10-Q 1 0001.txt WIRELESS TELECOM GROUP, INC. 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended September 30, 2000 [ ] 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 1-11916 WIRELESS TELECOM GROUP, INC. ---------------------------- (Exact name of registrant as specified in its charter) New Jersey 22-2582295 ------------------------------------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) East 64 Midland Avenue Paramus, New Jersey 07652 ----------------------------------------- ----- (Address of principal executive offices) (Zip Code) (201) 261-8797 -------------------------------------------------- Registrant's telephone number, including area code ------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report.) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO --- --- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the most recent practicable date. Common Stock - Par Value $.01 19,192,777 ----------------------------- ------------------------ Class Outstanding Shares At November 7, 2000 WIRELESS TELECOM GROUP, INC. Table of Contents
PART I. FINANCIAL INFORMATION Page(s) Item 1 -- Consolidated Financial Statements: Condensed Balance Sheets as of September 30, 2000 (unaudited) and December 31, 1999 3 Condensed Statements of Operations for the Three and Nine Months Ended September 30, 2000 and 1999 (unaudited) 4 Condensed Statements of Cash Flows for the Nine Months Ended September 30, 2000 and 1999 (unaudited) 5 Notes to Interim Condensed Financial Statements (unaudited) 6 - 7 Item 2 -- Management's Discussion and Analysis of Financial Condition and Results of Operations 8 - 10 PART II. OTHER INFORMATION Item 1 -- Legal Proceedings 11 Item 2 -- Changes in Securities 11 Item 3 -- Defaults upon Senior Securities 11 Item 4 -- Submission of Matters to a Vote of Security Holders 11 Item 5 -- Other Information 11 Item 6 -- Exhibits and Reports on Form 8-K 11 Signatures 12 Exhibit 11.1 13 Exhibit 27 14
2 PART I - FINANCIAL INFORMATION ITEM 1 - Financial Statements WIRELESS TELECOM GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
- ASSETS - SEPTEMBER 30, DECEMBER 31, 2000 1999 ------------ ------------ (UNAUDITED) CURRENT ASSETS: Cash and cash equivalents $ 21,069,504 $ 22,225,763 Accounts receivable -- net of allowance for doubtful accounts of $76,619 and $44,681 respectively 2,911,290 1,849,640 Inventories 4,211,124 2,857,456 Prepaid expenses and other current assets 799,157 2,010,797 ------------ ------------ TOTAL CURRENT ASSETS 28,991,075 28,943,656 ------------ ------------ PROPERTY, PLANT AND EQUIPMENT - NET 1,035,036 963,897 ------------ ------------ OTHER ASSETS: Goodwill - net 2,240,385 2,365,385 Investment property - net (Note 3) 4,235,013 4,247,711 Other 956,255 449,941 ------------ ------------ TOTAL OTHER ASSETS 7,431,653 7,063,037 ------------ ------------ $ 37,457,764 $ 36,970,590 ============ ============ - LIABILITIES AND SHAREHOLDERS' EQUITY - CURRENT LIABILITIES: Accounts payable $ 882,783 $ 1,305,558 Accrued expenses and other current liabilities 679,548 1,282,597 Mortgage payable - current 29,043 31,509 Income tax payable 74,436 218,391 ------------ ------------ TOTAL CURRENT LIABILITIES 1,665,810 2,838,055 ------------ ------------ DEFERRED INCOME TAXES 206,610 206,610 ------------ ------------ OTHER L/T LIABILITIES: Notes payable -- 215,932 Mortgage payable - long term 3,212,091 3,229,976 Other long term liabilities 94,436 363,410 ------------ ------------ TOTAL OTHER L/T LIABILITIES 3,306,527 3,809,318 ------------ ------------ COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY: Preferred stock, $.01 par value, 2,000,000 shares authorized, none issued -- -- Common stock, $.01 par value, 75,000,000 shares authorized, 19,781,677 and 19,588,011 shares issued, respectively 197,817 195,880 Additional paid-in-capital 9,016,314 8,253,861 Retained earnings 24,335,521 22,937,701 Treasury stock at cost, 588,900 shares (1,270,835) (1,270,835) ------------ ------------ 32,278,817 30,116,607 ------------ ------------ $ 37,457,764 $ 36,970,590 ============ ============
The accompanying notes are an integral part of these financial statements. 3 WIRELESS TELECOM GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
For the Three Months For the Nine Months Ended September 30, Ended September 30, -------------------------- ------------------------ 2000 1999 2000 1999 ---- ---- ---- ---- NET SALES $4,742,774 $3,196,004 $13,685,906 $9,823,516 ---------- ---------- ----------- ---------- COSTS AND EXPENSES: Cost of sales 1,917,995 1,848,897 5,859,952 4,643,393 Operating expenses 2,199,255 1,540,387 5,559,647 3,887,580 Interest, dividend and other income (302,561) (241,761) (730,778) (669,744) Settlement of litigation (Note 4) 18,887 -- 683,845 -- ---------- ---------- ----------- ---------- TOTAL COSTS AND EXPENSES 3,833,576 3,147,523 11,372,666 7,861,229 ---------- ---------- ----------- ---------- INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAX 909,198 48,481 2,313,240 1,962,287 PROVISION FOR INCOME TAXES 365,878 (46,941) 915,420 605,767 ---------- ---------- ----------- ---------- INCOME FROM CONTINUING OPERATIONS 543,320 95,422 1,397,820 1,356,520 ---------- ---------- ----------- ---------- DISCONTINUED OPERATIONS (NOTE 1): Income from discontinued operations - net of income taxes -- 333 -- 8,353 Gain (Loss) on sale of test equipment business - net of income taxes -- (17,267) -- 3,570,384 ---------- ---------- ----------- ---------- TOTAL DISCONTINUED OPERATIONS -- (16,934) -- 3,578,737 ---------- ---------- ----------- ---------- NET INCOME $ 543,320 $ 78,488 $ 1,397,820 $4,935,257 ========== ========== =========== ========== NET INCOME PER COMMON SHARE (NOTE 2): BASIC Continuing Operations $ .03 $ .00 $ .07 $ .07 Discontinued Operations -- -- -- .19 ---------- ---------- ----------- ---------- $ .03 $ .00 $ .07 $ .26 ========== ========== =========== ========== DILUTED Continuing Operations $ .03 $ .00 $ .07 $ .07 Discontinued Operations -- -- -- .18 ---------- ---------- ----------- ---------- $ .03 $ .00 $ .07 $ .25 ========== ========== =========== ==========
The accompanying notes are an integral part of these financial statements. 4 WIRELESS TELECOM GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Nine Months Ended September 30, --------------------------- 2000 1999 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 1,397,820 $ 4,935,257 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 359,072 388,816 Non cash compensation 33,750 - Other income (50,004) (38,892) Provision for losses on accounts receivable 31,938 410,914 Deferred taxes - 604,694 Gain on sale of discontinued division - (5,571,467) Changes in assets and liabilities: (Increase) decrease in accounts receivable (1,093,588) 1,243,636 (Increase) in inventories (1,353,668) (81,449) Decrease in prepaid expenses and other assets 1,211,640 1,059,350 (Decrease) increase in accounts payable and accrued expenses (901,431) 156,143 (Decrease) increase in income taxes payable (143,955) (301,746) ----------- ----------- NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES (508,426) 2,805,256 ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES Purchase of investment (500,000) - Capital expenditures (292,513) (181,625) Officer's life insurance - 24,159 Proceeds from sale of discontinued division - 17,230,730 Proceeds from covenant not to compete - 200,000 Purchase of Noise Product line - (2,500,000) Expenses related to disposal of division - (1,953,052) Increase in real estate escrow (6,314) - ----------- ----------- NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES (798,827) 12,820,212 ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES Payments on mortgage (20,350) - Payment of long term debt (215,932) (54,991) Related party loans (37,500) - Acquisition of treasury stock - (956,347) Proceeds from exercise of stock options\warrants 424,776 - ----------- ----------- NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 150,994 (1,011,338) ----------- ----------- NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (1,156,259) 14,614,130 Cash and cash equivalents, at beginning of year 22,225,763 9,079,153 ----------- ----------- CASH AND CASH EQUIVALENTS, AT END OF PERIOD $21,069,504 $23,693,283 =========== =========== SUPPLEMENTAL INFORMATION: Cash paid during the period for taxes $ 1,517,900 $ 2,068,780
The accompanying notes are an integral part of these financial statements. 5 WIRELESS TELECOM GROUP, INC. NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES AND POLICIES The condensed, consolidated balance sheet as of September 30, 2000 and the condensed, consolidated statements of operations for the three and nine month periods ended September 30, 2000 and 1999 and the condensed, consolidated statements of cash flows for the nine month periods ended September 30, 2000 and 1999 have been prepared by the Company without audit. The consolidated financial statements include the accounts of Wireless Telecom Group, Inc. and its wholly-owned subsidiaries Boonton Electronics Corporation, WTG Foreign Sales Corporation and NC Mahwah, Inc. On July 7, 2000, Wireless Telecom Group, Inc. and Boonton Electronics Corp. closed on a merger under an agreement dated March 2, 2000 and as amended on April 28, 2000. A newly formed, wholly-owned subsidiary of the Company, WTT Acquisition Corp., merged with and into Boonton, a public entity. Each share of Boonton common stock was converted into .79 shares of the Company's common stock with aggregated consideration totaling 1,885,713 shares of Wireless common stock. The merger is being accounted for as a pooling of interests and accordingly, all periods prior to the merger have been restated to include the results of operations, financial position and cash flows of Boonton. On March 11, 1999 the Company consummated the sale of all of its Wireless Test Equipment Business to Telecom Analysis Systems, Inc., a New Jersey corporation ("TAS"), for a purchase price of approximately $19 million pursuant to an Asset Purchase Agreement, dated January 7, 1999, between the Company and TAS (the "Asset Purchase Agreement"). Also, pursuant