<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 period ended April 30, 1995
-------------------------------------------------------
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: 0-1363
----------------------------------------------------
MRL, Inc.
- ----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Missouri 43-0614403
- ----------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
112 Point West Blvd., Suite 500, St. Charles, MO 63301
- ----------------------------------------------------------------------------
(Address of principal executive office (Zip Code)
(314) 946-6900
- ----------------------------------------------------------------------------
(Registrant's telephone number, including area code)
- ----------------------------------------------------------------------------
(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
---- ---
Number of Shares
Title of class of Common Stock outstanding as of this report date
- ------------------------------ ----------------------------------
Common Stock, par value $.10 per share 2,685,694
-------------
Exhibit Index is on Page 15
Page 1 of 16 Pages
<PAGE> 2
PART I
FINANCIAL INFORMATION
<PAGE> 3
<TABLE>
CONDENSED BALANCE SHEETS
APRIL 30 AND JANUARY 31, 1995
<CAPTION>
APRIL 30 JANUARY 31
----------- ----------
(Unaudited)
<S> <C> <C>
Assets
- -------
Current Assets:
Cash and cash equivalents $ 101,000 $ 47,000
Accounts receivable, net 713,000 547,000
Notes receivable 3,000 278,000
Inventories 1,050,000 853,000
Prepaid expenses and
other current assets 18,000 57,000
Deferred income taxes 85,000 35,000
------------ ------------
Total current assets 1,970,000 1,817,000
Property, plant and equipment, net 354,000 443,000
Notes receivable 334,000 --
Other assets 16,000 16,000
Deferred income taxes 386,000 362,000
------------ ------------
$ 3,060,000 $ 2,638,000
============ ============
Liabilities and Shareholders' Equity (Deficit)
- -----------------------------------------------
Current Liabilities:
Current maturities of long-term debt
and capital lease obligations $ 727,000 750,000
Accounts payable 695,000 388,000
Accrued expenses 246,000 245,000
Accrued payroll and payroll taxes 127,000 97,000
------------ ------------
Total current liabilities 1,795,000 1,480,000
Long-Term Obligations:
Long-term debt and capital lease obligations 1,418,000 1,486,000
Less current maturities of
long-term obligations 727,000 750,000
------------ ------------
691,000 736,000
Deferred gain on sale of property, plant
and equipment 258,000 --
Shareholders' Equity (Deficit):
Common stock 279,000 269,000
Additional paid-in capital 1,351,000 1,339,000
Deficit (1,117,000) (989,000)
------------ ------------
513,000 619,000
Less treasury stock (197,000) (197,000)
------------ ------------
316,000 422,000
------------ ------------
$ 3,060,000 $ 2,638,000
============ ============
</TABLE>
-3-
<PAGE> 4
<TABLE>
UNAUDITED
CONDENSED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED APRIL 30, 1995 AND 1994
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
Net sales $1,248,000 $1,508,000
Cost of goods sold 984,000 1,129,000
----------- -----------
Gross profit 264,000 379,000
Selling and administrative expenses 455,000 535,000
----------- -----------
Operating income (loss) (191,000) (156,000)
Other income (expenses)
Interest expense (40,000) (42,000)
Gain on sale of assets 29,000 --
----------- -----------
Income (loss) from continuing operations
before income taxes (202,000) (198,000)
Income taxes (benefit) (74,000) (72,000)
----------- -----------
Income (loss) from continuing operations (128,000) (126,000)
Discontinued operations
Gain from operations of
discontinued segment, net of taxes -- 425,000
----------- -----------
Net income (loss) $ (128,000) $ 299,000
=========== ===========
Earnings (loss) per common share:
Continuing operations $ (.05) $ (.05)
