<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 30, 1997
COMMISSION FILE NUMBER: 0-4384
MICRODYNE CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MARYLAND 52-0856493
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
3601 EISENHOWER AVENUE, ALEXANDRIA, VA 22304
(Address of principal executive office) (Zip Code)
(703) 329-3700
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or 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:
<TABLE>
<CAPTION>
CLASS OUTSTANDING AT MARCH 30, 1997
---------------------------- -----------------------------
<S> <C>
Common stock, $.10 par value 12,872,205
</TABLE>
Page 1 of 11 pages
Exhibit Index appears on page 11
<PAGE> 2
MICRODYNE CORPORATION
INDEX
<TABLE>
<CAPTION>
PAGE NUMBER
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Statements of Operations
Three and six months ended March 30, 1997
and March 31, 1996 3
Balance Sheets
March 30, 1997 and September 29, 1996 4
Statements of Cash Flows
Six months ended March 30, 1997
and March 31, 1996 5
Notes to Consolidated Financial
Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 7
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports. 11
SIGNATURES 11
</TABLE>
2
<PAGE> 3
MICRODYNE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
Dollars and shares in thousands, March 30, March 31,
except per share data 1997 1996
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Revenue:
Product $ 4,902 $ 13,939
Service 6,404 3,607
--------- -----------
Total revenue 11,306 17,546
Cost of product sold and service provided:
Product 4,806 10,560
Service 4,447 2,504
--------- ---------
Total cost of product sold and service provided 9,253 13,064
Gross profit 2,053 4,482
Selling, general and administrative 5,193 6,376
Research and development 1,054 1,042
Amortization of intangibles -- 530
Restructuring charges 26,607 --
--------- ---------
Loss from operations (30,801) (3,466)
Other expense, net (406) (502)
-------- --------
Loss before income taxes (31,207) (3,968)
Income tax benefit (4,030) (1,508)
-------- --------
Net loss $ (27,177) $ (2,460)
========= ========
Net loss per share $ (2.11) $ (0.19)
========= ========
Weighted average shares outstanding 12,864 12,806
====== =======
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
Dollars and shares in thousands, March 30, March 31,
except per share data 1997 1996
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Revenue:
Product $ 21,852 $ 43,287
Service 10,375 7,276
-------- ---------
Total revenue 32,227 50,563
Cost of product sold and service provided:
Product 15,028 32,584
Service 7,243 4,885
-------- ---------
Total cost of product sold and service provided 22,271 37,469
Gross profit 9,956 13,094
Selling, general and administrative 9,934 12,354
Research and development 1,983 2,203
Amortization of intangibles 741 981
Restructuring charges 26,607 --
--------- --------
Loss from operations (29,309) (2,444)
Other expense, net (932) (947)
--------- -------
Loss before income taxes (30,241) (3,391)
Income tax benefit (3,674) (1,289)
---------- --------
Net loss $ (26,567) $ (2,102)
========== ========
Net loss per share $ (2.07) $ (0.16)
========== ========
Weighted average shares outstanding 12,852 12,799
====== =======
</TABLE>
The notes on the following pages are an integral part of these statements
3
<PAGE> 4
MICRODYNE CORPORATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 30 September 29,
Dollars in thousands 1997 1996
- ------------------------------------------------------------------------------------------------------
(unaudited) (audited)
ASSETS
<S> <C> <C>
CURRENT ASSETS
Cash $ 1,170 $ 1,791
Accounts receivable 14,471 30,954
Inventories 11,430 24,100
Income tax receivable 2,198 1,946
Prepaid expenses and other 580 1,231
Deferred income tax asset 3,017 1,053
--------- --------
Total current assets 32,866 61,075
PROPERTY AND EQUIPMENT, net 3,287 3,746
PRODUCT LINE ACQUISITION COST -- 14,417
OTHER ASSETS 219 756
--------- ---------
$ 36,372 $ 79,994
========= ==========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
