SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
[ ] 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: 0-22756
Advanced Technology Materials, Inc.
(Exact name of registrant as specified in its charter)
Delaware 06-1236302
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7 Commerce Drive, Danbury, CT 06810
(Address of principal executive offices) (Zip Code)
203-794-1100
(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 __
The number of shares outstanding of the registrant's common stock as of July
26, 1996 was 8,741,160.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Advanced Technology Materials, Inc.
Consolidated Balance Sheet
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
(unaudited)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 4,329,949 $ 3,609,265
Marketable securities 17,034,288 21,855,473
Accounts receivable, net of allowance for doubtful
accounts of $103,501 in 1996 and $93,491 in 1995 9,500,588 9,233,015
Inventory 3,942,671 2,647,142
Other 483,525 345,486
------------ --------------
Total current assets 35,291,021 37,690,381
Property and equipment, net 7,294,577 5,575,343
Long-term investment 1,000,000 1,000,000
Goodwill and other intangibles 5,368,164 5,532,216
============ ==============
$48,953,762 $ 49,797,940
============ ==============
Liabilities and stockholders' equity
Current liabilities:
Accounts payable 3,085,481 $ 3,121,355
Accrued expenses 4,467,796 2,994,482
Notes payable 863,181 4,725,238
Other 816,249 625,495
------------ --------------
Total current liabilities 9,232,707 11,466,570
Notes payable, less current portion 5,480,235 5,257,155
Other long-term liabilities 201,292 177,086
Stockholders' equity:
Preferred stock, par value $.01:
1,000,000 shares authorized; none issued
and outstanding - -
Common stock, par value $.01: 15,000,000 shares
authorized; issued 8,739,485 in 1996
and 8,721,611 in 1995 87,395 87,216
Additional paid-in capital 37,092,978 37,060,652
Accumulated deficit (3,140,845) (4,250,739)
-------------- --------------
Total stockholders' equity 34,039,528 32,897,129
============== ==============
$ 48,953,762 $ 49,797,940
============== ==============
</TABLE>
See accompanying notes.
Advanced Technology Materials, Inc.
Consolidated Statement of Operations
(unaudited)
<TABLE>
<CAPTION>
Three months ended June 30,
1996 1995
<S> <C> <C>
Revenues:
Product revenues $10,164,431 $5,049,231
Contract revenues 2,211,758 2,136,006
------------ -----------
Total revenues 12,376,189 7,185,237
Cost of revenues:
Cost of product revenues 4,358,087 2,275,280
Cost of contract revenues 1,895,822 1,808,186
------------ -----------
Total cost of revenues 6,253,909 4,083,466
------------ -----------
Gross profit 6,122,280 3,101,771
Operating expenses:
Research and development 2,185,333 831,604
Selling, general and administrative 3,344,420 2,066,650
------------ -----------
5,529,753 2,898,254
------------ -----------
Operating income 592,527 203,517
Interest income 271,658 90,179
Interest expense (140,163) (52,523)
------------ -----------
Net income before taxes 724,022 241,173
Income taxes 83,574 74,959
------------ -----------
Net income $ 640,448 $ 166,214
============= ============
Net income per share $0.07 $0.02
------------- ------------
Weighted average shares outstanding 9,413,062 7,695,682
============= ============
</TABLE>
See accompanying notes.
Advanced Technology Materials, Inc.
Consolidated Statement of Operations
(unaudited)
<TABLE>
<CAPTION>
Six months ended June 30,
1996 1995
<S> <C> <C>
Revenues:
Product revenues $17,743,508 $9,039,808
Contract revenues 4,694,752 4,211,177
----------- ----------
Total revenues 22,438,260 13,250,985
Cost of revenues:
Cost of product revenues 7,607,245 4,064,182
Cost of contract revenues 3,928,608 3,564,410
----------- ----------
Total cost of revenues 11,535,853 7,628,592
----------- ----------
Gross profit 10,902,407 5,622,393
Operating expenses:
Research and development 4,048,215 1,747,769
Selling, general, and administrative 5,919,948 3,893,253
----------- ----------
9,968,163 5,641,022
----------- ----------
Operating income (loss) 934,244 (18,629)
Interest income 549,926 238,910
Interest expense (262,702) (85,852)
----------- ----------
Income before taxes 1,221,468 134,429
Income taxes 111,574 125,919
----------- ----------
Net income $1,109,894 $ 8,510
=========== ==========
Net income per share $0.12 $0.00
----------- ----------
Weighted average shares outstanding 9,364,302 7,647,494
============ ==========
</TABLE>
See accompanying notes.
