-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HeN+Vx0nU8wrJ6IZ9WOe0+CFR/BpSHlHgBvApG3pUlFRN+B5kOpMUx4txi+4b7kw 0uErrTDjNpUanB6ZUI/kqw== 0000922435-99-000013.txt : 19990811 0000922435-99-000013.hdr.sgml : 19990811 ACCESSION NUMBER: 0000922435-99-000013 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990810 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INSITUFORM TECHNOLOGIES INC CENTRAL INDEX KEY: 0000353020 STANDARD INDUSTRIAL CLASSIFICATION: WATER, SEWER, PIPELINE, COMM AND POWER LINE CONSTRUCTION [1623] IRS NUMBER: 133032158 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-10786 FILM NUMBER: 99681820 BUSINESS ADDRESS: STREET 1: 702 SPIRIT 40 PARK DRIVE CITY: CHESTERFIELD STATE: MO ZIP: 63005 BUSINESS PHONE: 3145308000 MAIL ADDRESS: STREET 1: 702 SPIRIT 40 PARK DRIVE CITY: CHESTERFIELD STATE: MO ZIP: 63005 FORMER COMPANY: FORMER CONFORMED NAME: INSITUFORM OF NORTH AMERICA INC/TN/ DATE OF NAME CHANGE: 19930617 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended June 30, 1999 --------------------------------- Commission file number #0-10786 ------------------------------------------ Insituform Technologies, Inc. - ---------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 13-3032158 - ---------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 702 Spirit 40 Park Drive, Chesterfield, Missouri 63005 - ---------------------------------------------------------------- (Address of Principal Executive Offices) (636) 530-8000 - ---------------------------------------------------------------- (Registrant's telephone number including area code) - ---------------------------------------------------------------- (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 --- --- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at August 1, 1999 - -------------------------- --------------------------------- Class A Common Stock, 25,400,506 Shares $0.01 par value INDEX ----- Part I Financial Information: Item 1. Financial Statements: Consolidated Balance Sheets Consolidated Statements of Income Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Item 3. Quantitative and Qualitative Disclosure About Market Risk Part II Other Information and Signatures: Item 1. Legal Proceedings Item 4. Submission of Matters to a Vote of Security Holders Item 6. Exhibits and Reports on Form 8-K Signatures Index to Exhibits PART I. - FINANCIAL INFORMATION ------------------------------- ITEM 1. - FINANCIAL STATEMENTS INSITUFORM TECHNOLOGIES, INC. CONSOLIDATED BALANCE SHEETS (in thousands) Unaudited June 30, 1999 December 31, 1998 ------------- ----------------- ASSETS CURRENT ASSETS -------------- Cash and cash equivalents $65,258 $76,904 Trade receivables, less allowance for doubtful accounts of $2,899 and $2,909, respectively 46,634 52,280 Retainage under construction contracts 11,018 12,368 Costs and estimated earnings in excess of billings 16,954 9,792 Inventories 9,714 11,282 Prepaid expenses and other 7,468 7,479 -------- -------- TOTAL CURRENT ASSETS 157,046 170,105 -------- -------- PROPERTY AND EQUIPMENT, less accumulated depreciation 53,797 56,421 -------- -------- OTHER ASSETS - ------------ Goodwill, less accumulated amortization of $16,657 and $15,078, respectively 65,807 56,504 Patents and patent applications, less accumulated amortization of $6,360 and $5,663, respectively 10,581 11,172 Investments in licensees and affiliated companies 5,126 5,234 Other 4,864 5,172 -------- -------- TOTAL OTHER ASSETS 86,378 78,082 -------- -------- TOTAL ASSETS $297,221 $304,608 ======== ======== See accompanying summary of accounting policies and notes to consolidated financial statements.
INSITUFORM TECHNOLOGIES, INC. CONSOLIDATED BALANCE SHEETS (in thousands)
Unaudited June 30, 1999 December 31, 1998 ------------- ----------------- LIABILITIES AND STOCKHOLDERS' EQUITY - ------------------------------------ CURRENT LIABILITIES ------------------- Accounts payable and accrued expenses $45,477 $45,231 Current maturities of long-term debt and notes payable 1,914 2,918 -------- -------- TOTAL CURRENT LIABILITIES 47,391 48,149 LONG-TERM DEBT, less current maturities 111,597 112,131 OTHER LIABILITIES 1,052 1,115 -------- -------- TOTAL LIABILITIES 160,040 161,395 -------- -------- MINORITY INTERESTS 3,756 3,708 -------- -------- STOCKHOLDERS' EQUITY -------------------- Preferred stock, undesignated, $.10 par - shares authorized 2,000,000; none outstanding - - Common stock, $.01 par - shares authorized 40,000,000; shares outstanding 25,394,551 and 27,302,304 275 273 Additional paid-in capital 71,663 68,931 Retained earnings 97,000 86,355 -------- -------- 168,938 155,559 Treasury stock - 2,151,601 and 991,701 shares (31,384) (13,097) Cumulative foreign currency translation adjustments (4,129) (2,957) -------- -------- TOTAL STOCKHOLDERS' EQUITY 133,425 139,505 -------- -------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $297,221 $304,608 ======== ======== See accompanying summary of accounting policies and notes to consolidated financial statements.
INSITUFORM TECHNOLOGIES, INC. CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (in thousands, except share amounts)
For the Three Months For the Six Months Ended June 30, Ended June 30, 1999 1998 1999 1998 ---- ---- ---- ---- Rehabilitation revenue $85,640 $75,501 $156,802 $139,261 Cost of rehabilitation 56,046 51,067 103,058 92,933 -------- -------- -------- -------- Gross profit 29,594 24,434 53,744 46,328 Selling, administrative and general expenses 16,761 15,180 31,983 30,057 -------- -------- -------- -------- Operating income 12,833 9,254 21,761 16,271 Other expense: - -------------- Interest expense (2,230) (2,243) (4,444) (4,556) Other income 618 769 1,545 1,310 -------- -------- -------- -------- Total other expense (1,612) (1,474) (2,899) (3,246) Income before taxes on income 11,221 7,780 18,862 13,025 Taxes on income 4,607 3,088 7,699 5,169 -------- -------- -------- -------- Income before minority interests and equity in earnings 6,614 4,692 11,163 7,856 Minority interests in net income (237) (173) (436) (250) Equity in earnings of affiliated companies 16 (110) (84) (151) -------- -------- -------- -------- Net income $6,393 $4,409 $10,643 $7,455 ======== ======== ======== ======== Basic earnings per share $0.25 $0.16 $0.41 $0.28 ======== ======== ======== ======== Diluted earnings per share $0.25 $0.16 $0.41 $0.27 ======== ======== ======== ======== See accompanying summary of accounting policies and notes to consolidated financial statements.
INSITUFORM TECHNOLOGIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
For the Six Months Ended June 30, 1999 1998 ---- ---- Cash flows from operating activities: - ------------------------------------- Net income $10,643 $7,455 Adjustments to reconcile net income to cash used by operating activities: Depreciation and amortization 9,443 9,299 Miscellaneous (254) 345 Equity in earnings of affiliated companies 84 151 Minority interests 436 250 Translation adjustments (1,170) (758) Deferred income taxes (166) (142) Changes in operating assets and liabilities, net of assets acquired: Receivables 6,813 16,292 Costs in excess of billings under construction (7,140) (4,540) Inventories 1,899 286 Prepaid expenses and other (1,217) 426 Other assets (167) 832 Accounts payable and accruals 838 (444) Income taxes payable 564 (3,352) ------- ------ Net cash provided by operating activities 20,606 26,100 ------- ------ Cash flows from investing activities: - ------------------------------------- Capital expenditures (4,682) (7,767) Proceeds on disposal of property and equipment 1,607 569 Purchase of business net of cash acquired (11,771) - Investments in licensees/affiliated companies - 16 Patents and patent applications (66) (688) ------- ------ Net cash used by investing activities (14,912) (7,870) ------- ------ (continued) See accompanying summary of accounting policies and notes to consolidated financial statements.
INSITUFORM TECHNOLOGIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
For the Six Months Ended June 30, 1999 1998 ---- ---- Cash flows from financing activities: - ------------------------------------- Proceeds from issuance of common stock 2,734 537 Purchases of treasury stock (18,287) - Increase (decrease) in short-term borrowings (662) 237 Repayments of long-term debt (824) (1,286) ------- ------- Net cash used by financing activities (17,039) (512) ------- ------- Effect of exchange rates changes on cash (301) (33) ------- ------- Net increase (decrease) in cash and cash equivalents for the period (11,646) 17,685 ------- ------- Cash and cash equivalents, beginning of period 76,904 45,734 ------- ------- Cash and cash equivalents, end of period $65,258 $63,419 ======= ======= Supplemental disclosures of cash flows information: - --------------------------------------------------- 1999 1998 ---- ---- Cash paid during six months ended June 30, for: -------------------------------------------------- Interest $4,381 $4,525 Income taxes $7,129 $5,295 Non-cash investing and financing activities: -------------------------------------------- Deferred consideration for business acquired - $1,105 See accompanying summary of accounting policies and notes to consolidated financial statements.
