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 quarterly and six month periods ended: April 30, 1999
OR
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition from ________________ to ________________
Commission File number: 0-13063
AUTOTOTE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 81-0422894
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
750 Lexington Avenue, New York, New York 10022
----------------------------------------------
(Address of principal executive offices)
(Zip Code)
(212)-754-2233
--------------
(Registrant's telephone number, including area code)
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 |_|
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of June 8, 1999:
Class A Common Stock: 36,173,026
Class B Common Stock: None
Page 1 of 20
AUTOTOTE CORPORATION AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND OTHER INFORMATION
QUARTER ENDED APRIL 30, 1999
Page
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements:
Balance Sheets as of April 30, 1999
and October 31, 1998 3
Statements of Operations for the Three Months Ended
April 30, 1999 and 1998 4
Statements of Operations for the Six Months Ended
April 30, 1999 and 1998 5
Statements of Cash Flows for the Six Months Ended
April 30, 1999 and 1998 6
Notes to Consolidated Financial Statements 7-14
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 15-18
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Stockholders 19
Item 5. Other Information 19
Item 6. Exhibits and Reports on Form 8-K 19
2
AUTOTOTE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
April 30, October 31,
1999 1998
----------- -----------
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents ............................................................... $ 4,858 6,809
Restricted cash ......................................................................... 849 638
Accounts receivable, net ................................................................ 18,368 21,752
Inventories ............................................................................. 12,469 11,295
Prepaid expenses, deposits and other current assets ..................................... 2,881 1,932
--------- ---------
Total current assets ............................................................... 39,425 42,426
--------- ---------
Property and equipment, at cost .............................................................. 193,953 196,748
Less accumulated depreciation ........................................................... 117,540 118,315
--------- ---------
Net property and equipment ......................................................... 76,413 78,433
--------- ---------
Goodwill, net of amortization ................................................................ 3,038 3,614
Operating right, net of amortization ......................................................... 14,348 14,848
Other assets and investments ................................................................. 18,428 17,179
--------- ---------
$ 151,652 156,500
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Current installments of long-term debt .................................................. $ 2,697 2,992
Accounts payable ........................................................................ 15,578 13,610
Accrued liabilities ..................................................................... 21,083 24,996
Interest payable ........................................................................ 3,640 3,706
--------- ---------
Total current liabilities .......................................................... 42,998 45,304
--------- ---------
Deferred income taxes ........................................................................ 1,838 1,832
Other long-term liabilities .................................................................. 2,915 2,124
Long-term debt, excluding current installments ............................................... 119,494 120,878
Long-term debt, convertible subordinated debentures .......................................... 35,000 35,000
--------- ---------
Total liabilities .................................................................. 202,245 205,138
--------- ---------
Stockholders' equity (deficit):
Preferred stock, par value $1.00 per share, 2,000 shares
authorized, none outstanding ......................................................... -- --
Class A common stock, par value $0.01 per share, 99,300 shares authorized,
36,115 and 35,943 shares outstanding at April 30, 1999
and October 31, 1998, respectively ................................................... 362 360
Class B non-voting common stock, par value $0.01 per share, 700 shares
authorized, none outstanding ......................................................... -- --
Additional paid-in capital .............................................................. 149,361 149,119
Accumulated losses ...................................................................... (199,093) (197,231)
Accumulated other comprehensive loss .................................................... (1,121) (784)
Treasury stock, at cost ................................................................. (102) (102)
--------- ---------
Total stockholders' equity (deficit) ............................................... (50,593) (48,638)
--------- ---------
$ 151,652 156,500
========= =========
See accompanying notes to consolidated financial statements.
3
AUTOTOTE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended April 30, 1999 and 1998
(Unaudited, in thousands, except per share amounts)
1999 1998
------- -------
Operating revenues:
Services ........................................... $36,496 32,925
Sales .............................................. 16,583 3,290
------- -------
53,079 36,215
------- -------
Operating expenses (exclusive of depreciation
and amortization shown below):
Services ........................................... 23,730 20,297
Sales .............................................. 12,718 1,972
------- -------
36,448 22,269
------- -------
Total gross profit ............................ 16,631 13,946
Selling, general and administrative expenses ............ 6,425 5,686
Gain on sale of business ................................ -- (684)
Depreciation and amortization ........................... 5,278 7,230
------- -------
Operating income .............................. 4,928 1,714
Other deductions:
Interest expense ................................... 4,039 3,825
Other (income) expense ............................. 256 (214)
------- -------
4,295 3,611
------- -------
Income (loss) before income tax expense ............ 633 (1,897)
Income tax expense ...................................... 61 169
------- -------
Net income (loss) ....................................... $ 572 (2,066)
======= =======
Net income (loss) per basic share and diluted share ..... $ 0.02 (0.06)
======= =======
Weighted-average number of shares used in per share
calculations:
Basic shares ....................................... 36,032 35,504
Diluted shares ..................................... 37,371 35,504
======= =======
See accompanying notes to consolidated financial statements.
4
AUTOTOTE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Six Months Ended April 30, 1999 and 1998
(Unaudited, in thousands, except per share amounts)
1999 1998
-------- --------
Operating revenues:
Services .......................................... $ 70,725 64,252
Sales ............................................. 28,006 6,394
-------- --------
98,731 70,646
-------- --------
Operating expenses (exclusive of depreciation and
amortization shown below):
Services .......................................... 46,893 40,005
Sales ............................................. 20,874 3,762
-------- --------
67,767 43,767
-------- --------
Total gross profit ........................... 30,964 26,879
Selling, general and administrative expenses ........... 13,213 12,845
Gain on sale of business ............................... -- (684)
Depreciation and amortization .......................... 11,011 14,615
-------- --------
Operating income ............................. 6,740 103
Other deductions:
Interest expense .................................. 8,109 7,654
Other (income) expense ............................ 301 (585)
-------- --------
8,410 7,069
-------- --------
Loss before income tax expense .................... (1,670) (6,966)
Income tax expense ..................................... 192 294
-------- --------
Net loss ............................................... $ (1,862) (7,260)
======== ========
Net loss per basic share and diluted share ............. $ (0.05) (0.20)
======== ========
Weighted-average number of shares used in per share
calculations ......................................... 36,027 35,447
======== ========
See accompanying notes to consolidated financial statements.
