<PAGE>
UNITED STATES 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 QUARTER ENDED JUNE 30, 1996
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File No. 0-26274
INTEGRATED MEASUREMENT SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
OREGON 93-0840631
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
9525 S.W. GEMINI DRIVE, BEAVERTON, OR 97008
(Address of principal executive offices) (zip code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (503) 626-7117
NO CHANGE
Former name, 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 ________
At July 31, 1996, there were 6,701,941 shares of Integrated Measurement
Systems, Inc. common stock, $0.01 par value, outstanding. (Indicate the
number of shares outstanding of each of the issuer's classes of common stock,
as of the latest practicable date.)
<PAGE>
INTEGRATED MEASUREMENT SYSTEMS, INC.
INDEX TO FORM 10-Q
PART I FINANCIAL INFORMATION PAGE NUMBER
Item 1. Financial Statements
Statements of Income for the three months and the six
months ended June 30, 1996 and 1995
Balance Sheets as of June 30, 1996 and December 31, 1995
Statements of Cash Flows for the six months
ended June 30, 1996 and 1995
Notes to the Financial Statements
Item 2. Management's Discussion and Analysis of
Results of Operations and Financial Condition
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
SIGNATURES
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INTEGRATED MEASUREMENT SYSTEMS, INC.
STATEMENTS OF INCOME
(In thousands, except net income per share)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ -----------------
1996 1995 1996 1995
----------- ------ ------- -------
Product sales $10,072 $8,078 $19,242 $15,382
Service and other sales 2,540 1,771 5,285 3,551
----------- ------ ------- -------
Net sales 12,612 9,849 24,527 18,933
----------- ------ ------- -------
Cost of product sales 3,632 3,236 6,845 6,185
Cost of service and other sales 876 627 2,071 1,316
----------- ------ ------- -------
Total cost of sales 4,508 3,863 8,916 7,501
----------- ------ ------- -------
Gross margin 8,104 5,986 15,611 11,432
Operating expenses:
Research, development and engineering 1,929 1,409 3,917 2,718
Selling, general and administrative 3,856 3,388 7,304 6,560
----------- ------ ------- -------
Total operating expenses 5,785 4,797 11,221 9,278
----------- ------ ------- -------
Operating income 2,319 1,189 4,390 2,154
Other income (expense), net (64) 62 37 113
----------- ------ ------- -------
Income before income taxes 2,255 1,251 4,427 2,267
Provision for income taxes 857 480 1,683 869
----------- ------ ------- -------
Net income $1,398 $771 $2,744 $1,398
----------- ------ ------- -------
----------- ------ ------- -------
Net income per share $0.20 $0.12 $0.38 $0.22
----------- ------ ------- -------
----------- ------ ------- -------
Weighted average number of common and common
equivalent shares outstanding 7,140 6,366 7,139 6,366
----------- ------ ------- -------
----------- ------ ------- -------
SEE ACCOMPANYING NOTES TO UNAUDITED FINANCIAL STATEMENTS
3
<PAGE>
INTEGRATED MEASUREMENT SYSTEMS, INC.
BALANCE SHEETS
(In thousands, except per share data)
<TABLE>
<CAPTION>
As of As of
June 30, December 31,
1996 1995
----------- -------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 8,172 $ 8,930
Trade receivables, less allowance for doubtful accounts
of $340 and $338 11,864 8,117
Receivable from affiliate, net 788 1,094
Inventories, net 6,726 5,830
Deferred income taxes 1,237 1,237
Prepaid expenses and other current assets 934 735
----------- -------------
Total current assets 29,721 25,943
Property, plant and equipment, net 5,988 5,178
Service spare parts, net 2,220 2,223
Software development costs, net 1,601 1,573
Other assets, net 232 84
----------- -------------
$39,762 $35,001
----------- -------------
----------- -------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,466 $ 2,660
Accrued compensation 1,851 1,629
Accrued warranty 732 801
Deferred revenue 1,918 2,291
Other current liabilities 681 810
Capital lease obligations - current 281 164
----------- -------------
Total current liabilities 8,929 8,355
Deferred income taxes 108 108
Capital lease obligations, net of current portion 108 54
Shareholders' equity:
Preferred stock, $.01 par value, authorized 10,000,000 shares;
none issued and outstanding - -
Common stock, $.01 par value, authorized 15,000,000 shares;
issued and outstanding 6,701,941 and 6,699,803 67 67
Additional paid-in capital 21,856 20,467
Retained earnings 8,694 5,950
----------- -------------
Total shareholders' equity 30,617 26,484
----------- -------------
$39,762 $35,001
----------- -------------
----------- -------------
</TABLE>
SEE ACCOMPANYING NOTES TO UNAUDITED FINANCIAL STATEMENTS.
