SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15 (d) of
Securities Exchange Act of 1934
for Quarter ended January 31, 2003
Commission File Number 0-13301
RF INDUSTRIES, LTD.
(Exact name of registrant as specified in its charter)
Nevada 88-0168936
(State of Incorporation) (I.R.S. Employer Identification No.)
7610 Miramar Road., Bldg. 6000, San Diego, California 92126-4202
(Address of principal executive offices) (Zip Code)
(858) 549-6340 FAX (858) 549-6345
(Issuer's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None.
Check whether the issuer (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
---
State the number of shares outstanding of each of the issuer's classes of common
stock at the latest practicable date.
As of January 31, 2003, the registrant had 3,400,254 shares of Common Stock,
$.01 par value, outstanding.
Transitional small business disclosure format
Yes No X
---
Part I. FINANCIAL INFORMATION
Item 1: Financial Statements
RF INDUSTRIES, LTD. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
January 31 October 31
2003 2002
---------- ----------
ASSETS (Unaudited)
----------------------
CURRENT ASSETS
Cash and cash equivalents ........................ $ 4,272,835 $ 3,939,299
Trade accounts receivable, net of allowance
for doubtful accounts of $96,202 and $84,806 ..... 1,111,034 1,146,439
Notes receivable ................................. 12,000 12,000
Inventories .... ................................. 3,966,092 4,143,617
Other current assets ............................. 272,928 169,396
Deferred tax assets .............................. 162,600 162,600
----------- -----------
TOTAL CURRENT ASSETS ........................ 9,797,489 9,573,351
----------- -----------
PROPERTY AND EQUIPMENT
Equipment and tooling ............................ 1,088,748 1,082,813
Furniture and office equipment ................... 251,514 251,514
----------- -----------
1,340,262 1,334,327
Less accumulated depreciation ............... 940,171 899,504
----------- -----------
Total ....................................... 400,091 434,823
Notes receivable from related parties ............ 51,910 56,505
Note receivable from stockholder ................. 70,000 70,000
Other assets ..................................... 14,171 11,471
----------- -----------
TOTAL ASSETS ................................ $10,333,661 $10,146,150
=========== ===========
See Notes to Condensed Consolidated Unaudited Financial Statements.
Item 1: Financial Statements
RF INDUSTRIES, LTD. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
January 31 October 31
2003 2002
---------- ----------
(Unaudited)
Item 1: Financial Statements (continued)
LIABILITIES AND
STOCKHOLDERS' EQUITY
---------------------------------------
CURRENT LIABILITIES
Accounts payable ............................... $ 267,902 $ 70,806
Notes payable .................................. 0 44,582
Accrued expenses ............................... 251,636 327,271
------------ ------------
Total current liabilities ................. 519,538 442,659
Deferred tax liabilities ....................... 107,800 107,800
------------ ------------
TOTAL LIABILITIES ......................... 627,338 550,459
------------ ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock - authorized 10,000,000 shares
of $.01 par value; 3,441,054 shares issued ... 34,410 34,410
Additional paid-in capital ..................... 4,695,147 4,695,147
Retained earnings .............................. 5,057,856 4,923,060
Receivables from sales of stock ................ (1,715) (1,715)
Treasury stock, at cost - 40,800 and
31,700 shares ............................... (79,375) (55,211)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY ................ 9,706,323 9,595,691
------------ ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY ................... $ 10,333,661 $ 10,146,150
============ ============
See Notes to Condensed Consolidated Unaudited Financial Statements.
