SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended MARCH 31, 2000 Commission file number 0-4217
ACETO CORPORATION
(Exact name of registrant as specified in its charter)
NEW YORK 11-1720520
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
ONE HOLLOW LANE, LAKE SUCCESS, NY 11042
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(516) 627-6000
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.01
(Title of Class)
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____
Indicate the number of shares outstanding of each of the issuer's class of
common stock, as of the close of the period covered by this report.
Common Stock - 6,155,095
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ACETO CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
March 31, June 30,
2000 1999
ASSETS
Current assets:
Cash and cash equivalents $ 6,809 $ 3,991
Short-term investments 1,073 7,427
Receivables:
Trade, less allowance for doubtful accounts:
(March, $306; June, $219) 30,857 26,073
Other 3,210 942
34,067 27,015
Inventory 30,718 29,644
Prepaid expenses 203 240
Deferred income tax benefit, net 1,354 1,188
Property held for sale 456 456
Total current assets 74,680 69,961
Long-term investments 5,299 11,852
Long-term notes receivable 919 976
Property and equipment:
Machinery and equipment 667 639
Leasehold improvements 528 191
Computers 1,233 1,085
Furniture and fixtures 765 733
Automobiles 167 135
3,360 2,783
Less accumulated depreciation 2,470 2,238
890 545
Goodwill, less accumulated amortization 4,698 2,514
(March, $170; June, $76)
Other assets 292 311
Total assets $ 86,778 $ 86,159
See accompanying notes to consolidated financial statements.
ACETO CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except par value)
(Unaudited)
March 31, June 30,
2000 1999
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Drafts and acceptances payable $ 684 $ 750
Current installments on long-term
liabilities 642 125
Accounts payable 2,106 2,972
Accrued merchandise purchases 10,012 9,447
Accrued compensation 3,512 2,569
Accrued environmental remediation 1,312 1,323
Accrued income taxes 1,461 956
Other accrued expenses 2,245 2,360
Total current liabilities 21,974 20,502
Long-term liabilities, excluding current
installments 908 925
Redeemable preferred stock,
$2.50 par value per share;
Authorized 2,000 shares;
issued and outstanding: - 750
March, 0 shares; June, 300 shares
Shareholders' equity:
Common stock,$.01 par value per share;
Authorized 20,000 shares;
Issued: 9,001 shares; 90 90
outstanding: March, 6,155 shares;
June, 6,416 shares
Capital in excess of par value 57,054 57,637
Retained earnings 34,885 31,224
92,029 88,951
Less:
Cost of common stock held in treasury;
March, 2,846 shares; June, 2,585
shares 28,133 24,969
Total shareholders' equity 63,896 63,982
Commitments and contingencies
Total liabilities and shareholders'
equity $ 86,778 $ 86,159
See accompanying notes to consolidated financial statements.
ACETO CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Nine Months Ended
MARCH 31
2000 1999
Net sales $141,548 $127,883
Cost of sales 121,832 110,755
Gross profit 19,716 17,128
Selling, general and administrative
expenses 12,883 11,501
Operating profit 6,833 5,627
Other income (expense):
Interest expense (29) (33)
Interest and other income 796 1,778
767 1,745
Income before income taxes 7,600 7,372
Provision for income taxes 2,986 2,782
Net income $ 4,614 $ 4,590
Net income per common share:
Basic $ 0.74 $ 0.69
Diluted 0.73 0.67
Weighted average shares outstanding:
Basic 6,211 6,580
Diluted 6,358 6,828
See accompanying notes to consolidated financial statements.
ACETO CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
MARCH 31
2000 1999
Net sales $ 55,476 $ 45,420
Cost of sales 47,140 38,716
Gross profit 8,336 6,704
Selling, general and administrative
expenses 5,008 4,679
Operating profit 3,328 2,025
Other income (expense):
Interest expense (19) (19)
Interest and other income 75 516
56 497
Income before income taxes 3,384 2,522
Provision for income taxes 1,313 876
Net income $ 2,071 $ 1,646
Net income per common share:
Basic $ 0.34 $ 0.25
Diluted 0.33 0.25
Weighted average shares outstanding:
Basic 6,165 6,456
Diluted 6,228 6,690
See accompanying notes to consolidated financial statements.
