U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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 April 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: 000-17468
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KUPPER PARKER COMMUNICATIONS, INCORPORATED
(Exact name of the Registrant as specified in its charter)
NEW YORK 11-2250305
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8301 Maryland Avenue, St. Louis, Missouri 63105
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (314) 290-2000
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(Former name, former address and former fiscal year,
if changed from last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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
--- ---
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by court. Yes No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 5,816,907 shares of Common Stock, par
value $0.01, as of June 12, 2003.
- -----------------------------------------------------------------------
Transitional Small Business Disclosure Format (check one): Yes No X
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KUPPER PARKER COMMUNICATIONS, INCORPORATED AND SUBSIDIARIES
INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
PART I - FINANCIAL INFORMATION
Page Number
-----------
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of
April 30, 2003 (Unaudited) and October 31, 2002 3
Condensed Consolidated Statements of Operations for
the three months ended April 30, 2003 and 2002
(Unaudited) 4
Condensed Consolidated Statements of Operations for
the six months ended April 30, 2003 and 2002
(Unaudited) 5
Condensed Consolidated Statements of Cash Flows for
the six months ended April 30, 2003 and 2002
(Unaudited) 6
Notes to Condensed Consolidated Financial Statements
(Unaudited) 7
Item 2. Management's Discussion and Analysis of Financial
Condition or Plan of Operation 10
Item 3. Controls and Procedures 13
PART II - OTHER INFORMATION
Item 4. Submission of Matters To A Vote of Security Holders 14
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 14
Certifications 15
2
KUPPER PARKER COMMUNICATIONS, INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
April 30, October 31,
2003 2002
---- ----
ASSETS
Current Assets
Cash and cash equivalents $ 166,601 $ 931,619
Accounts receivable, net of allowance for bad debts
of $229,727 and $434,926 6,796,681 9,176,835
Other current assets 586,672 596,136
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Total Current Assets 7,549,954 10,704,590
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Property and equipment, net of accumulated depreciation and
amortization of $1,780,892 and $1,625,370 665,779 780,612
Intangibles, net of accumulated amortization of
$195,822 and $120,132 259,868 335,558
Goodwill, net of accumulated amortization of $298,352 3,850,987 3,850,987
Other assets 432,143 435,470
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Total Assets $ 12,758,731 $ 16,107,217
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Current maturities of long-term debt $ 2,264,661 $ 1,172,348
Accounts payable 8,811,986 12,056,867
Accrued expenses 1,492,619 1,429,680
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Total Current Liabilities 12,569,266 14,658,895
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Long-term Liabilities
Long-term debt, less current maturities 502,126 2,166,115
Other long-term liabilities 47,442 207,902
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Total Long-term Liabilities 549,568 2,374,017
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Stockholders' Equity
Common stock, $.10 stated value, 30,000,000 shares authorized;
6,200,094 shares issued 620,009 620,009
Paid-in capital 3,459,349 3,459,349
Retained earnings (deficit) (3,767,137) (4,332,729)
Treasury stock, at average cost; 383,187 shares (672,324) (672,324)
------------ ------------
Total Shareholders' Equity (Deficit) (360,103) (925,695)
------------ ------------
Total Liabilities and Shareholders' Equity $ 12,758,731 $ 16,107,217
============ ============
See accompanying notes to condensed consolidated financial statements.
3
KUPPER PARKER COMMUNICATIONS, INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
FOR THE THREE MONTHS ENDED APRIL 30,
------------------------------------
2003 2002
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REVENUES $ 2,961,671 $ 3,429,550
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OPERATING EXPENSES:
Salaries and Benefits 1,917,231 2,760,786
Office and General 714,186 985,146
Unusual Items - -
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Total Operating Expenses 2,631,417 3,745,932
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Operating Income (Loss) 330,254 (316,382)
OTHER INCOME (EXPENSE):
Interest income 2,081 2,311
Interest expense (49,224) (30,649)
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(47,143) (28,338)
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Pretax Income (Loss) 283,111 (344,720)
PROVISION FOR TAXES - -
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NET INCOME (LOSS) $ 283,111 $ (344,720)
=========== ===========
EARNINGS PER SHARE
Basic $ 0.05 $ (0.06)
=========== ===========
Diluted $ 0.05 $ (0.06)
=========== ===========
See accompanying notes to condensed consolidated financial statements.
