U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
|X| QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2001
|_| TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM __________ TO
Commission file number 0-22916
PHC, INC.
(Exact name of small business issuer as specified in its charter)
Massachusetts 04-2601571
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 Lake Street, Suite 102, Peabody MA 01960
(Address of principal executive offices) (Zip Code)
978-536-2777
(Issuer's telephone number)
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(Former Name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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____
Applicable only to corporate issuers
Number of shares outstanding of each class of common equity, as of October 31,
2001
Class A Common Stock 8,908,917
Class B Common Stock 726,991
Transitional Small Business Disclosure Format
(Check one): Yes______ No X
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PHC, Inc.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets - September 30, 2001 and June
30, 2001.
Condensed Consolidated Statements of Operations - Three months ended
September 30, 2001 and September 30, 2000.
Condensed Consolidated Statements of Cash Flows - Three months ended
September 30, 2001 and September 30, 2000.
Notes to Condensed Consolidated Financial Statements - September 30,
2001.
Item 2. Management's Discussion and Analysis or Plan of Operation
Signatures
- 2 -
PART I. FINANCIAL INFORMATION
Item 1 Financial Statements
PHC, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
September 30, June 30,
ASSETS 2001 2001
__________ ___________
Current assets:
Cash and cash equivalents $ 138,709 $ 43,732
Accounts receivable, net of allowance for bad
debts of $2,750,799 at September 30, 2001,
$2,632,525 at June 30, 2001 5,605,746 5,620,715
Prepaid expenses 208,400 63,940
Other receivables and advances 97,755 112,579
Deferred income tax asset 613,980 613,980
____________ ___________
Total current assets 6,664,590 6,454,946
Accounts receivable, noncurrent 600,000 600,000
Other receivable 128,661 104,863
Property and equipment, net 1,340,915 1,338,066
Deferred financing costs, net of amortization of
$89,555 at September 30, 2001 and $114,109
at June 30, 2001 18,000 20,000
Goodwill, net of accumulated amortization of
$270,105 at September 30, 2001 and June 30, 2001 969,099 969,099
Other assets 250,042 236,478
____________ ___________
Total assets $ 9,971,307 $ 9,723,452
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,882,403 $ 1,866,631
Notes payable--related parties 200,000 200,000
Current maturities of long-term debt 2,158,669 2,038,077
Revolving credit note 2,081,209 2,111,586
Current portion of obligations under capital
leases 14,471 16,725
Accrued payroll, payroll taxes and benefits 379,981 460,723
Accrued expenses and other liabilities 1,308,419 1,208,469
Convertible debentures 500,000 500,000
Net current liabilities of discontinued
operations 957,585 960,552
____________ ___________
Total current liabilities 9,482,737 9,362,763
____________ ___________
Long-term debt 1,334,668 1,609,649
Obligations under capital leases 29,493 32,160
____________ ___________
Total noncurrent liabilities 1,364,161 1,641,809
____________ ___________
Total liabilities 10,846,898 11,004,572
____________ ___________
Stockholders' equity (deficit):
Preferred stock, $.01 par value; 1,000,000
shares authorized, 150,700 issued and
outstanding September 30, 2001 and June 30, 2001 1,507 1,507
Class A common stock, $.01 par value; 20,000,000
shares authorized, 8,711,084 and 8,709,834 shares
issued September 30, 2001 and June 30, 2001,
respectively 87,111 87,098
Class B common stock, $.01 par value; 2,000,000
shares authorized, 726,991 issued and outstanding
September 30, 2001 and June 30, 2001, convertible
into one share of Class A common stock 7,270 7,270
Additional paid-in capital 18,685,796 18,696,779
Treasury stock, 38,126 shares at September 30,2001
and 22,926 shares at June 30, 2001, at cost (30,988) (24,894)
Notes receivable, common stock (80,000) (80,000)
Accumulated deficit (19,546,287) (19,968,880)
____________ ___________
Total stockholders' equity (deficit) (875,591) (1,281,120)
____________ ___________
Total liabilities and stockholders' equity
(deficit) $ 9,971,307 $ 9,723,452
============ ===========
See Notes to Condensed Consolidated Financial Statements.
