SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
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SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NO. 1-5439
DEL LABORATORIES, INC.
----------------------
(Exact name of registrant as specified in its charter)
DELAWARE 13-1953103
------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
178 EAB PLAZA, UNIONDALE, NEW YORK 11556
----------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (516) 844-2020
-------------------------
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 ( )
The number of shares of Common Stock, $1 par value, outstanding as of November
6, 2000 was 7,595,209.
<PAGE>
DEL LABORATORIES, INC. AND SUBSIDIARIES
Index
Part I. FINANCIAL INFORMATION
PAGE NO.
PAGE
Item 1. Financial Statements:
Consolidated Balance Sheets as of
September 30, 2000 and December 31, 1999 3
Consolidated Statements of Operations for the three and nine
months ended September 30, 2000 and 1999 4
Consolidated Statements of Cash Flows for the
nine months ended September 30, 2000 and 1999 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
All other schedules and compliance information called for by the instructions to
Form 10-Q have been omitted since the required information is not present or not
present in amounts sufficient to require submission.
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<PAGE>
<TABLE>
<CAPTION>
DEL LABORATORIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands except for share and per share data)
September 30 December 31
ASSETS 2000 1999
------ ------------ -----------
(UNAUDITED)
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 3,273 $ 3,585
Accounts receivable-less allowance for doubtful accounts
of $1,300 in 2000 and 1999 58,253 45,942
Income taxes receivable -- 1,963
Inventories 61,884 59,155
Deferred income taxes, net 5,272 5,272
Prepaid expenses and other current assets 3,911 2,455
--------- ---------
Total current assets 132,593 118,372
Property, plant and equipment, net 37,905 37,191
Intangibles arising from acquisitions, net 16,440 17,101
Other assets 8,835 7,897
--------- ---------
Total assets $ 195,773 $ 180,561
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 4,120 $ 3,888
Accounts payable 28,443 27,175
Accrued liabilities 16,044 12,837
Income taxes payable 314 --
--------- ---------
Total current liabilities 48,921 43,900
Long-term pension liability, less current portion 9,052 9,052
Deferred income taxes, net 986 986
Long-term debt, less current portion 82,517 75,750
--------- ---------
Total liabilities 141,476 129,688
--------- ---------
Shareholders' equity:
Preferred stock $.01 par value, authorized
1,000,000 shares; no shares issued -- --
Common stock $1 par value, authorized
20,000,000 shares; issued 10,000,000 shares 10,000 10,000
Additional paid-in capital -- 127
Accumulated other comprehensive loss (1,260) (1,029)
Retained earnings 77,888 75,136
--------- ---------
86,628 84,234
Less: Treasury stock at cost, 2,404,791 shares
at September 30, 2000 and 2,455,420 at December 31, 1999 (31,236) (32,120)
Receivables for stock options exercised (1,095) (1,241)
--------- ---------
Total shareholders' equity 54,297 50,873
--------- ---------
Total liabilities and shareholders' equity $ 195,773 $ 180,561
========= =========
</TABLE>
The accompanying notes are an integral part of the
consolidated financial statements.
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<PAGE>
<TABLE>
<CAPTION>
DEL LABORATORIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(In thousands except for share and per share data)
(UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
------------ ------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales $ 77,653 $ 64,586 $ 221,722 $ 196,899
Cost of goods sold 34,807 34,748 98,116 93,245
Selling and administrative expenses 38,649 37,289 111,552 106,900
----------- ----------- ----------- -----------
Operating income (loss) 4,197 (7,451) 12,054 (3,246)
Other income (expense):
Gain on sale of facility -- -- 362 1,734
Interest expense (2,171) (1,528) (6,268) (4,270)
Interest income 129 16 155 41
----------- ----------- ----------- -----------
Earnings (Loss) before income taxes 2,155 (8,963) 6,303 (5,741)
Income taxes expense (benefit) 981 (2,897) 2,723 (1,608)
----------- ----------- ----------- -----------
Net earnings (loss) $ 1,174 $ (6,066) $ 3,580 $ (4,133)
=========== =========== =========== ===========
Earnings (Loss) per common share:
Basic $ 0.15 $ (0.81) $ 0.47 $ (0.55)
=========== =========== =========== ===========
Diluted $ 0.15 $ (0.81) $ 0.47 $ (0.55)
=========== =========== =========== ===========
Weighted average common
shares outstanding:
Basic 7,576,000 7,503,000 7,555,000 7,534,000
=========== =========== =========== ===========
Diluted 7,652,000 7,503,000 7,639,000 7,534,000
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the
consolidated financial statements.
