##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended March 31, 2007ORo
    
    TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from           to
 Commission file number I-4334
 SUNAIR SERVICES CORPORATION
 
 (Exact Name of Registrant as Specified in Its Charter)
 Florida
    
    59-0780772(State or Other Jurisdiction of 
Incorporation or Organization)
    
    (I.R.S. Employer Identification No.)
 595 South Federal Highway, Suite 500
Boca Raton, Florida
    
    33432(Address of Principal Executive Offices)
    
    (Zip Code)
  
 (Registrants Telephone Number, Including Area Code)
  
 (Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
  þ o
  o o þ
  o þ




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##### 



SUNAIR SERVICES CORPORATION AND SUBSIDIARIES
 INDEX
 PageNo.PART I.
    
    FINANCIAL INFORMATION
    
    
    3Item 1.
    
    Financial Statements
    
    
    3Consolidated Condensed Balance Sheets as of March 31, 2007 and September 30, 2006 (unaudited)
    
    
    3Consolidated Condensed Statements of Operations for the Six Months Ended March 31, 2007 and
2006 (unaudited)
    
    
    5Consolidated Condensed Statements of Operations for the Three Months Ended March 31, 2007
and 2006 (unaudited)
    
    
    6Consolidated Condensed Statements of Cash Flows for the Six Months Ended March 31, 2007 and
2006 (unaudited)
    
    
    7Notes to Unaudited Consolidated Condensed Financial Statements
    
    
    9Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    16Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    19Item 4.
    
    Controls and Procedures
    
    
    19PART II.
    
    OTHER INFORMATION
    
    
    20Item 1.
    
    Legal Proceedings
    
    
    20Item 1A.
    
    Risk Factors
    
    
    20Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    20Item 3.
    
    Defaults Upon Senior Securities
    
    
    20Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    20Item 5.
    
    Other Information
    
    
    20Item 6.
    
    Exhibits
    
    
    20Signatures
    
    
    
    
    21Ex-10.22 First Amendment to Credit AgreementEX-31.1 Section 302 Certification of CEOEX-31.2 Section 302 Certification of CFOEX-32.1 Section 906 Certification of CEOEX-32.2 Section 906 Certification of CFO
   
 2




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##### Table of Contents



PART I
FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 
 SUNAIR SERVICES CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
AS OF MARCH 31, 2007 AND SEPTEMBER 30, 2006
(UNAUDITED)
 MARCH 31, 2007
    
    
    SEPTEMBER 30, 2006ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    2,199,441
    
    
    $
    1,601,110Accounts receivable, net
    
    
    6,591,988
    
    
    
    4,919,595Income tax receivable
    
    
    328,551
    
    
    
    352,393Interest receivable
    
    
    29,074
    
    
    
    11,084Inventories, net
    
    
    2,604,822
    
    
    
    2,328,205Deferred tax asset
    
    
    31,379
    
    
    
    137,387Prepaid and other current assets
    
    
    1,648,290
    
    
    
    1,163,508Note receivable, current
    
    
    334,986
    
    
    
    334,986Total Current Assets
    
    
    13,768,531
    
    
    
    10,848,268PROPERTY, PLANT, AND EQUIPMENT, net
    
    
    2,240,024
    
    
    
    2,538,434OTHER ASSETS:Note receivable
    
    
    2,000,000
    
    
    
    2,000,000Software costs, net
    
    
    3,825,102
    
    
    
    3,938,465Customer list, net
    
    
    11,524,936
    
    
    
    11,247,099Goodwill
    
    
    55,548,004
    
    
    
    52,818,269Other assets
    
    
    229,100
    
    
    
    522,427Total Other Assets
    
    
    73,127,142
    
    
    
    70,526,260TOTAL ASSETS
    
    $
    89,135,697
    
    
    $
    83,912,962
  3




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SUNAIR SERVICES CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
AS OF MARCH 31, 2007 AND SEPTEMBER 30, 2006
(UNAUDITED)
 MARCH 31, 2007
    
    
    SEPTEMBER 30, 2006LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Accounts payable
    
    $
    4,156,480
    
    
    $
    2,743,523Accrued expenses
    
    
    3,948,411
    
    
    
    2,831,162Unearned revenues
    
    
    1,334,224
    
    
    
    589,365Customer deposits
    
    
    2,852,261
    
    
    
    2,677,364Capitalized leases, current portion
    
    
    9,632
    
    
    
    8,796Notes payable, current portion
    
    
    132,000
    
    
    
