<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information extracted from the
Form 10QSB of Pure World, Inc. for the period ended June 30, 1998 and is
qualified in its entirety by refernence to such financial statements.
</LEGEND>
<CIK> 0000356446
<NAME> PURE WORLD, INC.
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-01-1998
<PERIOD-START> MAR-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 7,323
<SECURITIES> 14
<RECEIVABLES> 3,726
<ALLOWANCES> 136
<INVENTORY> 5,132
<CURRENT-ASSETS> 16,435
<PP&E> 9,815
<DEPRECIATION> 921
<TOTAL-ASSETS> 30,312
<CURRENT-LIABILITIES> 4,273
<BONDS> 0
0
0
<COMMON> 75
<OTHER-SE> 22,542
<TOTAL-LIABILITY-AND-EQUITY> 30,312
<SALES> 11,257
<TOTAL-REVENUES> 12,053
<CGS> 5,586
<TOTAL-COSTS> 8,253
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 73
<INCOME-PRETAX> 3,727
<INCOME-TAX> 250
<INCOME-CONTINUING> 3,477
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,477
<EPS-PRIMARY> 0.46
<EPS-DILUTED> 0.42
</TABLE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: June 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File No.: 0-10566
Pure World, Inc.
(Exact name of small business issuer as specified in its charter)
Delaware 95-3419191
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
376 Main Street, Bedminster, New Jersey 07921
(Address of principal executive offices)
(908) 234-9220
(Issuer's telephone number)
N/A
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the issuer was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes X No _____
State the number of shares outstanding of each of the issuer's classes
of common stock: As of July 31, 1998, the issuer had 7,517,256 shares of its
common stock, par value $.01 per share, outstanding.
Transitional Small Business Disclosure Format (check one):
Yes No X
<PAGE>
PART I - FINANCIAL INFORMATION
- ------- ---------------------
Item 1. - Financial Statements
- ------- ---------------------
<TABLE>
PURE WORLD, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
($000 Omitted)
<CAPTION>
June 30,
1998
--------
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 7,323
Marketable securities 14
Accounts receivable, net of
allowance for uncollectible
accounts and returns and
allowances of $136 3,590
Inventories, net 5,132
Other 376
-------
Total current assets 16,435
-------
Securities available-for-sale 1,063
Investment in unaffiliated
natural products company 1,510
Plant and equipment, net 8,894
Notes receivable from affiliates 282
Goodwill, net of accumulated amortization of $346 1,645
Other assets 483
-------
Total assets $30,312
=======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,882
Current portion of long-term debt 856
Accrued expenses and other 1,535
-------
Total current liabilities 4,273
Long-term debt 3,422
-------
Total liabilities 7,695
-------
Stockholders' equity:
Common stock, par value $.01;
30,000,000 shares authorized;
7,517,256 shares outstanding 75
Additional paid-in capital 43,330
Accumulated deficit ( 20,737)
Unrealized losses on securities
available-for-sale ( 51)
-------
Total stockholders' equity 22,617
-------
Total liabilities and
stockholders' equity $30,312
=======
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
PURE WORLD, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
($000 Omitted, except per share data)
Three Months Ended
June 30,
---------------------
1998 1997
------ ------
<S> <C> <C>
Revenues:
Sales $ 6,162 $ 2,656
Net gains on investment securities 525 178
Interest and dividends 91 140
Other income - 221
------- -------
Total revenues 6,778 3,195
------- -------
Expenses:
Cost of goods sold 3,066 1,491
Selling, general and administrative 1,542 1,002
------- -------
Total expenses 4,608 2,493
------- -------
Income before income taxes 2,170 702
Provision for income taxes 123 40
------- -------
Net income $ 2,047 $ 662
======= =======
Basic net income per share $ .27 $ .09
======= =======
Diluted net income per share $ .25 $ .09
======= =======
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
PURE WORLD, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
($000 Omitted, except per share data)
<CAPTION>
Six Months Ended
June 30,
----------------------
1998 1997
-------- --------
<S> <C> <C>
Revenues:
Sales $11,257 $ 5,079
Net gains on investment securities 601 249
Interest and dividends 192 277
Other income 3 461
------- -------
Total revenues 12,053 6,066
------- -------
Expenses:
Cost of goods sold 5,586 2,748
Selling, general and administrative 2,740 2,069
------- -------
Total expenses 8,326 4,817
------- -------
Income before income taxes 3,727 1,249
Provision for income taxes 250 82
------- -------
Net income $ 3,477 $ 1,167
======= =======
Basic net income per share $ .46 $ .15
======= =======
Diluted net income per share $ .42 $ .15
======= =======
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
PURE WORLD, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
($000 Omitted)
<CAPTION>
Six Months Ended
