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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996
OR
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission file number: 0-24756
EPIC DESIGN TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA 77-0135608
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
310 NORTH MARY AVENUE
SUNNYVALE, CALIFORNIA 94086
(Address of principal executive offices)
TELEPHONE NUMBER (408) 988-2997
(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
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As of June 30, 1996 there were 12,812,122 shares of the Registrant's
Common Stock outstanding.
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EPIC DESIGN TECHNOLOGY, INC.
FORM 10-Q
INDEX
Page No.
PART I - FINANCIAL INFORMATION
ITEM 1 - Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets - 3
June 30, 1996 and September 30, 1995
Condensed Consolidated Statements of Operations 4
For the three months and nine months ended
June 30, 1996 and 1995
Condensed Consolidated Statements of Cash Flows 5
For the nine months ended June 30, 1996 and 1995
Notes to Condensed Consolidated Financial Statements 6 - 7
ITEM 2 - Management's Discussion and Analysis of Financial Condition
and Results of Operations 8 -14
PART II -OTHER INFORMATION
ITEM 6 - Exhibits and Reports on Form 8-K 15
Signatures 16
Index of Exhibit 17
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PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
EPIC DESIGN TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(Unaudited)
JUNE 30, SEPTEMBER 30,
1996 1995 (1)
-------- -------------
ASSETS
Current assets:
Cash and equivalents $ 14,127 $ 11,247
Short-term investments 22,578 16,671
Accounts receivable (net of allowances of $146 and $79) 5,300 2,937
Prepaid expenses and other assets 963 607
Deferred income taxes 978 978
-------- --------
Total current assets 43,946 32,440
Property and equipment - net 4,012 2,337
Other assets 791 1,004
-------- --------
Total assets $ 48,749 $ 35,781
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 839 $ 878
Income taxes payable 209 414
Accrued liabilities 5,401 4,529
Deferred revenue and customer deposits 4,038 3,035
-------- --------
Total current liabilities 10,487 8,856
-------- --------
Shareholders' equity:
Convertible preferred stock, no par value: 5,000,000 shares
authorized; none outstanding -- --
Common stock, no par value: 20,000,000 shares authorized; 12,812,122
and 12,686,205 shares issued and outstanding 29,672 24,864
Unrealized gain (loss) on investments (22) 10
Deferred stock compensation (133) (203)
Retained earnings 8,745 2,254
-------- --------
Total shareholders' equity 38,262 26,925
-------- --------
Total liabilities and shareholders' equity $ 48,749 $ 35,781
======== ========
See accompanying notes to Condensed Consolidated Financial Statements
(1) The information in this column was derived from the Company's
audited consolidated balance sheet as of September 30, 1995.
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EPIC DESIGN TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
----------------------- -----------------------
1996 1995 1996 1995
-------- -------- -------- --------
Revenue:
License $ 9,260 $ 5,763 $ 25,080 $ 13,963
Service 2,171 1,041 6,312 2,811
-------- -------- -------- --------
Total revenue 11,431 6,804 31,392 16,774
-------- -------- -------- --------
Costs and expenses:
Cost of license 547 357 1,307 894
Cost of service 443 276 1,244 684
Sales and marketing 3,253 2,378 9,630 6,008
Research and development 2,836 1,550 7,366 3,848
General and administrative 854 620 2,374 1,688
Purchased in-process technology -- 3,261 -- 3,261
-------- -------- -------- --------
Total operating expenses 7,933 8,442 21,921 16,383
-------- -------- -------- --------
Income (loss) from operations 3,498 (1,638) 9,471 391
Interest income - net 270 240 832 581
-------- -------- -------- --------
Income (loss) before income taxes 3,768 (1,398) 10,303 972
Provision for income taxes 1,394 652 3,812 1,482
-------- -------- -------- --------
Net income (loss) $ 2,374 $ (2,050) $ 6,491 $ (510)
======== ======== ======== ========
Net income (loss) per share $ 0.17 $ (0.17) $ 0.47 $ (0.05)
======== ======== ======== ========
Shares used in per share computation 13,851 11,722 13,804 10,996
======== ======== ======== ========
See accompanying notes to Condensed Consolidated Financial Statements
