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<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported): AUGUST 5, 1998
-------------------------------------------------------------------
BACOU USA, INC.
---------------
(Exact name of registrant as specified in its charter)
DELAWARE
--------
(State or other jurisdiction of incorporation)
0-28040 05-0470688
- --------------------------------------------------------------------------------
Commission file number) (IRS Employer Identification Number)
10 Thurber Boulevard, Smithfield, RI 02917
---------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 401-233-0333
------------
<PAGE> 2
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Pro Forma Financial Information
Unaudited Pro Forma Consolidated Statement of Income of Bacou USA,
Inc. ("Bacou") for the six months ended June 30, 1998.
Unaudited Pro Forma Consolidated Statement of Income of Bacou for
the year ended December 31, 1997.
(b) Exhibits
Item 601
Exhibit Exhibit Title
-------- -------------
Exhibit 99 (a) Unaudited Pro Forma Consolidated Statement of
Income of Bacou for the six months ended
June 30, 1998
Exhibit 99 (b) Unaudited Pro Forma Consolidated Statement of
Income of Bacou for the year ended
December 31, 1997
2
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, as amended, the Registrant has duly caused this amended report to be
signed on its behalf by the undersigned hereunto duly authorized.
BACOU USA, INC.
Registrant
By: /s/ Phillip B. Barr
----------------------------
Phillip B. Barr
Executive Vice President and
Chief Financial Officer
Dated: August 5, 1998
3
<PAGE> 1
EXHIBIT 99 (a)
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
ACQUISITION OF HOWARD S. LEIGHT & ASSOCIATES, INC.
On February 27, 1998, Bacou USA Safety, Inc. ("Bacou Safety"), a
wholly-owned subsidiary of Bacou USA, Inc. ("Bacou") consummated the following
transactions (collectively, the "Leight Acquisition") (i) its acquisition of
substantially all of the operating assets of Howard S. Leight & Associates, Inc.
(d/b/a Howard Leight Industries) ("Leight"), (ii) its acquisition of all of the
capital stock of Howard Leight de Mexico S. A. de C.V. ("Leight Mexico") (except
for one share of capital stock which was purchased by Bacou in order to satisfy
a statutory requirement that Leight Mexico have two stockholders) from Leight
and Howard S. Leight ("H. Leight"), and (iii) its acquisition of all of the
capital stock of Howard Leight (Europe) Limited ("Leight Europe") from H. Leight
and John Dean. The Leight Acquisition is more fully described in a Form 8-K
filed March 13, 1998.
Leight, together with Leight Mexico and Leight Europe design, manufacture
and sell a complete line of hearing protection products, including disposable
ear plugs, reusable ear plugs and ear muffs. Leight's principal business
location is in San Diego, California. Assets acquired include physical property,
intellectual property and working capital. Bacou intends to continue to use
acquired physical property for the manufacture of hearing protection products.
Bacou paid cash consideration of $125.9 million in connection with the
closing of the Leight Acquisition, $5.9 million of which represented the
refinancing of Leight indebtedness. Funding of the cash consideration was
provided by the following: (i) an advance of $110.0 million under Bacou's term
loan facility with Banque Nationale de Paris; (ii) an advance of $14.3 million
under Bacou's revolving credit line facility with Citizens Bank of Rhode Island;
and (iii) the balance from Bacou's cash balances.
ACQUISITION OF COMASEC HOLDINGS, INC.
On May 3, 1997 Bacou also completed its acquisition of Comasec Holdings,
Inc. ("Comasec") and its wholly-owned subsidiary Survivair, Inc. ("Survivair"),
a manufacturer of respiratory protection products, for cash consideration of
$27.4 million (the "Survivair Acquisition"). The Survivair Acquisition is more
fully described in a Form 8-K filed June 16, 1997.
BASIS OF PRESENTATION
Pro forma statement of income data for the six months ended June 30, 1998
and the year ended December 31, 1997, each included herein, give pro forma
effect to the Leight Acquisition as if it had been consummated on January 1,
1997. Pro forma statement of income data for the year ended December 31, 1997
also gives effect to the Survivair Acquisition as if it had been consummated on
January 1, 1997.
