UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q [X] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934 For The Quarterly Period Ended June 30, 2000 Commission File Nos. 0-9115 and 0-24494 MATTHEWS INTERNATIONAL CORPORATION (Exact Name of registrant as specified in its charter) PENNSYLVANIA 25-0644320 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) TWO NORTHSHORE CENTER, PITTSBURGH, PA 15212-5851 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (412) 442-8200 NOT APPLICABLE (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] The number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: Class of Common Stock Outstanding at July 31, 2000 Class A - $1.00 par value 13,265,130 shares Class B - $1.00 par value 2,059,884 shares PART I - FINANCIAL INFORMATION MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (UNAUDITED)
June 30, 2000 September 30, 1999 ------------- ------------------ ASSETS Current assets: Cash and cash equivalents $ 26,751,718 $ 31,531,686 Short-term investments 1,284,052 147,114 Accounts receivable 46,307,823 45,949,743 Inventories: Materials and finished goods $ 14,914,512 $ 14,883,879 Labor and overhead in process 1,552,432 1,212,485 Supplies 341,916 304,113 ---------- ---------- 16,808,860 16,400,477 Other current assets 2,796,711 2,862,341 ---------- ---------- Total current assets 93,949,164 96,891,361 Investments 14,492,062 11,312,730 Property, plant and equipment: Cost 93,558,490 89,777,983 Less accumulated depreciation (44,771,991) (39,107,236) ---------- ---------- 48,786,499 50,670,747 Deferred income taxes and other assets 13,782,801 13,639,723 Goodwill, net of accumulated amortization 48,957,932 53,163,011 ----------- ----------- Total assets $219,968,458 $225,677,572 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Long-term debt, current maturities 4,837,675 7,604,443 Accounts payable 9,881,089 9,798,531 Accrued compensation 15,721,975 18,127,646 Accrued income taxes 3,865,785 818,324 Customer prepayments 6,118,029 6,825,149 Other current liabilities 9,264,976 19,117,031 ---------- ---------- Total current liabilities 49,689,529 62,291,124 Long-term debt 15,777,597 14,144,038 Estimated finishing costs 4,215,621 4,059,837 Postretirement benefits 19,153,487 19,513,936 Other liabilities 8,045,116 11,046,706 Shareholders' equity: Common stock 18,166,996 18,166,996 Retained earnings 170,553,099 152,098,622 Accumulated other comprehensive income (loss) (6,789,644) (3,970,000) Notes receivable (13,806) (54,800) Treasury stock, at cost (58,829,537) (51,618,887) ----------- ----------- 123,087,108 114,621,931 ----------- ----------- Total liabilities and shareholders' equity $219,968,458 $225,677,572 =========== ===========
MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
Three Months Ended Nine Months Ended June 30, June 30, ------------------------ -------------------------- 2000 1999 2000 1999 ---- ---- ---- ---- Sales $ 67,872,139 $ 61,405,443 $197,391,066 $176,435,150 Cost of sales 36,773,493 35,912,327 107,627,802 102,325,890 ---------- ---------- ----------- ----------- Gross profit 31,098,646 25,493,116 89,763,264 74,109,260 Selling and administrative expenses 17,768,132 14,366,454 53,538,417 43,723,467 ---------- ---------- ----------- ----------- Operating profit 13,330,514 11,126,662 36,224,847 30,385,793 Investment income 436,266 602,371 1,265,253 1,390,170 Interest expense (369,658) (264,940) (1,189,305) (500,822) Other income (deductions), net (138,753) (231,865) (172,717) (285,879) Minority interest (566,284) 128,121 (1,716,144) (95,067) ---------- ---------- ----------- ----------- Income before income taxes 12,692,085 11,360,349 34,411,934 30,894,195 Income taxes 4,966,728 4,472,287 13,488,774 12,165,816 ---------- ---------- ----------- ----------- Net income $ 7,725,357 $ 6,888,062 $ 20,923,160 $ 18,728,379 ========== ========== =========== =========== Basic earnings per share $ .50 $ .44 $ 1.35 $ 1.18 ===== ===== ===== ===== Diluted earnings per share $ .49 $ .43 $ 1.32 $ 1.15 ===== ===== ===== ===== Dividends per share $.0475 $ .045 $.1425 $ .135 ===== ===== ===== =====
MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
Nine Months Ended June 30, -------------------------- 2000 1999 ---- ---- Cash flows from operating activities: Net income $ 20,923,160 $ 18,728,379 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 9,228,802 7,399,879 Change in deferred taxes 1,753 (339,253) Changes in working capital items (1,395,867) (8,026,116) Increase in other assets (313,344) (224,622) Increase in estimated finishing costs 155,784 476,790 Increase (decrease) in other liabilities (3,001,590) 425,540 Decrease in postretirement benefits (360,449) (455,788) Net loss on sale of assets 277,802 47,991 Net (gain) loss on investments 113,701 (154,121) Effect of exchange rate changes on operations (674,076) (268,971) ---------- ---------- Net cash provided by operating activities 24,955,676 17,609,708 ---------- ---------- Cash flows from investing activities: Capital expenditures (5,714,973) (11,592,652) Proceeds from sale of assets 467,592 156,065 Acquisitions, net of