FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
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 0-16254
Steel of West Virginia, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 55-0684304
- -------------------------------- ----------------
(State or other jurisdiction I.R.S. Employer
of incorporation or organization) Identification No.
17th Street and 2nd Avenue, Huntington, West Virginia 25703
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(Address of principal executive offices, Zip Code)
(304) 696-8200
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(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 each of the issuer's classes of common
stock, as of June 30, 1997, is as follows:
5,991,276 shares of common stock, par value $.01 per share.
STEEL OF WEST VIRGINIA, INC.
AND SUBSIDIARIES
INDEX
PAGE
NUMBER
PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets as of
June 30, 1997 and December 31, 1996......................... 3
Condensed Consolidated Statements of Income for
the Three-Month and Six-Month Periods Ended
June 30, 1997 and June 30, 1996............................. 4
Condensed Consolidated Statements of Cash Flows
for the Three-Month and Six-Month Periods Ended
June 30, 1997 and June 30, 1996............................. 5
Notes to Condensed Consolidated Financial Statements............ 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.......... 9
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.... 11
Item 6. Exhibits and Reports on Form 8-K....................... 12
2
PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED BALANCE SHEETS
STEEL OF WEST VIRGINIA, INC. AND SUBSIDIARIES
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
JUNE 30 DECEMBER 31
1997 1996
--------- ------------
ASSETS
CURRENT ASSETS
Cash................................................................................. $ 0 $ 0
Receivables, net of allowances of $579
and $599.......................................................................... 11,513 6,579
Inventories.......................................................................... 21,494 17,307
Deferred income taxes................................................................ 3,121 3,121
Other current assets................................................................. 421 220
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TOTAL CURRENT ASSETS............................................ 36,549 27,227
Property, plant, and equipment........................................................... 39,951 33,298
Goodwill................................................................................. 18,111 18,452
Other assets............................................................................. 329 322
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TOTAL ASSETS.................................................... $ 94,940 $ 79,299
--------- ------------
--------- ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Overdraft............................................................................. $ 1,731 $ 1,097
Accounts payable...................................................................... 5,983 4,161
Accrued payroll and benefits payable.................................................. 4,517 3,599
Income taxes payable (refundable)..................................................... 648 (1,146)
Other current liabilities............................................................. 2,237 2,021
Current maturities of long-term debt.................................................. 891 2,434
--------- ------------
TOTAL CURRENT LIABILITIES........................................ 16,007 12,166
Long-term debt........................................................................ 19,774 10,975
Deferred income taxes................................................................. 6,332 6,332
Other long-term liabilities........................................................... 618 819
--------- ------------
TOTAL LIABILITIES................................................ 42,731 30,292
STOCKHOLDERS' EQUITY
Common stock, $.01 par value: 12,000,000
voting shares authorized, 7,096,576 and
7,091,360 issued, including treasury
stock.............................................................................. 71 71
Paid-in capital....................................................................... 26,627 26,627
Treasury stock--1,105,300 shares at cost.............................................. (11,483) (11,483)
Retained earnings..................................................................... 36,994 33,792
--------- ------------
TOTAL STOCKHOLDERS' EQUITY....................................... 52,209 49,007
--------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY......................................... $ 94,940 $ 79,299
--------- ------------
--------- ------------
NOTE: The balance sheet at December 31, 1996, has been derived from the
audited financial statements at that date.
See notes to condensed consolidated financial statements.
3
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
STEEL OF WEST VIRGINIA, INC. AND SUBSIDIARIES
(In thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30 June 30
-------------------- --------------------
1997 1996 1997 1996
--------- --------- --------- ---------
Net sales............................................................. $ 27,923 $ 23,797 $ 52,351 $ 50,444
Cost of sales......................................................... 23,675 21,429 44,042 44,669
--------- --------- --------- ---------
GROSS PROFIT...................................................... 4,248 2,368 8,309 5,775
Selling and administrative expenses................................... 1,646 987 3,055 2,155
Interest Expense...................................................... 235 343 495 708
(Gain)/Loss on disposal of assets..................................... (230) 53 (453) 2,003
Other (income) expense................................................ (276) (156) (343) (254)
--------- -------- --------- ---------
INCOME BEFORE INCOME TAXES............................................ 2,873 1,141 5,555 1,163
Income Taxes.......................................................... (1,216) (523) (2,353) (532)
--------- --------- --------- ---------
NET INCOME........................................................ $ 1,657 $ 618 $ 3,202 $ 631
--------- --------- --------- ---------
--------- --------- --------- ---------
NET INCOME PER COMMON SHARE, based on 5,994,114 and 5,992,987 weighted
average shares of common stock outstanding during the three months
and six months ended June 30, 1997 and 5,986,923 and 6,060,658
weighted average shares of common stock outstanding during the three
months and six months ended June 30, 1996........................... $ .28 $ .10 $ .53 $ .10
--------- --------- --------- ---------
--------- --------- --------- ---------
See notes to condensed consolidated financial statements.
