<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter ended December 31, 1999 Commission File No.-14841
FRANKLIN ELECTRONIC PUBLISHERS, INCORPORATED
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 22-2476703
- ------------------------------- ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Franklin Plaza, Burlington, New Jersey 08016-4907
- ------------------------------------------ ----------
(Address of principal executive office) (Zip Code)
Registrant's telephone number (609) 386-2500
Indicate by check mark whether 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 preceeding 12 months (or for such shorter period that Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----
COMMON STOCK OUTSTANDING AS OF
DECEMBER 31, 1999 - 7,853,305 SHARES
================================================================================
<PAGE>
FRANKLIN ELECTRONIC PUBLISHERS, INCORPORATED
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
<TABLE>
<CAPTION>
(Unaudited) (Audited)
December 31, March 31,
1999 1999
--------- ---------
<S> <C> <C>
ASSETS
------
CURRENT ASSETS:
Cash and cash equivalents $ 6,861 $ 12,870
Investments in limited partnerships -- 6,045
Accounts receivable, less allowance for doubtful accounts of $1,177 and $928 20,486 17,225
Inventories 12,583 23,934
Income tax receivable 568 3,601
Prepaids and other assets 1,147 3,201
--------- ---------
TOTAL CURRENT ASSETS 41,645 66,876
--------- ---------
PROPERTY AND EQUIPMENT 8,350 9,094
--------- ---------
OTHER ASSETS:
Deferred income tax asset 5,700 5,700
Trademark, less accumulated amortization of $1,263 and $972 14,284 14,576
Advance royalties and licenses 1,336 1,580
Software development costs 4,598 5,338
Other assets 4,522 4,156
--------- ---------
TOTAL OTHER ASSETS 30,440 31,350
TOTAL ASSETS $ 80,435 $ 107,320
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 13,725 $ 19,136
Notes payable -- 40,000
Mortgage note payable -- 3,479
Current portion of long-term liabilities - other 2,130 119
--------- ---------
TOTAL CURRENT LIABILITIES 15,855 62,734
--------- ---------
LONG-TERM LIABILITIES
Revolving credit facility 5,119 --
Notes payable 12,038 --
Other liabilities 1,584 1,541
--------- ---------
TOTAL LONG-TERM LIABILITIES 18,741 1,541
--------- ---------
SHAREHOLDERS' EQUITY:
Preferred stock, $2.50 par value, authorized 10,000,000 shares; none
issued or outstanding -- --
Common stock, no par value, authorized 50,000,000 shares, issued
and outstanding, 7,853,305 and 7,832,955 shares 48,796 48,784
Retained earnings (deficit) (1,741) (4,942)
Foreign currency translation adjustment (1,216) (797)
--------- ---------
TOTAL SHAREHOLDERS' EQUITY 45,839 43,045
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 80,435 $ 107,320
========= =========
</TABLE>
See notes to consolidated financial statements
Page 2
<PAGE>
FRANKLIN ELECTRONIC PUBLISHERS, INCORPORATED
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except for per share data)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
December 31, December 31,
-------------------- --------------------
1999 1998 1999 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
SALES $ 31,248 $ 34,502 $ 81,267 $ 87,632
COST OF SALES 19,183 30,725 53,912 62,553
-------- -------- -------- --------
GROSS MARGIN 12,065 3,777 27,355 25,079
-------- -------- -------- --------
EXPENSES:
Sales and marketing 5,727 10,688 17,395 22,858
Research and development 946 1,503 3,294 4,004
General and administrative 2,297 3,741 8,718 9,527
-------- -------- -------- --------
Total operating expenses 8,970 15,932 29,407 36,389
-------- -------- -------- --------
OPERATING INCOME (LOSS) 3,095 (12,155) (2,052) (11,310)
Interest expense (837) (856) (2,635) (2,578)
Interest and investment income (loss) 89 (41) 305 435
Other, net (287) (62) (489) (699)
Gain on sale of REX -- -- 8,072 --
-------- -------- -------- --------