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<PAGE>
<TABLE>
<CAPTION>
DEL LABORATORIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(In thousands)
(UNAUDITED)
September 30
------------
2000 1999
---- ----
Cash flows from operating activities:
<S> <C> <C>
Net earnings (loss) $ 3,580 $ (4,133)
Adjustments to reconcile net earnings (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization 5,573 5,167
Provision for doubtful accounts 58 73
Gain on sale of facility (362) (1,734)
Other non-cash operating items 240 719
Changes in operating assets and liabilities:
Accounts receivable (12,473) (87)
Inventories (2,906) (6,242)
Prepaid expenses and other current assets (1,460) (2,471)
Other assets (939) (280)
Accounts payable 1,336 (1,233)
Accrued liabilities 3,234 1,825
Income taxes payable / receivable 2,888 (71)
-------- --------
Net cash used in operating activities (1,231) (8,467)
-------- --------
Cash flows provided by (used in) investing activities:
Proceeds from sale of facility 800 2,538
Property, plant and equipment additions (4,361) (4,948)
Additions to intangibles and other assets -- 85
-------- --------
Net cash used in investing activities (3,561) (2,325)
-------- --------
Cash flows provided by (used in) financing activities:
Borrowings under long-term debt 29,023 4,250
Principal payments under long-term debt (8,086) (329)
Borrowings under short-term lines of credit 1,500 14,750
Repayments of short-term lines of credit (17,250) (3,500)
Decrease in receivables for stock options exercised 6 7
Acquisition of treasury stock (696) (4,539)
Dividends paid -- (1,037)
-------- --------
Net cash provided by financing activities 4,497 9,602
-------- --------
Effect of exchange rate changes on cash (17) 8
-------- --------
Net decrease in cash and cash equivalents (312) (1,182)
Cash and cash equivalents at beginning of year 3,585 3,731
-------- --------
Cash and cash equivalents at end of period $ 3,273 $ 2,549
======== ========
</TABLE>
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<PAGE>
DEL LABORATORIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
The accompanying unaudited consolidated financial statements of Del
Laboratories, Inc. and subsidiaries (the Company) have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q. Accordingly,
they do not include all of the information and footnotes required by
generally accepted accounting principles for complete financial
statements. Interim results are not necessarily indicative of results for
a full year.
A summary of the Company's significant accounting policies is presented in
its 1999 Annual Report to Shareholders. Users of financial information
produced for interim periods are encouraged to refer to the footnotes
contained in the Annual Report to Shareholders when reviewing interim
financial results.
In the opinion of management, the accompanying interim financial
statements contain all material adjustments, consisting only of normal
recurring adjustments, necessary to present fairly the consolidated
financial position, results of operations and cash flows of the Company
for interim periods.
2. INVENTORY
---------
Classification of inventories (in thousands):
September 30 December 31
2000 1999
---- ----
Raw Materials $ 39,648 $ 27,936
Work In Process 5,145 6,226
Finished Goods 17,091 24,993
--------- ---------
$ 61,884 $ 59,155
========= =========
3. EARNINGS PER SHARE
------------------
Basic earnings per share is computed by dividing income available to
common shareholders (which for the Company equals its recorded net income)
by the weighted-average number of common shares outstanding during the
period. Diluted earnings per share reflects the potential dilution that
could occur if securities or other contracts to issue common stock, such
as stock options, were exercised, converted into common stock or otherwise
resulted in the issuance of common stock.
On November 15, 1999, the Company's Board of Directors approved a 2% stock
dividend. As a result, 147,581 shares of treasury stock were issued on
December 28, 1999 to shareholders of record on November 30, 1999.
Accordingly, the weighted average common shares outstanding in the
consolidated statement of operations for the three and nine months ended
September 30, 1999, have been restated to reflect the dividend.
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<PAGE>
3. EARNINGS PER SHARE (CONTINUED)
------------------------------
A reconciliation between the numerators and denominators of the basic and
diluted earnings (loss) per common share is as follows:
Three Months Ended Nine Months Ended
September 30 September 30
(Amounts in thousands, except per share data)
2000 1999 2000 1999
---- ---- ---- ----
Net earnings (loss) (numerator) $ 1,174 $(6,066) $ 3,580 $(4,133)
------- ------- ------- -------
Weighted-average common shares
(denominator for basic earnings
(loss) per share) 7,576 7,503 7,555 7,534
Effect of dilutive securities:
Employee stock options 76 -- 84 --
Weighted-average common and potential
common shares outstanding
(denominator for diluted earnings
(loss) per share) 7,652 7,503 7,639 7,534
Basic earnings (loss) per share $ 0.15 $ (0.81) $ 0.47 $ (0.55)
------- ------- ------- -------
Diluted earnings (loss) per share $ 0.15 $ (0.81) $ 0.47 $ (0.55)
------- ------- ------- -------
Employee stock options for 1,462,000 and 701,000 shares for the three
months ended September 30, 2000 and 1999, respectively, and 1,333,000 and
465,000 shares for the nine months ended September 30, 2000 and 1999,
respectively, were not included in the net earnings (loss) per share
because their effect would have been anti-dilutive.
