1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
/X/ Quarterly report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 2004
OR
/ / Transition report pursuant to section 13 or 15 (d) of the Securities
Exchange Act of 1934
For the transition period from to
Commission File Number 0-5525
PYRAMID OIL COMPANY
(Exact name of registrant as specified in its charter)
CALIFORNIA 94-0787340
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
2008 - 21ST. STREET,
BAKERSFIELD, CALIFORNIA 93301
(Address of principal executive offices) (Zip Code)
(661) 325-1000
(Registrant's telephone number, including area code)
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 periods 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
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the close of the period covered by this report.
COMMON STOCK WITHOUT PAR VALUE 2,494,430
(Class) (Outstanding at March 31, 2004)
2
FINANCIAL STATEMENTS
PYRAMID OIL COMPANY
BALANCE SHEETS
ASSETS
March 31, December 31,
2004 2003
(Unaudited) (Audited)
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 807,611 $ 606,799
Short-term investments 850,000 850,000
Trade accounts receivable 271,524 217,460
Interest receivable 64,454 63,430
Crude oil inventory 67,127 48,417
Prepaid expenses 83,865 114,411
Deferred income taxes 27,927 27,927
------------ ------------
TOTAL CURRENT ASSETS 2,172,508 1,928,444
------------ ------------
PROPERTY AND EQUIPMENT, at cost
Oil and gas properties and equipment
(successful efforts method) 10,786,068 10,769,838
Capitalized asset retirement costs 290,450 290,450
Drilling and operating equipment 1,819,360 1,819,360
Land, buildings and improvements 947,426 947,426
Automotive, office and other
property and equipment 968,320 967,244
------------ ------------
14,811,624 14,794,318
Less: accumulated depletion,
depreciation, amortization
and valuation allowance (12,971,407) (12,925,901)
------------ ------------
1,840,217 1,868,417
------------ ------------
OTHER ASSETS 36,819 38,237
------------ ------------
$4,049,544 $3,835,098
============ ============
The Accompanying Notes are an Integral Part of These Financial Statements.
3
PYRAMID OIL COMPANY
BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
March 31 December 31,
2004 2003
(Unaudited) (Audited)
------------ ------------
CURRENT LIABILITIES:
Accounts payable $ 45,701 $ 95,651
Accrued professional fees 22,434 33,972
Accrued taxes, other than income taxes 19,785 19,785
Accrued payroll and related costs 46,249 38,727
Accrued royalties payable 88,442 78,084
Accrued insurance 31,544 47,825
Current maturities of long-term debt 44,049 44,049
Deferred income taxes 27,927 27,927
------------ ------------
TOTAL CURRENT LIABILITIES 326,131 386,020
------------ ------------
LONG-TERM DEBT, net of current maturities 47,680 59,248
------------ ------------
LIABILITY FOR ASSET RETIREMENT OBLIGATION 934,851 930,306
------------ ------------
COMMITMENTS (note 3)
STOCKHOLDERS' EQUITY:
Common stock-no par value;
10,000,000 authorized shares;
2,494,430 shares issued and
outstanding 1,071,610 1,071,610
Retained earnings 1,669,272 1,387,914
------------ ------------
2,740,882 2,459,524
------------ ------------
$4,049,544 $3,835,098
============ ============
The Accompanying Notes are an Integral Part of These Financial Statements.