4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
STEEL OF WEST VIRGINIA, INC. AND SUBSIDIARIES
(In thousands)
Three Months Ended Six Months Ended
June 30 June 30
-------------------- --------------------
1997 1996 1997 1996
--------- --------- --------- ---------
CASH FROM OPERATIONS....................................................... $ 689 $ 3,939 $ 1,099 $ 6,448
INVESTMENT ACTIVITIES
Additions to property, plant,
and equipment....................................................... (5,579) (798) (8,989) (1,444)
FINANCING ACTIVITIES
Revolving credit loan.................................................. 4,991 (2,598) 9,226 1,228
Long-term debt repayments.............................................. (201) (1,471) (1,970) (2,942)
Purchase of treasury stock............................................. 0 0 0 (3,500)
--------- --------- --------- ---------
4,790 (4,069) 7,256 (5,214)
--------- --------- --------- ---------
INCREASE (DECREASE) IN CASH............................................ $ (100) $ (928) $ (634) $ (210)
--------- --------- --------- ---------
--------- --------- --------- ---------
See notes to condensed consolidated financial statements.
5
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
STEEL OF WEST VIRGINIA, INC. AND SUBSIDIARIES
June 30, 1997
NOTE A--BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
include the accounts of Steel of West Virginia, Inc. (the "Company") and its
wholly-owned subsidiaries SWVA, Inc. and Marshall Steel, Inc. Such condensed
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 Article 10 of Regulation S-X. Accordingly, they
do not include all of the information and footnotes 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.
Operating results for the three-month and six-month periods ended June 30,
1997 are not necessarily indicative of the results that may be expected for
the year ended December 31, 1997. For further information, refer to the
consolidated financial statements and footnotes thereto included in the
Company's annual report on Form 10-K for the year ended December 31, 1996.
The preparation of the condensed consolidated financial statements in
conformity with generally accepted accounting principles requires that
management make certain estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. Actual results
could differ from those estimates.
Net income per common share is calculated based on 5,994,114 and 5,992,987
weighted average shares of common stock outstanding during the three-month
and six-month periods ended June 30, 1997 and 5,986,923 and 6,060,658
weighted average shares of common stock outstanding during the three-month
and six-month periods ended June 30, 1996. The effect of the Company's stock
option plans was anti-dilutive for all periods presented.
NOTE B--INVENTORIES
Inventories consist of the following (in thousands):
June 30 December 31
1997 1996
--------- ------------
Raw materials................................................... $ 1,737 $ 1,638
Work-in-process................................................. 7,738 6,624
Finished goods.................................................. 12,435 9,103
Manufacturing supplies.......................................... 3,609 3,967
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25,519 21,332
Less LIFO reserve............................................... 4,025 4,025
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$ 21,494 $ 17,307
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--------- ------------
Annually, at the end of each year, management determines inventory levels
based on the taking of a physical inventory. The amount of inventories at
June 30, 1997, has been determined based upon inventory levels indicated by
perpetual inventory accounting records. In addition, an actual valuation of
inventory under the LIFO method can be made only at the end of each year
based on the inventory levels and
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costs at that time. Accordingly, interim LIFO calculations must necessarily
be based on management's estimates of expected year-end inventory levels and
costs. Since these are subject to many forces beyond management's control,
interim results are subject to the final year-end LIFO inventory valuation.
NOTE C--CREDIT ARRANGEMENTS
A summary of indebtedness under the Company's credit arrangements consists of
the following (in thousands):
June 30 December 31
1997 1996
--------- ------------
Term loan I.................................. $ 0 $ 1,120
Term loan II................................. 0 427
1994 Capital expenditure line................ 3,850 4,280
1997 Capital expenditure line 6,000 0
Revolver..................................... 10,531 7,305
Other notes payable.......................... 284 277
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20,665 13,409
Less current maturities...................... (891) (2,434)
--------- -----------
$ 19,774 $ 10,975
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--------- -----------
The Company maintains a senior financing agreement that, as last amended
April 1997, provides for up to $15,000,000 of revolving credit borrowings,
capital expenditure line term loans, and other term loans. The interest rates
on its existing credit lines and term loans vary based on the Chemical Bank
prime rate or LIBOR plus 1-3/4%; and the annual revolving credit line
commitment fee is 1/8% of the unused balance. Under the terms of its senior
financing agreement, the Company is permitted to convert its Capital
Expenditure Line indebtedness to a fixed interest rate. The senior credit
agreement may be terminated by the Company or, on or after January 1, 2001
and upon 90 days written notice, by the lender.
