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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10 - Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE THREE MONTHS ENDED MARCH 31, 1997
[ ] 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 0-21450
EQUINOX SYSTEMS INC.
(Exact name of Company as specified in its charter)
FLORIDA 59-2268442
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
ONE EQUINOX WAY
SUNRISE, FLORIDA 33351-6709
(Address of principal executive offices) (Zip Code)
Company's telephone number, including area code: (954) 746-9000.
Indicate by check mark whether the Company (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 Company
was required to file such report(s)), and (2) has been subject to such filling
requirements for the past 90 days. Yes X No__
Number of shares of the Common Stock of Equinox Systems Inc. issued and
outstanding as of April 21, 1997: 3,689,833.
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<PAGE>
INDEX
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PAGE
----
PART I - FINANCIAL INFORMATION
Condensed Consolidated Balance Sheets
March 31, 1997 and December 31, 1996...............................3
Condensed Consolidated Statements of Income
Three months ended March 31, 1997 and 1996.........................4
Condensed Consolidated Statements of Cash Flows
Three months ended March 31, 1997 and 1996.........................5
Notes to Condensed Consolidated Financial Statements...................6
Management's Discussion and Analysis of Financial
Condition and Results of Operations................................8
PART II - OTHER INFORMATION
Item 5. Factors that May Affect Future Results.......................10
Item 6. Exhibits and Reports on Form 8-K.............................12
Signature Page........................................................13
- 2 -
<PAGE>
<TABLE>
<CAPTION>
EQUINOX SYSTEMS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In thousands)
MARCH 31, DECEMBER 31,
1997 1996
------------------- -------------------
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents........................................... $ 11,714 $ 12,998
Marketable securities............................................... 3,350 1,350
Accounts receivable................................................. 3,163 3,480
Inventories......................................................... 4,490 4,073
Deferred income taxes............................................... 1,064 1,068
Prepaid expenses and other assets................................... 739 423
----------- ------------
Total current assets............................................... 24,520 23,392
----------- ------------
PROPERTY AND EQUIPMENT, at cost 5,266 5,212
Less-accumulated depreciation....................................... (1,985) (1,825)
----------- ------------
3,281 3,387
----------- ------------
$ 27,801 $ 26,779
=========== ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable.................................................... $ 2,408 $ 2,294
Accrued expenses.................................................... 1,395 1,588
Accrued income taxes................................................ 792 383
Deferred service contract revenue................................... 152 192
----------- ------------
Total current liabilities 4,747 4,457
----------- ------------
DEFERRED INCOME TAXES.................................................. 28 31
----------- ------------
SHAREHOLDERS' EQUITY:
Common stock........................................................ 37 37
Additional paid-in capital.......................................... 12,030 12,030
Retained earnings................................................... 10,959 10,224
----------- ------------
Total shareholders' equity......................................... 23,026 22,291
----------- ------------
$ 27,801 $ 26,779
=========== ============
The accompanying notes are an integral part of these condensed consolidated balance sheets.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
EQUINOX SYSTEMS INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(In thousands, except per share amounts)
THREE MONTHS ENDED MARCH 31,
-----------------------------------
1997 1996
------------- --------------
<S> <C> <C>
NET SALES............................................................. $ 6,364 $ 6,086
COST OF SALES......................................................... 3,241 3,116
------------- --------------
Gross profit....................................................... 3,123 2,970
------------- --------------
OPERATING EXPENSES:
Research and development........................................... 754 644
Selling, general and administrative................................ 1,348 1,351
------------- --------------
Total operating expenses.......................................... 2,102 1,995
------------- --------------
Income from operations............................................ 1,021 975
OTHER INCOME, NET..................................................... 128 114
------------- --------------
Income before income taxes........................................ 1,149 1,089
PROVISION FOR INCOME TAXES........................................... 414 415
------------- --------------
Net income........................................................ $ 735 $ 674
============= ==============
NET INCOME PER SHARE ................................................. $ 0.19 $ 0.17
============= ==============