4
PYRAMID OIL COMPANY
STATEMENTS OF OPERATIONS
(UNAUDITED)
Three months ended March 31,
---------------------------
2004 2003
------------ ------------
REVENUES $599,296 $538,608
------------ ------------
COSTS AND EXPENSES:
Operating expenses 301,614 242,405
General and administrative 89,580 84,548
Taxes, other than income
and payroll taxes 13,187 14,617
Provision for depletion,
depreciation and amortization 45,506 38,799
Accretion expense 4,545 4,811
Other costs and expenses 3,626 1,086
------------ ------------
458,058 386,266
------------ ------------
OPERATING INCOME 141,238 152,342
------------ ------------
OTHER INCOME (EXPENSE):
Interest income 3,263 4,256
Gain on sale of other assets 133,582 --
Other income 3,600 3,600
Interest expense -- ( 1,873)
------------ ------------
140,445 5,983
------------ ------------
INCOME BEFORE INCOME
TAX PROVISION 281,683 158,325
Income tax provision 325 325
------------ ------------
NET INCOME BEFORE CUMULATIVE EFFECT
OF A CHANGE IN ACCOUNTING PRINCIPLE 281,358 158,000
Cumulative effect on prior years of
change in method of accounting for
asset retirement obligation -- (810,115)
------------ ------------
NET INCOME (LOSS) $ 281,358 $(652,115)
============ ============
The Accompanying Notes are an Integral Part of These Financial Statements.
5
PYRAMID OIL COMPANY
STATEMENTS OF OPERATIONS
(UNAUDITED)
Three months ended March 31,
---------------------------
2004 2003
------------ ------------
EARNINGS PER COMMON SHARE
Basic:
Income (Loss) Before Cumulative Effect
of Change in Accounting Principle $ 0.11 $ 0.06
Cumulative effect on prior years of change
in method of accounting for asset
retirement obligation -- (0.32)
------------ ------------
Net Income (Loss) $ 0.11 $(0.26)
============ ============
Diluted:
Income (Loss) Before Cumulative Effect
of Change in Accounting Principle $ 0.11 $ 0.06
Cumulative effect on prior years of change
in method of accounting for asset
retirement obligation -- (0.32)
------------ ------------
Net Income (Loss) $ 0.11 $(0.26)
============ ============
Weighted average number of
common shares outstanding 2,494,430 2,494,430
============ ============
The Accompanying Notes are an Integral Part of These Financial Statements.
6 PYRAMID OIL COMPANY
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three months ended March 31,
2004 2003
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $281,358 $(652,115)
Adjustments to reconcile net income
(loss) to cash provided by (used in)
operating activities:
Cumulative effect on prior years of
change in method of accounting for
asset retirement obligation -- 810,115
Provision for depletion,
depreciation and amortization 45,506 38,799
Gain on sale of other assets (133,582) --
Accretion expense 4,545 4,811
Changes in assets and liabilities:
Increase in trade accounts
and interest receivable (55,088) (13,766)
Decrease in crude oil inventories (18,710) ( 4,834)
Decrease in prepaid expenses 30,546 27,970
Decrease in accounts payable
and accrued liabilities (59,889) (14,669)
--------- ---------
Net cash provided by operating activities 94,686 196,311
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ( 17,306) ( 7,343)
Proceeds from sales of other assets 135,000 --
--------- ---------
Net cash provided by (used in)
investing activities 117,694 ( 7,343)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term debt ( 11,568) (11,329)
--------- ---------
Net cash used in financing activities ( 11,568) (11,329)
--------- ---------
Net increase (decrease) in cash 200,812 177,639
Cash at beginning of period 606,799 502,839
--------- ---------
Cash at end of period $807,611 $680,478
========= =========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the three months for income taxes $ 325 $ 325
========= =========
The Accompanying Notes are an Integral Part of These Financial Statements.
7 PYRAMID OIL COMPANY
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2004
(UNAUDITED)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements include the accounts of Pyramid Oil Company (the
Company). Such financial statements included herein have been prepared by the
Company, without an audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations, although the Company believes that the
disclosures are adequate to make the information presented not misleading.
A summary of the Company's significant accounting policies is contained in its
December 31, 2003 Form 10-KSB which is incorporated herein by reference. The
financial data presented herein should be read in conjunction with the
Company's December 31, 2003 financial statements and notes thereto, contained
in the Company's Form 10-KSB.
