UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 2003
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from to
Commission File Number 0-10187
PRAB, INC.
(Exact Name of Small Business Issuer as Specified in Its Charter)
Michigan 38-1654849
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
5944 E. Kilgore Road, P.O. Box 2121 Kalamazoo, Michigan 49003
(Address of Principal Executive Offices) (Zip Code)
Issuer's Telephone Number, Including Area Code:
(269) 382-8200
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 a court. YES [ ] NO [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
As of May 31, 2003, the issuer had outstanding 1,418,610 shares of
Common Stock, $.10 par value.
Transitional Small Business Disclosure Format (check one): YES [ ] NO [X]
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The following Financial Statements for Prab, Inc., a Michigan corporation
(the "Company") are attached hereto in response to Item 1:
Condensed Consolidated Balance Sheet
April 30, 2003 (Unaudited)
and October 31, 2002
Consolidated Statement of Earnings
Three months ended April 30, 2003
and 2002 (Unaudited)
Six months ended April 30, 2003
and 2002 (Unaudited)
Condensed Consolidated Statement of Cash Flows
Six months ended April 30, 2003
and 2002 (Unaudited)
Notes to Condensed Consolidated Financial Statements
2
PRAB, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
April 30, October 31,
2003 2002
---- ----
Unaudited (Note)
ASSETS:
Current assets:
Cash $1,627,451 $1,240,017
Accounts receivable 1,844,817 2,030,476
Inventories (Note 2) 1,169,164 1,173,904
Note receivable 58,139 145,700
Other current assets 171,462 216,456
Deferred income taxes 316,259 316,259
---------- ----------
Total current assets $5,187,292 $5,122,812
---------- -----------
Property, plant and equipment
(net of accumulated depreciation of
$3,537,169 and $3,446,848, respectively) 750,204 790,224
---------- ----------
Other Assets
Note receivable 5,057 34,707
Other assets 10,966 13,806
Unamortized pension cost 99,908 99,908
Deferred income taxes 128,741 185,620
---------- ----------
Total other assets 244,672 334,041
---------- ----------
Total assets $6,182,168 $6,247,077
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts and note payable $561,843 $735,109
Other current liabilities 1,231,287 1,180,168
---------- ----------
Total current liabilities 1,793,130 1,915,277
---------- ----------
Other non-current liabilities 463,451 512,756
---------- ----------
Stockholders' equity:
Common Stock 156,866 157,203
Additional paid-in capital 849,908 853,442
Retained earnings 3,218,026 3,107,612
Accumulated other comprehensive income (299,213) (299,213)
--------- ---------
Total stockholders' equity 3,925,587 3,819,044
--------- ---------
Total liabilities and stockholders' equity $6,182,168 $6,247,077
========= =========
Note: The balance sheet at October 31, 2002, has been taken from the
audited financial statements at that date and condensed.
3
PRAB, INC.
