UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended March 31, 2003
[ ] TRANSITION REPORT UNDER SECTION 15 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
Commission File Number 0-13981
ELECTRONIC TELE-COMMUNICATIONS, INC.
(Exact name of small business issuer as specified in its charter)
Wisconsin 39-1357760
(State of incorporation) (IRS Employer Identification No.)
1915 MacArthur Road, Waukesha, Wisconsin 53188
(Address of principal executive offices)
(262) 542-5600
(Issuer's telephone number)
As of May 9, 2003, there were outstanding 2,009,149 shares of Class A common
stock and 499,998 shares of Class B common stock. The Class B common stock,
87.9% of which is owned by affiliates, is the only voting stock. The Class B
common stock is not traded on an exchange.
ELECTRONIC TELE-COMMUNICATIONS, INC.
BALANCE SHEETS
MARCH 31, 2003 AND DECEMBER 31, 2002
(UNAUDITED) (Note 1)
MARCH 31 December 31
2003 2002
---- ----
ASSETS
CURRENT ASSETS:
Cash and cash equivalents .................................. $ 73,334 $ 92,023
Trade accounts receivable, net ............................. 245,238 278,353
Inventories (Note 2) ....................................... 1,234,837 1,273,854
Net investment in sales-type leases ........................ 315,399 333,692
Prepaid expenses and other current assets .................. 84,333 82,207
----------- -----------
Total current assets ..................................... 1,953,141 2,060,129
PROPERTY, PLANT AND EQUIPMENT, NET ........................... 241,397 280,269
NET INVESTMENT IN SALES-TYPE LEASES .......................... 226,507 296,513
GOODWILL ..................................................... 790,596 790,596
OTHER ASSETS (Note 4) ........................................ 139,291 130,693
----------- -----------
Total Assets ................................................. $ 3,350,932 $ 3,558,200
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Revolving credit facility (Note 5) ......................... $ 127,005 $ --
Accounts payable ........................................... 196,694 195,931
Accrued expenses ........................................... 427,050 395,993
Income taxes payable ....................................... 67,462 67,137
Deferred revenue and customer deposits ..................... 84,858 76,017
Deferred gain on sale of building .......................... 62,675 62,675
----------- -----------
Total current liabilities ................................ 965,744 797,753
DEFERRED GAIN ON SALE OF BUILDING ............................ 339,026 354,695
----------- -----------
Total liabilities ........................................ 1,304,770 1,152,448
STOCKHOLDERS' EQUITY:
Preferred stock, authorized 5,000,000 shares, none issued .. -- --
Class A common stock, authorized 10,000,000 shares,
par value $.01, issued and outstanding 2,009,149 shares .. 20,091 20,091
Class B common stock, authorized 10,000,000 shares,
par value $.01, issued and outstanding 499,998 shares .... 5,000 5,000
Additional paid-in capital ................................. 3,335,647 3,335,647
Retained earnings (deficit) ................................ (1,314,576) (954,986)
----------- -----------
Total stockholders' equity ............................... 2,046,162 2,405,752
----------- -----------
Total Liabilities and Stockholders' Equity ................... $ 3,350,932 $ 3,558,200
=========== ===========
The accompanying notes are an integral part of these financial statements.
-2-
ELECTRONIC TELE-COMMUNICATIONS, INC.
STATEMENTS OF OPERATIONS
THREE-MONTH PERIODS ENDED MARCH 31, 2003 AND 2002 - (UNAUDITED)
THREE MONTHS ENDED
MARCH 31
--------
2003 2002
---- ----
NET SALES ............................ $ 719,944 $ 1,109,558
COST OF PRODUCTS SOLD ................ 441,351 542,284
----------- -----------
GROSS PROFIT ......................... 278,593 567,274
OPERATING EXPENSES:
General and administrative ......... 182,079 192,930
Marketing and selling .............. 218,214 273,822
Research and development ........... 235,998 234,824
----------- -----------
636,291 701,576
----------- -----------
EARNINGS (LOSS) FROM OPERATIONS ...... (357,698) (134,302)
OTHER INCOME (EXPENSE):
Interest expense ................... (892) (1,130)
----------- -----------
EARNINGS (LOSS) BEFORE INCOME TAXES .. (358,590) (135,432)
Income taxes ....................... 1,000 1,000
----------- -----------
NET EARNINGS (LOSS) .................. $ (359,590) $ (136,432)
=========== ===========
BASIC AND DILUTED EARNINGS
(LOSS) PER SHARE:
Class A common ..................... $ (0.14) $ (0.05)
Class B common ..................... $ (0.14) $ (0.05)
The accompanying notes are an integral part of these financial statements.
