UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
----------------------------------
Washington, D.C. 20549
FORM 10-Q
(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 0-20215
MICROTOUCH SYSTEMS, INC.
(Exact name of Registrant as specified in its Charter)
Massachusetts 04-2802971
- ------------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
300 Griffin Park, Methuen, MA 01844
- ----------------------------- -----
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: 508-659-9000
- --------------------------------------------------- ------------
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 last 90 days.
Yes X No
------ ------
Indicate the number of shares outstanding of each of the Registrant's classes of
common stock as of the latest practical date.
As of July 21, 1997 there were outstanding 7,949,967 shares of common stock of
the Registrant.
MICROTOUCH SYSTEMS, INC. AND SUBSIDIARIES
INDEX
Page No.
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - June 30, 1997
and December 31, 1996 3
Consolidated Statements of Operations - Three and Six
Months Ended June 30, 1997 and 1996 4
Consolidated Statement of Stockholders' Equity -
Six Months Ended June 30, 1997 5
Consolidated Statements of Cash Flows - Six
Months Ended June 30, 1997 and 1996 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURES 13
Exhibit Index 14
2
MICROTOUCH SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in 000s except share data)
June 30, December 31,
1997 1996
---- ----
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents...................... $ 9,241 $ 9,818
Marketable securities.......................... 24,007 26,922
Accounts receivable, net of allowances of
$4,935 at June 30, 1997 and $3,940 at
December 31, 1996........................... 19,033 15,976
Inventories.................................... 19,852 15,077
Deferred income taxes.......................... 5,668 5,505
Prepaid expenses and other
current assets.............................. 1,647 952
----- ---
Total current assets........................ 79,448 74,250
Property and equipment, net...................... 10,884 7,197
Other assets..................................... 4,005 3,601
----- -----
$ 94,337 $ 85,048
====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable............................... $ 5,795 $ 7,026
Accrued expenses............................... 12,401 8,852
------ -----
Total current liabilities................... 18,196 15,878
Stockholders' equity
Preferred stock, $.01 par value per share--
500,000 shares authorized, none issued
and outstanding at June 30, 1997 and
December 31, 1996........................... --- ---
Common stock, $.01 par value per share--
authorized - 20,000,000 at June 30,
1997 and December 31, 1996;
8,220,623 issued at June 30, 1997
and December 31, 1996....................... 82 82
Additional paid-in capital..................... 61,519 60,096
Treasury stock at cost - 278,089 and 536,140
shares at June 30, 1997 and December 31,
1996........................................ (4,118) (7,963)
Cumulative translation adjustment.............. (639) (533)
Net unrealized gain on securities available for
sale........................................ 44 105
Retained earnings.............................. 19,253 17,383
------ ------
Total stockholders' equity.................. 76,141 69,170
------ ------
$ 94,337 $ 85,048
====== ======
The accompanying notes are an integral part of these consolidated
financial statements.
3
MICROTOUCH SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Amounts in 000's except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
------- -------
1997 1996 1997 1996
-------- -------- -------- --------
Net sales.................. $ 32,275 $ 22,891 $ 62,351 $ 43,946
Cost of sales.............. 20,288 14,268 39,016 27,397
---------- ---------- ---------- ----------
Gross profit............... 11,987 8,623 23,335 16,549
Operating expenses:
Research and development. 1,946 1,797 3,773 3,309
Sales and marketing...... 4,568 3,485 9,258 6,759
General and
administrative.......... 2,041 1,425 3,917 2,789
Amortization of
intangible assets....... 119 112 238 223
---------- ---------- ---------- ----------
Total operating
expenses............. 8,674 6,819 17,186 13,080
---------- ---------- ---------- ----------
Operating income........... 3,313 1,804 6,149 3,469
Other income............... 355 476 733 778
Arbitration costs.......... 595 591 595 718
---------- ---------- ---------- ----------
Income before provision
for income taxes.......... 3,073 1,689 6,287 3,529
Provision for income taxes. 1,106 616 2,263 1,288
---------- ---------- ---------- ----------
Net income................. $ 1,967 $ 1,073 $ 4,024 $ 2,241
========== ========== ========== ==========
Earnings per share:
Primary................. $ 0.24 $ 0.13 $ 0.49 $ 0.28
Fully diluted........... $ 0.24 $ 0.13 $ 0.49 $ 0.28
Weighted average common
and common equivalent shares:
Primary................. 8,279 8,122 8,273 8,071
Fully diluted........... 8,280 8,122 8,273 8,104
The accompanying notes are an integral part of these consolidated
financial statements.
