<PAGE> 1
UNITED STATES
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 QUARTERLY PERIOD ENDED September 30, 1999
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: 0-15383
CEM CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
North Carolina 56-1019741
------------------------ ------------------------------------
(State of Incorporation) (I.R.S. Employer Identification No.)
3100 Smith Farm Road, Matthews, NC 28105
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Post Office Box 200, Matthews, North Carolina 28106
---------------------------------------------------
(Mailing address of principal executive offices)
(704) 821-7015
----------------------------------------------------
(Registrant's 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 [ ]
3,043,443 shares of the issuer's $.05 par value common stock, its only class of
common stock, were outstanding as of November 5, 1999.
<PAGE> 2
PART I. FINANCIAL INFORMATION
ITEM 1. Financial statements
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Quarter Ended September 30, 1999
CEM Corporation Matthews, North Carolina
The condensed consolidated financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. 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, although the Company believes that the
disclosures are adequate to make the information presented not misleading. It is
suggested that these condensed consolidated 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 fiscal year ended June 30, 1999.
<PAGE> 3
CEM CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1999 AND JUNE 30, 1999
(in thousands)
<TABLE>
<CAPTION>
(unaudited)
September 30 June 30
------------------------- -------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................................ $ 3,970 $ 2,865
Short-term investments................................................... 6,196 6,262
Trade receivables, net of allowances..................................... 5,730 6,634
Inventories, net......................................................... 5,494 5,335
Deferred taxes and other................................................. 749 964
------------------------- -------------------------
Total current assets.................................................. 22,139 22,060
LONG-TERM INVESTMENTS....................................................... 514 476
PROPERTY, PLANT AND EQUIPMENT, NET.......................................... 4,927 4,984
OTHER ASSETS................................................................ 1,009 1,036
------------------------- -------------------------
TOTAL ASSETS................................................................ $ 28,589 $ 28,556
========================= =========================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses.................................... $ 3,292 $ 3,940
Deferred income.......................................................... 1,447 1,402
Income taxes payable..................................................... 892 819
------------------------- -------------------------
Total current liabilities............................................. 5,631 6,161
LONG-TERM DEBT, NET OF CURRENT MATURITIES................................... 166 173
OTHER NON-CURRENT LIABILITIES............................................... 127 127
SHAREHOLDERS' EQUITY:
Common stock............................................................. 152 152
Retained earnings........................................................ 22,777 22,422
Translation adjustments.................................................. (264) (479)
------------------------- -------------------------
Total Shareholders' Equity............................................. 22,665 22,095
------------------------- -------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY.................................. $ 28,589 $ 28,556
========================= =========================
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE> 4
CEM CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(UNAUDITED)
(in thousands, except per share data)
<TABLE>
<CAPTION>
1999 1998
----------------------- ------------------------
<S> <C> <C>
Net sales................................................................... $ 7,390 $ 7,152
Cost of goods sold.......................................................... 3,525 3,509
------------------------- ----------------------
Gross profit............................................................ 3,865 3,643
Selling, general and administrative expenses................................ 2,646 2,593
Research and development expenses........................................... 741 730
------------------------- ----------------------
Income from operations.................................................. 478 320
Investment income........................................................... 97 105
Other expenses, net......................................................... (29) (10)
------------------------- ----------------------
Income before income taxes.............................................. 546 415
Provision for income taxes.................................................. 172 132
------------------------- ----------------------
Net income.............................................................. 374 283
Foreign currency translation................................................ 215 290
------------------------- ----------------------
Comprehensive income.................................................... $ 589 $ 573
========================= ======================
Net income per share:
Basic................................................................... $ .12 $ .09
========================= ======================
Diluted................................................................. $ .12 $ .09
========================= ======================
Average shares outstanding:
Basic.................................................................. 3,044 3,163
========================= ======================
Diluted................................................................ 3,044 3,208
========================= ======================
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE> 5
CEM CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(UNAUDITED)
(in thousands)
<TABLE>
<CAPTION>
1999 1998
------------------------- -------------------------
<S> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES................................... $ 1,306 $ 61
------------------------- -------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Sale of available-for-sale investments.................................. 100 -
Investment in affiliate................................................. (38) -
Acquisition of intangibles.............................................. (19) (19)
Capital expenditures, net............................................... (211) (313)
------------------------- -------------------------
Net cash used in investing activities........................... (168) (332)
------------------------- -------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt............................................. (25) (96)
Proceeds from issuance of common stock.................................. - 21
Repurchase of common stock.............................................. (19) (948)
------------------------- -------------------------
Net cash used in financing activities............................ (44) (1,023)
------------------------- -------------------------
EFFECTS OF EXCHANGE RATES ON CASH.......................................... 11 3
------------------------- -------------------------
Net (decrease)/increase in cash and cash equivalents........................ 1,105 (1,291)
Cash and cash equivalents at beginning of period............................ 2,865 2,963
------------------------- -------------------------
Cash and cash equivalents at end of period.................................. $ 3,970 $ 1,672
========================= =========================
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE> 6
CEM CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The financial information included herein is unaudited; however, such
information reflects all adjustments (consisting of normal recurring
adjustments) which are, in the opinion of management, necessary for a fair
presentation of results for the interim periods. The results of operations for
the period ended September 30, 1999 are not necessarily indicative of the
results that may be expected for the year ended June 30, 2000.
