SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
- --- of 1934
For the quarterly period ended MARCH 31, 2002 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 0-19335
BUILDING MATERIALS HOLDING CORPORATION
Delaware 91-1834269
(State of other jurisdiction of incorporation (IRS Employer
or organization) Identification No.)
Building Materials Holding Corporation
Four Embarcadero Center, Suite 3250, San Francisco, CA 94111
Telephone: (415)627-9100
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
CLASS Shares Outstanding as
----- of May 6, 2002:
Common stock $.001 par value 13,053,206
1
BUILDING MATERIALS HOLDING CORPORATION
INDEX
Page
Number
------
PART I -- FINANCIAL INFORMATION
Item 1 - Financial Statements
Condensed Consolidated Statements of Operations
for the three months ended March 31, 2002 and 2001 3
Condensed Consolidated Balance Sheets as of
March 31, 2002 and December 31, 2001 4
Condensed Consolidated Statements of Cash Flows
for the three months ended March 31, 2002 and 2001 5
Notes to Condensed Consolidated Financial Statements 6
Item 2 - Management's Discussion and Analysis of F
inancial Condition and Results of Operations 12
PART II -- OTHER INFORMATION 16
Item 1 - Legal Proceedings 16
Item 6 - Exhibits and Reports on Form 8-K 16
SIGNATURES 17
2
BUILDING MATERIALS HOLDING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(amounts in thousands, except per share data)
Three Months Ended
March 31
2002 2001
-------- --------
Net sales $247,135 $223,149
Cost of sales 175,908 159,482
-------- --------
Gross profit 71,227 63,667
Selling, general and
administrative expense 68,053 58,742
Other income, net 365 572
-------- --------
Income from operations 3,539 5,497
Equity in earnings of unconsolidated
companies, net of amortization -- 1,847
Interest expense 2,534 3,807
-------- --------
Income before income taxes and change in
accounting principle 1,005 3,537
Income taxes 387 1,362
-------- --------
Income before change in accounting
principle 618 2,175
Change in accounting principle, net of tax (11,650) --
-------- --------
Net income/(loss) $(11,032) $ 2,175
======== ========
Income before change in accounting
principle per common share:
Basic: $0.05 $0.17
===== =====
Diluted: $0.05 $0.17
===== =====
Change in accounting principle, net of tax,
per common share:
Basic: $(0.90) $ --
====== =====
Diluted: $(0.89) $ --
====== =====
Net income/(loss) per common share:
Basic: $(0.85) $0.17
====== =====
Diluted: $(0.84) $0.17
====== =====
The accompanying notes are an integral part of these condensed consolidated
financial statements.
3
BUILDING MATERIALS HOLDING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except share data)
(UNAUDITED)
March 31, December 31,
2002 2001
----------- ------------
ASSETS
Current assets
Cash $ 3,721 $ 5,182
Receivables, net 114,034 112,557
Inventories 99,042 85,826
Deferred income tax benefit 5,090 4,657
Prepaid expenses and other current assets 9,999 10,802
-------- --------
Total current assets 231,886 219,024
Property, plant and equipment, net 175,555 177,554
Goodwill and other intangibles, net 60,688 78,852
Deferred loan costs 3,850 4,387
Other long-term assets 6,894 5,925
-------- --------
Total assets $478,873 $485,742
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses $ 70,309 $ 58,120
-------- --------
Total current liabilities 70,309 58,120
Long-term debt 164,945 167,417
Deferred income taxes 1,875 7,803
Other long-term liabilities 9,264 9,508
-------- --------
Total liabilities 246,393 242,848
-------- --------
Shareholders' equity
Common stock, $0.001 par value, 20,000,000
shares authorized; 13,039,956 and 12,984,284
shares issued and outstanding,
respectively 13 13
Additional paid-in capital 111,279 110,661
Retained earnings 121,188 132,220
-------- --------
Total shareholders' equity 232,480 242,894
-------- --------
Total liabilities and shareholders' equity $478,873 $485,742
======== ========
The accompanying notes are an integral part of these condensed consolidated
financial statements.
