UNITED STATES
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, 1996
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 0-20329
EIS INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Delaware No. 06-1017599
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification Number)
1351 Washington Boulevard
Stamford, CT 06902
(203) 351-4800
(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: Common Stock, par value $.01 per share, outstanding as of November
8, 1996: 11,067,238 shares.
<PAGE>
EIS INTERNATIONAL, INC. and SUBSIDIARIES
INDEX to Financial Statements Filed with Quarterly Report of Registrant
on Form 10-Q for the Quarter Ended September 30, 1996
(Unaudited)
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements: Page
----
Unaudited Consolidated Balance Sheets as of September 30, 1996
and December 31, 1995 3-4
Unaudited Consolidated Statements of Operations
for the three months ended September 30, 1996 and 1995, and for
the nine months ended September 30, 1996 and 1995 5
Unaudited Consolidated Statements of Cash Flows
for the nine months ended September 30, 1996 and 1995 6
Notes to Consolidated Financial Statements
(unaudited) 7-10
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11-13
PART II. OTHER INFORMATION
Item 1. Legal Proceedings Not Applicable
Item 2. Changes in Securities Not Applicable
Item 3. Defaults Upon Senior Securities Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders Not Applicable
Item 5. Other Information Not Applicable
Item 6. Exhibits and Reports on Form 8-K 15
Signatures 16
<PAGE>
EIS INTERNATIONAL, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Dollars in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------ -------------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 16,028 $ 21,069
Accounts receivable, trade, less allowances for doubtful accounts
and sales returns of $2,329 in 1996 and $2,665 in 1995 27,484 29,749
Unbilled revenue 1,285 --
Current portion of installment and lease receivables 2,658 3,806
Inventories (note 3) 7,000 7,681
Deferred income taxes 2,141 2,141
Prepaids and other current assets 778 293
-------- -------
Total current assets 57,374 64,739
Capitalized software development costs, net 4,956 3,315
Intangible assets, net 9,064 --
Property and equipment, net 8,306 8,430
Installment and lease receivables, less current portion 3,719 5,994
Other assets 2,039 1,739
------ -----
Total assets $ 85,458 $ 84,217
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------- ------------
<S> <C> <C>
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable $ -- $ 354
Accounts payable 7,998 6,441
Accrued compensation and benefits 2,647 4,703
Other accrued liabilities 3,148 2,776
Deferred maintenance revenue 3,290 2,481
Deferred income 2,893 --
Income taxes payable -- 3,324
------- ------
Total current liabilities 19,976 20,029
Deferred income taxes 1,064 1,064
Other liabilities 318 1,026
------- ------
Total liabilities 21,358 22,119
Commitments and Contingencies (Note 7)
Stockholders' equity:
Common Stock, $.01 par value, 15,000,000
shares authorized, issued 11,121,620 shares
in 1996 and 9,853,641 shares in 1995 111 99
Additional paid-in capital 58,045 36,020
Accumulated translation adjustments (62) (21)
Retained earnings 6,910 26,469
Treasury stock, at cost - 101,225 shares in 1996
and 76,225 shares in 1995. (904) (519)
------- ---------
Total stockholders' equity 64,100 62,048
------ ------
Total liabilities and stockholders' equity $ 85,458 $ 84,217
====== ======
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
EIS INTERNATIONAL, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(In Thousands, Except Per Share Amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
--------------------- ----------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net revenues:
Product sales and software $ 12,772 $ 19,446 $ 60,103 $ 51,659
Service and other 5,443 3,696 14,515 10,486
----------- ----------- ----------- -----------
18,215 23,142 74,618 62,145
----------- ----------- ----------- -----------
Cost of revenues:
Cost of product sold 9,312 6,614 25,361 17,541
