<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
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 0-14224
IFR SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 48-1197645
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
10200 WEST YORK STREET, WICHITA, KANSAS 67215
(Address and zip code of principal executive offices)
(316) 522-4981
(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 for such shorter periods 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
--- ---
There were 8,248,903 shares of common stock, par value $.01 per share, of
the Registrant outstanding as of July 18, 2000.
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IFR SYSTEMS, INC.
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
PAGE
<S> <C>
PART I -- FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets at June 30,
2000 and March 31, 2000 3
Condensed Consolidated Statements of Operations for the three
months ended June 30, 2000 and 1999 5
Condensed Consolidated Statements of Cash Flow for the
three months ended June 30, 2000 and 1999 6
Notes to Condensed Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
Item 3. Quantitative and Qualitative Disclosures about Market Risk 12
PART II -- OTHER INFORMATION
Item 6. Exhibits and reports on Form 8-K 13
SIGNATURES 14
</TABLE>
2
<PAGE>
PART I -- FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
IFR SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
JUNE 30, MARCH 31,
2000 2000
----------- --------
(UNAUDITED) (NOTE)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 2,715 $ 3,169
Accounts receivable, less $551 and $600
allowance for doubtful accounts, respectively 29,017 29,267
Inventories
Finished products 12,741 13,278
Work in process 9,320 9,174
Materials 14,050 14,537
-------- --------
36,111 36,989
Prepaid expenses and sundry 4,158 4,301
Deferred income taxes 2,242 2,248
-------- --------
TOTAL CURRENT ASSETS 74,243 75,974
PROPERTY AND EQUIPMENT:
Property and equipment 38,709 39,172
Allowances for depreciation (18,793) (17,976)
-------- --------
19,916 21,196
PROPERTY UNDER CAPITAL LEASE:
Building and machinery 5,201 5,201
Allowances for depreciation (2,527) (2,414)
-------- --------
2,674 2,787
OTHER ASSETS:
Cost in excess of net assets acquired, less
amortization of $1,742 and $1,556, respectively 19,939 20,125
Developed technology, less amortization
of $2,262 and $2,028, respectively 16,538 16,772
Other intangibles, less amortization of $2,659
and $2,446, respectively 12,107 12,320
Other 2,658 1,972
-------- --------
51,242 51,189
-------- --------
TOTAL ASSETS $148,075 $151,146
======== ========
</TABLE>
Note: The balance sheet at March 31, 2000 has been derived from the audited
financial statements at that date does not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements.
3
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IFR SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
JUNE 30, MARCH 31,
2000 2000
----------- --------
(UNAUDITED) (NOTE)
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term bank borrowings $ 19,200 $ 15,700
Accounts payable 9,723 12,493
Accrued compensation and payroll taxes 4,160 4,262
Other liabilities and accrued expenses 5,528 6,355
Federal and state income taxes and local taxes 2,074 1,800
Current maturity of capital lease obligations 190 190
Current maturity of long-term debt 5,500 5,250
-------- --------
TOTAL CURRENT LIABILITIES 46,375 46,050
CAPITAL LEASE OBLIGATIONS 3,200 3,248
LONG-TERM DEBT 54,760 56,135
DEFERRED INCOME TAXES 10,757 10,895
SHAREHOLDERS' EQUITY:
Preferred stock, $.01 par value -- authorized
1,000,000 shares, none issued -- --
Common stock, $.01 par value -- authorized
50,000,000 shares, issued 9,266,250 shares 93 93
Additional paid-in capital 7,289 7,330
Cost of common stock in treasury -- 1,017,347
and 1,025,722 shares, respectively (8,288) (8,357)
Accumulated other comprehensive income (loss) (4,417) (2,072)
Retained earnings 38,306 37,824
-------- --------
32,983 34,818
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $148,075 $151,146
======== ========
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE>
IFR SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JUNE 30,
-----------------------
2000 1999
<S> <C> <C>
SALES $ 34,549 $ 33,991
