SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X) Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended June 30, 1998 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: 0-26844
RADISYS CORPORATION
(Exact name of registrant as specified in its charter)
Oregon 93-0945232
(State or other jurisdiction (I.R.S. Employer
of organization or incorporation) Identification Number)
5445 NE Dawson Creek Drive
Hillsboro, OR 97124
(Address of principal executive offices, including zip code)
(503) 615-1100
(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 report), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
Number of shares of common stock outstanding as of August 10,
1998 was 7,899,070.
<PAGE>
RADISYS CORPORATION
PART I. FINANCIAL INFORMATION
Page No.
Item 1. Consolidated Financial Statements
Consolidated Balance Sheet - June 30, 1998 and
December 31, 1997 3
Consolidated Statement of Operations - Three months
ended June 30, 1998 and 1997, and six months ended
June 30, 1998 and 1997 4
Consolidated Statement of Changes In Shareholders'
Equity - December 31, 1995 through June 30, 1998 5
Consolidated Statement of Cash Flows - Six months
ended June 30, 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
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
2
<PAGE>
<TABLE>
<CAPTION>
RadiSys Corporation
Consolidated Balance Sheet
(in thousands, except share amounts)
ASSETS
June 30, December 31,
1998 1997
------------- -------------
(unaudited)
<S> <C> <C>
Current assets
Cash and cash equivalents $ 33,185 $ 23,993
Accounts receivable 19,790 27,983
Other receivables 471 503
Inventories 18,653 22,830
Other current assets 1,369 1,910
Deferred income taxes 238 251
------------- -------------
Total current assets 73,706 77,470
Equipment, net of accumulated depreciation of
$9,730 and $8,265 12,812 12,174
Other assets 6,169 5,299
------------- -------------
Total assets $ 92,687 $ 94,943
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 6,546 $ 10,840
Income taxes payable 531 1,558
Accrued wages and bonuses 2,181 2,893
Accrued sales discounts 981 1,211
Deferred revenue 1,181 1,234
Other accrued liabilities 998 712
Current portion of capital lease obligation 270 214
------------- -------------
Total current liabilities 12,688 18,662
------------- -------------
Obligations under capital lease 231 399
------------- -------------
Total liabilities 12,919 19,061
------------- -------------
Commitments and contingent liabilities
Shareholders' equity
Common stock, 50,000,000 shares
authorized, 7,892,491 and 7,803,595
shares issued and outstanding 51,967 50,788
Cumulative translation adjustment (1,918) (1,177)
Retained earnings 29,719 26,271
------------- -------------
Total shareholders' equity 79,768 75,882
------------- -------------
Total liabilities and shareholders' equity $ 92,687 $ 94,943
============= =============
See accompanying notes to consolidated financial statements.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
RadiSys Corporation
Consolidated Statement of Operations
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
1998 1997 1998 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues $ 24,125 $ 29,796 $ 57,788 $ 57,626
Cost of sales 16,640 17,875 38,184 34,060
----------- ----------- ----------- -----------
Gross Profit 7,485 11,921 19,604 23,566
Research and development 3,323 2,742 6,859 5,549
Selling, general and administrative 3,952 3,757 8,054 7,595
----------- ----------- ----------- -----------
Income from operations 210 5,422 4,691 10,422
Interest income, net 280 270 606 534
----------- ----------- ----------- -----------
Income before income tax provision 490 5,692 5,297 10,956
Income tax provision 167 1,992 1,849 3,834
----------- ----------- ----------- -----------
Net income $ 323 $ 3,700 $ 3,448 $ 7,122
=========== =========== =========== ===========
Net income per share (basic) $ 0.04 $ 0.48 $ 0.44 $ 0.94
=========== =========== =========== ===========
Net income per share (diluted) $ 0.04 $ 0.46 $ 0.43 $ 0.89
=========== =========== =========== ===========
See accompanying notes to consolidated financial statements.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
RadiSys Corporation
Consolidated Statement of Changes in Shareholders' Equity
(in thousands, except share amounts)
Common stock Cumulative
----------------------- translation Retained
Shares Amount Warrants adjustment earnings Total
---------- ---------- ------------ ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Balances, December 31, 1995 6,014,709 $ 33,627 $ $ (108) $ 1,300 $ 34,819
Shares issued pursuant to
benefit plans 73,701 365 365
Tax effect of options exercised 569 569
Translation adjustment (221) (221)
Stock issued for acquisition 1,300,000 10,500 10,500
Warrants issued for acquisition 1,200 1,200
Net income for the year 9,546 9,546
---------- ---------- ------------ ------------ ---------- ---------
Balances, December 31, 1996 7,388,410 45,061 1,200 (329) 10,846 56,778
Exercise of warrants 166,667 1,200 (1,200)
Shares issued pursuant to
