<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] Quarterly Report under Section 13 or 15 (d) of the Securities
Exchange Act of 1934 for the quarterly period ended June 30, 1997
[ ] Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act.
For the transition period from _______________ to ______________
Commission file number 0-25678
MRV Communications, Inc.
(Exact name of registrant as specified in its charter)
Delaware 06-1340090
(State of other jurisdiction (IRS Employer
of incorporation or organization) identification no.)
8917 Fullbright Ave., Chatsworth, CA 91311
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (818) 773-9044
Check whether the issuer:(1)has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act 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 July 30, 1997, there were 23,533,498 shares of Common Stock, $.0034 par
value per share, outstanding.
<PAGE> 2
MRV COMMUNICATIONS, INC.
Form 10-Q June 30, 1997
INDEX
<TABLE>
<CAPTION>
PAGE NUMBER
-----------
<S> <C> <C>
PART I FINANCIAL INFORMATION
Item 1: Financial Statements:
Condensed Consolidated Balance Sheets as of June 30, 1997
(unaudited) and December 31, 1996 (audited) 3
Condensed Consolidated Statements of Income (unaudited)
for the Six and Three Months ended June 30, 1997 and 1996 4
Condensed Consolidated Statements of Cash Flows (unaudited)
for the Six Months ended June 30, 1997 and 1996 5
Notes to Condensed Consolidated Financial Statements 6
Item 2: Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II OTHER INFORMATION 10
Item 1. Legal Proceedings. 10
Item 2: Changes in Securities. 10
SIGNATURE 11
</TABLE>
As used in this Report, "MRV" or the "Company" refers to MRV Communications,
Inc. and its wholly owned consolidated subsidiaries.
2
<PAGE> 3
MRV COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share data)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
JUNE 30, DECEMBER 31,
1997 1996
(unaudited) (audited)
- ------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash & Cash Equivalents $ 6,856 $14,641
Short-term investments 24,981 17,659
Accounts receivable, net of
reserves of $2,518 in 1997 and $2,404 in 1996 32,780 24,296
Inventories 21,264 18,238
Deferred income taxes 2,760 2,660
Other current assets 4,008 4,377
- ------------------------------------------------------------------------------------------
Total current assets 92,649 81,871
PROPERTY AND EQUIPMENT - At cost,
net of depreciation and amortization 6,071 6,248
OTHER ASSETS:
Goodwill 2,603 2,788
Deferred income taxes 5,916 6,036
- ------------------------------------------------------------------------------------------
$107,239 $96,943
- ------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of financing lease obligations $ 56 $ 119
Accounts payable 16,249 11,328
Accrued liabilities 4,525 6,389
Accrued restructuring costs 2,487 3,549
Customer deposits 474 1,500
Income taxes payable 2,768 2,013
- ------------------------------------------------------------------------------------------
Total current liabilities 26,559 24,898
LONG-TERM LIABILITIES
Convertible debentures -- 17,325
Capital lease obligations, net of current portion 926 1,035
Other long-term liabilities 663 532
- ------------------------------------------------------------------------------------------
Total long term liabilities 1,589 18,892
MINORITY INTERESTS 922 852
COMMON STOCK ISSUED IN CONNECTION WITH ACQUISITION -- 10,530
SHAREHOLDERS' EQUITY:
Preferred stock, $0.01 par value:
no shares outstanding
Common stock, $0.0033 par value:
40,000,000 shares authorized and
23,226,581 shares outstanding in 1997
and 21,745,481 shares outstanding in 1996 79 70
Additional paid-in capital 76,793 49,636
Retained earnings (Deficit) 1,602 (7,950)
Cumulative translation adjustments (305) 15
- ------------------------------------------------------------------------------------------
Total stockholders' equity 78,169 41,771
- ------------------------------------------------------------------------------------------
$107,239 $96,943
- ------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes
3
<PAGE> 4
MRV COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share data)
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
------------------------------ -------------------------------
