-----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, A/NAc3QxdZfRxxvbxivdhHR42P6XflHRSP8ZTVgemEmdexYiF3Uqv3i8sK4AvbCB 2EzTc+i1m5/SRCB5v8JTqQ== 0000950134-01-001453.txt : 20010223 0000950134-01-001453.hdr.sgml : 20010223 ACCESSION NUMBER: 0000950134-01-001453 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010214 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTEGRATED SECURITY SYSTEMS INC CENTRAL INDEX KEY: 0000741114 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATIONS EQUIPMENT, NEC [3669] IRS NUMBER: 752422983 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 001-11900 FILM NUMBER: 1545941 BUSINESS ADDRESS: STREET 1: 8200 SPRINGWOOD DR STE 230 CITY: IRVING STATE: TX ZIP: 75063 BUSINESS PHONE: 9724448280 MAIL ADDRESS: STREET 1: 8200 SPRINGWOOD DR SUITE 230 STREET 2: 8200 SPRINGWOOD DR SUITE 230 CITY: IRVING STATE: TX ZIP: 75063 10QSB 1 d84256e10qsb.txt FORM 10QSB FOR QUARTER ENDING DECEMBER 31, 2000 1 U.S. SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 ---------- FORM 10-QSB ---------- [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED December 31, 2000. [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______________ TO ______________. Commission file number 1-11900 INTEGRATED SECURITY SYSTEMS, INC. --------------------------------- (Exact name of small business issuer as specified in its charter) DELAWARE 75-2422983 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 8200 SPRINGWOOD DRIVE, SUITE 230, IRVING, TEXAS 75063 (Address of principal executive offices) (Zip Code)
(972) 444-8280 (Issuer's telephone number) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 [ ] As of January 31, 2001, 10,782,417 shares of the Registrant's common stock were outstanding. Transitional Small Business Disclosure Format: Yes [ ] No [X] 2 INTEGRATED SECURITY SYSTEMS, INC. INDEX
Page ---- PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheets at December 31, 2000 (unaudited) and June 30, 2000 3 Consolidated Statements of Operations (unaudited) for the three months ended December 31, 2000 and 1999 4 Consolidated Statements of Cash Flows (unaudited) for the three months ended December 31, 2000 and 1999 5 Notes to Financial Statements 6 Item 2. Management's Discussion and Analysis or Plan of Operation 8 PART II. OTHER INFORMATION Item 1. Legal Proceedings 12 Item 2. Changes in Securities 12 Item 3. Defaults Upon Senior Securities 12 Item 4. Submission of Matters to a Vote of Security Holders 12 Item 5. Other Information 12 Item 6. Exhibits and Reports on Form 8-K 12 SIGNATURES 13
Page 2 of 13 3 PART I. FINANCIAL INFORMATION Item 1. Financial Statements. INTEGRATED SECURITY SYSTEMS, INC. Consolidated Balance Sheets
December 31, June 30, 2000 2000 -------------- -------------- (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 150,722 $ 99,636 Accounts receivable, net of allowance for doubtful accounts of $70,847 and $58,847, respectively 1,250,070 1,201,491 Inventories 596,631 585,486 Notes receivable 28,546 28,546 Unbilled revenue 66,361 252,567 Other current assets 109,895 112,718 -------------- -------------- Total current assets 2,202,225 2,280,444 Property and equipment, net 852,689 921,695 Capitalized software development costs, net -- 113,713 Other assets 18,898 16,898 -------------- -------------- Total assets $ 3,073,812 $ 3,332,750 ============== ============== LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Accounts payable $ 901,108 $ 582,717 Accrued liabilities 548,714 440,072 Current portion of long-term debt 7,540,943 6,135,260 -------------- -------------- Total current liabilities $ 8,990,765 $ 7,158,049 -------------- -------------- Long-term debt 673,828 728,331 Stockholders' deficit: Preferred stock, $.01 par value, 750,000 shares authorized; 102,250 shares issued and outstanding (liquidation value of $2,045,000) 1,023 1,023 Common stock, $.01 par value, 35,000,000 shares authorized; 10,782,417 and 10,564,145 shares, respectively, issued; and 10,732,417 and 10,514,145 shares, respectively, outstanding 107,824 105,641 Additional paid in capital 14,525,864 14,502,963 Accumulated deficit (21,106,742) (19,044,507) Treasury stock, 50,000 shares (118,750) (118,750) -------------- -------------- Total stockholders' deficit (6,590,781) (4,553,630) -------------- -------------- Total liabilities and stockholders' deficit $ 3,073,812 $ 3,332,750 ============== ==============
The accompanying notes are an integral part of the consolidated financial statements. Page 3 of 13 4 INTEGRATED SECURITY SYSTEMS, INC. Consolidated Statements of Operations (Unaudited)
