<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
___________________
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: JULY 1, 2000
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________ to __________
Commission file number: 333-32207
HCC INDUSTRIES INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 95-2691666
------------------------------ ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4232 TEMPLE CITY BLVD., ROSEMEAD, CALIFORNIA 91770
--------------------------------------------------
(Address of principal executive offices)
(626) 443-8933
--------------------------------------------------
(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 ( )
Registrant's Common Stock, outstanding at August 7, 2000 was 137,945 shares.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
HCC INDUSTRIES INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
ASSETS
JULY 1, APRIL 1,
2000 2000
--------- ---------
(UNAUDITED)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 10,956 $ 14,537
Trade accounts receivable, less allowance for
doubtful accounts of $60 at July 1, 2000
and $51 at April 1, 2000 12,970 10,041
Inventories 4,149 4,515
Income taxes receivable 1,027 2,255
Prepaid and other current assets 650 728
--------- ---------
Total current assets 29,752 32,076
PROPERTY, PLANT AND EQUIPMENT, NET 22,601 21,605
OTHER ASSETS:
Intangible assets 4,991 5,063
Deferred financing costs 2,632 2,727
Deferred income taxes 4,100 4,100
Restricted cash 6,200 6,197
--------- ---------
TOTAL ASSETS $ 70,276 $ 71,768
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Current portion of long-term debt $ 7,026 $ 6,994
Accounts payable 2,754 2,950
Accrued liabilities 6,516 8,877
--------- ---------
Total current liabilities 16,296 18,821
LONG TERM LIABILITIES:
Long-term debt, net of current portion 97,664 97,475
Other long-term liabilities 8,982 9,178
--------- ---------
122,942 125,474
--------- ---------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIT):
Common stock; $.10 par value; authorized 550,000
shares, issued and outstanding 137,945 shares at
July 1, 2000 and 135,495 shares at April 1, 2000 14 14
Additional paid-in capital 326 200
Accumulated deficit (53,006) (53,920)
--------- ---------
TOTAL STOCKHOLDERS' DEFICIT (52,666) (53,706)
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 70,276 $ 71,768
========= =========
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated financial statements.
2
<PAGE>
HCC INDUSTRIES INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(IN THOUSANDS, EXCEPT SHARE DATA)
UNAUDITED
<TABLE>
<CAPTION>
THREE MONTHS ENDED
--------------------------
JULY 1, JULY 3,
2000 1999
---------- ----------
<S> <C> <C>
NET SALES $ 18,517 $ 12,218
Cost of goods sold 12,360 9,146
---------- ----------
GROSS PROFIT 6,157 3,072
Selling, general and administrative expenses 1,961 1,569
---------- ----------
EARNINGS FROM OPERATIONS 4,196 1,503
---------- ----------
OTHER INCOME (EXPENSE):
Interest and other income 190 192
Interest expense (2,862) (2,827)
---------- ----------
Total other expense, net (2,672) (2,635)
---------- ----------
EARNINGS (LOSS) BEFORE TAXES 1,524 (1,132)
Taxes (benefit) on earnings (loss) 610 (442)
---------- ----------
NET EARNINGS (LOSS) $ 914 $ (690)
========== ==========
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated financial statements.
3
<PAGE>
HCC INDUSTRIES INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
UNAUDITED
<TABLE>
<CAPTION>
THREE MONTHS ENDED
----------------------------------
JULY 1, JULY 3,
2000 1999
----------- ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss) $ 914 $ (690)
Reconciliation of net earnings (loss) to net cash
provided by operating activities:
Depreciation 526 484
Amortization 167 167
Non-cash stock compensation 76 ---
Deferred income taxes --- (441)
Changes in operating assets and liabilities:
(Increase) decrease in trade accounts receivable, net (2,929) 1,135
Decrease in inventories 366 202
Decrease (increase) in other assets 75 (310)
(Decrease) in other liabilities (2,557) (2,683)
Increase in accounts payable and income taxes
payable/receivable 1,032 440
----------- ------------
Net cash used in operating activities (2,330) (1,696)
----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment (900) (508)
----------- ------------
Net cash used in investing activities (900) (508)
----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of stock 50 ---
Principal payments on long-term debt (401) (277)
----------- ------------
Net cash used in financing activities (351) (277)
----------- ------------
Net (decrease) in cash and cash equivalents (3,581) (2,481)
Cash and cash equivalents at beginning of period 14,537 17,395
----------- ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 10,956 $ 14,914
=========== ============
SUPPLEMENTAL NONCASH FINANCING ACTIVITIES:
Capital lease obligations 622 536
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated financial statements.
