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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
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|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2003
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
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Commission file number Q4823
ACME UNITED CORPORATION
(Exact name of registrant as specified in its charter)
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CONNECTICUT 06-0236700
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1931 BLACK ROCK TURNPIKE, Fairfield, Connecticut 06825
- ------------------------------------------------ -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 332-7330
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 reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No |_|
Registrant had 3,265,551 shares outstanding as of October 20, 2003 of its $2.50
par value Common Stock.
1
ACME UNITED CORPORATION
Page
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Part I-- FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets....................... 3
Condensed Consolidated Statements of Operations
and Comprehensive Income................................. 5
Condensed Consolidated Statements of Cash Flows............. 6
Notes to Condensed Consolidated Financial Statements........ 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................ 9
Item 3. Quantitative and Qualitative Disclosure About Market Risk..... 12
Item 4. Controls and Procedures....................................... 12
Part II -- OTHER INFORMATION
Item 1. Legal Proceedings............................................. 13
Item 2. Changes in Securities......................................... 13
Item 3. Defaults Upon Senior Securities............................... 13
Item 4. Submission of Matters to a Vote of Security Holders........... 13
Item 5. Other Information............................................. 13
Item 6. Exhibits and Reports on Form 8-K.............................. 13
Signatures............................................................ 14
2
PART I. FINANCIAL INFORMATION
ACME UNITED CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(all amounts in thousands, except per share data)
September 30 December 31
2003 2002
--------------- ---------------
ASSETS
Current assets:
Cash and cash equivalents $ 825 $ 598
Accounts receivable, less allowance 9,600 6,409
Inventories:
Finished goods 5,597 5,307
Work in process 1,633 374
Raw materials and supplies 984 994
--------------- ---------------
8,214 6,675
Prepaid expenses and other current assets 433 517
Deferred income taxes 58 733
--------------- ---------------
Total current assets 19,130 14,932
--------------- ---------------
Property, plant and equipment:
Land 219 198
Buildings 2,380 2,302
Machinery and equipment 5,514 5,801
--------------- ---------------
8,113 8,301
Less accumulated depreciation 5,891 6,019
--------------- ---------------
2,222 2,282
Other assets 332 276
Deferred income taxes 26 35
Goodwill 89 89
--------------- ---------------
Total assets $ 21,799 $ 17,614
=============== ===============
See notes to condensed consolidated financial statements.
3
ACME UNITED CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS - continued
(UNAUDITED)
(all amounts in thousands, except per share data)
September 30 December 31
2003 2002
--------------- ---------------
LIABILITIES
Current liabilities:
Notes payable $ 3 $ 362
Accounts payable 2,395 1,296
Other accrued liabilities 2,506 2,027
Current portion of long-term debt 4,316 2,731
-------------- --------------
Total current liabilities 9,220 6,416
Long-term debt, less current portion 2,062 2,033
Other 953 685
-------------- --------------
Total liabilities 12,235 9,134
STOCKHOLDERS' EQUITY
Common stock, par value $2.50:
authorized 8,000,000 shares;
issued 3,652,812 shares,
including treasury stock 9,131 9,131
Treasury stock, at cost - 387,261 shares
in 2003 and 269,061 shares in 2002 (1,621) (1,152)
Additional paid-in capital 2,029 2,029
Retained earnings 1,783 788
Accumulated other comprehensive loss:
Translation adjustment (809) (1,350)
Minimum pension liability (949) (949)
Derivative financial instrument - (17)
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(1,758) (2,316)
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Total stockholders' equity 9,564 8,480
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Total liabilities and stockholders' equity $ 21,799 $ 17,614
============== ==============
See notes to condensed consolidated financial statements.
