<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 September 30, 1995
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 1-7960
------------------------------------------
TIE/COMMUNICATIONS, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 06-0872068
------------------------------- -------------------------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
8500 W. 110TH STREET, OVERLAND PARK, KANSAS 66210
- - ------------------------------------------- -------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code: (913) 344-0400
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 by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
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:
<TABLE>
<CAPTION>
Date Class Shares Outstanding
- - ------------------- ----------------------------- -----------------------
<S> <C> <C>
September 30, 1995 Common Stock, par 3,981,338
- - ------------------- ----------------------------- -----------------------
value $.10 per share
- - ------------------- ----------------------------- -----------------------
</TABLE>
<PAGE>
TIE/communications, Inc. and Subsidiaries
INDEX
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets - September 30, 1995 and
December 31, 1994 3-4
Consolidated Statements of Operations -
Nine Months Ended September 30, 1995 and 1994 5
Consolidated Statements of Operations -
Three Months Ended September 30, 1995 and 1994 6
Consolidated Statements of Cash Flows -
Nine Months Ended September 30, 1995 and 1994 7-8
Notes to Consolidated Financial Statements 9
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS 10-12
PART II. OTHER INFORMATION 12
- 1 -
<PAGE>
Part I. FINANCIAL INFORMATION
The condensed financial statements included herein have been provided by
Registrant, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. 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 such rules and regulations, however, Registrant believes that the
disclosures are adequate to make the information presented not misleading.
These condensed financial statements should be read in conjunction with the
financial statements and the notes thereto included in the Registrant's Annual
Report on Form 10-K for the fiscal year ended December 31, 1994.
The condensed interim financial statements included herein, which are unaudited,
include, in the opinion of management, all adjustments (consisting primarily of
normal recurring accruals) necessary to present fairly the consolidated
financial position and consolidated results of operations of the Registrant and
its subsidiaries (hereinafter sometimes collectively referred to as the
"Company") for the periods presented. The December 31, 1994 financial
statements are derived from the audited financial statements presented in the
Registrant's Annual Report on Form 10-K.
- 2 -
<PAGE>
ITEM 1. FINANCIAL STATEMENTS
TIE/communications, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
------------- ------------
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 475,000 $ 887,000
Notes and accounts receivable, net
of allowance for doubtful accounts:
September 30, 1995 - $ 1,814,000
December 31, 1994 - $2,172,000 13,805,000 13,780,000
Inventories, net 11,522,000 13,704,000
Restricted cash equivalents 174,000 232,000
Current portion of long-term notes receivable 65,000 215,000
Current deferred tax assets, net 82,000 82,000
Prepaid expenses 1,013,000 952,000
Miscellaneous 1,647,000 1,683,000
----------- -----------
Total current assets 28,783,000 31,535,000
----------- -----------
Property, net 1,774,000 1,852,000
Intangible assets, net 18,530,000 19,735,000
Long-term deferred tax assets, net 528,000 563,000
Long-term notes receivable 436,000 385,000
Other assets 140,000 155,000
----------- -----------
Total assets $50,191,000 $54,225,000
----------- -----------
----------- -----------
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
- 3 -
<PAGE>
TIE/communications, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
------------- ------------
(Unaudited)
<S> <C> <C>
Current liabilities:
Notes payable and current
maturities of long-term debt $ 1,100,000 $ --
Accounts payable 4,289,000 7,499,000
Accrued expenses 12,494,000 12,243,000
Relocation reserves 264,000 123,000
Deferred service revenue 8,712,000 9,297,000
Income taxes payable 1,957,000 2,127,000
----------- -----------
Total current liabilities 28,816,000 31,289,000
Other non-current liabilities 236,000 376,000
Long-term tax liability 1,370,000 2,741,000
Minority interest 56,000 79,000
----------- -----------
Total liabilities 30,478,000 34,485,000
----------- -----------
Stockholders' equity:
Common stock, par value $0.10 399,000 399,000
