1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter ended April 30, 1998 Commission File Number 0-8193
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
---------------- ---------------
SENSYS TECHNOLOGIES INC.
(FORMERLY KNOWN AS
DAEDALUS ENTERPRISES, INC.)
--------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 38-1873250
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P.O. BOX 1430
-------------
Newington, Virginia 22122 (703) 550-7000
------------------------- ---------------
(Address of principal executive offices) (Registrant's telephone number)
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 ( )
Number of shares outstanding of common stock, $.01 par value, as of April 30,
1998
534,574 shares
2
Page 2 FORM 10-Q
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
DAEDALUS ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS - UNAUDITED
Nine Months Ended Three Months Ended
April 30, April 30,
-----------------------------------------------------------------------------------------------------------------------
1998 1997 1998 1997
-----------------------------------------------------------------------------------------------------------------------
OPERATING REVENUE
Standard products $ 942,760 $ 1,471,041 $ 277,057 $ 454,530
Product development 261,160 703,294 91,936 215,114
-----------------------------------------------------------------------------------------------------------------------
1,203,920 2,174,335 368,993 669,644
Other Income 18,742 9,737 2,060 3,875
-----------------------------------------------------------------------------------------------------------------------
1,222,662 2,184,072 371,053 673,519
COST AND EXPENSES
Cost of revenue - standard products 715,879 848,721 246,065 331,392
Cost of revenue - product development 297,796 566,464 79,693 139,211
Research and development 76,489 93,781 47,567 22,132
Selling and administrative 554,480 707,375 141,040 230,153
Interest 47,019 49,423 19,679 14,053
Merger related expenses- Note H 184,000 0 184,000 0
-----------------------------------------------------------------------------------------------------------------------
1,875,663 2,265,764 718,044 736,941
-----------------------------------------------------------------------------------------------------------------------
NET LOSS
BEFORE INCOME TAXES (653,001) (81,692) (346,991) (63,422)
CREDIT FOR INCOME TAXES - NOTE C 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------
NET LOSS $ (653,001) $ (81,692) $ (346,991) $ (63,422)
------------------------------------------------=======================================================================
NET LOSS PER SHARE-BASIC - Note F $ (1.21) $ (0.15) $ (0.65) $ (0.12)
------------------------------------------------=======================================================================
NET LOSS PER SHARE-DILUTED - Note F $ (1.21) $ (0.15) $ (0.65) $ (0.12)
------------------------------------------------=======================================================================
The accompanying notes are an integral part of these condensed financial
statements.
3
Page 3 FORM 10-Q
DAEDALUS ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS-UNAUDITED
April 30, July 31,
1998 1997
-----------------------------------------------------------------------------------------------------------------
ASSETS - Note D
CURRENT ASSETS
Cash and cash equivalents $ 61,891 $ 39,068
Accounts receivable, less allowance of $2,500 131,402 239,703
Unbilled accounts receivable 247,038 28,500
Inventories - Note B 479,686 601,462
Other current assets 19,090 18,075
-----------------------------------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 939,107 926,808
PROPERTY AND EQUIPMENT
Land 177,131 177,131
Building 1,433,898 1,433,898
Machinery and equipment 844,787 831,767
Special equipment 556,251 445,310
-----------------------------------------------------------------------------------------------------------------
3,012,067 2,888,106
Less accumulated depreciation (1,832,393) (1,745,474)
-----------------------------------------------------------------------------------------------------------------
1,179,674 1,142,632
OTHER ASSETS 250 250
-----------------------------------------------------------------------------------------------------------------
$ 2,119,031 $ 2,069,690
------------------------------------------------------------------------------===================================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Note payable to bank - Note D $ 640,000 $ 0
Accounts payable 139,223 197,563
Accrued compensation and related costs 168,706 103,369
Customer deposits 73,042 57,142
Reserve for product warranties 28,585 30,000
Other accrued liabilities 83,349 28,274
Mortgage Debt - Note D 226,939 242,238
-----------------------------------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 1,359,844 658,586
-----------------------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
Common stock, $.01 par value 5,346 5,340
Authorized--2,000,000 shares
Issued and outstanding-- 534,574 shares
(July 31, 1997-- 534,024 shares)
Additional paid-in capital 1,165,778 1,164,700
Retained earnings (411,937) 241,064
-----------------------------------------------------------------------------------------------------------------
759,187 1,411,104
-----------------------------------------------------------------------------------------------------------------
$ 2,119,031 $ 2,069,690
------------------------------------------------------------------------------===================================
The accompanying notes are an integral part of these condensed financial
statements.