Advanced Technology Materials, Inc.
Consolidated Statement of Cash Flows
(unaudited)
<TABLE>
<CAPTION>
Six months ended June 30,
1996 1995
<S> <C> <C>
Operating activities
Net income $ 1,109,894 $ 8,510
Adjustments to reconcile net income to net cash
provided (used)
by operating activities:
Depreciation and amortization 1,039,977 678,283
Stock option compensation - 50,000
Changes in operating assets and liabilities
Increase in accounts receivable (267,573) (696,322)
Increase in inventory (1,295,529) (389,597)
Increase in other assets (210,579) (312,149)
Decrease in accounts payable (35,874) (360,972)
Increase (decrease) in accrued expenses 1,473,314 (2,684)
Increase in other liabilities 214,960 432,017
------------- --------------
Total adjustments 918,696 (601,424)
------------- --------------
Net cash provided (used) by operating activities 2,028,590 (592,914)
------------- --------------
Investing activities
Capital expenditures (2,522,619) (1,540,378)
Long term investment - (1,000,000)
Sale of marketable securities 4,821,185 1,954,767
Other asset purchases - (300,000)
------------- --------------
Net cash provided (used) by investing activities 2,298,566 (885,611)
------------- --------------
Financing activities
Proceeds from issuance of notes payable 727,216 2,023,686
Principal payments on notes payable (4,366,193) (420,418)
Proceeds from the exercise of stock options and 32,505 46,095
warrants
------------- --------------
Net cash (used) provided by financing activities (3,606,472) 1,649,363
------------- --------------
Net increase in cash and cash equivalents 720,684 170,838
Cash and cash equivalents, beginning
of period 3,609,265 2,049,397
============= ==============
Cash and cash equivalents, end of period $4,329,949 $2,220,235
============= ==============
</TABLE>
See accompanying notes.
Advanced Technology Materials, Inc.
Notes To Interim Consolidated Financial Statements
(unaudited)
1. Basis of Presentation
The accompanying unaudited interim financial statements of Advanced
Technology Materials, Inc. ("ATMI" or the "Company") have been prepared in
accordance with the instructions to Form 10-Q and Rule 10.01 of Regulation
S-X and do not include all of the financial information and disclosures
required by generally accepted accounting principles.
In the opinion of the Company's management, the financial information
contained herein has been prepared on the same basis as the audited
Consolidated Financial Statements contained in the Company's Form 10-K for
the year ended December 31, 1995, and includes adjustments (consisting only
of normal recurring adjustments) necessary to present fairly the unaudited
quarterly results set forth herein. The Company's quarterly results have, in
the past, been subject to fluctuation and, thus, the operating results for
any quarter are not necessarily indicative of results for any future fiscal
period.
2. Per Share Data
Earnings per common share is computed using the treasury stock method based
on the weighted average number of common shares and common stock equivalent
shares outstanding during the period. Shares from the assumed exercise of
options and warrants granted by the Company have been included in the
computation of earnings per share for all periods, unless their inclusion
would be antidilutive.
3. Inventory
Inventory is comprised of the following:
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
-------------- ---------------
<S> <C> <C>
Raw materials $ 3,514,858 $ 2,252,841
Work in process 767,023 614,069
Finished goods 35,217 59,291
-------------- ---------------
4,317,098 2,926,201
Obsolescence reserve (374,427) (279,059)
============== ===============
$ 3,942,671 $ 2,647,142
============== ===============
</TABLE>
4. Income taxes
Income tax expense consists primarily of state taxes on the income generated
by the Company's EcoSys subsidiary. The Company has adequate loss
carryforwards and research and development tax credit carryforwards to offset
any United States federal income tax liability for the periods presented.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Overview
ATMI was founded in 1986 and has generated revenues from both product
sales and contract research. Product sales have been derived from the sale
of point-of-use environmental equipment and specialty materials and delivery
systems for the semiconductor industry, as well as royalties from the sale of
certain products by third parties. A significant portion of the Company's
revenues has been derived from contracts with United States government
agencies. The programs in which ATMI participates may extend for several
years, but are normally funded on an annual basis. There can be no assurance
that the government will continue its commitment to programs to which ATMI's
development projects are applicable or that the Company can compete
successfully to obtain funding available pursuant to such programs.
