FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For Quarterly Period Ended March 31, 1998
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 No. 0-17757
W-W CAPITAL CORPORATION
(exact name of Registrant as specified in its charter)
Nevada 93-0967457
------ ----------
(State or other jurisdiction of (IRS Employer Identi-
incorporation or organization) fication Number)
3500 JFK Parkway Suite 202 Ft. Collins, CO
------------------------------------------
80525 (Address of principal executive offices, including zip code)
(970) 207-1100
(Registrant's telephone number, including area code)
Not Applicable
(Former name, address and former fiscal year, if changed since last report)
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 the filing
requirements for the past 90 days. Yes [X] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether Registrant has filed all documents and reports
required to be filed by Sections 12, 13 or 15 (d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a
court.
Yes [ ] No [ ] NOT APPLICABLE [X]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Title of Each Class Number of Shares Outstanding
- ------------------- at November 10, 1997
Common stock --------------------
$0.01 Par Value 5,540,661
W-W CAPITAL CORPORATION
Index
PART I FINANCIAL INFORMATION PAGE NO.
- ------ --------------------- --------
Item 1 Balance Sheets
- ------ March 31, 1998 and June 30, 1997 1
Statements of Operations
Three and Six Months Ended
March 31, 1998 and 1997 3
Statements of Cash Flows
Six Months Ended
March 31, 1998 and 1997 4
Notes to Financial Statements 6
Item 2 Management's Discussion and Analysis
- ------ of Financial Condition and Results
of Operations 7
PART II OTHER INFORMATION
- ------- -----------------
Item 1 LEGAL PROCEEDINGS 12
- ------
Item 2 CHANGES IN SECURITIES 12
- ------
Item 3 DEFAULTS UPON SENIOR SECURITIES 12
- ------
Item 4 SUBMISSION OF MATTERS TO VOTE OF
- ------
SECURITY HOLDERS 12
Item 5 OTHER INFORMATION 12
- ------
Item 6 EXHIBITS AND REPORT ON FORM 8-K 12
- ------
SIGNATURES 13
Part 1-FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
- -----------------------------
W-W CAPITAL CORPORATION
-----------------------
Balance Sheet
March 31, June 30,
1998 1997
---- ----
(Unaudited)
Assets
Current assets:
Cash ...................................... $ (75,569) $ 357,373
----------- -----------
Trade accounts receivabl .................. 2,060,180 2,160,991
Less allowance for doubtful accounts ...... ( 134,000) (134,000)
----------- -----------
Net accounts receivable ............... 1,926,180 2,026,991
Accounts receivable, related party ........ 168,407 167,572
Accounts receivable, other ................ 48,462 13,321
Inventories:
Raw materials ........................... 433,571 461,311
Work-in-process ......................... 188,890 188,890
Finished goods .......................... 2,663,907 2,690,955
----------- -----------
Total inventories ..................... 3,286,368 3,341,156
----------- -----------
Prepaid expenses .......................... 56,837 15,984
Current portion of notes receivable
from related parties- ................. -- 9,286
Current portion of notes receivable, other 811 6,549
----------- -----------
Total current assets .................. 5,411,496 5,938,232
----------- -----------
Property and equipment, at cost ................ 4,652,896 4,553,214
less accumulated depreciation
and amortization .......................... (2,522,672) (2,256,851)
----------- -----------
Net property and equipment ............ 2,130,224 2,296,363
----------- -----------
Other Assets:
Real Estate held for resale- .............. -- 381,035
Long-term notes receivable from
related parties, net of current portion 23,028 23,028
Long-term notes receivable, other, net
of allowance for doubtful accounts
of $10,000 and current portion1 ....... 20,697 9,753
Other assets .............................. 24,091 30,682
----------- -----------
Total other assets .................... 167,816 444,498
----------- -----------
TOTAL ASSETS .......................... $ 7,709,536 $ 8,679,093
=========== ===========
Continued on following page
See accompanying notes to financial statements.
