<PAGE>
FORM 10-Q/A
AMENDMENT NO. 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1998
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 0-20584
ABIOMED, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 04-2743260
(State of incorporation) (IRS Employer No.)
33 CHERRY HILL DRIVE
DANVERS, MASSACHUSETTS 01923
(Address of principal executive offices, including zip code)
(978) 777-5410
(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) or 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 [ ]
As of June 30, 1998, there were 8,584,571 shares outstanding of the
registrant's Common Stock, $.01 par value.
<PAGE>
ABIOMED, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Part I - Financial Information:
Item 1. Financial Statements
Consolidated Balance Sheets
June 30, 1998 and March 31, 1998 3-4
Consolidated Statements of Operations
Three Months Ended June 30, 1998
and June 30, 1997 5
Consolidated Statements of Cash Flows
Three Months Ended June 30, 1998 and
June 30, 1997 6
Notes to Consolidated Financial Statements 7-9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10-13
Part II - Other Information 14
Signatures 15
</TABLE>
2
<PAGE>
ABIOMED, INC. AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
June 30, March 31,
1998 1998
(unaudited) (audited)
----------- ----------
<S> <C> <C>
Current Assets:
Cash and cash equivalents (Note 7) $ 2,389,324 $ 2,683,151
Short-term marketable securities (Note 7) 21,392,736 23,714,641
Accounts receivable, net of allowance for
doubtful accounts of $204,000 at June 30, 1998
and March 31, 1998, respectively 6,211,604 5,356,348
Inventories (Note 4) 2,831,629 2,327,442
Prepaid expenses and other current assets 345,321 208,387
----------- -----------
Total current assets 33,170,614 34,289,969
----------- -----------
Property and Equipment, at cost:
Machinery and equipment 4,876,207 4,316,852
Furniture and fixtures 558,598 533,460
Leasehold improvements 1,630,303 1,561,189
----------- -----------
7,065,108 6,411,501
Less: Accumulated depreciation and amortization 3,063,366 2,724,442
----------- -----------
4,001,742 3,687,059
----------- -----------
Other Assets, net (Notes 2 and 8) 474,890 638,176
----------- -----------
$37,647,246 $38,615,204
----------- -----------
----------- -----------
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
3
<PAGE>
ABIOMED, INC. AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS (continued)
CONSOLIDATED BALANCE SHEETS (CONTINUED)
LIABILITIES AND STOCKHOLDERS' INVESTMENT
<TABLE>
<CAPTION>
June 30, March 31,
1998 1998
(unaudited) (audited)
----------- ----------
<S> <C> <C>
Current Liabilities:
Accounts payable $ 1,538,844 $ 2,057,473
Accrued expenses 2,840,217 2,872,288
----------- -----------
Total current liabilities 4,379,061 4,929,761
----------- -----------
Liabilities of Discontinued Operations, net (Note 3) 645,158 667,466
Stockholders' Investment (Note 5):
Class B Preferred Stock, $.01 par value-
Authorized 1,000,000 shares
Issued and outstanding-none - -
Common Stock, $.01 par value-
Authorized 25,000,000 shares
Issued and Outstanding- 8,584,571 shares at
June 30, 1998 and 8,567,015 shares at
March 31, 1998 85,846 85,670
Additional paid-in capital 57,601,914 57,454,983
Accumulated deficit (25,064,733) (24,522,676)
----------- -----------
Total stockholders' investment 32,623,027 33,017,977
----------- -----------
$37,647,246 $38,615,204
----------- -----------
----------- -----------
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
4
<PAGE>
ABIOMED, INC. AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS (continued)
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
-----------------------------
June 30, June 30,
1998 1997
---------- ----------
<S> <C> <C>
Revenues:
Products $3,524,510 $3,836,423
Contracts 2,278,733 1,829,045
---------- ----------
5,803,243 5,665,468
---------- ----------
Costs and expenses:
Cost of product revenues 1,436,865 1,308,102
Research and development 3,033,780 1,643,475
Selling, general and administrative 2,231,867 1,884,993
---------- ----------
6,702,512 4,836,570
---------- ----------
(Loss) income from operations (899,269) 828,898
Interest and other income 357,212 124,495
---------- ----------
(Loss) income from continuing operations (542,057) 953,393
Loss from discontinued operations (Note 3) - (82,432)
---------- ----------
Net (loss) income $ (542,057) $ 870,961
---------- ----------
---------- ----------
(Loss) income from continuing operations per share
(Note 6):
Basic $(0.06) $0.13
Diluted $(0.06) $0.13
Loss from discontinued operations per share (Note 6):
Basic - $(0.01)
Diluted - $(0.01)
Net (loss) income per share (Note 6):
Basic $(0.06) $0.12
Diluted $(0.06) $0.12
---------- ----------
---------- ----------
Weighted average shares outstanding (Note 6):
Basic 8,573,302 7,011,600