The unaudited pro forma information is based on the historical consolidated
statements of income of Bacou, Leight and Comasec under the assumptions and
adjustments set forth in the accompanying Notes to the Unaudited Pro Forma
Consolidated Statements of Income. The Unaudited Pro Forma Statements of Income
do not give effect to anticipated cost savings, if any, in connection with the
acquisitions unless there are specifically identifiable expense reductions that
result from the purchase agreements that set forth the acquisitions.
The unaudited pro forma information should be read in conjunction with the
consolidated historical financial statements of Bacou, Leight and Comasec
including the respective notes thereto. The unaudited pro forma data is
presented for comparative purposes only and is not necessarily indicative of the
combined results of operations which would have been realized had the Leight
Acquisition and Survivair Acquisition been consummated during the period or as
of the date for which the unaudited pro forma data is presented. The unaudited
pro forma information is also not indicative of future results of operations.
1
<PAGE> 2
<PAGE> 3
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
Six Months Ended June 30, 1998
(in thousands except earnings per share)
<TABLE>
<CAPTION>
Howard S. Leight &
Associates, Inc.
Bacou USA, Inc. and Subsidiaries
Six Months Ended Two Months Ended Pro Forma Pro Forma
June 30, 1998 February 28, 1998 Adjustments Ref. As Adjusted
----------------- ----------------- ----------- ---- -----------
<S> <C> <C> <C> <C> <C>
Net sales $108,379 $ 7,358 $ - $115,737
Cost of sales 52,546 3,457 (82) (1) 55,921
-------- ------- ------- --------
Gross profit 55,833 3,901 82 59,816
Operating expenses:
Selling 17,410 1,177 - 18,587
General and administrative 12,059 1,998 (524) (2) 13,533
Purchased in-process research and
development 7,118 - - 7,118
Research and development 1,732 - 30 (3) 1,762
Amortization of intangible assets 3,557 - 596 (4) 4,153
-------- ------- ------- --------
Total operating expenses 41,876 3,175 102 45,153
-------- ------- ------- --------
Operating income 13,957 726 (20) 14,663
Other expense (income):
Net interest expense (income) 2,724 - 1,291 (5) 4,015
Net other expense (income) (39) (23) 23 (6) (39)
-------- ------- ------- ------
Other expense (income), net 2,685 (23) 1,314 3,976
-------- ------- ------- --------
Income from continuing operations
before income taxes 11,272 749 (1,334) 10,687
Income taxes 4,041 19 (241) (7) 3,819
-------- ------- ------- --------
Net income $ 7,231 $ 730 $(1,093) $ 6,868
======== ======= ======= ========
Basic earnings per share $ .41 $ .39
Diluted earnings per share $ .41 $ .39
Weighted average shares outstanding:
Basic 17,596 17,596
Diluted 17,688 17,688
</TABLE>
See Notes to Unaudited Pro Forma Consolidated Statement of Income
2
<PAGE> 4
Notes to Unaudited Pro Forma Consolidated Statement of Income
Six Months Ended June 30, 1998
(in thousands)
<TABLE>
<CAPTION>
COST OF SALES:
<S> <C> <C> <C> <C> <C>
(1) To remove the salary of an employee terminated as a result of the Leight Acquisition. $ (10)
To reclassify the cost of the research and development department from
cost of sales to a separate category of operating expense. $ (30)
To reverse historical depreciation and include revised depreciation
based upon the expected useful lives and fair value of property and equipment
acquired in connection with the Leight Acquisition as follows:
Remove old depreciation amount $ (99)
-----
Add new depreciation amount: Cost
------
Land $ 998 $ -
Land improvements (used 75% in manufacturing) Useful life 10 years $ 200 $ 3
Building (used 75% in manufacturing) Useful life 40 years $5,325 $ 17
Machinery and equipment Useful life 10 years $2,130 $ 37
-----
New depreciation $ 57
-----
Net depreciation adjustment $ (42)
-------
Decrease in cost of sales $ (82)
=======
