<PAGE> 1
========================================================================
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 APRIL 3, 1999
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 (I.R.S. Employer Identification No.)
incorporation
or organization)
22 LINNELL CIRCLE, BILLERICA,
MASSACHUSETTS 01821
(Address of principal executive (Zip Code)
offices)
</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 18,055,868 shares of the Registration's Common Stock issued and
outstanding as of April 3, 1999.
================================================================================
<PAGE> 2
SIPEX CORPORATION
FORM 10-Q
THREE MONTHS ENDED APRIL 3, 1999
INDEX
ITEM
NUMBER PAGE
- ------ ----
Part I: Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets at
April 3, 1999 and December 31, 1998..................... 3
Condensed Consolidated Statements of Operations
for the three months ended April 3, 1999 and
March 28, 1998 ......................................... 4
Condensed Consolidated Statements of Cash Flows
for the three months ended April 3, 1999 and
March 28, 1998.......................................... 5
Notes To Condensed Consolidated Financial
Statements............................................. 6-7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. ................. 7-10
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................................................ *
Item 5. Other Information...................................... *
Item 6. Exhibits and Reports on Form 8-K....................... 11
Exhibit 11.1 Computation of Earnings Per Common Share.. 11
Exhibit 27 Financial Data Schedule..................... 11
Signatures................................................................ 12
- ---------------
* 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)
<TABLE>
<CAPTION>
APRIL 3, DECEMBER 31,
1999 1998
(UNAUDITED) (AUDITED)
----------- ------------
<S> <C> <C>
ASSETS:
Current Assets
Cash and cash equivalents.............................. $ 11,020 $17,810
Short-term investment securities....................... 4,978 7,981
Accounts receivable, less allowances of $516 and $449
at April 3, 1999 and December 31, 1998,
respectively.......................................... 12,771 12,862
Inventories............................................ 18,245 16,682
Deferred income taxes-current.......................... 3,523 3,523
Prepaid expenses....................................... 1,577 1,224
-------- -------
Total current assets.............................. 52,114 60,082
Property, plant, and equipment, net......................... 12,302 10,306
Restricted cash equivalent and securities................... 33,658 24,261
Deferred income taxes....................................... 4,741 4,741
Other assets................................................ 149 106
======== =======
Total assets...................................... $102,964 $99,496
======== =======
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current Liabilities
Current portion of long term debt...................... $ 4 $ 8
Accounts payable....................................... 3,510 3,560
Accrued expenses....................................... 3,776 3,218
-------- -------
Total current liabilities......................... 7,290 6,786
-------- -------
Shareholders' Equity:
Preferred stock, $.01 par value, 1,000,000 shares
authorized and no shares issued or outstanding at
April 3, 1999 and December 31, 1998, respectively..... -- --
Common stock, $.01 par value, 40,000,000 shares
authorized and 18,055,868 and 17,979,812 shares issued
and outstanding at April 3, 1999 and December 31,
1998, respectively.................................... 180 180
Additional paid-in capital............................. 102,989 102,704
Accumulated deficit.................................... (7,562) (10,229)
Accumulated other comprehensive income................. 67 55
-------- -------
Total shareholders' equity........................ 95,674 92,710
-------- -------
Total liabilities and shareholders' equity........ $102,964 $99,496
======== =======
</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>
APRIL 3, MARCH 28,
1999 1998
-------- ---------
<S> <C> <C>
Net sales................................................... $16,179 $16,184
Cost of sales............................................... 8,018 8,006
------- -------
Gross profit........................................... 8,161 8,178
------- -------
Operating Expenses
Research and development............................... 1,788 1,478
Marketing and selling.................................. 1,794 1,593
General and administrative............................. 979 763
------- -------
Total operating expenses.......................... 4,561 3,834
------- -------
Income from operations...................................... 3,600 4,344
Other income (expense)...................................... 496 456
------- -------
Income before income taxes.................................. 4,096 4,800
Income tax expense.......................................... 1,434 --
======= =======
Net income.................................................. $ 2,662 $ 4,800
======= =======
Net income per common share-basic........................... $ 0.15 $ 0.27