CONSOLIDATED STATEMENT OF EARNINGS
(Unaudited)
Three Months Ended Six Months Ended
April 30 April 30
------------------------------ ------------------
2003 2002 2003 2002
---- ---- ---- ----
Net Sales $ 3,836,844 $ 3,547,693 $7,133,160 $ 5,896,708
Costs and expenses:
Cost of products sold 2,356,586 2,271,726 4,596,619 3,695,495
Selling, general and administrative
expenses 1,288,443 1,135,169 2,393,399 2,065,992
------------ ------------------- ---------- ---------------------
3,645,029 3,406,895 6,990,018 5,761,487
------------ ------------------- ---------- ---------------------
Operating income 191,815 140,798 143,142 135,221
------------ ------------------- ---------- ---------------------
Other income (expenses):
Interest expense 7,876 3,258 16,609 12,226
Gain on sale of property, plant and
equipment 151 -- 151 8,024
------------ ------------------- ---------- ---------------------
Income before income taxes $ 199,842 $ 144,056 $ 159,902 $ 155,471
Provision for income taxes 70,966 51,745 49,488 58,121
------------ ------------------- ---------- ---------------------
Net Income $ 128,876 $ 92,311 $ 110,414 $ 97,350
============ =================== ========== =====================
Earnings (loss) per common share:
(Note 4)
Basic $ .08 $ .05 $ .07 $ .06
============ =================== ========== =====================
Diluted $ .08 $ .05 $ .07 $ .05
============ =================== ========== =====================
4
PRAB, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Six months ended
April 30,
----------------
2003 2002
---- ----
Net cash provided by (used in) operating activities $ 328,253 $ 385,086
------------- -------------
Cash flows from investing activities:
Acquisition of property, plant and equipment (54,310) (47,185)
Proceeds from sale of property and equipment 151 8,100
Proceeds from note receivable 117,211 --
------------- -------------
Net cash provided by (used in) investing
activities: 63,052 (39,085)
------------- -------------
Cash flows from financing activities:
Repurchase of common stock (3,871) (28,732)
------------- -------------
Net cash used in financing activities (3,871) (28,732)
------------- -------------
Net increase in cash 387,434 317,269
Cash - Beginning of year 1,240,017 621,795
------------- -------------
Cash - End of second quarter $1,627,451 $ 939,064
========== =============
5
PRAB, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:
The condensed consolidated balance sheet at April 30, 2003, the
consolidated statement of earnings and the condensed consolidated statement of
cash flows for the three-month and six-month periods ended April 30, 2003 and
2002, have been prepared by the Company without audit. In the opinion of
management, all adjustments necessary to present fairly the financial position,
results of operations and cash flows at April 30, 2003, and for all periods
presented have been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that these condensed
consolidated financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's October 31, 2002, annual
report to stockholders. The results of operations for the period ended April 30,
2003, is not necessarily indicative of the operating results for the full year.
2. INVENTORIES:
Inventories consist of the following:
April 30, October 31,
2003 2002
--------------------- ----------------------
Raw materials $ 475,095 $ 739,712
Work in process 355,028 114,171
Finished goods and display
units 339,041 320,021
-------------------- --------------------
Total inventories $ 1,169,164 $ 1,173,904
==================== ====================
3. UNUSED LINE OF CREDIT:
The company has a $1,000,000 line of credit which is subject to a
borrowing formula based upon certain asset levels of the Company. As of April
30, 2003, $977,477 was available to the Company under the line of credit and the
Company had no borrowings on the line of credit. The line of credit supports
letters of credit totaling $22,523 for the quarter ended April 30, 2003.
6
PRAB, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
4. RECONCILIATION OF EARNINGS PER SHARE:
FOR THE QUARTER ENDED APRIL 30, 2003
------------------------------------
INCOME SHARES PER-SHARE
(Numerator) (Denominator) Amount
---------- ------------ -----
Net income $ 128,876
--------------------
Basic EPS
Income available to
common stockholders 128,876 1,568,659 $ 0.08
====================
Effect of dilutive securities
Stock options -- 28,153
-------------------- --------------------
Diluted EPS
Income available to
common stockholders &
assumed conversions $ 128,876 1,596,812 $ 0.08
==================== ==================== ====================
FOR THE QUARTER ENDED APRIL 30, 2002
------------------------------------
INCOME SHARES PER-SHARE
(Numerator) (Denominator) Amount
---------- ------------ ------
Net Income $ 92,311
--------------------
Basic EPS
Income available to
common stockholders 92,311 1,749,469 $ 0.05
====================
Effect of dilutive securities
Stock options -- 19,040
-------------------- --------------------
Diluted EPS
Income available to
common stockholders &
assumed conversions $ 92,311 1,768,509 $ 0.05
==================== ==================== ====================
7
PRAB, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
4. RECONCILIATION OF EARNINGS PER SHARE (CONTINUED):
FOR THE SIX MONTHS ENDED APRIL 30, 2003
---------------------------------------
INCOME SHARES PER-SHARE
(Numerator) (Denominator) Amount
--------- ----------- ----------
Net Income $ 110,414
Basic EPS
Income available to common stockholders 110,414 1,569,575 $ 0.07
===================
Effect of dilutive securities
Stock options -- 20,324
-------------------- --------------------
Diluted EPS
Income available to
common stockholders &
assumed conversions $ 110,414 1,589,899 $ 0.07
==================== ==================== ===================
FOR THE SIX MONTHS ENDED APRIL 30, 2002
---------------------------------------
INCOME SHARES PER-SHARE
(Numerator) (Denominator) Amount
---------- ------------ ------
Net Income $ 97,350
Basic EPS
Income available to common stockholders 97,350 1,759,291 $ 0.06
===================
Effect of dilutive securities
Stock options -- 18,745
-------------------- --------------------
Diluted EPS
Income available to
common stockholders &
assumed conversions $ 97,350 1,778,036 $ 0.05
==================== ==================== ===================
8
Item 2. Management's Discussion and Analysis or Plan of Operation.
