SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ___________ TO ____________
COMMISSION FILE NUMBER 0-25508
RTW, INC.
(Exact name of registrant as specified in its charter)
MINNESOTA 41-1440870
- -------------------------------- -------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
8500 NORMANDALE LAKE BOULEVARD, SUITE 1400
BLOOMINGTON, MN 55437
(Address of principal executive offices and zip code)
(612)-893-0403
(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
----- -----
At May 1, 1996, approximately 7,820,000 shares of Comon Stock were outstanding.
After adjusting for the effect of a 3-for-2 stock split in the form of a
50 percent stock dividend to shareholders of record on May 6, 1996,
approximately 11,730,000 shares of Common Stock were outstanding.
TABLE OF CONTENTS
PAGE
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PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements and Notes (Unaudited) 3
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
Exhibits 15
2
ITEM 1: FINANCIAL STATEMENTS
INDEX TO FINANCIAL STATEMENTS
PAGE
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FINANCIAL STATEMENTS
Consolidated Balance Sheets - March 31, 1996 and December 31, 1995 4
Consolidated Statements of Income - Three months ended
March 31, 1996 and 1995 5
Consolidated Statements of Cash Flows - Three months ended
March 31, 1996 and 1995 6
Notes to Consolidated Financial Statements 7
3
RTW, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1996 AND DECEMBER 31,1995
(In thousands, except share data)
MARCH 31, DECEMBER 31,
1996 1995
-------------- --------------
(Unaudited)
ASSETS
Investments:
Held-to-maturity, at amortized cost, fair
value of $57,114 and $59,571 $ 56,612 $ 57,662
Available-for-sale, at fair value,
amortized cost of $20,472 and $10,674 20,435 10,868
---------- ----------
Total investments 77,047 68,530
Cash and cash equivalents 10,960 12,962
Accrued investment income 1,326 1,376
Premiums receivable, less allowance of
$100 and $73 4,101 2,903
Reinsurance receivable 7,585 8,312
Reinsurance premiums receivable, net 1,818 1,569
Deferred policy acquisition costs 1,210 858
Furniture and equipment, net 2,090 1,957
Other assets 3,387 2,657
---------- ----------
$ 109,524 $ 101,124
---------- ----------
---------- ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Unpaid claim and claim settlement expenses $ 39,487 $ 37,138
Unearned premiums 11,958 9,606
Accrued expenses and other liabilities 5,314 4,051
Notes payable, including related party notes
of $85 and $85 8,944 8,891
---------- ----------
Total liabilities 65,703 59,686
Shareholders' equity:
Common Stock, no par value; authorized
25,000,000 shares; issued and outstanding
11,729,226 at March 31, 1996 and 11,709,199
shares at December 31, 1995 27,854 27,606
Retained earnings 15,991 13,708
Unrealized appreciation (depreciation) on
securities available-for-sale (24) 124
---------- ----------
Total shareholders' equity 43,821 41,438
---------- ----------
$ 109,524 $ 101,124
---------- ----------
---------- ----------
Note: The Balance Sheet at December 31, 1995 was derived from the audited
Financial Statements at that date.
See notes to consolidated financial statements.
4
RTW, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(Unaudited, in thousands, except per share data)
FOR THE THREE MONTHS ENDED
MARCH 31,
--------------------------
1996 1995
------- -------
REVENUES:
Premiums earned $ 13,764 $ 10,308
Investment income 1,288 560
--------- ---------
Total revenues 15,052 10,868
EXPENSES:
Claim and claim settlement expenses 7,923 6,649
Policy acquisition costs 1,355 893
General and administrative expenses 1,844 1,242
--------- ---------
Total expenses 11,122 8,784
--------- ---------
Income from operations 3,930 2,084
Interest expense 274 323
--------- ---------
Income before income taxes 3,656 1,761
Provision for income taxes 1,373 644
--------- ---------
Net income $ 2,283 $ 1,117
--------- ---------
--------- ---------
Net income per common and
common share equivalent $ 0.19 $ 0.13
--------- ---------
--------- ---------
See notes to consolidated financial statements.
