1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended December 31, 1996 Commission File Number 0-12591
Cardinal Health, Inc.
(Exact name of registrant as specified in its charter)
OHIO 31-0958666
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
5555 GLENDON COURT, DUBLIN, OHIO 43016
(Address of principal executive offices and zip code)
(614) 717-5000
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
------- -------
The number of Registrant's Common Shares outstanding at the close of
business on January 31, 1997 was as follows:
Common Shares, without par value: 100,446,324.
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CARDINAL HEALTH, INC. AND SUBSIDIARIES
Index *
Page No.
Part I. Financial Information: --------
---------------------
Item 1. Financial Statements:
Consolidated Statements of Earnings for the Fiscal Quarter and Six
Months Ended December 31, 1996 and 1995............................................ 3
Consolidated Balance Sheets at December 31, 1996 and
June 30, 1996...................................................................... 4
Consolidated Statements of Cash Flows for the Six Months Ended
December 31, 1996 and 1995......................................................... 5
Notes to Consolidated Financial Statements......................................... 6
Item 2. Management's Discussion and Analysis of Results of Operations
and Financial Condition............................................................ 8
Part II. Other Information:
------------------
Item 1. Legal Proceedings.................................................................. 10
Item 2. Change in Securities............................................................... 10
Item 4. Submission of Matters to a Vote of Security Holders................................ 10
Item 6. Exhibits and Reports on Form 8-K................................................... 11
* Items deleted are inapplicable.
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PART I. FINANCIAL INFORMATION
CARDINAL HEALTH, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(In thousands, except per share amounts)
Fiscal Quarter Ended Six Months Ended
--------------------------- ----------------------------
December 31, December 31, December 31, December 31,
1996 1995 1996 1995
------------ ------------ ----------- ------------
Net revenues $ 2,688,771 $ 2,188,619 $ 5,116,996 $ 4,285,464
Cost of products sold 2,483,533 2,013,952 4,729,495 3,946,751
----------- ----------- ----------- -----------
Gross margin 205,238 174,667 387,501 338,713
Selling, general and administrative expenses 114,158 107,103 225,802 214,461
Unusual items, merger costs (17,359) (17,552) (17,359) (17,552)
----------- ----------- ----------- -----------
Operating earnings 73,721 50,012 144,340 106,700
Other income (expense):
Interest expense (7,374) (4,801) (13,933) (9,424)
Other, net-- primarily interest income 1,475 3,101 4,062 5,521
----------- ----------- ----------- -----------
Earnings before income taxes 67,822 48,312 134,469 102,797
Provision for income taxes 29,368 21,770 56,218 44,339
----------- ----------- ----------- -----------
Net earnings $ 38,454 $ 26,542 $ 78,251 $ 58,458
=========== =========== =========== ===========
Net earnings per Common Share:
Primary $ 0.38 $ 0.27 $ 0.79 $ 0.60
Fully diluted $ 0.38 $ 0.27 $ 0.79 $ 0.60
Weighted average number of Common
Shares outstanding:
Primary 101,285 96,913 99,570 96,876
Fully diluted 101,346 96,923 99,682 96,942
See notes to consolidated financial statements.
