-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EvWjC+LFUtnM8/I4UfQL9m8gegR9Xvkt/Zq/qAPcGIW+T/R7oVWoQTKX/xY78Ual DIzhUWyvNAtI/tPO0ym4vg== 0000731939-97-000005.txt : 19970513 0000731939-97-000005.hdr.sgml : 19970513 ACCESSION NUMBER: 0000731939-97-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970329 FILED AS OF DATE: 19970512 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: TEMPLE INLAND INC CENTRAL INDEX KEY: 0000731939 STANDARD INDUSTRIAL CLASSIFICATION: PAPERBOARD MILLS [2631] IRS NUMBER: 751903917 STATE OF INCORPORATION: DE FISCAL YEAR END: 1230 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08634 FILM NUMBER: 97600114 BUSINESS ADDRESS: STREET 1: 303 S TEMPLE DR STREET 2: PO DRAWER N CITY: DIBOLL STATE: TX ZIP: 75941 BUSINESS PHONE: 4098292211 MAIL ADDRESS: STREET 1: 303 SOUTH TEMPLE DR CITY: DIBOLL STATE: TX ZIP: 75941 10-Q 1 FORM 10-Q FOR FIRST QUARTER 1997 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 March 29, 1997 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 1-8634 Temple-Inland Inc. (Exact name of registrant as specified in its charter) Delaware 75-1903917 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 303 South Temple Drive, Diboll, Texas 75941 (Address of principal executive offices) (Zip Code) (409) 829-2211 (Registrant's telephone number, including area code) Not Applicable (Former name, former address and former fiscal year, if changed since last report.) Indicate 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 the 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: Number of common shares outstanding Class as of March 29, 1997 Common Stock (par value $1.00 per share) 55,334,532 The Exhibit Index appears on page 20 of this report. -1- 2 PART I. FINANCIAL INFORMATION FINANCIAL STATEMENTS Summarized Statements of Income Parent Company (Temple-Inland Inc.) Unaudited First Quarter 1997 1996 (in millions) Revenues Net sales $ 649.0 $ 670.4 Financial services earnings 29.5 24.7 678.5 695.1 Costs and Expenses Cost of sales 567.1 533.1 Selling and administrative 62.7 64.1 629.8 597.2 Operating Income 48.7 97.9 Interest - net (27.8) (26.7) Other .8 .2 Income Before Taxes 21.7 71.4 Taxes on income 8.5 25.0 Net Income $ 13.2 $ 46.4 See notes to consolidated financial statements. -2- 3 Summarized Balance Sheets Parent Company (Temple-Inland Inc.) Unaudited March 29, December 28, 1997 1996 (in millions) ASSETS Current Assets Cash $ 15 $ 14 Receivables, less allowances of $9 million in 1997 and 1996 303 295 Inventories: Work in process and finished goods 119 107 Raw materials 228 220 347 327 Prepaid expenses 18 13 Total current assets 683 649 Investment in Financial Services 608 592 Property and Equipment Buildings 521 516 Machinery and equipment 3,599 3,576 Less allowances for depreciation and amortization (1,938) (1,882) 2,182 2,210 Construction in progress 121 106 2,303 2,316 Timber and timberlands-- less depletion 527 503 Land 31 31 Total property and equipment 2,861 2,850 Other Assets 170 161 Total Assets $ 4,322 $ 4,252 See notes to consolidated financial statements. -3- 4 Summarized Balance Sheets - Continued Parent Company (Temple-Inland Inc.) Unaudited March 29, December 28, 1997 1996 (in millions) LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts payable $ 129 $ 143 Accrued expenses 134 140 Employee compensation and benefits 17 28 Current portion of long-term debt 12 8 Total current liabilities 292 319 Long-Term Debt 1,636 1,522 Deferred Income Taxes 232 234 Postretirement Benefits 137 136 Other Liabilities 25 26 Shareholders' Equity 2,000 2,015 Total Liabilities and Shareholders' Equity $ 4,322 $ 4,252 See notes to consolidated financial statements. -4- 5 Summarized Statements of Cash Flows Parent Company (Temple-Inland Inc.) Unaudited First Quarter 1997 1996 (in millions) Cash Provided by (Used