-----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, Ljr0tjzkSKm2CinzjiB/oAeTOWfxWVnMI0mmmpmtc3HhjWB06CntXmDS6jHBkaWU jDajCGmhgjupDV+A7q7ZbA== 0000950129-97-004554.txt : 19971110 0000950129-97-004554.hdr.sgml : 19971110 ACCESSION NUMBER: 0000950129-97-004554 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971107 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: KRUG INTERNATIONAL CORP CENTRAL INDEX KEY: 0000096793 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMMERCIAL PHYSICAL & BIOLOGICAL RESEARCH [8731] IRS NUMBER: 310621189 STATE OF INCORPORATION: OH FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-12607 FILM NUMBER: 97710400 BUSINESS ADDRESS: STREET 1: 1290 HERCULES DR STREET 2: STE 120 CITY: HOUSTON STATE: TX ZIP: 77058 BUSINESS PHONE: 5132249066 MAIL ADDRESS: STREET 1: 6 NORTRH MAIN ST SUITE 500 STREET 2: 6 NORTRH MAIN ST SUITE 500 CITY: DAYTON STATE: OH ZIP: 45402 FORMER COMPANY: FORMER CONFORMED NAME: TECHNOLOGY INC DATE OF NAME CHANGE: 19860803 FORMER COMPANY: FORMER CONFORMED NAME: COMANCO INDUSTRIES INC DATE OF NAME CHANGE: 19710719 10-Q 1 KRUG INTERNATIONAL CORP. 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO .................... .................... COMMISSION FILE NUMBER 0-2901 KRUG INTERNATIONAL CORP. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) Ohio 31-0621189 --------- ------------- (STATE OR OTHER JURISDICTION OF INCORPORATION (I.R.S. EMPLOYER OR ORGANIZATION) IDENTIFICATION NO.) 1290 Hercules Drive Suite 120 Houston, Texas 77058 - ---------------------------------------------- ------ (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) (281)212-1233 ------------- (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filings requirements for the past 90 days. Yes X No --- --- The number of Common Shares, without par value, outstanding as of October 29, 1997 was 5,169,419. 2 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS
KRUG INTERNATIONAL CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (dollars in thousands) September 30, March 31, 1997 1997 ---- ---- ASSETS Current Assets: Cash $ 2,164 $ 105 Receivables - net 20,894 21,631 Inventories (Note C) 10,059 11,103 Prepaid expenses 1,300 1,058 ------- ------- Total Current Assets 34,417 33,897 ------- ------- Property, Plant and Equipment 19,044 18,488 Less accumulated depreciation 8,270 7,650 ------- ------- 10,774 10,838 ------- ------- Pension Asset 2,971 2,966 Deferred Tax Assets 1,024 2,041 Other Assets 363 225 ------- ------- Total Assets $49,549 $49,967 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Bank borrowings $ $ 1,161 Accounts payable 10,652 11,650 Accrued expenses 6,188 6,176 Income taxes 452 451 Net current liabilities of discontinued operations (Note F) 450 450 Current maturities of long-term debt 2,771 2,922 ------- ------- Total Current Liabilities 20,513 22,810 ------- ------- Long-Term Debt 9,428 9,173 Net Non-Current Liabilities of Discontinued Operations (Note F) 24 ------- ------- Total Liabilities 29,941 32,007 ------- ------- Shareholders' Equity: Common Shares, no par value: issued and outstanding, 5,169,419 at September 30, 1997 and 5,151,206 at March 31, 1997 2,585 2,576 Additional paid-in capital 4,447 4,399 Retained earnings 11,821 9,966 Foreign currency translation adjustment 755 1,019 ------- ------- Total Shareholders' Equity 19,608 17,960 ------- ------- Total Liabilities and Shareholders' Equity $49,549 $49,967 ======= =======
See notes to condensed consolidated financial statements 3 KRUG INTERNATIONAL CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (in thousands, except per share amounts)
THREE MONTHS ENDED September 30, 1997 1996 -------------------- Revenues $30,684 $26,669 Costs and Expenses: Costs of goods sold 26,677 23,250 Selling and administrative 2,621 2,298 Restructuring charge (Note E) 800 Interest expense 223 231 Other income - net 48 7 ------- ------- 29,473 26,572 ------- ------- Earnings before Income Taxes 1,211 97 Income Taxes (Note D) 440 13 ------- ------- Net Earnings $ 771 $ 84 ======= ======= Net Earnings Per Share $ 0.15 $ 0.02 ======= ======= Average Common and Common Equivalent Shares Outstanding 5,196 5,210 ======= =======
See notes to condensed consolidated financial statements 4 KRUG INTERNATIONAL CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (in thousands, except per share amounts)
SIX MONTHS ENDED September 30, 1997 1996 -------------------- Revenues $61,192 $53,176 Costs and Expenses: Costs of goods sold 52,734 45,692 Selling and administrative 5,095 4,566 Restructuring charge (Note E) 800 Interest expense 541 521 Other income - net 52 71 ------- ------- 58,318 51,508 ------- ------- Earnings before Income Taxes 2,874 1,668 Income Taxes (Note F) 1,018 535 ------- ------- Net Earnings $ 1,856 $ 1,133 ======= ======= Net Earnings Per Share $ 0.36 $ 0.22 ======= ======= Average Common and Common Equivalent Shares Outstanding 5,189 5,192 ======= =======
