##### 









SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





Form 10-K


| |   |  |  |                                                                                         
| | - |  |  | ----------------------------------------------------------------------------------------
| | þ |  |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934
| |   |  |  | For the year ended December 31, 2004                                                    

Commission file number 1-11471





|                                                                              |  |                                                    
|----------------------------------------------------------------------------- |  | ---------------------------------------------------
|California(State or other jurisdiction
     of incorporation or organization) |  | 95-2039211(I.R.S. Employer
     Identification No.)

|                                                                                                     |  |                
|---------------------------------------------------------------------------------------------------- |  | ---------------
|1960 E. Grand Ave
     Suite 560
     El Segundo, California(Address of principal executive offices) |  | 90245(Zip Code)

Registrants telephone number, including area code:


(310) 563-2355





Securities registered pursuant to Section 12(b) of the
Act:


|                    |  |                                                   
|------------------- |  | --------------------------------------------------
|Title of each class |  | Name of each exchange on which registered         
|                    |  |                                                   
|Common stock        |  | American Stock Exchange
    Pacific Stock Exchange

Securities registered pursuant to Section 12(g) of the
Act:


None.




þ o




þ




o þ






DOCUMENTS INCORPORATED BY REFERENCE












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##### 










TABLE OF CONTENTS


|              |  |                                                                                                                             |  |   
|------------- |  | --------------------------------------------------------------------------------------------------------------------------- |  | --
|PART I       
|Item 1.       |  | Business                                                                                                                    |  | 1 
|Item 2.       |  | Properties                                                                                                                  |  | 3 
|Item 3.       |  | Legal Proceedings                                                                                                           |  | 3 
|Item 4.       |  | Submission of Matters to a Vote of Security
    Holders                                                                     |  | 4 
|PART II      
|Item 5.       |  | Market for the Registrants Common
    Equity and Related Shareholder Matters and Issuer Purchases of
    Equity Securities |  | 4 
|Item 6.       |  | Selected Financial Data                                                                                                     |  | 5 
|Item 7.       |  | Managements Discussion and Analysis
    of Financial Condition and Results of Operations                                   |  | 6 
|Item 7A.      |  | Quantitative and Qualitative Disclosures
    About Market Risk                                                              |  | 18
|Item 8.       |  | Financial Statements and Supplementary
    Data                                                                             |  | 19
|Item 9.       |  | Changes in and Disagreements with
    Accountants on Accounting and Financial Disclosure                                    |  | 37
|Item 9A.      |  | Controls and Procedures                                                                                                     |  | 37
|PART III     
|Item 10.      |  | Directors and Executive Officers of the
    Registrant                                                                      |  | 37
|Item 11.      |  | Executive Compensation                                                                                                      |  | 38
|Item 12.      |  | Security Ownership of Certain Beneficial
    Owners and Management                                                          |  | 38
|Item 13.      |  | Certain Relationships and Related
    Transactions                                                                          |  | 38
|Item 14.      |  | Principal Accountant Fees and Services                                                                                      |  | 38
|PART IV      
|Item 15.      |  | Exhibits and Financial Statement
    Schedule                                                                               |  | 38
|SIGNATURES    |  | 41                                                                                                                         
|EXHIBIT INDEX |  | 42                                                                                                                         
|EXHIBIT 10.r. |  |                                                                                                                            
|EXHIBIT 10.v. |  |                                                                                                                            
|EXHIBIT 10.w. |  |                                                                                                                            
|EXHIBIT 21    |  |                                                                                                                            
|EXHIBIT 23    |  |                                                                                                                            
|EXHIBIT 31.1  |  |                                                                                                                            
|EXHIBIT 31.2  |  |                                                                                                                            
|EXHIBIT 32.1  |  |                                                                                                                            
|EXHIBIT 32.2  |  |                                                                                                                            





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##### 



CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS






| |   |                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------
| |  | reduced technology product sales as major suppliers increasingly
    sell directly to end-users;       
|
| |  | decreased sales and margins due to price competition;                                                  
|
| |  | increase in outsourced services to foreign countries;                                                  
|
| |  | ineffectiveness of our business development efforts and
    inability to obtain new client engagements;
|
| |  | delays and unexpected costs associated with new client
    engagements;                                
|
| |  | non renewal or termination of existing client engagements;                                             
|
| |  | continued transition of electronics manufacturing to Asia;                                             
|
| |  | failure to attract and retain key employees;                                                           
|
| |  | the impact of adverse weather conditions on our Recreational
    Products business unit;               
|
| |  | costs associated with litigation and environmental matters from
    disposed businesses; and           
|
| |  | general business conditions and economic uncertainty.                                                  







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##### 






PART I





Item 1.     Business




Technology Solutions
















1



---



##### 



Recreational Products








Electronic Components








Company Information




Information on Company Website






| |   |                                                                                                                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | its corporate Code of Ethics for Directors, Officers and
    Employees, which qualifies as a code of ethics as
    defined by Item 406 of Regulation S-K of the
    Securities and Exchange Act of 1934;
|
| |  | charters for its Audit Committee, Nominating Committee and
    Compensation Committee.                                                                                                                    

2



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##### 










|        |           
|------- | ----------
|Item 2. | Properties



|                      |  |                       |        |  |        |  |     |  |  |  |         |  |  |  |      | 
|--------------------- |  | --------------------- | ------ |  | ------ |  | --- |  |  |  | ------- |  |  |  | ---- | 
|                      |  | Area in square feet   |       
|                      |  | (number of locations) |       
|                      |  |                       |       
|                      |  | Owned                 |        |  | Leased | 
|                      |  |                       |        |  |        | 
|Technology Solutions  |  |                       |        |  |        |  |     |  |  |  | 93,000  |  |  |  | (11) | 
|Recreational Products |  |                       |        |  |        |  |     |  |  |  | 184,000 |  |  |  | (3)  | 
|Electronic Components |  |                       | 20,000 |  |        |  | (1) |  |  |  |         |  |  |  |      | 
|Corporate             |  |                       |        |  |        |  |     |  |  |  | 3,000   |  |  |  | (1)  | 
|                      |  |                       |        |  |        |  |     |  |  |  |         | 
|                      |  |                       | 20,000 |  |        |  | (1) |  |  |  | 280,000 |  |  |  | (15) | 
|                      |  |                       |        |  |        |  |     |  |  |  |         | 








|        |                  
|------- | -----------------
|Item 3. | Legal Proceedings

Williams Electronic Games litigation:


th


Other litigation:


3



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##### 








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






PART II







|        |                                                                                                                            
|------- | ---------------------------------------------------------------------------------------------------------------------------
|Item 5. | Market for the Registrants Common Equity and Related
    Shareholder Matters and Issuer Purchases of Equity
    Securities



|                             |       |               |   |      |         |  |   |         |  |  |         |      |  |  |   |      | 
|---------------------------- | ----- | ------------- | - | ---- | ------- |  | - | ------- |  |  | ------- | ---- |  |  | - | ---- | 
|                             |       | Quarter ended |  
|                             |       |               |  
|                             |       | Mar. 31       |   |      | Jun. 30 |  |   | Sep. 30 |  |  | Dec. 31 |     
|                             |       |               |   |      |         |  |   |         |  |  |         |     
|Year ended December 31, 2004 |       |               |   |      |         |  |   |         |  |  |         |      |  |  |   |     
|                             | High  |               | $ | 3.29 |         |  | $ | 3.20    |  |  | $       | 3.06 |  |  | $ | 3.70 | 
|                             | Low   |               |   | 2.36 |         |  |   | 2.80    |  |  |         | 2.45 |  |  |   | 2.70 | 
|                             | Close |               |   | 3.05 |         |  |   | 3.00    |  |  |         | 2.85 |  |  |   | 3.26 | 
|Year ended December 31, 2003 |       |               |   |      |         |  |   |         |  |  |         |      |  |  |   |     
|                             | High  |               | $ | 1.69 |         |  | $ | 2.24    |  |  | $       | 2.36 |  |  | $ | 2.94 | 
|                             | Low   |               |   | 1.47 |         |  |   | 1.56    |  |  |         | 1.79 |  |  |   | 2.06 | 
|                             | Close |               |   | 1.68 |         |  |   | 2.17    |  |  |         | 2.12 |  |  |   | 2.57 | 





4



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##### 








|        |                        
|------- | -----------------------
|Item 6. | Selected Financial Data

|                                                                                                  |  |                                               |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         | 
|------------------------------------------------------------------------------------------------- |  | --------------------------------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | - |  | ---- | ------- | - |  | - | ------- | 
|                                                                                                  |  | Year ended December 31                        |        
|                                                                                                  |  |                                               |        
|                                                                                                  |  | 2004                                          |         |   | 2003 |   |         | 2002 |  |   | 2001    |   |  | 2000 |        
|                                                                                                  |  |                                               |         |   |      |   |         |      |  |   |         |   |  |      |        
|                                                                                                  |  | (Dollars in thousands, except per share data) |        
|Operating Results                                                                                 |  |                                               |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         | 
|Net revenues                                                                                      |  | $                                             | 143,954 |   |      | $ | 141,905 |      |  | $ | 140,797 |   |  | $    | 183,621 |   |  | $ | 251,887 | 
|Operating income (loss)(1)                                                                        |  | $                                             | (1,039  | ) |      | $ | (2,744  | )    |  | $ | (3,560  | ) |  | $    | (2,181  | ) |  | $ | 3,583   | 
|Income (loss) from continuing operations, before cumulative
    effective of accounting change(1) |  | $                                             | (953    | ) |      | $ | (3,787  | )    |  | $ | (2,033  | ) |  | $    | (1,041  | ) |  | $ | 2,319   | 
|Cumulative effect of accounting change                                                            |  |                                               |         |   |      |   |         |      |  | $ | (1,280  | ) |  |      |         |   |  |   |         | 
|Net income (loss)                                                                                 |  | $                                             | (953    | ) |      | $ | (3,787  | )    |  | $ | (3,313  | ) |  | $    | (1,041  | ) |  | $ | 2,319   | 
|Financial Position                                                                                |  |                                               |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         | 
|Working capital                                                                                   |  | $                                             | 19,085  |   |      | $ | 17,826  |      |  | $ | 19,609  |   |  | $    | 21,314  |   |  | $ | 24,678  | 
|Total assets                                                                                      |  | $                                             | 45,189  |   |      | $ | 46,633  |      |  | $ | 49,390  |   |  | $    | 57,652  |   |  | $ | 74,426  | 
|Long-term liabilities                                                                             |  | $                                             | 5,025   |   |      | $ | 2,520   |      |  | $ | 2,496   |   |  | $    | 2,810   |   |  | $ | 3,411   | 
|Shareholders equity                                                                              |  | $                                             | 20,816  |   |      | $ | 21,597  |      |  | $ | 25,546  |   |  | $    | 29,678  |   |  | $ | 30,482  | 