INSITUFORM TECHNOLOGIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) June 30, 1999 1. GENERAL In the opinion of the Company, the accompanying consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the financial position as of June 30, 1999 (unaudited) and the unaudited results of operations and cash flows for the six months ended June 30, 1999 and 1998. The financial statements have been prepared in accordance with the requirements of Form 10-Q and consequently do not include all the disclosures normally made in an Annual Report on Form 10-K. Accordingly, the consolidated financial statements included herein should be reviewed in conjunction with the financial statements and the footnotes thereto included in the Company's 1998 Annual Report on Form 10-K. The results of operations for the six months ended June 30, 1999 and 1998 are not necessarily indicative of the results to be expected for the full year. 2. COMPREHENSIVE INCOME For the quarters ended June 30, 1999 and 1998, comprehensive income was $5.1 million and $4.3 million, respectively. For the six months ended June 30, 1999 and 1998, comprehensive income was $9.5 million and $6.7 million, respectively. The Company's adjustment to comprehensive income consists solely of cumulative foreign currency translation adjustments. 3. EARNINGS PER SHARE Earnings per share has been calculated using the following share information:
Three Months Ended June 30, 1999 1998 ---- ---- Weighted average number of common shares used for basic EPS 25,435,941 26,978,379 Effect of dilutive stock options and warrants 551,949 277,636 ---------- ---------- Weighted average number of common shares and dilutive potential common stock 25,987,890 27,256,015 ========== ========== Six Months Ended June 30, 1999 1998 ---- ---- Weighted average number of common shares used for basic EPS 25,700,211 26,968,862 Effect of dilutive stock options and warrants 470,778 201,482 ---------- ---------- Weighted average number of common shares and dilutive potential common stock 26,170,989 27,170,344 ========== ==========
4. SEGMENT REPORTING The Company has principally three operating segments: rehabilitation, tunneling and corrosion and abrasion ("Tite Liner(R)"). These operating units represent strategic business units that offer distinct products and services and serve different markets. The following disaggregated financial results have been prepared using a management approach, which is consistent with the basis and manner with which management internally disaggregates financial information for purposes of assisting in making internal operating decisions. Financial information by segment is as follows (in thousands):
Three Months Ended June 30, 1999 1998 ---- ---- Revenues Rehabilitation $67,279 $56,415 Tunneling 11,005 8,809 Tite Liner 7,356 10,277 ------- ------- Total Revenues $85,640 $75,501 ======= ======= Operating Income Rehabilitation $11,929 $7,942 Tunneling 1,647 880 Tite Liner (743) 432 ------- ------- Total Operating Income $12,833 $9,254 ======= ======= Six Months Ended June 30, 1999 1998 ---- ---- Revenues Rehabilitation $122,710 $105,572 Tunneling 20,578 15,598 Tite Liner 13,514 18,091 ------- ------- Total Revenues $156,802 $139,261 ======== ======== Operating Income Rehabilitation $20,130 $14,170 Tunneling 2,661 1,538 Tite Liner (1,030) 563 ------- ------- Total Operating Income $21,761 $16,271
======= ======= 5. ACQUISITION On June 1, 1999, the Company completed its acquisition of all of the shares of Riooltechnieken Nederland B.V., its exclusive licensee of the Insituform(R) Process in the Netherlands, from BFI Holdings B.V. The purchase price was NGL 25 million (approximately US$11.8 million), which was paid in cash at closing. 6. CURRENT EVENTS On July 20, 1999, the Company entered into a settlement agreement with Insituform East, Inc. ("East") and its affiliates, providing for dismissal of the pending actions before the Delaware Chancery Court and the American Arbitration Association involving the parties and their joint venture doing business under the name Midsouth Partners ("Midsouth"). The Company has accounted for losses in Midsouth, which was 57.5% owned by the Company and its subsidiary, on the equity method, as a consequence of Midsouth's management by a seven-member management committee controlled by East. Under the settlement, the Company and its subsidiary withdrew as partners in Midsouth, and the licenses from the Company to Midsouth with respect to the Insituform(R) process and the NuPipe(R) process were terminated. Pursuant to the settlement, East will pay to the Company an amount equal to the book value of the interests of the Company and its subsidiary in Midsouth, and will repay to the Company outstanding loans to Midsouth in the amount of $400,000. Under the settlement, the Company and its affiliates and licensees may operate in Midsouth's former exclusive territory (consisting of Tennessee and portions of Mississippi and Kentucky) without any obligation to East or its affiliates. 7. LITIGATION The Company is involved in certain litigation incidental to the conduct of its business. In the Company's opinion, none of these proceedings will have a material adverse effect on the Company's financial position, results of operations and liquidity. The financial statements include the estimated amounts of liabilities that are likely to be incurred from these and various other pending litigation and claims. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following is management's discussion and analysis of certain significant factors which have affected the Company's financial condition and results of operations during the periods included in the accompanying consolidated financial statements. GENERAL - ------- The Company's revenues derive primarily from rehabilitation, tunneling and corrosion and abrasion operations, generated by the Company's subsidiaries conducting business in the United States, Canada, France, the United Kingdom, Chile, Argentina and Mexico, and include product sales to, and royalties and license fees paid by, the Company's unaffiliated Insituform(R)licensees and sub-licensees and its unaffiliated NuPipe(R) licensees. During the three years ended December 31, 1998, 1997 and 1996, approximately 63.8%, 62.5% and 69.7%, respectively, of the Company's consolidated revenues related to the Insituform(R) Process. Statements contained in and preceding management's discussion and analysis include various forward-looking information that is based on data currently available to management and management's beliefs and assumptions. When used in this document, the words "anticipate," "estimate," "believes," "plans," and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. Such statements are subject to risks and uncertainties, and the Company's actual results may vary materially from those anticipated, estimated or projected due to a number of factors, including, without limitation, the competitive environment for the Company's products and services, the geographical distribution and mix of the Company's work, and other factors set forth in reports and other documents filed by the Company with the Securities and Exchange Commission from time to time. RESULTS OF OPERATIONS - --------------------- Three and Six Months Ended June 30, 1999 and 1998 Total revenues for the second quarter increased 13.3% to $85.6 million from $75.5 million in 1998, which contributed to an increase in revenues for the first half of 1999 of 12.6% to $156.8 million from $139.3 million in the first half of 1998. The majority of the increased volume for the second quarter continued to come from the Company's installation operations within North America and Europe in addition to tunneling operations. The Company's Titeliner revenues for second quarter 1999 decreased 28.4% compared to the same quarter in the prior year, and decreased 25.3% for the first half of 1999 compared to the same period in the prior year. This decline continued principally due to lower volume in Canada and Chile. The Company's gross profit during the second quarter increased 21.3% to $29.6 million from $24.4 million in the second quarter of 1998, and during the first half of 1999 increased 16.0% to $53.7 million from $46.3 million during the first half of 1998, primarily due to increased revenues as well as increased profitability from the Company's North American and European rehabilitation operations as well as the tunneling operations. The improvement in rehabilitation operations was offset somewhat by a decrease in gross profit from the Company's corrosion and abrasion operations due to the revenue volume decrease and continued project difficulties in Chile. The overall gross profit margin for second quarter 1999 was 34.6% compared to 32.4% in the second quarter of 1998 and for the first half of 1999 was 34.3% compared to 33.3% in the prior year. In second quarter 1999, selling, administrative and general expenses increased 10.5% to $16.8 million from $15.2 million in the same quarter in the prior year, and for the first half of 1999 increased 6.3% to $32.0 million from $30.1 million in the same period in the prior year. This increase was primarily due to increased costs related to North American rehabilitation administration. In addition, at the corporate level there were increased costs in compensation, legal and consulting fees, and ongoing costs related to the Company's management information system's improvements. Also, amortization of goodwill increased, which was a result of acquiring the installation operation in the Netherlands. As a percentage of revenues, selling, administrative and general expenses decreased in the second quarter of 1999 to 19.6% from 20.1% in the comparable quarter of the prior year and for the first half of 1999 decreased to 20.4% from 21.6% in first half of 1998. This decrease is primarily attributable to revenue volume increasing at a faster rate than selling, administrative and general expenses. Interest expense in second quarter 1999 remained relatively flat with second quarter 1998 due to virtually no change in outstanding debt. For the first half of 1999, interest expense decreased 2.5% to $4.4 million from $4.6 million in the prior year, due primarily to lower revolving credit borrowings in the Company's subsidiaries. Other income decreased in second quarter 1999 to $0.6 million from $0.8 million in second quarter 1998, due principally to lower investment income resulting from lower interest rates. Despite a decrease in second quarter 1999, other income for the first half of 1999 increased to $1.5 million from $1.3 million in the first half of 1998 due primarily to increased invested cash and cash equivalents. In the second quarter of 1999, taxes on income increased to $4.6 million from $3.1 million in 1998 due principally to the increase in income before taxes on income of $3.5 million from the second quarter of 1998. In the first half of 1999, taxes on income increased 49% to $7.7 million from $5.8 million due principally to the increase in income before taxes on income of $2.5 million from the first half of 1998. As a result of the foregoing, net income for second quarter 1999 increased 45.0% to $6.4 million, representing a 7.5% return on revenue, compared