SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 May 31, 1998
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
1-6699
INTERNATIONAL MULTIFOODS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 41-0871880
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
200 East Lake Street, Wayzata, Minnesota 55391
(Address of principal executive offices) (Zip Code)
(612) 594-3300
(Registrant's telephone number, including area code)
(not applicable)
(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
The number of shares outstanding of the registrant's Common Stock, par
value $.10 per share, as of June 30, 1998 was 18,783,587.
PART I. FINANCIAL INFORMATION
-----------------------------
INTERNATIONAL MULTIFOODS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements of Operations
(unaudited)
(in thousands, except per share amounts)
THREE MONTHS ENDED
---------------------
May 31, May 31,
1998 1997
- ----------------------------------------------------------------------
Net sales $661,123 $667,186
Cost of materials and production (571,733) (573,687)
Delivery and distribution (41,106) (40,657)
- ----------------------------------------------------------------------
Gross profit 48,284 52,842
Selling, general and administrative (39,561) (45,315)
Unusual items (37,474) -
- ----------------------------------------------------------------------
Operating earnings (loss) (28,751) 7,527
Interest, net (3,768) (4,484)
Other income (expense), net (383) (186)
- ----------------------------------------------------------------------
Earnings (loss) before income taxes (32,902) 2,857
Income taxes 8,601 (857)
- ----------------------------------------------------------------------
Net earnings (loss) $(24,301) $ 2,000
======================================================================
Earnings (loss) per share of common stock:
Basic $ (1.30) $ .11
Diluted (1.30) .11
- ----------------------------------------------------------------------
Average shares of common stock outstanding:
Basic 18,765 18,016
Diluted 18,765 18,119
- ----------------------------------------------------------------------
Dividends per share of common stock $ .20 $ .20
- ----------------------------------------------------------------------
See accompanying notes to consolidated condensed financial statements.
INTERNATIONAL MULTIFOODS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(in thousands)
Condensed
from audited
financial
(Unaudited) statements
May 31, Feb. 28,
1998 1998
- ----------------------------------------------------------------------
Assets
- ------
Current assets:
Cash and cash equivalents $ 5,985 $ 10,363
Trade accounts receivable, net 143,065 144,201
Inventories 226,473 265,989
Other current assets 71,496 63,851
- ----------------------------------------------------------------------
Total current assets 447,019 484,404
- ----------------------------------------------------------------------
Property, plant and equipment, net 201,439 220,567
Goodwill, net 84,148 84,911
Other assets 34,829 37,504
- ----------------------------------------------------------------------
Total assets $767,435 $827,386
=======================================================================
Liabilities and Shareholders' Equity
- ------------------------------------
Current liabilities:
Notes payable $ 32,313 $ 1,025
Current portion of long-term debt 4,020 25,042
Accounts payable 185,005 217,500
Other current liabilities 58,899 68,856
- ----------------------------------------------------------------------
Total current liabilities 280,237 312,423
- ----------------------------------------------------------------------
Long-term debt 162,847 162,857
Employee benefits and other liabilities 43,911 42,753
- ----------------------------------------------------------------------
Total liabilities 486,995 518,033
- ----------------------------------------------------------------------
Shareholders' equity:
Common stock 2,184 2,184
Accumulated other comprehensive income:
Foreign currency translation adjustments (112,755) (110,812)
Minimum pension liability adjustment (3,499) (3,499)
Other shareholders' equity 394,510 421,480
- ----------------------------------------------------------------------
Total shareholders' equity 280,440 309,353
- ----------------------------------------------------------------------
Commitments and contingencies
- ----------------------------------------------------------------------
Total liabilities and shareholders' equity $767,435 $827,386
=======================================================================
See accompanying notes to consolidated condensed financial statements.
