<PAGE> 1
================================================================================
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 quarterly period ended October 1, 1995 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 0-17869
COGNEX CORPORATION
--------------------------------------------------------
(Exact name of registrant as specified in its charter)
Massachusetts 04-2713778
--------------------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Vision Drive
Natick, Massachusetts 01760-2059
(508) 650-3000
--------------------------------------------------------
(Address, including zip code, and telephone number,
including area code, of principal executive offices)
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
--------- ----------
As of October 29, 1995, there were 19,386,023 shares of Common Stock,
$.002 par value, of the registrant outstanding.
Total number of pages: 11
================================================================================
<PAGE> 2
INDEX
PART I FINANCIAL INFORMATION
ITEM 1. Financial Statements
Consolidated Statements of Income for the three and nine
months ended October 1, 1995 and October 2, 1994
Consolidated Balance Sheets as of October 1, 1995 and December
31, 1994
Consolidated Statement of Stockholders' Equity for the nine
months ended October 1, 1995
Consolidated Statements of Cash Flows for the nine months ended
October 1, 1995 and October 2, 1994
Notes to Consolidated Financial Statements
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
PART II OTHER INFORMATION
ITEM 1. Legal Proceedings
ITEM 2. Changes in Securities
ITEM 3. Defaults Upon Senior Securities
ITEM 4. Submission of Matters to a Vote of Security Holders
ITEM 5. Other Information
ITEM 6. Exhibits and Reports on Form 8-K
Signatures
<PAGE> 3
PART I: FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
COGNEX CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
OCTOBER 1, OCTOBER 2, OCTOBER 1, OCTOBER 2,
1995 1994 1995 1994
---------- ---------- ---------- ----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Revenue.......................................... $29,784 $16,592 $72,943 $44,380
Cost of revenue.................................. 6,535 3,831 15,723 9,975
------- ------- ------- -------
Gross margin..................................... 23,249 12,761 57,220 34,405
Research, development and engineering expenses... 3,495 2,552 9,284 7,504
Selling, general and administrative expenses..... 6,335 4,334 17,216 11,791
Charge for acquired in-process technology........ 10,189 10,189
------- ------- ------- -------
Income from operations........................... 3,230 5,875 20,531 15,110
Interest income.................................. 598 343 1,898 1,074
------- ------- ------- -------
Income before provision for income taxes......... 3,828 6,218 22,429 16,184
Provision for income taxes....................... 4,461 1,928 9,948 5,017
------- ------- ------- -------
Net income/(loss)................................ $ (633) $ 4,290 $12,481 $11,167
======= ======= ======= =======
Net income/(loss) per share...................... $ (.03) $ .23 $ .60 $ .61
======= ======= ======= =======
Weighted average common shares outstanding....... 19,096 18,419 20,788 18,396
======= ======= ======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
1
<PAGE> 4
COGNEX CORPORATION
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<TABLE>
<CAPTION>
OCTOBER 1, DECEMBER 31,
1995 1994
---------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................................. $ 22,739 $ 56,326
Investments........................................................... 62,957 25,169
Accounts receivable, less reserves of approximately $689 and $684 in
1995 and 1994, respectively........................................ 20,004 9,151
Inventories........................................................... 9,038 4,439
Deferred income taxes................................................. 1,700 1,463
Prepaid expenses and other............................................ 6,445 1,195
-------- --------
Total current assets.............................................. 122,883 97,743
Property, plant and equipment, net......................................... 20,912 14,503
Other assets............................................................... 4,111 593
-------- --------
$147,906 $112,839
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable...................................................... $ 2,361 $ 1,284
Accrued expenses...................................................... 9,155 5,135
Accrued income taxes.................................................. 2,280 1,674
Customer deposits..................................................... 825 744
Deferred revenue...................................................... 354 394
-------- --------
Total current liabilities......................................... 14,975 9,231
Other liabilities.......................................................... 1,865
Deferred income taxes...................................................... 1,089
Stockholders' equity:
Common stock, $.002 par value -
Authorized: 60,000,000 shares, issued: 19,356,587 and 18,751,935
shares in 1995 and 1994, respectively.............................. 39 38
Additional paid-in capital............................................ 67,634 53,633
Cumulative translation adjustment..................................... 47 (53)
Retained earnings..................................................... 62,963 50,482
Treasury stock, at cost, 37,488 and 30,878 shares in 1995 and 1994,