CURRENT LIABILITIES
Current maturities of
long-term obligations $ 11,634 $ 15,719
Accounts payable E trade 7,213 9,365
Accrued liabilities 3,159 7,315
----------- -----------
Total current liabilities 22,006 32,399
LONG-TERM OBLIGATIONS
net of current maturities 4,227 11,071
STOCKHOLDERS' EQUITY
Common stock, $.10 par value
authorized 50,000,000 shares,
12,872,205 shares issued and
outstanding at March 30, 1997,
and 12,832,203 shares issued and
outstanding at September 29, 1996 1,287 1,283
Additional paid-in-capital 10,195 10,016
Retained earnings (1,343) 25,225
---------- ---------
Total Stockholders' Equity 10,139 36,524
---------- ---------
$ 36,372 $ 79,994
========== ==========
</TABLE>
The notes on the following pages are an integral part of these statements
4
<PAGE> 5
MICRODYNE CORPORATION
Consolidated Statement of Cash Flows
(Dollars in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
3/30/97 3/31/96
------- -------
<S> <C> <C>
Increase (Decrease) in Cash
Cash flows from operating activities:
Net loss $ (26,567) $ (2,102)
Adjustments to reconcile net loss to net cash
from operating activities:
Depreciation and amortization 1,333 1,439
Provision for doubtful accounts receivable and
inventory obsolescence 89 258
Non-cash restructuring charges 26,607 -
Changes in assets and liabilities
Decrease in accounts receivable 11,308 22,966
Decrease (increase) in inventories 3,723 (5,655)
Decrease (increase) in prepaid expenses 50 (2,487)
Decrease (increase) in other assets 55 (28)
Increase in income tax receivable (252) (807)
Increase in deferred tax asset (1,915) (51)
Decrease in accounts payable and
other accruals (4,320) (22,166)
---------- -----------
Net cash provided by (used in) operating activities 10,111 (8,633)
Cash flows from investing activities:
Additions to property and equipment (287) (263)
Other investing activities - 29
--------- ---------
Net cash used in investing activities (287) (234)
Cash flows from financing activities:
(Payments on) increase in bank debt (9,390) 5,800
Payments on notes payable (1,238) (41)
Issuance of common stock 183 40
---------- ---------
Net cash (used in) provided by financing activities (10,445) 5,799
------- ------
Net decrease in Cash (621) (3,068)
Cash at beginning of period 1,791 4,587
--------- ----------
Cash at end of period $ 1,170 $ 1,519
=========== ===========
</TABLE>
The notes on the following pages are an integral part of these statements
5
<PAGE> 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The interim financial information is unaudited. In the opinion of
management, the financial statements included in this report reflect all normal
recurring adjustments which Microdyne Corporation ("the Company") considers
necessary for a fair presentation of the results of operations for the interim
periods covered and of the financial position of the Company at the date of the
interim balance sheet. The results for interim periods are not necessarily
indicative of the results for the entire year.
In addition, preparation of financial statements in conformance with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities as of the date of the financial
statements, and the reported amounts of revenues and expenses for the periods
reported. Actual results could differ from these estimates.
The accompanying unaudited financial statements have been prepared in
accordance with the instructions for Form 10-Q, and therefore footnote
disclosures normally accompanying financial statements have been substantially
omitted. These condensed financial statements should be read in conjunction
with complete disclosures accompanying the financial statements contained in
the Company's most recent Annual Report on Form 10-K.
2. The provision for income taxes presented in the Statements of Operations
is based upon the estimated effective tax rate at fiscal year-end, and is
largely determined by management's estimate as of the interim date of projected
taxable income for the entire fiscal year.