-3-
ELECTRONIC TELE-COMMUNICATIONS, INC.
STATEMENTS OF CASH FLOWS
THREE-MONTH PERIODS ENDED MARCH 31, 2003 AND 2002 - (UNAUDITED)
THREE MONTHS ENDED MARCH 31
---------------------------
2003 2002
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss) ......................................... $(359,590) $(136,432)
Adjustments to reconcile net earnings to net cash
provided by (used in) operating activities:
Depreciation and amortization ........................... 53,690 46,342
(Gain) loss from sale of property, plant and equipment .. (21,505) (15,229)
Changes in operating assets and liabilities:
Accounts receivable ................................. 33,115 (240,493)
Inventories ......................................... 39,017 129,646
Net investment in sales-type leases ................. 88,299 104,948
Prepaid expenses and other current assets ........... (2,126) (63,201)
Accounts payable and accrued expenses ............... 31,820 57,795
Income taxes ........................................ 325 584
Deferred revenue and customer deposits .............. 8,841 1,284
--------- ---------
Total adjustments ................................. 231,476 21,676
--------- ---------
Net cash provided by (used in) operating activities ... (128,114) (114,756)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ........................................ (2,929) (4,200)
Proceeds from sale of property, plant and equipment ......... 6,499 --
Capitalized software production costs ....................... (21,150) --
--------- ---------
Net cash provided by (used in) investing activities ... (17,580) (4,200)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
(Payments) borrowings on revolving credit facility, net ..... 127,005 87,005
--------- ---------
Net cash provided by (used in) financing activities ... 127,005 87,005
--------- ---------
Net increase (decrease) in cash and cash equivalents .......... (18,689) (31,951)
Cash and cash equivalents at beginning of year ................ 92,023 64,811
--------- ---------
Cash and cash equivalents at end of period .................... $ 73,334 $ 32,860
========= =========
Supplemental disclosures of cash flow information:
Cash received from income tax refunds ....................... $ -- $ 510
Cash paid for income taxes .................................. 675 --
Cash paid for interest expense .............................. 442 564
The accompanying notes are an integral part of these financial statements.
-4-
ELECTRONIC TELE-COMMUNICATIONS, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2003 - (UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared by the
Company in accordance with accounting principles generally accepted in the
United States of America (GAAP) for interim financial information and with the
instructions to Form 10-QSB and Article 10 of Regulation S-X. Accordingly, they
do not include all of the information and footnotes required by GAAP for
complete financial statements. The information furnished herein reflects all
adjustments and accruals that management believes are necessary to fairly state
the operating results for the respective periods. Operating results for the
three-month period ended March 31, 2003, are not necessarily indicative of the
results that may be expected for the year ended December 31, 2003.
The balance sheet at December 31, 2002, has been derived from the audited
financial statements at that date, but does not include all of the information
and footnotes required by GAAP for complete financial statements.
For further information, refer to the financial statements and footnotes thereto
included in the Company's 2002 Annual Report to Shareholders.
2. INVENTORIES
Inventories consisted of the following:
MARCH 31 December 31
2003 2002
----------- -----------
Raw materials and supplies .......... $ 485,809 $ 461,259
Work-in-process and finished goods .. 661,513 692,862
Maintenance and demo parts .......... 222,506 232,882
Reserve for obsolescence ............ (134,991) (113,149)
----------- -----------
Total inventories ................... $ 1,234,837 $ 1,273,854
=========== ===========
3. NEW ACCOUNTING PRONOUNCEMENT
In January 2003, the Financial Accounting Standards Board (FASB) issued FASB
Interpretation No. (FIN) 46, "Consolidation of Variable Interest Entities." FIN
46 addresses consolidation by business enterprises of variable interest entities
and is intended to achieve more consistent application of consolidation
policies. The Interpretation requires an entity to consolidate a variable
interest entity if that enterprise has a variable interest (or combination of
variable interests) that will absorb a majority of the entity's expected losses
if they occur, receive a majority of the entity's expected residual returns if
they occur, or both. In addition, the Interpretation requires an entity that
holds significant variable interests in a variable interest entity, but is not
the primary beneficiary, to disclose certain information. Currently, management
does not anticipate the adoption of FIN 46 will have a material impact on the
Company's financial statements as it relates to an affiliated entity that leases
real estate and lends funds via revolving credit facility to the Company.