Diluted 8,573,302 7,124,168
---------- ----------
---------- ----------
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
5
<PAGE>
ABIOMED, INC. AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS (continued)
CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
-----------------------------
June 30, June 30,
1998 1997
---------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income $ (542,057) $ 870,961
Adjustments to reconcile net (loss) income to net cash
used in operating activities-
Depreciation and amortization 374,462 150,606
Changes in assets and liabilities-
Accounts receivable (855,256) (1,082,546)
Inventories (504,187) (211,844)
Prepaid expenses and other assets (9,186) (29,990)
Accounts payable (518,629) (72,799)
Accrued expenses (32,071) 268,268
Liabilities of discontinued operations, net (22,308) 103,222
---------- -----------
Net cash used in operating activities (2,109,232) (4,122)
---------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Maturities of short-term marketable securities, net 2,321,905 584,101
Purchases of property and equipment (653,607) (644,698)
---------- -----------
Net cash provided by (used in)
activities 1,668,298 (60,597)
---------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options 147,107 66,244
---------- -----------
Net cash provided by financing
activities 147,107 66,244
---------- -----------
NET (DECREASE) INCREASE IN CASH AND EQUIVALENTS,
EXCLUDING INVESTMENTS (293,827) 1,525
CASH AND CASH EQUIVALENTS, EXCLUDING INVEST-
MENTS, AT BEGINNING OF PERIOD 2,683,151 1,579,972
---------- -----------
CASH AND CASH EQUIVALENTS , EXCLUDING INVEST-
MENTS, AT END OF PERIOD $2,389,324 $1,581,497
---------- -----------
---------- -----------
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
6
<PAGE>
ABIOMED, INC. AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION (continued)
ITEM 1: FINANCIAL STATEMENTS (continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. BASIS OF PREPARATION
The unaudited consolidated financial statements of ABIOMED, Inc.
(the Company), presented herein have been prepared in accordance with the
instructions to Form 10-Q and do not include all of the information and note
disclosures required by generally accepted accounting principles. These
statements should be read in conjunction with the consolidated financial
statements and notes thereto included in the Company's latest audited
financial statements, which are contained in the Company's Form 10-K for the
year ended March 31, 1998, which was filed with the Securities and Exchange
Commission. In the opinion of management, the accompanying consolidated
financial statements include all adjustments (consisting only of normal,
recurring adjustments) necessary to summarize fairly the Company's financial
position and results of operations. The results of operations for the three
months ended June 30, 1998 may not be indicative of the results that may be
expected for the full fiscal year.
2. PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the
Company, and its wholly owned subsidiaries, and the accounts of its
majority-owned subsidiary Abiomed Limited Partnership. All significant
intercompany accounts and transactions have been eliminated in consolidation.
3. DISCONTINUED OPERATIONS
In it's fiscal year ended March 31, 1998, the Company made the
decision to shift all of its focus to the Company's core cardiovascular
business and to sell, license or otherwise dispose of its dental business.
The accompanying consolidated financial statements contain certain accounts
that have been reclassified in each of the periods presented to reflect this
decision by the Company. Reported revenue, cost and expenses from continuing
operations exclude the operating results of the Company's dental business.
The amount accrued by the Company at March 31, 1998 included
estimated operating losses of $370,000 to be incurred during fiscal 1999.
During the three months ended June 30, 1998, the operating loss from the
Company's dental business applied against the accrual was $112,000.
7
<PAGE>
ABIOMED, INC. AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION (continued)
ITEM 1: FINANCIAL STATEMENTS (continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited, continued)
4. INVENTORIES
Inventories include raw materials, work-in-process, and finished
goods and are priced at the lower of cost (first-in, first-out) or market and
consist of the following:
<TABLE>
<CAPTION>
June 30, March 31,
1998 1998
----------- -----------
<S> <C> <C>
Raw materials $1,401,392 $1,320,600
Work-in-process 636,653 483,723
Finished goods 793,584 523,119
----------- -----------
$2,831,629 $2,327,442
----------- -----------
----------- -----------
</TABLE>
Finished goods and work-in-process inventories consist of direct
material, labor and overhead.
