<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 December 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
0-27678
TRIDENT INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 06-6403301
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1114 Federal Road, Brookfield, Connecticut 06804
(Address of principal executive offices) (Zip Code)
(203) 740-9333
(Registrant's telephone number, including area code)
(not applicable)
(Former name, former address and former fiscal year,
if changed since last report)
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 registrant's Common Stock, par value
$.01 per share, as of January 31, 1997 was 7,076,927.
<PAGE> 2
TRIDENT INTERNATIONAL, INC. AND SUBSIDIARIES
INDEX
Page
PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets as of
September 30, 1996 and December 31, 1996..................... 3
Condensed Consolidated Statements of Operations
for the three months ended December 31, 1995
and 1996..................................................... 4
Condensed Consolidated Statements of Cash Flows
for the three months ended December 31, 1995 and
1996......................................................... 5
Notes to Condensed Consolidated Financial Statements........... 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.......................... 8
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K............................... 12
Signatures..................................................... 12
<PAGE> 3
PART 1. FINANCIAL INFORMATION
This Form 10-Q contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. The Company's actual results could differ materially from those set
forth in the forward-looking statements. Factors that might cause such a
difference are discussed in the section entitled "Business Environment and
Future Results" on page 10 of this Form 10-Q.
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
TRIDENT INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(000's Omitted)
<TABLE>
<CAPTION>
September 30, 1996 December 31, 1996
------------------ -----------------
(Unaudited)
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash and equivalents......................................... $17,349 $19,768
Accounts receivable, net..................................... 3,915 3,599
Inventories.................................................. 1,563 1,914
Deferred income taxes........................................ 431 429
Other current assets......................................... 167 86
------- -------
Total current assets................................... 23,425 25,796
LEASEHOLD IMPROVEMENTS AND EQUIPMENT, net....................... 1,443 1,448
DEFERRED INCOME TAXES........................................... 919 879
INTANGIBLE ASSETS, net.......................................... 12,544 12,344
-------- --------
Total assets........................................... $38,331 $40,467
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable............................................. $ 999 $ 881
Accrued expenses............................................. 1,101 816
Income taxes payable......................................... 269 1,069
------- -------
Total current liabilities.............................. 2,369 2,766
------- -------
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value; 30,000,000 shares
authorized; 7,010,234 and 7,069,935 shares
issued and outstanding at September 30, 1996
and December 31, 1996...................................... 70 71
Additional paid-in capital................................... 40,059 40,058
Retained earnings (deficit).................................. (4,167) (2,428)
------- -------
Total stockholders' equity............................. 35,962 37,701
------- -------
$38,331 $40,467
======= =======
</TABLE>
See accompanying notes.
3
<PAGE> 4
TRIDENT INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(000's Omitted, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
-------------------------------
December 31, December 31,
1995 1996
----------- -----------
<S> <C> <C>
NET SALES ......................................................... $ 6,047 $ 6,544
COST OF SALES ..................................................... 2,347 2,220
----------- -----------
Gross profit ................................................ 3,700 4,324
----------- -----------
OPERATING EXPENSES:
Marketing and selling ....................................... 265 441
Research and development .................................... 447 612
General and administrative .................................. 533 478
Amortization of intangibles ................................. 200 201
Amortization of deferred compensation ....................... 296 --
----------- -----------
Total operating expenses ............................... 1,741 1,732
----------- -----------
Operating income ....................................... 1,959 2,592
OTHER (INCOME) EXPENSE:
Interest (income) expense, net .............................. 428 (236)
Redeemable warrant interest charge .......................... 1,142 --
----------- -----------
Income before income taxes ............................. 389 2,828
PROVISION FOR INCOME TAXES ........................................ 794 1,089
----------- -----------
NET INCOME (LOSS) ................................................. (405) 1,739
INCREASE IN REDEMPTION VALUE
OF PREFERRED STOCK ............................................. (50) --
----------- -----------
INCOME (LOSS) APPLICABLE TO COMMON
STOCKHOLDERS ................................................... $ (455) $ 1,739
=========== ===========
INCOME (LOSS) PER COMMON SHARE .................................... $ (0.28) $ 0.24
=========== ===========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING .................................................... 1,608,000 7,219,985
=========== ===========
</TABLE>
See accompanying notes.