June 30, June 30, June 30, June 30,
1997 1996 1997 1996
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUES, net $75,092 $35,115 $39,528 $19,586
- ---------------------------------------------------------------------------------------------------------------
COSTS AND EXPENSES:
Cost of goods sold 43,061 20,400 22,885 11,411
Research and development expenses 5,789 3,676 3,041 1,992
Selling, general and administrative
expenses 12,007 5,095 6,232 2,959
- ---------------------------------------------------------------------------------------------------------------
Operating income 14,235 5,944 7,370 3,224
Interest expense related to
convertible debentures and
acquisition (427) -- (19) --
Other income, net 119 164 285 84
Provision for income taxes 4,305 1,883 2,367 962
Minority interests 70 63 60 --
- ---------------------------------------------------------------------------------------------------------------
NET INCOME $ 9,552 $ 4,162 $ 5,209 $ 2,346
- ---------------------------------------------------------------------------------------------------------------
EARNINGS PER SHARE: $ 0.38 $ 0.19 $ 0.21 $ 0.11
- ---------------------------------------------------------------------------------------------------------------
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES AND COMMON SHARE
EQUIVALENTS OUTSTANDING: 24,892 22,047 25,205 22,204
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
PRO FORMA INFORMATION
(prior to non-recurring charges)
<TABLE>
<CAPTION>
------------------------------ -------------------------------
Six Months Ended Six Months Ended
------------------------------ -------------------------------
June 30, June 30, June 30, June 30,
1997 1996 1997 1996
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET INCOME PRIOR TO NON-RECURRING
CHARGES NET OF THEIR TAX EFFECTS $ 9,979 $ 4,162 $ 5,228 $ 2,346
EARNINGS PER SHARE PRIOR TO
NON-RECURRING CHARGES NET OF
THEIR TAX EFFECTS $ 0.40 $ 0.19 $ 0.21 $ 0.11
</TABLE>
See accompanying notes
4
<PAGE> 5
MRV COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
<TABLE>
<CAPTION>
Six months ended
June 30
-----------------------
1997 1996
-------- -------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 9,552 $ 4,162
Adjustments to reconcile net income
to net cash provided by
(used in) operating activities:
Depreciation and amortization 735 263
Interest related to convertible
debentures and acquisition 427 --
Minority interests' share of income 70 744
(Increase) decrease in:
Accounts receivable (8,484) (8,761)
Inventories (3,026) (7,474)
Deferred income taxes 20 18
Other assets 369 (1,297)
Increase (decrease) in:
Accounts payable 4,921 8,000
Accrued liabilities (1,864) 607
Accrued restructuring costs (1,062) --
Income taxes payable 755 723
Customer deposits (1,026) --
Deferred rent -- (6)
Other long term liabilities 131 133
- ---------------------------------------------------------------------------------------
Net cash (used in)
operating activities 1,518 (2,888)
- ---------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (373) (2,774)
Purchases of intangible assets -- (407)
Restricted cash -- 4,494
Assumptions of capital lease -- 1,083
Purchases of investments (31,178) --
Redemption of short-term investments 23,856 1,000
- ---------------------------------------------------------------------------------------
Net cash provided by (used in)
investing activities (7,695) 3,396
- ---------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of capital lease obligations (172) --
Repurchase of common stock (4,230) --
Net proceeds from issuance of common stock 3,114 994
- ---------------------------------------------------------------------------------------
Net cash (used in) provided by
financing activities (1,288) 994
- ---------------------------------------------------------------------------------------
EFFECT OF EXCHANGE RATE CHANGES
ON CASH AND CASH EQUIVALENTS (320) --
Net decrease in cash and cash equivalents (7,785) 1,502
Cash and cash equivalents at beginning of period 14,641 1,951
- ---------------------------------------------------------------------------------------
Cash and cash equivalents at end of period 6,856 3,453
- ---------------------------------------------------------------------------------------
</TABLE>
See accompanying notes.
