SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 12(g)
of the Securities Exchange Act of 1934
For the Quarterly Period Ended March 31, 1998
OR
[ ] Transition Report Pursuant to Section 13 or 12(g)
of the Securities Exchange Act of 1934
For the Transition Period from to
----- -----
Commission File Number 0-26144
International Murex Technologies Corporation
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(Exact name of registrant as specified in its charter)
Province of British Columbia, Canada N/A
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(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
2255 B. Queen Street, East, Suite 828, Toronto, ON M4E 1G3
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (519) 836-8016
--------------
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 12(g) of the
Securities Exchange Act of 1934 during the preceding 12 months
and (2) has been subject to such filing requirements for the past
90 days.
Yes X No
--- ---
The number of common shares outstanding as of May 5, 1998 was
16,730,256, excluding treasury shares.
<PAGE>
INTERNATIONAL MUREX TECHNOLOGIES CORPORATION
Quarterly Report on Form 10-Q
For the Three Months Ended March 31, 1998
Table of Contents
-----------------
Item Page
Number PART I -- FINANCIAL INFORMATION Number
------ ------
1 Financial Statements
Consolidated Balance Sheets at
March 31, 1998 and December 31, 1997 3
Consolidated Statements of Operations
for the Three Months Ended
March 31, 1998 and 1997 5
Consolidated Statements of Changes in
Shareholders' Equity for the
Period January 1, 1997 to March 31, 1998 6
Consolidated Statements of Cash Flows
for the Three Months Ended
March 31, 1998 and 1997 7
Notes to Consolidated Financial Statements 9
2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 12
PART II -- OTHER INFORMATION
1 Legal Proceedings 15
2 Changes in Securities and Use of Proceeds 15
6 Exhibits and Reports on Form 8-K 15
SIGNATURES 16
THIS FORM 10-Q CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE
MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933 AND SECTION
21E OF THE SECURITIES EXCHANGE ACT OF 1934. THE ACTUAL RESULTS
COULD DIFFER MATERIALLY FROM THOSE SET FORTH IN THE FORWARD-
LOOKING STATEMENTS. CERTAIN FACTORS THAT MIGHT CAUSE SUCH A
DIFFERENCE ARE DISCUSSED IN THE INTRODUCTORY PARAGRAPH TO ITEM
2, "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS," WITHIN THIS REPORT.
-2-
<PAGE>
INTERNATIONAL MUREX TECHNOLOGIES CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Thousands of U. S. Dollars)
March 31, December 31,
------------------------
1998 1997
------------------------------------------------------------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 5,986 $ 10,087
Accounts receivable, net of
allowance for doubtful
accounts of $3,000
and $2,939, respectively 36,259 35,062
Inventories 22,687 21,164
Prepaid and other 4,482 4,931
--------------------
Total current assets 69,414 71,244
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PROPERTY, PLANT AND EQUIPMENT-
at cost less accumulated
depreciation and amortization 14,132 13,245
PATENTS, TRADEMARKS AND LICENSES-
at cost less accumulated
amortization 6,887 7,016
OTHER ASSETS 3,526 3,738
--------------------
TOTAL $ 93,959 $ 95,243
=================================================================
See notes to consolidated financial statements.
-3-
<PAGE>
March 31, December 31,
-----------------------
1998 1997
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade accounts payable $ 12,153 $ 10,215
Accrued expenses:
Professional fees 1,065 1,229
Royalty payments 1,932 1,559
Employee related 4,185 5,032
Income taxes payable 675 827
Litigation settlements 74 155
Other 2,819 3,110
Current portion of long term debt 102 95
Current portion of capitalized
lease obligations 127 163
--------------------
Total current liabilities 23,132 22,385
----------------------------------------------------------------
DEFERRED RENT 43 47
LONG TERM DEBT, less current portion 14,528 14,331
CAPITALIZED LEASE OBLIGATIONS 214 248
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Common shares, without par value,
200,000,000 shares authorized;
16,848,115 and 16,689,934 shares
issued, respectively 85,498 84,780
Additional paid-in capital 14,521 14,521
Accumulated deficit (34,663) (32,591)
Less cost of 101,043 common shares held
in treasury (5) (5)
Accumulated other comprehensive income (9,309) (8,473)
-------------------
Shareholders' equity 56,042 58,232
----------------------------------------------------------------
TOTAL $ 93,959 $ 95,243
================================================================
See notes to consolidated financial statements.
