Net sales and revenue for the first nine months of fiscal year 2007 were $162.8 million compared to $179.0 million for the first nine months of fiscal year 2006. This represents a decrease of $16.2 million or 9.1% . This decrease was primarily caused by a decrease in comparable store sales of 10.0% for the first nine months of fiscal year 2007.
The appliance product category positively impacted comparable store sales for the first nine months of fiscal year 2007 by 1.4% . The appliance category increase is related to an increased promotional effort and an increase in the breadth of products offered. These positive trends were offset by a decline in air conditioner sales. The television, audio and video categories negatively impacted comparable store sales for the first nine months of fiscal year 2007 by 6.7%, 2.9% and 1.4%, respectively. The television category decrease results from gains in LCD television sales being more than offset by declines in plasma, light engine and traditional tube televisions. The video category has generally been impacted by lower price points, as many of these products continue to become more of a commodity item with very high levels of competition. The audio category decline is consistent with industry trends away from traditional audio products.
The following table reflects the approximate percent of net sales for each major product group for the following periods:
As of October 31, 2007, we operated 124 stores compared to 207 stores one year earlier. We did not open any stores and closed 69 stores during the first nine months of fiscal year 2007. We are marketing five of the closed locations for lease or sale. We sold 46 of the closed stores and abandoned 18 of the stores upon the expiration of our lease as tenant. We did not open any stores and closed 11 stores during the first nine months of fiscal year 2006.
At October 31, 2007, we had lease agreements, as landlord/sub landlord, for all or parts of 12 properties. We own nine of these properties and are the tenant/sub landlord for three of the properties. In two of the owned locations, we operate a store and lease a portion of the property to another party. We do not operate a store in the seven remaining leased properties. We have six owned properties that are vacant at October 31, 2007. The assets for one of these properties are classified as assets held for sale.
Gross profit in the third quarter of fiscal year 2007 was $16.5 million (28.0% of net sales and revenue) compared to $16.6 million (27.1% of net sales and revenue) recorded in the third quarter of fiscal year 2006. This represents a decrease of $0.1 million or 0.6% . Gross profit for the first nine months of fiscal year 2007 was $49.1 million (30.1% of net sales and revenue) compared to $50.1
million (28.0% of net sales and revenue) for the first nine months of fiscal year 2006. Gross profit margin for the third quarter and first nine months of fiscal year 2007 was positively impacted by a higher percentage of recognized extended warranty income, which has higher gross margins than other revenue categories.
Selling, general and administrative expenses for the third quarter of fiscal year 2007 were $15.6 million (26.6% of net sales and revenue), a decrease of $1.6 million or 9.3% from $17.2 million (28.1% of net sales and revenue) for the third quarter of fiscal year 2006. Selling, general and administrative expenses were $47.0 million (28.9% of net sales and revenue) for the first nine months of fiscal year 2007 representing a decrease of $3.4 million or 6.7% from $50.4 million (28.1% of net sales and revenue) for the first nine months of fiscal year 2006. The decrease in expenses was primarily a result of lower advertising expenses as we had fewer markets to serve after our store closings and lower payroll expenses as we eliminated numerous positions during the first nine months of fiscal year 2007 and overall lower commission levels.
Interest income was $1,503,000 and $341,000 for the third quarter of fiscal years 2007 and 2006 respectively. Excess cash, primarily from the sale of real estate accounted for approximately $1,059,000 of the increase while ethanol investments accounted for approximately $103,000 of the increase.
Interest income was $4,772,000 and $920,000 for the first nine months of fiscal years 2007 and 2006 respectively. Excess cash, primarily from the sale of real estate accounted for approximately $2,413,000 of the increase while ethanol investments accounted for approximately $1,439,000 of the increase.
Interest expense was $59,000 for the third quarter of fiscal year 2007 compared to $387,000 for the third quarter of fiscal year 2006. Interest expense was $199,000 for the first nine months of fiscal year 2007 compared to $1,084,000 for the first nine months of fiscal year 2006. Interest expense for the current year has been lowered due to capitalizing interest on certain of our ethanol investments and paying off mortgage debt related to store real estate sales.