4
<PAGE> 5
TRIDENT INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(000's Omitted)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
-------------------------
December 31, December 31,
1995 1996
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) ................................ $ (405) $ 1,739
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization .................... 394 278
Amortization of deferred compensation ............ 296 --
Deferred income taxes ............................ (116) 40
Accretion of interest on zero coupon notes ....... 65 --
Accretion of redeemable warrant interest charge .. 1,142 --
Changes in operating assets and liabilities:
Accounts receivable, net .................... (597) 316
Inventories ................................. (124) (351)
Other current assets ........................ 51 81
Accounts payable and accrued expenses ....... 839 (403)
Current income taxes ........................ -- 802
-------- --------
Net cash provided by operating activities . 1,545 2,502
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Purchases of leasehold improvements and
equipment, net ................................ (196) (83)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt ...................... (312) --
Payments of offering costs ....................... (115) --
-------- --------
Net cash provided by (used in) financing
activities ............................. (427) --
-------- --------
INCREASE IN CASH ....................................... 922 2,419
CASH, beginning of period .............................. 2,988 17,349
-------- --------
CASH, end of period .................................... $ 3,910 $ 19,768
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for -
Interest ...................................... $ 344 $ --
Income taxes .................................. $ 396 $ 247
Non-cash transactions -
Increase in redemption value of preferred stock $ 50 $ --
Deferred offering costs ....................... $ 394 $ --
</TABLE>
See accompanying notes.
5
<PAGE> 6
TRIDENT INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Business:
Trident International, Inc. (the Company) designs,
manufactures and markets impulse ink jet subsystems, including
printheads, inks and other consumables, and related components for
the industrial market. The Company markets its products worldwide
principally to original equipment manufacturers (OEMs), who
integrate the products into systems which are then sold to
end-users directly or via distributors. The largest market segment
currently addressed by the Company's products is that of printing
onto shipping cartons. Other industrial market segments in which
the Company's products are currently being utilized include check
coding, addressing and imprinting business forms, postal bar
coding and stamp cancellation and plotting garment patterns.
The interim financial statements reflect all adjustments
(consisting of normal recurring adjustments) which are, in the
opinion of management, necessary to a fair statement of the
results for the interim periods presented. These interim financial
statements should be read in conjunction with the financial
statements and notes included in the Company's Form 10-K.
The foregoing interim results are not necessarily indicative
of the results of operations for the full fiscal year ending
September 30, 1997.
2. Inventories:
Inventories consisted of the following:
September 30, December 31,
1996 1996
------------ ------------
Raw materials $ 894 $1,210
Work-in process 331 333
Finished goods 338 371
------ ------
$1,563 $1,914
====== ======
3. Contingency:
In connection with the prior acquisition (Acquisition), the
Company undertook an environmental compliance audit which
identified certain environmental deficiencies on properties leased
by the Company. The site of one of the Company's leased facilities
was contaminated due to prior uses by a prior occupant and may
require remedial action. Although the Company obtained an
indemnification agreement in connection with the Acquisition with
respect to such prior contamination, if the Company is found to be
liable as a result of any contamination of the site, there can be
no assurance that such indemnification will be available or that,
if available, it will be sufficient. While the ultimate results of
future claims, if any, against the Company with regard to these
matters cannot be determined, management does not anticipate that
these matters will have a material adverse impact on the
consolidated results of operations or financial position of the
Company.
6
<PAGE> 7
4. Initial Public Offering:
In February 1996, the Company completed the initial public
offering of its common stock which provided net proceeds, after
underwriting discounts and expenses, of $28,264,000. The Company
used approximately $10,755,000 to repay the outstanding
indebtedness under its credit facility and $4,500,000 to retire
all of the $5,000,000 in principal amount of the zero coupon notes
originally issued by the Company for $1,900,000 in connection with
the Acquisition. The remaining net proceeds will be used for
working capital and general corporate purposes. As a result,
period to period comparison involving periods through March 31,
1996 may not necessarily be meaningful or indicative of trends in
operating results.
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
The Company designs, manufactures and markets impulse ink jet
subsystems, including printheads, inks and other consumables, and related
components for the industrial market. The Company markets its products worldwide
principally to OEMs, who integrate the products into systems which are then sold
to end-users directly or via distributors. The largest market segment currently
addressed by the Company's products is that of printing onto shipping cartons.
Other industrial market segments in which the Company's products are currently
being utilized include check coding, addressing and imprinting business forms,
postal bar coding and stamp cancellation and plotting garment patterns.
The Predecessor was founded in 1989 as Trident, Inc. Shortly after its
incorporation, a majority interest in the Predecessor was purchased by JWA
through JWA's direct subsidiary, Porelon. At that time, the Predecessor also
obtained the Dataproducts License from Dataproducts Corporation, which gave the
Predecessor exclusive rights to a series of liquid ink jet technology patents
for use in the "industrial marking field." The technology covered by the
Dataproducts License is at the core of the Company's current line of industrial
printing subsystems. In December 1992, Porelon purchased the remaining minority
interests in the Predecessor and the Predecessor became a wholly-owned
subsidiary of Porelon.
