<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
/X/ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000
/ / Transition report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
Commission File No. 1-8726
RPC, INC.
(exact name of registrant as specified in its charter)
DELAWARE 58-1550825
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
2170 PIEDMONT ROAD, NE, ATLANTA, GEORGIA 30324
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code -- (404) 321-2140
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
--- ---
As of June 30, 2000, RPC, Inc. had 28,255,167 shares of common stock
outstanding.
<PAGE>
RPC, INC. AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2000, AND DECEMBER 31, 1999
(In thousands)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
2000 1999
(UNAUDITED) (AUDITED)
-----------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Cash and cash equivalents $4,866 $8,278
Marketable securities 4,364 4,798
Accounts receivable, net of allowance for doubtful
accounts of $4,897 and $4,659, respectively 43,881 34,871
Inventories, at lower of cost or market 21,198 19,631
Deferred income taxes 8,512 8,254
Federal income taxes receivable - 1,806
Prepaid expenses and other current assets 1,597 2,337
-----------------------------------------------------------------------------------------------------------
Current assets 84,418 79,975
-----------------------------------------------------------------------------------------------------------
Equipment and property, net 88,565 75,472
Marketable securities 19,512 24,871
Intangibles, net 8,576 9,006
Other assets 1,437 1,251
-----------------------------------------------------------------------------------------------------------
Total assets $202,508 $190,575
===========================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $10,815 $13,728
Accrued payroll and related expenses 7,029 5,725
Accrued insurance expenses 7,213 7,689
Accrued state, local and other taxes 4,498 4,106
Federal income taxes payable 938 -
Accrued discounts 2,159 1,131
Current portion of long-term debt 610 255
Other accrued expenses 8,195 8,976
-----------------------------------------------------------------------------------------------------------
Current liabilities 41,457 41,610
-----------------------------------------------------------------------------------------------------------
Long-term accrued insurance expenses 3,881 3,684
Long-term debt 918 1,547
Deferred income taxes 1,220 926
-----------------------------------------------------------------------------------------------------------
Total liabilities 47,476 47,767
-----------------------------------------------------------------------------------------------------------
Commitments and contingencies
-----------------------------------------------------------------------------------------------------------
Common stock 2,825 2,826
Capital in excess of par value 22,456 22,548
Earnings retained 129,751 117,434
-----------------------------------------------------------------------------------------------------------
Total stockholders' equity 155,032 142,808
-----------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $202,508 $190,575
===========================================================================================================
</TABLE>
The accompanying notes are an integral part of these statements.
2 of 15
<PAGE>
RPC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2000, AND 1999
(In thousands except per share data)
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
-------------------------------------- -------------------------------------
2000 1999 2000 1999
-------------------------------------------------------------------------------------- -------------------------------------
<S> <C> <C> <C> <C>
REVENUE $82,472 $59,978 $156,241 $114,913
-------------------------------------------------------------------------------------------------------------------------------
Cost of goods sold 34,778 28,475 66,662 54,386
Operating expenses 35,123 23,150 65,333 46,513
Depreciation and amortization 4,670 4,153 9,097 8,197
Gain on settlement of claim - - (6,817) -
Interest income (441) (482) (817) (848)
-------------------------------------------------------------------------------------------------------------------------------
Income before income taxes 8,342 4,682 22,783 6,665
Income tax provision 3,170 1,778 8,657 2,532
-------------------------------------------------------------------------------------------------------------------------------
NET INCOME $5,172 $2,904 $14,126 $4,133
===============================================================================================================================
EARNINGS PER SHARE
Basic $0.19 $0.10 $0.51 $0.15
-------------------------------------------------------------------------------------------------------------------------------
Diluted $0.18 $0.10 $0.50 $0.15
-------------------------------------------------------------------------------------------------------------------------------
AVERAGE SHARES OUTSTANDING
Basic 27,834 28,178 27,831 28,251
-------------------------------------------------------------------------------------------------------------------------------
Diluted 28,258 28,480 28,210 28,478
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these statements.