Cost of services and other 3,534 1,848 9,393 4,998
----------- ----------- ----------- -----------
12,846 8,462 34,754 22,539
----------- ----------- ----------- -----------
Gross margin
Product sales 3,460 12,832 34,742 34,118
Services and other 1,909 1,848 5,122 5,488
----------- ----------- ----------- -----------
5,369 14,680 39,864 39,606
----------- ----------- ----------- -----------
Operating cost and expense:
Research and development 3,650 2,118 10,042 5,672
Acquired technology in process 1,345 -- 18,245 --
Sales, general and administrative 10,804 8,444 32,049 23,899
----------- ----------- ----------- -----------
15,799 10,562 60,336 29,571
----------- ----------- ----------- -----------
Operating income (loss) (10,430) 4,118 (20,472) 10,035
Other income, net 289 473 906 1,260
----------- ----------- ----------- -----------
Income (loss) before income tax
expense (benefit) (10,141) 4,591 (19,566) 11,295
Income tax expense (benefit) (3,255) 1,890 (8) 4,572
----------- ----------- ----------- -----------
Net income (loss) $ (6,886) $ 2,701 $ (19,558) $ 6,723
=========== =========== =========== ===========
Net income (loss) per share:
Primary $ (0.63) $ 0.26 $ (1.85) $ 0.64
Fully diluted $ (0.63) $ 0.26 $ (1.85) $ 0.64
Weighted average common and common equivalent shares:
Primary 10,971 10,576 10,560 10,435
Fully diluted 10,971 10,583 10,560 10,509
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
EIS INTERNATIONAL, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Dollars in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months
Ended September 30,
1996 1995
---- ----
<S> <C> <C>
Net cash (used in) provided by operating
activities (note 6) $ (2,714) $ 1,982
------ -----
Cash flows from investing activities:
Additions to property and equipment (2,858) (3,100)
Sale of lease portfolio 5,200 --
Sale of short term investments -- 5,663
Increase in capitalized software costs (2,220) (982)
Acquisition of businesses (7,340) --
------- --------
Net cash (used in) provided by
investing activities (7,218) 1,581
-------- -----
Cash flows from financing activities:
Borrowing from unrelated parties -- 259
Borrowing from related parties -- 155
Repayment of short-term debt (354) --
Purchase of treasury stock (385) (19)
Proceeds from exercise of stock options and warrants 5,630 1,838
Proceeds from sale of stock -- 496
--------- ------
Net cash provided by financing activities 4,891 2,729
------ -----
Net increase (decrease) in cash and cash equivalents (5,041) 6,292
Cash and cash equivalents at beginning of period 21,069 13,447
------ ------
Cash and cash equivalents at end of period $ 16,028 $ 17,739
====== ======
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 99 $ 88
======= ======
Income taxes $ 3,267 $ 1,163
===== ======
Supplemental schedule of non-cash financing activities:
Tax benefit from exercise of stock options $ 2,125 $ 1,164
====== ========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
EIS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) Basis of Presentation
The unaudited consolidated financial statements presented herein have
been prepared in accordance with the instructions to Form 10-Q and do
not include all of the information and note disclosures necessary to
conform with annual reporting requirements. The statements should be
read in conjunction with the audited consolidated financial statements
and notes thereto included in the Company's Annual Report for the year
ended December 31, 1995. In the opinion of management, the accompanying
consolidated financial statements include all adjustments (consisting
only of normal recurring adjustments) necessary for a fair presentation
of the Company's financial position and results of operations. The
results of operations for the three- and nine-month periods ended
September 30, 1996 may not be indicative of the results for the full
year.
(2) Principles of Consolidation
The accompanying financial statements include the accounts of the
Company and its wholly-owned subsidiaries. All significant intercompany
balances and transactions have been eliminated in consolidation.
