1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the 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: 001-13003
SILVERLEAF RESORTS, INC.
(Exact name of registrant as specified in its charter)
TEXAS 75-2259890
(State of incorporation) (I.R.S. Employer
Identification No.)
1221 RIVER BEND DRIVE, SUITE 120
DALLAS, TEXAS 75247
(Address of principal executive offices, including zip code)
214-631-1166
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Number of shares of common stock outstanding of the issuer's Common Stock, par
value $0.01 per share, as of May 10, 2000: 12,889,417
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SILVERLEAF RESORTS, INC.
INDEX
Page
------
PART I. FINANCIAL INFORMATION (Unaudited)
Item 1. Condensed Consolidated Statements of Income for the three months
ended March 31, 2000 and 1999........................................ 1
Condensed Consolidated Balance Sheets as of March 31, 2000
and December 31, 1999................................................ 2
Condensed Consolidated Statement of Shareholders' Equity for the
three months ended March 31, 2000.................................... 3
Condensed Consolidated Statements of Cash Flows for the three
months ended March 31, 2000 and 1999................................. 4
Notes to the Condensed Consolidated Financial Statements............. 5
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations................................................ 8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.................................................... 11
Item 6. Exhibits and Reports on Form 8-K..................................... 11
Signatures........................................................... 12
3
SILVERLEAF RESORTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share and per share amounts)
(Unaudited)
Three Months Ended
March 31,
----------------------------
2000 1999
------------ ------------
REVENUES:
Vacation Interval sales $ 53,886 $ 41,328
Sampler sales 1,297 700
------------ ------------
Total sales 55,183 42,028
Interest income 8,769 5,666
Interest income from affiliates 8 12
Management fee income 81 900
Other income 865 474
------------ ------------
Total revenues 64,906 49,080
COSTS AND OPERATING EXPENSES:
Cost of Vacation Interval sales 9,442 5,769
Sales and marketing 30,527 20,685
Provision for uncollectible notes 5,388 4,133
Operating, general and administrative 7,307 5,368
Other expense 934 753
Depreciation and amortization 1,781 1,205
Interest expense 6,478 3,282
------------ ------------
Total costs and operating expenses 61,857 41,195
Income before provision for income taxes 3,049 7,885
Provision for income taxes (1,174) (3,036)
------------ ------------
NET INCOME $ 1,875 $ 4,849
============ ============
NET INCOME PER COMMON SHARE:
BASIC $ 0.15 $ 0.38
============ ============
DILUTED $ 0.15 $ 0.38
============ ============
WEIGHTED AVERAGE SHARES OUTSTANDING:
BASIC 12,889,417 12,889,417
============ ============
DILUTED 12,889,417 12,889,417
============ ============
See notes to condensed consolidated financial statements.
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SILVERLEAF RESORTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
(Unaudited)
March 31, December 31,
ASSETS 2000 1999
----------- ------------
Cash and cash equivalents $ 12,211 $ 4,814
Restricted cash 903 903
Notes receivable, net of allowance for uncollectible notes of
$35,942 and $32,326, respectively 316,312 286,581
Amounts due from affiliates 7,405 6,596
Inventories 116,937 112,810
Land, equipment, buildings, and utilities, net 51,596 51,050
Prepaid and other assets 17,321 17,203
--------- ---------
TOTAL ASSETS $ 522,685 $ 479,957
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Accounts payable and accrued expenses $ 16,116 $ 15,539
Unearned revenues 5,902 5,601
Income taxes payable 518 185
Deferred income taxes, net 28,902 28,251
Notes payable and capital lease obligations 233,162 194,171
Senior subordinated notes 75,000 75,000
--------- ---------
Total Liabilities 359,600 318,747
--------- ---------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Common stock, par value $0.01 per share, 100,000,000
shares authorized, 13,311,517 shares issued, and
12,889,417 shares outstanding 133 133
Additional paid-in capital 109,339 109,339
Retained earnings 58,612 56,737
Treasury stock, at cost (422,100 shares) (4,999) (4,999)
--------- ---------
Total Shareholders' Equity 163,085 161,210
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 522,685 $ 479,957
========= =========
See notes to condensed consolidated financial statements.
