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 Quarter Ended September 27, 1997.
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934.
Commission File Number 1-13085
METRIKA SYSTEMS CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 33-0733537
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5788 Pacific Center Boulevard
San Diego, California 92121
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 622-1000
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.
Class Outstanding at September 27, 1997
---------------------------- ---------------------------------
Common Stock, $.01 par value 8,267,828
PAGE
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
METRIKA SYSTEMS CORPORATION
Consolidated Balance Sheet
(Unaudited)
Assets
September 27, December 28,
(In thousands) 1997 1996
------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents $ 43,626 $ 20,229
Available-for-sale investments, at quoted
market value (amortized cost of $9,269) 9,286 -
Accounts receivable, less allowances of
$819 and $440 12,752 10,896
Unbilled contract costs and fees 5,095 1,706
Inventories:
Raw materials and supplies 3,540 4,207
Work in process 2,540 1,230
Finished goods 992 910
Prepaid income taxes and other current
assets 2,236 1,457
-------- --------
80,067 40,635
-------- --------
Property, Plant, and Equipment, at Cost 14,763 15,956
Less: Accumulated depreciation and
amortization 4,254 3,856
-------- --------
10,509 12,100
-------- --------
Other Assets 777 926
-------- --------
Cost in Excess of Net Assets of Acquired
Companies (Note 2) 13,065 13,105
-------- --------
$104,418 $ 66,766
======== ========
2PAGE
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METRIKA SYSTEMS CORPORATION
Consolidated Balance Sheet (continued)
(Unaudited)
Liabilities and Shareholders' Investment
September 27, December 28,
(In thousands except share amounts) 1997 1996
------------------------------------------------------------------------
Current Liabilities:
Notes payable and current maturities of
long-term obligation $ 11,902 $ 11,578
Accounts payable 2,632 2,463
Accrued payroll and employee benefits 2,783 2,225
Accrued income taxes 2,399 597
Customer deposits 3,495 3,377
Accrued installation and warranty costs 2,290 1,350
Other accrued expenses 4,051 3,023
Due to parent company and affiliated companies 3,929 7,317
-------- --------
33,481 31,930
-------- --------
Accrued Pension Costs 4,435 4,752
-------- --------
Long-term Obligation 4,110 5,223
-------- --------
Shareholders' Investment (Note 3):
Common stock, $.01 par value, 25,000,000
shares authorized; 8,267,828 and
5,967,828 shares issued and outstanding 83 60
Capital in excess of par value 58,555 26,050
Retained earnings 4,083 298
Cumulative translation adjustment (339) (1,547)
Net unrealized gain on available-for-sale
investments 10 -
-------- --------
62,392 24,861
-------- --------
$104,418 $ 66,766
======== ========
The accompanying notes are an integral part of these consolidated
financial statements.
3PAGE
<PAGE>
METRIKA SYSTEMS CORPORATION
Consolidated Statement of Income
(Unaudited)
Three Months Ended
------------------------------
September 27, September 28,
(In thousands except per share amounts) 1997 1996
------------------------------------------------------------------------
Revenues $14,886 $13,584
------- -------
Costs and Operating Expenses:
Cost of revenues 7,618 7,382
Selling, general, and administrative expenses 3,837 3,267
Research and development expenses 953 752
------- -------
12,408 11,401
------- -------
Operating Income 2,478 2,183
Interest Income 770 1
Interest Expense (165) (274)
------- -------
Income Before Provision for Income Taxes 3,083 1,910
Provision for Income Taxes 1,240 764
------- -------
Net Income $ 1,843 $ 1,146
======= =======
Earnings per Share $ .22 $ .22
======= =======
Weighted Average Shares 8,268 5,193
======= =======
The accompanying notes are an integral part of these consolidated
financial statements.