See notes to condensed consolidated financial statements 5 KRUG INTERNATIONAL CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
SIX MONTHS ENDED September 30, 1997 1996 --------------------- Net Cash Provided by Operating Activities $ 3,794 $ 5,246 ------- ------- Cash Flows From Investing Activities: Expenditures for property, plant and equipment (519) (249) Proceeds from sale of assets 85 5 ------- ------- Net Cash Used in Investing Activities (434) (244) ------- ------- Cash Flows From Financing Activities: Bank borrowings - net (1,157) (31) Payments on long-term debt (181) (642) Sale of Common Shares under Options 57 212 ------- ------- Net Cash Used in Financing Activities (1,281) (461) ------- ------- Effect of Exchange Rate Changes on Cash (20) 65 ------- ------- Net Increase in Cash 2,059 4,606 Cash at Beginning of Period 105 439 ------- ------- Cash at End of Period $ 2,164 $ 5,045 ======= ======= Cash Paid For: Income Taxes $ -- $ -- ======= ======= Interest $ 611 $ 658 ======= ======= Non-Cash Investing and Financing Activities- Capital leases $ 367 $ 132 ======= =======
See notes to condensed consolidated financial statements 6 KRUG INTERNATIONAL CORP. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS THREE MONTHS ENDED SEPTEMBER 30, 1997 (DOLLARS IN THOUSANDS) NOTE A -- BASIS OF PRESENTATION The unaudited Condensed Consolidated Financial Statements for the three and six months ended September 30, 1997 have been prepared in accordance with Rule 10-01 of Regulation S-X of the Securities and Exchange Commission and, as such, do not include all information required by generally accepted accounting principles. These Condensed Consolidated Financial Statements should be read in conjunction with the consolidated financial statements included in the Corporation's Annual Report on Form 10-K filed on June 16, 1997. In the opinion of management, the Condensed Consolidated Financial Statements include all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the financial position and results of operations for the periods indicated. The results of operations for the three and six months ended September 30, 1997 are not necessarily indicative of the results that may be expected for the entire fiscal year or any interim period. NOTE B-- ACQUISITION OF KLIPPAN LIMITED On October 2, 1997, the Corporation's U.K. housewares and child safety subsidiary purchased all the issued capital shares of Klippan Limited, a manufacturer of child safety seats and accessories in the United Kingdom and Scandinavia, for a purchase price of approximately $3.7 million. The acquisition was financed under the Corporation's U.K. bank credit facility. NOTE C-- INVENTORIES
Sept. 30, March 31, 1997 1997 ---------- -------- Finished goods $ 7,541 $ 8,171 Work-in-process 845 1,291 Raw materials and supplies 1,673 1,641 ---------- -------- $ 10,059 $ 11,103 ========== ========
NOTE D-- INCOME TAXES The provision for income taxes is composed of the following:
Three Months Ended September 30, 1997 1996 - --------------------------------- -------- ------- Domestic $ 72 $ (237) Foreign 368 250 -------- ------- $ 440 $ 13 ======== =======
7 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE D-- INCOME TAXES (CONTINUED)
Six Months Ended September 30, 1997 1996 - ------------------------------ -------- -------- Domestic $ 89 $ (172) Foreign 929 707 -------- ------- $ 1,018 $ 535 -------- -------
NOTE E -- RESTRUCTURING CHARGE In September 1996, the Corporation closed its executive offices in Dayton, Ohio and consolidated its headquarters activities with its primary operations facility adjacent to the NASA Johnson Space Center in Houston, Texas. A restructuring charge of $800 was recorded for such office consolidation during the quarter ended September 30, 1996. The charge consisted primarily of estimated costs relating to severance for six employees and rent and other costs related to the vacated offices in Dayton, Ohio. In the fourth quarter of fiscal 1997, the Corporation recorded a credit to the restructuring charge of $270 after successfully subleasing the vacated offices. At September 30, 1997, accrued expenses included the accrued restructuring charge of $262 which relates primarily to rent (net of expected sublease rental income) and other expenses payable through June 1999, the lease termination date of the offices vacated by the Corporation. NOTE F -- DISCONTINUED OPERATIONS In prior years, the Corporation discontinued the operations and disposed of substantially all of the net assets of its Industrial Segment. Remaining