UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 0-18643
LUNAR CORPORATION
(Exact name of registrant as specified in its charter)
Wisconsin 3845 39-1200501
(State of (Primary Standard Industry (IRS Employer
Incorporation) Classification Code Number) Identification No.)
313 West Beltline Highway
Madison, Wisconsin 53713
608-274-2663
(Address, including zip code, and telephone number, including area code,
of Registrant's 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 April 30, 1998, 8,827,260 shares of the registrant's Common Stock, $0.01
par value, were outstanding.
LUNAR CORPORATION AND SUBSIDIARIES
FORM 10-Q
For the quarterly period ended March 31, 1998
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION Page
Item 1. Financial statements
Consolidated Balance Sheets
March 31, 1998, and June 30, 1997 . . . . . . . . . . . . . . . . . .3
Consolidated Statements of Income
Three and Nine Months Ended March 31, 1998
and 1997. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Consolidated Statements of Cash Flows
Nine Months Ended March 31, 1998
and 1997. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Notes to Consolidated Financial Statements. . . . . . . . . . . . . .7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. . . . . . . . . . . . . . . . .9
Item 3. Quantitative and Qualitative Disclosures About Market Risk. . . . . 10
PART II - OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . 11
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . 11
Item 2. Changes in Securities . . . . . . . . . . . . . . . . . . . . . . . 11
Item 3. Defaults Upon Senior Securities . . . . . . . . . . . . . . . . . . 11
Item 4. Submission of Matters to a Vote of Security Holders . . . . . . . . 11
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . 11
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . . . . 12
SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
EXHIBIT INDEX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
PART 1. FINANCIAL INFORMATION
ITEM 1. Financial Statements
LUNAR CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
- --------------------------------------------------------------------------------
Assets
- --------------------------------------------------------------------------------
March 31, June 30,
1998 1997
(Unaudited) (Audited)
- --------------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents $ 6,716,202 $14,417,155
Marketable securities 7,374,666 5,891,350
Receivable:
Trade, less allowance for doubtful accounts
of $2,684,000 at March 31, 1998
and $2,602,000 at June 30, 1997 25,528,408 25,468,881
Other 824,736 1,061,558
- --------------------------------------------------------------------------------
26,353,144 26,530,439
Inventories 13,268,441 9,373,490
Deferred Income Taxes 1,230,000 2,291,000
Other Current Assets 387,752 84,790
- --------------------------------------------------------------------------------
Total Current Assets 55,330,205 58,588,224
Property, Plant and Equipment--At Cost:
Buildings and improvements 2,310,666 2,376,763
Furniture and fixtures 811,873 680,413
Machinery and other equipment 6,214,236 5,276,267
- --------------------------------------------------------------------------------
9,336,775 8,333,443
Less Accumulated Depreciation and Amortization 4,869,676 3,889,838
- --------------------------------------------------------------------------------
4,467,099 4,443,605
Land 2,088,118 138,858
- --------------------------------------------------------------------------------
6,555,217 4,582,463
Long-term Trade Accounts Receivable 2,801,961 2,485,022
Long-term Marketable Securities 25,205,198 16,592,053
Patents and Other Intangibles, Net of
Accumulated Amortization of $1,477,393 at
March 31, 1998 and $1,185,613 at June 30, 1997 697,316 850,867
Other 184,920 183,954
- --------------------------------------------------------------------------------
$90,774,817 $83,282,583
================================================================================
See accompanying notes to consolidated financial statements
LUNAR CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
- --------------------------------------------------------------------------------
Liabilities and Shareholders' Equity
- --------------------------------------------------------------------------------
March 31, June 30,
1998 1997
(Unaudited) (Audited)
- --------------------------------------------------------------------------------
Current Liabilities:
Accounts payable $ 4,634,509 $ 4,209,485
Customer advances and deferred income 952,391 639,707
