SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(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, 1996
OR
_ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file No. 1-13710
AID AUTO STORES, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 11-2254654
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
275 Grand Boulevard, Westbury, New York 11590
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code:
(516) 338 - 7889
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 ninety days.
Yes X No
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practical
date.
Common stock, par value of $.001 per share 3,957,596 shares as
of May 1, 1996
<PAGE>
AID AUTO STORES, INC.
CONTENTS
PART I FINANCIAL INFORMATION PAGE
Item 1 Consolidated Condensed Financial Statements:
Balance Sheets as of March 31, 1996 and
December 31, 1995 3
Statements of Operations for the Three Months Ended
March 31, 1996 and 1995 4
Statements of Cash Flows for the Three Months Ended
March 31, 1996 and 1995 5
Notes to Financial Statements 6
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II OTHER INFORMATION
Item 6 Exhibits and Reports on Form 8-K 13
SIGNATURES 14
<PAGE>
AID AUTO STORES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
CURRENT ASSETS: March 31, 1996 Dec. 31,1995
(UNAUDITED) (AUDITED)
<S> <C> <C>
Cash and cash equivalents $2,443,507 $4,766,893
Accounts receivable-trade, net of allowances
for doubtful accounts of $645,000 and
$612,000 at March 31, 1996 and December 31,
1995, respectively 2,415,291 2,991,012
Inventories 11,289,374 9,372,480
Prepaid expenses and other current assets 2,443,405 1,400,703
Notes receivable, net of allowances for
doubtful accounts of $190,000 at March 31,
1996 andDecember 31, 1995 230,656 245,014
Deferred income taxes 268,000 268,000
__________ __________
Total current assets 19,090,233 19,044,102
__________ __________
FIXED ASSETS, NET 1,756,715 1,754,124
COSTS IN EXCESS OF NET ASSETS ACQUIRED, NET 3,894,320 3,929,376
OTHER ASSETS:
Intangible assets 25,420 36,863
Notes receivable - net of current portion 218,824 218,824
Deferred income taxes 175,000 175,000
Security deposits & other assets 145,399 143,433
TOTAL ASSETS: $25,305,911 $25,301,722
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Note payable - bank $ 5,749,898 $ 5,011,200
Accounts payable 5,755,411 4,315,842
Accrued expenses 310,616 487,386
Current portion of long-term debt 75,404 2,208,225
Loans payable - stockholder 619,490 468,750
Income tax 6,620 -
__________ __________
Total current liabilities 12,517,439 12,491,403
LONG-TERM DEBT, NET OF CURRENT PORTION 1,529,533 1,582,373
DEFERRED OCCUPANCY COSTS 147,385 157,995
NOTE PAYABLE - STOCKHOLDER 2,031,250 2,031,250
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Preferred stock, $.001 par value; authorized
2,000,000 shares; none issued - -
Common stock, $.001 par value; authorized,
15,000,000 shares; 3,957,596 shares issued
and outstanding at March 31, 1996 and
December 31, 1995 3,958 3,958
Additional paid-in capital 9,006,809 9,006,809
Retained earnings 69,537 27,934
_________ _________
9,080,304 9,038,701
__________ _________
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $25,305,911 $25,301,722
========== ==========
See Notes to Consolidated Condensed Financial Statements
<PAGE> AID AUTO STORES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
<CAPTION>
Three Months Ended March 31
Revenues 1996 1995
Net Sales $6,521,693 $4,016,069
Franchise Fees 52,344 71,200
_________ _________
6,574,037 4,087,269
Costs and expenses
Cost of sales 4,010,476 2,848,606
Selling and shipping 1,686,688 718,261
General and administrative 682,057 574,865
__________ __________
$6,379,221 $4,141,732
__________ __________
Income (Loss) from Operations 194,816 (54,463)
Interest Expense (196,267) (194,092)
Interest and other income 51,669 33,842
_______ ________
Income (Loss) from operations
before income taxes 50,218 (214,713)
Provision for income taxes 8,615 40,000
_________ _________
NET INCOME (LOSS) $ 41,603 $(254,713)
