UNITED
STATES
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 April 29, 2005 | |
|
| |
|
¨ |
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 1-7898
|
LOWE'S COMPANIES,
INC. |
|
(Exact
name of registrant as specified in its
charter) |
|
NORTH
CAROLINA |
56-0578072 |
|
(State
or other jurisdiction of incorporation or organization) |
(I.R.S.
Employer Identification No.) |
|
1000
Lowe's Blvd., Mooresville, NC |
28117 |
|
(Address
of principal executive offices) |
(Zip
Code) |
|
|
|
|
Registrant's
telephone number, including area code |
(704)
758-1000 |
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.
|
x |
Yes |
o |
No |
Indicate
by check mark whether the registrant is an accelerated filer (as defined in Rule
12b-2 of the Exchange Act).
|
x |
Yes |
o |
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 MAY 27, 2005 | |
|
Common
Stock, $.50 par value |
772,468,057 |
|
LOWE’S
COMPANIES, INC.
-
INDEX - | |||||
|
PART
I - Financial Information |
Page
No. | ||||
|
Item
1. Financial Statements |
|||||
|
3 | |||||
|
4 | |||||
|
5 | |||||
|
6-10 | |||||
|
11 | |||||
|
12-17 | |||||
|
18 | |||||
|
|
|||||
|
18 | |||||
|
PART
II - Other Information |
|||||
|
18 | |||||
|
19 | |||||
|
19 | |||||
|
20 | |||||
|
21 | |||||
2
Part
I. FINANCIAL INFORMATION
Item
1. Financial Statements
Lowe's
Companies, Inc. |
|||||||||||||
|
In
Millions, Except Par Value Data |
|||||||||||||
|
(Unaudited)
|
(Unaudited)
|
||||||||||||
|
April
29, 2005 |
April
30, 2004
As
Restated (Note 2) |
January
28, 2005 |
|||||||||||
|
Assets |
|||||||||||||
|
Current
assets: |
|||||||||||||
|
Cash
and cash equivalents |
$ |
911 |
$ |
1,091 |
$ |
642 |
|||||||
|
Short-term
investments |
315
|
901
|
171
|
||||||||||
|
Accounts
receivable - net |
18
|
185
|
9
|
||||||||||
|
Merchandise
inventory - net |
6,808
|
5,723
|
5,982
|
||||||||||
|
Deferred
income taxes |
109
|
90
|
95
|
||||||||||
|
Other
assets |
89
|
78
|
75
|
||||||||||
|
Total
current assets |
8,250
|
8,068
|
6,974
|
||||||||||
|
Property,
less accumulated depreciation |
14,310
|
12,177
|
13,911
|
||||||||||
|
Long-term
investments |
161
|
163
|
146
|
||||||||||
|
Other
assets |
192
|
222
|
178
|
||||||||||
|
Total
assets |
$ |
22,913 |
$ |
20,630 |
$ |
21,209 |
|||||||
|
Liabilities
and shareholders' equity |
|||||||||||||
|
Current
liabilities: |
|||||||||||||
|
Current
maturities of long-term debt |
$ |
631 |
$ |
78 |
$ |
630 |
|||||||
|
Accounts
payable |
3,464
|
3,492
|
2,687
|
||||||||||
|
Accrued
salaries and wages |
211
|
166
|
386
|
||||||||||
|
Other
current liabilities |
2,623
|
2,114
|
2,016
|
||||||||||
|
Total
current liabilities |
6,929
|
5,850
|
5,719
|
||||||||||
|
Long-term
debt, excluding current maturities |
3,058
|
3,668
|
3,060
|
||||||||||
|
Deferred
income taxes |
702
|
622
|
736
|
||||||||||
|
Other
long-term liabilities |
208
|
82
|
159
|
||||||||||
|
Total
liabilities |
10,897
|
10,222
|
9,674
|
||||||||||
|
Shareholders'
equity: |
|||||||||||||
|
Preferred
stock - $5 par value, none issued |
-
|
-
|
-
|
||||||||||
|
Common
stock - $.50 par value; |
|||||||||||||
|
Shares
issued and outstanding |
|||||||||||||
|
April
29, 2005 |
773 |
|
|||||||||||
|
April
30, 2004 |
783 |
|
|||||||||||
|
January
28, 2005 |
774 |
|
387
|
392
|
387
|
||||||||
|
Capital
in excess of par |
1,437
|
2,014
|
1,514
|
||||||||||
|
Retained
earnings |
10,193
|
8,002
|
9,634
|
||||||||||
|
Accumulated
other comprehensive loss |
(1 |
) |
-
|
-
|
|||||||||
|
Total
shareholders' equity |
12,016
|
10,408
|
11,535
|
||||||||||
|
Total
liabilities and shareholders' equity |
$ |
22,913 |
$ |
20,630 |
$ |
21,209 |
|||||||
See
accompanying notes to the unaudited consolidated financial statements.
Lowe's
Companies, Inc. |
|||||||||||||
|
In
Millions, Except Per Share Data |
|||||||||||||
|
Three
Months Ended |
|||||||||||||
|
April
30, 2004 |
|||||||||||||
|
April
29, 2005 |
As
Restated (Note 2) |
||||||||||||
|
Current
Earnings |
Amount
|
Percent |
Amount
|
Percent |
|||||||||
|
Net
sales |
$ |
9,913 |
100.00 |
$ |
8,681 |
100.00 |
|||||||
|
Cost
of sales |
6,498
|
65.55 |
5,811
|
66.94 |
|||||||||
|
Gross
margin |
3,415
|
34.45 |
2,870
|
33.06 |
|||||||||
|
Expenses: |
|||||||||||||
|
Selling,
general and administrative |
2,136
|
21.55 |
1,853
|
21.35 |
|||||||||
|
Store
opening costs |
25
|
0.25 |
22
|
0.25 |
|||||||||
|
Depreciation |
248
|
2.50 |
213
|
2.45 |
|||||||||
|
Interest |
47
|
0.47 |
48
|
0.55 |
|||||||||
|
Total
expenses |
2,456
|
24.77 |
2,136
|
24.60 |
|||||||||
|
Pre-tax
earnings |
959
|
9.68 |
734
|
8.46 |
|||||||||
|
Income
tax provision |
369
|
3.73 |
282
|
3.25 |
|||||||||
|
Net
earnings |
$ |
590 |
5.95 |
$ |
452 |
5.21 |
|||||||
|
Weighted
average shares outstanding - Basic |
774
|
786
|
|||||||||||
|
Basic
earnings per share |
$ |
0.76 |
$ |
0.58 |
|||||||||
|
Weighted
average shares outstanding - Diluted |
805
|
818
|
|||||||||||
|
Diluted
earnings per share |
$ |
0.74 |
$ |
0.56 |
|||||||||
|
Cash
dividends per share |
$ |
0.04 |
$ |
0.03 |
|||||||||
|
Retained
Earnings |
|||||||||||||
|
Balance
at beginning of period |
$ |
9,634 |
$ |
7,574 |
|||||||||
|
Net
earnings |
590
|
452
|
|||||||||||
|
Cash
dividends |
(31 |
) |
(24 |
) |
|||||||||
|
Balance
at end of period |
$ |
10,193 |
$ |
8,002 |
|||||||||
See
accompanying notes to the unaudited consolidated financial
statements.