4
<PAGE>
HCC INDUSTRIES INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
July 1, 2000
1. INTERIM FINANCIAL STATEMENTS:
The accompanying unaudited condensed consolidated financial statements
of HCC Industries Inc. and Subsidiaries (the "Company"), include all
adjustments (consisting of normal recurring entries) which management
believes are necessary for a fair presentation of the financial
position and results of operations for the periods presented. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. Interim financial statements
are subject to possible adjustments in connection with the annual audit
of the Company's accounts for the full year. The year end condensed
balance sheet data was derived from audited financial statements, but
does not include all disclosures required by generally accepted
accounting principles. It is suggested that the accompanying interim
financial statements be read in conjunction with the Company's audited
financial statements and footnotes as of and for the year ended April
1, 2000. Operating results for the three month period ended July 1,
2000 are not necessarily indicative of the operating results for the
full fiscal year.
The Company grants uncollateralized credit to its customers who are
located in various geographical areas. Estimated credit losses and
returns have been provided for in the financial statements and, to
date, have been within management's expectations. Accounts receivable
from SDI (the Company's largest customer) as of July 1, 2000 and April
1, 2000 were $5,484,000 and $4,713,000, respectively.
2. INVENTORIES:
Inventories consist of the following (in thousands):
<TABLE>
<CAPTION>
JULY 1, APRIL 1,
2000 2000
-------- ---------
<S> <C> <C>
Raw materials and component parts $ 2,797 $ 3,036
Work in process 1,352 1,479
-------- ---------
$ 4,149 $ 4,515
======== =========
</TABLE>
3. PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment consist of the following (in thousands):
<TABLE>
<CAPTION>
JULY 1, APRIL 1,
2000 2000
-------- ---------
<S> <C> <C>
Land $ 4,017 $ 4,017
Buildings and improvements 9,168 9,160
Furniture, fixtures and equipment 20,557 19,043
-------- ---------
33,742 32,220
Less accumulated depreciation (11,141) (10,615)
-------- ---------
$ 22,601 $ 21,605
======== =========
</TABLE>
5
<PAGE>
HCC INDUSTRIES INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
July 1, 2000
4. LONG-TERM DEBT:
Long-term debt consists of the following (in thousands):
<TABLE>
<CAPTION>
JULY 1, APRIL 1,
2000 2000
---------- ---------
<S> <C> <C>
10 3/4% Senior Subordinated Notes - interest payable
semi-annually; due May 2007 $ 90,000 $ 90,000
Subordinated Notes due Selling Shareholders -
12% interest payable semi-annually; due March 2001 2,500 2,500
Subordinated Bonus Notes - 10% interest payable
semi-annually; $3,000,000 due March 2001 and
$1,085,000 due April 2002 4,085 4,085
Term loans on land, building and improvements -
8% interest payable monthly; due May 2008 2,762 2,762
Other 5,343 5,122
---------- ---------
104,690 104,469
Less current portion 7,026 6,994
---------- ---------
$ 97,664 $ 97,475
========== =========
</TABLE>
5. CAPITAL STOCK:
The Company is authorized to issue an aggregate of 550,000 shares of
common stock. These shares may be issued in four different classes (A,
B, C or D shares) which differ only in voting rights per share. In June
2000, the Company sold 2,450 shares of Class A common stock to the
Company's Chairman for $50,000. In conjunction with this transaction,
the Company recorded non-cash compensation of $76,000 in the quarter
ended July 1, 2000. At July 1, 2000, the 137,945 outstanding shares of
common stock were designated as follows:
<TABLE>
<CAPTION>
SHARES VOTING RIGHTS
CLASS OUTSTANDING AMOUNT PER SHARE
----- ----------- ---------- -------------
<S> <C> <C> <C>
A 105,643 $ 11,000 1
B 27,506 3,000 1
C 4,316 --- None
D 480 --- 10
----------- ----------
137,945 $ 14,000
=========== ==========
</TABLE>
The remaining 412,055 shares of authorized but unissued common stock are
undesignated as to class.
