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 June 30, 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 1-10219
VULCAN INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 31-0810265
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
300 Delaware Avenue, Suite 1704, Wilmington, Delaware 19801
(Address of principal executive offices) (Zip Code)
(302) 427-804
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year,
if changed since last report)
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
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Outstanding shares of no par value common stock at June 30, 2000:
1,099,624 shares
VULCAN INTERNATIONAL CORPORATION
INDEX
Part I. FINANCIAL INFORMATION PAGE
Item 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets 1
Condensed Consolidated Statements of Income 2
Condensed Consolidated Statements of Cash Flows 3
Schedule Supporting Net Income Per Common
Share and Dividends Per Common Share 4
Notes to Condensed Consolidated Financial
Statements 5-8
Independent Accountants' Report 9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10-11
Item 3 Quantitative and Qualitative Disclosures
about Market Risks 11
Part II. OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 6. Exhibits and Reports on Form 8-K 12
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
VULCAN INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 30, DECEMBER 31,
2000 1999
UNAUDITED
-ASSETS-
CURRENT ASSETS:
Cash $ 1,021,381 1,088,626
Marketable securities (At fair market value) 50,098,086 49,554,152
Accounts receivable 1,663,188 1,409,773
Inventories 1,073,655 1,123,403
Prepaid expense and tax 46,214 107,545
---------- ----------
TOTAL CURRENT ASSETS 53,902,524 53,283,499
---------- ----------
PROPERTY, PLANT AND EQUIPMENT-at cost 11,724,445 11,639,469
Less-Accumulated depreciation and depletion 9,196,026 9,020,820
---------- ----------
NET PROPERTY, PLANT AND EQUIPMENT 2,528,419 2,618,649
---------- ----------
OTHER ASSETS:
Investment in joint venture 83,512 -
Marketable securities (At fair market value) 30,894,844 29,329,505
Deferred charges and other assets 4,400,648 4,309,770
---------- ----------
TOTAL OTHER ASSETS 35,379,004 33,639,275
---------- ----------
TOTAL ASSETS $ 91,809,947 89,541,423
========== ==========
-LIABILITIES AND SHAREHOLDERS' EQUITY-
CURRENT LIABILITIES:
Deferred income tax $ 15,641,551 15,460,319
Note payable 2,375,000 1,810,000
Other 1,172,158 1,113,040
---------- ----------
TOTAL CURRENT LIABILITIES 19,188,709 18,383,359
---------- ----------
OTHER LIABILITIES:
Deferred income tax 10,580,696 9,999,296
Commitments and contingencies - -
Minority interest in partnership 11,617 10,929
Other liabilities 29,877 29,877
---------- ----------
TOTAL OTHER LIABILITIES 10,622,190 10,040,102
---------- ----------
SHAREHOLDERS' EQUITY:
Capital stock 249,939 249,939
Additional paid-in capital 6,534,925 6,146,698
Retained earnings 26,413,090 26,675,335
Accumulated other comprehensive income 49,244,520 47,852,421
---------- ----------
82,442,474 80,924,393
Less-Common stock in treasury-at cost 20,443,426 19,806,431
---------- ----------
TOTAL SHAREHOLDERS' EQUITY 61,999,048 61,117,962
---------- ----------
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY $ 91,809,947 89,541,423
========== ==========
The accompanying notes to condensed consolidated financial statements are an
integral part of these statements.
-1-
PART I - FINANCIAL INFORMATION
(Continued)
Item 1. Financial Statements.
