U.S. 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 June 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 No. 0-13836
SILICON VALLEY RESEARCH, INC.
--------------------------------------------------
(Exact name of registrant as specified in its charter)
California 94-2743735
- --------------------------------------------------------------------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
6360 San Ignacio Avenue San Jose, CA 95119-1231
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(408) 361-0333
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
300 Ferguson Drive Mountain View, CA 94043
- --------------------------------------------------------------------------------
(Former name,former address and former fiscal year,
if changed since last report.)
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, as of the latest practicable date.
Common Shares Outstanding at June 30, 1996: 11,399,000
<PAGE>
SILICON VALLEY RESEARCH, INC. AND SUBSIDIARIES
INDEX
Pages
-----
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets -
March 31, 1996 and June 30, 1996 3
Consolidated Statements of Operations -
Three Months Ended June 30, 1995 and 1996 4
Consolidated Condensed Statements of Cash Flows -
Three Months Ended June 30, 1995 and 1996 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 7-9
Part II. OTHER INFORMATION 10-11
Item 1 Legal Proceedings
Item 2 Changes in Securities
Item 3 Defaults Upon Senior Securities
Item 4 Submission of Matters to a Vote of
Securities Holders
Item 5 Other Information
Item 6 Exhibits and Reports on Form 8-K
Signature 12
Exhibit 27. Financial Data Schedule 13
Page 2 of 13
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SILICON VALLEY RESEARCH, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands)
Assets March 31, 1996 June 30, 1996
- ------ -------------- -------------
(Unaudited)
Current Assets:
Cash and cash equivalents $ 10,238 $ 8,209
Accounts receivable 4,650 3,808
Prepaid expenses and other current assets 286 813
-------- --------
15,174 12,830
Fixed assets, net 537 594
Other assets, net 1,381 4,238
-------- --------
$ 17,092 $ 17,662
======== ========
Liabilities and Shareholders' Equity
Current Liabilities:
Accounts payable $ 321 $ 779
Accrued expenses 1,329 1,065
Deferred revenue 1,537 1,512
Current portion of long-term debt 139 141
-------- --------
3,326 3,497
Long-term debt 38 1
-------- --------
3,364 3,498
-------- --------
Shareholders' Equity:
Preferred stock, no par value:
Authorized: 1,000 shares
Issued and outstanding: none -- --
Common stock, no par value:
Authorized: 25,000 shares
Issued and outstanding: 11,308 shares
at March 31, 1996 and 11,399 shares
at June 30, 1996 31,171 31,300
Accumulated deficit (17,423) (17,104)
Cumulative translation adjustment (20) (32)
-------- --------
13,728 14,164
-------- --------
$ 17,092 $ 17,662
======== ========
The accompanying notes are an integral part of these financial statements.
Page 3 of 13
<PAGE>
SILICON VALLEY RESEARCH, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share data)
Three Months Ended
June 30,
1995 1996
-------- --------
Revenue:
License fees and other $ 1,879 $ 2,458
Maintenance fees 764 653
-------- --------
Total revenue 2,643 3,111
-------- --------
Cost of revenue:
Cost of license fees and other 66 119
Cost of maintenance fees 124 99
-------- --------
Total cost of revenue 190 218
-------- --------
Gross profit 2,453 2,893
-------- --------
Operating expenses:
Engineering, research and development 814 668
Selling and marketing 1,360 1,568
General and administrative 190 408
-------- --------
Total operating expenses 2,364 2,644
-------- --------
Operating income 89 249
-------- --------
Other income (expense):
Interest income 6 112
Interest expense (28) (8)
Other, net 3 1
-------- --------
Total other income (expense) (19) 105
-------- --------
Income before provision for
income taxes 70 354
Provision for income taxes -- 35
-------- --------
Net income $ 70 $ 319
======== ========
Net income per share $ 0.01 $ 0.03
======== ========
Shares used in per share calculation 9,401 12,536
======== ========
The accompanying notes are an integral part of these financial statements.
