<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X Quarterly Report pursuant to Section 13 or 15(d) of the Securities
- - --- Exchange Act of 1934 for the quarterly period ended March 31, 1996.
or
- - --- 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 0-27056
Healthdyne Information Enterprises, Inc.
----------------------------------------
(Exact name of registrant as specified in its charter)
Georgia 58-2112366
- - --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1850 Parkway Place, Suite 1100, Marietta, Georgia 30067
- - --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(770) 423-8450
- - --------------------------------------------------------------------------------
(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.
YES X NO
--- ---
The number of shares outstanding of the issuer's only class of Common Stock,
$.01 par value, as of April 30, 1996 was 16,923,813.
1
<PAGE> 2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Healthdyne Information Enterprises, Inc. and Subsidiaries
Consolidated Condensed Balance Sheets
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
3/31/96 12/31/95
------- --------
(Unaudited)
<S> <C> <C>
Cash and cash equivalents $ 2,568 $4,013
Trade accounts receivable, less an allowance of $85
at March 31, 1996 and December 31, 1995 3,995 2,966
Other current assets, net 713 1,020
- - -----------------------------------------------------------------------------------------------
Total current assets 7,276 7,999
Purchased and capitalized software, net of accumulated
amortization of $310 and $150 at March 31, 1996
and December 31, 1995, respectively 3,140 2,494
Property and equipment, net of accumulated depreciation
of $430 and $354 at March 31, 1996 and
December 31, 1995, respectively 1,124 1,136
Excess of cost over net assets of businesses acquired, less
accumulated amortization of $933 and $758 at
March 31, 1996 and December 31, 1995, respectively 9,454 9,614
Other assets 448 491
- - -----------------------------------------------------------------------------------------------
Total assets $21,442 $21,734
- - -----------------------------------------------------------------------------------------------
Current installments of long-term debt and obligations under
capital leases $ 1,899 $ 2,652
Accounts payable, principally trade 857 547
Accrued liabilities 573 760
Deferred service revenue 1,589 1,297
- - -----------------------------------------------------------------------------------------------
Total current liabilities 4,918 5,256
Long-term debt and obligations under capital leases,
excluding current installments 5,145 5,382
Other long-term obligations 167 167
- - -----------------------------------------------------------------------------------------------
Total liabilities 10,230 10,805
- - -----------------------------------------------------------------------------------------------
Shareholders' equity:
Preferred stock, without par value. Authorized 20,000
shares; issued none
Common stock, $.01 par value. Authorized 50,000 shares;
issued and outstanding 16,885 and 16,503 shares
at March 31, 1996 and December 31, 1995,
respectively 169 165
Additional paid-in capital 22,181 22,012
Accumulated deficit (11,138) (11,248)
- - -----------------------------------------------------------------------------------------------
Total shareholders' equity 11,212 10,929
- - -----------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $21,442 $21,734
- - -----------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated condensed financial statements.
2
<PAGE> 3
Healthdyne Information Enterprises, Inc. and Subsidiaries
Consolidated Condensed Statements of Operations
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------------------
1996 1995
-------------------------------
(Unaudited)
<S> <C> <C>
Revenue:
Software and other $1,718 $1,018
Services 1,812 851
- - ------------------------------------------------------------------------------
Total revenue 3,530 1,869
- - ------------------------------------------------------------------------------
Cost of revenue:
Software and other 236 108
Services 1,007 292
- - ------------------------------------------------------------------------------
Total cost of revenue 1,243 400
- - ------------------------------------------------------------------------------
Gross profit 2,287 1,469
- - ------------------------------------------------------------------------------
Operating expenses:
Sales and marketing 813 577
Research and development 323 392
General and administrative 928 874
- - ------------------------------------------------------------------------------
Total operating expenses 2,064 1, 843
- - ------------------------------------------------------------------------------
Operating income (loss) 223 (374)
Losses of affiliate -- (213)
Minority interest in net income of subsidiary -- (59)
Interest income (expense), net (113) (91)
- - ------------------------------------------------------------------------------
Income (loss) before income taxes 110 (737)
Provision for income taxes -- 70
- - ------------------------------------------------------------------------------
Net income (loss) $ 110 $ (807)
- - ------------------------------------------------------------------------------
Earnings (loss) per share:
Primary $ 0.01 $(0.05)
Fully diluted $ 0.01 $(0.05)
- - ------------------------------------------------------------------------------
Weighted average shares outstanding:
Primary 18,117 15,500
Fully diluted 18,380 15,500
- - ------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated condensed financial statements.
