UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended August 29, 1998 --------------- Commission file number 1-11479 ------- E-Z-EM, Inc. ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 11-1999504 ----------------------------- -------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 717 Main Street, Westbury, New York 11590 ---------------------------------------- ---------- (Address of principal executive offices) (Zip Code) (516) 333-8230 -------------------------------------------------- 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 ___ On October 9, 1998, there were 4,035,346 shares of the registrant's Class A Common Stock outstanding and 6,033,852 shares of the registrant's Class B Common Stock outstanding. Page 1 of 17 Exhibit Index on Page 16 E-Z-EM, Inc. and Subsidiaries INDEX ----- Part 1: Financial Information Page - ------- --------------------- ---- Item 1. Financial Statements Consolidated Balance Sheets - August 29, 1998 and May 30, 1998 3 - 4 Consolidated Statements of Earnings - thirteen weeks ended August 29, 1998 and August 30, 1997 5 Consolidated Statement of Stockholders' Equity - thirteen weeks ended August 29, 1998 6 Consolidated Statements of Cash Flows - thirteen weeks ended August 29, 1998 and August 30, 1997 7 - 8 Notes to Consolidated Financial Statements 9 - 11 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 12 - 15 Part II: Other Information - -------- ----------------- Item 6. Exhibits and Reports on Form 8-K 16 -2- E-Z-EM, Inc. and Subsidiaries CONSOLIDATED BALANCE SHEETS (in thousands) August 29, May 30, ASSETS 1998 1998 ------- --------- (unaudited) (audited) CURRENT ASSETS Cash and cash equivalents $ 6,096 $ 4,654 Debt and equity securities 3,525 3,475 Accounts receivable, principally trade, net 19,572 21,348 Inventories 26,246 26,764 Other current assets 2,684 2,499 ------- ------- Total current assets 58,123 58,740 INVESTMENT IN AFFILIATE 1,042 1,121 PROPERTY, PLANT AND EQUIPMENT - AT COST, less accumulated depreciation and amortization 21,371 21,917 COST IN EXCESS OF FAIR VALUE OF NET ASSETS ACQUIRED, less accumulated amortization 413 446 INTANGIBLE ASSETS, less accumulated amortization 2,489 2,546 DEBT AND EQUITY SECURITIES 1,601 2,057 OTHER ASSETS 4,132 3,879 ------- ------- $89,171 $90,706 ======= ======= The accompanying notes are an integral part of these financial statements. -3- E-Z-EM, Inc. and Subsidiaries CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) August 29, May 30, LIABILITIES AND STOCKHOLDERS' EQUITY 1998 1998 ------ ------ (unaudited) (audited) CURRENT LIABILITIES Notes payable $ 1,058 $ 3,041 Current maturities of long-term debt 271 287 Accounts payable 5,835 6,265 Accrued liabilities 6,824 6,958 Accrued income taxes 921 592 -------- -------- Total current liabilities 14,909 17,143 LONG-TERM DEBT, less current maturities 543 606 OTHER NONCURRENT LIABILITIES 1,767 1,734 COMMITMENTS AND CONTINGENCIES -------- -------- Total liabilities 17,219 19,483 -------- -------- STOCKHOLDERS' EQUITY Preferred stock, par value $.10 per share - authorized, 1,000,000 shares; issued, none - - Common stock Class A (voting), par value $.10 per share - authorized, 6,000,000 shares; issued and outstanding 4,035,346 shares at August 29, 1998 and May 30, 1998 403 403 Class B (nonvoting), par value $.10 per share - authorized, 10,000,000 shares; issued and outstanding 6,026,002 shares at August 29, 1998 and 5,999,073 shares at May 30, 1998 603 600 Additional paid-in capital 21,771 21,643 Retained earnings 50,560 49,090 Accumulated other comprehensive loss (1,385) (513) -------- -------- Total stockholders' equity 71,952 71,223 -------- -------- $ 89,171 $ 90,706 ======== ======== The accompanying notes are an integral part of these financial statements. -4- E-Z-EM, Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF EARNINGS (unaudited) (in thousands, except share and per share data) Thirteen weeks ended ----------------------------------- August 29, August 30, 1998 1997 ------------ ------------ Net sales $ 25,665 $ 25,713 Cost of goods sold 14,996 15,978 ------------ ------------ Gross profit 10,669 9,735 ------------ ------------ Operating expenses Selling and administrative 7,617 7,915 Research and development 1,002 1,509 ------------ ------------ Total operating expenses 8,619 9,424 ------------ ------------ Operating profit 2,050 311 Other income (expense) Interest