<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED JUNE 30, 1997
COMMISSION FILE NUMBER 0-21176
WALL DATA INCORPORATED
(Exact name of registrant as specified in its charter)
WASHINGTON 91-1189299
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
11332 N.E. 122ND WAY, KIRKLAND, WASHINGTON 98034
(Address of principal executive offices) (Zip Code)
(425) 814-9255
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such report), 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 stocks, as of the latest practicable date.
OUTSTANDING AT
CLASS JULY 31, 1997
----- -------------
COMMON STOCK 9,258,080
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<PAGE> 2
WALL DATA INCORPORATED
FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1997
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Income Statements for
the three months and six months
ended June 30, 1997 and 1996 3
Consolidated Balance Sheets
as of June 30, 1997 and December 31, 1996 4
Consolidated Statements of Cash Flows
for the six months ended June 30, 1997 and 1996 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
</TABLE>
2
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WALL DATA INCORPORATED
CONSOLIDATED INCOME STATEMENTS (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1997 1996 1997 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net revenues:
License Fees $ 30,241 $ 31,659 $ 62,596 $ 58,393
Services 5,359 3,167 10,027 6,289
-------- -------- -------- --------
Total net revenues 35,600 34,826 72,623 64,682
Cost of revenues:
License Fees 5,687 6,258 10,614 11,216
Services 2,012 1,767 3,839 3,458
-------- -------- -------- --------
Total cost of revenues 7,699 8,025 14,453 14,674
-------- -------- -------- --------
Gross margin 27,901 26,801 58,170 50,008
Operating expenses:
Product development 4,687 5,686 9,828 11,518
Sales and marketing 16,532 15,557 32,800 29,110
General and administrative 4,216 3,374 8,074 6,712
Non-recurring charges 10,747 -- 10,747 --
-------- -------- -------- --------
Total operating expenses 36,182 24,617 61,449 47,340
-------- -------- -------- --------
Operating income (loss) (8,281) 2,184 (3,279) 2,668
Other income, net 680 495 1,251 835
-------- -------- -------- --------
Income (loss) before income taxes (7,601) 2,679 (2,028) 3,503
Provision for income taxes (2,947) 1,018 (832) 1,331
-------- -------- -------- --------
Net income (loss) $ (4,654) $ 1,661 $ (1,196) $ 2,172
======== ======== ======== ========
Net income (loss) per share $ (0.50) $ 0.17 $ (0.13) $ 0.22
======== ======== ======== ========
Shares used in calculating
net income (loss) per share 9,255 9,747 9,500 9,665
======== ======== ======== ========
</TABLE>
See accompanying notes.
3
<PAGE> 4
WALL DATA INCORPORATED
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
------------ ------------
(unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 84,105 $ 62,483
Accounts receivable 28,260 38,694
Inventories 535 733
Deferred income taxes 3,854 3,977
Other current assets 2,296 2,262
-------- --------
Total current assets 119,050 108,149
Fixed assets, net 11,045 12,735
Deferred income taxes 155 155
Other assets 6,277 6,115
-------- --------
$136,527 $127,154
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 6,409 $ 6,774
Accrued expenses 21,578 13,665
Income taxes payable 4,810 4,722
Deferred revenues 13,413 11,190
-------- --------
Total current liabilities 46,210 36,351
-------- --------
Shareholders' equity:
Preferred stock -- --
Common stock 55,529 54,357
Retained earnings 34,410 35,791
Cumulative translation adjustment 378 655
-------- --------
Total shareholders' equity 90,317 90,803
-------- --------
$136,527 $127,154
======== ========
</TABLE>
See accompanying notes.
