-----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, WmND4+h2Q+PzLstpEqB/1Ycsdco6IuD9r7Ks1mjNhqxLMXaJlvCmfPNzVh/GZkRg 1QxIsybEdk94PEmUNIKw4A== 0000898430-97-004966.txt : 19971120 0000898430-97-004966.hdr.sgml : 19971120 ACCESSION NUMBER: 0000898430-97-004966 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971119 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUNBASE ASIA INC CENTRAL INDEX KEY: 0000095626 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 941612110 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-03132 FILM NUMBER: 97724460 BUSINESS ADDRESS: STREET 1: 19 F FIRST PACIFIC BANK CENTERE STREET 2: 51-57 GLOUCESTER ROAD CITY: WANCHAI HONG KONG STATE: K3 ZIP: 93303 BUSINESS PHONE: 0118522865 MAIL ADDRESS: STREET 1: P O BOX 2600 CITY: BAKERSFIELD STATE: CA ZIP: 93303 FORMER COMPANY: FORMER CONFORMED NAME: PAN AMERICAN INDUSTRIES INC DATE OF NAME CHANGE: 19941216 FORMER COMPANY: FORMER CONFORMED NAME: PAN AMERICAN ENERGY CORPORATION DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: SUPREME OIL & GAS CORP DATE OF NAME CHANGE: 19901029 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT of 1934 For the quarterly period ended September 30, 1997. [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from to ----------------- ------------------------ Commission File No. 0-3132 SUNBASE ASIA, INC. (Exact name of Registrant as specified in its charter) Nevada 94-1612110 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 19/F, First Pacific Bank Centre 51-57 Gloucester Road Wanchai, Hong Kong (Address of principal executive offices) Registrant's telephone number, including area code: (852) 2865-1511 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 --- --- As of September 30, 1997, the Company had 12,700,141 shares of common stock issued and outstanding. 1 SUNBASE ASIA , INC. AND SUBSIDIARIES ------------------------------------ INDEX
PAGE ---- PART I: FINANCIAL INFORMATION Item 1 -- Financial statements Consolidated Condensed Balance Sheets (unaudited) - December 31, 1996 and September 30, 1997 3-4 Consolidated Condensed Statements of Income (unaudited) - Three months and nine months ended September 30, 1996 and 1997 5 Consolidated Condensed Statements of Cash Flows (unaudited) - Nine months ended September 30, 1996 and 1997 6 Notes to Consolidated Condensed Financial Statements (unaudited) - Three months and nine months ended September 30, 1996 and 1997 7-11 Item 2 -- Management's Discussion and Analysis of Financial Condition and Results of Operations 12-19 PART II: OTHER INFORMATION Item 6 -- Exhibits and Reports on Form 8-K 20 SIGNATURES 21 EXHIBIT 11 Computation of Earnings Per Common Share 22-23
2 PART I. FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS -------------------- SUNBASE ASIA, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED) AS OF DECEMBER 31, 1996 AND SEPTEMBER 30, 1997 (Amounts in thousands, except number of shares and per share data)
12/31/96 9/30/97 ---------------- ---------------- Notes RMB US$ RMB US$ ----- ----- --- --- --- ASSETS Current assets Cash and bank balances 87,428 10,546 50,266 6,064 Accounts receivable, net 313,791 37,852 377,861 45,580 Notes receivable 15,212 1,835 6,465 780 Inventories, net 4 476,409 57,468 489,241 59,016 Other receivables 70,075 8,453 97,187 11,723 Receivable from disposal of an investment 13,419 1,618 - - Due from related companies 205,275 24,762 405,287 48,889 --------- -------- ---------- ------- Total current assets 1,181,609 142,534 1,426,307 172,052 Fixed assets 656,071 79,140 637,600 76,912 Deferred asset 22,204 2,678 15,395 1,857 Long term investments 1,012 122 1,012 122 Goodwill 11,587 1,398 10,954 1,321 --------- ---------- --------- ------- Total assets 1,872,483 225,872 2,091,268 252,264 ========= ========== ========= ======= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Short term bank loans 358,847 43,286 382,646 46,158 Long term bank loans, current portion 98,641 11,899 106,171 12,807 Accounts payable 151,971 18,332 125,318 15,117 Notes payable 2,800 338 10,800 1,303 Accrued liabilities and other payables 55,544 6,700 92,117 11,112 Short term obligations under capital leases 18,788 2,266 20,015 2,414 Short term portion of secured promissory note 5 12,450 1,502 12,435 1,500 Income tax payable 38,368 4,628 64,064 7,728 Taxes other than income 25,225 3,043 75,610 9,121 Due to related companies 14,357 1,732 34,398 4,149 --------- ---------- --------- ------- Total current liabilities 776,991 93,726 923,574 111,409 Long term bank loans 35,000 4,222 23,000 2,774 Long term obligations under capital leases 88,924 10,726 73,756 8,897 Long term portion of secured promissory note 5 12,450 1,502 12,435 1,500 Convertible debentures 6 95,450 11,514 95,335 11,500 Minority interests 420,484 50,722 475,212 57,324 --------- -------- ---------- ------- 1,429,299 172,412 1,603,312 193,404
Continued/... The accompanying notes form an integral part of these consolidated condensed financial statements. 3 SUNBASE ASIA, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS AS OF DECEMBER 31, 1996 AND SEPTEMBER 30, 1997 (UNAUDITED) (CONTINUED) (Amounts in thousands, except number of shares and per share data)
12/31/96 9/30/97 ------------------ ------------------- RMB US$ RMB US$ --------- ------- ---------- ------- Shareholders' equity: Common Stock, par value US$ 0.001 each, 50,000,000 shares authorized; 12,700,141 shares issued, and fully paid up 107 13 107 13 Preferred Stock, par value US$ 0.001 each, 25,000,000 shares authorized; Convertible Preferred Stock - Series A; 36 shares issued and outstanding 44,533 5,372 44,533 5,372 Convertible Preferred Stock - Series B; 6,800 shares issued and outstanding 28,288 3,412 28,288 3,412 Contributed surplus 188,019 22,680 188,019 22,680 Reserves 27,866 3,361 27,866 3,361 Retained earnings 154,371 18,622 199,143 24,022 --------- ------- ---------- ------- Total shareholders' equity 443,184 53,460 487,956 58,860 --------- ------- ---------- ------- Total liabilities and shareholders' equity 1,872,483 225,872 2,091,268 252,264 ========= ======= ========== =======