======= =======
Net income per common share-assuming dilution............... $ 0.14 $ 0.26
======= =======
Weighted average common shares outstanding-basic............ 18,024 17,750
======= =======
Weighted average common shares outstanding-assuming
dilution.................................................. 18,667 18,796
======= =======
</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>
THREE MONTHS ENDED
-----------------------
APRIL 3, MARCH 28,
1999 1998
-------- ---------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income............................................. $ 2,662 $ 4,800
Adjustments to reconcile net income to net cash used in
operating activities
Allowance for receivables.............................. 10 12
Depreciation and amortization.......................... 498 504
Loss on disposal of assets............................. 53 --
Changes in current assets and liabilities:
(Increase) decrease in accounts receivable........ 80 (3,448)
Increase in inventories........................... (1,563) (3,217)
(Increase) decrease in prepaid expenses........... (352) 382
Increase in accrued taxes......................... 1,433 --
Increase in other assets.......................... (43) --
Increase (decrease) in accounts payable........... (50) 311
Increase (decrease) in accrued expenses........... (875) --
Increase in restricted cash equivalents and
securities...................................... (9,397) --
------- --------
Net cash used in operating activities....................... (7,544) (656)
------- --------
INVESTING ACTIVITIES:
Proceeds from maturity of investment securities........ 53,557 134,127
Purchase of investment securities...................... (50,554) (128,027)
Purchase of property, plant, and equipment............. (2,547) (1,483)
------- --------
Net cash provided by investing activities............ 456 4,617
------- --------
FINANCING ACTIVITIES:
Proceeds from issuance of common stock................. 285 376
Payment of capital lease obligations................... (4) (20)
------- --------
Net cash provided by financing activities............ 281 356
Effect of foreign currency translation adjustments..... 17 (58)
------- --------
Increase (decrease) in cash and cash equivalents....... (6,790) 4,258
Cash and cash equivalents, beginning of period......... 17,810 23,887
======= ========
Cash and cash equivalents, end of period.................... $11,020 $ 28,145
======= ========
</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, 1998 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 three month period ended
April 3, 1999 are not necessarily indicative of the results to be expected for
the full fiscal year.
2. FACILITY EXIT COSTS
In the fourth quarter of 1998, management of the Company and the Board of
Directors approved a plan to close its current manufacturing facility in
Milpitas, California and its sales office in France. As part of the plan, the
Company will be vacating the current leased facility in Milpitas and moving
operations to a new facility in Milpitas. Total estimated costs of $938,000
associated with the closure of the facility include $220,000 for rent, real
estate taxes, electricity, heat and water expenses for an estimated six month
period after the building is vacated and until it can be sub-leased or sold. The
balance of $718,000 represented charges to operations in 1998 for the write-down
to net realizable value of less efficient and duplicate machinery and equipment
not needed in the combined restructured manufacturing operations. Additionally,
the Company's plan includes the closure of its French sales operation and
relocation of these activities to the Company's new site in Belgium. As a result
of this action, the Company recorded $200,000 of facility exit costs, in the
fourth quarter of 1998, related to severance and other related employee benefit
costs. As of April 3, 1999, approximately $200,000 of the $1.138 million of
costs remain to be paid.
3. RESTRICTED CASH AND CASH EQUIVALENTS AND INVESTMENT SECURITIES
Restricted cash and cash equivalents and investment securities represents
amounts pledged for an operating lease which the Company entered into for the
construction and lease of a new wafer fabrication facility in Milpitas,
California. The lease agreement is for a five-year period, including a one-year
construction period.
4. NEW ACCOUNTING STANDARDS
The AICPA Accounting Standards Executive Committee recently issued
Statement of Position ("SOP") 98-1, Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use. This statement requires that
certain costs related to the development or purchase of internal-use software be
capitalized and amortized over the estimated useful life of the software, and is
effective for fiscal years beginning after December 15, 1998. The statement also
requires that costs related to the preliminary project stage and post
implementation/operations stage in an internal-use computer software development
project be expensed as incurred. The Company will comply with the provisions of
SOP 98-1 in fiscal 1999. The adoption of this SOP did not have a material impact
on the Company's financial position or results of operations.
