U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
_X_ FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999
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 NO. 0-20310
SUPERIOR ENERGY SERVICES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 75-2379388
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
1105 PETERS ROAD
HARVEY, LOUISIANA 70058
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (504) 362-4321
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 the Registrant's common stock outstanding on April
30, 1999 was 28,792,523.
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
March 31, 1999 and December 31,1998
(in thousands, except share data)
3/31/99 12/31/98
(Unaudited) (Audited)
-------------- -------------
ASSETS
Current assets:
Cash and cash equivalents $ 1,131 $ 737
Accounts receivable - net 17,216 22,486
Inventories 3,030 2,972
Income tax receivable - 2,568
Other 1,928 1,892
--------- ---------
Total current assets 23,305 30,655
Property, plant and equipment - net 76,647 76,187
Goodwill - net 24,080 24,302
--------- ---------
Total assets $ 124,032 $ 131,144
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,118 $ 5,557
Accrued expenses 3,035 6,316
Income taxes payable 534 -
--------- ---------
Total current liabilities 6,687 11,873
--------- ---------
Deferred income taxes 8,612 8,612
Long-term debt 25,006 27,955
Stockholders' equity:
Preferred stock of $.01 par value.
Authorized, 5,000,000 shares;
none issued - -
Common stock of $.001 par value.
Authorized, 40,000,000 shares;
issued and outstanding 28,792,523 29 29
Additional paid-in capital 78,794 78,794
Retained earnings 7,149 6,126
Treasury stock, at cost, 474,500 shares (2,245) (2,245)
--------- ---------
Total stockholders' equity 83,727 82,704
--------- ---------
Total liabilities and
stockholders' equity $ 124,032 $ 131,144
========== ==========
See accompanying notes to consolidated financial statements
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
Three Months Ended March 31, 1999 and 1998
(in thousands,except per share data)
(unaudited)
1999 1998
--------------- ------------
Revenues $ 18,042 $ 22,702
------------ -----------
Costs and expenses:
Costs of services 7,601 9,562
Depreciation and amortization 2,142 1,661
General and administrative 6,149 5,197
------------ -----------
Total costs and expenses 15,892 16,420
------------ -----------
Income from operations 2,150 6,282
Other income (expense):
Interest expense (500) (230)
Gain on sale of subsidiary - 1,176
------------ -----------
Income before income taxes 1,650 7,228
Provision for income taxes 627 2,747
------------ -----------
Net income $ 1,023 $ 4,481
============ ===========
Earnings per share:
Basic $ 0.04 $ 0.15
============ ===========
Diluted $ 0.04 $ 0.15
============ ===========
Weighted average common shares used
in computing earnings per share:
Basic 28,793 29,182
Incremental common shares
from stock options 29 349
------------ -----------
Diluted 28,822 29,531
============ ===========
See accompanying notes to consolidated financial statements
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
Three Months Ended March 31, 1999 and 1998
(in thousands)
(unaudited)
1999 1998
--------------- ------------
Cash flows from operating activities:
Net income $ 1,023 $ 4,481
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 2,142 1,661
Gain on sale of subsidiary - (1,176)
Changes in operating assets
and liabilities, net of acquisitions:
Accounts receivable 5,270 85
Inventories (58) (10)
Other - net 198 163
Accounts payable (2,439) 307
Accrued expenses (3,281) (381)
Income taxes payable 3,102 1,885
----------- ----------
Net cash provided by
operating activities 5,957 7,015
----------- ----------
Cash flows from investing activities:
Payments for purchases of property and equipment (2,614) (11,015)
Additional payment for business acquired - (750)
Proceeds from sale of subsidiary - 4,247
----------- ----------
Net cash used in
investing activities (2,614) (7,518)
----------- ----------
Cash flows from financing activities:
Notes payable (2,949) 826
Proceeds from exercise of stock options - 57
----------- ----------
Net cash provided by (used in)
financing activities (2,949) 883
----------- ----------
Net increase in cash 394 380
Cash and cash equivalents at beginning of period 737 1,902
----------- ----------
Cash and cash equivalents at end of period $ 1,131 $ 2,282
=========== ==========
See accompanying notes to consolidated financial statements
SUPERIOR ENERGY SERVICES, INC.
AND SUBSIDIARIES
Notes to Unaudited Condensed Consolidated Financial Statements
Three Months Ended March 31, 1999 and 1998
(1) BASIS OF PRESENTATION
----------------------
Certain information and footnote disclosures normally in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to the rules and regulations of the Securities
and Exchange Commission; however, management believes the disclosures which are
made are adequate to make the information presented not misleading. These
financial statements and footnotes should be read in conjunction with the
financial statements and notes thereto included in the Superior Energy
Services, Inc. (the Company or Superior) Annual Report on Form 10-KSB for the
year ended December 31, 1998 and the accompanying notes and Management's
Discussion and Analysis of Financial Condition and Results of Operation.
