SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended JANUARY 31, 2000 Commission file number 0-11306 ------- VALUE LINE, INC. ---------------- (Exact name of registrant as specified in its charter) New York 13-3139843 ------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 220 East 42nd Street, New York, New York 10017-5891 ------------------------------------------------------------------------- (address of principal executive offices) (zip code) Registrant's telephone number including area code (212) 907-1500 -------------- 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 lasted practicable date. Class Outstanding at January 31, 2000 ----- ------------------------------- Common stock, $.10 par value 9,978,625 Shares ----------------
PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS VALUE LINE, INC. CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE AMOUNTS) (UNAUDITED) <TABLE> <CAPTION> Jan. 31, April 30, 2000 1999 ------------ --------------- <S> <C> <C> Assets Current Assets: Cash and cash equivalents (including short term investments of $42,960 and $41,250, respectively) $43,667 $41,826 Trading securities 18,587 14,023 Accounts receivable, net of allowance for doubtful accounts of $286 and $295, respectively 1,849 1,846 Receivable from affiliates 3,144 2,587 Prepaid expenses and other current assets 4,204 2,817 Deferred income taxes 418 418 ------------ --------------- Total current assets 71,869 63,517 Long term securities available for sale 204,079 168,591 Property and equipment, net 10,982 11,662 Goodwill 35 37 ------------ --------------- Total assets $286,965 $243,807 ============ =============== Liabilities and Shareholders' Equity Current Liabilities: Accounts payable and accrued liabilities $8,712 $5,842 Accrued salaries 1,448 1,765 Dividends payable 2,494 2,495 Accrued taxes payable 4,554 741 ------------ --------------- Total current liabilities 17,208 10,843 Unearned revenue 38,622 43,100 Deferred income taxes 29,814 22,264 Deferred charges 489 697 Shareholders' Equity: Common stock, $.10 par value; authorized 30,000,000 shares; issued 10,000,000 shares 1,000 1,000 Additional paid-in capital 959 959 Retained earnings 145,494 125,585 Treasury stock, at cost (21,375 shares on 1/31/00, and 4/30/99) (411) (411) Other comprehensive income 53,790 39,770 ------------ --------------- Total shareholders' equity 200,832 166,903 ------------ --------------- Total liabilities and shareholders' equity $286,965 $243,807 ============ =============== </TABLE> The accompanying notes are an integral part of these financial statements. 2
PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS VALUE LINE, INC. CONSOLIDATED STATEMENTS OF INCOME (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED) <TABLE> <CAPTION> Three months ended Nine months ended Jan. 31, Jan. 31, 2000 1999 2000 1999 ----------- ----------- ---------- ----------- <S> <C> <C> <C> <C> Revenues: Investment periodicals and related publications $14,421 $15,508 $43,821 $46,588 Investment management fees & svcs 9,644 8,030 27,490 24,479 Gain on sale of operating facility --- --- --- 518 ----------- ----------- ---------- ----------- Total revenues 24,065 23,538 71,311 71,585 ----------- ----------- ---------- ----------- Expenses: Advertising and promotion 6,760 5,769 14,668 13,318 Salaries and employee benefits 6,161 6,022 17,956 17,748 Production and distribution 1,661 1,739 4,973 5,418 Office and administration 2,397 2,203 6,511 6,723 ----------- ----------- ---------- ----------- Total expenses 16,979 15,733 44,108 43,207 ----------- ----------- ---------- ----------- Income from operations 7,086 7,805 27,203 28,378 Income from securities transactions, net 14,976 5,281 17,372 5,392 ----------- ----------- ---------- ----------- Income before income taxes 22,062 13,086 44,575 33,770 Provision for income taxes 7,969 4,892 17,182 13,646 ----------- ----------- ---------- ----------- Net income $14,093 $8,194 $27,393 $20,124 =========== =========== ========== =========== Earnings per share, basic & fully diluted $1.41 $0.82 $2.75 $2.02 =========== =========== ========== =========== </TABLE> The accompanying notes are an integral part of these financial statements. 3
PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS VALUE LINE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) (UNAUDITED) <TABLE> <CAPTION> For the nine months ended Jan. 31, Jan. 31, 2000 1999 -------- -------- <S> <C> <C> Cash flows from operating activities: Net income $27,393 $20,124 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,232 1,339 (Gains) on sales of trading securities and securities held for sale (12,964) (2,347) Unrealized (gains) on trading securities (1,327) (978) (Gains)/losses on sale of equipment and operating facility 3 (518) Writedown of equipment --- 84 Changes in assets and liabilities: Decrease in unearned revenue (4,478) (2,289) Decrease in deferred charges (208) (208) Increase in accounts payable and accrued expenses 2,869 1,291 Decrease in accrued salaries (317) (402) Increase in accrued taxes payable 3,813 1,741 (Increase)/decrease in prepaid expenses and other current assets (1,387) 335 (Increase) in accounts receivable (157) (526) (Increase) in