3. Restructuring Charges. In the second fiscal quarter of 1997, the
Company took several dramatic steps in recognition of events and competitive
factors occuring within its Networking Products Division. These events
included price reductions of approximately 40% initiated by other vendors of
adapter cards, a slowing of industry growth, and slower sales of the Company's
products out of distribution due, at least in part, to declining industry
allegiance to Novell, Inc. technology. As a result of these events, management
has restructured its Networking Products business by reducing the amount of
product held by distributors and realigning its product offerings with a new
line of low-cost, high-performance adapter cards. The realignment of the
Company's product lines included abandoning certain products and technology
acquired during 1994 through 1996, resulting in the write-off of capitalized
acquisition costs. The financial statement impact of the above actions was to
record a restructuring charge of $26.6 million, which was comprised of the
following (in 000's):
<TABLE>
<S> <C>
Write off of abandoned technology and product rights $ 14,539
Write down of inventories 9,394
Charges associated with product returns and distribution credits,
net of release of associated reserves 2,674
---------
$ 26,607
</TABLE>
The income tax benefit associated with the above charges and other net
operating losses and deductible temporary differences between financial
statement and taxable income has been offset by a valuation allowance of
approximately $8 million due to uncertainty relative to realization of such tax
benefits in the future. The extent to which Microdyne will realize all or part
of the additional tax benefit is dependent upon the Company's future earnings.
6
<PAGE> 7
PART 1. - FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
GENERAL
Microdyne Corporation ("the Company" or "Microdyne") has three
businesses: products and systems integration for aerospace telemetry, which is
carried out through the Aerospace Telemetry Division ("ATD"); outsourced
technical services, which is carried out through its Microdyne Support Services
Division ("MSSD"); and networking products, which is carried out through its
Networking Products Division ("NPD"). The first two of these business have
performed and continue to perform very well, yielding steady revenue, income
growth, and positive cash flow. The third business, NPD, incurred operating
losses in the quarter and was the subject of a restructuring.
The Company believes demand for ATD's products is strong and that such
demand should continue. In 1997, ATD is seeing an increasing number of orders
from commercial enterprises, including those associated with satellite-based
communications. In December 1996, ATD received an $11 million systems
integration contract from the Italian Ministry of Defense. The Company expects
to recognize approximately $8 million of revenue from this contract during
fiscal 1997.
Microdyne Support Services Division (formerly called Manufacturer
Support Services) revenue continues to meet the Company's revenue and profit
contribution expectations. In January 1997, the Company signed an additional
contract to handle additional telephone technical support calls, and in March
1997, MSSD opened an independent call center in Carson, California.
NPD competes with much larger companies in an industry characterized
by rapid technological change and intense marketing and price competition. NPD
is a relatively small factor in the industry and cannot readily match the
expenditures for sales, engineering, and marketing of many other companies. To
be competitive, NPD follows pricing trends set by larger companies.
Through fiscal 1996 and the first quarter of fiscal 1997, NPD sought
to decrease the amount of product in its distribution channel. NPD's efforts
to do so were affected by declining sales out of distribution of its products,
which the Company attributes at least in part, to declining industry allegiance
to Novell technology and the Novell brand-name under which most NPD products
have been marketed. Concurrently, NPD's ended sales of Novell software bundled
with NPD hardware. As a result, NPD was unprofitable for much of fiscal 1996.
In the first and second quarters of fiscal 1997, a series of events
caused the Company to re-evaluate its presence in, and the value of its assets
relating to, the networking products business. These included a February 1997
price war among the industry's largest players that resulted in a 40% decline
in adapter card prices across the industry, together with evidence of a slowing
in industry growth in the form of earnings warnings from several companies that
derive substantial revenues from adapter card sales.
These events caused the Company to restructure NPD in the second
quarter. The restructuring includes these elements:
- - The Company wrote down its existing investments in adapter card
technology, as well as its investment in marketing rights to the Novell brand
name. The Company took a charge of $14.5 million to effect this write down.
- - The Company discontinued certain NPD product lines in which it is no
longer competitive, incurring $2.7 million in charges.
- - The Company wrote down the value of its inventory by $9.4 million to
reflect its current value.
In addition to the restructuring charges taken by the Company,
Microdyne also took steps in the second quarter to make its business more
competitive and profitable. By restricting shipments in the quarter to a net
$564,000, NPD drew down inventory held by distributors to approximately 35
days of anticipated sales. NPD has developed and intends to introduce during
the third quarter
7
<PAGE> 8
of 1997 a line of low-cost, high-performance adapter cards and other networking
products. NPD is also making other adjustments in its marketing and sales
strategies to adapt to the current environment.
