1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[x] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarter ended September 30, 1996
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from to
Commission File Number: 0-24176
Marisa Christina, Incorporated
(Exact name of registrant as specified in its charter)
Delaware 11-3216809
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
415 Second Avenue New Hyde Park, New York 11040
(Address of principal executive offices) (Zip Code)
(516) 352-5050
(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
--- ---
The number of shares outstanding of the Company's Common Stock on October
31, 1996 were 8,384,769.
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MARISA CHRISTINA, INCORPORATED AND SUBSIDIARIES
INDEX
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Balance Sheets as of December 31, 1995
and September 30, 1996 (Unaudited) 2
Consolidated Statements of Earnings for the Three and Nine Months
Ended September 30, 1995 and 1996 (Unaudited) 3
Consolidated Statement of Stockholders' Equity for the Nine Months
Ended September 30, 1996 (Unaudited) 4
Consolidated Statements of Cash Flows for the Nine Months
Ended September 30, 1995 and 1996 (Unaudited) 5
Notes to Consolidated Financial Statements (Unaudited) 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II. OTHER INFORMATION
Item 1: Legal Proceedings 13
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
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PART I: FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
MARISA CHRISTINA, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
DECEMBER 31, SEPTEMBER 30,
1995(1) 1996
---- ----
ASSETS
Current assets:
Cash and cash equivalents $20,512,918 $ 1,442,525
Accounts receivable, less allowance for doubtful
accounts of $136,199 in 1995 and $220,272 in 1996 12,055,079 13,219,276
Inventories 9,325,223 11,822,328
Prepaid expenses and other current assets 1,553,225 4,347,556
----------- -----------
Total current assets 43,446,445 30,831,685
Property and equipment, net 2,181,767 2,729,336
Goodwill, less accumulated amortization of $990,473
in 1995 and $2,336,080 in 1996 8,038,798 33,389,186
Other assets 342,429 1,173,635
----------- -----------
Total assets $54,009,439 $68,123,842
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Loans payable to banks $ -- $ 6,000,000
Accounts payable 5,504,140 7,380,007
Income taxes payable 757,101 260,155
Accrued expenses and other current liabilities 1,397,335 2,791,159
----------- -----------
Total current liabilities 7,658,576 16,431,321
Other liabilities 128,000 128,000
----------- -----------
Total liabilities 7,786,576 16,559,321
----------- -----------
Stockholders' equity:
Preferred stock, $.01 par value; 1,000,000 shares
authorized, none issued -- --
Common stock, $.01 par value; 15,000,000 shares
authorized, 8,434,250 shares in 1995 and 8,586,769
in 1996 issued 84,343 85,868
Additional paid-in capital 29,084,978 31,653,186
Retained earnings 17,036,930 21,763,205
Cumulative translation adjustment 16,612 16,612
Less: Treasury stock, 202,000 shares of common
stock, at cost -- (1,954,350)
----------- -----------
Total stockholders' equity 46,222,863 51,564,521
----------- -----------
Total liabilities and stockholders' equity $54,009,439 $68,123,842
=========== ===========
(1) Amounts were derived from the audited consolidated balance sheet as of
December 31, 1995.
See accompanying notes to consolidated financial statements.
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MARISA CHRISTINA, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 1995 AND 1996
(UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------------------- -----------------------------
1995 1996 1995 1996
---- ---- ---- ----
Net sales $30,219,677 $33,148,541 $61,247,633 $82,797,236
Cost of goods sold 17,819,742 21,524,340 36,775,260 53,581,250
----------- ----------- ----------- -----------
Gross profit 12,399,935 11,624,201 24,472,373 29,215,986
Selling, general and administrative
expenses 5,927,012 8,650,426 14,207,596 22,551,814
----------- ----------- ----------- -----------
Operating earnings 6,472,923 2,973,775 10,264,777 6,664,172
Other income, net 34,796 803,931 624,442 1,722,247
Interest income (expense), net 128,202 (288,836) 502,588 (644,988)
----------- ----------- ----------- -----------
Earnings before provision
for income taxes 6,635,921 3,488,870 11,391,807 7,741,431
Provision for income taxes 2,577,949 1,388,341 4,462,351 3,015,156
----------- ----------- ----------- -----------
Net earnings $ 4,057,972 $ 2,100,529 $ 6,929,456 $ 4,726,275
=========== =========== =========== ===========
Weighted average shares
outstanding 8,434,100 8,422,128 8,434,033 8,530,076
=========== =========== =========== ===========
Earnings per share $ .48 $ .25 $ .82 $ .55
=========== =========== =========== ===========
See accompanying notes to consolidated financial statements.
