<PAGE> 1
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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 27, 1998
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: 0-27892
------------------------
SIPEX CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
MASSACHUSETTS 04-6135748
(State or other jurisdiction of incorporation (I.R.S. Employer Identification No.)
or organization)
22 LINNELL CIRCLE, BILLERICA, MASSACHUSETTS 01821
(Address of principal executive offices) (Zip Code)
</TABLE>
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (978) 667-8700
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 [ ]
There were 17,809,188 shares of the Registration's Common Stock issued and
outstanding as of July 31, 1998.
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<PAGE> 2
SIPEX CORPORATION
FORM 10-Q
SIX MONTHS ENDED JUNE 27, 1998
INDEX
<TABLE>
<CAPTION>
ITEM NUMBER PAGE
----------- ----
<S> <C> <C> <C>
Part I: Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets at December 31, 1997
and June 27, 1998........................................... 3
Condensed Consolidated Statements of Operations for the
three months and six months ended June 28, 1997............. 4
Condensed Consolidated Statements of Cash Flows for the six
months ended June 28, 1997 and June 27, 1998................ 5
Notes To Condensed Consolidated Financial Statements........ 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................... 7-9
Part II: Other Information
Item 1. Legal Proceedings........................................... *
Item 2. Changes in Securities....................................... *
Item 3. Defaults Upon Senior Securities............................. *
Item 4. Submission of Matters to a Vote of Security Holders......... 10
Item 5. Other Information........................................... *
Item 6. Exhibits and Reports on Form 8-K............................ 10
Exhibit 11.1 Computation of Earnings Per Common Share...... *
Exhibit 27 Financial Data Schedule......................... *
Signatures..................................................................... 11
</TABLE>
- ---------------
* No information provided due to inapplicability of item.
2
<PAGE> 3
PART I: FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
SIPEX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 27,
1997 1998
------------ --------
<S> <C> <C>
ASSETS:
Current Assets Cash and cash equivalents.................... $23,887 $27,432
Short-term investment securities....................... 16,099 12,238
Accounts receivable, less allowances of $596 and $382
at December 31, 1997 and June 27, 1998,
respectively.......................................... 8,693 11,723
Inventories............................................ 13,988 17,381
Prepaid expenses and other current assets.............. 1,842 2,207
------- -------
Total current assets.............................. 64,509 70,981
Property, plant, and equipment, net......................... 8,345 9,962
Other assets................................................ 128 465
======= =======
Total assets...................................... $72,982 $81,408
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current Liabilities
Current portion of long term debt...................... $ 45 $ 22
Accounts payable....................................... 2,771 2,029
Accrued expenses....................................... 2,290 1,803
------- -------
Total current liabilities......................... 5,106 3,854
Long-term debt.............................................. 8 --
------- -------
Total liabilities................................. 5,114 3,854
------- -------
SHAREHOLDERS' EQUITY:
Preferred stock, $.01 par value, 1,000,000 shares
authorized and no shares issued or outstanding at
December 31, 1997 and June 27, 1998, respectively..... -- --
Common stock, $.01 par value, 40,000,000 shares
authorized and 17,711,422 and 17,791,715 shares issued
and outstanding at December 31, 1997 and June 27,
1998, respectively.................................... 177 178
Additional paid-in capital............................. 97,586 98,020
Accumulated deficit.................................... (30,058) (20,752)
Cumulative translation adjustment...................... 163 108
------- -------
Total shareholders' equity........................ 67,868 77,554
------- -------
Total liabilities and shareholders' equity........ $72,982 $81,408
======= =======
</TABLE>
See accompanying notes to condensed consolidated financial statements
3
<PAGE> 4
SIPEX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
-------------------- --------------------
JUNE 28, JUNE 28, JUNE 28, JUNE 28,
1997 1998 1997 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales.......................................... $12,005 $16,190 $22,985 $32,374
Cost of sales...................................... 6,382 7,982 12,333 15,988
------- ------- ------- -------
Gross profit.................................. 5,623 8,208 10,652 16,386
------- ------- ------- -------
Operating expenses
Research and development...................... 1,344 1,690 2,653 3,168
Marketing and selling......................... 1,279 1,695 2,497 3,288
General and administrative.................... 772 791 1,423 1,554
------- ------- ------- -------
Total operating expenses........................... 3,395 4,176 6,573 8,010
------- ------- ------- -------
Income from operations............................. 2,228 4,032 4,079 8,376
