UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 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 0-1287
STERLING SUGARS, INC.
____________________________________________________________________
Exact name of registrant as specified in its charter
Louisiana 72-0327950
_______________________________ ______________________________
State or other jurisdiction of IRS employer identification
incorporation or organization number
P. O. Box 572, Franklin, La. 70538
____________________________________________________________________
Address of principal executive offices Zip Code
Registrant's telephone number including area code 337 828 0620
Not Applicable
____________________________________________________________________
Former name, former address and former fiscal year, if changed since
last report.
Indicate by check mark whether 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 such shorter
period that the registrant was required to file such reports), and
(2) has been subject to such filing requirments 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 No X
There were 2,500,000 common shares outstanding at November 30, 2004.
Total number of pages 17
STERLING SUGARS, INC.
I N D E X
PAGE
NUMBER
PART I: FINANCIAL INFORMATION:
ITEM 1. FINANCIAL STATEMENTS
Condensed balance sheets October 31, 2004
(unaudited) and July 31, 2004 I-1
Statements of earnings and retained earnings
Three months ended October 31, 2004
(unaudited) and 2003 (unaudited) I-2
Statements of cash flows
Three months ended October 31, 2004
(unaudited) and 2003 (unaudited) I-3
Notes to condensed financial statements
Three months ended October 31, 2004 and 2003 I-5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS I-6
ITEM 4. CONTROLS AND PROCEDURES I-9
PART II. OTHER INFORMATION:
ITEM 1. LEGAL PROCEEDINGS II-1
ITEM 6. EXHIBITS AND REPORTS ON FORM 8K II-1
-2-
STERLING SUGARS, INC.
CONDENSED BALANCE SHEETS
October 31, July 31,
2004 2004
UNAUDITED NOTE
ASSETS: ---------------------------
CURRENT ASSETS:
Cash and short-term investments $ 55,776 $ 1,550,726
Accounts receivable 3,446,431 1,405,538
Inventories at lower of cost or market 13,159,822 8,406,006
Other current assets 409,204 504,470
------------- -------------
TOTAL CURRENT ASSETS $ 17,071,233 $ 11,866,740
------------- -------------
Property, plant and equipment - net $ 25,190,062 $ 25,471,499
------------- -------------
Expenditures for future crops $ 106,870 $ 106,870
------------- -------------
Notes receivable - No allowance for
doubtful accounts considered necessary $ 220,403 $ 228,174
------------- -------------
Other assets $ 95,765 $ 83,566
------------- -------------
$ 42,684,333 $ 37,756,849
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES:
Notes Payable $ 11,635,500 $ 8,404,000
Accounts payable and accrued expenses 1,699,047 420,446
Due cane growers 3,611,964 3,872,774
Current portion long-term debt 1,129,327 1,129,327
------------- -------------
TOTAL CURRENT LIABILITIES $ 18,075,838 $ 13,826,547
------------- -------------
Long-term debt $ 3,549,782 $ 4,306,491
------------- -------------
Deferred income taxes $ 1,663,618 $ 1,663,618
------------- -------------
STOCKHOLDERS' EQUITY:
Common stock $ 2,500,000 $ 2,500,000
Additional paid in capital 40,455 40,455
Retained earnings 16,854,640 15,419,738
------------- -------------
$ 19,395,095 $ 17,960,193
------------- -------------
$ 42,684,333 $ 37,756,849
============= =============
NOTE: The balance sheet at July 31, 2004 has been taken from the
audited financial statements at that date and condensed.
See notes to condensed financial statements
I-1 -3-
STERLING SUGARS, INC.