benefit plans 165,018 1,605 1,605
Tax effect of options exercised 513 513
Translation adjustment (848) (848)
Stock issued for acquisition 83,500 2,409 2,409
Net income for the year 15,425 15,425
---------- ---------- ------------ ------------ ---------- ---------
Balances, December 31, 1997 7,803,595 50,788 - (1,177) 26,271 75,882
Shares issued pursuant to
benefit plans 88,896 1,179 1,179
Translation adjustment (741) (741)
Net income for the period 3,448 3,448
---------- ---------- ------------ ------------ ---------- ---------
Balances, June 30, 1998 (unaudited) 7,892,491 $ 51,967 $ - $ (1,918) $ 29,719 $ 79,768
========== ========== ============ ============ ========== =========
See accompanying notes to consolidated financial statements.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
RadiSys Corporation
Consolidated Statement of Cash Flows
(in thousands)
(unaudited)
Six Months Ended
June 30, June 30
1998 1997
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net Income $ 3,448 $ 7,122
Adjustments to reconcile net income to net
cash provided by (used for) operating activities:
Depreciation and amortization 2,391 1,472
Deferred income taxes 13 131
Net changes in current assets and current liabilities:
Decrease (increase) in accounts receivable 8,193 (2,241)
Decrease (increase) in other receivables 32 2,478
Decrease (increase) in inventories 4,177 (1,576)
Decrease (increase) in other current assets 541 (641)
Increase (decrease) in accounts payable (4,294) (307)
Increase (decrease) in income taxes payable (1,027) (1,605)
Increase (decrease) in accrued wages and bonuses (712) 123
Increase (decrease) in accrued sales discounts (230) (451)
Increase (decrease) in deferred revenue (53) 79
Increase (decrease) in other accrued liabilities 286 (1,296)
------------- -------------
Net cash provided by (used for) operating activities 12,765 3,288
------------- -------------
Cash flows from investing activities:
Business acquisitions - (1,060)
Capital expenditures (2,451) (2,665)
Capitalized software production costs and other assets (1,448) (230)
------------- -------------
Net cash used for investing activities (3,899) (3,955)
------------- -------------
Cash flows from financing activities:
Issuance of common stock, net 1,179 686
Payments on notes payable - (2,532)
Payments on capital lease obligation (112) (123)
------------- -------------
Net cash provided by (used for) financing activities 1,067 (1,969)
------------- -------------
Effect of exchange rate changes on cash (741) (109)
------------- -------------
Net increase (decrease) in cash and cash equivalents 9,192 (2,745)
Cash and cash equivalents, beginning of period 23,993 24,626
------------- -------------
Cash and cash equivalents, end of period $ 33,185 $ 21,881
============= =============
See accompanying noets to consolidated financial statements.
</TABLE>
6
<PAGE>
RADISYS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share amounts)
(unaudited)
1. Basis of Presentation
The accompanying consolidated financial statements are unaudited and have
been prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission and in the opinion of management include
all adjustments, consisting only of normal recurring adjustments, necessary
for the fair statement of results for the interim periods. Certain
information and footnote disclosure normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations. These consolidated financial statements should be read in
conjunction with the audited financial statements and notes thereto
included in the Company's annual report on Form 10-K for the year ended
December 31, 1997. The results of operations for interim periods are not
necessarily indicative of the results for the entire year.
Reclassifications have been made to amounts in prior years to conform to
current year presentation. These changes had no impact on previously
reported results of operations or shareholders' equity.
2. Accounts Receivable
Trade accounts receivable are net of an allowance for doubtful accounts of
$468 and $663 at June 30, 1998 and December 31, 1997, respectively. The
Company's customers are concentrated in the technology industry.
3. Inventories
Inventories consist of the following:
Jun 30, Dec 31,
1998 1997
---------- ----------
Raw Materials $ 10,627 $ 15,388
Work in Process 2,665 1,844
Finished Goods 5,361 5,598
---------- ----------
$ 18,653 $ 22,830
========== ==========
7
<PAGE>
4. Property and Equipment
Property and equipment consists of the following:
Jun 30, Dec 31,
1998 1997
---------- ----------
Land $ 1,391 $ 1,387
Manufacturing Equipment 10,427 9,996
Office Equipment 8,202 7,255
Leasehold Improvements 2,522 1,801
---------- ----------
22,542 20,439
Less: Accum. Depr. 9,730 8,265
---------- ----------
$ 12,812 $ 12,174
========== ==========
5. Earnings Per Share
Net income per share is based on the weighted average number of shares of
common stock and common stock equivalents (stock options and warrants)
outstanding during the periods, computed using the treasury stock method
for stock options and warrants.