4
MICROTOUCH SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 1997
(Amounts in 000s except share data)
(Unaudited)
Net Unrealized
Gain(Loss) On
Common Stock Additional Cumulative Securities
------------------- Paid-in Translation Available for
Shares Amount Capital Adjustment Sale
----------- ------------------ -----------------------------
Balance December 31, 1996 8,220,623 $ 82 $ 60,096 $(533) $ 105
Exercise of stock options
Employee stock purchase plan 17
Compensation expense related
to common stock options 15
Effect of exchange rate changes (106)
Tax benefit related to exercise
of stock options and
disqualifying dispositions 1,391
Unrealized loss on securities
available for sale, net of tax (61)
Net income
----------- ------- ---------- ----------- ---------------
Balance June 30, 1997 8,220,623 $ 82 $ 61,519 $(639) $44
=========== ======= ========== =========== ===============
Treasury Stock Total
Retained ------------------------ Stockholders'
Earnings Shares Amount Equity
----------------------- ----------- ---------------
Balance December 31, 1996 $ 17,383 (536,140) $ (7,963) $ 69,170
Exercise of stock options (2,154) 242,666 3,617 1,463
Employee stock purchase plan 15,385 228 245
Compensation expense related
to common stock options 15
Effect of exchange rate changes (106)
Tax benefit related to exercise
of stock options and
disqualifying dispositions 1,391
Unrealized loss on securities
available for sale, net of tax (61)
Net income 4,024 4,024
----------- ----------- ----------- ---------------
Balance June 30, 1997 $ 19,253 (278,089) $(4,118) $ 76,141
=========== =========== =========== ===============
The accompanying notes are an integral part of these consolidated
financial statements.
5
MICROTOUCH SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Amounts in 000s)
Six Months Ended
June 30,
-------
1997 1996
-------- --------
Cash flows from operating activities:
Net income $ 4,024 $ 2,241
Adjustments to reconcile net income to net cash provided by
(used in) operating activities--
Depreciation and amortization 1,420 827
Deferred income taxes (17) 368
Compensation expense related to common stock
options 15 27
(Increase) decrease in assets--
Accounts receivable (3,056) (1,671)
Inventories (4,775) (2,755)
Prepaid expenses and other assets (1,289) (578)
Increase (decrease) in liabilities--
Accounts payable (1,251) 1,096
Accrued expenses 3,425 266
--------- ---------
Net cash used in operating activities (1,504) (179)
Cash flows (used in) investing activities:
Purchase of property and equipment, net (4,752) (1,062)
Sale and maturity of marketable securities 10,007 10,057
Purchase of marketable securities (7,321) (6,012)
--------- ---------
Net cash (used in) provided by investing activities (2,066) 2,983
Cash flows provided by financing activities:
Exercise of stock options and employee stock purchase plan 1,708 406
Purchase of treasury stock ---- (486)
Tax benefit from exercise of stock options and
disqualifying dispositions 1,391 189
--------- ---------
Net cash provided by financing activities 3,099 109
Effect of exchange rates on cash (106) (257)
--------- ---------
Net (decrease) increase in cash (577) 2,656
Cash, beginning of period 9,818 5,706
--------- ---------
Cash, end of period $ 9,241 $ 8,362
========= =========
Supplemental disclosures of cash flow information:
Interest paid $ 96 $ 32
========= =========
Income taxes paid $ 557 $ 1,176
========= =========
The accompanying notes are an integral part of these consolidated
financial statements.