INTRODUCTORY NOTE
This Periodic Report on Form 10-QSB may be deemed to contain
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934,
as amended. The forward-looking statements included herein are based on current
expectations that involve a number of risks and uncertainties. Accordingly, to
the extent that this Periodic Report contains forward-looking statements
regarding the financial condition, operating results, business prospects or any
other aspect of the Company, please be advised that the Company's actual
financial condition, operating results and business performance may differ
materially from that projected or estimated by the Company in forward-looking
statements. The differences may be caused by a variety of factors, including but
not limited to adverse economic conditions, intense competition, including
intensification of price competition and entry of new competitors and products,
adverse federal, state and local government regulation, inadequate capital,
unexpected costs and operating deficits, increases in general and administrative
costs, lower sales and revenue than forecast, loss of customers, customer
returns of products sold to them by the Company, termination of contracts,
technological obsolescence of the Company's products, technical problems with
the Company's products, price increases for supplies and components, inability
to raise prices, failure to obtain new customers, litigation and administrative
proceedings involving the Company, the possible acquisition of new businesses
that result in operating losses or that do not perform as anticipated, resulting
in unanticipated losses, the possible fluctuation and volatility of the
Company's operating results, financial condition and stock price, losses
incurred in litigation and settling cases, dilution in the Company's ownership
of its business, adverse publicity and news coverage, inability to carry out
marketing and sales plans, loss or retirement of key executives, changes in
interest rates, inflationary factors, and other specific risks that may be
alluded to in this Periodic Report or in other reports issued by the Company. In
addition, the business and operations of the Company are subject to substantial
risks, which increase the uncertainty inherent in the forward-looking
statements. In light of the significant uncertainties inherent in the
forward-looking information included herein, the inclusion of such information
should not be regarded as a representation by the Company or any other person
that the objectives or plans of the Company will be achieved.
Material Changes in Financial Condition. The first six months of 2003
resulted in operating activities providing net cash in the amount of $328,253.
The primary reason for the additional net cash was a decrease in accounts
receivable and increased customer deposits combined with the depreciation
expense and net income for the period. Net cash provided by investing activities
resulted from a payment received from a customer on the note held by the Company
for equipment shipped to the customer in fiscal year 2001, partially offset by
capital expenditures of $54,310. A small share buyback program resulted in the
use of most of the net cash from financing activities in the first quarter of
$2,507 to acquire 2,203 shares of the Company's common stock. Another $1,364 was
use to acquire 1,166 shares from a former employee in a private transaction.