4
KUPPER PARKER COMMUNICATIONS, INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
FOR THE SIX MONTHS ENDED APRIL 30,
----------------------------------
2003 2002
---- ----
REVENUES $ 6,058,046 $ 7,151,869
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OPERATING EXPENSES:
Salaries and Benefits 3,941,140 5,812,318
Office and General 1,457,055 1,992,520
Unusual Items - 162,791
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Total Operating Expenses 5,398,195 7,967,629
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Operating Income (Loss) 659,851 (815,760)
OTHER INCOME (EXPENSE):
Interest income 4,026 10,068
Interest expense (98,285) (67,341)
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(94,259) (57,273)
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Pretax Income (Loss) 565,592 (873,033)
PROVISION FOR TAXES - -
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NET INCOME (LOSS) $ 565,592 $ (873,033)
=========== ===========
EARNINGS PER SHARE
Basic $ 0.10 $ (0.14)
=========== ===========
Diluted $ 0.09 $ (0.14)
=========== ===========
See accompanying notes to condensed consolidated financial statements.
5
KUPPER PARKER COMMUNICATIONS, INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
FOR THE SIX MONTHS ENDED APRIL 30,
----------------------------------
2003 2002
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ 565,592 $ (873,033)
Adjustments to reconcile net income (loss) to net cash used
in operating activities
Depreciation and amortization 232,039 362,389
Provision for bad debts 36,000 36,890
Changes in assets -- (increase) decrease
Accounts receivable 2,344,154 2,287,138
Other current assets 9,464 460,565
Other assets 3,327 (609)
Changes in liabilities -- increase (decrease)
Accounts payable (3,244,881) (3,160,676)
Accrued expenses (97,521) (381,718)
Other 39,784 2,974
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Net Cash Used In Operating Activities (112,042) (1,266,080)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (42,193) (39,893)
----------- -----------
Net Cash Used In Investing Activities (42,193) (39,893)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of long-term debt (610,783) (186,710)
Proceeds from short-term bank borrowings - 250,000
Payments of short-term bank borrowings - (200,000)
----------- -----------
Net Cash Used In Investing Activities (610,783) (136,710)
----------- -----------
Impact Of Foreign Currency Translation On Cash - (925)
----------- -----------
Net Decrease In Cash And Cash Equivalents (765,018) (1,443,608)
Cash and cash equivalents, at beginning of year 931,619 1,830,860
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Cash and cash equivalents, at end of period $ 166,601 $ 387,252
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See accompanying notes to condensed consolidated financial statements.
6
KUPPER PARKER COMMUNICATIONS, INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2003
1. These unaudited interim financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally
accepted in the United States of America have been condensed or
omitted. It is therefore suggested that these unaudited interim
financial statements be read in conjunction with the Company's audited
financial statements and notes thereto for the fiscal year ended
October 31, 2002 included in the Company's Form 10-KSB for the fiscal
year ended October 31, 2002. Results of operations for interim periods
are not necessarily indicative of annual results.
2. These statements reflect all adjustments consisting of normal recurring
accruals, which, in the opinion of management, are necessary for a fair
presentation of the Company's financial position and results of
operations and cash flows for the periods presented.