3
<PAGE> 4
Healthdyne Information Enterprises, Inc. and Subsidiaries
Consolidated Condensed Statements of Cash Flows
(in thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------------------------
1996 1995
-------- ---------
(Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 110 $ (807)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Losses of affiliate -- 213
Minority interest in net income of subsidiary -- 59
Depreciation and amortization 363 189
Increase in trade accounts receivable (1,028) (322)
(Increase) decrease in other current assets 349 (150)
Increase (decrease) in current liabilities other than
current installments of long-term debt and
capital lease obligations 415 (173)
- - ----------------------------------------------------------------------------------------------------
Net cash provided by (used in) operating activities 209 (991)
- - ----------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Capital expenditures (64) (343)
Purchased and capitalized software (773) (7)
Increase in other noncurrent assets, net -- (225)
- - ----------------------------------------------------------------------------------------------------
Net cash used in investing activities (837) (575)
- - ----------------------------------------------------------------------------------------------------
Cash flows before financing activities (628) (1,566)
- - ----------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Principal payments on long-term debt (990) (22)
Proceeds from capital contributions -- 1,240
Proceeds from the issuance of common stock 173 --
- - ----------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities (817) 1,218
- - ----------------------------------------------------------------------------------------------------
Decrease in cash (1,445) (348)
Cash at the beginning of the period 4,013 2,532
- - ----------------------------------------------------------------------------------------------------
Cash at the end of the period $2,568 $2,184
- - ----------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated condensed financial statements.
4
<PAGE> 5
Healthdyne Information Enterprises, Inc. and Subsidiaries
Notes to Consolidated Condensed Financial Statements
(amounts in thousands)
1. General:
The consolidated condensed financial statements as of March 31, 1996 and 1995
are unaudited. In the opinion of management, all adjustments, consisting of
normal recurring accruals, necessary for the fair presentation of the
consolidated financial position and results of operations and cash flows for
the periods presented have been included. Results for the interim periods are
not necessarily indicative of results that may be expected for the full year.
These consolidated condensed financial statements should be read in conjunction
with the consolidated financial statements and notes included in the Annual
Report on Form 10-K of Healthdyne Information Enterprises, Inc. ("HIE" or the
"Company") for the year ended December 31, 1995.
2. Earnings (Loss) Per Share of Common Stock:
Earnings per share of common stock for the three month period ended March 31,
1996 are based on the weighted average shares of common stock outstanding and
dilutive outstanding stock options computed using the treasury stock method for
primary and fully diluted calculation purposes. Loss per share for both
primary and fully diluted calculation purposes is based on the weighted average
shares of common stock outstanding without regard to the antidilutive effect of
outstanding stock options.
3. Subsequent Event:
On April 24, 1996, HIE and a majority-owned subsidiary, DataView Imaging
International, Inc. ("DataView"), entered into an agreement in principle (the
"Agreement in Principle") providing for a restructuring of the relationship
between the parties effective as of April 1, 1996. The Agreement in Principle
provides, among other things, for (i) a modification of the existing funding
agreement between the parties to limit the Company's lending commitment to
DataView to a maximum of $2,045 (the balance due under the such funding
agreement as of March 31, 1996); (ii) the repayment by DataView of certain
advances totaling at least $97 made by HIE subsequent to December 31, 1995;
(iii) a reduction in HIE's equity interest in DataView from the current 61.5%
to 19.5% through a stock repurchase by DataView financed by HIE; (iv) certain
rights for HIE to use DataView's clinical image management technology in HIE's
service business, as well as non-exclusive product distribution rights; and (v)
a reduction in HIE's representation on the DataView Board and a termination of
HIE's executive management responsibilities with respect to DataView. The
Agreement in Principle is subject to the completion and execution of definitive
agreements. There can be no assurance that the relationship between the
Company and DataView will be restructured in accordance with the Agreement in
Principle or otherwise.
