SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly report under section 13 or 15 (d) of the Securities Exchange Act
of 1934 for the quarterly period ended March 31, 2000 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 1-9761
ARTHUR J. GALLAGHER & CO.
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(Exact name of registrant as specified in its charter)
DELAWARE 36-2151613
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Two Pierce Place, Itasca, Illinois 60143-3141
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(Address of principal executive offices) (Zip code)
(630) 773-3800
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(Registrant's telephone number, including area code)
________________________________________________________________________________
(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 outstanding shares of the registrant's Common Stock, $1.00 par
value, as of March 31, 2000 was 37,215,908.
ARTHUR J. GALLAGHER & CO.
INDEX
Page No.
Part I. Financial Information:
Item 1. Financial Statements (Unaudited):
Consolidated Statement of Earnings for the three-month
period ended March 31, 2000 and 1999.................... 3
Consolidated Balance Sheet at March 31, 2000 and
December 31, 1999....................................... 4
Consolidated Statement of Cash Flows for the three-month
period ended March 31, 2000 and 1999.................... 5
Notes to Consolidated Financial Statements................... 6-8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations........... 9-13
Part II. Other Information:
Item 6. Exhibits and Reports on Form 8-K............................. 14
Signatures............................................................. 15
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ARTHUR J. GALLAGHER & CO.
CONSOLIDATED STATEMENT OF EARNINGS
(UNAUDITED)
Three-month period ended
March 31,
2000 1999
-------- --------
(in thousands, except per share data)
Operating Results
Revenues:
Commissions $ 82,115 $ 79,677
Fees 64,167 53,244
Investment income and other 5,988 4,687
-------- --------
Total revenues 152,270 137,608
Expenses:
Salaries and employee benefits 82,066 75,265
Other operating expenses 46,889 41,718
-------- --------
Total expenses 128,955 116,983
-------- --------
Earnings before income taxes 23,315 20,625
Provision for income taxes 8,160 7,149
-------- --------
Net earnings $ 15,155 $ 13,476
======== ========
Net earnings per common share $ .41 $ .37
Net earnings per common and
common equivalent share .39 .35
Dividends declared per common share .23 .20
See notes to consolidated financial statements.
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ARTHUR J. GALLAGHER & CO.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
March 31, December 31,
2000 1999
-------- --------
(in thousands)
ASSETS
Current assets:
Cash and cash equivalents $ 65,935 $ 62,457
Restricted cash 113,161 108,867
Premiums and fees receivable 324,140 365,513
Investment strategies - trading 64,136 63,857
Other 37,324 44,303
-------- --------
Total current assets 604,696 644,997
Marketable securities - available for sale 21,185 20,274
Deferred income taxes and other noncurrent assets 171,325 174,301
Fixed assets 117,439 113,815
Accumulated depreciation and amortization (80,125) (77,219)
-------- --------
Net fixed assets 37,314 36,596
Intangible assets - net 14,031 11,213
-------- --------
$848,551 $887,381
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Premiums payable to insurance companies $436,455 $468,598
Accrued salaries and bonuses 13,428 21,702
Accounts payable and other accrued liabilities 93,705 91,715
Unearned fees 17,175 15,537
Income taxes payable 3,300 8,530
Other 16,233 22,200
-------- --------
Total current liabilities 580,296 628,282
Other noncurrent liabilities 16,631 16,061
Stockholders' equity:
Common stock - issued and outstanding 37,216 shares
in 2000 and 36,988 shares in 1999 37,216 36,988
Capital in excess of par value 1,953 -
Retained earnings 215,172 208,719
Accumulated other comprehensive earnings (loss) (2,717) (2,669)
-------- --------
Total stockholders' equity 251,624 243,038
-------- --------
$848,551 $887,381
======== ========
See notes to consolidated financial statements.
