Table of Contents





|                                   |  | 
|---------------------------------- |  | 
|UNITED STATES                     
|SECURITIES AND EXCHANGE COMMISSION
|Washington, DC 20549              
|                                   |  | 
|                                   |  | 
|                                  
|FORM 10-Q                         
|                                   |  | 

|           |                                                                                                                                                  
|---------- | -------------------------------------------------------------------------------------------------------------------------------------------------
|(Mark One)
|x          | QUARTERLY REPORT PURSUANT
 TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE
 QUARTERLY PERIOD ENDED June 30, 2009;
 OR      
|           |                                                                                                                                                  
|o          | TRANSITION REPORT PURSUANT
 TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE
 TRANSITION PERIOD FROM __________TO__________.

|                                  |  | 
|--------------------------------- |  | 
|Commission File Number: 000-20728
|                                  |  | 

| |                                                         | 
| | ------------------------------------------------------- | 
| | RIMAGE
 CORPORATION                                     | 
| | (Exact
 name of registrant as specified in its charter) | 

| |                                  |  |                                       |            |  | 
| | -------------------------------- |  | ------------------------------------- | ---------- |  | 
| | Minnesota                        |  |                                       | 41-1577970 |  | 
| | (State
 or other jurisdiction of |  | (I.R.S.
 Employer Identification No.) |           
| | incorporation
 or organization)  |  |                                       |           

| |                                               | 
| | --------------------------------------------- | 
| | 7725 Washington Avenue South, Edina, MN 55439 | 
| | (Address
 of principal executive offices)     | 

|                                                      |              | 
|----------------------------------------------------- | ------------ | 
|                                                      | 952-944-8144 | 
|(Registrants
 telephone number, including area code)

| |  | 
| |  | 
| |  | 

Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YesxNoo

Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T during the
preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files). YesoNoo

Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company (as
defined in Rule 12b-2 of the Exchange Act):

Large Accelerated Filero     Accelerated Filerx     Non-Accelerated Filero     Smaller Reporting Companyo

Indicate by check mark
whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act): YesoNox

Common Stock outstanding at
July 31, 2009  9,375,185 shares of $.01 par value Common Stock.

1





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RIMAGE CORPORATION
FORM 10-QTABLE OF CONTENTSFOR THE
QUARTER ENDED JUNE 30, 2009

|           |  |                                                                                                        |  |       |  |     
|---------- |  | ------------------------------------------------------------------------------------------------------ |  | ----- |  | ----
|           |  | Description                                                                                            |  |       |  | Page
|           |  |                                                                                                        |  |      
|PART 1     |  | FINANCIAL INFORMATION                                                                                  |  |      
|           |  |                                                                                                        |  |      
|Item 1.    |  | Financial Statements (unaudited)                                                                       |  |      
|           |  |                                                                                                        |  |      
|           |  | Condensed Consolidated Balance Sheets as of
 June 30, 2009 and December 31, 2008                       |  | 3    
|           |  |                                                                                                        |  |      
|           |  | Condensed Consolidated Statements of Income
 for the three and six months ended June 30, 2009 and 2008 |  | 4    
|           |  |                                                                                                        |  |      
|           |  | Condensed Consolidated Statements of Cash Flows
 for the six months ended June 30, 2009 and 2008       |  | 5    
|           |  |                                                                                                        |  |      
|           |  | Notes to Condensed Consolidated Financial
Statements                                                   |  | 6-16 
|           |  |                                                                                                        |  |      
|Item 2.    |  | Managements Discussion and Analysis of
 Financial Condition and Results of Operations                 |  | 17-24
|           |  |                                                                                                        |  |      
|Item 3.    |  | Quantitative and Qualitative Disclosures about
 Market Risk                                            |  | 24   
|           |  |                                                                                                        |  |      
|Item 4.    |  | Controls and Procedures                                                                                |  | 25   
|           |  |                                                                                                        |  |      
|PART II    |  | OTHER INFORMATION                                                                                      |  | 25-26
|           |  |                                                                                                        |  |      
|Item 1.    |  | Legal Proceedings                                                                                      |  |      
|           |  |                                                                                                        |  |      
|Item 1A.   |  | Risk Factors                                                                                           |  |      
|           |  |                                                                                                        |  |      
|Item 2.    |  | Unregistered Sales of Equity Securities and Use of
 Proceeds                                           |  |      
|           |  |                                                                                                        |  |      
|Item 3.    |  | Defaults Upon Senior Securities                                                                        |  |      
|           |  |                                                                                                        |  |      
|Item 4.    |  | Submission of Matters to a Vote of Security
Holders                                                    |  |      
|           |  |                                                                                                        |  |      
|Item 5.    |  | Other Information                                                                                      |  |      
|           |  |                                                                                                        |  |      
|Item 6.    |  | Exhibits                                                                                               |  |      
|           |  |                                                                                                        |  |      
|SIGNATURES |  |                                                                                                        |  | 27   

2

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Table of Contents

PART 1  FINANCIAL INFORMATION


Item 1. Financial Statements (unaudited)


RIMAGE CORPORATION AND SUBSIDIARIESCondensed Consolidated Balance Sheets(unaudited - in
thousands, except share data)

|                                                                                                                          |  |                 |         |                     |   |         | 
|------------------------------------------------------------------------------------------------------------------------- |  | --------------- | ------- | ------------------- | - | ------- | 
|Assets                                                                                                                    |  | June
 30,
 2009 |         | December
 31,
 2008 |  
|                                                                                                                          |  |                 |         |                     |   |         | 
|Current assets:                                                                                                           |  |                 |         |                     |   |         | 
|Cash and cash equivalents                                                                                                 |  | $               | 8,971   |                     | $ | 14,885  | 
|Marketable securities                                                                                                     |  |                 | 77,599  |                     |   | 39,870  | 
|Receivables, net of allowance for doubtful accounts and 
 sales returns of $327 and $489, respectively                    |  |                 | 11,161  |                     |   | 11,099  | 
|Inventories                                                                                                               |  |                 | 3,651   |                     |   | 5,625   | 
|Prepaid income taxes                                                                                                      |  |                 |        |                     |   | 314     | 
|Prepaid expenses and other current assets                                                                                 |  |                 | 1,897   |                     |   | 2,014   | 
|Deferred income taxes - current                                                                                           |  |                 | 527     |                     |   | 344     | 
|Total current assets                                                                                                      |  |                 | 103,806 |                     |   | 74,151  | 
|                                                                                                                          |  |                 |         |                     |   |         | 
|Marketable securities - non-current                                                                                       |  |                 | 17,844  |                     |   | 40,647  | 
|Property and equipment, net                                                                                               |  |                 | 5,715   |                     |   | 6,183   | 
|Deferred income taxes - non-current                                                                                       |  |                 | 2,183   |                     |   | 2,281   | 
|Other assets - non-current                                                                                                |  |                 |        |                     |   | 194     | 
|Total assets                                                                                                              |  | $               | 129,548 |                     | $ | 123,456 | 
|                                                                                                                          |  |                 |         |                     |   |         | 
|Liabilities and
 Stockholders Equity                                                                                     |  |                 |         |                     |   |         | 
|Current liabilities:                                                                                                      |  |                 |         |                     |   |         | 
|Trade accounts payable                                                                                                    |  | $               | 4,121   |                     | $ | 4,534   | 
|Accrued compensation                                                                                                      |  |                 | 2,508   |                     |   | 1,879   | 
|Other accrued expenses                                                                                                    |  |                 | 923     |                     |   | 827     | 
|Income taxes payable                                                                                                      |  |                 | 705     |                     |   |        | 
|Deferred income and customer deposits                                                                                     |  |                 | 5,753   |                     |   | 4,507   | 
|Other current liabilities                                                                                                 |  |                 | 31      |                     |   | 263     | 
|Total current liabilities                                                                                                 |  |                 | 14,041  |                     |   | 12,010  | 
|                                                                                                                          |  |                 |         |                     |   |         | 
|Long-term liabilities:                                                                                                    |  |                 |         |                     |   |         | 
|Deferred income and customer deposits - non-current                                                                       |  |                 | 2,417   |                     |   | 1,942   | 
|Income taxes payable - non-current                                                                                        |  |                 | 246     |                     |   | 421     | 
|Other non-current liabilities                                                                                             |  |                 | 22      |                     |   | 35      | 
|Total long-term liabilities                                                                                               |  |                 | 2,685   |                     |   | 2,398   | 
|Total liabilities                                                                                                         |  |                 | 16,726  |                     |   | 14,408  | 
|                                                                                                                          |  |                 |         |                     |   |         | 
|Stockholders equity:                                                                                                     |  |                 |         |                     |   |         | 
|Preferred stock, $.01 par value, authorized 250,000 shares,
 no shares issued and outstanding                             |  |                 |        |                     |   |        | 
|Common stock, $.01 par value, authorized 29,750,000 shares,
 issued and outstanding 9,375,185 and 9,334,435, respectively |  |                 | 94      |                     |   | 93      | 
|Additional paid-in capital                                                                                                |  |                 | 38,495  |                     |   | 37,484  | 
|Retained earnings                                                                                                         |  |                 | 73,445  |                     |   | 70,287  | 
|Accumulated other comprehensive income                                                                                    |  |                 | 788     |                     |   | 1,184   | 
|Total stockholders equity                                                                                                |  |                 | 112,822 |                     |   | 109,048 | 
|                                                                                                                          |  |                 |         |                     |   |         | 
|Total liabilities and stockholders equity                                                                                |  | $               | 129,548 |                     | $ | 123,456 | 

See accompanying notes to
condensed consolidated financial statements.

