FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended December 31, 1995
Commission File Number 0-14299
SECOM GENERAL CORPORATION
-------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 87-0410875
-------- ----------
(State or other jurisdiction of (I.R.S. Employer I.D. Number)
incorporation or organization)
46035 GRAND RIVER AVENUE 48374
------------------------ -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (810-305-9410)
--------------
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 requirement 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 the close of the period covered by this report.
Title of Class Number of Shares Outstanding
Common Stock 4,775,700
(par value $.10 per share)
<PAGE>
SECOM GENERAL CORPORATION
FORM 10-Q
INDEX
Page
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets 1
Consolidated Statements of Operations 3
Consolidated Statements of Cash Flows 4
Notes to Interim Consolidated Financial Statements 5
Item 2. Management's Discussion & Analysis of Financial Condition
and Results of Operations 8
PART II OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
<PAGE>
<TABLE>
<CAPTION>
ASSETS
DEC 31 1995 SEP 30 1995
------------ ------------
<S> <C> <C>
CURRENT ASSETS
Cash $ 7,100 $ 13,700
Accounts receivable, net 3,920,900 4,484,800
Other receivables 183,800 320,600
Inventories 3,997,700 3,935,700
Prepaids and other 655,800 727,800
Deferred tax asset 520,700 542,700
------------ ------------
TOTAL CURRENT ASSETS $ 9,286,000 $ 10,025,300
Property, plant & equipment, net 14,724,900 14,583,600
Intangible assets 2,052,000 2,071,300
Other assets 327,000 266,900
------------ ------------
TOTAL ASSETS $ 26,389,900 $ 26,947,100
============ ============
<FN>
See notes to consolidated financial statements.
</TABLE>
-1-
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
DEC 31 1995 SEP 30 1995
------------ ------------
<S> <C> <C>
CURRENT LIABILITIES
Bank line of credit $ 2,546,800 $ 3,776,300
Current maturities of long term obligations 1,846,900 1,857,100
Trade accounts payable 1,931,100 2,065,500
Accrued expenses 948,400 1,197,100
------------ ------------
TOTAL CURRENT LIABILITIES $ 7,273,200 $ 8,896,000
Long term obligations, net of current maturities 4,646,900 4,621,700
Deferred tax liabilities 1,518,900 1,518,900
------------ ------------
TOTAL LIABILITIES $ 13,439,000 $ 15,036,600
------------ ------------
Stockholders' equity common stock, $.10 par
value 10,000,000 shares authorized:
December 31, 1995 - 4,775,700 shares
September 30, 1995 - 4,276,200 shares 477,600 427,600
Additional paid-in capital 17,427,700 16,478,900
Accumulated deficit (4,954,400) (4,996,000)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 12,950,900 11,910,500
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 26,389,900 $ 26,947,100
============ ============
<FN>
See notes to consolidated financial statements.
</TABLE>
-2-
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
Three Months Three Months
Ended Ended
Dec 31 1995 Dec 31 1994
----------- -----------
<S> <C> <C>
NET SALES $ 7,259,600 $ 8,297,400
COST OF SALES 5,886,500 7,134,500
----------- -----------
GROSS PROFIT 1,373,100 1,162,900
GENERAL AND ADMINISTRATIVE EXPENSES 1,146,400 1,239,300
----------- -----------
OPERATING INCOME (LOSS) 226,700 (76,400)
OTHER INCOME (EXPENSE)
Interest (223,100) (291,600)
Miscellaneous income 61,200 59,600
----------- -----------
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES 64,800 (308,400)
INCOME TAX BENEFIT (EXPENSE) (22,000) 85,300
----------- -----------
NET INCOME (LOSS) $ 42,800 $ (223,100)
=========== ===========
EARNINGS PER COMMON SHARE $ 0.01 $ (0.05)
----------- -----------
NET INCOME (LOSS) $ 0.01 $ (0.05)
=========== ===========
WEIGHTED AVERAGE SHARES OUTSTANDING 4,611,200 4,119,900
<FN>
See notes to consolidated financial statements.