to the Asset Purchase Agreement, the Company purchased TAS' products relating to single-function noise generation (the "Noise Assets") for a purchase price of approximately $2.5 million, and the Company and TAS entered into non-competition agreements with the business associated with the respective products purchased by each. In the opinion of management, the accompanying condensed consolidated financial statements referred to above contain all necessary adjustments, consisting of normal accruals and recurring entries only, which are necessary to present fairly the Company's results for the interim periods being presented. The accounting policies followed by the Company are set forth in Note 1 to the Company's financial statements included in its annual report on Form 10-K for the year ended December 31, 1999, which is incorporated herein by reference. Specific reference is made to this report for a description of the Company's securities and the notes to financial statements included therein, since certain information and footnote disclosures normally included in financial statements in accordance with generally accepted accounting principles have been condensed or omitted from this report. The results of operations for the three and nine month periods ended September 30, 2000 and 1999 are not necessarily indicative of the results to be expected for the full year. 6 NOTE 2 - INCOME PER COMMON SHARE Income per common share is computed by dividing the net income by the weighted average number of common shares and common equivalent shares outstanding during each period utilizing SFAS 128 "Earnings Per Share" ("SFAS 128"). SFAS 128 requires the presentation of "basic" and "diluted" earnings per share on the face of the income statement. NOTE 3 - INVESTMENT PROPERTY The Company has reclassified the land and building it owns in Mahwah, New Jersey. This property is not being utilized for operations and is currently available for sale or lease. NOTE 4 - SETTLEMENT OF LITIGATION On March 15, 1999, a complaint was filed in the Superior Court of the State of California for the County of Orange. The action was brought by Mr. David Day, an individual; David Day d/b/a Day Test & Measurements and Day Test & Measurements, as plaintiffs against Noise Com, Inc., a New Jersey corporation; Wireless Telecom Group, Inc., a New Jersey corporation; Telecom Analysis Systems, Inc., Bowthorpe PLC and Does 1 through 100, inclusive as defendants. The action set forth several causes of action, including breach of contract and fraud relating to an alleged failure of the defendants to pay full commissions allegedly owed to the plaintiff. On April 23, 1999, Wireless Telecom Group, Inc. d/b/a Noise Com commenced an arbitration proceeding against Day Test and Measurements ("Day Test"), a plaintiff in the aforementioned California action. In the arbitration, venued in New Jersey and brought under the rules of the American Arbitration Association, Noise Com alleged that Day Test, a former sales representative for Noise Com, failed to act with diligence and loyalty in performing its duties as Noise Com's agent. Also, the arbitration sought to resolve the dispute concerning the commissions allegedly due Day Test. On June 7, 2000, Wireless Telecom Group, Inc. d/b/a Noise Com settled both the California action and the New Jersey action. The terms of the settlement included, among other things, a payment from Noise Com to David Day of $1,250,000. The Company had previously accrued approximately $585,000 in connection with this matter and has recorded an additional cost of approximately $684,000 during the nine months ended September 30, 2000. 7 ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS INTRODUCTION Wireless Telecom Group, Inc., and Boonton Electronics Corporation (collectively the "Company"), develops, manufactures and markets a wide variety of electronic noise sources and electronic testing and measuring instruments including power meters, voltmeters and modulation meters, and in addition, until March 11, 1999, test instruments for the wireless telecommunication industry. The Company's products have historically been primarily used to test the performance and capability of cellular/ PCS and satellite communications systems, and to measure the power of RF and microwave systems. Other applications include radio, radar, wireless local area network (WLAN) and digital television. On July 7, 2000, Wireless Telecom Group, Inc., and Boonton Electronics Corp. closed on a merger under an agreement dated March 2, 2000 and as amended on April 28, 2000. A newly formed, wholly-owned subsidiary of the Company, WTT Acquisition Corp., merged with and into Boonton, a public entity. Each share of Boonton common stock was converted into .79 shares of the Company's common stock with aggregated consideration totaling 1,885,713 shares of Wireless common stock. The merger is being accounted for as a pooling of interests and accordingly, all periods prior to the merger have been restated to include the results of operations, financial