United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ x ] Quarterly Report Pursuant To Section 13 or 15(d) of the Securities
Exchange Act Of 1934
For the Period Ended December 31, 1995
or
[ ] Transition Report Pursuant to Section 10 or 15(d) of the Securities
Exchange Act of 1934
For the Transition Period From ____________ to ___________
Commission File Number 0-15449
CALIFORNIA MICRO DEVICES CORPORATION
-----------------------------------
(Exact name of registrant as specified in its charter)
California 94-2672609
----------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
215 Topaz Street, Milpitas, California 95035-5430
-------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(408) 263-3214
--------------
(Registrant's telephone number, including area code)
Not applicable
--------------
(Former name, former address, and
former fiscal year if changed since last report)
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
Applicable Only to Issuers Involved in Bankruptcy
Proceedings During the Preceding Five Years
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by the court. Yes No
Applicable Only to Corporate Issuers
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
As of December 31, 1995, there were outstanding 10,258,746 shares of Issuer's
Common Stock.
<PAGE>
CALIFORNIA MICRO DEVICES CORPORATION
INDEX
PART I. FINANCIAL INFORMATION
Page Number
Item 1. Financial Statements
Statements of Operations
Three and Nine Months Ended December 31, 1995 and 1994 2
Balance Sheets
December 31, 1995 and March 31, 1995 3
Statements of Cash Flows
Nine Months Ended December 31, 1995 and 1994 4
Notes to Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 6
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 6. Exhibits and Reports on Form 8-K 11
Signature 12
ii
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements.
<TABLE>
CALIFORNIA MICRO DEVICES CORPORATION
STATEMENTS OF OPERATIONS
(Amounts in Thousands, Except Per Share Data)
(Unaudited)
<S> <C> <C> <C> <C>
Three Months Ended Nine Months Ended
December 31, December 31,
Revenues: 1995 1994 1995 1994
---- ---- ---- ----
(restated)
Net product sales $10,252 $ 7,440 $27,918 $21,376
Technology related revenues 380 713 990 6,688
------- -------- ------- ------
Total revenues 10,632 8,153 28,908 28,064
Cost and expenses:
Cost of sales 5,912 6,461 15,979 28,972
Research and development 822 841 2,483 2,606
Selling, marketing and
administrative 2,837 3,462 8,039 7,641
------- -------- ------ -------
Total costs and expenses 9,571 10,764 26,501 39,219
------- ------- ------- -------
Operating income (loss) 1,061 (2,611) 2,407 (11,155)
Other (income) expense, net (1,620) 349 (1,626) 557
------- ------- ------- -------
Income (loss) before
income taxes 2,681 (2,960) 4,033 (11,712)
Income taxes (benefit) - - - (578)
------- ------- ------- -------
Income (loss) before cumulative
effect of change in accounting 2,681 (2,960) 4,033 (11,134)
Cumulative effect of change in
accounting, net of tax - - - 835
------- ------- ------- ---------
Net income (loss) $ 2,681 $(2,960) $ 4,033 $(11,969)
======= ======= ======= =========
Net income (loss) per common share:
Income (loss) before cumulative effect
of change in accounting $ 0.24 $ (0.35) $ 0.38 $ (1.30)
Cumulative effect of change in
accounting - - - (0.10)
-------- ------- ------ --------
Net income (loss) per share $ 0.24 $ (0.35) $ 0.38 $(1.40)
======= ======== ======= =======
Weighted average common shares and
share equivalents outstanding 10,946 8,551 10,553 8,540
The accompanying notes are an integral part of these financial statements.
