__________________________________________________________________
UNITED STATES
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 quarter period ended March 31, 1995
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 0-15167
TRANS LEASING INTERNATIONAL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 36-2747735
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
3000 DUNDEE ROAD, NORTHBROOK, ILLINOIS 60062
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code (708) 272-1000
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 of Common Stock, Par Value $.01 Per
Share, of the Registrant outstanding as of May 10, 1995 was
4,211,975.
___________________________________________________________________
Total number of pages: 15
TRANS LEASING INTERNATIONAL, INC.
_________________________________
INDEX
Page
Number
-------
PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
Independent Accountants' Review Report 4
Condensed Consolidated Statements of Operations 5
Three-month and nine-month
periods ended March 31, 1995
and 1994 (unaudited)
Condensed Consolidated Balance Sheets 6
March 31, 1995
(unaudited)
and June 30, 1994
Condensed Consolidated Statements
of Cash Flows 7
Nine-month periods ended
March 31, 1995 and 1994
(unaudited)
Notes to Condensed Consolidated
Financial Statements 8
(unaudited)
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 14
-2-
PART I FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
-3-
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
______________________________________
To the Stockholders and Board of Directors
Trans Leasing International, Inc.
Northbrook, Illinois
We have reviewed the accompanying condensed consolidated balance
sheet of Trans Leasing International, Inc. as of March 31, 1995,
and the related condensed consolidated statements of operations and
cash flows for the three-month and nine-month periods ended March
31, 1995 and 1994. These financial statements are the
responsibility of the Corporation's management.
We conducted our review in accordance with standards established by
the American Institute of Certified Public Accountants. A review
of interim financial information consists principally of applying
analytical procedures to financial data and making inquiries of
persons responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which
is the expression of an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to such condensed consolidated financial
statements for them to be in conformity with generally accepted
accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet of Trans Leasing
International, Inc. as of June 30, 1994, and the related
consolidated statements of operations, stockholders' equity, and
cash flows for the year then ended (not presented herein); and in
our report dated August 11, 1994 (September 28, 1994 as to Note N),
we expressed an unqualified opinion on those consolidated financial
statements. In our opinion, the information set forth in the
accompanying condensed consolidated balance sheet as of June 30,
1994 is fairly stated, in all material respects, in relation to the
consolidated balance sheet from which it has been derived.
DELOITTE & TOUCHE LLP
Chicago, Illinois
May 10, 1995
-4-
TRANS LEASING INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three months Nine months
ended ended
March 31 March 31
1995 1994 1995 1994
-------------- -------------- -------------- --------------
REVENUES:
Lease income $7,331,000 $6,813,000 $21,449,000 $19,853,000
Other 290,000 141,000 667,000 370,000
-------------- -------------- -------------- --------------
Total Revenues 7,621,000 6,954,000 22,116,000 20,223,000
COSTS AND EXPENSES:
Interest 3,387,000 2,907,000 9,930,000 8,770,000
General and administrative 2,485,000 2,266,000 7,053,000 6,509,000
Provision for uncollectible accounts 1,133,000 948,000 3,239,000 4,694,000
-------------- -------------- -------------- --------------
Total Costs and Expenses 7,005,000 6,121,000 20,222,000 19,973,000
-------------- -------------- -------------- --------------
EARNINGS BEFORE INCOME
TAXES AND CUMULATIVE EFFECT
OF A CHANGE IN ACCOUNTING 616,000 833,000 1,894,000 250,000
INCOME TAXES 236,000 319,000 725,000 96,000
-------------- -------------- -------------- --------------
EARNINGS BEFORE CUMULATIVE
EFFECT OF A CHANGE
IN ACCOUNTING 380,000 514,000 1,169,000 154,000
CUMULATIVE EFFECT OF A CHANGE IN
ACCOUNTING FOR INCOME TAXES 155,000
-------------- -------------- -------------- --------------
NET EARNINGS (LOSS) $380,000 $514,000 $1,169,000 ($1,000)
============== ============== ============== ==============
EARNINGS PER COMMON SHARE:
EARNINGS BEFORE CUMULATIVE
EFFECT OF A CHANGE
IN ACCOUNTING $0.09 $0.12 $0.27 $0.03
CUMULATIVE EFFECT OF A CHANGE IN
ACCOUNTING FOR INCOME TAXES (0.03)
-------------- -------------- -------------- --------------
NET EARNINGS $0.09 $0.12 $0.27 $0.00
============== ============== ============== ==============
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 4,224,900 4,371,900 4,317,500 4,371,900
See notes to condensed consolidated financial statements.
