10-Q 1 form10q-0904.txt 09-04 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2004 Commission File No. 2-70197 OCEAN BIO-CHEM, INC. -------------------------------------------------------------------------------- (Exact name of Registrant as specified in its charter) Florida 59-1564329 -------------------------------------------- -------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) Registrant's telephone number, including area code - (954) 587-6280 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 Exchange Act) YES NO X ------ ------- Indicate the number of shares outstanding of each of the Issuer's classes of common stock, as of the latest practicable date. $.01 Par Value Common Stock 10,000,000 shares authorized; 5,417,813 issued and outstanding at September 30, 2004 OCEAN BIO-CHEM AND SUBSIDIARIES INDEX Description Page ---- Part I: Item 1. - Financial Statements: Consolidated balance sheets as of September 30, 2004 and December 31, 2003 3 Consolidated statements of operations for the three and nine months ended September 30, 2004 and 2003 4 Consolidated statements of changes in shareholders' equity for the nine months ended September 30, 2004 and 2003 5 Consolidated statements of cash flows for the nine months ended September 30, 2004 and 2003 6 Item 2. - Management's Discussion and Analysis of Financial Condition and Results of Operations 7-8 Item 3. - Quantitative and Qualitative Disclosures about Market Risk 9 Item 4. - Controls and Procedures 9 Part II: Item 1. - Legal Proceedings 10 Item 2. - Changes in Securities 10 Item 3. - Defaults upon Senior Securities 10 Item 4. - Submission of Matters to Vote by Security Holders 10 Item 5. - Other Matters 10 Item 6. - Exhibits and Reports on Form 8-K 10 Signatures 10 Exhibits 2 Part I - Financial Information Item I. Financial Statements OCEAN BIO-CHEM, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS
SEPTEMBER 30, DECEMBER 31, 2004 2003 ------------- ------------ (Unaudited) Current assets: Cash $ 53,547 $ 42,923 Trade accounts receivable net of allowances for doubtful accounts of approximately $133,200 and $ 206,000 at September 30, 2004 and December 31, 2003, respectively 4,876,274 4,333,023 Inventories 6,484,544 5,315,741 Prepaid expenses and other current assets 161,950 193,372 ------------ ------------ Total current assets 11,576,315 9,885,059 ------------ ------------ Property, plant and equipment, net 7,361,793 7,506,586 ------------ ------------ Other assets: Funds held in escrow for equipment 1,901 126,295 Trademarks, trade names and patents, net of accumulated amortization 330,439 330,439 Due from affiliated companies, net 381,002 172,925 Deposits and other assets 273,437 281,880 ------------ ------------ Total other assets 986,779 911,539 ------------ ------------ Total assets $ 19,924,887 $ 18,303,184 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable - trade $ 2,954,277 $ 1,305,484 Note payable - bank 4,975,000 4,550,000 Current portion of long-term debt 485,805 898,964 Income taxes and accrued expenses payable 61,522 261,439 ------------ ------------ Total current liabilities 8,476,604 7,015,887 ------------ ------------ Deferred income taxes payable 241,610 205,610 ------------ ------------ Long term debt, less current portion 5,699,925 5,677,692 ------------ ------------ Shareholders' equity: Common stock - $.01 par value 10,000,000 shares authorized, 5,417,813 and 4,960,843 issued and outstanding at September 30, 2004 and December 31, 2003, respectively 54,178 49,608 Additional paid-in capital 4,722,746 4,409,829 Foreign currency translation adjustment ( 224,633) ( 237,323) Retained earnings 962,652 1,190,076 ------------ ------------- 5,514,943 5,412,190 Less cost of common stock in treasury, 7,519 shares at September 30, 2004 and December 31, 2003, respectively ( 8,195) ( 8,195) ------------- ------------- 5,506,748 5,403,995 ------------- ------------- Total liabilities and shareholders' equity $ 19,924,887 $ 18,303,184 ============= =============
3 OCEAN BIO-CHEM, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
