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
EXCHANGE ACT OF 1934
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number: 1-10768
MEDIWARE INFORMATION SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
New York 11-2209324
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1121 Old Walt Whitman Road
Melville, New York 11747-3005
(Address of principal executive offices) (Zip Code)
(516) 423-7800
(Registrant's telephone number including area code)
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 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 February 10, 2000, there were 6,962,790 shares of Common Stock, $0.10 par
value, of the registrant outstanding.
<PAGE>
MEDIWARE INFORMATIONS SYSTEMS, INC.
INDEX
Page
----
PART I Financial Information
ITEM 1. Financial Statements
Consolidated Balance Sheets as of December 31, 1999
(Unaudited) and June 30, 1999 (Audited) ............................ 3
Consolidated Statements of Operations and Comprehensive Income
For the three and six months ended December 31,
1999 and 1998 (Unaudited) .......................................... 4
Consolidated Statements of Cash Flows
For the six months ended
December 31, 1999 and 1998 (Unaudited) ............................. 5
Notes to Financial Statements ..................................... 6
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations................................. 7
ITEM 3. Quantitative and Qualitative Disclosures About Market Risks......... 10
PART II Other Information
ITEM 2. Sales of Securities Not Registered Under the
Securities Act of 1933 ............................................. 10
ITEM 6. Exhibits and Reports on Form 8-K .................................. 10
Signature Page ............................................................. 11
Exhibit 11
Schedule of Computation of Net Income (Loss) Per Share ...................... 12
Exhibit 27
Financial Data Schedule ..................................................... 13
2
<PAGE>
MEDIWARE INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except shares)
<TABLE>
<CAPTION>
December 31, June 30,
1999 1999
------------ --------
(Unaudited) (Audited)
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 3,465 $ 3,556
Accounts receivable (net of allowance of $777 at
December 31, 1999 and $907 at June 30, 1999) 8,591 8,361
Inventories 475 403
Prepaid expenses and other current assets 451 568
Deferred tax asset 448 448
-------- --------
Total current assets 13,430 13,336
-------- --------
Fixed assets, net 1,901 1,883
Capitalized software costs, net 5,510 4,289
Goodwill, net 6,062 6,266
Purchased technology, net 1,950 448
Other long-term assets 140 126
-------- --------
Total Assets $ 28,993 $ 26,348
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Notes payable and current portion of long-term debt $ 1,104 $ 1,137
Accounts payable 1,151 1,115
Advances from customers 5,732 5,347
Accrued expenses and other current liabilities 3,212 2,554
-------- --------
Total current liabilities 11,199 10,153
Other long-term liabilities 139 279
-------- --------
Total liabilities 11,338 10,432
-------- --------
Stockholders' Equity
Preferred stock, $.01 par value; authorized 10,000,000
shares; none issued or outstanding -- --
Common stock, $.10 par value; authorized 12,000,000
shares; issued and outstanding; 6,969,000 shares at
December 31, 1999 and 6,146,000 at June 30, 1999 697 615
Additional paid-in capital 22,298 21,421
Accumulated deficit (5,313) (6,107)
Unearned compensation -- (11)
Accumulated other comprehensive (loss) (27) (2)
-------- --------
Total stockholders' equity 17,655 15,916
-------- --------
Total Liabilities and Stockholders' Equity $ 28,993 $ 26,348
======== ========
</TABLE>
See Notes to Consolidated Financial Statements.
