1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of 1934 FORM 10-Q For Quarter Ended July 31, 1998 Commission File Number 1-8777 VIRCO MFG. CORPORATION - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in its Charter) Delaware 95-1613718 ------------------------------- ---------------- (State or other jurisdiction of (I.R.S. Employer Incorporation or organization) Identification No.) 2027 Harpers Way, Torrance, CA 90501 - -------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (310) 533-0474 No change - -------------------------------------------------------------------------------- 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 [ ] The number of shares outstanding of each of the issuer's classes of common stock, as of September 1, 1998. Common Stock 9,803,344 Shares * * Adjusted for 10% stock dividend declared August 11, 1998, date of record September 4, 1998, payable September 30, 1998.
2 VIRCO MFG. CORPORATION AND SUBSIDIARIES INDEX Part I. Financial Information Item 1. Financial Statements (unaudited) Condensed consolidated balance sheets - July 31, 1998 and January 31, 1998. Condensed consolidated statements of income - Three months ended July 31, 1998 and 1997. Condensed consolidated statements of income - Six months ended July 31, 1998 and 1997. Condensed consolidated statements of cash flows - Three months ended July 31, 1998 and 1997. Condensed consolidated statements of cash flows - Six months ended July 31, 1998 and 1997. Notes to condensed consolidated financial statements - July 31, 1998. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Part II. Other Information Item 4. Submission of matters to a vote of Security Holders. Item 6. Exhibits & Reports on Form 8-K. Signatures 2
3 PART 1 Item 1. Financial Statements VIRCO MFG. CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS Unaudited (Note 1) (Dollar amounts in thousands) <TABLE> <CAPTION> ASSETS 7/31/98 1/31/98 ------ ------- ------- <S> <C> <C> Current assets Cash $ 4,918 $ 1,221 Accounts and notes receivable 45,017 26,942 Less allowance for doubtful accounts (430) (100) --------- --------- Net accounts and notes receivable 44,587 26,842 Inventories (note 2) Finished goods 34,076 25,467 Work in process 8,471 8,739 Raw materials and supplies 10,109 9,656 --------- --------- Total inventories 52,656 43,862 Prepaid expenses and deferred income tax 3,238 2,294 --------- --------- Total current assets 105,399 74,219 Property, plant & equipment Cost 79,862 75,754 Less accumulated depreciation (37,003) (36,385) --------- --------- Net property, plant & equipment 42,859 39,369 Other assets 9,740 8,427 --------- --------- $ 157,998 $ 122,015 ========= ========= </TABLE> The accompanying notes are an integral part of these condensed financial statements. 3
4 VIRCO MFG. CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS Unaudited (Note 1) (Dollar amounts in thousands) <TABLE> <CAPTION> LIABILITIES AND SHAREHOLDERS' EQUITY 7/31/98 1/31/98 ------------------------------------ ------- ------- <S> <C> <C> Current liabilities Checks released but not yet cleared bank $ 4,460 $ 3,200 Accounts payable 13,832 13,324 Income taxes payable 3,169 -- Current maturities on long-term debt 3,400 3,442 Other current liabilities 10,859 10,221 --------- --------- Total current liabilities 35,720 30,187 Non-current liabilities Long term debt (less current portion) 33,879 9,459 Other non-current liabilities 4,053 4,053 --------- --------- Total non-current liabilities 37,932 13,512 Deferred income taxes 991 991 Shareholders' equity Preferred stock: Authorized 3,000,000 shares, $.01 par value; none issued or outstanding -- -- Common stock: Authorized 25,000,000 shares, $.01 par value; 8,990,032 shares issued at 7/31/98 and 8,909,183 shares issued at 1/31/98 90 89 Additional paid-in capital 50,673 50,301 Retained earnings 34,223 27,423 Less treasury stock at cost (70,501 Shares) (1,419) (172) Loan to ESOP trust (212) (316) --------- --------- Total shareholders' equity 83,355 77,325 --------- --------- $ 157,998 $ 122,015 ========= ========= </TABLE> The accompanying notes are an integral part of these condensed financial statements. 4
