10QSB 1 0001.txt U.S. Securities and Exchange Commission Washington, D. C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2000 OR [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from __________ to __________ Commission file number 0-17321 TOR MINERALS INTERNATIONAL, INC. (Exact name of small business issuer as specified in its charter) Delaware (State or other jurisdiction of Incorporation or organization) 722 Burleson Street, Corpus Christi, Texas 78402 (Address of principal executive offices) Issuer's telephone number: (361) 882-5175 None (Former name, former address and former fiscal year, if changed since last report) 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 [ ] State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date. Common Stock, $0.25 par value 5,279,187 (Class) (Outstanding as of November 1, 2000) Transitional Small Business Disclosure Format (check one): Yes [ ] No [ X ] 1 TOR MINERALS INTERNATIONAL, INC. INDEX Page No. PART I. Financial Information Item 1. Financial Statements (Unaudited) Consolidated Condensed Balance Sheets 3 September 30, 2000 and December 31, 1999 Consolidated Condensed Statements of Operations-- 4 three and nine months ended September 30, 2000 and 1999 Consolidated Condensed Statements of Cash Flows-- 5 nine months ended September 30, 2000 and 1999 Notes to Consolidated Condensed Financial Statements 6 - 11 Item 2. Management's Discussion and Analysis of 12 - 15 Financial Condition and Results of Operations PART II. Other Information Item 6. Exhibits and Reports on Form 8-K 16 Signatures 16 2 TOR MINERALS INTERNATIONAL, INC. CONSOLIDATED CONDENSED BALANCE SHEETS SEPTEMBER 30, 2000 AND DECEMBER 31, 1999 (in thousands, except par value) September 30, 2000 December 31, (Unaudited) 1999 ------------ ------------ ASSETS Current assets: Cash and cash equivalents $ 291 $ 2,330 Trade accounts receivable, net 2,188 1,334 Other receivables 106 12 Inventories 6,322 6,490 Other current assets 204 42 ------------ ------------ Total current assets 9,111 10,208 Property, plant and equipment, net 10,416 2,710 Other assets 6 43 ------------ ------------ Total assets $ 19,533 $ 12,961 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 601 $ 1,389 Accrued expenses 915 512 Notes Payable - short-term 1,784 -- Current maturities of long-term debt 945 -- ------------ ------------ Total current liabilities 4,245 1,901 Other long-term debt, excluding current maturities 3,560 -- ------------ ------------ Total liabilities 7,805 1,901 Shareholders' equity Common stock $0.25 par value 1,320 1,193 Additional paid-in capital 15,198 14,316 Accumulated deficit (4,790) (4,449) ------------ ------------ 11,728 11,060 ------------ ------------ Total Liabilities and Stockholders' Equity $ 19,533 $ 12,961 ============ ============ See Notes to Consolidated Financial Statements 3 TOR MINERALS INTERNATIONAL, INC. CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except per share amounts) Three Months Ended Nine Months Ended September 30, September 30, ------------------ ------------------ 2000 1999 2000 1999 -------- -------- -------- -------- NET SALES $ 3,850 $ 2,850 $ 11,387 $ 8,888 COSTS AND EXPENSES: Cost of products sold 3,118 2,017 8,701 6,115 Selling, administrative and general 886 615 2,726 1,947 -------- -------- -------- -------- OPERATING INCOME (LOSS) (154) 218 (40) 826 OTHER INCOME (EXPENSES): Interest income 11 27 49 60 Interest expense (139) -- (336) (4) Other, net (11) 5 (14) 21 -------- -------- -------- -------- INCOME (LOSS) BEFORE INCOME TAX (293) 250 (341) 903 Provision for income tax -- 1 -- 16 -------- -------- -------- -------- NET INCOME (LOSS) $ (293) $ 249 $ (341) $ 887 ======== ======== ======== ======== Earnings (loss) per common share: Basic $ (0.06) $ 0.05 $ (0.07) $ 0.19 Diluted $ (0.06) $ 0.05 $ (0.07) $ 0.19 Weighted average common shares and equivalents outstanding: Basic 5,279 4,773 5,166 4,700 Diluted 5,279 (1) 4,828 5,166 (1) 4,756 -------------------------------------- (1) No shares were added to the number of basic shares in the computation of diluted earnings per share because the effect would be antidilutive See Notes to Condensed Financial Statements 4 TOR MINERALS INTERNATIONAL, INC. CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) Nine Months Ended September 30, --------------------- 2000 1999 --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ (341) $ 887 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 524 373 