1
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 PERIOD ENDED JULY 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 0-15131
QUIKSILVER, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 33-0199426
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1740 MONROVIA AVENUE
COSTA MESA, CALIFORNIA
92627
(Address of principal executive offices)
(Zip Code)
(714) 645-1395
(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
------- -------
The number of shares outstanding of issuer's Common Stock,
par value $0.01 per share, at
September 6, 1996 was
6,950,846.
2
QUIKSILVER, INC.
FORM 10-Q
INDEX
PART I - FINANCIAL INFORMATION Page No.
- ------------------------------ --------
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets
July 31, 1996 and October 31, 1995 . . . . . . . . . . . . . . . . . . . . 2
Condensed Consolidated Statements of Income
Three Months Ended July 31, 1996 and 1995 . . . . . . . . . . . . . . . . 3
Nine Months Ended July 31, 1996 and 1995 . . . . . . . . . . . . . . . . . 4
Condensed Consolidated Statements of Cash Flows
Nine Months ended July 31, 1996 and 1995 . . . . . . . . . . . . . . . . . 5
Notes to Condensed Consolidated Financial Statements . . . . . . . . . . . . . 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Part II - OTHER INFORMATION
- ---------------------------
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . 10
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
- ----------
1
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
QUIKSILVER, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
JULY 31, OCTOBER 31,
1996 1995
---- ----
ASSETS
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . $ 4,304,000 $ 3,461,000
Trade accounts receivable, less allowance
for doubtful accounts of $3,843,000 (1996)
and $2,717,000 (1995) . . . . . . . . . . . . . . . . . . 46,113,000 38,308,000
Other receivables . . . . . . . . . . . . . . . . . . . . . 2,560,000 1,471,000
Inventories - Note 3 . . . . . . . . . . . . . . . . . . . . 34,641,000 28,355,000
Prepaid expenses and other current assets . . . . . . . . . 2,097,000 2,240,000
------------ -----------
Total current assets . . . . . . . . . . . . . . . . . 89,715,000 73,835,000
Property and equipment, less accumulated depreciation
and amortization of $7,564,000 (1996) and
$6,982,000 (1995) . . . . . . . . . . . . . . . . . . . . . 8,902,000 7,032,000
Trademark, less accumulated amortization of
$1,449,000 (1996) and $1,336,000 (1995) 1,569,000 1,682,000
Goodwill, less accumulated amortization of
$2,954,000 (1996) and $2,501,000 (1995) . . . . . . . . . . 15,158,000 15,611,000
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . 1,430,000 1,008,000
------------ -----------
Total assets . . . . . . . . . . . . . . . . . . . . . $116,774,000 $99,168,000
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Lines of credit . . . . . . . . . . . . . . . . . . . . . . $ 6,673,000 $ 8,031,000
Accounts payable . . . . . . . . . . . . . . . . . . . . . . 13,128,000 9,257,000
Accrued liabilities . . . . . . . . . . . . . . . . . . . . 9,723,000 8,834,000
Current portion of notes payable . . . . . . . . . . . . . . 242,000 233,000
Income taxes payable . . . . . . . . . . . . . . . . . . . . 3,246,000 578,000
------------ -----------
Total current liabilities . . . . . . . . . . . . . . 33,012,000 26,933,000
Notes payable . . . . . . . . . . . . . . . . . . . . . . . . . 3,172,000 3,297,000
------------ -----------
Total liabilities . . . . . . . . . . . . . . . . . . 36,184,000 30,230,000
------------ -----------
Stockholders' equity
Preferred stock, $.01 par value, authorized
shares - 5,000,000; issued and outstanding
shares - none . . . . . . . . . . . . . . . . . . . . . . -- --
Common stock, $.01 par value, authorized
shares - 30,000,000; issued and outstanding
shares - 6,950,846 (1996) and 6,775,605 (1995) . . . . . 70,000 68,000
Additional paid-in-capital . . . . . . . . . . . . . . . . . 17,702,000 15,118,000
Retained earnings . . . . . . . . . . . . . . . . . . . . . 61,822,000 52,739,000
Cumulative foreign currency translation gain . . . . . . . . 996,000 1,013,000
------------ ------------
Total stockholders' equity . . . . . . . . . . . . . . 80,590,000 68,938,000
------------ ------------
Total liabilities and stockholders' equity . . . . . . $116,774,000 $ 99,168,000
============ ============
See notes to condensed consolidated financial statements.
