SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 quarterly period ended June 30, 1998 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: 33-59598
DIALOGIC CORPORATION
(Exact name of registrant as specified in its charter)
New Jersey 22-2476114
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1515 Route 10
Parsippany, New Jersey 07054
(Address of principal executive office, including zip code)
973-993-3000
(Registrant's telephone number, including area code)
-------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (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___
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
At June 30, 1998, there were 16,200,631 shares of Common Stock, no par
value, outstanding.
<PAGE>
DIALOGIC CORPORATION
INDEX
Page Number
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets as of June 30, 1998 (unaudited) 3
and December 31, 1997
Consolidated Statements of Income for the Three Months and the 4
Six Months Ended June 30, 1998 and 1997 (unaudited)
Consolidated Statements of Cash Flows for the Six Months 5
Ended June 30, 1998 and 1997(unaudited)
Notes to Consolidated Financial Statements (unaudited) 6-8
Item 2. Management's Discussion and Analysis of Financial 9-11
Condition and Results of Operations
Part II. Other Information
Item 1. Legal Proceedings 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 13
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<TABLE>
<CAPTION>
PART I. Financial Information
Item 1. Financial Statements
DIALOGIC CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
June 30, December 31,
1998 1997
---------------- -----------------
<S> <C> <C>
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 41,150 $ 18,764
Marketable securities 44,632 43,774
Accounts receivable (net of allowance for doubtful
accounts of $1,684 and $1,280, respectively) 49,357 45,186
Inventory:
Raw materials 6,134 8,827
Work in process 8,979 6,724
Finished goods 13,639 14,941
---------------- -----------------
28,752 30,492
Deferred income taxes 9,494 7,190
Other current assets 9,357 6,842
---------------- -----------------
Total current assets 182,742 152,248
Property and equipment, net 22,534 22,615
Other assets 4,596 7,541
---------------- -----------------
TOTAL ASSETS $ 209,872 $ 182,404
---------------- -----------------
---------------- -----------------
LIABILITITES
Current liabilities:
Accounts payable $ 9,641 $ 14,361
Accrued salaries and benefits 7,427 6,390
Accrued royalties 1,461 1,825
Accrued expenses 11,332 7,986
Income taxes payable 9,155 1,237
Current maturities of long term liabilities 392 529
---------------- -----------------
Total current liabilities 39,408 32,328
Long term liabilities 2,432 2,481
Deferred income tax 3,128 2,730
SHAREHOLDERS' EQUITY
Preferred stock, no par value, stated value $0.01-10,000,000
shares authorized; none issued - -
Common stock, no par value, stated value $0.01-60,000,000
shares authorized; 16,200,631 and 16,100,862 shares
issued, respectively 215 214
Additional paid-in capital 54,152 51,941
Treasury stock, at cost 199,500 and 50,000 shares, respectively (7,155) (1,912)
Retained earnings 116,630 94,023
Accumulated other comprehensive income 1,062 599
---------------- -----------------
Total shareholders' equity 164,904 144,865
---------------- -----------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 209,872 $ 182,404
---------------- -----------------
---------------- -----------------
See Notes to Unaudited Consolidated Financial Statements.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
DIALOGIC CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)
(In thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
------------------------------- --------------------------------
------------------------------- --------------------------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues $ 73,131 $ 63,196 $139,519 $120,285
Cost of goods sold 26,773 23,370 51,430 45,139
------------- -------------- ------------- --------------
Gross profit 46,358 39,826 88,089 75,146
Research and development 16,032 12,595 29,791 24,849
Selling, general and administrative expenses 20,124 20,118 39,099 38,492
Asset impairment - - 5,297 -
------------- -------------- ------------- --------------
Operating income 10,202 7,113 13,902 11,805
Interest expense 24 25 45 57
Interest income 813 379 1,465 765
Net realized gains (losses) on available for sale securities - - 16 (4)
Gain on sale of subsidiary - - 23,384 -
------------- -------------- ------------- --------------
Income before provision for income taxes 10,991 7,467 38,722 12,509
Provision for income taxes 3,957 2,688 16,115 4,503
------------- -------------- ------------- --------------
Net income $ 7,034 $ 4,779 $ 22,607 $ 8,006
------------- -------------- ------------- --------------
------------- -------------- ------------- --------------
Net income per share:
Basic $ 0.44 $ 0.30 $ 1.41 $ 0.51
Diluted $ 0.42 $ 0.29 $ 1.35 $ 0.49
Weighted average number of common shares:
Basic 16,026 15,889 16,044 15,839
Diluted 16,625 16,375 16,729 16,437
</TABLE>
See Notes to Unaudited Consolidated Financial Statements.