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EPIC DESIGN TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands,unaudited)
NINE MONTHS ENDED
JUNE 30,
------------------------
1996 1995
-------- --------
Cash Flows from Operating Activities:
Net income (loss) $ 6,491 $ (510)
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities:
Depreciation and amortization 1,369 616
Purchased in-process technology -- 3,261
Amortization of deferred stock compensation 70 122
Changes in assets and liabilities:
Accounts receivable (2,363) (838)
Prepaid expenses and other assets (356) (577)
Accounts payable (39) 19
Income taxes payable 2,678 (748)
Accrued liabilities 872 1,438
Deferred revenue and customer deposits 1,003 612
-------- --------
Net cash provided by operating activities 9,725 3,395
-------- --------
Cash Flows from Investing Activities:
Purchases of short-term investments (32,397) (20,805)
Maturities of short-term investments 26,458 4,743
Purchases of property and equipment, net (2,816) (962)
Cash received in business acquisition -- 64
Other assets (15) 336
-------- --------
Net cash used in investing activities (8,770) (16,624)
-------- --------
Cash Flows from Financing Activities:
Principal payments under capital lease obligations -- (6)
Proceeds from sales of common stock, net 1,925 17,973
-------- --------
Net cash provided by financing activities 1,925 17,967
-------- --------
Net increase in cash and equivalents 2,880 4,738
Cash and equivalents, beginning of period 11,247 2,729
-------- --------
Cash and equivalents, end of period $ 14,127 $ 7,467
======== ========
Supplemental disclosure of cash flow information --
Cash paid during the period for :
Income taxes $ 421 $ 2,148
-------- --------
Supplemental schedule of non cash investing activities:
Fair value of assets acquired, including in process technology $ -- $ 4,573
Common stock and stock options issued in the acquisition -- (3,617)
-------- --------
Liabilities assumed $ -- $ 956
======== ========
See accompanying notes to Condensed Consolidated Financial Statements
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EPIC DESIGN TECHNOLOGY, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
The unaudited condensed consolidated financial statements included
herein have been prepared by the Company pursuant to the rules and regulations
of the Securities and Exchange Commission. Certain information or footnote
disclosure normally included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted pursuant
to such rules and regulations. The statements reflect all adjustments (only of a
normal and recurring nature) which are, in the opinion of management, necessary
to a fair statement of the results for the interim periods presented. These
financial statements should be read in conjunction with the Company's audited
consolidated financial statements as included in the Company's Annual Report on
Form 10-K for fiscal year 1995 as filed with the Commission on December 20,
1995. The interim results presented herein are not necessarily indicative of the
results of operations that may be expected for the full fiscal year ending
September 30, 1996, or any other future periods.
2. Accounting for Stock-Based Compensation
In October 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" (SFAS No. 123). The new standard defines a fair value method of
accounting for stock options and other equity instruments, such as stock
purchase plans. Under this method, compensation cost is measured based on the
fair value of the stock award when granted and is recognized as an expense over
the service period, which is usually the vesting period. This standard will be
effective for the Company beginning October 1, 1996 and requires measurement of
awards made beginning October 1, 1995.
The new standard permits companies to continue to account for equity
transactions with employees under existing accounting rules, but requires
disclosure in a note to the financial statements of the pro forma net income and
earnings per share as if the Company had applied the new method of accounting.
The Company intends to implement these disclosure requirements for its employee
stock option plans for the fiscal year beginning October 1, 1996. Based on the
Company's current use of equity instruments, adoption of the new standard will
not impact reported net income or net income per share, and will have no effect
on the Company's cash flow.
