<PAGE>
UNITED STATES
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 number: 0-13459
DH Technology, Inc.
(Exact name of registrant as specified in its charter)
California 94-2917470
(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification No.)
15070 Avenue of Science, San Diego, California 92128
(Address of principal executive office)
Registrant's telephone number, including area code: (619) 451-3485
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 XXX No____
As of June 30, 1996 there were 7,942,777 shares of the registrant's Common Stock
outstanding.
<PAGE>
DH TECHNOLOGY, INC. AND SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION PAGE NO.
ITEM 1 - Financial Statements
Condensed Consolidated Balance Sheets 1
June 30, 1996, and December 31, 1995
Condensed Consolidated Statements of Income 2
Three months and six months ended
June 30, 1996, and June 30, 1995
Condensed Consolidated Statements of Cash Flows 3
Six months ended June 30, 1996, and June 30, 1995
Notes to Condensed Consolidated Financial Statements 4
ITEM 2 -
Management's Discussion and Analysis of 5
Financial Conditions and Results of Operations
PART II. OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K 10
SIGNATURES 11
EXHIBITS INDEX 12
<PAGE>
<TABLE>
PART 1 - FINANCIAL INFORMATION
ITEM 1 - Financial Statements
DH TECHNOLOGY, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands)
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
(Unaudited)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $24,823 $28,971
Short-term investment securities held to maturity 12,555 2,750
Accounts receivable, net 15,345 15,785
Inventories 16,051 14,382
Prepaid expenses and other current assets 2,314 2,317
------------------- --------------------
Total current assets 71,088 64,205
------------------- --------------------
Fixed assets 20,597 18,085
Less accumulated depreciation and
amortization 12,874 11,795
------------------- --------------------
7,723 6,290
Intangibles 12,932 13,312
Other assets 1,700 1,478
=================== ====================
Total assets $93,443 $85,285
=================== ====================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $7,611 $6,383
Current portion of long-term debt 545 980
Accrued payroll 2,242 2,579
Accrued expenses 2,374 2,524
Income taxes payable 2,367 2,128
Deferred revenue 1,757 947
------------------- --------------------
Total current liabilities 16,896 15,541
------------------- --------------------
Non-current portion of long-term debt 2,069 2,115
Deferred tax liability 149 149
------------------- --------------------
Total liabilities 19,114 17,805
------------------- --------------------
Shareholders' equity:
Preferred shares, no par value
Authorized: 1,000,000 shares, none issued -- --
Common shares:
Common stock, authorized: 28,500,000
shares; issued and outstanding:
7,942,777 shares in 1996 and
7,890,090 shares in 1995 12,764 12,335
Foreign currency translation adjustment (423) (519)
Retained earnings 61,988 55,664
------------------- --------------------
Total shareholders' equity 74,329 67,480
------------------- --------------------
Total liabilities and shareholders' equity $93,443 $85,285
=================== ====================
The accompanying notes are an integral part
of these condensed consolidated financial
statements.
