FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark one)
__X__ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934.
For Quarter Ended September 30, 1995
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 1-9751
CHAMPION ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)
MICHIGAN 38-2743168
- -------------------------------- ---------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2701 University Drive, Suite 320, Auburn Hills, MI 48326
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (810)340-9090
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes __X__ No _____
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
15,306,050 shares of the registrant's $1.00 par value
Common Stock were outstanding as of October 27, 1995.
PART I. FINANCIAL INFORMATION
CHAMPION ENTERPRISES, INC.
Consolidated Balance Sheets
(In Thousands, Except Par Value Amount)
ASSETS
Sept. 30, Dec. 31,
1995 1994
CURRENT ASSETS
Cash and cash equivalents $ 9,303 $ 23,027
Accounts receivable, trade 45,795 24,277
Inventories 45,113 39,644
Deferred taxes and other 10,560 10,884
-------- --------
Total current assets 110,771 97,832
-------- --------
PROPERTY AND EQUIPMENT
Cost 56,881 47,645
Less-accumulated depreciation 20,619 17,586
-------- --------
36,262 30,059
-------- --------
Goodwill, net 81,104 37,076
Other assets 6,202 6,263
-------- --------
Total assets $234,339 $171,230
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable to bank $ 8,100 $ -
Accounts payable 39,393 29,098
Accrued dealer discounts 17,205 16,151
Accrued compensation and payroll taxes 15,286 11,285
Accrued warranty obligations 10,808 8,432
Accrued insurance 4,639 3,804
Other liabilities 17,960 10,309
-------- --------
Total current liabilities 113,391 79,079
-------- --------
Long-term debt 1,275 -
Other long-term liabilities 15,690 12,857
SHAREHOLDERS' EQUITY
Common stock, $1 par value, 1995-30,000
authorized, 15,239 issued; 1994-
15,000 authorized, 7,553 issued
(See Note 6) 15,239 7,553
Capital in excess of par value 29,671 36,981
Retained earnings 59,954 35,829
Foreign currency translation adjustments (881) (1,069)
-------- -------
Total shareholders' equity 103,983 79,294
-------- -------
Total liabilities and shareholders'
equity $234,339 $171,230
======== ========
See accompanying Notes to Consolidated Financial Statements.
CHAMPION ENTERPRISES, INC.
Consolidated Income Statements
(In Thousands, Except Per Share Amounts)
13 Weeks Ended 39 Weeks Ended
Sept. 30, Oct. 1, Sept. 30, Oct. 1,
1995 1994 1995 1994
--------- -------- -------- --------
Net sales $226,832 $168,786 $623,914 $450,865
-------- -------- -------- --------
Cost of products sold 194,444 145,607 536,498 387,121
Selling, general, and
administrative expenses 16,108 12,203 46,196 35,363
-------- -------- -------- --------
210,552 157,810 582,694 422,484
-------- -------- -------- --------
Operating income 16,280 10,976 41,220 28,381
Other income (expense):
Interest income 179 242 570 654
Interest expense (609) (195) (1,885) (656)
Other, net 71 29 220 (114)
-------- -------- -------- --------
Income from continuing
operations before
income taxes 15,921 11,052 40,125 28,265
Income taxes 6,300 2,900 16,000 7,400
-------- -------- -------- --------
Income from continuing
operations 9,621 8,152 24,125 20,865
Income from discontinued
operations, net of income
taxes of $1,105 - - - 1,908
-------- -------- -------- --------
Net income $ 9,621 $ 8,152 $ 24,125 $ 22,773
======== ======== ======== ========
Per share amounts (See Note 7):
Income from continuing
operations $ 0.61 $ 0.52 $ 1.53 $ 1.36
Income from discontinued
operations - - - 0.12
-------- -------- -------- --------
Net income $ 0.61 $ 0.52 $ 1.53 $ 1.48
======== ======== ======== ========
Weighted average shares
outstanding 15,825 15,716 15,794 15,375
See accompanying Notes to Consolidated Financial Statements.