Other income....................................... 323 475 611 931
------- ------- ------- -------
Income before income taxes......................... 2,551 4,507 4,690 9,307
Income tax expense................................. 178 -- 501 --
======= ======= ======= =======
Net income......................................... $ 2,373 $ 4,507 $ 4,189 $ 9,307
======= ======= ======= =======
Net income per common share-basic.................. $ 0.14 $ 0.25 $ 0.24 $ 0.52
======= ======= ======= =======
Net income per common share-assuming dilution...... $ 0.13 $ 0.24 $ 0.23 $ 0.50
======= ======= ======= =======
Weighted average common shares outstanding-basic... 17,363 17,792 17,281 17,771
======= ======= ======= =======
Weighted average common and common equivalent
shares outstanding............................... 18,452 18,651 18,431 18,710
======= ======= ======= =======
</TABLE>
See accompanying notes to condensed consolidated financial statements
4
<PAGE> 5
SIPEX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
---------------------
JUNE 28, JUNE 27,
1997 1998
-------- ---------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income............................................. $ 4,189 $ 9,307
Adjustments to reconcile net income to net cash (used
in) provided by operating activities
Additions (reductions) to accounts receivable
allowances............................................ 187 (214)
Depreciation and amortization.......................... 672 1,006
Changes in current assets and liabilities
Increase in accounts receivable........................ (1,924) (2,816)
Decrease (increase) decrease in inventories............ 595 (3,393)
Increase in prepaid expenses and other assets.......... (314) (702)
Decrease in accounts payable and accrued expenses...... (613) (1,231)
-------- ---------
Net cash provided by operating activities................... 2,792 1,957
-------- ---------
INVESTING ACTIVITIES:
Proceeds from maturity of investment securities........ 3,286 218,126
Purchase of investment securities...................... (10,598) (214,265)
Purchase of property, plant, and equipment............. (3,040) (2,623)
-------- ---------
Net cash (used in) provided by investing activities.... (10,352) 1,238
-------- ---------
FINANCING ACTIVITIES:
Proceeds from issuance of common stock................. 174 435
Payment of capital lease obligations................... (102) (30)
-------- ---------
Net cash provided by financing activities.............. 72 405
Effect of foreign currency translation adjustments..... (4) (55)
-------- ---------
(Decrease) increase in cash and cash equivalents....... (7,492) 3,545
Cash and cash equivalents, beginning of period......... 14,787 23,887
======== =========
Cash and cash equivalents, end of period.................... $ 7,295 $ 27,432
======== =========
</TABLE>
See accompanying notes to condensed consolidated financial statements
5
<PAGE> 6
SIPEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared by SIPEX
Corporation (the "Company") pursuant to the rules and regulations of the
Securities and Exchange Commission regarding interim financial reporting.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements
and should be read in conjunction with the financial statements and notes
thereto for the year ended December 31, 1997 included in the Company's 10-K
filing. The accompanying financial statements reflect all adjustments
(consisting solely of normal, recurring adjustments) which are, in the opinion
of management, necessary for a fair presentation of results for the interim
periods presented. The results of operations for the six month period ended June
27, 1998 are not necessarily indicative of the results to be expected for the
full fiscal year.
2. INVENTORIES
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 27,
1997 1998
------------ ------------
(IN THOUSANDS)
<S> <C> <C>
Inventories consist of:
Raw materials..................................... $ 6,424 $ 8,493
Work in process................................... 4,237 4,951
Finished goods.................................... 3,327 3,937
------- -------
$13,988 $17,381
======= =======
</TABLE>
3. NET INCOME PER SHARE
Net income per share is based upon the weighted average number of common
shares outstanding. Income per share assuming dilution is based upon the
weighted average number of common equivalent shares outstanding. Common
equivalent shares, consisting of outstanding stock options, are included in the
per share calculations where the effect of their inclusion would be dilutive.
4. NEW ACCOUNTING STANDARDS
Effective January 1, 1998, the Company adopted Financial Accounting
Standards Board Statement No. 130, "Reporting Comprehensive Income" which
establishes standards for reporting and display of comprehensive income and its
components in a full set of financial statements. For the Company, comprehensive
income includes net earnings and unrealized gains and losses from currency
translation. For 1997 and 1998, the impact of other elements of comprehensive
income were immaterial so net income as stated approximates comprehensive
income.
6
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
This 10-Q contains certain statements of a forward-looking nature relating
to future events or the future financial performance of the Company and the
Company's actual future results may differ significantly from such statements.
