<PAGE>
===============================================================================
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 quarter ended April 1, 1995 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 0-18623
---------------------------
IKOS SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 77-0100318
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
19050 PRUNERIDGE AVE., CUPERTINO, CA 95014
(Address of principal executive offices) (zip code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(408) 255-4567
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
COMMON STOCK $.01 PAR VALUE
--------------------------- 5,527,000
(Title of Class) (Outstanding as of April 1, 1995)
===============================================================================
<PAGE>
IKOS SYSTEMS, INC.
FORM 10-Q
QUARTER ENDED APRIL 1, 1995
INDEX
-----
Part I: Financial Information
Item 1: Financial Statements
<TABLE>
<CAPTION>
PAGE
<S> <C>
Consolidated Balance Sheets at
April 1, 1995 and October 1, 1994...................... 3
Consolidated Statements of Operations
for the three months ended
April 1, 1995 and April 2, 1994........................ 4
Consolidated Statement of Cash Flows
for the three months ended
April 1, 1995 and April 2, 1994........................ 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 4: Submission of Matters to Date............................ 10
Item 6: Exhibits and Reports on Form 8-K......................... 11
Signatures....................................................... 14
</TABLE>
2
<PAGE>
IKOS SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
April 1, October 1,
1995 1994
----------- -----------
(Unaudited) (Audited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.................................... $ 2,960 $ 3,422
Short-term investments....................................... 574 560
Accounts receivable (net of allowance for
doubtful accounts of $122)................................. 6,803 4,884
Inventories.................................................. 1,159 1,050
Prepaid expenses and other current assets.................... 260 222
-------- --------
Total current assets......................................... 11,756 10,138
Equipment and leasehold improvements:
Office and evaluation equipment.............................. 2,613 2,576
Machinery and equipment...................................... 4,727 4,664
Leasehold improvements....................................... 267 267
-------- --------
7,607 7,507
Less allowances for depreciation and amortization............ (6,100) (5,859)
-------- --------
1,507 1,648
Other assets................................................... 184 343
-------- --------
$ 13,447 $ 12,129
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable............................................. $ 2,192 $ 1,909
Accrued payroll and related expenses......................... 799 786
Accrued commissions.......................................... 322 650
Deferred maintenance revenues................................ 2,416 1,979
Other accrued liabilities.................................... 295 373
Current portion of long-term debt............................ 918 591
-------- --------
Total current liabilities.................................... 6,942 6,288
Long-term debt, less current portion........................... 1,574 2,151
Accrued rent................................................... 232 214
Stockholders' equity:
Preferred stock, $.01 par value; 10,000 shares authorized,
none issued or outstanding................................. -- --
Common stock, $.01 par value; 25,000 shares authorized,
5,527 and 5,504 issued and outstanding, respectively....... 55 55
Additional paid-in capital..................................... 26,020 25,960
Accumulated deficit.......................................... (21,376) (22,539)
-------- --------
Total stockholders' equity.................................. 4,699 3,476
-------- --------
$ 13,447 $ 12,129
======== ========
</TABLE>
See notes to consolidated financial statements
3
<PAGE>
IKOS SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
--------------------- ---------------------
April 1, April 2, April 1, April 2,
1995 1994 1995 1994
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net revenues
Product.................................. $5,504 $4,366 $10,534 $ 8,326
Maintenance.............................. 1,176 943 2,254 1,779
------ ------ ------- -------
Total net revenues.................. 6,680 5,309 12,788 10,105
------ ------ ------- -------
Cost of revenues
Product.................................. 1,447 1,242 2,761 2,436
Maintenance.............................. 216 239 546 405
------ ------ ------- -------
Total cost of revenues.............. 1,663 1,481 3,307 2,841
------ ------ ------- -------
Gross profit............................. 5,017 3,828 9,481 7,264
Operating expenses:
Research and development................. 1,035 984 1,954 1,952
Sales and marketing...................... 2,686 2,301 5,268 4,352
General and administrative............... 551 401 1,034 780
------ ------ ------- -------
Total operating expenses............ 4,272 3,686 8,256 7,084
------ ------ ------- -------
Income from operations..................... 745 142 1,225 180
------ ------ ------- -------
Other income (expense):
Interest income.......................... 26 14 49 28
Interest expense......................... (25) (11) (63) (11)
Other income............................. 29 29 58 58
------ ------ ------- -------
Total other income.................. 30 32 44 75
------ ------ ------- -------
Income before provision for income taxes... 775 174 1,269 255
Provision for income taxes................. 60 -- 106 --
------ ------ ------- -------