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CARDINAL HEALTH, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
December 31, June 30,
1996 1996
----------- ----------
ASSETS
Current assets:
Cash and equivalents $ 73,332 $ 287,802
Marketable securities available-for-sale 37,185 54,335
Trade receivables 679,317 564,881
Current portion of net investment in sales-type leases 38,096 37,953
Merchandise inventories 1,691,209 1,238,238
Prepaid expenses and other 76,936 56,568
----------- -----------
Total current assets 2,596,075 2,239,777
----------- -----------
Property and equipment, at cost 413,821 265,584
Accumulated depreciation and amortization (163,915) (112,122)
----------- -----------
Property and equipment, net 249,906 153,462
Other assets:
Net investment in sales-type leases, less current portion 110,472 111,604
Goodwill and other intangibles 109,976 92,428
Other 84,408 83,824
----------- -----------
Total $ 3,150,837 $ 2,681,095
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable, banks $ 3,138 $ --
Current portion of long-term obligations 109,422 106,007
Accounts payable 1,367,998 1,126,065
Other accrued liabilities 153,690 153,585
----------- -----------
Total current liabilities 1,634,248 1,385,657
----------- -----------
Long-term obligations, less current portion 297,909 265,144
Deferred income taxes and other liabilities 121,091 99,584
Shareholders' equity:
Common Shares, without par value 549,186 484,446
Retained earnings 559,192 455,690
Common Shares in treasury, at cost (5,846) (5,426)
Other (4,943) (4,000)
----------- -----------
Total shareholders' equity 1,097,589 930,710
----------- -----------
Total $ 3,150,837 $ 2,681,095
=========== ===========
See notes to consolidated financial statements.
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CARDINAL HEALTH, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Six Months Ended
----------------------------
December 31, December 31,
1996 1995
------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 78,251 $ 58,458
Adjustments to reconcile net earnings to net cash from operations:
Depreciation and amortization 20,566 14,830
Provision for bad debts 4,023 4,145
Change in operating assets and liabilities, net of effects from acquisitions:
Increase in trade receivables (98,870) (91,282)
Increase in merchandise inventories (441,875) (125,305)
Decrease (increase) in net investment in sales-type leases 989 (18,038)
Increase in accounts payable 233,572 119,485
Other operating items, net (802) 21,098
--------- ---------
Net cash used in operating activities (204,146) (16,609)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of subsidiary, net of cash acquired -- (26,982)
Proceeds from sale of property and equipment 1,740 613
Additions to property and equipment (30,974) (36,452)
Purchase of marketable securities available-for-sale (3,400) (38,434)
Proceeds from sale of marketable securities available-for-sale 20,550 78,405
--------- ---------
Net cash used in investing activities (12,084) (22,850)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net short-term borrowing activity 2,272 22,000
Reduction of long-term obligations (27,732) (2,179)
Proceeds from long-term obligations -- 237
Proceeds from issuance of Common Shares 24,872 3,511
Tax benefit of stock options 6,650 6,855
Dividends paid on Common Shares and cash paid in lieu
of fractional shares (3,882) (4,715)
Purchase of treasury shares (420) (164)
--------- ---------
Net cash provided by financing activities 1,760 25,545
--------- ---------
NET DECREASE IN CASH AND EQUIVALENTS (214,470) (13,914)
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD 287,802 64,589
--------- ---------
CASH AND EQUIVALENTS AT END OF PERIOD $ 73,332 $ 50,675
========= =========
See notes to consolidated financial statements.
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CARDINAL HEALTH, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
Note 1. The consolidated financial statements of the Company include the
accounts of all majority-owned subsidiaries and all significant
intercompany amounts have been eliminated. The consolidated
financial statements contained herein have been restated to give
retroactive effect to the mergers with Medicine Shoppe
International, Inc. ("Medicine Shoppe") on November 13, 1995 and
Pyxis Corporation ("Pyxis") on May 7, 1996. Such business
combinations were accounted for under the pooling-of-interests
method (see Note 3).
These consolidated financial statements have been prepared in
accordance with the instructions to Form 10-Q and include all of
the information and disclosures required by generally accepted
accounting principles for interim reporting. In the opinion of
management, all adjustments necessary for a fair presentation
have been included. All such adjustments are of a normal and
recurring nature.
The consolidated financial statements included herein should be
read in conjunction with the audited consolidated financial
statements and related notes contained in the Company's annual
report on Form 10-K for the fiscal year ended June 30, 1996.
Note 2. Net earnings per Common Share are based on the weighted average
number of Common Shares outstanding during each period and the
dilutive effect of stock options from the date of grant, computed
using the treasury stock method.