4
<PAGE> 5
WALL DATA INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
1997 1996
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ (1,196) $ 2,172
Adjustments to reconcile net income (loss) to net cash
provided by operations:
Deferred income taxes 123 (79)
Depreciation and amortization 4,948 4,516
Other, net 114 67
Decrease (increase) in operating assets:
Accounts receivable 10,434 1,893
Inventories 198 (2)
Other current assets (34) 654
Increase (decrease) in operating liabilities:
Accounts payable (365) 1,391
Accrued expenses 7,913 275
Income taxes payable 88 2,913
Deferred revenues 2,223 (809)
-------- --------
Net cash provided by operating activities 24,446 12,991
-------- --------
INVESTING ACTIVITIES
Purchases of fixed assets (1,550) (2,866)
Other assets (2,169) (2,720)
-------- --------
Net cash used by investing activities (3,719) (5,586)
-------- --------
FINANCING ACTIVITIES
Proceeds from issuances under stock plans 1,172 273
-------- --------
Net cash provided by financing activities 1,172 273
-------- --------
Net increase in cash and cash equivalents 21,899 7,678
Effect of exchange rate changes on cash (277) 22
Beginning cash and cash equivalents 62,483 51,969
-------- --------
Ending cash and cash equivalents $ 84,105 $ 59,669
======== ========
</TABLE>
See accompanying notes.
5
<PAGE> 6
WALL DATA INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 1997
1. BASIS OF PRESENTATION
In the opinion of management, the accompanying consolidated balance sheets
and related consolidated statements of income and cash flows include all
adjustments, consisting only of normal and recurring items, necessary for
their fair presentation. The results for the three and six months ended
June 30, 1997 are not necessarily indicative of the results that may be
expected for the year ending December 31, 1997. These financial statements
and related notes should be read in conjunction with the Company's audited
consolidated financial statements for the year ended December 31, 1996
which are included in the Company's Annual Report on Form 10-K.
2. NEW ACCOUNTING PRONOUNCEMENTS
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per Share"
which becomes effective for the Company's 1997 consolidated financial
statements beginning in the fourth quarter of 1997. SFAS No.128 will
eliminate the disclosure of primary earnings per share which includes the
dilutive effect of stock options, warrants and other convertible securities
("Common Stock Equivalents") and instead requires reporting of "basic"
earnings per share, which will exclude Common Stock Equivalents.
Additionally, SFAS No. 128 changes the methodology for fully diluted
earnings per share. The adoption of this new accounting standard will not
have a material effect on the reported earnings per share of the Company.
3. NON-RECURRING CHARGES
During the second quarter of 1997, the Company recorded several
non-recurring charges totaling $10.7 million. Approximately $9.1 million
represents a charge for the settlement of the shareholders' class action
lawsuit. (see Note 5). The Company also recorded restructuring charges of
approximately $1.0 million for the write-off of inventory, technology
investments and for severance payments relating to the SALSA business line.
The remaining $0.6 million represents a retirement payment to James
Simpson, who retired as the Company's Chairman of the Board and Chief
Executive Officer on July 31, 1997. In July 1997, the Board of Directors
also voted to accelerate the vesting of certain stock options granted to
Mr. Simpson. The related compensation expense, which was not material, will
be recorded as an expense in the third quarter.
4. RECLASSIFICATIONS
Certain reclassifications have been made to the prior year financial
statements to conform to the current year presentation.
5. LITIGATION
In April 1995, four individuals who allegedly had purchased Wall Data
common stock filed proposed shareholders' class action lawsuits against
Wall Data and certain of the Company's
6
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officers and/or directors in the U.S. District Court, Western District of
Washington. A consolidated complaint amending the four actions was filed by
one of the individuals in June 1995. On September 13, 1995, the Court
granted the Company's motion to dismiss the complaint, with leave to amend
the complaint. The Court also dismissed all claims against one of the
directors with prejudice. On January 12, 1996, the plaintiffs filed a
second amended complaint, containing the same alleged violations of law and
class period as the previous complaint. The complaint seeks unspecified
damages. In June 1996, the Court denied in part and granted in part the
Company's motion to dismiss the second amended complaint.