For the Three Months Ended For the Six Months Ended December 31, December 31, -------------------------------- -------------------------------- 2000 1999 2000 1999 -------------- -------------- -------------- -------------- Sales $ 1,338,346 $ 1,566,041 $ 2,561,853 $ 3,468,182 Cost of sales 868,662 1,021,672 1,789,770 2,196,766 -------------- -------------- -------------- -------------- Gross margin 469,684 544,369 772,083 1,271,416 -------------- -------------- -------------- -------------- Operating expenses: Selling, general and administrative 1,014,513 1,211,216 2,097,898 2,359,184 Research and product development 143,605 100,290 289,080 191,953 -------------- -------------- -------------- -------------- 1,158,118 1,311,506 2,386,978 2,551,137 -------------- -------------- -------------- -------------- Loss from operations (688,434) (767,137) (1,614,895) (1,279,721) Other income (expense): Interest income -- 12,362 139 22,529 Interest expense (191,024) (163,183) (363,316) (311,933) -------------- -------------- -------------- -------------- Net loss $ (879,548) $ (917,958) (1,978,072) $ (1,569,125) Preferred dividends (42,081) (25,078) (84,161) (25,078) -------------- -------------- -------------- -------------- Net loss allocable to common stockholders $ (921,539) $ (943,036) $ (2,062,233) $ (1,594,203) ============== ============== ============== ============== Weighted average common shares outstanding - basic and diluted 10,643,450 10,514,118 10,580,897 10,502,959 ============== ============== ============== ============== Net loss per share - basic and diluted $ (0.09) $ (0.09) $ (0.19) $ (0.15) ============== ============== ============== ==============
The accompanying notes are an integral part of the consolidated financial statements. Page 4 of 13 5 INTEGRATED SECURITY SYSTEMS, INC. Consolidated Statements of Cash Flows (Unaudited)
For the Six Months Ended December 31, ------------------------------ 2000 1999 ------------- ------------- Cash flows from operating activities: Net loss $ (1,978,072) $ (1,569,125) Adjustments to reconcile net loss to net cash used by operating activities: Depreciation 85,643 115,968 Amortization 113,713 113,714 Provision for bad debt 12,000 11,400 Provision for warranty reserve 34,500 28,000 Provision for inventory reserve 9,000 2,500 Unbilled revenue 186,206 47,183 Expenses paid with common stock 22,901 107,176 Changes in operating assets and liabilities: Accounts receivable (60,579) 33,602 Inventories (20,145) 10,902 Other assets 823 (17,351) Accounts payable 318,388 (210,301) Accrued liabilities 74,141 (197,324) ------------- ------------- Net cash used in operating activities (1,201,481) (1,523,656) ------------- ------------- Cash flows from investing activities: Purchase of property and equipment (16,637) (49,072) ------------- ------------- Net cash used in investing activities (16,637) (49,072) ------------- ------------- Cash flows from financing activities: Issuance of common stock 2,183 -- Issuance of preferred stock -- 1,468,481 Dividends on preferred stock (84,161) (25,078) Payments on debt (83,222) (39,136) Proceeds from notes payable and long-term debt 1,434,404 330,000 ------------- ------------- Net cash provided by financing activities 1,269,204 1,734,267 ------------- ------------- Increase in cash and cash equivalents 51,086 161,539 Cash and cash equivalents at beginning of period 99,636 251,113 ------------- ------------- Cash and cash equivalents at end of period $ 150,722 $ 412,652 ============= =============
The accompanying notes are an integral part of the consolidated financial statements. Page 5 of 13 6 INTEGRATED SECURITY SYSTEMS, INC. Notes to Consolidated Financial Statements (Unaudited) Six Months Ended December 31, 2000 and 1999 NOTE 1 - BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. 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 (all of which are normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the interim period are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2001. The accompanying financial statements include the accounts of Integrated Security Systems, Inc. and all of its subsidiaries, with all significant intercompany accounts and transactions eliminated. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's fiscal 2000 Annual Report on Form 10-KSB filed on October 13, 2000, and all amendments to the Form 10-KSB filed after October 13, 2000 with the Securities and Exchange Commission. NOTE 2 - RECLASSIFICATION Certain reclassification of prior year amounts have been made to conform to the current period presentation. NOTE 3 -FINANCING In November 2000, the Company entered into an agreement for a financial restructuring plan with its two largest stockholders, Renaissance Capital Growth & Income Fund III, Inc. and Renaissance US Growth and Income Trust PLC. Both of these Renaissance entities are managed by Renaissance Capital Group, Inc. The financial restructuring plan provides that the Renaissance entities will exchange all their outstanding convertible debentures, convertible notes, notes, and accrued interest into a new class of the Company's preferred stock. The new class of the Company's preferred stock, Series G preferred stock, would have approximately $6 million principal amount, a 5% dividend that accrues but is not paid until redemption, and would be convertible into shares of the Company's common stock at $.20 per share. The Series G preferred stock would be redeemable in years three through five, or earlier from the proceeds of the sale of certain assets. As part of the financial restructuring plan, Renaissance Capital Growth & Income Fund III, Inc. and Renaissance US Growth and Income Trust PLC have agreed to advance a combined $1 million in promissory notes to the Company in a private placement. In the event the Company