UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(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, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number: 0-22809
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AZUREL LTD.
-----------
(Exact Name of Small Business Issuer as Specified in its Charter)
DELAWARE 13-3842844
------------------------------- -------------------
State or other jurisdiction of I.R.S. Employer
incorporation or organization dentification No.)
509 MADISON AVENUE, NEW YORK, NY 10022
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(Address of principal executive office) (Zip Code)
(212) 317- 0712
----------------
(Issuer's telephone number including area code)
Check whether the issuer (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 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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The number of shares of registrant's Common Stock, $.001 par value, outstanding
as of August 14, 2000 was 6,911,797 shares.
Transitional Small Business Disclosure Format (check one)
Yes No X
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AZUREL LTD. AND SUBSIDIARIES
----------------------------
INDEX
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Page
Number
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PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Consolidated Balance Sheet 1
Consolidated Statements of Operations 2
Consolidated Statements of Cash Flows 3-4
Notes to Financial Statements 5-6
Item 2 - Management's Discussion and Analysis or
Plan of Operation 7-10
PART II - OTHER INFORMATION
Item 5 - Other Information 11
SIGNATURE 12
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
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<TABLE>
<CAPTION>
AZUREL LTD. AND SUBSIDIARIES
----------------------------
CONSOLIDATED BALANCE SHEET
--------------------------
June 30,
2000
---------------
(Unaudited)
ASSETS
------
CURRENT ASSETS:
<S> <C>
Cash $ 58,170
Accounts receivable, net of allowance for
doubtful accounts of $25,000 375,738
Short-term note receivable 224,403
Inventory 2,449,806
Due from related parties 31,284
Prepaid expenses and other current assets 142,752
------------
TOTAL CURRENT ASSETS 3,282,153
FURNITURE AND EQUIPMENT 205,217
GOODWILL 139,175
LONG-TERM NOTE RECEIVABLE 1,800,000
OTHER ASSETS 110,451
------------
$ 5,536,996
============
LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------
CURRENT LIABILITIES:
Bank Loans $ 24,312
Accounts payable 1,986,979
Notes payable 2,657,000
Accrued expenses and other liabilities 1,212,681
Current portion of long-term debt 49,574
Capital lease obligation - current portion 160,000
------------
TOTAL CURRENT LIABILITIES 6,090,546
LONG TERM DEBT 1,528,167
OBLIGATIONS UNDER CAPITAL LEASE 40,000
MINORITY INTEREST 357
STOCKHOLDERS' DEFICIT:
Preferred stock, $.001 par value, authorized 4,000,000 shares;
issued and outstanding 1,001,500 shares 2,237,587
Common stock, $.001 par value, authorized 24,000,000 shares,
issued and outstanding 6,911,797 shares 6,912
Additional paid-in-capital 8,998,983
Accumulated deficit (13,353,101)
Translation loss (12,455)
------------
TOTAL STOCKHOLDERS' DEFICIT (2,122,074)
------------
$ 5,536,996
============
</TABLE>
See notes to consolidated financial statements.