1
W-W CAPITAL CORPORATION
Balance Sheet, Continued
March 31, June 30,
1998 1997
---- ----
(Unaudited)
Liabilities
Current Liabilities:
Accounts Payable ................................. $ 1,627,883 $ 2,232,990
Revolving credit note payable to Bank ............ 1,684,000 1,834,000
Accrued property taxes ........................... 37,628 34,442
Accrued payroll and related taxes ................ 207,086 184,569
Accrued interest payable ......................... 4,718 12,344
Accrued commissions related parties .............. 150,000 150,000
Current portion of long-term payables ............ 1,007,373 1,144,949
Current portion of notes payable to
related parties .............................. 22,654 27,069
Current portion of capital lease obligation ...... 4,145 9,889
Other current liabilities ........................ 12,063 18,777
----------- -----------
Total current liabilities .................... 4,757,550 5,649,029
----------- -----------
Other Liabilities:
Accrued commissions related party- ............... --
Long-term note payable to financial
institutions net of current portion .......... 497,938 575,390
Long-term capital lease obligation, net
of current portion ........................... -- 1,684
----------- -----------
Total other Liabilities ...................... 497,938 577,074
----------- -----------
TOTAL LIABILITIES ............................ 5,255,488 6,226,103
----------- -----------
Stockholders' Equity
Preferred stock: $10.00 par value, 400,000 shares
authorized - ..................................... --
Common stock, $0.01 par value, 15,000,000 shares
authorized; 5,540,661 and 5,530,661 shares issued 55,406 55,406
and outstanding at Dec. 31, 1997 and June 30, 1997
Capital in excess of par value ................... 3,304,629 3,304,629
Accumulated Deficit .............................. (887,081) (888,139)
----------- -----------
2,472,954 2,471,896
Less 20,264 shares of treasury stock at cost ..... (18,906) (18,906)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY ................... 2,454,048 2,452,990
----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY ......................... $ 7,709,536 $ 8,679,093
=========== ===========
See accompanying notes to financial statements.
2
W-W CAPITAL CORPORATION
Statements of Operations
(Unaudited)
Three Months Ended Nine Months Ended
March 31, March 31,
--------- ---------
1998 1997 1998 1997
---- ---- ---- ----
Net Sales .............................. $ 3,565,316 $ 3,604,314 $ 11,237,554 $ 10,531,721
Cost of goods sold ..................... 2,907,739 2,829,591 9,168,487 8,600,383
------------ ------------ ------------ ------------
Gross profit ...................... 657,577 774,723 2,069,067 1,931,338
------------ ------------ ------------ ------------
Operating expenses:
Selling expenses .................. 297,625 308,790 881,110 852,851
General and administrative expenses 303,968 347,010 1,006,273 1,043,427
------------ ------------ ------------ ------------
Total operating expenses ...... 601,593 655,800 1,887,383 1,896,278
------------ ------------ ------------ ------------
Operating earnings ............ 55,984 118,923 181,684 35,060
------------ ------------ ------------ ------------
Other income (expense):
Interest income ................... 19,279 16,639 63,723 52,621
Interest expense .................. (86,089) (104,065) (256,946) (289,270)
Gain (loss) on sale of assets ..... 8,000 3,250 ( 63,754) 6,261
Other income (expense), net ....... 18,273 8,029 76,351 17,887
------------ ------------ ------------ ------------
Total other income (expense) .. (40,537) (76,147) (180,626) (212,501)
------------ ------------ ------------ ------------
Earnings (loss) before income taxes 15,447 42,776 1,058 (177,441)
------------ ------------ ------------ ------------
Provision for deferred income taxes .... -- -- -- --
------------ ------------ ------------ ------------
Net earnings (loss) ............... $ 15,447 $ 42,776 $ 1,058 $ (177,441)
============ ============ ============ ============
Basic earnings (loss) per common share $ .00 $ .01 $ .00 $ ( .03)
============ ============ ============ ============
Diluted earnings (loss) per common share $ .00 $ .01 $ .00 $ ( .03)
============ ============ ============ ============
Weighted-average number of
common shares outstanding 5,549,544 5,537,328 5,549,544 5,537,328
=========== =========== ============ ============
See accompanying notes to financial statements.