4
<PAGE>
INTEGRATED MEASUREMENT SYSTEMS, INC.
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
June 30,
------------------
1996 1995
-------- -------
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers $21,430 $18,403
Payments to suppliers (9,696) (9,363)
Payments to employees (8,583) (6,512)
Income taxes paid (279) --
Other taxes paid (666) (299)
Interest received 217 142
Interest paid (14) (16)
-------- -------
Net cash provided by operating activities 2,409 2,355
-------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of equipment and software (2,195) (586)
Additions to service spare parts (491) (300)
Software development costs (377) (401)
-------- -------
Net cash used in investing activities (3,063) (1,287)
-------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments under capital leases (126) (118)
Proceeds from employee stock option exercises 22 --
-------- -------
Net cash used in financing activities (104) (118)
-------- -------
Net increase (decrease) in cash and cash equivalents (758) 950
Beginning cash and cash equivalents balance 8,930 4,384
-------- -------
Ending cash and cash equivalents balance $ 8,172 $5,334
-------- -------
-------- -------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,744 $1,398
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation and amortization 1,728 1,197
Contributed capital -- 177
Provision for deferred income taxes -- 488
Net change in payable to or receivable from affiliate 306 445
Increase in trade receivables (3,747) (1,367)
Increase in inventories (896) (1,184)
Increase in prepaid expenses and other current assets (199) (563)
Increase in current tax liability 1,366 --
Increase in accounts payable and accrued liabilities 1,480 1,479
(Decrease) increase in deferred revenue (373) 285
-------- -------
Net cash provided by operating activities $ 2,409 $2,355
-------- -------
-------- -------
SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING ACTIVITIES:
Purchase of assets through capital lease $ 298 $ 174
-------- -------
-------- -------
Tax benefit from stock option transactions $ 1,366 $ --
-------- -------
-------- -------
Noncash dividend to Cadence $ -- $1,027
-------- -------
-------- -------
SEE ACCOMPANYING NOTES TO UNAUDITED FINANCIAL STATEMENTS.
5
<PAGE>
INTEGRATED MEASUREMENT SYSTEMS, INC.
NOTES TO THE FINANCIAL STATEMENTS
(In thousands)
(Unaudited)
(1) BASIS OF PRESENTATION
The interim financial statements included herein have been prepared,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to
such rules and regulations, although the management of the Company believes
that the disclosures are adequate to make the information presented not
misleading. Interim financial statements are by nature tentative to a
certain degree; judgments are used to estimate interim amounts for items
that are normally determinable only on an annual basis. The financial
information as of December 31, 1995 is derived from the Company's audited
financial statements.
The interim period information presented herein includes normally recurring
adjustments which are, in the opinion of the management of the Company,
only necessary for a fair statement of the results of the respective
interim periods. Results of operations for interim periods are not
necessarily indicative of results to be expected for an entire year.
Net income per common and common equivalent share is calculated by dividing
net income by the weighted average number of common stock and common stock
equivalents outstanding during the period. Common stock equivalents are
calculated using the treasury stock method, and consist of dilutive shares
issuable upon the exercise of outstanding common stock options.