</TABLE>
-3-
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
Three Months Three Months
Ended Ended
Dec 31 1995 Dec 31 1994
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Income (loss) from operations $ 42,800 $ (223,100)
Adjustments to reconcile net income to net cash used in operations:
Depreciation and amortization 510,500 477,700
Provision for (benefit from) deferred taxes 22,000 (85,300)
Decrease in allowance for doubtful accounts (16,000) (1,300)
(Gain) loss on sales of assets 300 (500)
Stock issuances to 401(k) plan 23,000
Changes in assets and liabilities that provided (used) cash:
Accounts and other receivables 676,800 309,100
Inventories (61,900) (283,700)
Prepaids 36,100
Other assets (6,900) (4,900)
Accounts payable (120,800) (84,200)
Accrued liabilities (248,700) (9,700)
Other liabilities (8,400)
Net cash provided by (used in) discontinued operations 58,400 (42,600)
----------- -----------
Net cash provided by operating activities 856,500 102,200
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the disposal of property,
plant & equipment 400 500
Collections on notes receivable 4,600
Capital expenditures (653,600) (330,100)
----------- -----------
Net cash used in investing activities (648,600) (329,600)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in bank line of credit (1,229,500) 488,600
Proceeds from long-term notes payable 394,900 71,300
Proceeds from issuances of common stock 1,000,000 3,200
Payments on long-term notes payable (357,200) (307,100)
Payments on capital lease obligations (22,700) (30,000)
----------- -----------
Net cash provided from (used in) financing activities (214,500) 226,000
----------- -----------
NET DECREASE IN CASH (6,600) (1,400)
CASH, BEGINNING OF PERIOD 13,700 9,300
----------- -----------
CASH, END OF PERIOD $ 7,100 $ 7,900
=========== ===========
OTHER CASH FLOW INFORMATION - INTEREST PAID $ 243,800 $ 257,800
=========== ===========
<FN>
See notes to consolidated financial statements.
</TABLE>
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<PAGE>
SECOM GENERAL CORPORATION
Notes to Interim Consolidated Financial Statements
NOTE 1. SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
General
The consolidated financial statements included herein have been prepared by
Secom General Corporation (the "Company") without audit, pursuant to the rules
and regulations of the Securities and Exchange Commission. Certain information
and footnote disclosures normally included in the consolidated 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 that the disclosures are adequate
so that the information presented is not misleading. In the opinion of
management, the financial statements as of December 31, 1995 reflect all
adjustments (normal recurring accruals) which are necessary to present a fair
statement of the results for the period then ended. These financial statements
should be read in conjunction with the audited consolidated financial
statements and notes thereto included in the Company's 10-K for the fiscal
year ended September 30, 1995.
Business
The Company is a publicly-traded holding company with four wholly-owned
operating subsidiaries that are aligned in two business segments. In June
1995, the Company's Triple Technologies subsidiary (formerly "Triple Tool",
referred to herein as "Triple") was downsized and moved into Form Flow's
facilities.
Metal Parts Forming
* Uniflow Corporation ("Uniflow")
Tooling
* Form Flow, Inc. ("Form Flow")
* L&H Die, Inc. ("L&H Die")
* Micanol, Inc. ("Micanol")
Principles of consolidation
The interim consolidated financial statements include the accounts of the
Company and its subsidiaries. All significant intercompany accounts and
transactions are eliminated.
Reclassifications
Certain reclassifications have been made to the prior period balances for
comparative purposes.
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<PAGE>
Inventories
Inventories are valued at the lower of cost or market. Cost is determined by
the first-in, first-out (FIFO) method.
Earnings per share
The earnings per share of common stock is computed by dividing net income by
the weighted average number of common shares and common equivalent shares
(primarily warrants and options to purchase common stock).
NOTE 3. INVENTORIES
Inventories at December 31, 1995 and September 30, 1995 are summarized as
follows:
<TABLE>
<CAPTION>
DEC. 31, 1995 SEPT. 30, 1995
------------- --------------
<S> <C> <C>
Raw materials $ 387,500 $ 372,000
Work-in-process 1,592,300 1,796,800
Finished goods 2,017,900 1,766,600
---------- ----------
$3,997,700 $3,935,700
========== ==========
</TABLE>
NOTE 4. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment at December 31, 1995 and September 30, 1995 are
summarized as follows (in thousands):
<TABLE>
<CAPTION>
Dec. 31, Sept. 30,
1995 1995 Life
-------- -------- ----
<S> <C> <C> <C>
Machinery $ 14,491 $ 14,581 2 to 20 years
Buildings and improvements 5,051 4,714 3 to 30 years
Land 572 540 n/a
Furniture and fixtures 500 478 5 to 7 years
Vehicles 266 263 3 years
Construction in progress 390 236 n/a
-------- --------
Total 20,364 20,812
Accumulated depreciation (6,546) (6,228)
-------- --------
Net property, plant and equipment $ 14,725 $ 14,584
======== ========
</TABLE>
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<PAGE>
NOTE 5. LONG TERM DEBT AND LINE OF CREDIT
Long term debt consists of real estate mortgages, equipment term notes and
bonds, equipment capital leases and subordinated loans. Scheduled principal
payments due for the next year are approximately $1.8 million.
