FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
/ X / QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1994
Commission file number: 1-5731
Willcox & Gibbs, Inc.
(Exact name of registrant as
specified in its charter)
New York 13-1474527
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
530 Fifth Avenue, New York, New York 10036
(Address of principal executive offices) (Zip Code)
(212) 869-1800
(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 / /
Indicate number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date:
Date Class Shares Outstanding
April 29, 1994 Common Stock 24,438,952
<PAGE>
WILLCOX & GIBBS, INC.
INDEX
Page Number
Part I - Financial Information
[S] [C]
Condensed Consolidated Balance Sheets (Unaudited)
at March 31, 1994 and December 31, 1993...................... 1
Condensed Consolidated Statements of Income
(Unaudited) for the Three Months Ended March 31, 1994
and 1993..................................................... 2
Condensed Consolidated Statements of Cash Flow
(Unaudited) for the Three Months Ended March 31, 1994
and 1993..................................................... 3
Notes to Unaudited Condensed Consolidated
Financial Statements......................................... 4
Report of Independent Accountants............................ 7
Management's Discussion and Analysis of Financial
Condition and Results of Operations.......................... 8
Part II - Other Information....................................... 11
<PAGE>
WILLCOX & GIBBS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(000's omitted, except for share amounts)
Mar. 31, Dec. 31,
1994 1993
(UNAUDITED)
[S] [C] [C]
ASSETS
Current Assets
Cash and Cash Equivalents $ 9,812 $ 19,131
Accounts and Notes Receivable - Net 131,669 129,163
Inventories of Finished Goods 118,214 117,577
Income Taxes Receivable 0 1,407
Prepaid Expenses and Other Current Assets 6,477 9,002
Deferred Income Taxes 1,796 1,796
-------- --------
Total Current Assets 267,968 278,076
Investments and Noncurrent Receivables 2,295 2,599
Property, Plant & Equipment - Net 53,230 52,682
Other Assets 4,870 4,350
Deferred Income Taxes 693 693
Net Assets of Discontinued Operations 42,951 43,337
Cost in Excess of Net Assets of Acquired Businesses
- Net 46,758 47,079
-------- --------
$418,765 $428,816
-------- --------
-------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Short-Term Debt $ 21,110 $ 61,500
Current Installments of Long-Term Debt 16,429 9,261
Accounts and Notes Payable - Trade and Other
Liabilities 132,381 136,030
Income Taxes Payable 691 0
-------- --------
Total Current Liabilities 170,611 206,791
Long-Term Debt 118,994 125,975
Other Long-Term Liabilities 3,706 3,528
Stockholders' Equity
Preferred Stock (Authorized 600,000 Shares,
None Issued) 0 0
Preference Stock (Authorized 2,000,000 Shares,
None Issued) 0 0
Common Stock (24,705,233 and 21,213,953 Shares
Issued in 1994 and 1993) 24,705 21,214
Capital Surplus 81,370 53,818
Retained Earnings 23,834 21,874
Cumulative Foreign Translation Adjustment (1,279) (1,333)
Marketable Equity Security Adjustment (750) (625)
Treasury Stock, at Cost (266,281 Shares) (2,426) (2,426)
-------- --------
125,454 92,522
-------- --------
$418,765 $428,816
-------- --------
-------- --------
SEE ACCOMPANYING REPORT OF INDEPENDENT ACCOUNTANTS AND NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
WILLCOX & GIBBS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(000's omitted, except for per share amounts)
THREE MONTHS ENDED
MARCH 31
1994 1993
(UNAUDITED)
[S] [C] [C]
Net Sales $244,607 $111,824
Cost of Goods Sold 194,283 89,060
-------- --------
Gross Profit 50,324 22,764
Selling and Administrative Expenses 45,061 19,236
-------- --------
Operating Profit 5,263 3,528
-------- --------
Interest Expense 2,245 1,455
-------- --------
Other Income (Expense) - Net 76 (36)
-------- --------
Income from Continuing Operations Before Income Taxes 3,094 2,037
Provision for Income Taxes 1,361 839
-------- --------
Income from Continuing Operations 1,733 1,198
Discontinued Operations, Net of Income Tax Expense of
$175 and $536 232 624
-------- --------
Income Before Cumulative Effect of Change in
Accounting For Income Taxes 1,965 1,822
Cumulative Effect of Change in Accounting For
Income Taxes 0 660
-------- --------
Net Income $1,965 $2,482
-------- --------
-------- --------
Income per Common Share
Income from Continuing Operations $0.08 $0.06
Discontinued Operations 0.01 0.03
-------- --------
Income Before Cumulative Effect of Change in
Accounting For Income Taxes 0.09 0.09
Cumulative Effect of Change in Accounting For
Income Taxes 0.00 0.03
-------- --------
Net Income $0.09 $0.12
-------- --------
-------- --------
Average Number of Common and Common Equivalent Shares 22,191 20,949
-------- --------
