UNITED STATES 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
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
__ 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 0-6620
ANAREN MICROWAVE, INC.
(Exact name of Registrant as specified in its Charter)
New York 16-0928561
(State of incorporation) (I.R.S Employer Identification No.)
6635 Kirkville Road 13057
East Syracuse, New York (Zip Code)
(Address of principal
executive offices)
Registrant's telephone number, including area code: 315-432-8909
N/A
(Former name, former address and former fiscal year, if changed since last
report)
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 Registrant's Common Stock outstanding on November
8, 1996 was 4,103,842.
<PAGE>
ANAREN MICROWAVE, INC.
INDEX
PART I - FINANCIAL INFORMATION Page No.
- ------------------------------ --------
Item 1. Financial Statement (Unaudited)
Consolidated Condensed Balance Sheets 3
September 30, 1996 and June 30, 1996
Consolidated Condensed Statements of Earnings 4
Three months ended September 30, 1996 and
September 30, 1995
Consolidated Condensed Statements of Cash Flows - 5
Three months ended September 30, 1996 and
September 30, 1995
Notes to Consolidated Condensed Financial Statements 6
Item 2. Management's Discussion and Analysis 9
of Financial Condition and Results of Operations
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 13
2
<PAGE>
ANAREN MICROWAVE, INC.
AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
September 30, 1996 and June 30, 1996
Unaudited
Assets Sept. 30, 1996 June 30, 1996
------ -------------- -------------
Current assets:
Cash and cash equivalents $ 2,051,299 $ 1,739,569
Receivables, less allowance of $13,000 6,121,063 5,167,996
Refundable Income Taxes -- 320,945
Inventories 6,988,027 7,210,320
Prepaid expenses 297,302 255,723
------------ ------------
Total current assets 15,457,691 14,694,553
Property, plant and equipment 29,141,008 28,925,878
Less accumulated depreciation and amortization (22,193,093) (21,871,008)
------------ ------------
Net property, plant and equipment 6,947,915 7,054,870
Other assets, net 41,278 43,793
------------ ------------
$ 22,446,884 $ 21,793,216
============ ============
Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
Current installments of long-term debt $ 297,290 $ 394,633
Accounts payable 1,007,775 663,848
Accrued expenses 540,024 471,665
Customer advance payments 373,697 250,000
------------ ------------
Total current liabilities 2,218,786 1,780,146
Postretirement Benefit Obligation 1,138,215 1,138,215
Long-term debt, less current installments 680,001 680,001
------------ ------------
Total liabilities 4,037,002 3,598,362
Stockholders' equity:
Common stock of $.01 par value. Authorized
12,000,000 shares; issued 4,996,116 shares
at September 30, 1996 and 4,992,116 shares
at June 30, 1996 49,961 49,921
Additional paid-in capital 15,512,548 15,507,088
Retained earnings 4,859,450 4,649,922
------------ ------------
20,421,959 20,206,931
Less cost of 892,274 shares in treasury
at September 30, 1996 and June 30, 1996 (2,012,077) (2,012,077)
------------ ------------
Total stockholders' equity 18,409,882 18,194,854
------------ ------------
$ 22,446,884 $ 21,793,216
============ ============
See accompanying notes to consolidated condensed financial statements.
3
<PAGE>
ANAREN MICROWAVE, INC.
AND SUBSIDIARIES
Consolidated Condensed Statements of Earnings
Unaudited
For the Quarter Ended:
Sept. 30, 1996 Sept. 30, 1995
(Current Year) (Preceding Year)
----------- -----------
Net Sales $ 5,065,641 $ 4,449,465
Costs and expenses
Costs of sales 3,572,094 2,808,833
Marketing, including sales commissions 668,118 667,207
General and administrative 504,176 508,283
Research and development 108,340 384,788
----------- -----------
Total costs and expenses 4,852,728 4,369,111
----------- -----------
Operating earnings (loss) 212,913 80,354
Other income 19,067 28,439
Interest expense (22,452) (42,846)
----------- -----------
Earnings (loss) before income taxes 209,528 65,947
Total taxes on income -- --
----------- -----------
Net earnigs (loss) 209,528 65,947
Earnings (loss) per share $ .05 $ .02
=========== ===========
Dividends per share $ -- $ --
=========== ===========
See accompanying notes to consolidated financial statements.
