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FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended: April 30, 2001 Commission File Number: 00-1033864
DOCUCORP INTERNATIONAL, INC.
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(Exact name of registrant as specified in its charter)
Delaware 75-2690838
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification number)
5910 North Central Expressway, Suite 800, Dallas, Texas 75206
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(Address of principal executive offices) (Zip Code)
(214) 891-6500
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(Registrant's telephone number including area code)
Not applicable
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(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) 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 [ ]
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date: Common Stock, $.01
par value, 13,862,044 shares outstanding as of May 31, 2001.
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DOCUCORP INTERNATIONAL, INC.
TABLE OF CONTENTS
QUARTERLY REPORT FORM 10-Q
APRIL 30, 2001
PART I - FINANCIAL INFORMATION
Page
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Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets as of April 30, 2001 and July 31, 2000 2
Interim Consolidated Statements of Operations and Comprehensive
Income for the three and nine months ended April 30, 2001 and 2000 3
Interim Consolidated Statements of Cash Flows for the nine months
ended April 30, 2001 and 2000 4
Notes to Interim Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 7
Item 3. Quantitative and Qualitative Disclosures About Market Risk 11
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 13
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DOCUCORP INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
(UNAUDITED)
April 30, July 31,
2001 2000
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ASSETS
Current assets:
Cash and cash equivalents $ 5,631 $ 4,739
Short-term investments 3,952 7,754
Accounts receivable, net of allowance
of $494 and $600, respectively 16,885 12,018
Other current assets 2,901 3,099
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Total current assets 29,369 27,610
Fixed assets, net of accumulated depreciation
of $7,939 and $6,309, respectively 6,269 6,039
Software, net of accumulated amortization
of $13,014 and $11,277, respectively 7,269 7,259
Goodwill, net of accumulated amortization
of $4,663 and $3,832, respectively 6,123 6,954
Other assets 1,455 1,148
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$ 50,485 $ 49,010
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,842 $ 1,763
Accrued liabilities 4,337 3,626
Deferred revenue 9,617 8,884
Income taxes payable 1,909 308
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Total current liabilities 17,705 14,581
Other long-term liabilities 698 724
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value, 1,000,000 shares
authorized; none issued 0 0
Common stock, $.01 par value, 50,000,000 shares
authorized; 16,593,849 shares issued 166 166
Additional paid-in capital 44,378 44,725
Treasury stock at cost, 2,640,705 and 1,508,777
shares, respectively (11,736) (7,923)
Accumulated deficit (738) (3,187)
Foreign currency translation adjustment 12 (76)
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Total stockholders' equity 32,082 33,705
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$ 50,485 $ 49,010
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See accompanying notes to interim consolidated financial statements.
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DOCUCORP INTERNATIONAL, INC.
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
Three months ended Nine months ended
April 30, April 30,
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2001 2000 2001 2000
-------- -------- -------- --------
REVENUES
ASP hosting $ 3,604 $ 2,656 $ 9,723 $ 7,206
Professional services 5,526 4,707 15,938 13,747
License 2,787 1,801 8,273 5,760
Maintenance and other recurring 4,095 3,851 12,155 11,223
-------- -------- -------- --------
Total revenues 16,012 13,015 46,089 37,936
-------- -------- -------- --------
EXPENSES
ASP hosting 3,277 2,237 9,565 5,900
Professional services 4,331 3,968 12,382 11,826
Product development and support 2,660 2,535 7,948 7,673
Selling, general and administrative 4,002 3,414 11,687 10,249
-------- -------- -------- --------
Total expenses 14,270 12,154 41,582 35,648
-------- -------- -------- --------
Operating income 1,742 861 4,507 2,288
Other income, net 13 143 202 483
-------- -------- -------- --------
Income before income taxes 1,755 1,004 4,709 2,771
Provision for income taxes 930 480 2,260 1,303
-------- -------- -------- --------
Net income $ 825 $ 524 $ 2,449 $ 1,468
======== ======== ======== ========
Other comprehensive income (loss):
Foreign currency translation adjustment 45 (65) 88 (65)
-------- -------- -------- --------
Comprehensive income, net of tax $ 870 $ 459 $ 2,537 $ 1,403
======== ======== ======== ========
Net income per share:
Basic $ 0.06 $ 0.03 $ 0.17 $ 0.10
======== ======== ======== ========
Diluted $ 0.06 $ 0.03 $ 0.16 $ 0.09
======== ======== ======== ========
Weighted average shares outstanding used in the net income per share
calculations:
Basic 14,019 15,217 14,437 15,404
======== ======== ======== ========
Diluted 14,663 16,912 15,160 17,077
======== ======== ======== ========
See accompanying notes to interim consolidated financial statements.