The Company engages in one line of business defined as the development,
manufacture, sale and service of microwave-based instrumentation for testing,
analysis and process control in analytical laboratory and industrial markets.
The Company considers this to be one industry segment for financial reporting
purposes.
2. INVENTORIES
The components of inventories at current cost at September 30, 1999 and June 30,
1999 are as follows:
(in thousands)
<TABLE>
<CAPTION>
September 30 June 30
------------------------- -------------------------
<S> <C> <C>
Parts and raw materials............................................. $ 2,995 $ 3,233
Work-in-process and finished goods.................................. 2,499 2,102
------------------------- -------------------------
$ 5,494 $ 5,335
========================= =========================
</TABLE>
3. NET INCOME PER COMMON SHARE
Basic Earnings Per Share Computation:
The computation of basic earnings per share is computed by dividing income
available to common shareholders by the weighted average number of common shares
outstanding during the period. Shares issued during the period and shares
repurchased by the Company during the period are weighted for the portion of the
period that they were outstanding. Income and share information for the three
months ended September 30, 1999 follows:
(in thousands, except per share data)
<TABLE>
<S> <C>
Net income....................................................... $ 374
===================
</TABLE>
<TABLE>
<CAPTION>
Dates Fraction
Outstanding Shares of Period Shares
----------- ------ --------- ------
<S> <C> <C> <C>
July 1, 1999..................................................... 3,046
Shares repurchased during the period............................. (3) 62/92 (2)
-------------------
Weighted average shares.......................................... 3,044
===================
Basic earnings per share......................................... $ .12
===================
</TABLE>
<PAGE> 7
3. NET INCOME PER COMMON SHARE (CONTINUED)
Income and share information for the three months ended September 30, 1998
follows:
(in thousands, except per share data)
<TABLE>
<S> <C>
Net income....................................................... $ 283
===================
</TABLE>
<TABLE>
<CAPTION>
Dates Fraction
Outstanding Shares of Period Shares
----------- ------ --------- ------
<S> <C> <C> <C>
July 1, 1998..................................................... 3,180
Shares repurchased during the period............................. (91) 17/92 (17)
Stock options exercised during the period........................ 3 - -
===================
Weighted average shares.......................................... 3,163
===================
Basic earnings per share......................................... $ .09
===================
</TABLE>
Diluted Earnings Per Share Computation:
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 to include the number of additional common shares that would have been
outstanding if the dilutive potential common shares had been issued. Potential
common shares consist of dilutive stock options using the treasury stock method.
(in thousands, except per share data)
<TABLE>
<CAPTION>
For the three months ended For the three months ended
September 30, 1999 September 30, 1998
------------------------------ -----------------------------
<S> <C> <C>
Net income........................................... $ 374 $ 283
============================== =============================
Weighted average shares.............................. 3,044 3,163
Dilutive potential common shares (stock options)..... - 45
------------------------------ -----------------------------
Adjusted weighted average shares..................... 3,044 3,208
============================== =============================
Diluted earnings per share........................... $ .12 $ .09
============================== =============================
</TABLE>
Options to purchase 432,179 and 45,000 shares of common stock at a weighted
average price of $6.90 and $11.41 per share were outstanding during the three
months ended September 30, 1999 and 1998, respectively, which were not included
in the computation of diluted earnings per share because the option exercise
prices were greater than the average market price of the common shares during
the periods.
4. NEW PRONOUNCEMENTS
There have been no new pronouncements issued which have not already been
implemented by the Company which management believes would have a material
impact on the financial statements.
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The following table sets forth, for the three-month periods indicated, the
percentages which certain components of the condensed consolidated statements of
income bear to net sales and the percentage of change of such components from
the same period of the prior year.
