<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
for the quarterly period ended April 27, 1996
Commission File Number 0-19558
CENTIGRAM COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 94-2418021
(State of incorporation) (I.R.S. Employer
Identification Number)
91 East Tasman Drive
San Jose, California 95134
(Address of principal executive offices)
Registrant's telephone number, including area code: (408) 944-0250
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
--- ---
The number of outstanding shares of the Registrant's Common Stock as of May 24,
1996 was 6,831,000.
<PAGE> 2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Centigram Communications Corporation
Consolidated Balance Sheets
(In thousands, except share and per share data)
<TABLE>
<CAPTION>
April 27, October 28,
1996 1995
---------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and equivalents $ 20,721 $ 10,633
Short-term investments 25,841 45,082
Accounts and notes receivable, net 24,131 18,330
Inventories 8,652 5,821
Deferred tax assets, net 2,103 2,103
Other current assets 1,971 1,505
---------- ------------
Total current assets 83,419 83,474
Property and equipment, net 13,563 12,013
Intangible assets, net 2,191 2,379
Deposits and other assets 1,426 1,151
---------- ------------
$ 100,599 $ 99,017
---------- ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 9,419 $ 6,953
Accrued compensation 3,957 4,092
Accrued expenses and other liabilities 7,182 7,940
---------- ------------
Total current liabilities 20,558 18,985
Capital lease and long-term obligations 157 232
Commitments and contingencies Stockholders' equity:
Preferred stock, $.001 par value, 1,000,000 authorized;
none outstanding
Common stock, $.001 par value, 25,000,000 authorized;
6,830,000 and 6,679,000 outstanding 7 7
Note receivable from officer (300) --
Additional paid-in capital 87,161 85,808
Accumulated deficit (6,796) (5,992)
Unrealized loss on investments (159) (14)
Cumulative translation adjustment (29) (9)
---------- ------------
Total stockholders' equity 79,884 79,800
---------- ------------
$ 100,599 $ 99,017
========== ============
</TABLE>
See accompanying notes.
2
<PAGE> 3
Centigram Communications Corporation
Consolidated Statements of Operations
(In thousands, except per share data--unaudited)
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
April 27, April 29, April 27, April 29,
1996 1995 1996 1995
------------ ---------- ---------- -----------
<S> <C> <C> <C> <C>
Net revenue $ 24,533 $ 16,450 $ 48,546 $ 31,366
Costs and expenses:
Cost of goods sold 9,727 5,058 18,155 9,397
Research and development 4,961 3,508 9,535 7,017
Selling, general and administrative 11,706 8,743 22,675 17,179
------------ ---------- ---------- -----------
26,394 17,309 50,365 33,593
------------ ---------- ---------- -----------
Operating loss (1,861) (859) (1,819) (2,227)
Other income and expense, net 550 541 1,071 1,057
------------ ---------- ---------- -----------
Loss before income taxes (1,311) (318) (748) (1,170)
Provision (benefit) for income taxes 0 2 56 (80)
------------ ---------- ---------- -----------
Net loss $ (1,311) $ (320) $ (804) $ (1,090)
------------ ---------- ---------- -----------
Net loss per share $ (0.19) $ (0.05) $ (0.12) $ (0.17)
------------ ---------- ---------- -----------
Common shares used in computing
per share amounts 6,806 6,530 6,767 6,508
============ ========== ========== ===========
</TABLE>
See accompanying notes.