</TABLE>
2
<PAGE>
<TABLE>
CALIFORNIA MICRO DEVICES CORPORATION
BALANCE SHEETS
(Amounts in Thousands, Except Share Data)
(Unaudited)
<S> <C> <C>
Dec. 31, March 31,
1995 1995
---- ----
ASSETS:
Current assets:
Cash and cash equivalents $ 4,260 $10,556
Short-term securities 17,997 8,404
Accounts receivable, less allowance for
doubtful accounts of $989 and $832 5,757 3,203
Inventories 5,724 4,747
Refundable income taxes and other assets 467 5,445
------- -------
Total current assets 34,205 32,355
Property, plant & equipment, net 9,078 6,665
Restricted cash 1,213 989
Other long term assets 649 679
------- -------
Total assets $45,145 $40,688
======= =======
LIABILITIES & SHAREHOLDERS' EQUITY:
Current liabilities:
Accounts payable $ 2,960 $ 2,725
Accrued salaries and benefits 1,185 560
Other accrued liabilities 4,934 3,748
Deferred margin on shipments to distributors 1,043 1,157
Current portion of long-term debt and capital
lease obligations 1,769 2,516
------- -------
Total current liabilities 11,891 10,706
Long-term debt, less current maturities 7,700 7,923
Capital lease obligations, less
current maturites 304 1,278
Deferred income 107 136
------- -------
Total liabilities 20,002 20,043
Shareholders' equity:
Common stock - no par value; authorized 25,000,000;
issued and outstanding 10,258,746 shares 55,255 54,947
Retained earnings (30,112) (34,302)
-------- -------
Total shareholders' equity 25,143 20,645
------- -------
Total liabilities and shareholders' equity $45,145 $40,688
======= =======
The accompanying notes are an integral part of these financial statements.
</TABLE>
3
<PAGE>
<TABLE>
CALIFORNIA MICRO DEVICES CORPORATION
STATEMENTS OF CASH FLOWS
(Amounts in Thousands)
(Unaudited)
<S> <C> <C>
Nine Months Ended
December 31,
1995 1994
---- ----
(restated)
Cash flows from operating activities:
Net income /(loss) $ 4,033 $(11,970)
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 995 1,455
Net (increase) /decrease in inventories (977) 9,812
Net (increase) /decrease in accounts receivable (2,554) 2,244
Net (increase) /decrease in prepaid expenses
and other current assets 3,603 (2,286)
Net increase in trade accounts payable
and other current liabilities 2,046 844
CMD/HML -Joint venture 1,375 -
Net (increase)/decrease in other long term assets 30 (2,201)
Deferred margin on distributor sales (114) 1,159
------- -------
Net cash (used) provided by operating activities 8,437 (943)
------- -------
Cash (used) in investing activities:
Securities, net purchases (9,436) (1,534)
Capital expenditures (3,437) (1,472)
Net change in restricted cash (224) (320)
------- -------
Net cash used in investing activities (13,097) (3,326)
------- -------
Cash (used) provided by financing activities:
Payment of capital lease obligations (1,627) (1,401)
Payment of long-term debt (317) (234)
Proceeds from sale/lease back - 1,383
Proceeds from issuance of common stock 308 15,599
------- -------
Net cash (used) provided by financing activities (1,636) 15,347
------ -------
Net increase /(decrease) in cash and cash equivalents (6,296) 11,077
Cash and cash equivalents at beginning of period 10,556 10,561
------- -------
Cash and cash equivalents at end of period $ 4,260 $21,638
======= =======
Supplemental disclosures of cash flow information:
Interest paid $ 608 $ 765
Income taxes paid - $ 2,940
Supplemental disclosures of non-cash investing and
financing activities:
Unrealized gain/(loss) on securities $ 156 -
Capital expenditures financed through capital
lease obligations - $ 466
</TABLE>
4
<PAGE>
CALIFORNIA MICRO DEVICES CORPORATION
Notes to Financial Statements
1. Basis of Presentation
---------------------
In the opinion of management, the accompanying unaudited condensed
financial statements contain all adjustments (consisting of only normal
recurring accruals) necessary to present fairly the Company's financial
position as of December 31, 1995, results of operations for the nine month
periods ended December 31, 1995 and 1994, and cash flows for the nine month
periods ended December 31, 1995 and 1994. Results for the periods are not
necessarily indicative of fiscal year results.
The condensed financial statements should be read in conjunction with the
California Micro Devices Corporation financial statements included with the
Company's annual report on Form 10-K for the nine months ended March 31, 1995.