STATEMENT OF EARNINGS AND RETAINED EARNINGS
(UNAUDITED)
THREE MONTHS ENDED OCTOBER 31
-----------------------------
2004 2003
------ ------
(Unaudited) (Unaudited)
REVENUES:
Sugar and molasses sales $ 4,716,724 $ 6,422,358
Interest earned 3,037 920
Mineral leases and royalties 404,921 130,356
Other (Note B) 846,361 2,160,254
------------ ------------
$ 5,971,043 $ 8,713,888
------------ ------------
COSTS AND EXPENSES:
Cost of products sold $ 2,984,525 $ 6,082,543
General and administrative 371,075 212,984
Interest expense 301,086 136,414
------------ ------------
$ 3,656,686 $ 6,431,941
------------ ------------
NET EARNINGS (LOSS) BEFORE INCOME TAXES $ 2,314,357 $ 2,281,947
INCOME TAX EXPENSE (CREDIT) 879,456 867,140
------------ ------------
NET EARNINGS (LOSS) $ 1,434,901 $ 1,414,807
RETAINED EARNINGS AT BEGINNING OF PERIOD 15,419,739 13,781,536
------------ ------------
RETAINED EARNINGS AT END OF PERIOD $ 16,854,640 $ 15,196,343
============ ============
NET EARNINGS (LOSS) PER SHARE $ .57 $ .57
============ ============
See notes to condensed financial statements
I-2 -4-
STERLING SUGARS, INC.
STATEMENT OF CASH FLOWS
THREE MONTHS ENDED OCTOBER 31
-----------------------------
2004 2003
------ ------
(Unaudited) (Unaudited)
OPERATING ACTIVITIES:
Net earnings (Loss) $ 1,434,901 $ 1,414,807
Adjustments to reconcile net earnings to net
cash provided by (used in) operating
activities:
Depreciation 622,350 607,224
Changes in operating assets and liabilities:
Increase in accounts receivable (2,040,893) (2,818,466)
(Increase) decrease in inventories (4,753,816) (6,476,806)
Increase (decrease) in other current assets ( 92,566) ( 89,661)
Increase in accounts payable, accrued expenses
and due cane growers 1,017,791 2,320,920
Other items - net ( 245,369) 184,907
------------- ------------
Net cash used in operating activities $ (4,057,602) $ (4,857,075)
------------- ------------
INVESTING ACTIVITIES:
Purchase of property, plant and equipment $ ( 337,138) $ (2,461,332)
------------- -------------
Net cash used in investing activities $ ( 337,138) $ (2,461,332)
FINANCING ACTIVITIES:
Proceeds from short-term debt $ 11,257,000 $ 10,580,000
Payments on short-term debt (7,600,500) (2,787,023)
Payments on long-term debt ( 756,710) ( 89,430)
------------- ------------
Net cash provided by (used in) financing
activities $ 2,899,790 $ 7,703,547
------------- ------------
Increase (decrease) in cash and temporary
investments $ (1,494,950) $ 385,140
Cash and temporary investments at the
beginning of the period 1,550,726 1,110
------------- ------------
Cash and temporary investments at the
end of the period $ 55,776 $ 386,250
============= =============
Continued
See notes to condensed financial statements
I-3 -5-
STERLING SUGARS, INC.
STATEMENT OF CASH FLOWS
(CONTINUED)
THREE MONTHS ENDED OCTOBER 31
------------------------------
2004 2003
-------- ---------
(Unaudited) (Unaudited)
Supplemental information:
Interest paid $ 187,309 $ 141,357
========== ==========
Income taxes paid $ - $ -
========== ==========
I-4 -6-
STERLING SUGARS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
THREE MONTHS ENDED OCTOBER 31, 2004 AND 2003
(UNAUDITED)
A. CONDENSED FINANCIAL STATEMENTS:
The condensed balance sheet as of October 31, 2004, the
statements of earnings and retained earnings for the three
months ending October 31, 2004 and 2003, and the
condensed statements of cash flows for the three month periods
then ended have been prepared by the Company, without audit. In
the opinion of management, all adjustments (which include
only normal recurring adjustments) necessary to present
fairly the financial position, results of operations and
cash flows at October 31, 2004 and for all periods presented
have been made.
Certain information and footnote disclosures normally
included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed
or omitted. It is suggested that these condensed financial
statements be read in conjunction with the July 31, 2003 annual
report to stockholders and the Form 10-K filed with the Securities
and Exchange Commission on October 28, 2004. The results of
operations for the period ending October 31, 2004 are not
necessarily indicative of the operating results for the full year.