5
<PAGE> 6
MRV COMMUNICATIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL
Basis of Presentation - The accompanying unaudited condensed consolidated
financial statements have been prepared in accordance with the requirements of
Form 10-Q and, therefore, do not include all information and footnotes which
would be presented if such financial statements were prepared in accordance with
generally accepted accounting principles. These statements should be read in
conjunction with the audited financial statements presented in the Company's
Annual Report or Form 10-K for the year ended December 31, 1996.
In the opinion of management, these interim financial statements reflect all
normal and recurring adjustments necessary for a fair presentation of the
financial position and results of operations for each of the periods presented.
The results of operations and cash flows for such periods are not necessarily
indicative of results to be expected for the full year.
2. NET EARNINGS PER SHARE
Net earnings per share are based upon the weighted average number of shares
outstanding during each of the periods, including the dilutive effect of common
stock equivalents. Weighted average shares outstanding include the common stock
equivalents of the convertible debentures, stock options and warrants
outstanding during the period and net income for the purpose of calculating
earnings per share is consequently adjusted for the interest payable to
debenture holders.
3. PRO FORMA FINANCIAL DATA
In September 1996, the Company completed a private placement of
an aggregate of $30,000,000 principal amount of 5% convertible subordinated
debentures due August 6, 1999 (the "Debentures"). Proceeds from this private
placement were used to purchase the Fibronics Business. The Debentures were
convertible into Common Stock of the Company at any time at the option of the
holders at a discount from the market price of the Common Stock at the time of
conversion that increased over the life of the Debentures until it reached a
floor. At a meeting of the Emerging Issues Task Force held on March 13, 1997,
the staff of the Securities and Exchange Commission ("SEC") announced its
position on the accounting treatment for the issuance of convertible preferred
stock and debt securities with a beneficial conversion feature such as that
contained in the Debentures. As announced, the SEC requires that a beneficial
conversion feature attached to instruments such as the Debentures that are
convertible into equity be recognized and measured by allocating a portion of
the proceeds equal to the intrinsic value of that feature to additional paid-in
capital and charging it to interest expense. As a result of this position, the
Company added a non-recurring, non-cash charge to its results of operations for
the three and six months ended June 30, 1997 related to the issuance of the
Debentures in the amount of $19,100 and $427,000, respectively.
The following unaudited pro forma summary sets forth results of
operations excluding the non-recurring charges for interest related to
convertible debentures and acquisition.
Dollars in Thousands
Except Per Share Data
<TABLE>
<CAPTION>
Six Months Ended Three Months ended June
June 30, 1997 30, 1997
(Unaudited) (Unaudited)
------- -------
<S> <C> <C>
Revenues $75,092 $39,528
Income before income taxes 14,354 7,655
Net income 9,979 5,228
</TABLE>
6
<PAGE> 7
ITEM 2: Management's Discussion and Analysis of Financial Condition and Results
of Operations
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, statements of
operations data of the Company expressed as a percentage of revenues.
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
-------------------- ---------------------
June 30, June 30, June 30, June 30,
1997 1996 1997 1996
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUES, net 100.0% 100.0% 100.0% 100.0%
- ------------------------------------------------------------------------------------------------
COSTS AND EXPENSES:
Cost of goods sold 57.3% 58.1% 57.9% 58.3%
Research and development
expenses 7.7% 10.5% 7.7% 10.2%
Selling, general and
administrative expenses 16.0% 14.5% 15.8% 15.1%
- ------------------------------------------------------------------------------------------------
Operating income 19.0% 16.9% 18.6% 16.5%
Interest expense related
to convertible debentures
and acquisition -0.6% 0.0% 0.0% 0.0%
Other income, net 0.2% 0.5% 0.7% 0.4%
Provision for income taxes 5.7% 5.4% 6.0% 4.9%
Minority interests 0.1% 0.2% 0.2% 0.0%
- ------------------------------------------------------------------------------------------------
NET INCOME 12.7% 11.9% 13.2% 12.0%
- ------------------------------------------------------------------------------------------------
</TABLE>
Revenues
Revenues for the three and six months ended June 30, 1997 were $39,528,000 and
$75,092,000, respectively, as compared to revenues for the three and six months
ended June 30, 1996 $19,585,000 and $35,115,000, respectively. The changes
represented increases of $19,942,000 or 102% for the quarter ended June 30, 1997
over the quarter ended June 30, 1996 and $39,997,000 or 114% for the six months
ended June 30, 1997 over the six months ended June 30, 1996. Revenues increased
as a result of greater marketing efforts and greater market acceptance of the
Company's products, both domestically and internationally. International sales
accounted for approximately 58% and 57% of revenues for the quarter and six
months ended June 30, 1997, respectively, as compared to 51% and 46% of revenues
for the quarter and six months ended June 30, 1996, respectively. International
sales, as a percentage of total revenues, increased mainly as a result of
increased sales, marketing and support resources in place in Europe and
increased sales to the Pacific Rim region. Sales of networking products
represented approximately 75% of total sales during each of the quarter and six
months ended June 30, 1997 compared to approximately 67% and 65% for the quarter
and six months ended June 30, 1996. The increase in sales of networking products
was due primarily to increased sales of the MegaSwitch family of products.