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SILVERLEAF RESORTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(in thousands, except share and per share amounts)
(Unaudited)
Common Stock
---------------------------
Number of $0.01 Additional Treasury Stock
Shares Par Paid-in Retained ------------------------
Issued Value Capital Earnings Shares Cost Total
--------------- ---------- ---------- ---------- ---------- ---------- ----------
January 1, 2000 13,311,517 $ 133 $ 109,339 $ 56,737 (422,100) $ (4,999) $ 161,210
Net income -- -- -- 1,875 -- -- 1,875
--------------- ---------- ---------- ---------- ---------- ---------- ----------
March 31, 2000 13,311,517 $ 133 $ 109,339 $ 58,612 (422,100) $ (4,999) $ 163,085
=============== ========== ========== ========== ========== ========== ==========
See notes to condensed consolidated financial statements.
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SILVERLEAF RESORTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
Three Months Ended
March 31,
------------------------
2000 1999
---------- -----------
OPERATING ACTIVITIES:
Net income $ 1,875 $ 4,849
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation and amortization 1,780 1,205
Deferred income taxes 651 1,332
Increase (decrease) in cash from changes in
assets and liabilities:
Amounts due from affiliates (809) (921)
Inventories (4,127) (11,014)
Prepaid and other assets (195) 1,484
Accounts payable and accrued expenses 577 6,669
Unearned revenues 301 600
Income taxes payable 333 (2,953)
-------- --------
Net cash provided by operating activities 386 1,251
-------- --------
INVESTING ACTIVITIES:
Purchases of land, equipment, buildings, and utilities (471) (7,491)
Proceeds from sales of land, equipment, buildings, and utilities -- 4,494
Notes receivable, net (29,731) (24,123)
-------- --------
Net cash used in investing activities (30,202) (27,120)
-------- --------
FINANCING ACTIVITIES:
Proceeds from borrowings from unaffiliated entities 51,123 37,380
Payments on borrowings to unaffiliated entities (13,910) (9,626)
-------- --------
Net cash provided by financing activities 37,213 27,754
-------- --------
Net increase in cash 7,397 1,885
CASH AND CASH EQUIVALENTS:
Beginning of period 4,814 11,355
-------- --------
End of period $ 12,211 $ 13,240
======== ========
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid $ 4,654 $ 1,432
Income taxes paid $ 190 $ 4,657
Equipment acquired under capital lease or note $ 1,778 $ 4,596
See notes to condensed consolidated financial statements.
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SILVERLEAF RESORTS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - BACKGROUND
These condensed consolidated financial statements of Silverleaf Resorts, Inc.
and subsidiaries ("the Company") presented herein do not include certain
information and disclosures required by accounting principles generally
accepted in the United States of America for complete financial statements.
However, in the opinion of management, all adjustments considered necessary for
a fair presentation have been included. Operating results for the three months
ended March 31, 2000 are not necessarily indicative of the results that may be
expected for the year ending December 31, 2000.
These condensed consolidated financial statements should be read in conjunction
with the audited consolidated financial statements and footnotes included in
the Company's Form 10-K for the year ended December 31, 1999 (File No.
001-13003) as filed with the Securities and Exchange Commission. The accounting
policies used in preparing these condensed consolidated financial statements
are the same as those described in such Form 10-K. Certain previously reported
amounts, however, have been reclassified to conform to the 2000 presentation.
SFAS No. 133 -- In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standard No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS No. 133"). SFAS No. 133, as amended,
is effective for fiscal years beginning after June 15, 2000 and will be adopted
for the period beginning January 1, 2001. SFAS No. 133 requires that all
derivative instruments be recorded on the balance sheet at their fair value.
Changes in the fair value of the derivatives are recorded each period in
current earnings or other comprehensive income depending on whether a
derivative is designated as part of a hedge transaction, and if it is, the type
of hedge transaction. The impact of SFAS No. 133 on the Company's results of
operations, financial position, or cash flows will be dependent on the level
and types of derivative instruments the Company will have entered into at the
time the standard is implemented.