5
AUTOTOTE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended April 30, 1999 and 1998
(Unaudited, in thousands)
1999 1998
-------- --------
Cash flows from operating activities:
Net loss ................................................ $ (1,862) (7,260)
-------- --------
Adjustments to reconcile net loss to cash provided
by operating activities:
Depreciation and amortization ...................... 11,011 14,615
Changes in operating assets and liabilities ........ (771) 7,706
Other .............................................. 668 (176)
-------- --------
Total adjustments ............................. 10,908 22,145
-------- --------
Net cash provided by operating activities .................... 9,046 14,885
-------- --------
Cash flows from investing activities:
Capital expenditures .................................... (788) (735)
Wagering systems expenditures ........................... (5,671) (14,267)
Proceeds from sale of business and asset disposals, net
of cash transferred ................................... (63) 45
Increase in other assets and investments ................ (2,887) (4,559)
-------- --------
Net cash used in investing activities ........................ (9,409) (19,516)
-------- --------
Cash flows from financing activities:
Payments on long-term debt .............................. (1,601) (2,059)
Net proceeds from issuance of common stock .............. 47 146
-------- --------
Net cash used by financing activities ........................ (1,554) (1,913)
-------- --------
Effect of exchange rate changes on cash ...................... (34) (73)
-------- --------
Decrease in cash and cash equivalents ........................ (1,951) (6,617)
Cash and cash equivalents, beginning of period ............... 6,809 18,207
-------- --------
Cash and cash equivalents, end of period ..................... $ 4,858 11,590
======== ========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest ................................................ $ 7,738 7,352
======== ========
Income taxes ............................................ $ 478 475
======== ========
See accompanying notes to consolidated financial statements.
6
AUTOTOTE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited, in thousands, except per share amounts)
1) Consolidated Financial Statements
Basis of Presentation
The consolidated balance sheet as of April 30, 1999 and the consolidated
statements of operations for the three and six months ended April 30, 1999 and
1998, and the consolidated statements of cash flows for the six months then
ended, have been prepared by the Company without audit. In the opinion of
management, all adjustments necessary to present fairly the financial position
of the Company at April 30, 1999 and the results of its operations for the three
and six months ended April 30, 1999 and 1998 and its cash flows for the six
months ended April 30, 1999 and 1998 have been made. In the second quarter of
fiscal 1998, the Company reversed reserves of $1.3 million in connection with
the collection of receivables previously reserved due to concerns about their
recoverability and cost savings related to the refurbishment of certain
terminals.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. These consolidated financial statements should
be read in conjunction with the financial statements and notes thereto included
in the Company's 1998 Annual Report on Form 10-K. The results of operations for
the six months ended April 30, 1999 are not necessarily indicative of the
operating results for the full year.
Certain items in the prior year's financial statements have been
reclassified to conform with the current year presentation.
Change in Depreciable Lives of Pari-Mutuel Terminals
Effective November 1, 1998 the Company lengthened the depreciable lives of
pari-mutuel terminals from seven to ten years as a result of the renewal of a
number of key service contracts and the realized equipment durability. The
change in the depreciable lives of pari-mutuel terminals resulted in an
approximate $1,100 increase in income before income tax expense and net income
and a $0.03 increase in net income per basic and diluted share in the second
quarter of fiscal 1999, and an approximate $2,200 decrease in loss before income
tax expense and net loss and a $0.06 decrease in net loss per basic and diluted
share in the first six months of fiscal 1999.
Basic Net Income (Loss) Per Share and Diluted Net Income (Loss) Per Share
Basic net income (loss) per share is computed by dividing net income (loss)
by the weighted average number of common shares outstanding during the period.
Diluted net income per share gives effect to all dilutive potential common
shares that were outstanding during the period. Potential common shares are not
included in the calculation of the dilutive net loss per share in the periods
presented, since their inclusion would be anti-dilutive. Basic and diluted net
loss per common share for these periods, therefore, are the same. The following
represents a reconciliation of the numerator and denominator used in computing
basic and diluted net income per share for the three months ended April 30,
1999:
Income Shares Per Share
(numerator) (denominator) Amount
----------- ------------- ---------
Basic net income per share-net income and weighted
average common shares outstanding ................................ $ 572 36,032 0.02
Effect of diluted securities-stock options, warrants,
and deferred shares .............................................. -- 1,339 --
------ ------ ----
Diluted net income per share-net income, weighted average
common shares outstanding and effect of dilutive securities ...... $ 572 37,371 0.02
====== ====== ====
At April 30, 1999 and 1998, the Company had outstanding stock options,
warrants, convertible subordinated debentures, Performance Accelerated
Restricted Stock Units and deferred shares which could potentially dilute basic
earnings per share in the future.
7
AUTOTOTE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Unaudited, in thousands, except per share amounts)
2) Acquisition of Netherlands Subsidiary
On July 1, 1998, the Company completed the purchase of Hippo Toto B. V.,
which was renamed Autotote Nederland B.V. This wholly owned subsidiary holds an
exclusive five-year license to operate all on-track and off-track pari-mutuel
wagering in the Netherlands. The initial license, granted by the Dutch Ministry
of Agriculture, extends through June 30, 2003. The purchase was for nominal
consideration and the acquisition was recorded using the purchase method of
accounting and, accordingly, the assets and liabilities of the acquired entities
have been recorded at their estimated fair value at the date of acquisition. The
operating results of Autotote Nederland B.V. have been included in the
consolidated statements of operations since the date of acquisition.