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3. Net Income Per Share
Net income per share is based on the weighted average number of common
and dilutive common equivalent shares outstanding during the periods. Common
equivalent shares consist of options to purchase common stock. On September 13,
1995, the Board of Directors approved a two-for-one stock split of the Company's
common stock effective November 15, 1995. All references in the consolidated
financial statements with regard to shares, per share amounts and share prices
have been adjusted for the stock split.
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EPIC DESIGN TECHNOLOGY, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Overview
The Company develops, markets and supports a family of simulation and
analysis software tools that helps integrated circuit (IC) designers better
manage the timing, reliability and power characteristics of IC designs. The
Company was founded in 1986 and licensed its first product, TimeMill(TM), in
August 1987. The Company began licensing PathMill(TM) in June 1989,
PowerMill(TM) in March 1992, Vertue(TM) in March 1994, RailMill(TM) in May 1995,
Arcadia(TM) in July 1995, and its latest product, AMPS(TM), in January 1996.
Substantially all of the Company's license revenue to date has been derived from
the licensing of Arcadia, PathMill, PowerMill, RailMill and TimeMill. The
Company also derives service revenue primarily from maintenance agreements which
provide customers access to product enhancements, training and customer support.
Most of the Company's customers have purchased annual maintenance contracts on
initial licenses and have renewed such contracts upon expiration.
Most of the Company's products are based upon a single set of core
software technologies, and the licensing and support of all products are
expected to account for substantially all of the Company's revenue for the
foreseeable future. Market acceptance of the Company's products by existing and
new customers is critical to the Company's future success. There can be no
assurance that the markets for which the Company's products are best suited will
develop or, if such markets do develop, that the Company's products will achieve
the market acceptance required to maintain revenue growth and continued
profitability in the future.
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Results of Operations
The following table sets forth, for the periods indicated, certain
statement of operations data of the Company expressed as a percentage of total
revenue.
Three Months Ended Nine Months Ended
---------------------- ----------------------
June 30, June 30, June 30, June 30,
1996 1995 1996 1995
------ ------ ------ ------
Revenue:
License 81.0% 84.7% 79.9% 83.2%
Service 19.0 15.3 20.1 16.8
------ ------ ------ ------
Total revenue 100.0 100.0 100.0 100.0
------ ------ ------ ------
Costs and expenses:
Cost of license 4.8 5.2 4.2 5.3
Cost of service 3.9 4.1 4.0 4.1
Sales and marketing 28.4 35.0 30.6 35.8
Research and development 24.8 22.8 23.4 22.9
General and administrative 7.5 9.1 7.6 10.1
Purchased in-process tech. -- 47.9 -- 19.4
------ ------ ------ ------
Total operating expenses 69.4 124.1 69.8 97.6
------ ------ ------ ------
Income (loss) from
operations 30.6 (24.1) 30.2 2.4
Interest income 2.4 3.5 2.6 3.5
------ ------ ------ ------
Income (loss) before income
taxes 33.0 (20.6) 32.8 5.9
Provision for income taxes 12.2 9.5 12.1 8.9
------ ------ ------ ------
Net income (loss) 20.8% (30.1)% 20.7% (3.0)%
------ ------ ------ ------
Revenue. Revenue consists primarily of fees for licenses of the
Company's software products, maintenance and customer support. The Company
recognizes revenue from software licenses after shipment of the products and
fulfillment of acceptance terms, if any, and when no significant contractual
obligations remain outstanding. When the Company receives payment prior to
shipment or fulfillment of significant vendor obligations, such payments are
recorded as deferred revenue and customer deposits and are recognized as revenue
upon shipment or fulfillment of significant vendor obligations. Costs related to
insignificant vendor obligations for post-contract customer support are accrued
upon recognition of the license revenue. Maintenance revenue is deferred and
recognized ratably over the term of the maintenance agreement, which is
typically one year. Revenue from customer training, support and other services
is recognized as the service is performed. Total revenue in the three months
ended June 30, 1996 increased by 68.0% to $11.4 million from $6.8 million in the
three months ended June 30, 1995. Total
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revenue in the nine months ended June 30, 1996 increased by 87.1% to $31.4
million from $16.8 million in the nine months ended June 30, 1995.