CHAMPION ENTERPRISES, INC.
Consolidated Statements of Cash Flows
(In Thousands)
39 Weeks Ended
Sept. 30, Oct. 1,
1995 1994
CASH FLOWS FROM CONTINUING OPERATING ACTIVITIES:
Income from continuing operations $ 24,125 $ 20,865
-------- --------
Adjustments to reconcile income from continuing
operations to net cash provided by
continuing operating activities:
Depreciation and amortization 4,535 2,959
Deferred income taxes - (5,569)
Increase/decrease, net of acquisitions:
Accounts receivable (14,917) (19,671)
Inventories (3,730) (8,125)
Accounts payable 6,157 14,899
Accrued liabilities 6,866 10,395
Other, net 957 740
-------- --------
Total adjustments (132) (4,372)
-------- --------
Net cash provided by continuing
operating activities 23,993 16,493
-------- --------
CASH FLOWS FROM DISCONTINUED ACTIVITIES:
Income from discontinued operations - 1,908
Decrease in net assets of discontinued
operations 626 318
-------- --------
Net cash provided by discontinued activities 626 2,226
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions (38,228) (36,496)
Proceeds on disposal of assets 276 300
Additions to property and equipment (5,732) (6,892)
Deferred purchase price payment (2,600) -
-------- --------
Net cash used for investing activities (46,284) (43,088)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in notes and current
maturities payable 8,134 (86)
Tax benefit of stock options exercised 800 2,600
Repayment of long-term debt (150) -
Common stock issued 1,081 2,543
Common stock purchased (1,924) (192)
-------- --------
Net cash provided by financing activities 7,941 4,865
-------- --------
NET DECREASE IN CASH AND CASH EQUIVALENTS (13,724) (19,504)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 23,027 34,441
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 9,303 $ 14,937
======== ========
ADDITIONAL CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 1,679 $ 544
Income taxes 15,513 10,316
SCHEDULE OF CASH USED FOR ACQUISITIONS:
Purchase price $ 47,600 $ 40,000
Less: Deferred portion of purchase price (8,900) (2,600)
Cash acquired, net (799) (1,591)
Plus: Payment of mortgage - 432
Acquisition costs 327 255
-------- --------
$ 38,228 $ 36,496
======== ========
See accompanying Notes to Consolidated Financial Statements.
CHAMPION ENTERPRISES, INC.
Notes to Consolidated Financial Statements
1. For each of the dates indicated, inventories consisted of the
following (in thousands):
Sept. 30, Dec. 31,
1995 1994
-------- --------
Raw materials $29,008 $25,449
Work-in-process 4,131 4,432
Finished goods 11,974 9,763
------- -------
$45,113 $39,644
======= =======
2. On February 3, 1995 the registrant purchased the assets and
assumed certain liabilities of Chandeleur Homes, Inc.
(Chandeleur) and Crest Ridge Homes, Inc. (Crest Ridge),
privately-held corporations with manufactured housing
operations in Alabama and Texas. The cash purchase price of
approximately $46.9 million was financed from existing cash
and new bank debt. Under the terms of the agreements, the
registrant paid $35 million of the purchase price at the date
of acquisition. A total of $3 million was held back to cover
potential post-closing audit adjustments, all of which has
been paid. The remaining $8.9 million will likely be paid
early in 1996 upon the attainment of certain profit levels.
The acquisitions were accounted for using the purchase method.
Chandeleur's and Crest Ridge's results of operations are
included with those of the registrant from the acquisition
date. In addition to these acquisitions, a company which
arranges transportation for a portion of the registrant's
manufactured housing business was acquired during the first
quarter for $700,000.
Summarized below are the unaudited pro forma combined results
of operations for the 13 and 39 week periods ended September
30, 1995 and October 1, 1994 assuming the Chandeleur and Crest
Ridge acquisitions had taken place on January 1, 1995 and
January 2, 1994, respectively. The pro forma results are not
necessarily indicative of future earnings or earnings that
would have been reported had the acquisitions been completed
when assumed. Further, the pro forma income should not be
taken as indicative of earnings for a full year.
