SECURITIES AND EXCHANGE COMMISSION

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2005

Commission file number 1-11471

Bell Industries, Inc.

Registrant’s telephone number, including area code: (310) 563-2355

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 þ NO o

     Indicate by check mark whether the Registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).

YES o NO þ

     As of the close of business on May 10, 2005, there were 8,460,224 outstanding shares of the Registrant’s Common Stock.

BELL INDUSTRIES, INC.

FORM 10-Q

INDEX

PART I — FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

BELL INDUSTRIES, INC.

CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS

See Accompanying Notes to Consolidated Condensed Financial Statements.

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BELL INDUSTRIES, INC.

CONSOLIDATED CONDENSED BALANCE SHEET

See Accompanying Notes to Consolidated Condensed Financial Statements.

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BELL INDUSTRIES, INC.

CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS

See Accompanying Notes to Consolidated Condensed Financial Statements.

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BELL INDUSTRIES, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

Accounting Principles

The accompanying consolidated condensed financial statements for the three months ended March 31, 2005 and 2004 have been prepared in accordance with generally accepted accounting principles (“GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X. These financial statements have not been audited by an independent registered public accounting firm, but include all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the consolidated financial condition, results of operations and cash flows for such periods. However, these results are not necessarily indicative of results for any other interim period or for the full year. The accompanying consolidated condensed balance sheet as of December 31, 2004 has been derived from audited financial statements, but does not include all disclosures required by GAAP.

Certain information and footnote disclosure normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to guidelines of the Securities and Exchange Commission (the “SEC”). Management believes that the disclosure included in the accompanying interim financial statements and footnotes are adequate to make the information not misleading, but the disclosure contained herein should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2004.

Shipping and Handling Costs

Shipping and handling costs, consisting primarily of freight paid to carriers, Company-owned delivery vehicle expenses and payroll related costs incurred in connection with storing, moving, preparing, and delivering products totaled approximately $750,000 during the three months ended March 31, 2005 and $850,000 during the three months ended March 31, 2004. These costs are included within selling and administrative expenses in the Consolidated Condensed Statement of Operations.

Floor Plan Arrangements

The Company finances certain inventory purchases in its Technology Solutions business unit through floor plan arrangements with two finance companies. At March 31, 2005 and December 31, 2004, the Company had outstanding floor plan obligations of $1.5 million and $2.2 million, respectively, which are classified within accounts payable.

Accrued Liabilities

The Company accrues for liabilities associated with disposed businesses, including amounts related to legal, environmental and contractual matters. Accrued liabilities include approximately $3.7 million and $4.3 million of amounts attributable to disposed businesses at March 31, 2005 and December 31, 2004, respectively.

Stock-Based Compensation

The Company, from time to time, grants stock options for a fixed number of shares to certain employees and directors with an exercise price equal to or greater than the fair value of the shares at the date of grant. The Company accounts for stock option grants in accordance with Accounting Principles Board Opinion (“APB”) No. 25, “Accounting for Stock Issued to Employees” and related interpretations, and, accordingly, recognizes no compensation expense for the stock option grants as the exercise price of all options granted is equal to or greater than the fair market value of the Company’s common stock at the date of grant. The following table illustrates the effect on net loss and net loss per share, for each of the three month periods ended March 31, 2005 and 2004, if the Company had applied the fair value method as prescribed by Statement of Financial Accounting Standards (“SFAS”) No. 123, “Accounting for Stock-Based Compensation,” (dollars in thousands):

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Per Share Data

Basic earnings per share data are based upon the weighted average number of common shares outstanding. Diluted earnings per share data are based upon the weighted average number of common shares outstanding plus the number of common shares potentially issuable for dilutive securities such as stock options and warrants. The weighted average number of common shares outstanding for each of the three month periods ended March 31, 2005 and 2004 is set forth in the following table (in thousands):

