1
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FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED JUNE 30, 1998 OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-12317
NATIONAL-OILWELL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 76-0475815
- ----------------------------------- ----------------------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
5555 SAN FELIPE
HOUSTON, TEXAS
77056
--------------------------------------------------------
(Address of principal executive offices)
(713) 960-5100
--------------------------------------------------------
(Registrant's telephone number, including area code)
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 August 12, 1998, 52,996,785 common shares were outstanding, assuming the
exchange on a one-for-one basis of all Exchangeable Shares of Dreco Energy
Services Ltd. into shares of National-Oilwell, Inc. common stock.
2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
NATIONAL-OILWELL, INC.
CONSOLIDATED SHEETS
(IN THOUSANDS,EXCEPT SHARE DATA)
June 30, December 31,
1998 1997
------------ ------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 26,955 $ 19,824
Receivables, less allowance of $3,951 and $4,056 250,208 223,991
Inventories 275,387 203,520
Deferred income taxes 10,719 9,839
Prepaids and other current assets 10,012 6,424
------------ ------------
573,281 463,598
Property, plant and equipment, net 88,233 74,282
Deferred income taxes 5,362 4,919
Goodwill 139,290 24,233
Other assets 988 479
------------ ------------
$ 807,154 $ 567,511
============ ============
LIABILITIES AND OWNERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 1,334 $ 1,340
Accounts payable 156,065 134,955
Customer prepayments 56,822 37,688
Accrued compensation 9,240 12,957
Other accrued liabilities 34,393 24,521
------------ ------------
257,854 211,461
Long-term debt 214,002 61,565
Deferred income taxes 2,993 2,675
Other liabilities 12,180 14,122
------------ ------------
487,029 289,823
Commitments and contingencies
Stockholders' equity:
Common stock - par value $.01; 51,646,785 shares
and 51,655,782 shares issued and outstanding
at June 30, 1998 and December 31, 1997 517 517
Additional paid-in capital 209,060 207,954
Retained earnings 121,239 76,291
Accumulated other comprehensive income (10,691) (7,074)
------------ ------------
320,125 277,688
------------ ------------
$ 807,154 $ 567,511
============ ============
The accompanying notes are an integral part of these statements.
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NATIONAL-OILWELL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- ----------------------
1998 1997 1998 1997
--------- --------- --------- ---------
Revenues $ 294,843 $ 234,090 $ 596,695 $ 440,760
Cost of revenues 222,035 187,061 459,095 351,808
--------- --------- --------- ---------
Gross profit 72,808 47,029 137,600 88,952
Selling, general and administrative 32,928 29,087 62,421 54,314
--------- --------- --------- ---------
Operating income 39,880 17,942 75,179 34,638
Other income (expense):
Interest and financial costs (2,248) (1,583) (3,496) (3,035)
Interest income 278 288 499 826
Other 187 517 (539) (169)
--------- --------- --------- ---------
Income before income taxes 38,097 17,164 71,643 32,260
Provision for income taxes 14,286 6,099 26,695 11,496
--------- --------- --------- ---------
Net income $ 23,811 $ 11,065 $ 44,948 $ 20,764
========= ========= ========= =========
Net income per share:
Basic $ 0.46 $ 0.21 $ 0.86 $ 0.40
========= ========= ========= =========
Diluted $ 0.46 $ 0.21 $ 0.86 $ 0.40
========= ========= ========= =========
Weighted average shares outstanding:
Basic 51,963 51,223 51,973 50,830
========= ========= ========= =========
Diluted 52,292 52,202 52,275 51,882
========= ========= ========= =========
The accompanying notes are an integral part of these statements.