income 119 151 Interest expense (62) (189) Equity in losses of affiliate (79) Other, net 37 (63) ------------ ------------ Earnings before income taxes 2,065 210 Income tax provision 595 82 ------------ ------------ NET EARNINGS $ 1,470 $ 128 ============ ============ Earnings per common share Basic $ .15 $ .01 ============ ============ Diluted $ .14 $ .01 ============ ============ Weighted average common shares Basic 10,044,112 9,926,028 ============ ============ Diluted 10,327,066 10,412,892 ============ ============ The accompanying notes are an integral part of these financial statements. -5- E-Z-EM, Inc. and Subsidiaries CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY Thirteen weeks ended August 29, 1998 (unaudited) (in thousands, except share data) Class A Class B Accumulated common stock common stock Additional other Compre- ---------------- ----------------- paid-in Retained comprehensive hensive Shares Amount Shares Amount capital earnings loss Total income ------ ------ ------ ------ ---------- -------- ------------- ----- ------ Balance at May 30, 1998 4,035,346 $403 5,999,073 $600 $21,643 $49,090 $(513) $71,223 Exercise of stock options 26,604 3 110 113 Income tax benefits on stock options exercised 15 15 Compensation related to stock option plans 1 1 Issuance of stock 325 2 2 Net earnings 1,470 1,470 $1,470 Unrealized holding loss on debt and equity securities (261) (261) (261) Foreign currency translation adjustments (611) (611) (611) --------- ---- --------- ---- ------- -------- -------- ------- ------ Comprehensive income $598 ====== Balance at August 29, 1998 4,035,346 $403 6,026,002 $603 $21,771 $50,560 $(1,385) $71,952 ========= ==== ========= ==== ======= ======== ======== ======= The accompanying notes are an integral part of this financial statement. -6- E-Z-EM, Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in thousands) Thirteen weeks ended ----------------------------- August 29, August 30, 1998 1997 ---------- --------- Cash flows from operating activities: Net earnings $ 1,470 $ 128 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities Depreciation and amortization 722 836 Provision for doubtful accounts 60 60 Equity in losses of affiliate 79 Deferred income tax provision 6 9 Other non-cash items 1 2 Changes in operating assets and liabilities Accounts receivable 1,716 (1,342) Inventories 518 174 Other current assets (185) 86 Other assets (90) (66) Accounts payable (430) (335) Accrued liabilities (134) 258 Accrued income taxes 323 84 Other noncurrent liabilities 38 (34) ------- ------- Net cash provided by (used in) operating activities 4,094 (140) ------- ------- Cash flows from investing activities: Additions to property, plant and equipment, net (116) (294) Investment in affiliate (537) Available-for-sale securities Purchases (70) (1,399) Proceeds from sale 20 1,270 ------- ------- Net cash used in investing activities (166) (960) ------- ------- Cash flows from financing activities: Repayments of debt (1,961) (334) Proceeds from issuance of debt 1,289 Proceeds from exercise of stock options, including related income tax benefits 128 6 Proceeds from issuance of stock in connection with the stock purchase plan 2 ------- ------- Net cash (used in) provided by financing activities (1,831) 961 ------- ------- -7- E-Z-EM, Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) (unaudited) (in thousands) Thirteen weeks ended ------------------------- August 29, August 30, 1998 1997 ---------- --------- Effect of exchange rate changes on cash and cash equivalents $ (655) $ (205) ------- ------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,442 (344) Cash and cash equivalents Beginning of period 4,654 4,484 ------- ------- End of period $ 6,096 $ 4,140 ======= ======= Supplemental disclosures of cash flow information: Cash paid during the period for: Interest $ 47 $ 186 ======= ======= Income taxes $ 304 $ 29 ======= ======= The accompanying notes are an integral part of these financial statements. -8- E-Z-EM, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS August 29, 1998 and August 30, 1997 (unaudited) NOTE A - CONSOLIDATED FINANCIAL STATEMENTS The consolidated balance sheet as of August 29, 1998, the consolidated statement of stockholders' equity for the period ended August 29, 1998, and the consolidated statements of earnings and cash flows for the periods ended August 29, 1998 and