We paid off approximately $15.6 million of debt in connection with the real estate sale and leaseback transaction with Klac. As a result, we incurred prepayment penalties and the write off of prepaid loan fees totaling approximately $651,000.
On April 30, 2007, we completed a transaction for the sale of 86 of our current and former store locations to Klac for $74.5 million in cash, before selling expenses. We also entered into leases to leaseback 40 of the properties from Klac for initial lease terms expiring January 31, 2010, with renewal options for up to 15 additional years. Both parties may terminate a lease after the initial six months of the initial lease term on 28 of the leases. We also entered into license agreements with Klac for 15 of the properties that allowed us to occupy the properties for up to 90 days rent free. Upon the expiration of the license period, we vacated the 15 properties.
A pre-tax gain of $3.2 million (net of expenses and losses) resulted from the Klac sale in the first quarter of fiscal year 2007. Of this gain, $2.2 million was classified as discontinued operations and the remaining $1.0 million was classified as continuing operations. We also deferred $11.6 million, which represented the present value of the minimum lease payments and a portion of the gain
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associated with stores that we had continuing involvement with, as defined in SFAS 98, “Accounting for Leases”. Approximately $1.0 million of the deferred gain was recognized during the third quarter of fiscal year 2007. Of this gain, $0.5 million was classified as discontinued operations and the remaining $0.5 million was classified as continuing operations. Approximately $8.4 million of the deferred gain was recognized during the first nine months of fiscal year 2007. Of this gain, $6.9 million was classified as discontinued operations and the remaining $1.5 million was classified as continuing operations. The leases have been accounted for as operating leases.
The following table summarizes the components of the sale and leaseback transaction (amounts in thousands):
| | Number of | | | | | | | Recognized Gain |
| Property Category | | Properties | | Deferred Gain | | (Loss) |
| |
| Vacated | | | 56 | | | | $ | - | | | | $ | 6,150 | |
| Leased until January 31, 2010 | | | 12 | | | | | 3,953 | | | | | 66 | |
| Leased until January 31, 2010 | | | | | | | | | | | | | | |
| (6 month kickout clause) | | | 18 | | | | | 2,409 | | | | | 2,227 | |
| Total | | | 86 | | | | $ | 6,362 | | | | $ | 8,443 | |
During the third quarter and nine months ended October 31, 2007, we completed a sale and leaseback of one of our stores. The lease has a month to month term and shall expire no later than January 31, 2008. A pre-tax gain of $951,000 (net of expenses) resulted from this sale. We deferred $36,000, which represents the present value of the minimum lease payments and will amortize this deferred gain as a reduction to lease expense over the lease term. The lease has been accounted for as an operating lease.
During the third quarter of fiscal year 2007, we recognized income of approximately $584,000 and a loss of approximately $49,000 from our equity investments in Big River Resources, LLC and Patriot Renewable Fuels, LLC, respectively. During the first nine months of fiscal year 2007, we recognized income of approximately $1,963,000 and $94,000 from our equity investments in Big River Resources, LLC and Patriot Renewable Fuels, LLC, respectively.
On August 29, 2007, US BioEnergy Corporation completed the acquisition of Millennium Ethanol, LLC (“Millennium”). In connection with the acquisition, we received 3,693,858 shares of US BioEnergy Common Stock and approximately $4.8 million of cash as total consideration for our interest in Millennium Ethanol, LLC based upon the conversion of our $14 million convertible secured promissory note, accrued interest and related purchase rights. We recorded a realized gain (pre- tax) of $27.4 million and an unrealized loss (pre-tax) of $10.3 million related to our holdings of US BioEnergy common stock during the third quarter of fiscal year 2007.
Results for the third quarter and first nine months of fiscal years 2007 and 2006 reflect the impact of the sales of our investment in Colona SynFuel Limited Partnership, L.L.L.P. (Colona) and Somerset Synfuel, L.P. (Somerset), which produce synthetic fuel. We sold our ownership interest in
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the Colona limited partnership through a series of three sales. Effective October 1, 2005, we sold our entire ownership interest in the Somerset limited partnership that owned two synthetic fuel facilities.