Authorized - 10,000,000 shares
Issued - 3,988,392 shares
Outstanding - 3,981,338 shares
Additional paid-in capital 19,217,000 19,217,000
Retained earnings (deficit) (1,003,000) (711,000)
Common stock in treasury, at cost (60,000) (60,000)
----------- -----------
18,553,000 18,845,000
Cumulative foreign currency
translation adjustment 1,160,000 895,000
----------- -----------
Total stockholders' equity 19,713,000 19,740,000
----------- -----------
Total liabilities and stockholders' equity $50,191,000 $54,225,000
----------- -----------
----------- -----------
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
- 4 -
<PAGE>
TIE/communications, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
1995 1994
----------- -----------
<S> <C> <C>
Net revenue:
Equipment sales $71,728,000 $71,368,000
Services provided 20,810,000 21,878,000
----------- -----------
92,538,000 93,246,000
----------- -----------
Cost of sales:
Equipment sales 40,584,000 39,770,000
Services provided 8,930,000 9,591,000
----------- -----------
49,514,000 49,361,000
----------- -----------
Gross margin:
Equipment sales 31,144,000 31,598,000
Services provided 11,880,000 12,287,000
----------- -----------
43,024,000 43,885,000
----------- -----------
Operating expenses 44,013,000 43,973,000
----------- -----------
Operating loss from consolidated operations (989,000) (88,000)
Interest income 132,000 224,000
Interest expense (229,000) (193,000)
Other income, net 1,076,000 1,119,000
----------- -----------
Pretax income (loss) (10,000) 1,062,000
Provision for income taxes 282,000 630,000
----------- -----------
Net income (loss) $ (292,000) $ 432,000
----------- -----------
----------- -----------
Net income (loss) per share $ (0.07) $ 0.11
----------- -----------
----------- -----------
Average shares outstanding 3,981,338 3,981,338
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
- 5 -
<PAGE>
TIE/communications, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended September 30,
1995 1994
----------- -----------
<S> <C> <C>
Net Revenue:
Equipment sales $23,264,000 $24,269,000
Services provided 7,071,000 7,560,000
----------- -----------
30,335,000 31,829,000
----------- -----------
Cost of sales:
Equipment sales 12,914,000 14,002,000
Services provided 2,954,000 3,358,000
----------- -----------
15,868,000 17,360,000
----------- -----------
Gross margin:
Equipment sales 10,350,000 10,267,000
Services provided 4,117,000 4,202,000
----------- -----------
14,467,000 14,469,000
----------- -----------
Operating expenses 14,456,000 14,629,000
----------- -----------
Operating income (loss) from
consolidated operations 11,000 (160,000)
Interest income 49,000 54,000
Interest expense (40,000) (76,000)
Other income, net 266,000 485,000
----------- -----------
Pretax income 286,000 303,000
Provision for income taxes 48,000 155,000
----------- -----------
Net income $ 238,000 $ 148,000
----------- -----------
----------- -----------
Net income per share $ 0.06 $ 0.04
----------- -----------
----------- -----------
Average shares outstanding 3,981,338 3,981,338
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
- 6 -
<PAGE>
TIE/communications, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
1995 1994
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (292,000) $ 432,000
Adjustments to reconcile net income (loss)
to cash flows from operating activities:
Depreciation and amortization 2,169,000 2,075,000
Loss from disposition of assets 91,000 --
Deferred income (53,000) 11,000
Minority interest (23,000) 55,000
Deferred income taxes 246,000 630,000
Relocation expense 200,000 300,000
Changes in working capital, net of
acquisitions and divestitures:
Accounts receivable (219,000) (1,683,000)
Inventories 990,000 (1,562,000)
Restricted cash equivalents 58,000 58,000
Other receivables 152,000 (84,000)
Prepaid expenses and miscellaneous
current assets (11,000) (437,000)
Accounts payable (3,262,000) (2,453,000)
Accrued expenses (7,000) 109,000
Relocation reserves (59,000) (602,000)
Deferred service revenue (672,000) (589,000)
Taxes payable (186,000) (118,000)
---------- -----------
Cash flows used for operating
activities (878,000) (3,858,000)
Cash flows from investment activities:
Capital expenditures, net of disposals (752,000) (746,000)
Proceeds from disposition of assets 1,703,000 --
Assets of businesses acquired (356,000) (429,000)
Purchase of minority interest in
consolidated subsidiary -- (2,596,000)
Other 15,000 1,000
---------- -----------
Cash flows provided by (used for)
investment activities 610,000 (3,770,000)
</TABLE>
(Continued)
See accompanying Notes to Consolidated Financial Statements.
