<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
(X) Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended December 25, 1993
-----------------
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 1-11720
-------
ADVO, Inc.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 06-0885252
- ------------------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Univac Lane, P.O. Box 755, Windsor, CT 06095-0755
- ------------------------------------------ ---------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (203) 285-6100
---------------------
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 January 22, 1994 there were 21,285,974 shares of common stock
----------
outstanding.
<PAGE>
ADVO, Inc.
Index to Quarterly Report
on Form 10-Q
Quarter Ended December 25, 1993
<TABLE>
<CAPTION>
Part I - Financial Information Page
------------------------------ ----
<S> <C>
Item 1. Financial Statements (Unaudited)
Consolidated balance sheets -
December 25, 1993 and September 25, 1993 2
Consolidated statements of operations -
Three months ended December 25, 1993
and December 26, 1992 3
Consolidated statements of cash flows -
Three months ended December 25, 1993
and December 26, 1992 4
Consolidated statement of changes in
Stockholders' Equity -
Three months ended December 25, 1993 5
Notes to consolidated financial statements 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. 10
Item 6. Exhibits and Reports on Form 8-K. 10
Signatures 11
</TABLE>
<PAGE>
ADVO, Inc.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands, except share data)
<TABLE>
<CAPTION>
December 25, September 25,
1993 1993
------------- -------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents-Related Party $ 29,316 $ 32,449
Cash and cash equivalents-Other 8,157 18,631
-------- --------
Total cash and cash equivalents 37,473 51,080
Marketable securities-Related Party 29,802 20,368
Accounts receivable, less allowances of $6,209
and $4,472 54,301 52,816
Inventories 6,518 6,622
Prepaid expenses and other current assets 8,845 8,938
Deferred income taxes 11,643 11,667
-------- --------
Total current assets 148,582 151,491
Property and equipment 107,106 106,192
Less accumulated depreciation and amortization (51,745) (51,389)
-------- --------
Net property and equipment 55,361 54,803
Non-current deferred income taxes 871 348
Other assets 18,443 19,883
-------- --------
TOTAL ASSETS $223,257 $226,525
======== ========
LIABILITIES
Current liabilities:
Accounts payable $ 26,937 $ 24,879
Accrued compensation and benefits 28,068 24,175
Customer advances 11,089 15,079
Federal and state income taxes payable 8,097 5,450
Restructure reserve - short term 7,394 9,356
Accrued other expenses 13,383 12,380
-------- --------
Total current liabilities 94,968 91,319
Deferred liabilities 517 554
Restructure reserve - long term 16,394 16,394
-------- --------
16,911 16,948
STOCKHOLDERS' EQUITY
Series A Convertible preferred stock,
$.01 par value (Authorized 5,000,000 shares,
none issued) - -
Common stock, $.01 par value (Authorized
40,000,000 shares, issued 23,245,082 and
23,234,958 shares, respectively) 232 232
Additional paid-in capital 125,262 124,299
Retained earnings 15,800 8,972
-------- --------
141,294 133,503
Less 1,933,430 shares and 1,016,143 shares,
respectively, of common stock held in treasury,
at cost (29,916) (15,245)
-------- --------
Total stockholders' equity 111,378 118,258
-------- --------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $223,257 $226,525
======== ========
</TABLE>
See Accompanying Notes.
- 2 -
<PAGE>
ADVO, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three months ended
--------------------------
December 25, December 26,
1993 1992
--------------------------
<S> <C> <C>
Revenues $246,763 $228,044
Costs and expenses:
Cost of sales 184,602 170,129
Selling, general and
administrative 49,995 47,262
Provision for bad debt 821 1,173
-------- --------
Operating income 11,345 9,480
Interest income-Related Party 520 472
Interest income-Other 16 20
Other expense 182 213
-------- --------
Income before income taxes 11,699 9,759
Provision for income taxes 4,445 3,240
-------- --------
Net income $ 7,254 $ 6,519
======== ========
Earnings per share (A) $ .29 $ .26(B)
======== ========
Cash dividends declared per
share $ .02 $ -
Weighted average common and
common equivalent shares:
Primary 24,877 25,295
Fully diluted 25,020 25,348
</TABLE>
- --------------
(A) Both primary and fully diluted.
