SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10 Q
(Mark One)
/XX/QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 25, 2000
/ / 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: 0-19717
WPI GROUP, INC.
----------------
(Exact name of registrant as specified in its charter)
NEW HAMPSHIRE 02-0218767
-------------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1155 Elm Street, Manchester, New Hampshire 03101
----------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (603) 627-3500
-------------
--------------------------------------------------------------------
(Former name, former address, and former fiscal year, if changed
since last report)
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
---- ----
Applicable only to issuers involved in bankruptcy proceedings
during the preceding five years:
Indicate by check mark whether the registrant filed all documents
and reports required to be filed by Section 12, 13 or 15(d) of
the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by the court.
Yes No
---- ----
Applicable only to corporate issuers:
Indicate the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
Class Outstanding as of August 3, 2000
------ ---------------------------------
Common Stock, par value $.01 6,056,758 shares
<PAGE>
WPI GROUP, INC.
INDEX
PART I - FINANCIAL INFORMATION Page No.
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets 3
- June 25, 2000 and September 26, 1999
Consolidated Statements of Operations 4
- Three months ended June 25, 2000 and June
27, 1999
- Nine months ended June 25, 2000 and June
27, 1999
Consolidated Statements of Cash Flows 5
- Nine months ended June 25, 2000 and June
27, 1999
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of 8
Financial Condition and Results of Operations
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURES 12
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<PAGE>
<TABLE>
WPI GROUP, INC.
CONSOLIDATED BALANCE SHEETS
<CAPTION>
September 26, June 25,
1999 2000
------------- ---------
(unaudited)
ASSETS
<S> <C> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 1,086,708 $ 10,354
Accounts receivable - net of allowance
for doubtful accounts
of $171,000 and $262,500, respectively 2,027,808 1,816,826
Accounts receivable - other 101,135 85,594
Inventories 461,893 447,369
Prepaid expenses and other current 238,550 213,409
assets
Refundable income taxes 220,205 105,551
Prepaid income taxes 2,655,419 260,450
Net assets of discontinued operations 54,200,000 9,200,000
------------ -----------
Total current assets 60,991,728 12,139,553
PROPERTY, PLANT AND EQUIPMENT
at cost less accumulated depreciation 1,668,473 810,411
OTHER ASSETS 1,896,868 1,766,163
----------- -----------
$64,557,050 $14,716,127
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Bank and other loans payable $69,155,487 $28,624,840
Accounts payable 1,499,103 1,984,925
Accrued expenses 2,173,763 3,049,847
----------- -----------
Total current liabilities 72,828,353 33,659,612
----------- -----------
DEFERRED INCOME TAXES 2,702,987 307,562
----------- -----------
COMMITMENTS
STOCKHOLDERS' EQUITY (DEFICIT):
Common stock, $.01 par value;
authorized 20,000,000 shares, issued
and outstanding 6,050,398
and 6,056,758, respectively. 60,504 60,568
Additional paid-in capital 14,574,134 14,585,533
Retained earnings (deficit) (25,608,919) (33,897,148)
------------ -----------
Total stockholders' equity
(deficit) (10,974,281) (19,251,047)
------------ -----------
$ 64,557,059 $14,716,127
============= ===========
</TABLE>
See notes to financial statements
-3-
<PAGE>
<TABLE>
WPI GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
June 27, June 25, June 27, June 25,
1999 2000 1999 2000
------------ ----------- ----------- ----------
<S> <C> <C> <C> <C>
CONTINUING OPERATIONS
Net Sales $ 2,618,703 $ 3,573,724 $ 9,006,981 $10,734,845
Cost of Goods Sold 1,102,943 1,409,141 3,443,409 4,265,729
Gross Profit 1,515,760 2,164,583 5,563,572 6,469,116
------------ ----------- ----------- ------------
Operating Expenses:
Research and new
product development 519,200 818,748 1,472,891 2,323,483
Selling, general and
administration 2,098,932 1,670,593 5,923,988 5,731,183 8
Restructuring costs - - 450,000 1,700,000
------------ ----------- ---------- ----------
Total Operating
Expenses 2,618,132 2,489,341 7,654,079 10,017,466
------------ ------------ ---------- ----------
Operating Loss (1,102,372) (324,758) (2,090,507) (3,548,350)
Other Income (Expense):
Interest expense (133,297) (1,030,919) (386,625) (2,022,424)