4PAGE
<PAGE>
METRIKA SYSTEMS CORPORATION
Consolidated Statement of Income
(Unaudited)
Nine Months Ended
-----------------------------
September 27, September 28,
(In thousands except per share amounts) 1997 1996
------------------------------------------------------------------------
Revenues $41,611 $37,767
------- -------
Costs and Operating Expenses:
Cost of revenues 22,283 21,322
Selling, general, and administrative expenses 10,632 9,651
Research and development expenses 3,013 2,157
------- -------
35,928 33,130
------- -------
Operating Income 5,683 4,637
Interest Income 1,243 3
Interest Expense (605) (599)
------- -------
Income Before Provision for Income Taxes 6,321 4,041
Provision for Income Taxes 2,536 1,616
------- -------
Net Income $ 3,785 $ 2,425
======= =======
Earnings per Share $ .56 $ .47
======= =======
Weighted Average Shares 6,770 5,193
======= =======
The accompanying notes are an integral part of these consolidated
financial statements.
5PAGE
<PAGE>
METRIKA SYSTEMS CORPORATION
Consolidated Statement of Cash Flows
(Unaudited)
Nine Months Ended
-----------------------------
September 27, September 28,
(In thousands) 1997 1996
------------------------------------------------------------------------
Operating Activities:
Net income $ 3,785 $ 2,425
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 1,237 1,344
Provision for losses on accounts
receivable 274 -
Other noncash items 87 411
Changes in current accounts, excluding
the effects of acquisition:
Accounts receivable (1,843) (1,328)
Inventories and unbilled contract
costs and fees (3,857) 1,345
Other current assets (1,021) 417
Accounts payable 161 1,103
Other current liabilities 3,917 (1,109)
-------- --------
Net cash provided by operating activities 2,740 4,608
-------- --------
Investing Activities:
Acquisition (Note 2) (1,347) -
Purchases of available-for-sale investments (9,122) -
Purchases of property, plant, and equipment (358) (459)
Other 57 25
-------- --------
Net cash used in investing activities (10,770) (434)
-------- --------
Financing Activities:
Net proceeds from issuance of Company
common stock (Note 3) 32,528 -
Net transfers to parent company prior to
the capitalization of the Company - (1,120)
Decrease in due to parent company
and affiliated companies (2,274) (400)
Increase (decrease) in short-term
obligations 1,135 (1,889)
Repayment of long-term obligation (169) (593)
-------- --------
Net cash provided by (used in) financing
activities $ 31,220 $ (4,002)
-------- --------
6PAGE
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METRIKA SYSTEMS CORPORATION
Consolidated Statement of Cash Flows (continued)
(Unaudited)
Nine Months Ended
-----------------------------
September 27, September 28,
(In thousands) 1997 1996
------------------------------------------------------------------------
Exchange Rate Effect on Cash $ 207 $ (254)
-------- --------
Increase (Decrease) in Cash and Cash
Equivalents 23,397 (82)
Cash and Cash Equivalents at Beginning of
Period 20,229 1,302
-------- --------
Cash and Cash Equivalents at End of Period $ 43,626 $ 1,220
======== ========
Noncash Activities:
Fair value of assets of acquired company $ 2,380 $ -
Cash paid for acquired company (1,347) -
-------- --------
Liabilities assumed of acquired company $ 1,033 $ -
======== ========
The accompanying notes are an integral part of these consolidated
financial statements.
7PAGE
<PAGE>
METRIKA SYSTEMS CORPORATION
Notes to Consolidated Financial Statements
1. General
The interim consolidated financial statements presented have been
prepared by Metrika Systems Corporation (the Company) without audit and,
in the opinion of management, reflect all adjustments of a normal
recurring nature necessary for a fair statement of the financial position
at September 27, 1997, the results of operations for the three- and
nine-month periods ended September 27, 1997, and September 28, 1996, and
the cash flows for the nine-month periods ended September 27, 1997, and
September 28, 1996. Interim results are not necessarily indicative of
results for a full year.
The consolidated balance sheet presented as of December 28, 1996, has
been derived from the consolidated financial statements that have been
audited by the Company's independent public accountants. The consolidated
financial statements and notes are presented as permitted by Form 10-Q
and do not contain certain information included in the annual financial
statements and notes of the Company. The consolidated financial
statements and notes included herein should be read in conjunction with
the financial statements and notes included in the Company's Registration
Statement on Form S-1 (File No. 333-38371), filed with the Securities and
Exchange Commission.
