<TABLE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
<CAPTION>
<S> <C>
X Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
- ---
For the quarterly period ended June 30, 1999
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 0-13470
---------------------------------------
NANOMETRICS INCORPORATED
- ------------------------------------------------------
(Exact name of registrant as specified in its charter)
California 94-2276314
------------------------------- -------------------
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
310 DeGuigne Drive, Sunnyvale, CA 94086
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (408) 746-1600
---------------------
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
---- ----
At July 14, 1999 there were 8,778,981 shares of common stock, no par value,
issued and outstanding.
</TABLE>
1
<PAGE>
NANOMETRICS INCORPORATED
INDEX
Part I. Financial Information Page
----
Item 1. Financial Statements
Consolidated Balance Sheets -
June 30, 1999 and December 31, 1998 ....................... 3
Consolidated Statements of Income -
Three months and six months ended
June 30, 1999 and 1998 .................................... 4
Consolidated Statements of Cash Flows -
Six months ended June 30, 1999 and 1998 ................... 5
Notes to Consolidated Financial
Statements ................................................ 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations ............. 8
Item 3. Quantitative and Qualitative Disclosures
about Market Risk ......................................... 11
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders ....... 12
Item 6. Exhibits and Reports on Form 8-K .......................... 12
Signatures .................................................................. 13
2
<PAGE>
PART I: FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
<TABLE>
NANOMETRICS INCORPORATED
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands except share amounts)
(Unaudited)
<CAPTION>
June 30, December 31,
ASSETS 1999 1998
--------- ----------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 973 $ 1,518
Short-term investments 13,870 9,913
Accounts receivable, less allowance for
doubtful accounts of $417 and $420 6,802 8,458
Inventories 10,172 11,719
Deferred income taxes 1,442 1,441
Prepaid expenses and other 1,379 2,328
--------- ----------
Total current assets 34,638 35,377
PROPERTY, PLANT AND EQUIPMENT, NET 2,308 2,481
DEFERRED INCOME TAXES 560 560
OTHER ASSETS 784 887
--------- ----------
TOTAL $ 38,290 $ 39,305
========= ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,188 $ 1,395
Accrued payroll and related expenses 418 317
Other current liabilities 1,328 1,720
Current portion of long-term debt 818 1,324
--------- ----------
Total current liabilities 3,752 4,756
DEFERRED RENT 56 43
DEBT OBLIGATIONS 2,135 2,496
--------- -----------
Total liabilities 5,943 7,295
--------- -----------
SHAREHOLDERS' EQUITY:
Common stock, no par value; 25,000,000 shares
authorized; 8,778,481 and 8,690,643 outstanding 14,519 14,170
Retained earnings 18,077 17,974
Accumulated other comprehensive loss (249) (134)
--------- -----------
Total shareholders' equity 32,347 32,010
--------- -----------
TOTAL $ 38,290 $ 39,305
========= ===========
<FN>
See Notes to Consolidated Financial Statements
</FN>
</TABLE>
3
<PAGE>
<TABLE>
NANOMETRICS INCORPORATED
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share amounts)
(Unaudited)
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1999 1998 1999 1998
----------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
NET REVENUES:
Product sales $ 6,468 $ 9,705 $ 11,733 $ 19,323
Service 1,055 1,023 1,979 1,943
--------- -------- --------- --------
Total net revenues 7,523 10,728 13,712 21,266
--------- -------- --------- --------
COSTS AND EXPENSES:
Cost of product sales 2,984 4,029 5,536 7,658
Cost of service 1,017 967 2,121 1,952
Research and development 1,094 1,063 2,110 2,294
Acquired in-process research and
development - - - 1,421
Selling 1,309 1,529 2,586 3,101
General and administrative 724 694 1,365 1,479
--------- -------- --------- --------
Total costs and expenses 7,128 8,282 13,718 17,905
--------- -------- --------- --------
OPERATING INCOME (LOSS) 395 2,446 (6) 3,361
OTHER INCOME (EXPENSE):
Interest income 174 156 312 317
Interest expense (20) (20) (41) (46)
Other, net (42) (139) (93) (148)
---------- --------- --------- ---------
Total other income (expense), net 112 (3) 178 123
--------- --------- --------- ---------
INCOME BEFORE PROVISION
FOR INCOME TAXES 507 2,443 172 3,484
PROVISION FOR INCOME TAXES 203 948 69 1,365
--------- -------- --------- --------
NET INCOME $ 304 $ 1,495 $ 103 $ 2,119
========= ======== ========= ========
NET INCOME PER SHARE:
Basic $ .03 $ .17 $ .01 $ .25
========== ======== ========= ========
Diluted $ .03 $ .17 $ .01 $ .24