5 VIRCO MFG. CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME Unaudited (Note 1) (Dollar amounts in thousands, except per share data) <TABLE> <CAPTION> 3 Months Ended -------------- 7/31/98 7/31/97 ------- ------- <S> <C> <C> Net sales $ 87,539 $ 83,809 Cost of goods sold 58,884 56,817 ----------- ----------- Gross profit 28,655 26,992 Shipping, selling, general and administrative expense 17,512 16,573 Provision for doubtful accounts 248 240 Provision for plant shut down -- 2,600 Interest expense 530 760 ----------- ----------- 18,290 20,173 Income before income taxes 10,365 6,819 Income taxes 3,997 2,591 ----------- ----------- Net income $ 6,368 $ 4,228 =========== =========== Earnings per share .65 .43 Earnings per share - assuming dilution .63 .42 Weighted average shares outstanding (a) 9,831,463 9,745,388 Weighted average shares outstanding- assuming dilution (a) 10,104,253 10,040,017 Dividend per share Cash (a) $ .018 $ .015 Stock -- -- </TABLE> (a) Adjusted for 10% stock dividend declared August 11, 1998. The accompanying notes are an integral part of these condensed financial statements. 5
6 VIRCO MFG. CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME Unaudited (Note 1) (Dollar amounts in thousands, except per share data) <TABLE> <CAPTION> 6 Months Ended -------------- 7/31/98 7/31/97 ------- ------- <S> <C> <C> Net sales $ 132,477 $ 124,767 Cost of goods sold 89,147 84,574 ----------- ----------- Gross profit 43,330 40,193 Shipping, selling, general and administrative expense 30,524 28,354 Provision for doubtful accounts 387 367 Provision for plant shut down -- 2,600 Interest expense 780 1,247 ----------- ----------- 31,691 32,568 Income before income taxes 11,639 7,625 Income taxes 4,481 2,898 ----------- ----------- Net income 7,158 $ 4,727 =========== =========== Earnings per share .73 .49 Earnings per share - assuming dilution .71 .47 Weighted average shares outstanding (a) 9,833,889 9,745,388 Weighted average shares outstanding- assuming dilution (a) 10,107,408 10,001,137 Dividend per share Cash (a) $ .036 $ .030 Stock -- -- </TABLE> (b) Adjusted for 10% stock dividend declared August 11, 1998. The accompanying notes are an integral part of these condensed financial statements. 6
7 VIRCO MFG. CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Unaudited (note 1) (Dollar amounts in thousands, except per share data) <TABLE> <CAPTION> 3 Months Ended -------------- 7/31/98 7/31/97 ------- ------- <S> <C> <C> Cash flows from operating activities Net income $ 6,368 $ 4,228 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 1,697 1,699 Provision for doubtful accounts 248 214 (Gain)/loss on sales of fixed assets 128 43 Change in assets and liabilities: Accounts and notes receivable (20,719) (19,934) Inventories 3,972 6,716 Prepaid expenses and deposits (755) (188) Income taxes receivable/payable 2,787 1,866 Other assets (267) -- Accounts payable and accrued expenses 2,794 2,942 -------- -------- Net cash used in operating activities (3,747) (2,414) Cash flows from investing activities Capital expenditures (4,968) (1,304) Proceeds from sale of assets 930 -- Net investment in life insurance (230) (11) Restricted short term investments -- 229 -------- -------- Net cash used in investing activities (4,268) (1,086) Cash flows from financing activities Issuance of long-term debt 13,152 4,514 Repayment of long-term debt (186) (187) Payment of cash dividend (179) (148) Purchase of treasury stock (950) -- Issuance of common stocks 43 54 Loans to ESOP 87 (334) -------- -------- Net cash provided by financing activities 11,967 3,899 Net change in cash 3,952 399 Cash at beginning of quarter 966 1,314 -------- -------- Cash at end of quarter $ 4,918 $ 1,713 ======== ======== </TABLE> The accompanying notes are an integral part of these condensed financial statements. 7
8 VIRCO MFG. CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Unaudited (note 1) (Dollar amounts in thousands, except per share data) <TABLE> <CAPTION> 6 Months Ended -------------- 7/31/98 7/31/97 ------- ------- <S> <C> <C> Cash flows from operating activities Net income $ 7,158 $ 4,727 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 3,394 3,389 Provision for doubtful accounts 387 334 (Gain)/loss on sales of fixed assets 128 43 Change in assets and liabilities: Accounts and notes receivable (18,132) (16,025) Inventories (8,794) (9,839) Prepaid expenses and deposits (944) (554) Income taxes receivable/payable 3,169 1,967 Other assets (323) 299 Accounts payable and accrued expenses 2,406 974 -------- -------- Net cash used in operating activities (11,551) (14,685) Cash flows from investing activities Capital expenditures (7,942) (3,002) Proceeds from sale of assets 930 -- Net investment