-5-
TRANS LEASING INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, June 30,
1995 1994
-------------- --------------
ASSETS (UNAUDITED)
CASH $4,094,000 $3,297,000
RESTRICTED CASH 12,921,000 8,984,000
NET INVESTMENT IN DIRECT FINANCE LEASES:
Future minimum lease payments 208,113,000 186,287,000
Estimated unguaranteed residual value 19,258,000 18,201,000
-------------- --------------
227,371,000 204,488,000
Less: Unearned income (37,679,000) (33,624,000)
Allowance for uncollectible accounts (5,793,000) (4,047,000)
-------------- --------------
183,899,000 166,817,000
-------------- --------------
LEASE FINANCING RECEIVABLES, less allowance for
uncollectible accounts of $138,000 and $141,000, respectively 4,832,000 6,352,000
PROPERTY AND EQUIPMENT, net of accumulated
depreciation 4,751,000 2,019,000
INCOME TAXES RECOVERABLE 658,000 1,951,000
OTHER ASSETS 5,232,000 4,315,000
-------------- --------------
$216,387,000 $193,735,000
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
ACCOUNTS PAYABLE AND ACCRUED EXPENSES $6,674,000 $5,288,000
NOTES PAYABLE TO FINANCIAL INSTITUTIONS 99,000,000 60,657,000
LEASE-BACKED OBLIGATIONS 60,538,000 78,184,000
SUBORDINATED OBLIGATIONS 22,950,000 23,000,000
DEFERRED INCOME TAXES 1,827,000 1,827,000
STOCKHOLDERS' EQUITY:
Preferred stock, par value $1.00;
authorized 2,500,000 shares; none issued
Common stock, par value $.01; authorized
10,000,000 shares; issued 4,798,500 shares 48,000 48,000
Additional paid-in capital 9,879,000 9,879,000
Retained earnings 17,199,000 16,030,000
Less 586,525 and 426,600 shares held in treasury,
at cost, respectively (1,728,000) (1,178,000)
-------------- --------------
TOTAL STOCKHOLDERS' EQUITY 25,398,000 24,779,000
-------------- --------------
$216,387,000 $193,735,000
============== ==============
See notes to condensed consolidated financial statements.
-6-
TRANS LEASING INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine months
ended
March 31
1995 1994
-------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss) $1,169,000 ($1,000)
Adjustments to reconcile net earnings (loss) to
net cash provided by operating activities:
Leasing costs, primarily provision
for uncollectible accounts and
amortization of initial direct costs 4,794,000 6,145,000
Depreciation and amortization 532,000 325,000
Initial direct costs paid (1,760,000) (1,442,000)
Deferred income taxes 155,000
Changes in:
Accounts payable and accrued expenses 1,386,000 1,329,000
Income taxes recoverable 1,293,000 (1,014,000)
Other assets (992,000) (1,683,000)
Other (13,000) 50,000
-------------- --------------
Net cash provided by operating activities 6,409,000 3,864,000
-------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Principal collections on leases 55,258,000 47,111,000
Equipment purchased for leasing (76,896,000) (67,208,000)
Purchase of lease financing receivables (860,000) (2,318,000)
Purchase of property and equipment (3,413,000) (421,000)
Disposal of property and equipment 202,000 88,000
-------------- --------------
Net cash used in investing activities (25,709,000) (22,748,000)
-------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of notes payable to financial institutions 95,600,000 49,000,000
Repayment of notes payable to financial institutions (57,257,000) (15,711,000)
Issuance of lease-backed obligations 50,453,000
Repayment of lease-backed obligations (68,099,000) (14,015,000)
Repayment of subordinated obligations (50,000)
Purchase of treasury stock (550,000)
-------------- --------------
Net cash provided by financing activities 20,097,000 19,274,000
-------------- --------------
NET (DECREASE) INCREASE IN CASH 797,000 390,000
CASH, beginning of period 3,297,000 2,269,000
-------------- --------------
CASH, end of period $4,094,000 $2,659,000
============== ==============
See notes to condensed consolidated financial statements.
-7-
TRANS LEASING INTERNATIONAL, INC.
_________________________________
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
___________________________________________________
(Unaudited)
Note A - Financial Statements:
The condensed consolidated balance sheet as of March 31, 1995,
and the condensed consolidated statements of operations and cash
flows for the three-month and nine-month periods ended March 31,
1995 and 1994, have been prepared by the Company without audit.