5
<PAGE> 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Healthdyne Information Enterprises, Inc. and Subsidiaries
Management's Discussion and Analysis of
Financial Condition and Results of Operations
(Amounts in thousands)
Overview
Healthdyne Information Enterprises, Inc. ("HIE" or the "Company") was
incorporated on June 15, 1994 and was a wholly-owned subsidiary of Healthdyne,
Inc. ("Healthdyne") until November 6, 1995 at which time Healthdyne distributed
all of the outstanding shares of HIE to the Healthdyne shareholders (the
"Spin-off"). HIE's common stock is publicly traded on the OTC Bulletin Board
under the HDIE trading symbol.
HIE, together with its subsidiaries and affiliates, (hereafter referred to as
the "Company") provides clinical information system tools, products and
services to emerging integrated healthcare delivery network ("IDN")
constituents. Through its subsidiaries and affiliates, referred to by the
Company as entrepreneurial business units ("EBU's"), HIE's goal is to develop
and market tools and products and provide related services that index, store,
retrieve, integrate, deploy and analyze clinical data in order to produce
clinical information that will enable healthcare providers in an IDN to
continuously improve the managed patient care process. Clinical information
includes patient encounter data, physician profiles, physician treatment
protocols, physician practice standards, physician practice guidelines and
clinical outcomes. HIE's customers are generally the constituents of an IDN
who have taken a leadership role in the formation or maintenance of a
healthcare delivery network or who have a vested interest in the successful
operation of the network. The constituents include physicians, physician
groups, independent (physician) practice associations, hospitals,
physician-hospital organizations, health maintenance organizations, clinics,
labs, imaging centers, home healthcare and other alternate site healthcare
providers, management service organizations, employers, payers and others.
HIE commenced operations in mid-1994 through the internal development of,
acquisition of or investment in EBU's. Each EBU is a stand-alone business
specializing in one or more parts of HIE's comprehensive clinical information
solution as outlined below. Each EBU provides its tools, products and services
either independently of or collaboratively with the other EBU's depending on
the particular customer's need. The consolidated condensed financial
statements of HIE and subsidiaries include the results of operations and
financial position of the following EBU's as appropriately determined in
accordance with generally accepted accounting principles by the amount and
timing of HIE's investment in each EBU:
6
<PAGE> 7
<TABLE>
<CAPTION>
HIE Description of
EBU Investment EBU's Business
----------------------- ------------------- -------------------------------
<S> <C> <C>
Healthcare 44% from 10/27/94 Systems and network integration
Communications, Inc. to 12/31/94 and 57% tools and services
("HCI") of Dallas, TX thereafter until
12/31/95 when 100%
DataView Imaging 61.5% from 7/22/94 Image management products,
International, Inc. with options to tools and services
(DataView) of Norcross, increase ownership
GA (SEE NOTE 3) interest to 100%
Integrated Healthcare 100% from inception Tools, products and services for
Solutions, Inc. ("IHS", object and workflow management;
formerly Clinical patient indexing; clinical
Assessment Support assessment, measurement and
System, Inc.) of Marietta, and analysis; and network design
GA and management
Criterion Health Less than 1% from Tools, products and services for
Strategies, Inc. ("CHS") 10/24/94 with the measurement and analysis of
of Nashville, TN (a options to increase IDN-wide clinical, financial and
development stage ownership interest operational data
enterprise) to 50%
</TABLE>
Results of Operations
The following table indicates the relative significance of the EBU's and the
HIE Corporate function to the Company as percents of revenue and total assets:
<TABLE>
<CAPTION>
Revenue for Quarter Ended Total Assets as of
------------------------- --------------------------
3/31/96 3/31/95 3/31/96 12/31/95
------- ------- ------- --------
<S> <C> <C> <C> <C>
HCI............... 55% 86% 65% 70%
IHS............... 41% 3% 23% 12%
DataView.......... 4% 11% 2% 3%
CHS............... N/A(1) N/A(1) N/A(1) N/A (1)
HIE Corporate..... -- -- 10%(2) 15%(2)
---- ---- ----- ----
Total........ 100% 100% 100% 100%
---- ---- ----- ----
</TABLE>
(1) CHS is a development stage enterprise, which was funded
solely by HIE through 11/95 under an original $4,000 funding
commitment by HIE to CHS. Starting in 12/95, Massey Burch Capital
Corp. of Nashville, TN began sharing the Company's funding
commitment to CHS by acquiring one-half of HIE's rights and
obligations under HIE's commitment, thereby eliminating HIE's
requirement to record CHS' operating losses, if any, during 1996.
