FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period (12 weeks) ended September 7, 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 1-5418
SUPERVALU INC.
(Exact name of registrant as specified in its Charter)
DELAWARE 41-0617000
................................................................................
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
11840 Valley View Road, Eden Prairie, Minnesota 55344
................................................................................
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (612) 828-4000
.............................
Former name, former address and former fiscal year, if changed since last
report:
N.A.
................................................................................
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
........... ...........
The number of shares outstanding of each of the issuer's classes of Common Stock
as of September 7, 1996 is as follows:
Title of Each Class Shares Outstanding
------------------- ------------------
Common Shares 67,278,139
PART I - FINANCIAL INFORMATION
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Item 1: Financial Statements
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CONSOLIDATED STATEMENTS OF EARNINGS
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SUPERVALU INC. and Subsidiaries
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(In thousands, except per share data)
Second Quarter (12 Weeks) Ended
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September 7, 1996 September 9, 1995
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NET SALES $3,778,745 $3,779,397
COSTS AND EXPENSES:
Cost of sales 3,398,505 3,427,689
Selling and administrative expenses 291,616 265,350
Amortization of goodwill 4,193 4,053
Interest
Interest expense 31,171 32,771
Interest income 3,601 4,503
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Interest expense, net 27,570 28,268
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Total costs and expenses 3,721,884 3,725,360
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EARNINGS BEFORE EQUITY IN EARNINGS
OF SHOPKO AND INCOME TAXES 56,861 54,037
EQUITY IN EARNINGS OF SHOPKO 1,798 861
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EARNINGS BEFORE INCOME TAXES 58,659 54,898
PROVISION FOR INCOME TAXES
Current 18,292 5,562
Deferred 4,503 16,058
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Income tax expense 22,795 21,620
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NET EARNINGS $ 35,864 $ 33,278
===================================================
NET EARNINGS PER COMMON SHARE $ .53 $ .49
Weighted average number of common
shares outstanding 67,466 68,181
Dividends declared per common share $ .250 $ .245
Supplemental information:
After-tax LIFO (expense) $ (1,120) $ (2,525)
All data subject to year-end audit. See notes to consolidated financial statements.
2
PART I - FINANCIAL INFORMATION
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Item 1: Financial Statements
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CONSOLIDATED STATEMENTS OF EARNINGS
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SUPERVALU INC. and Subsidiaries
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(In thousands, except per share data)
Year-to-date (28 Weeks) Ended
-----------------------------------------------------
September 7, 1996 September 9, 1995
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Net sales
Costs and expenses: $ 8,757,506 $ 8,752,434
Cost of sales 7,897,853 7,940,385
Selling and administrative expenses 656,060 609,946
Amortization of goodwill 9,784 9,510
Interest
Interest expense 72,534 76,890
Interest income 8,628 11,595
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Interest expense, net 63,906 65,295
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Total costs and expenses 8,627,603 8,625,136
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Earnings before equity in earnings
of ShopKo and income taxes 129,903 127,298
Equity in earnings of ShopKo 4,446 3,329
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Earnings before income taxes 134,349 130,627
Provision for income taxes
Current 45,777 31,266
Deferred 6,726 20,132
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Income tax expense 52,503 51,398
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Net earnings $ 81,846 $ 79,229
================================================
Net earnings per common share $ 1.21 $ 1.15
Weighted average number of common
shares outstanding 67,475 68,795
Dividends declared per common share $ .495 $ .480
Supplemental information:
After-tax LIFO income (expense) $ 1,670 $ (2,317)
All data subject to year-end audit. See notes to consolidated financial statements.