|
Lowe's
Companies, Inc. |
|||||||
|
In
Millions |
|||||||
|
Three
Months Ended |
|||||||
|
April
30, 2004 |
|||||||
|
April
29, 2005 |
As
Restated (Note 2) |
||||||
|
Cash
flows from operating activities: |
|||||||
|
Net
earnings |
$ |
590 |
$ |
452 |
|||
|
Adjustments
to reconcile net earnings to net cash provided by |
|||||||
|
operating
activities: |
|||||||
|
Depreciation
and amortization |
253
|
218
|
|||||
|
Deferred
income taxes |
(48 |
) |
-
|
||||
|
Loss
on disposition/writedown of fixed and other assets |
9
|
15
|
|||||
|
Stock-based
compensation expense |
16
|
16
|
|||||
|
Tax
effect of stock options exercised |
7
|
7
|
|||||
|
Changes
in operating assets and liabilities: |
|||||||
|
Accounts
receivable - net |
(9 |
) |
(39 |
) | |||
|
Merchandise
inventory - net |
(826 |
) |
(1,139 |
) | |||
|
Other
operating assets |
(14 |
) |
28
|
||||
|
Accounts
payable |
777
|
1,280
|
|||||
|
Other
operating liabilities |
442
|
371
|
|||||
|
Net
cash provided by operating activities |
1,197
|
1,209
|
|||||
|
Cash
flows from investing activities: |
|||||||
|
Increase
in short-term investments |
(104 |
) |
(156 |
) | |||
|
Purchases
of long-term investments |
(56 |
) |
(35 |
) | |||
|
Proceeds
from sale/maturity of long-term investments |
-
|
6
|
|||||
|
Increase
in other long-term assets |
(21 |
) |
(5 |
) | |||
|
Fixed
assets acquired |
(624 |
) |
(568 |
) | |||
|
Proceeds
from the sale of fixed and other long-term assets |
16
|
23
|
|||||
|
Net
cash used in investing activities |
(789 |
) |
(735 |
) | |||
|
Cash
flows from financing activities: |
|||||||
|
Repayment
of long-term debt |
(8 |
) |
(8 |
) | |||
|
Proceeds
from stock options exercised |
35
|
24
|
|||||
|
Cash
dividend payments |
(31 |
) |
(24 |
) | |||
|
Repurchase
of common stock |
(135 |
) |
(288 |
) | |||
|
Net
cash used in financing activities |
(139 |
) |
(296 |
) | |||
|
Net
increase in cash and cash equivalents |
269
|
178
|
|||||
|
Cash
and cash equivalents, beginning of period |
642
|
913
|
|||||
|
Cash
and cash equivalents, end of period |
$ |
911 |
$ |
1,091 |
|||
See
accompanying notes to the unaudited consolidated financial statements.
Lowe's
Companies, Inc.
Note
1: Basis
of Presentation - The
accompanying Consolidated Financial Statements (Unaudited) have been reviewed by
an independent registered public accounting firm and, in the opinion of
management, they contain all adjustments necessary to present fairly the
financial position as of April 29, 2005 and April 30, 2004, as restated, and the
results of operations and cash flows for the three months ended April 29, 2005
and April 30, 2004, as restated.
These
interim financial statements should be read in conjunction with the audited
financial statements and notes thereto included in the Lowe's Companies, Inc.
(the Company) Annual Report on Form 10-K for the fiscal year ended January 28,
2005 (the Annual Report). The financial results for the interim periods may not
be indicative of the financial results for the entire fiscal year.
Certain
prior period amounts have been reclassified to conform to current
classifications.
Note
2: Restatement - As
described in Note 2 in the Annual Report, the Company restated its prior period
financial statements, including its interim financial statements for the three
month period ended April 30, 2004, to correct errors resulting from its
accounting for leases. In the restatement, the Company accelerated depreciation
expense for lease assets and leasehold improvements to limit the depreciable
lives of those assets to the lease term, as determined in accordance with
Statement of Financial Accounting Standards (SFAS) No. 13, “Accounting for
Leases.” The Company also revised its calculation of rent expense and the
related deferred rent liability for certain of its ground leases by including in
the straight-line rent expense calculations any free-rent occupancy periods
allowed under those ground leases while a store is being constructed on the
leased property. In the restatement, the Company also adjusted its prior period
financial statements to correct immaterial accounting errors previously
identified during the audit of those financial statements. The impact on
previously reported net earnings of these other adjustments was an increase of
$1.5 million for the three month period ended April 30, 2004.