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PHC, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended
September 30,
2001 2000
____________ ____________
Revenues:
Patient care, net $ 5,319,144 $ 4,711,932
Management fees -- 345,111
Pharmaceutical studies 79,817 34,478
Website services 2,301 15,000
Contract support services 212,976 179,977
____________ ____________
Total revenue 5,614,238 5,286,498
____________ ____________
Operating expenses:
Patient care expenses 2,672,391 2,207,335
Cost of contract support services 168,972 162,001
Provision for doubtful accounts 116,439 826,910
Website expenses 80,947 253,787
Administrative and other operating expenses 1,927,347 1,758,566
____________ ____________
Total operating expenses 4,966,096 5,208,599
____________ ____________
Income from operations 648,142 77,899
____________ ____________
Other income (expense):
Interest income 3,342 7,900
Other income, net 19,327 15,956
Interest expense (217,830) (278,372)
____________ ____________
Total other expense, net (195,161) (254,516)
____________ ____________
Income (loss) before provision for taxes 452,981 (176,617)
Provision for income taxes -- --
____________ ____________
Net income (loss) 452,981 (176,617)
Dividends (30,388) (172,913)
____________ ____________
Income (loss) applicable to common stockholders $ 422,593 $ (349,530)
============ ============
Basic income (loss) per common share $ .04 $ (.04)
Basic weighted average number of shares
outstanding 9,399,161 7,938,029
Fully diluted income (loss) per common share $ .03 $ (.04)
Fully diluted weighted average number of
shares outstanding 14,530,625 7,938,029
See Notes to Condensed Consolidated Financial Statements.
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PHC, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Three Months Ended
September 30,
2001 2000
____________ ____________
Cash flows from operating activities:
Net income (loss) $ 452,981 $ (176,617)
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating
activities:
Depreciation and amortization 56,214 65,033
Compensatory stock options and stock and warrants
issued for obligations 2,110 --
Changes in:
Accounts receivable 5,995 91,399
Prepaid expenses (144,460) (77,328)
Other assets (22,579) (17,441)
Accounts payable (14,616) 335,091
Accrued expenses and other liabilities 19,208 (590,471)
Net liabilities of discontinued operations (2,967) (99,300)
____________ ____________
Net cash provided by (used in) operating activities 351,886 (469,634)
Cash flows from investing activities:
Acquisition of property and equipment (50,048) (66,726)
Website development costs -- (3,832)
____________ ____________
Net cash used in investing activities (50,048) (70,558)
____________ ____________
Cash flows from financing activities:
Revolving debt, net (30,377) (24,850)
Payments on debt (159,310) (58,000)
Deferred financing costs 2,000 10,091
Costs related to issuance of capital stock (13,380) (6,566)
Purchase of treasury stock (6,094) --
Issuance of common stock 300 --
Issuance of preferred stock at a discount -- 250,000
Notes receivable for stock purchase -- (90,000)
____________ ____________
Net cash provided by (used in) financing activities (206,861) 80,675
____________ ____________
NET INCREASE (DECREASE) IN CASH 94,977 (459,517)
Beginning cash balance 43,732 551,713
ENDING CASH BALANCE $ 138,709 $ 92,196
=========== ===========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 211,679 $ 246,148
Income taxes 500 57,050
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND
FINANCING ACTIVITIES:
Accrued dividends on series C preferred stock $ 30,388 $ 31,913
Conversion of preferred stock to common stock -- 50,000
Preferred stock discount -- 90,000
Beneficial conversion feature of preferred stock -- 51,000
Common stock issued in earnout -- 297,500
See Notes to Condensed Consolidated Financial Statements.
