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 September 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 September 30, 1998, there were 16,238,626 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 September 30, 1998
(unaudited) and December 31, 1997 3
Consolidated Statements of Income for the Three Months
and the Nine Months Ended September 30, 1998 and
1997 (unaudited) 4
Consolidated Statements of Cash Flows for the Nine Months 5
Ended September 30, 1998 and 1997(unaudited)
Notes to Consolidated Financial Statements (unaudited) 6-8
Item 2. Management's Discussion and Analysis of Financial 9-12
Condition and Results of Operations
Part II. Other Information
Item 1. Legal Proceedings 13
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
<PAGE>
<TABLE>
PART I. Financial Information
Item 1. Financial Statements
<CAPTION>
DIALOGIC CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
September 30 December 31,
1998 1997
(Unaudited)
ASSETS
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 47,134 $ 18,764
Marketable securities 41,508 43,774
Accounts receivable (net of allowance for doubtful
accounts of $1,826 and $1,280, respectively) 50,959 45,186
Inventory:
Raw materials 5,015 8,827
Work in process 6,603 6,724
Finished goods $ 12,897 $ 14,941
--------- ---------
24,515 30,492
Deferred income taxes 10,435 7,190
Other current assets 10,749 6,842
--------- ---------
Total current assets 185,300 152,248
Property and equipment, net 25,470 22,615
Other assets 5,467 7,541
---------- ----------
TOTAL ASSETS $ 216,237 $ 182,404
========== ==========
LIABILITIES
Current liabilities:
Accounts payable $ 9,382 $ 14,361
Accrued salaries 8,782 6,390
Accrued royalties 1,605 1,825
Accrued expenses 11,246 7,986
Income taxes payable 8,938 1,237
Current maturities of long term liabilities 259 529
---------- ----------
Total current liabilities 40,212 32,328
Long term liabilities 2,469 2,481
Deferred income tax 3,226 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; 16,238,626 and 16,100,862
issued, respectively 216 214
Additional paid-in capital 55,716 51,941
Treasury stock, at cost 257,500 and
50,000 shares, respectively (8,884) (1,912)
Retained earnings 123,586 94,023
Unamortized restricted stock compensation (712) -
Accumulated other comprehensive income 408 599
-------------- --------------
Total shareholders' equity 170,330 144,865
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 216,237 $ 182,404
========== ==========
</TABLE>
See Notes to Unaudited Consolidated Financial Statements
<PAGE>
<TABLE>
DIALOGIC CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)
(In thousands, except per share data)
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues $ 76,121 $ 68,760 $ 215,640 $ 189,045
Cost of goods sold 28,956 25,882 80,386 71,021
------ -------- -------- -------
Gross profit 47,165 42,878 135,254 118,024
Research and development 17,097 13,542 46,888 38,391
Selling, general and administrative expenses 20,017 19,855 59,116 58,347
Asset impairment - - 5,297 -
--------- -------- ------- -------
Operating income 10,051 9,481 23,953 21,286
Interest income, net 818 444 2,254 1,148
Gain on sale of subsidiary - - 23,384 -
-------- --------- ------ ------
Income before provision for income taxes 10,869 9,925 49,591 22,434
Provision for income taxes 3,913 3,573 20,028 8,076
----- ----- ------ ------
Net income 6,956 6,352 29,563 14,358
======== ======== ====== ======
Net income per share:
Basic 0.43 0.40 1.84 0.90
Diluted 0.43 0.38 1.78 0.87
Weighted average number of common shares:
Basic 16,003 15,994 16,030 15,888
Diluted 16,361 16,623 16,606 16,499
</TABLE>
See Notes to Unaudited Consolidated Financial Statements
<PAGE>
<TABLE>
DIALOGIC CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
<CAPTION>
Nine Months Ended
September 30,
1998 1997
---- ----
Cash flows from operating activities:
<S> <C> <C>
Net income 29,563 14,358
Adjustments for non-cash items
included in net income::
Depreciation and amortization 6,030 7,004
Asset impairment 5,297 -
Deferred income taxes (2,289) (1,550)
Gain on sale of subsidiary (23,384) -
Other (427) 883
Changes in operating assets
and liabilities 2,772 836
-------- ---------
Net cash provided by operating
activities 17,562 21,531
------ ------
Investing Activities: `
Capital expenditures (10,825) (7,548)
Purchase of short-term investments (9,887) (17,386)
Proceeds from sales of short-term
investments 10,892 5,951
Proceeds from sale of subsidiary 26,000 -
Other (131) -
---------- -------
Net cash flows provided by (used in)
investing activities 16,049 (18,983)
------- --------
Financing Activities:
Exercise of stock options 712 1126
Purchase of treasury stock (6972) -
Issuance of common stock 1381 1305
Other (489) (597)
---------- ---------
Net cash provided by (used in)
financing activities (5,368) 1,834
--------- -------
Effect of exchange rate on cash 127 402
Increase in cash and cash equivalents 28,370 4,784
Cash and cash equivalents, beginning
of period 18,764 11,848
------ --------
Cash and cash equivalents, end of period $ 47,134 $ 16,632
======== ========
Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest $ 65 $ 82
Income taxes $ 12,600 $ 8,938
Supplemental disclosures of non-cash investing and
financing activities
Change in net unrealized gains on available
for sale securities $ (1,275) $ (3,563)
Issuance of restricted common stock $ (764) $ -
</TABLE>
See Notes to Unaudited Consolidated Financial Statements.