obligations related to this Segment include leased property in Knoxville, Tennessee and in Toronto, Canada, and product liability claims related to products sold prior to the disposal of the Industrial Segment. NOTE G -- RECENT ACCOUNTING STANDARDS In February 1997, Statement of Financial Accounting Standards No. 128, "Earnings per Share" ("SFAS No. 128") was issued. This statement requires dual presentation of basic and diluted earnings per share on the face of the statement of earnings for entities with complex capital structures. SFAS No. 128 is effective for financial statements for periods ending after December 15, 1997, including interim periods. Implementation of this pronouncement is not expected to have a material effect on reported earnings per share. In June 1997, SFAS No. 130, "Reporting Comprehensive Income" ("SFAS No. 130") was issued. This statement requires that all components of comprehensive income and total comprehensive income be reported on one of the following: (1) the statement of operations, (2) the statement of shareholders' equity or (3) a new separate statement of comprehensive income. Comprehensive income is comprised of net income and all changes to shareholders' equity, except for those due to investments by owners (changes in paid in capital) and distributions to owners (dividends). This statement is effective for fiscal years beginning after December 15, 1997 although earlier application is permitted. SFAS No. 130 does not change the current accounting treatment for components of comprehensive income (i.e. changes in unrealized gains or losses on securities). Implementation of SFAS No. 130 is not expected to have a material impact on the Corporation's Consolidated Financial Statements. In June 1997, SFAS No. 131, "Disclosure and Segments of an Enterprise and Related Information" ("SFAS No. 131") was issued. This statement requires public companies to report certain 8 NOTE G -- RECENT ACCOUNTING STANDARDS (CONTINUED) information about their operating segments in their annual financial statements and quarterly reports issued to shareholders. It also requires public companies to report certain information about their products and services, the geographic areas in which they operate and their major customers. This statement is effective for fiscal years beginning after December 15, 1997 although earlier application is encouraged. Implementation of SFAS No. 131 is not expected to have a material effect on the Corporation's Consolidated Financial Statements. 9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FINANCIAL SUMMARY
THREE MONTHS ENDED SIX MONTHS ENDED September 30, September 30, ------- ------- ------- ------- 1997 1996 1997 1996 ------- ------- ------- ------- REVENUES: Leisure Marine $ 8,038 $ 6,404 $18,841 $16,058 Housewares and Child Safety 10,525 6,921 20,120 13,493 Life Sciences and Engineering 12,121 13,344 22,231 23,625 ------- ------- ------- ------- $30,684 $26,669 $61,192 $53,176 ======= ======= ======= ======= OPERATING PROFIT: Leisure Marine $ 794 $ 523 $ 2,261 $ 1,690 Housewares and Child Safety 84 164 195 305 Life Sciences and Engineering 921 846 1,613 1,661 ------- ------- ------- ------- 1,799 1,533 4,069 3,656 Corporate expense (413) (412) (706) (738) ------- ------- ------- ------- Operating profit 1,386 1,121 3,363 2,918 Restructuring charge (800) (800) Other income - net 48 7 52 71 Interest expense (223) (231) (541) (521) ------- ------- ------- ------- Earnings before Income Taxes $ 1,211 $ 97 $ 2,874 $ 1,668 ======= ======= ======= ======= CAPITAL ADDITIONS: Leisure Marine $ 20 $ 0 $ 20 $ 12 Housewares and Child Safety 285 110 483 172 Life Sciences and Engineering 0 51 16 65 ------- ------- ------- ------- $ 305 $ 161 $ 519 $ 249 ======= ======= ======= =======
RESULTS OF OPERATIONS Second quarter revenues for fiscal 1998 of $30.7 million increased by $4.0 million or 15% from the comparable quarter of fiscal 1997. The U.K. Leisure Marine Segment revenue increased by $1.6 million from the same period in fiscal 1997. A $1.3 million increase in sales volume, resulting from increased chandlery, personal watercraft and outboard engine sales, and $0.3 million favorable effect of foreign currency translation combined for the increase in revenues. The U.K. Houseswares and Child Safety Products Segment revenue increased $3.6 million from the comparable period of fiscal 1997. Of this increase, $2.8 million was due to revenues of Hago Products Limited (Hago) which was acquired on October 31, 1996, $0.4 was due to the favorable effect of foreign currency translation and $0.4 was due to increases in sales volume. Sales volume in child safety gates and wire airers increased while ladders decreased. The Life Sciences and Engineering Segment (LS&E) revenue decreased $1.2 million from the second quarter of fiscal 1997. Decreased material purchases under contracts with the U.S. Air Force resulted in the decreased LS&E revenue. Revenues for the second half of fiscal 1998 increased by $8.0 million to $61.2 million or 15% from $53.2 million in the first half of fiscal 1997. The Leisure Marine Segment revenue increased by $2.8 million or 17% from the same period of fiscal 1997. A $1.7 million increase in sales volume, resulting from increased chandlery and personal watercraft sales offset somewhat by decreased inboard engine sales, and $1.1 million favorable effect of foreign currency translation combined for the increase in revenues. The 10 Housewares and Child Safety Products Segment revenue increased by $6.6 million from the comparable period of fiscal 1997. Of this increase, $5.2 million was due to the revenues of Hago, $0.9 million was due to the favorable foreign currency translation and $0.5 was due to increased volume. Sales volume in child safety gates, garden products and wire airers increased while ladder sales decreased. The LS&E Segment revenue decreased by $1.4 million in the first half of fiscal 1998 as compared to fiscal 1997. Decreased material purchases offset partially by increased subcontract support services provided under contracts with the NASA Johnson Space Center and the U.S. Air Force resulted in the decreased LS&E revenue. The LS&E order backlog at September 30, 1997 was $136.0 million compared with $106.9 million at March 31, 1997 and $42.6 million at September 30, 1996. In June 1997, KRUG Life Sciences Inc. (KLSI) was awarded a new five-year, $40.1 million NASA contract for biotechnology and bioengineering services with NASA at the Johnson Space Center. A total of approximately $110 million of order backlog relating to three NASA contracts has been awarded since the beginning of calendar 1997. Operating profit (revenues less cost of goods sold and selling and administrative expenses) increased $0.27 million or approximately 23% in the second quarter of fiscal 1998 over the same quarter of the previous year due primarily to increased operating profit in the Leisure Marine and LS&E Segments. The increased Leisure Marine Segment profit resulted from increased chandlery, personal watercraft and outboard engine sales and increased margins on outboard engine and engine parts sales. Operating profit of the LS&E Segment increased due to increased award fees on NASA contracts in the current year. For the six months ended September 30, 1997, operating profit increased $0.45 million or 15% from the first six months of fiscal 1997 due to increased operating profit in the Leisure Marine Segment. The Segment's increased sales and increased margins on all product groups resulted in the increased operating profit. Selling and administrative expenses for the second quarter of fiscal 1997 increased by $0.3 million as compared to the same period of the prior fiscal year. For the six months ended September 30, 1997, these expenses increased $0.2 million from the prior year. The increased selling and administrative expenses are due to increased Leisure Marine Segment selling expenses resulting from the increased volume and the addition of Hago in the current year. In September 1996, the Corporation closed its executive offices in Dayton, Ohio and consolidated its headquarters activities with its primary operations facility adjacent to the NASA Johnson Center in Houston, Texas. A pre-tax restructuring charge of $0.8 million was recorded for costs related to the office consolidation in the second quarter of fiscal 1997. Interest expense for the second quarter and first six months of fiscal 1998 was substantially unchanged from the comparable periods of fiscal 1997. Net earnings were $0.77 million for the second quarter of fiscal 1998 compared to $0.08 million for the comparable period of fiscal 1997. The increase in earnings in the current year is due to increased operating profit of the Leisure Marine and LS&E Segments and the non-recurring $0.8 million pre-tax restructuring charge recorded in the second quarter of fiscal 1997. Net earnings for the six months ended September 30, 1997 were $1.86 million compared to $1.13 million in the prior year. Similar to the increase in second quarter net earnings, the increase for the six months period in the current year is due to the increased profitability of the Leisure Marine Segment and the restructuring charge in the prior year's quarter. DISCONTINUED OPERATIONS The adequacy of the provision for losses related to the discontinued Industrial Segment was reviewed by the Corporation during the first six months of fiscal 1998 and no changes were deemed appropriate. 