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 period ended March 31, 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 0-15167
TRANS LEASING INTERNATIONAL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 36-2747735
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
3000 Dundee Road, Northbrook, Illinois 60062
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code (847) 272-1000
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, Par Value $.01 Per Share, of the
Registrant outstanding as of May 10, 1996 was 4,045,375.
- --------------------------------------------------------------------------------
TRANS LEASING INTERNATIONAL, INC.
---------------------------------
INDEX
Page
Number
------
PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
Independent Accountants' Review Report 4
Condensed Consolidated Statements of Operations 5
Three-month and nine-month
periods ended March 31, 1996
and 1995 (unaudited)
Condensed Consolidated Balance Sheets 6
March 31, 1996
and June 30, 1995 (unaudited)
Condensed Consolidated Statements
of Cash Flows 7
Nine-month periods ended
March 31, 1996 and 1995
(unaudited)
Notes to Condensed Consolidated
Financial Statements 8
(unaudited)
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 14
-2-
PART I FINANCIAL INFORMATION
Item 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
-3-
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
- --------------------------------------
To the Stockholders and Board of Directors
Trans Leasing International, Inc.
Northbrook, Illinois
We have reviewed the accompanying condensed consolidated balance sheet of Trans
Leasing International, Inc. (the "Company") as of March 31, 1996, the related
condensed consolidated statements of operations for the three-month and nine-
month periods ended March 31, 1996 and 1995, and the related condensed
consolidated statements of cash flows for the nine-month periods ended March 31,
1996 and 1995. These financial statements are the responsibility of the
Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to such condensed consolidated financial statements for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Trans Leasing International, Inc.
as of June 30, 1995, and the related consolidated statements of operations,
stockholders' equity, and cash flows for the year then ended (not presented
herein); and in our report dated September 1, 1995, we expressed an unqualified
opinion on those consolidated financial statements. In our opinion, the
information set forth in the accompanying condensed consolidated balance sheet
as of June 30, 1995 is fairly stated, in all material respects, in relation to
the consolidated balance sheet from which it has been derived.
DELOITTE & TOUCHE LLP
Chicago, Illinois
May 10, 1996
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TRANS LEASING INTERNATIONAL, INC.
---------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
-----------------------------------------------
(Unaudited)
Three months Nine months
ended ended
March 31 March 31
------------------------ --------------------------
1996 1995 1996 1995
----------- ----------- ------------ ------------
REVENUES:
Lease income $9,049,000 $7,471,000 $25,867,000 $21,832,000
Other 312,000 290,000 941,000 667,000
---------- ---------- ----------- -----------
Total Revenues 9,361,000 7,761,000 26,808,000 22,499,000
COSTS AND EXPENSES:
Interest 4,013,000 3,387,000 11,556,000 9,930,000
General and administrative 3,630,000 2,625,000 9,489,000 7,436,000
Provision for uncollectible accounts 1,297,000 1,133,000 3,854,000 3,239,000
---------- ---------- ----------- -----------
Total Expenses 8,940,000 7,145,000 24,899,000 20,605,000
---------- ---------- ----------- -----------
EARNINGS BEFORE INCOME TAXES 421,000 616,000 1,909,000 1,894,000
INCOME TAXES 161,000 236,000 731,000 725,000
---------- ---------- ----------- -----------
NET EARNINGS $ 260,000 $ 380,000 $ 1,178,000 $ 1,169,000
========== ========== =========== ===========
EARNINGS PER COMMON SHARE $.06 $.09 $.29 $.27
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 4,048,600 4,224,900 4,115,000 4,317,500
See notes to condensed consolidated financial statements.
-5-
TRANS LEASING INTERNATIONAL, INC.