June 30,
----------------------
1998 1997
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 3,477 $ 1,167
Adjustments:
Depreciation and amortization 261 210
Net marketable securities
transactions 396 1
Gain on sale of securities
available-for-sale ( 573) ( 244)
Change in inventories ( 1,505) ( 804)
Change in receivables ( 2,451) ( 277)
Change in accounts payable and
other accruals 1,994 123
Other, net ( 20) ( 24)
------- -------
Net cash provided by operating
activities 1,579 152
------- -------
Cash flows from investing activities:
Purchase of plant and equipment ( 6,891) ( 309)
Proceeds from sale of securities
available-for-sale 1,401 374
Purchase of securities
available-for-sale ( 922) ( 469)
Loans to affiliates and others ( 60) -
Repayment of loans to affiliates 275 71
Investment in unaffiliated natural
products company - ( 500)
Other, net ( 177) 15
------- -------
Net cash used in investing
activities ( 6,374) ( 818)
------- -------
Cash flows from financing activities:
Repurchase of common stock - ( 357)
Issuance of common stock 43 -
Net increase in borrowings 3,975 -
Other, net - 48
------- -------
Net cash provided by (used in)
financing activities 4,018 ( 309)
------- -------
Net decrease in cash and cash
equivalents ( 777) ( 975)
Cash and cash equivalents at beginning
of period 8,100 10,865
------- -------
Cash and cash equivalents at end of
period $ 7,323 $ 9,890
======= =======
Supplemental disclosure for cash
flow information:
Cash paid for:
Interest expense $ 73 $ 7
Taxes $ 292 $ 87
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
PURE WORLD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1998 AND 1997
(UNAUDITED)
1. General
-------
The accompanying unaudited consolidated financial statements of Pure
World, Inc. and subsidiaries (the "Company") as of June 30, 1998 and
for the three and six month periods ended June 30, 1998 and 1997
reflect all material adjustments consisting of only normal recurring
adjustments which, in the opinion of management, are necessary for a
fair presentation of results for the interim periods. Certain
information and footnote disclosures required under generally accepted
accounting principles have been condensed or omitted pursuant to the
rules and regulations of the Securities and Exchange Commission,
although the Company believes that the disclosures are adequate to make
the information presented not misleading. These consolidated financial
statements should be read in conjunction with the year-end consolidated
financial statements and notes thereto included in the Company's Annual
Report on Form 10-KSB for the year ended December 31, 1997 as filed
with the Securities and Exchange Commission.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amount of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
Prior years financial statements have been reclassified to conform to
the current year's presentation.
The results of operations for the three and six months ended June 30,
1998 and 1997 are not necessarily indicative of the results to be
expected for the entire year or any other period.
<PAGE>
2. Investment Securities
---------------------
At June 30, 1998, investment securities consisted of the following (in
000's):
<TABLE>
Gross Gross
Amortized Holding Holding Fair
Cost Gains Losses Value
--------- ------- ------- -----
<S> <C> <C> <C> <C>
Marketable
securities $ 15 $ - $ 1 $ 14
Available-for-sale 1,114 153 204 1,063
------ ----- ----- ------
Total investment
securities $1,129 $ 153 $ 205 $1,077
====== ===== ===== ======
</TABLE>
All investment securities are investments in common stock.
Substantially all gains recorded in the three and six month periods
ended June 30, 1998 and 1997 were realized.
3. Inventories
-----------
At June 30, 1998, inventories are comprised of the following (in
$000's):
<TABLE>
<S> <C>
Raw materials and
inventory in transit $2,807
Work-in-progress 120
Finished goods 2,205
------
Total inventories, net $5,132
======
</TABLE>
4. Investment in Unaffiliated Natural Products Company
---------------------------------------------------
In May 1996, the Company purchased 500 shares of common stock
representing a 25% interest in Gaia Herbs, Inc. ("Gaia") for
approximately $1.0 million. In June 1997, the Company purchased an
additional 200 shares for $500,000, increasing its equity ownership to
35% of Gaia's outstanding shares of common stock ("Pure World's Gaia
Stock"). Pure World's Gaia Stock is non-voting. The Company loaned
Gaia $200,000 in July 1997 payable interest only on a quarterly basis
for the first three years and 36 monthly payments of principal and
interest thereafter (the "Pure World Loan"). The Pure World Loan bears
interest at 6.49% which was the imputed rate required under the
Internal Revenue Code and is classified as an other asset in the
consolidated balance sheet. The parties also agreed that if any other
party acquired voting shares, Pure World's Gaia Stock would become
voting stock.
