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, 1995
O R
[ ] 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 0-12699
ACTIVISION, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 94-2606438
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
11601 WILSHIRE BLVD., LOS ANGELES, CA 90025
(Address of principal executive offices) (Zip Code)
(310) 473-9200
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or 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 by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court: Yes [ X ] No [ ]
The number of shares of the registrant's Common Stock outstanding as of
October 24, 1995 was 14,219,078.
ACTIVISION, INC.
INDEX
Page No.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of
September 30, 1995 (unaudited) and March 31, 1995 3
Condensed Consolidated Statements of Operations
for the quarters and six months ended
September 30, 1995 and 1994 (unaudited) 4
Condensed Consolidated Statements of Cash Flows
for the quarters and six months ended
September 30, 1995 and 1994 (unaudited) 5
Notes to Condensed Consolidated Financial Statements
for the quarter and six months ended
September 30, 1995 (unaudited) 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 13
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
ACTIVISION, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands except share data)
<CAPTION>
September 30, March 31,
1995 1995
-------------- ------------
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 30,824 $ 37,355
Accounts receivable, net 11,427 5,566
Inventories, net 3,097 1,972
Prepaid software and license royalties 3,034 1,082
Other assets 528 342
------------ -----------
Total current assets 48,910 46,317
Property and equipment, net 2,456 1,643
Other assets 110 60
Excess purchase price over
identifiable assets acquired, net 20,221 20,863
------------ ----------
Total assets $ 71,697 $ 68,883
========== ==========
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
<S> <C> <C>
Accounts payable $ 3,291 $ 2,516
Accrued expenses 5,491 3,153
Deferred revenue 2,401 -
------------ -----------
Total current liabilities 11,183 5,669
Other liabilities 500 510
------------ -----------
Total liabilities 11,683 6,179 -----------------
------------ ------------
Commitments and contingencies
Shareholders' equity:
Common stock, $.000001 par value, 100,000,000 shares
authorized, 14,211,062 and 14,183,594 shares issued
and outstanding as of September 30, 1995 and
March 31, 1995, respectively - -
Additional paid-in capital 67,793 67,667
Accumulated deficit (7,585) (4,822)
Cumulative foreign currency translation (194) (141)
----------- -----------
Total shareholders' equity 60,014 62,704
----------- -----------
Total liabilities and shareholders' equity $ 71,697 $ 68,883
========== ==========
<FN>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
</TABLE>
<TABLE>
ACTIVISION, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(in thousands except per share data)
<CAPTION>
(Unaudited)
Quarter ended Six months ended
September 30, September 30,
---------------- -----------------
1995 1994 1995 1994
---------------- -----------------
<S> <C> <C> <C> <C>
Net revenues $ 18,848 $ 4,635 $ 22,167 $ 7,884
Cost of goods sold 6,743 1,515 8,297 3,324
---------------- --------------
Gross profit 12,105 3,120 13,870 4,560
---------------- --------------
Operating expenses:
Product development 4,065 1,753 8,644 3,068
Sales and marketing 4,197 1,353 6,090 2,621
General and administrative 1,156 670 2,142 1,417
Amortization of intangible assets 321 321 642 642
-------------- --------------
Total operating expenses 9,739 4,097 17,518 7,748
-------------- --------------
Operating income (loss) 2,366 (977) (3,648) (3,188)
Other income (expense):
Interest, net 409 388 934 737
-------------- --------------
Income (loss) before provision
for income taxes 2,775 (589) (2,714) (2,451)
Provision for income taxes 10 43 49 54
-------------- --------------
Net income (loss) $ 2,765 $ (632) $ (2,763)$ (2,505)
======== ======== ======== ========
Net income (loss) per share $ 0.18 $ (0.05) $ (0.19) $ (0.18)
======== ======== ======== ========
Number of shares used in computing
net income (loss) per common share 15,064 13,864 14,193 13,860
======== ======== ======== ========
<FN>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
</TABLE>
ACTIVISION, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
For the six months ended September 30,
(in thousands)
Increase (Decrease) in Cash
1995 1994
----------- -----------
Net cash used in operating activities $ (5,230) $ (2,915)
----------- -----------
Cash flows from investing activities:
Capital expenditures (1,374) (436)
Restricted cash - 1,500
----------- -----------
Net cash used in investing activities (1,374) 1,064
----------- -----------
Cash flows from financing activities:
Payments under line of credit agreements - (3,135)
Borrowings under line of credit agreements - 3,135
Proceeds from exercise of common stock options 126 24
----------- -----------
Net cash provided by financing activities 126 24
----------- -----------
Effect of exchange rate changes on cash (53) 22
----------- -----------
Net decrease in cash and cash equivalents (6,531) (1,805)
----------- -----------
Cash and cash equivalents at beginning of period 37,355 38,093
----------- -----------
Cash and cash equivalents at end of period $ 30,824 $ 36,288
========== ==========
The accompanying notes are an integral part of these condensed consolidated
financial statements.
1. BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements include the
accounts of Activision, Inc. and its subsidiaries. The information
furnished is unaudited and reflects all adjustments which, in the opinion
of management, are necessary to provide a fair statement of the results for
the interim periods presented. The financial statements should be read in
conjunction with the financial statements included in the Company's Annual
Report on Form 10-K for the year ended March 31, 1995.
Certain amounts in the condensed consolidated financial statements have
been reclassified to conform with the current period's presentation. These
reclassifications had no impact on previously reported working capital or
results of operations.
2. ACCOUNTS RECEIVABLE
Accounts receivable comprise (amounts in thousands):
September 30, March 31,
1995 1995
Accounts receivable $ 20,530 $ 10,035
Less:
Allowance for doubtful accounts (617) (528)
Allowance for sales returns and
price protection (8,486) (3,941)
------- -------
$ 11,427 $ 5,566
======= =======
The provision for bad debt expense for the quarter and six months ended
September 30, 1995 was approximately $142,000 and $196,000, respectively,
compared to approximately $82,000 and $154,000 for the quarter and six
months ended September 30, 1994. The provision for sales returns and
price protection for the quarter and six months ended September 30, 1995
was approximately $5,339,000 and $5,997,000, respectively, compared to
approximately $151,000 and $673,000 for the quarter and six months ended
September 30, 1994.
3. INVENTORIES
Inventories comprise (amounts in thousands):
September 30, March 31,
1995 1995
Finished goods $ 2,275 $ 1,769
Purchased parts and components 822 203
------- -------
$ 3,097 $ 1,972
======= =======
4. DEFERRED REVENUE
Revenue from licensing agreements which provide customers the right to
multiple copies in exchange for guaranteed amounts is recognized upon
delivery of the product master or the first copy; when per copy royalties
on sales exceed the minimum guaranteed quantities, revenue is recognized.
The Company defers recognition of revenue from licensing agreements until
the completion by the Company of its future obligations under such
agreements including, but not limited to, the achievement of technological
feasibility of the products or assets to be delivered under such
obligations and future collectibility. Deferred revenue of $2,401,000 as
of September 30, 1995 represents minimum guarantee payments received by the
Company in advance of future deliveries of products or product components
under such agreements.
5. AMORTIZATION OF INTANGIBLE ASSETS
Effective April 1, 1992, the Disc Company, Inc. ("TDC"), a Delaware
corporation and a wholly-owned subsidiary of International Consumer
Technologies Corporation, was merged with and into the Company, with the
Company as the surviving corporation. The excess of the purchase price
over the estimated fair values of the net assets acquired was recorded as
an intangible asset in the amount of $24,417,000. This intangible asset
is being amortized on a straight-line basis over a 20 year period.
Amortization was approximately $305,000 for each of the quarters ended
September 30, 1995 and 1994 and $611,000 for each of the the six month
periods ended September 30, 1995. The Company systematically evaluates
current and expected cash flow from operations on a non-discounted basis
for the purpose of assessing the recoverability of recorded intangible
assets. Some of the factors considered in this evaluation include
operating results, business plans, budgets and economic projections.
Should such factors indicate that recoverability might be impaired, the
Company would appropriately adjust the recorded amount of the intangible
asset and/or the period over which the recorded intangible asset is
amortized.
6. EARNINGS (LOSS) PER COMMON SHARE
Earnings (loss) per common share is computed using the weighted average
number of common and, when dilutive, common equivalent shares outstanding
during the period. For the quarter ended September 30, 1995, the weighted
average number of shares in the computation of earnings per share was
increased by approximately 867,000 of common equivalent shares.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OVERVIEW
The Company is a diversified international publisher of interactive
entertainment software. The Company develops and publishes entertainment
software for a variety of platforms, including both personal computer CD-ROM
desk-top systems, such as the Windows 95 operating system, and videogame set-top
hardware systems, such as the Sega Saturn and Sony Playstation. The Company
distributes its products worldwide through its direct sales force and, to a
lesser extent, through third party distributors and licensees.
