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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1997
Commission File No. 1-12983
GENERAL CABLE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 06-1398235
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
4 Tesseneer Drive
Highland Heights, KY 41076
(Address of principal executive offices)
(606) 572-8000
Registrant's telephone number, including area code
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.
Class Oustanding at August 4, 1997
----- ----------------------------
Commmon Stock, $.01 Par Value 24,518,597
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1
GENERAL CABLE CORPORATION
INDEX TO QUARTERLY REPORT
ON FORM 10-Q
PART I - FINANCIAL INFORMATION Page
Item 1. Consolidated Financial Statements
Statements of Income -
For the three and six months ended
June 30, 1997 and 1996 3
Balance Sheets -
June 30, 1997 and December 31, 1996 4
Statements of Cash Flows -
For the six months ended June 30, 1997
and 1996 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 15
SIGNATURE 16
2
GENERAL CABLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN MILLIONS, EXCEPT PER SHARE DATA)
(UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
--------------------------- ------------------
1997 1996 1997 1996
---- ---- ---- -----
Net sales $292.2 $270.7 $ 543.2 $528.7
Cost of sales 237.2 223.1 439.4 445.1
------ ------- ------- -------
Gross profit 55.0 47.6 103.8 83.6
Selling, general and
administrative expenses 30.4 27.4 60.0 54.5
------ ------- ------- -------
Operating income 24.6 20.2 43.8 29.1
------ ------- ------- -------
Interest income (expense):
Interest expense (4.7) (5.3) (9.8) (10.7)
Interest income .1 .1 .3 .3
------ ------- ------- -------
(4.6) (5.2) (9.5) (10.4)
------ ------- ------- -------
Earnings before income taxes 20.0 15.0 34.3 18.7
Income tax provision 8.0 5.0 13.7 6.2
------ ------- ------- -------
Net income $ 12.0 $ 10.0 $ 20.6 $ 12.5
====== ======= ======= =======
Earnings per common share $ .49 $ .41 $ .85 $ .51
====== ======= ======= ========
Weighted average common shares 24.4 24.3 24.3 24.3
====== ======= ======= =======
See accompanying Notes to Consolidated Financial Statements.
3
GENERAL CABLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN MILLIONS, EXCEPT SHARE DATA)
ASSETS June 30, December 31,
1997 1996
---- ----
(unaudited)
Current Assets:
Cash $ 10.5 $ 1.9
Receivables, net 175.3 135.5
Inventories 169.8 161.0
Deferred income taxes 23.3 23.7
Prepaid expenses and other 9.6 13.6
------- -------
Total current assets 388.5 335.7
Property, plant and equipment 133.3 128.8
Deferred income taxes 30.8 31.8
Other non-current assets 17.2 17.3
------- -------
Total assets $569.8 $513.6
====== ======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 80.7 $ 69.3
Accrued liabilities 60.7 58.8
Short-term debt - 2.0
------- -------
Total current liabilities 141.4 130.1
Long-term debt 272.0 205.1
Other liabilities 65.6 71.0
------- ------
Total liabilities 479.0 406.2
------ ------
Shareholders' Equity:
Common stock, $0.01 par value:
Authorized shares - 75,000,000
Issued and outstanding shares - 24,518,597
and 24,250,000, respectively .2 .2
Additional paid-in capital 83.6 94.7
Retained earnings 7.0 12.5
-------- -------
Total shareholders' equity 90.8 107.4
------- -------
Total liabilities and shareholders' equity $569.8 $513.6
====== ======
See accompanying Notes to Consolidated Financial Statements.
4
GENERAL CABLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN MILLIONS)
(UNAUDITED)
Six Months Ended June 30,
------------------------
1997 1996
---- ----
Cash flows of operating activities:
Net income $ 20.6 $ 12.5
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 6.7 5.8
Deferred income taxes 1.4 2.8
Changes in operating assets and liabilities:
Increase in receivables (39.8) (15.5)
(Increase)decrease in inventories (8.8) 16.7
(Increase)decrease in other assets 1.0 (2.0)
Increase (decrease) in accounts payable,
accrued and other liabilities 14.9 (15.3)
----- -------
Net cash flows of operating activities (4.0) 5.0
----- -------
Cash flows of investing activities:
Proceeds from property sold 4.6 -
Capital expenditures (12.3) (11.5)
Other, net (1.9) .2
----- -------
Net cash flows of investing activities (9.6) (11.3)
----- -------
Cash flows of financing activities:
Dividends paid (42.6) -
Proceeds from issuance of other debt 263.0 -
Repayment of related party notes payable (195.8) -
Repayment of short-term debt (2.0) -
Repayment of other long-term debt (.4) (.4)
-------- -------
Net cash flows of financing activities 22.2 (.4)
-------- -------
Increase(decrease) in cash 8.6 (6.7)
Cash - beginning of period 1.9 13.7
------- ------
Cash - end of period $ 10.5 $ 7.0
====== ======
SUPPLEMENTAL INFORMATION
Income taxes paid (refunded) $ 9.2 $ (2.6)
====== =======
Interest paid $ 8.3 $10.4
====== =======
NONCASH ACTIVITIES
Issuance of Restricted Stock $ 5.6 $ -
====== =====
See accompanying Notes to Consolidated Financial Statements.
