<PAGE>
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: May 31, 1997
[_] 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: 0-21367
-------
DATA TRANSLATION, INC.
----------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 04-3332230
------------------------------- -------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification
organization or incorporation) Number)
100 Locke Drive
Marlborough, Massachusetts
------------------------------------------------------------
(Address of principal executive offices)
01752
------------------------------------------------------------
(Zip code)
(508) 481-3700
------------------------------------------------------------
(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
--------- ---------
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Common Stock, par value $.01 per share 2,026,531 shares
-------------------------------------- --------------------------------
Class Outstanding at June 30, 1997
<PAGE>
Page 2 of 12
DATA TRANSLATION, INC. AND SUBSIDIARIES
INDEX
-----
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Part I - Financial Information:
Consolidated Balance Sheet as of May 31, 1997 and
Pro Forma Consolidated Balance Sheet as of November 30, 1996.............................3
Consolidated Statements of Operations for the Three and Six Months
Ended May 31, 1997 and Pro Forma Consolidated Statements of
Operations for the Three and Six Months Ended May 31, 1996...............................4
Consolidated Statement of Stockholders' Equity
For the Six Months Ended May 31, 1997....................................................5
Consolidated Statement of Cash Flows for the Six Months
Ended May 31, 1997 and Pro Forma Consolidated
Statement of Cash Flows for the Six Months Ended
May 31, 1996.............................................................................6
Notes to Consolidated Financial Statements ..................................................7-8
Management's Discussion and Analysis of
Financial Condition and Results of Operations ...........................................9-10
Part II - Other Information......................................................................11
Signatures.......................................................................................12
</TABLE>
<PAGE>
Page 3 of 12
PART I. FINANCIAL INFORMATION
DATA TRANSLATION, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
Pro Forma
May 31, November 30,
1997 1996
------------ -------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 4,987,000 $ 8,828,000
Accounts receivable, net of reserves of
$262,000 in 1997 and $132,000 in 1996 3,787,000 2,741,000
Due from Media 100 Inc. 265,000 --
Inventories 1,224,000 1,490,000
Prepaid expenses 838,000 690,000
------------ -------------
Total current assets 11,101,000 13,749,000
Equipment and Leasehold Improvements, net 2,297,000 2,352,000
Other Assets - net 235,000 260,000
------------ -------------
Total Assets $ 13,633,000 $ 16,361,000
============ =============
Current Liabilities:
Accounts payable $ 428,000 $ 377,000
Due to related party 546,000 --
Accrued expenses 1,995,000 1,939,000
------------ -------------
Total current liabilities 2,969,000 2,316,000
Net liabilities of discontinued operations 1,424,000 1,424,000
Deferred Income Taxes 3,000 3,000
Stockholders' Equity:
Preferred Stock, $.01 par value,
Authorized - 5,000,000 shares, none issued -- --
Common Stock, $.01 par value,
Authorized - 30,000,000 shares, issued -
2,026,131 in 1997 and 2,022,021 in 1996 pro forma 20,000 20,000
Capital in excess of par value 12,634,000 12,629,000
Retained earnings (3,391,000) --
Cumulative translation adjustment (26,000) (31,000)
------------ -------------
Total stockholders' equity 9,237,000 12,618,000
------------ -------------
Total Liabilities and Stockholders' Equity $ 13,633,000 $ 16,361,000
============ =============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
Page 4 of 12
DATA TRANSLATION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
Pro Forma Pro Forma
May 31, May 31, May 31, May 31,
1997 1996 1997 1996
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Net sales $ 6,163,000 $ 5,064,000 $ 11,219,000 $ 10,758,000
Cost of sales 2,980,000 1,766,000 5,426,000 3,955,000
-------------- -------------- -------------- --------------
Gross profit 3,183,000 3,298,000 5,793,000 6,803,000
Research and development expenses 947,000 775,000 1,916,000 1,674,000
Selling and marketing expenses 3,365,000 1,941,000 6,084,000 3,835,000
General and administrative expenses 668,000 448,000 1,307,000 880,000
-------------- -------------- -------------- --------------
Operating income (loss) from continuing
operations (1,797,000) 134,000 (3,514,000) 414,000
Interest income 78,000 136,000 171,000 274,000
