UNITED STATES
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 March 30, 1997
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 0-21970
--------------------------------------
ACTEL CORPORATION
(Exact name of Registrant as specified in its charter)
California 77-0097724
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
955 East Arques Avenue
Sunnyvale, California 94086-4533
(Address of principal executive offices) (Zip Code)
(408) 739-1010
(Registrant's telephone number, including area code)
--------------------------------------
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
Number of shares of Common Stock outstanding as of May 12, 1997:
20,829,117.
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements.
ACTEL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
----------------------------------------
Mar. 30, Mar. 31, Dec. 29,
1997 1996 1996
------------ ------------ ------------
<S> <C> <C> <C>
Net revenues............................................................ $ 39,803 $ 35,043 $ 39,027
Costs and expenses:
Cost of revenues..................................................... 16,439 15,769 16,381
Research and development............................................. 6,547 6,011 5,855
Selling, general, and administrative................................. 10,131 8,308 10,651
------------ ------------ ------------
Total costs and expenses....................................... 33,117 30,088 32,887
------------ ------------ ------------
Income from operations.................................................. 6,686 4,955 6,140
Interest income and other, net.......................................... 340 289 16
------------ ------------ ------------
Income before tax provision............................................. 7,026 5,244 6,156
Tax provision........................................................... 2,495 1,967 2,003
------------ ------------ ------------
Net income.............................................................. $ 4,531 $ 3,277 $ 4,153
============ ============ ============
Net income per share.................................................... $ 0.21 $ 0.16 $ 0.19
============ ============ ============
Shares used in computing net income per share........................... 22,082 21,068 21,893
============ ============ ============
</TABLE>
ACTEL CORPORATION
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
<TABLE>
<CAPTION>
Mar. 30, Dec. 29,
1997 1996
------------ ------------
ASSETS
Current assets:
<S> <C> <C>
Cash and cash equivalents........................................................... $ 8,683 $ 3,543
Short-term investments.............................................................. 25,353 25,626
Accounts receivable, net............................................................ 26,642 29,495
Inventories......................................................................... 25,176 26,848
Other current assets................................................................ 20,267 19,093
------------ ------------
Total current assets.......................................................... 106,121 104,605
Property and equipment, net............................................................ 15,531 15,973
Investment in foundry.................................................................. 10,680 10,680
Other assets........................................................................... 5,237 5,454
------------ ------------
$ 137,569 $ 136,712
============ ============
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
<S> <C> <C>
Accounts payable.................................................................... $ 8,766 $ 9,933
Accrued salaries and employee benefits.............................................. 3,119 5,967
Other accrued liabilities........................................................... 5,003 5,922
Deferred income..................................................................... 27,066 27,386
------------ ------------
Total current liabilities..................................................... 43,954 49,208
Commitments
Redeemable convertible preferred stock................................................. -- 18,147
Shareholders' equity:
Common stock........................................................................ 21 18
Additional paid-in capital.......................................................... 82,857 63,133
Accumulated earnings................................................................ 10,737 6,206
------------ ------------
Total shareholders' equity.................................................... 93,615 69,357
------------ ------------
$ 137,569 $ 136,712
============ ============
</TABLE>
ACTEL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
<TABLE>
<CAPTION>
Three Months Ended
--------------------------
Mar. 30, Mar. 31,
1997 1996
------------ ------------
Operating activities:
<S> <C> <C>
Net income.......................................................................... $ 4,531 $ 3,277
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization..................................................... 2,442 1,415
Changes in operating assets and liabilities:
Accounts receivable............................................................. 2,853 2,014
Inventories..................................................................... 1,672 2,635
Other current assets............................................................ (1,174) (381)
Accounts payable and accrued liabilities........................................ (4,934) (2,746)
Deferred income................................................................. (320) 2,229
------------ ------------
Net cash provided by operating activities......................................... 5,070 8,443
------------ ------------
Investing activities:
Purchases of property and equipment................................................. (1,124) (1,826)
Purchases, sales, and maturities of short-term investments, net..................... 272 2,292
Investment in foundry............................................................... -- (3,611)
Other assets........................................................................ (660) (17)
------------ ------------
Net cash used in investing activities............................................. (1,512) (3,162)
------------ ------------
Financing activities:
Sale of common stock, net of repurchases............................................ 1,582 979
Principal payments under notes payable and capital lease obligations................ -- (17)
------------ ------------
Net cash provided by financing activities......................................... 1,582 962
------------ ------------
Net increase in cash and cash equivalents........................................... 5,140 6,243
Cash and cash equivalents, beginning of period...................................... 3,543 17,691
------------ ------------
Cash and cash equivalents, end of period............................................ $ 8,683 $ 23,934
============ ============
Supplemental disclosures of cash flows information and non-cash investing and
financing activities:
Cash paid for interest.............................................................. $ -- $ 2
Cash paid for taxes................................................................. 3,059 1,349
Conversion of preferred stock....................................................... 18,147 --
</TABLE>
ACTEL CORPORATION
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
1. Basis of Presentation and Summary of Significant Accounting Policies
The accompanying unaudited consolidated financial statements of Actel
Corporation (the "Company") have been prepared in accordance with generally
accepted accounting principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these
financial statements do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included.
The consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries. All significant intercompany accounts
and transactions have been eliminated in consolidation.
The financial statements should be read in conjunction with the audited
financial statements included in the Company's Annual Report to Shareholders for
the year ended December 29, 1996.
The results of operations for the three months ended March 30, 1997,
are not necessarily indicative of results that may be expected for the entire
year ending December 28, 1997.
2. Inventories
Inventories consist of the following:
<TABLE>
<CAPTION>
Mar. 30, Dec. 29,
1997 1996
------------ ------------
Inventories:
<S> <C> <C>
Purchased parts and raw materials.................................................. $ 1,733 $ 1,792
Work-in-process.................................................................... 15,928 17,080
Finished goods..................................................................... 7,515 7,976
------------ ------------
$ 25,176 $ 26,848
============ ============
</TABLE>
Inventories are stated at the lower of cost (first-in, first-out) or
market (net realizable value). Given the volatility of the market for the
Company's products, the Company makes inventory provisions for potentially
excess and obsolete inventory based on backlog and forecast demand. However,
such backlog demand is subject to revisions, cancellations, and rescheduling.
Actual demand will inevitably differ from such backlog and forecast demand, and
such differences may be material to the financial statements. Excess inventory
increases handling costs and the risk of obsolescence, is a non-productive use
of capital resources, and delays realization of the price and performance
benefits associated with more advanced manufacturing processes.
3. Provision for Taxes
The Company's effective tax rate for the three months ended March 30,
1997, was 35.5%. This rate is based on the estimated annual tax rate complying
with Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes." This rate differs from the federal statutory rate due primarily to state
income taxes (net of federal benefit) and recognition of certain deferred tax
assets subject to valuation allowances as of December 29, 1996.
4. Earnings Per Share
Earnings per common and common equivalent share as presented on the
face of the statements of income represent primary earnings per share. Dual
presentation of primary and fully diluted earnings per share has not been made
because the differences are insignificant.
In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, Earnings per Share, which is required to be adopted by
December 31, 1997. At that time, the Company will be required to change the
method currently used to compute earnings per share and to restate all prior
periods. Under the new requirements for calculating primary earnings per share,
the dilutive effect of stock options will be excluded. The impact is expected to
result in an increase in primary earnings per share for the first quarters ended
March 30, 1997, and March 31, 1996, by $0.03 per share. The impact of Statement
No. 128 on the calculation of fully diluted earnings per share for these
quarters is not expected to be material.
5. Conversion of Preferred Stock
On March 12, 1997, Texas Instruments Incorporated converted all of the
outstanding shares of Series A Preferred Stock into 2,631,578 shares of Common
Stock.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Results of Operations
Net Revenues
The Company's net revenues for the first quarter of fiscal 1997 were
$39.8 million, which represents an increase of 2% compared with the Company's
net revenues for the fourth quarter of 1996 and an increase of 14% compared with
the Company's net revenues for the first quarter of 1996. The Company derives
its revenues primarily from the sale of field programmable gate arrays
("FPGAs").
