<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(MARK ONE)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE THREE MONTH PERIOD ENDED JUNE 28, 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 #0-11915
CONDUCTUS, INC.
(Exact name of registrant as specified in its charter)
Delaware 77-0162388
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
969 W. Maude Avenue, Sunnyvale California 94086
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(408) 523-9950
- --------------------------------------------------------------------------------
(Registrants Telephone Number, including area code)
Not Applicable
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 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
--- ------------
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock, as of the latest practicable date.
Common shares outstanding at July 31, 1996: 6,791,099
Total pages: 18
Index to Exhibits to be found on
page 17
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CONDUCTUS, INC.
Index
PART I: FINANCIAL INFORMATION PAGE
ITEM 1 FINANCIAL STATEMENTS
Balance Sheets at June 30, 1996
and December 31, 1995 3
Statements of Operations
for the Three and Six Months Ended
June 30, 1996 and 1995 4
Statements of Cash Flows
for the Six Months Ended
June 30, 1996 and 1995 5
Notes to Financial Statements 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS. 9
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 14
ITEM 5: OTHER INFORMATION 15
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K 15
Signatures 16
Exhibit Index 17
Exhibits......
Statements of Computation of Loss
Per Share 18
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<PAGE>
PART I: FINANCIAL INFORMATION
Item 1: Financial Statements
CONDUCTUS, INC.
BALANCE SHEETS
JUNE 30, DECEMBER 31,
1996 1995
---------- -----------
ASSETS (UNAUDITED)
Current assets:
Cash and cash equivalents $ 111,840 $ 272,410
Short-term investments 2,442 2,880,464
Restricted cash and cash equivalents 1,047,300 -
Accounts receivable, net 3,170,967 3,251,147
Inventory, net 1,220,762 765,424
Prepaid and other assets 174,668 285,404
------------- --------------
Total current asset 5,727,979 7,454,849
Property and equipment, net 2,691,914 2,550,042
Other assets 77,762 123,340
------------- --------------
Total assets $ 8,497,655 $ 10,128,231
------------- --------------
------------- --------------
LIABILITIES
Current liabilities:
Bank line of credit $ 100,000
Accounts payable 1,969,393 $ 1,621,424
Other accrued liabilities 987,115 821,230
Current portion of long-term debt 930,399 687,736
Obligations under capital leases,
current portion 6,500 37,894
------------- --------------
Total current liabilities 3,993,407 3,168,284
Long-term debt, net of current portion 1,166,352 1,146,227
------------- --------------
Total liabilities 5,159,759 4,314,511
------------- --------------
STOCKHOLDERS' EQUITY
Common stock 594 570
Additional paid-in capital 30,285,785 30,035,358
Unrealized gain on short-term investments, net - 626
Accumulated deficit (26,948,483) (24,222,834)
-------------- --------------
Total stockholders' equity 3,337,896 5,813,720
-------------- --------------
Total liabilities and stockholders'
equity $ 8,497,655 $ 10,128,231
-------------- --------------
See accompanying notes.
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<PAGE>
CONDUCTUS, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
---------------------------- ---------------------------
1996 1995 1996 1995
------------ -------------- ---------- -------------
<S> <C> <C> <C> <C>
Revenues:
Contract $ 2,406,751 $ 1,854,883 $ 4,620,513 $ 3,498,370
Product 604,095 547,500 1,001,592 916,956
------------ -------------- ----------- ------------
Total revenues 3,010,846 2,402,383 5,622,105 4,415,326
Operating expenses:
Cost of products 407,384 287,722 663,684 453,725
Research and development 2,970,733 2,335,483 5,713,863 4,912,870
Selling, general and administrative 951,194 957,965 1,957,712 1,785,246
------------ -------------- ----------- -----------
Total operating expenses 4,329,311 3,581,170 8,335,259 7,151,841
------------ -------------- ----------- -----------
Loss from operations (1,318,465) (1,178,787) (2,713,154) (2,736,515)
Interest income 22,014 67,281 49,341 147,382
Other income (expense) 321 (21,589) 24,842 (90,388)
Interest expense (50,392) (28,189) (86,678) (52,221)
------------ -------------- ----------- -----------
Net loss $ (1,346,522) $ (1,161,284) $ (2,725,649) $ (2,731,742)
------------ -------------- ----------- -----------
------------ -------------- ----------- -----------
Net loss per common share $ (0.23) $ (0.21) $ (0.48) $ (0.50)
------------ -------------- ----------- -----------
------------ -------------- ----------- -----------
Shares used in computing per share amounts 5,749,000 5,487,000 5,728,000 5,442,000
------------ ------------- ----------- -----------
------------ ------------- ----------- -----------
See accompanying notes.