</TABLE>
<PAGE>
<TABLE>
DH TECHNOLOGY, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(June 30, 1996 and 1995)
(In thousands, except per share data)
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
(Unaudited) (Unaudited)
------------------------------ ------------------------------
1996 1995 1996 1995
------------------------------ ------------------------------
<S> <C> <C> <C> <C>
Net sales $29,210 $24,317 $57,406 $47,572
Cost of net sales 18,971 15,531 37,441 30,291
------------- -------------- ------------- --------------
Gross margin 10,239 8,786 19,965 17,281
Operating expenses:
Selling, general and administrative 3,944 4,037 7,905 7,971
Research and development 1,414 1,132 2,702 2,244
------------- -------------- ------------- --------------
Total operating expenses 5,358 5,169 10,607 10,215
Income from operations 4,881 3,617 9,358 7,066
Interest income 389 283 719 559
Interest expense 44 59 90 133
------------- -------------- ------------- --------------
Income before income taxes 5,226 3,841 9,987 7,492
Income taxes 1,935 1,344 3,662 2,630
------------- -------------- ------------- --------------
Net income $3,291 $2,497 $6,325 $4,862
============ ============= ============= ===============
------------- -------------- ------------- --------------
Net income per share $.39 $.30 $.75 $.59
============= ============== ============= ==============
Weighted average number of shares outstanding
Per share (primary and fully diluted): 8,521 8,265 8,490 8,229
The accompanying notes are an integral part of these
condensed consolidated financial statements
</TABLE>
<PAGE>
<TABLE>
DH TECHNOLOGY, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands)
SIX MONTHS ENDED
JUNE 30,
(Unaudited)
--------------------------------------
1996 1995
<CAPTION>
--------------------------------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS FROM:
<S> <C> <C>
Operating activities:
Net income $6,325 $4,862
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization 1,524 1,824
Provision for loss on accounts receivable 57 37
Undepreciated value of asset disposals 55 27
Changes in assets and liabilities excluding effect of acquisitions 510 (147)
--------------------------------------
Net cash provided by operating activities 8,471 6,603
Investing activities:
Net increase (decrease) in short-term investment securities held to maturity (9,805) 1,800
Capital expenditures (2,851) (1,066)
--------------------------------------
Net cash provided by (used in) investing activities (12,656) 734
Financing activities:
Principal repayments on long-term debt (481) (788)
Proceeds from the exercise of stock options 429 607
--------------------------------------
Net cash used in financing activities (52) (181)
Effect of exchange rate changes on cash 89 (353)
Net increase (decrease) in cash and cash equivalents (4,148) 6,803
Cash and cash equivalents at beginning of period 28,971 19,587
--------------------------------------
Cash and cash equivalents at end of period $24,823 $26,390
======================================
Supplemental Cashflow Disclosures:
Interest paid on debt $55 $34
Income taxes paid $2,717 $1,946
The accompanying notes are an integral part of these
condensed consolidated financial statements
</TABLE>
<PAGE>
DH TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(June 30, 1996 - Unaudited)
Note 1: Basis of Presentation
The accompanying condensed consolidated financial statements have been prepared
in accordance with S.E.C. requirements for interim financial statements.
Therefore, they do not include all disclosures that would be presented in the
Company's Annual Report on Form 10-K. The financial statements should be read in
conjunction with the financial statements contained in the Company's Annual
Report on Form 10-K for the year ended December 31, 1995.
The information furnished reflects all adjustments (consisting only of normal
recurring adjustments) which are, in the opinion of management, necessary for a
fair presentation of financial position, results of operations, and changes in
cash position for the interim period. The results of operations for the periods
presented are not necessarily indicative of results to be expected for the full
year.
The Board of Directors authorized a three-for-two common stock split effective
September 22, 1995. All share and per share data have been retroactively
restated to give effect to the stock split.
Note 2: Inventories
The composition of inventories at June 30, 1996, and December 31, 1995, were as
follows:
1996 1995
------ -----
Raw Materials $8,767,000 $8,221,000
Work in Process 1,919,000 940,000
Finished Goods 5,365,000 5,221,000
---------- ----------
Totals $16,051,000 $14,382,000
=========== ===========
Note 3: Operations subject to Purchase and Sale Agreements
On February 28, 1994, DH Technology, Inc. acquired all of the outstanding stock
of Stadia Colorado Corp. (Stadia) pursuant to a stock purchase agreement for
$6.5 million in cash ($5.5 million paid at closing, and additional payments of
$500,000 paid on March 1, 1995, and on March 1, 1996). This business is being
operated as a subsidiary of DH Technology, Inc. under the name Stadia Colorado
Corp. Stadia, located in Golden, Colorado, supplies labeling and marking
solutions to a variety of customers in ten western states.
On August 31, 1994, DH Technology, Inc. acquired all of the outstanding stock of
Cognitive Solutions, Inc. (Cognitive) and certain technology rights pursuant to
a stock purchase agreement for $10 million in cash ($7.9 million paid through
1995, and additional payments of $500,000 each due in 1996 through 1999). Also,
the Company is required to make additional payments, not to exceed an aggregate
of $3 million, to the former shareholder of Cognitive based upon
post-acquisition net sales of a specified Cognitive product line. At the end of
each calendar year, the company will calculate the amount of the additional
payment as defined in the stock purchase agreement. Each payment will be treated
as additional acquisition cost, and will be recorded as additional goodwill,
amortized straight-line over the remaining life of the asset. This business is
being operated as a subsidiary of DH Technology, Inc. under the name Cognitive
Solutions, Inc. and is located in Paso Robles, California. Cognitive designs,
manufactures, and markets thermal bar code printers and complementary label
media for use in automatic data collection systems.