During 1995, ATMI acquired the Guardian Systems product line of thermal
destruction units used in the point-of-use treatment of effluent in the
semiconductor industry from Messer Griesheim Industries, Inc. This
acquisition has broadened the product offerings and increased the business of
the Company's EcoSys unit. In addition, the Company made several smaller
acquisitions and investments to further expand its product mix and
technology.
ATMI has experienced substantial growth in revenues over the past
several years, particularly in product sales. This was due in part to
significant growth in the semiconductor industry over that period. Recent
indicators have served to create a widely-held opinion that the
semiconductor industry and, in particular the semiconductor equipment
industry, will endure a period of slowed growth or perhaps contraction over
the next six to eighteen months. This industry condition could have an
adverse impact on ATMI, most notably within its EcoSys subsidiary. However,
continued growth in other ATMI business units could help to offset the
effects of such trends. Commercial backlog at the end of the second quarter
of 1996 was approximately $6.8 million, compared with a backlog of $2.9
million at the end of the second quarter of 1995.
The following table sets forth, for the periods indicated, the
percentage relationship to total revenues of certain items in ATMI's
Consolidated Statement of Operations:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Product revenues 82.1% 70.3% 79.1% 68.2%
Contract revenues 17.9 29.7 20.9 31.8
Total revenues 100.0 100.0 100.0 100.0
Cost of revenues 50.5 56.8 51.4 57.6
Gross profit 49.5 43.2 48.6 42.4
Operating expenses:
Research and development 17.7 11.6 18.0 13.2
Selling, general, and administrative 27.0 28.8 26.4 29.4
Total operating expenses 44.7 40.4 44.4 42.6
Operating income (loss) 4.8 2.8 4.2 (0.2)
Other income,net 1.1 0.5 1.3 1.2
Income before taxes 5.9 3.3 5.5 1.0
Income taxes 0.7 1.0 0.5 1.0
Net income 5.2% 2.3% 5.0% 0.0%
</TABLE>
The following tables set forth revenues, cost of revenues, and gross
profit for products and contracts, as a percentage of each category:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Products:
Revenues 100.0% 100.0% 100.0% 100.0%
Cost of revenues 42.9 45.1 42.9 45.0
Gross profit 57.1% 54.9% 57.1% 55.0%
Contracts:
Revenues 100.0% 100.0% 100.0% 100.0%
Cost of revenues 85.7 84.7 83.7 84.6
Gross profit 14.3% 15.3% 16.3% 15.4%
</TABLE>
Results of Operations
Three Months Ended June 30, 1996 and 1995.
Revenues. Total revenues increased 72% to approximately $12,376,000 in
the three months ended June 30, 1996 from approximately $7,185,000 in the
same three month period in 1995. Product revenues increased 101% to
approximately $10,164,000 in the three months ended June 30, 1996 from
approximately $5,049,000 in the comparable period in 1995. The increases in
product revenues resulted primarily from continued growth in sales of both
effluent treatment systems by EcoSys and delivery systems and materials by
NovaMOS as well as growth in royalty revenues from various third parties.
Contract revenues increased 4% to approximately $2,212,000 in the quarter
ended June 30, 1996 from approximately $2,136,000 in the same three month
period in 1995.
Gross Profit. Gross profit increased 97% to approximately $6,122,000 in
the quarter ended June 30, 1996 from approximately $3,102,000 in the quarter
ended June 30, 1995. Gross margin increased to 49% of revenues in the three
month period in 1996 compared with 43% for the same period in 1995. Gross
profit from product revenue increased 109% to approximately $5,806,000 in the
quarter ended June 30, 1996 from approximately $2,774,000 in the quarter
ended June 30, 1995. As a percentage of product revenues, gross margin
increased to 57% in 1996 from 55% in 1995. The increase in 1996 resulted
primarily from improved margins within the NovaMOS product lines and the
proportional increase in royalty revenue to 8% of product revenues in 1996
from 3% in 1995.