3) Comprehensive Income (Loss)
On November 1, 1998, the Company adopted Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income" ("SFAS 130"). SFAS 130
establishes standards for the reporting and display of comprehensive income
(loss) and its components. SFAS 130 requires the unrealized losses on the
Company's foreign currency translation adjustments, which prior to adoption were
reported separately in stockholders' equity (deficit), to be included in other
comprehensive income (loss). The following presents a reconciliation of net
income (loss) to comprehensive income (loss) for the three and six months ended
April 30, 1999 and 1998:
Three months ended Six months ended
April 30, April 30,
------------------ ----------------
1999 1998 1999 1998
---- ---- ---- ----
Net income (loss) ...................... $ 572 (2,066) (1,862) (7,260)
Other comprehensive income (loss):
Foreign currency translation ...... (192) 108 (337) (174)
------ ------ ------ ------
Comprehensive income (loss) ............ $ 380 (1,958) (2,199) (7,434)
====== ====== ====== ======
4) Inventories
Inventories consist of the following:
April 30, October 31,
1999 1998
------- -------
Parts and work-in-process .................... $11,426 10,082
Finished goods ............................... 300 448
Ticket paper ................................. 743 765
------- -------
$12,469 11,295
======= =======
Work-in-process includes costs for equipment expected to be sold. Costs
incurred for equipment associated with specific wagering system service
contracts not yet placed in service are classified as construction in progress
in property and equipment.
5) Debt
At April 30, 1999, the Company had approximately $24,176 available for
borrowing under the Company's revolving Credit Facility (the "Facility"). There
were no borrowings outstanding under the Facility at April 30, 1999, however,
approximately $824 in letters of credit were issued under the Facility.
8
AUTOTOTE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Unaudited, in thousands, except per share amounts)
6) Financial Information for Guarantor Subsidiaries and Non-Guarantor
Subsidiaries
The Company conducts substantially all of its business through its domestic
and foreign subsidiaries. In July 1997, the Company issued $110,000 aggregate
principal amount of Senior Notes bearing interest at an annual rate of 10 7/8%
(the "Notes"). On May 22, 1998, the Company and Autotote Lottery Corporation
entered into a $12,000 three-year term loan arrangement that bears interest at a
fixed annual rate of 8.87% (the "Term Loan"). The Term Loan was extended in
conjunction with the Facility and is subject to certain restrictive and
financial covenants contained in the Facility. Obligations under the Facility
and the Notes are jointly and severally guaranteed by substantially all of the
Company's wholly-owned domestic subsidiaries (the "Guarantor Subsidiaries").
(See Note 7 to the Consolidated Financial Statements for the year ended October
31, 1998 in the Company's 1998 Annual Report on Form 10-K.)
Presented below is condensed consolidating financial information for (i)
Autotote Corporation (the "Parent Company") which includes the activities of
Autotote Management Corporation, (ii) the Guarantor Subsidiaries and (iii) the
wholly-owned foreign subsidiaries and the non-wholly owned domestic and foreign
subsidiaries (the "Non-Guarantor Subsidiaries") as of April 30, 1999 (unaudited)
and October 31, 1998 (audited) and for the three and six month periods ended
April 30, 1999 and 1998 (unaudited). The condensed consolidating financial
information has been presented to show the nature of assets held, results of
operations and cash flows of the Parent Company, Guarantor Subsidiaries and
Non-Guarantor Subsidiaries assuming the guarantee structure of the Notes and the
Facility were in effect at the beginning of the periods presented. Separate
financial statements for Guarantor Subsidiaries are not presented based on
management's determination that they would not provide additional information
that is material to investors.
The condensed consolidating financial information reflects the investments
of the Parent Company in the Guarantor and Non-Guarantor Subsidiaries using the
equity method of accounting. In addition, corporate interest and administrative
expenses have not been allocated to the subsidiaries.
9
AUTOTOTE CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
April 30, 1999
(Unaudited, in thousands)
Parent Guarantor Non-Guarantor Eliminating
Company Subsidiaries Subsidiaries Entries Consolidated
-------- ------------ ------------- ----------- ------------
ASSETS
Cash and cash equivalents ................. $ 2,806 1,066 986 -- 4,858
Accounts receivable, net .................. -- 15,777 2,591 -- 18,368
Other current assets ...................... 126 11,439 5,098 (464) 16,199
Property and equipment, net ............... 339 69,427 6,951 (304) 76,413
Investment in subsidiaries ................ 70,784 -- -- (70,784) --
Goodwill .................................. 201 1,122 1,715 -- 3,038
Other assets .............................. 6,323 27,971 717 (2,235) 32,776
--------- --------- --------- --------- ---------
Total assets ........................... $ 80,579 126,802 18,058 (73,787) 151,652
========= ========= ========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current installments of
long-term debt ......................... $ -- 2,578 263 (144) 2,697
Current liabilities ....................... 11,168 23,372 5,683 78 40,301
Long-term debt, excluding
current installments ................... 146,250 7,831 413 -- 154,494
Other non-current liabilities ............. 2,067 1,429 1,468 (211) 4,753
Intercompany balances ..................... (28,313) 29,280 (967) -- --
Stockholders' equity (deficit) ............ (50,593) 62,312 11,198 (73,510) (50,593)
--------- --------- --------- --------- ---------
Total liabilities and stockholders'
equity (deficit) .................... $ 80,579 126,802 18,058 (73,787) 151,652
========= ========= ========= ========= =========
AUTOTOTE CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
October 31, 1998
(in thousands)
Parent Guarantor Non-Guarantor Eliminating
Company Subsidiaries Subsidiaries Entries Consolidated
-------- ------------ ------------- ----------- ------------