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ARTHUR J. GALLAGHER & CO.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
Three-month period ended
March 31,
2000 1999
-------- --------
(in thousands)
Cash flows from operating activities:
Net earnings $ 15,155 $ 13,476
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Net gain on investments and other (286) (63)
Depreciation and amortization 3,765 3,320
Increase in restricted cash (4,294) (8,909)
Decrease in premiums receivable 46,061 37,218
Decrease in premiums payable (32,143) (15,585)
Increase in trading investments - net (288) (528)
Decrease (increase) in other current assets 6,979 (4,433)
Decrease in accrued salaries and bonuses (8,274) (10,099)
Increase (decrease) in accounts payable and other accrued liabilities 239 (6,217)
Decrease in income taxes payable (5,230) (7,141)
Net change in deferred income taxes (279) 1,416
Other 12,586 5,160
--------- ---------
Net cash provided by operating activities 33,991 7,615
--------- ---------
Cash flows from investing activities:
Purchases of marketable securities (8,610) (13,604)
Proceeds from sales of marketable securities 7,824 13,058
Proceeds from maturities of marketable securities 89 68
Net additions to fixed assets (4,021) (4,337)
Other (16,005) (5,473)
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Net cash used by investing activities (20,723) (10,288)
--------- ---------
Cash flows from financing activities:
Proceeds from issuance of common stock 7,110 5,499
Tax benefit from issuance of common stock 2,970 1,491
Repurchases of common stock (7,364) (11,530)
Dividends paid (7,368) (6,176)
Borrowings on line of credit facilities 20,000 5,000
Repayments on line of credit facilities (25,000) (10,000)
Equity transactions of pooled companies prior to dates of acquisition (138) (2,184)
--------- ---------
Net cash used by financing activities (9,790) (17,900)
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Net increase (decrease) in cash and cash equivalents 3,478 (20,573)
Cash and cash equivalents at beginning of period 62,457 66,311
--------- ---------
Cash and cash equivalents at end of period $ 65,935 $ 45,738
========= =========
Supplemental disclosures of cash flow information:
Interest paid $ 133 $ 222
Income taxes paid 6,980 10,699
See notes to consolidated financial statements.
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ARTHUR J. GALLAGHER & CO.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Nature of Operations and Basis of Presentation
Arthur J. Gallagher & Co. (Gallagher) provides insurance brokerage and risk
management services to a wide variety of commercial, industrial,
institutional and governmental organizations. Commission revenue is
principally generated through the negotiation and placement of insurance
for its clients. Fee revenue is primarily generated by providing other
risk management services including claims management, information
management, risk control services and appraisals in either the
property/casualty market or human resource/employee benefit market.
Gallagher operates in more than 200 offices throughout the United States
and six countries abroad.
The accompanying unaudited consolidated financial statements have been
prepared by Gallagher pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in annual financial statements have been
omitted pursuant to such rules and regulations. Gallagher believes the
disclosures are adequate to make the information presented not misleading.
The unaudited consolidated financial statements included herein are, in the
opinion of management, prepared on a basis consistent with the audited
consolidated financial statements for the year ended December 31, 1999 and
include all adjustments (consisting only of normal recurring adjustments)
necessary for a fair presentation of the information set forth. The
quarterly results of operations are not necessarily indicative of results
of operations for subsequent quarters or the full year. These unaudited
consolidated financial statements should be read in conjunction with the
audited consolidated financial statements and the notes thereto included in
Gallagher's 1999 Annual Report on Form 10-K.
2. Stock Split
In January 2000, the Board of Directors declared a two-for-one stock split
of Gallagher's common stock, effected in the form of a 100% stock dividend
paid on March 15, 2000 to shareholders of record as of March 1, 2000. As a
result of this action, par value of the common stock remains at $1.00 per
share. All information relating to the number of common shares and per
common share amounts appearing in this Quarterly Report on Form 10-Q have
been restated to give retroactive effect to the stock split for all periods
presented.
3. Business Combinations
During the three-month period ended March 31, 2000, Gallagher acquired
substantially all of the net assets of the following companies in exchange
for its common stock: R. L. Youngdahl & Associates, Inc., 69,000 shares;
Rebholz Insurance Agency, Inc., 42,000 shares; Towle Agency, Inc., 37,000
shares; and Powell Insurance Services, Inc., 19,000 shares. These
acquisitions were accounted for as poolings of interests and, except for
one of these acquisitions whose results were not significant, the
consolidated financial statements for all periods prior to the acquisition
dates have been restated to include the operations of these companies.
The following summarizes the restatement of the 1999 consolidated financial
statements to reflect the operations of the 2000 acquisitions (in
thousands, except per share data):
As Attributable
Three-month period Previously to Pooled
ended March 31, 1999 Reported Companies As Restated
-------------------- -------- --------- -----------
Total revenues $136,453 $1,155 $137,608
Net earnings (loss) 13,560 (84) 13,476
Net earnings per common share .37 - .37
Net earnings per common and
common equivalent share .35 - .35
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ARTHUR J. GALLAGHER & CO.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
3. Business Combinations (Continued)
Effective February 29, 2000, Gallagher acquired 60% of the net assets of
MBR Pty Limited, an Australian company engaged in the reinsurance brokerage
and services business in exchange for an initial cash payment of
$2,100,000. This acquisition was accounted for as a purchase, and was not
material to the consolidated financial statements.