5
GENERAL CABLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. INITIAL PUBLIC OFFERING
On May 20, 1997, Wassall Netherlands Cable B.V. (the "Selling Stockholder"), a
subsidiary of Wassall PLC ("Wassall") completed an initial public offering of
approximately 19,435,000 shares of General Cable common stock at a price of
$21.00 per share. This included 2,535,000 shares purchased under the U.S.
Underwriters' over-allotment option which was exercised in full on May 21, 1997.
General Cable did not receive any proceeds from the sale of the shares of common
stock.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the
accounts of General Cable Corporation and its wholly owned subsidiaries. All
transactions and balances among the consolidated companies have been eliminated.
Certain reclassifications have been made to the prior year to conform to the
current year's presentation.
BASIS OF PRESENTATION The accompanying unaudited consolidated financial
statements of General Cable Corporation and Subsidiaries have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete annual
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Results of operations for the three and six months ended June 30,
1997 are not necessarily indicative of results that may be expected for the full
year. These financial statements should be read in conjunction with the audited
financial statements and notes thereto in General Cable's registration statement
on Form S-1 filed with the Securities and Exchange Commission on May 15, 1997.
EARNINGS PER SHARE General Cable is required to implement SFAS No. 128,
"Earnings Per Share", which was issued in February 1997, in the fourth quarter
of 1997. The effect of implementing this new accounting standard on reported
earnings per share is not expected to be material.
NEW STANDARDS In June of 1997, The Financial Accounting Standards Board issued
Statement of Financial Accounting Standard ("SFAS") No. 130, "Reporting
Comprehensive Income" and SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information". General Cable will be required to adopt
these standards during 1998. Adoption of these standards will not impact the
reported results of operations or financial position of General Cable, but may
require additional disclosure.
6
GENERAL CABLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. INVENTORIES
Inventories consisted of the following (in millions):
June 30, December 31,
1997 1996
---- ----
Raw materials $ 20.8 $20.8
Work-in-progress 26.2 28.6
Finished goods 122.8 111.6
------ ------
Total $169.8 $161.0
====== ======
At June 30, 1997 and December 31, 1996, $67.8 million of inventories
were valued using the LIFO method. Approximate replacement cost of inventories
valued using the LIFO method totaled $86.3 million at June 30, 1997 and $76.2
million at December 31, 1996. An actual valuation of inventory under the LIFO
method can be made only at the end of each year based on the inventory levels
and costs at that time. Accordingly, interim LIFO calculations are necessarily
based on management's estimates of expected year-end inventory levels and costs.
Because these are subject to many variables beyond management's control, interim
results are subject to the final year-end LIFO inventory valuation.
7
GENERAL CABLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. LONG-TERM DEBT
In May, 1997, General Cable entered into a new credit facility with
The Chase Manhattan Bank as administrative agent, and a syndicate
of banks. The new credit facility consists of a five-year senior unsecured
revolving credit and competitive advance facility in an aggregate principal
amount of $350.0 million.
Initial borrowings were used in part to repay the notes payable to
Wassall and subsidiaries outstanding at the time of the initial public offering.
At June 30, 1997, $263 million of revolving credit loans were
outstanding, with a weighted average annual interest rate of 6.22%.
Other long-term debt, primarily Industrial Development Revenue Bonds,
of $9.0 million had a weighted average annual interest rate of 5.7%.