3 of 15
<PAGE>
RPC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2000, and 1999
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
-------------------------------------
2000 1999
------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATING ACTIVITES
Net income $14,126 $4,133
Noncash charges (credits) to earnings:
Depreciation and amortization 9,711 8,623
(Gain) on sale of equipment and property (680) (1,048)
Deferred income tax (benefit) provision 36 1,047
(Increase) decrease in assets:
Accounts receivable (9,010) (1,202)
Federal income tax receivable 1,806 2,439
Inventories (1,567) 280
Prepaid expenses and other current assets 740 187
Other non-current assets (186) (29)
Increase (decrease) in liabilities:
Accounts payable (2,913) 4,294
Federal income tax payable 938 0
Accrued payroll and related expenses 1,304 494
Accrued insurance expenses (279) 387
Other accrued expenses 639 1,200
------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 14,665 20,805
------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Capital expenditures (22,806) (6,657)
Proceeds from sale of equipment and property 1,378 1,257
Net sale (purchase) of marketable securities 5,793 (3,020)
Other (100) (19)
------------------------------------------------------------------------------------------------------
Net cash used for investing activities (15,735) (8,439)
------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Dividend distributions (1,976) (2,003)
Repayments of long term debt (274) (434)
Purchase of treasury stock (152) (2,774)
Proceeds from exercise of stock options 60 51
------------------------------------------------------------------------------------------------------
Net cash used for financing activities (2,342) (5,160)
------------------------------------------------------------------------------------------------------
Net (decrease) increase in cash and cash equivalents (3,412) 7,206
Cash and cash equivalents at beginning of period 8,278 10,029
------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $4,866 $17,235
======================================================================================================
</TABLE>
The accompanying notes are an integral part of these statements.
4 of 15
<PAGE>
RPC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL
The 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. Footnote
disclosures normally included in financial statements prepared in
accordance with accounting principles generally accepted in the United
States have been condensed or omitted pursuant to such rules and
regulations. These consolidated financial statements should be read in
conjunction with the financial statements and related notes contained
in the Company's annual report on Form 10-K for the fiscal year ended
December 31, 1999.
In the opinion of management, the consolidated financial statements
included herein contain all adjustments, consisting of normal recurring
adjustments, necessary to present fairly the financial position of the
Company as of June 30, 2000, the results of operations for the quarter
and the six months ended June 30, 2000 and 1999, and the cash flows for
the six months ended June 30, 2000 and 1999. The results of operations
for the quarter and six months ended June 30, 2000, are not necessarily
indicative of the results to be expected for the full year.
2. EARNINGS PER SHARE
Basic and diluted earnings per share are computed by dividing net
income by the respective weighted average number of shares outstanding
during the respective periods.
3. RECENT ACCOUNTING PRONOUNCEMENTS
In June, 1999, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 137, "Accounting for
Derivative Instruments and Hedging Activities - Deferral of the
Effective Date of FASB Statement No. 133," which defers the effective
date of SFAS No. 133 to all fiscal quarters of all fiscal years
beginning after June 15, 2000. SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," establishes accounting and
reporting standards for derivative instruments including certain
derivative instruments embedded in other contracts, and for hedging
activities. It requires entities to recognize all instruments as either
assets or liabilities in the balance sheet and measure those
instruments at fair value. The Company does not anticipate the adoption
of these standards to have a material impact on its financial position
or results of operations.
5 of 15
<PAGE>
RPC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONT'D
4. BUSINESS SEGMENT INFORMATION
RPC has two primary business segments: oil and gas services and
powerboat manufacturing. The oil and gas services companies provide a
variety of equipment, personnel, and specialized services to
exploration and production companies in the mid-continent and Gulf of
Mexico regions and selected international locations. The companies are
capable of, among other things, providing personnel and equipment for
performing well control services, renting specialized oil field
equipment including drill pipe, and providing tubular handling and
inspection services. The powerboat manufacturing segment, through
Chaparral Boats, is a leading national powerboat manufacturer with
sales through a domestic and international network of independent
dealers.
RPC evaluates the performance of its business segments using profit or
loss from operations before corporate expenses and income taxes. RPC
accounts for intersegment sales and transfers as if the sales or
transfers were to third parties, that is, at current market prices.
RPC's business segments are strategic business units that offer
different products and services. They are managed separately because
each business requires different technologies and marketing strategies.
Each of these businesses was acquired as a unit, and the management at
the time of acquisition was retained.