-1-
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<TABLE>
<CAPTION>
AZUREL LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months ended June 30, Six Months ended June 30,
------------------------------------- ----------------------------------
2000 1999 2000 1999
--------------- --------------- --------------- ----------------
<S> <C> <C> <C> <C>
NET SALES $ 492,849 $ 1,010,010 $ 874,880 $ 1,801,795
COST OF GOODS SOLD 276,774 1,767,354 456,105 3,106,128
--------------- --------------- --------------- ----------------
GROSS PROFIT (LOSS) 216,075 (757,344) 418,774 (1,304,333)
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 1,161,314 1,213,896 2,298,783 2,312,032
--------------- --------------- --------------- ----------------
LOSS FROM OPERATIONS (945,239) (1,971,239) (1,880,009) (3,616,365)
INTEREST EXPENSE (242,997) (202,309) (372,302) (313,361)
OTHER INCOME (EXPENSE) 271,414 736,000 263,306 736,000
--------------- --------------- --------------- ----------------
NET LOSS FROM CONTINUING OPERATIONS $ (916,822) $ (1,437,548) $ (1,989,004) $ (3,193,726)
DISCONTINUED OPERATIONS:
INCOME FROM OPERATIONS OF PLC 180,896 70,253 197,260 105,366
--------------- --------------- --------------- ----------------
NET INCOME FROM DISCONTINUED OPERATIONS 180,896 70,253 197,260 105,366
--------------- --------------- --------------- ----------------
NET LOSS $ (735,926) $ (1,367,295) $ (1,791,744) $ (3,088,360)
=============== =============== =============== ================
BASIC (LOSS) EARNINGS PER COMMON SHARE:
CONTINUING OPERATIONS $ (0.15) $ (0.26) $ (0.31) $ (0.58)
DISCONTINUED OPERATIONS 0.03 -- 0.03 --
--------------- --------------- --------------- ----------------
BASIC LOSS PER COMMON SHARE $ (0.12) $ (0.26) $ (0.28) $ (0.58)
=============== =============== =============== ================
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 6,328,464 6,053,845 6,445,130 5,686,345
=============== =============== =============== ================
</TABLE>
See notes to consolidated financial statements.
-2-
<PAGE>
<TABLE>
<CAPTION>
AZUREL LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six months ended June 30,
---------------------------------
2000 1999
---------------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(1,791,744) $(3,088,360)
----------- -----------
Adjustments to reconcile net loss to net cash used in operating activities:
<S> <C> <C>
Depreciation 27,115 6,361
Amortization 3,978 4
Loss (gain) on disposal of fixed assets 3,305 (237,924)
Provision for discontinued operations 132,000 --
Increase in minority interest -- 357
Changes in assets and liabilities:
Decrease in accounts receivable 1,458,886 1,111,673
Decrease in inventories 274,991 852,642
Increase in prepaid expenses and other current assets (5,278) (212,554)
Decrease (increase) in other assets 70 (80,832)
Decrease in accounts payable and accrued expenses (218,997) (225,008)
(Increase) decrease in net assets of discontinued operations (73,024) 29,629
----------- -----------
NET CASH USED IN OPERATING ACTIVITIES (188,698) (1,844,013)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (5,951) (26,259)
Disposal of property and equipment 879 237,924
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NET CASH USED IN (PROVIDED BY) INVESTING ACTIVITIES (5,072) 211,665
----------- -----------
CASH FLOW FROM FINANCING ACTIVITIES:
Decrease in revolving line of credit (1,168,950) (1,832,087)
Increase in bank loans 24,312 --
Proceeds from borrowings on notes 350,000 845,000
Borrowings from long term debt -- 1,910,294
Principal payments of capital lease obligations -- (1,795)
Payment of long term debt (27,538) (303,870)
Proceeds from exercise of stock options -- 100
Proceeds from issuance of common stock -- 1,075,000
Proceeds from sale of PLC 1,061,418 --
----------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 239,242 1,692,642
----------- -----------
Effect of exchange rate (2,539) 767
NET INCREASE IN CASH 42,933 61,060
CASH, beginning of period 15,237 14,624
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CASH, end of period $ 58,170 $ 75,684
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</TABLE>
See notes to consolidated financial statements.
