UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 F O R M 10-Q (X) Quarterly Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 For the Quarterly Period Ended March 31, 1998 ( ) 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 1-13662 BOISE CASCADE OFFICE PRODUCTS CORPORATION State of Incorporation IRS Employer Identification No. Delaware 82-0477390 800 West Bryn Mawr Avenue Itasca, Illinois 60143 (630) 773 - 5000 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. Shares Outstanding Class as of April 30, 1998 Common Stock, $.01 par value 65,690,158 PART I - FINANCIAL INFORMATION Item 1. Financial Statements BOISE CASCADE OFFICE PRODUCTS CORPORATION AND SUBSIDIARIES STATEMENTS OF INCOME (expressed in thousands, except share information) (unaudited) Three Months Ended March 31 1998 1997 Net sales $ 759,808 $ 597,871 Cost of sales, including purchases from Boise Cascade Corporation of $67,243 and $48,041 564,230 446,999 __________ __________ Gross profit 195,578 150,872 __________ __________ Selling and warehouse operating expense 143,690 111,173 Corporate general and administrative expense, including amounts paid to Boise Cascade Corporation of $643 and $643 12,437 9,210 Goodwill amortization 3,170 2,194 __________ __________ 159,297 122,577 __________ __________ Income from operations 36,281 28,295 __________ __________ Interest expense 6,465 3,075 Other income, net 423 49 __________ _________ Income before income taxes 30,239 25,269 Income tax expense 12,650 10,360 __________ __________ Net income $ 17,589 $ 14,909 Earnings per share-basic $ .27 $ .24 Earnings per share-diluted $ .27 $ .23 The accompanying notes are an integral part of these Financial Statements. BOISE CASCADE OFFICE PRODUCTS CORPORATION AND SUBSIDIARIES BALANCE SHEETS (expressed in thousands) (unaudited) March 31 December 31 ASSETS 1998 1997 1997 Current Cash and cash equivalents $ 53,151 $ 22,762 $ 28,755 Receivables, less allowances of $7,707, $3,900, and $7,591 382,826 292,997 357,321 Inventories 203,733 164,748 197,990 Deferred income tax benefits 18,404 13,963 14,223 Other 20,816 19,856 23,808 ___________ __________ ___________ 678,930 514,326 622,097 ___________ __________ ___________ Property Land 27,677 13,488 28,913 Buildings and improvements 128,708 75,081 127,430 Furniture and equipment 195,735 150,407 175,778 Accumulated depreciation (140,054) (96,492) (129,951) ___________ __________ ___________ 212,066 142,484 202,170 ___________ __________ ___________ Goodwill, net of amortization of $27,575, $15,349, and $24,019 439,809 264,499 438,830 Other assets 33,117 21,798 28,391 ___________ __________ ___________ Total assets $1,363,922 $ 943,107 $1,291,488 The accompanying notes are an integral part of these Financial Statements. BOISE CASCADE OFFICE PRODUCTS CORPORATION AND SUBSIDIARIES BALANCE SHEETS (expressed in thousands, except share information) (unaudited) March 31 December 31 LIABILITIES AND SHAREHOLDERS' EQUITY 1998 1997 1997 Current Notes payable $ 73,800 $ 25,600 $ 23,300 Current portion of long-term debt 2,578 135 2,917 Accounts payable Trade and other 272,972 188,014 238,773 Boise Cascade Corporation 28,710 26,963 42,097 ___________ __________ ___________ 301,682 214,977 280,870 ___________ __________ ___________ Accrued liabilities Compensation and benefits 26,053 21,475 30,717 Income taxes payable 15,679 19,928 3,370 Taxes, other than income 20,161 8,698 18,718 Other 54,950 32,218 30,848 ___________ __________ ___________ 116,843 82,319 83,653 ___________ __________ ___________ 494,903 323,031 390,740 ___________ __________ ___________ Other Deferred income taxes - 195 - Long-term debt, less current portion 307,224 170,016 357,595 Other 35,827 28,467 37,518 ___________ __________ ___________ 343,051 198,678 395,113 ___________ __________ ___________ Shareholders' equity Common stock, $.01 par value, 200,000,000 shares authorized; 65,656,158, 62,904,575, and 65,588,258 shares issued and outstanding at each period 657 629 656 Additional paid-in capital 357,661 307,308 356,599 Retained earnings 172,968 113,436 155,412 Accumulated other comprehensive income (5,318) 25 (7,032) ___________ __________ ___________ Total shareholders' equity 525,968 421,398 505,635 ___________ __________ ___________ Total liabilities and shareholders' equity $1,363,922 $ 943,107 $1,291,488 The accompanying notes are an integral part of these Financial Statements. BOISE CASCADE OFFICE PRODUCTS CORPORATION AND SUBSIDIARIES STATEMENTS OF CASH FLOWS (expressed in thousands) (unaudited) Three Months Ended March 31 1998 1997 Cash provided by (used for) operations Net income $ 17,589 $ 14,909 Items in income not using (providing) cash Depreciation and amortization 13,756 8,820 Deferred income taxes (4,499) (2,121) Receivables (23,966) (5,122) Inventories (4,554) 9,320 Accounts payable and accrued liabilities 36,397 (11,605) Current