SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTIONS 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended June 30, 1999 Commission File Number 0-13071
INTERPHASE CORPORATION
(Exact name of registrant as specified in its charter)
Texas 75-1549797
(State of incorporation) (IRS Employer Identification No.)
13800 Senlac, Dallas, Texas 75234
(Address of principal executive offices)
(214)-654-5000
(Registrant's telephone number, including area code)
_______________________________________________________________________
Indicate by check mark whether the registrant (1) has filed all reports
required by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for a much 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.
Class Outstanding at August 2, 1999
Common Stock, No par value 5,678,185
<PAGE>
INTERPHASE CORPORATION
INDEX
Part I -Financial Information
Item 1. Consolidated Interim Financial Statements
Consolidated Balance Sheets as of June 30, 1999
and December 31, 1998 3
Consolidated Statements of Operations for the three
months and six months ended June 30, 1999 and 1998 4
Consolidated Statements of Cash Flows for the six
months ended June 30, 1999 and 1998 5
Notes to Consolidated Interim Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10
Part II- Other Information
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 6. Reports on Form 8-K and Exhibits 14
Signature 15
<PAGE>
<TABLE>
INTERPHASE CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands)
<CAPTION>
(unaudited)
June 30, Dec 31,
ASSETS 1999 1998
---------------------
<S> <C> <C>
Cash and cash equivalents $ 2,848 $ 4,531
Marketable securities 3,449 3,430
Trade accounts receivable, less allowances
for uncollectible accounts of $208 and
$164, respectively 13,319 13,716
Inventories, net 13,628 13,488
Prepaid expenses and other current assets 1,443 856
Deferred income taxes, net 516 516
---------------------
Total current assets 35,203 36,537
---------------------
Machinery and equipment 10,463 10,135
Leasehold improvements 3,049 2,909
Furniture and fixtures 549 515
---------------------
14,061 13,559
---------------------
Less-accumulated depreciation and
amortization (10,852) (10,339)
---------------------
Total property and equipment, net 3,209 3,220
Capitalized software, net 819 773
Deferred income taxes, net 1,376 1,376
Acquired developed technology, net 2,824 3,365
Goodwill, net 2,950 3,070
Other assets 2,133 1,947
---------------------
Total assets $ 48,514 $ 50,288
=====================
<PAGE>
LIABILITIES AND SHAREHOLDERS'EQUITY
Accounts payable $ 2,603 $ 2,883
Accrued liabilities 1,591 1,639
Accrued compensation 1,595 2,041
Income taxes payable 337 1,408
Current portion of debt 2,218 2,252
---------------------
Total current liabilities 8,344 10,223
Other liabilities 658 873
Long term debt 6,265 7,367
---------------------
Total liabilities 15,267 18,463
Commitments and contingencies
Common stock redeemable 3,304 3,813
SHAREHOLDERS' EQUITY
Common stock, no par value 32,366 31,221
Retained deficit (2,273) (3,217)
Cumulative other comprehensive income (150) 8
---------------------
Total shareholders' equity 29,943 28,012
---------------------
Total liabilities and shareholders' equity $ 48,514 $ 50,288
=====================
The accompanying notes are an integral part of these consolidated
financial statements.
</TABLE>
<PAGE>
<TABLE>
INTERPHASE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except
per share amounts)
(unaudited)
Three Months Ended Six Months Ended
30-Jun-99 30-Jun-98 30-Jun-99 30-Jun-98
------------------ --------------------
<C> <C> <S> <C> <C>
$ 17,818 $ 16,087 Revenues $ 35,164 $ 33,676
9,521 8,007 Cost of sales 19,052 17,453
------------------ --------------------
8,297 8,080 Gross profit 16,112 16,223
3,070 2,640 Research and development 6,031 5,506
3,109 2,617 Sales and marketing 5,774 5,003
1,405 1,500 General and administrative 2,605 2,829
------------------ --------------------
7,584 6,757 Total operating expenses 14,410 13,338
------------------ --------------------
713 1,323 Operating income 1,702 2,885
------------------ --------------------
63 60 Interest income 195 143
(127) (286) Interest expense (369) (526)
74 (220) Other, net (150) (445)
------------------ --------------------
723 877 Income before income taxes 1,378 2,057
203 367 Provision for income taxes 434 839
------------------ --------------------
$ 520 $ 510 Net income $ 944 $ 1,218
================== ====================
Net income per share
$ 0.10 $ 0.09 Basic EPS $ 0.17 $ 0.22
------------------ --------------------
$ 0.09 $ 0.09 Diluted EPS $ 0.17 $ 0.21
------------------ --------------------
Weighted average common
5,422 5,517 shares 5,418 5,517
------------------ --------------------
Weighted average common
5,801 5,682 and dilutive shares 5,698 5,674
--------------------------------------------------------------------
The accompanying notes are an integral part of these consolidated
financial statements.