Net income.......................... $ 715 $ 174 $ 1,163 $ 255
====== ====== ======= =======
Net income per share....................... $ 0.12 $ 0.03 $ 0.20 $ 0.04
====== ====== ======= =======
Common and common equivalent shares
used in computing per share amounts...... 6,011 5,697 5,897 5,682
====== ====== ======= =======
</TABLE>
See notes to consolidated financial statements
4
<PAGE>
IKOS SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Increase (decrease) in cash and cash equivalents in thousands
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
-----------------------------
April 1, April 2,
1995 1994
--------- --------
<S> <C> <C>
Operating activities:
Net income................................................. $ 1,163 $ 255
Adjustment to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization............................ 684 1,097
Loss on retirement of equipment.......................... 2 6
Deferred rent............................................ 18 1
License delivery and technology transfer in
exchange for debt obligation........................... -- (324)
Changes in operating assets and liabilities:
Accounts receivable...................................... (1,919) (1,440)
Inventories.............................................. (65) 74
Prepaid expenses and other assets........................ (38) (254)
Other assets............................................. (12) (1)
Accounts payable......................................... 283 (1,243)
Accrued payroll and other expenses....................... 13 70
Accrued commissions...................................... (328) (21)
Deferred maintenance revenues............................ 437 186
Income taxes payable..................................... (20) (3)
Other accrued liabilities................................ (58) (50)
------- -------
Net cash provided by (used in) operating activities.... 160 (1,647)
Investing activities:
Purchases of equipment and leasehold improvements.......... (418) (454)
Purchase of short-term investments......................... (14) (10)
------- -------
Net cash used in investing activities.................. (432) (464)
Financing activities:
Principal payments on line of credit
and long-term borrowings............................... (250) (525)
Promissory note............................................ -- 750
Sale of common stock....................................... 60 50
------- -------
Net cash provided by (used in) financing activities... (190) 275
------- -------
Decrease in cash and cash equivalents........................ (462) (1,836)
Cash and cash equivalents at beginning of period............. 3,422 2,867
------- -------
Cash and cash equivalents at end of period................... $ 2,960 $ 1,031
======= =======
</TABLE>
See notes to consolidated financial Statements
5
<PAGE>
IKOS SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. Basis of Presentation
The accompanying consolidated financial statements for the three months
ended April 1, 1995, have been prepared in conformity with generally
accepted accounting principles, consistent with those applied in, and should
be read in conjunction with, the audited consolidated financial statements
for the year ended October 1, 1994 included in the Form 10-K as filed with
the Securities and Exchange Commission on December 28, 1994. The interim
financial information is unaudited, but reflects all normal recurring
adjustments which are, in the opinion of management, necessary for a fair
statement of results for the interim periods presented. The results for the
three month period ended April 1, 1995 are not necessarily indicative of
results expected for the full year.
2. Short-Term Investments
In May 1993, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 115 (FAS 115), "Accounting for Certain
Investments in Debt and Equity Securities," effective for fiscal years
beginning after December 15, 1993. Under the new rules, debt securities that
the Company has both positive intent and ability to hold to maturity are
carried at amortized cost. Debt securities that the Company does not have
the positive intent and ability to hold to maturity and all marketable
equity securities are classified as available-for-sale or trading and
carried at fair value. Unrealized holding gains and losses on securities
classified as available-for-sale are reported as part of equity while
unrealized holding gains and losses on securities classified as trading are
reported in earnings.
The Company adopted FAS 115 on October 2, 1994 and all debt securities are
classified as held-to-maturity. The adoption of FAS 115 had no material
impact on the Company's financial position or its operating results during
fiscal 1995.
3. Revenue Recognition
Product revenues, which include licensing and software revenues, are
generally recognized on shipment provided that no significant vendor or
post-contract support obligations remain outstanding and collection of the
resulting receivable is deemed probable. Insignificant vendor and post-
support obligations are accrued upon shipment. Revenue under maintenance
contracts is recognized ratably over the term of the related contract,
generally twelve months.
4. Inventories
Inventories are stated at the lower of cost (first-in, first-out) or market
and consisted of (in thousands):
<TABLE>
<CAPTION>
April 1, October 1,
1995 1994
-------- ----------
<S> <C> <C>
Purchase parts $ 248 $ 259
Work-in-process 633 502
Finished goods 278 289
------ ------
Total inventory $1,159 $1,050
====== ======
</TABLE>
6
<PAGE>
5. Net Income Per Share
Net income per share is based on the weighted average number of common
shares outstanding during the period. Common equivalent shares from
options have been included in the computation when dilutitive.