The accompanying notes form an integral part of these consolidated condensed financial statements. 4 SUNBASE ASIA, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED) FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1997 (Amounts in thousands, except number of shares and per share data)
Nine Months Ended September 30, Three Months Ended September 30, --------------------------------------- -------------------------------------- 1996 1997 1997 1996 1997 1997 Notes RMB RMB US $RMB RMB US$ ------ ---- ---- ---- ---- --- ---- Net sales to - Third parties 588,084 427,571 51,577 152,011 158,047 19,065 - Related parties 136,876 219,095 26,429 107,260 2,776 335 ---------- ---------- ---------- ----------- ---------- ---------- 724,960 646,666 78,006 259,271 160,823 19,400 Cost of sales ( 444,750) ( 394,097) ( 47,539) ( 158,833) ( 98,272) ( 11,854) ---------- ---------- ---------- ----------- ---------- ---------- Gross profit 280,210 252,569 30,467 100,438 62,551 7,546 Selling, general and administrative expenses - Third parties ( 58,397) ( 49,614) ( 5,985) ( 18,109) ( 14,332) ( 1,729) - Related parties ( 33,334) ( 33,693) ( 4,064) ( 11,263) ( 8,747) ( 1,055) ---------- ---------- ---------- ----------- ---------- ---------- ( 91,731) ( 83,307) ( 10,049) ( 29,372) ( 23,079) ( 2,784) Interest expense, net - Third parties ( 38,474) ( 43,431) ( 5,239) ( 13,192) ( 11,726) ( 1,415) - Related parties ( 7,573) ( 6,446) ( 778) ( 2,434) ( 2,051) ( 248) ---------- ---------- ---------- ----------- ---------- ---------- ( 46,047) ( 49,877) ( 6,017) ( 15,626) ( 13,777) ( 1,663) ---------- ---------- ---------- ----------- ---------- ---------- Income before income taxes 142,432 119,385 14,401 55,440 25,695 3,099 Provision for income taxes: - Current ( 23,590) ( 19,885) ( 2,399) ( 9,170) ( 4,162) ( 502) ---------- ---------- ---------- ----------- ---------- ---------- Income before minority interests 118,842 99,500 12,002 46,270 21,533 2,597 Minority interests ( 64,926) ( 54,728) ( 6,601) ( 25,236) ( 11,457) ( 1,381) ---------- ---------- ---------- ----------- ---------- ---------- Net income 53,916 44,772 5,401 21,034 10,076 1,216 ========== ========== ========== =========== ========== ========== Earnings per common share 2 - Primary 3.26 2.64 0.32 1.23 0.59 0.07 ========== ========== ========== =========== ========== ========== - Fully Diluted 3.25 2.77 0.33 1.22 0.67 0.08 ========== ========== ========== =========== ========== ========== Number of shares outstanding 2 - Primary 16,561,644 16,980,141 16,980,141 17,107,412 16,980,141 16,980,141 ========== ========== ========== =========== ========== ========== - Fully Diluted 16,963,420 19,280,141 19,280,141 18,199,593 19,280,141 19,280,141 ========== ========== ========== =========== ========== ==========
The accompanying notes form an integral part of these consolidated condensed financial statements. 5 SUNBASE ASIA, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1997 (Amounts in thousands)
Nine Months Ended September 30, ------------------------------------ 1996 1997 1997 RMB RMB US$ ---- ---- ---- Cash flows from operating activities: Net income 53,916 44,772 5,401 Adjustments to reconcile income to net cash used in operating activities: Minority interests 64,926 54,728 6,601 Depreciation 47,232 53,170 6,414 Loss on disposal of fixed assets ( 1,111) 582 70 Amortization of goodwill 352 633 76 Exchange difference on secured promissory note and convertible debentures - ( 145) ( 17) Amortization of present value discount on deferred asset - ( 587) ( 71) Amortization of deferred debenture issue expense - 1,021 123 Others 2,145 - - Changes in operating assets and liabilities- (Increase) decrease in assets: Accounts receivable ( 243,397) ( 64,070) ( 7,729) Notes receivable 9,748 8,747 1,055 Inventories 73,636 ( 12,832) ( 1,548) Prepaid VAT 40,429 - - Other receivables ( 10,167) ( 27,112) ( 3,270) Receivable from disposal of an investment - 13,419 1,619 Due from related companies 10,829 (200,012) (24,127) Increase (decrease) in liabilities: Accounts payable 30,199 ( 26,653) ( 3,215) Notes payable 6,228 8,000 965 Accrued liabilities and other payables ( 20,098) 36,573 4,412 Income tax payable 29,064 25,696 3,100 Taxes other than income 28,664 56,760 6,847 Due to related companies ( 109,646) 6,100 736 Due to shareholders ( 16,646) - - -------- -------- ------- Net cash used in operating activities ( 3,697) ( 21,210) ( 2,558) -------- -------- ------- Cash flows from investing activities: Disposal of long term investments 426 - - Proceeds from disposal of fixed assets 1,798 (134) ( 16) Additions to fixed assets ( 66,319) ( 35,147) ( 4,240) -------- -------- ------- Net cash used in investing activities ( 64,095) ( 35,281) ( 4,256) -------- -------- ------- Cash flows from financing activities: Net increase in bank loans 60,758 19,329 2,332 Repayment of other loans ( 33,810) - - Repayment of secured promissory note 5 ( 16,700) - Proceeds from issuance of convertible debentures 6 95,450 - Proceeds from sale of common stock, net of costs 7 35,399 - -------- ------- - Net cash provided by financing activities 141,097 19,329 2,332 -------- -------- ------- Net increase (decrease) in cash and cash equivalents 73,305 ( 37,162) ( 4,482) Cash and cash equivalents, at beginning of period 30,944 87,428 10,546 -------- -------- ------- Cash and cash equivalents, at end of period 104,249 50,266 6,064 ======== ======== ======= Non-cash transaction: Financing of lease arrangements 12,815 6,446 777 ======== ======== =======