========== ==========
Income (Loss) per common share
Income (Loss) from operations before
income taxes $.01 $(.11)
===== ======
Net Income (Loss) per common share $.01 $(.13)
===== ======
Weighted average common shares outstanding 3,957,596 2,000,000
========= =========
See Notes to Consolidated Condensed Financial Statements
<PAGE>
AID AUTO STORES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION> Three Months Ended March 31
<S> <C> <C>
1996 1995
Cash flows from operating activities
Net income (loss) $41,603 $(254,713)
Adjustments to reconcile net income (loss)
to net cash used in operating activities
Depreciation and amortization 82,993 100,042
Provision for losses on accounts receivable 33,000 33,000
Deferred occupancy costs (10,610) 13,060
(Increase) decrease in operating assets
Accounts Receivable 542,721 105,933
Notes Receivable 14,358 48,242
Inventories (1,916,894) (1,144,354)
Prepaid expenses
& other current assets (996,204) (401,260)
Security deposits (1,965) 200
Deferred income taxes - 40,000
Increase (decrease) in operating liabilities
Accounts payable 1,439,569 1,094,219
Accrued expenses (133,366) 38,625
Income taxes payable 6,620 14,932
_________ _________
Net cash used in operating activities (898,175) (312,074)
_________ _________
Cash flows from investing activities
Capital expenditures $(85,584) $(10,647)
_________ _________
Net cash used in investing activities $(85,584) $(10,647)
========= =========
Cash flows from financing activities
Net borrowings under revolving credit line 738,698 677,453
Principal payments of long-term debt (2,031,485) (10,310)
Repayment of officers' loans (46,840) (551,951)
_________ ________
Net cash (used in) provided by
financing activities (1,339,627) 115,192
___________ _______
Net decrease in cash and
cash equivalents (2,323,386) (207,529)
Cash and cash equivalents,
at beginning of year 4,766,893 359,584
__________ _______
Cash and cash equivalents,
at end of year $2,443,507 $152,055
========== ========
Supplemental disclosures of cash flow information:
Cash paid during the year for
Interest 186,048 134,839
Income Taxes 68,253 -
</TABLE>
<PAGE>
AID AUTO STORES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
A. CONSOLIDATED FINANCIAL STATEMENTS:
The consolidated balance sheet as of March 31,
1996 and the consolidated statements of operations
and cash flows for the three month period ended
March 31, 1996 have been prepared by the Company
without audit. In the opinion of management, all
adjustments (which included only normal recurring
adjustments) necessary to present fairly the
financial position at March 31, 1996, and the
results of operations and cash flows for the
period presented, have been made. Results of
operations for the three month period ended March
31, 1996 are not necessarily indicative of the
operating results to be expected for the full
year.
For information concerning the Company's
significant accounting policies, reference is made
to the Company's audited financial statements for
the year ended December 31, 1995 contained in the
Company's Annual Report on Form 10-K filed with
the Securities and Exchange Commission. While the
Company believes that the disclosures presented
are adequate to make the information contained
herein not misleading, it is suggested that these
statements be read in conjunction with the
consolidated financial statements and notes
included in the Form 10-K.
B. INVENTORIES
Inventories consist primarily of merchandise
purchased for resale.
<PAGE>
AID AUTO STORES, INC.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
For the Three Months Ended March 31, 1996 and 1995
General:
Aid Auto Stores, Inc. (the "Company"), formed in
1953, is a franchisor, retailer and wholesaler of
automotive parts and accessories. As of March 31,
1996, the Company supplied products to 60 Aid Auto
Stores, including 43 franchised stores and 17
Company-owned stores, and, through its wholly-
owned subsidiary, Ames Automotive Warehouse, Inc.