For the three months For the nine months ended September 30, ended September 30, 2004 2003 2004 2003 ---- ---- ---- ---- Gross sales $6,513,764 $7,147,944 $16,713,144 $15,835,996 Allowances 626,276 715,394 1,942,509 1,421,928 ---------- ---------- ----------- ----------- Net sales 5,887,488 6,432,550 14,770,635 14,414,068 Cost of goods sold 4,671,283 4,675,359 11,414,361 10,851,142 ---------- ---------- ----------- ----------- Gross profit 1,216,205 1,757,191 3,356,274 3,562,926 ---------- ---------- ----------- ----------- Cost and expenses: Advertising and promotion 370,879 313,256 838,309 640,580 Selling and administrative 864,241 754,069 2,586,392 2,361,976 Interest expense 81,285 70,642 222,227 218,333 ---------- ---------- ----------- ----------- Total costs and expenses 1,316,405 1,137,967 3,646,928 3,220,889 ---------- ---------- ----------- ----------- Income (loss) from operations ( 100,200) 619,224 ( 290,654) 342,037 Interest income 151 7,544 730 10,778 ----------- ---------- ------------ ----------- Income (loss) before income taxes ( 100,049) 626,768 ( 289,924) 352,815 Provision (benefit) for income taxes ( 16,000) 120,000 ( 62,500) 120,000 ----------- ---------- ------------ ----------- Net income (loss) ( 84,049) 506,768 ( 227,424) 232,815 Other comprehensive income, net of income taxes: Foreign currency translation adjustment 24,711 ( 708) 12,690 49,004 ----------- ----------- ------------ ------------ Comprehensive income ($ 59,338) $ 506,060 ($ 214,734) $ 281,819 =========== =========== ============ =========== Earnings(loss) per common share ($ .02) $ .10 ($ .04) $ .05 =========== =========== ============ ===========
Earnings per share were calculated on the basis of 5,335,816 and 4,866,605 weighted average shares of common stock outstanding for the nine months and three months ended September 30, 2004 and 2003, respectively. The Company has adopted Statement of Financial Accounting Standards No. 130, which requires items of comprehensive income to be stated as part of the basic financial statements. The only items of comprehensive income of the Registrant which are reflected in the accompanying financial statements are foreign currency translation adjustments. 4 OCEAN BIO-CHEM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003 (UNAUDITED)
Foreign Common stock Additional currency Retained Treasury Shares Amount paid-in capital adjustment earnings stock Total ------ ------ --------------- ---------- ---------- ----------- ---------- January 1, 2004 4,960,843 $49,608 $4,409,829 ($237,323) $1,190,076 ($ 8,195) $5,403,995 Net loss ( 227,424) ( 227,424) Common stock issuances 456,970 4,570 312,917 317,487 Foreign currency translation adjustment 12,690 12,690 --------- --------- ---------- --------- ----------- ---------- ---------- September 30, 2004 5,417,813 $ 54,178 $4,722,746 ($224,633) $ 962,652 ($ 8,195) $5,506,748 ========= ========= ========== ========== ========== ========== ========== $5,506,748 ========== January 1, 2003 4,805,843 $48,058 $4,341,629 ($303,575) $ 845,005 ($ 8,195) $4,922,922 Net income 232,815 232,815 Common stock issuances 155,000 1,550 68,200 69,750 Foreign currency translation adjustment 49,004 49,004 --------- --------- ---------- --------- ----------- ---------- ----------- September 30, 2003 4,960,843 $49,608 $4,409,829 ($254,571) $1,077,820 ($ 8,195) $5,176,483 ========= ========= ========== ========== ========== ========== ===========
5 OCEAN BIO-CHEM, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, (UNAUDITED)
2004 2003 ---- ---- Cash flows provided by operating activities: Net income (loss) ($ 227,424) $ 232,815 Adjustments to reconcile net income to net cash provided by operations: Depreciation and amortization 545,422 495,420 Changes in assets and liabilities: (Increase) in accounts receivable ( 543,251) ( 1,183,919) (Increase) in inventory ( 1,168,803) ( 1,609,951) (Increase) decrease in prepaid expenses and other current assets 31,422 ( 87,335) Increase in accounts payable, accrued expenses, and other 1,493,319 954,876 ------------- ------------- Net cash provided (used) by operating activities 130,685 ( 1,198,094) ------------- ------------- Cash flows from financing activities: Net increases under line of credit 425,000 500,000 Reduction (increases) in due from affiliates ( 208,077) 298,041 Payments on debts, net ( 390,926) ( 433,907) Common stock transactions 317,487 69,750 ------------- ------------- Net cash provided by operating activities 143,484 433,884 ------------- ------------- Cash flows from investing activities: Purchases of property, plant and equipment, net of funds held in escrow ( 276,235) ( 138,595) ------------- ------------- Net cash used by investing activities ( 276,235) ( 138,595) ------------- ------------- (Decrease) in cash prior to effect of foreign currency translation adjustments ( 2,066) ( 902,805) Effect of foreign currency translation on cash 12,690 49,004 ------------- ------------- Net increase (decrease) in cash 10,624 ( 853,801) Cash at beginning of period 42,923 1,093,826 ------------- ------------- Cash at end of period $ 53,547 $ 240,025 ============= ============= Supplemental information: Cash used for payment of interest during period $ 222,227 $ 218,333 ============= ============= Cash used for payment of income taxes during period $ 48,000 $ - ============= ============= The Company had no cash equivalents at September 30, 2004 or 2003.
