This document consists of 15
pages, of which this page
is number 1.
FORM 10-Q
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------------
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-11250
DIONEX CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 94-2647429
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1228 Titan Way, Sunnyvale, California 94086
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (408) 737-0700
NONE
(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_____
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of February 3, 1997:
CLASS NUMBER OF SHARES
Common Stock 11,947,399
<PAGE>
DIONEX CORPORATION
INDEX
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS Page
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, 1996 and June 30, 1996............... 3
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended December 31, 1996 and 1995..... 4
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Six Months Ended December 31, 1996 and 1995....... 5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended December 31, 1996 and 1995....... 6-7
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS........................................ 8-9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.............10-13
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS......................................... 14
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K................ 14
SIGNATURES............................................... 15
2
<PAGE>
DIONEX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
- -------------
December 31, June 30,
ASSETS 1996 1996
(unaudited)
Current assets:
Cash and equivalents (including invested cash
of $9,451 at December 31, 1996 and $10,244
at June 30, 1996)............................$ 16,359 $ 16,986
Temporary cash investments..................... 9,252 16,551
Accounts receivable (net of allowance for
doubtful accounts of $505 at December 31,
1996 and $488 at June 30, 1996).............. 28,533 28,078
Inventories.................................... 8,301 8,258
Deferred tax benefits.......................... 7,214 6,590
Prepaid expenses and other..................... 1,116 1,336
Total current assets.................... 70,775 77,799
Property, plant and equipment, net............... 30,068 30,409
Other assets .................................... 7,488 4,978
$108,331 $113,186
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable to banks.........................$ - $ 273
Accounts payable............................... 3,804 4,381
Accrued liabilities............................ 16,448 18,398
Income taxes payable........................... 5,371 3,642
Accrued product warranty....................... 3,452 3,217
Total current liabilities............... 29,075 29,911
Deferred taxes................................... 2,071 1,071
Stockholders' equity:
Preferred stock (par value $.001 per share;
1,000,000 shares authorized; none
outstanding)................................. - -
Common stock (par value $.001 per share;
40,000,000 shares authorized; outstanding:
11,903,944 shares at December 31, 1996 and
12,369,877 shares at June 30, 1996).......... 32,703 32,683
Retained earnings.............................. 42,867 49,251
Accumulated translation adjustments............ (155) 34
Unrealized gain on securities.................. 1,770 236
Total stockholders' equity.............. 77,185 82,204
$108,331 $113,186
See notes to condensed consolidated financial statements.
3
<PAGE>
DIONEX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED DECEMBER 31, 1996 AND 1995
(In thousands, except per share amounts)
- ------------------
1996 1995
(unaudited)
Net sales...................................... $36,600 $34,010
Cost of sales.................................. 11,084 10,515
Gross profit................................... 25,516 23,495
Operating expenses:
Selling, general and administrative.......... 12,284 11,854
Research and product development............. 3,117 2,987
Total operating expenses.................. 15,401 14,841
Operating income............................... 10,115 8,654
Interest income................................ 367 550
Interest expense............................... (27) (18)
Income before taxes on income.................. 10,455 9,186
Taxes on income................................ 3,607 3,192
Net income..................................... $ 6,848 $ 5,994
Net income per common and equivalent share..... $ .54 $ .43
Common and equivalent shares used in
computing per share amounts.................. 12,698 13,910
See notes to condensed consolidated financial statements.
4
<PAGE>
DIONEX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
SIX MONTHS ENDED DECEMBER 31, 1996 AND 1995
(In thousands, except per share amounts)
- ------------------
1996 1995
(unaudited)
Net sales................................... $68,108 $64,066
Cost of sales............................... 20,738 20,183
Gross profit................................ 47,370 43,883
Operating expenses:
Selling, general and administrative....... 23,765 23,276
Research and product development.......... 5,874 5,671
Total operating expenses............... 29,639 28,947
Operating income............................ 17,731 14,936
Interest income............................. 712 1,113
Interest expense............................ (48) (46)
Income before taxes on income............... 18,395 16,003
Taxes on income............................. 6,346 5,561
Net income.................................. $12,049 $10,442
Net income per common and equivalent share.. $ .94 $ .75
Common and equivalent shares used in
computing per share amounts............... 12,809 13,999
See notes to condensed consolidated financial statements.
