SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended June 30, 1998 Commission File No. 0-24866
------------- -------
ISOLYSER COMPANY, INC.
(Exact name of Registrant as specified in its charter)
Georgia 58-1746149
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
650 Engineering Drive
Technology Park
Norcross, Georgia 30092
(Address of principal executive offices)
(770) 582-6363
(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 at least the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.
Class Outstanding at August 13, 1998
Common Stock, $.001 par value 39,957,412
580940.2
WP6.1
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
ISOLYSER COMPANY, INC.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
Assets June 30, 1998 December 31, 1997
------
---------------------
Current assets
Cash and cash equivalents $ 7,923 $ 9,299
Accounts receivable, net 16,010 13,909
Inventories 27,311 32,067
Prepaid expenses and other assets 1,435 1,745
Assets held for sale 31,015 35,751
---------------------
Total current assets 83,694 92,771
---------------------
Property, plant and equipment 37,617 37,622
Less accumulated depreciation (18,667) (17,630)
---------------------
Property, plant, and equipment, net 18,950 19,992
----------------------
Intangibles and other assets, net 30,562 31,571
----------------------
$ 133,206 $ 144,334
======================
Liabilities and Shareholders' Equity
------------------------------------
Current liabilities
Current installments of long term debt $ 2,715 $ 4,610
Accounts payable 7,424 10,108
Bank overdraft 282 0
Accrued expenses 4,333 5,644
------------------------
Total current liabilities 14,754 20,362
------------------------
Long term debt, excluding current installments 42,107 37,546
Other liabilities 262 309
------------------------
Total liabilities 57,123 58,217
------------------------
Shareholders' equity
Common stock 40 39
Additional paid in capital 203,165 203,601
Retained earnings (126,291) (115,743)
Cumulative translation adjustment (97) (103)
Unearned shares restricted to employee
stock ownership plan (300) (300)
-------------------------
76,517 87,494
Treasury shares (434) (1,377)
-------------------------
Total shareholders' equity 76,083 86,117
-------------------------
$ 133,206 $ 144,334
=========================
See accompanying notes.
ISOLYSER COMPANY, INC.
Condensed Consolidated Statement of Operations
(in thousands, except per share data)
(unaudited)
Three months Three months Six months Six months
ended ended ended ended
June 30, 1998 June 30, 1997 June 30, 1998 June 30, 1997
-------------------------------------------------
Net sales $38,874 $ 42,434 $ 80,104 $ 82,437
Cost of goods sold 30,132 32,962 60,720 63,808
--------------------------------------------------
Gross profit 8,742 9,472 19,384 18,629
Operating expenses:
Selling, general &
administrative 10,036 10,544 19,827 21,078
Research & development 1,122 619 1,803 1,387
Impairment loss 5,300 0 5,300 0
Amortization of
intangibles 521 961 1,048 1,917
-----------------------------------------------
Total operating
expenses 16,979 12,124 27,978 24,382
-----------------------------------------------
Loss from operations (8,237) (2,652) (8,594) (5,753)
Interest income 79 111 171 340
Interest expense (1,022) (1,012) (1,971) (2,031)
Gain (loss) in joint
venture 10 (6) 13 (20)
-----------------------------------------------
Loss before income tax
expense (9,170) (3,559) (10,381) (7,464)
Income tax expense 90 7 166 11
------------------------------------------------
Net loss $ (9,260)$ (3,566) $ (10,547) $ (7,475)
------------------------------------------------
Net loss per common share-
Basic and Diluted $ (0.23) $ (0.09) $ (0.26) $ (0.19)
================================================
Weighted average number of
common shares outstanding 40,000 39,252 39,824 39,214
================================================
See accompanying notes.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ISOLYSER COMPANY, INC.
