0000912057-01-532523.txt : 20011008 0000912057-01-532523.hdr.sgml : 20011008 ACCESSION NUMBER: 0000912057-01-532523 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010804 FILED AS OF DATE: 20010918 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EAGLE FOOD CENTERS INC CENTRAL INDEX KEY: 0000030908 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 363548019 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-17871 FILM NUMBER: 1739379 BUSINESS ADDRESS: STREET 1: RTE 67 KNOXVILLE RD CITY: MILAN STATE: IL ZIP: 61264 BUSINESS PHONE: 3097877730 MAIL ADDRESS: STREET 1: PO BOX 6700 CITY: ROCK ISLAND STATE: IL ZIP: 61204-6700 10-Q 1 a2059297z10-q.txt 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE --- ACT OF 1934 For the quarterly period ended AUGUST 4, 2001 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES --- EXCHANGE ACT OF 1934 For the transition period from -------------------------------------- Commission File Number 0-17871 --------- EAGLE FOOD CENTERS, INC. ------------------------ (Exact name of registrant as specified in the charter) DELAWARE 36-3548019 -------- ---------- (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) RT. 67 & KNOXVILLE RD., MILAN, ILLINOIS 61264 ------------------------------------------------------------------------ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (309) 787-7700 -------------- 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 by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court: Yes X No --- --- The number of shares of the Registrant's Common Stock, par value four cents ($0.04) per share, outstanding on September 14, 2001 was 3,185,715. The Registrant's Common Stock resumed trading under the symbol "EGLE" on July 20, 2001 subsequent to the Company completing an amendment to the Certificate of Incorporation to accomplish a reverse stock split. Page 1 of 12 pages PART I - FINANCIAL INFORMATION ITEM 1: FINANCIAL STATEMENTS EAGLE FOOD CENTERS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)
QUARTER ENDED TWO QUARTERS ENDED AUGUST 4, JULY 29, AUGUST 4, JULY 29, 2001 2000 2001 2000 ----------- ----------- ----------- ----------- Sales $ 185,477 $ 190,563 $ 361,917 $ 393,600 Cost of goods sold 138,101 141,328 268,973 292,568 ----------- ----------- ----------- ----------- Gross margin 47,376 49,235 92,944 101,032 Operating expenses: Selling, general and administrative 41,384 41,879 80,780 90,647 Reorganization items, net (273) (157) (273) 11,177 Depreciation and amortization 4,540 4,506 9,063 9,473 ----------- ----------- ----------- ----------- Operating income (loss) 1,725 3,007 3,374 (10,265) Interest expense, net 3,251 2,840 6,451 6,091 ----------- ----------- ----------- ----------- Earnings (loss) before extraordinary item (1,526) 167 (3,077) (16,356) Extraordinary item: Gain on extinguishment of debt 214 -- 768 -- ----------- ----------- ----------- ----------- Net earnings (loss) $ (1,312) $ 167 $ (2,309) $ (16,356) =========== =========== =========== =========== Basic and diluted net earnings (loss) per share: Net earnings (loss) before extraordinary item $ (0.47) $ 0.06 $ (0.96) $ (5.98) Extraordinary item $ 0.06 $ -- $ 0.24 $ -- ----------- ----------- ----------- ----------- Net earnings (loss) $ (0.41) $ 0.06 $ (0.72) $ (5.98) =========== =========== =========== =========== Weighted average shares and potential common shares outstanding 3,196,847 2,734,750 3,197,432 2,734,750
See notes to the unaudited consolidated financial statements. 2 EAGLE FOOD CENTERS, INC. CONSOLIDATED BALANCE SHEETS (DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) (UNAUDITED)