(B) Restated for 5-or-4 stock split
distributed March 5, 1993 in the
form of a stock dividend.
See Accompanying Notes.
- 3 -
<PAGE>
ADVO, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Three months ended
----------------------------
December 25, December 26,
1993 1992
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 7,254 $ 6,519
Adjustments to reconcile net income to net
cash flows from operating activities:
Depreciation and amortization 2,999 2,628
Amortization of deferred compensation 603 818
Deferred income taxes (499) (597)
Provision for bad debt 821 1,173
Pro forma adjustment for income taxes - 533
Other 131 114
Changes in assets and liabilities net of
effects of acquisitions:
Accounts receivable (2,307) (4,380)
Inventories 104 647
Other current assets 94 (1,861)
Other assets 973 (727)
Accounts payable 2,058 (359)
Accrued compensation and benefits 3,893 174
Customer advances (3,990) (566)
Federal and state income taxes payable 2,647 499
Other current liabilities 576 (1,200)
Restructure reserve (1,962) -
Deferred liabilities (37) (40)
-------- --------
Net cash provided by operating activities 13,358 3,375
Cash flows from investing activities:
Investment in business ventures/acquisitions - (5,415)
Acquisition of property and equipment (3,168) (2,760)
Proceeds from disposals of property and equipment 76 12
Sales of marketable securities 8,023 -
Purchases of marketable securities (17,585) (19,904)
-------- --------
Net cash used in investing activities (12,654) (28,067)
Cash flows from financing activities:
Tax effect - vesting of restricted stock/options
exercised 292 237
Proceeds from exercise of stock options 68 198
Purchase of common stock for treasury (14,671) (102)
Increase in bank overdraft - 1,002
Proceeds from short-term debt - 2,700
Principal payment on long-term debt - (49)
Cash distribution to satisfy subchapter
S tax liability - (614)
-------- --------
Net cash provided (used) by financing activities (14,311) 3,372
-------- --------
Decrease in cash and cash equivalents (13,607) (21,320)
Cash and cash equivalents at beginning of period 51,080 65,749
-------- --------
Cash and cash equivalents at end of period $ 37,473 $ 44,429
======== ========
Supplemental disclosures of cash flow information
Income tax payments $ 2,116 $ 3,011
Interest paid - 48
</TABLE>
See Accompanying Notes.
- 4 -
<PAGE>
ADVO, Inc.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited)
(In thousands, expect share data)
<TABLE>
<CAPTION>
Common Stock Treasury Stock
------------------ -------------------------
Additional
Paid-In Retained Total
Shares Amount Shares Amount Capital Earnings Equity
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance -
September 25,
1993 23,234,958 $232 (1,016,143) $(15,245) $124,299 $8,972 $118,258
Purchase of
Common Stock
for
Treasury (917,287) (14,671) (14,671)
Grants of
restricted stock 2,000
Exercise of stock
options 8,124 68 68
Tax effect-
employee stock
plans 292 292
Amortization of
deferred
compensation 603 603
Cash dividends
declared ($.02
per share) (426) (426)
Net income 7,254 7,254
------------------------------------------------------------------------------------
Balance -
December 25,
1993 23,245,082 $232 (1,933,430) $(29,916) $125,262 $15,800 $111,378
</TABLE>
- 5 -
<PAGE>
ADVO, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
1. Basis of presentation
The accompanying unaudited 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 December 25,
1993 are not necessarily indicative of the results that may be expected for the
fiscal year ended September 24, 1994. For further information, refer to the
consolidated financial statements and footnotes thereto included in ADVO's
annual report on Form 10-K for the fiscal year ended September 25, 1993.