Other expense, net (14,000) (4,000) (48,000) (47,000)
-------------- -------------- -------------- --------------
Income (loss) from continuing operations (1,733,000) 266,000 (3,391,000) 641,000
before tax provision
Tax provision -- 44,000 -- 125,000
-------------- -------------- -------------- --------------
Income (loss) from continuing operations (1,733,000) 222,000 (3,391,000) 516,000
Loss from discontinued operations -- (372,000) -- (334,000)
-------------- -------------- -------------- --------------
Net income (loss) $ (1,733,000) $ (150,000) $ (3,391,000) $ 182,000
============== ============== ============== ==============
Income (loss) from continuing operations per
share $ (0.86) $ 0.11 $ (1.68) $ 0.24
Loss from discontinued operations per share -- (0.19) -- (0.16)
-------------- -------------- -------------- --------------
Net income (loss) per common and common
equivalent share $ (0.86) $ (0.08) $ (1.68) $ 0.09
============== ============== ============== ==============
Weighted average number of common
and common equivalent shares outstanding 2,026,000 1,993,000 2,024,000 2,131,000
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
Page 5 of 12
DATA TRANSLATION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Common Stock
$.01 Par Value Capital in Cumulative Total
-----------------------------
Issued Excess of Retained Translation Stockholders'
Shares Amount Par Value Earnings Adjustment Equity
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance, November 30, 1996 - $ - $ - $ - $ (31,000) $ (31,000)
Stock dividend (Note 9) 2,022,021 20,000 12,629,000 - - 12,649,000
Proceeds from stock plans 4,110 - 5,000 - - 5,000
Translation adjustment - - - - 5,000 5,000
Net loss - - - (3,391,000) - (3,391,000)
----------------------------------------------------------------------------------------------------
Balance, May 31, 1997 2,026,131 $ 20,000 $ 12,634,000 $ (3,391,000) $ (26,000) $ 9,273,000
====================================================================================================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
Page 6 of 12
DATA TRANSLATION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended
Pro Forma
May 31, May 31,
1997 1996
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (3,391,000) $ 182,000
Adjustments to reconcile net income (loss) to
net cash used in operating activities-
Depreciation and amortization 486,000 483,000
Deferred income taxes - 3,000
Change in assets and liabilities-
Accounts receivable (1,046,000) 499,000
Due from Media 100 Inc. (265,000) -
Inventories 266,000 (310,000)
Prepaid expenses (148,000) (750,000)
Net assets of discontinued operations - 443,000
Accounts payable 51,000 423,000
Due to related party 546,000 -
Accrued expenses 56,000 (84,000)
------------ ------------
Net cash used in operating activities $ (3,445,000) $ 889,000
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of equipment and leasehold improvements (372,000) (839,000)
Increase in other assets (30,000) (214,000)
------------ ------------
Net cash used in investing activities $ (402,000) $ (1,053,000)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings from bank - (39,000)
Proceeds from stock plans 5,000 -
Increase in investment by Media 100 Inc. - 371,000
------------ ------------
Net cash provided by financing activities $ 5,000 $ 332,000
------------ ------------
EXCHANGE RATE EFFECTS 1,000 (168,000)
------------ ------------
NET DECREASE IN CASH AND CASH EQUIVALENTS $ (3,841,000) $ -
CASH AND CASH EQUIVALENTS, beginning of period 8,828,000 -
------------ ------------
CASH AND CASH EQUIVALENTS, end of period $ 4,987,000 $ -
============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
Page 7 of 12
DATA TRANSLATION, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
In the opinion of management, these unaudited consolidated
financial statements and disclosures reflect all adjustments necessary for fair
presentation. The results of operations for the interim periods are not
necessarily indicative of the results to be expected for the full year.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to the rules and regulations
of the Securities and Exchange Commission. These consolidated condensed
financial statements should be read in conjunction with the consolidated
financial statements and the notes thereto included in the Company's latest
audited financial statements, which are contained in the Company's 1996 Annual
Report on Form 10-K, filed with the Securities and Exchange Commission on
February 28, 1997.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
2. Cash Equivalents
Cash equivalents are carried at cost which approximates market
value and have maturities of less than three months. Cash equivalents include
money market accounts, overnight time deposits, and U.S. Treasury bills.