-3-
<PAGE>
<TABLE>
<CAPTION>
AZUREL LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six months ended June 30,
------------------------------------
2000 1999
---------------- ----------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
<S> <C> <C>
Cash paid for interest $ 130,866 $ 162,132
=========== ===========
Cash paid for income taxes $ 10,431 $ --
=========== ===========
Notes received in connection with sale of subsidiary $ 2,024,403 $ --
=========== ===========
Conversion of notes to common stock $ 350,000 $ --
=========== ===========
</TABLE>
See notes to financial statements
-4-
<PAGE>
AZUREL LTD. AND SUBSIDIARIES
----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
SIX MONTHS ENDED JUNE 30, 2000
------------------------------
(UNAUDITED)
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1. BASIS OF PRESENTATION
---------------------
The accompanying consolidated financial statements as of June 30,
2000 have not been audited by independent auditors, but in the
opinion of management, such unaudited statements include all
adjustments consisting of normal recurring accruals necessary for a
fair presentation of the financial position, the results of
operations and cash flows for the six months ended June 30, 2000.
On May 26, 2000, the Company consummated an agreement to sell its
ownership in its Private Label Group subsidiary, pursuant to an
agreement signed in March 2000.
On July 18, 2000, the Company's Board of Directors held a special
meeting, at which time the Board voted unanimously to relieve Gerard
Semhon of his duties as Chairman and Chief Executive Officer for
cause and appointed Norman Grief as its new Chairman of the Board. It
furthermore resolved to run the Company by Management Committee and
seek an Executive with a marketing background to assist in moving the
Company in a new direction.
The consolidated financial statements should be read in conjunction
with the financial statements and related notes concerning the
Company's accounting policies and other matters contained in the
Company's annual report on Form 10-KSB. The results for the six
months ended June 30, 2000 are not necessarily indicative of the
results expected for the full year ending December 31, 2000. Certain
prior year amounts have been reclassified to conform with the current
year's presentation.
2. GOING CONCERN
-------------
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. The Company
sustained losses of approximately $1,791,000 for the six months ended
June 30, 2000 and had a working capital deficiency of approximately
$2,808,000 as of that date. Although the Company is current with
respect to payments of year 2000 payroll tax obligations, it has not
remitted 1999 third and fourth quarter federal and state payroll
taxes of approximately $325,000. These conditions raise substantial
doubt about the Company's ability to continue as a going concern.
Management's plans with respect to these matters include
restructuring its existing debt, raising additional capital through
issuance of stock and debentures, and ultimately developing a viable
business through new leadership. The accompanying financial
statements do not include any adjustments that might be necessary
should the Company be unable to continue as a going concern.
5
<PAGE>
3. MEETING WITH NASDAQ
-------------------
On March 23, 2000, the Company met with the Nasdaq Listing
Qualifications Panel ("The Panel") to respond to concerns raised by
Nasdaq. Although the Company believed it was in compliance with
corporate governance requirements, on April 28, 2000, the Panel
determined to delist the Company's securities for public interest
concerns. The Panel also cited the Company's December 31, 2000
reported net tangible assets of $(820,944) -net tangible assets as of
March 31, 2000 are reported as $(1,792,607)- and that, as of the
close of business on April 27, 2000, the Company failed to evidence a
minimum bid price of $1.00 per share, as required by Nasdaq
Marketplace Rule 430(c)(4), for 27 consecutive trading days. The
Company subsequently applied and has been listed on the Bulletin
Board.
4. NOTES PAYABLE
-------------
During the first quarter of 2000, the Company borrowed an aggregate
of $350,000 in unsecured short term notes at an interest rate of 8%.
These notes were converted to 700,000 shares of the Company's common
stock at a price of $.50 per share in June 2000. The Company has
extended a $500,000 note to a lender which came due during the first
quarter of 2000 to the first quarter of 2001, in return for a
security interest in the Company's inventory. Another lender notified
the Company that it was in default of payment of a $300,000 note due
on July 19, 2000, along with accrued interest of $27,000. A third
lender notified the Company on August 2, 2000, that it is in default
of its obligations to repay a $550,000 note along with approximately
$50,000 of interest on June 30, 2000, . The same lender also notified
the Company, on the same day, that it is in default of making
interest payments on a long term note of approximately $130,000 as of
June 30, 2000.