|                                                                                               |  |   |       |   |  |   |       |   |  |   |       |   |  |   |       |   |  |   |       |  
|---------------------------------------------------------------------------------------------- |  | - | ----- | - |  | - | ----- | - |  | - | ----- | - |  | - | ----- | - |  | - | ----- | -
|Share and Per Share Data                                                                       |  |   |       |   |  |   |       |   |  |   |       |   |  |   |       |   |  |   |       |  
|BASIC                                                                                          |  |   |       |   |  |   |       |   |  |   |       |   |  |   |       |   |  |   |       |  
|Income (loss) from continuing operations, before cumulative
    effect of accounting change(1) |  | $ | (.11  | ) |  | $ | (.45  | ) |  | $ | (.24  | ) |  | $ | (.12  | ) |  | $ | .26   |  
|Cumulative effect of accounting change                                                         |  |   |       |   |  |   |       |   |  | $ | (.14  | ) |  |   |       |   |  |   |       |  
|Net income (loss)                                                                              |  | $ | (.11  | ) |  | $ | (.45  | ) |  | $ | (.38  | ) |  | $ | (.12  | ) |  | $ | .26   |  
|Weighted average common shares (000s)                                                         |  |   | 8,385 |   |  |   | 8,367 |   |  |   | 8,743 |   |  |   | 8,854 |   |  |   | 8,999 |  
|DILUTED                                                                                        |  |   |       |   |  |   |       |   |  |   |       |   |  |   |       |   |  |   |       |  
|Income (loss) from continuing operations, before cumulative
    effect of accounting change(1) |  | $ | (.11  | ) |  | $ | (.45  | ) |  | $ | (.24  | ) |  | $ | (.12  | ) |  | $ | .26   |  
|Cumulative effect of accounting change                                                         |  |   |       |   |  |   |       |   |  | $ | (.14  | ) |  |   |       |   |  |   |       |  
|Net income (loss)                                                                              |  | $ | (.11  | ) |  | $ | (.45  | ) |  | $ | (.38  | ) |  | $ | (.12  | ) |  | $ | .26   |  
|Weighted average common shares (000s)                                                         |  |   | 8,385 |   |  |   | 8,367 |   |  |   | 8,743 |   |  |   | 8,854 |   |  |   | 9,025 |  
|OTHER PER SHARE DATA                                                                           |  |   |       |   |  |   |       |   |  |   |       |   |  |   |       |   |  |   |       |  
|Shareholders equity                                                                           |  | $ | 2.47  |   |  | $ | 2.58  |   |  | $ | 3.05  |   |  | $ | 3.34  |   |  | $ | 3.47  |  
|Market price  high                                                                            |  | $ | 3.70  |   |  | $ | 2.94  |   |  | $ | 2.59  |   |  | $ | 3.40  |   |  | $ | 7.75  |  
|Market price  low                                                                             |  | $ | 2.36  |   |  | $ | 1.47  |   |  | $ | 1.33  |   |  | $ | 1.65  |   |  | $ | 1.50  |  
|Financial Ratios                                                                               |  |   |       |   |  |   |       |   |  |   |       |   |  |   |       |   |  |   |       |  
|Current ratio                                                                                  |  |   | 2.0   |   |  |   | 1.8   |   |  |   | 1.9   |   |  |   | 1.8   |   |  |   | 1.6   |  
|Long-term liabilities to total capitalization                                                  |  |   | 19.4  | % |  |   | 10.4  | % |  |   | 8.9   | % |  |   | 8.6   | % |  |   | 10.1  | %






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes a before-tax charge in connection with an employment
    agreement with a former executive ($700) in 2004, a before-tax
    charge for staff separation and facilities consolidation ($845)
    and a before-tax charge for settlement costs associated with an
    executive change-in-control contract ($650) in 2001, and a
    before-tax gain on the disposition of a real estate asset
    ($2,842) and a before-tax charge for facilities consolidation
    and staff relocation costs, asset write-downs and a corporate
    identity program ($2,405) in 2000.

5



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##### 








|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis of Financial
    Condition and Results of Operations





Critical Accounting Policies




Revenue Recognition






Valuation of Receivables




Valuation of Inventory




6



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##### 



Income Taxes




Accrued Liabilities




Environmental Matters




Recent Accounting Pronouncements








7



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##### 



Results of Operations




|                                       |                       |          |         |        |        |   |         |        |        |   |         |        |        | 
|-------------------------------------- | --------------------- | -------- | ------- | ------ | ------ | - | ------- | ------ | ------ | - | ------- | ------ | ------ | 
|                                       |                       | 2004     |         |        | 2003   |   |         | 2002   |       
|                                       |                       |          |         |        |        |   |         |        |       
|Net revenues                           |                       |          |         |        |        |   |         |        |        |   |         |       
|                                       | Technology Solutions  |          |         |        |        |   |         |        |        |   |         |        |       
|                                       |                       | Products |         | $      | 60,149 |   |         | $      | 55,826 |   |         | $      | 68,219 | 
|                                       |                       | Services |         |        | 30,122 |   |         |        | 34,949 |   |         |        | 22,349 | 
|                                       |                       |          |         |        |        |   |         |        |       
|                                       |                       |          | 90,271  |        |        |   | 90,775  |        |        |   | 90,568  |       
|                                       | Recreational Products |          |         | 45,907 |        |   |         | 44,804 |        |   |         | 44,639 |       
|                                       | Electronic Components |          |         | 7,776  |        |   |         | 6,326  |        |   |         | 5,590  |       
|                                       |                       |          |         |        |        |   |         |        |       
|                                       |                       | $        | 143,954 |        |        | $ | 141,905 |        |        | $ | 140,797 |       
|                                       |                       |          |         |        |        |   |         |        |       
|Operating income (loss)                |                       |          |         |        |        |   |         |        |        |   |         |       
|                                       | Technology Solutions  |          | $       | (780   | )      |   | $       | (2,135 | )      |   | $       | (2,204 | )     
|                                       | Recreational Products |          |         | 1,319  |        |   |         | 1,321  |        |   |         | 819    |       
|                                       | Electronic Components |          |         | 1,526  |        |   |         | 939    |        |   |         | 489    |       
|                                       | Special item          |          |         | (700   | )      |   |         |        |        |   |         |        |       
|                                       | Corporate costs       |          |         | (2,404 | )      |   |         | (2,869 | )      |   |         | (2,664 | )     
|                                       |                       |          |         |        |        |   |         |        |       
|                                       |                       |          | (1,039  | )      |        |   | (2,744  | )      |        |   | (3,560  | )     
|Interest, net                          |                       |          | 161     |        |        |   | 166     |        |        |   | 200     |       
|Income tax benefit (provision)         |                       |          | (75     | )      |        |   | (1,209  | )      |        |   | 1,327   |       
|Cumulative effect of accounting change |                       |          |         |        |        |   |         |        |        |   | (1,280  | )     
|                                       |                       |          |         |        |        |   |         |        |       
|Net loss                               |                       | $        | (953    | )      |        | $ | (3,787  | )      |        | $ | (3,313  | )     
|                                       |                       |          |         |        |        |   |         |        |       



|                                                                        |          |  |       |      |   |  |       |      |   |  |       |      |  
|----------------------------------------------------------------------- | -------- |  | ----- | ---- | - |  | ----- | ---- | - |  | ----- | ---- | -
|Net revenues                                                            |          |  |       |      |   |  |       |      |   |  |       |     
|                                                                        | Products |  |       | 79.1 | % |  |       | 75.4 | % |  |       | 84.1 | %
|                                                                        | Services |  |       | 20.9 |   |  |       | 24.6 |   |  |       | 15.9 |  
|                                                                        |          |  |       |      |   |  |       |      |  
|                                                                        |          |  | 100.0 |      |   |  | 100.0 |      |   |  | 100.0 |     
|Cost of products sold                                                   |          |  | (64.5 | )    |   |  | (61.4 | )    |   |  | (69.7 | )   
|Cost of services provided                                               |          |  | (16.8 | )    |   |  | (20.0 | )    |   |  | (12.1 | )   
|Selling and administrative costs and expenses                           |          |  | (17.7 | )    |   |  | (19.0 | )    |   |  | (19.1 | )   
|Depreciation                                                            |          |  | (1.2  | )    |   |  | (1.5  | )    |   |  | (1.6  | )   
|Special item                                                            |          |  | (.5   | )    |   |  |       |      |   |  |       |     
|Interest, net                                                           |          |  | .1    |      |   |  | .1    |      |   |  | .1    |     
|                                                                        |          |  |       |      |   |  |       |      |  
|Loss before income taxes and cumulative effect of accounting
    change |          |  | (.6   | )    |   |  | (1.8  | )    |   |  | (2.4  | )   
|Income tax benefit (provision)                                          |          |  | (.1   | )    |   |  | (.9   | )    |   |  | .9    |     
|Cumulative effect of accounting change                                  |          |  |       |      |   |  |       |      |   |  | (.9   | )   
|                                                                        |          |  |       |      |   |  |       |      |  
|Net loss                                                                |          |  | (.7   | )%   |   |  | (2.7  | )%   |   |  | (2.4  | )%  
|                                                                        |          |  |       |      |   |  |       |      |  



|                                                               |  |  |      |   |  |  |      |   |  |  |      |  
|-------------------------------------------------------------- |  |  | ---- | - |  |  | ---- | - |  |  | ---- | -
|Cost of products sold as a percentage of products revenues     |  |  | 81.6 | % |  |  | 81.5 | % |  |  | 82.8 | %
|Cost of services provided as a percentage of services revenues |  |  | 80.4 | % |  |  | 81.4 | % |  |  | 76.4 | %

8



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##### 





| |                                                                          
| | -------------------------------------------------------------------------
| | Year Ended December 31, 2004 Compared to Year Ended
    December 31, 2003



| |             
| | ------------
| | Net revenues





| |                        
| | -----------------------
| | Operating income (loss)





| |                
| | ---------------
| | Corporate costs





| |             
| | ------------
| | Special item





| |              
| | -------------
| | Interest, net





| |                     
| | --------------------
| | Technology Solutions



9



---



##### 





| |                      
| | ---------------------
| | Recreational Products





| |                      
| | ---------------------
| | Electronic Components





| |                      
| | ---------------------
| | Cost of products sold





| |                          
| | -------------------------
| | Cost of services provided





| |                                    
| | -----------------------------------
| | Selling and administrative expenses



10



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##### 





| |           
| | ----------
| | Income tax





| |         
| | --------
| | Net loss





| |                                                                          
| | -------------------------------------------------------------------------
| | Year Ended December 31, 2003 Compared to Year Ended
    December 31, 2002



| |             
| | ------------
| | Net revenues





| |                        
| | -----------------------
| | Operating income (loss)





| |                
| | ---------------
| | Corporate costs





| |              
| | -------------
| | Interest, net





| |                                       
| | --------------------------------------
| | Cumulative effect of accounting change



11



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##### 





| |                     
| | --------------------
| | Technology Solutions





| |                      
| | ---------------------
| | Recreational Products





| |                      
| | ---------------------
| | Electronic Components





| |                      
| | ---------------------
| | Cost of products sold



12



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##### 





| |                          
| | -------------------------
| | Cost of services provided





| |                                    
| | -----------------------------------
| | Selling and administrative expenses





| |           
| | ----------
| | Income tax





| |         
| | --------
| | Net loss



Changes in Financial Condition


Liquidity and Capital Resources




|                                              |  |              |        |   |      |   |        |  
|--------------------------------------------- |  | ------------ | ------ | - | ---- | - | ------ | -
|                                              |  | December 31, |       
|                                              |  |              |       
|                                              |  | 2004         |        |   | 2003 |  
|                                              |  |              |        |   |      |  
|Cash and cash equivalents                     |  | $            | 10,801 |   |      | $ | 12,203 |  
|Working capital                               |  | $            | 19,085 |   |      | $ | 17,826 |  
|Current ratio                                 |  |              | 2.0:1  |   |      |   | 1.8:1  |  
|Long-term liabilities to total capitalization |  |              | 19.4   | % |      |   | 10.4   | %
|Shareholders equity per share                |  | $            | 2.47   |   |      | $ | 2.58   |  
|Days sales in receivables                    |  |              | 44     |   |      |   | 46     |  
|Days sales in inventories                    |  |              | 55     |   |      |   | 36     |  

13



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##### 











|                             |                          |       |   |       |      |  |   |       |  |  |      |       |  |      |   |     |      |  |   |     |  |  |   |     | 
|---------------------------- | ------------------------ | ----- | - | ----- | ---- |  | - | ----- |  |  | ---- | ----- |  | ---- | - | --- | ---- |  | - | --- |  |  | - | --- | 
|                             |                          | Total |   |       | 2005 |  |   | 2006  |  |  | 2007 |       |  | 2008 |   |     | 2009 | 
|                             |                          |       |   |       |      |  |   |       |  |  |      |       |  |      |   |     |      | 
|Contractual obligations      |                          |       |   |       |      |  |   |       |  |  |      |       |  |      |   |     |      |  |   |     |  |  |   |    
|                             | Operating leases         |       | $ | 5,245 |      |  | $ | 2,040 |  |  | $    | 1,440 |  |      | $ | 783 |      |  | $ | 507 |  |  | $ | 475 | 
|Other commercial commitments |                          |       |   |       |      |  |   |       |  |  |      |       |  |      |   |     |      |  |   |     |  |  |   |    
|                             | Standby letter of credit |       | $ | 20    |      |  | $ | 20    |  |  |      |       |  |      |   |     |      |  |   |     |  |  |   |     | 



Off-Balance Sheet Arrangements




14



---



##### 



Factors That May Affect Future Results of Operations






| |                                                                                                                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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.





| |                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If we are unable to recruit and retain key personnel
    necessary to operate our businesses, our ability to compete
    successfully will be adversely affected.





| |                                                                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If we are unable to develop innovative products and
    services in our technology solutions and electronic component
    businesses, demand for our products and services may
    decrease.