5
RTW, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(Unaudited, in thousands)
FOR THE THREE MONTHS ENDED
MARCH 31,
--------------------------
1996 1995
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Reconciliation of net income to net cash provided by
operating activities:
Net income $ 2,283 $ 1,117
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 170 135
Deferred income taxes (503) (478)
Changes in assets and liabilities:
Premiums receivable, net of unearned premiums 1,154 1,318
Amounts due from reinsurers 727 (260)
Unpaid claim and claim settlement expenses 2,349 2,872
Other, net 645 850
--------- ---------
Net cash provided by operating activities 6,825 5,554
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of held-to-maturity securities -- (2,358)
Maturities of held-to-maturity securities 1,000 --
Purchases of available-for-sale securities (9,825) (2,569)
Purchases of furniture and equipment (250) (433)
--------- ---------
Net cash used in investing activities (9,075) (5,360)
CASH FLOWS FROM FINANCING ACTIVITIES:
Equity financing costs -- (279)
Stock options and warrants exercised 12 --
Sales of Common Stock to ESOP 236 --
--------- ---------
Net cash provided by (used in)
financing activities 248 (279)
--------- ---------
NET DECREASE IN CASH AND CASH EQUIVALENTS (2,002) (85)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 12,962 3,083
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $10,960 $ 2,998
--------- ---------
--------- ---------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 236 $ 301
--------- ---------
--------- ---------
Income taxes $ 363 $ 360
--------- ---------
--------- ---------
See notes to consolidated financial statements.
6
RTW, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(Unaudited)
NOTE A - BASIS OF PRESENTATION
The accompanying consolidated financial statements have been prepared in
accordance with generally accepted accounting principles and the instructions to
Form 10-Q for interim financial information. Accordingly, they do not include
all of the information and notes required by generally accepted accounting
principles for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. For further information, refer to the
financial statements and notes thereto included in the RTW, Inc. Annual Report
to Shareholders for the year ended December 31, 1995.
The financial statements for the three months ended March 31, 1995 have been
reclassified to conform to the presentation at March 31, 1996. The
reclassifications had no effect on net income.
NOTE B - STOCK SPLIT
On April 25, 1996, the Company's board of directors approved a 3-for-2 stock
split in the form of a 50 percent stock dividend to shareholders of record on
the close of business on May 6, 1996. The shares will be distributed to
shareholders on May 17, 1996. All share and per share information has been
restated to reflect the stock split.
7
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
The following analysis of the consolidated results of operations and financial
condition of RTW, Inc. (the "Company") and its wholly-owned subsidiary, American
Compensation Insurance Company ("ACIC"), should be read in conjunction with the
Company's consolidated financial statements and notes thereto at March 31, 1996
and December 31, 1995 and the three months ended March 31, 1996 and 1995.
The Company's revenues consist of premiums earned and investment income.
Premiums earned during a period are the gross premiums earned by the Company on
outstanding workers' compensation policies less the amount of any premiums ceded
to reinsurers. Investment income represents the income on the Company's
investment portfolio.
The Company's expenses are comprised of claim and claim settlement expenses,
policy acquisition costs, general and administrative expenses and income taxes.
RESULTS OF OPERATIONS
The following table summarizes the components of revenues for the three months
ended March 31, 1996 and 1995 and premiums in force at March 31, 1996 and 1995:
THREE MONTHS ENDED
MARCH 31,
----------------------
1996 1995
-------- -------
(In thousands)
Gross premiums earned $ 14,040 $ 10,653
Premiums ceded - excess of loss reinsurance (276) (345)
--------- ---------
Premiums earned 13,764 10,308
Investment income 1,288 560
--------- ---------
Total revenues $ 15,052 $ 10,868
--------- ---------
--------- ---------
Premiums in force at March 31:
Minnesota $ 46,800 $ 42,600
Colorado 8,700 800
Missouri 600 --
--------- ---------
Total in force at March 31 $ 56,100 $ 43,400
--------- ---------
--------- ---------
PREMIUMS EARNED. Gross premiums earned increased approximately 31.8% to
$14.0 million in the first quarter of 1996 from $10.7 million in the first
quarter of 1995. The increase in gross premiums was due to an increase in
the amount of premiums in force as the Company's customer base grew to 1,994
customers at March 31, 1996 from 381 customers at March 31, 1995. The
Company's average annual premium decreased to approximately $28,000 at
March 31, 1996 from $114,000 at March 31, 1995 due to increased association
business with smaller average premiums written. As a result of being
successful in lowering customers loss experience and increased competition in
the marketplace that began in late 1995, the Company is experiencing reduced
premiums on renewal accounts. The impact of decreasing customer loss
experience will continue to result in reduced premiums generated on
renewal policies.