B. DISASTER RELIEF SUBSIDY
Under the Agricultural Assistance Act of 2003, the Commodity
Credit Corporation (CCC) has been directed to pay $60,000,000 in
compensation to Louisiana sugarcane producers and processors
suffering economic losses from the effects of Tropical Storm
Isadore, Hurricane Lili and excessive rains in October, 2002.
Under the plan, the CCC paid in October, 2003, the
processors 93% of the total based on a predetermined formula,
less a 7% holdback for appeals purposes. The processors then paid
the cane suppliers based on existing contracts
between the mills and the farmers. The 7% holdback will be
disbursed at the conclusion of the appeals process.
Management estimates the gross amount to be paid to the Company
to be $4,386,000 before the 7% holdback and payments to farmers of
65%. After farmer payments, the Company's portion of the proceeds
is estimated to be approximately $1,535,000. These amounts are
before rentals to be received from producers on Company owned land.
The 7% holdback was received in October, 2004 and the Company's
portion was $84,882.19.
I-5 -7-
STERLING SUGARS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward -Looking Information
----------------------------
This Form 10-Q contains certain statements that may be deemed
"forward-looking statements." All statements, other than historical
statements, in this Form 10-Q that address activities, events or
developments that the Company intends, expects, projects, believes or
anticipates will or may occur in the future, are forward-looking statements.
Such statements are based on assumptions and analysis made by management of
the Company in light of its experience and its perception of historical
trends, current conditions, expected future developments and other factors
it believes are appropriate. The forward-looking statements in the Form
10-Q are also subject to a number of material risks and uncertainties,
including weather conditions in south Louisiana during the sugarcane
growing season, the success of sugarcane pest and disease abatement
procedures, the quality and quantity of the sugarcane crops, mechanical
failures at the Company's sugar mill, and prices for sugar and molasses
produced by the Company. Such forward-looking statements are not guarantees
of future performance and actual results. Development and business
decisions may differ from those envisioned by such forward-looking
statements.
Results of Operations:
----------------------
General Information:
--------------------
The Company commenced grinding on September 21, 2004. As of
December 1, 2004, the Company is averaging 207 pounds of sugar per ton
of cane compared to 207 and 172 pounds of sugar per ton for the last two
years, respectively. Sugar yields are about the same as last year.
However, dry weather and excessive rainfall at inappropriate times,
has reduced the tonnage of sugarcane per acre. The Company expects to
grind approximately 770,000 tons of cane this crop compared to 901,639
and 1,027,182 tons for the previous two years, respectively. In all
probability, the Company will produce about 17,000 tons less sugar than
the previous year because of the unusually short crop.
Lost time percent is excellent at 2.61 percent for the current crop
compared to 4.96 percent and 7.94 percent for the previous two years.
Average tons ground per crop day was 9,753 at December 1, 2004 compared
to 9,827 and 9,911 on the same day for the previous two years. The basis
price paid to farmers for the crop years 2003, 2002 and 2001 was 20.35
cents per pound, 20.68 and 20.45, respectively. The price for the
current year (2004 crop) is down to around 20.00 cents per pound as of
October 31, 2004.
I-6 -8-
Sugar and Molasses Sales:
-------------------------
Sugar and molasses sales for the three months ended October 31,
2004 and 2003 were as follows:
2004 2003
------ ------
Raw sugar sales $ 4,168,897 $ 6,135,213
Molasses sales 547,827 287,145
------------ -------------
$ 4,716,724 $ 6,422,358
============ =============
As of October 31, 2004, the Company had shipped 9,926 tons of
raw sugar compared to 14,416 tons shipped as of October 31, 2003. Raw
sugar sales are down from last year and inventories up due to lesser
demand from refiners. Shipments of raw sugar are dictated by the
refiners based on their needs and production schedules.