NOTE 2 - EARNINGS PER SHARE
For the three months ended March 31, 2000 and 1999, the weighted average shares
outstanding assuming dilution was anti-dilutive.
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NOTE 3 - DEBT
Loans, notes payable, capital lease obligations, and senior subordinated notes
as of March 31, 2000 and December 31, 1999 (in thousands):
March 31, December 31,
2000 1999
--------- ------------
$60 million revolving loan agreement, which contains certain financial
covenants, due December 2000, principal and interest payable
from the proceeds obtained on customer notes receivable pledged
as collateral for the note, at an interest rate of LIBOR plus 2.55%............. $ 32,524 $ 39,623
$70 million revolving loan agreement, capacity reduced by amounts
outstanding under the $10 million inventory loan agreement, which
contains certain financial covenants, due August 2004, principal and
interest payable from the proceeds obtained on customer notes
receivable pledged as collateral for the note, at an interest rate of
LIBOR plus 2.65%................................................................ 47,590 45,680
$75 million revolving loan agreement, which contains certain financial
covenants, due April 2005, principal and interest payable from the
proceeds obtained on customer notes receivable pledged as collateral
for the note, at an interest rate of LIBOR plus 3.00%........................... 72,722 62,215
$75 million revolving loan agreement, which contains certain financial
covenants, due November 2005, principal and interest payable from the
proceeds obtained on customer notes receivable pledged as collateral
for the note, at an interest rate of LIBOR plus 2.67%........................... 29,553 14,150
$30 million revolving loan agreement, which contains certain financial
covenants, due September 2006, principal and interest payable from the
proceeds obtained on customer notes receivable pledged as collateral
for the note, at an interest rate of Prime...................................... 20,244 6,678
$10 million inventory loan agreement, which contains certain financial
covenants, due August 2002, interest payable monthly, at an interest
rate of LIBOR plus 3.50%........................................................ 9,936 9,937
$10 million inventory loan agreement, which contains certain financial
covenants, due November 2001, interest payable monthly, at an interest
rate of LIBOR plus 3.25%........................................................ 3,948 --
Various notes, due from April 2000 through November 2009, collateralized
by various assets with interest rates ranging from 4.20% to 14.0%............... 4,100 4,088
--------- ---------
Total notes payable....................................................... 220,617 182,371
Capital lease obligations......................................................... 12,545 11,800
--------- ---------
Total notes payable and capital lease obligations......................... 233,162 194,171
10 1/2% senior subordinated notes, due 2008, interest payable semi-
annually on April 1 and October 1, guaranteed by all of the Company's
present and future domestic restricted subsidiaries............................. 75,000 75,000
--------- ---------
$ 308,162 $ 269,171
========= =========
At March 31, 2000, LIBOR rates were from 6.13% to 6.29%, and the Prime rate was
9.00%. At December 31, 1999, LIBOR rates were from 5.82% to 6.00%, and the
Prime rate was 8.50%.
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NOTE 4 - SUBSIDIARY GUARANTEES
All subsidiaries of the Company have guaranteed the $75.0 million of senior
subordinated notes. The separate financial statements and other disclosures
concerning each guaranteeing subsidiary (each, a "Guarantor Subsidiary") are
not presented herein because the Company's management has determined that such
information is not material to investors. The guarantee of each Guarantor
Subsidiary is full and unconditional and joint and several. Each Guarantor
Subsidiary is a wholly owned subsidiary of the Company, and together comprise
all direct and indirect subsidiaries of the Company.