4
<PAGE>
ANAREN MICROWAVE, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Cash Flows
Three Months Ended:
September 30, 1996 and September 30, 1995
1996 1995
----------- -----------
Cash Flows From Operating Activities:
Net income/(loss) $ 209,528 $ 65,947
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation and amortization of
property, plant and equipment 322,085 419,921
Provision for losses on contracts -- (436,116)
Amortization of intangibles 2,515 8,492
Changes in:
Receivables (953,067) 790,710
Refundable income taxes 320,945 --
Inventories 222,293 (112,337)
Prepaid expenses (41,579) (66,562)
Accounts payable 343,927 (146,048)
Accrued expenses 68,359 (94,595)
Customer Advance Payments 123,697 --
----------- -----------
Net cash provided by
operating activities 618,703 429,412
Cash Flows From Investing Activities:
Capital expenditures (215,130) (245,375)
----------- -----------
Net cash provided (used in)
investing activities (215,130) (245,375)
Cash Flows From Financing Activities:
Principal payments on long-term debt (97,343) (138,768)
Net borrowings under revolving line
of credit and overdrafts -- (1,460)
Proceeds from issuance of common stock 5,500 362,563
Purchases of treasury stock -- --
----------- -----------
Net cash provided by (used in)
financing activities (91,843) 222,335
Net increase (decrease) in cash
and cash equivalents 311,730 406,372
Cash and cash equivalents at beginning of period 1,739,569 2,139,795
----------- -----------
Cash and cash equivalents at end of period $ 2,051,299 $ 2,546,167
=========== ===========
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION:
Cash Paid During the Period For:
Interest $ 8,115 23,473
=========== ===========
Income taxes $ -- $ --
=========== ===========
See accompanying notes to consolidated condensed financial statements.
5
<PAGE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
The accompanying financial statements and notes should be read in conjunction
with the consolidated financial statements and related notes contained in the
Company's annual report for the year ended June 30, 1996.
In the opinion of the Company, the accompanying unaudited consolidated condensed
financial statements contain all adjustments (consisting of only normal
recurring accruals) necessary to present fairly the financial position as of
September 30, 1996 and the results of operations and cash flows for the three
months ended September 30, 1996 and September 30, 1995.
The income tax rate for interim statement purposes is based on estimates of
income and tax credits for the entire year.
NOTE 1: Inventories
Inventories at September 30, 1996 and June 30, 1996 are summarized as
follows:
Sept. 30 June 30
---------- ----------
Raw Materials $3,032,105 $3,027,700
Work in process 2,789,447 3,031,441
Finished Goods 1,166,475 1,151,179
---------- ----------
$6,988,027 $7,210,320
========== ==========
NOTE 2: Property, Plant and Equipment
Property, plant and equipment at September 30, 1996 and June 30, 1996
are shown in the following summary:
Sept. 30 June 30
----------- -----------
Land and Land improvements $ 1,362,050 $ 1,362,050
Buildings and improvements 5,126,656 5,120,245
Machinery and equipment 22,652,302 22,443,583
----------- -----------
$29,141,008 $28,925,878
=========== ===========
6
<PAGE>
NOTE 3: Long-Term Debt
Long-term debt at September 30, 1996 and June 30, 1996 is comprised of
the following:
Sept. 30 June 30
---------- ----------
75% of prime rate Industrial
Development Revenue Bonds, due
in semi-annual installments
through May 1, 2000 $ 906,668 $ 906,668
Capitalized lease obligations 70,623 167,966
Revolving Line of Credit -- --
---------- ----------
$ 977,291 $1,074,634
Less Current Installments 297,290 394,633
---------- ----------
$ 680,001 $ 680,001
========== ==========
NOTE 4: Per Share Data
Per share data are based on a weighted average of 4,103,190 common
shares issued and outstanding.