in life insurance (990) (710) Restricted short term investments -- 224 -------- -------- Net cash used in investing activities (8,002) (3,488) Cash flows from financing activities Issuance of long-term debt 24,749 19,911 Repayment of long-term debt (371) (310) Payment of cash dividend (358) (296) Purchase of treasury stock (950) -- Issuance of common stocks 76 54 Loans to ESOP 104 (195) -------- -------- Net cash provided by financing activities 23,250 19,164 Net change in cash 3,697 991 Cash at beginning of period 1,221 722 -------- -------- Cash at end of period $ 4,918 $ 1,713 ======== ======== </TABLE> The accompanying notes are an integral part of these condensed financial statements. 8
9 VIRCO MFG. CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS July 31, 1998 and July 31, 1997 Note 1: The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three-month period ended July 31, 1998 are not necessarily indicative of the results that may be expected for the year ended January 31, 1999. For further information, refer to the consolidated financial statements and footnotes thereto included in the Registrant Company and Subsidiaries' annual report on Form 10-K for the year ended January 31, 1998. Note 2. Inventory Year-end financial statements reflect inventories verified by physical counts with the material content valued by the LIFO method. At this interim date, there has been no physical verification of inventory quantities. Cost of sales is recorded at current cost. The effect of penetrating LIFO layers is not recorded at interim dates unless the reduction in inventory is expected to be permanent. No such adjustment has been made for the period ended July 31, 1998. Management continually monitors production costs, material costs and inventory levels to determine that interim inventories are fairly stated. Note 3. Income Taxes The Company adopted Statement of Financial Accounting Standards (SFAS) No 109. Income taxes for the six month period ended July 31, 1998 were computed using the effective tax rate estimated to be applicable for the full fiscal year, which is subject to ongoing review and evaluation by management. Note 4. Significant Accounting Policies In 1997, the Company adopted SFAS No. 128, "Earnings Per Share." SFAS No. 128, which replaced the calculation of primary and fully diluted net income per share with basic and diluted net income per share. Basic net income per share is calculated by dividing net income by the weighted average number of common shares outstanding. Diluted net income per share is calculated by dividing net income by the weighted average number of common shares outstanding plus the dilutive effect of convertible securities. All prior year net income per share data has been restated in accordance with the new standard. 9
10 <TABLE> <CAPTION> 3 MONTHS ENDED 6 MONTHS ENDED ----------------------- ---------------------- 7/31/98 7/31/97 7/31/98 7/31/98 ------- ------- ------- ------- <S> <C> <C> <C> <C> Numerator: Net Income $ 6,367,000 $ 4,228,000 $ 7,157,000 $ 4,727,000 Denominator: Denominator for basic earnings per share - weighted-average 9,831,463 9,745,388 9,833,889 9,745,388 shares Dilutive potential common shares 272,790 294,629 273,519 255,749 ----------- ----------- ----------- ----------- Denominator for diluted earnings per share - adjusted weighted-average shares and assumed 10,104,253 10,040,017 10,107,408 10,001,137 conversions Basic earnings per share $ 0.65 $ 0.43 $ 0.73 $ 0.49 Diluted earnings per share $ 0.63 $ 0.42 $ 0.71 $ 0.47 </TABLE> In 1998, the Company adopted SFAS No, 130, "Reporting Comprehensive Income." The Statement established standards for the reporting and display of comprehensive income, which comprises certain specific items previously reported directly in stockholders' equity. Other comprehensive income comprises items such as unrealized gains and losses on debt and equity securities classified as available-for-sale securities, minimum pension liability adjustments, and foreign currency translation adjustments. The Company does not believe adoption of this SOP will have a material impact on the Company's financial statements. In June 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 131 ("SFAS 131"), "Disclosures about Segments of an Enterprise and Related Information: SFAS 131 provides accounting guidance for reporting and requires such enterprises to report selected information about operating segments