Server: Netscape-Commerce/1.1 Date: Wednesday, 17-Dec-97 23:01:15 GMT Last-modified: Friday, 21-Nov-97 14:59:42 GMT Content-length: 42127 Content-type: text/html
.Standex International Corporation
1997 Annual Report
Essential Products for your World
Standex is a global, multi-industry company that manufactures and markets products through 24 business units and 83 facilities in 14 countries. Our strategy is to invest in businesses that generate solid revenues and earnings streams, and then to reinvest for long-term growth while providing attractive current returns to our shareholders.
We operate in three broad business segments. Our Food Service and Consumer businesses are well positioned to capitalize on trends that reflect new ways of living, working, and shopping. Our Industrial businesses typically serve niche OEM markets, so many of our products and services are invisible to consumers and end-users. Yet we typically add functionality, competitive advantage and market appeal that are critical to the quality and value of the finished product.
Standex International. What we do is essential but most of the time, you wont even notice that were there.
Financial Highlights
Year Ended June 30 |
1997 | 1996 | 1995 | 1994 | 1993 |
OPERATIONS: |
|||||
Net Sales |
$564,623,458 | $562,678,620 | $569,292,824 | $529399,483 | $506,312,331 |
Net Income* |
26,918,588 | 30,713,794 | 34,976,9441 | 27,147,163 | 24,011,998 |
Return on Sales* |
4.8% | 5.5% | 6.1% | 5.1% | 4.7% |
Return on Equity* |
19.1% | 22.8% | 26.4% | 22.8% | 19.8% |
Depreciation |
12,777,339 | 12,497,148 | 12,355,863 | 12,477,651 | 12,869,607 |
Interest Expense |
8,497,425 | 9,047,701 | 8,367,075 | 5,937,960 | 5,597,049 |
PER SHARE DATA |
|||||
Net Sales |
$41.85 |
$40.40 |
$39.15 |
$34.62 |
$30.92 |
Earnings* |
2.00 |
2.21 |
2.41 |
1.78 |
1.47 |
Book Value |
10.75 |
10.01 |
9.45 |
8.16 |
7.99 |
Dividends |
.75 |
.71 |
.63 |
.52 |
.43 |
Average Shares Outstanding |
13,490,810 |
13,927,223 |
14,540,476 |
15,293,351 |
16,375,964 |
* Fiscal 1995 amounts exclude a non-recurring
net after tax gain from the disposition of businesses and product
lines of $3,343,000 or $.23 per share.
To Our Shareholders
OPERATING RESULTS
Fiscal 1997 proved to be a disappointing year. Sales were basically flat at $564,623,000 while net earnings decreased to $26,919,000 resulting in earnings of $2.00 per share. Sluggish European operations, difficulties at one of our food service facilities, and slowness in assimilating some recent acquisitions were the major contributory factors. Return on sales of 4.8% and return on equity of 19.1% were down due to the conditions outlined above, but still at respectable levels. The Corporations balance sheet continues to be in excellent shape, with the debt-to-capital ratio at 44.8% and the current ratio at a strong 3.0 to 1. The year ended with an improved performance in the fourth quarter (53¢ versus 49¢ earned in fiscal 1996) and we are optimistic as the new fiscal year begins.
SHAREHOLDER VALUE
The dividend was increased to a new annual rate of 76¢ per share. A total of $10,002,000 was paid to shareholders in fiscal 1997. Standex has now paid uninterrupted quarterly dividends for 33 years and the dividend has been increased 33 times over that same period. The Corporation bought back 513,251 shares over the past twelve months and has, since the inception of the buyout program, acquired 18,481,814 shares for $254,735,197. The average price paid per share is $13.78.
NEW FOCUS
The annual report to shareholders has been changed to reflect the major new focus for our Corporation. The reporting groups have changed to more clearly define the markets we wish to serve and our management teams are being realigned to provide a more concentrated thrust in attaining the goals established for these new groupings. A new corporate tag line (Essential Products For Your World) has been adopted which truly describes the products produced by Standex. The new groupings provide a platform and a direction for our continued growth in the years ahead.
Coinciding with our new focus, we acquired the Vidalia Onion Store and the Salsa Express Co., to expand our Standex mail order product offerings. We also acquired the Apostles Publishing Company and the Fellowship Bookstores chain to further expand on our commitment to religious publishing and retailing. A purchase and sale agreement has also been signed to acquire the ACME Manufacturing Company which is a $60 million sales organization manufacturing air distribution products similar to our Standex Air Distribution Products division. The closing is expected in the first quarter of fiscal year 1998.