Item 1: Financial Statements (continued)
RF INDUSTRIES, LTD. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME AND COMPREHENSIVE INCOME
Three Months Ended
January 31
-----------------------
(Unaudited)
2003 2002
---------- ---------
INCOME:
Net sales .............................................. $2,326,876 $2,184,917
Cost of sales .......................................... 1,192,158 1,149,680
---------- ----------
Gross profit ....................................... 1,134,718 1,035,237
---------- ----------
Operating expenses:
Engineering ........................................ 198,580 164,035
Selling and general ................................ 723,839 769,983
---------- ----------
Totals ......................................... 922,419 934,018
---------- ----------
Operating income ....................................... 212,299 101,219
---------- ----------
Other income (expenses):
Commissions ........................................ 0 8,215
Interest ........................................... 11,497 23,754
---------- ----------
Totals ........................................ 11,497 31,969
---------- ----------
Income before provision for income taxes ............... 223,796 133,188
Provision for income taxes ............................. 89,000 51,000
---------- ----------
Net income ............................................. $ 134,796 $ 82,188
========== ==========
Basic earnings per share ............................... $ 0.04 $ 0.02
========== ==========
Diluted earnings per share ............................. $ 0.04 $ 0.02
========== ==========
Basic weighted average shares outstanding .............. 3,400,254 3,409,354
========== ==========
Diluted weighted average shares outstanding ............ 3,650,571 3,843,766
========== ==========
COMPREHENSIVE INCOME:
Net income ............................................. $ 134,796 $ 82,188
Unrealized gain on available-for-sale securities, net of
deferred taxes ........................................ 0 7,096
---------- ----------
Total comprehensive income $ 134,796 $ 89,284
========== ==========
See Notes to Condensed Consolidated Unaudited Financial Statements
Item 1: Financial Statements (continued)
RF INDUSTRIES, LTD. AND SUBSIDIARY
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
Three months ended
January 31
------------------------
(Unaudited)
2003 2002
---------- --------
OPERATING ACTIVITIES
Net income ....................................... $ 134,796 $ 82,188
Adjustments to reconcile net income to
net cash provided by operating activities:
Provision for bad debts ..................... 12,000
Depreciation and amortization ............... 40,666 41,185
Amortization of unearned compensation ....... 23,490
Changes in operating assets and liabilities:
Trade accounts receivable ................... 23,405 (76,656)
Inventories ................................ 177,525 257,048
Other assets ............................... (101,637) (18,566)
Accounts payable ........................... 197,096 127,752
Accrued expenses ........................... (75,635) (70,224)
----------- -----------
Net cash provided by operating activities .. 408,216 366,217
----------- -----------
INVESTING ACTIVITIES
Investment in available-for-sale securities (17,253)
Capital expenditures ....................... (5,934) (4,551)
----------- -----------
Net cash used in investing activities ...... (5,934) (21,804)
----------- -----------
FINANCING ACTIVITIES
Payments on loans payable .................. (44,582) (47,500)
Purchase of treasury stock ................. (24,164)
----------- -----------
Net cash used in financing activities ..... (68,746) (47,500)
----------- -----------
Net increase in cash and cash equivalents ........ 333,536 296,913
Cash and cash equivalents at the beginning of the
period .......................................... 3,939,299 915,538
----------- -----------
Cash and cash equivalents at the end of the period $ 4,272,835 $ 1,212,451
=========== ===========
See Notes to Condensed Consolidated Unaudited Financial Statements
RF INDUSTRIES, LTD. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Unaudited interim financial statements:
The accompanying unaudited condensed consolidated financial statements have
been prepared in conformity with accounting principles generally accepted
in the United States of America for interim financial information and with
the instructions to Form 10- QSB. Accordingly, they do not include all of
the information and footnotes required by accounting principles generally
accepted in the United States of America for complete financial statements.
In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the three months ended January 31, 2003 are
not necessarily indicative of the results that may be expected for the year
ending October 31, 2003. The unaudited condensed consolidated financial
statements should be read in conjunction with the financial statements and
footnotes thereto included in the Company's annual report on Form 10-KSB
for the year ended October 31, 2002.
Note 2 - Components of inventory
January 31 October 31
2003 2002
---------- ----------
(Unaudited) (Audited)
Raw material and supplies $ 602,846 $ 655,746
Finished goods .......... 3,363,246 3,487,871
---------- ----------
Totals ................. $3,966,092 $4,143,617
========== ==========
Note 3 - Earnings per share:
As further explained in Note 1 of the notes to the audited financial
statements of the Company, included in Form 10-KSB for the fiscal year
ended October 31, 2002, basic earnings per share is computed by dividing
net earnings by the weighted average number of common stock outstanding
during the period. Diluted earnings per share is computed by dividing net
earnings by the weighted average number of shares of common stock increased
by the effects of assuming that other potentially dilutive securities (such
as stock options) outstanding during the period had been exercised and the
treasury stock method had been applied.