3

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Table of Contents

RIMAGE CORPORATION AND SUBSIDIARIESCondensed
Consolidated Statements of Income(unaudited - in
thousands, except per share data)

|                                               |  |                              |        |                            |   |        |   |      |        |   |   |        |  
|---------------------------------------------- |  | ---------------------------- | ------ | -------------------------- | - | ------ | - | ---- | ------ | - | - | ------ | -
|                                               |  | Three Months Ended
 June 30, |        | Six Months Ended
 June 30, |  
|                                               |  | 2009                         |        | 2008                       |   | 2009   |   | 2008 |       
|                                               |  |                              |        |                            |   |        |   |      |        |   |   |        |  
|Revenues:                                      |  |                              |        |                            |   |        |   |      |        |   |   |        |  
|Product                                        |  | $                            | 17,132 |                            | $ | 20,437 |   | $    | 32,493 |   | $ | 40,874 |  
|Service                                        |  |                              | 2,686  |                            |   | 2,249  |   |      | 5,683  |   |   | 4,561  |  
|Total revenues                                 |  |                              | 19,818 |                            |   | 22,686 |   |      | 38,176 |   |   | 45,435 |  
|Cost of revenues:                              |  |                              |        |                            |   |        |   |      |        |   |   |        |  
|Product                                        |  |                              | 8,813  |                            |   | 10,202 |   |      | 16,741 |   |   | 20,912 |  
|Service                                        |  |                              | 1,817  |                            |   | 2,570  |   |      | 3,682  |   |   | 4,932  |  
|Total cost of revenues                         |  |                              | 10,630 |                            |   | 12,772 |   |      | 20,423 |   |   | 25,844 |  
|Gross profit                                   |  |                              | 9,188  |                            |   | 9,914  |   |      | 17,753 |   |   | 19,591 |  
|                                               |  |                              |        |                            |   |        |   |      |        |   |   |        |  
|Operating expenses:                            |  |                              |        |                            |   |        |   |      |        |   |   |        |  
|Research and development                       |  |                              | 1,501  |                            |   | 1,513  |   |      | 3,476  |   |   | 2,864  |  
|Selling, general and administrative            |  |                              | 5,148  |                            |   | 5,672  |   |      | 10,490 |   |   | 12,310 |  
|Total operating expenses                       |  |                              | 6,649  |                            |   | 7,185  |   |      | 13,966 |   |   | 15,174 |  
|Operating income                               |  |                              | 2,539  |                            |   | 2,729  |   |      | 3,787  |   |   | 4,417  |  
|                                               |  |                              |        |                            |   |        |   |      |        |   |   |        |  
|Other income (expense):                        |  |                              |        |                            |   |        |   |      |        |   |   |        |  
|Interest, net                                  |  |                              | 458    |                            |   | 676    |   |      | 1,014  |   |   | 1,512  |  
|Realized gain on sale of marketable securities |  |                              | 278    |                            |   |       |   |      | 278    |   |   |       |  
|Gain (loss) on currency exchange               |  |                              | 87     |                            |   | (410   | ) |      | 42     |   |   | (163   | )
|Other, net                                     |  |                              |       |                            |   | 21     |   |      | (1     | ) |   | 20     |  
|Total other income, net                        |  |                              | 823    |                            |   | 287    |   |      | 1,333  |   |   | 1,369  |  
|Income before income taxes                     |  |                              | 3,362  |                            |   | 3,016  |   |      | 5,120  |   |   | 5,786  |  
|Income tax expense                             |  |                              | 1,389  |                            |   | 1,089  |   |      | 1,962  |   |   | 2,073  |  
|Net income                                     |  | $                            | 1,973  |                            | $ | 1,927  |   | $    | 3,158  |   | $ | 3,713  |  
|                                               |  |                              |        |                            |   |        |   |      |        |   |   |        |  
|Net income per basic share                     |  | $                            | 0.21   |                            | $ | 0.20   |   | $    | 0.34   |   | $ | 0.38   |  
|                                               |  |                              |        |                            |   |        |   |      |        |   |   |        |  
|Net income per diluted share                   |  | $                            | 0.20   |                            | $ | 0.19   |   | $    | 0.33   |   | $ | 0.37   |  
|                                               |  |                              |        |                            |   |        |   |      |        |   |   |        |  
|Basic weighted average shares outstanding      |  |                              | 9,372  |                            |   | 9,665  |   |      | 9,358  |   |   | 9,714  |  
|                                               |  |                              |        |                            |   |        |   |      |        |   |   |        |  
|Diluted weighted average shares outstanding    |  |                              | 9,517  |                            |   | 9,820  |   |      | 9,463  |   |   | 9,946  |  

See accompanying notes to
condensed consolidated financial statements.

4

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Table of Contents

RIMAGE CORPORATION AND SUBSIDIARIESCondensed Consolidated Statements of Cash Flows(unaudited
- in thousands)

|                                                                                   |  |                             |         |      |   |         |  
|---------------------------------------------------------------------------------- |  | --------------------------- | ------- | ---- | - | ------- | -
|                                                                                   |  | Six
 months ended
 June 30, |        
|                                                                                   |  | 2009                        |         | 2008 |  
|Cash flows from operating activities:                                              |  |                             |         |      |   |         |  
|Net income                                                                         |  | $                           | 3,158   |      | $ | 3,713   |  
|Adjustments to reconcile net income to net cash provided by operating
 activities: |  |                             |         |      |   |         |  
|Depreciation and amortization                                                      |  |                             | 605     |      |   | 725     |  
|Deferred income tax charge (benefit)                                               |  |                             | (100    | )    |   | (171    | )
|Gain on sale of marketable securities                                              |  |                             | (278    | )    |   |        |  
|Loss on disposal of property and equipment                                         |  |                             | 2       |      |   | 3       |  
|Stock-based compensation                                                           |  |                             | 800     |      |   | 298     |  
|Excess tax benefits from stock-based compensation                                  |  |                             |        |      |   | (701    | )
|Changes in operating assets and liabilities:                                       |  |                             |         |      |   |         |  
|Receivables                                                                        |  |                             | (130    | )    |   | 596     |  
|Inventories                                                                        |  |                             | 1,808   |      |   | 1,898   |  
|Prepaid
 income taxes/income taxes payable                                         |  |                             | 927     |      |   | (731    | )
|Prepaid
 expenses and other current assets                                         |  |                             | 283     |      |   | 274     |  
|Trade
 accounts payable                                                            |  |                             | (383    | )    |   | (2,572  | )
|Accrued
 compensation                                                              |  |                             | 639     |      |   | (624    | )
|Other
 accrued expenses and other current liabilities                              |  |                             | (120    | )    |   | (106    | )
|Deferred
 income and customer deposits                                             |  |                             | 1,736   |      |   | (495    | )
|                                                                                   |  |                             |         |      |   |         |  
|Net cash provided by operating activities                                          |  |                             | 8,947   |      |   | 2,107   |  
|                                                                                   |  |                             |         |      |   |         |  
|Cash flows from investing activities:                                              |  |                             |         |      |   |         |  
|Purchases of marketable securities                                                 |  |                             | (52,273 | )    |   | (34,760 | )
|Maturities and sales of marketable securities                                      |  |                             | 37,260  |      |   | 51,496  |  
|Purchases of property and equipment                                                |  |                             | (110    | )    |   | (463    | )
|Other non-current items                                                            |  |                             |        |      |   | 344     |  
|                                                                                   |  |                             |         |      |   |         |  
|Net cash provided by (used in) investing activities                                |  |                             | (15,123 | )    |   | 16,617  |  
|                                                                                   |  |                             |         |      |   |         |  
|Cash flows from financing activities:                                              |  |                             |         |      |   |         |  
|Principal payments on capital lease obligations                                    |  |                             | (13     | )    |   | (12     | )
|Repurchase of common stock                                                         |  |                             |        |      |   | (4,999  | )
|Excess tax benefits from stock-based compensation                                  |  |                             |        |      |   | 701     |  
|Proceeds from employee stock plans                                                 |  |                             | 284     |      |   | 1,485   |  
|                                                                                   |  |                             |         |      |   |         |  
|Net cash provided by (used in) financing activities                                |  |                             | 271     |      |   | (2,825  | )
|                                                                                   |  |                             |         |      |   |         |  
|Effect of exchange rate changes on cash                                            |  |                             | (9      | )    |   | 112     |  
|                                                                                   |  |                             |         |      |   |         |  
|Net increase (decrease) in cash and cash equivalents                               |  |                             | (5,914  | )    |   | 16,011  |  
|                                                                                   |  |                             |         |      |   |         |  
|Cash and cash equivalents, beginning of period                                     |  |                             | 14,885  |      |   | 7,416   |  
|                                                                                   |  |                             |         |      |   |         |  
|Cash and cash equivalents, end of period                                           |  | $                           | 8,971   |      | $ | 23,427  |  
|                                                                                   |  |                             |         |      |   |         |  
|Supplemental disclosures of net cash paid during the period
for:                   |  |                             |         |      |   |         |  
|Income taxes                                                                       |  | $                           | 1,135   |      | $ | 2,976   |  

See accompanying notes to
condensed consolidated financial statements.

5

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Table of Contents

RIMAGE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 
(unaudited)

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Basis of
 Presentation and Nature of Business                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | Rimage
 Corporation (the Company or Rimage) develops, manufactures and markets
 digital publishing systems that are used by businesses to produce recordable
 CD (CD-R), DVD (DVD-R) and blue laser discs with customized digital
 content on an on-demand basis. Rimage distributes its publishing systems from
 its operations in the United States, Germany and Japan. The Company also
 distributes related consumables for use with its systems, consisting of media
 kits, ribbons, ink cartridges and Rimage-branded blank CD-R, DVD-R and blue
 laser media.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | The
 accompanying condensed consolidated financial statements are unaudited and
 have been prepared by the Company in accordance with accounting principles
 generally accepted in the United States of America for interim financial
 information, pursuant to the rules and regulations of the Securities and
 Exchange Commission. Pursuant to such rules and regulations, certain
 financial information and footnote disclosures normally included in the
 financial statements have been condensed or omitted. However, in the opinion
 of management, the financial statements include all adjustments, consisting
 of normal recurring accruals, necessary for a fair presentation of the
 financial position and results of operations and cash flows of the interim
 periods presented. Operating results for these interim periods are not
 necessarily indicative of results to be expected for the entire year, due to
 seasonal, operating and other factors. These condensed consolidated financial
 statements should be read in conjunction with the consolidated financial
 statements and notes thereto included in the Companys Annual Report on Form
 10-K as of and for the year ended December 31, 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | The
 preparation of financial statements in conformity with accounting principles
 generally accepted in the United States of America requires management to
 make estimates and assumptions that affect the reported amounts of assets and
 liabilities at the date of the financial statements and the reported amounts
 of revenues and expenses during the reporting period. Actual results could
 differ from estimates on items such as allowance for doubtful accounts and
 sales returns, inventory provisions, asset impairment charges, deferred tax
 asset valuation allowances, accruals for uncertain tax positions and warranty
 accruals. These estimates and assumptions are based on managements best
 judgment. Management evaluates estimates and assumptions on an ongoing basis
 using its technical knowledge, historical experience and other factors,
 including consideration of the impact of the current economic environment.
 Management believes its assumptions are reasonable in light of the current
 economic environment. Management adjusts such estimates and assumptions when
 facts and circumstances change. Illiquid credit markets, volatile equity,
 foreign currency and energy markets, and declines in business and consumer
 spending have combined to increase the uncertainty inherent in such estimates
 and assumptions. As future events and their effects cannot be determined with
 precision, actual results could differ significantly from these estimates.
 Changes in those estimates resulting from continuing changes in the economic
 environment will be reflected in the financial statements in future periods.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | The Company has evaluated
 subsequent events through the date that the financial statements were issued,
 which was August 7, 2009, the date of the Companys Quarterly Report on Form
 10-Q for the period ended June 30, 2009. No subsequent events requiring
 financial statement adjustment or disclosure were noted.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

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Table of Contents

RIMAGE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 
(unaudited)