3
W-W CAPITAL CORPORATION
Statements of Cash Flows
(Unaudited)
Nine Months Ended
March 31,
---------
1998 1997
---- ----
Cash flows from operating activities:
Net earnings (loss) ............................. $ 1,058 $( 177,441)
Adjustments to reconcile net earnings to net cash
provided by (used in) operating activities:
Depreciation and amortization ................... 272,413 257,884
Loss (gain) on property and equipment ........... ( 8,600) ( 6,261)
Loss (gain) on sale of real estate .............. 72,354 --
Provisions for loss on accounts and notes
receivable- ................................. -- (9,602)
Deferred income taxes - ......................... -- 800
Changes in assets and liabilities:
Accounts receivable ............................. 100,811 (132,590)
Inventories ..................................... 54,789 156,066
Other current and non-current assets ............ ( 76,829) (116,702)
Accounts payable ................................ (605,105) (105,047)
Accrued expenses
and other current liabilities ............... 11,363 27,296
--------- ---------
Net cash provided by (used in) operating
activities ............................. (177,746) (105,597)
--------- ---------
Cash flows from investing activities:
Proceeds from sale of property and equipment .... 600 6,300
Proceeds from sale of real estate ............... 198,681 --
Increase in real estate held for sale- .......... -- ( 1,301)
Purchase of property and equipment .............. ( 91,682) ( 30,492)
Increase in other notes receivable- ............. -- --
Proceeds from other notes receivable ............ 4,793 138,776
Proceeds from stockholders' notes receivable .... 9,285 18,906
--------- ----------
Net cash provided by (used in) investing
activities ............................. 121,677 132,189
--------- ----------
(Continued on following page)
4
W-W CAPITAL CORPORATION
Statements of Cash Flows, Continued
(Unaudited)
Nine Months Ended
March 31,
---------
1998 1997
---- ----
Cash flows from financing activities:
Proceeds from lines-of-credit .................................. $ -- $ 100,000
Payments on lines-of-credit .................................... (150,000) --
Payments on notes payable, related parties ..................... (4,415) ( 3,996)
Payments on notes payable, financial
institutions and government entities ....................... (241,858) ( 158,285)
Proceeds from exercise of common stock option- ................. 630
Proceeds from notes payable .................................... 19,400 --
--------- ----------
Net cash provided by (used in) financing
activities ................................................. (376,873) ( 61,651)
--------- ----------
Net increase (decrease) in cash ................................ (432,942) ( 35,059)
Cash at beginning of period .................................... 357,373 131,022
--------- ----------
Cash at end of period ...................................... $( 75,569) $ 95,963
========= ==========
Supplement schedule of non cash investing and financing activities:
Sold investment in real estate held for sale:
Receipt of note receivable ................................. $ 110,000 $ --
========= =========
Supplemental disclosures of cash flow information:
Cash paid during the period for interest ................... $ 264,571 $ 289,270
========= =========
5
See accompanying notes to financial statements.
W-W CAPITAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
- ------------------------------
The accompanying unaudited financial statements include the accounts of
W-W Capital Corporation (the Company) and its three wholly-owned subsidiaries
W-W Manufacturing Co., Inc., Titan Industries, Inc., and Eagle Enterprises, Inc.
All significant intercompany accounts and transactions have been eliminated.
The accompanying unaudited 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 Rule 10-01 of Regulation
S-X. They do not include all information and footnotes necessary for a fair
presentation of financial position, results of operations and changes in cash
flows in conformity with generally accepted accounting principles for full-year
financial statements. However, except as disclosed herein, there has been no
material change in the information disclosed in the notes to W-W Capital
Corporation's financial statements included in its Annual Report on Form 10-K
for the year ended June 30, 1997. In the opinion of management, all adjustments
(consisting of normal recurring accrual basis adjustments) considered necessary
for a fair presentation have been reflected in the accompanying financial
statements. Operating results for the three and nine month periods ended March
31, 1998, are not necessarily indicative of the result that may be expected for
the year ended June 30, 1998.