3
<PAGE>
MEDIWARE INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
(Amounts in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
------------------- --------------------
1999 1998 1999 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues
System sales $ 2,062 $ 3,039 $ 4,384 $ 5,962
Services 4,992 3,897 9,673 7,102
-------- -------- -------- --------
Total revenues 7,054 6,936 14,057 13,064
-------- -------- -------- --------
Cost and Expenses
Cost of systems 843 916 1,555 1,817
Cost of services 1,522 1,085 3,099 1,992
Purchased research and development -- -- -- 4,553
Software development costs 989 858 2,111 1,521
Selling, general and administrative 3,034 3,055 6,079 5,663
-------- -------- -------- --------
Total costs and expenses 6,388 5,914 12,844 15,546
-------- -------- -------- --------
Operating income (loss) 666 1,022 1,213 (2,482)
Interest and other income 28 29 66 70
Interest (expense) (17) (13) (37) (106)
-------- -------- -------- --------
Earnings (loss) before provision for income taxes 677 1,038 1,242 (2,518)
Provision for income taxes (244) (155) (448) (305)
-------- -------- -------- --------
Net Earnings (Loss) 433 883 794 (2,823)
-------- -------- -------- --------
Other Comprehensive Income, net of tax
Foreign currency translation adjustment (15) -- (27) --
-------- -------- -------- --------
Comprehensive Income (Loss) $ 418 $ 883 $ 767 $ (2,823)
======== ======== ======== ========
Earnings (Loss) Per Common Share
Basic $ 0.07 $ 0.15 $ 0.13 $ (0.48)
======== ======== ======== ========
Diluted $ 0.06 $ 0.13 $ 0.11 $ (0.48)
======== ======== ======== ========
Weighted Average Common Shares Outstanding
Basic 6,344 6,049 6,258 5,840
======== ======== ======== ========
Diluted 7,201 7,057 7,176 5,840
======== ======== ======== ========
</TABLE>
See Notes to Consolidated Financial Statements.
4
<PAGE>
MEDIWARE INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Amounts in thousands)
<TABLE>
<CAPTION>
Six Months Ended December 31,
-----------------------------
1999 1998
------- -------
<S> <C> <C>
Cash Flows From Operating Activities
Net earnings (loss) $ 794 $(2,823)
Adjustments to reconcile net earnings (loss) to
net cash provided by operating activities:
Depreciation and amortization 1,096 653
Write-off of acquired research and development -- 4,553
Shares issued to directors 50 50
Compensatory stock options 11 20
Provision for doubtful accounts 99 15
Changes in operating assets and liabilities:
Accounts receivable (329) (1,352)
Inventories (72) 11
Prepaid and other 103 (232)
Accounts payable, accrued expenses and
customer advances 314 1,248
------- -------
Net cash provided by operating activities 2,066 2,143
------- -------
Cash Flows From Investing Activities
Acquisition of fixed assets (305) (665)
Capitalized software costs (1,793) (714)
Acquisition of technology (785) --
Acquisition of Informedics -- 653
------- -------
Net cash used in investing activities (2,883) (726)
------- -------
Cash Flows From Financing Activities
Principal payments of long-term debt and
capitalized leases (158) (3,750)
Proceeds from exercise of options and warrants 909 38
------- -------
Net cash provided by (used in) financing activities 751 (3,712)
------- -------
Foreign currency translation adjustments (25) (2)
------- -------
Net (Decrease) in Cash and Cash Equivalents (91) (2,297)
Cash and cash equivalents at beginning of period 3,556 4,681
------- -------
Cash and cash equivalents at end of period $ 3,465 $ 2,384
======= =======
Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest $ 94 $ 98
Income taxes $ 127 $ 71
Non-cash investing activities:
Accounts payable related to the purchase of technology $ 750 $ --
</TABLE>
See Notes to Consolidated Financial Statements.
5
<PAGE>
MEDIWARE INFORMATION SYSTEMS, INC., AND SUBSIDIARIES
NOTES TO UNAUDITED FINANICAL STATEMENTS
1. FINANCIAL STATEMENTS
In the opinion of management, the accompanying unaudited, consolidated,
condensed financial statements contain all adjustments necessary to present
fairly the financial position of the Company and its results of operations and
cash flows for the interim periods presented. Such financial statements have
been condensed in accordance with the applicable regulations of the Securities
and Exchange Commission ("SEC") and therefore, do not include all disclosures
required by generally accepted accounting principles. These financial statements
should be read in conjunction with the Company's audited financial statements
for the year ended June 30, 1999 included in the Company's annual report filed
on Form 10-KSB.