- 7 -
<PAGE>
TIE/communications, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
1995 1994
----------- -----------
<S> <C> <C>
Cash flows from financing activities:
Long-term and short-term borrowings $ 1,100,000 $ 2,500,000
Long-term and short-term debt repayments -- (1,424,000)
Payment of long-term tax liability (1,371,000) (1,098,000)
Other 104,000 79,000
----------- -----------
Cash flows provided by (used for)
financing activities (167,000) 57,000
Impact of changes in foreign currency
translation 23,000 (106,000)
----------- -----------
Decrease in cash and cash equivalents (412,000) (7,677,000)
Cash and cash equivalents at the
beginning of period 887,000 8,133,000
----------- -----------
Cash and cash equivalents at the end of period $ 475,000 $ 456,000
----------- -----------
----------- -----------
- - ---------------------------------------
Cash flow information:
Interest paid $ 226,000 $ 163,000
----------- -----------
----------- -----------
Income taxes paid (excluding
payment of long term tax liability) $ 92,000 $ 109,000
----------- -----------
----------- -----------
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
- 8 -
<PAGE>
TIE/communications, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Consolidation
The consolidated financial statements include the accounts of the Company
and its majority-owned domestic and foreign subsidiaries. All material
intercompany accounts and transactions are eliminated. Certain amounts
previously reported have been reclassified to conform with revised
classifications adopted in the first nine months of 1995.
2. Inventories
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
------------- ------------
<S> <C> <C>
Spare parts and jobs in progress $ 1,811,000 $ 3,058,000
Finished goods 9,711,000 10,646,000
----------- -----------
$11,522,000 $13,704,000
----------- -----------
----------- -----------
</TABLE>
3. Property
The following is a schedule of property, plant and equipment:
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
------------ ------------
<S> <C> <C>
Land $ 10,000 $ 10,000
Buildings 232,000 224,000
Equipment and tooling 14,422,000 14,665,000
Leasehold improvements 744,000 729,000
Furniture and fixtures 3,489,000 3,475,000
----------- -----------
18,897,000 19,103,000
Less accumulated depreciation
and amortization 17,123,000 17,251,000
----------- -----------
$ 1,774,000 $ 1,852,000
----------- -----------
----------- -----------
</TABLE>
- 9 -
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
NINE MONTHS AND THREE MONTHS ENDED SEPTEMBER 30, 1995 VERSUS SEPTEMBER 30, 1994
For the quarter ended September 30, 1995, the Company earned net income of $238
thousand or $0.06 per share as compared to net income of approximately $148
thousand or $0.04 per share for the third quarter of 1994. The third quarter
results, combined with the net loss of $530 thousand or $0.13 per share incurred
in the first six months of 1995, resulted in a net loss of $292 thousand or
$0.07 per share for the nine months ended September 30, 1995, as compared to net
income of $432 thousand or $0.11 per share for the comparable nine month period
in 1994. The decline in net earnings of $724 thousand for the nine months ended
September 30, 1995 from 1994, reflecting a decline in gross margin percentage to
46.5% from 47.1%, respectively, is primarily a result of eroding margin on sales
of new equipment.
Total net revenue for the third quarter of 1995 decreased $1.5 million or 4.7%
and for the first nine months of 1995 decreased $708 thousand or 0.8% from the
comparable 1994 period. The decrease in the first nine months of 1995 occurred
in service revenue with a $1.1 million or 4.9% decrease from the comparable 1994
period. The decrease, which occurred primarily in the sales and service
division, was prevalent in both revenue associated with maintenance contracts
and time and material billings due to increased sales volume of higher quality
products. Net revenues from services provided accounted for approximately
23.3% of total revenue in the third quarter of 1995 as compared to 23.8% of
total revenue in the third quarter of 1994 and 22.5% of total revenue in the
first nine months of 1995 as compared to 23.5% in the comparable 1994 period.
Revenue from service transactions is expected to continue to comprise a
significant portion of the Company's overall net revenue in future periods;
however, there are no assurances that the foregoing will occur as the nature of
after market service opportunities is impacted by newer technology products with
a higher mean time before failure. An offsetting increase in the first nine
months of 1995 occurred in new equipment sales with a $0.4 million or 0.5%
increase over the comparable 1994 period, however, new equipment sales for the
third quarter 1995 decreased $1.0 million or 4.1% as compared to the third
quarter 1994. Net revenue from new equipment sales accounted for approximately
76.7% and 76.2% of the total revenue for the third quarter of 1995 and 1994,
respectively, and 77.5% and 76.5% of the total revenue for the first nine months
of 1995 and 1994, respectively. New equipment sales were represented by
increases in the direct sales and service division and an increase in sales in
the video conferencing product lines and long distance services. Offsetting
declines were noted in the Company's Canadian repair operations resulting from
the sale of a segment of its business dealing with Caller Identification
products during the second quarter of 1995.