2. Change in Method of Accounting for Shipments to Distributors
------------------------------------------------------------
Effective July 1, 1994, the Company changed its accounting method of
recognizing revenue on shipments to distributors until final sale by the
distributor. Previously, including the quarter ended June 30, 1994, the
Company recognized revenue at the time of shipment to the distributor.
Distributor agreements allow the distributors certain rights of return and
price protection on unsold merchandise. As a result, the Company believes
that deferral of the recognition of distributor sales and related gross
margins until the merchandise is resold by the distributors results in a
more meaningful measurement of operations and is a preferable method of
accounting for such shipments. Information to compute the proforma effect
of this accounting change on the quarter ended June 30, 1994 is not available.
3. Litigation
----------
Reference should be made to the Company's filings on Form 10-Q for the
first two quarters of fiscal year 1996, and the Company's filing on Form 10-K
for its 1995 fiscal year. In addition to the matters reported therein under
Item 1, the following legal proceedings have taken place:
As previously reported, the Company entered into a proposed settlement
of securities class action lawsuits filed against it and pending before Judge
Vaughn Walker of the U.S. District Court for the Northern District of
California. The parties and others filed pleadings related to the class'
renewed Motion for Preliminary Approval of Settlement. This motion was heard
on November 17, 1995.
Previously, pursuant to the Court's order of August 4, 1995, counsel
for the class surveyed selected institutional and large individual class
members in an effort to determine whether the proposed settlement with the
Company was affirmatively supported. Class members who responded to the
survey generally expressed support for the settlement. On October 12, 1995,
the Colorado Public Employees' Retirement Association (COLPERA), a potential
class member, filed an application for leave to appear in the action for the
limited purpose of participating in settlement discussions and determining
whether the proposed settlement may be improved.
On February 2, 1996, Judge Walker denied the motion for preliminary
approval of the proposed settlement; denied the request of the law firm of
Lieff, Cabraser, Heimann & Bernstein to be appointed class counsel; and
certified the COLPERA as class representative.
The proposed settlement included $1.0 million in cash and 1.5 million
shares of California Micro Devices Corporation common stock valued at $8.00 per
share. The total cost of the proposed settlement, $13.0 million, was expensed
in the quarter and fiscal year ended March 31, 1995. Both the shares and the
cash were placed in, and remain in, trust accounts pending final settlement of
the lawsuits. The 1.5 million shares are included in shares outstanding and in
the computation of earnings per share.
5
<PAGE>
In light of the recent decision by Judge Walker described above, there
can be no assurance that the ultimate resolution of this litigation will be in
the amount and form which the Company has recognized in its financial
statements.
6
<PAGE>
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Results of Operations
Product sales for the quarter ended December 31, 1995, increased by
$2,812,000, or 38%, compared to the quarter ended December 31, 1994, due
primarily to increased sales of thin film products. Thin film products were
approximately 63% of sales for the quarter ended December 31, 1995, compared to
58% of sales for the year ago quarter.
Product sales for the nine month period ended December 31, 1995,
increased by $6,542,000, or 31%, also due to the increased sales of thin film
products. For the nine months ended December 31, 1995, thin film products
represented approximately 64% of sales, compared to approximately 46% in the
nine months ended December 31, 1994.
Sales of thin film products (in absolute dollars) have increased
approximately 85% and 51%, during the nine and three months ended December 31,
1995, respectively, when compared to the same periods a year earlier.
Semiconductor product sales decreased 15% for the nine months, but increased
20% for the three months ended December 31, 1995, when compared with the same
periods a year earlier. The increase of 20% in semiconductor products in the
current quarter is due primarily to increased sales to Motorola, which
accounted for 10% of total Company product sales for the quarter. The increase
in Motorola sales in a number of product areas was partially offset by lower
sales of older semiconductor products.
Technology related revenues, relating to engineering projects partially
funded by Hitachi Metals, Ltd. (HML), decreased in the three months ended
December 31, 1995, compared to the year earlier period due to the completion of
some projects and the timing of cost reimbursement billings to Hitachi.
Technology related revenue for the nine months ended December 31, 1994,
included a one-time sale of rights to previously developed technology in
connection with the initial alliance with HML.
