<PAGE> 1
U.S. 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, 1996
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: 0-28480
EDIFY CORPORATION
(Exact name of registrant as specified in its charter)
CALIFORNIA 77-0250992
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
2840 SAN TOMAS EXPRESSWAY
SANTA CLARA, CALIFORNIA 95051
(Address of principal executive offices)
(408) 982-2000
(Registrant's telephone number, including area code)
--------------------
Indicate by checkmark 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.
(1) Yes /x/ No / /
As of June 30, 1996, there were 16,073,432 shares of the Registrant's common
stock outstanding.
<PAGE> 2
EDIFY CORPORATION
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
PAGE
PART I FINANCIAL INFORMATION NUMBER
<S> <C>
ITEM 1: Financial Statements
Condensed Balance Sheets as of June 30, 1996 and December 31, 1995........... 3
Condensed Statements of Operations for the three and six months ended
June 30, 1996 and 1995................................................... 4
Condensed Statements of Cash Flows for the six months ended June 30,
1996 and 1995............................................................ 5
Notes to Condensed Financial Statements...................................... 6
ITEM 2: Management's Discussion and Analysis of Financial Condition and
Results of Operations.................................................... 8
PART II OTHER INFORMATION
ITEM 1: Legal Proceedings............................................................ 13
ITEM 2: Changes in Securities........................................................ 13
ITEM 3: Defaults Upon Senior Securities.............................................. 13
ITEM 4: Submission of Matters to a Vote of Security Holders.......................... 13
ITEM 5: Other Information............................................................ 13
ITEM 6: Exhibits and Reports on Form 8-K............................................. 13
Signatures................................................................... 14
</TABLE>
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<PAGE> 3
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
EDIFY CORPORATION
CONDENSED BALANCE SHEETS
(IN THOUSANDS: UNAUDITED)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
-------- --------
ASSETS
<S> <C> <C>
Current assets:
Cash, cash equivalents and short-term investments $ 44,299 $ 7,154
Accounts receivable, net 6,931 6,000
Prepaid expenses and other current assets 560 281
-------- --------
Total current assets 51,790 13,435
Property and equipment, net 3,771 1,822
Other assets 182 115
-------- --------
Total assets $ 55,743 $ 15,372
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,153 $ 802
Current installments of capital lease obligations 327 309
Accrued expenses 2,617 1,871
Unearned revenue 2,276 1,461
-------- --------
Total current liabilities 6,373 4,443
-------- --------
Capital lease obligations, excluding current installments 560 510
Commitments and contingencies
Stockholders' equity:
Preferred stock -- 24,121
Common stock 16 693
Additional paid-in capital 64,336 --
Deferred compensation and other (654) (558)
Accumulated deficit (14,888) (13,837)
-------- --------
Total stockholders' equity 48,810 10,419
-------- --------
Total liabilities and stockholders' equity $ 55,743 $ 15,372
======== ========
</TABLE>
See notes to condensed financial statements.
-3-
<PAGE> 4
EDIFY CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA: UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------ ------------------------
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net revenues:
License ............................ $ 4,274 $ 2,473 $ 8,176 $ 4,382
Services and other ................. 2,639 891 4,554 1,717
-------- -------- -------- --------
Total net revenues ........... 6,913 3,364 12,730 6,099
Cost of license revenues ........... 110 139 200 243
Cost of services and other revenues 2,195 701 3,942 1,442
-------- -------- -------- --------
Gross profit ................. 4,608 2,524 8,588 4,414
-------- -------- -------- --------
Operating expenses:
Product development ................ 1,335 600 2,470 1,255
Sales and marketing ................ 3,473 1,850 6,428 3,412
General and administrative ......... 629 304 1,135 425
-------- -------- -------- --------
Total operating expenses ..... 5,437 2,754 10,033 5,092
-------- -------- -------- --------
Loss from operations ......... (829) (230) (1,445) (678)
Interest income, net ................. 351 4 402 20
-------- -------- -------- --------
Loss before income taxes ..... (478) (226) (1,043) (658)
Provision for income taxes ........... 6 1 8 17
-------- -------- -------- --------
Net loss ..................... $ (484) $ (227) $ (1,051) $ (675)
======== ======== ======== ========
Net loss per share ................... $ (0.03) $ (0.02) $ (0.07) $ (0.05)
======== ======== ======== ========
Shares used in computing net loss per
share ............................. 15,077 13,126 14,344 13,124
======== ======== ======== ========
</TABLE>
See notes to condensed financial statements.
