UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] Quarterly report pursuant to Section 13 Or 15(d) of the Securities Exchange
Act of 1934; For the quarterly period ended: March 31, 2003
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File Number: 0-26958
RICK'S CABARET INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Texas 76-0458229
(State or other jurisdiction IRS Employer
of incorporation or organization) Identification No.)
505 North Belt, Suite 630
Houston, Texas 77060
(Address of principal executive offices, including zip code)
(281) 820-1181
(Registrant's telephone number, including area code)
APPLICABLE ONLY TO CORPORATE ISSUERS
On May 8, 2003, there were 3,719,248 shares of common stock, $.01 par value,
outstanding.
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
RICK'S CABARET INTERNATIONAL, INC.
TABLE OF CONTENTS
-----------------
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of March 31, 2003 (unaudited)
and September 30, 2002 (audited). . . . . . . . . . . . . . . . . . 1
Consolidated Statements of Operations for the three months and
six months ended March 31, 2003 and 2002 (unaudited). . . . . . . . 3
Consolidated Statements of Cash Flows for the six months
ended March 31, 2003 and 2002 (unaudited) . . . . . . . . . . . . . 4
Notes to Consolidated Financial Statements. . . . . . . . . . . . . 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . . . . . 6
Item 3. Controls and procedures . . . . . . . . . . . . . . . . . . . . . . 10
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . . . . 11
Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
i
PART I FINANCIAL INFORMATION
Item 1. Financial Statements.
RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
------
3/31/03 9/30/02
(UNAUDITED) (AUDITED)
CURRENT ASSETS
Cash $ 333,505 $ 733,366
Accounts receivable 146,998 226,637
Prepaid expenses 139,056 63,897
Inventories 219,263 210,802
------------ ------------
Total current assets 838,822 1,234,702
------------ ------------
PROPERTY AND EQUIPMENT
Buildings, land and leasehold improvements 9,608,728 9,278,260
Furniture and equipment 1,850,306 1,938,705
------------ ------------
11,459,034 11,216,965
Accumulated depreciation (2,268,768) (2,094,712)
------------ ------------
Total property and equipment, net 9,190,266 9,122,253
------------ ------------
OTHER ASSETS
Goodwill less accumulated amortization 1,883,007 1,883,007
Other 185,639 197,358
------------ ------------
Total other assets 2,068,646 2,080,365
------------ ------------
Total Assets $12,097,734 $12,437,320
============ ============
1
RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
3/31/03 9/30/02
(UNAUDITED) (AUDITED)
CURRENT LIABILITIES
Current portion of long term debt $ 471,079 $ 459,972
Accounts payable - trade 211,773 274,659
Accrued expenses 545,864 533,068
------------ ------------
Total current liabilities 1,228,716 1,267,699
LONG TERM DEBT, LESS CURRENT PORTION
Long-term debt less current portion 3,812,893 4,147,381
------------ ------------
Total Liabilities 5,041,609 5,415,080
------------ ------------
COMMITMENTS AND CONTINGENCIES
MINORITY INTERESTS 136,911 80,164
STOCKHOLDERS' EQUITY
Preferred stock - $.10 par, authorized
1,000,000 shares; none outstanding --- ---
Common stock - $.01 par, authorized
15,000,000 shares; 4,608,678 issued;
3,719,248 and 3,747,648 outstanding 46,087 46,087
Additional paid in capital 11,273,149 11,273,149
Retained earnings (deficit) (3,136,325) (3,202,029)
Treasury stocks, at cost (1,263,697) (1,175,131)
------------ ------------
Total stockholders' equity 6,919,214 6,942,076
------------ ------------
Total liabilities and stockholders' equity $12,097,734 $12,437,320
============ ============
2
RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
FOR THE THREE MONTHS FOR THE SIX MONTHS
ENDED MARCH 31, ENDED MARCH 31,
2003 2002 2003 2002
REVENUES
Sales of alcoholic beverages $1,516,258 $1,658,207 $3,145,065 $3,292,431
Sales of foods 112,197 220,988 345,759 436,575
Service revenues 1,268,024 1,319,776 2,585,816 2,593,095
Internet revenues 265,164 485,125 596,652 1,148,845
Other 393,482 226,086 613,242 493,661
----------- ----------- ----------- -----------
3,555,125 3,910,182 7,286,534 7,964,607
OPERATING EXPENSES
Cost of goods sold 518,765 716,636 1,084,120 1,579,184
Salaries and wages 1,293,060 1,229,429 2,636,529 2,496,956