The personal computer industry is the most significant market for the
Company's products and some customers have high inventories which could result
in decreased sales to those customers. In the quarter ended December 31, 1995,
the Company experienced increased orders and sales from portable communication
providers and began to produce revenue from foundry operations, producing
wafers for other companies. See Cautionary Statement.
Cost of goods for the quarter ended December 31, 1995, decreased by
$549,000 relative to the year earlier due to the implementation of cost
reduction programs, improved factory utilization and the increased mix of
higher margin thin film products. Gross margins as a percentage of net product
sales increased to 42% in the quarter ended December 31, 1995, compared to
13% in the year earlier quarter.
Cost of sales for the nine month periods ended December 31, 1995 and
1994 do not provide meaningful comparisons due to a $10.2 million charge for
obsolete and slow moving inventory and a $1.7 million warranty charge, both
included in the three months ended June 30, 1994. Excluding these charges,
gross margins as a percentage of net product sales were approximately 20% in
the nine months ended December 31, 1994, as compared to 43% for the 1995
period.
Research and development expenditures declined in dollars and as a
percentage of sales during the three and nine months ended December 31, 1995,
due to the lower consumption of materials used in engineering projects compared
to the year earlier periods, as well as the completion of some earlier projects.
Selling, marketing and administrative costs decreased overall and as a
percentage of sales in the quarter ended December 31, 1995, when compared to
the year earlier quarter primarily due to the higher level of costs associated
with shareholder litigation and related matters in the prior year. Total
litigation costs were approximately $400,000 in the 1995 quarter as compared
to approximately $1,500,000 during the quarter ended December 31, 1994. The
decrease in legal costs was partially offset by increased salary costs, sales
commissions and bonuses related to increased sales and profits.
7
<PAGE>
The nine months ended December 31, 1995, include significant audit and
consulting fees associated with the clean-up of the Company's administrative
affairs as well as costs associated with shareholder litigation and related
matters, including over $900,000 in legal costs. The nine months ended
December 31, 1994, include a $1.3 million bad debt write-off recognized in
the quarter ended June 30, 1994.
As a result of the factors discussed above, operating income for the
quarter and nine months ended December 31, 1995, was $1,061,000 and
$2,407,000, respectively, compared with losses of $2,611,000 and $11,155,000,
respectively, in the year earlier periods.
Other (income)/expense for the three and nine months ended December 31,
1995, includes a one-time gain of $1,576,000 related to the Company's sale of
its interest in Cell Access. In addition to this gain, other expense is lower
than prior periods due to increased interest income and decreased interest
expense.
No income taxes were accrued for the quarter and nine months ended
December 31, 1995, due to the availability of tax loss carryforwards. An
income tax benefit of $628,000 was recorded in the quarter ended June 30, 1994,
representing the amount of available tax loss carryforwards, partially offset
by foreign withholding taxes of $50,000 in the quarter ended September 30, 1994.
The net loss for the nine months ended December 31, 1994, includes a
$835,000 one-time charge for the cumulative effect of change in accounting
principle. See Note 2 of Notes to Financial Statements.
The weighted average common shares outstanding increased to 10.9 million
shares and 10.6 million shares for the three and nine months ended December 31,
1995, respectively, from 8.5 million shares in the year earlier periods due to
the issuance of 1.5 million shares held in trust for the tentative settlement
of shareholder class action lawsuits and 100,000 shares issued to Hitachi
Metals, Ltd., as well as the dilutive effect of stock options. In addition,
77,342 shares of common stock were issued through the exercise of stock
options by employees and directors during the nine months ended
December 31, 1995.
Earnings per share of $0.24 and $0.38 for the quarter and nine months
ended December 31, 1995, respectively, included $0.14 per share related to the
one-time gain from the sale of the Company's interest in Cell Access. Without
such gain, earnings per share would have been $0.10 and $0.24, respectively.