---------------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------
(Unaudited)
March 31, June 30,
1996 1995
------------ ------------
ASSETS
------
------------ ------------
CASH $ 4,104,000 $ 3,758,000
RESTRICTED CASH 13,336,000 12,988,000
NET INVESTMENT IN DIRECT FINANCE LEASES:
Future minimum lease payments 255,506,000 219,718,000
Estimated unguaranteed residual value 21,435,000 19,823,000
------------ ------------
276,941,000 239,541,000
Less: Unearned income ( 45,015,000) ( 39,965,000)
Allowance for uncollectible accounts ( 8,570,000) ( 6,482,000)
------------ ------------
223,356,000 193,094,000
- --------------------------- ------------ ------------
LEASE FINANCING RECEIVABLES, less allowance
for uncollectible accounts of $188,000
and $151,000, respectively 5,427,000 4,977,000
PROPERTY AND EQUIPMENT, net of accumulated
depreciation 8,208,000 5,423,000
INCOME TAXES RECOVERABLE 1,401,000 1,464,000
OTHER ASSETS 5,732,000 4,679,000
------------ ------------
TOTAL ASSETS $261,564,000 $226,383,000
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
ACCOUNTS PAYABLE AND ACCRUED EXPENSES $ 9,110,000 $ 7,067.000
NOTES PAYABLE TO FINANCIAL INSTITUTIONS 61,850,000 49,175,000
LEASE-BACKED OBLIGATIONS 141,112,000 119,788,000
SUBORDINATED OBLIGATIONS 20,730,000 21,840,000
DEFERRED INCOME TAXES 2,843,000 2,843,000
------------ ------------
TOTAL LIABILITIES 235,645,000 200,713,000
------------ ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, par value $1.00;
authorized 2,500,000 shares; none issued
Common stock, par value $.01; authorized
10,000,000 shares; issued 4,798,500 shares 48,000 48,000
Additional paid-in capital 9,879,000 9,879,000
Retained earnings 18,279,000 17,471,000
Less: 753,125 and 586,525 shares
respectively, held in treasury, at cost ( 2,287,000) ( 1,728,000)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 25,919,000 25,670,000
------------ ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $261,564,000 $226,383,000
============ ============
See notes to condensed consolidated financial statements.
-6-
TRANS LEASING INTERNATIONAL, INC.
---------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
(Unaudited)
Nine months
ended
March 31
-----------------------------
1996 1995
------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 1,178,000 $ 1,169,000
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Leasing costs, primarily provision for
uncollectible accounts and amortization
of initial direct costs 5,446,000 4,794,000
Depreciation and amortization 1,301,000 532,000
Initial direct costs paid ( 1,966,000) ( 1,760,000)
Changes in:
Accounts payable and accrued expenses 2,043,000 1,386,000
Income taxes recoverable 63,000 1,293,000
Other assets ( 1,118,000) ( 992,000)
Other ( 68,000) ( 13,000)
------------- -------------
Net cash provided by operating activities 6,879,000 6,409,000
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Principal collections on leases 64,989,000 55,258,000
Equipment purchased for leasing ( 96,829,000) ( 76,896,000)
Purchase of lease financing receivables ( 2,631,000) ( 860,000)
Purchase of property and equipment ( 4,426,000) ( 3,413,000)
Disposal of property and equipment 404,000 202,000
------------- -------------
Net cash used in investing activities ( 38,493,000) ( 25,709,000)
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of notes payable to financial institutions 87,950,000 95,600,000
Repayment of notes payable to financial institutions ( 76,385,000) ( 57,257,000)
Issuance of lease-backed obligations 152,864,000 50,453,000
Repayment of lease-backed obligations ( 131,540,000) ( 68,099,000)
Payment of dividends on common stock ( 371,000) ( 50,000)
Purchase of treasury stock ( 558,000) ( 550,000)
------------- -------------
Net cash provided by financing activities 31,960,000 20,097,000
------------- -------------
NET INCREASE IN CASH 346,000 797,000
CASH, beginning of period 3,758,000 3,297,000
------------- -------------
CASH, end of period $ 4,104,000 $ 4,094,000
============ ============
See notes to condensed consolidated financial statements.
-7-
TRANS LEASING INTERNATIONAL, INC.
---------------------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
(Unaudited)
Note A - Financial Statements:
- -----------------------------
The condensed consolidated balance sheet of Trans Leasing
International, Inc. (the "Company") as of March 31, 1996, the condensed
consolidated statements of operations for the three-month and nine-month periods
ended March 31, 1996 and 1995, and the condensed consolidated statements of cash
flows for the nine-month periods ended March 31, 1996 and 1995, have been
prepared by the Company without audit. The condensed consolidated balance sheet
at June 30, 1995, has been taken from the audited financial statements of that
date. In the opinion of management, all adjustments (which include only normal
recurring adjustments) necessary to present fairly the financial position at
March 31, 1996, and the results of operations and cash flows for the periods
presented have been made. The results of operations for the period ended March
31, 1996, are not necessarily indicative of the operating results for the full
year.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been omitted. It is suggested that these financial statements
be read in conjunction with the financial statements and notes thereto included
in the Company's June 30, 1995 annual report to stockholders.