August 30, 1997, have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normally recurring adjustments) necessary to present fairly the financial position, changes in stockholders' equity, results of operations and cash flows at August 29, 1998 (and for all periods presented) have been made. Certain information and footnote disclosures, normally included in financial statements prepared in accordance with generally accepted accounting principles, have been condensed or omitted. It is suggested that these consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the fiscal 1998 Annual Report on Form 10-K filed by the Company on August 28, 1998. The results of operations for the periods ended August 29, 1998 and August 30, 1997 are not necessarily indicative of the operating results for the respective full years. The consolidated financial statements include the accounts of E-Z-EM, Inc. and all 100%-owned subsidiaries (the "Company"). All significant intercompany balances and transactions have been eliminated. The Company's approximate 23% interest in an affiliate is accounted for by the equity method. Pursuant to this method, such investment is recorded at cost and adjusted by the Company's share of undistributed earnings (or losses). NOTE B - INVENTORIES Inventories consist of the following: August 29, May 30, 1998 1998 ------- ------- (in thousands) Finished goods $13,056 $13,846 Work in process 1,303 1,474 Raw materials 11,887 11,444 ------- ------- $26,246 $26,764 ======= ======= NOTE C - EARNINGS PER COMMON SHARE In 1998, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per Share," which requires public companies to present basic earnings per share and, if applicable, diluted earnings per share. In accordance with SFAS No. 128, all comparative periods have been restated, if applicable. Basic earnings per share are based on the weighted average number of common shares outstanding without consideration of potential common stock. Diluted earnings per share are based on the -9- E-Z-EM, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) August 29, 1998 and August 30, 1997 (unaudited) NOTE C - EARNINGS PER COMMON SHARE (continued) weighted average number of common and potential common shares outstanding. The calculation takes into account the shares that may be issued upon exercise of stock options, reduced by the shares that may be repurchased with the funds received from the exercise, based on the average price during the period. The following table sets forth the reconciliation of the weighted average number of common shares: Thirteen weeks ended ---------------------------- August 29, August 30, 1998 1997 ---------- ---------- Basic 10,044,112 9,926,028 Effect of dilutive securities (stock options) 282,954 486,864 ---------- ---------- Diluted 10,327,066 10,412,892 ========== ========== NOTE D - COMMON STOCK Under the 1983 and 1984 Stock Option Plans, options for 15,000 shares were granted at $5.63 per share, options for 26,604 shares were exercised at $4.22 per share, options for 1,229 shares were forfeited at $5.39 per share, and no options expired during the thirteen weeks ended August 29, 1998. Under the 1997 AngioDynamics Stock Option Plan, options for .63 shares were forfeited at $40,000 per share, and no options were granted, exercised or expired during the thirteen weeks ended August 29, 1998. Under the Employee Stock Purchase Plan, 325 shares were purchased at $5.10 per share during the thirteen weeks ended August 29, 1998. NOTE E - COMPREHENSIVE INCOME During the first quarter of fiscal 1999, the Company adopted SFAS No. 130, "Reporting Comprehensive Income." SFAS No. 130 establishes new rules for the reporting and display of comprehensive income and its components; however, the adoption of SFAS No. 130 had no impact on the Company's net earnings or stockholders' equity. SFAS No. 130 requires unrealized holding gains or losses on debt and equity securities available for sale and cumulative translation adjustments, which prior to adoption were reported separately in stockholders' equity, to be included in accumulated other comprehensive income (loss). Prior year financial statements have been reclassified to conform to the requirements of SFAS No. 130. -10- E-Z-EM, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) August 29, 1998 and August 30, 1997 (unaudited) NOTE E - COMPREHENSIVE INCOME (continued) The components