Revenues are recognized when services are rendered and are presented in the
financial statements net of sales allowances. Certain reclassifications have
been made in the fiscal 1993 financial statements to conform with the fiscal
1994 presentation.
2. Merger
On August 19, 1993 a plan of merger was consummated between the Company and
Marketing Force, Inc., ("MF" or "Marketing Force") a privately held specialty
marketing company located in Michigan, through the exchange of 2,115,956 shares
of ADVO Common Stock for all of the outstanding stock of MF. The merger was
accounted for as a pooling of interests and, accordingly, the Company's
consolidated financial statements have been restated to include the accounts and
operations of MF for all periods presented. MF's reported financial results have
been adjusted to conform to the financial presentation of the Company. There
were no significant intercompany transactions or differences in accounting
policies between the Company and MF. Prior to the merger, MF had elected to be
taxed as an S corporation for U.S.Federal and State purposes. As an S
corporation, MF's shareholders were required to pay individual income taxes
based on MF's taxable income. Income taxes on income for the periods MF was a
subchapter S corporation have been provided on a pro forma basis at an effective
rate of 41%. The 41% effective rate is ADVO's estimate of the federal and state
tax rates that would have been applied to MF had it been merged with ADVO for
the periods presented.
3. Income Taxes
Beginning with the first quarter of fiscal 1994, the Company changed its method
of accounting for income taxes from the deferred method to the liability method
required by FASB Statement No. 109, "Accounting for Income Taxes". As permitted
under the new rules, prior years' financial statements have not been restated.
The cumulative effect of adopting statement 109 for the three months ended
December 25, 1993 was not material to either the Company's results of operations
or financial position.
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components
of the Company's deferred tax assets and liabilities as of December 25, 1993 are
as follows (in thousands):
<TABLE>
<S> <C>
Deferred tax assets:
Reserve for restructure $ 9,139
Reserve for deferred
compensation 2,369
Reserve for employee benefits 4,511
Other 2,415
-------
Total deferred tax assets 18,434
-------
Deferred tax liabilities:
Tax over book depreciation 5,920
-------
Total deferred tax
liabilities 5,920
-------
Net deferred tax assets $12,514
=======
</TABLE>
- 6 -
<PAGE>
The reconciliation of income tax attributable to continuing operations computed
at the U.S. federal statutory tax rates to income tax expense is:
<TABLE>
<CAPTION>
Three months ended
---------------------------------------
December 25, 1993 December 26, 1992
------------------ -------------------
<S> <C> <C>
Federal statutory rate 35.0% 34.0%
State taxes, net of
Federal benefit 4.8 4.5
Tax benefits related to section
338 basis adjustment - (5.8)
Targeted jobs tax credit (0.5) (0.3)
Other (1.3) 0.8
------------------ -------------------
Effective income tax rate 38.0% 33.2%
================== ===================
4. Marketable securities
</TABLE>
Marketable securities, consisting principally of U.S. Treasury securities and
municipal bonds, are carried at cost, cost approximates market at December 25,
1993 and September 25, 1993. The cost of securities sold is determined by the
specific identification method.
- 7 -
<PAGE>
ADVO, Inc.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Results of Operations
- ---------------------
Revenues for the three months ended December 25, 1993 increased $18.7 million or
8.2% when compared with the same three month period of a year earlier. The
growth in revenues was almost entirely volume related and was primarily the
result of a 9.4% increase in shared mail packages delivered to 770.2 million
households versus 703.7 million for the same period of the prior year. Average
shared mail pieces per package remained relatively constant with the comparable
period of a year earlier at 7.86 versus 7.89. The volume gains were achieved
through increased frequency of mailings and pieces per package increases within
established markets. Pricing held stable when comparing the first three months
of fiscal 1994 with the same period of fiscal 1993.