In May 2003, the Company signed stock purchase agreements to purchase
162,549 shares of its common stock from several shareholders at a price of $1.70
per share. The shares purchased by the Company were returned to authorized but
unissued status. To date, all but 12,500 shares have
9
been received and payment has been remitted by the Company. The stock
purchase agreements contain "Look-Back Event" and "Look-Back Value" provisions
which entitle the selling shareholders, for a period of twelve months, to the
right to additional payment for value above $1.70 per share that is received by
the remaining shareholders resulting from an event in which: (a) the Company
enters into and closes a business combination (such as a merger or
consolidation) with any other corporation or other type of business entity,
which would result in the shareholders of the Company immediately prior thereto
owning less than 50% of the voting securities of the Company or such controlling
surviving entity outstanding immediately after such business combination; or (b)
the sale, lease, exchange or other transfer of disposition by the Company of all
or substantially all of the Company's assets.
New equipment bookings in the first six months have increased by 33%
over the same period a year ago. The Company booked two orders for new equipment
totaling $1,681,000 to a single customer, of which the majority of the two
orders is scheduled for shipment in fiscal year 2004. The backlog of orders
required to be shipped in the third and fourth quarter is currently too low to
profitably support the present staffing level of the Company. In May 2003, there
was a layoff primarily in the union labor force to try to contain costs. If
improvement in new equipment bookings scheduled to be shipped in the third and
fourth quarters is not realized in the near future, there may be additional cost
reductions implemented through out the Company.
The Company has a $1,000,000 line of credit which is subject to a
borrowing formula based upon certain asset levels of the Company. Payment of the
line of credit is secured by liens on all of the assets of the Company. As of
April 30, 2003, $977,477 was available to the Company under the line of credit
and the Company had borrowed $0 of such amount. The line of credit supports two
letters of credit that total $22,523. The Company believes this financing,
combined with cash generated by operations in 2003, will provide sufficient
funds to finance working capital requirements and capital additions.
Material Changes in Results of Operations. The Company's business is
not seasonal; however, fluctuations in sales are common due to large system
orders, which is typical of the capital equipment industry. The Company's
business is highly competitive and very sensitive to price. The actual sales
fluctuation due to price is not known. The order backlog amount at the beginning
of a quarter will significantly affect sales for that quarter, due to most
equipment orders requiring an eight to twelve week period for engineering,
ordering materials, manufacturing, assembly and final run off, if required.
Large system orders typically have the greatest impact on sales and backlog.
Sales in the first six months of 2003 were 21% higher than the first six months
of 2002. Increased sales primarily resulted from having more jobs in the backlog
at the end of fiscal year 2002 requiring shipment in the first quarter versus
the end of fiscal year 2001. The sales for the Prab Conveyor product line
increased 21% in the first six months of 2003 versus the same period a year ago.
Increased briquetter sales contributed to the overall sales increase versus a
year ago. The Hapman Conveyor product line also increased sales 21% versus the
same period a year ago. The sales a year ago were primarily lower due to a
single job amounting to $1,388,000 that was part of the backlog at the end of
fiscal year 2001 and was not scheduled to be shipped until the third and fourth
quarters of 2002. Also, the USA economy was still rebounding from the September
11, 2001 terrorist attack on New York City which decreased our bookings and
sales in the comparable period a year ago.
10
New business order bookings have increased 25% in the first six
months of fiscal year 2003 compared to the same period a year ago, which has
increased the backlog of booked orders from $2,899,000 at October 31, 2002 to
$3,282,000 at the end of the second quarter ended April 30, 2003.
Cost of sales compared to net sales increased to 64% in the first six
months of 2003 from 63% in the first six months of 2002 primarily from
competitive pricing pressures, increased outsourcing, increased warranty
expense, utilizing employees for plant maintenance and under utilization of
plant capacity. Selling, general and administrative expenses were 34% of net
sales in the first six months of 2003 versus 35% in the same period a year ago.
The decreased SG&A percentage resulted primarily from the increase in sales
versus a year ago. Warranty expense for the first six months of 2003 was
$181,000 versus $158,000 for the same period a year ago. The increase is
primarily due to a single job shipped in fiscal year 2002. Management expects
end of year warranty expense to be at or below fiscal year 2002 levels.