The following table summarizes the computation of basic and diluted
weighted average shares:
Three Months Ended
January 31
2003 2002
-------- --------
Weighted average shares outstanding for
basic net earnings per share ............. 3,400,254 3,409,354
Add effects of potentially dilutive securities-
assumed exercised of stock options ....... 250,317 434,412
--------- ---------
Weighted average shares for diluted net
earnings per share ....................... 3,650,571 3,843,766
========= =========
Note 4 - Segment Information
The Company's segments are described in Note 6 of the notes to the audited
financial statements of the Company included in Form 10-KSB for the fiscal year
ended October 31, 2002.
Net sales and income (loss) before provision for income taxes for the three
months ended January 31, 2003 and 2002 follows:
Common/ Intercompany
Connector Neulink Bioconnect Corporate Sales Total
------------ ----------- ------------ ------------ --------------- ---------
2003
-----------
Net sales ................ $ 1,795,089 $ 467,230 $ 64,557 $ 2,326,876
Income (loss) before
provision for income
taxes .................. 279,975 39,175 (106,851) $ 11,497 223,796
Depreciation and
amortization .......... 22,342 4,567 13,757 40,666
Total assets ............. 9,249,335 765,238 319,068 10,333,661
Additions to property
and equipment ......... 5,934 5,934
2002
-----------
Net sales ................. $ 1,770,750 $ 349,232 $ 170,413 (105,478) $ 2,184,917
Income (loss) before
provision for income
taxes ................ 212,089 64,480 $ (167,135) 23,754 133,188
Depreciation and
amortization ........... 23,393 5,001 12,791 41,185
Total assets .............. 8,593,051 1,105,355 109,342 9,807,748
Additions to property
and equipment .......... 3,747 804 4,551
Item 2: Management's discussion and analysis of financial condition and results
of operations
This report contains forward-looking statements. These statements relate to
future events or the Company's future financial performance. In some cases, you
can identify forward-looking statements by terminology such as "may," "will,"
"should," "except," "plan," "anticipate," "believe," "estimate," "predict,"
"potential" or "continue," the negative of such terms or other comparable
terminology. These statements are only predictions. Actual events or results may
differ materially.
Although the Company believes that the expectations reflected in the
forward-looking statements are reasonable, the Company cannot guarantee future
results, levels of activity, performance or achievements. Moreover, neither the
Company, nor any other person, assumes responsibility for the accuracy and
completeness of the forward-looking statements. The Company is under no
obligation to update any of the forward-looking statements after the filing of
this Quarterly Report on Form 10-QSB to conform such statements to actual
results or to changes in its expectations.
The following discussion should be read in conjunction with the Company's
financial statements and the related notes and other financial information
appearing elsewhere in this Form 10-QSB. Readers are also urged to carefully
review and consider the various disclosures made by the Company which attempt to
advise interested parties of the factors which affect the Company's business,
including without limitation the disclosures made under the caption
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," under the caption "Risk Factors," and the audited financial
statements and related notes included in the Company's Annual Report filed on
Form 10-KSB for the year ended October 31, 2002 and other reports and filings
made with the Securities and Exchange Commission.
CRITICAL ACCOUNTING POLICIES
The consolidated financial statements of RF Industries and Subsidiary are
prepared in conformity with accounting principles generally accepted in the
United States of America ("GAAP"). The preparation of these financial statements
requires our management to make estimates and assumptions about future events
that affect the amounts reported in the financial statements and related notes.
Future events and their effects cannot be determined with absolute certainty.
Therefore, the determination of estimates requires the exercise of judgment. The
Company believes the following critical accounting policies affect its more
significant judgments and estimates used in the preparation of financial
statements.
REVENUE RECOGNITION
The Company recognizes revenue from the sale of products at the time of shipment
of the product. In addition, the Company has a strategic alliance with a
supplier where the Company recognizes commission income when payment is
received.
ALLOWANCE FOR DOUBTFUL ACCOUNTS
The Company maintains an allowance for doubtful accounts based on historical
collections of accounts receivable. The Company monitors its accounts receivable
balances on a continual basis. If the financial condition of customers
deteriorates, additional allowances may be required.