On June 24, 1994, the Company acquired all of the capital stock of the
Predecessor (the 1994 Acquisition). The aggregate cash consideration paid by the
Company in the 1994 Acquisition was approximately $19.9 million, including $1.0
million for a consulting agreement. The 1994 Acquisition has been accounted for
as a purchase and, accordingly, the total consideration has been allocated to
the assets acquired and liabilities assumed based on their estimated fair value
at the date of the 1994 Acquisition. The excess of the purchase price over the
fair value of the net assets acquired ($13.9 million) is being amortized over 20
years. Periodically, the Company evaluates the realizability of this asset based
upon expectations of undiscounted cash flows and operating income. Based upon
its most recent analysis, the Company believes that no impairment of the current
net book value of this asset exists. The $1.0 million payment made by the
Company under the consulting agreement was being amortized. The services
provided under the consulting agreement largely related to transition services
in connection with the establishment of stand-alone operations and assistance in
preparation for an initial public offering. Other long-term assets acquired in
the 1994 Acquisition are being depreciated over their respective useful lives of
5 years.
In February 1996, the Company completed the initial public offering of
its common stock which provided proceeds, after underwriting discounts and
commissions, of $28.3 million. The Company incurred certain significant charges
relating to the 1994 Acquisition from the beginning of fiscal year 1996 through
the consummation of the Offering. The Company incurred charges of $4.2 million,
net of related income tax benefits, comprised of $2.1 million of recurring
charges which were expensed through consummation of the offering and did not
recur thereafter, and $2.1 million of extraordinary or non-recurring charges
which were expensed at the closing of the Offering. The Company used
approximately $10.8 million to repay the outstanding indebtedness under its
credit facility and $4.5 million to retire all of the $5.0 million in principal
amount of the zero coupon notes issued by the Company for $1.9 million in
connection with the 1994 Acquisition. The remaining net proceeds will be used
for working capital and general corporate purposes. As a result of the offering,
the Company incurred extraordinary charges to earning for approximately $2.2
million of unamortized original issue discount and approximately $898,000 of
unamortized financing costs relating to the Credit Facility and the Notes. The
Company also recognized a non-recurring charge of approximately $438,000,
representing the unamortized portion of the cost of the Consulting Agreement as
of the Offering date, which was terminated at the time of the Offering.
Collectively, these items resulted in extraordinary or non-recurring charges to
earnings of approximately $2.1 million, net of related income tax benefits, at
the time of the Offering.
8
<PAGE> 9
In March 1996, the Company acquired from Dataproducts Corporation a
non-exclusive license for patented solid ink jet printing technology in certain
licensed industrial marking fields. This agreement allows the Company to use
these patents in the development of its own solid ink printhead. The Company
recorded a charge of $3.1 million during fiscal 1996 as a write-off of purchased
in-process research and development to record the cost of evaluating and
acquiring this license. The Company intends to continue to evaluate potential
acquisitions and licenses of new technologies.
RESULTS OF OPERATIONS
Net Sales. Net sales increased $497,000, or 8% to $6.5 million for the
three months ended December 31, 1996 from $6.0 million for the three months
ended December 31, 1995. Net sales of printheads decreased by approximately
$298,000 or 8% in the three months ended December 31, 1996 as compared to the
same quarter in the prior fiscal year due primarily to a decrease in printhead
unit sales offset by an increase in average selling prices. Sales of ink
products increased by $884,000 or 47% in the three months ended December 31,
1996 as compared to the same quarter in the prior fiscal year due to the
expanding installed base of printheads. Net sales to international customers
decreased by $151,000, or 7.6% for the three months ended December 31, 1996 as
compared to the three months ended December 31, 1995.
Because of the size of the carton coding market and the relatively
small market penetration achieved to date, the Company believes that it can
continue to sell printheads into its principal market and expand its installed
base of printheads. There can, however, be no assurance that such sales and
expansion will experience continued growth at similar rates or not be limited or
otherwise adversely affected by competition, emerging or alternative
technologies, shifts in customer demands or other factors.
Gross Profit. Gross profit increased $624,000, or 17% to $4.3 million
for the three months ended December 31, 1996 from $3.7 million for the three
months ended December 31, 1995. Gross profit as a percentage of net sales
increased from 61.2% for the three months ended December 31, 1995 to 66% for
the three months ended December 31, 1996. The increase in gross profit as a
percentage of net sales was due to higher average selling prices, higher
percentage of ink sales and lower average printhead costs.