cash acquired (9,520,333) (10,278,531) Purchases of investment securities (6,716,970) (529,503) Proceeds from disposition of investment securities 2,031,756 4,227,392 Collections on loans to officers and employees 40,994 208,445 ---------- ---------- Net cash used in investing activities (19,411,934) (17,808,784) ---------- ---------- Cash flows from financing activities: Proceeds from long-term debt 4,023,360 14,645,963 Payments on long-term debt (3,779,161) (600,381) Proceeds from the sale of treasury stock 197,457 763,065 Purchases of treasury stock (7,672,327) (11,157,235) Dividends (2,204,463) (2,136,584) ---------- ---------- Net provided by (cash used) in financing activities (9,435,134) 1,514,828 ---------- ---------- Effect of exchange rate changes on cash (888,576) (233,511) ---------- ---------- Net increase (decrease) in cash and cash equivalents $ (4,779,968) $ 1,082,241 ========== ==========
MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2000 Note 1. Nature of Operations Matthews International Corporation ("Matthews"), founded in 1850 and incorporated in Pennsylvania in 1902, is a designer, manufacturer and marketer principally of custom-made products which are used to identify people, places, products and events. The Company's products and operations are comprised of three business segments: Bronze, Graphics Imaging and Marking Products. The Bronze segment is a leading manufacturer of cast bronze memorials and other memorialization products, crematories and cremation-related products and is a leading builder of mausoleums in the United States. The Graphics Imaging segment manufactures and provides printing plates, pre-press services and imaging systems for the corrugated and flexible packaging industries. The Marking Products segment designs, manufactures and distributes a wide range of equipment and consumables for identifying various consumer and industrial products, components and packaging containers. The Company has manufacturing and marketing facilities in the United States, Australia, Canada, Germany, Italy and Sweden. Note 2. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information for commercial and industrial companies and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation have been included. Operating results for the three-month and nine-month periods ended June 30, 2000 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2000. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended September 30, 1999. The consolidated financial statements include all majority-owned foreign and domestic subsidiaries. The consolidated financial statements also include the accounts of the Company's 50%-owned affiliates, Tukaiz Communications, L.L.C., O.N.E. Color Communications, L.L.C. and, effective April 1, 1999, S+T GmbH & Co. KG. All intercompany accounts and transactions have been eliminated. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued JUNE 30, 2000 Note 3. Income Taxes The income tax provision for the period is based on the effective tax rate expected to be applicable for the full year. The difference between the estimated effective tax rate of 39.2% and the Federal statutory rate of 35% primarily reflects the impact of state income taxes. Note 4. Earnings Per Share
Three Months Ended Nine Months Ended June 30, June 30, ------------------------- -------------------------- 2000 1999 2000 1999 ---- ---- ---- ---- Net income $ 7,725,357 $ 6,888,062 $20,923,160 $18,728,379 ========== ========== ========== ========== Weighted average common shares outstanding 15,420,408 15,788,712 15,529,805 15,901,985 Dilutive securities, primarily stock options 355,757 378,920 354,990 414,772 ---------- ---------- ---------- ---------- Diluted weighted average common shares outstanding 15,776,165 16,167,632 15,884,795 16,316,757 ========== ========== ========== ========== Basic earnings per share $ .50 $ .44 $1.35 $1.18 ==== ==== ==== ==== Diluted earnings per share $ .49 .43 $1.32 $1.15 ==== ==== ==== ====
Note 5. Segment Information The Company is organized into three business segments based on products and services. The segments, which are Bronze, Graphics Imaging and Marking Products, are described under Nature of Operations (Note 1). Management evaluates segment performance based on operating profit (before income taxes) and does not allocate non-operating items such as investment income, interest expense, other income (deductions),net and minority interest. MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued JUNE 30, 2000 Note 5. Segment Information, continued Information about the Company's segments follows:
Three Months Ended Nine Months Ended June 30, June 30, ------------------------- -------------------------- 2000 1999 2000 1999 ---- ---- ---- ---- Sales to external customers: Graphics Imaging $ 22,867,129 $ 21,944,128 $ 67,739,715 $ 62,165,106 Marking Products 8,230,426 7,727,258 24,816,068 22,890,652 Bronze 36,774,584 31,734,057 104,835,283 91,379,392 ----------- ----------- ----------- ----------- $ 67,872,139 $ 61,405,443 $197,391,066 $176,435,150 =========== =========== =========== =========== Operating profit: Graphics Imaging $ 2,643,102 $ 1,302,572 $ 6,942,903 $ 4,226,697 Marking Products 1,484,213 1,164,390 4,362,272 3,086,386 Bronze 9,203,199 8,659,700 24,919,672 23,072,710 ----------- ----------- ----------- ----------- $ 13,330,514 $ 11,126,662 $ 36,224,847 $ 30,385,793 =========== =========== =========== ===========