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<PAGE> 5
EDIFY CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
(IN THOUSANDS: UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
---------------------------------------
1996 1995
------------------ ------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss .................................................................. $ (1,051) $ (675)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization ........................................... 613 456
Provision for returns and doubtful accounts ............................. 504 46
Amortization of deferred compensation ................................... 214 --
Changes in operating assets and liabilities:
Accounts receivable ................................................... (1,435) (1,269)
Prepaid expenses and other current assets ............................. (279) (17)
Accounts payable ...................................................... 351 157
Accrued expenses ...................................................... 746 523
Unearned revenue ...................................................... 815 85
-------- --------
Net cash provided by (used in) operating activities ................ 478 (694)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment, net .................................. (2,303) (816)
Purchases of short-term investments ....................................... (10,019) --
Sales and maturities of short-term investments ............................ 5,054 500
Other assets .............................................................. (67) (19)
-------- --------
Net cash used in investing activities .............................. (7,335) (335)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments under capital lease obligations ........................ (191) (141)
Proceeds from line of credit .............................................. -- 300
Net proceeds from issuance of common stock ................................ 39,235 23
-------- --------
Net cash provided by financing activities .......................... 39,044 182
-------- --------
Increase (decrease) in cash and cash equivalents .............................. 32,187 (847)
Cash and cash equivalents at beginning of period .............................. 1,182 2,087
-------- --------
Cash and cash equivalents at end of period .................................... $ 33,369 $ 1,240
======== ========
</TABLE>
See notes to condensed financial statements.
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<PAGE> 6
EDIFY CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
(1) BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been
prepared in accordance with generally accepted accounting principles and, in the
opinion of management, reflect all adjustments (consisting only of normal
recurring adjustments) considered necessary to fairly state the Company's
financial position, results of operations, and cash flows for the periods
presented. These financial statements should be read in conjunction with the
Company's audited financial statements included in the Company's Final
Prospectus dated May 2, 1996 filed as part of a Registration Statement on Form
S-1 (Reg. No. 333-02020). The results of operations for the three and six month
periods ended June 30, 1996 are not necessarily indicative of the results to be
expected for any subsequent quarter or for the entire fiscal year ending
December 31, 1996. The December 31, 1995 balance sheet was derived from audited
financial statements, but does not include all disclosures required by generally
accepted accounting principles.
(2) INITIAL PUBLIC OFFERING
In May 1996, the Company completed its initial public offering and
issued 2,875,000 shares of its common stock to the public at a price of $15.00
per share. The Company received approximately $39.2 million of cash, net of
underwriting discounts, commissions and other offering costs. Upon the closing
of the initial public offering, all outstanding shares of its preferred stock
were automatically converted into shares of common stock.
(3) NET LOSS PER SHARE
Net loss per share is computed based on the weighted average number of
shares of common stock outstanding and common equivalent shares from stock
options (under the treasury stock method, if dilutive) and preferred stock
outstanding (on an "as if converted" basis, even if antidilutive). In accordance
with certain SEC Staff Accounting Bulletins, such computations include all
common and common equivalent shares (using the treasury stock method) issued
within 12 months of the offering date as if they were outstanding for all
periods prior to the initial public offering using the anticipated initial
public offering price.
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<PAGE> 7
(4) INVESTMENTS
Under the provisions of SFAS No. 115, debt and equity securities
classified as available-for-sale securities for which cost approximated market
value as of June 30, 1996 and December 31, 1995, with maturities generally
within one year, consisted of the following (in thousands):
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
------- -------
<S> <C> <C>
Government agency securities ........... $ 7,027 $ --
Treasury bills ......................... 6,929 --
Commercial paper ....................... 8,203 3,951
Corporate bonds ........................ -- 1,019
Certificates of deposit ................ -- 1,007
Bankers' acceptances ................... -- 993
------- -------
$22,159 $ 6,970
======= =======
</TABLE>
Gains and losses from sales of available-for-sale securities were not
significant for the three or six month periods ended June 30, 1996 and 1995.
-7-
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
This Form 10-Q contains forward-looking statements that involve risks
and uncertainties. The Company's actual results could differ materially from
those discussed herein. Factors that could cause or contribute to such
differences include, but are not limited to, those set forth below in "Other
Factors That May Affect Future Operating Results" as well as those discussed in
the "Risk Factors" section included in the Company's Final Prospectus dated May
2, 1996 filed as part of a Registration Statement on Form S-1 (Reg. No.
333-02020).
RESULTS OF OPERATIONS
NET REVENUES
Total net revenues were $6.9 million for the quarter ended June 30,
1996 as compared to $3.4 million for the same 1995 quarter, representing an
increase of 105.5%. Total net revenues were $12.7 million for the six months
ended June 30, 1996, an increase of 108.7% as compared to $6.1 million for the
same period a year ago. The Company's revenues are principally derived from
software licenses and fees for services, which are generally charged separately.
