##### 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 1934
 For the quarterly period ended June 25, 2006
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13  OR 15(d)  OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition from  to
 Commission file number 001-13222
 STATER BROS. HOLDINGS INC.
  Delaware
    
    33-0350671(State or other jurisdiction of incorporation or
    
    (I.R.S. Employer Identification No.)organization)21700 Barton RoadColton, California
    
    92324(Address of principal executive offices)
    
    (Zip Code)
 (909) 783-5000
 (Former name, former address and former fiscal year, if changed since last report.)
 þ o
  o o þ
 o þ




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##### 



STATER BROS. HOLDINGS INC.  June 25, 2006
 INDEX
 PagePART I
    
    FINANCIAL INFORMATIONItem 1.
    
    Financial StatementsConsolidated Balance Sheets as of September 25, 2005 and
June 25, 2006 (Unaudited)
    
    
    3Consolidated Statements of Income (Unaudited) for the 13 weeks ended
June 26, 2005 and June 25, 2006
    
    
    5Consolidated Statements of Income (Unaudited) for the 39 weeks ended
June 26, 2005 and June 25, 2006
    
    
    6Consolidated Statements of Cash Flows (Unaudited) for the 39 weeks
ended June 26, 2005 and June 25, 2006
    
    
    7Consolidated Statements of Stockholders Deficit as of September 25, 2005
and June 25, 2006 (Unaudited)
    
    
    8Notes to Consolidated Financial Statements (Unaudited)
    
    
    9Item 2.
    
    Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    13Item 3.
    
    Quantitative and Qualitative Disclosure about Market Risk
    
    
    24Item 4.
    
    Controls and Procedures
    
    
    24PART II
    
    OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    25Item 1A.
    
    Risk Factors
    
    
    25Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    26Item 3.
    
    Defaults Upon Senior Securities
    
    
    26Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    26Item 5.
    
    Other Information
    
    
    26Item 6.
    
    Exhibits
    
    
    26SIGNATURES
    
    
    27EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1
  2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. FINANCIAL STATEMENTS
 STATER BROS. HOLDINGS INC.
 
 CONSOLIDATED BALANCE SHEETS
  ASSETS
 Sept. 25,
    
    
    June 25,2005
    
    
    2006(Unaudited)Current assetsCash and cash equivalents
    
    $
    263,397
    
    
    $
    194,472Restricted cash
    
    
    29,000
    
    
    
    24,121Receivables
    
    
    42,556
    
    
    
    41,433Income tax receivables
    
    
    2,450
    
    
    
    5,072Inventories
    
    
    185,302
    
    
    
    203,559Prepaid expenses
    
    
    8,663
    
    
    
    8,923Deferred income taxes
    
    
    22,459
    
    
    
    21,638Total current assets
    
    
    553,827
    
    
    
    499,218Property and equipmentLand
    
    
    89,518
    
    
    
    104,251Buildings and improvements
    
    
    297,228
    
    
    
    333,296Store fixtures and equipment
    
    
    376,239
    
    
    
    394,855Property subject to capital leases
    
    
    25,903
    
    
    
    25,836788,888
    
    
    
    858,238Less accumulated depreciation and amortization
    
    
    320,951
    
    
    
    351,812467,937
    
    
    
    506,426Deferred debt issuance costs, net
    
    
    19,011
    
    
    
    16,727Goodwill
    
    
    2,894
    
    
    
    2,894Deferred income taxes, long-term
    
    
    5,302
    
    
    
    8,817Other assets
    
    
    6,398
    
    
    
    6,30133,605
    
    
    
    34,739Total assets
    
    $
    1,055,369
    
    
    $
    1,040,383
  3




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##### Table of Contents



STATER BROS. HOLDINGS INC.
CONSOLIDATED BALANCE SHEETS (contd.)
 LIABILITIES AND STOCKHOLDERS DEFICIT
 Sept. 25,
    
    
    June 25,2005
    
    
    2006(Unaudited)Current liabilitiesAccounts payable
    
    $
    144,298
    
    
    $
    156,004Accrued payroll and related expenses
    
    
    59,951
    
    
    
    52,773Other accrued liabilities
    
    
    69,249
    
    
    