Combined summarized operating results of the Guarantor Subsidiaries for the
three months ended March 31, 2000 and 1999, are as follows (in thousands):
March 31,
-----------------------
2000 1999
----------- ----------
Revenues $ -- $ 1
Expenses -- (45)
--------- ----------
Net loss $ -- $ (44)
========= ==========
Combined summarized balance sheet information as of March 31, 2000 for the
Guarantor Subsidiaries is as follows (in thousands):
March 31,
2000
----------
Other assets $ 10
----------
Total assets $ 10
==========
Investment by parent (includes equity
and amounts due to parent) $ 10
----------
Total liabilities and equity $ 10
==========
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Certain matters discussed throughout this Form 10-Q filing are forward looking
statements that are subject to risks and uncertainties that could cause actual
results to differ materially from those projected. Such risks and uncertainties
include, but are not limited to, those discussed in the Company's Form 10-K for
the year ended December 31, 1999 (File No. 001-13003).
The Company currently owns and/or operates 22 resorts in various stages of
development. These resorts offer a wide array of country club-like amenities,
such as golf, swimming, horseback riding, boating, and many organized
activities for children and adults. The Company represents an owner base of
over 106,000. The condensed consolidated financial statements of the Company
include the accounts of Silverleaf Resorts, Inc. and its subsidiaries, all of
which are wholly owned.
RESULTS OF OPERATIONS
The following table sets forth certain operating information for the Company.
Three Months Ended
March 31,
------------------
2000 1999
-------- --------
As a percentage of total revenues:
Vacation Interval sales 83.0% 84.2%
Sampler sales 2.0% 1.4%
----- -----
Total sales 85.0% 85.6%
Interest income 13.5% 11.6%
Management fee income 0.1% 1.8%
Other income 1.4% 1.0%
----- -----
Total revenues 100.0% 100.0%
As a percentage of Vacation Interval sales:
Cost of Vacation Interval sales 17.5% 14.0%
Provision for uncollectible notes 10.0% 10.0%
As a percentage of total sales:
Sales and marketing 55.3% 49.2%
As a percentage of total revenues:
Operating, general and administrative 11.3% 10.9%
Depreciation and amortization 2.7% 2.5%
Other expense 1.4% 1.5%
As a percentage of interest income:
Interest expense 73.8% 57.8%
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
Revenues
Revenues for the quarter ended March 31, 2000 were $64.9 million, representing
a $15.8 million or 32.2% increase over revenues of $49.1 million for the
quarter ended March 31, 1999. The increase was primarily due to a $12.6 million
increase in sales of Vacation Intervals and a $3.1 million increase in interest
income. The strong increase in Vacation Interval sales primarily resulted from
an increase in the number of upgrade sales for the first quarter of 2000 versus
the same period of 1999, improved closing percentages at several sales offices,
and increased sales prices.
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In the first quarter of 2000, the number of Vacation Intervals sold, exclusive
of upgraded Vacation Intervals, increased 19.2% to 4,624 from 3,879 in the same
period of 1999; the average price per interval increased 10.4% to $8,993 from
$8,146. Total interval sales for the first quarter of 2000 included 1,666
biennial intervals (counted as 833 Vacation Intervals) compared to 1,417 (709
Vacation Intervals) in the first quarter of 1999. The Company also increased
sales of upgraded intervals through the continued implementation of marketing
and sales programs focused on selling upgraded intervals to the Company's
existing Vacation Interval owners. In the first quarter of 2000, the 2,934
upgraded Vacation Intervals were sold at an average price of $4,193 compared to
2,248 upgraded Vacation Intervals sold at an average price of $4,329 during the
comparable 1999 period.
Sampler sales increased $597,000 to $1.3 million for the quarter ended March
31, 2000, compared to $700,000 for the same period in 1999. The increase
primarily resulted from a $544,000 cumulative reclassification between sampler
sales and related expenses in the first quarter of 1999, in order to restate
sampler unearned revenues and sampler deferred expenses separately on the
balance sheet.
Interest income increased 54.6% to $8.8 million for the quarter ended March 31,
2000, from $5.7 million for the same period of 1999. This increase primarily
resulted from a $118.2 million increase in notes receivable, net of allowance
for uncollectible notes, since March 31, 1999, due to increased sales.
Management fee income, which consists of management fees collected from the
resorts' management clubs, can not exceed the management clubs' net income.
Management fee income decreased $819,000 for the first quarter of 2000, as
compared to the first quarter of 1999, due to increased operating expenses at
the management clubs.