Page 4 of 13
<PAGE>
SILICON VALLEY RESEARCH, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Cash Flows
(Unaudited)
(In thousands)
Three Months Ended
June 30,
1995 1996
--------- --------
Cash Flows from Operating Activities:
Net income $ 70 $ 319
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization 163 256
Changes in assets and liabilities, net:
Accounts receivable (1,171) 790
Prepaid expenses and other current assets (47) (530)
Accounts payable 61 460
Accrued expenses (149) (259)
Deferred maintenance revenue (33) (6)
Other, net 9 (1,284)
-------- --------
Net cash used in operating activities (1,097) (254)
-------- --------
Cash Flows from Investing Activities:
Acquisition of fixed assets (182) (137)
Capitalization of software development costs and
purchase of software licenses (526) (1,758)
-------- --------
Net cash used in investing activities (708) (1,895)
-------- --------
Cash Flows from Financing Activities:
Principal payments of long-term debt and
other liabilities (327) (34)
Proceeds from recourse receivables 184 0
Proceeds from issuance of common stock 2,966 129
-------- --------
Net cash provided by financing activities 2,823 95
-------- --------
Effect of exchange rate changes on cash 35 25
-------- --------
Net increase (decrease) in cash and
cash equivalents 1,053 (2,029)
Cash and cash equivalents at beginning
of quarter 1,248 10,238
-------- --------
Cash and cash equivalents at end
of quarter $ 2,301 $ 8,209
======== ========
The accompanying notes are an integral part of these financial statements.
Page 5 of 13
<PAGE>
SILICON VALLEY RESEARCH, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1996 - Unaudited
(In thousands)
Note 1: The accompanying consolidated financial statements have been prepared by
the Company, pursuant to the rules and regulations of the Securities and
Exchange Commission for Interim financial statements. Therefore, they do not
include all the disclosures which were presented in the Company's annual report
on Form 10-K. These financial statements should be read in conjunction with the
consolidated financial statements and notes included as part of the Company's
latest annual report on Form 10-K.
In the opinion of management, the consolidated financial statements include all
adjustments (consisting only of normal recurring adjustments) necessary to
present fairly the consolidated financial position, results of operations and
cash flows for the interim period. The results of operations presented are not
necessarily indicative of the results to be expected for the full year or for
any other period.
Note 2: Statement of Cash Flows Information Three Months Ended
June 30,
1995 1996
---- ----
Supplemental Cash Flow Information:
Cash paid during the period for
Interest $17 $ 8
Income taxes $10 $13
Note 3: Other Assets
March 31, June 30,
Other assets comprise: 1996 1996
------- -------
Software development costs $ 1,133 $ 1,360
Software licenses 1,211 2,742
------- -------
2,344 4,102
Less accumulated amortization (1,330) (1,506)
------- -------
1,014 2,596
Loan to officer 100 100
Prepaid royalties -- 1,250
Other 267 292
------- -------
$ 1,381 $ 4,238
======= =======
The Company has acquired the exclusive marketing rights to Bell Labs' CLOVER
line of deep submicron verification products worldwide, with the exception of
Japan and Taiwan, where the Company will co-market with Bell Labs' existing
distributors. The Company has guaranteed future payments as follows: $500 in
fiscal 1997, $1,250 in fiscal 1998, and $1,000 in fiscal 1999.
Note 4: Litigation
The Company is subject to certain types of litigation during its normal course
of business. In December, 1994, the Company was named as defendant in an action
brought by a competitor in the Santa Clara County Superior Court alleging unfair
competition and breach of contract. The second amended complaint, the operative
pleading, alleges unfair competition, breach of contract, breach of implied
covenant of good faith and fair dealing, and unjust enrichment. The plaintiff is
seeking attorneys' fees and damages, and enforcement of the contract. The
litigation is in the discovery stage and the ultimate outcome cannot presently
be determined. Accordingly, no provision for any liability that may result upon
adjudication has been made in the consolidated financial statements.
Page 6 of 13
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(In thousands)
This Management's Discussion and Analysis of Financial Condition and Results of
Operations includes a number of forward-looking statements which reflect the
Company's current view with respect to future events and financial performance.
