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 March 31, 1996
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 NO. 0-22780
FEI COMPANY
(Exact name of registrant as specified in its charter)
OREGON 93-0621989
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
7451 NE EVERGREEN PARKWAY
HILLSBORO, OREGON 97124-5830
(Address of principal executive offices) (Zip Code)
(503) 640-7500
(Registrant's telephone number, including area code)
Not applicable
(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: 7,773,370 shares of
Common Stock were outstanding at May 10, 1996.
<PAGE>
INDEX TO FORM 10-Q
Page
----
Part I - Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets - March 31, 1996 (unaudited) and
December 31, 1995.................................................. 1
Consolidated Statements of Operations - Three Months Ended
March 31, 1996 and March 31, 1995 (unaudited)...................... 2
Consolidated Statements of Changes in Shareholders'
Equity - Three Months Ended March 31, 1996 (unaudited)
and Year Ended December 31, 1995 .................................. 3
Consolidated Statements of Cash Flows - Three Months ended
March 31, 1996 (unaudited) and March 31, 1995 (unaudited).......... 4
Notes to Consolidated Financial Statements (unaudited)............. 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations................................ 7
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K................................ 9
Signatures...................................................................10
<PAGE>
FEI COMPANY AND SUBSIDIARIES
<TABLE>
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT SHARE DATA)
<CAPTION>
ASSETS
DECEMBER 31, MARCH 31,
1995 1996
---- ----
(UNAUDITED)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents (Note 3) $ 2,700 $ 3,137
Short-term investments (Note 4) 4,961 3,750
Receivables (Note 5) 13,769 15,550
Tax refund receivable 36 36
Inventories (Note 6) 10,425 12,259
Prepaid expenses 159 185
Deferred income taxes 626 763
------- -------
Total current assets 32,676 35,680
INVESTMENTS (Note 4) 2,540 2,507
EQUIPMENT 4,604 4,749
LEASE RECEIVABLES 2,663 2,457
OTHER ASSETS 2,159 2,353
------- -------
TOTAL $44,642 $47,746
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 2,597 $ 4,739
Accrued payroll liabilities 606 719
Accrued warranty reserves 892 1,133
Deferred revenue 434 497
Income taxes payable 870 655
Other current liabilities 871 910
------- -------
Total current liabilities 6,270 8,653
COMMITMENTS AND CONTINGENCIES -- --
LONG-TERM DEBT (Note 8) 3,500 --
DEFERRED INCOME TAXES 450 415
SHAREHOLDERS' EQUITY: (Note 7)
Preferred stock - 500,000 shares authorized;
none issued and outstanding -- --
Common stock - 15,000,000 shares authorized;
7,222,394 and 7,701,925 shares issued and outstanding 27,150 30,746
Warrants - 200,001 issued and outstanding 59 59
Retained earnings 7,099 7,844
Unrealized gain on marketable securities 96 17
Cumulative foreign currency translation adjustment 18 12
------- -------
Total shareholders' equity 34,422 38,678
------- -------
TOTAL $44,642 $47,746
======= =======
See notes to consolidated financial statements.
</TABLE>
1
<PAGE>
FEI COMPANY AND SUBSIDIARIES
<TABLE>
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands except share and per share data)
(Unaudited)
<CAPTION>
Three Months Ended
March 31,
-------------------------
1995 1996
--------- ---------
<S> <C> <C>
NET SALES $ 8,920 $ 11,607
COST OF SALES 5,277 7,234
--------- ---------
Gross profit 3,643 4,373
OPERATING EXPENSES:
Research and development 595 898
Selling and marketing 994 1,412
General and administrative 617 1,000
--------- ---------
Total operating expenses 2,206 3,310
OPERATING INCOME 1,437 1,063
OTHER INCOME (EXPENSE):
Foreign currency loss (374) (21)
Interest income 88 195
Interest expense (240) (62)
Other (27) (6)
--------- ---------
Total other income (expense) (553) 106
INCOME BEFORE TAXES 884 1,169
TAX EXPENSE 359 424
--------- ---------
NET INCOME $ 525 $ 745
========= =========
NET INCOME PER SHARE $ 0.10 $ 0.10
========= =========
WEIGHTED AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING 5,120,447 7,831,332
========= =========
See notes to consolidated financial statements.