-4-
<PAGE>
<TABLE>
<CAPTION>
DIALOGIC CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Six Months Ended June 30,
1998 1997
<S> <C> <C>
---- ----
Cash flows from operating activities:
Net Income $ 22,607 $ 8,006
Adjustments for non-cash items included in net income:
Depreciation and amortization 3,450 4,523
Asset impairment 5,297 -
Deferred income taxes (2,182) (332)
Gain on sale of subsidiary (23,384) -
Other 187 484
Changes in operating assets and liabilities (485) (541)
------------ -----------
Net cash provided by operating activities 5,490 12,140
------------ -----------
Investing Activities:
Capital expenditures (5,410) (6,062)
Purchase of short-term investments (7,189) (4,609)
Proceeds from sales of short-term investments 7,117 3,237
Proceeds from sale of subsidiary 26,000 -
Other (131) -
----------- -----------
Net cash flows provided by (used in) investing activities 20,387 (7,434)
------------ -----------
Financing Activities:
Exercise of stock options 526 422
Purchase of treasury stock (5,243) -
Issuance of common stock 903 842
Other (332) (442)
------------ -----------
Net cash provided by (used in) financing activities (4,146) 822
------------ -----------
Effect of exchange rate on cash 655 (261)
Increase (decrease) in cash and cash equivalents 22,386 5,267
Cash and cash equivalents, beginning of period 18,764 11,848
------------ -----------
Cash and cash equivalents, end of period $ 41,150 $ 17,115
------------ -----------
------------ -----------
Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest $ 45 $ 57
Income taxes $ 8,930 $ 3,557
Supplemental disclosures of non-cash investing and
financing activities
Change in net unrealized gains on available for sale securities $ 494 $ (2,812)
</TABLE>
See Notes to Unaudited Consolidated Financial Statements.
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<PAGE>
DIALOGIC CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. Unaudited Consolidated Financial Statements
In the opinion of management, the unaudited consolidated balance sheet at
June 30, 1998, and the unaudited consolidated statements of income and
unaudited consolidated statements of cash flows for the interim periods
ended June 30, 1998, and 1997 include all adjustments, consisting only of
normal recurring adjustments, necessary for a fair statement of results
for the interim periods presented.
In accordance with the rules of the Securities and Exchange Commission,
certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. The year-end
balance sheet data was derived from audited financial statements, but
does not include disclosures required by generally accepted accounting
principles. It is suggested that these statements be read in conjunction
with the Company's most recent Annual Report on Form 10-K for the fiscal
year ended December 31, 1997.
Certain prior year amounts have been reclassified to conform to the 1998
presentation.
2. Accounting Pronouncements
In June 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards ("SFAS") No. 131, "Disclosures about
Segments of an Enterprise and Related Information," which is effective
for the Company for the year ending December 31, 1998. This statement
establishes standards for the way that public business enterprises report
information about operating segments in annual financial statements and
requires that these enterprises report selected information about
operating segments in interim financial reports issued to shareholders.
As this statement only requires classification disclosure, its adoption
will not have any impact on the consolidated financial position,
consolidated results of operations or cash flows of the Company.
3. Divestment
On February 17, 1998, the Company completed the sale of the principal
assets and operations of Spectron Microsystems Inc., a wholly owned
subsidiary, to Texas Instruments for $26.0 million. The sale resulted in
an after tax gain of $14.0 million. The sale will not have a significant
effect on the sales or earnings of the Company in future periods.