Recent Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 123 (revised 2004), “Share-Based Payment.” SFAS No. 123 (revised 2004) revises SFAS No. 123 and APB No. 25 and related interpretations. SFAS No. 123 (revised 2004) requires compensation cost relating to all share-based payments to employees to be recognized in the financial statements based on their fair values in the first interim or annual reporting period beginning after June 15, 2005 either on a retroactive or a prospective basis. The pro forma disclosures previously permitted under SFAS No. 123 will no longer be an alternative to financial statement recognition. In April 2005, the SEC adopted a rule that delayed the effective date of SFAS No. 123 (revised 2004) to the first annual reporting period beginning after June 15, 2005. The Company is currently estimating the potential impact of the adoption of SFAS No. 123 (revised 2004) and has not yet selected the method of adoption.

Environmental Matters

Reserves for environmental matters primarily relate to the cost of monitoring and remediation efforts, which commenced in 1998, at a former leased facility site of the Company’s Electronics circuit board manufacturer (“ESD”). The ESD business was closed in the early 1990s. At March 31, 2005 and December 31, 2004, ESD estimated future remediation and related costs totaled approximately $3.2 million and $3.3 million, respectively. At March 31, 2005, approximately $1.0 million (estimated current portion) is included in accrued liabilities and $2.2 million (estimated non-current portion) is included in deferred compensation, environmental matters and other in the Consolidated Condensed Balance Sheet. At March 31, 2005 and December 31, 2004, the estimated future amounts to be recovered from insurance totaled $2.4 million and $2.6 million, respectively. At March 31, 2005, approximately $1.1 million (estimated current portion) is included in prepaid expenses and other and $1.3 million (estimated non-current portion) is included in other assets in the Consolidated Condensed Balance Sheet.

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Litigation

Williams Electronic Games litigation: In May 1997, Williams Electronics Games, Inc. (“Williams”) filed a complaint in the United States District Court for the Northern District of Illinois (“US District Court”) against a former Williams employee and several other defendants alleging common law fraud and several other infractions related to Williams’ purchase of electronic components at purportedly inflated prices from various electronics distributors under purported kickback arrangements during the period from 1991 to 1996. In May 1998, Williams filed an amended complaint adding several new defendants, including Milgray Electronics, Inc., a publicly traded New York corporation (“Milgray”), which was acquired by the Company in a stock purchase completed in January 1997. The complaint sought an accounting and restitution representing alleged damages as a result of the infractions. The Company has not been named in any complaint and was not a party to the alleged infractions. The Company, as the successor company to Milgray, has vigorously defended the case on several grounds and continues to assert that Milgray did not defraud Williams, and that Williams suffered no damages as electronic components were purchased by Williams at prevailing market prices.

The case proceeded to trial, which commenced and ended in March 2002, with a jury verdict resulting in Milgray having no liability to Williams. In July 2002, Williams appealed the jury verdict and, in April 2004, the United States Court of Appeals for the 7th Circuit (“US Appellate Court”) rendered its decision. The US Appellate Court concluded that jury instructions issued by the US District Court were in error and the case was ordered for retrial of Williams’ fraud and restitution claims. The case has been remanded to the US District Court and a new judge has been assigned. No trial date has been set. Williams’ claim is approximately $8.7 million, not including an additional claim of $4.8 million for pre-judgment interest. While the Company cannot predict the outcome of this litigation, a final judgment favorable to Williams could have a material adverse effect on the Company’s results of operations, cash flows or financial position. Management intends to continue a vigorous defense.

Other litigation: The Company is involved in other litigation, which is incidental to its current and discontinued businesses. The resolution of the other litigation is not expected to have a material adverse effect on the Company’s results of operations, cash flows or financial position.

Business Segment Information

The Company has three reportable business segments: Technology Solutions, a provider of integrated technology solutions: Recreational Products, a distributor of replacement parts and accessories for recreational and other leisure-time vehicles; and Electronic Components, a specialty supplier and distributor of standard and custom magnetic products.