5. STOCKHOLDERS' INVESTMENT
During the three months ended June 30, 1998, no options to purchase
shares of Common Stock were granted. Options to purchase 29,700 shares were
canceled during the quarter and there were 17,525 options to purchase shares
exercised at prices ranging from $5.625 to $8.50 per share during the three
months ended June 30, 1998.
6. NET INCOME (LOSS) PER COMMON SHARE
The Company has calculated net income (loss) per common share in
accordance with Statement of Financial Accounting Standards (SFAS) No. 128,
Earnings Per Share, a new accounting standard that requires the Company to
present both basic and diluted net income (loss) per share for all periods
presented. Basic earnings (loss) per share ("Basic EPS") is computed by
dividing net income (loss) by the weighted average number of common shares
outstanding during the period. Diluted earnings (loss) per share ("Diluted
EPS") is computed by dividing net income (loss) by the weighted average
number of common and common equivalent shares outstanding during the period
using the treasury stock method. Under the Diluted EPS method, no common
equivalent shares are considered dilutive in periods, such as the three
months June 30, 1998, in which a net loss is reported because such common
equivalent shares are antidilutive. The number of shares that otherwise would
have been dilutive is 263,617 for the three months ended June 30, 1998. In
accordance with SFAS No. 128, the Company has recomputed net income per share
for the three month period ended June 30, 1997 and as a result has restated
reported basic and diluted net income per share from $0.11 to $0.12 per share.
8
<PAGE>
ABIOMED, INC. AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION (continued)
ITEM 1: FINANCIAL STATEMENTS (continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited, continued)
7. CASH AND CASH EQUIVALENTS
The Company classifies any marketable security with a maturity date
of 90 days or less at the time of acquisition to be a cash equivalent.
Securities, including marketable securities, with original maturities of
greater than 90 days are classified as investments.
8. OTHER ASSETS
Other assets include approximately $307,000 in unamortized purchase
cost of the Company's majority interest of the Abiomed Limited Partnership.
The interest in the Abiomed Limited Partnership is being amortized over five
years, its estimated useful life. Abiomed Limited Partnership (the
Partnership) was formed in March 1985 and provided initial funding for the
design and development of certain of the Company's products.
Through August 3, 2000, the Company owes a royalty to the
Partnership of 5.5% of certain revenues from these products. Because the
Company owns 61.7% of the Partnership, the net royalty expense to the Company
is approximately 2.1% of these product revenues. This royalty formula is
subject to certain maximum amounts and to certain additional adjustments in
the event that the Company sells the technology. The Partnership is inactive
except with respect to receiving and distributing proceeds from these royalty
rights.
Also included in other assets are long-term accounts receivable
related to sales-type leases. The terms of these non-cancelable leases are
one to three years. As of June 30, 1998, approximately $168,000 is included
in other assets for these sales-type leases.
9. RECENT ACCOUNTING PRONOUNCEMENT
In June 1998, the Financial Accounting Standards Board issued SFAS
No. 133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES. SFAS
No. 133 is effective for fiscal years beginning after June 15, 1999. The
Company does not believe the adoption of this accounting standard will have
any impact on the Company's financial position or results of operations.
9
<PAGE>
ABIOMED, INC. AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION (continued)
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1998
NET INCOME
Net loss and net loss per share for the three months ended June 30,
1998, were approximately $542,000 and $0.06 per share, respectively. This
loss compares to net income and net income per share of approximately
$871,000 and $0.12 per share, respectively, in the same period of the
previous year. The net loss for the three months ended June 30, 1998 is
primarily attributable to the Company's undertaking to accelerate the
development of its battery-powered heart replacement device ("HRD").
REVENUES
Total revenues, excluding interest income, increased by 2% to $5.8
million in the three months ended June 30, 1998 from $5.7 million in the
three months ended June 30, 1997. This increase was attributable to an
increase in contract revenues.
Product revenues decreased by 8% to $3.5 million in the three months
ended June 30, 1998 from $3.8 million in the three months ended June 30,
1997. Sales of BVS blood pumps in the quarter ended June 30, 1997 benefited
from $356,000 of product backlog carried into and shipped in the quarter. The
Company generally operates with only limited backlog. Without the effect of
backlog on the quarter ended June 30, 1997 revenues, product revenues were
relatively unchanged between these respective quarters. During the quarter
ended June 30, 1998, relatively slow customer reorders of the BVS single-use
blood pumps during the early part of the quarter were partially offset by
record blood pump reorders in June and a slight increase in BVS console
sales, as compared to the first quarter of the prior year. More than 90% of
total product revenues in the three months ended June 30, 1998 were derived
from domestic sources.