ACETO CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Nine Months Ended
March 31
2000 1999
Operating activities:
Net income $ 4,614 $ 4,590
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 451 248
Gain on sale of assets (21) (178)
Provision for doubtful accounts 86 23
Deferred tax benefit (167) -
Changes in assets and liabilities,
net of effects of the acquisitions:
Investments - trading securities 3,442 (424)
Trade accounts receivable (4,871) (1,071)
Other receivables (2,268) 440
Inventory 4,111 536
Prepaid expenses 37 (238)
Other assets 19 6
Drafts and acceptances payable (66) 33
Accounts payable (866) 491
Accrued merchandise purchases 565 (606)
Accrued compensation 943 42
Accrued environmental remediation (11) (55)
Accrued income taxes 567 20
Other accrued expenses (86) (51)
Net cash provided by operating activities 6,479 3,806
Investing activities:
Purchases of investments - held-to-maturity (5,306) (8,535)
Proceeds from investments - held-to-maturity 14,771 11,298
Issuance of notes receivable - (159)
Payments received on notes receivable 57 42
Purchases of property and equipment (604) (109)
Proceeds from sale of property 21 183
Payments for acquisitions (6,995) (2,111)
Net cash provided by investing activities 1,944 609
Financing activities:
Payments of long-term debt - (250)
Proceeds from exercise of stock options 204 135
Payments for purchases of treasury stock (4,935) (3,775)
Issuance of treasury stock to employees 79 329
Payments of cash dividends (953) (885)
Net cash used in financing activities (5,605) (4,446)
Net increase (decrease) in cash and cash
equivalents 2,818 (31)
Cash and cash equivalents at beginning of period 3,991 9,178
Cash and cash equivalents at end of period $ 6,809 $ 9,147
See accompanying notes to consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share amounts)
Unaudited
Note 1: Basis of Presentation
The consolidated financial statements of Aceto Corporation and subsidiaries
included herein have been prepared by the Company and reflect all adjustments
(consisting solely of normal recurring adjustments) necessary to present fairly
the financial position, results of operations and cash flows for all periods
presented. Interim results are not necessarily indicative of results which may
be achieved for the full year.
These consolidated financial statements do not include all disclosures
associated with consolidated financial statements prepared in accordance with
generally accepted accounting principles. Accordingly, these statements should
be read in conjunction with the Company's consolidated financial statements and
notes thereto contained in the Company's Form 10-K for the year ended June 30,
1999.
Note 2: Business Acquisition
a) On January 18, 2000, the Company purchased certain assets of Schweizerhall,
Inc. (Schweizerhall) for a purchase price of $6,345. In addition to the
purchase price, contingent consideration may be paid to Schweizerhall one year
after the closing. In the event any additional payments are made to
Schweizerhall such payments will be recorded as additional goodwill. The
acquisition was accounted for as a purchase and, accordingly, the cost of the
acquisition was preliminarily allocated to the assets acquired, based upon
their estimated fair values at the date of acquisition. The allocation of the
purchase price is pending the final determination of certain acquired balances.
The excess of cost over the fair value of assets acquired amounted to $1,215.
The goodwill is being amortized on a straight-line basis over a period of
twenty years. The assets acquired consisted of inventory and a non-competition
agreement. The results of operations of Schweizerhall have been included in
the accompanying consolidated statement of income from the date of acquisition.
Pro forma results of operations were not provided as their effect on the
consolidated results of operations were not material.
b) On October 19, 1999 the Company purchased certain assets of Magnum Research
Corp. (Magnum) for a purchase price of $1,150. Of the purchase price $650 was
paid at closing and the balance is scheduled to be paid in equal installments
of $167 in October 2000, 2001 and 2002 (the October payments). The October
payments are subject to downward adjustment in the event Magnum's net sales, as
defined in the purchase agreement, are less than a specified amount. In the
event the October payments are adjusted downward such adjustments will be
recorded as reductions to goodwill.
The acquisition was accounted for as a purchase and, accordingly, the cost of
the acquisition was allocated to the assets acquired, based upon their
estimated fair values. The excess of cost over the fair value of assets
acquired amounted to $1,093. The goodwill is being amortized on a straight
line basis over a period of twenty years. The assets acquired consisted
primarily of inventory. The results of operations of Magnum have been
included in the accompanying consolidated statements of income from the date of
acquisition. Proforma results of operations were not provided as their effect
on the consolidated results of operations were not material.
Note 3: Redeemable Preferred Stock
On November 15, 1999 the Aceto Corporation Profit Sharing Plan (the holder of
the redeemable preferred stock) converted all of the preferred stock to 139
shares of common stock. The Company purchased the common shares on November
15, 1999, at $11.1562 per share which was the market price of the common stock.
The total amount paid to the Aceto Corporation Profit Sharing Plan was $1,555.
Note 4: Supplemental Cash Flow Information
Cash paid for interest and income taxes during the nine months ended March 31,
2000 and 1999 was as follows:
2000 1999
Interest $ 20 $ 16
Income taxes 2,624 2,755
NON-CASH TRANSACTIONS:
In November 1999, the redeemable preferred stock was converted into shares of
common stock.