respectively....................................................... (706) (492)
-------- --------
Total stockholders' equity........................................ 129,977 103,608
-------- --------
$147,906 $112,839
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
2
<PAGE> 5
COGNEX CORPORATION
<TABLE>
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(Dollars in thousands)
<CAPTION>
COMMON STOCK TREASURY STOCK
--------------- --------------
NUMBER $.002 ADDITIONAL CUMULATIVE NUMBER TOTAL
OF PAR PAID-IN TRANSLATION RETAINED OF STOCKHOLDERS'
SHARES VALUE CAPITAL ADJUSTMENT EARNINGS SHARES COST EQUITY
------ ----- ------- ---------- -------- ------ ---- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1994.......... 18,751,935 $ 38 $ 53,633 $ (53) $ 50,482 30,878 $(492) $ 103,608
Common stock issued to acquire
Acumen, Inc...................... 96,140 4,170 4,170
Issuance of stock under stock
option and stock purchase plans.. 508,512 1 3,514 3,515
Tax benefit from the exercise of
stock options.................... 6,317 6,317
Common stock received for payment
of stock option exercises........ 6,610 (214) (214)
Translation adjustment............. 100 100
Net income......................... 12,481 12,481
---------- ----- -------- ------ -------- ------ ----- ---------
Balance at October 1, 1995 19,356,587 $ 39 $ 67,634 $ 47 $ 62,963 37,488 $(706) $ 129,977
(unaudited)......................... ========== ===== ======== ====== ======== ====== ===== =========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
3
<PAGE> 6
COGNEX CORPORATION
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
<CAPTION>
NINE MONTHS ENDED
OCTOBER 1, OCTOBER 2,
1995 1994
---------- ----------
(UNAUDITED)
<S> <C> <C>
Cash flows from operating activities:
Net income............................................................. $ 12,481 $ 11,167
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization........................................ 2,206 1,200
Loss on disposition of property, plant and equipment................. 56
Charge for acquired in-process technology............................ 10,189
Tax benefit from the exercise of stock options....................... 6,317 1,092
Change in deferred income tax provision.............................. (49)
Change in other current assets and current liabilities............... (15,776) (1,991)
-------- --------
Net cash provided by operating activities.............................. 15,424 11,468
-------- --------
Cash flows from investing activities:
Purchase of investments................................................ (60,919) (17,649)
Maturities of investments.............................................. 23,131 13,209
Purchase of property, plant and equipment.............................. (8,436) (11,795)
Purchase of Acumen, Inc., net of cash acquired......................... (6,146)
Increase in other assets............................................... (46) (391)
-------- --------
Net cash used in investing activities.................................. (52,416) (16,626)
-------- --------
Cash flows from financing activities:
Issuance of stock under stock option and stock purchase plans.......... 3,301 1,147
-------- --------
Net cash provided by financing activities.............................. 3,301 1,147
-------- --------
Effect of exchange rate changes on cash..................................... 104 (85)
-------- --------
Net decrease in cash and cash equivalents................................... (33,587) (4,096)
Cash and cash equivalents at beginning of period............................ 56,326 21,833
-------- --------
Cash and cash equivalents at end of period.................................. $ 22,739 $ 17,737
======== ========
Supplemental disclosure of noncash investing and financing activities:
Retirement of fully-depreciated property, plant and equipment.......... $ 3,049
Purchase of Acumen, Inc.
Fair value of tangible assets acquired............................... $ 1,226
Liabilities assumed.................................................. (1,122)
Acquired technology.................................................. 12,558
Goodwill and other intangible assets................................. 1,288
Issuance of stock and stock options.................................. (5,498)
Other liabilities.................................................... (2,106)
--------
Cash paid to acquire Acumen, Inc. ................................... $ (6,346)
========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
4
<PAGE> 7
COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
As permitted by the rules of the Securities and Exchange Commission
applicable to quarterly reports on Form 10-Q, these notes are
condensed and do not contain all disclosures required by generally
accepted accounting principles. Reference should be made to the
financial statements and related notes included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1994, as
filed with the Securities and Exchange Commission on March 27, 1995.
In the opinion of the management of Cognex Corporation, the
accompanying financial statements contain all adjustments (consisting
of only normal recurring adjustments) necessary to present fairly the
Company's financial position at October 1, 1995 and December 31, 1994,
and the results of its operations and changes in stockholders' equity
and cash flows for the nine months ended October 1, 1995 and October
2, 1994.
The results disclosed in the Consolidated Statement of Income for the
nine months ended October 1, 1995 are not necessarily indicative of
the results to be expected for the full year.
INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
(In thousands) OCTOBER 1, DECEMBER 31,
1995 1994
---------- ------------
(UNAUDITED)
<S> <C> <C>
Raw materials.................................... $ 4,299 $ 2,476
Work-in-process.................................. 3,766 1,604
Finished goods................................... 973 359
-------- --------
$ 9,038 $ 4,439
======== ========
</TABLE>
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consist of the following:
<TABLE>
<CAPTION>
(In thousands) OCTOBER 1, DECEMBER 31,
1995 1994
---------- ------------
(UNAUDITED)
<S> <C> <C>
Land............................................. $ 1,500 $ 800
Building......................................... 12,613 7,836
Building improvements............................ 1,397 1,107
Computer hardware and software................... 8,279 8,772
Furniture and fixtures........................... 1,408 1,298
Leasehold improvements........................... 258 250
-------- --------
25,455 20,063
Less: accumulated depreciation and amortization.. (4,543) (5,560)
-------- --------
$ 20,912 $ 14,503
======== ========
</TABLE>
5
<PAGE> 8
COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NET INCOME/(LOSS) PER SHARE
Net income per share is calculated based on the weighted average number of
common and dilutive common equivalent shares outstanding during the period.
Primary and fully diluted net income per share are not materially different for
each of the periods presented. Dilutive common equivalent shares consist of
stock options, calculated using the treasury stock method. Net loss per share is
calculated based on the weighted average number of common shares outstanding
during the period. Common equivalent shares of 1,946,397 have not been included
in the loss period, as such amounts would be antidilutive.
ACQUISITION OF ACUMEN, INC.
On July 21, 1995, the Company acquired all of the outstanding shares of Acumen,
Inc., a privately-held developer of machine vision systems for semiconductor
wafer identification. The purchase price of $14 million includes $8.5 million in
cash, 96,140 shares of Cognex stock valued at $4.2 million, and stock options
valued at $1.3 million. The acquisition is accounted for under the purchase
method of accounting. Accordingly, Acumen's results of operations have been
included in the Company's consolidated results of operations since the date of
acquisition.
The purchase price was allocated among the identifiable assets of Acumen. After
allocating the purchase price to the net tangible assets and to deferred
compensation costs, which are amortized over eight years, acquired technology
was valued using a risk-adjusted cash flow model, under which future cash flows
were discounted taking into account risks related to existing markets, the
technology's life expectancy, future target markets and potential changes
thereto, and the competitive outlook for the technology. This analysis resulted
in an allocation of $2.4 million to completed technology, to be amortized over
five years, and $10.2 million to in-process technology which was charged to
expense in the third quarter ended October 1, 1995. Goodwill associated with the
purchase is being amortized over five years.
The in-process technology acquired on July 21, 1995 had not reached
technological feasibility in accordance with Statement of Financial Accounting
Standards (SFAS) No. 86, "Accounting for Costs of Computer Software to Be Sold,
Leased, or Otherwise Marketed," and had no alternative future use. Accordingly,
the in-process technology was expensed immediately.
<TABLE>
The following summarized, pro forma results of operations assume the acquisition
took place at the beginning of the respective periods and exclude the $10.2
million charge for acquired in-process technology.
<CAPTION>
(In thousands, except per share amounts) THREE MONTHS ENDED NINE MONTHS ENDED
OCTOBER 1, OCTOBER 2, OCTOBER 1, OCTOBER 2,
1995 1994 1995 1994
---------- ---------- ---------- ----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Revenue................................. $30,080 $16,994 $75,972 $45,816
Net income.............................. 9,636 4,144 23,141 10,795
Net income per share.................... .46 .22 1.11 .58
</TABLE>
6
<PAGE> 9
COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The pro forma results of operations is intended to provide information about the
continuing impact of the acquisition by showing how it might have affected
historical financial statements if it had been consummated at an earlier date.
This information is not necessarily indicative of future operations or the
actual results that would have occurred had the acquisition been consummated at
the beginning of the period presented.
7
<PAGE> 10
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
Revenue for the three-month and nine-month periods ended October 1, 1995
increased 80% and 64% to $29,784,000 and $72,943,000, respectively, over the
comparable periods in 1994. Contributing to the revenue increase, each of the
Company's major geographic areas, the United States, Japan, and Europe, grew in
excess of 50% over the three-month and nine-month periods in 1994.