</TABLE>
<PAGE>
<TABLE>
INTERPHASE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited) Six Months ended
30-Jun-99 30-Jun-98
------------------------
<S> <C> <C>
Cash flow from operating activities:
Net income $ 944 $ 1,218
Adjustment to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 1,978 1,909
Change in assets and liabilities:
Trade accounts receivable 397 2
Inventories (140) 1,430
Prepaid expenses and other
current assets (587) 105
Accounts payable and accrued
liabilities (328) (1,707)
Accrued compensation (446) (15)
Income taxes payable (1,071) 405
------------------------
Net adjustments (197) 2,129
------------------------
Net cash provided by operating activities 747 3,347
Cash flows from investing activities:
Additions to property, equipment,
leasehold improvements and
capitalized software (1,352) (873)
Decrease in other assets (186) 10
(Increase) decrease in marketable
securities (19) 91
------------------------
Net cash (used) by investing activities (1,557) (772)
Cash flows from financing activities:
Payments on debt (1,136) (1,189)
Other long term liabilities (215) (66)
Change in comprehensive income (158) 35
Purchase of redeemable common stock (509) -
Proceeds from the exercise of
stock options 1,145 8
------------------------
Net cash (used) by financing activities (873) (1,212)
------------------------
Net increase (decrease) in cash and
cash equivalents (1,683) 1,363
Cash and cash equivalents at beginning
of period 4,531 2,247
------------------------
Cash and cash equivalents at end of period $ 2,848 $ 3,610
========================
Supplemental Disclosure of Cash
Flow Information:
Income taxes paid 1,509 432
Interest paid 364 494
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying consolidated interim financial statements include the
accounts of Interphase Corporation and its wholly owned subsidiaries
(the "Company"). Significant intercompany accounts and transactions
have been eliminated.
While the accompanying interim financial statements are unaudited,
they have been prepared by the Company pursuant to the rules and
regulations of the Securities and Exchange Commission. In the opinion
of the Company, all material adjustments and disclosures necessary to
fairly present the results of such periods have been made. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to the rules and
regulations of the Securities and Exchange Commission. These
financial statements should be read in conjunction with the
consolidated financial statements and notes thereto for the year ended
December 31, 1998.
2. NET INCOME PER COMMON AND COMMON DILUTIVE SHARE
The following table shows the calculations of the Company's weighted
average common and dilutive equivalent shares outstanding (in
thousands):
<TABLE>
Three months ended: Six months ended:
Jun 30, Jun 30, June 30, June 30,
1999 1998 1999 1998
----- ----- ----- -----
<S> <C> <C> <C> <C>
Weighted average
shares outstanding 5,422 5,517 5,418 5,517
Dilutive impact of
stock options 379 165 280 157
----- ----- ----- -----
Total weighted
average common and
common equivalent
shares outstanding 5,801 5,682 5,698 5,674
---------------------------------------
Anti-Dilutive
Weighted Shares
Excluded from shares
outstanding 202 960 246 956
</TABLE>
<PAGE>
3. CREDIT FACILITY
The Company maintains a credit facility with BankOne Texas NA which
consists of an $8,500,000 acquisition term loan, a $2,500,000
equipment financing facility and a $5,000,000 revolving credit
facility. The facility is a two-year facility with an annual renewal
provision, and bears interest at the bank's base rate (currently
8.5%). The term loan is payable in equal quarterly installments of
$548,000 plus accrued interest with final payment due November 30,
2001. The Company has the ability to satisfy the quarterly payments
on the term notes through borrowings under the revolving credit
component of the credit facility. The revolving portion of the loan
has been renewed and is due June 30, 2001. The credit facility is
collateralized by marketable securities, assignment of accounts
receivable and equipment. The credit facility includes certain
restrictive financial covenants including, among others, tangible net
worth, total liabilities to tangible net worth, interest coverage,
quick ratio, debt service coverage, and is subject to a borrowing base
calculation. At June 30, 1999, the Company had borrowings of
$8,452,000 and remaining availability under the revolving credit
facility was $1,500,000.