Weighted average shares consist of the following:
<TABLE>
<CAPTION>
For the three For the six
months ended months ended
Jun 30, Jun 30, Jun 30, Jun 30,
1998 1997 1998 1997
------- ------- ------- -------
<S> <C> <C> <C> <C>
Weighted Average Shares (basic) 7,883 7,685 7,860 7,580
Effect of Dilutive Stock Options 137 408 178 414
------- ------- ------- -------
Weighted Average Shares (diluted) 8,020 8,093 8,038 7,994
======= ======= ======= =======
</TABLE>
6. Comprehensive Income
In June 1997, the Financial Accounting Standards Board (FASB) issued SFAS
No. 130, "Reporting Comprehensive Income." The Company has adopted the
standard as of January 1, 1998. Total comprehensive income consists of the
following:
<TABLE>
<CAPTION>
For the three For the six
months ended months ended
Jun 30, Jun 30, Jun 30, Jun 30,
1998 1997 1998 1997
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net Income $ 323 $ 3,700 $ 3,448 $ 7,122
Translation Adjustment (132) 145 (741) (109)
------- ------- ------- -------
Total Comprehensive Income $ 191 $ 3,845 $ 2,707 $ 7,013
======= ======= ======= =======
</TABLE>
Translation adjustment represents the Company's only Other Comprehensive
Income item. Translation adjustment comprises unrealized gains/losses in
accordance with SFAS No. 52, "Foreign Currency Translation". The Company
has no intention of liquidating the assets of the foreign subsidiaries in
the foreseeable future.
8
<PAGE>
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
Total revenue was $24.1 million for the three months ended June 30, 1998
compared to $29.8 million for the three months ended June 30, 1997, and
$57.8 million for the six months ended June 30, 1998 compared to $57.6
million for the six months ended June 30, 1997. Net income was $.3 million
for the three months ended June 30, 1998 compared to $3.7 million for the
three months ended June 30, 1997, and $3.4 million for the six months ended
June 30, 1998 compared to $7.1 million for the six months ended June 30,
1997.
Information contained in this Quarterly Report on Form 10-Q and statements
that may be made in the future by the Company's management regarding future
industry trends, the Company's expected revenues, earnings and anticipated
gross margins, the Company's future development and introduction of
products, and the Company's future liquidity, development, and business
activities constitute forward looking statements that involve a number of
risks and uncertainties. The following are among the factors that could
cause actual results to differ materially from the forward looking
statements: business conditions and growth in the electronics industry and
general economies, both domestic and international, including conditions
precipitated by the Asian economies; uncertainty of market development;
dependence on a limited number of OEM customers; dependence on limited or
sole source suppliers; dependence on the relationship with Intel
Corporation ("Intel"); dependence on Intel's support of the embedded
computer market; lower than expected customer orders or variations in
customer order patterns due to changes in demand for customers' products
and customer and channel inventory levels; competitive factors, including
increased competition, new product offerings by competitors and price
pressures; the availability of parts and components at reasonable prices;
changes in product mix; dependence on proprietary technology; technological
difficulties and resource constraints encountered in developing new
products; and product shipment interruptions due to manufacturing
difficulties. The forward looking statements contained in this MD&A
regarding industry trends, product development and introductions, and
liquidity and future business activities should be considered in light of
these factors.
REVENUES
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------------- -------------------------------
(in thousands except % amounts) (in thousands except % amounts)
June 30, % June 30, June 30, % June 30,
1998 Change 1997 1998 Change 1997
-------- ------ -------- -------- ------ --------
<S> <C> <C> <C> <C> <C> <C>
Revenues $ 24,125 (19%) $ 29,796 $ 57,788 0% $ 57,626
</TABLE>
The decrease in revenues for the three months ended June 30, 1998 compared
to the three months ended June 30, 1997 was primarily caused by customers
delaying or canceling orders precipitated by the effects of the global
economic conditions in the electronics market. The lack of an increase in
revenues for the six months ended June 30, 1998 compared to the six months
ended June 30, 1997 resulted primarily from the lower revenue levels in the
three months ended June 30, 1998.