(2) INVENTORIES
Inventories, consisting principally of computer hardware, electronic sub-
assemblies and test equipment, are valued at standard costs which
approximate the lower of cost (first-in, first-out) or market. Costs
utilized for inventory valuation purposes include material, labor and
manufacturing overhead. Inventories consists of the following:
June 30, December 31,
1996 1995
------ -----------
Raw Materials. . . . . . . $3,479 $2,613
Work-in-progress . . . . . 2,664 2,945
Finished Goods . . . . . 583 272
------ -----------
$6,726 $5,830
------ -----------
------ -----------
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1996 AND 1995
NET SALES. Net sales of $12.6 million for the three months ended June 30,
1996 increased 28% from $9.8 million recorded during the three months ended
June 30, 1995. The increase in net sales included an increase of 25% in
product sales from $8.1 million in the second quarter of 1995 to $10.1
million for second quarter of 1996. Service and other sales increased 43%
from $1.8 million during the three months ended June 30, 1995 to $2.5 million
for the three months ended June 30, 1996. The increase in product sales
reflects the introduction of the Company's ATS FT Test Stations, which
contributed 46% of net sales for the second quarter of 1996, and continued
sales of the Company's ATS Blazer and XL Test Station products. In addition,
the Company shipped its first MTS FT Test Station during the second quarter
of 1996. The increase in service and other sales resulted primarily from
revenues generated by refurbishment services and Virtual Test Software
related services. During the second quarter of 1996, sales of Virtual Test
Software and related services amounted to 8% of net sales, compared to 5% of
net sales during the second quarter of 1995.
Sales to the Company's largest customer, Intel, amounted to 41% of net sales
during the second quarter of 1996. Sales to Tokyo Electron Limited (the
Company's largest distributor) during the second quarter of 1996 amounted to 12%
of net sales. Customers individually providing less than 10% of net sales
generated the remaining 47% of the Company's net sales for the second quarter of
1996.
COST OF SALES. Total cost of sales increased 17% from $3.9 million in the
second quarter of 1995 to $4.5 million for the second quarter of 1996. Product
cost of sales increased 12% from $3.2 million for the three months ended June
30, 1995 to $3.6 million for the three months ended June 30, 1996, primarily due
to higher sales volume, partially offset by benefits from lower costs of
materials and manufacturing efficiencies. Service and other cost of sales
increased 40% from $627,000 in the second quarter of 1995 to $876,000 in the
second quarter of 1996, reflecting costs associated with refurbishment services
and increased labor costs associated with expanding Virtual Test Software
related services.
GROSS MARGIN. The Company's gross margin increased 35% from $6.0 million in
the three months ended June 30, 1995 to $8.1 million in the three months ended
June 30, 1996. As a percent of net sales, gross margin increased from 60.8% for
the second quarter of 1995 to 64.3% for the second quarter of 1996. Product
gross margin, as a percent of related sales, increased from 59.9% for the three
months ended June 30, 1995 to 63.9% for the three months ended June 30, 1996.
The increase in product gross margin resulted primarily from sales of higher
margin ATS FT Test Stations during the second quarter of 1996. Service and
other gross margin, as a percent of related sales, increased to 65.5% during the
second quarter of 1996, compared to 64.6% during the second quarter of 1995, due
primarily to higher gross margin on sales of Virtual Test Software related
services.
RESEARCH, DEVELOPMENT AND ENGINEERING. Expenses associated with research,
development and engineering increased 37% from $1.4 million in the three months
ended June 30, 1995 to $1.9 million for the three months ended June 30, 1996.
As a percentage of net sales, research, development and engineering expenses
increased from 14.3% in the second quarter of 1995 to 15.3% in the second
quarter of 1996. The increase was principally attributable to increased
expenditures related to enhancements of the Company's existing products and
development of future generation hardware and software products.
SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and administrative
expenses increased 14% from $3.4 million for the quarter ended June 30, 1995 to
$3.9 million for the quarter ended June 30, 1996. The increase was principally
attributable to higher commissions associated with increased net sales and
increased investment in the Company's selling and administrative functions. As
a percentage of net sales, selling, general and administrative expenses have
decreased from 34.4% of net sales in the three months ended June 30, 1995 to
30.6% of net sales in three months ended June 30, 1996. as a result of control
over increases in expenses as net sales increased.
