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 September 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 November 1, 1999
Common Stock, No par value 5,812,172
<PAGE>
INTERPHASE CORPORATION
INDEX
Part I -Financial Information
Item 1. Consolidated Interim Financial Statements
Consolidated Balance Sheets as of September 30, 1999
and December 31, 1998 3
Consolidated Statements of Operations for the three months
and nine months ended September 30, 1999 and 1998 4
Consolidated Statements of Cash Flows for the nine months
ended September 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 9
Part II- Other Information
Item 6. Reports on Form 8-K and Exhibits 12
Signature 13
<PAGE>
<TABLE>
INTERPHASE CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands)
<CAPTION>
(unaudited)
Sep 30, Dec 31,
ASSETS 1999 1998
----------------------
<S> <C> <C>
Cash and cash equivalents $ 7,052 $ 4,531
Marketable securities 3,831 3,430
Trade accounts receivable, less allowances
for uncollectible accounts of $201 and
$164, respectively 14,456 13,716
Inventories, net 14,988 13,488
Prepaid expenses and other 912 856
current assets
Deferred income taxes, net 541 516
----------------------
Total current assets 41,780 36,537
----------------------
Machinery and equipment 10,089 10,135
Leasehold improvements 2,907 2,909
Furniture and fixtures 495 515
----------------------
13,491 13,559
Less-accumulated depreciation and amortization (11,062) (10,339)
----------------------
Total property and equipment, net 2,429 3,220
Capitalized software, net 678 773
Deferred income taxes, net 1,376 1,376
Acquired developed technology, net 2,459 3,365
Goodwill, net 2,890 3,070
Other assets 1,874 1,947
----------------------
Total assets $ 53,486 $ 50,288
======================
<PAGE>
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $ 1,797 $ 2,883
Accrued liabilities 3,038 1,639
Accrued compensation 2,407 2,041
Income taxes payable 1,250 1,408
Current portion of debt 2,210 2,252
----------------------
Total current liabilities 10,702 10,223
Other liabilities 630 873
Long term debt 5,716 7,367
----------------------
Total liabilities 17,048 18,463
Commitments and contingencies
Common stock redeemable 3,050 3,813
SHAREHOLDERS' EQUITY
Common stock, no par value 34,479 31,221
Retained deficit (995) (3,217)
Cumulative other comprehensive income (96) 8
----------------------
Total shareholders' equity 33,388 28,012
----------------------
Total liabilities and shareholders' equity $ 53,486 $ 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)
<CAPTION>
Three Months Ended Nine Months Ended
----------------- ----------------
30-Sep-99 30-Sep-98 30-Sep-99 30-Sep-98
----------------- ----------------
<C> <C> <S> <C> <C>
$ 20,511 $ 17,042 Revenues $ 55,337 $ 50,718
10,666 8,677 Cost of sales 29,401 26,130
----------------- ----------------
9,845 8,365 Gross profit 25,936 24,588
2,590 2,459 Research and development 7,892 7,965
2,850 2,229 Sales and marketing 7,814 7,232
1,673 1,569 General and administrative 4,278 4,398
----------------- ----------------
7,113 6,257 Total operating expenses 19,984 19,595
----------------- ----------------
2,732 2,108 Operating income 5,952 4,993
----------------- ----------------
114 110 Interest income 309 253
(235) (256) Interest expense (604) (782)
(224) (202) Other, net (674) (647)
----------------- ----------------
Income from continuing
2,387 1,760 operations before income taxes 4,983 3,817
997 729 Provision for income taxes 1,894 1,568
----------------- ----------------
1,390 1,031 Income from continuing operations 3,089 2,249
Discontinued Operations (Note 6)
Gain on disposal of VOIP
140 - business, net of tax 326 -
Operating losses from VOIP
(252) (308) business, net of tax (1,193) (308)
----------------- ----------------
$ 1,278 $ 723 Net income $ 2,222 $ 1,941
================= ================
<PAGE>
Net income from continuing
operations per share
$ 0.24 $ 0.19 Basic EPS $ 0.56 $ 0.41
----------------- ----------------
$ 0.22 $ 0.18 Diluted EPS $ 0.52 $ 0.40
----------------- ----------------
Net income per share
$ 0.22 $ 0.13 Basic EPS $ 0.40 $ 0.35
----------------- ----------------
$ 0.20 $ 0.13 Diluted EPS $ 0.37 $ 0.34
----------------- ----------------
5,709 5,518 Weighted average common shares 5,522 5,519
----------------- ----------------
Weighted average common and
6,288 5,580 dilutive shares 5,984 5,640
----------------------------------------------------------------------
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)
Nine Months ended
30-Sep-99 30-Sep-98
----------------------
<S> <C> <C>
Cash flow from operating activities:
Net income from continuing operations $ 3,089 $ 2,249
Operating loss from discontinued operations (1,193) (308)
Gain on disposal of discontinued operations 326 -
Adjustment to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 2,940 2,907
Change in assets and liabilities:
Trade accounts receivable (740) (718)
Inventories (1,500) 2,220
Prepaid expenses and other current assets (56) 227
Accounts payable and accrued liabilities 313 (767)
Accrued compensation 366 217
Income taxes payable (183) 498
----------------------
Net adjustments 1,140 4,584
----------------------
Net cash provided by operating activities 3,362 6,525
Cash flows from investing activities:
Additions to property, equipment, leasehold
improvements and capitalized software (1,748) (1,486)
Decrease in other assets 253 112
Cash received in Sale of VOIP 600 -
(Increase) decrease in marketable securities (401) 120
----------------------
Net cash (used) by investing activities (1,296) (1,254)
Cash flows from financing activities:
Payments on debt (1,693) (1,866)
Other long term liabilities (243) 118
Change in comprehensive income 104) 105
Purchase of redeemable common stock (763) -
Proceeds from the exercise of stock options 3,258 18
----------------------
Net cash (used) by financing activities 455 (1,625)
----------------------
Net increase (decrease) in cash and cash
equivalents 2,521 3,646
Cash and cash equivalents at beginning of period 4,531 2,247
----------------------
Cash and cash equivalents at end of period $ 7,052 $ 5,893
Supplemental Disclosure of Cash Flow
Information:
Income taxes paid $ 16 $ 448
Interest paid $ 531 $ 782
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.