Other income consists of water and utilities income, condominium rental income,
marina income, golf course and pro shop income, and other miscellaneous items.
Other income increased $391,000 to $865,000 for the first quarter of 2000
compared to $474,000 for the same period of 1999. The increase primarily
relates to growth in water and utilities income and increased golf course and
pro shop income at two resorts.
Cost of Sales
Cost of sales as a percentage of Vacation Interval sales increased to 17.5% in
the first quarter of 2000, from 14.0% for the same period of 1999. As the
Company continues to deplete its inventory of low-cost Vacation Intervals
acquired primarily in 1995 and 1996, the Company's sales mix has shifted to
more recently constructed units, which were built at a higher average cost per
Vacation Interval. Hence, the cost of sales as a percentage of Vacation
Interval sales has increased compared to 1999. This increase, however, was
partially offset by increased sales prices since the first quarter of 1999.
Sales and Marketing
Sales and marketing costs as a percentage of total sales increased to 55.3% for
the quarter ended March 31, 2000, from 49.2% for the same period of 1999. Due
to recent growth rates and implementation of new leads generation programs, the
Company experienced relatively higher marketing costs in the first quarter of
2000. The Company increased its headcount at the call centers significantly
during the first quarter of 2000, which created inefficiencies due to temporary
lack of available training resources. In addition, the Company has moved
towards reliance on national retail chains for its leads generation efforts, in
addition to the traditional local programs. The transition to national programs
has been slower in generating leads than originally planned. A major focus of
Company management in 2000 is to improve the efficiencies of the marketing
process, which will bring sales and marketing expenses more in line with
expectations.
Provision for Uncollectible Notes
The provision for uncollectible notes as a percentage of Vacation Interval
sales was unchanged at 10.0% for the first quarter of 2000, compared to the
first quarter of 1999.
Operating, General and Administrative
Operating, general and administrative expenses as a percentage of total
revenues increased to 11.3% for the quarter
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ended March 31, 2000, as compared to 10.9% for the quarter ended March 31, 1999.
The increase is primarily attributable to increased legal expenses, increases in
payroll taxes, employee benefits, and workers' compensation related to Company
growth, and an increase in title and recording fees due to increased borrowings
against pledged notes receivable.
Other Expense
Other expense consists of water and utilities expenses, golf course and pro
shop expenses, marina expenses, and other miscellaneous expenses. Other expense
as a percentage of total revenues remained relatively flat at 1.4% for the
quarter ended March 31, 2000, as compared to 1.5% for the quarter ended March
31, 1999. The $181,000 increase in other expense primarily relates to increased
water and utilities expense.
Depreciation and Amortization
Depreciation and amortization expense as a percentage of total revenues was
relatively flat at 2.7% for the quarter ended March 31, 2000, compared to 2.5%
for the quarter ended March 31, 1999. Overall, depreciation and amortization
expense increased $576,000 for the first quarter of 2000, as compared to 1999,
primarily due to investments in automated dialers, investments in telephone
systems, and investments in a central marketing facility, which opened in
September 1999.
Interest Expense
Interest expense as a percentage of interest income increased to 73.8% for the
first quarter of 2000, from 57.8% for the same period of 1999. This increase is
primarily the result of interest expense related to increased borrowings
against pledged notes receivable. Also, the Company's weighted average cost of
borrowing increased slightly in the first quarter of 2000 compared to the first
quarter of 1999.
Income before Provision for Income Taxes
Income before provision for income taxes decreased to $3.0 million for the
quarter ended March 31, 2000, as compared to $7.9 million for the quarter ended
March 31, 1999, as a result of the above mentioned operating results.
Provision for Income Taxes
Provision for income taxes as a percentage of income before provision for
income taxes remained flat at 38.5% in the first quarter of 2000, as compared
to the first quarter of 1999.
Net Income
Net income decreased to $1.9 million for the quarter ended March 31, 2000, as
compared to $4.8 million for the quarter ended March 31, 1999, as a result of
the above mentioned operating results.