VULCAN INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
UNAUDITED
For the six months ended For the three months ended
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
REVENUES:
Net sales $4,831,963 4,158,961 2,314,917 2,080,561
Dividends 1,035,849 925,765 517,172 463,162
--------- --------- --------- ---------
TOTAL REVENUES 5,867,812 5,084,726 2,832,089 2,543,723
--------- --------- --------- ---------
COST AND EXPENSES:
Cost of sales 4,869,076 4,219,946 2,344,735 2,071,051
General and
administrative 804,925 834,706 386,092 362,617
Interest expense 93,618 70,954 41,625 34,844
--------- --------- --------- ---------
TOTAL COST AND
EXPENSES 5,767,619 5,125,606 2,772,452 2,468,512
--------- --------- --------- ---------
EQUITY IN JOINT
VENTURE INCOME
AND MINORITY
INTEREST 232,824 187,155 114,911 92,980
--------- --------- --------- ---------
INCOME BEFORE
GAIN ON SALE OF
ASSETS 333,017 146,275 174,548 168,191
NET GAIN ON SALE OF
PROPERTY AND EQUIPMENT 168,532 315,134 81,048 202,802
--------- --------- ---------- ---------
INCOME FROM
CONTINUING
OPERATIONS BEFORE
INCOME TAXES 501,549 461,409 255,596 370,993
INCOME TAX PROVISION 102,504 86,613 58,795 61,558
--------- --------- --------- ---------
INCOME FROM
CONTINUING
OPERATIONS 399,045 374,796 196,801 309,435
DISCONTINUED OPERATIONS:
Income from operations,
net of income tax - 37,890 - 57,807
--------- --------- --------- ---------
NET INCOME $ 399,045 412,686 196,801 367,242
========= ========= ========= =========
NET INCOME (LOSS)
PER COMMON SHARE:
Continuing operations $ .36 .34 .18 .28
Discontinued operations - .03 - .05
--------- --------- --------- ---------
TOTAL NET INCOME
PER SHARE $ .36 .37 .18 .33
========= ========= ========= =========
DIVIDENDS PER
COMMON SHARE $ .60 .40 .40 .20
========= ========= ========= =========
The accompanying notes to condensed consolidated financial statements are an
integral part of these statements.
-2-
PART I - FINANCIAL INFORMATION
(Continued)
Item 1. Financial Statements.
VULCAN INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six months ended
UNAUDITED
JUNE 30, JUNE 30,
2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers $ 4,573,062 4,314,392
Cash paid to suppliers and employees (5,729,094) (6,121,107)
Dividends received 1,035,849 925,765
Interest paid (78,426) (71,247)
--------- ---------
NET CASH FLOWS FROM OPERATING ACTIVITIES (198,609) (952,197)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property and equipment 169,738 225,062
Purchase of property and equipment (125,317) (193,100)
Cash distribution from joint venture 150,000 500,000
Collections on notes receivable and other 62,074 -
--------- ---------
NET CASH FLOWS FROM INVESTING ACTIVITIES 256,495 531,962
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings under credit agreements 565,000 1,700,000
Sale of treasury shares 466,875 10,650
Purchase of common shares (715,640) (1,494,245)
Cash dividends paid (441,366) (445,362)
--------- ---------
NET CASH FLOWS FROM FINANCING ACTIVITIES (125,131) (228,957)
--------- ---------
DECREASE IN CASH AND CASH EQUIVALENTS (67,245) (649,192)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,088,626 1,275,656
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,021,381 626,464
========= =========
RECONCILIATION OF NET INCOME TO
NET CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 399,045 412,686
Adjustments-
Depreciation and amortization 214,964 228,103
Deferred income taxes 45,457 51,905
Equity in joint venture income and
minority interest (232,824) (187,155)
Net gain on sale of property and
marketable securities (168,532) (315,134)
Increase in accounts receivable (258,901) (261,186)
(Increase) decrease in inventories 49,748 (427,584)
Decrease in accounts payable,
accrued expenses and other assets (247,566) (453,832)
--------- ---------
NET CASH FLOWS FROM OPERATING ACTIVITIES $ (198,609) (952,197)
========= =========
The accompanying notes to condensed consolidated financial statements are an
integral part of these statements.
-3-
PART I - FINANCIAL INFORMATION
(Continued)
Item 1. Financial Statements.
VULCAN INTERNATIONAL CORPORATION
SCHEDULE SUPPORTING NET INCOME PER COMMON SHARE
AND DIVIDENDS PER COMMON SHARE
UNAUDITED
EXHIBIT 1
For the six months ended For the three months ended
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
a) Income from
operations $ 399,045 374,796 196,801 309,435
b) Income from
discontinued
operations,
net of tax - 37,890 - 57,807
--------- --------- -------- ---------
c) Net income $ 399,045 412,686 196,801 367,242
========= ========= ========= =========
d) Cash
dividends
on common
shares $ 661,291 445,362 439,850 219,357
========= ========= ========= =========
Weighted Average
Shares:
e) Common shares
issued 1,999,512 1,999,512 1,999,512 1,999,512
f) Common
treasury
shares 892,907 882,065 894,906 898,392
--------- --------- --------- ---------
g) Common shares
outstanding 1,106,605 1,117,447 1,104,606 1,101,120
========= ========= ========= =========
h) Income per
common share:
i) Continuing
operations
(a/g) $ .36 .34 .18 .28
j) Discontinued
operations
(b/g) - .03 - .05
--------- --------- --------- ---------
$ .36 .37 .18 .33
========= ========= ========= =========
k) Dividends
per common
share $ .60 .40 .40 .20
The accompanying notes to condensed consolidated financial statements are an
integral part of these statements.