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



15



---



##### 





| |                                                                                                                                                                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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 recreational products business relies heavily upon
    vendors with which we have no long-term relationships.





| |                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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.



16



---



##### 





| |                                                                                                                                                                                                                                                                                                           
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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.





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





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





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



17



---



##### 





| |                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If we fail to maintain an effective system of internal and
    disclosure control, we may not be able to accurately report our
    financial results or prevent fraud, which would harm our
    business and the trading price of our securities.










|         |                                                               
|-------- | --------------------------------------------------------------
|Item 7A. | Quantitative and Qualitative Disclosures About Market
    Risk



18



---



##### 








|        |                                            
|------- | -------------------------------------------
|Item 8. | Financial Statements and Supplementary Data

INDEX TO FINANCIAL STATEMENTS


|                              |                                                                                                    |      |  |    | 
|----------------------------- | -------------------------------------------------------------------------------------------------- | ---- |  | -- | 
|                              |                                                                                                    | Page | 
|                              |                                                                                                    |      | 
|Financial Statements:         |                                                                                                    |      |  |   
|                              | Report of Independent Registered Public
    Accounting Firm                                        |      |  | 20 | 
|                              | Consolidated Statement of Operations for
    the three years ended December 31, 2004               |      |  | 21 | 
|                              | Consolidated Balance Sheet at
    December 31, 2004 and 2003                                       |      |  | 22 | 
|                              | Consolidated Statement of
    Shareholders Equity for the three years ended
    December 31, 2004 |      |  | 23 | 
|                              | Consolidated Statement of Cash Flows for
    the three years ended December 31, 2004               |      |  | 24 | 
|                              | Notes to Consolidated Financial
    Statements                                                     |      |  | 25 | 
|Financial Statement Schedule: |                                                                                                    |      |  |   
|                              | Schedule II  Valuation and
    Qualifying Accounts                                                |      |  | 37 | 



19



---



##### 






REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM










PricewaterhouseCoopers LLP






20



---



##### 






CONSOLIDATED STATEMENT OF OPERATIONS


(In thousands, except per share data)


|                                                                              |                                                    |                         |         |         |      |   |         |         |   |   |         |         |  
|----------------------------------------------------------------------------- | -------------------------------------------------- | ----------------------- | ------- | ------- | ---- | - | ------- | ------- | - | - | ------- | ------- | -
|                                                                              |                                                    | Year ended December 31, |        
|                                                                              |                                                    |                         |        
|                                                                              |                                                    | 2004                    |         |         | 2003 |   |         | 2002    |  
|                                                                              |                                                    |                         |         |         |      |   |         |         |  
|Net revenues                                                                  |                                                    |                         |         |         |      |   |         |         |   |   |         |        
|                                                                              | Products                                           |                         | $       | 113,832 |      |   | $       | 106,956 |   |   | $       | 118,448 |  
|                                                                              | Services                                           |                         |         | 30,122  |      |   |         | 34,949  |   |   |         | 22,349  |  
|                                                                              |                                                    |                         |         |         |      |   |         |         |  
|                                                                              |                                                    |                         | 143,954 |         |      |   | 141,905 |         |   |   | 140,797 |        
|                                                                              |                                                    |                         |         |         |      |   |         |         |  
|Costs and expenses                                                            |                                                    |                         |         |         |      |   |         |         |   |   |         |        
|                                                                              | Cost of products sold                              |                         |         | 92,879  |      |   |         | 87,181  |   |   |         | 98,076  |  
|                                                                              | Cost of services provided                          |                         |         | 24,227  |      |   |         | 28,449  |   |   |         | 17,065  |  
|                                                                              | Selling and administrative                         |                         |         | 25,477  |      |   |         | 26,914  |   |   |         | 26,883  |  
|                                                                              | Depreciation                                       |                         |         | 1,710   |      |   |         | 2,105   |   |   |         | 2,333   |  
|                                                                              | Interest, net                                      |                         |         | (161    | )    |   |         | (166    | ) |   |         | (200    | )
|                                                                              | Special item                                       |                         |         | 700     |      |   |         |         |   |   |         |         |  
|                                                                              |                                                    |                         |         |         |      |   |         |         |  
|                                                                              |                                                    |                         | 144,832 |         |      |   | 144,483 |         |   |   | 144,157 |        
|                                                                              |                                                    |                         |         |         |      |   |         |         |  
|Loss before income taxes and cumulative effect of accounting
    change       |                                                    |                         | (878    | )       |      |   | (2,578  | )       |   |   | (3,360  | )      
|Income tax provision (benefit)                                                |                                                    |                         | 75      |         |      |   | 1,209   |         |   |   | (1,327  | )      
|                                                                              |                                                    |                         |         |         |      |   |         |         |  
|Loss before cumulative effect of accounting change                            |                                                    |                         | (953    | )       |      |   | (3,787  | )       |   |   | (2,033  | )      
|Cumulative effect of accounting change, net of income tax
    benefit of $836 |                                                    |                         |         |         |      |   |         |         |   |   | (1,280  | )      
|                                                                              |                                                    |                         |         |         |      |   |         |         |  
|Net loss                                                                      |                                                    | $                       | (953    | )       |      | $ | (3,787  | )       |   | $ | (3,313  | )      
|                                                                              |                                                    |                         |         |         |      |   |         |         |  
|SHARE AND PER SHARE DATA                                                      |                                                    |                         |         |         |      |   |         |         |   |   |         |        
|BASIC AND DILUTED                                                             |                                                    |                         |         |         |      |   |         |         |   |   |         |        
|                                                                              | Loss before cumulative effect of accounting change |                         | $       | (.11    | )    |   | $       | (.45    | ) |   | $       | (.24    | )
|                                                                              | Cumulative effect of accounting change             |                         |         |         |      |   |         |         |   |   |         | (.14    | )
|                                                                              |                                                    |                         |         |         |      |   |         |         |  
|                                                                              | Net loss                                           |                         | $       | (.11    | )    |   | $       | (.45    | ) |   | $       | (.38    | )
|                                                                              |                                                    |                         |         |         |      |   |         |         |  
|                                                                              | Weighted average common shares                     |                         |         | 8,385   |      |   |         | 8,367   |   |   |         | 8,743   |  
|                                                                              |                                                    |                         |         |         |      |   |         |         |  



21



---



##### 






CONSOLIDATED BALANCE SHEET


(Dollars in thousands)


|                                                       |                                                                                |                                                                                  |                            |         |        |        |        |         |        |        | 
|------------------------------------------------------ | ------------------------------------------------------------------------------ | -------------------------------------------------------------------------------- | -------------------------- | ------- | ------ | ------ | ------ | ------- | ------ | ------ | 
|                                                       |                                                                                | December 31,                                                                     |                           
|                                                       |                                                                                |                                                                                  |                           
|                                                       |                                                                                | 2004                                                                             |                            |         | 2003   |       
|                                                       |                                                                                |                                                                                  |                            |         |        |       
|ASSETS                                                
|Current assets                                         |                                                                                |                                                                                  |                            |         |        |        |        |        
|                                                       | Cash and cash equivalents                                                      |                                                                                  | $                          | 10,801  |        |        | $      | 12,203  |       
|                                                       | Accounts receivable, less allowance for doubtful accounts of
    $727 and $936 |                                                                                  |                            | 11,455  |        |        |        | 16,164  |       
|                                                       | Inventories                                                                    |                                                                                  |                            | 14,364  |        |        |        | 11,286  |       
|                                                       | Prepaid expenses and other                                                     |                                                                                  |                            | 1,813   |        |        |        | 689     |       
|                                                       |                                                                                |                                                                                  |                            |         |        |       
|                                                       |                                                                                |                                                                                  | Total current assets       |         |        | 38,433 |        |         |        | 40,342 | 
|                                                       |                                                                                |                                                                                  |                            |         |        |       
|Fixed assets, at cost                                  |                                                                                |                                                                                  |                            |         |        |        |        |        
|                                                       | Land, buildings and improvements                                               |                                                                                  |                            | 565     |        |        |        | 554     |       
|                                                       | Leasehold improvements                                                         |                                                                                  |                            | 902     |        |        |        | 926     |       
|                                                       | Computer equipment and software                                                |                                                                                  |                            | 8,710   |        |        |        | 8,754   |       
|                                                       | Furniture, fixtures and other                                                  |                                                                                  |                            | 4,457   |        |        |        | 4,547   |       
|                                                       |                                                                                |                                                                                  |                            |         |        |       
|                                                       |                                                                                |                                                                                  | 14,634                     |         |        |        | 14,781 |        
|                                                       | Less accumulated depreciation                                                  |                                                                                  |                            | (11,495 | )      |        |        | (10,575 | )     
|                                                       |                                                                                |                                                                                  |                            |         |        |       
|                                                       |                                                                                |                                                                                  | Total fixed assets         |         |        | 3,139  |        |         |        | 4,206  | 
|                                                       |                                                                                |                                                                                  |                            |         |        |       
|Other assets                                           |                                                                                |                                                                                  | 3,617                      |         |        |        | 2,085  |        
|                                                       |                                                                                |                                                                                  |                            |         |        |       
|                                                       |                                                                                | $                                                                                | 45,189                     |         |        | $      | 46,633 |        
|                                                       |                                                                                |                                                                                  |                            |         |        |       
|LIABILITIES AND SHAREHOLDERS EQUITY                  
|Current liabilities                                    |                                                                                |                                                                                  |                            |         |        |        |        |        
|                                                       | Accounts payable                                                               |                                                                                  | $                          | 11,170  |        |        | $      | 12,882  |       
|                                                       | Accrued payroll                                                                |                                                                                  |                            | 1,827   |        |        |        | 2,414   |       
|                                                       | Accrued liabilities                                                            |                                                                                  |                            | 6,351   |        |        |        | 7,220   |       
|                                                       |                                                                                |                                                                                  |                            |         |        |       
|                                                       |                                                                                |                                                                                  | Total current liabilities  |         |        | 19,348 |        |         |        | 22,516 | 
|                                                       |                                                                                |                                                                                  |                            |         |        |       
|Deferred compensation, environmental matters and other |                                                                                |                                                                                  | 5,025                      |         |        |        | 2,520  |        
|                                                       |                                                                                |                                                                                  |                            |         |        |       
|Shareholders equity                                   |                                                                                |                                                                                  |                            |         |        |        |        |        
|                                                       | Preferred stock                                                                |                                                                                  |                            |         |        |        |        |         |       
|                                                       |                                                                                | Authorized  1,000,000 shares,
    outstanding  none                            |                            |         |        |        |        |         |        |       
|                                                       | Common stock                                                                   |                                                                                  |                            |         |        |        |        |         |       
|                                                       |                                                                                | Authorized  35,000,000 shares,
    outstanding  8,437,724 and 8,366,724 shares |                            |         | 32,545 |        |        |         | 32,373 |       
|                                                       | Accumulated deficit                                                            |                                                                                  |                            | (11,729 | )      |        |        | (10,776 | )     
|                                                       |                                                                                |                                                                                  |                            |         |        |       
|                                                       |                                                                                |                                                                                  | Total shareholders equity |         |        | 20,816 |        |         |        | 21,597 | 
|                                                       |                                                                                |                                                                                  |                            |         |        |       
|Commitments and contingencies                          |                                                                                |                                                                                  |                            |         |        |        |        |        
|                                                       |                                                                                | $                                                                                | 45,189                     |         |        | $      | 46,633 |        
|                                                       |                                                                                |                                                                                  |                            |         |        |       



