-----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, LQDqoar7PXVwm9oy2xtgbAOD/4ac6+eR0fhy/2xaMGfjstEnLIWFo5CL0f+A+YMo +vsgTnDPzNfA+Jpcu+F+pQ== 0000034563-04-000066.txt : 20041110 0000034563-04-000066.hdr.sgml : 20041110 20041109163649 ACCESSION NUMBER: 0000034563-04-000066 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20040930 FILED AS OF DATE: 20041109 DATE AS OF CHANGE: 20041109 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FARMER BROTHERS CO CENTRAL INDEX KEY: 0000034563 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS FOOD PREPARATIONS & KINDRED PRODUCTS [2090] IRS NUMBER: 950725980 STATE OF INCORPORATION: CA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-01375 FILM NUMBER: 041130081 BUSINESS ADDRESS: STREET 1: 20333 S NORMANDIE AVE CITY: TORRANCE STATE: CA ZIP: 90502 BUSINESS PHONE: 3107875200 MAIL ADDRESS: STREET 1: 20333 SOUTH NORMANDIE AVENUE CITY: TORRANCE STATE: CA ZIP: 90502 10-Q 1 sep10q904.txt 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 QUARTRLY PERIOD ENDED SEPTEMBER 30, 2004 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: 0-1375 FARMER BROS. CO. (exact name of registrant as specified in its charter) Delaware 95-0725980 (State of Incorporation) (I.R.S. Employer Identification No.) 20333 South Normandie Avenue, Torrance, California 90502 (address of principal executive offices) (Zip Code) (310)787-5200 (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 filing requirements for the past 90 days. YES [X] NO [ ] Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). YES [X] NO [ ] On November 5, 2004 Registrant had 16,075,080 shares outstanding of its common stock, par value $1.00 per share, which is the registrant's only class of common stock. PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Dollars in thousands, except share and per share data) FARMER BROS. CO. CONSOLIDATED STATEMENTS OF INCOME (Unaudited) For the three months ended September 30, 2004 2003 Net sales $46,708 $45,665 Cost of goods sold 17,469 16,033 Gross profit 29,239 29,632 Selling expense 21,827 22,317 General and administrative expense 6,410 6,258 Operating expenses 28,237 28,575 Income from operations 1,002 1,057 Other income: Dividend income 869 802 Interest income 476 651 Other, net 85 1,572 1,430 3,025 Income before taxes 2,432 4,082 Income taxes 935 1,571 Net income $1,497 $2,511 Net income per share $0.11 $0.14 Weighted average shares outstanding 13,560,800 17,829,280 Dividends declared per share $0.10 $0.09 The accompanying notes are an integral part of these financial statements. FARMER BROS. CO. CONSOLIDATED BALANCE SHEETS September 30, June 30, 2004 2004 ASSETS (Unaudited) Current assets: Cash and cash equivalents $15,985 $21,807 Short term investments 182,417 176,903 Accounts and notes receivable, net 14,831 14,565 Inventories 34,918 35,579 Income tax receivable - - Deferred income taxes 775 408 Prepaid expenses 1,949 2,683 Total current assets $250,875 $252,720 Property, plant and equipment, net 43,056 42,300 Notes receivable 143 143 Other assets 21,515 21,609 Deferred income taxes 1,099 1,099 Total assets $316,688 $317,871 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $7,717 $9,589 Accrued payroll expenses 5,251 6,999 Other 4,864 4,601 Total current liabilities $17,832 $21,189 Accrued postretirement benefits $27,487 $26,984 Total Liabilities $45,319 $48,173 Commitments and contingencies Shareholders' equity: Common stock, $1.00 par value, authorized 20,000,000 shares; $16,075 $16,075 16,075,080 issued and outstanding Additional paid-in capital 32,300 32,248 Retained earnings 283,803 283,654 Unearned ESOP shares (60,072) (61,542) Less accumulated comprehensive loss (737) (737) Total shareholders' equity $271,369 $269,698 Total liabilities and shareholders' equity $316,688 $317,871 The accompanying notes are an integral part of these financial statements. FARMER BROS. CO. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) For the three months ended September 30, 2004 2003 Cash flows from operating activities: Net income $1,497 $2,511 Adjustments to reconcile net income to net cash (used in) provided by operating activities: Depreciation 1,894 1,745 Loss on sales of assets (11) (30) ESOP compensation expense 1,522 1,217 Net loss on investments ( 75) (1,508) Change in assets and liabilities: Short term investments (5,440) 8,632 Accounts and notes receivable (277) 969 Inventories 661 97 Income tax receivable 408 1,540 Prepaid expenses and other assets 828 865 Accounts payable (1,872) 966 Accrued payroll and expenses and other (1,485) (1,960) Accrued postretirement benefits 503 136 Other long term liabilities - 411 Total adjustments (3,344) 13,080 Net cash (used in) provided by Operating activities ($1,847) $15,591 Cash flows from investing activities: Purchases of property, plant and equipment (2,678) (1,864) Proceeds from sales of property, plant and equipment 39 30 Notes repaid 11 10 Net cash used in investing activities (2,628) (1,824) Cash flows from financing activities: Dividends paid (1,347) (1,699) Cash used in financing activities (1,347) (1,699) Net (decrease) increase in cash and Cash equivalents (5,822) 12,068 Cash and cash equivalents at beginning of period 21,807 19,961 Cash and cash equivalents at end of period $15,985 $32,029 Supplemental disclosure of cash flow information: Income tax payments $155 $32 The accompanying notes are an integral part of these financial statements. Notes to Consolidated Financial Statements (Unaudited) Note 1. Unaudited Financial Statements The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended September 30, 2004 are not necessarily indicative of the results that may be expected for the year ended June 30, 2005. The balance sheet at June 30, 2004 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Farmer Bros Co. annual report on Form 10-K for the year ended June 30, 2004. Per share amounts included in the accompanying consolidated financial statements and in the notes to the consolidated financial statements have been retroactively adjusted for all periods presented to reflect a ten-for one stock split in May 2004. Note 2. Investments Investments are as follows (in thousands): September 30, June 30, 2004 2004 Trading securities at fair value U.S. Treasury obligations $124,472 $119,528 Preferred stock 58,481 56,037 Futures, options and other derivative investments (536) 1,338 $182,417 $176,903 Note 3. Inventories (in thousands) September 30, 2004 Processed Unprocessed Total Coffee $ 2,849 $10,767 $13,616 Allied products 11,085 4,328 15,413 Coffee brewing equipment 2,278 3,611 5,889 $16,212 $18,706 $34,918 June 30, 2004 Processed Unprocessed Total Coffee $ 3,034 $10,736 $13,770 Allied products 11,800 3,665 15,465 Coffee brewing equipment 2,341 4,003 6,344 $17,175 $18,404 $35,579 Interim LIFO Calculations An actual valuation of inventory under the LIFO method can be made only at the end of each year based on the inventory levels and costs at that time. Accordingly, interim LIFO calculations must necessarily be based on management's estimates of expected year-end inventory levels and costs. Because these are subject to many forces beyond management's control, interim results are subject to the final year-end LIFO inventory valuation. Note 4. Pension Plans The Company has a contributory defined benefit pension plan for all employees not covered under a collective bargaining agreement and a non-contributory defined benefit plan for certain hourly employees covered under a collective bargaining agreement. The net periodic pension costs for the defined benefit plans were as follows: Components of Net Periodic Benefit Cost (in thousands) Three months ended September 30 2004 2003 Service cost $529 $594 Interest cost 1,071 988 Expected return on plan assets (1,559) (1,362) Amortization of transition obligation (asset) 0 0 Amortization of prior service cost 46 62 Amortization of net (gain) loss 18 336 Net periodic benefit cost $105 $2,621 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Liquidity and Financial Condition There have been no material changes in the Company's liquidity or financial condition since the year ended June 30, 2004. (in thousands) September 30, June 30, 2004 2004 Current assets $250,875 $252,720 Current liabilities 17,832 $ 21,189 Working capital $233,043 $231,531 Total assets $316,688 $317,871 All present and future liquidity needs are expected to be met by internal sources. The Company tries not to rely on banks or other third parties for its working capital and other liquidity needs. There have been no changes in the needs or commitments described in the Company's Annual Report on Form 10-K. Results of Operations The operating trends discussed in the Form 10-K for fiscal 2004 have continued into the first quarter of fiscal 2005. Net sales showed limited improvement and increased 2% in the first quarter of fiscal 2005 to $46,708,000 as compared to $45,665,000 in the same quarter of fiscal 2004. Gross profit decreased 2% to $29,239,000 in the fiscal quarter ended September 30, 2004 as compared to $29,632,000 in the same quarter of fiscal 2004. The average cost of green coffee during the first quarter of fiscal 2005 has decreased 3% as compared to the average cost of green coffee during the quarter ended June 30, 2004, but costs are 16% higher than the average cost of green coffee for the fiscal quarter ended September 30, 2003. Operating expenses, consisting of selling and general and administrative expenses, decreased 1% in the first quarter of fiscal 2005 to $28,237,000 as compared to $28,575,000 in the same quarter of fiscal 2004. Other income in the first quarter of fiscal 2005 decreased 53% to $1,430,000 from $3,025,000 in the first quarter of fiscal 2004. Interest rate and green coffee market volatility can cause fluctuations in other income. Gross realized gains and losses at September 30, 2004 were $931,000 and ($1,746,000), respectively, as compared to $4,362,000 and ($19,000), respectively, in the same quarter of the prior fiscal year. Net unrealized gains (losses) at September 30, 2004 were $740,000 as compared to ($2,835,000) at September 30, 2003. As the result of the above mentioned factors, net income for the first quarter of fiscal 2005 decreased 44% to $1,497,000 or $0.11 per