<PAGE> 1
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, 1998
[ ] 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 0-25936
USDATA Corporation
(Exact name of registrant as specified in its charter)
DELAWARE 75-2405152
- -------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2435 N Central Expressway, Richardson, TX, 75080
- -------------------------------------------------------------------------------
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code: (972) 680-9700
------------------------------
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 twelve months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such 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 July 31, 1998:
Class Number of Shares
Outstanding
Common Stock, Par Value $.01 Per Share 11,235,366 shares
<PAGE> 2
USDATA CORPORATION
FORM 10-Q
QUARTER ENDED JUNE 30, 1998
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
Number
PART I. FINANCIAL INFORMATION
<S> <C> <C> <C>
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets at
June 30, 1998 and December 31,
1997 3
Consolidated Statements of Operations
for the Three and Six Months Ended
June 30, 1998 and 1997 4
Consolidated Statements of Cash Flows
for the Six Months Ended
June 30, 1998 and 1997 5
Notes to Consolidated Financial
Statements 6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations 7
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
Computation of Per Share Earnings 13
</TABLE>
<PAGE> 3
USDATA CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
(UNAUDITED) (AUDITED)
JUNE 30, DECEMBER 31,
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) 1998 1997
=====================================================================================================
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 3,897 $ 5,204
Accounts receivable, net of allowance for doubtful
accounts of $1,372 and $1,158, respectively 5,373 4,573
Deferred income taxes 2,345 2,345
Other current assets 464 436
-----------------------------------------------------------------------------------------------------
Total current assets 12,079 12,558
-----------------------------------------------------------------------------------------------------
Property and equipment, net 3,359 2,416
Capitalized computer software development costs,
net of accumulated amortization of $2,521
and $2,161, respectively 3,048 1,938
Other assets 147 90
Net assets of discontinued operations 685 2,252
-----------------------------------------------------------------------------------------------------
Total assets $ 19,318 $ 19,254
-----------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,810 $ 952
Deferred revenue 1,318 1,257
Accrued compensation and benefits 793 955
Other accrued liabilities 2,734 1,488
-----------------------------------------------------------------------------------------------------
Total current liabilities 6,655 4,652
-----------------------------------------------------------------------------------------------------
Deferred income taxes 596 729
-----------------------------------------------------------------------------------------------------
Total liabilities 7,251 5,381
-----------------------------------------------------------------------------------------------------
Commitments and contingencies - -
Stockholders' equity:
Preferred stock, $.01 par value, 2,200,000 shares
authorized; none issued or outstanding - -
Common stock, $.01 par value, 22,000,000 shares
authorized; 14,343,550 issued in 1998 and 1997 143 143
Additional paid-in capital 16,520 16,365
Retained earnings 6,401 8,919
Treasury stock at cost, 3,129,684 shares in 1998
and 3,321,894 shares in 1997 (10,997) (11,554)
-----------------------------------------------------------------------------------------------------
Total stockholders' equity 12,067 13,873
-----------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $ 19,318 $ 19,254
=====================================================================================================
</TABLE>
3
<PAGE> 4
USDATA CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
========================= ======================
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) 1998 1997 1998 1997
===================================================================================================================================
<S> <C> <C> <C> <C>
Net sales $ 5,806 $ 5,508 $ 11,446 $ 11,425
Cost of sales 353 503 721 1,036
- -----------------------------------------------------------------------------------------------------------------------------------
Gross profit 5,453 5,005 10,725 10,389
- -----------------------------------------------------------------------------------------------------------------------------------
Operating expenses:
Selling 3,760 3,683 7,686 8,305
Product development 865 1,062 1,545 1,946
General and administration 1,203 1,419 2,371 2,665
- -----------------------------------------------------------------------------------------------------------------------------------
Total operating expenses 5,828 6,164 11,602 12,916
- -----------------------------------------------------------------------------------------------------------------------------------
Loss from operations (375) (1,159) (877) (2,527)
Interest income 56 118 114 168
- -----------------------------------------------------------------------------------------------------------------------------------
Loss from continuing operations before income taxes (319) (1,041) (763) (2,359)
Income tax (provision) benefit (34) 362 (36) 802
- -----------------------------------------------------------------------------------------------------------------------------------
Loss from continuing operations (353) (679) (799) (1,557)
- -----------------------------------------------------------------------------------------------------------------------------------
Discontinued operations:
Income (loss) from discontinued Systems Operations
(net of income taxes of $39 and $60 in 1997) - 77 (219) 118
Estimated loss on disposal of discontinued System Operations,
including provision for operating losses of $250 - - (1,500) -
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from discontinued operations - 77 (1,719) 118
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Net loss $ (353) $ (602) $ (2,518) $ (1,439)
- -----------------------------------------------------------------------------------------------------------------------------------