and deferred income taxes 12,679 11,539 Other, net 6,177 (5,399) __________ __________ Cash provided by operations 53,579 20,341 __________ __________ Cash provided by (used for) investment Expenditures for property and equipment (17,576) (15,697) Acquisitions (4,042) (14,912) Other, net (8,070) 1,128 __________ __________ Cash used for investment (29,688) (29,481) __________ __________ Cash provided by (used for) financing Long-term debt (50,266) 30,000 Notes payable 50,500 (11,100) Other, net 271 240 __________ __________ Cash provided by financing 505 19,140 __________ __________ Increase in cash and cash equivalents 24,396 10,000 Balance at beginning of the period 28,755 12,762 __________ __________ Balance at March 31 $ 53,151 $ 22,762 The accompanying notes are an integral part of these Financial Statements. BOISE CASCADE OFFICE PRODUCTS CORPORATION AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS (unaudited) (1) ORGANIZATION AND BASIS OF PRESENTATION. Boise Cascade Office Products Corporation (together with its subsidiaries, "the Company" or "we"), headquartered in Itasca, Illinois, is a distributor of products for the office through its contract stationer and direct marketing channels. At March 31, 1998, Boise Cascade Corporation owned 81.3% of our outstanding common stock. The quarterly financial statements of the Company and its subsidiaries have not been audited by independent public accountants, but in the opinion of management, all adjustments necessary to present fairly the results for the periods have been included. Except as may be disclosed in the notes to the Financial Statements, the adjustments made were of a normal, recurring nature. Quarterly results are not necessarily indicative of results that may be expected for the year. We have prepared the statements pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. These quarterly financial statements should be read together with the statements and the accompanying notes included in our 1997 Annual Report. (2) EARNINGS PER SHARE. Basic earnings per share of $.27 and $.24 for the three months ended March 31, 1998 and 1997, were computed by dividing net income by the weighted average number of shares of common stock outstanding for the periods. Diluted earnings per share of $.27 and $.23 for the three months ended March 31, 1998 and 1997, include the weighted average impact of stock options assumed exercised using the treasury method. In 1997, we adopted Statement of Financial Accounting Standards No. 128 (SFAS 128), "Earnings Per Share." Earnings per share for 1997 have been restated to reflect SFAS 128. (3) COMPREHENSIVE INCOME (LOSS). Comprehensive income (loss) for the periods include the following: Three Months Ended March 31 1998 1997 (expressed in thousands) Net income $ 17,589 $ 14,909 Other comprehensive income (loss) Cumulative foreign currency translation adjustment, net of income taxes 1,714 (1,471) _________ _________ Comprehensive income, net of income taxes $ 19,303 $ 13,438 Accumulated other comprehensive income (loss) for each period was as follows: March 31 December 31 1998 1997 1997 (expressed in thousands) Balance at beginning of period Minimum pension liability adjustment, net of income taxes $ (417) $ (24) $ (24) Cumulative foreign currency translation adjustment, net of income taxes (6,615) 1,520 1,520 Changes within periods Minimum pension liability adjustment, net of income taxes - - (393) Cumulative foreign currency translation adjustment, net of income taxes 1,714 (1,471) (8,135) _________ _________ _________ Balance at end of period $ (5,318) $ 25 $ (7,032) (4) DEFERRED SOFTWARE COSTS. We defer purchased and internally developed software and related installation costs for computer systems that are used in our business. Deferral of costs begins when technological feasibility of the project has been established and it is determined that the software will benefit future years. These costs are amortized on the straight-line method over a maximum of five years or the useful life of the product, whichever is less. If the useful life of the product is shortened, the amortization period is adjusted. "Other assets" in the Balance Sheets includes deferred software costs of $20.1 million, $10.8 million, and $17.5 million at March 31, 1998 and 1997 and December 31, 1997. (5) DEBT. On June 26, 1997, we entered into a $450 million revolving credit agreement with a group of banks that expires on June 29, 2001, and provides for variable rates of interest based on customary indices. It contains customary restrictive financial and other covenants, including a negative pledge and covenants specifying a minimum fixed charge coverage ratio and a maximum leverage ratio. This agreement replaced our $350 million revolving credit agreement. We may, subject to the covenants contained in the credit agreement and to