6
MICROTOUCH SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1997
(1) Nature of Business
------------------
MicroTouch Systems, Inc. develops, manufactures and sells touch sensitive
input systems, including touch-sensitive screens, digitizers for pen computers
and kiosk enclosures as well as electronic digital PC based whiteboards.
(2) Consolidated Financial Statements
---------------------------------
The accompanying consolidated financial statements include the accounts of
MicroTouch Systems, Inc. and its wholly-owned subsidiaries (together,
"MicroTouch" or the "Company"). All significant intercompany accounts,
transactions and profits have been eliminated.
(3) Interim Consolidated Financial Statements
-----------------------------------------
The accompanying consolidated financial statements as of June 30, 1997 and
for the three and six-month periods ended June 30, 1997 and June 30, 1996
include the accounts of the Company, and have not been audited by independent
public accountants; however, these statements, prepared in accordance with
generally accepted accounting principles, reflect, in the opinion of management,
all adjustments (consisting only of normal recurring accruals) necessary to
present fairly the financial position as of June 30, 1997, and the results of
operations for the three-month and six-month periods ended June 30, 1997 and
1996. The results of operations for the three-month and six-month periods ended
June 30, 1997 are not necessarily indicative of the results to be expected for
the entire year.
These consolidated financial statements do not include all disclosures
associated with annual consolidated financial statements and, accordingly,
should be read in conjunction with the footnotes contained in the Company's
Annual Report on Form 10-K for the year ended December 31, 1996.
(4) Earnings Per Share (EPS)
------------------------
Earnings per share data are computed using the weighted average number of
shares of common and dilutive common equivalent shares outstanding during the
year. Dilutive common equivalent shares consist of stock options and are
calculated using the treasury stock method.
(5) Recent Accounting Pronouncements
--------------------------------
In February 1997, SFAS No. 128 "Earnings Per Share" was released effective
for fiscal years ending after December 15, 1997. SFAS No. 128 requires the
presentation of basic and diluted EPS. Basic EPS replaces the primary EPS
calculation required under APB Opinion 15. Basic EPS excludes dilution and is
calculated by using the weighted average of common shares outstanding for the
period. Diluted EPS is computed similarly to fully diluted EPS pursuant to
Opinion 15. The pro-forma effect of this accounting change on the June 30, 1997
EPS data and the June 30 and December 31, 1996 previously reported EPS data is
as follows:
Three Months Ended Six Months Ended Year Ended
June 30, June 30, December 31,
------- ------- ------------
1997 1996 1997 1996 1996
---- ---- ---- ---- ----
Primary EPS as reported $ .24 $ .13 $ .49 $ .28 $.71
Effect of SFAS No. 128 .01 .01 .02 .01 .03
----- ----- ----- ----- ----
Basic EPS $ .25 $ .14 $ .51 $ .29 $.74
===== ===== ===== ===== ====
7
Management's Discussion and
Analysis of Financial Condition and
Results of Operations
Results of Operations:
The following table sets forth, for the fiscal periods indicated, the percentage
of net sales represented by certain items in MicroTouch's statements of
operations:
Percentage of Total Revenue
----------------------------------------
Three Months Six Months
Ended Ended
June 30 June 30
----------------- ----------------
1997 1996 1997 1996
---- ---- ---- ----
Net Sales 100.0% 100.0% 100.0% 100.0%
Cost of Sales 62.9 62.3 62.6 62.3
------- ------- ------- -------
Gross Profit 37.1 37.7 37.4 37.7
Operating Expenses:
Research & Development 6.0 7.9 6.1 7.6
Sales & Marketing 14.2 15.2 14.8 15.4
General & Administrative 6.3 6.2 6.3 6.3
Amortization of Intangible Assets .4 .5 .4 .5