Liquidity and Capital Resources
The Company's cash and short term securities increased by $3.3 million
from $18,960,000 at March 31, 1995, to $22,257,000 at December 31, 1995, due to
the collection of income tax refunds, collection of a receivable from HML
related to a discontinued project in the Philippines, and the Cell Access sale;
and were partially offset by capital expenditures of $3,437,000, which included
end-of-lease equipment buy-outs of $882,000. The remaining capital expenditures
of $2,555,000 are made up primarily of selected investments to enhance
manufacturing efficiency and capacity and investments in new computer equipment
and software for operational and financial systems.
Accounts receivable increased by $2,554,000 due primarily to increased
sales and also due to timing of sales within the quarter; 45% of product sales
for the quarter ended December 31, 1995, were December shipments. Based on
sales for the quarter, gross days sales outstanding were 59 days compared to 49
days at March 31, 1995.
Inventories increased by $977,000, or 21%, to support a 31% increase in
sales with increased work-in-process and finished goods inventories. Backlog of
net product orders for the next six months was $10.4 million at December 31,
1995, compared to $5.6 million at March 31, 1995, an increase of 86%.
Accrued salaries and benefits increased due the timing of payrolls in
the month of December, 1995, increased headcount, increased bonus expense, and
severance reserves.
Other accrued liabilities increased primarily due to increased sales tax
and sales commissions accruals, relocation and recruitment costs, and accrued
royalties.
8
<PAGE>
The Company expects to be able to fund its liquidity needs for at least
the next twelve months through its existing cash balances and cash flows from
operations. See Cautionary Statement. The Company has a bank line of credit,
expiring July 31, 1996, under which it can borrow up to $3,000,000, at prime,
collateralized by short term investments managed by the bank. There have been
no borrowings against this line of credit.
Cautionary Statement
Statements included herein which are not historical facts are forward
looking statements. Such forward looking statements are made pursuant to the
safe harbor provisions of the Private /Securities Litigation Reform Act of
1995. The forward looking statements regarding revenues, orders and sales
involve a number of risks and uncertainties, including but not limited to,
demand for the Company's product, pricing pressures which could effect the
Company's gross margin or the ability to consummate sales, intense competition
within the industry, the need for the Company to keep pace with technological
developments and timely respond to changes in customer needs, the Company's
dependence on third party suppliers for components for its products and the
Company's dependence upon intellectual property rights which, if not
available to the Company, could have a material adverse effect on the Company.
These same factors, as well as others, such as the continuing litigation
involving the Company, could also effect the liquidity needs of the Company.
9
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings.
Reference should be made to the Company's filings on Form 10-Q for the
first two quarters of fiscal year 1996, and the Company's filing on Form 10-K
for its 1995 fiscal year. In addition to the matters reported therein under
Item 1, the following legal proceedings have taken place:
As previously reported, the Company entered into a proposed settlement
of securities class action lawsuits filed against it and pending before Judge
Vaughn Walker of the U.S. District Court for the Northern District of
California. The parties and others filed pleadings related to the class'
renewed Motion for Preliminary Approval of Settlement. This motion was heard
on November 17, 1995.
Previously, pursuant to the Court's order of August 4, 1995, counsel
for the class surveyed selected institutional and large individual class
members in an effort to determine whether the proposed settlement with the
Company was affirmatively supported. Class members who responded to the
survey generally expressed support for the settlement. On October 12, 1995,
the Colorado Public Employees' Retirement Association (COLPERA), a potential
class member, filed an application for leave to appear in the action for the
limited purpose of participating in settlement discussions and determining
whether the proposed settlement may be improved.
On February 2, 1996, Judge Walker denied the motion for preliminary
approval of the proposed settlement; denied the request of the law firm of
Lieff, Cabraser, Heimann & Bernstein to be appointed class counsel; and
certified the COLPERA as class representative.
The proposed settlement included $1.0 million in cash and 1.5 million
shares of California Micro Devices Corporation common stock valued at $8.00 per
share. The total cost of the proposed settlement, $13.0 million, was expensed
in the quarter and fiscal year ended March 31, 1995. Both the shares and the
cash were placed in, and remain in, trust accounts pending final settlement of
the lawsuits. The 1.5 million shares are included in shares outstanding and in
the computation of earnings per share.