The accompanying notes form an integral part of these consolidated condensed financial statements. 6 SUNBASE ASIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED) FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1997 (Amounts in thousands, except number of shares and per share data) 1. GENERAL Sunbase Asia, Inc., a Nevada Corporation ("the Company"), is engaged in the design, manufacture and distribution of a broad range of bearing products in the People's Republic of China ("PRC") and certain western countries, including the United States. The Company acquired 100% of the issued share capital of China Bearing Holdings Limited (China Bearing) on December 2, 1994 pursuant to a Share Exchange Agreement with Asean Capital Limited in exchange for 10,261,000 shares of common stock. The transaction has been treated as a recapitalization of China Bearing with China Bearing as the acquirer (reverse acquisition). The historical financial statements prior to December 2, 1994 are those of China Bearing. The Company owns, through various subsidiaries and joint venture interests, a 51.4% indirect ownership in Harbin Bearing Company Limited ("Harbin Bearing"), a joint stock limited company organized under the law of the PRC. Harbin Bearing is located in Harbin, the PRC, and has been in business since 1950. Harbin Bearing manufactures a wide variety of bearings in the PRC for use in commercial, industrial and aerospace applications and which are sold primarily in the PRC and certain western countries, including the United States. On January 16, 1996 (effective December 29, 1995), the Company acquired Smith Acquisition Company, Inc. dba Southwest Products Company (Southwest Products), a bearing manufacturing company located in Los Angeles County, California, that has been in business since 1945. Southwest Products manufactures precision spherical bearings that are sold primarily to the aerospace and commercial aviation industries. Its major customers are located in the United States. 2. BASIS OF PRESENTATION The accompanying consolidated condensed financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America. All material intercompany accounts and transactions were eliminated on consolidation. The accompanying consolidated condensed financial statements are unaudited but, in the opinion of the management of the Company, contain all adjustments, necessary to present fairly the financial position at September 30, 1997, the results of operations for the three months and nine months ended September 30, 1996 and 1997, and the changes in cash flows for the nine months ended September 30, 1996 and 1997. These adjustments are of a normal recurring nature. 7 SUNBASE ASIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED) FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1997 (Amounts in thousands, except number of shares and per share data) 2. BASIS OF PRESENTATION (continued) The consolidated balance sheet as of December 31, 1996, is derived from the Company's audited financial statements. Certain information and footnote disclosures normally included in financial statements that have been prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, although management of the Company believes that the disclosures contained in these financial statements are adequate to make the information presented therein not misleading. For further information, refer to the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1996 as filed with the Securities and Exchange Commission. For the three months and nine months ended September 30, 1996 and 1997, primary earnings per common share have been calculated using the weighted average number of shares of common stock and common stock equivalents outstanding during the respective periods. Common stock equivalents consist of convertible preferred stock and outstanding stock options. The computation of fully diluted earnings per share, where appropriate, assumes the full conversion of the Convertible Debentures and the elimination of the related after tax interest expense effective August 23, 1996. The results of operations for the three months and nine months ended September 30, 1997 are not necessarily indicative of the results of operations to be expected for the full fiscal year ending December 31, 1997. 3. FOREIGN CURRENCY TRANSLATION AND EXCHANGE In preparing the consolidated financial statements, the financial statements of the Company are measured using Renminbi ("RMB") as the functional currency. All foreign currency transactions are translated into RMB using the applicable floating rates of exchange quoted by the People's Bank of China prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies have been translated into RMB using the unified exchange rate prevailing at the balance sheet dates. The resulting exchange gains or losses have been credited or charged to the statements of income for the periods in which they occur. The Company's share capital is denominated in United States dollars (US$) and the reporting currency is the RMB. For financial reporting purposes, the US$ share capital amounts have been translated into RMB at the applicable rates prevailing on the transaction dates. For financial reporting purposes, translation of amounts from RMB into US$ for the convenience of the reader has been made at the exchange rate quoted by the People's Bank of China on September 30, 1997 of US$ 1.00 = RMB 8.29. No representation is made that the RMB amounts could have been, or could be, converted into US$ at the rate on September 30, 1997 or at any other certain rate on September 30, 1997. 8 SUNBASE ASIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED) FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1997 (Amounts in thousands, except number of shares and per share data) 4. INVENTORIES Inventories consist of the following at December 31, 1996 and September 30, 1997:
December 31, 1996 September 30, 1997 ----------------- ------------------- RMB US$ RMB US$ --- --- --- --- Raw materials 102,856 12,407 95,508 11,521 Work-in-progress 121,847 14,698 126,291 15,234 Finished goods 257,121 31,016 273,810 33,029 ------- -------- ------- ------ 481,824 58,121 495,609 59,784 Less: Allowance for obsolescence (5,415) (653) (6,368) (768) ------- -------- ------- ------ Inventories, net 476,409 57,468 489,241 59,016 ======= ======== ======= ======