Other general and administrative
Taxes and permits 515,307 506,016 997,519 1,009,904
Charge card fees 60,730 45,981 121,801 107,264
Rent 61,258 96,100 116,913 148,568
Legal and accounting 200,301 156,395 406,833 307,481
Advertising 199,718 156,332 378,055 332,415
Other 641,938 640,057 1,292,076 1,286,687
----------- ----------- ----------- -----------
3,491,077 3,546,946 7,033,846 7,268,459
----------- ----------- ----------- -----------
INCOME FROM OPERATIONS 64,048 363,236 252,688 696,148
Interest Expense (99,036) (82,549) (196,856) (174,271)
Interest Income 6,017 5,017 9,872 11,049
----------- ----------- ----------- -----------
NET INCOME/(LOSS) $ (28,971) $ 285,704 $ 65,704 $ 532,926
=========== =========== =========== ===========
BASIC NET INCOME (LOSS) PER COMMON SHARE:
NET INCOME/(LOSS) $ (0.01) $ 0.06 $ 0.02 $ 0.12
=========== =========== =========== ===========
WEIGHTED AVERAGE SHARES
OUTSTANDING 3,720,048 4,567,978 3,728,931 4,567,978
=========== =========== =========== ===========
3
RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED MARCH 31, 2003 AND 2002
(UNAUDITED)
2003 2002
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 65,704 $ 532,926
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation 260,865 245,674
Minority interests 56,747 ---
Changes in working capital (54,071) (134,775)
---------- ----------
Cash provided by operating activities 329,245 643,825
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment (328,878) (171,773)
Change in goodwill and other assets 11,719 (139,515)
---------- ----------
Cash used in investing activities (317,159) (311,288)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of treasury stock (88,566) (24,029)
Payments on long term debt (323,381) (49,050)
---------- ----------
Cash used in financing activities (411,947) (73,079)
---------- ----------
NET INCREASE/(DECREASE) IN CASH (399,861) 259,458
CASH AT BEGINNING OF PERIOD 733,366 704,628
---------- ----------
CASH AT END OF PERIOD $ 333,505 $ 964,086
========== ==========
CASH PAID DURING PERIOD FOR:
Interest $ 196,856 $ 174,271
========== ==========
4
RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2003
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America
for interim financial information and with the instructions to Form 10-QSB of
Regulation S-B. They do not include all information and footnotes required by
accounting principles generally accepted in the United States of America for
complete financial statements. However, except as disclosed herein, there has
been no material change in the information disclosed in the notes to the
financial statements for the year ended September 30, 2002 included in the
Company's Annual Report on Form 10-KSB filed with the Securities and Exchange
Commission. The interim unaudited financial statements should be read in
conjunction with those financial statements included in the Form 10-KSB. In the
opinion of Management, all adjustments considered necessary for a fair
presentation, consisting solely of normal recurring adjustments, have been made.
Operating results for the six months ended March 31, 2003 are not necessarily
indicative of the results that may be expected for the year ending September 30,
2003.
2. SEGMENT INFORMATION
In October 1999, the Company launched its web-sites operation. This
segment derives revenues from membership fees, traffic sold, and sale of feeds
to other web-site operators. Below is the financial information on the
Company's segments.
FOR THE THREE MONTHS FOR THE SIX MONTHS
ENDED MARCH 31, ENDED MARCH 31,
2003 2002 2003 2002
REVENUES
Internet Web-sites $ 265,164 $ 485,125 $ 596,652 $1,148,845
Club operation 3,289,961 3,425,057 6,689,882 6,815,762
----------- ----------- ----------- -----------
$3,555,125 $3,910,182 $7,286,534 $7,964,607
=========== =========== =========== ===========
NET INCOME/(LOSS)
Internet Web-sites $ 19,674 $ 119,364 $ 54,430 $ 256,103
Club operation 266,810 551,397 654,653 957,494
Corporate expenses (315,455) (385,057) (643,379) (680,671)
----------- ----------- ----------- -----------
$ (28,971) $ 285,704 $ 65,704 $ 532,926
=========== =========== =========== ===========
5
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The following discussion should be read in conjunction with our audited
consolidated financial statements and related notes thereto included in this
quarterly report.