-4-
PART I - FINANCIAL INFORMATION
(Continued)
Item 1. Financial Statements.
VULCAN INTERNATIONAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the six months ended June 30, 2000 and 1999
The Registrant has been advised that it is a potentially responsible party,
together with 18 other parties, with regard to the Resolve, Inc. Superfund
Site, located in North Dartmouth, Massachusetts, with potential joint and
several liability of $5.7 million. The Resolve site was a waste chemical
reclamation facility. The environmental problem at the site involves soil
contamination including, particularly, PCB contaminants. The Registrant is
contesting all liability. The Company's liability, if any, cannot be
estimated at this time. It is the understanding of Registrant that clean-up
at the site will involve treatment of contaminated soil and ground water.
There may be other potential clean-up liability at other sites of which the
Registrant has no specific knowledge.
The accompanying condensed consolidated financial statements reflect all
adjustments that are, in the opinion of management, necessary to reflect a
fair presentation of financial position, results of operations and cash flows
for the interim periods. All such adjustments are of a normal recurring
nature.
There were no securities of the Registrant sold by the Registrant during the
six months ended June 30, 2000, that were not registered under the Securities
Act of 1933, in reliance upon an exemption from registration provided by
Section 4(2) of the Act.
On February 28, 2000 the Board of Directors ratified an action of the
Executive Committee authorizing the Company to enter into an agreement
among Directors and the Company giving the Company the Right of First
Refusal to purchase any shares owned by such Directors prior to any
outside sale of such shares.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
RECLASSIFICATIONS
Certain prior period amounts have been reclassified to conform with current
period presentation.
-5-
PART I - FINANCIAL INFORMATION
(Continued)
Item 1. Financial Statements.
VULCAN INTERNATIONAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the six months ended June 30, 2000 and 1999
(Continued)
INVENTORIES
JUNE 30, DECEMBER 31,
2000 1999
UNAUDITED
Inventories consisted of:
Finished goods $ 406,397 484,888
Work in process 215,575 145,623
Raw materials 451,683 492,892
--------- ---------
Total inventories $1,073,655 1,123,403
========= =========
COMPREHENSIVE INCOME
During the six months and three months ended June 30, 2000 and 1999 total
other comprehensive income (loss) was as follows:
For the six For the three
months ended months ended
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
Net income $ 399,045 412,686 196,801 367,242
Other comprehensive
income (loss), net of tax:
Unrealized gain (loss)
on marketable securities 1,392,099 1,759,178 (791,987) 2,489,274
Less: reclassification
adjustment for gains
included in net income - (60,304) - (60,304)
--------- --------- ------- ---------
Total comprehensive
income (loss) $1,791,144 2,111,560 (595,186) 2,796,212
========= ========= ======= =========
Accumulated comprehensive income consists of unrealized holding gains on
securities available for sale of $49,244,520 at June 30, 2000 and
$47,852,421 at December 31, 1999.
-6-
PART I - FINANCIAL INFORMATION
(Continued)
Item 1. Financial Statements.
VULCAN INTERNATIONAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the six months ended June 30, 2000 and 1999
(Continued)
DISCONTINUED OPERATIONS
In August 1999, the Company completed the sale of its Walnut Ridge,
Arkansas plastics operations. The prior period's financial statements
have been reclassified to present the results of operations from Walnut
Ridge as discontinued operations. For business segment reporting purposes,
the financial results from Walnut Ridge were previously reported in the
segment "Rubber and Plastics." In connection with the sale the Company
received a note for $600,000. Total proceeds from the disposal of the
plastics operations were $1,322,319.