Gross profit on contract revenues decreased 4% to approximately
$316,000 in the quarter ended June 30, 1996 from approximately $328,000 in
the same quarter last year. As a percentage of contract revenues, gross
margin decreased to 14% in the 1996 quarter from 15% in the 1995 quarter.
The decrease reflects an increase in the proportion of contract revenues
generated from negotiated contracts with reduced profit and fee
arrangements.
Research and Development Expenses. Research and development expenses
increased 163% to approximately $2,185,000 in the second quarter of 1996 from
approximately $832,000 in the second quarter of 1995. The increase in the
1996 quarter was principally due to a significant increase in new product
development activity within EcoSys and technology development and
intellectual property protection activity within NovaMOS. As a percentage of
revenues, research and development expenses increased to 18% in the 1996
quarter from 12% in the 1995 quarter.
Selling, General, and Administrative Expenses. Selling, general, and
administrative expenses increased 62% to approximately $3,344,000 in the
three months ended June 30, 1996 from approximately $2,067,000 in the same
three month period in 1995. The increase in the 1996 quarter was primarily
due to an increase in variable selling expenses, most notably commissions,
which directly relate to increased product revenue. In addition,
administrative expenses continue to increase in line with the continued
overall growth of the Company. As a percentage of revenues, these expenses
decreased to 27% of revenue in the second quarter of 1996 compared to 29% in
the second quarter of 1995.
Other Income, Net. Other income increased 245% to approximately
$131,000 in the quarter ended June 30, 1996 from approximately $38,000 in the
quarter ended June 30, 1995. The increase in the 1996 quarter related to
interest earned on the Company's increased cash balances as a result of its
October 1995 follow-on public offering. This was partially offset by an
increase in interest expense on larger debt balances in 1996.
Earning per Share. Earnings per share improved to $.07 for the second
quarter of 1996 compared with a $.02 earnings per share in the second quarter
of 1995. The 1996 earnings per share reflects the 22% increase in weighted
average shares outstanding from approximately 7,696,000 in the second quarter
of 1995 to approximately 9,413,000 in the second quarter of 1996. The share
increase is primarily due to the October 1995 public offering of 1,600,000
shares of the Company's stock.
Six Months Ended June 30, 1996 and 1995.
Revenues. Total revenues increased 69% to approximately $22,438,000 in
the six months ended June 30, 1996 from approximately $13,251,000 in the same
period in 1995. Product revenues increased 96% to approximately $17,744,000
in the six months ended June 30, 1996 from approximately $9,040,000 in the
comparable period in 1995. This increase resulted from growth in sales of
EcoSys product lines including the recently acquired Guardian products,
increased market acceptance of the NovaMOS delivery systems and materials and
well as increased royalty revenue. Contract revenues increased 11% to
approximately $4,695,000 in the six months ended June 30, 1996 from
approximately $4,211,000 in the same period in 1995. The growth in 1996 was
from a general increase in the government funding of the Company's contract
research activities.
Gross Profit. Gross profit increased 94% to approximately $10,902,000
in the six months ended June 30, 1996 from approximately $5,622,000 in the
six months ended June 30, 1995. Gross margin increased to 49% of revenues in
the first half of 1996 from 42% of revenues in the first half of 1995. As a
percentage of product revenues, gross margin increased to 57% in the 1996
period from 55% in the 1995 period primarily due to product mix and the
proportional increase in royalty revenue to 8% of product revenues in 1996
from 3% in 1995. As a percentage of contract revenues, gross margin
increased slightly to 16% in the first six months of 1996 from 15% in the
first six months of 1995.
Research and Development Expenses. Research and development expenses
increased 132% to approximately $4,048,000 in the first six months of 1996
from approximately $1,748,000 in the first six months of 1995. The increase
in 1996 resulted primarily from the increase in product development within
EcoSys, and added research activities pertaining to the recently acquired
Guardian and Epitronics businesses. Additionally, ATMI has and will continue
to invest in the protection of its intellectual property. As a percentage of
revenues, research and development expenses increased to 18% in the first
half of 1996 from 13% in the first half of 1995.
