<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
F O R M 10 - K/A
AMENDMENT 1
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED OCTOBER 31, 1997
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-16448
HOLIDAY RV SUPERSTORES, INCORPORATED
IRS Employer Id No. Sand Lake West Executive Park State of Incorporation:
59-1834763 7851 Greenbriar Parkway Florida
Orlando, Florida 32819
(407) 363-9211
Securities registered pursuant to Section 12(b) of the Act:
- None -
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK
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. X Yes No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]
The aggregate market value of voting stock held by non-affiliates as of January
16, 1998, was approximately $6,014,000.
As of January 16, 1998, Holiday RV Superstores, Incorporated had outstanding
7,433,700 shares of Common Stock.
<PAGE> 2
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Company continued to maintain a strong financial position and high
liquidity throughout Fiscal 1997. Two million one hundred thousand dollars
($2.1 million) cash was generated from operations primarily from net income
($1.39 million), non cash expenses of depreciation and amortization ($432,000)
and decreases in inventories, net of floor plan payoffs (net of $759,000).
These increases were offset by increases in the use of cash to fund
increased accounts receivables ($362,000) primarily contacts in transit from
retail finance companies funding customer purchases, and decreased accrued
expenses ($107,000).
The Company used $253,000 cash for investing activities primarily to
purchase and improve property in Bakersfield ($131,000) and for leasehold
improvements in the new leased facility in Ft. Myers ($45,000).
The net result of all operating, investing and financing activities was an
increase in the Company's cash position by $1.8 million, to $7.4 million as of
October 31, 1997.
Net working capital increased to $11.9 million as of the end of Fiscal 97
compared to $10.4 million as of the end of Fiscal 96.
The Company's liquidity ratios continue to compare favorably to the
recreational vehicle dealers industry averages, as reported by 1996 Annual
Statement Studies, Robert Morris Associates, Philadelphia, PA. ("RMA"). The
Company's current ratio as of the end of Fiscal 1997 and Fiscal 1996, was 1.68
and 1.54 with the industry average of 1.2 and 1.3 respectively.
The Company's quick ratio, as of the end of Fiscal 1997, and Fiscal 1996, was
0.50 and 0.34. The Company's quick ratio at the end of Fiscal 1997, a measure
of the ability to pay off current liabilities without relying on the sale of
inventories, was approximately 5 times greater than the industry average (RMA)
of 0.1 as of the end of Fiscal 1997.
The Company's debt to worth ratio, a measure of the financing provided by the
Company's creditors as compared to the contribution by shareholders, as of the
end of Fiscal 1997 was 1.1. The industry average (RMA) was 4.1 for 1996.
The Company's principal long term commitments, as of the end of Fiscal 1997,
consist of obligations under operating leases. The Company also has a
contingent liability to repay a portion of agency commission (referral fees)
received principally from some lending institutions whereby the Company
referred customers to one or more third party financing sources and earned
referral fees (agency commissions) if the lender
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consummated a loan contract with the customer. In some cases, the Company
could be required to pay back (chargeback) the referral fee to the lender if
the loan is paid off or foreclosed in a specific period of time, usually
limited to the first six months of the term, if the charge back amount exceeds
reserves retained by the lender. The Company records commission income based
upon the amount earned less allowances for chargebacks. In determining the
allowance, the Company takes into consideration the total customer loans
outstanding and estimates the exposure for potential chargebacks associated
with these loans. The Company estimates the probability for loan payoffs and
the potential chargebacks to the Company related thereto. The Company also
considers the current and predicted future economic conditions, the effects of
changes in consumer interest rates and the aging of all it's customer loans
outstanding representing potential chargebacks to the Company.
The Company's chargeback allowance was $106,000, $135,000 and $152,000 as of
the end of Fiscal 1997, Fiscal 1996 and Fiscal 1995 respectively. Chargebacks
were $57,000, $58,000 and $40,000 for Fiscal 1997, Fiscal 1996 and Fiscal 1995,
respectively. Management expects the current allowance for chargebacks to be
sufficient to repay this contingency and does not expect the ultimate liability
to have a significant impact on the liquidity of the Company.