WEIGHTED AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING................................ 3,899 4,014
============= ==============
The accompanying notes are an integral part of these condensed consolidated financial statements.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
EQUINOX SYSTEMS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In thousands)
THREE MONTHS ENDED MARCH 31,
--------------------------------------
1997 1996
------------------ ---------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income.............................................................. $ 735 $ 674
--------------- ---------------
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES:
Depreciation........................................................... 160 143
Provision for doubtful accounts and anticipated sales returns.......... 225 65
Provision for warranty costs........................................... 29 47
Recognition of deferred service contract revenue....................... (159) (219)
Imputed compensation on stock options.................................. -- 16
(INCREASE) DECREASE IN:
Accounts receivable.................................................... 92 (137)
Inventories............................................................ (417) (918)
Prepaid expenses and other current assets.............................. (316) 69
INCREASE (DECREASE) IN:
Accounts payable....................................................... 114 96
Accrued expenses....................................................... (222) (458)
Income taxes........................................................... 410 270
Deferred service contract revenue...................................... 119 191
--------------- ---------------
Total adjustments...................................................... 35 (835)
--------------- ---------------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES........................ 770 (161)
--------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities..................................... (2,000) --
Maturities of marketable securities.................................... -- 507
Purchases of property and equipment.................................... (54) (118)
--------------- ---------------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES........................ (2,054) 389
--------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Stock options exercised................................................ -- 22
Repurchases and retirement of common stock............................. -- (632)
--------------- ---------------
NET CASH USED IN FINANCING ACTIVITIES...................................... -- (610)
--------------- ---------------
NET DECREASE IN CASH AND CASH EQUIVALENTS.................................. (1,284) (382)
--------------- ---------------
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD............................. 12,998 13,607
--------------- ---------------
CASH AND CASH EQUIVALENTS, END OF PERIOD................................... $ 11,714 $ 13,225
=============== ===============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Income taxes paid...................................................... $ 5 $ 145
=============== ===============
The accompanying notes are an integral part of these condensed consolidated financial statements.
</TABLE>
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<PAGE>
EQUINOX SYSTEMS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
(UNAUDITED)
(1) BASIS OF PRESENTATION
The condensed consolidated balance sheet as of December 31, 1996, which has been
derived from the annual audited financial statements, and the unaudited interim
condensed consolidated financial statements included herein, have been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission.
Certain information and note disclosures normally included in annual financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to those rules and regulations. The
Company believes that the disclosures made are adequate to make the information
presented not misleading. It is suggested that these financial statements be
read in conjunction with the financial statements and the notes thereto included
in the Company's Annual Report on Form 10-K for the year ended December 31,
1996.
In the opinion of the Company, its financial statements contain all material
adjustments, consisting of only normal recurring accruals, necessary to present
fairly the Company's financial position and results of operations. Results of
operations for the three months ended March 31, 1997 are not necessarily
indicative of the results to be expected for the year ending December 31, 1997.
The accounting policies followed for quarterly financial reporting purposes are
the same as those disclosed in the Company's audited financial statements for
the year ended December 31, 1996, included in the Company's Form 10-K.
(2) NET INCOME PER SHARE
Net Income per share is based on the weighted average number of common shares
and common share equivalents outstanding which include, where appropriate, the
assumed exercise or conversion of options. In computing net income common and
common equivalent shares the Company currently utilizes the modified treasury
stock method and in prior years, used the treasury stock method (See Note 5).
Net income per share for primary and fully diluted computations are the same for
the three months ended March 31, 1997 and 1996.