========== ======== ========= ========
SHARES USED IN PER SHARE
COMPUTATION:
Basic 8,757 8,641 8,729 8,593
========== ======== ========= ========
Diluted 9,177 9,003 9,190 8,991
========== ======== ========= ========
<FN>
See Notes to Consolidated Financial Statements
</FN>
</TABLE>
4
<PAGE>
<TABLE>
NANOMETRICS INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
<CAPTION>
Six Months Ended
June 30,
1999 1998
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 103 $ 2,119
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 103 119
Deferred rent 13 13
Purchase of in-process technology -- 1,421
Deferred taxes 11 (656)
Changes in assets and liabilities net of effects of product line acquisition:
Accounts receivable 1,355 (830)
Other receivables (2) (3)
Inventories 1,483 (2,081)
Prepaid income taxes 904 --
Prepaid expenses and other 132 255
Accounts payable and other liabilities (486) 252
Income taxes payable -- (101)
-------- --------
Net cash provided by operating activities 3,616 508
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of short-term investments (13,870) (11,126)
Sales/maturities of short-term investments 9,913 10,849
Capital expenditures (64) (123)
Product line acquisition -- (3,038)
-------- --------
Net cash used in investing activities (4,021) (3,438)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt (635) (204)
Issuance of common stock 350 575
-------- --------
Net cash provided by (used in) financing activities (285) 371
-------- --------
EFFECT OF EXCHANGE RATE CHANGES ON CASH 145 (164)
-------- --------
NET CHANGE IN CASH AND EQUIVALENTS (545) (2,723)
CASH AND EQUIVALENTS, beginning of period 1,518 3,656
-------- --------
CASH AND EQUIVALENTS, end of period $ 973 $ 933
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for interest $ 42 $ 49
======== ========
Cash paid for income taxes $ -- $ 2,122
======== ========
<FN>
See Notes to Consolidated Financial Statements
</FN>
</TABLE>
5
<PAGE>
NANOMETRICS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 Consolidated Financial Statements
The consolidated financial statements include the accounts of Nanometrics
Incorporated and its wholly owned subsidiaries. All significant inter-company
accounts and transactions have been eliminated.
While the quarterly financial statements are unaudited, the financial
statements included in this report reflect all adjustments (consisting only of
normal recurring adjustments) which the Company considers necessary for a fair
presentation of the results of operations for the interim periods covered and of
the financial condition of the Company at the date of the interim balance sheet.
The operating results for interim periods are not necessarily indicative of the
operating results that may be expected for the entire year. The information
included in this report should be read in conjunction with the information
included in the Company's 1998 Annual Report on Form 10-K filed with the
Securities and Exchange Commission.
Note 2. Inventories
Inventories are stated at the lower of cost (first-in, first-out) or
market and consist of the following (in thousands):
June 30, December 31,
1999 1998
------- -------
Raw materials and subassemblies $ 4,585 $ 3,859
Work in process 3,044 2,253
Finished goods 2,543 5,607
------- -------
$10,172 $11,719
======= =======
Note 3. Other Current Liabilities
Other current liabilities consist of the following (in thousands):
June 30, 1999 December 31, 1998
------------ -----------------
Commissions payable $ 329 $ 366
Accrued warranty 486 581
Other 513 773
------ ------
$1,328 $1,720
====== ======
Note 4. Net Income Per Share
<TABLE>
The reconciliation of the share denominator used in the basic and diluted
net income per share computations is as follows (in thousands):
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
1999 1998 1999 1998
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Weighted average common shares
outstanding-shares used in basic
net income per share computation 8,757 8,641 8,729 8,593
Dilutive effect of common stock equivalents,
using the treasury stock method 420 362 461 398
----------- ----------- ----------- ------------
Shares used in dilutive net income
per share computation 9,177 9,003 9,190 8,991
=========== =========== =========== ===========
</TABLE>
6
<PAGE>
During the three and six month periods ended June 30, 1999 and 1998, the
Company had common stock options outstanding which could potentially dilute
basic net income per share in the future, but were excluded from the computation
of diluted net income per share as the common stock options' exercise prices
were greater than the average market price of the common shares for the period.
At June 30, 1999, 265,333 such common stock options with a weighted average
exercise price of $7.90 per share were excluded from the diluted net income per
share computations.