Condensed Consolidated Statement of Cash Flows
(in thousands)
(unaudited)
Six months ended Six months ended
June 30, 1998 June 30, 1997
------------------------------------
Cash flows from operating activities:
Net loss $(10,547) $ (7,475)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation 1,937 3,650
Amortization 1,048 1,917
Provision for doubtful accounts 88 173
Loss(Gain) on disposal of property,
plant & equipment 10 (27)
Impairment loss 5,300 0
Changes in assets and liabilities 347 (87)
--------------------------------
Net cash used in operating activities: (1,817) (1,849)
--------------------------------
Cash flows from investing activities
Additions to property, plant and
equipment (2,856) (2,852)
--------------------------------
Net cash used in investing activities: (2,856) (2,852)
--------------------------------
Cash flows from financing activities:
Net borrowings (repayments) under
credit agreements 2,743 (4,582)
Changes in bank overdraft 48 (2,380)
Proceeds from exercised stock options 0 574
Proceeds from issuance of stock 255 306
Issuance of stock to 401(k) Plan 251 133
--------------------------------
Net cash provided by (used in) financing
activities: 3,297 (5,949)
--------------------------------
Net decrease in cash and cash equivalents (1,376) (10,650)
Cash and cash equivalents at beginning
of period 9,299 20,925
--------------------------------
Cash and cash equivalents at end
of period $ 7,923 $ 10,275
================================
See accompanying notes.
- --------------------------------------------------------------------------------
ISOLYSER COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1) In the opinion of management, the information furnished reflects all
adjustments (consisting only of normal recurring adjustments) necessary for
a fair presentation of the financial position, results of operations and
cash flows for the interim periods. Results for the interim periods are not
necessarily indicative of results to be expected for the full year. These
consolidated financial statements should be read in conjunction with the
consolidated financial statements and notes thereto contained in the
Company's Annual Report on Form 10-K at December 31, 1997.
2) Inventories are stated at the lower of cost or market and are summarized as
follows:
JUNE 30, 1998 DECEMBER 31, 1997
------------- -----------------
Raw materials and supplies $21,744,000 $ 24,121,000
Work in process 3,804,000 4,456,000
Finished goods 22,677,000 25,901,000
------------ -------------
Total 48,225,000 54,478,000
Reserve for excess, slow moving and obsolete (21,775,000) (22,411,000)
inventory ------------ -------------
Total $26,450,000 $ 32,067,000
============ =============
At June 30, 1998 and December 31, 1997 net OREX inventory approximated
$5,611,000 and $7,500,000 respectively.
3) On February 25, 1998, the Company approved a plan to dispose of its OREX
manufacturing facilities in Arden and Charlotte, North Carolina and
Abbeville, South Carolina, and its White Knight subsidiary and recorded
impairment charges to adjust the carrying value of such entities to their
estimated fair market value based on appraisals and/or analyses of
discounted future operating cash flows from those entities.
On August 11, 1998, the Company disposed of its Arden and Charlotte, North
Carolina OREX manufacturing facilities, the industrial division of its
White Knight subsidiary and substantially all of the assets of its
SafeWaste subsidiary for proceeds of approximately $13.4 million. The
Company has also contracted to sell its Abbeville, South Carolina OREX
manufacturing facility and is currently negotiating to dispose of the
remaining portion of its White Knight subsidiary. Based on the above, the
Company recorded an additional impairment loss and other charges of $6.5
million in June, 1998 primarily relating to the writedown of property and
equipment to its estimated fair market value . The net assets of these
entities including the Company's SafeWaste subsidiary at June 30, 1998 are
classified as assets held for sale in the accompanying consolidated balance
sheets, and are comprised of the following:
580940.2
WP6.1
JUNE 30, 1998 DECEMBER 31, 1997
Assets:
Accounts receivable $ 8,850,000 $ 8,848,000
Inventory 11,847,000 13,085,000
Prepaid expense and other assets 153,000 186,000
Property and equipment, net 16,259,000 19,980,000
Other assets 400,000 286,000
---------------- -------------
Total Assets 37,509,000 42,385,000
---------------- -------------
Liabilities:
Accounts payable 2,651,000 2,247,000
Bank overdraft 273,000 508,000
Accrued liabilities 1,658,000 2,044,000
Long-term debt 1,912,000 1,836,000
---------------- -------------
Total Liabilities 6,494,000 6,635,000
------------- -------------
Net Assets held for sale $ 31,015,000 $ 35,750,000
============== =============
The following represents the results of operations of the entities held for sale
for the three and six months ended June 30, 1998 and 1997:
THREE MONTHS SIX MONTHS
ENDED JUNE 30, 1998 ENDED JUNE 30,
1998 1997 1998 1997
---- ---- ---- ----
Net sales $ 9,683,000 $ 11,496,000 $ 21,275,000 $24,853,000
Net loss (8,331,000) (2,040,000) (10,182,000) (3,922,000)
Net loss per
share - basic (0.21) (0.05) (0.26) (0.10)
and diluted
4) Loss per common share is computed using the weighted average number of
common shares outstanding during the respective periods. There is no
difference between basic and diluted weighted average and per share amounts
for these periods.