(3) INVENTORIES
Inventories consist of the following as of March 31, 1997 and December 31, 1996
(in thousands):
1997 1996
----------- ------------
Raw materials.......................... $ 703 $ 1,022
Work-in-progress....................... 494 318
Finished goods......................... 3,293 2,733
----------- ------------
$ 4,490 $ 4,073
=========== ============
(4) COMMON STOCK - STOCK REPURCHASE PROGRAM
In November 1994, the Board of Directors authorized the Company to repurchase up
to 500,000 shares of the Company's issued and outstanding common stock. During
1996 and 1995, the Company repurchased 500,000 shares of its common stock in the
open market for an aggregate purchase price of approximately $3,940,000. In
March 1997, the Board of Directors authorized the Company to repurchase up to an
additional 1,000,000 shares of the Company's issued and outstanding common
stock. Repurchases may be made from time to time, subject to prevailing
conditions, in open market or privately negotiated transactions. As of March 31,
1997, no repurchases had been made under the new plan.
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<PAGE>
EQUINOX SYSTEMS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
MARCH 31, 1997
(UNAUDITED)
(5) NEWLY ISSUED ACCOUNTING STANDARD
In March 1997, the Financial Accounting Standards Board issued SFAS No. 128
"Earnings Per Share," which is required to be adopted as of December 31, 1997.
Upon adoption all prior earnings per share amounts are required to be
retroactively restated.
In accordance with Staff Accounting Bulletin 74, the Company is disclosing the
effect this new accounting pronouncement would have for the three months ended
March 31, 1997 and 1996 on a pro-forma basis. The following table summarizes the
pro forma earnings per share amounts under the new Statement. (In thousands,
except per share amounts).
<TABLE>
<CAPTION>
NET PER SHARE
INCOME SHARES AMOUNT
------------ -------------- ---------------
FOR THE THREE MONTHS ENDED MARCH 31, 1997
-------------------------------------------------------
<S> <C> <C> <C>
Net Income..................................................... $ 735
BASIC EARNINGS PER SHARE
Income available to common shareholders........................ $ 735 3,690 $ 0.20
============
DILUTED EARNINGS PER SHARE
Options issued to employees.................................... 160
-----------
Income available to common stockholders plus assumed
conversions.................................................... $ 735 3,850 $ 0.19
============ =========== ============
FOR THE THREE MONTHS ENDED MARCH 31, 1996
----------------------------------------------------------
Net Income..................................................... $ 674
BASIC EARNINGS PER SHARE
Income available to common shareholders........................ $ 674 3,836 $ 0.18
============
DILUTED EARNINGS PER SHARE
Options issued to employees.................................... 152
-----------
Income available to common stockholders plus assumed
conversions.................................................... $ 674 3,988 $ 0.17
============ =========== ============
</TABLE>
Basic earnings per common share is computed by dividing net income by the
weighted average number of shares of common stock outstanding during the
quarter. The computation of diluted earnings per common share is similar to the
computation of basic earnings per common share except that the denominator is
increased for the assumed exercise of dilutive options using the treasury stock
method.
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<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
COMPARISON OF THREE MONTHS ENDED MARCH 31, 1997 AND 1996
NET SALES. Net sales for the quarter increased 5% to $6.4 million in 1997 from
$6.1 million in 1996. Sales of Serial I/O Products increased 10% to $4.6 million
in 1997 from $4.2 million in 1996, primarily due to a 25% increase in sales to
distributors partially offset by an 8% decrease in sales to OEM customers.
Although sales to OEM customers declined, sales to Hewlett-Packard Company (HP),
for which Equinox supplies its SST products for use in the HP9000 D-Class
server, increased 4% over the prior year. Although the Company believes there
are future growth opportunities related to existing and potential OEMs, sales to
OEM customers are difficult to predict as they fluctuate along with the demand
for the OEM's final product, over which Equinox has no control.
Sales of Data Switching Systems and Terminal Servers, collectively, decreased 5%
to $1.8 million in 1997 from $1.9 million in 1996. This decrease is primarily
attributable to fewer direct sales to customers of Data Switching Systems. One
customer represented 53% of Data Switching Systems revenue during the quarter.
Management does not expect sales to that customer to continue at comparable
levels and believes that the market for Data Switching Systems will decline over
time. Additionally, management believes that sales of its current Terminal
Server products may continue to decline until such time as an enhanced version
is developed and introduced.