Net sales and income from discontinued operations for the six months and
three months ended June 30, 1999 are as follows:
For the six For the three
months ended months ended
June 30, 1999 June 30, 1999
Net sales $416,617 180,036
======= =======
Income before income taxes $ 47,633 72,529
Income tax provision 9,743 14,722
------- -------
Net income $ 37,890 57,807
======= =======
BUSINESS SEGMENT INFORMATION
Reportable segments for the six months and three months ended June 30, 2000
are as follows:
For the six For the three
months ended months ended
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
NET SALES:
Rubber and Foam Products $3,644,456 3,136,580 1,871,292 1,615,556
Bowling Pins 1,130,709 1,035,491 350,620 504,039
Real Estate Operations 425,623 445,649 213,372 223,300
Intersegment net sales (200,737) (233,697) (38,263) (149,604)
--------- --------- --------- ---------
5,000,051 4,384,023 2,397,021 2,193,291
Timber sales reported in
gain on sale of property
and equipment (168,088) (225,062) (82,104) (112,730)
--------- --------- --------- ---------
TOTAL SALES $4,831,963 4,158,961 2,314,917 2,080,561
========= ========= ========= =========
-7-
PART I - FINANCIAL INFORMATION
(Continued)
Item 1. Financial Statements.
VULCAN INTERNATIONAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the six months ended June 30, 2000 and 1999
(Continued)
OPERATING PROFIT (LOSS)
FROM CONTINUING OPERATIONS:
Rubber and Foam Products $ (613,249) (595,288) (296,373) (200,345)
Bowling Pins 187,928 91,020 81,908 47,835
Real Estate Operations 154,896 242,139 81,582 123,876
--------- --------- --------- ---------
TOTAL OPERATING
PROFIT (LOSS) FROM
CONTINUING OPERATIONS (270,425) (262,129) (132,883) (28,634)
Interest expense - net (93,618) (70,954) (41,625) (34,844)
Other unallocated corporate
income - net 865,592 794,492 430,104 434,471
Income tax provision (102,504) (86,613) (58,795) (61,558)
--------- --------- --------- ---------
INCOME FROM
CONTINUING OPERATIONS 399,045 374,796 196,801 309,435
DISCONTINUED OPERATIONS:
Income from operations,
Net of income tax - 37,890 - 57,807
--------- --------- --------- ---------
NET INCOME $ 399,045 412,686 196,801 367,242
========= ========= ========= =========
REVIEW BY INDEPENDENT ACCOUNTANTS
The condensed consolidated financial statements at June 30, 2000, and for
the six-month period then ended have been reviewed, prior to filing, by
the Registrant's independent accountants, J.D. Cloud & Co. L.L.P., whose
report covering their review of the financial statements is included in
this report.
-8-
INDEPENDENT ACCOUNTANT'S REPORT
To the Board of Directors
Vulcan International Corporation
Wilmington, Delaware
We have reviewed the accompanying condensed consolidated balance sheet of
Vulcan International Corporation and subsidiaries as of June 30, 2000, and
the related condensed consolidated statements of income and cash flows for
the six-month and three-month periods ended June 30, 2000 and 1999. These
financial statements are the responsibility of the Company's management.
We conducted our review in accordance with Statements on Standards for
Accounting and Review Services issued by the American Institute of Certified
Public Accountants. A review of interim financial information consists
principally of applying analytical procedures to financial data and making
inquiries of persons responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance with
generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying condensed consolidated financial statements
for them to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Vulcan International Corporation
and subsidiaries as of December 31, 1999, and the related consolidated
statements of income, shareholders' equity, and cash flows for the year then
ended (not presented herein); and in our report dated February 10, 2000, we
expressed an unqualified opinion on those consolidated financial statements.
In our opinion, the information set forth in the accompanying condensed
consolidated balance sheet as of December 31, 1999, is fairly stated, in all
material respects, in relation to the consolidated balance sheet from which it
has been derived.
J.D. CLOUD & CO. L.L.P.
Certified Public Accountants
Cincinnati, Ohio
July 27, 2000
-9-
PART I - FINANCIAL INFORMATION
(Continued)
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Net sales revenue for the six-month period ended June 30, 2000, increased
$673,002 or 16.2% over the corresponding period in 1999. Cost of sales
increased $649,130 or 15.4% during the six-month period compared to the
corresponding six-month period in 1999. Net sales revenue for the second
quarter of 2000 increased $234,356 or 11.3% and cost of sales increased
$273,684 or 13.2% compared to the corresponding quarter in 1999. These
changes are due primarily to increased sales in the Company's Rubber and
Foam and Bowling Pin segments.