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DOCUCORP INTERNATIONAL, INC.
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
Nine months ended
April 30,
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2001 2000
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CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 2,449 $ 1,468
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 1,649 1,253
Amortization of capitalized software 1,737 1,670
Amortization of goodwill 831 1,017
Provision for doubtful accounts 573 171
Other 10 9
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (5,458) 2,657
(Increase) decrease in other assets (118) 1,347
Increase (decrease) in accounts payable 84 (98)
Increase (decrease) in accrued liabilities 710 (578)
Increase (decrease) in deferred revenue 750 (136)
Increase (decrease) in other liabilities 1,715 (75)
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Total adjustments 2,483 7,237
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Net cash provided by operating activities 4,932 8,705
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CASH FLOWS FROM INVESTING ACTIVITIES
(Purchase) sale of short-term investments 3,802 (867)
Purchase of fixed assets (1,890) (3,694)
Capitalized software development costs (1,747) (1,313)
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Net cash provided by (used in) investing activities 165 (5,874)
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CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments under capital lease obligations 0 (20)
Proceeds from exercise of stock options 19 538
Proceeds from repayment of note receivable from stockholders 0 62
Purchase of treasury stock (4,255) (5,522)
Proceeds from stock issued under Employee Stock Purchase Plan 65 141
Other 0 242
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Net cash used in financing activities (4,171) (4,559)
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Effect of exchange rates on cash flows (34) (30)
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Net increase (decrease) in cash and cash equivalents 892 (1,758)
Cash and cash equivalents at beginning of period 4,739 6,459
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Cash and cash equivalents at end of period $ 5,631 $ 4,701
========= =========
See accompanying notes to interim consolidated financial statements.
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DOCUCORP INTERNATIONAL, INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited interim consolidated financial statements of DocuCorp
International, Inc. and its subsidiaries ("DocuCorp" or the "Company") for the
three and nine month periods ended April 30, 2001 and 2000 have been prepared in
accordance with generally accepted accounting principles in the U.S. for interim
financial information. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. The financial information presented should be read in
conjunction with the Company's annual consolidated financial statements for the
year ended July 31, 2000. The foregoing unaudited interim consolidated financial
statements reflect all adjustments (all of which are of a normal recurring
nature) which are, in the opinion of management, necessary for a fair
presentation of the results of the interim periods. Operating results for the
three and nine months ended April 30, 2001 are not necessarily indicative of the
results to be expected for the year. Certain prior year amounts have been
reclassified to conform to the current year presentation.
NOTE 2 - PRINCIPLES OF CONSOLIDATION
The unaudited interim consolidated financial statements include the accounts of
the Company and its wholly-owned subsidiaries. All significant intercompany
accounts and transactions have been eliminated in consolidation.
The accounts of the Company's foreign subsidiary are maintained in its local
currency. The accompanying unaudited interim consolidated financial statements
have been translated and adjusted to reflect U.S. dollars in accordance with
accounting principles generally accepted in the U.S.
NOTE 3 - NET INCOME PER SHARE
The Company's basic and diluted net income per share are computed in accordance
with Statement of Financial Accounting Standards No. 128, "Earnings Per Share".
Basic net income per share is computed using the weighted average number of
common shares outstanding. Diluted net income per share is computed using the
weighted average number of common shares outstanding and the assumed exercise of
stock options and warrants (using the treasury stock method). Following is a
reconciliation of the shares used in computing basic and diluted net income per
share for the periods indicated (in thousands):
Three months ended Nine months ended
April 30, April 30,
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2001 2000 2001 2000
------ ------ ------ ------
Shares used in computing basic
net income per share 14,019 15,217 14,437 15,404
Dilutive effect of stock options and warrants 644 1,695 723 1,673
------ ------ ------ ------
Shares used in computing diluted
net income per share 14,663 16,912 15,160 17,077
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Options to purchase approximately 2,083,000 shares of Common Stock at an average
exercise price of $4.13 per share for the three months ended April 30, 2001 were
anti-dilutive and not included in the computation of diluted net income per
share, because the options' exercise price was greater than the average market
price of the Common Stock for the period.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Certain information contained herein may include "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. All statements,
other than statements of historical facts included in this Form 10-Q, are
forward-looking statements. Such statements are subject to certain risks and
uncertainties, which include, but are not limited to, technological advances,
dependence upon the insurance and utilities industries, attraction and retention
of technical employees, fluctuations in operating results, and the other risk
factors and cautionary statements listed from time to time in the Company's
periodic reports filed with the Securities and Exchange Commission. All
forward-looking statements included in this Form 10-Q and all subsequent oral
forward-looking statements attributable to the Company or persons acting on its
behalf are expressly qualified in their entirety by these cautionary statements.