11 LIQUIDITY AND CAPITAL RESOURCES Under the Corporation's revolving credit facility with a U.S. business credit corporation, the Corporation had a loan outstanding of $4.2 million at September 30, 1997. Availability under the revolving credit facility is based upon the amount of billed and unbilled U.S. accounts receivable and is limited to a maximum of $10.0 million. The credit facility expires March 15, 2000. At September 30, 1997, the Corporation had a $1.6 million mortgage loan outstanding on its Dayton, Ohio real property. The mortgage loan was provided by five U.S. banks and matures on March 31, 1998. The Dayton, Ohio real property is presently being offered for sale. The Corporation's U.K. subsidiaries at September 30, 1997 had two term loans outstanding totaling $5.2 million. The term loans require quarterly principal payments and mature in fiscal 2005. In addition, the Corporation had an unused line of credit of $4.0 million available at September 30, 1997 for its U.K. subsidiaries. In October 1997, the Corporation acquired Klippan Limited, a manufacturer of child safety seats and accessories in the United Kingdom and Scandinavia for a purchase price of approximately $3.7 million. Funds for the purchase were provided by the Corporation's U.K. bank credit facility. The Corporation believes it has adequate financing in both the U.S. and U.K. to support its current level of operations. During the first six months of fiscal 1998, the Corporation expended $0.52 million for capital additions compared to $0.25 million for the comparable quarter in fiscal 1997. Capital additions were primarily for machinery and equipment purchases by the Corporation's Housewares and Child Safety Segment. The Corporation generated $3.8 million from operating activities in the first six months of fiscal 1998 compared to $5.2 million for the first six months of fiscal 1997. The reduction in cash generated in the current year is due to increased working capital requirements in both the U.S. and U.K. The U.S. operations had higher outstanding billings to the U.S. government at the end of September and the U.K. operations had higher accounts receivable resulting from increased revenues in the current year. CERTAIN CAUTIONARY STATEMENTS In addition to historical information, Item 2 of this document contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 which may include, without limitation, statements regarding management's outlook for each of its businesses and the sufficiency of the Corporation's liquidity and sources of capital. These forward-looking statements are subject to certain risks, uncertainties and other factors which could cause actual results to differ materially from those anticipated, including, without limitation, restrictions imposed by debt agreements, competition in the Housewares and Leisure Marine businesses and for government services provided by the Life Sciences and Engineering Segment, governmental and budgetary constraints, the regulatory environment for the Corporation's businesses, consolidation trends in the Corporation's businesses, competition in the acquisition market, changes in exchange rates, increases in raw material prices, the purchasing practices of significant customers, the availability of qualified management and staff personnel in each business segment and claims for product liability from continuing and discontinued operations. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable. 12 PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (A) Exhibit 27 - Financial Data Schedule (B) Reports on Form 8-K - The Corporation filed a report on Form 8-K on October 17, 1997 reporting Item 2 - Acquisition or Disposition of Assets relating to the acquisition of Klippan Limited by Bradley International Holdings Limited, a wholly-owned subsidiary of the Corporation. 13 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, KRUG International Corp. has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. KRUG International Corp. By: /s/ Robert M. Ellis ------------------------------ Robert M. Ellis Principal Accounting Officer Dated : November 7, 1997 14 INDEX TO EXHIBITS (A) Exhibit 27 - Financial Data Schedule (B) Reports on Form 8-K - The Corporation filed a report on Form 8-K on October 17, 1997 reporting Item 2 - Acquisition or Disposition of Assets relating to the acquisition of Klippan Limited by Bradley International Holdings Limited, a wholly-owned subsidiary of the Corporation. EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 6-MOS MAR-31-1998 SEP-30-1997 2,164 0 21,816 922 10,059 34,417 19,044 8,270 49,549 20,513 9,428 0 0 2,585 17,023 49,549 61,192 61,192 57,829 57,829 0 0 541 2,874 1,018 1,856 0 0 0 1,856 .36 .36
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