    47,928Current portion of capital lease obligations
    
    
    1,190
    
    
    
    1,136Total current liabilities
    
    
    274,688
    
    
    
    257,841Long-term debt
    
    
    700,000
    
    
    
    700,000Capital lease obligations, less current portion
    
    
    8,292
    
    
    
    7,524Long-term portion of self-insurance reserves
    
    
    37,427
    
    
    
    37,703Long-term deferred benefits
    
    
    44,312
    
    
    
    50,619Other long-term liabilities
    
    
    4,045
    
    
    
    3,591Total liabilities
    
    
    1,068,764
    
    
    
    1,057,278Commitments and ContingenciesStockholders deficitCommon Stock, $.01 par value:Authorized shares - 100,000Issued and outstanding shares - 0
    
    
    
    
    
    
    Class A Common Stock, $.01 par value:Authorized shares - 100,000Issued and outstanding shares - 38,301 in 2005; 36,895 in 2006
    
    
    
    
    
    
    Additional paid-in capital
    
    
    9,740
    
    
    
    9,382Retained deficit
    
    
    (23,135
    )
    
    
    (26,277
    )Total stockholders deficit
    
    
    (13,395
    )
    
    
    (16,895
    )Total liabilities and stockholders deficit
    
    $
    1,055,369
    
    
    $
    1,040,383
  4




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##### Table of Contents



STATER BROS. HOLDINGS INC.
 
 CONSOLIDATED STATEMENTS OF INCOME
   13 Weeks EndedJune 26,
    
    
    June 25,2005
    
    
    2006Sales
    
    $
    840,430
    
    
    $
    885,948Cost of goods sold
    
    
    608,835
    
    
    
    656,248Gross profit
    
    
    231,595
    
    
    
    229,700Operating expensesSelling, general and administrative expenses
    
    
    196,380
    
    
    
    193,451Depreciation and amortization
    
    
    10,090
    
    
    
    11,898Total operating expenses
    
    
    206,470
    
    
    
    205,349Operating profit
    
    
    25,125
    
    
    
    24,351Interest income
    
    
    1,864
    
    
    
    2,627Interest expense
    
    
    (14,530
    )
    
    
    (14,731
    )Other expenses, net
    
    
    (282
    )
    
    
    (702
    )Income before income taxes
    
    
    12,177
    
    
    
    11,545Income taxes
    
    
    4,901
    
    
    
    5,803Net income
    
    $
    7,276
    
    
    $
    5,742Earnings per share
    
    $
    189.97
    
    
    $
    155.63Average common shares outstanding
    
    
    38,301
    
    
    
    36,895Shares outstanding at end of period
    
    
    38,301
    
    
    
    36,895
  5




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##### Table of Contents



STATER BROS. HOLDINGS INC.
 
 CONSOLIDATED STATEMENTS OF INCOME
   39 Weeks EndedJune 26,
    
    
    June 25,2005
    
    
    2006Sales
    
    $
    2,522,347
    
    
    $
    2,616,502Cost of goods sold
    
    
    1,855,501
    
    
    
    1,927,575Gross profit
    
    
    666,846
    
    
    
    688,927Operating expensesSelling, general and administrative expenses
    
    
    574,876
    
    
    
    590,227Depreciation and amortization
    
    
    29,187
    
    
    
    33,315Total operating expenses
    
    
    604,063
    
    
    
    623,542Operating profit
    
    
    62,783
    
    
    
    65,385Interest income
    
    
    4,525
    
    
    
    7,515Interest expense
    
    
    (43,204
    )
    
    
    (44,271
    )Other expenses, net
    
    
    (581
    )
    
    
    (1,395
    )Income before income taxes
    
    
    23,523
    
    
    
    27,234Income taxes
    
    
    9,384
    
    
    
    11,984Net income
    
    $
    14,139
    
    
    $
    15,250Earnings per share
    
    $
    369.15
    
    
    $
    406.14Average common shares outstanding
    
    
    38,301
    
    
    
    37,549Shares outstanding at end of period
    
    
    38,301
    
    
    
    36,895
  6




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##### Table of Contents



STATER BROS. HOLDINGS INC.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
   39 Weeks EndedJune 26,
    