INTERNATIONAL MULTIFOODS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements of Cash Flows
(unaudited)
(in thousands)
THREE MONTHS ENDED
------------------
May 31, May 31,
1998 1997
- ----------------------------------------------------------------------
Cash flows from operations:
Net earnings (loss) $(24,301) $ 2,000
Adjustments to reconcile net earnings (loss)
to cash provided by (used for) operations:
Depreciation and amortization 6,936 7,506
Deferred income tax expense (benefit) (9,931) 408
Provision for losses on receivables 211 845
Provision for unusual charges 37,474 -
Changes in operating assets and liabilities:
Accounts receivable (4,597) 29,092
Inventories 38,296 3,358
Other current assets (2,772) (1,353)
Accounts payable (31,326) (28,714)
Other current liabilities (21,214) (9,633)
Other, net 1,465 504
- ----------------------------------------------------------------------
Cash provided by
(used for) operations (9,759) 4,013
- ----------------------------------------------------------------------
Cash flows from investing activities:
Capital expenditures (4,143) (4,045)
Proceeds from property disposals 1,224 198
- ----------------------------------------------------------------------
Cash used for investing activities (2,919) (3,847)
- ----------------------------------------------------------------------
Cash flows from financing activities:
Net increase in notes payable 32,188 2,321
Net decrease in long-term debt (20,700) -
Dividends paid (3,748) (3,635)
Proceeds from issuance of common stock 2,341 2,107
Purchase of treasury stock (1,723) (769)
Other, net (14) (15)
- -----------------------------------------------------------------------
Cash provided by
financing activities 8,344 9
- ----------------------------------------------------------------------
Effect of exchange rate changes on cash
and cash equivalents (44) 11
- ----------------------------------------------------------------------
Net increase (decrease)in cash and cash equivalents(4,378) 186
Cash and cash equivalents at beginning of period 10,363 8,753
- -----------------------------------------------------------------------
Cash and cash equivalents at end of period $ 5,985 $ 8,939
=======================================================================
See accompanying notes to consolidated condensed financial statements.
INTERNATIONAL MULTIFOODS CORPORATION AND SUBSIDIARIES
Notes to Consolidated Condensed Financial Statements
(unaudited)
(1) In the Company's opinion, the accompanying unaudited consolidated
condensed financial statements contain all adjustments (consisting of
only normal recurring adjustments, except as noted elsewhere in the
notes to the consolidated condensed financial statements) necessary to
present fairly its financial position as of May 31, 1998, and the
results of its operations and cash flows for the three months ended May
31, 1998 and 1997. These statements are condensed and, therefore, do
not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. The
statements should be read in conjunction with the consolidated
financial statements and footnotes included in the Company's Annual
Report on Form 10-K for the year ended February 28, 1998. The results
of operations for the three months ended May 31, 1998, are not
necessarily indicative of the results to be expected for the full year.
(2) Comprehensive income - In June 1997, the Financial Accounting
Standards Board (FASB) issued Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income" (SFAS 130). The
Company adopted SFAS 130 beginning in the first quarter of fiscal 1999.
Comprehensive income is defined as the change in the equity of a
business from all nonowner transactions and events. The Company's
comprehensive income is as follows (in thousands):
Three Months Ended
-------------------
May 31, May 31,
1998 1997
- -----------------------------------------------------------------------
Net earnings (loss) $(24,301) $ 2,000
Foreign currency translation adjustments (1,943) (489)
- -----------------------------------------------------------------------
Comprehensive income (loss) $(26,244) $ 1,511
=======================================================================
(3) Cost of sales - To more closely match costs with related revenues,
the Company classifies the inflation element inherent in interest rates
on Venezuelan local currency borrowings and the foreign exchange gains
and losses, which occur on such borrowings, as a component of cost of
sales. Accordingly, cost of sales increased $0.6 million and $0.5
million for the three months ended May 31, 1998 and 1997, respectively.
(4) Unusual items - The Company recognized unusual items that resulted
in pre-tax charges of $37.5 million ($27.1 million after-tax or $1.45
per share) and were comprised of the following.