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NATIONAL-OILWELL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN THOUSANDS)
Six Months Ended June 30,
-------------------------
1998 1997
---------- -----------
Cash flow from operating activities:
Net income $ 44,948 $ 20,764
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
Depreciation and amortization 8,780 6,509
Provision for losses on receivables (379) 180
Provision for deferred income taxes (1,097) (1,007)
Gain on sale of assets (1,759) (1,469)
Foreign currency transaction loss (247) (6)
Changes in assets and liabilities, net of acquisitions:
Receivables (9,319) (19,219)
Inventories (42,434) (14,424)
Prepaid and other current assets (652) 3,452
Accounts payable 17,461 (6,858)
Other assets/liabilities, net 4,409 10,226
--------- ---------
Net cash provided (used) by operating activities 19,711 (1,852)
--------- ---------
Cash flow from investing activities:
Purchases of property, plant and equipment (9,368) (12,034)
Proceeds from sale of assets 3,747 1,783
Business acquired, net of cash (157,739) (19,000)
Cash received from business acquired 535 955
--------- ---------
Net cash used by investing activities (162,825) (28,296)
--------- ---------
Cash flow from financing activities:
Borrowings (payments) on line of credit 44,550 19,109
Net proceeds from issuance of long-term debt 148,937 10,127
Principal payments on long-term debt (40,855) (866)
Proceeds from issuance of common stock -- 37,240
Proceeds from stock options exercised 1,002 136
--------- ---------
Net cash provided by financing activities 153,634 65,746
--------- ---------
Effect of exchange rate (gain) on cash (3,389) (1,318)
--------- ---------
Increase in cash and equivalents 7,131 34,280
Cash and cash equivalents, beginning of period 19,824 13,611
--------- ---------
Cash and cash equivalents, end of period $ 26,955 $ 47,891
========= =========
Supplemental disclosures of cash flow information:
Cash payments during the
period for:
Interest $ 2,608 $ 1,253
Income taxes 26,679 5,429
The accompanying notes are an integral part of these statements.
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NATIONAL-OILWELL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
Effective September 25, 1997, National-Oilwell completed a combination
("Combination") with Dreco Energy Services Ltd. ("Dreco"). As a result of the
Combination, each Dreco Class "A" common share outstanding was converted into
.9159 of a Dreco Exchangeable Share ("Exchangeable Share") and, accordingly,
approximately 14.4 million Exchangeable Shares were issued. Each Exchangeable
Share is intended to have substantially identical economic and legal rights as,
and will ultimately be exchanged on a one-for-one basis for, a share of
National-Oilwell common stock.
The Combination was accounted for as a pooling-of-interests and the consolidated
financial statements of National-Oilwell and Dreco have been combined with all
prior periods restated to give effect to the Combination. Information concerning
common stock and per share data has been restated on an equivalent share basis
and assumes the exchange of all Exchangeable Shares.
National-Oilwell has a year end of December 31 and, prior to the Combination,
Dreco had a year end of August 31. The income statement reflects the combined
six months ended June 30, 1998 compared to the combination of the six months
ended June 30, 1997 for National-Oilwell and the six months ended May 31, 1997
for Dreco.
The financial statements included herein have been prepared by the Company,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission and in accordance with generally accepted accounting
principles. In the opinion of management, the information furnished reflects all
adjustments, all of which are of a normal, recurring nature, necessary for a
fair presentation of the results of the interim periods. It is recommended that
these statements be read in conjunction with the consolidated financial
statements and notes thereto included in the Company's annual report on Form
10-K for the year ended December 31, 1997. No significant accounting changes
have occurred during the six months ended June 30, 1998.
Certain prior-year amounts have been reclassified to conform to the current year
presentation.
2. INVENTORIES
Inventories consist of (in thousands):
June 30, December 31,
1998 1997
------------ ------------
Raw materials and supplies $ 21,932 $ 19,970
Work in process 55,324 34,849
Finished goods and purchased products 198,131 148,701
------------ ------------
Total $ 275,387 $ 203,520
============ ============
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3. ACQUISITION
On May 29, 1998, the Company acquired all of the capital stock of Phoenix Energy
Products Holdings, Inc. for approximately $115 million in a business combination
which was accounted for under the purchase method of accounting. Phoenix
manufactures and sells multiple product lines that are complementary to those of
the Company. The acquisition of the stock and the repayment of approximately $41
million in Phoenix debt was financed primarily through the issuance of $150
million in unsecured seven year senior notes which have a coupon interest rate
of 6.875% payable on January 1 and July 1.