("Ames"), to hundreds of non-automotive chain
stores and independent jobbers and installers in
New York, New Jersey and Connecticut. During the
periods covered under "Results of Operations"
below, the majority of Aid Auto Stores were owned
by franchisees of the Company. The Aid Auto
stores sell an extensive variety of name-brand
automotive parts, accessories and chemicals, as
well as an assortment of products marketed under
the "Aid" brand, and also under the "Perfect
Choice"[TM] brand to both do-it-yourself and
commercial customers. In 1994, in anticipation of
commencing its Company-owned mini-warehouse
Superstore growth strategy, the Company curtailed
the granting of new franchises, so as to preserve
favorable locations for Company owned Superstores.
In April, 1995, the Company consummated its
initial public offering, the net proceeds of which
were approximately $7,300,000 (the "Initial Public
Offering"). As described below, as of March 31,
1996, the Company had opened three new Superstores
and had acquired, in December 1995, ten franchised
Aid Auto Stores located in Long Island, New York,
of which it currently intends to convert nine to
Superstores. The Company currently anticipates
that the opening of up to 48 to 60 Superstores in
the five-year period following the April, 1995
Initial Public Offering. The number of stores to
be opened during this period is subject to
substantial variation depending upon, among other
factors, the availability of adequate financing to
fund the cost of adding the additional stores, the
level of success of the initial Superstores, the
availability of suitable store sites or
acquisition candidates, and the timely development
and construction of new stores. The anticipated
favorable financial performance of the Company is
tied, to a large extent, to the transition of the
Company to the Superstore program and the strong
future potential of that program. The Company's
operating expenses are expected to increase
significantly in connection with the Superstore
growth program and, accordingly, the Company's
future profitability will depend upon
corresponding increases in revenue from Superstore
operations, of which there can be no assurance.
On July 22, 1995, the Company held the Grand
Opening of its first new Company-owned Superstore.
The store is located in Long Island City, in the
New York City Borough of Queens. This Superstore
has had average daily sales far in excess of that
generated by the Company's non-Superstores. In
March, 1996, the Company opened Superstore
locations on a main thoroughfare in Brooklyn, New
York and in a major shopping mall in the New York
City Borough of Staten Island.
The Company has also sought to grow its operations
by means of acquiring other companies, including
Aid franchisees, having parts and accessories
retail stores. On December 15, 1995, the Company
acquired ten franchised Aid Auto stores located in
Long Island, New York. Following the acquisition,
the Company commenced converting up to nine of the
ten stores into Aid Auto Superstores.
Income from operations for the first quarter of
1996 compared to the loss from operations in the
first quarter of 1995 is primarily due to the
increased volume of high profit margin retail
sales as a result of the increased number of
Company-owned stores. These increased retail sales
more than offset the reduction in sales to
franchises which is attributable to the
termination of 19 franchises over the last twenty-
seven months due to their failure to meet the
standards set for franchisees and for other
reasons. Except for two additional franchises
granted to existing franchisees, the Company has
not granted any new franchises over the last
twenty-seven months, consistent with its
Superstore growth strategy.
Results of Operations:
Three months ended March 31, 1996 compared to three
months ended March 31, 1995.
The Company's operating revenues are primarily
derived from net sales consisting of both retail
and wholesale sales. Retail sales are made from
the Company-owned Aid Auto Stores of which 17
existed at March 31, 1996 and four at March 31,
1995. Wholesale sales include sales to the
Company's franchised Aid Auto Stores, of which 43
existed at March 31, 1996 and 54 at March 31,
1995, and through Ames, to hundreds of other
customers. Revenues increased by $2,487,000 (or
60.8%) from $4,087,000 for the three months ended
March 31, 1995 to $6,574,000 for the three months
ended March 31, 1996. The increase in revenues in
1996 was due primarily to the increase of
$2,847,000 in sales from Company-owned stores from
$555,000 for the three months ended March 31, 1995
to $3,402,000 for the three months ended March 31,
1996. Subsequent to the first quarter of 1995,
the Company acquired ten franchised Aid Auto
Stores located in Long Island, New York, and
opened three new Superstores. In addition, the
seasonal cold and wet winter of 1995-1996 resulted
in the increase in the sale of certain items (e.g.