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QUIKSILVER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
THREE MONTHS ENDED JULY 31,
---------------------------
1996 1995
---- ----
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . $49,008,000 $42,738,000
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . 30,837,000 26,606,000
----------- -----------
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . 18,171,000 16,132,000
----------- -----------
Operating expenses:
Selling, general and administrative expense 13,445,000 11,446,000
Royalty income . . . . . . . . . . . . . . . . . . . . . . . (421,000) (242,000)
Royalty expense . . . . . . . . . . . . . . . . . . . . . . 665,000 500,000
----------- -----------
Total operating expenses . . . . . . . . . . . . . . . . 13,689,000 11,704,000
----------- -----------
Operating income . . . . . . . . . . . . . . . . . . . . . . . 4,482,000 4,428,000
Interest expense, net . . . . . . . . . . . . . . . . . . . . . 186,000 249,000
Foreign currency (gain) loss . . . . . . . . . . . . . . . . . (15,000) 118,000
Other expense . . . . . . . . . . . . . . . . . . . . . . . . . 82,000 91,000
----------- -----------
Income before provision for income taxes . . . . . . . . . . . 4,229,000 3,970,000
Provision for income taxes . . . . . . . . . . . . . . . . . . 1,690,000 1,662,000
----------- -----------
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,539,000 $ 2,308,000
=========== ===========
Net income per common share . . . . . . . . . . . . . . . . . . $0.35 $0.33
=========== ===========
Weighted average common shares
and equivalents outstanding - Note 2 . . . . . . . . . . . . 7,268,000 7,008,000
=========== ===========
See notes to condensed consolidated financial statements.
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QUIKSILVER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
NINE MONTHS ENDED JULY 31,
--------------------------
1996 1995
---- ----
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . $144,000,000 $123,707,000
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . 88,221,000 75,860,000
------------ ------------
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . 55,779,000 47,847,000
------------ ------------
Operating expenses:
Selling, general and administrative expense 38,699,000 33,521,000
Royalty income . . . . . . . . . . . . . . . . . . . . . . . (812,000) (697,000)
Royalty expense . . . . . . . . . . . . . . . . . . . . . . 1,840,000 1,537,000
------------ ------------
Total operating expenses . . . . . . . . . . . . . . . . 39,727,000 34,361,000
------------ ------------
Operating income . . . . . . . . . . . . . . . . . . . . . . . 16,052,000 13,486,000
Interest expense, net . . . . . . . . . . . . . . . . . . . . . 583,000 810,000
Foreign currency (gain) loss . . . . . . . . . . . . . . . . . 33,000 (9,000)
Other expense . . . . . . . . . . . . . . . . . . . . . . . . . 235,000 188,000
------------ ------------
Income before provision for income taxes . . . . . . . . . . . 15,201,000 12,497,000
Provision for income taxes . . . . . . . . . . . . . . . . . . 6,118,000 5,035,000
------------ ------------
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,083,000 $ 7,462,000
============ ============
Net income per common share . . . . . . . . . . . . . . . . . . $1.26 $1.06
============ ============
Weighted average common shares
and equivalents outstanding - Note 2 . . . . . . . . . . . . 7,216,000 7,017,000
============ ============
See notes to condensed consolidated financial statements.