The Company has completed the sale of its Voice over Internet Protocol
("VOIP") business as of September 30, 1999; accordingly, the Company's
Consolidated financial statements and notes included herein, for all
periods presented reflect the VOIP business as a discontinued operation
in accordance with Accounting Principles Board Opinion No. 30. See
further discussion of sale in Footnote 6.
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: Nine months ended:
----------------------------------------
Sep 30, Sep 30, Sep 30, Sep 30,
1999 1998 1999 1998
----- ----- ----- -----
<S> <C> <C> <C> <C>
Weighted average
shares outstanding 5,709 5,518 5,522 5,519
Dilutive impact of
stock options 579 62 462 121
----- ----- ----- -----
Total weighted
average common and
common equivalent
shares outstanding 6,288 5,580 5,984 5,640
--------------------------------------
Anti-dilutive
weighted shares
Excluded from shares
outstanding - 1,282 48 958
</TABLE>
<PAGE>
3. CREDIT FACILITY
The Company maintains a credit facility with BankOne Texas NA that
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 September 30, 1999, the Company had
borrowings of $7,903,900 and remaining availability under the revolving
credit facility was $1,500,000.
4. COMPREHENSIVE INCOME
The following table shows the Company's comprehensive income (in
thousands):
<TABLE>
Three months ended: Nine months ended:
-------------------------- --------------------------
Sep 30, 1999 Sep 30, 1998 Sep 30, 1999 Sep 30, 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net income $1,278 $723 $2,222 $1,941
Other comprehensive income
Unrealized holding gains
(losses arising during
period, net of tax 12 - (65) -
Foreign currencency
translation adjustment 42 70 (39) 105
----- --- ----- -----
Comprehensive income $1,332 $793 $2,118 $2,046
===== === ===== =====
</TABLE>
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 September 30, 1999, 172,001 shares have been repurchased
for $1,075,006 and retired.
<PAGE>
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
Interphase'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. The Company received
$300,000 and has included a gain of $186,000 net of $114,000 tax, in
Gain on disposal of VOIP business, on 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.
Effective September 27, 1999 the Company sold the remainder of its VOIP
business, Zirca Corporation ("Zirca") along with the technologies
developed by Zirca for $300,000 cash and stock valued at $517,680 to
UniView Technologies, resulting in a gain of $140,000, net of $86,000
tax. The UniView securities received as part of the agreement are
included on the Balance Sheet in Other Assets.
As of September 30, 1999, the Company has completed the sale of its
VOIP business; accordingly the Company's consolidated financial
statements and notes included herein, for all periods presented reflect
the VOIP business as a discontinued operation in accordance with
Accounting Principle Board Opinion No. 30. The following are the
results of operations for the discontinuted losses for the period
presented: (Amounts in thousands $)
<TABLE>
Three Months ended: Nine Months ended:
--------------------------- ---------------------------
Sep. 30, 1999 Sep. 30, 1998 Sep. 30, 1999 Sep. 30, 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Loss from discontinued
operations before tax $(406) $(496) $(1,924) $(496)
Income tax benefit 154 188 731 188
--- --- ----- ---
Net loss from
discontinued operations $(252) $(308) $(1,193) $(308)
</TABLE>
As of December 31, 1998, the Company's VOIP business segment had
$752,000 of Fixed Assets.
<PAGE>
7. SEGMENT DATA
Revenue related to North America and other foreign countries for the
three month and nine-month period ended September 30, 1999 and 1998 are
as follows. (Amounts in thousands $)
<TABLE>
Three months ended: Nine months ended:
-------------------------- --------------------------
Revenue Sep 30, 1999 Sep 30, 1998 Sep 30, 1999 Sep 30, 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
North America $ 17,990 $ 13,570 $ 45,211 $ 39,150
Europe 1,426 3,296 8,551 10,342
Pac Rim 1,095 176 1,575 1,226
------- ------- ------- -------
Total $ 20,511 $ 17,042 $ 55,337 $ 50,718
======= ======= ======= =======
Long lived assets related to North America and other foreign countries
as of September 30, 1999 and December 31, 1998 are as follows.