These forward-looking statements are subject to certain risks and uncertainties,
including those discussed in the Other Factors section of this Item 2 and
elsewhere in this Form 10-Q that could cause actual results to differ materially
from historical results or those anticipated. In this report, the words
"anticipates," "believes," "expects," "intends," "future," and similar
expressions identify forward-looking statements. Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak only as of
the date hereof.
RESULTS OF OPERATIONS
REVENUE
Revenue for the first quarter of fiscal year 1997, which ended June 30, 1996,
increased to $3,111 from $2,643 in the first quarter a year ago. The 18%
increase is due to an increase in license fees income. The primary reason for
the increase in license fee revenue was additional licensing of the SVR SonIC
software as a result of the release of significant product enhancements.
There were two customers whose total sales for the quarter exceeded 10 percent
of total sales for the quarter and one of the customers purchased $1,000 in
licenses. International sales, primarily Japan and the Far East accounted for
31% of total revenue this quarter compared to 64% in the first quarter a year
ago.
While the Company has achieved annual revenue growth in each of the last three
years, and has attained profitability in the last two consecutive years, there
can be no assurance that such revenue growth or profitability can be sustained.
The Company's expense levels are based, in part, on its expectations as to
future revenue levels, which are difficult to predict. If revenue levels are
below expectations, operating results may be materially and adversely affected.
In addition, the Company's quarterly and annual results may fluctuate as a
result of many factors, including the size and timing of software license fees,
timing of co-development projects with customers, timing of operating
expenditures, increased competition, new product announcements and releases by
the Company and its competitors, gain or loss of significant customers or
distributors, expense levels, renewal of maintenance contracts, pricing changes
by the Company or its competitors, personnel changes, foreign currency exchange
rates, and economic conditions generally and in the electronics industry
specifically. There can also be no assurance that the Company's distributor
strategy will be successful or that the Company will be able to retain current
distributors or to identify new distributors in the future that are acceptable
to the Company.
COST OF LICENSE FEES AND OTHER REVENUE
Cost of sales for the first quarter of fiscal year 1997 was $119, compared to
$66 in the first quarter of fiscal 1996. Cost of sales is primarily the
amortization of software development costs capitalized in fiscal 1996.
COST OF MAINTENANCE FEES REVENUE
Cost of sales of maintenance for the first quarter of fiscal year 1997 was $99
compared to $124 in the first quarter of fiscal 1996. Cost of maintenance fees
revenue is primarily the cost of providing technical support and technical
documentation.
ENGINEERING, RESEARCH AND DEVELOPMENT EXPENSES
Engineering, research and development expenses for the first quarter of fiscal
year 1997, were $668 compared to $814 in the first quarter a year ago. Comparing
the first quarter of fiscal 1997 and the first quarter of fiscal 1996,
engineering, research and develpment expenses were 21% and 31% of revenue,
respectively. The decrease in engineering, research and development expenses is
due to capitalized software development costs and a temporary reduction in
head-count in the United States with increases in Taiwan at lower salary and
expense rates. The company continues to strengthen its engineering capabilities
with increased staffing and increased emphasis on development of new technology.
Page 7 of 13
<PAGE>
SELLING & MARKETING EXPENSES
Selling and marketing expenses for the first quarter of fiscal year 1997
increased to $1,568 from $1,360 in the first quarter a year ago. In the first
quarter of fiscal 1997 and the first quarter of fiscal 1996, selling and
marketing expenses were 50% and 51% of revenue, respectively. The dollar
increase is due to the addition of sales and marketing personnel.
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses increased to $408 for the first quarter of
fiscal year 1997, from $190 in the first quarter a year ago. In the first
quarter of fiscal 1997 and the first quarter of fiscal 1996, selling, general
and administrative expenses were 13%, and 7% of revenue, respectively. The
increase is the result of increases to the senior management team and relocation
expenses.