5. SECURED PROMISSORY NOTE A promissory note for US$ 5,012 (RMB 41,600) (the "Note") was issued to Asean Capital Limited ("Asean") in connection with the Share Exchange Agreement and is secured by a continuing security interest in all of the Company's title and interest in the outstanding capital stock of its wholly- owned subsidiary China Bearing. The Note is denominated in and is repayable in full in United States dollars, and bears interest at 8% per annum. In connection with the issuance of convertible debentures described at Note 6, Asean has undertaken that for so long as any of the debentures are outstanding, no amounts are to be repaid on the Note unless there is sufficient working capital and the repayment is made in three annual installments with an effective date of August 1, 1996. The first installment was made on September 10, 1996. 9 SUNBASE ASIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED) FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1997 (Amounts in thousands, except number of shares and per share data) 6. CONVERTIBLE DEBENTURES Pursuant to a Subscription Agreement dated August 2, 1996, (the "Subscription Agreement"), among China Bearing, Asean Capital Limited, China International Bearing Holdings Limited, the Company and Southwest Products (collectively, the "Sunbase Group"); Glory Mansion Limited, Wardley China Investment Trust, MC Private Equity Partners Asia Limited and Chine Investissement 2000 (collectively the "Investors"), on August 23, 1996, China Bearing issued an aggregate of US$ 11,500,000 principal amount of Convertible Debentures (the "Convertible Debentures") to the Investors. Unless the Convertible Debentures have been converted, the Convertible Debentures are due and payable in August, 1999 (the "Maturity Date"). The Convertible Debentures bear interest at the rate of the higher of (i) 5% per annum (net of withholding tax, if applicable) and (ii) such percentage of the dividend yield calculated by reference to dividing the annual dividend declared per share of Common Stock of the Company by the Conversion Price (as hereinafter defined). Interest is payable quarterly. The Investors have the right to convert at any time, in whole or in part the principal amount of the Convertible Debentures into shares of the Common Stock of the Company. The Conversion Price (the "Conversion Price") is initially $5.00 per share, subject to adjustment for (a) change in par value of the Common Stock, (b) issuance of shares by way of capitalization of profits or reserves, (c) capital distributions, (d) rights offering at a price which is less than the lower of the then market price or Conversion Price, (e) issuance of derivative securities where the total consideration per share initially received is less than the lower of the then market price or Conversion Price, (f) issuance of shares at a price per share which is less than the lower of the then market price or the Conversion Price, and (g) if the cumulative audited earnings per common share for any two consecutive fiscal years commencing with the fiscal year ending December 31, 1996 and ending with the fiscal year ending December 31, 1998 are less than the specified projection of cumulative earnings per common share for such periods. The Convertible Debentures are required to be redeemed on the Maturity Date at its principal amount outstanding together with any accrued but unpaid interest together with an amount that would enable the Investors to yield an aggregate internal rate of return of 12% per annum on the cost of their investment. In addition, if any of the events of default specified in the Convertible Debentures occur, the Convertible Debenture are automatically due and payable at the principal amount outstanding together with accrued interest and an amount that would enable the Investors to yield an aggregate internal rate of return on their investment of 19.75% per annum. Events of default include the delisting of the shares from NASDAQ or its suspension thereof; default in performance after failure to cure after notice; failure to pay principal or interest; failure to pay indebtedness for borrowed money; bankruptcy, insolvency or unsatisfied judgment; failure to achieve earning per common share of at least $.55 for fiscal years commencing January 1, 1996; and accounts receivable reaching a certain level in relationship to net sales. 10 SUNBASE ASIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED) FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1997 (Amounts in thousands, except number of shares and per share data) 6. CONVERTIBLE DEBENTURES (continued) As a result of the foregoing, although the Convertible Debentures bear interest at the rate of 5% per annum, interest is accrued at the rate of 12% per annum. The obligations of China Bearing under the Convertible Debentures are guaranteed by the other members of the Sunbase Group. 7. SALE OF COMMON STOCK On June 10, 1996, the Company sold 1,000,000 shares of common stock (the "Private Placement Shares") at US$5.00 per share, which generated net proceeds of US$ 4,347 (RMB 36,077). Such shares to the extent held by non- affiliates of the Company may be sold pursuant to Rule 144 under the Securities Act of 1933. 11 ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS ----------------------------------------------------------------------- OF OPERATIONS - ------------- OVERVIEW The Company owns, through various subsidiaries and joint venture interests, a 51.4% indirect ownership in Harbin Bearing. Harbin Bearing manufactures a wide variety of bearings in the PRC for use in commercial, industrial and aerospace applications that are sold primarily in the PRC and certain western countries, including the United States. On January 16, 1996 (effective December 29, 1995), the Company acquired Southwest Products, which manufactures precision spherical bearings that are sold primarily to the aerospace and commercial aviation industries. The acquisition of Southwest Products has been accounted for under the purchase method of accounting. The results of Southwest Products have been consolidated into the Company's consolidated results of operations commencing January 1, 1996. Unless specifically stated, all amounts are in thousands (RMB '000). RESULTS OF OPERATION THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1997: The following table sets forth certain unaudited operating data (in RMB and as a percentage of the Company's sales) for the three months ended September 30, 1996 and 1997.
