<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For Quarterly Period Ended September 30, 1997
Commission File Number 0-23282
Natural MicroSystems Corporation
----------------------------------
(Exact name of registrant as specified in its charter)
Delaware 04-2814586
------------------------------------------------------------------------
(State or other jurisdiction of IRS Employer
incorporation or organization) Identification Number)
100 Crossing Boulevard, Framingham, MA 01702
---------------------------------------------------
(Address of principal executive offices) (Zip Code)
(508) 620-9300
---------------------
(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 [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 10,722,182 shares of Common
Stock, $.01 par value, outstanding at October 31, 1997.
The Index to Exhibits appears on Page: 14
Total Number of Pages with Exhibits: 16
<PAGE>
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Page
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<S> <C>
Item 1. Financial Statements and Notes
Condensed Consolidated Balance Sheets 3
Consolidated Statements of Operations 4
Consolidated Statements of Cash Flow 5
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II OTHER INFORMATION
Item 1 - 5
Not applicable
Item 6 Exhibits and Reports on Form 8-K 12
A. Exhibits
No. 11.1 - Statement of Computation of Earnings Per Share
No. 27.1 - Financial Data Schedule
</TABLE>
2
<PAGE>
NATURAL MICROSYSTEMS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(IN $000'S EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
December 31, 1996 September 30, 1997
----------------- ------------------
(Unaudited)
<S> <C> <C>
ASSETS
------
Current assets:
Cash and cash equivalents $ 6,578 $ 8,972
Marketable securities 26,767 24,645
Accounts receivable, net of allowance for uncollectible
accounts of $685 and $672, respectively 13,403 18,801
Inventories 5,419 6,065
Prepaid expenses and other assets 1,357 2,101
Income tax receivable 130 130
Deferred tax asset 306 297
-------- --------
Total current assets 53,960 61,011
-------- --------
Property and equipment, net of accumulated depreciation
of $3,305 and $5,009, respectively 3,908 8,285
License agreements, net of accumulated amortization
of $245 and $780, respectively 1,665 1,442
Other assets 1,708 1,926
Intangible assets 655 548
Deferred tax asset, net of valuation allowance 766 837
-------- --------
Total Assets $ 62,662 $ 74,049
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long term debt 58 125
Accounts payable 5,222 5,444
Accrued expenses and other liabilities 4,153 5,555
-------- --------
Total current liabilities 9,433 11,124
-------- --------
Refundable advance 347 219
Stockholders' equity:
Preferred stock, 3,000,000 shares authorized, none issued
Common stock; $.01 par value; 15,000,000 and 45,000,000
shares authorized at December 31, 1996 and September 30,
1997 respectively, 9,936,414 and 10,562,362 issued and
outstanding at December 31, 1996 and September 30, 1997,
respectively 99 106
Additional paid-in capital 53,604 57,224
Retained earnings (accumulated deficit) (926) 5,508
Other equity 19 19
Foreign currency translation adjustment 86 (151)
-------- --------
Total stockholders' equity 52,882 62,706
-------- --------
Total liabilities and stockholders' equity $ 62,662 $ 74,049
======== ========
</TABLE>
The accompanying notes are an integral part of
these consolidated financial statements
3
<PAGE>
NATURAL MICROSYSTEMS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN $000'S EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
1996 1997 1996 1997
------ ------ ------ ------
<S> <C> <C> <C> <C>
Revenues $ 13,513 $ 20,076 $ 36,066 $ 54,002
Cost of revenues 4,543 6,902 13,258 18,863
-------- -------- -------- --------
Gross profit 8,970 13,174 22,808 35,139
Operating expenses:
Selling, general and administrative 3,940 5,860 10,586 15,610
Research and development 2,876 3,885 7,230 10,759
Purchased in-process research and development -- -- 4,426 --
-------- -------- -------- --------
Total operating expenses 6,816 9,745 22,242 26,369
-------- -------- -------- --------
Operating income 2,154 3,429 566 8,770
Interest income and other 413 357 942 935
Interest expense and other 79 106
-------- -------- -------- --------
Other income, net 334 357 836 935
-------- -------- -------- --------
Income before income taxes 2,488 3,786 1,402 9,705
Income tax expense 817 1,273 1,941 3,271
======== ======== ======== ========
Net income (loss) $ 1,671 $ 2,513 $ (539) $ 6,434
======== ======== ======== ========
Primary:
Net income (loss) per common share $ 0.16 $ 0.23 $ (0.06) $ 0.58
======== ======== ======== ========
Weighted average common shares outstanding 10,508 11,106 9,222 11,019
======== ======== ======== ========
Fully diluted:
Net income (loss) per common share $ 0.16 $ 0.23 $ (0.06) $ 0.58
======== ======== ======== ========
Weighted average common shares outstanding 10,585 11,131 9,222 11,044
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of
these consolidated financial statements
4
<PAGE>
NATURAL MICROSYSTEMS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
(UNAUDITED)
(IN $000'S)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1996 1997
---------------- ----------------
<S> <C> <C>
Cash flow from operating activities:
Net income (loss) $ (539) $ 6,434
Adjustments to reconcile net income (loss) to cash
provided by (used in) operating activities:
Depreciation and amortization 1,137 2,158
Gain on sale of marketable securities (3) --
Purchased in process research & development 4,426 --
Deferred tax asset (71) 4
Changes in assets and liabilities:
Accounts receivable (865) (5,798)
Inventories (1,515) (762)
Prepaid expenses and other assets (1,052) (1,015)
Income tax receivable 29 (218)
Accounts payable (978) 352
Accrued expenses and other liabilities (377) 2,124
-------- --------
Cash provided by (used in) operating activities 192 3,279
-------- --------
Cash flow from investing activities:
Additions to property and equipment (1,771) (6,254)
Purchases of marketable securities (48,723) (22,808)
Proceeds from the sale of marketable securities 19,807 24,871
Purchase of other assets (1,441) (51)
Purchase of PSR Systems, Inc. and TEKnique, Inc.,
net of cash acquired (3,232) --
-------- --------
Cash used in investing activities (35,360) (4,242)
-------- --------
Cash flow from financing activities:
Payments of capital lease obligation (23) --
Payments of long term debt (159) --
Payments of bank line of credit (55) --
Payments of gov't advances (119) --
Payments on refundable advances -- (50)
Proceeds from refundable advance 60 --
Proceeds from issuance of common stock 31,584 3,110
Non-statutory stock options 14 14
-------- --------
Cash provided by financing activities 31,302 3,074
-------- --------
Effect of exchange rate changes on cash (124) 283
Net increase in cash and cash equivalents (3,990) 2,394
Cash and cash equivalents, beginning of period 6,729 6,578
======== ========
Cash and cash equivalents, end of period $ 2,739 $ 8,972
======== ========
</TABLE>
5
<PAGE>
NATURAL MICROSYSTEMS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
(UNAUDITED)
(IN $000'S)
(CONTINUED)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1996 1997
-------------- --------------
<S> <C> <C>
Noncash Transactions:
Issuance of common stock for purchase
of PSR Systems, Inc. and TEKnique,
Inc. $1,766 $500
Accrued acquisition expenses 784
Assets and liabilities recognized
upon acquisition of PSR Systems,
Inc. and TEKnique, Inc.:
Accounts receivable 122
Inventories 136
Other current assets 74
Property and equipment 409
Purchased in process research
and development 4,426
Goodwill 757
Notes payable 55
Accounts payable 264
Accrued expenses and other
liabilities 250
</TABLE>
The accompanying notes are an integral part of
these consolidated financial statements
6
<PAGE>
NATURAL MICROSYSTEMS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The consolidated balance sheet as of September 30, 1997 and December 31, 1996
and the consolidated statements of operations for the three and nine months
ended September 30, 1997 and 1996 and consolidated statements of cash flow for
the nine months ended September 30, 1997 and 1996 include the accounts of
Natural MicroSystems Corporation and its wholly owned subsidiaries (the
"Company").
In the opinion of management, all adjustments (consisting only of normal
recurring accruals) necessary to present fairly the financial position, results
of operations and cash flow for all periods presented have been made. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the dates of the financial statements and
the reported amounts of revenue and expense during the reported periods. Actual
results could differ from those estimates. The operating results for the nine
month period ended September 30, 1997 are not necessarily indicative of the
operating results to be expected for the full fiscal year.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. The financial statements should be read in
conjunction with the consolidated financial statements of the Company as of and
for the year ended December 31, 1996.