4. COMPREHENSIVE INCOME (LOSS)
----------------------------
The components of comprehensive income (loss) for the three months and
nine months ended September 30, 2000 and 1999 are as follows:
Three Months Ended Nine Months Ended
September 30 September 30
(in thousands) (in thousands)
2000 1999 2000 1999
------- ------- ------- -------
Net earnings (loss) $ 1,174 $(6,066) $ 3,580 $(4,133)
Other comprehensive income (loss):
Foreign currency translation (108) 225 (266) 443
------- ------- ------- -------
Total comprehensive income (loss) $ 1,066 $(5,841) $ 3,314 $(3,690)
======= ======= ======= =======
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<PAGE>
5. SHAREHOLDERS' EQUITY
--------------------
As a result of stock options exercised on July 27, 2000, the excess of the
cost of treasury shares over the exercise price of options exercised was
recorded as a reduction of $752,000 to additional paid-in capital and a
reduction of $828,000 to retained earnings. The income tax benefit from
stock options exercised was $625,000 and $501,000 for the nine months
ended September 30, 2000 and September 30, 1999, respectively. The benefit
was recorded as an increase to additional paid-in capital.
6. SEGMENT INFORMATION
-------------------
The Company operates in two segments, Cosmetic and Pharmaceutical, that
have been organized by the products and services they offer. The Cosmetic
segment's principal products are nail care, nail color, color cosmetics,
beauty implements, bleaches and depilatories, personal care products and
other related cosmetic items. The Pharmaceutical segment's principal
products are proprietary oral analgesics, acne treatment products and
first aid products. The accounting policies of the segments are the same
as those described in the summary of significant accounting policies. The
Company evaluates the performance of its operating segments based on
operating income. Certain assets, including property, plant and equipment
and deferred tax assets, are not allocated to the identifiable segments;
depreciation of unallocated assets are charged to the Cosmetic segment.
Three Months Ended Nine Months Ended
September 30 September 30
(in thousands) (in thousands)
2000 1999 2000 1999
---- ---- ---- ----
Net sales
Cosmetic $ 59,961 $ 48,403 $ 172,867 $ 149,902
Pharmaceutical 17,692 16,183 48,855 46,997
--------- --------- --------- ---------
Consolidated $ 77,653 $ 64,586 $ 221,722 $ 196,899
========= ========= ========= =========
Operating income (loss)
Cosmetic $ 310 $ (10,307) $ 3,882 $ (10,034)
Pharmaceutical 3,887 2,856 8,172 6,788
--------- --------- --------- ---------
Consolidated $ 4,197 $ (7,451) $ 12,054 $ (3,246)
========= ========= ========= =========
Gain on asset sale $ -- $ -- $ 362 $ 1,734
Interest expense, net 2,042 1,512 6,113 4,229
--------- --------- --------- ---------
Earnings (Loss) before taxes $ 2,155 $ (8,963) $ 6,303 $ (5,741)
========= ========= ========= =========
Depreciation and amortization
Cosmetic $ 1,844 $ 1,681 $ 5,223 $ 4,838
Pharmaceutical 121 114 350 329
--------- --------- --------- ---------
Consolidated $ 1,965 $ 1,795 $ 5,573 $ 5,167
========= ========= ========= =========
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<PAGE>
7. SUPPLEMENTAL CASH FLOW INFORMATION
----------------------------------
On February 22, 2000, the Company purchased a 68,000 square foot
manufacturing, warehousing and office facility in Barrie, Ontario for
$1,828,000. The purchase was financed with a combination of a mortgage
bridge loan and a five-year mortgage. The mortgage bridge loan was repaid
on April 3, 2000.
Interest of $6,300,000 and $4,300,000, and income taxes of $1,700,000 and
$700,000 were paid in the nine months ended September 30, 2000 and
September 30, 1999, respectively. Income tax refunds of $2,200,000 related
to taxes paid in 1999 were received in the nine months ended September 30,
2000.