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Stock-Based
 Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | In May 2007, the Companys
 shareholders approved the 2007 Stock Incentive Plan (the 2007 Plan). The
 2007 Plan provides for the grant of stock incentive awards in the form of
 incentive and non-qualified stock options, stock appreciation rights,
 restricted stock, restricted stock units, performance stock, performance
 units and other awards in stock and/or cash to certain key employees,
 non-employee directors and service providers. In May 2009, the Companys
 shareholders approved amendments to the 2007 Plan, including an increase in
 the number of shares authorized for issuance by 500,000 shares to a total of
 1,230,320 shares. At June 30, 2009, a total of 683,870 shares were available
 for future grant under the 2007 Plan, as amended. Effective with the approval
 of the 2007 Plan in May 2007, the Company may not issue any new awards or
 options under its Amended and Restated 1992 Stock Option Plan (the 1992 Plan).
 The exercise price of stock options granted under the 2007 Plan is equal to
 the market value on the date of grant. Options issued to employees through
 March 31, 2006 under the 1992 Plan generally become exercisable over a
 two-year period and terminate ten years from the date of grant. Options
 issued to employees after March 31, 2006 under both the 1992 Plan and the
 2007 Plan generally become exercisable over a four-year period. Options
 issued to employees through May 13, 2008 under the 1992 Plan and the 2007
 Plan terminate ten years from the date of grant, while options issued
 effective May 14, 2008 under the 2007 Plan terminate seven years from the
 date of grant. Stock options granted to non-employee directors vest six
 months from the date of grant and terminate ten years from the date of grant.
 Restricted stock and restricted stock unit awards issued to non-employee
 directors under the 2007 Plan are subject to the risk of forfeiture and
 transfer restrictions that lapse one year from the date of grant.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | In addition to awards
 granted under the 2007 Plan and 1992 Plan, the Company granted a
 non-qualified option to purchase 200,000 shares of its common stock to a
 newly hired executive officer on April 1, 2009. The option was granted
 outside of any shareholder-approved plan as an inducement to accept
 employment with the Company. The option has an exercise price equal to the
 closing price of the Companys common stock as reported by the Nasdaq Stock
 Market on the first day of employment of April 1, 2009, vests in four equal
 installments on each of the first four anniversaries of the date of grant and
 has a term of seven years. In other respects, the option was structured to
 mirror the terms of options granted under the 2007 Plan and is subject to a
 stock option agreement between the Company and the executive officer.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | In accordance with
 Statement of Financial Accounting Standards (SFAS) No. 123R, Share-Based
 Payment, stock-based compensation expense is determined based on the
 grant-date fair value and is recognized on a straight-line basis over the
 vesting period for each stock-based award granted on or after January 1,
 2006, and for previously granted awards not yet vested as of January 1, 2006.
 Under the provisions of SFAS 123R, the Company recognizes stock-based
 compensation net of an estimated forfeiture rate, resulting in the
 recognition of compensation cost for only those shares expected to vest.
 Compensation cost is recognized for all awards over the vesting period to the
 extent the employees or directors meet the requisite service requirements,
 whether or not the award is ultimately exercised. Conversely, when an
 employee or director does not meet the requisite service requirements and
 forfeits the award prior to vesting, any compensation expense previously
 recognized for the award is reversed. The Company recognized stock-based
 compensation costs of $584,000 and $799,000 for the three and six months
 ended June 30, 2009, respectively, compared to $104,000 and $297,000 for the
 comparable periods in 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

7

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Table of Contents

RIMAGE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 
(unaudited)

| |                                                                                                                                                                                                                                                       
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The fair value of each
 option award is estimated at the date of grant using the Black-Scholes option
 pricing model. The following key assumptions were utilized in valuing option
 awards issued during the six months ended June 30, 2009 and 2008:

| |                                    |  |                           |             |      |  |              |  
| | ---------------------------------- |  | ------------------------- | ----------- | ---- |  | ------------ | -
| |                                    |  | Six Months Ended June 30, |            
| |                                    |  | 2009                      |             | 2008 | 
| |                                    |  |                           |             |      |  |              |  
| | Expected life of options in
 years |  |                           | 4.75        |      |  | 4.75
 - 6.00 |  
| |                                    |  |                           |             |      |  |              |  
| | Risk-free interest rate            |  |                           | 1.6%
 - 1.9 | %    |  | 3.1          | %
| |                                    |  |                           |             |      |  |              |  
| | Expected volatility                |  |                           | 48.5        | %    |  | 39.1
 - 40.0 | %
| |                                    |  |                           |             |      |  |              |  
| | Expected dividend yield            |  |                           | 0.0         | %    |  | 0.0          | %

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In accordance with SFAS
 No. 123R, the Company reviews these assumptions at the time of each new
 option award and adjusts them as necessary to ensure proper option valuation.
 The expected life represents the period that the stock option awards are
 expected to be outstanding. For all stock options granted to non-employee
 directors in 2008, the expected life was determined based on an analysis of
 historical exercise behavior and anticipated future exercise patterns, giving
 consideration to the contractual terms of unexercised stock option awards.
 Effective April 2008, the Companys Board of Directors approved a change in
 the contractual term of stock options granted to employees from ten to seven
 years. Given the reduction in the contractual term of its employee stock
 option awards, the Company determined it was unable to rely on its historical
 exercise data as a basis for estimating the expected life of stock options
 granted to employees in 2008 and 2009. As such, the Company used the
 simplified method for determining the expected life of stock options
 granted to employees in 2008 and 2009, as specified by Staff Accounting
 Bulletin (SAB) No. 107, Valuation of Share-Based Payment Arrangements for
 Public Companies, which bases the expected life calculation on the average
 of the vesting term and the contractual term of the awards. The risk-free
 interest rate is based on the yield of constant maturity U.S. treasury bonds
 with a remaining term equal to the expected life of the awards. The Company
 estimated the stock price volatility using historical weekly price
 observations over the expected life of the awards. The expected dividend
 yield is zero as the Company has not paid or declared any cash dividends on
 its common stock and does not currently have plans to pay dividends.

8

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Table of Contents

RIMAGE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

| |                                                              
| | -------------------------------------------------------------
| | Other information
 pertaining to stock options is as follows:

|                                                          |  |                                       |       |                           |   |       |  |      |       |  |   |       | 
|--------------------------------------------------------- |  | ------------------------------------- | ----- | ------------------------- | - | ----- |  | ---- | ----- |  | - | ----- | 
|                                                          |  | Three Months Ended June 30,           |       | Six Months Ended June 30, |  
|                                                          |  | 2009                                  |       | 2008                      |   | 2009  |  | 2008 |      
|                                                          |  | (in thousands, except per share data) |      
|                                                          |  |                                       |       |                           |   |       |  |      |       |  |   |       | 
|Number of options granted                                 |  |                                       | 350   |                           |   | 184   |  |      | 350   |  |   | 184   | 
|Fair value of options
 granted                            |  | $                                     | 2,152 |                           | $ | 1,282 |  | $    | 2,152 |  | $ | 1,282 | 
|Per share weighted average
 fair value of options granted |  | $                                     | 6.14  |                           | $ | 6.98  |  | $    | 6.14  |  | $ | 6.98  | 
|Total fair value of stock
 options vested                 |  | $                                     | 949   |                           | $ | 879   |  | $    | 949   |  | $ | 879   | 
|Total intrinsic value of
 stock options exercised         |  | $                                     | 78    |                           | $ | 562   |  | $    | 152   |  | $ | 2,592 | 
|Total intrinsic value of
 stock options outstanding       |  | $                                     | 2,807 |                           | $ | 899   |  | $    | 2,807 |  | $ | 899   | 

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | Cash
 received from the exercise of stock options was $284,000 and $1,485,000 for
 the six months ended June 30, 2009 and 2008, respectively. The exercise of
 stock options, expirations of vested stock options and lapse of restrictions
 on restricted stock during the six months ended June 30, 2009 generated a net
 non-deductible income tax impact of $71,000, recorded as a reduction to
 additional paid-in capital. The exercise of stock options during the six
 months ended June 30, 2008 generated an income tax benefit of $968,000,
 recorded as an increase to additional paid-in capital.                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|(3) | Accounting for Uncertainty in Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | The
 Company implemented the provisions of Financial Accounting Standards Board
 (FASB) Interpretation No. (FIN) 48, Accounting for Uncertainty in Income
 Taxesan interpretation of FASB Statement No. 109, effective January 1,
 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | Gross
 unrecognized tax benefits recorded under FIN 48 as of June 30, 2009 and
 December 31, 2008 totaled $205,000 and $361,000, respectively (excluding
 interest and penalties). Changes in gross unrecognized tax benefits during
 the six months ended June 30, 2009 consisted primarily of a net increase of
 $51,000 and a decrease of $217,000 for tax positions taken in prior years.
 The decrease of $217,000 is fully offset by a deferred tax asset. Included in
 the balance of unrecognized tax benefits at June 30, 2009 are potential
 benefits of $172,000 that if recognized, would affect the effective tax rate.
 The difference between this amount and the corresponding amount of gross
 unrecognized tax benefits relates primarily to deferred federal benefits of
 uncertain tax positions. The Company made no other material adjustments to
 its unrecognized tax benefits during the six months ended June 30, 2009.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | The
 Company recognizes accrued interest and penalties related to unrecognized tax
 benefits as a component of income tax expense. Total accrued interest and
 penalties amounted to $41,000 and $59,000 on a gross basis at June 30, 2009
 and December 31, 2008, respectively, and are excluded from the gross amounts
 of unrecognized tax benefits reflected above.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

9

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Table of Contents

RIMAGE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 
(unaudited)