Contract revenues increased by 25% to approximately $2.3 million in
the three months ended June 30, 1998 from $1.8 million in the three months
ended June 30, 1997. Approximately $1.8 million of the contract revenue
recognized in the three months ended June 30, 1998 was derived from the
Company's HRD government contract compared to $1.7 million of contract
revenue recognized under this contract for the three months ended June 30,
1997. The Company accounts for revenue under its government contracts and
grants as work is performed, provided that the government has appropriated
sufficient funds for the work. Through June 30, 1998, the government had
appropriated $6.7 million of the $8.5 million HRD contract amount, including
$1.7 million appropriated in June 1998, which had previously been scheduled
to be appropriated in October 1998. To date, the Company's expenditures under
the HRD contract have exceeded the appropriated amount. The government
appropriation schedule calls for no further appropriation for the HRD
contract until October 1999. This schedule is subject to change at the
discretion of the government.
10
<PAGE>
ABIOMED, INC. AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION (continued)
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS(continued)
REVENUES (continued)
While the Company currently plans to further increase its
expenditures in connection with the development of the HRD, the Company will
not recognize any further contract revenues under the HRD contract until such
time as additional funds are appropriated under the HRD contract, if ever.
The Company believes that certain of its costs incurred prior to further
appropriation may be reimbursable under the HRD contract, if and when
additional appropriation under the HRD contract is made. Due to the Company's
accelerated HRD development activity and the timing of government
appropriations, the Company believes that it will experience significant
quarterly fluctuations in contract revenues. The Company also believes that
the Company's total expenses to complete the development of the HRD will
significantly exceed the remaining $1.8 million HRD contract amount.
As of June 30, 1998, the Company's total backlog of research and
development contracts and grants was $5.3 million, including $1.8 million for
HRD research and development and $2.2 million for Heart Booster-TM- research
and development. Funding for the Company's government research and
development contracts is subject to government appropriation, and all of
these contracts contain provisions that make them terminable at the
convenience of the government. The Company retains rights to all
technological discoveries and products resulting from these efforts.
COSTS AND EXPENSES
Total costs and expenses increased to $6.7 million, 115% of total
revenues, for the three months ended June 30, 1998, from $4.8 million, 85% of
total revenues, for the three months ended June 30, 1997. The majority of
this increase in costs and expenses was incurred to support increased
development activities related to the HRD.
Cost of product revenues as a percentage of product revenues was 41%
for the three months ended June 30, 1998 as compared to 34% in the three
months ended June 30, 1997. The majority of this increase in cost of products
sold as a percentage of product revenues was attributable to higher product
costs for both the console and blood pumps due to higher indirect engineering
costs to support expanded manufacturing capabilities and to a change in the
relative mix of products sold.
Research and development expenses increased by 85% to $3.0 million,
52% of total revenues, for the three months ended June 30, 1998, from $1.6
million, 29% of total revenues for the three months ended June 30, 1997. The
increase primarily reflected higher levels of spending by the Company to
advance the development of the HRD, higher level of activity under the
Company's non-HRD cost-plus-fixed-fee research and development contracts and
grants and higher levels of spending to enhance the BVS. Research and
development expenses during the three months ended June 30, 1998 included
$2.1 million of expenses incurred in connection with the Company's
development activities for the HRD. The Company anticipates that its research
and development expenses will continue to increase as a result of its plans
to further increase its research and development efforts to further develop
and test the HRD and enhance the BVS.
11
<PAGE>
ABIOMED, INC. AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION (continued)
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS(continued)
COSTS AND EXPENSES (continued)
Selling, general and administrative expenses increased by 18% to
$2.2 million, 38% of total revenues, for the three months ended June 30,
1998, from $1.9 million, 33% of total revenues, for the three months ended
June 30, 1997. The increase primarily reflects higher selling and employee
recruiting costs, including increased sales and administrative headcount and
additional travel costs, and additional legal expense. The higher selling
costs were incurred primarily to continue the growth of the Company's U.S.
customer base. The higher employee recruiting costs were incurred to support
the Company's growing employee base, particularly in the areas of product
development, manufacturing, sales and marketing related to the HRD and BVS.