Three Months Ended September 30, --------------------------------------------- 1996 1997 ------- ----------- RMB % RMB % ----------- ------- ----------- ------- Sales 259,271 100.0 160,823 100.0 Cost of sales (158,833) (61.3) (98,272) (61.1) -------- ----- -------- ----- Gross profit 100,438 38.7 62,551 38.9 Selling expenses (7,692) (3.0) (4,619) (2.9) General and administrative expenses (21,680) (8.4) (18,460) (11.5) Interest expenses (15,626) (6.0) (13,777) (8.6) -------- ----- -------- ----- Income before income taxes 55,440 21.3 25,695 15.9 Provision for income taxes (9,170) (3.5) (4,162) (2.6) -------- ----- -------- ----- Income before minority interests 46,270 17.8 21,533 13.3 Minority interests (25,236) (9.7) (11,457) (7.1) -------- ----- -------- ----- Net income 21,034 8.1 10,076 6.2 ======== ===== ======== =====
12 Sales ----- Sales for the three months ended September 30, 1997 decreased by RMB 98,448 or 38% to RMB 160,823, as compared to RMB 259,271 for the three months ended September 30, 1996. The decrease in sales was a result of the Company's efforts to adjust to tightened credit conditions in the PRC. The Company has responded to such conditions by enhancing its credit review procedures and limiting sales to customers where collectability was uncertain. During the period presented, there were no material price increases from the prior three month period. Sales for Harbin Bearing for the three months ended September 30, 1997 decreased by RMB 101,075 or 40.5% to RMB 148,709 as compared to RMB 249,784 for the three months ended September 30, 1996. However, this decrease was partially offset by an increase in sales for Southwest Products by RMB 2,627 or 27.7% to RMB 12,114 for the three months ended September 30, 1997 as compared to RMB 9,487 for the three months ended September 30, 1996. Cost of Sales/Gross Profit -------------------------- Cost of sales for the three months ended September 30, 1997 decreased 38.1% to RMB 98,272 as compared to RMB 158,833 for the three months ended September 30, 1996. The cost of sales for Harbin Bearing for the three months ended September 30, 1997 and 1996 was calculated using the gross profit method by reference to average annual gross profit ratios. The cost of sales for Southwest Products for the three months ended September 30, 1997 and 1996 was calculated on an actual cost basis. Gross profit decreased by RMB 37,887 or 37.7% for the three months ended September 30, 1997 as compared to the three months ended September 30, 1996. The decrease in gross profit was attributable to the decrease in sales. However, gross profit as a percentage of sales increased slightly to 38.9% in 1997 from 38.7% in 1996 due to different product mix from small and medium sized bearings to higher margin medium and large sized bearings. Selling Expenses ---------------- Selling expenses for the three months ended September 30, 1997 decreased by RMB 3,073 or 40% to RMB 4,619 as compared to RMB 7,692 for the three months ended September 30, 1996. The decrease in selling expenses was due to the decrease in sales. 13 General and Administrative Expenses ----------------------------------- General and Administrative Expenses for the three months ended September 30, 1997 decreased by RMB 3,220 or 14.8% to RMB 18,460 as compared to RMB 21,680 for the three months ended September 30, 1996. General and administrative expenses as a percentage of sales increased to 11.5% in 1997 from 8.4% in 1996 primarily due to the decline in sales. Significant factors affecting the change in general and administrative expenses between the three months ended September 30, 1997 and three months ended September 30, 1996 were as follows: a. An aggregate cash discount of RMB 479 which was granted during the three months ended September 30, 1996 as an incentive to customers for early settlement of debt in order to accelerate cash collections. No such cash discount was granted during the three months ended September 30, 1997. b. A decrease in operating expenses of RMB 2,770 during the three months ended September 30, 1997 as compared to the three months ended September 30, 1996 as a result of cost controls implemented in order to achieve the operational efficiency. Interest Expense ---------------- Interest Expense for the three months ended September 30, 1997 decreased by RMB 1,849 or 11.8% to RMB 13,777 as compared to RMB 15,626 for the three months ended September 30, 1996. The decrease in interest expense was primarily attributable to a decrease in the interest rate on new short term bank loans effective on August 23, 1996. The average annual interest rate was 12.55% in 1996 compared to 11.09% in 1997. However, this decrease was partially offset by an increase in interest from the convertible debentures. Net Income ---------- As a result of the aforementioned factors, net income decreased by RMB 10,958 or 52% to RMB 10,076 for the three months ended September 30, 1997 as compared to RMB 21,034 for the three months ended September 30, 1996. 14 NINE MONTHS ENDED JUNE 30, 1996 AND 1997: The following table sets forth certain unaudited operating data (in RMB and as a percentage of the Company's sales) for the nine months ended September 30, 1996 and 1997.
