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 May 31, 1997
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: 0-18268
------------------------------
INTEGRATED SYSTEMS, INC.
(Exact name of Registrant as specified in its charter)
California 94-2658153
(State or other jurisdiction (I.R.S. employer
of incorporation or organization) identification no.)
------------------------------
201 Moffett Park Drive
Sunnyvale, CA 94089
(408) 542-1500
(Address, including zip code, of Registrant's
principal executive offices and telephone
number, including area code)
------------------------------
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 _____
The number of shares outstanding of the Registrant's Common Stock on June 30,
1997 was 23,153,216 shares.
The Exhibit Index is located on page 12. Page 1 of 14 pages.
<PAGE>
<TABLE>
INTEGRATED SYSTEMS, INC.
INDEX
<CAPTION>
Page
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<S> <C> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements 3
Condensed Consolidated Balance Sheets as of May 31, 1997 and February 28, 1997 4
Condensed Consolidated Statements of Income for the Three Months Ended
May 31, 1997 and 1996 5
Condensed Consolidated Statements of Cash Flows for the Three Months
Ended May 31, 1997 and 1996 6
Notes to Condensed Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations 8
Item 3. Quantitative and Qualitative Disclosures About Market Risks 11
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 13
</TABLE>
================================================================================
This Form 10-Q contains forward-looking statements (as defined in the
Private Securities Litigation Reform Act of 1995), including but not
limited to statements regarding the Company's expectations, hopes or
intentions regarding the future. Actual results and trends could differ
materially from those discussed in the forward-looking statements. In
addition, past trends should not be perceived as indicators of future
performance. Among the factors that could cause actual results to
differ from the forward-looking statements are those detailed elsewhere
in this Report in Management's Discussion and Analysis of Financial
Condition and Results of Operations and in the Company's Securities and
Exchange Commission reports.
================================================================================
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<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
The condensed consolidated interim financial statements included herein have
been prepared by Integrated Systems, Inc. (the "Company"), without audit,
pursuant to the rules and regulations of the Securities and Exchange Commission.
Although 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 such rules and
regulations, the Company believes that the disclosures made are adequate to make
the information presented not misleading. It is suggested that the condensed
consolidated interim financial statements be read in conjunction with the
consolidated financial statements and the notes thereto included in the
Company's Annual Report on Form 10-K for the year ended February 28, 1997. The
February 28, 1997 condensed consolidated balance sheet data was derived from the
audited financial statements, but does not include all disclosures required by
generally accepted accounting principles.
The accompanying condensed consolidated interim financial statements have been
prepared in all material respects in conformity with the standards of accounting
measurements set forth in Accounting Principles Board Opinion No. 28 and, in the
opinion of management, reflect all adjustments, consisting only of normal
recurring adjustments, necessary to summarize fairly the financial position,
results of operations, and cash flows for the periods indicated. The results of
operations for the interim periods presented are not necessarily indicative of
the results to be expected for the full year.
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<PAGE>
INTEGRATED SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
May 31, February 28,
1997 1997
--------- ---------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 20,506 $ 25,585
Marketable securities 5,292 4,483
Accounts receivable, net 26,114 28,266
Deferred income taxes 1,750 1,676
Prepaid expenses and other 6,172 4,136
--------- ---------
Total current assets 59,834 64,146
Marketable securities 36,539 24,627
Property and equipment, net 18,325 17,956
Intangible assets, net 2,767 3,136
Deferred income taxes 1,293 1,293
Other assets 1,136 1,344
--------- ---------
Total assets $ 119,894 $ 112,502
========= =========
LIABILITIES
Current liabilities:
Accounts payable $ 4,511 $ 4,143
Accrued payroll and related expenses 2,969 3,407
Other accrued liabilities 5,905 4,514
Income taxes payable 1,018 1,442
Deferred revenue 17,949 12,621
--------- ---------
Total current liabilities 32,352 26,127
Other liabilities 81 203
--------- ---------
Total liabilities 32,433 26,330
--------- ---------
SHAREHOLDERS' EQUITY
Common Stock, no par value, 50,000 shares authorized:
23,153 and 23,039 shares issued and
outstanding at May 31, 1997 and
February 28, 1997, respectively 62,030 61,158
Unrealized holding gain on marketable securities, net 87 148
Translation adjustment (873) (1,130)
Retained earnings 26,217 25,996
--------- ---------
Total shareholders' equity 87,461 86,172
--------- ---------
Total liabilities and shareholders' equity $ 119,894 $ 112,502
========= =========
The accompanying notes are an integral part of these condensed consolidated
financial statements.