The gross margin percentage for the quarter and nine months ended September 30,
1995 was 47.7% and 46.5% as compared to 45.5% and 47.1%, respectively, for the
same periods of 1994. The decline in the gross margin percentage for the nine
months ended September 30, 1995 is due to the change in sales mix with a higher
proportion of revenue being generated from new equipment sales and sales of
proprietary products, which carry a lower margin versus service transactions.
The product mix included in new equipment sales has shifted to an increase in
volume of lower margin products. New equipment margins are also lower due to
declining sales of the Company's proprietary design key system as compared to
the newer Northern Telecom key system product. Although new equipment sales
carry lower margins, these sales present future service and software based
business to the Company. The gross margin on new equipment sales has improved
from 42.3% for the quarter ended September 30, 1994 to 44.5% for the same period
of 1995. Gross margin on service revenue has increased from 55.6% in the third
quarter of 1994 to 58.2% in the third quarter of 1995 primarily due to newer
technology products entering the customer base.
- 10 -
<PAGE>
For the nine months ended September 30, 1995, the gross margin on service
revenue increased to 57.1% from 56.2% in the comparable period of 1994.
Another factor that may affect the Company's gross margin percentage in the more
distant future relates to the Company's agreement with NTK America. Under that
agreement, the Company is provided with the most favorable purchase prices on
NTK America products for the duration of the agreement. The agreement has been
extended through June 2001, with a five-year option to renew through June 2006.
It is anticipated that if NTK America does not invest in research and
development to advance the technology and improve the cosmetics of the products,
the marketability of these products will decline. Although the Company has
agreed to provide an incentive to NTK America to invest in such research and
development, the Company cannot guarantee that NTK America will perform future
development on these products. Therefore, the Company cannot estimate the
impact of the foregoing on future gross margin at this time.
Operating expenses in the third quarter of 1995 decreased $173 thousand (1.2%)
and in the first nine months of 1995 increased $40 thousand (0.1%) over the
comparable 1994 periods. This reflects the Company's ongoing cost reduction
efforts in the restructuring of field operations. Operating expenses as a
percent of sales, however, were 47.7% and 47.6%, respectively, in the third
quarter of 1995 and the first nine months of 1995 as compared to 46.0% and 47.2%
in the comparable periods of 1994. The Company is continuing to monitor
operating expenses and will seek to continue to control costs in future periods.
It is not expected that operating expenses will increase significantly in the
future without a corresponding significant increase in revenue.
Nonoperating income (expense) decreased $188 thousand and $171 thousand in the
third quarter and the first nine months of 1995, respectively, as compared to
the same periods of 1994. These decreases for the nine months of 1995 are
represented by: (a) an unfavorable decrease in net interest income (expense) of
$128 thousand resulting from $92 thousand lower interest income due to declining
cash balances in 1995 and an increase in interest expense of $36 thousand from
the debt borrowings in 1995 discussed below, and (b) a decrease in other income,
net of $43 thousand. Other income, net is substantially comprised of royalty
income of $1,195 thousand and $1,211 thousand for the first nine months of 1995
and 1994, respectively, primarily from NTK America for its sale of equipment
designed by the Company.
The U.S. operations generated taxable income in the third quarter 1995, however,
as a result of the losses recorded in the nine month period, there was no income
tax provision recorded for the U.S. operations in the third quarter or nine
months ended September 30, 1995. The 1995 tax provision primarily represents
taxes on the Canadian taxable income. In the 1994 third quarter, the U.S. and
Canadian operations both recorded taxable income and also recorded taxable
income for the nine month period, therefore, a tax provision was recorded for
the consolidated results in both the quarter and nine months ended September 30,
1994.
The Company continues to focus its efforts on maintaining its existing customer
base through providing higher margin software based products and network
services and implementation of training and marketing programs related to its
strategic business direction.
INFLATION
Inflation has had a relatively minor impact on the Company as the rate of
inflation has declined in recent reporting periods. If operating expenses
increase, then the Company, to the extent permitted by competition, may attempt
to recover these increased costs by increasing sales prices to customers.