position and cash flows of Boonton. On March 11, 1999, the Company consummated the sale of all its Wireless Test Equipment Business to Telecom Analysis Systems, Inc., a New Jersey corporation ("TAS"), for a purchase price of approximately $19 million pursuant to an Asset Purchase Agreement, dated January 7, 1999, between the Company and TAS (the "Asset Purchase Agreement"). Also, pursuant to the Asset Purchase Agreement, the Company purchased TAS' products relating to the single-function noise generation (the "Noise Assets") for a purchase price of approximately $2.5 million, and the Company and TAS entered into non-competition agreements with the businesses associated with the respective products purchased by each. The financial information as regards continuing operations presented herein is derived from: (i) Condensed consolidated balance sheets as of September 30, 2000 and as of December 31, 1999 (ii) Condensed consolidated statements of operations for the three and nine month periods ended September 30, 2000 and 1999 and (iii) Condensed consolidated statements of cash flows for the nine month periods ended September 30, 2000 and 1999. OPERATIONS For the nine months ended September 30, 2000 as compared to the corresponding period of the previous year, net sales increased to $13,685,906 from $9,823,516, an increase of $3,862,390 or 39.3%. For the quarter ended September 30, 2000 as compared to the corresponding period of the previous year, net sales increased to $4,742,774 from $3,196,004 an increase of $1,546,770 or 48.4%. This increase is primarily due to an increase in application of the Company's products as built-in testers in wireless networks and an overall increase in the market for the Company's noise-based communication and power measurement products. The Company's gross profit on net sales from continuing operations for the nine months ended September 30, 2000 was $7,825,954 or 57.2% as compared to $5,180,123 or 52.7% for the nine months ended September 30, 1999. Gross profit on net sales from continuing operations for the quarter ended September 30, 2000 was $2,824,779 or 59.6% as compared to 8 ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) $1,347,107 or 42.1% for the three months ended September 30, 1999. The Company can experience variations in gross profit based upon the mix of product sales as well as variations due to revenue volume and economies of scale. The Company continues to rigidly monitor costs associated with material acquisition, manufacturing and production. Operating expenses for the nine months ended September 30, 2000 were $5,559,647 or 40.6% of net sales as compared to $3,887,580 or 39.6% of net sales for the nine months ended September 30, 1999. Operating expenses for the quarter ended September 30, 2000 were $2,199,255 or 46.4% of net sales as compared to $1,540,387 or 48.2% of net sales for the quarter ended September 30, 1999. For the three and nine months ended September 30, 2000 as compared to the same periods of the prior year, operating expenses increased in dollars by $658,868 and $1,672,067, respectively. This increase is primarily due to increased professional fees and related expenses in connection with the Boonton acquisition (see above). Additionally, the Company had increased spending for research and development, advertising and costs associated with the Mahwah, New Jersey facility. The Company believes that there will be a decrease in overhead as a result of the merger due to the consolidation of facilities and combination of management. Interest, dividend and other income increased by $61,034 for the nine months ended September 30, 2000 and by $60,800 for the quarter ended September 30, 2000. This increase was due to a higher average investment balance during 2000 as a result of the increase in cash from the sale of assets described above. On March 15, 1999, a complaint was filed in the Superior Court of the State of California for the County of Orange. The action was brought by Mr. David Day, an individual; David Day d/b/a Day Test & Measurements and Day Test & Measurements, as plaintiffs against Noise Com, Inc., a New Jersey corporation; Wireless Telecom Group, Inc., a New Jersey corporation; Telecom Analysis Systems, Inc., Bowthorpe PLC and Does 1 through 100, inclusive as defendants. The action set forth several causes of action, including breach of contract and fraud relating to an alleged failure of the defendants to pay full commissions allegedly owed to the plaintiff. On April 23, 1999, Wireless Telecom Group, Inc. d/b/a Noise Com commenced an arbitration proceeding against Day Test and Measurements ("Day Test"), a plaintiff in the aforementioned California action. In the arbitration, venued in New Jersey and brought under the rules of the American Arbitration Association, Noise Com alleged that Day Test, a former sales representative for Noise Com, failed to act with diligence and loyalty in performing its duties as Noise Com's agent. Also, the arbitration sought to resolve the dispute concerning the commissions allegedly due