for) Operations Net income $ 13.2 $ 46.4 Adjustments to reconcile net income to net cash: Depreciation and depletion 63.1 60.8 Deferred taxes (2.9) (1.3) Unremitted earnings of affiliates (17.9) (15.0) Receivables (7.8) (19.6) Inventories (19.6) (11.0) Accounts payable and accrued expenses (31.1) (40.2) Other (33.0) 5.7 (36.0) 25.8 Cash Provided by (Used for) Investments Capital expenditures (51.9) (55.5) Other (4.2) (2.5) (56.1) (58.0) Cash Provided by (Used for) Financing Change in debt, net 118.7 55.9 Purchase of stock for treasury (11.2) (7.1) Cash dividends paid to shareholders (17.8) (16.6) Other 2.6 .3 92.3 32.5 Net increase in cash and cash equivalents .2 .3 Cash and cash equivalents at beginning of period 14.3 14.7 Cash and cash equivalents at end of period $ 14.5 $ 15.0 See notes to consolidated financial statements. -5- 6 Summarized Statements of Income Temple-Inland Financial Services Unaudited First Quarter 1997 1996 (in millions) Interest income Mortgage-backed and investment securities $ 37.1 $ 49.7 Loans receivable and mortgage loans held for sale 118.4 101.8 Other earning assets 5.0 5.7 Total interest income 160.5 157.2 Interest expense Deposits 74.8 78.4 Borrowed funds 35.3 29.5 Total interest expense 110.1 107.9 Net interest income 50.4 49.3 Provision for loan losses (.7) 6.2 Net interest income after provision for loan losses 51.1 43.1 Noninterest income Loan servicing fees 14.5 13.7 Loan origination and marketing 6.8 6.6 Other 20.1 20.8 41.4 41.1 Noninterest expense Compensation and benefits 27.3 25.2 Other 35.7 34.3 Total noninterest expense 63.0 59.5 Income before taxes 29.5 24.7 Taxes on income 11.6 9.7 Net Income $ 17.9 $ 15.0 See notes to consolidated financial statements. -6- 7 Summarized Balance Sheets Temple-Inland Financial Services Unaudited March 31, December 31, 1997 1996 (in millions) ASSETS Cash and cash equivalents $ 121 $ 214 Mortgage loans held for sale 248 244 Loans receivable 5,921 5,414 Mortgage-backed and investment securities 2,512 2,783 Other assets 680 680 TOTAL ASSETS $ 9,482 $ 9,335 LIABILITIES Deposits $ 6,209 $ 6,263 Securities sold under repurchase agreements 1,890 1,937 Federal Home Loan Bank advances 295 55 Other borrowings 122 133 Other liabilities 358 355 TOTAL LIABILITIES 8,874 8,743 SHAREHOLDER'S EQUITY 608 592 TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $ 9,482 $ 9,335 See notes to consolidated financial statements. -7- 8 Summarized Statements of Cash Flows Temple-Inland Financial Services Unaudited First Quarter 1997 1996 (in millions) Cash Provided by (Used for) Operations Net income $ 17.9 $ 15.0 Adjustments to reconcile net income to net cash: Amortization, accretion and depreciation 7.3 7.6 Provision for loan losses (.7) 6.2 Receivable from FDIC - 7.2 Mortgage loans held for sale (3.1) (76.4) Collections and remittances on loans serviced for others, net (22.0) (9.7) Other 16.2 (35.5) 15.6 (85.6) Cash Provided by (Used for) Investments Purchases of securities held-to-maturity (14.3) (.1) Purchases of securities available-for-sale - (1.7) Maturities of securities held-to-maturity 93.6 75.0 Maturities of securities available-for-sale 14.8 21.3 Proceeds from sale of securities available-for-sale 171.2 4.3 Loans originated or acquired - net of principal collected on loans (536.0) (194.5) Other 11.3 (14.8) (259.4) (110.5) Cash Provided by (Used for) Financing Net decrease in deposits (53.6) (8.2) Securities sold under repurchase agreements and short-term borrowings - net (46.8) 227.2 Change in debt, net 228.5 (89.3) Net increase in advances from borrowers for taxes and insurance 22.6 18.2 150.7 147.9 Net decrease in cash and cash equivalents (93.1) (48.2) Cash and cash equivalents at beginning of period 214.4 343.1 Cash and cash equivalents at end of period $ 121.3 $ 294.9 See notes to consolidated