3
CONSOLIDATED BALANCE SHEETS
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SUPERVALU INC. and Subsidiaries Second Quarter as of Fiscal Year End
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(In thousands) September 7, September 9, February 24,
Assets 1996 1995 1996
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Current Assets
Cash and cash equivalents $ 6,501 $ 5,469 $ 5,215
Receivables, less allowance for losses of $17,417 at
September 7, 1996, $27,884 at September 9, 1995, and
$22,064 at February 24, 1996 378,031 406,794 380,611
Inventories 1,082,294 1,029,077 1,029,911
Other current assets 121,604 123,397 137,972
-------------------------------------------------------
Total current assets 1,588,430 1,564,737 1,553,709
Long-term notes receivable 49,076 70,241 36,731
Long-term investment in direct financing leases 71,429 70,870 74,185
Property, plant and equipment
Land 144,284 168,958 146,535
Buildings 949,573 900,827 903,621
Property under construction 30,267 45,939 53,775
Leasehold improvements 143,707 137,858 137,551
Equipment 1,057,940 966,161 988,963
Assets under capital leases 299,955 215,241 270,549
-------------------------------------------------------
2,625,726 2,434,984 2,500,994
Less accumulated depreciation and amortization
Owned property, plant and equipment 929,003 844,745 855,429
Assets under capital leases 53,218 43,098 45,399
-------------------------------------------------------
Net property, plant and equipment 1,643,505 1,547,141 1,600,166
Investment in ShopKo 195,180 182,927 193,975
Goodwill 499,883 505,196 499,688
Other assets 247,962 217,335 225,049
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Total assets $ 4,295,465 $ 4,158,447 $ 4,183,503
=======================================================
Liabilities and Stockholders' Equity
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Current Liabilities
Notes payable $ 113,914 $ 134,673 $ 158,027
Accounts payable 1,031,870 990,019 965,444
Current maturities of long-term debt 12,634 10,181 8,483
Current obligations under capital leases 21,434 18,580 17,955
Other current liabilities 178,239 176,651 176,793
-------------------------------------------------------
Total current liabilities 1,358,091 1,330,104 1,326,702
Long-term debt 1,147,169 1,208,042 1,144,600
Long-term obligations under capital leases 321,235 245,319 300,962
Deferred income taxes 43,910 - 37,076
Other liabilities 165,696 196,625 157,987
Stockholders' equity
Preferred stock 5,908 5,908 5,908
Common stock 75,335 75,335 75,335
Capital in excess of par value 12,951 12,708 12,737
Retained earnings 1,385,270 1,282,949 1,336,942
Treasury stock, at cost (220,100) (198,543) (214,746)
-------------------------------------------------------
Total stockholders' equity 1,259,364 1,178,357 1,216,176
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Total liabilities and stockholders' equity $ 4,295,465 $ 4,158,447 $ 4,183,503
=======================================================
Quarterly data subject to year-end audit.
See notes to consolidated financial statements.
4
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
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SUPERVALU INC. and Subsidiaries
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(In thousands, except per share data)
Capital in
Preferred Common Excess of Treasury Retained
Stock Stock Par Value Stock Earnings Total
- -----------------------------------------------------------------------------------------------------------------------------
Balances at February 25, 1995 $ 5,908 $ 75,335 $ 12,717 $ (137,245) $1,236,507 $ 1,193,222
Net earnings - - - - 166,433 166,433
Sales of common stock
under option plans - - (84) 3,458 - 3,374
Cash dividends declared
on common stock -
$.970 per share - - - - (65,998) (65,998)
Compensation under employee
incentive plans - - 104 (869) - (765)
Purchase of shares for treasury - - - (80,090) - (80,090)
- -----------------------------------------------------------------------------------------------------------------------------
Balances at February 24, 1996 5,908 75,335 12,737 (214,746) 1,336,942 1,216,176
Net earnings - - - - 81,846 81,846
Sales of common stock
under option plans - - 100 1,533 - 1,633
Cash dividends declared
on common stock -
$.495 per share - - - - (33,518) (33,518)
Compensation under employee
incentive plans - - 114 348 - 462
Purchase of shares for treasury - - - (7,235) - (7,235)
- ------------------------------------------------------------------------------------------------------------------------------
Balances at September 7, 1996 $ 5,908 $ 75,335 $ 12,951 $(220,100) $ 1,385,270 $ 1,259,364
==============================================================================================================================
Interim data subject to year-end audit. See notes to consolidated financial statements.