In the opinion of the Company, the unaudited financial statements, contained
herein, include all adjustments necessary to present fairly the Company's
financial position as of March 31, 2004 and the results of its operations and
its cash flows for the three month periods ended March 31, 2004 and 2003. The
results of operations for any interim period are not necessarily indicative of
the results to be expected for a full year.
(2) DIVIDENDS
No cash dividends were paid during the three months ended March 31, 2004 and
2003.
(3) COMMITMENTS
In April, the Company entered into a Joint Venture Agreement with two oil
companies, Prime Natural Resources, LLC of Houston, Texas and North Arm
Resources, Inc. Of Wayzata, Minnesota for the drilling of a 5,500 foot
exploratory well in the Blackwell's Corner area of Kern Country California.
This drilling prospect contains approximately 1,100 acres and was developed by
employing 3-D seismic technology and geology. The Company purchased a 25%
position in the prospect for approximately $53,000 and will be the Operator.
The new well is scheduled for drilling in mid May of 2004, with an estimated
cost of approximately $400,000 for a dry-hole look and $560,000 to complete
as a producer. The Company's share of these costs would be 25%. If this well
is successful, additional wells may be drilled within this prospect area.
The Company has entered into various employment agreements with key executive
employees. In the event the key executives are dismissed, the Company would
incur approximately $1,042,000 in costs.
8
(4) OTHER INCOME
The Company sold a well servicing hoist in the first quarter of 2004 for a
gain of $133,582.
(5) INCOME TAX PROVISION
The Company's income tax provision consists mainly of current minimum taxes
for California and New York. The Company is utilizing its significant net
operating loss carryforwards to offset Federal income taxes.
(6) CHANGE IN ACCOUNTING PRINCIPLE
In accordance with Statement of Financial Accounting Standards No. 143,
''Accounting for Assets Retirement Obligations'', effective January 1, 2003,
the Company changed its method of accounting for asset retirement obligations
(ARO) relating to well abandonment costs from expensing such costs in the year
the wells are abandoned to recording a liability when such costs are incurred
in order to provide a better matching of revenue and expenses and to improve
interim financial reporting.
Upon adoption of SFAS 143, the Company was required to recognize a liability
for the present value of all legal obligations associated with the retirement
of tangible long-lived assets and an asset retirement cost was capitalized as
part of the carrying value of the associated asset. Upon initial application
of SFAS 143, a cumulative effect of a change in accounting principle was also
required in order to recognize a liability for any existing ARO's adjusted for
cumulative accretion, an increase to the carrying amount of the associated
long-lived asset and accumulated depreciation on the capitalized cost.
Subsequent to initial measurement, liabilities are required to be accreted to
their present value each period and capitalized costs are depreciated over the
estimated useful life of the related assets. Upon settlement of the liability,
the Company will settle the obligation against its recorded amount and will
record any resulting gain or loss. As a result of the adoption of SFAS 143 on
January 1, 2003, the Company recorded a $272,649 increase in the net
capitalized cost of its oil and gas properties.
9
The effect of these changes for the quarter ending March 31, 2003, resulted in
a decrease in income from continuing operations of $5,945. The cumulative
effect of these changes on years prior to January 1, 2003, approximately
$810,115 ($0.23 per common share), has been charged to operations in 2003.
The effect on net income of this change in accounting methods is as follows:
Amount Per Share
-------- ---------
Cumulative effect to January 1, 2003 $(810,115) $(0.23)
Effect on three months ended March 31, 2003 (5,945) --
Effect on three months ended March 31, 2004 (5,970) --
There are no legally restricted assets for the settlement of asset retirement
obligations.
A reconciliation of the Company's asset retirement obligations from the
periods presented are as follows:
Amount
-------
Beginning Balance, January 1, 2004 $930,306
Incurred during the period --
Settled during the period --
Accretion expense 4,545
Revisions in estimates --
-------
Ending Balance, March 31, 2004 $934,851
=======
(7) SUBSEQUENT EVENT
In April 2004, the Company replaced it's $250,000 oil and gas blanket
performance surety bond, with a cash bond in the form of an irrevocable
certificate of deposit in the amount of $250,000.