financial statements. -8- 9 Consolidated Statements of Income Temple-Inland Inc. and Subsidiaries Unaudited First Quarter 1997 1996 (in millions) Revenues Manufacturing net sales $ 649.0 $ 670.4 Financial services revenues 201.9 198.3 850.9 868.7 Costs and Expenses Manufacturing costs and expenses 629.8 597.2 Financial services expenses 172.4 173.6 802.2 770.8 Operating Income 48.7 97.9 Parent company interest - net (27.8) (26.7) Other .8 .2 Income Before Taxes 21.7 71.4 Taxes on income 8.5 25.0 Net Income $ 13.2 $ 46.4 Earnings per share $ .24 $ .84 Dividends Paid Per Share of Common Stock $ .32 $ .30 Weighted Average Shares Outstanding 55.6 55.6 See notes to consolidated financial statements. -9- 10 Consolidating Balance Sheet Temple-Inland Inc. and Subsidiaries March 29, 1997 Unaudited Parent Financial Company Services Consolidated (in millions) ASSETS Cash and cash equivalents $ 15 $ 121 $ 136 Mortgage loans held for sale - 248 248 Loans receivable - 5,921 5,921 Mortgage-backed and investment securities - 2,512 2,512 Trade and other receivables 303 - 302 Inventories 347 - 347 Property & equipment 2,861 83 2,944 Other assets 188 597 741 Investment in Financial Services 608 - - TOTAL ASSETS $ 4,322 $ 9,482 $13,151 LIABILITIES Deposits $ - $ 6,209 $ 6,209 Securities sold under repurchase agreements and Federal Home Loan Bank advances - 2,185 2,185 Other liabilities 317 358 659 Long-term debt 1,636 122 1,758 Deferred income taxes 232 - 203 Postretirement benefits 137 - 137 TOTAL LIABILITIES $ 2,322 $ 8,874 11,151 SHAREHOLDERS' EQUITY Preferred stock - par value $1 per share: authorized 25,000,000 shares; none issued - Common stock - par value $1 per share: authorized 200,000,000 shares; issued 61,389,552 shares including shares held in the treasury 61 Additional paid-in capital 305 Translation and other adjustments (26) Retained earnings 1,833 2,173 Cost of shares held in the treasury: 6,055,020 shares (173) TOTAL SHAREHOLDERS' EQUITY 2,000 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $13,151 See the notes to the consolidated financial statements. -10- 11 Consolidating Balance Sheet Temple-Inland Inc. and Subsidiaries December 28, 1996 Unaudited Parent Financial Company Services Consolidated (in millions) ASSETS Cash and cash equivalents $ 14 $ 214 $ 228 Mortgage loans held for sale - 244 244 Loans receivable - 5,414 5,414 Mortgage-backed and investment securities - 2,783 2,783 Trade and other receivables 295 - 292 Inventories 327 - 327 Property & equipment 2,850 81 2,931 Other assets 174 599 728 Investment in Financial Services 592 - - TOTAL ASSETS $ 4,252 $ 9,335 $12,947 LIABILITIES Deposits $ - $ 6,263 $ 6,263 Securities sold under repurchase agreements and Federal Home Loan Bank advances - 1,992 1,992 Other liabilities 345 355 685 Long-term debt 1,522 133 1,655 Deferred income taxes 234 - 201 Postretirement benefits 136 - 136 TOTAL LIABILITIES $ 2,237 $ 8,743 10,932 SHAREHOLDERS' EQUITY Preferred stock - par value $1 per share: authorized 25,000,000 shares; none issued - Common stock - par value $1 per share: authorized 200,000,000 shares; issued 61,389,552 shares including shares held in the treasury 61 Additional paid-in capital 305 Translation and other adjustments (24) Retained earnings 1,837 2,179 Cost of shares held in the treasury: 5,940,802 shares (164) TOTAL SHAREHOLDERS' EQUITY 2,015 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $12,947 See the notes to the consolidated financial statements. -11- 12 Consolidated Statements of Cash Flows Temple-Inland Inc. and Subsidiaries Unaudited First Quarter 1997 1996 (in millions) Cash Provided by (Used for) Operations Net income $ 13.2 $ 46.4 Adjustments to reconcile net income to net cash: Depreciation and depletion 66.0 63.0 Amortization and accretion 4.4 5.4 Deferred taxes 2.5 6.7 Receivable from FDIC - 7.2 Trade and other receivables (7.8) (19.6) Accounts payable and accrued expenses (31.1) (39.9) Inventories (19.6) (11.0) Mortgage loans held for sale (3.1) (76.4) Decrease in collections and remittances on loans serviced for others, net (22.0) (9.7) Other (22.9) (31.9) (20.4) (59.8) Cash Provided by (Used for) Investments Capital expenditures (56.2) (59.4) Purchases of securities held-to-maturity (14.3) (.1) Purchases of securities available-for-sale - (1.7) Maturities of securities held-to-maturity 93.6 75.0 Maturities of securities available-for-sale 14.8 21.3 Proceeds from sale of securities available- for-sale 171.2 4.3 Loans originated or acquired - net of principal collected on loans (536.0) (194.5) Other 11.4 (13.4) (315.5) (168.5) Cash Provided by (Used for) Financing Additions to debt 370.5 166.9 Payments of debt (23.3) (200.2) Securities sold under repurchase agreements and short-term borrowings - net (46.8) 227.2 Cash dividends paid to shareholders (17.8) (16.6) Net decrease in deposits (53.6) (8.2) Net increase in advances from borrowers for taxes and insurance 22.6 18.2 Other (8.6) (6.9) 243.0 180.4 Net decrease in cash and cash equivalents (92.9) (47.9) Cash and cash equivalents at beginning of period 228.7 357.8 Cash and cash equivalents at end of period $ 135.8 $ 309.9 See notes to consolidated financial statements. -12- 13 TEMPLE-INLAND INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE A - BASIS OF PRESENTATION The accompanying unaudited interim 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 only of normal accruals) considered necessary for a fair presentation have been included. For further information, refer to the consolidated financial statements and footnotes included in, or incorporated into, Temple-Inland Inc.'s (the "Company") Annual Report on Form 10-K for the fiscal year ended December 28, 1996. The consolidated financial statements include the accounts of Temple-Inland Inc. and all subsidiaries in which the Company has more than a 50 percent equity ownership. However, because certain assets and liabilities are in separate corporate entities, the consolidated assets are not available to satisfy all consolidated liabilities. All material intercompany amounts and transactions have been eliminated. Certain amounts have been reclassified to conform with current year's classification. Included as an integral part of the consolidated financial statements are separate summarized financial statements for the Company's primary business groups. The Parent Company (Temple-Inland Inc.) summarized financial statements include the accounts of Temple-Inland Inc. and its manufacturing subsidiaries. The Financial Services subsidiaries and the 20 percent to 50 percent owned companies are reflected in the financial statements on the equity basis. The Temple-Inland Financial Services Group summarized financial statements include savings bank, mortgage banking, real estate development activities and insurance operations. In February 1997, the Financial Accounting Standards Board issued Statement No. 128, Earnings Per Share , which is effective for financial statements issued for periods ending after December 15, 1997. At this time, the Company will be required to change the method currently used to compute earnings per share and to restate all prior periods. Under the new requirements for calculating primary earnings per share, the dilutive effect of stock options will be excluded. The method of calculating fully diluted earnings per share will remain unchanged. The impact of Statement 128 on the calculation of earnings per share is not expected to be material. NOTE B - CONTINGENCIES There are pending against the Company and its subsidiaries lawsuits and claims arising in the regular course of business. In the opinion of management, recoveries, if