of comprehensive income, net of related tax, are as follows: Thirteen weeks ended -------------------------- August 29, August 30, 1998 1997 ---------- ---------- (in thousands) Net earnings $ 1,470 $ 128 Unrealized holding loss on debt and equity securities (261) (134) Foreign currency translation adjustments (611) (149) ------- ------- Comprehensive income (loss) $ 598 $ (155) ======= ======= The components of accumulated other comprehensive loss, net of related tax, are as follows: August 29, May 30, 1998 1998 ------- ------- (in thousands) Unrealized holding gain on debt and equity securities $ 1,083 $ 1,344 Cumulative translation adjustments (2,468) (1,857) ------- ------- Accumulated other comprehensive loss $(1,385) $ (513) ======= ======= NOTE F - NEW PRONOUNCEMENT NOT YET ADOPTED In June 1997, the Financial Accounting Standards Board issued SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information," which is effective the fourth quarter of the Company's current fiscal year. The statement redefines how operating segments are determined and requires disclosure of certain financial and descriptive information about a company's operating segments. The Company has not completed its evaluation of the effects that SFAS No. 131 will have on its financial reporting and disclosures. NOTE G - RECLASSIFICATIONS Certain reclassifications have been made to the prior period amounts to conform to the current period presentation. -11- E-Z-EM, Inc. and Subsidiaries MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Quarters ended August 29, 1998 and August 30, 1997 - -------------------------------------------------- The Company's quarters ended August 29, 1998 and August 30, 1997 both represent thirteen weeks. Results of Operations - --------------------- Segment Overview ---------------- The Company operates in two industry segments: Diagnostic products and AngioDynamics products. The Diagnostic products industry segment includes both contrast systems and non-contrast systems. The AngioDynamics products industry segment includes angiography, therapeutic and stent/angioplasty medical devices used in the interventional medical marketplace. Diagnostic AngioDynamics Eliminations Total ---------- ------------- ------------ ----- (in thousands) Quarter ended August 29, 1998 - ----------------------------- Unaffiliated customer sales $19,990 $ 5,675 - $25,665 Intersegment sales 11 142 ($153) - Gross profit (loss) 7,842 2,841 (14) 10,669 Operating profit (loss) 1,597 459 (6) 2,050 Quarter ended August 30, 1997 - ----------------------------- Unaffiliated customer sales $20,847 $ 4,866 - $25,713 Intersegment sales 55 145 ($200) - Gross profit 7,776 1,957 2 9,735 Operating profit (loss) 989 (680) 2 311 Diagnostic Products ------------------- Diagnostic segment operating results for the current quarter improved by $608,000 due primarily to reduced operating expenses. Despite a 4% decline in net sales, gross profit expressed as a percentage of net sales improved to 39% during the current quarter, versus 37% during the comparable quarter of the prior year. Sales price increases virtually offset the effect of increased discounts to group purchasing organizations. The improvement in gross profit, expressed as a percentage of net sales, can be attributed to reduced unabsorbed overhead costs. AngioDynamics Products ---------------------- AngioDynamics segment operating results for the current quarter improved by $1,139,000 due to increased sales, improved gross profit, and decreased operating expenses. Net sales increased 17%, or $809,000, due to the continued domestic market penetration of angiography products. International sales remained virtually flat. Gross profit expressed as a percentage of net sales improved to 49% during the current quarter versus 39% during the comparable quarter of the prior year due primarily to increased manufacturing efficiencies at the Queensbury facility, increased production throughput at both the Queensbury and Irish facilities, and the consolidation of operations, resulting from the closing of its Leocor facility in the third quarter of last fiscal year. Decreased operating expenses of $256,000 can be attributed to the closing of its -12- Leocor facility, coupled with reduced amortization expense, resulting from the impairment charge, of certain long-lived assets, recorded in the third quarter of last fiscal