Premiums ceded to reinsurers decreased approximately 20.0% to $276,000 in the
first quarter of 1996 from $345,000 in the first quarter of 1995. The decrease
in premiums ceded to reinsurers resulted from the increase to $1.0 million in
1996 from $450,000 in 1995 in the Minnesota retention level under the Minnesota
Workers' Compensation Reinsurance Association (the "WCRA") excess of loss
reinsurance coverage. The Company expects a continued decline in premiums ceded
due a reduction in the assessment rate charged by the Minnesota WCRA beginning
in the third quarter of 1996. Colorado and Missouri retention levels remained
at $500,000 in 1996. Premiums earned
8
increased approximately 33.5% to $13.8 million in the first quarter of 1996
from $10.3 million in the first quarter of 1995 as a result of these changes.
INVESTMENT INCOME. Investment income increased to $1.3 million in the first
quarter of 1996 from $560,000 in the first quarter of 1995 due to increased
funds available for investment and increased yields on amounts invested. Funds
available for investment increased to $77.0 million at March 31, 1996 from
$38.0 million at March 31, 1995 due to the addition of approximately
$27.0 million net proceeds from a $29.9 million initial public offering in
April 1995 and increased net cash provided by operating activities. Investment
yields increased to 6.1% for the quarter ended March 31, 1996 from 5.8% for
the quarter ended March 31, 1995 due to higher interest rates on U.S. Treasury
securities purchased during the remainder of 1995 from rates on U.S. Treasury
Securities purchased in prior years.
CLAIM AND CLAIM SETTLEMENT EXPENSES. Claim and claim settlement expenses
increased approximately 19.2% to $7.9 million in the first quarter of 1996 from
$6.6 million in the first quarter of 1995, due to the increase in premiums in
force. As a percentage of premiums earned, claim and claim settlement expenses
decreased to 57.6% for the first quarter of 1996 from 64.5% for the first
quarter of 1995. In the first quarter of 1996, the Company reduced its estimate
of pre-1995 unpaid claim and claim settlement expense liability, which resulted
in a $425,000 reduction in first quarter 1996 claim and claim settlement
expense. The decrease in claim and claim settlement expense as a percentage of
premiums earned represents favorable development reflecting the Company's
ability to manage and close prior years' claims more favorably than previously
anticipated. The Company believes that continued application of its claims
management technology and methods on prior years' open claims will continue to
benefit future periods.
POLICY ACQUISITION COSTS. The following table summarizes policy acquisition
costs for the three months ending March 31, 1996 and 1995:
THREE MONTHS ENDED
MARCH 31,
-----------------------
1996 1995
-------- -------
(In thousands)
Commission expense $ 886 $ 529
Premium tax expense 298 213
Other policy acquisition costs 396 166
------- -------
Direct policy acquisition costs 1,580 908
Ceding commissions
Favorable claims experience adjustments
for 1992 to 1994 (225) (15)
------- -------
Policy acquisition costs $1,355 $ 893
------- -------
------- -------
Commission expense increased to 6.3% of gross premiums earned in the first
quarter of 1996 from 5.0% in the first quarter of 1995. Commission expense
increased as a result of new marketing programs instituted in 1995 and 1996 and
a higher average commission paid to agents. The Company initiated marketing
programs in the fourth quarter of 1995 and the first quarter of 1996 that
increased commission rates to agents and expects commission rates to remain
consistent with results attained in the first quarter of 1996 or increase
slightly for the balance of the year. Premium tax expense increased slightly to
2.1% of gross premiums earned in the first quarter of 1996 from 2.0% in the
first quarter of 1995 due to higher premium tax rates paid in Colorado. The
Company expects premium tax expense as a percent of gross premiums earned to
remain consistent with the results attained during the first quarter of 1996 for
the balance of 1996. Other policy acquisition costs increased to 2.8% of gross
premiums earned in the first quarter of 1996 from 1.6% in the first quarter of
1995 due to increased focus on marketing programs as the Company expands into
new states and continues to grow in its more established markets and increased
personnel costs necessary for the growth in in force premium.
Ceding commissions increased to a benefit of $225,000 in the first quarter of
1996 from a benefit of $15,000 in the first quarter of 1995 representing
favorable adjustments recognized by the Company as a result of continued
favorable claims experience for accident years 1993 and 1994.