receives at least $100,000 in additional subscriptions under this placement, the $1 million in promissory notes will be exchanged into the Company's Series F preferred stock. The Series F preferred stock will have a 5% dividend, which accrues for two years, and is convertible into common shares at $.20 per share. The promissory notes will mature 120 days after the date of the promissory notes unless exchanged for the shares of the Series F preferred stock. The financial restructuring plan is subject to stockholder approval at the 2000 annual meeting of the stockholders. The Company currently does not have a sufficient number of shares of Common Stock authorized to accommodate these transactions. The Company will seek stockholder approval to amend its certificate of incorporation to increase the number of authorized shares of Common Stock. Page 6 of 13 7 NOTE 4 - BUSINESS SEGMENTS Information for the Company's reportable segments for the three and six months ended December 31, 2000 and 1999 is as follows:
For the Three Months Ended For the Six Months Ended December 31, December 31, ------------------------------ ------------------------------ 2000 1999 2000 1999 ------------- ------------- ------------- ------------- Sales B&B Electromatic, Inc. $ 1,260,636 $ 1,392,747 $ 2,358,640 2,901,745 Intelli-Site, Inc. 77,710 173,294 203,213 566,437 ------------- ------------- ------------- ------------- $ 1,338,346 $ 1,566,041 $ 2,561,853 $ 3,468,182 ============= ============= ============= ============= Income (loss) from operations B&B Electromatic, Inc. $ 147,511 $ 106,891 $ 106,901 $ 289,500 Intelli-Site, Inc. (542,731) (546,033) (1,136,267) (899,624) Corporate (293,214) (327,995) (585,529) (669,597) ------------- ------------- ------------- ------------- $ (688,434) $ (767,137) $ (1,614,895) $ (1,279,721) ============= ============= ============= =============
Page 7 of 13 8 Item 2. Management's Discussion and Analysis or Plan of Operation. FORWARD LOOKING STATEMENTS This quarterly report on Form 10-QSB includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements can be identified by the use of forward-looking terminology such as "may," "believe," "expect," "intend," "plan," "seek," "anticipate," "estimate," or "continue" or the negative of those words or other variations or comparable terminology. All statements other than statements of historical fact included in this quarterly report on Form 10-QSB, including the statements under "Part I.--Item 2. Management's Discussion and Analysis or Plan of Operation" and located elsewhere in this quarterly report on Form 10-QSB regarding the financial position and liquidity of the Company are forward-looking statements. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Important factors regarding forward-looking statements, including certain risks and uncertainties that could cause actual results to differ materially from the Company's expectations, are disclosed in this quarterly report on Form 10-QSB. The Company does not undertake any obligation to publicly revise its forward-looking statements to reflect events or circumstances that arise after the date of this quarterly report on Form 10-QSB. Important factors that could cause actual results to differ materially from those in the forward-looking statements in this quarterly report on Form 10-QSB include changes from anticipated levels of operations, customer acceptance of existing and new products, anticipated development schedules of new products, anticipated levels of sales, future national or regional economic and competitive conditions, changes in relationships with customers, access to capital, casualty to or other disruption of the Company's production facility and equipment, delays and disruptions in the shipment of the Company's products, government regulations and the ability of the Company to meet its stated business goals. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the Company's cautionary statements. RESULTS OF OPERATIONS THREE MONTHS ENDED DECEMBER 31, 2000 COMPARED TO THREE MONTHS ENDED DECEMBER 31, 1999 Sales. The Company's total sales decreased by $0.2 million, or 15%, to $1.3 million during the quarter ended December 31, 2000 from $1.5 million during the quarter ended December 31, 1999. Sales at the Company's Intelli-Site, Inc. subsidiary decreased from $0.2 million during the quarter ended December 31, 1999 to $0.1 million during the quarter ended December 31, 2000, primarily due to a large end-user system installation project in the quarter ended December 31, 1999. In addition, sales at the Company's B&B Electromatic, Inc. subsidiary decreased from $1.4 million in the quarter ended December 31, 1999 to $1.3 million in the quarter ended December 31, 2000, due to a decline in the volume of road and bridge sales. For the quarter ended December 31, 2000, approximately 94% of the Company's revenues were generated from the sale of products manufactured by the Company, compared to 89% for the quarter ended December 31, 1999. Cost of Sales. Cost of sales as a percentage of sales remained comparable at 65% for the quarters ending December 31, 2000 and December 31, 1999. For the three months ended December 31, 