1
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 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_____
ROWAN COMPANIES, INC.
---------------------
(Exact name of registrant as specified in its charter)
Delaware 1-5491 75-0759420
- ------------------------------- --------------- -------------------
(State or other jurisdiction of Commission File (I.R.S. Employer
incorporation or organization) Number Identification No.)
5450 Transco Tower, 2800 Post Oak Boulevard, Houston, Texas 77056-6196
- ----------------------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(713) 621-7800
-------------------------------------------------------
Registrant's telephone number, including area code
Inapplicable
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
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 of common stock, $.125 par value, outstanding at April 30,
1998 was 86,947,657.
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ROWAN COMPANIES, INC.
INDEX
Page No.
--------
PART I. Financial Information:
Consolidated Balance Sheet --
March 31, 1998 and December 31, 1997........................2
Consolidated Statement of Income --
Three Months Ended March 31, 1998
and 1997....................................................4
Consolidated Statement of Cash Flows --
Three Months Ended March 31, 1998
and 1997....................................................5
Notes to Consolidated Financial Statements..................6
Management's Discussion and Analysis
of Financial Condition and Results
of Operations...............................................8
PART II. Other Information:
Submission of Matters to a Vote
of Security Holders........................................12
Exhibits and Reports on Form 8-K...........................12
3
4
PART I. FINANCIAL INFORMATION
ROWAN COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(IN THOUSANDS EXCEPT SHARE AMOUNTS)
March 31, December 31,
1998 1997
------------ ------------
ASSETS (Unaudited)
CURRENT ASSETS:
Cash and cash equivalents ................................ $ 116,617 $ 108,332
Receivables - trade and other ............................ 124,527 133,627
Inventories - at cost:
Raw materials and supplies ............................. 72,922 69,621
Work-in-progress ....................................... 29,688 25,974
Finished goods ......................................... 5,718 6,321
Prepaid expenses ......................................... 9,263 7,694
Deferred tax assets ...................................... 39,609 60,809
------------ ------------
Total current assets .......................... 398,344 412,378
------------ ------------
INVESTMENT IN AND ADVANCES TO 49% OWNED COMPANY ............ 25,737
------------ ------------
PROPERTY, PLANT AND EQUIPMENT - at cost:
Drilling equipment ....................................... 972,429 965,292
Aircraft and related equipment ........................... 208,977 202,044
Manufacturing plant and equipment ........................ 65,688 60,902
Construction in progress ................................. 242,564 195,996
Other property and equipment ............................. 102,521 94,476
------------ ------------
Total ......................................... 1,592,179 1,518,710
Less accumulated depreciation and amortization ........... 852,922 841,550
------------ ------------
Property, plant and equipment - net ......... 739,257 677,160
------------ ------------
OTHER ASSETS AND DEFERRED CHARGES .......................... 5,796 6,860
------------ ------------
TOTAL ......................................... $ 1,143,397 $ 1,122,135
============ ============
See Notes to Consolidated Financial Statements.
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March 31, December 31,
1998 1997
---------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY (Unaudited)
CURRENT LIABILITIES:
Accounts payable - trade ........................................................ $ 24,116 $ 22,839
Other current liabilities ....................................................... 52,616 58,687
---------- ----------
Total current liabilities ............................................... 76,732 81,526
---------- ----------
LONG-TERM DEBT - less current maturities ............................................ 238,135 256,150
---------- ----------
OTHER LIABILITIES ................................................................... 50,390 50,457
---------- ----------
DEFERRED CREDITS:
Income taxes .................................................................... 74,757 74,956
Gain on sale/leaseback transactions ............................................. 5,160 5,948
---------- ----------
Total deferred credits .................................................. 79,917 80,904
---------- ----------
STOCKHOLDERS' EQUITY:
Preferred stock, $1.00 par value:
Authorized 5,000,000 shares issuable in series:
Series III Preferred Stock, authorized 10,300 shares, none outstanding
Series A Junior Preferred Stock, authorized
1,500,000 shares, none issued
Common stock, $.125 par value:
Authorized 150,000,000 shares; issued 88,333,951 shares at March 31, 1998
and 88,162,101 shares at December 31, 1997 .................................... 11,042 11,020
Additional paid-in capital .......................................................... 414,156 411,812
Retained earnings ................................................................... 275,510 232,751
Less cost of 1,457,919 treasury shares .............................................. 2,485 2,485
---------- ----------
Total stockholders' equity .............................................. 698,223 653,098
---------- ----------
TOTAL ................................................................... $1,143,397 $1,122,135
========== ==========
See Notes to Consolidated Financial Statements.