RESULTS OF OPERATIONS
Net revenues for the quarter and six months ended September 30, 1995
increased 307% and 181%, respectively, from the same periods last year. The
increase in desk-top net revenues was primarily due to the initial release
during the current quarter of "Mechwarrior 2" (PC CD) and "Pitfall: The Mayan
Adventure" (PC CD) as well as continuing sales of the "Activision Atari 2600
Action Pack" line (PC CD and Macintosh CD). The increase in set-top net
revenues is due to the initital release during the current quarter of
"Mechwarrior 3050" (Super Nintendo Entertainment System ("SNES")), "Shanghai
Triple Threat" (Sega Saturn) and continuing sales of "Pitfall: The Mayan
Adventure" (SNES, Sega Genesis, Sega CD and Sega 32X). On-line, OEM,
licensing and other net revenues increased due to OEM and licensing revenue
related to "Mechwarrior 2", "Pitfall: The Mayan Adventure" and "Shanghai: Great
Moments."
<TABLE>
Net revenues by territory were as follows (amounts in thousands):
<CAPTION>
Quarter Ended September 30, Six Months Ended September 30,
-----------------------------------------------------------
1995 1994 1995 1994
-----------------------------------------------------------
% of Net % of Net % of Net % of Net
AmountRevenues AmountRevenues AmountRevenues AmountRevenues
<S> <C> <C> <C> <C> <C> <C> <C> <C>
North America $ 14,789 78.5% $ 3,693 79.7% $16,972 76.6% $ 6,096 77.3%
Europe 1,958 10.4% 286 6.2% 2,028 9.1% 612 7.8%
Japan 1,057 5.6% 471 10.1% 1,896 8.6% 836 10.6%
Australia and
Pacific Rim 1,044 5.5% 185 4.0% 1,271 5.7% 340 4.3%
----------------------------------------------------------
$ 18,848 100.0% $ 4,635 100.0% $ 22,167 100.0% $ 7,884 100.0%
======= ============== ============== ============== =======
</TABLE>
<TABLE>
Net revenues by device/medium were as follows (amounts in thousands):
<CAPTION>
Quarter Ended September 30, Six Months Ended September 30,
------------------------------------------------------------
1995 1994 1995 1994
-------------------------------------------------------------
% of Net % of Net % of Net % of Net
Amount Revenues Amount Revenues Amount Revenues Amount Revenues
<C> <S> <S> <S> <S> <S> <S> <S> <S>
Set-top $ 2,084 11.1% $ 508 11.0% $ 2,769 12.5% $ 1,299 16.5%
Desk-top 13,499 71.6% 2,320 50.0% 15,537 70.1% 3,718 47.2%
On-line, OEM, licensing
and other 3,265 17.3% 1,807 39.0% 3,861 17.4% 2,867 36.3%
-----------------------------------------------------------
$ 18,848 100.0% $4,635 100.0% $22,167 100.0% $ 7,884 100.0%
======= ============== ============== ============== =======
</TABLE>
For purposes of the foregoing presentation, net revenues from set-top
systems relate to sales of entertainment software products designed by the
Company for operation on a hardware device that is connected to a television set
and displayed on a television screen. Examples of set-top systems include Super
Nintendo Entertainment System ("SNES"), Sega Genesis ("SGS"), Sega Saturn
("Saturn"), Sony Playstation, Atari Jaguar, CD-I and 3DO Multiplayer ("3DO").
The Company designs products for operation on many of these systems, and
normally it is required to pay a license fee for the right to create products
for a particular system. Net revenues from desk-top systems relate to sales of
those entertainment software products designed by the Company for operation
through a personal computer's operating system software and that is displayed on
the computer's monitor. Examples of computer operating systems include MS-DOS,
Windows and the Macintosh operating system. The Company generally is not
obligated to pay an operating system license fee for the right to produce desk-
top products.
<TABLE>
Net revenues by source were as follows:
<CAPTION>
Quarter Ended September 30, Six Months Ended September 30,
------------------------------------------------------------
1995 1994 1995 1994
------------------------------------------------------------
% of Net % of Net % of Net % of Net
Amount Revenues Amount Revenues Amount Revenues Amount Revenues
<C> <S> <S> <S> <S> <S> <S> <S> <S>
Activision Studios $ 18,563 98.5% $ 4,237 91.4% $ 21,276 96.0% $ 7,238 91.8%
Acquisitions and
Affiliated Labels 285 1.5% 398 8.6% 891 4.0% 646 8.2%
-----------------------------------------------------------
$ 18,848 100.0% $ 4,635 100.0% $ 22,167 100.0% $ 7,884 100.0%
======= ============== ============== ============== =======
</TABLE>
Net revenues from Activision Studios relate to those entertainment software
products (both set-top and desk-top) designed, developed and produced through
the Company's Activision Studios division and that are owned by the Company.