    138,374Total Current Liabilities
    
    
    12,433,008
    
    
    
    8,988,584LONG TERM LIABILITIES:Capitalized leases, net of current portion
    
    
    14,947
    
    
    
    20,027Notes payable, net of current portion
    
    
    3,177,553
    
    
    
    1,723,642Note payable -related party
    
    
    5,000,000
    
    
    
    5,000,000Revolving line of credit
    
    
    7,100,000
    
    
    
    8,000,000Deferred tax liability
    
    
    275,318
    
    
    
    112,226Total Long Term Liabilities
    
    
    15,567,818
    
    
    
    14,855,895TOTAL LIABILITIES
    
    
    28,000,826
    
    
    
    23,844,479COMMITMENTS & CONTINGENCIESSTOCKHOLDERS EQUITY:Preferred stock, no par value, 8,000,000 shares
authorized, none issued and outstanding
    
    
    
    
    
    
    Common stock, $.10 par value, 100,000,000 shares
authorized, 13,091,088 and 13,007,559 shares issued and outstanding
at March 31, 2007 and September 30, 2006, respectively
    
    
    1,309,109
    
    
    
    1,300,757Additional paid-in capital
    
    
    52,126,224
    
    
    
    51,548,768Retained earnings
    
    
    7,580,910
    
    
    
    7,200,197Accumulated other comprehensive gain  cumulative translation adjustment
    
    
    118,628
    
    
    
    18,761Total Stockholders Equity
    
    
    61,134,871
    
    
    
    60,068,483TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    89,135,697
    
    
    $
    83,912,962
  4




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SUNAIR SERVICES CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
 FOR THE SIX
    
    
    FOR THE SIXMONTHS ENDED
    
    
    MONTHS ENDEDMARCH 31, 2007
    
    
    MARCH 31, 2006SALES
    
    $
    34,161,310
    
    
    $
    24,279,110COST OF SALES
    
    
    14,199,809
    
    
    
    10,005,519GROSS PROFIT
    
    
    19,961,501
    
    
    
    14,273,591SELLING AND ADMINISTRATIVE EXPENSES
    
    
    20,923,876
    
    
    
    15,977,846LOSS FROM OPERATIONS
    
    
    962,375
    
    
    
    1,704,255OTHER INCOME (EXPENSES):Interest income
    
    
    119,418
    
    
    
    2,495Interest expense
    
    
    (675,713
    )
    
    
    (668,445
    )Gain on sale of assets
    
    
    9,423
    
    
    
    Other income
    
    
    
    
    
    
    5,000Total Other Income (Expenses)
    
    
    (546,872
    )
    
    
    (660,950
    )LOSS FROM CONTINUING OPERATIONSBEFORE INCOME TAXES
    
    
    1,509,247
    
    
    
    2,365,205INCOME TAX BENEFIT
    
    
    528,484
    
    
    
    687,072LOSS FROM CONTINUING OPERATIONS
    
    
    980,763
    
    
    
    1,678,133INCOME FROM DISCONTINUED OPERATIONS, NET
OF INCOME TAX PROVISION OF $821,426 AND $221,015
IN 2007 AND 2006, RESPECTIVELY
    
    
    1,361,476
    
    
    
    515,701NET INCOME (LOSS)
    
    $
    380,713
    
    
    $
    (1,162,432
    )BASIC AND DILUTED INCOME (LOSS) PER SHARE:CONTINUING OPERATIONS
    
    $
    (0.07
    )
    
    $
    (0.14
    )DISCONTINUED OPERATIONS
    
    $
    0.10
    
    
    $
    0.04NET INCOME (LOSS)
    
    $
    0.03
    
    
    $
    (0.10
    )WEIGHTED AVERAGE SHARES OUTSTANDING:BASIC
    
    
    13,041,634
    
    
    
    11,646,412DILUTED
    
    
    13,041,634
    
    
    
    11,646,412
  5




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SUNAIR SERVICES CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
 FOR THE THREE
    
    
    FOR THE THREEMONTHS ENDED
    
    
    MONTHS ENDEDMARCH 31, 2007
    
    
    MARCH 31, 2006SALES
    
    $
    18,275,055
    
    
    $
    13,053,535COST OF SALES
    
    
    7,307,796
    
    
    
    5,391,434GROSS PROFIT
    
    
    10,967,259
    
    
    
    7,662,101SELLING AND ADMINISTRATIVE EXPENSES
    
    
    11,042,173
    
    
    
    8,801,166LOSS FROM OPERATIONS
    
    
    74,914
    
    
    