Revenues are recorded net of reserves for potential credit losses, which losses
to date have not been significant. In 1996 and 1995, 6% or less of the Company's
total net revenues were derived from international sales. Over time, the Company
intends to expand its operations outside of the United States and enter
additional international markets.
LICENSE REVENUES. License revenues were $4.3 million for the quarter
ended June 30, 1996 as compared to $2.5 million for the comparable 1995 quarter.
License revenues for the six-month period ended June 30, 1996 were $8.2 million
as compared with $4.4 million for the comparable period in 1995. The increases
in license revenues were attributable to an increase in unit volume as a result
of the market's growing awareness and acceptance of Electronic Workforce, the
addition of Web/Intranet capabilities to this product in the fourth quarter of
1995 and expansion of the Company's field sales force and indirect distribution
channels. The prices of the Company's licenses have remained relatively constant
during the comparable periods of 1995 and 1996. The Company does not believe
that the historical growth rates of license revenues will be sustainable or are
indicative of future results.
SERVICES AND OTHER REVENUES. Services and other revenues consist
primarily of fees from consulting, post-contract customer support and, to a
lesser extent, training and installation services. Services and other revenues
were $2.6 million for the quarter ended June 30, 1996 as compared to $891,000
for the comparable 1995 quarter. Service and other revenues for the six months
ended June 30, 1996 were $4.6 million as compared to $1.7 million for the
comparable period of 1995. Services and other revenues increased as a
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<PAGE> 9
percentage of total net revenues to 38.2% for the quarter ended June 30, 1996,
from 26.5% for the quarter ended June 30, 1995, and increased to 35.8% for the
six months ended June 30, 1996 from 28.2% for the comparable 1995 period. These
increases in services and other revenues occurred primarily due to increases in
consulting, post-contract customer support, training and installation services
associated with the increased volume of licenses of the Company's software. In
addition, services and other revenues as a percentage of total net revenues can
fluctuate from quarter to quarter due to timing and length of consulting
projects. Consulting services can be contracted for under fixed fee or time and
material arrangements. The Company's mix of time and materials contracts has
increased in 1996 and is expected to continue to increase as the Company moves
away from contracting for fixed fee consulting arrangements. The Company does
not expect historical growth rates of its services revenues to be sustainable in
the future.
COST OF REVENUES
COST OF LICENSE REVENUES. Cost of license revenues consists primarily
of the cost of product media, product duplication, documentation, and royalties
paid to third parties under technology licenses. Cost of license revenues was
$110,000 and $139,000 for the quarters ended June 30, 1996 and June 30, 1995,
representing 2.6% and 5.6% of the related license revenues for the respective
quarters. Cost of license revenues was $200,000 for the six months ended June
30, 1996 as compared to $243,000 for the comparable 1995 period, representing
2.4% and 5.5% of the related license revenues for the respective periods. The
decrease in cost of license revenues as a percentage of license revenues from
1995 to 1996 was due to increased license revenues coupled with decreased
material and overhead costs.
COST OF SERVICES AND OTHER REVENUES. Cost of services and other
revenues consists primarily of personnel-related costs and fees for third-party
consultants incurred in providing consulting, post-contract customer support,
training and installation services to customers. Cost of services and other
revenues was $2.2 million and $701,000 for the quarters ended June 30, 1996 and
June 30, 1995, representing 83.2% and 78.7% of the related services and other
revenues for the respective quarters. Cost of services and other revenues was
$3.9 million for the six months ended June 30, 1996 as compared to $1.4 million
for the comparable 1995 period, representing 86.6% and 84.0% of the related
services and other revenues for the respective periods. These increases in
absolute dollars for the comparable quarterly and six-month periods were due
primarily to increases in personnel-related costs as the Company continued to
expand its consulting, customer support, training and installation services
organizations. The cost of services and other revenues as a percentage may vary
between periods due to the mix of services provided by the Company and to
varying levels of expenditures to build the services organizations.
PRODUCT DEVELOPMENT
Product development expenses were $1.3 million and $600,000, or 19.3%
and 17.8% of total net revenues, for the quarters ended June 30, 1996 and June
30, 1995, respectively. Product development expenses were $2.5 million and $1.3
million, or 19.4% and 20.6%, for the six month periods ended June 30, 1996 and
1995, respectively. Product development
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<PAGE> 10
expenses consist primarily of salaries and other related expenses for research
and development personnel, as well as the cost of facilities and depreciation of
capital equipment. The increases in absolute dollars for the comparable
quarterly and six month periods were attributable primarily to increased
staffing related to development of application products, ongoing enhancements to
Electronic Workforce, and the development of a version to run on Windows NT. The
Company believes that significant investments in product development are
required to remain competitive. As a consequence, the Company expects that
product development expenses will increase in absolute dollars in the future and
will not decline significantly as a percentage of total net revenues from their
current levels.