22



---



##### 






CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY


(Dollars in thousands)


|                             |                          |              |           |          |             |   |        |         |   |   |         |        |  
|---------------------------- | ------------------------ | ------------ | --------- | -------- | ----------- | - | ------ | ------- | - | - | ------- | ------ | -
|                             |                          | Common Stock |           |          |            
|                             |                          |              |           |          | Accumulated |  
|                             |                          | Shares       |           |          | Amount      |   |        | deficit |  
|                             |                          |              |           |          |             |   |        |         |  
|Balance at December 31, 2001 |                          |              | 8,889,708 |          |             | $ | 33,354 |         |   | $ | (3,676  | )     
|                             | Employee stock plans     |              |           | 33,737   |             |   |        | 53      |   |   |         |        |  
|                             | Stock repurchase program |              |           | (556,721 | )           |   |        | (872    | ) |   |         |        |  
|                             | Net loss                 |              |           |          |             |   |        |         |   |   |         | (3,313 | )
|                             |                          |              |           |          |             |   |        |         |  
|Balance at December 31, 2002 |                          |              | 8,366,724 |          |             |   | 32,535 |         |   |   | (6,989  | )     
|                             | Other stock transactions |              |           |          |             |   |        | (162    | ) |   |         |        |  
|                             | Net loss                 |              |           |          |             |   |        |         |   |   |         | (3,787 | )
|                             |                          |              |           |          |             |   |        |         |  
|Balance at December 31, 2003 |                          |              | 8,366,724 |          |             |   | 32,373 |         |   |   | (10,776 | )     
|                             | Employee stock plans     |              |           | 71,000   |             |   |        | 172     |   |   |         |        |  
|                             | Net loss                 |              |           |          |             |   |        |         |   |   |         | (953   | )
|                             |                          |              |           |          |             |   |        |         |  
|Balance at December 31, 2004 |                          |              | 8,437,724 |          |             | $ | 32,545 |         |   | $ | (11,729 | )     
|                             |                          |              |           |          |             |   |        |         |  



23



---



##### 






CONSOLIDATED STATEMENT OF CASH FLOWS


(In thousands)


|                                                     |                                             |                                                     |        |        |        |   |        |        |       |   |        |        |        |  
|---------------------------------------------------- | ------------------------------------------- | --------------------------------------------------- | ------ | ------ | ------ | - | ------ | ------ | ----- | - | ------ | ------ | ------ | -
|                                                     |                                             | Year ended December 31,                             |       
|                                                     |                                             |                                                     |       
|                                                     |                                             | 2004                                                |        |        | 2003   |   |        | 2002   |      
|                                                     |                                             |                                                     |        |        |        |   |        |        |      
|Cash flows from operating activities:                |                                             |                                                     |        |        |        |   |        |        |       |   |        |       
|                                                     | Net loss                                    |                                                     | $      | (953   | )      |   | $      | (3,787 | )     |   | $      | (3,313 | )     
|                                                     | Cumulative effect of accounting change      |                                                     |        |        |        |   |        |        |       |   |        | 1,280  |       
|                                                     | Depreciation                                |                                                     |        | 1,710  |        |   |        | 2,105  |       |   |        | 2,333  |       
|                                                     | Provision for losses on accounts receivable |                                                     |        | 114    |        |   |        | 207    |       |   |        | 63     |       
|                                                     | Changes in assets and liabilities           |                                                     |        | (2,006 | )      |   |        | 4,388  |       |   |        | 1,574  |       
|                                                     |                                             |                                                     |        |        |        |   |        |        |      
|                                                     |                                             | Net cash provided by (used in) operating activities |        |        | (1,135 | ) |        |        | 2,913 |   |        |        | 1,937  |  
|                                                     |                                             |                                                     |        |        |        |   |        |        |      
|Cash flows from investing activities:                |                                             |                                                     |        |        |        |   |        |        |       |   |        |       
|                                                     | Purchases of fixed assets                   |                                                     |        | (605   | )      |   |        | (1,000 | )     |   |        | (1,535 | )     
|                                                     | Proceeds on note from sale of business      |                                                     |        | 166    |        |   |        | 211    |       |   |        | 78     |       
|                                                     |                                             |                                                     |        |        |        |   |        |        |      
|                                                     |                                             | Net cash used in investing activities               |        |        | (439   | ) |        |        | (789  | ) |        |        | (1,457 | )
|                                                     |                                             |                                                     |        |        |        |   |        |        |      
|Cash flows from financing activities:                |                                             |                                                     |        |        |        |   |        |        |       |   |        |       
|                                                     | Employee stock plans and other              |                                                     |        | 172    |        |   |        |        |       |   |        | 53     |       
|                                                     | Purchases of common stock                   |                                                     |        |        |        |   |        |        |       |   |        | (872   | )     
|                                                     |                                             |                                                     |        |        |        |   |        |        |      
|                                                     |                                             | Net cash provided by (used in) financing activities |        |        | 172    |   |        |        |       |   |        |        | (819   | )
|                                                     |                                             |                                                     |        |        |        |   |        |        |      
|Net increase (decrease) in cash and cash equivalents |                                             |                                                     | (1,402 | )      |        |   | 2,124  |        |       |   | (339   | )     
|Cash and cash equivalents at beginning of year       |                                             |                                                     | 12,203 |        |        |   | 10,079 |        |       |   | 10,418 |       
|                                                     |                                             |                                                     |        |        |        |   |        |        |      
|Cash and cash equivalents at end of year             |                                             | $                                                   | 10,801 |        |        | $ | 12,203 |        |       | $ | 10,079 |       
|                                                     |                                             |                                                     |        |        |        |   |        |        |      
|Changes in assets and liabilities:                   |                                             |                                                     |        |        |        |   |        |        |       |   |        |       
|                                                     | Accounts receivable                         |                                                     | $      | 4,918  |        |   | $      | (3,273 | )     |   | $      | 5,525  |       
|                                                     | Income tax receivable                       |                                                     |        |        |        |   |        | 2,400  |       |   |        | (1,654 | )     
|                                                     | Inventories                                 |                                                     |        | (3,078 | )      |   |        | 1,063  |       |   |        | 1,259  |       
|                                                     | Accounts payable                            |                                                     |        | (1,712 | )      |   |        | 2,195  |       |   |        | (1,146 | )     
|                                                     | Accrued liabilities and other               |                                                     |        | (2,134 | )      |   |        | 2,003  |       |   |        | (2,410 | )     
|                                                     |                                             |                                                     |        |        |        |   |        |        |      
|                                                     |                                             | Net change                                          |        | $      | (2,006 | ) |        | $      | 4,388 |   |        | $      | 1,574  |  
|                                                     |                                             |                                                     |        |        |        |   |        |        |      
|Supplemental cash flow information:                  |                                             |                                                     |        |        |        |   |        |        |       |   |        |       
|                                                     | Interest paid                               |                                                     | $      |       |        |   | $      |       |       |   | $      |       |       
|                                                     | Income taxes paid                           |                                                     | $      | 95     |        |   | $      | 36     |       |   | $      |       |       



24



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##### 






NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Summary of Accounting Policies


Principles of consolidation


Cash and cash equivalents


Revenue recognition and receivables




| |                     
| | --------------------
| | Technology Solutions



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | BTLs product sales terms provide that title and risk of
    loss are passed to the customer at the time of shipment. These
    sales terms have been enforced with BTLs customers. An
    order or a signed agreement is required for each transaction.
    Products are typically shipped directly to customers from
    BTLs suppliers. In some instances, products are shipped to
    customers out of BTL facilities located in Indianapolis, Indiana
    and Richmond, Virginia. BTLs services revenues are
    primarily derived through support services from recurring
    engagements. BTLs support services are typically rendered
    separate from product sales. Revenues from these services are
    typically under contract and are billed periodically, usually
    monthly, based on fixed fee arrangements, per incident or per
    resource charges, or on a cost plus basis. Revenue recognition
    from support services does not require significant management
    estimates. Revenue is recognized in accordance with Emerging
    Issues Task Force (EITF) Issue No. 00-21 for
    arrangements that include multiple deliverables, primarily
    product sales that include deployment services. The delivered
    items are accounted for separately, provided that the delivered
    item has value to the customer on a stand-alone basis and there
    is objective and reliable evidence of the fair value of the
    undelivered items. For such arrangements, product sales and
    deployment services are accounted for separately in accordance
    with EITF Issue No. 00-21.
|
| | In accordance with EITF Issue No. 99-19, the Company
    records revenue either based on the gross amount billed to a
    customer or the net amount retained. The Company records revenue
    on a gross basis when it acts as a principal in the transaction,
    is the primary obligor in the arrangement, establishes prices,
    determines the supplier, and has credit risk. The Company
    records revenue on a net basis when the supplier is the primary
    obligor in the arrangement, when the amount earned is a
    percentage of the total transaction value and is usually
    received directly from the supplier, and when the supplier has
    credit risk. Product sales to most customers are recorded on a
    gross basis as the Company is responsible for fulfilling the
    order, establishes the selling price to the customer, has the
    responsibility to pay suppliers for all products ordered,
    regardless of when, or if, it collects from the customer, and
    determines the credit worthiness of its customers.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

25



---



##### 





| |                            
| | ---------------------------
| | Recreational Products Group



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | RPGs sales terms provide that title and risk of loss are
    passed to the customer at time of shipment. These sales terms
    have been enforced with RPGs customers. Sales terms are
    communicated in each of RPGs product catalogues, which are
    widely distributed to customers. An order is required for each
    transaction. Products are shipped to customers based on their
    proximity to each of RPGs distribution facilities in
    Minnesota, Wisconsin and Michigan. Over 95% of products are
    shipped out of one of these three distribution facilities.
    Delivery is fulfilled through either common carriers, local
    shipping companies or in the case of same day deliveries to
    local customers, through Company-owned vehicles. For over 90% of
    sales transactions, delivery occurs within one day of shipment.



| |                      
| | ---------------------
| | Electronic Components



| |                                                                                                                                                                                                                                                                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | JWMs sales terms provide that title and risk of loss are
    passed to the customer at the time of shipment. These sales
    terms have been enforced with JWMs customers. An order is
    required for each transaction. Over 90% of the products are
    shipped to customers out of a facility in Gardena, California.
    Shipments are fulfilled through the carrier selected by the
    customer.