Effective April 1997, the Company's senior lending agreement was amended to
provide, under the terms of an "Additional Capital Expenditure Line," up to
$23,000,000 additional borrowing availability to finance current machinery
and equipment expenditures, governed by a percentage of such expenditures.
Under the terms of the amendment the total borrowings under this new
borrowing line may, at the Company's election, through January 1, 1999, bear
a fixed interest rate, and certain prepayments of the credit through January
1, 1999, could result in prepayment fees of 1.5% of the amounts prepaid. As
of June 30, 1997, the Company has borrowed $6,000,000 under this "Additional
Capital Expenditure Line."
The final principal installments totaling $1,547,050 under the Term Loan I
and II portions of the senior financing agreement were repaid in full during
the quarter ended March 31, 1997. As of June 30, 1997, the revolving credit
line loan balance, due January 1, 2001, was $10,531,000, and the unused
borrowing availability approximated $4,469,000. The 1994 Capital Expenditure
Line portion of the loan agreement is required to be repaid in quarterly
principal installments of $215,000, with a final principal payment of
$195,000 on October 1, 2001. The 1997 Capital Expenditure Line will be repaid
in equal quarterly installments of principal computed on a ten year
amortization schedule, which installments shall commence on July 1, 1998 and
quarterly thereafter until paid in full.
7
The Company's senior lending agreement contains various restrictive
covenants, including that the Company must maintain specified levels of
working capital and net worth (as defined in the agreement). In addition,
capital expenditures and dividends are limited to the annual amounts set
forth in the agreement. At June 30, 1997, the Company's retained earnings
available for dividends is $-0-. As a result of the lending agreement,
substantially all of the Company's property, plant, and equipment, inventory
and accounts receivable are subject to a third party's security interests.
NOTE D--COMMITMENTS AND CONTINGENCIES
The Company is principally self-insured for employees' medical care costs and
workers' compensation claims up to certain specified dollar limits. Under the
medical care program, the Company is insured by a private carrier for
individual claims in excess of specified dollar limits. The Company also has
excess coverage provided by the West Virginia Workers' Compensation Fund (a
state agency) for certain work related injuries. In connection with the
self-insured workers' compensation program, the Company has obtained an
irrevocable standby letter of credit in the amount of $1,000,000 (through
July 1998). A liability has been established for those illnesses and injuries
occurring on or before June 30, 1997, for which an amount of expected loss
could be reasonably estimated.
NOTE E--STOCKHOLDERS' EQUITY
Commencing in April 1995 through the quarter ended March 31, 1996, the
Company repurchased 1,105,000 shares at a total cost of $11,483,000,
including 350,000 shares purchased at a cost of $3,500,000 during the quarter
ended March 31, 1996.
NOTE F--FIXED ASSET IMPAIRMENT
During the first quarter of 1996, the Company determined that certain
cut-to-length equipment utilized in one of the Company's production lines was
not performing up to expectations and the decision to replace the equipment
was made. Based upon this indication of impairment, the Company recorded a
$1,862,000 charge against operations that has been included in the gain/loss
on disposal of assets.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
NET SALES
Net sales increased 17.3% in the second quarter of 1997 to $27,923,000 up
$4,126,000 from the second quarter of 1996, primarily due to an increase in
tonnage of products shipped. Finished tonnage sales increased to 45,070 tons
in the second quarter of 1997 from 35,421 tons for the second quarter of
1996. Billet sales increased to 1,370 tons for the second quarter of 1997
from 1,189 tons in the second quarter of 1996.
Net sales for the six months ended June 30, 1997 increased 3.8% to
$52,351,000 from $50,444,000 for the comparable period in 1996, primarily due
to an increase in tonnage of products shipped. Finished tonnage sales
increased to 82,526 tons for the six months ended June 30, 1997 from 75,808
tons for the comparable period in 1996. Billet sales increased to 3,380 tons
for the same period in 1997, from 2,334 tons for the comparable period in
1996.