Selling, General, and Administrative Expenses. Selling, general, and
administrative expenses increased 52% to approximately $5,920,000 in the six
months ended June 30, 1996 from approximately $3,893,000 in the same period
in 1995. The increase in 1996 related primarily to selling costs directly
linked to increased product shipments, increases in marketing and sales staff
and increased administrative expenses related to the newly acquired
businesses. As a percentage of revenues, these expenses decreased to 26% in
the first half of 1996 from 29% in the comparable period in 1995.
Other Income, Net. Other income increased 88% to approximately $287,000
in the six months ended June 30, 1996 from approximately $153,000 in the six
months ended June 30, 1995. The increase in the 1996 period is a direct
result of increased cash balances derived from the follow on public offering
in October 1995, partially offset by higher interest expense due to increases
in debt balances.
Earning per Share. Earnings per share improved to $.12 for the first
half of 1996 compared with a $.00 earnings per share in the first half of
1995. The 1996 earnings per share reflects the 22% increase in weighted
average shares outstanding from approximately 7,647,000 in the first half of
1995 to approximately 9,364,000 in the first half of 1996. The share
increase is primarily due to the October 1995 public offering of 1,600,000
shares of the Company's stock.
Liquidity and Capital Resources
For the six months ended June 30, 1996, operations generated cash of
approximately $2,029,000 compared to the use of approximately $593,000 for
the comparable 1995 period. A substantial increase in net income to
approximately $1,110,000 in 1996 compared to $8,000 in 1995 is the principle
cause for the increase in cash generation from operations. Increases in
non-cash expenses, such as depreciation, and fluctuations in working capital
further enhanced the cash provided by operations in the first six months of
1996.
For the six month period ended June 30, 1996, investing activities
generated approximately $2,299,000 in cash compared with the use of
approximately $886,000 in the six months ended June 30, 1995. Investing
activities in the 1996 period generated cash through the sale of
approximately $4,821,000 in marketable securities, offset by capital
expenditures of approximately $2,523,000. These capital expenditures related
primarily to expansion of manufacturing and laboratory capacity in the
Company's Danbury facility. In the 1995 period, the Company incurred
approximately $1,540,000 in capital expenditures, primarily leasehold
improvements, and sold approximately $1,955,000 of marketable securities.
Additionally, in 1995 ATMI made a long term investment of $1,000,000 in
Candescent Technologies Corporation, formerly known as Silicon Video
Corporation.
The Company used approximately $3,606,000 of cash in financing
activities during the six months ended June 30, 1996 compared with the
generation of approximately $1,649,000 for the same period in 1995. Debt
payments of approximately $4,366,000 during the 1996 period included a the
repayment of a $4 million promissory note relating to the acquisition of the
Guardian Systems product line. The Company incurred new debt of
approximately $727,000 in the first six months of 1996 including $500,000
from an agency of the State of Connecticut and advances under the Company's
equipment line of credit. For the same period in 1995, the Company received
a $1.3 million loan from an agency of the State of Connecticut and
approximately $724,000 in advances under the Company's equipment line of
credit, partially offset by approximately $420,000 in payments on all notes
payable.
ATMI believes the combination of existing cash balances, marketable
securities, existing sources of liquidity and anticipated funds from
operations, will satisfy its projected working capital and other cash
requirements through at least the end of 1997. However, ATMI believes the
level of financing resources available to it is an important competitive
factor in its industry and may seek additional capital prior to the end of
that period. Additionally, ATMI considers, on a continuing basis, potential
acquisitions of technologies and businesses complementary to its current
business. There are no present understandings, commitments or agreements
with respect to any such acquisition. However, any such transaction may
affect ATMI's future capital needs.
Safe Harbor Statement
Statements which are not historical facts in this report are forward
looking statements, made on a good faith basis. Such forward looking
statements, including those concerning the Company's expectations for demand
and sales of new and existing products, semiconductor industry and market
segment growth, and market and technology opportunities, all involve risk and
uncertainties. Actual results may differ materially from forward looking
statements, for reasons including, but not limited to, changes in the pattern
of semiconductor industry growth or the markets the Company sells products
for, customer interest in the Company's products, product and market
competition, delays or problems in the development and commercialization of
the Company's products, or technological change affecting the Company's core
thin film competencies.