market conditions, refinance existing debt or raise additional funds through the agreement and through other external debt or equity financings in the future. At March 31, 1998, borrowing under the revolving credit agreement was $290 million. In addition to the amount outstanding under the revolving credit agreement, we had $73.8 million and $25.6 million of short-term notes payable at March 31, 1998 and 1997. The maximum amount of short-term notes payable during the three months ended March 31, 1998 and 1997, was $104.6 million and $59.3 million. The average amount of short-term notes payable during the three months ended March 31, 1998 and 1997, were $63.7 million and $33.2 million. The weighted average interest rates for these borrowings was 5.9% and 5.6% for the periods. We filed a registration statement with the Securities and Exchange Commission to register $300 million of shelf capacity for debt securities. The effective date of the filing was April 22, 1998. On May 12, 1998, we issued $150.0 million of 7.05% Notes under this registration statement. The Notes are due May 15, 2005. Proceeds from the issuance will be used to repay borrowings under our revolving credit agreement. We have $150.0 million of shelf capacity remaining under this registration statement. In December 1997, we entered into agreements to hedge against a rise in Treasury rates. We entered into the transactions in anticipation of our issuance of these debt securities. The hedge agreements had a notional amount of $70 million. The settlement rate, based on the yield on 10-year U.S. Treasury bonds, was less than the agreed upon initial rate, and we made a cash payment of $0.6 million. The amount paid will be recognized as an increase in interest expense over the life of the debt securities issued. Cash payments for interest were $6.7 million and $3.0 million for the three months ended March 31, 1998 and 1997. (6) TAXES. The estimated tax provision rate for the first three months of 1998 was 42.0%, compared with a tax provision rate of 41.0% for the same period in the prior year. The increase is primarily due to increased nondeductible goodwill and foreign income, taxed at a higher rate. For the three months ended March 31, 1998 and 1997, we paid income taxes, net of refunds received, of $3.1 million and $0.9 million. (7) ACQUISITIONS. During the first three months of 1998 we completed two acquisitions, and during the first three months of 1997 we completed three acquisitions, all of which were accounted for under the purchase method of accounting. Accordingly, the purchase prices were allocated to the assets acquired and liabilities assumed based upon their estimated fair values. The initial purchase price allocations may be adjusted within one year of the date of purchase for changes in estimates of the fair values of assets and liabilities. Such adjustments are not expected to be significant to results of operations or the financial position of the Company. The excess of the purchase price over the estimated fair value of the net assets acquired was recorded as goodwill and is being amortized over 40 years. The results of operations of the acquired businesses are included in our operations subsequent to the dates of acquisition. On January 12, 1998, we acquired the direct marketing business of Fidelity Direct, based in Minneapolis, Minnesota. On February 28, 1998, we acquired the direct marketing business of Sistemas Kalamazoo, based in Madrid, Spain. These transactions were completed for cash of $4.0 million, debt assumed of $0.2 million, and the recording of $3.8 million of acquisition liabilities. On January 31 and February 28, 1997, we acquired contract stationer businesses in Montana and Florida. Also in January 1997, we completed a joint venture with Otto Versand to direct market office products in Europe. These transactions, including the joint venture, were completed for cash of $14.9 million, $2.9 million of our common stock, and the recording of $1.0 million of acquisition liabilities. Unaudited pro forma results of operations reflecting the acquisitions would have been as follows. If the 1998 acquisitions had occurred January 1, 1998, sales for the first three months of 1998 would have increased to $760.6 million, net income would have remained $17.6 million, and basic earnings per share would have remained $.27. If the 1998 and 1997 acquisitions had occurred January 1, 1997, sales for the first three months of 1997 would have increased to $605.9 million, net income would have remained $14.9 million, and basic earnings per share would have remained $.24. This unaudited pro forma financial information does not necessarily represent the actual results of operations that would have occurred if the acquisitions had taken place on the dates assumed. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Three Months Ended March 31, 1998, Compared with Three Months Ended March 31, 1997 Results of Operations Net sales in the first quarter of 1998 increased 27% to $759.8 million, compared with $597.9 million in the first quarter of 1997. The growth in sales resulted from a combination of acquisitions and same-location sales growth. Same-location sales increased 13% in the first quarter of 1998, compared with sales in the first quarter of 1997. Cost of sales, which includes the cost of merchandise sold and delivery and occupancy costs, increased to $564.2 million in the first quarter of 1998, which was 74.3% of net sales. This compares with $447.0 million reported in the same period of the prior year, which represented 74.8% of net sales. Gross profit as a percentage of net sales was 25.7% and 25.2% for the first quarters of 1998 and 1997. The increase in the first quarter of 1998 was primarily due to increases in our U.S. contract stationer and direct marketing gross margins, offset slightly by lower margins in our other businesses. Operating expense was 21.0% of net sales in the first quarter of 1998, compared with 20.5% in the first quarter of 1997. Within the operating expense category, selling and warehouse operating expense was 18.9% of net sales in the first quarter of 1998, compared with 18.6% in 1997. The increase in the first quarter of 1998 was due in part to our direct marketing business, which has both higher gross margins and higher operating expenses. Direct marketing acquisitions made in 1997 increased our cost average compared to the prior year. Corporate general and administrative expense was 1.6% of net sales in the first quarter of 1998, compared with 1.5% in 1997. Goodwill amortization increased to $3.2 million in the first quarter of 1998, compared with $2.2 million in the first quarter of 1997. The increase in goodwill amortization was the result of recording goodwill arising from our acquisitions. Income from operations in the first quarter of 1998 increased to $36.3 million, or 4.8% of net sales, compared to our first quarter 1997 operating income of $28.3 million, or 4.7% of net sales. Interest expense was $6.5 million in the first quarter of 1998, compared with $3.1 million in the first quarter of 1997. The increase in interest expense resulted from debt incurred in conjunction with our acquisition and capital spending programs. Net income in the first quarter of 1998 increased to $17.6 million, or 2.3% of net sales, compared with $14.9 million, or 2.5% of net sales in the same period of the prior year. Liquidity and Capital Resources Our principal requirements for cash have been to make acquisitions, fund technology development and working capital needs, upgrade and expand our facilities at existing locations, and open new distribution centers. The execution of our strategy for growth, including acquisitions and the relocation of several existing distribution centers into new and larger facilities, is expected to require capital outlays over the next several years. To finance our capital requirements, we expect to rely upon funds from a combination of sources. In addition to cash flow from operations, we have a $450 million revolving credit agreement that expires in 2001 and provides for variable rates of interest based on customary indices. The credit agreement is available for acquisitions and general corporate purposes. It contains customary restrictive financial and other covenants, including a negative pledge and covenants specifying a minimum fixed charge coverage ratio and a maximum leverage ratio. At March 31, 1998, $290 million was outstanding under this agreement. We may, subject to the covenants contained in the credit agreement and to market conditions, refinance existing debt or raise additional funds through the agreement and through other external debt or equity financings in the future. In addition to the amount outstanding under the revolving credit agreement, we had short-term notes payable of $73.8 million at March 31, 1998. The maximum amount of short-term notes payable during the three months ended March 31, 1998, was $104.6 million. The average amount of short-term notes payable during the three months ended March 31, 1998, was $63.7 million. The weighted average interest rate for these borrowings was 5.9%. We filed a registration statement with the Securities and Exchange Commission to register $300 million of shelf capacity for debt securities. The effective date of the filing was April 22, 1998. On May 12, 1998, we issued $150.0 million of 7.05% Notes under this registration statement. The Notes are due May 15, 2005. Proceeds from the issuance will be used to repay borrowings under our revolving credit agreement. We have $150.0 million of shelf capacity remaining under this registration statement. In June 1996, we filed a registration statement with the Securities and