The
following tables summarize the effects of the restatement on the Company’s
consolidated balance sheet as of April 30, 2004, as well as the related effects
on the Company’s consolidated statement of earnings for the three months ended
April 30, 2004. The restatement did not affect net cash flows for the three
months ended April 30, 2004.
|
Consolidated
Balance Sheet |
||||||||||
|
April
30, |
April
30, |
|||||||||
|
2004 |
2004 |
|||||||||
|
(In
Millions) |
As
Previously Reported* |
Adjustments |
As
Restated |
|||||||
|
Deferred
income taxes |
$ |
87 |
$ |
3 |
$ |
90 |
||||
|
Total
current assets |
8,065
|
3
|
8,068
|
|||||||
|
Property,
less accumulated depreciation |
12,308
|
(131 |
) |
12,177
|
||||||
|
Total
assets |
$ |
20,758 |
$ |
(128 |
) |
$ |
20,630 |
|||
|
Deferred
income taxes |
688
|
(66 |
) |
622
|
||||||
|
Other
long-term liabilities |
46
|
36
|
82
|
|||||||
|
Total
liabilities |
10,252
|
(30 |
) |
10,222
|
||||||
|
Capital
in excess of par |
2,006
|
8
|
2,014
|
|||||||
|
Retained
earnings |
8,108
|
(106 |
) |
8,002
|
||||||
|
Total
shareholders' equity |
10,506
|
(98 |
) |
10,408
|
||||||
|
Total
liabilities and shareholders' equity |
$ |
20,758 |
$ |
(128 |
) |
$ |
20,630 |
|||
* Certain
amounts have been reclassified to conform to current
classifications.
|
Consolidated
Statement of Earnings |
||||||||||
|
April
30, |
April
30, |
|||||||||
Three
Months Ended |
2004 |
2004 |
||||||||
|
(In
Millions, Except Per Share Data) |
As
Previously Reported |
Adjustments |
As
Restated |
|||||||
|
Expenses: |
||||||||||
|
Depreciation |
$ |
208 |
$ |
5 |
$ |
213 |
||||
|
Total
expenses |
2,131
|
5
|
2,136
|
|||||||
|
Pre-tax
earnings |
739
|
(5 |
) |
734
|
||||||
|
Income
tax provision |
284
|
(2 |
) |
282
|
||||||
|
Net
earnings |
$ |
455 |
$ |
(3 |
) |
$ |
452 |
|||
|
Basic
earnings per share |
$ |
0.58 |
$ |
- |
$ |
0.58 |
||||
|
Diluted
earnings per share (Notes 3 and 10) |
$ |
0.56 |
$ |
- |
$ |
0.56 |
||||
Additionally, the Company’s auction rate securities are included in short-term investments due to recent interpretations that make this classification more appropriate than the previous years’ classification as cash equivalents. The amount reclassified was $757 million at April 30, 2004. The impact on cash flows from investing activities resulting from this reclassification was a decrease of $225 million for the three month period ended April 30, 2004. There was no impact on total cash flows.
Note
3: Earnings Per Share - Basic
earnings per share (EPS) excludes dilution and is computed by dividing the
applicable net earnings by the weighted-average number of common shares
outstanding for the period. Diluted earnings per share is calculated based on
the weighted-average shares of common stock as adjusted for the potential
dilutive effect of stock options and applicable convertible notes as of the
balance sheet date. In the fourth quarter of fiscal 2004, the Company
implemented Emerging Issues Task Force Issue No. 04-8 (EITF 04-8), "Accounting
Issues Related to Certain Features of Contingently Convertible Debt and the
Effect on Diluted Earnings per Share." Based on the EITF’s conclusion, the
dilutive effect of contingently convertible debt instruments should be included
in the calculation of diluted earnings per share regardless of whether the
contingency has been met. As a result of this implementation, the Company has
retroactively adjusted diluted earnings per share calculations for all periods
presented to include the dilutive effect of the assumed conversion of the
Company’s $580.7 million Senior Convertible Notes issued in October 2001. The
implementation of EITF 04-8 reduced diluted earnings per share by approximately
$0.01 for each of the three month periods ended April 29, 2005 and April 30,
2004. The following table reconciles EPS for the three months ended April 29,
2005 and April 30, 2004.
|
Three
Months Ended |
|||||||
|
(In
Millions, Except Per Share Data) |
April
29, 2005 |
April
30, 2004 |
|||||
Basic
earnings per share: |
|||||||
Net
earnings |
$ |
590 |
$ |
452 |
|||
Weighted
average shares outstanding |
774 |
786 |
|||||
|
Basic
earnings per share |
$ |
0.76 |
$ |
0.58 |
|||
Diluted
earnings per share: |
|||||||
Net
earnings |
$ |
590 |
$ |
452 |
|||
Net
earnings adjustment for interest on convertible debt, net of
tax |
3 |
3 |
|||||
Net
earnings, as adjusted |
$ |
593 |
$ |
455 |
|||
Weighted
average shares outstanding |
774 |
786 |
|||||
Dilutive
effect of stock options |
5 |
5 |
|||||
Dilutive
effect of convertible debt |
26 |
27 |
|||||
Weighted
average shares, as adjusted |
805 |
818 |
|||||
|
Diluted
earnings per share |
$ |
0.74 |
$ |
0.56 |
|||
Note
4: Accounts Receivable -
As described
in Note 5 to the consolidated financial statements presented in the Annual
Report, in May 2004, the Company entered into an agreement with General Electric
Company and its subsidiaries (GE) to sell its commercial business accounts
receivable to GE. Commercial business accounts receivable sold to GE during the
three months ended April 29, 2005 totaled $394 million. During the three months
ended April 29, 2005, the Company recognized losses of $9 million on these sales
as SG&A expense, which primarily relate to the fair value of the obligations
incurred related to servicing costs that are remitted to GE monthly. At April
29, 2005, the fair value of the retained interests was a net asset of $0.6
million and was determined based on the present value of expected future cash
flows. Due to the short-term nature of the receivables sold, changes to the key
assumptions would not materially impact the recorded gain or loss on the sales
of receivables or the fair value of the retained interests in the
receivables.
Note
5: Property -
Property is shown net of accumulated depreciation of
$4.3 billion at April
29, 2005, $3.5 billion at April 30, 2004 and $4.1 billion at January 28,
2005.
Note
6: Supplemental Disclosure
Supplemental
disclosures of cash flow information:
|
Three
Months Ended |
|||||||
|
(In
Millions) |
April
29,
2005 |
April
30,
2004 |
|||||
|
Cash
paid for interest (net of amount capitalized) |
$ |
51 |
$ |
54 |
|||
|
Cash
paid for income taxes |
$ |
150 |
$ |
15 |
|||
|
Non-cash
fixed asset acquisitions, including assets acquired under capital
lease |
$ |
41 |
$ |
17 |
|||
Note
7: Comprehensive
Income - Total
comprehensive income, comprised of net earnings and unrealized holding gains
(losses) on available-for-sale securities, totaled $589 million and $451
million, compared to net earnings of $590 million and $452 million for the three
months ended April 29, 2005 and April 30, 2004, respectively.