receivable from affiliates (557) (379) --------- -------- Total adjustments (13,478) (2,857) --------- -------- Net cash provided by operations 13,915 17,267 Cash flows from investing activities: Proceeds from sales of long term securities 11,528 2,922 Purchases of long term securities (14,416) (6,392) Proceeds from sales of trading securities 20,870 8,218 Purchases of trading securities (22,019) (13,294) Acquisitions of property, and equipment, net (556) (686) Proceeds from sale of operating facility 3 583 -------- -------- Net cash (used in) investing activities (4,590) (8,649) Cash flows from financing activities: Dividends paid (7,484) (7,484) -------- -------- Net cash (used in) financing activities (7,484) (7,484) -------- -------- Net increase in cash and cash equivalents 1,841 1,134 Cash and cash equivalents at beginning of period 41,826 29,937 -------- -------- Cash and cash equivalents at end of period $43,667 $31,071 ======== ======== </TABLE> The accompanying notes are an integral part of these financial statements. 4
PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS VALUE LINE, INC. STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE NINE MONTHS ENDED JANUARY 31, 2000 (in thousands, except share amounts) (UNAUDITED) <TABLE> <CAPTION> Common stock Accumulated Number Additional Other of paid-in Treasury Comprehensive Retained Comprehensive shares Amount capital Stock income earnings income Total ----------- ------- ------------ --------- -------------- ---------- ------------- ----------- <S> <C> <C> <C> <C> <C> <C> <C> <C> Balance at May 1, 1999 9,978,125 $1,000 $959 ($411) $125,585 $39,770 $166,903 Comprehensive income Net income $27,393 27,393 27,393 Other comprehensive income, net of tax: Change in unrealized gains on securities 14,020 14,020 14,020 -------------- Comprehensive income $41,413 ============== Dividends declared (7,484) (7,484) ----------- ------- ------------ --------- ---------- ------------- ----------- Balance at January 31, 2000 9,978,125 $1,000 $959 ($411) $145,494 $53,790 $200,832 =========== ======= ============ ========= ========== ============= =========== </TABLE> The accompanying notes are an integral part of these financial statements. 5
PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS VALUE LINE, INC. STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE NINE MONTHS ENDED JANUARY 31, 1999 (in thousands, except share amounts) (UNAUDITED) <TABLE> <CAPTION> Common stock Accumulated Number Additional Other of paid-in Treasury Comprehensive Retained Comprehensive shares Amount capital Stock income earnings income Total ----------- ------ ----------- --------- ------------- --------- ------------- -------- <S> <C> <C> <C> <C> <C> <C> <C> <C> Balance at May 1, 1998 9,978,625 $1,000 $959 ($411) $108,392 $26,997 136,937 Comprehensive income Net income $20,124 20,124 20,124 Other comprehensive income, net of tax: Change in unrealized gains on securities 11,829 11,829 11,829 --------------- Comprehensive income $31,953 =============== Dividends declared (7,484) (7,484) ----------- ------ ----------- --------- ----------- ------------- -------- Balance at January 31, 1999 9,978,625 $1,000 $959 ($411) $121,032 $38,826 $161,406 =========== ====== =========== ========= =========== ============= ======== </TABLE> The accompanying notes are an integral part of these financial statements. 6
VALUE LINE, INC. NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS SIGNIFICANT ACCOUNTING POLICIES - NOTE 1: In the opinion of management, the accompanying unaudited consolidated condensed financial statements contain all adjustments (consisting of normal recurring accruals except as noted below) considered necessary for a fair presentation. This report should be read in conjunction with the financial statements and footnotes contained in the Company's annual report on Form 10-K, dated July 15, 1999 for the fiscal year ended April 30, 1999. Results of operations covered by this report may not be indicative of the results of operations for the entire year. Cash and Cash Equivalents: The Company considers all cash held at banks and invested in the Value Line money market funds with an original maturity of less than three months to be cash and cash equivalents. As of January 31, 2000 and April 30, 1999, cash equivalents included $42,410,000 and $40,925,000, respectively, invested in the Value Line money market funds. Valuation of Securities: The Company's long-term securities portfolio, which consists of shares of the Value Line Mutual Funds, is valued at market value in accordance with Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities". Unrealized gains and losses on these securities are reported, net of applicable taxes, as a separate component of Shareholders' Equity. Realized gains and losses on sales of the securities are recorded in earnings on trade date and are determined on the identified cost method. Trading securities, which consist of securities held by Value Line Securities, Inc., the Company's broker-dealer subsidiary, are valued at market with realized and unrealized gains and losses included in earnings. Earnings per Share, basic & fully diluted: Earnings per share are based on the weighted average number of shares of common stock outstanding during the period. Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. 7