(in millions) Segment
- -----------------------------------------------------------------------
Business consolidation plan $11.5 Multifoods Distribution Group
Asset impairment and
severance costs 7.2 North America Foods
Asset impairment, severance
and other costs 8.5 Venezuela Foods
Receivable write-offs 10.3 Divested Business
- -----------------------------------------------------------------------
Total $37.5
===================================
Management adopted a plan to consolidate its vending and foodservice
operations into a single business. The plan involves reducing the
number of distribution centers by nine, reducing the size of the work
force by approximately 300 people and reducing the vehicle fleet size
by up to 10 percent. The charge covers losses on lease commitments,
employee termination benefits, costs incurred for outside consultants,
and the write-down of leasehold improvements. The Company believes
that the actions associated with the plan will be completed over the
next 24 months.
The Company recognized a charge of $7.2 million for the write-down of
assets and the cost of work-force reductions associated with its
Canadian frozen bakery business. The charge resulted from the
Company's inability to sell the business at a price acceptable to the
Company and from the loss of a major customer in May 1998. In
accordance with Statement of Financial Accounting Standards No. 121,
the Company evaluated the carrying value of its long-lived assets as a
result of these recent events and recognized a $5.8 million charge for
asset impairment. In addition, the Company recognized a charge of $1.4
million primarily for employee termination benefits.
The Company recognized a charge of $8.5 million associated with its
Venezuela Foods business. The charge included a $5.3 million asset
write-down, which resulted from the Company's decision in May 1998 to
close a durum mill. In accordance with Statement of Financial
Accounting Standards No. 121, the Company evaluated the recoverability
of the carrying value of its durum mill as a result of its decision to
close and sell the facility. The Company estimated the fair value of
the facility based on information received from prospective buyers. In
addition, unusual charges included $3.2 million primarily for costs
associated with employee severance liabilities which resulted from a
new Venezuelan law and costs associated with the departure of the
business segment's former president.
The Company recognized an unusual charge of $10.3 million for the
write-off of receivables from a major customer of its former food
exporting business. The Company had negotiated an exit agreement with
this customer in fiscal 1998, which provided for payments to the
Company for amounts due under notes and accounts receivable. The
agreement had been restructured on several occasions because of the
customer's financial difficulties. As a result of uncertainties with
respect to the customer's ability to meet its obligations, the Company
recognized a $5 million charge in the fourth quarter of fiscal 1998.
In June 1998, the Company was notified by the customer that it would
not meet its obligations under the restructured exit agreement. The
Company believes the customer's financial problems were caused by its
difficulty in moving product into the Russian marketplace and were
complicated by recent economic difficulties in Russia. Accordingly,
the Company believes that remaining amounts due from the customer are
not collectible.
(5) Interest, net, consisted of the following (in thousands):
Three Months Ended
-------------------
May 31, May 31,
1998 1997
- -----------------------------------------------------------------------
Interest expense $3,833 $5,422
Capitalized interest - (9)
Non-operating interest income (65) (929)
- -----------------------------------------------------------------------
Interest, net $3,768 $4,484
=======================================================================
Cash payments for interest, net of amounts capitalized, were $6.0
million and $6.5 million for the three months ended May 31, 1998 and
1997, respectively.
(6) Income taxes - Cash payments for income taxes for the three months
ended May 31, 1998 and 1997, were $6.7 million and $3.8 million,
respectively.