Note
8: Accounting for Stock-Based Compensation - The
Company has three stock incentive plans which are described more fully in Note
12 to the consolidated financial statements presented in the Annual Report. The
Company recognizes stock-based compensation expense in accordance with the
fair-value recognition provisions of SFAS No. 123, "Accounting for Stock-Based
Compensation," using the Black-Scholes option pricing model. The assumptions
used to determine the fair value of options granted during the three months
ended April 29, 2005 have not changed significantly from those disclosed in the
Annual Report. During each of the three month periods ended April 29, 2005 and
April 30, 2004, the Company recognized compensation expense totaling $16 million
relating to stock options and awards, which generally vest over three years.
As the
Company adopted the fair-value recognition provisions of SFAS No. 123
prospectively for all employee awards granted or modified after January 31,
2003, the cost related to the stock-based compensation included in the
determination of net earnings for the three month periods ended April 29, 2005
and April 30, 2004 is less than that which would have been recognized if the
fair-value-based method had been applied to all awards since the original
effective date of SFAS No. 123. The following table illustrates the effect on
net earnings and earnings per share in each period if the fair-value-based
method had been applied to all outstanding and unvested awards.
|
Three
Months Ended |
|||||||
|
(In
Millions, Except Per Share Data) |
April
29,
2005 |
April
30,
2004 |
|||||
|
Net
earnings, as reported |
$ |
590 |
$ |
452 |
|||
|
Add:
Stock-based compensation expense included in net earnings, net of related
tax effects |
10 |
10 |
|||||
|
Deduct:
Total stock-based compensation expense determined under the
fair-value-based method for all awards, net of related tax
effects |
(12 |
) |
(22 |
) | |||
|
Pro
forma net earnings |
$ |
588 |
$ |
440 |
|||
|
Earnings
per share: |
|||||||
|
Basic
- as reported |
$ |
0.76 |
$ |
0.58 |
|||
|
Basic
- pro forma |
$ |
0.76 |
$ |
0.56 |
|||
|
Diluted
- as reported |
$ |
0.74 |
$ |
0.56 |
|||
|
Diluted
- pro forma |
$ |
0.73 |
$ |
0.54 |
|||
Note
9:
Shareholders’
Equity - The
Company repurchased 2.4 million common shares during the first three months of
fiscal 2005 at a cost of $134 million under the $1 billion share repurchase
program authorized by the Board of Directors in January 2005. As of April 29,
2005, the Company has remaining authorization under this share repurchase
program of $866 million.
The
Company repurchased 5.2 million common shares during the first three months of
fiscal 2004 at a cost of $288 million under the $1 billion share repurchase
program authorized by the Board of Directors in December 2003. There were no
amounts remaining under this prior authorization as of April 29,
2005.
Note
10: Recent Accounting Pronouncements
- - In
October 2004, the EITF reached a consensus on EITF 04-8. Based on the EITF’s
conclusion, the dilutive effect of contingently convertible debt instruments
should be included in the calculation of diluted earnings per share regardless
of whether the contingency has been met. The Company implemented the provisions
of EITF 04-8 in the fourth quarter of 2004. In accordance with the transition
provisions of EITF 04-8, the Company has retroactively adjusted diluted earnings
per share calculations for all periods presented to include the dilutive effect
of the assumed conversion of the Company’s $580.7 million Senior Convertible
Notes issued in October 2001. The implementation of EITF 04-8 reduced diluted
earnings per share by approximately $0.01 for each of the three month periods
ended April 29, 2005 and April 30, 2004. See further discussion in Note 3 to the
consolidated financial statements herein.
In
December 2004, the Financial Accounting Standards Board issued SFAS No. 123
(revised) "Share-Based Payment.” This statement eliminates the alternative to
account for share-based compensation transactions using APB Opinion No. 25 and
will require that compensation expense be measured based on the grant-date fair
value of the award and recognized over the requisite service period for awards
that vest. SFAS No.
123 (revised) will also require a change in the classification of certain tax
benefits from options deductions to financing rather than operating cash flows.
The
Company is currently evaluating the impact of this statement, which will be
effective as of the beginning of the Company’s fiscal 2006 as a result of the
deferral of the effective date by the Securities and Exchange Commission. The
Company currently recognizes stock-based compensation expense in accordance with
the fair-value provisions of SFAS No. 123. The adoption of SFAS No. 123
(revised) may affect the Company’s methodology for determining the fair value of
stock-based compensation transactions and the method for recognizing the expense
associated with these transactions. However, the Company does not expect the
adoption of this statement to have a material impact on its consolidated
financial statements.
To the
Board of Directors and Shareholders of Lowe’s Companies, Inc.
Mooresville,
North Carolina
We have
reviewed the accompanying consolidated balance sheets of Lowe’s Companies, Inc.
and subsidiaries (the “Company”) as of April 29, 2005 and April 30, 2004, and
the related consolidated statements of current and retained earnings and of cash
flows for the three-month periods then ended. These interim financial statements
are the responsibility of the Company’s management.
We
conducted our reviews in accordance with standards of the Public Company
Accounting Oversight Board (United States). A review of interim financial
information consists principally of applying analytical procedures and making
inquiries of persons responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance with standards
of the Public Company Accounting Oversight Board (United States), the objective
of which is the expression of an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express such an opinion.
Based on
our reviews, we are not aware of any material modifications that should be made
to such consolidated financial statements for them to be in conformity with
accounting principles generally accepted in the United States of
America.
We have
previously audited, in accordance with auditing standards of the Public Company
Accounting Oversight Board (United States), the consolidated balance sheet of
Lowe’s Companies, Inc. and subsidiaries as of January 28, 2005, and the related
consolidated statements of earnings, shareholders’ equity, and cash flows for
the year then ended (not presented herein); and in our report dated April 11,
2005 we expressed an unqualified opinion on those consolidated financial
statements. In our opinion, the information set forth in the accompanying
consolidated balance sheet as of January 28, 2005, is fairly stated, in all
material respects, in relation to the consolidated balance sheet from which it
has been derived.