7
<PAGE> 8
Gross Profit
Gross profit for the quarter and six months ended June 30, 1997 were $16,643,000
and $32,031,000, respectively compared gross profit for the quarter and six
months ended June 30, 1996 of $8,174,000 and $14,715,000 for the quarter and six
months ended June 30, 1996, respectively. The changes represented increases of
$8,469,000 or 104% for the quarter ended June 30, 1997 over the quarter ended
June 30, 1996 and $17,316,000 or 118% for the six months ended June 30, 1997
over the six months ended June 30, 1996. Gross Profit as a percentage of
revenues increased from 41.7% and 41.9% during the quarter and six months ended
June 30, 1996, respectively, to 42.1% and 42.7% during the quarter and six
months ended June 30, 1997 as a result of increased sales of higher margin
products such as the MegaSwitch family of products as well as lower cost
production techniques.
Research and Development
Research and development ("R&D") expenses were $3,041,000 and $1,992,000 and
represented 7.7% and 10.2% of revenues for the quarters ended June 30, 1997 and
1996, respectively. R&D expenses were $5,789,000 and $3,676,000 and represented
7.7% and 10.5% of revenues for the six months ended June 30, 1997 and 1996,
respectively. In the case of absolute dollars, the 53% and 57% increases in R&D
spending during the quarter and six months ended June 30, 1997 over the
comparable periods in 1996 were attributable to the continued development of the
Company's networking and fiber optic products including Ethernet/Fast
Ethernet/Gigabit Ethernet switches, Gigahub modules and three-way simultaneous
fiber optic transmission modules. Additional costs were also associated with the
hiring of additional research and development personnel and consultants. R&D
expenses as a percentage of revenues declined from 10.2% and 10.6% of revenues
during the quarter and six months ended June 30, 1996, respectively, to 7.7% for
each the quarter and six months ended June 30, 1997. These decreases were
primarily caused because the Company's revenues during the periods increased at
a faster rate than R&D expenses. The Company intends to continue to invest in
the research and development of new products. Management believes that the
ability of the Company to develop and commercialize new products is a key
competitive factor.
Selling, General and Administrative
Selling, general and administrative ("SG&A") expenses increased to $6,232,000
for the quarter ended June 30, 1997 from $2,959,000 for the quarter ended June
30, 1996. As a percentage of revenues, SG&A increased from 15.1% for the quarter
ended June 30, 1996 to 15.8% for the quarter ended June 30, 1997. SG&A expenses
increased to $12,007,000 for the six months ended June 30, 1997 from $5,095,000
for the six months ended June 30, 1996. As a percentage of revenues, SG&A
increased from 14.5% for the six months ended June 30, 1996 to 16.0% for the six
months ended June 30, 1997. The increases in SG&A expense, both in dollar
amounts and as a percentage of sales, are due primarily to substantially
increased marketing efforts as well as additional personnel and overhead costs
in additional and expanded locations.
