<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 APRIL 4, 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 0-17869
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 May 2, 1999, there were 40,723,415 shares of Common Stock, $.002 par
value, of the registrant outstanding.
Total number of pages: 13
Exhibit index is located on page 12
================================================================================
<PAGE> 2
INDEX
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Income for the three months ended
April 4, 1999 and April 5, 1998
Consolidated Balance Sheets at April 4, 1999 and December 31,
1998
Consolidated Statement of Stockholders' Equity for the three
months ended April 4, 1999
Consolidated Statements of Cash Flows for the three months ended
April 4, 1999 and April 5, 1998
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
APRIL 4, APRIL 5,
1999 1998
---------- ----------
(UNAUDITED)
<S> <C> <C>
Revenue...................................................................... $ 27,485 $ 40,056
Cost of revenue.............................................................. 8,728 10,927
---------- ----------
Gross margin................................................................. 18,757 29,129
Research, development, and engineering expenses.............................. 6,534 6,305
Selling, general, and administrative expenses................................ 9,768 9,869
---------- ----------
Income from operations....................................................... 2,455 12,955
Investment income............................................................ 1,578 1,728
Other income................................................................. 161 165
---------- ----------
Income before income taxes................................................... 4,194 14,848
Income tax provision......................................................... 1,090 4,306
---------- ----------
Net income................................................................... 3,104 10,542
========== ==========
Net income per share:
Basic.................................................................... $ .08 $ .25
========== ==========
Diluted.................................................................. $ .07 $ .24
========== ==========
Weighted-average common and common equivalent shares outstanding:
Basic.................................................................... 40,307 41,800
========== ==========
Diluted.................................................................. 43,371 44,435
========== ==========
</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>
APRIL 4, DECEMBER 31,
1999 1998
--------- ------------
ASSETS (UNAUDITED)
<S> <C> <C>
Current assets:
Cash and investments.................................................... $172,531 $158,458
Accounts receivable, less reserves of $2,495 and $2,583 in 1999 and
1998, respectively................................................... 14,553 20,987
Revenue in excess of billings........................................... 3,168 4,945
Inventories............................................................. 12,189 10,812
Deferred income taxes................................................... 3,936 3,936
Prepaid expenses and other.............................................. 8,529 8,141
-------- --------
Total current assets................................................ 214,906 207,279
Property, plant, and equipment, net........................................ 33,313 34,255
Deferred income taxes...................................................... 2,282 2,237
Other assets............................................................... 4,420 4,157
-------- --------
$254,921 $247,928
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable........................................................ $ 3,516 $ 2,488
Accrued expenses........................................................ 12,260 11,653
Accrued income taxes.................................................... 675 916
Customer deposits....................................................... 4,786 4,894
Deferred revenue........................................................ 3,294 2,965
-------- --------
Total current liabilities........................................... 24,531 22,916
-------- --------
Other liabilities.......................................................... 2,123 2,137
Stockholders' equity:
Common stock, $.002 par value -
Authorized: 120,000,000 shares, issued: 42,755,178 and 42,453,980
shares in 1999 and 1998, respectively................................ 85 85
Additional paid-in capital............................................. 99,952 97,531
Treasury stock, at cost, 2,310,894 and 2,307,140 shares in 1999 and
1998, respectively................................................... (41,427) (41,353)
Retained earnings...................................................... 169,675 166,571
Accumulated other comprehensive income (loss).......................... (18) 41
-------- --------
Total stockholders' equity......................................... 228,267 222,875
-------- --------
$254,921 $247,928
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
2
<PAGE> 5
COGNEX CORPORATION
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL TREASURY STOCK
--------------------- PAID-IN ------------------- RETAINED
SHARES PAR VALUE CAPITAL SHARES COST EARNINGS
------ --------- ---------- ------ ---- --------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1998............. 42,453,980 $ 85 $ 97,531 2,307,140 $(41,353) $166,571
Issuance of common stock under stock
option plans...................... 301,198 2,121
Tax benefit from exercise of
stock options..................... 300
Common stock received for payment
of stock option exercises......... 3,754 (74)
Comprehensive income:
Net income.................... 3,104
Translation adjustment........
Comprehensive income..........