Loss on sale of asset(s) 5 (10) Other Assets 21 -- Changes in working capital: Receivables 491 (94) Inventories 1,519 (694) Other current assets (30) (31) Accounts payable and accrued expenses (1,396) 491 --------- --------- Net cash provided by operating activities 793 922 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of TMM, net of cash acquired (4,848) -- Additions to property, plant and equipment (407) (637) Proceeds from sale of asset(s) 37 666 --------- --------- Net cash provided by (used in) investing activities (5,218) 29 --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Net Proceeds (Payments)-Long-term Debt 2,839 (389) Net Payments-Line of Credit (511) -- Net Proceeds-Export Credit 49 -- Proceeds from issuance of common stock 9 24 --------- --------- Net cash provided by (used in) financing activities 2,386 (365) --------- --------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (2,039) 586 CASH AND CASH EQUIVALENTS: AT BEGINNING OF PERIOD 2,330 1,737 --------- --------- AT END OF PERIOD $ 291 $ 2,323 ========= ========= Supplemental disclosure of cash flow information Interest income $ 49 $ 60 Interest expense 306 4 See Notes to Consolidated Financial Statements 5 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. Accounting Policies Basis of Presentation The interim financial statements of TOR Minerals International, Inc. (the "Company") (formerly Hitox Corporation of America) are unaudited, but include all adjustments which the Company deems necessary for a fair presentation of its financial position and results of operations. All adjustments are of a normal and recurring nature. Results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. All significant accounting policies conform to those previously set forth in the Company's fiscal 1999 Annual Report on Form 10- KSB. In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period. Actual results could differ from these estimates. Stock Based Compensation The Company grants stock options for a fixed number of shares to employees with an exercise price equal to the fair value of the shares at the date of grant. The Company has accounted for stock option grants in accordance with APB Opinion No. 25, Accounting for Stock Issued to Employees, and, accordingly, recognized no compensation expense for the stock option grants. The Company did not adopt FASB Statement No. 123, Accounting for Stock-Based Compensation, and will continue to account for stock option grants in accordance with APB Opinion No. 25. FASB Statement 123 requires certain disclosures about stock-based compensation plans for all companies regardless of the method used to account for them. Effective in 1996 calendar year-end financial statements, companies that continue to apply APB 25 are required to disclose pro forma information as if the measurement provisions of Statement 123 had been adopted in their entirety. Such pro forma information was included in the Company's 1999 Form 10-KSB. Reclassifications Certain reclassifications have been made in prior quarters' financial statements to conform to classifications used in the current quarter. 6 2. Acquisition of TOR Minerals Malaysia (formerly Malaysian Titanium Corporation, Sdn. Bhd.) On March 6, 2000, the Company announced the purchase of Malaysian Titanium Corporation, Sdn. Bhd. ("MTC"), a private Malaysian company. Subsequent to the acquisition, MTC changed its name to TOR Minerals Malaysia, Sdn. Bhd., ("TMM"). The sale and purchase agreement (the "Agreement") was signed in Malaysia effective March 1, 2000, and provided for the purchase by the Company of all of the issued and outstanding shares of TMM from Megamin Ventures Sdn. Bhd., ("Megamin"). Megamin is also the Company's largest shareholder, with approximately 28% of the Company's outstanding shares as of December 31, 1999. After giving effect to the Agreement, Megamin owned approximately 35% of the Company's outstanding shares as of March 1, 2000. Prior to the Agreement, Megamin had one appointee to the Company's Board of Directors. Per the Agreement, the Company nominated an additional person to serve on the Company's Board of Directors as a representative of Megamin. Pursuant to the terms of the Agreement, the Company paid $3,775,000 in cash and issued 500,000 shares of its common stock in exchange for 100% of the shares of TMM. The Company's shares closed at $2.00 on the effective date of the Agreement. The Company also agreed to pay Megamin