/s/
Deloitte & Touche LLP
Charlotte,
North Carolina
June 6,
2005
Item
2.
FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
This
discussion and analysis summarizes the significant factors affecting our
consolidated operating results, liquidity and capital resources during the three
months ended April 29, 2005. This discussion and analysis should be read in
conjunction with the financial statements and notes to the consolidated
financial statements that are included in our Annual Report on Form 10-K for the
fiscal year ended January 28, 2005 (the Annual Report), as well as the notes to
the consolidated financial statements contained in this report.
As
described in Note 2 in the Annual Report, we restated our prior period financial
statements to correct errors resulting from our accounting for leases. In the
restatement, we accelerated depreciation expense for lease assets and leasehold
improvements to limit the depreciable lives of those assets to the lease term,
as determined in accordance with Statement of Financial Accounting Standards
(SFAS) No. 13, “Accounting for Leases.” We also revised the calculation of rent
expense and the related deferred rent liability for certain of our ground leases
by including in the straight-line rent expense calculations any free-rent
occupancy periods allowed under those ground leases while our store is being
constructed on the leased property. In the restatement, we also adjusted our
prior period financial statements to correct immaterial accounting errors
previously identified during the audit of those financial statements. For
further discussion of the effects of the restatement see Note 2 to the
consolidated financial statements contained in this report.
CRITICAL
ACCOUNTING POLICIES AND ESTIMATES
The
following discussion and analysis of the financial condition and results of
operations are based on the consolidated financial statements and notes to
consolidated financial statements contained in this report that have been
prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of these financial statements requires
us to make estimates that affect the reported amounts of assets, liabilities,
sales and expenses, and related disclosures of contingent assets and
liabilities. We base these estimates on historical results and various other
assumptions believed to be reasonable, all of which form the basis for making
estimates concerning the carrying values of assets and liabilities that are not
readily available from other sources. Actual results may differ from these
estimates.
Our
significant accounting polices are described in Note 1 to the consolidated
financial statements presented in the Annual Report. Our critical accounting
policies and estimates are described in Management’s Discussion and Analysis of
Financial Condition and Results of Operations in the Annual Report and have not
changed significantly since January 28, 2005.
OPERATIONS
The
following table sets forth the percentage relationship to net sales of each line
item of the consolidated statements of earnings, as well as the percentage
change in dollar amounts from the prior year. This table should be read in
conjunction with the following discussion and analysis and the consolidated
financial statements, including the related notes to the consolidated financial
statements.
|
Three
months ended |
Percentage
Increase / (Decrease) in Dollar Amounts from Prior
Year |
Basis
Point Increase / (Decrease) in Percentage of Net Sales from Prior
Year |
|||||||||||
|
April
29, 2005 |
April
30, 2004 |
2004
- 2005 |
2004
- 2005 |
||||||||||
|
Net
Sales |
100.00 |
% |
100.00 |
% |
14 |
% |
N/A |
||||||
|
Gross
Margin |
34.45 |
% |
33.06 |
% |
19 |
% |
139
|
||||||
|
Expenses: |
|||||||||||||
|
Selling,
General and Administrative |
21.55 |
% |
21.35 |
% |
15 |
% |
20
|
||||||
|
Store
Opening Costs |
0.25 |
% |
0.25 |
% |
14 |
% |
0
|
||||||
|
Depreciation |
2.50 |
% |
2.45 |
% |
16 |
% |
5
|
||||||
|
Interest |
0.47 |
% |
0.55 |
% |
(2 |
%) |
(8 |
) | |||||
|
Total
Expenses |
24.77 |
% |
24.60 |
% |
15 |
% |
17
|
||||||
|
Pre-Tax
Earnings |
9.68 |
% |
8.46 |
% |
31 |
% |
122
|
||||||
|
Income
Tax Provision |
3.73 |
% |
3.25 |
% |
31 |
% |
48
|
||||||
|
Net
Earnings |
5.95 |
% |
5.21 |
% |
31 |
% |
74
|
||||||
|
Three
Months Ended | |||||||
|
Other
Metrics |
April
29, 2005 |
April
30, 2004 |
|||||
|
Comparable
Store Sales Increases 1 |
3.8 |
% |
9.9 |
% | |||
|
Customer
Transactions (in millions) |
149
|
139
|
|||||
|
Average
Ticket 2 |
$ |
66.33 |
$ |
62.56 |
|||
|
At
end of period: |
|||||||
|
Number
of Stores (end of period) |
1,112
|
980 |
|||||
|
Sales
Floor Square Feet (in millions, end of period) |
126.5 |
111.9 |
|||||
|
Average
Store Size Square Feet (in thousands) |
114 |
114 |
|||||
1 We
define a comparable store as a store that has been open greater than 13
months.
2 We
define average ticket as net sales divided by number of
transactions.
Performance
Net
Sales - The
primary driver of our sales increase for the three month period ended April 29,
2005 was the addition of 27 stores during the quarter, including two
relocations, combined with comparable store sales increases. Weak sales during a
weather-affected March and early April caused the comparable store sales
increase to be lower than expected. The impact of weather can be seen in our
sales results across the quarter, as comparable store sales varied significantly
from month to month. We experienced an increase in comparable store sales of
7.5% in February, a decrease of 2.0% in March and an increase of 7.5% in
April. Inflation
in lumber and building materials favorably impacted comparable store sales for
the first quarter by approximately 75 basis points.
We
experienced comparable store sales increases in 16 of 19 product categories,
while comparable store sales in nursery, seasonal living and lumber decreased
from prior year’s first quarter. The categories that performed above our average
comparable store sales increase for the first quarter included millwork, rough
plumbing, building materials, hardware, appliances, home environment, fashion
plumbing, flooring, cabinets & countertops and home organization. In
addition, paint and lighting performed at approximately the overall corporate
average comparable store sales increase for the first quarter. Appliances
continued to perform well during the first quarter of 2005 as we gained
additional market share in this category, reaching a 15% unit share for the
first time in our history. The investment we have made in our Installed Sales
model is also driving improved performance in the cabinets and flooring
categories. Each of these higher-performing categories is a larger ticket
category, indicating the underlying strength of the home improvement consumer.