OVERVIEW
DocuCorp International, Inc. ("DocuCorp" or the "Company") develops, markets,
and supports a portfolio of Internet and print, enterprise-wide software
products that enable users to acquire, manage, personalize, and present
information. In addition, the Company provides application service provider
("ASP") hosting of Internet-enabled solutions, consulting, application
integration, and training through a 210-person service organization. ASP hosting
is performed using the Company's software and facilities to provide processing,
print, mail, archival, and Internet delivery of documents for customers who
outsource this activity.
The Company's software products support leading hardware platforms, operating
systems, printers, and imaging systems. These products are designed to
personalize, produce, and manage documents such as insurance policies, utility
statements, telephone bills, bank and mutual fund statements, invoices, direct
mail correspondence, bills of lading, and other customer-oriented documents. The
Company's ASP offerings include customer statement and bill generation,
electronic bill presentment and payment, insurance policy production, and
electronic document archival. The Company currently has an installed base of
approximately 900 customers. More than half of the 200 largest insurance
companies in the United States use the Company's software products and services,
including nine of the ten largest life and health insurance companies and nine
of the ten largest property and casualty insurance companies. Many of the
largest North American utilities companies, major international financial
services institutions, and clients in higher education and the
telecommunications industries use the Company's products and services.
The Company derives its revenues from ASP hosting fees, professional services
fees, license fees, and recurring maintenance fees related to its software
products. ASP hosting revenues consist of fees earned from customers who
outsource document automation applications. Professional services revenues
include fees for consulting, implementation, and education services. License
revenues are generally derived from perpetual and term licenses of software
products. Maintenance and other recurring revenues consist primarily of
recurring license fees and annual maintenance contracts.
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HISTORICAL OPERATING RESULTS OF THE COMPANY
The following table sets forth selected unaudited interim consolidated
statements of operations data of the Company expressed as a percentage of total
revenues for the periods indicated:
Three months ended Nine months ended
April 30, April 30,
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2001 2000 2001 2000
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Revenues
ASP hosting 22% 20% 21% 19%
Professional services 35 36 35 36
License 17 14 18 15
Maintenance and other recurring 26 30 26 30
--- --- --- ---
Total revenues 100 100 100 100
--- --- --- ---
Expenses
ASP hosting 20 17 21 16
Professional services 27 31 27 31
Product development and support 17 19 17 20
Selling, general and administrative 25 26 25 27
--- --- --- ---
Total expenses 89 93 90 94
--- --- --- ---
Operating income 11 7 10 6
Other income, net 0 1 0 1
--- --- --- ---
Income before income taxes 11 8 10 7
Provision for income taxes 6 4 5 3
--- --- --- ---
Net income 5% 4% 5% 4%
=== === === ===
COMPARATIVE ANALYSIS OF QUARTERLY RESULTS FOR THE THREE AND NINE MONTHS ENDED
APRIL 30, 2001 AND 2000
REVENUES
Total revenues increased approximately 23% and 21% for the three and nine months
ended April 30, 2001, respectively, due to increases among all revenue streams.
For the three and nine months ended April 30, 2001, ASP hosting revenues
increased approximately 36% and 35%, respectively, due to the Company's focus on
expanding this business and adding several new significant customers. For the
three and nine months ended April 30, 2001, professional services revenues
increased 17% and 16%, respectively. For the three and nine months ended April
30, 2001, license revenues increased approximately 55% and 44%, respectively.
The increase in professional services and license revenues is primarily the
result of customers no longer focused on Y2K as they were for the comparable
periods in fiscal 2000. Maintenance revenues increased 6% and 8% for the three
and nine months ended April 30, 2001, respectively, due to an expanding customer
base.