7
<PAGE>
OTHER INCOME (EXPENSE), NET. Other expense, net amounted to $64,000 for the
three months ended June 30, 1996, while other income, net of $62,000 was
realized for the three months ended June 30, 1995. The change from the second
quarter of 1995 to the second quarter of 1996 was due principally to the non-
recurring write-off of expenses associated with the withdrawal of the Company's
proposed public stock offering during the second quarter of 1996, partially
offset by higher interest income generated on higher average cash and cash
equivalent balances.
INCOME TAXES. The Company's effective rate for Federal and state income taxes
was 38.4% and 38.0% for the three months ended June 30, 1995 and 1996,
respectively.
SIX MONTHS ENDED JUNE 30, 1996 AND 1995
NET SALES. Net sales of $24.5 million for the six months ended June 30, 1996
increased 30% from $18.9 million recorded during the six months ended June 30,
1995. The increase in net sales included an increase of 25% in product sales
from $15.4 million in the first half of 1995 to $19.2 million for first half of
1996. Service and other sales increased 49% from $3.6 million during the six
months ended June 30, 1995 to $5.3 million for the six months ended June 30,
1996. The increase in product sales was partially driven by the introduction of
the Company's ATS FT Test Stations, which contributed 37% of net sales for the
first half of 1996, and continued contribution by the Company's ATS Blazer and
XL Test Station products. The increase in service and other sales resulted
primarily from revenues generated by refurbishment services and Virtual Test
Software related services. During the first half of 1996, sales of Virtual Test
Software and related services amounted to 8% of net sales, compared to 4% of net
sales during the first half of 1995.
Sales to the Company's largest customer, Intel, amounted to 45% of net sales
during the first half of 1996. Sales to Tokyo Electron Limited (the Company's
largest distributor) during the first half of 1996 amounted to 11% of net sales.
Customers individually providing less than 10% of net sales generated the
remaining 44% of the Company's net sales for the first half of 1996.
COST OF SALES. Total cost of sales increased 19% from $7.5 million in the
first half of 1995 to $8.9 million for the first half of 1996. Product cost of
sales increased 11% from $6.2 million for the six months ended June 30, 1995 to
$6.8 million for the six months ended June 30, 1996, primarily due to higher
sales volume, partially offset by benefits from lower costs of materials and
manufacturing efficiencies. Service and other cost of sales increased 57% from
$1.3 million in the first half of 1995 to $2.1 million in the first half of
1996, driven by higher costs associated with refurbishment services and
increased labor costs associated with expanding Virtual Test Software related
services.
GROSS MARGIN. The Company's gross margin increased 37% from $11.4 million in
the six months ended June 30, 1995 to $15.6 million in the six months ended June
30, 1996. As a percent of net sales, gross margin increased from 60.4% for the
first half of 1995 to 63.6% for the first half of 1996. Product gross margin,
as a percent of related sales, increased from 59.8% for the six months ended
June 30, 1995 to 64.4% for the six months ended June 30, 1996. The increase in
product gross margin resulted primarily from sales of higher margin ATS FT Test
Stations during the first half of 1996. Service and other gross margin, as a
percent of related sales, decreased to 60.8% during the first half of 1996,
compared to 62.9% during the first half of 1995, due primarily to the impact of
the cumulative depreciation adjustment of the Company's service parts during the
first quarter of 1996, partially offset by improved cost efficiencies in the
Company's systems service business and higher gross margin associated with
increased sales of Virtual Test Software related services.
RESEARCH, DEVELOPMENT AND ENGINEERING. Research, development and engineering
expenses increased 44% from $2.7 million in the six months ended June 30, 1995
to $3.9 million for the six months ended June 30, 1996. As a percentage of net
sales, research, development and engineering expenses increased from 14.4% in
the first half of 1995 to 16.0% in the first half of 1996. This increase
resulted from increased spending related to enhancements of the Company's
existing products and development of future generation hardware and software
products.