a total of approximately $1,050,000 in 4 equal semi annual payments beginning July 1, 2000. The discounted present value of those payments is approximately $955,000. Transaction costs are estimated to total $155,000. The Company recorded the transaction as a purchase, with a cost of approximately $5,885,000, plus assumption of TMM's bank debt of approximately $4,000,000. TMM is the Company's sole supplier of synthetic rutile, the raw material for the Company's proprietary titanium pigment HITOX (Registered Trademark). TMM is also producing HITOX pigment in Malaysia under a license from the Company and is selling HITOX pigment in Asia and Europe. TMM was previously a subsidiary of the Company and was sold to Megamin and other investors in 1994. The acquisition provides the opportunity to control the raw material supply for the Company's primary product, HITOX pigment, and represents both a low cost production site for HITOX pigment and better access to markets outside the U.S. 7 3. Debt The Company's $2,000,000 line of credit with Bank of America (the "Bank") expired April 30, 2000, and a new $2,000,000 line of credit (the "Line") was established with the Bank that expires on April 30, 2002. The interest rate for the Line is either a fixed or floating rate, at the Company's option. The floating rate is the daily Eurodollar rate plus 225 basis points, and the fixed rate is available in 30, 60 or 90 day tranches, at 225 basis points above the Eurodollar Rate for the chosen time period. The amount of credit available to the Company under the Line is limited to the lesser of $2,000,000 or 80% of eligible accounts receivable. At September 30, 2000, $1,243,000 was available to the Company under the line and the Company had no outstanding borrowings under the Line on that date. The Company has one term loan with Bank of America. The $3,500,000 proceeds of the loan were used to finance the purchase of TMM. The loan is to be repaid in full in a single payment on October 5, 2001. The company may prepay all or part of the principal outstanding at any time without penalty, subject to any restrictions caused by the choice of interest rate. The interest rate is the Bank's prime rate or the LIBOR rate plus 225 basis points, as chosen by the Company. The LIBOR based rate is available in 30, 60 or 90 day tranches, with a minimum of $1,000,000 for any one tranche. If a LIBOR based rate is used the Company cannot prepay any principal related to that tranche for the period chosen without paying a penalty. The Company reduced the principal balance under the term loan by $1,200,000 in the third quarter of 2000. The $2,300,000 principal balance outstanding on September 30, 2000 was borrowed using a 30-day LIBOR tranche with an effective interest rate of 8.87% per annum. The Company's subsidiary, TMM, has loan agreements with two banks in Malaysia, HSBC Bank Malaysia Berhad and RHB Bank Berhad, which provide a total short term credit facility of $6,447,000. At September 30, 2000 TMM had utilized $1,989,000 of that facility, including $1,275,000 outstanding under an export credit refinancing facility (ECR). ECR, a government supported financing arrangement specifically for exporters, is used by TMM for short-term financing against customers' purchase orders. In addition, TMM has two term loans outstanding with principal balances outstanding of $350,000 and $1,132,000 at September 30, 2000. Both loans have an effective interest rate of 8.8% per annum. 8 4. Business Segment Information The Company and its subsidiaries operate in one reportable segment of pigment manufacturing and related products. All United States manufacturing is done at the facility located in Corpus Christi, Texas. Foreign manufacturing is done by the Company's wholly owned subsidiary located in Malaysia. A summary of the Company's manufacturing operations by geographic area is presented below: Adjustments United and States Malaysia Eliminations Consolidated --------- --------- ------------ ------------ Three months ended September 30, 2000 ---------------------- Sales Revenue: Customer sales $ 3,359 $ 491 $ 3,850 Intercompany sales -- 145 145 -- --------- --------- --------- --------- Total Sales Revenue $ 3,359 $ 636 $ 145 $ 3,850 --------- --------- --------- --------- Segment profit (loss) $ (143) $ (122) $ (28) $ (293) ========= ========= ========= ========= Nine months ended September 30, 2000 ---------------------- Sales Revenue: Customer sales $ 