------- ------- ------- -------
Total Operating Expenses 26.9 29.8 27.6 29.8
------- ------- ------- -------
Operating Income 10.2 7.9 9.8 7.9
Other Income 1.1 2.1 1.2 1.8
Arbitration costs 1.8 2.6 1.0 1.6
------- ------- ------- -------
Income Before Provision for Income 9.5 7.4 10.0 8.1
Tax
Net Income 6.1 4.7 6.5 5.1
Net Sales Net sales in the quarter ended June 30, 1997 increased over the
corresponding period of 1996 by $9,384,000 or 41.0% to $32,275,000. For the six-
month period ended June 30, 1997, net sales increased $18,405,000 or 41.9% to
$62,351,000. The increase in both the three and six-month periods ended June 30,
1997 reflected increases in international touchscreen sales, the domestic and
international entertainment markets and kiosk sales. For the three month period
ended June 30, 1997, international sales accounted for 43.4% of net sales, an
increase from 32.6% of net sales for the comparable period of 1996, reflecting
increased touchscreen volume primarily into Europe and Australia. For the six-
month period ended June 30, 1997, international sales accounted for 40.5% of net
sales as compared to 33.1% for the six-month period ended June 30, 1996.
Gross Profit Gross profit for the three and six-month periods ended June 30,
1997 was $11,987,000 and $23,335,000, which represents increases of 39.0% and
41.0%, respectively, over the corresponding periods of 1996. As a percentage of
net sales, gross profit decreased from 37.7% in the second quarter of 1996 to
37.1% in the second quarter of 1997. The decrease in second quarter gross
margins primarily reflects the lower margins associated with the production
start up of the Business Products Division's electronic whiteboard product
Ibid(TM). For the six-month period ended June 30, 1997, gross profit, as a
percentage of net sales, decreased to 37.4% from 37.7% in the same period in
1996. This decrease is also due to start up costs in the Business Products
Division.
Research and Development Research and development expenses for the quarter ended
June 30, 1997 increased over the corresponding period of 1996 by $149,000 or
8.3%. As a percentage of net sales, research and development expenses decreased
from 7.9% in the second quarter of 1996 to 6.0% in the second quarter of 1997,
primarily as a result of the 41.0% increase in net sales during the second
quarter of 1997 as compared to the second quarter of 1996. In addition, research
and development expenses for the new electronic whiteboard IBID(TM) have
decreased compared to last
8
year's second quarter. For the six-month period ended June 30, 1997, research
and development spending increased $464,000 or 14.0% over the same period in
1996. The increase in research and development expenses resulted primarily from
continued development projects in touchscreen technologies, especially resistive
products.
Sales and Marketing Sales and marketing expenses in the quarter ended June 30,
1997 increased over the corresponding period of 1996 by $1,083,000 or 31.1%, to
$4,568,000. As a percentage of net sales, sales and marketing expenses decreased
from 15.2% in the second quarter of 1996 to 14.2% in the second quarter of 1997,
primarily as a result of the 41.0% increase in net sales over the same period.
For the six-month period ended June 30, 1997, sales and marketing expenses
increased by $2,499,000 or 37.0% to $9,258,000. As a percentage of net sales,
sales and marketing expenses decreased from 15.4% in the first six months of
1996 to 14.8% in the first six months of 1997. The absolute dollar increase in
sales and marketing expenses resulted primarily from new product introduction
costs and expanded infrastructure associated with the Ibid(TM) Business Products
Division, as well as expenses resulting from two new international sales offices
in Korea and Hong Kong, which opened during the quarter ended June 30, 1997, and
increased spending to support the sales growth, including commissions.