Note 3. On October 11, 1996, the Company completed a merger with PCI
Services, Inc. ("PCI"). The merger was accounted for as
a pooling-of-interests. In the merger, the Company issued
approximately 3,138,000 Common Shares to PCI shareholders and
PCI's outstanding stock options were converted into options to
purchase approximately 230,000 Common Shares. The historical cost
of PCI assets combined was approximately $148.4 million and the
total liabilities assumed (including total debt of approximately
$62.0 million) were approximately $87.8 million. The impact of
the PCI merger, on a historical basis, is not significant.
Accordingly, prior period financial statements have not been
restated for the PCI merger.
During the three month period ended December 31, 1996, the
Company recorded costs totaling approximately $17.4 million
($12.7 million, net of tax) related to the merger with PCI. These
costs included approximately $5.3 million for investment advisor,
legal, accounting, and other transaction fees associated with the
merger; $5.8 million related to employee retention, employee
severance, and other personnel costs; and $1.6 million for other
cost associated with the merger. Certain of these amounts are
based upon estimates, and actual amounts paid may ultimately
differ from these estimates. As of December 31, 1996, the Company
had paid approximately $4.5 million related to these charges. If
additional costs are incurred, such items will be expensed in
subsequent periods.
As a result of the mergers with Medicine Shoppe and Pyxis in
fiscal 1996, the Company recorded costs totaling approximately
$67.3 million ($47.8 million, net of tax). During the six months
ended December 31, 1996, the Company paid approximately $11.8
million related to these costs. The Company's current estimates
of the merger costs ultimately to be incurred are not materially
different from the amounts originally recorded.
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The following supplemental information, which is presented for
purposes of facilitating meaningful comparisons to ongoing operations
and to other companies, summarizes the results of operations of the
Company, adjusted on a pro forma basis to reflect the elimination of
the effect of the merger costs discussed above.
Fiscal Quarter Ended
-------------------------------------------------------------------
December 31, Percentage December 31, Percentage
1996 of Net Sales 1995 of Net Sales
------------------ -------------- ------------------ --------------
Operating earnings $ 91,080 3.39% $ 67,564 3.09%
Net earnings $ 51,109 1.90% $ 39,037 1.78%
Net earnings per Common Share:
Primary $ 0.50 $ 0.40
Fully diluted $ 0.50 $ 0.40
======================================================================================================================
Six Months Ended
-------------------------------------------------------------------
December 31, Percentage December 31, Percentage
1996 of Net Sales 1995 of Net Sales
------------------ -------------- ------------------ --------------
Operating earnings $ 161,699 3.16% $ 124,252 2.90%
Net earnings $ 90,906 1.78% $ 70,953 1.66%
Net earnings per Common Share:
Primary $ 0.91 $ 0.73
Fully diluted $ 0.91 $ 0.73
The differences between the above results and those reported in
the Consolidated Statements of Earnings are due solely to the
assumed elimination of the one-time expenses of approximately
$17.4 million ($12.7 million, net of tax) in the period ended
December 31, 1996 and approximately $17.6 million ($12.5 million,
net of tax) in the period ended December 31, 1995 incurred
primarily in connection with the merger with PCI and Medicine
Shoppe, respectively.
Note 4. On October 29, 1996, the Board of Directors of the Company
declared a three-for-two stock split which was effected as a
stock dividend and distributed on December 16, 1996 to
shareholders of record on December 2, 1996. All share and per
share information has been retroactively restated for the stock
split.
Note 5. On November 27, 1996, the Company announced that it had entered
into a definitive merger agreement with Owen Healthcare, Inc.
("Owen") pursuant to which Owen will become a wholly-owned
subsidiary of the Company in a stock-for-stock merger intended to
be tax-free and accounted for as a pooling-of-interests for
financial reporting purposes. In connection with the Owen merger,
the Company estimates that it will issue between 8.25 million and
9.1 million Cardinal Common Shares. Under the terms of the
agreement, shareholders of Owen will receive $27.25 in the form
of Cardinal Common Shares for each share of Owen they own,
subject to adjustment under specified circumstances. In addition,
options for Owen common stock will be converted into equivalent
options for Cardinal Common Shares, based upon the exchange
ratio. In connection with the merger, Owen has granted Cardinal
an option to purchase approximately 3.4 million shares of Owen
common stock, exercisable upon the occurrence of certain events.