8
GENERAL CABLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5. SHAREHOLDERS' EQUITY
Changes in shareholders' equity were as follows (in millions):
Additional
Common Paid-In Retained
Stock Capital Earnings Total
------ ----------- --------- -----
Balance, December 31, 1996 $ .2 $94.7 $ 12.5 $107.4
Net income - - 20.6 20.6
Dividend to Selling Stockholder - (16.7) (25.9) (42.6)
Issuance of Restricted Stock - 5.6 - 5.6
Other - - (.2) (.2)
---- ----- ------ -----
Balance, June 30, 1997 $ .2 $83.6 $ 7.0 $90.8
==== ===== ====== =====
Following consummation of the initial public offering, General Cable
awarded 268,597 shares of Restricted Stock to executive officers and other key
employees. The awards of Restricted Stock were made in settlement of all
obligations under existing long-term incentive arrangements.
6. RELATED PARTY TRANSACTIONS
Prior to the Initial Public Offering, a subsidiary of Wassall charged
General Cable a fee for management services of $0.3 million and $0.9 million for
the three and six month periods ended June 30, 1997 and $0.5 million and $0.9
million for the three and six month periods ended June 30, 1996 which are
included in selling, general and administrative expenses in the Consolidated
Statements of Income.
Wassall owned approximately 19.6% of General Cable's Common Stock at
June 30, 1997 and 100% prior to the initial public offering.
9
GENERAL CABLE CORPORATION AND SUBSIDIARIES
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
General Cable is a leader in the development, design, manufacture,
marketing and distribution of copper and optical fiber wire and cable products
for the communications and electrical markets. Communications wire and cable
transmits low voltage signals for voice, data, video and control applications.
Electrical wire and cable conducts electrical current for power and control
applications. General Cable believes that its principal competitive strengths
include its breadth of product line; brand recognition; distribution and
logistics; customer relationships, sales and service; and improved operating
efficiency.
This quarterly report contains various forward-looking statements and
information that are based on management's belief as well as assumptions and
information currently available to management. These statements are subject to
various risks and uncertainties, many of which are outside the control of
General Cable, including competition in the markets and market demand for
General Cable's products, changing raw material prices, economic conditions
affecting particular groups of General Cable's customers, the ability to achieve
increased productivity and other specific factors discussed in the Company's
Prospectus included in its registration statement on Form S-1 filed on
August 6, 1997, and other Securities and Exchange Commission
filings. The information contained in this report represents management's best
judgment as of the date hereof based on information currently available.
However, General Cable does not intend to update this information to reflect
developments or information obtained after the date of this report.
General Cable's reported net sales are directly influenced by the price of
copper. The cost of copper has been subject to considerable volatility, with the
copper cathode daily selling price on the COMEX averaging $1.16 per pound during
the second quarter of 1996, $1.17 per pound for the first six months of 1996,
$1.14 per pound for the second quarter of 1997 and $1.13 per pound for the first
six months of 1997. However, as a result of a number of practices intended to
match copper purchases with sales, General Cable's profitability has generally
not been significantly affected by changes in copper prices. General Cable
generally passes changes in copper prices along to its customers, although there
are timing delays of varying lengths depending upon the type of product,
competitive conditions and particular customer arrangements. General Cable does
not engage in speculative metals trading or other speculative activities, nor
does it engage in activities to hedge the underlying value of its copper
inventory.
General Cable generally experiences certain seasonal trends in sales and
cash flow. Relatively significant amounts of cash are generally required during
the first and second quarters of the year to build inventories in anticipation
of higher demand during the spring and summer months, when construction activity
increases. In general, receivables related to higher sales activity during the
spring and summer months are collected during the third and fourth quarters of
the year.
10
GENERAL CABLE CORPORATION AND SUBSIDIARIES
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1997 COMPARED WITH THREE MONTHS ENDED JUNE 30, 1996
Net sales for the three months ended June 30, 1997 increased $21.5
million, or 8%, to $292.2 million from net sales of $270.7 million for the same
period in 1996. The increase reflects an increase of $7.3 million, or 7%, in the
net sales of the Communications Group and an increase of $14.2 million, or 9%,
in the net sales of the Electrical Group. Such amounts reflect at $0.02 decrease
in the weighted average monthly COMEX price per pound of copper in the three
months ended June 30, 1997 compared to the same period in 1996 and other factors
as discussed below. The increase in Communications Group net sales is primarily
attributable to substantially higher net sales volume of datacom products,
partially offset by selling price weakness in high speed data cables. The growth
in Electrical Group net sales was primarily due to more favorable building wire
pricing and increased net sales volume of building wire and portable cord in the
second quarter of 1997 compared to the same period in 1996. Electrical Group net
sales also rose substantially in Canada. Net sales to General Cable's top 20
customers for the three months ended June 30, 1997 increased 15% from the same
period in 1996.