-------- --------
Dividends per Common Share $0.00 $0.00
-------- --------
-------- --------
SEE ACCOMPANYING REPORT OF INDEPENDENT ACCOUNTANTS AND NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(000's omitted)
THREE MONTHS ENDED
MARCH 31
1994 1993
(UNAUDITED)
[S] [C] [C]
Net Cash Provided By (Used In) Operating Activities $ 3,923 ($952)
--------- --------
Cash Flows From Investing Activities
Capital Expenditures (2,341) (1,837)
Sale Of Short-Term Investments 0 12,874
Other Investing Activities (1,177) 181
--------- --------
Net Cash (Used In) Provided By Investing
Activities (3,518) 11,218
--------- --------
Cash Flows From Financing Activities
Net Payments Under Line Of Credit Arrangements (40,390) 0
Sale Of Common Stock To Rexel 31,043 0
Other Debt Payments And Sundry Financing
Activities (377) (507)
--------- --------
Net Cash Used In Financing Activities (9,724) (507)
--------- --------
Net (Decrease) Increase In Cash (9,319) 9,759
Cash And Cash Equivalents At Beginning Of Period 19,131 15,567
--------- --------
Cash And Cash Equivalents At End Of Period $ 9,812 $25,326
--------- --------
--------- --------
SEE ACCOMPANYING REPORT OF INDEPENDENT ACCOUNTANTS AND NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
WILLCOX & GIBBS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. The accompanying financial information should be read in conjunction with
the financial statements, including the notes thereto, for the year ended
December 31, 1993. The condensed consolidated balance sheet as of
December 31, 1993 has been summarized from the Company's audited
consolidated balance sheet as of that date.
2. Results for interim periods are not necessarily indicative of the results
to be expected for the year. The accompanying financial information
reflects all adjustments which are, in the opinion of Management,
necessary for a fair statement of the results for the period.
3. Inventories are stated at the lower of cost (determined by either LIFO for
continuing operations or FIFO for discontinued operations) or market.
4. Income per common share is computed by dividing net income by the weighted
average number of common and common equivalent shares outstanding during
the periods.
5. On April 12, 1993 the Company acquired Sacks Electrical Supply Co.
("Sacks"), a distributor of electrical supplies and components for $13.9
million (including $0.3 million of acquisition costs).
On December 17, 1993, the Company acquired Summers Group, Inc.
("Summers"), a distributor of electrical supplies and components, for
$60.7 million in cash (including $0.7 million of acquisition costs) and a
$25 million three-year note issued to the seller, plus contingent
consideration to be determined based on defined profits of Summers,
subject to a maximum purchase price of $120 million.
Each of these 1993 acquisitions has been recorded as a purchase, and the
excess of the total purchase price over the fair value of the net assets
acquired ($6.9 million for Sacks and $11.5 million for Summers) is being
amortized over 40 years. Sacks' and Summers' results of operations are
included in the Company's financial statements from the respective dates
of acquisition.
The following table summarizes the effect on consolidated sales and income
from continuing operations of the Company for the three months ended March
31, 1993, on an unaudited pro forma basis, assuming these acquisitions had
been consummated as of January 1, 1993 (000's omitted, except for income
per share).
<PAGE>
WILLCOX & GIBBS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Three months
Ended
March 31, 1993
[S] [C]
Sales $227,196
--------
--------
Income from Continuing Operations $ 2,382
--------
--------
Income per Share from Continuing Operations $ .11
--------
--------
The pro forma results are not necessarily indicative of what actually
would have occurred if the acquisition had been in effect at the beginning
of the period nor are they necessarily indicative of future consolidated
results.
6. In the fourth quarter of 1993, the Company has decided to sell its apparel
parts and supplies distribution business ("Apparel") and has engaged an
investment banking firm, of which a director of the Company is president,
to seek a purchaser. Accordingly, this business is included in the
Consolidated Statements of Income as discontinued operations for all
periods presented. Summarized results of the discontinued operations are
as follows (000's omitted):
Three Months Ended
March 31
1994 1993
[S] [C] [C]
Sales $18,839 $19,058
------- -------
------- -------
Net Income $ 232 $ 624
------- -------
------- -------
Interest expense of $984 and $956 for the three months ended March 31,
1994 and 1993, respectively, have been allocated to apparel operation
results based upon net assets of the apparel operation.
