Selected Quarterly Results of Operations
The following tables set forth statement of operations data for each of the
eight consecutive quarters ended January 31, 2000. This information has been
derived from our unaudited financial statements. The unaudited financial
statements have been prepared substantially on the same basis as the audited
financial statements appearing elsewhere in this prospectus and include all
adjustments, consisting only of normal recurring adjustments, that we consider
necessary for a fair presentation of such information. You should read this
information in conjunction with our financial statements and the related notes
elsewhere in this prospectus. The operating results for any quarter are not
necessarily indicative of the operating results of any future period.
<TABLE>
<CAPTION>
Three Months Ended
-----------------------------------------------------------------------
Apr. 30, July 31, Oct. 31, Jan. 31, Apr. 30, July 31, Oct. 31, Jan. 31,
1998 1998 1998 1999 1999 1999 1999 2000
-------- -------- -------- -------- -------- -------- -------- --------
(In thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales................... $4,261 $4,554 $4,721 $5,093 $5,363 $6,069 $6,792 $7,607
Cost of sales........... 1,527 1,517 1,460 1,627 1,888 2,076 2,347 2,572
------ ------ ------ ------ ------ ------ ------ ------
Gross profit............ 2,734 3,037 3,261 3,466 3,475 3,993 4,445 5,035
Research and
development............ 1,079 1,194 1,178 1,255 1,299 1,405 1,559 1,752
Selling, general and
administrative......... 998 1,168 1,336 1,446 1,703 1,959 2,159 2,303
Interest income
(expense), net......... (107) (83) (103) (57) (66) (43) (70) (92)
------ ------ ------ ------ ------ ------ ------ ------
Income before income
taxes.................. 550 592 644 708 407 586 657 888
Income tax provision.... 204 219 243 261 156 225 247 336
------ ------ ------ ------ ------ ------ ------ ------
Net income.............. $ 346 $ 373 $ 401 $ 447 $ 251 $ 361 $ 410 $ 552
====== ====== ====== ====== ====== ====== ====== ======
<CAPTION>
Three Months Ended
-----------------------------------------------------------------------
Apr. 30, July 31, Oct. 31, Jan. 31, Apr. 30, July 31, Oct. 31, Jan. 31,
1998 1998 1998 1999 1999 1999 1999 2000
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
As a percentage of
sales:
Sales................... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of sales........... 35.8 33.3 31.0 31.9 35.2 34.2 34.6 33.8
Gross profit............ 64.2 66.7 69.0 68.1 64.8 65.8 65.4 66.2
Research and
development............ 25.3 26.2 25.0 24.6 24.2 23.2 23.0 23.0
Selling, general and
administrative......... 23.4 25.7 28.3 28.4 31.8 32.3 31.8 30.3
Interest income
(expense), net......... (2.6) (1.8) (2.2) (1.2) (1.2) (.7) (1.0) (1.2)
Income before income
taxes.................. 12.9 13.0 13.5 13.9 7.6 9.6 9.6 11.7
Income tax provision.... 4.8 4.8 5.0 5.2 2.9 3.7 3.6 4.4
------ ------ ------ ------ ------ ------ ------ ------
Net income.............. 8.1% 8.2% 8.5% 8.7% 4.7% 5.9% 6.0% 7.3%
====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
Our quarterly sales increased throughout fiscal 1998 and fiscal 1999
primarily as a result of increased sales to international customers. Cost of
sales as a percentage of sales varied in each quarter depending on the mix of
sales between customers. Operating expenses increased in each quarter primarily
as a result of the increase in the number of employees in research and
development, sales and marketing, as well as finance and administrative
functions. The increased headcount resulted from our need to support our sales
growth. A large portion of our expenses, including rent and salaries, are set
based upon expected future sales. Accordingly, if sales are below expectations,
operating results may be adversely affected.
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