NOTE 2 - NET BASIC EARNINGS PER SHARE
- -------------------------------------
The net basic earnings (loss) per share amount included in the
accompanying statement of operations have been computed using the
weighted-average number of shares of common stock outstanding and the dilative
effect, if any, of common stock equivalents existing during the applicable three
and nine month periods.
NOTE 3 - RELATED PARTY TRANSACTION
- ----------------------------------
The Company has a number of related party transactions. See the
footnotes to W-W Capital Corporation financial statements for the year ended
June 30, 1997, included in its Annual Report on Form 10-K for the nature and
type of related party transactions.
6
A summary of the related party transactions that effect the Company's
statement of operations for the nine months ended March 31, 1998 and 1997,
respectively, is as follows:
Three Months Ended Nine Months Ended
March 31, March 31,
--------- ---------
Transactions with
Related Parties 1998 1997 1998 1997
- --------------- ---- ---- ---- ----
Rent expense ............... $15,000 $15,000 $45,000 $45,000
Interest income ............ -- 504 267 1,934
Interest expense ........... 592 735 1,885 2,304
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
- --------------------------------------------------------------------------------
of Operations.
- --------------
The business of the Company is carried on within two segments by a
number of operating units. The livestock handling equipment segment is composed
of W-W Manufacturing (W-W Manufacturing) and Eagle Enterprises (Eagle), and the
water and environmental product segment is represented by Titan Industries
(Titan).
(A) Analysis of Results of Operations
---------------------------------
The Company had net profits of $15,447 and $1,058, for the three and
nine month period ended March 31, 1998, as compared to net profit of $42,776 and
a net loss of $177,441 in 1997. Without the loss from the real estate sale in
Texas in November of 1997 of $72,354, the Company would have had shown a profit
of $73,412 for the nine months ended March 31, 1998 as compared to $42,776 for
the same period of 1997.
Net sales increased to $11,237,554 for the nine months ended March 31,
1998, compared to $10,531,722 for 1997. The following table represents actual
sales by segment group.
Sales by segment group: Three Months Ended Nine Months Ended
March 31, March 31,
--- --------
1998 1997 1998 1997
---- ---- ---- ----
Livestock Handling Equipment ... $ 2,330,670 $ 2,059,259 $ 6,706,532 $ 5,765,786
Water and Environmental Products 1,234,646 1,545,055 4,531,022 4,765,936
----------- ----------- ----------- -----------
Total Sales $ 3,565,316 $ 3,604,314 $11,237,554 $10,531,772
=========== =========== =========== ===========
7
The sales in the water and environmental product segment decreased to $4,531,022
as compared to $4,765,936 for the corresponding period of 1997. The decrease of
$234,914 is attributable to an abnormal and extreme slowdown in general market
conditions throughout the country. Titan also experienced extreme wet and cold
weather conditions due to El Nino in all major market areas in the January and
February selling period. Conditions improved slightly in March, but due to the
extreme slowdown in the early part of the quarter the Company could not recover
for the quarter. As weather improves, sales have shown an above average increase
over prior years. As we move into late spring and summer, market conditions are
expected to be strong and sales should remain at or above normal levels. While
these factors normally contributed to a decline in sales for Titan, the Company
usually does not experience these conditions in all markets simultaneously.
Titan is taking steps and planning sales strategies to maintain sales levels and
avoid the losses generated during this selling period. The Company continues to
see strong acceptance of its new products developed and introduced over the past
year. With these products include the Titan Combo-Buried Pressure Tank,
Ven-ta-Slot PVC, Enviroflex well screen and slotted high-density polyethylene
pipe. These products have allowed Titan the opportunity to go into
non-traditional water well markets such as horizontal drilling, landfills,
highway construction and various mining applications. These new products, market
improvements and Titan's commitment to quality and service, the Company is
anticipating to see strong sales throughout the spring, summer and fall selling
season. Titan will continue to expand into new markets through its efforts to
establish new distributors and manufactures representation in all areas of the
country. By continuing to concentrate expansion in the south, east and on the
west coast, Titan should not be effected by weather and economics so as to
eliminate major impacts on sales.