5
CONSOLIDATED STATEMENTS OF CASH FLOWS
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SUPERVALU INC. and Subsidiaries
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(In thousands)
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Year-to-date
(28 weeks ended)
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September 7, September 9,
1996 1995
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CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 81,846 $ 79,229
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Equity in earnings of ShopKo (4,446) (3,329)
Dividends received from ShopKo 3,241 3,241
Depreciation and amortization 121,963 116,077
Provision for losses on receivables 2,716 1,811
Gain on sale of property, plant and equipment (1,585) (7,458)
Deferred income taxes 6,726 20,132
Treasury shares contributed to employee incentive plan 23 66
Changes in assets and liabilities:
Receivables 1,430 (25,147)
Inventory (49,147) 80,714
Other current assets 16,689 14,120
Direct finance leases 5,048 4,317
Accounts payable 57,382 (2,269)
Other liabilities 7,226 (21,578)
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NET CASH PROVIDED BY OPERATING ACTIVITIES 249,112 259,926
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Cash flows from investing activities
Additions to long-term notes receivable (28,211) (16,739)
Payments received on long-term notes receivable 15,866 19,592
Proceeds from sale of property, plant and equipment 20,496 69,874
Purchase of property, plant and equipment (126,452) (120,121)
Business acquisitions, net of cash acquired (4,996) -
Other investing activities (24,380) (10,270)
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NET CASH USED IN INVESTING ACTIVITIES (147,677) (57,664)
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Cash flows from financing activities
Net reduction of short-term notes payable (44,113) (91,495)
Repayment of long-term debt (4,683) (6,238)
Reduction of obligations under capital leases (12,278) (9,721)
Proceeds for purchase of common stock under option plans 1,372 747
Dividends paid (33,212) (32,736)
Payments for purchase of treasury stock (7,235) (62,189)
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NET CASH USED IN FINANCING ACTIVITIES (100,149) (201,632)
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Net increase in cash and cash equivalents 1,286 630
Cash and cash equivalents at beginning of year 5,215 4,839
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CASH AND CASH EQUIVALENTS AT END OF SECOND QUARTER $ 6,501 $ 5,469
===================================================================================================================================
All data subject to year-end audit. See notes to consolidated financial statements.
6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Accounting Policies
- -------------------
The summary of significant accounting policies is included in the notes to
consolidated financial statements in the 1996 annual report of SUPERVALU INC.
("SUPERVALU" or the "company").
Restructuring
- -------------
A restructuring charge of $204.8 million was recognized in the third quarter
of fiscal 1995. During the second quarter of fiscal 1997, the company utilized
approximately $15 million of the reserve primarily for losses on disposition
of property and carrying costs in both the food distribution and retail food
segments. The balance of the reserve as of September 7, 1996 was $94 million.
ShopKo Stores, Inc. Sale
- ------------------------
On September 9, 1996 the company announced that it had agreed to sell its 14.7
million shares of ShopKo Stores, Inc. under an agreement to combine ShopKo and
Phar-Mor, Inc. under a holding company, Cabot Noble, Inc. Under the terms of
the agreement, the company will receive approximately $223 million in cash and
short-term notes and approximately $25 million in common stock, which represents
approximately a 6 percent interest in Cabot Noble. The company expects to
realize a gain on the transaction which is expected to close in the fourth
quarter.
Statement of Registrant
- -----------------------
The data presented herein is unaudited but, in the opinion of management,
includes all adjustments necessary for a fair presentation of the consolidated
financial position of the company and its subsidiaries at September 7, 1996 and
September 9, 1995 and the results of the company's operations and cash flows for
the periods then ended. These interim results are not necessarily indicative of
the results of the fiscal years as a whole.
A limited review of this data has been performed by the company's independent
certified public accountants, Deloitte & Touche LLP. A copy of their report is
attached as an exhibit to this report.