4. COMPREHENSIVE INCOME
<TABLE>
The following table shows the Company's comprehensive income (in thousands):
Three months ended: Six months ended:
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
---- ---- ---- -----
<S> <C> <C> <C> <C>
Net income 520 510 944 1,218
Other comprehensive income
Unrealized holding gains
(losses) arising during
period, net of tax (77) 0 (77) 0
Foreign currency
translation adjustment (34) 79 (81) 35
---- ---- ---- -----
Comprehensive income 409 589 786 1,253
==== ==== ==== =====
</TABLE>
<PAGE>
5. STOCK REPURCHASE
Effective October 1998, the Company approved a stock repurchase
agreement with Motorola, Inc. to purchase all of the shares owned by
Motorola for $4,125,000, ratably from October 1998 to July 2002.
Under the terms of the agreement, Motorola retains the right as an
equity owner and has assigned its voting rights to the Company. The
Company plans to cancel the stock upon each repurchase. Prior to the
repurchase agreement, Motorola owned approximately 12% of the
Company's outstanding common stock. The future scheduled payments are
classified as redeemable common stock in the accompanying consolidated
Balance Sheet. As of June 30, 1999, 131,334 shares have been
repurchased for $820,837 and retired.
6. DISPOSISTION OF ASSETS
Effective June 30, 1999 the Company sold an 80% interest in part of
its VOIP business, Quescom, for $1,172,000 to the former owner of
Interphases's Paris Operation. The sales proceeds consisted of
$300,000 due at closing with a $872,000 technology license fee. The
license fee is payable based on capital availability of the purchaser
or based on 5% of the purchaser's revenues, beginning July 1, 2000.
The sales agreement also contains purchasing and manufacturing rights
for the Purchaser of certain Interphase technology, as well as certain
rights of first refusal for Interphase with respect to executive
salaries, disposition of assets, and merger and acquisitions. Due to
the uncertainty of payment on the remaining license fee, the Company
will recognize the income as payment is received. As of June 30,
1999, $300,000 had been received and is included in other income in
the Statement of Operations. The Company will account for its
remaining 20% investment in the new company using the equity method of
accounting. This investment is included in other assets.
<PAGE>
7. SEGMENT DATA
The Company manages its business segments on an industry basis. The
Company's reportable segments are composed of high performance
networking/storage adapters and voice over Internet Protocol (VOIP)
products and services. The Company evaluates the performance of its
segments based on revenue and operating profits. Segment operating
income (loss) excludes general and administrative expenses. (Amounts
in thousands $):
<TABLE>
Segment Data: Three months ended June 30:
Three months ended Three months ended
June 30, 1999 June 30, 1998
Networking VOIP Total Networking VOIP Total
-------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
Revenues 17,657 161 17,818 16,087 - 16,087
Operating income 2,809 (691) 2,118 2,823 - 2,823
Fixed assets 3,367 661 4,028 3,295 - 3,295
Reconciliation of segment operating income to consolidated operating
income:
Three months ended
June 30, 1999 June 30, 1998
----------------------------
<S> <C> <C>
Networking 2,809 2,823
VOIP (691) -
General and Administrative (1,405) (1,500)
Consolidated Operating Income 713 1,323
Segment Data: Six-month period ended June 30:
Six-month period ended Six-month period ended
June 30, 1999 June 30, 1998
Networking VOIP Total Networking VOIP Total
------------------------- --------------------------
<S> <C> <C> <C> <C> <C> <C>
Revenues 34,826 338 35,164 33,676 - 33,676
Operating income 5,826 (1,519) 4,307 5,714 - 5,714
</TABLE>
<PAGE>
Reconciliation of segment operating income to consolidated operating
income:
<TABLE>
Six-month period ended
June 30, 1999 June 30, 1998
----------------------------
<S> <C> <C>
Networking 5,826 5,714
VOIP (1,519) -
General and Administrative (2,605) (2,829)
Consolidated Operating Income 1,702 2,885