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<PAGE>
INTEGRATED SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(unaudited)
Three Months Ended
May 31,
-----------------------
1997 1996
-------- --------
Revenue:
Product $ 15,012 $ 13,718
Services 9,576 9,433
-------- --------
Total revenue 24,588 23,151
-------- --------
Costs and expenses:
Cost of product revenue 2,873 2,011
Cost of services revenue 4,856 4,174
Marketing and sales 10,060 8,821
Research and development 4,802 3,712
General and administrative 2,446 2,114
-------- --------
Total costs and expenses 25,037 20,832
-------- --------
Income (loss) from operations (449) 2,319
Interest and other income 795 1,394
-------- --------
Income before income taxes 346 3,713
Provision for income taxes 125 1,262
-------- --------
Net income $ 221 $ 2,451
======== ========
Earnings per share $ 0.01 $ 0.11
======== ========
Shares used in per share calculations 23,852 22,709
======== ========
The accompanying notes are an integral part of these condensed consolidated
financial statements.
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<PAGE>
<TABLE>
INTEGRATED SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
<CAPTION>
Three Months Ended
May 31,
----------------------------
1997 1996
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 221 $ 2,451
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 1,469 962
Deferred income taxes (35) (9)
Net income from unconsolidated subsidiary -- (483)
Changes in assets and liabilities:
Accounts receivable 2,376 (72)
Prepaid expenses and other (2,036) (344)
Accounts payable, accrued payroll and
other accrued liabilities 1,321 (1,580)
Income taxes payable (424) (4,440)
Deferred revenue 5,328 1,893
Other assets and liabilities 86 (97)
-------- --------
Net cash provided by (used in) operating activities 8,306 (1,719)
-------- --------
Cash flows from investing activities:
Purchases of marketable securities, net (12,821) (7,510)
Additions to property and equipment, net (1,369) (13,095)
Capitalized software development costs (100) (285)
Other -- (152)
-------- --------
Net cash used in investing activities (14,290) (21,042)
-------- --------
Cash flows from financing activities:
Repurchase of common stock (187) --
Proceeds from issuance of common stock -- 12,955
Proceeds from exercise of common stock options and
purchases under the Employee Stock Purchase Plan 1,059 1,700
Tax benefit from disqualifying dispositions of common stock -- 3,379
-------- --------
Net cash provided by financing activities 872 18,034
-------- --------
Effect of exchange rate fluctuations on cash and cash equivalents 33 (52)
Net decrease in cash and cash equivalents (5,079) (4,779)
Cash and cash equivalents at beginning of period 25,585 21,822
-------- --------
Cash and cash equivalents at end of period $ 20,506 $ 17,043
======== ========
Supplemental disclosure of cash flow information:
Cash paid during the period for income taxes, net $ 458 $ 1,889
Supplemental schedule of noncash investing activities:
Unrealized loss on marketable securities $ (100) $ (430)
<FN>
The accompanying notes are an integral part of these condensed consolidated financial statements.
</FN>
</TABLE>
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<PAGE>
INTEGRATED SYSTEMS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Information for the three months ended May 31, 1997 and 1996 is unaudited)
1. Summary of Significant Accounting Policies
The condensed consolidated financial statements include the accounts of
Integrated Systems, Inc. and its wholly owned subsidiaries, after elimination of
all significant intercompany accounts and transactions, and should be read in
conjunction with the Company's Annual Report on Form 10-K for the year ended
February 28, 1997. These condensed consolidated financial statements do not
include all disclosures normally required by generally accepted accounting
principles.
2. Earnings Per Share
Earnings per share is computed using the weighted average number of common and
common equivalent shares outstanding during the period. Common equivalent shares
result from the assumed exercise of outstanding stock options that have a
dilutive effect when applying the treasury stock method.
The following table sets forth the calculation of earnings per share for
purposes of this report:
Three Months Ended
May 31,
-------------------
(in thousands, except per share data) 1997 1996
------- -------
(unaudited)
Primary:
Net income $ 221 $ 2,451
======= =======
Number of shares:
Weighted average number of common
shares outstanding 23,121 21,506
Dilutive effect of stock options, net 731 1,203
------- -------
23,852 22,709
======= =======
Earnings per share $ 0.01 $ 0.11
======= =======
Fully diluted:
Net income $ 221 $ 2,451
======= =======
Number of shares:
Weighted average number of common
shares outstanding 23,121 21,506
Dilutive effect of stock options, net 731 1,301
------- -------
23,852 22,807
======= =======
Earnings per share $ 0.01 $ 0.11
======= =======
3. Common Stock Repurchase and Repricing of Stock Options
In April 1997, the Company offered employees the right to cancel certain
outstanding stock options at original exercise prices and receive new options
with a new exercise price. The new exercise prices range from $8.75 to $10.50
per share, based on the closing price of the common stock on the date individual
employees agreed to cancel their original outstanding stock options. Options to
purchase a total of 1,222,132 shares at original exercise prices ranging from
$14.625 to $35.625 per share were canceled and new options were issued in April
1997. Vesting under the new options commenced on the date the individual
employees agreed to cancel their original options, and occurs over a four year
period at the rate of 25% one year after the date of grant and then 1/48th of
the shares granted at the end of every one-month period thereafter.