    1,139,065OTHER INCOME (EXPENSES):Interest income
    
    
    51,644
    
    
    
    1,026Interest expense
    
    
    (387,390
    )
    
    
    (257,270
    )Loss on sale of assets
    
    
    32,224
    
    
    
    Other income
    
    
    
    
    
    
    9,789Total Other Income (Expenses)
    
    
    (303,522
    )
    
    
    (246,455
    )LOSS FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES
    
    
    378,436
    
    
    
    1,385,520INCOME TAX BENEFIT
    
    
    159,458
    
    
    
    266,577LOSS FROM CONTINUING OPERATIONS
    
    
    218,978
    
    
    
    1,118,943INCOME FROM DISCONTINUED OPERATIONS, NET
OF INCOME TAX PROVISION OF $0 AND $100,272
IN 2007 AND 2006, RESPECTIVELY
    
    
    
    
    
    
    321,054NET LOSS
    
    $
    218,978
    
    
    $
    797,889BASIC AND DILUTED INCOME (LOSS) PER SHARE:CONTINUING OPERATIONS
    
    $
    (0.02
    )
    
    $
    (0.09
    )DISCONTINUED OPERATIONS
    
    $
    
    
    
    $
    0.03NET LOSS
    
    $
    (0.02
    )
    
    $
    (0.06
    )WEIGHTED AVERAGE SHARES OUTSTANDING:BASIC
    
    
    13,066,578
    
    
    
    12,805,558DILUTED
    
    
    13,066,578
    
    
    
    12,805,558
  6




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SUNAIR SERVICES CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 FOR THE SIX
    
    
    FOR THE SIXMONTHS ENDED
    
    
    MONTHS ENDEDMARCH 31, 2007
    
    
    MARCH 31, 2006CASH FLOWS FROM OPERATING ACTIVITIES:Net income (loss)
    
    $
    380,713
    
    
    $
    (1,162,432
    )Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating activities:Depreciation
    
    
    470,443
    
    
    
    435,919Amortization
    
    
    1,159,023
    
    
    
    944,946Deferred taxes
    
    
    269,100
    
    
    
    (466,057
    )Bad debt reserve
    
    
    5,747
    
    
    
    303,026Inventories reserve
    
    
    77,962
    
    
    
    29,698Gain on sale of assets
    
    
    (2,380,398
    )
    
    
    Equity based compensation
    
    
    240,808
    
    
    
    123,409Stock based compensation
    
    
    45,000
    
    
    
    (Increase) decrease in Assets:Accounts receivable
    
    
    (1,644,822
    )
    
    
    (164,628
    )Income tax receivable
    
    
    23,842
    
    
    
    1,781Interest receivable
    
    
    (17,990
    )
    
    
    Inventories
    
    
    (351,078
    )
    
    
    120,822Prepaid and other current assets
    
    
    (393,630
    )
    
    
    (599,275
    )Other assets
    
    
    393,372
    
    
    
    (130,839
    )Increase (decrease) in Liabilities:Accounts payable and accrued expenses
    
    
    2,327,681
    
    
    
    175,458Unearned revenue
    
    
    67,321
    
    
    
    234,631Income taxes payable
    
    
    (1,057
    )
    
    
    Customer deposits
    
    
    134,091
    
    
    
    419,995Net Cash Provided By Operating Activities
    
    
    806,128
    
    
    
    266,454CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property, plant, and equipment
    
    
    (202,470
    )
    
    
    (250,177
    )Software development costs
    
    
    (162,018
    )
    
    
    (229,692
    )Cash paid for business acquisitions
    
    
    (1,518,432
    )
    
    
    (11,578,687
    )Net Proceeds from disposition of property
    
    
    2,531,963
    
    
    
    Net Cash Provided By (Used In) Investing Activities
    
    $
    649,043
    
    
    $
    (12,058,556
    )
  7




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SUNAIR SERVICES CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 FOR THE SIX
    
    
    FOR THE SIXMONTHS ENDED
    
    
    MONTHS ENDEDMARCH 31, 2007
    
    
    MARCH 31, 2006CASH FLOWS FROM FINANCING ACTIVITIES:Repayment of line of credit (net)
    
    
    (900,000
    )
    
    
    (1,500,000
    )Repayment of notes payable
    
    
    (34,516
    )
    
    
    (35,384
    )Payment on capital leases
    
    
    (22,191
    )
    
    
    (36,340
    )Proceeds from sale of common stock, net
    
    
    
    
    
    
    13,656,472Net Cash Provided By (Used in) Financing Activities
    
    
    (956,707
    )
    
    
    12,084,748Effect of exchange rate fluctuations on cash
    
    
    99,867
    
    
    
    (37,025
    )NET INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    598,331
    
    
    
    255,621CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    1,601,110
    
    
    
    3,220,699CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    2,199,441
    
    
    $
    3,476,320SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash paid during the period for income taxes
    
    $
    
    
    
    $
    Cash paid during the period for interest
    
    $
    549,113
    
    
    $
    555,389SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES:Common stock issued in acquisition of Archer Exterminators, Inc.
    