    
    June 25,2005
    
    
    2006Operating activities:Net income
    
    $
    14,139
    
    
    $
    15,250Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation and amortization
    
    
    38,373
    
    
    
    42,141Deferred income taxes
    
    
    (5,504
    )
    
    
    (2,694
    )Loss on disposals of assets
    
    
    719
    
    
    
    1,770Changes in operating assets and liabilities:(Increase) decrease in restricted cash
    
    
    (9,000
    )
    
    
    4,879Decrease in receivables
    
    
    2,384
    
    
    
    1,123Increase in income tax receivables
    
    
    (141
    )
    
    
    (2,622
    )Increase in inventories
    
    
    (2,955
    )
    
    
    (18,257
    )(Increase) decrease in prepaid expenses
    
    
    219
    
    
    
    (260
    )Decrease in other assets
    
    
    2,057
    
    
    
    2,352Increase (decrease) in accounts payable
    
    
    (5,238
    )
    
    
    11,706Decrease in other accrued liabilities
    
    
    (4,845
    )
    
    
    (28,223
    )Increase in long-term reserves and liabilities
    
    
    4,539
    
    
    
    5,853Net cash provided by operating activities
    
    
    34,747
    
    
    
    33,018Investing activities:Purchase of property and equipment
    
    
    (82,270
    )
    
    
    (83,026
    )Proceeds from sale of property and equipment
    
    
    37
    
    
    
    648Net cash used in investing activities
    
    
    (82,233
    )
    
    
    (82,378
    )Financing activities:Principal payments on capital lease obligations
    
    
    (960
    )
    
    
    (815
    )Stock redemption
    
    
    
    
    
    
    (18,750
    )Net cash used in financing activities
    
    
    (960
    )
    
    
    (19,565
    )Net decrease in cash and cash equivalents
    
    
    (48,446
    )
    
    
    (68,925
    )Cash and cash equivalents at beginning of period
    
    
    301,947
    
    
    
    263,397Cash and cash equivalents at end of period
    
    $
    253,501
    
    
    $
    194,472Interest paid
    
    $
    51,550
    
    
    $
    54,269Income taxes paid
    
    $
    15,165
    
    
    $
    17,300
  7




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##### Table of Contents



STATER BROS. HOLDINGS INC.
 
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS DEFICIT
   Class A
    
    
    AdditionalCommon
    
    
    Common
    
    
    Paid-in
    
    
    RetainedStock
    
    
    Stock
    
    
    Capital
    
    
    Deficit
    
    
    TotalBalances at September 25, 2005
    
    $
    
    
    
    $
    
    
    
    $
    9,740
    
    
    $
    (23,135
    )
    
    $
    (13,395
    )Net income for 39 weeks
ended June 25, 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,250
    
    
    
    15,250Stock redemption
    
    
    
    
    
    
    
    
    
    
    (358
    )
    
    
    (18,392
    )
    
    
    (18,750
    )Balances at June 25, 2006
    
    $
    
    
    
    $
    
    
    
    $
    9,382
    
    
    $
    (26,277
    )
    
    $
    (16,895
    )
  8




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##### Table of Contents



STATER BROS. HOLDINGS INC.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  JUNE 25, 2006
 Note 1  Basis of Presentation
    Note 2
 Recent Accounting Pronouncements
   Note 3  Use of Estimates
  9




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##### Table of Contents



STATER BROS. HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   JUNE 25, 2006
 Note 4
 Restricted Cash
  Note 5  Retirement Plans
   13 Weeks Ended
    
    
    39 Weeks EndedJune 26,
    
    
    June 25,
    
    
    June 26,
    
    
    June 25,2005
    
    
    2006
    
    
    2005
    
    
    2006(in thousands)
    
    
    (in thousands)Service cost  benefits earned during
the period
    
    $
    603
    
    
    $
    715
    
    
    $
    1,810
    
    
    $
    2,147Interest cost on projected benefit
obligation
    
    
    695
    
    
    
    738
    
    
    
    2,086
    
    
    
    2,215Actual return on assets
    
    
    (388
    )
    
    
    (425
    )
    
    
    (1,167
    )
    
    
    (1,275
    )Recognized gains or losses
    
    
    192
    
    
    