The Company's Board of Directors, in Fiscal 1993, set specific strategic
targets for the expansion and/or diversification of the Company's operations,
primarily through acquisition, with the ultimate goal of increasing the
Company's value to its shareholders. These targets, if obtained, could
require the Company to seek additional capital. Since its initial public
offering in 1987 the Company has funded it's expansion plan with internally
generated cash, debt from financial institutions for purchasing RVs, and the
issuance of a limited amount of common stock.
The Company's management is currently evaluating alternative sources of
capital, its cost and its ultimate effect on the capitalization of the Company.
The Company had $47 million maximum borrowing under floor plan contracts of
which $31 million was not used as of the end of Fiscal 1997. Currently, the
Company has $30 million maximum borrowing available under floor plan contracts.
The reduction in maximum borrowing available from Fiscal 1997 year end is the
result of a change in the Company's floor plan sources to obtain more
favorable terms and conditions for the Company, eliminating one flooring
company.
The Company's management feels it can obtain additional debt financing at
reasonable interest rates for expansion and/or diversification of its
operations. None of the Company's real properties are mortgaged. In the
opinion of management mortgage financing could be obtained at reasonable
interest rates, for which the proceeds could be used for expansion and the
diversification of the Company's operations.
Currently Management has no expansion or diversification prospects
requiring a secondary stock offering or a conversion of the financing debt to
common stock. Management does intend to continue to issue common stock and/or
options on
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common stock as a partial payment for acquisitions when cost effective.
However, management expects the dilutive effect on the common stockholders of
the Company resulting from issuing such common stock or options to be minimal.
Management believes that during the next twelve months cash generated by
operating activities, cash and cash equivalents on deposit with financial
institutions and financing currently available from floor plan financing
companies will be sufficient for its capital and operating needs for its
existing operations.
The Company has signed a non-binding letter of intent to acquire an RV
dealership in Southern California to increase it's market share of this
lucrative market, the largest market in the United States for RVs. If the
Company is successful in negotiating the purchase agreement, management expects
to complete the acquisition by March, 1998.
In January, 1998, the Company began to repurchase shares of its common stock
through open market purchases and by the repurchase of a block of 125,000
shares of Rule 144 letter stock, no longer subject to Rule 144 restrictions.
The repurchase period could continue up to one year from January 1998 and would
be limited to $1 million in total value at the time of purchase. Prudential
Securities is being used exclusively for the open market repurchases.
ENGAGEMENT OF FINANCIAL ADVISOR TO EXPLORE STRATEGIC ALTERNATIVES TO ENHANCE
SHAREHOLDER VALUE
In December, 1996, the Company engaged Prudential Securities Incorporated to
act as the Company's exclusive financial advisor to explore strategic
alternatives to enhance shareholder value, including possible acquisitions,
mergers or the sale of the Company. The engagement terminated in December,
1997. The parties agreed to the termination after the initial term, due to
Prudential's inability to present any meaningful strategic alternatives to the
Company to enhance shareholder value, including potential candidates for
acquisition by the Company, merger with the Company or to be acquired by the
Company. Prudential has been retained to assist the Company in repurchasing
it's shares.
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS FOR FISCAL 1997 COMPARED TO FISCAL 1996.
Sales and service revenue decreased 9.1% to $68.0 million for Fiscal 1997
from $74.8 million in Fiscal 1996 reflecting the national trend. According to
the Recreation Vehicle Industry Association (RV Trade Digest, December 1997)
recreation vehicle deliveries to retailers from manufacturers for the nine
months ended September, 1997 were down 5.6%, as compared to the same period
last year.
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Sales and service revenue in the eastern dealerships declined 21% due to a
decrease in the number of units sold, accounting for all the decrease in
revenue for the Company. This decrease was due to two primary factors, the
decline in overall sales for the RV Industry nationwide, and increased
competition in the Southeastern states. Consequently the Company's management
is continuing to make a number of strategical changes in store management and
marketing strategy in the Southeastern stores. The Western dealership's revenue
increased 12% due to additional units sold.