5
<PAGE>
DIONEX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED DECEMBER 31, 1996 AND 1995
(In thousands)
- ------------------
1996 1995
(unaudited)
Cash and equivalents provided by (used for):
Cash flows from operating activities:
Net income........................................$12,049 $10,442
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization................... 1,247 1,621
Deferred taxes.................................. (650) (1,011)
Changes in assets and liabilities:
Accounts receivable........................... (899) (934)
Inventories................................... (136) 138
Prepaid expenses and other assets............. 215 333
Accounts payable.............................. (543) 148
Accrued liabilities........................... (1,962) 103
Income taxes payable.......................... 1,750 (1,758)
Accrued product warranty...................... 238 203
Net cash provided by operating activities......... 11,309 9,285
Cash flows from investing activities:
Purchase of temporary cash investments..........(11,100) (16,749)
Proceeds from maturities of temporary
cash investments.............................. 18,399 15,582
Purchase of property, plant and equipment....... (899) (994)
Other........................................... (75) (196)
Net cash provided by (used for) investing
activities...................................... 6,325 (2,357)
Cash flows from financing activities:
Net change in notes payable to banks............ (270) (195)
Sale of common stock............................ 1,522 1,544
Repurchase of common stock......................(19,936) (17,002)
Other........................................... - (186)
Net cash used for financing activities............(18,684) (15,839)
Effect of exchange rate changes on cash........... 423 1,656
Net decrease in cash and equivalents.............. (627) (7,255)
Cash and equivalents, beginning of period......... 16,986 36,165
Cash and equivalents, end of period...............$16,359 $28,910
(continued)
6
<PAGE>
DIONEX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED DECEMBER 31, 1996 AND 1995
(In thousands)
- ------------------
1996 1995
(unaudited)
(continued)
Supplemental disclosures of cash flow information:
Income taxes paid.................................$5,208 $8,005
Interest paid.....................................$ 50 $ 45
See notes to condensed consolidated financial statements.
7
<PAGE>
DIONEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
- ------------------
1. Basis of Presentation
The condensed consolidated financial statements included
herein have been prepared by the Company, without audit,
pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote
disclosures normally included in financial statements
prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such
rules and regulations, although the Company believes the
disclosures which are made are adequate to make the
information presented not misleading. It is suggested that
these condensed consolidated financial statements be read
in conjunction with the consolidated financial statements
and the notes thereto included in the Company's Annual
Report to Stockholders for the fiscal year ended
June 30, 1996.
The unaudited condensed consolidated financial statements
included herein reflect all adjustments (which include only
normal, recurring adjustments) which are, in the opinion of
management, necessary to state fairly the results for the
periods presented. The results for such periods are not
necessarily indicative of the results to be expected for
the entire fiscal year ending June 30, 1997.
2. Inventories
Inventories consist of (in thousands):
December 31, June 30,
1996 1996
Finished goods $3,406 $3,160
Work in process 2,152 1,847
Raw materials and subassemblies 2,743 3,251
$8,301 $8,258
8
<PAGE>
DIONEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
- ------------------
3. Income Taxes
The effective income tax rate for the first half of fiscal
1997 was 34.5%, down slightly from the 34.8% reported in the
first half of fiscal 1996.
4. Net Income Per Share
Net income per common and equivalent share is computed by
dividing net income by the weighted average number of common
shares and dilutive common share equivalents outstanding
during each period. The difference between primary and
fully diluted net income per share is not significant in any
period.
5. Common Stock Repurchases
During the first half of fiscal 1997, the Company
repurchased 556,800 shares of its common stock on the open
market compared with 651,800 shares repurchased in the first
half of the previous fiscal year. During all of fiscal
1996, the Company repurchased 1,601,000 shares.
6. Authorized Shares of Common Stock
On October 25, 1996, the stockholders of the Company
approved an amendment to the Company's Certificate of
Incorporation increasing the number of authorized shares
of common stock from 20,000,000 to 40,000,000.
9
<PAGE>
DIONEX CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations - Three Months Ended December 31, 1996
and 1995
Net sales for the second quarter of fiscal 1997 were $36.6
million, an increase of 8% from the $34.0 million reported for
the same period last year. The increase in sales reflects
continued solid growth in the Company's international markets and
improved demand for the Company's products in North America. Had
currency rates been the same as in last year's second quarter,
sales growth would have been 11%.