LIQUIDITY AND CAPITAL RESOURCES
SOURCES OF CASH. The Company generates cash primarily from down payments on the
sale of Vacation Intervals, sampler sales, collections of principal and
interest on customer notes receivable from Vacation Interval owners, management
fees, and resort and utility operations. During the three months ended March
31, 2000, cash provided by operations was $386,000, compared to cash provided
by operating activities of $1.3 million for the same period of 1999. The
decrease in cash provided by operating activities was primarily a result of a
decrease in net income and the timing of operational payments. The Company
typically receives a 10% down payment on sales of Vacation Intervals and
finances the remainder by receipt of a seven to ten year customer promissory
note. The Company generates cash from financing of customer notes receivable
(i) by borrowing at an advance rate of 70% to 85% of eligible customer notes
receivable and (ii) from the spread between interest received on customer notes
receivable and interest paid on related borrowings. Because the Company uses
significant amounts of cash in the development and marketing of Vacation
Intervals, but collects cash on customer notes receivable over a seven-year to
ten-year period, borrowing against receivables has historically been a
necessary part of normal operations.
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For the three months ended March 31, 2000 and 1999, cash provided by financing
activities was $37.2 million and $27.8 million, respectively. The increase in
net cash provided by financing activities was primarily due to increased
borrowings against pledged notes receivable during the three months ended March
31, 2000, compared to the same period of 1999. As of March 31, 2000, the
Company's credit facilities provide for loans of up to $320.0 million. At March
31, 2000, approximately $216.5 million of principal and interest related to
advances under the credit facilities was outstanding. For the three months
ended March 31, 2000, the weighted average cost of funds for all borrowings,
including the senior subordinated debt, was approximately 9.4%.
The Company believes that with respect to its current operations and capital
commitments, its borrowing capacity under existing third-party lending
agreements, together with cash generated from operations and future borrowings,
will be sufficient to meet the Company's working capital and capital
expenditure needs through the year ended December 31, 2000. The Company will
continue to review the possibility of extending its borrowing capacity with
existing lenders or issuing additional debt or mortgage-backed securities to
finance future acquisitions, refinance debt, finance mortgage receivables, and
provide for other working capital purposes.
USES OF CASH. Investing activities typically reflect a net use of cash as a
result of loans to customers in connection with the Company's Vacation Interval
sales, capital additions, and property acquisitions. Net cash used in investing
activities for the three months ended March 31, 2000 and 1999, was $30.2
million and $27.1 million, respectively. The increase was primarily due to the
increased level of customer notes receivable resulting from higher sales volume
and $4.5 million of cash received in the first quarter of 1999 related to sales
of equipment.
PART II: OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is currently subject to litigation arising in the normal course of
its business. From time to time, such litigation includes claims regarding
employment, tort, contract, truth-in-lending, the marketing and sale of
Vacation Intervals, and other consumer protection matters. Litigation has been
initiated from time to time by persons seeking individual recoveries for
themselves, as well as, in some instances, persons seeking recoveries on behalf
of an alleged class. In the judgement of the Company, none of these lawsuits or
claims against the Company, either individually or in the aggregate, is likely
to have a material adverse effect on the Company, its business, results of
operations, or financial condition.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10.1 Contract of sale dated September 23, 1999 among the Company and George
Woelfel, individually and as Co-Trustee, and PNC Bank, N.A., as
Co-Trustee of the Woefel PNC Trust.
27.0 Financial Data Schedule.
- ----------
(b) Reports on Form 8-K
None.
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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.
Dated: May 10, 2000 By: /s/ ROBERT E. MEAD
---------------------------
Robert E. Mead
Chairman of the Board and
Chief Executive Officer
Dated: May 10, 2000 By: /s/ HARRY J. WHITE, JR.
---------------------------
Harry J. White, Jr.
Chief Financial Officer
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EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
- ------- -----------
10.1 Contract of sale dated September 23, 1999 among the Company
and George Woelfel, individually and as Co-Trustee, and PNC
Bank, N.A., as Co-Trustee of the Woefel PNC Trust.
27.0 Financial Data Schedule.