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | The
 Company files income tax returns in the U.S. federal jurisdiction and various
 state and foreign jurisdictions. As of June 30, 2009, the Company was no
 longer subject to income tax examinations for taxable years before 2006 and
 2005 in the case of U.S. federal and German taxing authorities, respectively,
 and taxable years generally before 2004 in the case of state taxing
 authorities, consisting primarily of Minnesota, California and Maryland.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|(4) | Marketable Securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | Marketable
 securities consist primarily of U.S. treasury money market securities,
 municipal securities, corporate securities and U.S. government agency
 securities with long-term credit ratings of AAA and short-term credit ratings
 of A-1. Marketable securities are classified as either short-term or
 long-term in the consolidated balance sheet based on their effective maturity
 date. All marketable securities, except for variable rate demand notes, have
 original maturities ranging from three to 36 months. Variable rate demand
 notes may be liquidated in less than three months from the date of purchase,
 but have legal maturities of greater than three months and are required to be
 classified as marketable securities. Marketable securities are classified as
 available-for-sale. Available-for-sale securities are recorded at fair value
 and any unrealized holding gains and losses, net of the related tax effect,
 are excluded from earnings and are reported as a separate component of
 accumulated other comprehensive income until realized. See Note 8, Fair
 Value Measurements, for a discussion of inputs used to measure the fair
 value of the Companys available-for-sale securities. The Companys
 marketable securities at June 30, 2009 did not include any auction-rate
 securities, high-yield sub-prime backed paper or other affected securities
 which are subject to significant market value declines or liquidity issues.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|(5) | Inventories                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | Inventories
 consisted of the following (in thousands):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

| |                                             |  |                |       |                    |   |       | 
| | ------------------------------------------- |  | -------------- | ----- | ------------------ | - | ----- | 
| |                                             |  | June 30,
 2009 |       | December 31,
 2008 |  
| |                                             |  |                |       |                    |   |       | 
| | Finished goods and
 demonstration equipment |  | $              | 1,127 |                    | $ | 1,717 | 
| | Purchased parts and subassemblies           |  |                | 2,524 |                    |   | 3,908 | 
| |                                             |  | $              | 3,651 |                    | $ | 5,625 | 

|    |                                                                                                                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(6) | Comprehensive
 Income                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                
|    | Comprehensive income
 consists of the Companys net income, foreign currency translation
 adjustments, and unrealized holding gains and losses from available-for-sale
 securities. The components of and changes in other comprehensive income are
 as follows (in thousands):

| |                                                                   |  |                              |       |                            |   |       |   |      |       |   |   |       | 
| | ----------------------------------------------------------------- |  | ---------------------------- | ----- | -------------------------- | - | ----- | - | ---- | ----- | - | - | ----- | 
| |                                                                   |  | Three Months Ended
 June 30, |       | Six Months Ended
 June 30, |  
| |                                                                   |  | 2009                         |       | 2008                       |   | 2009  |   | 2008 |      
| |                                                                   |  |                              |       |                            |   |       |   |      |       |   |   |       | 
| | Net income                                                        |  | $                            | 1,973 |                            | $ | 1,927 |   | $    | 3,158 |   | $ | 3,713 | 
| | Other comprehensive income:                                       |  |                              |       |                            |   |       |   |      |       |   |   |       | 
| | Net changes in:                                                   |  |                              |       |                            |   |       |   |      |       |   |   |       | 
| | Foreign currency translation adjustments                          |  |                              | 256   |                            |   | 309   |   |      | (170  | ) |   | 456   | 
| | Net unrealized gain (loss) on marketable securities, net of
taxes |  |                              | (257  | )                          |   | (199  | ) |      | (226  | ) |   | 103   | 
| | Total comprehensive income                                        |  | $                            | 1,972 |                            | $ | 2,037 |   | $    | 2,762 |   | $ | 4,272 | 

10

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Table of Contents

RIMAGE CORPORATION AND SUBSIDIARIES 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(7) | Derivatives                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | The
 Company enters into forward foreign exchange contracts principally to hedge
 intercompany receivables denominated in Euros arising from sales to its
 subsidiary in Germany. The Companys foreign exchange contracts do not
 qualify for hedge accounting under SFAS No. 133, Accounting for Derivative
 Instruments and Hedging Activities. As a result, gains or losses related to
 mark-to-market adjustments on forward foreign exchange contracts are
 recognized as other income or expense in the income statement during the
 period in which the instruments are outstanding. The fair value of forward
 foreign exchange contracts represents the amount the Company would receive or
 pay to terminate the forward exchange contracts at the reporting date and is
 recorded in other current assets or other current liabilities depending on
 whether the net amount is a gain or a loss. The Company does not utilize financial
 instruments for trading or other speculative purposes.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | As
 of June 30, 2009, the Company had three outstanding foreign exchange
 contracts totaling approximately $399,000. These contracts mature during 2009
 and bear exchange rates ranging from 1.3763 to 1.3979 U.S. Dollars per Euro.
 As of June 30, 2009, the fair value of foreign exchange contracts resulted in
 a net loss position of $6,000, which is recorded in other current
 liabilities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | As
 of December 31, 2008, the Company had 15 outstanding foreign exchange
 contracts totaling $2,601,000, all maturing during the first half of 2009 at
 exchange rates ranging from 1.2431 to 1.3540 U.S. Dollars per Euro. As of
 December 31, 2008, the fair value of foreign exchange contracts resulted in a
 net loss position of approximately $238,000, which is recorded in other
 current liabilities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | Gains
 or losses on derivative instruments related to foreign currency exchange
 contracts and their location on the Companys condensed consolidated
 statements of income are as follows (in thousands):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

| |                            |  |                                   |  |                            |     |      |   |     |  
| | -------------------------- |  | --------------------------------- |  | -------------------------- | --- | ---- | - | --- | -
| |                            |  |                                   |  | Six Months Ended
 June 30, |    
| | Derivative
 Instrument     |  | Location                          |  | 2009                       |     | 2008 |  
| |                            |  |                                   |  |                            |     |      |   |     |  
| | Foreign Exchange Contracts |  | Gain (loss) on currency
 exchange |  | $                          | 235 |      | $ | (24 | )

| |                                                                                                                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The net gains or losses from foreign exchange contracts reflected above were largely offset by the underlying
transaction net gains and losses arising from the foreign currency exposures for which these contracts relate.     
| |                                                                                                                                                                                                                                  
| | The gross fair market value of derivative instruments related to foreign currency exchange contracts and their
location on the Companys condensed consolidated balance sheets are as follows as of June 30, 2009 (in thousands):

11

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Table of Contents

RIMAGE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

| |                            |  |                          |  |                       |   |          |                              |                |   |    |  
| | -------------------------- |  | ------------------------ |  | --------------------- | - | -------- | ---------------------------- | -------------- | - | -- | -
| |                            |  | Asset Derivatives        |  | Liability Derivatives |  
| | Derivative Instrument      |  | Location                 |  | June 30,
 2009        |   | Location |                              | June 30,
 2009 |  
| |                            |  |                          |  |                       |   |          |                              |                |   |    |  
| | Foreign Exchange Contracts |  | Other current assets (1) |  | $                     |  |          | Other current liabilities(1) |                | $ | (6 | )

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | (1)
 As the Companys foreign exchange agreement is subject to a master netting
 arrangement, the Companys policy is to record the fair value of outstanding
 foreign exchange contracts as other current assets or other current
 liabilities, based on whether outstanding contracts are in a net gain or loss
 position, respectively. See Note 8, Fair Value Measurements, for additional
 information regarding the fair value measurements of derivative instruments
 related to foreign currency exchange contracts.                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | The
 Company enters into its foreign exchange contracts with a single
 counterparty, a financial institution. The Company manages its concentration
 of counterparty risk associated with foreign exchange contracts by
 periodically assessing relevant information such as the counterpartys
 current financial statements, credit agency reports and/or credit references.
 To further mitigate credit risk, the Companys Foreign Exchange Agreement
 with its counterparty includes a master netting arrangement, which allows
 netting of asset and liability positions of outstanding foreign exchange
 contracts if settlement were required.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|(8) | Fair Value Measurements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | SFAS
 No. 157, Fair Value Measurements, establishes a framework for measuring
 fair value by creating a hierarchy of fair value measurements that
 distinguishes market data between observable independent market inputs and
 unobservable market assumptions by the reporting entity. SFAS No. 157
 provides three levels within its hierarchy that may be used to measure fair
 value:                                                                                                                                                                                                                                                           

| |                                                                                                                                                                                          |   |                                                                                                                                                                                                                                                                                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                          |  | Level
 1: Inputs are unadjusted quoted prices in active markets for identical assets
 and liabilities.                                                                                                                                                                                                                                                                                           
| |                                                                                                                                                                                          |   |                                                                                                                                                                                                                                                                                                                                                                                                  
| |                                                                                                                                                                                          |  | Level
 2: Inputs include data points that are observable such as quoted prices for
 similar assets or liabilities in active markets, quoted prices for identical
 or similar assets or liabilities in markets that are not active, and inputs
 (other than quoted prices) such as interest rates and yield curves that are
 observable for the asset or liability, either directly or indirectly.
| |                                                                                                                                                                                          |   |                                                                                                                                                                                                                                                                                                                                                                                                  
| |                                                                                                                                                                                          |  | Level
 3: Inputs are generated from model-based techniques that use significant
 assumptions not observable in the market. These unobservable assumptions
 reflect an entitys own estimates of assumptions that market participants
 would use in pricing the asset or liability.                                                                                                               
| |                                                                                                                                                                                          |   |                                                                                                                                                                                                                                                                                                                                                                                                  
| | The
 Companys assets and liabilities measured at fair value on a recurring basis
 and the fair value hierarchy utilized to determine such fair values are as
 follows at June 30, 2009:

12

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Table of Contents

RIMAGE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

| |                                             |  |                                         |        |                                             |   |                                                  |  |                                              |        |  |   |   | 
| | ------------------------------------------- |  | --------------------------------------- | ------ | ------------------------------------------- | - | ------------------------------------------------ |  | -------------------------------------------- | ------ |  | - | - | 
| |                                             |  |                                         |        | Fair Value Measurements Using               |  
| | (in thousands)                              |  | Total Carrying
 Value at
 June 30, 2009 |        | Quoted Prices in
 Active Markets
 (Level 1) |   | Significant Other
 Observable
 Inputs
 (Level 2) |  | Significant
 Unobservable
 Inputs
 (Level 3) |       
| | Assets                                      |  |                                         |        |                                             |   |                                                  |  |                                              |        |  |   |   | 
| | Available-for-sale
securities               |  | $                                       | 95,443 |                                             | $ |                                                 |  | $                                            | 95,443 |  | $ |  | 
| | Liabilities                                 |  |                                         |        |                                             |   |                                                  |  |                                              |        |  |   |   | 
| | Foreign currency forward
exchange contracts |  | $                                       | 6      |                                             | $ |                                                 |  | $                                            | 6      |  | $ |  | 