5) In June 1997, the Financial Accounting Standards Board issued SFAS 130,
"Reporting Comprehensive Income". SFAS 130 establishes new rules for the
reporting and display of comprehensive income and its components. SFAS 130
requires foreign currency translation adjustments to be included in other
comprehensive income. Effective January 1, 1998, the Company adopted SFAS
130. Management believes the pronouncement does not significantly impact
the presentation of the Company's consolidated financial statements.
6) At June 30, 1998, the Company was not in compliance with a covenant of its
credit facility
580940.2
WP6.1
pertaining to operating results and net worth. Such covenant violations were
waived by the Company's lenders on August 10, 1998.
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
RESULTS OF OPERATIONS
Net sales for the three months ended June 30, 1998 ( the "1998 Quarter") were
$38.9 million compared to $42.4 million for the three months ended June 30, 1997
( the "1997 Quarter"), a decrease of 8.3%. Net sales for the six months ended
June 30, 1998 (the "1998 Period") were $80.1 million compared to $82.4 million
for the six months ended June 30, 1997 (the "1997 Period"), a decrease of 2.8%.
Sales of custom procedure trays and related products decreased 9.2% in the 1998
Quarter as compared to the 1997 Quarter and increased 5.4% in the 1998 Period as
compared to the 1997 Period. This decrease in the 1998 Quarter is primarily
attributable to timing of shipments during the 1997 Quarter in anticipation of
the Company's previously announced adoption of synchronous manufacturing at this
division. Sales of Microtek products decreased 4.9% and 1.2% in the 1998 Quarter
and the 1998 Period, respectively, as compared to the corresponding periods of
1997, primarily attributed to lower sales volumes to hospitals. Sales of safety
products declined 25.6% and 22.0% in the 1998 Quarter and 1998 Period,
respectively, as compared to the corresponding periods of 1997, due to a
substantial reduction in purchases of LTS products by Allegiance, the primary
distributor of such products, and previously reported adverse regulatory
developments which occurred in the first quarter of 1998. While the Company
plans to introduce a new LTS product to preserve its market share created by
LTS, the Company's ability to do so is subject to obtaining federal registration
of such product. See "Risk Factors -- Regulatory Risks" in the Company's Annual
Report on Form 10-K for the year ended December 31, 1997 (the "Annual Report").
The Company expects that its operating results will continue to be adversely
affected by reduced sales of LTS, and no assurances can be provided that the
Company will be able to maintain its market share on such products by the
registration and introduction of a new LTS product. White Knight sales declined
9.1% and 11.7% in the 1998 Quarter and the 1998 Period, respectively, as
compared to the corresponding periods of 1997, due to a competitor's purchase of
a significant customer and the Company's decision to de-emphasize marketing of
White Knight products in favor of higher margin products sold by its other
subsidiaries. In February 1998, the Company announced plans to sell its White
Knight subsidiary, which, if consummated, would significantly reduce the
Company's net sales. On August 11, 1998, the Company sold the industrial
division of White Knight and is currently in negotiations to sell the remaining
portion of White Knight. See "Risk Factors - Risks of Planned Divestitures" in
the Company's Annual Report.