4
BUILDING MATERIALS HOLDING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(amounts in thousands)
Three Months Ended
March 31
2002 2001
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income/(loss) $(11,032) $ 2,175
Adjustments to reconcile net income/(loss) to cash
(used in)/provided by operating activities:
Depreciation and amortization 4,592 4,102
Deferred income taxes (75) (74)
Net loss/(gain) on sale of assets 174 (13)
Equity in earnings of unconsolidated
companies, net of amortization -- (1,847)
Change in accounting principle, net of deferred
taxes of $6,286 11,650 --
Changes in assets and liabilities, net of
effects of location sales
Receivables, net (1,477) 3,474
Inventories (13,356) (477)
Prepaid expenses and other current assets 803 1,010
Accounts payable and accrued expenses 7,306 5,467
Other assets and long-term liabilities 1,343 468
-------- --------
Net cash (used in)/provided by operating
activities (72) 14,285
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (4,292) (7,624)
Acquisition of businesses (1,050) --
Proceeds from sale of business unit, net of cash sold
2,135 758
Proceeds from disposition of property and equipment
129 1,340
Other, net (644) (661)
-------- --------
Net cash used in investing activities (3,722) (6,187)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Net payments under revolving credit agreements (1,300) (2,400)
Principal payments of term notes -- (2,778)
Principal payments of other notes payable (156) --
Change in book overdrafts 3,000 (1,239)
Stock options exercised 612 --
Other, net 177 (45)
-------- --------
Net cash provided by/(used in) financing
activities 2,333 (6,462)
-------- --------
Net change in cash (1,461) 1,636
Cash, beginning of period 5,182 4,570
-------- --------
Cash, end of period $ 3,721 $ 6,206
======== ========
The accompanying notes are an integral part of these condensed consolidated
financial statements.
5
BUILDING MATERIALS HOLDING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The condensed consolidated financial statements included herein have been
prepared by Building Materials Holding Corporation ("BMHC" or the "Company") on
a consolidated basis, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in the consolidated financial statements prepared
in accordance with accounting principles generally accepted in the United States
of America ("GAAP") have been condensed or omitted pursuant to the rules and
regulations of the Securities and Exchange Commission. Although the Company
believes that the disclosures are adequate to make the information presented not
misleading, these condensed consolidated financial statements should be read in
conjunction with the Company's audited consolidated financial statements and
notes thereto included in the Company's 2001 Annual Report. In the opinion of
management, all adjustments necessary to present fairly the results for the
periods presented have been included. The adjustments made were of a normal,
recurring nature.
Due to the seasonal nature of BMHC's business, the condensed consolidated
results of operations and resulting cash flows for the periods presented are not
necessarily indicative of the results that might be expected for the fiscal
year.
2. NET SALES BY PRODUCT (in thousands)
Three Months Ended March 31,
2002 2001
--------------------- --------------------
Lumber products $ 78,484 31.8% $ 85,268 38.2%
Services and manufactured products 133,484 54.0 101,043 45.3
Building materials 19,966 8.1 22,858 10.2
Other 15,201 6.1 13,980 6.3
-------- ----- -------- -----
$247,135 100.0% $223,149 100.0%
======== ========
6
3. NET INCOME PER COMMON SHARE
Net income per common share was determined using the following information (in
thousands):
Three Months Ended March 31,
2002 2001
-------- -------
Net income/(loss) available to common
shareholders $(11,032)(1) $2,175
======== ======
Weighted average shares used to determine
basic net income/(loss) per common share
13,000 12,840
Net effect of dilutive stock options
175 35
------ ------
Weighted average shares used to determine
diluted net income/(loss) per common share
13,175 12,875
====== ======
(1) After change in accounting principle of $(11,650), net of tax
4. DEBT
At March 31, 2002 and December 31, 2001, debt consisted of the following (in
thousands):
March 31, December 31,
2002 2001
-------- --------
Term note $110,000 $110,000
Revolving credit facility 51,800 53,100
Non-interest bearing term note, net of
related discounts of $1,628 and $650,
respectively 2,661 3,794
Other 484 523
-------- --------
$164,945 $167,417
======== ========
In connection with a 1999 acquisition, the Company issued a $5,000,000
non-interest bearing term note to the previous owner as partial consideration
for the purchase. Under the terms of the note, a portion of the payments may be
due based on operating results of the acquired business. The Company's original
discount of the note was based on a 15% effective interest rate and estimates of
the operating results of the acquired business. Due to the uncertain timing of
the payout of this term note, the note represents a form of contingent
consideration paid for the acquired business. As a result, the Company adjusted
its estimates related to the timing of the payout of the term note, which
resulted in recording an additional discount of $1,074,000 during the first
quarter of 2002.
7
The scheduled principal payments of debt at March 31, 2002 are $8.0 million in
2002, $17.9 million in 2003, $136.8 million in 2004, $0.2 million in 2005 and
$2.0 million in 2006 Principal payments of $12.9 million due within the next
twelve months are expected to be refinanced through the unused portion of the
revolving credit facility. As a result, this amount has been classified as
long-term.