Earnings per share (basic & dilutive):
Loss from continuing operations $ (0.03) $ (0.06) $ (0.07) $ (0.14)
Income (loss) from discontinued operations - 0.01 (0.16) 0.01
===================================================================================================================================
Net loss $ (0.03) $ (0.05) $ (0.23) $ (0.13)
===================================================================================================================================
Weighted average shares outstanding: 11,211 11,380 11,156 11,233
===================================================================================================================================
</TABLE>
4
<PAGE> 5
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
SIX MONTHS ENDED JUNE 30,
(IN THOUSANDS) 1998 1997
========================================================================================================
<S> <C> <C>
Cash flows from operating activities:
--------------------------------------------------------------------------------------------------------
Net loss from continuing operations $ (799) $ (1,557)
--------------------------------------------------------------------------------------------------------
Adjustments to reconcile net loss from continuing operations
to net cash provided by (used in) continuing operations:
Depreciation and amortization 894 690
Changes in assets and liabilities:
Accounts receivable (800) 611
Income tax receivable - 1,050
Deferred income taxes (133) (1,149)
Accounts payable and accrued liabilities 1,160 97
Deferred revenue 61 (455)
--------------------------------------------------------------------------------------------------------
Other - net (83) 143
--------------------------------------------------------------------------------------------------------
Net cash provided by (used in) continuing operations 300 (570)
--------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Capital expenditures (298) (795)
Purchase of MES software (400) -
--------------------------------------------------------------------------------------------------------
Capitalized software development costs (1,469) (582)
--------------------------------------------------------------------------------------------------------
Net cash used in investing activities (2,167) (1,377)
--------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
--------------------------------------------------------------------------------------------------------
Proceeds from issuance of common shares 712 190
--------------------------------------------------------------------------------------------------------
Net cash provided by financing activities 712 190
--------------------------------------------------------------------------------------------------------
Cash flows from discontinued operations (152) 899
--------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents (1,307) (858)
Cash and cash equivalents, beginning of period 5,204 6,398
--------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 3,897 $ 5,540
========================================================================================================
</TABLE>
5
<PAGE> 6
USDATA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(1) BASIS OF PRESENTATION
The accompanying unaudited interim consolidated financial statements
were prepared in accordance with generally accepted accounting principles for
interim financial statements. These financial statements do not include all
disclosures associated with annual financial statements. Accordingly, these
statements should be read in conjunction with the Company's consolidated
financial statements and notes thereto contained in the Company's Form 10-K for
the year ended December 31, 1997.
In the opinion of management, all adjustments (which include only
normal recurring adjustments) necessary to present fairly the financial
position, results of operations and cash flows for all periods presented have
been made.
Interim results are not necessarily indicative of results expected for the full
year.
(2) RECENT ACCOUNTING PRONOUNCEMENTS
Effective January 1, 1998, the Company adopted pronouncements issued by
the Financial Accounting Standards Board ("FASB") relating to the presentation
and disclosure of information related to comprehensive income (SFAS 130),
segment data (SFAS 131) and pensions and other postretirement benefits (SFAS
132). The adoption of these provisions did not have a material effect on the
Company's financial position or results of operations for the first six months
of 1998 and the Company does not anticipate it will have a material impact in
the future, but may change the presentation of certain of the Company's
financial statements and related notes and data thereto.
Also, effective January 1, 1998, the Company adopted a Statement of
Position (SOP) on software revenue recognition (SOP 97-2) issued by the
Accounting Standards Executive Committee of the American Institute of Certified
Public Accountants that supersedes SOP 91-1. The adoption of SOP 97-2 did not
have a material effect on the Company's financial position or results of
operations for the first six months of 1998 and the Company does not anticipate
it will have a material impact in the future.
(3) SUBSEQUENT EVENTS
Effective July 1, 1998 the Company entered into an agreement to sell
its discontinued Auto ID hardware integration and servicing business. The
Company currently estimates the loss on disposal and loss from operations until
the date of disposal will approximate the $1.7 million or $.16 per share loss
which was recognized during the first quarter 1998.
6
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
USDATA Corporation (the "Company") is a global supplier of
real-time manufacturing application software and development tools, and related
consulting services. The Company's products and services help automate
manufacturing and process control applications. Its real-time data management
capabilities enable customers to reduce operating costs, shorten cycle times,
improve product quality and increase productivity. Specifically, the Company
produces automation software tools, marketed under the name FactoryLink(R), that
enable an organization's information systems to supervise, monitor and control
manufacturing and other automated processes and to interface with corporate
information systems (the "Software Operations").