B. INVENTORIES ($000)
Inventories consist of the following:
<TABLE>
<CAPTION>
December 31, 1996 September 30, 1997
----------------- ------------------
<S> <C> <C>
Raw materials $1,231 $ 572
Work in process 2,390 3,261
Finished goods 1,798 2,232
------ ------
$5,419 $6,065
====== ======
</TABLE>
C. STOCKHOLDERS' EQUITY ($000):
<TABLE>
<CAPTION>
Common Stock Additional Foreign
------------------ Paid In Retained Other Translation
Shares Amount Capital Earnings Equity Adjustment Total
------------------ ------------ ---------- -------- ------------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1996 9,936 $ 99 $53,604 $ (926) $19 $ 86 $52,882
Exercise of common stock options 578 7 2,526 2,533
Employee Stock Purchase Plan 33 584 584
Contingent stock issue 15 500 500
Grant of non-statutory options 10 10
Net Income for the nine months
ended September 30, 1997 6,434 6,434
Foreign Translation Adjustment (237) (237)
-------------- ------- ------ --- ----- -------
Balance at September 30, 1997 10,562 $106 $57,224 $5,508 $19 ($151) $62,706
============== ======= ====== === ===== =======
</TABLE>
7
<PAGE>
D. NET INCOME PER COMMON SHARE
Fully diluted net income per common share is computed based upon the weighted
average number of common shares and common share equivalents outstanding using
the treasury stock method.
The Financial Accounting Standards Board issued Statement No. 128 "Earnings per
Share", SFAS 128, which modifies the way in which earnings per share (EPS) is
calculated and disclosed. Basic EPS excludes dilution and is computed by
dividing net income available to common stockholders by the weighted-average
number of common shares outstanding for the period. Diluted EPS, similar to
fully diluted EPS, reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised or converted
into common stock or resulted in the issuance of common stock that then shared
in the earnings of the Company. If the Company had adopted SFAS 128 for the
three and nine months ended September 30, 1996 and 1997, basic and diluted EPS
would have been as follows:
For the three month period ended September 30,
<TABLE>
<CAPTION>
1996 1997
--------------------------
<S> <C> <C>
Basic Earnings per Share $0.17 $0.24
Diluted Earnings per Share $0.16 $0.23
</TABLE>
For the nine month period ended September 30,
<TABLE>
<CAPTION>
1996 1997
--------------------------
<S> <C> <C>
Basic Earnings per Share ($0.06) $0.61
Diluted Earnings per Share ($0.06) $0.58
</TABLE>
8
<PAGE>
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results Of Operations
Revenue
Revenue of $20.1 million for the three months ended September 30, 1997,
increased 49% from $13.5 million for the three months ended September 30, 1996.
Revenue of $54.0 million for the nine months ended September 30, 1997, increased
50% from $36.1 million for the nine months ended September 30, 1996. The
increases for both periods of 1997 over 1996 were primarily due to shipment of
greater unit volume of Alliance Generation(R) ("AG") and VOX products and
increased unit volume of manufacturing license revenue.
Revenue of $5.4 million for the three months ended September 30, 1997 from
customers located outside of North America increased 64% from $3.3 million of
revenue for the three months ended September 30, 1996, and represented 27% and
24% of revenue, respectively. Revenue of $15.6 million for the nine months
ended September 30, 1997 increased 39% from $11.2 million for the nine months
ended September 30, 1996, and represented 29% and 31% of revenue, respectively.
The percentage increase in non-North Amercia revenue for the three months of
1997 over 1996 and the dollar increase for all periods were due to increased
unit sales primarily to customers in Asia and Latin America. The percentage
decrease in non-North Amercia revenue for the nine months ended September 30,
1997 versus the nine months ended September 30, 1996 was attributable to more
rapid revenue growth in the North American market in 1997.
Gross Profit
Gross profit of $13.2 million for the three months ended September 30, 1997
increased 47% from $9.0 million for the three months ended September 30, 1996,
and represented 66% of revenue for both periods. Gross profit of $35.1 million
for the nine months ended September 30, 1997 increased 54% from $22.8 million
for the nine months ended September 30, 1996, and represented 65% and 63% of
total revenue, respectively. The increase as a percent of revenue for 1997
is primarily attributable to increased unit volume of AG products which have
higher gross profit margins, higher manufacturing license revenue, and
increased overall unit volume without a corresponding increase in manufacturing
overhead. Gross profit for the nine months ended September 30, 1996 was
impacted by revenue realized from a European customer with lower margins
associated with a system contract.
Selling, General and Administrative
Selling, general and administrative expense of $5.9 million for the three
months ended September 30, 1997 increased 49% from $3.9 million for three months
ended September 30, 1996 and represented 29% of revenue for both periods.
Selling, general and administrative expense of $15.6 million for the nine
months ended September 30, 1997 increased 47% from $10.6 million for the nine
months ended September 30, 1996 and represented 29% of revenue for both periods.
These increases in expense were due to costs associated with increased selling
activity as well as increased costs for marketing, international
operations, and technical support. Costs associated with the Company's new
headquarters facilities occupied in May, 1997 increased selling, general and
administrative cost for the three and nine months ending September 30, 1997.
