   | 229 |   |
| Total short-term borrowings                                                                                                                                                                        |   | $                        | 40,220 |   |            | $      | 40,229 |   |

----

Index

|                           |   | Three Fiscal Months Ended |   |   | Six Fiscal Months Ended |   |
|--------------------------------|--------|---------------------------|--------|--------|-------------------------|--------|
|                           |   | April 2,                  |   |   | April 3,                |   |   | April 2, |   |   | April 3, |   |
|                           |   | 2011                      |   |   | 2010                    |   |   | 2011 |   |   | 2010 |   |
|                           |   | (expressed in thousands)  |   |
|                           |   |                      |   |   |                    |   |   |   |   |   |   |   |
| Service cost                   |   | $                         | 118    |   |                    | $      | 88 |   |   | $ | 235 |   |   | $ | 183 |   |
| Interest cost                  |   |                      | 195    |   |                    |   | 199 |   |   |   | 389 |   |   |   | 412 |   |
| Expected return on plan assets |   |                      | (173   | )      |                    |   | (190 | ) |   |   | (345 | ) |   |   | (393 | ) |
| Net amortization and deferral  |   |                      | 38     |   |                    |   | 5 |   |   |   | 75 |   |   |   | 9 |   |
| Net periodic benefit cost      |   | $                         | 178    |   |                    | $      | 102 |   |   | $ | 354 |   |   | $ | 211 |   |

----

Index

tions

|   | · | The Company’s business is significantly international in scope, which poses multiple unique risks |
|--------|--------|---------------------------------------------------------------------------------------------------------|

|   | · | Volatility in the global economy could adversely affect results |
|--------|--------|-----------------------------------------------------------------|

|   | · | The Company’s business is subject to strong competition |
|--------|--------|---------------------------------------------------------------|

|   | · | The Company’s business may be affected by government contracting risk, including the risk of modification or termination of such contracts |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The Company may not achieve its growth plans for the expansion of the business |
|--------|--------|--------------------------------------------------------------------------------|

|   | · | The Company may experience difficulties obtaining the services of skilled employees |
|--------|--------|-------------------------------------------------------------------------------------|

|   | · | The Company may fail to protect its intellectual property effectively, or may infringe upon the intellectual property of others |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------|

|   | · | The business could be adversely affected by product liability and commercial litigation |
|--------|--------|-----------------------------------------------------------------------------------------|

|   | · | The Company may experience difficulty obtaining materials or components for its products |
|--------|--------|------------------------------------------------------------------------------------------|

|   | · | Government regulation could impose significant costs and other constraints |
|--------|--------|----------------------------------------------------------------------------|

|   | · | The sales, delivery and acceptance cycle for many of the Company’s products is irregular and may not develop as anticipated |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------|

|   | · | The Company’s customers are in cyclical industries |
|--------|--------|----------------------------------------------------------|

|   | · | Interest rate fluctuations could adversely affect results |
|--------|--------|-----------------------------------------------------------|

|   | · | The Company may be required to recognize impairment charges for long-lived assets |
|--------|--------|-----------------------------------------------------------------------------------|