The assets of the apparel operations at March 31, 1994 and December 31,
1993 are included in the accompanying Condensed Consolidated Balance
Sheets as "Net assets of discontinued operations." The assets and
liabilities of the apparel operation included are as follows:
March 31, December 31,
1994 1993
[S] [C] [C]
Current Assets $42,907 $43,632
Property, plant and equipment - net 2,809 2,795
Investment and noncurrent receivables 1,547 1,180
Other assets 713 759
Cost in excess of net assets of acquired
businesses - net 1,577 1,590
------- -------
Total assets 49,553 49,956
Current liabilities 6,602 6,619
------- -------
Net assets $42,951 $43,337
------- -------
------- -------
<PAGE>
WILLCOX & GIBBS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
7. Effective January 1, 1993, the Company adopted FASB Statement No. 109,
"Accounting for Income Taxes." Under Statement 109, the liability method
is used in accounting for income taxes. Under this method, deferred tax
assets and liabilities are determined based on differences between
financial reporting and tax bases of assets and liabilities and are
measured using the enacted tax rates and laws that will be in effect when
the differences are expected to reverse. Prior to the adoption of
Statement 109, income tax expense was determined using the deferred
method. Deferred tax expense was based on items of income and expense
that were reported in different years in the financial statements and tax
returns and were measured at the tax rate in effect in the year the
difference originated.
As permitted by Statement 109, the Company has elected not to restate the
financial statements of any prior years. The effect of the change on
pretax income from continuing operations for the three months ended March
31, 1993 was not material; however, the cumulative effect of the change
increased net income by $660,000 or $.03 per share.
8. In connection with the resignation of an executive of the Company on March
18, 1994, the Company entered into an agreement with such executive which
provided, among other things, certain payments and acceleration of certain
other payments in connection with the executive's related employment
agreement. First quarter results for 1994 include charges of $1.7 million
($1.0 million net of tax) in connection with this agreement.
9. On March 1, 1994, the Company sold to Rexel, S.A. 3,491,280 newly issued
shares of Company common stock for a total cash purchase price of $31.4
million which was used to repay short-term debt. As a result, Rexel
increased its beneficial ownership of the outstanding common stock of the
Company from 30% to 40%.
10. At March 31, 1994, the Company was in default with respect to the interest
coverage ratio and fixed charges coverage ratio under the Revolving Credit
and Reimbursement Agreement, which default has been waived by the Banks.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
The Board of Directors of
Willcox & Gibbs, Inc.:
We have reviewed the accompanying condensed consolidated balance sheet of
Willcox & Gibbs, Inc. (the "Company") as of March 31, 1994, and the related
condensed consolidated statements of income and cash flows for three-month
periods ended March 31, 1994 and 1993. These financial statements are the
responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements for them to be in conformity
with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of December 31, 1993, and the
related consolidated statements of income, changes in stockholders' equity and
cash flows for the year then ended (not presented herein), and in our report
dated March 4, 1994, except as to the information presented in the last
paragraph of Note 11, for which the date is March 18, 1994, we expressed an
unqualified opinion on those consolidated financial statements. In our
opinion, the information set forth in the accompanying condensed consolidated
balance sheet as of December 31, 1993 is fairly stated, in all material
respects, in relation to the consolidated balance sheet from which it has been
derived.
Coopers & Lybrand
New York, New York
May 13, 1994
<PAGE>
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Results of Operations
Sales for the first quarter ended March 31, 1994 were $244.6 million
compared with $111.8 million for the same period a year ago. First quarter
sales of 1994 included a total of $123.8 million from Summers Group and The
Sacks Group, which were acquired in December 1993 and April 1993, respectively.
The Company reported income from continuing operations of $1.7
million or $.08 per share compared to $1.2 million or $0.6 per share in 1993.
Excluding charges associated primarily with the resignation of an officer of
the Company totalling $2.1 million ($1.2 million net of tax), income from
continuing operations for the 1994 quarter was $2.9 million or $.13 per share.
As previous announced, the Company has decided to sell its apparel
parts and supplies distribution business ("Apparel"). Results of Apparel are
included as discontinued operations for all periods presented. In addition,
the Company adopted Statement of Financial Accounting Standards No. 109
"Accounting for Income Taxes" ("SFAS 109") in the first quarter of 1993.
Adoption of this statement resulted in a credit to income in the first quarter
of 1993 of $0.7 million or $.03 per share which is reflected in results of
operations as the cumulative effect of a change in accounting principle.