In connection with the transaction, the parties agreed that Gaia and
the principal stockholder of Gaia (the "Principal Stockholder") would
have a right of first refusal to acquire any Gaia stock sold by Pure
World and that Pure World would have a right of first refusal to
acquire any Gaia stock sold by Gaia or the Principal Stockholder.
<PAGE>
In June 1998, Gaia requested that Pure World guarantee an unsecured
bank line of $500,000 (the "Gaia Bank Loan"). Because of expansion
plans for Madis, Pure World declined to issue the guarantee. An
individual unaffiliated with Gaia or Pure World agreed to guarantee the
Gaia Bank Loan in consideration of a cash fee and the issuance to the
individual of 100 shares of Gaia's common stock, representing 5 percent
of Gaia's common stock outstanding (the "Guarantee"). The Guarantee is
also secured by Gaia stock held by Gaia's Principal Stockholder. Pure
World notified Gaia that it wished to exercise its right of first
refusal in connection with the Guarantee. Pure World and Gaia reached
an understanding that Pure World would decline the right of first
refusal if by November 30, 1998 thirty percent of Pure World's interest
was purchased for $1,500,000 (leaving five percent of the current Gaia
stock outstanding) and the Pure World Loan was repaid, including any
accrued interest (the "Repurchase"). If the Repurchase is not closed
by November 30, 1998 ("the Closing Date"), Pure World then would have
the right to assume the Guarantee pursuant to the same terms granted
the original guarantor, except for the cash fee. If the Repurchase
does not close prior to the Closing Date, and either before of after
the Closing Date, the Guarantee is called by the bank, Pure World would
then own, or have the right to own a majority of Gaia's voting stock.
Gaia manufactures and distributes fluid botanical extracts for the
high-end consumer market. Gaia is a privately held company and does not
publish financial results. The Company is accounting for this
investment by the cost method.
5. Plant and Equipment
-------------------
At June 30, 1998, plant and equipment consisted of the following (in
$000's):
<TABLE>
<S> <C>
Machinery and equipment $5,842
Leasehold improvements 2,682
Office equipment, furniture
and fixtures 1,291
Accumulated depreciation ( 921)
------
Total $8,894
======
</TABLE>
<PAGE>
6. Long-term Debt
--------------
Long-term debt consisted of the following at June 30, 1998 (in $000's):
<TABLE>
<S> <C>
Loans payable to a bank,
collateralized by certain
property and equipment,
bearing annual interest at
the prime rate (currently
8.5%) maturing in December 2003,
interest only payments until
December 1998 $ 3,000
Loans payable to a bank, pursuant
to a $2 million line of credit
bearing annual interest at the
prime rate (currently 8.5%)
maturing in March 1999,
interest only payments until
March 1999 300
Loan payable to a bank, collateralized
by certain equipment bearing
annual interest at the prime
rate plus .25% (currently 8.75%)
maturing in April 2003 292
Leases payable for equipment 536
All other 150
-------
Total 4,278
-------
Less: Current portion of long-
term debt 856
-------
Long-term debt $ 3,422
=======
</TABLE>
Interest expense was $66,000 and $73,000 for the three and six months
ended June 30, 1998 and $3,000 and $7,000 for the same periods in 1997,
respectively.
7. Net Income Per Share
--------------------
Basic earnings per share is computed by dividing net income by the
weighted-average number of common shares outstanding. Diluted earnings
per share is computed by dividing net income by the sum of the
weighted-average number of common shares outstanding plus the dilutive
effect of shares issuable through the exercise of stock options.
<PAGE>
All prior period earnings per share figures have been restated in
accordance with the adoption of SFAS No. 128.