----

Index

|   | · | As was previously disclosed, in January 2011 the U.S. Department of Commerce and the U.S. Attorney's Office for the District of Minnesota notified the Company that they are investigating why the Company had not disclosed, on the government’s Online Representations and Certifications Application (ORCA Certification), that the Company had pled guilty in 2008 to two misdemeanors in regard to making false statements related to certain export matters in 2003. Further, in March 2011 the U.S. Department of the Air Force issued a notice suspending the Company from all U.S. Government contracting and from directly or indirectly receiving the benefits of federal assistance programs, based on the factual and legal issues underlying the investigation.  Although revenue from U.S. Government contracts varies by year, such revenue as a percent of the Company’s total revenue was approximately 5% during the first half of fiscal 2011 and 7% for all of fiscal 2010.  The Company is permitted, under applicable regulations, to continue performing work under existing Government contracts during the investigation and suspension.  The Company will continue to review these matters and to fully cooperate with the Government’s requests, as appropriate. The Company is evaluating the potential impact from this investigation and suspension on our future business, results of operations and financial condition. Although the impact is not known at this time, the Company expects to incur additional General and Administrative expenses related to legal and consulting fees as part of the on-going investigation, as well as increased compliance costs. In the second quarter of fiscal 2011 the Company incurred $0.8 million of costs related to this matter. An extended suspension or debarment from contracting with the U.S. Government could have a material impact on future revenue and gross profit. The duration of the suspension or potential debarment is not known at this time so the Company is unable to estimate the potential impact on its revenue and gross profit. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Orders increased 26.8% to $118.4 million, compared to $93.4 million for the Second Quarter of Fiscal 2010. This increase is comprised of 26.7% growth in the Test segment, primarily in Asia, 27.1% worldwide growth in the Sensors segment, and an estimated 3% favorable impact of currency translation. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Backlog of undelivered orders was a record high $254.1 million, an increase of 40.6% compared to $180.7 million at the end of the Second Quarter of Fiscal 2010. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Revenue increased 19.9% to $113.1 million, compared to $94.3 million for the Second Quarter of Fiscal 2010. This increase was comprised of 15.3% growth in the Test Segment and 38.4% growth in Sensors, both driven by higher beginning backlog and increased order volume in the quarter. In addition, currency translation favorably impacted revenue by an estimated 2%. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Income from operations was $17.9 million, compared to $10.1 million for the Second Quarter of Fiscal 2010. This increase was primarily driven by higher gross profit from higher volume, net of $2.6 million higher operating expenses. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Earnings per diluted share increased to $0.75, compared to $0.37 for the Second Quarter of Fiscal 2010. In addition to the benefit of higher income from operations, a lower tax rate, as well as reduced shares outstanding in the Second Quarter of Fiscal 2011 each favorably impacted earnings per diluted share by $0.04. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Orders increased 28.3% to $258.1 million, compared to $201.1 million for the First Half of Fiscal 2010. This increase is comprised of 27.7% worldwide growth in the Test segment and 31.1% worldwide growth in the Sensors segment. Orders in the First Half of Fiscal 2011 included two large (in excess of $5.0 million) Test segment orders totaling approximately $29 million, an increase of $9 million compared to large Test segment order bookings in the First Half of Fiscal 2010. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Backlog of undelivered orders was $254.1 million, an increase of 18.6% compared to $214.3 million at October 2, 2010. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------|

|   | · | Revenue increased 19.5% to $218.9 million, compared to $183.2 million for the First Half of Fiscal 2010. This increase was comprised of 15.0% growth in the Test Segment, resulting primarily from a 26.7% higher beginning backlog, and 37.8% growth in Sensors driven by increased order volume. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Index

|   | · | Income from operations was $36.3 million, compared to $16.5 million for the First Half of Fiscal 2010. This increase was primarily driven by higher gross profit from increased volume and lower warranty expense. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The effective tax rate for the First Half of Fiscal 2011 was 29.7%, a decrease of 5.1 percentage points compared to a tax rate of 34.8% for the First Half of Fiscal 2010. This decrease was primarily due to the enactment of tax legislation in the First Quarter of Fiscal 2011 that extended the United States research and development credits, with an effective date that is retroactive to January 1, 2010. The retroactive extension of the research and development credits provided an additional tax benefit of $1.0 million. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Earnings per diluted share increased to $1.60, compared to $0.60 for the First Half of Fiscal 2010. A lower tax rate, as well as reduced shares outstanding in the First Half of Fiscal 2011 favorably impacted earnings per diluted share by $0.06 and $0.09, respectively. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Total Company |   |
|--------------------|--------|

|         | Three Fiscal                                                             |   |                                                                                |   | Three Fiscal                                                                                   |
|--------------|--------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------|
|         | Months Ended                                                             |   | Estimated                                                                           |   | Months Ended                                                                                   |
|         | April 2,                                                                 |   | Business                                                                            |   | Currency                                                                                       |   | April 3, |
|         | 2011                                                                     |   | Change                                                                              |   | Translation                                                                                    |   | 2010 |
|         |                                                                     |   |                                                                                |   |                                                                                           |   |   |
|  Orders |  $          118.4 |   |  $            22.5 |   |  $              2.5 |   |  $            93.4 |