(7) Supplemental balance sheet information (in thousands)
May 31, Feb. 28,
1998 1998
- ----------------------------------------------------------------------
Trade accounts receivable, net:
Trade $146,731 $148,947
Allowance for doubtful accounts (3,666) (4,746)
- ----------------------------------------------------------------------
Total trade accounts receivable, net $143,065 $144,201
======================================================================
Inventories:
Raw materials, excluding grain $ 20,920 $ 19,823
Grain 65,235 87,769
Finished and in-process goods 132,662 151,894
Packages and supplies 7,656 6,503
- ----------------------------------------------------------------------
Total inventories $226,473 $265,989
======================================================================
Property, plant and equipment, net:
Land $ 13,723 $ 15,123
Buildings and improvements 91,022 98,204
Machinery and equipment 225,252 235,906
Transportation equipment 4,213 5,883
Improvements in progress 17,076 16,969
- ----------------------------------------------------------------------
351,286 372,085
Accumulated depreciation (149,847) (151,518)
- ----------------------------------------------------------------------
Total property, plant and equipment, net $201,439 $220,567
======================================================================
(8) Segment information (in millions)
Operating
Net Operating Unusual Earnings
Sales Costs Items (Loss)
- ----------------------------------------------------------------------
Three Months Ended May 31, 1998
Multifoods Distribution Group $454.7 $(448.2) $(11.5) $ (5.0)
North America Foods 110.5 (105.9) (7.2) (2.6)
Venezuela Foods 95.9 (97.2) (8.5) (9.8)
Divested Business - .8 (10.3) (9.5)
Corporate Expenses - (1.9) - (1.9)
- ----------------------------------------------------------------------
Total $661.1 $(652.4) $(37.5) $(28.8)
======================================================================
Three Months Ended May 31, 1997
Multifoods Distribution Group $446.7 $(443.2) $ - $ 3.5
North America Foods 115.5 (112.5) - 3.0
Venezuela Foods 102.3 (99.5) - 2.8
Divested Business 2.7 (2.1) - .6
Corporate Expenses - (2.4) - (2.4)
- ---------------------------------------------------------------------
Total $667.2 $(659.7) $ - $ 7.5
=====================================================================
(9) Contingencies - In fiscal 1998, the Company was notified that
approximately $6 million in Company-owned inventory was stolen from
a ship in the port of St. Petersburg, Russia. The ship had been
chartered by the major customer of the Company's former food exporting
business. The Company believes, based on the facts known to date, that
the loss is covered by insurance. If the loss from the theft of
product is not covered by insurance, the Company would likely recognize
a material charge to its results of operations.
INTERNATIONAL MULTIFOODS CORPORATION AND SUBSIDIARIES
Management's Discussion and Analysis of Results of
Operations and Financial Condition
(Unaudited)
Results of Operations:
- ----------------------
For the three months ended May 31, 1998, compared with
- -------------------------------------------------------
the corresponding prior period
- ------------------------------
Overview
The Company reported a consolidated first quarter net loss of $24.3
million, or $1.30 per diluted share, compared with net earnings of $2
million, or 11 cents per diluted share, a year ago. The net loss was
the result of after-tax unusual charges of $27.1 million, or $1.45 per
diluted share. Excluding the unusual charges, fiscal 1999 net earnings
increased to $2.8 million, or 15 cents per diluted share. This
increase resulted from higher operating earnings in the Company's
Multifoods Distribution Group and North America Foods business
segments, which offset the decline in Venezuela Foods' operating
results.
Unusual charges in fiscal 1999 resulted from the Company's plan to
consolidate its distribution businesses and to close a durum mill in
Venezuela. In addition, unusual charges included the write-off of
receivables from a major customer of the Company's former food
exporting business and costs associated with the Canadian frozen bakery
business. The Company expects that savings achieved in fiscal 1999
from these actions will be offset by relocation costs and other one-
time costs of the business consolidation, which will be expensed as
incurred. The Company, however, expects these actions to improve
operating earnings by $5 million to $7 million in fiscal 2000 and $11
million to $14 million in fiscal 2001. Further discussion of unusual
charges follows in Segment Results and in Note 4 to the consolidated
condensed financial statements.
Net sales for fiscal 1999 declined 1% to $661.1 million as higher
Multifoods Distribution Group net sales were offset by decreases in
North America Foods and Venezuela Foods.
Segment Results
Multifoods Distribution Group: Net sales increased 2% to $454.7 million
as a result of higher sales volumes to vending distribution's
independent customer segment. Net sales in foodservice distribution
were flat as increased sales to the pizza and Mexican customer segments
were offset by the Company's decision to relinquish several low margin
accounts. Operating earnings before unusual items increased 86% to
$6.5 million, primarily as a result of lower bad debt and
administrative expenses.