HIE reported losses from CHS of $(213) and $(1,144) for the first
quarter of 1995 and the entire year 1995, respectively. CHS'
results of operations during 1995 are separately reported in HIE's
consolidated condensed statements of operations under the caption
"Losses of affiliate". The HIE advances to
7
<PAGE> 8
CHS, net of such operating losses, are reflected as a HIE Corporate
asset in the above table.
(2) HIE Corporate's total assets consist of cash (7% and 13% of
total assets as of 3/31/96 and 12/31/95, respectively), loans to two
potential strategic alliances, the cost of an option to acquire 100%
ownership of DataView, which was fully reserved at the end of 1995,
and advances to CHS, net of CHS' operating losses.
Total revenue increased $1,661 or 89% to $3,530 for the first quarter of 1996
compared to the first quarter of 1995. During the first quarter of 1995, 86%
of the Company's revenue was attributable to software license fees for the
integration engine software tool and related services. Subsequent to the first
quarter of 1995, the Company has completed development of or acquired and begun
marketing additional software tools, such as the Clinical Assessment and
Support System ("CASS") and the Community Person Index ("CPI"); acquired
distribution rights to other software tools, such as document imaging, Computer
Output to Laser Disc ("COLD") and workflow; and expanded the system design and
integration services capability of IHS by adding 35 healthcare technology
specialists to that organization. While revenue from integration engine
license fees and related services increased between the first quarter last year
and this year, the general availability of these new software tools and the
growth of IHS to meet the demand by IDN's for clinical information solutions
are primarily responsible for the Company's increased revenue.
The revenue mix shifted from 54% software and other and 46% service for the
first quarter of 1995 to 49% and 51%, respectively, for the first quarter of
1996. The main reason for the shift was the increase in system design and
integration services provided by IHS. While software and other revenue, which
has relatively high gross profit margins, increased $700 or 69%, service
revenue, which normally has lower gross profit margins than software, increased
$961 or 113%. Consequently, the Company's overall gross profit increased by
$818 or 56%, but gross profit as a percent of revenue decreased from 79% for
the first quarter of 1995 to 65% for the first quarter of 1996.
Sales and marketing expense increased $236 or 41% from the first quarter of
1995 to the first quarter of 1996 due primarily to increased sales personnel
costs, commissions and travel expenses associated with increased sales staffing
and the 89% increase in revenue. Sales and marketing expense as a percent of
revenue decreased from 31% for the first quarter of 1995 to 23% for the first
quarter of 1996 reflecting the increased productivity of the Company's internal
sales force and its distributors.
Research and development expense decreased $69 or 18% from the first quarter of
1995 to the first quarter of 1996 due primarily to the capitalization of
internally developed software costs totaling $214. No such costs qualified for
capitalization under generally accepted accounting principles in the first
quarter of 1995.