INCOME (LOSS) BEFORE INCOME TAXES 2,060 (13,114) 3,201 (14,152)
INCOME TAX BENEFIT -- (4,983) -- (5,378)
-------- -------- -------- --------
NET INCOME (LOSS) $ 2,060 $ (8,131) $ 3,201 $ (8,774)
======== ======== ======== ========
NET INCOME (LOSS) PER SHARE:
Basic $ 0.26 $ (1.04) $ 0.41 $ (1.11)
======== ======== ======== ========
Diluted $ 0.26 $ (1.04) $ 0.41 $ (1.11)
======== ======== ======== ========
WEIGHTED AVERAGE SHARES:
Basic 7,853 7,820 7,845 7,894
======== ======== ======== ========
Diluted 7,912 7,820 7,884 7,894
======== ======== ======== ========
</TABLE>
See notes to consolidated financial statements
Page 3
<PAGE>
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(in thousands, except for share data)
(unaudited)
<TABLE>
<CAPTION>
Accumulated
Common Stock Other Total
--------------------- Retained Comprehensive Shareholders'
Shares Amount Earnings Income * Equity
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
BALANCE - MARCH 31, 1999 7,832,955 $ 48,784 $ (4,942) $ (797) $ 43,045
Issuance of shares and amortization of deferred
compensation expense for shares issued for
services (unearned portion $60) 20,350 12 -- -- 12
Income for the period -- -- 3,201 -- 3,201
Foreign currency translation adjustment -- -- -- (419) (419)
BALANCE - DECEMBER 31, 1999 7,853,305 $ 48,796 $ (1,741) $ (1,216) $ 45,839
========= ========= ========= ========= =========
* Comprehensive income, i.e., net income, plus, or less, other comprehensive income, totaled $2,782 for the nine months ended
December 31, 1999.
</TABLE>
See notes to consolidated financial statements.
Page 4
<PAGE>
FRANKLIN ELECTRONIC PUBLISHERS, INCORPORATED
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
December 31,
--------------------
1999 1998
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME (LOSS) $ 3,201 $ (8,774)
ADJUSTMENTS TO RECONCILE NET INCOME (LOSS)
TO NET CASH PROVIDED BY OPERATING ACTIVITIES
Depreciation and amortization 4,251 4,441
Provision for losses on accounts receivable 1,072 188
Loss on disposal of property and equipment 60 40
Gain on sale of REX (8,072) --
Provision for inventory revaluation 2,350 11,216
Deferred income taxes -- (2,500)
Source (use) of cash from change in operating assets and liabilities:
Accounts receivable (4,333) (12,629)
Inventories 4,225 (4,999)
Prepaids and other assets 4,466 (2,035)
Accounts payable and accrued expenses (4,426) 1,729
Other, net 10 100
-------- --------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 2,804 (13,223)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (1,018) (1,392)
Proceeds from sale of property and equipment 33 52
Software development costs (1,125) (1,575)
Proceeds from sale of REX line 12,619 --
Investments in limited partnerships -- (6,000)
Redemption of investments in limited partnerships 6,045 --
Change in other assets (631) (1,399)
-------- --------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 15,923 (10,314)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payment of Senior Notes (26,000) --
Principal payments of mortgage (3,479) (213)
Proceeds from revolving credit facility 5,119 1,000
Proceeds from issuance of common shares -- 268
Purchase of Company common shares -- (2,332)
Other liabilities 43 (61)
-------- --------
NET CASH USED IN FINANCING ACTIVITIES (24,317) (1,338)
EFFECT OF EXCHANGE RATE CHANGES ON CASH (419) 604
-------- --------
DECREASE IN CASH AND CASH EQUIVALENTS (6,009) (24,271)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 12,870 33,923
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 6,861 $ 9,652
======== ========
</TABLE>
See notes to consolidated financial statements
Page 5
<PAGE>
FRANKLIN ELECTRONIC PUBLISHERS, INCORPORATED
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Reference is made to the financial statements included in the Company's annual
Report (Form 10-K) filed with the Securities and Exchange Commission for the
year ended March 31, 1999.