In accordance with Statement of Financial Accounting Standards No. 86,
the Company expects to capitalize eligible computer software development costs
upon the achievement of technological feasibility, subject to net realizable
value considerations. The Company has defined technological feasibility as
completion of a working model. To date, such capitalizable costs have not been
material. Accordingly, the Company has charged all such costs to product
development expenses in the accompanying statements of operations.
SALES AND MARKETING
Sales and marketing expenses were $3.5 million and $1.9 million, or
50.2% and 55.0% of total net revenues, for the quarters ended June 30, 1996 and
June 30, 1995, respectively. Sales and marketing expenses were $6.4 million and
$3.4 million, or 50.5% and 55.9%, for the six month periods ended June 30, 1996
and 1995, respectively. Sales and marketing expenses consist primarily of
salaries and commissions earned by sales and marketing personnel and promotional
expenses. The increases in absolute dollars for the comparable quarterly and six
month periods were due primarily to the expansion of the Company's field and
indirect sales operations and increased marketing activities. The reductions in
sales and marketing expenses as a percentage of total net revenues were due
primarily to the growth in total net revenues. The Company expects to continue
to expand its field sales and marketing efforts, its third party distribution
channel and its operations outside the United States and, therefore, anticipates
that sales and marketing expenditures will increase in absolute dollars in the
future.
GENERAL AND ADMINISTRATIVE
General and administrative expenses were $629,000 and $304,000, or 9.1%
and 9.0% of total net revenues, for the quarters ended June 30, 1996 and June
30, 1995, respectively. General and administrative expenses were $1.1 million
and $425,000, or 8.9% and 7.0%, for the six month periods ended June 30, 1996
and 1995, respectively. General and administrative expenses consist primarily of
salaries and other related expenses of administrative, executive and financial
personnel and outside professional fees. The increases in both absolute dollars
and as a percentage of total net revenues for the comparable quarterly and six
month periods were attributable primarily to the addition of staff, increased
costs associated with expansion of information systems to support the growth of
the Company's business and increased costs to take on the additional
responsibilities associated with being a public company. The Company expects to
continue
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<PAGE> 11
to expand its staffing, information systems and other items related to
infrastructure and, therefore, anticipates that general and administrative
expenditures will increase in absolute dollars in the future.
INTEREST INCOME, NET
Interest income, net was $351,000 and $4,000 for the quarters ended
June 30, 1996 and June 30, 1995, respectively. Interest income, net for the six
months ended June 30, 1996 and 1995 was $402,000 and $20,000, respectively.
These increases for the quarterly and six-month periods were due primarily to
increases in average investment balances as a result of investment of the
proceeds from the Company's initial public offering.
PROVISION FOR INCOME TAXES
The provisions for income taxes relate primarily to state income and
foreign withholding taxes.
LIQUIDITY AND CAPITAL RESOURCES
From inception through April 1996, the Company financed its operations
and met its capital resource requirements primarily through the private sales of
Preferred Stock, totaling $24.1 million, and capital equipment leases. On May 2,
1996, the Company completed its initial public offering of 2,875,000 shares of
its common stock at a price of $15.00 per share. Proceeds to the Company from
this offering were approximately $39.2 million, net of underwriting discounts,
commissions, and other offering costs. At June 30, 1996, the Company's cash,
cash equivalents, and short-term investments (short-term interest-bearing,
investment-grade securities) totaled approximately $44.3 million.
At June 30, 1996, the Company had available a $2.0 million revolving
bank line of credit agreement that is secured by the assets of the Company and
expires in May 1997. Under terms of the agreement, advances under the line are
limited to 80% of eligible accounts receivable and borrowings accrue interest at
the bank's prime rate plus 0.5%. The line of credit contains provisions that
prohibit the payment of cash dividends without the bank's consent and requires
the maintenance of specified levels of tangible net worth and certain financial
ratios. There were no borrowings outstanding under the line at June 30, 1996.
For the six months ended June 30, 1996, operating activities provided
cash of $478,000. Investing activities used cash of approximately $7.3 million,
primarily for the purchase of approximately $2.3 million in property and
equipment and the net purchase of approximately $5.0 million in short-term
investments. The Company expects that its capital expenditures will increase as
the Company's employee base grows. Net cash generated from financing activities
of $39.0 million was related primarily to proceeds from the Company's initial
public offering.