(3) Inventories consist of the following at:
September 30, 1996 December 31, 1995
------------------ -----------------
Raw materials $ 207 $ 763
Work in process 75 148
Finished goods 6,718 6,770
----- -----
Total inventories $7,000 $7,681
===== =====
(4) Acquisitions and Pro-Forma Financial Information
(a) On March 1, 1996, the Company acquired all the issued and
outstanding capital stock of Cybernetics Systems International
Corp. (CSI), a private company located in Coral Gables, Florida,
for $22.75 million consisting of $9.3 million in cash and the
remainder in shares of EIS common stock. The acquisition of CSI
was accounted for by the purchase method of accounting, and
accordingly, the acquired assets and liabilities have been
recorded at their fair values, with the help of an appraiser, at
the date of purchase and the results of the Company reflect those
of CSI from March 1, 1996. The consideration (including
acquisition costs) and the allocation of the purchase price are
summarized below:
<PAGE>
(4) Acquisitions and Pro-Forma Financial Information (Cont'd)
(a) Consideration
Cash $ 9,269
EIS stock 13,480
Liabilities assumed 8,042
Transaction costs 352
--------
Total purchase price $31,143
Allocation of purchase price
Cash $ 3,126
Accounts receivable 1,436
Prepaids and other current assets 302
Equipment and other assets 404
Intangible assets and goodwill:
Acquired technology in process 16,900
Acquired software products
(amortized over 5 years) 3,000
Goodwill (amortized over 10 years) 5,975
-------
Total intangible assets
and goodwill 25,875
-------
Total purchase price $31,143
=======
The following unaudited pro-forma financial information shows the
results of operations for the nine months ended September 30, 1996 and
1995 as though the acquisition of CSI had occurred as of January 1,
1995. In addition to combining the historical results of operations of
the two companies, the pro-forma calculations include: the amortization
of the intangible assets acquired; and the adjustment to income taxes
to reflect the effective income tax rate assumed for the Company and
CSI on a combined basis for each pro-forma period presented and
excludes the write-off of the acquired technology in process of $16.9
million, as such charge is non-recurring and unusual and relates
directly to the acquisition.
Nine Months
Ended September 30,
-------------------
1996 1995
---- ----
Net Revenues $74,862 $67,509
Net Income (Loss) $(4,071) $5,510
Earnings (Loss) Per Share $(.38) $.49
(b) On February 29, 1996, the Company merged with Surefind
Information, Inc. of Pittsburgh, Pennsylvania. Surefind was a
privately held corporation in the business of safely storing
critical data by allowing users to upload their files to
Surefind's electronic security vaults where it can be instantly
retrieved. The Company issued 549,577 shares of EIS common stock,
$.01 par value, in exchange for all 2,826,467 shares of Surefind
stock outstanding and subject to options and warrants. This merger
was accounted for by the pooling method of accounting and,
accordingly, the Company's consolidated financial statements have
been restated for all periods prior to acquisition to include the
results of operations, financial position, and cash flows of
Surefind.
<PAGE>
EIS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(4) Acquisitions and Pro-Forma Financial Information (Cont'd)
(c) On September 1, 1996, the Company entered into an Asset Purchase
Agreeement with Pulse Technologies, Inc., a Virginia corporation,
relating to the purchase of substantially all of the assets of
Pulse for consideration consisting of the assumption of certain
liabilities and the payment of (i) a number of shares of the
Company's common stock, $.01 par value per share, having a value
of approximately $820,000; (ii) up to $1,230,000 in cash, which is
subject to downward adjustment if certain revenue and operating
profit targets are not attained in 1996; and (iii) five-year EIS
warrants to purchase EIS common stock at $18.23 per warrant, with
the number of warrants equal to 66.67% of the number of shares of
EIS common stock.
(5) Sale of Lease Portfolio
On March 29, 1996, EIS Leasing Corp., a wholly-owned subsidiary of the
Company, entered into a Purchase Agreement whereby a portion of its
lease portfolio was sold to a financial institution for $5.2 million in
cash. All leases sold under this agreement are subject to certain
recourse provisions. The Company is a guarantor to the Purchase
Agreement.