Marketing and Selling Expenses. Marketing and selling expenses
increased $176,000, or 66% to $441,000 for the three months ended December 31,
1996 from $265,000 for the three months ended December 31, 1995 due to the
addition of sales personnel and associated travel expenses and marketing
support. As a percentage of net sales, these expenses increased to 6.7% for the
three months ended December 31, 1996 from 4.4% for the three months ended
December 31, 1995.
Research and Development Expenses. Research and development expenses
increased $165,000, or 37% to $612,000 for the three months ended December 31,
1996 from $447,000 for the three months ended December 31, 1995 due principally
to the addition of engineering personnel as well as increases in research
project materials and supplies. As a percentage of net sales, these expenses
increased to 9.4% for the three months ended December 31, 1996 from 7.4% for the
three months ended December 31, 1995. The Company's product research and
development groups work in teams on engineering development programs to design
and develop new products and enhancements to existing products.
General and Administrative Expenses. General and administrative
expenses decreased $55,000, or 10% to $478,000 for the three months ended
December 31, 1996 from $533,000 for the three months ended December 31, 1995.
The decrease in expenses is due to amortization of consulting agreements and
providing additional provisions for potential bad debts during the three months
ended December 31, 1995. The consulting agreement terminated with the initial
public offering and there were no similar provisions for bad debt during the
three months ended December 31, 1996. These decreases were partially offset by
increases in personnel. As a percentage of net sales, these expenses decreased
to 7.3% for the three months ended December 31, 1996 from 8.8% for the three
months ended December 31, 1995.
9
<PAGE> 10
Amortization of Intangibles and Amortization of Deferred Compensation.
The amortization amounts for intangibles of $201,000 and $200,000, respectively,
did not vary materially in amount for the three months ended December 31, 1996
as compared to the three months ended December 31, 1995. Deferred compensation
was fully amortized effective February, 1996 and accordingly there were no
further charges for deferred compensation during the three months ended December
31, 1996.
Interest (Income) Expense, net. Interest income was $236,000 for the
three months ended December 31, 1996 as compared to interest expense of $428,000
for the three months ended December 31, 1995. This was due the repayment of all
outstanding borrowings with the proceeds of the initial public offering and an
increase in interest income on higher cash balances.
Redeemable Warrant Interest Charge. Redeemable warrant interest charge
decreased by $1.1 million to $0 for the three months ended December 31, 1996
from $1.1 million for the three months ended December 31, 1995 because the
redeemable warrants were fully accredited as of February 1996.
Provision for Income Taxes. The provision for income taxes for the
three months ended December 31, 1996 was $1.1 million on income before income
taxes of $2.8 million. The effective tax rate for the three months ended
December 31, 1996 differed from the statutory rate principally due to the
non-deductibility of amortization costs related to the excess of the purchase
price over fair value of net assets acquired and state income taxes.
BUSINESS ENVIRONMENT AND FUTURE RESULTS
The industrial printing industry is highly competitive and the Company
believes it will need to continue to develop new products and applications in
order to remain competitive. Several of the Company's competitors are larger and
have greater financial, research and development, marketing and other resources
than the Company. For example Nu-Kote Holdings, Inc. released a piezoelectric
printhead intended for use in industrial and other applications. No assurance
can be given that the Company will be able to compete successfully against
current or future competitors or that the competitive pressures faced by the
Company will not adversely affect its results of operations. The Company is
aware that manufacturers of certain ink products are claiming that their inks
could be utilized with certain of the Company's impulse ink jet printheads.
Although the use of such other inks will void the Company's warranties on its
printheads, and could, in the Company's judgment, result in inferior performance
and permanent damage to its printheads, there can be no assurance that the
introduction and sale of such other inks will not have a material adverse effect
on the Company's financial condition or results of operations or that end users
will continue to purchase their ink requirements from the Company.
The markets for the Company's products are characterized by changing
technology, evolving industry standards and changing customer needs. The
Company's future success will depend in part on its ability to enhance its
current products and to develop new products on a timely and cost-effective
basis in order to respond to technological developments and changing customer
needs. There can be no assurance that the Company will be successful in
developing new products or enhancing its existing products on a timely or
cost-effective basis.
New products could also have the effect of decreasing customer demand
for the Company's current products. Although the Company historically has not
experienced any material adverse impact on its business attributable to delays
in the introduction of new products, there can be no assurance that delays will
not occur in the future. The Company expects a component of its growth strategy
to be the acquisition of new technologies, whether through entering into
licensing arrangements, acquiring businesses owning desirable technology, or
otherwise. An example of this is the new solid ink jet printing technology.