    $
    300,000
    
    
    $
    Debt incurred in acquisition of Archer Exterminatiors, Inc.
    
    $
    1,500,000
    
    
    $
    
  8




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SUNAIR
SERVICES CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
For the Six Months Ended March 31, 2007 and March 31, 2006
(UNAUDITED)
 1. Basis of Consolidated Financial Statement Presentation
  2. Significant Accounting Policies
 Use of Estimates
  Accounts Receivable
  Inventories
  Property, Plant, and Equipment
  Buildings and improvements
    
    
    10 to 30 yearsMachinery and equipment
    
    
    4 to 10 yearsAutomobiles
    
    
    4 to 10 years
  9




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##### Table of Contents



Software Costs
  Goodwill and other intangible assets
  Accounting for Impairment or
Disposal of Long-Lived Assets.
  Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of
  Revenue Recognition
  Advertising Costs
  Research and Development
  Foreign Currency Translation
 Telecom FM Ltd.
 10




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##### Table of Contents



Comprehensive Income
  Recent Accounting Pronouncements
      3. Acquisitions
 Acquisition of Spa Creek Services, LLC D/B/A Pest Environmental Services (Spa Creek)
    11




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Goodwill
    
    $
    5,732,933Customer list
    
    
    262,000Accounts Receivable
    
    
    132,929Inventory
    
    
    66,475Fixed assets
    
    
    30,000Customer deposits
    
    
    (279,917
    )Accrued expenses
    
    
    (211,001
    )Total
    
    $
    5,733,419
 Acquisition of Par Pest Control, Inc. D/B/A Paragon Termite & Pest Control (Paragon)
  Acquisition of Pestec Pest Control, Inc. (Pestec)
  Acquisition of Ron Fee, Inc. (Ron Fee)
    Goodwill
    
    $
    3,348,432Customer list
    
    
    1,554,000Accounts receivable
    
    
    235,000Inventory
    
    
    91,000Fixed assets
    
    
    440,000Accounts payable
    
    
    (92,432
    )Customer deposits
    
    
    (22,000
    )Notes payable  autos
    
    
    (29,000
    )Total
    
    $
    5,525,000
  Acquisition of Archer Exterminators, Inc. (Archer)
   Goodwill
    
    $
    2,660,622Customer list
    
    
    1,110,000Accounts receivable
    
    
    33,318Inventory
    
    
    3,500Fixed assets
    
    
    146,127Prepaid Expenses
    
    
    215,178Deferred Revenue
    
    
    (677,539
    )Customer deposits
    
    
    (40,806
    )Total
    
    $
    3,450,400
 12




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Pro-Forma Results of Operations
  Six months ended March 31,2007
    
    
    2006Revenues
    
    $
    34,519,184
    
    
    $
    29,116,011Net income (loss)
    
    
    338,663
    
    
    
    (958,023
    )Income (Loss) per share:Basic
    
    
    .03
    
    
    
    (.09
    )Diluted
    
    
    .03
    
    
    
    (.09
    )
 4. Inventories
 Inventories consist of the following:
 March 31,
    
    
    September 30,2007
    
    
    2006Materials
    
    $
    1,892,000
    
    
    $
    1,430,453Work-in-process
    
    
    213,463
    
    
    
    170,491Finished goods
    
    
    499,359
    
    
    
    727,261$
    2,604,822
    
    
    $
    2,328,205
  5. Income per Common Share
  6. Preferred Stock
  7. Revolving Line of Credit
   13




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8. Notes Payable
      9. Stock Options
    Number of
    
    
    AverageShares
    
    
    Exercise PriceBalances, beginning of period
    
    
    640,054
    
    
    $
    8.23Granted
    
    
    35,000
    
    
    $
    3.32Exercised
    
    
    
    
    
    
    Cancelled
    
    
    (10,000
    )
    
