SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2000
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ________ to ___________
Commission file number: 0-26464
CSI Computer Specialists, Inc.
(Exact name of Registrant as specified in its charter)
Delaware 52-1599610
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
904 Wind River Lane Suite 100
Gaithersburg, Maryland 20878
(Address of principal executive offices) (Zip code)
301-921-8860
(Registrant's telephone number including area code)
Check whether the issuer (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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 ____
State the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Title Outstanding
Common Stock, par value $0.001 per share 3,715,888 shares at March 31, 2000
Transitional Small Business Disclosure Format (check one);
Yes___ No X
<PAGE>
See notes to consolidated financial statements.
2
<PAGE>
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CSI COMPUTER SPECIALISTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, 2000 December 31,
ASSETS (Unaudited) 1999
---------------- ---------------
CURRENT ASSETS
Cash $ 112,167 $ 151,717
Accounts receivable 2,307,179 2,124,120
Accounts receivable - Related party 98,019 170,400
Net investment in sales-type leases - current 94,632 47,161
Inventory for resale 69,611 68,437
Parts and supplies inventory 1,088,138 865,961
Prepaid income taxes 429,809 440,000
Prepaid expenses 198,681 159,664
Miscellaneous receivables 51,517 69,398
---------------- ---------------
Total current assets 4,449,753 4,096,858
---------------- ---------------
PROPERTY AND EQUIPMENT - AT COST 1,736,060 1,727,259
Less accumulated depreciation (1,340,060) (1,287,783)
---------------- ---------------
396,000 439,476
---------------- ---------------
OTHER ASSETS
Goodwill (net of Accumulated Amortization) 453,493 462,972
Net investment in sales-type leases - non-current 52,468 25,199
Deferred tax asset 61,000 73,000
Other assets 95,516 95,516
---------------- ---------------
662,477 656,687
---------------- ---------------
$ 5,508,230 $ 5,193,021
================ ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable 1,741,164 1,656,132
Accrued expenses 456,056 418,009
Due to affiliate 603,416 274,723
Revolving line of credit 1,500,000 1,595,672
---------------- ---------------
Total current liabilities 4,300,636 3,944,536
---------------- ---------------
COMMITMENTS
STOCKHOLDERS' EQUITY
Preferred stock - authorized, 10,000,000 shares of $.001
par value; none issued $ - $ -
Common stock - authorized, 25,000,000 shares of $.001 par value;
issued and outstanding, 3,715,988 shares
3,716 3,716
Paid-in capital 5,182,739 5,182,739
Accumulated deficit (3,935,015) (3,894,124)
---------------- ---------------
Less: treasury stock, 313,726 shares at cost (43,846) (43,846)
---------------- ---------------
Total stockholders' equity 1,207,594 1,248,485
---------------- ---------------
$ 5,508,230 $ 5,193,021
============ ===========
<PAGE>
See notes to consolidated financial statements.
3
CSI COMPUTER SPECIALISTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
2000 1999
Three Months Ended March 31, (Unaudited) (Unaudited)
------------------- -------------------
Revenues
Maintenance services $ 3,015,948 $ 3,363,698
Parts and equipment sales 963,164 1,908,902
------------------- -------------------
$ 3,979,112 $ 5,272,600
Costs and expenses
Cost of maintenance services 2,582,121 2,433,134
Cost of parts and equipment sales 867,174 1,653,049
Selling, general and administrative 744,098 1,036,441
------------------- -------------------
4,193,393 5,122,624
------------------- -------------------
Operating income (loss) before provision for income
taxes,
loss from discontinued operations and
cumulative effect of accounting change (214,281) 149,976
Other (Expense)
Net interest expense (44,829) (2,182)
------------------- -------------------
Income (loss) before provision for income taxes,
loss from discontinued operations and
cumulative effect of accounting change (259,110) 147,794
Provision for Income Taxes
Deferred 12,000 -
------------------- -------------------
12,000 -
------------------- -------------------
Income (loss) from continuing operations before loss from discontinued
operations and cumulative effect
of accounting change (271,110) 147,794
Loss from discontinued operations - (101,154)
------------------- -------------------
Income (loss) before cumulative effect
of accounting change (271,110) 46,640
Cumulative effect of accounting change 230,219
------------------- -------------------
Net income (loss) $ (40,891) $ 46,640
=================== ===================
Earnings per Share:
Income (loss) from continuing operations per share $ (0.07) $ 0.04
(Loss) from discontinued operations per share $ - $ (0.03)
Cumulative effect of accounting change per share $ 0.06 $ -
------------------- -------------------
Net income (loss) per Share $ (0.01) $ 0.01
=================== ===================
Weighted-Average Number of Shares Outstanding 3,715,888 3,820,497
=================== ===================
See notes to consolidated financial statements.
