STOCKREPORTS		 Phoenix Technologies Ltd. NASDAQ Symbol PTEC
03-MAR-97 Industry:
Data Processing		 Summary: This company designs, develops and markets system software and related applications software products for personal computer systems.

Recent Price 17.81
52 Wk Range 19.88 - 12.75		 Yield Nil
12-Mo. P/E 22.8

Quantitative Evaluation:
Outlook (1 Lowest - 5 Highest)
NA
Fair Value
NA
Risk
MEDIUM
Earn/Div Rank
B-
Technical Evaluation:
BEARISH since 12/96
Rel. Strength Rank (1 Lowest - 99 Highest)
77
Insider Activity
Neutral

Business Profile 21-JAN-97

This company's system-level software allows PC OEMs to reduce time to market, mitigate development risks and lower support costs. Its consumer software increases the functionality and ease-of-use of PCs. Strategic supplier and development partnerships with industry giants such as Dell Computer, Compaq, Microsoft, Intel and Hewlett-Packard assure cutting-edge technology and market access for PTEC's products. PTEC is establishing itself as a provider of software for the emerging special-purpose PC market, which includes hand-held organizers, smart phones and Internet terminals. During the first quarter of FY 97 (Sep.), Phoenix entered into an alliance with Intel Corp. whereby Intel will qualify and accept the PhoenixBIOS 4.0 Release 6 for its motherboard production.

Operation Review 21-JAN-97

Revenues in the first quarter of FY 97 advanced 39%, year to year, on 49% growth in license fee revenue reflecting accelerating NoteBIOS sales and gains in sales for the PICO line for information appliances. Gross margins widened but were outweighed by significantly higher R&D expenses; operating income rose 36%. Following taxes at 32.0%, versus 27.6%, and other income versus other expense, net income jumped 54%, to $3,217,000 ($0.18 a share, based on 12% more shares), from $2,092,000 ($0.13).

Stock Performance 28-FEB-97n

In the past 30 trading days, PTEC's shares have increased 8%, compared to a 2% rise in the S&P 500. Average trading volume for the past five days was 144,080 shares, compared with the 40-day moving average of 131,260 shares.

Key Stock Statistics

Dividend Rate/Share Nil
Shs. outstg. (M) 16.8
Avg. daily vol. (M) 0.164
Tang. Bk. Value/Share 5.38
Beta 1.45
Shareholders 300
Market cap. (B) $0.299
Inst. holdings 52%
Value of $10,000 invested 5 years ago:$ 19,520

Fiscal Year Ending Sep. 30

Revenue (Million $)
1997 1996 1995 1994 1993 1992
Q1 20.58 14.81 11.10 20.10 18.84 NA
Q2 NA 17.94 12.20 22.90 17.00 NA
Q3 NA 18.65 13.30 20.90 19.81 NA
Q4 NA 20.75 13.30 22.30 20.61 18.98
Year NA 72.14 49.94 86.20 76.26 NA

Earning Per Share ($)
1997 1996 1995 1994 1993 1992
Q1 0.18 0.13 0.11 0.11 0.08 0.04
Q2 NA 0.15 0.12 -0.03 0.09 Nil
Q3 NA 0.13 0.13 0.16 0.08 0.07
Q4 NA 0.11 0.21 1.11 -0.06 0.05
Year NA 0.52 0.56 1.37 0.19 0.16

Dividend Data: No cash dividends have been paid. The company intends to retain earnings for use in its business and does not expect to pay cash dividends for the foreseeable future.

Business Summary 21-JAN-97

Phoenix Technologies Ltd. designs, develops and markets system software and related applications software products for personal computer (PC) systems. Its core business is divided into two related product groups: PC system-level software and PC application software.

The PC system-level software product group develops and markets software products that enable PC, peripheral and system board manufacturers to integrate existing and emerging industry standards into PC platforms. Products include system BIOS (Basic Input/Output System) products and configuration management software solutions, new system core logic chipsets, video subsystems, keyboard controllers, power management chipsets, PCMCIA PC cards, flash read-only memory chips and other emerging PC technologies. The company also offers products for advanced portable systems and embedded PC systems such as advanced hand-held terminals, intelligent peripherals and personal communicators.

PC system-level software accounted for 78% of revenues from continuing operations in FY 96 (Sep.).

The PC applications software product area defines, acquires and markets software designed to bring new functionality to the consumer and small and home office PC environment. Products are marketed through the original equipment manufacturer (OEM) channel. The OEM Consumer Software Group was designed during FY 94 to assist OEMs in integrating consumer applications with their products for sale to end-users.

The OEM applications software product line consists of Phoenix Muse, a Microsoft Windows 95 user interface development product, and the Phoenix Telephony Suite.

In August 1996, Phoenix acquired Virtual Chips, Inc., a supplier of synthesizable cores and services for interconnect standards. Synthesizable cores are prepackaged circuit descriptions used as building blocks for system-level application specific integrated circuits (or ASICs).

R&D costs were 32% of total revenue in FY 96, versus 25% in FY 95. Foreign customers accounted for 55%, 52% and 44% of sales in FY 96, FY 95 and FY 94, respectively.