<TABLE>
<CAPTION>
Three Months Ended
----------------------------------------------------
9/30/99 9/30/98 % Change
----------------- ----------------- ---------------
<S> <C> <C> <C>
Net sales............................................................ 100.0 % 100.0 % 3.3 %
Cost of goods sold................................................... 47.7 49.1 .5
----------------- -----------------
GROSS PROFIT.................................................. 52.3 50.9 6.1
Selling, general and administrative expenses......................... 35.8 36.2 2.0
Research and development expenses.................................... 10.0 10.2 1.5
----------------- -----------------
INCOME FROM OPERATIONS........................................ 6.5 4.5 49.4
Investment income.................................................... 1.3 1.5 (7.6)
Other expenses, net.................................................. (0.4) (0.2) nm
----------------- -----------------
INCOME BEFORE INCOME TAXES.................................... 7.4 5.8 31.6
Provision for income taxes........................................... 2.3 1.8 30.3
----------------- -----------------
NET INCOME.................................................... 5.1 % 4.0 % 32.2 %
================= =================
</TABLE>
RESULTS OF OPERATIONS - THREE MONTHS ENDED SEPTEMBER 30, 1999
Net sales for the first quarter of fiscal 2000 increased by 3.3% compared with
the first quarter of fiscal 1999 primarily due to increased sales in the United
States (U.S.). The increase in U.S. sales was somewhat offset by continued
weakness in foreign sales. Foreign sales for the period were down 8.7% primarily
driven by softness in orders from Europe and Latin America. Foreign sales as a
percentage of total sales decreased from 43% in the first quarter of fiscal 1999
to 38% in the current year period.
Gross profit margins increased from 50.9% in the first quarter of fiscal 1999 to
52.3% in the first quarter of fiscal 2000 primarily due to product cost
reductions. Management expects these cost reductions will continue to improve
margins throughout fiscal 2000.
Selling, general and administrative expenses increased 2.0% compared to the
prior year period because legal costs in fiscal 1999 were recorded net of the
settlement of litigation the Company initiated to establish the validity of a
patent for microwave digestion vessels. Research and development expense was
consistent with the prior year period. Management expects research and
development expense to remain between 8% and 10% of net sales for the
foreseeable future.
Investment income decreased 7.6% in the first quarter of fiscal 2000 due to
lower rates earned on investments, resulting from a general decline in market
interest rates.
The Company's effective tax rate was 31.5% for the first quarter of fiscal 2000
which approximates the fiscal 1999 tax rate.
<PAGE> 9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION (CONTINUED)
Financial Condition
In the first quarter of the fiscal 2000, the Company generated cash from
operations of approximately $1.3 million, including $374,000 in net income. Cash
generated through accounts receivable collections since June 30, 1999 was
partially offset by a decrease in accrued payroll and benefits and accounts
payable.
During the three months ended September 30, 1999, the Company invested
approximately $19,000 to acquire 2,600 shares of the Company's common stock
under a stock repurchase program. At September 30, 1999, pursuant to prior
authorizations from the Board of Directors, the Company had $1.6 million
available for stock repurchases pursuant to that program. One of the effects of
any share repurchases under this program is a reduction in the dilutive effect
to existing shareholders of the issuance of shares under the Company's
Management Equity Plan and Nonqualified Stock Option Plan for Non-Employee
Directors. The Company has suspended the stock repurchase program pending
completion of matters under consideration by a Special Committee of the Board as
further described in Item 5 of Part II of this report.
Management believes that working capital, planned capital expenditures, existing
debt servicing and stock repurchases can be funded on a current basis with cash
on hand and cash generated from operations.
Year 2000 Issues
The Company continued implementing its plan for addressing the Year 2000 Issue
(also known as Y2K) during the first quarter of fiscal 2000 . The Year 2000
Issue results from computers and other systems that process or use date
sensitive information and may incorrectly respond to dates on or after January
1, 2000. Implementation of plans for addressing information technology (IT)
systems are nearly complete and involve both software and hardware upgrades. To
date, the Company has spent less than $100,000 to address the Year 2000 Issue
and does not believe its future expenditures to address this issue will be more
than $25,000. For non-IT systems, the Company has not identified and does not
expect to identify any areas where Year 2000 problems would have a material
impact on the Company that are not capable of being repaired or replaced at a
fairly low cost.