9
GENERAL AND ADMINISTRATIVE EXPENSES. The Company's general and administrative
expenses increased to $1.8 million in the first quarter of 1996 from $1.2
million in the first quarter of 1995. As a percentage of premiums earned,
general and administrative expenses increased to 13.4% for the first quarter of
1996 from 12.0% for the first quarter of 1995. This increase reflects
additional personnel costs for new employees, higher compensation for existing
employees, expenses incurred for expansion in Missouri, and additional fees for
professional services. The Company anticipates that general and administrative
expenses will continue to increase in 1996 due to new office expansion in
Missouri.
INTEREST EXPENSE. Interest expense decreased to $274,000 in the first quarter
of 1996 from $323,000 in the first quarter of 1995 due to principal payments on
the Series 1991A, Series 1991B and Senior Notes totaling approximately $1.4
million in December 1995. Notes payable decreased to $8.9 million at March 31,
1996 from $10.1 million at March 31, 1995 as a result of the payments. Interest
expense is expected to remain consistent with the first quarter of 1996 results
for the balance of the year.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of cash are premiums and investment income while
its cash requirements consist primarily of payments for claim and claim
settlement expenses, policy acquisition costs, general and administrative
expenses, income taxes, capital expenditures, principal repayment and debt
service on its outstanding Senior Notes and Series 1991A and 1991B Notes. The
Company generates positive net cash from operations due, in part, to the timing
differences between the receipt of premiums and the payment of claim and claim
settlement expenses. Cash is invested pending future payments for such
expenses. The Company's investment portfolio consists of U.S. Treasury and
Agency Securities. Cash and cash equivalents consist primarily of U.S. Treasury
or Agency Securities acquired under repurchase agreements with maturities of
90 days or less, with the remaining balances in cash and a money market fund
that invests in short-term government securities. The Company does not invest
in derivative securities.
Cash provided by operating activities for the three months ended March 31,
1996 was $6.8 million primarily as a result of the Company's net income of
$2.3 million, an increase of $2.3 million in claim and claim settlement
expenses which are non-cash accruals for future claims, an increase of
$1.2 million in unearned premiums, net of premiums receivable and a decrease
in amounts due from reinsurers of $727,000. Net cash used in investing
activities was $9.1 million primarily as a result of purchases of $9.8 of
available-for-sale securities and purchases of furniture and equipment
of $250,000 offset by maturities of held-to-maturity securities of
$1.0 million. Net cash provided by financing activities was $248,000
primarily the result of sales of common stock to the Company's ESOP.
The Company's investments increased to $77.0 million at March 31, 1996 from
$68.5 million at December 31, 1995 from cash provided by operating and financing
activities. Of the Company's investments at March 31, 1996, $56.6 million were
classified as held-to-maturity and valued at amortized cost, while $20.4 were
classified as available-for-sale and valued at fair value. All of the Company's
investment securities at March 31, 1996 were U.S. Treasury or Agency
Securities. The amortized cost and estimated fair value of held-to-maturity
and available-for-sale securities at March 31, 1996 by contractual
maturities were as follows:
HELD-TO-MATURITY AVAILABLE-FOR-SALE COMBINED
---------------------- -------------------- --------------------
AMORTIZED FAIR AMORTIZED FAIR AMORTIZED FAIR
MATURING: COST VALUE COST VALUE COST VALUE
- -------- --------- ----- --------- ----- --------- -----
(In thousands)
One year or less $ 2,512 $ 2,518 $ -- $ -- $ 2,512 $ 2,518
One year through five years 44,403 44,527 15,624 15,604 60,027 60,131
Five years through ten years 9,697 10,069 4,848 4,831 14,545 14,900
-------- -------- ------- ------- ------- -------
Total $56,612 $57,114 $20,472 $20,435 $77,084 $77,549
-------- -------- ------- ------- ------- -------
-------- -------- ------- ------- ------- -------
The Company's need for additional capital is primarily the result of regulations
which require certain ratios of capital to premiums written. In order for ACIC
to begin operations, the Company raised capital and contributed it to ACIC. As
ACIC grew, additional capital was required to support the higher premium levels.
As a result, the
10
Company raised approximately $27.0 million in April 1995 through an initial
public offering and $9.2 million in January 1994 through the issuance of Senior
Notes and contributed $18.0 million in 1995 and $9.0 million in 1994 to ACIC.
In the future, the Company expects that its need for additional capital will be
primarily related to the growth of ACIC and the need to maintain appropriate
capital to premium ratios as defined by state regulatory bodies. As an
alternative to raising additional capital, the Company believes it could secure
quota-share or other reinsurance agreements which would have the effect of
reducing the ratio of premiums to capital and could be used to satisfy state
regulatory requirements. The Company entered into its reinsurance agreements
during 1992, 1993 and 1994 for that purpose.
