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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q 

[x]

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended

September 30, 2003

OR

[  ]

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number

1-457

BULOVA CORPORATION

(Exact name of registrant as specified in its charter)

                           New York

     11-1719409

           (State or other jurisdiction of

(I.R.S. Employer

           incorporation or organization)

Identification No.)

ONE BULOVA AVENUE, WOODSIDE, NY

     11377-7874

      (Address of principal executive offices)

      (Zip code)

(718) 204-3300

(Registrant's telephone number, including area code)

NOT APPLICABLE

(Former name, former address and former fiscal year, if changed since last report)

   Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

       X       

No 

   Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes  

No

      X       

                 Class                      

Outstanding at November 3, 2003

Common stock, $5 par value

                4,599,857 shares

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Page 1

  Item

Part I. Financial Information

   Page

    No.  

    No.  

    1.

Financial Statements

  Consolidated Condensed Balance Sheets
    September 30, 2003 and December 31, 2002

     3

  Consolidated Condensed Statements of Income

    Three and nine months ended September 30, 2003 and 2002

     4

  Consolidated Condensed Statements of Cash Flows

    Nine months ended September 30, 2003 and 2002

     5

  Notes to Consolidated Condensed Financial Statements

     6

    2.

Management's Discussion and Analysis of Financial Condition and Results
   of Operations

   10

    4.

Disclosure Controls and Procedures

   14

Part II. Other Information

    6.

Exhibits and Reports on Form 8-K

   15

BULOVA CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

(Amounts in thousands)

______________________________________________________________________________________

September 30,

December 31,

Assets

2003 

2002 

______________________________________________________________________________________

Current assets:

   Cash and cash equivalents

$         6,435 

$           9,930 

   Short-term investments

1,201 

229 

   Accounts and notes receivable -- net

83,206 

87,483 

   Inventories, principally watches and clocks

78,352 

67,293 

   Prepaid expenses

2,577 

1,704 

   Deferred income taxes

12,494 

11,209 

______________________________________________________________________________________

      Total current assets

184,265 

177,848 

______________________________________________________________________________________

Property, plant and equipment-net

15,552 

16,257 

______________________________________________________________________________________

Other assets:

   Deferred income taxes

10,947 

11,448 

   Trademarks

4,983 

4,983 

   Other

923 

371 

______________________________________________________________________________________

      Total other assets

16,853 

16,802 

______________________________________________________________________________________

      Total assets

$     216,670 

$       210,907 

======================================================================================

Liabilities and Shareholders' Equity

Current liabilities:

   Accounts payable

$         6,592 

$        14,231 

   Accrued expenses

20,070 

22,672 

   Accrued federal and foreign income taxes

791 

787 

______________________________________________________________________________________

      Total current liabilities

27,453 

37,690 

Postretirement benefits payable

26,522 

27,460 

Pension benefits payable

2,329 

2,329 

Debt to affiliate

8,000 

_____________________________________________________________________________________

      Total liabilities

64,304 

67,479 

Shareholders' equity

152,366 

143,428 

______________________________________________________________________________________

      Total liabilities and shareholders' equity

$     216,670 

$      210,907 

======================================================================================

BULOVA CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(Amounts in thousands, except per share data)

______________________________________________________________________________________

             Three Months Ended

              September 30, 

2003 

2002 

2003 

2002 

______________________________________________________________________________________

Net sales

$    37,203 

$    40,987 

$   111,631 

$   113,785 

Cost of sales

18,243 

17,389 

52,850 

52,567 

______________________________________________________________________________________

Gross profit

18,960 

23,598 

58,781 

61,218 

Selling, general and administrative expenses

17,047 

19,217 

50,008 

50,625 

______________________________________________________________________________________

Operating income

1,913 

4,381 

8,773 

10,593 

Royalty income

324 

167 

572 

1,080 

Interest income -- net

53 

58 

170 

262 

Other income

39 

13 

40 

260 

______________________________________________________________________________________

Income before income taxes

2,329 

4,619 

9,555 

12,195 

Income tax expense

659 

2,144 

2,870 

5,392 

______________________________________________________________________________________

Net income

$       1,670 

$      2,475 

$      6,685 

$      6,803 

======================================================================================