OTHER INCOME (EXPENSE)
Other income (expense) increased to $105 from $(19) comparing the first quarter
of fiscal year 1997 to the first quarter of fiscal 1996. Other expenses are
primarily interest income and expense and the increase is due to investing the
proceeds received in the secondary offering.
INCOME TAXES
The Company's effective tax rate for the first quarter of fiscal 1997 is
approximately 10%.
FINANCIAL CONDITION
The Company's primary unused sources of funds at June 30, 1996, consisted of
cash and cash equivalents of approximately $8,209 and a bank line of credit of
$2,000. The Company believes its cash and cash generated from operations and
available borrowings will be sufficient to finance its operations for at least
the next twelve months. The Company's cash requirements in the future may also
be financed through additional equity or debt financings. There can be no
assurance that such financing can be obtained at favorable terms, if at all.
The Company's open commitments for the purchase of capital assets as of June 30,
1996 were approximately $100.
The Company is currently engaged in litigation with Mentor Graphics. Regardless
of the outcome of this pending litigation, the litigation may result in
substantial cost and expenses to the Company and significant diversion of
efforts by the Company's technical and management personnel. In addition, an
adverse ruling in the litigation could have a material adverse effect on the
Company's business, operating results or financial condition.
OTHER FACTORS AFFECTING FUTURE RESULTS OF OPERATIONS
Revenues from sales of the SVR GARDS family of products have historically
represented a substantial majority of the Company's revenues. Although the
Company has recently introduced its SVR FloorPlacer and SVR SonIC products, the
Company expects that revenues from the sale of SVR GARDS products will continue
to account for at least a majority of the Company's revenues for the foreseeable
future. The life cycles of the Company's products are difficult to predict due
to the effect of new product introductions or product enhancements by the
Company or its competitors, market acceptance of new and enhanced versions of
the Company's products and competition in the Company's marketplace. Declines in
the demand for the SVR GARDS family of products, whether as a result of
competition, technological change, price reductions or otherwise, could have a
material adverse effect on the Company's business, operating results and
financial condition.
The EDA industry is characterized by extremely rapid technological change,
frequent new product introductions and enhancements, evolving industry standards
and rapidly changing customer requirements. The development of more complex ICs
embodying new technologies will require increasingly sophisticated design tools.
The Company's future results of operations will depend, in part, upon its
ability to enhance its current products and to develop and introduce new
products on a timely and cost-effective basis that will keep pace with
technological developments and evolving industry standards and methodologies, as
well as address the increasingly sophisticated needs of the Company's customers.
The Company has in the past and may in the future experience delays in new
product development and product enhancements. The Company began commercial
shipments of its new SVR FloorPlacer software products in the quarter ended
March 31, 1995, and of its new SVR SonIC software products in the quarter ended
June 30, 1995. There can be no assurance that
Page 8 of 13
<PAGE>
these new products will gain market acceptance or that the Company will be
successful in developing and marketing product enhancements or other new
products that respond to technological change, evolving industry standards and
changing customer requirements, that the Company will not experience
difficulties that could delay or prevent the successful development,
introduction and marketing of these products or product enhancements, or that
its new products and product enhancements will adequately meet the requirements
of the marketplace and achieve any significant degree of market acceptance. In
addition, all of the Company's current products operate in, and planned future
products will operate in, the Unix operating system. In the event that another
operating system, such as Windows NT, were to achieve broad acceptance in the
EDA industry, the Company would be required to port its products to such an
operating system, which would be costly and time consuming and could have a
material adverse effect on the Company's business, operating results or
financial condition. Failure of the Company, for technological or other reasons,
to develop and introduce new products and product enhancements in a timely and
cost-effective manner would have a material and adverse effect on the Company's
business, operating results and financial condition. In addition, the
introduction or even announcement of products by the Company or one or more of
its competitors embodying new technologies or changes in industry standards or
customer requirements could render the Company's existing products obsolete or
unmarketable. Such deferment of purchases could have a material adverse effect
on the Company's business, operating results or financial condition.
