DELAWARE		94-3065014
(State or other jurisdiction of		(I.R.S. Employer
Incorporation or organization)		Identification No.)

Class		Outstanding at July 31, 2002
Common Stock, $.001 par value		28,467,338 shares

				Page
PART I.		FINANCIAL INFORMATION
Item 1.		Financial Statements
		Condensed Consolidated Balance Sheets		3
		Condensed Consolidated Statements of Income		4
		Condensed Consolidated Statements of Cash Flows		5
		Notes To Condensed Consolidated Financial Statements		6
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		11
Item 3.		Quantitative and Qualitative Disclosures About Market Risks		21
PART II.		OTHER INFORMATION
Item 1.		Legal Proceedings		22
Item 2.		Changes in Securities and Use of Proceeds		22
Item 3.		Defaults upon Senior Securities		22
Item 4.		Submission of Matters to Vote of Security Holders		22
Item 5.		Other Information		22
Item 6.		Exhibits and Reports on Form 8-K		22
SIGNATURES				23

		June 30, 2002				December 31, 2001
		(unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	60,738			$	62,141
Short-term investments			35,640				14,724
Accounts receivable			8,310				5,124
Inventories			14,001				23,622
Deferred tax assets			5,346				5,346
Prepaid expenses and other current assets			1,227				1,526
Total current assets			125,262				112,483
PROPERTY AND EQUIPMENT, net			20,652				23,182
		$	145,914			$	135,665
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of capitalized lease obligations		$	238			$	440
Accounts payable			4,278				4,641
Accrued payroll and related expenses			3,451				3,164
Taxes payable and other accrued liabilities			3,243				1,604
Deferred income on sales to distributors			2,212				1,798
Total current liabilities			13,422				11,647
LONG TERM LIABILITIES:
Capitalized lease obligations, net of current portion			154				275
Deferred rent			595				441
Total long term liabilities			749				716
STOCKHOLDERS’ EQUITY:
Common stock			28				28
Additional paid-in capital			86,446				81,758
Stockholder notes receivable			—				(38	)
Cumulative translation adjustment			(117	)			(117	)
Retained earnings			45,386				41,671
Total stockholders’ equity			131,743				123,302
		$	145,914			$	135,665

		Three Months Ended June 30,						Six Months Ended June 30,
		2002			2001			2002			2001
NET REVENUES:
Product sales		$	26,861		$	20,985		$	50,251		$	46,806
License fees and royalties			287			262			567			637
Total net revenues			27,148			21,247			50,818			47,443
COST OF REVENUES			15,758			11,893			29,126			24,674
GROSS PROFIT			11,390			9,354			21,692			22,769
OPERATING EXPENSES:
Research and development			3,648			3,696			7,255			7,242
Sales and marketing			3,645			3,839			7,047			7,349
General and administrative			1,548			1,434			2,981			2,736
Total operating expenses			8,841			8,969			17,283			17,327
INCOME FROM OPERATIONS			2,549			385			4,409			5,442
OTHER INCOME, net			493			572			898			1,094
INCOME BEFORE PROVISION FOR INCOME TAXES			3,042			957			5,307			6,536
PROVISION FOR INCOME TAXES			913			287			1,592			1,994
NET INCOME		$	2,129		$	670		$	3,715		$	4,542
EARNINGS PER SHARE:
Basic		$	0.08		$	0.02		$	0.13		$	0.16
Diluted		$	0.07		$	0.02		$	0.12		$	0.16
SHARES USED IN PER SHARE CALCULATION:
Basic			28,317			27,620			28,222			27,571
Diluted			29,873			28,528			29,619			28,495

		Six Months Ended June 30,
		2002				2001
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income		$	3,715			$	4,542
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			3,344				3,124
Deferred rent			154				267
Provision for accounts receivable and other allowances			141				141
Tax benefit associated with employee stock plans and stock compensation to non-employees			1,377				570
Change in operating assets and liabilities:
Accounts receivable			(3,327	)			1,840
Inventories			9,621				(1,261	)
Prepaid expenses and other current assets			299				1,970
Accounts payable			(365	)			(47	)
Accrued liabilities			1,927				(2,353	)
Deferred income on sales to distributors			414				(633	)
Net cash provided by operating activities			17,300				8,160
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment			(815	)			(5,500	)
Purchases of short-term investments			(25,575	)			(19,250	)
Proceeds from sales and maturities of short-term investments			4,659				17,564
Net cash used in investing activities			(21,731	)			(7,186	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of common stock			3,312				1,720
Proceeds from stockholder note repayment			38				—