10,317 $ 1,073 $ 11,387 Intercompany sales -- 956 956 --------- --------- --------- --------- Total Sales Revenue $ 10,317 $ 2,026 $ 956 $ 11,387 --------- --------- --------- --------- Segment profit (loss) $ 48 $ (131) $ (258) $ (341) ========= ========= ========= ========= Segment assets $ 15,960 $ 13,525 $ (9,952) $ 19,533 ---------------------------------------- Sales from the subsidiary to the parent company are based upon profit margins which represent competitive pricing of similar products, or based on contractual arrangements that existed prior to TMI's acquisition of TMM. 9 5. Pro Forma Financial Information The results of operations for the nine-month period ended September 30, 2000 includes the operations of TMM from the acquisition date of March 1, 2000 (see Note 2). Assuming the acquisition of TMM had occurred at January 1, 1999, unaudited pro forma consolidated results of operations for the nine months ended September 30, 2000 and 1999 would have been as follows: Pro Forma (Unaudited) Nine months Ended September 30 In thousands, except per share data 2000 1999 ------- ------- Net revenue $12,903 $10,451 Net income $467 $196 Net income per share: Basic $0.09 $0.04 Diluted $0.09 $0.04 The pro forma information above is presented in response to applicable accounting rules relating to business acquisitions and is not necessarily indicative of the actual results that would have been achieved had the acquisition of TMM occurred at the beginning of 1999, nor is it indicative of future results of operations. 10 6. Calculation of Basic and Diluted Earnings per Share The following table sets forth the computation of basic and diluted earnings per share: (in thousands, except per share amounts) Three Months Ended Nine Months Ended September 30, September 30, ------------------- ------------------ 2000 1999 2000 1999 ------- ------- ------- ------- Numerator: Net Income (loss) $ (293) $ 249 $ (341) $ 887 Numerator for basic earnings per share - income (loss) available to common stockholders (293) 249 (341) 887 ------- ------- ------- ------- Effect of dilutive securities: -- -- -- -- ------- ------- ------- ------- Numerator for diluted earnings per share - income (loss) available to common stockholders after assumed conversions $ (293) $ 249 $ (341) $ 887 Denominator: Denominator for basic earnings per share - weighted-average shares 5,279 4,773 5,166 4,700 Effect of dilutive securities: Employee stock options -- 55 -- 56 ------- ------- ------- ------- Dilutive potential common shares -- 55 -- 56 ------- ------- ------- ------- Denominator for diluted earnings per share - weighted-average shares and assumed conversions 5,279 (1) 4,828 5,166 (1) 4,756 ===== ===== ===== ===== Basic earnings per common share: Net Income (Loss) $(0.06) $ 0.05 $(0.07) $ 0.19 ======= ======= ======= ======= Diluted earnings per common share: Net Income (Loss) $(0.06) $ 0.05 $(0.07) $ 0.19 ======= ======= ======= ======= --------------------------------------------- (1) No shares were added to the number of basic shares in the computation of diluted earnings per share because the effect would be antidilutive. Options to purchase 535,600 shares of common stock were not included in the computation of diluted earnings per share because the effect would be antidilutive. 11 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS Sales: Net sales increased $1,000,000, or 35.1% to $3,850,000 in the third quarter of 2000 compared with $2,850,000 in the same quarter last year. Pigment sales accounted for $918,000 of the sales increase, with TMM providing $410,000 of those sales. Sales of the Company's HITOX pigment line increased $433,000 in the third quarter of 2000 compared with 1999, while sales of the HALTEX pigment line increased $352,000 and sales of the BARTEX pigment line increased $138,000. For the nine months ended September 30, 2000, net sales increased $2,499,000, or 28.1% to $11,387,000 compared with $8,888,000 for the same period last year. Pigment sales accounted for $2,308,000 of the sales increase, with TMM providing $879,000 of those pigment sales. Sales of the Company's HITOX pigment line increased $1,116,000, while sales of the HALTEX pigment line increased $920,000 and sales of the BARTEX pigment line increased $371,000. Gross Profit: For the quarter, gross profit decreased $101,000 due to higher production costs in the US and in Malaysia and due to a change in the product mix that included higher sales of