4. Earnings Per Share
The following table sets forth the computation of net earnings per common
share and net earnings per common and common equivalent share (in
thousands, except per share data):
Three-month period ended
March 31,
2000 1999
------- -------
Net earnings $15,155 $13,476
======= =======
Weighted average number of common shares outstanding 37,083 36,566
Dilutive effect of stock options using the treasury stock method 2,039 1,844
------- -------
Weighted average number of common and common equivalent shares outstanding 39,122 38,410
======= =======
Net earnings per common share $ .41 $ .37
Net earnings per common and common equivalent share .39 .35
Options to purchase 10,000 and 66,000 shares of common stock were
outstanding during the three-month period ended March 31, 2000 and 1999,
respectively, but were not included in the computation of the dilutive
effect of stock options. These options were excluded from the computations
because the options' exercise prices were greater than the average market
price of the common shares during the respective period and, therefore,
would be antidilutive to earnings per share under the treasury stock
method.
5. Comprehensive Earnings
The components of comprehensive earnings and accumulated other
comprehensive earnings (loss) are as follows (in thousands):
Three-month period ended
March 31,
2000 1999
------- -------
Net earnings $15,155 $13,476
Net change in unrealized loss on available for sale securities,
net of income taxes of ($32) and ($158), respectively (48) (236)
------- -------
Comprehensive earnings $15,107 $13,240
======= =======
Accumulated other comprehensive earnings (loss) at beginning of period
$(2,669) $ (777)
Net change in unrealized loss on available for sale securities,
net of income taxes (48) (236)
-------- -------
Accumulated other comprehensive earnings (loss) at end of period $(2,717) $(1,013)
======= =======
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ARTHUR J. GALLAGHER & CO.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
6. Effect of New Pronouncement
In 1998, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards No. 133 (SFAS 133), "Accounting for
Derivative Instruments and Hedging Activities," which was effective for
fiscal years beginning after June 15, 1999. In June 1999, the FASB issued
Statement of Financial Accounting Standards No. 137, which amends SFAS 133
to defer the effective date to fiscal years beginning after June 15, 2000.
Because of Gallagher's minimal use of derivatives, management does not
anticipate that the adoption of SFAS 133 will have a significant effect on
Gallagher's consolidated operating results or financial position.
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ARTHUR J. GALLAGHER & CO.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS - CONSOLIDATED
Insurance premiums and risk management income reflect the overall pricing
pressure throughout the insurance premium marketplace. Although there are
"pockets" of premium rate increases, Gallagher does not anticipate any dramatic
change in the near future in this extremely competitive environment.
Commission revenues increased by 3% to $82.1 million in the first quarter of
2000 over the respective period in 1999 due principally to new business
production substantially offset by lost business and a reduction in revenue from
national insurance company revenue sharing programs.
Fee revenues increased by 21% or $10.9 million to $64.2 million in the first
quarter of 2000 over the respective period in 1999. This increase reflects new
business production of approximately $7.3 million generated primarily by the
Risk Management Services segment.
Investment income and other increased 28% to $6.0 million in the first quarter
of 2000 over the same period in 1999 due primarily to higher returns on funds
invested with outside fund managers and increased interest income due to
increases in short term interest rates and favorable cash flows over the prior
year.
Salaries and employee benefits increased by $6.8 million or 9%, to $82.1 million
in the first quarter of 2000 over the respective period in 1999 due primarily to
a 3% increase in employee headcount in the period from March 31, 1999 to March
31, 2000, and to salary increases and associated employee benefit costs in 2000.
Other operating expenses increased by 12% to $46.9 million in the first quarter
of 2000 over the respective period in 1999. This increase is substantially due
to rent and related expenses, travel, sales, insurance brokerage expenses and
temporary help. Increases in rent are related to new leases, office expansions
and acquisitions done on a purchase basis. Increases in travel, sales and
insurance brokerage expenses are generally a result of increased sales and sales
initiatives. The temporary help increase is mostly related to the handling of
the new business in the Risk Management Services segment.
The effective income tax rate of 35% for the first quarter of 2000 and 1999 is
equal to the statutory federal rate of 35%. These rates are net of the effect
of tax benefits generated by investments in limited partnerships that operate
qualified affordable housing and alternative energy projects, which are
substantially offset by state and foreign taxes.
Net earnings per common and common equivalent share for the first quarter of
2000 were $.39 compared to $.35 in 1999, an 11% increase and reflects the
leverage of the growth in revenues being higher than the growth in expenses.
This is partially offset by the higher common and common equivalent shares
outstanding in 2000.