Fixed Assets and Capitalized Software by Segment:
June 30, 1999 Dec 31, 1998
------------- ------------
<S> <C> <C>
Networking 3,367 3,241
VOIP 661 752
Total 4028 3,993
Segment Data: Geographic:
Revenue related to North American and other foreign countries for the
three month and six-month period ended June 30, 1999 and 1998 are as
follows. (Amounts in thousands $)
Three months ended: Six months ended:
Revenue June 30, 1999 June 30, 1998 June 30, 1999 June 30, 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
North America 14,490 13,248 27,559 25,580
Europe 3,006 2,596 7,125 7,046
Pac Rim 322 243 480 1,050
------ ------ ------ ------
Total 17,818 16,087 35,164 33,676
====== ====== ====== ======
Long lived assets related to North American and other foreign
countries for the period ended June 30, 1999 and December 31, 1998 are
as follows. (Amounts in thousands $)
Long lived assets June 30, 1999 Dec 31, 1998
------------- ------------
<S> <C> <C>
North America 3,815 3,701
Europe 213 292
Pac Rim 0 0
----- -----
Total 4,028 3,993
===== =====
</TABLE>
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Revenues for the three months ended June 30, 1999 ("second quarter
1999") were $17,818,000. Revenues for the same period in 1998
("comparative period") were $16,087,000. The 11% increase in total
revenue from the second quarter of 1999 to the comparable period is
attributable to increases in Fibre Channel and ATM product revenues,
partially offset by decreases in FDDI, SCSI, Ethernet, Fast Ethernet
and WAN product revenues. During the second quarter, one of the
Company's distributors asked to return certain products totaling $1.5
million. This request was the result of an unexpected product
specification change and production delays of one of the distributor's
customers. The Company evaluated this request based upon the long-
term business prospects with the distributor and its customer, as well
as the Company's ability to use the returned product to fulfill other
customers' current and future orders. Based on this analysis, the
Company agreed to accept the return.
LAN product revenues, consisting of FDDI, Ethernet, ATM and Fast
Ethernet, represented 49% of total revenues for the second quarter
1999, as compared to 61% for the comparative period. FDDI product
revenues declined 5%, Ethernet product revenues declined 63%, ATM
product revenues increased 107% and Fast Ethernet product revenues
declined 30% as compared to the comparative period. FDDI, Ethernet,
ATM and Fast Ethernet product revenues represented 16%, 4%, 12% and
20% of total revenues, respectively for the second quarter 1999.
Mass storage product revenues, consisting of SCSI and Fibre Channel
adapter cards, represented 43% of total revenues for the second
quarter 1999, as compared to 22% for the comparative period. SCSI
product revenues declined 22% while Fibre Channel product revenues
increased 163% over the comparative period.
WAN product revenues comprised 5% of revenues for the second quarter
1999, as compared to 15% for the comparative period. WAN product
revenues decreased 64% as compared to the comparative period.
Geographically, North America revenues comprised 81% of consolidated
revenues in the second quarter 1999 compared to 82% in the comparative
period. European revenues comprised 17% of consolidated revenues in
the second quarter 1999 and 16% in the comparative period. Pacific Rim
revenues comprised 2% of consolidated revenues in the second quarter
1999 and 2% in the comparative period.
Revenues for the six month period ended June 30, 1999 were
$35,164,000 as compared to $33,676,000 for the six month period ended
June 30, 1998. Revenues from LAN, Mass Storage and WAN products were
48%, 37% and 12% of total revenues respectively, for the six month
period ended June 30 1999.
The Company's current marketing strategy is to increase market
penetration through sales to major OEM customers. One of these
customers accounted for approximately 52% of the Company's revenue for
the second quarter of 1999 and 39% in the comparable period.