Income taxes payable 2,912,693 2,375,955
Accrued liabilities:
Commissions payable 2,218,474 2,146,189
Compensation payable 558,799 290,913
Property, payroll, and other taxes 176,841 141,906
Accrued warranty and installation expenses 2,802,000 2,984,000
Other 176,047 251,036
- --------------------------------------------------------------------------------
Total Current Liabilities 14,431,754 13,039,191
Shareholders' Equity:
Common stock--authorized 25,000,000 shares
of $.01 par value; issued and outstanding
8,827,260 shares at March 31, 1998 and
8,721,425 at June 30, 1997 88,267 87,214
Capital in excess of par value 27,074,164 26,500,942
- --------------------------------------------------------------------------------
27,162,431 26,588,156
Retained Earnings 49,140,218 43,706,139
Unrealized Appreciation in
Marketable Securities 174,841 34,220
Cumulative Translation Adjustment (134,427) (85,123)
- --------------------------------------------------------------------------------
76,343,063 70,243,392
- --------------------------------------------------------------------------------
$90,774,817 $83,282,583
================================================================================
See accompanying notes to consolidated financial statements
LUNAR CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)
- --------------------------------------------------------------------------------
Three months ended Nine months ended
March 31, March 31, March 31, March 31,
1998 1997 1998 1997
- --------------------------------------------------------------------------------
Revenues $18,059,845 $19,857,329 $58,475,907 $59,288,064
- --------------------------------------------------------------------------------
Operating Expenses
Cost of sales 9,696,935 8,739,673 28,402,692 26,148,882
Research and
development 1,825,661 1,429,756 5,192,178 4,014,633
Selling and marketing 4,497,658 4,118,381 13,721,067 12,492,401
General and
administrative 1,169,539 1,236,755 3,368,829 3,462,779
- --------------------------------------------------------------------------------
17,189,793 15,524,565 50,684,766 46,118,695
- --------------------------------------------------------------------------------
Income from Operations 870,052 4,332,764 7,791,141 13,169,369
- --------------------------------------------------------------------------------
Other Income (Expense):
Interest income 400,611 356,366 1,356,513 1,064,213
Settlement of lawsuit - - - 1,828,905
Other (253,310) 198,954 (1,092,575) 152,047
- --------------------------------------------------------------------------------
147,301 555,320 263,938 3,045,165
- --------------------------------------------------------------------------------
Income Before
Income Taxes 1,017,353 4,888,084 8,055,079 16,214,534
Income Tax Expense 325,000 1,611,000 2,621,000 5,491,000
- --------------------------------------------------------------------------------
Net Income $ 692,353 $3,277,084 $5,434,079 $10,723,534
================================================================================
Basic Earnings per Share $0.08 $0.38 $0.62 $1.25
================================================================================
Diluted Earnings per Share $0.08 $0.36 $0.60 $1.18
================================================================================
Weighted Average Number of
Common Shares 8,800,035 8,674,318 8,758,201 8,580,534
================================================================================
Weighted Average Number of
Common and Dilutive Potential
Common Shares 9,153,009 9,163,529 9,124,730 9,103,341
================================================================================
See accompanying notes to consolidated financial statements
LUNAR CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
- --------------------------------------------------------------------------------
Nine months ended
March 31, March 31,
1998 1997
- --------------------------------------------------------------------------------
Cash Flows from Operating Activities:
Net income $5,434,079 $10,723,534
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 1,621,492 1,024,620
Changes in assets and liabilities:
Receivables (140,610) 6,225,288
Inventories (3,894,951) (1,947,580)
Other current assets (302,962) (58,555)
Deferred income taxes 1,061,000 (266,000)
Accounts payable 375,720 (966,553)
Customer advances and deferred income 312,684 134,702
Accrued liabilities 118,117 459,797
Income taxes payable 536,738 1,122,672
- --------------------------------------------------------------------------------
Net Cash Provided by Operating Activities 5,121,307 16,451,925