The Company's in-store marketing services accounted for $2.1 million of the
volume growth in revenues and was mainly attributable to expanded sales in
promotional services when comparing the first quarter of fiscal 1994 with the
first quarter of fiscal 1993.
Cost of sales as a percentage of revenues remained relatively constant at 74.8%
versus 74.6% when comparing the first three months of fiscal 1994 with the same
period of fiscal 1993. In absolute terms, cost of sales increased 8.5% or $14.5
million. The increase was mainly attributable to the growth in packages mailed
and the resultant 8.7% increase in postage expense when comparing the three
months ended December 25, 1993 with the three months ended December 26, 1992.
Print costs also experienced an 11.0% increase as a result of the shared mail
volume growth. In-store marketing services accounted for $1.4 million of the
increase in cost of sales and its increase was principally related to volume
growth within its promotional services product lines.
As a percentage of revenues, selling expense, including the provision for bad
debt, decreased slightly from 12.8% in the first quarter of fiscal 1993 to 12.2%
in the first quarter of fiscal 1994. The $.7 million increase in selling
expense, in absolute terms, was mainly attributable to increased commission
costs resulting from the revenue growth.
General and administrative costs remained constant at 8.4% of revenues when
comparing the three months ended December 25, 1993 with the same period of a
year earlier. Overall, costs increased $1.7 million when comparing the two
periods and were primarily related to increased employee costs.
As a result of the above, the Company reported operating income of $11.3 million
for the first three months of fiscal 1994 versus $9.5 million for the first
three months of fiscal 1993. Direct mail accounted for $10.0 million of fiscal
1994's first quarter operating income while in-store marketing provided $1.3
million. For the first quarter of fiscal 1993, direct mail accounted for $8.2
million and in-store marketing services $1.3 million of the reported operating
income of $9.5 million.
The effective income tax rate for the first three months of fiscal 1994 was 38%
versus 33.2% for the first three months of fiscal 1993. The increase in the
effective income tax rate for fiscal 1994 is principally related to the increase
in the Federal Statutory rate, effective January 1, 1993 and the expiration of
Federal tax benefits available in prior years. During the first quarter of
fiscal 1994, the Company implemented Statement of Financial Accounting Standards
No. 109, "Accounting for Income Taxes". There was no material impact to the
Company's consolidated operations or financial position.
Financial Condition
- -------------------
Working capital decreased $6.6 million to $53.6 million at December 25, 1993
from $60.2 million at September 25, 1993. The decrease from September 25, 1993
was mainly attributable to the decrease in cash and cash equivalents resulting
from $13.9 million used to purchase the Company's Common Stock for treasury
under a repurchase program announced by the Company on October 19, 1993. The
program was undertaken because the Company believes its stock is undervalued at
current market prices and, therefore, represents a sound investment. Also
contributing to the decrease in working capital were increases in accrued
compensation and benefits, due to the
- 8 -
<PAGE>
timing of payments for employee benefits, and increases in federal and state
income taxes payable, resulting from an increase in income and the effective tax
rate. These decreases in working capital were offset to a degree by the increase
in accounts receivable from the growth in revenues. As a result of the
aforementioned, the working capital ratio decreased to 1.56 at December 25, 1993
from 1.66 at September 25, 1993.
Total stockholders' equity decreased $6.9 million to $111.4 million at December
25, 1993 from $118.3 million at September 25, 1993. The decrease was reflective
of the $14.7 million used to purchase the Company's Common Stock for treasury
under the Company's repurchase program, as discussed earlier, and pursuant to
elections by employees to satisfy withholding tax requirements under the
Company's restricted stock and stock option plans. Stockholders' equity was
also decreased by $.4 million used for cash dividends declared on ADVO Common
Stock. These decreases were offset to a degree by additions to stockholders'
equity for $.3 million in tax benefits realized on the vesting of restricted
stock and stock option exercises, $.6 million for the amortization of deferred
compensation and $7.3 million for fiscal 1994's first quarter net income.