The condensed consolidated balance sheet at June 30, 1994, has been
taken from the audited financial statements of that date. In the
opinion of management, all adjustments (which include only normal
recurring adjustments) necessary to present fairly the financial
position at March 31, 1995, and the results of operations and cash
flows for the periods presented have been made. The results of
operations for the period ended March 31, 1995, are not necessarily
indicative of the operating results for the full year.
Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally
accepted accounting principles have been omitted. It is suggested
that these financial statements be read in conjunction with the
financial statements and notes thereto included in the Company's
June 30, 1994 annual report to stockholders.
Certain 1994 amounts have been reclassified to conform with
the presentation used in the 1995 financial statements.
Note B - Change in Accounting for Income Taxes:
-----------------------------------------------
The Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 109, "Accounting for Income Taxes",
effective July 1, 1993. This statement supersedes the provisions
of Accounting Principles Board Opinion No. 11, "Accounting for
Income Taxes", under which the Company had previously been
recognizing income tax expense. The cumulative effect of adopting
SFAS No. 109 on the Company's financial statements was to decrease
net earnings by $155,000 ($.03 per share) for the first nine months
of fiscal 1994.
Note C - Accounting for Interest Rate Swap Agreement:
-----------------------------------------------------
The Company had an amortizing interest rate swap agreement
with a commercial bank to effectively fix the interest rate on the
Company's floating rate (LIBOR plus 1.50%) unsecured senior notes
due March 31, 1995 at a rate of 9.39%. The swap expired upon the
maturity of these notes on March 31, 1995.
The Company has an amortizing interest rate collar agreement
which effectively fixes the interest rate on its floating-rate
lease-backed notes issued October 1992 at 5.75%. The notional
amount of the collar declines over time to match the scheduled
amortization of the related note and, as of March 31, 1995, is
$13,162,000.
-8-
Interest received from or paid to the counter-parties under
these agreements is netted against or added to interest expense on
the Company's income statement. There is no market risk associated
with these agreements as they are used to hedge floating-rate debt.
The Company is exposed to potential non-performance by any of the
counter-parties to the interest rate agreements, though the Company
does not anticipate non-performance due to the strong financial
position of the counter-parties.
Note D - Subsequent Event:
--------------------------
On May 11, 1995 the Board of Directors approved the payment of
a quarterly cash dividend in the amount of $.03 per share. The
dividend will be paid on June 9, 1995 to holders of record as of
May 26, 1995.
-9-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
GENERAL
-------
The Company's operations are comprised almost exclusively of
lease financing. The Company realizes net earnings to the extent
that lease income, net of a provision for uncollectible accounts,
and related fees exceeds interest expense and general and
administrative expenses. Interest expense is the single largest
expense of the Company and is a function of the amounts borrowed by
the Company to finance its lease portfolio and the interest rates
associated with those borrowings. The difference between the lease
income and the cost of funds to finance the leases is generally
referred to as the "spread" in the portfolio.
Substantially all of the Company's lease receivables are
written at a fixed rate for a fixed term. The Company's borrowings
on the other hand are at both fixed and variable rates of interest.
The Company borrows under one or more revolving credit facilities
at variable interest rates (see "Liquidity and Capital Resources")
and from time to time periodically refinances that debt on a
fixed-rate basis through private placements of institutional debt,
a fixed-rate loan option in the revolving credit agreement,
securitization of lease receivables or the sale of debt in the
public market. To the extent the Company refinances with
fixed-rate debt, the Company locks in the spread in its portfolio.
The Company has experienced growth in both the dollar amount
and number of new lease receivables added to its portfolio during
each of the past five fiscal years. In analyzing the Company's
financial statements, it is important to understand the impact of
lease receivable growth during an accounting period on lease income
and net earnings.
For financial reporting purposes, substantially all of the
Company's leases are classified as direct finance leases and are
accounted for in accordance with Statement of Financial Accounting
Standards ("SFAS") No. 13. The Company accounts for its investment
in direct finance leases by recording on the balance sheet the
total minimum lease payments receivable plus the estimated residual
value of leased equipment less the unearned lease income. Unearned
lease income represents the excess of the total minimum lease
payments plus the estimated residual value expected to be realized
at the end of the lease term over the cost of the related
equipment. Unearned lease income is recognized as revenue over the
term of the lease by a method which approximates the "interest"
method, i.e., application of a constant periodic rate of return to
the declining net investment in each lease. As a result, during a
period in which the Company realizes growth in new lease
receivables, lease income should also increase, but at a lesser
rate.