2000, approximately 79% of the Company's cost of sales were related to the products manufactured by the Company, compared to 76% for the three months ended December 31, 1999. Page 8 of 13 9 Gross Margin. Gross margin as a percent of sales remained comparable at 35% for the quarters ending December 31, 2000 and December 31, 1999. Selling, General and Administrative. Selling, general and administrative expenses decreased by approximately 16% or $0.2 million during the quarter ended December 31, 2000 compared to the quarter ended December 31, 1999, due to the reallocation of programming personnel amounting to approximately $33,000 from the operations department to the research and product development department at the Company's Intelli-Site subsidiary. In addition, the implementation of various cost-cutting measures were implemented company wide during the quarter ending December 31, 2000. Research and Product Development. Research and product development expenses increased by approximately 43% or $43,000 during the quarter ended December 31, 2000 compared to the quarter ended December 31, 1999. This increase is primarily due to the reallocation of programming personnel from the operations department to the research and product development department at the Company's Intelli-Site subsidiary. Interest Expense. Interest expense increased by approximately $28,000 during the quarter ended December 31, 2000 compared to the quarter ended December 31, 1999, due to additional debt required to meet working capital needs. SIX MONTHS ENDED DECEMBER 31, 2000 COMPARED TO SIX MONTHS ENDED DECEMBER 31, 1999 Sales. The Company's total sales decreased by $0.9 million, or 26%, to $2.6 million during the six months ended December 31, 2000 from $3.5 million during the six months ended December 31, 1999. Sales at the Company's Intelli-Site, Inc. subsidiary decreased from $0.6 million during the six months ended December 31, 1999 to $0.2 million during the six months ended December 31, 2000, primarily due to the installation of a large end-user system project during the six months ended December 31, 1999. In addition, sales at the Company's B&B Electromatic, Inc. subsidiary decreased from $3.0 million during the six months ended December 31, 1999 to $2.3 million during the six months ended December 31, 2000, due to a decline in the volume of road and bridge sales. For the six months ended December 31, 2000, approximately 92% of the Company's revenues were generated from the sale of products manufactured by the Company, compared to 84% for the six months ended December 31, 1999. Cost of Sales. Cost of sales as a percentage of sales increased to 70% for the six months ended December 31, 2000 from 63% for the six months ended December 31, 1999. For the six months ended December 31, 2000, approximately 81% of the Company's costs of sales were related to the products manufactured by the Company, compared to 77% for the six months ended December 31, 1999. Gross Margin. Gross margin as a percent of sales decreased to 30% for the six months ended December 31, 2000 from 37% for the six months ended December 31, 1999. This decrease is due to a less favorable product mix. Also, because the Intelli-Site subsidiary experiences higher margins, the decrease in end-user system installations and software sales contributed to this margin decrease. Selling, General and Administrative. Selling, general and administrative expenses decreased by approximately 11% or $0.3 million during the six months ended December 31, 2000 compared to the six months ended December 31, 1999. This decrease is due to the reallocation of programming personnel of approximately $0.1 million from the operations department to the research and product development department at the Company's Intelli-Site subsidiary. In addition, implementation of various cost cutting measures were implemented company wide during the six month period ending December 31, 2000. Page 9 of 13 10 Research and Product Development. Research and product development expenses increased by approximately 51% or $97,000 during the six months ended December 31, 2000 compared to the six months ended December 31, 1999. This increase is primarily due to the reallocation of programming personnel from the operations department to the research and product development department at the Company's Intelli-Site subsidiary. Interest Expense. Interest expense increased by approximately $51,000 during the six months ended December 31, 2000 compared to the six months ended December 31, 1999, due to additional debt required to meet working capital needs. LIQUIDITY AND CAPITAL RESOURCES The Company's cash position increased by $51,086 during the six months ended December 31, 2000. At December 31, 2000, the Company had $150,722 in cash and cash equivalents and had $523,000 outstanding under its accounts receivable factoring facility. The factoring facility, which is secured by accounts receivable and inventory, permits the Company to borrow up to $0.8 million, subject to availability under its borrowing base. For the six months ended December 31, 2000, the Company's operating activities used $1,201,481 of cash compared to $1,523,656 of cash used in