The Company has initiated formal communications with all of its third party
vendors, suppliers and customers with whom the Company has a significant
relationship to evaluate whether these third parties have significant Year 2000
problems that could have a material adverse effect on the Company; no such
problems have been identified. However, there can be no guarantee that the
systems of other companies on which the Company's systems rely will be timely
converted, or that a failure to convert by another company, or conversion that
is incompatible with the Company's systems, would not have a material effect on
the Company. The Company, in turn, has responded to all inquiries from customers
as to the Year 2000 readiness of the Company. Management believes that CEM
instrument operations will be unaffected by the Year 2000 Issue. CEM instruments
do not use the date for operation; rather, they use the date as a stamp for
printouts only.
The plans to address the Year 2000 Issue for the Company's foreign subsidiaries
are complete. If the Company's plans to address these issues are not successful,
the Company would attempt to identify and purchase replacement systems that do
not have problems associated with the Year 2000 Issue. Management believes that
the cost of such replacement systems would be immaterial to the Company.
The discussion in this section contains Year 2000 readiness disclosures within
the meaning of the Year 2000 Information and Readiness Disclosure Act of 1998.
Euro Currency Issues
Effective January 1, 1999, eleven of the fifteen member countries of the
European Union established fixed conversion rates between their existing
currencies and one common currency (the "euro"). The euro trades on currency
exchanges and is being used in certain business transactions. Beginning in
January, 2002, bills and coins denominated in the euro will be issued and
existing currencies will be withdrawn from circulation. The Company's foreign
subsidiaries do not expect to transact a material portion of their business in
the euro until fiscal 2001. The Company's foreign subsidiaries are not yet
required to prepare reports to local regulatory agencies using the euro. IT
systems used by the Company's foreign
<PAGE> 10
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION (CONTINUED)
subsidiaries should be updated or replaced in a timely manner to facilitate
business transactions and reporting to local government agencies. Costs to
update and/or replace IT systems are not expected to exceed $50,000.
Cautionary Statement
The following cautionary statement identifies important factors that could cause
the Company's actual results to differ materially from those projected in
forward-looking statements made by or on behalf of the Company. Except for the
historical information contained herein, the matters discussed in "Management's
Discussion and Analysis of Results of Operations and Financial Condition" may be
deemed forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements are statements that
include projections, predictions, expectations or beliefs about future events or
results or otherwise are not statements of historical fact. Such statements are
often characterized by the use of qualifying words (and their derivatives) such
as "expect," "believe," "plan," "project," or other statements concerning
opinions or judgment of the Company and its management about future events.
These cautionary statements are made pursuant to Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934, both enacted
pursuant to the Private Securities Litigation Reform Act of 1995.
The industry in which the Company competes, as well as the markets that it
serves, are characterized by cyclical market patterns as a consequence of, among
other things, business cycles, foreign exchange fluctuations, regulatory
changes, government spending levels and general economic conditions. These
factors affect the timing of orders from the Company's customers and cause
substantial variations in sales and profitability from quarter to quarter.
Likewise, supplier-related delays and the timing of the release of the Company's
customer orders may affect quarter-to-quarter sales and profitability. The
Company's sales may also be adversely affected by direct and indirect
competition from third parties including, but not limited to, legal challenges
to existing patents or pending patent applications.
Demand for the Company's instrumentation is substantially affected by the
enactment, timing, extent and severity of state, federal and foreign laws
governing environmental testing standards as well as product labeling
requirements including foods and pharmaceuticals. The Company has experienced
and may continue to experience fluctuations in sales of such products as well as
in demand for particular product enhancements as a result of actual or perceived
changes in regulatory requirements. Legislation or regulations resulting in the
development or expansion of acceptance standards for specific testing methods
has and may result in periodic delays in sales, especially in the United States.
Conversely, increases in international sales have resulted, and may result in
the future, from less stringent or nonexistent acceptance standards in a given
country.
Moreover, the Company's success is dependent on its ability to continue to
develop and engineer high-quality, high-performance products that are
commercially acceptable. Risks associated with new product development include
market acceptance, competition from other products and the Company's ability to
manufacture and market products on an efficient and timely basis at a reasonable
cost and in sufficient volume.
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
Information about the Company's exposure to market risk was
disclosed in its 1999 Annual Report on Form 10-K which was filed
with the Securities and Exchange Commission on September 27, 1999.
There have been no material quantitative changes in market risk
exposures since the date of that filing.
PART II. OTHER INFORMATION
ITEMS 1, 2, 3 and 4 are not applicable and are omitted.
<PAGE> 11
ITEM 5. Other Information
On October 19, 1999 the Company announced that it had received from
Michael J. Collins, its President and Chief Executive Officer, an offer
to purchase all of the Company's outstanding shares not owned by him
for a price of $8.40 per share. The offer contemplated a negotiated
merger subject to shareholder approval.