6. Stock Split
On October 20, 1994 the Board of Directors approved a one-for-two reverse
stock split of the outstanding shares of Common Stock of the Company. This
reverse stock split did not alter the number of authorized shares of the
Company's stock or any other provision of the Company's Certificate of
Incorporation and was approved by the Stockholders of the Company on January
26, 1995 at the Company's 1995 Annual meeting. The reverse stock split
effects a conversion of each two outstanding shares of Common Stock held of
record as of the close of business on April 21, 1995 into one share of
Common Stock. The reverse stock split was effected on April 24, 1995 and has
been presented retroactively within these financial statements.
On a pre-split basis the earnings would have been as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------- -------------------
April 1, April 2, April 1, April 2,
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net income per share................... $ 0.06 $ 0.02 $ 0.10 $ 0.02
------- ------- ------- -------
Common and common equivalent shares
used in computing per share amounts... 12,021 11,394 11,793 11,363
------- ------- ------- -------
</TABLE>
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
NET REVENUES
Second quarter revenue totaled $6.7 million, an increase of 26% over the same
quarter in fiscal 1994. For the six month period revenue totaled $12.8 million,
an increase of 27% over the same period in fiscal 1994. The reasons for the
increase were increased sales of the Voyager product line plus some initial
sales of the new Gemini product line. The new Gemini software product allows
the Company's hardware accelerator (NSim) to accelerate simulations in a mixed
level verilog environment. Excluding maintenance, the Voyager and Gemini
product lines contributed approximately 90% of product revenues in both the
three and six month period ending April 1, 1995 compared to approximately 54%
and 60% for the same periods in fiscal 1994.
International sales remained strong, accounting for 32% of total revenue for
both the first half and the second fiscal quarter of 1995 compared to 23% and
24% for the same periods in fiscal 1994. International sales are expected to
continue to improve as a percentage of total sales by year end.
GROSS PROFIT MARGINS
Gross profit margins improved to 74% of revenue in the first half of fiscal 1995
and 75% of revenue in the second quarter of fiscal 1995, compared to 72% for the
same periods in fiscal 1994. The increase was primarily the result of a change
in the product mix to more sales of the Voyager product line and to a lessor
extent the amortization of fixed manufacturing costs over a broader revenue
base.
Gross profit margins are expected to remain approximately unchanged in
subsequent quarters.
RESEARCH AND DEVELOPMENT EXPENSES
Research and development expenses in the second quarter of fiscal 1995 totaled
$1,035,000, compared to $984,000 for the same period in fiscal 1994. This
increase was the result of higher consulting fees. The expenses in the first
half of fiscal 1995 were $1,954,000 and were essentially unchanged from the same
period in fiscal 1994.
Research and development expenses are expected to increase throughout fiscal
1995 primarily due to increased headcount and associated recruiting expenses.
Headcount is expected to increase as the Company continues to improve and
expand on the features of the Voyager product line.
SALES AND MARKETING EXPENSES
Sales and marketing expenses increased by $385,000 to $2,686,000 for the second
fiscal quarter of 1995 and increased by $916,000 to $5,268,000 for the first
half of fiscal 1995, when compared to the same periods in fiscal 1994. These
increases were primarily the result of increased expenses for the international
operations. Sales and marketing expenses are expected to increase in absolute
dollars over the course of the fiscal year reflecting increased headcount,
commission expense and marketing expense. Sales and marketing expenses as a
percentage of total revenues, however, are expected to remain approximately
unchanged.
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses were $551,000 in the second quarter of
fiscal 1995 and $1,034,000 for the first half of fiscal 1995. This compares to
$401,000 and $780,000 for the same periods in fiscal 1994. These increases were
due to several factors including additional headcount,
8
<PAGE>
increased investor relations expense, profit sharing, and increased coverage for
director's and officer's insurance. General and administrative expenses are
expected to increase slightly in absolute dollars throughout the remainder of
fiscal 1995.
INCOME TAXES
The provision for income taxes consists primarily of federal alternative
minimum tax, state taxes and Japanese withholding taxes. The tax rate is
substantially below the federal statutory rate due to the utilization of net
operating loss carryovers.
LIQUIDITY AND CAPITAL RESOURCES
As of April 1, 1995, the Company had $3,534,000 in cash, cash equivalents and
short term investments which compares to $3,982,000 as of October 1, 1994.
This decrease was mainly due to the increases in accounts receivables due to
higher sales, purchases of equipment and payment of long term debt.
The Company's primary unused sources of funds at April 1, 1995, consisted of
$3,534,000 of cash, cash equivalents and short term investments. The Company
expects capital expenditures to increase from first half levels for the
remainder of the year as the expected headcount additions will require
additional workstations. The Company believes that its present cash position and
cash generated from operations will be sufficient to meet its capital needs for
at least the next twelve months.