</TABLE>
2
<PAGE>
FEI COMPANY AND SUBSIDIARIES
<TABLE>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(IN THOUSANDS EXCEPT SHARE DATA)
<CAPTION>
Cumulative
Unrealized Foreign
Common Stock Warrants Gain on Currency
----------------- ----------------- Retained Marketable Translation
Shares Amount Shares Amount Earnings Securities Adjustment Total
------ ------ ------ ------ -------- ---------- ---------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE, December 31, 1994 4,363,705 $ 5,549 400,001 $ 119 $ 3,358 $ -- $ 21 $ 9,047
Net income 3,741 3,741
Proceeds from exercise of
options for 210,539 shares of
common stock 210,539 393 393
Proceeds from sale of 2,500,000
shares of common stock, less
$2,602 costs of issuance 2,500,000 21,148 21,148
Exercise of 200,000 warrants
into 148,150 shares of common
stock 148,150 60 (200,000) (60) 0
Unrealized gain on marketable
securities 96 96
Foreign currency translation
adjustment (3) (3)
-------------------------------------------------------------------------------------------
BALANCE, December 31, 1995 7,222,394 27,150 200,001 59 7,099 96 18 34,422
Net income (unaudited) 745 745
Proceeds from exercise of
options for 12,864 shares of
common stock (unaudited) 12,864 96 96
Exercise of convertible options for
466,667 shares of common
stock (unaudited) 466,667 3,500 3,500
Unrealized loss on marketable
securities (unaudited) (79) (79)
Foreign currency translation
adjustment (unaudited) (6) (6)
-------------------------------------------------------------------------------------------
BALANCE, March 31, 1996
(unaudited) 7,701,925 $30,746 200,001 $ 59 $ 7,844 $17 $12 $38,678
===========================================================================================
See notes to consolidated financial statements.
</TABLE>
3
<PAGE>
FEI COMPANY AND SUBSIDIARIES
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOW
(IN THOUSANDS)
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------
1995 1996
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 525 $ 745
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 330 361
Deferred taxes on income 164 (172)
Decrease (increase) in assets:
Receivables (576) (1,781)
Inventories (720) (1,820)
Prepaid expenses and tax refund receivable (54) (26)
Other assets -- (35)
Increase (decrease) in liabilities:
Accounts payable 1,784 2,142
Accrued payroll liabilities 95 113
Accrued warranty reserves (49) 241
Deferred revenue 167 63
Income taxes payable 159 (215)
Other current liabilities 236 39
------- -------
Net cash provided by (used in) operating activities 2,061 (345)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of equipment (69) (472)
Investment in software development (28) (207)
Decrease (increase) in investments -- 1,165
(Investment in) reduction of lease receivables (725) 206
Net disposals of equipment 25 --
------- -------
Net cash used in investing activities (797) 692
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from (payments on) line of credit
and notes payable (1,926) --
Proceeds from exercise of stock options and warrants 6 96
Proceeds from issuance of long term debt 1,000 --
Payments on long term debt (Note 8) (109) --
------- -------
Net cash provided by financing activities (1,029) 96
FOREIGN CURRENCY TRANSLATION ADJUSTMENT 25 (6)
------- -------
NET INCREASE IN CASH AND CASH EQUIVALENTS 260 437
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 192 2,700
------- -------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 452 $ 3,137
======= =======
SUPPLEMENTAL SCHEDULE OF CASH FLOW
INFORMATION
Cash paid during the period for:
Interest $ 180 $ 62
Income taxes paid -- 810
Income tax refunds received -- --
NONCASH INVESTING AND FINANCING ACTIVITIES:
Conversion of long-term debt into 466,667
shares of the Company's common stock $ -- $ 3,500
See notes to consolidated financial statements.
</TABLE>
4
<PAGE>
FEI COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. NATURE OF BUSINESS
FEI Company and its wholly owned subsidiaries (the "Company") design,
manufacture and market focused ion beam ("FIB") workstations and components
based on field emission technology. The Company sells its FIB workstations
principally to integrated circuit manufacturers and sells components to
manufacturers of electron microscopes and other devices incorporating field
emission technology.
2. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and Article 2 of
Regulation S-X. Accordingly, they 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 fair
presentation have been included. The accompanying consolidated financial
statements should be read in conjunction with the consolidated financial
statements and footnotes thereto included in the Company's annual report on
Form 10-K for the year ended December 31, 1995.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amount of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amount of revenues and expenses during the reported period.
Actual results could differ from estimates.
3. CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of the following (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1995 1996
------- -------
<S> <C> <C>
Cash $ 590 $ 417
Money market investments 2,110 2,720
------- -------
Total cash and cash equivalents $ 2,700 $ 3,137
======= =======
</TABLE>
4. INVESTMENTS
Investments, classified as available for sale, consist of the following (in
thousands):
<TABLE>
<CAPTION>
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
<S> <C> <C> <C> <C>
DECEMBER 31, 1995
-----------------
Debt securities issued by the United
States Treasury and other US government
corporations and agencies $ 1,908 $ 24 $ -- $1,932
Debt securities issued by states of the
United States and political subdivisions
thereof 3,508 56 -- 3,564
Corporate obligations 989 1 -- 990
Preferred stock 1,000 15 -- 1,015
-------- -------- -------- ------
Total $ 7,405 $ 96 $ -- $7,501
======== ======== ======== ======
MARCH 31, 1996
--------------
Debt securities issued by the United
States Treasury and other US government
corporations and agencies $ 1,914 $ 7 $ -- $1,921
Debt securities issued by states of the
United States and political subdivisions
thereof 2,826 5 -- 2,831
Corporate obligations 500 -- -- 500
Preferred stock 1,000 5 -- 1,005
-------- -------- -------- ------
Total $ 6,240 $ 17 $ -- $6,257
======== ======== ======== ======
</TABLE>
These investments have been reported as follows:
<TABLE>
<CAPTION>
December 31, December 31,
1995 1996
-------- --------
<S> <C> <C>
Current assets - investments $ 4,961 $ 3,750
Noncurrent assets - investments 2,540 2,507
-------- --------
Total $ 7,501 $ 6,257
</TABLE>
5
<PAGE>
FEI COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
5. RECEIVABLES
Receivables consist of the following (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1995 1996
---- ----
<S> <C> <C>
Trade $12,000 $13,922
Foreign tax deposit and other 587 321
Current portion of lease receivable 1,277 1,404
------- -------
Subtotal 13,864 15,647
Allowance for doubtful accounts (95) (97)
------- -------
Total receivables $13,769 $15,550
======= =======
</TABLE>
6. INVENTORIES
Inventories consist of the following (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1995 1996
---- ----
<S> <C> <C>
Raw materials and assembled parts $ 7,011 $ 6,989
Work in process 1,866 3,211
Finished goods 1,626 2,148
------- -------
Subtotal 10,503 12,348
Inventory reserves (78) (89)
------- -------
Total inventories $10,425 $12,259
======= =======
</TABLE>
7. STOCK SALE
On June 1, 1995 the Company completed its initial public offering ("IPO")
by issuing 2,500,000 shares of common stock at $9.50 per share, and
proceeds, net of underwriters commissions and other expenses, amounted to
$21,148,000. Approximately $6,165,000 of the proceeds were used to pay off
the line of credit and lease finance line with the bank.
8. LONG-TERM DEBT
On March 1, 1996 the Company's $3,500,000 note payable to a non-bank lender
was converted into 466,667 shares of common stock.
If the conversion right had been exercised on January 1, 1996, net income
for the three months ended March 31, 1996 would have increased approximately
$40,000, resulting in net income of $785,000, or $0.10 per share.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
The Company's revenues are derived primarily from sales of FIB
workstations and, to a lesser extent, from the sale of emitters, focusing
columns and services. FIB workstations can be purchased with various
options, including gas injectors, a secondary ion mass spectrometry
("SIMS") analytical function, x-ray analysis equipment and computer aided
design ("CAD") navigational software.
From time to time the Company may issue forward-looking statements
that involve a number of risks and uncertainties. The following are among
the factors that could cause actual results to differ materially from the
forward-looking statements: business conditions and growth in the
electronics industry and general economies, both domestic and
international; lower than expected customer orders; competitive factors,
including increased competition, new product offerings by competitors and
price pressures; the availability of parts and supplies at reasonable
prices; changes in product mix; receipt of a significant portion of
customer orders and product shipments in the last month of each quarter;
technological difficulties and resource constraints encountered in
developing new products; and product shipment interruptions due to
manufacturing difficulties. The forward-looking statements contained in
this document regarding industry trends, product development and
introductions, sales, marketing and manufacturing trends, litigation,
liquidity and future business activities should be considered in light of
these factors.
RESULTS OF OPERATIONS
Net Sales. Net sales for the three months ended March 31, 1996 increased
$2.7 million (30.1%) compared to the corresponding period in 1995. The
majority of this increase in sales can be attributed to increased sales of
FIB workstations, which rose by $1.6 million for the three months ended
March 31, 1996. These increases in FIB workstation sales were a result of
the rapid growth of, and the strong demand created by, integrated circuit
manufacturers, which are the primary users of these workstations.
Gross Profit. Gross profit for the three months ended March 31, 1996
increased $730,000 (20.0%) compared to the corresponding period in 1995.