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ROWAN COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
For The Three Months
Ended March 31,
------------------------
1998 1997
--------- ---------
(Unaudited)
REVENUES:
Drilling services ...................................... $ 124,225 $ 89,603
Manufacturing sales and services ....................... 37,477 36,644
Aviation services ...................................... 22,212 18,518
--------- ---------
Total .......................................... 183,914 144,765
--------- ---------
COSTS AND EXPENSES:
Drilling services ...................................... 48,511 65,971
Manufacturing sales and services ....................... 30,924 32,085
Aviation services ...................................... 23,580 20,064
Depreciation and amortization .......................... 11,879 11,367
General and administrative ............................. 4,503 4,292
--------- ---------
Total .......................................... 119,397 133,779
--------- ---------
INCOME FROM OPERATIONS ..................................... 64,517 10,986
--------- ---------
OTHER INCOME (EXPENSE):
Interest expense ....................................... (4,277) (7,344)
Less interest capitalized .............................. 3,425 1,941
Gain on disposals of property, plant and equipment ..... 477 894
Interest income ........................................ 1,702 1,316
Other - net ............................................ 131 72
--------- ---------
Other income (expense) - net ................... 1,458 (3,121)
--------- ---------
INCOME BEFORE INCOME TAXES ................................. 65,975 7,865
Provision for income taxes ............................. 23,216 234
--------- ---------
INCOME BEFORE EXTRAORDINARY CHARGE ......................... 42,759 7,631
Extraordinary charge from early redemption of debt ..... 3,478
--------- ---------
NET INCOME (Note 4)......................................... $ 42,759 $ 4,153
========= =========
PER SHARE OF COMMON STOCK (Note 5):
Basic:
Income before extraordinary charge ................... $ .49 $ .09
Extraordinary charge from early redemption of debt ... .04
--------- ---------
Net income .......................................... $ .49 $ .05
========= =========
Diluted:
Income before extraordinary charge ................... $ .48 $ .09
Extraordinary charge from early redemption of debt ... .04
--------- ---------
Net income .......................................... $ .48 $ .05
========= =========
See Notes to Consolidated Financial Statements.
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ROWAN COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(IN THOUSANDS)
For The Three Months
Ended March 31,
----------------------------
1998 1997
----------- -----------
(Unaudited)
CASH PROVIDED BY (USED IN):
Operations:
Net income .................................................................. $ 42,759 $ 4,153
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization ............................................ 11,879 11,367
Gain on disposals of property, plant and equipment ....................... (477) (894)
Compensation expense ..................................................... 1,210 1,236
Change in sale/leaseback payable ......................................... (2,191) (4,536)
Amortization of sale/leaseback gain ...................................... (788) (789)
Provision for pension and postretirement benefits ........................ 1,882 2,248
Deferred income taxes .................................................... 21,001 (100)
Extraordinary charge from early redemption of debt ....................... 3,550
Other - net .............................................................. 36 1,319
Changes in current assets and liabilities:
Receivables- trade and other ............................................. 9,100 5,510
Inventories .............................................................. (5,811) (3,746)
Other current assets ..................................................... (1,569) 7,700
Current liabilities ...................................................... (3,845) 9,003
Net changes in other noncurrent assets and liabilities ...................... 1,213 (300)
----------- -----------
Net cash provided by operations ................................................ 74,399 35,721
----------- -----------
Investing activities:
Property, plant and equipment additions ..................................... (68,524) (38,774)
Proceeds from disposition of investment in 49% owned company ................ 19,550
Repayments from affiliates .................................................. 225
Proceeds from disposals of property, plant and equipment .................... 668 1,802
----------- -----------
Net cash used in investing activities .......................................... (48,306) (36,747)
----------- -----------
Financing activities:
Proceeds from borrowings .................................................... 18,141 20,709
Repayments of borrowings .................................................... (36,156) (80)
Other - net ................................................................. 207 96
----------- -----------
Net cash provided by financing activities ...................................... (17,808) 20,725
----------- -----------
INCREASE IN CASH AND CASH EQUIVALENTS ............................................. 8,285 19,699
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD .................................... 108,332 97,225
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD .......................................... $ 116,617 $ 116,924
=========== ===========
See Notes to Consolidated Financial Statements.