In July 1997, the Company agreed to settle the lawsuit, subject to
negotiation of a final settlement agreement and court approval, for $11.25
million, of which $3.0 million is to be paid by the Company's insurance
carrier. Included in non-recurring expenses in the second quarter of 1997
is a charge of $9.1 million for the Company's share of the settlement plus
related fees and expenses. The Company paid its share of the settlement in
July 1997. Wall Data continues to deny the allegations of the plaintiffs'
claims, but agreed to the settlement to avoid any further expense and the
distraction of continued legal proceedings.
7
<PAGE> 8
WALL DATA INCORPORATED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
When used in this report and elsewhere by management from time to time, the
words "believes," "anticipates" and "expects" and similar expressions are
intended to identify forward-looking statements. Certain important factors could
cause the Company's actual results to differ materially from those expressed in
the Company's forward-looking statements. These factors are detailed in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1996
and include, but are not limited to, fluctuations in quarterly performance,
competitive products and pricing, dependence on a single product line,
dependence on host computing, dependence on Microsoft Windows, risks associated
with new products and technological change, increasing reliance on resellers and
distributors, uncertainties regarding international operations, dependence on
key personnel, ability to attract and retain qualified staff, ability to manage
growth and risks associated with intellectual property and proprietary rights.
Readers are cautioned not to place undue reliance on the forward-looking
statements, which speak only as of the date made. The Company undertakes no
obligation to publicly release the results of any revision to the
forward-looking statements that may be made to reflect subsequent events or
circumstances or to reflect the occurrence of unanticipated events.
RESULTS OF OPERATIONS
Net revenues increased 2% in the second quarter of 1997 to $35.6 million from
$34.8 million in the second quarter of 1996. License fee revenue decreased 4%
from $31.7 million in the second quarter of 1996 to $30.2 million in the second
quarter of 1997. The company believes that license revenues for the quarter were
affected by lengthening sales cycles as customers are beginning to evaluate
internet-based connectivity as a part of their overall enterprise connectivity
strategy. Licenses of RUMBA(R) OFFICE, RUMBA for the Mainframe and RUMBA for the
AS/400 accounted for most of the net license revenues in the second quarter of
1997. Most of the decrease in net license revenues in the second quarter
compared to the second quarter of 1996 resulted from decreases in licenses of
RUMBA and SALSA products and increases in provisions for product returns,
partially offset by increases in licenses of ARPEGGIO products. Service revenue
increased 69% in the second quarter of 1997 to $5.4 million from $3.2 million
in the second quarter of 1996. Revenue outside North America represented 31%
of net revenues in the second quarter of both 1997 and 1996. Foreign currency
exchange rate changes did not have a significant effect on net revenues in the
second quarter. Revenue from indirect and OEM distribution channels equaled 79%
of net revenues in the second quarter of 1997 compared to 69% of net revenues
in the second quarter of 1996.
Net revenues increased 12% in the first six months of 1997 to $72.6 million from
$64.7 million in the first six months of 1996. License fee revenue increased 7%
from $58.4 million in the first six months of 1996 to $62.6 million in the first
six months of 1997. Licenses of RUMBA OFFICE, RUMBA for the Mainframe, and RUMBA
for the AS/400, accounted for most of the net license revenues in the first six
months of 1997. A license to one unaffiliated customer accounted for
approximately 11% of the total net revenues in the first six months of 1997.
Most of the increases in net license revenue in the first six months compared
to the first six months of 1996 resulted from increased sales of RUMBA for the
Mainframe and ARPEGGIO products, partially offset by decreases in sales of
other RUMBA products and increases in provisions for product returns.
Service revenue increased 59% in the first six months of 1997
to $10.0 million from $6.3 million in the first six months of 1996. Revenue
outside North America represented 27% of net revenues in the first six months of
1997 compared to 31% of net revenues
8
<PAGE> 9
in the first six months of 1996. Foreign currency exchange rate changes did not
have a significant effect on net revenues in the first six months. Revenue from
indirect and OEM distribution channels equaled 69% of net revenues in the first
six months of 1997 compared to 70% of net revenues in the first six months of
1996.