AUGUST 4, FEBRUARY 3, ASSETS 2001 2001 --------- ----------- Current assets: Cash and cash equivalents $ 1,246 $ 263 Restricted assets 7,696 7,271 Accounts receivable, net of allowance for doubtful accounts of $1.1 million in fiscal 2001 and $1.7 million in fiscal 2000 8,352 7,655 Inventories, net of LIFO reserve of $8.7 million in fiscal 2001 and $8.4 million in fiscal 2000 50,999 51,547 Prepaid expenses and other 2,365 2,363 --------- --------- Total current assets 70,658 69,099 Property and equipment (net) 109,169 113,781 Other assets: Deferred software costs (net) 8,259 10,007 Property held for resale 3,089 3,140 Other 1,098 1,238 --------- --------- Total other assets 12,446 14,385 --------- --------- Total assets $ 192,273 $ 197,265 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 25,558 $ 25,721 Payroll and associate benefits 11,076 11,800 Accrued liabilities 14,017 14,029 Reserve for closed stores 1,993 5,636 Accrued taxes 5,756 7,624 Current portion of long term debt 989 942 --------- --------- Total current liabilities 59,389 65,752 Long term debt: Senior Notes 68,820 70,421 Capital lease obligations 33,085 33,504 Loan and Security Agreement 12,693 4,386 Other 556 643 --------- --------- Total long term debt 115,154 108,954 Other liabilities: Reserve for closed stores 1,987 3,068 Other deferred liabilities 8,388 9,706 --------- --------- Total other liabilities 10,375 12,774 --------- --------- Total liabilities 184,918 187,480 --------- --------- Shareholders' equity: Preferred stock, $.01 par value, 100,000 shares authorized -- -- Common stock, $.04 par value, 4,500,000 shares authorized, 3,357,345 shares issued 134 134 Capital in excess of par value 55,464 55,464 Common stock in treasury, at cost, 171,630 shares in fiscal 2001 and 159,374 shares in fiscal 2000 (2,303) (2,278) Accumulated other comprehensive income(loss) (87) 9 Accumulated deficit (45,853) (43,544) --------- --------- Total shareholders' equity 7,355 9,785 --------- --------- Commitments and contingencies Total liabilities and shareholders' equity $ 192,273 $ 197,265 ========= =========
See notes to the unaudited consolidated financial statements. 3 EAGLE FOOD CENTERS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (DOLLARS IN THOUSANDS) (UNAUDITED)
TWO QUARTERS ENDED AUGUST 4, JULY 29, 2001 2000 -------- -------- Cash flows from operating activities: Net loss $ (2,309) $(16,356) Adjustments to reconcile net loss to net cash flows from operating activities: Extraordinary gain on extinguishment of debt (768) -- Depreciation and amortization 9,063 9,473 Store closing and asset revaluation, and lease termination (341) 8,496 LIFO charge (credit) 300 (1,000) Deferred charges and credits 394 220 Loss (gain) on disposal of assets 43 (745) Changes in assets and liabilities: Receivables and other assets (967) 7,132 Inventories 248 15,989 Accounts payable (163) (10,608) Accrued and other liabilities (3,867) 1,562 Principal payments on reserve for closed stores (4,383) (2,396) -------- -------- Net cash flows from operating activities (2,750) 11,767 Cash flows from investing activities: Additions to property and equipment (2,439) (3,859) Additions to property held for resale -- (4) Purchases of marketable securities (574) (1,551) Cash proceeds from dispositions of property and equipment 43 3,353 Cash proceeds from dispositions of property held for resale -- 246 -------- -------- Net cash flows from investing activities (2,970) (1,815) Cash flows from financing activities: Deferred financing costs (52) (274) Principal payments on capital lease obligations (459) (484) Principal payments on senior notes (1,068) -- Net revolving loans 8,307 2,000 Purchase of treasury stock (25) -- -------- -------- Net cash flows from financing activities 6,703 1,242 Net change in cash and cash equivalents 983 11,194 Cash and cash equivalents at beginning of period 263 18,558 -------- -------- Cash and cash equivalents at end of period $ 1,246 $ 29,752 ======== ======== Supplemental disclosures of cash flow information: Cash paid for interest $ 6,123 $ 2,137 Cash paid for income taxes $ -- $ 7 Noncash investing and financing activities: Additions to property and equipment and debt $ -- $ 103 Unrealized (loss) gain on securities $ (149) $ 14