10
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
IMPACT OF CHANGING PRICES
The Company's revenue is affected by crude oil prices paid by the major oil
companies. Average crude oil prices for the first quarter of 2004 increased
by approximately $1.00 per equivalent barrel when compared with the same
period for 2003. During the first quarter of 2004 the Company experienced 49
separate price changes compared with 56 price changes during the same period
for 2003. The Company cannot predict the future course of crude oil prices.
LIQUIDITY AND CAPITAL RESOURCES
Cash increased by $200,812 for the three months ended March 31, 2004. During
the first quarter of 2003, operating activities provided cash of $94,686.
Capital spending of $17,306 and principal payments on long-term debt totaling
$11,568, reduced cash for the first quarter of 2004. This was offset by
proceeds of $135,000 from the sale of one of the Company's well servicing
rigs. See the Statements of Cash Flows for additional detailed information.
A $100,000 line of credit, unused at March 31, 2004, provided additional
liquidity during the first quarter of 2004.
FORWARD LOOKING INFORMATION
In April, the Company completed a Joint Venture Agreement with two oil
companies, Prime Natural Resources, LLC of Houston, Texas and North Arm
Resources, Inc. of Wayzata, Minnesota for the drilling of a 5,500 foot
exploratory well in the Blackwell's Corner area of Kern Country California.
This drilling prospect contains approximately 1,100 acres and was developed by
employing 3-D seismic technology and geology. The Company purchased a 25%
position in the prospect for approximately $53,000 and will be the Operator.
The new well is scheduled for drilling in mid May of 2004, with an estimated
cost of approximately $400,000 for a dry-hole look and $560,000 to complete
as a producer. The Company's share of these costs would be 25%. If this well
is successful, additional wells may be drilled within this prospect area.
In April 2004, the Company converted it's $250,000 oil and gas blanket
performance bond with the California Division of Oil and Gas, from a surety
bond to a cash bond. This action was taken due to specific liability concerns
and cost savings measures to the Company. The Company pledged a $250,000
irrevocable Certificate of Deposit with the State of California, Division of
Oil and Gas.
The Company's average crude oil price has increased by approximately $5.10 per
barrel since March 31, 2004.
11
Portions of the Quarterly Report, including Management's Discussion and
Analysis, contain forward-looking statements within the meaning of the "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the Company's actual results
and performance in future periods to be materially different from any future
results or performance suggested in forward-looking statements in this
release. Such forward-looking statements speak only as of the date of this
report and the Company expressly disclaims any obligation to update or revise
any forward-looking statements found herein to reflect any changes in Company
expectations or results or any change in events. Factors that could cause
results to differ materially include, but are not limited to: the timing and
extent of changes in commodity prices of oil, gas and electricity,
environmental risk, drilling and operational costs, uncertainties about
estimates of reserves and government regulations.
Item 4. CONTROLS AND PROCEDURES
Based on their evaluation of the Company's disclosure controls and
procedures as of a date within 90 days of the filing of this Report, the Chief
Executive Officer and Chief Financial Officer have concluded that such
controls and procedures are effective. There were no significant changes in
the Company's internal controls or in other factors that could significantly
affect such controls subsequent to the date of their evaluation.
ANALYSIS OF SIGNIFICANT CHANGES IN RESULTS OF OPERATIONS
RESULTS OF OPERATIONS FOR THE QUARTER ENDED MARCH 31, 2004
COMPARED TO THE QUARTER ENDED MARCH 31, 2003
REVENUES
Oil and gas revenue increased by 11% for the three months ended March 31, 2004
when compared with the same period for 2003. Oil and gas revenue increased by
3% due to higher average crude oil prices for the first quarter of 2004.