The financial statements for the periods ended December 31, 1999 and 1998 are
unaudited and include all adjustments necessary to a fair statement of the
results of operations for the periods then ended. All such adjustments are of a
normal recurring nature. The results of the Company's operations for any interim
period are not necessarily indicative of the results of the Company's operations
for a full fiscal year.
NOTES PAYABLE
During the quarter ended December 1999, the Company entered into a $25,000,000
secured financing facility with Banc of America Commercial Finance Corporation
at a rate of 3/8% over the prime rate. The credit facility bears a maturity date
of December 7, 2002. At the same time, the Company prepaid $10,000,000 in
principal of its Senior Notes and the $3,290,000 outstanding balance on the
mortgage on its headquarters building from the proceeds of this new credit
facility. After application of the prepayment, which was made without penalty,
the aggregate outstanding principal balance of the Senior Notes was $14,038,000.
In February 2000, the Company voluntarily made an early principal payment of
$2,000,000 on the Senior Notes. Under the restructured Note Agreements, the
remaining balance of the Notes is due over the six years ending March 31, 2006
as follows: 2001 to 2005, $2,000,000 per year; 2006, $2,038,000. As the Company
is no longer in default on the Notes, they have been classified as long-term
liabilities except for the portion due within the next twelve months.
SALE OF REX PRODUCT LINE
In the September 1999 quarter the Company realized a gain of $8,072,000 on the
sale of its REX product line for $13,250,000 and the assumption of related
liabilities. The assets sold consisted primarily of inventory with a carrying
value of approximately $5,000,000 and the Company's trademarks, copyrights,
contract rights and other assets used in connection with the REX business.
OPERATIONS
The Company adopted FAS No. 131, "Disclosure about Segments of an Enterprise and
Related Information", at March 31, 1999. FAS No. 131 establishes annual and
interim reporting standards for an enterprise's operating segments and related
disclosures about its products, services, geographic areas and major customers.
Under FAS No. 131, the Company's operations are treated as one operating segment
as it only reports profit and loss information on an aggregate basis to the
chief operating decision maker of the Company.
Page 6
<PAGE>
FRANKLIN ELECTRONIC PUBLISHERS, INCORPORATED
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
OPERATIONS - Continued
Information about the Company's product sales and major customers are as
follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------------------------- -- --------------------------------------
December 31, December 31,
------------------------------------- -- --------------------------------------
Product Sales 1999 1998 1999 1998
- ---------------------------------- ---------------- ----------------- -- ---------------- --- -----------------
<S> <C> <C> <C> <C>
Reference $23,777 $22,237 $57,132 $60,559
Rolodex 6,888 4,053 15,501 11,328
REX - 7,463 6,194 13,948
Rocket eBook 340 - 1,575 -
Other 243 749 865 1,797
- ---------------------------------- ---------------- ----------------- ---------------- -----------------
Total Sales $31,248 $34,502 $81,267 $87,632
================================== ================ ================= ================ =================
</TABLE>
Approximate foreign sources of revenues including export sales were as follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------------------------- -- --------------------------------------
December 31, December 31,
------------------------------------- -- --------------------------------------
Product Sales 1999 1998 1999 1998
- ---------------------------------- ---------------- ----------------- -- ---------------- --- -----------------
<S> <C> <C> <C> <C>
Europe $7,039 $10,528 $22,291 $22,675
Other International 2,746 2,412 5,191 6,255
</TABLE>
For the three and nine month periods ended December 31, 1999 and 1998, no
customer accounted for more than 10% of the Company's revenues.
RECLASSIFICATIONS
Certain foreign currency losses for prior years have been reclassified from Cost
of Sales to Other, net for comparative purposes.