Discontinued operations -- .17
--------- ---------
Net income (loss) $ (.05) $ .12
======== ========
</TABLE>
-4-
<PAGE> 5
<TABLE>
UNAUDITED
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED APRIL 30, 1995 AND 1994
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
Cash flow from operating activities:
Net income (loss) $(128,000) $ 299,000
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 31,000 39,000
Provision for bad debts 1,000 1,000
(Gain) loss on sale of assets (29,000) (676,000)
Common stock issuance 22,000 --
Changes in assets and liabilities:
(Decrease) increase in accounts payable 307,000 (210,000)
Decrease (increase) in inventories (197,000) 16,000
Decrease (increase) in accounts receivable (167,000) (17,000)
Decrease (increase) in deferred income taxes (74,000) 177,000
Decrease in other, net 39,000 32,000
(Decrease) increase in accrued expenses 31,000 (148,000)
---------- ----------
Net cash (used in) provided by operating activities (164,000) (487,000)
Cash flows from investing activities:
Capital expenditures -- (5,000)
Proceeds from disposal of fixed assets 7,000 817,000
Collections on notes receivable 279,000 5,000
---------- ----------
Net cash provided by investing activities 286,000 817,000
Cash flows from financing activities:
Proceeds from line of credit 222,000 54,000
Payments on long-term obligations (290,000) (136,000)
Payment on short-term obligation -- (300,000)
---------- ----------
Net cash (used in) financing activities (68,000) (382,000)
Net increase (decrease) in cash and cash equivalents 54,000 (52,000)
Cash and cash equivalents at beginning of year 47,000 99,000
---------- ----------
Cash and cash equivalents at April 30 $ 101,000 $ 47,000
========== ==========
Supplemental cash flow information:
Interest paid $ 37,000 $ 73,000
========== ==========
Income taxes paid $ -- $ 4,000
========== ==========
Schedule of noncash financing and investing activities:
Credit sale of property, plant and equipment $ 338,000 $ --
========== ==========
</TABLE>
-5-
<PAGE> 6
MRL, INC.
UNAUDITED
NOTES TO CONDENSED FINANCIAL STATEMENTS
Note A - In the opinion of the Company, the accompanying unaudited
condensed financial statements contain all adjustments necessary
to present fairly the Company's results of operations and changes
in financial position for the three month period ended April 30,
1995 and 1994. All significant intercompany accounts and
transactions are eliminated in consolidation.
The unaudited condensed statement of operations for the three
month period ended April 30, 1994 has been restated to conform to
the presentation of the statement of operations for the fiscal
year ended January 31, 1995.
<TABLE>
Note B - The composition of inventory for the periods ended April 30, 1995
and January 31, 1995 is as follows:
<CAPTION>
4/30/95 1/31/95
---------- ----------
<S> <C> <C>
Finished goods $ 75,000 $ 41,000
Work in process 81,000 78,000
Raw materials and supplies 894,000 734,000
---------- ----------
Total inventory $1,050,000 $ 853,000
========== ==========
</TABLE>
Note C - Notes receivable at January 31, 1995 is a New Mexico Real Estate
Contract (NOTE) receivable from the sale of a property in
Albuquerque, New Mexico that occurred in fiscal 1994. This New
Mexico Real Estate Contract was sold on February 23, 1995.
Notes receivable at April 30, 1995 is a New Mexico Real Estate
Contract (NOTE) receivable from the sale of the final property in
Albuquerque, New Mexico that occurred on February 28, 1995. The
amount of the second note was for $337,500. The second note has
been assigned to the Company's primary lender, Norwest Business
Credit, Inc.
Note D - The Company accounts for income taxes in accordance with Statement
of Financial Accounting Standards No. 109, "Accounting for Income
Taxes" ("SFAS No. 109") issued in February 1992. The Company
adopted "SFAS No. 109" as of February 1, 1993.