-4-
<PAGE>
INTERNATIONAL MUREX TECHNOLOGIES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands of U.S. Dollars, except per share data)
Three Months Ended March 31
---------------------------
1998 1997
----------------------------------------------------------------
REVENUES:
Product sales $ 22,660 $ 24,718
License fees and other 975 1,124
--------------------------
Total revenues 23,635 25,842
COSTS AND EXPENSES:
Cost of products sold 9,953 8,289
Research and development 1,851 1,607
General and administrative 5,056 5,618
Sales and marketing 6,951 6,817
Foreign exchange loss (gain) (37) 44
Royalty expense 1,668 1,500
--------------------------
Total costs and expenses 25,442 23,875
----------------------------------------------------------------
Income (Loss) From Operations (1,807) 1,967
Interest income 104 49
Interest (expense) (393) (285)
Gain (loss) on asset disposals 7 (26)
Other income 64 52
--------------------------
Income (loss) before income taxes (2,025) 1,757
Income taxes 47 98
--------------------------
NET INCOME (LOSS) $ (2,072) $ 1,659
================================================================
NET INCOME (LOSS) PER COMMON SHARE:
Basic $ (0.12) $ 0.10
======== ========
Diluted $ (0.12) $ 0.10
======== ========
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic, in thousands 16,678 16,386
======== ========
Diluted, in thousands 17,669 17,331
======== ========
See notes to consolidated financial statements.
-5-
<PAGE>
INTERNATIONAL MUREX TECHNOLOGIES CORPORATION
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(In thousands of U.S. Dollars, except share data)
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Common Stock Additional
------------- Paid-In Accumulated
Shares Amount Capital Deficit
--------------------------------------------------------------------------
December 31, 1996 16,578,853 $ 84,460 $ 13,906 $(41,655)
Issued pursuant to employee
stock purchase plan 23,617 155
Exercise of employee stock
options 218,300 999
Retirement of treasury shares (185,886) (1,080)
Issued pursuant to class action
settlement 80,120 465
Reversion of settlement shares 615
Shares tendered as tax
witholding (25,070) (219)
Net change in unrealized gain on
marketable securities
Net income 9,064
Foreign currency translation
December 31, 1997 16,689,934 84,780 14,521 (32,591)
------------------------------------------
Exercise of employee stock
options 57,350 211
Issued pursuant to 1997
employee stock purchase plan 831 7
Exercise of warrants 100,000 500
Net change in unrealized gain on
marketable securities
Net loss (2,072)
Foreign currency translation
-------------------------------------------
March 31, 1998 16,848,115 $ 85,498 $ 14,521 $(34,663)
===========================================
Accumulated Other
Comprehensive Income
----------------------
Unrealized Accumulated
Gain on Currency Total
Treasury Marketable Translation Shareholders'
Shares Securities Adjustment Equity
--------------------------------------------------------------------------
December 31, 1996 $(1,085) $ 4,405 $(3,848) $ 56,183
Issued pursuant to employee
stock purchase plan 155
Exercise of employee stock
options 999
Retirement of treasury shares 1,080
Issued pursuant to class
action settlement 465
Reversion of settlement
shares 615
Shares tendered as tax
witholding (219)
Net change in unrealized gain
on marketable securities (3,729) (3,729)
Net income 9,064
Foreign currency translation (5,301) (5,301)
December 31, 1997 (5) 676 (9,149) 58,232
--------------------------------------------
Exercise of employee stock
options 211
Issued pursuant to 1997
employee stock purchase plan 7
Exercise of warrants 500
Net change in unrealized gain
on marketable securities (60) (60)
Net loss (2,072)
Foreign currency translation (776) (776)
--------------------------------------------
March 31, 1998 $ (5) $ 616 $(9,925) $ 56,042
==========================================================================
See notes to consolidated financial statements.
