<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Quarter Ended March 31, 1998
Commission File Number 0-21626
ELECTROGLAS, INC.
(exact name of registrant as specified in its charter)
DELAWARE 77-0336101
- ------------------------------ ----------------------
(state or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification Number)
2901 Coronado Drive
Santa Clara, CA 95054
Telephone: (408) 727-6500
-------------------------
(address of principal executive
offices and telephone number)
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
requirement for the past 90 days.
Yes X No
------ ------
As of May 4, 1998, 19,703,900 shares of the Registrant's common stock, $0.01 par
value, were issued and outstanding.
<PAGE> 2
INDEX
ELECTROGLAS, INC.
<TABLE>
<CAPTION>
Page No.
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Condensed Financial Statements
Consolidated condensed statements of operations -- Three
months ended March 31, 1998 and March 31, 1997 ................ 3
Consolidated condensed balance sheets -- March 31, 1998
and December 31, 1997 ......................................... 4
Consolidated condensed statements of cash flows -- Three months
ended March 31, 1998 and March 31, 1997 ....................... 5
Notes to consolidated condensed financial statements --
March 31, 1998 ................................................ 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations ................. 9
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K .............................. 13
SIGNATURES ............................................................... 14
</TABLE>
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<PAGE> 3
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Condensed Financial Statements
ELECTROGLAS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
March 31,
1998 1997
-------- --------
<S> <C> <C>
Net sales $ 36,865 $ 25,551
Cost of sales 21,178 15,667
-------- --------
Gross profit 15,687 9,884
-------- --------
Operating expenses:
Engineering, research and development 8,515 4,485
Selling, general and administrative 9,072 6,335
-------- --------
Total operating expenses 17,587 10,820
-------- --------
Operating loss (1,900) (936)
Interest income 1,361 1,222
Other expense, net (154) (246)
-------- --------
Income (loss) before income taxes (693) 40
Provision (benefit) for income taxes (277) 14
-------- --------
Net income (loss) $ (416) $ 26
======== ========
Basic net income (loss) per share $ (0.02) $ 0.00
======== ========
Diluted net income (loss) per share $ (0.02) $ 0.00
======== ========
Shares used in basic calculations 19,283 17,478
======== ========
Shares used in diluted calculations 19,283 17,857
======== ========
</TABLE>
See accompanying notes to consolidated condensed financial statements
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<PAGE> 4
ELECTROGLAS, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
March 31, December 31,
--------- ------------
1998 1997
--------- ---------
(Unaudited) (1)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 23,258 $ 20,259
Short-term investments 110,837 104,719
Accounts receivable, net 24,545 35,852
Inventories 25,915 26,032
Prepaid expenses and other current assets 3,699 4,577
Deferred income taxes 7,613 7,613
--------- ---------
Total current assets 195,867 199,052
Deferred income taxes 1,214 1,214
Equipment and leasehold improvements, net 15,578 16,392
Intangible assets, net 11,957 12,525
Other assets 878 950
--------- ---------
Total assets $ 225,494 $ 230,133
========= =========
Liabilities and stockholders' equity:
Current liabilities:
Short-term borrowings $ 1,384 $ 1,160
Accounts payable 6,857 7,424
Accrued liabilities 15,746 18,045
--------- ---------
Total current liabilities 23,987 26,629
Deferred income taxes 3,765 3,770
Stockholders' equity:
Preferred stock, $0.01 par value;
authorized 1,000; none outstanding -- --
Common stock, $0.01 par value;
authorized 40,000; issued and outstanding
19,690 at March 31, 1998 and 20,543 at
December 31, 1997 197 205
Additional paid-in capital 129,112 133,600
Deferred stock compensation (909) (983)
Retained earnings 69,347 78,736
Accumulated other comprehensive loss (5) (32)
--------- ---------
197,742 211,526
Less cost of common stock in treasury;
none at March 31, 1998 and 800 at
December 31, 1997 -- 11,792
--------- ---------
Total stockholders' equity 197,742 199,734
--------- ---------
Total liabilities and stockholders' equity $ 225,494 $ 230,133
========= =========
</TABLE>
(1) The information in this column was derived from the Company's audited
consolidated financial statements for the year ended December 31, 1997.