----

Index

|          |   | Three Fiscal Months Ended |   |   |     |   |   |     |   |
|---------------|--------|---------------------------|--------|--------|----------|--------|--------|----------|--------|
|          |   | April 2,                  |   |   | April 3, |   |   |     |   |   |   |   |
|          |   | 2011                      |   |   | 2010     |   |   | Variance |   |   | % Variance |   |
|          |   |                      |   |   |     |   |   |     |   |   |   |   |
| Revenue       |   | $                         | 113.1  |   |     | $      | 94.3   |     |   | $ | 18.8 |   |   |   | 19.9 | % |
| Cost of sales |   |                      | 64.2   |   |     |   | 55.8   |     |   |   | 8.4 |   |   |   | 15.1 | % |
| Gross profit  |   |                      | 48.9   |   |     |   | 38.5   |     |   |   | 10.4 |   |   |   | 27.0 | % |
| Gross margin  |   |                      | 43.3   | %      |     |   | 40.9   | %        |   |   | 2.4 |   |   | pts |   |

| Operating expenses:        |   |   |   |   |   |   |   |   |   |   |   |   |
|----------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Selling and marketing      |   |   | 17.1   |   |   |   | 16.2   |   |   |   | 0.9    |   |   |   | 5.6 | % |
| General administrative     |   |   | 10.3   |   |   |   | 8.5    |   |   |   | 1.8    |   |   |   | 21.2 | % |
| Research and development   |   |   | 3.6    |   |   |   | 3.7    |   |   |   | (0.1   | )      |   |   | -2.7 | % |
| Total operating expenses   |   |   | 31.0   |   |   |   | 28.4   |   |   |   | 2.6    |   |   |   | 9.2 | % |
|                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income from operations     |   |   | 17.9   |   |   |   | 10.1   |   |   |   | 7.8    |   |   |   | 77.2 | % |
|                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense           |   |   | (0.4   | )      |   |   | (0.5   | )      |   |   | 0.1    |   |   |   | -20.0 | % |
| Interest income            |   |   | 0.1    |   |   |   | 0.1    |   |   |   | -      |   |   |   | 0.0 | % |
| Other expense, net         |   |   | -      |   |   |   | -      |   |   |   | -      |   |   | NM |   |
|                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income before income taxes |   |   | 17.6   |   |   |   | 9.7    |   |   |   | 7.9    |   |   |   | 81.4 | % |
| Provision for income taxes |   |   | 5.8    |   |   |   | 3.5    |   |   |   | 2.3    |   |   |   | 65.7 | % |
| Net income                 |   | $      | 11.8   |   |   | $      | 6.2    |   |   | $      | 5.6    |   |   |   | 90.3 | % |
|                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted earnings per share |   | $      | 0.75   |   |   | $      | 0.37   |   |   | $      | 0.38   |   |   |   | 102.7 | % |