3. A reconciliation of shares used in calculating basic and diluted
earnings per share for the three and six months ended April 30, 2003
and 2002 are as follows:
Three Months Ended Six Months Ended
April 30, April 30,
2003 2002 2003 2002
--------- --------- --------- ---------
Basic 5,816,907 6,026,531 5,816,907 6,026,531
Effect of assumed conversion of stock options 171,033 N/A 170,174 N/A
--------- --------- --------- ---------
Diluted 5,987,940 6,026,531 5,987,081 6,026,531
========= ========= ========= =========
4. The Company classifies its accumulated other comprehensive income,
which is comprised solely of foreign currency translation adjustments,
as a separate component of stockholders' equity. Total comprehensive
income for the three and six months ended April 30, 2003 and 2002 are
as follows:
Three Months Ended Six Months Ended
April 30, April 30,
2003 2002 2003 2002
-------- --------- -------- ---------
Net income (loss) $283,111 $(344,720) $565,592 $(873,033)
Foreign currency translation - 12,540 - (1,256)
-------- --------- -------- ---------
Comprehensive income (loss) $283,111 $(332,180) $565,592 $(874,289)
======== ========= ======== =========
5. The Company has adopted the disclosure requirements of Statement of
Financial Accounting Standards No. 148 (SFAS 148), "Accounting for
Stock-Based Compensation - Transition and Disclosure" effective
November 1, 2002. SFAS 148 amends Statement of Financial Accounting
Standards No. 123 (SFAS 123), "Accounting for Stock-Based
Compensation," to provide alternative methods of transition for a
voluntary change to the fair value based method of accounting for
stock-based compensation and also amends the disclosure requirements of
SFAS 123 to require prominent disclosures in both annual and interim
financial statements about the methods of accounting for stock-based
employee compensation and the effect of the method used on reported
results. As permitted by SFAS 148 and SFAS 123, the Company continues
to apply the accounting provisions of APB 25, and related
interpretations, with regard to the measurement of compensation cost
for options granted under the Company's equity compensation plan. No
employee compensation expense has been
7
recorded as all options granted had an exercise price equal to the
market value of the underlying common stock on the date of grant. The
pro forma effect on the Company's results of operations, had expense
been recognized using the fair value method described in SFAS 123,
using the Black-Scholes option-pricing model, is shown below. Due to
the valuation allowance against the deferred tax asset, the pro forma
deduction does not include the effect of a tax deduction in 2003.
Three Months Ended Six Months Ended
April 30, April 30,
------------------------------------------------------------------------------------------------------------------
2003 2002 2003 2002
Net income (loss), as reported $283,111 $(344,720) $565,592 $(873,033)
Deduct: total stock-based compensation
expense determined under the fair value
method (1,241) (24,294) (16,434) (34,476)
-------- --------- -------- ---------
Pro forma net income (loss) $281,870 $(369,014) $549,158 $(907,509)
======== ========= ======== =========
Basic earnings (loss) per share -- as
reported $0.05 $(0.06) $0.10 $(0.14)
======== ========= ======== =========
Diluted earnings (loss) per share -- as
reported $0.05 $(0.06) $0.09 $(0.15)
======== ========= ======== =========
Basic earnings (loss) per share -- pro
forma $0.05 $(0.06) $0.09 $(0.14)
======== ========= ======== =========
Diluted earnings (loss) per share -- pro
forma $0.05 $(0.06) $0.09 $(0.15)
======== ========= ======== =========
6. Statement of Financial Accounting Standards (SFAS) No. 142, "Goodwill
and Other Intangible Assets," which superceded APB Opinion No 17,
"Intangible Assets," established financial accounting and reporting
standards for acquired goodwill and other intangible assets. Under SFAS
No. 142, goodwill and other intangible assets with indefinite lives are
not amortized but rather tested for impairment annually, or more
frequently if impairment indicators arise. SFAS No. 142 is effective
for fiscal years beginning after December 15, 2001. Effective November
1, 2002, the Company ceased amortization of goodwill acquired prior to
July 1, 2001. The Company has completed the transitional goodwill
impairment test as of November 1, 2002, as required by SFAS No. 142.
The fair values of the reporting units were estimated using both a
discounted cash flow model and a market comparable approach (as
prescribed in SFAS No. 142), which resulted in no goodwill impairment.
If estimates of fair value or their related assumptions change in the
future, the Company may be required to write-off the impaired portion
of the goodwill, which could have a material adverse effect on the
operating results in the period in which the write-off occurs.
The following table reflects net loss and net loss per share as if
goodwill was not subject to amortization for the three and six months
ended April 30, 2002.