General and administrative expense increased $54 or 6% from the first quarter
of 1995 to the first quarter of 1996 due primarily to the net effect of (1) a
$76 increase in
8
<PAGE> 9
goodwill amortization related primarily to the step acquisition
of HCI during 1995; (2) identifiable expenses of being a new public company
totaling approximately $100; (3) increased IHS administrative staffing costs
totaling approximately $50 to support IHS' current and projected growth; (4)
decreased staffing, outside service expense and other administrative costs at
HCI totaling approximately $100 resulting from cost control measures initiated
during the fourth quarter of 1995 and the first quarter of 1996; and (5) a $72
reduction in DataView's expenses associated with reorganizations and staff
reductions subsequent to the first quarter of 1995.
As previously mentioned, the losses of affiliate, which totaled $(213) in the
first quarter of 1995 were eliminated for 1996 when Massey Burch Capital Corp.
began sharing the Company's funding commitment to CHS during December, 1995.
The minority interest in net income of subsidiary totaling $(59) in the first
quarter of 1995 related to HCI and such minority interest is no longer
applicable as a result of HIE's increased ownership interest in HCI to 100%
effective December 31, 1995.
The increase of $(22) in net interest expense relates primarily to (1)
increased interest expense associated with financing the increased HCI
ownership referred to above; (2) increased interest expense related to
additional HCI debt incurred to finance a prepaid exclusive reseller's license
for screen scraping technology during the second quarter of 1995; and (3)
reduced HCI interest expense under a financing agreement renegotiated at a
lower interest rate effective January 1, 1996.
The Company has no provision for income taxes in the first quarter of 1996 due
to the utilization of available net operating loss carryforward benefits.
Liquidity and Capital Resources
The Company has working capital of $2,358 at March 31, 1996 compared to $2,743
at December 31, 1995. Cash decreased $1,445 during the first quarter of 1996
compared to a $348 decrease during the first quarter of 1995 for the reasons
discussed below.
Net cash provided by operating activities totaled $209 for the first quarter of
1996 compared to net cash used in operating activities of $(991) for the first
quarter of 1995. The $1,200 total variance between the two periods reflects
various changes in the components of working capital, most notably increases in
trade accounts receivable due to increased revenue and higher days revenue in
receivables, and increased cash flow from the net income recorded in the first
quarter of 1996 compared to the net loss in the first quarter of 1995.
Net cash used in investing activities was $(837) for the first quarter of 1996
compared to $(575) for the first quarter of 1995. The decrease in capital
expenditures reflects the Company's current preference for leasing, versus
purchasing, computer equipment. As previously discussed, the Company
capitalized $(214) of internally developed software costs during the first
quarter of 1996. In addition, during the first quarter of 1996, the Company
made progress payments for the third-party development of the CPI software tool
and purchased prepaid licenses for document imaging, COLD and workflow software
tools. The increase in other net noncurrent assets relates primarily to the
first
9
<PAGE> 10
quarter of 1995 funding of CHS, which is no longer a requirement during 1996 as
previously discussed.
Net cash used in financing activities was $(817) during the first quarter of
1996 compared to net cash provided by financing activities of $1,218 during the
first quarter of 1995. Prior to the Spin-off, Healthdyne funded HIE's
operations and investments as reflected in the $1,240 capital contribution
during the first quarter of 1995. The long-term debt payments shown in the
first quarter of 1996 primarily relate to installment payments under the $1,100
note payable associated with the HCI step-acquisition effective December 31,
1995. Said note was paid in full subsequent to the end of the first quarter.
The Company has $1,899 of debt financing maturing over the next twelve months,
of which $1,069 could be satisfied with HCI's products and/or services at the
lender's option. Based on its current business plan, the Company believes that
current available cash and anticipated cash flow from operating activities will
be sufficient to meet the Company's capital requirements, including the payment
of all maturing debt in cash and its remaining funding commitments to EBU's,
for at least the next twelve months. Thereafter, the Company may find it
necessary to obtain additional equity and/or debt financing to fund future
internal business growth and/or strategic acquisitions. A public offering of
the stock of the Company or an EBU is a potential future source of long-term
financing, depending on the Company's or EBU's actual and planned performance
and the conditions in the equity markets at the time. However, there can be no
assurance that such a public stock offering could be consummated. In the
interim, the Company is currently pursuing, but has no commitment to receive, a
$2,000 line of credit from a bank or a financial institution for unanticipated
working capital needs.