Certain reclassifications have been made to amounts reported in prior
years to conform with the presentation used in the 1996 financial statements.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of reserves and expenses during the
reporting period. Actual results could differ from these estimates.
Note B - Accounting for Interest Rate Collar Agreement:
- ------------------------------------------------------
The Company has an amortizing interest rate collar agreement which
effectively fixes the interest rate on its floating-rate lease-backed notes
issued in October, 1992 at 5.75%. The notional amount of the collar declines
over time to match the scheduled amortization of the related note and, as of
March 31, 1996, was $5,197,522.
Interest received from or paid to the counterparty under this
agreement is netted against or added to interest expense on the Company's
statement of operations. There is no market risk associated with this agreement
as it is used to hedge floating-rate debt. The Company is exposed to potential
non-performance by the counterparty to the interest rate collar agreement,
though the Company does not anticipate non-performance due to the strong
financial position of the counterparty.
-8-
Note C - Subsequent Events:
- --------------------------
On May 6, 1996 the Board of Directors approved the payment of a
quarterly cash dividend in the amount of $.03 per share. The dividend will be
paid on May 31, 1996 to holders of record as of May 20, 1996.
Note D - Commitments:
- --------------------
As of March 31, 1996, the Company had outstanding commitments to
purchase equipment, which it intended to lease, with an aggregate purchase price
of $7.2 million.
Note E - Pending Accounting Standards:
- -------------------------------------
In October 1995, the FASB issued SFAS No. 123, "Accounting for Stock-
Based Compensation", which encourages entities to adopt a fair value based
method of accounting for the compensation cost of employee stock compensation
plans. The statement allows an entity to continue the application of the
accounting method prescribed by APB No. 25, "Accounting for Stock Issued to
Employees", however pro forma disclosures of net income and earnings per share,
as if the fair value based method of accounting defined by this statement had
been applied, are required. The disclosure requirements of this statement will
be adopted in fiscal 1997. Results of operations and financial position will not
be affected by the adoption of this statement.
-9-
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
GENERAL
- -------
The Company's operations are comprised almost exclusively of lease
financing. The Company realizes net earnings to the extent that lease income,
net of a provision for uncollectible accounts, and related costs exceeds
interest expense and general and administrative expense. Interest expense is
the single largest expense of the Company and is a function of the amounts
borrowed by the Company to finance its lease portfolio and the interest rates
associated with those borrowings. The difference between lease income and
interest expense is generally referred to as the "spread" in the portfolio.
Substantially all of the Company's lease receivables are written at a
fixed rate for a fixed term. The Company's borrowings on the other hand are at
both fixed and variable rates of interest. The Company borrows funds under two
revolving credit facilities at variable interest rates (see "Liquidity and
Capital Resources"). The Company has periodically refinanced its revolving
credit loans through the issuance of debt and lease-backed obligations in both
the institutional private placement and public markets. To the extent the
Company refinances on a fixed-rate basis, the Company locks in the spread on
that portion of its portfolio.
The Company has experienced growth in the dollar amount of new lease
receivables added to its portfolio during each of the past five fiscal years.
In analyzing the Company's financial statements, it is important to understand
the impact of lease receivable growth during an accounting period on lease
income and net earnings.
For financial reporting purposes, substantially all of the Company's
leases are classified as direct finance leases and are accounted for in
accordance with Statement of Financial Accounting Standards ("SFAS") No. 13,
"Accounting for Leases". The Company accounts for its investment in direct
finance leases by recording on the balance sheet the total minimum lease
payments receivable plus the estimated residual value of leased equipment less
the unearned lease income. Unearned lease income represents the excess of the
total minimum lease payments plus the estimated residual value expected to be
realized at the end of the lease term over the cost of the related equipment.
Unearned lease income is recognized as revenue over the term of the lease by the
effective interest method, i.e., application of a constant periodic rate of
return to the declining net investment in each lease. As a result, during a
period in which the Company realizes growth in new lease receivables, lease
income should also increase, but at a lesser rate.