Nine Months Ended September 31, --------------------------------------------- 1996 1997 RMB % RMB % ---------- ------- ---------- ------- Sales 724,960 100.0 646,666 100.0 Cost of sales (444,750) (61.3) (394,097) (60.9) -------- ----- -------- ----- Gross profit 280,210 38.7 252,569 39.1 Selling expenses (20,064) (2.8) (16,565) ( 2.6) General and administrative expenses (71,667) (9.9) (66,742) (10.3) Interest expenses (46,047) (6.4) (49,877) ( 7.7) -------- ----- -------- ----- Income before income taxes 142,432 19.6 119,385 18.5 Provision for income taxes (23,590) (3.2) (19,885) ( 3.1) -------- ----- -------- ----- Income before minority interests 118,842 16.4 99,500 15.4 Minority interests (64,926) (9.0) (54,728) (8.5) -------- ----- -------- ----- Net income 53,916 7.4 44,772 6.9 ======== ===== ======== =====
Sales ----- Sales for the nine months ended September 30, 1997 decreased by RMB 78,294 or 10.8% to RMB 646,666 as compared to RMB 724,960 for the nine months ended September 30, 1996. The decrease in sales was a result of the Company's efforts to adjust to tightened credit conditions in the PRC. The Company has responded to such conditions by enhancing its credit review procedures and limiting sales to customers where collectability was uncertain. During the period presented, there were no material price increases from the prior nine month period. Sales for Harbin Bearing for the nine months ended September 30, 1997 decreased by RMB 86,270 or 12.3% to RMB 613,130 as compared to RMB 699,400 for the nine months ended September 30, 1996. However, this decrease was partially offset by an increase in sales for Southwest Products by RMB 7,976 or 31.2% to RMB 33,536 for the nine months ended September 30, 1997 as compared to RMB 25,560 for the nine months ended September 30, 1996. Cost of Sales/Gross Profit -------------------------- Cost of sales for the nine months ended September 30, 1997 decreased to RMB 394,097 as compared to RMB 444,750 for the nine months ended September 30, 1996. The cost of sales for Harbin Bearing for the nine months ended September 30, 1997 and 1996 was calculated using the gross profit method by reference to average annual gross profit ratios. The cost of sales for Southwest Products for the nine months ended September 30, 1997 and 1996 was calculated on an actual cost basis. 15 Gross profit decreased by RMB 27,641 or 10% for the nine months ended September 30, 1997 as compared to the nine months ended September 30, 1996. The decrease in gross profit was attributable to the decrease in sales. However, gross profit as a percentage of sales increased slightly to 39.1% in 1997 from 38.7% in 1996 due to different product mix from small and medium sized bearings to higher margin medium and large sized bearings. Selling Expenses ---------------- Selling expenses for the nine months ended September 30, 1997 decreased by RMB 3,499 or 17.4% to RMB 16,565 as compared to RMB 20,064 for the nine months ended September 30, 1996. The decrease in selling expenses was due to the decrease in sales. Selling expenses as a percentage of sales decreased from 2.8% in 1996 to 2.6% in 1997. General and Administrative Expenses ----------------------------------- General and Administrative Expenses for the nine months ended September 30, 1997 decreased by RMB 4,925 or 6.9% to RMB 66,742 as compared to RMB 71,667 for the nine months ended September 30, 1996. General and administrative expenses as a percentage of sales increased to 10.3% in 1997 from 9.9% in 1996. The decrease was primarily due to: a. An aggregate cash discount of RMB 6,986 which was granted during the nine months ended September 30, 1996 as an incentive to customers for early settlement of debts in order to accelerate cash collections. No such cash discount was granted during the nine months ended September 30, 1997. b. A decrease in compensation expense in 1997 of RMB 448 related to the voluntary early retirement program at Harbin Bearing. The above decrease was then offset by the following increases: a. There was a loss on disposal of fixed assets of RMB 582 during the nine months ended September 30, 1997 while there was a gain on disposal of fixed assets of RMB 1,111 during the nine months ended September 30, 1996. b. An increase in property tax of RMB 1,062 in the nine months ended September 30, 1997 as a result of an increase in fixed assets. No such tax was paid during the nine months ended September 30, 1996. 16 Interest Expense ---------------- Interest Expense for the nine months ended September 30, 1997 increased by RMB 3,830 or 8.3% to RMB 49,877 as compared to RMB 46,047 for the nine months ended September 30, 1996. The increase in interest expense was primarily attributable to the increase of RMB 7,360 of Convertible Debenture interest calculated at the rate of 12% per annum and was offset by a decrease in the interest rate on new short term bank loan effective on August 23, 1996. The average annual interest rate was 12.55% in 1996 compared to 11.09% in 1997. However, this decrease was partially offset by an increase in interest from the convertible debentures. Net Income ---------- As a result of the aforementioned factors, net income decreased by RMB 9,144 or 17% to RMB 44,772 for the nine months ended September 30, 1997 as compared to RMB 53,916 for the nine months ended September 30, 1996. LIQUIDITY AND CAPITAL RESOURCES OPERATING ACTIVITIES For the nine months ended September 30, 1997, the Company's operations utilized cash resources of RMB 21,210 as compared to RMB 3,697 utilized for the nine months ended September 30, 1996. The Company's net working capital increased by RMB 98,115 at September 30, 1997 to RMB 502,733 as compared to RMB 404,618 at December 31, 1996, and the Company's current ratio at September 30, 1997 was 1.54:1 as compared to 1.52:1 at December 31, 1996 and 1.66:1 at September 30, 1996. Accounts receivable increased by RMB 64,070 or 20% to RMB 377,861 at September 30, 1997, as compared to RMB 313,791 at December 31, 1996. Due from related companies increased by RMB 200,012 during the nine months ended September 30, 1997. Both increases are mainly a result of credit terms granted on sales made in the period. The aggregate of accounts receivable and due from related parties increased RMB 264,082 or 50.9% during the nine months ended September 30, 1997. INVESTING ACTIVITIES Capital expenditures for the nine months ended September 30, 1997 of RMB 35,147 consisted of costs relating to the construction of new plant and buildings, and the renovation of existing facilities and equipment, and were financed by internally generated funds, as well as short-term and long-term bank loans. There are no other material capital expenditures expected in the near future. There is also no dividend restriction on any bank loans. During the nine months ended September 30, 1997, payment of RMB 13,419 was received on the receivable from disposal of investment, which was recorded as other income in the quarter ended December 31, 1996. FINANCING ACTIVITIES The Company