<TABLE>
Total income tax expense (benefit) for the three month periods
ended April 30, 1995 and 1994 was allocated as follows:
<CAPTION>
1995 1994
--------- ----------
<S> <C> <C>
Income from
Continuing Operations $(74,000) $ (72,000)
Discontinued Operations -- 250,000
--------- ----------
$(74,000) $ 178,000
========= ==========
</TABLE>
-6-
<PAGE> 7
<TABLE>
Income tax expense (benefit) attributed to income from continuing
operations consists of:
<CAPTION>
Current Deferred Total
------- -------- -----
<S> <C> <C> <C>
Three Months Ended April 30, 1995:
U.S. Federal $ -- $ (68,000) $ (68,000)
State and Local -- (6,000) (6,000)
------- ---------- ----------
$ -- $ (74,000) $ (74,000)
======= ========== ==========
Three Months Ended April 30, 1994:
U.S. Federal $ 1,000 $ (64,000) $ (63,000)
State and Local -- (9,000) (9,000)
------- ---------- ----------
$ 1,000 $ (73,000) $ (72,000)
======= ========== ==========
</TABLE>
<TABLE>
The provision for income taxes differs from the amount of income
tax determined by applying the applicable U.S. statutory federal
income tax rate to income from continuing operations before
income taxes as a result of the following differences:
<CAPTION>
Three Months Three Months
Ended Ended
4/30/95 4/30/94
------------ ------------
<S> <C> <C>
Computed statutory tax $(68,000) $(64,000)
Increase (reduction) in
income taxes resulting from:
State income taxes, net of
federal income tax benefit (6,000) (9,000)
Alternative minimum
tax provision -- 1,000
--------- ---------
Income taxes (benefit) $(74,000) $(72,000)
========= =========
</TABLE>
-7-
<PAGE> 8
<TABLE>
The tax effects of temporary differences that give rise to
significant portions of the deferred tax assets at April 30, 1995
and January 31, 1995 are presented below.
<CAPTION>
4/30/95 1/31/95
------- -------
<S> <C> <C>
Net operating loss carryforward $1,569,000 $1,442,000
Plant and equipment, principally due
to difference in depreciation 62,000 62,000
Inventories, principally due to additional
costs inventoried for tax purposes
pursuant to the Tax Reform Act of 1986 19,000 15,000
Accrued vacation pay 15,000 13,000
Provision for loss on asset sale and
lawsuit settlement 10,000 40,000
Accounts receivable, principally due to
allowance for doubtful accounts 6,000 35,000
Alternative minimum tax carryforward 5,000 5,000
---------- ----------
Total gross deferred tax assets 1,686,000 1,612,000
Less valuation allowance 1,215,000 1,215,000
---------- ----------
Net deferred tax assets $ 471,000 $ 397,000
========== ==========
</TABLE>
At April 30, 1995, the Company had net operating loss carryforwards
for federal income tax purposes of approximately $4,400,000 which
are available to offset future federal taxable income, if any, for
periods ending from fiscal 2004 through fiscal 2009. In addition,
the Company had alternative minimum tax credit carryforwards of
approximately $5,000 which are available to reduce future federal
regular income taxes, if any, over an indefinite period.
Note E - Earnings (loss) per share are computed using the weighted average
number of shares of common stock outstanding of 2,639,627 and
2,585,694 for the three months ended April 30, 1995 and 1994,
respectively.
-8-
<PAGE> 9
MRL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
- -------------------------------------------------------------------------------
Capital Resources and Liquidity
- --------------------------------
The Company made principal payments during the first quarter of fiscal 1996
on industrial revenue bonds (IRB) of $250,000 by utilizing the proceeds from
the sale of the New Mexico Real Estate Contract note receivable that related
to a fiscal 1994 sale of property in Albuquerque, New Mexico. The $250,000
payment retired the principal outstanding on the Albuquerque, New Mexico IRB.
The Company did not make the May 1, 1995, Piggott, Arkansas IRB payment of
principal and interest of approximately $84,000. The payment was made by the
Arkansas Industrial Development Commission (which had guaranteed the IRB
payment) and discussions are in progress to negotiate a long-term repayment
schedule that would begin later in fiscal 1996. The Arkansas Industrial
Development Commission has proposed to make the final $285,000 Piggott,
Arkansas IRB payment due on May 1, 1996, with a repayment schedule to be
negotiated.