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<PAGE>
<TABLE>
<CAPTION>
4. Available for Sale Securities
The following is a summary of the available for sale securities as of
June 30, 1998 and December 31, 1997 ($000's):
June 30, 1998 Cost Gross Gross Estimated
Unrealized Unrealized Fair Value
Gains Losses
- ---------------------------------------------- ----------------- ---------------- -----------------
<S> <C> <C> <C> <C>
Municipal bonds $ 39,951 $ 132 $ - $ 40,083
Equity investments 1,954 2,595 - 4,549
- ---------------------------------------------- ----------------- ---------------- -----------------
Total marketable securities $ 41,905 $ 2,727 $ - $ 44,632
- ---------------------------------------------- ----------------- ---------------- -----------------
December 31, 1997 Cost Gross Gross Estimated
Unrealized Unrealized Fair Value
Gains Losses
- ---------------------------------------------- ----------------- ---------------- -----------------
Municipal bonds $ 39,863 $ 149 $ - $ 40,012
Equity investments 1,954 1,808 - 3,762
- ---------------------------------------------- ----------------- ---------------- -----------------
Total marketable securities $ 41,817 $ 1,957 $ - $ 43,774
- ---------------------------------------------- ----------------- ---------------- -----------------
</TABLE>
The Company owns 1,399,715 shares of capital stock in Voice Control Systems,
Inc. ("VCS"). The shares are classified as available for sale under SFAS No.
115, "Accounting for Certain Investments in Debt and Equity Securities". The
fair value of the Company's investment in VCS has been determined by reference
to the market price for VCS stock as quoted on publicly traded exchanges on the
representative valuation dates. The price per share of VCS stock had increased
to $3.25 at June 30, 1998, as compared to $2.69 at December 31, 1997.
Unrealized gains/losses are reported net of tax in the equity section (as a
component of accumulated other comprehensive income) of the Company's balance
sheet in accordance with SFAS No. 115.
5. Asset Impairment
During the first quarter of 1998, the Company undertook a strategic review of
its business lines and product offerings. At the conclusion of this review, the
Company determined it would no longer allocate resources to its Dianatel product
line. Activities to sell and upgrade Dianatel products were ceased and employees
working on Dianatel related products were diverted to other activities. As the
result of this decision, management has concluded that the carrying value of the
goodwill that arose on the purchase of Dianatel Corporation was no longer
justifiable, and the Company recorded a non-cash impairment loss of $3.5 million
related to the write-down of goodwill.
During the first quarter of 1998, the Company upgraded certain internal
information technology systems. Accordingly, the Company took a $1.3 million
after-tax charge to reduce the carrying value of the internal information
technology assets that will no longer be supported.
Management believes the recognition of these impairments were in accordance with
the provisions of SFAS No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of."
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<PAGE>
6. Changes in Accounting Principles
Effective January 1, 1998, the Company adopted SFAS No. 130, "Reporting
Comprehensive Income." This statement requires that all items recognized under
accounting standards as components of comprehensive earnings be reported in an
annual financial statement that is displayed with the same prominence as other
annual financial statements. This statement also requires that an entity
classify items of other comprehensive earnings by their nature in an annual
financial statement. For the Company, other comprehensive earnings include
foreign currency translation adjustments and unrealized gains and losses on
marketable securities classified as available-for-sale. Annual financial
statements for prior periods will be reclassified, as required. The Company's
total comprehensive earnings for the three months and six months ended June 30,
1998 and 1997, were as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
--------------------------- ------------------------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net earnings $ 7,034 $ 4,779 $ 22,607 $ 8,006
Other comprehensive (expense) income, net of tax (3,379) (906) 483 (2,941)
------------ ----------- ------------ --------------
Total comprehensive earnings $ 3,655 $ 3,873 $ 23,090 $ 5,065
------------ ----------- ------------ --------------
------------ ----------- ------------ --------------
</TABLE>
7. Earnings per share
The Company adopted the provisions of SFAS No. 128, "Earnings per share" in the
year ended December 31, 1997. SFAS No. 128 requires the dual presentation of
basic and diluted earnings per share ("EPS"). Basic EPS excludes dilution and is
computed by dividing net income available to common shareholders by the weighted
average number of common shares outstanding for the period. Diluted EPS reflects
the potential dilution that could occur if stock options or other contracts to
issue common stock were exercised and resulted in the issuance of common stock
that then shared in the earnings of the Company. Diluted EPS is computed using
the treasury stock method when the effect of common stock equivalents would be
dilutive. EPS for the three and six months ended June 30, 1997, have been
restated to comply with the provisions of SFAS No. 128. The only reconciling
item between the denominator used to calculate basic EPS and the denominator
used to calculate diluted EPS is the dilutive effect of stock options issued
pursuant to the Company's Incentive Stock Compensation Plans.