(In thousands, except per share amounts)
13 Weeks Ended 39 Weeks Ended
------------------ -------------------
Sept. 30, Oct. 1, Sept. 30, Oct. 1,
1995 1994 1995 1994
-------- -------- -------- --------
Net sales $226,832 $193,543 $634,983 $522,092
-------- -------- -------- --------
Income from continuing
operations before
income taxes $ 15,921 $ 12,435 $ 41,085 $ 32,003
Income taxes 6,300 3,500 16,400 8,900
-------- -------- -------- --------
Income from
continuing
operations $ 9,621 $ 8,935 $ 24,685 $ 23,103
======== ======== ======== ========
Per share $ 0.61 $ 0.57 $ 1.56 $ 1.50
======== ======== ======== ========
Pro Forma Income Taxes
The pro forma provision for income taxes has been calculated
on a consolidated basis as if the transactions had been
completed at the beginning of the respective periods. The
difference between taxes provided for financial reporting
purposes and expected charges at the statutory rate for the
periods ended September 30, 1995 is due to state and foreign
tax charges. The prior year's tax provisions include the
benefit of net operating loss carryforwards. On a fully taxed
basis, earnings per share from continuing operations for the
13 and 39 weeks ended October 1, 1994 would have been $0.47
and $1.25, respectively.
Pro Forma Earnings Per Share
Pro forma earnings per share are based on the weighted average
number of shares outstanding during the respective periods
including stock options granted to Chandeleur and Crest Ridge
executives under agreements entered into in connection with
the acquisitions. Earnings per share have been adjusted for
the stock split discussed in Note 6 below.
3. As a result of the purchase of Chandeleur and Crest Ridge as
discussed in Note 2 above, the registrant recorded
approximately $45 million of goodwill (the excess of purchase
price over fair value of net assets acquired). The goodwill
is being amortized on the straight-line basis over the
expected periods to be benefited, which is 40 years. The
registrant will assess the recoverability of this intangible
asset on a regular basis by determining whether the
amortization of the goodwill balance over its remaining life
can be recovered through projected undiscounted future cash
flows.
4. The difference between income taxes provided for financial
reporting purposes and expected charges at the statutory rate
for the 13 and 39 weeks ended September 30, 1995 is due to
state and foreign tax charges. Prior year's tax provisions
included the benefit of net operating loss carryforwards.
The components of the income tax provisions for the 39 week
periods ended September 30, 1995 and October 1, 1994 follows
(dollars in thousands):
Sept. 30, Oct. 1,
Continuing Operations: 1995 1994
Statutory U.S. tax rate $14,044 $9,893
Increase (decrease) in rate
resulting from:
Higher rates on earnings of
foreign operations 381 200
State taxes 1,575 -
NOL benefit recognized and
other items - (2,693)
------- -------
Total provisions $16,000 $7,400
======= =======
Effective tax rates 40% 26%
======= =======
Discontinued Operations:
Statutory U.S. tax rate $ - $1,055
Increase in rate resulting from:
Other - 50
-------- -------
Total provisions $ - $1,105
======== =======
Effective tax rates - 37%
======== =======
5. Income from discontinued operations for the 39 weeks ended
October 1, 1994 includes a one-time after-tax gain of $1.9
million from the settlement of certain litigation.
6. On May 1, 1995 the shareholders approved a proposal to
increase the number of authorized shares to 30 million from 15
million. In addition, on May 1, 1995 the Board of Directors
approved a two-for-one split of the registrant's common stock
effective on May 30, 1995 to holders of record on May 15,
1995. The Board also approved a common stock repurchase
program for up to $10 million, approximately $1.9 million of
which was expended during the year-to-date period.
7. The per share amounts are calculated using the weighted
average number of shares outstanding for each of the periods
presented and includes common stock equivalents. Earnings per
share amounts and weighted average shares outstanding for all
periods presented, including pro forma amounts, have been
adjusted for the stock split.