Accounts payable increased $307,000 from January 31, 1995 to April 30, 1995.
The increase was directly related to funds utilized in the operations during
the first quarter of fiscal 1996. Accounts payable decreased $210,000 for
the three month period ended April 30, 1994. The decrease was directly
related to funds provided by the sale of the real estate during the first
quarter of fiscal 1995.
Accounts receivable increased $167,000 from January 31, 1995. This was
primarily the result of the Utility Products operating group having greater
sales in March and April, 1995 compared to December 1994 and January 1995.
Accounts receivable increased $17,000 for the three month period ended April
30, 1994.
Inventories increased $197,000 from January 31, 1995. The Company plans a
reduction in inventories to more efficiently utilize working capital.
As of April 30, 1995, the Company was in violation of the debt service
coverage ratio covenant in its loan agreement entered into with Norwest
Business Credit, Inc. ("Norwest"). This covenant is contained in the
agreement with Norwest for a standstill period expiring March 31, 1996,
during which period the Company has agreed to use its best efforts to obtain
alternative financing. The Company is pursuing alternative lending sources
that are more accustomed to servicing the lower amounts of borrowing levels
that the Company currently requires; however, there is no assurance that such
alternative financing will be obtained. As a result of the violation,
Norwest has the right to terminate the standstill period, call the loan and
exercise its remedies under the loan agreement. The Company intends to
negotiate with Norwest for an agreement to continue the standstill period
while the Company pursues alternative lending sources; however, there is no
assurance that such an agreement will be obtained.
-9-
<PAGE> 10
The Company had approximately $105,000 of credit available under the loan
agreement at April 30, 1995. However, the Company is presently borrowing the
maximum amount permitted under the loan agreement based upon the collateral
borrowing base in the loan agreement. The Company has made additional
personnel reductions in the Utility Products Group and implemented additional
cost reductions for the entire Company. If, however, the Company continues
to experience significant operating losses in the future, there can be no
assurance sufficient capital will be available to meet its obligations.
On March 28, 1995 the Company sold its remaining property in Albuquerque,
New Mexico for $375,000, of the total price, 10% was paid in cash and the
balance was paid by delivery of a New Mexico Real Estate Contract. The
Contract bears a 10% interest rate with a payment schedule containing a 25
year amortization, with a balloon payment required after 7 years. The
Company collaterally assigned the New Mexico Real Estate Contract to Norwest
in connection with the Standstill Agreement described above.
Under the Standstill Agreement, the Company would receive 50% of the net
proceeds of the sale of the New Mexico Real Estate Contract, with the balance
being payable to the lender, which payment will permanently reduce the
borrowing availability under the loan agreement. The net proceeds from such
a sale are estimated to be approximately $265,000. In addition, subject to
the prior approval of the Company's Board of Directors, if the Company sells
the New Mexico Real Estate Contract and if the lender consents, the Company
will repurchase 250,000 shares of MRL, Inc. common stock for $78,125 under an
agreement with its former President.
<TABLE>
Results of Operations
- ----------------------
Sales decreased 17% for the three month period ended April 30, 1995, when
compared to the same period in fiscal 1995. Changes in sales by operating
group, were as follows:
<CAPTION>
Three Months Ended
April 30, 1995
----------------------
% Change
Net Over
Decrease Prior Year
---------- ----------
<S> <C> <C>
Utility Products $(233,000) (21%)
Precision Metals (27,000) (7%)
----------
Net Total $(260,000)
==========
</TABLE>
The decrease in sales for the Utility Products Group in the first quarter
of fiscal 1996 as compared with the same period in the prior year is a
continuation of the reduced level of demand by this group's customers. The
Company is in the process of restructuring this group to enable it to
continue to operate at such a reduced sales level. In May 1995, the Company
discontinued production for a two week period while continuing to meet
current production requirements.