The sequential growth in quarterly net revenues resulted primarily from
an increase of 7% in unit sales of FPGAs that was partially offset by a decline
of 5% in the overall average selling price of FPGAs. Unit sales of FPGAs
increased sequentially principally because of increased strength in the
Company's commercial business. Unit sales of the Company's mature product
families (defined as ACT 1 and ACT 2) and the Company's new product families
(defined as ACT 3, XL, DX, and RH) both increased sequentially. The overall
average selling price of FPGAs declined sequentially principally because of a
decline in military/aerospace shipments, which tend to have higher average
selling prices, and an increase in the proportion of mature product shipments,
which tend to have lower average selling prices.
The year-over-year growth in quarterly net revenues resulted primarily
from a 2% increase in FPGA unit sales coupled with an 11% increase in the
overall average selling price of FPGAs. Unit sales increased principally because
of new product shipments; unit sales of mature products actually declined in the
first quarter of 1997 compared with the first quarter of 1996. The overall
average selling price of FPGAs increased year-over-year principally because of
the proportionately greater shipments of new products, which tend to have higher
average selling prices.
As is typical in the semiconductor industry, the average selling prices
of the Company's products generally decline over the lives of such products. To
increase revenues, the Company seeks to increase unit sales of existing
products, principally by reducing prices, and to introduce and sell new
products. No assurance can be given that these efforts will be successful.
Gross Margin
Gross margin for the first quarter of 1997 was 58.7% of net revenues,
compared with 58.0% of net revenues for the fourth quarter of 1996 and 55.0% of
net revenues for the first quarter of 1996.
The sequential and year-over-year improvement in quarterly gross margin
resulted primarily from improved manufacturing yields and the generation of an
increased percentage of net revenues from sales of the Company's new product
families, which tend to command higher margins. The Company's gross margin also
benefited from appreciation in the value of the United States dollar versus the
Japanese yen, in which some of the Company's wafer purchases are denominated,
foundry price concessions, and increased assembly and test efficiencies.
As is typical in the semiconductor industry, margins on the Company's
products generally decline as the average selling prices of such products
decline. The Company seeks to offset margin erosion by selling a higher
percentage of new products, which tend to have higher margins than more mature
products, and by reducing costs. The Company seeks to reduce costs by improving
wafer yields, negotiating price reductions with suppliers, increasing the level
and efficiency of its testing and packaging operations, achieving economies of
scale by means of higher production levels, and increasing the number of die
produced per wafer by shrinking the die size of its products. No assurance can
be given that these efforts will be successful. The ability of the Company to
shrink the die size of its FPGAs is dependent on the availability of more
advanced manufacturing processes. Because of the custom steps involved in
manufacturing antifuse-based FPGAs, the Company typically obtains access to new
manufacturing processes later than its competitors using standard manufacturing
processes.
Research and Development
Research and development expenditures for the first quarter of 1997
were $6.5 million, or 16% of net revenues, compared with $5.9 million, or 15% of
net revenues, for the fourth quarter of 1996 and $6.0 million, or 17% of net
revenues, for the first quarter of 1996. The sequential increase in research and
development spending resulted primarily from an increase in non-recurring
engineering (NRE) expenditures. Research and development expenditures for the
first quarter of 1997 declined as a percentage of net revenues compared with the
first quarter of 1996 due to the expanded scope of the Company's operations. The
Company currently intends to boost the level of its research and development
expenditures over the next several quarters to accelerate the introduction of
new products. Research and development expenditures may increase as a percentage
of net revenues for any or all of such quarters.
The Company's research and development consists of circuit design,
software development, and process technology activities. The Company believes
that continued substantial investment in research and development is critical to
maintaining a strong technological position in the industry and, therefore,
expects to continue increasing its research and development expenditures. Since
the Company's antifuse FPGAs are manufactured using a customized process, the
Company's research and development expenditures will probably always be higher
as a percentage of net revenues than that of its major competitors.