ASSETS
Cash and cash equivalents ................. $ 2,054 260 4,495 -- 6,809
Accounts receivable, net .................. -- 18,559 3,193 -- 21,752
Other current assets ...................... 39 10,245 4,058 (477) 13,865
Property and equipment, net ............... 389 70,897 7,437 (290) 78,433
Investment in subsidiaries ................ 62,826 -- -- (62,826) --
Goodwill .................................. 204 1,686 1,724 -- 3,614
Other assets .............................. 6,090 26,748 692 (1,503) 32,027
--------- --------- --------- --------- ---------
Total assets ........................... $ 71,602 128,395 21,599 (65,096) 156,500
========= ========= ========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current installments of
long-term debt ......................... $ -- 2,679 326 (13) 2,992
Current liabilities ....................... 12,463 21,668 8,103 78 42,312
Long-term debt, excluding
current installments ................... 146,250 9,056 572 -- 155,878
Other non-current liabilities ............. 1,535 1,192 1,229 -- 3,956
Intercompany balances ..................... (40,008) 42,900 (2,892) -- --
Stockholders' equity (deficit) ............ (48,638) 50,900 14,261 (65,161) (48,638)
--------- --------- --------- --------- ---------
Total liabilities and stockholders'
equity (deficit) .................... $ 71,602 128,395 21,599 (65,096) 156,500
========= ========= ========= ========= =========
10
AUTOTOTE CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL CONDENSED STATEMENT OF OPERATIONS
Three Months Ended April 30, 1999
(Unaudited, in thousands)
Parent Guarantor Non-Guarantor Eliminating
Company Subsidiaries Subsidiaries Entries Consolidated
-------- ------------ ------------- ----------- ------------
Operating revenues ........................... $ -- 46,440 10,444 (3,805) 53,079
Operating expenses ........................... -- 31,047 9,194 (3,793) 36,448
--------- --------- --------- --------- ---------
Gross profit .............................. -- 15,393 1,250 (12) 16,631
Selling, general and
administrative expenses ................... 1,828 3,369 1,240 (12) 6,425
Depreciation and amortization ................ 45 4,523 735 (25) 5,278
--------- --------- --------- --------- ---------
Operating income (loss) ................... (1,873) 7,501 (725) 25 4,928
Interest expense ............................. 3,800 215 62 (38) 4,039
Other (income) expense ....................... (1,765) 72 63 1,886 256
--------- --------- --------- --------- ---------
Income (loss) before equity in income of
subsidiaries, and income taxes ............ (3,908) 7,214 (850) (1,823) 633
Equity in income of subsidiaries ............. 4,578 -- -- (4,578) --
Income tax expense (benefit) ................. 98 26 (63) -- 61
--------- --------- --------- --------- ---------
Net income (loss) ............................ $ 572 7,188 (787) (6,401) 572
========= ========= ========= ========= =========
AUTOTOTE CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL CONDENSED STATEMENT OF OPERATIONS
Three Months Ended April 30, 1998
(Unaudited, in thousands)
Parent Guarantor Non-Guarantor Eliminating
Company Subsidiaries Subsidiaries Entries Consolidated
-------- ------------ ------------- ----------- ------------
Operating revenues ........................... $ -- 33,910 5,005 (2,700) 36,215
Operating expenses ........................... -- 21,327 3,424 (2,482) 22,269
--------- ------ ----- ------ ------
Gross profit .............................. -- 12,583 1,581 (218) 13,946
Selling, general and
administrative expenses ................... 2,082 2,862 832 (90) 5,686
Gain on sale of business ..................... (684) -- -- -- (684)
Depreciation and amortization ................ 29 6,511 773 (83) 7,230
--------- ------ ----- ------ ------
Operating income (loss) ................... (1,427) 3,210 (24) (45) 1,714
Interest expense ............................. 3,766 30 38 (9) 3,825
Other (income) expense ....................... (159) (66) 2 9 (214)
--------- ------ ----- ------ ------
Income (loss) before equity in income of
subsidiaries, and income taxes ............ (5,034) 3,246 (64) (45) (1,897)
Equity in income of subsidiaries ............. 3,057 -- -- (3,057) --
Income tax expense ........................... 89 17 63 -- 169
--------- ------ ----- ------ ------
Net income (loss) ............................ $ (2,066) 3,229 (127) (3,102) (2,066)
========= ====== ===== ====== ======
11
AUTOTOTE CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL CONDENSED STATEMENT OF OPERATIONS
Six Months Ended April 30, 1999
(Unaudited, in thousands)
Parent Guarantor Non-Guarantor Eliminating
Company Subsidiaries Subsidiaries Entries Consolidated
-------- ------------ ------------- ----------- ------------
Operating revenues ........................... $ -- 85,585 20,888 (7,742) 98,731
Operating expenses ........................... -- 57,530 17,972 (7,735) 67,767
--------- --------- --------- --------- ---------
Gross profit .............................. -- 28,055 2,916 (7) 30,964
Selling, general and
administrative expenses ................... 4,465 6,573 2,187 (12) 13,213
Depreciation and amortization ................ 90 9,525 1,446 (50) 11,011
--------- --------- --------- --------- ---------
Operating income (loss) ................... (4,555) 11,957 (717) 55 6,740
Interest expense ............................. 7,553 506 111 (61) 8,109
Other (income) expense ....................... (1,775) 80 87 1,909 301
--------- --------- --------- --------- ---------
Income (loss) before equity in income of
subsidiaries, and income taxes ............ (10,333) 11,371 (915) (1,793) (1,670)
Equity in income of subsidiaries ............ 8,589 -- -- (8,589) --
Income tax expense ........................... 118 45 29 -- 192
--------- --------- --------- --------- ---------
Net income (loss) ............................ $ (1,862) 11,326 (944) (10,382) (1,862)
========= ========= ========= ========= =========
AUTOTOTE CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL CONDENSED STATEMENT OF OPERATIONS
Six Months Ended April 30, 1998
(Unaudited, in thousands)
Parent Guarantor Non-Guarantor Eliminating
Company Subsidiaries Subsidiaries Entries Consolidated
-------- ------------ ------------- ----------- ------------