- --------------------------------------------------------------------------------
Cash Flows from Investing Activities:
Purchases of marketable securities (14,512,714) (20,236,573)
Sales and maturities of marketable securities 4,207,000 851,600
Additions to property, plant and equipment (2,952,592) (1,320,354)
Patents and other intangibles (138,229) (172,708)
- --------------------------------------------------------------------------------
Net Cash Used in Investing Activities (13,396,535) (20,878,035)
- --------------------------------------------------------------------------------
Cash Flows from Financing Activities:
Proceeds from exercise of stock options 766,952 1,148,818
Income tax benefit from stock option exercises 885,448 2,468,529
Repurchase of common stock (1,078,125) -
- --------------------------------------------------------------------------------
Net Cash Provided by Financing Activities 574,275 3,617,347
- --------------------------------------------------------------------------------
Net Decrease in Cash and Cash Equivalents (7,700,953) (808,763)
Cash and Cash Equivalents at Beginning of Period 14,417,155 8,001,582
- --------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Period $ 6,716,202 $ 7,192,819
================================================================================
Supplemental Disclosure of Cash Flow Information:
Income taxes paid $ 1,037,000 $ 2,404,859
================================================================================
See accompanying notes to consolidated financial statements
LUNAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) BASIS OF PRESENTATION
The consolidated financial statements of Lunar Corporation (the "Company")
presented herein, without audit except for balance sheet information at June 30,
1997, have been prepared pursuant to the rules of the Securities and Exchange
Commission for quarterly reports on 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
Annual Report on Form 10-K for the year ended June 30, 1997.
The consolidated balance sheet as of March 31, 1998, the consolidated
statements of income for the three and nine months ended March 31, 1998 and
1997, and the consolidated statements of cash flows for the nine months ended
March 31, 1998 and 1997 are unaudited but, in the opinion of management, include
all adjustments (consisting of normal, recurring adjustments) necessary for a
fair presentation of results for these interim periods. The Company has
reclassified the presentation of certain prior year information to conform with
the current presentation format.
The results of operations for the three and nine months ended March 31, 1998,
are not necessarily indicative of the results to be expected for the entire
fiscal year ending June 30, 1998.
(2) INVENTORIES
Inventories are stated at the lower of cost or market; cost is determined
principally by the first-in, first-out method. Inventories are broken down as
follows:
- --------------------------------------------------------------------------------
March 31, June 30,
1998 1997
(Unaudited) (Audited)
- --------------------------------------------------------------------------------
Finished goods and work in process $ 4,622,813 $2,909,854
Materials and purchased parts 8,645,628 6,463,636
----------- ----------
$13,268,441 $9,373,490
=========== ==========
(3) SHAREHOLDERS' EQUITY
On April 22, 1997, the Company approved a stock repurchase program pursuant
to which it may repurchase up to 1,000,000 shares of its common stock from time
to time based upon market conditions and other factors. The Company has
repurchased 55,000 shares under this program as of May 13, 1998.
(4) EARNINGS PER COMMON SHARE
Effective December 31, 1997, the Company adopted the provisions of Statement
of Financial Accounting Standards No. 128, Earnings Per Share. Statement No.
128 replaces the previously reported primary and fully diluted earnings per
share with basic and diluted earnings per share. Basic earnings per share are
computed by dividing net income by the weighted average number of shares of
common stock outstanding during the period. Diluted earnings per share are
computed by dividing net income by the weighted average number of shares of
common stock outstanding plus the number of additional common shares that would
have been outstanding if common shares had been issued for outstanding stock
options, calculated according to the treasury stock method. All earnings per
share amounts for all periods presented have been restated to conform to the
requirements of Statement No. 128.