Inventories


Shipping and handling costs


Deferred catalog and advertising costs


Vendor rebates


Fixed assets, depreciation and amortization


26



---



##### 



Goodwill and other intangible assets


Long-lived assets


Income taxes


Accrued liabilities


Environmental matters


Retiree medical program


27



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##### 



Stock-Based Compensation


|                                                      |                                 |      |        |      |      |   |        |      |   |   |        |      |  
|----------------------------------------------------- | ------------------------------- | ---- | ------ | ---- | ---- | - | ------ | ---- | - | - | ------ | ---- | -
|                                                      |                                 | 2004 |        |      | 2003 |   |        | 2002 |  
|                                                      |                                 |      |        |      |      |   |        |      |  
|Net loss, as reported                                 |                                 | $    | (953   | )    |      | $ | (3,787 | )    |   | $ | (3,313 | )   
|Compensation expense as determined under SFAS No. 123 |                                 |      | (150   | )    |      |   | (180   | )    |   |   | (400   | )   
|                                                      |                                 |      |        |      |      |   |        |      |  
|Pro forma net loss                                    |                                 | $    | (1,103 | )    |      | $ | (3,967 | )    |   | $ | (3,713 | )   
|                                                      |                                 |      |        |      |      |   |        |      |  
|Net loss per share                                    |                                 |      |        |      |      |   |        |      |   |   |        |     
|                                                      | Basic and diluted  as reported |      | $      | (.11 | )    |   | $      | (.45 | ) |   | $      | (.38 | )
|                                                      |                                 |      |        |      |      |   |        |      |  
|                                                      | Basic and diluted  pro forma   |      | $      | (.13 | )    |   | $      | (.47 | ) |   | $      | (.43 | )
|                                                      |                                 |      |        |      |      |   |        |      |  



Per share data


|                                                        |  |      |       |   |      |  |       |      |  |  |       |  
|------------------------------------------------------- |  | ---- | ----- | - | ---- |  | ----- | ---- |  |  | ----- | -
|                                                        |  | 2004 |       |   | 2003 |  |       | 2002 | 
|                                                        |  |      |       |   |      |  |       |      | 
|Basic weighted average shares outstanding               |  |      | 8,385 |   |      |  | 8,367 |      |  |  | 8,743 |  
|Potentially dilutive stock options                      |  |      | 89    |   |      |  | 13    |      |  |  | 1     |  
|Anti-dilutive stock options due to net loss during year |  |      | (89   | ) |      |  | (13   | )    |  |  | (1    | )
|                                                        |  |      |       |   |      |  |       |      | 
|Diluted weighted average shares outstanding             |  |      | 8,385 |   |      |  | 8,367 |      |  |  | 8,743 |  
|                                                        |  |      |       |   |      |  |       |      | 

Use of estimates


New pronouncements


28



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##### 







Special Item




Floor Plan Arrangements




Borrowings




Stock Repurchase Program




29



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##### 



Stock Plans






|                                 |           |            |         |          |        |          |           |           |      |   |           |      |  |  |   |      | 
|-------------------------------- | --------- | ---------- | ------- | -------- | ------ | -------- | --------- | --------- | ---- | - | --------- | ---- |  |  | - | ---- | 
|                                 |           |            |         |          |        | Weighted |           |           |     
|                                 |           |            |         |          |        | average  |           |           | Fair |  
|                                 |           | Available  |         |          | Shares |          |           | exercise  |      |   | value of  |     
|                                 |           | for future |         |          | under  |          |           | price per |      |   | option    |     
|                                 |           | grant      |         |          | option |          |           | share     |      |   | per share |     
|                                 |           |            |         |          |        |          |           |           |      |   |           |     
|Outstanding at December 31, 2001 |           |            | 952,860 |          |        |          | 1,017,329 |           |      | $ | 3.80      |      |  |  |   |     
|                                 | Granted   |            |         | (130,000 | )      |          |           | 130,000   |      |   |           | 2.00 |  |  | $ | 0.95 | 
|                                 | Canceled  |            |         | 65,100   |        |          |           | (65,100   | )    |   |           | 4.46 |  |  |   |      | 
|                                 |           |            |         |          |        |          |           |           |      |   |           |     
|Outstanding at December 31, 2002 |           |            | 887,960 |          |        |          | 1,082,229 |           |      |   | 3.55      |      |  |  |   |     
|                                 | Granted   |            |         | (45,000  | )      |          |           | 45,000    |      |   |           | 1.79 |  |  | $ | 0.89 | 
|                                 | Canceled  |            |         | 89,500   |        |          |           | (89,500   | )    |   |           | 2.81 |  |  |   |      | 
|                                 |           |            |         |          |        |          |           |           |      |   |           |     
|Outstanding at December 31, 2003 |           |            | 932,460 |          |        |          | 1,037,729 |           |      |   | 3.54      |      |  |  |   |     
|                                 | Granted   |            |         | (20,000  | )      |          |           | 20,000    |      |   |           | 3.00 |  |  | $ | 1.50 | 
|                                 | Exercised |            |         |          |        |          |           | (71,000   | )    |   |           | 2.42 |  |  |   |      | 
|                                 | Canceled  |            |         | 455,229  |        |          |           | (455,229  | )    |   |           | 4.52 |  |  |   |      | 
|                                 | Expired   |            |         | (803,689 | )      |          |           |           |      |   |           |      |  |  |   |      | 
|                                 |           |            |         |          |        |          |           |           |      |   |           |     
|Outstanding at December 31, 2004 |           |            | 564,000 |          |        |          | 531,500   |           |      | $ | 2.83      |      |  |  |   |     
|                                 |           |            |         |          |        |          |           |           |      |   |           |     



|            |  |             |         |  |             |          |         |                |  |   |      | 
|----------- |  | ----------- | ------- |  | ----------- | -------- | ------- | -------------- |  | - | ---- | 
|Remaining   |  |             |         |  |             | Weighted |        
|option life |  | Options     |         |  | Options     |          |         | average        | 
|in years    |  | outstanding |         |  | exercisable |          |         | exercise price | 
|            |  |             |         |  |             |          |         |                | 
|1           |  |             | 114,500 |  |             |          | 114,500 |                |  | $ | 2.44 | 
|2           |  |             | 59,000  |  |             |          | 45,000  |                |  |   | 2.54 | 
|3           |  |             | 78,000  |  |             |          | 43,000  |                |  |   | 2.00 | 
|4           |  |             | 45,000  |  |             |          | 18,000  |                |  |   | 1.79 | 
|5 or more   |  |             | 235,000 |  |             |          | 235,000 |                |  |   | 3.57 | 
|            |  |             |         |  |             |          |         |                | 
|            |  |             | 531,500 |  |             |          | 455,500 |                |  | $ | 2.96 | 
|            |  |             |         |  |             |          |         |                | 





|                              |  |        |         |          |                |   |      |            |  |  |         | 
|----------------------------- |  | ------ | ------- | -------- | -------------- | - | ---- | ---------- |  |  | ------- | 
|                              |  |        |         | Weighted |                |   |     
|                              |  | Shares |         |          | average        |   |      | Available  | 
|                              |  | under  |         |          | exercise price |   |      | for future | 
|                              |  | option |         |          | per share      |   |      | grant      | 
|                              |  |        |         |          |                |   |      |            | 
|Shareholder approved plans    |  |        | 501,500 |          |                | $ | 2.84 |            |  |  | 94,000  | 
|Non-shareholder approved plan |  |        | 30,000  |          |                | $ | 2.59 |            |  |  | 470,000 | 
|                              |  |        |         |          |                |   |      |            | 
|                              |  |        | 531,500 |          |                |   |      |            |  |  | 564,000 | 
|                              |  |        |         |          |                |   |      |            | 

30



---



##### 







Income Taxes




|         |         |      |    |    |      |   |       |        |   |   |        |        |  
|-------- | ------- | ---- | -- | -- | ---- | - | ----- | ------ | - | - | ------ | ------ | -
|         |         | 2004 |    |    | 2003 |   |       | 2002   |  
|         |         |      |    |    |      |   |       |        |  
|Current  |         |      |    |    |      |   |       |        |   |   |        |       
|         | Federal |      | $  |   |      |   | $     | (1,290 | ) |   | $      | (2,057 | )
|         | State   |      |    | 75 |      |   |       | 70     |   |   |        | (422   | )
|Deferred |         |      |    |    |      |   |       |        |   |   |        |       
|         | Federal |      |    |    |      |   |       | 2,349  |   |   |        | 1,117  |  
|         | State   |      |    |    |      |   |       | 80     |   |   |        | 35     |  
|         |         |      |    |    |      |   |       |        |  
|         |         | $    | 75 |    |      | $ | 1,209 |        |   | $ | (1,327 | )     
|         |         |      |    |    |      |   |       |        |  



|                                                    |  |      |       |    |      |  |       |      |  |  |       |   
|--------------------------------------------------- |  | ---- | ----- | -- | ---- |  | ----- | ---- |  |  | ----- | --
|                                                    |  | 2004 |       |    | 2003 |  |       | 2002 | 
|                                                    |  |      |       |    |      |  |       |      | 
|Federal statutory tax rate                          |  |      | (34.0 | )% |      |  | (34.0 | )%   |  |  | (34.0 | )%
|State taxes, net of federal benefit                 |  |      | 5.6   |    |      |  | 1.8   |      |  |  | (4.8  | ) 
|Reversal of previously recorded tax accruals        |  |      |       |    |      |  | (50.8 | )    |  |  |       |   
|Valuation allowance against net deferred tax assets |  |      | 31.9  |    |      |  | 130.1 |      |  |  |       |   
|Nondeductible items and other, net                  |  |      | 5.1   |    |      |  | (.2   | )    |  |  | (.7   | ) 
|                                                    |  |      |       |    |      |  |       |      | 
|Effective tax rate                                  |  |      | 8.6   | %  |      |  | 46.9  | %    |  |  | (39.5 | )%
|                                                    |  |      |       |    |      |  |       |      | 

31



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##### 





|                                                    |                                  |              |        |       |      |   |        |       |  
|--------------------------------------------------- | -------------------------------- | ------------ | ------ | ----- | ---- | - | ------ | ----- | -
|                                                    |                                  | December 31, |       
|                                                    |                                  |              |       
|                                                    |                                  | 2004         |        |       | 2003 |  
|                                                    |                                  |              |        |       |      |  
|Deferred tax assets:                                |                                  |              |        |       |      |   |        |      
|                                                    | Discontinued operations          |              | $      | 1,442 |      |   | $      | 1,521 |  
|                                                    | Net operating loss carryforwards |              |        | 2,725 |      |   |        | 1,014 |  
|                                                    | Employee benefit accruals        |              |        | 471   |      |   |        | 469   |  
|                                                    | Goodwill                         |              |        | 333   |      |   |        | 370   |  
|                                                    | Receivables allowance            |              |        | 265   |      |   |        | 288   |  
|                                                    | Inventory reserves               |              |        | 100   |      |   |        | 177   |  
|                                                    |                                  |              |        |       |      |  
|                                                    |                                  |              | 5,336  |       |      |   | 3,839  |      
|Deferred tax liabilities:                           |                                  |              |        |       |      |   |        |      
|                                                    | Prepaid items                    |              |        | (101  | )    |   |        | (209  | )
|                                                    | Depreciation                     |              |        | (148  | )    |   |        | (39   | )
|                                                    | Other                            |              |        | (184  | )    |   |        | (238  | )
|                                                    |                                  |              |        |       |      |  
|Net deferred tax balance before valuation allowance |                                  |              | 4,903  |       |      |   | 3,353  |      
|Valuation allowance                                 |                                  |              | (4,903 | )     |      |   | (3,353 | )    
|                                                    |                                  |              |        |       |      |  
|Net deferred tax balance after valuation allowance  |                                  | $            |       |       |      | $ |       |      
|                                                    |                                  |              |        |       |      |  







Employee Benefit and Deferred Compensation Plans






32



---



##### 



Retiree Medical Program




Environmental Matters










33



---



##### 



Litigation


Williams Electronic Games litigation:




Other litigation:


Commitments and Contingencies






|     |  |   |       | 
|---- |  | - | ----- | 
|2005 |  | $ | 2,040 | 
|2006 |  |   | 1,440 | 
|2007 |  |   | 783   | 
|2008 |  |   | 507   | 
|2009 |  |   | 475   | 
|     |  |   |      
|     |  | $ | 5,245 | 
|     |  |   |      