COST OF SALES
Cost of sales decreased to 84.8% of net sales or $23,675,000 for the second
quarter of 1997 from 90.0% of net sales or $21,429,000 for the second quarter
of 1996. The percent decrease in cost of goods sold is principally due to an
increase in productivity and a decrease in workers compensation expense
coupled with fixed costs being a smaller component of cost of goods sold due
to higher sales and production levels.
Cost of sales for the six months ended June 30, 1997 decreased to 84.1% of
net sales or $44,042,000 from 88.6% of net sales or $44,669,000 for the
comparable period in 1996. This decrease in costs of goods sold was
principally due to an increase in productivity and lower costs for utilities,
medical care, and workers compensation, in addition to fixed costs being a
smaller component of costs of goods sold due to higher sales and production
levels.
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES
Selling, general, and administrative expenses for the second quarter of 1997
were $1,646,000 as compared to $987,000 for the second quarter of 1996. This
increase was due primarily to (i) higher legal and professional fees incurred
in connection with the unsolicited proposal from CPT Holdings, Inc. to enter
into discussions regarding the possible sale of the Company, and the proxy
contest relating to certain of the matters that were voted on by the
stockholders at the Annual Meeting of the Stockholders, and (ii) higher
travel expenses. As a percentage of net sales, selling and administrative
expense was 5.9% in the second quarter of 1997 and 4.1% for the comparable
period in 1996.
Selling, general, and administrative expenses for the six month period ended
June 30, 1997 were $3,055,000, compared to $2,155,000 for the comparable
period in 1996. This increase was due primarily to higher legal and
professional fees, for the reasons set forth above, and higher travel
expenses. As a percentage of net sales, selling and administrative expense
was 5.8% in the six month period ended June 30, 1997, compared to 4.3% for
the comparable period in 1996.
9
INTEREST EXPENSE, GAIN/LOSS ON DISPOSAL OF ASSETS AND OTHER OPERATING
EXPENSE/INCOME
Interest expense for the second quarter of 1997 was $235,000, compared to
$343,000 for the second quarter of 1996. Interest expense decreased primarily
due to $145,000 of capitalized interest incurred in connection with Phase II
of the Company's expansion and modernization program. As a percentage of net
sales, interest expense was .8% in the second quarter of 1997, compared to
1.4% for the second quarter of 1996. The Company recognized a gain on the
sale of certain equipment during the second quarter of 1997 in the amount of
$230,000 as compared to a $53,000 loss in the second quarter of 1996. Other
operating expense/income for the second quarter of 1997 was $276,000 of
income compared to $156,000 of income for the second quarter of 1996.
Interest expense for the six months ended June 30, 1997 was $495,000,
compared to $708,000 for the comparable period in 1996. Interest expense
decreased primarily due to $179,000 of capitalized interest incurred in
connection with Phase II of the Company's expansion and modernization
program. As a percentage of net sales, interest expense was .9% in the six
month period ended June 30, 1997, compared to 1.4% for the comparable period
in 1996. The Company recognized a gain on the sale of certain equipment of
$453,000 for the six months ended June 30, 1997 compared to a loss on the
disposal of equipment of $2,003,000 for the six months ended June 30, 1996.
Other operating expense/income for the six months ended June 30, 1997 was
$343,000 of income compared to $254,000 of income for the comparable period
in 1996.
NET INCOME
Net income for the second quarter of 1997 increased by $1,039,000 to
$1,657,000 from $618,000 for the second quarter of 1996. This increase in net
income is due primarily to higher sales and operating income. As a percentage
of net sales, net income was 5.9% for the second quarter of 1997, compared to
2.6% for the second quarter of 1996.
Net income for the six months ended June 30, 1997 was $3,202,000, compared to
$631,000 for the comparable period in 1996. This increase reflected both an
increase in gross profit and the absence, in this year's results, of the loss
on disposal of assets. As a percentage of net sales, net income was 6.1% in
the six month period ended June 30, 1997, compared to 1.3% for the comparable
period in 1996.
LIQUIDITY AND SOURCES OF CAPITAL
The Company's primary ongoing cash needs are for working capital
requirements, debt service and capital expenditures. The three present
sources for the Company's liquidity needs are internally generated funds, a
capital expenditure term loan line, and the Company's revolving credit
facility, which the Company anticipates will be sufficient for its ongoing
cash needs. Working capital at the end of the second quarter of 1997 was
$20,542,000, compared to $15,061,000 at the end of the prior fiscal year.
This increase in working capital was funded primarily by the Company's
revolving credit facility. The Company's expenditures for required capital
replacements are currently anticipated to average approximately $1,000,000
annually over the next several years.