Certain information with respect to RPC's business segments is set
forth in the following table:
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
--------------------------- -------------------------
2000 1999 2000 1999
--------------------------- -------------------------
(IN THOUSANDS) (IN THOUSANDS)
<S> <C> <C> <C> <C>
REVENUE:
Oil and gas services $ 36,317 $ 21,761 $ 68,789 $ 42,273
Boat manufacturing 42,608 35,135 80,493 66,368
Other segments 3,547 3,082 6,959 6,272
----------------------- ---------------------------- --------------------------
Total revenue $ 82,472 $ 59,978 $ 156,241 $114,913
======================= ============================ ==========================
OPERATING INCOME (LOSS):
Oil and gas services $ 3,367 $ 395 $ 7,335 $ (1,444)
Boat manufacturing 5,650 5,126 10,175 9,420
Other segments 54 (452) (160) (323)
----------------------- ---------------------------- --------------------------
Total operating income $ 9,071 $ 5,069 $ 17,350 $ 7,653
======================= ============================ ==========================
Corporate expenses (1,170) (869) (2,201) (1,836)
Gain on settlement of
claim 0 0 6,817 0
Interest income 441 482 817 848
----------------------- ---------------------------- --------------------------
Income before income
taxes $ 8,342 $ 4,682 $ 22,783 $ 6,665
======================= ============================ ==========================
</TABLE>
6 of 15
<PAGE>
RPC, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 2000 COMPARED TO THREE MONTHS ENDED JUNE 30, 1999
Revenue for the second quarter ended June 30, 2000 increased $22,494,000 or 38%
to $82,472,000 compared with $59,978,000 last year.
The oil and gas services segment revenue was $36,317,000 for the second quarter
of 2000, a $14,556,000 or 67% increase, compared to $21,761,000 for the second
quarter of 1999. Beginning in the fourth quarter of 1999, oil and gas services
revenues began to improve as customer spending increased in response to higher
oil and natural gas prices. In the last six months, exploration and production
companies have been undertaking activities to increase production from existing
wells to take advantage of current commodity price levels. Although the number
of active drilling rigs in the United States has increased 59% when compared to
the prior year, spending on exploration activities has been weaker than spending
on production enhancement activities. If supply and demand for oil and natural
gas remain at current levels, exploration activities should increase and
generate additional opportunities for revenue growth for our oil and gas
services companies. Contributing to this segment's revenue increase was a new
pressure pumping service line which generated $3.5 million in revenue in the
second quarter of 2000, and a $2.2 million or 61% increase in revenue from
foreign projects, primarily in Venezuela.
The powerboat manufacturing segment revenue for the second quarter of 2000, was
$42,608,000 a 21% increase compared to $35,135,000 for the second quarter of
1999. The powerboat market continues to experience revenue increases and
Chaparral's sales backlog remains high by historical measures. However, recent
interest rate increases and signs of weakness in consumer confidence levels
could negatively impact future sales. The revenue increase for the second
quarter of 2000 compared to the second quarter of 1999 resulted from an increase
in the volume of boats sold coupled with a small increase in the average sales
price.
7 of 15
<PAGE>
RPC, INC. AND SUBSIDIARIES
ITEM 2. CONT'D
Cost of goods sold for the second quarter of 2000 was $34,778,000 compared to
$28,475,000 for the second quarter of 1999, an increase of $6,303,000 or 22%.
Cost of goods sold for the powerboat manufacturing segment totaled $32,341,000
for the second quarter of 2000 compared to $26,212,000 for the second quarter of
1999. The remainder of cost of goods sold relates to businesses in other
industries. The increase in cost of goods sold (as a percent of revenue) from
75% in 1999 to 76% in 2000 for the powerboat manufacturing segment is due
primarily to lower manufacturing efficiency due to manufacturing space
constraints caused by the large production volumes, to delays in vendor delivery
of certain parts, and to normal employee turnover. In the third quarter of 2000,
additional manufacturing space will be opened to address current space
constraints. In addition, the Company is working closely with its vendors to
improve vendor delivery performance.
Operating expenses for the second quarter of 2000 were $35,123,000 compared to
$23,150,000 for the second quarter of 1999, an increase of $11,973,000 or 52%.
The oil and gas services segment operating expenses were 79% of segment revenue
for the second quarter of 2000 compared to 85% in the second quarter of 1999.