Forbearance expense - (253,500) - (538,500)
Other, net 41,747 1,479 19,511 (3,955)
------------- ---------- --------- ----------
Loss before Benefit for
Income Taxes (1,193,922) (1,607,698) (2,457,629) (6,113,229)
Provision for Income
Taxes 362,000 - - -
------------- ----------- ---------- ----------
Loss from Continuing
Operations (1,555,922) (1,607,698) (2,457,621) (6,113,229)
DISCONTINUED OPERATIONS
Loss from discontinued
operations (net of
applicable income
taxes) (1,692,564) - (2,865,737) -
Estimated loss from
disposal of
discontinued operations - (615,000) - (2,175,000)
--------------- ----------- ----------- -----------
Loss before cumulative
effect of change in
accounting principle (3,248,486) (2,222,698) (5,323,358) (8,288,229)
CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING
PRINCIPLE, net of
applicable income taxes
of $1,000,000 - - (2,822,147) -
------------ ------------ ------------ ------------
Net Loss $ (3,248,486) $ (2,222,698) $ (8,145,505) $ (8,288,229)
------------ ------------ ------------ ------------
Earnings (Loss) Per Share
- Continuing Operations $ (.26) $ (.27) $ (.41) $ (1.01)
(Note 3) ------------ ------------ ------------- -----------
</TABLE>
See notes to financial statements
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<PAGE>
<TABLE>
WPI GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
<CAPTION>
Nine Months Ended
June 27, June 25,
1999 2000
------------- ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (8,145,505) $ (8,288,229)
------------- ------------
Adjustments to reconcile net income
to net cash
Provided by operating activities:
Cumulative effect of change in
accounting principle 2,822,147 -
Depreciation and amortization 3,846,979 1,555,722
Loss from disposal of discontinued
operations - 2,175,000
Deferred income taxes 9,292 -
Changes in current assets and
liabilities net of effects
of acquisition:
Accounts receivable 4,618,742 4,327,085
Accounts receivable - other (52,531) 476,833
Inventories (3,061,493) (664,932)
Prepaid expenses and other current (507,582) (21,276)
assets
Accounts payable 583,320 (1,853,532)
Accrued expenses 208,043 794,209
Accrued income taxes (426,613) 405,439
----------- ----------
Total adjustments 8,040,304 7,194,548
----------- ----------
Net cash provided by (used in)
operating activities (105,201) (1,093,681)
----------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of businesses - 41,203,602
Additions to property, plant and
equipment (2,150,774) (518,051)
(Additions) deletions to other assets (54,972) 2,905
Payment of accrued acquisition costs (397,453) (151,945)
----------- ----------
Net cash provided by (used in)
investing activities (2,603,199) 40,536,511
----------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in current and
long-term debt 2,564,460 (40,530,647)
Proceeds from issuance of common
stock 35,958 11,463
Proceeds from exercise of stock
options 29,419 -
Net cash provided by (used in) ---------- -----------
investing activities 2,629,837 (40,519,184)
---------- -----------
EFFECT OF FOREIGN CURRENCY TRANSLATION
ON CASH (30,007) -
---------- -----------
NET DECREASE IN CASH AND CASH
EQUIVALENTS (108,570) (1,076,354)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 159,518 1,086,708
----------- -----------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 50,948 $ 10,354
=============== ============
SUPPLEMENTAL DISCLOSURE OF CASH
INFORMATION:
Income taxes paid (refunded) $ 70,246 $ (117,054)
Interest paid 3,940,396 6,309,867
</TABLE>
See notes to financial statements
- 5 -
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The financial statements for the three months and nine
months ended June 25, 2000 and June 27, 1999 are
unaudited and include all adjustments which, in the
opinion of management, are necessary to present fairly
the results of operations for the periods then ended.
All such adjustments are of a normal recurring nature.
These financial statements should be read in conjunction
with the financial statements and notes thereto included
in the Company's Form 10-K filed with the Securities and
Exchange Commission (File No. 0-19717), which included
financial statements for the years ended September 26,
1999 and September 27, 1998.
Certain prior year amounts have been reclassified to
conform with current year presentation.
The results of the Company's operations for any interim
period are not necessarily indicative of the results of
the Company's operations for any other interim period or
for a full fiscal year.