8. GAIN ON SALE OF FACILITY
On April 3, 2000, the Company sold a 39,000 square foot manufacturing,
warehousing and office facility in Barrie, Ontario, with a net book value
of approximately $442,000 for net proceeds of approximately $804,000.
Approximately $640,000 of the proceeds was used to satisfy a mortgage
bridge loan on its new facility in Barrie, Ontario purchased on February
22, 2000.
9. LONG-TERM DEBT
--------------
On April 26, 2000, the Company refinanced its purchase money promissory
note of $3,822,000 for its property in North Carolina with a five-year
$4,523,000 mortgage on the land and buildings. The mortgage includes an
interest rate based on LIBOR and terms that provide for the maintenance of
certain financial ratios.
-9-
<PAGE>
Item 2.Management's Discussion and Analysis of Financial Condition and Results
of Operations
(1) RESULTS OF OPERATIONS
---------------------
SECOND QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2000 VERSUS
SEPTEMBER 30, 1999
---------------------------------------------------------------
NET SALES
---------
Net sales for the third quarter of 2000 were $77.7 million, an increase of
20% compared to $64.6 million in 1999. Net sales for the first nine months
of 2000 were $221.7 million, an increase of 12.6% compared to $196.9
million in 1999.
Cosmetic net sales for the third quarter of 2000 were $60.0 million, an
increase of 23.9% compared to $48.4 million in 1999. Cosmetic net sales
for the first nine months of 2000 were $172.9 million, an increase of
15.3% compared to $149.9 million in 1999. The increase is due primarily to
volume growth in the Sally Hansen family and N.Y.C. New York Color brands,
together with lower product returns.
Pharmaceutical net sales for the third quarter of 2000 were $17.7 million,
an increase of 9.3% compared to $16.2 million in 1999. Pharmaceutical net
sales for the first nine months of 2000 were $48.9 million, an increase of
4.0% compared to $47.0 million in 1999. The increase is due primarily to
volume growth in the Orajel brand and the Dermarest Psoriasis brand
launched earlier in the year.
COST OF GOODS SOLD
------------------
Cost of goods sold in the third quarter of 2000 were $34.8 million, or
44.8% of net sales, as compared to $34.7 million, or 53.8% of net sales in
1999. Cost of goods sold for the first nine months of 2000 were $98.1
million, or 44.3% of net sales, as compared to $93.2 million, or 47.4% of
net sales in 1999. The decrease in cost of sales as a percentage of net
sales is primarily attributable to lower product returns. Additionally,
the third quarter of 1999 included an increase of $4.5 million in the
inventory valuation reserve to reflect the estimated market value of the
Naturistics inventory pursuant to the Company's plan to reduce excess and
slow moving inventory of such brands.
SELLING AND ADMINISTRATIVE EXPENSES
-----------------------------------
Selling and administrative expenses for the third quarter of 2000 were
$38.6 million, or 49.8% of net sales, as compared to $37.3 million, or
57.7% of net sales in 1999. Selling and administrative expenses for the
first nine months of 2000 were $111.6 million, or 50.3% of net sales, as
compared to $106.9 million, or 54.3% of net sales in 1999. The decrease in
selling and administrative expenses, as a percentage of net sales, is
primarily attributable to expenses increasing at a lower rate than the
increase in net sales.
GAIN ON SALE OF FACILITY
------------------------
On April 3, 2000, the Company sold a 39,000 square foot manufacturing,
warehousing and office facility in Barrie, Ontario, with a net book value
of approximately $442,000, for net proceeds of approximately $804,000.
NET INTEREST EXPENSE
--------------------
Interest expense, net of interest income, for the third quarter of 2000
was $2.0 million, compared to $1.5 million in 1999. Interest expense, net
of interest income for the first nine months of 2000 was $6.1 million,
compared to $4.2 million in 1999. The increases are due to higher average
borrowings for working capital requirements in 2000, in addition to
increased borrowing rates, as compared to 1999.
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<PAGE>
INCOME TAXES
------------
Income taxes are based on the Company's expected annual effective tax rate
of 43% in 2000 compared to an estimated 28% tax benefit in 1999.
NET EARNINGS
------------
Net earnings for the third quarter of 2000 were $1.2 million, compared to
a prior year net loss of $6.1 million. Net earnings for the first nine
months of 2000 were $3.6 million, compared to a prior year net loss of
$4.1 million.
(2) LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
At September 30, 2000 the Company had cash and cash equivalents of $3.3
million compared to $2.5 million at September 30, 1999.