Note 5. Comprehensive Income
For the three months ended June 30, 1999 and 1998, comprehensive income,
which consisted of net income for the periods and changes in accumulated
translation adjustments, was $309,000 and $1,401,000, respectively. For the six
months ended June 30, 1999 there was a comprehensive loss of $12,000 compared to
a comprehensive income of $1,991,000, for the same period in 1998.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Results of Operations
Total net revenues for the three months ended June 30, 1999 were
$7,523,000, a decrease of $3,205,000 or 30% from the comparable period in 1998.
For the six months ended June 30, 1999, total revenues of $13,712,000 decreased
by $7,554,000 or 36% from the comparable period in 1998. Product sales of
$6,468,000 and $11,733,000 for the three months and six months ended June 30,
1999, respectively, decreased $3,237,000 or 33% and $7,590,000 or 39%,
respectively, as compared with the same periods during 1998. The lower level of
product sales resulted from decreased shipments of the Company's products in the
U.S. and Far East due primarily to slower worldwide demand in the semiconductor
industry. Service revenue of $1,055,000 and $1,979,000 for the three months and
six months ended June 30, 1999, respectively, increased $32,000 or 3% and
$36,000 or 2%, respectively, as compared to the same periods in 1998.
Cost of product sales as a percentage of product sales increased to 46%
in the second quarter of 1999 from 42% in the second quarter of 1998 and
increased to 47% in the six months ended June 30, 1999 from 40% for the same
period in 1998 primarily because of lower sales volume in 1999 resulting in
higher per unit manufacturing costs. Cost of service as a percentage of service
revenue increased to 96% in the second quarter of 1999 from 95% in the second
quarter of 1998 and increased to 107% in the six months ended June 30, 1999 from
100% for the same period in 1998 primarily as a result of higher service costs
needed to support the Company's growing installed base of systems at customer
locations.
Research and development expenses for the three months ended June 30,
1999 increased $31,000 or 3% compared to the same period in 1998. Research and
development expenses for the first six months of 1999 decreased $184,000 or 8%
compared to the same period in 1998 due primarily to one time costs related to
the addition of new employees in March 1998 who were responsible for research
and development for the Company's new Metra product line.
In the first quarter of 1998, the Company paid approximately $3.2
million for the assets and in-process research and development related to OSI's
Metra product line. Of this purchase price, $1,421,000 related to the value of
in-process technology that had no alternative future use and was charged to
expense in the accompanying consolidated statement of income for the six months
ended June 30, 1998.
Selling expenses for the three month and six month periods ended June
30, 1999 decreased by $220,000 or 14% and $515,000 or 17% respectively, compared
to the same periods in 1998 primarily because of lower commission expenses and
other expenses associated with lower sales levels in 1999.
General and administrative expenses for the three months ended June 30,
1999 increased $30,000 or 4% compared to the same period in 1998. General and
administrative expenses for the six months ended June 30, 1999 decreased by
$114,000 or 8% compared to the same period in 1998.
Other income (expense), net for the three month and six month periods
ended June 30, 1999 increased $115,000 and $55,000 or 45% respectively, from the
comparable periods in 1998 due primarily to lower royalty costs and exchange
rate losses in the second quarter of 1999.
For the three months and six months ended June 30, 1999, the Company
recorded an effective tax rate of 40% as compared to an effective rate of 39%
for the same periods in 1998.
8
<PAGE>
The Company reported an operating income of $395,000 and net income of
$304,000 for the second quarter of 1999 compared to an operating income of
$2,446,000 and net income of $1,495,000 for the same period in 1998. For the
first six months of 1999, the Company reported an operating loss of $6,000 and
net income of $103,000 which compared to an operating income of $3,361,000 and
net income of $2,119,000 for the same period in 1998.
Liquidity and Capital Resources
At June 30, 1999, the Company had working capital of $30,886,000
compared to $30,621,000 at December 31, 1998. The current ratio at June 30, 1999
was 9.2 to 1. The Company believes working capital including cash and short-term
investments of $14,843,000 will be sufficient to meet its needs at least through
the next twelve months. Operating activities for the first six months of 1998
provided cash of $3,616,000 primarily from decreases in accounts receivable and
inventory, while the net purchases of short-term investments used $3,957,000,
capital expenditures used $64,000, debt repayment used $635,000 and issuance of
common stock provided $350,000.
Year 2000 Issues
Many computer systems are expected to experience problems handling dates around
the year 2000 ("Y2K"). The Y2K issue is the result of many currently installed
computer programs being written using two digits rather than four to define the
applicable year. As a result, these computer programs are unable to distinguish
between 21st century dates and 20th century dates and could cause computer
system failures or miscalculations that result in significant business
disruptions. Described below are the actions the Company has taken, and plans to
take, to address the potential problems resulting as systems attempt to handle
dates around the millennium.