|                     |   | Three Fiscal |   |   |      |   |   |         |   |   | Three Fiscal |   |
|--------------------------|--------|--------------|--------|--------|-----------|--------|--------|--------------|--------|--------|--------------|--------|
|                     |   | Months Ended |   |   | Estimated |   |   | Months Ended |   |
|                     |   | April 2,     |   |   | Business  |   |   | Currency     |   |   | April 3,     |   |
|                     |   | 2011         |   |   | Change    |   |   | Translation  |   |   | 2010         |   |
|                     |   |         |   |   |      |   |   |         |   |   |         |   |
| Revenue                  |   | $            | 113.1  |   |      | $      | 17.1   |         |   | $      | 1.7          |   |   | $ | 94.3 |   |
| Cost of sales            |   |         | 64.2   |   |      |   | 7.3    |         |   |   | 1.1          |   |   |   | 55.8 |   |
| Gross profit             |   |         | 48.9   |   |      |   | 9.8    |         |   |   | 0.6          |   |   |   | 38.5 |   |
| Gross margin             |   |         | 43.3   | %      |      |   |   |         |   |   |         |   |   |   | 40.9 | % |
| Operating expenses:      |   |         |   |   |      |   |   |         |   |   |         |   |   |   |   |   |
| Selling and marketing    |   |         | 17.1   |   |      |   | 0.6    |         |   |   | 0.3          |   |   |   | 16.2 |   |
| General administrative   |   |         | 10.3   |   |      |   | 1.7    |         |   |   | 0.1          |   |   |   | 8.5 |   |
| Research and development |   |         | 3.6    |   |      |   | (0.1   | )            |   |   | -            |   |   |   | 3.7 |   |
| Total operating expenses |   |         | 31.0   |   |      |   | 2.2    |         |   |   | 0.4          |   |   |   | 28.4 |   |
|                     |   |         |   |   |      |   |   |         |   |   |         |   |   |   |   |   |
| Income from operations   |   | $            | 17.9   |   |      | $      | 7.6    |         |   | $      | 0.2          |   |   | $ | 10.1 |   |

----

Index

| Test Segment |   |
|-------------------|--------|

|         | Three Fiscal                                                                        |   |                                                                                |   |                                                                                           |   | Three Fiscal                                                                        |
|--------------|-------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------|
|         | Months Ended                                                                        |   | Estimated                                                                           |   | Months Ended                                                                                   |
|         | April 2,                                                                            |   | Business                                                                            |   | Currency                                                                                       |   | April 3,                                                                            |
|         | 2011                                                                                |   | Change                                                                              |   | Translation                                                                                    |   | 2010                                                                                |
|         |                                                                                |   |                                                                                |   |                                                                                           |   |                                                                                |
|  Orders |  $            91.7 |   |  $            17.6 |   |  $              1.7 |   |  $            72.4 |

----

Index

ations

|                     |   | Three Fiscal |   |   |      |   |   |         |   |   | Three Fiscal |   |
|--------------------------|--------|--------------|--------|--------|-----------|--------|--------|--------------|--------|--------|--------------|--------|
|                     |   | Months Ended |   |   | Estimated |   |   | Months Ended |   |
|                     |   | April 2,     |   |   | Business  |   |   | Currency     |   |   | April 3,     |   |
|                     |   | 2011         |   |   | Change    |   |   | Translation  |   |   | 2010         |   |
|                     |   |         |   |   |      |   |   |         |   |   |         |   |
| Revenue                  |   | $            | 86.8   |   |      | $      | 10.3   |         |   | $      | 1.2          |   |   | $ | 75.3 |   |
| Cost of sales            |   |         | 53.2   |   |      |   | 5.4    |         |   |   | 0.9          |   |   |   | 46.9 |   |
| Gross profit             |   |         | 33.6   |   |      |   | 4.9    |         |   |   | 0.3          |   |   |   | 28.4 |   |
| Gross margin             |   |         | 38.7   | %      |      |   |   |         |   |   |         |   |   |   | 37.8 | % |
| Operating expenses:      |   |         |   |   |      |   |   |         |   |   |         |   |   |   |   |   |
| Selling and marketing    |   |         | 13.4   |   |      |   | 0.3    |         |   |   | 0.2          |   |   |   | 12.9 |   |
| General administrative   |   |         | 7.8    |   |      |   | 1.3    |         |   |   | 0.1          |   |   |   | 6.4 |   |
| Research and development |   |         | 2.5    |   |      |   | (0.3   | )            |   |   | -            |   |   |   | 2.8 |   |
| Total operating expenses |   |         | 23.7   |   |      |   | 1.3    |         |   |   | 0.3          |   |   |   | 22.1 |   |
|                     |   |         |   |   |      |   |   |         |   |   |         |   |   |   |   |   |
| Income from operations   |   | $            | 9.9    |   |      | $      | 3.6    |         |   | $      | -            |   |   | $ | 6.3 |   |