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QUIKSILVER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
NINE MONTHS ENDED JULY 31,
---------------------------
1996 1995
---- ----
Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,083,000 $ 7,462,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization . . . . . . . . . . . . 1,924,000 1,685,000
Provision for losses on accounts receivable . . . . . 1,904,000 790,000
Loss (gain) on sale of fixed assets . . . . . . . . . (15,000) 25,000
Changes in operating assets and liabilities:
Trade accounts receivable . . . . . . . . . . . . . (10,005,000) (7,036,000)
Other receivables . . . . . . . . . . . . . . . . . (831,000) 158,000
Inventories . . . . . . . . . . . . . . . . . . . . (6,314,000) (11,014,000)
Prepaid expenses and other current assets . . . . . 129,000 (406,000)
Other assets . . . . . . . . . . . . . . . . . . . (425,000) (60,000)
Accounts payable . . . . . . . . . . . . . . . . . 3,983,000 5,235,000
Accrued liabilities . . . . . . . . . . . . . . . . 928,000 3,816,000
Income taxes payable . . . . . . . . . . . . . . . 2,652,000 690,000
------------ ------------
Net cash provided by operating activities . . . 3,013,000 1,345,000
Cash flows from investing activities:
Proceeds from sales of fixed assets . . . . . . . . . . . . 30,000 (25,000)
Capital expenditures . . . . . . . . . . . . . . . . . . . . (3,309,000) (2,093,000)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (7,000)
------------ ------------
Net cash used in investing activities . . . . . (3,279,000) (2,125,000)
Cash flows from financing activities:
Borrowings on lines of credit . . . . . . . . . . . . . . . 18,756,000 29,065,000
Payments on lines of credit . . . . . . . . . . . . . . . . (20,143,000) (31,132,000)
Borrowings on long-term debt . . . . . . . . . . . . . . . . -- 1,040,000
Payments on long-term debt . . . . . . . . . . . . . . . . . (63,000) (252,000)
Proceeds from stock issued in connection with
exercises of stock options . . . . . . . . . . . . . . . 2,586,000 1,693,000
------------ ------------
Net cash provided by financing activities . . . 1,136,000 414,000
Effect of exchange rate changes on cash . . . . . . . . . . . . (27,000) 663,000
------------ ------------
Net increase in cash and cash equivalents . . . . . . . . . . . 843,000 297,000
Cash and cash equivalents at beginning of period 3,461,000 682,000
------------ ------------
Cash and cash equivalents at end of period . . . . . . . . . . $ 4,304,000 $ 979,000
============ ============
Supplementary cash flow information:
Cash paid during the period for:
Interest . . . . . . . . . . . . . . . . . . . . . . . . $ 569,000 $ 805,000
============ ============
Income taxes . . . . . . . . . . . . . . . . . . . . . . $ 4,657,000 $ 4,798,000
============ ============
See notes to condensed consolidated financial statements.
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QUIKSILVER, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions
to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do
not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statement
presentation.
The Company, in its opinion, has included all adjustments, consisting
only of normal recurring accruals, necessary for a fair presentation
of the results of operations for the three and nine months ended July
31, 1996 and 1995. The condensed consolidated financial statements
and notes thereto should be read in conjunction with the audited
financial statements and notes for the year ended October 31, 1995.
Interim results are not necessarily indicative of results for the full
year due to seasonal and other factors.
2. Net income per common share is computed based on the weighted average
number of common shares outstanding plus the common equivalent shares
assumed to be outstanding, computed using the treasury stock method,
assuming the exercise of all outstanding options and warrants.
3. Inventories consist of the following:
JULY 31, OCTOBER 31,
1996 1995
---- ----
Raw Materials . . . . . . . . . . . . . . . $12,052,000 $10,875,000
Work-In-Process . . . . . . . . . . . . . . 2,603,000 4,104,000
Finished Goods . . . . . . . . . . . . . . . 19,986,000 13,376,000
----------- -----------
$34,641,000 $28,355,000
=========== ===========
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PART I - FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
THREE MONTHS ENDED JULY 31, 1996 COMPARED TO THREE MONTHS ENDED JULY 31, 1995
- -----------------------------------------------------------------------------
Net sales for the three months ended July 31, 1996 increased 14.7% to
$49,008,000 from $42,738,000 in the comparable period of the prior year.
Domestic net sales for the three months ended July 31, 1996 increased 3.2% to
$30,701,000 from $29,750,000 in the comparable period of the prior year, and
European net sales increased 41.0% to $18,307,000 from $12,988,000 for those
same periods. Domestically, lower sales in the young men's division were more
than offset by increases in the juniors and other divisions. In Europe, net
sales grew across all divisions.
The gross profit margin for the three months ended July 31, 1996 decreased to
37.1% from 37.7% in the comparable period of the prior year. The domestic
gross profit margin decreased slightly to 35.3% from 35.5% in the comparable
period of the prior year, and the European gross profit margin decreased to
40.1% from 42.8% for those same periods. The decrease in Europe was primarily
due to higher costs in the current quarter incurred to reduce remaining spring
and summer inventories.
Selling, general and administrative expense ("SG&A") for the three months ended
July 31, 1996 increased 17.5% to $13,445,000 from $11,446,000 in the comparable
period of the prior year. Domestic SG&A increased 20.3% to $8,679,000 from
$7,213,000 in the comparable period of the prior year, and European SG&A
increased 12.6% to $4,766,000 from $4,233,000 for those same periods. The
increase in domestic SG&A was primarily due to higher personnel costs related
to increased sales volume, along with increased investment in computer systems
and the national advertising campaign that began during the three months ended
July 31, 1996. The increase in European SG&A was primarily due to increased
sales volume.