The sales in the livestock handling equipment segment increased $271,411 or
13.2% during the quarter ended March 31, 1998 as compared to the corresponding
quarter of 1997. The increase in livestock equipment sales is attributed to high
distributor/dealer demand for all traditional equipment and generally good
market conditions in the cattle industry. Sales increased at Eagle to $1,767,612
for the first nine months ended March 31, 1998 compared to $1,456,962 during the
same period of 1997. Sales at W-W Manufacturing increased from $4,308,824 to
$4,938,920 or an increase of $630,096 during the nine months ended March 31,
1998. As beef prices and market conditions remain good, sales in all areas of
the livestock and rodeo equipment continue to increase. Rodeo, livestock systems
and cattle working areas remain strong and hydraulic chutes continue to sell at
record levels. The Company is presently working on several new products to be
introduced during the summer and fall market. Product improvements to existing
products have been made including systems, squeeze chutes and headgates which
has been another factor adding to the increase in sales. These improvements have
allowed the Company to gain acceptance with new customers in markets not
normally serviced by the Company. The east coast market serviced by Eagle
continues to show improvement, as this market continues to accept and appreciate
a higher quality of equipment, replacing the lighter weight products previously
offered in this market. The cow/calf operator, which is the largest segment of
the eastern market, has learned the
8
value in having heavy working equipment. With the cattle market remaining strong
and product improvements that have been made, the Company feels its market
penetration will continue to improve. The Company expects the livestock handling
equipment sales at both locations to remain strong through the balance of the
year.
Gross margins had shown stronger improvement through the first six months ended
December 31, 1997. However, during the quarter ended March 31, 1998, the Company
realized a decline in gross margins from 21.5% to 18.4%. This decline is
attributed to higher than normal manufacturing cost in the livestock equipment
segment plant in Dodge City including repairs to the facility, higher labor cost
due to labor shortages, and higher freight cost transporting products between
plants to meet sales demand. The other factor attributing to the gross profit
decline was the decline in sales at Titan below break-even levels, therefore not
covering normal fixed cost. Gross profit margins for the nine months ended March
31, 1998 remained constant between the 1997 and 1998 periods. Gross profit
margins in the livestock equipment segment remained constant for the nine months
ended March 31, 1998. Eagle had an operating profit of $88,395 for the nine
months ended March 31, 1998 compared to an operating loss of $7,020 for the same
period of 1997. Operating profits at W-W Manufacturing were $99,939 for the nine
months ended March 31, 1998 as compared to $17,235 for the same period of 1997.
Gross profit margins in the water and environmental segment increased from 15.5%
in 1997, to 16.4% in 1998. This increase is due to the increase in sales of the
manufactured products which are at higher profit margins. The water and
environmental segment had a net operating loss for the nine months ended of
$50,215 as compared to a loss of $46,732 for the same period of 1997. During the
three months ended March 31, 1998 Titan incurred a net loss of $81,490 as
compared to a net profit of $4,459 for the same period of 1997. Titan is
continuing to develop markets and products that will improve sales during this
slow period therefore allowing the Company to at least break even or be
profitable at all times of the year.
The selling expenses as a percent of sales, decreased to 7.7% in 1998 as
compared to 8.1% in 1997. This decrease is attributed to an increase in sales
without a corresponding increase in selling expense. The cost associated with
developing new territories in the livestock handling equipment segment continue
to be absorbed and this cost is expected to continue to decline as sales are
realized from these markets. Selling expense in the water and environmental
products segment increased slightly due to the lower than normal sales during
the three month period ended March 31, 1998. As sales continue to improve
company wide, it is anticipated that the selling expense will stay level or
continue to decline as a percentage of sales.