In April 1997, the Company announced that the Board of Directors had authorized
the Company to repurchase up to 1,000,000 shares of common stock for cash from
time-to-time at market prices. In April 1997, the Company repurchased 20,000
shares of common stock in open market transactions for $187,500 under this stock
repurchase program.
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<PAGE>
4. Contingencies
In January 1997, a former employee filed a complaint against the Company and
certain of its officers, alleging claims for, among other things, breach of
contract, fraud, negligent misrepresentation and labor code violations. The
complaint seeks general and specific damages of no less than $1.5 million plus
exemplary damages, attorney's fees and costs of suit. The Company has filed
answers to the complaint denying all of the allegations and asserting various
affirmative defenses. The Company believes it has meritorious defenses to the
claims and intends to defend the suit vigorously.
In fiscal 1997, a distributor for the Company's sales and service subsidiary in
Paris, France filed a complaint against the subsidiary alleging breach of
contract. The complaint seeks damages of approximately $850,000. An answer to
the complaint has been filed denying the allegations. The Company believes it
has meritorious defenses to the claim and intends to defend the suit vigorously.
The Company is involved in a contract dispute with a customer. Management
believes it has meritorious defenses in relation to this dispute.
No accrual for the above matters has been made in the accompanying condensed
consolidated interim financial statements as the ultimate outcomes of the
litigation and dispute presently are not determinable. The litigation and
dispute are subject to inherent uncertainties and thus, there can be no
assurance that the litigation or dispute will be resolved favorably to the
Company or that they will not have a material adverse effect on the Company's
financial position or results of operations.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following information should be read in conjunction with the condensed
consolidated interim financial statements and the notes thereto included in Item
1 of this Quarterly Report and with Management's Discussion and Analysis of
Financial Condition and Results of Operations contained in the Company's Annual
Report on Form 10-K for the year ended February 28, 1997, as filed with the
Securities and Exchange Commission on May 29, 1997.
Overview
Integrated Systems, Inc. ("the Company") designs, develops, markets and supports
software products and provides related engineering services principally for
embedded microprocessor-based applications. The Company currently derives
substantially all of its revenues from licensing these products and providing
related maintenance and engineering and consulting services. In July 1996, the
Company acquired Epilogue Technology Corporation ("Epilogue"), a New Mexico
corporation in the business of developing network management and embedded
Internet software for telecommunications and date communications equipment
manufacturers, embedded software suppliers and networking related integrated
circuit manufacturers. The combination was accounted for as a pooling of
interests. The results of operations for Epilogue have been included only since
the date of acquisition, as previous results were not significant. In November
1996, the Company revised the terms of the acquisition of Diab Data, Inc. ("Diab
Data") which was acquired in fiscal year 1996 in a transaction accounted for
under the equity method of accounting. Revising the terms of the original
acquisition agreement requires the Company to consolidate the results of Diab
Data from the fourth quarter of fiscal year 1997 forward.
Forward-Looking Information is Subject to Risk and Uncertainty; Additional Risks
and Uncertainties
Except for the historical information contained in this Quarterly Report, the
matters herein contain "forward-looking" statements and information (as defined
in the Private Securities Litigation Reform Act of 1995) that involve risk and
uncertainty. These forward-looking statements include, but are not limited to,
the Company's liquidity and capital needs and various business environment and
trend information. Actual future results and trends may differ materially
depending on a variety of factors, including the volume and timing of orders
received during the quarter, the mix of and changes in distribution channels
through which the Company's products are sold, the timing and acceptance of new
products and product enhancements by the Company or its competitors, changes in
pricing, buyouts of run-time licenses, product life cycles, the level of the
Company's sales of third party products, purchasing patterns of distributors and
customers, competitive conditions in the industry, business cycles affecting the
markets in which the Company's products are sold, extraordinary events, such as
litigation or acquisitions, including related charges, and economic conditions
generally or in various geographic areas. All of the foregoing factors are
difficult to forecast. The future operating results of the
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<PAGE>
Company may fluctuate as a result of these and the other risk factors detailed
in the Company's Annual Report on Form 10-K for the year ended February 28,
1997, and other documents filed by the Company with the Securities and Exchange
Commission.