IN SUMMARY
Backlogs are up, we have resolved most of the problems outlined above and hopefully our European operations will see some improvement. We are continuing to refine our focus and look for growth opportunities in our various markets, while maintaining the principle of strength through diversity. With the help of a skilled and dedicated workforce, we expect to show favorable year to year comparisons in the coming year.
![]() |
(Right) Mr. Thomas L. King, Chairman of the Board and (Left) Mr. Edward J. Trainor, President/CEO |
FOOD SERVICE
As Americans and Europeans change the way they work, they're also changing the way they live Ð and eat. Dual-earner families mean more income but less time to prepare meals. As a result, convenience and time-saving have become critical factors in determining where consumers purchase food, what they eat, and when and where meals are eaten.
[Featured in the photo are barbecue ovens/rotisseries and display merchandisers manufactured by BKI and Barbecue King, UK.]
Standex is benefiting significantly from the trend
toward home meal replacement. Instead of shopping for
individual ingredients at the supermarket after work,
consumers are often purchasing complete, prepared meals
at supermarkets, or ordering full, ready-to-eat
meals-to-go from restaurants. [USECO's Cook/Chill System used in institutions with large food service requirements, such as schools, hospitals and prisons. Pictured right] |
![]() |
Through BKI in the United States and Barbecue King in the United Kingdom, we help retailers fulfill these new consumer expectations. Our commercial food preparation equipment Ð including commercial ovens/rotisseries, pressure fryers, low-temp cook and hold units Ð and display merchandisers are installed in thousands of supermarkets, fast food outlets, delicatessens and convenience stores. This increasingly global business is experiencing substantial growth in Europe, and we are entering some of the world's most dynamic emerging markets through distribution networks in the Far East and South America. In the U.S., sales are strengthening due to more frequent renovations by food service outlets. These make-overs are now planned every three to five years; not long ago, restaurants typically renovated on a seven- to ten-year cycle.
[Federal Industries' new modern display case. Pictured above]
Innovation has long been a hallmark of Standex
companies. BKI is finding new ways to meet customer needs
with innovations like the industry's rotisserie -combi
ovens utilizing both conventional heat and steam to cook
a wide variety of foods. These highly competitive units
not only save space in our customer's facilities, but
they reduce capital costs as well. BKI was recently voted
Manufacturer of the Year by its peers on the Electric
Food Service Council -- recognition of the quality,
aesthetics and technology of BKI's innovative equipment. [Master-Bilt's refrigerated walk-in food storage and presentation units are widely used in mini-marts and convenience stores. Pictured right] |
![]() |
Two other Standex companies are leaders in food storage and display: Federal Industries, which manufactures both refrigerated and non-refrigerated display cases for the bakery industry; and Master-Bilt, which manufactures refrigerated cabinets, cases, display units, and a wide range of modular structures utilizing refrigeration technology in various applications for convenience stores and supermarkets.
Master-Bilt was one of the first companies to recognize that precise temperature control is critical to healthful refrigeration. Today, the company is a leader in designing equipment that maximizes food safety with greater control over temperature fluctuations in all types of storage conditions.
![]() |
![]() [Procon Pumps are used in the carbonation process for soft drink dispensing machines. Pictured above and left] |
Standex also serves the institutional food service market through USECO, which has just introduced a sophisticated food handling and re-thermalization system for hospitals, correctional facilities, and other institutions where food is prepared in advance of need and properly stored at one location and served at another location at preset temperatures. USECO is the first U.S. manufacturer to employ convection reheating technology, which uses circulating air to preserve food flavors and texture, as well as standard conduction techniques, which simply heat the plate.
INDUSTRIAL
The companies of the Standex Industrial segment provide products and services that most people take for granted. Yet the things we make and do add tangible value and functionality in a host of settings. We help start millions of street lights each day, launch communications satellites into space, add decorative patterns to the paper that wraps your gifts, alert you when your windshield washer fluid is low, help get your luggage to your hotel rooms
[ Shown in the photo is the final step in hermetically sealing the assembly of our reed-switch products produced by Standex Electronics U.K. Pictured above]
Many of the companies in our Industrial segment are among the leaders in their markets. The reasons include not only service and quality, but our commitment to understanding current end-user needs and expectations, as well as emerging trends.