4
ACME UNITED CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME
(unaudited)
(all amounts in thousands of dollars, except per share amounts)
Three Months Ended Nine Months Ended
September 30 September 30
------------------------ ---------------------------
2003 2002 2003 2002
----------- ----------- ------------- ------------
Net sales $ 9,538 $ 7,867 $ 26,869 $ 24,020
Costs and expenses:
Cost of goods sold:
Before inventory write-off related to restructuring 6,367 5,204 16,897 15,843
Inventory write-off related to restructuring - - - 206
----------- ----------- ------------- ------------
6,367 5,204 16,897 16,049
Selling, general and administrative expenses 2,648 2,688 7,853 7,023
Restructuring charges - - - 349
----------- ----------- ------------- ------------
9,015 7,892 24,750 23,421
----------- ----------- ------------- ------------
Income (loss) before non operating items 523 (25) 2,119 599
Non operating items:
Interest expense 49 180 190 487
Other (income) expense (91) (101) 55 (221)
----------- ----------- ------------- ------------
Income (loss) before income taxes 565 (104) 1,874 333
Income taxes (benefit) 263 (374) 879 (286)
----------- ----------- ------------- ------------
Net income 302 270 995 619
Other comprehensive income (loss):
Foreign currency translation (8) 130 541 46
Change in fair value of derivative financial instrument,
net of income taxes of $9 for the nine-month
period ended September 30, 2003 and $13 for the three and
$42 for the nine-month periods ended September 30, 2002 - 29 17 74
----------- ----------- ------------- ------------
Comprehensive income $ 294 $ 429 $ 1,553 $ 739
=========== =========== ============= ============
Basic earnings per share $ 0.09 $ 0.08 $ 0.30 $ 0.18
=========== =========== ============= ============
Diluted earnings per share $ 0.08 $ 0.08 $ 0.28 $ 0.17
=========== =========== ============= ============
Weighted average number of common shares outstanding-
denominator used for basic per share computations 3,282 3,402 3,330 3,406
Weighted average number of dilutive stock options
outstanding 304 161 198 184
----------- ----------- ------------- ------------
Denominator used for diluted per share computations 3,586 3,563 3,528 3,590
=========== =========== ============= ============
See notes to condensed consolidated financial statements
5
ACME UNITED CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
(all amounts in thousands of dollars)
Nine Months Ended
September 30
-----------------------------
2003 2002
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Operating Activities:
Net income $ 995 $ 619
Adjustments to reconcile net income
to net cash used in operating activities:
Depreciation 309 348
Amortization 19 93
Deferred income taxes 685 (276)
Non-cash restructuring charges 300
Gain on disposals of property, plant, and equipment (117) (37)
Changes in operating assets and liabilities:
Accounts receivable (3,265) (1,504)
Inventories (1,289) 2,005
Prepaid expenses and other current assets 155 60
Other assets 70 (31)
Accounts payable 1,063 (596)
Other liabilities 917 (1,031)
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Total adjustments (1,454) (669)
-------------- --------------
Net cash used in operating activities (459) (50)
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Investing Activities:
Purchase of plant, property and equipment (209) (465)
Payments for patents and trademarks (74) -
Proceeds from sale of equipment 122 37
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Net cash used in investing activities (161) (428)
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Financing Activities:
Net borrowings on revolver 1,573 971
Payments of long-term debt (296) (9)
Debt issuance costs (60)
Purchase of 118,200 common shares in 2003
and 12,800 common shares in 2002 for treasury (469) (48)
-------------- --------------
Net cash provided by financing activities 807 854
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Effect of exchange rate changes 40 46
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Net change in cash and cash equivalents 227 422
Cash and cash equivalents at beginning of period 598 172
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Cash and cash equivalents at end of period $ 825 $ 594
============== ==============
See notes to condensed consolidated financial statements
6
Notes to CONDENSED CONSOLIDATED Financial Statements
(UNAUDITED)
Note 1 -- Basis of Presentation
In the opinion of management, the accompanying condensed consolidated financial
statements include all adjustments necessary to present fairly the financial
position, results of operations and cash flows. These adjustments are of a
normal recurring nature. However, the financial statements do not include all of
the disclosures normally required by accounting principles generally accepted in
the United States or those normally made in the Company's annual report on Form
10-K. Please refer to the Company's annual report on Form 10-K for the year
ended December 31, 2002 for such disclosures. The condensed consolidated balance
sheet as of December 31, 2002 was derived from the audited consolidated balance
sheet as of that date. The results of operations for interim periods are not
necessarily indicative of the results to be expected for the full year.
Note 2 -- Contingencies
The Company has been involved in certain environmental and other matters. During
the third quarter of 2003, the Company settled its remaining litigation for
$3,000 relating to the use of certain latex products. As such, the Company
believes there will not be a material adverse impact on financial position,
results of operations, or liquidity, from these environmental matters, either
individually or in aggregate in the future.