The order backlog of $3,282,000 at the end of the second quarter
ended April 30, 2003 compares with $2,918,000 at the end of the previous quarter
ended January 31, 2002 and $3,096,000 at the end of the second quarter a year
ago.
Item 3. Controls and Procedures.
(a) Within the 90 days prior to the date of filing of this report,
the Company carried out an evaluation, under the supervision and with the
participation of the Company's management, including the Company's President and
Chief Executive Officer along with the Chief Financial Officer, of the
effectiveness of the design and operation of the Company's disclosure controls
and procedures (as defined in Exchange Act Rule 13a-14 and 15d-14). Based upon
that evaluation, the Company's President and Chief Executive Officer along with
the 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 required to be included in the Company's periodic SEC
filings.
The Company accounts for its inventory using a "periodic
inventory system." The Company calculates its actual inventory value once a
year in conjunction with its annual physical inventory count conducted prior to
year-end. Historically, an adjustment has been made to the Company's year-end
financial statements as a result of comparing the annual physical inventory
valuation to the Company's accounting records. During the last five fiscal
years, this annual adjustment has ranged from a pretax decrease in earnings of
$108,000 to a pretax increase in earnings of $263,000. Management continually
evaluates its procedures, and works to improve the recording of interim
inventory transactions; however, as long as the Company uses its existing
inventory valuation system, it is likely that annual accounting adjustments will
need to be made. These adjustments may be significant. Consequently, the
possibility of a year-end inventory adjustment should be taken into account when
analyzing the Company's interim financial statements. Management of the Company
believes that the benefit of maintaining an inventory valuation system or
adopting procedures that would produce more accurate interim financial
statements (alternatives of which include a system commonly referred to as a
perpetual inventory system or the possibility of taking complete physical
inventory counts more often than once a year) is outweighed by the significant
costs of maintaining such a system or procedures.
11
(b) There have been no significant changes in the Company's internal
controls or in other factors that could significantly affect internal controls
subsequent to the date the Company carried out this evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
The Company's "Annual Meeting of Shareholders" was held on March 27, 2003.
At the meeting the following directors were elected: Gary A. Herder, James H.
Haas, Eric V. Brown, Jr., John W. Garside, William G. Blunt and Frederick J.
Schroeder, Jr.
In addition, the appointment of Plante & Moran, LLP to be the
principal independent accountants for the Company for the current fiscal year
was ratified by the shareholders. The following is the voting breakdown for each
matter and nominee for office:
Broker
For Against Withheld Abstentions Non-Votes
----- ------- -------- ----------- ---------
Nominees for Board of Directors:
Gary A. Herder 1,387,020 0 0 4,349 0
James H. Haas 1,308,620 0 0 82,749 0
John W. Garside 1,387,020 0 0 4,349 0
William G. Blunt 1,387,020 0 0 4,349 0
Frederick J. Schroeder 1,308,620 0 0 82,749 0
Eric V. Brown Jr. 1,387,020 0 0 4,349 0
Ratification of the Selection of Plante & Moran, LLP as Independent Public Accountants:
1,376,296 4,665 0 10,408 0
12
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) The following exhibits are attached hereto or incorporated herein
by reference:
Exhibit Description of Exhibit
- ------- ----------------------
Number
- ------
2. Not Applicable.
3(i). Second Restated Articles of Incorporation of the Company,
as amended, incorporated herein by reference to Exhibit
3(i) of the Company's Form 8-A/A (Amendment No.1) dated
May 25, 1995.
3(ii). By-Laws of the Company as amended incorporated herein by
reference to Exhibit 3(ii) of the Company's Form 8-A/A
(Amendment No.1) dated May 25, 1995.