[Mold-Tech provides texturing on a wide variety of products such as the dashboard in this automobile. Pictured above] |
This commitment has made Standex the world leader in texturizing: in creating the three-dimensional surfaces that enhance the utility, appeal, and saleability of molded products. The only truly global texturizing resource, Standex's Mold-Tech unit operates 25 plants in 14 countries, serving companies in the automotive, computer, housewares, construction materials, and other industries. The company's strategically positioned full-service plants, coupled with state-of-the-art optical imaging systems, allow OEMs and marketers to incorporate new patterns and textures into their designs in a matter of days. |
Our Roehlen embossing group makes complete texturizing systems, including the rolls, dies and presses that apply textures and patterns to products like vinyl siding, wall coverings, and decorative embossed packaging. Its technical team regularly consults with customers to anticipate demand for new and different textures -- and then provides fast, cost-effective solutions that help the customer be first to market.
![]() |
|
With more than 6,000 products, the Jarvis Caster Group is the leader in the institutional caster market, providing mobility to virtually anything that rolls in a hotel, restaurant, hospital, store, or office. It makes specialized casters that meet the stringent National Sanitary Foundation standards, and supplies more than 50% of the shopping cart wheels and casters used in North America. Seven manufacturing and distribution facilities across North America assure responsiveness as well as quality.
![]() |
![]() |
Reed-switches, sensors and toroids manufactured by Standex Electronics reflect the company's core competency in designing and manufacturing electronic products to meet the needs of the consumer and electronic market. Innovative surface mount designs of its inductors, switches, toroids and transformers meet the needs of automation and downsizing of electronic equipment, while its proprietary assemblies light streetlamps around the world.
[With pressures up to 220,000 pounds per square inch, Spincraft can spin-form heavy shapes up to 26 feet in diameter. As pictured above] |
High technology meets basic manufacturing at Spincraft, where the nation's largest spin lathe shapes huge sheets of aluminum into domes that seal the fuel tanks on space launch vehicles. The company is a key supplier to programs that are developing both reusable and expendable space launch vehicles for commercial applications, and has close relationships with the major participants supplying products to the commercial satellite industry. In addition, Spincraft has extensive expertise in shaping exotic metals such as titanium for highly specialized applications ranging from turbines to aircraft engines and nuclear reactors. |
CONSUMER
Consider key trends that are shaping America: the increasing demand for single family homes, the growth of direct marketing as a preferred purchasing channel, and perhaps most importantly, the reemergence of religion as a spiritual force in the U.S. These are the trends that are propelling the Standex Consumer segment.
The Standex companies serve some of the largest and fastest growing markets in the U.S. While Standex's other businesses enhance the quality and functionality of many products and services used by consumers, the Consumer segment taps key consumer niche markets directly through publishing, retailing, direct marketing, and products used in home construction.
[The chain of Berean(R) Christian Stores is depicted in the photo taken at our Denver location. Pictured above]
Interest in spiritual and family values and religious education for children is increasing nationwide. As a result, Standard Publishing and its Berean(R) Christian Stores rank among Standex's most significant businesses and opportunities. The leading publisher of nondenominational religious curricula and Vacation Bible School programs in the U.S., the company publishes more than 170,000 magazines that are distributed to churches each week.
In addition, Standard Publishing recently released a
best-selling book with CD-ROM by Grammy Award nominee
Rebecca St. James, a Christian music artist, and has
begun experimenting with innovative packaging ideas --
like CD-ROM book combinations Ð designed to appeal to
today's increasingly youthful religious audience. [Standard Publishing, a leading publisher of nondenominational religious curricula, recently released a book with CD-ROM by Grammy Award nominee Rebecca St. James, a Christian music artist. As pictured right] |
![]() |
Standex plans a significant expansion of Berean's 21-store network. These large, modern stores -- the largest is 22,000 square feet -- reflect the latest trends in book and retail merchandising. Berean stores are often the dominant religious outlets in their markets, and the unit has developed a comprehensive acquisition and site selection strategy designed to ensure that new stores enjoy the same strong position.
Standex also operates in one of the most basic and
important of American markets -- home construction and
remodeling -- through its Standex Air Distribution unit.