Assuming the acquisition had occurred at the beginning of each period, pro forma
summary results of operations would have been as follows:
Six Months Ended
June 30,
---------------------------
1998 1997
------------ ------------
Revenues $ 630,154 $ 480,633
============ ============
Net income $ 44,191 $ 20,681
============ ============
Net income per share:
Basic $ 0.85 $ 0.41
============ ============
Diluted $ 0.85 $ 0.40
============ ============
The unaudited pro forma summary is not necessarily indicative of results of
operations that would have occurred had the purchase been made at the beginning
of the year or of future results of operations of the combined businesses.
4. SUBSEQUENT EVENT
On July 21, 1998, the Company purchased 100% of the capital stock of
Roberds-Johnson Industries, Inc., a manufacturer of a broad range of drilling
equipment, in exchange for 1.35 million shares of National-Oilwell common stock.
This transaction will be accounted for under the pooling of interests method of
accounting and will not have a material effect on the Company's historical
financial statements, and financial statements prior to July 1, 1998 will not be
restated.
5. RECENTLY ISSUED ACCOUNTING STANDARDS
As of January 1, 1998, the Company adopted Statement 130, Reporting
Comprehensive Income. Statement 130 establishes new rules for the reporting and
display of comprehensive income and its components. The adoption of this
Statement had no impact on the Company's net income or shareholders' equity.
Statement 130 requires unrealized gains or losses on the Company's
available-for-sale securities and foreign currency translation adjustments,
which prior to adoption were reported separately in stockholders' equity, to be
included in other comprehensive income. Prior year financial statements have
been reclassified to conform to the requirements of Statement 130. Total
comprehensive income amounted to $17,017 and $10,032 during the second quarter
of 1998 and 1997. For the first six months of 1998 and 1997, total comprehensive
income was $41,331 and $18,510, respectively.
In June 1998, the Financial Accounting Standards Board issued Statement No. 133,
Accounting for Derivative Instruments and Hedging Activities, which is required
to be adopted in years beginning after June 15, 1999. Because of the Company's
minimal use of derivatives, management does not anticipate that the adoption of
the new Statement will have a significant effect on earnings or the financial
position of the Company.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
INTRODUCTION
The Company is a worldwide leader in the design, manufacture and sale of
machinery and equipment and in the distribution of maintenance, repair and
operating ("MRO") products used in oil and gas drilling and production. The
Company's revenues are directly related to the level of worldwide oil and
gas drilling and production activities and the profitability and cash flow
of oil and gas companies and drilling contractors, which in turn are
affected by current and anticipated prices of oil and gas.
Effective September 25, 1997, National-Oilwell completed a combination
("Combination") with Dreco Energy Services Ltd. ("Dreco"). As a result of
the Combination, each Dreco Class "A" common share outstanding was
converted into .9159 of a Dreco Exchangeable Share ("Exchangeable Share")
and, accordingly, approximately 14.4 million Exchangeable Shares were
issued. Each Exchangeable Share is intended to have substantially identical
economic and legal rights as, and will ultimately be exchanged on a
one-for-one basis for, a share of National-Oilwell common stock.
Approximately 82% of the Exchangeable Shares have been exchanged for
National-Oilwell common stock as of June 30, 1998.
The Combination was accounted for as a pooling-of-interests and the
consolidated financial statements of National-Oilwell and Dreco have been
combined with all prior periods restated to give effect to the Combination.
Information concerning common stock and per share data has been restated on
an equivalent share basis and assumes the exchange of all Exchangeable
Shares.
On May 29, 1998, the Company acquired all of the capital stock of Phoenix
Energy Products Holdings, Inc. for approximately $115 million in a business
combination which was accounted for under the purchase method of
accounting. Phoenix manufactures and sells multiple product lines that are
complementary to those of the Company. The acquisition of the stock and the
repayment of approximately $41 million in Phoenix debt was financed
primarily through the issuance of $150 million in unsecured seven year
senior notes which have a coupon interest rate of 6.875% payable on January
1 and July 1.