Effective March 30, 2004, we sold our entire membership interest in a limited liability company that owned a synthetic fuel facility in Gillette, Wyoming. We received $2.8 million at the time of sale along with a secured contingent payment note that could provide additional investment income to us. The facility resumed commercial operations during the second quarter of fiscal year 2005; as such, we received $3.5 million as a one-time payment per the terms of the purchase agreement. In addition, we are eligible to receive $1.50 per ton of “qualified production” produced by the facility and sold through 2007. The plant was subsequently sold and during the third quarter of fiscal year 2006, we modified our agreement with the owners and operators of the synthetic fuel facility. Based on the terms of the agreement, we are not currently able to determine the likelihood of collecting payments related to production occurring after September 30, 2006. Thus, we cannot currently determine the impact and timing of income recognition related to production occurring after September 30, 2006. At October 31, 2007, we estimate that there is approximately 4.0 million tons of production for which we did not recognize income and which is subject to phase outs as a result of higher oil prices during fiscal year 2007. See Note 12 for further discussion of income from synthetic fuel sales.
Below is a table summarizing the income (loss) recognized from the sales, net of certain expenses, of our interests in synthetic fuel entities.
| | Three Months Ended | | Nine Months Ended |
| | October 31, | | October 31, |
| | 2007 | | | 2006 | | 2007 | | 2006 |
|
| February 1, 1999 Colona sale | | $ | (738 | ) | | $ | 1,130 | | $ | 2,156 | | $ | 1,492 |
| July 31, 2000 Colona sale | | | (589 | ) | | | 902 | | | 1,720 | | | 1,457 |
| May 31, 2001 Colona sale | | | (523 | ) | | | 802 | | | 1,529 | | | 1,296 |
| October 1, 2005 Somerset sale | | | (10 | ) | | | 2,396 | | | 2,874 | | | 3,347 |
| March 30, 2004 Gillette sale | | | - | | | | 635 | | | - | | | 1,058 |
| | | $ | (1,860 | ) | | $ | 5,865 | | $ | 8,279 | | $ | 8,650 |
Our effective tax rate was 38.8% and 32.2% for the third quarter of fiscal years 2007 and 2006, respectively. Our effective tax rate was 39.1% and 34.5% for the first nine months of fiscal years 2007 and 2006, respectively.
Minority interest of $32,000 for the quarter ended October 31, 2007 and ($12,000) for the nine months ended October 31, 2007, represents the owners’ (other than us) share of the income or loss of Levelland/Hockley County Ethanol, LLC.
During the quarter and nine months ended October 31, 2007 we closed 13 and 58 stores, respectively, that were classified as discontinued operations. As a result of these closings and certain other store closings from prior periods, we had a loss from discontinued operations, net of tax benefit, of $0.4 million for the third quarter of fiscal year 2007 compared to $0.1 million for the third quarter of fiscal year 2006. We had a loss from discontinued operations, net of tax benefit, of $1.8 million
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for the first nine months of fiscal year 2007 compared to $0.1 million for the first nine months of fiscal year 2006.
We had a gain from the disposal of discontinued operations, net of tax expense, of approximately $3.4 million for the third quarter of fiscal year 2007 compared to $1.1 million for the third quarter of fiscal year 2006. We had a gain from the disposal of discontinued operations, net of tax expense, of approximately $8.6 million for the first nine months of fiscal year 2007 compared to $1.1 million for the third quarter of fiscal year 2006.
As a result of the foregoing, net income for the third quarter of fiscal year 2007 was $14.7 million, an increase of $9.9 million from $4.8 million for the third quarter of fiscal year 2006. Net income for the first nine months of fiscal year 2007 was $28.0 million, an increase of $20.2 million from $7.8 million for the first nine months of fiscal year 2006.