to $4.4 million for second quarter 1998, when a 5.8% return on revenue was achieved. For the first half of 1999, net income was $10.6 million, or a 6.8% return on revenue, compared to $7.5 million in the first half of 1998, when a 5.4% return on revenue was achieved. LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- At June 30, 1999, the balance of cash, U.S. Treasury bills, and short-term investments was $65.3 million, compared to $76.9 million at December 31, 1998. The decrease in cash and cash equivalents in 1999 resulted from operation of the Company's previously reported stock repurchase program, which used cash in the amount of $18.3 million in the first half of 1999. Also, there were cash outlays for capital spending of $4.7 million, and $11.8 million for the acquisition of the Netherlands operations, offset somewhat by the Company's continued strong positive generation of cash from operating activities of $20.6 million. Working capital was $109.7 million at June 30, 1999, compared to $122.0 million at December 31, 1998. While operating activities generated cash of $20.6 million during the first half of 1999, $26.1 million was generated in the first half of 1998. The principal reason for the decrease was a smaller favorable change in operating assets and liabilities of $1.6 million during the first half of 1999, as compared to a favorable change of $9.5 million during the first half of 1998. Trade receivables, together with costs and estimated earnings in excess of billings and retainage under construction contracts, increased only slightly to $74.6 million from $74.4 million at December 1998, primarily attributable to stronger management control over collections. The collection of installation receivables involves contractual provisions for retainage by the project owner, often 5% to 15% of the contract amount, which extends the collection process. Collections are also sometimes further prolonged by the slow internal review processes often employed by the Company's municipal customers. In the United States, retainage receivables are generally received within 60 to 90 days after the completion of a contract. Capital expenditures were $4.7 million in the first half of 1999, compared to $7.8 million in the first half of 1998. Capital expenditures generally reflect replacement equipment required by the Company's installation operations. During the first half of 1998, capital expenditures also reflected approximately $0.5 million related to the completion of the Company's new research and development center. While the Company expects that routine capital spending will continue at the current level in the foreseeable future, the Company has several information system improvement initiatives underway that will require increased expenditures during the next several years. These initiatives, which began principally in 1997, include expenditures of approximately $1.6 million in connection with the installation of an electronic data collection system in each of the Company's North American rehabilitation operations during the course of 1999, of which $1.0 million was spent during the first half of 1999. See "Year 2000" below for information concerning the impact of year 2000 issues on the Company's operations. In addition, during the second half of 1999, the Company plans to increase expenditures related to field crew capacity expansion to meet rising volume demands. On June 1, 1999, the Company completed its acquisition of all of the shares of Riooltechnieken Nederland B.V., its exclusive licensee of the Insituform process in the Netherlands, from BFI Holdings, B.V. The purchase price was NGL 25 million (approximately $11.8 million), which was paid in cash at closing. Included in the acquisition was a 10% stockholding owned by the licensee in Insituform Linings PLC, a joint venture between the Company and certain European licensees, which manufactures the Insituform tubes used by the Company's operations and licensees in Europe and Asia. Financing activities used $17.0 million in the first half of 1999, as compared to cash used of $0.5 million in the first half of 1998. In July 1998, the Company announced that its Board of Directors had authorized the repurchase of up to 2,700,000 shares of the Company's class A common stock, $.01 par value, to be made from time to time over five years in open market transactions. The amount and timing of purchases will be dependent upon a number of factors, including the price and availability of the Company's shares, general market conditions and competing alternative uses of funds, and may be discontinued at any time. During the first half of 1999, the Company used cash in the amount of $18.3 million for the repurchase of 1,159,900 shares. The Company has used cash in the cumulative amount of $28.1 million for the repurchase of 1,895,800 shares through June 30, 1999 since inception of the stock repurchase program. The repurchased shares will be held as treasury stock. In the first half of 1999, the Company made principal payments totaling $0.8 million relating to the Company's existing debt, as compared to $1.3 million in the first half of 1998. The Company generated $2.7 million from the issuance of common stock from stock options granted to employees, as compared to $0.5 million in the first half of 1998. The Company's $110 million principal amount of Senior Notes, Series A, due February 14, 2007 (the "Senior Notes") bear interest, payable semi-annually in August and February of each year, at the rate per annum of 7.88%. Each year, from February 2001 to February 2006, inclusive, the Company will be required to make principal payments of $15.7 million, together with an equivalent payment at maturity. The Senior Notes may be prepaid at the Company's option, in whole or in part, at any time, together with a make whole premium, and upon specified change in control events each holder has the right to require the Company to purchase its Senior Note without any premium thereon. The Company has a credit agreement (the "Credit Agreement") whereby the lender will make available to the Company, until September 1, 2001 (the "Maturity Date"), a revolving credit line of up to $20,000,000 aggregate principal amount for working capital and permitted acquisitions, including $10,000,000 available for standby and commercial letters of credit. Interest on outstanding advances accrues, at the election of the Company, at either the lender's prime rate, payable monthly, or its LIBOR rate, plus a margin ranging from .5% to 1.5% depending on the maintenance of certain financial ratios, payable at the end of selected interest periods (from one to six months). Outstanding principal is subject to repayment on the Maturity Date, except that advances for permitted acquisitions must be repaid within six months after disbursement. The note purchase agreements pursuant to which the Senior Notes were acquired, and the Credit Agreement, obligate the Company to comply with certain financial ratios and restrictive covenants that, among other things, place limitations on operations and sales of assets by the Company or its subsidiaries, and limit the ability of the Company to incur further secured indebtedness and liens and of subsidiaries to incur indebtedness, and, in the event of default, limit the ability of the Company to pay cash dividends or make other distributions to the holders of its capital stock or to redeem such stock. The Credit Agreement also obligates certain of the Company's domestic subsidiaries to guaranty the Company's obligations, as a result of which the same subsidiaries have also delivered their guaranty with respect to the Senior Notes. In July 1999, the Company borrowed EUR 5,672,000 in order to refinance a portion of the purchase price for its Netherlands licensee. Such amount is repayable in seven equal installments annually on each July 31, and accrues interest, payable quarterly, at the rate of 5.5% per annum. On July 20, 1999, the Company entered into a settlement agreement with Insituform East, Inc. ("East") and its affiliates, providing for dismissal of the pending actions before the Delaware Chancery Court and the American Arbitration Association involving the parties and their joint venture doing business under the name Midsouth Partners ("Midsouth"). Under the Agreement, the Company and its subsidiary withdrew as partners in Midsouth, and the licenses from the Company to Midsouth with respect to the Insituform process and the NuPipe process were terminated. Pursuant to the Agreement, East will pay to the Company an amount equal to the book value of the interests of the Company and its subsidiary in Midsouth, and will repay to the Company outstanding loans to Midsouth in the amount of $400,000. The Agreement expressly provides that the Company and its affiliates and licensees may operate in Midsouth's former exclusive territory (consisting of Tennessee and portions of Mississippi and Kentucky) without any obligation to East or its affiliates. Under the Agreement, a subsidiary of East retains a non-exclusive right in Midsouth's former territory to utilize the cured-in-place process and technology in the condition and state as commercially practiced under license on the date of settlement. The Agreement further provides that such subsidiary: (i) retains no rights to use the trademark "Insituform"; (ii) is not entitled to receive from the Company any further improvements or modifications to the cured-in-place process or technology, nor any technical or marketing support; and (iii) may not use any of the rights granted outside of such territory unless such use is inadvertent and de minimis. Any breach of the foregoing limitations results in immediate abrogation of the rights granted. In March 1998, the Company completed the acquisition of the entire minority interest in its Chilean subsidiary for an aggregate purchase price of approximately $2.1 million, $1.0 million of which was paid in connection with closing, $0.6 million of which is paid in March 1999, the first anniversary of closing, and the remainder of which is due on the second anniversary of closing. In September 1998, the Company completed its acquisition of 80% of the shares of Video Injection S.A. The purchase price for the these shares was $5.0 million, $2.4 million of which was paid at closing, $1.3 million of which is due on the first anniversary of closing, and $1.3 million of which is due on the second anniversary of closing, such additional installments secured by the Company's letter of credit arrangements. On the fifth anniversary of closing (or earlier, in specified events), the Company will purchase the remaining 20% of the shares of Video Injection pursuant to a formula based on Video Injection's results of operations. Management believes its current working capital will be adequate to meet its requirements for the foreseeable future. YEAR 2000 - --------- The "year 2000" problem relates to computer systems that have time and date-sensitive programs that were designed to read years beginning with "19," but may not properly recognize the year 2000. If a computer system or software application used by the Company or a third party dealing with the Company fails because of the inability of the system or