<PAGE>
The gross margin percentage for the second quarter 1999 was 47% and
50% for the comparable period. The gross margin percentage for the
six-month period ended June 30, 1999 and 1998 was 46% and 48%
respectively. The decrease in gross margin is due to a shift in the
product sales mix.
Operating expenses for the second quarter 1999 were $7,584,000 as
compared to $6,757,000 for the comparable period. The increase in
operating expenses is due to expenses relating to the Company's new
subsidiaries Zirca.com and Quescom. Operating expenses for the six
month period ended June 30, 1999 were $14,410,000 as compared to
$13,338,000 for the six-month period ended June 30, 1998.
Other expense for the second quarter included a gain of $300,000 that
represents an initial license payment due to the restructuring of the
Company's subsidiary, Quescom. The Company transferred the assets of
its Quescom subsidiary to a new company, T2PCom in exchange for a 20-
percent equity interest in the company and a license payment of
$1,172,000 for previously developed technology.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash, cash equivalents and marketable securities
aggregated $6,297,000 at June 30, 1999, and $7,961,000 at December 31,
1998. The Company's decreased cash position is primarily due to the
purchase of fixed assets, payment on debt, tax payments and purchase
of common stock. In the next twelve months, scheduled debt payments
on the Company's credit facility are approximately $2,192,000.
Effective October 1998, the Company approved a stock repurchase
agreement with Motorola, Inc. to purchase all of the shares owned by
Motorola for $4,125,000, ratably from October 1998 to July 2002.
Under the terms of the agreement, Motorola retains the right as an
equity owner and has assigned it voting rights to the Company. The
Company plans to cancel the stock upon each repurchase. Prior to the
repurchase agreement, Motorola owned approximately 12% of the
Company's outstanding common stock. The future scheduled payments are
classified as redeemable common stock in the accompanying consolidated
Balance Sheet. As of June 30, 1999, 131,334 shares have been
repurchased for $820,837 and retired.
The Company expects that its cash, cash equivalents, marketable
securities and proceeds from its credit facility will be adequate to
meet foreseeable cash needs for the next 12 months.
<PAGE>
Year 2000
The Company has recognized the need to ensure that its operations and
relationships with vendors and other third parties will not be
adversely impacted by software processing errors arising from the
calculations using the Year 2000 ("Y2K") and beyond.
The Company has created a company-wide Y2K team to identify and
resolve Y2K issues associated with the Company's internal information
systems, internal non-information systems, the products sold by the
Company, and its major suppliers of products and services. The Company
established a Y2K program coordinator to ensure these programs are
implemented across the Company. The coordinator provides a single
point of reference, both internal, and external, for the Company. The
products that the Company sells are Y2K compliant. The Company's
internal reporting system is being replaced with a Y2K compliant
Enterprise Reporting Planning (ERP) system that is scheduled to go
into operation the third quarter of 1999. In addition, the Company is
communicating with its suppliers, customers, vendors and financial
service organizations regarding their Year 2000 compliance. The
Company anticipates that its full Year 2000 review, new information
system implementation, and other necessary remediation actions will be
substantially complete by the end of the third quarter of 1999.
Direct expenditures in 1999 are expected to be between $850,000 and
$900,000. The Company will fund these expenditures through its normal
operating budget, and as required by generally accepted accounting
principles, these costs are being expensed as incurred, excluding the
capitalization of application software. The capitalization for
software will be approximately $300,000. The Company does not believe
that the costs associated with such actions will have a material
adverse effect on the Company's results of operations or financial
condition. However the costs of such actions may vary from quarter to
quarter, and there is no assurance that there will not be a delay in
the Company's implementation or increased costs associated with the
implementation of such changes. Failure to achieve Y2K readiness for
the Company could delay its ability to manufacture and ship products
and deliver services. The Company's inability to perform these
functions could have an adverse effect on future results of operations
or financial condition.
Non-IT systems include, but are not limited to, telephone/PBX systems;
fax machines; facilities systems regulating alarms, building access
and sprinklers; manufacturing, assembly and distribution equipment;
and other miscellaneous systems and processes. Y2K readiness for these
internal non-IT systems is the responsibility of the Company's Y2K
coordinator. It is anticipated that all Non-IT systems will be
compliant if they are not already compliant by the end of the third
quarter of 1999.
