UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
(Mark one)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2002
------------------
Or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________ to ___________________
Commission File Number 0-19824
Nutrition Management Services Company
-------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 23-2095332
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Box 725, Kimberton Road, Kimberton, PA 19442
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (610) 935-2050
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N/A
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Former name, former address and former fiscal year, if change since last report.
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such report), and (2) has been subject to such filing
requirements for the past 90 days Yes [X] No [ ].
2,747,000 Shares of Registrant's Class A Common Stock, with no par value, and
100,000 shares of Registrant's Class B Common Stock, with no par value, are
outstanding as of November 8, 2002.
TABLE OF CONTENTS
Part I. Financial Information Page No.
--------------------- --------
Consolidated Balance Sheets as of
September 30, 2002 (unaudited) and June 30, 2002 2 - 3
Consolidated Statements of Operations for the Three
Months Ended September 30, 2002 (unaudited) and
2001 (unaudited) 4
Consolidated Statements of Cash Flows for the Three
Months Ended September 30, 2002 (unaudited) and
2001 (unaudited) 5
Notes to Consolidated Financial Statements 6 - 8
Management's Discussion and Analysis of Financial Condition
and Results of Operations 9 - 12
Item 4 - Controls and Procedures 12
Part II. Other Information 13
Signatures 14
-1-
NUTRITION MANAGEMENT SERVICES COMPANY
CONSOLIDATED BALANCE SHEETS
ASSETS
September 30, June 30,
2002 2002
----------- -----------
(unaudited)
Current assets:
Cash and cash equivalents $ 605,669 $ 593,310
Accounts receivable, net of allowance for doubtful
accounts of $1,959,743 and 1,774,753 respectively 4,916,509 5,659,990
Accrued Income 83,826 46,505
Deferred income taxes 882,487 882,487
Inventory 230,267 230,238
Prepaid and other 366,805 289,079
----------- -----------
Total current assets 7,085,563 7,701,609
----------- -----------
Property and equipment, net 8,545,993 8,683,712
----------- -----------
Other assets:
Investment in contracts 80,000 120,000
Advances to employees 444,687 523,490
Deferred income taxes 103,089 103,089
Bond issue costs 206,355 210,096
Deferred costs and other assets 10,020 10,020
----------- -----------
Total other assets 844,151 966,695
----------- -----------
$16,475,707 $17,352,016
=========== ===========
See Notes to Unaudited Consolidated Financial Statements
-2-
NUTRITION MANAGEMENT SERVICES COMPANY
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
September 30, June 30,
2002 2002
------------ ------------
(unaudited)
Current liabilities:
Current portion of long-term debt $ 191,814 $ 191,814
Accounts payable 4,162,438 3,811,110
Accrued expenses 320,396 443,483
Accrued payroll and related expenses 243,023 260,861
Other 62,827 71,192
------------ ------------
Total current liabilities 4,980,498 4,778,460
------------ ------------
Long-Term liabilities:
Long-term debt, net of current portion 5,370,596 5,543,852
Long-term payable -0- 730,146
------------ ------------
Total long-term liabilities 5,370,596 6,273,998
------------ ------------
Stockholders' equity:
Undesignated preferred stock - no par, 2,000,000 shares authorized, none
issued or outstanding -- --
Common stock:
Class A - no par, 10,000,000 shares authorized; 3,000,000 issued
2,747,000 and 2,747,000 outstanding, respectively 3,801,926 3,801,926
Class B - no par, 100,000 shares authorized, issued and outstanding 48 48
Retained earnings 2,822,202 2,997,147
------------ ------------
6,624,176 6,799,121
Less: treasury stock (Class A common: 253,000 and 253,000
shares, respectively) - at cost (499,563) (499,563)
------------ ------------
Total stockholders' equity 6,124,613 6,299,558
------------ ------------
$ 16,475,707 $ 17,352,016
============ ============
See Notes to Unaudited Consolidated Financial Statements
-3-
NUTRITION MANAGEMENT SERVICES COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended
September 30,
2002 2001
----------- -----------
Food Service Revenue $ 7,256,400 $ 7,422,218
Cost of Operations
Payroll and related expenses 2,823,654 2,394,289
Other costs of operations 3,120,326 3,433,335
----------- -----------
Cost of operations 5,943,980 5,827,624
----------- -----------
Gross Profit 1,312,420 1,594,594
----------- -----------
Expenses
General and administrative expenses 1,023,523 1,214,849
Depreciation and amortization 212,853 210,448
Provision for doubtful accounts 185,000 225,000
----------- -----------
Expenses 1,421,376 1,650,297
----------- -----------
Income/(Loss) from operations (108,956) (55,703)
----------- -----------
Other income (expense)
Other (13,767) (23,323)