34



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##### 



Business Segment and Related Information






|                        |                                                                         |                         |         |        |        |   |         |        |        |   |         |        |        | 
|----------------------- | ----------------------------------------------------------------------- | ----------------------- | ------- | ------ | ------ | - | ------- | ------ | ------ | - | ------- | ------ | ------ | 
|                        |                                                                         | Year ended December 31, |        
|                        |                                                                         |                         |        
|                        |                                                                         | 2004                    |         |        | 2003   |   |         | 2002   |       
|                        |                                                                         |                         |         |        |        |   |         |        |       
|Net revenues            |                                                                         |                         |         |        |        |   |         |        |        |   |         |       
|                        | Technology Solutions                                                    |                         |         |        |        |   |         |        |        |   |         |        |       
|                        |                                                                         | Products                |         | $      | 60,149 |   |         | $      | 55,826 |   |         | $      | 68,219 | 
|                        |                                                                         | Services                |         |        | 30,122 |   |         |        | 34,949 |   |         |        | 22,349 | 
|                        |                                                                         |                         |         |        |        |   |         |        |       
|                        |                                                                         |                         | 90,271  |        |        |   | 90,775  |        |        |   | 90,568  |       
|                        | Recreational Products                                                   |                         |         | 45,907 |        |   |         | 44,804 |        |   |         | 44,639 |       
|                        | Electronic Components                                                   |                         |         | 7,776  |        |   |         | 6,326  |        |   |         | 5,590  |       
|                        |                                                                         |                         |         |        |        |   |         |        |       
|                        |                                                                         | $                       | 143,954 |        |        | $ | 141,905 |        |        | $ | 140,797 |       
|                        |                                                                         |                         |         |        |        |   |         |        |       
|Operating income (loss) |                                                                         |                         |         |        |        |   |         |        |        |   |         |       
|                        | Technology Solutions                                                    |                         | $       | (780   | )      |   | $       | (2,135 | )      |   | $       | (2,204 | )     
|                        | Recreational Products                                                   |                         |         | 1,319  |        |   |         | 1,321  |        |   |         | 819    |       
|                        | Electronic Components                                                   |                         |         | 1,526  |        |   |         | 939    |        |   |         | 489    |       
|                        | Special item                                                            |                         |         | (700   | )      |   |         |        |        |   |         |        |       
|                        | Corporate costs                                                         |                         |         | (2,404 | )      |   |         | (2,869 | )      |   |         | (2,664 | )     
|                        |                                                                         |                         |         |        |        |   |         |        |       
|                        |                                                                         |                         | (1,039  | )      |        |   | (2,744  | )      |        |   | (3,560  | )     
|                        | Interest, net                                                           |                         |         | 161    |        |   |         | 166    |        |   |         | 200    |       
|                        |                                                                         |                         |         |        |        |   |         |        |       
|                        | Loss before income taxes and cumulative effect of accounting
    change |                         | $       | (878   | )      |   | $       | (2,578 | )      |   | $       | (3,360 | )     
|                        |                                                                         |                         |         |        |        |   |         |        |       
|Depreciation            |                                                                         |                         |         |        |        |   |         |        |        |   |         |       
|                        | Technology Solutions                                                    |                         | $       | 577    |        |   | $       | 841    |        |   | $       | 1,150  |       
|                        | Recreational Products                                                   |                         |         | 365    |        |   |         | 259    |        |   |         | 190    |       
|                        | Electronic Components                                                   |                         |         | 23     |        |   |         | 31     |        |   |         | 32     |       
|                        | Corporate                                                               |                         |         | 745    |        |   |         | 974    |        |   |         | 961    |       
|                        |                                                                         |                         |         |        |        |   |         |        |       
|                        |                                                                         | $                       | 1,710   |        |        | $ | 2,105   |        |        | $ | 2,333   |       
|                        |                                                                         |                         |         |        |        |   |         |        |       
|Total assets            |                                                                         |                         |         |        |        |   |         |        |        |   |         |       
|                        | Technology Solutions                                                    |                         | $       | 8,543  |        |   | $       | 12,829 |        |   | $       | 10,472 |       
|                        | Recreational Products                                                   |                         |         | 17,099 |        |   |         | 14,087 |        |   |         | 15,803 |       
|                        | Electronic Components                                                   |                         |         | 2,121  |        |   |         | 2,110  |        |   |         | 2,410  |       
|                        | Corporate                                                               |                         |         | 17,426 |        |   |         | 17,607 |        |   |         | 20,705 |       
|                        |                                                                         |                         |         |        |        |   |         |        |       
|                        |                                                                         | $                       | 45,189  |        |        | $ | 46,633  |        |        | $ | 49,390  |       
|                        |                                                                         |                         |         |        |        |   |         |        |       
|Capital expenditures    |                                                                         |                         |         |        |        |   |         |        |        |   |         |       
|                        | Technology Solutions                                                    |                         | $       | 94     |        |   | $       | 336    |        |   | $       | 396    |       
|                        | Recreational Products                                                   |                         |         | 405    |        |   |         | 266    |        |   |         | 382    |       
|                        | Electronic Components                                                   |                         |         | 16     |        |   |         | 8      |        |   |         | 12     |       
|                        | Corporate                                                               |                         |         | 90     |        |   |         | 390    |        |   |         | 745    |       
|                        |                                                                         |                         |         |        |        |   |         |        |       
|                        |                                                                         | $                       | 605     |        |        | $ | 1,000   |        |        | $ | 1,535   |       
|                        |                                                                         |                         |         |        |        |   |         |        |       

35



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##### 



QUARTERLY RESULTS OF OPERATIONS


(Unaudited)


(In thousands, except per share data)


|                                  |                                |               |        |        |         |   |        |         |   |   |         |        |   |   |        |        |  
|--------------------------------- | ------------------------------ | ------------- | ------ | ------ | ------- | - | ------ | ------- | - | - | ------- | ------ | - | - | ------ | ------ | -
|                                  |                                | Quarter ended |       
|                                  |                                |               |       
|                                  |                                | Mar. 31       |        |        | Jun. 30 |   |        | Sep. 30 |   |   | Dec. 31 |       
|                                  |                                |               |        |        |         |   |        |         |   |   |         |       
|Year ended December 31, 2004      |                                |               |        |        |         |   |        |         |   |   |         |        |   |   |        |       
|Net revenues                      |                                |               |        |        |         |   |        |         |   |   |         |        |   |   |        |       
|                                  | Products                       |               | $      | 26,095 |         |   | $      | 36,250  |   |   | $       | 32,300 |   |   | $      | 19,187 |  
|                                  | Services                       |               |        | 8,333  |         |   |        | 7,568   |   |   |         | 7,190  |   |   |        | 7,031  |  
|                                  |                                |               |        |        |         |   |        |         |   |   |         |       
|                                  |                                |               | 34,428 |        |         |   | 43,818 |         |   |   | 39,490  |        |   |   | 26,218 |       
|                                  |                                |               |        |        |         |   |        |         |   |   |         |       
|Costs and expenses                |                                |               |        |        |         |   |        |         |   |   |         |        |   |   |        |       
|                                  | Cost of products sold          |               |        | 21,415 |         |   |        | 29,973  |   |   |         | 26,445 |   |   |        | 15,046 |  
|                                  | Cost of services provided      |               |        | 6,732  |         |   |        | 6,000   |   |   |         | 5,687  |   |   |        | 5,808  |  
|                                  | Selling and administrative     |               |        | 6,563  |         |   |        | 6,557   |   |   |         | 6,574  |   |   |        | 5,783  |  
|                                  | Depreciation                   |               |        | 447    |         |   |        | 455     |   |   |         | 406    |   |   |        | 402    |  
|                                  | Interest, net                  |               |        | (30    | )       |   |        | (38     | ) |   |         | (39    | ) |   |        | (54    | )
|                                  | Special item                   |               |        |        |         |   |        |         |   |   |         | 700    |   |   |        |        |  
|                                  |                                |               |        |        |         |   |        |         |   |   |         |       
|                                  |                                |               | 35,127 |        |         |   | 42,947 |         |   |   | 39,773  |        |   |   | 26,985 |       
|                                  |                                |               |        |        |         |   |        |         |   |   |         |       
|Income (loss) before income taxes |                                |               | (699   | )      |         |   | 871    |         |   |   | (283    | )      |   |   | (767   | )     
|Income tax provision              |                                |               |        |        |         |   | 44     |         |   |   | 31      |        |   |   |        |       
|                                  |                                |               |        |        |         |   |        |         |   |   |         |       
|Net income (loss)                 |                                | $             | (699   | )      |         | $ | 827    |         |   | $ | (314    | )      |   | $ | (767   | )     
|                                  |                                |               |        |        |         |   |        |         |   |   |         |       
|Share and Per Share Data          |                                |               |        |        |         |   |        |         |   |   |         |        |   |   |        |       
|BASIC                             |                                |               |        |        |         |   |        |         |   |   |         |        |   |   |        |       
|                                  | Net income (loss)              |               | $      | (.08   | )       |   | $      | .10     |   |   | $       | (.04   | ) |   | $      | (.09   | )
|                                  |                                |               |        |        |         |   |        |         |   |   |         |       
|                                  | Weighted average common shares |               |        | 8,371  |         |   |        | 8,375   |   |   |         | 8,378  |   |   |        | 8,418  |  
|                                  |                                |               |        |        |         |   |        |         |   |   |         |       
|DILUTED                           |                                |               |        |        |         |   |        |         |   |   |         |        |   |   |        |       
|                                  | Net income (loss)              |               | $      | (.08   | )       |   | $      | .10     |   |   | $       | (.04   | ) |   | $      | (.09   | )
|                                  |                                |               |        |        |         |   |        |         |   |   |         |       
|                                  | Weighted average common shares |               |        | 8,371  |         |   |        | 8,475   |   |   |         | 8,378  |   |   |        | 8,418  |  
|                                  |                                |               |        |        |         |   |        |         |   |   |         |       
|Year ended December 31, 2003      |                                |               |        |        |         |   |        |         |   |   |         |        |   |   |        |       
|Net revenues                      |                                |               |        |        |         |   |        |         |   |   |         |        |   |   |        |       
|                                  | Products                       |               | $      | 23,568 |         |   | $      | 30,398  |   |   | $       | 30,625 |   |   | $      | 22,365 |  
|                                  | Services                       |               |        | 8,509  |         |   |        | 8,977   |   |   |         | 8,953  |   |   |        | 8,510  |  
|                                  |                                |               |        |        |         |   |        |         |   |   |         |       
|                                  |                                |               | 32,077 |        |         |   | 39,375 |         |   |   | 39,578  |        |   |   | 30,875 |       
|                                  |                                |               |        |        |         |   |        |         |   |   |         |       
|Costs and expenses                |                                |               |        |        |         |   |        |         |   |   |         |        |   |   |        |       
|                                  | Cost of products sold          |               |        | 19,007 |         |   |        | 24,721  |   |   |         | 25,278 |   |   |        | 18,175 |  
|                                  | Cost of services provided      |               |        | 6,972  |         |   |        | 6,998   |   |   |         | 7,258  |   |   |        | 7,221  |  
|                                  | Selling and administrative     |               |        | 6,833  |         |   |        | 6,847   |   |   |         | 6,845  |   |   |        | 6,389  |  
|                                  | Depreciation                   |               |        | 590    |         |   |        | 519     |   |   |         | 489    |   |   |        | 507    |  
|                                  | Interest, net                  |               |        | (22    | )       |   |        | (44     | ) |   |         | (59    | ) |   |        | (41    | )
|                                  |                                |               |        |        |         |   |        |         |   |   |         |       
|                                  |                                |               | 33,380 |        |         |   | 39,041 |         |   |   | 39,811  |        |   |   | 32,251 |       
|                                  |                                |               |        |        |         |   |        |         |   |   |         |       
|Income (loss) before income taxes |                                |               | (1,303 | )      |         |   | 334    |         |   |   | (233    | )      |   |   | (1,376 | )     
|Income tax provision (benefit)    |                                |               | (391   | )      |         |   | 114    |         |   |   | 277     |        |   |   | 1,209  |       
|                                  |                                |               |        |        |         |   |        |         |   |   |         |       
|Net income (loss)                 |                                | $             | (912   | )      |         | $ | 220    |         |   | $ | (510    | )      |   | $ | (2,585 | )     
|                                  |                                |               |        |        |         |   |        |         |   |   |         |       
|Share and Per Share Data          |                                |               |        |        |         |   |        |         |   |   |         |        |   |   |        |       
|BASIC AND DILUTED                 |                                |               |        |        |         |   |        |         |   |   |         |        |   |   |        |       
|                                  | Net income (loss)              |               | $      | (.11   | )       |   | $      | .03     |   |   | $       | (.06   | ) |   | $      | (.31   | )
|                                  |                                |               |        |        |         |   |        |         |   |   |         |       
|                                  | Weighted average common shares |               |        | 8,367  |         |   |        | 8,367   |   |   |         | 8,367  |   |   |        | 8,367  |  
|                                  |                                |               |        |        |         |   |        |         |   |   |         |       