in interim financial reports. The statement uses a "management approach" to identify operating segments and provides specific criteria for operating segments. SFAS 131 is effective for the year ended January 31, 1999 and will be required for interim periods in 1999. The adoption of this SFAS has no impact on the way the Company reports or has reported its financial statements. In March 1998, the AICPA issued SOP 98-1, Accounting For the Costs of Computer Software Developed For or Obtained for Internal-Use. The SOP is effective for the Company beginning on February 1, 1999. The SOP will require the capitalization of certain costs incurred after the date of adoption in connection with developing or obtaining software for internal-use. The Company currently capitalizes costs associated with software developed for its own use. The Company does not believe adoption of this SOP will have a material impact on the Company's future earnings or financial position. 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"). SFAS 133 establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and hedging activities. SFAS 133 is effective for the Company for all fiscal quarters of fiscal years beginning February 1, 2001. The adoption of this SFAS has no impact on the way the Company reports or has reported its financial statements. 10
11 PART II VIRCO MFG. CORPORATION SUBSIDIARIES Other Information Item 4. Submission of matters to a vote of Security Holders The following is a description of matters submitted to a vote of registrant's stockholders at the annual Meeting of Stockholders held June 23, 1998. Election of three directors whose term expire in 2001. <TABLE> <CAPTION> Votes For --------- <S> <C> George W. Ott 7,466,002 John H. Stafford 7,462,211 Douglas A. Virtue 7,460,860 Approval to amend the Company's Certificate 5,836,155 of Incorporation to increase the number of authorized shares of common stocks. </TABLE> Item 6. Exhibits and Reports on Form 8-K None 11
12 VIRCO MFG. CORPORATION Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Results of Operations: For the second quarter of 1998, the Company earned a net profit of $6,368,000 on sales of $87,539,000 compared to a net income of $4,228,000 on sales of $83,809,000 in the same period last year. Earnings were $.63 per share compared to $.42 per share in the same period last year, after giving effect to the 10% stock dividend declared August 11, 1998. For the six month period ended July 31, 1998, the Company earned a net profit of $7,158,000 on sales of $132,477,000 compared to a net profit of $4,727,000 on sales of $124,767,000 in the same period prior year. Earnings were $.71 per share compared to $.47 per share in the same period prior year, after giving effect to the 10% stock dividend declared August 11, 1998. Included in the second quarter results for last year was a pre-tax loss of $2.6 million incurred from the Company's decision to shutdown the manufacturing facility of the Company's Mexican subsidiary. The second quarter and year-to-date results are consistent with Virco's seasonal business cycle, which produces diminished first quarter sales followed by strong second and third quarter deliveries of educational furniture. However, the educational market are experiencing an increase in seasonality, as more school customers require deliveries closer to the beginning of the school year, which falls in the Company's third quarter. The increase in sales for the second quarter and for the year compared to the prior year is attributable to increases in volume combined with selected price increases. For the six months ended July 31, 1998, incoming orders have increased by 7%, and at July 31, 1998, sales backlog was 16% greater than at the same time last year. Gross profits for the second quarter and year-to-date, as a percent of sales, improved slightly to 33% from 32% to the same periods prior year. The improvement in gross profit is in line with the management's expectations. Marketing, general and administrative expense for the second quarter and year-to-date, as a percent of sales, remains at 21% and 24%, respectively, compared to the same periods last year. Interest expense for the second quarter and year-to-date, decreased by $230,000 and $467,000, respectively, compared to the same periods last year. The decrease in interest expense is due to lower average debt. In May 1998, the Company reached an agreement to sell the manufacturing