Gross margin for the second quarter of fiscal 1997 was 69.7%, up
.6% from the 69.1% reported for the same period last year. The
increase in gross margin was due primarily to lower manufacturing
costs and a more favorable product mix, partially offset by an
unfavorable effect of currency fluctuations. There were no
significant selling price changes between these periods.
Operating expenses of $15.4 million for the second quarter of
fiscal 1997 were up $600,000, or 4%, from the $14.8 million
reported in the same quarter last year. As a percentage of
sales, operating expenses were 42%, a decrease from 44% for the
second quarter last year. Selling, general and administrative
(SG&A) expenses increased $400,000, or 4%, to $12.3 million in
the second quarter of fiscal 1997. The increase was due to
higher personnel and related costs partially offset by the effect
of currency fluctuations on international selling expenses.
Research and development (R&D) costs of $3.1 million were up 4%
from the $3.0 million reported in the same period last year. The
increase in costs was due to higher personnel and related costs.
The level of R&D spending varies depending on both the breadth of
the Company's R&D efforts and the stage of specific product
development.
Interest income for the second quarter of fiscal 1997 declined to
$367,000 from the $550,000 reported in the second quarter last
year. The decline was due to a lower average cash balance. The
lower average cash balance resulted from the Company's share
repurchase programs.
10
<PAGE>
The effective tax rate for the second quarter of fiscal 1997 was
34.5%, compared with 34.8% in the second quarter a year ago.
Variations in the tax rate reflect changes in the mix of taxable
income among the various tax jurisdictions in which the Company
does business. The effective tax rate for the remainder of
fiscal 1997 is expected to be consistent with the first half of
fiscal 1997.
Net income in the second quarter of fiscal 1997 increased 14% to
$6.8 million compared with $6.0 million reported for the same
period last year. Net income per share rose $.11, or 26%, to
$.54 compared with $.43 for the same period last year. Net
income per share was favorably impacted by the Company's stock
repurchase programs.
Results of operations - Six months ended December 31, 1996
and 1995
Net sales for the six months ended December 31, 1996 were $68.1
million, an increase of 6% over the $64.1 million reported for
the first half of fiscal 1996. The increase in sales was
attributable to improving demand in North America and continued
solid growth in the Company's international markets. Currency
fluctuations had an unfavorable effect on sales growth in the
first half of fiscal 1997. Had currency rates been the same as
in the first half of last year, sales growth would have been 10%.
Gross margin in the first half of fiscal 1997 was 69.6%, an
increase over the gross margin of 68.5% in the first half of
fiscal 1996. The improvement in gross margin is attributable to
a favorable mix of products and services sold and lower
manufacturing costs partially offset by an unfavorable effect of
currency fluctuations. There were no significant selling price
changes between these periods.
Operating expenses for the first six months of fiscal 1997 of
$29.6 million increased by 2% from the $28.9 million reported for
the first six months last year. Operating expenses as a
percentage of sales decreased to 44% from the 45% of sales
reported last year. SG&A expenses for the first six months of
fiscal 1997 increased 2% to $23.8 million. Increases in
personnel and related costs, advertising, and domestic selling
costs were partially offset by the effect of currency
fluctuations on international selling expenses. SG&A expenses
were 35% of sales for the first six months of fiscal 1997
compared with 36% for the same period last year. The Company
anticipates that SG&A expenses will increase slightly in the
second half due to the addition of a new subsidiary in Austria,
which was established effective January 1, 1997.
11
<PAGE>
R&D expenses for the first six months were $5.9 million, an
increase of $200,000, or 4%, compared with the $5.7 million
reported for the same period last year. Personnel and related
costs were the primary reason for the increase in R&D expenses.
The level of R&D spending varies depending on both the breadth of
the Company's R&D efforts and the stage of specific product
development.
Interest income for the first half of fiscal 1997 declined 36% to
$712,000 from $1.1 million reported for the same period last
year. The decline in interest income was due to a lower average
cash balance. The lower average cash balance was caused
primarily by share repurchases under the Company's share
repurchase programs.
The effective income tax rate was 34.5% in the first quarter of
fiscal 1997, compared to 34.8% in the prior year's first quarter.