Net revenues from Acquisitions and Affiliated Labels relate to those
entertainment software products developed by third parties for which the Company
obtains all or certain distribution rights. Such distribution rights may take
the form of a co-ownership arrangement or a license, and the Company's
obligation to incur marketing, promotion, sales and advertising expenses in
connection with the rights being acquired may vary from product to product.
Cost of Goods Sold
Cost of goods sold related to set-top, desk-top and OEM revenues represents
the manufacturing and related costs of computer software and video games.
Manufacturers of the Company's computer software are located in the United
States and Europe and are readily available. Set-top cartridges and CDs are
manufactured by the respective video game console manufacturers, Nintendo and
Sega, who require significant lead time to fulfill the Company's orders.
Also included in cost of goods sold is royalty expense related to amounts
due to developers, title owners or other royalty participants based on product
sales. Various contracts are maintained with developers, product title owners
or other royalty participants which state a royalty rate and term of agreement,
among other items. The increase in cost of goods sold is related to the
increase in set-top, desk-top and OEM net revenues.
Gross Profit
For the quarter ended September 30, 1995, gross profit as a percentage of
net revenues was 64.2% compared to 67.3% for the quarter ended September 30,
1994. The majority of the Company's revenues in the quarter ended September 30,
1995 were derived from products developed for use with desk-top systems, which
carry a lower gross margin than on-line, OEM, licensing and other revenues. In
the prior year's quarter, on-line, OEM, licensing and other revenue accounted
for a significant portion of the Company's sales. The decrease in gross margin
over the period also was due to the decrease in gross margin on cartridge
products developed for set-top systems.
Gross profit increased as a percent of net revenues from 57.8% for the six
months ended September 30, 1994 to 62.6% for the six months ended September 30,
1995. The increase in gross profit over this period was primarily due to an
overall shift in the Company's product mix toward desk-top software products,
which carry a relatively high gross margin, and away from set-top software
products, which carry a relatively lower gross margin.
<TABLE>
Operating Expenses
<CAPTION>
Quarter Ended September 30, Six Months Ended September 30,
-----------------------------------------------------------
1995 1994 1995 1994
-----------------------------------------------------------
% of Net % of Net % of Net % of Net
Amount Revenues Amount Revenues Amount Revenues Amount Revenues
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Product development $ 4,065 21.6% $1,753 37.8% $8,644 38.9% $3,068 38.9%
Sales and marketing 4,197 22.3% 1,353 29.2% 6,090 27.5% 2,621 33.2%
General and admin. 1,156 6.1% 670 14.5% 2,142 9.7% 1,417 18.0%
Amortization of
intangible assets 321 1.7% 321 6.9% 642 2.9% 642 8.1%
------------------------------------------------------------
$ 9,739 51.7% $4,097 88.4% $17,518 79.0% $7,748 98.3%
======= ============== ============== ============== =======
</TABLE>
Product development expenses increased due to the continued growth of the
Company's product development departments, the increased number of products in
product development and the increase in costs associated with enhanced
production content and new technologies incorporated into such products.
Approximately 70% and 73% of product development expenses for the quarter and
six months ended September 30, 1995, respectively, relate to products which
will be released in subsequent periods. Sales and marketing expenses increased
as a result of marketing programs for both specific product releases and
corporate awareness programs as well as from the growth of the sales and
marketing departments, but decreased as a percentage of revenues as a result of
the increase in net revenues. General and administrative expenses increased due
to an increase in head count related expenses as compared to the same period in
the prior year.
Amortization of intangible assets represents the amortization of the excess
purchase price over identifiable assets acquired from the acquisition of Disc
Company, Inc. on April 1, 1992. This asset is being amortized on a straight-
line basis over a 20-year period. Also included in the amortization amount is
the amortization of capitalized reorganization costs, which are being amortized
using a straight-line method over a five-year period.
Other Income (Expense)
Interest income, net was $409,000 and $934,000 for the quarter and six
months ended September 30, 1995, respectively, compared to approximately
$388,000 and $737,000 for the quarter and six months ended September 30, 1994.
The increase was due to the higher yields earned on cash and cash equivalents
during the current fiscal quarter and six months as compared to the same periods
in the prior year.
Provision for Income Taxes
The income taxes of approximately $10,000 and $49,000 recorded in the
provision for income taxes for the quarter and six months ended September 30,
1995, respectively, as compared to $43,000 and $54,000 for the quarter and six
months ended September 30, 1994, represent foreign taxes withheld. These
foreign taxes may be available in the future as tax credits against future tax
liability. In addition, the Company has significant net operating losses which
may be carried forward against a portion of future taxable income for both
federal and state tax purposes.