Operating revenues ........................... $ -- 64,164 11,126 (4,644) 70,646
Operating expenses ........................... -- 40,567 7,505 (4,305) 43,767
--------- --------- --------- --------- ---------
Gross profit .............................. -- 23,597 3,621 (339) 26,879
Selling, general and
administrative expenses ................... 5,062 5,959 1,824 -- 12,845
Gain on sale of business ..................... (684) -- -- -- (684)
Depreciation and amortization ................ 56 13,008 1,716 (165) 14,615
--------- --------- --------- --------- ---------
Operating income (loss) ................... (4,434) 4,630 81 (174) 103
Interest expense ............................. 7,523 47 101 (17) 7,654
Other (income) expense ....................... (476) (60) (66) 17 (585)
--------- --------- --------- --------- ---------
Income (loss) before equity in income of
subsidiaries, and income taxes ............ (11,481) 4,643 46 (174) (6,966)
Equity in income of subsidiaries ............. 4,373 -- -- (4,373) --
Income tax expense ........................... 152 -- 142 -- 294
--------- --------- --------- --------- ---------
Net income (loss) ............................ $ (7,260) 4,643 (96) (4,547) (7,260)
========= ========= ========= ========= =========
12
AUTOTOTE CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL CONDENSED STATEMENT OF CASH FLOWS
Six Months Ended April 30, 1999
(Unaudited, in thousands)
Parent Guarantor Non-Guarantor Eliminating
Company Subsidiaries Subsidiaries Entries Consolidated
-------- ------------ ------------- ----------- ------------
Net income (loss) ............................ $ (1,862) 11,326 (944) (10,382) (1,862)
Depreciation and amortization ............. 90 9,525 1,446 (50) 11,011
Equity in income of subsidiaries .......... (8,589) -- -- 8,589 --
Other non-cash adjustments ................ 637 (10) 41 -- 668
Changes in working capital ................ (1,382) 3,421 (2,715) (95) (771)
--------- ------- ------- ------- ------
Net cash provided by (used in)
operating activities ...................... (11,106) 24,262 (2,172) (1,938) 9,046
--------- ------- ------- ------- ------
Cash flows from investing activities:
Capital and wagering
systems expenditures ................... (14) (6,046) (395) (4) (6,459)
Proceeds from sale of business
and asset disposals .................... 56 -- (119) -- (63)
Other assets and investments .............. (198) (2,541) (723) 575 (2,887)
--------- ------- ------- ------- ------
Net cash provided by (used in)
investing activities ...................... (156) (8,587) (1,237) 571 (9,409)
--------- ------- ------- ------- ------
Cash flows from financing activities:
Proceeds from issuance of long-term debt .. -- 60 144 (204) --
Payments on long-term debt ................ -- (1,386) (288) 73 (1,601)
Other, principally intercompany balances .. 11,962 (13,477) 243 1,319 47
--------- ------- ------- ------- ------
Net cash provided by (used in)
financing activities ..................... 11,962 (14,803) 99 1,188 (1,554)
--------- ------- ------- ------- ------
Effect of exchange rate changes on cash ...... 52 1 (266) 179 (34)
--------- ------- ------- ------- ------
Increase/(decrease) in cash and
cash equivalents .......................... 752 873 (3,576) -- (1,951)
Cash and cash equivalents,
beginning of period ....................... 2,054 193 4,562 -- 6,809
--------- ------- ------- ------- ------
Cash and cash equivalents,
end of period ............................. $ 2,806 1,066 986 -- 4,858
========= ======= ======= ======= ======
13
AUTOTOTE CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL CONDENSED STATEMENT OF CASH FLOWS
Six Months Ended April 30, 1998
(Unaudited, in thousands)
Parent Guarantor Non-Guarantor Eliminating
Company Subsidiaries Subsidiaries Entries Consolidated
-------- ------------ ------------- ----------- ------------
Net income (loss) ............................ $ (7,260) 4,643 (96) (4,547) (7,260)
Depreciation and amortization ............. 56 13,008 1,716 (165) 14,615
Equity in income of subsidiaries .......... (4,373) -- -- 4,373 --
Other non-cash adjustments ................ 5 (130) (51) -- (176)
Changes in working capital ................ (2,008) 5,822 (181) 4,073 7,706
--------- --------- --------- --------- ---------
Net cash provided by (used in )
operating activities ..................... (13,580) 23,343 1,388 3,734 14,885
--------- --------- --------- --------- ---------
Cash flows from investing activities:
Capital and wagering
systems expenditures ................... (162) (10,091) (869) (3,880) (15,002)
Other assets and investments .............. (118) (4,626) 59 171 (4,514)
--------- --------- --------- --------- ---------
Net cash used in investing activities ........ (280) (14,717) (810) (3,709) (19,516)
--------- --------- --------- --------- ---------
Cash flows from financing activities:
Payments on long-term debt ................ -- (1,907) (162) 10 (2,059)
Other, principally intercompany balances .. 7,542 (7,509) 168 (55) 146
--------- --------- --------- --------- ---------
Net cash provided by (used in)
financing activities ...................... 7,542 (9,416) 6 (45) (1,913)
--------- --------- --------- --------- ---------
Effect of exchange rate changes on cash ...... 6 1 (100) 20 (73)
--------- --------- --------- --------- ---------
Increase/(decrease) in cash
and cash equivalents ...................... (6,312) (789) 484 -- (6,617)
Cash and cash equivalents,
beginning of period ....................... 15,582 328 2,297 -- 18,207
--------- --------- --------- --------- ---------
Cash and cash equivalents,
end of period ............................. $ 9,270 (461) 2,781 -- 11,590
========= ========= ========= ========= =========
14
AUTOTOTE CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion addresses the financial condition of the Company
as of April 30, 1999 and the results of its operations for the three and six
month periods ended April 30, 1999, compared to the same periods last year. This
discussion should be read in conjunction with the Management's Discussion and
Analysis of Financial Condition and Results of Operations for the fiscal year
ended October 31, 1998 ("fiscal 1998") included in the Company's Annual Report
on Form 10-K for fiscal 1998.