(6) Reconciliation of Net Income (loss) to Net Cash (used in) Provided By
Operating Activities.
The reconciliation of net income (loss) to net cash provided by
operating activities for the periods ending September 30, 1996 and 1995
follows (in thousands).
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $(19,558) $ 6,722
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Provision for doubtful accounts and
sales returns 4,529 1,975
Write-off of acquired technology in
process 18,245 --
Depreciation and amortization 4,456 3,133
Professional fees satisfied by issuance of
common stock -- 60
Changes in assets and liabilities:
Accounts receivable, trade (1,640) (8,206)
Unbilled revenue (473)
Installment and lease receivables (1,777) (3,333)
Inventories 681 (2,683)
Prepaids and other current assets (97) 41
Other assets (256) (461)
Accounts payable 112 343
Accrued and other liabilities (4,807) 402
Income taxes payable (1,337) 3,226
Deferred maintenance revenue 128 763
Deferred income (920) --
------- ---------
Net cash (used in) provided by operating activities $(2,714) $ 1,982
====== ======
</TABLE>
<PAGE>
(7) Commitments and Contingencies
One of the principal customers of a subsidiary of EIS International,
Inc. (the "Company") has indicated that in the view of the customer the
Company has not adequately performed under its contract with the
customer. The customer has made a claim to recover all amounts paid to
the Company under the contract, of which approximately $3,868,000 has
been recognized as revenue through September 30, 1996, and for its
direct expenses under the contract. The Company is engaged in
discussions with the customer and believes that the matter will be
resolved in a satisfactory fashion. Further, the Company believes that
it will be entitled to reimbursement from an escrow account established
at the time of the acquisition of the relevant subsidiary for an amount
which the Company believes will be adequate to resolve the claim of the
customer. Accordingly, it is the view of the Company that this claim
will be resolved without material impact to the financial position of
the Company; and no provision for potential losses, if any, have been
recorded in the accompanying financial statements.
<PAGE>
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
NET REVENUES
Net revenues of $18.2 million in the third quarter of fiscal 1996 decreased 21%
from $23.1 million in the third quarter of fiscal 1995. Net revenues increased
to $74.6 million in the first nine months of fiscal 1996 as compared to $62.1
million in the corresponding period of fiscal 1995, representing growth of 20%.
Product sales revenues and software decreased $6.7 million for the quarter (34%)
and increased $8.4 million (16%) for the nine month period ended September 30,
1996 as compared to the same periods in 1995, respectively. Service and other
revenues increased $1.7 million (47%) and $4.0 million (38%) for the same
periods over such periods in 1995. The decrease in product sales and software
revenues during the quarter is primarily the result of (i) an increase in the
Company's allowance for sales returns ($1.3 million) and the Company's decision
to take back a call processing system relating to a customer dispute ($2.2
million), both items taken as revenue reductions, and (ii) delays in closing
customer orders. The increase in the nine month period is a result of increases
in the Company's product sales to the existing customer base. Service and other
revenues increased during the quarter and the nine month period due to the
continued expansion of the Company's installed customer base covered by service
contracts.
COST OF REVENUES
Cost of revenues were 70.5% and 46.6% of net revenues in the third quarter and
first nine months of fiscal 1996, respectively, compared to 36.6% and 36.3% for
the comparable 1995 periods. Product cost as a percentage of product revenue was
72.9% and 42.2% in the third quarter and first nine months of fiscal 1996,
respectively, compared to 34.0% and 34.0% for the comparable 1995 periods.