NOTE 5: Income Taxes
Effective June 27, 1993, the Company adopted the provisions of
Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes" on a prospective basis. The cumulative effect of the
initial adoption of Statement 109 was insignificant. Under the asset
and liability method of Statement 109, deferred tax assets and
liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carry forwards. Deferred tax
assets and liabilities are measured using enacted tax rates.
Pursuant to the deferred method under APB Opinion 11, which was
applied in fiscal 1993 and prior years, deferred income taxes are
recognized for income and expense items that are reported in different
years for financial reporting purposes and income tax purposes using
the tax rate applicable in the year of the calculation. Under the
deferred method, deferred taxes are not adjusted for subsequent
changes in tax rates.
7
<PAGE>
Deferred tax assets and liabilities at September 30, 1996 and June 30,
1996 are summarized as follows:
Sept. 30 June 30
----------- -----------
Gross deferred tax assets $ 2,337,051 $ 2,408,291
Less valuation allowance (1,572,463) (1,643,703)
----------- -----------
Net deferred tax assets 764,588 764,588
Gross deferred tax liabilities (764,588) (764,588)
----------- -----------
Net deferred taxes $ 0 $ 0
The valuation allowance for the deferred tax assets as of September
30, 1996 and June 30, 1996 was $1,572,463 and $1,643,703,
respectively. The net change in the total valuation allowance for the
three months ended September 30, 1996 was a decrease of $72,240. In
assessing the realizability of deferred tax assets, management
considers whether it is more likely than not that some portion or all
of the deferred tax assets will not be realized. The ultimate
realization of deferred tax assets is dependent upon the generation of
future taxable income during the periods in which those temporary
differences become deductible. Management considers the scheduled
reversal of deferred tax liabilities, projected future taxable income,
and tax planning strategies in making this assessment. Based upon the
level of historical taxable income and projections for future taxable
income over the periods which the deferred tax assets are deductible,
management believes it is more likely than not the Company will
realize the benefits of these deductible differences, net of the
existing valuation allowances at September 30, 1996.
8
<PAGE>
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Results of Operations
Results of operations for the first quarter of fiscal 1996 were highlighted by
significant increases in both sales of the Company's commercial
telecommunications products and net income. Net sales for the first quarter
ended September 30, 1996 were $5,065,641, up 14%, from net sales of $4,449,465
for the same quarter in the previous year and up 24% from net sales of
$4,089,122 for the fourth quarter of fiscal 1996. The Company recorded earnings
of $209,528 for the first quarter of fiscal 1997 a threefold increase over
earnings of $65,947 for the first quarter of fiscal 1996 and a fivefold increase
over earnings of $40,935 for the fourth quarter of fiscal 1996.
The following table sets forth the Company's net sales by product lines for the
three months ended September 30, 1996 and 1995.
Three Months Ended
(in thousands)
Sept. 30 Sept. 30
1996 1995
------ ------
Electronic Warfare $1,724 $3,203
Radar and Telecommunications 2,480 969
Wireless 862 277
------ ------
$5,066 $4,449
====== ======
Net sales historically associated with particular product lines may not be
indicative of future trends because of the relative size of individual orders
and changes in the Company's emphasis on specific product lines.
During the first quarter ended September 30, 1996, sales of Wireless and Radar
and Telecommunications products rose $585,000 and $1,511,000, respectively,
compared to the same quarter of the previous year, while sales of Electronic
Warfare products fell $1,479,000, resulting in the overall sales increase of
$617,000.