3
<PAGE> 4
Centigram Communications Corporation
Consolidated Statements of Cash Flows
(In thousands--unaudited)
<TABLE>
<CAPTION>
Six Months Ended
April 27, April 29,
1996 1995
------------ ----------
<S> <C> <C>
Cash and equivalents, beginning of period $ 10,633 $ 10,836
------------ ----------
Cash flows from operations:
Net loss (804) (1,090)
Depreciation and amortization 3,464 2,447
Accounts and notes receivable (5,801) 7,467
Inventories (2,831) (155)
Other assets (741) (312)
Accounts payable 2,466 (814)
Other liabilities and accrued expenses (864) (1,240)
------------ ----------
(5,111) 6,303
------------ ----------
Cash flows from investing:
Purchase of short-term investments (54,529) (24,204)
Proceeds from sale of short-term investments 73,625 26,768
Purchases of property and equipment (4,846) (3,929)
Purchases of other assets -- (1,350)
------------ ----------
14,250 (2,715)
------------ ----------
Cash flows from financing:
Proceeds from sale of common stock, net of
issuance costs 1,353 2,151
Note receivable from officer (300) --
Principal payments on capital
leases and long-term obligations (104) (191)
------------ ----------
949 1,960
------------ ----------
Net change in cash and equivalents 10,088 5,548
------------ ----------
Cash and equivalents, end of period $ 20,721 $ 16,384
============ ==========
</TABLE>
See accompanying notes.
4
<PAGE> 5
Centigram Communications Corporation
Notes to Consolidated Financial Statements
(unaudited)
BASIS OF PRESENTATION
The accompanying consolidated financial statements have been prepared by the
Company without audit and reflect all adjustments (consisting of normal
recurring adjustments) which are, in the opinion of management, necessary to
reflect a fair statement of the results for the interim periods. For further
information, refer to the audited Consolidated Financial Statements and
footnotes thereto incorporated by reference in the Company's Annual Report on
Form 10-K for the fiscal year ended October 28, 1995.
On August 1, 1995 the Company changed its fiscal year-end from the Saturday
following September 30 to a fiscal year of 52 or 53 weeks ending on the Saturday
nearest October 31. Because of this change, results for the second quarter and
first six months of fiscal 1995 previously reported on Form 10-Q have been
restated to a second quarter and six months ended April 29, 1995.
The results of operations for the quarter and six months ended April 27, 1996
may not necessarily be indicative of the results for the fiscal year ending
November 2, 1996 or any future period.
INVENTORIES
Inventories consisted of (in thousands):
<TABLE>
<CAPTION>
April 27, October 28,
1996 1995
--------------- -----------------
<S> <C> <C>
Raw materials $3,644 $2,516
Work-in-process 3,281 2,010
Finished goods 1,727 1,295
--------------- -----------------
$8,652 $5,821
=============== =================
</TABLE>
5
<PAGE> 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Centigram Communications Corporation
RESULTS OF OPERATIONS
Net revenue for the second quarter of fiscal 1996 ended April 27, 1996 was 49%
higher than net revenue for the corresponding quarter of fiscal 1995 and 2%
above net revenue for the first quarter of 1996. The increase in net revenue
from the second quarter of fiscal 1995 reflects higher sales of both large and
small system products and services, offset in part by lower sales of system
upgrade and expansion products. Net revenue for the quarter also included
significant sales of the Company's recently introduced Series 6 product line,
offset by lower sales of earlier generations of products. Net revenue for the
quarter included higher sales to domestic and export customers and to service
provider and customer premises equipment (CPE) customers, as compared to the
second quarter of fiscal 1995. The increase in net revenue from the first
quarter of fiscal 1996 reflects higher sales of the Company's small system
configurations and services, offset in part by lower sales of system upgrade and
expansion products, and higher sales to CPE customers largely offset by lower
sales to service provider and export customers.
Net revenue for the first six months of fiscal 1996 was 55% higher than net
revenue for the comparable 1995 period reflecting higher sales of both large and
small system products and services, offset in part by lower sales of upgrade and
expansion products as well as higher sales to CPE and service provider customers
and higher export sales in the 1996 period. There can be no assurance that the
market for voice processing products will grow in future periods at its
historical percentage rate or that certain market segments will not decline.
Further, there can be no assurance that the Company will be able to increase or
maintain its market share in the future or to achieve historical growth rates.