Due to all of the foregoing factors, the Company believes that period-to-period
comparisons of its results of operations are not necessarily meaningful and
should not be relied upon as an indication of future performance. During the
previous fiscal year, the Company's actual performance did not meet market
expectations. It is likely that, in some future quarters, the Company's
operating results will be below the expectations of stock market analysts and
investors. Consequently, the purchase or holding of the Company's Common Stock
involves an extremely high degree of risk.
Results of Operations
<TABLE>
The following table sets forth for the periods presented the percentage of total
revenue represented by each line item in the Company's condensed consolidated
statements of income and the percentage change in each line item from the prior
year period:
<CAPTION>
Percentage of Period-to-Period
Total Revenue Percentage Change
------------- -----------------
Three Months Ended Three Months Ended
May 31, May 31,
1997 1996 1997 compared to 1996
---- ---- ---------------------
<S> <C> <C> <C>
Revenue:
Product 61% 59% 9%
Services 39 41 2
---- ----
Total revenue 100 100 6
---- ----
Costs and expenses:
Cost of product revenue 12 9 43
Cost of services revenue 20 18 16
Marketing and sales 41 38 14
Research and development 19 16 29
General and administrative 10 9 16
---- ----
Total costs and expenses 102 90 20
---- ----
Income (loss) from
operations (2) 10
Interest and other income 3 6 (43)
---- ----
Income before income
taxes 1 16 (91)
Provision for income taxes -- 5 (90)
---- ----
Net income 1% 11% (91)%
==== ====
</TABLE>
Revenue
The Company's total revenue increased 6% from $23.2 million in the first quarter
of fiscal year 1997 to $24.6 million in the first quarter of fiscal year 1998.
Product revenue increased 9% from $13.7 million in the first quarter of fiscal
year 1997 to $15.0 million in the first quarter of fiscal year 1998. The
increase in product revenue was primarily due to the inclusion of Diab Data and
Epilogue product revenue in fiscal year 1998, plus increased unit shipments of
SNiFF+. Services revenue increased 2% from $9.4 million in the first quarter of
fiscal year 1997 to $9.6 million in the first quarter of fiscal year 1998, as a
result of increases in maintenance revenue from the growing installed base of
customers, offset in part by a decrease in certain consulting activities.
The percentage of the Company's total revenue from customers located
internationally was 33% in the first quarters of fiscal years 1998 and 1997.
-9-
<PAGE>
Costs and Expenses
The Company's cost of product revenue as a percentage of product revenue
increased from 15% in the first quarter of fiscal year 1997 to 19% in the first
quarter of fiscal year 1998. This increase is due to an increase in the
proportion of product revenues subject to third party royalty costs. The
Company's cost of services revenue as a percentage of services revenue increased
from 44% in the first quarter of fiscal year 1997 to 51% in the first quarter of
fiscal year 1998. This percentage increase is due to lower margins achieved on
certain consulting activities.
Marketing and sales expenses were $10.1 million and $8.8 million in the first
quarters of fiscal years 1998 and 1997, respectively, representing 41% and 38%,
of total revenue, respectively. These increases were primarily due to additional
expenses associated with the Company's continued investment in the domestic and
international sales forces and support infrastructure.
Research and development expenses were $4.8 million and $3.7 million in the
first quarters of fiscal years 1998 and 1997, respectively, representing 19% and
16%, respectively, of total revenue. These increases were primarily the result
of increased personnel and consulting expenses associated with the development
of several new products, and enhancing existing products. Costs that are
required to be capitalized under Statement of Financial Accounting Standards No.
86, "Accounting for the Costs of Computer Software to be Sold, Leased or
Otherwise Marketed" ("SFAS No. 86") were $100,000 in the first quarter of fiscal
year 1998 compared to $285,000 in the first quarter of fiscal year 1997. The
amounts capitalized represent approximately 2% of total research and development
expenditures for the first quarter of fiscal year 1998 compared to 7% in the
first quarter of the previous fiscal year. The amount of research and
development expenditures capitalized in a given time period depends upon the
nature of the development performed and, accordingly, amounts capitalized may
vary from period to period. Capitalized costs are being amortized using the
greater of the amount computed using the ratio that current gross revenues for a
product bear to the total of current and anticipated future gross revenues for
that product, or on a straight line basis over three years. Amortization for the
first quarter of fiscal year 1998 was $281,000 compared to $229,000 for the
first quarter of fiscal year 1997.