Backlog for the Company's products and services of approximately $49.5 million
as of April 30, 2001, of which approximately $24.2 million is scheduled to be
satisfied within one year, is primarily composed of recurring software license
and maintenance revenues for ongoing maintenance and support, software
implementation and consulting services, and ASP hosting services. Software
agreements for recurring license fees generally have non-cancelable terms of up
to five years. Annual maintenance contracts may generally be terminated upon 30
days' notice; however, the Company has not historically experienced material
cancellations of such contracts. Software implementation and consulting services
backlog is
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principally performed under time and material agreements, of which some have
cancellation provisions. ASP hosting services agreements generally provide that
fees are charged on a per transaction basis. The estimated future revenues with
respect to software implementation and ASP hosting services are based on
management's estimate of revenues over the remaining life of the respective
contracts.
ASP HOSTING EXPENSE
ASP hosting expense is composed primarily of personnel costs, facility-related
costs, postage, and supplies expense related to the Company's two ASP hosting
centers. ASP hosting expense increased 46% and 62%, respectively, for the three
and nine months ended April 30, 2001 due primarily to personnel, facility, and
computer costs associated with opening a second ASP hosting facility in Dallas,
Texas in March 2000. ASP hosting expense also increased as a result of
approximately $360,000 and $1.1 million of additional postage and supplies
expense related to increased ASP hosting revenues for the three and nine months
ended April 30, 2001, respectively. For the three months ended April 30, 2001
and 2000, ASP hosting expense represented 91% and 84% of ASP hosting revenues,
respectively. For the nine months ended April 30, 2001 and 2000, ASP hosting
expense represented 98% and 82% of ASP hosting revenues, respectively. The
increase in cost as a percentage of revenues is primarily due to additional
costs incurred with expanding the Company's ASP hosting capacity. The Company
expects ASP hosting revenues will increase at a greater rate than the associated
expenses.
PROFESSIONAL SERVICES EXPENSE
Professional services expense is composed primarily of personnel expenses
related to implementation, education, and consulting services. Professional
services expense increased 9% and 5% for the three and nine months ended April
30, 2001, respectively, due primarily to increased personnel costs and travel
expenses associated with the increased professional services revenues. For the
three months ended April 30, 2001 and 2000, professional services expense
represented 78% and 84% of professional services revenues, respectively. For the
nine months ended April 30, 2001 and 2000, professional services expense
represented 78% and 86% of professional services revenues, respectively. The
decrease in cost as a percentage of professional services revenues is primarily
due to higher utilization of implementation and consulting personnel. The
Company expects professional services expenses to increase as professional
services activities and revenues increase domestically and internationally.
PRODUCT DEVELOPMENT AND SUPPORT EXPENSE
Product development and support expense consists primarily of research and
development efforts, amortization of capitalized software development costs,
customer support, and other product support costs. For the three and nine months
ended April 30, 2001, product development and support expense increased 5% and
4%, respectively. Both periods included increased personnel costs for
development and support efforts, offset by increased software capitalization
related to the development of the Company's products. The Company anticipates
continued acceleration of development efforts, including Internet applications,
integration of its existing product offerings, further development of systems
for use in industries such as utilities and financial services, development of
new software products utilizing object-oriented technology, and continued
support of its existing product lines. Expenditures in this area are expected to
increase in relation to the anticipated growth in revenues.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE
Selling, general and administrative expense increased 17% and 14% for the three
and nine months ended April 30, 2001, respectively. As a result of the increased
revenues for these periods, there was increased incentive compensation, as well
as a third-party selling fee associated with a license agreement executed in the
third quarter. In addition, the Company increased marketing communications
expenses to expand visibility of the Company.
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OTHER INCOME, NET
Other income, net decreased approximately 91% and 58% for the three and nine
months ended April 30, 2001, respectively. The decrease is mainly due to a loss
on the foreign exchange rate associated with the Company's European subsidiary
as well as decreased interest income as a result of lower cash and short-term
investment balances.
PROVISION FOR INCOME TAXES
The effective tax rate for the three months ended April 30, 2001 and 2000 was
approximately 53% and 48%, respectively, and approximately 48% and 47% for the
nine months ended April 30, 2001 and 2000, respectively. These rates differ from
the federal statutory rate due primarily to non-deductible goodwill amortization
related to the Merger and fiscal year 1998 acquisitions of EZPower Systems, Inc.
and Maitland Software, Inc. Also, the Company's European subsidiary is in a loss
position for fiscal 2001 which is not deductible against the Company's U.S. tax
liability which increases the effective tax rate.
NET INCOME
Net income increased approximately 58% and 67% for the three and nine months
ended April 30, 2001, respectively. The increase in net income for these periods
is primarily due to revenue growth, along with controlled expenses including
increased efficiency in the ASP hosting facilities and increased utilization of
professional services personnel.