(See Certain Trends and Uncertainties)
Gross margin was 60% of net revenue in the second quarter of fiscal 1996 as
compared to 69% in the corresponding quarter of 1995 and 65% in the first
quarter of 1996. The decline in gross margin from the prior year's second
quarter primarily reflected lower margins on large system and upgrade and
expansion products and a lower percentage of sales derived from these products,
both of which carry higher margins than smaller system products. In addition,
during the second quarter of 1996 the Company had higher duty costs related to
its export business as well as higher retrofit provisions. The lower gross
margin as compared to the first quarter of 1996 reflects lower margins on large
system and system upgrade and expansion products, a lower percentage of sales
being represented by upgrade and expansion products, higher duty costs and
retrofit provisions, and a higher mix of sales of the Company's small system
products which typically carry lower gross margins, offset in part by lower
warranty costs. Gross margin for the first six months of fiscal 1996 was 63% of
net revenue as compared to 70% in the first six months of fiscal 1995. This
comparison reflects higher warranty, retrofit, and duty costs, lower margins on
the Company's large system and upgrade and expansion products, and a lower mix
of upgrade and expansion products, offset in part by higher margins on the
Company's small system products.
6
<PAGE> 7
The Company's gross margin can be affected by a number of factors, including
changes in product or distribution channel mix, cost and availability of parts
and components, and competitive pressures on pricing. The Company has
experienced increasing pricing pressure in all market segments, in particular
with respect to its smaller product configurations, from other PC-based systems,
and recently with respect to its larger system configuration. The Company
expects this pricing pressure to continue. In addition, the Company anticipates
continuing to offer price incentives for customers to upgrade from prior
generations of the Company's products to Series 6 products. Further,
distributors purchase products at discounts, and the Company's margins can
therefore vary depending upon the mix of distributor and direct end user sales
in any particular fiscal period. The Company anticipates that this mix will
continue to fluctuate in future periods. Gross margins are also dependent on
discounts selectively provided to customers in competitive sales situations. As
a result of the above factors, gross margin fluctuations are difficult to
predict, and gross margins may decline from current levels in future periods.
(See Certain Trends and Uncertainties)
Research and development (R&D) expenses increased 41% in the second quarter of
fiscal 1996 as compared to the corresponding quarter of 1995 and were 8% above
R&D expenses for the first quarter of 1996. The increases in R&D expenses
reflect general expansion of the Company's product development programs
including staffing and depreciation. R&D expenses represented 20%, 21%, and 19%
of net revenue, respectively, in the second quarter of 1996, the second quarter
of 1995, and the first quarter of 1996. The Company believes that ongoing
development of new products and features is required to maintain and enhance its
competitive position. The Company is continuing major product development
programs that have caused substantial increases in R&D expenses, and the Company
expects such higher expense levels to continue, notwithstanding the level of
revenue realized in future quarters. Accordingly, while the Company expects to
control expenses where possible in forthcoming quarters, its R&D expenses may
continue to increase.
Selling, general and administrative (SG&A) expenses for the second quarter of
fiscal 1996 were 34% above SG&A expenses in the second quarter of 1995 and 7%
above the first quarter of 1996. These increases in SG&A expenses reflect
general expansion of the Company's sales, marketing and customer support
programs, including increases in salaries, commissions and travel. The
comparison with the second quarter of fiscal 1995 also reflects lower litigation
expenses during the current fiscal year. SG&A expenses for the first six months
of fiscal 1996 were 32% above the comparable fiscal 1995 period. This increase
also reflects general expansion of the Company's sales, marketing and customer
support programs, offset in part by lower litigation expenses. The Company
believes that continued investments in sales, marketing and customer support,
particularly in export markets, are essential to maintaining its competitive
position. Accordingly, while the Company expects to control expenses where
possible in forthcoming quarters, SG&A expenses may increase in future periods.
The Company did not record a tax benefit for the loss before income taxes at the
domestic statutory tax rate for the second quarter and first six months of
fiscal 1996 and the second quarter
7
<PAGE> 8
and first six months of fiscal 1995 because deferred tax assets based on
recoverable income taxes were recorded in prior periods.
LIQUIDITY AND CAPITAL RESOURCES
During the first six months of fiscal 1996, the Company used $5,111,000 in cash
for operating activities, primarily for higher receivables and inventories,
offset in part by income before depreciation and amortization and higher
accounts payable. The Company generated $1,750,000 in cash from operating
activities in the second quarter of fiscal 1996, primarily from income before
depreciation and amortization, lower accounts receivable and higher accrued
liabilities and expenses, offset in part by higher inventories. The sum of cash
and equivalents and short-term investments declined $9,153,000 during the first
six months of fiscal 1996, reflecting primarily cash used for operating
activities and purchases of property and equipment, offset in part by proceeds
from sales of stock under employee stock programs. At April 27, 1996 the Company
had $46,562,000 in cash and equivalents and short-term investments.