Critical Accounting Policies and Estimates
In preparing our financial statements, we make estimates, assumptions and judgments that can have a significant impact on our net revenue and sales, net income or loss, as well as on the value of certain assets and liabilities on our balance sheet. We believe that the estimates, assumptions and judgments involved in the accounting policies described in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of our Annual Report on Form 10-K for the fiscal year ended January 31, 2007 have the greatest potential impact on our financial statements, so we consider them to be our critical accounting policies and estimates. Except for the change to our income tax policy that is discussed in “Income Taxes - Adoption of FIN 48” below, we believe that during the first nine months of fiscal year 2007 there were no significant changes in those critical accounting policies and estimates. Senior management has reviewed the development and selection of our critical accounting policies and estimates and their disclosure in the Quarterly Report on Form 10-Q with the Audit Committee of our Board of Directors.
Income Taxes - Adoption of FIN 48
We adopted FIN 48, “Accounting for Uncertainty in Income Taxes” on February 1, 2007. See Note 14 to the financial statements. As a result of our adoption of FIN 48, we recognize and measure benefits for uncertain tax positions accounted for in accordance with Statement of Financial Accounting Standards (SFAS) No. 109, “Accounting for Income Taxes”, using a two-step approach. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained upon audit, including resolution of any related appeals or litigation processes. For tax positions that are more likely than not of being sustained upon audit, the second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. Significant judgment is required to evaluate uncertain tax positions. We evaluate our uncertain tax positions on a quarterly basis. Our evaluations are based upon a number of factors, including changes in facts or circumstances, changes in tax law, correspondence with tax authorities during the course of audits and effective settlement of audit issues. Changes in the recognition or measurement of uncertain tax positions could result in material increases or decreases in our income tax expense in the period in which we make the change.
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We expect that the forward cash purchase contracts of sorghum entered into by Levelland/Hockley will meet the definition of a derivative under SFAS No. 133, but will qualify for the normal purchases exception to fair value accounting. These contracts provide for the purchase of sorghum that will be delivered in quantities expected to be used over a reasonable period in the normal course of business. We expect these contracts to be accounted for as executory contracts under the accrual method of accounting and not recorded as fair value. Accordingly, we expect that costs related to purchases will be recorded as cost of goods sold.
We expect that the interest rate swap entered into by Levelland/Hockley will be considered a free-standing derivative. As such, we expect that the fair value of the swap will be recorded as an asset or a liability on our consolidated balance sheet (included in Other Assets or Other Liabilities), with any resulting change in value recorded as a component of net income (loss).
Liquidity and Capital Resources
Net cash used in operating activities was approximately $4.1 million for the first nine months of fiscal year 2007, compared to $15.4 million for the first nine months of fiscal year 2006. For the first nine months of fiscal year 2007, cash was provided by net income of $28.0 million, adjusted for the impact of $8.3 million for gains on our installment sales of the limited partnership interests, $17.1 million for realized and unrealized gains on investments, the gain on the disposal of real estate and property and equipment of $15.2 million, dividends received from equity method investees of $0.5 million and non-cash items of $0.7 million, which consisted of depreciation and amortization, stock based compensation expense, impairment charges, income from equity method investments, deferred income and the deferred income tax provision. In addition, accounts payable provided cash of $5.9 million, primarily a result of changes in inventory levels and extended terms from certain vendors. The primary use of cash was an increase in inventory of $8.3 million primarily due to seasonal fluctuations. The inventory increase from January 31, 2007 primarily results from higher television and air conditioner levels. The other sources of cash were a decrease in other assets of $5.4 million, a decrease in accounts receivable of $0.7 million and an increase in other current liabilities of $4.9 million.
For the first nine months of fiscal year 2006, cash was provided by net income of $7.8 million, adjusted for the impact of $8.7 million for gains on our installment sales of the limited partnership interests, non-cash items of $2.4 million, which consisted of depreciation and amortization, stock based compensation expense, impairment charges, deferred income, gain on disposal of fixed assets, and the deferred income tax provision. In addition, accounts payable provided cash of $2.2 million, primarily a result of the timing of vendor payments. The primary use of cash was an increase in inventory of $18.7 million primarily due to seasonal fluctuations.