COST OF PRODUCTS SOLD 20,017 19,061
-------- --------
GROSS PROFIT 14,532 14,930
OPERATING EXPENSES:
Selling 6,037 6,186
Administrative 3,279 3,711
Engineering 3,439 4,275
-------- --------
12,755 14,172
-------- --------
OPERATING INCOME 1,777 758
OTHER INCOME (EXPENSE):
Interest income 53 113
Interest expense (2,013) (2,609)
Other, net 881 (108)
-------- --------
(1,079) (2,604)
-------- --------
INCOME (LOSS) FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 698 (1,846)
INCOME TAX EXPENSE (BENEFIT) 216 (745)
-------- --------
INCOME (LOSS) FROM CONTINUING OPERATIONS 482 (1,101)
INCOME FROM DISCONTINUED OPERATIONS
LESS APPLICABLE INCOME TAXES -- 326
-------- --------
NET INCOME (LOSS) $ 482 $ (775)
======== ========
EARNINGS (LOSS) PER SHARE -- BASIC:
Income (loss) from continuing operations $ 0.06 $ (0.13)
Income (loss) from discontinued operations -- 0.04
-------- --------
Net income (loss) $ 0.06 $ (0.09)
======== ========
EARNINGS (LOSS) PER SHARE -- DILUTED:
Income (loss) from continuing operations $ 0.06 $ (0.13)
Income (loss) from discontinued operations -- 0.04
-------- --------
Net income (loss) $ 0.06 $ (0.09)
======== ========
AVERAGE COMMON SHARES OUTSTANDING 8,244 8,223
======== ========
DILUTIVE COMMON SHARES OUTSTANDING 8,351 8,223
======== ========
</TABLE>
See notes to condensed consolidated financial statements.
5
<PAGE>
IFR SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JUNE 30,
2000 1999
------- -------
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ 482 $ (775)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation of property and equipment 1,059 1,392
Amortization of intangibles 633 766
Amortization of loan origination fees 151 --
Gain on sale of discontinued operations -- --
Deferred income taxes (132) (428)
Changes in operating assets and liabilities:
Accounts receivable 250 (723)
Inventories 878 61
Other current assets 143 (179)
Accounts payable and accrued liabilities (3,590) (224)
Other current liabilities 165 1,118
-------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES 39 1,008
INVESTING ACTIVITIES
Purchases of property and equipment (372) (874)
Proceeds from sale of equipment 56 17
Sundry (837) (210)
-------- ---------
NET CASH USED IN INVESTING ACTIVITIES (1,153) (1,067)
FINANCING ACTIVITIES
Principal payments on capital lease obligations (48) (47)
Principal payments on long-term debt (1,125) (875)
Principal payments on short-term bank borrowings (13,000) (1,100)
Proceeds from short-term bank borrowings 16,500 2,500
Proceeds from exercise of common stock options 28 (1)
-------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES 2,355 477
EFFECT OF EXCHANGE RATE CHANGES ON CASH (1,695) (962)
-------- ---------
DECREASE IN CASH AND CASH EQUIVALENTS (454) (544)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 3,169 5,806
-------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 2,715 $ 4,542
======== =========
</TABLE>
See notes to condensed consolidated financial statements.
6
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 2000
NOTE 1 -- BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three-month period ended June 30, 2000
are not necessarily indicative of the results that may be expected for the year
ending March 31, 2001. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Company's Annual
Report on Form 10-K for the year ended March 31, 2000.
The Company operates in one business segment, electronic test and
measurement (ETM).
NOTE 2 -- BANK BORROWINGS
In June 2000, the Company entered into an amendment of its Credit Agreement
with the bank syndication (the "Agreement"). Both of the term loans are payable
in quarterly installments of principal pursuant to a schedule contained in the
Agreement which calls for such payments to increase over the term of the loan.
Term Loan A and Term Loan B are due June 30, 2002. Under certain conditions the
Company has the ability to extend the term to June 30, 2003. Under the terms of
the Agreement, borrowings bear interest at a spread over LIBOR based on certain
financial criteria. The interest rate on the outstanding portion of the lines of
credit was 3.25% over LIBOR at June 30, 2000. As of June 30, 2000, the Company
has available unused lines of credit aggregating $3,800,000.