5. ACQUISITIONS
On July 3, 2001 the Company purchased the remaining 51% interest it did not
already own in Knipp Brothers Industries, LLC, KBI Distribution LLC and KB
Industries Limited Partnership (collectively, "KBI") for total consideration of
$34.4 million in cash, net of cash acquired of $1.8 million. As a result, KBI
operating results are included in the consolidated statements of income
beginning July 3, 2001.
On February 1, 2002 the Company purchased the assets of Tri-Trim, Inc., a
Colorado based millwork installation business, for $1.1 million in cash.
The following summarizes unaudited pro forma results of operations assuming the
July 3, 2001 acquisition of KBI (the "KBI Acquisition") occurred as of the
beginning of 2001. The pro forma information does not include the effect of the
Tri-Trim, Inc. acquisition because such effect is not material. The pro forma
data has been prepared for comparative purposes only. It does not purport to be
indicative of the results of operations that would have resulted had the KBI
Acquisition been consummated at the beginning of 2001, or that may occur in the
future (in thousands, except per share data):
Three Months
Ended March 31,
2001
(unaudited)
------------------
Net sales $258,775
Net income $ 3,379
Net income per diluted common share $0.26
8
6. EQUITY INVESTMENT
Summarized first quarter 2002 and 2001 combined income statement information of
the Company's equity-basis unconsolidated companies follows (in thousands):
Three Months Ended
March 31,
2002(1) 2001
--------- ---------
Net sales $-- $35,626
Income from operations $-- $ 1,109
Net income $-- $ 1,094
Less other members share of net income -- (558)
--- -------
Company's share of net income -- 536
Other income allocations, net of
amortization of intangibles
-- 1,311
--- -------
Equity in earnings of unconsolidated
companies
$-- $ 1,847
=== =======
(1) As a result of the KBI Acquisition, the Company no longer accounts for
its investment in KBI under the equity method of accounting
7. GOODWILL AND OTHER INTANGIBLE ASSETS
Intangible assets consisted of the following at March 31, 2002 (in thousands):
As of March 31, 2002
Gross Carrying Accumulated Net Carrying
Amount Amortization Amount
-------------- ---------------- -------------
Amortized intangible assets
Covenants not to compete $ 1,785 $ (778) $ 1,007
Other amortized intangibles 500 (250) 250
Unamortized intangible assets
Customer relationships 9,180 -- 9,180
------- ------- -------
$11,465 $(1,028) $10,437
======= ======= =======
Aggregate amortization expense for intangible assets was $176,000 for the
quarter ended March 31, 2002. Estimated amortization expense for intangible
assets is $452,000 for the remainder of 2002, $547,000 in 2003, $239,000 in
2004, $19,000 in 2005 and $0 in 2006.
9
The changes in the carrying amount of goodwill for the three months ended March
31, 2002 are as follows (in thousands):
Balance as of January 1, 2002 $68,339
Goodwill acquired during the period 922
Impairment losses(1) (17,936)
Contingent consideration adjustment(2) (1,074)
Goodwill written off related to sale of business unit --
-------
Balance as of March 31, 2002 $50,251
=======
(1) See Note 8 related to the transitional impairment analysis.
(2) See Note 4 related to the re-pricing of the non-interest
bearing note payable.
8. CHANGE IN ACCOUNTING PRINCIPLE
The Company adopted Statement of Financial Accounting Standards ("SFAS") No. 142
"Goodwill and Other Intangible Assets" in the first quarter of 2002. The
provisions of SFAS 142 eliminate the amortization of goodwill and other
indefinite lived intangible assets on a prospective basis beginning with
acquisitions completed after June 30, 2001, or January 1, 2002 for those
completed prior to June 30, 2001. This standard required the Company to complete
a transitional impairment analysis of its recorded goodwill and indefinite lived
intangible assets and to record any impairment charge as a change in accounting
principle as of the first quarter of 2002. The Company has completed the
transitional impairment analysis, which resulted in the following impaired
amounts of goodwill as of January 1, 2002 (in thousands):
Goodwill
Goodwill Impairment,
Reporting Unit Impairment Net of Tax
--------------------------------- ------------- -------------
Northern Nevada $ 2,257 $ 1,388
Utah 1,397 859
Spokane 41 25
San Antonio / Austin 2,194 1,969
Royal Door 2,975 1,830
Dallas / Fort Worth 1,403 863
Puget Sound 6,253 3,846
Portland 1,416 870
------- -------
Total $17,936 $11,650
======= =======
The Reporting Units (as defined by SFAS 142) listed above generated cash flows
during 2001 that did not meet Company expectations. Possible reasons for the
short-falls could include increased competition, a reduction in residential home
building within the geographic markets that these Reporting Units serve, or
management issues. In the case of each Reporting Unit, fair value was estimated
using the expected present value of future cash flows.