----

Index

| Sensors Segment |   |
|----------------------|--------|

|   | Three Fiscal                                                                        |   |                                                                                           |   |                                                                                           |   | Three Fiscal                                                                        |
|--------|-------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------|
|   | Months Ended                                                                        |   | Estimated                                                                                      |   | Months Ended                                                                                   |
|   | April 2,                                                                            |   | Business                                                                                       |   | Currency                                                                                       |   | April 3,                                                                            |
|   | 2011                                                                                |   | Change                                                                                         |   | Translation                                                                                    |   | 2010                                                                                |
|   |                                                                                |   |                                                                                           |   |                                                                                           |   |                                                                                |
| Orders |  $            26.7 |   |  $              4.9 |   |  $              0.8 |   |  $            21.0 |

|                     |   | Three Fiscal |   |   |      |   |   |         |   |   | Three Fiscal |   |
|--------------------------|--------|--------------|--------|--------|-----------|--------|--------|--------------|--------|--------|--------------|--------|
|                     |   | Months Ended |   |   | Estimated |   |   | Months Ended |   |
|                     |   | April 2,     |   |   | Business  |   |   | Currency     |   |   | April 3,     |   |
|                     |   | 2011         |   |   | Change    |   |   | Translation  |   |   | 2010         |   |
|                     |   |         |   |   |      |   |   |         |   |   |         |   |
| Revenue                  |   | $            | 26.3   |   |      | $      | 6.8    |         |   | $      | 0.5          |   |   | $ | 19.0 |   |
| Cost of sales            |   |         | 11.0   |   |      |   | 1.9    |         |   |   | 0.2          |   |   |   | 8.9 |   |
| Gross profit             |   |         | 15.3   |   |      |   | 4.9    |         |   |   | 0.3          |   |   |   | 10.1 |   |
| Gross margin             |   |         | 58.4   | %      |      |   |   |         |   |   |         |   |   |   | 53.2 | % |
| Operating expenses:      |   |         |   |   |      |   |   |         |   |   |         |   |   |   |   |   |
| Selling and marketing    |   |         | 3.7    |   |      |   | 0.3    |         |   |   | 0.1          |   |   |   | 3.3 |   |
| General administrative   |   |         | 2.5    |   |      |   | 0.4    |         |   |   | -            |   |   |   | 2.1 |   |
| Research and development |   |         | 1.1    |   |      |   | 0.2    |         |   |   | -            |   |   |   | 0.9 |   |
| Total operating expenses |   |         | 7.3    |   |      |   | 0.9    |         |   |   | 0.1          |   |   |   | 6.3 |   |
|                     |   |         |   |   |      |   |   |         |   |   |         |   |   |   |   |   |
| Income from operations   |   | $            | 8.0    |   |      | $      | 4.0    |         |   | $      | 0.2          |   |   | $ | 3.8 |   |

----

Index

| Total Company |   |
|--------------------|--------|

|         | Six Fiscal                                                               |   |                                                                                |   |                                                                                           |   | Six Fiscal                                                               |
|--------------|--------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------|
|         | Months Ended                                                             |   | Estimated                                                                           |   | Months Ended                                                                                   |
|         | April 2,                                                                 |   | Business                                                                            |   | Currency                                                                                       |   | April 3,                                                                 |
|         | 2011                                                                     |   | Change                                                                              |   | Translation                                                                                    |   | 2010                                                                     |
|         |                                                                     |   |                                                                                |   |                                                                                           |   |                                                                     |
|  Orders |  $          258.1 |   |  $            56.8 |   |  $              0.2 |   |  $          201.1 |