8
<PAGE>
SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and administrative
expenses increased 11% from $6.6 million for the six months ended June 30, 1995
to $7.3 million for the six months ended June 30, 1996. The increase was
principally attributable to higher commissions driven by increased net sales and
increased investment in the Company's selling and administrative infrastructure.
As a percentage of net sales, selling, general and administrative expenses have
decreased from 34.6% of net sales in the six months ended June 30, 1995 to 29.8%
of net sales in six months ended June 30, 1996, as a result of control over
increases in expenses as net sales increased.
OTHER INCOME, NET. Other income, net decreased from $113,000 for the six
months ended June 30, 1995 to $37,000 for the six months ended June 30, 1996.
The decrease from the first half of 1995 to the first half of 1996 was due
principally to the non-recurring write-off of expenses associated with the
Company's withdrawn public stock offering during the second quarter of 1996,
partially offset by higher interest income generated on higher average cash and
cash equivalent balances.
INCOME TAXES. The Company's effective rate for Federal and state income taxes
was 38.3% and 38.0% for the six months ended June 30, 1995 and 1996,
respectively.
FUTURE OPERATING RESULTS
Future operating results will depend on many factors, including demand for the
Company's products, introduction of new products by the Company and by its
competitors, and industry acceptance of Virtual Test Software and new Test
Station products. There can be no assurance that the Company's net sales will
grow or that such growth will be sustained in future periods or that the Company
will remain profitable in any future period.
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 1996, the Company's principal sources of liquidity consisted of
cash and cash equivalents of $8.2 million, and funds available under an existing
bank line of credit of $10.0 million.
OPERATING ACTIVITIES. The Company's net cash provided by operating activities
was $2.4 million for both of the six-month periods ended June 30, 1995 and 1996.
Cash received from customers increased 16% from $18.4 million during the first
half of 1995 to $21.4 million during the first half of 1996. Combined payments
to suppliers and employees increased 15% from $15.9 million during the first six
months of 1995 to $18.3 million for the first six months of 1996. The increases
in cash received from customers and payments to suppliers and employees are
directly related to the increase in net sales and expenses associated with those
sales. The Company's trade receivables have increased by $3.7 million during
the first half of 1996 as a direct result of customer-requested timing of
shipments late in the second quarter of 1996. Inventories have increased by
$896,000 during the first six months of 1996 reflecting the increase in volume
of the ATS FT Test Stations introduced late in 1995, and the introduction of the
MTS Test Stations during the second quarter of 1996. The effect of the
increases in trade receivables and inventories has been partially offset by an
increase of $1.5 million in trade payables and accrued liabilities during the
first half of 1996, which has been primarily driven by higher costs and expenses
associated with the Company's increased sales volume.
INVESTING ACTIVITIES. During the first six months of 1996, cash flows for
investments in property, plant and equipment necessary to develop, maintain and
distribute new and existing Test Station and Virtual Test products amounted to
$2.2 million. Capitalization of software development costs of $377,000 during
the first half of 1996 was only slightly higher than related amortization of
$349,000. The Company occupied additional leased facility space to meet the
volume-driven demands for manufacturing and engineering capacity during the
second quarter of 1996. In addition, the Company is continuing with the
implementation of new information systems for the manufacturing, service and
finance functions during the second half of 1996.
FINANCING ACTIVITIES. During the first six months of 1996, the Company
realized noncash reductions in current tax liabilities of $1.4 million resulting
from the benefit of tax deductions of employee gains from the exercise of stock
9
<PAGE>
options of Cadence Design Systems, Inc. (Cadence), the Company's majority
shareholder. The benefit of the stock option deduction is reflected as an
increase to Additional Paid-in Capital in the accompanying Balance Sheets.