See accompanying notes to consolidated condensed financial statements
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<PAGE> 5
ELECTROGLAS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
------------------
March 31,
---------
1998 1997
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (416) $ 26
Changes to income not affecting cash 2,844 1,421
Changes in current assets and current liabilities 9,436 (752)
-------- --------
Cash provided by operating activities 11,864 695
Cash flow from investing activities:
Capital expenditures (938) (2,851)
Purchases of investments (42,031) (32,363)
Maturities of investments 35,689 57,636
Other assets (167) 96
-------- --------
Cash provided by (used in) investing activities (7,447) 22,518
Cash flow from financing activities:
Proceeds from short-term borrowings 224 198
Sales of common stock, net of issuance costs 1,594 696
Purchases of treasury stock (3,271) (473)
-------- --------
Cash provided by (used in) financing activities (1,453) 421
Effect of exchange rate changes 35 10
-------- --------
Net increase in cash and cash equivalents 2,999 23,644
Cash and cash equivalents at beginning of period 20,259 11,141
-------- --------
Cash and cash equivalents at end of period $ 23,258 $ 34,785
======== ========
</TABLE>
See accompanying notes to consolidated condensed financial statements
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<PAGE> 6
ELECTROGLAS, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE: 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated condensed financial statements have been
prepared by the Company in accordance with generally accepted accounting
principles for interim financial information and with Rule 10-01 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete consolidated
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments) considered necessary for fair presentation have
been included. These consolidated condensed financial statements should be read
in conjunction with the audited consolidated financial statements for the year
ended December 31, 1997, included in the Company's Annual Report on Form 10-K.
Operating results for the three month period ended March 31, 1998 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1998.
The Company's fiscal year end is December 31. The Company's fiscal quarters end
on the Saturday nearest the end of the calendar quarter. For convenience, the
Company has indicated that its quarters end on March 31, June 30 and September
30.
USE OF ESTIMATES - The preparation of the accompanying unaudited consolidated
condensed financial statements requires management to make estimates and
assumptions that affect the amounts reported in the financial statements. Actual
results could differ from those estimates.
NOTE: 2 - INVENTORIES
Inventories were comprised of the following:
<TABLE>
<CAPTION>
March 31, December 31,
--------- ------------
(in thousands) 1998 1997
------- -------
<S> <C> <C>
Raw materials $12,491 $11,571
Work in process 7,170 8,499
Finished goods 6,254 5,962
------- -------
$25,915 $26,032
======= =======
</TABLE>
NOTE: 3 - NET INCOME (LOSS) PER SHARE
Basic net income (loss) per share and diluted net (loss) per share amounts were
computed using the weighted average number of shares of common stock outstanding
during the period. Diluted net income per share was computed using the weighted
average number of common shares, including the effect of dilutive securities
attributable to stock options and restricted stock, outstanding during the
period. The following table sets forth the computation of basic and diluted net
income (loss) per share:
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<PAGE> 7
<TABLE>
<CAPTION>
Three months ended
------------------
March 31,
---------
(in thousands, except per share data)
1998 1997
------ -------
<S> <C> <C>
Numerator:
Net income (loss) $ (416) $ 26
====== =======
Denominator:
Denominator for basic net income (loss)
per share - weighted average shares 19,283 17,478
------ -------
Effect of dilutive securities:
Employee stock options -- 279
Restricted stock -- 100
------ -------
Dilutive potential common shares -- 379
------ -------
Denominator for diluted net income (loss) per share
- adjusted weighted average shares 19,283 17,857
====== =======
Basic net income (loss) per share $(0.02) $ 0.00
====== =======
Diluted net income (loss) per share $(0.02) $ 0.00
====== =======
</TABLE>
Options to purchase 2,172,000 shares of common stock and 100,000 shares of
restricted common stock were outstanding at March 31, 1998, but were not
included in the computation of diluted loss per share as the effect would be
antidilutive.