In the first quarter of 2005, our average ticket increased 6% to $66.33 and
total customer count increased 8%.
Gross
Margin - As a
result of the impact of the implementation of EITF 02-16 on the first quarter of
2004, we experienced an increase in gross margin as a percentage of sales of 167
basis points in the first quarter of 2005. The implementation of EITF 02-16
reduced gross margin in the first quarter of fiscal 2004 as vendor funds
associated with cooperative advertising and in-store services were capitalized
into inventory and recognized into income when the product was sold. Changes in
product mix also positively impacted gross margin as a percentage of sales by
seven basis points for the first quarter of 2005. These items were offset by
higher distribution costs, higher fuel rates, a reduction in cash discounts and
higher inventory shrinkage as a percentage of sales.
SG&A
- The
increase in SG&A expense as a percentage of sales in the first quarter of
2005 was driven by increased payroll, occupancy, insurance and bank card
expenses as a percentage of sales. The comparable store sales decreases
experienced during weather-affected March and early April resulted in the
increase in payroll as a percentage of sales and a portion of the increase in
occupancy costs as a percentage of sales. The remaining increase in occupancy
costs as a percentage of sales was primarily due to an increase in the number of
ground leases, higher utility costs and property taxes. Insurance expense, which
includes employee health, worker’s compensation, and general liability insurance
increased as a percentage of sales due to rising healthcare costs and expansion
into high cost states. The increase in bank card expenses as a percentage of
sales for the first quarter was caused by a higher mix of bank card sales and
increases in interchange rates charged by the bank card associations. These
items were slightly offset by a decrease in gross advertising expense as a
percentage of sales from the first quarter of fiscal 2004.
Store
Opening Costs - Store
opening costs, which include payroll and supply costs incurred prior to store
opening and grand opening advertising costs, are expensed as incurred and
totaled $25 million in the first quarter of 2005 compared to $22 million in the
first quarter of 2004. These costs are associated with the opening of 27 stores
in 2005 (25 new and two relocated), as compared with the opening of 29 new
stores in 2004. Because store opening costs are expensed as incurred, the
expenses recognized may fluctuate based on the timing of store openings in
future or prior periods. Store opening costs averaged approximately $0.9 million
per store in the first quarters of 2005 and 2004.
Depreciation
- - Property,
less accumulated depreciation, increased to $14.3 billion at April 29, 2005,
compared to $12.2 billion at April 30, 2004. The increase in property resulted
primarily from our store expansion program, increased distribution capacity and
our investment in information technology. At the end of the first quarter of
2005, we owned 82% of our stores compared to 80% at the end of first quarter of
2004. In the first quarter of fiscal 2005 we opened our eleventh regional
distribution center, which is located in Connecticut.
Income
Tax Provision - Our
effective income tax rates were 38.5% and 38.4% in the first quarter of 2005 and
2004, respectively.
Initiatives
Driving Performance
The three
major categories of specialty sales initiatives of Installed Sales, Special
Order Sales (SOS) and Commercial Business Customers (CBC) remained core to our
first quarter 2005 comparable store sales performance. Our new installed sales
model continues to deliver positive results, with comparable store sales
increases in the first quarter of 2005 that exceeded the company average
comparable store sales increase. We continue to leverage our established model
by enhancing our offering with installation services for products such as
roofing and siding, which are now being offered in many of our stores. Our
Special Order Sales initiatives also continue to perform well, delivering
comparable store sales increases above the company average. We are conducting an
increasing percentage of our SOS transactions electronically, continually adding
new vendor catalogues to our on-line databases, and making the selection and
ordering process easier for our customers and more efficient for our stores and
vendors. Finally, our efforts to capture more sales from Commercial Business
Customers continue to be successful, delivering solid results for the quarter.
Over the past year, we have added a regional commercial sales manager to each of
our 21 regions to help facilitate consistent execution of our CBC initiatives.
In addition, our targeted marketing message to Commercial Business Customers
continues to drive results.
As we
continue the implementation of our Rapid Response Replenishment (R3) Initiative,
our rate of inventory growth for the first quarter of 2005, while slightly
higher than our sales growth for the same period, slowed as compared to fourth
quarter 2004 inventory growth. Our stores now receive an average of five
deliveries from our regional distribution centers per week, up from four per
week in the prior year, as we work to reduce lead time variability by handling
additional products such as appliances and paint through our distribution
infrastructure. Cycle time, which is the time from when demand is created until
product is back on the shelf is down 30%, which is enabling us to remove
inventory from the stores. We expect to make continued progress with the
implementation in the coming months, resulting in flat to slight inventory
leverage in the second quarter and additional leverage in the back half of
fiscal 2005.
Economic
Factors Impacting Performance
Household
incomes and employment are key economic drivers of our business, as these two
factors have consistently correlated most directly with our sales performance.
We also examine other factors such as housing turnover. We closely monitor all
three of these metrics, which individually and in combination indicate a very
favorable climate for our future growth and the home improvement industry. These
economic metrics only tell part of the story regarding the strong outlook in the
home improvement sector. There are other factors that are playing a
big part in driving the demand for housing; specifically the wave of second-home
sales, as well as the increase in the number of consumers entering into
household formation. These large demographic shifts are also driving and
transforming our industry.
LIQUIDITY
AND CAPITAL RESOURCES
The
primary sources of liquidity are cash flows from operating activities and our $1
billion senior credit facility that expires in July 2009. Net cash provided by
operating activities was $1.2 billion for each of the three month periods ended
April 29, 2005 and April 30, 2004. Working capital at April 29, 2005 was $1.3
billion compared to $2.2 billion at April 30, 2004 and $1.3 billion at January
28, 2005. The decrease in working capital was due primarily to continued share
repurchases and our investment in inventory related to the R3 initiative.
The
primary component of net cash used in investing activities continues to be
opening new stores. Cash acquisitions of fixed assets were $624 million and $568
million for the three months ended April 29, 2005 and April 30, 2004,
respectively. At April 29, 2005, we operated 1,112 stores in 48 states with
126.5 million square feet of retail selling space, representing a 13% increase
over the selling space at April 30, 2004.