Gross profit increased $7.4 million, or 16%, to $55.0 million in the
second quarter of 1997 from $47.6 million in the second quarter of 1996. General
Cable's gross margin percentage increased to 18.8% in the second quarter of 1997
from 17.6% in the second quarter of 1996. The improvement in 1997 was primarily
attributable to manufacturing cost reductions and improved building wire
pricing, partially offset by a decrease in pricing for high speed data cables.
The reduction in manufacturing costs in the second quarter of 1997
compared to the same period in 1996 primarily reflected process improvements to
reduce material costs, improved material usage, and capital investment to
improve productivity and throughput.
Selling, general and administrative expenses increased $3.0 million, or
11%, to $30.4 million in the second quarter of 1997 from $27.4 million in the
second quarter of 1996. Selling, general and administrative expenses as a
percentage of sales were 10.4% in the second quarter of 1997, compared to 10.1%
in the second quarter of 1996. The increase primarily reflected higher
transportation costs, increased advertising and increased salaries for
additional staffing to support sales growth.
Net interest expense was $4.6 million in the second quarter of 1997
compared to $5.2 million in the second quarter of 1996. The reduction reflects
the impact of refinancing related party debt in May 1997 with a borrowing
under a new credit facility at a lower effective interest rate.
The effective income tax rate for the second quarter of 1997 was 40%
compared to approximately 33% for the second quarter of 1996. The lower 1996
effective tax rate reflected the impact of certain tax return reconciliation
adjustments.
11
GENERAL CABLE CORPORATION AND SUBSIDIARIES
SIX MONTHS ENDED JUNE 30, 1997 COMPARED WITH SIX MONTHS ENDED JUNE 30, 1996
Net sales for the six months ended June 30, 1997 increased $14.5 million,
or 3%, to $543.2 million from net sales of $528.7 million for the same period in
1996. The increase reflects an increase of $15.6 million, or 5%, in the net
sales of the Electrical Group and a decrease of $1.1 million, or 1%, in the net
sales of the Communications Group. Such amounts reflect a $0.04 decrease in the
weighted average monthly COMEX price per pound of copper in the first six months
of 1997 compared to the first six months of 1996 and other factors as discussed
in the following paragraph.
After adjusting the net sales for the first six months of 1996 to reflect
the $0.04 lower weighted average monthly COMEX price per pound of copper sold in
the first six months of 1997, net sales were $21.5 million, or 4%, higher than
the first six months of 1996. The increase in copper-adjusted net sales
reflected a 6% increase in the copper-adjusted net sales of the Electrical Group
and a 1% increase in the copper-adjusted net sales of the Communications Group.
The growth in Electrical Group net sales was primarily due to more favorable
building wire pricing and increased copper-adjusted net sales of OEM cordsets
and portable cord products in the first six months of 1997 compared to the same
period in 1996. The increase in Communications Group net sales reflected an
increase in Datacom product sales volume, partially offset by a decline in the
volume of sales of PIC to US West and a decrease in pricing for high speed data
cables.
Gross profit increased $20.2 million, or 24%, to $103.8 million in the
first six months of 1997 from $83.6 million in the first six months of 1996.
General Cable's gross margin percentage increased to 19.1% in the first six
months of 1997 from 15.8% in the first six months of 1996. The improvement in
the 1997 period was primarily attributable to improved building wire pricing and
manufacturing cost reductions, partially offset by a decrease in pricing for
high speed data cables. On a copper-adjusted basis (to the first six months of
1997), General Cable's gross margin percentage was 16.0% in the first six months
of 1996.
The reduction in manufacturing costs in the first six months of 1997
compared to the same period in 1996 reflected (i) the carryover effects of
production facilities rationalized; (ii) improvement in capacity utilization,
including the conversion of certain facilities from five day to seven day per
week continuous production schedules; (iii) product redesigns to lower material
costs; and (iv) capital investment and other improvements in manufacturing
processes to improve materials usage and reduce waste.
Selling, general and administrative expenses increased $5.5 million, or
10%, to $60.0 million in the first six months of 1997 from $54.5 million in the
first six months of 1996. Selling, general and administrative expenses as a
percentage of sales were 11.0% in the first six months of 1997, compared to
10.5% of copper-adjusted (to the first six months of 1997) sales in the
first six months of 1996. The increase primarily reflected higher
transportation costs, higher advertising and increased salaries for
additional staffing to support sales growth.