In early 1998, the Company disclosed its intention to dispose of its
system integration and hardware servicing business (the "Systems Operations").
This business has historically been engaged in the sale of automatic
identification (Auto ID) equipment, distributed management software and related
integration services that allow remote, real-time data collection using a
variety of automatic identification techniques. The System Operations' net sales
are generated from sales of third-party automated data collection equipment,
distributed management software and related repair, installation and integration
services. As a result of this decision, the Company's revenues and operating
expenses for the periods presented herein reflect only the Software Operations
with the net results of the Systems Operations reported on its statements of
operations under the caption Discontinued operations.
The Company currently derives all of its net sales from the Software
Operations. The Software Operations' net sales are generated substantially from
licenses of the FactoryLink family of products and also from related integration
services, training classes, technical support and service agreements. These
support and services agreements are generally one year, renewable contracts
entitling a customer to certain software upgrades and technical support. Support
and service revenue represented 11%, and 10% of Software Operations' net sales
during the three months ended June 30, 1998 and 1997, respectively.
In February 1998, the Company began shipping FactoryLink ECS 6.5, which
provides a number of enhancements and is year 2000 compliant. FactoryLink ECS
6.5 is the server platform for FactoryLink ECS WebClient, which allows users to
view and control their production processes using a simple Web browser.
FactoryLink ECS 6.5 supports OPC (Object Linking and Embedding for Process
Control) to provide connectivity to data collection devices such as PLC's
(Programmable Logic Controllers) and RTU's (Remote Terminal Units). FactoryLink
ECS 6.5 also supports MicroSoft Windows Terminal Server.
Effective January 12, 1998, the Company entered into an agreement to
purchase a Manufacturing Execution Systems ("MES") software product, for
$400,000 cash and 165,000 shares of the Company's common stock for $.01 per
share. The common stock is expected to be issued in the second half of 1998 and
will be restricted from sale. Restrictions on the sale of the stock will lapse
upon the achievement of certain performance factors and time. The Company
recorded $782,000 in accrued liabilities at June 30, 1998, which reflects the
value of the stock to be issued based upon the closing price of the Company's
common stock on January 12, 1998. The total purchase price of $1,182,000 is
included in property and equipment at June 30, 1998.
During the second quarter 1998, the Company and Microsoft jointly
announced the Company's innovative new Manufacturing Execution System (MES)
product, Xfactory(TM), which incorporates Microsoft's newest technologies and is
built on Microsoft's DNA (Distributed interNet Applications) architecture.
Xfactory enables manufacturing plants to more easily and quickly automate their
production processes and is the first visual object modeling MES. Xfactory
bridges the gap between the plant floor and ERP (Enterprise Resource Planning)
systems.
7
<PAGE> 8
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, selected
statement of operations data as a percentage of net sales:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
===================== =====================
1998 1997 1998 1997
=====================================================================================================================
<S> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of sales 6.1% 9.1% 6.3% 9.1%
- ---------------------------------------------------------------------------------------------------------------------
Gross Profit 93.9% 90.9% 93.7% 90.9%
- ---------------------------------------------------------------------------------------------------------------------
Operating Expenses:
Selling 64.8% 66.9% 67.2% 72.7%
Product development 14.9% 19.3% 13.5% 17.0%
General and administrative 20.7% 25.8% 20.7% 23.3%
- ---------------------------------------------------------------------------------------------------------------------
Total operating expenses 100.4% 111.9% 101.4% 113.1%
- ---------------------------------------------------------------------------------------------------------------------
Loss from operations (6.5)% (21.0)% (7.7)% (22.1)%
Interest income 1.0% 2.1% 1.0% 1.5%
- ---------------------------------------------------------------------------------------------------------------------
Loss from continuing operations before income taxes (5.5)% (18.9)% (6.7)% (20.6)%
Income tax (provision) benefit (0.6)% 6.6% (0.3)% 7.0%
- ---------------------------------------------------------------------------------------------------------------------
Loss from continuing operations (6.1)% (12.3)% (7.0)% (13.6)%
- ---------------------------------------------------------------------------------------------------------------------
Discontinued Operations:
Income (loss) from discontinued Systems Operations 0.0% 1.4% (1.9)% 1.0%
Estimated loss on disposal of discontinued System Operations 0.0% 0.0% (13.1)% 0.0%
- ---------------------------------------------------------------------------------------------------------------------
Income (loss) from discontinued operations 0.0% 1.4% (15.0)% 1.0%
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
Net Loss (6.1)% (10.9)% (22.0)% (12.6)%
=====================================================================================================================
</TABLE>
Comparison of Three Months Ended June 30, 1998 and 1997
Net sales for the quarter ended June 30, 1998 increased 5% compared to
the same quarter in 1997 primarily due to higher product sales partially offset
by lower consulting revenues.