4
<PAGE>
CSI COMPUTER SPECIALISTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
March 31,
2000 1999
(Unaudited) (Unaudited)
-------------- ---------------
Cash flows from operating activities: $ (40,891) $ 46,640
Net income (loss)
Adjustments to reconcile net income
(loss) to net cash provided by/(used
in) operating activities:
Depreciation and amortization 61,756 72,308
Amortization of parts and supplies 238,018
Provision for bad debts 9,000 9,000
Deferred income taxes 12,000
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable and net
investment in sales-type leases (194,418) (182,476)
Inventory - resale (1,174) 99,299
Parts and supplies inventory (222,177) (245,177)
Prepaid expenses (39,017) 10,380
Prepaid income taxes 10,191
Miscellaneous receivables 17,881
Other assets (280)
Increase (decrease) in:
Accounts payable and accrued expenses 123,079 747,101
-------------- ---------------
Total Adjustments (222,879) 748,173
-------------- ---------------
Net cash provided by/(used in) operating activities(263,770) 794,813
Cash flows from investing activities:
Cash - restricted - 443,846
Acquisition of property and equipment (8,801) (4,136)
-------------- ---------------
Net cash provided by/(used in) investing activities (8,801) 439,710
Cash flows from financing activities:
Payments on long-term debt - (4,676)
Payments on revolving line of credit (95,672) (665,000)
Advances from affiliate 328,693 -
Purchase of treasury stock - (443,846)
-------------- ---------------
Net cash provided by/(used in) financing activities 233,021 (1,113,522)
-------------- ---------------
Net increase (decrease) in cash and cash equivalents(39,550) 121,001
Cash and cash equivalents at beginning of period 151,717 49,035
-------------- ---------------
Cash and cash equivalents at end of period $ 112,167 $ 170,036
============== ===============
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 44,923 $ 28,465
============== ===============
See notes to consolidated financial statements.
<PAGE>
8
CSI COMPUTER SPECIALISTS, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 1 - Basis of Presentation
The financial statements at March 31, 2000 and for the three month
periods ended March 31, 2000 and 1999, are unaudited and reflect all adjustments
(consisting only of normal recurring adjustments) which are, in the opinion of
management, necessary for a fair presentation of the financial position and
operating results for the interim periods. The financial statements have been
prepared in accordance with the rules and regulations of the Securities and
Exchange Commission, and therefore omit certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles. The Company believes that the
disclosures contained in the financial statements are adequate to make the
information presented therein not misleading. The financial statements should be
read in conjunction with the financial statements and notes thereto, together
with management's discussion and analysis of financial condition and results of
operations, contained in the Company's Annual Report on Form 10-KSB for the
fiscal year ending December 31, 1999.
The results of operations for the three months ended March 31, 2000 are
not necessarily indicative of the results that may be expected for the entire
fiscal year ending December 31, 2000.