Note 3 -- Restructuring Charges
Through the third quarter of 2002, approximately $555,000 was charged against
earnings as a result of certain strategic and operating changes initiated by the
Company's management related to liquidating Acme United Limited (AUL), a
subsidiary located in the United Kingdom. The restructuring charges consisted of
a write-down of inventory of $206,000, accounting and legal costs of $95,000,
lease cancellation costs of $90,000, write-off of goodwill of $69,000, severance
costs of $55,000, other closing costs of $22,000, write-off of uncollectible
accounts receivable of $9,000, and write-offs of equipment of $9,000.
Approximately $36,000 remained in accrued restructuring charges at September 30,
2003.
Note 4 -- Accounting for Stock-Based Compensation
At September 30, 2003, the Company has one stock-based employee compensation
plan. The Company has elected to adopt the disclosure only provisions of
Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based
Compensation, and continues to measure costs for its employee stock compensation
plans by using the accounting methods prescribed by APB Opinion No. 25,
Accounting for Stock Issued to Employees, which allows that no compensation cost
be recognized unless the exercise price of the options granted is greater than
the fair market value of the Company's stock at date of grant. Accordingly, no
stock-based employee compensation cost is reflected in net income, as all
options granted had an exercise price equal to the market value of the
underlying common stock on the date of grant. The following table illustrates
the effect on net income and earnings per share as if the Company had applied
the fair value method under SFAS No. 123, Accounting for Stock Based
Compensation, to stock-based employee compensation:
7
Three Months Ended Nine Months Ended
September 30 September 30
------------------------------ -----------------------------
2003 2002 2003 2002
-------------- ------------- ------------ --------------
Net income, as reported $ 302,132 $ 270,436 $ 994,964 $ 619,311
Deduct: Total stock-based employee compensation
expense determined under fair value based method
for all awards, net of related income tax effects 16,839 17,928 67,609 69,302
--------------------------------------------------------------
Pro forma net income $ 285,293 $ 252,508 $ 927,355 $ 550,009
==============================================================
Basic-as reported $ 0.09 $ 0.08 $ 0.30 $ 0.18
Basic-pro forma 0.09 0.07 0.28 0.16
Diluted-as reported $ 0.08 $ 0.08 $ 0.28 $ 0.17
Diluted-pro forma 0.08 0.07 0.26 0.15
Note 5 -- Litigation Settlement
As a result of significant developments in the first quarter of 2003, the
Company's German subsidiary settled litigation for $175,000. This amount
exceeded previous accruals by $153,000 and was charged to expense in the first
quarter of 2003.
Note 6 -- Income Taxes
In 2002, the Company recognized a significant one-time income tax benefit
associated with liquidating its UK business. The benefit recognized was
substantially in excess of income taxes computed at the statutory rate. In 2003,
losses from the Company's European subsidiary without any income tax benefit
resulted in a high consolidated effective tax rate.
8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
For the Three and Nine Months Ended September 30, 2003
Net Sales
Traditionally, the Company's sales are stronger in the second and third quarters
and weaker in the first and fourth quarters of the fiscal year due to the
seasonal nature of the business specific to the back-to-school season.
Consolidated net sales for the quarter ended September 30, 2003 were $9,538,000
compared with $7,867,000 for 2002, a 21% increase. Net sales for the first nine
months of 2003 were $26,869,000 compared with $24,020,000 for 2002, a 12%
increase. Excluding the favorable effect of currency gains in Canada and Europe
net sales for the first nine months increased 8%. The sales increase was mainly
driven by growth in the U.S. due to the success of new products, market share
gains and new customers. International sales were down 5% in local currency
principally due to discontinuing certain product lines in the UK business and a
generally weak economy in Germany.
Gross Profit
The gross profit for the third quarter of 2003 was $3,171,000 (33.2% of net
sales) compared to $2,663,000 (33.9% of net sales) for the third quarter of
2002. Gross profit for the first nine months of 2003 was 37.1% of net sales
compared to 33.2% in the same period of 2002. The introduction of new products
coupled with improved product mix in the U.S., positive impacts from product
rationalization efforts in Europe and overall productivity gains were the main
reasons for the improved gross margins.
Selling, General and Administrative Expenses
Selling, general and administrative ("SG&A") expenses for the third quarter of
2003 were $2,648,000 (27.8% of net sales) compared with $2,688,000 (34.2% of net
sales) for the same period of 2002. SG&A expenses for the first nine months of
2003 were $7,853,000 (29.2% of net sales) compared with $7,372,000 (30.7% of net
sales) for the same period of 2002, an increase of $481,000. Major contributors
to the increase were market research, new product development and the addition
of sales executives in Canada and Europe.