Selling, General, and Administrative
Selling, general, and administrative expenses for the first quarter of
1997 were $10.1 million, or 25% of net revenues, compared with $10.7 million, or
27% of net revenues, for the fourth quarter of 1996 and $8.3 million, or 24% of
net revenues, for the first quarter of 1996. The sequential decline in selling,
general, and administrative spending resulted primarily from a decline in sales
commission and bonus expenditures. The year-over-year increase in selling,
general, and administrative spending resulted primarily from an increased level
of sales and marketing activities in support of new products. The Company
currently intends to continue its heightened level of sales and marketing
activity in support of new products over the next several quarters. Selling,
general, and administrative expenditures may increase as a percentage of net
revenues for any or all of such quarters.
Tax Provision
The Company's effective tax rate for the three months ended March 30,
1997, was 35.5%. This rate is based on the estimated annual tax rate complying
with Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes." This rate differs from the federal statutory rate due primarily to state
income taxes (net of federal benefit) and recognition of certain deferred tax
assets subject to valuation allowances and R&D credits as of December 29, 1996.
Liquidity and Capital Resources
At the end of the first quarter of 1997, the Company's cash, cash
equivalents, and short-term investments were $34.0 million, compared with $29.2
million at the beginning of fiscal 1997. The amount of cash, cash equivalents,
and short term investments increased principally because of cash provided by
operations, including net income of $4.5 million and a reduction of
approximately 8% in net accounts receivable and inventories.
The Company believes that existing cash, cash equivalents, and short
term investments, together with cash from operations, are sufficient to meet its
current cash requirements. A portion of available cash may be used for
investment in or acquisition of complementary businesses, products, or
technologies.
The Company believes that the availability of financial resources is a
substantial competitive factor. To take advantage of opportunities as they
arise, or to withstand adverse business conditions should they occur, it may
become prudent or necessary for the Company to raise additional capital. The
Company intends to monitor the availability and cost of potential capital
resources, including equity, debt, and off-balance sheet financing arrangements,
with a view toward raising additional capital on terms that are acceptable to
the Company. No assurance can be given that additional capital will become
available on acceptable terms.
Additional Quarterly Information
The following table presents certain unaudited quarterly results for
each of the eight quarters in the period ended March 30, 1997. In the opinion of
management, all necessary adjustments (consisting only of normal recurring
accruals) have been included in the amounts stated below to present fairly the
unaudited quarterly results when read in conjunction with the audited
consolidated financial statements of the Company and notes thereto included in
the Company's Annual Report to Shareholders for the year ended December 29,
1996. These quarterly operating results are not necessarily indicative of the
results for any future period.
<TABLE>
<CAPTION>
Three Months Ended
-------------------------------------------------------------------------------------------
Mar. 30, Dec. 29, Sept. 29, June 30, Mar. 31, Dec. 31, Oct. 1, July 2,
1997 1996 1996 1996 1996 1995 1995 1995
---------- --------- ---------- ---------- --------- ---------- --------- ----------
(in thousands, except per share amounts)
Statements of Operations Data:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net revenues.......................... $ 39,803 $ 39,027 $ 38,014 $ 36,694 $ 35,043 $ 32,553 $ 29,834 $ 26,611
Cost of revenues...................... 16,439 16,381 16,164 16,105 15,769 15,234 14,416 13,243
---------- --------- ---------- ---------- --------- ---------- --------- ----------
Gross profit.......................... 23,364 22,646 21,850 20,589 19,274 17,319 15,418 13,368
Research and development.............. 6,547 5,855 6,417 5,650 6,011 5,802 5,430 4,885
Selling, general, and administrative.. 10,131 10,651 9,854 9,582 8,308 7,849 7,244 6,904
---------- --------- ---------- ---------- --------- ---------- --------- ----------
Income from operations................ 6,686 6,140 5,579 5,357 4,955 3,668 2,744 1,579
Net income............................ $ 4,531 $ 4,153 $ 3,905 $ 3,606 $ 3,277 $ 3,878 $ 2,935 $ 1,683
Net income per share.................. $ 0.21 $ 0.19 $ 0.18 $ 0.17 $ 0.16 $ 0.19 $ 0.14 $ 0.08
========== ========= ========== ========== ========= ========== ========= ==========
Shares used in computing net income
per share........................... 22,082 21,893 21,475 21,467 21,068 20,808 21,082 20,581