</TABLE>
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CONDUCTUS, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
For the Six Months Ended June 30,
---------------------------------
1996 1995
------------- --------------
Net loss $ (2,725,649) $ (2,731,742)
Adjustments to reconcile net loss
to net cash used
in operating activities:
Depreciation and amortization 504,425 450,465
(Increase) decrease in:
Accounts receivable 80,180 (183,704)
Inventory (455,339) (319,333)
Prepaid expenses and other
current assets 110,736 150,323
Other assets (2,261)
Increase (decrease) in:
Accounts payable and other
accrued liabilities 513,853 305,801
-------------- -------------
Net cash used in operating activities (1,974,055) (2,328,190)
-------------- -------------
Cash flows from investing activities:
Proceeds from sales of short-term
investments 5,394,351 26,754,062
Purchases of short-term investments (3,564,255) (24,218,253)
Acquisition of property and equipment (627,653) (1,104,486)
Proceeds from sales of assets 29,196
-------------- -------------
Net cash provided by investing
activities 1,231,639 1,431,323
-------------- -------------
Cash flows from financing activities:
Proceeds from borowings 706,657 1,216,466
Net proceeds from issuance of common stock 250,451 369,397
Principal payments under capital
lease obligations (31,394) (75,062)
Principal payments on long term debt (343,868)
-------------- -------------
Net cash provided by financing
activities 581,846 1,510,801
-------------- -------------
Net increase (decrease) in cash
and cash equivalents (160,570) 613,934
Cash and cash equivalents at beginning of
period 272,410 504,763
-------------- -------------
Cash and cash equivalents at end of period $ 111,840 $ 1,118,697
-------------- -------------
-------------- -------------
See accompanying notes.
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CONDUCTUS, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
FISCAL YEAR:
The Company uses a 52-53 week fiscal year ending on the last Friday of
the month. For convenience of presentation, the accompanying financial
statements have been shown as ending on the last day of the calendar month
of each applicable period.
UNAUDITED INTERIM FINANCIAL INFORMATION:
The accompanying unaudited interim financial statements have been
prepared pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosure normally
included in the financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to
such rules and regulations, although management believes that the
disclosures are adequate to make the information presented not misleading.
The unaudited financial statements as of June 30, 1996 and for the three
and six months ended June 30, 1996 and 1995 include, in the opinion of
management, all adjustments, consisting of normal recurring adjustments,
necessary to present fairly the financial information set herein. The
results of operations for the interim periods are not necessarily
indicative of the results to be expected for an entire year. The December
31, 1995 balance sheet was derived from audited financial statements, but
does not include all disclosures required by generally accepted accounting
principles.
INVENTORIES:
Inventories are stated at the lower of cost (determined on a first-in,
first-out basis) or market. Appropriate consideration is given to
obsolescence, excessive levels and other factors in evaluating net
realizable value.
COMPUTATION OF NET LOSS PER COMMON SHARE:
Net loss per common share is based upon the weighted average number of
common and common equivalent shares outstanding. Common equivalent shares
are included in the per share calculations where the effect of their
inclusion would be dilutive.