has historically relied on both long and short term bank loans from Chinese banks to 17 support its operations and capital requirements. Short term loans have terms ranging from three months to six months, are utilized to finance both operating and capital requirements, and are renewed on a revolving basis. Long term bank loans are utilized to fund capital expansion projects. During the nine months ended September 30, 1997, the net increase in bank loans (after deducting repayments) was RMB 19,329, which was utilized to fund the capital expenditures. The Company believes that it will be able to continue to maintain and expand its bank borrowings under existing terms and conditions. Southwest Products has relied upon a revolving accounts receivable line of credit to supplement its capital requirements. The Company believes that Southwest Products will be able to continue to maintain and expand its bank borrowings under existing terms and conditions. Pursuant to a Subscription Agreement dated August 2, 1996, (the "Subscription Agreement"), among China Bearing, Asean Capital Limited, China International Bearing Holdings Limited, the Company and Southwest Products (collectively, the "Sunbase Group"); Glory Mansion Limited, Wardley China Investment Trust, MC Private Equity Partners Asia Limited and Chine Investissement 2000 (collectively the "Investors"), on August 23, 1996, China Bearing issued an aggregate of US$ 11,500,000 principal amount of Convertible Debentures (the "Convertible Debentures") to the Investors. Unless the Convertible Debentures have been converted, the Convertible Debentures are due and payable in August, 1999 (the "Maturity Date"). The Convertible Debentures bear interest at the rate of the higher of (i) 5% per annum (net of withholding tax, if applicable) and (ii) such percentage of the dividend yield calculated by reference to dividing the annual dividend declared per share of Common Stock of the Company by the Conversion Price (as hereinafter defined). Interest is payable quarterly. The Investors have the right to convert at any time the whole or any part of the principal amount of the Convertible Debentures into shares of the Common Stock of the Company. The Conversion Price (the "Conversion Price") is initially $5.00 per share, subject to adjustment for (a) change in par value of the Common Stock, (b) issuance of shares by way of capitalization of profits or reserves, (c) capital distributions, (d) rights offering at a price which is less than the lower of the then market price or Conversion Price, (e) issuance of derivative securities where the total consideration per share initially received is less than the lower of the then market price or Conversion Price, (f) issuance of shares at a price per share which is less than the lower of the then market price or the Conversion Price, and (g) if the cumulative audited earnings per common share for any two consecutive fiscal years commencing with the fiscal year ending December 31, 1996 and ending with the fiscal year ending December 31, 1998 are less than the specified projection of cumulative earnings per common share for such period. The Convertible Debentures are required to be redeemed on the Maturity Date at its principal amount outstanding together with any accrued but unpaid interest together with an amount that would enable the Investors to yield an aggregate internal rate of return of 12% per annum on the cost of their investment. In addition, if any of the events of default specified in the Convertible Debentures occurs, the Convertible Debenture are automatically due and payable at the principal amount outstanding together with accrued interest and an amount that would enable the Investors to yield an aggregate internal rate of return on their investment of 19.75% per annum. Events of default include the delisting of the shares from NASDAQ or its suspension thereof; default in performance after failure to cure after notice; failure to pay principal or interest; failure to pay indebtedness for borrowed money; bankruptcy, insolvency or unsatisfied judgments; failure to achieve earning per common share of at least $.55 for fiscal years commencing January 1, 1996; and accounts receivable reaching a certain level in relationship to net sales. As a result of the foregoing, although the Convertible Debentures bear interest at the rate of 5% per annum, interest is accrued at the rate of 12% per annum. 18 The obligations of China Bearing under the Convertible Debentures are guaranteed by the other members of the Sunbase Group. A promissory note for US$ 5,012 (RMB 41,600) (the "Note") was issued to Asean Capital Limited ("Asean") in connection with the Share Exchange Agreement and is secured by a continuing security interest in all of the Company's title and interest in the outstanding capital stock of its wholly-owned subsidiary China Bearing. The Note is denominated in and is repayable in full in United States dollars, and bears interest at 8% per annum. In connection with the issuance of convertible debentures described at Note 6, Asean has undertaken that for so long as any of the debentures are outstanding, no amounts are to be repaid on the Note unless there is sufficient working capital and the repayment is made by three annual installments with effect from August 1, 1996. The first installment was made on September 10, 1996. The Company anticipates that its cash flows from operations, combined with cash and cash equivalents, bank lines of credit and other external sources of debt and equity financing, and the proceeds from the June 1996 sale of the 1,000,000 shares of common stock and the August 1996 issuance of the Convertible Debentures, are adequate to finance the Company's current operating and debt service requirements. INFLATION AND CURRENCY MATTERS In recent years, the Chinese economy has experienced periods of rapid economic growth as well as high rates of inflation, which in turn has resulted in the periodic adoption by the Chinese government of various corrective measures designed to regulate growth and contain inflation. During the nine months ended September 30, 1997, the general inflation rate in the PRC was under control and was below 10% on an average basis. Since 1993, the Chinese government has implemented and maintained an economic program designed to control inflation, which has resulted in the tightening of working capital available to Chinese business enterprises. The success of the Company depends in substantial part on the continued growth and development of the Chinese economy. The Company continually monitors the effects of inflation. The Company is generally able to raise its prices to shift a portion of the inflated costs to the customers. However, the Company must also take into account market conditions and competition and may not, in all circumstances, be able to raise prices to offset increased costs to the Company. The price of bearing steel, the major raw material used by the Company, remained fairly stable during 1996 and 1997. The major