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | Available-for-sale
 securities in the table above are classified as either current or non-current
 marketable securities in the accompanying condensed consolidated balance
 sheets. Available-for-sale securities are carried at fair value based on
 significant observable inputs other than quoted market prices. Such inputs
 may include benchmark yields, reported trades, broker/dealer quotes, issuer
 spreads, two-sided markets, benchmark securities, bids, offers and other
 reference data. Foreign currency forward exchange contracts are also carried
 at fair value based on significant other observable market inputs, in this
 case, quoted foreign currency exchange rates. Such valuation represents the
 amount the Company would receive or pay to terminate the forward exchange
 contracts at the reporting date.                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | The
 Company adopted SFAS No. 159, The Fair Value Option for Financial Assets and
 Financial Liabilities-Including an Amendment of FASB Statement No. 115, on
 January 1, 2008. This standard permits entities to choose to measure many
 financial instruments and certain other items at fair value. This statement
 also establishes presentation and disclosure requirements designed to
 facilitate comparisons between entities that choose different measurement
 attributes for similar types of assets and liabilities. Unrealized gains and
 losses on items for which the fair value option is elected would be reported
 in earnings. The Company has not elected the fair value measurement option
 provided for under this guidance for any of its financial assets or
 liabilities as of June 30, 2009, and the Company has not determined whether
 or not it will elect this option for financial instruments it may acquire in
 the future.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(9) | Common Stock Repurchase Authorizations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | On
 October 17, 2007, the Companys Board of Directors authorized the repurchase
 of up to 500,000 shares of its common stock. In February 2008, the Companys
 Board of Directors increased the share repurchase authorization by an
 additional 500,000 shares, bringing total shares authorized for repurchase to
 1,000,000. Shares may be purchased at prevailing market prices in the open
 market or in private transactions, subject to market conditions, share price,
 trading volume and other factors. The repurchase program is funded from cash
 on hand and may be discontinued at any time. During the three and six months
 ended June 30, 2009, the Company did not repurchase any shares of its common
 stock. As of June 30, 2009, 422,917 shares were available for repurchase
 under the authorizations.                                                                                                                                

13

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Table of Contents

RIMAGE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | Recently Issued Accounting Standards                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     | In
 September 2006, the Financial Accounting Standards Board (FASB) issued
 Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value
 Measurements. SFAS No. 157 defines fair value, establishes a framework for
 measuring fair value and requires enhanced disclosures about fair value
 measurements. The Company adopted SFAS No. 157 for financial assets and
 liabilities effective January 1, 2008. In February 2008, FASB Staff Position
 (FSP) No. 157-2 was issued, which delayed the effective date of FASB No.
 157 to fiscal years beginning after November 15, 2008 for nonfinancial assets
 and liabilities, except for items that are recognized and disclosed at fair
 value in the financial statements on a recurring basis (at least annually).
 Effective January 1, 2009, the company adopted the requirements of SFAS No.
 157 that had been deferred under FSP No. 157-2. The adoption did not impact
 the Companys consolidated financial statements and related disclosures for
 the six months ended June 30, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     | In
 March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative
 Instruments and Hedging Activities--an Amendment to SFAS No. 133. SFAS No.
 161 requires additional quantitative and qualitative disclosures for
 derivative instruments. The required disclosures include information about an
 entitys objectives and strategies for using derivatives, the existence and
 nature of credit-risk-related contingent features in derivative instruments,
 counterparty credit risk, the relative volume of derivative activity, the
 fair value of derivative instruments and related amounts of gains and losses.
 The Company adopted the disclosure provisions of SFAS No. 161 effective
 January 1, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     | In
 June 2008, the FASB issued FSP No. EITF 03-6-1, Determining Whether
 Instruments Granted in Share-Based Payment Transactions Are Participating
 Securities. FSP No. EITF 03-6-1 requires all outstanding unvested
 share-based payment awards that contain nonforfeitable rights to dividends or
 dividend equivalents (whether paid or unpaid) to be considered participating
 securities and shall be included in the computation of basic and diluted
 earnings per share using the two-class method. All prior-period earnings per
 share data presented shall be adjusted retrospectively. The Company adopted
 FSP No. EITF 03-6-1 effective January 1, 2009. As discussed under Note 11,
 while applicable to the Company, the adoption did not have a material impact
 on the Companys consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     | In
 November 2007, the FASB issued EITF No. 07-1, Accounting for Collaborative
 Arrangements. This Issue applies to participants in a collaborative
 arrangement, defined as a contractual arrangement that involves a joint
 operating activity involving two (or more) parties who are both (a) active
 participants in the activity and (b) exposed to significant risks and rewards
 dependent on the commercial success of the activity. Revenues and costs
 incurred with third parties in connection with a collaborative arrangement
 should be presented gross or net by the collaborators based on the criteria
 in EITF Issue No. 99-19, Reporting Revenue Gross as a Principal versus Net
 as an Agent, and other applicable accounting literature. Payments to or from
 collaborators should be presented in the income statement based on the nature
 of the arrangement, the nature of the Companys business and whether the
 payments are within the scope of other accounting literature. This Issue is
 effective for the Company as of January 1, 2009, and should be applied to collaborative
 arrangements in existence at the date of adoption using the modified
 retrospective method that requires reclassification in all periods presented
 for those arrangements still in effect at the transition date, unless that
 application is impracticable. The adoption of EITF No. 07-1 did not have an
 impact on the Companys consolidated financial
 statements and related disclosures for six months ended June 30, 2009.

14

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Table of Contents

RIMAGE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | In
 April 2009, the FASB issued FSP No. FAS 157-4, Determining Fair Value When
 the Volume and Level of Activity for the Asset or Liability Have
 Significantly Decreased and Identifying Transactions That Are Not Orderly.FAS 157-4 provides
guidance on
 estimating fair value when market activity has decreased and on identifying
 transactions that are not orderly. Additionally, entities are required to
 disclose in interim and annual periods the inputs and valuation techniques
 used to measure fair value. The provisions of FAS 157-4 are effective for the
 Company for its quarter ended June 30, 2009. The adoption of this
 pronouncement did not have an impact on the Companys consolidated financial
 statements and related disclosures.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     | In
 May 2009, the FASB issued SFAS No. 165, Subsequent Events. The objective of
 this guidance is to establish general standards of recognition and disclosure
 of events that occur after the balance sheet date but before the issuance of
 the financial statements. Under SFAS No.165, as under previous practice, an
 entity must record the effects of subsequent events that provide evidence
 about conditions that existed at the balance sheet date and, if material,
 must disclose but not record the effects of subsequent events which provide
 evidence about conditions that did not exist at the balance sheet date.
 Additional disclosure required by this standard includes the date through
 which subsequent events have been evaluated by management and whether that is
 the date on which the financial statements were issued. SFAS No. 165 was
 effective for the Company for its quarter ended June 30, 2009. The additional
 disclosures required by this standard are included in Note 1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|(11) | Computation of Net Income Per Share of Common Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     | Basic
 net income per common share is determined by dividing net income by the basic
 weighted average number of shares of common stock outstanding. Diluted net
 income per common share includes the potentially dilutive effect of common
 shares issued in connection with outstanding stock options using the treasury
 stock method. Stock options to acquire weighted average common shares of
 722,000 and 809,000 for the three and six months ended June 30, 2009,
 respectively, and weighted average common shares 720,000 and 553,000 for the
 three and six months ended June 30, 2008, respectively, have been excluded
 from the computation of diluted weighted average shares outstanding for each
 respective period as their effect is anti-dilutive. Effective January 1,
 2009, the Company adopted FSP No. EITF 03-6-1, Determining Whether
 Instruments Granted in Share-Based Payment Transactions Are Participating
 Securities, which if applicable, requires prior-period reported earnings per
 share data to be adjusted retrospectively. In accordance with EITF 03-6-1,
 the Company increased the amount of basic weighted average shares outstanding
 previously reported for the three and six months ended June 30, 2008 by
 approximately 3,000 and 1,000 shares, respectively. These amounts pertain to
 outstanding unvested restricted stock deemed to be participating securities
 under EITF 03-6-1. The adjustment had no impact on previously reported
 earnings per share amounts. The following table identifies the components of
 net income per basic and diluted share (in thousands, except for per share
 data):

15

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Table of Contents

RIMAGE CORPORATION AND SUBSIDIARIES 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 
(unaudited)

|                                                        |  |                               |       |                             |   |       |  |      |       |  |   |       | 
|------------------------------------------------------- |  | ----------------------------- | ----- | --------------------------- | - | ----- |  | ---- | ----- |  | - | ----- | 
|                                                        |  | Three
 Months Ended
 June 30, |       | Six
 Months Ended
 June 30, |  
|                                                        |  | 2009                          |       | 2008                        |   | 2009  |  | 2008 |      
|                                                        |  |                               |       |                             |   |       |  |      |       |  |   |       | 
|Shares outstanding at end
 of period                    |  |                               | 9,375 |                             |   | 9,628 |  |      | 9,375 |  |   | 9,628 | 
|                                                        |  |                               |       |                             |   |       |  |      |       |  |   |       | 
|Basic weighted average shares
outstanding               |  |                               | 9,372 |                             |   | 9,665 |  |      | 9,358 |  |   | 9,714 | 
|                                                        |  |                               |       |                             |   |       |  |      |       |  |   |       | 
|Dilutive effect of stock options/restricted stock
units |  |                               | 145   |                             |   | 155   |  |      | 105   |  |   | 232   | 
|Total diluted weighted average shares
outstanding       |  |                               | 9,517 |                             |   | 9,820 |  |      | 9,463 |  |   | 9,946 | 
|                                                        |  |                               |       |                             |   |       |  |      |       |  |   |       | 
|Net income                                              |  | $                             | 1,973 |                             | $ | 1,927 |  | $    | 3,158 |  | $ | 3,713 | 
|                                                        |  |                               |       |                             |   |       |  |      |       |  |   |       | 
|Basic net income per common
 share                      |  | $                             | 0.21  |                             | $ | 0.20  |  | $    | 0.34  |  | $ | 0.38  | 
|                                                        |  |                               |       |                             |   |       |  |      |       |  |   |       | 
|Diluted net income per
 common share                    |  | $                             | 0.20  |                             | $ | 0.19  |  | $    | 0.33  |  | $ | 0.37  | 

|     |                                                                                                                                                                                                                                                                                           
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(12) | Contingencies                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                           
|     | The
 Company is exposed to a number of asserted and unasserted claims encountered
 in the normal course of business. In the opinion of management, the
 resolution of these matters will not have a material adverse effect on the
 Companys financial position or results of operations.