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MARISA CHRISTINA, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
(UNAUDITED)
ADDITIONAL CUMULATIVE
COMMON STOCK PAID-IN RETAINED TRANSLATION TREASURY
SHARES AMOUNT CAPITAL EARNINGS ADJUSTMENT STOCK TOTAL
------ ------ ------- -------- ---------- ----- -----
Balance at
December 31,
1995 8,434,250 $84,343 $29,084,978 $17,036,930 $16,612 $ -- $ 46,222,863
Issuance of
common
stock in
acquisition
of Adrienne
Vittadini, Inc. 147,679 1,477 2,498,523 -- -- -- 2,500,000
Proceeds from
exercise of
stock options 4,840 48 62,872 -- -- -- 62,920
Other -- -- 6,813 -- -- -- 6,813
Net earnings for
the nine
months ended
September 30,
1996 -- -- -- 4,726,275 -- -- 4,726,275
Purchase of
treasury stock -- -- -- -- -- (1,954,350) (1,954,350)
--------- ------- ----------- ----------- ------- ----------- ------------
Balance at
September 30,
1996 8,586,769 $85,868 $31,653,186 $21,763,205 $16,612 $(1,954,350) $ 51,564,521
========= ======= =========== =========== ======= =========== ============
See accompanying notes to consolidated financial statements.
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MARISA CHRISTINA, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1996
(UNAUDITED)
1995 1996
---- ----
Cash flows from operating activities:
Net earnings $ 6,929,456 $ 4,726,275
Adjustments to reconcile net earnings to net cash
used by operating activities:
Depreciation and amortization 616,189 1,926,191
Provision for doubtful accounts 112,295 265,456
Changes in assets and liabilities:
Increase in accounts receivable (13,106,886) (1,729,934)
Increase in inventories (339,317) (1,723)
Increase in prepaid expenses and other current
assets (425,900) (380,742)
Decrease in other assets 67,072 55,706
Increase (decrease) in accounts payable 4,027,575 (1,412,597)
Increase (decrease) in accrued expenses and
other current liabilities 613,589 (3,617,412)
Increase (decrease) in income taxes payable 1,242,050 (496,946)
------------ ------------
Net cash used by operating activities (263,877) (665,726)
------------ ------------
Cash flows used in investing activities:
Acquisitions of property and equipment (388,749) (479,137)
Acquisition of Adrienne Vittadini, Inc. net of cash
acquired (note 3) -- (17,804,994)
------------ ------------
Net cash used in investing activities (388,749) (18,284,131)
------------ ------------
Cash flows from financing activities:
Borrowings from banks, net -- 1,768,963
Proceeds from issuance of common stock 3,250 62,920
Acquisition of treasury stock -- (1,954,350)
Other (10,415) 1,931
------------ ------------
Net cash used in financing activities (7,165) (120,536)
------------ ------------
Net decrease in cash (659,791) (19,070,393)
Cash at beginning of period 10,832,472 20,512,918
------------ ------------
Cash at end of period $ 10,172,681 $ 1,442,525
============ ============
Cash paid during the period for:
Income taxes $ 3,204,950 $ 3,447,425
============ ============
Interest $ 1,074 $ 716,264
============ ============
See accompanying notes to consolidated financial statements.
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MARISA CHRISTINA, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1996
(UNAUDITED)
(1) BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements include the
accounts of Marisa Christina, Incorporated (the "Company") and its wholly-owned
subsidiaries. Significant intercompany accounts and transactions have been
eliminated in consolidation.
The unaudited consolidated financial statements do not include all
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles. For
further information, such as the significant accounting policies followed by the
Company, refer to the notes to the Company's audited consolidated financial
statements.
In the opinion of management, the unaudited consolidated financial
statements include all necessary adjustments (consisting of normal, recurring
accruals), for a fair presentation of the financial position, results of
operations and cash flows for the interim periods presented. The results of
operations for the nine months ended September 30, 1995 and 1996 are not
necessarily indicative of the operating results to be expected for a full year.
(2) INVENTORIES
Inventories at September 30, 1995 and 1996 consist of the following:
1995 1996
---- ----
Piece goods $2,868,825 $ 3,209,800
Work in process 1,031,178 1,246,307
Finished goods 5,457,293 7,366,221
---------- -----------
$9,357,296 $11,822,328
========== ===========
(3) ACQUISITION OF ADRIENNE VITTADINI, INC.