Note 6. Comprehensive Income Comprehensive income consists of net income adjusted for changes, net of tax, in cumulative foreign currency translation, unrealized investment gains and losses and minimum pension liability. Comprehensive income for the three-month and nine-month periods ended June 30, 2000 were $7,430,465 and $18,103,516, respectively, and $6,935,896 and $18,593,190, respectively, for the three-month and nine-month periods ended June 30, 1999. Note 7. Accounting Pronouncement In December 1999, the Securities and Exchange Commission ("SEC") issued Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial Statements." SAB No. 101 provides guidance on the recognition, presentation and disclosure of revenue in financial statements filed with the SEC. SAB No. 101 outlines basic criteria that must be met to recognize revenue and provides guidance for disclosure related to revenue recognition policies. The Company will be required to implement SAB No. 101 in the first quarter of its fiscal year ending September 30, 2001. The Company is currently evaluating the pronouncement in order to determine the impact, if any, of its provisions on the consolidated financial statements. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Cautionary Statement: The following discussion should be read in conjunction with the consolidated financial statements and footnotes thereto included in this Quarterly Report on Form 10-Q and the Company's Annual Report on Form 10-K for the year ended September 30, 1999. Any forward-looking statements contained herein are included pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks and uncertainties that may cause the Company's actual results in future periods to be materially different from management's expectations. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove correct. Factors that could cause the Company's results to differ materially from the results discussed in such forward-looking statements principally include changes in domestic or international economic conditions, changes in product demand or pricing as a result of consolidation in the industries in which the Company operates, changes in product demand or pricing as a result of competitive pressures, and technological factors beyond the Company's control. Results of Operations The following table sets forth certain income statement data of the Company expressed as a percentage of net sales for the periods indicated. Nine months ended Years ended June 30, September 30, ----------------- -------------------- 2000 1999 1999 1998 1997 ---- ---- ---- ---- ---- Sales 100.0% 100.0% 100.0% 100.0% 100.0% Gross profit 45.5 42.0 43.1 44.0 44.1 Operating profit 18.4 17.2 17.1 17.0 16.3 Income before income taxes 17.4 17.5 17.2 17.5 17.1 Net income 10.6 10.6 10.5 10.6 10.4 Sales for the nine months ended June 30, 2000 were $197.4 million and were $21.0 million, or 11.9%, higher than sales of $176.4 million for the nine months ended June 30, 1999. Bronze segment sales were $13.5 million, or 15%, higher than the first nine months of fiscal 1999 primarily reflecting the Company's acquisition of Caggiati S.p.A. in June 1999 and higher sales of architectural and memorial products. These increases were partially offset by a decline in mausoleum construction revenues. Sales for the Graphics Imaging segment increased $5.6 million, or 9%, over the same period a year ago principally resulting from the Company's purchase of a 50% interest in S+T GmbH & Co. KG ("S+T GmbH") in September 1998. S+T GmbH was recorded under the equity method of accounting until March 31, 1999. The consolidated financial statements of Matthews included the accounts of S+T GmbH effective April 1, 1999 as a result of a change in control. Graphics Imaging segment sales for the current period also reflected higher sales for Tukaiz Communications, L.L.C. ("Tukaiz"). The sales increase for Tukaiz, a 50%-owned subsidiary of Matthews, primarily resulted from the installation of a commercial printing operation in fiscal 1999. Results of Operations, continued: For the nine months ended June 30, 2000, Marking Products segment sales were $1.9 million, or 8%, higher than the first nine months of fiscal 1999. The increase for the current period resulted primarily from higher sales volume in North America of ink-jet equipment and related products, reflecting the favorable impact of the segment's new product development efforts. Gross profit for the nine months ended June 30, 2000 was $89.8 million, compared to $74.1 million for the first nine months of fiscal 1999. The increase of $15.7 million in consolidated gross profit reflected growth in all three of the Company's business segments. Gross profit in the Bronze and Graphics Imaging segments were higher for