Interest income 1,842 3,143
Interest expense (54,064) (99,252)
----------- -----------
Other income (expense) - net (65,989) (119,432)
----------- -----------
Loss before income taxes (174,945) (175,135)
Provision for income taxes -- --
----------- -----------
Net loss ($ 174,945) ($ 175,135)
=========== ===========
Net loss per share - basic and diluted ($ 0.06) ($ 0.06)
=========== ===========
Weighted average number of shares 2,847,000 2,847,000
=========== ===========
See Notes to Unaudited Consolidated Financial Statements
-4-
NUTRITION MANAGEMENT SERVICES COMPANY
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Three Months -Ended
September 30,
2002 2001
---- ----
Operating activities:
Net loss ($174,945) ($175,135)
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities:
Depreciation and amortization 212,853 210,448
Provision for bad debts 185,000 225,000
Amortization of bond costs 3,641 3,641
Changes in assets and liabilities:
Accounts receivable 558,481 (461,237)
Accrued Income (37,321) 112,157
Inventory and other (29) 35,701
Accounts payable (294,572) (382,625)
Accrued expenses (97,005) 41,048
Accrued payroll and related expenses (17,838) 23,220
Accrued professional (26,083) 13,179
Accrued incomes taxes (7,501) 3,113
Other (78,487) 33,236
--------- ---------
Net cash provided by (used in) operating activities 226,194 (318,254)
--------- ---------
Investing activities:
Repayment/(Advances) to employees 78,802 (155,776)
Purchase of property and equipment (35,134) (81,236)
--------- ---------
Net cash provided by (used in) investing activities 43,668 (237,012)
--------- ---------
Financing activities:
Repayments of long-term borrowing (758,256) (140,206)
Repayments of long-term payable (84,247) (84,247)
Proceeds from long-term borrowing 585,000 766,000
--------- ---------
Net cash (used in) provided by financing activities (257,503) 541,547
--------- ---------
Net increase/(decrease) in cash 12,359 (13,719)
--------- ---------
Cash and cash equivalents - beginning of period 593,310 451,875
Cash and cash equivalents - end of period $ 605,669 $ 438,156
========= =========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 53,907 $ 100,485
Income taxes $ 9,300 $ 0
See Notes to Unaudited Consolidated Financial Statements
-5-
NUTRITION MANAGEMENT SERVICES COMPANY
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2002
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements were
prepared in accordance with generally accepted accounting principles
for interim financial information for quarterly reports on Form 10-Q
and, therefore, do not include all of the information and footnotes
required by generally accepted accounting principles for complete
financial statements. However, all adjustments that, in the opinion of
management are necessary for fair presentation of the financial
statements, have been included. The results of operations for the
interim periods presented are not necessarily indicative of the results
that may be expected for the entire fiscal year ending June 30, 2003.
The financial information presented should be read in conjunction with
the Company's financial statements that were filed under Form 10-K.
2. NEW ACCOUNTING PRONOUNCEMENTS
In August 2001, the FASB issued SFAS 143, Accounting for Asset
Retirement Obligations. SFAS 143 applies to all entities, including
rate-regulated entities, that have legal obligations associated with
the retirement of a tangible long-lived asset that result from
acquisition, construction or development and (or) normal operations of
the long-lived asset. The application of this Statement is not limited
to certain specialized industries, such as the extractive or nuclear
industries. A liability for an asset retirement obligation should be
recognized if the obligation meets the definition of a liability and
can be reasonably estimated. The initial recording should be at fair
value. SFAS 143 is effective for financial statements issued for fiscal
years beginning after June 15, 2002, with earlier application
encouraged. The provisions of the Statement are not expected to have a
material impact on the financial condition or results of operations of
the Company.
In August 2001, the FASB issued SFAS 144, Accounting for the Impairment
or Disposal of Long-Lived Assets. SFAS 144 retains the existing
requirements to recognize and measure the impairment of long-lived
assets to be held and used or to be disposed of by sale. However, SFAS
144 makes changes to the scope and certain measurement requirements of
existing accounting guidance. SFAS 144 also changes the requirements
relating to reporting the effects of a disposal or discontinuation of a
segment of a business. SFAS 144 is effective for financial statements
issued for fiscal years beginning after December 15, 2001 and interim
periods within those fiscal years. The adoption of this Statement did
not have a significant impact on the financial condition or results of
operations of the Company.