7
<PAGE>
NOTE 3 -- DISCONTINUED OPERATIONS
On June 25, 1999, the Board of Directors approved a formal plan to sell the
Company's Optical Test and Measurement (OTM) Division. The sale was completed on
July 7, 1999 to GN Nettest, a company in the GN Great Nordic Group, Copenhagen,
Denmark for $43,988,000 in cash. A net of tax gain of approximately $11,031,000
(approximately $1.34 per share) was recorded in the quarter ending September 30,
1999. The proceeds from the sale were used to reduce the Company's outstanding
debt obligation in July 1999, with $31,740,000 applied to long-term debt and
$11,260,000 used to reduce short-term debt.
The results of operations for the OTM Division have been segregated and
classified as discontinued operations in the consolidated statements of
operations and prior periods have been restated. Selected results of operations
for the OTM Division follows: (IN THOUSANDS):
<TABLE>
<CAPTION>
Three Months
Ended June 30,
1999
--------------------------------------------------------------------------------
<S> <C>
Sales $8,335
Income tax expense 310
Income (loss) from discontinued operations 326
</TABLE>
The consolidated statements of cash flows for 1999 include the OTM
Division.
NOTE 4 - COMPREHENSIVE INCOME
Total comprehensive loss was $1,863,000 and $2,206,000 for the three months
ended June 30, 2000 and 1999, respectively. The difference between the total
comprehensive loss and net income (loss) is due to foreign currency translation
adjustments.
8
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NOTE 5 - EARNINGS PER SHARE DATA
The following is a reconciliation of the numerator and denominators used in
computing basic and diluted earnings per share from continuing operations (in
thousands, except per share data):
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30,
2000 1999
--------------------------------------------------------------------------------
<S> <C> <C>
NUMERATOR
Income (loss) from continuing operations
available to common shareholders $ 482 $(1,101)
=================
DENOMINATORS
Basic earnings (loss) per share:
Weighted-average common shares
outstanding 8,244 8,223
=================
Basic earnings (loss) per share from
continuing operations $ 0.06 $ (0.13)
=================
Diluted earnings (loss) per share:
Weighted-average common shares
outstanding 8,244 8,223
Effect of stock options 107 1
-----------------
Weighted-average common shares
outstanding - diluted 8,351 8,224
=================
Diluted earnings (loss) per share from
continuing operations $ 0.06 $ (0.13)
=================
</TABLE>
Note - Because the effect of stock options for the FY00 interim period is
antidilutive, diluted per share amounts are equal to the basic per share
amounts.
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 - FORWARD-LOOKING STATEMENTS
In addition to historical information, this report contains forward-looking
statements and information that are based on management's beliefs and
assumptions, as well as information currently available to management.
Forward-looking statements are all statements other than statements of
historical fact included in this report. When used in this document, the words
"anticipate", "estimate", "expect", "intend", "believe", and similar expressions
are intended to identify forward-looking statements. Although the Company
believes that the expectations reflected in such forward-looking statements are
reasonable and are based on reasonable assumptions within the bounds of its
knowledge of its business and operations, it can give no assurance that such
expectations will prove to be correct and that actual results will not differ
materially from the Company's expectations. Such forward-looking statements
speak only as of the date of this report, and the Company cautions readers not
to place undue reliance on such statements.
Factors that could cause actual results to differ from expectations
include: (1) the degree and nature of competition, including pricing pressure
and the development of new products or discoveries of new technologies by
competitors, (2) fluctuations in the global economy and various foreign
countries, (3) demand for the Company's products, (4) loss of significant
customers, (5) the Company experiencing delays in developing new products and
technologies, (6) the ability of the Company to continue the transition to
digital technologies in the communications test equipment products, (7) the
failure of such technologies or products to perform according to expectations,
(8) difficulties in manufacturing new products so they may be profitably priced
on a competitive basis, (9) lack of adequate market acceptance of new products
or technologies, (10) changes in products or sales mix and the related effects
on gross margins, (11) availability of components, parts, and supplies from
third party suppliers on a timely basis and at reasonable prices, (12) currency
fluctuations, (13) inventory risks due to changes in market demand or the
Company's business strategies, (14) inability to hire sufficient personnel at
reasonable levels of compensation and other labor problems, (15) inability to
realize anticipated efficiencies and savings from the Company's acquisition of
Marconi Instruments, Limited and (16) other risks described herein.
