<PAGE> 1
===============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1997
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 0-18511
---------------------
MOSAIX, INC.
(Exact name of registrant as specified in its charter)
WASHINGTON 91-1273645
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or
organization)
6464 185TH AVE. N.E.
REDMOND, WASHINGTON 98052
(Address of principal executive offices) (Zip Code)
(425) 881-7544
(Registrant's telephone number including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
Common stock, par value $0.01 per share: 13,490,932 shares outstanding as
of July 31, 1997.
Page 1 of 16 sequentially numbered pages.
===============================================================================
<PAGE> 2
MOSAIX, INC. AND SUBSIDIARIES
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997
TABLE OF CONTENTS
---------------------
<TABLE>
<CAPTION>
PART I: FINANCIAL INFORMATION PAGE NO.
--------
<S> <C> <C>
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations 8
Item 3. Quantitative and Qualitative Disclosure about Market Risk 12
PART II: OTHER INFORMATION
Item 1. Legal Proceedings 13
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 14
</TABLE>
<PAGE> 3
PART 1:
ITEM 1. FINANCIAL STATEMENTS
MOSAIX, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS) JUNE 30, 1997 DEC 31, 1996
- -------------------------------------------------------------------------------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents and short-term investments $47,851 $42,809
Trade accounts receivable, net 28,189 29,566
Inventories 2,489 2,814
Current installments of contracts receivable, net 1,610 1,764
Other current assets 4,191 5,837
------- -------
Total current assets 84,330 82,790
Furniture, equipment and leasehold improvements, net 7,300 7,393
Contracts receivable, less current installments 464 670
Capitalized software costs, net 1,433 1,993
Other assets 848 1,422
------- -------
Total assets $94,375 $94,268
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term obligations $ 983 $ 934
Accounts payable 3,206 5,064
Accrued compensation 6,547 6,614
Other accrued expenses 8,984 9,755
Customer deposits and unearned revenue 9,603 13,619
------- -------
Total current liabilities 29,323 35,986
Other long-term liabilities 407 939
------- -------
Total liabilities 29,730 36,925
------- -------
Shareholders' equity 64,645 57,343
------- -------
Total liabilities and shareholders' equity $94,375 $94,268
======= =======
</TABLE>
See accompanying notes to the condensed consolidated financial statements.
Page 3
<PAGE> 4
MOSAIX, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA) THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
- -------------------------------------------------------------------------------------------------------------
1997 1996 1997 1996
(UNAUDITED)
<S> <C> <C> <C> <C>
Revenue:
Systems sales $11,815 $13,527 $24,979 $25,562
Software licenses 8,075 4,947 13,595 9,486
Service and miscellaneous 11,784 10,111 23,714 20,534
------- ------- ------- -------
31,674 28,585 62,288 55,582
------- ------- ------- -------
Cost of Revenues:
Cost of systems 4,635 4,388 9,329 9,379
Cost of software licenses 657 220 1,258 659
Cost of service and miscellaneous 5,995 5,279 12,071 9,815
------- ------- ------- -------
11,287 9,887 22,658 19,853
------- ------- ------- -------
Gross profit 20,387 18,698 39,630 35,729
------- ------- ------- -------
Operating expenses:
Selling, general and administrative 12,062 10,906 24,049 21,205
Research and development 3,913 4,223 7,569 7,772
Write-off of capitalized software costs -- -- -- 705
Purchase of in-process research and development -- -- -- 4,307
------- ------- ------- -------
Total operating expenses 15,975 15,129 31,618 33,989
------- ------- ------- -------
Operating income 4,412 3,569 8,012 1,740
Other income, net 515 372 957 794
------- ------- ------- -------
Earnings before income taxes 4,927 3,941 8,969 2,534
Income tax expense 1,591 1,298 2,715 2,304
------- ------- ------- -------
Net earnings $ 3,336 $ 2,643 $ 6,254 $ 230
======= ======= ======= =======
Net earnings per share $ 0.24 $ 0.19 $ 0.45 $ 0.02
======= ======= ======= =======
Weighted average common shares and common
equivalent shares outstanding 13,930 13,754 13,835 13,156
</TABLE>
See accompanying notes to the condensed consolidated financial statements.