In March 1994, as more fully discussed under "Liquidity; Capital
Resources", the Company sold 3.5 million newly issued shares of common stock to
Rexel, S.A. for $31.4 million. As a result of the issuance of these shares,
the average number of common and common equivalent shares has increased to 22.2
million for the first quarter of 1994 compared to 20.9 million for the same
period of the prior year.
As a result, net income of the Company was $2.0 million, or $.09 per
share for the first quarter of 1994 compared to net income of $2.5 million, or
$.12 per share for the comparable period of the prior year.
<PAGE>
The following table sets forth the percentages which certain income
and expense items bear to net sales:
Three Months Ended
March 31,
1994 1993
[S] [C] [C]
Net sales 100.0% 100.0%
------ ------
------ ------
Gross margin 20.6% 20.4%
Selling & administrative expenses 18.4 17.3
------ ------
Operating profit 2.2 3.1
Interest expense .9 1.3
Other income - -
------ ------
Income from continuing operations before
taxes 1.3% 1.8%
------ ------
------ ------
On a pro forma basis, assuming the Summers and Sacks acquisitions
were made on January 1, 1993, sales were up 7.7% reflecting improvement in
residential construction and industrial markets and notwithstanding the adverse
effect of the California earthquake and severe weather conditions in the mid-
Atlantic region. All electrical divisions reflected both sales and operating
income increases over the prior year. Strong competition continues to put
pressure on margins, which increased slightly to 20.6% from 20.4% for the same
period of the prior years.
Selling and administrative expense increased $25.8 million and was
18.4% of sales in the first quarter of 1994 compared to 17.3% for the same
period of the prior year. This increase reflected the additional operations
added through the above-mentioned acquisitions and the $2.1 million of charges
associated primarily with the resignation of an officer.
Interest expense increased to $2.2 million from $1.5 million,
reflecting the borrowings in connection with the Summers acquisition offset to
some extent by the paydown of debt with the funds received from the sale of
shares to Rexel.
As previously mentioned, the Company adopted SFAS 109 in the first
quarter of 1993. It is management's belief that the net deferred tax asset as
reflected on the financial statements will be realized based upon forecasted
future pretax earnings and taxable income as well as utilization of certain
carryback opportunities. Such forecasts reflect the disposals of operations
that do not relate to the Company's core business, as well as the expected
results of the Company's most recent acquisitions.
Sales of the Company's discontinued apparel operations were down 1.2%
in the first quarter of 1994 compared to the same period of the prior year.
Margins were down, however, primarily as a result of lower margin product
comprising a greater proportion of sales. The Company expects to complete the
sale of Apparel during the second half of this year.
<PAGE>
Liquidity; Capital Resources
The Company's working capital requirements continue to be met by
internally generated funds and short-term borrowings. Management believes
sufficient cash resources will be available to support its long-term growth
strategies through internally generated funds, credit arrangements and the
ability of the Company to obtain additional financing. However, no assurance
can be given that financing will continue to be available on attractive terms.
On March 1, 1994, the Company sold to Rexel 3,491,280 newly issued
shares of Company common stock for a total cash purchase price of $31.4
million, which was used to repay short-term debt and significantly strengthen
the Company's balance sheet. As a result, Rexel's beneficial ownership of
outstanding common stock of the Company increased from 30% to 40%.
At March 31, 1994 the Company had cash of $9.8 million compared to
cash at December 31, 1993 of $19.1 million, reflecting cash used in investing
and financing activities of $13.2 million during the first quarter.
Indebtedness for borrowed money (including current installments and short-term
debt) was $156.5 million compared to $196.7 million at December 31, 1993. As
of March 31, 1994, $21.1 million was outstanding under the Company's bank
credit agreement and $48.9 million was available for future borrowings. Upon
consummation of any sale of Apparel, availability will be reduced to $50
million. At March 31, 1994, the Company was in default with respect to the
interest coverage ratio and fixed charges coverage ratio under the credit
agreement, which default has been waived by the banks.
During the first quarter of 1994 the Company's operating activities
provided $3.9 million in cash compared to $1.0 million of cash used in the
first three months of 1993. Capital expenditures were $2.3 million in 1994
compared to $1.8 million in 1993.
Working capital was $97.4 million and $71.3 million at March 31, 1994
and December 31, 1993, respectively, and the current ratio was 1.6 and 1.3,
respectively, at such dates.
Net worth was $125.5 million and $92.5 million at March 31, 1994 and
December 31, 1993, respectively, with the increase reflecting the sale of the
shares to Rexel. The ratio of net worth to long-term debt was 1.1 and .73,
respectively, at such dates.
The number of days sales represented by accounts receivable was 50.2
and 51.8, respectively, at March 31, 1994 and December 31, 1993. Inventories,
as a percentage of cost of sales, were 17.5% and 20.5%, respectively, for the
same periods.