In connection with the acquisition of Knights Technology, Inc. and Techne
Systems, Inc., 135,191 and 120,000 shares of common stock have been placed in
escrow through May 1998 and December 1999, respectively, subject to certain
representations and warranties. These shares were not included in the
computation of diluted loss per share as the effect would be antidilutive.
NOTE: 4 - LEASE AGREEMENT
In March 1997, the Company entered into a five-year operating lease for
approximately 21.5 acres of undeveloped land in San Jose, California. The
monthly payments are based on the London Interbank Offering Rate (LIBOR). At
current interest rates, the annual lease payments represent approximately $0.7
million. At the end of the lease, the Company has the option to acquire the
property at its original cost of approximately $12.0 million and any current
rent due and payable.
The guaranteed residual payment on the lease is approximately $12.0 million. The
lease contains certain restrictive covenants. The Company was in compliance with
these covenants at March 31, 1998. The lease also contains a collateral option,
which would allow the Company to reduce rent expense. The Company has exercised
the collateral option and at March 31, 1998, the Company had pledged cash of
approximately $12.0 million which is included in cash and cash equivalents,
since the Company can withdraw the cash with ten days notice.
-7-
<PAGE> 8
NOTE: 5 - ENVIRONMENTAL REMEDIATION
In 1997, the Company performed an environmental investigation on its leased
property in Santa Clara, California, in cooperation with the California Regional
Water Quality Board, and will be performing clean up activities on the
property's soil. In the fourth quarter of 1997, the Company accrued $1.6 million
for environmental remediation costs which was the Company's best estimate of its
obligation. The Company has since incurred actual costs of $0.2 million. It is
possible that the Company's recorded estimate of its obligations may change in
the near term.
NOTE: 6 - STOCK REPURCHASE PROGRAM
During the quarter, the Company repurchased 200,000 shares of its common stock
at a cost of $3.3 million to complete the repurchase program authorized in 1996,
and retired the 1,000,000 shares of its common stock held in treasury at a cost
of $15.1 million.
NOTE: 7 - COMPREHENSIVE INCOME
As of January 1, 1998, the Company adopted Statement of Financial Accounting
Standards No. 130 (SFAS 130), "Reporting Comprehensive Income." SFAS 130
establishes new rules for the reporting and display of comprehensive income and
its components; however, the adoption of this Statement had no impact on the
Company's net income (loss) or stockholders' equity. SFAS 130 requires
unrealized gains or losses on the Company's available-for-sale investments and
foreign currency translation adjustments, which prior to adoption were reported
separately in stockholders' equity, to be included in other comprehensive income
(loss). Prior year financial statements have been reclassified to conform to the
requirements of SFAS 130.
For the quarters ended March 31, 1998 and 1997, total comprehensive loss
amounted to $0.4 million and $0.2 million, respectively.
NOTE: 8 - INCOME TAXES
The Company's estimated effective tax rate for the three months ended March 31,
1998 was a benefit rate of 40.0% compared to a tax rate of 34.0% for the first
quarter of 1997. The Company's benefit rate for the first quarter of 1998
included the impact of estimated refundable taxes available in the carryback
period. The first quarter 1997 tax rate of 34.0% reflected lower benefits for
tax exempt income and R&D credits offset by higher foreign taxes.