<PAGE>
The Stadia and Cognitive acquisitions were accounted for using the purchase
method; accordingly, the assets and liabilities of the acquired companies have
been recorded at their estimated fair values at the dates of acquisition. In
conjunction with the acquisitions of Stadia and Cognitive, the excess of
purchase price over the estimated fair values of the net assets acquired has
been recorded as goodwill of $4,062,000 and $5,590,000, respectively, which is
being amortized over 25 years using the straight-line method.
On October 30, 1995 the Company acquired certain assets and liabilities of Mos
Magnetics, a privately held company in San Diego, California, for $752,000 cash.
Mos Magnetics designs, manufactures, and markets magnetic read and write heads
and modules for credit card and debit card readers, check readers, and airline
ticket readers. The Company is required to make additional payments, not to
exceed an aggregate of $1.3 million, to Mos Magnetics based upon
post-acquisition net sales by the Company of a specific Mos product line. At the
end of each calendar year, the company will calculate the amount of the
additional payment as defined in the asset purchase agreement. Each payment will
be treated as additional acquisition cost, and will be recorded as additional
goodwill, amortized straight-line over the remaining life of the asset.
The consolidated statements of income include the operations of Stadia from
February 28, 1994, Cognitive from August 31, 1994, and the Magnetics Division
from October 30, 1995.
ITEM 2 -
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion and analysis should be read in conjunction with DH
Technology, Inc.'s condensed consolidated financial statements and the notes
related thereto included herein.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1996, COMPARED TO THREE MONTHS ENDED JUNE 30, 1995
Net sales of $29.2 million for the quarter ended June 30, 1996, increased 20.2%
over net sales of $24.3 million for the same period last year. The growth was
primarily attributable to the increased unit shipments of transaction printers
for the second quarter of 1996. A significant percentage of this growth was
attributable to a single customer. See "Certain Factors That May Affect Future
Results - Future Operating Results Subject to Fluctuation."
Cost of net sales increased to 64.9% of net sales for the second quarter of 1996
compared to 63.9% of net sales for the same period of 1995. There were primarily
two factors that contributed to the increase. The first was a mix shift in the
printhead business to products with higher material content as a percentage of
net sales. The second was the acceptance of a lower gross margin order with
minimum support requirements in the label business.
Selling, general, and administrative expenses decreased to 13.5% of net sales in
the second quarter of 1996 from 16.6% in the same period in 1995 due to net
sales increasing at a faster rate than selling, general, and administrative
expenses. These expenses decreased in absolute dollars to $3.9 million in the
second quarter of 1996 from $4.0 million in the second quarter of 1995. This
decrease was primarily attributable to a net foreign exchange gain resulting
from an intercompany cash transaction offset by the inclusion of results for the
Magnetics Division for the entire second quarter of 1996.
<PAGE>
Research and development expenses remained constant at 4.7% in the second
quarter of 1996 and the second quarter of 1995. Total dollars expended for
research and development increased to $1.4 million in the second quarter of 1996
from $1.1 million in the same period in 1995. The Company believes that the
continued timely development of new products and enhancements to its existing
products are essential to maintaining the Company's competitive position.
Accordingly, the Company anticipates that such expenses will continue to
increase in absolute dollars.
Income from operations as a percentage of net sales increased to 16.7% for the
quarter ended June 30, 1996, compared to 14.9% for the same period in 1995
primarily due to lower operating expenses as a percentage of revenue as
discussed above.
Interest income increased to $389,000 in the second quarter of 1996 compared to
$283,000 in the second quarter of 1995 as a result of higher cash balances in
the second quarter of 1996.
Interest expense decreased to $44,000 for the quarter ended June 30, 1996, from
$59,000 for the same period in 1995 due to the payment of a $500,000 debt in the
first quarter of 1996 related to the Stadia acquisition.