PART II- OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
The Annual Meeting of Stockholders of the Company was held on May 22,
1996. At the Annual Meeting, the stockholders elected the Board of Directors
consisting of the following persons: Dr. Eugene G. Banucci, Dr. Duncan W.
Brown, Mr. Mark A. Adley, Mr. Robert S. Hillas, Dr. John A. Armstrong, Mr.
Gary A. Andersen, and Mr. Stephen H. Mahle. Mr. Adley, Dr. Banucci, and Mr.
Hillas each received 7,752,095 votes for and 52,759 against. Dr. Brown
received 7,751,995 votes for and 52,859 against. Mr. Andersen and Dr.
Armstrong each received 7,751,695 votes for and 53,159 against, and Mr. Mahle
received 7,748,995 for and 55,859 against. The stockholders also ratified
the appointment by the Board of Directors of Ernst & Young, LLP as the
Company's independent auditors for the fiscal year ending December 31, 1996.
There were 7,744,094 votes for, 6,650 votes against and 19,110 abstentions as
to such ratification.
Item 6. Exhibits and Reports on Form 8-K.
a. Exhibits.
11.01 Statement re: computation of per share earnings (Filed herewith)
27.01 Financial Data Schedule (Filed herewith)
b. Reports on Form 8-K.
No reports on Form 8-K were filed during the quarter ended June 30, 1996.
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.
Advanced Technology Materials, Inc.
August 8, 1996
By /S/ Eugene G. Banucci
-------------------------
Eugene G. Banucci, Ph.D.,
President, Chief Executive
Officer, Chairman of the Board
and Director
By /S/ Daniel P. Sharkey
-------------------------
Daniel P. Sharkey, Vice President,
Chief Financial Officer and
Treasurer (Chief Accounting Officer)
EXHIBIT 11.01
ADVANCED TECHNOLOGY MATERIALS, INC.
COMPUTATION OF EARNINGS PER COMMON SHARE
<TABLE>
<CAPTION>
Quarter Quarter
Ended Ended
6/30/96 6/30/95
<S> <C> <C>
Net income $ 640,448 $ 166,214
=========== ===========
Average common shares outstanding 8,731,572 7,155,723
Incremental shares issuable pursuant to
employee stock options and warrants (if
dilutive) 681,490 539,959
=========== ===========
Total shares 9,413,062 7,695,682
=========== ===========
Net income per share $ 0.07 $ 0.02
=========== ===========
</TABLE>
<TABLE>
<CAPTION>
Six Months Six Months
Ended Ended
6/30/96 6/30/95
<S> <C> <C>
Net income $ 1,109,894 $ 8,510
=========== ===========
Average common shares outstanding 8,726,818 7,125,396
Incremental shares issuable pursuant to
employee stock options and warrants (if
dilutive) 637,484 522,098
=========== ===========
Total shares 9,364,302 7,647,494
=========== ===========
Net income per share $ 0.12 $ 0.00
=========== ===========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-END> Jun-30-1996
<CASH> 4330
<SECURITIES> 17034
<RECEIVABLES> 9501<F1>
<ALLOWANCES> 0
<INVENTORY> 3943
<CURRENT-ASSETS> 35291
<PP&E> 7295<F2>
<DEPRECIATION> 0
<TOTAL-ASSETS> 48954
<CURRENT-LIABILITIES> 9233
<BONDS> 0
0
0
<COMMON> 87
<OTHER-SE> 33953
<TOTAL-LIABILITY-AND-EQUITY> 48954
<SALES> 10164
<TOTAL-REVENUES> 12376
<CGS> 4358
<TOTAL-COSTS> 6254
<OTHER-EXPENSES> 2185<F3>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 140
<INCOME-PRETAX> 724
<INCOME-TAX> 83
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 640
<EPS-PRIMARY> .07
<EPS-DILUTED> .07
<FN>
<F1>Net of allowance for doubtful accounts, consistent with balance sheet
presentation.
<F2>Net of accumulated depreciation, consistent with balance sheet
presentation.
<F3>Research and development expenses
</FN>
</TABLE>