Cost of sales as a percentage of net sales decreased primarily due to
the replacement of printed product documentation with CD based product
documentation.
Selling expenses as a percentage of net sales decreased compared to the
second quarter of 1997 primarily due to higher revenue in 1998. Selling expenses
in absolute dollars for the second quarter of 1998 increased 2% over the second
quarter of 1997. The increase is primarily due to higher marketing and customer
support expenses, partially offset by cost reductions due to organizational
changes, as the Company transitions from a direct sales force to a channel based
distribution model.
Gross product development expenses, including capitalized software
development costs of $896,000 and $58,000, in the quarter ended June 30, 1998
and 1997, respectively, increased 57%. This increase is a result of
8
<PAGE> 9
development efforts related to the Company's next major version of FactoryLink
ECS software. The Company expects to continue capitalizing these development
costs throughout 1998.
General and administrative expenses, for the second quarter of 1998,
decreased 15%, when compared with the second quarter of 1997. The decrease is
primarily related to a decrease in the quarterly provision for doubtful
accounts, due to improvements in the overall quality of the Company's accounts
receivable balance.
The Company did not record an income tax benefit for the second quarter
of 1998, as it would be based upon the future operating results of the Company.
Income tax expense for 1998 is related to state income tax. During the second
quarter of 1997, the Company recorded a deferred income tax benefit based on its
ability to carryback losses to profitable periods.
Comparison of Six Months Ended June 30, 1998 and 1997
Net sales for the six months ended June 30 1998 increased slightly
compared to the same period in 1997. The increase is primarily a result of
increased product sales offset by a decrease in consulting revenue.
Cost of sales as a percentage of net sales decreased primarily due to
the replacement of printed product documentation with CD based product
documentation.
Selling expenses for the six months ended June 30, 1998 decreased 11%
compared to the same period in 1997. The decrease is primarily a result of cost
reductions, due to organizational changes, as the Company transitions from a
direct sales force to a channel based distribution model, This decrease was
partially offset by higher marketing and customer support expenses.
Gross product development expenses, including capitalized software
development costs of $1,470,000 and $582,000, for the six months ended June 30,
1998 and 1997, respectively, increased 31%. The increase is a result of
development efforts related to the Company's next major version of FactoryLink
ECS software. The Company expects to continue capitalizing these development
costs throughout 1998.
General and administrative expenses, for the six months ended June 30,
1998, decreased 11%, when compared with the six months ended June 30, 1997,
primarily due to a decrease in the provision for doubtful accounts, due to
improvements in the overall quality of the Company's accounts receivable
balance.
The Company did not record an income tax benefit for the six months
ended June 30, 1998, as it would be based upon the future operating results of
the Company. Income tax expense for 1998 is related to state income tax. During
the six months ended June 30, 1997, the company recorded a deferred income tax
benefit based on its ability to carryback losses to profitable periods.
LIQUIDITY AND CAPITAL RESOURCES
The Company's operating activities provided $300,000 of cash during the
six months ended June 30, 1998. During the six months ended June 30, 1998, the
Company invested $298,000 in capital equipment, primarily computers, $400,000
for the purchase of an MES software product and capitalized $1,469,000 in
software development costs. The Company also received $712,000 of proceeds
related to the exercise of stock options during the six months ended June 30,
1998. Total cash usage for the first six months of 1998 was $1,307,000.
The Company believes cash on hand and cash generated from operations
will be sufficient to satisfy its operating cash needs into the future. The
Company is in the process of establishing a new credit facility which could be
used to fund operating and capital requirements should the business expand more
rapidly than expected. In addition, the Company could consider seeking
additional public or private debt or equity financing to fund future growth
opportunities or acquisitions
9
<PAGE> 10
FORWARD LOOKING STATEMENTS
This report includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements other than
statements of historical fact included in this report, including without
limitation, certain statements in this Item 2 under the captions "Results of
Operations" and "Liquidity and Capital Resources" may constitute forward looking
statements. Although the Company believes that the expectations reflected in
such forward-looking statements are reasonable, it can give no assurance that
such expectations will prove to be correct. Important factors that could cause
actual results to differ materially from the Company's expectations ("cautionary
statements") are disclosed in the Company's Annual Report on Form 10-K for the
year ended December 31, 1997. All subsequent written and oral forward-looking
statements attributable to the Company or persons acting on its behalf are
expressly qualified in their entirety by these cautionary statements.