In addition, the Company has a $10,000,000 unsecured bank line of credit that
expires May 1, 1997. Any borrowings under this line would bear interest at the
bank's reference rate (8.25% at April 27, 1996). The loan agreement requires the
Company to maintain certain financial ratios, minimum working capital, minimum
tangible net worth, and financial performance, and requires the bank's consent
for the payment of cash dividends. There were no borrowings outstanding under
the line as of April 27, 1996.
The Company currently expects to spend approximately $10,000,000 for capital
equipment during fiscal 1996. The Company may finance a portion of these
expenditures through leasing arrangements.
The Company currently believes, notwithstanding its loss and accumulated
deficit, that cash generated from operations and credit under its line of
credit, together with its existing cash and equivalents and short-term
investments, will be sufficient to support the Company's working capital and
capital equipment purchase requirements at least through the next 12 months.
CERTAIN TRENDS AND UNCERTAINTIES
The Company has in the past experienced and will likely in the future experience
substantial fluctuations in quarterly operating results. The Company generally
has no long-term order commitments from its customers, and a significant portion
of bookings and shipments in any quarter has historically occurred near the end
of the quarter. Accordingly, the Company has historically operated with very
little backlog, and revenue has been difficult to predict. In addition, the
portion of backlog shippable in the next quarter varies over time and the
Company's backlog declined during each of the first two quarters of fiscal 1996.
As a result, revenue in future quarters will depend largely on the level of
orders received during such quarters. The Company has committed to significant
investments in new product and channel development,
8
<PAGE> 9
and has increased its expense levels in these areas notwithstanding recent
revenue levels. Accordingly, there can be no assurances that the Company will
reduce losses or achieve profitability in fiscal 1996.
If new order bookings do not meet expected levels, or if the Company experiences
delays in shipments at the end of a quarter, operating results would be
adversely affected, and these developments may not become apparent to the
Company until near or at the end of a quarter. Net revenue can also be affected
by product sales mix, distribution mix, the size and timing of customer orders
and shipments, customer returns and reserves provided therefore, competitive
pricing pressures, the effectiveness of key distributors in selling the
Company's products, changes in distributor inventory levels, the timing of new
product introductions by the Company and its competitors, regulatory approvals,
and the availability of components for the Company's products, each of which is
difficult to predict accurately. Each of such factors has in the past affected
the Company's quarterly revenue.
A significant portion of the Company's net revenue is attributable to a limited
number of customers. The Company's top five customers, representing a
combination of major distributors and service providers, accounted for
approximately 39%, 48% and 42% of the Company's net revenue in the second
quarter of fiscal 1996 and the second quarter of fiscal 1995, and for all of
fiscal 1995, respectively, although the Company's five largest customers were
not the same in the three periods. Any material reduction in orders from one or
more such customers or the cancellation or deferral of any significant portion
of backlog could have an adverse effect on net revenue and operating results.
Such concentration of sales typically results in a corresponding concentration
of accounts receivable. Although the Company has established reserves for
uncollectible accounts, the inability of any large customer to pay the Company
could have a material adverse impact on the Company's financial position,
results of operations and cash flows.
The Company's gross margin can be affected by a number of factors, including
changes in product, distribution channel and customer mix, cost and availability
of parts and components, royalty obligations to suppliers of licensed software,
provisions for warranty, retrofits, and excess and obsolete inventory, customer
returns, and competitive pressures on pricing. The Company has experienced
increasing competitive pricing pressure in all markets and expects this pricing
pressure to continue. In fiscal 1994 and fiscal 1995, and in the second quarter
of fiscal 1996, the Company experienced a change in product mix in favor of CPE
sales, which typically generate lower gross margins than sales to service
providers. Further, distributors purchase products at discounts, and the
Company's margins can therefore vary depending upon the mix of distributor and
direct end user sales in any particular fiscal period. The Company anticipates
that its sales mix will fluctuate in future periods. Further, sales of the
Company's recently released Series 6 product line have and may continue to
adversely affect gross margins because of additional costs typically associated
with introducing a new product line into manufacturing and pricing incentives
directed at encouraging customers to upgrade to Series 6 products from prior
generations of Company products. As a result of the above factors, gross margin
fluctuations are difficult to predict, and gross margins may decline from
current levels in future periods.