----

Index

|          |   | Six Fiscal Months Ended |   |   |     |   |   |     |   |
|---------------|--------|-------------------------|--------|--------|----------|--------|--------|----------|--------|
|          |   | April 2,                |   |   | April 3, |   |   |     |   |   |   |   |
|          |   | 2011                    |   |   | 2010     |   |   | Variance |   |   | % Variance |   |
|          |   |                    |   |   |     |   |   |     |   |   |   |   |
| Revenue       |   | $                       | 218.9  |   |     | $      | 183.2  |     |   | $ | 35.7 |   |   |   | 19.5 | % |
| Cost of sales |   |                    | 123.3  |   |     |   | 109.5  |     |   |   | 13.8 |   |   |   | 12.6 | % |
| Gross profit  |   |                    | 95.6   |   |     |   | 73.7   |     |   |   | 21.9 |   |   |   | 29.7 | % |
| Gross margin  |   |                    | 43.7   | %      |     |   | 40.2   | %        |   |   | 3.5 |   |   | pts |   |

| Operating expenses:        |   |   |   |   |   |   |   |   |   |   |   |   |
|----------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Selling and marketing      |   |   | 33.8   |   |   |   | 32.2   |   |   |   | 1.6    |   |   |   | 5.0 | % |
| General administrative     |   |   | 18.8   |   |   |   | 17.9   |   |   |   | 0.9    |   |   |   | 5.0 | % |
| Research and development   |   |   | 6.7    |   |   |   | 7.1    |   |   |   | (0.4   | )      |   |   | -5.6 | % |
| Total operating expenses   |   |   | 59.3   |   |   |   | 57.2   |   |   |   | 2.1    |   |   |   | 3.7 | % |
|                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income from operations     |   |   | 36.3   |   |   |   | 16.5   |   |   |   | 19.8   |   |   |   | 120.0 | % |
|                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense           |   |   | (0.8   | )      |   |   | (0.9   | )      |   |   | 0.1    |   |   |   | -11.1 | % |
| Interest income            |   |   | 0.1    |   |   |   | 0.1    |   |   |   | -      |   |   |   | 0.0 | % |
| Other expense, net         |   |   | 0.1    |   |   |   | (0.3   | )      |   |   | 0.4    |   |   |   | -133.3 | % |
|                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income before income taxes |   |   | 35.7   |   |   |   | 15.4   |   |   |   | 20.3   |   |   |   | 131.8 | % |
| Provision for income taxes |   |   | 10.6   |   |   |   | 5.4    |   |   |   | 5.2    |   |   |   | 96.3 | % |
| Net income                 |   | $      | 25.1   |   |   | $      | 10.0   |   |   | $      | 15.1   |   |   |   | 151.0 | % |
|                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted earnings per share |   | $      | 1.60   |   |   | $      | 0.60   |   |   | $      | 1.00   |   |   |   | 166.7 | % |

|                     |   | Six Fiscal   |   |   |      |   |   |         |   |   | Six Fiscal |   |
|--------------------------|--------|--------------|--------|--------|-----------|--------|--------|--------------|--------|--------|------------|--------|
|                     |   | Months Ended |   |   | Estimated |   |   | Months Ended |   |
|                     |   | April 2,     |   |   | Business  |   |   | Currency     |   |   | April 3,   |   |
|                     |   | 2011         |   |   | Change    |   |   | Translation  |   |   | 2010       |   |
|                     |   |         |   |   |      |   |   |         |   |   |       |   |
| Revenue                  |   | $            | 218.9  |   |      | $      | 34.9   |         |   | $      | 0.8        |   |   | $ | 183.2 |   |
| Cost of sales            |   |         | 123.3  |   |      |   | 13.3   |         |   |   | 0.5        |   |   |   | 109.5 |   |
| Gross profit             |   |         | 95.6   |   |      |   | 21.6   |         |   |   | 0.3        |   |   |   | 73.7 |   |
| Gross margin             |   |         | 43.7   | %      |      |   |   |         |   |   |       |   |   |   | 40.2 | % |
| Operating expenses:      |   |         |   |   |      |   |   |         |   |   |       |   |   |   |   |   |
| Selling and marketing    |   |         | 33.8   |   |      |   | 1.5    |         |   |   | 0.1        |   |   |   | 32.2 |   |
| General administrative   |   |         | 18.8   |   |      |   | 0.8    |         |   |   | 0.1        |   |   |   | 17.9 |   |
| Research and development |   |         | 6.7    |   |      |   | (0.4   | )            |   |   | -          |   |   |   | 7.1 |   |
| Total operating expenses |   |         | 59.3   |   |      |   | 1.9    |         |   |   | 0.2        |   |   |   | 57.2 |   |
|                     |   |         |   |   |      |   |   |         |   |   |       |   |   |   |   |   |
| Income from operations   |   | $            | 36.3   |   |      | $      | 19.7   |         |   | $      | 0.1        |   |   | $ | 16.5 |   |