Included in the foregoing sales figures are $1.3 million in sales of OREX
Degradables during the 1998 Quarter and $3.1 million during the 1998 Period as
compared to $2.5 million and $4.7 million during the corresponding periods of
1997. During 1997, the Company substantially reduced its efforts to increase
sales of OREX Degradables and instead focused on preserving its existing base of
hospitals
580940.2
WP6.1
purchasing OREX Degradables and evaluating means to market OREX Degradables
within its various market potentials. The Company to date has not achieved any
gross profits on its sale of OREX Degradables. The Company's future performance
will depend to a substantial degree upon market acceptance of and the Company's
ability to successfully manufacture, market, deliver and expand its OREX
Degradables line of products at acceptable profit margins. The Company's ability
to achieve such objectives is subject to risks including the risks described in
the Company Annual Report under "Risk Factors."
Gross profit for the 1998 Quarter was $8.7 million or 22.5% of net sales as
compared to $9.5 million or 22.3% of net sales in the 1997 Quarter. Gross profit
for the 1998 Period was $19.4 million or 24.2% of net sales as compared to $18.6
million or 22.6% of net sales in the 1997 Period. Included in cost of sales for
the 1998 Quarter and Period was approximately $900,000 in inventory reserves
connected with the sale of the industrial division of White Knight, which
reduced gross profit. Improvements in gross profit margins are attributable to
increased gross profits at the Company's Microtek division and increased
overhead absorption at the Company's Arden and Abbeville material manufacturing
plant due to impairment reserves recorded during the fourth quarter of 1997, and
contract manufacturing at the Company's Abbeville manufacturing plant.
Selling, general and administrative expenses were $10.0 million or 25.8% of net
sales in the 1998 Quarter as compared to $10.5 million or 24.8% of net sales in
the 1997 Quarter. Selling, general and administrative expenses were $19.8
million or 24.8% of net sales in the 1998 Period as compared to $21.1 million or
25.6% of net sales in the 1997 Quarter. Included in selling, general and
administrative expenses for the 1998 Quarter and Period are approximately
$300,000 in charges related to the sale of the industrial division of White
Knight. The reduction in selling, general and administrative expense is
primarily attributed to implementation of the Company's operating plan that
focused on reorganizing marketing and sales efforts to achieve reductions in
selling and marketing expenses.
Research and development expenses were $1.1 million or 2.9% of net sales in the
1998 Quarter as compared to $0.6 million or 1.5% of net sales in the 1997
Quarter. Research and development expenses were $1.8 or 2.3% of net sales in the
1998 Period as compared to $1.4 million or 1.7% of net sales in the 1997 Period.
The increase in research and development expense is primarily attributed to
increased effort in development of OREX roll-stock production in Asia, and
regulatory expense associated with the Company's effort to obtain federal
regulatory approval of its new LTS products.
Amortization of intangibles was $521,000 and $1,048,000 in the 1998 Quarter and
1998 Period, respectively, as compared to $961,000 and $1,917,000 in the
corresponding periods of 1997. The decline in amortization expense was due to
charges recorded during the fourth quarter of 1997 for the impairment of White
Knight's carrying value.
On August 11, 1998, the Company disposed of its Arden and Charlotte, North
Carolina OREX manufacturing facilities, its White Knight industrial division and
substantially all of the assets of its SafeWaste subsidiary for proceeds of
approximately $13.4 million. The Company has also contracted to sell its
Abbeville, South Carolina OREX manufacturing facility and is currently
negotiating to
580940.2
WP6.1
dispose of the remaining portion of its White Knight subsidiary. In connection
with this sale, the Company recorded impairment and other charges totaling $6.5
million for the quarter ended June 30, 1998. The resulting loss from operations
was $8.2 million in the 1998 Quarter as compared to a $2.7 million loss from
operations in the 1997 Quarter. The resulting loss from operations was $8.6
million in the 1998 Period as compared to a $5.8 million loss from operations in
the 1997 Period.