lower margin products. The gross profit percentage for the quarter decreased from 29.2% in the third quarter 1999 to 19.0% in the same quarter this year. The higher production costs in the US were primarily the result of higher natural gas prices. At TMM, higher maintenance expenses were incurred during a two-month period when synthetic rutile was not produced, which resulted in a negative margin for the quarter. For the year, gross profit decreased $87,000. The YTD gross profit percentage decreased from 31.2% in 1999 to 23.6% in 2000. Expenses: Total selling, administrative and general expenses ("SG&A expense") increased from $615,000 during the third quarter of 1999, to $886,000 for the third quarter of 2000, an increase of $271,000 or 44.1%. Approximately $165,000 of the increase is the result of including SG&A expenses from TMM in 2000 after the acquisition. The remainder of the increase is primarily the result of higher selling expenses in 2000 compared with 1999. For the year, SG&A expense increased from $1,947,000 in 1999 to $2,726,000 in 2000, an increase of $779,000 or 40.0%. Approximately $442,000 of the increase is the result of including SG&A expenses from TMM in 2000 after the acquisition. The remainder of the increase is primarily the result of higher selling expense in 2000 compared with 1999. 12 Interest Income: During the third quarter of 2000, excess funds were deposited in short- term interest bearing investments resulting in interest income for the quarter of $11,000 compared to $27,000 for the same quarter last year. For the year, interest income decreased from $60,000 in 1999 to $49,000 in 2000. The year to date decrease is the result of lower cash balances available for investment during the first nine months of 2000. Interest Expense: Interest expense increased $139,000 in the third quarter of 2000 as compared with the same quarter last year when the Company had no long-term debt. For the nine-month period ended September 30, 2000 interest expense was $336,000 compared to $4,000 for the same period in 1999. The increase in interest expense is due to the financing of the purchase of TMM and interest expense associated with TMM's debt. Provision for Income Tax: Due to operating losses for both the three months and nine months ended September 30, 2000, the Company recorded no income tax expense for either period in 2000. LIQUIDITY AND CAPITAL RESOURCES Cash decreased from $2,330,000 at December 31, 1999 to $291,000 at September 30, 2000. During the nine month period, cash provided by operating activities totaled $793,000, resulting from changes in working capital. Net cash used in investing activities totaled $5,218,000 and financing activities provided $2,386,000, both related primarily to the acquisition of TMM. Accounts receivable increased at September 30, 2000 compared with December 31, 1999 due to higher sales in 2000 and due to the acquisition of TMM. Inventories decreased modestly over the nine-month period ended September 30, 2000, primarily due to lower production at TMM. 13 The Company's $2,000,000 line of credit with Bank of America (the "Bank") expired April 30, 2000, and a new $2,000,000 line of credit (the "Line") was established with the Bank that expires on April 30, 2002. The interest rate for the Line is either a fixed or floating rate, at the Company's option. The floating rate is the daily Eurodollar rate plus 225 basis points, and the fixed rate is available in 30, 60 or 90 day tranches, at 225 basis points above the Eurodollar Rate for the chosen time period. The amount of credit available to the Company under the Line is limited to the lesser of $2,000,000 or 80% of eligible accounts receivable. At September 30, 2000, $1,243,000 was available to the Company under the line and the Company had no outstanding borrowings under the Line on that date. The Company has one term loan with Bank of America. The $3,500,000 proceeds of the loan were used to finance the purchase of TMM. The loan is to be repaid in full in a single payment on October 5, 2001. The company may prepay all or part of the principal outstanding at any time without penalty, subject to any restrictions caused by the choice of interest rate. The interest rate is the Bank's prime rate or the LIBOR rate plus 225 basis points, as chosen by the Company. The LIBOR based rate is available in 30, 60 or 90 day tranches, with a minimum of $1,000,000 for any one tranche. If a LIBOR based rate is used the Company