<PAGE>
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
A special meeting of stockholders of the Company was held on February
24, 1994, to consider the proposal to issue 3,491,280 shares of common stock to
Rexel, S.A. The proposal was approved, with 16,430,004 shares voted in favor,
157,053 shares against, 78,172 abstentions and no broker nonvotes.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit No. Description
11.1 Computation of net income per common
and common equivalent shares.
15.1 Awareness letter of independent
accountants.
(b) Reports on Form 8-K
During the quarter ended March 31, 1994, a Report on Form 8-K, dated
March 1, 1994, was filed with information under Item 5 and Item 7.
<PAGE>
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.
WILLCOX & GIBBS, INC.
Date: May 16, 1994 By: /s/ Allan Gonopolsky
-------------------------------
Allan Gonopolsky
Vice President and
Chief Financial Officer
<PAGE>
Index to Exhibits
Exhibit No. Description
11.1 Computation of net income per common
and common equivalent shares.
15.1 Awareness letter of independent
accountants.
<PAGE>
Exhibit 11.1
WILLCOX & GIBBS, INC. AND SUBSIDIARIES
COMPUTATION OF NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE
(000's Omitted, Except Per Share Amounts)
THREE MONTHS ENDED
MARCH 31,
1994 1993
[S] [C] [C]
Income Applicable To Primary Common And Common
Equivalent Shares
Income From Continuing Operations $ 1,733 $ 1,198
Discontinued Operations 232 624
------- -------
Income Before Cumulative Effect Of A Change
In Accounting For Taxes 1,965 1,822
Cumulative Effect Of A Change In Accounting
For Taxes 0 660
------- -------
Net Income $ 1,965 $ 2,482
------- -------
------- -------
Income Applicable To Fully Diluted Common And Common
Equivalent Shares
Income From Continuing Operations $ 1,733 $ 1,198
Interest Reduction, Net of Taxes, Upon Conversion
Of Convertible Subordinated Debentures 490 499
------- -------
Income From Continuing Operations 2,223 1,697
Discontinued Operations 232 624
------- -------
Income Before Cumulative Effect Of A Change In
Accounting For Taxes 2,455 2,321
Cumulative Effect Of A Change In Accounting For
Taxes 0 660
------- -------
Net Income $ 2,455 $ 2,981
------- -------
------- -------
Primary Shares:
Weighted Average Number Of Common Shares And Common
Share Equivalents Outstanding During The Period:
Common (Net Of Treasury Shares) 22,111 20,948
Options 80 1
------- -------
Total 22,191 20,949
------- -------
------- -------
Fully Diluted Shares:
Weighted Average Number Of Common Shares And Common
Share Equivalents Outstanding During The Period:
Common (Net Of Treasury Shares) 22,111 20,948
Options 80 1
Conversion Of Subordinated Debentures 5,225 5,225
------- -------
Total 27,416 26,174
------- -------
------- -------
<PAGE>
Exhibit 11.1
(continued)
[S] [C] [C]
Earnings Per Share
Primary
Income From Continuing Operations $0.08 $0.06
Discontinued Operations 0.01 0.03
------- -------
Income Before Cumulative Effect Of A Change
In Accounting For Taxes 0.09 0.09
Cumulative Effect Of A Change In Accounting
For Taxes 0.00 0.03
------- -------
Net Income $.09 $0.12
------- -------
------- -------
Earnings Per Share
Fully Diluted
Income From Continuing Operations $0.08 $0.06
Discounted Operations 0.01 0.03
------- -------
Income Before Cumulative Effect Of A Change
In Accounting For Taxes 0.09 0.09
Cumulative Effect Of A Change In Accounting
For Taxes 0.00 0.03
------- -------
Net Income $0.09 $0.12
------- -------
------- -------
<PAGE>
Exhibit 15.1
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Willcox & Gibbs, Inc. Registration on Form S-8
We are aware that our report dated May 13, 1994 on our review of the condensed
consolidated balance sheet of Willcox & Gibbs, Inc. as of March 31, 1994, and
the related condensed consolidated statements of income and cash flows for the
three-month period ended March 31, 1994 included in the Company's report on
quarterly Form 10-Q for the quarter ended March 31, 1994 is incorporated by
reference in Registration Nos. 2-77570, 33-4584, 33-14148, 33-32648 and 33-
54440 on Form S-8. Pursuant to Rule 436(e) under the Securities Act of 1933,
this report should not be considered a part of such registration statements
prepared or certified by us within the meaning of Sections 7 and 11 of the Act.
Coopers & Lybrand
New York, New York
May 13, 1994