In fiscal 1999, the Company recognized an $11.5 million unusual charge
for actions associated with the Company's plan to consolidate its
vending and foodservice distribution operations into a single business.
The plan involves reducing the number of distribution centers by nine,
reducing the work force by approximately 300 employees and reducing the
vehicle fleet size by up to 10 percent. The charges cover losses on
lease commitments, employee termination benefits, costs incurred for
outside consultants and the write-down of leasehold improvements.
North America Foods: Net sales declined 4% to $110.5 million due to
lower prices that resulted from a reduction in commodity costs and from
unfavorable currency translation. The decline in net sales was
partially offset by higher sales volumes. Operating earnings before
unusual items increased 53% to $4.6 million. The increase resulted
from the higher sales volumes, improved gross margins, and lower
selling and administrative expenses. The increase in gross margins was
the result of a more favorable product mix and lower ingredient costs.
In fiscal 1999, the Company recognized an unusual charge of $7.2
million for the write-down of assets and the cost of work-force
reductions associated with its Canadian frozen bakery business. The
charge resulted from the Company's inability to sell the business at a
price acceptable to the Company and from the loss of a major customer
in May 1998. In accordance with Statement of Financial Accounting
Standards No. 121, the Company evaluated the carrying value of its
long-lived assets as a result of these recent events. The Company
estimated the fair value of the assets based on information received
from prospective buyers and in consideration of the loss of the major
customer. Accordingly, the Company recognized a $5.8 million charge to
reduce the carrying value of the assets. In addition, the unusual
charge included $1.4 million primarily for employee termination
benefits.
Venezuela Foods: Net sales declined 6% to $95.9 million primarily as a
result of a substantial decrease in consumer corn flour volumes.
Volumes were affected by a decline in the amount of corn flour the
Company was awarded to provide under a Venezuelan government subsidy
program. In the prior year first quarter, the Company supplied 100% of
the corn flour for this program. The decline in net sales was
partially offset by increased animal feed sales volumes that resulted
from a new customer. Excluding unusual charges, the business segment
recognized an operating loss of $1.3 million, compared with operating
earnings of $2.8 million last year. The operating loss resulted
primarily from a significant decline in gross margins and the lower
corn flour volumes. The gross margin decline resulted from difficult
economic conditions that prevented the Company from raising prices to
cover higher raw material and operating costs.
In fiscal 1999, the Company recognized an unusual charge of $8.5
million associated with its Venezuela Foods business. The charge
included a $5.3 million asset write-down, which resulted from the
Company's decision in May 1998 to close a durum mill. In accordance
with Statement of Financial Accounting Standards No. 121, the Company
evaluated the recoverability of the carrying value of its durum mill as
a result of its decision to close and sell the facility. The Company
estimated the fair value of the facility based on information received
from prospective buyers. In addition, the unusual charge included $3.2
million primarily for costs associated with employee severance
liabilities which resulted from a new Venezuelan law and costs
associated with the departure of the business segment's former
president.
The Company expects that the difficult economic and competitive
environment in Venezuela will continue to adversely affect the
Company's Venezuela Foods' operating results in fiscal 1999. In order
to improve operating performance, the Company is continuing to evaluate
additional opportunities to reduce costs and focus on strategies that
provide the highest possible returns to shareholders. As a result,
additional actions taken by the Company could result in material
unusual charges to the Company's results of operations.
Divested Business: The Company's Divested Business segment represents
its food exporting business, which the Company exited in fiscal 1998.
Operating earnings before unusual charges were $0.8 million, which
represented a refund of customs tax paid in prior years.
In fiscal 1999, the Company recognized an unusual charge of $10.3
million for the write-off of receivables from a major customer of its
former food exporting business. The Company had negotiated an exit
agreement with this customer in fiscal 1998, which provided for
payments to the Company for amounts due under notes and accounts
receivable. The agreement had been restructured on several occasions
because of the customer's financial difficulties. As a result of
uncertainties with respect to the customer's ability to meet its
obligations, the Company recognized a $5 million charge in the fourth
quarter of fiscal 1998. In June 1998, the Company was notified by the
customer that it would not be able to meet its obligations under the
restructured exit agreement. The Company believes the customer's
financial problems were caused by its difficulty in moving product into
the Russian marketplace and were complicated by recent economic
difficulties in Russia. Accordingly, the Company believes that
remaining amounts due from the customer are not collectible.