Note 2 - Change in Inventory Method
Effective January 1, 2000, the Company changed its method of accounting
for the cost of parts and supplies inventory from capitalizing and amortizing
the cost of parts and supplies inventory to operations on a straight-line basis
over an 18 - 24 month period to the lower of cost, defined as first-in,
first-out (FIFO) or market. The Company believes that this method results in a
closer matching of costs and revenue during periods of fluctuating prices,
thereby reflecting a more realistic picture of the Company's financial
condition. The cumulative effect of the change on prior years of approximately
$230,000 or $0.06 per share is a one-time increase in net income. The effect of
the change on the period ended March 31, 2000 and the proforma effect for the
same interim period of the prior fiscal year is not determinable.
Note 3 - Discontinued Operations
On June 30, 1999, the Company sold a majority of the operating assets
and liabilities of Cintronix, Inc., a wholly owned subsidiary to Interactive
Systems, Inc. ("ISI"), a corporation owned by the Company's majority
stockholder. Cintronix, Inc.'s operations involved the sale and service of
computer equipment. These operations have ceased and are no longer reflected in
the interim financial statements for the period ended March 31, 2000. The prior
period has been restated to reflect the results of Cintronix, Inc. as
discontinued operations. Components of amount reflected in the statement of
operations are presented in the following table:
Three Months Ended March 31, 1999
Revenues $ 2,433,611
Costs and Expenses (2,513,435)
Other Expense (21,330)
----------
$ (101,154)
=========
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Certain statements made in this Quarterly Report on Form 10-QSB are
"forward-looking" statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Such statements involve known and unknown risks,
uncertainties, and other factors that may cause actual results, performance, or
achievements of the Company to be materially different from any future results,
performance, or achievements expressed or implied by such forward-looking
statements. Although the Company believes that the expectations reflected in
such forward-looking statements are based upon reasonable assumptions, the
Company's actual results could differ materially from those set forth in the
forward-looking statements. Certain factors that might cause such a difference
include, but are not limited to, the timing of revenues, rapid technological
change, the demand for services for computer hardware systems and computer
equipment, the timing and amount of capital expenditures and other risks
detailed herein.
GENERAL
The Company provides a full range of computer hardware services,
including sales and maintenance of mainframe and mid-range computer equipment
and parts, network design and installation, computer upgrades, and installation
and de-installation of equipment. These services are provided to commercial
customers, agencies of federal, state and local governments, universities,
associations and hospitals primarily in the Mid-Atlantic region of the United
States, including West Virginia, Virginia, Maryland, the District of Columbia,
New Jersey, New York, Connecticut and Pennsylvania, and also in Illinois and
California.
The Company's principal business is providing computer maintenance and
repair services, which are provided under both fixed fee and time and materials
arrangements. Under the fixed fee arrangement, which is the primary method of
service, a customer pays a fixed monthly fee for the term of the agreement,
generally one to two years, for which the Company provides the parts and labor
for both scheduled preventative maintenance and emergency repairs. The Company
records the revenue from fixed fee contracts ratably over the term of the
contract, while the costs the Company incurs to provide the maintenance and
emergency repairs are charged to expense as incurred. Accordingly, the
profitability of the Company's maintenance and repair services can and will be
affected by period to period fluctuations in the number and severity of the
emergency repairs required by its customers, which the Company cannot predict or
control. Additionally, in certain circumstances the Company will choose to
provide the contracted-for services by subcontracting with others, particularly
when the equipment covered by the agreement cannot be serviced in a cost
effective manner, is difficult to repair or replace, or requires unique
engineering expertise that is not applicable to equipment utilized by a
significant number of the Company's other customers. The Company obtains such
subcontracting services through short-term agreements, and its profit margin
will generally be lower than if the work were not subcontracted. Accordingly,
operating results may fluctuate from period to period as a result of changes in
the level and nature of subcontracted services.