In April 2002, Statement of Financial Accounting Standards No. 145,
"Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB No.
13, and Technical Corrections" (SFAS No. 145) was issued. This
standard changes the accounting principles governing extraordinary
-6-
NUTRITION MANAGEMENT SERVICES COMPANY
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)
SEPTEMBER 30, 2002
items by, among other things, providing more definitive criteria for
extraordinary items by clarifying and, to some extent, modifying the
existing definition and criteria, specifying disclosure for
extraordinary items and specifying disclosure requirements for other
unusual or infrequently occurring events and transactions that are not
extraordinary items. SFAS 145 is effective for financial statements
issued for fiscal years beginning after June 15, 2002, with early
adoption encouraged. The adoption of this Statement did not have a
significant impact on the financial condition or results of operations
of the Company.
In July 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities" (SFAS 146). SFAS 146
requires companies to recognize costs associated with exit or disposal
activities when they are incurred rather than at the date of a
commitment to an exit or disposal plan. SFAS 146 is effective
prospectively for exit and disposal activities initiated after December
31, 2002. The Company does not anticipate that the adoption of this
Statement will have a significant impact on the financial condition or
results of operations of the Company.
3. EARNINGS PER COMMON SHARE
Earnings per common share amounts are based on the weighted-average
number of shares of common stock outstanding during the three-month
period ending September 30, 2002 and 2001. Stock options and warrants
did not impact earnings per share each period as they were
anti-dilutive.
4. LITIGATION
On February 7, 2001, Nutrition Management Services Company filed suit
against a major client in the Court of Common Pleas of Chester County,
Pennsylvania. This suit has subsequently been removed to United States
District Court for Eastern Pennsylvania. In the lawsuit, Nutrition
Management Services Company claims that the client failed to pay $2.4
million on account of services Nutrition Management Services Company
rendered, and that the client should be required to reimburse Nutrition
Management Services Company for over $400,000 in start up expenses, in
addition to other claims. The client has filed a counterclaim which the
Company is contesting as part of the overall proceedings.
In addition to the litigation described above, the Company is exposed
to asserted and unasserted claims. In the opinion of management, the
resolution of these other matters will not have a material adverse
effect on the Company's financial position, results of operations or
cash flows.
-7-
NUTRITION MANAGEMENT SERVICES COMPANY
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)
SEPTEMBER 30, 2002
5. BUSINESS SEGMENTS
The Company follows the disclosure provisions of SFAS No. 131,
Disclosures about Segments of an Enterprise and Related Information.
This management approach focuses on internal financial information that
is used by management to assess performance and to make operating
decisions. SFAS No. 131 also requires disclosures about products,
services, geographic areas, and major customers. The adoption of SFAS
No. 131 had no effect on the Company's results of operations or
financial position.
The Company's reportable segments are (1) food service management and
(2) training and conference center. The Company reports segment
performance on an after tax basis. Deferred taxes are not allocated to
segments. The management accounting policies and processes utilized in
compiling segment financial information are highly subjective and,
unlike financial accounting, are not based on authoritative guidance
similar to accounting principals generally accepted in the United
States of America. As a result, reported segment results are not
necessarily comparable with similar information reported by other
similar companies.
Food Service Training and
Management Conference Center Total
For the quarter ended Sept. 30, 2002:
Food service revenue $ 7,095,972 $ 160,428 $ 7,256,400
Depreciation and amortization 76,231 136,622 212,853
Income (loss) from operations 244,339 (353,301) (108,962)
Interest income 1,842 0 1,842
Interest expense (31,507) (22,557) (54,064)
Income (loss) before taxes (benefit) 205,422 (380,367) (174,945)
Net income (loss) 205,422 (380,367) (174,945)
Total assets 7,842,903 8,632,804 16,475,707
Capital expenditures 34,470 664 35,134
Food Service Training and
Management Conference Center Total
For the quarter ended Sept. 30, 2001:
Food service revenue $ 7,335,314 $ 86,904 $ 7,422,218
Depreciation and amortization 84,454 125,993 210,448
Income (loss) from operations 265,404 (321,103) (55,702)
Interest income 3,143 0 3,143
Interest expense (45,280) (53,972) (99,252)
Income (loss) before taxes (benefit) 220,599 (395,734) (175,135)
Net income (loss) 220,599 (395,734) (175,135)
Total assets 9,638,925 8,923,305 18,562,229
Capital expenditures 81,236 0 81,236
-8-
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with
the financial statements and notes thereto.