Product cost as a percentage of revenue increased during the third quarter for
several reasons. First, the Company recorded an inventory write-down ($1.8
million) occasioned by the Company's growing confidence in its Centenium and
newer, faster CPS product lines and the concomitant acceleration of the
end-of-life cycle for the OCM and System 7000 product. Secondly, the cost
percentage increase was calculated based on reduced revenues for the reasons
explained in the above paragraph "Net Revenues" and thirdly, because a
significant part of the Company's cost structure is people driven and increased
during 1996 over 1995 to support a higher revenue level. Service and other costs
as a percentage of service and other revenues were 64.9% and 64.7% in the third
quarter and first nine months of fiscal 1996, respectively, compared to 50.0%
and 47.7% for the comparable 1995 periods. The increase in cost of services as a
percentage of service revenues is primarily due to the expenditures incurred for
building the infrastructure of the service organizations in all of the Company's
operating units in advance of generating revenues from these service
organizations.
RESEARCH AND DEVELOPMENT COST
Research and development cost increased to $3.6 million in the third quarter of
fiscal 1996, a $1.5 million increase over the third quarter of fiscal 1995. For
the first nine months of fiscal 1996, research and development cost increased
$4.4 million over the comparable 1995 period. Research and development cost
increased as a percentage of revenue to 20.0% from 9.2% and to 13.5% from 9.13%
for the three month and nine month comparable periods ended September 30, 1996
and 1995, respectively. In addition, the Company capitalizes certain software
development costs relating to the enhancement of existing products and to the
development of new products in accordance with Statement of Financial Accounting
Standards No. 86. Costs of $600,550 and $2,220,000 were capitalized in the third
quarter and first nine months, respectively, of fiscal 1996 compared to $350,000
and $982,000 in the third quarter and first nine months of fiscal 1995. The
overall cost increase during the three and nine month periods ended September
30, 1996 reflects the expansion of the Company's research and development staff
to support its on-going product development and the increased cost associated
with outside consultants to support future products.
<PAGE>
Cybernetics and Surefind incurred $939,000 of research and development costs
during the quarter, which amount is included in the $1.5 million mentioned
above.
ACQUIRED TECHNOLOGY IN PROCESS
The acquired technology in process costs of $18.2 million incurred in 1996
reflect the fair value of the software products under development at Cybernetics
and Pulse Technologies that had not achieved technological feasibility at the
date of acquisition, had no alternative future uses, and were therefore charged
against operations at the time of the acquisitions.
SALES, GENERAL AND ADMINISTRATIVE
Sales, general and administrative expense for the third quarter of fiscal 1996
increased to $10.8 million, an increase of $2.4 million (28%) as compared to
$8.4 million in the comparable 1995 period. Sales, general and administrative
expense for the 1996 nine month period of $32.0 million, increased $8.1 million
(34%) over the comparable 1995 period. Sales, general and administrative expense
increased as a percentage of revenue to 59.3% from 36.4% and to 43.0% from 38.4%
for the three month and nine month comparable periods ended September 30, 1996
and 1995, respectively. The primary reasons for the overall increase in expenses
during the comparable quarter and nine month periods were increased staff
levels, commissions, travel and expense reimbursement, and bad debt reserves
associated with higher sales levels. Additional costs were incurred quarter over
quarter and year over year in advertising and promotions to bring auxilliary
products to market for Cybernetics and Surefind.
OTHER INCOME, NET
Interest and other income decreased to $289,000 and $906,000 from $473,000 and
$1,260,000 in the comparable three and nine month periods ended September 30,
1996. This was mainly due to a decrease in interest income from the Company's
lease portfolio as a result of the sale of leases for $5.2 million to a
financing company during the first quarter.
INCOME TAXES
The Company's effective income tax rate was a tax credit of 32% in the third
quarter and 0% in the first nine months of fiscal 1996, compared to 41% during
the third quarter and 40% in the first nine months of fiscal 1995. Because of
unusually low revenues and certain additional expenses incurred during the third
quarter of 1996 as explained more fully in the various paragraphs above, the
Company incurred a pre-tax loss for the quarter, which resulted in recording the
tax credit. For the nine month period of 1996, the Company's pre-tax income is
at approximately break-even after considering the non-deductibility of charges
for "Acquired Technology in Process" and certain acquisition related costs,
resulting in a zero tax provision.