4
Page 4 FORM 10-Q
DAEDALUS ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
Nine Months Ended
April 30,
1998 1997
--------------------------------------------------------------------------------------------------------------------
OPERATING ACTIVITIES
Net loss $ (653,001) $ (81,692)
Adjustments to reconcile net income to net cash provided by
operating activities
Depreciation 86,919 103,088
Amortization of software 37,778
Net book value of special equipment sold 138,726
Increase in accounts receivable (110,237) (139,992)
Decrease in inventory 121,776 104,469
Increase in other assets (1,015) (24,176)
Increase in accounts payable and accrued expenses 60,658 109,263
Increase in customer deposits 15,900 85,889
--------------------------------------------------------------------------------------------------------------------
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (479,000) 333,353
INVESTING ACTIVITIES
Purchase of property and equipment (123,962) (188,795)
--------------------------------------------------------------------------------------------------------------------
CASH USED IN INVESTING ACTIVITIES (123,962) (188,795)
FINANCING ACTIVITIES
Proceeds from revolving line of credit 1,313,000 1,318,000
Payments on revolving line of credit (673,000) (1,450,000)
Payments on mortgage debt (15,299) (14,243)
Proceeds of stock issued pursuant to stock option and
stock purchase plan 1,084 2,372
--------------------------------------------------------------------------------------------------------------------
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 625,785 (143,871)
INCREASE IN CASH 22,823 687
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 39,068 56,768
--------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF QUARTER $ 61,891 $ 57,455
-------------------------------------------------------------------------------=====================================
The accompanying notes are an integral part of these condensed financial
statements.
5
Page 5 FORM 10-Q
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
April 30, 1998
NOTE A - BASIS OF PRESENTATION
The financial information included herein is unaudited; however, such
information reflects all adjustments (consisting solely of normal recurring
adjustments) that are, in the opinion of management, necessary for a fair
presentation of the results of operations, financial position and cash flows for
the periods presented. The accompanying unaudited financial statements have been
prepared in accordance with the instructions to Form 10-Q and, therefore, do not
include all information necessary to be in conformity with generally accepted
accounting principles.
Reference is made to the Notes to Consolidated Financial Statements in the
Annual Report to Stockholders for the year ended July 31, 1997.
The results of operations for the nine months ended April 30, 1998 are not
necessarily indicative of the results to be expected for the full year.
NOTE B - INVENTORY
Inventory includes work-in-process of approximately $19,000 and $115,000 as of
April 30, 1998 and July 31, 1997, respectively. The remaining inventory consists
of parts and subassemblies, both purchased and manufactured, that can be used in
the manufacturing process or sold as spare parts.
NOTE C - INCOME TAXES
The Company estimates its provision for income taxes using its estimated annual
effective rate. The Company has limited the recognition of income tax benefit
for its net operating loss carryforwards due to cumulative losses realized in
recent years. The valuation allowance for deferred taxes is $598,000 at April
30, 1998 and $409,000 at July 31, 1997.