At October 31, 2007, working capital was $123.9 million compared to $83.8 million at January 31, 2007. This increase is primarily a result of the real estate sale and leaseback transaction and greater cash proceeds from our synthetic fuel investments. The ratio of current assets to current liabilities was 2.8 to 1 and 2.6 to 1 at October 31, 2007 and January 31, 2007, respectively.
Cash of $80.4 million was provided by investing activities for the first nine months of fiscal year 2007, compared to $8.2 million for the first nine months of fiscal year 2006. During the first
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nine months of fiscal year 2007, we received proceeds of $92.9 million from the sale and leaseback transaction with Klac and other real estate sales, $15.4 million from the installment sales of our ownership interests in synthetic fuel entities and $4.8 million from the sale of our interest in Millennium. The acquisition of One Earth provided cash of $8.6 million as One Earth’s cash balance of $59.3 million exceeded the purchase price of $50.7 million. We purchased an equity investment in Big River of $15.0 million during the first nine months of fiscal year 2007. We had capital expenditures of approximately $26.2 million during the first nine months of fiscal year 2007, primarily related to Levelland/Hockley ethanol plant construction.
Cash of $8.2 million was provided by investing activities for the first nine months of fiscal year 2006. We paid $5.0 million for an equity investment in Big River and received proceeds of $9.3 million from the sale of real estate and fixed assets during the first nine months of fiscal year 2006. The acquisition and resulting consolidation of Levelland/Hockley provided cash of $1.7 million as Levelland Hockley’s cash balance of $13.2 million exceeded the purchase price of $11.5 million. Additionally, during the first nine months of fiscal year 2006, we received proceeds of $2.7million from installment sales of our ownership interests in synthetic fuel entities. We had capital expenditures of approximately $0.4 million during the first nine months of fiscal year 2006, primarily related to improvements at selected stores.
Cash used in financing activities totaled approximately $16.4 million for the first nine months of fiscal year 2007 compared to cash provided by financing activities of $1.8 million for the first nine months of fiscal year 2006. Cash of approximately $22.6 million was used to repay mortgage debt. Cash was provided by new debt borrowings of $15.7 million and stock option activity of $3.4 million. We also recorded a tax benefit of approximately $1.8 million during the first nine months of fiscal year 2007 from the exercise of non-qualified stock options as an increase in additional paid-in capital. Cash of approximately $12.9 million was also used to acquire 682,000 shares of our common stock. As of October 31, 2007, we had approximately 318,000 authorized shares remaining available for purchase under the stock buy-back program.
Cash provided by financing activities totaled approximately $1.8 million for the first nine months of fiscal year 2006. Cash was provided by stock option activity of $1.8 million. We also recorded a tax benefit of approximately $1.0 million during the first nine months of fiscal year 2006 from the exercise of non-qualified stock options as an increase in additional paid-in capital. Cash of $3.1 million was used for scheduled payments of mortgage debt and cash of $3.1 million was provided by new borrowings.
In August 2007, we entered into a conditional agreement to fund up to an additional $2.1 million in Levelland/Hockley in the form of either subordinated debt or equity.
We believe we have sufficient resources to fund this and other potential alternative energy investments.
In June 2006, Levelland/Hockley entered into an agreement with a designer/builder for the construction of Levelland’s ethanol plant. The designer/builder is responsible for all engineering, labor, materials and equipment to design, construct, startup and achieve guaranteed performance criteria of the plant. The contract price is approximately $58.4 million, of which $34.2 million has been spent through October 31, 2007.
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On July 25, 2002, Levelland/Hockley entered into an agreement with RIO Technical Services, Inc., (“RIO”) regarding the planning, financing, design and construction of Levelland’s ethanol plant. RIO is a related party, as certain officers of RIO own equity interests in Levelland/Hockley. The Company estimates that fees for these services will be approximately $3.0 million, of which approximately $1.3 million has been spent through October 31, 2007.
Levelland/Hockley began borrowing on its construction loan during the third quarter of fiscal year 2007; thus, we anticipate incurring additional interest charges subsequent to October 31, 2007.
In May, 2007, One Earth entered into a design/build contract with a designer/builder for the design and construction of One Earth’s ethanol plant for $120.2 million, exclusive of any change orders the Company may approve. One Earth paid a $1 million non-refundable commitment fee which will be credited against the contract price.