COST OF SALES. Cost of sales for the quarter increased 4% to $3.2 million in
1997 from $3.1 million in 1996, primarily due to higher sales volume. As a
percentage of net sales, cost of sales were 51% in 1997 and 1996.
The Company's gross margin is dependent on product and channel mix, which
historically fluctuates from period to period, as well as overhead levels.
Increased sales to OEM's may negatively impact the Company's future gross
margin, as OEM sales are typically priced lower due to volume expectations as
well as limited sales/support requirements. However, volume and overhead
efficiencies, if any, could result in savings and improved gross margins.
RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses increased
$0.1 million to $0.8 million in 1997 primarily due to increased personnel
required as a result of expanded development efforts. As a percentage of net
sales, research and development expenses increased to 12% in 1997 from 11% in
1996. Research and development costs are charged to expense as incurred.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative (SG&A) expenses were $1.35 million in 1997 and 1996. Although the
Company has not incurred incremental SG&A costs in connection with increased
sales in the first three months of 1997, management expects SG&A costs to
increase in future periods as the Company continues to grow. As a percentage of
net sales, SG&A expenses decreased to 21% in 1997 from 22% in 1996 due to the
increase in net sales.
INCOME FROM OPERATIONS. Income from operations for the three months was $1.0
million in 1997 and 1996. As a percentage of net sales, income from operations
was 16% in 1997 and 1996.
OTHER INCOME, NET. Other income, which includes interest income, increased
slightly primarily due to higher invested cash balances.
PROVISION FOR INCOME TAXES. The provision for income taxes for the quarter was
$0.4 million in 1997 and 1996. The Company's effective rate decreased to 36% in
1997 from 38% in 1996 based on a review of expected tax rates for the current
year.
NET INCOME. Net income for the three months increased $61,000 to $0.7 million
primarily as a result of increased sales and gross profit partially offset by
higher research and development costs. As a percentage of net sales, net income
increased to 12% in 1997 from 11% in 1996.
- 8 -
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital was $19.8 million at March 31, 1997, compared with
$18.9 million at December 31, 1996. Cash and cash equivalents and marketable
securities were $15.1 million at March 31, 1997, compared with $14.3 million at
December 31, 1996. Net cash provided by operating activities was $0.8 million
during the three months ended March 31, 1997. This was primarily due to net
income, a reduction in accounts receivable and accrued expenses offset by
increases in inventories and other current assets. Net cash used in investing
activities was $2.1 million during the period, primarily due to purchases of
marketable securities. As of March 31, 1997, the Company had no material
commitments for capital expenditures.
In November 1994, the Board of Directors authorized the Company to repurchase up
to 500,000 shares of the Company's issued and outstanding common stock. During
1996 and 1995, the Company repurchased 500,000 shares of its common stock in the
open market for an aggregate purchase price of approximately $3,940,000. In
March 1997, the Board of Directors authorized the Company to repurchase up to an
additional 1,000,000 shares of the Company's issued and outstanding common
stock. As of March 31, 1997 no repurchases had been made under the new plan.
Management believes that cash and cash equivalents and marketable securities
together with funds generated from operations will be adequate to meet the
Company's working capital and capital expenditure needs for at least the next 12
months.
POTENTIAL FLUCTUATIONS IN FINANCIAL RESULTS
Most of the Company's customers order products for immediate delivery and,
therefore, a substantial amount of the Company's net sales in each quarter
result from orders booked that quarter. Accordingly, the Company's quarterly net
sales and operating results may vary significantly as a result of, among other
things, the volume and timing of orders received during a quarter, variations in
sales mix, increased competition, announcements or introductions of new products
by the Company or its competitors, changes in costs of components, delays in
production schedules and changes in economic or other conditions affecting
customers or end users of the Company's products. Accordingly, the Company's
historical financial performance is not necessarily a meaningful indicator of
future results and, in general, management expects that the Company's financial
results may vary from period to period, which may result in significant
fluctuations in the stock price of the Company.