12
GENERAL CABLE CORPORATION AND SUBSIDIARIES
Net interest expense was $9.5 million in the first six months of 1997
compared to $10.4 million in the first six months of 1996. The reduction
reflects the repayment of an $8.0 million related party note during 1996 and the
impact of refinancing the remaining related party debt in May, 1997 with
borrowing under a new credit facility at a lower effective rate.
The effective income tax rate for the six months ended June 30, 1997 was
40% compared to 33% for the six months ended June 30, 1996. The lower 1996
effective tax rate reflected the impact of certain tax return reconciliation
adjustments.
PRO FORMA RESULTS
The following pro forma results give effect to the refinancing of related
party debt as if it had occurred as of the beginning of the periods presented.
The pro forma financial data are for informational purposes only and may not
necessarily be indicative of the results of operations had the refinancing
actually occurred on such date.
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
1997 1996 1997 1996
----- ----- ----- -----
Pro forma net income $12.4 $10.8 $21.9 $14.2
===== ===== ===== =====
Pro forma earnings per share $ .51 $ .44 $ .90 $ .58
====== ====== ===== =====
LIQUIDITY AND CAPITAL RESOURCES
In general, General Cable requires cash for working capital, capital
expenditures, debt repayment, interest and taxes. General Cable's working
capital requirements increase when it experiences strong incremental demand for
products and/or significant copper price increases.
Cash flow used by operating activities in the first six months of 1997 was
$4.0 million. This principally reflected net income before depreciation and
deferred taxes of $28.7 million and a $14.9 million increase in accounts
payable, accrued liabilities and other long-term liabilities, offset by a $39.8
million increase in accounts receivable and an $8.8 million increase in
inventories.
Cash flow used in investing activities was $9.6 million in the first six
months of 1997, principally reflecting $12.3 million of capital expenditures.
Also included in cash flow from investing activities was $4.6 million from the
sale of excess real property in 1997.
Cash flow provided by financing activities in the first six months of 1997
was $22.2 million, primarily reflecting proceeds of borrowings under General
Cable's revolving credit line in excess of the repayment of intercompany and
other debt and the payment of a dividend.
13
GENERAL CABLE CORPORATION AND SUBSIDIARIES
Concurrently with consummation of the initial public offering, General Cable
borrowed $268.0 million under a new $350.0 million credit facility entered into
with a syndicate of banks (the "New Credit Facility"). The Company used the
proceeds of such borrowing to (i) repay all of its revolving bank debt, (ii)
repay all intercompany debt and advances owed to Wassall and its subsidiaries;
(iii) pay $42.6 million as a dividend to the Selling Stockholder; (iv) pay $2.0
million for the purchase of two related companies, Carol Cable Europe Ltd. and
Carol Cable Ltd., from Wassall; and (v) pay expenses of the Refinancing of $0.4
million.
The New Credit Facility consists of a five-year senior unsecured revolving
credit and competitive advance facility in an aggregate principal amount of
$350.0 million. Borrowings are guaranteed by General Cable's principal operating
subsidiaries.
Revolving Credit loans bear interest, at General Cable's option, at (i) a
spread over LIBOR or (ii) the "Alternate Base Rate", which is defined as the
higher of (a) the Agent's Prime Rate, (b) the secondary market rate for
certificates of deposit (adjusted for reserve requirements) plus 1% or (c) the
Federal Funds Effective Rate.
A facility fee accrues on the full amount of the New Credit Facility,
regardless of usage. The facility fee ranges between 8.0 and 20.0 basis points
per annum, depending upon General Cable's Leverage Ratio.
The New Credit Facility requires General Cable meet certain financial ratio
requirements and also contains limitations on (i) mergers, consolidations and
certain asset sales and dispositions; (ii) subsidiary indebtedness and
guarantees; (iii) liens and sale-leaseback transactions; (iv) transactions with
affiliates; (v) dividends on, and redemptions and repurchases of, capital stock;
(vi) covenants restricting dividends and advances by subsidiaries; (vii) loans
and investments; (viii) issuance of capital stock by subsidiaries; (ix) hedging
activities other than in the ordinary course of business; and (x) changes in
business.
14
GENERAL CABLE CORPORATION AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
11 - Computation of Earnings Per Share
27 - Financial Data Schedule
(b) Reports on Form 8-K - None
15
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, General
Cable Corporation has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GENERAL CABLE CORPORATION
Signed: August 4, 1997 By: s/CHRISTOPHER F. VIRGULAK
------------------------------
Christopher F. Virgulak
Executive Vice President, Chief
Financial Officer and Treasurer
16