16

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Table of Contents

| |                                                                                                                                            
| | -------------------------------------------------------------------------------------------------------------------------------------------
| | Item 2.Managements
Discussion and Analysis of Financial
 Condition and Results of Operations                                              
| |                                                                                                                                            
| | The
 following table sets forth, for the periods indicated, selected items from
 the Companys condensed consolidated statements of income.

|                                    |  |                                                           |       |                                             |  |                                                         |   |                                              |       |      |  |               |   |  |       |   |  |       |  
|----------------------------------- |  | --------------------------------------------------------- | ----- | ------------------------------------------- |  | ------------------------------------------------------- | - | -------------------------------------------- | ----- | ---- |  | ------------- | - |  | ----- | - |  | ----- | -
|                                    |  | Percentage (%)
 of Revenues
 Three Months Ended
 June 30, |       | Percentage (%)
 Inc/(Dec)
 Between
 Periods |  | Percentage (%)
 of Revenues
 Six Months Ended
 June 30, |   | Percentage (% )
 Inc/(Dec)
 Between
 Periods |      
|                                    |  | 2009                                                      |       | 2008                                        |  | 2009 vs. 2008                                           |   | 2009                                         |       | 2008 |  | 2009 vs. 2008 |  
|Revenues                            |  |                                                           | 100.0 |                                             |  | 100.0                                                   |   |                                              | (12.6 | )    |  | 100.0         |   |  | 100.0 |   |  | (16.0 | )
|Cost of revenues                    |  |                                                           | (53.6 | )                                           |  | (56.3                                                   | ) |                                              | (16.8 | )    |  | (53.5         | ) |  | (56.9 | ) |  | (21.0 | )
|Gross profit                        |  |                                                           | 46.4  |                                             |  | 43.7                                                    |   |                                              | (7.3  | )    |  | 46.5          |   |  | 43.1  |   |  | (9.4  | )
|Operating expenses:                 |  |                                                           |       |                                             |  |                                                         |   |                                              |       |      |  |               |   |  |       |   |  |       |  
|Research and development            |  |                                                           | (7.6  | )                                           |  | (6.7                                                    | ) |                                              | (0.8  | )    |  | (9.1          | ) |  | (6.3  | ) |  | (21.4 | )
|Selling, general and administrative |  |                                                           | (26.0 | )                                           |  | (25.0                                                   | ) |                                              | (9.2  | )    |  | (27.5         | ) |  | (27.1 | ) |  | (14.8 | )
|Operating income                    |  |                                                           | 12.8  |                                             |  | 12.0                                                    |   |                                              | (7.0  | )    |  | 9.9           |   |  | 9.7   |   |  | (14.3 | )
|Other income, net                   |  |                                                           | 4.2   |                                             |  | 1.3                                                     |   |                                              | 186.5 |      |  | 3.5           |   |  | 3.0   |   |  | (2.6  | )
|Income before income taxes          |  |                                                           | 17.0  |                                             |  | 13.3                                                    |   |                                              | 11.5  |      |  | 13.4          |   |  | 12.7  |   |  | (11.5 | )
|Income tax expense                  |  |                                                           | (7.0  | )                                           |  | (4.8                                                    | ) |                                              | 27.5  |      |  | (5.1          | ) |  | (4.5  | ) |  | (5.4  | )
|Net income                          |  |                                                           | 10.0  |                                             |  | 8.5                                                     |   |                                              | 2.4   |      |  | 8.3           |   |  | 8.2   |   |  | (15.0 | )

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Overview                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | Rimage develops, manufactures and markets digital publishing systems
 that are used by businesses to produce recordable CD, DVD and blue laser
 discs with customized digital content on an on-demand basis. Rimage
 distributes its publishing systems from its operations in the United States,
 Germany and Japan. The Company also distributes related consumables for use
 with its systems, consisting of media kits, ribbons, ink cartridges and
 Rimage-branded blank CD-R, DVD-R and blue laser media. These systems allow
 customers to benefit from cost savings by reducing or eliminating their
 manual labor efforts in industries such as digital photography, medical
 imaging and business services. As Rimages sales within North America and
 Europe have averaged 95% of total sales over the past three years, the
 strength of the economies in these regions plays an important role in
 determining the success of Rimage.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | Rimage earns revenues through the sale of equipment, consumables and
 parts (included in Product revenues in the accompanying condensed consolidated
 statements of income), as well as maintenance contracts, repair and
 installation services (included in Service revenues in the condensed
 consolidated statements of income). Rimages recurring revenues (consumables,
 parts, maintenance contracts and service) comprised 64% and 60% of its
 consolidated revenues during the six months ended June 30, 2009 and 2008,
 respectively. Exclusive of a small amount of capital lease obligations,
 Rimage has no long-term debt and does not require significant capital investment
 for its ongoing operations as all fabrication of its products is outsourced
 to vendors.                                                                                                                                                             
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | Results of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | Revenues. Total
 revenues decreased 13% and 16% to $19.8 million and $38.2 million for the
 three and six months ended June 30, 2009, respectively, from $22.7 million
 and $45.4 million for the respective prior-year periods. The reduction in
 total revenues between periods reflects a $3.3 million and $8.4 million decline in product revenues for the three and six
 months ended June 30, 2009, respectively, partially offset by a $0.4 million
 and $1.1 million increase in service-related revenues in each respective
 period. The reduction in product revenues resulted from a $2.3 million and
 $4.4 million reduction in sales of equipment for the three and six months
 ended June 30, 2009, and a $1.0 million and $4.0 million reduction in sales
 of consumable products in each respective period.                                                                                                                        

17

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Table of Contents

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Managements Discussion and Analysis of Financial Condition and
 Results of Operations (Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | The overall decline in equipment sales in the current-year periods
 was primarily impacted by a reduced volume of sales in the Companys European
 market, followed by a lower volume of sales to the Companys U.S. channel
 partners. The reduction in equipment sales was also impacted by a shift in
 the distribution of sales to lower-end Producer products with lower average
 selling prices. The decrease in consumable product sales consisted primarily
 of declines in the volume of ribbon and ink cartridge sales of $1.1 million
 and $2.4 million for the current years second quarter and year-to-date
 periods, respectively, and also for the year-to-date period, a reduction in
 media and media kit sales of $1.5 million. The growth in service-related
 revenues was primarily impacted by increased coverage of the Companys
 installed base of systems with maintenance contracts and a higher level of
 maintenance contract revenue recognized in the current year-to-date period.                                                                                                                                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | Recurring revenues, consisting of consumables, parts, maintenance
 contracts and service, comprised 64% of total revenues for the three and six
 months ended June 30, 2009, compared to 58% and 60% in the same prior-year
 periods. Sales of Producer product line equipment comprised 31% of total revenues
 in the current years second quarter and year-to-date period, compared to 35%
 and 33% for the comparable periods in 2008. Remaining revenues in each period
 were generated by sales of Desktop product line equipment, representing 6% of
 revenues for the three and six months ended June 30, 2009, compared to 7% in
 the same prior-year periods.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | International sales decreased 31% and 21% for the three and six
 months ended June 30, 2009 compared to the same periods last year, and
 comprised 38% and 43% of total sales, compared to 47% and 45% in the same
 prior-year periods. Currency fluctuations primarily affecting the Companys
 European operation contributed significantly to the decline in international
 revenues and reduced reported consolidated revenues for the three and six
 months ended June 30, 2009 by 4% and 4.5%, respectively, relative to the same
 prior-year periods. The
 remaining decline in international sales in the current-year periods was
 primarily impacted by a reduced volume of equipment sales.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | As of and for the six months ended June 30, 2009, the Companys
 German and Japanese operations generated foreign revenues from unaffiliated
 customers of $14.6 million and operating income of $0.1 million. Net
 identifiable assets for these operations amounted to $8.5 million. These
 amounts pertain primarily to the Companys German operations. Comparable
 amounts for the Companys German and Japanese operations as of and for the
 six months ended June 30, 2008 were revenues of $18.1 million, operating income
 of $0.1 million and net identifiable assets of $11.4 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | Gross profit. Gross profit as a percentage of
 total revenues was 46% and 47% for the three and six months ended June 30,
 2009, compared to 44% and 43% for the same periods in 2008. The rise in gross
 profit as a percentage of total revenues for both current-year periods
 resulted primarily from a higher level of maintenance contract revenues,
 coupled with reduced service costs related to improvements in the
 serviceability of the Companys products and lower compensation costs
 stemming from workforce reductions in 2008 and the first quarter of 2009.Also
 contributing to the improvement in gross profit as a percentage of total
 revenue in both current-year periods was a lower volume of
 sales rebates from sales incentive programs. Partially offsetting the
 favorable impact of the above was a shift in the distribution of sales to
 lower margin products. This shift was driven by a reduced volume and
 concentration of Producer product line equipment sales, which generally carry
 higher gross margins than Desktop product line equipment or recurring
 revenues. Additionally, Producer product line equipment sales in the
 current-year periods included a higher concentration of lower-end products,
 resulting in lower average selling prices and reduced equipment margins.

18

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Table of Contents

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Managements Discussion and Analysis of Financial Condition and
 Results of Operations (Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | Future gross profit margins will continue to be affected by many
 factors, including product mix, the timing of new product introductions,
 changes in material costs, manufacturing volume, the growth rate of
 service-related revenues relative to associated service support costs and
 foreign currency exchange rate fluctuations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | Operating expenses. Research and development expenses
 totaled $1.5 million and $3.5 million for the three and six months ended June
 30, 2009, respectively, representing 8% and 9% of revenues for each
 respective period. Expenses for the same prior-year periods totaled $1.5
 million and $2.9 million, representing 7% and 6% of revenues, respectively.
 Expenses in both current-year periods reflect reduced compensation related
 costs stemming from workforce reductions offset by a higher level of
 investments in new product development. Rimage anticipates expenditures in
 research and development to continue at a similar level in the third quarter
 of 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | Selling, general and administrative expenses for the three and six
 months ended June 30, 2009 amounted to $5.1 million and $10.5 million,
 respectively, or 26% and 27% of revenues, compared to expenses in the same
 prior-year periods of $5.7 million and $12.3 million, respectively, or 25%
 and 27% of revenues. The decline in expenses in both current-year periods primarily
 reflects the impact of cost reduction measures implemented during 2008 and
 early 2009, including reduced compensation related costs stemming from
 workforce reductions and the absence of personnel recruiting costs, and
 reduced expenditures for travel and marketing and promotional programs. Also
 contributing to the decrease in expenses in the current years second quarter
 and year-to-date period was the net impact of currency fluctuations primarily
 affecting the Companys European operation, reducing expenses by $0.1 million
 and $0.3 million, respectively. The Company expects a similar level of
 selling, general and administrative expenses in the third quarter of 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | Other income, net. Other income
 for the three and six months ended June 30, 2009 includes the Companys
 recognition in the second quarter of a gain on sale of marketable securities
 of $0.3 million as a result of the sale of approximately $33 million of
 municipal securities and reinvestment in U.S. treasury securities. The
 Company recognized net interest income on cash and marketable securities of
 $0.5 million and $1.0 million for the three and six months ended June 30,
 2009, compared to $0.7 million and $1.5 million for the same prior-year
 periods. The reduction in interest income in each of the current-year periods
 was the result of a decline in average effective yields approximating two
 percentage points relative to the same prior-year periods. Partially
 offsetting the impact of the reduction in interest rates was an $8 million
 and $5 million increase in average cash equivalent and marketable securities
 balances for the three and six months ended June 30, 2009, respectively,
 compared to the same periods in the prior year. Other income for the three
 and six months ended June 30, 2009 included net gains on foreign currency
 transactions of $87,000 and $42,000, respectively, compared to net losses on
 foreign currency transactions in the same periods in the prior year of
 $410,000 and $163,000, respectively. Translation gains of $0.2 million associated
 with an intercompany loan that was deemed to be permanently invested in the
 first quarter of 2008 were recorded as transaction gains during the first
 quarter of 2008, but should have been recorded as other comprehensive income at that time. The Company recorded a pre-tax
 out-of-period adjustment during the second quarter 2008 to reduce the
 transaction gains and to increase other comprehensive income to properly
 state other comprehensive income as of June 30, 2008.