3. Inventories
Inventories are stated at the lower of first-in, first-out (FIFO)
cost or market and consist of the following:
<TABLE>
<CAPTION>
May 31, November 30,
1997 1996
---- ----
<S> <C> <C>
Raw material $ 739,000 $ 904,000
Work-in-process 150,000 181,000
Finished goods 335,000 405,000
--------- ---------
$ 1,224,000 $ 1,490,000
========= =========
</TABLE>
Work-in-process and finished goods inventories include material, labor and
manufacturing overhead. Management performs periodic reviews of inventory and
disposes of items not required by their manufacturing and marketing plan.
4. Net Income (Loss) Per Common Share
Net income per common share is determined by dividing net income
by the weighted average number of common and common equivalent shares
outstanding during each period. Net loss per common share is determined by
dividing net loss by the weighted average number of shares outstanding during
the period. Common equivalent shares have not been included in loss years, as
such amounts would be antidilutive. Common equivalent shares have been
calculated in accordance with the treasury stock method and are included for all
periods where their effect is dilutive. Fully diluted net income (loss) per
share has not been separately presented, as the amounts would not be materially
different from net income per share.
5. Contingencies
From time to time the Company is involved in disputes and/or
litigation encountered in its normal course of business. The Company does not
believe that the ultimate impact of the resolution of such outstanding matters
will have a material effect on the Company's financial condition or results of
operations.
<PAGE>
Page 8 of 12
DATA TRANSLATION, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6. Capitalized Software Development Costs
The Company capitalizes certain computer software development
costs. Such costs, net of accumulated amortization, were approximately $231,000
and $256,000 as of May 31, 1997 and November 30, 1996, respectively and are
included in other assets. These costs are amortized on a straight-line basis
over two years which approximates the life of the product. Amortization expense,
included in cost of goods sold, was approximately $55,000 and $25,000 for the
six months ended May 31, 1997 and 1996, respectively.
7. Income Taxes
For the period ended May 31, 1996, the income tax provision in the
accompanying consolidated statement of operations has been calculated on a
separate tax return basis. Prior to the Company's spin-off from Media 100 Inc.
("Media") on December 2, 1996 (the "Spin-off"), the Company filed its return as
part of a consolidated group with Media.
8. Discontinued Operations
On November 11, 1996, Media sold certain assets of its networking
distribution business, primarily inventories, equipment and its ongoing
business, for approximately $1.3 million. The balance of Media's networking
distribution business was contributed to the Company in connection with the
Spin-off. The Company is in the process of discontinuing and winding-up the
remainder of such business.
The components of net liabilities of discontinued operations
included in the accompanying consolidated balance sheets at May 31, 1997 and
November 30, 1996 follow:
<TABLE>
<CAPTION>
May 31, November 30,
1997 1996
---- ----
<S> <C> <C>
Accounts receivable, net $ 267,000 $ 1,563,000
Inventories -- 1,159,000
Prepaid expenses -- 433,000
Equipment and leasehold improvements, net -- 68,000
Accounts payable (368,000) (1,450,000)
Borrowings from a bank (1,018,000) (1,577,000)
Accrued expenses (305,000) (1,620,000)
----------- -----------
Net liabilities of discontinued operations $(1,424,000) $(1,424,000)
=========== ===========
</TABLE>
9. Pro Forma Results
The pro forma consolidated balance sheet as of November 30, 1996
reflects the financial position of the Company adjusted for a cash contribution
from Media 100 Inc. and the capitalization of the Company in connection with the
Spin-off effective December 2, 1996. The consolidated statement of stockholders'
equity is also reflective of a stock dividend in connection with the Spin-off of
the Company. The pro forma statement of operations and the consolidated
statement of cash flows for the six months ended May 31, 1996 reflects the
results of the Company as a wholly owned subsidiary of Media 100 Inc. and does
not necessarily reflect the actual results of operations had the Company been a
separate, independent company during the period. Included are certain
allocations of general corporate expenses which were not directly related to the
Company's business.
10. New Accounting Standard
In March 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standard ("SFAS") No. 128, Earnings Per Share.
SFAS No. 128 establishes standards for computing and presenting earnings per
share and applies to entities with publicly held common stock or potential
common stock. This statement is effective for fiscal years ending after
December 15, 1997 and early adoption is not permitted. When adopted, the
statement will require restatement of prior years' earnings per share. The
Company will adopt this statement for its fiscal year ended November 30, 1998.