-8-
<PAGE>
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
A. General
The following discussion and analysis should be read in conjunction with the
Consolidated Financial Statements, the related Notes to Consolidated Financial
Statements and Management's Discussion and Analysis of Results of Operations and
Financial Condition included in the Company's Annual Report on Form 10-K for the
year ended December 31, 1997 and the Unaudited Consolidated Financial Statements
and related Notes to Consolidated Financial Statements included in Item 1 of
Part 1 of this Quarterly Report on Form 10-Q. This Form 10-Q contains
forward-looking statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995 ("Forward-Looking Statements"),
which involve risks and uncertainties. The Company's actual results may differ
significantly from the results discussed in the forward-looking statements.
Factors that might cause such a difference include product demand and market
acceptance risks, the effect of worldwide economic conditions, the impact of
competitive products and pricing, the Company's ability to enter new markets,
the adoption of new standards and the Company's ability to meet those standards,
product development, effects of competitive forces and pace of deregulation in
the telecommunications industry, the status of intellectual property rights,
commercialization and technological difficulties, capacity and supply
constraints or difficulties, the impact of acquisitions or mergers on customers,
competitors or suppliers, consolidation of capital resources, general business
conditions, the effect of the Company's accounting policies, and other risks
detailed in the Company's Annual Report on Form 10-K for the year ended December
31, 1997. Such factors may also cause substantial volatility in the market price
of the Company's common stock
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make certain estimates and
assumptions that affect the reported amount of costs and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reported
period. Significant estimates in the Company's financial statements include
allowances for accounts receivable, product returns and net realizable values of
inventories. Actual results could differ from these estimates.
B. Results of Operations
Consolidated revenues for the three months and the six months ended June 30,
1998, increased 16.0% from the comparable prior year periods. Consolidated
revenues were $73.1 million for the three months ended June 30, 1998.
Year-to-date consolidated revenues represented $139.5 million. North America's
revenue increased 15.0% to $45.4 million and 19% to $87.6 million for the three
and six months ended June 30, 1998, respectively. International revenues
increased 17.0% for the three months ended June 30, 1998, and 12.0% for the six
months ended June 30, 1998. Partially offsetting the international growth,
revenue in Asia/Pacific decreased approximately 6.0% and 34.0% for the three and
six month periods ended June 30, 1998. The decrease in Asia/Pacific revenue is
due to the general economic conditions currently experienced throughout the
region. During the six months ended June 30, 1998, the Company continued to
release commercial production of its new products based on DM3 architecture. DM3
products are now available in PCI, cPCI, and VME configurations utilizing
industry standards such as H.323, G.723.1, G.711, GSM and T.38.
-9-
<PAGE>
Gross profit for the three months and six months ended June 30, 1998, was 63.4%
and 63.1% of revenues, respectively, compared to 63.0% and 62.5% for each
respective prior year period. Gross profit continues to experience improvements
related to product mix and the continued effects of Dialogic's cost reduction
efforts.