<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 September 30, 1998, and the unaudited consolidated statements of
income and unaudited consolidated statements of cash flows for the
interim periods ended September 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 certain
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.
4. Available for Sale Securities
The following is a summary of the available for sale securities as of
September 30, 1998 and December 31, 1997 ($000's):
<TABLE>
<S> <C> <C> <C> <C>
September 30, 1998 Cost Gross Gross Estimated
Unrealized Unrealized Fair Value
Gains Losses
________________________________________________________________________________
Municipal bonds $ 38,872 274 - $39,146
Equity investments 1,954 408 - 2,362
Total marketable securities $ 40,826 682 - $41,508
________________________________________________________________________________
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 decreased
to $1.69 at September 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."
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 nine months ended
September 30, 1998 and 1997, were as follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Net earnings $ 6,956 $ 6,352 $ 29,563 $14,358
Other comprehensive (expense)
income, net of tax (896) (841) (416) (3,821)
------ ------- --------- --------
Total comprehensive earnings $ 6,060 $ 5,511 $ 29,147 $10,537
======= ======= ======== ========
</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 nine months ended September 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 optio ns issued
pursuant to the Company's Incentive Stock Compensation Plans.
<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
compet itive 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.
Results of Operations
Consolidated revenues for the three months and the nine months ended September
30, 1998, increased 10.7% and 14.1%, respectively, from the comparable prior
year periods. Consolidated revenues were $76.1 million for the three months
ended September 30, 1998. Year-to-date consolidated revenues were $215.6
million. North America's revenue represented $45.4 million and $133.3 million
for the three and nine months ended September 30, 1998, respectively. Despite
global economic issues, international revenues increased 25.7% for the three
months ended September 30, 1998, and 20.1% for the nine months ended September
30, 1998. Revenue in Europe increased approximately 47.1% and 47.4% for the
three and nine month periods ended September 30, 1998. During the nine months
ended September 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.
Gross profit for the three months and nine months ended September 30, 1998, was
62.0% and 62.7% of revenues, respectively, compared to 62.4% for each respective
prior year period. Gross profit for the three months ended September 30, 1998,
as compared to the three months ended September 30, 1997, experienced slight
erosion related to product mix.
Research and development expenses as a percentage of revenues represented 22.4%
for the three months ended September 30, 1998, and 21.7% for the nine months
ended September 30, 1998, as compared to 19.7% and 20.3% for the comparable
periods in 1997. The Company continues to maintain a high level of R&D
investment to meet the needs of its customers and to obtain new design wins.
Dialogic 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 Com pany'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 $20.0 million in the
third quarter and $59.1 million for the nine months ended September 30, 1998, as
compared to $19.9 million and $58.3 million in the comparable prior year
periods. As a percentage of total revenues, selling, general and administrative
expenses decreased to 26.3% in the three months ended September 30, 1998, and
27.4% in the nine months ended September 30, 1998, compared to 28.9% and 30.9%
in the comparable prior year periods, reflecting a leverage of these expenses
over a larger revenue base. Selling, general, and administrative expenses for
the nine months ended September 30, 1998, have remained relatively stable as
compared to prior periods.
Net interest income for the three months and nine months ended September 30,
1998, increased to $818 thousand and $2.3 million from $444 thousand and $1.2
million in the comparable prior year periods. The increase primarily reflects
the earnings on the increase in the Company's short-term investment portfolio
due in part to the proceeds from the sale of a subsidiary during the first
quarter of 1998.