License revenue in the three months ended June 30, 1996 increased by
60.7% to $9.3 million from $5.8 million in the three months ended June 30, 1995.
License revenue in the nine months ended June 30, 1996 increased by 79.6% to
$25.1 million from $14.0 million in the nine months ended June 30, 1995. The
increases in license revenue were primarily due to increases in number of
licenses of Arcadia and PowerMill, and to a lesser extent, PathMill and
RailMill. To date, price increases have not been a material factor in the
Company's revenue growth.
Service revenue for the three months ended June 30, 1996 increased by
108.6% to $2.2 million from $1.0 million in the three months ended June 30,
1995. Service revenue in the nine months ended June 30, 1996 increased by 124.5%
to $6.3 million from $2.8 million in the nine months ended June 30, 1995. The
increases in service revenue were primarily attributable to maintenance
contracts in connection with the continued growth of the installed base of
customers licensing the Company's products. Most of the Company's customers have
purchased annual maintenance contracts on initial licenses and have renewed such
contracts upon expiration. The Company also generated $259,000 or 11.9% of
service revenue in the three months ended June 30, 1996 and $1,175,000 or 18.6%
of service revenue in the nine months ended June 30, 1996 from consulting and
training revenues which had historically been minimal. As a result, service
revenue as a percentage of total revenue increased to 20.1% in the nine months
ended June 30, 1996 from 16.8% in the nine months ended June 30, 1995.
International license and service revenue accounted for 46.2% and 34.0%
of total revenue in the three months ended June 30, 1996 and 1995, respectively.
The increase in international revenue as a percentage of total revenue in the
three months ended June 30, 1996 was primarily attributable to the large number
of orders received from Japan. International license and service revenue
accounted for 42.8% and 37.6% of total revenue in the nine months ended June 30,
1996 and 1995, respectively. The Company expects that international license and
service revenues will continue to account for a significant portion of its
revenues in the future. License and service revenue from Marubeni, the Company's
exclusive distributor in Japan, accounted for 25.2% and 17.7% of the total
revenue in the three months ended June 30, 1996 and 1995, respectively. For the
nine months ended June 30, 1996 and 1995, Marubeni accounted for 24.4% and 15.8%
of the total revenue, respectively. No other customer or distributor accounted
for more than 10% of total revenue during any of these periods.
Cost of Revenue. Cost of license revenue includes third party software
license royalties, warranty, documentation and other production costs related to
the licensing of the Company's products. Cost of license revenue as a percentage
of total revenue decreased to 4.8% in the three months ended June 30, 1996 from
5.2% in the three months ended June 30, 1995. Cost of license revenue as a
percentage of total revenue decreased to 4.2% in the nine months ended June 30,
1996 from 5.3% in the nine months
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ended June 30, 1995. The decreases in cost of license revenue as a percentage of
total revenue were primarily due to total revenues increasing at a faster rate
than the increases in revenues from third party software products which require
royalty payment from the Company..
Cost of service revenue as a percentage of total revenue remained
relatively constant at 3.9% in the three months ended June 30, 1996 compared to
4.1% in the three months ended June 30, 1995. Cost of service revenue as a
percentage of total revenue was 4.0% in the nine months ended June 30, 1996
compared to 4.1% in the nine months ended June 30, 1995.
Sales and Marketing. Sales and marketing expenses consist of salaries,
commissions paid to internal sales and marketing personnel and certain
distributors, promotional costs and related operating expenses. Sales and
marketing expenses increased by 36.8% to $3.3 million in the three months ended
June 30, 1996 from $2.4 million in the three months ended June 30, 1995. Sales
and marketing expenses increased by 60.3% to $9.6 million in the nine months
ended June 30, 1996 from $6.0 million in the nine months ended June 30, 1995.