Page 7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
Three months ended December 31, 1999 as compared with December 31, 1998:
Sales
Sales were $31,248,000 for the quarter ended December 31, 1999 compared with
sales of $34,502,000 for the same quarter one year earlier. The sales decrease
is attributable to the Company's divesture of the REX product line in September
1999. REX sales were $7,463,000 in the December 1998 quarter. The loss of REX
sales was offset in part in the current period by an increase in sales of the
Company's core electronic books and ROLODEX(R) Electronic organizers from
$26,290,000 to $29,165,000 and increased technology licensing revenues of
approximately $1,500,000. Sales by Voice Powered Technology International, Inc.
("VPTI"), an 82% owned subsidiary of the Company, decreased from $748,000 last
year to $243,000 this year.
Gross Margin
Gross margin was $12,065,000 compared with $3,777,000 last year. Gross margin in
the prior year was reduced by a pretax inventory writeoff of $11,216,000. Gross
margin from operations without the effect of the writeoff was 43% last year
compared with 39% in the present period as product mix shifted to more
ROLODEX(R) Electronics organizer products that have lower margins than products
that contain reference content and command higher profit margins.
Operating Expenses
Total operating expenses decreased by $6,962,000 from $15,932,000 in the same
quarter last year to $8,970,000 this period. Sales and marketing expenses
decreased from $10,688,000 (31% of sales) to $5,727000 (18% of sales) primarily
due to a reduction in media advertising expense of $4,519,000 as 1998
advertising expenditures for the REX line were eliminated as a result of the
divesture of the line in September 1999. Research and development expenses
decreased from $1,503,000 (4% of sales) last year to $946,000 (3% of sales)
primarily as a result of a 15% reduction in personnel during the June 1999
quarter. General and administrative expenses decreased in the present period
from $3,741,000 (11% of sales) last year to $2,297,000 (7% of sales) primarily
as a result of lower personnel costs due to the June 1999 quarter restructuring
and the closing of certain foreign offices at that time. Interest expense was
$837,000 compared with $856,000 last year because of decreased debt levels in
the current year. Interest and investment income increased to $89,000 from a
loss of $41,000 recorded last year. The December 1998 quarter included a loss of
approximately $100,000 on the Company's investments in limited partnerships
which investments were redeemed by the Company in April 1999.
Page 8
<PAGE>
Net Income
The Company had net income of $2,060,000, or $.26 per share, for the quarter
ending December 31, 1999, compared with a net loss of $8,131,000, or $1.04 per
share, last year, which loss was impacted by the inventory writedown of
$6,916,000 net of tax benefit of $4,300,000 referenced above and the higher
advertising costs associated with the REX line in December 1998. Because of net
operating loss carryforwards, no income taxes have been provided for by the
Company during the current period.
Nine months ended December 31, 1999 as compared with December 31, 1998:
Sales
Sales were $81,267,000 compared with sales of $87,632,000 for the comparable
period one year earlier. The sales decrease is attributable to lower sales of
the REX line, which decreased from $13,948,000 to $6,194,000 as a result of the
divestiture of the product line in September 1999. Sales of core electronic
books and ROLODEX(R) Electronic organizers were $71,133,000 as compared with
$71,887,000 last year. Sales decreases were offset in part by increased
royalties from technology licenses, which were up by $2,391,000 over last year.
VPTI's sales decreased from $1,796,000 last year to $865,000 in the current nine
month period.
Gross Margin
Gross margin was $27,355,000, or 34% of sales, compared with $ 25,079,000, or
29% of sales, last year which included an inventory writedown of $11,216,000.
Excluding the effect of the writedown, last year's gross margin was $36,295,000
or 41% of sales. The year to year decrease was attributable to costs of
approximately $1,500,000 related to an inventory writedown and price protection
in connection with the Rocket eBook, $2,300,000 of costs associated with the
transition to the new upgraded reference and ROLODEX(R) Electronic products, as
well as the shift in product mix to organizer products that have lower margins
than products that contain reference content.