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ROWAN COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The consolidated financial statements of the Company included herein
have been prepared without audit pursuant to generally accepted
accounting principles and the rules and regulations of the Securities
and Exchange Commission. Certain information and notes have been
condensed or omitted pursuant to such rules and regulations and the
Company believes that the disclosures included herein are adequate. It
is suggested that these condensed financial statements be read in
conjunction with the financial statements and related notes included in
the Company's 1997 Annual Report to Stockholders incorporated by
reference in the Form 10-K for the year ended December 31, 1997.
2. In the opinion of the Company, the accompanying unaudited consolidated
financial statements contain all adjustments and reclassifications,
which are of a normal recurring nature, necessary to present fairly its
financial position as of March 31, 1998 and December 31, 1997, and the
results of its operations and its cash flows for the three months ended
March 31, 1998 and 1997.
3. The results of operations for the three months ended March 31, 1998 are
not necessarily indicative of the results to be expected for the full
year.
4. The Company's adoption, effective January 1, 1998, of Statements of
Financial Accounting Standards No. 130, "Reporting Comprehensive
Income", and No. 132, "Employers' Disclosures about Pension and Other
Postretirement Benefits", did not materially affect its financial
statement disclosure. For the periods presented herein, the Company has
no items of "other comprehensive income" as defined in Statement 130.
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5. Computation of basic and diluted earnings per share is as follows (in
thousands except per share amounts):
For The
Three Months Ended
March 31,
-------------------------
1998 1997
---------- ----------
Weighted average shares of common
stock outstanding ........................................ 86,846 85,625
Stock options and related (treasury stock method) .......... 1,550 1,789
Shares issuable from assumed conversion of floating
rate subordinated debentures.............................. 966 1,373
---------- ----------
Weighted average shares for diluted
earnings per share calculation ........................... 89,362 88,787
========== ==========
Income before extraordinary charge ......................... $ 42,759 $ 7,631
Extraordinary charge from early redemption of debt.......... 3,478
---------- ----------
Net income for basic calculation ........................... 42,759 4,153
Subordinated debenture interest, net of
income tax effect ........................................ 79
---------- ----------
Net income for diluted calculation ......................... $ 42,759 $ 4,232
========== ==========
Basic earnings per share:
Income before extraordinary charge ...................... $ .49 $ .09
Extraordinary charge .................................... .04
---------- ----------
Net income .............................................. $ .49 $ .05
========== ==========
Diluted earnings per share:
Income before extraordinary charge ...................... $ .48 $ .09
Extraordinary charge .................................... .04
---------- ----------
Net income .............................................. $ .48 $ .05
========== ==========
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ROWAN COMPANIES, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
RESULTS OF OPERATIONS
Three Months Ended March 31, 1998 Compared to
Three Months Ended March 31, 1997
The Company achieved net income of $42.8 million in the first quarter
of 1998 compared to $4.2 million in the same period of 1997. The improved
performance resulted primarily from the continued strengthening of offshore
drilling day rates and improvement in the Company's manufacturing operations.