-10-
<PAGE> 11
The Precision Metals Group's sales decrease for the three month period
ended April 30, 1995, compared with the same period in the prior year,
occurred primarily due to production difficulties with several new products
in the first quarter of fiscal 1996. The Company anticipates a growth in
sales from the Precision Metals Group for the balance of fiscal 1996 at
reasonable operating margins.
Selling and administrative expenses for the three month period ended
April 30, 1995, included approximately $22,000 of a noncash expense
associated with the issuance of 100,000 shares of MRL, Inc. common stock to
the Company's new President and CEO. Such expenses also included
approximately $38,000 under a separation agreement between the Company and
its former President and CEO.
Interest expense for the three month period ended April 30, 1995 was
$40,000, a $2,000 decrease compared to the same period in fiscal 1995, which
was due to lower debt levels. However, due to current levels of borrowing
and interest rate increases, the Company expects interest expense to increase
in the near-term.
For the three month period ended April 30, 1995, the Company experienced
a $29,000 gain from the sale of fixed assets, when the Company sold the
remaining Albuquerque, New Mexico real estate for $375,000. In addition, the
Company recorded a deferred gain of approximately $258,000, which will be
recognized upon the collection of the New Mexico Real Estate Contract.
For the three month period ended April 30, 1994, the Company experienced
a $676,000 gain from the sale of the St. Charles real estate on March 31,
1994, which amount was reflected in discontinued operations, net of income
taxes.
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS
No. 109") issued in February 1992. For the three month period ended April
30, 1995, the Company recorded $74,000 of income tax benefit compared to
$178,000 of income tax expense in the same period in fiscal 1995. For the
period ended April 30, 1994, discontinued operations contained $250,000 of
income tax expense.
For the three months ended April 30, 1995, the net loss was $128,000
compared to net income of $299,000 for the same period in the prior year.
The fiscal 1996 period was adversely affected by decreased sales volume and
the non-recurring selling and administrative expenses mentioned above. The
fiscal 1995 period contained the gain from the real estate sale recorded in
discontinued operations. Without the unusual selling and administrative
expenses, the operating loss in fiscal 1996 would have been $131,000, which
is less than the $156,000 operating loss in fiscal 1995.
-11-
<PAGE> 12
The Company has been contacted regarding a paint warranty issue by the
end user of standby power units supplied during fiscal 1994 with powder
coated paint, in connection with substantial paint imperfections on such
units. In late December 1994 the Company's customer, who had received the
standby power units and ultimately shipped them to the end user, filed a
breach of contract lawsuit against the Company in an amount to be determined,
but in excess of $900,000. The Company has investigated and verified the
extent of the problem, and estimates that it is possible that the cost to
correct the paint imperfections could exceed $1,000,000. It is the opinion
of the Company that the liability for correction of this problem is the
responsibility of an independent vendor that performed the powder coating for
the Company. Should the vendor be unable to satisfy this liability, which
the Company understands is likely to be the case, it is the opinion of
management that the Company has insurance coverage that will satisfy this
liability However, in December 1994 the Company's insurance carrier denied
coverage. The Company has been sued for breach of contract with respect to
the paint problem and, in turn, has brought suit against its insurance
carrier seeking to be defended and indemnified by the carrier against this
suit. Management continues to be of the opinion that Company resources will
not be required to satisfy this liability.
-12-
<PAGE> 13
PART II
OTHER INFORMATION
Item 3. Defaults Upon Senior Securities
-------------------------------
The Company failed to make a required principal and interest
payment on May 1, 1995, of approximately $84,000 on its Piggott,
Arkansas industrial revenue bonds. The payment was made by the
Arkansas Industrial Development Commission ("Commission"), which
had guaranteed the bonds payment. The Company is in discussions
with the Commission regarding a repayment schedule. The
Commission has proposed to make the final $285,000 bond payment
due May 1, 1996 and to negotiate a repayment schedule with the
Company.