The merger is expected to be completed during fiscal 1997,
subject to approval by Owen shareholders and the receipt of
requisite regulatory approvals.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Management's discussion and analysis presented below has been prepared to give
retroactive effect to the pooling-of-interests business combinations with
Medicine Shoppe on November 13, 1995 and Pyxis on May 7, 1996 (see Notes 1 and
3 of "Notes to Consolidated Financial Statements"). On October 11, 1996, the
Company completed a merger with PCI, which was also accounted for as a
pooling-of-interests. The impact of the PCI merger, on a historical basis, is
not significant. Accordingly, prior period financial statements have not been
restated for the PCI merger (see Note 3 of "Notes to Consolidated Financial
Statements"). This discussion and analysis is concerned with material changes
in financial condition and results of operations for the Company's consolidated
balance sheets as of December 31, 1996 and June 30, 1996, and for the
consolidated statements of earnings for the three and six month periods ended
December 31, 1996 and 1995.
Portions of management's discussion and analysis presented below include
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements are subject to
risks, uncertainties and other factors which could cause actual results to
materially differ from those projected or implied. The most significant of such
risks, uncertainties and other factors are described in Exhibit 99.01 to this
Form 10-Q, which is incorporated herein by reference.
RESULTS OF OPERATIONS
Net Revenues. Net revenues increased 23% for the second quarter of fiscal
1996 and 19% for the six month period ended December 31, 1996, as compared to
the prior year. The increase in the second quarter and the six month period is
primarily due to internal revenue growth from pharmaceutical distribution
activities, including the addition of new customers, increased sales to existing
customers and price increases. Additional revenues were also provided in the
second quarter by the PCI operations. Continued development of the Company's
relationship with Kmart Corporation ("Kmart") and additional opportunities
created by the deterioration of the financial condition of a major competitor
also contributed to the increases during the second quarter and six months
ended December 31, 1996.
Gross Margin. As a percentage of net revenues, gross margin for the second
quarter decreased to 7.63% from 7.98% in the prior year. For the six month
period, gross margin decreased to 7.57% from 7.90% in the prior year. The
decrease in gross margin is primarily due to the shift in net revenue mix caused
by significant increases in the relatively lower margin pharmaceutical
distribution activities (see "Net Revenues" above). The impact of this shift was
partially offset by the impact of increased merchandising and marketing programs
with customers and suppliers and the additional gross margin contributed in the
second quarter by the PCI operations. The gross margin continues to be affected
by the combination of a highly competitive environment and a greater mix of high
volume customers, where a lower cost of distribution and better asset management
enable the Company to offer lower selling margins and still achieve higher
operating margins.
Selling, General and Administration Expenses. Selling, general and
administrative expenses as a percentage of net revenues improved to 4.25% in the
second quarter of fiscal 1997 compared to 4.89% in the prior year and 4.41% for
the six month period ended December 31, 1996 compared to 5.00% in the prior
year. The improvements in the second quarter and the six month period reflect
the economies associated with the Company's revenue growth from pharmaceutical
distribution activities, as well as significant productivity gains resulting
from continued cost control efforts and the consolidation and selective
automation of distribution facilities.
Unusual Items - Merger Costs. The Company recorded certain nonrecurring
charges to reflect the estimated PCI and Medicine Shoppe merger costs in the
second quarter of fiscal 1997 and 1996, respectively. See further discussion in
Note 3 of "Notes to Consolidated Financial Statements."
Interest Expense. The increase in interest expense of $2.6 million in the
second quarter of fiscal 1997 compared to the prior year and $4.5 million for
the six month period ended December 31, 1996 compared to the prior year is
primarily due to the Company's issuance of $150 million, 6% Notes due 2006, in a
public offering in January 1996.