Variations in the tax rate reflect variations in the mix of
taxable income among the various tax jurisdictions in which the
Company does business. The effective tax rate for the remainder
of fiscal 1997 is expected to be consistent with the first half
rate.
Net income of $12.0 million increased $1.6 million or 15%, from
the first half of fiscal 1996. Net income per share grew $.19,
or 25%, to $.94 compared with $.75 for the same period last year.
Net income per share was favorably impacted by the Company's
stock repurchase programs.
Liquidity and Capital Resources
The Company's liquidity and capital resources remained strong
during the first half of fiscal 1997. At December 31, 1996, the
Company had cash and cash investments of $25.6 million.
During the second quarter of fiscal 1997, the Company repurchased
317,300 shares of its common stock bringing the total repurchases
for the first half of fiscal 1997 to 556,800 shares compared with
651,800 shares repurchased in the first half of last year.
During all of fiscal 1996, the Company repurchased 1,601,000
shares.
At December 31, 1996, there were no borrowings outstanding under
the Company's $14.8 million committed bank lines of credit. The
Company believes that its cash flow from operations, its current
cash and cash investments and the $14.8 million bank lines of
credit will be adequate to meet its cash requirements for fiscal
1997 and the foreseeable future.
The impact of inflation on Dionex Corporation's financial
position and results of operations was not significant during the
six months ended December 31, 1996.
12
<PAGE>
Except for historical information contained herein, the above
discussion contains forward-looking statements that involve risks
and uncertainties that could cause actual results to differ
materially from those discussed here. Such risks and
uncertainties include: competition from other products, existing
product obsolescence, fluctuation in worldwide demand for
analytical instrumentation, general economic conditions, foreign
currency fluctuations, new product development, including market
receptiveness, the ability to manufacture products on an
efficient and timely basis and at a reasonable cost and in
sufficient volume, the ability to attract and retain talented
employees and other risks as described in more detail in the
Company's Form 10-K.
13
<PAGE>
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
On October 25, 1996, the Company held its annual meeting
for the following purposes: (1) to elect directors, (2)
to approve an amendment to the Company's Certificate of
Incorporation to increase the authorized number of
shares of Common Stock from 20,000,000 to 40,000,000
shares and (3) to ratify the selection of Deloitte &
Touche LLP as the Company's independent auditors for its
fiscal year ending June 30, 1997. A description of these
matters is contained in the Company's Proxy Statement,
dated September 13, 1996, relating to the 1996 Annual
Meeting of Stockholders.
There were 12,223,880 shares of the Company's common
stock entitled to vote at the Annual Meeting of
Stockholders based on the September 9, 1996 record
date. The Company solicited proxies pursuant to
Regulation 14 of the Securities Exchange Act of 1934 and
there was no solicitation in opposition to management's
nominees for directors as listed in the proxy statement.
Each director received a minimum of 10,465,906 votes
which represented at least 85% of the outstanding common
shares entitled to vote.
The shareholders approved the amendment to the Company's
Certificate of Incorporation increasing the number of
common shares authorized with 8,668,135 votes for,
1,795,792 votes against and 15,379 votes abstaining.
The shareholders also voted to ratify the selection of
Deloitte & Touche LLP as the Company's independent
auditors for its fiscal year ended June 30, 1997.
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibits are filed with the Company's
Form 10-Q.
Exhibit Description
3.1 Restated Certificate of Incorporation
filed November 6, 1996
(b) The Company did not file any reports on Form 8-K during
the quarter ended December 31, 1996.
14
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934,
THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF
BY THE UNDERSIGNED THEREUNTO DULY AUTHORIZED.