Three Months Ended April 30, 1999 Compared to Three Months Ended April 30, 1998
Second Quarter Fiscal 1999 Second Quarter Fiscal 1998
----------------------------------------- ---------------------------------------------
Pari- Pari-
Mutuel Lottery Mutuel Lottery
Operations Operations Total Operations Operations Total
----------- ----------- ---------- ------------ ----------- -----------
Revenues:
Services .................. $34,160 2,336 36,496 30,911 2,014 32,925
Sales ..................... 2,725 13,858 16,583 3,035 255 3,290
------- ------- ------- ------- ------- -------
Total Revenues ............ $36,885 16,194 53,079 33,946 2,269 36,215
======= ======= ======= ======= ======= =======
Gross Profit (excluding
depreciation and amortization) $12,962 3,669 16,631 13,173 773 13,946
======= ======= ======= ======= ======= =======
Second Quarter Revenue Analysis
Revenues increased 47% or $16.9 million to $53.1 million in the second
quarter of the fiscal year ending October 31, 1999 ("fiscal 1999") from $36.2
million in the second quarter of fiscal 1998.
Pari-mutuel Operations services revenues of $34.2 million for the second
quarter of fiscal 1999 improved $3.3 million or 11% compared to the second
quarter of the prior year. This improvement reflects primarily $3.1 million in
revenues from the Netherlands operations that were acquired in the second half
of fiscal 1998, revenues from the new NASRIN(TM) operation, higher OTB revenues
attributable to improved handle and the opening of the race book at the Mohegan
Sun Casino, and the growth in video gaming and handle in the Company's North
American pari-mutuel operations. These increases were partially offset by the
loss of a French pari-mutuel service contract and fewer sales of excess
transponder time in the simulcasting operations. Pari-mutuel Operations
equipment sales revenues in the second quarter of fiscal 1999 of $2.7 million
decreased $0.3 million compared to the second quarter of the prior year due
primarily to lower sales of terminals and equipment to international customers.
Lottery Operations services revenues increased $0.3 million in the second
quarter of fiscal 1999 to $2.3 million primarily due to the April 1999 launch of
the Montana lottery. Lottery Operations equipment sales revenues increased
significantly in the second quarter of fiscal 1999 to $13.9 million from $0.3
million in the same period in fiscal 1998. This increase is primarily
attributable to the sales of Extrema(TM) terminals for use in the SISAL SPORT
Italia SpA lottery operations and the March 1999 delivery and sale of a lottery
central system, terminals and communications equipment to the Montana lottery.
Gross Profit Analysis
The total gross profit of $16.6 million in the second quarter of fiscal
1999 increased by $2.7 million, or 19%, compared to the second quarter of fiscal
1998. Higher gross profit on international sales of the Company's Extrema(TM)
terminals, the March 1999 delivery and sale of a lottery central system,
terminals and communications equipment to the Montana Lottery, and profits on
higher OTB service revenues were partially offset by the decrease in profits
earned in the French pari-mutuel operations. Gross profit as a percent of
revenues in the Company's service businesses was 35% in the second quarter of
fiscal 1999 compared to 38% in the second quarter of fiscal 1998 and 35% in full
fiscal 1998. This decrease reflects, primarily, the lower gross profit on the
Netherlands operations that were acquired in the second half of fiscal 1998, and
lower gross profit on French pari-mutuel operations, partially offset by
improved earnings in OTB operations. Gross profit earned on equipment sales of
$3.9 million in the second quarter of fiscal 1999 increased by $2.5 million, or
193%, compared to the second quarter of fiscal 1998. Gross profit as a percent
of equipment sales was 23% in the second quarter of fiscal 1999, a decrease from
gross profit of 40% in the second quarter of fiscal 1998 as a result of a change
in the mix of equipment and systems sold.
15
AUTOTOTE CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS-(Continued)
Expense Analysis
Selling, general and administrative expenses include marketing, sales,
administrative, engineering and software development, finance, legal and other
expenses. Selling, general and administrative expenses increased $0.7 million or
13% to $6.4 million in the second quarter of fiscal 1999 from $5.7 million in
the second quarter of fiscal 1998. The increase is primarily the result of the
inclusion of the Netherlands operations acquired in July 1998, the start-up of
NASRIN(TM) and lower expenses reported in fiscal 1998 resulting from the
collection of receivables previously reserved due to concerns about their
recoverability. Partially offsetting these increases were the expense savings of
fiscal 1998 cost reduction programs in Europe.
Depreciation and amortization expenses decreased $1.9 million or 27% to
$5.3 million in the second quarter of fiscal 1999 from $7.2 million in the
second quarter of fiscal 1998. Depreciation decreased by $1.6 million primarily
due to the lengthening of depreciable lives of pari-mutuel terminals from seven
to ten years, effective November 1, 1998, as the result of service contract
renewals and the realized durability of the equipment. Amortization expenses
decreased by $0.4 million as a result of the full amortization of certain
intangible assets in fiscal 1998.
Interest expense of $4.0 million in the second quarter of fiscal 1999
increased $0.2 million from the second quarter of fiscal 1998, as a result of
the borrowings in connection with the fiscal 1998 installation of the
Connecticut lottery terminals.