INCOME TAXES
The Company accounts for income taxes pursuant to the asset and liability method
which requires deferred income tax assets and liabilities to be computed for
temporary differences between the financial statement and tax basis of assets
and liabilities that will result in taxable, or deductible amounts in future
periods based on enacted laws and rates applicable to the periods in which the
temporary differences are expected to affect taxable income. Valuation
allowances are established when necessary to reduce deferred tax assets to the
amount expected to be realized. The income tax provision is the tax payable or
refundable for the period plus or minus the change during the period in deferred
tax assets and liabilities.
INVENTORY VALUATION
Inventories are valued at the weighted average cost value. Certain items in the
inventory may be considered obsolete or excess, and as such, the Company may
establish an allowance to reduce the carrying value of these items to their net
realizable value. Based on estimates, assumptions and judgments made from the
information available at the time, the Company determines the amounts of these
allowances. If these estimates and related assumptions or the market change, we
may be required to record additional reserves.
LIQUIDITY AND CAPITAL RESOURCES
Management believes that existing current assets and the amount of cash it
anticipates it will generate from current operations will be sufficient to fund
the anticipated liquidity and capital resource needs of the Company for at least
twelve months. The Company does not, however, currently have any commercial
banking arrangements providing for loans, credit facilities or similar matters
should the Company need to obtain additional capital. Management believes that
its existing assets and the cash expected to be generated from operations will
be sufficient during the current fiscal year are based on the following:
o As of January 31, 2003, the amount of cash and cash equivalents was equal
to $ 4,272,835 in the aggregate.
o As of January 31, 2003, the Company had $ 9,797,489 in current assets, and
only $ 519,538 of current liabilities.
o As of January 31, 2003, the Company had no outstanding indebtedness (other
than accounts payable and accrued expenses).
The Company does not believe it will need material additional capital equipment
in the next twelve months. In the past, the Company has financed some of its
property and equipment requirements through capital leases. No additional
capital equipment purchases have been currently identified that would require
significant additional leasing or capital obligations during the next twelve
months. Management also believes that based on the Company's financial condition
at January 31, 2003, the absence of outstanding bank debt and recent operating
results, the Company would be able to obtain bank loans to finance its
expansion, if necessary, although there can be no assurance any bank loan would
be obtainable, or if obtained, would be on favorable terms or conditions.
As of January 31, 2003, the Company had a total of $ 4,272,835 of cash and cash
equivalents compared to a total of $ 3,939,299 of cash and cash equivalents on
October 31, 2002. The increase in liquid assets is the result of (i) net income
earned by the Company during the three-month period following October 31, 2002,
(ii) a decrease in the amount of inventories held by the Company (the Company
sold some of its excess inventory that it did not need to replenish) and (iii)
additional collections of accounts receivable.
Net cash used in investing activities was $ 5,934 for the first three months
ended January 31, 2003, and was attributable to capital expenditures.
Net cash used in financing activities was $ 68,746 for the three months ended
January 31, 2003, which was primarily attributable to the payment on a loan
incurred in connection with the purchase of Bioconnect of $44,582 and the
purchase of treasury stock in the amount of $24,164.
As a result of the foregoing factors, the Company generated net cash of $408,216
from its operations during the past fiscal quarter.
Three Months 2003 vs. Three Months 2002
---------------------------------------
Net sales increased 6.5%, or $142,000, to $2,327,000 from $2,185,000 in the
first fiscal quarter last year, due to increased sales in the Company's
Connector and Neulink divisions.
Net sales at the RF Connector division increased 1.4%, to $1,795,000 compared to
$1,771,000 for the same quarter last year, due to a general increase in the
demand for connectors throughout the industry.
Net sales at the RF Neulink division increased by 34% to $467,000 compared to
$349,000 in the first quarter last year. The increase in sales can be attributed
primarily to an increase in the number of products offered to the Company's
customers.
Net sales at the Bioconnect division decreased 62% to $64,500 from $170,400. The
decrease in sales can be attributed primarily to the loss of a large contract
the division was actively shipping in the first quarter of 2002.
Cost of sales increased 3.7% or $42,500, to $1,192,200 from $1,149,700 in the
same quarter last year. The increase is primarily due to the 6.5% increase in
net sales. Overall gross margins, as a percentage of sales, increased 1.4%
compared to the first quarter last year. Gross margins typically fluctuate due
to the mix of products sold by the Company.