-5-
ELECTRONIC TELE-COMMUNICATIONS, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2003 - (UNAUDITED)
(CONTINUED)
4. OTHER ASSETS
Other assets of $139,291 as of March 31, 2003, consisted entirely of capitalized
software production costs in accordance with SFAS No. 86, "Accounting for
Computer Software to be Sold, Leased, or Otherwise Marketed." These costs are
being amortized on a straight-line basis over the remaining estimated economic
life of the product. As of March 31, 2003, gross capitalized software production
costs of $171,785 were reduced by $32,494 of accumulated amortization.
5. REVOLVING CREDIT FACILITY
On December 23, 2002, the Company renewed a revolving credit facility with
esitec, llc, an entity controlled by affiliates of the Company. The term of the
revolving credit facility ends December 31, 2003, at which time it will renew
automatically in consecutive one-year increments. Either party may terminate the
revolving credit facility upon 45 days written notice. Under the revolving
credit facility, the Company can borrow up to a maximum of $200,000. Interest is
payable monthly at a rate of prime as quoted in the Wall Street Journal, and any
outstanding balances of principal and interest are due at the end of the term of
the agreement. The revolving credit facility is secured by trade accounts
receivable. As of March 31, 2003, the Company had borrowings of $127,005 under
the revolving credit facility. Interest paid for borrowings on the revolving
credit facility during the three-month period ended March 31, 2003 was $892.
-6-
ELECTRONIC TELE-COMMUNICATIONS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Net sales were $719,944 and $1,109,558 for the three-month periods ended March
31, 2003 and 2002, respectively. The decrease in net sales for the three-month
period ended March 31, 2003, was due primarily to lower customer demand for the
Company's interactive voice information systems versus the comparable period in
the prior year and lower revenues from leases and services. Included in net
sales were revenues from sales of the Company's interactive voice information
systems of $120,880 or 17% of net sales, and $267,289 or 24% of net sales, for
the three-month periods ended March 31, 2003 and 2002, respectively. The
Company's customers continue to be severely impacted by slow economic
conditions, especially in the domestic telecommunications industry, which has
adversely impacted their buying decisions. It is not possible to predict the
duration of depressed conditions in these customer industries. Revenues from
operating leases, sales-type leases, and services were $507,011 or 70% of net
sales for the 2003 three-month period, compared to $713,446 or 64% of net sales
for the corresponding 2002 three-month period. The decrease in these sales
dollars was due primarily to lower lease revenue from the Company's time weather
temperature systems and lower revenue from repairs. It is anticipated that lease
revenue will continue to fall, but it is the Company's goal that these revenues
will be replaced by revenue from increased services provided to the sold time
weather temperature systems that replace the leased units. Product pricing for
the Company's equipment remained relatively constant between periods. Inflation
did not have a material impact on revenues.
For the three-month periods ended March 31, 2003 and 2002, the gross profit
percentage was 39% and 51%, respectively. The decrease in the gross profit
percentage in the 2003 three-month period was due to lower sales volume over
which to spread fixed manufacturing costs, partially offset by the effect of the
Company's cost reduction measures, including reductions of manufacturing
personnel and related costs.
For the three-month periods ended March 31, 2003 and 2002, total operating
expenses were $636,291 or 88% of net sales, and $701,576 or 63% of net sales,
respectively. Total operating expenses as a percentage of net sales for both
periods presented were higher than historical percentages due to the
substantially lower sales volumes over which to spread fixed operating expenses.
Overall, total operating expense dollars were lower in the 2003 period due to
cost reduction programs and staff downsizing implemented beginning late in the
first quarter of 2001 and continuing into the third quarter of 2001, followed by
an additional staff downsizing implemented in the first quarter of 2003. The
multiple staff downsizings have reduced the Company's workforce by over 60% and
included all departments within the Company. General and administrative expenses
and sales and marketing expenses were lower in 2003 period due to the staff
downsizing. In addition, lower commissions on lower sales revenue decreased
sales and marketing expenses in the 2003 period. Research and development
expenses were slightly higher in the 2003 period due to accrual of severance
benefits and lower capitalization of software production costs, partially offset
by savings related to staff downsizing.