Exchange Commission for 4.4 million shares of common stock to be offered from time to time in connection with future acquisitions. As of March 31, 1998, 3.5 million shares remained unissued under this registration statement. On September 25, 1997, we issued 2.25 million shares of common stock at $21.55 per share to Boise Cascade Corporation for total proceeds of $48.5 million. At March 31, 1998, Boise Cascade Corporation owned 81.3% of our outstanding common stock. Net cash provided by operations in the first three months of 1998 was $53.6 million. This was the result of $26.8 million of net income, depreciation and amortization, and other noncash items, and a $26.7 million decrease in working capital. Net cash used for investment in the first three months of 1998 was $29.7 million, which included $17.6 million of expenditures for property and equipment, and $4.0 million for acquisitions. Net cash provided by financing was $0.5 million for the first three months of 1998. Net cash provided by operations in the first three months of 1997 was $20.3 million. This was primarily the result of $21.6 million of net income, depreciation and amortization, and other noncash items, offset by a $1.3 million increase in working capital. Net cash used for investment in the first three months of 1997 was $29.5 million, which included $15.7 million of expenditures for property and equipment, and $14.9 million for acquisitions. Net cash provided by financing was $19.1 million for the first three months of 1997, resulting primarily from borrowings we made to fund acquisitions. The majority of our 1998 and 1997 acquisitions have been completed for cash, resulting in higher outstanding balances under our credit agreement and short-term borrowing capacity. The increase in borrowings has caused interest expense to increase for the first three months of 1998 compared to the same period of 1997. New Accounting Standards In 1997, the Financial Accounting Standards Board issued SFAS No. 131, "Disclosures About Segments of an Enterprise and Related Information." This Statement establishes standards for the way that public business enterprises report information about operating segments in annual financial statements and requires that those enterprises report selected information about operating segments in interim financial reports issued to shareholders. We are still evaluating what impact, if any, this Statement will have on us. We will adopt this Statement at year- end 1998. Adoption of this Statement will have no impact on net income. In March 1998, the American Institute of Certified Public Accountants (AICPA), issued Statement of Position 98-1 (SOP 98- 1), "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use." This SOP is effective for financial statements for fiscal years beginning after December 31, 1998, with earlier application encouraged. We currently account for software costs generally in accordance with this SOP. Year 2000 Computer Issue Many computer systems in use today were designed and developed using two digits, rather than four, to specify the year. As a result, such systems will recognize the year 2000 as "00." This could cause many computer applications to fail completely or to create erroneous results unless corrective measures are taken. We utilize software and related computer technologies that will be affected by this issue. We are currently implementing, or planning to implement, several computer system replacements or upgrades before the year 2000, all of which will be year 2000 compliant. Most of the costs associated with these replacements and upgrades have been or will be deferred. (See Note 4 in "Notes to Quarterly Financial Statements.") We are evaluating what actions will be necessary to make our remaining computer systems year 2000 compliant. The expense associated with these actions is not expected to be material to the Company. We have discussed this issue with our significant suppliers and large customers to determine the extent to which we could be affected if their systems are not year 2000 compliant. While there can be no guarantee that systems of other companies will be corrected on a timely basis, we do not expect any material adverse effects to the Company. Business Outlook We expect our cross-selling efforts in furniture, computer- related consumables, promotional products, and office papers to result in additional sales to our existing customers. We also expect to grow sales by developing business with new customers. The pace of our revenue growth will partially depend on the success of these initiatives. It will also depend, in part, on our plans to make further acquisitions in the U.S. and internationally. Our level of future acquisition activity will reflect the extent of economically acceptable opportunities available to us. Our gross margins and operating expense ratios