The shares used for basic earnings per share and diluted earnings per
share are reconciled as follows (in 000's):
Three Months Ended Six Months Ended
June 30, June 30,
------------------ -------------------
1998 1997 1998 1997
------ ------ ------ ------
<TABLE>
<S> <C> <C> <C> <C>
Average shares
outstanding for
basic earnings
per share 7,517 7,514 7,512 7,562
Dilutive effect of
stock options 852 287 771 287
----- ----- ----- -----
Average shares
outstanding for
diluted arnings
per share 8,369 7,801 8,283 7,849
===== ===== ===== =====
</TABLE>
8. Comprehensive Income
--------------------
Statement of Financial Accounting Standards No. 130 "Reporting
Comprehensive Income" ("SFAS No. 130") is effective for fiscal years
beginning after December 15, 1997. SFAS No. 130 requires reporting
and display of comprehensive income. Comprehensive income of the
Company for the three and six months ended June 30, 1998 and 1997 are
(in $000's):
<TABLE>
Three Months Ended Six Months Ended
June 30, June 30,
------------------ -----------------
1998 1997 1997 1998
------ ------ ------ ------
<S> <C> <C> <C> <C>
Net income $2,047 $ 662 $3,477 $1,167
Unrealized gains
(losses) on
securities
available-for-sale ( 444) 17 ( 683) 451
------ ------ ------ ------
Comprehensive
income $1,603 $ 679 $2,794 $1,618
====== ====== ====== ======
</TABLE>
<PAGE>
9. Subsequent Events
-----------------
In July 1998, Pure World acquired 400,000 shares or 7.5% of the
outstanding Common Stock of HealthRite, Inc. (HLRT - NASDAQ). As
consideration Pure World paid $500,000 and received an agreement that
its wholly-owned subsidiary Madis Botanicals, Inc., would become the
preferred supplier for Montana Naturals International, Inc., a
subsidiary of HealthRite. Madis manufactures botanical extracts for use
in dietary supplements and Montana Naturals uses botanical extracts in
connection with its manufacture of dietary supplements for sale
directly to consumers and for sale to private label customers.
HealthRite sales for 1997 were $14.4 million.
The purchase by Pure World was part of a private placement of 880,000
HealthRite shares which represented approximately 17% of the 5,303,251
shares outstanding after the placement. The balance of the shares were
purchased principally by officers and directors of HealthRite.
<PAGE>
Item 2. Management's Discussion and Analysis of
- ------- Financial Condition and Results of Operations
---------------------------------------------
Liquidity and Capital Resources
- -------------------------------
At June 30, 1998, the Company had cash and cash equivalents of
approximately $7.3 million. Cash equivalents of $6.3 million consisted
of U.S. Treasury bills with an original maturity of less than three
months and yields ranging between 5.06% and 5.19%. The Company had net
working capital of $12.2 million at June 30, 1998. The Company also has
an unsecured line of credit of $2 million with a major financial
institution bearing a rate of 8.5%. At June 30, 1998, $1.7 million was
available in connection with this line of credit. Management believes
that the Company's financial resources and anticipated cash flows will
be sufficient for future operations and possible acquisitions of other
operating businesses.
Net cash of $1.6 million was provided by operations for the six months
ended June 30, 1998 and net cash of $152,000 was provided by operations
for the six months ended June 30, 1997. Increases in inventory and
accounts receivable are a result of the increase in sales in 1998 and
1997. In 1998, the increase in accounts payable resulted from the
increase in inventory and additions to plant and equipment (described
below). Depreciation and amortization increased in 1998 compared to
1997 due to continued additions and enhancements to the laboratory and
production facilities. Depreciation is expected to increase in the
future periods due to the completion of the expansion program described
below.
Net cash of $6.4 million and $818,000 was used in investing activities
for the six months ended June 30, 1998 and 1997, respectively. The
Company, which has been increasing its investment in laboratory and
manufacturing facilities, began an expansion program in 1997 to upgrade
and expand its productive capacity and to build a new warehouse
facility. The total cost of the warehouse and expansion was
approximately $6.5 million, including certain equipment purchases for
the laboratories. The Company obtained an equipment line of credit of
$3 million from a bank which was fully utilized as of June 30, 1998.
The balance will be paid from working capital. The expansion was
substantially completed at June 30, 1998.
Cash flows provided by financing activities in the six months ended
June 30, 1998 were $4.0 million compared to a net use of $309,000 in
the same period in 1997. The net increase in borrowings which accounted
for this increase is primarily a result of the plant expansion program
and financing described above.
<PAGE>
Results of Operations
- ---------------------
The Company's operations resulted in net income of $2,047,000, or $.27
basic earnings per share, for the three months ended June 30, 1998
compared to net income of $662,000, or $.09 basic earnings per share,
for the comparable period in 1997. Net income was $3,477,000, or $.46
basic earnings per share for the six months ended June 30, 1998
compared to net income of $1,167,000, or $.15 basic earnings per share
for the six months ended June 30, 1997. Diluted earnings per share were
$.25 and $.09 for the quarters ended June 30, 1998 and 1997, and $.42
and $.15 for the six months ended June 30, 1998 and 1997, respectively.