In connection with the acquisition of Magnum in October 1999, the Company
recorded $500 of amounts due the previous owner as a liability.
In connection with the acquisition of CDC in November 1998, the Company
recorded $1,050 of amounts due the previous owner as a liability.
In July 1998, the Company received a note in the amount of $170 in connection
with the sale of a building and land.
Note 5: Segment Information
The Company has five reportable segments which are organized by products: (1)
Agrochemicals, whose products include herbicides, fungicides and insecticides,
as well as a sprout inhibitor for potatoes, (2) Industrial Chemicals, whose
products include a variety of specialty chemicals used in adhesives, coatings,
food, fragrance, cosmetics and many other areas, (3) Organic Intermediates and
Colorants, whose products include dye and pigment intermediates used in the
color-producing industries like textiles, inks, paper and coatings, as well as
intermediates used in production of agrochemicals, (4) Pharmaceutical
Biochemicals and Nutritionals products, which include the active ingredients
for generic pharmaceuticals, vitamins and nutritional supplements, and (5)
Pharmaceutical Intermediates and Custom Manufacturing products, used in
preparation of pharmaceuticals, primarily by major ethical drug companies. The
Company evaluates performance of the segments based on gross profit. The
Company does not allocate assets by segments as they are not provided to the
chief operating decision maker. Summarized financial information for each of
the segments for the nine and three months ended March 31, 2000 and 1999
follows:
Nine Months Ended March 31, 2000 and 1999
Indus- Organic Pharma- Pharma- Other Consolidated
Agro- trial Inter- ceutical ceutical Totals
chemicals Chemi- mediates Biochem- Inter-
cals & Colorants icals & mediates
Nutri- & Custom
tionals Mfg.
2000
Net
sales $7,630 37,381 36,014 27,014 30,076 3,433 $141,548
Gross
profit 2,628 6,823 5,283 4,821 2,190 1,162 22,907
Unallocated
cost of
sales (1) 3,191
Net gross profit $ 19,716
1999
Net
sales $7,445 32,926 28,929 20,208 36,376 1,999 $127,883
Gross
profit 2,792 5,665 4,032 3,410 2,491 1,417 19,807
Unallocated
cost of
sales (1) 2,679
Net gross profit $ 17,128
Three Months Ended March 31, 2000 and 1999
Indus- Organic Pharma- Pharma- Other Consolidated
Agro- trial Inter- ceutical ceutical Totals
chemicals Chemi- mediates Biochem- Inter-
icals & Colorants icals & mediates
Nutri- & Custom
tionals Mfg.
2000
Net
sales $4,741 12,828 12,618 11,975 11,995 1,319 $55,476
Gross
profit 1,735 2,548 1,832 2,009 874 625 9,623
Unallocated
cost of
sales (1) 1,287
Net gross profit $ 8,336
1999
Net
sales $3,231 11,422 10,001 6,910 12,402 1,454 $45,420
Gross
profit 893 1,992 1,463 1,274 999 1,069 7,690
Unallocated
cost of
sales (1) 986
Net gross profit $ 6,704
(1) Represents freight and storage costs that are not allocated to a segment.
Note 6: Interest and Other Income
Interest and other income earned during the nine and three months ended March
31, 2000 and 1999 was comprised of the following:
Nine Months Three Months
Ended Ended
March 31, March 31,
2000 1999 2000 1999
Dividends $ 35 $ 54 $ 7 $ 6
Interest 692 1,116 159 324
Net loss on investments (333) (21) (189) (42)
Net gain on sale of assets 21 11 -
Royalty income 331 460 73 162
Miscellaneous 50 169 14 66
$ 796 $1,778 $ 75 $ 516
Note 7: Net Income per Common Share
A reconciliation between the numerators and denominators of the basic and
diluted income per share computation for net income follows:
Nine Months Three Months
Ended Ended
March 31, March 31,
2000 1999 2000 1999
Net income $ 4,614 $ 4,590 $ 2,071 $ 1,646
Preferred stock dividend (29) (35) - -
Net income available for common
shareholders 4,585 4,555 2,071 1,646
Weighted average common shares 6,211 6,580 6,165 6,456
Effect of dilutive securities:
Stock options 76 109 63 95
Convertible preferred stock 71 139 - 139
Weighted average common and
potential common shares
outstanding 6,358 6,828 6,228 6,690
Basic income per share $ 0.74 $ 0.69 $ 0.34 $ 0.25
Diluted income per share 0.73 0.67 0.33 0.25
For the three months ended March 31, 2000, December 31, 1999, September 30,
1999, March 31, 1999 and December 31, 1998, employee stock options of 233, 240,
220, 280 and 232, respectively, were not included in the net income per share
calculation because their effect would have been anti-dilutive. For the three
months ended September 30, 1998, all employee stock options were included.