On January 18, 1996, the Company acquired, through a newly formed
subsidiary, Adrienne Vittadini Enterprises, Inc. ("AVE"), substantially all of
the assets and assumed certain liabilities of Adrienne Vittadini, Inc. ("AVI")
and acquired the trademarks of Vittadini, Ltd., which relate to the business and
operations of AVI for cash in the aggregate of $18,830,000 and 147,679 shares of
the Company's common stock valued at $2,500,000. Additional consideration may be
paid to AVI by the Company based upon profitability achieved by AVE in 1998 and
2000, up to a maximum additional purchase price of $39 million. For the six-year
period beginning January 1, 1996, the Company will pay AVI 10% of net royalty
and commission income received by AVE plus 10% of net earnings before interest,
income taxes and amortization of goodwill of AVE over $3,000,000 per year. In
addition, upon retirement of the two majority shareholders of AVI from the
Company, AVI will receive, in the aggregate, an amount equal to .825% of net
sales of AVE and its trademark licensees for a period ending on the latter of
December 31, 2005 or five years after the death of the last such shareholder.
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MARISA CHRISTINA, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1996
(UNAUDITED)
The acquisition occurred on January 18, 1996, but was based on asset
values at December 31, 1995. Accordingly, operating results related to the AVI
assets acquired commenced on January 1, 1996 and are consolidated with those of
the Company from that date forward. The acquisition has been accounted for using
the purchase method of accounting. Amounts payable to AVI based on net sales
will be charged to earnings annually. Contingent consideration payable based on
1998 and 2000 results of AVE will be considered as part of the purchase price
and allocated to goodwill.
The aggregate initial purchase price for the assets of AVI is as follows:
Cash paid to AVI $10,080,000
Cash used to retire supplier note payable 8,750,000
Fair value, based on quoted market price,
of 147,679 shares of the Company's
common stock issued to AVI 2,500,000
Liabilities assumed 11,535,619
Transaction costs 1,000,000
-----------
Initial purchase price $33,865,619
===========
The Company funded the cash portion of the initial purchase price with
accumulated cash reserves.
The initial purchase price was allocated to the assets acquired based on
their fair value as follows:
Cash $ 1,025,006
Accounts receivable 1,250,361
Inventory 2,495,382
Prepaid expenses and other current assets 862,947
Property and equipment 649,016
Goodwill and other intangible assets 26,695,995
Other assets 886,912
-----------
Initial purchase price $33,865,619
===========
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MARISA CHRISTINA, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1996
(UNAUDITED)
Pro forma consolidated net sales, net earnings and earnings per share for
the three and nine months ended September 30, 1995 assuming the acquisition had
occurred on January 1, 1995 are as follows:
Three months ended Nine months ended
September 30, 1995 September 30, 1995
------------------ ------------------
Net sales $36,314,000 $76,872,000
=========== ===========
Net earnings $ 3,536,000 $ 4,647,000
=========== ===========
Earnings per common share $ 0.41 $ 0.54
=========== ===========
(4) CREDIT FACILITIES
The Company has line of credit facilities with two banks, aggregating
$35,000,000, which may be utilized for commercial letters of credit, banker's
acceptances, commercial loans and letters of indemnity. Borrowings under the
credit facilities are secured by the Company's accounts receivable and imported
inventory and bear interest at the bank's prime rate or LIBOR plus 1% at the
Company's options. As of September 30, 1996, $6,000,000 of borrowings and
$1,490,172 of commercial letters of credit were outstanding under the credit
facilities. At September 30, 1996, available borrowings under the facility were
$27,509,828.
In connection with the acquisition of the assets of Adrienne Vittadini,
Inc., described in note 3, AVE assumed and retained a factoring arrangement
whereby AVE assigns and sells substantially all of its trade accounts receivable
to a bank, without recourse as to credit risk but with recourse for any claims
by the customer for adjustments in the normal course of business.