Molasses production is up slightly at 5.06 gallons per ton of
sugarcane as of October 31, 2004 compared to 5.27 gallons per ton and
4.92 gallons per ton for the last two years. As of October 31, 2004,
the Company had shipped 1,821,466 gallons of molasses compared to
1,061,662 gallons the previous year. The molasses price is
down slightly this year over the previous two years. Currently,
the molasses price is fixed at $51.40 per ton compared to $53.75 and
$60 for the previous two years.
Interest Earned:
----------------
Interest earned was $3,037 for the three months ending October 31,
2004 compared to $920 for the same period last year.
Mineral Leases and Royalties:
-----------------------------
Mineral leases and royalties were $404,921 for the three months
ended October 31, 2004 compared to $130,356 for 2003 and $86,274 for
2002. There were no new oil and gas leases granted for the three month
period ended October 31, 2004. The increase in 2004 compared to 2003 is
a result of royalties received on a new well completed in May, 2003.
All royalties are applied to the Company's long-term debt.
Other Revenues:
---------------
Other revenues consist mainly of miscellaneous income and cane
land rentals. Cane land rentals for the three months ended October 31,
2004 were $572,366 compared to $580,542 for the same period in the
prior year. Other revenue for October 31, 2003 includes a disaster
payment received under the Agricultural Assistance Act of 2003. The
Company received the final 7% holdback totaling $84,882.19 in October
2004 and that amount was accrued at July 31, 2004. See Note B to the
financial statements for further information on the disaster payment.
I-7 -9-
Cost of Products Sold:
----------------------
Cost of products sold decreased to $2,961,590 for the three months
ended October 31, 2004 compared to $6,082,543 for the three month
period ending October 31, 2003. The two storms during the previous
year's crop contributed to the large cost of products sold at October
31, 2003. Higher inventories also contributed to the lower cost of
products sold for the current year. At October 31, 2003, inventories
were $9,111,937 compared to $13,159,822 this year. Refiners continue to
require the Company to hold sugar for longer periods. Costs relating to
sales are charged to cost of products sold.
General and Administrative Expenses:
------------------------------------
General and administrative expenses were $371,075 for the current
period and $212,984 for the same period last year. The increase was
primarily caused by increases in legal expenses relating to the Company
going private, bonuses and hospitalization costs.
Interest Expense:
-----------------
Interest expense increased to $301,086 for the three months ended
October 31, 2004 from $136,414 for the three months ended October 31,
2003. The increase includes $157,215 due M. A. Patout & Son, Ltd. for
interest cost incurred by them on the Company's behalf.
Income Taxes:
-------------
Income taxes (credit) for the three month periods ending October
31, 2004 and 2003 were recorded at the statutory rate of 38 percent
which reflects the 34 percent federal corporate rate plus 4 percent
state income taxes.
Liquidity and Capital Resources:
--------------------------------
At October 31, 2004, the Company had negative working capital of
$1,004,605 compared to negative working capital of $4,173,568 at October
31, 2003. Working capital ratios were .94:1 and .77:1 respectively.
Typically, the Company begins short-term borrowing during the idle
season to finance company operations and capital additions. At July 31,
2004, short-term debt outstanding was $8,404,000 and at October 31, 2004
short-term debt had increased to $11,635,500. At July 31, 2003, short-term
debt was $4,207,023 and had increased to $12,000,000 by October 31, 2003.
With refiners requiring the Company to store sugar longer, short-term
borrowings have increased to finance operations. At October 31, 2004, the
Company had inventories of $13,159,822 compared to $9,114,937 on October
31, 2003. Inventories on hand at July 31, 2004 were $8,406,006 whereas on
July 31, 2003 inventories totaled $2,638,131. The $12,000,000 short-term
debt outstanding at October 31, 2003 includes financing for a new boiler
costing approximately $3,500,000 installed and placed in service in early
I-8 -10-
October, 2003. In November, 2003 the Company financed $3,000,000 payable
in twelve consecutive semi-annual payments of $250,000 plus interest at
the rate of 5.75% per annum. The first payment on the note was due March
31, 2004. The Company will continue to use the proceeds from oil and
gas royalties to pay down long-term debt. The Company has a $17,000,000
line of credit with a bank.