The results of operations for the three and six months ended December 31, 1999
are not necessarily indicative of the results to be expected for the entire
fiscal year.
2. EARNINGS (LOSS) PER SHARE
Basic earnings per share have been computed using the weighted average number of
shares of common stock of the Company ("Common Stock") outstanding for each
period presented. For the three and six months ended December 31, 1999, and the
three months ended December 31, 1998, the dilutive effect of stock options and
other common stock equivalents is included in the calculation of diluted
earnings per share using the treasury stock method. For the six months ended
December 31, 1998, common stock equivalents are not included in the calculation
of loss per share as the effect would be anti-dilutive.
3. ACQUISITIONS
In September, 1998, the Company acquired Informedics, Inc. ("Informedics") in
exchange for 439,525 shares of the Company's common stock on the basis of one
Company share for each 6.3 shares of Informedics' stock. The cost of the
acquisition, which was accounted for as a purchase, aggregated $7,100,000,
including acquisition costs of $801,000, assumed liabilities of $1,599,000 and
$4,700,000 of common stock issued and options assumed (based on the market price
of the Company's common stock in December 1997, when the terms of the
acquisition agreement were agreed to). Assets acquired aggregated $2,547,000,
including $917,000 of goodwill, $498,000 of technology and $653,000 of cash.
In November 1999, the company executed an agreement with Carter BloodCare
(Dallas, Texas) for the purchase of LifeTrak(TM), a comprehensive blood center
software package. LifeTrak(TM) was developed by Carter BloodCare and has been in
use there for over three years. The LifeTrak(TM) Lab and Distribution modules
were 510(k) cleared by the Food and Drug Administration ("FDA") prior to the
acquisition. In December 1999, the Donor module received FDA 510(k) clearance.
The Company is marketing LifeTrak(TM) on a world-wide basis. The purchase price
aggregated $1,500,000, including $750,000 paid upon delivery of the product, and
installments of $375,000 due upon clearance by the FDA of the Donor system and
on June 30, 2000.
6
<PAGE>
The Company also entered into a license agreement granting Carter BloodCare the
right to continue use of the software in their blood center and laboratory
facilities, and providing for additional purchase price payments to Carter
BloodCare by the Company in an amount equivalent to 5% of LifeTrak(TM) software
sales for a five-year term. The purchase price was attributed to purchased
technology which is being amortized over its expected useful life of five years.
4. RELATED PARTY TRANSACTIONS
During the quarter ended December 31, 1999, the Chairman of the Board of
Directors executed a total of 674,695 stock warrants and 15,000 stock options,
increasing his ownership to 14.9% of the outstanding stock of the Company, as
computed under Rule 13d-3 of the Securities and Exchange Commission. The
warrants exercised were originally issued in connection with the fiscal 1995
bridge financing at an exercise price of $.50 per share for 545,000 shares and
$1.25 per share for 129,695 shares. The stock options were exercised at a price
of $5.25 per share and were originally granted as compensation for service as
the Chairman of the Board. The Company received aggregate proceeds of $513,369
upon the above mentioned exercise.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Forward-Looking Statements
Certain statements made in or incorporated into this 10-Q may constitute
"forward-looking" statements within the meaning of the Private Securities
Litigation Reform Act of 1995, as the same may be amended from time to time (the
"Act") and in releases made by the SEC from time to time. Such forward-looking
statements are not based on historical facts and involve known and unknown
risks, uncertainties and other factors which may cause the actual results of the
Company to be materially different from any future results expressed or implied
by such forward-looking statements. These risks and uncertainties include: (i)
fluctuations in quarterly operating results, (ii) reliance on third party
software, (iii) dependence on third party marketing relationships, (iv) changes
in the healthcare industry, (v) significant competition, (vi) the Company's
ability to manage its rapid growth, (vii) the effects of government regulations
on the Company, (viii) product related liabilities, (ix) risks associated with
system errors and warranties. Amplification of such risks may be found in the
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" section of the Company's Annual Report on Form 10-KSB for the fiscal
year ended June 30, 1999. The Company does not intend to update publicly any
forward-looking statements.