6
<PAGE>
HCC INDUSTRIES INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
July 1, 2000
6. COMMITMENTS AND CONTINGENCIES:
Environmental
As an ongoing facet of the Company's business, it is required to
maintain compliance with various environmental regulations. The cost of
this compliance is included in the Company's operating results as
incurred. These ongoing costs include permitting fees and expenses and
specialized effluent control systems as well as monitoring and site
assessment costs required by various governmental agencies. In the
opinion of management, the maintenance of this compliance will not have
a significant effect on the financial position or results of operations
of the Company.
In August 1994, the U.S. Environmental Protection Agency ("EPA")
identified the Company as a potentially responsible party ("PRP") in
the El Monte Operable Unit ("EMOU") of the San Gabriel Valley Superfund
Sites. In early 1995, the Company and the EPA executed an
Administrative Consent Order which requires the Company and other PRP's
to perform a Remedial Investigation and Feasibility Study ("RI/FS") for
the EMOU. In addition, the Company's facility in Avon, Massachusetts is
subject to Massachusetts "Chapter 21E", the State's hazardous site
clean-up program. Uncertainty as to (a) the extent to which the Company
caused, if at all, the conditions being investigated, (b) the extent of
environmental contamination and risks, (c) the applicability of
changing and complex environmental laws (d) the number and financial
viability of other PRP's, (e) the stage of the investigation and/or
remediation, (f) the unpredictability of investigation and/or
remediation costs (including as to when they will be incurred), (g)
applicable clean-up standards, (h) the remediation (if any) that will
ultimately be required, and (i) available technology make it difficult
to assess the likelihood and scope of further investigation or
remediation activities or to estimate the future costs of such
activities if undertaken. In addition, liability under CERCLA is joint
and several, and any potential inability of other PRP's to pay their
prorata share of the environmental remediation costs may result in the
Company being required to bear costs in excess of its prorata share.
In fiscal 1997, the Company with the help of independent consultants,
determined a range of estimated costs of $9,000,000 to $11,000,000
associated with the various claims and assertions it faces. The time
frame over which the Company expects to incur such costs varies with
each site, ranging up to 20 years as of April 1, 2000. These estimates
are based partly on progress made in determining the magnitude of such
costs, experience gained from sites on which remediation is ongoing or
has been completed, and the timing and extent of remedial actions
required by the applicable governmental authorities. As a result, the
Company accrued $10,000,000 in fiscal 1997 for existing estimated
environmental remediation and other related costs which the Company
believes to be the best estimate of the liability. As of April 1, 2000,
the accrual for estimated environmental costs was $9,178,000. Actual
expenditures for environmental remediation were $196,000 for the
quarter ended July 1, 2000 and $238,000 for the fiscal year ended April
1, 2000.
Claims for recovery of costs already incurred and future costs have
been asserted against various insurance companies. The Company has
neither recorded any asset nor reduced any liability in anticipation of
recovery with respect to such claims made.
The Company believes its accrual is adequate, but as the scope of its
obligations becomes more clearly defined, this accrual may be modified
and related charges against earnings may be made.
7
<PAGE>
HCC INDUSTRIES INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
July 1, 2000
6. COMMITMENTS AND CONTINGENCIES, Continued:
Other
On March 3, 1998, Walter Neubauer, a former stockholder of the Company
and a current stockholder of SDI, filed a lawsuit in California
Superior Court (Case BC186937; Walter Neubauer vs. Andrew Goldfarb, et.
al.) against the Company and certain other stockholders alleging (i)
breach of fiduciary duty, (ii) fraud, (iii) negligent
misrepresentation, (iv) negligence, (v) violations of corporations code
and (vi) breach of contract. The allegations primarily relate to the
Company's exercise of an option to acquire Mr. Neubauer's stock in
August 1996. In September 1999, five of the six claims were dismissed
upon a summary judgement motion made by the Company, including all of
the claims against the Company. The remaining claim is against Andrew
Goldfarb for alleged violations of oral representations.
On May 7, 1998, the Company filed a lawsuit against Mr. Neubauer in
California Superior Court alleging (i) breach of contract, (ii)
intentional interference with business relations and (iii) interference
with prospective business advantage. All allegations relate to
violations of the noncompetition agreement executed by Mr. Neubauer in
August 1996. A preliminary injunction was granted in September 1998.
The Company is seeking damages of $50.0 million.