----

Index

| Test Segment |   |
|-------------------|--------|

|         | Six Fiscal                                                               |   |                                                                                |   |                                                                                                                 |   | Six Fiscal                                                               |
|--------------|--------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------|
|         | Months Ended                                                             |   | Estimated                                                                           |   | Months Ended                                                                                                         |
|         | April 2,                                                                 |   | Business                                                                            |   | Currency                                                                                                             |   | April 3,                                                                 |
|         | 2011                                                                     |   | Change                                                                              |   | Translation                                                                                                          |   | 2010                                                                     |
|         |                                                                     |   |                                                                                |   |                                                                                                                 |   |                                                                     |
|  Orders |  $          207.5 |   |  $            45.0 |   |  $                  - |   |  $          162.5 |

----

Index

|                     |   | Six Fiscal   |   |   |      |   |   |         |   |   | Six Fiscal |   |
|--------------------------|--------|--------------|--------|--------|-----------|--------|--------|--------------|--------|--------|------------|--------|
|                     |   | Months Ended |   |   | Estimated |   |   | Months Ended |   |
|                     |   | April 2,     |   |   | Business  |   |   | Currency     |   |   | April 3,   |   |
|                     |   | 2011         |   |   | Change    |   |   | Translation  |   |   | 2010       |   |
|                     |   |         |   |   |      |   |   |         |   |   |       |   |
| Revenue                  |   | $            | 169.3  |   |      | $      | 21.5   |         |   | $      | 0.6        |   |   | $ | 147.2 |   |
| Cost of sales            |   |         | 102.2  |   |      |   | 8.9    |         |   |   | 0.4        |   |   |   | 92.9 |   |
| Gross profit             |   |         | 67.1   |   |      |   | 12.6   |         |   |   | 0.2        |   |   |   | 54.3 |   |
| Gross margin             |   |         | 39.6   | %      |      |   |   |         |   |   |       |   |   |   | 36.9 | % |
| Operating expenses:      |   |         |   |   |      |   |   |         |   |   |       |   |   |   |   |   |
| Selling and marketing    |   |         | 26.0   |   |      |   | 0.2    |         |   |   | 0.1        |   |   |   | 25.7 |   |
| General administrative   |   |         | 13.9   |   |      |   | -      |         |   |   | 0.1        |   |   |   | 13.8 |   |
| Research and development |   |         | 4.6    |   |      |   | (0.7   | )            |   |   | -          |   |   |   | 5.3 |   |
| Total operating expenses |   |         | 44.5   |   |      |   | (0.5   | )            |   |   | 0.2        |   |   |   | 44.8 |   |
|                     |   |         |   |   |      |   |   |         |   |   |       |   |   |   |   |   |
| Income from operations   |   | $            | 22.6   |   |      | $      | 13.1   |         |   | $      | -          |   |   | $ | 9.5 |   |