Initial direct costs incurred in consummating a lease are capitalized
as part of the net investment in direct finance leases and amortized over the
lease term as a reduction in the lease yield. An allowance for doubtful accounts
is provided over the terms of the underlying leases as the leases are determined
to be uncollectible.
-10-
RESULTS OF OPERATIONS
- ---------------------
Lease income increased $4,035,000 (18.5%) in the first nine months of
fiscal 1996 compared with the like period of fiscal 1995, and $1,578,000 (21.1%)
in the third quarter of fiscal 1996 as compared with the third quarter of fiscal
1995. The increase in lease income is due primarily to a 21.5% increase in the
net investment in direct finance leases from March 31, 1995 to March 31, 1996 as
well as increases in lease-related income of $724,000 (45.2%) in the first nine
months of fiscal 1996 and $278,000 (54.5%) in the third quarter of fiscal 1996
as compared with the comparable fiscal 1995 periods.
The growth in the Company's lease portfolio is the result of an
increase in the dollar amount of leases originated. The Company believes that
the dollar amount of leases originated has increased primarily as a result of
its increased marketing and selling activities, greater name recognition of
LeaseCard(R) in the marketplace, the introduction of new products by equipment
manufacturers and reductions in lease rates which have enabled the Company to
attract additional new business. Lease-related income, primarily operating lease
rentals, has increased as a result of the growth in the LeaseCard Auto Group.
Interest expense increased $1,626,000 (16.4%) in the first nine months
of fiscal 1996 and $626,000 (18.5%) in the third quarter of fiscal 1996 versus
the comparable prior year periods due to an increase in the amounts borrowed to
finance the growth in the lease portfolio. Interest expense as a percent of
lease income decreased to 44.7% and 44.4% for the nine months and three months
ended March 31, 1996, respectively, from 45.5% and 45.3% for the comparable
fiscal 1995 periods. Interest expense is reported net of the impact of the
interest rate collar used to fix the rate on the Company's floating-rate lease-
backed notes, the effect of which was to decrease interest expense by $48,000
and $9,000 for the nine-month and three-month periods, respectively, ending
March 31, 1996 and to increase interest expense by $60,000 and $5,000 for the
nine-month and three-month periods, respectively, ending March 31, 1995.
General and administrative expense increased $2,053,000 (27.6%) in the
nine-month period ended March 31, 1996, and $1,005,000 (38.3%) in the third
quarter of fiscal 1996 versus the comparable prior year periods. General and
administrative expense as a percent of lease income increased to 36.7% and 40.1%
for the nine months and three months ended March 31, 1996, respectively, from
34.1% and 35.1% for the comparable fiscal 1995 periods The increase in general
and administrative expense is primarily due to an increase in the number of
employees necessary to accommodate the Company's continued growth.
The provision for uncollectible accounts increased $615,000 (19.0%) in
the nine-month period ended March 31, 1996 and $164,000 (14.5%) in the third
quarter of fiscal 1996 versus the comparable prior year periods. This increase
resulted primarily from the increase in the size of the Company's lease
portfolio. The provision for uncollectible accounts as a percent of lease
income increased to 14.9% from 14.8% for the nine-month period ended March 31,
1996, and decreased to 14.3% from 15.2% for the three-month period ended March
31, 1996 versus the respective comparable prior year periods.
Earnings before income taxes for the first nine months of fiscal 1996
increased .8% to $1,909,000 compared with $1,894,000 for the like period of the
prior year, and decreased 31.7% to $421,000 for the third quarter of fiscal 1996
compared with $616,000 for the like quarter of the prior year.
-11-
Net earnings for the first nine months of fiscal 1996 increased .8% to
$1,178,000, or $.29 per share, compared with $1,169,000, or .27 per share, for
the like period of the prior year. For the third quarter of fiscal 1996, net
earnings decreased 31.6% to $260,000, or $.06 per share, compared with $380,000,
or $.09 per share, for the like quarter of the prior year. The increase in both
earnings before income taxes and net earnings for the nine-month period ending
March 31, 1996 are primarily due to the increase in lease income and the
decrease in interest expense as percentages of lease income, as discussed above.
The comparable decreases for the three-month period ending March 31, 1996 are
due primarily to the greater increase of general and administrative expense,
primarily salaries and benefits from increased staffing levels, relative to
revenue growth.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Company has principally financed its operations, including the
growth of its lease portfolio, through borrowings under its revolving credit
agreements, issuance of debt and lease-backed obligations in both the
institutional private placement and public markets, principal collections on
leases and cash provided from operations.