Interest Expense
Interest expense for the first nine months of 2003 was $190,000, compared with
$487,000 for 2002, a $297,000 decrease. This is mainly attributable to the
decline in average debt and lower interest rates.
Other Expense
Net other expense was $55,000 in the first nine months of 2003 compared to net
other income of $221,000 in the first nine months of 2002. The change from 2002
primarily relates to the settlement of a $175,000 lawsuit in Germany in March of
2003.
Income Before Income Taxes
Income before income taxes was $565,000 in the third quarter of 2003 compared
with a loss of $104,000 in the third quarter of 2002, an increase of $669,000.
Income before income taxes was $1,874,000 for the first nine months of 2003
compared with $333,000 in the first nine months of 2002. Pretax income for the
U.S. business was $2,354,000 compared to $1,128,000 in 2002. The international
operations lost $480,000 including a one-time expense of $175,00 for settlement
of a lawsuit in Germany. Excluding restructuring charges, the pretax loss in the
international business for the first nine months of 2002 was $295,000.
9
Income Taxes
Income tax expense for the third quarter of 2003 was $263,000 compared to an
income tax benefit of $374,000 in the third quarter of 2002. Income tax expense
for the first nine months of 2003 was $879,000 compared to an income tax benefit
of $286,000 in the first nine months of 2002. In 2002, the Company recognized a
significant one-time income tax benefit associated with liquidating its UK
business. The benefit recognized was substantially in excess of income taxes
computed at the statutory rate.
Net Income
Net income for the third quarter of 2003 was $302,000, or 8 cents per share
(diluted), compared to a net income of $270,000, or 8 cents per share (diluted)
for the same period of 2002. Net income for the first nine months of 2003 was
$995,000, or 28 cents per share (diluted), compared to a net income of $619,000,
or 17 cents per share (diluted) for the same period of 2002.
10
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS-Continued
For the Three and Nine months ended September 30, 2003
Financial Condition:
Liquidity and Capital Resources
The Company's working capital, current ratio and long-term debt to equity ratio
follow:
September 30, 2003 December 31, 2002
------------------ ------------------
Working capital................... $ 9,910,000 $8,516,000
Current ratio..................... 2.08 to 1 2.33 to 1
Long-term debt to equity ratio.... 22.0% 24.0%
During the first nine months of 2003, total bank debt increased by $1,252,000
compared to total debt at December 31, 2002, principally as a result of net
additional short-term borrowings to fund higher accounts receivable due to
seasonal sales volume and inventory purchases.
The Company has a U.S. revolving loan agreement, which allows for borrowings up
to a maximum of $10,000,000 based on a formula, which applies specific
percentages to balances of accounts receivable and inventory. Interest is
payable monthly and is charged at the LIBOR rate plus 1.75 percent. As of
September 30, 2003, $5,723,612 was outstanding and $4,082,621 was available for
borrowing under this agreement. Maturities under the revolver as of September
30, 2003 follow: 2004 - $3,940,612 and 2005 - $1,783,000. All outstanding
borrowings are due on July 31, 2005.
Cash expected to be generated from operating activities, together with funds
available under the existing loan agreement, are expected, under current
conditions, to be sufficient to finance the Company's planned operations over
the next twelve months. Over that same period, the Company does not expect to
make significant investments in plant, property, and equipment.
Safe Harbor for Forward-looking Statements
Forward-looking statements in this report, including without limitation,
statements related to the Company's plans, strategies, objectives, expectations,
intentions and adequacy of resources, are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. Investors
are cautioned that such forward-looking statements involve risks and
uncertainties including without limitation the following: (i) the Company's
plans, strategies, objectives, expectations and intentions are subject to change
at any time at the discretion of the Company; (ii) the Company's plans and
results of operations will be affected by the Company's ability to manage its
growth and inventory; and (iii) other risks and uncertainties indicated from
time to time in the Company's filings with the Securities and Exchange
Commission.
11
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS-Continued
For the Three and Nine months ended September 30, 2003
Item 3. Quantitative and Qualitative Disclosure About Market Risk
There are no material changes in market risks since our most recent filing on
Form 10-K for the year ended December 31, 2002.