8. The Consolidated Financial Statements are unaudited, but in
the opinion of management include all adjustments necessary
for a fair presentation of the results of the interim periods.
Such adjustments consisted of normal recurring items except
for the $1.9 million of income from discontinued operations
included in the 39 week period ended October 1, 1994.
Financial results of the interim periods are not necessarily
indicative of results that may be expected for any other
interim periods or for the fiscal year.
9. On October 27, 1995, subsequent to quarter end, the registrant
purchased 100% of the outstanding common stock of New Horizon
Manufactured Homes, Ltd., located in Alberta, Canada, for
approximately $3.9 million. Pursuant to the purchase
agreement, $3.2 million of the purchase price was paid on the
acquisition date and the remaining $700,000 will be paid upon
the earlier of the attainment of certain profit levels or
three years. The acquisition will be accounted for using the
purchase method.
10. Certain amounts in the prior periods' statements have been
reclassified to conform to the current periods' presentation.
CHAMPION ENTERPRISES, INC.
Management's Discussion and Analysis
of
Financial Condition and Results of Operations
RESULTS OF OPERATIONS
Below is a summary of period-to-period changes in the principal
items of the consolidated income statements. This chart is
followed by a discussion and analysis of significant factors
affecting the registrant's earnings for the period.
Comparison of Comparison of
13 Weeks Ended 39 Weeks Ended
September 30, 1995 & September 30, 1995 &
October 1, 1994 October 1, 1994
-------------------- --------------------
Increase (Decrease) Increase (Decrease)
(Dollars in Thousands) (Dollars in Thousands)
Net sales $58,046 34% $173,049 38%
Cost of products sold 48,837 34% 149,377 39%
Selling, general, and
administrative expenses 3,905 32% 10,833 31%
------- --------
Operating income 5,304 48% 12,839 45%
Interest income (63) (26%) (84) (13%)
Interest expense 414 212% 1,229 187%
Other - net 42 334
------- -------
Income from continuing
operations
before income taxes 4,869 44% 11,860 42%
Income taxes 3,400 117% 8,600 116%
------- -------
Income from continuing
operations 1,469 18% 3,260 16%
Income from discontinued
operations - (1,908)
------- --------
Net income $1,469 18% $ 1,352 6%
======= ========
Sales
Sales increases by segments of the business are as presented
below for the comparative periods ended September 30, 1995 and
October 1, 1994 (dollars in thousands):
Comparative Period Housing Commercial Vehicles
Dollars Units Dollars Units
13 weeks ended
9/30/95 and
10/1/94 $54,082 34% 2,196 38% $3,964 34% 72 26%
39 weeks ended
9/30/95 and
10/1/94 $162,366 39% 6,425 41% $10,683 33% 213 28%
Manufactured housing sales dollars for the quarter increased
due to a 38% unit shipment increase to 7,931 units during the
quarter, up from 5,735 units a year ago. Chandeleur and Crest
Ridge added $28.7 million to sales, or 18 percentage points of the
revenue increase on shipments of 1,503 units. Other manufactured
housing operations increased revenues by $25.4 million, or 16%,
and unit shipments by 693 units, or 12%. The registrant's U.S.
shipments, without Chandeleur and Crest Ridge, increased 730
units, or 13%, over the prior year's third quarter. Excluding
Chandeleur and Crest Ridge the multi-sectional mix was 63%, up 4
percentage points from a year ago. Average selling price, without
Chandeleur and Crest Ridge, increased 4% to $28,416 from $27,422 a
year ago, due to the higher multi-sectional mix, normal periodic
price increases and recovery of additional costs due to regional
energy and wind standards imposed by the Department of Housing and
Urban Development. Overall, average selling price for the current
third quarter was $26,648.
For the nine months ended September 30, 1995, Chandeleur and
Crest Ridge added $78.1 million to sales while other housing
operations increased revenues by $84.3 million, or 20%, and unit
shipments by 15%. The registrant's year-to-date U.S. shipments
rose 16% without Chandeleur and Crest Ridge. This increase
compares favorably to the industry's rise in shipments through
August 1995 of 12.5% to 223,741 units according to the
Manufactured Housing Institute (MHI), an industry trade
association. Market share in the U.S. for the eight-month period,
excluding Chandeleur and Crest Ridge, improved to 6.8% from 6.4%.