DISCONTINUED OPERATIONS
On June 25, 1999, the Board of Directors approved a formal plan to sell the
Company's Optical Test and Measurement (OTM) Division. The sale was completed on
July 7, 1999 to GN Nettest, a company in the GN Great Nordic Group, Copenhagen,
Denmark for $43,988,000 in cash. A net of tax gain of approximately $11,031,000
(approximately $1.34 per share) was recorded in the quarter ending September 30,
1999. The proceeds from the sale were used to reduce the Company's outstanding
debt obligation in July 1999, with $31,740,000 applied to long-term debt and
$11,260,000 used to reduce short-term debt.
The results of operations for the OTM Division have been segregated and
classified as discontinued operations in the consolidated statements of
operations and prior periods have been restated. The consolidated statements of
cash flows include the OTM Division.
10
<PAGE>
RESULTS OF OPERATIONS
Sales for the first quarter ended June 30, 2000 were $34,549,000 compared
to $33,991,000 in the first quarter of the prior year. This represents an
increase of 1.6% or $558,000 due to higher sales of communication test
instruments to government and commercial customers offset by lower sales of
analyzers and avionics products.
Gross margins decreased to 42.1% for the current year quarter as compared
to 43.9% in the previous year quarter. The decrease of 1.8% is due to an
unfavorable product mix.
Operating expenses decreased 4.8% to 36.9% of sales for the current
quarter. Administrative expenses decreased 1.5%, engineering expenses decreased
2.6% and selling expenses decreased 0.7% as a percentage of sales. Operating
expenses in general decreased as a percent of sales because of the
implementation of cost reductions in the prior year.
Other expenses decreased $1,525,000 compared to the prior year quarter due
to the reduced interest expense and gains from foreign currency transactions and
a fixed asset sale.
The estimated effective income tax rate was approximately 30.9% for the
current period and 40.4% for the previous year period. The decrease represents
the impact of the foreign subsidiaries and their related tax rates.
LIQUIDITY AND SOURCES OF CAPITAL
The Company maintains an adequate financial position with working capital
of $27,688,000 at June 30, 2000. The Company generated cash from operations of
$39,000 for the three months period ended June 30, 2000 compared to $1,008,000
for the previous year quarter. The decrease in cash provided from operations was
due to a decrease in net working capital.
Cash used in investing activities was $1,153,000 for the current quarter
compared to $1,067,000 in the previous year quarter. The primary component of
cash used is the payment of loan origination costs for the amendment to the
credit agreement.
Cash flows provided by financing activities was $2,355,000 and $477,000 for
the three months period ended June 30, 2000 and 1999, respectively. The increase
in funds provided was due primarily to the proceeds of short-term borrowings
offset by normal long-term debt principal payments.
No cash dividends were paid in fiscal year 2000 and no cash dividends are
anticipated to be paid in fiscal year 2001. Restrictive payment covenants in the
amended debt Agreement allow for cash dividends to be paid only when certain
leverage ratios are obtained.
On September 20, 1996, the Board of Directors of the Company authorized the
repurchase of up to 750,000 shares of the Company's common stock. The main
purpose of the shares buyback program is to offset the dilution of stock option
exercises and as a utilization of the anticipated excess cash flow during the
year. As of June 30, 2000, the Company had purchased an aggregate of 470,000
shares under the program. Restrictive covenants in the amended debt Agreement
limit the amount of capital stock allowed to be purchased.
At June 30, 2000, $19,200,000 was outstanding under the lines of credit.
In June 2000 the Company completed an amendment to the Agreement which
increased the interest rate by approximately 25 basis points effective June 15,
2000. In addition, the amendment provides for a reduction in the aggregate
revolving loan commitment from $25,000,000 to $23,000,000.
The Company anticipates that available lines of credit and funds generated
from operations will be adequate to meet capital asset expenditures, debt
payments, interest and working capital needs for the current fiscal year ending
March 31, 2001.
11
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to various market risks, including changes in
foreign currency exchange rates and interest rates. The Company does not enter
into derivatives or other financial instruments for trading or speculative
purposes.