-8-
<PAGE> 9
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The statements contained in this Form 10-Q that are not purely historical are
forward-looking statements, including statements regarding the Company's
expectations, hopes or intentions regarding the future. Forward-looking
statements include, but are not limited to, statements about gross profits, cash
flow, liquidity, anticipated cash needs and availability. All forward-looking
statements included in this document are made as of the date hereof, based on
information available to the Company as of the date hereof, and Electroglas
assumes no obligation to update any forward-looking statement. It is important
to note that the Company's actual results could differ materially from those in
such forward-looking statements. You should consult the risk factors listed from
time to time in the Company's Annual Report on Form 10-K, as well as those
disclosed in this discussion and analysis included under the sections titled
"Factors That May Affect Results and Financial Condition" and "Volatility of
Stock Price."
The components of the Company's statements of operations, expressed as a
percentage of net sales, are as follows:
<TABLE>
<CAPTION>
Three months ended
March 31,
1998 1997
------- -------
<S> <C> <C>
Net sales 100.0% 100.0%
Cost of sales 57.4 61.3
------- -------
Gross profit 42.6 38.7
------- -------
Operating expenses:
Engineering, research and development 23.1 17.6
Selling, general and administrative 24.6 24.8
------- -------
Total operating expenses 47.7 42.4
------- -------
Operating loss (5.1) (3.7)
Interest income 3.7 4.8
Other expense, net (0.5) (0.9)
------- -------
Income (loss) before income taxes (1.9) 0.2
Provision (benefit) for income taxes (0.8) 0.1
------- -------
Net income (loss) (1.1)% 0.1%
======= =======
</TABLE>
RESULTS OF OPERATIONS
Net Sales
Net sales for the quarter ended March 31, 1998 were $36.9 million, a 44.3%
increase from net sales of $25.6 million in the comparable period last year in
which the Company was still feeling the effect of a general downturn in the
semiconductor industry which began to impact the Company's sales in the latter
half of 1996. The increase was due primarily to higher system unit sales,
particularly the sales of the Horizon 4090.
-9-
<PAGE> 10
For the quarters ended March 31, 1998 and 1997, net sales comprised of the
Horizon 4000 series (68.8% and 66.8%, respectively), the 2000 series (10.0% and
12.2%, respectively) and aftermarket sales, consisting primarily of service,
spare parts and upgrades (15.7% and 21.0%, respectively). For the quarter ended
March 31, 1998, an additional 5.4% of net sales came from the Knights yield
management software business, which was acquired in May 1997, with an immaterial
amount from the newly acquired inspection products business.
For the quarter ended March 31, 1998, international sales accounted for 41.9% of
net sales as compared to 45.2% for the same period last year. The decrease in
the percentage of international sales was due primarily to lower Korean sales in
the first quarter of 1998 from 1997. In absolute dollars, except for decreases
in Korea and Japanese sales, the Company experienced sales increases in North
America, Europe, and the other Asian Pacific regions. The Company's
international sales will likely continue to account for a significant portion of
net sales in 1998. However, current Asian economic conditions may have an
adverse impact on international sales for the year.
The ongoing uncertainty surrounding the Asian financial conditions, along with
volatility in product demand and pricing, have caused semiconductor
manufacturers to exercise caution in making capital equipment decisions. As a
result of the uncertainties in this market environment, any rescheduling or
cancellations of planned capital purchases by semiconductor manufacturers will
cause the Company's sales to fluctuate on a quarterly basis.
Gross Profit
Gross profit, as a percentage of sales, was 42.6% for the first quarter of 1998,
compared to 38.7% for the first quarter of 1997. The increase in gross profit,
as a percentage of sales, was primarily attributable to manufacturing
efficiencies from a larger production volume, the increment in higher margin
yield management software sales, and the transfer of labor and related overhead
to support research and development efforts for the next-generation prober. This
was offset partially by a sales shift from higher margin, mature products to the
Horizon 4090, which has lower margins due to higher material costs.
The Company believes that its gross profit will continue to be affected by a
number of factors, including competitive pressures, changes in demand for
semiconductors, changes in product mix, level of software sales, and excess
manufacturing capacity costs.