7
Item 2: Management's Discussion and Analysis of Financial Condition and
Results of Operations
RESULTS OF OPERATIONS
Net earnings improved 8% in the quarter, driven by strong performance in retail
food. Net sales remained level, and the company continued significant focus and
investment in ADVANTAGE related activities. The following table sets forth items
from the company's Consolidated Statements of Earnings as percentages of net
sales:
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Second Quarter Year-to-Date
(12 weeks) Ended (28 weeks) Ended
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Fiscal Fiscal Fiscal Fiscal
1997 1996 1997 1996
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Net sales 100.00% 100.00% 100.00% 100.00%
Cost of sales (89.94) (90.69) (90.18) (90.72)
Selling and administrative expenses (7.83) (7.13) (7.61) (7.08)
Interest expense (.83) (.87) (.83) (.88)
Interest income .10 .12 .10 .13
- ----------------------------------------------------------------------------------------------------------------
Earnings before equity in earnings of ShopKo,
and income taxes 1.50 1.43 1.48 1.45
Equity in earnings of ShopKo .05 .02 .05 .04
Provision for income taxes (.60) (.57) (.60) (.58)
- ----------------------------------------------------------------------------------------------------------------
Net earnings .95% .88% .93% .91%
================================================================================================================
NET SALES
Net sales were even with last year for the quarter and year-to-date. The flat
sales trend was the result of a 7.6% and 6.2% increase in retail food sales for
the quarter and year-to-date, respectively, offset by a 1.5% and 1.0% decline in
food distribution sales for the quarter and year-to-date, respectively.
Food distribution sales decreased due to competitive market conditions at the
wholesale and retail levels, the liquidation of a major customer and lost sales
from the closing of underperforming corporate-owned retail stores. This effect
was partially mitigated by the addition of new retail customers in food
distribution and the growth of Save-A-Lot limited assortment stores. Food price
inflation, as measured by the company, was .6% and 1.0% for the quarter and
year-to-date, respectively.
Retail food sales increased over last year due to new store openings and an
increase in same-store sales of 2.8% and 3.6% for the quarter and year-to-date,
respectively. The same-store sales increase was fueled by improved performance
in the limited assortment stores and strong merchandising refocus in certain
operations. The increase in retail sales was partially offset by the closing of
underperforming corporate-owned retail stores in the prior fiscal year pursuant
to the restructuring plan.
8
Net Sales by Segment
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(In thousands) Second Quarter (12 weeks)
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September 7, 1996 September 9, 1995
Net Sales % of Total Net Sales % of Total
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Food distribution $ 3,310,689 87.6 % $ 3,362,238 89.0 %
Retail food 1,085,125 28.7 1,008,391 26.6
Less: Eliminations (617,069) (16.3) (591,232) (15.6)
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Total net sales $ 3,778,745 100.0 % $ 3,779,397 100.0 %
================================================================================================================
Net Sales by Segment
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(In thousands) Year-to-Date (28 weeks)
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September 7, 1996 September 9, 1995
Net Sales % of Total Net Sales % of Total
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Food distribution $ 7,729,600 88.3 % $ 7,808,365 89.2 %
Retail food 2,410,111 27.5 2,269,280 25.9
Less: Eliminations (1,382,205) (15.8) (1,325,211) (15.1)
- ----------------------------------------------------------------------------------------------------------------
Total net sales $ 8,757,506 100.0 % $ 8,752,434 100.0 %
================================================================================================================
Gross Profit
Gross profit as a percentage of net sales increased to 10.1% and 9.8% in the
quarter and year-to-date, respectively, compared with 9.3% for the same periods
last year. The increases were due principally to the growing proportion within
the company's total sales mix of the higher-margined retail food business. Food
distribution gross profit margin increased for the quarter and year-to-date due
primarily to a reduction in LIFO expense. Retail food gross profit margin
increased for the quarter and year-to-date as a result of pricing adjustments
from price modeling, changed promotional practices, improved product mix and the
closing of underperforming corporate-owned retail stores.
Selling and administrative expenses
Selling and administrative expenses were 7.8% and 7.6% of net sales for the
quarter and year-to-date, respectively, compared with 7.1% for the same periods
last year. The higher percentages were primarily due to the increased proportion
of the company's retail food segment which operates at a higher selling and
administrative expense percentage than the food distribution segment and
continuing ADVANTAGE project expenses. Food distribution selling and
administrative expenses as a percent of net sales were higher than last year due
to increased systems development costs associated with ADVANTAGE and the impact
of fixed expenses as a percent of slightly decreased sales. Retail food selling
and administrative expenses as a percent of net sales were consistent with last
year.