With the market for single-family residences growing each
year, and with central air conditioning becoming a
standard feature in most new homes, Standex has
experienced steadily increasing demand for its quality
ductwork. The unit's network of three strategically
located plants helps ensure timely delivery to
wholesalers, while minimizing shipping costs. Standex Air
Distribution has recently announced an agreement to
purchase the net assets of the Acme Manufacturing
Company, based in Philadelphia, PA, with seven
manufacturing facilities in the eastern United States. [Standex Air Distribution Products is a major supplier of home air distribution products. Pictured right] |
![]() ![]() |
In recent years, direct marketing has captured a rapidly increasing share of the retailing segment. Standex Direct includes six catalogue units that market a broad selection of exceptional quality, branded products -- including Texas Ruby Red grapefruit, Vidalia(R)* onions, Fresh Expressions flowers, and salsa. While each business presents a discrete face to its niche market, all six businesses share a common infrastructure that helps maximize both sales and efficiency.
For example, while each unit maintains its own
extensive customer data base, all share a centralized
mailing list management capability. This sophisticated
computer system is designed to facilitate the addition of
entire new businesses as well as products over time. In
addition, the combined scale of the Standex Direct
businesses has allowed them to develop a common
transportation network, which not only reduces costs, but
allows greater control over the shipping of perishable
items. [Standex Direct is comprised of six catalogue units marketing products such as grapefruit, salsa, flowers and Vidalia(R)* onions. Pictured right] |
![]() |
In addition, all six businesses have begun to explore cross-selling opportunities that can increase the value of their individual mailing lists, each operation's primary asset.
* A registered trademark of the Georgia Department of Agriculture.
Management's Discussion and Analysis
LIQUIDITY AND CAPITAL RESOURCES
During the fiscal year ended June 30, 1997, net operating cash flows of $36.9 million, $5.2 million in proceeds from the disposition of businesses and $5.1 million in proceeds from the issuance of stock were used to purchase $15 million of the company's Common Stock, fund property, plant and equipment expenditures of $12.2 million, pay $10 million in dividends, spend $4.6 million in the acquisition of five businesses and reduce debt by a net $4.7 million.
During the first quarter of fiscal 1997, the Company acquired certain assets of three companies: The Vidalia Onion Store, Salsa Express and Worley Bookstore. In the second quarter, the Company acquired 100% of the Common Stock of Fellowship Bookstores. In the third quarter, the Company acquired the assets of Apostles Publishing Company. These purchases were primarily financed from operating cash flows and proceeds from the disposition of the company's Toastswell division in the third quarter of fiscal 1997.
On August 20, 1997, the Company signed a purchase and sale agreement with ACME Manufacturing Company whereby the Company will acquire the net assets of ACME. The acquisition of this operation, which has annual net sales of approximately $60 million, will be financed from existing bank credit agreements.
The Company intends to continue its policy of using its funds to make acquisitions when conditions are favorable, invest in property, plant and equipment, pay dividends and purchase its Common Stock.*
Net Cash Provided by Operating Activities rose to $36.9 million in 1997 versus $34.1 million in the prior year due mainly to continued improvement in working capital. In fiscal 1995, large sales growth translated into substantial increases in Inventories, Accounts Receivable and Accounts Payable. However, with the reduction in sales in fiscal 1996, Inventories, Accounts Receivable and Accounts Payable declined considerably, having a net positive effect on operating cash flows for the year ended June 30, 1996. Due to continued efforts to improve working capital, in fiscal 1997 Accounts Receivable declined and Accounts Payable rose resulting in an increase in operating cash flows for the year ended June 30, 1997.
At June 30, 1997, the Company had the ability to borrow an additional $62.3 million under existing bank credit agreements. The Company believes that this resource, along with the company's internally generated funds, will be sufficient to meet its anticipated needs for the foreseeable future. The company's existing bank credit agreements are described in the Notes to the Consolidated Financial Statements.*
Operations
As of the year ended June 30, 1997, the Company realigned operations into three new segments in order to more clearly define the markets the Company serves. The following table provides results for the last three fiscal years. Figures for fiscal 1996 and 1995 have been restated.