The Company believes that the adoption of SFAS No. 128 will not have a material
effect on its financial statements.
<PAGE>
Page 9 of 12
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Forward Looking Statements
This report 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 as a result of the following
risk factors: dependence on new products, impact of competitive products,
ability of the Company to meet its future capital requirements, ability to
attract qualified personnel, the absence of history as an independent company,
and the dependence on proprietary technology.
Results of Operations
The following table sets forth certain consolidated statement of operations
data as a percentage of total net sales.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------ ----------------
May 31, May 31,
------- -------
Pro Forma Pro Forma
--------- ---------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales........................................................ 100.0 100.0 100.0 100.0
Gross margin..................................................... 51.7 65.1 51.6 63.2
Research and development expenses................................ 15.4 15.3 17.1 15.6
Selling and marketing expenses................................... 54.6 38.3 54.2 35.6
General and administrative expenses.............................. 10.8 8.8 11.6 8.2
------ ------ ------ ------
Income (loss) from operations.................................... (29.1) 2.7 (31.3) 3.8
Interest (expense) income and other, net......................... 1.0 2.6 1.1 2.2
------ ------ ------ ------
Income (loss) from continuing operations before provision
(benefit) for income taxes..................................... (28.1) 5.3 (30.2) 6.0
Provision (benefit) for income taxes............................. 0.0 0.9 0.0 1.2
------ ------ ------ ------
Income (loss) from continuing operations......................... (28.1) 4.4 (30.2) 4.8
(Loss) income from discontinued operations....................... 0.0 (7.4) 0.0 (3.1)
------ ------ ------ ------
Net income (loss)................................................ (28.1)% (3.0)% (30.2)% 1.7%
====== ====== ====== ======
</TABLE>
Comparison of Second Fiscal Quarter of 1997 to Second Fiscal Quarter of 1996:
Net sales for the fiscal quarter ended May 31, 1997 were $6,163,000, an
increase of 21.7% or $1,099,000 from the same period a year ago. The increase in
sales was attributable to shipments of the Company's Broadway(TM) product which
began shipping in the third fiscal quarter of 1996. Sales of the Company's data
acquisition and imaging products remained relatively flat from the same period
in fiscal 1996.
Gross margin for the fiscal quarter ended May 31, 1997 was 51.7%, compared
to 65.1% in the comparable quarter of the prior year. The decrease in gross
margin was the result of lower average selling prices and a less favorable
product mix.
The operating loss for the second fiscal quarter of 1997 was $1,797,000,
compared to operating income of $134,000 in the comparable period of the prior
year. An increase in operating expenses as well as the lower gross margins
contributed to this loss. Operating expenses increased $1,816,000 to 80.8% of
net sales compared to 62.4% in the comparable quarter of the prior year.
Research and development expenses were $947,000 or 15.4% of net sales compared
to $775,000 or 15.3% of net sales for the comparable period last year. The high
level of research and development expense is a result of the Company's continued
investment in Broadway, its MPEG based digital video product, as well as other
new products for the data acquisition and imaging markets. Sales and marketing
expenses were $3,365,000 or 54.6% of net sales compared to $1,941,000 or 38.3%
of net sales in the comparable quarter of the prior year. This increase was due
to the continued marketing promotion, advertising and sales channel development
for Broadway. General and administrative expenses were $668,000 or 10.8% of net
sales compared to $448,000 or 8.8% of net sales for the same period last year.
This year's general and administrative expenses are reflective of the Company on
a stand-alone basis compared to allocated expenses for fiscal 1996.
<PAGE>
Page 10 of 12
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)
The loss from continuing operations was $1,733,000 for the three months
ended May 31, 1997, compared to income from continuing operations of $222,000 in
the comparable period of fiscal 1996. The Company incurred a net loss of
$1,733,000 or $0.86 per share for the quarter ended May 31, 1997, compared to a
net loss of $150,000 or $0.08 per share for the same period in 1996. The prior
year results include a loss on discontinued operations of $372,000 or $0.19 per
share.