(Amounts in thousands $)
Long lived assets Sep 30, 1999 Dec 31, 1998
------------ ------------
<S> <C> <C>
North America $ 2,896 $ 3,701
Europe 211 292
Pac Rim 0 0
------ ------
Total $ 3,107 $ 3,993
====== ======
</TABLE>
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
As of September 30, 1999, the Company has completed the sale of its
VOIP business; accordingly the Company's consolidated financial
statements and notes included herein, for all periods presented reflect
the VOIP business as a discontinued operation in accordance with
Accounting Principle Board Opinion No. 30.
Revenues for the three months ended September 30, 1999 ("third quarter
1999") were $20,511,000. Revenues for the same period in 1998
("comparative period") were $17,042,000. The 20% increase in total
revenue from the third quarter of 1999 to the comparable period is
attributable to increases in Fibre Channel product revenues, partially
offset by decreases in ATM, FDDI, SCSI, Ethernet, Fast Ethernet and WAN
product revenues.
LAN product revenues, consisting of FDDI, Ethernet, ATM and Fast
Ethernet, represented 33% of total revenues for the third quarter 1999,
as compared to 62% for the comparative period. FDDI product revenues
declined 34%, Ethernet product revenues increased 8%, ATM product
revenues declined 6% and Fast Ethernet product revenues declined 54% as
compared to the comparative period. FDDI, Ethernet, ATM and Fast
Ethernet product revenues represented 11%, 2%, 8% and 11% of total
revenues, respectively for the third quarter 1999.
Mass storage product revenues, consisting of SCSI and Fibre Channel
adapter cards, represented 62% of total revenues for the third quarter
1999, as compared to 27% for the comparative period. SCSI product
revenues declined 76% while Fibre Channel product revenues increased
368% over the comparative period.
WAN product revenues comprised 4% of revenues for the third quarter
1999, as compared to 9% for the comparative period. WAN product
revenues decreased 46% as compared to the comparative period.
Revenues for the nine month period ended September 30, 1999 were
$55,337,000 as compared to $50,718,000 for the nine month period ended
September 30, 1998. Revenues from LAN, Mass Storage and WAN products
were 42%, 47% and 9% of total revenues respectively, for the nine month
period ended September 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 56% of the Company's revenue for
the third quarter of 1999 and 43% in the comparable period.
The gross margin percentage for the third quarter 1999 was 48% and 49%
for the comparable period. The gross margin percentage for the nine-
month period ended September 30, 1999 and 1998 was 47% and 48%
respectively. The decrease in gross margin is due to a shift in the
product sales mix.
<PAGE>
Operating expenses for the third quarter 1999 were $7,113,000 as
compared to $6,257,000 for the comparable period. The increase in
operating expenses is primarily due to increases in sales and marketing
activities. Operating expenses for the nine month period ended
September 30, 1999 were $19,984,000 as compared to $19,595,000 for the
nine-month period ended September 30, 1998.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash, cash equivalents and marketable securities
aggregated $10,883,000 at September 30, 1999, and $7,961,000 at
December 31, 1998. The Company's increased cash position is primarily
due to the proceeds for the exercise of stock options offset by the
purchase of fixed assets, payment on debt and other liabilities, 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 September 30, 1999, 172,001 shares have been repurchased
for $1,075,006 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.
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.
<PAGE>
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 was implemented in August 1999. In addition, the Company
is communicating with its suppliers, customers, vendors and financial
service organizations regarding their Year 2000 compliance. The
Company's Year 2000 review, new information system implementation, and
other necessary remediation actions are substantially complete. 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. Based on the Company's review of Non-IT systems they are
judged to be compliant.
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 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: November 15, 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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 7,052
<SECURITIES> 3,831
<RECEIVABLES> 14,657
<ALLOWANCES> 201
<INVENTORY> 14,988
<CURRENT-ASSETS> 41,780
<PP&E> 13,491
<DEPRECIATION> 11,062
<TOTAL-ASSETS> 53,486
<CURRENT-LIABILITIES> 10,702
<BONDS> 0
0
0
<COMMON> 34,479
<OTHER-SE> (1,091)
<TOTAL-LIABILITY-AND-EQUITY> 53,486
<SALES> 55,337
<TOTAL-REVENUES> 55,337
<CGS> 29,401
<TOTAL-COSTS> 7,814
<OTHER-EXPENSES> 12,170
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 604
<INCOME-PRETAX> 4,983
<INCOME-TAX> 1,894
<INCOME-CONTINUING> 3,089
<DISCONTINUED> (867)<F1>
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,222
<EPS-BASIC> 0.40
<EPS-DILUTED> 0.37
<FN>
<F1>See Discontinued Operations (Note 6)
Net of tax expense
</FN>
</TABLE>