Note 8: Comprehensive Income
The Company has no items of other comprehensive income, therefore there is no
difference between the Company's comprehensive income and net income.
Note 9: Reclassifications
Certain reclassifications have been made to the prior consolidated financial
statements to conform to the current presentation.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES:
The Company's ability to generate cash from operations is usually adequate to
cover both short-term and long-term liquidity. In addition, the Company had
cash and both short and long term investments which totaled $13.2 million and
$23.3 million at March 31, 2000 and June 30, 1999, respectively. All of these
investments are highly liquid. The Company also has sufficient lines of credit
available should any additional funds be required.
Working capital increased slightly to $52.7 million at March 31, 2000 from
$49.5 million at June 30, 1999. The decrease of $6.4 million in
short term investments and $6.6 million in long term investments, both were
converted to cash for the purpose of the following three initiatives: The
Company continued its stock repurchase program and purchased 441,000 shares of
common stock for $4.9 million. The Company acquired certain assets of Magnum
Research Corp. (Magnum) which required an initial cash outlay of $650,000.
Finally, the Company acquired the inventory and goodwill of the U.S. chemical
distribution business of Schweizerhall, Inc., (Schweizerhall) a wholly owned
subsidiary of Schweizerhall Holding AG of Switzerland for $6.3 million. The
increase in trade accounts receivable of $4.8 million was due to an increase in
sales including the additional sales from the recent acquisitions, and the
timing of sales and accounts receivable collections. Other receivables
increased by $2.3 million mostly due to the timing of payments under a joint
venture arrangement. The increase in inventory of $1.1 million was a result of
the inventory purchased relating to the most recent acquisition, offset
somewhat by a decrease in inventory due to the timing of merchandise received.
Drafts and acceptances, accounts payable and accrued purchases payable
decreased slightly at March 31, 2000 compared to June 30, 1999. This decrease
was due primarily to the timing of merchandise purchases. Accrued compensation
increased approximately $1.0 million due to the timing of additional
compensation payments. Accrued income taxes payable increased approximately
$500,000 due to the timing of tax payments and a slightly higher effective tax
rate.
RESULTS OF OPERATIONS:
Net sales increased 22% and 11% for the three and nine months ended March 31,
2000, respectively, compared with the same periods last year. For the three
months, the acquisitions of the distribution business of Schweizerhall, Inc.
which primarily distributed nutraceuticals and, to a lesser degree, aroma
chemicals, and Magnum Research Corporation, which manufactures and distributes
industrial sanitary supplies, accounted for approximately 40% of the increase.
Sales of dye intermediates continued their rebound from depressed levels and
sales of generic bulk pharmaceuticals benefited from new sales of three
products, which we expect will continue. The agro-chemical segment regained
some sales which were postponed from earlier this year.
For the nine months, almost all our segments showed growth, with the exception
of pharmaceutical intermediates which decreased due to lower sales of a
significant product resulting from increased competition. Generally, the same
factors as the three months came into play, though the results were not as
dramatic because much of the increase was confined to the third quarter. The
majority of the decrease in pharmaceutical intermediates occurred in the first
six months.
Volume increased 29% and 25% for the three and nine months, respectively, in
comparison to the same periods in 1999. For the three months, the sales
increases were generally in lower priced products, especially dye and pigment
intermediates, causing the somewhat greater increase in volume than sales. For
the nine months, the large disparity between sales and volume increases can be
attributed to the aforementioned sales increases in lower priced goods,
combined with a decrease in pharmaceutical intermediates, which tend to be
higher priced.
Gross profit margins increased to 15.0% and 13.9% for the three and nine month
periods, respectively, from 14.8% and 13.4% for the comparable periods in the
prior year. For the nine months, the increase can be attributed to the
inclusion in our results of two new subsidiaries, CDC Products Corp. (CDC) and
Magnum, both of which sell goods at significantly higher margins than our
traditional lines of business. For the three months, this was somewhat offset
by an increase in freight and warehousing costs caused by a large increase in
inventory and freight to customers from the aforementioned Schweizerhall
acquisition.