2. Acquisition
On December 31, 1996, the Company acquired the assets, subject to
certain liabilities, of the Autometrics division of Svedala Industries
Inc. (Autometrics), for $1,347,000 in cash. Autometrics is a manufacturer
and marketer of on-line analysis instruments for the minerals-processing
industry.
The acquisition has been accounted for using the purchase method of
accounting and its results of operations have been included in the
accompanying financial statements from its date of acquisition. The cost
of the acquisition exceeded the estimated fair value of the acquired net
assets by $400,000, which is being amortized over 40 years. Allocation of
the purchase price was based on an estimate of the fair value of the net
assets acquired.
Based on unaudited data, the following table presents selected
financial information for the Company and Autometrics on a pro forma
basis, assuming the companies had been combined since the beginning of
1996.
Three Months Nine Months
Ended Ended
------------- -------------
(In thousands except September 28, September 28,
per share amounts) 1996 1996
--------------------------------------------------------------------
Revenues $14,398 $39,421
Net income 1,063 1,847
Earnings per share .20 .36
8PAGE
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METRIKA SYSTEMS CORPORATION
2. Acquisition (continued)
The pro forma results are not necessarily indicative of the actual
results that would have occurred had the acquisition of Autometrics been
made at the beginning of 1996.
3. Initial Public Offering
In June 1997, the Company sold 2,300,000 shares of its common stock
in an initial public offering at $15.50 per share for net proceeds of
$32,528,000. Following the initial public offering, Thermo Instrument
Systems Inc. owned approximately 60% of the Company's outstanding common
stock.
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations
Forward-looking statements, within the meaning of Section 21E of the
Securities Exchange Act of 1934, are made throughout this Management's
Discussion and Analysis of Financial Condition and Results of Operations.
For this purpose, any statements contained herein that are not statements
of historical fact may be deemed to be forward-looking statements.
Without limiting the foregoing, the words "believes," "anticipates,"
"plans," "expects," "seeks," "estimates," and similar expressions are
intended to identify forward-looking statements. There are a number of
important factors that could cause the results of the Company to differ
materially from those indicated by such forward-looking statements,
including those detailed under the caption "Risk Factors" included in the
Company's Registration Statement on Form S-1 (File No. 333-38371), filed
with the Securities and Exchange Commission.
Overview
The Company develops, manufactures, and markets on-line process
optimization systems that employ proprietary ultra high-speed advanced
scientific measurement technologies for applications in raw materials
analysis and finished materials quality control. The Company is a pioneer
in the development of process optimization systems that provide
real-time, nondestructive analysis of the composition of raw materials in
basic materials production processes, including coal, cement, and
minerals. The Company also manufactures advanced systems that are used to
measure and control parameters such as material thickness, coating
thickness, and coating weight in web-type materials, such as metal strip,
rubber, and plastic foils. Customers use these systems to improve product
quality and consistency, lower material costs, reduce energy consumption,
and minimize waste.
The Company intends to supplement its internal growth with strategic
acquisitions of complementary businesses. There can be no assurance that
such businesses will be available at prices attractive to the Company. On
December 31, 1996, the Company acquired the assets, subject to certain
liabilities, of the Autometrics division of Svedala Industries Inc.
(Autometrics), a manufacturer and marketer of on-line analysis
instruments for the minerals-processing industry.
9PAGE
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METRIKA SYSTEMS CORPORATION
Overview (continued)
A significant portion of the Company's sales are of large systems,
the timing of which can lead to variability in the Company's quarterly
revenues and income. In addition, in 1996, approximately 56% of the
Company's revenues originated outside the U.S. and approximately 26% of
the Company's revenues were exports from the U.S. Revenues originating
outside the U.S. represent revenues of the Company's on-line finished
materials quality control business. The operations of the on-line
finished materials quality control business are located in Germany, the
United Kingdom, and France, which principally sell in their local
currencies. Exports from the Company's U.S. operation are denominated in
U.S. dollars. The Company generally seeks to charge its customers in the
same currency as its operating costs. However, the Company's financial
performance and competitive position can be affected by currency exchange
rate fluctuations. Since the operations of the on-line finished materials
quality control business are conducted in Europe, principally Germany,
the Company's operating results could be adversely affected by capital
spending and economic conditions in Europe. The Company's operating
results have been adversely affected by an economic downturn in Germany.