Item 2. Management Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
Equipment sales and other revenue decreased 9% to $18,060,000 in the three
months ended March 31, 1998 from $19,857,000 in the three months ended March 31,
1997. For the nine months ended March 31, 1998, equipment sales and other
revenue decreased 1% to $58,476,000 from $59,288,000 in the nine months ended
March 31, 1997. Sales by product line are summarized as follows:
Revenues by Product
(in thousands)
Three Months Ended Nine Months Ended
---------------------- ----------------------
March 31, March 31, March 31, March 31,
1998 1997 1998 1997
---------------------- ----------------------
X-ray densitometry $12,563 $14,370 $41,673 $46,557
Ultrasound densitometry 905 1,287 3,613 4,072
Orthopedic Imaging 2,865 2,951 7,739 5,217
Service Revenue 1,382 971 4,150 2,389
Other 345 278 1,301 1,053
---------------------- ----------------------
$18,060 $19,857 $58,476 $59,288
====================== ======================
The Company's sales of bone densitometers in the United States have been
negatively impacted by a shift away from traditional hospital buyers toward
physician clinical practices, which tend to favor the lowest priced
densitometers. The Company recently announced two new distributor agreements to
better address this market segment. The increase in Orthopedic Imaging sales for
the current fiscal year is primarily due to increased unit sales of the Artoscan
dedicated MRI system. The increase in service revenue is primarily due to the
growing installed base of densitometers in the United States.
Cost of sales as a percentage of equipment sales averaged approximately 54%
and 49% in the three and nine month periods ended March 31, 1998, respectively,
compared to 44% in the three and nine month periods ended March 31, 1997. The
increase is primarily the result of lower gross profit margins on sales of
densitometry equipment as a result of competitive pricing pressures and a higher
mix of orthopedic imaging equipment which have lower gross profit margins.
Research and development expenditures increased to $1,826,000 in the three
months ended March 31, 1998 from $1,428,000 in the three months ended March 31,
1997 and increased to $5,192,000 in the nine months ended March 31, 1998 from
$4,015,000 in the nine months ended March 31, 1997. The Company increased
research and development expenditures for ultrasound and peripheral x-ray
densitometry products during the three and nine month periods ended March 31,
1998.
Sales and marketing expenses were $4,498,000 in the three months ended March
31, 1998, compared to $4,118,000 in the three months ended March 31, 1997,
representing an increase to 25% from 21% as a percentage of equipment sales.
For the nine months ended March 31, 1998, sales and marketing expenses were
$13,721,000 compared to $12,492,000 for the nine months ended March 31, 1997,
representing an increase to 23% from 21% as a percentage of equipment sales.
These increases are primarily the result of increased sales and marketing
efforts to address the expanding primary care market for densitometry.
General and administration expenses decreased to $1,170,000 in the three
months ended March 31, 1998 from $1,237,000 in the three months ended March 31,
1997, and decreased to $3,369,000 in the nine months ended March 31, 1998 from
$3,463,000 in the nine months ended March 31, 1997.
Interest income was $401,000 and $1,357,000 in the three and nine months
ended March 31, 1998, respectively, compared to $356,000 and $1,064,000 in the
three and nine months ended March 31, 1997, respectively. This increase is
primarily the result of increased investments in marketable securities partially
offset by decreases in the amount of financed receivables.
The effective tax rate averaged 32% and 33% in the three and nine month
periods ended March 31, 1998, respectively, compared to 33% and 34% in the three
and nine month period ended March 31, 1997, respectively. The effective tax
rate is lower in the three and nine month periods ended March 31, 1998 versus
the comparable prior year period due to increased tax-exempt interest income.
The rate for the three and nine month periods ended March 31, 1998 is below the
34% federal statutory rate as a result of tax-exempt interest income and the
benefit of the foreign sales corporation offset by the provision for state
income taxes.
Liquidity and Capital Resources
Cash and cash equivalents decreased $7,701,000 to $6,716,000 in the nine
months ended March 31, 1998 primarily due to the purchase of municipal bonds.
The Company has a $32,580,000 laddered portfolio of high-grade, readily
marketable municipal bonds with various maturities not exceeding 48 months.
The Company's trade accounts receivable increased $140,000 to $29,155,000 at
March 31, 1998 from $29,015,000 at June 30, 1997. The increase in accounts
receivable is primarily due to an increase in receivables from Latin American
customers which the Company intends to sell prior to June 30, 1998.