6 OCEAN BIO-CHEM, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS The information contained in this Report is unaudited, but reflects all adjustments which are, in the opinion of management, necessary for a fair statement of results of the interim periods, consisting only of normal recurring accruals. The results for such interim periods are not necessarily indicative of results to be expected for the full year. Certain financial statement items for the three and nine months ended September 30, 2003 have been reclassified in order to conform with the 2004 presentation. Forward-looking Statements: Certain statements contained herein, including without limitation expectations as to future sales and operating results, constitute forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigations Reform Act of 1995. For this purpose, any statements contained in this report that are not statements of historical fact may be deemed forward-looking statements. Without limiting the generality of the foregoing, words such as "may", "will", "expect", "anticipate", "intend", "could" or the negative other variations thereof or comparable terminology are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Factors which may affect the Company's results include, but are not limited to, the highly competitive nature of the Company's industry; reliance on certain key customers; consumer demand for marine recreational vehicle and automotive products; advertising and promotional efforts, and other factors. The Company will not undertake and specifically declines any obligation to update or correct any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources The primary sources of our liquidity are cash from operations, short-term borrowings under our revolving line of credit with Regions Bank, a commercial bank, and other borrowings. We renewed our line of credit with Regions Bank in July 2004, at which time we increased our credit line from $5 million to $6 million. This line of credit is collateralized by a security interest in our accounts receivable and inventory. The line of credit bears interest at the lender's prime rate plus .25% and matures on May 31, 2005. The maximum amount of credit that can be extended under the agreement is $6 million. Under this line of credit, we are required to maintain certain financial ratios as of each fiscal year end. As of September 30, 2004, the amount outstanding pursuant to the working capital line of credit was $ 4,975,000. We have obtained financing under industrial development revenue bonds from the city of Montgomery, AL during 1997 and 2002. As of September 30, 2004, the amount outstanding under our industrial development bonds is $5,780,000. The bonds carry a floating interest rate, which as of September 30, 2004 was approximately 2%. Result of Operations for the Three Months Ended September 30, 2004 compared to the Three Months Ended September 30, 2003: Gross sales decreased 9% or approximately $634,200 for the three months ended September 30, 2004 compared to the three months ended September 30, 2003. Management attributes this decrease primarily to the timing of incoming orders resulting from the hurricanes that plagued the southeastern United States during the current quarter. Customer orders anticipated during the current period have been received during the fourth quarter and it is expected that this shortfall will be made up before year-end. 7 Cost of goods sold increased to 79.3% of net sales during the three months ended September 30, 2004 compared to 72.7% of net sales in the three months ended September 30, 2003. The increase in the cost of goods is attributed to increasing oil and other raw material costs announced by suppliers during the current quarter. Our 2004 third quarter sales heavily included anti-freeze products which have margins that are highly dependent on petroleum costs. In addition, the sales that otherwise would have been reflected in the third quarter, but for the impact of hurricanes as noted above, substantially represent core marine products which yield higher margins and otherwise would have impacted the current quarter's revenue mix and, accordingly, gross margins. Selling and administrative expenses increased approximately $110,200 or 15 % in the three months