Income Taxes
Income tax expense was $0.1 million in the second quarter of fiscal 1999
compared to $0.2 million in the fiscal 1998 second quarter. Income tax expense
principally reflects foreign taxes, since no tax benefit has been recognized on
domestic operating losses.
Six Months Ended April 30, 1999 Compared to Six Months Ended April 30, 1998
Six Months Fiscal 1999 Six Months Fiscal 1998
-------------------------------- --------------------------------
Pari- Pari-
Mutuel Lottery Mutuel Lottery
Operations Operations Total Operations Operations Total
---------- ---------- ----- ---------- ---------- -----
Revenues:
Services .................. $66,217 4,508 70,725 60,007 4,245 64,252
Sales ..................... 5,599 22,407 28,006 5,428 966 6,394
------- ------- ------- ------- ------- -------
Total Revenues ............ $71,816 26,915 98,731 65,435 5,211 70,646
======= ======= ======= ======= ======= =======
Gross Profit (excluding
depreciation and amortization) $24,375 6,589 30,964 24,927 1,952 26,879
======= ======= ======= ======= ======= =======
Six Month Revenue Analysis
Revenues increased 40% or $ 28.1 million to $98.7 million in the first six
months of fiscal 1999 from $70.6 million in the first six months of fiscal 1998.
Pari-mutuel Operations services revenues of $66.2 million for the first six
months of fiscal 1999 improved $6.2 million or 10% compared to the first six
months of the prior year. This improvement reflects primarily $6.3 million in
revenues from the Netherlands operations that were acquired in the second half
of fiscal 1998, revenues from the new NASRIN(TM) operation, higher OTB revenues
attributable to increased handle and the opening of the race book at the Mohegan
Sun Casino. These improvements were partially offset by the loss of a French
pari-mutuel service contract and fewer sales of excess transponder time in the
simulcasting operations. Pari-mutuel equipment sales revenues in the first six
months of fiscal 1999 of $5.6 million increased $0.2 million or 3% compared to
the first six months of the prior year, and was comprised primarily of terminals
and equipment sales to international customers.
16
AUTOTOTE CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS-(Continued)
Lottery Operations service revenues increased $0.3 million in the first six
months of fiscal 1999 to $4.5 million primarily due to the April 1999 launch of
the Montana lottery. Lottery equipment sales revenues increased to $22.4 million
in the first six months of fiscal 1999 from $1.0 million in the same period in
fiscal 1998. This increase is primarily attributable to the fiscal 1999 sales of
terminals for use in the SISAL Sport Italia SpA lottery operations, and the
March 1999 delivery of a lottery central system, terminals and communications
equipment to the Montana Lottery.
Gross Profit Analysis
The total gross profit of $31.0 million in the first six months of fiscal
1999 increased by $4.1 million, or 15%, compared to the first six months of
fiscal 1998. Higher margins were due to the profit on sales of terminals for use
in the SISAL Sport Italia SpA lottery operations and the March 1999 delivery of
a lottery central system, terminals and communications equipment to the Montana
Lottery, coupled with profits on higher OTB service revenues, partially offset
by the lower profit in the French pari-mutuel operations. Gross profit as a
percent of revenues in the Company's services businesses was 34% in the first
six months of fiscal 1999, compared to 38% in the first six months of fiscal
1998, reflecting, primarily, lower margins on the Netherlands operations that
were acquired in the second half of fiscal 1998, the start-up of the NASRIN(TM)
business, and lower gross profit on French pari-mutuel operations, partially
offset by improved earnings in OTB operations. Gross profit earned on equipment
sales was $7.1 million in the first six months of fiscal 1999, compared to $2.6
million in the first six months of fiscal 1998 due primarily to the
international sales of lottery and pari-mutuel terminals mentioned above. Gross
profit as a percent of equipment sales was 25% in the first six months of fiscal
1999, a decrease from the gross profit percent of 41% in the first six months of
fiscal 1998 and the 33% gross profit percent for fiscal 1998, as a result of a
change in the mix of equipment and systems sold.
Expense Analysis
Selling, general and administrative expenses include marketing, sales,
administrative, engineering and software development, finance, legal and other
expenses. Selling, general and administrative expenses increased $0.4 million or
3% to $13.2 million in the first six months of fiscal 1999 from $12.8 million in
the first six months of fiscal 1998. The increase is primarily the result of the
inclusion of the Netherlands operations acquired in July 1998, the NASRIN(TM)
start-up, and lower expenses reported in fiscal 1998 resulting from the
collection of receivables previously reserved due to concerns about their
recoverability. Partially offsetting these increases were the expense savings of
fiscal 1998 cost reduction programs in Europe.
Depreciation and amortization expenses decreased $3.6 million or 25% to
$11.0 million in the first six months of fiscal 1999 from $14.6 million in the
first six months of fiscal 1998. Depreciation decreased by $2.6 million
primarily due to the lengthening of depreciable lives of pari-mutuel terminals
from seven to ten years, effective November 1, 1998, as the result of service
contract renewals and the realized durability of the equipment. Amortization
expenses decreased by $1.0 million primarily as a result of the full
amortization of certain intangible assets in fiscal 1998.
Interest expense of $8.1 million in the first six months of fiscal 1999
increased $0.5 million over the first six months of fiscal 1998 as a result of
borrowings in connection with the fiscal 1998 installation of the Connecticut
lottery terminals.
Income Taxes
Income tax expense was $0.2 million in the first six months of fiscal 1999
compared to $0.3 million in the first six months of fiscal 1998. Income tax
expense principally reflects foreign taxes, since no tax benefit has been
recognized on domestic operating losses.