    262
    
    
    
    576
    
    
    
    785Prior service cost recognized
    
    
    (1
    )
    
    
    (1
    )
    
    
    (2
    )
    
    
    (2
    )Net periodic pension cost
    
    $
    1,101
    
    
    $
    1,289
    
    
    $
    3,303
    
    
    $
    3,870Assumptions used for accounting were:Discount rate
    
    
    6.00
    %
    
    
    5.50
    %
    
    
    6.00
    %
    
    
    5.50
    %Rate of increase in compensation levels
    
    
    4.00
    %
    
    
    3.00
    %
    
    
    4.00
    %
    
    
    3.00
    %Expected long-term rate of return on
assets
    
    
    5.00
    %
    
    
    5.00
    %
    
    
    5.00
    %
    
    
    5.00
    %
 10




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##### Table of Contents



STATER BROS. HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   JUNE 25, 2006
 Note 6
 Subsidiary Guarantee
   Note 7
 Stock Redemption
   Note 8
 Phantom Stock Plan
  11




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##### Table of Contents



STATER BROS. HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   JUNE 25, 2006
 Note 9
 Corporate Office and Distribution Facilities
   12




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 PART I  FINANCIAL INFORMATION (contd.)
 
 Item 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 CRITICAL ACCOUNTING POLICIES
  Self-Insurance Reserves
  Goodwill
  13




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 CRITICAL ACCOUNTING POLICIES (contd.)
 Advertising Allowances
   Employee Benefit Plans
    14




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Significant Accounting Policies
  OWNERSHIP OF THE COMPANY
  RESULTS OF OPERATIONS
  Thirteen Weeks
    
    Thirty-nine Weeks2005
    
    2006
    
    2005
    
    2006Sales
    
    
    100.00
    %
    
    
    100.00
    %
    
    
    100.00
    %
    
    
    100.00
    %Gross profit
    
    
    27.56
    
    
    
    25.93
    
    
    
    26.44
    
    
    
    26.33Operating expensesSelling, general and
administrative expenses
    
    
    23.37
    
    
    
    21.84
    
    
    
    22.79
    
    
    
    22.56Depreciation and amortization
    
    
    1.20
    
    
    
    1.34
    
    
    
    1.16
    
    
    
    1.27Operating profit
    
    
    2.99
    
    
    
    2.75
    
    
    
    2.49
    
    
    
    2.50Interest income
    
    
    0.22
    
    
    
    0.30
    
    
    
    0.18
    
    
    
    0.29Interest expense
    
    
    (1.73
    )
    
    
    (1.66
    )
    
    
    (1.71
    )
    
    
    (1.69
    )Other expenses, net
    
    
    (0.03
    )
    
    
    (0.09
    )
    
    
    (0.03
    )
    
    
    (0.06
    )Income before income taxes
    
    
    1.45
    %
    
    
    1.30
    %
    
    
    0.93
    %
    
    
    1.04
    %
 15




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 RESULTS OF OPERATIONS (contd.)
      16




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 RESULTS OF OPERATIONS (contd.)
       17




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 RESULTS OF OPERATIONS (contd.)
      LIQUIDITY AND CAPITAL RESOURCES
    18




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 LIQUIDITY AND CAPITAL RESOURCES (contd.)
 Tabular Disclosure of Contractual Cash Obligations and Other Commitments
  Contractual Cash Obligations(in thousands)Less than
    
    
    
    
    
    
    
    
    
    
    AfterTotal
    
    
    1 Year
    
    
    1-3 Years
    
    
    4-5 Years
    
    
    5 Years8.125% Senior Notes due June 2012Principal
    
    $
    525,000
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    525,000Interest
    
    
    255,937
    
    
    
    42,656
    
    
    
    85,313
    
    
    
    85,313
    
    
    
    42,655780,937
    
    
    
    42,656
    
    
    
    85,313
    
    
    
    85,313
    
    
    
    567,655Floating Rate Senior Notes due June 2010(1)Principal
    
    
    175,000
    
    
    
    
    
    
    
    
    
    
    
    175,000
    
    
    
    Interest
    
    
    62,707
    
    
    
    15,666
    
    
    
    31,375
    
    
    
    15,666
    
    
    