The AICPA Accounting Standards Executive Committee recently issued SOP
98-5, Reporting on the Costs of Start-Up Activities. This statement requires
that costs incurred during start-up activities, including organization costs, be
expensed as incurred, and is effective for fiscal years beginning after December
15, 1998. The Company will comply with the provisions of SOP 98-5 in fiscal
1999. The adoption of this SOP had no impact on the Company's financial position
or results of operations.
6
<PAGE> 7
3 NET INCOME PER SHARE
Net income per share-basic is based upon the weighted average number of
common shares outstanding. Income per share is based upon the weighted average
number of common equivalent shares outstanding assuming dilution. Common
equivalent shares, consisting of outstanding stock options, are included in the
per share calculations where the effect of their inclusion would be dilutive.
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") designs, manufactures and markets high
performance and high value added analog integrated circuits using standard
BiCmos and dielectrically isolated BiCmos technologies. Analog integrated
circuits address a wide range of real-world signal processing applications
associated with such naturally occurring physical phenomena as temperature,
pressure, weight, position, light and sound. These circuits play a fundamental
and important role in coupling the real world to the digital computer and vice
versa. The Company's products include single, dual and multi-protocol interface
circuits, data converters, electroluminescent driver circuits, low power and
high voltage application specific circuits and power management products.
RESULTS OF OPERATIONS
The table below presents the statement of operations for the three months
ended April 3, 1999 and March 28, 1998 as a percentage of net sales and provides
the percentage increase of such items comparing the interim periods ended April
3, 1999 to the corresponding period from the prior fiscal year.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
---------------------------------
PERCENTAGE
APRIL 3, MARCH 28, INCREASE
1999 1998 (DECREASE)
-------- --------- ----------
<S> <C> <C> <C>
Net sales................................................. 100% 100% 0.0%
Cost of sales............................................. 49.6 49.5 0.2
---- ---- ------
Gross profit.............................................. 50.4 50.5 (0.2)
---- ---- ------
Operating expenses
Research and development............................. 11.0 9.1 21.0
Marketing and selling................................ 11.1 9.8 12.6
General and administrative........................... 6.1 4.7 28.3
---- ---- ------
Total operating expenses........................ 28.2 23.6 19.0
---- ---- ------
Operating income.......................................... 22.2 26.9 (17.1)
Other income (expense).................................... 3.1 2.8 8.8
---- ---- ------
Income before income taxes................................ 25.3 29.7 (14.7)
Income tax expense........................................ 8.9 0.0 100.0
---- ---- ------
Net income................................................ 16.4% 29.7% (44.5%)
==== ==== ======
</TABLE>
Net sales for the first quarter of 1999 remained level at $16.2 million, as
compared to the same period in the previous year. International sales increased
19% over the prior year quarter. Gains in Europe, Japan and the rest of Asia
were offset by a decrease in U.S. sales from the prior year quarter. Sales into
domestic markets were down 11%, primarily due to a reduction in sales into the
U.S. distribution channel. For the first quarter of 1999, U.S. sales and
international sales represented approximately 56% and 44 % of total net sales,
7
<PAGE> 8
respectively. The Company's major end-markets are Networking/Data
Communications, Consumer Communications, and Aerospace/Military.
Gross profit for the first quarter of 1999 was stable at $8.2 million, as
compared to the same period in the previous year. As a percentage of net sales,
gross profit decreased slightly to 50.4% for the first quarter of 1999, from
50.5% in the comparable period in the prior year primarily due to manufacturing
variances associated with the start-up of our new wafer fab and lower average
selling prices.
Research and development expenses for the first quarter of 1999 increased
$310,000 or 21.0% as compared to the same period in the previous year. The
increase in spending was due to salary and other expenses relating to the hiring
of additional engineering personnel, and expenses associated with the
development of new products and process development.
Marketing and selling expenses increased 12.6% to $1.8 million for the
first quarter of 1999 as compared with $1.6 million for the same period of the
previous year. The increase was due primarily to higher costs associated with
marketing, advertising programs and increased staffing. As a percentage of net
sales, marketing and selling expenses for the first quarter of 1999 increased to
11.1% as compared to 9.8% for the previous year due to personnel compensation
and advertising expenses increasing at a higher rate than sales growth.