9
<PAGE>
COST OF GOODS SOLD
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------------- -------------------------------
(in thousands except % amounts) (in thousands except % amounts)
June 30, % June 30, June 30, % June 30,
1998 Change 1997 1998 Change 1997
-------- ------ -------- -------- ------ --------
<S> <C> <C> <C> <C> <C> <C>
Cost of Goods Sold $ 16,640 (7%) $ 17,875 $ 38,184 12% $ 34,060
As a % of Revenues 69% 60% 66% 59%
</TABLE>
As a percentage of revenues, cost of goods sold increased for the three and
six months ended June 30, 1998 compared to the three and six months ended
June 30, 1997 primarily as a result of the product mix consisting of a
larger portion of lower margin product relative to higher margin product
shipped and higher manufacturing costs relative to revenue levels during
the three and six months ended June 30, 1997.
RESEARCH AND DEVELOPMENT
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
--------------------- --------------------
(in thousands except % amounts) (in thousands except % amounts)
June 30, June 30, June 30, June 30,
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Research and Development $ 3,323 $ 2,742 $ 6,859 $ 5,549
As a % of Revenues 14% 9% 12% 10%
</TABLE>
The dollar increases in research and development expenses for the three and
six months ended June 30, 1998 compared to the three and six months ended
June 30, 1997, were primarily the result of increased investment in new
product development and costs of enhancements to existing products. The
Company continues to invest in new design wins for OEM customers and the
dollar increases reflect increases in the number of employees working in
research and development. Research and development increased as a
percentage of revenues due to lower relative levels of revenue in 1998
compared to 1997.
SELLING, GENERAL AND ADMINISTRATIVE
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
--------------------- --------------------
(in thousands except % amounts) (in thousands except % amounts)
June 30, June 30, June 30, June 30,
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Selling, General & Admin. $ 3,952 $ 3,757 $ 8,054 $ 7,595
As a % of Revenues 16% 13% 14% 13%
</TABLE>
Selling, general and administrative expenses have modestly increased in
dollar amount in the three and six months ended June 30, 1998 compared to
the three and six months ended June 30, 1997, primarily as a result of
increased personnel, facilities and travel costs to support higher levels
of design win efforts. Selling, general and administrative increased as a
percentage of revenue due to lower relative levels of revenue in 1998
compared to 1997.
10
<PAGE>
INTEREST INCOME, NET AND INCOME TAX PROVISION
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------------- -------------------------------
(in thousands except % amounts) (in thousands except % amounts)
June 30, % June 30, June 30, % June 30,
1998 Change 1997 1998 Change 1997
-------- ------ -------- -------- ------ --------
<S> <C> <C> <C> <C> <C> <C>
Interest Income, net $ 280 4% $ 270 $ 606 13% $ 534
Income Tax Provision $ 167 (92%) $ 1,992 $ 1,849 (52%) $ 3,834
</TABLE>
Interest income, net includes interest income, interest expense, bank
charges, capital asset losses and foreign currency transaction gains or
losses.
The percentage and dollar amount decrease in the income tax provision is
attributable to decreased net income before taxes in 1998 and a decrease in
the effective tax rate for the three months ended June 30, 1998.
YEAR 2000 Issues
As the Company's products are based on computer technology, the Company
recognizes the importance to its operations of Year 2000 issues and is
working to maintain the availability and integrity of its financial systems
and the reliability of its operational systems. In that regard, the Company
has already attempted to identify all internal information technology
("IT") and non-IT systems which may be affected by the Year 2000 issues, as
well as, third party IT and non-IT that the Company relies upon and the
third parties' Year 2000 readiness.
Within the last two years the Company has upgraded or replaced the software
packages underlying the Company's financial systems, major manufacturing
systems, internal and external communication systems, and desktop systems,
as appropriate, to address Year 2000 readiness issues. The Company has also
performed an in-depth analysis of all of its products and have provided,
via the Company's web page, an analysis by product of the products' Year
2000 readiness. In addition, the Company has been in contact with all major
external third party providers to assess their Year 2000 readiness; this
includes third parties who provide financial, payroll, communications,
component, and integration services to the Company.
Subsequent to performing the above steps, the Company has and will continue
to make certain investments in its systems, applications and products to
address Year 2000 issues. Expenditures to make these investments have not
been financially material to-date and are not anticipated to be material.
The Company believes that it has completed all of the basic analysis of its
Year 200 readiness, has completed the majority of system upgrades and
replacements it requires to be Year 2000 ready, and is now in the process
of evaluating non-material and non-mission critical applications. The
Company expects that it will continue to address Year 2000 readiness issues
up to and including the year 2000, and will react as appropriate to newly
identified issues.
The Company is in the process of establishing contingency plans for
material IT systems and third party providers that the Company relies upon.
At this time, the Company does not believe that these contingency plans
will be needed based upon preliminary diagnoses and testing of upgraded or
replaced systems.