Management expects the Company's same store revenue to increase in Fiscal
1998, and follow the forecast for the recreation vehicle industry. According
to the CIT Group Economic Research Department's Third Annual Recreation Vehicle
Outlook (October 1997), "We look for growth to return in 1998 and 1999 with
deliveries increasing 3.7% and 3.4% respectively".
Cost of sales and service, as a percentage of revenue, decreased to 81.3% in
Fiscal 1997 from 82.3% in Fiscal 1996.
Gross profit decreased 3.6% to $12.73 million in Fiscal 97 from $13.2
million in Fiscal 1996. As a percentage of revenue, gross profit increased
to 18.7% in Fiscal 97 from 17.7% in Fiscal 1996. This increase was primarily
the result of increased gross margins on the sale of used RVs.
Agency commissions (referral fees) are paid to the Company if financing or
insurance is provided for the customer's purchases from the Company, as a
result of referring the customer to a financial institution or insurance
agency. Agency commissions represented 17% of the Company's total gross profit
in Fiscal 1997, as compared to 18% in Fiscal 1996. Agency commissions and
gross profit result from the sale of new and used vehicles and boats, and in
the aggregate, represented 71% of the Company's total gross profit in Fiscal
1997, as compared to 73% in Fiscal 1996. In both Fiscal years, agency
commissions and gross profit from the sale of new and used vehicles and boats,
in the aggregate, represented the majority of the Company's net pretax income.
Margins in the other major sources of revenue remained approximately the same
in Fiscal 97, an improvement from decreasing margins experienced in Fiscal
1996.
Selling, general and administrative expenses (SG&A) decreased 3.8% to $9.55
million in Fiscal 1997 from $9.93 million in Fiscal 1996. This decrease
resulted primarily from decreased personnel expenses. As a percentage of
revenue, SG&A increased to 14% in Fiscal 1997 from 13.3% in Fiscal 1996, due
to the fixed cost components of the Company's expenses.
Income from operations decreased 2.8% to $3.18 million in Fiscal 1997 from
$3.27 million in Fiscal 1996. As a percentage of revenue, income from
operations increased to 4.7% in Fiscal 1997 from 4.4% in Fiscal 1996.
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Interest income increased 22% to $480,000 in Fiscal 1997 from $393,000 in
Fiscal 1996 due to more cash available to invest. Interest expense decreased
8.2% to $1.38 million in Fiscal 1997 from $1.50 million in Fiscal 1996
primarily due to a 38 basis points reduction in the weighted average interest
rate for Fiscal 97 compared to Fiscal 96.
Income before income taxes increased 5.5% to $2.28 million in Fiscal 1997,
from $2.16 million in Fiscal 96. As a percentage of revenue, income before
income taxes increased to 3.4% in Fiscal 1997 from 2.9% in Fiscal 1996.
The combined Federal and State effective income tax rate was 39.2% in
Fiscal 1997 compared to 38.3% in Fiscal 1996. Income tax rates varied from
statutory rates due to state income taxes. See Note 9 of the notes to the
consolidated financial statements for components of the income taxes and the
reconciliation of the provision for income taxes to the federal statutory
rates.
Net income increased 4.1% to $1,386,597 in Fiscal 1997 from $1,331,932 in
Fiscal 1996. As a percentage of revenue, net income increased to 2.0% in
Fiscal 1997 compared to 1.8% in Fiscal 1996.
Earnings per share were 19 cents in Fiscal 1997 compared to 18 cents in
Fiscal 1996.
RESULTS OF OPERATIONS FOR FISCAL 1996 COMPARED TO FISCAL 1995.
Sales and service revenue increased 6.8% to $74.8 million in Fiscal 1996
from $70 million in Fiscal 1995 due to revenue from the Las Cruces, New
Mexico center acquired in October, 1995. On a same store basis, revenue
decreased 6% reflecting the national trend. According to the Recreation
Vehicle Industry Association (RV Trade Digest, December, 1996) recreation
vehicle deliveries to retailers were down 0.5% for the nine months ended
August, 1996, as compared to the same period last year. Even though this data
is not totally comparable, it does indicate the Company's change on RV sales
reflected the national trend.