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Table of Contents

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| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Managements Discussion and Analysis of Financial Condition and
 Results of Operations (Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | Income taxes.The
 provision for income taxes represents federal, state and foreign income taxes
 on income. Income tax expense for the three and six months ended June 30,
 2009 amounted to $1.4 million and $2.0 million, respectively, or 41.3% and
 38.3% of income before taxes in each respective period. Income tax expense
 for the three and six months ended June 30, 2008 was $1.1 million and $2.1
 million, or 36.1% and 35.8% of income before taxes, respectively. The rise in
 the effective tax rate for the current-year periods primarily reflects the
 increased impact of recording no tax benefit on foreign operating losses for
 the Companys Japanese subsidiary. Also contributing to the increase in the
 effective tax rate was a reduced benefit from the manufacturers tax
 deduction. Partially offsetting the unfavorable impact of the above was the
 impact in both current-year periods of a lower tax bracket from lower
 projected pre-tax income and a benefit from the research credit, which was
 not reinstated in 2008 until the fourth quarter.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | Net income / net income per share. Resulting net income for the three and six
 months ended June 30, 2009 was $2.0 million and $3.2 million, respectively,
 or 10% and 8% of revenues for the respective periods. Comparable amounts for
 the three and six months ended June 30, 2008 were $1.9 million and $3.7
 million, respectively, or 8% of revenues for both periods. Related net income
 per diluted share amounts were $0.20 and $0.33 for the three and six months
 ended June 30, 2009, respectively, compared to $0.19 and $0.37 per diluted
 share for the respective prior-year periods.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | Liquidity and Capital Resources                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | The Company expects it will be able to maintain current operations
 and anticipated capital expenditure requirements for the foreseeable future
 through its internally generated funds and, if required, from Rimages
 existing credit agreement. This credit agreement allows for advances under an
 unsecured revolving loan up to a maximum advance of $10 million. At June 30,
 2009, no amounts were outstanding under the credit agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | At June 30, 2009, the Company had working capital of $89.8 million,
 an increase of $27.7 million from working capital reported at December 31,
 2008. The increase was primarily the result of the impact of a non-cash
 change in the classification of $17.6 million of marketable securities from
 non-current as of December 31, 2008 to current as of June 30, 2009, the sale
 of $6.8 million of non-current marketable securities and corresponding
 purchase of current marketable securities and net income of $3.2 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | On October 17, 2007, the Companys Board of Directors authorized the
 repurchase of up to 500,000 shares of its common stock. In February 2008, the
 Companys Board of Directors increased the share repurchase authorization by
 an additional 500,000 shares, bringing total shares authorized for repurchase
 to 1,000,000. Shares may be purchased at prevailing market prices in the open
 market or in private transactions, subject to market conditions, share price,
 trading volume and other factors. The repurchase program may be discontinued
 at any time. The Company will finance the purchase of the shares, if any,
 using cash on hand. During the six months ended June 30, 2009, the Company
 did not repurchase any shares of its common stock. The Company also intends
 on utilizing its assets primarily for its continued organic growth. Additionally, the Company may use
 its available cash for potential future strategic initiatives or alliances.                                                                                                        

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Table of Contents

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Managements Discussion and Analysis of Financial Condition and Results
 of Operations (Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Net cash provided by operating activities totaled $8.9 million for the
 six months ended June 30, 2009, compared to $2.1 million in the same
 prior-year period. The $6.8 million increase in cash generated from operating
 activities resulted from changes in operating assets and liabilities
 producing a $4.8 million net increase in cash for the six months ended June,
 2009, compared to a net use of cash of $1.8 million for the same period in
 2008, coupled with a $0.3 million larger increase in net income adjusted for
 non-cash and non-operating items in the current-year period. Primarily
 contributing to the change in operating assets and liabilities compared to
 the comparable prior-year period was a $3.4 million favorable change in the
 aggregate amount of trade accounts payable, accrued compensation and accrued
 expenses, a $2.2 million favorable change in deferred income and a $1.7
 million favorable change in net prepaid income taxes, partially offset by an
 unfavorable variation of $0.7 million in receivables. The change in trade
 accounts payable, accrued compensation and accrued expenses reflects a $0.1
 million aggregate increase in the amount of these balances in the
 current-year period, compared to a $3.3 million aggregate decrease in the
 same period last year. These changes were primarily due to reduced payments
 in the current-year period for inventory purchases, in the case of accounts
 payable, and reduced payments for bonus accruals, in the case of accrued
 compensation. The favorable change in deferred income resulted from a larger
 volume of maintenance contract renewals in the second quarter of 2009
 compared to the same prior-year period. The favorable change in net prepaid
 income taxes resulted from a reduced amount of income tax payments for the
 current tax year. The unfavorable change in receivables resulted from a $0.1
 million increase in receivables in the current period, compared to a $0.6
 million decrease in the comparable prior-year period, primarily impacted by a
 larger increase in sales in June 2009 relative to December 2008 (last month
 of each period), compared to the comparable prior-year periods.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Investing activities used net cash of $15.1 million for the six
 months ended June 30, 2009, compared to a net generation of cash of $16.6
 million for the same prior-year period. The fluctuations in investing
 activities were primarily the result of $15.0 million in purchases of
 marketable securities, net of related maturities, during the six months ended
 June 30, 2009, compared to $16.7 million in maturities of marketable
 securities, net of related purchases, in the same prior-year period.
 Purchases of property and equipment during the six months ended June 30, 2009
 and 2008 amounted to $0.1 million and $0.5 million, respectively. Capital
 expenditures in both periods consisted primarily of purchases of office
 equipment and manufacturing tooling.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Financing activities generated net cash of $0.3 million for the six
 months ended June 30, 2009 and used net cash of $2.8 million in the same
 prior-year period. Financing activities in each period included proceeds from
 employee stock plans of $0.3 million and $1.5 million, respectively.
 Financing activities for the six months ended June 30, 2008 also benefited
 from excess tax benefits recognized as an addition to the additional paid-in
 capital pool of $0.7 million. Offsetting the increases in cash generated by
 financing activities in the prior years period was the Companys repurchase
 of 275,310 shares of its common stock for $5.0 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Critical Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Management
 utilizes its technical knowledge, cumulative business experience, judgment
 and other factors in the selection and application of the Companys
 accounting policies. The accounting policies considered by management to be
 the most critical to the presentation of the consolidated financial statements because they require the most difficult,
 subjective and complex judgments include revenue recognition, allowance for
 doubtful accounts and sales returns, inventory provisions, deferred tax asset
 valuation allowances, accruals for uncertain tax positions, warranty
 accruals, stock- based compensation and impairment of long-lived assets.
 These accounting policies are discussed in Item 7. Managements Discussion
 and Analysis of Financial Condition and Results of Operations of the
 Companys Annual Report on Form 10-K for the year ended December 31, 2008.
 Management made no changes to the Companys critical accounting policies
 during the six months ended June 30, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

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| | Managements Discussion and Analysis of Financial Condition and
 Results of Operations (Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | In applying its critical accounting policies, management reassesses
 its estimates each reporting period based on available information. Changes
 in such estimates did not have a significant impact on earnings for the six
 months ended June 30, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | Recently Issued Accounting Standards                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | In September 2006, the Financial Accounting Standards Board (FASB)
 issued Statement of Financial Accounting Standards (SFAS) No. 157, Fair
 Value Measurements. SFAS No. 157 defines fair value, establishes a framework
 for measuring fair value and requires enhanced disclosures about fair value
 measurements. The Company adopted SFAS No. 157 for financial assets and
 liabilities effective January 1, 2008. In February 2008, FASB Staff Position
 (FSP) No. 157-2 was issued, which delayed the effective date of FASB No.
 157 to fiscal years beginning after November 15, 2008 for nonfinancial assets
 and liabilities, except for items that are recognized and disclosed at fair
 value in the financial statements on a recurring basis (at least annually).
 Effective January 1, 2009, the company adopted the requirements of SFAS No.
 157 that had been deferred under FSP No. 157-2. The adoption did not impact
 the Companys consolidated financial statements and related disclosures for
 the six months ended June 30, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | In March 2008, the FASB issued SFAS No. 161, Disclosures about
 Derivative Instruments and Hedging Activities--an Amendment to SFAS No. 133.
 SFAS No. 161 requires additional quantitative and qualitative disclosures for
 derivative instruments. The required disclosures include information about an
 entitys objectives and strategies for using derivatives, the existence and
 nature of credit-risk-related contingent features in derivative instruments,
 counterparty credit risk, the relative volume of derivative activity, the
 fair value of derivative instruments and related amounts of gains and losses.
 The Company adopted the disclosure provisions of SFAS No. 161 effective
 January 1, 2009.In June 2008, the FASB issued FSP No. EITF 03-6-1,
 Determining Whether Instruments Granted in Share-Based Payment Transactions
 Are Participating Securities. FSP No. EITF 03-6-1 requires all outstanding
 unvested share-based payment awards that contain nonforfeitable rights to
 dividends or dividend equivalents (whether paid or unpaid) to be considered
 participating securities and shall be included in the computation of basic
 and diluted earnings per share using the two-class method. All prior-period
 earnings per share data presented shall be adjusted retrospectively. The
 Company adopted FSP No. EITF 03-6-1 effective January 1, 2009. As discussed
 under Note 11, while applicable to the Company, the adoption did not have a
 material impact on the Companys consolidated financial statements.
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Table of Contents