the current period principally as a result of the Company's recent acquisitions. In addition, higher sales of architectural and memorial products combined with improved margins accounted for part of the increase in the Bronze segment. Marking Products gross profit also improved over the first nine months of fiscal 1999 reflecting an increase in sales volume and a change in product mix. Consolidated gross profit as a percent of sales for the nine months ended June 30, 2000 increased to 45.5%, compared to 42.0% for the same period a year ago, reflecting changes in product mix in both the Bronze and Marking Products segments and improved results for Tukaiz. Selling and administrative expenses for the nine months ended June 30, 2000 were $53.5 million, representing an increase of $9.8 million, or 22.4%, over the same period a year ago. The increase in selling and administrative expenses principally resulted from the acquisitions of Caggiati S.p.A. and S+T GmbH combined with an increase in selling and administrative costs within the Bronze segment. Consolidated selling and administrative expenses as a percent of sales was 27.1% for the first nine months of fiscal 2000 compared to 24.8% for the same period a year ago. Operating profit for the nine months ended June 30, 2000 was $36.2 million, representing an increase of $5.8 million, or 19.2%, over an operating profit of $30.4 million for the first nine months of fiscal 1999. Graphics Imaging operating profit for the current period was $2.7 million, or 64%, higher than the same period last year reflecting higher sales and improved gross margins. The segment's fiscal 2000 results were favorably impacted by the Company's investment in S+T GmbH combined with an improvement in the operating results of Tukaiz. Operating profit for the Bronze segment for the first nine months of fiscal 2000 was $1.8 million, or 8%, higher than the same period a year ago. The acquisition of Caggiati S.p.A. combined with higher sales and improved margins for architectural and memorial products were the primary factors in the Bronze segment's current operating results. Operating profit for the Marking Products segment for the nine months ended June 30, 2000 increased $1.3 million, or 41%, over the same period a year ago. Higher sales in North America of ink-jet equipment and related products as a result of the segment's new product development efforts and a better product mix resulted in the operating profit growth. Investment income for the first nine months of fiscal 2000 was $1.3 million compared to $1.4 million for the first nine months of fiscal 1999. Fiscal 1999 investment income included equity income of $244,000 from the Company's investment in S+T GmbH, which was recorded under the equity method of accounting through March 31, 1999. Results of Operations, continued: Interest expense for the nine months ended June 30, 2000 was $1.2 million, compared to $501,000 for the first nine months of fiscal 1999. The increase in interest expense compared to the same period last year principally related to fiscal 1999 borrowings by Tukaiz and new borrowings and assumed debt in connection with the acquisition of Caggiati in June 1999. Other income (deductions), net, for the nine months ended June 30, 2000 represented a reduction to pre-tax income of $173,000 compared to a reduction of $286,000 for the first nine months of fiscal 1999. Minority interest for the first nine months of fiscal 2000 was $1.7 million compared to $95,000 for the same period a year ago. The higher minority interest deduction for the current period resulted from the Company's investment in S+T GmbH and an improvement in the operating results of Tukaiz. The Company's effective tax rate for the first nine months of fiscal 2000 was 39.2%, compared to 39.4% for the year ended September 30, 1999. The difference between the Company's effective tax rate and the Federal statutory rate of 35% primarily reflects the impact of state income taxes. Liquidity and Capital Resources Net cash provided by operating activities was $25.0 million for the nine months ended June 30, 2000, compared to $17.6 million for the first nine months of fiscal 1999. Operating cash flow for both periods primarily reflected net income adjusted for depreciation and amortization (non-cash expenses). Operating cash flow for the prior period was impacted by higher accounts receivable related to mausoleum construction revenues and the payment of income tax accruals. Cash used in investing activities was $19.4 million for the nine months ended June 30, 2000 compared to $17.8 million for the first nine months of fiscal 1999. Investing activities for the current period reflected capital expenditures of $5.7 million, net purchases of investment securities of $4.7 million and cash payments of $3.6 million and $5.6 million, respectively, in connection with the acquisitions of Caggiati S.p.A. and a 50% interest in S+T GmbH. Under the acquisition agreement for Caggiati S.p.A., Matthews paid cash of Lit. 20.2 billion (U.S.