Software products as complex as those offered by the Company may contain defects
or failures when introduced or when new versions are released. The Company has,
in the past, discovered software defects in certain of its products and may
experience delays or lost revenue to correct such defects in the future.
Although the Company has not experienced material adverse effects resulting from
any such defects to date, there can be no assurance that, despite testing by the
Company, errors will not be found in new products or releases after commencement
of commercial shipments, resulting in loss of market share or failure to achieve
market acceptance. Any such occurrence could have a material effect upon the
Company's business, operating results or financial condition.
A small number of customers account for a significant percentage of the
Company's total revenue. There can be no assurance that sales to these entities,
individually or as a group, will reach or exceed historical levels in any future
period. Any substantial decrease in sales to one or more of these customers
could have a material adverse effect on the Company's business, operating
results or financial condition. The Company currently sells and markets its
products overseas, other than in Japan, through a limited number of
distributors. The Company has recently hired new distributors in Taiwan, Korea,
Europe and Singapore. The Company has no history of performance by its new
distributors. In addition, there can be no assurance that the new distributors
will be able to successfully distribute and support the Company's products on a
timely basis or that such distributors will not reduce their efforts devoted to
selling the Company's products or terminate their relationship with the Company
as a result of competition with other suppliers' products. The loss of or
changes in the relationship with or performance by one or more of the Company's
international distributors could have a material adverse effect on the Company's
business, results of operations and financial condition.
The licensing and sales of the Company's software products generally involves a
significant commitment of capital by prospective customers, with the attendant
delays frequently associated with large capital expenditures and lengthy
acceptance procedures. For these and other reasons, the sales cycle associated
with the licensing of the Company's products is typically lengthy and subject to
a number of significant risks over which the Company has little or no control.
Because the timing of customer orders is hard to predict, the Company believes
that its quarterly operating results are likely to vary significantly in the
future.
The Company is dependent upon the semiconductor and more generally, the
electronics industries. Each of these industries is characterized by rapid
technological change, short product life cycles, fluctuations in manufacturing
capacity and pricing and gross margin pressures. Each of these industries is
highly cyclical and has periodically experienced significant downturns, often in
connection with, or in anticipation of declines in general economic conditions
during which the number of new IC design projects often decreases. Purchases of
new licenses from the Company are largely dependent upon the commencement of new
design projects, and factors negatively affecting any of these industries could
have a material adverse effect on the Company's business, operating results or
financial condition. The Company has experienced some order delays as the
semiconductor industry is experiencing a slowdown. The Company's business,
operating results and financial condition may, in the future, reflect
substantial fluctuations from period to period as a consequence of patterns and
general economic conditions in either the semiconductor or electronics industry.
Page 9 of 13
<PAGE>
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
Securities Holders:
Not Applicable
Item 5. Other Information:
Not Applicable
Item 6. Exhibits and Reports on Form 8-K:
(A) Exhibits:
Exhibit
Number Description of Exhibit
- ------ ----------------------
(a)(1) The financial statements filed as part of this Report at Item 1 are
listed in the Index to Financial Statements and Financial Statement
Schedules on page 2 of this Report.
(a)(2) The following exhibits are filed with this Quarterly Report on Form
10-Q:
3.01 Registrant's Articles of Incorporation as amended to date (incorporated
by reference to Exhibit 3.01 of Registrant's Registration Statement on
Form S-1 ( File No. 2-89943) filed March 14, 1984, as amended (the
"1984 Registration Statement")).
3.02 Registrant's bylaws, as amended to date (incorporated by reference to
Exhibit 4.01 of the 1984 Registration Statement).
10.01* Registrant's 1990 Directors Stock Option Plan (incorporated by
reference to Exhibit A of Registrant's Proxy Statement dated July 10,
1990).
10.02 Stock Purchase Agreement dated May 16, 1991 between the Registrant and
Intergraph Corporation (incorporated by reference to Exhibit 4.01 of
Registrant's Report on Form 8-K dated June 7, 1991).