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| | Managements Discussion and Analysis of Financial Condition and
 Results of Operations (Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | In November 2007, the FASB issued EITF No. 07-1, Accounting for
 Collaborative Arrangements. This Issue applies to participants in a
 collaborative arrangement, defined as a contractual arrangement that involves a joint operating activity involving two (or more)
 parties who are both (a) active participants in the activity and (b) exposed
 to significant risks and rewards dependent on the commercial success of the
 activity. Revenues and costs incurred with third parties in connection with a
 collaborative arrangement should be presented gross or net by the
 collaborators based on the criteria in EITF Issue No. 99-19, Reporting
 Revenue Gross as a Principal versus Net as an Agent, and other applicable
 accounting literature. Payments to or from collaborators should be presented
 in the income statement based on the nature of the arrangement, the nature of
 the Companys business and whether the payments are within the scope of other
 accounting literature. This Issue is effective for the Company as of January
 1, 2009, and should be applied to collaborative arrangements in existence at
 the date of adoption using the modified retrospective method that requires
 reclassification in all periods presented for those arrangements still in
 effect at the transition date, unless that application is impracticable. The
 adoption of EITF No. 07-1 did not have an impact on the Companys consolidated
 financial statements and related disclosures for six months ended June 30,
 2009.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | In April 2009, the FASB issued FSP No. FAS 157-4, Determining Fair
 Value When the Volume and Level of Activity for the Asset or Liability Have
 Significantly Decreased and Identifying Transactions That Are Not Orderly.FAS 157-4 provides guidance on
 estimating fair value when market activity has decreased and on identifying
 transactions that are not orderly. Additionally, entities are required to
 disclose in interim and annual periods the inputs and valuation techniques
 used to measure fair value. The provisions of FAS 157-4 are effective for the
 Company for its quarter ended June 30, 2009. The adoption of this
 pronouncement did not have an impact on the Companys consolidated financial
 statements and related disclosures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | In May 2009, the FASB issued SFAS No. 165, Subsequent Events. The
 objective of this guidance is to establish general standards of recognition
 and disclosure of events that occur after the balance sheet date but before
 the issuance of the financial statements. Under SFAS No.165, as under
 previous practice, an entity must record the effects of subsequent events
 that provide evidence about conditions that existed at the balance sheet date
 and, if material, must disclose but not record the effects of subsequent
 events which provide evidence about conditions that did not exist at the
 balance sheet date. Additional disclosure required by this standard includes
 the date through which subsequent events have been evaluated by management
 and whether that is the date on which the financial statements were issued.
 SFAS No. 165 was effective for the Company for its quarter ended June 30,
 2009. The additional disclosures required by this standard are included in
 Note 1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
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| | Cautionary Note Regarding Forward-Looking Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | This report contains forward-looking statements that involve risks
 and uncertainties. For this purpose, any statements contained in this report
 that are not statements of historical fact may deemed to be forward-looking
 statements. Without limiting the foregoing, words such as may, will,
 expect, believe, anticipate, estimate or continue or comparable
 terminology are intended to identify forward-looking statements. These
 statements by their nature involve substantial risks and uncertainties. The
 Companys actual results could differ significantly from those discussed in
 the forward-looking statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Managements Discussion and Analysis of Financial Condition and
 Results of Operations (Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | Factors that could cause or contribute to such differences include,
 but are not limited to, the following, as well as other factors not now
 identified: the economic health of the markets from which Rimage derives its
 sales and, in particular, the strength of the economies within North America
 and Europe where the Company has averaged 95% of total sales over the past
 three years; the Companys ability to keep pace with changes in technology in the computer and storage
 media industries as well as technology changes in the retail, medical and
 business services markets; increasing competition and the ability of the
 Companys products to successfully compete with products of competitors and
 newly developed media storage products; the ability of the Companys newly
 developed products to gain acceptance and compete against products in their
 markets; the significance of the Companys international operations and the
 risks associated with international operations including currency
 fluctuations, local economic health and management of these operations over
 long distances; the Companys ability to protect its intellectual property
 and to defend claims of others relating to its intellectual property; the
 Companys dependence upon the selling efforts of the Companys key channel
 partners; the Companys ability to maintain adequate inventory of products;
 the Companys reliance on single source suppliers; the ability of the
 Companys products to operate effectively with the computer products
 developed and to be developed by other manufacturers; the negative effect
 upon the Companys business from manufacturing or design defects; the effect
 of U.S. and international regulation; fluctuations in the Companys operating
 results; the Companys dependence upon its key personnel; the volatility of
 the price of the Companys common stock; provisions governing the Company
 relating to a change of control, compliance with corporate governance and
 securities disclosures rules and other risks, including those set forth in
 the Companys reports filed with the Securities and Exchange Commission,
 including Item 1A of Part I of the Companys Annual Report on Form 10-K for
 the year ended December 31, 2008. These forward-looking statements are made
 as of the date of this report and the Company assumes no obligation to update
 such forward-looking statements, or to update the reasons why actual results
 could differ materially from those anticipated in such forward-looking
 statements.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | Item 3. Quantitative and Qualitative Disclosures
 about Market Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | The Company is exposed to market risk from foreign exchange rate
 fluctuations of the European Euro and Japanese Yen to the U.S. dollar as the
 financial position and operating results of the Companys German and Japanese
 subsidiaries, Rimage Europe GmbH and Rimage Japan Co., Ltd., respectively,
 are translated into U.S. dollars for consolidation. Resulting translation
 adjustments are recorded as a separate component of stockholders equity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | The Company enters into forward exchange contracts principally to
 hedge intercompany receivables denominated in Euros arising from sales to its
 subsidiary in Germany. Gains or losses on forward exchange contracts are
 calculated at each period end and are recognized in net income in the period
 in which they arose. The Company records the fair value of its open forward
 foreign exchange contracts in other current assets or other current
 liabilities depending on whether the net amount is a gain or a loss. The
 Company does not utilize financial instruments for trading or other
 speculative purposes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

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Table of Contents

| |                                                                                                                                                                                                                                                                                                                                                           
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Item 4. Controls and Procedures                                                                                                                                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                           
| | (a)
 Evaluation of Disclosure Controls and Procedures                                                                                                                                                                                                                                                                                                     
| |                                                                                                                                                                                                                                                                                                                                                           
| | The Companys Chief Executive Officer, Bernard P. Aldrich, and the
 Companys Chief Financial Officer, Robert M. Wolf, have evaluated the
 Companys disclosure controls and procedures as of the end of the period
 covered by this report. Based upon such evaluation, they have concluded that
 these disclosure controls and procedures are effective.
| |                                                                                                                                                                                                                                                                                                                                                           
| | (b) Changes in Internal Control Over Financial Reporting                                                                                                                                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                                                                                                                           
| | There have been no changes in internal controls over financial
 reporting that occurred during the fiscal quarter covered by this report that
 have materially affected, or are reasonably likely to materially affect, the
 Companys internal control over financial reporting.                                                                         

PART II  OTHER INFORMATION

| |                  |                                                            
| | ---------------- | -----------------------------------------------------------
| | Item 1.          | Legal Proceedings                                          
| |                  |                                                            
| | Not
 Applicable. |                                                            
| |                  |                                                            
| | Item 1A.         | Risk Factors                                               
| |                  |                                                            
| | Not
 Applicable. |                                                            
| |                  |                                                            
| | Item 2.          | Unregistered Sales of Equity Securities and Use of Proceeds
| |                  |                                                            
| | Not
 applicable. |                                                            
| |                  |                                                            
| | Item 3.          | Defaults Upon Senior Securities                            
| |                  |                                                            
| | Not
 Applicable. |                                                            
| |                  |                                                            
| | Item 4.          | Submission of Matters to a Vote of Security Holders        

The Companys
Annual Meeting of Shareholders was held on May 13, 2009. Of the 9,353,435
shares outstanding and entitled to vote at the meeting, 8,964,593 shares were
present either in person or by proxy. The following describes the matters
considered by the Companys shareholders at the Annual Meeting, as well as the
results of the votes cast at the meeting:

| |    |                                                                                                                                                                         
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | A. | To elect six (6) directors of the Company to serve until the next
 Annual Meeting of Shareholders or until their respective successors have been
 elected and qualified.

| |                         |           |          |  |          |  | 
| | ----------------------- | --------- | -------- |  | -------- |  | 
| | Nominee                 |           | In Favor |  | Withheld | 
|
| | Bernard P.
 Aldrich     | 8,871,345 | 93,248   |  |         
| | Lawrence M.
 Benveniste | 8,697,390 | 267,203  |  |         
| | Philip D.
 Hotchkiss    | 8,697,981 | 266,612  |  |         
| | Thomas F.
 Madison      | 8,818,574 | 146,019  |  |         
| | Steven M.
 Quist        | 8,698,105 | 266,488  |  |         
| | James L.
 Reissner      | 8,571,169 | 393,424  |  |         

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Table of Contents

| |    |                                                                                 
| | -- | --------------------------------------------------------------------------------
| | B. | To adopt the
 Rimage Corporation Amended and Restated 2007 Stock Incentive Plan.

| |           |  |           |         |  |        |         |  |           |                 | 
| | --------- |  | --------- | ------- |  | ------ | ------- |  | --------- | --------------- | 
| | FOR       |  |           | AGAINST |  |        | ABSTAIN |  |           | BROKER NON-VOTE | 
| | 4,959,009 |  | 2,076,228 |         |  | 10,989 |         |  | 1,918,367 |                

| |    |                                                                                                                                                                       
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | C. | To ratify
 and approve the appointment of KPMG LLP as the independent registered public
 accounting firm for the Company for the fiscal year ending December 31, 2009.

| |           |  |         |         |  |       |         |  |   |                 | 
| | --------- |  | ------- | ------- |  | ----- | ------- |  | - | --------------- | 
| | FOR       |  |         | AGAINST |  |       | ABSTAIN |  |   | BROKER NON-VOTE | 
| | 8,630,113 |  | 328,125 |         |  | 6,355 |         |  | 0 |                

| |                                                           |                  
| | --------------------------------------------------------- | -----------------
| | Item 5.                                                   | Other Information
| |                                                           |                  
| | Not
 Applicable.                                          |                  
| |                                                           |                  
| | Item 6.                                                   | Exhibits         
| |                                                           |                  
| | (a)          The
 following exhibits are included herein:

| |      |                                                                                                                                                             
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10.1 | Stock Option
 Agreement, dated April 1, 2009, by and between Sherman L. Black and Rimage
 Corporation.                                                      
| | 10.2 | Fourth
 Amendment to Credit Agreement, dated July 1, 2009, by and between the Company
 and Wells Fargo Bank, National Association.                          
| | 10.3 | Revolving
 Line of Credit Note, dated July 1, 2009, in the principal amount of $10,000,000
 issued to the Company by Wells Fargo Bank, National Association.
| | 31.1 | Certificate of Chief Executive Officer pursuant to Rules 13a-14 and 15d-14 of
 the Exchange Act.                                                            
| | 31.2 | Certificate
 of Chief Financial Officer pursuant to Rules 13a-14 and 15d-14 of the
 Exchange Act.                                                           
| | 32   | Certifications
 pursuant to 18 U.S.C. §1350.                                                                                                                

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SIGNATURES

In accordance
with the Exchange Act, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereto duly authorized.

| |  |                    | 
| |  | ------------------ | 
| |  | RIMAGE CORPORATION | 
| |  | Registrant         | 

|      |                 |  |     |                               
|----- | --------------- |  | --- | ------------------------------
|Date: | August 7,
 2009 |  | By: | /s/ Bernard P. Aldrich        
|      |                 |  |     | Bernard P. Aldrich            
|      |                 |  |     | Chief Executive Officer       
|      |                 |  |     | (Principal Executive Officer) 
|      |                 |  |     |                               
|Date: | August 7,
 2009 |  | By: | /s/ Robert M. Wolf            
|      |                 |  |     | Robert M. Wolf                
|      |                 |  |     | Chief Financial Officer       
|      |                 |  |     | (Principal Financial Officer) 
|      |                 |  |     | (Principal Accounting Officer)

27

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