See notes to the unaudited consolidated financial statements. 4 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ACCOUNTING POLICIES The accompanying unaudited financial statements have been prepared in accordance with the summary of significant accounting policies set forth in the notes to the audited financial statements contained in the Company's Form 10-K filed with the Securities and Exchange Commission on May 4, 2001. In the opinion of management, the accompanying unaudited financial statements reflect all adjustments of a normal recurring nature necessary for a fair statement of the results of operations and financial position for the interim periods presented. Operating results for the twenty-six weeks ended August 4, 2001 are not necessarily indicative of the results that may be expected for the fiscal year ending February 2, 2002. RECLASSIFICATIONS - Certain reclassifications were made to prior years' balances to conform to current year presentation. RESERVE FOR CLOSED STORES An analysis of activity in the reserve for closed stores for the quarter and two quarters ended August 4, 2001 and July 29, 2000 is as follows:
QUARTER ENDED TWO QUARTERS ENDED AUGUST 4, JULY 29, AUGUST 4, JULY 29, 2001 2000 2001 2000 ------------------------------- ----------------------------- (DOLLARS IN THOUSANDS) Balance at beginning of period $ 5,672 $ 18,770 $ 8,704 $ 9,986 Payments, primarily rental payments and lease rejection costs, net of sublease rentals of $68 and $143 in fiscal 2001 and $105 and $422 in fiscal 2000 (1,400) (1,605) (4,500) (2,483) Interest cost 49 67 117 132 Provision for store closing and asset revaluation (341) (1,101) (341) 8,496 ------------------------------- ----------------------------- Balance at end of period (including $2.0 million and $11.3 million, respectively, classified as current) $ 3,980 $ 16,131 $ 3,980 $ 16,131 =============================== =============================
The provision for store closing and asset revaluation is included in the Consolidated Statement of Operations under the caption "Reorganization items, net". 5 A rollforward presentation of the number of stores in the closed store reserve for the second quarter and two quarters ended August 4, 2001 and July 29, 2000 is as follows:
QUARTER ENDED TWO QUARTERS ENDED AUGUST 4, JULY 29, AUGUST 4, JULY 29, 2001 2000 2001 2000 --------- -------- --------- -------- Number of stores in reserve at beginning of period 13 30 17 18 Leases terminated/expired (5) (5) (9) (8) Stores added to the closed store reserve -- -- -- 15 ------- -------- -------- ------ Number of stores in reserve at end of period 8 25 8 25 ======= ======== ======== ======
REORGANIZATION ITEMS, NET A summary of costs recognized during the quarter and two quarters ended August 4, 2001 and July 29, 2000 is as follows:
QUARTER ENDED TWO QUARTERS ENDED AUGUST 4, JULY 29, AUGUST 4, JULY 29, (DOLLARS IN THOUSANDS) 2001 2000 2001 2000 -------- -------- -------- -------- Store closing and asset revaluation $ (341) $ (1,101) $ (341) $ 8,496 Employee termination benefits 16 87 16 1,338 Professional fees 34 938 34 1,811 Net realized gain on sale/disposal of leases and equipment and release of capital leases -- (157) -- (598) Other 18 76 18 130 -------- -------- -------- -------- Total $ (273) $ (157) $ (273) $ 11,177 ======== ======== ======== ========
The net reorganization items are based on information presently available to the Company, however, the actual costs could differ materially from the estimates. Additionally, other costs may be incurred which cannot be presently estimated. EXTRAORDINARY ITEM - GAIN ON EXTINGUISHMENT OF DEBT Extraordinary gains of $214 thousand and $768 thousand were recorded in the quarter and two quarters ended August 4, 2001 relating to the repurchase of Senior Notes. Senior Notes with a face value of $500 thousand were purchased during the second quarter of fiscal 2001 for $286 thousand plus accrued interest. For the two quarters ended August 4, 2001, Senior Notes with a face value of $1.8 million were purchased for $1.1 million plus accrued interest. 6 COMPREHENSIVE INCOME - Comprehensive income includes all changes in the Company's equity during the period, except transactions with stockholders of the Company. Comprehensive income consisted of the following (in thousands of dollars):