Engineering expenses increased 21%, or $34,500, to $198,500 from $164,000 in the
first quarter last year. Engineering expenses increased primarily as a result of
the additional expenses incurred to develop a new high-speed wireless radio
modem, the Company intends to introduce to replace an existing product line.
Selling and general expenses decreased 6% or $46,000, to $724,000 from $770,000
in the same quarter last year. Selling and general expenses were higher in the
first quarter last year due primarily to $37,500 in expenses associated with the
development of a new catalog for the RF Connector division.
The Company anticipates that its selling and general expenses will remain the
same or decrease in the near future due to the recent closing and relocation of
the Bioconnect facilities. During the past few months, the Company has closed
the separate facilities that Bioconnect had maintained in Lake Elsinore,
California, and moved those facilities to the Company's principal offices in San
Diego, California. In connection with the foregoing relocation and
consolidation, the Company also permitted the employment agreements of two of
Bioconnect's officers to expire and reduced the number of employees in the
Bioconnect division. All of the foregoing actions are expected to reduce the
Company's selling and general expenses in the future.
Net interest income decreased to $11,500 from $23,750 in the first quarter last
year due to lower interest rates and reduced investments in mutual funds since
July of 2002.
MATERIAL CHANGES IN FINANCIAL CONDITION:
Cash and cash equivalents increased by $333,500 to $4,272,800 at January 31,
2003 compared to $3,939,300 at October 31, 2002. The increase is due primarily
to lower inventory levels, net income of $134,796 for the first quarter of 2003,
and the collection of accounts receivable.
Trade accounts receivable decreased 3%, or $35,400 to $1,111,000 compared to the
October 31, 2002 balance of $1,146,400. The decrease is due primarily to timing
of collections and the Company's increased efforts to reduce its outstanding
accounts receivable.
Inventories decreased to $177,500, to $3,966,000 compared to $4,143,500 on
October 31, 2002. As part of its business strategy, and because of its off-shore
manufacturing arrangements, the Company normally maintains a high level of
inventory. For the past year, the Company has been steadily reducing its
inventory levels, to a sufficient amount to meet customer demand. However, based
on the recent increases in customer demand, the Company does not believe that it
will further significantly reduce its inventory.
Other current assets, including prepaid expenses and deposits, increased
$104,000 to $273,000, from $169,000 on October 31, 2002. This increase is a
seasonal factor associated with annual invoices for prepaid cargo insurance,
prepaid property and liability insurance, audit fees, computer maintenance
agreements and other miscellaneous expenses.
Item 3. Controls and Procedures.
Within 90 days prior to the date of this quarterly report on Form 10-QSB for the
first quarter ended January 31, 2003, 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 President, the principal
executive officers and the Company's Chief Financial Officer, our principal
financial officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures pursuant to Rule 13a-14 of the
Securities Exchange Act of 1934. Based upon that evaluation, these principal
executive officers and principal financial officer concluded that the Company's
disclosure controls and procedures are effective in timely alerting them to
material information relating to the Company's periodic SEC filings. There were
no significant changes in the Company's internal controls or in other factors
that could significantly affect those controls subsequent to the date of our
most recent evaluation.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
99.1 Certification of Chief Executive Officer Pursuant to 18
U.S.C. 1350, as Adopted Pursuant to Section 906 of the
Sarbanes- Oxley Act of 2002.
99.1 Certification of Chief Financial Officer Pursuant to 18
U.S.C. 1350, as Adopted Pursuant to Section 906 of the
Sarbanes- Oxley Act of 2002.
(b) Reports on Form 8-K
--------------------
None.
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.
RF INDUSTRIES, LTD.
Dated: March 17, 2003 By: Howard F. Hill
-------------------------------
Howard F. Hill, President
Chief Executive Officer
Dated: March 17, 2003 By: Terrie A. Gross
-------------------------------
Terrie A. Gross
Chief Financial Officer
CERTIFICATIONS
I, Howard F. Hill, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of RF Industries, Ltd.;
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 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.
Date: March 17, 2003
/s/ Howard F. Hill
-----------------------
Howard F. Hill
Chief Executive Officer
CERTIFICATIONS
I, Terrie A. Gross, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of RF Industries, Ltd.;
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 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.
Date: March 17, 2003
/s/ Terrie A. Gross
-----------------------
Terrie A. Gross
Chief Financial Officer