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ARTHUR J. GALLAGHER & CO.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
RESULTS OF OPERATIONS - SEGMENT INFORMATION
Financial information relating to Gallagher's operating segments is as follows
(in thousands):
Insurance Risk
Brokerage Management Financial
Services Services Services Corporate Total
-------- --------- ---------- --------- --------
Three-month period ended
- ------------------------
March 31, 2000
- --------------
Total revenues $ 93,927 $55,201 $ 3,142 $ - $152,270
Earnings (loss) before income taxes 13,005 9,052 1,642 (384) 23,315
March 31, 1999
- --------------
Total revenues 89,062 45,894 2,652 - 137,608
Earnings (loss) before income taxes 13,754 6,860 1,376 (1,365) 20,625
Total Identifiable Assets at
- ----------------------------
March 31, 2000 510,725 56,722 232,185 48,919 848,551
- --------------
March 31, 1999 420,010 48,959 208,105 48,122 725,196
- --------------
Insurance Brokerage Services
The Insurance Brokerage Services segment includes Gallagher's retail,
reinsurance and wholesale brokerage operations. Total revenues in the three-
month period ended March 31, 2000 increased 5% to $93.9 million over the same
period in 1999. This increase is due primarily to new business production
substantially offset by lost business and a reduction in revenue from national
insurance company revenue sharing programs.
Earnings before income taxes in the first quarter of 2000 were $13.0 million, a
decrease of 5% from the same period in 1999. This is due primarily to a
reduction in revenue from national insurance company revenue sharing programs
which, by their nature, have a direct impact on earnings, but was substantially
offset by increased earnings related to new business.
Risk Management Services
The Risk Management Services segment includes Gallagher's third party claims
administration operations which are principally engaged in providing claims
management services for Gallagher's clients. Total revenues in the three-month
period ended March 31, 2000 increased 20% to $55.2 million over the respective
period in 1999 due primarily to strong new business production of approximately
$7.6 million.
Earnings before income taxes in the first quarter of 2000 increased over the
first quarter of 1999 by 32% or $2.2 million to $9.1 million due primarily to
the increased revenues discussed above.
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ARTHUR J. GALLAGHER & CO.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
Financial Services
The Financial Services segment is responsible for Gallagher's diversified
investment portfolio which includes investment strategies-trading, marketable
securities-available for sale, tax advantaged investments, investments accounted
for using the equity method of accounting, real estate partnerships and notes
receivable from investees.
In the first quarter of 2000, revenues increased $.5 million to $3.1 million and
earnings before income taxes increased $.3 million to $1.6 million over the
respective period in 1999. These increases are due in large part to higher
returns on funds invested with outside fund managers and on investments
accounted for using the equity method of accounting.
Corporate
Corporate consists of unallocated administrative costs and the provision for
income taxes which is not allocated to Gallagher's operating entities. Revenues
are not recorded in this segment and all costs are generated in the United
States.
FINANCIAL CONDITION AND LIQUIDITY
The insurance brokerage industry is not capital intensive. Gallagher has
historically been profitable, and cash flows from operations and short-term
borrowings under various credit agreements have been sufficient to fund
operating, investment and capital expenditure needs of Gallagher. Cash generated
from operating activities was $34.0 million and $7.6 million for the first
quarter ended March 31, 2000 and 1999, respectively. Because of the variability
related to the timing of premiums and fees receivable and premiums payable, net
cash flows from operations vary substantially from quarter to quarter. Funds
restricted as to Gallagher's use, primarily premiums held as fiduciary funds,
have not been included in determining Gallagher's overall liquidity.
Gallagher maintains a $20.0 million unsecured revolving credit agreement (the
"Credit Agreement") requiring repayment of any loans under the agreement no
later than June 30, 2001. During the three-month period ended March 31, 2000,
Gallagher borrowed and repaid $10.0 million of short term borrowings under the
Credit Agreement. These borrowings were primarily used to finance a portion of
Gallagher's operating and investment activity. As of March 31, 2000, there were
no borrowings outstanding under this agreement. The Credit Agreement requires
the maintenance of certain financial covenants and Gallagher is currently in
compliance with these covenants.
Gallagher also has three line of credit facilities which total $45.0 million in
the aggregate and expire on April 30, 2001. Periodically, Gallagher will make
short-term borrowings under these facilities to meet short-term cash flow needs.
During the three months ended March 31, 2000, Gallagher borrowed $10.0 million
and repaid $15.0 million of short-term borrowings under these facilities, which
was primarily used on a short-term basis to finance a portion of Gallagher's
operating and investment activity. As of March 31, 2000, there was $10.0 million
outstanding under these facilities.