General administrative expenses decreased $37,154 in 1998 as compared to 1997.
This decrease is a combination of lower legal fees involving lawsuits and the
Company continuing to cut and consolidate all general and administrative
expenses such as insurance, telephone and travel. There was an increase in
general administrative expense during the three months ended March 31, 1997 as
compared to current period of 1998 due to some expenses related to moving the
corporate office, severance pay and the costs associated with exiting the Denver
9
office lease early. The Company and Board of Directors will continue to take
steps necessary to reduce when ever possible administrative expenses at all
subsidiaries as well as the corporate level.
Interest expense continues to decline as overall borrowing is reduced. Interest
expense decreased to $256,946 during the nine month period ended December 31,
1998 as compared to $289,270 for the comparable period of 1997. The Company
reduced its revolving line of credits $150,000 and paid off other term notes
with the proceeds of the land sold in Texas. As profits continue and cash flow
improves, the Company plans to reduce debt therefore reducing overall interest
expense.
(B) Liquidity and Capital Resources
-------------------------------
The Company realized a profit of $1,058 for the nine months ended March 31, 1998
compared to a loss of $177,441 for the same period of 1997. Had the Texas
property not been sold in November of 1997 the Company would have reported a
$73,412 profit for the nine month period ended March 31, 1998.
The Company continues to improve cash flow, during the nine month period ended
March 31, 1998 cash flow increased to $345,825 as compared to $80,443 for the
same period of 1997. With orders improving during spring and summer and general
market and economic conditions remain strong, management anticipates the Company
to remain profitable during the balance of the fiscal year.
On November 25, 1997, the Company sold its real estate holding in Mansfield,
Texas and reported a loss of $72,354. The Company had been negotiating with a
joint venture development partner for some time but had not been successful in
obtaining the financing to develop the project adequately. The Company's real
estate listing agent had been successful in obtaining two buyers who could come
together to pay an adequate price for the land. Due to market conditions and the
cost of holding the land, the board and Company banks agreed that selling the
land was the most advantageous position for the Company to take. Cash flow
generated during the first nine months was used in operations to substantially
reduce accounts payable and bank debt. Management will continue to monitor
inventory levels, improve receivable collections, reduce cost and improve
manufacturing efficiencies to insure adequate working capital. Net cash was
provided from investing activities through the sale of the land and the proceeds
were used to reduce overall Company debt, as indicated earlier.
The Company has renewed its bank lines-of-credit with two of its primary lenders
through October 31, 1998. These loans have only been renewed by the lender for
short term periods due to operating losses sustained in 1996. With the losses of
prior years and the second quarter the Company had violated certain loan
covenants but with the strong improvement by the Company in profits and cash
flow, the banks are continuing to renew our loans and wave the loan covenant
violations.
10
It is anticipated that new lines-of-credit will be in place by October 31, 1998
with our existing lenders or arrangements will be made with new financial
institutions. Management is presently negotiating with several other lending
institutions to make adequate financial arrangements that should, over the long
run, be more beneficial to the Company with lower fees and interest cost.
Management believes that with net cash provided from cash flow, and the
Company's ability to maintain and obtain additional long-term financing, the
Company will have adequate sources to meet its current obligations.
11
PART II
OTHER INFORMATION
-----------------
ITEM 1. LEGAL PROCEEDINGS
-----------------
Not Applicable
ITEM 2. CHANGES IN SECURITIES
---------------------
Not Applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
-------------------------------
Not Applicable
ITEM 4. SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS
---------------------------------------------------
Not Applicable
ITEM 5. OTHER INFORMATION
-----------------
Not Applicable
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
Exhibit 27 Financial Data Schedule
12
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
W W CAPITAL CORPORATION
(Registrant)
Dated: May 20, 1998 By: /s/ Steve D. Zamzow
-----------------------------
Steve D. Zamzow, President & CEO
Dated: May 20, 1998 By: /s/ Dianne Gano
------------------------------
Dianne Gano, Controller
13