Net
cash used in financing activities was $139 million for the three months ended
April 29, 2005 compared to $296 million for the three months ended April 30,
2004. The decrease in cash used in financing activities during the first three
months of the current fiscal year primarily resulted from fewer repurchases of
common stock under our share repurchase program compared to the three months
ended April 30, 2004. The ratio
of long-term debt to equity plus long-term debt was 20.3%, 26.1% and 21.0% as of
April 29, 2005, April 30, 2004 and January 28, 2005, respectively.
We have a
$1 billion senior credit facility that became effective in July 2004 and expires
in July 2009. The facility is available to support our $1 billion commercial
paper program and for short-term borrowings. Borrowings made are priced based
upon market conditions at the time of funding in accordance with the terms of
the senior credit facility. The senior credit facility contains certain
restrictive covenants which include maintenance of a specific financial ratio.
We were in compliance with those covenants at April 29, 2005. Fifteen banking
institutions are participating in the $1 billion senior credit facility and, as
of April 29, 2005, there were no outstanding loans under the facility.
In
January 2005, the Board of Directors authorized up to $1 billion in share
repurchases through 2006. This program is intended to be implemented through
purchases made from time to time either in the open market or through private
transactions. Shares purchased under this program are retired and returned to
authorized and unissued status. As of April 29, 2005 the share repurchase
program had a remaining authorization of $866 million for common stock
repurchases.
In the
fourth quarter of fiscal 2005, long-term debt totaling $608 million will mature.
We anticipate having the ability to repay this debt through cash from
operations.
Our 2005
capital budget is $3.7 billion, inclusive of approximately $335 million of
operating leases. Approximately 78% of this planned commitment is for
store expansion and new distribution centers. Expansion plans for 2005
consist of approximately 150 stores, including three relocations of older
stores. This planned expansion is expected to increase sales floor square
footage by approximately 13-14%. Approximately 68% of the 2005 projects
will be owned, 31% will be ground leased properties and 1% will be build-to-suit
leases.
At April
29, 2005, we owned and operated 11 regional distribution centers. We also owned
and operated 10 flatbed distribution centers for the handling of lumber,
building materials and other long-length items. We expect to open one
additional flatbed distribution center in 2005.
We
believe that funds from operations and funds available from our credit
facilities will be adequate to finance our expansion plans and other operating
requirements. However, the availability of funds through the issuance of
commercial paper and new debt could be adversely affected due to a debt rating
downgrade or a deterioration of certain financial ratios. There are no
provisions in any agreements that would require early cash settlement of
existing debt or leases as a result of a downgrade in our debt rating or a
decrease in our stock price. Holders of the $580.7 million Senior Convertible
notes may convert their notes into common stock if the minimum investment grade
rating is not maintained. There is no indication that we will not be able to
maintain this minimum investment grade rating. In addition, if a change in
control of the company occurs on or before October 2006, each holder of the
Senior Convertible Notes may require us to purchase for cash all or a portion of
such holder’s notes. We may redeem for cash all or a portion of the notes at any
time beginning October 2006, at a price equal to the sum of the issue price plus
accrued original issue discount and accrued cash interest, if any, on the
redemption date. Our debt ratings at April 29, 2005, were as
follows:
|
Current
Debt Ratings |
S&P |
Moody’s |
Fitch |
|
Commercial
paper |
A1 |
P1 |
F1 |
|
Senior
debt |
A+ |
A2 |
A |
|
Outlook |
Stable |
Positive |
Positive |
COMPANY
OUTLOOK
Second
Quarter
As of May
16, 2005, the date
of our first quarter 2005 earnings release, we
expected to open 27 stores during the second quarter of fiscal 2005, which ends
on July 29, 2005, reflecting square footage growth of approximately 14%. Total
sales are expected to increase 15% to 16% and comparable store sales are
expected to increase 4% to 6%. We expect diluted earnings per share of $1.00 to
$1.02. All comparisons are with the second quarter of fiscal 2004.
Fiscal
2005
As of May
16, 2005, the date
of our first quarter 2005 earnings release, we
expected to open 150 stores during fiscal 2005, which ends on February 3, 2006,
reflecting total square footage growth of 13% to 14%. Total sales are expected
to increase approximately 17% for the year, while comparable store sales are
expected to increase approximately 5%. We expect diluted earnings per share of
$3.25 to $3.34. Fiscal 2005 will include an extra week in the fourth quarter for
a total of 53 weeks. All comparisons are with fiscal 2004.
FORWARD-LOOKING
STATEMENTS
This Form
10-Q contains “forward-looking statements,” as such are provided for by the
Private Securities Litigation Reform Act of 1995 (the “Act”). All statements
other than those reciting historic fact are statements that could be
“forward-looking statements” under the Act. Such forward-looking statements are
found in, among other places, “Management’s Discussion and Analysis of Financial
Condition and Results of Operations.” Statements containing words such as
“expects,” “plans,” “strategy,” “projects,” “believes,” “opportunity,”
“anticipates,” “desires,” and similar expressions are intended to highlight or
indicate “forward-looking statements.” Although we believe that the
expectations, opinions, projections, and comments reflected in our
forward-looking statements are reasonable, we can give no assurance that such
statements will prove to be correct. A wide variety of potential risks,
uncertainties, and other factors could materially affect our ability to achieve
the results expressed or implied by our forward-looking statements including,
but not limited to: (i) changes in general economic conditions which can
negatively affect our customers’ spending patterns; (ii) decreases in the number
of new housing starts and the level of repairs, remodeling, and additions to
existing homes, as well as general reduction in commercial building activity;
(iii) ability to secure, develop, and otherwise implement new technologies and
processes designed to enhance our efficiency and competitiveness; (iv) ability
to attract, train, and retain highly-qualified associates; (v) ability to
locate, secure, and develop new sites for store development; (vi) fluctuations
in the prices and availability of services, supplies, and products; (vii) growth
and impact of competition; (viii) ability to address legal and regulatory
matters; and (ix) impact of unanticipated weather conditions.
Any
forward-looking statements contained in this Form 10-Q are based upon data
available as of the date of this report or other specified date and speak only
as of such date. We expressly disclaim any obligation to update or revise any
forward-looking statement, whether as a result of new information, change in
circumstances, future events, or otherwise.