Comparison of the first six months of Fiscal 1997 to the first six months of
Fiscal 1996:
Net sales for the six months ended May 31, 1997 were $11,219,000, an
increase of 4.3% or $461,000 from the same period a year ago. The increase in
sales from the comparable period in the prior year was attributable to shipments
of the Broadway product as mentioned above. Sales from the Company's data
acquisition and imaging products have decreased from the same period in fiscal
1996 mainly due to a decline in sales of older, more mature products in addition
to lower average selling prices.
Gross margin for the six months ended May 31, 1997 was 51.6%, compared to
63.2% in the comparable period of the prior year. The decrease in gross margin
was the result of lower average selling prices and a less favorable product mix.
The operating loss for the first six months of fiscal 1997 was $3,514,000,
compared to operating income of $414,000 in the comparable period of the prior
year. An increase in operating expenses as well as the lower gross margins
contributed to this loss. Operating expenses increased $2,918,000 to 83.0% of
net sales compared to 59.4% from the same period a year ago. Research and
development expenses were $1,916,000 or 17.1% of net sales compared to
$1,674,000 or 15.6% of net sales for the comparable period last year. The higher
research and development expenses are a result of the Company's continued
investment in Broadway product development as well as other new products. Sales
and marketing expenses were $6,084,000 or 54.2% of net sales compared to
$3,835,000 or 35.6% of net sales in the comparable period of the prior year.
This increase was due mainly to the continued promotion, advertising and sales
channel development for Broadway. General and administrative expenses were
$1,307,000 or 11.6% of net sales compared to $880,000 or 8.2% of net sales for
the same period last year. This year's general and administrative expenses are
reflective of the Company on a stand-alone basis compared to allocated expenses
for fiscal 1996.
Loss from continuing operations was $3,391,000 for the six months ended May
31, 1997, compared to income from continuing operations of $516,000 in the
comparable period of fiscal 1996. The Company incurred a net loss of $3,391,000
or $1.68 per share for the six months ended May 31, 1997, compared to net income
of $182,000 or $0.09 per share for the same period in 1996. The prior year
results include a loss on discontinued operations of $334,000 or $0.16 per
share.
Liquidity and Capital Resources
During the first six months of fiscal 1997, there was a decrease in net
cash of $3,841,000. Net cash used in operations was $3,445,000 which included an
increase in accounts receivable of $1,046,000 and a net loss of $3,391,000
offset by an increase in due to related party of $546,000 and depreciation and
amortization of $486,000. The Company believes that it will be able to fund and
support a business plan which includes continuing investment in channel
development, promotion and product development for Broadway and other new
commercial products, as well as other product areas, for the balance of this
fiscal year.
<PAGE>
Page 11 of 12
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
a) The Annual Meeting of Stockholders of the Company was held on
May 14, 1997.
c) The matter voted upon at the meeting was the election of
Ellen W. Harpin for a three year term as a Class I Director.
The voting results were as follows:
1,738,885 votes FOR
31,641 votes WITHHELD
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
a) Exhibits
Exhibit
Number Description
------ -------------------------
27 Financial Data Schedule
b) Reports on Form 8-K
No reports were filed.
<PAGE>
Page 12 of 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.
Data Translation, Inc.
Date: July 10, 1997 By: /s/ Gary B. Godin
-------------------------
Gary B. Godin
Chief Financial Officer
<PAGE>
Exhibits
Exhibits
Number Description Page
--------------------------------------------------------
27 Financial Data Schedule
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-START> DEC-01-1996
<PERIOD-END> MAY-31-1997
<CASH> 4,987,000
<SECURITIES> 0
<RECEIVABLES> 3,787,000
<ALLOWANCES> 262,000
<INVENTORY> 1,224,000
<CURRENT-ASSETS> 11,101,000
<PP&E> 19,265,000
<DEPRECIATION> 16,968,000
<TOTAL-ASSETS> 13,633,000
<CURRENT-LIABILITIES> 2,969,000
<BONDS> 0
0
0
<COMMON> 20,000
<OTHER-SE> 9,217,000
<TOTAL-LIABILITY-AND-EQUITY> 13,633,000
<SALES> 11,219,000
<TOTAL-REVENUES> 11,219,000
<CGS> 5,426,000
<TOTAL-COSTS> 5,426,000
<OTHER-EXPENSES> 9,307,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,391,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,391,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,391,000)
<EPS-PRIMARY> (1.68)
<EPS-DILUTED> (1.68)
</TABLE>