-6-
<PAGE>
INTERNATIONAL MUREX TECHNOLOGIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands of U.S. Dollars)
Three Months Ended
March 31,
----------------------
1998 1997
-------------------------------------------------------------------
OPERATING ACTIVITIES:
Net income (loss) $ (2,072) $ 1,659
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operating activities:
Depreciation 1,209 1,251
Amortization 252 183
(Gain) loss on sale of property
and equipment (7) 26
Changes in working capital:
Accounts receivable (1,250) 2,035
Inventories (1,523) 42
Prepaid expenses and other assets 422 691
Trade accounts payable 1,938 980
Accrued expenses (1,162) (2,445)
--------------------
Net cash provided by (used in) operating
activities (2,193) 4,422
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INVESTING ACTIVITIES:
Additions to property and equipment (2,111) (1,348)
Additions to patents and licenses (123) (450)
Proceeds from sale of property and
equipment 22 51
Proceeds from sale of marketable securities 232
--------------------
Net cash (used in) investing activities (1,980) (1,747)
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FINANCING ACTIVITIES:
Increase (decrease) in borrowings under
line of credit 197 1,420
Reduction of other long-term liabilities (67) (35)
Proceeds from issuance of common shares 718 747
--------------------
Net cash provided by (used in) financing
activities 848 2,132
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EFFECT OF EXCHANGE RATE CHANGES (776) (4,211)
Net Increase (Decrease) in Cash
and Cash Equivalents (4,101) 596
Cash and Cash Equivalents at Beginning of
Period 10,087 9,723
--------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 5,986 $10,319
==================================================================
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest $ 393 $ 285
Cash paid for income taxes $ 199 $ 293
-7-
<PAGE>
INTERNATIONAL MUREX TECHNOLOGIES CORPORATION
Consolidated Statements of Cash Flows (Continued)
(In thousands of U.S. Dollars, except share data)
----------------------------------------------------------------
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING ACTIVITIES
During the quarter ended March 31, 1997, IMTC retired
185,886 shares held in treasury valued at $1,080.
See notes to consolidated financial statements.
-8-
<PAGE>
INTERNATIONAL MUREX TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of U.S. Dollars, except share data)
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1. NATURE OF THE COMPANY AND BASIS OF PRESENTATION:
International Murex Technologies Corporation ("IMTC"), has
many incorporated subsidiaries operating throughout the
world under the Murex name (the "Murex Group"). The Murex
Group develops, manufactures and markets medical diagnostic
products, licenses its technology and provides medical
services for the screening, diagnosis and monitoring of
infectious diseases and other medical conditions. (IMTC and
the Murex Group are collectively referred to herein for
consolidated financial purposes only as the "Company").
The accompanying financial statements have been prepared in
accordance with generally accepted accounting principles for
interim financial information and with the instructions to
Form 10-Q and Article 10 of Regulation S-X promulgated by
the Securities and Exchange Commission. Such financial
statements do not include all disclosures required by
generally accepted accounting principles for annual
financial statement reporting purposes. However, there has
been no material change in the information disclosed in the
Company's annual consolidated financial statements dated
December 31, 1997, except as disclosed herein. Accordingly,
the information contained herein should be read in
conjunction with such annual consolidated financial
statements and related disclosures. The accompanying
financial statements reflect, in the opinion of management,
all adjustments (consisting of normal recurring adjustments)
necessary for a fair presentation of the results for the
interim periods presented. Results of operations for the
quarter ended March 31, 1998 are not necessarily indicative
of results expected for an entire year.