In addition to long term debt, the Company and its subsidiaries have a $4.5
million bank line of credit collateralized by all accounts receivable and
inventories. Borrowings on the line ($2.55 million and $3.78 million at
December 31, 1995 and September 30, 1995, respectively) are limited to stated
percentages of receivables and inventories and are due on demand. The interest
rates on the bank line of credit and term debt are based on, among other
things, the Company's debt to equity position. The current rate on the line of
credit is prime plus 1/4% and the rate on bank term debt is prime plus 3/4%.
NOTE 6. RELATED PARTY TRANSACTIONS
In November 1995, Manubusiness Opportunities, Inc. ("MOI") exercised a stock
warrant to acquire 500,000 shares of common stock in exchange for $1 million
paid to the Company. MOI is an entity controlled by three Directors of the
Company. For additional information about the Company's relationship with MOI,
refer to the Company's Form 10-K for the year ended September 30, 1995.
-7-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Overview
The Company operates in two segments: Metal Parts Forming and Tooling. The
Metal Parts Forming Segment manufactures cold headed and cold forged parts,
while the Tooling Segment provides perishable tooling for the cold heading
industry.
Net sales for the quarter were $7,259,600 compared to $8,297,400 in the same
quarter of the prior year, for a decline of 12.5%. Sales decreased 16% in the
Metal Parts Forming Segment (Uniflow) and 12% in the Tooling Segment. The
lower sales for the period primarily reflects (1) lower orders for Uniflow's
truck wheel studs and suspension ball joint housings; and, (2) the downsizing
of Triple, which was moved to Form Flow in June 1995. Tooling sales actually
increased 4% over the comparative period when adjusted for Triple, which had
posted revenues of $726,000 in the prior period. In the coming months, Uniflow
management does not anticipate any further decline in its sales of wheel studs
or ball joint housings. With respect to new business, Uniflow has tentatively
received a significant new sales order that is scheduled to commence in 1997.
With respect to the Tooling sales outlook, management sees revenues remaining
steady for the balance of the fiscal year.
Even though sales declined for the comparable period, net income for the
quarter ended December 31, 1995 was $42,800, or one cent per share, compared
to a net loss of $223,100, or 5 cents per share, for the same quarter last
year. The improvement in operating results primarily reflects lower production
related expenses at Uniflow.
Also during the quarter, the Company received $1 million in exchange for the
issuance of 500,000 restricted shares of common stock. The transaction was
made pursuant to a stock purchase warrant held by Manubusiness Opportunities,
Inc. ("MOI"), a related party. For additional information about MOI, refer to
the Company's Form 10-K for the year ended September 30, 1995.
SEGMENT REVIEW
Metal Parts Forming Segment (Uniflow)
<TABLE>
<CAPTION>
(in thousands)
Three Months Ended
----------------------------------------
12/31/95 12/31/94
----------------- -----------------
Amount % Amount %
------ ----- ------ -----
<S> <C> <C> <C> <C>
Net sales $3,510 100.0 $4,196 100.0
Gross profit 437 12.5 77 1.8
Operating expenses 433 12.3 461 11.0
Operating profit (1) 4 -- (384) (9.2)
<FN>
(1) Before interest, bad debt and unallocated corporate overhead expense.
</TABLE>
-8-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (continued)
The Metal Parts Forming Segment, comprised of Uniflow Corporation,
manufactures metal parts from tube, bar and coil using cold forging and cold
forming techniques. Primary parts currently manufactured are suspension ball
joint housings, transmission gear housings, truck wheel bolts and various OEM
cold forged and cold headed parts.