<TABLE>
2. INVENTORIES
<CAPTION>
Inventory consists of: September 26, June 25,
1999 2000
------------- ---------------
<S> <C> <C> <C> <C>
Raw Materials $ 315,071 $ 280,164
Work in Process 27,340 56,309
Finished Goods 119,482 110,896
------------- ---------------
Total $ 461,893 $ 447,369
============= ===============
</TABLE>
3. EARNINGS (LOSS) PER SHARE
<TABLE>
The following table sets forth the computation of basic
and diluted earnings (loss) per share for the periods
indicated:
<CAPTION>
Three Months Ended Six Months Ended
June 27, June 25, June 27, June 25,
1999 2000 1999 2000
------------- ----------- ------------- ------------
Earnings (loss) per
share - basic
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Continued operations $ (0.26) $ (0.27) $ (0.41) $ (1.01)
Discontinued operations (0.28) (0.10) (0.47) (0.36)
Effect of
accounting change - - (0.47) -
------------- ------------ ------------- -----------
Net loss $ (0.54)$ (0.37)$ (1.35) $ (1.37)
------------- ------------ ------------- ----------
Earnings (loss) per
share - diluted
Continued operations $ (0.26) $ (0.27) $ (0.41) $ (1.01)
Discontinued operations (0.28) (0.10) (0.47) (0.36)
Effect of
accounting change - - (0.47) -
------------- ----------- ---------- ---------
Net loss $ (0.54) $ (0.37) $ (1.35) $ (1.37)
Weighted Average
Common Shares 6,048,977 6,053,259 6,041,515 6,053,243
Effective of
Dilutive Shares - - - -
------------ ------------ ----------- ----------
Adjusted Weighted
Average
Common Shares 6,048,977 6,053,259 6,041,515 6,053,243
------------ ------------- ---------- ----------
</TABLE>
- 6 -
<PAGE>
4. RESTRUCTURING CHARGES
During the nine months ended June 25, 2000, the Company
entered into a severance agreement with certain former
executives and officers. In connection with the
agreements, the Company recorded a restructuring charge
of $1,770,000, consisting primarily of the continuation
of payroll and benefits subsequent to termination. Of
the total restructuring charge, $320,000 will be paid
over various periods ending August 2000. The remaining
$1,450,000 will be paid over a five-year period ending
December 2004 in connection with the terms of a former
executive's severance agreement. In addition, during
the nine months ended June 25, 2000, the Company paid
approximately $91,000 in connection with a severance
agreement entered into during the fiscal year ended
September 26, 1999 with a former executive.
The Company's restructuring activity during the six-
month period ending June 25, 2000 is as follows:
Restructuring reserve balance at
September 26, 1999 $ 148,269
Employee severance costs accrued
and charged to expense 1,770,000
Charges against reserve for the
nine months ended June 25, 2000 (649,971)
-----------
Restructuring reserve balance at
June 25, 2000 $ 1,268,298
===========
5. DISCONTINUED OPERATIONS
During its fiscal 1999, the Company adopted and is in
the process of implementing a restructuring plan
intended to focus on its MPSI business unit (a provider
of vehicle diagnostic systems). In connection
therewith, the Company decided to divest itself of its
Industrial Technology Group segment. In December 1999,
the Company completed the sale of its industrial power
conversion systems and electronic ballast businesses
(WPI Power Systems and WPI Electronics) to a private
group of investors for approximately $9.3 million in
cash plus the assumption of certain liabilities. In
February 2000, the Company completed the sale of its
rugged handheld computer and terminal business units
(WPI Husky Technology and WPI Oyster Termiflex, Ltd.)
to Dynatech Corporation, for approximately $35 million
in cash plus the assumption of certain liabilities.
During the fiscal quarter ended June 25, 2000, the
Company completed the sale of WPI Oyster Termiflex,
Inc. and certain real estate located in the United
Kingdom. The Company is also in the process of
negotiating the sale of its instruments and solenoid
businesses (WPI Instruments and WPI Magnetec).
In connection with the completed business sales of its
rugged handheld computer and terminal business units,
Dynatech Corporation has proposed certain adjustments
that may potentially effect the ultimate purchase price
paid. The Company believes the ultimate settlement of
these matters will not materially impact the
accompanying financial statements.
The Company recognized an estimated loss on disposal of
discontinued operations of approximately $.6 million
and $2.2 million in the fiscal quarter and nine months
ended June 25, 2000. The losses were primarily
attributable to higher than anticipated loss on the
sale of its business units, the operating results of
the discontinued operations and higher than anticipated
interest expense in the second quarter of fiscal 2000.
- 7 -
<PAGE>
ITEM 2.
Management's Discussion and Analysis of Financial
Condition and Results of Operations
This Management's Discussion and Analysis of Financial
Condition and Results of Operations should be read in
conjunction with the financial statements and footnotes
contained in the Company's Form 10-Q for the period
ending March 26, 2000 and the Form 10-K for the year
ended September 26, 1999, filed with the Securities and
Exchange Commission. In addition to historical
information, this report contains forward looking
statements that involve risks and uncertainties that
could cause actual results to differ materially. Factors
that might cause or contribute to such differences
include, but are not limited to, those discussed in this
section. Readers should carefully review the risks
described in other documents the Company files from time
to time with the Securities and Exchange Commission,
including the Company's Annual Report on Form 10-K where
the fiscal year ended September 26, 1999. Readers are
cautioned not to place undue reliance on the forward
looking statements, which speak only as of the date of
this report. The Company undertakes no obligation to
publicly release any revisions to the forward looking
statements or reflect events or circumstances after the
date of this document.