State of Readiness The Company's upper management has discussed and agreed upon
a comprehensive plan to address its Y2K issues. The Y2K plan includes the
following activities: gathering data and taking inventory; testing systems and
products to evaluate Y2K compliance; execution of remediation activities to fix
non-compliant products and systems; and monitoring and testing products and
systems on an ongoing basis. The major business areas impacted are:
Products: Many of the Company's products incorporate computer software to
control certain add-on features and functionality. The Company's products
are measurement tools and Y2K issues arise in the Company's products where
database functions are used (e.g. storage of measurement data). The Company
has completed testing and evaluation of its products for Y2K compliance. As
a result of such evaluation, the Company believes that: (i) its current
product lines are Y2K compliant; (ii) upgrades are currently available for
non-Y2K compliant automated products; and (iii) as database functionality
is not used in certain older obsolete products and in non-automated
systems, Y2K compliance is not believed to be an issue.
Procurement: The Company's suppliers have been contacted and status of
products and internal systems have been verified. Y2K compliance by the
Company's suppliers is not believed to be an issue.
Manufacturing: The Company believes that its assembly and test equipment
and its primary manufacturing application software system are now Y2K
compliant.
9
<PAGE>
Information Technology Systems ("IT"): The Company has purchased a Y2K
upgrade license from its IT vendor and has installed the upgrade in its IT
system.
Facilities and Infrastructure: An assessment of the Y2K readiness of owned
and leased assets has been performed and systems which will require upgrade
or replacement include the security and card key system and the voicemail
system.
Costs While the Company has not yet completed the entire evaluation of the
required activities to address the Y2K issues, the Company currently believes
that the estimated costs of Y2K compliance efforts are not expected to be
material to the Company.
Risks The Company believes the most reasonably likely worst case Y2K scenarios
include the following:
Customers could change their buying patterns in a number of ways, including
accelerating or delaying purchases of, or replacement of, the Company's products
and services.
The Company could experience a disruption in service to its customers as a
result of the failure of third party products, including the following: third
party products which are non-compliant and are incorporated into the Company's
products could cause the products to fail; a breakdown in telephone, e-mail,
voicemail, could impact the responsiveness of the Company's customer service
department; Y2K problems at a number of the Company's suppliers including banks,
telephone companies and the United States Postal Service could have a pervasive
impact on the Company's business as a whole; and product features that rely on
date parameters (generally date dependent routings and operating reports) could
malfunction.
Although the Company's products are undergoing both Y2K specific, and its normal
testing procedures, its products may not contain all of the necessary date code
or other changes to operate in the year 2000. Any failure of such products to
perform could result in: claims and lawsuits against the Company; significantly
impaired customer satisfaction resulting in customers withholding cash owed to
the Company and delaying or canceling orders; and managerial and technical
resources being diverted away from product development and other business
activities.
Any of the above stated consequences, in addition to others, which the Company
cannot yet foresee, could have a significant adverse impact on the Company's
business, operating results and financial condition.
Contingency Plan The Company currently believes that its plan is adequate to
address its Y2K issues, and accordingly, does not believe that it is practical
to develop a comprehensive contingency plan. In the event that its current plan
is not adequate to address the Y2K issues, the Company believes that there will
be adequate time to establish and implement a contingency plan. Once a
contingency plan is implemented, however, the Company cannot be certain that
such a plan would prevent significant Y2K problems from having a material
adverse effect on the Company's business, operating results and financial
condition.
Patent Issues
The Company is currently discussing patent issues with Therma-Wave Inc.
The Company believes that Therma-Wave's Opti-Probe product line may infringe on
a patent issued to the Company relating to absolute reflectance measurement.
Therma-Wave alleges that some of the Company's film thickness measurement
products may infringe on a Therma-Wave patent relating to the combination of a
spectrophotometer with a spectroscopic ellipsometer. Although the Company
believes that none of its products infringe on the Therma-Wave patent, there can
be no assurance that the resolution of this matter
10
<PAGE>
will not have a material adverse effect on the Company's future business,
financial condition or results of operations.