Net cash used in operating activities was $1.2 million for the nine months
ended September 30, 2000 primarily due to an increase in accounts
receivable of $12.5 million, principally due to the timing of increased
shipments in the third quarter, partially offset by increases of $3.2
million in accrued liabilities and $2.9 million in income taxes payable /
receivable.
Cash used for property, plant and equipment additions was $4.4 million for
the nine months ended September 30, 2000 compared to $4.9 million in 1999.
Net cash provided by financing activities for the nine months ended
September 30, 2000 was $4.5 million due to proceeds received under the
Company's revolving credit agreement and short-term borrowings under a
line of credit with a bank, partially offset by repayments of short-term
borrowings and principal payments of long-term debt.
On April 3, 2000, the Company sold a 39,000 square foot manufacturing,
warehousing and office facility in Barrie, Ontario, with a net book value
of approximately $442,000 for net proceeds of approximately $804,000.
Approximately $640,000 of the proceeds was used to satisfy a mortgage
bridge loan on its new facility in Barrie, Ontario purchased on February
22, 2000.
On April 26, 2000, the Company refinanced its purchase money promissory
note of $3,822,000 for its property in North Carolina with five-year
$4,523,000 mortgage on the land and buildings. The mortgage includes an
interest rate based on LIBOR and terms that provide for the maintenance of
certain financial ratios.
The Company believes that cash from future operations, cash on hand and
amounts available from the credit facility, will be sufficient to satisfy
its liquidity needs for the foreseeable future.
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<PAGE>
NEW ACCOUNTING PRONOUNCEMENTS
-----------------------------
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standard No. 133, "Accounting for Derivative Instruments and
Hedging Activities" (SFAS No. 133) as amended by SFAS 137 and SFAS 138,
which is effective for quarters of fiscal years beginning after June 15,
2000. SFAS No. 133 provides guidance for accounting for all derivative
instruments, including certain derivative instruments embedded in other
contracts, and for hedging activities. The Company does not believe that
the implementation of SFAS No. 133 will have a significant impact on its
financial position or results of operations.
In May 2000, the Emerging Issues Task Force issued EITF 00-14 "Accounting
for Certain Sales Incentives". The issue addresses the recognition,
measurement and income statement classification for sales incentives
offered voluntarily by a vendor, without charge, to customers that can be
used in, or that are exercisable by a customer as a result of a single
exchange transaction. Implementation of the EITF is required in the fourth
quarter of fiscal 2000. Management has determined that implementation of
EITF 00-14 will result in the reclassification of certain selling costs
from selling and administrative expenses to net sales and is in the
process of quantifying the amount of such reclassification.
FORWARD - LOOKING STATEMENTS
----------------------------
Management's Discussion and Analysis of the Results of Operations and
Financial Condition and other sections of this Form 10-Q include
"forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities and Exchange Act
of 1934 (the "Exchange Act"). All statements other than statements of
historical information provided herein are forward-looking statements and
may contain information about financial results, economic conditions,
trends and known uncertainties. The forward-looking statements contained
herein are subject to certain risks and uncertainties that could cause
actual results to differ materially from those reflected in the
forward-looking statements. Factors that might cause such a difference
include, but are not limited to, delays in introducing new products or
failure of consumers to accept new products, actions by competitors which
may result in mergers, technology improvement or new product
introductions, the dependence on certain national chain drug stores and
mass merchandiser relationships due to the concentration of sales
generated by such chains, changes in fashion oriented color cosmetics
trends, and trends in the general economy.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which reflect management's analysis, judgment, belief or
expectation only as of the date hereof. The Company undertakes no
obligation to publicly revise these forward-looking statements to reflect
events or circumstances that arise after the date hereof. In addition to
the disclosure contained herein, readers should carefully review any
disclosure of risks and uncertainties contained in other documents the
Company files or has filed from time to time with the Securities and
Exchange Commission pursuant to the Exchange Act.
-12-
<PAGE>
PART II - OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) Exhibit 27.1 Financial Data Schedule
(b) Reports on Form 8-K
None
-13-
<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.
DEL LABORATORIES, INC.
----------------------
(Registrant)
DATE: NOVEMBER 6, 2000 /S/ DAN K. WASSONG
---------------------- -----------------------
Dan K. Wassong
Chairman, President and
Chief Executive Officer
DATE: NOVEMBER 6, 2000 /S/ ENZO J. VIALARDI
---------------------- ------------------------------
Enzo J. Vialardi
Executive Vice President and
Chief Financial Officer
<PAGE>