Liquidity, Capital Resources and Working Capital Deficiency
At April 30 1999, the Company's available cash and borrowing capacity
totaled $29.0 million compared to $29.9 million at October 31, 1998. Net cash
provided by operating activities decreased by $5.9 million to $9.0 million for
the six months ended April 30, 1999 from $14.9 million in the six months ended
April 30, 1998 reflecting reductions in current liabilities incurred in
connection with the liquidation of accruals relating to the European cost
savings efforts, liabilities incurred with the acquisition of the Netherlands
17
AUTOTOTE CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS-(Continued)
operations, and a customer deposit on Extrema(TM) shipments. In the first six
months of fiscal 1999, the Company utilized cash provided by operating
activities and $2.0 million of available cash to invest $9.4 million,
principally in capital and contract expenditures and in software systems
development, and to repay $1.6 million in long-term debt.
At April 30, 1999, the Company's current liabilities exceeded current
assets by $3.6 million, an increase of $0.7 million from October 31, 1998. The
increase is due principally to the use of available cash to repay $1.6 million
of long-term debt.
As described above in Note 5 to the Consolidated Financial Statements, the
Company had $24.2 million of borrowing availability under its Facility at April
30 1999. The Company believes that, although it may incur a net loss in fiscal
1999, its cash resources, anticipated cash flows from operations and borrowing
availability under the Facility will provide sufficient liquidity to meet
scheduled interest payments and anticipated capital expenditures during the next
twelve months. The Company believes that additional financing will be required
over the long term to enable it to meet its debt service obligations, including
scheduled principal payments under the Notes, the Subordinated Debentures, the
Term Loan maturity and the Facility, and for capital expenditures that are not
financed through cash flows from operations, beginning in the fiscal year ending
October 31, 2001. See Notes 5 and 6 to the Consolidated Financial Statements.
Year 2000
The Company is dedicated to providing uninterrupted, high quality
performance from its computer software systems, products and satellite
communications network before, during and after year 2000. Since its fiscal year
ended October 31, 1997, the Company has tested its critical systems, surveyed
its principal suppliers, identified all internal systems with date-related
deficiencies, developed solutions for those internal systems that have been
found to have date-related deficiencies, and is in various phases of
remediation. Simulcasting satellite and ground control systems and
encoders/decoders are deemed compliant with minor software upgrades, based upon
certifications from GE Americom and other vendors, with the exception of 11
encoders. Software upgrades will be completed and non-compliant encoders will be
eliminated or replaced by November 1999. Pari-mutuel wagering systems field
upgrades began in early February 1999; 98% of the systems have received Year
2000 upgrades as of mid-May 1999 and this effort is scheduled for completion by
June 30, 1999. Installation of a Year 2000 patch for the Company's VAX systems
Open VMS operating systems began in mid-May and is scheduled for completion by
June 30, 1999. It is anticipated that all wagering systems will be Year 2000
compliant by June 30, 1999 and that additional regulatory testing, where
mandated, will be completed by July 31, 1999. Year 2000 compliant Lottery
software is expected to be available to the lotteries by mid-June 1999 and
regulatory testing and certification of Lottery systems is expected to be
complete by November 1, 1999. In some instances, the Company is also relying on
Year 2000 compliance representations and warranties that its vendors, suppliers
and other service providers are making with respect to their products and
services. This schedule and progress made to date support the Company's belief
that its solutions will be implemented and tested prior to any anticipated Year
2000 impact on the Company's systems.
The total estimated cost of Year 2000 remediation efforts is not expected
to exceed $3 million. Through the first six months of fiscal 1999, the Company
has incurred approximately $0.2 million of costs principally for software
modifications and conversions. A major portion of the remaining estimated costs
represents possible equipment upgrades and replacements, if needed, which have
not yet been purchased. Equipment replacement will be capitalized in accordance
with Company policy. Similar Year 2000 readiness programs are in place in the
Company's foreign operations. Costs to address these operations' Year 2000
issues not are expected to be material and are included in the above remediation
cost estimate. The Company intends to monitor these processes, and has evaluated
alternative solutions, which will be implemented if necessary.
The Company expects that its critical systems and applications will be
compliant by November 30, 1999, and the Year 2000 issue will not pose
significant operational problems for the Company. There can be no assurance,
however, that there will not be a delay in, or increased cost associated with,
the implementation of such corrective action, and the Company's inability to
implement such corrective action could have a material adverse effect on its
consolidated financial condition or results of operations. The Company's belief
and expectations are based on certain assumptions and expectations that may
ultimately prove to be inaccurate.
18
AUTOTOTE CORPORATION AND SUBSIDIARIES
Quarter Ended April 30, 1999
PART II. Other Information
Item 1. Legal Proceedings
No significant changes have occurred with respect to legal proceedings
disclosed in Part 1, Item 3, of the Company's 1998 Annual Report on Form 10-K.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Stockholders
The Annual Meeting of the stockholders of the Company was held on April 12,
1999 to elect five directors of the Company and to ratify the appointment of
KPMG LLP as auditors for the Company's 1999 fiscal year. All matters put before
the stockholders passed as follows:
Director Nominees/ Other Matters For Withheld Against Abstain
-------------------------------- --- -------- ------- -------
A. Lorne Weil 30,765,558 739,129
Larry Lawrence 30,770,688 733,999
Sir Brian G. Wolfson 30,771,121 733,566
Alan J. Zakon 30,770,737 733,950
Marshall Bartlett 30,770,583 734,104
Ratification of KPMG LLP 30,800,836 641,155 62,695
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule.
No current reports on Form 8-K were filed during the second quarter of
fiscal 1999.
19
AUTOTOTE CORPORATION AND SUBSIDIARIES
Quarter Ended April 30, 1999
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.
AUTOTOTE CORPORATION
(Registrant)
By: /s/ DeWayne E. Laird
--------------------
Name: DeWayne E. Laird
Title: Vice President & Chief Financial Officer
Dated: June 11, 1999
20