9
<PAGE> 10
The Company's future success will depend in part upon the ability of the Company
to continue to introduce new features and products as the Company's markets
evolve, new technologies become available, and customers demand additional
functionality. The Company's competitors continue to add functionality to their
products, and any failure by the Company to introduce in a timely manner new
products and features that meet customer requirements would adversely affect the
Company's operating results and cash flows. The Company's ability to develop
such new features and products depends in large measure on its ability to hire
and retain qualified technical talent and outside contractors in highly
competitive markets for such services. There can be no assurance that the
Company's product development efforts will be successful, or that it will be
able to introduce new products in a timely manner. In this regard, the Company
has recently released its Series 6 platform, a significant new product, after
experiencing delays in its introduction. Any material additional delays in the
introduction and market acceptance of such products would be adverse to the
Company's business. Moreover, customers' expectations of the introduction of new
products by the Company or its competitors can adversely affect sales of current
products. In addition, upon the introduction of new products, the Company could
be subject to higher customer returns with respect to prior generations of
products, which could adversely affect financial position, operating results and
cash flows.
The Company's future operating results are dependent to a considerable extent
upon the success of its recently announced Series 6 product line. The Company
faces multiple risks in this regard. If the Company were to experience delays in
completing the development of certain features of the Series 6 product line
which have not yet been completed; if the Series 6 product line were not to
achieve widespread acceptance in the Company's markets; if certain of the
Company's large distributors which have yet commenced vigorous Series 6 sales
programs do not do so in a timely manner; if the Company were to experience
manufacturing problems with Series 6 products that inhibited its ability to
manufacture such products reliably, cost-effectively and in high volume; or if
Series 6 products were to experience extensive technical problems in customer
installations, the Company's financial position, operating results and cash
flows would be adversely and materially affected. Such effect would be
particularly significant because the introduction of Series 6 products has
materially reduced sales of the Company's prior generations of products.
The Company presently uses third parties to perform printed circuit board and
subsystem assembly. In addition, although the Company has not experienced
significant problems with third-party manufacturers in the past, there can be no
assurance that such problems will not develop in the future. Although the
Company generally uses standard parts and components for its products, certain
microprocessors, line cards, application cards and other semiconductor devices
and other components are available from sole sources. Other components,
including power supplies, disk drives, certain other semiconductor devices and
subcontracted line card assemblies, are presently available or acquired from a
single source or from limited sources. The Company has been notified by
suppliers that certain components will no longer be manufactured. To date, the
Company has been able to obtain adequate supplies of these components in a
timely manner from existing sources or, when necessary, from alternative sources
of supply. However, the inability to develop such alternative sources if and as
required in the future, to obtain sufficient sole or limited source components
as required, or to locate alternatives to discontinued
10
<PAGE> 11
parts would have a material adverse affect on the Company's operating results
and cash flows. In addition, the Company's products are dependent on the QNX
software operating system, a multitasking, real-time operating system for Intel
microprocessor-based computers. In future periods, the Company's products may
become increasingly dependent on software licensed from third party suppliers.
There can be no assurance such licenses will continue to be available to the
Company as needed or at commercially reasonable prices.
In recent years, stock markets have experienced extreme price and volume trading
volatility. This volatility has had a substantial effect on the market prices of
securities of many high technology companies for reasons frequently unrelated to
the operating performance of the specific companies. These broad markets
fluctuations may adversely affect the market price of the Company's common
stock. In addition, the trading price of the Company's common stock could be
subject to wide fluctuations in response to quarter-to-quarter variations in
operating results, announcements of new products or technological innovations by
the Company or its competitors, and general conditions in the computer and
communications industries.