The Company expects that its selling, general and administrative expenditures
will continue to increase, but may vary as a percentage of future product
revenue in future periods.
Research and Development
Research and development expense of $3.9 million for the three months ended
September 30, 1997 increased 35% from $2.9 million for three months ended
September 30, 1996, and were 19% and 21% of revenue, respectively. Research and
development expense of $10.8 million for the nine months ended September 30,
1997 increased 50% from $7.2 million for nine months ended September 30, 1996,
and were 20% of revenue for both periods. The increase in research and
development expense was due to increased personnel and development project
related costs for both periods. The Company expects
9
<PAGE>
that its research and development expense will continue to increase, but
may vary as a percentage of future product revenues in future periods.
In-Process Research and Development
The acquisition of TEKnique was accounted for as a purchase and, accordingly,
the purchase price has been allocated to assets purchased and liabilities
assumed based on the fair values at the date of acquisition. In connection with
the merger $4.4 million of purchased in-process research and development costs
were charged to expense in the three and nine months ended September 30, 1996.
Other Income, Net
Other income, net was $357,000 and $334,000 for the three months ended September
30,1997 and 1996, respectively. Other income, net was $935,000 and $836,000,
for the nine months ended September 30,1997 and 1996, respectively. Increased
interest income for all periods resulted from higher cash balances as a result
of the Company's February 1996 follow-on stock offering.
Income Tax Expense
Income tax expense was $1.3 million and $817,000 for the three months ended
September 30, 1997 and 1996, respectively. Income tax expense was $3.3 million
and $1.9 million for the nine months ended September 30, 1997 and 1996,
respectively. Income taxes were provided based on an effective tax rate which
differed from the U. S. federal statutory rate primarily due to state and
foreign income taxes and income tax credits for all periods presented. Income
taxes were reduced for both periods of 1996 due to the effect of net operating
loss carry forwards.
Operating and Net Income (Loss)
As a result of the foregoing, operating income was $3.4 million and $2.2 million
for the three months ended September 30, 1997 and 1996, respectively. Net
income was $2.5 million and $1.7 million for the same periods, respectively.
Operating income was $8.8 million and $566,000 for the nine months ended
September 30, 1997 and 1996, respectively. Net income (loss) was $6.4 million
and ($539,000) for those periods, respectively.
Liquidity And Capital Resources
Cash provided by operations for the nine months ended September 30, 1997 and
1996 was $3.3 million and $192,000, respectively. Cash was provided by
increased net income and increased accounts payable and accrued expense offset
by increased accounts receivable and inventories associated with increased
revenue as well as an increase in prepaid expense and other assets. Cash was
provided by operations for the nine month period ended September 30, 1996 from
net income partially offset by increases in accounts receivable and inventory to
support increased revenue.
Cash used in investing activities for the nine months ended September 30, 1997
and 1996 was $4.2 million and $35.4 million, respectively. For both periods
cash was used to purchase property and equipment of $6.3 million and $1.8
million, respectively. Property and equipment purchases increased significantly
for 1997 related to the Company's new headquarters facilities. For 1996, cash
of $3.2 million was used to purchase TEKnique.
Cash provided by financing activities in the nine months ended September 30,
1997 and 1996 was $3.1 and $31.3 million, respectively. The increase for 1996
was due to proceeds from the issuance of common stock including the Company's
follow-on stock offering of approximately $30.1 million, net of costs of $1.2
million; and exercise of warrants for $585,000. Cash was provided by financing
activities in both periods including the issuance's of stock under the Company's
employee stock option and stock purchase plans.
Current assets at September 30, 1997 were $61.0 million, 13% more than current
assets of $54.0 million at December 31, 1996. Current liabilities at September
30, 1997 were $11.1 million, 18% more than current liabilities of $9.4 million
at December 31, 1996.
10
<PAGE>
For U. S. federal income tax purposes the Company has net operating loss
carryforwards available to reduce future income of approximately $4.4 million at
September 30, 1997. These carryforwards expire beginning in 2002. Utilization
of net operating loss carryforwards are subject to an annual limitation of
approximately $750,000 under Internal Revenue Code section 382.
Other
The Financial Accounting Standards Board issued Statement No. 128, "Earnings per
Share" SFAS 128, which modifies the way in which earnings per share (EPS) is
calculated and disclosed. Upon adoption of this standard for the fiscal year
ending December 31, 1997, the Company will disclose basic and diluted EPS for
fiscal 1997 and will restate all prior period EPS data presented. Basic EPS
excludes dilution and is computed by dividing income available to common
stockholders by the weighted-average number of common shares outstanding for the
period. Diluted EPS reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised or converted
into common stock or resulted in the issuance of common stock that then shared
in the earnings of the Company.