The Company's strategy is to expand its on-line finished materials
quality control business in geographic areas outside of Europe with
particular emphasis in North America, which in turn may reduce the
Company's exposure to European market conditions.
Results of Operations
Third Quarter 1997 Compared With Third Quarter 1996
Revenues increased 10% to $14,886,000 in the third quarter of 1997
from $13,584,000 in the third quarter of 1996, reflecting an increase of
$1,049,000 at the on-line raw materials analyzer business, primarily due
to increased sales in international markets and the inclusion of $138,000
in revenues from Autometrics, acquired December 31, 1996. Revenues
increased at the on-line finished materials quality control business,
principally due to an increase in demand in the U.S., which resulted
primarily from the strengthening of the U.S. dollar relative to the
German deutsche mark, as well as increased sales due to the introduction
of new products. The unfavorable effects of currency translation due to a
stronger U.S. dollar decreased revenues by $917,000. The future sales
growth of the Company will depend in part upon increasing industry
acceptance of its on-line raw materials analyzers, as well as the
Company's ability to further penetrate the U.S. and Asian markets for its
on-line finished materials quality control systems.
The gross profit margin increased to 49% in the third quarter of 1997
from 46% in the third quarter of 1996. The gross profit margin at the
on-line raw materials analyzer business improved to 55% in 1997 from 51%
in 1996 resulting principally from increased volume and a change in
product mix, offset in part by the inclusion in 1997 of lower-margin
revenues at Autometrics. The gross profit margin at the on-line finished
materials quality control business improved to 43% in 1997 from 41% in
1996 due to higher costs incurred in the 1996 period relating to the
introduction of new products, and an increase in higher-margin sales in
1997 resulting from the introduction of such new products.
10PAGE
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METRIKA SYSTEMS CORPORATION
Third Quarter 1997 Compared With Third Quarter 1996 (continued)
Selling, general, and administrative expenses as a percentage of
revenues increased to 26% in the third quarter of 1997 from 24% in the
third quarter of 1996, primarily due to an increase in legal expenses in
connection with a patent infringement lawsuit initiated by the Company's
Gamma-Metrics subsidiary, relating to its on-line raw materials cement
analyzer systems. Research and development expenses increased to $953,000
in the third quarter of 1997 from $752,000 in the third quarter of 1996,
primarily due to an increase in product development expenses at the
on-line raw materials analyzer business.
Interest income increased by $769,000 in the third quarter of 1997,
primarily due to interest earned on the invested net proceeds from the
Company's June 1997 initial public offering and December 1996 private
placement. Interest expense decreased to $165,000 in 1997 from $274,000
in 1996, principally due to a decrease in short-term borrowing at foreign
divisions, as well as a decrease in applicable interest rates.
The effective tax rate was 40% in the third quarter of 1997 and 1996.
The effective tax rate exceeded the statutory federal income tax rate
primarily due to the impact of state income taxes, nondeductible
amortization of cost in excess of net assets of acquired companies, and
foreign tax rate and tax law differences.
First Nine Months 1997 Compared With First Nine Months 1996
Revenues increased 10% to $41,611,000 in the first nine months of
1997 from $37,767,000 in the first nine months of 1996, reflecting an
increase of $4,763,000 at the on-line raw materials analyzer business,
primarily due to increased sales in international markets and the
inclusion of $1,240,000 in revenues from Autometrics, acquired
December 31, 1996. Revenues increased at the on-line finished materials
quality control business principally due to the reasons discussed in the
results of operations for the third quarter. The unfavorable effects of
currency translation due to a stronger U.S. dollar decreased revenues by
$1,464,000.
The gross profit margin increased to 46% in the first nine months of
1997 from 44% in the first nine months of 1996. The gross profit margin
at the on-line raw materials analyzer business increased to 50% in 1997
from 49% in 1996, resulting principally from increased volume and a
change in product mix, offset in part by the inclusion in 1997 of
lower-margin revenues at Autometrics. The gross profit margin at the
on-line finished materials quality control business improved to 42% in
1997 from 39% in 1996 primarily due to the reasons discussed in the
results of operations for the third quarter.