General and administrative expenses increased by $216,000 for the first
quarter of 1999 as compared to the same period of the previous year. The
increase in spending for the first quarter of 1999 as compared to the same
period a year ago was due to investments in infrastructure to enhance the
Company's management information systems and hiring additional IT personnel. As
a percentage of net sales, general and administrative expenses increased to 6.1%
for the first quarter of 1999, an increase from the 4.7% for the comparable
period of the previous year.
Other income/expense for the first quarter of 1999 consists primarily of
interest income on short-term investment securities. For the first quarter of
1999 other income/expense improved by $40,000 reflecting income of $496,000 as
compared to income of $456,000 for the same period in the previous year.
LIQUIDITY AND CAPITAL RESOURCES.
At April 3, 1999, the Company had working capital of $45 million and
available funds of $16 million consisting of cash, cash equivalents and
short-term U.S. Government-backed investments. In addition, there is $33.7
million of restricted cash and cash equivalents and investment securities
representing amounts pledged for an operating lease which the Company entered
into for the construction and lease of a new wafer fabrication facility in
Milpitas, California. The lease agreement is for a five-year period, including a
one-year construction period. The Company anticipates that the available funds
and cash provided from operations will be sufficient to meet cash and working
capital requirements through at least the end of 1999.
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 and
analysis 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, 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 introductions and patent protection of existing products are critical
factors for future sales growth and sustained profitability.
8
<PAGE> 9
Other important factors that could cause actual results to differ
materially from those predicted include overall economic conditions, such as
currency and other economic issues affecting Asia and other countries, demand
for electronic products and semiconductors generally, demand for the end-user
products for which the Company's semiconductors are suited, timely availability
of raw material, equipment, supplies and services, unanticipated manufacturing
problems, technological and product development risks, competitors' actions, and
other risk factors described in the Company's filings with the Securities and
Exchange Commission.
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, 1998. 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 READINESS DISCLOSURE STATEMENT
The Year 2000 issue results from computer programs written using two digits
rather than four to define the applicable year. Any of the Company's internal
computer programs that have date-sensitive software may recognize a date using
"00" as the year 1900 rather than the Year 2000. This could result in a system
failure or miscalculations causing disruptions of operations, including, among
other things, a temporary inability to process transactions, send invoices, or
engage in similar normal business activities.
The Company has assessed its information technology systems and non-IT
systems (such as building security, voice mail, telephone and other systems
containing embedded microprocessors) and has determined the nature and extent of
the work required, if any, to make these internal systems Year 2000 compliant.
In the third quarter of fiscal 1998, the Company selected new enterprise and
manufacturing software systems which are Year 2000 compliant and began
implementation of these systems in the fourth quarter of 1998. Implementation is
scheduled to be fully complete by September 1999. This work is on schedule
through the first quarter of 1999. The Company's business is dependent upon its
information systems which are an integral part of all major business processes.
As the Company progresses through the implementation of these critical
operational and logistical modules, there is a risk that these implementations
could be delayed, could experience difficulties or in fact may not be successful
and could adversely affect future results of operations and cash flows. The
Company's current enterprise and manufacturing system is being upgraded to
become Year 2000 compliant in the second quarter of 1999 and will remain in
place until the new system is fully operational. In addition, the Company's
semiconductor manufacturing and payroll systems are being updated and are
expected to be Year 2000 compliant by September 1999. Future expenditures on the
general upgrade of internal computer systems are estimated to be $2 million, a
portion of which would be related Year 2000 compliance. The majority of these
expenditures will be capitalized in 1999 to the extent in which they relate to
the costs of implementation of new systems. Year 2000 remediation costs will be
expensed as incurred.
The Company has conducted a written survey of its foundries and other
suppliers of products and services with which it has a material relationship in
order to identify and assess their Year 2000 readiness and compliance, and any
negative impacts that any non-compliance could have on the Company. In addition,
the Company reviews Year 2000 issues at key suppliers as part of regularly
scheduled visits. Based upon the survey responses, the Company found all of
these principal suppliers to be Year 2000 compliant. Although management
believes the Company's systems will be Year 2000 compliant, the failure of the
Company's suppliers to address the Year 2000 issue could result in disruption to
the Company's operations and have a significant adverse impact on its results of
operations, the extent of which the Company has not yet estimated. In addition,
the Company continues to work with its customers to identify potential Year 2000
issues with its customers' products. Many of the Company's key customers are
Fortune 500 companies, are sensitive to Year 2000 issues and are expected to be
Year 2000 compliant. However, the Company continues to survey its customers and
monitor their progress in ensuring Year 2000 compliance. The Company is not
actively engaged in preparing contingency plans in the event that key customers
or suppliers fail to become Year 2000 compliant. However, the Company, in the
ordinary course of business, seeks to expand its customer base to
9
<PAGE> 10
lessen dependence on any one customer for a significant portion of its revenues,
and seeks second sources of supply for its key products and services where
appropriate.