any, by plaintiffs or claimants that may result from the foregoing litigation and claims will not be material in relation to the consolidated financial statements of the Company and its subsidiaries. -13- 14 MANAGEMENT'S DISCUSSION AND ANALYSIS Results of Operations Results of operations, including information regarding the Company's principal business segments, are shown below: First Quarter 1997 1996 (in millions) Revenues Paper $ 502.4 $ 543.1 Building products 146.6 127.3 Manufacturing net sales 649.0 670.4 Financial services 201.9 198.3 Total revenues $ 850.9 $ 868.7 Income Paper $ (7.1) $ 61.2 Building products 32.1 17.0 Operating profit 25.0 78.2 Financial services 29.5 24.7 54.5 102.9 Corporate expenses (5.8) (5.0) Parent company interest - net (27.8) (26.7) Other - net .8 .2 Income before taxes 21.7 71.4 Taxes on income 8.5 25.0 Net income $ 13.2 $ 46.4 -14- 15 First Quarter 1997 vs. First Quarter 1996 First quarter earnings of $13.2 million, or $.24 per share, represent a decrease of 72 percent from first quarter 1996 net income of $46.4 million, or $.84 per share. Revenues for the quarter were $850.9 million. The paper group reported an operating loss of $7.1 million in the first quarter. This compares with operating earnings of $61.2 million in the first quarter of 1996. Although demand for corrugated containers strengthened in the quarter and shipments were up approximately five percent over first quarter 1996 levels, the paper group's corrugated container operation continued to experience declining prices for containerboard and corrugated containers. The bleached paperboard operation experienced improved sales and production volumes despite problems with a digester early in the quarter. Prices for bleached paperboard remained stable throughout the quarter. The building products group reported first quarter operating earnings of $32.1 million, an increase of 89 percent from first quarter 1996 operating earnings. Revenues for the first quarter were $146.6 million, up $19.3 million from last year's first quarter revenues of $127.3 million. After slumping late in the fourth quarter of 1996, demand for lumber, particleboard and fiberboard strengthened during the first quarter of 1997. The gypsum operation had another outstanding quarter, benefiting from strong demand and higher prices. As part of the announced plan to modernize its particleboard plants, this group will begin the renovation of the Diboll, Texas, particleboard plant in April with expectations of resuming production late in the second quarter. Similar renovations to the Thomson, Georgia, particleboard plant are scheduled to start later in the year. The financial services group reported first quarter operating earnings of $29.5 million. This compares with $24.7 million in the first quarter of 1996. These record first quarter operating earnings were the result of Guaranty Federal Bank continuing to add high quality, adjustable rate loans to its portfolio. During the quarter, total loans increased by $500 million to $6.2 billion, which is 71 percent of total earning assets. Further cost reduction and internal efficiencies also contributed to earnings. Net interest expense increased to $27.8 million in the first quarter of 1997 compared with $26.7 million in the first quarter of last year. Capitalized interest decreased from $1.4 million in the first quarter of 1996 to $.4 million in the first quarter of 1997. Interest expense increased slightly from $28.1 million in the first quarter of 1996 to $28.2 million in the first quarter of 1997. -15- 16 Capital Resources and Liquidity The Company's financial condition continues to be strong. Internally generated funds, existing credit facilities and the capacity to issue long-term debt are sufficient to fund projected capital expenditures, to service