Interest expense, net of interest income, was $943,000 and $1.8 million in the
1998 Quarter and 1998 Period, respectively, as compared to $901,000 and $1.7
million in the corresponding periods of 1997. The increase in interest expense
is attributed to increased interest expense as a result of increased borrowings
during 1998 combined with lower interest income as a result of lower cash
balances during 1998.
Provision for income taxes reflect an expense of $90,000 and $166,000 in the
1998 Quarter and 1998 Period, respectively, as compared to an expense of $7,000
and $11,000 in the corresponding periods of 1997.
The resulting net loss was $9.3 million and $10.5 million for the 1998 Quarter
and 1998 Period, respectively, as compared to a net loss of $3.6 million and
$7.5 million for the corresponding periods of 1997.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1998, the Company's cash and equivalents totaled $7.9 million as
compared to $9.3 million at December 31, 1997.
During the 1998 Period, the Company used $1.8 million of cash in operating
activities. This use of cash in the 1998 Period is attributable to a combination
of the Company's operating loss, increase in accounts receivable as a result of
an incremental increase in sales of $2.6 million in the 1998 Period as compared
to the last six months of 1997 and a decrease in accounts payable as a result of
accelerated payments to obtain discounts on accounts payable. The Company used
$2.9 million in investing activities during the 1998 Period. This use of cash
during the 1998 Period was attributable to several computer software
implementations in progress. During the 1998 Period, the Company borrowed
approximately $2.7 million in cash under the Company's revolving credit
facility.
As more fully described in the Company's Annual Report, the Company has a $55
million credit agreement (the "Credit Agreement") consisting of a $40 million
revolving credit facility maturing on August 31, 1999 and a $15 million term
loan facility maturing on August 31, 2001. The Company has no additional
borrowing availability under the revolving credit facility at June 30, 1998.
Outstanding borrowings under the revolving credit facility were approximately
$29.7 million at June 30, 1998. Outstanding borrowings under the term loan
facility were $11.3 million at June 30, 1998. The Credit Agreement provides for
the issuance of up to $3 million in letters of credit. Outstanding letters of
credit were $50,000 at June 30, 1998. At June 30, 1998, the Company was in
violation of the net worth and
580940.2
WP6.1
operating results covenants contained in the Credit Agreement. These violations
were waived by the Company's lenders on August 10, 1998. No assurance can be
provided that other violations of covenants contained in the Company's Credit
Agreement will not occur in the future or, if such violations occur, that those
violations will be waived. Any unwaived default by the Company under the Credit
Agreement would be expected to have a material adverse effect upon the Company.
At June 30, 1998, outstanding indebtedness under the Credit Agreement exceeded
the Company's cash and cash equivalents.
On August 11, 1998, the Company disposed of its Arden and Charlotte, North
Carolina manufacturing facilities, its White Knight industrial division and
substantially all of the assets of its SafeWaste subsidiary for proceeds of
approximately $13.4 million. The Company also contracted to sell its Abbeville,
South Carolina OREX manufacturing facility and is currently negotiating to
dispose of the remaining portion of its White Knight subsidiary. Net proceeds
received to date from these divestitures have been applied to reduce debt under
the Company's Credit Agreement.
Based upon its current business plan, the Company currently expects that cash
equivalents and short term investments on hand, the Company's existing credit
facility and funds budgeted to be generated from operations and proceeds from
sales of assets will be adequate to meet its liquidity and capital requirements
through 1998. Currently unforeseen future developments and increased working
capital requirements may require additional debt financing or the issuance of
common stock in 1998 and subsequent years. There can be no assurances that the
Company could obtain any required additional debt financing or successfully
consummate an issuance of common stock on terms favorable to the Company, if at
all.
Statements made in this Management's Discussion and Analysis of Financial
Condition and Results of Operations, including those in the immediately
preceding paragraph, include forward-looking statements made under the
provisions of the Private Securities Litigation Reform Act. The Company's actual
results could differ materially from such forward-looking statements and such
results will be affected by risks described in the Company's Annual Report
including, without limitation, those described under "Risk Factors - Limited
Operating History; Net Losses", "-Risks of New Products", "Risks of Expansion",
"-Manufacturing & Supply Risks" and "-Liquidity Risks".