Net royalty expense for the three months ended July 31, 1996 decreased 5.4% to
$244,000 from $258,000 in the comparable period of the prior year. This slight
decrease was due primarily to increased domestic royalty income from sales in
Japan and other licensees, which was substantially offset by increased royalty
expense related to European sales. The Company receives royalty income from
its Mexico, Japan, wetsuit, watch, sunglass, and outlet store licensees as well
as Raisins international licensees, and it pays royalties on European sales
under a trademark agreement with Quiksilver International.
Net interest expense for the three months ended July 31, 1996 decreased 25.3%
to $186,000 from $249,000 in the comparable period of the prior year. This
decrease was primarily due to lower outstanding balances on the Company's lines
of credit.
The effective income tax rate for the three months ended July 31, 1996, which
is based on current estimates of the annual effective income tax rate,
decreased to 40.0% from 41.9% in the comparable period of the prior year. The
effective income tax rate for the quarter decreased in comparison to the prior
year as estimates of the annual effective income tax rate were revised at the
completion of the third quarter.
As a result of the above factors, net income for the three months ended July
31, 1996 increased 10.0% to $2,539,000 or $0.35 per share from $2,308,000 or
$0.33 per share in the comparable period of the prior year.
NINE MONTHS ENDED JULY 31, 1996 COMPARED TO NINE MONTHS ENDED JULY 31, 1995
- ---------------------------------------------------------------------------
Net sales for the nine months ended July 31, 1996 increased 16.4% to
$144,000,000 from $123,707,000 in the comparable period of the prior year.
Domestic net sales for the nine months ended July 31, 1996 increased 10.0% to
$91,515,000 from $83,175,000 in the comparable period of the prior year, and
European net sales increased 29.5% to $52,485,000 from $40,532,000 for those
same periods. Domestically, lower sales in the young men's division were more
than offset by increases in the juniors and other divisions. In Europe, net
sales grew across all divisions.
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The gross profit margin for the nine months ended July 31, 1996 was 38.7% and
unchanged from the comparable period of the prior year. The domestic gross
profit margin for the nine months ended July 31, 1996 increased slightly to
35.9% from 35.8% in the comparable period of the prior year, and the European
gross profit margin decreased somewhat to 43.7% from 44.5% in those same
periods. The decrease in Europe was primarily due to higher costs in the third
quarter of the current year incurred to reduce remaining spring and summer
inventories, which was partially offset by improved forecasting and better
sourcing in the first half of the current year.
SG&A for the nine months ended July 31, 1996 increased 15.4% to $38,699,000
from $33,521,000 in the comparable period of the prior year. Domestic SG&A for
the nine months ended July 31, 1996 increased 13.5% to $24,212,000 from
$21,331,000 in the comparable period of the prior year, and European SG&A
increased 18.8% to 14,487,000 from 12,190,000 in those same periods. The
increase in domestic SG&A was primarily due to higher personnel costs related
to increased sales volume, along with increased investment in computer systems
and the national advertising campaign that began during the third quarter of
the current year. The increase in European SG&A was primarily due to increased
sales volume.
Net royalty expense for the nine months ended July 31, 1996 increased 22.4% to
$1,028,000 from $840,000 in the comparable period of the prior year. This
increase was due primarily to increased royalty expense related to European
sales, which was partially offset by increased domestic royalty income from
sales in Japan and other licensees.
Net interest expense for the nine months ended July 31, 1996 decreased 28.0% to
$583,000 from $810,000 in the comparable period of the prior year. This
decrease was primarily due to lower outstanding balances on the Company's lines
of credit.
The effective income tax rate for the nine months ended July 31, 1996, which is
based on current estimates of the annual effective income tax rate, was
essentially unchanged at 40.2% versus 40.3% in the comparable period of the
prior year.
As a result of the above factors, net income for the nine months ended July 31,
1996 increased 21.7% to $9,083,000 or $1.26 per share from $7,462,000 or $1.06
per share in the comparable period of the prior year.
FINANCIAL POSITION, CAPITAL RESOURCES AND LIQUIDITY
- ---------------------------------------------------
The Company finances its capital investments and seasonal working capital
requirements with funds generated by operations and its bank revolving lines of
credit.