On July 21, 1998, the Company purchased 100% of the common stock of
Roberds-Johnson Industries, Inc., a manufacturer of a broad range of
drilling equipment, in exchange for 1.35 million shares of National-Oilwell
common stock. This transaction will be accounted for under the pooling of
interests method of accounting and will not have a material effect on the
Company's historical financial statements, and financial statements prior
to July 1, 1998 will not be restated.
RESULTS OF OPERATIONS
Operating results by segment are as follows (in thousands):
Quarter Ended Six Months Ended
June 30, June 30,
---------------------- ----------------------
1998 1997 1998 1997
--------- --------- --------- ---------
Revenues
Products and Technology $ 160,130 $ 80,426 $ 308,164 $ 145,759
Downhole Products 17,713 14,809 35,523 30,519
Distribution Services 133,244 154,870 289,433 294,428
Eliminations (16,244) (16,015) (36,425) (29,946)
--------- --------- --------- ---------
Total $ 294,843 $ 234,090 $ 596,695 $ 440,760
========= ========= ========= =========
Operating Income
Products and Technology $ 32,305 $ 9,041 $ 57,433 $ 16,681
Downhole Products 5,520 4,567 11,783 10,705
Distribution Services 3,832 6,569 9,070 11,399
Corporate (1,777) (2,235) (3,107) (4,147)
--------- --------- --------- ---------
Total $ 39,880 $ 17,942 $ 75,179 $ 34,638
========= ========= ========= =========
6
8
Products and Technology
The Products and Technology segment designs and manufactures a large line of
proprietary products, including drawworks, mud pumps, power swivels, electrical
control systems and reciprocating pumps, as well as complete land drilling and
well servicing rigs and structural components such as masts, derricks and
substructures. A substantial installed base of these products results in a
recurring replacement parts and maintenance business. Sales of new capital
equipment can result in large fluctuations in volume between periods depending
on the size and timing of the shipment of orders. This segment also provides
drilling pump expendable products for maintenance of the Company's and other
manufacturers' equipment.
Revenues for the Products and Technology segment increased by $79.7 million in
the second quarter of 1998 as compared to the same quarter in 1997 due to
increased sales of major capital equipment. Sales of new mud pumps, SCR systems
and cranes were particularly strong. Operating income increased by $23.3 million
in the second quarter compared to the same quarter in 1997 due principally to
the increased sales volume. Operating income as a percentage of revenues
increased from 11% to 20%, primarily due to manufacturing and operating cost
efficiencies that result from higher volumes.
Products and Technology revenues increased $162.4 million in the first half of
1998 as compared to 1997 due primarily to the increased demand for new capital
equipment and the inclusion of approximately $17 million of revenues generated
by acquisitions. Operating income increased by $40.8 million in the first half
of 1998 compared to the same period of 1997, with approximately $4 million of
the increase attributable to the acquired businesses and the balance due to the
higher activity levels.
Backlog of the Products and Technology capital products was $260 million at June
30, 1998 compared to $271 million at December 31, 1997 and $141 million at June
30, 1997. Substantially all of the current backlog is expected to be shipped by
March 31, 1999.
Downhole Products
National-Oilwell designs and manufactures drilling motors and specialized
drilling tools for rent and sale. Rentals generally involve products that are
not economical for a customer to own or maintain because of the broad range of
equipment required for the diverse hole sizes and depths encountered in drilling
for oil and gas. Sales generally involve products that require infrequent
service, are disposable or are sold in countries where National-Oilwell does not
provide repair and maintenance services.
Downhole Products revenues increased by $2.9 million (20%) in the second quarter
of 1998 when compared to the same period in 1997, due to the inclusion of $1.3
million of revenues generated by acquisitions completed during the quarter and
the balance due to a general increase in activity levels. Operating income
increased $1.0 million in the second quarter of 1998 compared to the same
quarter in 1997. Acquisitions accounted for $0.4 million of the increase in
operating income with the remainder due to margin earned on the incremental
revenues.