International revenue amounted to $17,589,000 and $42,829,000 for the
three-month and nine-month periods ended October 1, 1995 compared to $11,097,000
and $27,262,000 for the same periods in 1994, an increase of 59% and 57%,
respectively. Domestic revenue increased 122% and 76% for the three-month and
nine-month periods in 1995 over the comparable periods in 1994. The increase in
worldwide revenue is due primarily to the growth in sales to existing customers,
that is, those customers that have been with the Company for three or more
years. Sales to existing customers represented 78% and 81% of revenue for the
three-month and nine-month periods in 1995 and increased 66% and 60%,
respectively, over the comparable periods in 1994.
The combined sales of the Cognex 2000 and 3000 Series vision systems
increased $2,134,000 and $4,230,000, yet decreased as a percentage of revenue to
23% for the three-month and nine-month periods ended October 1, 1995 from 28%
for the comparable periods in 1994. Sales of the Cognex 4000 Series vision
system increased $3,085,000 and $8,352,000, yet declined as a percentage of
revenue to 37% and 38% for the three-month and nine-month periods in 1995 from
47% and 44% for the comparable periods in 1994. Sales of the Cognex 5000 Series
vision system increased $4,628,000 and $9,539,000, and grew to 27% of revenue
for the three-month and nine-month periods in 1995 from 21% and 23% for the
comparable periods in 1994. The decline in sales as a percentage of revenue of
the Cognex 2000, 3000, and 4000 products and the increase in sales as a
percentage of revenue of the Cognex 5000 products is a result of the higher
revenue growth associated with newer products.
Gross margin as a percentage of revenue remained relatively consistent for
the three-month and nine-month periods ended October 1, 1995 compared to the
same periods in 1994, representing 78% of revenue for the three-month and
nine-month periods in 1995 and 77% and 78% of revenue for the comparable periods
in 1994.
Research, development and engineering expenses increased to $3,495,000 and
$9,284,000 for the three-month and nine-month periods ended October 1, 1995 from
$2,552,000 and $7,504,000 for the comparable periods in 1994. Expenses as a
percentage of revenue were 12% and 13% for the periods in 1995 compared to 15%
and 17% for the same periods in 1994. The increase in aggregate costs is due
primarily to higher personnel-related costs to support the Company's investment
in the research and development of new and existing products. The decrease in
expenses as a percentage of revenue is due to higher than anticipated revenue
growth outpacing the investment in research and development.
Selling, general and administrative expenses increased to $6,335,000 and
$17,216,000 for the three-month and nine-month periods ended October 1, 1995
from $4,334,000 and $11,791,000 for the comparable periods in 1994. Expenses as
a percentage of revenue were 21% and 24% for the periods in 1995 compared to 26%
and 27% for the same periods in 1994. The increase in aggregate costs is
primarily due to higher personnel-related costs, both domestically and
internationally, to support the Company's worldwide sales effort, in addition to
costs related to fluctuations in foreign currency exchange rates.
On July 21, 1995, the Company acquired Acumen, Inc. for approximately
$14,000,000. $10,189,000 of the purchase price was allocated to in-process
technology which was charged to expense in the third quarter of 1995 (see Notes
to Consolidated Financial Statements). This charge is not deductible for tax
purposes. The Company expects to invest considerable additional development
efforts related to the in-process technology to add or improve functionality,
increase hardware
8
<PAGE> 11
performance, and conform and integrate the technology to the Company's product
standards. These expenditures are expected to be paid out through 1996 with
anticipated funding from cash flow generated from operations and are not
expected to significantly impact the planned level of research and development
expenditures.
Interest income increased to $598,000 and $1,898,000 for the three-month
and nine-month periods ended October 1, 1995 from $343,000 and $1,074,000 for
the comparable periods in 1994. The increase in interest income is due primarily
to a larger investment base.
The Company's effective tax rate, excluding the impact of a $10,189,000
charge for acquired in-process technology which had no associated tax benefit,
was 31.8% and 30.5% for the three-month and nine-month periods ended October 1,
1995 compared to 31.0% for the same periods in 1994. The increase in the
three-month effective tax rate is primarily due to an adjustment in the third
quarter of 1995 in the year-to-date rate. The decrease in the nine-month
effective tax rate is primarily due to a reduction in state income taxes.
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital and other cash requirements during the
nine-month period ended October 1, 1995 were met through cash flow generated
from operations. Working capital at October 1, 1995 was $107,908,000, an
increase of $19,396,000 from the working capital balance at December 31, 1994.
Cash and investments increased $4,201,000 from December 31, 1994 primarily as a
result of $15,424,000 of cash generated from operations and $3,301,000 of
proceeds from the issuance of stock under stock option and stock purchase plans,
offset by the purchase for $5,300,000 in cash of an office building adjacent to
the Company's corporate headquarters and $6,346,000 in cash paid to acquire
Acumen, Inc.