GENERAL AND ADMINISTRATIVE EXPENSE:
(2) To remove the salaries of employees, including Howard S. Leight, terminated
as a result of the Leight Acquisition. $ (341)
To remove the costs of certain equipment rentals and the related maintenance
and operating expenses on that equipment not acquired. $ (185)
To record estimated additional expenses to be incurred as a result of the
removal of the equipment rented above. $ 42
To record the reduction in executive salaries realized because of new
employment contracts with modified incentive programs. For purposes of this
adjustment the assumption has been made that the maximum amount of the incentive
will be earned. $ (69)
To record the annual obligation incurred under a consulting agreement with
Howard S. Leight. This amount includes a direct annual payment of $200 plus the
amortization over the term of the agreement of the fair value of stock
options granted to the consultant and immediately vested. $ 45
To reverse historical depreciation and include revised depreciation based
upon the expected useful lives and fair value of property and equipment acquired
in connection with the Leight Acquisition as follows:
Remove old depreciation amount $ (51)
-----
Add new depreciation amount: Cost
------
Land $ 998 $ -
Land improvements (used 25% in administration) Useful life 10 years $ 200 $ 1
Building (used 25% in administration) Useful life 40 years $5,325 $ 5
Furniture and fixtures Useful life 7 years $ 651 $ 15
Computer equipment Useful life 3 years $ 198 $ 10
Vehicles Useful life 3 years $ 94 $ 4
-----
New depreciation $ 35
-----
Net depreciation adjustment $ (16)
-------
Decrease in general and administrative expenses $ (524)
</TABLE>
3
<PAGE> 5
Notes to Unaudited Pro Forma Consolidated Statement of Income, Continued
Six Months Ended June 30, 1998
(in thousands)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
RESEARCH AND DEVELOPMENT EXPENSE:
(3) To reclassify the cost of the research and development department from cost
of sales to a separate category of operating expense: $ 30
=======
AMORTIZATION OF INTANGIBLES:
(4) To record amortization expense based upon the expected useful lives and fair
value of intangible assets acquired in connection with the Leight Acquisition as
follows:
Description Cost Amortization
----------- ---- ------------
Goodwill Useful life of 30 years $ 12,435 $ 69
Core technology Useful life of 20 years $ 9,086 $ 76
Current products and technology Useful life of 30 years $ 75,717 $ 421
Other intangible assets Useful life of 10 years $ 658 $ 11
Other intangible assets Useful life of 30 years $ 3,542 $ 19
-------- ------
Totals $101,438 $ 596
-------- ------
New amortization amount $ 596
-------
INTEREST EXPENSE:
(5) To record interest expense on the portion of the acquisition price financed
with bank borrowings. The interest rate will be set quarterly at an effective
rate equal to LIBOR plus 0.5%.
Amount of indebtedness $125,900
Assumed interest rate on indebtedness 6.1532%
--------
Increase in interest expense $ 1,291
=======
NET OTHER EXPENSE (INCOME):
(6) To record net other income $ 23
=======
INCOME TAXES:
(7) To record the income tax effect on the income reported by Howard S. Leight
& Associates, Inc. if the income was taxed at a rate of 38%. This rate reflects the federal
statutory rate of 35% plus the effect of state and local income taxes, less the income tax
paid by Howard S. Leight & Associates, Inc. $ 266
To record the income tax effect of the pro forma adjustments at a rate
of 38% This rate is based upon a federal statutory rate equal to 35% plus the
effect of state and local income taxes. $ (507)
--------
Decrease in income taxes $ (241)
======
</TABLE>
4
<PAGE> 1
EXHIBIT 99(b)
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
Year Ended December 31, 1997
(in thousands except earnings per share)
<TABLE>
<CAPTION>
Howard S. Leight & Comasec
Associates, Inc. Holdings, Inc.