The following summarizes financial information for the Company’s reportable segments (in thousands):

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of financial condition and results of operations of the Company should be read in conjunction with, and is qualified in its entirety by, the consolidated condensed financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q, within the Company’s Annual Report on Form 10-K for the year ended December 31, 2004, and within other filings with the SEC. This discussion and analysis includes “forward-looking statements” within the meaning of Section 27A of the Securities Exchange Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding, among other things, our plans, strategies and prospects, both business and financial. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Many of the forward looking statements contained in this Quarterly Report may be identified by the use of forward-looking words such as “believe,” “expect,” “anticipate,” “should,” “planned,” “will,” “may,” and “estimated,” among others. Important factors that could cause actual results to differ materially from the forward-looking statements that we make in this Quarterly Report are set forth below, are set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2004 and are set forth in other reports or documents that we file from time to time with the SEC. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

Critical Accounting Policies

In the Company’s Annual Report on Form 10-K for the year ended December 31, 2004, the critical accounting policies were identified which affect the more significant estimates and assumptions used in preparing the consolidated financial statements. These policies have not changed from those previously disclosed.

Recent Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 123 (revised 2004), “Share-Based Payment.” SFAS No. 123 (revised 2004) revises SFAS No. 123 and APB No. 25 and related interpretations. SFAS No. 123 (revised 2004) requires compensation cost relating to all share-based payments to employees to be recognized in the financial statements based on their fair values in the first interim or annual reporting period beginning after June 15, 2005 either on a retroactive or a prospective basis. The pro forma disclosures previously permitted under SFAS No. 123 will no longer be an alternative to financial statement recognition. In April 2005, the SEC adopted a rule that delayed the effective date of SFAS No. 123 (revised 2004) to the first annual reporting period beginning after June 15, 2005. The Company is currently estimating the potential impact of the adoption of SFAS No. 123 (revised 2004) and has not yet selected the method of adoption.

Results of Operations

The Note to Consolidated Condensed Financial Statements under the heading titled “Business Segment Information”, includes a tabular summary of results of operations by business segment for the three months ended March 31, 2005 and 2004.

Net revenues

Net revenues for the three months ended March 31, 2005 decreased 16.7% to $28.7 million from $34.4 million in 2004. Net revenues are further discussed in “Technology Solutions,” “Recreational Products,” and “Electronic Components,” below.

Operating income (loss)

Operating loss for the three months ended March 31, 2005 decreased slightly to $714,000 from $729,000 in 2004. Operating results are further discussed in “Technology Solutions,” “Recreational Products,” and “Electronic Components,” below.

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Corporate costs

Corporate costs for the three months ended March 31, 2005 decreased 16.9% to $590,000 from $710,000 in 2004. The decrease is attributable to approximately $50,000 in reduced corporate payroll, $25,000 in reduced corporate related insurance costs and other net reductions in corporate expenses.

Interest, net

Net interest income for the three months ended March 31, 2005 increased 73.3% to $52,000 from $30,000 in 2004. The increase is attributable to an increase in interest rates and higher average cash balances.

Technology Solutions

Technology Solutions revenues for the three months ended March 31, 2005 decreased 25.7% to $15.4 million from $20.8 million in 2004. Product revenues for the three months ended March 31, 2005 decreased 33.9% to $8.2 million from $12.4 million in 2004. The decrease in product revenues is attributable to over $2.0 million in sales of laptops to a new client in 2004 that did not recur in 2005 and the increasingly competitive technology hardware environment. Product revenues continue to experience significant volatility due to direct sales models, intense competition and fluctuating technology purchasing cycles. Services revenues for the three months ended March 31, 2005 decreased 13.5% to $7.2 million from $8.3 million in 2004. The decrease in services revenues is attributable to the ending of an outsourcing engagement in 2004 and the ending of a help desk engagement in the current year first quarter. Decreases in services revenues from these two engagements totaling approximately $1.4 million was offset by approximately $300,000 in net increases in services revenues from new and expanded engagements. The operating loss for the three months ended March 31, 2005 increased 36.2% to $767,000 from $563,000 in 2004. The increase in operating loss is primarily attributable to the lower product and services revenues during the 2005 period, offset partially by a higher overall product gross margin percentage on 2005 product sales and continued cost containment efforts which resulted in reductions in administrative expenses.