VALUE LINE, INC. NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS MARKETABLE SECURITIES - NOTE 2: Trading Securities: Securities held by Value Line Securities, Inc. had an aggregate cost of $15,151,000 and $11,914,000 and a market value of $18,587,000 and $14,023,000 at January 31, 2000 and April 30, 1999, respectively. Long-Term Securities Available for Sale: The aggregate cost of the long-term securities was $121,323,000 and $107,406,000 and the market value was $204,079,000 and $168,591,000 at January 31, 2000 and April 30, 1999, respectively. At January 31, 2000, the increase in gross unrealized appreciation on these securities of $21,570,000, net of deferred taxes of $7,550,000, was included in shareholders' equity. The Company received gross proceeds of $11,528,000 and $2,922,000 from sales of long term securities during fiscal 2000 and fiscal 1999. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION - NOTE 3: Cash payments for income taxes were $13,827,000 and $11,995,000 during the nine months ended January 31, 2000 and 1999, respectively. DISCLOSURE OF CREDIT RISK OF FINANCIAL INSTRUMENTS WITH OFF BALANCE SHEET RISK - NOTE 4: In the normal course of business, the Company enters into contractual committments, principally financial futures contracts for securities indices. Financial futures contracts provide for the delayed delivery of financial instruments for which the seller agrees to make delivery at a specified future date, at a specified price or yield. The contract or notional amount of these contracts reflects the extent of involvement the Company has in these contracts. At January 31, 2000, the Company did not have an investment in financial futures contracts. The average fair value of committments during fiscal 2000 was $1,832,000. Risk arises from the potential inability of counterparts to meet the terms of their contracts and from movements in securities values. The Company limits its credit risk associated with such instruments by entering exclusively into exchange traded futures contracts. No single customer accounted for a significant portion of the Company's sales nor accounts receivables in fiscal 2000 or fiscal 1999. 8
VALUE LINE, INC. NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS COMPREHENSIVE INCOME - NOTE 5: Statement no. 130 requires the reporting of comprehensive income in addition to net income from operations. Comprehensive income is a more inclusive financial reporting methodology that includes disclosure of certain financial information that historically has not been recognized in the calculation of net income. At January 31, 2000 and 1999, the Company held long term securities classified as available-for-sale. The increase during the first nine months of fiscal 2000 in gross unrealized gains on these securities and the related deferred taxes was $21,570,000 and $7,550,000, respectively. The increase during the first nine months of fiscal 1999 in gross unrealized gains on these securities and the related deferred taxes was $18,198,000 and $6,369,000, respectively. ESTIMATED FAIR VALUE OF FINANCIAL AND DERIVATIVE INSTRUMENTS - NOTE 6: Statement of Accounting Standards No. 119, "Disclosure About Derivative Financial Instruments and Fair Value of Financial Instruments," requires disclosure of information regarding derivative instruments, which include financial index futures contracts. Derivative instruments held for trading purposes are reflected at fair value at January 31, 2000 and April 30, 1999. Net realized trading losses related to derivative financial instruments amounted to $439,000 at January 31, 2000. Income from securities transactions in the Statement of Income are reflected net of derivative trading activity. GAIN ON SALE OF OPERATING FACILITY - NOTE 7: Pursuant to the Company's realignment of its production and distribution departments, the Company sold its idle North Bergen, New Jersey operating facility during May 1998 for which it received gross proceeds of $577,000. The gain on the sale of the operating facility is included in revenues in the Consolidated Statements of Income. 9
VALUE LINE, INC. NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS RELATED PARTY TRANSACTIONS - NOTE 8: The Company acts as investment adviser and manager for fifteen open-ended investment companies, the Value Line Family of Funds. The Company earns investment management fees based upon the average daily net asset values of the respective funds. The Company also earns brokerage commission income, net of clearing fees, on securities transactions executed by Value Line Securities, Inc. on behalf of the funds that are cleared on a fully disclosed basis through non-affiliated brokers. For the nine months ended January 31, 2000 and 1999 investment management fees and brokerage commission income, net of clearing fees, amounted to $24,656,000, and $20,915,000, respectively. The related receivables from the funds for management advisory fees included in Receivable from affiliates were $3,025,000 and $2,487,000 at January 31, 2000 and April 30, 1999, respectively. For