Except for the historical information contained herein, this report contains
forward-looking statements that involve risks and uncertainties. The Company's
actual results could differ materially from those discussed here. Factors that
could cause or contribute to such differences include, but are not limited to,
the Company's limited operating history and lack of profitability in prior
periods, limitations and potential costs inherent in the EBU operational
structure, market acceptance of new products and services offered by the
Company, limited capital resources, and competitive factors, such as new
technologies and pricing pressures. Some of these factors are discussed in
greater detail in the Company's Annual Report on Form 10-K for the year ended
December 31, 1995, and in its prospectus dated October 31, 1995.
10
<PAGE> 11
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
11 - Statements of Computation of Per Share Earnings (Loss)
27 - Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K
During the quarter ended March 31, 1996, the Company filed the
following report (and related amendment) on Form 8-K:
(i) a Form 8-K dated February 12, 1996 and filed February
13, 1996 (as amended by Form 8-K/A, Amendment No. 1 dated April
10, 1996), reporting under Items 2 and 7 that on January 31,
1996, the Company increased its ownership interest effective
December 31, 1995 from 57% to 100% of the outstanding common
stock of Healthcare Communications, Inc. ("HCI") for $6.2
million payable under two separate promissory notes due in the
amounts of $1.1 million on June 30, 1996 and $5.1 million on
January 2, 1998. In a related transaction, the selling HCI
shareholders and HCI dismissed their lawsuit against the
Company and Healthdyne, Inc. ("Healthdyne") related to
Healthdyne's spin-off of the Company on November 6, 1995.
11
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Healthdyne Information Enterprises, Inc.
May 10, 1996 By: /s/ Joseph G. Bleser
------------------------------------------------
Joseph G. Bleser
Vice President-Finance,
Chief Financial Officer, Treasurer and Secretary
(duly authorized and principal
financial officer.)
12
<PAGE> 1
EXHIBIT 11
Healthdyne Information Enterprises, Inc. and Subsidiaries
Statements of Computation of Per Share Earnings (Loss)
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended March 31,
------------------------------
1996 1995
---- ----
(Unaudited)
<S> <C> <C>
Net income (loss) $ 110 $ (807)
--------- ---------
Primary shares:
Weighted average number of
common stares outstanding 16,593 15,500
Additional shares issuable from
assumed exercise of options 1,524 --(1)
--------- ---------
18,117 15,500
--------- ---------
Earnings (loss) per common share $ 0.01 $ (0.05)
--------- ---------
Fully diluted shares:
Weighted average number of
common shares outstanding
per primary computation above 16,593 15,500
Additional shares issuable from
assumed exercise of options 1,787 --(1)
--------- ---------
18,380 15,500
--------- ---------
Earnings (loss) per common share $ 0.01 $ (0.05)
--------- ---------
</TABLE>
Note (1): Since stock options are antidilutive to the loss per common share
calculations, they are not considered in such calculations.
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF HEALTHDYNE INFORMATION ENTERPRISES, INC. FOR THE THREE
MONTHS ENDED MARCH 31, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 2,568
<SECURITIES> 0
<RECEIVABLES> 4,080
<ALLOWANCES> (85)
<INVENTORY> 256
<CURRENT-ASSETS> 7,276
<PP&E> 1,554
<DEPRECIATION> (430)
<TOTAL-ASSETS> 21,442
<CURRENT-LIABILITIES> 4,918
<BONDS> 0
0
0
<COMMON> 169
<OTHER-SE> 11,043
<TOTAL-LIABILITY-AND-EQUITY> 21,442
<SALES> 0
<TOTAL-REVENUES> 3,530
<CGS> 1,243
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,064
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (113)
<INCOME-PRETAX> 110
<INCOME-TAX> 0
<INCOME-CONTINUING> 110
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 110
<EPS-PRIMARY> 0.01
<EPS-DILUTED> 0.01
</TABLE>