Sales and marketing expenses increased as the Company continued to expand its
worldwide direct sales and support organization, increased efforts in various
marketing activities, and incurred higher commissions associated with increased
revenue. The number of sales and marketing personnel increased from 51 at June
30, 1995 to 79 at June 30, 1996. As a percentage of total revenue, sales and
marketing expenses decreased to 28.4% in three months ended June 30, 1996 from
35.0% in the three months ended June 30, 1995; and decreased to 30.6% in the
nine months ended June 30, 1996 from 35.8% in the nine months ended June 30,
1995. The decreases were due to total revenues increasing at a rate faster than
the increases in sales and marketing expenses.
Research and Development. Research and development expenses include all
costs associated with the development of new products and enhancements to
existing products. Research and development expenses increased by 83.0% to $2.8
million in the three months ended June 30, 1996 from $1.6 million in the three
months ended June 30, 1995. Research and development expenses increased by 91.4%
to $7.4 million in the nine months ended June 30, 1996 from $3.8 million in the
nine months ended June 30, 1995. The increases in expenses resulted from the
continued investment in the number of research and development personnel which
grew from 50 at June 30, 1995 to 81 at June 30, 1996. As a percentage of total
revenue, research and development expenses increased to 24.8% in the three
months ended June 30, 1996 from $22.8% in the three months ended June 30, 1995;
and increased to 23.4% in the nine months ended June 30, 1996 from 22.9% in the
nine months ended June 30, 1995. To maintain a competitive position in the EDA
market, the Company expects to continue to increase its investment in research
and development.
General and Administrative. General and administrative expenses
increased by 37.7% to $854,000 in the three months ended June 30, 1996 from
$620,000 in the three
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months ended June 30, 1995. General and administrative expenses increased by
40.6% to $2.4 million in the nine months ended June 30, 1996 from $1.7 million
in the nine months ended June 30, 1995. The increases were primarily
attributable to costs associated with new administrative personnel, professional
fees such as legal and accounting, and increases in general operating expenses.
As a percentage of total revenue, general and administrative expenses decreased
to 7.5% in the three months ended June 30, 1996 from 9.1% in the three months
ended June 30, 1995; and decreased to 7.6% in the nine months ended June 30,
1996 from 10.1% in the nine months ended June 30, 1995.
Purchased in-process technology. As of June 30, 1995, the Company
substantially completed its acquisition of Archer Systems, Inc. ("Archer"),
through a merger (the "Merger") with and into its wholly-owned subsidiary. The
Company exchanged a total of 260,484 shares of its common stock and options to
purchase common stock of the Company for all of the outstanding shares of the
common stock and options to purchase common stock of Archer. For accounting
purposes, the Merger was accounted for as a purchase and the Company recorded
the estimated fair market values of the assets purchased and liabilities assumed
as of June 30, 1995, and, as a result, incurred a one-time charge of purchased
in-process technology of $3.3 million, or 47.9% of the total revenue in the
third quarter of fiscal 1995.
Income Taxes. The provision for income taxes as a percentage of income
before taxes increased to 37.0% in the three months and nine months ended June
30, 1996 from 35.0% in the three months and nine months ended June 30, 1995,
excluding purchased in-process technology which was not tax deductible. The
increases were primarily due to the expiration of federal research and
experimentation credits. These percentages are less than the federal and state
combined statutory rate of approximately 40.0% primarily due to tax exempt
interest income and the establishment of a Foreign Sales Corporation (FSC) and,
for fiscal 1995, research and experimentation credits.
Quarterly Operating Results May Fluctuate; Competition and Dependence
on Semiconductor Industry. The Company's quarterly results have in the past and
may in the future vary significantly due to a number of factors, including the
timing of customer design and development projects; the timing of significant
orders; the timing of expenditures in anticipation of product releases or
increased revenue; the timing of new product announcements by the Company and
its competitors; competition and pricing in the semiconductor industry; market
acceptance of new and enhanced versions of the Company's products; variations in
the mix of products the Company licenses; and variation in product development
or operating expenditures. Any unfavorable changes in these or other factors
could have a material adverse effect on the Company's business, financial
condition and results of operations.