2. INVENTORIES:
March 31, December 31,
1998 1997
------- ----------
Raw materials and supplies $ 5,288 $ 5,355
Work in process 7458 6524
Finished goods 9941 9285
--------- --------
Total inventories $ 22,687 $ 21,164
========= ========
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3. NET INCOME (LOSS) PER COMMON SHARE:
In February 1997, the Financial Accounting Standards
Board issued Statement of Financial Standards No. 128,
"Earnings Per Share" ("SFAS 128"). SFAS 128 requires
disclosure of basic earnings per common share based on
the net income (loss) and the weighted average number
of common shares outstanding during the period. SFAS
128 also requires disclosure of diluted earnings per
common share based on the net income (loss) and the
weighted average number of common shares and common
share equivalents outstanding during the period. All
periods presented are retroactively restated to conform
to the presentation requirements of SFAS 128. The
following table represents the computation of basic and
diluted earnings per common share:
-9-
<PAGE>
Three Months Ended March
31,
------------------------
1998 1997
----------------------------------------------------------------
Basic earnings per common share:
Net income (loss) $ (2,072) $ 1,659
Weighted average common shares 16,678 16,386
Basic net income (loss) per common $ (0.12) $ 0.10
Diluted earnings per common share:
Net income (loss) $ (2,072) $ 1,659
Weighted average common
shares outstanding 16,678 16,386
Common stock equivalents 991 945
-------- -------
Total weighted average shares 17,669 17,331
Diluted net income (loss) per share $ (0.12) $ 0.10
-----------------------------------------------------------------
4. COMPREHENSIVE INCOME:
Three Months ended March
31,
------------------------
1998 1997
----------------------------------------------------------------
Net income (loss) $ (2,072) $ (1,659)
Other comprehensive income, net of tax:
Foreign currency translation
adjustments (776) (4,399)
Unrealized gains on marketable
securities:
Unrealized holding gains arising
during period 76 625
Less: reclassification adjustment
for gains realized in net income (136)
---------- ---------
Net unrealized gains on marketable
securities (60) 625
---------- ----------
Other comprehensive income, net
of tax (836) (3,774)
---------- ----------
Comprehensive income $ (2,908) $ (5,433)
========== ==========
------------------------------------------------------------------
-10-
<PAGE>
5. SUBSEQUENT EVENTS:
On April 17, 1998, Abbott Laboratories ("Abbott")
acquired control of IMTC via a cash tender offer,
commenced on March 20, 1998, to purchase all of IMTC's
outstanding common stock. The tender offer was
pursuant to an Acquisition Agreement dated as of March
13, 1998 among IMTC, Abbott and AAC Acquisition Ltd.,
an indirect wholly-owned subsidiary of Abbott. A total
of 16,174,162 shares of IMTC's common stock were
validly tendered and not previously withdrawn in
response to the tender offer. These shares represent
approximately 96% of IMTC's outstanding shares on a
fully diluted basis. The remaining shares of Murex
will be acquired by AAC Acquisition, Ltd. in a
compulsory acquisition procedure for $13 per share.
Abbott will own 100% of IMTC upon completion of the
compulsory acquisition procedure, which is expected to
be finalized during the third quarter of 1998.
6. RECONCILIATION OF CANADIAN AND U.S. GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES ("CANADIAN GAAP" AND "U.S.
GAAP"):
There were no differences between Canadian GAAP and
U.S. GAAP during the year ended December 31, 1997 and
the quarter ended March 31, 1998.
-11-
<PAGE>
INTERNATIONAL MUREX TECHNOLOGIES CORPORATION
Form 10-Q for the Three Months Ended March 31, 1998
Part I - Financial Information
-----------------------------------------------------------------
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(Amounts expressed in U.S. Dollars)
This report contains or refers to forward-looking
information including future revenues, products, and income and
is based upon current expectations that involve a number of
business risks and uncertainties. Among the factors that could
cause actual results to differ materially from any forward-
looking statement include, but are not limited to, technological
innovations of competitors, delays in product introductions,
changes in health care regulations and reimbursements, litigation
claims, changes in foreign economic conditions or currency
translation, product acceptance, government approvals or changes
in government regulation of the Company's products, as well as
other factors discussed in other Securities and Exchange
Commission filings for the Company.
FINANCIAL CONDITION
Liquidity and Capital Resources
As discussed in Note 5 of the Consolidated Financial
Statements, control of the Company has been acquired by Abbott
Laboratories ("Abbott"), and the financial resource requirements
of the Company will be managed and provided by Abbott.