Net Sales by Industry Segment | |||||
Year Ended June 30 (in thousdands) | 1997 |
Change |
1996 |
Change |
1995 |
Food Service | $149,371 |
1.9% |
$146,547 |
(7.7%) |
$158,723 |
Industrial | 252,742 |
(4.0) |
263,145 |
1.5 |
259,274 |
Consumer | 162,510 |
6.2 |
152,987 |
1.1 |
151,293 |
Operatring Income Be Indutry Segment | |||||
Year Ended June 30 (in thousdands) | 1997 |
Change |
1996 |
Change |
1995 |
Food Service | $11,665 |
(0.6)% |
$11,731 |
(39.5)% |
$19,384 |
Industrial | 25,998 |
(15.1) |
30,611 |
(21.7) |
39,104 |
Consumer | 18,511 |
0.1 |
18,321 |
(6.7) |
19640 |
FISCAL 1997 AS COMPARED TO FISCAL 1996
Although it is difficult to quantify the impact of each operation's sales price increases and decreases on Net Sales during fiscal 1997, management believes the majority of the fluctuations in Net Sales reported by each segment are due to changes in unit volume. In addition, although the effect of changes in annual average exchange rates from 1996 to 1997 had a negative effect on Net Sales in 1997, the total effect of such changes was not significant.
For the year ended June 30,1997, Net Sales increased $1.9 million as compared to fiscal 1996. The Consumer segment reported a $9.5 million, or 6.2%, growth in Net Sales due to improved demand, the introduction of new products and acquisitions made during fiscal 1997.
An increase in Net Sales of $2.8 million, or 1.9%, was reported by the Food Service segment. For the year ended June 30, 1997, the majority of operations within this segment reported growth in Net Sales which more than compensated for softness reported by a few divisions and the sale of a division in the third quarter of fiscal 1997.
The sales growth reported by the Consumer and Food Service segments was partially offset by a $10.4 million, or 4%, decline in Net Sales from the Industrial segment. This segment's results were mainly caused by sluggish demand reported by its European operations and the disposition of a product line at the end of fiscal 1996.
As of June 30, 1997, the Gross Profit Margin Percentage remained basically unchanged at 33% as compared to 32.9% reported in the prior year. The Consumer segment reported an increase in the Gross Profit Margin Percentage of one percentage point primarily due to increased volume and more favorable material costs. Despite the growth in Net Sales reported by the Food Service segment, the Gross Profit Margin Percentage declined slightly mainly due to restructuring costs at one division. The Gross Profit Margin Percentage recorded by the Industrial segment was basically unchanged in total. However, European operations reported unfavorable trends in profit margins due to increased competitive pressures on pricing which was offset by growth in margins recorded by a few domestic units due mainly to favorable changes in product mix.
Selling, General and Administrative Expense (SG&A) rose $7.1 million in 1997 to 23.6% of Net Sales versus 22.4% of Net Sales in 1996. The majority of the increase was attributable to the Consumer segment. This segment registered a 12.7% increase in SG&A as a result of acquisitions made during fiscal 1997. These costs were somewhat higher than anticipated due to difficulties assimilating some of the acquisitions. Management has taken steps to reduce these expenses to a more acceptable level. The Food Service and Industrial segments reported minor fluctuations in SG&A.
For the year ended June 30, 1997, Depreciation and Amortization Expenses increased slightly to $12.8 million as compared to $12.5 million in 1996. All three segments reported minor increases in Depreciation and Amortization Expenses, none of which was individually significant.
Interest Expense decreased $551,000, or 6.1%, in 1997. This was due to a decline in both borrowings and interest rates compared to the prior year.
The above factors resulted in a decline in Income Before Income Taxes of $4.6 million, or 9.6%, in 1997 as compared to 1996. The Industrial segment reported a $4.6 million, or 15.1%, decrease in Operating Income due mainly to the reduction in Net Sales discussed above. The Food Service and Consumer segments reported minor fluctuations in Operating Income.
The effective tax rate increased to 38.1% for the year ended June 30, 1997, as compared to 36.2% for the previous fiscal year due mainly to reduced availability of foreign tax credits.
Due to the above factors, Net Income decreased $3.8 million, or 12.4%.
FISCAL 1996 AS COMPARED TO FISCAL 1995
In the latter portion of fiscal 1995, a few divisions raised sales prices to partially offset increased material costs. Although it is difficult to quantify the impact of the sales price increases on Net Sales during fiscal 1996, management believes the majority of the fluctuations in Net Sales reported by each segment are due to changes in unit volume. In addition, although changes in annual average exchange rates from 1995 to 1996 had a positive impact on Net Sales in 1996, the total effect of such changes was not significant.