Because of the restructuring of NPD, comparisons with prior periods
for both the division and the Company are not meaningful in interpreting
current business trends. The restructuring of the Networking Products business
should lessen, though not eliminate the possibility of, future volatility in
the Company's performance. The Company anticipates NPD sales in the third
fiscal quarter of 1997 in the range of $10 million.
The statements in this Management's Discussion and Analysis contain
forward-looking statements that involve a number of risks and uncertainties,
the possible realization of which could have material adverse effects on the
Company's future operating results. Factors that may cause actual results to
differ materially include: uncertainty associated with the operation of the
restructured NPD; development of new products and rapid changes in technology
that may displace products sold by the Company; the highly competitive
networking products environment in which the Company operates; agreements
between Microdyne and Novell; NPD's reliance upon distributors to sell
networking products; fluctuations in the Company's quarterly results of
operations and the timing of orders from customers; the declining average
selling prices of NPD's products; the Company's dependence upon a limited
number of subcontractors for the manufacture of the Company's products and upon
a limited numbers of suppliers for the availability of components used in the
Company's products; the Company's success in identifying, acquiring and
incorporating commercially successful technology, products, or businesses; the
Company's relationships with sources of external financing; and the risk
factors listed from time to time in the Company's SEC filings, including but
not limited to the S-3 Registration Statement dated November 9, 1995; the
Annual Report on Form 10-K for the year ended September 29, 1996; and the
Quarterly Report on Form 10-Q for the quarter ended December 29, 1997.
Any shortfall in revenue or earnings from the levels expected by
securities analysts could have an immediate and significant effect of the
trading price of the Company's common stock in any given period. Moreover, as
in the first quarter of fiscal 1996, the Company may not learn of such
shortfalls until late in the fiscal quarter as a result of historical ordering
patterns. Late receipt of this information could result in an even more
immediate and adverse effect on the trading price of the Company's stock.
RESULTS OF OPERATIONS
QUARTER ENDED MARCH 30, 1997 COMPARED TO QUARTER ENDED MARCH 31, 1996
Revenue for the second quarter of fiscal year 1997 decreased to $11.3
million from $17.5 million in the second quarter of fiscal year 1996, a
decrease of 35.4%.
Networking Products revenue decreased to a net $0.5 million in 1997
from $11.1 million in 1996. As part of the restructuring of the NPD, the
Company elected to ship minimal networking hardware and, in some cases, to take
back hardware previously shipped. Also, the Company exited the Bundled
Products business and recalled all product previously distributed but unsold
under that program. As a result, the Company believes stocking distributors
held inventory equal to approximately 35 days of sales as of the beginning of
the third fiscal quarter of 1997. Any comparison of either total sales of
networking products or of constituent product lines within networking products
is not meaningful with prior year figures.
Aerospace Telemetry sales were $6.6 million in 1997's second quarter
versus $3.2 million in 1996. Revenue in 1997 includes approximately $2.3
million from a systems integration contract signed in December 1996. Hardware
sales of $4.3 million reflect increased demand for telemetry products and sales
from new, board-level telemetry products. Revenue in the second quarter of
1996 was depressed because the impasse over the Federal budget prevented
certain agencies from ordering products.
Microdyne Support Services revenue grew to $4.1 million in 1997 from
$3.5 million in 1996, reflecting continued growth in support activities.
8
<PAGE> 9
Gross profit decreased to $2.1 million in 1997 from $4.5 million in
1996 owing to lower Networking Products sales. NPD's manufacturing
infrastructure includes approximately $0.9 million per quarter of fixed
overhead which was not absorbed because of minimal hardware shipments.
Aerospace Telemetry gross margins rose in dollars but declined as a percentage
of sales because of the inclusion of lower-margin systems revenues in 1997.
Microdyne Support Services gross margins were stable as a percentage of sales
in 1997 versus 1996.