Bacou USA, Inc. and Subsidiaries and Subsidiary
Year Ended Year Ended Five Months Ended
December 31, 1997 December 31, 1997 May 31, 1997
----------------- ----------------- ------------
<S> <C> <C> <C>
Net sales $ 130,869 $ 46,493 $ 12,636
Cost of sales $ 64,467 $ 19,694 $ 7,085
----------------- ---------------- -------------
Gross profit $ 66,402 $ 26,799 $ 5,551
Operating expenses:
Selling $ 21,658 $ 7,051 $ 1,903
General and administrative $ 11,184 $ 9,321 $ 1,299
Purchased in-process research and
development $ 3,721 $ - $ -
Research and development $ 1,110 $ - $ 577
Amortization of intangibles $ 4,095 $ - $ -
----------------- -------------- -------------
Total operating expenses $ 41,768 $ 16,372 $ 3,779
----------------- -------------- -------------
Operating income $ 24,634 $ 10,427 $ 1,772
Other expense (income):
Net interest expense (income) $ (216) $ 302 -
Net other expense (income) $ (160) $ 43 $ 190
----------------- -------------- -------------
Other expense (income), net $ (376) $ 345 $ 190
----------------- -------------- -------------
Income from continuing operations
before income taxes $ 25,010 $ 10,082 $ 1,582
Income taxes $ 10,588 $ 70 $ 729
----------------- -------------- -------------
Net income from continuing operations $ 14,422 $ 10,012 $ 853
================= ============== =============
Basic earnings per share $ 0.83
=================
Diluted earnings per share $ 0.83
=================
Weighted average shares outstanding:
Basic 17,383
Diluted 17,410
</TABLE>
<TABLE>
<CAPTION>
Howard S. Leight & Comasec
Associates, Inc. Holdings, Inc.
and Subsidiaries and Subsidiary
Pro Forma Pro Forma Pro Forma
Adjustments Ref. Adjustments Ref. As Adjusted
-------------------- ---- -------------- ---- -----------
<S> <C> <C> <C> <C> <C>
Net sales $ - $ (53) (7) $ 189,945
Cost of sales $ (944) (1) $ (6) (8) $ 90,296
-------------------- -------------- -----------
Gross profit $ 944 $ (47) $ 99,649
Operating expenses:
Selling $ 30,612
General and administrative $ (2,675) (2) $ (35) (9) $ 19,094
Purchased in-process research and $ -
development $ 3,721
Research and development $ 423 (3) $ 2,110
Amortization of intangibles $ 3,576 (4) $ 281 (10) $ 7,952
-------------------- -------------- -----------
Total operating expenses $ 1,324 $ 246 $ 63,489
-------------------- -------------- -----------
Operating income $ (380) $ (293) $ 36,160
Other expense (income):
Net interest expense (income) $ 7,747 (5) $ 740 (11) $ 8,573
Net other expense (income) $ - $ (180) (12) $ (107)
-------------------- -------------- -----------
Other expense (income), net $ 7,747 $ 560 $ 8,466
-------------------- -------------- -----------
Income from continuing operations
before income taxes $ (8,127) $ (853) $ 27,694
Income taxes $ 692 (6) $ (452) (13) $ 11,627
-------------------- -------------- -----------
Net income from continuing operations $ (8,819) $ (401) $ 16,067
==================== ============== ===========
Basic earnings per share $ 0.92
===========
Diluted earnings per share $ 0.92
===========
Weighted average shares outstanding:
Basic 17,383
Diluted 17,410
</TABLE>
See Notes to Unaudited Pro Forma Consolidated Financial Statements.