Net Income (Loss)
For the reasons noted above, net income increased to $2,765,000 for the
quarter ended September 30, 1995 from a net loss of $(632,000) for the same
period of the prior fiscal year. For the six months ended September 30, 1995,
net loss increased to $(2,763,000) from a net loss of $(2,505,000) for the same
period of the prior fiscal year.
SEASONALITY
The Company's quarterly operating results have in the past varied
significantly and will likely in the future vary significantly depending on a
variety of factors, many of which are not under the Company's control. For
example, net revenues may be higher during the fourth calendar quarter as a
result of increased demand for consumer software during the year-end holiday
buying season. Net revenues in other quarters can vary significantly as a
result of the timing of new product introductions.
Products are generally shipped as orders are received, and consequently the
Company operates with little or no backlog. Net revenues in any quarter are
therefore substantially dependent on orders booked and shipped in that quarter.
The Company's expense levels are based in large part on the Company's product
development and marketing budgets. The majority of product development and
marketing costs are expensed as incurred, which is often before a product is
ever released. As the Company increases its development and marketing
activities, current expenses will increase and, if sales from previously
released products are below expectations, net income is likely to be
disproportionately affected. Due to all the foregoing, revenues and operating
results for any future quarter are not predictable with any significant degree
of accuracy. Accordingly, the Company believes that period-to-period
comparisons of operating results are not necessarily meaningful and should not
be relied upon as indications of future performance.
LIQUIDITY AND CAPITAL RESOURCES
On January 31, 1994, the Company completed a private placement of
approximately 5,000,000 shares of its common stock. The net proceeds from this
private placement, approximately $39.5 million, together with funds from
operations, have been the Company's primary source of liquidity for the fiscal
year ended March 31, 1995 and for the current fiscal year. At September 30,
1995, the Company had a balance of approximately $30.8 million of cash and cash
equivalents.
The Company uses its working capital to finance ongoing operations,
including acquisitions of inventory, to fund the development, production,
marketing and selling of new products, and to obtain intellectual property
rights for future products from third parties.
The Company's working capital decreased $2.9 million from March 31, 1995 to
September 30, 1995 as a result of the funding of the Company's expanding
operations and additional capital expenditures. At September 30, 1995, net
accounts receivable and inventories were approximately $14.5 million, an
increase of approximately $7.0 million from approximately $7.5 million as of
March 31, 1995. The increase is due to an increase in the Company's product
sales in the second quarter of the fiscal year as compared to the quarter
ended March 31, 1995.
As of September 30, 1995, total accounts payable and accrued liabilities
were approximately $8.8 million versus $5.7 million at March 31, 1995. The
increase at September 30, 1995 is related to the the increase in cost of goods
sold as well as sales and marketing expenses related to the increase in the
Company's product sales in the second quarter of the current fiscal year.
Management believes that the Company's existing capital resources are
sufficient to meet its current operational requirements for the foreseeable
future.
The Company's management currently believes that inflation has not had a
material impact on continuing operations.
PART II. - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The Company held its 1995 Annual Meeting of Stockholders on September 19,
1995 in Los Angeles, California. Two items were submitted to a vote of the
stockholders:
1. The election of six directors to hold office for one year terms
and until their respective successors are elected and have qualified.
All six nominees were recommended by the Board of Directors, and all
were elected. Set forth below are the results of the voting, for each
director.
For Withheld
Robert A. Kotick 11,350,087 14,959
Howard E. Marks 11,350,087 14,959
Brian G. Kelly 11,350,089 14,957
Barbara S. Isgur 11,350,085 14,961
Steven T. Mayer 11,350,089 14,957
Martin J. Raynes 11,349,964 15,082
2. The adoption of an amendment to the Company 1991 Stock Option and
Stock Award Plan to increase the number of shares of the Company's
Common Stock reserved for issuance thereunder from 2,066,667 to
4,066,667 shares. This proposal was adopted by a vote of 8,711,262 in
favor, 1,054,843 against, and 12,607 abstentions.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Date: October 24, 1995
ACTIVISION, INC.
/S/Robert A. Kotick Chairman, Chief Executive October 24, 1995
(Robert A. Kotick) Officer (Principal Executive
Officer) and Director
/S/Brian G. Kelly Chief Operating and Financial October 24, 1995
(Brian G. Kelly) Officer and Director
(Principal Financial Officer)
/S/Barry J. Plaga Chief Accounting Officer October 24, 1995
(Barry J. Plaga) (Principal Accounting Officer)
<TABLE> <S> <C>
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<S> <C>
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