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MARISA CHRISTINA, INCORPORATED AND SUBSIDIARIES
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
On January 18, 1996, the Company acquired, through a newly formed
subsidiary, Adrienne Vittadini Enterprises, Inc. ("AVE"), substantially all of
the assets and assumed certain liabilities of Adrienne Vittadini, Inc. ("AVI")
and acquired the trademarks of Vittadini, Ltd., which relate to the business and
operations of AVI for cash in the aggregate of $18,830,000 and 147,679 shares of
the Company's common stock valued at $2,500,000. Additional consideration may be
paid to AVI by the Company based upon profitability achieved by AVE in 1998 and
2000, up to a maximum additional purchase price of $39 million. The acquisition
occurred on January 18, 1996, but was based on asset values at December 31,
1995. Operating results related to the AVI assets acquired on January 1, 1996
are consolidated with those of the Company from that date forward. Accordingly,
results for the three and nine months ended September 30, 1996 are not directly
comparable to those for the three and nine months ended September 30, 1995. (See
note 3 to consolidated financial statements).
The following table sets forth information with respect to the percentage
relationship to net sales of certain items of the consolidated statements of
earnings of the Company for the three and nine months periods ended September
30, 1995 and 1996.
Three Months Nine Months
Ended Ended
September 30, September 30,
------------------- -------------------
1995 1996 1995 1996
---- ---- ---- ----
Net sales 100.0% 100.0% 100.0% 100.0%
----- ----- ----- -----
Gross profit 41.0 35.1 40.0 35.3
Selling, general and administrative expenses 19.6 26.1 23.2 27.2
----- ----- ----- -----
Operating earnings 21.4 9.0 16.8 8.1
Other income, net 0.1 2.4 1.0 2.0
Interest income (expense), net 0.4 (0.9) .8 (0.8)
Provision for income taxes (8.5) (4.2) (7.3) (3.6)
----- ----- ----- -----
Net earnings 13.4% 6.3% 11.3% 5.7%
===== ===== ===== =====
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THREE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 1995
Net sales. Net sales increased by 9.6% from $30.2 million in 1995 to $33.1
million in 1996. This increase was primarily attributable to $11.8 million of
sales by AVE, which was acquired in January 1996, and increased sales by
Flapdoodles primarily as the result of new private label accounts. Sales by the
Marisa Christina division declined significantly in the quarter principally due
to the poor retail environment and lower demand for the Company's fall classic
line in 1996.
Gross Profit. Gross profit decreased 6.5%, from $12.4 million in 1995 to
$11.6 million in 1996. As a percentage of net sales, gross profit decreased from
41.0% in 1995 to 35.1% in 1996. The decline in the gross profit percentage for
the quarter was attributable to lower margins due to markdowns at Marisa
Christina division as a result of the poor retail environment.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased 45.8%, from $5.9 million in 1995 to $8.6
million in 1996. Selling, general and administrative expenses related to AVE
represent $3.5 million of the increase. As a percentage of net sales of the
Company, selling, general and administrative expenses increased from 19.6% in
1995 to 26.1% in 1996 due to the decreased volume of sales without a
corresponding decrease in expenses.
Other Income, Net. Other income, net consists of royalty, licensing and
copyright infringement income. Other income increased by $769,000 in 1996
compared to 1995 as the result of AVE which had net royalty income of $768,000.
Interest Income (Expense), net. Interest income (expense), net changed
from income of $128,000 in 1995 to expense of $289,000 in 1996 as a result of
less cash available to invest due to the AVI acquisition as well as interest
expense related to bank loans.
Income Taxes . Income taxes decreased from $2.6 million in 1995 to $1.4
million in 1996 as the result of lower earnings. The Company effective income
tax rate for the three months ended September 30, 1996 was 39.8% compared to
38.8% during the same period in 1995.
NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1995
Net Sales. Net sales increased 35.3%, from $61.2 million in 1995 to $82.8
million in 1996. This increase was primarily attributable to sales by AVE of
$28.9 million, which was acquired in January 1996, and increased sales by
Flapdoodles primarily attributable to increased sales of private label products.
Sales by the Marisa Christina division declined significantly, principally as a
result of the poor retail environment and lower demand for the Company's fall
classic line in 1996.
Gross Profit. Gross profit increased 19.2%, from $24.5 million in 1995 to
$29.2 million in 1996. As a percentage of net sales, gross profit decreased from
40.0% in 1995 to 35.3% in 1996. The decline in the gross profit percentage was
attributable to lower margins due to markdowns at Marisa Christina division as a
result of the poor retail environment.