--------- --------- ---------- --------- -------- --------
Balance at April 4, 1999 (unaudited)..... 42,755,178 $ 85 $ 99,952 2,310,894 $(41,427) $169,675
========== ========= ========== ========= ======== ========
ACCUMULATED
OTHER TOTAL
COMPREHENSIVE COMPREHENSIVE STOCKHOLDERS'
INCOME INCOME EQUITY
------------- ------------- -------------
<S> <C> <C> <C>
Balance at December 31, 1998............. $ 41 $ 222,875
Issuance of common stock under stock
option plans...................... 2,121
Tax benefit from exercise of
stock options..................... 300
Common stock received for payment
of stock option exercises......... (74)
Comprehensive income:
Net income.................... $ 3,104 3,104
Translation adjustment........ (59) (59) (59)
-------------
Comprehensive income.......... $ 3,045
------------- ============= -------------
Balance at April 4, 1999 (unaudited)..... $ (18) $ 228,267
============= =============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE> 6
COGNEX CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
APRIL 4, APRIL 5,
1999 1998
-------- --------
(UNAUDITED)
<S> <C> <C>
Cash flows from operating activities:
Net income.............................................................. $ 3,104 $ 10,542
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization......................................... 2,256 2,196
Tax benefit from exercise of stock options............................ 300 338
Deferred income tax provision (benefit)............................... (45) (202)
Change in other current assets and current liabilities................ 8,115 (6,637)
Other................................................................. (146) (842)
-------- --------
Net cash provided by operating activities............................... 13,584 5,395
-------- --------
Cash flows from investing activities:
Purchase of investments................................................. (28,412) (19,394)
Maturity of investments................................................. 19,409 14,307
Purchase of property, plant, and equipment.............................. (717) (2,006)
Cash paid for technology acquisitions and equity investments............ (789) (432)
-------- --------
Net cash used in investing activities................................... (10,509) (7,525)
-------- --------
Cash flows from financing activities:
Issuance of common stock under stock option plans....................... 2,047 505
-------- --------
Net cash provided by financing activities............................... 2,047 505
-------- --------
Effect of exchange rate changes on cash...................................... 351 177
-------- --------
Net increase (decrease) in cash and cash equivalents......................... 5,473 (1,448)
Cash and cash equivalents at beginning of period............................. 27,807 38,198
-------- --------
Cash and cash equivalents at end of period................................... 33,280 36,750
Investments.................................................................. 139,251 144,464
-------- --------
Cash and investments......................................................... $172,531 $181,214
======== ========
</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 consolidated financial
statements and related notes included in the Company's Annual Report on
Form 10-K for the year ended December 31, 1998.
In the opinion of the management of Cognex Corporation, the accompanying
consolidated unaudited financial statements contain all adjustments
(consisting of only normal, recurring adjustments) necessary to present
fairly the Company's financial position at April 4, 1999, and the results
of operations and changes in stockholders' equity and cash flows for the
three months then ended.
The results disclosed in the Consolidated Statements of Income for the
three months ended April 4, 1999 are not necessarily indicative of the
results to be expected for the full year.
Certain amounts reported in prior periods have been reclassified to be
consistent with the current period's presentation.
<TABLE>
<CAPTION>
INVENTORIES
Inventories consist of the following:
(In thousands) APRIL 4, DECEMBER 31,
1999 1998
-------- ------------
<S> <C> <C>
Raw materials............................................................. $ 5,432 $ 6,195
Work-in-process........................................................... 1,157 1,262
Finished goods............................................................ 5,600 3,355
-------- ------------
$ 12,189 $ 10,812
======== ============
</TABLE>
5
<PAGE> 8
COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
NET INCOME PER SHARE
- - - - - - - - - - - - - --------------------
Net income per share is calculated as follows:
(In thousands) THREE MONTHS ENDED
APRIL 4, APRIL 5,
1999 1998
-------- --------
<S> <C> <C>
Net income............................................................... $ 3,104 $ 10,542
======== ========
BASIC:
Weighted-average common shares outstanding............................. 40,307 41,800
======== ========
Net income per common share............................................ $ .08 $ .25
======== ========
DILUTED:
Weighted-average common shares outstanding............................. 40,307 41,800
Effect of dilutive securities:
Stock options....................................................... 3,064 2,635
-------- --------
Weighted-average common and common equivalent shares outstanding....... 43,371 44,435
======== ========
Net income per common and common equivalent share...................... $ .07 $ .24
======== ========
</TABLE>
6
<PAGE> 9
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
Revenue for the first quarter of 1999 decreased 31% to $27,485,000 from
$40,056,000 for the first quarter of 1998. As compared to the first quarter
of 1998, the Company's results were negatively impacted by the worldwide
slowdown in capital spending by manufacturers in the semiconductor and
electronics industries that has affected the Company's business over the
past year. The decrease in revenue of $12,571,000 from the first quarter in
1998 is due primarily to decreased volume from the Company's OEM customers,
most of whom make capital equipment used by manufacturers in the
semiconductor and electronics industries. Sales to OEM customers decreased
$11,641,000, or 45%, from the first quarter of 1998.