36



---



##### 






SCHEDULE II  VALUATION AND QUALIFYING
ACCOUNTS


(In thousands)


|                              |                                  |            |       |       |           |   |       |            |  |           |        |     |  |   |       |       | 
|----------------------------- | -------------------------------- | ---------- | ----- | ----- | --------- | - | ----- | ---------- |  | --------- | ------ | --- |  | - | ----- | ----- | 
|                              |                                  | Balance at |       |       | Charge to |   |       |            |  | Balance   |       
|                              |                                  | beginning  |       |       | costs and |   |       |            |  | at end of |       
|Description                   |                                  | of period  |       |       | expenses  |   |       | Deductions |  |           | period |    
|                              |                                  |            |       |       |           |   |       |            |  |           |        |    
|Year ended December 31, 2004: |                                  |            |       |       |           |   |       |            |  |           |        |     |  |   |       |      
|                              | Allowance for doubtful accounts  |            | $     | 936   |           |   | $     | 114        |  |           | $      | 323 |  |   | $     | 727   | 
|                              | Inventory reserves               |            |       | 871   |           |   |       | 229        |  |           |        | 171 |  |   |       | 929   | 
|                              | Deferred tax valuation allowance |            |       | 3,353 |           |   |       | 1,550      |  |           |        |     |  |   |       | 4,903 | 
|                              |                                  |            |       |       |           |   |       |            |  |           |        |    
|                              |                                  | $          | 5,160 |       |           | $ | 1,893 |            |  | $         | 494    |     |  | $ | 6,559 |      
|                              |                                  |            |       |       |           |   |       |            |  |           |        |    
|Year ended December 31, 2003: |                                  |            |       |       |           |   |       |            |  |           |        |     |  |   |       |      
|                              | Allowance for doubtful accounts  |            | $     | 749   |           |   | $     | 207        |  |           | $      | 20  |  |   | $     | 936   | 
|                              | Inventory reserves               |            |       | 756   |           |   |       | 281        |  |           |        | 166 |  |   |       | 871   | 
|                              | Deferred tax valuation allowance |            |       |       |           |   |       | 3,353      |  |           |        |     |  |   |       | 3,353 | 
|                              |                                  |            |       |       |           |   |       |            |  |           |        |    
|                              |                                  | $          | 1,505 |       |           | $ | 3,841 |            |  | $         | 186    |     |  | $ | 5,160 |      
|                              |                                  |            |       |       |           |   |       |            |  |           |        |    
|Year ended December 31, 2002: |                                  |            |       |       |           |   |       |            |  |           |        |     |  |   |       |      
|                              | Allowance for doubtful accounts  |            | $     | 1,525 |           |   | $     | 63         |  |           | $      | 839 |  |   | $     | 749   | 
|                              | Inventory reserves               |            |       | 391   |           |   |       | 592        |  |           |        | 227 |  |   |       | 756   | 
|                              |                                  |            |       |       |           |   |       |            |  |           |        |    
|                              |                                  | $          | 1,916 |       |           | $ | 655   |            |  | $         | 1,066  |     |  | $ | 1,505 |      
|                              |                                  |            |       |       |           |   |       |            |  |           |        |    




Item 9.     Changes in and
Disagreements with Accountants on Accounting and Financial
Disclosure







Item 9A.     Controls and
Procedures









PART III







|         |                                                   
|-------- | --------------------------------------------------
|Item 10. | Directors and Executive Officers of the Registrant



37



---



##### 












|         |                       
|-------- | ----------------------
|Item 11. | Executive Compensation








|         |                                                                   
|-------- | ------------------------------------------------------------------
|Item 12. | Security Ownership of Certain Beneficial Owners and
    Management








|         |                                               
|-------- | ----------------------------------------------
|Item 13. | Certain Relationships and Related Transactions








|         |                                       
|-------- | --------------------------------------
|Item 14. | Principal Accounting Fees and Services






PART IV







|         |                                          
|-------- | -----------------------------------------
|Item 15. | Exhibits and Financial Statement Schedule

Financial Statements:




Financial Statement
Schedule:




Exhibits:


|       |    |     |               |                                                                                                                                                                                                                                               
|------ | -- | --- | ------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number |    |     | Exhibit Title
|       |    |     |              
|       | 2  | .   |               | Agreement and Plan of Merger, dated as of November 26, 1996
    among Registrant, ME Acquisitions, Inc., and Milgray
    Electronics, Inc. is incorporated by reference to
    Exhibit 2.1 of the Form 8-K dated January 7, 1997.             
|      
|       | 3  | .   |               | The Restated Articles of Incorporation and Restated By-laws are
    incorporated by reference to Exhibits 3.1 and 3.2,
    respectively, to Registrants Form 8-B dated
    March 22, 1995, as amended.                                       
|      
|       | 4  | .   |               | The Specimen of Registrants Common Stock certificates is
    incorporated by reference to Exhibit 5 to Amendment
    number 1 to Registrants Form 8-B filed
    January 15, 1980.                                                           
|      
|       | 10 | .a. |               | The 1990 Stock Option and Incentive Plan is incorporated by
    reference to Exhibit A of Registrants definitive
    Proxy Statement (File No. 1-7899) filed in connection with
    the Annual Meeting of Shareholders held October 29, 1990.

38



---



##### 



|       |   |   |               |                                                                                                                                                                                                                                                                  
|------ | - | - | ------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number |   |   | Exhibit Title
|       |   |   |              
|       | b | . |               | The 1993 Employees Stock Purchase Plan is incorporated by
    reference to Exhibit A of Registrants definitive
    Proxy Statement (File No. 1-7899) filed in connection with
    the Annual Meeting of Shareholders held November 2, 1993.                    
|      
|       | c | . |               | The 1994 Stock Option Plan is incorporated by reference to
    Exhibit A of the Registrants definitive Proxy
    Statement (File No. 1-7899) filed in connection with the
    Annual Meeting of Shareholders held on November 1, 1994.                          
|      
|       | d | . |               | Form of Indemnity Agreement between the Registrant and its
    executive officers and directors is incorporated by reference to
    Exhibit 10.10 to Registrants Form 8-B dated
    March 22, 1995, as amended.                                                 
|      
|       | e | . |               | Non-Employee Directors Stock Option Plan, as revised is,
    incorporated by reference to Exhibit 10.1 to
    Registrants Form 10-K dated December 31, 1995.                                                                                                   
|      
|       | f | . |               | Form of Stock Option Agreement between the Registrant and
    Non-employee Directors is incorporated by reference to
    Exhibit 10.m to Registrants Form 10-K dated
    December 31, 1995.                                                                     
|      
|       | g | . |               | Amendment to the 1994 Stock Option Plan dated August 8,
    1997 is incorporated by reference to Exhibit 99 to
    Registrants Form 10-Q dated June 30, 1997.                                                                                                   
|      
|       | h | . |               | Post-effective Amendment No. 1 to the 1994 Stock Option
    Plan dated August 12, 1997 is incorporated by reference to
    Exhibit 4.1.1 to Registrants Form S-8 dated
    August 12, 1997.                                                                     
|      
|       | i | . |               | 1997 Deferred Compensation Plan dated August 27, 1997 is
    incorporated by reference to Exhibit 4.1 to
    Registrants Form S-8 dated August 28, 1997.                                                                                                        
|      
|       | j | . |               | The Employment Agreement between the Registrant and Tracy A.
    Edwards, dated February 1, 1999 is incorporated by
    reference to Exhibit 10.s of the Registrants Annual Report
    on Form 10-K dated December 31, 1998.                                     
|      
|       | k | . |               | The Agreement of Purchase and Sale dated October 1, 1998
    between Bell Industries, Inc. and Arrow Electronics, Inc. is
    incorporated by reference to Exhibit 2.1 of the
    Registrants Form 8-K, event date October 1, 1998.                             
|      
|       | l | . |               | Credit Agreement dated as of April 14, 1999 between the
    Registrant and Union Bank of California, N.A. is incorporated by
    reference to Exhibit 10.x of the Registrants Annual
    Report on Form 10-K dated December 31, 2000.                           
|      
|       | m | . |               | First Amendment to Credit Agreement dated as of April 26,
    2000 between the Registrant and Union Bank of California, N.A.
    is incorporated by reference to Exhibit 10.y of the
    Registrants. Annual Report on Form 10-K dated
    December 31, 2000.   
|      
|       | n | . |               | Agreement for Wholesale Financing dated as of May 11, 2001
    between the Registrant and Deutsche Financial Services
    Corporation is incorporated by reference to Exhibit 10.1 of
    the Registrants Quarterly Report on Form 10-Q dated
    June 30, 2001.
|      
|       | o | . |               | Agreement for Wholesale Financing dated as of June 27, 2001
    between the Registrant and IBM Credit Corporation is
    incorporated by reference to Exhibit 10.2 of the
    Registrants Quarterly Report on Form 10-Q dated
    June 30, 2001.                
|      
|       | p | . |               | The Bell Industries, Inc. 2001 Stock Option Plan is incorporated
    by reference to Exhibit 99. of the Registrants
    Quarterly Report on Form 10-Q dated September 30, 2001.                                                                                 
|      
|       | q | . |               | Second Amendment to Credit Agreement dated as of March 27,
    2002 between the Registrant and Union Bank of California, N.A.
    is incorporated by reference to Exhibit 10.w of the
    Registrants Annual Report on Form 10-K dated
    December 31, 2001.   
|      
|       | r | . |               | Amended and Restated Agreement for Wholesale Financing dated as
    of July 18, 2002 between the Registrant and IBM Credit
    Corporation.                                                                                                                      
|      
|       | s | . |               | Third Amendment to Credit Agreement dated as of May 12,
    2003 between the Registrant and Union Bank of California, N.A.
    is incorporated by reference to Exhibit 10.x of the
    Registrants Annual Report on Form 10-K dated
    December 31, 2003.      
|      
|       | t | . |               | Letter Agreement dated as of August 12, 2003 between the
    Registrant and Union Bank of California, N.A. is incorporated by
    reference to Exhibit 10.y of the Registrants Annual
    Report on Form 10-K dated December 31, 2003.                          