Non-operating Expense and Income
Net interest expense declined to $3.8 million, compared with $4.5
million last year as a result of lower debt levels.
Income Taxes
The effective tax rate on earnings before unusual items was 38% in
fiscal 1999, compared with 30% in fiscal 1998. The increase was due to
the substantial decline in Venezuela Foods' operating results, which
had a low effective tax rate in prior years. If fiscal 1999 Venezuela
Foods operating results fall below currently projected levels, the
Company's overall effective tax rate will increase from its current
level.
Financial Condition:
The debt-to-total capitalization ratio increased to 42% at May 31,
1998, compared with 38% at February 28, 1998, primarily as a result of
increased working capital requirements. Working capital requirements
increased as a result of the timing of payments. The increase in
working capital levels was partially offset by lower inventory
balances, which declined primarily because of seasonal factors in
Canada and Venezuela, and the emphasis on reducing inventory levels
throughout the Company.
The Company's $37.5 million unusual charge included $25.3 million of
non-cash costs and $12.2 million of cash outlays that are expected to
occur over the next 24 months. In addition, the Company estimates it
will incur capital expenditures of $15 million to $20 million over the
next 24 months associated with upgrading the remaining distribution
warehouse facilities. The Company plans to use future cash flows from
operations along with available external financing to fund these
estimated cash outlays.
Cautionary Statement Relevant to Forward-Looking Information
This document contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. In
addition, the Company and its representatives may from time-to-time
make written and oral forward-looking statements. These forward-
looking statements are based on current expectations or beliefs,
including, but not limited to, statements concerning the Company's
operations and financial performance and condition. For this purpose,
statements that are not statements of historical fact may be deemed to
be forward-looking statements. The Company cautions that these
statements by their nature involve risks and uncertainties, and actual
results may differ materially depending on a variety of important
factors, including, among others, the impact of competitive products
and pricing; market conditions and weather patterns that may affect the
costs of grain and other raw materials; changes in laws and
regulations; the inability of the Company to either resolve the
Company's "Year 2000" issues or to accurately estimate the cost
associated with "Year 2000" compliance; economic and political
conditions in Venezuela, including inflation, currency volatility,
possible limitations on foreign investment, exchangeability of
currency, dividend repatriation and changes in existing tax laws; the
inability of the Company to collect insurance proceeds related to the
theft of inventory from the port of St. Petersburg, Russia;
fluctuations in foreign exchange rates; the Company's ability to
realize the earnings benefits from the integration of its distribution
businesses; and other factors as may be discussed in the Company's
report on Form 10-K for the year ended February 28, 1998, and other
reports filed with the Securities and Exchange Commission.
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10. Agreement dated June 15, 1998 between Molinos
Nacionales, C.A. and Fidias Robuste regarding
separation from employment with the Company.
11. Computation of Earnings (Loss) Per Common Share.
12. Computation of Ratio of Earnings to Fixed Charges.
27. Financial Data Schedule.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended May 31, 1998.
SIGNATURE
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.
INTERNATIONAL MULTIFOODS CORPORATION
Date: July 13, 1998 By:/s/ William L. Trubeck
----------------------------
William L. Trubeck
Senior Vice President - Finance and
Chief Financial Officer and
President Latin America Operations
(Principal Financial Officer and
Duly Authorized Officer)
EXHIBIT INDEX
10. Agreement dated June 15, 1998 between Molinos
Nacionales, C.A. and Fidias Robuste regarding
separation from employment with the Company.
11. Computation of Earnings (Loss) Per Common Share.
12. Computation of Ratio of Earnings to Fixed Charges.
27. Financial Data Schedule.