The financial information for the three months ended March 31, 1999 and 1998,
has not been audited. However, in the opinion of management, all adjustments
(which include only normal recurring adjustments) necessary to present fairly
the results of operations for the period presented have been included therein.
The results of operations for the first three months of the year are not
necessarily indicative of the results of operations, which might be expected
for the entire year. Certain previously reported amounts have been
reclassified to conform to the 1999 presentation.
(2) BUSINESS COMBINATIONS
---------------------
In 1998, the Company acquired all of the outstanding stock of three companies
for an aggregate $3,857,000 cash. Additional cash consideration, if any, will
be based upon a multiple of four times the respective acquired company's
average EBITDA (earnings before interest, income taxes, depreciation and
amortization expense) over a three year period from the date of acquisition,
less certain adjustments. In no event, will the aggregate additional
consideration exceed $50,143,000. If the overall current industry activity
levels continue, the additional consideration would be materially less than the
maximum consideration. The additional consideration is not reflected in the
respective company's purchase price. The contingent consideration, if paid,
will be capitalized as additional purchase price. Each of the acquisitions
were accounted for as a purchase and the results of operations of the acquired
companies have been included from their respective acquisition dates. In the
first quarter of 1998, the Company sold Baytron, Inc. for a gain of
approximately $1.2 million.
The following unaudited pro forma information for the three months ended March
31, 1998, presents a summary of consolidated results of operations as if the
acquisitions and the sale of the subsidiary made in 1998 had occurred on
January 1, 1998 with pro forma adjustments to give effect to amortization of
goodwill, depreciation and certain other adjustments, together with related
income tax effects (in thousands, except per share amounts):
THREE MONTHS
Revenues $ 26,411
=========
Net income $ 4,560
=========
Basic earnings per share $ 0.16
=========
Diluted earnings per share $ 0.15
=========
The above pro forma information is not necessarily indicative of the results of
operations as they would have been had the acquisitions been effected on
January 1, 1998.
(3) SEGMENT INFORMATION
-------------------
In 1998, the Company adopted Statement of Financial Accounting Standard (FAS)
No. 131, Disclosures about Segments of an Enterprise and Related Information.
The Company's reportable segments are grouped by products and services as
follows: rental tools, well services and other. Each segment offers unique
products and services within the oilfield services industry. Rental tools
segment sells and rents specialized equipment for use with onshore and offshore
oil and gas well drilling, completion, production and workover activities.
Well services segment provides plug and abandonment services, electric and
mechanical wireline services and tank cleaning. The other segment manufactures
and sells computerized electronic and pressure control equipment for the oil
and gas industry, and manufactures, sells and rents oil spill containment
equipment. All the segments operate primarily in the gulf coast region.
Summarized financial information concerning the Company's segments for the
three months ended March 31, 1999 and 1998 is shown in the following tables (in
thousands):
1999 Rental Well Unallocated Consolidated
- ---- Tools Services Other Total Amount Total
--------------------------------------------------------------------------------------
Revenues $ 13,077 $ 4,642 $ 323 $ 18,042 $ - $ 18,042
Costs of services 4,527 2,844 230 7,601 - 7,601
Depreciation and
amortization 1,803 294 45 2,142 - 2,142
General and
administrative 4,326 1,493 330 6,149 - 6,149
Operating income 2,421 11 (282) 2,150 - 2,150
Interest - - - - 500 500
--------------------------------------------------------------------------------------
Income before income taxes $ 2,421 $ 11 $ (282) $ 2,150 $ (500) $ 1,650
======================================================================================
1998 Rental Well Unallocated Consolidated
- ---- Tools Services Other Total Amount Total
--------------------------------------------------------------------------------------
Revenues $ 13,691 $ 7,602 $ 1,409 $ 22,702 $ - 22,702
Costs of services 4,734 4,393 435 9,562 - 9,562
Depreciation and
amortization 1,294 217 150 1,661 - 1,661
General and administrative 3,484 1,036 677 5,197 - 5,197
Operating income 4,179 1,956 147 6,282 - 6,282
Interest - - - - 230 230
Gain on sale of subsidiary - - 1,176 1,176 - 1,176
--------------------------------------------------------------------------------------
Income before income taxes $ 4,179 1,956 1,323 7,458 (230) 7,228
======================================================================================
(4) COMMITMENTS AND CONTINGENCIES
-----------------------------
From time to time, the Company is involved in litigation arising out of
operations in the normal course of business. In management's opinion, the
Company is not involved in any litigation, the outcome of which would have a
material effect on the financial position, results of operations or liquidity
of the Company.