year. Consolidated Results of Operations ---------------------------------- For the quarter ended August 29, 1998, the Company reported net earnings of $1,470,000, or $.15 and $.14 per common share on a basic and diluted basis, respectively, as compared to net earnings of $128,000, or $.01 per common share on both a basic and diluted basis, for the comparable period of last year. Results for the current quarter were favorably affected by improved gross profit in the AngioDynamics segment and decreased operating expenses in both industry segments. The improved AngioDynamics gross profit is due primarily to increased manufacturing efficiencies at the Queensbury facility, increased production throughput at both the Queensbury and Irish facilities, and the consolidation of operations, resulting from the closing of its Leocor facility in the third quarter of last fiscal year. The decreased operating expenses can be attributed, in large part, to reduced research and development due to the completion of certain projects during last fiscal year. Net sales for the quarter ended August 29, 1998 decreased less than 1%, or $48,000, as compared to the quarter ended August 30, 1997. Decreased sales of contrast systems of $950,000 were virtually offset by increased sales of AngioDynamics products of $809,000 and non-contrast systems of $93,000. Price increases had little effect on net sales in the current quarter, although the Diagnostic segment continued to experience price pressures due to increased sales to group purchasing organizations. Net sales in international markets, including direct exports from the U.S., decreased 7%, or $649,000, in the current quarter versus the comparable period of last year due, in large part, to foreign currency exchange rate fluctuations which adversely affected the translation of Canadian and Japanese sales to U.S. dollars for financial reporting purposes. Gross profit expressed as a percentage of net sales increased to 42% during the current quarter versus 38% during the comparable quarter of the prior year due to increased gross profit in both industry segments. The improved AngioDynamics gross profit is due primarily to increased manufacturing efficiencies at the Queensbury facility, increased production throughput at both the Queensbury and Irish facilities, and the consolidation of operations, resulting from the closing of its Leocor facility in the third quarter of last fiscal year. The improved Diagnostic gross profit is due primarily to reduced unabsorbed overhead costs. Selling and administrative ("S&A") expenses were $7,617,000 during the quarter ended August 29, 1998 versus $7,915,000 during the quarter ended August 30, 1997. This decline of $298,000, or 4%, in the current quarter was principally due to decreased AngioDynamics S&A expenses of $178,000 and decreased Diagnostic S&A expenses of $120,000. Decreased AngioDynamics S&A expenses can be attributed to the consolidation of operations, resulting from the closing of its Leocor facility in the third quarter of last fiscal year, coupled with reduced amortization expense, resulting from the impairment charge, of certain long-lived assets, recorded in the third quarter of last fiscal year. Research and development ("R&D") expenditures decreased 34% in the current quarter to $1,002,000, or 4% of net sales, from $1,509,000, or 6% of net sales, in the comparable quarter of the prior year. This decline was due primarily to decreases in corporate projects of $228,000, expenses associated with product validations and clinical trials of $125,000, and AngioDynamics projects of $84,000. Of the R&D expenditures in the current quarter, approximately 43% relate to contrast systems, 33% to AngioDynamics projects, 4% to immunological projects, 7% to other projects and 13% to general regulatory costs. R&D expenditures are expected to continue at approximately current levels. -13- Other income, net of other expenses, totaled $15,000 of income in the current quarter versus $101,000 of expense in the comparable period of last year. This improvement was due primarily to decreased interest expense of $127,000, resulting from the repayment of AngioDynamics debt, and decreased foreign currency exchange losses of $95,000, partially offset by the recording of the Company's approximate 23% share in the losses of ITI Medical Technologies, Inc. of $79,000. For the quarter ended August 29, 