In December 1996, the Company's Board of Directors approved Phase II of the
Company's expansion and modernization program to the Huntington, West
Virginia plant. The program includes a new high speed reheat furnace,
quick-change mill roll stands, new warehouse space, and other miscellaneous
equipment enhancements. The
10
project is expected to cost approximately $30.5 million (not including
capitalized interest) and is scheduled to be completed by late 1997 without
material disruptions to existing operations. The Company has funded, and will
continue to fund, the project from a combination of internally generated cash
flow and bank debt. In addition, from time to time, the Company evaluates
discretionary capital expenditures and acquisition opportunities. Any such
expenditure would be subject to availability of funds and approval by the
Company's Board of Directors.
FORWARD LOOKING STATEMENTS
Any Forward Looking Statements contained herein are subject to the section on
Forward Looking Statements contained in the Company's Annual Report on Form
10-K for the year ended December 31, 1996, including the following risk
factors set forth therein: the cyclical and capital intensive nature of the
industry; pressure resulting from foreign and domestic competition; reduction
in demand for the Company's products and industry pricing; volatility of raw
material costs, especially steel scrap, resulting in reduced profit margins;
excess industry capacity resulting in reduced profit margins; and the cost of
compliance with environmental regulations. In addition, the Forward Looking
Statements contained herein are also subject to the timely completion of the
modernization and expansion program and the Company's ability to effectively
integrate new equipment.
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Annual Meeting of Stockholders held on May 15, 1997, for which proxies
for the meeting were solicited pursuant to Regulation 14A of the Securities
Exchange Act of 1934, the stockholders elected six directors, each for a term
of one year. The tabulation of the votes cast for each nominee for director
was as follows:
Name of Nominee VOTED FOR
- --------------- ----------
Stephen A. Albert........................ 4,752,127
Robert L. Bunting, Jr.................... 4,752,127
Timothy R. Duke.......................... 4,752,084
Albert W. Eastburn....................... 4,752,127
Daniel N. Pickens........................ 4,752,127
Paul E. Thompson......................... 4,752,177
At the Annual Meeting of Stockholders, the stockholders also approved the
following:
(1) the appointment of Ernst & Young as independent auditors, by a vote of
5,312,028 shares in favor, 8,199 shares against and 4,410 shares
abstained.
At the Annual Meeting of Stockholders, the stockholders did not approve the
following:
(1) an Amendment to Steel of West Virginia, Inc.'s Certificate of
Incorporation to authorize 13,000,000 additional shares of common stock,
by a vote of 2,021,121 shares in favor, 3,010,333 shares against and 3,114
shares abstained;
(2) an Amendment to Steel of West Virginia, Inc.'s Certificate of
Incorporation to authorize 2,000,000 shares of preferred stock, by a vote
of 1,509,690 shares in favor, 3,414,708 shares against and 4,119 shares
abstained;
11
(3) an Amendment to Steel of West Virginia, Inc.'s Certificate of
Incorporation to provide that stockholder action may be taken only at a
meeting of the stockholders, by a vote of 1,844,828 shares in favor,
3,080,535 shares against and 3,154 shares abstained; and
(4) a non-binding resolution requesting that the Board negotiate with potential
bidders concerning the sale of the Company, by a vote of 388,257 shares in
favor, 4,974,071 shares against and 709 shares abstained.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit
4.1(h) Amendment, dated April 3, 1997 ("Amendment No. 8"), to the
Financing Agreement, dated December 30, 1986, between SWVA, Inc.
("SWVA") and The CIT Group/Business Credit, Inc. ("CIT")
4.10(d) Fourth Amendment to Deed of Trust, Assignment of Leases and Rents
and Security Agreement, dated April 3, 1997 ("Mortgage Amendment
No. 4"), by SWVA in favor of CIT
4.12 Promissory Note, dated April 3, 1997 ("Note 5"), in the principal
amount of $23,000,000 issued by SWVA in favor of The CIT
Group/Business Credit, Inc.
10.1(h) Amendment No. 8 (see Exhibit 4.1(h))
10.10(c) Mortgage Amendment No. 4 (see Exhibit 4.10(d))
10.26 Note 5 (see Exhibit 4.12)
11.1 Computation of Earnings Per Share
Data
(b) Reports on Form 8-K
None
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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.
DATED: August 14, 1997 STEEL OF WEST VIRGINIA, INC.
-----------------------------------
(Registrant)
/s/ Timothy R. Duke
-----------------------------------
Timothy R. Duke, President and
Chief Executive Officer
/s/ Mark G. Meikle
-----------------------------------
Mark G. Meikle, Vice President,
Treasurer and Chief Financial
Officer
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