Forward Looking Statements
The foregoing Management's Discussion and Analysis of Financial
Condition and Results of Operations contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the
Securities Exchange Act of 1934. These statements involve risks and
uncertainties and actual results could differ materially as a result of a number
of factors including demand for the company's products, which is affected by
factors including the cyclicality of the semiconductor, magnetic recording head
and flat panel display industries served by the Company, patterns of capital
spending by customers, technological changes in the markets served by the
Company and its customers, market acceptance of products of both the Company and
its customers, the timing, cancellation of delay of customer orders and
shipments, competition, including competitive pressure on product prices and
changes in pricing by the Company's customers or suppliers, fluctuation in
foreign currency exchange rates particularly the Japanese yen, the proportion of
direct sales versus sales through distributors and representatives, market
acceptance of new and enhanced versions of the Company's products, the timing of
new product announcements and releases of products by the Company or its
competitors, including the Company's ability to design, introduce and
manufacture new products on a timely and cost effective basis, the size and
timing of acquisitions of business, products or technologies, fluctuations in
the availability and cost of components and subassemblies, the outcome of patent
infringement discussions and the factors set forth under "Management's
Discussion and Analysis of Financial Condition and Results of Operations - Risk
Factors" in the 1998 Annual Report on Form 10-K. The Company undertakes no
obligation to update forward looking statements made in this report to reflect
events or circumstances after the date of this report or to update reasons why
actual results could differ from those anticipated in such forward-looking
statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to financial market risks, which include changes in
foreign currency exchange rates and interest rates. The Company does not use
derivative financial instruments. Instead, the Company actively manages the
balances of current assets and liabilities denominated in foreign currencies to
minimize currency fluctuation risk. As a result, a 10% change in the foreign
currency exchange rates would not have a material impact on the Company's
results of operations. The Company's investments in marketable securities are
subject to interest rate risk but due to the short-term nature of these
investments, interest rate changes would not have a material impact on their
value. The Company also has fixed rate debt obligations in Japan that are
subject to interest rate risk. At June 30, 1999, the Company's total debt
obligation was $2,953,000 while the long-term portion was $2,135,000. The
Company does not actively manage the risk associated with these obligations
because the impact of interest rate changes would not have a material impact on
the Company's results of operations.
11
<PAGE>
NANOMETRICS INCORPORATED
PART II
OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
A. The annual meeting of shareholders was held on May 28, 1999.
B. The following directors were elected to the board of directors:
Vincent J. Coates
Nathaniel Brenner
Norman V. Coates
John D. Heaton
Kanegi Nagai
C. The following matters were voted upon at the annual meeting:
For Against Abstain
--- ------- -------
1. To elect the following directors
to serve for the ensuing year:
Vincent J. Coates, Chairman 7,519,846 0 858,904
Nathaniel Brenner, Director 7,519,846 0 858,904
Norman V. Coates, Director 7,519,846 0 858,904
John D. Heaton, Director 7,519,846 0 858,904
Kanegi Nagai, Director 7,519,846 0 858,904
2. To ratify the appointment of Deloitte
& Touche LLP as independent
auditors for the fiscal year ending
December 31, 1999. 8,370,486 4,904 3,360
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. Exhibits
Ex. 27 - Financial Data Schedule
B. Reports on Form 8-K.
None.
12
<PAGE>
NANOMETRICS INCORPORATED
SIGNATURE
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.
NANOMETRICS INCORPORATED
(Registrant)
/s/ Vincent J. Coates
- -----------------------------
Vincent J. Coates
Chairman of the Board
/s/ John Heaton
- -----------------------------
John Heaton
Chief Executive Officer
/s/ Paul B. Nolan
- -----------------------------
Paul B. Nolan
Chief Financial Officer
Dated: August 9, 1999
13
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> Dec-31-1999
<PERIOD-START> Jan-01-1999
<PERIOD-END> Jun-30-1999
<CASH> 973
<SECURITIES> 13,870
<RECEIVABLES> 7,219
<ALLOWANCES> 417
<INVENTORY> 10,172
<CURRENT-ASSETS> 34,638
<PP&E> 5,551
<DEPRECIATION> 3,243
<TOTAL-ASSETS> 38,290
<CURRENT-LIABILITIES> 3,752
<BONDS> 2,135
0
0
<COMMON> 14,519
<OTHER-SE> 17,828
<TOTAL-LIABILITY-AND-EQUITY> 38,290
<SALES> 11,733
<TOTAL-REVENUES> 13,712
<CGS> 5,536
<TOTAL-COSTS> 7,657
<OTHER-EXPENSES> 6,061
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 41
<INCOME-PRETAX> 172
<INCOME-TAX> 69
<INCOME-CONTINUING> 103
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 103
<EPS-BASIC> .01
<EPS-DILUTED> .01
</TABLE>