NOTE D - REVOLVING CREDIT
On April 30, 1998, the Company had a $1,550,000 line of credit with a
bank, with availability subject to a formula, bearing interest at one and
one-half percent above the bank's prime rate (effective rate of 10%). Under the
formula, the Company can borrow $950,000 based on the value of the real estate,
with the remaining available borrowings based on 50% of the value of certain
receivables specified in the line of credit agreement. As of April 30, 1998,
total remaining credit availability was $251,000 based on the formula. The
outstanding balance under this line of credit agreement was approximately
$640,000 at April 30, 1998, with $59,000 of the line of credit agreement
reserved for a standby letter of credit. This compares to an outstanding
balance of zero at July 31, 1997 with an additional $59,000 reserved for a
standby letter of credit.
6
Page 6 FORM 10-Q
The Company has classified its total mortgage liability as current because the
mortgage agreement is cross-collateralized and cross-defaulted with the line of
credit, which is a secured master demand note.
NOTE F - EARNINGS PER SHARE
The computation of net earnings per share is based on the weighted average
number of shares of common stock outstanding during the nine and three month
periods ended April 30, 1998 and 1997. The weighted average number of shares
used in the computation was 534,451 and 533,278 for the nine months ended April
30, 1998 and 1997, respectively, and 534,574 and 533,491 for the quarter ended
April 30, 1998 and 1997, respectively, all of which were issued and outstanding.
No adjustments were made to either net loss or the number of shares outstanding
in calculating loss per share as such adjustments would have been anti-dilutive.
NOTE G - PROPOSED MERGER
On December 23, 1997, the Company entered into an Agreement and Plan of Merger
(the "Agreement") with S.T. Research Corporation, a Virginia corporation
("STR"). The Agreement provides that a newly-created wholly owned subsidiary
would merge into STR and each outstanding share of STR common stock would be
exchanged into and become 2.58 shares of the Company's common stock. As a
result of the merger, STR would become a wholly-owned subsidiary of the
Company.
The merger became effective on June 9, 1998. As a result of the merger, the
shares the Company issued to the former STR shareholders constitute 86.5% of
the Company's outstanding shares. The merger is being accounted for as a
reverse acquisition. Accordingly, STR is deemed to have purchased the Company.
NOTE H - MERGER RELATED EXPENSES
In the third quarter of fiscal 1998, the Company recognized merger related
expenses that resulted in a pre-tax charge of $184,000. The expenses resulted
from the Company's decision to enter into a merger agreement with STR and
consist of legal fees, accountant fees, advisor fees and printing costs. The
Merger expense was recognized since S.T. Research is the accounting acquirer.
See Note G.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
GENERAL
The Company manufactures products for, and performs development projects in, the
field broadly described as "remote sensing". The principal products manufactured
by the Company are
7
Page 7 FORM 10-Q
airborne imaging systems which are installed in aircraft for acquisition of data
on environmental parameters. A principal application of the Company's remote
sensing products has been the measurement of environmental parameters in support
of pollution control programs and environmental impact studies.
The Company is also engaged in customer-funded projects for the development of
advanced equipment in the remote sensing field. Some of these projects may lead
to the incorporation of newly developed technology into existing or future
product lines.
These two portions of the business are conducted by the same pool of personnel
using the same equipment and operating space and constitute a single industry
segment. The margins associated with these two portions of the business are
different, with standard products generally having higher margins than
customer-funded development projects. The Company receives the majority of its
revenue from a small number of relatively large contracts. Standard product
contracts are generally of higher dollar value than customer-funded product
development contracts, with each contract representing a substantial portion of
total revenue each year. Therefore, the timing of the receipt of a standard
product sales contract as well as the related manufacturing endeavor can have a
material impact on a quarter-to-quarter or year-to-year comparison of the
Company's results of operations. Most standard product sales contracts and some
customer-funded product development contracts are also accompanied by a
significant deposit. Therefore, the timing of the contract receipt can have a
material impact on the Company's cash flow.
The Company incurred a significant loss in the first nine months of fiscal 1998
after incurring significant losses for the last three fiscal years. These losses
have caused the Company to experience severe liquidity problems and its bank
line of credit is being utilized to maintain operations. The Company's
short-term viability and operating results are dependent on its ability to
acquire additional equity capital or increase the level of new business and cash
flow. The consummation of the merger should resolve the need for additional
equity capital.