THREE SIX
MONTHS MONTHS
--------- ---------
Reported net income (loss) $(344,720) $(873,033)
Add back goodwill amortization 49,880 99,760
--------- ---------
Adjusted net income (loss) $(294,840) $(773,273)
========= =========
Reported net income (loss) per share (basic and diluted) $(0.06) $(0.14)
Add back goodwill amortization 0.01 0.01
--------- ---------
Adjusted net income (loss) per share (basic and diluted) $(0.05) $(0.13)
========= =========
8
Intangibles consists of the following:
APRIL 30, OCTOBER 31,
2003 2002
--------- -----------
Customer lists $445,000 $445,000
Trademark 10,690 10,690
-------- --------
$455,690 $455,690
Accumulated amortization (195,822) (120,132)
-------- --------
$259,868 $335,558
======== ========
Amortization of intangibles charged against income amounted to $37,846
and $27,429 for the three months ended April 30, 2003 and 2002,
respectively, and $75,690 and $54,858 for the six months ended April
30, 2003 and 2002, respectively.
Scheduled future amortization expense is as follows:
YEAR AMOUNT
2003 $79,254
2004 145,801
2005 34,813
--------
$259,868
========
7. On January 27, 2003, the Company amended its existing bank debt
agreement. The amendment requires the Company to make monthly debt
repayments of $29,926 beginning on February 28, 2003 together with
monthly interest payments at the higher of bank's prime rate or 4.75%.
The amended bank agreement is scheduled to mature on February 29, 2004,
at which time the outstanding principal will be due. Under the terms
of the amended loan agreement, the Company must meet certain minimum
financial targets. These targets are: (i) the Company must report
after-tax net earnings and an increase of net worth of at least
$249,000 for the three months ending January 31, 2003, (ii) the Company
must report after-tax net earnings and an increase of net worth of at
least $528,000 for the six months ending April 30, 2003, (iii) the
Company must report after-tax net earnings and an increase of net worth
of at least $842,000 for the nine months ending July 31, 2003, (iv) the
Company must report after-tax net earnings and an increase of net worth
of at least $1,156,000 for the fiscal year ending October 31, 2003, and
(v) the Company must maintain an average debt service coverage of 1.1
times for the fiscal year ending October 31, 2003. In connection with
the new bank loan agreement, Bruce Kupper, Chairman and Chief Executive
Officer of the Company, personally guaranteed $500,000 of the bank
debt. The Company met the net worth and after-tax earnings covenants as
of January 31, 2003 and April 30, 2003.
9
ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
RESULTS OF OPERATIONS -- THREE MONTHS ENDED APRIL 30, 2003
Revenues for the three months ended April 30, 2003 were $2,961,671, a 13.6%
decrease from revenues for the three months ended April 30, 2002 of $3,429,550.
During fiscal 2002 the Company sold its offices in New Orleans and London. These
offices accounted for $291,021 of second quarter 2002 revenues. Excluding the
revenues derived from these offices, the decline in revenues was 5.6%. The
decline in revenues resulted from reduced demand for most advertising and
marketing services in the wake of weak economic activity in the United States.
Salaries and benefits expense decreased $843,555 or 30.6% to $1,917,231. The
decline in this category of expense results from the aggressive cost reduction
program that the Company initiated in the first quarter of fiscal 2002. In
response to lower spending by clients, the Company reduced total headcount from
172 employees at October 31, 2001 to 116 employees at October 31, 2002, a
reduction of 32.6%. During the first six months of fiscal 2003, the Company
further reduced total headcount by 6 people or approximately 5.2%.
Office and general expenses decreased $270,960 or 27.5% between years to
$714,186. As indicated in Note 6 of the Condensed Consolidated Financial
Statements, $49,880 of this decline in expenses results from the fact that the
Company ceased amortizing goodwill effective November 1, 2002 in accordance SFAS
No. 142. The remainder of the decrease in office and general expense is due to
the fact that the Company sold its offices in New Orleans and London during
fiscal 2002 and closed its Stamford office in the fourth quarter of fiscal 2002.
Interest expense increased from $30,649 in 2002 to $49,224 in 2003 as a result
of debt incurred to fund the Company's acquisition program.
During the second quarter of 2003, the Company did not record a tax provision
because it has unutilized net operating losses in excess of its fiscal 2003
second quarter taxable income. During the second quarter of 2002, the Company
established a valuation reserve of $82,085 that was equal to its expected tax
benefit for the quarter.