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<PAGE>
2. INVESTMENTS
Investments are summarized below:
June 30, 1996 December 31, 1995
------------------------- ------------------------
Cost Market Cost Market
Basis Value Basis Value
------------------------- ------------------------
Debt securities:
Preferred bonds $500,000 $500,000
U.S. government &
related agency
securities 795,897 796,902
Commercial paper 1,499,909 1,499,530
Accrued interest 43,128 43,128
Other $2,442 $2,442 40,904 40,904
--------------------------------------------------
Total 2,442 2,442 2,879,838 2,880,464
Allowance for
unrealized gain - - 626 -
--------------------------------------------------
Total $2,442 $2,442 $2,880,464 $2,880,464
--------------------------------------------------
--------------------------------------------------
3. INVENTORIES:
Inventories net of reserves at June 30, 1996 and December 31, 1995 of
$81,000 comprise:
June 30, 1996 December 31, 1995
--------------- -----------------
Raw materials $453,138 $299,619
Work in process 718,803 431,882
Finished goods 48,821 33,923
--------------- -----------------
$1,220,762 $765,424
--------------- -----------------
--------------- -----------------
4. BANK LINE OF CREDIT:
In June 1996, the Company modified its line of credit facility with a
bank to renegotiate borrowing levels and certain restrictions on cash
balances. At June 30, 1996 approximately $770,000 was available under the
credit line.
5. LONG TERM DEBT:
In March 1996, the Company obtained a $1,000,000 credit facility with
a financial institution primarily to finance costs associated with the
acquisition of equipment. Borrowings are at the bank's prime rate plus
2.0% (10.25% at June 30, 1996) with interest paid monthly, and are
collateralized by the related equipment. Principal installments commence
July 1996 for a thirty month period. At June 30, 1996, approximately
$393,000 was available under the credit facility.
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6. SUBSEQUENT EVENT:
On July 1, 1996, the Company issued 1,000,000 shares of common stock
in a public offering for net proceeds of approximately $10 million, which
will be used for working capital, retirement of lines of credit and further
development of its superconducting products. The completion of the
offering will eliminate restrictions on cash balances and reduce interest
rates on borrowings.
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<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THIS REPORT ON FORM 10Q CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS
AND UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THE
RESULTS DISCUSSED IN THE FORWARD-LOOKING STATEMENTS. FACTORS THAT MIGHT CAUSE
SUCH A DIFFERENCE INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED IN "RISK
FACTORS" IN PART 1 OF THE COMPANY'S ANNUAL REPORT ON FORM 10K AT AND FOR THE
YEAR ENDED DECEMBER 31, 1995 AND IN THE FINAL PROSPECTUS DATED JUNE 26, 1996
INCLUDED AS PART OF THE COMPANY'S REGISTRATION STATEMENT ON FORM S-1
(NO. 333-3815). THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH THE
FINANCIAL STATEMENTS AND NOTES THERETO APPEARING ELSEWHERE IN THIS PROSPECTUS.
OVERVIEW
Conductus develops, manufactures and markets electronic components and systems
based on superconductors for applications in the communications, healthcare and
instrumentation markets. In May 1993, Conductus acquired Tristan Technologies,
Inc. ("Tristan"), a San Diego, California-based company founded in 1991, that
designed, manufactured and sold large-scale magnetic sensing systems and
instrumentation. In June 1994, Tristan became the Conductus Instrument &
Systems Division. As of June 30, 1996, Conductus had accumulated losses of
approximately $26,948,000 and expects to incur additional losses at least during
1996 due to the Company's planned expansion of operations. Conductus, alone or
with collaborative partners, must successfully develop, manufacture, introduce
and market its potential products in order to achieve profitability. Conductus
does not expect to recognize meaningful product sales until it successfully
develops and commercializes superconductive components, systems and subsystems
that address significant market needs.