5. NOTE RECEIVABLE
---------------
The long-term note receivable from Private Label Cosmetics, Inc., in
the amount $1,800,000, is collateralized against the $1,528,167
long-term debt. Furthermore, the note is in the hand of the lender's
attorney, who also issued a default letter to the Company relative to
non-payment of interest as explained in the previous paragraph.
6. LEGAL
-----
The Company has received legal notification of claims from certain
vendors and former employees and is in the process of negotiating
settlements to most of these claims. In certain instances, the
Company intends to challenge the validity of these claims.
7. REVOLVING LINE OF CREDIT
------------------------
On May 26, 2000, on the same day that the Company consummated the
sale of its Private Label subsidiary, the Company used the proceeds
obtained at the closing, to pay off the remaining balance on its
revolving line of credit.
8. PURCHASE ORDER FINANCING AND FACTORING AGREEMENT
------------------------------------------------
In July 2000, the Company signed a purchase order financing and
factoring agreement, whereby 100 percent of its overseas purchases
can be funded by letters of credit, and the receivables generated by
the sale of this merchandise will be factored. The aforementioned
inventory and receivables will be secured by the financing company
and factoring company, respectively.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FORWARD LOOKING STATEMENTS AND ASSOCIATED RISKS
-----------------------------------------------
This Quarterly Report on Form 10-QSB contains forward-looking
statements within the meaning of Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934. The
Company's actual results could differ materially from those set forth
in the forward-looking statements.
The following discussion should be read in conjunction with the
attached consolidated financial statements and notes thereto and with
the Company's audited financial statements and notes thereto for the
fiscal year ended December 31, 1999.
FOR THE SIX AND THREE MONTHS ENDED JUNE 30, 2000 AND 1999
---------------------------------------------------------
Azurel, Ltd., hereinafter "Azurel" or "the Company", through its
wholly-owned subsidiaries, markets, and sells private label
cosmetics, fragrances and skincare products, in addition to providing
warehousing, assembly and distribution services for other companies
in related businesses. Prior to the sale of its Private Label
Cosmetics subsidiary on May 26, 2000, the Company was also engaged in
the manufacture of many of those same products.
In August 1996, Azurel acquired the stock of Private Label Group.
March 2000, Azurel entered into an agreement to sell PLC and
completed this sale in May 2000. In October 1996, Azurel acquired the
stock of Scent Overnight. In October 1997, Azurel acquired the stock
of Cambridge Business Services Corporation.
In July 1998, Azurel's wholly owned subsidiary, Azurel Sales &
Distribution, acquired the assets of Ben Rickert, Inc.
7
<PAGE>
RESULTS OF OPERATIONS
---------------------
Total revenues for the six and three months ended June 30, 2000 were
$874,880 and $492,849, respectively, compared to $1,801,795 and
$1,010,010 for the six and three months ended June 30, 1999. This
decrease is largely attributable to a significantly higher volume of
closeout sales in the first half of 1999.
Cost of goods sold were $456,105 and $276,774 for the six and three
months ended June 30, 2000 and $3,106,128 and $1,767,354 for the
respective periods ended June 30, 1999. The significant decrease is
attributable to two factors. The first factor relates to the
capturing of overhead costs at the Azurel Sales and Distribution
facility. In the 1999 period, when this subsidiary was manufacturing
soap, overhead was allocated to cost of goods sold. The Company,
however, sold its soap machines in June, 1999, and is now recording
all overhead costs in "Selling, general and administrative expenses"
in 2000. Secondly, the Company sold off significant quantities of
slow moving inventory and disposed of obsolete inventory during the
first half of 1999. The gross profit as a percentage of revenue was
47.9% and 43.8% for the six and three months ended June 30, 2000 as
compared to (72.4)% and (75.0) for the corresponding periods ended
June 30, 1999.