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PHC, INC. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
September 30, 2001
Note A - The Company
PHC, Inc. and its wholly owned subsidiaries (the "company") is a national
health care company specializing in behavioral health services including the
treatment of substance abuse, which includes alcohol and drug dependency and
related disorders and the provision of psychiatric services. The company also
provides management, administrative and online behavioral health services. The
company primarily operates under three business segments:
(1) Behavioral health treatment services, including two substance abuse
treatment facilities: Highland Ridge Hospital, located in Salt Lake City, Utah;
and Mount Regis Center, located in Salem, Virginia, and eight psychiatric
treatment locations which include Harbor Oaks Hospital, a 64-bed psychiatric
hospital located in New Baltimore, Michigan and seven outpatient behavioral
health locations (two in Las Vegas, Nevada operating as Harmony Healthcare, one
in Overland Park, Kansas operating as Total Concept and four locations operating
as Pioneer Counseling Center in the Detroit, Michigan metropolitan area);
(2) Behavioral health administrative services, including delivery of
management, administrative and help line services. PHC, Inc. provides management
and administrative services for its behavioral health treatment subsidiaries.
Pioneer Development and Support Services ("PDSS") provides help line services
primarily through contracts with major railroads. Pioneer Pharmaceutical
Research conducts studies of the effects of psychiatric pharmaceuticals on a
controlled population through contracts with major manufacturers of these
pharmaceuticals; and
(3) Behavioral health online services, are provided through Behavioral
Health Online, Inc., the company's internet subsidiary, which provides Internet
support services for all other subsidiaries of the company and provides
behavioral health education, training and products for the behavioral health
professional, through its website wellplace.com.
In June, 1998 the company's sub acute long-term care facility, Franvale
Nursing and Rehabilitation Center, in Braintree, Massachusetts was closed in a
state receivership action which was precipitated when the company caused the
owner of the Franvale facility, Quality Care Centers of Massachusetts, Inc., to
institute a proceeding under Chapter 11 of the Federal Bankruptcy Code. The net
liabilities of this facility are shown as discontinued operations in the
accompanying financial statements. The liquidation of the liabilities of
Franvale may result in a non-cash financial statement gain. The recognition of
any gain has been deferred until final resolution of all matters.
Note B - Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with the instructions to Form 10-QSB and Item 310 of
Regulation S-B. 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
only of normal recurring accruals) considered necessary for a fair presentation
have been included. Operating results for the three months ended September 30,
2001 are not necessarily indicative of the results that may be expected for the
year ending June 30, 2002. The accompanying financial statements should be read
in conjunction with the June 30, 2001 consolidated financial statements and
footnotes thereto included in the company's 10-KSB filed on September 26, 2001.
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Note C - Reclassifications
Certain September 30, 2000 amounts have been reclassified to conform with
the September 30, 2001 presentation.
Note D - Business Segment Information
The company's behavioral health treatment services have similar economic
characteristics, services, patients and clients. Accordingly, all behavioral
health treatment services are reported on an aggregate basis under one segment.
The company's segments are more fully described in Note A above. Residual income
and expenses from closed facilities are included in the administrative services
segment. The following summarizes the company's segment data:
BEHAVIORAL HEALTH
TREATMENT ADMINISTRATIVE ONLINE
SERVICES SERVICES SERVICES ELIMINATIONS TOTAL
________________________________________________________
For the three months
ended September 30,
2001
Revenues - external
customers $5,319,144 $ 292,793 $ 2,301 $ -- $5,614,238
Revenues -
intersegment -- 474,000 75,000 (549,000) --
Net income (loss) 932,089 (400,462) (78,646) -- 452,981
Identifiable assets 8,653,165 1,202,862 115,280 -- 9,971,307
For the three months
ended September 30,
2000
Revenues - external
customers $4,711,932 $ 559,566 $ 15,000 $ -- $5,286,498
Revenues -
intersegment -- 496,698 4,823 (501,521) --
Net income (loss) 731,772 (669,527) (238,862) -- (176,617)
Identifiable assets 9,288,080 6,042,601 96,415 -- 15,427,096
Note E - Net liabilities of discontinued operations
Net liabilities of discontinued operations relates to the Franvale closure
in 1998 and consists of the following:
September 30, June 30,
2001 2001
____________ ____________
Debt forgiveness and reserve for
contingencies $ 2,641,537 $ 2,641,537
Less legal and other expenses
incurred to date 1,683,952 1,680,986
____________ ____________
Net liabilities of discontinued
operations $ 957,585 $ 960,552
============= =============
The recognition of gain, if any, has been deferred until final resolution
of all contingent liabilities related to the discontinued operations.