ended September 30, 2004 compared to the same period of the prior year. Such change was primarily due to increased personnel costs and other normal recurring increases in operating expenses. Advertising and promotion increased approximately $ 57,600 or 18% in the three months ended September 30, 2004 compared to the same period in the prior year. This resulted primarily from planned increases in primarily co-op and print media advertising programs. Interest expense for the three months ended September 30, 2004 amounted to approximately $81,300 which represents an approximate $10,000 increase compared to the comparable period in 2003. This resulted from slightly higher interest rates and increased borrowings. Our loss from operations was approximately ($100,000) for the three months ended September 30, 2004 compared to income of approximately $626,800 during the three months ended September 30, 2003. Our net loss was approximately ($84,000) in the three months ended September 30, 2004 compared to net income of approximately $506,800 in the three months ended September 30, 2003. Result of Operations for the Nine Months Ended September 30, 2004 compared to the Nine Months Ended September 30, 2003: Gross sales increased 6% to approximately $16,713,100 in the nine months ended September 30, 2004 compared to $15,836,000 for the nine months ended September 30, 2003. Management attributes this to sales increases realized during earlier quarters of 2004 based on an early start to the marine boating season this year. Cost of goods sold increased to 77.3% of net sales for the nine months ended September 30, 2004 compared to 75.3% of net sales in the nine months ended September 30, 2003. This change resulted from various factors, some of which negatively impacted margins and others which mitigated these factors. Specifically, petroleum product costs are higher than those experienced in prior periods and currently represent a higher portion of manufacturing expenses. In addition, a price increase was passed along on certain products during the first quarter of 2004, and margins are favorably impacted by spreading fixed elements of overhead over increased revenues. Please read management's discussion relating to the three months ended September 30, 2004, above. Advertising and promotion expenses increased approximately $197,700 for the 2004 period when compared to expenses in the same time period in the previous year. This increase resulted primarily from increased co-op advertising associated with increased sales to certain customers and the timing of various advertising programs in 2004. Selling and administrative expenses increased by approximately $224,400 or 10% in the nine months ended September 30, 2004 compared to the nine months ended September 30, 2003. Such change was primarily due to increased personnel costs and other normal recurring increases in operating expenses. Interest expense for the 2004 period increased approximately $3,900 when compared to the same nine month period of 2003. This change was primarily due to the impact of higher interest rates and increased borrowings. 8 ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Market risk represents the risk of loss that may impact our financial position, results of operations or cash flows due to adverse changes in financial and commodity market prices and interest rates. We are exposed to market risk in the areas of changes in borrowing rates in the United States and changes in foreign currency exchange rates. Historically, and as of September 30, 2004, we have not used derivative instruments or engaged in hedging activities to minimize market risk. INTEREST RATE RISK As or September 30, 2004, we had floating interest rates on our industrial development revenue bonds and our working capital line of credit facility. As of September 30, 2004, the interest rate on our $5,780,000 outstanding balance of industrial revenue bonds was approximately 2% per annum and the interest rate on our line of credit facility approximated 5% which is prime plus .25%. We do not expect any changes in the interest rate to have a significant impact on our operations during fiscal 2004. FOREIGN CURRENCY RISK We sell products in Canada, based on the Canadian dollar. Thereby, we have exposure to changes in exchange rates. Changes in the Canadian dollar/U.S. dollar exchange rates may positively or negatively affect our gross margins, operating income and retained earnings. We do not believe that near-term changes in the exchange rates, if any, will result in a material effect on our future earnings, fair