application to properly read the year "2000," the results may adversely affect the Company. Accordingly, the Company is reviewing its internal computer programs and systems to ensure year 2000 compliance. In 1998, the Company established a project team to address year 2000 risks facing the Company, and its customers and suppliers, and engaged an internationally-recognized consulting firm to assist the team with implementing programs addressing preparedness of the Company. The project team continues to coordinate the identification and implementation of changes to computer hardware and software applications that will attempt to ensure the availability and integrity of the Company's information systems. The project team is also reviewing and analyzing voice and data communications systems, building systems, manufacturing and operations equipment with embedded components (including HVAC, security and fire protection), and field operations equipment to ensure the reliability of operational systems and manufacturing processes, both in North America and in Europe. The project team has identified the Company sites and entities that may harbor assets at risk, collecting pertinent information, establishing year 2000 disposition strategies and assessing and reporting risks. The Company's manufacturing system has been modified so as to achieve year 2000 compliance in all material respects, and the Company has identified additional systems that will be replaced by year end. The Company's project team provides consulting services where needed in the areas of project planning and estimating, testing and technical issues, and runs remedial projects as appropriate. The Company also faces risk to the extent that suppliers of products, services and systems purchased by the Company and others with whom the Company transacts business on a worldwide basis do not comply with year 2000 requirements. Principal areas of the Company's review are banking systems (and the effects on receivables, payables and payroll), telecommunications, suppliers to the Company's manufacturing and operating units (such as felt and resin), transportation systems (both inbound and outbound), and customer information systems for order placement and release and payment of invoices. The Company's project team has had formal communications with representatives from significant outside parties that transact with the Company to determine the extent to which the Company is vulnerable to failure by them to remediate their own year 2000 issues. In the case of suppliers to the Company's manufacturing and operating units, verification includes site visits. The Company's strategy entails proactive compliance assessment in the case of these parties when appropriate, as well as maintaining paper records of transactions when advisable and inventory stocks of key materials. The Company expects to complete its year 2000 compliance program during 1999 and, based on information collected, presently believes that any significant issues within its own operations and facilities will be addressed in a timely manner. However, while the Company has not identified material difficulties presented by its suppliers or in its financial or communications support that are not being addressed, and while the estimated cost of the Company's efforts is not expected to be material to the Company's financial position or any year's results of operations, there can be no assurance to this effect. Based on management's current assessment that no material exposure to significant business interruption exists, the Company has not adopted any formal contingency plan in the event its year 2000 project is not completed in a timely manner, or in the event unforeseen difficulties arise. The Company will appropriately modify its strategy as additional circumstances come to its attention, but there can be no assurance that the Company will timely identify and remediate all significant year 2000 problems, and that remedial efforts will not involve significant time and expense, or that such problems will not have a material adverse effect on the Company's business, results of operations or financial position. MARKET RISK - ----------- The Company conducts its rehabilitation activities on a worldwide basis, giving rise to exposures related to changes in foreign currency exchange rates. For example, foreign currency exchange rate movements may create a degree of risk to the Company's operations by affecting: (i) the U.S. dollar value of sales made in foreign currencies, and (ii) the U.S. dollar value of costs incurred in foreign currencies. In addition, the Company is exposed to market risks related to changes in interest rates. The Company's objective is to minimize the volatility in earnings and cash flow from these risks. The Company has selectively used, and will continue to use, forward exchange contracts in order to manage its currency exposure. Forward exchange contracts are executed by the Company only with large, reputable banks and financial institutions and are denominated in currencies of major industrial countries. Given its assessment of such risk, the Company has not deemed it necessary to offset any interest rate exposure. Furthermore, the Company does not enter into transactions involving derivative financial instruments for speculative trading purposes. Based on the Company's overall currency exchange rate and interest rate exposure at June 30, 1999, a ten percent weakening in the U.S. dollar across all currencies or ten percent increase in interest rates would not have a material impact on the financial position, results of operations or cash flows of the Company. These effects of hypothetical changes in currency exchange rates and in interest rates, however, ignore other effects the same movement may have arising from other variables, and actual results could differ from the sensitivity calculations of the Company. The Company regularly assesses these variables, establishes policies and business practices to protect against the adverse effects of foreign currency and interest rate fluctuations and does not anticipate any material losses generated by these risks. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK For information concerning this item, see "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations - Market Risk," which information is incorporated herein by reference. PART II. - OTHER INFORMATION ---------------------------- ITEM 1. LEGAL PROCEEDINGS AM-Liner Proceeding. In previously reported patent infringement proceedings brought by the Company in the United States District Court for the Northern District of California against AM-Liner USA, Inc., American Pipe & Plastics Inc. ("APP") and J.F. Pacific Liners, Inc. (Civil Action No. C-95-01511 CAL), the court in May 1999 entered an amended judgment against the defendants in a total amount of $3,491,000, including pre-judgment interest and costs. The defendants filed an amended appeal bond in an amount of the amended judgment plus ten per cent. The Company has filed a cross-appeal from the portion of the amended judgment that calculates the amount of damages. The Company is not able to predict the likelihood of any recovery from the defendants of amounts awarded or its cross-appeal. The Company has commenced a further patent infringement proceeding against APP and its licensee, Sancon Engineering, Inc., in the Central District of California (Civil Action No. SACV 99-909 DOC (EEx)) alleging that APP's processes infringe one aspect of an additional patent held by the Company. Ultraliner Proceedings. In May 1999, the Company commenced an action against Ultraliner, Inc. ("Ultraliner") and its licensee, HydroTech, Inc. ("HydroTech"), in the United States District Court for the Northern District of California (Civil Action No. C-99-2429 CAL), alleging infringement by the defendants of six of the Company's NuPipe(R) patents in connection with Ultraliner's manufacture and sale of its fold and formed pipe liner and its installation by HydroTech. Ultraliner has subsequently served its summons and complaint on the Company with respect to an action in the Central District of Tennessee for a declaration of invalidity of the Company's U.S. patent no. 4,867,921 covering the NuPipe(R) installation process. Pursuant to the Company's motion, in July 1999 the court ruled that the action should be transferred to the Northern District of California. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS (a) On May 26, 1999, the Company convened its Annual Meeting of Stockholders (the "Annual Meeting"). (b) Not applicable because (i) proxies for the Annual Meeting were solicited pursuant to Regulation 14A under the Securities Exchange Act of 1934 together with the Company's Proxy Statement dated April 19, 1999 (the "Proxy Statement"); (ii) there was no solicitation in opposition to management's nominees as listed in the Proxy Statement and (iii) all of such nominees were elected. (c) At the Annual Meeting, the stockholders voted in favor of a proposal to approve an amendment to the By-Laws of the Company providing procedures for nominations for election of directors and the filling of vacancies on the Board of Directors. The holders of 20,064,738 shares voted in favor of, the holders of 93,349 shares voted against, the holders of 108,702 shares abstained and there were 2,452,024 broker non-votes with respect to approval of such proposal. At the Annual Meeting, the stockholders voted in favor of a proposal to approve an amendment of the Certificate of Incorporation of the Company in order to conform the filling of vacancies on the Board of Directors to the procedures set forth in the By-Laws of the Company. The holders of 20,063,245 shares voted in favor of, the holders of 93,662 shares voted against, the holders of 109,902 shares abstained and there were 2,452,004 broker non-votes with respect to approval of such proposal. At the Annual Meeting, the stockholders voted in favor of management's nominees for election as directors of the Company. The holders of 22,483,261 shares voted in favor of, and holders of 235,552 shares withheld their vote for, the election of Robert W. Affholder; the holders of 22,484,001 shares voted in favor of, and holders of 234,812 shares withheld their vote for, the election of Paul A. Biddelman; the holders of 22,483,514 shares voted in favor of, and holders of 235,299 shares withheld their vote for, the election of Stephen P. Cortinovis; the holders of 22,483,461 shares voted in favor of, and holders of 235,352 shares withheld their vote for, the election of Anthony W. Hooper; the holders of 22,483,294 shares voted in favor of, and holders of 235,519 shares withheld their vote for, the election of Thomas N. Kalishman; the holders of 22,483,423 shares voted in favor of, and holders of 235,390 shares withheld their vote for, the election of Silas Spengler; the holders of 22,483,332 shares voted in favor of, and holders of 235,481 shares withheld their vote for, the election of Sheldon Weinig; the holders of 22,484,011 shares voted in favor of, and holders of 234,802 shares withheld their vote for, the election of Russell B. Wight, Jr.; and the holders of 22,483,514 shares voted in favor of, and holders of 235,299 shares withheld their vote for, the election of Alfred L. Woods. (d) Not applicable. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) The exhibits filed as part of this Quarterly Report on Form 10-Q are listed on the annexed Index to Exhibits. (b) During the quarter ended June 30, 1999, the Company filed a Current Report on Form 8-K dated May 28, 1999 which, under "Item 5. Other Events" thereunder, reported (x) modifications to the license from Ashimori Industry Co. Ltd., and (y) completion of the acquisition of the exclusive licensee of the Insituform process in the Netherlands. In addition, the Company has filed a Current Report on Form 8-K dated July 20, 1999 which, under "Item 5. Other Events" thereunder, reported the settlement agreement between the Company and Insituform East, Inc. and its affiliates. No financial statements were filed as part of any such report. 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. INSITUFORM TECHNOLOGIES, INC. August 9, 1999 By: s/William A. Martin --------------------------------- William A. Martin Senior Vice President and Principal Financial and Accounting Officer INDEX TO EXHIBITS ------------------ 3.1 - Restated Certificate of Incorporation of the Company 3.2 - By-laws of the Company 27 - Financial Data Schedule, which is submitted electronically to the Securities and Exchange Commission for information only and is not filed EX-3.1 2 EXHIBIT 3.1 RESTATED CERTIFICATE OF INCORPORATION OF INSITUFORM TECHNOLOGIES, INC. INSITUFORM TECHNOLOGIES, INC., a corporation organized and existing by virtue of the General Corporation Law of Delaware (the "Corporation"), pursuant to the General Corporation Law of Delaware does hereby certify as follows: FIRST: (a) The present name of the Corporation is INSITUFORM TECHNOLOGIES, INC. (b) The name under which the Corporation was originally incorporated is INSITUFORM OF NORTH AMERICA, INC.; and the date of filing the original certificate of incorporation with the Secretary of State of the State of Delaware is March 27, 1980. SECOND: The provisions of the certificate of incorporation of the Corporation, as heretofore amended and/or supplemented, are hereby restated and integrated into the single instrument which is hereinafter set forth, and which is entitled Restated Certificate of Incorporation of Insituform Technologies, Inc., without further amendment and without any discrepancy between the provisions of the certificate of incorporation, as heretofore amended and supplemented, and the provisions of the said single instrument hereinafter set forth. THIRD: The Board of Directors of the Corporation has duly adopted this Restated Certificate of Incorporation pursuant to the provisions of Section 245 of the General Corporation Law of Delaware in the form set forth as follows: "RESTATED CERTIFICATE OF INCORPORATION OF INSITUFORM TECHNOLOGIES, INC. FIRST: The name of the corporation is INSITUFORM TECHNOLOGIES, INC. SECOND: The registered office of the corporation is to be located at Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle, State of Delaware. The name of its registered agent at that address is The Corporation Trust Company. THIRD: The purpose of the corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of Delaware. FOURTH: The corporation shall be authorized to issue forty- two million (42,000,000) shares, consisting of forty million (40,000,000) Class A Common shares, par value one cent ($0.01) per share; and two million (2,000,000) Preferred shares, par value ten cents ($0.10) per share ("Preferred Stock"). The shares of Preferred Stock shall be issued in one or more series designated by the Board of Directors without further shareholder action and shall bear such terms and designation as the Board of Directors may fix, including dividend rates, redemption rights, conversion rights, liquidation preferences, voting rights (provided that the Board of Directors may designate that the holders of one or more series of Preferred Stock shall be entitled as a series to elect one director and the Board of Directors may at its discretion grant the holders of one or more series of the corporation's shares of Preferred Stock the right to elect additional directors in the event that dividends on such series shall be in arrears) and such other terms as the Board of Directors shall determine. Any shares of Preferred Stock reacquired by the corporation may be reissued without further shareholder approval. FIFTH: The name and address of the incorporator are as follows: Name Address ---- ------- Ray A. Barr 9 East 40th Street New York, New York 10016 SIXTH: The following provisions are inserted for the management of the business and for the conduct of the affairs of the corporation, and for further definition, limitation and regulation of the powers of the corporation and of its directors and shareholders: (1) The number of directors of the corporation shall be such as from time to time shall be fixed by, or in the manner provided in, the by-laws; provided, however, that the number of directors of the corporation shall not be less than six (6) nor shall the number of directors of the corporation exceed fifteen (15). Election of directors need not be by ballot unless the by-laws so provide. (2) Vacancies in the Board of Directors shall be filled by a majority of the directors then in office subject to the procedures set forth in the by-laws of the corporation. A director shall hold office until the annual meeting for the year in which his term expires and until his successor shall be elected and shall qualify, subject, however, to prior death, resignation, retirement, disqualification or removal from office. Any director elected to fill a vacancy not resulting from an increase in the number of directors shall have the same remaining term as that of his predecessor. Notwithstanding any provision of this Article SIXTH, whenever the holders of any one or more series of Preferred Stock issued by the corporation shall have the right, voting separately by class or series, to elect directors at an annual or special meeting of shareholders or any class or series, the election, term of office, filling of vacancies and other features of such directorships shall be governed by the terms of this Certificate of Incorporation or the resolution or resolutions adopted by the Board of Directors pursuant to Article FOURTH hereof applicable thereto. (3) The Board of Directors shall have power without the assent or vote of the shareholders: (a) To make, alter, amend, change, add to or repeal the by-laws of the corporation; to fix and vary the amount to be reserved for any proper purpose; to authorize and cause to be executed mortgages and liens upon all or any part of the property of the corporation; to determine the use and disposition of any surplus or net profits; and to fix the times for the declaration and payment of dividends. (b) To determine from time to time whether, and to what extent, and at what times and places, and under what conditions the accounts and books of the corporation (other than the stock ledger) or any of them, shall be open to the inspection of the shareholders. (4) The directors at their discretion may submit any contract or act for approval or ratification at any annual meeting of shareholders or at any meeting of the shareholders called for the purpose of considering any such act or contract, and any contract or act that shall be approved or be ratified by the vote of the holders of a majority of the stock of the corporation which is represented in person or by proxy at such meeting and entitled to vote thereat (provided that a lawful quorum of shareholders be there represented in person or by proxy) shall be as valid and as binding upon the corporation and upon all the shareholders as though it had been approved or ratified by every shareholder of the corporation, whether or not the contract or act would otherwise be open to legal attack because of directors' interest, or for any other reason. (5) In addition to the powers and authorities hereinbefore or by statute expressly conferred upon them, the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the corporation; subject, nevertheless, to the provisions of the statutes of Delaware, of this certificate, and to any by-laws from time to time made by the shareholders; provided, however, that no by-laws so made shall invalidate any prior act of the directors which would have been valid if such by-law had not been made. SEVENTH: The corporation shall, to the full extent permitted by Section 145 of the Delaware General Corporation Law, as amended, from time to time, indemnify all persons whom it may indemnify pursuant thereto. EIGHTH: Whenever a compromise or arrangement is proposed between this corporation and its creditors or any class of them and/or between this corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware, may, on the application in a summary way of this corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for this corporation under the provisions of Section 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for this corporation under the provisions of Section 279 Title 8 of the Delaware Code order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three-fourths (3/4) in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this corporation as consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of this corporation, as the case may be, and also on this corporation. NINTH: The corporation reserves the right to amend, alter, change or repeal any provision contained in this certificate of incorporation in the manner now or hereafter prescribed by law, and all rights and powers conferred herein on stockholders, directors and officers are subject to this reserved power. TENTH: No person who is or was at any time a director of the corporation shall be personally liable to the corporation or its stockholders for monetary damages for any breach of fiduciary duty by such person as a director; provided, however, that, unless and except to the extent otherwise permitted from time to time by applicable law, the provisions of this Paragraph Tenth shall not eliminate or limit the liability of a director (i) for breach of the director's duty of loyalty to the corporation or its stockholders, (ii) for any act or omission by the director which is not in good faith or which involves intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of the State of Delaware, (iv) for any transaction from which the director derived an improper personal benefit or (v) for any act or omission occurring prior to the date this Paragraph Tenth becomes effective. No amendment to or repeal of this Paragraph Tenth shall apply to or have any effect on the liability or alleged liability of any director of the corporation for or with respect to any act or omission of such director occurring prior to such amendment or repeal. ELEVENTH: Subject to the rights of the holders of any class or series of Preferred Stock expressly set forth in this Certificate of Incorporation, the Certificate of Designation related to such class or series of Preferred Stock or as otherwise required by law, any action required or permitted to be taken by the shareholders of the corporation must be effected exclusively at a duly