Net cash used in investing activities, which was $38.5 million in the
first nine months of fiscal 1996 and $25.7 million in the first nine months of
fiscal 1995, generally represents the excess of equipment purchased for leasing
over principal collections on leases. Net cash provided by financing activities
(the excess of borrowings under the revolving credit agreement and issuance of
debt and lease-backed obligations over repayments of these debt instruments) was
$32.0 million in the first nine months of fiscal 1996 and $20.1 million in the
first nine months of fiscal 1995; the remaining funds used in investing
activities were provided by operating cash flows. As of March 31, 1996, the
Company had outstanding commitments to purchase equipment, which it intended to
lease, with an aggregate purchase price of $7.2 million.
The Company borrows under its revolving credit agreements from time to
time to fund its operations. As the Company has approached full utilization
under these agreements, it has sold long-term debt and lease-backed obligations
in both the institutional private placement and public markets and used the
proceeds to reduce its revolving credit borrowings. These long-term debt and
lease-backed obligations are issued either with fixed interest rates or with
floating interest rates combined with interest rate swaps or collars to lock in
a fixed rate. The Company intends to continue to issue long-term debt and
lease-backed obligations with either fixed interest rates or floating interest
rates converted to a fixed-rate through an interest rate swap or collar
agreement, in both the institutional private placement and public markets to
reduce its exposure to floating interest rates associated with revolving credit
borrowings.
On March 29, 1996, the borrowing limit for the securitized revolving
credit facility for TL Funding Corp. IV ("TLFC IV", a wholly-owned special
purpose financing subsidiary of the Company) was increased from $35 million to
$75 million and the expiration date of the facility was extended from March 31,
1996 to March 30, 1997. As of May 10, 1996, outstanding loans under the TLFC IV
revolving credit facility were $58 million and unused borrowing capacity was $17
million.
-12-
On January 31, 1996, the Company executed a new syndicated revolving
credit facility agented by a money center bank in the amount of $30 million with
an expiration date of January 30, 1997. The initial proceeds from this new
revolving credit facility were used to pay off the Company's existing revolving
credit agreement, to fund new leases, and for general corporate purposes. As of
May 10, 1996, outstanding loans under this new revolving credit agreement were
$13 million and unused borrowing capacity was $17 million.
The Company believes that the unused portions of the credit
facilities, increasing principal payments on leases and continued placements of
debt and lease-backed obligations in the public and/or private markets will
provide adequate capital resources and liquidity for the Company to fund its
operations and debt maturities. The Company was in compliance with all of the
provisions of its loan agreements and its revolving credit facilities at March
31, 1996.
On November 16, 1994, the Board of Directors authorized the repurchase
by the Company of up to 1,000,000 shares of its common stock. The Board
determined that this stock repurchase program is in the best interests of the
Company and its shareholders given the significant discount to book value at
which the Company's common stock is currently trading. As of March 31, 1996,
326,525 shares have been repurchased at a total cost of $1,109,000 under this
ongoing program.
On May 6, 1996 the Board of Directors approved the fifth consecutive
payment of a quarterly cash dividend in the amount of $.03 per share. The
dividend will be paid on May 31, 1996 to holders of record as of May 20, 1996.
-13-
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) List of Exhibits Filed with Form 10-Q:
-------------------------------------
10.43 Amendment No. 1 to Limited Recourse Agreement, dated March 29,
1996, between Registrant and First Union National Bank of
North Carolina.
10.44 Amendment No. 1 to Revolving Credit and Term Loan and Security
Agreement, dated March 29, 1996, between TL Lease Funding
Corp. IV and First Union National Bank of North Carolina.
27 Financial Data Schedule
(b) Reports on Form 8-K
-------------------
No reports were filed on Form 8-K during the fiscal quarter ended
March 31, 1996.
-14-
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.
TRANS LEASING INTERNATIONAL, INC.
---------------------------------
(Registrant)
DATE: May 14, 1996 RICHARD GROSSMAN
----------------- --------------------------------------
Richard Grossman
President, Chief Executive Officer,
Chairman of the Board of Directors
DATE: May 14, 1996 NORMAN SMAGLEY
----------------- --------------------------------------
Norman Smagley
Vice President, Finance, and
Chief Financial Officer
-15-