The sale of computer equipment expanded rapidly in 1997, leveled out in
1998,and declined during 1999 due to increased competition and changes in
purchasers' buying patterns. The expansion of these sales was fueled primarily
by the acquisition of Cintronix, Inc., in 1997, which sold mid-range and
personal computer equipment, primarily to the federal government. The continued
decrease in the margins in these equipment sales during the 3rd quarter of 1998
and 1st quarter of 1999 resulted in management's decision to sell off the book
of business of Cintronix on June 30, 1999. This sale has resulted in a
significant decrease in revenues for the Company, but has allowed the
elimination of overhead cost associated with the operation of Cintronix.
Mainframe equipment sales are entered into more commonly to secure contracts for
the maintenance thereof than for the profit on the equipment sale itself, and
the margins on these sales of equipment are subject to market conditions.
Consequently, operating profits as a percentage of gross sales are subject to
fluctuation due to the volume and the makeup of equipment sales. Other areas of
expansion are in the areas of servicing laser printers, providing help desk
support services, and expanding the Company's technical capabilities to maintain
the more current mainframe technology.
RESULTS OF OPERATIONS
The Company's first quarter revenues of $3,979,112 was a decrease of 25
% from the first quarter revenues of the prior year of $5,272,600. The decrease
in net revenues for the quarter was a direct result of the decrease in parts and
equipment sales. Management does not intend to aggressively pursue growth in the
parts and equipment sales area, due to the decreased margins available, and also
due to the sale of the book of business of Cintronix, Inc., which was the main
source of revenue in this area. Maintenance service revenues for the first
quarter decreased approximately 10% from the first quarter of 1999. The decrease
in maintenance service revenues was attributable to the loss of several customer
maintenance contracts. Management intends to increase marketing efforts to
promote continued growth primarily in the maintenance service revenue area.
Maintenance service revenues accounted for approximately 76% and 64%,
respectively, of the Company's consolidated revenues for the first quarters of
2000 and 1999.
The Company's cost of sales as a percentage of revenues was 87% in the
first quarter of 2000 as compared to 78% in the first quarter of 1999. This
increase was primarily from higher repair parts cost resulting from the change
in accounting for parts and supplies inventory from capitalizing and amortizing
the cost of parts and supplies inventory over an 18 - 24 month period to the
lower at cost, defined as first-in, first-out (FIFO) or market. This method will
result in potentially wider fluctuations in parts costs used in repairs. Gross
margins on parts and equipment sales decreased slightly during the first quarter
of the year, primarily as a result of the decreased margins available in this
area.
Selling, general and administrative expenses as a percentage of net
revenues were 19% and 20% respectively, for the first quarters of 2000 and 1999.
The slight decrease in the percentage is primarily due to the Company reducing
its sales and administrative workforce as part of its cost reduction efforts.
These expenses will continue to decrease as a percentage of sales as the Company
continues to adjust its selling, general and administrative expenses to align
with the lower sales base. The selling, general and administrative expenses
decreased 28% to $744,098 for the first quarter of 2000 compared to $1,036,441
for the same period of 1999. These decreases were a result of the Company's
concentrated efforts to reduce costs.
The Company showed an operating loss from continuing operations of
$214,281 for the first quarter of 2000 compared to income of $149,976 for the
same period of 1999. This decrease in operating profit was primarily
attributable to the discontinuance of customer maintenance contracts and an
increase in the cost of parts used in fixed price maintenance contracts.
Net interest expense from continuing operations increased to $44,829
for the three months ended March 31, 2000, from $2,182 for the same period of
1999. The Company expects net interest expense to increase until it starts
generating additional cash from operations that can be used to decrease the
Company's outstanding debt. The outstanding line of credit with Crestar Bank at
March 31, 2000 was $1,500,000 and the Company has an outstanding debt of
$603,416 from an affiliated company at March 31, 2000.