The Company regularly reviews and monitors the suppliers' Y2K
readiness plans and performance. Based on the Company's risk
assessment, selective on-site reviews may be performed. In some
cases, to meet Y2K readiness, the Company has replaced suppliers or
eliminated suppliers from consideration for new business. The Company
has also contracted with multiple transportation companies to provide
product delivery alternatives.
<PAGE>
While the Company has contingency plans in place to address most
issues under its control, an infrastructure problem outside of its
control could result in a delay in product shipments depending on the
nature and severity of the problems. The Company would expect that
most utilities and service providers would be able to restore service
within days although more pervasive system problems involving multiple
providers could last two to four weeks or more depending on the
complexity of the systems and the effectiveness of their contingency
plans. Although the Company is dedicating substantial resources
towards attaining Y2K readiness, there is no assurance it will be
successful in its efforts to identify and address all Y2K issues. Even
if the Company acts in a timely manner to complete all of its
assessments; identifies, develops and implements remediation plans
believed to be adequate; and develops contingency plans believed to be
adequate, some problems may not be identified or corrected in time to
prevent material adverse consequences to the Company. The discussion
above regarding estimated completion dates, costs, risks and
other forward-looking statements regarding Y2K is based on the
Company's best estimates given information that is currently available
and is subject to change. As the Company continues to progress with
its Y2K initiatives, it may discover that actual results will differ
materially from these estimates.
Use of Forward-Looking Statements: Certain statements contained in
MD&A are forward-looking, including statements concerning expected
expenses, Year 2000 readiness, and the adequacy of the Company's
sources of cash to finance its current and future operations. Factors
which could cause actual results to materially differ from
management's expectations include the following: general economic
conditions and growth in the high tech industry; competitive factors
and pricing pressures; changes in product mix; the timely development
and acceptance of new products; inventory risks due to shifts in
market domain; Year 2000 readiness of the Company's suppliers, and the
risks described from time to time in the Company's SEC filings.
<PAGE>
PART II
OTHER INFORMATION
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On May 5, 1999, the Annual meeting of Shareholders of Interphase
Corporation was held. The following matter was voted upon and
approved at the meeting.
An election of directors of the Company to serve until the next annual
meeting for the Company was held. The following seven individuals
were elected as Directors of the Company:
<TABLE>
Nominee: Votes Cast For Votes Withheld
-------- -------------- --------------
<S> <C> <C>
James F. Halpin 5,074,822 203,780
Paul N. Hug 5,097,822 180,780
Gregory B. Kalush 5,074,822 203,780
R. Stephen Polley 5,073.289 205,313
David H. Segrest 5,074,822 203,780
S. Thomas Thawley 5,097,822 180,780
William Voss 5,097,822 180,780
</TABLE>
To be elected a director each individual must have received a
plurality of all votes cast at the meeting of election of directors.
Item 6. Reports on form 8-K
None
Exhibits
Exhibit 27 Financial Data Schedule
<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.
INTERPHASE CORPORATION
(Registrant)
Date: August 13, 1999
/s/ Steven P. Kovac
--------------------
Steven P. Kovac
Chief Financial Officer,
Vice President of Finance
and Treasurer
(Principal Financial and
Accounting officer)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 2,848
<SECURITIES> 3,449
<RECEIVABLES> 13,527
<ALLOWANCES> 208
<INVENTORY> 13,628
<CURRENT-ASSETS> 35,203
<PP&E> 14,061
<DEPRECIATION> 10,852
<TOTAL-ASSETS> 48,514
<CURRENT-LIABILITIES> 8,344
<BONDS> 0
0
0
<COMMON> 32,366
<OTHER-SE> (2,423)
<TOTAL-LIABILITY-AND-EQUITY> 48,514
<SALES> 35,164
<TOTAL-REVENUES> 35,164
<CGS> 19,052
<TOTAL-COSTS> 5,774
<OTHER-EXPENSES> 8,636
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 369
<INCOME-PRETAX> 1,378
<INCOME-TAX> 434
<INCOME-CONTINUING> 944
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 944
<EPS-BASIC> 0.17
<EPS-DILUTED> 0.17
</TABLE>