the nine months ended January 31, 2000 and January 31, 1999, the Company was reimbursed $387,000 and $381,000, respectively, for payments it made on behalf of and services it provided to the Parent. At January 31, 2000 and April 30, 1999, Receivable from affiliates included a receivable from the Parent of $51,000 and $26,000, respectively. For the nine months ended January 31, 2000 the Company made federal income tax payments to the Parent amounting to $10,900,000. BUSINESS SEGMENTS - NOTE 9: The Company operates two reportable business segments: Publishing and Investment Management Services. The publishing segment produces investment related periodicals in both print and electronic form. The investment management segment provides advisory services to mutual funds, institutional and individual clients as well as brokerage services for the Value Line family of mutual funds. The segments are differentiated by the products and services they offer. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company allocates all revenues and expenses, except for depreciation related to corporate assets, between the two reportable segments. 10
VALUE LINE, INC. NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS Disclosure of Reportable Segment Profit and Segment Assets (in thousands) <TABLE> <CAPTION> January 31, 2000 Publishing Investment Total Management Services <S> <C> <C> <C> Revenues from external customers $43,821 $27,490 $71,311 Intersegment revenues 35 -- 35 Income from securities transactions 188 17,184 17,372 Depreciation and amortization 1,164 15 1,179 Segment profit 14,468 12,788 27,256 Segment assets 20,940 264,952 285,892 Expenditures for segment assets 554 2 556 <CAPTION> January 31, 1999 Publishing Investment Total Management Services <S> <C> <C> <C> Revenues from external customers $46,588 $24,479 $71,067 Gain on sale of operating facility 518 -- 518 Intersegment revenues 29 -- 29 Income from securities transactions 187 5,205 5,392 Depreciation and amortization 1,259 17 1,276 Segment profit 16,000 12,441 28,441 Segment assets 18,947 217,297 236,244 Expenditures for segment assets 684 2 686 </TABLE> 11
VALUE LINE, INC. NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS Reconciliation of Reportable Segment Revenues, Operating Profit and Assets (in thousands) <TABLE> <CAPTION> January 31, 2000 1999 <S> <C> <C> Revenues Total revenues for reportable segments $71,346 $71,614 Elimination of intersegment revenues ($35) ($29) ------------------------- Total consolidated revenues $71,311 $71,585 ========================= Segment profit Total profit for reportable segments $44,628 $33,833 Less: Depreciation related to corporate assets (53) (63) ------------------------- Income before income taxes $44,575 $33,770 ========================= Assets Total assets for reportable segments $285,892 $236,244 Corporate assets 1,073 2,253 ------------------------- Consolidated total assets $286,965 $238,497 ========================= </TABLE> 12
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS: LIQUIDITY AND CAPITAL RESOURCES: Value Line, Inc. (the Company) had liquid resources, which are used in its business, of $258,740,000 at January 31, 2000. In addition to $54,661,000 of working capital, the Company had long-term securities available for sale with a market value of $204,079,000, that, although classified as non-current assets, are also readily marketable should the need arise. The Company's cash flow from operations of $13,915,000 for the third quarter ended fiscal 2000 was lower than fiscal 1999 cash flow of $17,267,000. This was primarily due to the higher volume of prepayments for subscriptions during fiscal 1999, and the prepayment during fiscal 2000 of certain future promotional costs. Net cash outflows for investing activities during fiscal 2000 were $4,059,000 lower than fiscal 1999 outflows primarily due to a substantial increase in proceeds from sales of trading and long-term securities. Year 2000 (Y2K): During the Y2K rollover, the Company's systems and those of its third party critical vendors performed without any problems. Value Line continues all operations without any Y-2K related issues, both internally and externally including the use of the Company's products by our clients. The effective transition was the result of Value Line's extensive year 2000 planning. The Company's fiscal year 1998 expenditures for the Y2K project were $251,000. The Company's fiscal year 1999 expenditures for the Y2K project were $732,000. The Company's fiscal year 2000 expenditures through January 31, 2000 for the Y2K project were $486,000. These expenditures include new software and hardware, allocation of staff time, temporary assistance for clerical tasks, legal counsel, testing tools and external, third-party monitoring of the Company's Y2K implementation plan. Management believes that the Company's cash and other liquid asset resources used in its business together with the future cash flows from operations will be sufficient to finance current and forecasted operations. Management anticipates no borrowing for fiscal year 2000. RESULTS OF OPERATIONS: Revenues of $24,065,000 for the three months ended January 31, 2000 were the