The previous period's results included charges of $20 million related to
concluding the Company's turnkey drilling business and $3.5 million from
redeeming early certain 11 7/8% Senior Notes.
A comparison of the revenues and operating profit (loss) from drilling,
manufacturing, aviation and consolidated operations for the first quarters of
1998 and 1997, respectively, is reflected below (dollars in thousands):
Drilling Manufacturing Aviation Consolidated
--------------------- --------------------- --------------------- ----------------------
1998 1997 1998 1997 1998 1997 1998 1997
--------- --------- -------- --------- -------- --------- --------- ---------
Revenues $ 124,225 $ 89,603 $ 37,477 $ 36,644 $ 22,212 $ 18,518 $ 183,914 $ 144,765
Percent of Consolidated
Revenues 68% 62% 20% 25% 12% 13% 100% 100%
Operating Profit (Loss)(1) $ 68,271 $ 16,017 $ 5,324 $ 3,696 $ (4,575) $ (4,435) $ 69,020 $ 15,278
- ------------------------------------------------------
(1) Income (loss) from operations before deducting general and administrative
expenses.
As reflected above, the Company's consolidated operating results
increased by more than 350% when comparing the first quarters of 1998 and 1997.
Day rate drilling revenues increased by $34.6 million or 39% as the Company's
offshore fleet achieved 98% utilization during the first quarter of 1998, which
was unchanged from the first quarter of 1997, and a 37% increase in average day
rates between periods. Related expenses increased by $3.0 million, or 7%,
between periods, primarily as a result of compensation increases for operating
personnel.
First quarter 1997 operating results included an approximately $20
million loss from concluding the Company's turnkey drilling operations. The
Company currently has no turnkey wells in progress nor any plans for additional
turnkey work at this time.
The 44% improvement shown above in the Company's manufacturing
profitability between periods primarily reflects the increased contribution of
the marine group. During the quarter, the Company provided design and components
("LeTourneau kit") toward the construction of two new Super 116 Class rigs. Both
kits, which were sold in 1997, should be completed during 1998. The division's
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external backlog grew by about $7 million during the quarter to $64.6 million at
March 31, 1998, a level 62% higher than a year ago. Manufacturing operations
exclude approximately $15.8 million of products and services provided to the
Company's drilling division during the first quarter of 1998, most of which was
attributable to construction progress on Rowan Gorillas V and VI, compared to
$16.9 million in the same period of 1997.
The aviation operating results in both periods reflect the normal
seasonal slowdown in flying activity in Alaska. The Company's disposition in
January 1998 of its 49% interest in the Dutch helicopter joint venture KLM ERA
did not have a material impact on the its first quarter 1998 results of
operations.
Perceptible trends in the offshore drilling markets in which the
Company is currently operating and the number of Company-operated rigs in each
of those markets are as follows:
AREA RIGS PERCEPTIBLE INDUSTRY TRENDS
- ----------------- --------- --------------------------------------------------------------
Gulf of Mexico 14 Continuing high levels of exploration and development activity
North Sea 5 Continuing high levels of drilling activity for jack-up rigs
Eastern Canada 2 Improving demand
The preceding table reflects the relocation in April 1998 of Rowan
Gorilla II to eastern Canada from the Gulf of Mexico.