In addition to the above, the Company is involved in other claims and
litigation arising in the normal course of business. Based on the
advice of counsel and in the opinion of management, the ultimate
resolution of these matters will not have a significant effect on the
financial position or the results of operations of the Company.
Indemnification
Pursuant to the Recapitalization Agreement, the Selling Group has
agreed to indemnify the Company with respect to the after-tax costs of
contingent liabilities, subject to a cap for all indemnified
liabilities of $30 million. In February 1997, a $6.0 million interest
bearing escrow account was established by the selling stockholders
(the "Deferred Amount") to secure indemnity claims of the Company and
others, including with respect to environmental liabilities.
7. SUBSEQUENT EVENT
In July 2000, the Company purchased and retired $7,215,000 of its
10 3/4% Senior Subordinated Notes for $2,850,000 plus accrued interest.
The transaction will result in an extraordinary gain on the early
retirement of debt of $2,492,000, net of $1,662,000 in taxes.
8
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS (IN MILLIONS)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
---------------------------------------------
JULY 1, JULY 3,
2000 PERCENT 1999 PERCENT
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net sales $18.5 100.0% $12.2 100.0%
Gross profit 6.2 33.5% 3.1 25.4%
Selling, general and administrative
expenses 2.0 10.8% 1.6 13.1%
Earnings from operations 4.2 22.7% 1.5 12.3%
Other income/expense (2.7) -14.6% (2.6) -21.3%
Net earnings (loss) $0.9 4.9% $(0.7) -5.7%
</TABLE>
COMPARISON OF THE THREE MONTHS ENDED JULY 1, 2000 ("2001 QUARTER") TO THE
THREE MONTHS ENDED JULY 3, 1999 ("2000 QUARTER")
NET SALES
The Company's net sales increased by approximately 52.0% or $6.3
million to $18.5 million for the 2001 Quarter compared to sales of $12.2 million
for the 2000 Quarter. The significant increase was due to increasing demand in
all product lines.
Sales to existing aerospace, industrial process control, petrochemical
and telecommunications customers increased significantly in the 2001 Quarter.
Net non-automotive shipments increased by approximately 67% in the 2001 Quarter
compared to the 2000 Quarter. The Company experienced exceptionally strong
demand in both the telecommunications and petrochemical markets. Based on
current order volume, the Company expects strong demand in the industrial
process control, petrochemical and telecommunications markets to continue in the
next quarter.
On the automotive side, unit shipments of airbag initiator products
increased significantly due to increased volumes on existing programs and the
development of new programs. The Company's airbag initiator shipments to its
largest customer, Special Devices, Inc. ("SDI") increased 20% for the 2001
Quarter compared to the 2000 Quarter. Additionally, the Company's unit
shipments to its other automotive customers increased approximately 90% for
the 2001 Quarter compared to the 2000 Quarter. Overall, revenue from all
automotive shipments increased approximately 25% in the 2001 Quarter compared
to the 2000 Quarter. Based on current order volume, the Company expects
consistent unit volume and revenue from automotive products over the next
quarter. For the longer term, the Company expects SDI's unit volume to
decrease as a result of the recent purchase of SDI's largest domestic
competitor by SDI's largest customer.
GROSS PROFIT
Gross profit increased by approximately 100.0% or $3.1 million, to $6.2
million for the 2001 Quarter compared to $3.1 for the 2000 Quarter. Gross margin
increased to 33.5% for the 2001 Quarter from 25.4% for the 2000 Quarter.
The increase in gross profit is attributable to the increased sales
volume. The increase in gross margin is due to efficiencies gained through
operating leverage on the higher sales volume.
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, CONTINUED
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative ("S,G&A") expenses increased by
approximately 25.0% or $0.4 million to $2.0 million for the 2001 Quarter
compared to $1.6 million for the 2000 Quarter. S,G&A expenses as a percent to
sales decreased to 10.8% in the 2001 Quarter from 13.1% for the 2000 Quarter.
Selling expenses increased approximately 14% in the 2001 Quarter
compared to the 2000 Quarter. This increase was attributable to increased
payroll costs associated with additions to the Company's sales force and higher
selling commissions on approximately $6.3 million of increased sales.
Additionally, G&A expenses overall were higher in the 2001 Quarter as compared
to the 2000 Quarter due to increased compensation costs and other expenses. The
decreased percentage of S,G&A expenses to sales reflects the increased leverage
on the fixed portion of those expenses.