The Company indicated that its Board of Directors had asked a Special
Committee consisting of two of its independent directors, John L.
Chanon and Ronald A. Norelli, to evaluate Mr. Collins' offer as well as
other strategic alternatives to maximize shareholder value.
On November 10, 1999 the Company announced that Mr. Collins had
increased his previously announced offer to purchase all of the
Company's outstanding shares not owned by him from a price of $8.40 per
share to $9.25 per share, with all other terms and conditions of the
offer remaining unchanged.
The Special Committee continues to explore strategic alternatives to
maximize shareholder value, including evaluating and discussing with
Mr. Collins his offer. The Special Committee has engaged Brookwood
Associates, an investment banking firm with offices in Charlotte and
Atlanta, as its financial advisor.
At the present time, except as may be required by law, the Special
Committee has informed the Company that it does not anticipate making
further comment on its proceedings until it has made a determination as
to the appropriate strategic course for the Company.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
3.1 Restated Charter of the Company, as
amended.(1)
3.2 Bylaws of the Company.(1)
10.1 * CEM Corporation 1986 Nonqualified Stock
Option Plan, as amended, incorporated herein
by reference to the Company's Registration
Statement on Form S-8 (File No. 33-53694).
10.2 * CEM Corporation Employee Stock Purchase
Plan, as amended, incorporated herein by
reference to the Company's Registration
Statement on Form S-8 (File No. 33-80136).
10.3 * CEM Corporation 1987 Stock Option Plan, as
amended.(1)
10.4 * CEM Corporation 1993 Management Equity Plan,
incorporated herein by reference to the
Company's Registration Statement on Form S-8
(File No. 33-75368).
10.5 * CEM Corporation Management Incentive
Compensation Plan(2).
10.6 CEM Corporation 1993 Nonqualified Stock
Option Plan for Non-Employee Directors,
incorporated herein by reference to the
Company's Registration Statement on Form S-8
(File No. 33-75366).
27 Financial Data Schedule (filed in electronic
format only). This schedule shall not be
deemed "filed" for purposes of Section 11 of
the Securities Act of 1933 or Section 18 of
the Securities Exchange Act of 1934 or
otherwise be subject to the liabilities of
such sections, nor shall it be deemed a part
of any registration statement to which it
relates. * This exhibit is one of the
Company's management contracts and
compensatory plans and arrangements.
(1) Incorporated herein by reference to the Company's
Form 10-K for the year ended June 30, 1994.
(2) Incorporated herein by reference to the Company's
Form 10-K for the year ended June 30, 1997.
(b) Reports on Form 8-K:
No Reports on Form 8-K were filed during the quarter ended
September 30, 1999.
<PAGE> 12
CEM CORPORATION
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.
Date: November 12, 1999 CEM CORPORATION
BY: /s/ Richard N. Decker
-------------------------
Richard N. Decker
Secretary, Treasurer and
Chief Financial Officer
<PAGE> 13
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
EXHIBITS
ITEM 6(a)
Quarterly Report on Form 10-Q
For the quarter ended September 30, 1999 Commission File Number: 0-15383
CEM CORPORATION
EXHIBIT INDEX
Exhibit Number: Exhibit Description
- -------------- -------------------
27 Financial Data Schedule (filed in electronic format only)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-START> JUL-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 3,970<F1>
<SECURITIES> 6,196
<RECEIVABLES> 6,013
<ALLOWANCES> 283
<INVENTORY> 5,494
<CURRENT-ASSETS> 22,139
<PP&E> 11,553
<DEPRECIATION> 6,626
<TOTAL-ASSETS> 28,589
<CURRENT-LIABILITIES> 5,631
<BONDS> 166
0
0
<COMMON> 152
<OTHER-SE> 22,513
<TOTAL-LIABILITY-AND-EQUITY> 28,589
<SALES> 7,390
<TOTAL-REVENUES> 7,390
<CGS> 3,525
<TOTAL-COSTS> 3,525
<OTHER-EXPENSES> 3,387
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 546
<INCOME-TAX> 172
<INCOME-CONTINUING> 374
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 374
<EPS-BASIC> .12
<EPS-DILUTED> .12
<FN>
<F1>CERTAIN INFORMATION IN THE FINANCIAL DATA SCHEDULE ABOVE HAS BEEN CONDENSED
FOR INTERIM FINANCIAL REPORTING PURSUANT TO THE RULES AND REGULATIONS OF THE
SECURITIES AND EXCHANGE COMMISSION.
</FN>
</TABLE>