Sales of Wireless products, which are mainly components for use in building
cellular base station equipment rose $585,000 in the first quarter of fiscal
1997 to $862,000 compared to $277,000 in the first quarter of fiscal 1996. The
increase in shipments consisted of approximately $450,000 in custom components
being built for Motorola, Inc. and Nortel, Inc. under a number of production
orders totaling over $3,000,000 received in fiscal 1996 and a $100,000 increase
in sales of off-the-self catalog surface mount components.
New orders for Wireless components were $1,120,000 during the first quarter of
fiscal 1996, resulting in a firm backlog of of $3,992,000 at September 30, 1996,
up 7% from $3,735,000 at June 30, 1996, all of which is expected to ship in
fiscal 1997.
Shipments of Radar and Telecommunication products, which consist of custom
commercial multi-layer components such as butler matrices and beamforming
networks for commercial telecommunication satellites, increased over $1,500,000
in the first quarter of fiscal 1997 compared to the same period in the previous
year. This substantial rise in shipments is attributed to sales of over
$1,270,000 for engineering design work on two beamformer networks for commercial
satellite contracts for Space Systems Loral and Martin Marietta Overseas Corp.
and over $1,000,000 in shipments of beamformers to Raytheon Company under
continuing production for the Iridium project. Shipments in the first quarter of
fiscal 1996 consisted mainly of remaining production under the Ground Based
Radar program and totaled less than $1,000,000.
New orders for Radar and Telecommunications products totaled over $7,600,000 in
the first quarter of fiscal 1997. The largest of these orders was a firm fixed
price contract for over $6,000,000 from Martin Marietta Overseas Corp. for the
design and production of antenna
9
<PAGE>
beamforming networks for the Asia Cellular Satellite Systems (ACeS). The ACeS
system is a space based cellular communications system, to serve Asia via two
geosynchronous satellites. Firm backlog for this product line at September 30,
1996 was $9,265,000 up 125% from $4,125,000 at June 30, 1996. Of this amount
approximately $6,700,000 is expected to ship during the remaining three quarters
of fiscal 1997.
Sales of Electronic warfare products fell $1,500,000 to $1,724,000 in the first
quarter of fiscal 1997 compared to $3,203,000 in the first quarter of the
previous year. Shipments in this business area, which include Digital Frequency
Discriminators (DFD's), Digital RF Memories (DRFM's) ESM Receivers and Microwave
Integrated Circuit Components (MIC's), have been steadily declining over the
past three fiscal years due to the continuing decline in the overall worldwide
defense market. The drop in sales in the first quarter of fiscal 1997 was spread
over all the above mentioned product areas, except for DRFM's, due to the
completion of one of the remaining large DFD programs in fiscal 1996 and a
general 20% decline in demand for off-the-self catalog military MIC's during the
last quarter of fiscal 1996 and the first quarter of fiscal 1997.
New orders for Electronic Warfare products totaled approximately $1,300,000 in
the first quarter of fiscal 1997 and firm backlog for this product area was
$15,024,000 at September 30, 1996. Of this amount, $12,500,000 represented one
order from the ASPJ Joint Venture Team of ITT Avionics and Northrop/Grumman for
foreign sales of the Airborne Self Protection Jammer System. This order should
serve to help stabilize shipments in this business area when shipments begin in
the last quarter of the current fiscal year.
Net earnings for the first quarter ended September 30, 1996 were $209,528
compared to net earnings of $65,947 for the first quarter of fiscal 1996. This
improvement in earnings resulted from the 14% increase in revenues and was
achieved despite a 7.5 percentage point decline in gross margin, due to a
$275,000 decline in research and development expense and no increase in
marketing and general and administrative expense during the period as compared
to the same period in the previous fiscal year.
Gross margin on sales for the first quarter of fiscal 1997 was 29.5% compared to
37% for the first quarter of fiscal 1996. This decline was a direct result of
lower margins on initial product runs of Wireless custom components during the
quarter due to excess scrap costs, as well as significant rework costs incurred
in repairing production units above normal experience levels. The Company
expects that gross margins will improve during the remaining three quarters of
fiscal 1997.