9
The company has integrated many of the ADVANTAGE activities into its regular
business, consequently these expenses are no longer broken out from other
selling and administrative expenses. The continuing ADVANTAGE expenses related
to project implementation costs including, but not limited to, increased systems
development costs, regional organizational realignment costs, employee training
and relocation, consultants costs and retailer training and promotional
programs.
Under ADVANTAGE, during fiscal 1997 the company has opened the Anniston, Alabama
prototype regional distribution facility and has begun the following:
distributing general merchandise and health and beauty care products from the
Anniston facility to most of the customers in the Southeast region;
reconfiguring the existing local distribution centers in the Southeast region
to achieve additional cost efficiencies; constructing the Midwest regional
distribution facility; training retailers for the category management program in
the Midwest and Central regions; and selecting stores for a category management
pilot in the Southeast region. During the quarter, the company also continued
its Activity Based Sell rollout efforts in the Midwest region.
OPERATING EARNINGS
The company's pre-tax operating earnings (earnings before interest, corporate
expenses, equity in earnings of ShopKo Stores, Inc. ("ShopKo"), and taxes)
increased slightly to $89.6 million in the quarter from $89.0 million last year
and were $206.1 million year-to-date compared with $206.2 million last year.
Food distribution operating earnings decreased 10.0% to $70.7 million and 11.6%
to $159.1 million in the quarter and year-to-date, respectively, due to higher
ADVANTAGE related expenses and the general softness in sales, partially offset
by a reduction in LIFO expense. Retail food operating earnings increased 80.3%
to $19.0 million and 78.6% to $47.0 million in the quarter and year-to-date,
respectively, due to strong gross margin resulting from pricing, promotional and
product mix changes and the closing of underperforming corporate-owned retail
stores, as well as an increase in sales.
INTEREST EXPENSE AND INCOME
Interest expense decreased to $31.1 and $72.5 million for the quarter and
year-to-date, respectively, compared with $32.8 and $76.9 million for the same
periods last year, reflecting a reduction in debt levels and slightly lower
short-term interest rates. Interest income decreased to $3.6 and $8.6 million
for the quarter and year-to-date, respectively, compared with $4.5 and $11.6
million for the same periods last year, primarily due to the reduction of notes
receivable as a result of the sale of notes in the ordinary course of business.
EQUITY IN EARNINGS OF SHOPKO
SUPERVALU's share of ShopKo net earnings increased to $1.8 million and $4.4
million in the quarter and year-to-date, respectively, compared with $.9 million
and $3.3 million for the same periods last year. As reported by ShopKo, sales
increased 19.2% to $498.5 million and net earnings increased 109.8% for the
second quarter compared with last year. The increase in net earnings was due to
strong sales related to the ProVantage prescription benefit management business
and an increase in comparable store sales of 6.4% for the quarter.
10
INCOME TAXES
The effective tax rate decreased to 38.9% and 39.1% in the quarter and year-to-
date, respectively, compared with 39.4% for the same periods last year. The
decrease in the effective tax rate was due to the increased contribution from
ShopKo.
NET EARNINGS
Net earnings were $35.9 and $81.8 million for the quarter and year-to-date,
respectively, compared with $33.3 and $79.2 million for the same periods last
year. Net earnings were positively impacted by improved retail food gross
margin which more than offset increased expenses related to the ADVANTAGE
project. Although ADVANTAGE initiatives are generating benefits, the company
anticipates spending under ADVANTAGE to exceed benefits through fiscal 1997
with a positive contribution from this project in fiscal 1998. The company
will continue to assess the costs and benefits anticipated under the ADVANTAGE
program as part of its annual budget and planning process.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Internally generated funds, principally from the company's food distribution
business, continued to be the major source of capital for liquidity and capital
growth. Cash provided from operations year-to-date was $249.1 million compared
with $259.9 million last year. The slight decrease was due to increased
inventory levels primarily at the retail locations resulting from new store
openings, partially offset by a corresponding increase in accounts payable. The
decrease was also partly offset by increased levels of other liabilities and a
reduction in receivables. Cash provided from operations was primarily used to
finance capital expenditures of $126.4 million, repay short-term notes payable
of $44.1 million and pay dividends of $33.2 million.