ITEM 4 - DISCLOSURE CONTROLS AND PROCEDURES
Our management, with the participation of our principal executive
officer and principal financial officer, has evaluated the effectiveness
of our disclosure controls and procedures (as such term is defined in
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) as of the end of the period covered by
this report. Based on such evaluation, our principal executive officer
and principal financial officer have concluded that, as of the end of such
period, our disclosure controls and procedures are effective in recording,
processing, summarizing and reporting on a timely basis, information
required to be disclosed by us in reports that it files or submits under
the Exchange Act.
INTERNAL CONTROL OVER FINANCIAL REPORTING
There have not been any changes in our internal control over financial
reporting (as such term is defined in Rules 13-15(f) and 15d-15(f) under
the Exchange Act) during the first fiscal quarter that have materially
affected, or are reasonably likely to materially affect, our internal
control over financial reporting.
I-9 -11-
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
There have been no material developments in the legal proceedings
reported in the Company's Annual Report on Form 10-K for the year
ended July 31, 2004.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8K
(a) Exhibits
Exhibit Description Page
----------------------------------------------------
11 Computation of Earnings per Share 14
31.1 Section 906 Certification of Chief 14
Executive Officer
31.2 Section 906 Certification of Chief 15
Financial Officer
32.1 Certification Pursuant to 18 U.S.C. 16
Section 1350, as Adopted Pursuant
to Section 906 of the Sarbanes-Oxley
Act of 2002
(b) Reports on Form 8K
No reports on Form 8-K have been filed for the period.
II-1 -12-
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
STERLING SUGARS, INC.
---------------------
(REGISTRANT)
DATE December 13, 2004 By /s/ Craig P. Caillier
--------------------------- ------------------------
CRAIG P. CAILLIER
PRESIDENT AND CEO
DATE December 13, 2004 By /s/ Stanley H. Pipes
---------------------------- -------------------------
STANLEY H. PIPES
VICE PRESIDENT AND TREASURER
II-2 -13-
EXHIBIT 11
STERLING SUGARS, INC.
COMPUTATION OF EARNINGS PER SHARE
Years Ended October 31
-----------------------
2004 2003
------------ ------------
Primary
Income (Loss) $ 1,434,901 $ 1,414,807
=========== ===========
Shares
Weighted average number of common
shares outstanding $ 2,500,000 $ 2,500,000
----------- -----------
Primary earnings (loss) per share $.57 $.57
========== ==========
EXHIBIT 31.1
CERTIFICATIONS
I, Craig P. Caillier, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Sterling Sugars,
Inc.;
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 if being prepared;
b) Evaluated the effectiveness of the restrant'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;
-14-
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 (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 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: December 13, 2004
-----------------
/s/ Craig P. Caillier
----------------------
Craig P. Caillier
President and Chief Executive Officer
EXHIBIT 31.2
I, Stanley H. Pipes, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Sterling Sugars,
Inc.;
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 if being prepared;
-15-
b) Evaluated the effectiveness of the restrant'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 (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 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: December 13, 2004
-----------------
/s/ Stanley H. Pipes
--------------------
Stanley H. Pipes
Vice President and Treasurer
(Principal Financial and Accounting Officer)
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
In connection with the Quarterly Report of Sterling Sugars, Inc.
(the "Company") on Form 10-Q for the quarter ending October 31, 2004 as
filed with the Securities and Exchange Commission on the date hereof
(the "Report"), I, Craig P. Caillier, President and Chief Executive Officer
of the Company, and I, Stanley H. Pipes, Vice President and Treasurer 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 presents, in all
-16-
material respects, the financial condition and results of operations of the
Company.
/s/ Craig P. Caillier
Date: December 13, 2004 ---------------------
Craig P. Caillier
President and Chief Executive Officer
Date: December 13, 2004 /s/ Stanley H. Pipes
____________________
Stanley H. Pipes
Vice President & Treasurer
-17-