Including Chandeleur and Crest Ridge, market share improved to
8.4%. Overall, the registrant's year-to-date U.S. multi-sectional
mix was 55%, compared to the industry's 48% through August.
Excluding Chandeleur and Crest Ridge, the average selling price
for the current year-to-date period was $28,147, compared to
$26,938 last year. Overall, year-to-date average selling price
was $26,450.
Bus shipments during third quarter reached 351 units, an
increase of 26% over last year's 279 units due to improved
municipal sales and new product introductions. Year-to-date
revenues rose 33% on a 28% increase in shipments to 978 units from
765 last year.
Costs and Expenses
Housing segment profits as a percent of sales were 8.0% for
the quarter, up from 7.5% a year ago. Excluding Chandeleur and
Crest Ridge, segment profits rose to 7.8% of sales primarily as a
result of expanded manufacturing capacity and increased production
efficiencies. For the nine months ended September 30, 1995 and
October 1, 1994, housing margins were 7.5% and 7.4%, respectively.
Without Chandeleur and Crest Ridge the year-to-date margin was
7.2% in 1995, decreasing primarily as a result of start-up costs
at a new Indiana facility, lower backlog levels and increased
service costs. Chandeleur and Crest Ridge added $2.7 million to
segment profits for the current quarter and $7.2 million for the
nine months ended September 30, 1995. Segment profits are
calculated as income directly attributable to the segment before
general corporate expenses, interest income, interest expense and
income taxes.
Bus margins improved for the quarter and year-to-date periods
as a result of higher volume and improved manufacturing
efficiencies. Segment profits as a percent of sales were 5.7% and
5.0%, respectively, for the quarter and year-to-date periods ended
September 30, 1995. These amounts compare favorably to 5.0% and
3.7% for last year's respective periods.
For the 13 and 39 week periods, total selling, general and
administrative expenses increased primarily due to overall higher
volume, including the acquisitions. Interest expense increased
due to borrowings to fund the Chandeleur and Crest Ridge
acquisitions and to fund seasonal working capital requirements.
Income Taxes
The income tax provisions for the 13 and 39 weeks ended
September 30, 1995 increased over prior year amounts. See Note 4
of Notes to Consolidated Financial Statements for information
regarding this increase and components of the registrant's tax
provisions. On a fully taxed basis, earnings per share from
continuing operations for the 13 and 39 weeks ended October 1,
1994 would have been $0.42 and $1.10, respectively.
OUTLOOK AND RISK FACTORS
According to the MHI, manufactured housing shipments
increased 12.5% for the first eight months of 1995 and are
expected to increase 7-10% for the year. Although the
registrant's incoming order rate has risen from last year,
unfilled orders for housing are approximately $90 million, the
same as they were a year ago, including Chandeleur and Crest Ridge
for both periods, due to the registrant's increased production
capacity and record high production levels. Unfilled orders are
not necessarily indicative of a long-term trend and are subject to
cancellation at any time without penalty. Order rates can vary
significantly with changes in, among other things, consumer
confidence, regional and national economic changes, interest
rates, financing availability, and, in some cases, the weather.
The registrant's performance goals are to achieve over 20%
compound annual growth in fully taxed earnings per share and a
minimum 30% annual return on equity. These goals are based on the
expected growth in the manufactured housing industry, the
registrant's increased manufacturing capacity, its increased
number of independent dealer locations, continued market share
improvement, and its acquisitions. These goals are also based on
a number of assumptions, many of which are beyond the registrant's
control, including continued growth in both the manufactured
housing industry and the overall general economy, only modest
changes in interest rates and continued availability of municipal
funding for commercial vehicles. There can be no assurance that
these assumptions will prove accurate and actual results may
differ substantially from these estimates.