Research and development expense was $108,000 for the first three months of
fiscal 1997, down $276,000 from $385,000 for the same period in fiscal 1996.
This decline resulted from a significant increase in customer funded engineering
design work in both the Electronic Warfare and Radar and Telecommunications
groups during the period which consumed all available engineering resources in
these groups. Current internal development efforts are being targeted on
adapting existing Company technologies to produce new Wireless component
products which fit a specific customer's requirements. Future research and
devleopment expenditures are expected to fluctuate based on sales levels,
identified market opportunities and customer funding for custom engineering
development projects.
Marketing expense and general and administrative expense, varied little in the
first quarter of fiscal 1997 compared to the first quarter of fiscal 1996 as
there was little change in personnel or support services between the two
quarters. Presently, the Company expects that Marketing expense will rise with
sales volume during fiscal 1997 in order to meet the demands of the Wireless
marketplace, while general and administrative expense is expected to remain in
the range of first quarter levels and generally trend higher for the remainder
of the current fiscal year.
Interest expense fell 48% in the first three months of fiscal 1997 compared to
the same period in fiscal 1996. The decline in interest expense reflects the
continuing reduction in long-term debt over the past year. During this same
period, other income was down 33% due to lower investable cash balances during
the current year compared to the previous fiscal year.
10
<PAGE>
Consolidated income tax expense was $0 in the first quarter of fiscal 1997
versus an expected tax expense of approximately $71,240 based on 34% of earnings
before income taxes. The difference between the actual tax expense recognized in
the financial statements and the expected tax calculated on net income was due
to a decrease in the deferred tax asset valuation allowance required by the new
tax accounting rules (FAS No. 109) adopted by the Company at the beginning of
fiscal 1994. Under the new tax accounting rules the Company must assess the
realizability of deferred tax assets, considering whether it is more likely than
not that some portion or all of the deferred tax assets will be realized. The
ultimate realization of deferred tax assets is dependent upon the generation of
future taxable income in the period in which those temporary differences become
deductible. Management of the Company has considered the scheduled reversal of
deferred tax liabilities and projected future taxable income in making the
assessment of the realizability of the deferred tax asset balances at September
30, 1996. Based upon the level of historical taxable income and projections for
future taxable income over the periods which the deferred tax assets are
deductible, the Company believes it is more likely than not that it will realize
the benefit of these deductible differences, net of the existing valuation
allowances at September 30, 1996.
Liquidity and Capital Resources
At September 30, 1996, the Company had net working capital of $13,239,000, which
included $2,051,000 in cash and cash equivalents, compared to working capital of
$12,914,000, which included cash and cash equivalents of $1,740,000, at June 30,
1996. Net cash surplus was $312,000 for the first quarter of fiscal 1997
compared to a net cash surplus of $406,000 in the first quarter of fiscal 1996.
Cash flow was positive in the first quaqrter of fiscal 1997 due mainly to the
growth in earnings and accounts payable as well as a small decrease in inventory
and the receipt of a $321,000 tax refund from the U.S. government during the
period.
During the remainder of fiscal 1997, the company's major cash requirements will
be for additions to capital equipment and repayment of long-term debt. Capital
equipment additions for the current year have been budgeted at $1,000,000 and,
through the first three months of fiscal 1997, approximately $215,000 has been
expended, all of which was funded by cash generated from operations. Capital
equipment additions for the remainder of fiscal 1997 will continue to be funded
through cash generated by operations as projected operating cash flows are
expected to be more than adequate to meet these financing needs.