At October 1, 1995, the Company had no outstanding short-term or long-term
debt. The Company has a $1,000,000 unsecured demand line of credit with a bank,
which is available through November 15, 1995. There have been no borrowings
under the line of credit. The Company intends to extend the bank line of credit
through November 15, 1996.
Capital requirements consist primarily of expenditures for computer
hardware and software equipment, along with expenditures related to the
expansion of the Company's office space to accommodate anticipated growth.
Capital expenditures in the nine-month period ended October 1, 1995 were
$8,436,000, all of which were funded out of current operations. Included in
these capital expenditures was the purchase of an 83,000 square-foot office
building adjacent to the Company's corporate headquarters for $5,300,000 in
cash. The building is occupied with tenants who have lease commitments that
extend over the next several years. The Company will oversee these lease
commitments until it is ready to take occupancy. Also in 1995, the Company began
work on a planned 50,000 square-foot addition to its headquarters building.
Future cash requirements related to the addition are anticipated to approximate
between $5,000,000 and $6,000,000 and are expected to be paid out through the
first quarter of 1997.
On July 21, 1995, the Company acquired Acumen, Inc. for approximately
$14,000,000. The purchase price includes $8,452,000 in cash, $6,346,000 of which
was paid out on the closing date, with the remaining balance to be paid out
through the year 2000.
The Company believes that the existing cash and investment balances,
together with cash generated from operations, will be sufficient to meet the
Company's working capital and capital expenditure requirements through 1995.
9
<PAGE> 12
PART II: OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
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
Exhibit 11 - Computation of Per Share Earnings
Exhibit 27 - Financial Data Schedule (electronic filing only)
(b) Reports on Form 8-K
None
10
<PAGE> 13
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.
DATE: November 13, 1995 COGNEX CORPORATION
/s/ Robert J. Shillman
--------------------------------------------
Robert J. Shillman
President, Chief Executive Officer, and
Chairman
(principal executive officer)
/s/ John J. Rogers, Jr.
--------------------------------------------
John J. Rogers, Jr.
Vice President, Chief Financial Officer,
and Treasurer
(principal financial and accounting officer)
11
<PAGE> 1
EXHIBIT 11
COGNEX CORPORATION
COMPUTATION OF PER SHARE EARNINGS
Weighted average common and common share equivalents were computed as
follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
OCTOBER 1, OCTOBER 2, OCTOBER 1, OCTOBER 2,
1995 1994 1995 1994
---------- ---------- ---------- ----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Weighted average common shares outstanding.............. 19,096,029 17,227,222 18,974,977 17,161,174
Weighted average options outstanding.................... 3,744,414 3,723,904 3,800,911 3,770,232
Shares assumed to be purchased.......................... (1,798,017) (2,532,478) (1,987,846) (2,535,173)
---------- ---------- ---------- ----------
Primary weighted average common and common share
equivalents outstanding............................... 21,042,426 18,418,648 20,788,042 18,396,233
Dilutive effect of weighted average shares.............. 1,832 242 223,938 1,055
---------- ---------- ---------- ----------
Fully diluted weighted average common and common share
equivalents outstanding............................... 21,044,258 18,418,890 21,011,980 18,397,288
========== ========== ========== ==========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FORM
10-Q OF COGNEX CORPORATION FOR THE QUARTER ENDED OCTOBER 1, 1995 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-Q.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JUL-03-1995
<PERIOD-END> OCT-01-1995
<CASH> 22,739,000
<SECURITIES> 62,957,000
<RECEIVABLES> 20,693,000
<ALLOWANCES> 689,000
<INVENTORY> 9,038,000
<CURRENT-ASSETS> 122,883,000
<PP&E> 25,455,000
<DEPRECIATION> 4,543,000
<TOTAL-ASSETS> 147,906,000
<CURRENT-LIABILITIES> 14,975,000
<BONDS> 0
<COMMON> 39,000
0
0
<OTHER-SE> 129,938,000
<TOTAL-LIABILITY-AND-EQUITY> 147,906,000
<SALES> 29,784,000
<TOTAL-REVENUES> 29,784,000
<CGS> 6,535,000
<TOTAL-COSTS> 6,535,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 3,828,000
<INCOME-TAX> 4,461,000
<INCOME-CONTINUING> (633,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (633,000)
<EPS-PRIMARY> (.03)
<EPS-DILUTED> (.03)
</TABLE>