General and Administrative General and administrative expenses for the quarter
ended June 30, 1997 increased from the corresponding period of 1996 by $616,000
or 43.2% to $2,041,000. For the six-month period ended June 30, 1997, general
and administrative expenses increased over the corresponding period of 1996 by
$1,128,000 or 40.4% to $3,917,000. As a percentage of net sales, general and
administrative expenses increased slightly to 6.3% from 6.2% for the three-month
periods ended June 30, 1997 and 1996 and held constant at 6.3% for the six-month
periods ended June 30, 1997 and 1996. The absolute increase in spending reflects
costs associated with the expanding domestic and international operations and
with the Business Products Division.
Amortization of Intangible Assets For the quarter ended June 30, 1997,
operating expenses included $119,000 of amortization relating to various
acquisitions and purchases of technologies, as compared to $112,000 for the
quarter ended June 30, 1996. For the six-month period ended June 30, 1997,
amortization expense was $238,000 as compared to $223,000 for the comparable
period of 1996.
Operating Income Operating income in the quarter ended June 30, 1997 of
$3,313,000 represented an increase of $1,509,000 or 83.6% over the second
quarter of 1996. For the six-month period ended June 30, 1997, operating income
of $6,149,000 reflects an increase of $2,680,000 or 77.3% over the comparable
period of 1996. For the three-month period ended June 30, 1997 and 1996,
international operations accounted for 5.5% and 6.3%, respectively, of operating
income. For the six- month periods ended June 30, 1997, and June 30, 1996
international operations accounted for 3.3% and 1.2% respectively of operating
income.
Arbitration Costs During the second quarter of 1997, the Company recorded
$595,000 in one-time special charges related to the final settlement of an
arbitration case against Nissha Printing Company Ltd. During the second quarter
of 1996 the Company incurred $591,000 in arbitration costs related to the same
International Arbitration. For the six-month periods ended June 30, 1997 and
1996 arbitration cost were $595,000, and $718,000, respectively, reflecting the
one-time settlement charges in 1997 as compared to the on-going arbitration
costs in 1996. This completes the Company's obligations pursuant to this matter.
Provision for Income Taxes The Company's effective tax rate for both the three
and six-month periods ended June 30, 1997 was 36.0% as compared to 36.5% for the
comparable periods of 1996. The effective tax rates in all periods differed
from the federal statutory rate of 34% primarily as a result of the provision
for state income taxes and the inability of the Company to record a tax benefit
from certain foreign operating loss carryforwards, partially offset by the
benefit related to the Company's foreign sales corporation and tax-exempt
interest income.
9
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 1997, the Company had net working capital of $61,252,000,
including approximately $33,248,000 in cash, cash equivalents and marketable
securities. The Company reported net cash used by operating activities of
$1,504,000 for the six-months ended June 30, 1997. The use of cash was required
to support both the expanding touchscreen business and the new Ibid product
line. Additionally, the Company maintains a $3,000,000 bank line of credit. As
of June 30, 1997, the Company had no borrowings outstanding under its bank line
of credit.
During 1997, the Company constructed and occupied a 57,000 square-foot facility
on land purchased in 1995. During the six months ended June 30, 1997, the
Company incurred approximately $2,500,000 of costs associated with this
construction.
Pending operating needs, the Company has invested its cash in investment grade,
interest bearing securities. The Company believes that these cash investments,
together with anticipated cash flows from operations pursuant to its current
operating plan, will be sufficient to meet the Company's working capital and
capital expenditure requirements, at least through 1998. While the Company
regularly evaluates acquisition candidates, conducts preliminary discussions
regarding acquisitions and intends to pursue acquisition opportunities available
to it, there can be no assurance that any such acquisition will be made or if
any such acquisition is completed, that cash consideration will be offered by
the Company.
The discussion contained in this section, as well as elsewhere in this Form
10-Q, may contain forward-looking statements based on the current expectations
of the Company's management. Such statements are subject to certain risks and
uncertainties which could cause actual results to differ materially from those
projected. Readers are cautioned not to place undue reliance on these forward-
looking statements which speak only as of the date hereof. The Company
undertakes no obligation to publicly release any revisions to these forward-
looking statements which may be necessary to reflect events or circumstances
occurring after the date hereof or to reflect the occurrence of unanticipated
events.