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<PAGE> 12
As of June 30, 1996, the Company's working capital was $45.4 million.
The Company has no significant capital spending or purchase commitments other
than normal purchase commitments and commitments under facilities and capital
leases. The Company believes that its working capital, together with its bank
line of credit and anticipated cash flows from operations will be sufficient to
meet its working capital and capital expenditure requirements for at least the
next twelve months.
OTHER FACTORS THAT MAY AFFECT FUTURE OPERATING RESULTS
Except for the historical information contained in this 10-Q, the
matters discussed herein are forward looking statements. These forward looking
statements concern matters which include, but are not limited to, the
sustainability of historical revenue growth rates, the Company's expected mix of
revenues, expected gross margins on services and other revenues, certain
expected operating expense levels and the Company's liquidity and capital needs.
These matters involve risks and uncertainties that could cause actual results to
differ materially from those in the forward looking statements. In addition to
the factors discussed above, among the other factors that could cause actual
results to differ materially are the following: demand for and market acceptance
of Web/Intranet products and services; the Company's ability to deliver on time,
and market acceptance of, new products or upgrades of existing products;
customer order deferrals in anticipation of new products; the timing of, or
delay in, large customer orders; continued availability of technology and
intellectual property license rights; changes in the mix of distribution
channels through which the Company's products are offered; competitive
conditions in the industry; general economic conditions; and the "Risk Factors"
listed from time to time in reports that the Company files with the U.S.
Securities and Exchange Commission, including but not limited to the Company's
Final Prospectus dated May 2, 1996. There can be no assurance that revenue
levels or growth rates achieved during the six months ended June 30, 1996 and
prior years will be sustained, that the Company will experience growth in
revenues in any particular period when compared to prior periods or that the
Company will achieve or sustain profitability. Any quarterly or annual shortfall
in net revenues and/or operating results from the levels expected by securities
analysts and shareholders would result in a substantial decline in the trading
price of the Company's shares.
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<PAGE> 13
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are being filed as part of this Report:
11.01 Statement of Loss Per Share
27.01 Financial Data Schedule
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<PAGE> 14
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.
EDIFY CORPORATION
Date: August 13, 1996 By: /s/ Stephanie A. Vinella
-------------------- --------------------------------------------
Stephanie A. Vinella
Vice President of Finance and Administration,
Chief Financial Officer and Secretary
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<PAGE> 15
EDIFY CORPORATION
FORM 10-Q
EXHIBIT INDEX
<TABLE>
<CAPTION>
PAGE
EXHIBITS NUMBER
<S> <C>
11.01 Statement of Loss Per Share.................................................. 16
27.01 Financial Data Schedule...................................................... 17
</TABLE>
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<PAGE> 1
EDIFY CORPORATION EXHIBIT 11.01
STATEMENT OF LOSS PER SHARE
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------ ------------------------
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net loss ................................... $ (484) $ (227) $ (1,051) $ (675)
======== ======== ======== ========
Computations of weighted
average common and dilutive
common equivalent shares
outstanding:
Weighted average common shares
outstanding ........................... 15,077 2,255 14,344 2,253
Shares relating to SAB No. 64
and 83 ................................ -- 1,852 -- 1,852
Common equivalent shares attributable to:
Convertible preferred stock
(if converted method) ............... -- 9,019 -- 9,019
-------- -------- -------- --------
Shares used in computing net loss
per share amounts ....................... 15,077 13,126 14,344 13,124
======== ======== ======== ========
Net loss per share ......................... $ (0.03) $ (0.02) $ (0.07) $ (0.05)
======== ======== ======== ========
</TABLE>
-16-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> APR-01-1996
<PERIOD-END> JUN-30-1996
<EXCHANGE-RATE> 1
<CASH> 33,369
<SECURITIES> 10,930
<RECEIVABLES> 6,931
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 51,790
<PP&E> 3,771
<DEPRECIATION> 0
<TOTAL-ASSETS> 55,743
<CURRENT-LIABILITIES> 6,373
<BONDS> 0
0
0
<COMMON> 16
<OTHER-SE> 48,794
<TOTAL-LIABILITY-AND-EQUITY> 55,743
<SALES> 4,274
<TOTAL-REVENUES> 6,913
<CGS> 110
<TOTAL-COSTS> 2,305
<OTHER-EXPENSES> 5,437
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (478)
<INCOME-TAX> 6
<INCOME-CONTINUING> (484)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (484)
<EPS-PRIMARY> (.03)
<EPS-DILUTED> (.03)
</TABLE>