In evaluating such statements, the various factors identified over the caption
"Factors Affecting Future Operating Results" should be considered.
OVERVIEW
SIPEX Corporation (the "Company") was organized and commenced operations in
1965. The Company is a leading manufacturer of high performance, high
value-added analog integrated circuits. The Company serves the broad analog
signal processing market with single, dual and multiprotocol interface circuits,
low power and high voltage application specific circuits, electroluminescent
circuits, data converters and power management products. Applications for the
Company's products include telecommunications, personal computers and
peripherals, battery powered hand-held devices, cellular telephones, test
equipment, factory automation, networking, process controls and satellites. The
Company operates in the analog segment of the semiconductor industry.
RESULTS OF OPERATIONS
The table below presents the statement of operations for the three months
and six months ended June 28, 1997 and June 27, 1998 as a percentage of net
sales and provides the percentage increase of such items comparing the interim
periods ended June 27, 1998 to the corresponding period from the prior fiscal
year.
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
-------------------------------- --------------------------------
PERCENTAGE PERCENTAGE
JUNE 28, JUNE 27, INCREASE JUNE 28, JUNE 27, INCREASE
1997 1998 (DECREASE) 1997 1998 (DECREASE)
-------- -------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net sales................................ 100% 100% 34.9% 100% 100% 40.8%
Cost of sales............................ 53.2 49.3 25.1 53.7 49.4 29.6
---- ---- ------ ---- ---- ------
Gross profit............................. 46.8 50.7 46.0 46.3 50.6 53.8
---- ---- ------ ---- ---- ------
Operating expenses
Research and development............ 11.2 10.4 25.7 11.5 9.8 19.4
Marketing and selling............... 10.7 10.5 32.5 10.9 10.2 31.7
General and administrative.......... 6.4 4.9 2.5 6.2 4.8 9.2
---- ---- ------ ---- ---- ------
Total operating expenses................. 28.3 25.8 22.6 28.6 24.8 21.9
---- ---- ------ ---- ---- ------
Operating income......................... 18.6 24.9 81.0 17.7 25.8 105.3
Other income (expense)................... 2.7 2.9 47.1 2.7 2.9 52.4
---- ---- ------ ---- ---- ------
Income before income taxes............... 21.3 27.8 76.7 20.4 28.7 98.4
Income tax expense....................... 1.5 0.0 (100.0) 2.2 0.0 (100.0)
---- ---- ------ ---- ---- ------
Net income............................... 19.8% 27.8% 89.9% 18.2% 28.7% 122.2%
==== ==== ====== ==== ==== ======
</TABLE>
Net sales for both the second quarter and first six months of 1998
increased 34.9% and 40.8% to $16.2 million and $32.4 million respectively, as
compared to the same periods in the previous year. For the second quarter and
first six months of 1998, net sales increased primarily due to higher unit sales
of the Company's proprietary interface circuits, application specific circuits
and electroluminescent driver circuits. Both domestic and international sales
increased during the second quarter and first six months of 1998 as compared to
the corresponding periods in the prior year.
Gross profit increased for both the second quarter and first six months of
1998 by $2.6 million and $5.7 million, as compared to the same periods in the
previous year. As a percentage of net sales, gross profit increased respectively
to 50.7% and 50.6% for both the second quarter and first six months of 1998,
respectively, over the comparable period in the prior year primarily due to the
absorption of certain fixed costs over the increased sales volume and due to
increased market acceptance of the Company's proprietary interface circuits,
electroluminescent circuits and application specific circuits.
7
<PAGE> 8
Research and development expenses for the second quarter and first six
months of 1998 increased $346,000 and $515,000 respectively, or 25.7% and 19.4%
as compared to the same periods one year ago. The increase in spending was due
to salary and other expenses relating to the hiring of additional engineering
personnel, and expenses associated with the creation of the Flanders Design
Center in Belgium, increased use of test wafers, mask sets and capital
equipment. The Flanders Design Center opened in the second quarter to offer
engineering services to the European customer base. As a percentage of net
sales, research and development decreased slightly to 10.4% and 9.8% for the
second quarter and first six months of 1998, respectively, as compared to the
same periods in the previous year.
Marketing and selling expenses increased 32.5% and 31.7% to $1.7 million
and $3.3 million, respectively, for the second quarter and first six months of
1998 as compared with $1.3 million and $2.5 million, respectively, for the same
periods of the previous year. The increase was due primarily to higher costs
associated with travel, marketing, advertising programs and increased staffing.