Recreational Products

Recreational Products revenues for the three months ended March 31, 2005 decreased slightly to $11.4 million from $11.5 million in 2004, while operating income increased to $218,000 from $106,000. The decrease in revenues is attributable to decreases in sales of snowmobile, marine, and motorcycle and ATV products totaling approximately $600,000, offset by increases in sales of recreational vehicle related products totaling approximately $500,000. The increase in operating income is primarily attributable to gross margin percentage improvement from a combination of price increases and favorable product mix.

Electronic Components

Electronic Components revenues for the three months ended March 31, 2005 decreased 12.6% to $1.9 million from $2.1 million in 2004, and operating income decreased slightly to $425,000 from $438,000. Decreased product demand resulted in the lower revenues in 2005. Although overall revenues decreased, the increase in sales of specialty custom products with higher margins contributed to only a slight reduction in operating income in 2005. These custom products include custom coils and inductors used in medical test equipment and lighting fixtures, and specialty magnetic switches for use in military aircraft worldwide.

Cost of products sold

As a percentage of product revenues, cost of products sold for the three months ended March 31, 2005 decreased to 78.5% from 82.1% from in 2004. The decrease is attributable to the higher product margin percentage at the Technology Solutions business unit, gross margin percentage improvement at the Recreational Products business unit and a higher gross margin percentage on custom products at the Electronic Components business unit.

Cost of services provided

As a percentage of services revenues, cost of services provided for the three months ended March 31, 2005 increased to 83.5% from 80.8% in 2004 at the Technology Solutions business unit. The increase is primarily attributable to the $1.1 million decrease in services revenues which resulted in relatively higher payroll related costs to deliver services to existing and new clients during the first quarter of 2005 as compared to 2004.

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Selling and administrative expenses

As a percentage of sales, selling and administrative expenses for the three months ended March 31, 2005 increased to 22.7% from 20.4% in 2004. This increase is primarily attributable to the overall decrease in revenues at the Technology Solutions business unit during the first quarter of 2005 as compared to 2004 and the existence of certain fixed operating expenses. While total selling and administrative expenses were reduced by nearly $500,000 during the quarter end March 31, 2005 as compared to 2004, these expenses as a percentage of sales increased based on the overall decrease in sales during the period.

Income tax

For the three months ended March 31, 2005, the Company recorded a provision for income taxes totaling $15,000. This amount is primarily related to state taxes. No provision for income taxes was recorded in the prior year first quarter. As of March 31, 2005, the Company continues to record a full valuation allowance against net deferred tax asset balances.

Net loss

The net loss totaled $677,000 for the three months ended March 31, 2005, a decrease of $22,000 from the net loss in the prior year. The decrease in net loss resulted from the factors described above.

Changes in Financial Condition

Liquidity and Capital Resources

Selected financial data are set forth in the following tables (dollars in thousands, except per share amounts):

Net cash used in operating activities was $3.6 million for the three months ended March 31, 2005 compared with $4.9 million in 2004. The net cash used in operating activities during 2005 reflects increased accounts receivable, partially offset by increased accounts payable. The increase in accounts receivable was primarily due to increased Recreational Products business unit sales during the first quarter of 2005 as compared to the fourth quarter of 2004 and the timing of receivables collections. Additionally, extended sales terms are provided on certain product sales to Recreational Product business unit customers. Extended terms are also provided by vendors on these products and have contributed to the increase in accounts payable. The net cash used in operating activities in 2004 reflects increased accounts receivable and inventories partially offset by increased accounts payable at the Recreational Products business unit.

Net cash used in investing activities totaled $199,000 for the three months ended March 31, 2005 compared to $140,000 in 2004. Purchases of technology related products and other fixed assets totaled $199,000 and $217,000 for the three months ended March 31, 2005 and 2004, respectively. Proceeds on a note receivable from a business sold in 1999 totaled $77,000 during the three months ended March 31, 2004.

