PRODUCT BACKLOG AND CURRENT CONTRACTS
The Company's contract backlog consists of the aggregate anticipated revenues remaining to be earned at a given time from the uncompleted portions of its existing contracts. It does not include revenues that may be earned if customers exercise options to make additional purchases. At December 31, 1998, the Company's contract backlog was $7,491,000, as compared to $9,610,000 at December 31, 1997. The Company expects $5,303,000 of the December 31, 1998
backlog to be completed in 1999, as compared to $8,210,000, of the December 31, 1997 backlog which the Company then expected to complete in 1998. The amount of contract backlog is not necessarily indicative of future contract revenues because short-term contracts, modifications to or terminations of present contracts and production delays can provide additional revenues or reduce anticipated revenues. The Company's backlog is typically subject to large variations from time to time when new contracts are awarded. Consequently, it is difficult to make meaningful comparisons of backlog.
-JH
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