Engineering, Research and Development
Engineering, research and development expenses were $8.5 million for the first
quarter of 1998, up 89.9% from $4.5 million in the comparable quarter of a year
ago. This increase was primarily a result of accelerated spending, which
consisted of project materials and absorbed manufacturing labor, in the 300mm
and the 4090 Horizon 4090u (micro) programs. In addition, the incremental costs
related to the acquired yield management software and inspection products
businesses contributed to the increase.
Engineering, research and development expenses consist primarily of salaries,
project materials, and other costs associated with the Company's ongoing efforts
in hardware and software product development and enhancement.
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<PAGE> 11
Selling, General and Administrative
Selling, general and administrative expenses were $9.1 million for the first
quarter of 1998, up 43.2% from $6.3 million in the comparable quarter last year.
This was mainly attributable to the incremental costs and the amortization of
goodwill related to the acquired yield management software and inspection
products businesses, and to a lesser extent, an increase in the prober business
administrative support headcount and operating costs related to the new land
lease.
Income Taxes
The Company's estimated effective tax rate for the three months ended March 31,
1998 was a benefit rate of 40.0% compared to a tax rate of 34.0% for the first
quarter of 1997. The Company's benefit rate for the first quarter of 1998
included the impact of estimated refundable taxes available in the carryback
period. The first quarter 1997 tax rate of 34.0% reflected lower benefits for
tax exempt income and R&D credits offset by higher foreign taxes. Management
concluded that a valuation allowance of approximately $1.3 million was required
for acquired net operating losses that were significantly limited due to change
of ownership rules and foreign tax credit carryforwards.
FACTORS THAT MAY AFFECT RESULTS AND FINANCIAL CONDITION
The Company's future operating results may be affected by inherent uncertainties
that exist in the worldwide semiconductor equipment industry. Such uncertainties
include, but are not limited to, unexpected additional environmental remediation
expenses in the event the current remediation efforts need to be expanded or
ongoing investigation reveals additional contamination, timely availability and
acceptance of new hardware and software products, capital expenditures of
semiconductor manufacturers, changes in demand for semiconductor products,
competitive pricing pressures, product volume and mix, development of new
products, enhancement of existing products, global economic conditions,
availability of needed components, availability of skilled employees, timing of
orders received, fluctuations in foreign exchange rates, financial instability
in Asian markets, introduction of competitors' products having technological
and/or pricing advantages, and integration of the businesses of Knights and
Techne into the Company. In addition, the Company has experienced, and may in
the future experience, significant fluctuations in its quarterly financial
results. Accordingly, recent historical operating results should only be one
source of information when evaluating the future financial performance of the
Company.
The Company has determined that it will need to modify, upgrade or replace
significant portions of its software so that its computer systems will function
properly in the year 2000 and beyond. The Company has begun discussions with its
significant suppliers, large customers and financial institutions to ensure that
those parties have appropriate plans to remediate Year 2000 issues where their
systems interface with the Company's systems or otherwise impact its operations.
The Company is in the process of assessing the extent to which its operations
are vulnerable should those organizations fail to remediate properly their
computer systems.
The Company's comprehensive Year 2000 initiative is being managed by a team of
internal staff and outside consultants. The team's activities are designed to
ensure that there is no material adverse effect on the Company's core business
operations and that transactions with customers, suppliers and financial
institutions are fully supported. The Company is well under way with these
efforts and they are scheduled to be completed in early 1999. While the Company
believes its planning efforts are adequate to address its Year 2000 concerns,
there is no guarantee that the systems of other companies, including supplier
and customers on which the Company's systems, operations and sales rely, will be
converted on a timely basis and failures to effect such conversion could have
-11-
<PAGE> 12
a material effect on the Company. The cost of the Year 2000 initiatives is
currently not expected to be material to the Company's results of operations or
financial position. There can be no assurance, however, that the Year 2000
issues will be successfully resolved, that the failure to, or cost of, resolving
Year 2000 issues will not significantly impact the Company's results of
operations or financial position.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash, cash equivalents and short-term investments were $134.1
million at March 31, 1998, an increase of $9.1 million from December 31, 1997.