Net other expenses were $892 for the three-month period ended March 31, 2003,
compared to $1,130 for the corresponding three-month period of 2002 and were
related to interest expense on limited borrowing outstanding during the periods.
-7-
ELECTRONIC TELE-COMMUNICATIONS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)
For the three-month period ended March 31, 2003, net loss was $359,590, compared
to a net loss of $136,432 for the three-month period ended March 31, 2002. The
increase in the loss between periods was due primarily to the lower sales volume
over which to spread fixed costs in the 2003 period, partially offset by the
savings from the cost reduction programs and staff downsizing.
LIQUIDITY AND SOURCES OF CAPITAL
Working capital was $987,397 at March 31, 2003, compared to $1,262,376 as of
December 31, 2002. The decrease in working capital was primarily due to the net
loss. Cash used in operating activities in the 2003 three-month period of
$128,114 was a result of the net loss, partially offset by a decrease in
inventories and collections of sales-type leases and accounts receivable. Cash
used by operating activities in the 2002 three-month period of $114,756 was the
result of the net loss and an increase in accounts receivable, partially offset
by a decrease in inventories and sales-type leases.
For the three-month period ended March 31, 2003, cash provided by borrowings on
a revolving credit facility, a decrease in inventories, and increased
collections on sales-type leases and accounts receivable was used to finance the
net loss. For the three-month period ended March 31, 2002, cash provided by
borrowings was used to finance the net loss.
The Company has sustained substantial operating losses over the past two and a
half years. In addition, the Company has used substantial amounts of working
capital in its operations. The losses and use of working capital were a result
of the significant decrease in sales caused by lower customer demand for the
Company's products. The Company's customers have been severely impacted by
slowing economic conditions, especially in the domestic telecommunications
industry, which adversely impacted customers' buying decisions.
To address the resultant cash flow requirements caused by the decrease in sales,
the Company entered into a sale leaseback transaction in 2001 with an entity
controlled by affiliates of the Company for the building and associated land in
Waukesha, Wisconsin which serves as the Company's principal office and
manufacturing facility. The proceeds from the transaction were used to pay off
remaining amounts outstanding under a revolving credit facility with a bank and
to fund working capital. The revolving credit facility agreement with the bank
was subsequently terminated. In addition, the Company has reduced its workforce
by over 60% beginning in 2001 and continuing into 2003 through a combination of
terminations and lay-offs.
To supplement cash flow in the short-term, the Company entered into an agreement
with an entity controlled by affiliates of the Company for up to $200,000 of
borrowing availability. As of March 31, 2003, the Company had borrowings of
$127,005 on the revolving credit facility. It is the affiliated entity's current
position that $200,000 is the maximum that will be made available. Working
capital was $987,397, and the Company's current ratio was 2.0 at March 31, 2003.
With the workforce reductions from 2001 to 2003 and strict control of all costs,
the Company has significantly reduced the sales levels necessary to turn its
operations profitable. The Company will continue to monitor its operations to
determine if additional cost savings measures need to be implemented to improve
cash flow.
-8-
ELECTRONIC TELE-COMMUNICATIONS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)
Management remains cautiously optimistic that market conditions and demand for
the Company's new products will improve and that the Company's operations will
return to profitability over the next 12 months. If the Company's operations
return to profitability, management believes the Company can generate sufficient
internal cash flow to support its operations. In addition, assuming profitable
operations, management believes the Company will be able to secure additional
financing from a bank to provide additional working capital as needed. However,
there can be no assurance that any or all of these items will be accomplished.
If the Company does not return to profitability, however, it is unlikely that it
will be able to secure such bank financing. In such case, the Company may be
able to further reduce costs to a level which would permit it to operate
profitably by relying on the revenue stream generated by its
time/weather/temperature and services business.
Management believes that the actions it has taken as described above, together
with continuing to control costs and the close monitoring of operations, provide
the opportunity for the Company to continue as a going concern.
CONTRACTUAL OBLIGATIONS
The Company has contractual obligations for operating leases for its facilities
in Waukesha, Wisconsin and Norcross, Georgia. The leases end in 2007 and 2005,
respectively. Future minimum lease payments as of December 31, 2002, for the two
facilities total $1,647,500.