1998, the Company's effective tax rate of 29% differed from the Federal statutory tax rate of 34% due primarily to the utilization of previously unrecorded tax credit carryforwards and earnings of the Puerto Rican subsidiary, which are subject to favorable U.S. tax treatment. The Company's effective tax rate of 39% during the quarter ended August 30, 1997 differed from the Federal statutory tax rate of 34% due primarily to non-deductible expenses and losses incurred in a foreign jurisdiction subject to lower tax rates, partially offset by earnings of the Company's Puerto Rican subsidiary, which are subject to favorable U.S. tax treatment, and tax-exempt interest income. Liquidity and Capital Resources - ------------------------------- During the quarter ended August 29, 1998, debt repayments were funded primarily by cash provided by operations. The Company's policy has been to fund capital requirements without incurring significant debt. At August 29, 1998, debt (notes payable, current maturities of long-term debt and long-term debt) was $1,872,000 as compared to $3,934,000 at May 30, 1998. The Company has available $8,629,000 under four bank lines of credit of which no amounts were outstanding at August 29, 1998. The Company's current policy is to issue stock dividends. During the third quarter of fiscal years 1996 and 1998 and the fourth quarter of fiscal year 1997, the Company issued 3% stock dividends. Presently, the Company is continuing to look for both new and complementary lines of business for expansion in order to ensure its continued growth. At August 29, 1998, approximately 62% of the Company's assets consist of inventories, accounts receivable, cash and cash equivalents, and debt and equity securities. The current ratio is 3.90 to 1, with net working capital of $43,214,000 at August 29, 1998, as compared to the current ratio of 3.43 to 1, with net working capital of $41,597,000 at May 30, 1998. The Company is evaluating the impact of the Year 2000 issue on its business and does not expect to incur significant costs associated with Year 2000 compliance or that Year 2000 issues will have a material impact on the Company's business, results of operations or financial condition. The Year 2000 issue is the result of computer programs being written using two digits rather than four to define the applicable year. The Company's domestic software systems and applications are currently Year 2000 compliant. The Company's international subsidiaries are currently working toward Year 2000 compliance. The Company has also initiated discussions with its significant suppliers and customers to ensure that they have appropriate plans to address Year 2000 issues that may affect the Company's operations. This Form 10-Q contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which are intended to be covered by the safe harbors created thereby. Investors are cautioned that all forward-looking statements involve risks and uncertainty, including without limitation, the ability of the Company to develop its products, as well as general market conditions, competition and pricing. Although the Company believes that the assumptions underlying the -14- forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore, there can be no assurance that the forward-looking statements included in this Form 10-Q will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved. -15- E-Z-EM, Inc. and Subsidiaries Part II: Other Information Item 6. Exhibits and Reports on Form 8-K -------------------------------- (a) Exhibits -------- No. Description Page --- ----------- ---- 27 Financial data schedule 17 (b) Reports on Form 8-K ------------------- No reports on Form 8-K were filed during the quarter ended August 29, 1998. 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. E-Z-EM, Inc. --------------------------------- (Registrant) Date October 12, 1998 /s/ Howard S. Stern ---------------- --------------------------------- Howard S. Stern, Chairman of the Board, President, Chief Executive Officer and Director Date October 12, 1998 /s/ Dennis J. Curtin ---------------- --------------------------------- Dennis J. Curtin, Vice President- Chief Financial Officer -16- This schedule contains summary financial information extracted from the Company's Form 10-Q for the quarter ended August 29, 1998 and is qualified in its entirety by reference to such financial statements. -----END