Net cash provided by operating activities for the nine months ended July 31,
1996 increased 124.0% to $3,013,000 from $1,345,000 in the comparable period of
the prior year. This increase was primarily due to increased net income.
The Company uses independent contractors for cutting, sewing and other
manufacturing functions and intends to continue to use independent contractors
in the foreseeable future. Accordingly, the Company has avoided significant
capital expenditures. For the nine months ended July 31, 1996, capital
expenditures increased 58.1% to $3,309,000 from $2,093,000 in the comparable
period of the prior year, which resulted primarily from increased investment in
computer systems. The Company plans continued investment in computer systems
during the fourth quarter of fiscal 1996.
On September 4, 1996, the Company's Board of Directors approved the repurchase
of up to 500,000 shares of the Company's common stock over the next twelve
months. Share repurchases will be funded from existing cash, internally
generated cash flow or through short-term debt.
The Company has available a revolving line of credit with a U.S. bank that is
unsecured and provides for maximum financing of $30,000,000. This line of
credit bears interest at 0.5% below the bank's reference rate and expires on
April 30, 1998. The Company also has available lines of credit, both secured
and unsecured, with banks in Europe that provide for maximum financing of
approximately $16,600,000. The European lines of credit bear interest at 0.7%
to 1.0% above the banks' reference rates.
During the nine months ended July 31, 1996, proceeds from stock issued in
connection with exercises of stock options were partially offset by cash used
to reduce borrowings on lines of credit. Net cash provided
8
10
by financing activities increased 174.4% to $1,136,000 for the nine months
ended July 31, 1996 from $414,000 in the comparable period of the prior year.
The net increase in cash and cash equivalents for the nine months ended July
31, 1996 was $843,000 compared to $297,000 in the comparable period of the
prior year. Cash and cash equivalents increased 24.4% to 4,304,000 at July 31,
1996 from $3,461,000 at October 31, 1995, while working capital increased 20.9%
to $56,703,000 from $46,902,000 for that same period. The Company believes its
current cash balance and current lines of credit are adequate to cover its
seasonal working capital and other requirements for the foreseeable future.
Accounts receivable increased 20.4% to $46,113,000 at July 31, 1996 from
$38,308,000 at October 31, 1995. Domestic accounts receivable increased 3.5%
to 26,423,000 at July 31, 1996 from $25,519,000 at October 31, 1995, and
European accounts receivable increased 54.0% to $19,690,000 from $12,789,000
for that same period. The domestic increase resulted primarily from an
increase in the average collection period, while the European increase resulted
primarily from seasonal factors.
Consolidated inventories increased 22.2% to $34,641,000 at July 31, 1996 from
$28,355,000 at October 31, 1995. Domestic inventories increased 10.6% to
$24,886,000 from $22,496,000 at October 31, 1995, and European inventories
increased 66.5% to $9,755,000 from $5,859,000 for that same period. These
increases are primarily due to seasonal factors. Inventory levels generally
increase at the end of the first and third fiscal quarters in preparation for
stronger selling seasons in the second and fourth fiscal quarters.
In recent years, certain customers of the Company have experienced financial
difficulties, including the filing of reorganization proceedings under
bankruptcy laws. The Company has not incurred significant losses outside the
normal course of business as a result of the financial difficulties of these
customers. While management believes that allowances for doubtful accounts at
July 31, 1996 are adequate, the Company carefully monitors developments
regarding its major customers. Additional material financial difficulties
encountered by these or other significant customers could have an adverse
impact on the Company's financial position or results of operations. However,
in management's opinion, there are adequate alternative retail customers such
that the loss of any one customer known to have financial difficulties will not
have a significant long-term negative impact on the Company's future
operations.
Because Quiksilver Europe sells in various European countries and collects its
accounts at future dates in the customers' local currencies, the Company is
subject to gains and losses resulting from changes in foreign currency exchange
rates. The Company hedges these transactions as considered appropriate to
minimize its exposure to these exchange fluctuations.
9
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PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8K
(a) Exhibits
--------
10.1 Amended and Restated Loan Agreement between Union
Bank and Registrant dated April 30, 1996.
27.0 Financial Data Schedule
(b) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed during the quarter ended July 31,
1996
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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.
QUIKSILVER, INC., a Delaware Corporation
September 12, 1996 Steven L. Brink
-----------------------------------------
Steven L. Brink
Vice President - Finance and
Principal Accounting Officer
11