10
<PAGE> 11
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held its Annual Meeting of Shareholders on June 1, 1998. At
this meeting, the shareholders voted in favor of electing as directors the six
nominees named in the Proxy Statement dated April 29, 1998. One nominee named in
the Proxy Statement resigned from the Board of Directors for personal reasons
prior to the Annual Meeting of Shareholders. The number of votes cast were as
follows:
I. ELECTION OF DIRECTORS
<TABLE>
<CAPTION>
FOR WITHHELD
--- --------
<S> <C> <C>
Arthur R. Spector 9,814,248 50,093
Gary J. Anderson, M.D. 9,815,748 48,593
James W. Dixon 9,835,860 28,481
Max D. Hopper 9,835,760 28,581
Jerry L. Johnson 9,816,676 47,665
Jack L. Messman 9,835,660 28,681
Robert A. Merry 9,827,758 36,583
</TABLE>
ITEM 5. OTHER INFORMATION
Stockholders intending to present proposals at the next Annual Meeting
of Stockholders to be held in 1999 must notify the Company of the proposal no
later than December 30, 1998, if they wish to include the proposal on the
Company's proxy card and, along with any supporting statement, in the Company's
proxy statement. As to any proposal presented by a stockholder at the Annual
Meeting of Stockholders that has not been included in the Proxy Statement, the
management proxies will be allowed to use their discretionary voting authority
unless notice of such proposal is received by the Company no later than March
15, 1999.
ITEM 6. EXHIBITS
(a) Exhibits (filed as part of this report).
Number Description
11.1 Computation of Per Share Earnings
27.1 Financial Data Schedule
(Edgar Version Only)
(b) Reports on Form 8-K
No reports on Form 8-K have been filed by the
Registrant during the quarter ended June 30, 1998
11
<PAGE> 12
USDATA CORPORATION AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on behalf by the undersigned
thereunto duly authorized.
USDATA CORPORATION, INC.
Date: August 14, 1998 /s/ Robert A. Merry
-------------------------------------------------
Robert A. Merry
President and Chief Executive Officer
Date: August 14, 1998 /s/ Robert L. Drury
-------------------------------------------------
Robert L. Drury
Vice President Finance, Chief Financial Officer
Treasurer and Secretary (Principal Financial and
Accounting Officer)
12
<PAGE> 13
INDEX TO EXHIBITS
EXHIBIT
NUMBER EXHIBIT
- ------ -------
11.1 Computation of Per Share Earnings
27.1 Financial Data Schedule
<PAGE> 1
USDATA CORPORATION AND SUBSIDIARIES
EXHIBIT 11.1 - COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
====================== ======================
(IN THOUSANDS, EXPECT PER SHARE DATA) 1998 1997 1998 1997
============================================================================= ======================
<S> <C> <C> <C> <C>
Net earnings (loss):
Continuing operations $ (353) $ (679) $ (799) $ (1,557)
Discontinued operations -- 77 (1,719) 118
---------------------- ----------------------
Net loss $ (353) $ (602) $ (2,518) $ (1,439)
====================== ======================
Weighted average common shares outstanding 11,211 11,380 11,156 11,233
Common share equivalents -- -- -- --
---------------------- ----------------------
Weighted average common shares and common share
equivalents (if dilutive) outstanding 11,211 11,380 11,156 11,233
====================== ======================
Net loss per common share (Basic & Dilutive)
Continuing operations $ (0.03) $ (0.06) $ (0.07) $ (0.14)
Discontinued operations -- 0.01 (0.16) 0.01
Net loss $ (0.03) $ (0.05) $ (0.23) $ (0.13)
====================== ======================
</TABLE>
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD JUNE 30, 1998 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 3,897
<SECURITIES> 0
<RECEIVABLES> 6,745
<ALLOWANCES> 1,158
<INVENTORY> 116
<CURRENT-ASSETS> 12,079
<PP&E> 9,411
<DEPRECIATION> 6,052
<TOTAL-ASSETS> 19,318
<CURRENT-LIABILITIES> 7,251
<BONDS> 0
0
0
<COMMON> 143
<OTHER-SE> 22,921
<TOTAL-LIABILITY-AND-EQUITY> 19,318
<SALES> 11,446
<TOTAL-REVENUES> 11,446
<CGS> 721
<TOTAL-COSTS> 11,602
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (763)
<INCOME-TAX> 36
<INCOME-CONTINUING> (799)
<DISCONTINUED> (1,719)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,518)
<EPS-PRIMARY> (0.23)
<EPS-DILUTED> (0.23)
</TABLE>