Results of Operations
Total Company revenues increased by 1.7% or $118,000 and 7.6% or $993,000 for
the three and six months ended December 31, 1999, respectively, as compared to
the same periods a year ago. For the quarter, increased revenues in the Blood
Bank and JAC divisions were offset by flat or declining revenues in the Pharmacy
and Operating Room divisions as a result of declines in new system sales. The
year-to-date increase in revenues is primarily attributable to an increase in
service revenues and a full six months of operations during fiscal 2000 for
Informedics, which was acquired late in the first quarter of fiscal 1999.
System sales decreased 32% or $977,000 and 26.5% or $1,578,000 for the quarter
and year-to-date periods compared to fiscal 1999. The decrease in system sales
resulted primarily from a decrease in new business in the six-month period ended
December 31, 1999. The Company believes the system sales were negatively and
primarily impacted by purchasing decision delays related to Year 2000 issues,
and additionally, by delays experienced in the delivery of new product releases.
Management believes that interest in new system purchases has increased as a
result of the passing of Y2K. However, there can be no assurances that system
sales will rebound to levels seen prior to the publicly reported industry-wide
Y2K slowdown.
7
<PAGE>
Service revenues increased 28% or $1,095,000 for the quarter and 36.2% or
$2,571,000 for the six months compared to last year. Increases occurred in all
product lines and are attributable to increased levels of implementation
activity related to Y2K upgrades and implementation of the Company's WORx(TM)
Drug Therapy Management System to meet clients' Y2K deadlines. Additionally, the
year-to-date increase was impacted by a full six months of Informedics'
operations.
Cost of systems includes the cost of computer hardware and sublicensed software
purchased from computer and software manufacturers by Mediware as part of its
complete system offering. These costs can vary as the mix of revenue varies
between high margin proprietary software and lower margin computer hardware and
sublicensed software components. Cost of systems was 40.9% of related system
sales for the second quarter and 35.5% year to date compared to 30.1% and 30.5%
for the same periods last year. The increase in cost of systems was primarily
driven by a higher volume of low margin product upgrades in preparation for Y2K.
Cost of services includes the salaries of client service personnel and
communications expenses along with the direct client service department
expenses. Cost of services increased by $437,000 or 40.3% for the second quarter
and $1,107,000 or 55.6% year to date compared to the same periods in fiscal 1999
on the increase in service revenues over last year. As a percent of related
service revenues, cost of services increased to 30.5% from 27.8% for the second
quarter and to 32.0% from 28.0% year to date. This increase in cost primarily
reflects an increase in technical field installation and customer support
activities related to the Company's Pharmacy and Blood Bank divisions.
Software development costs include salaries, consulting, documentation, office
and other related expenses incurred in product development along with
amortization of software development costs. Software development costs increased
15.3% for the quarter to $989,000 and 38.9% for the six months to $2,111,000 for
the same periods last year. Total expenditures for software development,
including both capitalized and non-capitalized portions and excluding
capitalized software amortization were $1,634,000 and $3,332,000, respectively,
for the three and six months ended compared to $1,052,000 and $2,044,000 in
fiscal 1999. The increased spending reflects development costs for the Pharmacy
Division's WORx product line, significant investing in new development of the
Company's core blood bank product offerings and, to a lesser degree, development
related to the Operating Room Division's PCMWin, Windows client/server based
line of products.