The registrant is continuing its discussions with the
Environmental Protection Agency concerning alleged environmental
claims for the period 1955-1972. A liability for these alleged
claims was recorded by the registrant in the fourth quarter of
1994 and does not include any amount for potential insurance
recoveries. Final settlement is not expected to have a material
adverse effect on the registrant's consolidated financial
position.
FINANCIAL CONDITION
During the 39 weeks ended September 30, 1995, cash provided
by continuing operating activities was $24 million. The
registrant's cash and cash equivalents decreased to $9.3 million,
however, as cash was used for the acquisitions of Chandeleur and
Crest Ridge and additions to property and equipment, including
planned expenditures under a capital improvement program. The
registrant plans capital expenditures in excess of $8 million in
1995, down from $10.6 million in 1994. Cash totaling $1.9 million
was also used for the stock repurchase program. Subsequent to
quarter end, the registrant used $3.2 million to purchase New
Horizon Manufactured Homes, Ltd. (see Note 9). For additional
information, see the Consolidated Statements of Cash Flows for the
39 weeks on page 4 of this Report.
The registrant has a new unsecured line of credit totaling
$70 million with Comerica Bank, Detroit as agent and the First
National Bank of Chicago, including $10 million available to cover
letters of credit. At quarter end $8.1 million was outstanding on
the line of credit, which expires on September 29, 1998. Letters
of credit outstanding at September 30, 1995 totaled $6.6 million,
generally to support insurance obligations and licensing and
service bonding required by various states. The registrant
believes its existing sources of liquidity are adequate for
operating requirements, common stock repurchases, and planned
capital expenditures for the current fiscal year. Growth
opportunities, through additional acquisitions of related
businesses, and, if prudent, in diversified businesses, continue
to be pursued by the registrant.
PART II. OTHER INFORMATION
Item 5. Other Information.
(a) The Board of Directors on the recommendation of the
Compensation Committee has approved a new five-year
compensation program, effective August 31, 1995, with
Walter R. Young, Jr., Chairman, President and Chief
Executive Officer. Among other things, the compensation
program is designed to retain the continued services of
Mr. Young and to support the continuing creation of
shareholder value and attainment of strategic financial
objectives. Options for 200,000 shares were granted at
fair market value as of August 31, 1995 pursuant to
the 1995 Stock Option and Incentive Plan (1995 Plan).
Options for 550,000 shares, also priced at fair market
value as of August 31, 1995 and pursuant to the 1995
Plan, were granted subject to shareholder approval of
amendments to the 1995 Plan at the 1996 Annual Meeting
of Shareholders. In addition, Mr. Young was awarded
50,000 performance shares pursuant to the 1995 Plan, also
subject to shareholder approval of amendments to the 1995
Plan. The options vest on the fifth anniversary of the
grant date provided that Mr. Young remains employed by the
registrant during such period and has kept 250,000
previously-owned shares on deposit with the registrant.
Mr. Young retains full ownership and voting rights as to
these deposited shares. One-half of the options (375,000) vest
earlier than the five-year term (in three or four years)
if certain stock price appreciation is attained. The
options expire at the earlier of eight years after grant
or three years after vesting. The vesting for the
performance shares is generally the same as for the
options except that there is no acceleration provision.
In addition, the registrant's earnings per share for
1996-1999 must grow at a rate at least equal to the
median of the registrant's key peers as defined for
proxy purposes. Other employment terms remain
essentially the same as in Mr. Young's April 27, 1990
employment agreement except that a two-year noncompetition
provision has been added.
Item 6. Exhibits and Reports on Form 8-K.
(a) None.
(b) No reports on Form 8-K were filed by the registrant during
the quarter ended September 30, 1995.
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.
CHAMPION ENTERPRISES, INC.
By: /S/ A. JACQUELINE DOUT
---------------------------
A. Jacqueline Dout
Executive Vice President
and Chief Financial Officer
(Principal Financial Officer)
And: /S/ RICHARD HEVELHORST
---------------------------
Richard Hevelhorst
Controller (Principal
Accounting Officer)
Dated: November 9, 1995