anti-freeze and other winter chemicals) and an
increased need for other winter maintenance items
(especially when compared to the exceptionally
mild, auto-friendly winter weather in 1994-1995
which resulted in a decrease in the sale of winter
items). Revenue increases were offset in part by
a decrease in sales to franchisees, reflecting the
Company's decision consistent with its Superstore
growth strategy to generally not grant new
franchises (which results in a loss of sales to
new franchisees). Furthermore, seven franchised
stores were terminated by the Company in 1995, and
an additional five franchised stores were
terminated in the first quarter of 1996. In
addition, there was a slight decrease in the Ames
sales in the first quarter of 1996 as compared to
the first quarter of 1995.
Cost of sales increased by $1,161,000 (40.8%) from
$2,849,000 for the months ended March 31, 1995 to
$4,010,000 for the first three months of 1996.
The increase in cost of sales in absolute dollars
was attributable to the increased volume of sales
in 1996. As a percentage of net sales, cost of
sales declined from 70.9% for the three months
ended March 31, 1995 to 61.5% for the comparable
period in 1996, reflecting the significantly
higher margins on retail sales from the new
Superstores (as compared to lower margin on
wholesale sales) and the additional number of
Company-owned stores.
Selling and shipping expenses increased by
$969,000 (or 135.0%) from $718,000 (17.9% of net
sales) for the three months ended March 31, 1995
to $1,687,000 (25.9% of net sales) for the three
months ended March 31, 1996. The increase as an
absolute amount and as a percentage of net sales
for the three month period was due primarily to a
substantial increase of selling expenses,
reflecting a greater company infrastructure and a
significant increase in the Company's retail
operations. Selling expenses are higher for a
retail operation than for a wholesale operation,
reflecting the nature of these operations. As a
result of the Company's strong efforts to control
costs, the shipping expense dollars remained
essentially constant despite the large increase in
sales volume.
General and administrative expenses increased by
$107,000 (or 18.6%), from $575,000 (14.3% of net
sales) for the three months ended March 31, 1995
to $682,000 (10.5% of net sales) for the three
months ended March 31, 1996. The increase in
absolute dollars was due to the additional
infrastructure needed in connection with the
increased volume of business from the additional
Company stores. The significant decrease as a
percentage of sales for the first three months of
1996 was due to the increase in sales volume as
well as the Company's concentration on controlling
costs.
Interest expense increased, $2,000, from $194,000
for the first quarter ended March 31, 1995 to
$196,000 for the first quarter ended March 31,
1996. This nominal increase was due to a reduction
in the interest rate charged by the Company's Bank
during the first quarter of 1996 as compared to
the same period in the prior year. The lower
interest rate offset the effect of the increase in
the average outstanding bank debt balance during
the first quarter of 1996 as compared to the first
quarter of 1995.
The income from operations for the first three
months of 1996 was $195,000 compared to a loss
from operations of $54,000 for the three months
ended March 31, 1995 as a result of the above
factors.
Liquidity and Capital Resources:
The Company had working capital of $6,573,000 at
March 31, 1996, as compared to $6,553,000 at
December 31, 1995, essentially maintaining its
working capital at the same level at the beginning
and end of the first quarter. Through March 31,
1996, the Company had financed its capital
requirements predominantly through a bank loan and
credit facility, currently with Israel Discount
Bank of New York (the "Bank"), through loans from
one of its officers, and through the Company's
Initial Public Offering, the net proceeds of which
were approximately $7,300,000.