- 9 -
<PAGE>
PART II - OTHER INFORMATION
ITEM 5. FACTORS THAT MAY AFFECT FUTURE RESULTS
In connection with the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, the Company is providing the following cautionary
statements identifying important factors that could cause the Company's actual
results to differ materially from those projected in any forward-looking
statements made by, or on behalf of, the Company.
The Company wishes to caution readers that the following important factors,
among others, in some cases have affected, and in the future could affect, the
Company's actual results and could cause the Company's actual consolidated
results throughout 1997 and beyond to differ materially from those expressed in
any forward-looking statements made by, or on behalf of, the Company.
GENERAL BUSINESS AND ECONOMIC CONDITIONS
General business and economic conditions have an impact on the Company's
financial results. The Company's customer base, which is largely distributors,
may be impacted by weak economic conditions and, as a result, may reduce
required inventory levels of products purchased from the Company. Although the
Company does not consider its business to be highly seasonal, the historical
quarterly trends reflected over the last two years may, in fact, be adversely
affected by general economic conditions both domestically and abroad and may or
may not continue.
COMPETITION
The markets for the Company's products are intensely competitive. The Company's
products compete both with other technologies as well as similar products
manufactured by other companies, some of which have more extensive research and
development, manufacturing, marketing and product support capabilities as well
as greater financial and technological resources. The Company believes that its
ability to compete depends on a number of factors, including product quality and
reliability, performance, price, product delivery, service and support and name
recognition. There can be no assurance that the Company will be able to continue
to compete successfully with respect to these factors.
PRODUCT SHORTAGES
The competitiveness of the industry requires that the Company fulfill many of
its orders within a very short time period (typically within one week after
receipt of order). Should the Company be unable to fulfill orders on a timely
basis due to inaccurate forecasting by the Company or shortages at its
suppliers, orders could be canceled and placed with a competitor.
Additionally, certain important components used in the Company's products
presently are available from one or a limited number of sources. Also, most of
the Company's product lines currently are manufactured for the Company by one
contractor for each product line. The inability to obtain sufficient quantities
of sole or limited source components as required, or to develop alternative
sources of supply for components or alternative sources to manufacture its
finished products, could result in delays or reductions in product shipments
which could have a material adverse effect on the Company's business.
EXPOSURE TO NATURAL DISASTERS
The Company's headquarters facility, as well as certain of its turn-key
manufacturers are located in areas prone to natural disasters, specifically
hurricanes. In August 1992, Hurricane Andrew caused extensive damage to the
Company's former headquarters facility and the majority of the Company's assets.
While the Company recovered quickly from this disaster, the Company believes
that its operating results and financial condition could be adversely affected
should another natural disaster strike its current facility, any of its turn-key
manufacturers, or any of its major customers.
- 10 -
<PAGE>
TECHNOLOGICAL CHANGES
The market for the Company's products is characterized by continued and rapid
technological advances in both hardware and software development requiring
ongoing expenditures for research and development and the timely introduction of
new products. To remain competitive, the Company must respond effectively to
technological changes by continuing to enhance and improve its existing products
and by successfully developing and introducing new products. There can be no
assurance that the Company will be able to respond effectively to technological
changes or new product announcements or introductions by others.
PROPRIETARY RIGHTS
The Company relies primarily upon the technical expertise and creative skills of
its personnel, rather than patents and copyrights, to develop and maintain its
competitive position. However, there can be no assurance that competitors will
not develop products or technology that are equivalent or superior to those of
the Company or that the safeguards on which the Company relies will be adequate
to protect its interests. In addition, it is common in the computer industry for
companies to seek to assert claims for infringement of their patents or
proprietary rights. Although no such claims are pending against the Company,
there can be no assurance that these claims will not be made or that, if made,
any license that might be needed by the Company will be available on
commercially reasonable terms.
DISTRIBUTION AND OEM RISKS
The Company is dependent upon the continued viability and financial stability of
its distributor and OEM customers. The loss or ineffectiveness of certain of the
Company's distributor and/or OEM customers could have a material adverse effect
on the Company's operating results.