Page 4
<PAGE> 5
MOSAIX, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS) SIX MONTHS ENDED JUNE 30,
- -------------------------------------------------------------------------------------------------
1997 1996
(UNAUDITED)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 6,254 $ 230
Depreciation and amortization 3,192 4,041
Trade and other accounts receivable 1,226 3,528
Other assets 2,382 (289)
Accounts payable and accrued liabilities (1,337) 308
Unearned revenue and customer deposits (4,269) (8,146)
-------- --------
Net cash provided by (used in) operating activities 7,448 (328)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of short-term investments (19,958) (22,779)
Proceeds from maturities of short-term investments 19,409 24,679
Purchases of furniture, equipment, and leasehold improvements (2,228) (2,289)
Increase in capitalized software costs (255) (641)
Other (272) (396)
-------- --------
Net cash used in investing activities (3,304) (1,426)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of long-term obligations (518) (648)
Other 248 --
Proceeds from issuance of preferred and common stock 674 2,596
-------- --------
Net cash provided by financing activities 404 1,948
-------- --------
Effect of exchange rate changes on cash (54) 47
-------- --------
Increase in cash and cash equivalents 4,494 241
Cash and cash equivalents, beginning of period 10,984 7,746
-------- --------
Cash and cash equivalents, end of period 15,478 7,987
Short-term investments 32,373 30,948
-------- --------
Cash and cash equivalents and short-term investments
at end of period $ 47,851 $ 38,935
======== ========
</TABLE>
See accompanying notes to the condensed consolidated financial statements.
Page 5
<PAGE> 6
MOSAIX, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements include
the accounts of Mosaix, Inc. and its wholly owned subsidiaries,
collectively referred to as the "Company". The unaudited interim
condensed consolidated financial statements and related notes thereto
have been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission. Accordingly, certain information
and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles
have been omitted pursuant to such rules and regulations. The
accompanying condensed consolidated financial statements and related
notes thereto should be read in conjunction with the audited
consolidated financial statements and notes thereto included in the
Company's annual report on Form 10-K for the year ended December 31,
1996.
The information furnished reflects, in the opinion of management, all
adjustments, consisting of only normal recurring items, necessary for a
fair presentation of the results for the interim periods presented.
Interim results are not necessarily indicative of results for a full
year.
2. NET EARNINGS PER SHARE
Net earnings per share is computed using the weighted average number of
common shares outstanding plus dilutive common equivalent shares
outstanding during the period using the treasury stock method. Common
equivalent shares consist of employee stock options, common stock
warrants and convertible preferred stock. The dilutive effect of
convertible preferred stock is calculated on an "as-if-converted"
basis. Fully diluted earnings per share were not materially different
from primary earnings per share.
3. NEW ACCOUNTING STANDARD
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, Earnings Per Share
(Statement 128). This statement establishes standards for the
computation, presentation, and disclosure of earnings per share (EPS),
replacing the presentation of currently required Primary EPS with a
presentation of Basic EPS. It also requires dual presentation of Basic
EPS and Diluted EPS on the face of the income statement for entities
with complex capital structures. Basic EPS, unlike Primary EPS,
excludes all dilution while Diluted EPS, like the current Fully Diluted
EPS, reflects the potential dilution that could occur from the exercise
or conversion of securities into common stock or from other contracts
to issue common stock. Statement 128 is effective for financial
statements for periods ending after December 15, 1997, including
interim periods, and earlier application is not permitted. When
adopted, the Company will be required to restate its EPS data for all
prior periods presented. The Company does not expect the adoption of
this statement to have a material impact on the previously reported EPS
amounts.
Page 6
<PAGE> 7
4. RECLASSIFICATIONS
Certain reclassifications have been made to the prior period financial
statements to conform with the current period presentation.
As stated in the Company's annual report on form 10-K, the Company
completed a merger with ViewStar Corporation in December of 1996. This
merger was accounted for as a pooling-of-interests and, as such, all
previous periods have been restated to reflect the operations of the
combined companies; including the three and six month periods ended
June 30, 1996 presented herein.
Page 7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1997 AND 1996
REVENUE
Revenue for the second quarter of 1997 was $31.7 million, an 11%
increase from $28.6 million reported in the comparable quarter of the
prior year. Systems sales were $11.8 million a decline of 13% compared
to $13.5 million in the second quarter of 1996 due to several large
orders which did not close within the quarter. As discussed in the
Company's Annual Report on Form 10-K for 1996 the Company may from time
to time experience quarterly fluctuations in the recognition of revenue
caused by the timing of when customers are ready to accept delivery and
begin the installation process.
Software license revenue was $8.1 million, an increase of 63% compared
to $4.9 million in 1996. Software license revenue accounted for 25% of
total revenue, up from 17% in the second quarter of 1996. The increase
included: extraordinary expansion of revenue from one customer, which
accounted for 10% of total revenue, and which the Company does not
expect to continue into the third quarter, the first sale of Mosaix's
Enterprise Customer Management (ECM) solution that integrates call
center and workflow management software, and higher than usual license
fees from system integration partners. The Company's objective is to
grow software licenses revenue at a faster rate than overall revenue.