Initial direct costs incurred in consummating a lease,
principally commissions, are capitalized as part of the net
investment in direct finance leases and amortized over the lease
term as a reduction in the yield. An allowance for doubtful
accounts is provided over the terms of the underlying leases as the
leases are determined to be uncollectible.
-10-
RESULTS OF OPERATIONS
---------------------
Lease income increased $1,596,000 (8.0%) in the first nine
months of fiscal 1995 compared with the like period of fiscal 1994,
and $518,000 (7.6%) in the third quarter of fiscal 1995 as compared
with the third quarter of fiscal 1994, due primarily to a 12.8%
increase in the net investment in direct finance leases. In
addition, the increase in lease income is attributable to an
increase in lease-related fees of $299,000 (16.0%) in the first
nine months of fiscal 1995 and $102,000 (14.9%) in the third
quarter of fiscal 1995 as compared with the comparable fiscal 1994
periods.
The growth in the Company's lease portfolio is the result of
an increase in the dollar amount of leases originated. The Company
believes that the dollar amount of leases originated has increased
primarily as a result of its increased marketing and selling
activities, greater name recognition of LeaseCard in the
marketplace, the introduction of new products by equipment
manufacturers and reductions in lease rates which have enabled the
Company to attract additional new business. Lease-related fees,
primarily delinquency charges and lease continuance fees, have
increased as a result of the growth in the size of the Company's
lease portfolio.
Interest expense increased $1,160,000 (13.2%) in the first
nine months of fiscal 1995 as compared with the like period of the
prior year, and $480,000 (16.5%) in the third quarter of fiscal
1995 as compared with the third quarter of fiscal 1994. This
increase resulted from an increase in the amounts borrowed to
finance the growth in the lease portfolio and the increase in
interest rates. Interest expense as a percent of lease income
increased to 46.2% and 46.3% for the three months and nine months
ended March 31, 1995, respectively, from 42.7% and 44.2% for the
comparable fiscal 1994 periods, which has reduced the spread from
fiscal 1994. Interest expense is reported net of the impact of
interest rate swaps used to fix the rate on floating rate
financings, the effect of which was to increase interest expense by
$5,000 and $60,000 for the three month and nine month periods,
respectively, ending March 31, 1995.
General and administrative expenses increased $544,000 (8.4%)
in the nine-month period ended March 31, 1995, compared with the
like period of the prior year, and $219,000 (9.7%) in the third
quarter of fiscal 1995 compared with the third quarter of fiscal
1994. General and administrative expenses as a percent of lease
income increased slightly to 33.9% and 32.9% for the three months
and nine months ended March 31, 1995, respectively, from 33.3% and
32.8% for the comparable fiscal 1994 periods.
The provision for uncollectible accounts decreased $1,455,000
(31.0%) in the nine-month period ended March 31, 1995, compared
with the like period of the prior year, and increased by $185,000
(19.5%) in the third quarter of fiscal 1995 as compared with the
third quarter of fiscal 1994. The decrease in the nine-month
period ended March 31, 1995 is the result of an increase in the
provision for uncollectible accounts in fiscal 1994 of $1,696,000
primarily due to the write-off of one large lessee account which
represented approximately one percent of the Company's portfolio.
The write-off in fiscal 1994 of this one account does not reflect a
deterioration in the performance of the remainder of the portfolio
which continues to perform consistent with historical norms.
-11-
Earnings before income taxes and the cumulative effect of a
change in accounting for the first nine months of fiscal 1995 were
$1,894,000 compared with $250,000 for the like period of the prior
year, and were $616,000 for the third quarter of fiscal 1995
compared with $833,000 for the like quarter of the prior year.
Earnings before the cumulative effect of a change in accounting for
the first nine months of fiscal 1995 were $1,169,000, or $.27 per
share, compared with $154,000, or $.03 per share, for the like
period of the prior year. For the third quarter of fiscal 1995,
earnings before the cumulative effect of a change in accounting
were $380,000, or $.09 per share, compared with $514,000, or $.12
per share, for the like quarter of the prior year. The increase in
earnings before the cumulative effect of a change in accounting for
the first nine months of fiscal 1995 was primarily due to the
decrease in the provision for uncollectible accounts, as discussed
above.