highest of any third quarter period in the Company's history. Revenues of $71,311,000 for the first nine months of fiscal year 2000, the second highest in Value Line's history were 1%, below the prior year's revenues of $71,585,000. Net income for the nine months ended January 31, 2000 was $27,393,000, or $2.75 per share, an increase of 72% when compared to the prior year's net income of $20,124,000, or $2.02 per share. Operating income of $27,203,000 for the nine months ended January 31, 2000, ranked the third highest in the history of the Company, surpassed only by the operating income for the nine months of the last two fiscal years. Both revenues and operating income for last fiscal year include a gain of $518,000 from the sale of the vacant North Bergen, New Jersey operating facility. The Company's securities portfolios produced income of $17,372,000 for the nine months ended January 31, 2000, an increase of $11,980,000 over last year's income of $5,392,000. This was primarily due to an increase of $8,100,000 in capital gain distributions from the Value Line mutual funds, an additional $2,860,000 in capital gains from the Company's trading portfolio and an increase of $801,000 in dividend income. The strong rally in the Value Line equity mutual funds and trading portfolios during the first nine months of fiscal 2000 was mainly responsible for the increase in income from securities 13
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS: transactions. Each of the Value Line equity mutual funds outperformed their respective benchmark equity indexes by a considerable margin for the twelve months ended December 31, 1999. Subscription revenues of $43,821,000 were 6% below revenues from the prior fiscal year. The decrease in subscription revenues compared to the prior year is due primarily to an 8% net decrease in revenues from THE VALUE LINE INVESTMENT SURVEY print edition and related products. The decrease in publication revenues is largely a result of the reduced level of advertising that occurred while the Company has been in the process of revising its advertising strategy. This decline in revenues from THE VALUE LINE INVESTMENT SURVEY was offset in part by increased revenues from THE VALUE LINE INVESTMENT SURVEY FOR WINDOWS, THE VALUE LINE INVESTMENT SURVEY - CONDENSED EDITION and VALUE LINE SELECT products. Investment management fees and services revenues of $27,490,000 for the nine months ended January 31, 2000, were $3,011,000, or 12%, above the prior year's revenues. The higher revenues from investment management fees and services, compared to the prior year, resulted primarily from the increase in the year-over-year average net assets under management in the Company's mutual funds. Reduced revenues from individually managed asset accounts partially offset the increased revenues from the Company's mutual funds. Assets under management in the Company's mutual funds at January 31, 2000 increased 12% from the level at January 31, 1999. Operating expenses for the nine months ended January 31, 2000 of $44,108,000 were 2% above last year's expenses of $43,207,000. Total company-wide advertising and promotional expenses of $14,668,000 were 10% above the prior year's expenses. When compared to the prior year, savings from the planned reduction of television advertising through January 31, 2000 were offset by the increase in expenses relating to a selling arrangement for two of the Company's equity mutual funds of which the Company is the adviser. Additionally, the increase in promotion fees to discount brokers based on invested assets in the Value Line mutual funds also contributed to the higher advertising expenses. Salaries and employee benefit expenses of $17,956,000 were 1% above expenses of $17,748,000 recorded in the prior fiscal year. Production and distribution costs of $4,973,000 were 8% below expenses of $5,418,000 for the nine months ended January 31, 1999. The lower expenses resulted from a decrease in maintenance expenses related to the Company's web-site and a decline in paper, printing and distribution expenses that were directly related to lower production runs for print publications. Office and administration expenses of $6,511,000 were 3% below last year's expenses of $6,723,000. The decline in administrative expenses from last year is the result of reduced professional fees and lower telecommunication and depreciation expenses. Additional costs included in fiscal year 2000 include expenses related to the amortization of capitalized employee salaries and fringe benefits associated with the adoption in the latter half of fiscal year 1999 of SOP 98-1 "Accounting for the Costs of Computer Software Developed for Internal Use". 14
VALUE LINE, INC. Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Form 10Q report for the period ended January 31, 2000 to be signed on its behalf by the undersigned thereunto duly authorized. Value Line, Inc. (Registrant) Date: March 15, 2000 By: /s/ Jean Bernhard Buttner ----------------------------------- Jean Bernhard Buttner Chairman & Chief Executive Officer Date: March 15, 2000 By: /s/ Stephen R. Anastasio ----------------------------------- Stephen R. Anastasio Chief Accounting Officer 15