LIQUIDITY AND CAPITAL RESOURCES
At April 30, 2001, the Company's principal sources of liquidity consisted of
cash of approximately $5.6 million and short-term investments of approximately
$4.0 million. Cash and cash equivalents for the nine months ended April 30, 2001
increased approximately $892,000 due mainly to cash generated from operations of
approximately $4.9 million offset primarily by the purchase of treasury stock.
Cash flows provided by investing activities of approximately $165,000 were
related to the purchase of short-term investments, purchase of fixed assets, and
development of capitalized software. Cash flows used in financing activities of
approximately $4.2 million primarily relate to the purchase of treasury stock
under the Company's stock repurchase program offset by proceeds from exercise of
stock options. As of April 30, 2001, the Company had repurchased approximately
3,830,000 shares of its Common Stock at an average per share cost of $4.60.
Working capital was approximately $11.7 million at April 30, 2001, compared with
approximately $13.0 million at July 31, 2000.
The Company's $3.5 million revolving credit facility bears interest at the
bank's prime rate less 0.25%, or 7.25% as of April 30, 2001, and has been
renewed and extended to November 2001. Under the credit facility, the Company is
required to maintain certain financial covenants. As of April 30, 2001 there
were no borrowings under this credit facility.
The Company's liquidity needs are expected to arise primarily from funding the
continued development, enhancement, and support of its software offerings,
selling and marketing costs associated principally with continued entry into new
vertical and international markets, and repurchase of treasury stock under the
Company's stock repurchase program. Although the Company has no current
commitments or agreements with respect to any acquisition of other businesses or
technologies, a portion of the Company's cash could be used to acquire
complementary businesses or obtain the right to use complementary technologies.
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The Company currently anticipates that existing cash and short-term investment
balances, its existing credit facility, and cash generated from operations will
be sufficient to satisfy its operating cash needs for the foreseeable future.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("SFAS 133"), which requires all derivative instruments
be recorded on the balance sheet at fair value. Changes in the fair value of
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, depending on the type of hedge transaction. During
the first quarter of fiscal 2001, the Company adopted SFAS 133. The adoption of
this statement had no impact on the Company's unaudited interim consolidated
financial statements for the three or nine months ended April 30, 2001 as the
Company does not currently hold derivative instruments or engage in hedging
activities.
In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin No. 101, "Revenue Recognition in Financial Statements," ("SAB 101"),
which provides guidance on the recognition, presentation, and disclosure of
revenue in financial statements filed with the Securities and Exchange
Commission. SAB 101 outlines the basic criteria that must be met to recognize
revenue and provides guidance for disclosures related to revenue recognition
policies. The Company plans to adopt SAB 101 during the fourth quarter of the
fiscal year ending July 31, 2001. The Company is in the process of assessing the
impact of adopting SAB 101.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company has no derivative financial instruments in its cash and cash
equivalent balances. The Company invests its cash and cash equivalents in
investment-grade, highly liquid investments, consisting of money market
instruments and commercial paper.
The Company is exposed to market risk arising from changes in foreign currency
exchange rates as a result of selling its products and services outside the U.S.
(principally Europe). A portion of the Company's sales generated from its
non-U.S. operations are denominated in currencies other than the U.S. dollar,
principally British pounds. Consequently, the translated U.S. dollar value of
DocuCorp's foreign sales and operating results are subject to currency exchange
rate fluctuations which may favorably or unfavorably impact reported earnings
and may affect comparability of period-to-period operating results.
For the three and nine months ended April 30, 2001, approximately 1% of the
Company's revenues were denominated in British pounds. For the three and nine
months ended April 30, 2001, approximately 4% and 5%, respectively, of the
Company's operating expenses were denominated in British pounds. Historically,
the effect of fluctuations in currency exchange rates has not had a material
impact on the Company's operations; however, there can be no guarantees that it
will not have a material impact in the future. The Company's exposure to
fluctuations in currency exchange rates will increase as it expands its
international operations.
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PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Reports on Form 8-K.
No reports on Form 8-K have been filed by the Registrant
during the three months ended April 30, 2001.
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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.
DocuCorp International, Inc.
- --------------------------------------------
(Registrant)
/s/ Michael D. Andereck Date June 14, 2001
- --------------------------------------------
Senior Vice President, Finance
(Duly Authorized Officer and Principal Financial Officer)
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