The Company does not, however, expect software license revenue in the
third quarter to match second quarter results.
Service and miscellaneous revenue was $11.8 million, an increase of 17%
from $10.1 million in the second quarter of 1996. International revenue
increased to $9.0 million in the second quarter of 1997 from $5.5
million in the comparable quarter for 1996 due to increased product
sales in the United Kingdom.
The Company had one customer that accounted for 10% of the total
revenue for the quarter. The revenue from this customer is comprised of
software license revenue, as well as service and miscellaneous revenue
and is included in international revenue.
GROSS MARGIN
Total gross margin remained constant at approximately 64% of revenue in
the second quarter of 1997, as compared to the same period in the prior
year. Systems gross margin, however, decreased to 61%, compared to 68%
in the same period of the prior year. This decrease was primarily due
to an unusually high proportion of large, complex and high-margin
systems sold in the prior year. Gross margin for software licenses
declined to 92% from 96% a year ago mainly due to a higher mix of
products with third party fees. The gross margin for service and
miscellaneous increased to 49% compared to 48% in the comparable period
of the prior year.
Page 8
<PAGE> 9
SELLING, GENERAL AND ADMINISTRATIVE
Selling, general and administrative expenses were $12.0 million in the
second quarter of 1997, compared to $10.9 million in the comparable
period of the prior year, remaining at 38% of revenue. The increase in
expense is primarily due to growth in the sales force and increased
marketing costs.
During the third quarter of 1997, the Company expects to incur a one
time charge of approximately $750,000, primarily consisting of
severance costs relating to the consolidation of the Company's sales,
support and service operations. Once the consolidation is fully
implemented, the Company anticipates annual operating expense savings
of approximately $750,000 to $1.0 million.
RESEARCH AND DEVELOPMENT
Research and development expense, net of amounts capitalized as
software development costs, was $3.9 million or 12% of revenue in the
second quarter of 1997, compared to $4.2 million or 15% of revenue in
the comparable quarter of the prior year. The decrease in expense is
due primarily to lower depreciation charges in the current quarter and
higher than normal third party software development fees in 1996
related to a special project.
During the second quarter of 1997, the Company did not capitalize a
significant amount of software development costs compared to $0.3
million in the second quarter of 1996. Capitalized software costs
continue to decrease. As of June 30, 1997, the net balance was $1.4
million, down from to $2.4 million at June 30, 1996.
The Company remains committed to the ongoing development of new
products and improvements to existing products as a key source of
future revenue. The Company expects to invest approximately 12-14% of
revenue in research and development.
OTHER INCOME, NET
Other income, net is comprised primarily of interest income and
increased to $0.5 million in the second quarter of 1997 compared with
$0.4 million for the same period of the prior year.
INCOME TAXES
The effective tax rate for the second quarter of 1997 was 32% compared
to the statutory rate of 34%. The lower rate is primarily due to the
combined Company's use of ViewStar net operating loss carryforwards,
thereby reducing taxable income. The utilization of net operating loss
carryforwards and other tax credit carryforwards are restricted by the
Internal Revenue Code. The Company therefore, is limited each quarter
in the amount of net operating loss carryfowards that may be utilized.
SIX MONTHS ENDED JUNE 30, 1997 AND 1996
REVENUE
Revenue for the first six months of 1997 was $62.3 million, an increase
of 12% from $55.6 million reported in the comparable period of the
prior year. Systems sales were $25.0 million in 1997, down 2% from
$25.6 million in 1996 primarily due to the decrease in the second
quarter discussed earlier. Software license revenue was $13.6 million,
an increase of 43% compared to $9.5 million in 1996. The increase
included: extraordinary expansion
Page 9
<PAGE> 10
of revenue from one customer, which accounted for 10% of total revenue
for the six months, and which the Company does not expect to continue
into the third quarter, and higher than usual license fees from system
integration partners in the second quarter. Service and miscellaneous
revenue increased by $3.2 million, or 15%, to $23.7 million in 1997
from $20.5 million in 1996. International revenue increased to $16.1
million in 1997 from $10.0 million in the comparable period for 1996
due to increased product sales in the United Kingdom.
GROSS MARGIN
Total gross margin was 64% of revenue for the first six months of 1997,
approximately the same as the comparable period in the prior year.