MERGER
On June 9, 1998, the Company completed the proposed merger ("Merger") of a
newly created subsidiary into S.T. Research Corporation, a Virginia corporation
("STR"). As a result of the Merger, each outstanding STR share of common stock
was exchanged into and became 2.58 shares of the Company's common stock. The
shares issued in the Merger comprise 86.5% of the outstanding shares of the
Company. For accounting purposes, the Merger is being treated as STR's
acquisition of the Company. Therefore, in subsequent periodic reports, the
historical financial information of STR will be included.
In addition to the Merger, the Company has changed its fiscal year to that of
STR. This means that a September 30 fiscal year has been adopted. Also, the
Company has changed its name to Sensys Technologies Inc.
STR is a supplier of technology-driven solutions to the U.S. government, its
principal customer, and a major supplier of threat warning systems to the
surface and subsurface threat warning system industry. As of the end of its
most recently ended fiscal year (September 30, 1997), STR had revenues of
approximately $24 million, total assets of approximately $10.8 million and
working capital of approximately $1.6 million.
All statements, both historical and forward-looking, in the following
discussion of Results of Operations and Liquidity and Sources of Capital solely
refer, unless otherwise indicated, to the Company without regard to the effects
of the Merger.
8
Page 8 FORM 10-Q
RESULTS OF OPERATIONS
OPERATING REVENUE
Standard product revenue and product development revenue for the nine and three
month periods ended April 30, 1998 decreased from the comparable periods of
fiscal 1997 due to the low level of backlog at the beginning of fiscal 1998 and
the low level of bookings received during the period.
The level of the Company's revenues and profits has historically fluctuated from
quarter-to-quarter and from year-to-year as the majority of its revenue is
derived from a small number of contracts. Although fluctuations are normal given
the Company's reliance on a small number of high value contracts for the
majority of its revenue, the low level of standard product orders received in
the last three fiscal years is causing severe liquidity problems. See "Merger",
"New Orders and Backlog" and "Liquidity and Sources of Capital".
DOMESTIC VS. INTERNATIONAL REVENUE
International revenue represented 19% and 53% of operating revenue during the
first nine months of fiscal 1998 and 1997, respectively, and 19% and 54% of
total revenue during the third quarter of fiscal 1998 and 1997, respectively.
International revenue decreased compared to the same periods of fiscal 1997
primarily due to the Company's low level of international backlog at the
9
Page 9 FORM 10-Q
beginning of fiscal 1998 and the low level of bookings received during the
period. The increase in domestic operating revenue in the first nine months and
third quarter of fiscal 1998 from the same periods in fiscal 1997 is due to the
Company's recognition of revenue on several domestic contracts that were in
backlog at the beginning of fiscal 1998.
To mitigate foreign currency transaction losses, international contracts are
denominated in U.S. dollars and large standard product contracts are generally
secured by irrevocable letters of credit. The Company also receives substantial
deposits on many large contracts with international customers.
NEW ORDERS AND BACKLOG
In the nine months ended April 30, 1998, the Company received orders in the
amount of approximately $1,096,000 as compared to approximately $2,410,000 in
the comparable period of fiscal 1997. The Company's backlog at the end of the
third quarter was approximately $546,000, compared to approximately $1,085,000
at the end of the comparable period in fiscal 1997. Approximately $272,000 of
the April 30, 1998 backlog is for standard products, with the balance being
related to product development contracts.
The Company is engaged in negotiations for several standard product orders. The
negotiations for these orders have not been finalized and there can be no
assurance that these orders will be received. The Company has some high value
components in inventory that will enable the Company to immediately recognize
revenue upon receiving one of these standard product orders. The results of
operations for future periods are dependent upon the receipt and timing of
future orders.