vary among our product categories, distribution channels, and geographic locations. As a result, we expect fluctuations in these ratios as our sales mix evolves over time. Office papers and converted paper products represent a significant portion of our sales. It is unclear to what extent or when prices might significantly rise or fall and what favorable or adverse impact those changes might have on our future financial results. Risk Factors Associated With Forward Looking Statements The Management's Discussion and Analysis of Financial Condition and Results of Operations includes "forward looking statements" which involve uncertainties and risks. There can be no assurance that actual results will not differ from the Company's expectations. Factors which could cause materially different results include, among others, continued same-location sales growth; the timing and amount of paper price recovery; the changing mix of products sold to our customers; the pace and success of our acquisition program; the success of cost structure improvements; the success of new product line introductions; the uncertainties of expansion into international markets, including currency exchange rates, legal and regulatory requirements, and other factors; and competitive and general economic conditions. Item 3. Quantitative and Qualitative Disclosures About Market Risks Changes in interest rates and currency rates expose us to financial market risks. To date, these risks have not been significant and are not expected to be so in the near term. Changes in our debt and our continued international expansion could increase these risks. To manage volatility relating to these risks, we may enter into various derivative transactions such as interest rate swaps, rate hedge agreements, and forward exchange contracts. We do not use derivative financial instruments for trading purposes. In December 1997, we entered into agreements to hedge against a rise in Treasury rates. We entered into the transactions in anticipation of our issuance of debt securities in the first half of 1998. The hedge agreements had a notional amount of $70 million and were settled with our issuance of debt securities on May 12, 1998. The settlement rate, based on the yield on 10-year U.S. Treasury bonds, was less than the agreed upon initial rate, and we made a cash payment of $0.6 million. The amount paid will be recognized as an increase in interest expense over the life of the debt securities issued. Our operations in Australia, Canada, France, Germany, Spain, and the United Kingdom are denominated in currencies other than U.S. dollars. Each of our operations conducts substantially all of its business in its local currency with minimal cross-border product movement. As a result, these operations are not subject to material operational risks associated with fluctuations in exchange rates. Furthermore, our results of operations were not materially impacted by the translation of our other operations' currencies into U.S. dollars. Because we intend to expand the size and scope of our international operations, this exposure to fluctuations in exchange rates may increase. Accordingly, no assurance can be given that our future results of operations will not be adversely affected by fluctuations in foreign currency exchange rates. Although we currently are not engaged in any foreign currency hedging activities, we may consider doing so in the future. Such future hedges would be intended to minimize the effects of foreign exchange rate fluctuations on our investment and would not be done for speculative purposes. PART II - OTHER INFORMATION Item 1. Legal Proceedings The Company is not currently involved in any legal or administrative proceedings that it believes could have, either individually or in the aggregate, a material adverse effect on its business or financial condition. Item 2. Changes in Securities Not applicable. Item 3. Defaults Upon Senior Securities Not applicable. Item 4. Submission of Matters to a Vote of Security Holders Not applicable. Item 5. Other Information Not applicable. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits. Required exhibits are listed in the Index to Exhibits and are incorporated by reference. (b) No Form 8-K's were filed during the quarter covered by this report. 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. BOISE CASCADE OFFICE PRODUCTS CORPORATION As Duly Authorized Officer and Chief Accounting Officer: /s/Darrell R. Elfeldt Darrell R. Elfeldt Vice President and Controller Date: May 12, 1998 BOISE CASCADE OFFICE PRODUCTS CORPORATION INDEX TO EXHIBITS Filed With the Quarterly Report on Form 10-Q for the Quarter Ended March 31, 1998 Number Description Page 10 Key Executive Stock Option Plan and Form of Agreement, as amended through April 2, 1998 11 Computation of Per Share Earnings 27 Financial Data Schedule