The reduction in operating expenses as a percent of revenue within oil and gas
services is due to improved operating efficiencies resulting from higher
activity levels and revenue. Operating expenses in the boat manufacturing
segment were 10% of segment revenue for the second quarter of 2000 and 10% of
segment revenue for the second quarter of 1999.
Interest income for the second quarter of 2000 was $441,000 a 9% decrease from
$482,000 for the second quarter of 1999. The decrease in interest income
resulted from decreases in average investable balances of cash and marketable
securities offset by higher interest yields.
Net income for the second quarter of 2000 increased 78% to $5,172,000 or $0.18
diluted earnings per share compared to net income of $2,904,000 or $0.10 diluted
earnings per share for the second quarter of 1999. The increase in net income
and earnings per share was due primarily to the increases in revenue and
operating profits for all three business segments.
8 of 15
<PAGE>
RPC, INC. AND SUBSIDIARIES
ITEM 2. CONT'D
SIX MONTHS ENDED JUNE 30, 2000 COMPARED TO SIX MONTHS ENDED JUNE 30, 1999
Revenue for the six months ended June 30, 2000 was $156,241,000 compared with
$114,913,000 for the six months ended June 30, 1999, an increase of $41,328,000
or 36%. The oil and gas services segment revenue increased 63% and the powerboat
manufacturing segment revenue increased 21%. See the discussion of results for
the three months ended June 30, 2000 for an explanation of these increases.
Cost of goods sold for the six months ended June 30, 2000 was $66,662,000
compared to $54,386,000 for the six months ended June 30, 1999, an increase of
$12,276,000 or 23%. Cost of goods sold for the powerboat manufacturing segment
totaled $61,840,000 for the six months ended June 30, 2000 compared to
$49,687,000 for the six months ended June 30, 1999. The remainder of cost of
goods sold relates to businesses in other industries. The increase in cost of
goods sold (as a percent of revenue) from 75% in 1999 to 77% in 2000 for the
powerboat manufacturing segment is due primarily to lower manufacturing
efficiency. See the discussion of results for the three months ended June 30,
2000 for an explanation of these changes.
Operating expenses for the six months ended June 30, 2000 were $65,333,000
compared to $46,513,000 for the six months ended June 30, 1999, an increase of
$18,820,000 or 41%. The oil and gas services segment operating expenses were 77%
of segment revenue for the six months ended June 30, 2000 compared to 86% of
segment revenue for the six months ended June 30, 1999. The reduction in
operating expenses as a percent of revenue is due to improved operating
efficiencies as a result of higher activity levels and revenue. Operating
expenses in the boat manufacturing segment were 10% of segment revenue for the
six months ended June 30, 2000 compared to 10% of segment revenue for the six
months ended June 30, 1999.
Interest income for the six months ended June 30, 2000 was $817,000 a 4%
decrease from $848,000 for the six months ended June 30, 1999. The decrease in
interest income was caused by decreases in average investable balances of cash
and marketable securities offset by higher interest yields.
9 of 15
<PAGE>
RPC, INC. AND SUBSIDIARIES
ITEM 2. CONT'D
Net income for the six months ended June 30, 2000 was $14,126,000 or $0.50
diluted earnings per share compared to net income of $4,133,000 or $0.15 diluted
earnings per share for the six months ended June 30, 1999. In the first quarter
of 2000, RPC recorded a pre-tax gain in its powerboat manufacturing business
segment of $6,817,000 or $0.15 after tax diluted earnings per share relating to
a gain on settlement of a claim. For the six months ended June 30, 2000, net
income excluding the gain would have been approximately $9,899,000 or $0.35
diluted earnings per share compared to $4,133,000 or $0.15 diluted earnings per
share for the six months ended June 30, 1999. These increases were due to
increased revenues and improved operating results for all three business
segments.
FINANCIAL CONDITION
The Company's current ratio remained strong as of June 30, 2000, with current
assets of $84,418,000 exceeding current liabilities of $41,457,000 by a ratio of
2.0-to-1. This compares to a current ratio of 1.9-to-1 at December 31, 1999.
Capital expenditures during the first six months of 2000 totaling $22,806,000
were primarily for revenue-producing equipment in the oil and gas services
segment ($16,895,000) and the cost incurred to expand manufacturing facilities
($2,378,000) for the powerboat manufacturing segment. Funding for future capital
requirements is expected to be provided by available cash and marketable
securities and cash flow from operations.