From time to time the Company may make statements in both oral and/or written
communications, including this Form 10-Q. Such statements are just predictions
and actual events or results may differ materially. The reader is referred to
the documents the Company files from time to time with the Securities and
Exchange Commission, specifically the Company's last filed Form 10-K and this
Form 10-Q, particularly pages 6 through 11. These documents contain and identify
important factors that could cause the actual results to differ materially from
those contained in the Company's projections or forward-looking statements.
11
<PAGE> 12
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In June 1995, Gilbarco, Inc. (Gilbarco) sued the Company, seeking an injunction
and unspecified damages based on allegations that the Company's products
infringe a certain Gilbarco patent. The Company believes it does not infringe a
valid and enforceable Gilbarco patent.
Gilbarco had filed suit against Octel Communications Corporation (Octel) in
1994, asserting that Octel was infringing the same Gilbarco patent. Both cases
have been pending before the U.S. District Court for the Northern District of
California (the Court).
On February 15, 1996, the Court issued an order in the Octel case, finding
Gilbarco's patent unenforceable due to inequitable conduct. This holding of
unenforceability means the patent cannot be enforced against Octel or the
Company, even though the Company was a third-party to the Octel case in which
the order was issued. However, such order is not final and may be reconsidered
by the Court or, failing reconsideration, Gilbarco may exercise its right to
have the order reviewed (and potentially reversed) upon appeal.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The Annual Meeting of Stockholders of the Company was held on
February 27, 1996 (the "Annual Meeting"). The results of the
voting at the Annual Meeting were reported in the Company's
Form 10-Q for the quarter ended January 27, 1996.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
11.1 Statement of Computation of Loss Per Share.
(b) Reports on Form 8-K.
There were no reports filed on Form 8-K during the quarter
ended April 27, 1996.
12
<PAGE> 13
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.
CENTIGRAM COMMUNICATIONS CORPORATION
(Registrant)
Date: June 10, 1996 By: /s/ George H. Sollman
---------------------------
George H. Sollman
President and Chief Executive Officer
Date: June 10, 1996 By: /s/ Anthony R. Muller
---------------------------
Anthony R. Muller
Sr. V.P. Operations and Administration and
Chief Financial Officer
13
<PAGE> 1
EXHIBIT 11.1
Centigram Communications Corporation
Statement of Computation of Loss Per Share
(In thousands, except per share data--unaudited)
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
April 27, April 29, April 27, April 29,
1996 1995 1996 1995
---------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
Net loss $ (1,311) $ (320) $ (804) $ (1,090)
---------- ----------- ---------- ----------
Computation of common and common
equivalent shares outstanding:
Common stock 6,806 6,530 6,767 6,508
Options and warrants -- -- -- --
---------- ----------- ---------- ----------
Common and common equivalent shares
used in computing per share amounts 6,806 6,530 6,767 6,508
---------- ----------- ---------- ----------
Net loss per share $ (0.19) $ (0.05) $ (0.12) $ (0.17)
========== =========== ========== ==========
</TABLE>
- ------------
Fully diluted computation not presented since such amount differs by less than
3% from the per share amounts shown above.
14
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-02-1996
<PERIOD-START> OCT-29-1995
<PERIOD-END> APR-27-1996
<CASH> 20,721
<SECURITIES> 25,841
<RECEIVABLES> 24,857
<ALLOWANCES> 726
<INVENTORY> 8,652
<CURRENT-ASSETS> 83,419
<PP&E> 31,411
<DEPRECIATION> 17,848
<TOTAL-ASSETS> 100,599
<CURRENT-LIABILITIES> 20,558
<BONDS> 0
0
0
<COMMON> 7
<OTHER-SE> 79,877
<TOTAL-LIABILITY-AND-EQUITY> 100,599
<SALES> 48,546
<TOTAL-REVENUES> 48,546
<CGS> 18,155
<TOTAL-COSTS> 18,155
<OTHER-EXPENSES> 32,210
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (748)
<INCOME-TAX> 56
<INCOME-CONTINUING> (804)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (804)
<EPS-PRIMARY> (.12)
<EPS-DILUTED> (.12)
</TABLE>