As of March 31, 2000, Gallagher has contingently committed to invest $7.2
million related to two letter of credit arrangements with one of its equity
investments. In addition, Gallagher has guaranteed an aggregate $16.0 million of
funds through letters of credit or other arrangements related to several
investments and insurance programs of Gallagher.
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ARTHUR J. GALLAGHER & CO.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
FINANCIAL CONDITION AND LIQUIDITY (Continued)
Through the first three months of 2000, Gallagher paid $7.4 million in cash
dividends on its common stock. Gallagher's dividend policy is determined by the
Board of Directors and quarterly dividends are declared after considering
Gallagher's available cash from earnings and its known or anticipated cash
needs. On April 14, 2000, Gallagher paid a first quarter dividend of $.23 per
share to shareholders of record as of March 31, 2000, a 15% increase over the
first quarter dividend per share in 1999.
Net capital expenditures were $4.0 million and $4.3 million for each of the
three-month periods ended March 31, 2000 and 1999, respectively. In 2000,
Gallagher expects to make expenditures for capital improvements of approximately
$17.0 million. Capital expenditures by Gallagher are related primarily to office
moves and expansions and updating computer systems and equipment.
In 1988, Gallagher adopted a plan that has been extended through June 30, 2000,
to repurchase its common stock. Through the first three months of 2000,
Gallagher repurchased 301,000 shares at a cost of $7.4 million. The repurchased
shares are held for reissuance in connection with exercises of options under its
stock option plans. Under the provisions of the plan, the Company is authorized
to repurchase approximately 1,284,000 additional shares through June 30, 2000.
Gallagher is under no commitment or obligation to repurchase any particular
amount of common stock and at its discretion may suspend the repurchase plan at
any time.
YEAR 2000
Computer programs that have time sensitive software may have recognized the date
"00" as the Year 1900, rather than the Year 2000, which could have resulted in
system failures or miscalculations causing disruptions of operations (the "Y2K"
problem).
With respect to the Y2K problem, Gallagher completed the necessary modifications
or replacements of its existing software so that computer systems would function
properly in the Year 2000 and beyond. Generally, these modifications and
replacements and the associated costs were contemplated with normal enhancements
and improvements being made in conjunction with updating financial reporting and
operations systems. It is estimated that Gallagher spent less than $1.0 million
in the aggregate from 1997 through 1999 for specific Y2K "fixes" outside the
routine efforts discussed above.
At the time of change from the Year 1999 to the Year 2000 and forward, Gallagher
has neither experienced major internal system failures nor been materially
affected by compliance problems with the systems of business partners, vendors
or clients. Gallagher believes it has successfully weathered any Y2K problems,
but continues to monitor its internal systems and maintains an awareness of any
problems which could arise with the systems of business partners, vendors or
clients.
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ARTHUR J. GALLAGHER & CO.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This quarterly report contains forward-looking statements. Forward-looking
statements made by or on behalf of Gallagher are subject to risks and
uncertainties, including but not limited to the following: Gallagher's
commission revenues are highly dependent on premiums charged by insurers, which
are subject to fluctuation; the property/casualty insurance industry continues
to experience a prolonged soft market (low premium rates) thereby holding down
commissions; lower interest rates will reduce Gallagher's income earned on
invested funds; the alternative insurance market continues to grow which could
unfavorably impact commission and favorably impact fee revenue; Gallagher's
revenues vary significantly from period to period as a result of the timing of
policy inception dates and the net effect of new and lost business production;
the general level of economic activity can have a substantial impact on
Gallagher's renewal business; Gallagher's operating results and financial
position may be adversely impacted by exposure to various market risks such as
interest rate, equity pricing and foreign exchange rates; and Gallagher's Year
2000 compliance efforts depend upon compliance efforts of Gallagher's business
partners, vendors and clients. Gallagher's ability to grow has been enhanced
through acquisitions, which may or may not be available on acceptable terms in
the future and which, if consummated, may or may not be advantageous to
Gallagher. Accordingly, actual results may differ materially from those set
forth in the forward-looking statements.
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ARTHUR J. GALLAGHER & CO.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a. Exhibit 27.0 - Financial Data Schedule (Unaudited).
b. Reports on Form 8-K. No Reports on Form 8-K were filed during the
three-month period ended March 31, 2000.
-14-
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) 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 on the 12th day of May,
2000.
ARTHUR J. GALLAGHER & CO.
/s/ Michael J. Cloherty
------------------------------------------
Michael J. Cloherty
Executive Vice President
Chief Financial Officer
/s/ Jack H. Lazzaro
------------------------------------------
Jack H. Lazzaro
Vice President - Finance
Chief Accounting Officer
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