International distributor sales are denominated and transacted in U.S. dollars
and are subject to risks common to export activities, including governmental
regulation, trade barriers and fluctuating currency exchange rates (which
affects the competitiveness of U.S. products sold abroad). In addition, the
Company's international sales must be licensed by the Office of Export
Administration of the U.S. Department of Commerce. To date, the Company has not
experienced any difficulty in conducting export sales, including obtaining
necessary export licenses. There can be no assurance, however, that these or
other factors affecting international sales will not adversely affect the
Company's future operating results.
PRODUCT RETURNS, PRICE PROTECTION AND WARRANTIES
As is typical in the computer industry, the Company's distributors may be
entitled to return inventory to the Company for stock rotation purposes and
receive credit against other purchases on terms relating to price and volume
negotiated with Company. In addition, if the Company reduces its prices, the
Company credits its distributors for the difference between the purchase price
of products remaining in their inventory and the Company's reduced price for
such products. The Company's 3-5 year limited warranty permits customers to
return any product for repair or replacement if the product does not perform as
warranted. There can be no assurance that product returns, price protection and
warranty claims will not have a material adverse effect on the Company's future
operating results. The Company seeks to continually introduce new and enhanced
products which could result in higher product returns and warranty claims due to
the risks inherent in the introduction of such products.
DEPENDENCE ON KEY PERSONNEL
William A. Dambrackas, the Company's Chairman and Chief Executive Officer,
Robert F. Gintz, the Company's Vice President, Development, Mark Kacer, the
Company's Vice President, Finance and Administration, Thomas E. Garrett, the
Company's Vice President of Sales and Robert S. Sowell, the Company's Vice
President, Technical Operations, have been primarily responsible for the
development and expansion of the Company's business, and the loss of the
services of one or more of these individuals could adversely affect the Company.
In addition, the Company believes that its future success will be dependent in
part on its continued ability to recruit, motivate and retain qualified
personnel. There can be no assurance that the Company will be successful in this
regard.
- 11 -
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 11.0 - Computation of Net Income Per Share
(b) During the three months ended March 31, 1997, the Company did not
file any reports on Form 8-K.
- 12 -
<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.
EQUINOX SYSTEMS INC.
/s/ MARK KACER
--------------------------------------------
MARK KACER, Chief Financial Officer
(Principal Financial Officer)
DATE: April 21, 1997
13
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
11.0 Computation of Net Income Per Share
27 Financial Data Schedule
Exhibit 11.0
EQUINOX SYSTEMS INC.
COMPUTATION OF INCOME PER SHARE
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended March 31,
-----------------------------------------------
1997 1996
-------------------- --------------------
<S> <C> <C>
Net income as reported................................................. $ 735 $ 674
==================== ====================
Weighted average common and common equivalent shares
outstanding:
Common stock........................................................... 3,690 3,836
Common stock equivalents - options..................................... 209 178
-------------------- --------------------
Weighted average common and common equivalent shares
outstanding............................................................ 3,899 4,014
==================== ====================
Net income per share................................................... $ 0.19 $ 0.17
==================== ====================
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 11,714
<SECURITIES> 3,350
<RECEIVABLES> 4,003
<ALLOWANCES> 840
<INVENTORY> 4,490
<CURRENT-ASSETS> 24,520
<PP&E> 5,266
<DEPRECIATION> 1,985
<TOTAL-ASSETS> 27,801
<CURRENT-LIABILITIES> 4,747
<BONDS> 0
0
0
<COMMON> 37
<OTHER-SE> 22,989
<TOTAL-LIABILITY-AND-EQUITY> 27,801
<SALES> 6,364
<TOTAL-REVENUES> 6,364
<CGS> 3,241
<TOTAL-COSTS> 3,241
<OTHER-EXPENSES> 2,102
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,149
<INCOME-TAX> 414
<INCOME-CONTINUING> 735
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 735
<EPS-PRIMARY> 0.19
<EPS-DILUTED> 0.19
</TABLE>