Uniflow's sales decreased 16.3% for the quarter ended December 31, 1995
compared to the same period in the prior year. The primary reasons for the
sales decline were lower order volumes for truck wheel studs and suspension
ball joint housings. In addition, the prior year quarterly sales reflected a
catch-up of some orders that were past due at the time. Sales of Uniflow's
truck wheel studs are primarily for the aftermarket, which are generally down
when new truck sales are stronger, as they have been in recent months. With
respect to suspension ball joint housings, certain customers have lost some of
their aftermarket business, thereby resulting in lower continuing orders for
Uniflow; while another customer resourced its business elsewhere due to price
considerations. Sales orders directed to Uniflow's cold heading area remained
weak during the period, as capacity usage on three primary machines (acquired
in 1992) continued between 20% and 30%. With respect to new business starting
later in the current fiscal year, management expects to begin production of an
airbag housing part around June 1996. Management is also quoting a few
variations of the airbag housing, which could result in substantial new
business.
Subsequent to December 31, 1995, Uniflow was awarded a large contract for the
manufacture of starter motor shafts. Although the Company is still negotiating
final contract terms relating to the acquisition of new machinery necessary to
manufacture the part, management expects to complete those discussions in
the near term. Sales under the agreement would amount to an expected $2.5
million in revenue for 1997 and approximately $5 million annually for five
years through 2002. Production for this order is projected to use 25 - 30%
machine capacity on Uniflow's Formax 1250 cold heading machine. The new order
also requires Uniflow to acquire approximately $4.5 million in secondary
machining equipment necessary to make the part to specification.
Management's goal is to continue to increase new business on Uniflow's primary
machines, which are its cold headers and hydraulic forging presses. As such,
management is reorganizing its sales strategy through the use of specialized
sales representatives, while directing internal sales engineering personnel to
develop closer engineering contacts with current and prospective OEM accounts.
Uniflow's gross profit increased to 12.5% of sales compared to 1.8% for the
same quarter last year. The improved gross profit is primarily the result of
lower direct labor, production and material costs. Labor and production costs
were lower due to improved production scheduling and job preparation (tooling,
setup, etc.) and material costs were lower due to less scrap and better
quality control.
Operating expense was 12.3% of sales for the current quarter compared to 11.0%
of sales in the prior year quarter. The higher operating expense for the
comparative periods primarily reflects the addition of management, engineering
and quality personnel to a level that management believes is necessary to
adequately manage and support Uniflow's current and prospective sales order
base.
-9-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (continued)
Tooling Segment
<TABLE>
<CAPTION>
(in thousands)
Three Months Ended
----------------------------------------
12/31/95 12/31/94
----------------- -----------------
Amount % Amount %
------ ----- ------ -----
<S> <C> <C> <C> <C>
Net sales (1) $4,177 100.0 $4,735 100.0
Gross profit 908 21.7 1,053 22.2
Operating expenses 540 12.9 580 12.2
Operating profit (2) 368 8.8 473 10.0
<FN>
(1) includes intercompany activity.
(2) before interest, bad debt and unallocated corporate overhead expense.
</TABLE>
The Tooling Segment ("Tooling"), comprised of Form Flow, L & H Die and
Micanol, manufactures production tooling for the cold heading/forming
industry.
Tooling sales decreased 11.8% in the current quarter compared to the same
period last year, principally due to the downsizing of Triple in June 1995.
Triple posted sales of $726,000 in the prior comparable quarter. Adjusted for
the Triple sales, Tooling sales increased 3.6% for the comparable period; Form
Flow and L & H Die sales increased and Micanol sales were lower. Micanol is
attempting to increase sales by widening its expertise to include the
production of carbide tooling. This transition is expected to take a few
months, as training is required for various skilled machinists, among other
things. Form Flow and L &H Die have had a strong presence in carbide tooling
for years and management intends to use their resources to assist Micanol in
its efforts to grow its carbide tooling business. Overall, management believes
sales for the Tooling Segment will remain steady for the remainder of the 1996
fiscal year.
The gross profit percentage for the current quarter was 21.7% of sales
compared to 22.2% of sales in the same quarter last year. The small decline in
gross profit for the comparative quarter primarily reflects higher factory
costs necessary to complete orders processed during the period.
Operating expense was 12.9% of sales in the current quarter was fairly
comparable to the 12.2% incurred in the same quarter last year.
Corporate Overhead, Interest Expense and Federal Income Taxes
Unallocated corporate overhead was $176,200 for the quarter ended December 31,
1995 compared to $198,200 in the same prior year quarter. The decrease in
corporate overhead reflects lower administrative expenses incurred during the
current quarter.