Revenue for the first quarter of 1999 increased, however, 10% from the
fourth quarter of 1998. The increase in revenue of $2,392,000 from the
prior quarter is primarily due to increased volume from the Company's OEM
customers, which increased $1,780,000, or 15%. Sales to end-user customers
increased by $612,000, or 5%, from the fourth quarter of 1998 and
represented 49% of total revenue.
Due to the sequential improvement in revenue from the fourth quarter of
1998, as well as an increase in demand from both OEM and end-user
customers, the Company believes that it has reached the bottom of the
recent semiconductor and electronics industry cycle. The Company now
expects growing revenue by more than 15% for 1999 over 1998.
Gross margin as a percentage of revenue for the first quarter of 1999 was
68% compared to 73% for the first quarter in 1998. The decrease in gross
margin as a percentage of revenue is due primarily to the lower product
revenue in 1999. As a result, service revenue, which has a lower gross
margin than product revenue, increased as a percentage of total revenue in
1999 and lowered the overall gross margin. Gross margin as a percentage of
revenue is expected to increase slightly for the remainder of 1999 due to
the anticipated revenue growth.
Research, development, and engineering expenses for the first quarter of
1999 increased 4% to $6,534,000 from $6,305,000 for the first quarter of
1998. The increase in aggregate expenses is due primarily to higher
personnel-related costs to support the Company's continued investment in
the development of new and existing products. Expenses as a percentage of
revenue were 24% for the first quarter of 1999 compared to 16% for the
first quarter of 1998. The increase in expenses as a percentage of revenue
is due primarily to the lower revenue base in 1999. The Company anticipates
that aggregate expenses will increase moderately for the remainder of 1999
due to planned investment in product development. However, the level of
expenses as a percentage of revenue over the next few quarters is
anticipated to decline, as revenue is expected to increase at a greater
rate than aggregate expenses.
Selling, general, and administrative expenses for the first quarter of 1999
decreased 1% to $9,768,000 from $9,869,000 for the first quarter in 1998.
The decrease in aggregate expenses is due primarily to costs associated
with the implementation of new computer information systems in the first
quarter of 1998, partially offset in 1999 by higher personnel-related costs
to support the Company's expanding worldwide operations. Expenses as a
percentage of revenue were 36% for the first quarter of 1999 compared to
25% for the first quarter in 1998. The increase in expenses as a percentage
of revenue is due primarily to the lower revenue base in 1999. The Company
anticipates that aggregate expenses will increase moderately for the
remainder of 1999 due to additional resources required to support the
higher level of demand. However, the level of expenses as a percentage of
revenue over the next few quarters is anticipated to decline, as revenue is
expected to increase at a greater rate than aggregate expenses.
7
<PAGE> 10
RESULTS OF OPERATIONS, CONTINUED
Investment income for the first quarter of 1999 decreased 9% to $1,578,000
from $1,728,000 for the first quarter in 1998. The decrease in investment
income is due primarily to a lower average invested cash balance in 1999.
The Company's effective tax rate was 26% for the first quarter of 1999
compared to 29% for the first quarter of 1998. The decrease in the
effective tax rate is primarily attributable to the impact of the Company's
use of tax-free investments.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash requirements during the first quarter of 1999 were met
through cash generated from operations. Cash and investments increased
$14,073,000 from December 31, 1998 primarily as a result of $13,584,000 of
cash generated from operations and $2,047,000 of proceeds from the issuance
of common stock under stock option plans. Cash generated from operations
consists of net income, adjusted primarily for non-cash charges and changes
in current assets and current liabilities, most notably a decrease in
accounts receivable resulting from the timing of cash receipts at the end
of the first quarter of 1999. Capital expenditures for the first quarter of
1999 totaled $717,000 and consisted primarily of expenditures for computer
hardware and software.