share, as compared to $2,511,000, or $0.14 per share, for the first quarter of fiscal 2004. Quarterly Summary of Results (in thousands of dollars): 9/30/03 12/31/03 3/31/04 6/30/04 9/30/04 Net sales $45,665 $51,511 $49,069 $47,344 $46,708 Gross profit $29,632 $32,573 $30,581 $29,398 $29,239 Income from operations $1,057 $3,124 $743 ($1,161) $1,002 Net income $2,511 $2,565 $5,603 $2,008 $1,497 Net income per common share $0.14 $0.15 $0.42 $0.11 $0.11 Forward Looking Statements Certain statements contained in this Quarterly Report on Form 10-Q regarding the risks, circumstances and financial trends that may affect our future operating results, financial position and cash flows may be forward-looking statements within the meaning of federal securities laws. These statements are based on management's current expectations, assumptions, estimates and observations about our business and are subject to risks and uncertainties. As a result, actual results could materially differ from the forward looking statements contained herein. These forward looking statements can be identified by the use of words like "expects," "plans," "believes," "intends," "will," "assumes" and other words of similar meanings. These and other similar words can be identified by the fact that they do not relate solely to historical or current facts. While we believe our assumptions are reasonable, we caution that it is impossible to predict the impact of such factors which could cause actual results to differ materially from predicted results. We intend these forward-looking statements to speak only at the time of this report and do not undertake to update or revise these projections as more information becomes available. For these statements, we claim the protection of the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. Item 3. Quantitative and Qualitative Disclosure About Market Risk. Financial Markets We are exposed to market value risk arising from changes in interest rates on our securities portfolio. Our portfolio of investment grade money market instruments includes discount commercial paper, medium term notes, federal agency issues and treasury securities. As of September 30, 2004 over 56% of these funds were invested in instruments with maturities shorter than 90 days. This portfolio's interest rate risk is not hedged and its average maturity is approximately 84 days. A 100 basis point increase in the general level of interest rates would result in a change in the market value of the portfolio of approximately $1,200,000. Our portfolio of preferred securities includes investments in derivatives that provide a natural economic hedge of interest rate risk. We review the interest rate sensitivity of these securities and (a) enter into "short positions" in futures contracts on U.S. Treasury securities or (b) hold put options on such futures contracts in order to reduce the impact of certain interest rate changes on such preferred stocks. Specifically, we attempt to manage the risk arising from changes in the general level of interest rates. We do not transact in futures contracts or put options for speculative purposes. The following table demonstrates the impact of varying interest rate changes based on the preferred stock holdings, futures and options positions, and market yield and price relationships at September 30, 2004. This table is predicated on an instantaneous change in the general level of interest rates and assumes predictable relationships between the prices of preferred securities holdings, the yields on U.S. Treasury securities and related futures and options. Interest Rate Changes (In thousands) Market Value at September 30, 2004 Change in Market Preferred Futures & Total Value of Total Stock Options Portfolio Portfolio - -150 basis points ("b.p.") $64,571 $0 $64,571 $5,006 - -100 b.p. 63,097 14 63,111 3,545 Unchanged 58,464 1,101 59,566 0 +100 b.p. 52,982 5,754 58,736 ( 830) +150 b.p. 50,303 8,482 58,785 ( 781) The number and type of future and option contracts entered into depends on, among other items, the specific maturity and issuer redemption provisions for each preferred stock held, the slope of the Treasury yield curve, the expected volatility of Treasury yields, and the costs of using futures and/or options. Commodity Price Changes We are exposed to commodity price risk arising from changes in the market price of green coffee. We price our inventory on the LIFO basis. In the normal course of business, we enter into commodity purchase agreements with suppliers and we purchase green coffee contracts. The following table demonstrates the impact of changes in the price of green coffee on inventory and green coffee contracts at September 30, 2004. It assumes an immediate change in the price of green coffee, and the valuations of coffee index futures and put options and relevant commodity purchase agreements at September 30, 2004. Commodity Risk Disclosure (In thousands) Market Value of Coffee Cost Coffee Futures Change in Market Value Change Inventory & Options Totals Derivatives Inventory -20% $10,900 $5,552 $16,452 $5,551 ($2,716) unchanged 13,616 1,198 14,814 - - 