FORWARD LOOKING STATEMENT AND INFORMATION
The Company is including the following cautionary statement in this Form 10-QSB
to make applicable and take advantage of the safe harbor provision of the
Private Securities Litigation Reform Act of 1995 for any forward-looking
statements made by, or on behalf of, the Company. Forward-looking statements
include statements concerning plans, objectives, goals, strategies, future
events or performance and underlying assumptions and other statements, which are
other than statements of historical facts. Certain statements in this Form
10-QSB are forward-looking statements. Words such as "expects," "believes,"
"anticipates," "may," and "estimates" and similar expressions are intended to
identify forward-looking statements. Such statements are subject to risks and
uncertainties that could cause actual results to differ materially from those
projected. Such risks and uncertainties are set forth below. The Company's
expectations, beliefs and projections are expressed in good faith and are
believed by the Company to have a reasonable basis, including without
limitation, management's examination of historical operating trends, data
contained in the Company's records and other data available from third parties,
but there can be no assurance that management's expectation, beliefs or
projections will result, be achieved, or be accomplished. In addition to other
factors and matters discussed elsewhere herein, the following are important
factors that, in the view of the Company, could cause material adverse affects
on the Company's financial condition and results of operations: the risks and
uncertainties relating to our Internet operations, the impact and implementation
of the sexually oriented business ordinances in the jurisdictions where our
facilities operate, competitive factors, the timing of the openings of other
clubs, the availability of acceptable financing to fund corporate expansion
efforts, and the dependence on key personnel. The Company has no obligation to
update or revise these forward-looking statements to reflect the occurrence of
future events or circumstances.
GENERAL
Our Company presently conducts its business in two different areas of operation:
1. We own and operate upscale adult nightclubs serving primarily businessmen
and professionals that offer live adult entertainment, restaurant and bar
operations. We own and operate seven adult nightclubs under the name
"Rick's Cabaret" and "XTC" in Houston, Austin and San Antonio, Texas, and
Minneapolis, Minnesota. We also own and operate an adult-themed club called
"Encounters" that serves the couples or "swingers'" market in Houston. No
sexual contact is permitted at any of our locations. On February 19, 2003,
we acquired 51% control of the Wild Horse Cabaret adult nightclub near
Hobby Airport (9009 Airport Blvd, off I-45) and will operate it as part of
our popular XTC Cabaret group for $150,000.
6
2. We have extensive Internet activities.
a) We currently own two adult Internet membership Web sites at
www.couplestouch.com and www.xxxpassword.com. We acquire our website
-------------------- -------------------
content from wholesalers.
b) We operate a network of six online auction sites accessible on the
Internet under the flagship site www.naughtybids.com. These sites provide
-------------------
customers with the opportunity to purchase adult products and services in
an auction format. We earn revenues by charging service fees for each
transaction conducted on the highly automated sites, all of which utilize a
single technology platform that we operate.
Our nightclub revenues are derived from the sale of liquor, beer, wine, food,
merchandise, cover charges, membership fees, independent contractors' fees,
commissions from vending and ATM machines, valet parking, and other products and
service. Our Internet revenues are derived from subscriptions to adult content
Internet Web sites, traffic/referral revenues, and commissions earned on the
sale of products and services through Internet auction sites, and other
activities. Our fiscal year end is September 30.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2003 AS COMPARED TO
THE THREE MONTHS ENDED MARCH 31, 2002
For the three months ended March 31, 2003, the Company had consolidated total
revenues of $3,555,125 compared to consolidated total revenues of $3,910,182 for
the three months ended March 31, 2002, or a decrease of $355,057. The decrease
in total revenues was primarily due to the decrease in revenues generated by the
Company's Internet businesses. Management believes we are seeing the bottoming
out of internet revenues due to the aging of the adult internet marketing
programs for adult sites. While revenues for www.xxxpassword.com, the Company's
-------------------
content membership site, has continued to decline, revenues from auction sites
continues to increase. The Company started charging for membership to
www.couplestouch.com in February 2003. www.couplestouch.com is like a single
- --------------------
dating site for couples seeking others for sexual relationships/friendships.