The Company believes that its existing cash and investments balance,
together with cash generated from operations, will be sufficient to meet
the Company's planned working capital and capital expenditure requirements
through 1999.
YEAR 2000 UPDATE
The Company is aware of the potential for industry-wide business disruption
which could occur due to problems related to the "Year 2000" issue.
Management believes that it has a prudent plan in place to address this
issue within the Company and its supply chain. The components of this plan
include: an assessment of internal systems for modification and/or
replacement; communication with external vendors to determine their state
of readiness to maintain an uninterrupted supply of goods and services to
the Company; and an evaluation of products sold by the Company to customers
as to the ability of the products to work properly after the turn of the
century.
INTERNAL SYSTEMS
The Company's process for achieving Year 2000 compliance for internal
systems is as follows:
1. Develop an inventory of all internal systems
2. Determine the Year 2000 compliance status of each internal system
3. Prioritize the importance of Year 2000 compliance for each internal
system
4. Determine the method to be used to achieve compliance (modify, replace,
cease use)
5. Complete the planned action
6. Test the system
8
<PAGE> 11
YEAR 2000 UPDATE, CONTINUED
The initial inventory, compliance status, prioritization, and determination
of the method to achieve compliance has been completed for all internal
systems in use throughout the Company. The Company has identified five
internal systems that are used for business transaction processing as being
critical to the uninterrupted operation of the business. Of these five
systems, the Company's initial assessment indicated that three were Year
2000 compliant. Since the initial assessment, the Company discovered that
one of the internal systems it believed to be compliant may in fact be
non-compliant. The Company plans to have this system compliant by September
30, 1999 through either a vendor-provided upgrade or replacement. The
Company is on schedule to have the remaining two systems Year 2000
compliant by June 30, 1999 through vendor-provided upgrades. In addition,
the Company has completed an initial assessment of its technology
infrastructure (servers, networks, phone systems) and expects to have all
non-compliant items remediated, replaced, or decommissioned by June 30,
1999.
VENDORS
The Company has initiated a program to survey the Year 2000 readiness of
its major vendors. The Company has sent letters to over 250 vendors
outlining its approach towards the Year 2000 issue and asking for either
their certification that their product is Year 2000 compliant or their
commitment to resolve any issues they may have. The Company has identified
vendors it views as critical to its business. Management has defined a
critical vendor as one whose inability to continue to provide goods and
services would have a serious adverse impact on the Company's ability to
produce, deliver, and collect payment for its product. The Company has
received responses from all critical vendors outlining their plans for Year
2000 compliance.
PRODUCTS
Product testing is now complete and has confirmed that Cognex's core vision
functionality is not date sensitive or dependent on dates in any way, and
is therefore Year 2000 compliant. The Company's Year 2000 product
compliance verification methodology consisted of a review of the source
code and functional testing of the recent releases of Cognex products,
which are believed to be representative of earlier releases as well. Year
2000 compliance verification included examination of the 1999/2000 date
rollover, date sensitive functionality with the year 2000, and leap year
compliance.
COSTS
Costs incurred in the Company's Year 2000 compliance effort are expensed as
incurred and funded with cash generated from operations. These costs are
included in the normal, recurring costs incurred for product development
and systems maintenance and are not material to the Company's results of
operations, nor are they expected to be in the future.
RISKS AND CONTINGENCY PLAN
Although the Company believes it is taking prudent action related to the
identification and resolution of issues related to the Year 2000, its
assessment is still in progress. It may never be able to know with
certainty whether certain critical vendors are compliant. Failure of
critical vendors to make their computer systems Year 2000 compliant could
result in delaying deliveries of products and services to the Company. If
such delays are extensive, they could have a material adverse effect on the
Company's business.