RESULTS OF OPERATIONS FOR THE PERIODS ENDED JUNE 30, 1996 AND 1995
The Company's total revenues increased to $3,011,000 for the second quarter of
1996, a 25% increase over the $2,402,000 for the same period in 1995. Total
revenue consists primarily of contract revenue and, to a lesser extent, product
sales. Revenues under U.S. government research and development contracts
increased to $2,407,000 in the period from $1,855,000 in the same period in the
prior year and represented 80% and 77% of total revenue for the periods,
respectively. At June 30, 1996, Conductus had approximately $1,625,000 in
contracts and grants and $8,450,000 in awards for future research and
development. The recognition of revenue and receipt of payment pursuant to
these contracts and awards are subject to numerous risks.
Revenues from sales of large-scale superconducting magnetic systems, SQUIDs, HTS
thin films and other products increased to $604,000 in the second quarter of
1996, a 10% increase over the $548,000 of product sales in same period in the
prior year. The increase in the second quarter of 1996 is primarily related to
superconductivity systems and instruments. The large scale superconducting
systems have large unit prices and are sold in low volumes, and thus significant
fluctuations in sales of these systems may occur between quarters. Conductus
does not expect to recognize significant product
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<PAGE>
sales until it successfully develops and commercializes superconductive
components and systems addressing significant markets.
Cost of product sales increased to $407,000 for the second quarter of 1996, a
41% increase over the $288,000 for the same period in 1995. The increase in
cost of product sales was directly related to increased product sales. Gross
margins decreased to 33% in the second quarter of 1996 from 48% in the prior
year. The reduction reflects changes in commercial product mix for both
quarters. Large systems margins may vary based on options included and the high
start-up costs associated with them may reduce margins. Margins are expected to
improve to the extent unit volumes increase. Costs of contract revenues are
included in research and development expenses.
Research and development expenses increased to $2,971,000 in the second quarter
of 1996, a 27% increase over the $2,335,000 for the same period in 1995. The
increase is partly attributable to increased expenditures for the development of
commercial products, particularly products addressing the cellular and PCS
wireless communications markets. Additionally, the portion of research and
development expenses attributable to contract costs increased as a result of
increased contract revenues in the second quarter of 1996 compared to the second
quarter of 1995. The Company expects to continue to incur significant research
and development expenses as it seeks to develop and market additional products.
Selling, general and administrative expenses decreased to $951,000 for the
second quarter period of 1996, a 1% decrease over the $958,000 for the same
period in 1995. These costs decreased in 1996 compared to the prior year due to
tight cost controls offset by increase recruiting and marketing activity.
Headcount increased to 120 at June 30, 1996 from 109 at June 30, 1995.
Additionally, as the Company begins to market commercial products, there will be
additional sales and marketing costs over those incurred in 1995.
The Company's total operating expenses increased to $4,329,000 for the second
quarter period in 1996, a 21% increase over the $3,581,000 for the same period
in 1995 for the reasons described above.
Interest income was $22,000 in the second quarter period of 1996 compared to
$67,000 during the same period in 1995. The primary reason for the decrease is
due to decreasing cash and investments which is partly offset by higher interest
rates. Interest charges increased on the Company's debt financing to
approximately $50,000 in the second quarter period of 1996 compared to $28,000
for the same period in 1995, due to purchases of capital equipment.
The Company has not paid income taxes since inception due to its cumulative
operating losses.
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LIQUIDITY AND CAPITAL RESOURCES
The Company has financed its operations since inception primarily through
$13,251,000 in net proceeds from its initial public offering of Common Stock in
August 1993, $14,645,000 raised in private placement financing, $27,936,000
from U.S. government contracts, $5,124,000 in aggregate borrowings under three
equipment lease lines of credit and equipment term loan and $3,205,000 in
interest income. In addition, on July 1, 1996 the Company received
approximately $10,000,000 in net proceeds from a follow-on public offering of
Common Stock. As of June 30, 1996, the Company had aggregate cash, cash
equivalents and short-term investments of $114,000, without giving effect to the
follow-on offering, and restricted cash of approximated $1,047,000, which was
released from restriction upon completion of the follow-on offering.