Net cash provided by financing activities totaled $55,000 and $16,000 for the three months ended March 31, 2005 and 2004, respectively, which represented proceeds from the exercise of employee stock options.

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The Company believes that sufficient cash resources exist for the foreseeable future to support requirements for its operations and commitments through available cash and cash generated by operations. However, management is evaluating its options in regard to obtaining financing, as additional cash resources may be needed to support future growth.

Off-Balance Sheet Arrangements

The Company does not have any material off-balance sheet arrangements.

Contractual Obligations and Commercial Commitments

There have been no material changes to the Company’s contractual obligations and commercial commitments as previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2004.

Factors That May Affect Future Results of Operations

In addition to other information contained in this report, we are subject to the following risks, which could materially adversely affect our business, financial condition and/or results of operations in the future.

We face certain significant risks related to the currently pending Williams litigation and from other potential litigation that could materially adversely affect our financial condition and results of operations.

We have been engaged in ongoing litigation in connection with our 1997 purchase of Milgray, which was named as a defendant by the plaintiff, Williams, in an action alleging common law fraud and other infractions related to Williams’ purchase of electronic components at allegedly inflated prices from 1991 to 1996. Despite a trial court verdict in 2002, which was favorable to us, the action has been remanded for retrial. Although the outcome of this litigation cannot be predicted, an adverse verdict could have a materially adverse effect on us. The defense of this lawsuit has required a significant amount of our management’s time and attention and, even if we prevail in defending this lawsuit, we will incur additional legal and related expenses. The disruptive effect and expense of this litigation could adversely affect our business, financial condition and/or results of operations. We also may become subject to other litigation in the future.

Our previously owned businesses subject us to potential environmental liabilities, which could adversely affect our results of operations.

We are subject to various federal, state and local environmental statutes, ordinances and regulations relating to disposal of certain toxic, volatile or otherwise hazardous substances and wastes used or generated in connection with previously owned businesses. Such laws may impose liability without regard to whether we knew of, or caused, the release of such hazardous substances. Although we establish reserves for specifically identified potential environmental liabilities, which reserves we believe to be adequate, there may be potential undisclosed environmental liabilities or liability in excess of the amounts reserved. Compliance with these environmental laws could require us to incur substantial expenses.

We rely on a limited number of hardware and software vendors to supply us with products in our technology solutions business and the loss of our ability to rely upon any of those vendors, or to obtain their products in the future would adversely affect our results of operations.

Our technology solutions business is heavily dependent on our relationships with leading hardware and software vendors and on our status as an authorized service provider. Although we are currently authorized to service the products of many industry-leading hardware and software vendors, we may not be able to maintain our relationships, or attract new relationships, with the computer hardware and software vendors that may be necessary for our technology solutions business. Since we rely upon our vendor relationships as a marketing tool, any change in these relationships could adversely affect our results of operations while we seek to establish alternative relationships with other vendors. In general, our authorization agreements with vendors include termination provisions, some of which are immediate, and we cannot predict whether vendors will continue to authorize us as an approved service provider. In addition, we cannot predict whether those vendors will authorize us as an approved service provider for new products, which they may introduce. Any impairment of these vendor relationships, or the loss of authorization as an approved service provider, could adversely affect our ability to provide the products and services which our technology solutions business requires and harm our competitive position. In addition, significant product supply shortages have resulted from time to time because manufacturers have been unable to produce sufficient quantities of certain products to meet demand. We expect to experience difficulty from time to time in obtaining an adequate supply of products from our major vendors, which may result in delays in completing sales.

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We may not be able to compete effectively with other companies in our business segments, which will cause our net sales and market share to decline and adversely affect our business, financial condition and results of operations.

Our businesses are highly competitive and we face strong competition from competitors that are substantially larger and have considerably greater financial, technical and marketing resources than us. We believe that our prices and delivery terms are competitive; however, our competitors may offer more aggressive pricing than we do. We have experienced and expect to continue to experience intense competitive pricing pressures in our businesses, which could require us to reduce prices, with a corresponding adverse impact on our operating results. Additionally, as competition in the technology industry has intensified, certain of our key technology suppliers have heightened their direct marketing initiatives. These initiatives have resulted in some of our clients electing to purchase technology products directly from the manufacturer, rather than through us. While we expect these initiatives to continue, there could be a material adverse impact on our business if the shift of clients to purchase directly from manufacturers occurs more quickly than anticipated.