The Company has sufficient cash resources and adequate
working capital to carry on its current business and meet
existing capital requirements. Cash and working capital totaled
$6.0 million and $46.3 million, respectively at March 31, 1998.
On November 12, 1996, the Company entered into a three year,
$15 million line of credit facility with Bank of America, which
is collateralized by the accounts receivable and inventory of its
United States ("U.S."), United Kingdom ("U.K.") and Barbados
subsidiaries. The Company has an interest rate swap agreement
with the lender that fixed the interest rate at 8.98% for a
notional principal amount of $10.0 million.
Litigation and Technology Disputes
The Murex Group's business utilizes newly-developed
technologies that include patents on processes and devices.
These types of technologies are the focal point for the
biotechnology industry. The ownership and patentability of such
processes or devices have become increasingly complex, resulting
in competitive claims of ownership within the industry. The
Company is not presently the defendant in any material judicial
proceeding. Until March 13, 1998, the date of the Acquisition
Agreement discussed in Note 5 of the Consolidated Financial
Statements, Murex Diagnostics Corporation ("MDC"), a subsidiary
within the Murex Group, had been pursuing a patent infringement
suit against Abbott. MDC was seeking injunctive relief against
Abbott and damages for infringement of a patent. On March 31,
1998, pursuant to the Acquisition Agreement, MDC ceased actively
prosecuting the litigation against Abbott and asked the court to
stay the litigation. Since control of IMTC by Abbott was
acquired on or about April 17, 1998, the parties shall take all
steps necessary to dismiss with prejudice this litigation.
-12-
<PAGE>
Management Outlook
The Management of the Murex Group and Abbott will work
together in the near future to combine the strengths of the two
companies and exploit the full potential of the Company's
technologies and products. The Murex Group's products complement
those of Abbott's diagnostic operations and provide potential
growth opportunities, particularly in the areas of infectious
disease screening and patient monitoring. Management of both
companies will concentrate on delivering high quality products to
their customers, reducing costs and improving cash flows.
RESULTS OF OPERATIONS
Total revenues for the quarter ended March 31, 1998 were
$23,635,000 compared to $25,842,000 for the quarter ended March
31, 1997. Product sales were $22,660,000 and $24,718,000 for the
quarters ended March 31, 1998 and 1997, respectively. The net
decrease in total revenue represents an actual decrease using a
constant currency basis of $1,176,000 and a negative foreign
exchange impact of $1,031,000. The actual decrease is due to the
pricing pressures in the diagnostic market as a result of the
continuing consolidations in the industry. The negative foreign
exchange effect is due to the relative strength of the U.S.
Dollar, the reporting currency of the Company, during the first
quarter of 1998 as compared to the first quarter of 1997.
Translation from the various functional currencies to the U.S.
Dollar caused a decrease in the Dollar equivalent product sales
revenue. License fees and other revenues were $975,000 compared
to $1,124,000 in the previous year. In the first quarter of the
prior year, IMTC recognized revenues as a result of a February
1997 agreement with Digene Corporation ("Digene") to create a
direct European sales operation for certain of Digene's products.
Gross profit on product sales for the quarter ended March
31, 1998 decreased to 56.1%, as compared with 66.5% for 1997.
The decrease in gross profit on product sales is due to increased
sales in developing countries, which are generally at lower
margins. The relative strength of the British Pound also
contributed to the decline in gross profits, since the majority
of manufacturing is done in the U.K. As such, cost of products
sold increased to $9,953,000 for the three months ended March 31,
1998 from $8,289,000 in the comparable prior year period.
Total costs and expenses, excluding cost of products sold,
of $15,489,000 for the quarter ended March 31, 1998 reflect a net
decrease of $97,000 over the quarter ended March 31, 1997.
Translation from the various functional currencies to the U.S.