Net earnings for the first nine months of fiscal 1995 were
$1,169,000, or $.27 per share, compared with a net loss of $1,000
for the like period of the prior year. For the third quarter of
fiscal 1995, net earnings were $380,000, or $.09 per share,
compared with $514,000, or $.12 per share, for the like quarter of
the prior year. The increase in the net earnings for the first
nine months of fiscal 1995 was primarily due to the decrease in the
provision for uncollectible accounts, as discussed above, and the
adoption of SFAS No. 109 in fiscal 1994 .
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
The Company has principally financed its operations, including
the growth of its lease portfolio, through borrowings under its
revolving credit agreements, issuance of debt and lease-backed
obligations in both the institutional private placement and public
markets, principal collections on leases and cash provided from
operations.
Net cash used in investing activities, which was $25.7 million
in the first nine months of fiscal 1995 and $22.7 million in the
first nine months of fiscal 1994, generally represents the excess
of equipment purchased for leasing over principal collections on
leases. Net cash provided by financing activities (the excess of
borrowings under the revolving credit agreement and issuance of
debt and lease-backed obligations over repayments of these debt
instruments) was $20.1 million in the first nine months of fiscal
1995 and $19.3 million in the first nine months of fiscal 1994.
The remaining funds used in investing activities were provided by
operating cash flows.
The Company is in the process of updating its management
information system. The Company expects to complete the upgrade in
fiscal 1995 and anticipates additional expenditures of $23,000 for
new software, which is already committed. Also, as of March 31,
1995, the Company had outstanding commitments to purchase
equipment, which it intended to lease, with an aggregate purchase
price of $6.1 million.
The Company borrows under its revolving credit agreements from
time to time to fund its operations. As the Company has approached
full utilization under these agreements, it has sold long-term debt
and lease-backed obligations in both the institutional private
placement and public markets and used the proceeds to reduce its
revolving credit borrowings. These long-term debt and lease-backed
obligations are issued either with fixed interest rates or with
floating interest rates combined with interest rate hedges to lock
in a fixed rate. The Company intends to continue to issue
long-term debt and lease-backed obligations in both the
institutional private placement and public markets to reduce its
exposure to floating rates associated with revolving credit
borrowings.
-12-
Through March 21, 1995, the Company's revolving credit
agreement permitted the Company to borrow up to $50 million on an
unsecured basis at which time the maximum borrowing was increased
to $60 million. On April 18, one of the Company's finance
subsidiaries, TL Lease Funding Corp. IV, established and fully
utilized a $60 million securitized revolving credit facility.
Proceeds from this new facility were used primarily to pay down the
Company's unsecured revolver, the maximum borrowing under which was
concurrently reduced to $15 million. As of May 10, 1995, the
outstanding loans under the unsecured revolving credit facility
were $6 million and unused borrowing capacity was $9 million.
Also, as of May 10, 1995, the outstanding loans under the
securitized revolving credit facility were $60 million with no
unused borrowing capacity.
The Company believes that the unused credit facility,
increasing principal payments on leases and continued placement of
debt and lease-backed obligations in either the public or private
markets will provide adequate capital resources and liquidity for
the Company to fund its operations and debt maturities.
On November 16, 1994, the Board of Directors authorized the
repurchase by the Company of up to 1,000,000 shares of its common
stock. The Board determined that this stock repurchase program is
in the best interests of the Company and its shareholders given the
significant discount to book value at which the Company's common
stock is currently trading. As of March 31, 1995, 159,925 shares
have been repurchased at a total cost of $550,000 under this
program.
On May 11, 1995 the Board of Directors approved the payment of
a quarterly cash dividend in the amount of $.03 per share. The
dividend will be paid on June 9, 1995 to holders of record as of
May 26, 1995.
-13-
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) List of Exhibits Filed with Form 10-Q:
______________________________________
10.40 Revolving Credit and Term Loan and Security
Agreement
10.41 Limited Recourse Agreement
10.42 Servicing Agreement
10.43 Contribution and Sale Agreement
10.44 Amendment No. 2 to Credit Agreement
27 Financial Data Schedule
(b) Reports on Form 8-K
-------------------
No reports were filed on Form 8-K during the fiscal
quarter ended March 31, 1995.
-14-
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.
TRANS LEASING INTERNATIONAL, INC.
_________________________________
(Registrant)
DATE: May 11, 1995 RICHARD GROSSMAN
_________________________________
Richard Grossman
President, Chief Executive Officer,
Chairman of the Board of Directors
DATE: May 11, 1995 NORMAN SMAGLEY
_________________________________
Norman Smagley
Vice President, Finance, and
Chief Financial Officer
-15-