Selling, general and administrative expenses for the nine months ended March
31, 2000 increased by $1,382,000 or 12% compared to the same
period last year. The inclusion of CDC as of November 1998, Magnum as of
October 1999 and Schweizerhall as of January 2000 in the consolidated financial
statements accounted for approximately $800,000 of this increase. Higher
compensation expense due to routine annual raises and an accrual for additional
compensation accounted for most of the balance of the increase. Selling
expenses increased due to our expanding China office and expenses relating to
the increase in personnel from our recent acquisitions. Office expense and
supplies also increased due to additional personnel and bank charges increased
significantly due to informal compensating balance agreements. Offsetting
these increases were decreases in bad debt expense, insurance expense and
consulting fees relating to expired contracts with retired senior executives.
For the three months there was an increase of $329,000, or 7% in selling,
general and administrative expenses, compared to the same period last year.
The same factors as the nine months caused the increase, with only minor
differences in the impact of each period.
Interest and other income decreased to $796,000 and $75,000 for the nine and
three months ended March 31, 2000, respectively, from $1,778,000 and $516,000
for the same periods last year, respectively. During both periods, interest on
investments decreased significantly due to a decrease in funds available for
investment. This was primarily due to the Company's ongoing stock repurchase
program, recent acquisitions and the need for working capital to support these
new acquisitions. In addition, a loss on marketable securities of $333,000 and
$189,000, respectively, was recorded during the nine and three months ended
March 31, 2000 compared to a loss of $21,000 and $42,000, respectively, during
the same periods last year.
The effective tax rate increased to 39.3% and 38.8% for the nine months and
three months ended March 31, 2000 from 37.7% and 34.7% for the same periods
last year.
IMPACT OF NEW ACCOUNTING PRONOUNCEMENTS
In June 1999, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 137, "Accounting for Derivative
Instruments and Hedging Activities-Deferral of the Effective Date of FASB
Statement No. 133." SFAS 137 amends SFAS 133, "Accounting for Derivative
Instruments and Hedging Activities," which was issued in June 1998. SFAS 137
defers the effective date of SFAS 133 to the first fiscal quarter of fiscal
years beginning after June 15, 2000. Earlier application is permitted. SFAS
133 establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts and for
hedging activities. It requires that an entity recognize all derivatives as
either assets or liabilities in the statement of financial position and
measures those instruments at fair value. While management has not determined
the impact of the new standard, it is not expected to be material.
In March 2000, the FASB issued FASB Interpretation No. 44 "Accounting for
Certain Transactions involving Stock Compensation" an interpretation of
Accounting Principles Board Opinion No. 25 (Opinion 25). This interpretation
clarifies the application of Opinion 25 for certain issues. This
interpretation is effective July 1, 2000. The effects of applying this
interpretation would be recognized on a prospective basis from July 1, 2000.
While management has not determined the impact of this interpretation, it is
not expected to be material.
FORWARD LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements relating
to such matters as anticipated financial performance and business prospects.
When used in this Quarterly Report, the words "anticipates," "expects," "may,"
"intend" and similar expressions are intended to be among the statements that
identify forward-looking statements. From time to time, the Company may also
publish forward-looking statements. The Private Securities Litigation Reform
Act of 1995 provides a safe harbor for forward-looking statements. In order to
comply with the terms of the safe harbor, the Company notes that a variety of
factors, including, but not limited to, foreign currency risks, political
instability, changes in foreign laws, regulations and tariffs, new
technologies, competition, customer and vendor relationships, seasonality,
inventory obsolescence and inventory availability, could cause the Company's
actual results and experience to differ materially from the anticipated results
or other expectations expressed in the Company's forward-looking statements.
PART II. OTHER INFORMATION
Item 6: Exhibits and Reports on Form 8-K.
(a) Exhibits - Exhibit 27. Financial Data Schedule
(a) Reports on Form 8-K. Two reports on Form 8-K were filed
during the quarter for which this report is filed. On March 14,
2000, Registrant received a letter from Mr. Thomas L. Brunner
(Brunner), wherein Brunner resigned as a director of Registrant,
effective as of that date. On March 27, 2000, Registrant received
a letter from Mr. Donald Horowitz (Horowitz), wherein Horowitz
resigned as a director of Registrant, effective as of that date.
Neither Brunner's nor Horowitz's letter of resignation described
or referred to any matter relating to the Registrant's operations,
policies or practices. Each letter was reported under Item
6, Resignation of Registrant's Directors, and a copy of each
letter was attached as an exhibit to the respective Form 8-K.
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.
ACETO CORPORATION
DATE MAY 10, 2000 BY (SIGNED) / BY DONALD HOROWITZ
Donald Horowitz, Chief Financial
Officer
DATE MAY 10, 2000 BY (SIGNED) / BY LEONARD S. SCHWARTZ
Leonard S. Schwartz, President