The Company, through its wholly-owned subsidiary, Madis Botanicals,
Inc. ("Madis") had sales of $6.2 million for the quarter ended June 30,
1998, compared to sales of $2.7 million for the comparable quarter of
1997, an increase of $3.5 million, or 132%. For the six months ended
June 30, 1998, sales were $11.3 million, an increase of $6.2 million,
or 122%, over sales of $5.1 million for the six months ended June 30,
1997.
For the quarters ended June 30, 1998 and 1997, the gross margin (sales
less cost of goods sold) was $3.1 million, or approximately 50% and
$1.2 million, or approximately 44%, respectively. For the six months
ended June 30, 1998 and 1997, the gross margin was $5.7 million, or
approximately 50%, and $2.3 million, or approximately 46%,
respectively. The improved results are attributed to increases in the
sales of Madis' line of standardized botanical products, particularly
St. Johns Wort, KavaPure(R), and CimiPure(R) black cohosh.
For the three and six month periods ended June 30, 1998, the Company
recorded net gains on marketable securities of $525,000 and $601,000,
respectively, compared to $178,000 and $249,000 for the same periods in
1997. Substantially all of the gains recorded in 1998 and 1997 were
realized.
Interest and dividend income was $91,000 and $192,000 for the three and
six month periods ended June 30, 1998, respectively, compared to
$140,000 and $277,000 for the three and six month periods ended June
30, 1997. Interest income was $190,000 during the six month period
ended June 30, 1998, a decrease of $87,000 from the $277,000 recorded
in the comparable period of 1997. This decrease was due primarily to
lower invested balances as working capital was used for the plant
expansion project previously described.
Other income of $221,000 and $461,000 for the three and six months
ended June 30, 1997 was cash received in connection with the sale of a
prior business in 1994. The Company does not anticipate additional
revenue from this source.
<PAGE>
Selling, general and administrative expenses were $1.5 million and $1
million for the three months ended June 30, 1998 and 1997,
respectively, an increase of $500,000. This was attributable to
increases in the following expenses: personnel, due to an increase in
headcount and merit salary increases, $218,000; travel, $67,000;
interest, $63,000; advertising, $49,000; and membership dues, $37,000.
For the six months ended June 30, 1998 and 1997, selling, general and
administrative expenses were $2.7 million and $2.1 million,
respectively, an increase of $600,000. This was attributable to
increases in the following expenses: personnel, due to an increase in
headcount and merit salary increases, $358,000; advertising, $68,000;
interest, $66,000; travel, $58,000; and membership dues, $36,000. The
increases in selling, general and administrative expenses for the three
and six months discussed above were commensurate with the overall
increase in the level of sales activity.
Year 2000 Issue
- ---------------
The Year 2000 Issue is the result of computer programs being written
using two digits rather than four to define the applicable year. Any
of the Company's computer programs that have time-sensitive software
may recognize a date using "00" as the year 1900 rather than the year
2000. This could result in a system failure or miscalculations causing
disruptions of operations, including, among other things, a temporary
inability to process transactions or engage in similar normal business
activities.
Management has determined that the year 2000 Issue will not pose
significant operational problems for its computer systems. As a result,
all costs associated with this conversion are being expensed as
incurred. There can be no guarantee that the systems of other companies
on which the Company's systems rely will be timely converted and would
not have an adverse effect on the Company's systems.
The Company will utilize external resources to reprogram, or replace,
and test the software for Year 2000 modifications. The Company
anticipates completing the Year 2000 project not later than
October 31, 1999, which is prior to any anticipated impact on its
operating systems. The total cost of the Year 2000 project is not
expected to be material and will be funded through operating cash
flows, which will be expensed as incurred.
The costs of the project and the date on which the Company believes it
will complete the Year 2000 modifications are based on management's
best estimate, which were derived utilizing numerous assumptions of
future events, including the continued availability of certain
resources, third party modifications plans and other factors. However,
there can be no guarantee that these estimates will be achieved and
actual results could differ materially from those anticipated.
Specific factors that might cause such material differences include,
but are not limited to, the availability and cost of personnel trained
in this area, the ability to locate and correct all relevant computer
codes, and similar uncertainties.
<PAGE>
PART II - OTHER INFORMATION
- ------- -----=-----------
Item 6. - Exhibits and Reports on Form 8-K
- ------- --------------------------------
(a) Exhibits
--------
27. Financial Data Schedule for the six months ended June 30, 1998.
(b) Reports on Form 8-K
-------------------
None.
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
PURE WORLD, INC.
Dated: August 14, 1998 By: /s/ Mark Koscinski
-------------------
Mark Koscinski
Senior Vice President and
Principal Accounting Officer