As a percentage of net sales, marketing and selling expenses for the second
quarter and first six months of 1998 declined slightly to 10.5% and 10.2% as
compared to 10.7% and 10.9%.
General and administrative expenses increased by $19,000 and $131,000 for
the second quarter and first six months of 1998, respectively, as compared to
the same period of the previous year. The increase in spending for the first six
months of 1998 as compared to the same period a year ago was due to increased
professional fees and additional staffing related expense which were initiated
starting in the second quarter of 1997. As a percentage of net sales, general
and administrative expenses decreased slightly to 4.9% and 4.8%, respectively
for the second quarter and first six months of 1998, a decrease from the 6.4%
and 6.2%, respectively, for the comparable periods of the previous year.
Other income/expense for the second quarter and first six months of 1998
consists primarily of interest income on short-term investment securities. For
the second quarter and first six months of 1998, other income/expense
represented income of $475,000 and $931,000 as compared to an income of $323,000
and $611,000 for the same periods in the previous year. The increase was due
primarily to the interest income earned on short-term investment securities.
As a result of the Company's continued utilization of its net operating
loss carry forwards to offset taxable income, the Company recorded no income tax
expense for either the second quarter or first six months of 1998.
LIQUIDITY AND CAPITAL RESOURCES
At June 27, 1998, the Company had working capital of $67.1 million and
available funds of $40.0 million consisting of cash, cash equivalents and
short-term U.S. Government-backed investments. Up to $35,000,000 of this amount
was pledged in March 1998 as security for a lease which the Company entered into
for the construction and lease of a new facility in Milpitas, California. The
Company anticipates that available funds and cash provided from operations will
be sufficient to meet cash and working capital requirements for the foreseeable
future.
FACTORS AFFECTING FUTURE OPERATING RESULTS
Except for historical information contained herein, the matters set forth
in this Form 10-Q, including the statements in the management's discussion are
forward-looking statements that are dependent on certain risks and uncertainties
including such factors, among others, as the timing, volume and pricing of new
orders received and shipped during the quarter, whether customer cancellations
and delays of outstanding orders increase, timely ramp-up of new facilities, and
the timely introduction of new processes and products.
Past performance of the Company may not be a good indicator of future
performance due to factors affecting the Company, its competitors, the
semiconductor industry and the overall domestic and international economy. The
semiconductor industry is characterized by rapid technological change, price
erosion, cyclical market patterns, occasional shortages of materials, capacity
constraints, variation in manufacturing efficiencies and significant
expenditures for capital equipment and product development. Furthermore, new
product
8
<PAGE> 9
introductions and patent protection of existing products are critical factors
for future sales growth and sustained profitability.
Although the Company believes that it has sufficient product lines,
manufacturing facilities and technical and financial resources for its current
operations, sales and profitability can be significantly affected by the above
and other risks discussed from time to time in the Company's other filings with
the Securities and Exchange Commission, including its Annual Report on Form 10-K
for the year ended December 31, 1997. Additionally, the Company's common stock
could be subject to significant price volatility should sales and/or earnings
fail to meet expectations of the investment community.
YEAR 2000 ISSUE
The Company has recently commenced a Year 2000 date conversion project to
assess the possible impact of Year 2000 issues on its business. The Company is
looking at (a) its internal information and operating systems, (b) possible
effects on the Company of third parties' failure to fix their own Year 2000
issues, and (c) whether any material contingencies may exist related to products
sold by the Company. The Company expects that these assessments will enable it
to develop plans for any required changes, testing and implementation; to make
estimates of likely time involved, and costs of any required changes; and to
determine whether Year 2000 issues are likely to have a material impact on
future financial results or financial condition. Based upon the review to date,
the Company does not believe the Year 2000 issues will have a material impact on
Company's results of operations or financial condition. As part of a general
upgrade to the Company's information systems, the Company is planning to install
new accounting and manufacturing software that will be Year 2000 compliant.
9
<PAGE> 10
PART II: OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Annual Meeting of Shareholders was held on May 28, 1998. Holders of an
aggregate of 17,780,518 shares at the close of business on April 9, 1998 were
entitled to vote at the meeting. At such meeting, the Company's shareholders
voted as follows:
(a) To elect Messrs. Lionel H. Olmer, John L. Sprague and Willy M.C. Sansen
to the Board of Directors for a three-year term.