1
<PAGE> 2
Notes to Unaudited Pro Forma Consolidated Statement of Income
Year Ended December 31, 1997
(in thousands)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
COST OF SALES:
(1) To remove the salary of an employee terminated as a result of the Leight Acquisition. $ (61)
To reclassify the cost of the research and development department from
cost of sales to a separate category of operating expense. $ (423)
To reverse historical depreciation and include revised depreciation based
upon the expected useful lives and fair value of property and equipment acquired
in connection with the Leight Acquisition as follows:
Remove old depreciation amount $ (788)
--------
Add new depreciation amount:
COST DEPRECIATION
------------ ------------
Land $ 998 $ -
Land improvements (used 75% in manufacturing) Useful life of 10 years $ 200 $ 15
Building (used 75% in manufacturing) Useful life of 40 years $ 5,325 $ 100
Machinery and equipment Useful life of 10 years $ 2,130 $ 213
-----------
New depreciation $ 328
-----------
Net depreciation adjustment $ (460)
--------
Decrease in cost of sales $ (944)
=========
</TABLE>
<TABLE>
<CAPTION>
GENERAL AND ADMINISTRATIVE EXPENSE:
<S> <C>
(2) To remove the salaries of employees, including Howard S. Leight, terminated
as a result of the Leight Acquisition. $ (1,699)
To remove the costs of certain equipment rentals and the related
maintenance and operating expenses on that equipment not acquired. $ (1,108)
To record estimated additional expenses to be incurred as a result of the
removal of the equipment rented above. $ 250
To record the reductions in executive salaries realized because of new
employment contracts with modified incentive programs. For purposes of this
adjustment the assumption has been made that the maximum amount of the incentive
will be earned. $ (415)
To record the annual obligation incurred under a consulting agreement with
Howard S. Leight. This amount includes a direct annual payment of $200 plus the
amortization over the term of the agreement of the fair value of stock
options granted to the consultant and immediately vested. $ 270
</TABLE>
2
<PAGE> 3
Notes to Unaudited Pro Forma Consolidated Statement of Income
Year Ended December 31, 1997
(in thousands)
<TABLE>
<CAPTION>
To reverse historical depreciation and include revised depreciation based
upon the expected useful lives and fair value of property and equipment acquired
in connection with the Leight Acquisition as follows:
Remove old depreciation amount $ (201)
--------
Add new depreciation amount:
COST DEPRECIATION
-------- ------------
<S> <C> <C> <C> <C> <C>
Land $ 998 $ -
Land improvements (used 25% in administration) Useful life of 10 years $ 200 $ 5
Building (used 25% in administration) Useful life of 40 years $ 5,325 $ 33
Furniture and fixtures Useful life of 7 years $ 651 $ 93
Computer equipment Useful life of 3 years $ 198 $ 66
Vehicles Useful life of 3 years $ 94 $ 31
-----------
New depreciation $ 228
-----------
Net depreciation adjustment $ 27
--------
Decrease in general and administrative expenses $ (2,675)
=========
RESEARCH AND DEVELOPMENT EXPENSE:
(3) To reclassify the cost of the research and development department from cost
of sales to a separate category of operating expense: $ 423
========
AMORTIZATION OF INTANGIBLES:
(4) To record amortization expense based upon the expected useful lives and
fair value of intangible assets acquired in connection with the
Leight Acquisition as follows:
COST AMORTIZATION
---------- ------------
Goodwill Useful life of 30 years $ 12,435 $ 414
Core technology Useful life of 20 years $ 9,086 $ 454
Current products and technology Useful life of 30 years $ 75,717 $ 2,524
Other intangible assets Useful life of 10 years $ 658 $ 66
Other intangible assets Useful life of 30 years $ 3,542 $ 118
---------- -----------
Totals $ 101,438 $ 3,576
========== ===========
New amortization amount $ 3,576
========
INTEREST EXPENSE:
(5) To record interest expense on the portion of the acquisition price
financed with bank borrowings. The interest rate will be set quarterly
at an effective rate equal to LIBOR plus 0.5%.