Effective January 1, 2000, the Company changed its method of accounting
for the cost of parts and supplies inventory from capitalizing and amortizing
the cost of parts and supplies inventory to operations on a straight-line basis
over an 18 - 24 month period to the lower of cost, defined as first-in,
first-out (FIFO) or market. The Company believes that this method results in a
closer matching of costs and revenue during periods of fluctuating prices,
thereby reflecting a more realistic picture of the Company's financial
condition. The cumulative effect of the change on prior years of approximately
$230,000 or $0.06 per share is a one-time increase in net income. The effect of
the change on the period ended March 31, 2000 and the proforma effect for the
same interim period of the prior fiscal year is not determinable.
LIQUIDITY AND CAPITAL RESOURCES
Working capital was $149,117 at March 31, 2000 compared to $571,812 at
March 31, 1999. Cash flows used in operations for the three months of 2000
totaled $263,770, resulting primarily from operating losses and an increase in
inventory that was due to the company changing its method of accounting for
inventory during the period. The ratio of current assets to current liabilities
decreased slightly to 1.03:1 at March 31, 2000 from 1.11:1 at March 31, 1999.
Since December 1998, the Company has had difficulty obtaining
financing to meet its short-term working capital requirements and has had to
rely on funding from an affiliate. The Company was able to obtain a credit
facility, which includes a revolving line of credit, with Crestar Bank in 1997
to fund its operations. The credit facility expired in October 1998 and
continued under a forbearance agreement until May 1999, so that Crestar Bank
could reevaluate the Company's financial operations. Crestar Bank decided not to
extend the credit facility for another year. However, Crestar Bank extended the
credit line while the Company attempted to obtain alternative financing. The
Company attempted without success to establish a new line of credit with several
lenders, including IBM Credit Corporation, FINOVA Distribution, FINOVA Special
Credit Division and Sandy Spring National Bank. In September 1999, Crestar Bank
reduced the credit line from $2,000,000 to $1,750,000 and increased the interest
rate being charged to 3% over prime. On March 6, 2000, Crestar Bank notified the
Company of its intention to terminate the revolving credit line by reducing the
line from $1,750,000 to $1,500,000 on March 23, 2000, and $100,000 per week
thereafter until the credit line reaches zero. The Company could not continue to
operate under this financing arrangement and could face bankruptcy if it is
unable to secure alternative financing for its operations and the repayment of
the credit facility. The credit line is secured by substantially all of the
Company's assets. At March 31, 2000, there was $1,500,000 outstanding under the
credit line. In response to the reduction of available funds under the Crestar
Bank credit facility, during fiscal years 1999 and 2000, ISI an affiliate
company advanced approximately $325,000 and $275,000, respectively, to the
Company to cover operating expenses. ISI is providing the funding to the Company
at an interest rate of prime plus 1% per annum, with principal repayable on
demand.
On March 22, 2000, ISI communicated it's intentions to make a tender
offer for all of the stock, except that owned by Mr. Donald C. Weymer, of CSI
Computer Specialists, Inc.
At a meeting held on March 24, 2000, the Board of Directors of CSI (the
"CSI Board"), by unanimous vote, based on the Company's current financial
condition, its inability to obtain financing, which could result in the Company
filing for bankruptcy, recent bid prices for the Common Shares on the OTC
Bulletin Board (the "OTCBB") and the Company's current book value, (i)
determined that the Offer was in the best interests of CSI and its stockholders;
and (ii) recommended acceptance of the Offer by CSI stockholders. Accordingly,
the csi Board recommended that the stockholders of CSI accept the offer and
tender their shares pursuant to the offer.
On April 26, 2000 a tender offer was submitted by ISI to the Company's
stockholders to purchase all outstanding common shares of the Company at a
purchase price of $1.00 per common share, net to the seller in cash (less any
required withholding taxes), which expires on May 24, 2000.
Year 2000 Issues
The Company has not been adversely affected in any material respect
because of Year 2000 issues.
<PAGE>
Part II. Other Information
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
On March 22, 2000 the Company was advised by Interactive Systems, Inc.,
an affiliated company, of it's intentions to make a tender offer of
$1.00 per share for all outstanding shares, other than those owned by
Mr. Donald C. Weymer, Chairman and Chief Executive Officer of the
Company. On March 24, 2000 the Board of Directors, by unanimous vote,
recommended acceptance of the Offer by CSI stockholders.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit
Number Title of Exhibit
3.4 ** Agreement and Plan of Merger between CSI Computer Specialists, Inc.