This increase was primarily due to increased sales. Gross profit as a
percentage of sales for the three months ended March 31, 1996 decreased to
38% from 41% for the corresponding period in 1995. This decrease resulted
primarily from increased sales of third-party add-on options with
comparatively lower gross margins. The Company purchases a substantial
number of components for its FIB workstations from Philips Electron Optics
B.V. ("Philips"), the purchase prices for which are denominated in Dutch
guilders. The prices of those components are agreed to by the Company and
Philips annually. An increase in the value of the Dutch guilder in relation
to the U.S. dollar would effectively increase the cost to the Company of
those components and adversely affect the Company's cost of sales.
Research and Development. For the three months ended March 31, 1996,
research and development expense increased $303,000 (50.9%) compared to the
corresponding period in 1995. This increase was primarily attributable to
increased engineer staffing levels and consultant costs related to software
and hardware development projects. Capitalized software development costs
were $207,000 and $28,000 for the three months ended March 31, 1996 and
1995, respectively. The Company is continuing to invest in internal
development of focused ion and electron beam technology.
Selling and Marketing. Selling and marketing expense for the three months
ended March 31, 1996 increased $418,000 (42.1%) compared to the
corresponding period in 1995. Selling and marketing expense as a percentage
of sales for the three months ended March 31, 1996 increased to 12% from
11% for the corresponding period in 1995. These increases reflect the
greater amount of sales commissions paid in connection with increased sales
in Asia, increased sales, technical marketing and support staffing levels.
General and Administrative. General and administrative expense for the
three months ended March 31, 1996 increased $383,000 (62.1%) compared to
the corresponding period in 1995. This increase was primarily due to the
hiring of additional administrative staff and increased professional fees.
Other Income (Expense). Other income (expense) was $106,000 and $(553,000)
for the three months ended March 31, 1996 and 1995, respectively. Included
in other income (expense) for these respective periods were (i) foreign
currency exchange rate loss of $(21,000) and $(374,000), (ii) interest
income of $195,000 and
7
<PAGE>
$88,000, (iii) interest expense of $(62,000) and $(240,000) and (iv)
miscellaneous expense of $(6,000) and $(27,000). The change between periods
was driven by relatively constant exchange rates for the three months ended
March 31, 1996 compared to the three months ended March 31, 1995, and the
repayment of debt with and the investment of proceeds of the Company's
initial public offering. See Note 7 to the Company's consolidated financial
statements.
Tax Expense (Benefit). The effective income tax rate was 36% for the three
months ended March 31, 1996 compared to an effective rate of 41% for the
three months ended March 31, 1995. These rates vary from the Company's
federal statutory tax rate of 34% primarily due to the addition of state
and foreign sales corporation taxes and the reduction of foreign sales
corporation dividends, research and development credits and various
treatments of international transactions and related taxes. The decrease in
the effective tax rates for the 1996 period from the corresponding period
in 1995 is primarily due to additional foreign sales corporation exclusions
during the 1996 period.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1996, the Company had total cash and cash equivalents of $3.1
million compared to $2.7 million at December 31, 1995. Cash used in
operations for the three months ended March 31, 1996 was $345,000 compared
to cash provided by operations of $2.1 million for the three months ended
March 31, 1995.
Investing activities provided $692,000 in the three months ended March 31,
1996 and consumed $797,000 in the three months ended March 31, 1995.
Capital expenditures increased from 1995 levels primarily due to the
purchase of research and development equipment.
Financing activities provided $96,000 for the three months ended March 31,
1996 and consumed $1.0 million for the corresponding period in 1995. Net
cash provided by financing activities increased from the 1995 period due
primarily to the availability of additional investment capital received as
net proceeds of the Company's May 1995 initial public offering.
Other sources of liquidity include an unused bank line of credit at March
31, 1996 of $5 million. The Company believes it has the financial resources
needed to meet business requirements in the foreseeable future, including
capital expenditures and operating expenses.
8
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In May 1995 Micrion Corporation ("Micrion"), a principal
competitor of the Company, filed a lawsuit against the Company in the
United States District Court for the District of Massachusetts (the
"Court") alleging infringement of a patent issued to Micrion relating to
the use of an electron beam to neutralize a positive charge that can
develop with the use of an ion beam in a FIB workstation. The complaint
also alleges that the Company used information confidential to Micrion to
develop devices to effect charge neutralization, to incorporate such
devices into the Company's FIB workstations, to manufacture certain ion
emitters, and to persuade prospective purchasers of FIB workstations to
purchase workstations from the Company rather than from Micrion. Micrion
seeks an injunction against infringement of the Micrion patent, damages of
at least $1 million for misuse of confidential information, treble damages
for infringement of the Micrion patent, attorneys' fees and other damages.
The Company believes it has valid defenses to Micrion's claims.