10
The following reflects adjustments that would be made to net income/(loss) and
earnings per share if the non-amortization provisions of SFAS 142 had been
adopted as of January 1, 2001 (in thousands, except per share data):
For the Quarter Ended
March 31,
2002 2001
-------- -------
Reported net income/(loss) $(11,032) $2,175
Add back: Goodwill amortization, net of tax -- 293
Add back: Customer relationship amortization,
net of tax -- 24
-------- ------
Adjusted net income/(loss) $(11,032) $2,492
======== ======
BASIC EARNINGS PER SHARE:
Reported net income/(loss) $(0.85) $0.17
Goodwill amortization, net of tax -- 0.02
Customer relationship amortization, net of tax -- 0.00
------ -----
Adjusted net income/(loss) $(0.85) $0.19
====== =====
DILUTED EARNINGS PER SHARE:
Reported net income/(loss) $(0.84) $0.17
Goodwill amortization, net of tax -- 0.02
Customer relationship amortization, net of tax -- 0.00
------ -----
Adjusted net income/(loss) $(0.84) $0.19
====== =====
11
BUILDING MATERIALS HOLDING CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS AND CRITICAL ACCOUNTING ESTIMATES
Certain statements made in this Form 10-Q may constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause our actual results, performance
or achievements, or industry results, to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. Such factors are discussed in detail in Building
Materials Holding Corporation's Form 10-K for the fiscal year ended December 31,
2001. Given these uncertainties, investors are cautioned not to place undue
reliance on such forward-looking statements. We disclaim any obligation to
update any such factors or to announce publicly the results of any revisions to
any of the forward-looking statements contained in the Annual Report on Form
10-K or this Form 10-Q except as required by law. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations" in our Annual
Report to Shareholders for information regarding our critical accounting
estimates.
The following table sets forth for the periods indicated the percentage
relationship to net sales of certain costs, expenses and income items. The table
and subsequent discussion should be read in conjunction with the consolidated
financial statements and the notes thereto appearing elsewhere herein and in the
Company's Annual Report on Form 10-K for the year ended December 31, 2001.
For The Three Months Ended
March 31,
2002 2001
------ ------
Net sales 100.0% 100.0%
Gross profit 28.8 28.5
Selling, general and
administrative expense 27.5 26.3
Other income 0.1 0.2
Income from operations 1.4 2.5
Equity in earnings of unconsolidated
companies -- 0.8
Interest expense 1.0 1.7
Income taxes 0.1 0.6
Income before change in accounting
principle 0.3 1.0
12
FIRST QUARTER OF 2002 COMPARED TO THE FIRST QUARTER OF 2001
- -----------------------------------------------------------
Net sales for the three months ended March 31, 2002 were $247.1 million, up 24.0
million from the first quarter of 2001 when sales were $223.1 million. The
increase in net sales resulted primarily from the consolidation of KBI and the
impact of inflation on commodity lumber product prices. Same-store sales
decreased 6.5%, or 9.8% after adjusting for increases in commodity lumber
prices, as compared to the first quarter of 2001 at facilities that operated for
at least two months in both the first quarter of 2001 and 2002. Construction
services and manufactured components accounted for $133.5 million, or 54.0% of
net sales for the first quarter of 2002, an increase from $101.0 million, or
45.3% of net sales for the first quarter of 2001.
Gross profit as a percentage of sales increased to 28.8% in the first quarter of
2002 from 28.5% in the first quarter of 2001, primarily as a result of increased
sales of higher margin construction services and manufactured components, such
as framing, roof trusses, pre-hung doors, millwork, and pre-assembled windows.
Selling, general and administrative (SG&A) expense was $68.1 million, or 27.5%
of net sales in the first quarter of 2002 as compared to $58.7 million, or 26.3%
of net sales in the first quarter of 2001. The Company attributes most of this
dollar increase to the additional sales of construction services and
manufactured components, which generally require higher SG&A expenses, and
increased costs related to employee compensation, health care and general
insurance. These increases are partially offset by the elimination of goodwill
amortization in accordance with new accounting standards. The percentage
increase is primarily attributable to the additional costs listed above,
partially offset by the elimination of goodwill amortization expense and the
inflation of commodity lumber product prices on net sales.
There was no equity in earnings of unconsolidated companies in the first quarter
of 2002, compared to $1.8 million in the first quarter of 2001. This decrease is
attributed to the consolidation of KBI resulting from the KBI Acquisition on
July 3, 2001.