(5) ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
------------------------------------------------------------
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (FAS) No. 133, Accounting for Derivative
Instruments and Hedging Activities. FAS No. 133 is effective for all fiscal
quarters of fiscal years beginning after June 15, 1999 and establishes
accounting and reporting standards for derivative instruments, including
certain derivative instruments embedded in other contracts, and for hedging
activities. FAS No. 133 requires that all derivative instruments be recorded
on the balance sheet at their fair value. Changes in the fair value of
derivatives are to be recorded each period in current earnings or other
comprehensive income, depending on whether a derivative is designated as part
of a hedge transaction and, if it is, the type of hedge transaction. Earlier
application of the provisions of the Statement is encouraged and is permitted
as of the beginning of any fiscal quarter that begins after the issuance of the
Statement. Due to the fact that the Company does not currently use derivative
instruments, adoption of the Statement will not have a material effect on
Superior's results of operations, financial position, or liquidity.
(5) SUBSEQUENT EVENT
----------------
On April 20, 1999, Superior entered into a definitive agreement (Merger
Agreement) to merge a wholly-owned Superior subsidiary with and into Cardinal
Holding Corporation (Cardinal) in a stock transaction, pursuant to which
Cardinal would become a wholly-owned subsidiary of Superior. The terms of the
Merger Agreement provide that, at the time of the merger, all of the
outstanding shares of Cardinal capital stock will be converted into the right
to receive in the aggregate a number of shares of Superior Common Stock equal
to 51% of the then outstanding Superior Common Stock after giving effect to
such issuance, calculated on a fully diluted basis. The number of shares of
Superior Common Stock that will be issued upon consummation of the merger will
be calculated based on the number of shares of Superior Common Stock that will
be used by Superior to calculate its fully diluted earnings per share in
accordance with generally accepted accounting principles for its fiscal quarter
ending June 30, 1999.
The Merger Agreement contains certain terms and conditions to the merger.
Prior to the consummation of the merger, Superior must obtain a new credit
facility, containing usual and customary covenants, mutually agreed upon by
Superior and Cardinal, in a principal amount that will produce proceeds
sufficient to repay or refinance certain existing indebtedness of both Cardinal
and Superior. The merger is also conditioned upon Cardinal's completion of a
private placement of $45 million of equity to the current holders of Cardinal
capital stock or other institutional investors, the net proceeds of which will
be used to reduce Cardinal's indebtedness upon consummation of the merger, and
the merger is subject to other usual and customary conditions, including
stockholder approval. Assuming all the conditions are met, the merger is
scheduled to close in the first half of the third quarter of 1999.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
---------------------------------------------------------------
RESULTS OF OPERATION
--------------------
OVERVIEW
- --------
The demand for Superior's rental tools and well services is primarily a
function of the oil and gas exploration and workover activity in the Gulf of
Mexico and along the gulf coast. The level of oilfield activity is affected in
turn by the willingness of oil and gas companies to make capital expenditures
for the exploration, development and production of oil and natural gas, and the
levels of such capital expenditures are influenced by oil and gas prices, the
cost of exploring for, producing and delivering oil and gas, the sale and
expiration dates of leases in the United States, the discovery rate of new oil
and gas reserves, local and international political and economic conditions and
the ability of oil and gas companies to generate capital. Demand for
Superior's plug and abandonment services is primarily a function of the number
of offshore producing wells that have ceased to be commercially productive,
increased environmental awareness and the desire of oil and gas companies to
minimize abandonment liabilities.
The oilfield services industry experienced a significant decline in activity in
the last half of 1998 which has continued into the first quarter of 1999.
Superior's rental tool business has been impacted, but not as much as many
other areas of the oilfield service industry because it is primarily
concentrated on workover activity and deep water drilling projects which have
not been affected as much as other areas of the industry. Superior's well
services segment has been adversely affected as some major and independent oil
and gas companies have elected to defer making these expenditures. However, as
a result of these deferrals and increased depletion rates, the backlog of wells
requiring plug and abandonment continues to increase. Should the decline in
overall industry activity levels continue, it could have a material adverse
effect on Superior's financial condition and results of operations.