RESULTS OF OPERATIONS -- SIX MONTHS ENDED APRIL 30, 2003
Revenues for the six months ended April 30, 2003 were $6,058,046, a 15.3%
decrease from revenues for the six months ended April 30, 2002 of $7,151,869. As
indicated above, during fiscal 2002 the Company sold its offices in New Orleans
and London. These offices accounted for $476,255 of second quarter 2002
revenues. Excluding the revenues derived from these offices, the decline in
revenues was 9.3%. The decline in revenues resulted from reduced demand for most
advertising and marketing services in the wake of weak economic activity in the
United States.
Salaries and benefits expense decreased $1,871,178 or 32.2% to $3,941,140. The
decline in this category of expense results from the aggressive cost reduction
program that the Company initiated in the first quarter of fiscal 2002.
10
Office and general expenses decreased $535,465 or 26.9% between years to
$1,457,055. As indicated Note 6 of the Condensed Consolidated Financial
Statements, $99,760 of this decline in expenses results from the fact that the
Company ceased amortizing goodwill effective November 1, 2002 in accordance SFAS
No. 142. The remainder of the decrease in office and general expense is due to
the fact that the Company sold its offices in New Orleans and London during
fiscal 2002 and closed its Stamford office in the fourth quarter of fiscal 2002.
During fiscal 2001 the Company initiated a private placement securities offering
to raise capital to finance its acquisition program. In December 2001, the
Company aborted this offering due to unfavorable market conditions. As a result,
in the first quarter of fiscal 2002 the Company recognized a pre-tax charge of
$162,791 to write off equity issuance costs capitalized at October 31, 2001.
This charge is reflected on the line item "Unusual Items".
Interest expense increased from $67,341 in 2002 to $98,285 in 2003 as a result
of debt incurred to fund the Company's acquisition program.
During the first six months of 2003, the Company did not record a tax provision
because it has unutilized net operating losses in excess of its fiscal 2003
first and second quarter taxable income. During the first six months of 2002,
the Company established a valuation reserve of $251,094 that was equal to its
expected tax benefit for the period.
LIQUIDITY AND CAPITAL RESOURCES
As of April 30, 2003, Kupper Parker's cash and cash equivalents totaled
$166,601, compared to $931,619 at October 31, 2002. The decrease in cash and
cash equivalents is principally due to the fact that the Company paid down
$610,783 of its long-term debt obligations during the first six months of fiscal
2003.
Operating Activities: Kupper Parker's funds from operating activities consist
primarily of net income adjusted for non-cash items and changes in operating
assets and liabilities. Cash used in operating activities was $112,042 in the
first six months of 2003 compared to cash used by operating activities of
$1,266,080 in 2002. The principal reason for the change between years is that
the Company reported net income of $565,592 in the first six months of fiscal
2003 compared to a net loss of $873,033 for the first six months of fiscal 2002.
Operating cash flows are impacted by the seasonal relationship of accounts
receivable to accounts payable, particularly those of acquisitions. This
relationship generally changes during the second quarter of a fiscal year, as
clients slow payments by as much as one to two weeks. Kupper Parker's policy is
to bill and collect monies from its clients prior to payments due to the media.
Investing Activities: Cash used in investing activities was $42,193 in 2003
compared to $39,893 in 2002. Investing activities in both periods was low and
consisted only of purchases of computers and other fixed assets.
Financing Activities: During the first quarter of 2002, the Company repaid
$200,000 of the total short-term borrowings of $1,900,328 that it owed at
October 31, 2001. During the second quarter of 2002, the Company increased its
short-term borrowings by $250,000. In
11
addition, the Company paid $186,710 in scheduled long-term debt payments. During
the first six months of fiscal 2003, the Company made $547,783 in scheduled debt
payments and also made $63,000 of debt prepayments. At April 30, 2003, the
Company was in compliance with all covenants and conditions related to its bank
debt agreement. Kupper Parker's bank borrowings arrangements are subject to
annual renewals. Kupper Parker does not anticipate any difficulties in obtaining
renewals of its bank borrowing arrangements.