EARNINGS FROM OPERATIONS
Operating earnings increased 180.0% or $2.7 million to $4.2 million
for the 2001 Quarter compared to $1.5 million for the 2000 Quarter. Operating
margins increased to 22.7% in the 2001 Quarter from 12.3% for the 2000
Quarter.
The increase in operating earnings and margin was attributable to the
same factors (as discussed above) that contributed to the increase in gross
profit, gross margin and S,G&A expenses as a percent to sales.
OTHER EXPENSE, NET
Other expense, net (which is predominantly net interest expense) was
relatively flat at $2.7 million in the 2001 Quarter compared to $2.6 million
in the 2000 Quarter. The Company has $104.7 million of indebtedness as of
July 1, 2000 compared to $103.4 million at July 3, 1999.
NET EARNINGS
Net earnings increased by approximately $1.6 million to $0.9 million
for the 2001 Quarter from a net loss of $0.7 million in the 2000 Quarter.
The increase in net earnings was primarily attributable to the increase
in earnings from operations in the 2001 Quarter.
LIQUIDITY AND CAPITAL RESOURCES
Net cash used in operating activities was $2.3 million for the 2001
Quarter compared to $1.7 million for the 2000 Quarter. The increase of $0.6
million of cash consumed was primarily attributable to an increase in accounts
receivable.
Net cash used in investing activities was $0.9 million for the 2001
Quarter compared to $0.5 million for the 2000 Quarter.
10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, CONTINUED
As of July 1, 2000, the Company's outstanding indebtedness is $104.7
million, consisting of $90.0 million principal amount of the senior
subordinated notes, $2.5 million of subordinated notes due Selling
Shareholders pursuant to the Contingent Note Agreement, $4.1 million of
subordinated bonus notes pursuant to the Contingent Bonus Plan, $2.8 million
of mortgage debt and $5.3 million of other borrowings. The Company has a
Revolving Credit Facility up to $20.0 million which is collateralized by
accounts receivable and inventories. At July 1, 2000 no amounts were
outstanding and $19.6 million was available under the Revolving Credit
Facility. Borrowings under the Revolving Credit Facility may be used for
general and other corporate purposes.
In July 2000, the Company purchased and retired $7,215,000 of its 10
3/4% Senior Subordinated Notes for $2,850,000 plus accrued interest. The
transaction will result in an extraordinary gain on the early retirement of
debt of $2,492,000 net of $1,662,000 in taxes.
The Company believes that cash flow from operations and the
availability of borrowings under the Revolving Credit Facility will provide
adequate funds for ongoing operations, planned capital expenditures and debt
service during the term of such facility.
Capital expenditures for fiscal 2001 are expected to focus on vertical
integration with investments in equipment to expand manufacturing capacity in
machining, glass production, sealing and plating, as well as automation
equipment to lower production costs on the high volume production lines.
Expected capital expenditures for fiscal 2001 are approximately $3.5 million and
will be financed through working capital and the Revolving Credit Facility.
This filing contains statements that are "forward looking statements",
and includes, among other things, discussions of the Company's business strategy
and expectations concerning market position, future operations, margins,
profitability, liquidity and capital resources. Although the Company believes
that the expectations reflected in such forward looking statements are
reasonable, it can give no assurance that such expectations will prove to have
been correct. All phases of the operations of the Company are subject to a
number of uncertainties, risks and other influences, including general economic
conditions, regulatory changes and competition, many of which are outside the
control of the Company, any one of which, or a combination of which, could
materially affect the results of the Company's operations and whether the
forward looking statements made by the Company ultimately prove to be accurate.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to market risk from changes in interest rates on
the Company's Revolving Credit Facility. At July 1, 2000, the Company had no
outstanding borrowings under the line of credit and, therefore, changes in
interest rates would have no impact on the Company's results of operations.
11
<PAGE>
PART II - OTHER INFORMATION
Items 1 through 5 are omitted as they are not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: 12 - Computation of ratio of earnings to fixed charges
(b) Reports on Form 8-K - Not applicable
SIGNATURES
HCC INDUSTRIES INC.
DATED: August 9, 2000 /s/ Richard Ferraid
-----------------------------------------------
President and Chief Executive Officer
DATED: August 9, 2000 /s/ Christopher H. Bateman
-----------------------------------------------
Vice President and Chief Financial Officer
12
