As we anticipated, the strong U.S. dollar and the Asian economic crisis had a negative impact. What we did not expect was the level of reduction in inventories at dealers in the United States and Europe.

These products all draw on Polaroid's heritage for innovation, ease-of-use, fun and immediacy.

The next 12 months will be unmatched in Polaroid history for number and breadth of new products coming to the market.

August retail results were up in both cameras and film. In addition, the company continues to make progress in reducing its digital imaging losses.

We remain on plan to begin rolling out a number of new products, including our instant single-use camera in the second half of 1998. We are confident that 1999 will be one of the company's strongest in recent years.

I am particularly pleased that all of the members of our bank group agreed to remain lenders to Polaroid and support our strategic plan of improving profitability by successfully introducing innovative new products into the marketplace.