In light of the recent decision by Judge Walker described above, there
can be no assurance that the ultimate resolution of this litigation will be in
the amount and form which the Company has recognized in its financial
statements.
10
<PAGE>
ITEM 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit 11 Computation of Per Share Earnings
(b) Reports on Form 8-K
(i) On November 16, 1995, the Company filed a report on
Form 8-K, reporting the release of certain information
regarding the Company's history, products, and future
direction.
(ii) On November 16, 1995, the Company filed a report on
Form 8-K, reporting the release of certain information
regarding a hearing before Judge Vaughn Walker related to
the settlement of class action lawsuits previously filed
against it.
(iii) On November 20, 1995, the Company filed a report on
Form 8-K, reporting the election of John Jorgensen as Vice
President, Engineering, as an Officer of the Company.
(iv) On February 5, 1996, the Company filed a report on Form 8-K,
reporting the release of certain information regarding the
Company's third quarter 1996 financials.
(v) On February 6, 1996, the Company filed a report on Form 8-K,
reporting the release of certain information regarding a
court order relating to the preliminary settlement of class
action securities lawsuits previously filed against it.
11
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CALIFORNIA MICRO DEVICES CORPORATION
------------------------------------
(Registrant)
Date: February 13, 1996 /s/ John E. Trewin
-----------------------------------------
John E. Trewin
Vice President and Chief Financial Officer
12
<PAGE>
<TABLE>
EXHIBIT 11
CALIFORNIA MICRO DEVICES CORPORATION
Computation of Per Share Earnings
(Amounts in Thousands, Except Share Data)
(Unaudited)
<S> <C> <C> <C> <C>
Three Months Ended Nine Months Ended
December 31, December 31,
1995 1994 1995 1994
---- ---- ---- ----
(restated)
Net income (loss) $ 2,681 $ (2,960) $ 4,034 $(11,969)
======= ======= ====== =======
PRIMARY:
Weighted average common shares
outstanding 10,229 8,551 9,930 8,540
Common equivalents attributable to:
Options and warrants 717 601
------ ------- ------ -------
Total weighted average common and common
equivalent shares outstanding 10,946 8,551 10,531 8,540
====== ====== ====== ======
Net income (loss) per share $ 0.24 $ (0.35) $ 0.38 $ (1.40)
====== ====== ====== ======
FULLY DILUTED
Weighted average common shares 10,229 8,551 9,930 8,540
Common equivalent attributable to:
Options and warrants 717 623
----- ------ ------ -------
Total weighted average common and common
equivalent shares outstanding 10,946 8,551 10,553 8,540
====== ====== ====== ======
Net income (loss) per share $ 0.24 $ (0.35) $ 0.38 $ (1.40)
====== ====== ====== ======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 4,260
<SECURITIES> 17,997
<RECEIVABLES> 7,578<F1>
<ALLOWANCES> 1,821
<INVENTORY> 5,724
<CURRENT-ASSETS> 34,205<F1><F2>
<PP&E> 10,940<F2><F3>
<DEPRECIATION> 0
<TOTAL-ASSETS> 45,145
<CURRENT-LIABILITIES> 11,891
<BONDS> 0
0
0
<COMMON> 55,255
<OTHER-SE> (30,112)
<TOTAL-LIABILITY-AND-EQUITY> 45,145
<SALES> 10,252
<TOTAL-REVENUES> 10,632<F4>
<CGS> 5,912
<TOTAL-COSTS> 5,912
<OTHER-EXPENSES> 3,659<F5>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (1,620)
<INCOME-PRETAX> 2,681
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,681
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,681
<EPS-PRIMARY> .24
<EPS-DILUTED> .24
<FN>
<F1>Includes Refundable income taxes and other assets - 467.
<F2>Includes Refundable income taxes and other assets - 467.
<F3>Includes Property, plant & equipment, net - $9,078; Restricted Cash - 1,213;
and Other long term assets - 649.
<F4>Includes Technology related revenues - 380.
<F5>Includes Research & development - 822; and Selling, marketing, &
administrative - $2,837.
</FN>
</TABLE>