In June 2007, One Earth entered into a design/build agreement for the installation of a rail system for the plant. The contract price is approximately $1.6 million, none of which has been spent through October 31, 2007.
See Note 18 to the financial statements for events affecting our investment in US BioEnergy Corporation.
Forward-Looking Statements
This Form 10-Q contains or may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Such statements can be identified by use of forward-looking terminology such as “may,” “expect,” “believe,” “estimate,” “anticipate” or “continue” or the negative thereof or other variations thereon or comparable terminology. Readers are cautioned that there are risks and uncertainties that could cause actual events or results to differ materially from those referred to in such forward-looking statements. These risks and uncertainties include the risk factors set forth from time to time in the Company’s filings with the Securities and Exchange Commission and among other things: risks and uncertainties relating to the uncertainty of the financial performance of US BioEnergy Corporation; fluctuations in the market prices and trading volumes of US BioEnergy Corporation common stock; the highly competitive nature of the consumer electronics retailing industry, changes in the national or regional economies, weather, the effects of terrorism or acts of war on consumer spending patterns, the availability of certain products, technological changes, changes in real estate market conditions, new regulatory restrictions or tax law changes relating to the Company’s synthetic fuel investments, the fluctuating amount of quarterly payments received by the Company with respect to sales of its partnership interest in a synthetic fuel investment, the potential for Section 29/45K tax credits to phase out based on the price of crude oil adjusted for inflation, and the uncertain amount of synthetic fuel production and resulting income received from time to time from the Company’s synthetic fuel investments. As it relates to ethanol investments, risks and uncertainties include among other things: the uncertainty of constructing plants on time and on budget, the price volatility of corn, dried distiller grains, ethanol, gasoline and natural gas, and the ability to remain in compliance with related debt covenants.Other factors that could cause actual results to differ materially from those in the forward-looking statements are set forth in Item 1A of the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2007 (File No. 001-09097).
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
No material changes since January 31, 2007.
Item 4. Controls and Procedures
Our management evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures, as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
There were no changes in our internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1A. Risk Factors
During the quarter ended October 31, 2007, there have been no material changes to the risk factors discussed in our Annual Report on Form 10-K for the year ended January 31, 2007.
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Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities
| | | | | | | | | | Total Number of | | Maximum Number |
| | | | | | | | | | Shares Purchased | | of Shares that May |
| | Total Number | | Average Price | | as Part of Publicly | | Yet Be Purchased |
| | of Shares | | Paid per | | Announced Plans | | Under the Plans |
| Period | | Purchased | | Share | | or Programs (1) | | or Programs (1) |
| August 1-31, 2007 | | | 259,300 | | | | $19.24 | | | | 259,300 | | | | 545,300 | |
| September 1-30, 2007 | | | 22,500 | | | | $18.82 | | | | 22,500 | | | | 522,800 | |
| October 1-31, 2007 | | | 205,200 | | | | $17.92 | | | | 205,200 | | | | 317,600 | |
| Total | | | 487,000 | | | | $18.67 | | | | 487,000 | | | | 317,600 | |
| (1) | On May 31, 2007, our Board of Directors increased our share repurchase authorization to 1,000,000 shares of common stock, inclusive of prior authorizations. At October 31, 2007, a total of 317,600 shares remained available to purchase under this authorization. |
| |
Item 6. Exhibits.
| The following exhibits are filed with this report: |
| |
| | 31 | Rule 13a-14(a)/15d-14(a) Certifications |
| | | |
| | 32 | Section 1350 Certifications |
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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.
| | REX STORES CORPORATION
Registrant |
| Signature | | Title | | Date |
| |
| /s/ Stuart A. Rose | | Chairman of the Board | | December 7, 2007 |
| (Stuart A. Rose) | | (Chief Executive Officer) | | |
| |
| |
| /s/ Douglas L. Bruggeman | | Vice President, Finance and Treasurer | | December 7, 2007 |
| (Douglas L. Bruggeman) | | (Chief Financial Officer) | | |
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