SPIN-OFF TRANSACTION
RPC has made administrative progress toward completing the spin-off of its 100%
ownership in Chaparral Boats to shareholders including the receipt of a
favorable tax ruling from the Internal Revenue Service. The private letter
ruling provides that the proposed spin-off to its shareholders of the stock of
its powerboat manufacturing company will be tax-free to RPC and its
shareholders. The spin-off is intended to improve management focus, facilitate
additional acquisitions, and set the stage for enhanced future growth
opportunities for both of the separate companies.
10 of 15
<PAGE>
RPC, INC. AND SUBSIDIARIES
ITEM 2. CONT'D
FORWARD-LOOKING STATEMENTS
This form 10-Q includes "forward looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended (the "Securities Act"),
Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the Private Securities Litigation Reform Act of 1995. All statements,
other than statements of historical facts, included or incorporated by reference
which address activities, events or developments which the Company expects or
anticipates will or may occur in the future, including statements regarding
future capital requirements, anticipated impact of IBBI legal proceedings,
expected improvements in boat production efficiency, timing and structure of the
proposed spin-off transaction, potential exposure to market risk, the impact of
the year 2000 programming issue, and anticipated trends and similar expressions
concerning matters that are not historical facts, are forward-looking
statements. These statements are based on certain assumptions and analyses made
by the Company in light of its experience and its perception of historical
trends, current conditions and expected future developments as well as other
factors it believes are appropriate under the circumstances. However, whether
actual results and developments will conform with the Company's expectations and
predictions is subject to a number of risks and uncertainties which could cause
actual results to differ materially from the company's expectations, including
economic conditions, the price of oil and gas, the supply and demand for oil and
gas, interest rate increases, conditions in the industries in which the Company
operates, competition, and other factors, many of which are beyond the control
of the Company. Consequently, all of the forward-looking statements made are
qualified by these cautionary statements and there can be no assurance that the
actual results or developments anticipated by the Company will be realized or,
even if substantially realized, that they will have the expected consequences to
or effects on the Company or its business or operations. The Company assumes no
obligation to update publicly any such forward-looking statements, whether as a
result of new information, future events, or otherwise.
11 of 15
<PAGE>
RPC, INC. AND SUBSIDIARIES
ITEM 3.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
RPC maintains an investment portfolio, comprised of U.S. Government and
corporate debt securities, which is subject to interest rate risk exposure. This
risk is managed through conservative policies to invest in high-quality
obligations. RPC has performed an interest rate sensitivity analysis using a
duration model over the near term with a 10 percent change in interest rates.
RPC's portfolio is not subject to material interest rate risk exposure based on
this analysis. RPC does not expect any material changes in market risk exposures
or how those risks are managed.
12 of 15
<PAGE>
RPC, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company's Annual Meeting of Stockholders was held on April 25, 2000. At the
meeting, stockholders elected one Class II Director for the three year term
expiring in 2003. Results of the voting were as follows:
<TABLE>
<CAPTION>
ELECTION OF CLASS II DIRECTOR FOR WITHHELD
----------------------------- --- --------
<S> <C> <C>
Richard A. Hubbell 26,591,242 117,478
</TABLE>
ITEM 5. OTHER INFORMATION
None
13 of 15
<PAGE>
RPC, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION CONT'D
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
-------------- -----------
<S> <C>
3.1 RPC's Restated Certificate of Incorporation (incorporated
herein by reference to Exhibit 3.1 to the annual report Form
10-K for the fiscal year ended December 31, 1999).
3.2 By-laws of RPC (incorporated herein by reference to
Exhibit (3)(b) to the Annual Report on Form 10-K for the
fiscal year ended December 31, 1993).
4 Form of Stock Certificate (incorporated herein by reference
to the Annual Report on Form 10-K for the fiscal year ended
December 31, 1998).
27 Financial Data Schedule
</TABLE>
(b) Reports on Form 8-K
No reports on Form 8-K were filed or required to be filed during the
quarter ended June 30, 2000.
14 of 15
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RPC, INC.
Date: August 11, 2000 /s/ Richard A. Hubbell
----------------------------------
Richard A. Hubbell
President and Chief Operating Officer
Date: August 11, 2000 /s/ Ben M. Palmer
----------------------------------
Ben M. Palmer
Treasurer and Chief Financial Officer
15 of 15