20% 16,300 (4,353) 11,947 (5,551) 2,684 At September 30, 2004 the derivatives consisted mainly of commodity futures with maturities shorter than four months. Item 4 Controls & Procedures As of the end of the period covered by this report, the Chief Executive Officer and Chief Financial Officer evaluated the Company's disclosure control and procedures pursuant to Exchange Act Rule 13a-14 and 15d-14. They have concluded that the Company's disclosure controls and procedures are effective in ensuring that all material information required to be filed in this quarterly report has been made known to them in a timely fashion. In addition, there have been no significant changes in the Company's internal controls or in other factors that could significantly affect the Company's internal control over financial reporting. PART II OTHER INFORMATION Item 1. Legal proceedings. not applicable. Item 2. Changes in securities none. Item 3. Defaults upon senior securities. none. Item 4. Submission of matters to a vote of security holders. none. Item 5. Other information none. Item 6. Exhibits and reports on Form 8-K. (a) Exhibits. 31.1 Certification of Chief Executive Officer (Section 302 of Sarbanes-Oxley Act of 2002) (filed herewith) 31.2 Certificate of Chief Financial Officer (Section 302 of Sarbanes-Oxley Act of 2002) (filed herewith) 32.1 Certificate of Chief Executive Officer (Section 906 of Sarbanes-Oxley Act of 2002) (furnished herewith) 32.2 Certification of Chief Financial Officer (Section 906 of Sarbanes-Oxley Act of 2002) (furnished herewith) (b) Reports on Form 8-K. A Form 8-K dated August 3, 2004 and filed with the Commission on August 4, 2004, to announce the retirement of Kenneth R. Carson, Vice President of Sales, and the appointment of Michael J. King as his replacement. A Form 8-K dated August 17, 2004 and filed with the Commission on August 18, 2004, to announce the appointment of Kenneth R. Carson, retired Vice President of Sales, to the Board of Directors. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. FARMER BROS. CO. /s/ Roy E. Farmer Roy E. Farmer, President and Chief Executive Officer and Director (principal executive officer) Date: November 8, 2004 /s/ John E. Simmons John E. Simmons, Treasurer and Chief Financial Officer (principal financial and accounting officer) Date: November 8, 2004 EX-31 2 sep10q31-1.txt Exhibit 31.1 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 I, Roy E. Farmer, President and Chief Executive Officer of Farmer Bros. Co. ("Registrant"), certifies that: 1. I have reviewed this Quarterly Report on Form 10-Q of Registrant; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; 4. The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the Registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and 5. The Registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting. Date: November 8, 2004 /s/ Roy E. Farmer Roy E. Farmer President and Chief Executive Officer (principal executive officer) EX-31 3 sep10q31-2.txt Exhibit 31.2 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 I, John E. Simmons, Treasurer and Chief Financial Officer of Farmer Bros. Co. ("Registrant"), certifies that: 1. I have reviewed this Quarterly Report on Form 10-Q of Registrant; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; 4. The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the Registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and 5. The Registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting. Date: November 8, 2004 /s/ John E. Simmons John E. Simmons Treasurer and Chief Financial Officer (principal financial and accounting officer) EX-32 4 sep10q32-1.txt Exhibit 32.1 CERTIFICATION of Chief Executive Officer Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002 In connection with the annual report of Farmer Bros. Co. (the "Company") on Form 10-Q for the fiscal period ended September 30, 2004, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Roy E. Farmer, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: 1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. the information contained in the Report fairly represents, in all material respects, the financial condition and results of operation of the Company. Dated: November 8, 2004 /s/ Roy E. Farmer Roy E. Farmer President and Chief Executive Officer (principal executive officer) EX-32 5 sep10q32-2.txt Exhibit 32.2 CERTIFICATION of Chief Financial Officer Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002 In connection with the annual report of Farmer Bros. Co. (the "Company") on Form 10-Q for the fiscal period ended September 30, 2004, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, John E. Simmons, Treasurer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: 3. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 4. the information contained in the Report fairly represents, in all material respects, the financial condition and results of operation of the Company. Dated: November 8, 2004 /s/ John E. Simmons John E. Simmons Treasurer and Chief Financial Officer (principal financial and accounting officer -----END PRIVACY-ENHANCED MESSAGE-----