Cost of sales and service, as a percentage of revenue, decreased to 82.3% in
Fiscal 1996 from 81.2% in Fiscal 1995.
Gross profit remained the same at $13.2 million. On a same store basis,
gross profit decreased 13%. As a percentage of revenue, gross profit
decreased to 17.7% in Fiscal 96 compared to 18.8% in Fiscal 1995. This decrease
resulted in decreases in every major revenue category due to increased pressure
on gross margins from competitors resulting from an oversupply of product
generally found throughout the industry.
Agency commissions represented 18% of the Company's total gross profit in
Fiscal 1996 and Fiscal 1995. Agency commissions and gross profit from the
sale of new and used vehicles and boats, in the aggregate, represented 73% of
the Company's total gross profit in Fiscal 1996, as compared to 72% in Fiscal
1995. In both years, agency commissions
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and gross profit from the sale of new and used vehicles and boats, in the
aggregate, represented the majority of the Company's net pretax income.
Selling, general and administrative expenses (SG&A) increased slightly to
$9.9 million in Fiscal 1996 from $9.8 million in Fiscal 1995. As a percentage
of revenue, SG&A decreased to 13.3% in Fiscal 1996 from 13.9% in Fiscal 1995.
On a same store basis, SG&A decreased 13% in Fiscal 1996. These decreases are
primarily due to decreased sales ad personnel expense resulting from decreased
revenue.
Income from operations decreased 3.7% to $3.27 million in Fiscal 1996 from
$3.40 million in Fiscal 1995. As a percentage of revenue, income from
operations decreased to 4.4% from 4.9%.
Interest income increased slightly to $393,000 in Fiscal 1996 from $376,000
in Fiscal 1995 due to a higher average balance of invested cash. Interest
expense increased 13% to $1.50 million in Fiscal 1996 from $1.34 million in
Fiscal 1995 primarily due to higher floor plan balances resulting from new
vehicle inventories at the new Las Cruces center.
Income before income taxes decreased 11.4% to $2.16 million in Fiscal 1996,
compared to $2.44 million in Fiscal 1995. As a percentage of revenue, income
before income taxes decreased to 2.9% in Fiscal 1996 compared to 3.4% in Fiscal
1995.
The combined Federal and State income tax rate was 38.3% in Fiscal 1996
compared to 40.2% in Fiscal 1995. Income tax rates varied from Federal
statutory rates due to state income taxes. See Note 9 of the notes to the
consolidated financial statements for components of the income taxes and the
reconciliation of the provision for income taxes to the federal statutory
rates.
Net income decreased 8.7% to $1,331,932 in Fiscal 1996 from $1,458,993 in
Fiscal 1995. As a percentage of revenue, net income decreased to 1.8% in
Fiscal 1996 from 2.1% in Fiscal 1995.
Earnings per share was 18 cents in Fiscal 1996 compared to 20 cents in
Fiscal 1995.
INFLATION
The Company's management believes that increases in the cost of new vehicles
and boats that may result from increases in cost of products purchased from
manufacturers can be offset by higher resale prices for used retail vehicles
and boats as well as higher retail prices for new vehicles and boats although
there may be a lag in the ability of the Company to pass such increases on to
its customers.
Historically, increases in operating costs are passed on to the consumer when
the market allows. The Company's management believes that its business has not
been significantly affected by inflation despite increased chassis and
manufacture conversion costs experienced.
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RECENT ACCOUNTING PRONOUNCEMENTS
In February, 1997, the Financial Accounting Standards Board issued SFAS No.
128, Earnings per Share, which is effective for interim and annual periods
ending after December 15, 1997. The overall objective of SFAS No. 128 is to
simplify the calculation of earnings per share (EPS) and achieve comparability
with the International Accounting Standards. The Company will be required to
adopt SFAS No. 128 in the first quarter of 1998, but does not expect the
adoption to have a material effect on earnings per share. Basic and diluted
EPS under SFAS No. 128 would not differ more than $.01 per share from the EPS
presented for 1997, 1996 and 1995.
Also during 1997, the FASB issued SFAS No. 130, Reporting of Comprehensive
Income, which is effective for fiscal years beginning after December 15, 1997.