Operating activities generated cash of $11.9 million during the first quarter of
1998. This was due to a decrease in net current assets of $9.4 million and
noncash charges to income of $2.8 million, offset by a net loss of $0.4 million.
Accounts receivable decreased by $11.3 million due primarily from collection of
receivables from the immediate prior quarter's higher sales level.
Cash used in investing activities was $7.4 million due primarily from net
purchases of investments of $6.3 million and capital expenditures of $0.9
million for engineering design and test equipment, manufacturing leasehold
improvements, and enhancement of the Company's information technology
infrastructure.
Cash used in financing activities was $1.5 million. This was attributed to the
repurchase of an additional 200,000 shares of the Company's common stock at a
cost of $3.3 million, offset by the sale of common stock of $1.6 million under
employee stock plans and additional short-term borrowings of $0.2 million by the
Company's Japanese subsidiary.
At March 31, 1998, the Company's Japanese subsidiary had lines of credit with
Japanese banks with a total borrowing capacity of approximately $4.5 million
(denominated in Yen). Amounts outstanding under these facilities at March 31,
1998 were $1.4 million. These facilities enable the Company's Japanese
subsidiary to finance its working capital requirements locally.
Historically, the Company has generated cash in an amount sufficient to fund its
operations. The Company anticipates that its existing capital resources and cash
flow generated from future operations will enable it to maintain its current
level of operations and its planned operations including capital expenditures
for the foreseeable future.
VOLATILITY OF STOCK PRICE
The Company believes that any of the following factors can cause the price of
the Company's Common Stock to fluctuate, perhaps substantially: announcements of
developments related to the Company's business, fluctuations in the Company's
operating results, sales of substantial amounts of securities of the Company in
the marketplace, general conditions in the semiconductor industry or worldwide
economy, a shortfall in revenue or earnings from or changes in analysts'
expectations, announcements of technological innovations or new products or
enhancements by the Company or its competitors, developments in patents or other
intellectual property rights, and changes in the Company's relationships with
certain customers and suppliers. In addition, in recent years, the stock market
in general, and the market for the shares of small capitalization stocks in
particular, including the Company's, have experienced extreme price fluctuations
which have often been unrelated to the operating performance of affected
companies. There can be no assurance that the market price of the Company's
Common Stock will not continue to experience significant fluctuations in the
future, including fluctuations that are unrelated to the Company's performance.
-12-
<PAGE> 13
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
27 Financial Data Schedule
(b) Reports on Form 8-K:
None.
-13-
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ELECTROGLAS, INC.
DATE: May 12, 1998 BY: /s/ Armand J. Stegall
----------------------------- -----------------------------
Armand J. Stegall
Chief Financial Officer
-14-
<PAGE> 15
INDEX TO EXHIBITS
EXHIBIT DESCRIPTION
27 Financial Data Schedule
-15-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED STATEMENTS OF OPERATIONS, THE CONSOLIDATED BALANCE SHEETS, AND THE
ACCOMPANYING NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 23,258
<SECURITIES> 110,837
<RECEIVABLES> 25,008
<ALLOWANCES> 463
<INVENTORY> 25,915
<CURRENT-ASSETS> 195,867
<PP&E> 36,989
<DEPRECIATION> 21,411
<TOTAL-ASSETS> 225,494
<CURRENT-LIABILITIES> 23,987
<BONDS> 0
0
0
<COMMON> 197
<OTHER-SE> 197,545
<TOTAL-LIABILITY-AND-EQUITY> 225,494
<SALES> 36,865
<TOTAL-REVENUES> 36,865
<CGS> 21,178
<TOTAL-COSTS> 21,178
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3
<INCOME-PRETAX> (693)
<INCOME-TAX> (277)
<INCOME-CONTINUING> (416)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (416)
<EPS-PRIMARY> (0.02)
<EPS-DILUTED> (0.02)
</TABLE>