Net income per share

$         0.36 

$        0.54 

$        1.45 

$        1.48 

======================================================================================

Weighted average number of shares

   outstanding (in thousands)

4,599 

4,599 

4,599 

4,599 

======================================================================================

BULOVA CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

______________________________________________________________________________________

   Nine Months Ended

      September 30,

______________________________________________________________________________________

2003 

2002 

______________________________________________________________________________________

Operating Activities:

Net income

$        6,685 

$         6,803 

Adjustments to reconcile net income to net cash (used)

    provided by operating activities

6,198 

4,221 

Changes in assets and liabilities-net:

    Accounts and notes receivable

(1,761)

1,797 

    Inventories

(11,059)

(9,506)

    Other assets

(1,425)

182 

    Accounts payable and accrued expenses

(10,241)

(6,928)

    Accrued federal and foreign income taxes

4 

(2,676)

    Other long-term liabilities

1,679 

(987)

______________________________________________________________________________________

(9,920)

(7,094)

______________________________________________________________________________________

Investing Activities:

Purchases of short-term investments

(3,076)

(19,986)

Proceeds from sales of short-term investments

1,875 

20,000 

Purchases of property, plant and equipment

(374)

(538)

______________________________________________________________________________________

(1,575)

(524)

______________________________________________________________________________________

Financing Activities:

Proceeds from debt to affiliate

8,000 

______________________________________________________________________________________

Net change in cash and cash equivalents

(3,495)

(7,618)

Cash and cash equivalents, beginning of period

9,930 

18,937 

______________________________________________________________________________________

Cash and cash equivalents, end of period

$        6,435 

$      11,319 

======================================================================================

BULOVA CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

 1.

Basis of Presentation:

   Bulova Corporation (together with its subsidiaries referred to herein as "Bulova" or the "Company," unless the context otherwise requires) is a New York corporation. Loews Corporation ("Loews") owns approximately 97% of the Company's outstanding Common Stock.

   The Company is engaged in the distribution and sale of watches, clocks and timepiece parts for consumer use. The principal watch brands are Bulova, Caravelle, Wittnauer and Accutron. In addition, the Company sells watches and clocks with brand names licensed from third parties. The principal licensed brand is Harley Davidson. Clocks are primarily sold under the Bulova brand name. The Company's product breakdown includes luxury watch lines represented by Wittnauer and Accutron, a mid-priced watch line represented by Bulova, and a lower-priced watch line represented by Caravelle. The Company entered the grandfather clock market in the United States and Canada with the purchase in July of 2002 of select assets of a manufacturer and distributor of high quality grandfather clocks.

   See Notes to Consolidated Financial Statements in the Annual Report on Form 10-K for Bulova Corporation and Subsidiaries for the year ended December 31, 2002 filed with the Securities and Exchange Commission on March 27, 2003. There have been no changes in significant accounting policies since December 31, 2002.

   The accompanying consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America applicable to interim financial information. Accordingly, they do not include all disclosures required by accounting principles generally accepted in the United States of America for complete financial statements. The accompanying consolidated condensed financial statements have not been audited, however, in the opinion of Management, contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position as of September 30, 2003 and December 31, 2002, the results of operations for the three and nine months ended September 30, 2003 and 2002, and changes in cash flows for the nine months ended September 30, 2003 and 2002.

   Certain amounts applicable to prior periods have been reclassified to conform to the 2003 presentation.

   Results of operations for the third quarter and first nine months of each of the years reported herein is not necessarily indicative of results of operations for that entire year.

   Accounting Pronouncements -- In June of 2001, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 143, "Accounting for Asset Retirement Obligations." SFAS No. 143 applies to the accounting and reporting obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. This statement applies to legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development and/or the normal operation of a long-lived asset, except for certain obligations of lessees. Adoption of this statement has not had a material impact on the Company's consolidated financial statements.

   In June of 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities." SFAS No. 146 addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies Emerging Issues Task Force Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)." SFAS No. 146 requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred. This statement also established that fair value is the objective for initial measurement of the liability. The provisions of SFAS No. 146 are effective for exit or disposal activities that are initiated after December 31, 2002. Adoption of this statement has not had a material impact on the Company's consolidated financial statements.