Interest expense for the quarter was $223,100 compared to $291,600 for the
same quarter last year. The lower interest cost primarily reflects lower
interest rates, lower average borrowings on the line of credit and lower
principal balances on term debt resulting from scheduled paydowns.
The current quarter reflects an effective federal tax rate of 34%. The credit
in the income tax provision for the prior quarter was due to the operating
loss generated in that period.
-10-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (continued)
FINANCIAL CONDITION AND LIQUIDITY
Net cash provided by operating activities before changes in working capital
items was $559,600 in the current quarter, while working capital changes
provided an additional $296,900 in cash from operating activities, principally
from a reduction in accounts receivables, offset by reductions in accounts
payable and other liabilities. In the prior year quarter, cash provided by
operating activities before changes in working capital was only $190,500, due
primarily to the operating loss recorded in that period. Also, in the prior
year quarter, working capital items used cash of $88,300, as accounts
receivable were higher, offset by lower inventories.
Net cash used in investing activities was $648,600 in the current quarter and
reflects the $320,000 acquisition of the building adjacent to Form Flow and
the addition of $154,000 of costs expended for Uniflow's refurbished hydraulic
press. The building was acquired to meet Form Flow's growing demand in its die
repair business and the hydraulic press was purchased for the manufacture of
airbag housings at Uniflow. In the prior year period, net cash of $330,100 was
used in investing activities, primarily for the purchase of additional
grinding machines at the Tooling operations and production tooling at Uniflow.
Net cash used in financing activities was $214,500 in the current quarter,
which included scheduled principal payments on long term obligations of
$357,200 and a net paydown of $1,229,500 on the line of credit, funded
principally by the $1 million received by the Company from the exercise of a
stock purchase warrant by MOI during the quarter. Long term debt proceeds in
the current quarter were $394,900, primarily for the acquisition of the Form
Flow building. In the prior year period, net cash provided from financing
activities was $226,000, and included a net increase of $488,600 on the line
of credit, offset by scheduled term debt payments of $307,100.
With respect to the new sales order received by Uniflow for the manufacture of
starter motor shafts, the Company will need to acquire approximately $4.5
million of machining and related equipment to make this part to specification.
To finance the machinery acquisitions, management intends to utilize equipment
term debt financing, amounts available on its machinery and working capital
lines of credit and internally generated cash from operations.
In November 1994, MOI acquired 500,000 shares of common stock by exercising a
stock warrant in conjunction with the extinguishment of a $1 million note due
from the Company to MOI.
Also during the current quarter, the Company's primary lender reduced its
lending rates (pursuant to various loan terms and covenants), reflecting the
Company's improved debt to equity position. The rate on the line of credit is
currently prime plus 1/4% (previously prime plus 3/4%) and the rate on the
term debt is currently prime plus 3/4% (previously prime plus 1 and 1/4%).
-11-
<PAGE>
PART II OTHER INFORMATION
------- -----------------
Item 1. Legal Proceedings
Not applicable.
Item 2. Changes in Securities
Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Securities Holders
Not applicable.
Item 5. Other Information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
Not applicable.
-12-
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Company has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
SECOM GENERAL CORPORATION
(Registrant)
By: /s/ Robert A. Clemente Date: February 13, 1996
----------------------------
Robert A. Clemente
Chairman, President & CEO
By: /s/ David J. Marczak Date: February 13, 1996
-------------------------
David J. Marczak
Chief Financial Officer
-13-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-END> DEC-31-1995
<CASH> $ 7,100
<SECURITIES> 0
<RECEIVABLES> 3,998,400
<ALLOWANCES> (77,500)
<INVENTORY> 3,997,700
<CURRENT-ASSETS> 9,286,000
<PP&E> 21,270,700
<DEPRECIATION> (6,545,800)
<TOTAL-ASSETS> 26,389,900
<CURRENT-LIABILITIES> 7,273,200
<BONDS> 0
<COMMON> 477,600
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 26,389,900
<SALES> 7,259,600
<TOTAL-REVENUES> 7,259,600
<CGS> 5,886,500
<TOTAL-COSTS> 7,032,900
<OTHER-EXPENSES> (61,200)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 223,100
<INCOME-PRETAX> 64,800
<INCOME-TAX> 22,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 42,800
<EPS-PRIMARY> 0
<EPS-DILUTED> 0.01
</TABLE>