Cost of revenues consists of software publishing costs, which include labor,
product media, packaging and documentation costs, and publishing engineering,
technical support and product quality assurance costs, royalties and licensing
costs, amortization of product localization costs and provisions for obsolete
inventory, doubtful accounts and reseller rebates. The Company's total gross
margin as a percentage of net revenues increased to 78.4% in the second quarter
of 1997 from 77.0% in the second quarter of 1996. The gross margin for license
fee revenue was 81.2% in the second quarter compared to 80.2% in the second
quarter of 1996. The gross margin for service revenue equaled 62.5% in the
second quarter of 1997 compared to 44.2% in the second quarter of 1996. For the
first six months, the total gross margin increased to 80.1% in 1997 from 77.3%
in 1996. License fee gross margin increased from 80.8% in the first six months
of 1996 to 83.0% in the first six months of 1997. The gross margin for service
revenue increased to 61.7% in the first six months of 1997 from 45.0% in the
first six months of 1996. The increases in gross margin for service revenue are
primarily attributable to increases in net revenues without corresponding
increases in related costs.
Product development expenses decreased 18% to $4.7 million, or 13.2% of net
revenues, in the second quarter of 1997, from $5.7 million, or 16.3% of net
revenues, in the second quarter of 1996. For the first six months, product
development expenses decreased 15% to $9.8 million, or 13.5% of net revenues in
1997, from $11.5 million, or 17.8% of net revenues in 1996. The decreases of
$1.0 million in the second quarter and $1.7 million in the first six months
resulted primarily from lower staffing levels, arising from the completion of
the initial versions of certain RUMBA and SALSA products in 1996.
Sales and marketing expenses increased 6% to $16.5 million, or 46.4% of net
revenues, in the second quarter of 1997 from $15.6 million, or 44.7% of net
revenues, in the second quarter of 1996. For the first six months, sales and
marketing expenses increased 13% to $32.8 million, or 45.2% of net revenues in
1997, from $29.1 million, or 45.0% of net revenues in 1996. The increase of $1.0
million in the second quarter was due to higher promotional expenses, travel and
occupancy costs. The increase of $3.7 million in the first six months was due
primarily to higher staffing levels, increased incentive compensation arising
from increased net revenues, and higher promotion, travel and occupancy costs.
General and administrative expenses increased 25% to $4.2 million, or 11.8% of
net revenues, in the second quarter of 1997, from $3.4 million, or 9.7% of net
revenues, in the second quarter of 1996. For the first six months, general and
administrative expenses increased 20% to $8.1 million, or 11.1% of net revenues
in 1997, from $6.7 million, or 10.4% of net revenues in 1996. The increase of
$0.8 million in the second quarter was primarily due to non-recurring
telecommunication costs and higher occupancy costs. The increase of $1.4 million
in the first six months resulted primarily from non-recurring telecommunication
costs, higher occupancy costs and higher temporary service expenses.
During the second quarter of 1997, the Company recorded non-recurring charges
totaling $10.7 million, of which approximately $9.1 million represents the
settlement of the shareholders' class action lawsuit and related expenses (see
Note 5 of Notes to Consolidated Financial Statements). Wall Data continues to
deny the allegations of the plaintiffs' claims, but agreed to the settlement to
avoid any further expense and the distraction of continued legal proceedings.
Approximately
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$1.0 million represents the write-off of inventory, technology investments and
severance payments resulting from the restructuring of the SALSA business line.
The remaining $0.6 million represents a retirement payment to Mr. James Simpson,
who retired as Chairman and Chief Executive Officer of Wall Data on July 31,
1997.