FORWARD LOOKING STATEMENTS
This Form 10-Q contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended and Section 21E of the
Securities Exchange Act of 1934, as amended, that are intended to be covered by
the safe harbors created thereby. Investors are cautioned that all
forward-looking statements involve risks and uncertainty, including without
limitation, the adequacy of the Company's cash from operations, existing
balances and available credit line. Although the Company believes that the
assumptions underlying the forward-looking statements contained herein are
reasonable, any of the assumptions could be inaccurate, and therefore, there can
be no assurance that the forward-looking statements included in this Form 10-Q
will prove to be accurate. Factors that could cause actual results to differ
from the results discussed in the forward-looking statements include, but are
not limited to, the outcome of the Company's litigation discussed under Item 4 -
Litigation. In light of significant uncertainties inherent in the
forward-looking statements included herein, the inclusion of such information
should not be regarded as a representation by the Company or any other person
that the objectives and plans of the Company will be achieved.
CRITICAL ACCOUNTING POLICIES
The discussion and analysis of our financial condition and results of
operations are based upon the Company's consolidated financial statements, which
have been prepared in accordance with accounting principles generally accepted
in the United States of America. The preparation of these financial statements
requires the Company to make estimates and judgments that affect the reported
amount of assets and liabilities, revenues and expenses, and related disclosure
of contingent assets and liabilities at the date of the Company's financial
statements. Actual results may differ from these estimates under different
assumptions or conditions.
Critical accounting policies are defined as those that are reflective of
significant judgments and uncertainties, and potentially result in materially
different results under different assumptions and conditions. The Company
believes that its critical accounting policies include those described below.
ACCOUNTS RECEIVABLE
The Company performs ongoing credit evaluations of its customers and
adjusts credit limits based on payment history and the customer's current credit
worthiness, as determined by a review of their current credit information. The
Company continuously monitors collections and payments from its customers and
maintains a provision for estimated credit losses based on historical experience
and any specific customer collection issues that have been identified. While
such credit losses have historically been within the Company's expectations and
the provisions established, the Company cannot guarantee that it will continue
to experience the same credit loss rates that it has in the past.
-9-
RESULTS OF OPERATIONS
Revenues for the quarter ended September 30, 2002 were $7,256,400, a
decrease of $165,818 or 2.2% compared to revenues of $7,422,218 in the
corresponding quarter last year. This decrease is primarily due to the net
impact of revenues from lost contracts versus revenues from new contracts.
Cost of operations provided for the current quarter was $5,943,980,
compared to $5,827,624 for similar expenses in the same period last year, an
increase of $116,356 or 2.0%. The increase is primarily due to payroll and
related costs for new contracts partially offset by decreases in other operating
costs.
Gross Profit for the current quarter was $1,312,420, compared to $1,594,594
for the same period last year, a decrease of $282,174 or 17.7%. The decrease is
due to both decreased revenues and a change in the nature of client contracts.
General and administrative expenses for the quarter were $1,023,523 or
14.1% of revenue, compared to $1,214,849 or 16.4% of revenue for the same
quarter last year, a decrease of $191,326 or 15.7%. This decrease is
attributable to the Company's continuing cost reduction measures.
Provision for doubtful accounts for the quarter was $185,000 compared to
$225,000 for the corresponding quarter last year. This decrease is due to
increased collections activities, which led to an overall decline in accounts
receivable in the current quarter. As a result of such decline the need for
additional provisions for doubtful accounts was less in the current quarter.
Interest expense for the three-month period totaled $54,064 compared to
$99,252 for the same period last year. The decrease in interest expense is a
result of repayment in borrowings as well as a reduction in interest rates.
For the reasons stated above, net loss after taxes for the quarter ended
September 30, 2002 was ($174,945) compared to ($175,135) for the corresponding
quarter last year. Net loss per share for the current quarter was ($0.06)
compared to net loss per share of ($0.06) for the same quarter last year.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 2002 the Company had working capital of $2,105,064.
Operating Activities. Cash provided by operations for the three months
ended September 30, 2002 was $226,194 compared to $318,254 used in operations
for the three months ended September 30, 2001. The current period's activity is
primarily due to increased collections of accounts receivable. The
aforementioned item is also the primary reason for the improvement versus the
prior year.