Amount of indebtedness $ 125,900
Assumed interest rate on indebtedness 6.1532%
----------
Interest expense $ 7,747
========
</TABLE>
3
<PAGE> 4
Notes to Unaudited Pro Forma Consolidated Statement of Income
Year Ended December 31, 1997
(in thousands)
<TABLE>
<CAPTION>
ADJUSTMENTS DETAIL TOTAL
----------- -------------------------- ----------
INCOME TAXES:
<S> <C> <C>
(6) To record the income tax expense on the income reported by Howard S. Leight
& Associates, Inc. if the income was to be taxed at a rate of 38%. This
rate reflects the federal statutory rate of 35% plus the effect of state
and local income taxes, less the income tax paid by Howard S. Leight &
Associates, Inc. $ 3,761
To record the income tax effect of the pro forma adjustments at a rate of
38%. This rate is based upon a federal statutory rate equal to 35% plus the
effect of state and local income taxes. $ (3,069)
--------
Increase in income taxes $ 692
=========
</TABLE>
4
<PAGE> 5
Notes to Unaudited Pro Forma Consolidated Statement of Income
Year Ended December 31, 1997
(in thousands)
<TABLE>
<CAPTION>
SALES:
<S> <C> <C> <C> <C> <C>
(7) To reclassify sales discounts from other expense to sales. $ (53)
=========
COST OF SALES:
(8) To reclassify purchase discounts from other expense to cost of sales. $ (34)
To reverse historical depreciation and include revised depreciation based
upon the expected useful lives and fair value of property and equipment acquired
in connection with the Survivair Acquisition as follows:
Remove old depreciation amount $ (210)
-------
Add new depreciation amount:
COST DEPRECIATION
-------------- ------------
Leasehold improvements Useful life of 11 years $ 566 $ 21
Machinery and equipment Useful life of 11 years $ 2,570 $ 97
Tooling and molds Useful life of 7 years $ 1,998 $ 120
------------
New depreciation $ 238
------------
Net depreciation adjustment $ 28
-------
Decrease in cost of sales $ (6)
=========
GENERAL AND ADMINISTRATIVE EXPENSE:
(9) To reclassify amortization expense from operating expense. $ (12)
To reverse historical depreciation and include revised depreciation based
upon the expected useful lives and fair value of property and equipment acquired
in connection with the Survivair Acquisition as follows:
Remove old depreciation amount $ (65)
------------
Add new depreciation amount:
COST DEPRECIATION
-------------- ------------
Leasehold improvements Useful life of 11 years $ 189 $ 7
Furniture and fixtures Useful life of 9 years $ 184 $ 9
Computer equipment Useful life of 2 years $ 125 $ 26
------------
New depreciation $ 42
------------
Net depreciation adjustment $ (23)
-------
Decrease in general and administrative expense $ (35)
=========
</TABLE>
5
<PAGE> 6
Notes to Unaudited Pro Forma Consolidated Statement of Income
Year Ended December 31, 1997
(in thousands)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
AMORTIZATION OF INTANGIBLES:
(10) To record amortization expense based upon the expected useful lives and
fair value of intangible assets acquired in connection with the
Survivair Acquisition as follows:
COST AMORTIZATION
-------------- ------------
Goodwill Useful life of 40 years $ 11,700 $ 122
Patents Useful life of 15 years $ 1,500 $ 42
Acquired technology Useful life of 10 years $ 2,800 $ 117
-------------- ------------
Totals $ 16,000 $ 281
============== ------------
New amortization amount $ 281
To reclassify amortization expense from operating expense. $ 12
Remove old amortization amount $ (12)
--------
Increase in amortization expense $ 281
========
INTEREST EXPENSE:
(11) To record interest expense on the portion of the acquisition price
financed with bank borrowings. The interest rate will be set quarterly
at an effective rate equal to LIBOR plus 0.7%.
Amount of indebtedness $ 27,350
Assumed interest rate on indebtedness 6.4%
---
Interest expense $ 729
To reclassify interest expense from net other expense $ 11
--------
Increase in interest expense $ 740
========
NET OTHER EXPENSE:
(12) To reclassify sales discounts from other expense to sales. $ (53)
To reclassify purchase discounts from other expense to cost of sales. $ 34
To reclassify interest expense from net other expense $ 11
To remove transaction related expenses charged to operations. $ (172)
--------
Decrease in other expense $ (180)
========
INCOME TAXES:
(13) To record the income tax benefit on the income reported by Comasec
Holdings Inc. & Subsidiary if the income was to be taxed at a rate of 38%.
This rate reflects the federal statutory rate of 35% plus the effect of
state and local income taxes, less the income tax paid by Comasec Holdings
Inc. & Subsidiary. $ (128)
To record the income tax effect of the pro forma adjustments at a rate of
38%. This rate is based upon a federal statutory rate equal to 35% plus
the effect of state and local income taxes. $ (324)
---------
Decrease in income taxes $ (452)
========
</TABLE>
6
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