Revenues during the first six months of 1998 increased $5.0 million (16%) over
the comparable 1997 period due to revenues from acquisitions of $1.3 million and
higher drilling accessories sales and tool sales/rentals. Operating income
increased $1.1 million during the first six months of 1998 compared to the same
period in 1997 with revenues from acquisitions accounting for approximately
one-third of the increase.
Distribution Services
Distribution Services revenues result primarily from the sale of MRO products
from the Company's network of distribution service centers and from the sale of
well casing and production tubing. These products are purchased from numerous
manufacturers and vendors, including the Company's Products and Technology
segment.
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9
Distribution Services revenues during the second quarter of 1998 fell
short of the comparable 1997 period by $21.6 million. This 14% decrease reflects
the reduced demand for tubular and MRO products precipitated by lower oil
prices. Operating income in the second quarter of 1998 was $2.7 million (42%)
below the second quarter of 1997. A $3.2 million reduction in margin due to the
decline in revenues was partially offset by $0.5 million in reduced operating
expenses.
Revenues for the Distribution Services segment fell $5.0 million in the first
half of 1998 when compared to the prior year, reflecting the significant
decrease in oil prices between the periods. Operating income was $2.3 million
lower in the first six months of 1998 when compared to 1997. A reduction in
margin of $1.5 million coupled with an increase in operating expenses of $0.8
million contributed to this shortfall in operating income.
Corporate
Corporate costs during the second quarter of 1998 and the first six months of
1998 were $0.5 million and $1.0 million lower than the prior year primarily due
to elimination of duplicate corporate costs that existed prior to the
Combination.
Interest Expense
Interest expense increased during the three months and six months ended June 30,
1998 due to the incurrence of debt to finance the Phoenix acquisition.
Additional increases will occur in the third quarter of 1998 due to the
inclusion of interest expense for three months rather than the one month of
June.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1998, the Company had working capital of $315 million, an increase
of $63 million from December 31, 1997. Acquisitions completed in the first half
of 1998 accounted for $40 million of this working capital increase.
Total capital expenditures were $9.4 million during the first six months of
1998. Enhancements to information and inventory control systems represent a
large portion of these capital expenditures. The Company believes it has
sufficient existing manufacturing capacity to meet currently anticipated demand
through 1998 for its products and services. Any significant increase in demand
for oilfield equipment products, to the extent qualified subcontracting and
outsourcing options are not available, could result in additional increases in
capital expenditures.
In June 1998, the Company sold $150 million in unsecured seven year senior notes
to raise cash for the purchase of Phoenix. The notes have a coupon interest rate
of 6.875% payable on January 1 and July 1.
The Company has a five-year unsecured $125 million revolving credit facility
(the "Credit Facility") of which $52 million is available at June 30, 1998 for
acquisitions and general corporate purposes. The Credit Facility provides for
interest at prime or LIBOR plus 0.625% (8.5% and 6.03% at June 30,1998), subject
to adjustment based on the Company's Capitalization Ratio, as defined. The
Credit Facility contains financial covenants and ratios regarding minimum
tangible net worth, maximum debt to capital and minimum interest coverage.
The Company believes that cash generated from operations and amounts available
under the Credit Facility will be sufficient to fund operations, working capital
needs, capital expenditure requirements and financing obligations. The Company
also believes any significant increase in capital expenditures caused by any
need to increase manufacturing capacity can be funded from operations or through
debt financing.
8
10
The Company intends to pursue acquisition candidates, but the timing, size or
success of any acquisition effort and the related potential capital commitments
cannot be predicted. The Company expects to fund future cash acquisitions
primarily with cash flow from operations and borrowings, including the
unborrowed portion of the Credit Facility or new debt issuances. There can be no
assurance that additional financing for acquisitions will be available at terms
acceptable to the Company.