========== ========= ========== ========== ========= ========== ========= ==========
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended
-------------------------------------------------------------------------------------------
Mar. 30, Dec. 29, Sept. 29, June 30, Mar. 31, Dec. 31, Oct. 1, July 2,
1997 1996 1996 1996 1996 1995 1995 1995
---------- --------- ---------- ---------- --------- ---------- --------- ----------
As a Percentage of Net Revenues:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net revenues.......................... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of revenues...................... 41.3 42.0 42.5 43.9 45.0 46.8 48.3 49.8
---------- --------- ---------- ---------- --------- ---------- --------- ----------
Gross margin.......................... 58.7 58.0 57.5 56.1 55.0 53.2 51.7 50.2
Research and development.............. 16.4 15.0 16.9 15.4 17.2 17.8 18.2 18.4
Selling, general, and administrative.. 25.5 27.3 25.9 26.1 23.7 24.1 24.3 25.9
---------- --------- ---------- ---------- --------- ---------- --------- ----------
Income from operations................ 16.8 15.7 14.7 14.6 14.1 11.3 9.2 5.9
Net income............................ 11.4 10.6 10.3 9.8 9.4 11.9 9.8 6.3
</TABLE>
Factors Affecting Future Operating Results
The Company's operating results are subject to general economic
conditions and a variety of risks characteristic of the semiconductor industry
(including booking and shipment uncertainties, wafer supply fluctuations, and
price erosion) or specific to the Company, any of which could cause the
Company's operating results to differ materially from past results. For a
discussion of such risks, please see "Risk Factors" in Part I of the Company's
Annual Report on Form 10-K for 1996, which is incorporated herein by this
reference.
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings.
On April 14, 1997, the United States District Court for the Northern
District of California (the "Court") granted the Company's motion for summary
against QuickLogic Corporation ("QuickLogic") for patent infringement. In
granting the motion, the Court found that QuickLogic's pASIC 1 FPGAs infringe
Claim 1 of the Company's U.S. Patent 5,198,705 ("the `705 Patent"). Claim 1 of
the `705 Patent relates to the structure of universal combinatorial logic
modules used in FPGAs.
The Court's ruling marks the first substantive decision in the lawsuit
the Company filed against QuickLogic on January 24, 1994. The summary judgment
motion was filed on November 15, 1994. After extensive discovery and briefing,
the Special Master (to whom all pretrial matters have been referred) filed a
recommendation with the Court on October 4, 1996, that the Company's motion be
granted. Hearings were held on January 27 and February 3, 1997.
In the litigation, the Company has asserted claims for infringement of
six United States patents (including the `705 Patent) against QuickLogic, which
has denied infringement and asserted invalidity defenses. The Company has also
asserted causes of action for trade secret misappropriation, breach of contract,
breach of confidential business relationship, and unfair competition against
QuickLogic and John Birkner, who have denied all allegations. QuickLogic has
asserted counterclaims against the Company for infringement of two United States
patents. The Company denies that it infringes QuickLogic's patents and has
asserted numerous invalidity defenses. The Company seeks declaratory and
injunctive relief, treble damages in an unspecified amount, attorneys' fees, and
an assignment to the Company of QuickLogic's two patents-in-suit. QuickLogic
seeks declaratory and injunctive relief and treble damages in an unspecified
amount.
On February 14, 1997, The Company filed a motion for separate trial on
the issue of whether QuickLogic's patents-in-suit are invalid because the
Company's FPGAs accused of infringing those patents were offered for sale more
than one year prior to the date on which QuickLogic first applied for patent
rights. A hearing on that motion is expected to occur within the next month. By
order entered March 19, 1997, the Court reserved September 8, 1997, for trial of
the Company's "on-sale" defense should the motion for separate trial be granted.
It has set September 8, 1998, for trial of all remaining issues.
On February 28, 1997, QuickLogic filed a motion with the Special Master
seeking leave to assert claims for infringement of a recently-issued United
States patent against the Company. In opposing QuickLogic's motion to add new
patent claims, the Company advised the Special Master that it intends to assert
additional claims of patent infringement against QuickLogic, including claims
for infringement of a recently-issued United States patent. While the Company
believes that the new claims of both parties should be pursued in a separate
action, the Company will seek leave to assert its own new claims in the pending
litigation if QuickLogic is permitted to assert new claims.