COST OF REVENUE
In the first nine months and third quarter of fiscal 1998, cost of revenue
increased as a percentage of revenue compared to the same periods in fiscal 1997
due primarily to higher cost standard product contracts in fiscal 1998 and also
due to higher than anticipated costs on the Small Business Innovation Research
programs.
RESEARCH AND DEVELOPMENT
Research and development expense declined in the first nine months of fiscal
1998 as compared to the same period one year earlier primarily due to Airborne
Digital Camera enhancements in the comparable periods of fiscal 1997. Research
and development expense increased in the third quarter of fiscal 1998 as
compared to the same period one year earlier primarily due to enhancements on
the Large Format Multispectral Camera.
10
Page 10 FORM 10-Q
SELLING AND ADMINISTRATIVE EXPENSE
Selling and administrative expense decreased in the first nine months and third
quarter of fiscal 1998 compared to the same periods in fiscal 1997, primarily
due to agent commissions paid in the comparable periods of fiscal 1997.
INTEREST
Interest expense decreased in the first nine months of fiscal 1998 compared to
the same period in fiscal 1997 due principally to the Company's reduced
borrowings. Interest expense increased in the third quarter of fiscal 1998
compared to the same period in fiscal 1997 due principally to the Company's
increased borrowings.
MERGER RELATED EXPENSES
In the third quarter of fiscal 1998, the Company recognized merger related
expenses that resulted in a pre-tax charge of $184,000. The expenses resulted
from the Company's decision to enter into a merger agreement with STR and
consist of legal fees, accountant fees, advisor fees and printing costs.
LIQUIDITY AND SOURCES OF CAPITAL
The Company's primary sources of liquidity were funds from operations and
borrowings under a line of credit secured by substantially all of the Company's
assets including real estate. The Company's line of credit provides for
borrowings of up to $1,550,000, with availability subject to a formula, bearing
interest at one and one-half percent above the lending bank's prime rate. The
formula permits borrowings of up to $950,000 based on the value of the real
estate, with the remaining available borrowings based on 50% of the value of
certain receivables specified in the line of credit agreement. As of April 30,
1998, the Company had an outstanding balance of $640,000 under the line of
credit, an additional $59,000 reserved for a standby letter of credit and
additional borrowing availability of $251,000. Following the merger, the
credit line was paid in full on June 10, 1998.
The Company's mortgage indebtedness requires the Company to make monthly
payments of $3,585 for both principal and interest and to make a balloon payment
on November 1, 2000. The mortgage bears interest at one and one-half percent
over prime. The Company has classified its total mortgage liability as current
because the mortgage agreement is cross-collateralized and cross-defaulted with
the line of credit, which is a secured master demand note.
11
Page 11 FORM 10-Q
In order to provide additional working capital and retire current debt, the
Company is attempting to sell its building and lease back a portion of the
facility from the new owner. There can be no assurance that the building can be
sold at a price acceptable to the Company or that an acceptable leaseback
agreement can be negotiated. If the Company must relocate, management is
confident that a suitable facility can be found and that the Company's business
will not be materially disrupted. The building is listed for sale with a real
estate agency and the Company expects to continue efforts to sell its building
whether or not the Merger is consummated. The building was first listed for sale
in February 1996 at an asking price of $2.2 million and is currently listed at a
price of $1.95 million. An offer to lease the building for two years for
approximately $236,000 per year with an option to buy at a price of $1.8 million
is currently pending and is being considered by the Company. The sale of the
building is expected to result in the termination of the existing line of
credit. Management believes that a new line of credit supported by receivables
and other assets of the Company can be negotiated with the current bank lender,
or a substitute bank, which will be adequate to support the Company's working
capital needs, provided that the Company's backlog increases significantly over
the current level. In the absence of a significant increase in the Company's
backlog, it is unlikely that the Company would have sufficient operating cash
flow to induce a bank to establish a new line of credit. There can be no
assurance that the Company will be able to acquire a replacement line of credit
at all or that the level of borrowing permitted under any replacement line of
credit will be adequate for the Company's working capital needs.