11
<PAGE>
The above statements contain certain risks and uncertainties. Although the
Company has endeavored to thoroughly examine its Year 2000 readiness, there
is no assurance that it has identified all Year 2000 issues. These risks
and uncertainties could include the risk of unidentified bugs in the source
code of prepackaged or custom software, misrepresentation by third party
vendors, unidentified dependency upon a system that is not Year 2000 ready,
unidentified non-IT systems, or misdiagnosed Year 2000 readiness in
existing systems.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1998, the Company had $33.2 million in cash and cash
equivalents, which represents the Company's principal source of liquidity.
The Company had working capital of approximately $60.8 million. The Company
maintains a $10.0 million line of credit with a bank which expires October
1998. The Company has not drawn any funds under this line of credit. Net
cash provided by operating activities for the six months ended June 30,
1998 was $12.8 million as compared with $3.3 million for the six months
ended June 30, 1997 primarily as a result of an increase in depreciation
and amortization, decreases in accounts receivable, inventories and other
current assets, and increases in income taxes payable, accrued sales
discounts and other accrued liabilities. These increases were offset by
decreases in net income, other receivables and increases in accounts
payable and accrued wages and bonuses.
Capital expenditures were $2.5 million in the six months ended June 30,
1998 and $2.7 million for the six months ended June 30, 1997. Capital
expenditures for the six months ended June 30, 1998 were primarily for the
purchase of leasehold improvements and office furniture related to the
Company's corporate headquarters and manufacturing equipment.
The Company believes that existing cash and cash equivalents and cash from
operations will be sufficient to fund its operations for at least the next
12 months.
12
<PAGE>
PART II
OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
At the Company's Annual Meeting on May 19, 1998, the holders of the
Company's outstanding Common Stock took the actions described below. At
the Annual Meeting 7,886,294 shares of Common Stock were issued and
outstanding and entitled to vote.
1. The shareholders elected each of Dr. Glenford J. Myers, James F.
Dalton, Richard J. Faubert, C. Scott Gibson, Jean-Claude
Peterschmitt and Dr. William W. Lattin to the company's Board of
Directors, by the votes indicated below, to serve for the ensuing
year.
Dr. Glenford J. Myers
---------------------
6,775,492 shares in favor
28,466 shares against or withheld
0 abstentions
0 broker nonvotes
James F. Dalton
---------------
6,773,642 shares in favor
30,316 shares against or withheld
0 abstentions
0 broker nonvotes
Richard J. Faubert
------------------
6,772,292 shares in favor
31,666 shares against or withheld
0 abstentions
0 broker nonvotes
C. Scott Gibson
---------------
6,774,892 shares in favor
29,066 shares against or withheld
0 abstentions
0 broker nonvotes
13
<PAGE>
Jean-Claude Peterschmitt
------------------------
6,773,892 shares in favor
30,066 shares against or withheld
0 abstentions
0 broker nonvotes
Dr. William W. Lattin
---------------------
5,708,350 shares in favor
1,095,608 shares against or withheld
0 abstentions
0 broker nonvotes
Item 5. Other Information
In accordance with amendments adopted on May 21, 1998 to Rule 14a-4
under the Securities Exchange Act of 1934, if notice of a shareholder proposal
to be raised at the annual meeting of shareholders is received at the principal
executive offices of the Company after February 25, 1999, proxy voting on that
proposal when and if raised at the 1999 annual meeting will be subject to the
discretionary voting authority of the designated proxy holders. Any shareholder
proposal to be considered for inclusion in proxy materials for the Company's
1999 annual meeting must be received at the principal executive offices of the
Company no later than December 2, 1998.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RADISYS CORPORATION
BRIAN V. TURNER
-----------------------------------------
Date: August 11, 1998 Brian V. Turner
Vice President of Finance and
Administration and Chief
Financial Officer
(Principal Financial Officer)
15
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 33,185
<SECURITIES> 0
<RECEIVABLES> 19,790
<ALLOWANCES> 468
<INVENTORY> 18,653
<CURRENT-ASSETS> 73,706
<PP&E> 12,812
<DEPRECIATION> 8,881
<TOTAL-ASSETS> 92,687
<CURRENT-LIABILITIES> 12,688
<BONDS> 0
0
0
<COMMON> 51,967
<OTHER-SE> 27,801
<TOTAL-LIABILITY-AND-EQUITY> 92,687
<SALES> 57,788
<TOTAL-REVENUES> 57,788
<CGS> 38,184
<TOTAL-COSTS> 14,913
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 606
<INCOME-PRETAX> 5,297
<INCOME-TAX> 1,849
<INCOME-CONTINUING> 3,448
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,448
<EPS-PRIMARY> 0.44
<EPS-DILUTED> 0.43
</TABLE>