Net cash used in operations was $1,974,000 for the first six months of 1996 as
compared to $2,328,000 for the same period in 1995. The decrease in net cash
used in operating activities in the first six months of 1996 over the same
period of the prior year was primarily due to comparable levels of operating
losses, a modest increase in depreciation and amortization in 1996 compared to
1995, a small reduction in accounts receivables in 1996 compared to an increase
in accounts receivable in 1995 and a larger increase in liabilities in 1996
compared to 1995 offset by increases in inventory and a reduction in certain
assets in 1996 compared to 1995. The Company anticipates that its accounts
receivable from revenues under U.S. government contracts and product sales, as
well as inventories, will remain constant or increases during 1996, while
current liabilities will decrease. Such decreases in liabilities will result
in the use of additional cash in operating activities.
Net cash from investing activities was $1,232,000 for the first six months of
1996 compared to $1,431,000 for the first six months of 1995. During both
periods, net cash was provided by net reductions in short-term investments,
offset to some extent by purchases of property and equipment.
Net cash from financing activities was $582,000 for the first six months of 1996
compared to net cash provided by financing activities of $1,510,000 in the first
six months of the prior year. Net cash provided by financing activities in the
first six months of 1996 were primarily due to borrowings under the Company's
equipment term loan, issuance of equity through the exercise of options and the
purchase of stock under the Company's employee stock purchase plan offset by
principal payments under long term debt and capital lease obligations.
The Company to date has received limited revenues from product sales. The
development of the Company's potential products will require a commitment of
substantial funds to conduct further research and development and testing of
its potential products, to establish commercial-scale manufacturing and to
market any resulting products. The Company expects to use approximately $1.0
million of cash to support its current facilities and equipment requirements in
the remainder of 1996.
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The actual amount of the Company's future capital requirements exclusive of
facilities will depend on many factors that affects its business. Conductus
anticipates that its existing available cash including monies received in its
follow-on public offering completed July 1, 1996 should be adequate to fund the
Company's operations for at least the next year. There can be no assurance that
additional funding will be available on acceptable terms or at all, if required.
FACTORS THAT MAY AFFECT FUTURE RESULTS
The Company's business is subject to a number of risks and uncertainties that
may have a material adverse effect the Company's business, financial condition
and results of operations. These risks include the following factors relating
to the Company: early stages of superconductive electronics markets;
accumulated deficit and anticipated future losses; uncertainty of financial
results; quarterly fluctuations; high degree of dependence upon other
complementary technologies; reliance on limited- or sole-source suppliers;
dependence on incorporation of potential products and third party systems;
extensive reliance on collaborative relationships; rapid technological change;
intense competition techniques; competing technologies; uncertainty of patent
and proprietary rights; risks of litigation; dependence on license technology;
substantial future capital needs; limited commercial manufacturing capabilities;
need to develop infrastructure to support commercialization; limited outlets for
certain products; high degree of dependence upon government contracts; highly
regulated potential product applications; environmental regulations; attraction
and intention of key employees ; volatility of stock price; effect of certain
charter provisions; anti-takeover effects of restated certificate of
incorporation and bylaw provisions of Delaware laws; shares eligible for future
sales; registration rights; absence of dividends; and dilution. These risks are
discussed in detail in the "Risk Factors" section on page 6 of the Company's
final prospectus dated June 26, 1996 included in its Registration Statement on
Form S-1 (Registration No. 333-3815). A copy of the Registration Statement may
be inspected by anyone without charge at the offices of Securities and Exchange
Commission at 450 5th Street, N.W., Washington, D.C. 20549, and copies of all or
any part thereof may be obtained from Public Reference Section of the Securities
and Exchange Commission at such address, upon payment of certain prescribed
fees.
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<PAGE>
PART II: OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS - NOT APPLICABLE.
ITEM 2: CHANGES IN SECURITIES - NOT APPLICABLE.
ITEM 3: DEFAULTS UPON SENIOR SECURITIES - NOT APPLICABLE.