Operating Expenses
Total operating expenses decreased from $36,389,000 (42% of sales) in the period
last year to $29,407,000 (36% of sales) in the current year. Sales and marketing
expenses decreased from last year's level of $22,858,000 (26% of sales) to
$17,395,000 (21% of sales) due to reduced advertising and media expenditures,
most of which related to the now divested REX line. Research and development
expenses decreased to $3,294,000 (4% of sales) compared with $4,004,000 (5% of
sales) in the prior period. General and administrative expenses were down to
$8,718,000 (11% of sales) compared with $9,527,000 (11% of sales) last year.
Both research and development and general and administrative expenses decreased
primarily as a result of a 15% reduction in personnel in June 1999. Interest
expense increased from $2,578,000 last year to $2,635,000 this year due to
increased interest rates on the Company `s Senior Notes. Interest and investment
income decreased to $305,000 from $435,000 last year mainly due to lower average
cash balances in the current year.
Page 9
<PAGE>
Net Income
On September 27, 1999, the Company sold its REX product line for $13,250,000,
resulting in a gain of $8,072,000 for the second quarter. The Company reported
net income of $3,201,000, or $.41 per share, including the gain of $8,072,000
from the REX divestiture, an inventory writedown of $1,500,000 on the Rocket
eBook and $2, 300,000 of costs associated with the transition to the new product
line for the nine months ending December 31, 1999 compared with a net loss of
$8,744,000, or $1.11 per share, last year, which was impacted by the inventory
writedown and higher advertising costs associated with the REX line described
above. Because of net operating loss carryforwards, no income taxes have been
provided for by the Company during the period.
CHANGES IN FINANCIAL CONDITION
Inventories decreased from $23,934,000 at March 31, 1999 to $12,583,000 at the
end of the December quarter as a result of the REX divestiture and the
seasonally lower sales expected for the March and June quarters. Cash and cash
equivalents of $12,870,000 and investments in limited partnerships of $6,045,000
at March 31, 1999 are compared with cash of $6,861,000 at December 31, 1999. The
investments in limited partnerships were redeemed by the Company in the June
1999 quarter and the Company made a principal payment of $6,000,000 on its
Senior Notes in April 1999. The Company made two additional principal payments
on the Senior Notes of $10,000,000 each from the proceeds of the REX divestiture
in September 1999 and from the proceeds of its new credit facility described
below. Notes payable of $40,000,000 at March 31, 1999 were classified as a
current liability when the Company was in default of certain covenants under the
agreements by which the Senior Notes were issued. Since the closing of the new
credit facility in December 1999, the Company is no longer in default and the
current portion of Senior Notes was $2,000,000 at December 31, 1999 with the
remaining $12,038,000 classified as a long term liability. In February 2000, the
Company voluntarily made an early principal prepayment of $2,000,000 on the
Senior Notes. Accounts payable had a seasonal decrease from $19,136,000 to
$13,725,000. Income tax receivable of $3,601,000 at March 31 decreased to
$568,000 at December 31, 1999 as the Company received a portion of its tax
refund during the September quarter. Prepaids and other assets decreased from
$3,201,000 to $1,147,000 primarily as a result of a reduction in advance
payments to vendors and barter credits available. Accounts receivable increased
from $17,225,000 to $20,486,000 as a result of seasonally higher sales.