Interest Expense Related to Convertible Debentures and Acquisition
To give effect to the accounting treatment announced by the staff of the SEC at
the March 13, 1997 meeting of the Emerging Issues Task Force relevant to the
Company's issuance of the Debentures having "beneficial conversion" features,
the value of the fixed discount has been reflected in the Company's financial
statements at and for the quarter and six months ended June 30, 1997 as
additional interest expense and such fixed discount has been accreted through
the first possible conversion date of the respective issuance. The Company will
not need to report future charges relating to the issuance of the Debentures
beyond the quarter and six months ended June 30, 1997 as the outstanding
principal and accrued interest were paid in full at April 4, 1997 through
conversion into Common Stock. See "Liquidity and Capital Resources" below.
Net Income
Net income increased from $2,346,000 and $4,162,000 for the quarter and six
months ended June 30, 1996, respectively, to $5,209,000 and $9,552,000 for the
quarter and six months ended June 30, 1997, respectively. Net income increased
primarily due to substantially increased sales.
8
<PAGE> 9
LIQUIDITY AND CAPITAL RESOURCES
In October 1994, the Company received proceeds of approximately $5,497,000 from
the issuance of 3,439,430 shares of Common Stock, upon exercise of the same
number of warrants that had been issued in the Company's initial public offering
of December 1992. In January 1995, the Company received net proceeds of
approximately $9,355,000 from the public offering of 2,700,000 shares of Common
Stock.
In September 1996, the Company completed a private placement of $30,000,000
principal amount of Debentures. The Debentures were convertible into Common
Stock at a discount from the market price at the time of conversion. At April 4,
1997, principal and accrued interest on the Debentures had been paid in full
through their conversion into a total of 1,816,159 shares of Common Stock at an
average conversion rate of $16.77 per share. As part of the private placement,
the Company also issued to the investors three-year warrants to purchase an
aggregate of up to 600,000 shares of Common Stock at a weighted average exercise
price of $26.67 per share.
In September 1996, the Company completed the Fibronics Acquisition from Elbit.
The purchase price for the Fibronics Business was approximately $22,800,000. The
purchase price was paid using a combination of cash and shares of Common Stock
of the Company. The cash was provided from a portion of the proceeds of the
private placement of Debentures. Elbit subsequently resold the shares of Common
Stock it received from the Company in the open market.
Net cash provided by operating activities for the six months ended June 30, 1997
was $1,518,000. Net cash used in financing activities for the six months ended
June 30, 1997 were $1,288,000. The cash used in financing activities was
primarily used for repurchase of the Common Stock from Elbit. Net cash used in
investing activities for the six months ended June 30, 1997 was $7,695,000. The
cash used in investing activities was primarily used to purchase investments
U.S. Government securities.
INFLATION
The company believes that the relatively moderate rate of inflation over the
past few years has not had a significant impact on the Company's sales or
operating results, or on the prices of raw materials.
9
<PAGE> 10
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
As previously reported, in July 1996, R. Douglas Sherrod, a former employee of
the Company who was terminated in August 1994, filed an action in Superior Court
of Los Angeles County, California against the Company and three of its executive
officers and directors, Mr. Noam Lotan, Dr. Shlomo Margalit and Dr. Zeev
Rav-Noy. In July 1997, the parties agreed to settle the lawsuit for, among other
things, Mr. Sherrod's agreement to release his claims and dismiss his lawsuit
with prejudice. The terms of the settlement for the Company are considered by
management not to be material to the Company's financial condition or results of
operations.