39



---



##### 



|       |    |    |               |                                                                                                                                                                                                                                     
|------ | -- | -- | ------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number |    |    | Exhibit Title
|       |    |    |              
|       | u  | .  |               | The Severance Agreement between the Registrant and Russell A.
    Doll dated as of December 1, 2003 is incorporated by
    reference to Exhibit 10.2 of the Registrants
    Quarterly Report on Form 10-Q dated September 30, 2004.
|      
|       | v  | .  |               | Amendment to Agreement for Wholesale financing dated as of
    December 12, 2003 between the Registrant and GE Commercial
    Distribution Finance Corporation (formerly known as Deutsche
    Financial Corporation).              
|      
|       | w  | .  |               | Letter Agreement dated as of May 11, 2004 between the
    Registrant and IBM Credit LLC (formerly IBM Credit Corporation).                                                                                                          
|      
|       | x  | .  |               | The Severance Agreement between the Registrant and Mitchell I.
    Rosen dated as of January 13, 2005 is incorporated by
    reference to Exhibit 10.1 of the Registrants current
    report on Form 8-K dated January 19, 2005.   
|      
|       | 21 | .  |               | Subsidiaries of the Registrant.                                                                                                                                                                                                     
|      
|       | 23 | .  |               | Consent of Independent Registered Public Accounting Firm.                                                                                                                                                                           
|      
|       | 31 | .1 |               | Certification of Russell A. Doll, Acting Chief Executive Officer
    of Registrant pursuant to Rule 13a-14 adopted under the
    Securities Exchange Act of 1934, as amended, and
    Section 302 of the Sarbanes-Oxley Act of 2002.
|      
|       | 31 | .2 |               | Certification of Mitchell I. Rosen, Chief Financial Officer of
    Registrant, pursuant to Rule 13a-14 adopted under the
    Securities Exchange Act of 1934, as amended, and
    Section 302 of the Sarbanes-Oxley Act of 2002.    
|      
|       | 32 | .1 |               | Certification of Russell A. Doll, Acting Chief Executive Officer
    of Registrant furnished pursuant to 18 U.S.C.
    Section 1350, as adopted pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002.                      
|      
|       | 32 | .2 |               | Certification of Mitchell I. Rosen, Chief Financial Officer of
    Registrant furnished pursuant to 18 U.S.C.
    Section 1350, as adopted pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002.                           

40



---



##### 






SIGNATURES






| |                      
| | ---------------------
| | Bell Industries, Inc.



| |     |                    
| | --- | -------------------
| | By: | /s/ Russell A. Doll

| |                                             
| | --------------------------------------------
| |                                             
| | Russell A. Doll                             
| | Acting President and Chief Executive Officer





|                                           |  |                                                                                             |  | 
|------------------------------------------ |  | ------------------------------------------------------------------------------------------- |  | 
|Signature                                  |  | Title                                                                                      
|                                           |  |                                                                                            
|                                          
|/s/ Mark E. SchwarzMark
    E. Schwarz     |  | Director and Chairman of the Board                                                         
|                                          
|/s/ Russell A. DollRussell
    A. Doll     |  | Acting President and Chief Executive Officer (Principal
    Executive Officer)
    Director
|                                          
|/s/ Mitchell I. RosenMitchell
    I. Rosen |  | Vice President and Chief Financial Officer
    (Principal Financial and Accounting Officer)
|                                          
|/s/ Charles B. GravesCharles
    B. Graves |  | Director                                                                                   
|                                          
|/s/ L. James LawsonL.
    James Lawson     |  | Director                                                                                   
|                                          
|/s/ Michael R. ParksMichael
    R. Parks   |  | Director                                                                                   

41



---



##### 






EXHIBIT INDEX


|        |     |    |             |                                                                                                                                                                                                                                                                     
|------- | --- | -- | ----------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |     |    |            
|Number  |     |    | Description
|        |     |    |            
|        | 2.  |    |             | Agreement and Plan of Merger, dated as of November 26, 1996
    among Registrant, ME Acquisitions, Inc., and Milgray
    Electronics, Inc. is incorporated by reference to
    Exhibit 2.1 of the Form 8-K dated January 7,
    1997.(*)                            
|       
|        | 3.  |    |             | The Restated Articles of Incorporation and Restated By-laws are
    incorporated by reference to Exhibits 3.1 and 3.2,
    respectively, to Registrants Form 8-B dated
    March 22, 1995, as amended.(*)                                                          
|       
|        | 4.  |    |             | The Specimen of Registrants Common Stock certificates is
    incorporated by reference to Exhibit 5 to Amendment
    number 1 to Registrants Form 8-B filed
    January 15, 1980.(*)                                                                              
|       
|        | 10. | a. |             | The 1990 Stock Option and Incentive Plan is incorporated by
    reference to Exhibit A of Registrants definitive
    Proxy Statement (File No. 1-7899) filed in connection with
    the Annual Meeting of Shareholders held October 29, 1990.(*)                   
|       
|        |     | b. |             | The 1993 Employees Stock Purchase Plan is incorporated by
    reference to Exhibit A of Registrants definitive
    Proxy Statement (File No. 1-7899) filed in connection with
    the Annual Meeting of Shareholders held November 2, 1993.(*)                    
|       
|        |     | c. |             | The 1994 Stock Option Plan is incorporated by reference to
    Exhibit A of the Registrants definitive Proxy
    Statement (File No. 1-7899) filed in connection with the
    Annual Meeting of Shareholders held on November 1, 1994.(*)                          
|       
|        |     | d. |             | Form of Indemnity Agreement between the Registrant and its
    executive officers and directors is incorporated by reference to
    Exhibit 10.10 to Registrants Form 8-B dated
    March 22, 1995, as amended.(*)                                                 
|       
|        |     | e. |             | Non-Employee Directors Stock Option Plan, as revised is,
    incorporated by reference to Exhibit 10.1 to
    Registrants Form  10-K dated December 31,
    1995.(*)                                                                                              
|       
|        |     | f. |             | Form of Stock Option Agreement between the Registrant and
    Non-employee Directors is incorporated by reference to
    Exhibit 10.m to Registrants Form 10-K dated
    December 31, 1995.(*)                                                                     
|       
|        |     | g. |             | Amendment to the 1994 Stock Option Plan dated August 8,
    1997 is incorporated by reference to Exhibit 99 to
    Registrants Form  10-Q dated June 30,
    1997.(*)                                                                                              
|       
|        |     | h. |             | Post-effective Amendment No. 1 to the 1994 Stock Option
    Plan dated August 12, 1997 is incorporated by reference to
    Exhibit 4.1.1 to Registrants Form S-8 dated
    August 12, 1997.(*)                                                                     
|       
|        |     | i. |             | 1997 Deferred Compensation Plan dated August 27, 1997 is
    incorporated by reference to Exhibit 4.1 to
    Registrants Form S-8 dated August 28, 1997.(*)                                                                                                        
|       
|        |     | j. |             | The Employment Agreement between the Registrant and Tracy A.
    Edwards, dated February 1, 1999 is incorporated by
    reference to Exhibit 10.s of the Registrants Annual Report
    on Form 10-K dated December 31, 1998.(*)                                     
|       
|        |     | k. |             | The Agreement of Purchase and Sale dated October 1, 1998
    between Bell Industries, Inc. and Arrow Electronics, Inc. is
    incorporated by reference to Exhibit 2.1 of the
    Registrants Form 8-K, event date October 1,
    1998.(*)                         
|       
|        |     | l. |             | Credit Agreement dated as of April 14, 1999 between the
    Registrant and Union Bank of California, N.A. is incorporated by
    reference to Exhibit 10.x of the Registrants Annual
    Report on Form 10-K dated December 31, 2000.(*)                           
|       
|        |     | m. |             | First Amendment to Credit Agreement dated as of April 26,
    2000 between the Registrant and Union Bank of California, N.A.
    is incorporated by reference to Exhibit 10.y of the
    Registrants. Annual Report on Form 10-K dated
    December 31, 2000.(*)   
|       
|        |     | n. |             | Agreement for Wholesale Financing dated as of May 11, 2001
    between the Registrant and Deutsche Financial Services
    Corporation is incorporated by reference to Exhibit 10.1 of
    the Registrants Quarterly Report on Form 10-Q dated
    June 30, 2001.(*)
|       
|        |     | o. |             | Agreement for Wholesale Financing dated as of June 27, 2001
    between the Registrant and IBM Credit Corporation is
    incorporated by reference to Exhibit 10.2 of the
    Registrants Quarterly Report on Form 10-Q dated
    June 30, 2001.(*)                
|       
|        |     | p. |             | The Bell Industries, Inc. 2001 Stock Option Plan is incorporated
    by reference to Exhibit 99. of the Registrants
    Quarterly Report on Form 10-Q dated September 30,
    2001.(*)                                                                             

42



---



##### 



|        |     |    |             |                                                                                                                                                                                                                                                                  
|------- | --- | -- | ----------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |     |    |            
|Number  |     |    | Description
|        |     |    |            
|        |     | q. |             | Second Amendment to Credit Agreement dated as of March 27,
    2002 between the Registrant and Union Bank of California, N.A.
    is incorporated by reference to Exhibit 10.w of the
    Registrants Annual Report on Form 10-K dated
    December 31, 2001.(*)
|       
|        |     | r. |             | Amended and Restated Agreement for Wholesale Financing dated as
    of July 18, 2002 between the Registrant and IBM Credit
    Corporation.                                                                                                                      
|       
|        |     | s. |             | Third Amendment to Credit Agreement dated as of May 12,
    2003 between the Registrant and Union Bank of California, N.A.
    is incorporated by reference to Exhibit 10.x of the
    Registrants Annual Report on Form 10-K dated
    December 31, 2003.(*)   
|       
|        |     | t. |             | Letter Agreement dated as of August 12, 2003 between the
    Registrant and Union Bank of California, N.A. is incorporated by
    reference to Exhibit 10.y of the Registrants Annual
    Report on Form 10-K dated December 31, 2003.(*)                       
|       
|        |     | u. |             | The Severance Agreement between the Registrant and Russell A.
    Doll dated as of December 1, 2003 is incorporated by
    reference to Exhibit 10.2 of the Registrants
    Quarterly Report on Form 10-Q dated September 30,
    2004.(*)                      
|       
|        |     | v. |             | Amendment to Agreement for Wholesale financing dated as of
    December 12, 2003 between the Registrant and GE Commercial
    Distribution Finance Corporation (formerly known as Deutsche
    Financial Corporation).                                           
|       
|        |     | w. |             | Letter Agreement dated as of May 11, 2004 between the
    Registrant and IBM Credit LLC (formerly IBM Credit Corporation)                                                                                                                                        
|       
|        |     | x. |             | The Severance Agreement between the Registrant and Mitchell I.
    Rosen dated as of January 13, 2005 is incorporated by
    reference to Exhibit 10.1 of the Registrants current
    report on Form 8-K dated January 19, 2005.(*)                             
|       
|        | 21. |    |             | Subsidiaries of the Registrant.                                                                                                                                                                                                                                  
|       
|        | 23. |    |             | Consent of Independent Registered Public Accounting Firm.                                                                                                                                                                                                        
|       
|        | 31. | 1  |             | Certification of Russell A. Doll, Acting Chief Executive Officer
    of Registrant pursuant to Rule 13a-14 adopted under the
    Securities Exchange Act of 1934, as amended, and
    Section 302 of the Sarbanes-Oxley Act of 2002.                             
|       
|        | 31. | 2  |             | Certification of Mitchell I. Rosen, Chief Financial Officer of
    Registrant pursuant to Rule 13a-14 adopted under the
    Securities Exchange Act of 1934, as amended, and
    Section 302 of the Sarbanes-Oxley Act of 2002.                                  
|       
|        | 32. | 1  |             | Certification of Russell A. Doll, Acting Chief Executive Officer
    of Registrant furnished pursuant to 18 U.S.C.
    Section 1350, as adopted pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002.                                                   
|       
|        | 32. | 2  |             | Certification of Mitchell I. Rosen, Chief Financial Officer of
    Registrant furnished pursuant to 18 U.S.C.
    Section 1350, as adopted pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002.                                                        






43