impact of inflation was on labor cost due to increases in employees wages. However, the Company has generally managed to offset the effects of inflation through improved operational efficiency. Foreign operations are subject to certain risks inherent in conducting business abroad, including price and currency exchange controls, and fluctuations in the relative value of currencies. Changes in the relative value of currencies occur periodically and may, in certain instances, materially affect the Company's results of operations. The Company conducts most of its business in the PRC and, accordingly, the sale of its products is settled primarily in RMB. As a result, devaluation of the RMB against the US$, could have a material adverse effect upon the results of operations and financial position of the Company. Although prior to 1994 the RMB experienced significant devaluation against the US$, the RMB has remained fairly stable from 1994 to present. The unified exchange rate was US$ 1.00 to RMB 8.65 at December 31, 1993, RMB 8.45 at December 31, 1994, RMB 8.32 at December 31, 1995, RMB 8.3 at December 31, 1996 and RMB 8.29 at September 30, 1997. 19 The Company is not able to predict whether or not the recent devaluation of a number of Asian currencies will result in a devaluation of the RMB. To date, the PRC government has indicated that it does not intend to devalue the RMB against the dollar. 20 PART II. OTHER INFORMATION Item 1 Legal Proceedings The lawsuit between the Company's subsidiary, Southwest Products, and an employee was settled during the three months ended September 30, 1997. Item 2 Changes in Securities None Item 3 Defaults upon Senior Securities None 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: 11 Computation of Earnings per common share 27 Financial Data Schedule (b) Reports on Form 8-K: Three months ended September 30, 1997: None 21 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. Sunbase Asia, Inc. ------------------ (Registrant) Date: November 19, 1997 By: /s/ William McKay ---------------------------------------- William McKay Chief Executive Officer and President (Duly Authorized Officer) Date: November 19, 1997 By: /s/ (Roger) Li Yuen Fai ---------------------------------------- (Roger) Li Yuen Fai Vice President and Chief Financial Officer (Principal Financial Officer) 22 EX-11 2 COMPUTATION OF EARNINGS EXHIBIT 11 ---------- SUNBASE ASIA, INC. AND SUBSIDIARIES COMPUTATION OF EARNINGS PER COMMON SHARE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1997 (Amounts in thousands, except number of shares and per share data)
Nine Months Ended September 30, Three Months Ended September 30, ------------------------------- -------------------------------- 1996 1997 1997 1996 1997 1997 RMB RMB US$ RMB US$ RMB ---------- ---------- ---------- ---------- ---------- ------ PRIMARY Net income, as reported 53,916 44,772 5,401 21,034 10,076 1,216 ========== ========== ========== =========== ========== ========== Weighted average number of shares of common stock outstanding: Share of common stock outstanding on January 1 11,700,063 12,700,109 12,700,109 11,700,063 12,700,109 12,700,109 Share issued as a result of rounding from reverse stock split 46 32 32 46 32 32 1,000,000 shares of common stock issued on June 10, 1996 410,256 - - 1,000,000 - - ---------- ---------- ---------- ----------- ---------- ---------- Weighted average number of shares of common stock outstanding 12,110,365 12,700,141 12,700,141 12,700,109 12,700,141 12,700,141 Shares of common stock issuable assuming conversion of the Convertible Preferred Stock - Series A 3,600,000 3,600,000 3,600,000 3,600,000 3,600,000 3,600,000 - Series B 680,000 680,000 680,000 680,000 680,000 680,000 Shares of common stock issuable assuming exercise of stock options, reduced by the number of shares which could have been purchased with the proceeds from exercise of such stock options 171,279 - - 127,303 - - ---------- ---------- ---------- ----------- ---------- ---------- Total weighted average number of shares of common stock and common stock equivalents outstanding 16,561,644 16,980,141 16,980,141 17,107,412 16,980,141 16,980,141 ========== ========== ========== =========== ========== ========== Earnings per common share - Primary 3.26 2.64 0.32 1.23 0.59 0.07 ========== ========== ========== =========== ========== ==========
SUNBASE ASIA, INC. AND SUBSIDIARIES COMPUTATION OF EARNINGS PER COMMON SHARE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1997 (Amounts in thousands, except number of shares and per share data)
Nine Months Ended September 30, Three Months Ended September 30, ------------------------------- -------------------------------- 1996 1997 1997 1996 1997 1997 RMB RMB US$ RMB US$ RMB ---- ---- ---- ---- ---- ---- FULLY DILUTED Net income, as reported 53,916 44,772 5,401 21,034 10,076 1,216 Add after tax interest expense applicable to Convertible Debenture 1,224 8,584 1,035 1,224 2,860 345 ------- ------- ------- ------- ------- ------- Net income, as adjusted 55,140 53,356 6,436 22,258 12,936 1,561 ======= ======= ======= ======= ======= ======= Weighted average number of shares of common stock outstanding: Share of common stock outstanding on January 1 11,700,063 12,700,109 12,700,109 11,700,063 12,700,109 12,700,109 Share issued as a result of rounding from reverse stock split 46 32 32 46 32 32 1,000,000 shares of common stock issued on June 10, 1996 410,256 - - 1,000,000 - - ---------- ---------- ---------- ---------- ---------- ---------- Weighted average number of shares of common stock outstanding 12,110,365 12,700,141 12,700,141 12,700,109 12,700,141 12,700,141 Shares of common stock issuable assuming conversion of the Convertible Preferred Stock - Series A 3,600,000 3,600,000 3,600,000 3,600,000 3,600,000 3,600,000 - Series B 680,000 680,000 680,000 680,000 680,000 680,000 Shares of common stock issuable assuming conversion of the Convertible Debentures on August 23, 1996 328,571 2,300,000 2,300,000 975,000 2,300,000 2,300,000 Shares of common stock issuable assuming exercise of stock options, reduced by the number of shares which could have been purchased with the proceeds from exercise of such stock options 244,484 - - 244,484 - - ---------- ---------- ---------- ---------- ---------- ---------- Total weighted average number of shares of common stock and common stock equivalents outstanding 16,963,420 19,280,141 19,280,141 18,199,593 19,280,141 19,280,141 ========== ========== ========== ========== ========== ========== Earnings per common share - Fully Diluted 3.25 2.77 0.33 1.22 0.67 0.08 ========== ========== ========== ========== ========== ==========
EX-27 3 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS CONTAINED IN THE COMPANY'S QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS DEC-31-1997 JAN-01-1997 SEP-30-1997 6,064 0 106,972 0 59,016 172,052 76,912 0 252,264 111,409 0 0 8,784 13 50,063 252,264 78,006 78,006 47,539 47,539 0 0 6,017 14,401 2,399 5,401 0 0 0 5,401 0.32 0.33
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