Selling, general and administrative expenses remained fairly constant for the
quarter compared to last year at $3,034,000 this year versus $3,055,000 in
fiscal 1999. For the six months ended December 31, 1999, selling, general and
administrative expenses increased $416,000 or 7.3% to $6,079,000. The increase
in cost was primarily due to increased selling related expenses as well as the
inclusion of a full six months of operations of the Informedics product center.
Interest expenses increased by 30.8% for the three months and decreased by 65.1%
for the six months ended December 31, 1999, compared to the prior year to
$17,000 and $37,000 respectively. The
8
<PAGE>
decrease reflects the repayment during fiscal 1999 of the outstanding balance
remaining from the acquisition of the Pharmakon and JAC divisions of Continental
Healthcare Systems, Inc.
Net earnings were $433,000 for the quarter, a 51% or $450,000 decline from the
second quarter last year. For the current six months ended, net earnings
increased $3,617,000 to $794,000 compared to a net loss of $2,823,000 at
December 31, 1998. Excluding a September 1998 one-time charge for in-process
research and development related to the acquisition of Informedics, net earnings
decreased $936,000 or 54.1%, from $1,730,000.
Capital Resources and Liquidity
As of December 31, 1999 the Company had cash and cash equivalents of $3,465,000,
a decrease of $91,000 from the fiscal year end June 30, 1999. Net working
capital was $2,230,000 and the current ratio was 1:20:1. The Company generated
net cash from operations of $2,066,000 and $2,143,000 during the six-month
periods ended December 31, 1999 and 1998, respectively. The decrease in net cash
from operations is due to a decrease in net income resulting from a slow down in
software purchases by customers due to concerns about Year 2000 readiness.
The Company invested $2,883,000 and $726,000 during the six-month period ended
December 31, 1999 and 1998, respectively. The principal uses of cash for
investing activities during the current period included purchases of fixed
assets, investments in product development, and the payment of $750,000 towards
the purchase of the LifeTrak(TM) blood center software package to enhance the
Company's suite of blood bank product offerings. The balance of $750,000 is
payable one-half upon 510(k) approval and one-half at June 30, 2000. During the
period, the Company spent $305,000 on purchases of fixed assets primarily
related to equipment and software to accommodate increases in employees,
upgrading aged systems and for use in product development activities. For the
same period in 1998, fixed asset purchases of $665,000 were primarily related to
the Pharmacy office relocation and expansion of facilities. The Company
capitalized new product development of $1,793,000 and $714,000 for the periods
ended December 31, 1999 and 1998, respectively. The investments in product
development were related to continuing new development in the Pharmacy and Blood
Bank divisions. The Company plans to continue enhancing its products and
investing in its next generation information systems.
Cash flows from financing activities for the period ended December 31, 1999
related to the exercise of options and warrants which aggregated to $909,000.
Cash used in financing activities for the period ended December 31, 1999 include
a repayment of notes payable to a director in the amount of $100,000 and
repayment of notes payable to a non-affiliate in the amount of $50,000. Cash
used in financing activities for the period ended December 1998 related to the
repayment of a promissory note issued to IHS pursuant to the acquisition of
their Pharmakon and JAC operations. During the period ended December 31, 1999,
the Company received $513,000 upon the exercise by the Chairman of the Board of
Directors of stock options and warrants totaling 690,000 shares of common stock.
Additionally, the Company received approximately $404,000 upon the exercise of
127,000 stock options.
Exclusive of activities involving acquisitions of products or companies that
complement or augment the existing line of products, management believes that
existing funds and cash generated from operations will be sufficient to meet
operating requirements through December 31, 2000. However, there can be no
assurances the Company will continue to operate at current cash levels
long-term, and it may be necessary to seek financial arrangements to continue
the plan of significant investments into the Company's core product lines. The
Company's liquidity is influenced by the Company's ability to perform in a
competitive industry that was impacted by Y2K-readiness concerns and the
deferral of purchases and implementations of systems. Factors that may affect
liquidity are the ability to maintain or improve the sales cycle, and the
ability to collect cash from clients as implementations of systems progress.