Other income, net of other expenses, increased 37% to $0.7 million in the second
quarter of 1997 from $0.5 million in the second quarter of 1996. For the first
six months, other income, net of other expenses, increased 50% to $1.2 million
from $0.8 million in 1996. The increases of $0.2 million in the second quarter
and $0.4 million in the first six months primarily resulted from higher
investment income earned, due principally to higher average cash balances in the
second quarter and first six months of 1997 versus the comparable periods in
1996, partially offset by increases in the foreign currency transaction losses,
from $154,000 in the second quarter of 1996 to $262,000 in the second quarter of
1997 and from $232,000 in the first six months of 1996 to $446,000 in the first
six months of 1997. To date, the Company has not engaged in currency hedging
transactions against sales denominated in currencies other than U.S. dollars.
The effective income tax rate was 38.8% in the second quarter of 1997 and 38.0%
in the second quarter of 1996. The effective tax rate for the first six months
was 41.0% in 1997 compared to 38.0% in 1996.
The Company incurred a net loss in the second quarter of 1997 equaling $4.7
million ($0.50 per share), including the effects of non-recurring charges. Net
income, excluding the effects of non-recurring charges, equaled $2.0 million, or
5.6% of net revenues. Net income in the second quarter of 1996 equaled $1.7
million or 4.8% of net revenues. For the first six months of 1997, the Company
incurred a net loss of $1.2 million ($0.13 per share), including non-recurring
charges. Net income, excluding non-recurring charges, equaled $5.5 million, or
7.5% of net revenues in the first six months of 1997, compared to net income of
$2.2 million, or 3.4% of net revenues, in the first six months of 1996.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash and cash equivalents and short-term investments totaled $84.1
million, or 62% of total assets, at June 30, 1997, compared to $62.5 million, or
49% of total assets, at December 31, 1996. Subsequent to June 30, 1997, the
Company paid $8.25 million to settle the shareholders' class action lawsuit.
Net cash provided by operating activities totaled $24.5 million in the first six
months of 1997 compared to $13.0 million in the first six months of 1996. The
increase was primarily due to a larger decrease in accounts receivable in the
first six months of 1997 compared to the first six months of 1996. Expenditures
for property and equipment totaled $1.5 million in the first six months of 1997
compared to $2.9 million in 1996. Expenditures for prepaid software technology
and other long-term assets totaled $2.2 million in the first six months of 1997
compared to $2.7 million in the first six months of 1996. The Company will, from
time to time consider the acquisition of additional third party technology
through license agreements, acquisitions or investments in other businesses.
Stockholders' equity decreased to $90.3 million at June 30, 1997, from $90.8
million at December 31, 1996. The change primarily resulted from the net loss in
the first six months of 1997.
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Management believes that existing cash and cash equivalents together with funds
from operations will be sufficient to finance the Company's operations over the
near term.
11
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WALL DATA INCORPORATED
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In April 1995, four individuals who allegedly had purchased Wall Data common
stock filed proposed shareholders' class action lawsuits against Wall Data and
certain of the Company's officers and/or directors in the U.S. District Court,
Western District of Washington. A consolidated complaint amending the four
actions was filed by one of the individuals in June 1995. On September 13, 1995,
the Court granted the Company's motion to dismiss the complaint, with leave to
amend the complaint. The Court also dismissed all claims against one of the
directors with prejudice. On January 12, 1996, the plaintiffs filed a second
amended complaint, containing the same alleged violations of law and class
period as the previous complaint. The complaint seeks unspecified damages. In
June 1996, the Court denied in part and granted in part the Company's motion to
dismiss the second amended complaint.
In July 1997, the Company agreed to settle the lawsuit, subject to negotiation
of a final settlement agreement and court approval, for $11.25 million, of which
$3.0 million was paid by the Company's insurance carrier. Included in
non-recurring expenses is a charge of $9.1 million for the settlement plus
related fees and expenses. Wall Data continues to deny the allegations of the
plaintiffs' claims, but agreed to the settlement to avoid any further expense
and the distraction of continued legal proceedings. (see Note 5 of Notes to
Consolidated Financial Statements).
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The Company's annual shareholder meeting was held on May 29, 1997.