Inventories increased 42% to $13,268,000 at March 31, 1998 from $9,373,000
at June 30, 1997. The increase in finished goods is primarily attributable to
increases in Artoscan MRI units. The increase in materials and purchased parts
is primarily attributable to higher service inventories as a result of higher
sales in the United States.
The Company purchased a 25-acre parcel of land in January 1998 for
$1,949,000. The Company plans to begin construction of an assembly, warehouse,
and office building in mid-1998. Total construction costs are projected to be
approximately $8,000,000. The Company does not have any other pending material
commitments for capital expenditures.
Management believes the current level of cash and short-term investments is
adequate to finance the Company's operations for the foreseeable future.
Year 2000 Compliance
Many currently installed computer systems and software products are coded to
accept only two-digit entries in the date code field. To distinguish 21st
century from 20th century dates, these date code fields must be able to accept
four-digit entries. The Company has reviewed its existing financial and other
business information systems and believes that its computer systems will be able
to manage and manipulate all material data involving the transition form 1999 to
2000 without functional or data abnormality and without inaccurate results
related to such data.
Item 3. Quantitative and Qualitative Disclosure About Market Risk
Not applicable.
PART II - OTHER INFORMATION
LUNAR CORPORATION AND SUBSIDIARIES
Item 1. Legal Proceedings
Patent Litigation: On March 5, 1996, the Company and University
of Alabama - Birmingham Research Foundation (UAB) (collectively the
co-plaintiffs) sued EG&G Astrophysics (EG&G) of Long Beach, California,
in the United States District Court for the Western District of
Wisconsin for infringement of U.S. Patent 4,626,688 (the '688 Patent)
by EG&G's dual-energy baggage scanners. A trial of the matter in
December of 1996 concluded with a verdict in favor of the co-plaintiffs.
The Company and UAB were awarded $4.2 million in damages which was
divided between the co-plaintiffs after deducting legal expenses. The
co-plaintiffs also entered into a Settlement and License Agreement with
EG&G whereby EG&G was licensed under the '688 patent and a related U.S.
patent. The license agreement provides for payment of royalties to the
co-plaintiffs on EG&G's dual-energy baggage scanners manufactured or
sold in the United States. The license agreement ends on December 2,
2003.
The Company is presently co-defendant and counterclaim co-plaintiff
with the UAB in two declaratory judgment actions filed in the United
States District Court for the Central District of California. Both
actions seek a determination of non-infringement and invalidity of the
'688 Patent. The first declaratory judgment action was filed on January
21, 1997 by RapiScan Security Systems Inc. ("RapiScan"). RapiScan
manufactures and sells baggage scanning equipment and is a competitor
of EG&G. The second declaratory judgment action was filed on February
26, 1997 by Osteometer Meditech A/S ("Osteometer"), a competitor of the
Company. Osteometer manufactures and sells bone densitometry products
and is located in Denmark. The Company intends to vigorously defend
against these lawsuits. The Company does not believe these lawsuits
will have a material effect on the results of operations or financial
condition of the Company.
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
Safe Harbor Statement Under the Private Securities Litigation
Reform Act of 1995: Certain statements in this filing, and elsewhere
(such as in other filings by the Company with the Securities and
Exchange Commission, press releases, presentations by the Company or its
management, and oral statements) constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of
1995. Such forward-looking statements involve known and unknown risks,
uncertainties, and other factors which may cause the actual results,
performance, or achievements of the Company to be materially different
from any future results, performance, or achievements expressed or
implied by such forward-looking statements. Such factors include, among
other things, regulation, technical risks associated with the
development of new products, regulatory policies in the United States
and other countries, reimbursement policies of public and private health
care payors, introduction and acceptance of new drug therapies, currency
exchange risks, competition from existing products and from new products
or technologies, and market and general economic factors.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits furnished:
(11) Statement Re: Computation of Earnings Per Share
(27.1) Financial Data Schedule-March 31, 1998
(27.2) Financial Data Schedule-March 31, 1997
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the
quarter ended March 31, 1998.