During the quarter, the Board of Directors rescinded the previous treasury stock
purchase program and approved a new treasury stock purchase program authorizing
the company to repurchase up to 5.0 million shares to fund stock related
compensation plans. The company has repurchased 258,000 shares at a cost of
$7.2 million under the new program as of the end of the second quarter. There
were no treasury stock purchases under the old program during fiscal 1997.
On September 9, 1996 the company announced that it had agreed to sell its 14.7
million shares of ShopKo Stores, Inc. under an agreement to combine ShopKo and
Phar-Mor, Inc. under a holding company, Cabot Noble, Inc. Under the terms of the
agreement, the company will receive approximately $223 million in cash and
short-term notes and approximately $25 million in common stock, which represents
approximately a 6 percent interest in Cabot Noble. The company expects to
realize a gain on the transaction which is expected to close in the fourth
quarter. The use of the proceeds from the transaction may include growing the
existing food distribution and retail businesses through internal initiatives or
acquisitions, buying back company stock and paying off debt.
11
SUPERVALU will continue to use short-term and long-term debt as a supplement to
internally generated funds to finance its activities. The company has a $400
million "shelf registration" in effect pursuant to which the company could issue
$242.5 million of additional debt securities. A $400 million revolving credit
agreement also is in place and expires in May 2000. Short-term commercial paper
totaling $100 million has been classified as long-term debt as the company has
the ability and intent to renew these obligations beyond one year. Maturities of
debt issued will depend on management's views with respect to the relative
attractiveness of interest rates at the time of issuance.
The company's financial position and long-term debt ratings remain strong, with
a BBB+ rating from Standard and Poor's Ratings Group. On October 10, 1996
Moody's Investors Services, Inc. lowered its rating on the company's long-term
debt to Baa1 from A3 and confirmed the commercial paper rating at P-2. Moody's
Investors Services, Inc. announced that the downgrade reflected the slower than
expected benefits accruing from the ADVANTAGE project in the context of
challenging competitive conditions in the grocery wholesaling industry. This
change does not impair the company's ability to obtain financing and is expected
to have only a minimal impact on the company's borrowing costs in the future.
The company's investment grade ratings, the available credit facilities and
internally-generated funds provide the company with the financial flexibility to
meet liquidity needs.
Cautionary statements for purposes of the Safe Harbor Provisions of the Private
Securities Litigation Reform Act of 1995
The information in this 10Q includes forward-looking statements. Important risks
and uncertainties that could cause actual results to differ materially from
those discussed in such forward looking statements are detailed in Exhibit 99.1
to the company's Annual Report on Form 10K, for the Year Ended February 24,
1996; other risks or uncertainties may be detailed from time to time in the
company's future Securities and Exchange Commission filings.
12
PART II - OTHER INFORMATION
---------------------------
Item 6. Exhibits and Reports on Form 8-K.
- ------- ---------------------------------
(a) Exhibits filed with this Form 10-Q:
(10)a. First Amendment of SUPERVALU STORES, INC. Nonqualified
Supplemental Executive Retirement Plan.
(10)b. SUPERVALU INC. Non-Employee Directors Deferred Stock Plan.
(10)c. Amendments to SUPERVALU INC. Deferred Compensation Plan and
SUPERVALU INC. Executive Deferred Compensation Plan II.
(15) Letters from Deloitte & Touche regarding unaudited interim
financial information.
(27) Financial Data Schedule containing a summary of financial
information extracted from the Consolidated Balance Sheets as
of September 7, 1996.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the quarter.
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.
SUPERVALU INC. (Registrant)
By:\s\Isaiah Harris
---------------------------------
Isaiah Harris
Date: October 22, 1996 Vice President & Controller
(Principal Accounting Officer
and duly authorized
officer of Registrant)
13