The Company's effective income tax rate for the nine months ended September 30,
1998, was 40.4% as compared to 36.0% for the nine months ended September 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 of
$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 nine months periods ended September 30, 1998, was
$7.0 million and $29.6 million, respectively, or $0.43 and $1.78 per share on a
diluted basis, compared to $6.4 million and $14.4 million or $0.38 and $0.87 per
diluted share for the comparable periods ended September 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 after-tax or $0.29 per diluted share for the write-down of
certain 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 information 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 16,361,019 and
16,606,323 for the three and nine months ended September 30, 1998, respectively,
as compared to 16,623,172 and 16,498,685 for the respective prior year period.
<PAGE>
C. Financial Condition
As of September 30, 1998, and December 31, 1997, the Company had working capital
of $145.1 million and $119.9 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 nine months ended September 30, 1998, Dialogic's cash and
cash equivalents increased by $28.4 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 $10.8 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 $17.6 million. Cash
outflows for the repurchase of treasury stock of $7.0 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 credi t
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 Year 2000 issue is primarily the result of computer programs using a
two-digit format, as opposed to four digits, to difine the applicable year. Some
computer systems will be unable to correctly interpret dates beyond the year
1999, which could cause a system failure or other computer errors, leading to a
disruption in the operation of such systems. 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 believes its internal systems, including both its
financial operating information technology systems, and non-information
technology systems are Year 2000 compliant. The Company's financial operating
systems have been upgraded to a Year 2000 compliant release within the context
of its normal operating environment. Such upgrade was not accelerated in
anticipation of Year 2000 issues. No material additional costs were incurred in
upgrading the Company's internal systems. This phase of the Company's Year 2000
study is completed. The Company anticipates working jointly with strategic
vendors and business partners to identify any Year 2000 issues that may impact
the Company. The Company anticipates that evaluation and corrective actions, if
any, will be on-going through the remainder of 1998 and through 1999. To date
the Company has not identified any such problems which it believes cannot be
corrected without material impact on the Company. However, there can be no
assurance that the companies with which the Company does business will achieve
Year 2000 compliance in a timely fashion, or that such failure to comply by
another company will not have a material adverse effect on the Company.
The Company has and will incur internal staff costs related to this aspect of
its initiative. These costs are not considered to have a material impact on the
Company's operating results and have not been quantified.
The Company believes the products it currently offers for sale or license are
all Year 2000 compliant.
Based on the assessment effort to date, the Company does not believe that the
Year 2000 issue will have a material adverse effect on its financial condition,
results of operations, or cash flows. This statement constitutes a
Forward-Leading Statement. Actual results could differ materially from the
Company's beliefs and expectations, however, are based on certain assumptions
and expectations, which ultimately may prove to be inaccurate. Potential sources
of risk include (a) the inability of principal suppliers to be Year 2000 ready,
which could result in delays in product deliveries from such suppliers; and (b)
disruption of the distribution channel, including transportation vendors; (c)
undiscovered Year 2000 incompatibilities in systems or products; (d) customer
problems which could affect revenue demand; and The Company's Year 2000
assessment is ongoing and the consideration of contingency plans will continue
to be evaluated as new information becomes available. At this stage, however,
the Company has not developed a comprehensive contingency plan to address
situations that may result if any of the third parties upon which the Company is
dependent is unable to achieve Year 2000 compliance. The need for such a
contingency plan will be evaluated through the remainder of 1998 and through
1999. Undiscovered issues related to Year 2000 compatibility could have a
material 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. As this statement only requires certain disclosure, its adoption
will not have any impact on the consolidated financial position, consolidated
results of operations or cash flows of the Company.
<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 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
27.1 - Financial Data Schedule
<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: November 13, 1998
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit Page
27.1 Financial Data Schedule E-1
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS 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>
<CIK> 0000899042
<NAME> DIALOGIC CORPORATION
<MULTIPLIER> 1000
<CURRENCY> U.S.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<EXCHANGE-RATE> 1
<CASH> 47,134
<SECURITIES> 41,508
<RECEIVABLES> 50,959
<ALLOWANCES> 1,826
<INVENTORY> 24,515
<CURRENT-ASSETS> 185,300
<PP&E> 55,986
<DEPRECIATION> (30,516)
<TOTAL-ASSETS> 216,237
<CURRENT-LIABILITIES> 40,212
<BONDS> 0
0
0
<COMMON> 216
<OTHER-SE> 170,114
<TOTAL-LIABILITY-AND-EQUITY> 216,237
<SALES> 215,640
<TOTAL-REVENUES> 215,640
<CGS> 80,386
<TOTAL-COSTS> 80,386
<OTHER-EXPENSES> 111,301
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 121
<INCOME-PRETAX> 49,591
<INCOME-TAX> 20,028
<INCOME-CONTINUING> 29,563
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 29,563
<EPS-PRIMARY> 1.84
<EPS-DILUTED> 1.78
</TABLE>