The Company has entered into the Merger Agreement, which if consummated,
management believes will provide the Company with additional equity capital and
related technological and marketing capabilities and will have a positive effect
on the Company's short and long term liquidity. The closing of the Merger is
subject to the satisfaction of various conditions, including the approval of the
Merger by the stockholders of STR and approval by the Company's stockholders of
an amendment to its Certificate of Incorporation to permit the issuance of
shares pursuant to the Merger. Stockholders of the Company and STR meet on June
9, 1998 to vote upon such matters. The Merger is expected to close promptly
following receipt of such approvals. As a result, there can be no assurance that
the Merger will be consummated. If the Merger is not consummated, the Company
will continue to pursue additional equity financing through discussions with
potential investors possessing related technological and/or marketing
capabilities. The Company will also continue to operate supported by its line of
credit, but the lending bank has indicated that it may limit the amount which
the Company is permitted to borrow under the line of credit in the absence of
continued improvement in the Company's business prospects or progress toward the
acquisition of a signficant amount of equity capital. If the Merger is not
consummated and the Company is unable to borrow amounts necessary to funds its
operations, its financial position would be materially and adversely affected
and the Company
12
Page 12 FORM 10-Q
may have no choice but to cease operations if other sources of capital are not
available. See "Merger" for a description of the proposed Merger.
Working capital decreased to a deficit of $420,000 at April 30, 1998 from a
surplus of $268,000 at July 31, 1997, due primarily to the decreased revenue and
earnings for the first nine months. Current assets increased by approximately
$12,000 due primarily to an increase in receivables at the end of the third
quarter. Current liabilities increased by approximately $701,000 due to
borrowings on the line of credit.
Cash used by operating activities was $479,000 during the first nine months of
fiscal 1998 as compared to cash provided of $333,000 in the first nine months of
fiscal 1997, due primarily to the decreased revenue and earnings for the first
nine months.
The Company expects continued investment for capital expenditures, primarily for
equipment and software relating to the Company's growth plan during the
remainder of fiscal 1998, but has not entered into any material commitments. Due
to its current financial position, the Company intends to reduce internal
research and development expenses and to keep marketing and other administrative
costs to a minimum until its financial condition improves significantly.
YEAR 2000 ASSESSMENT
The Company is unable to assess whether the Year 2000 computing problems will
have a material impact on its business operations since it is still in the
process of investigating the problem with outside consultants.
FORWARD-LOOKING STATEMENTS
The foregoing discussion and analysis contains a number of "forward-looking
statements", as that term is used in the Securities Exchange Act of 1934, with
respect to the Company's expectations for future periods. Such statements are
subject to various risks and uncertainties, which are described in the foregoing
discussion and analysis.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
13
Page 13 FORM 10-Q
PART II - OTHER INFORMATION
All items omitted are not applicable or the answers thereto are negative.
Item 6(a): Exhibits
Exhibit No. Description
----------- -----------
10.904 Strategic Alliance Agreement between the Company and
ERIM International, Inc., dated October 20, 1997
(filed as exhibit 10.904 to the Company's Registration
Statement on Form S-4 (No. 333-47333) and incorporated
herein by reference)
10.905 Cooperative Development and Service Agreement between
the Company and ERIM International, Inc., dated March
28, 1998 (filed as exhibit 10.905 to the Company's
Registration Statement on Form S-4 (No. 333-47333) and
incorporated herein by reference)
27 Financial Data Schedule
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.
DAEDALUS ENTERPRISES, INC.
Date: June 15, 1998 By:
------------- ------------------------------------------
S. R. Perrino, President & CEO
Date: June 15, 1998 By:
------------- ------------------------------------------
Robert R. Bower,
Chief Financial Officer & Treasurer
14
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
----------- -----------
27 Financial Data Schedule