Interest expense decreased to $2.5 million from $3.8 million during the first
three months of 2002 and 2001, respectively, primarily due to a reduction in the
weighted average interest rate to 5.1% from 9.2% between the two periods. The
impact of the reduced interest rate was partially offset by an increase in the
weighted average debt outstanding to 169.2 million during the first quarter of
2002 from $159.4 million during the same period of 2001. The
13
increase in the average debt outstanding is primarily due to additional working
capital needs related to the KBI Acquisition.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary need for capital resources is to fund future growth,
capital expenditures, and acquisitions, as well as to finance working capital
needs, which have been increasing as the Company has grown in recent years.
Capital resources have primarily consisted of cash flows from operations and the
incurrence of debt.
OPERATIONS
In the first three months of 2002 and 2001, net cash (used)/provided by
operations was $(0.1) million and $14.3 million, respectively. The decrease in
cash provided by operations is primarily due to increased purchases of inventory
in anticipation of inflation of commodity lumber prices. Working capital
increased to $161.6 million at March 31, 2002 from $135.6 million at March 31,
2001.
CAPITAL INVESTMENT AND ACQUISITIONS
Capital expenditures were $4.3 million in the first three months of 2002.
Capital expenditures were incurred to acquire additional property and expand and
remodel existing facilities. Proceeds from the sale of business units, net of
cash sold, were $2.1 million during the first three months of 2002, related to
the sale of the Jackson, Wyoming and Gardnerville, Nevada locations.
FINANCING
Net cash provided/(used) by financing activities was $2.3 million and $(6.5)
million in the first three months of 2002 and 2001, respectively. The increase
in cash provided by financing is primarily due to changes in book overdrafts and
increases in stock options exercised, partially offset by reduced payments on
borrowings during the first quarter of 2002.
At March 31, 2002 the Company's existing senior credit facility provided for
borrowings of up to $300.0 million, which includes $110.0 million provided for
by the term loan all of which was outstanding at March 31, 2002, and $190.0
million provided for by the revolving credit facility, $51.8 million of which
was outstanding at March 31, 2002. Revolver borrowings are limited by a
borrowing base equal to 60% of inventory plus 80% of trade accounts
14
receivable. The borrowing base is calculated monthly and was $150.2 million at
March 31, 2002, resulting in revolver availability of $92.0 million, net of $6.4
million in outstanding letters of credit. Borrowings under the facility bear
interest at prime plus 0.50% to 1.50%, or Offshore Rate plus 2.0% to 3.0%. The
agreement expires in 2004.
In the third quarter of 1998, a shelf registration was filed with the Securities
and Exchange Commission to register 2,000,000 shares of common stock. The
Company may issue these shares from time to time in connection with future
business combinations, mergers and/or acquisitions.
Based on the Company's ability to generate cash flows from operations, its
borrowing capacity under the revolver and its access to debt and equity markets,
the Company believes it will have sufficient capital to meet its anticipated
needs.
DISCLOSURES OF CERTAIN MARKET RISKS
The Company experiences changes in interest expense when market interest rates
change or changes are made to its debt structure. Previously, the Company has
managed its exposure to market interest rate changes through periodic
refinancing of its variable rate debt with fixed rate term debt obligations.
Based on debt outstanding at March 31, 2002, a 25 basis point increase in
interest rates would result in approximately $405,000 of additional annual
interest costs.
Commodity lumber products, including panel products, accounted for approximately
31.8% and 38.2% of net sales in the first three months of 2002 and 2001,
respectively. Prices of commodity lumber products, which are subject to
significant volatility, directly affect net sales and cost of sales and could
affect net income. The Company does not utilize any derivative financial
instruments.
The Company has a cash equity incentive plan that is partially based on changes
in the Company's stock price. Under the plan, a $1.00 increase or decrease in
the Company's stock price after March 31, 2002 would result in an increase or
decrease in compensation expense of approximately $161,000.
15
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is involved in litigation and other legal matters
arising in the normal course of business. In the opinion of
management, the Company's recovery or liability, if any,
under any of these matters will not have a material effect on
the Company's financial position, liquidity or results of
operations.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
EXHIBIT # DESCRIPTION
11.0 Statement regarding computation of earnings per share
(see Note 3)
(b) Reports on Form 8-K - None filed
16
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.
BUILDING MATERIALS HOLDING CORPORATION
Date: May 6, 2002 /s/ Robert E. Mellor
------------------------------------------
Robert E. Mellor
Chairman of the Board, President, and
Chief Executive Officer (Principal
Executive Officer)
Date: May 6, 2002 /s/ Ellis C. Goebel
------------------------------------------
Ellis C. Goebel
Senior Vice President - Finance
and Treasurer
(Principal Financial Officer)