ITEM 3.
Quantitative and Qualitative Disclosures about Market Risk
Not applicable.
580940.2
WP6.1
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not applicable.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
During the quarter for which this report is filed, there were no material
modifications in the instruments defining the rights of shareholders. During the
quarter for which this report is filed, none of the rights evidenced by the
shares of the Company's common stock were materially limited or qualified by the
issuance or modification of any other class of securities. During the quarter
for which this report is filed, the Company sold no equity securities of the
Company that were not registered under the Securities Act of 1933, as amended.
ITEM 3. DEFAULT UPON SENIOR SECURITIES
At June 30, 1997, the Company was not in compliance with the covenants of its
credit facility pertaining to net worth and operating income. This violation was
waived by the Company's lenders on August 10, 1998.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS
During the period covered by this report, the Company filed with the Securities
and Exchange (the "Commission") and delivered to its shareholders the Company's
Proxy Statement for its Annual Meeting of Shareholder held May 27, 1998 (the
"Proxy Statement").
(a) The Company's Annual Meeting of Shareholders was held on May 27, 1998.
(b) The nominees for the Board of Directors of the Company are identified below.
(c) The inspector of election tabulated the following votes for the election of
directors:
580940.2
WP6.1
(I) Election of Directors
NUMBER OF VOTES NUMBER OF VOTES ABSTENTIONS AND
NOMINEE FOR OFFICE FOR WITHHELD BROKER NON-VOTES
- ------------------ --- -------- ----------------
Gene R. McGrevin 33,198,411 401,200 -0-
Terence N. Furness 33,202,997 396,614 -0-
Travis W. Honeycutt 33,161,133 438,478 -0-
Dan R. Lee 33,183,196 416,415 -0-
Rosdon Hendrix 33,194,698 404,913 -0-
Kenneth F. Davis 33,188,188 411,423 -0-
John E. McKinley 33,210,132 389,479 -0-
ITEM 5. OTHER INFORMATION
Appropriate proposals of shareholders intended to be presented at the Company's
1999 annual meeting without inclusion in the Company's proxy statement must be
received by the Company by March 28, 1999. If the date of the next annual
meeting is advanced or delayed by more than 30 calendar days from the date of
the Company's 1998 annual meeting (May 27, 1998), the Company shall, in a timely
manner, inform its shareholders of the change, and the date by which proposals
of shareholders must be received.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit Description
No.
3.1(1) Articles of Incorporation of Isolyser Company, Inc.
3.2(2) Articles of Amendment to Articles of Incorporation of Isolyser Company,
Inc.
3.3(1) Amended and Restated Bylaws of Isolyser Company, Inc.
3.4(3) First Amendment to Amended and Restated Bylaws of Isolyser Company, Inc.
3.5(4) Second Amendment to Amended and Restated Bylaws of Isolyser Company, Inc.
4.1(1) Specimen Certificate of Common Stock
27.1 Financial Data Schedule
580940.2
WP6.1
- ------------------
1. Incorporated by reference to the Company's Registration Statement on Form
S-1 (File No. 33- 83474).
2. Incorporated by reference to Exhibit 3.2 of the Company's Annual Report on
Form 10-K for year ended December 31, 1996.
3. Incorporated by reference to Exhibit 3.1 to the Company's Current Report on
Form 8-K filed July 29, 1996.
4. Incorporated by reference to Exhibit 3.1 to the Company's Current Report on
Form 8-K filed December 20, 1996.
(b) No current reports on Form 8-K were filed during the quarter for which this
report is filed.
580940.2 WP6.1
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has caused this quarterly report on Form 10-Q to be signed on its
behalf by the undersigned thereunto duly authorized on August 13, 1998.
ISOLYSER COMPANY, INC.
By: /s/ Terence N. Furness
Terence N. Furness
President & CEO
(principal executive officer)
By: /s/ Peter A. Schmitt
Peter A. Schmitt
Chief Financial Officer
(principal financial officer)
580940.2
WP6.1