    237,707
    
    
    
    15,666
    
    
    
    31,375
    
    
    
    190,666
    
    
    
    Capital lease obligations(2)Principal
    
    
    8,660
    
    
    
    1,136
    
    
    
    2,094
    
    
    
    2,810
    
    
    
    2,620Interest
    
    
    5,380
    
    
    
    1,281
    
    
    
    2,130
    
    
    
    1,403
    
    
    
    56614,040
    
    
    
    2,417
    
    
    
    4,224
    
    
    
    4,213
    
    
    
    3,186Operating leases(2)
    
    
    259,645
    
    
    
    36,083
    
    
    
    54,130
    
    
    
    36,562
    
    
    
    132,870Total contractual cash obligations
    
    $
    1,292,329
    
    
    $
    96,822
    
    
    $
    175,042
    
    
    $
    316,754
    
    
    $
    703,711Other Commercial Commitments(in thousands)Less than
    
    
    
    
    
    
    
    
    
    
    AfterTotal
    
    
    1 Year
    
    
    1-3 Years
    
    
    4-5 Years
    
    
    5 YearsStandby letters of credit(3)
    
    $
    57,840
    
    
    $
    57,840
    
    
    $
    
    
    
    $
    
    
    
    $
    Total other commercial commitments
    
    $
    57,840
    
    
    $
    57,840
    
    
    $
    
    
    
    $
    
    
    
    $
    
 
 (1)
    
    Interest on the Floating Rate Notes is based on the Three-month
LIBOR plus 3.50% and is set quarterly based on the Three-month LIBOR rate for the second
London Banking Day preceding each interest period. The floating interest rate at June 25,
2006 was 8.83%. Notes continued on next page
 19




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 LIQUIDITY AND CAPITAL RESOURCES (contd.)
 Tabular Disclosure of Contractual Cash Obligations and Other Commitments (contd.)
 
 (2)
    
    The Company leases the majority of its retail stores, offices,
warehouses and distribution facilities. Certain leases provide for additional rents based on
sales. Primary lease terms range from 3 to 55 years and substantially all leases provide for
renewal options.(3)
    
    The letter of credit facility is maintained pursuant to the
Companys workers compensation and general liability self-insurance requirements and to
secure the Companys commitment for infrastructure improvements at the Companys new
distribution facility currently under construction. Outstanding letters of credit expire
between September 2006 and February 2007.  th
    20




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 LIQUIDITY AND CAPITAL RESOURCES (contd.)
 The Credit Facilities
      21




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 LIQUIDITY AND CAPITAL RESOURCES (contd.)
 The Credit Facilities (contd.)
       Labor Relations
  22




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 RECENT ACCOUNTING PRONOUNCEMENTS
   CAUTIONARY STATEMENT FOR PURPOSES OF SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995.
  23




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##### Table of Contents



STATER BROS. HOLDINGS INC.  JUNE 25, 2006
 PART I  FINANCIAL INFORMATION (contd.)
 
 Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
  
 Item 4. CONTROLS AND PROCEDURES
  24




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##### Table of Contents



STATER BROS. HOLDINGS INC.  JUNE 25, 2006
 
 PART II  OTHER INFORMATION
 
 Item 1. LEGAL PROCEEDINGS
   
 Item 1A. RISK FACTORS
    25




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##### Table of Contents



STATER BROS. HOLDINGS INC.  JUNE 25, 2006
 PART II  OTHER INFORMATION (contd.)
 
 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
  
 Item 5. OTHER INFORMATION
  
 Item 6. EXHIBITS
  31.1
    
    Certification of Principal Executive Officer pursuant to Section 302
(a) of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Principal Financial Officer pursuant to Section 302
(a) of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification of Principal Executive Officer and Principal Financial
Officer pursuant to18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
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##### Table of Contents



STATER BROS. HOLDINGS INC.
 
   Date:  August 9, 2006
    /s/ Jack H. BrownJack H. BrownChairman of the Board, President,
and Chief Executive Officer
(Principal Executive Officer)Date:  August 9, 2006
    /s/ Phillip J. SmithPhillip J. SmithExecutive Vice President
and Chief Financial Officer
(Principal Financial Officer) 27