4. Not Applicable.
15. Not Applicable.
18. Not Applicable.
19. Not Applicable.
22. Not Applicable.
23. Not Applicable.
24. Not Applicable.
99.1 Certification of the Company's Chief Executive Officer,
Gary A. Herder, pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
99.2 Certification of the Company's Chief Financial Officer,
Robert W. Klinge, pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
(b) Reports on Form 8-K:
No reports on Form 8-K have been filed during the
quarter for which this report is filed.
13
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
PRAB, INC.
Date: June 9, 2003 By: /s/ Gary A. Herder
-------------------------------------
Gary A. Herder
Its: Chairman, President and
Chief Executive Officer
Date: June 9, 2003 By: /s/ Robert W. Klinge
-------------------------------------
Robert W. Klinge
Its: Chief Financial Officer
S-1
CERTIFICATIONS
Pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Gary A. Herder, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Prab, 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 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
S-2
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes
in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Date: June 9, 2003 /s/ Gary A. Herder
----------------------------------------------------
Gary A. Herder, Chairman, President and
Chief Executive Officer
I, Robert W. Klinge, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Prab, 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 function):
S-3
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes
in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Date: June 9, 2003 /s/ Robert W. Klinge
---------------------------------------------------
Robert W. Klinge, Chief Financial Officer
S-4
INDEX TO EXHIBITS
Exhibit Description of Exhibit
- ------- ---------------------
Number
- ------
2. Not Applicable.
3(i). Second Restated Articles of Incorporation of the Company,
as amended, incorporated herein by reference to Exhibit
3(i) of the Company's Form 8-A/A (Amendment No.1) dated
May 25, 1995.
3(ii). By-Laws of the Company as amended incorporated herein by
reference to Exhibit 3(ii) of the Company's Form 8-A/A
(Amendment No.1) dated May 25, 1995.
4. Not Applicable.
15. Not Applicable.
18. Not Applicable.
19. Not Applicable.
22. Not Applicable.
23. Not Applicable.
24. Not Applicable.
99.1 Certification of the Company's Chief Executive Officer,
Gary A. Herder, pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
99.2 Certification of the Company's Chief Financial Officer,
Robert W. Klinge, pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
E-1
EXHIBIT 99.1
------------
Chief Executive Officer Certification
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002, Gary A. Herder, the Chief Executive Officer of
Prab, Inc. (the "Company") hereby certifies that, to the best of his knowledge:
1. The Company's Quarterly Report on Form 10-QSB for the period
ended April 30, 2003, and to which this Certification is attached
as Exhibit 99.1 (the "Periodic Report"), fully complies with the
requirements of Section 13(a) or 15(d) of the Securities Exchange
Act of 1934; and
2. The information contained in the Periodic Report fairly presents,
in all material respects, the financial condition and results of
operations of the Company.
Date: June 9, 2003
/s/ Gary A. Herder
----------------------------------------------------
Gary A. Herder, Chief Executive Officer
This certification accompanies the Periodic Report pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by
the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for the purposes
of Section 18 of the Securities Exchange Act of 1934, as amended.
E-2
EXHIBIT 99.2
------------
Chief Financial Officer Certification
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002, Robert W. Klinge, the Chief Financial Officer of
Prab, Inc. (the "Company") hereby certifies that, to the best of his knowledge:
1. The Company's Quarterly Report on Form 10-QSB for the period
ended April 30, 2003, and to which this Certification is attached
as Exhibit 99.2 (the "Periodic Report"), fully complies with the
requirements of Section 13(a) or 15(d) of the Securities Exchange
Act of 1934; and
2. The information contained in the Periodic Report fairly presents,
in all material respects, the financial condition and results of
operations of the Company.
Date: June 9, 2003
/s/ Robert W. Klinge
----------------------------------------
Robert W. Klinge, Chief Financial Officer
This certification accompanies the Periodic Report pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by
the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for the purposes
of Section 18 of the Securities Exchange Act of 1934, as amended.
E-3