Research and development expenses as a percentage of revenues represented 21.9%
in the three months and $21.4% in the six months ended June 30, 1998, as
compared to 19.9% and 20.7% for the three and six months ended June 30, 1997.
The Company continues to invest engineering resources in the development of the
Dialogic DM3 Mediastream Resource Architecture ("DM3") as well as development of
IP telephony and open switch products. The Company believes that investment in
research and development is critical to future growth and anticipates investing
at current levels throughout the remainder of 1998 in an effort to enable the
Company to maintain its technological leadership in the marketplace. This
estimate regarding future research and development as a percentage of revenue
represents a Forward-Looking Statement; actual results could differ materially
from the Company's expectations as a result of a variety of factors including
variations in revenue, product market and competitive conditions, the
availability of required resources and the Company's technological needs.
Selling, general and administrative expenses represented $20.1 million in the
second quarter and $39.1 million for the six months ended June 30, 1998, as
compared to $20.1 million and $38.5 million in the comparable prior year
periods. As a percentage of total revenues, selling, general and administrative
expenses decreased to 27.5% in the three months ended June 30, 1998, and 28.0%
in the six months ended June 30, 1998, compared to 31.8% and 32.0% in the
comparable prior year periods. Selling, general and administrative expenses have
increased for the first six months of 1998 as compared to the six months ended
June 30, 1997, as the Company incurred additional sales commissions on a higher
revenue base. The increase is partially offset by foreign currency fluctuation,
primarily yen denominated.
Net interest income for the three months and six months ended June 30, 1998,
increased to $789 thousand and $1.4 million from $354 thousand and $708 thousand
in the comparable prior year periods. The increase reflects the earnings on the
increase in the Company's short-term investment portfolio and the proceeds from
the sale of a subsidiary during the first quarter of 1998.
The Company's effective income tax rate for the six months ended June 30, 1998,
was 41.6% as compared to 36.0% for the six months ended June 30, 1997. The
increase is attributable to the write-down of the non-tax deductible goodwill of
Dianatel Corporation in the first quarter of 1998 in the amount to $3.5 million,
as well as the higher effective tax rate on the gain on sale of a subsidiary.
Net income for the three and six months periods ended June 30, 1998, was $7.0
million and $22.6 million, respectively, or $0.42 and $1.35 per share on a
diluted basis, compared to $4.8 million and $8.0 million or $0.29 and $0.49 per
diluted share for the comparable periods ended June 30, 1997. Results for the
current year include an after-tax gain of $14.0 million or $0.84 per diluted
share on the first quarter asset sale of a subsidiary and non-recurring charges
of $4.8 million or $0.29 per diluted share for the write-down of selected
assets. Management believes that this additional information regarding earnings
is useful and meaningful to an understanding of the operating performance of the
Company. However, this measurement of earnings should not be considered by the
reader as an alternative to net income as an indicator of the Company's
operation or performance, or to cash flows as an indicator of liquidity.
Weighted average diluted shares outstanding represented 16,625 million and
16,729 million for the three and six months ended June 30, 1998, respectively,
as compared to 16,375 million and 16,437 for the respective prior year periods.
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<PAGE>
C. Financial Condition
As of June 30, 1998, and December 31, 1997, the Company had working capital of
$143 million and $120 million respectively, and a current ratio (i.e., the ratio
of current assets to current liabilities) of 4.6 to 1 and 4.7 to 1,
respectively. For the six months ended June 30, 1998, Dialogic's cash and cash
equivalents increased by $22.3 million. Cash inflows from proceeds of the sale
of the assets of Spectron Microsystems were $26.0 million for the first quarter
of 1998. Cash outflows of approximately $5.4 million were expended for the
purchase of fixed assets related to the continued growth of the Company's
operations. Net cash flows from operating activities were $5.5 million. Cash
outflows for the repurchase of treasury stock of $5.2 million, was partially
offset by the proceeds from the exercise of stock options and the issuance of
shares of common stock. The Company believes that its current liquidity, coupled
with cash generated from operations and credit available under its credit lines,
will be sufficient to meet its liquidity and capital requirements for at least
the next twelve months. This statement constitutes a Forward-Looking Statement.