cannot prepay any principal related to that tranche for the period chosen without paying a penalty. The Company reduced the principal balance under the term loan by $1,200,000 in the third quarter of 2000. The $2,300,000 principal balance outstanding on September 30, 2000 was borrowed using a 30-day LIBOR tranche with an effective interest rate of 8.87% per annum. The Company's subsidiary, TMM, has loan agreements with two banks in Malaysia, HSBC Bank Malaysia Berhad and RHB Bank Berhad, which provide a total short term credit facility of $6,447,000. At September 30, 2000 TMM had utilized $1,989,000 of that facility, including $1,275,000 outstanding under an export credit refinancing facility (ECR). ECR, a government supported financing arrangement specifically for exporters, is used by TMM for short-term financing against customers' purchase orders. In addition, TMM has two term loans outstanding with principal balances outstanding of $350,000 and $1,132,000 at September 30, 2000. Both loans have an effective interest rate of 8.8% per annum. TMM is presently dependent upon the Company for purchasing its synthetic rutile production. TMM's synthetic rutile production capacity is expected to meet and exceed the short-term needs of TMM or the Company for synthetic rutile to process into HITOX. As a result, the Company is endeavoring to find third-party buyers for the excess synthetic rutile production, so as to enable TMM to operate the plant efficiently and achieve lower unit production costs through economies of scale. Should attempts to find third-party buyers of synthetic rutile not succeed, the Company may adjust production levels of synthetic rutile at the Malaysian plant to avoid a build-up of inventories and the associated carrying cost. If production levels of synthetic rutile at TMM are reduced, production costs there will increase and could negatively effect margins as they did in the third quarter of 2000. 14 TMM measures and records its transactions in terms of the local Malaysian currency, the ringgit. Normally, if the value of the ringgit compared with the US dollar varied, the Company would report the effects of translating the ringgit to the US dollar in an equity account in the consolidated balance sheet. However, Malaysia imposed capital controls and fixed its ringgit currency at 3.8 ringgits per 1 US dollar in September of 1998 to stem the outflow of short-term capital in the wake of the Asian financial crisis. The Malaysian government has not changed the fixed exchange rate since that time. Therefore, no translation account is necessary in the consolidated balance sheet. There can be no assurance that the Malaysian government will maintain the current fixed rate of exchange. OTHER MATTERS Forward Looking Information Certain portions of this report contain forward-looking statements about the business, financial condition and prospects of the Company. The actual results of the Company could differ materially from those indicated by the forward-looking statements because of various risks and uncertainties including, without limitation, changes in demand for the Company's products, changes in competition, economic conditions, fluctuations in market price for TiO2 pigments, interest rate fluctuations, changes in the capital markets, changes in tax and other laws and governmental rules and regulations applicable to the Company's business, and other risks indicated in the Company's filing with the Security and Exchange Commission. These risks and uncertainties are beyond the ability of the Company to control, and, in many cases, the Company cannot predict all of the risks and uncertainties that could cause its actual results to differ materially from those indicated by the forward-looking statements. When used in this report, the words "believes," "estimates," "plans," "expects," "anticipates" and similar expressions as they relate to the Company or its management are intended to identify forward-looking statements. 15 PART II Item 6. Exhibits and Reports on Form 8K Page No. ------- (a) Exhibits None (b) Reports on Form 8-K None 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. TOR Minerals International, Inc. ____________ (Registrant) Date: November 13, 2000 ______________________________________ Bernard A. Paulson, President and CEO Date: November 13, 2000 ______________________________________ Craig Schkade, Chief Financial Officer (Principal Financial and Accounting Officer) 16