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Note F - New Accounting Standards
In June 2001, the Financial Accounting Standards Board finalized FASB
Statements No. 141, Business Combinations ("SFAS 141") and No. 142, Goodwill and
Other Intangible Assets ("SFAS 142"). SFAS 141 requires the use of the purchase
method of accounting and prohibits the use of the pooling-of-interest method of
accounting for business combinations initiated after June 30, 2001. SFAS 141
also requires that the company recognize acquired intangible assets apart from
goodwill if the acquired intangible assets meet certain criteria. SFAS 141
applies to all business combinations initiated after July 1, 2001 and for
purchase business combinations completed on or after July 1, 2001. It also may
require, upon adoption of SFAS 142, that the company reclassify the carrying
amounts of intangible assets and goodwill based on the criteria in SFAS 141.
SFAS 142 requires, among other things, that companies no longer amortize
goodwill, but instead test goodwill for impairment at least annually. In
addition, SFAS 142 requires that the company identify reporting units for the
purpose of assessing potential future impairments of goodwill, reassess the
useful lives of other existing recognized intangible assets, and cease
amortization of intangible assets with an indefinite useful life. An intangible
asset with an indefinite useful life should be tested for impairment in
accordance with the guidelines in SFAS 142. SFAS 142 is required to be applied
in fiscal years beginning after December 15, 2001 to all goodwill and other
intangible assets recognized at that date, regardless of when those assets were
initially recognized. SFAS 142 requires the company to complete a transitional
goodwill impairment test six months from the date of adoption. The company is
also required to reassess the useful lives of other intangible assets within the
first interim quarter after adoption of SFAS 142.
The company has elected early adoption of SFAS 142 in the quarter ended
September 30, 2001. The Company's net goodwill of $969,099 was evaluated as of
July 1, 2001 and no amortizable intangible assets were identified. Accordingly,
the company ceased amortization of goodwill resulting in a decrease of expenses
of approximately $16,400 for the quarter ended September 30, 2001.
The impact of the adoption of SFAS 142 is summarized as follows:
For the Quarter ended
September 30,
2001 2000
____ ____
Reported net income (loss)applicable
to common stockholders $ 422,593 $ (349,530)
Add back: Goodwill amortization -- 24,854
Adjusted net income (loss) 422,593 (324,676)
========== ===========
Basic earnings per share:
Reported net income (loss)
applicable to common
stockholders $ (.04) $ .04
Goodwill amortization -- (.00)
Adjusted net income (loss) $ .04 $ (.04)
========== ===========
Diluted earnings per share:
Reported net income (loss)
applicable to common
stockholders $ .03 $ (.04)
Goodwill amortization -- (.00)
Adjusted net income (loss) $ .03 $ (.04)
========== ===========
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Item 2. Management's Discussion and Analysis or Plan of Operation
Results of Operations
Net patient care revenue increased 12.9% to $5,319,144 for the three months
ended September 30, 2001 from $4,711,932 for the three months ended September
30, 2000. This increase in revenue is due primarily to a 7.9% increase in
patient days for the period ended September 30, 2001 over the same period last
year. Marketing efforts have aided in increasing the census at all three
inpatient facilities.
Income before interest, taxes, depreciation, amortization and dividends was
$720,025 for the three months ended September 30, 2001 compared to $164,064 for
the three months ended September 30, 2000.