The actual sufficiency of such capital resources could differ materially from
the Company's expectations, depending among other things upon the extent to
which unanticipated capital requirements may arise and the extent to which
unanticipated events may have a materially adverse effect on the Company's
profitability.
D. Year 2000
The Company has undertaken a company-wide study and testing program to locate
and cure any Year 2000 issues in the products or systems on which it relies and
in the products it offers for sale or license. The Company has and will incur
internal staff costs related to this initiative. Total incremental expenses are
not expected to have a material impact on the Company's financial condition. The
Company believes its financial operating systems as well as the products it
offers for sale or license are currently Year 2000 compliant. The Company
continues to work with other third-party suppliers to identify exposure and
obtain assurance that all significant third parties will be Year 2000 compliant.
However, there can be no assurance that the systems of the companies on which
the Company's systems rely will be timely converted or that any such failure to
convert by another company would not have an adverse effect on the Company's
systems. The Company anticipates no material adverse effect resulting from Year
2000 problems. This represents a forward-looking statement under the Private
Securities Litigation Reform Act of 1995. Undiscovered issues related to Year
2000 compatibility could have an adverse impact.
E. New Accounting Pronouncements
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 131, "Disclosures about Segments of
an Enterprise and Related Information," which is effective for the Company
beginning January 1, 1998. This statement establishes standards for the way that
public business enterprises report information about operating segments in
annual financial statements and requires that these enterprises report selected
information about operating segments in interim financial reports issued to
shareholders. The Company is currently evaluating the impact that the adoption
of SFAS No. 131 will have on its consolidated financial statements.
-11-
<PAGE>
PART II. Other Information
Item 1. Legal Proceedings
For other information regarding certain pending legal
proceedings, see Item 3 of the Company's Annual Report on Form
10-K for the year ended December 31, 1997.
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Stockholders was held on April 29, 1998,
in Whippany, New Jersey. A class of three directors was
nominated by the Board of Directors to serve for a three-year
term and was elected at the meeting. At such meeting,
16,155,876 shares were entitled to vote, and a plurality of
the votes was needed for election. The table below discloses
the vote which was recorded for each nominee for office.
In Favor Withheld
-------------- -----------
Howard G. Bubb 13,816,601 150,961
Kenneth J. Burkhardt, Jr. 13,816,044 151,518
John N. Lemasters 13,836,244 131,318
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
27.1 - Financial Data Schedule
-12-
<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.
DIALOGIC CORPORATION
By: /s/Thomas G. Amato
-------------------------
Thomas G. Amato
Vice President,
Chief Financial Officer
By: /s/Jean M. Beadle
--------------------------
Jean M. Beadle
Chief Accounting Officer,
Controller
Dated: August 7, 1998
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<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit Page
27.1 Financial Data Schedule E-1
-14-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This is financial data schedule contains summary financial information extracted
from Dialogic Corporation's financial statements and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 41,150
<SECURITIES> 44,632
<RECEIVABLES> 51,041
<ALLOWANCES> 1,684
<INVENTORY> 28,752
<CURRENT-ASSETS> 182,742
<PP&E> 50,367
<DEPRECIATION> (27,833)
<TOTAL-ASSETS> 209,872
<CURRENT-LIABILITIES> 39,408
<BONDS> 0
0
0
<COMMON> 209
<OTHER-SE> 164,695
<TOTAL-LIABILITY-AND-EQUITY> 209,872
<SALES> 139,519
<TOTAL-REVENUES> 139,519
<CGS> 51,430
<TOTAL-COSTS> 51,430
<OTHER-EXPENSES> 74,187
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 45
<INCOME-PRETAX> 38,722
<INCOME-TAX> 16,115
<INCOME-CONTINUING> 22,607
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 22,607
<EPS-PRIMARY> 1.41
<EPS-DILUTED> 1.35
</TABLE>