RESULTS OF OPERATIONS
Continuing Operations
Net sales of $3.6 million for the third quarter of fiscal
2000 increased 36.5% from sales of $2.6 million for the
third quarter of fiscal 1999. For the first nine months
of fiscal 2000 the Company reported sales of $10.7
million, 19.2% higher than sales of $9.0 million for the
first nine months of fiscal 1999. The increase was due to
growth in shipments to the Company's primary target
markets.
Cost of sales of $1.4 million for the third quarter of
fiscal 2000 resulted in a gross profit of 60.6%, compared
to a gross profit of 57.9% for the same period of fiscal
1999. Cost of sales of $4.3 million for the first nine
months of fiscal 2000 resulted in a gross profit of
60.3%, compared to a gross profit of 61.8% for the same
period of fiscal 1999. The changes in the Company's
gross profit percentage in fiscal 2000 compared to the
same periods of fiscal 1999 was primarily attributable to
a change in mix of products sold and decreased software
licenses revenue.
Research and new product development expenses were
$818,000, 22.9% of sales, and $2.3 million, 21.6% of net
sales, for the fiscal quarter and the nine months ended
June 25, 2000, respectively. For the same fiscal quarter
and nine month periods of fiscal 1999, research and new
product development expenses were $519,000, 19.8% of
sales, and $1.5 million, 16.4% of sales, respectively.
The increase was attributed to the continued development
of E-Technician, a web-based remote diagnostic platform.
Selling, general and administration expenses were $1.7
million and $2.1 million for the third quarter of fiscal
2000 and 1999, respectively, and $5.9 million and $5.7
million, for the nine months of fiscal 2000 and 1999,
respectively. As a percentage of sales, selling, general
and administrative expenses were 46.7% and 80.2% for the
fiscal 2000 and 1999 quarters, respectively, and 55.2%
and 63.6% for the nine month of fiscal 2000 and 1999,
respectively. The changes in selling, general and
administrative expenses in fiscal 2000 are primarily
attributable to a reduction in executive and
administrative personnel costs offset by additional costs
related to consultants and advisors incurred in
connection with the debt negotiations with the bank
syndicate.
During the nine months ended June 25, 2000, the Company
entered into various severance agreements with certain
former executives. In connection with the agreements,
the Company recorded a restructuring charge of $1.8
million during the nine months ended June 25, 2000,
consisting primarily of the continuation of payroll and
benefits payments subsequent to termination.
- 8 -
<PAGE>
The Company's operating loss for the third quarter of
fiscal 2000 and 1999 was ($325,000) and ($1.1) million,
respectively. For the nine months ended June 25, 2000 and
June 27, 1999 the Company's operating loss was ($3.5)
million and ($2.1) million, respectively. The increase in
the operating loss was primarily due to the increase in
research and new product development costs, and the
restructuring and non-recurring costs discussed above.
The Company's other income (expense) was ($1.3) million
for the third quarter of fiscal 2000 compared to
($92,000) in the third quarter of fiscal 1999. For the
nine months ended June 25, 2000 and June 27, 1999 other
income (expense) was ($2.6) million and ($367,000),
respectively. The increase was due primarily to higher
interest expense and $539,000 of fees incurred in
connection with the execution of a forbearance agreement
related to the Company's bank debt.
Discontinued Operations
The Company's loss from discontinued operations was
($1.7) million and ($2.9) million for the quarter and
nine months ended June 27, 1999. The loss was the result
of lower sales in the Company's rugged handheld computer
and terminal, power conversion and electronic ballasts
businesses, increased costs and operating expenses as a
result of the acquisition of WPI Instruments in August
1998, and higher interest expense from additional
borrowings and higher interest rates.
The Company recognized an estimated loss on disposal of
discontinued operations of $615,000 and $2.2 million for
the third quarter and nine months ended June 25, 2000,
respectively. The loss was primarily attributable to a
higher than anticipated loss on the sales of its rugged
handheld computer and terminal businesses and the
operating results of the discontinued operations and
higher than anticipated interest expense.
Cumulative Effect of Change in Accounting Principle
As of September 28, 1998, in accordance with the
statement of position 98-5 "Reporting on the Cost of
Start-up Activities", the Company changed its method of
accounting for deferred product enhancement costs to
expense these costs as incurred. As a result, the
Company recognized a cumulative effect of a change in
accounting principle of $2,822,000, net of taxes of
$1,000,000.