General and administrative expenses decreased $29,781 or 3.6% in the six-
month period ended June 30, 2000, as compared to the corresponding six-month
period in 1999. General and administrative expenses for the second quarter of
2000 increased $23,475 or 6.5% compared to the corresponding quarter in 1999.
Interest expense for the six-month period ended June 30, 2000 increased
$22,664. Interest expense for the three-month period ended June 30, 2000
increased $6,781. The increases were due to increased borrowings under
the Company's line of credit agreement.
Gains on the sale of property and equipment were $168,532 for the six-month
period ended June 30, 2000, as compared to $315,134 for the corresponding
period in 1999. Gains in 2000 are the result of the sales of timber and
equipment from the Company's rubber plant in Clarksville, Tennessee. Gains
in 1999 were the result of the sale of timber and the exchange of marketable
securities.
The Company has a 50% interest in a joint venture, Vulcan Brunswick Bowling
Pin Company (VBBPC) which manufactures bowling pins in Antigo, Wisconsin, for
Brunswick and the Company. The Company received cash distributions of
$150,000 from VBBPC during the first six months of 2000. The Company's
interest in VBBPC is included in other assets at June 30, 2000.
-10-
PART I - FINANCIAL INFORMATION
(Continued)
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations. (Continued)
Summarized income statement information for VBBPC consists of the following:
Six Months Ended June 30, Three Months ended June 30,
2000 1999 2000 1999
Net sales $4,296,148 4,150,605 2,151,060 2,064,253
Costs and expenses 3,829,123 3,773,277 1,920,233 1,876,593
--------- --------- --------- ---------
Net income $ 467,025 377,328 230,827 187,660
========= ========= ========= =========
Company's 50% equity
in net income $ 233,512 188,664 115,413 93,830
========= ========= ========= =========
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash requirements during the second quarter of 2000 were funded
in part through earnings and noncash charges such as depreciation and
amortization, a $150,000 distribution from the joint venture and from the sale
of timber and equipment. The cash from these transactions was primarily used
in operations. The Company expects to continue, when necessary, to use
short-term borrowings to meet cash requirements not fully provided by
earnings, depreciation and amortization. During the six months ended June 30,
2000, 21,981 shares of treasury stock were acquired for $715,640, and 15,000
shares were sold to a director of the Company for $466,875. There were
approximately $21,000 of commitments for capital expenditures as of June 30,
2000.
Item 3. Quantitative and Qualitative Disclosures about Market Risks
There have been no significant changes in the Company's market risk, primarily
associated with marketable securities, since December 31, 1999.
-11-
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
The Registrant has been advised that it is a potentially responsible party,
together with 18 other parties, with regard to the Resolve, Inc. Superfund
Site, located in North Dartmouth, Massachusetts, with potential joint and
several liability of $5.7 million. The Resolve site was a waste chemical
reclamation facility. The environmental problem at the site involves soil
contamination including, particularly, PCB contaminants. The Registrant is
contesting all liability. The Registrant's liability, if any, cannot be
estimated at this time. It is the understanding of Registrant that clean-up
at the site will involve treatment of contaminated soil and ground water.
There may be other potential clean-up liability at other sites of which the
Registrant has no specific knowledge.
The Registrant and its subsidiaries are party to other matters and claims
which are normal in the course of operations. While the results of
litigation and claims cannot be predicted with certainty, based on advice of
counsel, the Registrant believes that the final outcome of such matters will
not have a materially adverse effect on its consolidated financial condition.
Item 6. Exhibits and Reports on Form 8-K.
a. Exhibits
Exhibit SB 601 Page
No. Ref. No. Description No.
27 602 (b) (27) Financial Data Schedule
for the Six Months Ended
June 30, 2000 12
b. The Company was not required to file Form 8-K for the quarter
ended June 30, 2000.
-12-
PART II - OTHER INFORMATION
(Continued)
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.
VULCAN INTERNATIONAL CORPORATION
August 10, 2000 By: /s/Benjamin Gettler
------------------------------------
Date Chairman of the Board, President
and Chief Executive Officer
August 10, 2000 By: /s/Vernon E. Bachman
------------------------------------
Date Vice President, Secretary-Treasurer
and Principal Accounting Officer
-13-