In May 2003 the Company obtained a $250,000 line-of credit from Missouri State
Bank. The Company has no current intentions to borrow under this arrangement.
NEW ACCOUNTING STANDARD
In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure". SFAS No. 148 amends SFAS No. 123 to
provide alternative methods of transition for a voluntary change to the fair
value based method of accounting for stock-based employee compensation. In
addition, this Statement amends the disclosure requirements of Statement 123 to
require prominent disclosures in both annual and interim financial statements
about the method of accounting for stock-based employee compensation and the
effect of the method used on reported results. The Company has adopted SFAS No.
148 in 2003 and there was no material impact to the Company's consolidated
financial position or results of operations. See Note 5 of the Condensed
Consolidated Financial Statements pertaining to additional disclosures required.
12
CERTAIN TRENDS AND UNCERTAINTIES
The following discussion highlights trends and uncertainties, in addition to
those discussed elsewhere in this Form 10-QSB, that could materially impact our
business, results of operations and financial condition.
Economic Slowdown, Terrorism, and Armed Conflict: The events of September 11,
2001 ultimately proved to cause a severe downturn in the overall economy
resulting in decreased spending by our clients. Although we do not believe that
the recent events in Iraq have resulted in any material changes to the Company's
business and operations since October 31, 2002, it is difficult to assess the
impact that the possibility of armed conflict with Iraq, combined with the
lingering general economic slowdown, will have on future operations. These
events could result in reduced spending by customers and advertisers, which
could reduce our revenues and operating cash flow. Additionally, an economic
slowdown could affect our ability to collect accounts receivable. If we
experience reduced operating revenues, it could negatively affect our ability to
make expected capital expenditures and could also result in our inability to
meet our obligations under our financing agreements. These developments could
also have a negative impact on our financing and variable interest rate
agreements through disruptions in the market or negative market conditions.
Terrorism and related events may have other adverse effects on the Company, in
ways that cannot be presently predicted.
ITEM 3 -- CONTROLS AND PROCEDURES
Within the 90 days prior to the date of this report (the "Evaluation Date"), the
Company carried out an evaluation, under the supervision and with the
participation of the Company's management, including the Company's Chief
Executive Officer and Chief Financial Officer, 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 in timely alerting them to
material information relating to the Company (including its consolidated
subsidiaries) required to be included in the Company's periodic SEC filings.
In addition, there were no significant changes in our internal controls or in
other factors that could significantly affect these controls subsequent to the
Evaluation Date.
13
PART II - OTHER INFORMATION
ITEM 4 -- SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On April 8, 2003 the Company held its Annual Meeting of Stockholders to consider
and vote on the following matters:
1. A proposal to elect two directors.
FOR AGAINST
John Rezich 4,936,590 131,172
James Saitz 5,066,822 940
2. A proposal to ratify the appointment of Rubin, Brown, Gornstein & Co.,
LLP as Registrant's independent accountants.
FOR AGAINST ABSTAIN
5,062,144 5,501 147
ITEM 6 -- EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
99.1 Certification of Chief Executive Officer 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 Chief Financial Officer 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
In a Form 8-K filed on May 20, 2003, Registrant reported second quarter
2003 earnings.
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 in the City of St. Louis, State of
Missouri on June 12, 2003.
Kupper Parker Communications, Incorporated
By: /s/ John J. Rezich
--------------------------
John J. Rezich
Chief Financial Officer
14
CERTIFICATIONS
I, Bruce Kupper, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Kupper Parker
Communications, Incorporated;
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; and
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
we 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 function):
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.
June 12, 2003
/s/ Bruce Kupper
- ----------------
Bruce Kupper
Chairman, President and Chief Executive Officer
15
I, John J. Rezich, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Kupper Parker
Communications, Incorporated;
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; and
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
we 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 function):
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.
June 12, 2003
/s/ John J. Rezich
- ------------------
John J. Rezich
Chief Financial Officer
16
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
99.1 Certification of Chief Executive Officer 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 Chief Financial Officer Pursuant To 18 U.S.C.
Section 1350, As Adopted Pursuant To Section 906 Of The
Sarbanes-Oxley Act of 2002