Income taxes as a percentage of income before income taxes increased to 37.0%
for the second quarter of 1996 from 35.0% for the same period in 1995, due in
part to an increase in the Australian tax rate to 39%, and in part to reduced
benefit from the partially suspended federal research and development tax
credit.
SIX MONTHS ENDED JUNE 30, 1996, COMPARED TO SIX MONTHS ENDED JUNE 30, 1995
Net sales of $57.4 million for the six months ended June 30, 1996, increased
20.6% over net sales of $47.6 million for the same period last year. Growth was
primarily attributable to the increased unit shipments of transaction printers
for the first half of 1996. A significant percentage of this growth was
attributable to a single customer. See "Certain Factors That May Affect Future
Results - Future Operating Results Subject to Fluctuation."
Cost of net sales increased to 65.2% of net sales for the six month period ended
June 30, 1996 compared to 63.7% of net sales for the same period of 1995. There
were primarily three factors that contributed to the increase. The first was a
mix shift in the printhead business to products with higher material content as
a percentage of net sales. The second factor was the acceptance of a lower gross
margin order with minimum support requirements in the label business. The third
was a price decrease initiated at Cognitive where efforts to lower the
associated costs continue.
Selling, general, and administrative expenses decreased to 13.8% of net sales in
the six months ended June 30, 1996 from 16.8% in the same period in 1995 due to
net sales increasing at a faster rate than selling, general, and administrative
expenses. These expenses decreased in absolute dollars to $7.9 million in the
six months ended June 30, 1996 from $8.0 million in the same period of 1995.
This decrease was primarily attributable to a foreign exchange gain resulting
from an intercompany cash transaction offset by the inclusion of results for the
Magnetics Division for the entire first half of 1996.
Research and development expenses remained constant at 4.7% in the first half of
1996 and the first half of 1995. Total dollars expended for research and
development increased to $2.7 million in the six month period ended June 30,
1996 from $2.2 million in the same period in 1995. The Company believes that the
continued timely development of new products and enhancements to its existing
products are essential to maintaining the Company's competitive position.
Accordingly, the Company anticipates that such expenses will continue to
increase in absolute dollars.
Income from operations as a percentage of net sales increased to 16.3% for the
period ended June 30, 1996, compared to 14.9% for the same period in 1995
primarily due to lower operating expenses as a percentage of revenue as
discussed above.
<PAGE>
Interest income increased to $719,000 in the first half of 1996 compared to
$559,000 in the same period of 1995 as a result of higher cash balances in the
first half of 1996.
Interest expense decreased to $90,000 for the six month period ended June 30,
1996, from $133,000 for the same period in 1995 due to the payment of debt
related to the Cognitive and Stadia acquisitions.
Income taxes as a percentage of income before income taxes increased to 36.7%
for the first half of 1996 from 35.1% for the same period in 1995, due in part
to an increase in the Australian tax rate to 39%, and in part to the reduced
impact of the partially suspended federal research and development tax credit.
Certain Factors That May Affect Future Results
- ----------------------------------------------
The Company's representatives may from time to time make oral forward looking
statements. The factors set forth below are certain important factors that could
cause actual results to differ materially from those projected in any such
forward looking statements.
Future Operating Results Subject to Fluctuation. The Company's operating results
may fluctuate in the future as a result of a number of factors, including the
timing of customer orders, timing of completion of existing customer contracts,
variations in the Company's sales channels or the mix of products it sells,
changes in pricing policies by the Company's suppliers, fluctuations in
manufacturing yields, the market acceptance of new and enhanced versions of the
Company's products and the timing of acquisitions of other businesses, products
and technologies and any associated charges to earnings. Further, the Company's
expense levels are based in part on expectations of future revenues, and the
Company has been increasing and expects to continue to increase operating
expenditures and inventory as it expands its operations. The rate of new orders
may vary significantly from month to month; consequently, if anticipated sales
and shipments in any quarter do not occur when expected, operating expenses and
inventory levels could be disproportionately high and the Company's operating
results for that quarter, and potentially for future quarters, would be
adversely affected. A significant percentage of revenue growth in the quarter
ended and six months ended June 30, 1996 is attributable to purchases of
transaction printers by a single customer. Based on forecasts from the customer
the Company believes that orders will continue at least through 1996. Shipments
are made against purchase orders not pursuant to a contract. The Company expects
the volume to diminish in the second half of 1996 compared to the first half of
1996. In addition, the Company's results could be affected by general economic
conditions. Fluctuations in operating results may cause volatility in the price
of the Company's Common Stock.