Two of the key indicators of profitability of inpatient facilities are
patient days, or census, and payor mix. Patient days is the product of the
number of patients times length of stay. Increases in the number of patient days
result in higher census, which coupled with a more favorable payor mix (more
patients with higher paying insurance contracts or paying privately) will
usually result in higher profitability. Therefore, patient census and payor mix
are monitored very closely.
Management fees of $345,111 for the three months ended September 30, 2000
were related to the New York practice management company, BSC-NY, Inc., which
closed in the quarter ended December 31, 2000.
Contract support services revenue provided by PDSS increased 18.3% to
$212,976 for the three months ended September 30, 2001 from $179,977 for the
three months ended September 30, 2000. The cost of providing these services
increased 4.3% to $168,972 for the three months ended September 30, 2001 from
$162,001 for the three months ended September 30, 2000. This is due to changes
in contract rates and increased services provided.
Revenue from pharmaceutical studies increased 131.5% to $79,817 for the
three months ended September 30, 2001 from $34,478 for the three months ended
September 30, 2000. This increase is due to the start up of new studies and is
expected to fluctuate from period to period based on the number of studies
currently in progress.
During the last quarter of the fiscal year ended June 30, 2001, the company
changed the focus of its internet services company to provide internal support
to all PHC operations. As a result of this change, website services revenue from
outside sources decreased 84.6% to $2,301 for the three months ended September
30, 2001 from $15,000 for the three months ended September 30, 2000 and website
expenses decreased 68.1% to $80,947 for the three months ended September 30,
2001 from $253,787 for the period ended September 30, 2000.
Administrative expenses increased 9.6% to $1,927,347 for the three months
ended September 30, 2001 from $1,758,566 for the three months ended September
30, 2000. This increase is primarily due to the increase in salaries, marketing
and office expenses indirectly related to the increases in census. Rent expense
decreased 4.5% to $192,725 for the three months ended September 30, 2001 from
$201,912 for the three months ended September 30, 2000. This decrease is due to
the elimination of the space originally leased to accommodate the company's
internet subsidiary. The internet company now occupies space at the corporate
offices. The company also experienced a 30.4% increase in cost of insurance and
other employee benefits to $86,254 for the three months ended September 30, 2001
from $66,103 for the three months ended September 30, 2000.
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Patient care expenses increased by 21.1% to $2,672,391 for the three months
ended September 30, 2001 from $2,207,335 for the three months ended September
30, 2000. These increases in expenses are due primarily to the 7.9% increase in
patient days as noted above with the primary increases in expenses directly
related to patient census such as payroll, consultants, food, hospital supplies,
medical records and pharmacy.
Bad debt expense decreased 85.9% to $116,439 for the three months ended
September 30, 2001 from $826,910 for the three months ended September 30, 2000.
This is due primarily to the closing of the practice management company, which
accounted for the majority of the bad debt expense for the three months ended
September 30, 2000.
Interest expense decreased 21.7% to $217,830 for the three months ended
September 30, 2001 from $278,372 for the three months ended September 30, 2000.
This decrease in interest is due to the decrease of approximately $600,000 in
long-term debt for the period ended September 30, 2001 as compared to the period
ended September 30, 2000.
The company has no provision for income taxes due to the utilization of net
operating loss carry forwards.
Preferred stock dividends decreased to $30,388 for the quarter ended
September 30, 2001 from $172,913 for the quarter ended September 30, 2000. This
decrease in dividends is due primarily to the issuance of additional series C
preferred stock in the quarter ended September 30, 2000, which carried with it a
discount of $90,000 and a beneficial conversion feature of $51,000, which were
recorded as additional dividends.