called annual or special meeting of such shareholders and may not be effected by any consent in writing by such shareholders. This Article ELEVENTH may not be repealed or amended in any respect, and no provision inconsistent with this Article ELEVENTH may be adopted, unless such action is approved by the affirmative vote of the holders of not less than eighty (80) percent of the combined voting power of the then outstanding shares of capital stock of the corporation entitled to vote generally in the election of directors." IN WITNESS WHEREOF, the Corporation has caused this Restated Certificate of Incorporation to be executed on its behalf by Anthony W. Hooper, its President, and attested by Howard Kailes, its Secretary, as of this 8th day of June, 1999. ATTEST: s/Howard Kailes s/Anthony W. Hooper - --------------------------- --------------------------------- Howard Kailes Anthony W. Hooper Secretary President EX-3.2 3 EXHIBIT 3.2 BY-LAWS OF INSITUFORM TECHNOLOGIES, INC. (as amended through May 26, 1999) ARTICLE I - OFFICES The principal offices of the corporation in the State of Delaware shall be located in the City of Dover, County of Kent. The Corporation may have such other offices, either within or without the State of incorporation as the board of directors may designate or as the business of the corporation may from time to time require. ARTICLE II - STOCKHOLDERS 1. ANNUAL MEETING. The annual meeting of the stockholders shall be held at such time and upon such date during the month of June in each year as the Board of Directors may determine, for the purpose of electing directors and for the transaction of such other business as may come before the meeting. If the day fixed for the annual meeting shall be a legal holiday such meeting shall be held on the next succeeding business day. 2. SPECIAL MEETINGS. Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute, may be called by either the chairman of the board, the president or by the directors, and shall be called by the president at the request of the holders of not less than fifty per cent of all the outstanding shares of the Corporation entitled to vote at the meeting. 3. PLACE OF MEETING. The directors may designate any place, either within or without the State unless otherwise prescribed by statute, as the place of meeting for any annual meeting or for any special meeting called by the directors. A waiver of notice signed by all stockholders entitled to vote at a meeting may designate any place, either within or without the state unless otherwise prescribed by statute, as the place for holding such meeting. If no designation is made, or if a special meeting be otherwise called, the place of meeting shall be the principal office of the corporation. 4. NOTICE OF MEETING. Written or printed notice stating the place, day and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered not less than ten nor more than fifty days before the date of the meeting, either personally or by mail, by or at the direction of either the chairman of the board, the president, the secretary, or the officer or persons calling the meeting, to each stockholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, addressed to the stockholder at his address as it appears on the stock transfer books of the corporation, with postage thereon pre-paid. 5. CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE. For the purpose of determining stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or stockholders entitled to receive payment of any dividend, or in order to make a determination of stockholders for any other proper purpose, the directors may fix in advance a date as the record date for any such determination of stockholders, such date in any case to be not more than sixty days and, in case of a meeting of stockholders, not less than ten days prior to the date on which the particular action requiring such determination of stockholders is to be taken. If the stock transfer books are not closed and no record date is fixed for the determination of stockholders entitled to notice of or to vote at a meeting of stockholders, or stockholders entitled to receive payment of a dividend, the date on which notice of the meeting is mailed or the date on which the resolution of the directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of stockholders. When a determination of stockholders entitled to vote at any meeting of stockholders has been made as provided in this section, such determination shall apply to any adjournment thereof. 6. VOTING LISTS. The officer or agent having charge of the stock transfer books for shares of the corporation shall make, at least ten days before each meeting of stockholders, a complete list of the stockholders entitled to vote at such meeting, or any adjournment thereof, arranged in alphabetical order, with the address of and the number of shares held by each, which list, for a period of ten days prior to such meeting, shall be kept on file at the principal office of the corporation and shall be subject to inspection by any stockholder at any time during usual business hours. Such list shall also be produced and kept open at the time and place of the meeting and shall be subject to the inspection of any stockholder during the whole time of the meeting. The original stock transfer book shall be prima facie evidence as to who are the stockholders entitled to examine such list or transfer books or to vote at the meeting of stockholders. 7. QUORUM. At any meeting of stockholders a majority of the outstanding shares of the corporation entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of stockholders. If less than said number of the outstanding shares are represented at a meeting, a majority of the shares so represented may adjourn the meeting from time to time without further notice. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. The stockholders present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum. 8. PROXIES. At all meetings of stockholders, a stockholder may vote by proxy executed in writing by the stockholder or by his duly authorized attorney-in-fact. Such proxy shall be filed with the secretary of the corporation before or at the time of the meeting. 9. VOTING. Each stockholder entitled to vote in accordance with the terms and provisions of the certificate of incorporation and these by-laws shall be entitled to one vote, in person or by proxy, for each share of stock entitled to vote held by such stockholders. Upon the demand of any stockholder, the vote for directors and upon any question before the meeting shall be by ballot. All elections for directors shall be decided by plurality vote; all other questions shall be decided by majority vote except as otherwise provided by the Certificate of Incorporation or the laws of this State. 10. ORDER OF BUSINESS. The order of business at all meetings of the stockholders, shall be as follows: 1. Roll call. 2. Proof of notice of meeting or waiver of notice. 3. Reading of minutes of preceding meeting. 4. Reports of Officer. 5. Reports of Committees. 6. Election of Directors. 7. Unfinished Business. 8. New Business. 11. BUSINESS AT MEETINGS. Subsequent to the 1999 annual meeting of stockholders, no business shall be transacted at an annual meeting of stockholders other than business that is (i) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors (or any duly authorized committee thereof), (ii) otherwise properly brought before the annual meeting by or at the direction of the Board of Directors (or any duly authorized committee thereof), or (iii) otherwise properly brought before the annual meeting by a stockholder who (x) is a stockholder of record on the record date for the determination of stockholders entitled to vote at such annual meeting and on the date of the giving of the notice provided for in this Section 11 and (y) complies with the procedures set forth in this Section 11 and any other applicable requirements. No business shall be conducted at a special meeting of stockholders other than business that is specified in the corporation's notice of meeting (or any supplement thereto). In addition, subsequent to the 1999 annual meeting of stockholders only persons who are nominated in accordance with the procedures set forth in this Section 11 (and any other applicable requirements) shall be eligible for election as directors of the corporation. If business is not properly brought before any meeting of stockholders in accordance with the procedures set forth in this Section 11, or if a nomination at any meeting was not made in accordance with the requirements of this Section 11, the chairman shall declare to the meeting that the business was not properly brought before the meeting, and such business shall not be transacted, or the nomination was defective, and such defective nomination shall be disregarded. Subsequent to the 1999 annual meeting of stockholders, nominations of persons for election to the Board of Directors may be made at any annual meeting of stockholders, or at any special meeting of stockholders at which directors are to be elected pursuant to the Corporation's notice of meeting: (i) by or at the direction of the Board of Directors (or any duly authorized committee thereof), subject to the requirements of these By-laws, or (ii) by any stockholder who (x) is a stockholder of record on the record date for the determination of stockholders entitled to vote at such annual meeting and on the date of the giving of the notice provided for in this Section 11 and (y) has complied with the procedures set forth in this Section 11. For a stockholder to be entitled to properly bring business before an annual meeting of stockholders subsequent to the 1999 annual meeting of stockholders, a proper Stockholder's Notice (as defined below) must have been received by the secretary of the corporation at the principal executive offices of the corporation, and for any nomination of a person or persons for election to the Board of Directors by a stockholder (a "Stockholder Nomination") to be made at any annual meeting of stockholders subsequent to the 1999 annual meeting of stockholders, written notice thereof meeting the requirements set forth below must have been received by the secretary of the corporation at the principal executive offices of the corporation, in each case not less than 90 days nor more than 120 days prior to the first anniversary of the date of the preceding year's annual meeting of stockholders; provided, however, that in the event that the date of the annual meeting is advanced or delayed by more than 30 days compared to the preceding year's annual meeting, notice by the stockholder to be timely must be so received not later than the close of business on the later of (i) the ninetieth (90th) day prior to such annual meeting or (ii) the tenth (10th) day following the day on which public disclosure (as defined below) of the date of the annual meeting is first made. For a Stockholder Nomination to be made at any special meeting of stockholders as aforesaid, written notice thereof meeting the requirements set forth below must have been received by the secretary of the corporation at the principal executive offices of the corporation, in each case not later than the