Perceptible trends in the aviation markets in which the Company is
currently operating and the number of Company-operated aircraft based in each of
those markets are as follows:
AREA AIRCRAFT PERCEPTIBLE INDUSTRY TRENDS
- ----------------- --------- --------------------------------------------------------------
Alaska 68 Normal seasonal improvement
Gulf of Mexico 49 Moderately improving market conditions
The drilling and aviation markets in which the Company competes
frequently experience significant changes in supply and demand. Offshore
drilling utilization and day rates are primarily a function of the demand for
drilling services, as measured by the level of exploration and development
expenditures, and the supply of capable drilling equipment. These expenditures,
in turn, are affected by many factors such as existing and newly discovered oil
and natural gas reserves, political and regulatory policies, seasonal weather
patterns, contractual requirements under leases or concessions, trends in
finding and extraction costs and, probably most influential, oil and natural gas
prices. The Company's aviation operations are also affected by such factors, as
flying in support of offshore energy operations remains a major source of
business and Alaska operations are hampered each winter. The volatile nature of
such factors prevents the Company from being able to accurately predict whether
existing market conditions or the perceptible market trends reflected in the
preceding tables will continue. In response to fluctuating market conditions,
the Company can, as it has done in the past, relocate its drilling rigs and
aircraft from one geographic area to another, but only when such moves are
economically justified. Assuming such conditions and trends prevail, the Company
should continue to experience increased profitability throughout the remainder
of 1998.
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The Company's manufacturing operations are considerably less volatile
than its drilling and aviation operations and, given current backlog levels and
barring unforeseen circumstances, should continue to contribute positive
operating results throughout the remainder of 1998.
LIQUIDITY AND CAPITAL RESOURCES
A comparison of key balance sheet figures and ratios as of March 31,
1998 and December 31, 1997 is as follows (dollars in thousands):
March 31, December 31,
1998 1997
---- ----
Cash and cash equivalents $116,617 $108,332
Current assets $398,344 $412,378
Current liabilities $76,732 $81,526
Current ratio 5.19 5.06
Long-term debt $238,135 $256,150
Stockholders' equity $698,223 $653,098
Long-term debt/total capitalization .25 .28
Reflected in the comparison above are the effects in the first quarter
of 1998 of net cash provided by operations of $74.4 million, capital
expenditures of $68.5 million, proceeds from borrowings of $18.1 million,
proceeds from the disposition of the Company's 49% interest in KLM ERA
Helicopters of $19.6 million and the repayments of borrowings of $36.2 million.
Capital expenditures during the first quarter were primarily related to
construction of Rowan Gorilla V and Rowan Gorilla VI , each being an enhanced
version of the Company's Gorilla Class jack-ups featuring a combination drilling
and production capability. The rigs are being constructed at the Company's
Vicksburg, Mississippi shipyard and should be completed during 1998 and 1999,
respectively. The Company is financing up to $153 million of the cost of Gorilla
V through a 12-year bank loan guaranteed by the Maritime Administration of the
U. S. Department of Transportation under its Title XI Program. At March 31,
1998, the Company had drawn down about $128 million under the facility, $67
million of which bears a fixed interest rate of 6.94% until July 2010 and the
remainder at floating rates averaging 6.3%.
The Company has begun ordering long lead-time items for Rowan Gorilla
VII, the construction of which will begin later this year and is expected to be
completed during 2000. The Company intends to pursue outside financing for
Gorilla VI and Gorilla VII if necessary, but believes that internally generated
working capital may be sufficient to finance construction of both rigs if
operating conditions continue to improve as expected. There can be no assurance
that working capital will be adequate throughout the period required to complete
construction or that outside financing will be available.
The Company estimates remaining 1998 capital expenditures will be
between $150 million and $160 million, including approximately $125-135 million
for Gorillas V, VI and VII. The Company may also spend amounts to acquire
additional aircraft as market conditions justify and to upgrade existing
offshore rigs and manufacturing facilities.
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At March 31, 1998, the Company had available $45 million under a
three-year $155 million bank revolving credit facility. The $110 million
outstanding under the credit line bore interest at 6.09% on March 31, 1998.
In March 1998, the Company repaid the balance of $36.2 million of
promissory notes originally issued in February 1994 in connection with the
acquisition of its manufacturing operations.
Based upon current operating levels and the previously discussed market
trends, management believes that 1998 operations, together with existing working
capital and available financial resources, will generate sufficient cash flow to
sustain planned capital expenditures and debt service requirements at least
through the remainder of 1998.