COMPARISON OF THE RESULTS OF OPERATIONS FOR THE QUARTERS ENDED MARCH 31, 1999
- -----------------------------------------------------------------------------
AND 1998
--------
The Company's revenues were $18 million for the quarter ended March 31, 1999 as
compared to $22.7 million for the same period in 1998. In the first quarter of
1999, the Company continued to be affected by the downturn in industry
activity, which began in the last half of 1998. The decline in revenue is
primarily attributable to the well services segment since it is more
susceptible to the major and independent oil and gas companies' deferment of
discretionary spending. The rental tools segment's revenue has not been as
adversely affected by industry conditions as a result of its focus on workover,
remediation and deep water drilling activity. Although the Company's revenues
declined in the first quarter of 1999 compared to the same period in 1998, the
Company's gross margin remained constant at 58% for both quarters.
Depreciation and amortization increased 29%, to $2.1 million, for the three
months ended March 31, 1999 from $1.7 million for the three months ended March
31, 1998. Most of the increase resulted from the larger asset base that has
resulted from the Company's 1998 acquisitions and capital expenditures.
General and administrative expenses increased 18%, to $6.1 million, for the
first quarter of 1999 as compared to $5.2 million for the same period of 1998.
The increase is the result of the 1998 acquisitions completed during the second
and third quarters in 1998.
Net income for the quarter ended March 31, 1999 decreased 77.2% to $1 million
as compared to $4.5 million for the comparable period last year. While the
$1.2 million gain on the sale of subsidiary increased the net income in the
first quarter of 1998, the Company's results for the first quarter of 1999
reflected the impact of the economic slowdown in the oil and gas industry and
customers' decisions to limit or defer investments in exploration, drilling,
production and plug and abandonment services.
CAPITAL RESOURCES AND LIQUIDITY
- -------------------------------
For the three months ended March 31, 1999, the Company had net income of $1
million and net cash provided by operating activities of $6 million, compared
to $4.5 million and $7 million, respectively, for the same period in 1998.
The Company's EBITDA decreased to $4.3 million, as compared to $7.9 million,
exclusive of the gain on sale of a subsidiary, for the same period in 1998.
The decrease in net income, cash flow and EBITDA was primarily the result of
the significant decline in overall industry activity in the last half of 1998
which has continued into the first quarter of 1999.
The Company maintains a bank credit facility which provides for a revolving
line of credit up to $45 million, matures on April 30, 2000, and bears interest
at an annual rate of LIBOR plus a margin that depends on the Company's debt
coverage ratio (currently 6.76% per annum). As of April 30, 1999, there was
$24.5 million outstanding under the bank credit facility. Borrowings under the
bank credit facility are available for acquisitions, working capital, letters
of credit and general corporate purposes. Indebtedness under the bank credit
facility is guaranteed by the Company's subsidiaries, collateralized by
substantially all of the assets of the Company and its subsidiaries, and a
pledge of all the common stock of the Company's subsidiaries. Pursuant to the
bank credit facility, the Company has also agreed to maintain certain financial
ratios. The bank credit facility also imposes certain limitations on the
ability of the Company to make capital expenditures, pay dividends or other
distributions to shareholders, make acquisitions or incur indebtedness outside
of the bank credit facility.
In the first three months of 1999, the Company made capital expenditures of
$2.6 million primarily for additional rental equipment. Management currently
believes that the Company will make additional capital expenditures, excluding
acquisitions, of approximately $5 to $7 million in 1999 primarily to further
expand its rental tool inventory. The Company believes that cash generated
from operations and availability under the bank credit facility will provide
sufficient funds for the Company's identified capital projects and working
capital requirements. However, part of the Company's strategy involves the
acquisition of companies that have products and services complementary to the
Company's existing base of operations. Depending on the size of any future
acquisitions, the Company may require additional equity financing and debt
financing possibly in excess of the Company's bank credit facility.
On April 20, 1999, Superior entered into a definitive agreement (Merger
Agreement) to merge a wholly-owned Superior subsidiary with and into Cardinal
Holding Corporation (Cardinal) in a stock transaction, pursuant to which
Cardinal would become a wholly-owned subsidiary of Superior. The terms of the
Merger Agreement provide that, at the time of the merger, all of the
outstanding shares of Cardinal capital stock will be converted into the right
to receive in the aggregate a number of shares of Superior Common Stock equal
to 51% of the then outstanding Superior Common Stock after giving effect to
such issuance, calculated on a fully diluted basis. The number of shares of
Superior Common Stock that will be issued upon consummation of the merger will
be calculated based on the number of shares of Superior Common Stock that will
be used by Superior to calculate its fully diluted earnings per share in
accordance with generally accepted accounting principles for its fiscal quarter
ending June 30, 1999.