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Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased 59.2%, from $14.2 million in 1995 to $22.6
million in 1996. Selling, general and administrative expenses related to AVE
represent $8.8 million of the increase. As a percentage of net sales of the
Company, selling, general and administrative expenses increased from 23.2% in
1995 to 27.2% in 1996. This increase is primarily attributable to the
amortization of $1.0 million of goodwill recorded in the AVI acquisition and the
decreased volume of sales without a corresponding decrease in expenses.
Other Income, Net. Other income, net consists of royalty, licensing and
copyright infringement income. Other income increased by $1.1 million in 1996,
compared to 1995 as the result of AVE which had $1.5 million of royalty income.
This more than offset the Company's decline in copyright infringement income.
During the nine months ended September 30, 1996 and 1995, the Company received
$37,000 and $459,000, respectively from settlements of copyright infringement
cases. The timing and amount of future settlements of copyright infringement
cases, if any, are not predictable by management.
During the nine months ended September 30, 1996, AVE's perfume licensee
filed for liquidation. Gross income earned from such licensee for the nine
months ended September 30, 1996 was approximately $200,000. The Company is
presently looking for a new licensee.
Interest Income (Expense), net. Interest income (expense), net changed
from income of $503,000 in 1995 to expense of $645,000 in 1996 as the result of
less cash available to invest due to the AVI acquisition as well as interest
expenses related to bank loans.
Income Taxes . Income taxes decreased from $4.5 million in 1995 to $3.0
million in 1996 as the result of lower earnings. The Company's effective income
tax rate for the nine months ended September 30, 1996 was 38.9% compared to
39.2% during the same period in 1995.
SEASONALITY
The Company's business is seasonal, with a substantial portion of its
revenues and earnings accruing during the second half of the year as a result of
the Back-to-School, Fall and Holiday selling seasons. This is due to both a
larger volume of unit sales in these seasons and traditionally higher prices for
these garments, which generally require more costly materials than the
Spring/Summer and Resort seasons. Merchandise from Holiday and Fall, the
Company's largest seasons, are shipped in the last two fiscal quarters.
Merchandise for Resort, Spring/Summer and Early Fall, the Company's lower volume
seasons, are all shipped primarily in the first two quarters. Sales volume is
typically the lowest in the second quarter with shipments for the Fall season
beginning in the last days of the quarter.
LIQUIDITY AND CAPITAL RESOURCES
The Company has line of credit facilities with two banks, aggregating
$35,000,000, which may be utilized for commercial letters of credit, banker's
acceptances, commercial loans and letters of indemnity. Borrowings under the
credit facilities are secured by the Company's accounts receivable and imported
inventory and bear interest at the bank's prime rate or LIBOR plus 1% at the
Company's options. As of September 30, 1996, $6,000,000 of borrowings and
$1,490,172 of commercial letters of credit were outstanding under the credit
facilities. At September 30, 1996, available borrowings under the facility were
$27,509,828.
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During 1996, the Company has planned capital expenditures of approximately
$1,000,000, primarily to upgrade computer systems. These capital expenditures
will be funded by internally generated funds and, if necessary, bank borrowings
under the Company's line of credit facility. Capital expenditures during the
nine months ended September 30, 1996 were approximately $479,000.
The Company believes that funds generated by operations, if any, and the
bank credit facilities will provide financial resources sufficient to meet all
of its foreseeable working capital and letter of credit requirements.
EXCHANGE RATES
Although it is the Company's policy to contract for the purchase of
imported merchandise in United States dollars, reductions in the value of the
dollar could result in Company paying higher prices for its products. During the
last three fiscal years, however, currency fluctuations have not had an impact
on the Company's cost of merchandise. The Company does not engage in hedging
activities with respect to such exchange rate risk.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no legal proceedings required to be disclosed in response to Item 103
of Regulation S-K.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits
4.6 Credit agreement dated August 21, 1996 by and among the Company, Marisa
Christina Apparel, Inc., Flapdoodles, Inc., Adrienne Vittadini
Enterprises, Inc. and The Chase Manhattan Bank, N.A.
4.7 Credit agreement dated August 29, 1996 by and among the Company, Marisa
Christina Apparel, Inc., Flapdoodles, Inc., Adrienne Vittadini
Enterprises, Inc. and The Bank of New York.
27 Financial Data Schedule.
Reports on Form 8-K.
No reports on Form 8-K were filed during the quarter ended September 30, 1996.
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SIGNATURE
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.
Date: November 13, 1996 /s/ S. E. Melvin Hecht
-------------------------------------
S. E. Melvin Hecht
Chief Financial Officer and Treasurer
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