On December 27, 1996, Datapoint Corporation ("Datapoint") brought an action
against the NBase Communications, Inc., a subsidiary of the Company ("NBase")
and several other defendants in the United States District Court for the Eastern
District of New York alleging infringement of two of Datapoint's patents related
to LANs, more particularly to claimed improved LANs which interoperatively
combines additional enhanced capability and/or which provides multiple different
operational capabilities. In the same lawsuit, Datapoint alleges that other
defendants including Dayna Communications, Inc., Sun Microsystems, Inc.,
Adaptec, Inc., International Business Machines Corporation, Lantronix and SVEC
America Computer Corporation have infringed the same two patents. The Company
has been advised that several other companies, including Intel Corporation and
Cisco Systems, Inc. have also had actions brought against them by Datapoint with
respect to the same two patents. The action against NBase and its codefendants
seeks, among other things, an injunction against the manufacture or sale of
products which embody the inventions set forth in the two patents and single and
treble damages for the alleged infringement. Datapoint's complaint also seeks to
have the court determine that the named defendants shall serve as
representatives of a defendant class of manufacturers, vendors and users of
products allegedly infringing on Datapoint's claimed patents from which
defendant class Datapoint seeks the same relief as from the individual
defendants. The Company is cooperating with several of the defendants in pursuit
of common defenses and believes it has meritorious defenses to this action. If a
conclusion unfavorable to the Company is reached, however, Datapoint's claim
could materially affect the business, operating results and financial condition
of the Company.
Item 2. Change in Securities
(a) Not applicable
(b) Not applicable
(c) During August and September 1996, the Company sold an aggregate of $30
million principal amount 5% convertible subordinated debentures due
August 6, 1999 (the "Debentures") and warrants to purchase up to
600,000 shares of Common Stock at a weighted average exercise price of
$26.67 per share for three years to a total of 14 investors in a
private financing, receiving proceeds aggregating $30 million. The
Debentures were convertible into Common Stock of the Company at any
time at the option of the holders at a discount from the market price
of the Common Stock at the time of conversion that increased over the
life of the Debentures until it reached a floor. During the period from
April 1 to April 4, 1997 the balance of the outstanding $300,000 of the
$30 million principal amount of Debentures and accrued interest thereon
were converted into 18,159 shares of Common Stock.
The issuance of shares upon conversion of the Debentures were not
effected through any broker-dealer, and no underwriting discounts or
commissions were paid in connection with such issuance. Exemption from
registration requirements is claimed under the Securities Act of
10
<PAGE> 11
1933 (the "Securities Act") in reliance on Section 4(2) of the Securities Act,
Regulation D promulgated thereunder or Section 3(a)(9) of the Securities Act.
The recipients of securities in each such transaction represented their
intention to acquire the securities for investment only and not with a view to,
or for sale in connection with, any distribution thereof and appropriate legends
were affixed to the certificates evidencing the securities in such transactions.
All recipients had adequate access to information about the Company. No
consideration or other remuneration was paid or given, and no solicitation was
made, in connection with the conversion of the Debentures.
SIGNATURES
Pursuant to the requirements of the Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant certifies that it has duly
caused this Report to be signed on its behalf by the undersigned, thereunto duly
authorized on August 13, 1997.
MRV COMMUNICATIONS, INC.
By: /s/ EDMUND GLAZIER
---------------------------------------------
Edmund Glazer
Vice President of Finance and Administration
and Chief Financial Officer
11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND CONDENSED CONSOLIDATED
BALANCE SHEETS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
CONSOLIDATED FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 6,856
<SECURITIES> 24,981
<RECEIVABLES> 35,298
<ALLOWANCES> 2,518
<INVENTORY> 21,264
<CURRENT-ASSETS> 92,649
<PP&E> 6,071
<DEPRECIATION> 2,007
<TOTAL-ASSETS> 107,239
<CURRENT-LIABILITIES> 26,559
<BONDS> 0
0
0
<COMMON> 79
<OTHER-SE> 78,090
<TOTAL-LIABILITY-AND-EQUITY> 107,239
<SALES> 75,092
<TOTAL-REVENUES> 75,092
<CGS> 43,061
<TOTAL-COSTS> 17,796
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 114
<INTEREST-EXPENSE> 427
<INCOME-PRETAX> 14,235
<INCOME-TAX> 4,305
<INCOME-CONTINUING> 9,552
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,552
<EPS-PRIMARY> 0.38
<EPS-DILUTED> 0.38
</TABLE>