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ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The Annual Meeting of Stockholders was held on May 23, 1996
(b) The meeting included the election of the Board of Directors,
submitted as Item No.1, whose names are as follows:
John F. Shoch
Anthony Sun
Richard W. Anderson
Martin Cooper
Charles E. Shalvoy
Robert Saldich
(c) Other matters voted upon at the stockholders meeting were:
Item No. 2, Approval of Amendments to 1992 Stock Option/Stock Issuance
Plan;
Item No. 3, Ratification of the selection of Coopers & Lybrand L.L.P. as
the Company's Independent Accountants for the year ended
December 31, 1996.
Shares of Common Stock voted were as follows:
Item No. 1 (Election of Board of Directors)
Total Vote For Total Vote Withheld
Each Director From Each Director
--------------- -------------------
John F. Shoch 4,586,541 62,100
Anthony Sun 4,586,541 62,100
Richard W. Anderson 4,586,541 62,100
Martin Cooper 4,586,241 62,400
Charles E. Shalvoy 4,586,541 62,100
Robert Saldich 4,540,337 108,304
For Against Abstain No Vote
--------- --------- ---------- --------
Item No. 2
(Amendment to
1992 Stock Option/
Stock Issuance
Plan) 2,882,514 625,750 5,388 1,134,989
Item No. 3
(Selection of
Independent
Accountants) 4,611,046 32,550 5,045 --
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ITEM 5: OTHER INFORMATION - NOT APPLICABLE.
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K.
(A) EXHIBITS - SEE BELOW
(B) REPORTS ON FORM 8-K - NOT APPLICABLE.
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<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.
CONDUCTUS, INC.
---------------
Registrant
Dated: August 6, 1996 /S/ WILLIAM J. TAMBLYN
----------------------------
William J. Tamblyn
Chief Financial Officer and
Duly Authorized Officer
/S/ CHARLES E. SHALVOY
----------------------------
Charles E. Shalvoy
President and Chief
Executive Officer
and Duly Authorized Officer
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EXHIBIT INDEX
SEQUENTIAL
EXHIBITS PAGE NUMBER
11.01 Statements of Computation of 18
Loss Per Share
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<PAGE>
EXHIBIT 11.01
CONDUCTUS, INC.
STATEMENTS OF COMPUTATION OF LOSS PER SHARE
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
----------------- -----------------
1996 1995 1996 1995
---- ---- ---- ----
Net loss $(1,347) $(1,161) $(2,726) $(2,732)
-------- -------- -------- --------
Weighted average number
of shares outstanding 5,749 5,487 5,728 5,442
-------- -------- -------- --------
Common and common
equivalent shares used in
computing per share
amounts 5,749 5,487 5,728 5,442
-------- -------- -------- --------
-------- -------- -------- --------
Net loss per share $ (0.23) $ (0.21) $ (0.48) $ (0.50)
-------- -------- -------- --------
-------- -------- -------- --------
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1996
<PERIOD-START> APR-01-1996 JAN-01-1996
<PERIOD-END> JUN-28-1996 JUN-28-1996
<CASH> 1159140 1159140
<SECURITIES> 2442 2442
<RECEIVABLES> 3170967 3170967
<ALLOWANCES> 0 0
<INVENTORY> 1220672 1220672
<CURRENT-ASSETS> 5727979 5727979
<PP&E> 2691914 2691914
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 8497655 8497655
<CURRENT-LIABILITIES> 39934307 39934307
<BONDS> 1166352 1166352
0 0
0 0
<COMMON> 594 594
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 8497655 8497655
<SALES> 604095 1001572
<TOTAL-REVENUES> 3010846 5622105
<CGS> 407384 663684
<TOTAL-COSTS> 4329311 8335259
<OTHER-EXPENSES> 22335 74183
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> (50392) (86678)
<INCOME-PRETAX> 0 0
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (1346522) (2725649)
<EPS-PRIMARY> (.23) (.48)
<EPS-DILUTED> 0 0
</TABLE>