For the year ended June 30,1996, Net Sales decreased $6.6 million, or 1.2%, as compared to the fiscal year ended 1995. Net Sales reported by the Industrial segment increased $3.9 million, or 1.5%, for the year ended June 30, 1996. Improved results reported by James Burn International and Roehlen Industries/Europe accounted for the majority of this sales growth due to increased worldwide demand. However, this sales growth was partially offset by the absence of a German subsidiary which was sold in the first quarter of fiscal 1995.
The Consumer segment reported a $1.7 million, or 1.1%, increase in Net Sales for the year ended June 30, 1996, mainly due to improved customer demand reported by Berean Christian Stores.
The Food Service segment registered a $12.2 million, or 7.7%, reduction in Net Sales for the year ended June 30, 1996. Fiscal 1996 Net Sales reported by the majority of operations within this segment declined due to sluggish economic conditions within the food service industry, compounded by U.S. weather related problems in the third fiscal quarter of 1996.
The Gross Profit Margin Percentage decreased from 33.8% in 1995 to 32.9% in 1996 with all three segments reporting a reduction in their Gross Profit Margin Percentages. Despite the growth in sales reported during fiscal 1996, the Industrial segment's Gross Profit Margin Percentage fell one percentage point due to competitive pressures on profit margins. The Food Service segment's Gross Profit Margin Percentage declined almost three percentage points primarily due to the reduction in sales discussed above. A slight decline in profit margins was reported by the Consumer segment.
Selling, General and Administrative Expense (SG&A) decreased $4.0 million in 1996 to 22.4% of Net Sales versus 22.9% of Net Sales in 1995. The majority of this decline is related to a reduction in profit improvement incentive plan expenses due to the decrease in Net Income reported in fiscal 1996. All three segments reported slight dollar fluctuations in SG&A expense.
For the year ended June 30, 1996, Depreciation and Amortization Expenses rose slightly to $12.5 million versus $12.4 million in 1995. The Industrial and Consumer segments report a slight variation in Depreciation and Amortization Expenses. However, the Food Service segment reported a 14.1% increase in Depreciation and Amortization Expenses due to an expansion of facilities at two units within this segment during fiscal year 1995.
Interest Expense rose $681,000, or 8.1%, in 1996. This is due to an increase in borrowings at slightly higher interest rates than those reported during fiscal 1995. In addition, the Company negotiated a $50 million loan with an institutional investor which bears a fixed interest rate of 7.13%.
The above factors resulted in a decline in Income Before Income Taxes of $9.7 million, or 16.7%, in 1996 as compared to 1995. The Industrial segment reported a $8.5 million, or 21.7%, reduction in Operating Income due mainly to the absence of the net gain on the disposition of businesses and product lines reported during fiscal 1995. The Food Service segment registered a $7.7 million, or 39.5%, decline in Operating Income due to the reduction in Net Sales and the decrease in the Gross Profit Margin Percentage discussed above.
The effective tax rate rose in 1996 to 36.2% versus 33.7% in 1995. Fiscal 1995 was positively impacted by higher than normal foreign tax credits which were not repeated in fiscal 1996.
Due to the above factors, Net Income declined $7.6 million, or 19.8%.
OTHER MATTERS
Inflation -- The impact of inflation felt in 1995 lessened in fiscal 1996 and 1997 due mainly to a stabilization of material costs, as well as the presence of only minor increases in labor costs.
Environmental matters -- The Company is a party to various claims and legal proceedings, generally incidental to its business and has recorded an appropriate provision for the resolution of such matters. As explained more fully in the Notes to the Consolidated Financial Statements, the Company does not expect the ultimate disposition of these matters to have a material adverse effect on it financial statements.
New Accounting Pronouncements
In February 1997, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standard (SFAS) No. 128, Earnings per Share." This standard changes the method of calculating earnings per share and is effective December 15, 1997. The Company has evaluated this standard and does not expect its adoption to have a significant effect on the Company's earnings per share.
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income," and SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information." The Company has reviewed both of these standards and does not expect their adoption to have a significant effect on the company's operating results or disclosure requirements.
*These forward looking statements are affected to varying degrees by worldwide economic conditions and inherent uncertainties in environmental matters respectively.