QUARTER ENDED TWO QUARTERS ENDED ------------------------------- -------------------------------- AUGUST 4, 2001 JULY 29, 2000 AUGUST 4, 2001 JULY 29, 2000 -------------- ------------- -------------------------------- Net earnings (loss) $ (1,312) $ 167 $ (2,309) $(16,356) Other comprehensive income (loss), net of tax: Unrealized gain (loss) on marketable securities (5) 3 (96) 10 -------- -------- -------- -------- Comprehensive income (loss) $ (1,317) $ 170 $ (2,405) $(16,346) ======== ======== ======== ========
LITIGATION The Company is subject to various unresolved legal actions which arise in the normal course of its business. It is not possible to predict with certainty the outcome of these unresolved legal actions or the range of the possible loss. REVERSE STOCK SPLIT On June 27, 2001 the Shareholders of Eagle Food Centers, Inc. approved an amendment to the Company's Certificate of Incorporation to accomplish a reverse stock split. This was effective on June 29, 2001 and resulted in each four outstanding shares of the Company's common stock being automatically reclassified and changed into one share of the Company's common stock. Prior period common stock information has been presented on a comparative basis. SUBSEQUENT EVENTS The Company entered into a Second Amended and Restated Loan and Security Agreement ("New Revolver") with Congress Financial Corporation (Central) on August 24, 2001, which amends and restates the Amended and Restated Loan and Security Agreement dated August 7, 2000. The New Revolver is a $50 million facility secured by a security interest in all inventories of the Company and selected real estate. This is an increase of $10 million over the previous credit facility and extends the term of the facility to August 24, 2004. The Company repurchased Senior Notes during August and September 2001 with a face value of $2.4 million for $1.5 million plus accrued interest. This will result in the Company recording a gain of $970 thousand as an extraordinary item in the third quarter of fiscal 2001. 7 ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Sales for the Company's second fiscal quarter ended August 4, 2001 were $185.5 million, a decrease of $5.1 million or 2.7% compared with the prior year. For the two quarters ended August 4, 2001, sales were $361.9 million, a decrease of $31.7 million, or 8.0% compared to the same period in fiscal 2000, due primarily to the closure of seventeen stores and sale of one store during the first quarter of fiscal 2000, and the closure of two stores in the second quarter of fiscal 2000. Same store sales decreased 2.4% for the second quarter and 2.0% for the two quarters ended August 4, 2001, due primarily to competitive store growth during the past year. There were 64 stores operating at the end of the second quarter of fiscal 2001 and fiscal 2000. The gross margin rate for the second quarter of fiscal 2001 was 25.5% of sales compared to 25.8% for the same quarter of fiscal 2000, with a gross margin decline of $1.9 million. For the two quarters ended August 4, 2001 and July 29, 2000, the gross margin rate was 25.7%, with a gross margin decline of $8.1 million primarily related to the reduction in sales volume due to the lower store count. In addition, the Company recorded a LIFO charge of $300 thousand in the first two quarters of fiscal 2001 compared to a LIFO credit of $1.0 million in the same period of last year. Selling, general and administrative expense for the second quarter of fiscal 2001 was $41.4 million or 22.3% of sales compared to $41.9 million or 22.0% of sales in the same quarter of fiscal 2000. For the two quarters ended August 4, 2001, selling, general and administrative expense was $80.8 million, or 22.3% of sales, versus $90.6 million, or 23.0% of sales, for the same period in fiscal 2000. The year to date decrease in dollars is primarily related to the decline in the number of stores plus an overall reduction of store operating expenses, which included an increase in associate health benefits expense. The first two quarters of fiscal 2001 included reorganization items of $68 thousand offset by a reduction in the provision for store closing of $341 thousand. The first two quarters of fiscal 2000 included reorganization items of $11.2 million primarily consisting of store closing and asset revaluation of $8.5 million and professional fees of $1.8 million. For the quarters ended August 4, 2001 and July 29, 2000, depreciation and amortization expense was $4.5 million or 2.4% of sales. For the two quarters ended August 4, 2001, depreciation and amortization expense was $9.1 million or 2.5% of sales versus $9.5 million or 2.4% of sales for the same period in fiscal 2000, due primarily to the reduction in the number of stores. Net interest expense increased to $3.3 million or 1.8% of sales in the second quarter of fiscal 2001 compared to $2.8 million or 1.5% of sales in the same quarter of fiscal 2000. For the two quarters ended August 4, 2001, net interest expense increased to $6.5 million or 1.8% of sales compared to $6.1 million or 1.5% of sales in the same period of fiscal 2000. The year to date increase is due primarily to lower interest income of $639 thousand, partially offset by a decrease in interest expense of $280 thousand. 8 Extraordinary gains of $214 thousand and $768 thousand were recorded in the quarter and two quarters ended August 4, 2001 relating to the repurchase of Senior Notes. Senior Notes with a face value of $500 thousand were purchased during the second quarter of fiscal 2001 for $286 thousand plus accrued interest. For the two quarters ended August 4, 2001, Senior Notes with a face value of $1.8 million were purchased for $1.1 million plus accrued interest. The net loss for the second quarter of fiscal 2001 was $1.3 million or $0.41 per share compared to a net income of $167 thousand or $.06 per share in the same quarter of fiscal 2000. For the two quarters ended August 4, 2001, the net loss was $2.3 million or $0.72 per share compared to a net loss of $16.4 million or $5.98 per share for the comparable period of fiscal 2000. No tax benefit was recognized in fiscal 2001 or 2000 as the Company is in a net operating loss carryforward position. Valuation allowances have been established for the entire amount of net deferred tax assets due to the uncertainty of future recoverability. LIQUIDITY AND CAPITAL RESOURCES Cash used by operating activities was $2.8 million for the two quarters ended August 4, 2001 compared to cash provided of $11.8 million in the comparable period of fiscal 2000. The net loss and non-cash charges generated $6.4 million of cash. Working capital changes used $9.1 million, due primarily to an increase in accounts receivable and decreases in accrued liabilities, the reserve for closed stores and accounts payable, partially offset by a decrease in inventories. Working capital at August 4, 2001 was $11.3 million and the current ratio was 1.19 to 1 compared to $3.3 million and 1.05 to 1 at February 3, 2001. Additions to property and equipment for the first two quarters of fiscal 2001 were $2.4 million compared to $3.9 million in the first half of fiscal 2000. The Company completed two major remodels during the first half of fiscal 2001. The Company repurchased $1.8 million of its Senior Notes during the first half of fiscal 2001 at a cost of $1.1 million, recording an extraordinary gain of $768 thousand. Payments related to lease rejection costs were $6.0 million during the first two quarters of fiscal 2001. The repurchase of the Senior Notes and the lease rejection payments were primarily funded from loans against the Amended and Restated Loan and Security Agreement ("Revolver"). On August 4, 2001 the Company had $12.7 million in loans against the Revolver, no letters of credit outstanding and availability of $17.6 million. Cash on hand, operating cash flows and other sources of funds, including loans against the New Revolver, are expected to be adequate to meet the Company's liquidity requirements for the coming year. 9 SAFE HARBOR STATEMENTS UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 The statements under Management's Discussion and Analysis of Financial Condition and Results of Operations and the other statements in this Form 10-Q which are not historical facts are forward looking statements. These forward looking statements involve