-10-
INVESTING ACTIVITIES. Investing activities provided $43,668 in cash in the
current quarter compared to $237,012 in cash consumed in the same period last
year.
FINANCING ACTIVITIES. Current quarter financing activities consumed
$257,503 in cash compared to $541,547 provided in the same period last year. The
change is attributable to $842,503 of debt repayments offset by $585,000 of debt
proceeds. Long-term payables declined by $730,146 versus June 30, 2002 primarily
due to a reclassification to Accounts Payable.
CAPITAL RESOURCES. The Company has certain credit facilities with its bank
including a revolving credit of $4,000,000. At September 30, 2002, the Company
had $1,494,079 available under its revolving credit. The Company issued two
series of Industrial Bonds totaling $3,560,548 in December of 1996. The
outstanding balance on the bonds was $2,940,000 as of September 30, 2002. The
Company is current with all its obligations to its bank and on its bonds and has
met all financial covenants in its loan documents.
Payment Due By Period
------------------------------------------------------------
Less
Contractual Obligations Total than 1 1-3 4-5 After 5
Obligations year years years years
--------------------------------------------------------------------------------------------
Long-Term Debt* 5,578,666 0 3,048,666 315,000 2,215,000
Operating Leases 15,971 0 15,971 0 0
Total Contractual Cash
Obligations 5,594,637 0 3,064,637 315,000 2,215,000
* Long-Term Debt includes a $2,505,922 outstanding balance on revolving line of
credit, leaving $1,494,079 available under the $4,000,000 revolving line of
credit.
Amount of Commitment Expiration
Per Period
------------------------------------------------
Other Commercial Total Amounts Less than 1-3 4-5 Over 5
Commitments Committed 1 year years years years
------------------------------------------------------------------------------------------------
Lines of Credit 4,000,000 0 4,000,000 0 0
Standby Letter of
Credit 3,065,000 0 3,065,000 0 0
Total Commercial
Commitments 7,065,000 0 7,065,000 0 0
-11-
A substantial portion of the Company's revenues are dependent upon the
payment of its fees by customer healthcare facilities, that, in turn, are
dependent upon third-party payers such as state governments, Medicare and
Medicaid. Delays in payment by third-party payers, particularly state and local
governments, may lead to delays in the collection of accounts receivable.
The Company has no material commitments for capital expenditures, including
the Collegeville Inn & Conference Center, and believes that its cash from
operations, existing balances, and available credit facilities are adequate for
the fiscal year June 30, 2003 to satisfy the needs of its operations.
ITEM 4.
CONTROLS AND PROCEDURES
Based on their evaluation, as of a date within 90 days of the filing of
this Form 10-Q, the Company's Chief Executive Officer and Chief Financial
Officer have concluded the Company's disclosure controls and procedures (as
defined in Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934)
are effective. There have been no significant changes in internal controls or in
other factors that could significantly affect these controls subsequent to the
date of their evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
-12-
PART II - OTHER INFORMATION
Item 1. Legal Proceedings None
Item 2. Changes in Securities None
Item 3. Defaults Upon Senior Securities None
Item 4. Submission of Matters to a Vote of Security Holders None
Item 5. Other Information None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 99.1 and Exhibit 99.2 (Certifications under
Section 906 of the Sarbanes-Oxley Act of 2002)
(b) Reports on Form 8-K None
-13-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Nutrition Management Services Company
/s/ Joseph V. Roberts
-------------------------------------
Joseph V. Roberts
Chairman and Chief Executive Officer
/s/ Linda J. Haines
-------------------------------------
Linda J. Haines
(Principal Financial Manager)
Date: November 14, 2002
-14-
NUTRITION MANAGEMENT SERVICES COMPANY
A PENNSYLVANIA CORPORATION
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
Section 302 Certification
I, Joseph Roberts, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Nutrition Management
Services Company, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: November 14, 2002 /s/ Joseph Roberts
--------------------------
Joseph Roberts
Chairman of the Board and
Chief Executive Officer
-15-
NUTRITION MANAGEMENT SERVICES COMPANY
A PENNSYLVANIA CORPORATION
CERTIFICATION OF PRINCIPAL FINANCIAL MANAGER
Section 302 Certification
I, Linda Haines, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Nutrition
Management Services Company, Inc.;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent functions):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Date: November 14, 2002 /s/ Linda Haines
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Linda Haines
Principal Financial Manager
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