close of business on the later of (i) the ninetieth (90th) day prior to such special meeting or (ii) the tenth (10th) day following the day on which public disclosure of the date of the special meeting is made. A Stockholder's Notice shall mean a written notice to the secretary of the corporation which sets forth as to each matter such stockholder proposes to bring before the annual meeting (i) a brief description of the business desired to be brought before the annual meeting (including the form of the proposal) and the reasons for conducting such business at the annual meeting, (ii) the name and record address of such stockholder, (iii) the class or series and number of shares of capital stock of the corporation that are owned beneficially or of record by such stockholder, indicating the name and address of any beneficial owner of such shares, (iv) a description of all arrangements or understandings between such stockholder (and any person acting on behalf of the stockholder) and any other person or persons (including their names) in connection with the proposal of such business by such stockholder and any material interest of such stockholder in such business, and (v) a representation that such stockholder intends to appear in person or by proxy at the annual meeting to bring such business before the meeting. Any notice of a Stockholder Nomination must set forth (a) as to each person whom the stockholder proposes to nominate for election as a director (i) the name, age, business address and residence address of the person, (ii) the principal occupation or employment of the person, (iii) the class or series and number of shares of capital stock of the corporation that are owned beneficially or of record by the person and (iv) any other information relating to the person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Securities Exchange Act of 1934, as then in effect (the "Exchange Act"), and the rules and regulations promulgated thereunder; and (b) as to the stockholder giving the notice (i) the name and record address of such stockholder, (ii) the class or series and number of shares of capital stock of the corporation that are owned beneficially or of record by such stockholder, (iii) a description of all arrangements or understandings between such stockholder and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are to be made by such stockholder, (iv) a representation that such stockholder intends to appear in person or by proxy at the meeting to nominate the persons named in its notice and (v) any other information relating to such stockholder that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder. Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if elected. For purposes of this Section 11, "public disclosure" shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act. ARTICLE III - BOARD OF DIRECTORS 1. GENERAL POWERS. The business and affairs of the corporation shall be managed by its board of directors. The directors shall in all cases act as a board, and they may adopt such rules and regulations for the conduct of their meetings and the management of the corporation, as they may deem proper, not inconsistent with these by-laws and the laws of this State. 2. NUMBER OF DIRECTORS, TENURE AND QUALIFICATIONS. The Board of Directors shall consist of eight (8) directors, provided that the size of the Board of Directors shall increase automatically, without any further amendment to this Section 2, to nine (9) directors upon the election or appointment of the Additional Nominee (as defined in that certain Agreement, dated July 25, 1997, among the corporation, Jerome Kalishman, Nancy F. Kalishman, The Jerome and Nancy Kalishman Family Fund, Robert W. Affholder, Xanadu Investments, L.P., Paul A. Biddelman, Stephen P. Cortinovis, Anthony W. Hooper, Silas Spengler, Sheldon Weinig and Russell B. Wight, Jr., as it may be amended from time to time (the "Agreement")) contemplated by, and selected in accordance with, the provisions of the Agreement. Such directors (except as hereinafter provided for the filling of vacancies) shall be elected in accordance with the Corporation's Certificate of Incorporation by the stockholders by a plurality vote of the number of shares voting at the meeting at which such election shall take place. 3. REGULAR MEETINGS. A regular meeting of the directors, shall be held without other notice than this by-law immediately after, and at the same place as, the annual meeting of stockholders. The directors may provide, by resolution, the time and place for the holding of additional regular meetings without other notice than such resolution. 4. SPECIAL MEETINGS. Special meetings of the directors may be called by or at the request of the president, the Chairman of the Board, or any two directors. The person or persons authorized to call special meetings of the directors may fix the place either within or without the state or country, for holding any special meeting of the directors called by them. 5. NOTICE. Notice of any special meeting shall be given at least 24 hours previously thereto by written notice delivered personally, or by telegram or telecopy or mailed to each director at his residence or business address. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail so addressed, with postage thereon prepaid. If notice be given by telegram, such notice shall be deemed to be delivered when the telegram is delivered to the telegraph company. The attendance of a director at a meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. 6. QUORUM. At any meeting of the directors a majority shall constitute a quorum for the transaction of business, but if less than said number is present at a meeting, a majority of the directors present may adjourn the meeting from time to time without further notice. 7. MANNER OF ACTING. The act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the directors. 8. NEWLY-CREATED DIRECTORSHIPS AND VACANCIES. Any vacancy on the board of directors and any newly- created directorship resulting from an increase in the number of directors may be filled by the directors in accordance with the Corporation's Certificate of Incorporation and Section 14 of this Article III. 9. REMOVAL OF DIRECTORS. Any or all of the directors may be removed only for cause by vote of the stockholders. 10. RESIGNATION. A director may resign at any time by giving written notice to the board, the president or the secretary of the corporation. Unless otherwise specified in the notice, the resignation shall take effect upon receipt thereof by the board or such officer, and the acceptance of the resignation shall not be necessary to make it effective. 11. COMPENSATION. The Board of Directors shall have the authority to fix the compensation of directors. Nothing herein shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed compensation for attending committee meetings. 12. PRESUMPTION OF ASSENT. A director of the corporation who is present at a meeting of the directors at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless his dissent shall be entered in the minutes of the meeting or unless he shall file his written dissent to such action with the person acting as the secretary of the meeting before the adjournment thereof or shall forward such dissent by registered mail to the secretary of the corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to a director who voted in favor of such action. 13. EXECUTIVE AND OTHER COMMITTEES. The board, by resolution, may designate from among its members an executive committee and other committees, each consisting of one or more directors. Each such committee shall serve at the pleasure of the board. 14. NOMINATING COMMITTEE Effective immediately subsequent to the 1999 annual meeting of stockholders, the board shall designate a nominating committee consisting of three directors who shall serve at the pleasure of the board, the functions of which shall include establishing criteria for the selection of the nominees for election as directors, reviewing the qualifications of and maintaining information concerning potential nominees, making appropriate recommendations to the Board with respect to nominees for election as directors at the annual meeting of stockholders, reviewing on a long-term basis the size and composition of the board, and, as vacancies occur on the board between annual meetings, establishing procedures for stockholders to submit and said Committee to review proposed nominations. The board shall not, subsequent to the 1999 annual meeting of the stockholders, nominate any person not then serving as a director for election as a director, or fill any vacancy on the board with any person, unless such person is either (i) recommended to the board by said Committee or (ii) approved by the unanimous vote of the members of the board of directors. The presence of all members of said Committee shall be necessary to constitute a quorum and to transact business, and the act of the majority of the members at a meeting at which a quorum is present shall be the act of said Committee. Meetings of said Committee may be called by any member thereof, upon written or oral notice of such meeting given to each member at least 24 hours prior thereto. The Chairman of the Board shall preside at all meetings of said Committee. 15. NOTICE AND APPROVAL OF CERTAIN ACTIONS Notwithstanding any other provision of these By-laws (and except for the implementation of Sections 2(a), (b), (c) and (e) and Section 6 of the Agreement): (a) in the event that any director proposes to bring before any regular or special meeting of the Board of Directors any proposal relating to any amendment of the Corporation's Certificate of Incorporation or these By-laws or the Agreement (as defined in Article III, Section 2), or any change in the structure, composition (other than such director's resignation) or governance of the Board of Directors (any such action being referred to herein as a "Special Action"), such director must provide written notice thereof (including a reasonably detailed description of such proposal) to each member of the Board of Directors at least seven days prior to the date of the directors' meeting at which the Special Action is to be proposed; and (b) the taking of any Special Action by the Board of Directors must be approved by a majority of all directors then serving; provided, however, that no Special Action which would have any effect prior to the 1999 annual meeting of the stockholders may be taken if such Special Action would conflict with, have the effect of modifying or otherwise frustrating any provision of the Agreement, including, without limitation, any amendment to Article SIXTH of the Corporation's Certificate of Incorporation or Section 2 of this Article III, as such provisions will be in effect pursuant to the Agreement following the 1997 annual meeting of the stockholders. ARTICLE IV - OFFICERS 1. NUMBER. The officers of the corporation shall be a chairman of the board, a vice chairman of the board,a president, one or more senior vice presidents, one or more vice presidents, a secretary and a treasurer, each of whom shall be elected by the directors. Such other officers and assistant officers as may be deemed necessary may be elected or appointed by the directors. In addition, the President may from time to time appoint such officers of operating divisions, and such contracting and attesting officers, of the corporation as he may deem proper, who shall have such authority, subject to the control of the directors, as the President may from time to time prescribe. 