9
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
For a discussion of quantitative and qualitative disclosures about market risks,
please see the Management's Discussion and Analysis of Financial Condition and
Results of Operations section of the Company's Annual Report on Form 10-KSB for
the fiscal year ended June 30, 1999.
PART II OTHER INFORMATION
ITEM 2. SALE OF SECURITIES NOT REGISTERED UNDER SECURITIES ACT OF 1933 ("Act")
Number of Shares
Date of Sale of Common Stock Consideration
------------ ---------------- -------------
December 17, 1999 545,000 $ 272,500
December 17, 1999 129,695 $ 162,119
No underwriters or other purchasers were involved. All securities were sold for
cash upon the exercise of warrants to purchase Common Stock acquired in 1995.
The sale of the above described shares was exempt from registration under the
Act by reason of Section 4(2) of the Act. All shares were acquired for
investment and not for distribution.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a). Exhibits
Exhibit 11. Schedule of Computation of Net Income (Loss) Per Share
Exhibit 27. Financial Data Schedule
(b). Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the quarter ended
December 31, 1999.
10
<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.
MEDIWARE INFORMATION SYSTEMS, INC.
----------------------------------
(Registrant)
February 18, 2000 /s/ John Esposito
- ----------------- ---------------------------------------
(Date) John Esposito
President and Chief Executive Officer
February 18, 2000 /s/ Kerry Robison
- ----------------- --------------------------------------
(Date) Kerry Robison
Chief Financial and Accounting Officer
11
EXHIBIT 11
MEDIWARE INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
SCHEDULE OF COMPUTATION OF NET INCOME (LOSS) PER SHARE
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
------------------------------- -------------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Basic Earnings (Loss) Per Share
Net earnings (loss) $ 433,000 $ 883,000 $ 794,000 $(2,823,000)
Weighted-average shares:
Outstanding 6,344,000 6,049,000 6,258,000 5,840,000
----------- ----------- ---------- -----------
Basic Earnings (Loss) Per Share $ 0.07 $ 0.15 $ 0.13 $ (0.48)
=========== =========== ========== ===========
Diluted Earnings (Loss) Per Share
Net earnings (loss) $ 433,000 $ 883,000 $ 794,000 $(2,823,000)
Weighted-average shares:
Outstanding 6,344,000 6,049,000 6,258,000 5,840,000
Options and Warrants 857,000 1,008,000 918,000 --
----------- ----------- ---------- -----------
7,201,000 7,057,000 7,176,000 5,840,000
----------- ----------- ---------- -----------
Diluted Earnings (Loss) Per Share $ 0.06 $ 0.13 $ 0.11 $ (0.48)
=========== =========== ========== ===========
</TABLE>
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM MEDIWARE'S
QUARTERLY REPORT TO SHAREHOLDERS FOR THE SIX MONTHS ENDED DECEMBER 31, 1999 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> JUN-30-2000
<PERIOD-START> JUL-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 3465
<SECURITIES> 0
<RECEIVABLES> 8,591
<ALLOWANCES> 777
<INVENTORY> 475
<CURRENT-ASSETS> 13430
<PP&E> 4595
<DEPRECIATION> 2695
<TOTAL-ASSETS> 28993
<CURRENT-LIABILITIES> 11199
<BONDS> 139
0
0
<COMMON> 697
<OTHER-SE> 16958
<TOTAL-LIABILITY-AND-EQUITY> 28993
<SALES> 14057
<TOTAL-REVENUES> 14057
<CGS> 4654
<TOTAL-COSTS> 12844
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 64
<INTEREST-EXPENSE> 37
<INCOME-PRETAX> 1242
<INCOME-TAX> 448
<INCOME-CONTINUING> 794
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 794
<EPS-BASIC> .13
<EPS-DILUTED> .11
</TABLE>