9
<PAGE> 12
YEAR 2000 UPDATE, CONTINUED
The failure to correct a material Year 2000 problem could result in an
interruption in, or a failure of, certain normal business activities. Such
failures could materially and adversely affect the Company's results of
operations, liquidity, and financial condition. Due to the general
uncertainty inherent in the Year 2000 issue, resulting in part from the
uncertainty of the Year 2000 readiness of third-party vendors, the Company
is unable to determine at this time whether the consequences of Year 2000
failures will have a material impact on the Company's results of
operations, liquidity, or financial position. The Year 2000 compliance
project is expected to reduce, but not eliminate, the Company's level of
uncertainty about the Year 2000 issue and, in particular, about the Year
2000 compliance and readiness of its critical vendors. The Company believes
that, with the completion of the Year 2000 compliance project as scheduled,
the possibility of significant interruptions to normal operations should be
reduced.
The Company continues to evaluate the risks associated with potential Year
2000 related failures. As management better understands the risks within
the Company's unique set of internal systems, business partners, and
products, a formal contingency plan to alleviate the impact of high
potential or serious failures will be developed. The Company is in the
early stages of developing a contingency plan and anticipates having this
plan fully outlined by June 30, 1999. The components of this plan will
likely include raw material and finished goods inventory levels,
alternative vendors, and backup systems. Until the contingency plan is
completed, the Company does not possess the information necessary to
estimate the potential negative impact of Year 2000 compliance issues
related to internal systems, its vendors, its customers, or other parties.
10
<PAGE> 13
FORWARD-LOOKING STATEMENTS
Certain statements made in this report (including statements regarding the
Year 2000 issue), as well as oral statements made by the Company from time
to time, which are prefaced with words such as "expects," "anticipates,"
"believes," "projects," "intends," "plans," and similar words and other
statements of similar sense, are forward-looking statements. These
statements are based on the Company's current expectations and estimates as
to prospective events and circumstances, which may or may not be in the
Company's control and as to which there can be no firm assurances given.
These forward-looking statements, like any other forward-looking
statements, involve risks and uncertainties that could cause actual results
to differ materially from those projected or anticipated. Such risks and
uncertainties include (1) the loss of, or a significant curtailment of
purchases by, any one or more principal customers; (2) the cyclicality of
the semiconductor and electronics industries; (3) the Company's continued
ability to achieve significant international revenue; (4) capital spending
trends by manufacturing companies; (5) inability to protect the Company's
proprietary technology and intellectual property; (6) inability to attract
or retain skilled employees; (7) technological obsolescence of current
products and the inability to develop new products; (8) inability to
respond to competitive technology and pricing pressures; and (9) reliance
upon certain sole source suppliers to manufacture or deliver critical
components of the Company's products. The foregoing list should not be
construed as exhaustive and the Company disclaims any obligation to
subsequently revise forward-looking statements to reflect events or
circumstances after the date of such statements or to reflect the
occurrence of anticipated or unanticipated events. Further discussions of
risk factors are also available in the Company's registration statements
filed with the Securities and Exchange Commission. The Company wishes to
caution readers not to place undue reliance upon any such forward-looking
statements, which speak only as of the date made.
11
<PAGE> 14
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 27 - Financial Data Schedule (electronic filing only)
(b) Reports on Form 8-K
None
12
<PAGE> 15
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: May 14, 1999 COGNEX CORPORATION
/s/ Robert J. Shillman
----------------------
Robert J. Shillman
President, Chief Executive Officer,
and Chairman of the Board of
Directors (principal executive and
financial and accounting officer)
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF COGNEX CORPORATION FOR THE QUARTER ENDED
APRIL 4, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH CONSOLIDATED
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> APR-04-1999
<CASH> 33,280,000
<SECURITIES> 139,251,000
<RECEIVABLES> 17,048,000
<ALLOWANCES> 2,495,000
<INVENTORY> 12,189,000
<CURRENT-ASSETS> 214,906,000
<PP&E> 53,933,000
<DEPRECIATION> 20,620,000
<TOTAL-ASSETS> 254,921,000
<CURRENT-LIABILITIES> 24,531,000
<BONDS> 0
0
0
<COMMON> 85,000
<OTHER-SE> 228,102,000
<TOTAL-LIABILITY-AND-EQUITY> 254,921,000
<SALES> 27,485,000
<TOTAL-REVENUES> 27,485,000
<CGS> 8,728,000
<TOTAL-COSTS> 8,728,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 4,194,000
<INCOME-TAX> 1,090,000
<INCOME-CONTINUING> 3,104,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,104,000
<EPS-PRIMARY> $0.08
<EPS-DILUTED> $0.07
</TABLE>