(Delaware) and Computer Specialists, Inc. (Maryland) filed with the Securities
and Exchange Commission as an exhibit to the Registration Statement filed on
July 19, 1995 (the "Registration Statement") and incorporated herein by
reference.
3.5 ** Bylaws of CSI Computer Specialists, Inc. (Registrant) filed
with the Securities and Exchange Commission as an exhibit to
the Registration Statement and incorporated herein by
reference.
3.7 ** Certificate of Amendment of Certificate of Incorporation of CSI Computer
Specialists, Inc. (Delaware) as filed with the Secretary of State of the State
of Delaware on August 5, 1994, filed with the Securities and Exchange Commission
as an exhibit to the Registration Statement and incorporated herein by
reference.
4.1 ** Specimen Common Stock Certificate, filed with the Securities and Exchange
Commission as an exhibit to the Registration Statement and incorporated herein
by reference.
4.2 ** Specimen Warrant Certificate, filed with the Securities and Exchange
Commission as an exhibitto the Registration Statement and incorporated herein by
reference.
4.3 ** Form of Underwriter's Unit Purchase Option, filed with the
Securities and Exchange Commission as an exhibit to the
Registration Statement and incorporated herein by reference.
4.4 ** Form of Warrant Agreement by and among the Company, Biltmore Securities,
Inc. and Continental Stock Transfer & Trust Company, amended from that which was
filed with the Securities and Exchange Commission as an exhibit to the
Registration Statement and incorporated herein by reference.
10.1 ** Form of Maintenance Agreement filed with the Securities and Exchange
Commission as an exhibit to the Registration Statement and incorporated herein
by reference.
10.2 ** Form of Subcontracting (Microcomputer Service) Agreement
filed with the Securities and Exchange Commission as an
exhibit to the Registration Statement and incorporated herein
by reference.
10.3 ** Form of Equipment Sales Agreement filed with the Securities and Exchange
Commission as an exhibit to the Registration Statement and incorporated herein
by reference.
10.6 ** Employment Agreement, dated April 7, 1994, by and between the Company
and Donald C. Weymer filed with the Securities and Exchange Commission as an
exhibit to the Registration Statement and incorporated herein by reference.
10.7 ** Employment Agreement, dated April 7, 1994, by and between the Company
and William Pershin filed with the Securities and Exchange Commission as an
exhibit to the Registration Statement and incorporated herein by reference.
10.8 ** CSI Computer Specialists, Inc. 1994 Stock Option Plan filed with the
Securities and Exchange Commission as an exhibit to the Registration Statement
and incorporated herein by reference.
10.9 ** Plan for Incentive Compensation of Donald C. Weymer filed
with the Securities and Exchange Commission as an exhibit to
the Registration Statement and incorporated herein by
reference.
10.10 ** Revolving Commercial Loan Note, dated May 27, 1994, in
favor of Citizens Bank of Maryland in the principal amount of
$750,000 filed with the Securities and Exchange Commission as
an exhibit to the Registration Statement and incorporated
herein by reference.
10.11 ** Security Agreement, dated May 27, 1994, in favor of
Citizens Bank of Maryland and corresponding Financing
Statement filed with the Securities and Exchange Commission as
an exhibit to the Registration Statement and incorporated
herein by reference.
18.1 ** Preferability Letter, dated May 10, 2000 issued by Goldstein Golub
Kessler, LLP.
27. Financial Data Schedule.
** Previously filed as noted.
(b) Reports on Form 8-K
None.
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.
CSI Computer Specialists, Inc.
By: /s/ William F. Pershin
Date: May 12, 2000 William F. Pershin
-------------
Chief Accounting Officer