The Company has entered into a Standstill Agreement with its
principal lender for a period ending March 31, 1996. The Company
is in default under its loan agreement due to not meeting various
financial covenants. The lender has agreed not to call the loan
during the standstill period so long as the Company uses its best
efforts to refinance the loan with a third party and otherwise
complies with the loan agreement, including a revised debt service
coverage ratio. As of April 30, 1995, the Company failed to meet
that ratio. As a result, the lender has the right to terminate
the standstill period, call the loan, and exercise its remedies
under the loan agreement. The Company intends to negotiate with
its principal lender for an agreement to continue the standstill
period while the Company pursues alternative lending sources;
however, there is no assurance that such an agreement will be
obtained.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) See Exhibit Index on Page 15.
(b) The following Reports on Form 8-K were filed during the quarter
ended April 30, 1995:
(i) Report filed March 15, 1995 regarding resignation of
William C. Cottle as President and Chief Executive
Officer.
-13-
<PAGE> 14
MRL, Inc.
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.
MRL, Inc.
Date: June 12, 1995 By: /s/Larry J. Stallings
-----------------------------------------
Larry J. Stallings
President and
Chief Executive Officer
Date: June 12, 1995 By: /s/ Duane E. Obert
-----------------------------------------
Duane E. Obert
Treasurer and Chief Financial Officer
-14-
<PAGE> 15
<TABLE>
MRL, Inc.
EXHIBIT INDEX
<CAPTION>
Exhibit Page of this
Number Description Report
- ------- ----------------------------------- ------------
<C> <S> <C>
11 Computation of Weighted Average Number 16
of Shares
</TABLE>
-15-
<PAGE> 1
EXHIBIT 11 (a)
<TABLE>
MRL, INC.
COMPUTATION OF WEIGHTED AVERAGE NUMBER OF SHARES
FISCAL 1996 PERIOD
<CAPTION>
DAYS
MAIN- WEIGHTED
DATE BALANCE TAINED SHARE DAYS AVERAGE
<S> <C> <C> <C> <C> <C>
Common shares
outstanding 02/01/95 2,585,694 41 106,013,454
03/14/95 2,685,694 48 128,913,312
-- ------------
89 234,926,766
Weighted average
number of shares,
three months ended
April 30, 1995 2,639,627
=========
FISCAL 1995 PERIOD
Common shares
outstanding 02/01/94 2,585,694 89 230,126,766
Weighted average
number of shares,
three months ended
April 30, 1994 2,585,694
=========
</TABLE>
-16-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
condensed financial statements for period ended April 30, 1995 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1995
<PERIOD-END> APR-30-1995
<CASH> 101,000
<SECURITIES> 0
<RECEIVABLES> 716,000
<ALLOWANCES> 0<F1>
<INVENTORY> 1,050,000
<CURRENT-ASSETS> 1,970,000
<PP&E> 354,000
<DEPRECIATION> 0<F2>
<TOTAL-ASSETS> 3,060,000
<CURRENT-LIABILITIES> 1,795,000
<BONDS> 691,000
<COMMON> 279,000
0
0
<OTHER-SE> 37,000
<TOTAL-LIABILITY-AND-EQUITY> 3,060,000
<SALES> 1,248,000
<TOTAL-REVENUES> 1,248,000
<CGS> 984,000
<TOTAL-COSTS> 1,439,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 40,000
<INCOME-PRETAX> (202,000)
<INCOME-TAX> (74,000)
<INCOME-CONTINUING> (128,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (128,000)
<EPS-PRIMARY> (.05)
<EPS-DILUTED> (.05)
<FN>
<F1>ALLOWANCES NOT REPORTED IN INTERIM STATEMENTS.
<F2>ACCUMULATED DEPRECIATION NOT REPORTED IN INTERIM STATEMENTS.
</TABLE>