This statement requires the reporting of net income and all other changes in
equity during the period, except those resulting from investments by owners and
distributions to owners, in a separate statement that begins with net income or
in the consolidated statement of operations below net income. This
pronouncement will not be effective for the Company until the fiscal year
ending October 31, 1999. For the fiscal years ended October 31, 1997, 1996 and
1995, comprehensive income and net income would not differ materially.
IMPACT OF THE YEAR 2000 ISSUE ON THE COMPANY
The Year 2000 Issue is the result of computer programs being written using
two digits rather than four to define the applicable year. Based on a recent
assessment, the Company has determined that it's principle management
information system software, the ERA Advantage, provided by the Reynolds &
Reynolds Company, Dayton OH, will be year 2000 qualified by mid-year, 1998.
The Company also uses various "off the shelf" software applications
throughout the Company for the storage and analysis of various types of data
that management is dependent upon for day to day operations.
Management's preliminary assessment is, little or no modifications or
replacement will be necessary to the Company's existing software to achieve
Year 2000 Qualification.
However, the Company has not communicated with all of its significant
suppliers to determine the extent to which the Company is vulnerable to those
third party failures to remediate their own Year 2000 Issue. The Company does
not anticipate the suppliers cost to obtain Year 2000 compliance to be passed
on to the Company. However, there is no guarantee that these systems of other
Companies on which the Company's systems rely will timely converted, or that
failure to convert by another Company, or the conversion that is compatible to
Company systems, would not have a material, adverse effect on the Company.
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The Company has determined that it has no exposure to contingencies related
to the Year 2000 Issue, for products it has sold.
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS
The Company wishes to take advantage of the new "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995 and is filing this
cautionary statement in connection with such safe harbor legislation. The
Company's Form 10-Q, this Form 10-K, any Form 8-K, or any other written or oral
statements made by or on behalf of the Company may include forward looking
statements which reflect the Company's current views with respect to future
events and financial performance. The words "believe", "project",
"anticipates", "estimates", "expects", "most likely", "intends" and similar
expressions identify forward looking statements.
The Company wishes to caution investors that any forward looking statements
made by or on behalf of the Company are subject to uncertainties and other
factors that could cause actual results to differ materially from such
statements. The uncertainties and other factors include, but are not limited
to, the factors listed below (many of which have been discussed in prior SEC
filings by the Company.) Though the Company has attempted to list the factors
it believes to be important to its business, the Company wishes to caution
investors that other factors may prove to be important in affecting the
Company's results of operations. New factors emerge from time to time and it
is not possible for management to predict all of such factors, nor can it
assess the impact of each such factor on the business or the extent to which
any factor, or combination of factors, may cause actual results to differ
materially from forward looking statements.
Investors are further cautioned not to place undue reliance on any forward
looking statements as they speak only of the Company's view as of the date the
statement was made. The Company undertakes no obligation to publicly update or
revise any forward looking statements, whether as a result of new information,
future events, or otherwise.
FACTORS
GENERAL ECONOMIC CONDITIONS
The Company's sales are affected by general economic conditions, including
employment rates, prevailing interest rates, inflation, and other economic
conditions affecting disposable consumer income generally. Weakness in the
economy could have a material adverse effect on the Company's business. The
majority of the Company's customers purchasing vehicles and boats finance their
purchase. Increases in consumer interest rates could have an adverse effect on
the Company's ability to sell vehicles and boats. Furthermore, a general
increase in commercial interest rates would increase the rates paid by the
Company on its floor plan contracts, thereby adversely effecting the Company's
operating income.
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COMPETITION
The Company competes with a large number of dealers, some of which operate in
more than one location, although most of the competitors operate from a single
location. Significant competitive factors include price, service, reliability,
quality of service and convenience. Among other things, increased competition
could cause downward pressure on sales prices and lower margins.