The Company initiated a proceeding with the American Arbitration
Association seeking to arbitrate Micrion's non-patent claims. In response
to motions filed by the Company in the Court and the United States District
Court for the District of Oregon, Micrion was ordered to arbitrate these
matters in Oregon, and the Court action has been stayed with respect to
these matters. The Company has filed an Answer and Counterclaim in the
Court, asserting that the patent is not infringed and is invalid. In May
1996, the parties agreed to dismiss the Court action and the arbitration,
both without prejudice. Either Micrion or the Company may re-initiate
either the Court action or the arbitration on or after November 1, 1996.
Although the Company believes it has valid defenses to Micrion's claims, a
determination that the Micrion patent is valid and infringed or that the
Company has misused confidential information could result in an award of
damages to Micrion or an injunction against sale of certain of the
Company's products, which could have a material adverse effect upon the
Company's financial condition and results of operations. Regardless of its
outcome, the litigation could result in substantial costs and diversion of
management and other resources.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
11 Statement of Computation of Per Share Earnings
27 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the period for which
this report is filed.
9
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act
of 1934, the registrant caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
FEI COMPANY
(Registrant)
Dated: May 14, 1996 WILLIAM G. LANGLEY
-----------------------------------
William G. Langley
President, Chief Financial Officer
and Authorized Officer
10
<PAGE>
Exhibit Index
Exhibit Sequential Page
No. Description No.
- - ------- ----------- ---------------
11 Statement of Computation of Per Share Earnings
27 Financial Data Schedule
SCHEDULE OF COMPUTATION OF EARNINGS PER SHARE
(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
(UNAUDITED)
WEIGHTED AVERAGE NUMBERS OF SHARES
The weighted average number of shares of common stock and common stock
equivalents, after adjusting for the two-for-three reverse split, was
determined as follows:
Outstanding options for common stock and convertible warrants and options
have been included in the calculation of common and common equivalent
shares using the treasury stock method based on an assumed initial public
offering price of $9.50 per share as the market price for the three months
ended March 31, 1995, and an average market price of $11.23 per share for
the three months ended March 31, 1996.
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------------
1995 1996
---- ----
<S> <C> <C>
Common stock:
Shares outstanding, beginning of period 4,363,704 7,222,394
Shares issued on exercise of options (1) 593 4,153
Shares issued on conversion of options from
debt agreement (5) -- 153,846
SEC SAB 83 shares (2) 270,246 198,286
---------- ----------
4,634,543 7,578,679
---------- ----------
Common stock equivalents:
Warrants (3) 273,684 146,562
Options (4) 212,221 106,091
---------- ----------
485,905 252,653
---------- ----------
Weighted average number of shares 5,120,448 7,831,332
========== ==========
Net income (loss) $ 525 $ 745
========== ==========
Net income (loss) per share $ 0.10 $ 0.10
========== ==========
- - ---------------
<FN>
(1) Weighted average shares from exercise date of options granted under 1984
and 1995 Stock Incentive Plans.
(2) Employee options issued January 1, 1994
to April 21, 1995 105,278 126,911
Less shares reacquired under treasury stock
method 102,445 107,380
---------- ----------
2,833 19,531
Convertible options - debt agreement (5) 266,666 178,755
---------- ----------
Net SAB No. 83 shares 269,499 198,286
========== ==========
(3) Warrants issued September 1, 1988 and October 3, 1988 for 200,000 shares
each, less shares reacquired under treasury stock method.
(4) Options granted on annual basis under plan, less shares reacquired
under treasury stock method.
(5) Convertible options/debt agreements issued prior to January 1, 1994
are excluded from SAB No. 83 shares. Further, such options are
anti-dilutive and, therefore, presentation of fully diluted earnings
per share is not required. Share amounts are weighted average shares
from/to exercise date of option.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S 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-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 3,137
<SECURITIES> 6,257
<RECEIVABLES> 15,647
<ALLOWANCES> 97
<INVENTORY> 12,259
<CURRENT-ASSETS> 35,680
<PP&E> 9,467
<DEPRECIATION> 4,718
<TOTAL-ASSETS> 47,746
<CURRENT-LIABILITIES> 8,653
<BONDS> 0
30,746
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 47,746
<SALES> 10,922
<TOTAL-REVENUES> 11,607
<CGS> 6,455
<TOTAL-COSTS> 7,234
<OTHER-EXPENSES> 3,310
<LOSS-PROVISION> (4)
<INTEREST-EXPENSE> 62
<INCOME-PRETAX> 1,169
<INCOME-TAX> 424
<INCOME-CONTINUING> 745
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 745
<EPS-PRIMARY> 0.10
<EPS-DILUTED> 0.10
</TABLE>