The Merger Agreement contains certain terms and conditions to the merger.
Prior to the consummation of the merger, Superior must obtain a new credit
facility, containing usual and customary covenants, mutually agreed upon by
Superior and Cardinal, in a principal amount that will produce proceeds
sufficient to repay or refinance certain existing indebtedness of both Cardinal
and Superior. The merger is also conditioned upon Cardinal's completion of a
private placement of $45 million of equity to the current holders of Cardinal
capital stock or other institutional investors, the net proceeds of which will
be used to reduce Cardinal's indebtedness upon consummation of the merger, and
the merger is subject to other usual and customary conditions, including
stockholder approval. Assuming all the conditions are met, the merger is
scheduled to close in the first half of the third quarter of 1999.
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (FAS) No. 133, Accounting for Derivative
Instruments and Hedging Activities. FAS 133 is effective for all fiscal
quarters of fiscal years beginning after June 15, 1999 and establishes
accounting and reporting standards for derivative instruments, including
certain derivative instruments embedded in other contracts, and for hedging
activities. FAS 133 requires that all derivative instruments be recorded on
the balance sheet at their fair value. Changes in the fair value of
derivatives are to be recorded each period in current earning or other
comprehensive income, depending on whether a derivative is designated as part
of a hedge transaction and, if it is, the type of hedge transaction. Earlier
application of the provisions of the Statement is encouraged and is permitted
as of the beginning of any fiscal quarter that begins after the issuance of the
Statement. Due to the fact that the Company does not currently use derivative
instruments, adoption of the Statement will not have a material effect on
Superior's results of operations, financial position, or liquidity.
YEAR 2000
- ---------
The Company is assessing both the cost of addressing and the cost or the
consequence of incomplete or untimely resolution of the Year 2000 issue. This
process includes (i) the development of Year 2000 awareness, (ii) a review to
identify systems that could be affected by the Year 2000 issue, (iii) an
assessment of potential risk factors (including non-compliance by the Company's
suppliers, subcontractors and customers), (iv) the allocation of required
resources, (v) a determination of the extent of remediation work required, (vi)
the development of an implementation plan and time table, and (vii) the
development of contingency plans.
The Company makes use of computers in its processing of accounting, financial,
administrative, and management information. Additionally, the Company uses
computers as a tool for its employees to communicate among themselves and with
other persons outside the organization. The Company will contact its key
vendors and customers to assess their efforts and progress with Year 2000
issues. The Company anticipates completion of its evaluation of non-
information technology equipment, key vendors and suppliers and any remedial
action and/or a contingency plan, if necessary, by August 31, 1999.
The Company is in the process of analyzing and evaluating the operational
problems and costs that would be reasonably likely to result from the failure
by the Company or certain third parties to complete efforts necessary to
achieve Year 2000 compliance on a timely basis. The Company is in the process
of evaluating all the material information technology ("IT") and non-IT systems
that it uses directly in its operations. The Company presently believes that
the year 2000 issue will not pose significant operational problems for the
Company's computer systems. However, if all significant Year 2000 issues are
not properly identified, or assessment, remediation and testing of its systems
are not effected timely, the Year 2000 issue could potentially have an adverse
impact on the Company's operations and financial condition. Among other
things, the Company could be impacted by the inability of its customers to
accurately and timely pay invoices, the Company's inability to access necessary
capital from lenders or other sources when required, and the inability of the
Company's significant suppliers, subcontractors and others to provide the
necessary materials, services or systems required to operate the Company's
business.
The Company believes that it will be able to implement successfully the
changes necessary to address the Year 2000 issues with reliance on its third
party vendors and does not expect the cost of such changes to have a material
impact on the Company's financial position, results of operations or cash
flows in future periods.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) The following exhibit is filed with this Form 10-Q
2.1 Certificate of Incorporation (Incorporated by reference to the
Company's Form 10-QSB for the quarter ended March 31, 1996)
2.2 Bylaws (Incorporated by reference to the Company's Form SB-2
(Registration Statement No. 333-15987))
27.1 Financial Data Schedule
(b) The Company did not file any reports on Form 8-K during the quarter
ended March 31, 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.
SUPERIOR ENERGY SERVICES, INC.
Date: MAY 14, 1999 BY: /S/ TERENCE E. HALL
---------------------------
Terence E. Hall
Chairman of the Board,
Chief Executive Officer
and President
(Principal Executive Officer)
Date: MAY 14, 1999 BY: /S/ ROBERT S. TAYLOR
---------------------------
Robert S. Taylor
Chief Financial Officer
(Principal Financial
and Accounting Officer)