The Company is organized as an operating corporation that has a wholly owned
insurance company subsidiary, ACIC, for which the Company provides all operating
functions pursuant to a service agreement (the "Service Agreement"). Under the
Service Agreement, ACIC pays the Company a fee, based on gross premiums earned,
for managed care, administration, claims adjustment and underwriting services.
State insurance regulations limit distributions, including dividends, from ACIC
to the Company. The maximum amount of dividends that can be paid by ACIC to the
Company in any year is equal to the lesser of: (i) 10% of ACIC's statutory
surplus as of the end of the previous fiscal year, and (ii) the statutory net
gain from operations (not including realized capital gains) of ACIC in its most
recent fiscal year. Based on this limitation, the maximum dividend that ACIC
could pay to the Company in 1996, without regulatory approval, is $3.6 million.
ACIC may be subject to more restrictive limitations on dividends as it enters
additional states. ACIC has never paid a dividend to the Company and, for the
foreseeable future, the Company intends to retain capital in ACIC to enable the
Company to expand its operations.
The Company believes that cash flow generated by its operations and its cash and
investment balances will be sufficient to fund continuing operations, principal
repayments of $2.4 million due in December 1996, debt service on its outstanding
Senior Notes, Series 1991A and Series 1991B Notes and capital expenditures for
the next 12 months.
NAIC RISK-BASED CAPITAL STANDARDS
The National Association of Insurance Commissioners (NAIC) has adopted risk-
based capital standards to determine the capital requirements of a property and
casualty insurance carrier based upon the risks inherent in its operations. The
standards require the computation of a risk-based capital amount which is then
compared to a carrier's actual total adjusted capital. The computation involves
applying factors to various financial data to address four primary risks: asset
risk, insurance underwriting risk, credit risk and off-balance sheet risk.
These standards provide for regulatory intervention when the percentage of total
adjusted capital to authorized control level risk-based capital is below certain
levels. The Company's percentage of total adjusted capital is substantially in
excess of authorized control level risk-based capital.
REGULATION
The Company's insurance subsidiary is subject to substantial regulation by the
governmental agencies in the states in which it is licensed, and will be subject
to such regulation in any state in which it provides workers' compensation
products and services in the future. State regulatory agencies have broad
administrative power with respect to all aspects of the business of the Company
and its insurance subsidiary, including premium rates, benefit levels, policy
forms, dividend payments, capital adequacy and the amount and type of
investments. These regulations are primarily intended to protect covered
employees and policyholders rather than the insurance company. Both the
legislation covering insurance companies and the regulations adopted by state
agencies are subject to change. The Company's insurance subsidiary is currently
licensed to do business in Minnesota, Colorado, Missouri, Michigan and
Pennsylvania.
The National Association of Insurance Commissioners is in the process of
codifying statutory accounting principles. The ultimate completion date and
impact of this project on current statutory policies and practices are not
known.
11
RECENTLY ISSUED ACCOUNTING STANDARDS
In October 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based
Compensation," which was to be effective for the Company beginning January 1,
1996. SFAS No. 123 requires expanded disclosures of stock-based compensation
arrangements with employees and encourages (but does not require) compensation
cost to be measured based on the fair value of the equity instrument awarded.
Companies are permitted, however, to continue to apply APB Opinion No. 25, which
recognizes compensation cost based on the intrinsic value of the equity
instrument awarded. The Company will continue to apply APB Opinion No. 25 to
its stock based compensation awards to employees and will disclose the required
pro forma effect on net income and income per share in the Company's Annual
Report.
12
PART II: OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) LISTING OF EXHIBITS
Exhibit 11 - STATEMENT REGARDING COMPUTATION OF NET INCOME PER
COMMON AND COMMON SHARE EQUIVALENT
13
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.
RTW, INC.
Dated: May 8, 1996 By /s/ David C. Prosser
------------------------------------
David C. Prosser
Chairman, President,
Chief Executive Officer and Director
(Principal Executive Officer)
Dated: May 8, 1996 By /s/ Alfred L. LaTendresse
-------------------------------------
Alfred L. LaTendresse
Secretary, Treasurer and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
14
EXHIBIT INDEX
Exhibit
Number Description Page
- --------- ----------- ----
11 Statement Regarding Computation of Net Income Per
Common and Common Share Equivalent 16
15