Selling, general, and administrative expenses as a percentage of
revenues was unchanged at 26% in the first nine months of 1997 and 1996.
A decrease due to an increase in revenues was offset by an increase in
legal expenses for the reason discussed in the results of operations for
11PAGE
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METRIKA SYSTEMS CORPORATION
First Nine Months 1997 Compared With First Nine Months 1996 (continued)
the third quarter. Research and development expenses increased to
$3,013,000 in the first nine months of 1997 from $2,157,000 in the first
nine months of 1996, primarily due to an increase in product development
expenses at the on-line raw materials analyzer business.
Interest income increased by $1,240,000 in the first nine months of
1997, primarily due to interest earned on the invested net proceeds from
the Company's December 1996 private placement and June 1997 initial
public offering.
The effective tax rate was 40% in the first nine months of 1997 and
1996. The effective tax rate exceeded the statutory federal income tax
rate primarily due to the impact of state income taxes, nondeductible
amortization of cost in excess of net assets of acquired companies, and
foreign tax rate and tax law differences.
Liquidity and Capital Resources
Consolidated working capital was $46,586,000 at September 27, 1997,
compared with $8,705,000 at December 28, 1996. Included in working
capital are cash, cash equivalents, and available-for-sale investments of
$52,912,000 at September 27, 1997, compared with $20,229,000 at
December 28, 1996. Additionally, included in working capital are
short-term borrowings and advances from parent company and affiliated
companies of $15,831,000 at September 27, 1997, and $18,895,000 at
December 28, 1996.
During the first nine months of 1997, $2,740,000 of cash was provided
by operating activities. Cash provided by the Company's operating results
was reduced primarily by a $3,519,000 increase in unbilled contract costs
and fees and a $1,843,000 increase in accounts receivable. These uses of
cash were offset in part by a $3,917,000 increase in other current
liabilities, primarily due to an increase in accrued income taxes and
accrued installation expenses. The increase in unbilled contract costs
and fees occurred principally at the on-line finished materials quality
control business and resulted primarily from the timing of billing on
percentage-of-completion contracts. The increase in accounts receivable
was principally due to the timing of cash collections.
During the first nine months of 1997, the Company's primary investing
activities, excluding purchases of available-for-sale investments,
included an acquisition and capital expenditures. On December 31, 1996,
the Company acquired the assets, subject to certain liabilities, of
Autometrics for $1,347,000 in cash (Note 2). The Company expended
$358,000 for the purchase of property, plant, and equipment during the
first nine months of 1997. In the remainder of 1997, the Company plans to
make capital expenditures for property, plant, and equipment of
approximately $200,000.
The Company's financing activities provided $31,220,000 of cash in
the first nine months of 1997. In June 1997, the Company sold 2,300,000
shares of its common stock in an initial public offering for net proceeds
of $32,528,000 (Note 3). During the first nine months of 1997, the
Company increased its foreign short-term borrowings by $1,135,000 and
repaid $169,000 of its long-term obligation. A decrease in "Due to parent
company and affiliated companies" used $2,274,000 of cash during the
first nine months of 1997.
12PAGE
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METRIKA SYSTEMS CORPORATION
Liquidity and Capital Resources (continued)
Although the Company expects to have positive cash flow from its
existing operations, the Company may require significant amounts of cash
for the acquisition of complementary businesses. The Company expects that
it will finance any such acquisitions through a combination of internal
funds, additional debt or equity financing from the capital markets, or
short-term borrowings from Thermo Instrument Systems Inc. or Thermo
Electron Corporation, although it has no agreement with these companies
to ensure that funds will be available on acceptable terms, or at all.
The Company believes that its existing resources are sufficient to meet
the capital requirements of its existing businesses for the foreseeable
future.
PART II - OTHER INFORMATION
Item 2 - Changes in Securities and Use of Proceeds
(d) Use of Proceeds
The Company sold 2,300,000 shares of common stock, par value $.01 per
share, pursuant to a Registration Statement on Form S-1 (File No.