10
PART II OTHER INFORMATION
ITEM 1. Legal Proceedings
The Company was involved in an international arbitration entitled
MicroTouch Systems, Inc. vs. Nissha Printing Co. Ltd., ("Nissha") which was
under the auspices of the International Chamber of Commerce ("ICC"). The case
was based on the Company's claims that Nissha breached non-competition
provisions and other terms of a distribution agreement between the Company and
Nissha.
The Company was informed in January, 1997 that while it had won the case
based on the merits of its claim, any recovery of damages was time barred under
the terms of the original agreement between the two parties in the dispute. As a
result, the Company was required to pay a portion of Nissha's fees and costs
associated with the arbitration, which portion totaled $595,000 as determined by
the arbitrators in the case. This completes the company's obligations pursuant
to this matter.
ITEM 4. Submission of matters to a vote of security holders.
At the Annual Meetings of Stockholders held on June 12, 1997 and June 25, 1997,
the Company's stockholders voted as follows:
a) To reelect Messrs. Edward J. Stewart, III and Ronald D. Fisher to the
Board of Directors for respective three-year terms.
The terms of Messrs. James D. Logan, D. Westervelt Davis and Frank
Manning as directors continued after the meeting.
Total Vote for Total Vote Against or Withheld
Each Nominee For Each Nominee
------------ ----------------
Edward J. Stewart 6,894,175 169,035
Ronald D. Fisher 6,890,202 173,008
b) To approve the amendment to the 1992 Equity Incentive Plan to increase
the number of shares that may be subject to awards by 375,000 to an
aggregate of 2,375,000 shares.
Total vote for the proposal 4,162,336
Total vote against the proposal or withheld 2,503,777
Abstentions 25,879
Broker Non-votes 371,218
c) To approve Arthur Andersen LLP as independent auditors of the Company
for the year ending December 31, 1997.
Total vote for the proposal 7,032,860
Total vote against the proposal or withheld 13,974
Abstentions 16,376
Broker Non-votes 0
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3.1 Restated Articles of Organization, as Amended(1)
3.2 Amended and Restated By-Laws, as Amended(2)
4.1 Form of Stock Certificate(2)
10.1 1992 Equity Incentive Plan as amended. Filed herewith
27 Financial Data Schedule. Filed herewith.
(1) Filed as an Exhibit to the Annual Report on Form 10-K filed
for the year ended December 31, 1995 and incorporated herein by
reference.
(2) Filed as an exhibit to the Registration Statement on Form S-1
filed with the Securities and Exchange Commission on June 26, 1992
(Registration Statement No. 33-47874) and incorporated herein
by reference.
(b) Reports on Form 8-K
The Company filed no current reports on Form 8-K during the
quarter ended June 30, 1997.
11
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.
MicroTouch Systems, Inc.
Dated: August 12, 1997 BY: /s/ Geoffrey P. Clear
---------------------------------
Geoffrey P. Clear
Vice President -
Finance & Administration,
Chief Financial Officer &
Treasurer
13
Exhibit Index
-------------
Exhibit
- -------
3.1 Restated Articles of Organization, as Amended(1)
3.2 Amended and Restated By-laws(2)
4.1 Form of Stock Certificate(2)
10.1 1992 Equity Incentive Plan, as amended. Filed herewith
27 Financial Data Schedule. Filed herewith
(1) Filed as an Exhibit to the Annual Report on Form 10-K filed
for the year ended December 31, 1995 and incorporated herein by
reference.
(2) Filed as an exhibit to the Registration Statement on Form S-1
filed with the Securities and Exchange Commission on June 26,
1992 (Registration Statement No. 33-47874) and incorporated
herein by reference.
14