General and administrative expenses were $2.4 million and $2.1 million in the
first quarters of fiscal years 1998 and 1997, respectively, representing 10% and
9% of total revenue, respectively. The dollar increases were primarily the
result of increased headcount, related in part to the acquisition of Epilogue
and the consolidation of Diab Data.
Interest and other income was $0.8 million in the first quarter of fiscal 1998
compared to $1.4 million in the first quarter of fiscal year 1997. The decrease
is primarily due to the inclusion in fiscal year 1997 of net operating income of
$730,000 from Diab Data which was required to be accounted for under the equity
method of accounting until the fourth quarter of fiscal year 1997.
Recent Accounting Pronouncements
In February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128 ("SFAS No. 128"), "Earnings per Share,"
which specifies the computation, presentation and disclosure requirements for
earnings per share. SFAS No. 128 supersedes Accounting Principles Board Opinion
No. 15, is effective for financial statements issued for periods ending after
December 15, 1997, and requires that prior periods be restated. The impact of
the adoption of SFAS No. 128 on the financial statements of the Company has not
yet been determined.
-10-
<PAGE>
Liquidity and Capital Resources
The Company funds its operations principally through cash flows from operations.
As of May 31, 1997, the Company had $62.3 million of cash, cash equivalents and
marketable securities. This represents an increase of $7.6 million from February
28, 1997. In April 1997, the Company announced that the Board of Directors had
authorized a new common stock repurchase program allowing the Company to
repurchase up to 1,000,000 shares of common stock for cash, from time-to-time at
market prices. No time limit was set for the completion of the program. In April
1997, the Company repurchased 20,000 shares of common stock for $187,500.
Net cash provided by operating activities during the first quarter of fiscal
year 1998 totaled $8.3 million, an increase of $10.0 million over the amount
generated in the first quarter of fiscal year 1997. Net cash provided by
operating activities increased, in spite of a decrease in net income, due mainly
to changes in accounts receivable, accounts payable, accrued payroll and other
accrued liabilities, income taxes payable, and deferred revenue.
Net cash used in investing activities totaled $14.3 million in the first quarter
of fiscal year 1998 compared to $21.0 million in fiscal year 1997. The decrease
in net cash used in investing activities was due primarily to the purchase of a
building in fiscal year 1997, offset in part, by an increase in net purchases of
marketable securities.
Net cash provided by financing activities totaled $0.9 million in the first
quarter of fiscal year 1998 compared to $18.0 million in the first quarter of
fiscal year 1997. The decrease in net cash provided by financing activities in
the first quarter of fiscal 1998 was due to the issuance of common stock in May
1996. In addition the proceeds from the exercise of options to purchase common
stock and purchases under the Employee Stock Purchase Plan were lower in the
first quarter of fiscal year 1998. The first quarter of fiscal year 1997 also
benefited from a large tax benefit from disqualifying dispositions of common
stock.
The Company believes that cash flows from operations, together with existing
cash balances, will be adequate to meet the Company's cash requirements for
working capital, stock repurchase and capital expenditures for the next 12
months and the foreseeable future.
Item 3. Quantitative and Qualitative Disclosures About Market Risks
Not applicable.
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<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
The following exhibit is filed herewith:
Exhibit Page
Number Title Number
------ ----- ------
27.00 Financial Data Schedule 14
(b) Reports on Form 8-K. No reports on Form 8-K were filed by Registrant
during the three months ended May 31, 1997.
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<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.
Dated: July 11, 1997 INTEGRATED SYSTEMS, INC.
(Registrant)
-----------------------------
DAVID P. ST. CHARLES
President and Chief Executive Officer
----------------------------
WILLIAM C. SMITH
Vice President, Finance and
Chief Financial Officer
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM Q1 FY98
FORM 10-Q FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> FEB-28-1998
<PERIOD-START> MAR-01-1997
<PERIOD-END> MAY-31-1997
<CASH> 20,506
<SECURITIES> 5,292
<RECEIVABLES> 26,114
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 59,834
<PP&E> 18,325
<DEPRECIATION> 0
<TOTAL-ASSETS> 119,894
<CURRENT-LIABILITIES> 32,352
<BONDS> 0
0
0
<COMMON> 62,030
<OTHER-SE> 25,431
<TOTAL-LIABILITY-AND-EQUITY> 119,894
<SALES> 15,012
<TOTAL-REVENUES> 24,588
<CGS> 2,873
<TOTAL-COSTS> 7,729
<OTHER-EXPENSES> 17,308
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 346
<INCOME-TAX> 125
<INCOME-CONTINUING> 221
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 221
<EPS-PRIMARY> 0.01
<EPS-DILUTED> 0.01
</TABLE>