333-25243), which was declared effective by the Securities and Exchange
Commission on June 18, 1997. The managing underwriters of the offering
were Salomon Brothers, Inc., Lehman Brothers, Smith Barney Inc., and
Cazenove & Co. The aggregate gross proceeds of the offering were
$35,650,000. The Company's total expenses in connection with the offering
were $3,122,000, of which $2,323,000 was for underwriting discounts and
commissions and $799,000 was for other expenses paid to persons other
than directors or officers of the Company, persons owning more than
10 percent of any class of equity securities of the Company, or
affiliates of the Company (collectively, Affiliates). The Company's net
proceeds from the offering were $32,528,000. As of September 27, 1997,
the Company expended $63,000 of such net proceeds for the purchase of
property, plant, and equipment, $953,000 for research and development
expenses, and $2,136,000 for working capital. As of September 27, 1997,
the Company had expended an aggregate of $3,152,000 of such net proceeds.
The Company invested, from time to time, the balance of such net proceeds
primarily in investment grade interest or dividend bearing instruments.
As of September 27, 1997, the remaining net proceeds of $29,376,000 were
invested pursuant to a repurchase agreement with Thermo Electron
Corporation. As of September 27, 1997, the Company had $52,912,000 of
cash, cash equivalents, and available-for-sale investments.
Item 6 - Exhibits
See Exhibit Index on the page immediately preceding exhibits.
13PAGE
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METRIKA SYSTEMS CORPORATION
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 as of the 4th day of November
1997.
METRIKA SYSTEMS CORPORATION
Paul F. Kelleher
---------------------------
Paul F. Kelleher
Chief Accounting Officer
John N. Hatsopoulos
---------------------------
John N. Hatsopoulos
Vice President and Chief
Financial Officer
14PAGE
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METRIKA SYSTEMS CORPORATION
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
-----------------------------------------------------------------------
11 Statement re: Computation of Earnings per Share.
27 Financial Data Schedule.
Exhibit 11
METRIKA SYSTEMS CORPORATION
Computation of Earnings per Share
Three Months Ended Nine Months Ended
------------------------ -------------------------
Sept. 27, Sept. 28, Sept. 27, Sept. 28,
1997 1996 1997 1996
------------------------------------------------------------------------------
Computation of Primary
Earnings per Share:
Net Income (a) $ 1,843,000 $ 1,146,000 $ 3,785,000 $ 2,425,000
----------- ----------- ----------- -----------
Shares:
Weighted average shares
outstanding 8,267,828 5,000,000 6,768,194 5,000,000
Add: Shares issuable
from assumed
issuance of private
placement shares
and the assumed
exercise of options
(as determined by
the application of
the treasury stock
method) - 193,086 1,923 193,086
----------- ----------- ----------- -----------
Weighted average
shares outstanding,
as adjusted (b) 8,267,828 5,193,086 6,770,117 5,193,086
----------- ----------- ----------- -----------
Primary Earnings
per Share (a) / (b) $ .22 $ .22 $ .56 $ .47
=========== =========== =========== ===========
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM METRIKA
SYSTEM INC.'S QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 27,
1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
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<FISCAL-YEAR-END> JAN-03-1998
<PERIOD-END> SEP-27-1997
<CASH> 43,626
<SECURITIES> 9,286
<RECEIVABLES> 13,571
<ALLOWANCES> 819
<INVENTORY> 7,072
<CURRENT-ASSETS> 80,067
<PP&E> 14,793
<DEPRECIATION> 4,254
<TOTAL-ASSETS> 104,418
<CURRENT-LIABILITIES> 33,481
<BONDS> 4,110
0
0
<COMMON> 83
<OTHER-SE> 62,309
<TOTAL-LIABILITY-AND-EQUITY> 104,418
<SALES> 41,611
<TOTAL-REVENUES> 41,611
<CGS> 22,283
<TOTAL-COSTS> 22,283
<OTHER-EXPENSES> 3,013
<LOSS-PROVISION> 274
<INTEREST-EXPENSE> 605
<INCOME-PRETAX> 6,321
<INCOME-TAX> 2,536
<INCOME-CONTINUING> 3,785
<DISCONTINUED> 0
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<CHANGES> 0
<NET-INCOME> 3,785
<EPS-PRIMARY> .56
<EPS-DILUTED> 0
</TABLE>