Selling, general and administrative (S,G&A) expenses for the six and
three months ended June 30, 2000 were $2,298,783 and $1,161,314 and
$2,312,032 and $1,213,895 for the six and three months ended June 30,
1999. As mentioned in the last paragraph, overhead expenses in the
first half of 1999 were captured in cost of goods sold, but are
treated as selling, general and administrative expenses in 2000.
Current year expenses were adversely impacted approximately $100,000
by increased computer training and programming costs associated with
the implementation of a new computer system and increased legal
expenses resulting from the sale of the Company's Private Label
Cosmetics subsidiary. These factors were more than offset by current
year expense reductions in wages and associated costs of
approximately $200,000 and lower rent resulting from the move to a
smaller facility, $125,000. Additionally, amortization expense was
approximately $100,000 lower in 2000 due to the write-off of formulae
and customer lists attributable to the discontinued operation, in
December 1999.
Interest expense was $372,302 for the six months ended June 30, 2000
and $242,997 for the three months ended June 30, 2000 compared to
$313,361 for the three months ended June 30, 1999 and $202,309 for
the three months ended June 30, 1999. The increase is a reflection of
increased debt financing levels in 2000, partially offset by a
reduction in the revolving line of credit.
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
The Company's primary source of liquidity is accounts receivable of
$375,738.
The Company has funded its operations to date primarily through a
combination of debt and equity financing. In August 1997, Azurel
completed its initial public offering of 1,200,000 shares of common
stock and 1,200,000 common stock purchase warrants, which resulted in
approximately $4,800,000 to the Company.
8
<PAGE>
In December 1997, the Company secured a 4 year term loan of $800,000
at 11.3% from GE Capital. Such loan is secured by the company's
existing machinery and equipment. In February 1998, the Company
secured a revolving line of credit in the amount of $3,500,000 with
Finova Capital Corporation, which will be transferred to Private
Label Group upon completion of the sale. This line of credit bears an
interest rate of 2.5% above the prime rate and is secured by the
Company's receivables, inventory and a second lien on machinery and
equipment. An additional line of credit of $4,000,000 was secured for
the Company's wholly owned subsidiary, Azurel Sales & Distribution,
in September 1998 with Finova Capital Corp. Upon the completion of
the sale of PLC, the Company paid off the outstanding balance owed to
Finova, by the Company, from the sale proceeds.
In August, 1998 the Company sold shares of its Series A Convertible
Preferred Stock, receiving net proceeds of approximately $1,237,587.
In April 1999 and May 1999, the Company sold an aggregate of 716,667
shares of its Common Stock at a price of $1.50 per share, for an
aggregate sale price of $1,075,000, to several investors, pursuant to
an exemption from the registration requirements.
In May 1999, the Company obtained approximately $1,000,000 and
converted a $500,000 short-term note. The $1,500,000 is secured by a
majority of PLC common stock. On April 10, 2000, it was agreed to
exchange this security for the $1,800,000 promissory note that would
be issued in connection with the sale of PLC, conditional on the
successful completion of such sale.
In June 1999, the Company entered into a web-site design and
consulting agreement with Tadeo E-Commerce Corp. In connection with
the agreement, Tadeo paid the Company a $500,000 non-refundable fee
for the right to develop the website and for the Company's consulting
services pertaining to the cosmetic industry. The Company believes it
had substantially fulfilled all of its requirements under the
contract prior to June 30, 1999. In connection with the agreement,
Tadeo is entitled to receive a 5% royalty on gross revenues generated
from the website until it receives an aggregate of $500,000 in
royalties, at which time its royalty shall be reduced to 3% of gross
revenues generated from the website.
In September 1999, the Company sold $800,000 of its Series C
Convertible Preferred Stock.
During the first quarter of 2000, Azurel borrowed an aggregate of
$350,000 in unsecured notes, at an interest rate of 8%. These notes
were converted to 700,000 shares of common stock at a price of $.50
per share in June 2000.