<TABLE>
<CAPTION>
TOTAL VOTE FOR EACH TOTAL VOTE WITHHELD FROM
DIRECTOR EACH DIRECTOR
------------------- ------------------------
<S> <C> <C>
Lionel H. Olmer........................... 16,058,093 45,225
John L. Sprague........................... 16,057,893 45,425
Willy M.C. Sansen......................... 16,057,893 45,625
</TABLE>
Messrs. James E. Donegan and Daniel Deroux will continue to hold office
until the 1999 Annual Meeting of Shareholders or until their successors have
been duly elected or until their earlier resignation or removal. Messrs. Steward
S. Flaschen and Manfred Loeb will continue to hold office until the 2000 Annual
Meeting of Shareholders or until their successors have been duly elected or
until their earlier resignation or removal.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
<TABLE>
<S> <C>
(a) Exhibit 11.1 Computation of Earnings Per Common Share
Exhibit 27.1 Financial Data Schedule
Exhibit 27.2 Financial Data Schedule
(b) Reports on Form 8-K
None
</TABLE>
10
<PAGE> 11
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.
Date: August 10, 1998
SIPEX CORPORATION
By /s/ FRANK R. DIPIETRO
-----------------------------------
FRANK R. DIPIETRO
EXECUTIVE VICE PRESIDENT, FINANCE &
CHIEF FINANCIAL OFFICER
(DULY AUTHORIZED OFFICER &
PRINCIPAL FINANCIAL OFFICER)
11
<PAGE> 1
EXHIBIT 11.1
COMPUTATION OF SHARES USED IN COMPUTING
NET INCOME PER SHARE
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
------------------------ ------------------------
JUNE 28, JUNE 27, JUNE 28, JUNE 27,
1997 1998 1997 1998
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Common shares, beginning of period....... 17,068,398 17,711,422 17,068,398 17,711,422
Common stock equivalents................. 1,659,336 1,826,935 1,639,912 1,761,400
Treasury stock buyback................... (570,626) (967,559) (490,040) (821,652)
Weighted average shares issued........... 294,890 80,293 212,496 59,235
========== ========== ========== ==========
18,451,998 18,651,091 18,430,766 18,710,405
========== ========== ========== ==========
</TABLE>
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET AS OF JUNE 27, 1998 AND FROM THE INTERIM
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 27,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> US$
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-27-1998
<EXCHANGE-RATE> 1
<CASH> 27,432
<SECURITIES> 12,238
<RECEIVABLES> 11,723
<ALLOWANCES> 382
<INVENTORY> 17,381
<CURRENT-ASSETS> 70,891
<PP&E> 36,720
<DEPRECIATION> 26,758
<TOTAL-ASSETS> 81,408
<CURRENT-LIABILITIES> 3,854
<BONDS> 0
0
0
<COMMON> 178
<OTHER-SE> 98,020
<TOTAL-LIABILITY-AND-EQUITY> 81,408
<SALES> 0
<TOTAL-REVENUES> 32,374
<CGS> 0
<TOTAL-COSTS> 15,988
<OTHER-EXPENSES> 7,079
<LOSS-PROVISION> 213
<INTEREST-EXPENSE> 1,083
<INCOME-PRETAX> 9,307
<INCOME-TAX> 0
<INCOME-CONTINUING> 9,307
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,307
<EPS-PRIMARY> 0.52
<EPS-DILUTED> 0.50
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AS OF JUNE 28, 1997 AND FROM THE INTERIM CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 28, 1997 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> US$
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-28-1997
<EXCHANGE-RATE> 1
<CASH> 7,295
<SECURITIES> 29,671
<RECEIVABLES> 7,382
<ALLOWANCES> 507
<INVENTORY> 11,030
<CURRENT-ASSETS> 55,419
<PP&E> 30,675
<DEPRECIATION> 24,994
<TOTAL-ASSETS> 61,293
<CURRENT-LIABILITIES> 3,514
<BONDS> 0
0
0
<COMMON> 174
<OTHER-SE> 57,594
<TOTAL-LIABILITY-AND-EQUITY> 61,293
<SALES> 0
<TOTAL-REVENUES> 22,985
<CGS> 0
<TOTAL-COSTS> 12,333
<OTHER-EXPENSES> 5,962
<LOSS-PROVISION> 187
<INTEREST-EXPENSE> (967)
<INCOME-PRETAX> 4,690
<INCOME-TAX> 501
<INCOME-CONTINUING> 4,189
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,189
<EPS-PRIMARY> 0.24
<EPS-DILUTED> 0.23
</TABLE>