Liquidity
- ---------
The Company's main source of liquidity continues to be funds from operating
activities. Cash provided from operating activities increased $10.0 million to
$13.4 million for the three months ended December 25, 1993 when compared to the
same period a year earlier. The increase in cash provided from operating
activities was mainly attributable to the Company's improved operating results,
the increase in accrued compensation and benefits and the increase in federal
and state income taxes payable for the reasons mentioned earlier, and the
decrease in accounts receivable through enhanced collection and payment
procedures. The Company experienced a $13.6 million decrease in cash and cash
equivalents during the first quarter of fiscal 1994 compared to a $21.3 million
decrease in the first quarter of fiscal 1993. The decrease in cash and cash
equivalents was primarily reflective of the $14.7 million used to purchase ADVO
Common Stock for treasury as discussed above and the $9.6 million used for
investments in marketable securities. These decreases were offset to a degree
by the $13.4 million provided by operating activities. During the comparable
period of fiscal 1993, cash provided by operating activities of $3.4 million and
financing activities of $3.4 million was more that offset by cash used to invest
in marketable securities, business ventures and cash used for capital additions
which totaled $28.1 million.
- 9 -
<PAGE>
Part II - Other Information
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
At the 1994 Annual Meeting of Stockholders of ADVO, Inc. (the "Company"), held
on January 20, 1994, the following matters were submitted to a vote of the
stockholders.
1. The election of nine Directors to serve until the Annual Meeting of
Stockholders in 1995.
2. The approval of amendments to the 1988 Non-qualified Stock Option Plan, as
amended.
3. The approval of the 1993 Stock Option Subplan.
4. The ratification of the appointment of Ernst & Young as the Company's
independent auditors for the fiscal year ending September 24, 1994.
Each of the four proposals were approved by the stockholders in their entirety.
For a list of the directors elected and the votes cast for and against each of
the proposals reference is made to exhibit No. 22, Report of Inspector of
Election for ADVO, Inc. Common Stock, attached hereto.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibit Index
Sequential
Exhibit No. Exhibits Page Number
----------- -------- -----------
11 Statement re computation of per share
earnings.
22 Report of Inspector of Election for
ADVO, Inc. Common Stock.
(b) Reports on Form 8-K
-------------------
No report on Form 8-K was filed by the Company with respect to the
quarter ended December 25, 1993.
- --------------------------------------------------------------------------------
Omitted from this Part II are items which are inapplicable or to which the
answer is negative for the period covered.
- 10 -
<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.
ADVO, Inc.
Date: February 7, 1994 By:/s/ ROBERT S. HIRST
---------------- --------------------------
Robert S. Hirst
Vice President and Controller
(Principal Accounting Officer)
<PAGE>
Exhibit 11
----------
Page 1 of 2
ADVO, Inc.
COMPUTATION OF PRIMARY PER SHARE EARNINGS
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three months ended
-----------------------------
December 25, December 26,
1993 1992
------------ -------------
<S> <C> <C>
EARNINGS APPLICABLE TO COMMON STOCK
Net income $ 7,254 $ 6,519
------- -------
Net income applicable
to common stock $ 7,254 $ 6,519
======= =======
AVERAGE COMMON AND COMMON EQUIVALENT
SHARES (A)
Average common shares outstanding 21,694 18,484
Assumed conversion or exercise of:
Warrants 2,201 2,292
Stock Options 899 1,097
Series A Preferred Stock - 3,214
Restricted Stock 83 208
------- -------
Weighted average common equivalent
shares 24,877 25,295
======= =======
EARNINGS PER COMMON AND COMMON
EQUIVALENT SHARE $ .29 $ .26
======= =======
</TABLE>
(A) The three month period ended December 26, 1992 has been restated for a
5-for-4 stock split effected in the form of a dividend distributed March 5,
1993 and for 2,115,956 common shares issued in connection with the merger of
ADVO, Inc. and Marketing Force, Inc. on August 19, 1993 accounted for as a
pooling of interests. The shares are being treated as if issued as of the
beginning of each period presented.