(b) and (c)
1.) The following nominees for election as directors for a three
year term were elected by the vote set forth below:
<TABLE>
<CAPTION>
NOMINEE FOR WITHHELD
------- --- --------
<S> <C> <C>
John Wall 8,264,225 21,904
Robert Frankenberg 8,227,416 58,713
Jeffrey Heimbuck 8,261,496 24,633
</TABLE>
The continuing directors are set forth below:
CONTINUING DIRECTORS
--------------------
David Millet
Steve Sarich, Jr.
Bettie Steiger
James Simpson *
Henry Lewis
* Mr. Simpson retired as a director of the Company, effective July 31, 1997.
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2) The proposal to amend the Employee Stock Purchase Plan was
approved by the vote set forth below:
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN BROKER NON-VOTES
--- ------- ------- ----------------
<S> <C> <C> <C> <C>
7,086,983 1,159,973 39,173 0
</TABLE>
(d) Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(11) Computation of Earnings Per Share
(27) Financial Data Schedule
(b) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the
quarter ended June 30, 1997.
ITEMS 2, 3, AND 5 ARE NOT APPLICABLE AND HAVE BEEN OMITTED.
13
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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.
Wall Data Incorporated
Date: August 14, 1997 By: /s/ RICHARD VAN HOESEN
-----------------------------------
Richard Van Hoesen, Vice President,
Finance and Chief Financial Officer
(Duly Authorized Officer and Chief
Financial and Accounting Officer)
14
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WALL DATA INCORPORATED
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Description Page
------- ----------- ----
<S> <C> <C>
(11) Computation of Earnings Per Share 16
(27) Financial Data Schedule 17
</TABLE>
15
<PAGE> 1
EXHIBIT (11)
WALL DATA INCORPORATED
COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
PRIMARY
Average shares outstanding 9,255,010 9,021,868 9,196,452 9,007,820
Net effect of dilutive stock options based on the treasury
stock method using average market price -- 724,988 303,400 656,954
----------- ----------- ----------- -----------
Total weighted average shares outstanding 9,255,010 9,746,856 9,499,852 9,664,775
=========== =========== =========== ===========
Net income (loss) $(4,654,000) $ 1,661,000 $(1,196,000) $ 2,172,000
=========== =========== =========== ===========
Net income (loss) per share $ (0.50) $ 0.17 $ (0.13) $ 0.22
=========== =========== =========== ===========
FULLY DILUTED
Average shares outstanding 9,255,010 9,021,868 9,196,452 9,007,820
Net effect of dilutive stock options based on the treasury
stock method using the period-end market price, if
higher than average market price -- 829,321 829,321
----------- ----------- ----------- -----------
Total weighted average shares outstanding 9,255,010 9,851,189 9,196,452 9,837,141
=========== =========== =========== ===========
Net income (loss) $(4,654,000) $ 1,661,000 $(1,196,000) $ 2,172,000
=========== =========== =========== ===========
Net income (loss) per share $ (0.50) $ 0.17 $ (0.13) $ 0.22
=========== =========== =========== ===========
</TABLE>
16
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 84,105
<SECURITIES> 0
<RECEIVABLES> 28,260
<ALLOWANCES> 0
<INVENTORY> 535
<CURRENT-ASSETS> 119,050
<PP&E> 29,069
<DEPRECIATION> 18,024
<TOTAL-ASSETS> 136,527
<CURRENT-LIABILITIES> 46,210
<BONDS> 0
0
0
<COMMON> 55,529
<OTHER-SE> 34,788
<TOTAL-LIABILITY-AND-EQUITY> 136,527
<SALES> 72,623
<TOTAL-REVENUES> 72,623
<CGS> 14,453
<TOTAL-COSTS> 14,453
<OTHER-EXPENSES> 61,449
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,760
<INCOME-PRETAX> (2,028)
<INCOME-TAX> (832)
<INCOME-CONTINUING> (1,196)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,196)
<EPS-PRIMARY> (0.13)
<EPS-DILUTED> (0.13)
</TABLE>