DIONEX CORPORATION
(Registrant)
Date: February 5, 1997 By: /s/ A. Blaine Bowman
A. Blaine Bowman
President, Chief Executive
Officer
By: /s/ Michael W. Pope
Michael W. Pope
Vice President, Finance
and Administration
(Principal Financial and
Accounting Officer)
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS INCLUDED IN THE
FORM 10-Q OF DIONEX CORPORATION FOR THE QUARTER ENDED DECEMBER 31,
1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> DEC-31-1996
<CASH> 16359
<SECURITIES> 9252
<RECEIVABLES> 29038
<ALLOWANCES> 505
<INVENTORY> 8301
<CURRENT-ASSETS> 70775
<PP&E> 45072
<DEPRECIATION> 15004
<TOTAL-ASSETS> 108331
<CURRENT-LIABILITIES> 29075
<BONDS> 0
0
0
<COMMON> 32703
<OTHER-SE> 44482
<TOTAL-LIABILITY-AND-EQUITY> 108331
<SALES> 68108
<TOTAL-REVENUES> 68108
<CGS> 20738
<TOTAL-COSTS> 20738
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 48
<INCOME-PRETAX> 18395
<INCOME-TAX> 6346
<INCOME-CONTINUING> 12049
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12049
<EPS-PRIMARY> .94
<EPS-DILUTED> .94
</TABLE>
FILED WITH THE DELAWARE SECRETARY OF STATE ON NOVEMBER 6, 1996
CERTIFICATE OF AMENDMENT OF
RESTATED CERTIFICATE OF INCORPORATION OF
DIONEX CORPORATION (a Delaware corporation)
DIONEX CORPORATION, a Delaware corporation (the "Corporation"),
does hereby certify:
First: The name of the Corporation is DIONEX CORPORATION.
Second: The date on which the Corporation's original
Certificate of Incorporation was filed with the Delaware Secretary
of State is September 5, 1986.
Third: The Board of Directors of the Corporation acting
in accordance with Sections 141(f) and 242 of the General
Corporation Law of the State of Delaware, adopted resolutions to
amend and restate Article Fourth of the Restated Certificate of
Incorporation of the Corporation to read in full as follows:
FOURTH. The total number of shares of stock
which the corporation shall have authority to issue is
forty million (40,000,000) shares of Common Stock with
par value of $0.001 per share, and one million
(1,000,000) shares of Preferred Stock with a par value
of $0.001 per share.
The Preferred Stock may be issued from time to
time in one or more series. The Board of Directors is
expressly authorized in the resolution or resolutions
providing for the issue of any wholly unissued series
of Preferred Stock, to fix, state, and express the
powers, rights, designations, preferences,
qualification, limitations, and restriction thereof,
including, without limitation: the rate of dividends
upon which and the times at which dividends on shares
of such series shall be payable and the preference, if
any, which such dividends shall have relative to
dividends on shares of any other class or classes or
any series of stock of the corporation; whether such
dividends shall be cumulative or noncumulative, and if
cumulative, the date or dates from which dividends on
shares of such series shall be cumulative; the voting
rights, if any, to be provided for shares of such
series; the rights, if any, which the holders of shares
of such series shall have in the event of any voluntary
or involuntary liquidation, dissolution, or winding up
of the affairs of the corporation; the rights, if any,
which the holders of shares of such series shall have
to convert such shares into or exchange such shares for
shares of stock of the corporation and the terms and
conditions, including price and rate of exchange of
such conversion or exchange; the redemption (including
sinking fund provisions), if any, for shares of such
series; and such other powers, rights, designations,
preferences, qualifications, limitations, and
restrictions as the Board of Directors may desire to so
fix. The Board of Directors if also expressly
authorized to fix the number of shares constituting
such series and to increase or decrease the number of
shares of any series prior to the issue of shares of
that series and to decrease, but not increase, the
number of shares of any series subsequent to the issue
of shares of that series, but not below the number of
shares of such series then outstanding (in case the
number of shares of any series shall be so decreased,
the shares constituting such decrease shall resume the
status which they had prior to the adoption of the
resolution originally fixing the number of shares of
such series)."
FOURTH: Thereafter pursuant to a resolution of the Board
of Directors this Certificate of Amendment was submitted to the
stockholders of the Corporation for their approval, and was duly
adopted in accordance with the provisions of Section 242 of the
General Corporation Law of the State of Delaware.
Fifth: All other provisions of the Restated
Certificate of Incorporation shall remain in full force and
effect.
IN WITNESS WHEREOF, DIONEX CORPORATION has caused this Certificate
of Amendment to be signed by its President and Chief Executive
Officer and attested to by its Secretary this 30th day of October,
1996.
DIONEX CORPORATION
/S/ A. Blaine Bowman
A. Blaine Bowman
President and Chief Executive
Officer
ATTEST:
/s/ James C. Gaither
James C. Gaither
Secretary