values or cash flows, and therefore, we have chosen not to enter into foreign currency hedging transactions. We cannot assure you that this approach will be successful, especially in the event of a significant and sudden change in the value of the Canadian dollar. CONCENTRATION AND CREDIT RISK We maintain cash balances at several financial institutions which are insured by the Federal Deposit Insurance Corporation up to $100,000. At times, the cash balances may exceed federally insured limits. We have not experienced any losses in such accounts and we believe the risk related to these deposits is minimal. ITEM 4. CONTROLS AND PROCEDURES Within 90 days prior to the date of this Quarterly Report on Form 10-Q, we carried out an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are effective in timely alerting them to material information required to be included in our periodic SEC reports. It should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. In addition, we reviewed our internal controls, and there have been no significant changes in our internal controls or in other factors that could significantly affect those controls subsequent to the date of their last evaluation. 9 PART II - OTHER INFORMATION Item 1 - Legal Proceedings: See our Form 10-K for the year ended December 31, 2003. Item 2 - Changes in Securities: Not applicable Item 3 - Defaults Upon Senior Securities: Not applicable Item 4 - Submission of Matters to Vote of Security Holders: Not applicable Item 5 - Other Matters: Not applicable Item 6 - Exhibits and Reports on Form 8-K: (A) Exhibits: Not applicable (B) Reports on Form 8-K: On October 26, 2004, we filed a Form 8-K disclosing that, pursuant to NASDAQ rules covering controlled corporations (those with a shareholder owning more than 50% of a company's common stock), we do not have either an independent compensation committee or nominating committee. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on behalf by the Undersigned there unto duly authorized. OCEAN BIO-CHEM, INC. Date: November 12, 2004 /s/ Peter G. Dornau ----------------------------- ----------------------------------- Peter G. Dornau Chairman of the Board of Directors and Chief Executive Officer /s/ Edward Anchel ----------------------------------- Edward Anchel Chief Financial Officer 10 Exhibit 31 CERTIFICATION I, Peter G. Dornau certify that: 1. I have reviewed this quarterly report on Form 10-Q of Ocean Bio-Chem, Inc. as of and for the periods ended September 30, 2004; 2. Based on my knowledge, this quarterly 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 periods 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 quarterly report is being prepared; b) 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 c) 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 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 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 Registrant's board of directors (or persons performing the equivalent function): 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. OCEAN BIO-CHEM, INC. Date: November 12, 2004 /s/ Peter G. Dornau ------------------- ---------------------- Peter D. Dornau Chairman of the Board and Chief Executive Officer Exhibit 31.1 CERTIFICATION I, Edward Anchel certify that: 1. I have reviewed this quarterly report on Form 10-Q of Ocean Bio-Chem, Inc. as of and for the periods ended September 30, 2004; 2. Based on my knowledge, this quarterly 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 periods 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 quarterly report is being prepared; b) 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 c) 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 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 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 Registrant's board of directors (or persons performing the equivalent function): 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. OCEAN BIO-CHEM, INC. Date: November 12, 2004 /s/ Edward Anchel ------------------------ Edward Anchel Chief Financial Officer Exhibit 32 CERTIFICATION Pursuant to 18U.S.C.Section 1350, the undersigned officers of Ocean Bio-Chem, Inc. (the "Company"), hereby certify that the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2004 (the "Report") fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company. Dated: November 12, 2004 /s/ Peter Dornau ------------------------ Peter G. Dornau Chairman of the Board of Directors and Chief Executive Officer /s/ Edward Anchel ------------------------ Edward Anchel Chief Financial Officer