At this time, the Company believes that its most reasonably likely worst
case Year 2000 scenario is that it will be unable to successfully complete the
implementation of its enterprise and manufacturing systems discussed above.
However, the Company has developed contingency plans for this risk and continues
to develop further contingency plans for both mission critical and non-mission
critical systems as it identifies the Year 2000 risks.
Various statements in this discussion of Year 2000 issues are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements include statements of the
Company's expectations, statements with regard to schedules and expected
completion dates and statements regarding expected Year 2000 compliance. These
forward-looking statements are subject to various risk factors which may
materially affect the Company's efforts to achieve Year 2000 compliance. These
risk factors include the inability of the Company to complete the plans and
modifications that it has identified, the wide variety of information systems
and components, both hardware and software, that must be evaluated, the variety,
number and complexity of equipment used in the Company's operations and the
large number of vendors and customers with which the Company interacts. The
Company's assessments of the effects of Year 2000 on the Company are based, in
part, upon information received from third parties and the Company's reasonable
reliance on that information. Therefore, the risk that inaccurate information is
supplied by third parties upon which the Company reasonably relied must be
considered as a risk factor that might affect the Company's Year 2000 efforts.
The Company is attempting to reduce the risks by utilizing an organized
approach, extensive testing, and allowance of ample contingency time to address
issues identified by tests.
10
<PAGE> 11
PART II: OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibit 11.1 Computation of Earnings Per Common Share
Exhibit 27 Financial Data Schedule
b) Reports on Form 8-K
None
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.
SIPEX CORPORATION
BY /s/ FRANK R. DIPIETRO
----------------------------------
FRANK R. DIPIETRO
EXECUTIVE VICE PRESIDENT, FINANCE &
CHIEF FINANCIAL OFFICER
(DULY AUTHORIZED OFFICER &
PRINCIPAL FINANCIAL OFFICER)
DATE: May 11, 1999
12
<PAGE> 1
Exhibit 11.1
Computation of Shares Used in Computing
Net Income Per Share
<TABLE>
<CAPTION>
Three Months Ended
----------------------------
April 3, March 28,
1999 1998
-------- ----------
<S> <C> <C>
Common shares, beginning of period 17,979,812 17,711,422
Common stock equivalents 2,070,166 1,762,315
Treasury stock buyback (1,427,271) (715,635)
Weighted average shares issued 44,645 38,178
========== ==========
18,667,352 18,796,280
========== ==========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET AS OF APRIL 3, 1999 AND FROM THE INTERIM
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED APRIL
3, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> FEB-03-1999
<PERIOD-END> APR-03-1999
<CASH> 11,020
<SECURITIES> 4,978
<RECEIVABLES> 13,287
<ALLOWANCES> 516
<INVENTORY> 18,245
<CURRENT-ASSETS> 52,114
<PP&E> 37,814
<DEPRECIATION> 25,512
<TOTAL-ASSETS> 102,964
<CURRENT-LIABILITIES> 7,290
<BONDS> 0
0
0
<COMMON> 180
<OTHER-SE> 95,494
<TOTAL-LIABILITY-AND-EQUITY> 102,964
<SALES> 0
<TOTAL-REVENUES> 16,179
<CGS> 0
<TOTAL-COSTS> 8,018
<OTHER-EXPENSES> 4,561
<LOSS-PROVISION> 13
<INTEREST-EXPENSE> 496
<INCOME-PRETAX> 4,096
<INCOME-TAX> 0
<INCOME-CONTINUING> 4,096
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,096
<EPS-PRIMARY> 0.15
<EPS-DILUTED> 0.14
</TABLE>