Since these options are related to Cadence stock, the employee gains are not
expenses of the Company for financial reporting purposes, and the exercise of
Cadence stock options does not increase the number of shares of the Company's
common stock outstanding. Additonally, the Company used non-cash capital lease
financing for equipment acquisitions totaling $298,000 during the first half of
1996.
The Company believes that cash on hand and cash generated from operations, as
well as cash available from the Company's existing $10.0 million short-term line
of credit, will be sufficient to meet the Company's working capital and other
cash requirements for at least the next twelve months. Company management is
continually evaluating opportunities to develop and introduce new products, and
to acquire complementary businesses or technologies. At present, the Company
has no significant understandings, commitments or agreements with respect to any
such opportunities. Any transactions resulting from such opportunities, if
consummated, may require the use of some of the Company's cash or necessitate
funding from other sources.
FORWARD LOOKING STATEMENTS
Results of operations for the periods discussed above should not be considered
indicative of the results to be expected for any future period, and fluctuations
in the operating results may also result in fluctuations in the market price of
the Company's common stock.
Like most high technology and high growth companies, the Company faces certain
business risks that could have adverse effects on the Company's results of
operations. Sales of the Company's products to a limited number of customers is
expected to continue to account for a significant percentage of net sales over
the foreseeable future. The Company purchases some key components from sole or
single source vendors for which alternative sources are not currently available.
The Company is dependent on high dollar customer orders, deriving a substantial
portion of its net sales from the sale of Test Stations which typically range in
price from $0.2 to $1.2 million per unit and may be priced as high as $1.8
million for a single unit. Significant delays of such orders, were they to
occur, could have an adverse impact on the Company's results of operations. In
addition, the Company's future operating results and financial condition are
subject to influences driven by rapid technological changes, a highly
competitive industry, a lengthy sales cycle, and the cyclical nature of general
economic conditions.
The Company has thus far avoided any material adverse impact on its results
of operations resulting from such risks. However, no assurance can be given
that such risks will not affect the Company's financial position or results
of operations in future periods.
Additionally, all statements in this Quarterly Report (Form 10-Q) relative to
future sales, gross margins, and expenses shall be considered to be "forward
looking statements" as defined by the Private Securities Reform Act of 1995.
These forward looking statements are subject to the above business and economic
risks the Company faces.
10
<PAGE>
PART II OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits (exhibit reference numbers refer to Item 601 of Regulation S-K)
27. Financial Data Schedule
(b) Reports on Form 8-K:
One report on Form 8-K was filed on June 24, 1996 and is incorporated
herein by reference. The contents of the report are summarized below:
The registrant reported that it had suspended the public offering to
sell 2,525,000 shares of the Company's Common Stock due to weakness
in the stock prices for companies in the high technology industry.
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 on August 13, 1996.
INTEGRATED MEASUREMENT SYSTEMS, INC.
(Registrant)
/s/ Sar Ramadan
-----------------------------
Sar Ramadan
On behalf of the Registrant,
and as Principal Financial Officer
11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
INCOME STATEMENT FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 1996 AND THE
BALANCE SHEET AS OF JUNE 30, 1996, 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-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 8,172
<SECURITIES> 0
<RECEIVABLES> 12,204
<ALLOWANCES> 340
<INVENTORY> 6,726
<CURRENT-ASSETS> 29,721
<PP&E> 14,599
<DEPRECIATION> 8,611
<TOTAL-ASSETS> 39,762
<CURRENT-LIABILITIES> 8,929
<BONDS> 108
0
0
<COMMON> 67
<OTHER-SE> 30,550
<TOTAL-LIABILITY-AND-EQUITY> 39,762
<SALES> 19,242
<TOTAL-REVENUES> 24,527
<CGS> 6,845
<TOTAL-COSTS> 8,916
<OTHER-EXPENSES> 11,221
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 14
<INCOME-PRETAX> 4,427
<INCOME-TAX> 1,683
<INCOME-CONTINUING> 2,744
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,744
<EPS-PRIMARY> .38
<EPS-DILUTED> .38
</TABLE>