Management of Acquisitions. Historically, the Company has achieved a portion of
its growth through acquisitions of other businesses and continues to pursue
additional acquisitions as part of its growth strategy. There are a number of
risks associated with any acquisition, including the substantial time and
attention required from management of the Company in connection with such
transactions, the difficulty of predicting whether the operations will perform
as expected and other problems inherent with any transition of one business
organization into another. There can be no assurance that the anticipated
benefits of any acquisition will be realized. A failure by the Company to manage
any such acquisitions effectively could materially and adversely affect the
Company's business and operating results. Additionally, future acquisitions
could result in potentially dilutive issuances of equity securities, the
incurrence of debt and contingent liabilities and amortization expenses related
to goodwill and other intangible assets, any of which could materially adversely
affect the Company's operating results and financial condition.
Technological Change; Competition; Dependence on New Products. The markets for
some of the Company's products are characterized by frequent new product
introductions and declining average selling prices over product life cycles. The
Company's future success is highly dependent upon the timely completion and
introduction of new products at competitive price/performance levels. In
addition, the Company must respond to current competitors, who may choose to
increase their presence in the Company's markets, and to new competitors, who
may choose to enter those markets. If the Company is unable to make timely
introduction of new products or respond to competitive threats, its business and
operating results could be materially adversely affected.
<PAGE>
Fluctuation in Demand. The Company's customers encounter uncertain and changing
demand for their products. They typically order products from the Company based
on their forecasts. If demand falls below customers' forecasts, or if customers
do not control their inventories effectively, they may cancel or reschedule
shipments previously ordered from the Company. The Company has in the past
experienced, and may at any time and with minimal notice in the future
experience, cancellations and postponements of orders.
FINANCIAL CONDITION, LIQUIDITY, AND CAPITAL RESOURCES
The Company's primary source of liquidity has been cash flow generated from
operations. Cash, cash equivalents, and short-term investment securities held to
maturity totaled approximately $37.4 million on June 30, 1996, compared to $31.7
million on December 31, 1995.
OPERATING ACTIVITIES
For the six-month period ended June 30, 1996, the Company generated
approximately $8.5 million in net cash from operating activities primarily as a
result of approximately $6.3 million in net income, $1.5 million in depreciation
and amortization, and an increase in net operating assets of $500,000. Since
December 31, 1995, inventories increased $1.7 million in anticipation of
progressing sales.
INVESTING ACTIVITIES
The Company's principal investing activities in the six month period ended June
30, 1996 were the purchase of property and equipment for product development and
production and the investment in short-term securities held to maturity. The
average life of securities held has been extended to ten months to secure higher
returns. As of June 30, 1996, material commitments for capital expenditures
included $1.3 million for the initial acquisition and implementation of a new
worldwide MIS system, as well as the required payments for Stadia and Cognitive
described below. The Company anticipates capital expenditures in 1996 between $3
to $5 million, principally for new product tooling, manufacturing equipment and
the new MIS system.
The Company is also required to make additional payments, not to exceed an
aggregate of $3 million, to the former shareholder of Cognitive based upon the
attainment of specified net sales by a particular Cognitive product line. The
Company does not expect the payment to be material for the remainder of 1996.
See Note 3 of notes to condensed consolidated financial statements.
The Company continues to evaluate potential acquisitions of businesses that
would complement the Company's existing businesses and product lines, and any
such acquisitions could require the use of the Company's cash resources and/or
additional borrowings.
FINANCING ACTIVITIES
The Company's major financing activities for the first six months of 1996 were
the principal repayment of debt, including the notes payable associated with the
Stadia and Cognitive acquisitions. As of June 30, 1996, the Company had $2.6
million in debt outstanding of which the current portion was approximately
$500,000. This debt includes $2.0 million payable to the former owner of
Cognitive in annual installments of $500,000 each due in 1996 through 1999 to
the former owner of Cognitive.