operations during the six months ended December 31, 1999. The decrease in cash used in operations is primarily due to an increase in accounts payable and accrued expenses. The Company used $16,637 for the purchase of property and equipment during the six months ended December 31, 2000, compared to $49,072 for the six months ended December 31, 1999. During the six months ended December 31, 2000, the Company financed its operations with cash flows from long-term borrowings of $1,434,404 compared to $330,000 during the six months ended December 31, 1999. The Company made payments of $83,222 on debt and other liabilities during the six months ended December 31, 2000, compared to payments of $39,136 on debt and other liabilities during the six months ended December 31, 1999. In November 2000, the Company entered into an agreement for a financial restructuring plan with its two largest stockholders, Renaissance Capital Growth & Income Fund III, Inc. and Renaissance US Growth and Income Trust PLC. Both of these Renaissance entities are managed by Renaissance Capital Group, Inc. The financial restructuring plan provides that the Renaissance entities will exchange all their outstanding convertible debentures, convertible notes, notes, and accrued interest into a new class of the Company's preferred stock. The new class of the Company's preferred stock, Series G preferred stock, would have approximately $6 million principal amount, a 5% dividend that accrues but is not paid until redemption, and would be convertible into shares of the Company's common stock at $.20 per share. The Series G preferred stock would be redeemable in years three through five, or earlier from the proceeds of the sale of certain assets. As part of the financial restructuring plan, Renaissance Capital Growth & Income Fund III, Inc. and Renaissance US Growth and Income Trust PLC have agreed to advance a combined $1 million in promissory notes to the Company in a private placement. In the event the Company receives at least $100,000 in additional subscriptions under this placement, the $1 million in promissory notes will be exchanged into the Company's Series F preferred stock. The Series F preferred stock will have a 5% dividend, which accrues for two years, and is convertible into common shares at $.20 per share. The Page 10 of 13 11 promissory notes will mature 120 days after the date of the promissory notes unless exchanged for the shares of the Series F preferred stock. The financial restructuring plan is subject to stockholder approval at the 2000 annual meeting of the stockholders. The Company currently does not have a sufficient number of shares of Common Stock authorized to accommodate these transactions. The Company will seek stockholder approval to amend its certificate of incorporation to increase the number of authorized shares of Common Stock. The Company's backlog is calculated as the aggregate sales prices of firm orders received from customers less revenue recognized. At December 31, 2000, the Company's backlog was approximately $1.5 million. The Company expects that it will fill the majority of this backlog by December 31, 2001. Page 11 of 13 12 PART II. OTHER INFORMATION Item 1. Legal Proceedings. None. Item 2. Changes in Securities. None. Item 3. Defaults Upon Senior Securities. The Company is in default of the covenants for the convertible debentures issued to Renaissance Capital Growth & Income Fund III, Inc. and Renaissance US Growth & Income Trust PLC. The Renaissance convertible debentures are secured by equity, assets and future contracts, have an interest rate of 9% of outstanding principal balance and are due in monthly installments though December 2003. Monthly principal installments are $10 per $1,000 of the then remaining principal amount of the debenture and were to commence beginning in December 1999 through maturity. These principal payments have not yet begun. At December 31, 2000, the principal amount of these convertible debentures in default was $4.6 million, of which $510,517 is outstanding as of December 31, 2000. The Company has not received notice of default and is currently in negotiations to restructure this debt. The Company currently has no other source of repayment and there can be no assurance that these renegotiations will be successful. Accordingly, the debentures are classified as short-term debt on the financial statements. Item 4. Submission of Matters to a Vote of Security Holders. None. Item 5. Other Information. None. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits None. (b) Reports filed on Form 8-K. None. Page 12 of 13 13 SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Integrated Security Systems, Inc. ---------------------------------- (Registrant) Date: February 14, 2001 /s/ C. A. RUNDELL, JR. ---------------------------------- C. A. Rundell, Jr. Director, Chairman of the Board, and Chief Executive Officer (Principal Executive Officer) Date: February 14, 2001 /s/ HOLLY J. BURLAGE ---------------------------------- Holly J. Burlage Executive Vice President, Chief Financial Officer, Secretary and Treasurer (Principal Accounting and Financial Officer) Page 13 of 13 -----END PRIVACY-ENHANCED MESSAGE-----