Systems gross margin remained at 63% for the first six months of 1997
and 1996. Software license gross margin declined slightly to 91% from
93% a year ago due to a higher mix of lower margin product sales with
third party license fees. Service and miscellaneous gross margin
declined to 49% compared to 52% in the comparable period of the prior
year. This decline was primarily due to a decrease in consulting
margins on certain projects and increased customer support staffing
which began in the second quarter of 1996 as part of the Company's plan
to improve customer service. The Company intends to continue to invest
in improving customer service as management believes superior customer
service is one of the key differentiators in vendor preference.
During the first quarter of 1997, the Company completed the outsourcing
of all manufacturing activities. The Company now uses a third party
vendor for assembly of systems. The Company will continue to maintain
an inventory of certain components and finished goods.
SELLING, GENERAL AND ADMINISTRATIVE
Selling, general and administrative expenses were $24.0 million or 39%
of revenue in the first six months of 1997, compared to $21.2 million
or 38% of revenue in the comparable period of the prior year. This
increase is primarily due to growth in the sales force and increased
marketing costs.
RESEARCH AND DEVELOPMENT
Research and development expense, net of amounts capitalized as
software development costs, was $7.6 million or 12% of revenue in the
first six months of 1997, compared to $7.8 million or 14% of revenue in
the comparable period of the prior year. The decrease in expense is due
primarily to lower depreciation charges in the current year and higher
than normal third party software development fees in the second quarter
of 1996 related to a special project. Software costs capitalized as a
percent of spending were 3% or $0.2 million in the first six months of
1997 compared to 8% or $0.7 million in the comparable period of 1996.
ONE TIME CHARGES
In February 1996, the Company acquired Caleo Software, Inc. and
expensed $4.3 million of in-process research and development costs
associated with the acquisition. In addition, the Company wrote-off
$0.7 million of previously capitalized software costs in the first
quarter of 1996 due to rapidly changing technology. Excluding one time
charges, net income in the six months ended June 30, 1996 would have
been $5.0 million, or $0.38 per share.
Page 10
<PAGE> 11
OTHER INCOME, NET
Other income, net consists primarily of interest income which increased
to $1.0 million in the first six months of 1997 from $0.8 million in
the comparable period in 1996.
INCOME TAXES
The effective tax rate for the six months ended June 30, 1997 was 30%
compared to the statutory rate of 34%. The lower rate is primarily due
to the combined Company's use of ViewStar net operating loss
carryforwards to reduce taxable income. The utilization of net
operating loss carryforwards and other tax credit carryforwards are
restricted by the Internal Revenue Code. The Company therefore, is
limited each quarter in the amount of net operating loss carryfowards
that may be utilized.
FINANCIAL CONDITION
LIQUIDITY & CAPITAL RESOURCES
The Company's combined cash and cash equivalents and short-term
investments were $47.9 million at June 30, 1997 versus $42.8 million at
December 31, 1996. The short-term investment portfolio is invested in
municipal securities, corporate notes and bonds, and commercial paper,
and is diversified among security types and issuers. The portfolio does
not include any derivative products. At June 30, 1997, the Company's
working capital was $55.0 million compared to $46.8 million at December
31, 1996.
During the first six months of 1997, the Company generated $7.4 million
in cash from operations compared to a $0.3 million use of cash in the
comparable period of 1996. The use of cash from operating activities in
1996 was due primarily to the purchase of Caleo Software, Inc. for $4.8
million in February 1996, as well as a decrease in customer deposits.
In addition to its cash and short term investment balances, the Company
has available a $10 million domestic line of credit to meet cash flow
needs. Management believes that existing cash and short-term
investments and cash flow from operations, together with its available
credit line, will continue to be sufficient to meet ongoing operating
requirements as well as the Company's planned future investments in
capital additions and research and development activities. In
connection with research and development and market expansion, cash may
be used to acquire technology or to fund strategic ventures.
On July 16, 1997, the Board of Directors authorized, subject to certain
terms and conditions, the repurchase of up to 1,700,000 shares of
common stock. The shares repurchased may be used to service the
Company's employee benefit plans and for other general corporate
purposes.
The Company does not currently hedge against changes in foreign
currency exchange rates. The majority of the Company's sales are
denominated in US dollars with customers assuming foreign currency
exchange rate risks. The Company's United Kingdom subsidiaries' sales
are denominated in British Pounds. As of June 30, 1997 outstanding
receivables at the UK subsidiaries totaled $3.5 million dollars or 12%
of total accounts receivable.