Cautionary Statement
When used anywhere in this Form 10-Q and in future filings by the Company with
the Securities and Exchange Commission, in the Company's press releases and in
oral statements made with the approval of an authorized executive officer of the
Company, the words or phrases "will likely result", "the Company expects", "will
continue", "is anticipated", "estimated", "project", or "outlook" or similar
expressions (including confirmations by an authorized executive officer of the
Company of any such expressions made by a third party with respect to the
Company) are intended to identify "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. The Company
wishes to caution readers not to place undue reliance on any such forward-
looking statements, which speak only as of the date made. Such statements are
subject to certain risks and uncertainties that could cause actual results to
differ materially from historical earnings and those presently anticipated or
projected. Such risk factors are set forth in Part I of the Company's annual
report on Form 10-K for the year ended December 31, 1996. The Company
specifically declines any obligation to publicly release the result of any
revisions which may be made to any forward-looking statements to reflect
anticipated or unanticipated events or circumstances occurring after the date of
such statements.
11
<PAGE>
PART II - Other Information
ITEMS 1 - 5
Not applicable.
ITEM 6. Exhibits and Reports on Form 8-K
A. Exhibits
No. 11.1 - Statement of Computation of Earnings Per Share
No. 27.1 - Financial Data Schedule
B. Reports on Form 8-K
None
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
Natural MicroSystems Corporation
Dated: November 14, 1997 By /s/ Robert P. Schechter
------------------------------
Robert P. Schechter
President and Chief Executive Officer
Dated: November 14, 1997 By s/ John F. Kennedy
------------------------------
John F. Kennedy
Chief Financial Officer
13
<PAGE>
Natural MicroSystems Corporation
Exhibit Index
Page
----
11.1 Statement of Computation of Earnings Per Share 14
27.1 Financial Data Schedule 15
14
<PAGE>
Natural MicroSystems Corporation
Exhibits No. 11.1
Statement of Computation of Earnings Per Share
(In $000's except per share data)
<TABLE>
<CAPTION>
9 Months Ended 3 Months Ended
-------------- --------------
September 30, 1996 September 30, 1997 September 30, 1996 September 30, 1997
------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
Net Income ($539) $ 6,434 $ 1,671 $ 2,513
====== ======= ======= =======
Weighted average common shares outstanding 9,222 10,357 9,876 10,471
Common shares attributable to dilutive
options and warrants -- 662 632 635
------ ------- ------- -------
Weighted average shares 9,222 11,019 10,508 11,106
====== ======= ======= =======
Primary net income per share ($0.06) $ 0.58 $ 0.16 $ 0.23
====== ======= ======= =======
<CAPTION>
9 Months Ended 3 Months Ended
-------------- --------------
September 30, 1996 September 30, 1997 September 30, 1996 September 30, 1997
------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
Net Income ($539) $ 6,434 $ 1,671 $ 2,513
====== ======= ======= =======
Weighted average common shares outstanding 9,222 10,357 9,876 10,471
Common shares attributable to dilutive
options and warrants -- 687 709 660
------ ------- ------- -------
Weighted average shares 9,222 11,044 10,585 11,131
====== ======= ======= =======
Primary net income per share ($0.06) $ 0.58 $ 0.16 $ 0.23
====== ======= ======= =======
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM QUARTERLY
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 9-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1997
<PERIOD-START> JAN-01-1997 JUL-01-1997
<PERIOD-END> SEP-30-1997 SEP-30-1997
<CASH> 8,972 0
<SECURITIES> 24,645 0
<RECEIVABLES> 18,801 0
<ALLOWANCES> 672 0
<INVENTORY> 6,065 0
<CURRENT-ASSETS> 61,011 0
<PP&E> 8,285 0
<DEPRECIATION> 5,009 0
<TOTAL-ASSETS> 74,049 0
<CURRENT-LIABILITIES> 11,124 0
<BONDS> 0 0
0 0
0 0
<COMMON> 106 0
<OTHER-SE> 19 0
<TOTAL-LIABILITY-AND-EQUITY> 74,049 0
<SALES> 54,002 20,076
<TOTAL-REVENUES> 54,002 20,076
<CGS> 18,863 6,902
<TOTAL-COSTS> 18,863 6,902
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> 9,705 3,786
<INCOME-TAX> 3,271 1,273
<INCOME-CONTINUING> 6,434 2,513
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 6,434 2,513
<EPS-PRIMARY> .58 .23
<EPS-DILUTED> .58 .23
</TABLE>