INTEREST AND OTHER INCOME
Interest and other income consists primarily of interest on the
Company's investment balances, net of interest and other expenses. Interest
income and other income increased to $357,000, 6% of total revenues, for the
three months ended June 30, 1998 from $124,000, 2% of total revenues, for the
three months ended June 30, 1997. This increase primarily reflects interest
earned on the Company's higher average investment balances.
Income taxes incurred during these periods were not material and the
Company continues to have significant net tax operating loss carryforwards
and tax credit carryforwards.
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 1998, the Company had $23.8 million in cash and
short-term marketable securities. The Company also has a $3,000,000 line of
credit from a bank that expires in September 1998, and which was entirely
available at June 30, 1998.
In the three months ended June 30, 1998, operating activities used
cash of $2,109,000. Net cash used by operating activities during the three
months ended June 30, 1998 reflected a net loss of $542,000, increases in
accounts receivable, inventory and prepaid expenses of $855,000, $504,000 and
$9,000, respectively, and decreases in accounts payable, accrued expenses and
net assets of discontinued operations of $519,000, $32,000 and $22,000,
respectively. These uses of cash were partially offset by depreciation and
amortization expense of $374,000 included in the net loss. The increase in
accounts receivable is primarily attributable to the timing of billings
related to the Company's HRD government contract.
During the three months ended June 30, 1998, investing activities
provided $1,668,000 of cash. Net cash provided by investing activities
included $2,322,000 of maturities of short-term investments partially offset
by $654,000 of purchases and improvements of equipment and property primarily
to support the advanced development of the HRD and the expansion of the
manufacturing facility.
During the three months ended June 30, 1998, financing activities
provided $147,000 of cash from the exercise of stock options.
12
<PAGE>
ABIOMED, INC. AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION (continued)
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS(continued)
LIQUIDITY AND CAPITAL RESOURCES (continued)
Although the Company does not currently have significant capital
commitments, the Company believes that it will continue to make significant
investments over the next several years to support the development and
commercialization of its products and the expansion of its manufacturing and
product development facilities. The Company is currently negotiating with its
landlord to enter into a new or amended lease that would allow the Company to
extend the current lease and consolidate its operations into one building.
There is no guarantee that the Company will be able to negotiate acceptable
terms and the Company is exploring alternative sites as well. In either case,
the Company estimates that it will incur costs of approximately two million
dollars for improvements.
The Company believes that its revenues and existing resources will
be sufficient to fund its planned operations, including planned increases in
its internally funded HRD development efforts, for at least the next twelve
months.
13
<PAGE>
ABIOMED, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
No material change.
Item 2. CHANGES IN SECURITIES
None
Item 3. DEFAULTS UPON SENIOR SECURITIES
None
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
Item 5. OTHER INFORMATION
None
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
a) EXHIBITS
None
b) REPORTS ON FORM 8-K
None
14
<PAGE>
ABIOMED, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
- ------------------------------------------------------------------------------
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.
ABIOMED, Inc.
Date: July 28, 1998 /s/ DAVID M. LEDERMAN
----------------------
David M. Lederman
CEO and President
Date: July 28, 1998 /s/ JOHN F. THERO
-----------------
Vice President Finance
and Treasurer
Chief Financial Officer
Principal Accounting Officer
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S
CONSOLIDATED INCOME STATEMENT, CONSOLIDATED BALANCE SHEET AND CONSOLIDATED
STATEMENT OF CASH FLOWS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO FORM
10-Q/A FOR THE PERIOD ENDING JUNE 30, 1998.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-END> JUN-30-1998
<CASH> 2389324
<SECURITIES> 21392736
<RECEIVABLES> 6211604
<ALLOWANCES> 204000
<INVENTORY> 2831629
<CURRENT-ASSETS> 33170614
<PP&E> 7065108
<DEPRECIATION> 3063366
<TOTAL-ASSETS> 37647246
<CURRENT-LIABILITIES> 4379061
<BONDS> 0
0
0
<COMMON> 85846
<OTHER-SE> 32537181
<TOTAL-LIABILITY-AND-EQUITY> 37647246
<SALES> 5803243
<TOTAL-REVENUES> 5803243
<CGS> 1436865
<TOTAL-COSTS> 6702512
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (357212)
<INCOME-PRETAX> (542057)
<INCOME-TAX> (542057)
<INCOME-CONTINUING> (542057)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (542057)
<EPS-PRIMARY> (0.06)
<EPS-DILUTED> (0.06)
</TABLE>