SG&A expense decreased to $5.2 million in 1997 from $6.4 million in
1996. The decrease in SG&A expense reflects corporate and NPD cost reductions
offset by higher SG&A expense at the Aerospace Telemetry Division. Research
and development expense rose to $1.5 million in 1997 from $1.0 in 1996.
Beginning in 1997's second quarter, all Company R&D are expensed in the quarter
in which they are incurred. Previously, certain NPD R&D costs were
capitalized. Owing to the restructuring, the Company had no amortization
expense in the second quarter of 1997 (versus $0.5 million in 1996).
The Company recorded a $26.6 million restructuring charge in 1997.
The components of that charge are detailed above in "Financial Information E
General" and "Notes to Consolidated Financial Statements."
Interest and other expense in both 1997 and 1996 is primarily interest
expense associated with outstanding borrowings against the Company's line of
credit, as well as interest associated with Novell notes payable.
The tax rate utilized in 1997 is 12.9% versus 38% in 1996. The
reduction in tax rate for 1997 reflects the losses incurred in the second
quarter on the company's full-year anticipated results. Because Microdyne
expects to report a loss for the fiscal year ended September 27, 1997, the
continued provision of income taxes is under review.
SIX MONTHS ENDED MARCH 30, 1997 COMPARED TO SIX MONTHS ENDED MARCH 31, 1996
Revenue for the first six months of fiscal year 1997 decreased to
$32.2 million from $50.6 million in the first six months of fiscal year 1996.
NPD revenue decreased to a net $12.9 million in 1997 from $36.0 million in
1996, due largely to the decision to draw down inventories to approximately 35
days of sales in the second quarter, and to exit the Bundled Products business.
Any comparison of either total sales of networking products or of constituent
product lines within networking products is not meaningful with prior year
figures.
Aerospace Telemetry sales were $11.4 million in 1997 versus $8.2
million in 1996. Revenue in 1997 includes approximately $2.3 million from a
systems integration contract signed in December 1996. Hardware sales in 1997
reflect increased demand for telemetry products and sales from new, board-level
telemetry products. Microdyne Support Services revenue grew to $8.0 million in
1997 from $7.0 million in 1996, reflecting continued growth in support
activities.
Gross profit decreased to $10.0 million in 1997 from $13.1 million in
1996 owing to lower NPD sales contrasted with fixed manufacturing overhead.
Aerospace Telemetry gross margins rose in dollars but declined as a percentage
of sales because of the inclusion of lower-margin systems revenues in the
second quarter of 1997. Microdyne Support Services gross margins were stable
as a percentage of sales in 1997 versus 1996.
SG&A expense decreased to $9.9 million in 1997 from $12.4 million in
1996. The decrease in SG&A expense reflects corporate and NPD cost reductions.
Research and development expense was stable at $2.0 million in 1997 and $2.2 in
1996. Amortization expense was $0.7 million in 1997 versus $1.0 million in
1996.
The Company recorded a $26.6 million restructuring charge in 1997.
The components of that charge are detailed above in "Financial Information E
General" and "Notes to Consolidated Financial Statements."
Interest and other expense in both 1997 and 1996 is primarily interest
expense associated with outstanding borrowings against the Company's line of
credit. Interest expense in 1997 also
9
<PAGE> 10
includes interest associated with the Novell notes payable. The tax rates
utilized in 1997 is 12.9% versus a 1996 rate 38%.
LIQUIDITY AND CAPITAL RESOURCES
Historically, the Company has financed its operations through
internally generated funds, and used external financing in connection with
product-line and technology acquisitions and the repurchase of its common
stock. In the first half of 1996, the Company used external funds to finance
its operations, and at March 31, 1996, bank debt stood at $25.7 million. Since
that time, the Company has worked to reduce its indebtedness by producing
substantial cash flow from operations. Through these efforts, bank debt was
reduced to $8.4 million at March 30, 1997.