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital decreased to $37.4 million at September 30, 1996
from $44.7 million at December 31, 1995. Cash and cash equivalents and short
term investment balances were $16.0 million at September 30, 1996 compared to
$21.1 million at December 31, 1995. Operating activities used $2.7 million
during the nine month period ended September 30, 1996. The Company sold $5.2
million of lease receivables during the first quarter of 1996 with certain
recourse provisions. Cash and cash equivalents were used to purchase property
and equipment ($2.8 million), expenditures for software development costs
capitalized in accordance with Statement of Financial Accounting Standards No.
86 ($2.2 million), and a net cash expenditure of approximately $7.3 million for
the acquisitions of Cybernetics and Pulse Technologies. Proceeds realized from
the exercise of stock options and warrants during the period were $5.6 million.
<PAGE>
As an additional source of liquidity, the Company has a $12.5 million secured
line of credit with a commercial bank that will expire during the second quarter
of 1997 but is expected to be renewed. At September 30, 1996 there were no
borrowings under this line of credit.
The Company anticipates that existing cash and cash equivalents, short term
investments and available borrowings will be adequate to meet its cash
requirements for the next 12 months.
In July 1996, the Board of Directors authorized the buy back of up to $4 million
of the Company's common stock. As of September 30, 1996 the Company has
purchased 25,000 shares for $385,000.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
Exhibit 11.
<PAGE>
EIS International, Inc. and Subsidiaries
Exhibit 11
Statement Re Computation of Per Share Earnings
(in thousands, except for per share amounts)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended Sept. 30, Ended Sept. 30,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Income (Loss) $ (6,886) $ 2,701 $ (19,558) $6,723
---------------------------------------------------------
Net income (loss) per share:
Weighted average number of common and common equivalent shares:
Common shares outstanding 10,970,660 9,807,066 10,560,284 9,660,531
Dilutive effect of stock options and
warrants, primary computation -- 768,827 -- 774,136
------------------------------------------------------------
Weighted average number of common and
common equivalent shares utilized in the
primary earnings per share computation 10,970,660 10,575,893 10,560,284 10,434,667
------------------------------------------------------
Additional dilutive effect of stock
options and warrants, fully diluted
computation -- 7,283 -- 73,845
------------------------------------------------------------
Weighted average number of common and
common equivalent shares utilized in the
fully diluted earnings per share computation 10,970,660 10,583,176 10,560,284 10,508,512
------------------------------------------------------
Primary net income (loss) per share $(.63) $0.26 $(1.85) $0.64
---------------------------------------------------------
Fully diluted net income (loss) per share $(.63) $0.26 $(1.85) $0.64
---------------------------------------------------------
</TABLE>
<PAGE>
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.
EIS INTERNATIONAL, INC.
Date: -------------------- By: ---------------------------------------
Joseph J. Porfeli
Chairman and Chief Executive Officer
Date: -------------------- By: ---------------------------------------
Herbert Balzuweit
Executive Vice President and
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 16,028
<SECURITIES> 0
<RECEIVABLES> 29,813
<ALLOWANCES> 2,329
<INVENTORY> 7,000
<CURRENT-ASSETS> 57,374
<PP&E> 17,051
<DEPRECIATION> 8,745
<TOTAL-ASSETS> 85,458
<CURRENT-LIABILITIES> 19,976
<BONDS> 0
0
0
<COMMON> 111
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 85,458
<SALES> 74,618
<TOTAL-REVENUES> 74,618
<CGS> 34,754
<TOTAL-COSTS> 34,754
<OTHER-EXPENSES> 906
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (19,566)
<INCOME-TAX> (8)
<INCOME-CONTINUING> (19,558)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (19,558)
<EPS-PRIMARY> (1.85)
<EPS-DILUTED> (1.85)
</TABLE>