9
<PAGE>
PART II. OTHER INFORMATION
ITEMS 1-3. Not applicable.
ITEM 4. Submission of Matters to Date.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Annual Meeting of Stockholders of the Company was held on January 26,
1995. The following matters were submitted to a vote of stockholders:
a. Election of Directors (all terms expire as of the date of the 1996 annual
meeting):
<TABLE>
<CAPTION>
Nominee In Favor Withheld
------- --------- --------
<S> <C> <C>
Gerald S. Casilli 9,591,788 9,196
William B. Fazakerly 9,591,788 9,196
Lutz P. Henckels 9,593,979 7,005
Ramon A. Nunez 9,592,779 8,205
Glenn E. Penisten 9,593,979 7,005
James R. Oyler 9,593,979 7,005
</TABLE>
b. To approve an amendment to the Company's Certificate of Incorporation to
provide for a 2:1 reverse stock split:
<TABLE>
<CAPTION>
In Favor Opposed Withheld
-------- ------- --------
<S> <C> <C>
9,315,565 259,527 25,892
</TABLE>
c. To ratify the appointment of Ernst & Young as the independent auditors of
the Company for the fiscal year ending September 30, 1995:
<TABLE>
<CAPTION>
In Favor Opposed Withheld
-------- ------- --------
<S> <C> <C>
9,578,528 3,078 19,378
</TABLE>
ITEM 5. Not Applicable
10
<PAGE>
ITEM 6. Exhibits and Reports on Form 8-K.
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exh. No. Documentation Description Page
- -------- ------------------------- ----
<C> <S> <C>
4.1 Amended and Restated Registration Rights Agreement between the
Company and certain investors dated April 3, 1990. (Incorporated
by reference to Exhibit 4.2 of the Company's registration
statement on Form S-1 effective July 25, 1990).
4.2 Rights agreement dated as of January 27, 1992. (Incorporated by
reference to Exhibit (C)1, in the Company's current report on
Form 8-K filed February 10, 1992.)
10.1 Lease Agreement for the Company's principal facility dated
March 20, 1992, between Ames Avenue Associates and the Company,
as amended. (Incorporated by reference to Exhibit 10.1 of the
Company's annual report on 10-K for the year ending September 26,
1992.)
10.2 Form of Director and Officer Indemnity Agreement. (Incorporated
by reference to Exhibit 10.6 of the Company's registration
statement on Form S-1 effective July 25, 1990.)
10.3 Amended and Restated Non-Qualified Stock Option Agreement dated
August 17, 1989, between the Company and Mr. Casilli.
(Incorporated by reference to Exhibit 10.7 of the Company's
registration statement on Form S-1 effective July 25, 1990.)
10.4 Amended and Restated Non-Qualified Stock Option Agreement dated
August 17, 1989, between the Company and Mr. Casilli.
(Incorporated by reference to Exhibit 10.8 of the Company's
registration statement on Form S-1 effective July 25, 1990.)
10.5 Amended and Restated Non-Qualified Stock Option Agreement dated
August 17, 1989, between the Company and Mr. Fazakerly.
(Incorporated by reference to Exhibit 10.9 of the Company's
registration statement on Form S-1 effective July 25, 1990.)
10.6 Amended and Restated Non-Qualified Stock Option Agreement dated
August 17, 1989, between the Company and Mr. Fazakerly.
(Incorporated by reference to Exhibit 10.10 of the Company's
registration statement on Form S-1 effective July 25, 1990.)
10.7 1988 Stock Option Plan. (Incorporated by reference to
Exhibit 10.14 of the Company's registration statement on
Form S-1 effective July 25, 1990.)
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
Exh. No. Documentation Description Page
- ------- ------------------------- ----
<C> <S> <C>
10.8 Non-Qualified Stock Option Agreement dated August 17, 1989,
between the Company and Mr. Casilli. (Incorporated by reference
to Exhibit 10.19 of the Company's registration statement on
Form S-1 effective July 25, 1990.)
10.9 Patent Cross License Agreement dated May 17, 1989 with Zycad
Corporation. (Incorporated by reference from Zycad Corporation's
Annual Report on Form 10-K filed April 2, 1990.) (Incorporated
by reference to Exhibit 10.20 of the Company's registration
statement on Form S-1 effective July 25, 1990.)
10.10 International Distributorship Agreement dated April 11, 1988,
with C. Itoh & Co., Ltd. (with certain confidential portions
excised). (Incorporated by reference to Exhibit 10.24 of the
Company's registration statement on Form S-1 effective
July 25, 1990.)