As of March 30, 1997, the Company's $8.4 million of bank debt
consisted of a $0.7 million term note which is repaid in monthly payments and
is scheduled to be fully satisfied in May 1997; and $7.7 million in outstanding
borrowings under a revolving line of credit facility. On March 30, 1997, the
Company had $1.2 million of cash and $6.8 million in unused line of bank
credit. The revolving line of credit is scheduled to be reduced to $8.0
million at March 31, 1997 and to $5.0 million by June 30, 1997.
In April 1996, the Company utilized cash and notes to purchase from
Novell the exclusive, royalty-free perpetual right to market certain hardware
and related technology which were previously sold by the Company under license
from Novell, and to convert certain accounts payable. As of March 30, 1997,
notes payable due Novell totaled $6.4 million, of which $2.6 million has been
classified as a short-term obligation and $3.8 million as a long-term
obligation on the March 30, 1997 Balance Sheet.
During the first six months of fiscal 1997, cash provided by operating
activities was $10.1 million. Capital expenditures were minimal. However, the
Company believes that capital investment in its aerospace telemetry and
outsourced technical services businesses will be required in order to achieve
growth targets set for those businesses. Accordingly, the Company is prepared
to make such investments as are required over the next twelve months.
During the first six months of 1997, the Company repaid a total of
$10.6 million of debt, including $9.1 million of bank debt and $1.5 million of
other debt.
The Company's restructuring had the result of decreasing accounts
receivable (as product was taken back from distributors), inventories (as the
value of inventory held by the Company was written down), and accounts payable
(as less product was built). The Company believes the restructuring had little
or no effect on cash.
The Company believes its available cash, funds generated from
operations, and funds available under its credit facilities should be
sufficient to finance its continuing operations. The Company may from time to
time consider the acquisition of businesses, products, or technologies that may
require additional funds.
10
<PAGE> 11
PART II. - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Stockholders of the Registrant was held March
17, 1997. Results of the voting for directors was as follows:
<TABLE>
<CAPTION>
Votes For Votes Against Abstained or Unvoted
<S> <C> <C> <C>
Philip T. Cunningham 12,786,908 85,036 0
Christopher M. Maginniss 12,786,808 85,136 0
Curtis M. Coward 12,786,708 85,236 0
Gregory W. Fazakerley 12,786,886 85,058 0
H. Brian Thompson 12,786,908 85,036 0
</TABLE>
Item 6. Exhibits and Reports.
(a) No exhibits are enclosed herein.
(b) A Form 8-K was filed on March 29, 1997 relating to announcements made at
Microdyne's Annual Meeting of Shareholders.
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.
MICRODYNE CORPORATION
---------------------
Registrant
Date: May 13, 1997 /s/ Michael E. Jalbert
------------------------------ ---------------------------
Michael E. Jalbert
President and Chief Executive Officer
[Duly Authorized Officer]
Date: May 13, 1997 /s/ Christian J. Spitz
------------------------------ ----------------------
Christian J. Spitz
Vice President and Chief
Financial Officer
[Principal Financial Officer]
11
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-28-1997
<PERIOD-START> DEC-30-1996
<PERIOD-END> MAR-30-1997
<CASH> 1,170
<SECURITIES> 0
<RECEIVABLES> 15,575
<ALLOWANCES> (1,104)
<INVENTORY> 11,430
<CURRENT-ASSETS> 32,866
<PP&E> 11,892
<DEPRECIATION> (8,605)
<TOTAL-ASSETS> 36,372
<CURRENT-LIABILITIES> 22,006
<BONDS> 0
0
0
<COMMON> 1,287
<OTHER-SE> 8,852
<TOTAL-LIABILITY-AND-EQUITY> 36,372
<SALES> 11,306
<TOTAL-REVENUES> 11,306
<CGS> 9,253
<TOTAL-COSTS> 9,253
<OTHER-EXPENSES> 32,854
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 406
<INCOME-PRETAX> (31,207)
<INCOME-TAX> (4,030)
<INCOME-CONTINUING> (27,177)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (27,177)
<EPS-PRIMARY> ($2.11)
<EPS-DILUTED> ($2.11)
</TABLE>