Important Developments

Jan. '97 Phoenix acquired Nihon Joho Kenkyujo K.K. (NJK), a Tokyo-based software company, for $1.4 million in cash. NJK will provide software and services to customers of Phoenix's PICO product line. The Phoenix PICO product line provides software foundations for information appliances to manufacturers of industrial, handheld and consumer appliances. Some Japanese customers for these products include Fujitsu, Hitachi, Matsushita, Mitsubishi, NEC and Seiko Instruments. NJK had revenue for 1996 equivalent to approximately $1 million.

Capitalization

Long Term Obligations: $6,874,000 (12/96).

Per Share Data ($)
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
Tangible Bk. Val. 5.38 3.62 2.94 2.31 2.23 2.19 2.31 4.59 5.70 NA
Cash Flow 0.81 0.79 1.52 0.34 0.29 0.05 -1.86 -0.59 0.95 NA
Earnings 0.52 0.58 1.37 0.19 0.16 -0.13 -2.26 -0.79 0.86 NA
Dividends Nil Nil Nil Nil Nil Nil Nil Nil Nil NA
Payout Ratio Nil Nil Nil Nil Nil Nil Nil Nil Nil NA
Prices - High 20 3/8 14 3/8 8 1/8 7 1/8 11 10 5 3/8 18 3/4 17 1/2 NA
- Low 12 1/2 6 1/8 4 3 1/2 3 1/2 2 5/8 1 1/4 3 1/8 12 NA
P/E Ratio - High 39 25 6 38 69 NM NM NM 20 NA
- Low 24 11 3 18 22 NM NM NM 14 NA

Income Statement Analysis (Million $)
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
Revs. 72.1 49.9 86.2 76.3 71.0 52.1 35.6 52.6 44.8 NA
Oper. Inc. 15.7 11.3 13.3 7.9 6.3 2.9 -11.7 -2.3 13.1 NA
Depr. 5.1 3.0 2.1 2.0 1.8 1.9 4.0 1.9 0.8 NA
Int. Exp. Nil Nil 0.1 0.0 0.1 0.1 0.1 0.6 0.3 NA
Pretax Inc. 12.9 10.3 25.7 4.3 4.2 1.1 -21.7 -8.5 12.7 NA
Eff. Tax Rate 30% 14% 25% 40% 48% NM NM NM 38% NA
Net Inc. 9.0 8.8 19.2 2.6 2.2 -1.4 -22.7 -7.7 7.9 NA

Balance Sheet & Other Fin. Data (Million $)
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
Cash 57.0 32.9 33.9 8.1 12.8 18.3 11.1 15.9 32.0 NA
Curr. Assets 78.8 48.7 52.3 33.8 32.5 32.6 28.6 49.9 54.5 NA
Total Assets 114 62.4 63.2 51.6 42.3 40.1 37.7 72.3 66.1 NA
Curr. Liab. 15.3 11.9 23.7 18.5 13.8 15.5 13.1 24.0 11.7 NA
LT Debt Nil Nil Nil Nil 0.1 0.2 0.3 0.4 0.2 NA
Common Eqty. 89.6 50.4 39.4 31.5 27.6 23.5 23.3 45.7 53.5 NA
Total Cap. 98.1 50.4 39.4 31.5 27.7 23.7 23.6 46.1 53.6 NA
Cap. Exp. 4.3 1.6 1.8 1.8 1.8 1.1 1.8 7.2 3.0 NA
Cash Flow 14.1 11.9 21.3 4.6 4.0 0.5 -18.6 -5.7 8.7 NA

Curr. Ratio 5.2 4.1 2.2 1.8 2.4 2.1 2.2 2.1 4.6 NA
% LT Debt of Cap. Nil Nil NM NM 0.4 0.9 1.5 0.9 0.3 NA
% Net Inc.of Revs. 12.5 17.7 22.3 3.4 3.1 NM NM NM 17.5 NA
% Ret. on Assets 10.2 14.0 33.0 5.4 4.9 NM NM NM NA NA
% Ret. on Equity 12.9 19.6 53.4 8.6 8.0 NM NM NM NA NA

Data as orig. reptd.; bef. results of disc. opers. and/or spec. items. Per share data adj. for stk. divs. as of ex-div. date. E-Estimated. NA-Not Available. NM-Not Meaningful. NR-Not Ranked.

Office--311 East Plumeria Drive, San Jose, California 95134 Tel--(408) 570-1000. Website--http://www.ptltd.com Chrmn--R. D. Fisher. Pres & CEO--J. Kay. VP-Fin, CFO & Treas--R. J. Riopel. VP & Secy--S. C. Neely. Dirs--C. Federman, L. G. Finch, R. D. Fisher, L. E. Hansche, J. Kay, A. P. Morris. Transfer Agent & Registrar--ChaseMellon Shareholder Services, Ridgefield Park, NJ. Incorporated--in Massachusetts in 1979; reincorporated in Delaware in 1986. Empl-- 490. S&P Analyst: Aydin Tuncer


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