The average price of the Company's oil and gas for the first quarter of 2004
increased by approximately $1.00 per equivalent barrel when compared to the
same period of 2003. Revenues increased by 8% due to higher production
of crude oil. The Company's net revenue share of crude oil production
increased by approximately 1,400 barrels for the first three months of 2004.
The increase in crude oil production is primarily the result of the drilling
of a new well in the second quarter of 2003.
12
OPERATING EXPENSES
Operating expenses increased by 24% for the first quarter of 2004. The cost
to produce an equivalent barrel of crude oil during the first quarter of
2004 increased by approximately $2.00 per barrel when compared with the
production costs for the first quarter of 2003. The increase in operating
expenses for the first quarter of 2003 is due primarily to activities on three
of the Company's oil producing leases. The costs of operating these three
leases increased by approximately 23% during the first quarter of 2004. The
operating costs increased by 11% on the Santa Fe lease due to work on one
well. This work has the potential to stimulate production and, if successful,
will be used as a model for work on other existing wells on this lease and in
the surrounding area. Work on another well on the Mitchel lease has increased
operating expense by 7%. The Company is performing a fishing job on stuck
tubing in an attempt to return this well to production. Operating expenses on
the Delaney Tunnell lease increased total operating costs by 5% for the first
quarter of 2004. This lease was returned to production in the first quarter
of 2004. This lease had been shut-in due to mechanical problems with the
disposal of waste water.
GENERAL AND ADMINISTRATIVE
General and administrative expenses increased by approximately 6% for the
first three months of 2004 when compared with the same period for 2003.
The increase in general and administrative expenses is due primarily to an
increase in salaries of 5% that was effective July 1, 2003.
PROVISION FOR DEPLETION, DEPRECIATION AND AMORTIZATION
The provision for depletion, depreciation and amortization increased by 17%
for the first quarter of 2004, when compared with the same period for 2003.
The increase is due primarily to a 14% increase in depletion. The increase in
depletion is due primarily to an increase in depletion on the Anderson lease
as a result of the drilling of a new well on this lease in the second quarter
of 2003.
OTHER INCOME
The Company sold a well servicing hoist in the first quarter of 2004 for a
gain of $133,582.
INCOME TAX PROVISION
The Company's income tax provision consists mainly of current minimum taxes
for California and New York. The Company is utilizing its significant net
operating loss carryforwards to offset Federal income taxes.
13
PYRAMID OIL COMPANY
PART II - OTHER INFORMATION
Item 1. - Legal Proceedings
None
Item 2. - Changes in Securities
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
Item 6. - Exhibits and Reports on Form 8-K
a. Exhibits
99.1 Certification by Chief Executive Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
99.2 Certification by Chief Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
b. No Form 8-K's were filed during the three months
ended March 31, 2004.
14
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.
PYRAMID OIL COMPANY
(registrant)
Dated: May 13, 2004 J. BEN HATHAWAY
---------------------
J. Ben Hathaway
President
Dated: May 13, 2004 JOHN H. ALEXANDER
---------------------
John H. Alexander
Vice President
PAGE <15>
Certification By Principal Executive Officer Pursuant
to Rule 13A-14 or 15D-14 of the SEC Exchange Act of 1934,
As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, J. Ben Hathaway, the President of Pyramid Oil Company (the registrant),
certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Pyramid Oil
Company;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors:
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
PAGE <16>
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Dated: May 13, 2004
By: J. BEN HATHAWAY
-----------------------
J. Ben Hathaway
Chief Executive Officer
PAGE <17>
Certification By Principal Financial Officer Pursuant
to Rule 13A-14 or 15D-14 of the SEC Exchange Act of 1934,
As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Lee G. Christianson, the Chief Financial Officer of Pyramid Oil Company
(the registrant), certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Pyramid Oil
Company;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors:
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
PAGE <18>
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Dated: May 13, 2004
By: LEE G. CHRISTIANSON
------------------------
Lee G. Christianson
Chief Financial Officer