facility located in Southern Pines, NC. The sales price of the transaction is $1,000,000 with payment to be made at closing. In the first quarter, the Company made a $120,000 accrual for the anticipated loss on disposition of this property. The sale is closed in May 1998. In addition to the above sale of Southern Pines, NC. manufacturing facility, the Company had resolved a long-standing dispute over pricing on deliveries made to the GSA at a cost of $200,000 during the first quarter ended April 30, 1998. The Company had previously established a reserve of $500,000 on this matter in recognition of the original GSA demand, which exceeded $1,000,000. This resolution will enable the Company to again participate in GSA contract business, as the Company had chosen not to participate in GSA contract business while the dispute was pending. Financial Condition: As a result of seasonally high sales activity, accounts receivable increased by $18,600,000 compared to January 31, 1998. In anticipation of strong third quarter educational deliveries, inventory at July 31, 1998 increased by 12
13 $8,794,000 compared to January 31, 1998. The increases in receivable and inventory were financed through increased borrowings under our revolving line of credit with Wells Fargo Bank. Capital spending for the six-month end July 31, 1998 was $7,942,000 compared to $3,002,000 for the same period last year. As discussed in the Company's 1997 Annual Report, the Company initiated two large capital projects, which will have significant cash flow effects on the 1998 fiscal year. Budgeted capital expenditures for 1998 fiscal year include $25,000,000 for the Conway, AR expansion, $2,000,000 for the SAP Enterprise Resource Planning System and $2,000,000 ongoing capital expenditures at the Torrance, CA facility. These capital investments are being financed through credit facilities established with Wells Fargo Bank, General Electric Capital Corporation and internally generated funds. At July 31, 1998, the Company had approximately $18,694,000 available under its credit facility with Wells Fargo Bank and $9,200,000 available under its equipment credit facility with General Electric Capital Corporation. Net cash flows used in operating activities for the second quarter and for the six-month ended July 31, 1998 totaled $3,747,000 and $11,551,000, respectively, compared to $2,414,000 and $14,685,000, respectively, for the same periods last year. The net $3,134,000 improvement in cash flows used by operating activities for the six-month period ended July 31, 1998 compared to the same period prior year, is primarily due to the Company's improved profits and increased account payables offset by increased account receivables. Long term debt was $33,879,000 as of July 31, 1998 compared to $41,114,000 for the same period last year. The $7,235,000 reduction in long term debt is primarily due to the Company's improved profitability. The Company completed an assessment of its information systems in early 1997. The Company's legacy mainframe system would require modification to be Y2K compliant. The cost of these modifications was estimated to be approximately $200,000. As part of this assessment, the Company reviewed various software packages that would be Y2K compliant and improve our information system capabilities. After extended review, the Company determined that the benefits attainable by implementing an enterprise resource planning system justified the additional cost of acquiring and implementing such a system. In August 1997, the Board of Directors approved the implementation of an SAP Enterprise Resources Planning System. This implementation was started in October 1997. The go-live date of this system will be timed to coincide with a slow period of the Company's seasonal business cycle, and is expected to occur towards the beginning of fiscal year 1999. For the six-month ended July 31, 1998, the Company had incurred approximately $270,000 in training costs. The SAP implementation and any required modifications to production or communication equipment are expected to complete by the beginning of fiscal year 1999. The Company believes that by implementing the SAP system and any required equipment modifications, the Y2K issue will not pose significant operational problems for the Company. If the implementation of the SAP Enterprise Resources Planning system or modification to the legacy system is not made on a timely basis, the Y2K issue could have a material effect on operations. The project costs and the date on which the Company believes it will complete the Y2K issues are based on management's best estimates. There can be no guarantee that these estimates will be achieved and actual results could differ from those anticipated. Specific factors that might cause such differences include but are not limited to, the availability and cost of personnel, the amount of custom modifications and number of modules implemented in the SAP, and the need to modify or replace communication or manufacturing equipment. 13