We continue to view receivables most conservatively by maintaining the
ratio of reserves for bad debt to receivables at approximately 30% on an
accounts receivable balance, which increased 1.0% to $8,956,545 at September 30,
2001 from $8,853,240 at June 30, 2001. The reserve for bad debt is based on the
current age of accounts receivable and is expected to decrease as our more
aggressive collection practices decrease the number of days our patient
receivables remain unpaid. In addition to decreasing the number of days our
patient receivables remain outstanding, our more timely follow-up practice has
resulted in fewer accounts charged to bad debts due to untimely filing of claims
since errors on claims are identified and corrected in a more timely manner than
in prior years. The $600,000 shown as non-current patient accounts receivable is
presented at net realizable value. These amounts are due from individuals in
payment for treatment on which extended payment plans have been arranged and are
being met.
During the three months ended September 30, 2001 costs of $2,967 were
incurred related to discontinued operations. These costs represent additional
legal fees paid and accrued as a result of the ongoing expenses incurred to
finalize the closure of Quality Care Centers of Massachusetts, Inc. When the
bankruptcy proceedings of that subsidiary have been finalized any remaining net
liabilities of the bankrupt subsidiary will result in increased equity in that
amount.
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Liquidity and Capital Resources
Our day-to-day business was, like that of many other companies, negatively
impacted by the National tragedy of September 11, 2001. Many clients who
normally travel by way of commercial airline to our facilities were reluctant to
do so after airline service was restored. For a period of time, these clients
chose local treatment centers instead of traveling to Pioneer facilities. We
also anticipate a decline in membership for our casino capitated rate contracts
due to the escalated unemployment rates in that industry. Some of these
decreases may be offset by increases in individual and group out patient
services provided to assist clients in coping with Post Traumatic Stress
Disorder. We cannot predict, at this time, the effect these changes may have on
the company's operations and profitability.
A significant factor in the liquidity and cash flow of the company is the
timely collection of its accounts receivable. Net accounts receivable from
patient care remained relatively stable during the quarter ended September 30,
2001 with an increase in accounts receivable of approximately $103,000 and an
increase in reserves of approximately $118,000. The company continues to closely
monitor its accounts receivable balances and is working to reduce amounts due
consistent with growth in revenues.
During the quarter ended September 30, 2001 the company met its cash flow
needs through ongoing accounts receivable financing and through debt and equity
transactions as follows:
During the quarter ended September 30, 2001 the company issued warrants to
purchase 12,000 shares of class a common stock valued at $1,785 in exchange for
consultant services.
Also during the quarter ended September 30, 2001 the company issued 1,250
shares of class A common stock upon the exercise of 1,250 stock options at $.25
each.
We utilize our accounts receivable funding facilities to the maximum extent
available to meet current cash needs and sustain existing operations. Our
treatment facilities are operating at a profit and are collecting old
outstanding receivables, which resulted in positive cash flow from operations.
These additional funds were used for the repayment of outstanding debt. We
continue to aggressively pursue payments on accounts receivable in order to
continue to reduce debt. The company also has approximately $2,000,000 in
long-term debt due in the fiscal year ending June 30, 2002. This debt is
primarily due to Heller Healthcare Financial, its primary lender. The company
has already begun the process of renewing this debt. The company also has
$500,000 in outstanding convertible debentures, which include the provision that
the holders of the debentures may put all or any portion of the debentures to
the company at the original purchase price plus unpaid interest upon 30 days
written notice beginning December 3, 2001. The company does not anticipate that
the put provision will be exercised since the coupon rate is paid quarterly at
12% per annum which is a higher rate than would be available through other
sources at this time.
The company believes that, with the renewal of the debt mentioned above and
its revolving credit facility through its primary lender, it will have
sufficient financing available to fund its growing operations for the
foreseeable future. The company is concentrating on its core business and
expansion of its pharmaceutical research operations through additional
contracts, which should increase revenues and provide for increased cash from
operations.
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Signatures
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
PHC, Inc.
Registrant
Date: November 8, 2001 /s/ Bruce A. Shear
Bruce A. Shear
President
Chief Executive Officer
Date: November 8, 2001 /s/ Paula C. Wurts
Paula C. Wurts
Controller
Treasurer