Net cash used in operating activities was $312,000
for the first three months of 1995 and $898,000
for the first three months of 1996. The increase
in 1996 was attributable primarily to increases in
inventories as a result of the increase in the
number of retail stores, as well as an increase in
prepaid expenses and other current assets compared
to the prior comparable period, offset in part by
a decrease in accounts receivable, an increase in
accounts payable, and the generation of net income
in the first quarter of 1996 as compared to a loss
in the same period in the prior year. Net cash
utilized in investing activities was $11,000 and
$86,000 in the first three months of 1995 and
1996, respectively, the increase reflecting
increased capital expenditures in connection with
the Superstore expansion program. Net cash of
$115,000 was provided by financing activities in
the first three months of 1995 compared to
$1,340,000 used in financing activities in the
first three months of 1996. The shift was
primarily attributable to the use of a short term
note in connection with the acquisition of the ten
store locations.
The Company receives volume purchasing discounts
and cooperative advertising and development funds
from certain of its suppliers. The amounts of
these incentives generally range from 5% to 10% of
the listed purchase prices.
Effective September 1, 1995, the Company entered
into a loan agreement with the Bank for a two year
revolving credit line of up to an aggregate of
$6,000,000 with an interest rate equal to the
prime rate. As of March 31, 1996, $5,749,898 was
outstanding under the line of credit. In
connection with the entry into the loan agreement,
the Bank released the personal guarantee of Philip
L. Stephen, the Company's Chairman, Chief
Executive Officer, President, and majority
shareholder, and also released the subordination
of his loan to the Company to the loan by the
Bank. In March, 1996, the subordination was
reinstated for $425,000, which is less than the
full amount of the loan.
Substantially all of the Company's assets are
pledged to the Bank as collateral, and the Company
is prohibited from granting a security interest to
any party other than the Bank, which could limit
the Company's ability to obtain debt financing to
implement its proposed expansion. In addition,
the Company's agreement with the Bank limits or
prohibits the Company, subject to certain
exceptions, from merging or consolidating with
another corporation or selling all or
substantially all of its assets. As of March 31,
1996, the Company was in compliance with all of
the covenants contained in the loan agreement with
the Bank. In the event that the Company is unable
to make payment on its line of credit when due on
August 31, 1997, the Bank could foreclose on the
collateral, which would have a material adverse
effect on the Company.
At March 31, 1996, the Company was indebted to Mr.
Stephen in the aggregate amount of $2,500,000.
The $2,500,000 loan is evidenced by two promissory
notes. The notes bear interest at the interest
rate charged by the Company's bank, payable
monthly, with principal payable in quarterly
installments commencing May 1, 1996 through
February 1, 2000. The note provides for immediate
payment thereof upon, among other things, a change
in a majority of the continuing directors of the
Company (as defined in the note) or a demand by
the Bank of payment in full of outstanding Bank
indebtedness.
The Company's accounts receivable, less allowances
for doubtful accounts, at March 31, 1996, were
$2,415,000, as compared to $2,991,000 at December
31, 1995. The decrease was due to a decrease in
the amount of wholesale sales on credit terms in
1996 as compared to 1995 combined with the
increased collection efforts. At March 31, 1996,
the Company's allowance for doubtful accounts was
$645,000 which the Company believes is currently
adequate for the size and nature of its
receivables. At March 31, 1996, notes receivable,
less allowance for doubtful accounts, were
$449,000, as compared to $464,000 at December 31,
1995. The decrease in notes receivable primarily
reflects collections on the promissory notes.
Currently, eight franchisees are obligated under
notes. Their inability to pay for purchases under
standard payment terms is due primarily to a
downturn in their business during the recessionary
economy of 1991 to 1993 (in some cases exacerbated
by road construction making access to the stores
difficult.) It is the Company's policy to convert
accounts receivable to a note when a franchisee
has demonstrated an inability to pay its account
on a timely basis. Delays in collection or
uncollectability of accounts and notes receivable
could have an adverse effect on the Company's
liquidity and working capital position and could
require the Company to increase its allowance for
doubtful accounts. Bad debt expense remained
constant at $33,000 in the first quarter of 1995
and 1996.