14 The Company is also continuing its efforts to assess the Y2K compliance with key supplier, customers and service providers. Based on management's best estimates, to the extent that the Company vendors and customers fail to complete Y2K work in a timely manner, it could adversely affect the Company's operations, such as, but not limited to, delays in shipment of products or delivery of services leading to lost revenues, increased operating costs, loss of customers or suppliers, or other business interruptions of a material nature, as well as claims of mismanagement, misrepresentation, or breach of contract. At the April 21, 1998 Board of Directors' meeting, the Board authorized a stock re-purchase program under which the Company may re-purchase shares of its outstanding common stock for an aggregate purchase price of up to $5,000,000. The stock re-purchase may be made from time to time at prevailing prices over the subsequent twelve months, by purchases on the market or in private transactions. Any shares re-purchased will be available for re-issuance in connection with the Company's stock option plans or for other corporate purposes. During the second quarter of 1998, the Company purchased 37,900 shares of its common stock for $950,000 at an average re-purchase price of $25.07 per share. On August 11, 1998, the Company's Board of Directors authorized a 10% stock dividend, payable on September 30, 1998 to stockholders of record September 4, 1998. This resulted in the issuance of 891,213 additional shares of common stock as of September 4, 1998. All per share and weighted average share amounts have been restated to reflect this stock dividend. At the same meeting, the Board also authorized a $.02 per share cash dividend, payable on October 30, 1998 to shareholders on record October 9, 1998. The Company believes that cash flow from operations, together with the Company's unused borrowing capacity with Wells Fargo Bank and General Electric Capital Corporation, will be sufficient to fund the Company's debt service requirements, capital expenditures and working capital needs. Forward-Looking Statements From time to time, the Company or its representatives have made or may make forward-looking statements, orally or in writing, including those contained herein. Such forward-looking statements may be included in, without limitation, reports to stockholders, press releases, oral statements made with the approval of an authorized executive officer of the Company and filings with the Securities and Exchange Commission. The words or phrases "anticipates," "expects," "will continue," "estimates," "projects," or similar expressions are intended to identify "forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The results contemplated by the Company's forward-looking statements are subject to certain risks and uncertainties that could cause actual results to vary materially from anticipated results, including without limitation, material costs, demand for the Company's products, and competitive conditions affecting selling prices and margins, capital costs and general economic conditions. Such risks and uncertainties are discussed in more detail in the Company's Annual Report on Form 10-K for the year ended January 31, 1998. The Company's forward-looking statements represent its judgment only on the dates such statements were made. By making any forward-looking statements, the Company assumes no duty to update them to reflect new, changed or unanticipated events or circumstances. 14
15 VIRCO MFG. CORPORATION 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. VIRCO MFG. CORPORATION Date: By: ----------------------------- -------------------------------------- Robert E.Dose Vice President - Finance Date: By: ----------------------------- -------------------------------------- Bassey Yau Corporate Controller 15