On August 15, 1995, the Company renewed a $6.5 million line of credit agreement
originally signed on August 15, 1994. The line of credit includes a subfeature
to issue standby and/or commercial letters of credit not to exceed $1.5 million.
Borrowings under the line bear interest at a rate per annum equal to the prime
rate in effect from time to time. As of June 30, 1996, no amounts had been drawn
against this line of credit. The current line expires on August 15, 1996 and the
Company expects to renew for an additional year.
<PAGE>
The Company currently expects that current cash balances and cash generated from
operations will adequately fund the Company's anticipated cash needs for the
next 12 months. However, the Company continues to evaluate potential
acquisitions of businesses that would complement the Company's existing
businesses and product lines, and any such acquisitions could require the use of
the Company's cash resources and/or additional borrowings.
The Company reviews potential foreign currency risks on an ongoing basis and to
date has been able to effectively manage this risk without the use of hedging
instruments. In the second quarter of 1996 a $186,000 net gain was realized as a
result of favorable exchange rates prevailing when the foreign subsidiaries
reduced intercompany obligations.
<PAGE>
Item 6 - Exhibits and reports on Form 8-K
(a) Exhibits:
Exhibit 11 Computation of Net Income Per Share.
Exhibit 27 Financial Data Schedule.
(b) Reports on Form 8-K
No report on Form 8-K was filed during the quarter
ended June 30, 1996.
<PAGE>
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.
DH Technology, Inc. by:
August 12, 1996 /s/Janet W. Shanks
--------------- ------------------
Date Janet W. Shanks, Chief Accounting Officer
(Chief Accounting Officer)
<PAGE>
DH TECHNOLOGY, INC.
EXHIBITS TO QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1996
SEQUENTIALLY
EXHIBIT DESCRIPTION NUMBERED PAGE
- ------------------------------------------------------------------------------
11 Computation of Net Income Per Share 13
27 Financial Data Schedule 14
<PAGE>
<TABLE>
EXHIBIT 11
DH TECHNOLOGY, INC. AND SUBSIDIARIES
Computation of Net Income Per Share
(In thousands, except per share data)
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------------------- --------------------------------
1996 1995 1996 1995
-------------------------------- --------------------------------
<S> <C> <C> <C> <C>
Primary and fully diluted:*
Average shares outstanding 7,938 7,781 7,922 7,761
Net effect of dilutive stock
options and warrants based on
the treasury stock method using
average market price 566 485 580 468
------------- ------------- ------------- --------------
Average common and common
equivalent shares outstanding 8,521 8,265 8,490 8,229
Net income $3,291 $2,497 $6,325 $4,862
Per share (primary and fully diluted)
============= ============= ============= ==============
Net income per share $.39 $.30 $.75 $.59
============= ============= ============= ==============
<PAGE>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
EXHIBIT 27 - 10Q FOR QUARTER ENDED 06/30/96
</LEGEND>
<CIK> 0000728376
<NAME> DH TECHNOLOGY, INC
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 24,823
<SECURITIES> 12,555
<RECEIVABLES> 16,566
<ALLOWANCES> (1,221)
<INVENTORY> 16,051
<CURRENT-ASSETS> 71,088
<PP&E> 20,597
<DEPRECIATION> 12,874
<TOTAL-ASSETS> 93,443
<CURRENT-LIABILITIES> 16,896
<BONDS> 2,069
0
0
<COMMON> 12,764
<OTHER-SE> 61,565
<TOTAL-LIABILITY-AND-EQUITY> 93,443
<SALES> 57,406
<TOTAL-REVENUES> 57,406
<CGS> 37,441
<TOTAL-COSTS> 37,441
<OTHER-EXPENSES> 10,607
<LOSS-PROVISION> 58
<INTEREST-EXPENSE> 90
<INCOME-PRETAX> 9,987
<INCOME-TAX> 3,662
<INCOME-CONTINUING> 6,325
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,325
<EPS-PRIMARY> .75
<EPS-DILUTED> .75
</TABLE>