2. ELECTION AND TERM OF OFFICE. The officers of the corporation to be elected by the directors shall be elected annually at the first meeting of the directors held after each annual meeting of the stockholders. Each officer elected by the directors shall hold office until his successor shall have been duly elected and shall have qualified or, if earlier, until his death or until he shall resign or shall have been removed in the manner hereinafter provided. Each officer of the corporation appointed by the President shall hold office for such period as the President may from time to time prescribe or, if earlier, until his death or until he shall resign or shall have been removed in the manner hereinafter provided. 3. REMOVAL. Any officer elected or appointed by the directors, or any officer appointed by the President, may be removed by the directors whenever in their judgment the best interests of the corporation would be served thereby, but such removal shall be without prejudice to the contract, if any, of the person so removed. Any officer appointed by the President may be removed by the President whenever in his judgment the best interests of the corporation would be served thereby, but such removal shall be without prejudice to the contract, if any, of the person so removed. 4. VACANCIES. A vacancy in any office because of death, resignation, removal, disqualification or otherwise of an officer elected or appointed by the directors may be filled by the directors for the unexpired portion of the term. A vacancy in any office because of death, resignation, removal, disqualification or otherwise of any officer appointed by the President may be filled by the President for the unexpired portion of the term. 4A. CHAIRMAN OF THE BOARD. The Chairman of the Board shall preside, when present, at all meetings of the Board of Directors and at all meetings of the stockholders and will perform such other duties as may be prescribed from time to time by the Board or these By-laws. 4B. VICE CHAIRMAN OF THE BOARD. In the absence of the Chairman of the Board or in the event of his death, inability or refusal to act, the Vice Chairman of the Board shall perform the duties of the Chairman of the Board and, when so acting, shall have all the powers of and be subject to all the restrictions on the Chairman of the Board. The Vice Chairman of the Board shall perform such other duties as may be prescribed from time to time by the Board or these by-laws. Notwithstanding any other provisions of these By-laws, the Vice Chairman of the Board, acting in any capacity, shall not have the power to call any special meeting of the Stockholders. 5. PRESIDENT. The President shall be the chief executive officer of the corporation and, subject to the control of the Board of Directors, shall have general and active management of the business of the corporation, and shall see that all orders and resolutions of the Board and stockholders are carried into effect. He shall have the general authority to execute bonds, deeds and contracts, in the name of the corporation and affix the corporate seal thereto; to sign stock certificates; to cause the employment or appointment of such employees and agents of the corporation as the proper conduct of operations may require, and to fix their compensation, subject to the provisions of these By-laws; to remove or suspend any employee or agent who shall have been employed or appointed under his authority or under authority of an officer subordinate to him; and, in general, to exercise all the powers and authority usually appertaining to the chief executive officer of a corporation. 6. VICE-PRESIDENT. In the absence of the president or in the event of his death, inability or refusal to act, one of the vice-presidents designated by the directors shall perform the duties of the president, and when so acting, shall have all the powers of and be subject to all the restrictions upon the president. The vice-president shall perform such other duties as from time to time may be assigned to him by the president or by the directors. 7. SECRETARY. The secretary shall keep the minutes of the stockholders' and of the directors' meetings in one or more books provided for that purpose, see that all notices are duly given in accordance with the provisions of these by-laws or, as required, be custodian of the corporate records and of the seal of the corporation and keep a register of the post office address of each stockholder which shall be furnished to the secretary by such stockholder, have general charge of the stock transfer books of the corporation and in general perform all duties incident to the office of secretary and such other duties as from time to time may be assigned to him by the president or by the directors. 8. TREASURER. If required by the directors, the treasurer shall give a bond for the faithful discharge of his duties in such sum and with such surety or sureties as the directors shall determine. He shall have charge and custody of and be responsible for all funds and securities of the corporation; receive and give receipts for monies due and payable to the corporation from any source, whatsoever, and deposit all such monies in the name of corporation in such banks, trust companies or other depositories as shall be selected in accordance with these by-laws and in general perform all of the duties incident to the office of treasurer and such other duties as from time to time may be assigned to him by the president or by the directors. 9. SALARIES. The salaries of those officers elected or appointed by the directors shall be fixed from time to time by the directors and no officer shall be prevented from receiving such salary by reason of the fact that he is also a director of the corporation. ARTICLE V - CONTRACTS, LOANS, CHECKS AND DEPOSITS 1. CONTRACTS. The directors may authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances. The President may authorize any contracting officer appointed by him pursuant to Section 1 of Article IV to enter into any pipeline rehabilitation contract in the ordinary course of business of the corporation, or execute and deliver any instrument in connection therewith, in the name and on behalf of the corporation. 2. LOANS. No loans shall be contracted on behalf of the corporation and no evidences of indebtedness shall be issued in its name unless authorized by a resolution of the directors. Such authority may be general or confined to specific instances. 3. CHECKS, DRAFTS, ETC. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the corporation, shall be signed by such officer or officers, agent or agents of the corporation and in such manner as shall from time to time be determined by resolution of the directors. 4. DEPOSITS. All funds of the corporation not otherwise employed shall be deposited from time to time to the credit of the corporation in such banks, trust companies or other depositaries as the directors may select. ARTICLE VI - CERTIFICATES FOR SHARES AND THEIR TRANSFER 1. CERTIFICATES FOR SHARES. Certificates representing shares of the corporation shall be in such form as shall be determined by the directors. Such certificates shall be signed by any of the chairman of the board, or the president, as authorized by the directors and the secretary, or such other officers authorized by law and by the directors. All certificates for shares shall be consecutively numbered or otherwise identified. The name and address of the stockholders, the number of shares and date of issue, shall be entered on the stock transfer books of the corporation. All certificates surrendered to the corporation for transfer shall be cancelled and no new certificate shall be issued until the former certificate for a like number of shares shall have been surrendered and cancelled, except that in case of a lost, destroyed or mutilated certificate a new one may be issued therefor upon such terms and indemnity to the corporation as the directors may prescribe. 2. TRANSFERS OF SHARES. (a) Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, and cancel the old certificate; every such transfer shall be entered on the transfer book of the corporation which shall be kept at its principal office. (b) The corporation shall be entitled to treat the holder of record of any share as the holder in fact thereof, and, accordingly, shall not be bound to recognized any equitable or other claim to or interest in such share on the part of any other person whether or not it shall have express or other notice thereof, except as expressly provided by the laws of this state. ARTICLE VII - FISCAL YEAR The fiscal year of the corporation shall begin on the first day of January in each year. ARTICLE VIII - DIVIDENDS The directors may from time to time declare, and the corporation may pay, dividends on its outstanding shares in the manner and upon the terms and conditions provided by law. ARTICLE IX - SEAL The directors shall provide a corporate seal which shall be circular in form and shall have inscribed thereon the name of the corporation, the state of incorporation, year of incorporation and the words, "Corporate Seal". ARTICLE X - WAIVER OF NOTICE Unless otherwise provided by law, whenever any notice is required to be given to any stockholder or director of the corporation under the provisions of these by-laws or under the provisions of the articles of incorporation, a waiver thereof in writing, signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. ARTICLE XI - AMENDMENTS Except as otherwise provided by law, the Board of Directors may adopt, alter, amend or repeal the by-laws of the Corporation, provided, however, that the stockholders, representing a majority of all the shares issued and outstanding at any annual stock holders' meeting or at any special stockholders' meeting, may repeal, alter or amend by-laws adopted by the Board or Directors and may adopt new by-laws; provided, further, however, that the size of the Board of Directors, as set forth in Section 2 of Article III, may only be amended by a vote of at least 80% of the members of the Board of Directors or by a vote of the stockholders, representing a majority of all of the shares issued and outstanding, at any annual stockholders' meeting or at any special stockholders' meeting provided, further, however, that the provisions of Sections 8 and 14 of Article III may only be amended by a unanimous vote of the members of the board of directors or by a vote of the stockholders, representing a majority of all of the shares issued and outstanding, at any annual stockholders' meeting or at any special stockholders' meeting. EX-27 4
5 Exhibit 27 (FDS) Filed with Form 10-Q 3-MOS DEC-31-1999 JUN-30-1999 65,258 1 46,634 2,899 9,714 157,046 53,797 69,373 297,221 47,391 0 0 0 275 133,150 297,221 8,497 156,802 5,589 103,058 31,983 0 4,444 18,862 7,699 10,643 0 0 0 10,643 0.41 0.41
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