10.03* Registrant's 1988 Stock Option Plan, as amended to date, including the
stock option grant form and the stock option exercise notice and
agreement (incorporated by reference to Exhibit 10.15 of Registrant's
Annual Report on Form10-KSB for the fiscal year ended March 31, 1993).
10.04 Warrant Agreement dated March 31, 1992 between the Registrant and
Intergraph Corporation (incorporated by reference to Exhibit 10.18 of
Registrant's Annual Report on Form 10-KSB for the fiscal year ended
March 31, 1993).
10.05* Registrant's 1993 Employee Stock Purchase Plan, as amended to date
(incorporated by reference to Exhibit 10.20 of Registrant's Annual
Report on Form 10-KSB for the fiscal year ended March 31, 1993).
*Management Contract or Compensatory Plan or Arrangement
Page 10 of 13
<PAGE>
Exhibit
Number Description of Exhibit
- ------- ----------------------
10.06 Stock Purchase Agreement dated February 12, 1993 between the Registrant
and several investors (incorporated by reference to Exhibit 4.01 of
Registrant's current report on Form 8-K filed on April 15, 1993).
10.07 Stock Purchase Agreement dated January 19,1994 between the Registrant
and several investors (incorporated by reference to Exhibit 4.01 of
Registrant's current report on Form 8-K filed on February 4, 1994).
10.08 Warrant Agreement dated March 22, 1994 between the Registrant and
Prutech Research and Development Partnership II (incorporated by
reference to Exhibit 10.22 of Registrant's Annual Report on Form 10-KSB
for the fiscal year ended March 31, 1994).
10.09 Subordination debt agreement dated September 15, 1994 between the
registrant and several investors (incorporated by reference to Exhibit
4.01 of Registrant's current report on Form 8-K filed on November 4,
1994).
10.10* Employment Agreement dated October 31, 1995 between the Registrant and
Glenn E. Abood (incorporated by reference to Exhibit 10.10 of
Registrant's Registration Statement on Form S-2 filed December 6,
1995).
10.11 Stock Purchase Agreement dated June 6, 1995 between the Registrant and
several investors (incorporated by reference to Exhibit 10.10 of the
Registrant's Annual Report on Form 10-KSB for the fiscal year ended
March 31, 1995).
10.12 Security and Loan Agreement dated September 15, 1995 by and among
Imperial Bank and the Registrant (incorporated by reference to Exhibit
10.12 of the Registrant's Registration Statement on Form SB-2 filed
December 6, 1995).
10.13 Master Equipment Lease Agreement dated November 9, 1995 by and between
Financing for Science International, Inc. and the Registrant
(incorporated by reference to Exhibit 10.13 of the Registrant's
Registration Statement on Form SB-2 filed December 6, 1995).
27.00 Financial Data Schedule
*Management Contract or Compensatory Plan or Arrangement
(B) Reports on Form 8-K:
None
Page 11 of 13
<PAGE>
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.
SILICON VALLEY RESEARCH
Date: August 14, 1996 /s/ Cheryl S. Billings
--------------- ----------------------
Cheryl S. Billings
Vice President, Finance and
Chief Financial Officer
Page 12 of 13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE JUNE 30,
1996 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> JUN-30-1996
<CASH> 8,209
<SECURITIES> 0
<RECEIVABLES> 3,846
<ALLOWANCES> 38
<INVENTORY> 0
<CURRENT-ASSETS> 12,830
<PP&E> 2,266
<DEPRECIATION> 1,672
<TOTAL-ASSETS> 17,662
<CURRENT-LIABILITIES> 3,498
<BONDS> 1
<COMMON> 31,300
0
0
<OTHER-SE> (17,137)
<TOTAL-LIABILITY-AND-EQUITY> 17,662
<SALES> 2,458
<TOTAL-REVENUES> 3,111
<CGS> 119
<TOTAL-COSTS> 218
<OTHER-EXPENSES> 2,644
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8
<INCOME-PRETAX> 354
<INCOME-TAX> 35
<INCOME-CONTINUING> 319
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 319
<EPS-PRIMARY> 0.03
<EPS-DILUTED> 0.03
</TABLE>