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.
LUNAR CORPORATION
(Registrant)
Date: May 13, 1998 /s/ Richard B. Mazess
Richard B. Mazess
President
(Principal Executive Officer)
Date: May 13, 1998 /s/ Robert A. Beckman
Robert A. Beckman
Vice President of Finance
and Treasurer
(Principal Financial and
Accounting Officer)
LUNAR CORPORATION AND SUBSIDIARIES
Exhibit Index
For the Quarterly Period Ended March 31, 1998
No. Description Page
- --------------------------------------------------------------------------------
11 Statement Regarding Computation of Earnings Per Share. . . . . . . . . . 15
27.1 Financial Data Schedule-March 31, 1998 . . . . . . . . . . . . . . . . . 16
27.2 Financial Data Schedule-March 31, 1997 . . . . . . . . . . . . . . . . . 17
Exhibit 11
LUNAR CORPORATION AND SUBSIDIARIES
Statement Regarding Computation of Earnings Per Share
(Unaudited)
Three months ended Nine months ended
March 31, March 31, March 31, March 31,
1998 1997 1998 1997
---------------------- ----------------------
Net income $ 692,353 $3,277,084 $5,434,076 $10,723,534
====================== ======================
Weighted average number of
common shares 8,800,035 8,674,318 8,758,201 8,580,534
Stock options calculated according
to the treasury stock method 352,974 489,211 366,529 522,807
---------------------- ----------------------
Weighted average number of common
and potential common shares 9,153,009 9,163,529 9,124,730 9,103,341
====================== ======================
Basic earnings per share $0.08 $0.38 $0.62 $1.25
====================== ======================
Diluted earnings per share $0.08 $0.36 $0.60 $1.18
====================== ======================
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information
extracted from Form 10-Q for the three months ended
March 31, 1998, and is qualified in its entirety by
reference to such financial statements.
<MULTIPLIER> 1,000
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> MAR-31-1998
<CASH> 6,716
<SECURITIES> 32,580
<RECEIVABLES> 31,839
<ALLOWANCES> 2,684
<INVENTORY> 13,268
<CURRENT-ASSETS> 55,330
<PP&E> 11,245
<DEPRECIATION> 4,870
<TOTAL-ASSETS> 90,775
<CURRENT-LIABILITIES> 14,432
<BONDS> 0
<COMMON> 88
0
0
<OTHER-SE> 76,255
<TOTAL-LIABILITY-AND-EQUITY> 90,775
<SALES> 58,476
<TOTAL-REVENUES> 58,476
<CGS> 28,403
<TOTAL-COSTS> 50,685
<OTHER-EXPENSES> 1,093
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 8,055
<INCOME-TAX> 2,621
<INCOME-CONTINUING> 5,434
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,434
<EPS-PRIMARY> .62
<EPS-DILUTED> .60
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information
extracted from Form 10-Q for the three months ended
March 31, 1997, and is qualified in its entirety by
reference to such financial statements.
<RESTATED>
<MULTIPLIER> 1,000
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> MAR-31-1997
<CASH> 7,193
<SECURITIES> 22,621
<RECEIVABLES> 32,442
<ALLOWANCES> 2,709
<INVENTORY> 10,623
<CURRENT-ASSETS> 51,179
<PP&E> 7,886
<DEPRECIATION> 3,677
<TOTAL-ASSETS> 77,885
<CURRENT-LIABILITIES> 11,296
<BONDS> 0
<COMMON> 87
0
0
<OTHER-SE> 66,501
<TOTAL-LIABILITY-AND-EQUITY> 77,885
<SALES> 59,288
<TOTAL-REVENUES> 59,288
<CGS> 26,149
<TOTAL-COSTS> 46,119
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 16,215
<INCOME-TAX> 5,491
<INCOME-CONTINUING> 10,724
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,724
<EPS-PRIMARY> 1.25
<EPS-DILUTED> 1.18
</TABLE>