The electronic design automation (EDA) software industry in which the
Company competes is highly competitive. Many of the Company's competitors have a
longer operating history, significantly greater financial, technical and
marketing resources, greater name recognition and larger installed customer
bases than the Company. In addition,
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numerous smaller and emerging companies continuously develop and bring new
products to the market and any of these companies could become a significant
competitor in the EDA market in the future. Increased competition has in the
past and may in the future result in price reductions, reduced margins and loss
of market share, all of which could have a material adverse effect on the
Company. The Company will be required to continuously develop products
comparable or superior to those developed and offered by competitors and to
adopt more quickly than competitors to new technologies, evolving industry
trends or customer requirements. There can be no assurance that the Company will
be able to compete successfully against current and future competitors or that
competitive pressures faced by the Company will not have a material adverse
effect on the Company's business, financial condition and results of operations.
The Company is dependent upon the semiconductor industry and, in
particular, new IC design projects. The semiconductor industry is highly
volatile due to rapid technological change, short product life cycles,
fluctuations in manufacturing capacity, and pricing and gross margin pressures.
The semiconductor industry periodically has experienced significant downturns,
often in connection with, or in anticipation of, declines in general economic
conditions during which the number of new design projects often decreases. The
Company's business, financial condition and results of operations have in the
past and may in the future reflect substantial fluctuations from
period-to-period as a consequence of semiconductor industry patterns and general
economic conditions.
Liquidity and Capital Resources
The Company has financed its operations to date through private and
public sales of equity securities and with cash from operations. Private sales
of equity securities have yielded approximately $2.1 million in cash. In
addition, on October 25, 1994, the Company completed its initial public offering
raising approximately $17.4 million of cash, net of expenses. Net cash provided
by operating activities was $9.7 million in the nine months ended June 30, 1996
which resulted primarily from net income and increases in income taxes payable,
accrued liabilities and deferred revenue and customer deposits, offset by
increases in accounts receivable and prepaid expenses.
Cash used in investing activities resulted primarily from the net
purchases of short-term investments and additions to property and equipment.
Although the Company does not believe its products infringe the
proprietary rights of any third parties, there can be no assurance that
infringement claims will not be asserted against the Company or its customers in
the future. The Company could incur substantial costs and diversion of
management resources with respect to the defense of such claims and parties
making such claims could secure substantial damages, each of which could have a
material adverse effect on the Company's financial condition and results of
operations.
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As of June 30, 1996, the Company had working capital of $33.5 million
and cash and equivalents and short-term investments of $36.7 million. As of June
30, 1996, the Company had no bank indebtedness and no long term commitments
other than minimum operating lease obligations. The Company believes that the
existing cash and equivalents and short-term investments and funds generated
from operations will provide the Company with sufficient funds to finance its
operations through at least the next 12 months. Thereafter, the Company may
require additional funds to support its working capital requirements or for
other purposes and may seek to raise such additional funds through public or
private equity financing or from other sources. No assurance can be given that
additional financing will be available or that, if available, such financing
will be obtainable on terms favorable to the Company or its shareholders.
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PART II - OTHER INFORMATION
ITEM 6: Exhibits and Reports on Form 8-K
(a) Exhibit
11.1 Statement regarding computation of per share earnings
(b) Reports on Form 8-K
The Company did not file any reports on form 8-K during the
three months ended June 30, 1996.
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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.
Dated: August 2, 1996
EPIC DESIGN TECHNOLOGY, INC.
(Registrant)
/s/ Tammy Liu
----------------------------------
Tammy Liu
Chief Financial Officer and Secretary
(Principal Financial and Accounting Officer)
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INDEX TO EXHIBITS
EXHIBIT
11.1 Statement regarding computation of per share earnings
27.1 Financial Data Schedule
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