existing debt, to pay dividends and to meet normal working capital requirements. During the first quarter of 1997, the Parent Company's debt increased $118.7 million mainly through issuance of commercial paper and bank debt. Guaranty Federal Bank continues to meet all three regulatory requirement formulae set out under the Financial Institution Reform, Recovery and Enforcement Act of 1989 ("FIRREA"). -16- 17 PART II. OTHER INFORMATION Item 1. Legal Proceedings. The information set forth in Note B to Notes to Consolidated Financial Statements in Part I of this report is incorporated by reference thereto. Item 2. Changes in Securities. None. Item 3. Defaults Upon Senior Securities. None. Item 4. Submission of Matters to a Vote of Security Holders. The Company held its annual meeting of stockholders on May 2, 1997, at which a quorum was present. The table below sets forth the number of votes cast for, against or withheld, as well as the number of abstentions and broker non-votes for each matter voted upon at that meeting. Abstentions Against or and Broker Matter For Withheld Non-votes 1. Election of four Directors (a) Paul M. Anderson 47,950,267 844,490 - (b) Robert Cizik 47,985,897 858,860 - (c) Arthur Temple III 48,264,559 530,198 - (d) Larry E. Temple 48,261,932 532,825 - 2. Ratification of appointment of Ernst & Young LLP 48,616,024 109,096 69,637 3. Ratification of the adoption of the Company's 1997 Stock Option Plan 40,554,633 8,011,604 228,520 4. Ratification of the adoption of the Company's 1997 Restricted Stock Plan 45,262,149 3,277,086 255,522 Item 5. Other Information. None. -17- 18 PART II. OTHER INFORMATION (Continued) Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits. Regulation S-K Exhibit Number (11) Statement re computation of per share earnings. (27) Financial Data Schedule (b) Reports on Form 8-K. During the three months ended March 29, 1997, the Company did not file any reports on Form 8-K. -18- 19 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. TEMPLE-INLAND INC. (Registrant) Date: May 12, 1997 By /s/ David H. Dolben David H. Dolben Vice President and Chief Accounting Officer -19- 20 EXHIBIT INDEX The following is an index of the exhibits filed herewith. The page reference set forth opposite the description of exhibits included in such index refers to the pages under the sequential numbering system prescribed by Rule 0-3(b) under the Securities Exchange Act of 1934. Regulation S-K Exhibit Sequential Number Page Number (11) Statement re computation of 21 per share earnings. (27) Financial Data Schedule 22 -20- EX-27 2 FDS FOR FIRST QUARTER 1997
5 This schedule contains summary financial information extracted from consolidated balance sheets and consolidated income statements for Temple-Inland Inc. and subsidiaries and is qualified in its entirety by reference to such financial statements. 1,000,000 3-MOS JAN-03-1998 MAR-29-1997 136 0 302 0 347 0 2,944 0 13,151 0 1,758 0 0 61 1,939 13,151 649 851 630 802 0 0 28 22 9 13 0 0 0 13 .24 .24
EX-11 3 EXHIBIT (11) TEMPLE-INLAND INC. AND SUBSIDIARIES STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS (in thousands, except for per share data) 13 Weeks Ended March 29, March 30, 1997 1996 Primary Average common shares outstanding 55,426 55,565 Net effect of dilutive stock options based on treasury stock method using average market price 178 3 Weighted average shares outstanding 55,604 55,568 Net income $ 13,249 $ 46,426 Earnings per share $ .24 $ .84 Fully Diluted Average common shares outstanding 55,426 55,565 Net effect of dilutive stock options based on treasury stock method using the closing market price, if higher than average market price 178 55 Weighted average shares outstanding 55,604 55,620 Net income $ 13,249 $ 46,426 Earnings per share $ .24 $ .83 -----END PRIVACY-ENHANCED MESSAGE-----