----

Index

| Sensors Segment |   |
|----------------------|--------|

|         |   | Six Fiscal   |   |   |      |   |   |         |   |   | Six Fiscal |   |
|--------------|--------|--------------|--------|--------|-----------|--------|--------|--------------|--------|--------|------------|--------|
|         |   | Months Ended |   |   | Estimated |   |   | Months Ended |   |
|         |   | April 2,     |   |   | Business  |   |   | Currency     |   |   | April 3,   |   |
|         |   | 2011         |   |   | Change    |   |   | Translation  |   |   | 2010       |   |
|         |   |         |   |   |      |   |   |         |   |   |       |   |
|  Orders |   | $            | 50.6   |   |      | $      | 11.8   |         |   | $      | 0.2        |   |   | $ | 38.6 |   |

|                           |   | Six Fiscal   |   |   |      |   |   |         |   |   | Six Fiscal |   |
|--------------------------------|--------|--------------|--------|--------|-----------|--------|--------|--------------|--------|--------|------------|--------|
|                           |   | Months Ended |   |   | Estimated |   |   | Months Ended |   |
|                           |   | April 2,     |   |   | Business  |   |   | Currency     |   |   | April 3,   |   |
|                           |   | 2011         |   |   | Change    |   |   | Translation  |   |   | 2010       |   |
|                           |   |         |   |   |      |   |   |         |   |   |       |   |
|  Revenue                  |   | $            | 49.6   |   |      | $      | 13.4   |         |   | $      | 0.2        |   |   | $ | 36.0 |   |
|  Cost of sales            |   |         | 21.1   |   |      |   | 4.4    |         |   |   | 0.1        |   |   |   | 16.6 |   |
|  Gross profit             |   |         | 28.5   |   |      |   | 9.0    |         |   |   | 0.1        |   |   |   | 19.4 |   |
|  Gross margin             |   |         | 57.3   | %      |      |   |   |         |   |   |       |   |   |   | 54.0 | % |
|  Operating expenses:      |   |         |   |   |      |   |   |         |   |   |       |   |   |   |   |   |
|  Selling and marketing    |   |         | 7.8    |   |      |   | 1.3    |         |   |   | -          |   |   |   | 6.5 |   |
|  General administrative   |   |         | 4.9    |   |      |   | 0.8    |         |   |   | -          |   |   |   | 4.1 |   |
|  Research and development |   |         | 2.1    |   |      |   | 0.3    |         |   |   | -          |   |   |   | 1.8 |   |
|  Total operating expenses |   |         | 14.8   |   |      |   | 2.4    |         |   |   | -          |   |   |   | 12.4 |   |
|                           |   |         |   |   |      |   |   |         |   |   |       |   |   |   |   |   |
|  Income from operations   |   | $            | 13.7   |   |      | $      | 6.6    |         |   | $      | 0.1        |   |   | $ | 7.0 |   |

----

Index

----

Index

----

Index

Market Risk

----

Index

dure

FORM

dings

ctors

----

Index

hibi

| Exhibit Number |   | Description                                                                                                                           |
|----------------|--------|---------------------------------------------------------------------------------------------------------------------------------------|
|           |   |                                                                                                                                  |
| 31.1           |   | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).                  |
|           |   |                                                                                                                                  |
| 31.2           |   | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).                  |
|           |   |                                                                                                                                  |
| 32.1           |   | Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) (filed herewith). |
|           |   |                                                                                                                                  |
| 32.2           |   | Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) (filed herewith). |

----

Index

TURES

|                                            | MTS SYSTEMS CORPORATION                    |   |
|-------------------------------------------------|--------------------------------------------|--------|
|                                            |                                       |   |
|                                            |                                       |   |
| Dated:  May 5, 2011         | /s/ LAURA B. HAMILTON                      |   |
|                                            | Laura B. Hamilton                          |   |
|                                            | Chair and Chief Executive Officer          |   |
|                                            |                                       |   |
|                                            |                                       |   |
| Dated:  May 5, 2011    | /s/ SUSAN E. KNIGHT                        |   |
|                                            | Susan E. Knight                            |   |
|                                            | Vice President and Chief Financial Officer |   |

----

Index

| 31.1   |   | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).                  |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                  |
| 31.2   |   | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).                  |
|   |   |                                                                                                                                  |
| 32.1   |   | Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) (filed herewith). |
|   |   |                                                                                                                                  |
| 32.2   |   | Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) (filed herewith). |

----