After considering the facts currently known, management does not
believe that the ultimate outcome of the litigation will have a materially
adverse effect on the Company's business, financial condition, or operating
results, although no assurance can be given to that effect.
As is typical in the semiconductor industry, the Company has been and
expects to be notified from time to time of claims that it may be infringing
patents owned by others. No assurance can be given that such claims against the
Company will not result in litigation. All litigation, whether or not determined
in favor of the Company, can result in significant expense to the Company and
can divert the time and attention of the Company's technical and managerial
personnel from operational matters.
Although the Company has obtained patents covering elements of its
circuit architecture and certain techniques for manufacturing its antifuse, no
assurance can be given that the Company's patents will be determined to be valid
or that the claims of QuickLogic or any assertions of infringement by other
parties (or claims for indemnity from customers resulting from any infringement
claims) will not succeed. In the event of an adverse ruling in the QuickLogic
case or any other litigation involving intellectual property, the Company could
suffer significant (and possibly treble) monetary damages. The Company may also
be required to discontinue the use of certain processes; cease the manufacture,
use, and sale of infringing products; expend significant resources to develop
non-infringing technology; or obtain licenses under patents that it is
infringing. Any of these outcomes could have a materially adverse effect on the
Company's business, financial condition, and/or results of operations.
There are no other pending legal proceedings of a material nature to
which the Company is a party or of which any of its property is the subject.
There are no such legal proceedings known by the Company to be contemplated by
any governmental authority.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
The following exhibits are filed as part of, or incorporated by
reference into, this Quarterly Report on Form 10-Q:
11. Statement re computation of per share earnings
(b) Reports on Form 8-K
None
SIGNATURE
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.
ACTEL CORPORATION
Date: May 12, 1997 /s/ David M. Sugishita
--------------------------------------------------------
David M. Sugishita
Senior Vice President of Finance & Administration and
Chief Financial Officer
(as principal financial officer
and on behalf of Registrant)
ACTEL CORPORATION
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(unaudited, in thousands except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
--------------------------
Mar. 30, Mar. 31,
1997 1996
------------ ------------
Primary:
<S> <C> <C>
Average common shares outstanding...................................................... 18,636 17,667
Net effect of dilutive stock options, warrants, and convertible preferred stock
- based on the treasury stock method using average market price..................... 3,446 3,401
------------ ------------
Shares used in computing net income per share.......................................... 22,082 21,068
============ ============
Net income............................................................................. $ 4,531 $ 3,277
============ ============
Net income per share................................................................... $ 0.21 $ 0.16
============ ============
Fully diluted:
Average common shares outstanding...................................................... 18,636 17,667
Net effect of dilutive stock options, warrants, and convertible preferred stock
- based on the treasury stock method................................................ 3,445 3,401
------------ ------------
Shares used in computing net income per share.......................................... 22,081 21,230
============ ============
Net income............................................................................. $ 4,531 $ 3,277
============ ============
Net income per share................................................................... $ 0.21 $ 0.15
============ ============
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-28-1997
<PERIOD-START> DEC-30-1996
<PERIOD-END> MAR-30-1997
<CASH> 8,683
<SECURITIES> 25,353
<RECEIVABLES> 28,314
<ALLOWANCES> 1,672
<INVENTORY> 25,176
<CURRENT-ASSETS> 106,121
<PP&E> 34,961
<DEPRECIATION> 19,430
<TOTAL-ASSETS> 137,569
<CURRENT-LIABILITIES> 43,954
<BONDS> 0
<COMMON> 82,878
0
0
<OTHER-SE> 10,737
<TOTAL-LIABILITY-AND-EQUITY> 137,569
<SALES> 39,803
<TOTAL-REVENUES> 39,803
<CGS> 16,439
<TOTAL-COSTS> 16,439
<OTHER-EXPENSES> 16,678
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 340
<INCOME-PRETAX> 7,026
<INCOME-TAX> 2,495
<INCOME-CONTINUING> 4,531
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,531
<EPS-PRIMARY> .21
<EPS-DILUTED> .21
</TABLE>