YEAR 2000
National-Oilwell is conducting a comprehensive review of its computer systems
and other operational equipment to identify the systems that may be impacted by
the Year 2000 problem. The Year 2000 problem is a result of computer programs
being written using two digits (rather than four) to define the applicable year.
This could result in a systems failure or miscalculations causing disruptions of
operations, including, among other things, an inability to process transactions,
send invoices, or engage in similar normal business activities. This review
covers internal computer systems and process control systems, as well as
embedded systems in products delivered and purchased in the supply chain. In
addition, the Company has initiated formal communication with its significant
suppliers, customers and business partners to determine the extent to which the
Company is vulnerable to these third parties' failure to remedy their own Year
2000 issues. Third party vendors of hardware and packaged software have also
been contacted about their products' compliance status.
The Company currently estimates that it will incur costs of approximately
$500,000 to complete its assessment of the problem. The total cost of the Year
2000 readiness is dependent upon this assessment and has not yet been
determined. The Company anticipates having all critical systems Year 2000
compliant no later than September 30, 1999 and currently does not have a
contingency plan. Based on the Company's assessment of its computer systems and
other operational equipment to date, the Company believes that, with
modifications to existing software and converting to new software, the Year 2000
problem will not be material to the operations of the Company.
The costs of the project and the dates on which the Company believes it will
complete its Year 2000 project are based on management's best estimates. These
estimates were derived using numerous assumptions of future events, including
continued availability of resources, third party modification plans, and other
factors. However, there can be no assurance that these estimates will be
achieved and actual results could differ materially from those anticipated.
Specific factors that might cause such material differences include, but are not
limited to, the availability and cost of personnel, the ability to identify and
correct all Year 2000 impacted areas, and other similar uncertainties.
FORWARD-LOOKING STATEMENTS
This document, other than historical financial information, contains
forward-looking statements that involve risks and uncertainties. Such statements
relate to the Company's sales of capital equipment, backlog, capacity, liquidity
and capital resources, plans for acquisitions and any related financings and the
impact of Year 2000. Readers are referred to documents filed by the Company with
the Securities and Exchange Commission which identify significant risk factors
which could cause actual results to differ from those contained in the
forward-looking statements, including "Risk Factors" at Item 1 of the Annual
Report on Form 10-K. Given these uncertainties, current or prospective investors
are cautioned not to place undue reliance on any such forward-looking
statements. The Company disclaims any obligation or intent to update any such
factors or forward-looking statements to reflect future events or developments.
9
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PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The annual meeting of stockholders was held on May 13, 1998. Stockholders
elected three directors nominated by the board of directors for terms expiring
in 2001 by the following votes: Howard I. Bull - 42,863,427 votes for and
348,791 votes withheld, James C. Comis III - 42,863,671 votes for and 348,547
votes withheld and Frederick W. Pheasey - 42,863,671 votes for and 348,547 votes
withheld. There were no nominees to office other than the directors elected.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27.1 Financial Data Schedule
(b) Reports on Form 8-K
The Company filed a report on Form 8-K on June 17, 1998 regarding the
acquisition of Phoenix Energy Products Holdings, Inc. Financial statements
and pro forma financial information were not included in the filing but
are expected to be filed on Form 8-K/A by August 17, 1998.
SIGNATURE
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.
Date: August 13, 1998 /s/ Steven W. Krablin
------------------------- -------------------------------------------
Steven W. Krablin
Principal Financial and Accounting Officer
and Duly Authorized Signatory
10
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INDEX TO EXHIBITS
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------- ----------- ------------
27.1 Financial Data Schedule
5
1,000
6-MOS
DEC-31-1998
JAN-01-1998
JUN-30-1998
26,955
0
254,159
3,951
275,387
573,281
137,740
49,507
807,154
257,854
214,002
0
0
517
319,608
807,154
596,695
596,695
459,095
459,095
0
(379)
3,496
71,643
26,695
44,948
0
0
0
44,948
0.86
0.86