The
Company's market risk has not changed materially since January 28, 2005.
The
Company's management, with the participation of the Chief Executive Officer and
Chief Financial Officer, has evaluated the effectiveness of the Company’s
“disclosure controls and procedures”, (as such term is defined in
Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as
amended, (the “Exchange Act”)). Based upon their evaluation, the Chief Executive
Officer and Chief Financial Officer concluded that, as of April 29, 2005, the
Company’s disclosure controls and procedures were effective for the purpose of
ensuring that the information required to be disclosed in the reports that the
Company files or submits under the Exchange Act with the Securities and Exchange
Commission (the “SEC”) (1) is recorded, processed, summarized and reported
within the time periods specified in the SEC’s rules and forms, and (2) is
accumulated and communicated to the Company’s management, including its
principal executive and principal financial officers, as appropriate to allow
timely decisions regarding required disclosure.
In
addition, based on that evaluation, no change in the Company’s internal control
over financial reporting occurred during the fiscal quarter ended April 29, 2005
that has materially affected, or is reasonably likely to materially affect, the
Company’s internal control over financial reporting.
Part
II - OTHER INFORMATION
Issuer
Purchases of Equity Securities
|
(In
millions, except average price
paid per share) |
Total
Number of Shares Purchased (1) |
Average
Price Paid per Share |
Total
Number of Shares Purchased as Part of Publicly Announced Plans or Programs
(2) |
Dollar
Value of Shares that May Yet Be Purchased Under the Plans or
Programs |
|||||||||
|
January
29, 2005 - February 25, 2005 |
- |
$ |
- |
- |
$ |
1,000 |
|||||||
|
February
26, 2005 - April 1, 2005 |
1.9 |
56.96 |
1.9 |
891 |
|||||||||
|
April
2, 2005 - April 29, 2005 |
0.5 |
56.45 |
0.5 |
866 |
|||||||||
|
As
of April 29, 2005 |
2.4 |
$ |
56.87 |
2.4 |
$ |
866 |
|||||||
| (1) |
During
the first quarter of fiscal 2005, the Company repurchased an aggregate of
2,364,900 shares of its common stock pursuant to the repurchase program
publicly announced on January 28, 2005 (the “Program”). The total number
of shares purchased also includes a nominal amount of shares repurchased
from employees to satisfy the exercise price of certain stock option
exercises. |
| (2) |
On
January 28, 2005, the Board of Directors approved a share repurchase
program under which the Company is authorized to repurchase up to $1
billion of the Company’s common stock. The program expires at the end of
fiscal 2006. |
On June
6, 2005, the Company entered into an agreement (the "Retirement Agreement") with
Dale C. Pond regarding the terms of his retirement from the Company as Senior
Executive Vice President - Merchandising/Marketing. Pursuant to the terms of the
Retirement Agreement, Mr. Pond will continue to serve in this capacity until
June 30, 2005 (the "Retirement Date"), at which time he will resign as an
officer of the Company. Larry D. Stone, currently the Company's Senior Executive
Vice President - Operations, will succeed Mr. Pond as Senior Executive Vice
President - Merchandising/Marketing on the Retirement Date.
On the
Retirement Date, Mr. Pond will have deferred stock units, restricted stock,
performance accelerated restricted stock and stock option awards that the
Company granted to him on March 1, 2003, March 1, 2004 and March 1, 2005 that
will not be vested. The stock options awarded to Mr. Pond on March 1, 2003 will
continue to vest in accordance with the vesting schedule established for them at
the time the options were awarded and such options will remain exercisable until
March 1, 2010. The Retirement Agreement amends the vesting schedule for the
deferred stock units awarded to Mr. Pond on March 1, 2003 to provide that the
units will become fully vested on the Retirement Date. Finally, because Mr. Pond
satisfies the age and years of service eligibility requirements for retirement
as provided under the March 1, 2004 and March 1, 2005 equity incentive awards
and the Board of Directors of the Company approved his retirement, these
outstanding equity awards will become fully vested on the Retirement Date, and
the options included in those awards will remain exercisable until the seventh
anniversary of the date they were granted to Mr. Pond.
The terms
of the Retirement Agreement also provide that the Company will indemnify Mr.
Pond in the event of a legal proceeding or investigation relating to his service
as an officer of the Company. The Retirement Agreement also provides that Mr.
Pond will receive any applicable benefits earned through the Retirement Date
under those employee benefit plans of the Company in which he is a participant,
and that the benefits so earned by or due to him will be paid or provided to him
in accordance with the terms of those plans.
In
addition to a customary release of any claims that Mr. Pond may have against the
Company, Mr. Pond has agreed to certain covenants, including covenants
restricting him from competing with the Company or soliciting the Company's
employees, vendors or suppliers for a period of two years following the
Retirement Date and requiring him to maintain the confidentiality of the
Company’s proprietary information.
This
description of the terms and conditions of the Retirement Agreement is qualified
in its entirety by reference to the Retirement Agreement, a copy of which is
attached as Exhibit 10.1 and incorporated herein by reference.
Exhibit
10.1 - Retirement Agreement - Dale C. Pond, dated June 6, 2005
Exhibit
31.1 - Certification Pursuant to Rules 13a-14(a) and 15d-14(a) under the
Securities Exchange Act of 1934, as amended
Exhibit
31.2 - Certification Pursuant to Rules 13a-14(a) and 15d-14(a) under the
Securities Exchange Act of 1934, as amended
Exhibit
32.1 - Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit
32.2 - Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002
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.
|
LOWE'S
COMPANIES, INC. | ||
|
June
8, 2005 |
/s/Kenneth
W. Black, Jr | |
| Date |
Kenneth
W. Black, Jr.
Senior
Vice President and Chief Accounting Officer |
|
Exhibit
No. |
|
Description |
|
|
|
|
|
10.1 |
Retirement
Agreement - Dale C. Pond, dated June 6, 2005 | |
|
31.1 |
|
Certification
Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange
Act of 1934, as amended |
|
|
|
|
|
31.2 |
|
Certification
Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange
Act of 1934, as amended |
|
|
|
|
|
32.1 |
|
Certification
Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 |
|
|
|
|
|
32.2 |
|
Certification
Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 |