The cost of goods sold for the three months ended March 31, 2003 was 14.59% of
total revenues compared to 18.33% for the three months ended March 31, 2002.
The decrease was due primarily to the reduction in costs of maintaining our
Internet operations. The cost of goods sold for the club operation for the
three months ended March 31, 2003 was 14.19% of the sales of alcoholic beverages
and food compared to 14.99% for the three months ended March 31, 2002. We
continued our efforts to achieve reductions in cost of goods sold of the club
operations through improved inventory management. We continue a program to
improve margins from liquor and food sales and food service efficiency. The
cost of sales from our Internet operation for the three months ended March 31,
2003 was 20.23% compared to 41.89% for the three months ended March 31, 2002.
Payroll and related costs for the three months ended March 31, 2003 were
$1,293,060 compared to $1,229,429 for the three months ended March 31, 2002.
The increase was due to additional personnel in the Company. Management
currently believes that its labor and management staff levels are appropriate.
7
Other selling, general and administrative expenses for the three months ended
March 31, 2003 were $1,679,252 compared to $1,600,881 for the three months ended
March 31, 2002. The increase was due primarily to increase in legal and
professional, insurance, maintenance and repairs, and other expenses.
Interest expense for the three months ended March 31, 2003 was $99,036 compared
to $82,549 for the three months ended March 31, 2002. The increase was
primarily due to the addition of new debts related to the purchase of treasury
stock.
Net loss for the three months ended March 31, 2003 was $28,971 compared to a net
income of $285,704 for the three months ended March 31, 2002. The decrease in
net income was primarily due to the decrease in revenues in the Company's
internet business and an increase in corporate expenses.
RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED MARCH 31, 2003 AS COMPARED TO THE
SIX MONTHS ENDED MARCH 31, 2002
For the six months ended March 31, 2003, the Company had consolidated total
revenues of $7,286,534 compared to consolidated total revenues of $7,964,607 for
the fiscal six months ended March 31, 2002, or a decrease of $678,073. The
decrease in total revenues was due to the decline in revenues from the Internet
business as a result of the Company's transition from programs which generate
high revenues with very low margins to programs which will produce higher
margins from lower revenues.
The cost of goods sold for the six months ended March 31, 2003 was 14.88% of
total revenues compared to 19.83% for the six months ended March 31, 2002. This
decrease is attributable to the elimination of cost of goods sold related to the
Internet business. The cost of goods sold for the club operations for the six
months ended March 31, 2003 was 14.57% and 15.04% for the six months ended March
31, 2002. Management continued its efforts to achieve reductions in cost of
goods sold through improved inventory management. The Company continues a
program to improve margins from liquor and food sales and food service
efficiency.
Payroll and related costs for the six months ended March 31, 2003 were
$2,636,529 compared to $2,496,956 for the six months ended March 31, 2002. This
increase is a result of additional personnel added to the Company's club
operations to eliminate reliance on outside vendors for services. Management
currently believes that its labor and management staff levels are appropriate.
Other general and administrative expenses for the six months ended March 31,
2003 were $3,313,197 compared to $3,192,319 for the six months ended March 31,
2002. The increase was due to the legal and accounting, advertising, and
insurance expenses.
Interest expense for the six months ended March 31, 2003 was $196,856 compared
to $174,271 for the six months ended March 31, 2002. The increase was primarily
due to the addition of new debts related to the purchase of treasury stock.
Net income for the six months ended March 31, 2003 was $65,704 compared to
$532,926 for the six months ended March 31, 2002. The decrease in net income
was primarily due to the decrease in
8
revenues in Company's internet activities. Management currently believes that
the Company is in the position to continue to be profitable in fiscal 2003.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 2003, the Company had a working capital deficit of $389,894
compared to a working capital deficit of $32,997 at September 30, 2002.