    $
    5.60Balances, end of period
    
    
    665,054
    
    
    $
    8.00
  Options Outstanding
    
    Options ExercisableExercise
    
    
    
    
    
    Weighted Average
    
    Weighted AveragePrice
    
    Number Outstanding
    
    Remaining Life
    
    Exercise Price
    
    Number Exercisable$3.23
    
    
    35,000
    
    
    
    8
    
    
    $
    3.23
    
    
    $4.79
    
    
    60,000
    
    
    
    3
    
    
    $
    4.79
    
    
    
    60,000$5.00
    
    
    166,667
    
    
    
    6
    
    
    $
    5.00
    
    
    
    83,334$5.35
    
    
    20,000
    
    
    
    7.5
    
    
    $
    5.35
    
    
    
    20,000$5.60
    
    
    90,000
    
    
    
    6.5
    
    
    $
    5.60
    
    
    
    56,250$6.09
    
    
    17,500
    
    
    
    7.5
    
    
    $
    6.09
    
    
    
    4,375$13.78
    
    
    94,962
    
    
    
    1
    
    
    $
    13.78
    
    
    
    94,962$11.40
    
    
    180,925
    
    
    
    7
    
    
    $
    11.40
    
    
    
    45,231665,054
    
    
    
    
    
    
    
    
    
    
    
    364,152
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##### Table of Contents



Fair Value
    10. Segment Information
   2007
    
    
    2006Net revenues:Lawn and pest control services
    
    $
    25,990,134
    
    
    $
    20,375,094Telephone communications
    
    
    8,171,176
    
    
    
    3,904,016Total net revenues
    
    $
    34,161,310
    
    
    $
    24,279,110Operating income (loss):Lawn and pest control services
    
    $
    2,555,707
    
    
    $
    1,523,151Telephone communications
    
    
    (78,407
    )
    
    
    (539,789
    )Unallocated Company expenses
    
    
    (3,439,675
    )
    
    
    (2,698,092
    )Total operating loss
    
    $
    (962,375
    )
    
    $
    (1,704,255
    )
 11. Discontinued Operations
   15




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2007
    
    
    2006Total net revenue
    
    $
    0
    
    
    $
    3,372,202Pre-tax income (loss) from discontinued operations
    
    $
    (186,266
    )
    
    $
    736,716Gain on sale of property
    
    
    2,369,168Income tax effect
    
    
    (821,426
    )
    
    
    (221,015
    )Income on discontinued operations
    
    $
    1,361,476
    
    
    $
    515,701
 
 Item 2. Managements Discussion And Analysis of Financial Condition and Results of Operations
 Cautionary Statement Regarding Forward Looking Information:
  General:
  The Lawn and Pest Control Services Segment:
     16




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Telephone Communications Segment:
   Liquidity:
     17




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##### Table of Contents



Capital Resources:
    Results of Operations:
         Discontinued Operations:
  18




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##### Table of Contents



Net Income (Loss):
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
 Item 4. Controls and Procedures
     19




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PART II
OTHER INFORMATION
 
 Item 1. Legal Proceedings
   
 Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  Director
    
    Affirmative Votes
    
    
    Withheld VotesJoseph Burke
    
    
    8,997,375
    
    
    
    3,024,333Joseph S. DiMartino
    
    
    8,948,275
    
    
    
    3,073,433Mario B. Ferrari
    
    
    8,936,375
    
    
    
    3,085,333Arnold Heggestad, Ph.D.
    
    
    8,997,375
    
    
    
    3,024,333Steven P. Oppenheim
    
    
    8,997,375
    
    
    
    3,024,333Richard C. Rochon
    
    
    8,936,375
    
    
    
    3,085,333Charles P. Steinmetz
    
    
    8,997,375
    
    
    
    3,024,333
 
 Item 5. Other Information
  
 Item 6. Exhibits
 10.22
    
    First Amendment to Credit Agreement, dated May 14, 2007, by and among Sunair Services
Corporation, its domestic subsidiaries from time to time parties thereto, the lenders parties
thereto, and Wachovia Bank, National Association, as administrative agent for the lenders.31.1
    
    Certification by Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification by Interim Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 200232.1
    
    Certification by Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    Certification by Interim Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
 20




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##### Table of Contents



SIGNATURES
  SUNAIR SERVICES CORPORATIONDate: May 15, 2007
    /s/ JOHN J. HAYESJohn J. HayesPresident and Chief Executive Officer Date: May 15, 2007
    /s/ EDWARD M. CARRIERO, JR.Edward M. Carriero, Jr.Interim Chief Financial Officer 21