SATELLITE OPERATIONS
The Company depends on all of its revenue and most of its income from
satellite retail sales and service centers. These centers are geographically
widespread throughout the continental U.S. making it difficult for the
Company's top management to have a presence in all the centers on a regular
basis. As a result, the Company is highly dependent upon each center's
management for the on-going operation of each respective center. Turnover of
managerial personnel at any center usually has an adverse effect on the sales
and profitability of the center. Turnover of managerial personnel at several
of the same Company's centers could have a material adverse effect on the
Company's sales and profitability.
DEPENDENCE UPON MANUFACTURERS FOR SUPPLY OF PRODUCT
The Company markets approximately 50 brands of vehicles and 10 brands of
boats. The Company maintains "dealer agreements" with most of the
manufacturers of the vehicles and boats specifying certain terms and conditions
necessary for the Company to continue representation of the specific brand in a
specified geographic market area. The loss of any one brand would not
materially affect the Company, however, the loss of all brands of anyone of the
two largest manufacturers, i.e. Fleetwood Enterprises, Inc. or Thor Industries,
Inc., would have a material, adverse effect on the Company's sales.
FUEL PRICING AND AVAILABILITY
The Company's business is automotive in nature and as such is dependent upon
the availability of fuel. A decrease in the availability of gasoline and the
inability of the Company to convert its vehicles to alternative fuels could
have a material adverse effect on the Company's business. Historically,
increases in the price of gasoline have not had a material impact on the
Company's business, as long as there was no concurrent decline in availability.
However, future significant increases in the price of gasoline or decreases in
availability would have a material effect on the Company's business.
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REGULATION, SUPERVISION, AND LICENSING
The Company's operations are subject to ongoing regulation, supervision and
licensing under various federal, state, and local statutes, ordinances and
regulations. The adoption of more stringent statutes and regulations, changes
in the interpretation of existing statutes and regulations, or the Company's
entrance into jurisdictions with more stringent regulatory requirements could
curtail some of the Company's operations, deny the Company the opportunity to
operate in certain locations, or restrict products or services offered by the
Company.
The Company's customers and potential customers are subject to federal, state
and local statutes, ordinances and regulations regarding the ownership of
recreation vehicles and boats. The adoption of more stringent statutes,
ordinances and regulations effecting the consumer ownership of recreation
vehicles or boats, could have an adverse effect on the Company's ability to
sell its products.
ENVIRONMENTAL RISKS
The nature of any automotive business involves the handling of hazardous
wastes such as motor oil, fuel, paint and other chemicals. Noncompliance with
or changes to environmental regulations could adversely affect the Company's
business.
CONTINUING GROWTH
The Company's growth has been fueled principally by the acquisition of retail
RV sales and service centers similar to those currently operated by the
Company. The Company's continued growth materially depends on it's ability to
continue to expand its operations through acquiring retail RV sales and service
centers. The Company's expansion is subject to a number of factors, including
but not limited to, the adequacy of the Company's capital resources, the
Company's ability to locate suitable acquisition candidates and negotiate
acceptable purchase terms, to hire, train and integrate employees, and to
adapt its selling system and other operations systems.
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Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereto duly authorized.
HOLIDAY RV SUPERSTORES, INCORPORATED
Registrant
By: /s/NEWTON C. KINDLUND, PRESIDENT
------------------------------------
Newton C. Kindlund, President and
Chairman
DATED: APRIL 2, 1998
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/Newton C. Kindlund President, Chairman of April 2, 1998
- --------------------------------- the Board of Directors
President and Chairman Chief Executive Officer
Principal Executive Officer
Newton C. Kindlund
/s/Joanne M. Kindlund Executive Vice President- April 2, 1998
- --------------------------------- Administration, Secretary/
Principal Administrative Officer Treasurer and Director
Joanne M. Kindlund
/s/W. Hardee McAlhaney Vice President, April 2, 1998
- --------------------------------- Chief Financial Officer and
Principal Financial Director
and Accounting Officer
W. Hardee McAlhaney
</TABLE>
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<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/James P. Williams Director April 2, 1998
- ---------------------------------
James P. Williams
/s/ Roy W. Parker Director April 2, 1998
- ---------------------------------
Roy W. Parker
/s/ Harvey M. Alper Director April 2, 1998
- ---------------------------------
Harvey M. Alper
</TABLE>
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