Provision for Income Taxes. The Company's provision for income taxes
relative to pretax earnings remained consistent in both the second quarter and
first six month period of fiscal 1997 compared to the prior year.
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LIQUIDITY AND CAPITAL RESOURCES
Working capital increased to $961.8 million at December 31, 1996 from
$854.1 million at June 30, 1996. This increase included additional investments
in merchandise inventories and trade receivables of $453.0 million and $114.4
million, respectively. Offsetting the increases in working capital were
decreases in cash and equivalents, and marketable securities available-for-sale
of $214.5 million and $17.2 million, respectively, and an increase in accounts
payable of $241.9 million. Increases in merchandise inventories and accounts
payable reflect the seasonal increase of inventories and higher level of
business volume in pharmaceutical distribution activities, including higher
inventories required by the new pharmaceutical services agreement with Kmart.
The increase in trade receivables is consistent with the Company's revenue
growth (see "Net Revenues" above). The change in cash and equivalents, and
marketable securities available-for-sale is due to the timing of inventory
purchases and related payments.
Property and equipment, at cost, increased by $148.2 million from June 30,
1996. Of this amount, $111.5 million was attributable to the merger with PCI.
The additional increase in property and equipment acquired included increased
investments in management information systems and customer support systems, as
well as upgrades to distribution facilities.
Shareholders' equity increased to $1,097.6 million at December 31, 1996
from $930.7 million at June 30, 1996, primarily due to net earnings of $78.3
million, equity of PCI on the merger date of $60.6 million and issuances of
Common Shares resulting from stock option exercises and related tax benefits in
the amount of $31.5 million.
OTHER
On November 27, 1996, the Company announced that it had entered into a
definitive agreement with Owen Healthcare, Inc. ("Owen") pursuant to which Owen
will become a wholly-owned subsidiary of the Company in a stock-for-stock merger
intended to be tax-free and accounted for as a pooling-of-interests for
financial reporting purposes. In connection with the Owen merger, the Company
estimates that it will issue between 8.25 million and 9.1 million Cardinal
Common Shares. Under the terms of the agreement, shareholders of Owen will
receive $27.25 in the form of Cardinal Common Shares for each share of Owen they
own, subject to adjustment under specified circumstances. In addition, options
for Owen common stock will be converted into equivalent options for Cardinal
Common Shares, based upon the exchange ratio. In connection with the merger,
Owen has granted Cardinal an option to purchase approximately 3.4 million shares
of Owen common stock, exercisable upon the occurrence of certain events. The
merger is expected to be completed by the end of fiscal 1997, subject to
approval by Owen shareholders and the receipt of requisite regulatory approvals.
The Company expects to record a one-time charge to reflect transaction and other
costs incurred as a result of the Owen merger in the quarter in which the merger
is consummated (see Note 5 of "Notes to Consolidated Financial Statements").
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PART II. OTHER INFORMATION
Item 1: Legal Proceedings
In November 1993, the Company and Whitmire Distribution Corporation
("Whitmire"), as well as other pharmaceutical wholesalers, were each named as
defendants in a series of purported class action antitrust lawsuits which were
later consolidated and transferred by the Judicial Panel for Multi-District
Litigation to the United States District Court for the Northern District of
Illinois (the "Brand Name Prescription Drug Litigation"). Subsequent to the
consolidation, a new consolidated complaint was filed which included allegations
that the wholesaler defendants, including the Company and Whitmire, conspired
with manufacturers to inflate prices by using a chargeback pricing system. In
addition to the Federal court cases described above, the Company and Whitmire
have also been named as defendants in a series of state court cases alleging
similar claims under various state laws regarding the sale of brand name
prescription drugs. These lawsuits are described in "Item 1 - Legal Proceedings"
of Part II of the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996, which was filed with the Securities and Exchange Commission and
is incorporated herein by reference. On November 9, 1995, the Company, along
with the other wholesaler defendants, filed a motion for summary judgment in the
Brand Name Prescription Drug Litigation. On April 4, 1996, summary judgment was
granted in favor of the Company and the other wholesaler defendants. The
plaintiffs have appealed this decision. The Company believes that the
allegations against the Company and Whitmire in such litigation are without
merit, and it intends to contest such allegations vigorously. The Company does
not believe that the outcome of these lawsuits will have a material adverse
effect on the Company's financial condition or results of operations.