<PAGE>
Exhibit 11
----------
Page 2 of 2
ADVO, Inc.
COMPUTATION OF FULLY DILUTED PER SHARE EARNINGS
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three months ended
-----------------------------
December 25, December 26,
1993 1992
------------ ---------------
<S> <C> <C>
EARNINGS APPLICABLE TO FULLY
DILUTED SHARES
Net income $ 7,254 $ 6,519
------- -------
Net income applicable
to common stock $ 7,254 $ 6,519
======= =======
FULLY DILUTED SHARES (A)
Average common shares outstanding 21,694 18,484
Assumed conversion or exercise of:
Warrants 2,245 2,305
Stock Options 975 1,116
Series A Preferred Stock - 3,214
Restricted Stock 106 229
------- -------
Fully diluted shares 25,020 25,348
======= =======
EARNINGS PER SHARE ASSUMING
FULL DILUTION $ .29 $ .26
======= =======
</TABLE>
(A) The three month period ended December 26, 1992 has been restated for a
5-for-4 stock split effected in the form of a dividend distributed March 5,
1993 and for 2,115,956 common shares issued in connection with the merger of
ADVO, Inc. and Marketing Force, Inc. on August 19, 1993 accounted for as a
pooling of interests. The shares are being treated as if issued as of the
beginning of each period presented.
<PAGE>
Exhibit 22
----------
Page 1 of 2
REPORT OF INSPECTOR OF ELECTION
FOR ADVO, INC. ANNUAL MEETING
HELD ON JANUARY 20, 1994
The undersigned, appointed as Inspector of Election, hereby reports and
certifies the following results based on the proxies voted at the Annual Meeting
of shareholders on January 20, 1994.
Shares Voted: 19,922,983 90.71%
The following votes of common stock were cast:
For Directors
-------------
<TABLE>
<CAPTION>
Durrett Fritz Kamerschen Morris Rockwell
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Votes in
Favor 19,581,057 19,581,819 19,587,749 19,587,749 19,587,749
Votes
Withheld 341,926 341,164 335,234 335,234 335,234
<CAPTION>
Lachman Newman Stowe Vogelstein
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Votes in
Favor 19,587,329 19,587,749 19,587,749 19,587,624
Votes
Withheld 335,654 335,234 335,234 335,359
</TABLE>
Proposition 2, Approval of Amendments to
----------------------------------------
the 1988 Non-Qualified Stock Option Plan, as amended
----------------------------------------------------
<TABLE>
<CAPTION>
Common
----------
<S> <C> <C>
Votes in Favor 17,782,848 80.96%
Votes Against 1,665,420 7.59%
Abstain 338,179 1.54%
No Vote 136,536 .62%
</TABLE>
Proposition 3, Approval of the
------------------------------
1993 Stock Option Subplan
-------------------------
<TABLE>
<S> <C> <C>
Votes in Favor 17,716,277 80.66%
Votes Against 1,732,708 7.89%
Abstain 337,462 1.54%
No Vote 136,536 .62%
</TABLE>
<PAGE>
Exhibit 22
----------
Page 2 of 2
Proposition 4, Ratification of the Appointment
----------------------------------------------
of Ernst & Young, Independent Auditors for Fiscal 1994
------------------------------------------------------
<TABLE>
<CAPTION>
Common
----------
<S> <C> <C>
Votes in Favor 19,897,861 90.59%
Votes Opposed 18,827 .09%
Abstain 6,295 .03%
No Vote -0- -0-
</TABLE>
/s/ JOHN J. BORYCZSKI
----------------------------
John J. Boryczki
Assistant Vice President