There can be no assurance that the Company's investments in new technologies,
including solid ink, will lead to the successful development of new products.
10
<PAGE> 11
The Company's net sales are dependent upon the ability of its OEM
customers to develop and sell products that incorporate the Company's impulse
ink jet products. Factors such as economic conditions, inventory positions,
limited marketing resources and other factors affecting these OEM customers
could have a substantial impact upon the Company's financial results. No
assurances can be given that the Company's OEM customers will not experience
financial or other difficulties that could adversely affect their operations
and, in turn, the results of operations of the Company.
For the three months ended December 31, 1996, approximately 75% of the
Company's net sales were to its top ten OEM customers, while approximately 22%
and 11% of the Company's net sales for this period were to two OEM customers,
Marsh Company and Banctec, Inc., respectively. A significant diminution in the
sales to or loss of any of the Company's major customers would have a material
adverse effect on the Company's results of operations.
For the three months ended December 31, 1996, approximately 71% of the
Company's net sales were derived from carton coding and the Company anticipates
that carton coding will continue to account for a substantial portion of the
Company's total net sales. A reduction in demand for carton coding systems would
have a material adverse effect on the Company's business, results of operations
and financial condition.
The Company's annual and quarterly operating results may fluctuate due
to factors such as the timing of new product announcements and introductions by
the Company and its competitors, market acceptance of new or enhanced versions
of the Company's products, changes in product mix, changes in manufacturing
costs or other expenses, competitive pricing pressures, the gain or loss of
significant customers, increased research and development expenses and general
economic conditions.
The trading price of the Company's Common Stock could be subject to
wide fluctuations in response to quarterly variations in the Company's operating
results, shortfalls in such operating results from levels forecast by securities
analysts and other events or factors. In addition, the stock market has, from
time to time, experienced extreme price and volume fluctuations that have often
been unrelated to the operating performance of the affected companies.
In connection with the consummation of the Company's initial public
offering in February, 1996, the Company paid down all of its indebtedness and
fully amortized a number of expenses incurred in connection with the 1994
acquisition. As a result, period to period comparisons involving periods through
March 31, 1996 may not necessarily be meaningful or indicative of trends in
operating results.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 1996, the Company had working capital of $23.0 million
compared to $21.1 million at September 30, 1996. At December 31, 1996, the
Company has cash and temporary cash investments of $19.8 million.
The Company's long-term capital requirements will depend on numerous
factors including the rate at which the Company identifies, evaluates and
acquires new technologies, whether through entering into licensing arrangements
or acquiring businesses, the timing of the expansion of the Company's facilities
and the purchase of additional factory automation equipment. The Company
anticipates that it will incur expenditures to expand its facilities during the
next 12 months. The Company believes the proceeds of the initial public
offering, together with amounts available from cash generated by its operating
activities, will be adequate to meet the Company's anticipated needs for working
capital and capital expenditures through at least the next 12 months.
11
<PAGE> 12
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits:
The following exhibit is filed as a part of this report:
Exhibit Number Title
-------------- -----
27 Financial Data Schedule.
b. Reports on Form 8-K:
No reports on Form 8-K were filed during the quarter ended December 31, 1996.
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.
Dated: February 7, 1997
Trident International, Inc.
(Registrant)
/S/ Elaine A. Pullen
---------------------
Elaine A. Pullen
President and Chief Executive Officer
/S/ J. Leo Gagne
-----------------
J. Leo Gagne
Vice President and Chief
Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED DECEMBER 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> SEP-30-1997
<PERIOD-END> DEC-31-1996
<CASH> 19,768
<SECURITIES> 0
<RECEIVABLES> 3,899
<ALLOWANCES> 300
<INVENTORY> 1,914
<CURRENT-ASSETS> 25,796
<PP&E> 2,046
<DEPRECIATION> 598
<TOTAL-ASSETS> 40,467
<CURRENT-LIABILITIES> 2,766
<BONDS> 0
0
0
<COMMON> 70
<OTHER-SE> 37,631
<TOTAL-LIABILITY-AND-EQUITY> 40,467
<SALES> 6,544
<TOTAL-REVENUES> 6,544
<CGS> 2,220
<TOTAL-COSTS> 1,732
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,828
<INCOME-TAX> 1,089
<INCOME-CONTINUING> 1,739
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,739
<EPS-PRIMARY> 0.24
<EPS-DILUTED> 0.24
<FN>
Amounts inapplicable or not disclosed as a separate line on the Condensed
Consolidated Balance Sheets or Condensed Consolidated Statements of Operations
are reported as 0 herein.
</FN>
</TABLE>