At March 31, 1996, the Company had deferred tax
assets of $443,000. The Company, after
considering its previous pattern of profitability
and its anticipated future taxable income,
believes that it is more likely than not that the
deferred tax assets will be realized. In this
respect, the Company estimates that $1,100,000 of
future taxable income will be required to realize
the deferred tax assets, with the majority of such
assets anticipated to be recovered over the next
five years.
As of the date hereof, other than in connection
with the implementation of the Superstore growth
program, the Company has no material commitments
for capital expenditures. In connection with the
acquisition of the ten stores described above, the
Company was obligated to expend $2,000,000 in cash
on January 2, 1996 in repayment of short term
notes. In addition as part of the purchase price
of the acquisition, at the time of the
acquisition, the Company assumed $1,000,000 of
trade payables, as well as issued 157,596 shares
of common stock of the Company and a promissory
note in the amount of $1,507,396.
The Company has used a substantial portion of the
net proceeds of the Initial Public Offering to
implement its proposed Superstore growth program.
The Company anticipates, based on currently
proposed plans and assumptions relating to its
operations (including the costs associated with,
and the timetable for, its proposed expansion),
the Company's working capital and current loan
facility, together with projected cash flow from
operations, will be sufficient to satisfy its
contemplated cash requirements for at least twelve
months (including the contemplated conversion of
nine of the stores acquired in the acquisition
into Superstores, and the opening of at least
three Superstores during that period). In the
event that the Company's cash flow proves to be
insufficient (due to unanticipated expenses,
difficulties, problems or otherwise), the Company
may be required to seek additional financing for
the initial phase of its Superstore growth program
or curtail such expansion activities. The Company
will need to seek additional debt or equity
financing, as the Company does not anticipate that
its current resources and cash flow from
operations are likely to be sufficient to fund the
continuing cost of its growth program to open 48
to 60 Superstores. To the extent that the Company
seeks financing through the issuance of equity
securities, any such issuance of equity securities
would result in dilution to the interests of the
Company's stockholders. Additionally, to the
extent that the Company incurs indebtedness to
fund increased levels of accounts receivable or to
finance the acquisition of capital equipment or
issues debt securities to fund the Superstore
growth program, the Company will be subject to
risks associated with incurring substantial
indebtedness, including the risks that interest
rates may fluctuate and cash flow may be
insufficient to pay principal and interest on any
such indebtedness. Other than the Company's
existing line of credit with the Bank, the Company
has no current arrangements with respect to, or
sources of, additional financing and it is not
anticipated that the existing majority stockholder
will provide any portion of the Company's future
financing requirements or further personal
guarantees. There can be no assurance that
additional financing will be available to the
Company on acceptable terms, or at all.
Seasonality:
The Company's business is seasonal to some extent
primarily as a result of the impact of weather
conditions on store sales. Store sales and
profits have historically been higher in the
second and third quarters (April through
September) of each year than in the first and
fourth quarters, for which the Company generally
achieves only nominal profits or incurs net
losses. Weather extremes tend to enhance sales by
causing a higher incidence of parts failure and
increasing sales of seasonal products. However,
extremely severe winter weather or rainy
conditions tend to reduce sales by causing
deferral of elective maintenance.
Impact of Inflation:
Inflation has not had a material effect on the
Company's operations.
<PAGE>
AID AUTO STORES, INC.
Part II OTHER INFORMATION
Item 6 Exhibits and Reports on Form 8-K
(b) Reports on Form 8-K
During the quarter ended March 31, 1996, a report
was filed on Form 8-K/A.
The Form 8-K/A contained the Pro Forma Financial
Statements of the ten Long Island franchised stores
acquired by the Company in December 1995 and amended
the original Form 8-K filed by the Company regarding
this acquisition.
<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.
AID AUTO STORES, INC.
_______________________
(Registrant)
Date: May 14, 1996 /s/ Philip L. Stephen
_________________________
Philip L. Stephen, Chairman, Chief
Executive Officer and President
Date: May 14, 1996 /s/ James Mazzarella
_______________________________
James Mazzarella
Vice President and Chief
Financial Officer
(principal financial officer)
<PAGE>