Item 4. Controls and Procedures
(a) Evaluation of Internal Controls and Procedures
As of a date within 90 days prior to the date of the filing of this report, our
Chief Executive Officer and Chief Financial Officer have reviewed and evaluated
the effectiveness of our disclosure controls and procedures, which included
inquiries made to certain other of our employees. Based on their evaluation, our
Chief Executive Officer and Chief Financial Officer have each concluded that our
disclosure controls and procedures are effective and sufficient to ensure that
we record, process, summarize and report information required to be disclosed by
us in our periodic reports filed under the Securities and Exchange Commission's
rules and forms.
(b) Changes in Internal Controls
Subsequent to the date of their evaluation, there have not been any significant
changes in our internal controls or in other factors that could significantly
affect these controls, including any corrective action 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) Documents filed as part of this report.
Exhibit 31.1 Certification of Walter C. Johnsen pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002
Exhibit 31.2 Certification of Paul G. Driscoll pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002
Exhibit 32.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 32.2 Certification 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
A Form 8-K was filed by the Company on September 15, 2003 and October 21,
2003.
13
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 thereunto duly authorized.
ACME UNITED CORPORATION
By /s/ WALTER C. JOHNSEN
------------------------------
Walter C. Johnsen
President and
Chief Executive Officer
Dated: October 22, 2003
By /s/ PAUL G. DRISCOLL
------------------------------
Paul G. Driscoll
Vice President and
Chief Financial Officer
Dated: October 22, 2003
14
Exhibit 31.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, WALTER C. JOHNSEN, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Acme United
Corporation;
2. Based on my knowledge, this 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
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
report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, 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 report is being reported;
b) [Paragraph omitted in accordance with SEC transition instructions
contained in SEC Release 31-47986.]
c) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
d) Disclosed in this report any changes in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter (the registrant's fourth quarter in the
case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting.
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, of internal control over financial reporting,
to the registrant's auditors and the audit committee of registrant's board
of directors:
a) All significant deficiencies in the design or operation of internal
control over financial reporting which are reasonably likely to
adversely affect the registrant's ability to record, process,
summarize and report financial information ; and
6. Any fraud, whether or not material, that involves management or other
employees who have significant role in the registrant's internal control
over financial reporting.
By /s/ WALTER C. JOHNSEN
------------------------------
Walter C. Johnsen
President and
Chief Executive Officer
15
Exhibit 31.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, PAUL G. DRISCOLL, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Acme United
Corporation;
2. Based on my knowledge, this 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
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
report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, 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 report is being reported;
b) [Paragraph omitted in accordance with SEC transition instructions
contained in SEC Release 31-47986.]
c) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
d) Disclosed in this report any changes in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter (the registrant's fourth quarter in the
case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting.
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, of internal control over financial reporting,
to the registrant's auditors and the audit committee of registrant's board
of directors:
a) All significant deficiencies in the design or operation of internal
control over financial reporting which are reasonably likely to
adversely affect the registrant's ability to record, process,
summarize and report financial information ; and
6. Any fraud, whether or not material, that involves management or other
employees who have significant role in the registrant's internal control
over financial reporting.
By /s/ PAUL G. DRISCOLL
------------------------------
Paul G. Driscoll
Vice President and
Chief Financial Officer
16
Exhibit 32 .1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Company's quarterly report on Form 10-Q for the
quarterly period ended September 30, 2003), as filed with the Securities and
Exchange Commission on the date hereof (the "Report", I Walter C. Johnsen,
President and Chief Executive Officer, certify, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that:
a. The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
b. The information contained is the Report fairly presents, in all
material respects, the financial condition and results of operations
of the Company.
By /s/ WALTER C. JOHNSEN
------------------------------
Walter C. Johnsen
President and
Chief Executive Officer
Dated: October 22, 2003
17
Exhibit 32 .2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Company's quarterly report on Form 10-Q for the
quarterly period ended September 30, 2003), as filed with the Securities and
Exchange Commission on the date hereof (the "Report", I Paul G. Driscoll, Vice
President and Chief Financial Officer, certify, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that:
a. The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
b. The information contained is the Report fairly presents, in all
material respects, the financial condition and results of operations
of the Company.
By /s/ PAUL G. DRISCOLL
------------------------------
Paul G. Driscoll
Vice President and
Chief Financial Officer
Dated: October 22, 2003
18