$10.9 million) at the closing (June 1, 1999) with Lit. 7.2 billion payable one year after the closing date (June 1, 2000) and the remaining Lit. 7.2 billion payable two years after the closing date (June 1, 2001). The cash payment for the purchase of a 50% interest in S+T GmbH (which was acquired in September 1998) was due in January 2000. Investment securities were purchased in the fiscal 2000 first quarter to obtain a better rate of return on the Company's excess cash. Investing activities for the first nine months of fiscal 1999 included capital expenditures of $11.6 million, which were partially offset by proceeds of $3.7 million from the net disposition of investment securities. Fiscal 1999 investing activities also included the acquisition of Caggiati S.p.A. in June 1999. Capital expenditures for the first nine months of fiscal 2000 were lower than the same period a year ago principally reflecting the investment last year in a commercial printing operation at Tukaiz. Capital spending for property, plant and equipment has averaged $8.9 million for the last three fiscal years. The capital budget of the Company for fiscal 2000 is $11.7 million. The Company expects to generate sufficient cash from operations to fund all anticipated capital spending projects. Liquidity and Capital Resources, continued Cash used in financing activities for the nine months ended June 30, 2000 was $9.4 million, consisting of net treasury stock purchases of $7.5 million, proceeds of $4.0 million from borrowings by Caggiati S.p.A., repayments of $3.8 million on long-term debt of Caggiati S.p.A. and Tukaiz, and dividend payments of $2.2 million to the Company's shareholders. Cash provided by financing activities was $1.5 million for the nine months ended June 30, 1999 consisting principally of borrowings of $14.6 million in connection with the acquisition of Caggiati S.p.A. and capital projects for Tukaiz, offset by net treasury stock purchases of $10.4 million and the Company's dividends of $2.1 million. The Company had available lines of credit with U.S. and Canadian banks, net of outstanding borrowings, of approximately $11 million at June 30, 2000. On April 27, 2000, Matthews announced that its Board of Directors approved a continuation of the Company's stock repurchase program. Previously, the Board had authorized the repurchase of a total of three million shares of the Company's Class A and Class B Common Stock, which has been substantially completed. The current authorization allows Matthews to purchase up to an additional one million shares. The repurchase program is designed to increase shareholder value, enlarge the Company's holdings of its Class A and Class B Common Stock, and add to earnings per share. Repurchased shares may be retained in treasury, utilized for acquisitions, or reissued to employees or other purchasers. At June 30, 2000 and September 30, 1999 and 1998, the Company's current ratio was 1.9, 1.6 and 1.7, respectively. The Company had cash and cash equivalents at June 30, 2000 and September 30, 1999 of $26.8 million and $31.5 million, respectively. Net working capital at June 30, 2000 was $44.3 million. The Company believes that its current liquidity sources, combined with its operating cash flow and additional borrowing capacity, will be sufficient to meet its capital needs for the next 12 months. Accounting Pronouncement In December 1999, the Securities and Exchange Commission ("SEC") issued Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial Statements." SAB No. 101 provides guidance on the recognition, presentation and disclosure of revenue in financial statements filed with the SEC. SAB No. 101 outlines basic criteria that must be met to recognize revenue and provides guidance for disclosure related to revenue recognition policies. The Company will be required to implement SAB No. 101 in the first quarter of its fiscal year ending September 30, 2001. The Company is currently evaluating the pronouncement in order to determine the impact, if any, of its provisions on the consolidated financial statements. Year 2000 Issue The Company has assessed the impact of the Year 2000 issue on its operations and information systems. Costs incurred for this assessment and for systems modifications required to address any Year 2000 issues have not been material. The Company's significant operating and information systems are Year 2000 compliant and, as such, the Year 2000 issue did not have a material impact on the consolidated financial position, results of operations or cash flows of the Company. PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits The following Exhibit to this report is filed herewith: Exhibit No. Description ------- ----------- 27 Financial Data Schedule (via EDGAR) (b) Reports on Form 8-K None 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. MATTHEWS INTERNATIONAL CORPORATION (Registrant) Date 8/10/00 D.M. Kelly ------------ ----------------------------------------- D.M. Kelly, Chairman of the Board, President and Chief Executive Officer Date 8/10/00 E.J. Boyle ------------ ----------------------------------------- E.J. Boyle, Vice President, Accounting & Finance, Treasurer and Secretary