Day Test. On June 7, 2000, Wireless Telecom Group, Inc. d/b/a Noise Com settled both the California action and the New Jersey action. The terms of the settlement included, among other things, a payment from Noise Com to David Day of $1,250,000. The Company had previously accrued approximately $585,000 in connection with this matter and has recorded an additional cost of approximately $684,000 during the nine months ended September 30, 2000. Net income from continuing operations increased to $1,397,820, or $.07 per share, for the nine months ended September 30, 2000 as compared to $1,356,520, or $.07 per share for the nine months ended September 30, 1999. The Company realized net income from continuing 9 ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) operations for the quarter ended September 30, 2000 of $543,320 or $.03 per share as compared to $95,422 or $.00 per share for the three months ended September 30, 1999. The explanation of these changes can be derived from the analysis given above of operations for the three and nine month periods ending September 30, 2000 and 1999, respectively. LIQUIDITY AND CAPITAL RESOURCES: The Company's working capital has increased by $1,219,664 to $27,325,265 at September 30, 2000, from $26,105,601 at December 31, 1999. At September 30, 2000 the Company had a current ratio of 17.4 to 1, and a ratio of debt to net worth of less than .2 to 1. At December 31, 1999 the Company had a current ratio of 10.2 to 1, and a ratio of debt to net worth of .23 to 1. The Company used cash in operations of $508,426 for the nine month period ending September 30, 2000. This was primarily due to an increase in inventory of $1,353,668, an increase in accounts receivable of $1,093,588 and a decrease in accounts payable and accrued expenses of $901,431 offset by net income of $1,397,820 and a decrease in prepaid expenses of $1,211,640. The Company has historically been able to turn over its accounts receivable approximately every two months. This average collection period has been sufficient to provide the working capital and liquidity necessary to operate the Company. The Company continues to monitor production requirements and delivery times while maintaining manageable levels of goods on hand. Operating activities provided $2,805,256 in cash flow for the comparable nine month period in 1999. Cash provided by net income of $4,935,257, a reduction of accounts receivable of $1,243,636 a reduction in prepaid expenses of $1,059,350 and an increase in deferred taxes of $604,694 was offset by a gain in the sale of discontinued operations of $5,571,467. Net cash used in investing activities for the nine months ended September 30, 2000 was $798,827. The primary use of these funds was the purchase of a $500,000 investment in equity securities of an unrelated entity. For the nine months ended September 30, 1999, net cash provided by investing activities was $12,820,212. In 1999, the Company realized proceeds of $17,230,730 from the sale of its Wireless Test Equipment Business, partially offset by $2,500,000 for the purchase of the Noise Product Line from Telecom Analysis Systems, and $1,953,052 for expenses relating to the disposal of the Wireless Test Equipment Business. Net cash provided by financing activities for the nine month period ending September 30, 2000 was $150,994. The primary source of these funds was the proceeds from the exercise of stock options and warrants of $424,776. This was partially offset by the payment of long term debt of $215,932. Net cash used for financing activities in the same period of 1999 was $1,011,338. The primary use of these funds during this period was the reacquisition of the Company's shares of common stock in the open market. The Company believes that its financial resources from working capital provided by operations are adequate to meet current requirements. INFLATION AND SEASONALITY The Company does not anticipate that inflation will significantly impact its business nor does it believe that its business is seasonal. 10 PART II - OTHER INFORMATION Item 1. LEGAL PROCEEDINGS Not applicable. Item 2. CHANGES IN SECURITIES Not applicable. Item 3. DEFAULTS UPON SENIOR SECURITIES Not applicable. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not applicable. Item 5. OTHER INFORMATION Not applicable. Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: 11.1 Computation of per share earnings 27 Financial Data Schedule (b) Reports on Form 8-K: 1. Form 8-K, dated July 18, 2000, reporting on Items 2 and 7 relating to the Boonton Electronics Corp. acquisition. 2. Form 8-K, dated September 5, 2000, reporting on Item 5 relating to the Boonton Electronics Corp. acquisition. 11 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. WIRELESS TELECOM GROUP, INC. ____________________________ (Registrant) Date: November 13, 2000 /S/Edward Garcia ______________________________ Edward Garcia Chairman and Chief Executive Officer Date: November 13, 2000 /S/Demir Richard Eden ______________________________ Demir Richard Eden Acting Chief Financial Officer 12