risks and uncertainties that could render them materially different, including, but not limited to, the effect of economic conditions, the impact of competitive stores and pricing, availability and costs of inventory, the rate of technology change, the cost and uncertain outcomes of pending and unforeseen litigation, ability to complete all requirements relating to Chapter 11, the availability of capital, supply constraints or difficulties, the effect of the Company's accounting policies, the effect of regulatory, legal and other risks detailed in the Company's Securities and Exchange Commission filings. PART II : OTHER INFORMATION: ITEM 1 : LEGAL PROCEEDINGS Not Applicable ITEM 2 : CHANGE IN SECURITIES AND USE OF PROCEEDS See discussion of the Company's reverse stock split in part I. See also the Form 8K filed by the Company on July 5, 2001 and referred to in item 6 below. ITEM 3 : DEFAULTS UPON SENIOR SECURITIES Not Applicable ITEM 4 : SUBMITTED MATTERS TO A VOTE OF SECURITY HOLDERS At the Company's 2001 Annual Meeting of Shareholders on June 27, 2001, the following matters were submitted to a vote of Security Holders. In the matter of the election of the Board of Directors for a one year term, the Shareholders voting results were as follows:
Votes For Votes Withheld ---------- -------------- Robert J. Kelly 10,882,057 321,007 Jeffrey L. little 10,983,472 219,592 S. Patric Plumley 10,931,855 271,209 Peter B. Foreman 10,987,258 215,806 Steven M. Friedman 10,959,598 243,466 Alain M. Oberrotman 10,888,058 315,006 Jerry I. Reitman 10,987,640 215,424 William J. Snyder 10,958,163 244,901
10 In the matter of ratification of the appointment of KPMG LLP as independent auditors, 11,093,872 votes were cast in favor of approval, 64,367 votes were cast against and holders of 44,825 shares abstained. In the matter of approval of the amendment to the Certificate of Incorporation to accomplish a reverse stock split, 10,739,717 votes were cast in favor of approval, 369,501 votes were cast against and holders of 93,846 shares abstained. In the matter of the shareholder proposal with respect to urging the sale of the Company, 1,302,518 votes were cast in favor of approval, 7,270,871 votes were cast against, 2,557,146 were non-votes and holders of 72,529 shares abstained. All votes were in the majority regarding the election of directors, ratification of independent auditors and approval of the amendment to the Certificate of Incorporation to accomplish a reverse stock split. The directors were declared elected, the appointment of auditor proposal declared approved and the Certificate of Incorporation amendment declared approved. The shareholder proposal urging the sale of the Company failed to be approved by the shareholders. ITEM 5 : OTHER Not Applicable ITEM 6 : EXHIBITS AND REPORTS ON FORM 8K No exhibits are applicable. On May 21, 2001 the Company reported that on May 11, 2001 Nasdaq granted the Company a temporary exception from the minimum bid price requirement through July 3, 2001. A proposal to accomplish a reverse stock split will be voted on at the Annual Shareholders' Meeting on June 27, 2001. On July 5, 2001 the Company reported that on June 27, 2001 the Shareholders of Eagle Food Centers, Inc. approved an amendment to the Company's Certificate of Incorporation to accomplish a reverse stock split which was effective on June 29, 2001 and resulted in each four outstanding shares of the Company's common stock being automatically reclassified and changed into one share of the Company's common stock. This is intended to enable the Company to meet the minimum bid price requirement in order to continue the listing of the Company's common stock on The Nasdaq SmallCap Market. 11 SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized: EAGLE FOOD CENTERS, INC. Dated: September 18, 2001 /s/ Jeffrey L. Little ----------------------------------------- Jeffrey L. Little Chief Executive Officer and President Dated: September 18, 2001 /s/ S. Patric Plumley ----------------------------------------- S. Patric Plumley Senior Vice President -Chief Financial Officer and Secretary 12