- 11 -
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents at September 30, 1995 totalled $475 thousand, a
decrease of $412 thousand from December 31, 1994. For the first nine months of
1995, the Company used approximately $0.9 million of cash for operating
activities primarily for reduction of accounts payable. Additionally, the
Company used approximately $1.4 million for payment of the long-term tax
liability, $752 thousand for net capital expenditures and $356 thousand to
expand its service network. The Company's Canadian subsidiary sold a segment of
its business during the second quarter 1995 for approximately $1.7 million. The
Company borrowed $1.1 million during the first nine months of 1995 under its
revolving line of credit as discussed below.
Pursuant to an Agreement and Plan of Merger between TIE Acquisition Co., TIE
Merger Co., a wholly-owned subsidiary of TIE Acquisition Co., and the Company,
dated as of September 5, 1995 (the "Merger Agreement"), TIE Acquisition Co. has
made a tender offer (the "Offer"), dated September 12, 1995, to acquire all of
the outstanding shares of the Company for $8.60 per share net to the seller in
cash. The Offer was originally scheduled to expire at 12:00 midnight, New York
City time, on Tuesday, October 10, 1995. On October 11, 1995, TIE Acquisition
Co. extended its Offer to October 17, 1995. All other terms remain unchanged.
In accordance with the terms of Merger Agreement, following consummation of the
Offer, the Company will be merged into TIE Merger Co. (the "Merger"), the
shareholders of the Company (other than TIE Acquisition Co. and its affiliates)
will receive the same per share consideration as payable in the Offer and the
Company will become a wholly-owned subsidiary of TIE Acquisition Co.
The Company currently has a $7,000,000 revolving line of credit with Marmon
Holdings, Inc. ("Marmon"). Pursuant to an agreement between TIE Acquisition Co.
and certain stockholders holding more than 75% of the Company's outstanding
shares, Marmon has agreed to modify the existing revolving credit agreement to
continue the credit arrangements currently in effect on the same terms and
conditions following consummation of the Offer, except that the maximum credit
available will be reduced to $3,000,000 and the revolving credit agreement will
terminate on the earlier of the consummation of the Merger or 90 days following
consummation of the Offer. The indebtedness under the line of credit is secured
by substantially all of the Company's assets.
The Company believes sufficient cash resources exist to support its needs
through currently available cash, cash expected to be generated from future
operations, or from the line of credit previously mentioned. The Company can
borrow against this line of credit if needed, assuming no breach of any of the
covenants (which include restrictions on asset purchases and require specified
levels of working capital and net worth to be maintained) and that the aggregate
principal amount outstanding at any time under the credit agreement does not
exceed the "Borrowing Base" (which is based on inventory and receivables) set
forth in the credit agreement. The Company was in compliance with or had
received a waiver of the covenants as of September 30, 1995 and, therefore, was
qualified to borrow the entire $3,000,000 available under the line. The Company
borrowed under this line of credit during the first nine months of 1995 and $1.1
million of borrowings were outstanding as of September 30, 1995.
At September 30, 1995 the Company did not have any material commitments for
capital expenditures.
Part II. OTHER INFORMATION
Not applicable.
- 12 -
<PAGE>
SIGNATURES
Pursuant to the requirement 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.
TIE/communications, Inc.
Dated: October 13, 1995 By: \s\ George N. Benjamin, III
-------------------------------------
George N. Benjamin, III
President and Chief Executive Officer
Dated: October 13, 1995 By: \s\ John W. Wellhausen
-------------------------------------
John W. Wellhausen
Chief Financial Officer
- 13 -
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 475,000
<SECURITIES> 0
<RECEIVABLES> 15,619,000
<ALLOWANCES> 1,814,000
<INVENTORY> 11,522,000
<CURRENT-ASSETS> 28,783,000
<PP&E> 18,897,000
<DEPRECIATION> 17,123,000
<TOTAL-ASSETS> 50,191,000
<CURRENT-LIABILITIES> 28,816,000
<BONDS> 0
<COMMON> 399,000
0
0
<OTHER-SE> 19,314,000
<TOTAL-LIABILITY-AND-EQUITY> 50,191,000
<SALES> 71,728,000
<TOTAL-REVENUES> 92,538,000
<CGS> 40,584,000
<TOTAL-COSTS> 49,514,000
<OTHER-EXPENSES> 44,013,000
<LOSS-PROVISION> 641,000
<INTEREST-EXPENSE> (229,000)
<INCOME-PRETAX> (10,000)
<INCOME-TAX> 282,000
<INCOME-CONTINUING> (292,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (292,000)
<EPS-PRIMARY> (0.07)
<EPS-DILUTED> (0.07)
</TABLE>