Dollar caused a decrease in the Dollar equivalent total costs and
expenses, excluding cost of products sold. Research and
development costs for the first quarter of 1997 increased by
$244,000 to $1,851,000 as a result of the continued focus to
improve certain virology tests design and manufacturing process
to meet the changing requirements of this market. General and
administrative costs for the quarter ended March 31, 1998 were
$5,056,000, as compared to $5,618,000 for the comparable prior
year period. The decrease of $562,000 mainly represents cost
savings from a restructuring initiated in the third quarter of
1996. Sales and marketing expenses of $6,951,000 reflect a
$134,000 increase over the first quarter of 1997. The increase is
the result of the efforts to build the market for gene probe
products used for the monitoring of patients and the
classification of viral diseases. One of the important functions
of these products is monitoring the development of resistant
mutations of the HIV virus and using this information to select
therapies.
The $53,000 increase in net interest expense from $236,000
for the quarter ended March 31, 1997 to $289,000 for the quarter
ended March 31, 1998 was due to the Company's overall increase in
borrowings, particularly via the line of credit with Bank of
America.
-13-
<PAGE>
INTERNATIONAL MUREX TECHNOLOGIES CORPORATION
Form 10-Q for the Three Months Ended March 31, 1998
Part II - Other Information
-----------------------------------------------------------------
ITEM 1 - LEGAL PROCEEDINGS
As previously discussed, MDC, a subsidiary within the Murex
Group, had been pursuing a patent infringement suit against
Abbott. MDC was seeking injunctive relief against Abbott and
damages for infringement of a patent. On March 31, 1998,
pursuant to the Acquisition Agreement, MDC ceased actively
prosecuting the litigation against Abbott and asked the court to
stay the litigation. Since control of IMTC by Abbott was
acquired on or about April 17, 1998, the parties shall take all
steps necessary to dismiss with prejudice this litigation.
ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS
On or before February 11, 1998, 100,000 warrants were
exercised and unregistered securities were issued, pursuant to
Section 4(2) of the Securities Act of 1933. These warrants,
which were exercisable for a period of two years from February
12, 1996, were issued in two lots of 50,000 with exercise prices
of $4.50 and $5.50 per share, therefore, the aggregate exercise
price was $500,000. The proceeds were used for general working
capital.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
1. Exhibits
None.
2. Reports on Form 8-K
Current report on Form 8-K dated April 17, 1998
declaring a Change in Control of Registrant pursuant to an
Acquisition Agreement dated as of March 13, 1998 among
International Murex Technologies Corporation, Abbott
Laboratories and AAC Acquisition Ltd., an indirect wholly-
owned subsidiary of Abbott.
-14-
<PAGE>
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.
INTERNATIONAL MUREX TECHNOLOGIES CORPORATION
(Registrant)
Date: May 15, 1998 By: /s/ C. Robert Cusick
------------- ----------------------------------
C. Robert Cusick, Vice Chairman
President & CEO
Date: May 15, 1998 By: /s/ Steve C. Ramsey
------------- -----------------------------------
Steven C. Ramsey, Vice President & CFO
-15-
<PAGE>
EXHIBIT INDEX
Exhibit Description
------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
STATEMENTS OF OPERATIONS, BALANCE SHEETS, STATEMENTS OF STOCKHOLDERS'
EQUITY AND STATEMENTS OF CASH FLOWS AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 5,986
<SECURITIES> 0
<RECEIVABLES> 39,259
<ALLOWANCES> (3,000)
<INVENTORY> 22,687
<CURRENT-ASSETS> 69,414
<PP&E> 31,074
<DEPRECIATION> (16,942)
<TOTAL-ASSETS> 93,959
<CURRENT-LIABILITIES> 23,132
<BONDS> 0
0
0
<COMMON> 85,498
<OTHER-SE> (29,456)
<TOTAL-LIABILITY-AND-EQUITY> 93,959
<SALES> 22,660
<TOTAL-REVENUES> 23,635
<CGS> 9,953
<TOTAL-COSTS> 15,489
<OTHER-EXPENSES> 71
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 289
<INCOME-PRETAX> (2,025)
<INCOME-TAX> 47
<INCOME-CONTINUING> (2,072)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,072)
<EPS-PRIMARY> (.12)
<EPS-DILUTED> (.12)
</TABLE>