At March 31, 1998, approximately $115 million of the Company's retained
earnings was available for the payment of dividends under the most restrictive
provisions of the Company's debt agreements.
The Company believes that its exposure to potential year 2000 software
problems is limited and the costs associated with readying its information
systems will not materially impact its financial position or results of
operations. The Company expects to substantially complete modifications to its
information systems during 1998 and will expense such costs as they are
incurred.
This report contains forward looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, including, without limitation,
statements as to the expectations, beliefs and future expected financial
performance of the Company that are based on current expectations and are
subject to certain risks, trends and uncertainties that could cause actual
results to differ materially from those projected by the Company. Among the
factors that could cause actual results to differ materially are the following:
o oil and natural gas prices
o the level of offshore expenditures by energy companies
o the general economy, including inflation
o weather conditions in the Company's principal operating areas
o environmental and other laws and regulations
Other relevant factors have been disclosed in the Company's filings with the
U.S. Securities and Exchange Commission.
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PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
At the Annual Meeting of Stockholders on April 24, 1998, stockholders
elected the three nominees for Class I Director as set forth in the
Company's Proxy Statement relating to the meeting. With respect to such
election, proxies were solicited pursuant to Regulation 14 under the
Securities Exchange Act of 1934 and there was no solicitation in
opposition to such nominees. Of the Company's 86,864,282 shares of
record, 78,251,930 were voted at the meeting in person or by proxy. The
following numbers of votes were cast as to the Class I Director
nominees: H. E. Lentz, 77,616,322 votes for and 635,608 votes withheld;
Wilfred P. Schmoe, 77,580,910 votes for and 671,020 votes withheld; and
Charles P. Siess, Jr., 77,578,573 votes for and 673,357 votes withheld.
Also at the meeting, stockholders approved, for consideration by the
Board of Directors, the following proposals, as set forth in the
Company's Proxy Statement relating to the meeting:
The proposal pertinent to the Rowan Companies, Inc. 1998
Nonemployee Director Stock Option Plan. The proposal received
60,234,906 votes in the affirmative, or 77% of the votes cast,
while 5,643,751 shares, or 7%, were voted against the proposal.
Shares that abstained from voting totaled 12,373,273.
The proposal pertinent to the Rowan Companies, Inc. 1998
Convertible Debenture Incentive Plan. The proposal received
61,695,409 votes in the affirmative, or 79% of the votes cast,
while 4,130,167 shares, or 5%, were voted against the proposal.
Shares that abstained from voting totaled 12,426,354.
The proposal pertinent to amendment and restatement of the Rowan
Companies, Inc. 1988 Nonqualified Stock Option Plan. The proposal
received 45,997,125 votes in the affirmative, or 59% of the votes
cast, while 19,818,654 shares, or 25%, were voted against the
proposal. Shares that abstained from voting totaled 12,436,151.
Item 6. Exhibits and Reports on Form 8-K
(a) The following is a list of Exhibits filed with this Form 10-Q:
10a Restated 1988 Nonqualified Stock Option Plan of the Company
10b 1998 Nonemployee Director Stock Option Plan of the Company
10c 1998 Convertible Debenture Incentive Plan of the Company
27 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Registrant during the
first quarter of fiscal year 1998.
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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.
ROWAN COMPANIES, INC.
(Registrant)
Date: May 13, 1998 /s/ E. E. THIELE
--------------------------------------
E. E. Thiele
Senior Vice President- Finance,
Administration and Treasurer
(Chief Financial Officer)
Date: May 13, 1998 /s/ W. H. WELLS
--------------------------------------
W. H. Wells
Controller
(Chief Accounting Officer)
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INDEX TO EXHIBITS
EXHIBIT DESCRIPTION
NUMBER ------------
- -------
10a Restated 1988 Nonqualified Stock Option Plan of the Company
10b 1998 Nonemployee Director Stock Option Plan of the Company
10c 1998 Convertible Debenture Incentive Plan of the Company
27 Financial Data Schedule