In July, 2000, the Company signed a purchase order financing and
factoring agreement, whereby 100 per cent of its overseas purchases
can be funded by letters of credit, and the receivables generated by
the sale of this merchandise will be factored. The aforementioned
inventory and receivables will be secured by the financing company
and factoring company, respectively.
Cash used in operating activities for the six months ended June 30,
9
<PAGE>
2000 was $13,101 as compared to $1,844,013 for the corresponding 1999
period. This decrease is primarily attributable to a decrease in net
loss of approximately $1,300,000. Net losses of $1,314,414 before
non-cash expenses were funded essentially by a $1,458,886 decrease in
accounts receivable.
Cash used in investing activities amounted to $5,072 for the six
months ended June 30, 2000 compared to $211,665 provided by investing
activities for the six months ended June 30, 1999. The 1999 figure is
primarily a reflection of the sale of the soap machines at the Azurel
Sales & Distribution facility in June 1999. The proceeds from the
sale of PLC, $1,061,418 and proceeds from the issuance of debt and
converted to common stock, $350,000 were more than sufficient to pay
down loan balances with Finova, $1,168,950.
DISCONTINUED OPERATIONS
-----------------------
In March 2000, the Company entered into an agreement to sell its
two-thirds interest in Private Label Cosmetics, Inc. and Fashion
Laboratories, Inc. (collectively known as the "Private Label Group")
to Michael J. Assante, President of Private Label Cosmetics. Mr.
Assante currently owns one-third of the Private Label Group. The
Company completed the sale on May 26, 2000, receiving an aggregate of
$1,061,418 in cash, a one-year $224,403 promissory note and a
two-year $1,800,000 promissory note. In addition, Mr. Assante has
agreed to forgive $600,000 owed to him by the Company in connection
with the Company's acquisition of the Private Label Group in August
1996.
The Company had established a provision for an estimated loss of
approximately $1,156,000. The results of operations for the
discontinued operations have been reclassified for all periods in the
accompanying financial statements.
GOING CONCERN
-------------
The Company received a going concern opinion from its auditors for
the year ended December 31, 1999. The Company sustained losses of
approximately $1,791,000 for the six months ended June 30, 2000 and
had a working capital deficiency of approximately $2,808,000 as of
that date. Although the Company is current with respect to payment of
its year 2000 payroll tax obligations, it has not remitted 1999 third
and fourth quarter federal and state payroll taxes of approximately
$325,000. These conditions raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans
with respect to these matters include restructuring its existing
debt, raising additional capital through issuance of stock and
debentures, and ultimately developing a viable business through new
leadership.
10
<PAGE>
PART II - OTHER INFORMATION
---------------------------
Item 5. OTHER INFORMATION
-----------------
Meeting with Nasdaq - On March 23, 2000, the Company met with the
Nasdaq Listing Qualifications Panel ("The Panel") to respond to
concerns raised by Nasdaq. Although the Company believed it was in
compliance with corporate governance requirements, on April 28, 2000,
the Panel determined to delist the Company's securities for public
interest concerns. The Panel also cited the Company's December 31,
2000 reported net tangible assets of $(820,944) -net tangible assets
as of March 31, 2000 are reported as $(1,792,607)- and that, as of
the close of business on April 27, 2000, the Company failed to
evidence a minimum bid price of $1.00 per share, as required by
Nasdaq Marketplace Rule 430(c)(4), for 27 consecutive trading days.
Item 3. Item 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a.) (a.) EXHIBIT DESCRIPTION
------- -----------
27 Financial Data Schedule
(b.) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended June 30,
2000; however, one was filed on July 26, 2000.
11
<PAGE>
SIGNATURES
----------
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
AZUREL LTD.
/S/ EDWARD ADAMCIK
------------------------------
Edward Adamcik
Chief Financial Officer
/S/ STEVEN M. BARRY
-----------------------------
Steven M. Barry
Corporate Controller and Secretary
Dated : August 14, 2000
12