The Company is exposed to interest rate risk primarily from its Credit
Agreement (Agreement) in which floating rates are based upon the relationship
between earnings before interest, depreciation and taxes (EBITDA) and total
debt. To mitigate the impact of fluctuations in interest rates, the Company has
entered into two interest rate swap contracts on $50,000,000 of the associated
debt. The first contract is valued at $25,000,000 with a fixed rate of 5.76% and
expires on March 31, 2001. The contract includes an option to extend until March
31, 2003. The second contract is valued at $25,000,000 with a fixed rate of 5.8%
and expires on March 31, 2001. The contract includes an option to extend until
March 31, 2003. Because of the Company's interest rate swap agreements a
hypothetical 10% movement in interest rates would not have a material impact on
net income.
Due to the global nature of its operations, the Company conducts its
business in various foreign currencies (primarily the currencies of Western
Europe) and as a result, is subject to the exposures that arise from foreign
exchange rate movements. Such exposures arise primarily from the translation of
results of operations from outside the United States. Because the Company
intends to maintain its international operations and not repatriate earnings
from those operations, IFR does not hedge its net investment exposure.
OUTLOOK
FOCUS ON TECHNOLOGY. The Company created dedicated engineering and marketing
customer response teams at the beginning of 2000. Each of the primary product
groups - radio test sets, signal sources, signal analyzers, microwave analyzers
and avionics now have the focus, resources and structure to add urgency to our
product development efforts. The Company is now beginning to realize those
benefits with accelerated development-to-delivery process and improved customer
service.
A primary focus within all of our teams is on advanced digital wireless
test for the next generation of digital cellular systems or 3G systems. In
addition our new test systems for new European and American digital public and
private mobile radio systems are beginning to bear fruit in new products and
increased sales.
We will continue to strengthen our position in wireless signal generators
and analyzers with enhanced analog and digital functions, and focus new
resources on advanced digital test systems for R&D, production and service
applications.
NEW PRODUCT INTRODUCTIONS. The Company announced a number of new products and
new product enhancements during the quarter. The Company began shipments of the
new 1900-5 enhanced protocol analysis test system for ANSI-136 digital cellular
and PCS technologies. Selling for $64,995, this unit is a flagship for many top
name cellular phone developers. IFR also announced the release of the CDMA auto
station for cellular telephone manufacturing test systems. This system is a
complete analysis test station for evaluation of CDMA handset performance for
cellular phone manufacturers.
Product enhancements introduced last quarter included a new Battery Test
Suite for the 1900 series of radio test sets. This system allows mobile phone
OEMs and cellular phone service
12
<PAGE>
providers using the TDMA standard to assess battery life in real-world
environments. We also a launched a software upgrade for the 2398 spectrum
analyzer that offers significant improvements in functionality for wireless
infrastructure. The Company also introduced two new enhancements to the 6840
series microwave systems analyzer line.
The Company is a global leader in the public mobile radio (PMR) market. The
Company is continuing its involvement in Project 25, the PMR standard in the
United States, and with the ramp-up of terrestrial trunked radio (TETRA), the
PMR standard in Europe. During the quarter the Company developed an enhanced
version of the 2968 TETRA radio test set. The Company sees a bright future for
its products in this market.
The Company does not expect sales of any one of these new products to be
large enough to drive growth by itself. The Company's primary focus will be on
advanced digital wireless test applications. The Company's objective is to
dramatically broaden new communications product offerings to allow the Company
to address more applications. The Company's new product development structure
allows better feedback from existing customers and allows the Company to work
directly with existing, new and potential customers to solve their specific test
problems.
The Company booked a modest amount of orders for these new products in the
first quarter. The Company expects our new product bookings to represent an
increasing share of total bookings in the quarters ahead. You can look for more
product announcements throughout the fiscal year with the primary focus on
advanced digital wireless test applications.
PART II -- OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
27.0 Financial Data Schedule
(b) No Form 8-K was filed during the quarter ended June 30, 2000.
13
<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.
IFR SYSTEMS, INC.
Date: August 9, 2000 /s/ Jeffrey A. Bloomer
-------------------- ----------------------------------
Jeffrey A. Bloomer,
Director, President and
Chief Executive Officer
(Duly authorized officer)
Date: August 9, 2000 /s/ Dennis H. Coley
-------------------- ----------------------------------
Dennis H. Coley,
Chief Financial Officer
and Treasurer
(Principal financial and chief
accounting officer)
14