LIQUIDITY AND CAPITAL RESOURCES
As of June 25, 2000 the Company had a working capital
(deficit) of ($21.5) million compared to ($11.8) million
at September 26, 1999. Net cash used in operating
activities totaled $1.1 million and $105,000 for the nine
months ended June 25, 2000 and June 27, 1999,
respectively.
As of June 25, 2000, the Company had no material
commitments for capital expenditures.
In August 1998, the Company entered into a $75 million
credit facility with a syndication of banks, consisting
of a $20 million revolving line of credit which was to
expire on September 30, 2003 and term notes totaling
approximately $55 million payable in varying quarterly
installments commencing on December 31, 1998 and through
September 30, 2004. The credit facility agreement
contains certain restrictive covenants, including certain
financial covenants the Company was not in compliance
with at September 27, 1998, March 28, 1999 and June 27,
1999. The Company reached an agreement with the banks to
waive the events of non-compliance and amend certain
terms of the credit agreement.
During the current fiscal year, the Company entered into
a series of forbearance agreements with the banks.
Pursuant to the terms of the forbearance agreements, the
Company confirmed that all outstanding borrowings were
due and payable. The agreements limit the revolving
credit borrowings to $6.5 million and provides that all
borrowings bear interest at prime plus 5.5%. In
addition, the agreements provided for the payment of
forbearance and other fees totaling $538,500 to the
banks.
- 9 -
<PAGE>
The initial forbearance period ended March 31, 2000.
Subsequently, the Company entered into a series of
extensions to the forbearance agreement the most recent
expired August 7, 2000. The Company has requested and is
presently in the process of negotiating the terms of a
loan modification agreement with the banks. There is no
assurance the Company will be successful in negotiating a
loan modification agreement or further extension of a
forbearance agreement with the banks.
During its fiscal 1999, the Company adopted and is in the
process of implementing a restructuring plan intended to
focus on its MPSI business unit (the provider of vehicle
diagnostic systems). In connection therewith:
1. The Company decided to divest itself of its
Industrial Technology Group segment. In December
1999, the Company completed the sale of its
industrial power conversion systems and electronic
ballast businesses (WPI Power Systems and WPI
Electronics) to a private group of investors for
approximately $9.3 million in cash plus the
assumption of certain liabilities. The Company is
also in the process of seeking a buyer for its
instruments and solenoid businesses (WPI
Instruments and WPI Magnetec).
2. On February 22, 2000, the Company completed the
sale of its rugged handheld computer and terminal
business units (WPI Husky Technology and WPI
Oyster Termiflex, Ltd.) to Dynatech Corporation,
for approximately $35 million in cash plus the
assumption of certain liabilities.
3. In April 2000, the Company completed the sale of a
facility located in the United Kingdom for
approximately $2.1 million in cash.
4. In June 2000, the Company completed the sale of
WPI Oyster Termiflex, Inc. to a private group of
investors for approximately $577,000 in cash plus
the assumption of certain liabilities.
The Company utilized the cash generated from the
divestitures of the businesses to repay a significant
portion of the existing bank debt and to support the
Companies' operations. The Company intends to refinance
its remaining debt to provide sufficient liquidity to
meet its continuing working capital requirements. There
is no assurance the Company will be successful in
divesting the instruments and solenoid businesses,
refinancing its existing debt or that sufficient funding
will be available to execute the present business plan.
If the Company is unable to successfully complete the
sale of its net assets of discontinued operations,
renegotiate its bank agreements and obtain additional
funding, the cash from operations will not be sufficient
to cover short-term or long-term liquidity requirements.
- 10-
<PAGE>
WPI GROUP, INC.
PART II - Other Information
Item 6. Exhibits and Reports on Form 8-K
A. Exhibits
10.1 Forbearance Agreement dated March 31, 2000.
10.2 Forbearance Agreement dated May 3, 2000.
27 Financial Data Schedule.
B. Reports on Form 8-K
On June 8, 2000, the Registrant filed a report
under Item 2 of Form 8-K to reporting the sale
of WPI Termiflex, Inc. to Warner Power, LLC.
- 11-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be
signed on behalf by the undersigned thereunto duly
authorized.
WPI GROUP, INC.
(Registrant)
Date: August 8, 2000 By:/s/John R. Allard
-----------------
John R. Allard
President and
Chief Executive Officer
Date: August 8, 2000 By:/s/John W. Powers
-----------------
John W. Powers
Vice President
and Chief Financial Officer
-12-
<PAGE>