The Company becomes involved from time to time in litigation incidental to
its business, none of which is expected to have a material adverse effect on the
Company's financial condition or results of operations.
Item 2: Change in Securities
On October 29, 1996, the shareholders of the Company adopted an amendment
to Article FOURTH of the Company's Amended and Restated Articles of
Incorporation, as amended, which increased the number of authorized Common
Shares, without par value, from 100 million to 150 million.
Item 4: Submission of Matters to a Vote of Security Holders
(a) Registrant's 1996 Annual Meeting of Shareholders was held on
October 29, 1996.
(b) Proxies were solicited by Registrant's management pursuant to
Regulation 14 under the Securities Exchange Act of 1934; there was no
solicitation in opposition to management's nominees as listed in the
proxy statement; and all director nominees were elected to the class
indicated in the proxy statement pursuant to the vote of the
Registrant's shareholders.
(c) Matters voted upon at the Annual Meeting were as follows:
(1) Election of Regina E. Herzlinger, J. Michael Losh, John C.
Kane, and John B. McCoy as directors of the Company. The results
of the shareholder vote were as follows: Mrs. Herzlinger
54,996,669 for, 0 against, 1,000,599 withheld, and 0 broker
non-votes; Mr. Losh 54,996,877 for, 0 against, 1,000,391
withheld, and 0 broker non-votes; Mr. Kane 54,725,313 for, 0
against, 1,271,954 withheld, and 0 broker non-votes; Mr. McCoy
55,013,666 for, 0 against, 983,601 withheld, and 0 broker
non-votes.
(2) Amendment to the Registrant's Amended and Restated Articles of
Incorporation to increase the common shares, without par value,
authorized (see Item 2). The results of the shareholder vote were
as follows: 53,313,661 for, 2,595,381 against, 88,225 withheld,
and 0 broker non-votes.
(3) Approval of the material terms of the performance goals under the
Cardinal Health, Inc. Performance-Based Incentive Compensation
Plan. The results of the shareholder vote were as follows:
55,455,400 for, 429,659 against, 112,208 withheld, and 0 broker
non-votes.
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Item 6: Exhibits and Reports on Form 8-K:
(a) Listing of Exhibits:
Exhibit 2.01 Agreement and Plan of Merger dated as of November
27, 1996, by and among Owen Healthcare, Inc., Owl
Merger Corp., and Registrant. (1)
Exhibit 3.01 Amended and Restated Articles of Incorporation of the
Registrant, as amended.
Exhibit 11.01 Computation of Per Share Earnings.
Exhibit 27.01 Financial Data Schedule.
Exhibit 99.01 Statement Regarding Forward-Looking Information. (2)
--------------------
(1) Filed as Exhibit 2.1 to the Current Report on Form 8-K of Owen
Healthcare Inc. dated November 27, 1996, and incorporated herein
by reference.
(2) Filed as Exhibit 99.01 to the Quarterly Report on Form 10-Q of the
Registrant for the quarter ended September 30, 1996, and incorporated
herein by reference.
(b) Reports on Form 8-K:
On October 18, 1996, the Company filed a Current Report on Form 8-K
under Item 5 which reported that it had completed its merger of a
wholly-owned subsidiary with and into PCI Services, Inc. on October 11,
1996.
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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.
CARDINAL HEALTH, INC.
Date: February 6, 1997 By: /s/ Robert D. Walter
----------------------------------------
Robert D. Walter
Chairman and Chief Executive Officer
By: /s/ David Bearman
----------------------------------------
David Bearman
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
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