LIQUIDITY AND CAPITAL RESOURCES
In December 1999, the Company entered into a $25,000,000 secured financing
facility with Banc of America Commercial Finance Corporation at a rate of
3/8% over the prime rate. At that time, the Company prepaid $10,000,000 in
principal of its Senior Notes from the proceeds of this new credit facility
and the Senior Note Agreements were restructured to allow the Company to
continue to operate under the Senior Note Agreements going forward. After
application of the prepayment, which was made without penalty, the
aggregate outstanding principal of the Senior Notes was $14,038,000 at
December 1999. The Company also prepaid the balance of the mortgage on its
headquarters facility of approximately $3,290,000 from the proceeds of its
new credit facility. The Company pays a commitment fee of 0.5% per annum on
the unused portion of the credit facility. At
Page 10
<PAGE>
December 31, 1999, borrowings under the revolving line of credit were
$5,119,000. In February 2000, the Company voluntarily made an early principal
prepayment of $2,000,000 on the Senior Notes. Management believes that cash flow
from operations and the revolving line of credit will be adequate to provide for
the Company's liquidity and capital needs for the foreseeable future.
The Company has no material commitments for capital expenditures in the next
twenty-four months.
Year 2000 Compliance
The Company has completed remediation of its existing operational software in
connection with the year 2000. The cost of remediation was $355,000 of which
approximately $15,000 was expensed during the nine months ended December 31,
1999 and $340,000 was expensed in the prior years.
PART II.
ITEM 1. LEGAL PROCEEDINGS
In July 1999, the Company was served with a complaint in the United
States District Court for the Southern District of New York by Aral
Holdings, Inc., seeking damages of approximately $1.1 million for,
inter alia, alleged breach of contract in connection with a website
and interactive services consulting agreement, punitive damages in
an unspecified amount but alleged to be in excess of $5 million,
and injunctive relief in connection with alleged trade secret
misappropriation. The Company disputes the allegations of the
complaint and intends vigorously to defend this litigation.
The Company is subject to litigation from time to time arising in
the ordinary course of its business. The Company does not believe
that any such litigation, including the class action litigation
identified above, is likely, individually or in the aggregate, to
have a material adverse effect on the financial condition of the
Company.
ITEM 2. CHANGES IN SECURITIES - NONE
ITEM 3. DEFAULT UPON SENIOR SECURITIES - NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS - NONE
ITEM 5. OTHER INFORMATION - ROLODEX(R) is a registered trademark of
Berol Corporation, a subsidiary of Newel Rubbermaid Inc. Rocket
eBook is a trademark of NuvoMedia Inc.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Two reports on Form 8-K were filed by the Company during the
quarter ended December 31, 1999 relating to the REX divestiture and
the Company's refinancing. A report on Form 8-K was filed by the
Company on January 4, 2000 relating to the resignation of a
director.
Page 11
<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.
FRANKLIN ELECTRONIC PUBLISHERS,
INCORPORATED
Registrant
February 11, 1999 /s/ Barry J. Lipsky
- ----------------- ---------------------
Date Barry J. Lipsky
President and Chief Executive Officer
(Duly Authorized Officer)
February 11, 1999 /s/ Arnold D. Levitt
- ----------------- -----------------------
Date Arnold D. Levitt
Senior Vice President
Principal Financial and Accounting Officer
(Duly Authorized Officer)
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF FRANKLIN ELECTRONICS PUBLISHERS
INCORPORATED AND SUBSIDIARIES AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-mos
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-START> APR-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 6,861
<SECURITIES> 0
<RECEIVABLES> 21,663
<ALLOWANCES> 1,177
<INVENTORY> 12,583
<CURRENT-ASSETS> 41,645
<PP&E> 20,991
<DEPRECIATION> 12,641
<TOTAL-ASSETS> 80,435
<CURRENT-LIABILITIES> 15,855
<BONDS> 0
0
0
<COMMON> 48,796
<OTHER-SE> (2,957)
<TOTAL-LIABILITY-AND-EQUITY> 80,435
<SALES> 81,267
<TOTAL-REVENUES> 81,267
<CGS> 53,912
<TOTAL-COSTS> 53,912
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,072
<INTEREST-EXPENSE> 2,635
<INCOME-PRETAX> 3,201
<INCOME-TAX> 0
<INCOME-CONTINUING> 3,201
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,201
<EPS-BASIC> .41
<EPS-DILUTED> .41
</TABLE>