10.11 OEM Software License Agreement between CAD Language Systems,
Inc. and IKOS Systems, Inc. dated June 22, 1989 and amendment
dated September 1991. (Incorporated by reference to
Exhibit 10.18 of the Company's Annual Report for the year ended
September 28, 1991.)
10.12 Technology Transfer and Joint Development Agreement with
Racal-Redac, Inc. dated July 1, 1993 (with certain portions
excised). (Incorporated by reference to Exhibit 10.19 of the
Company's quarterly report on Form 10-Q for the quarter ended
July 3, 1993.)
10.13 Software License Agreement with Compass Design Automation dated
December 31, 1993. (Incorporated by reference to Exhibit 10.17
of the Company's quarterly report on Form 10-Q for the quarter
ended January 1, 1994.)
10.14 Agreement dated June 2, 1994, between the Company and Gerald S.
Casilli. (Incorporated by reference to Exhibit 10.17 of the
Company's quarterly report on Form 10-Q for the quarter ended
July 2, 1994.)
10.15 Agreement dated June 2, 1994, between the Company and William B.
Fazakerly. (Incorporated by reference to Exhibit 10.18 of the
Company's quarterly report on Form 10-Q for the quarter ended
July 2, 1994.)
10.16 Agreement dated June 2, 1994, between the Company and Daniel R.
Hafeman. (Incorporated by reference to Exhibit 10.19 of the
Company's quarterly report on Form 10-Q for the quarter ended
July 2, 1994.)
10.17 Agreement dated June 2, 1994, between the Company and Stephen M.
McLaughlin. (Incorporated by reference to Exhibit 10.20 of the
Company's quarterly report on Form 10-Q for the quarter ended
July 2, 1994.)
10.18 Agreement dated June 2, 1994, between the Company and Lawrence A.
Melling. (Incorporated by reference to Exhibit 10.21 of the
Company's quarterly report on Form 10-Q for the quarter ended
July 2, 1994.)
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
Exh. No. Documentation Description Page
- ------- ------------------------- ----
<C> <S> <C>
10.19 Agreement dated June 2, 1994, between the Company and Ramon A.
Nunez. (Incorporated by reference to Exhibit 10.22 of the
Company's quarterly report on Form 10-Q for the quarter ended
July 2, 1994.)
10.20 Agreement dated June 2, 1994, between the Company and Joseph W.
Rockom. (Incorporated by reference to Exhibit 10.23 of the
Company's quarterly report on Form 10-Q for the quarter ended
July 2, 1994.)
11.1 Statements of Computation of Earnings Per Share
27.1 Financial Data Schedule
</TABLE>
13
<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.
IKOS SYSTEMS, INC.
------------------
Registrant
Date: May 10, 1995 /s/ Joseph W. Rockom
------------ --------------------
(JOSEPH W. ROCKOM, CFO)
Principal Financial Officer,
Duly Authorized Officer
14
<PAGE>
Exhibit 11.1
IKOS SYSTEMS, INC.
STATEMENTS OF COMPUTATION OF EARNINGS PER SHARE
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------ -------------------
April 1, April 2, April 1, April 2,
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net income $ 715 $ 174 $1,163 $ 255
Number of shares used in computing per
share amounts:
Weighted average common stock outstanding.. 5,521 5,446 5,515 5,442
Common equivalent shares attributable to
stock options (treasury stock method).... 490 251 382 240
------ ------ ------ ------
Total weighed average common shares
outstanding.............................. 6,011 5,697 5,897 5,682
====== ====== ====== ======
Net income per share......................... $ 0.12 $ 0.03 $ 0.20 $ 0.04
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-01-1994
<PERIOD-START> OCT-02-1994
<PERIOD-END> APR-01-1995
<CASH> 2,960
<SECURITIES> 574
<RECEIVABLES> 6,925
<ALLOWANCES> (122)
<INVENTORY> 1,159
<CURRENT-ASSETS> 11,756
<PP&E> 7,607
<DEPRECIATION> (6,100)
<TOTAL-ASSETS> 13,447
<CURRENT-LIABILITIES> 6,942
<BONDS> 0
<COMMON> 55
0
0
<OTHER-SE> 4,644
<TOTAL-LIABILITY-AND-EQUITY> 13,447
<SALES> 10,534
<TOTAL-REVENUES> 12,788
<CGS> 2,761
<TOTAL-COSTS> 3,307
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 63
<INCOME-PRETAX> 1,269
<INCOME-TAX> 106
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,163
<EPS-PRIMARY> 0.20
<EPS-DILUTED> 0.20
</TABLE>