In fiscal 1995, the Company maintained a revolving line of credit with a bank
which provided for principal drawings of up to $3,500,000. This credit agreement
carried interest on outstanding borrowings at the prime rate plus 3/4% and was
secured by all assets of the Company which were not otherwise pledged under
other agreements. This credit facility expired at December 31, 1994. In October,
1996, the Company signed an agreement for a new credit facility with a bank
providing for a $3,000,000 working capital revolving line of credit bearing
interest at prime plus 1% maturing on November 30, 1998, and a $907,000 term
loan payable in semi-annual installments of $113,333 through May, 2000, bearing
interest at prime plus 1.25%. The proceeds of the term loan were used to
refinance the existing loans of the Company other than capitalized lease
obligations, while the revolving credit facility will be used to supplement
short-term working capital needs brought about by the expected growth in
production and sales volume. Borrowings under the new credit facility are
secured by substantially all assets of the Company.
The Company believes that its cash requirements for the foreseeable future will
be satisfied by currently invested cash balances, expected cash flow from
operations and funds available under its credit facilities.
Forward-looking Information
Statements contained in this Form 10Q regarding fiscal 1997, other than
historical facts, are forward-looking statements within the meaning of the
Private Securities Litigation Act of 1995 that involve risks and uncertainties
that could cause actual results to differ materially from those projected.
11
<PAGE>
In particular, statements regarding future results of operations, shipments,
margins and research and development, marketing, general and administrative and
tax expenses, involve a number of risks and uncertainties. Among the factors
that could cause actual results to differ materially are the following: general
economic conditions; the level of worldwide spending on military defense
products; competitive factors such as rival component manufactures' competing
technologies; acceptance of new company products; price pressures; the company's
ability to invest in new product development and new processes and its ability
to integrate these processes in its manufacturing operation; manufacturing
capacity and the ability to "ramp" to meet anticipated demand; engineering
development costs; availability of third party supplier parts at reasonable
prices; obsolescence of inventory due to changes in customer demand;
efficiencies of manufacturing processes; and availability of financial resources
to fund anticipated growth.
The Company believes it has the products, personnel, facilities, and financial
resources to achieve the proposed results, but future revenues, margins and
profits are all influenced by a number of risk factors, including but not
limited to those discussed above.
12
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
Item 6(a) Exhibits
Exhibit No. 27 Financial Data Schedule for the three month period ended
September 30, 1996.
Item 6(b) Reports on Form 8K
The registrant was not required to file an 8-K during the current fiscal period.
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused the report to be signed on its behalf by the
undersigned thereunto duly authorized.
Anaren Microwave, Inc.
--------------------------------------
(Registrant)
Date: November 12, 1996 S/Hugh A. Hair
--------------------------------------
Chairman & Chief Executive Officer
Date: November 12, 1996 S/Joseph E. Porcello
--------------------------------------
Vice President of Finance & Controller
14
<PAGE>
Exhibit Index
Number Description
- ------ -----------
27 Financial Data Schedule for the three month period ended
September 30, 1996.
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements for Anaren Microwave, Inc. filed with form 10Q for the
Three months ended September 30, 1996 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> SEP-30-1996
<CASH> 2,051,299
<SECURITIES> 0
<RECEIVABLES> 6,121,063
<ALLOWANCES> 13,000
<INVENTORY> 6,988,027
<CURRENT-ASSETS> 15,457,691
<PP&E> 29,141,008
<DEPRECIATION> (22,193,093)
<TOTAL-ASSETS> 22,446,884
<CURRENT-LIABILITIES> 2,218,786
<BONDS> 680,001
0
0
<COMMON> 49,961
<OTHER-SE> 18,359,921
<TOTAL-LIABILITY-AND-EQUITY> 22,446,884
<SALES> 5,065,641
<TOTAL-REVENUES> 5,065,641
<CGS> 3,572,094
<TOTAL-COSTS> 4,852,728
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 22,452
<INCOME-PRETAX> 209,528
<INCOME-TAX> 0
<INCOME-CONTINUING> 209,528
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 209,528
<EPS-PRIMARY> 0.05
<EPS-DILUTED> 0.05
</TABLE>