FORWARD LOOKING INFORMATION
From time to time, information provided by the Company, statements made by its
employees, and information included in its filings with the Securities and
Exchange Commission which are not historical facts are forward-looking in nature
and relate to trends and events that may affect the Company's future financial
position and operating results. Such forward-looking information is provided
pursuant to the Safe Harbor provisions of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements are not guarantees of future
performance and involve a number of risks and uncertainties including, but not
limited to, improvement of conditions in the Company's customer markets, the
ability to increase sales and control expenses, the availability of adequate
working capital and credit facilities, the ability to successfully complete
development of and bring to market new products for which there is customer
demand, technology changes, backlog, status of the economy, governmental
regulations, sources of supply, expense structure, product mix, major customers,
competition, litigation, threat of war, and other risk factors detailed in the
Company's filings of Form 10-KSB with the Securities and Exchange Commission.
Investors are encouraged to consider the risks and uncertainties included in
those filings.
-9-
ITEM 3. CONTROLS AND PROCEDURES
Within the 90 days prior to the date of this report, the Company carried out an
evaluation, under the supervision of the Company's Chief Executive Officer and
Chief Financial Officer and with the participation of the Company's management,
of the effectiveness of the design and operation of the Company's disclosure
controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon that
evaluation, the Chief Executive Officer and Chief Financial Officer concluded
that the Company's disclosure controls and procedures are effective to ensure
that the Company is able to collect, process and disclose the information
required to be included in the Company's periodic Securities and Exchange
Commission filings within the required time periods. No significant changes were
made in the Company's internal controls or in other factors that could
significantly affect these controls subsequent to the date of their evaluation.
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the annual meeting of the Registrant on May 2, 2003, shareholders voted on
the election of directors for a one-year term. The Class B common stock of the
Registrant is the only class of voting securities. The Class B common stock is
not registered under the Securities Exchange Act of 1934. There was no
solicitation in opposition to the nominees proposed and there were no
abstentions or broker non-votes. Each of the nominees were elected as follows:
Director Votes Votes
Name For Withheld
---- --- --------
Dean W. Danner ........... 439,527 0
Bonita M. Danner ......... 439,527 0
Hazel Danner ............. 439,527 0
George W. Danner ......... 439,527 0
A. William Huelsman ...... 439,527 0
Joanne B. Huelsman ....... 439,527 0
Peter J. Lettenberger .... 439,527 0
Richard A. Gabriel ....... 439,527 0
R.W. (Johnny) Johns ...... 439,527 0
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 11 Computation of Earnings Per Share
Exhibit 99.1 Certification of Dean W. Danner pursuant to 18
U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 99.2 Certification of Jeffrey M. Nigl pursuant to 18
U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
(b) Reports on Form 8-K
The Company filed a Current Report of Form 8-K dated April 28, 2003,
to furnish a press release dated April 28, 2003 announcing its first
quarter 2003 financial results.
-10-
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ELECTRONIC TELE-COMMUNICATIONS, INC.
/s/ Dean W. Danner
------------------------------------
Dean W. Danner
President and
Chief Executive Officer
/s/ Jeffrey M. Nigl
-----------------------------------
Jeffrey M. Nigl
Vice President, Chief Financial
Officer, Treasurer and
Principal Accounting Officer
Date: May 9, 2003
-11-
CERTIFICATIONS
I, Dean W. Danner, President and Chief Executive Officer of Electronic
Tele-Communications, Inc., certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Electronic
Tele-Communications, 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 or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: May 9, 2003
/s/ Dean W. Danner
- -----------------------------------
Dean W. Danner
President and
Chief Executive Officer
-12-
CERTIFICATIONS
I, Jeffrey M. Nigl, Vice President, Chief Financial Officer, and Treasurer of
Electronic Tele-Communications, Inc., certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Electronic
Tele-Communications, 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 or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: May 9, 2003
/s/ Jeffrey M. Nigl
- ------------------------------------
Jeffrey M. Nigl
Vice President, Chief Financial
Officer, and Treasurer
-13-
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------------------------
11 Computation of Earnings Per Share
99.1 Certification of Dean W. Danner pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
99.2 Certification of Jeffrey M. Nigl pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
-14-