Our technology solutions and electronic components businesses are dependent on a limited number of major customers and clients and the loss of any of these major customers and clients would materially and adversely affect our business, financial condition and results of operations.

Sales of our products and services in our technology solutions and electronic components businesses have been and will continue to be concentrated in a small number of clients and customers. Three of our clients accounted for approximately 39% of our total revenues for 2004 in our technology solutions business, with one client accounting for approximately 14% of our total consolidated net revenues for the year. Similarly, five customers accounted for approximately 64% of our total sales of electronic components in 2004. In the event that any of these major customers or clients should cease to purchase products or services from us, or purchase significantly fewer products and services in the future, we could experience materially adverse effects on our business, financial condition and results of operations.

Our recreational products business is seasonal and is subject to fluctuations, based upon various economic and climatic conditions that could harm us.

Sales of our recreational products are affected directly by the usage levels and purchases of recreational vehicles, snowmobiles, motorcycles and ATVs, and marine products. The purchase and, in particular, the usage of these types of vehicles, are affected by weather conditions. As a result, sales of our recreational products business are highly susceptible to unpredictable events, and ordinarily decline in the winter months resulting in losses during these periods of the year. Additionally, unusual weather conditions in a particular season, such as unusually cold weather in the spring or summer months, can cause period-to-period fluctuations in our sales of recreational products. The usage and purchases of recreational vehicles, snowmobiles, motorcycles and ATVs, and marine products are also affected by consumers’ level of discretionary income and their confidence about economic conditions and changes in interest rates and in the availability and cost of gasoline. As a result, sales of our recreational products can fluctuate based upon unpredictable circumstances that are outside of our control and can cause us harm.

Our electronic components business is cyclical and demand may decline in the future, which could adversely affect us.

During 2001 and 2002, the electronics industry experienced a decline in product demand on a global basis; resulting in order cancellations and deferrals, lower average selling prices, and a material and adverse impact on our results of operations. Demand for electronic components, which had improved in 2003 and 2004, began to decline late in 2004. While we expect that this recent decline is temporary, improvement in demand in the electronic and semiconductor component industry may not materialize. If the anticipated improvement does not materialize, demand for our electronic components may decline and adversely affect our results of operations.

A significant or prolonged economic downturn could have a material adverse effect on our results of operations in our technology solutions business.

Our results of operations are affected by the level of business activity of our clients, which in turn is affected by the level of economic activity in the industries and markets that they serve. The general economic weakness in the IT industry resulting from among other things, the decline in discretionary IT spending by our clients and prospective clients, has adversely affected our revenues in recent years. A lack of improvement or continued decline in the level of business activity of our clients could continue to adversely affect our revenues and profitability.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Company has no investments in market risk-sensitive investments for either trading purposes or purposes other than trading purposes.

Item 4. Controls and Procedures

Our management, with the participation of our acting chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2005. Based on this evaluation, the Company’s acting chief executive officer and chief financial officer concluded that, as of March 31, 2005, our disclosure controls and procedures were (1) designed to ensure that material information relating to us, including our consolidated subsidiaries, is made known to our acting chief executive officer and chief financial officer by others within those entities, particularly during the period in which this report was being prepared and (2) effective, in that they provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the fiscal quarter ended March 31, 2005 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

The Note to Consolidated Condensed Financial Statements under the heading titled “Litigation”, included in Part I of this report, is incorporated herein by reference.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

	(a)	None
	(b)	None
	(c)	None
	(d)	None

Item 3. Defaults Upon Senior Securities

     None

Item 4. Submission of Matters to a Vote of Security Holders

     None

Item 5. Other Information

     None

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Item 6. Exhibits

SIGNATURES

     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.

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