Net cash provided by operating activities in the six months ended March 31, 2003
was $329,245 compared to net cash provided of $643,825 for the six months ended
March 31, 2002. The decrease in cash provided by operating activities was due
to a decrease in net income.
The Company used $317,159 and $311,288 cash in investing activities and $411,947
and $73,079 cash in financing activities in the six months ended March 31, 2003
and 2002, respectively.
In the opinion of management, working capital is not a true indicator of the
financial status. Typically, businesses in the industry carry current
liabilities in excess of current assets because the business receives
substantially immediate payment for sales, with nominal receivables, while
accounts payable and other current liabilities normally carry longer payment
terms. Vendors and purveyors often remain flexible with payment terms providing
businesses with opportunities to adjust to short-term business down turns. The
Company considers the primary indicators of financial status to be the long-term
trend of revenue growth and mix of sales revenues, overall cash flow,
profitability from operations and the level of long-term debt.
We have not established lines of credit or financing other than our existing
debt. There can be no assurance that we will be able to obtain additional
financing on reasonable terms in the future, if at all, should the need arise.
Because of the large volume of cash we handle, stringent cash controls have been
implemented. In the event the sexually oriented business industry is required
in all states to convert the entertainers who perform at our locations, from
being independent contractors to employee status, we have prepared alternative
plans that we believe will protect our profitability. We believe that the
industry standard of treating the entertainers as independent contractors
provides sufficient safe harbor protection to preclude payroll tax assessment
for prior years.
The sexually oriented business industry is highly competitive with respect to
price, service and location, as well as the professionalism of the
entertainment. Although we believe that we are well-positioned to compete
successfully in the future, there can be no assurance that we will be able to
maintain our high level of name recognition and prestige within the marketplace.
SEASONALITY
Our nightclub operations are significantly affected by seasonal factors.
Historically, we have experienced reduced revenues from April through September
with the strongest operating results occurring during October through March.
Our experience to date indicates that there does not appear to be a seasonal
fluctuation in our Internet activities.
9
GROWTH STRATEGY
The Company believes that its club operations can continue to grow organically
and through careful entry into markets and demographic segments with high growth
potential. Upon careful research, new clubs may be opened, or existing clubs
acquired, in locations that are consistent with our growth and income targets
and which appear receptive to the upscale club formula we have developed. We may
form joint ventures or partnerships to reduce start-up and operating costs, with
our Company contributing assets in the form of our brand name and management
expertise. We may also develop new club concepts that are consistent with our
management and marketing skills. We may also acquire real estate in connection
with club operations, although some clubs may be in leased premises.
We also expect to continue to grow our Internet profit centers and plan to focus
in the future on high-margin activities that leverage our marketing skills while
requiring a low level of start-up expense and ongoing operating costs.
Item 3. Controls and Procedures.
Within 90 days prior to the filing of this report, the Company carried out an
evaluation of the effectiveness of the design and operation of the Company's
disclosure controls and procedures. This evaluation was carried out under the
supervision and with the participation of the Company's management, including
the Company's chief executive officer and chief financial officer. Based on
that evaluation, the Company's chief executive officer and chief financial
officer concluded that the Company's disclosure controls and procedures are
effective in timely alerting them to material information required to be
included in the Company's periodic reports to the Securities and Exchange
Commission. There have been no significant changes in the Company's internal
controls or in other factors, which could significantly affect internal controls
subsequent to the date the Company carried out its evaluation.
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit 99.1 -- Certification of Chief Executive Officer and
Chief Financial Officer of Rick's Cabaret International, Inc.
(b) Reports on Form 8-K
None
10
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
RICK'S CABARET INTERNATIONAL, INC.
Date: May 13, 2003 By: /s/ Eric S. Langan
----------------------------------------
Eric S. Langan
Chief Executive Officer and acting Chief
Financial Officer
11
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
I, Eric Langan, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Rick's Cabaret
International, 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: May 13, 2003
By: /s/ Eric S. Langan
-----------------------
Eric S. Langan
Chief Executive Officer
12
CERTIFICATION OF CHIEF FINANCIAL OFFICER
I, Eric Langan, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Rick's Cabaret
International, 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: May 13, 2003
By: /s/ Eric S. Langan
-----------------------
Eric S. Langan
Chief Financial Officer
13