Page 11
<PAGE> 12
FORWARD LOOKING STATEMENTS-RISK FACTORS REGARDING FUTURE PERFORMANCE
Certain statements in this Form 10-Q contain "forward-looking"
information (as defined in the Private Securities Litigation Reform Act
of 1995) that involve risks and uncertainties, which may cause the
actual results, performance or achievements of the Company or industry
results to be significantly different from any future results,
performance or achievement expressed or implied by such forward-looking
information. Such risks and uncertainties include among other things:
uncertainties relating to the integration of ViewStar operations,
fluctuations in operating results, seasonality, lengthy sales and
implementation cycle, complex service requirements, competition,
technological change and new products, limited source of supply,
dependence on Windows NT and other core Microsoft technologies, lack of
product revenue diversification, international sales, dependence on
proprietary rights, infringement claims, uncertainty of obtaining
licenses, risk of product defects, and governmental regulation.
Reference is made to the Company's Annual Report on Form 10-K for the
year ended December 31, 1996 filed with the SEC on March 12, 1997 for a
more detailed description of such risks and uncertainties.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.
Not applicable.
Page 12
<PAGE> 13
PART II: OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS.
Mosaix is subject to various legal proceedings that arise in
the ordinary course of its business. While the outcome of
these proceedings cannot be predicted with certainty, the
Company believes that none of such proceedings, individually
or in the aggregate will have a material adverse effect on the
Company's business or financial condition.
Item 2. CHANGES IN SECURITIES
None
Item 3. DEFAULTS UPON SENIOR SECURITIES
None
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The following three items were submitted to the shareholders
during the annual meeting of shareholders held April 22, 1997.
The following nominees for election as Directors were elected:
<TABLE>
<CAPTION>
NOMINEE FOR WITHHELD
------- --- --------
<S> <C> <C>
H. Robert Gill 10,519,221 50,513
Umang Gupta 10,521,146 48,588
Kamran Kheirlolmoom 10,519,570 50,164
</TABLE>
The proposal to approve the amendment to the 1991 Employee
Stock Purchase Plan allowing participation by employees of
foreign owned subsidiaries received the following votes:
<TABLE>
<S> <C>
For 10,358,440
Against 49,112
Abstain 63,083
</TABLE>
The proposal to ratify KPMG Peat Marwick LLP as independent
auditors for the Company received the following votes:
<TABLE>
<S> <C>
For 10,537,254
Against 5,834
Abstain 26,646
</TABLE>
Item 5. OTHER INFORMATION
None
Page 13
<PAGE> 14
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 11. Computation of Earnings Per Share is on page 15
(b) Reports on Form 8-K.
None
Page 14
<PAGE> 15
MOSAIX, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
EXHIBIT 11: COMPUTATION OF EARNINGS PER SHARE
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
(IN THOUSANDS, EXCEPT PER SHARE DATA) 1997 1996 1997 1996
- --------------------------------------------------------------------------------------------------------
(UNAUDITED)
<S> <C> <C> <C> <C>
Weighted average number of common shares outstanding 13,349 12,750 13,302 12,218
Dilutive common equivalent shares from outstanding
stock options using the treasury stock method 581 1,004 533 938
------- ------- ------- -------
Weighted average common shares and common
share equivalents outstanding 13,930 13,754 13,835 13,156
======= ======= ======= =======
Net earnings $ 3,336 $ 2,643 $ 6,254 $ 230
======= ======= ======= =======
Net earnings per share $ 0.24 $ 0.19 $ 0.45 $ 0.02
======= ======= ======= =======
</TABLE>
Page 15
<PAGE> 16
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
MOSAIX, INC.
(Registrant)
DATE: August 13, 1997 BY: /s/ John J. Flavio
---------------------------
John J. Flavio
Chief Financial Officer
(Principal Financial Officer)
Page 16
<PAGE> 17
EXHIBIT INDEX
Exhibits
- --------
27. Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> APR-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 15,478
<SECURITIES> 32,373
<RECEIVABLES> 29,775
<ALLOWANCES> 1,586
<INVENTORY> 2,489
<CURRENT-ASSETS> 84,330
<PP&E> 29,237
<DEPRECIATION> 21,937
<TOTAL-ASSETS> 94,375
<CURRENT-LIABILITIES> 29,323
<BONDS> 0
0
0
<COMMON> 133
<OTHER-SE> 64,512
<TOTAL-LIABILITY-AND-EQUITY> 94,375
<SALES> 19,890
<TOTAL-REVENUES> 31,674
<CGS> 5,292
<TOTAL-COSTS> 11,287
<OTHER-EXPENSES> 15,975
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 4,412
<INCOME-TAX> 1,591
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,336
<EPS-PRIMARY> 0.24
<EPS-DILUTED> 0
</TABLE>