   In April of 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities." SFAS No. 149 amends and clarifies accounting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities under SFAS No. 133. SFAS No. 149 is effective for contracts entered into or modified after June 30, 2003 and for hedging relationships designated after June 30, 2003. The adoption of this statement did have a material impact on the Company's consolidated financial statements.

   On May 15, 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial Instruments with characteristics of both Liabilities and Equity." SFAS No. 150 establishes standards for classifying and measuring as liabilities certain financial instruments that embody obligations of the issuer and have characteristics of both liabilities and equity. SFAS No. 150 modifies the accounting and financial statement disclosures of three types of financial instruments that, under previous guidance, issuers could account for as equity.  The Company did not have any financial instruments outstanding to which the provisions of SFAS No. 150 apply, therefore the adoption of SFAS No. 150 did not have a material impact on the Company's consolidated financial statements.

Stock Options -- Loews has a stock option plan, in which some of the Company's employees participate. Loews does not record compensation expense for stock option awards given to employees in accordance with Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" and accordingly no allocation of such cost is made to the Company. Had compensation cost been determined consistent with SFAS No. 123, "Accounting for Stock Based Compensation" and as amended by SFAS No. 148, "Accounting for Stock Based Compensation Transition and Disclosure, an amendment of FASB Statement No. 123," the Company's disclosure of pro forma net income and pro forma net income per share would have been:

 2.

Related Parties:

   Under the tax allocation agreement between the Company and its parent, Loews, the Company has paid Loews approximately $615,000, $1,432,000, $3,614,000 and $3,155,000 for the three and nine months ended September 30, 2003 and 2002, respectively.

   Loews provides administrative and managerial services for which the Company was charged $750,000 and $2,250,000 for each of the three and nine month periods ended September 30, 2003 and 2002, respectively. This expense is included in selling, general and administrative expenses. The cost allocated to the Company is estimated to be the incremental cost incurred by Loews in providing these services to the Company.

   In 2000, the Company started a business process re-engineering project to update its operational and financial data processing systems including new hardware and software and the relocation of its data processing activities from the Loews mainframe environment to a stand-alone client server network. This project was undertaken concurrently with a Loews information technology project. The Company and Loews each paid their direct costs and the Company paid certain costs which were borne by Loews and then allocated to the Company. The consolidated condensed financial statements include costs for the three and nine month periods ended September 30, 2002 of approximately $186,000 and $648,000. There were no such costs incurred in 2003.

   The Company and Loews have a credit agreement (the "Credit Agreement") which provides for unsecured loans to be made by Loews from time to time, in principal amounts aggregating up to $50,000,000. In September of 2003, the Company borrowed $8,000,000 which is currently outstanding. The interest rate for amounts outstanding under the Credit Agreement is a fixed rate equal to the Six-Month London Interbank Offered Rate ("LIBOR"), in effect on the date the Company requests the loan, plus 250 basis points (2.5%). The effective rate for the balance outstanding at September 30, 2003 was 3.68%. The Credit Agreement has been periodically extended and currently expires on December 31, 2005.

   Interest expense related to the Credit Agreement was $10,000 for the three and nine month periods ended September 30, 2003.

   See Note 2 of the Notes to Consolidated Financial Statements in the Annual Report on Form 10-K for the year ended December 31, 2002.

 3.

Geographic Information:

   The Company operates in a single industry segment, the distribution and sale of watches and clocks under the brand names of Bulova, Caravelle, Wittnauer and Accutron. Substantially all of the Company's sales are in the United States, Canada, Mexico and Europe. In September of 2002, the Company established a Swiss subsidiary to distribute product throughout Europe, and has since signed distribution agreements covering portions of South and Central America, Asia, Europe, Australia and New Zealand and entered into license agreements covering certain countries in the Far East. Operations for the Swiss subsidiary commenced in January of 2003, and include sales from distribution agreements in Australia and New Zealand as well as Europe. Sales from distribution agreements covering territories in South and Central America and Asia are included within the United States results. The Company evaluates performance based on operating earnings of the respective geographic area. The geographic distribution of the Company's operating results are summarized in the following tables:

 4.

Shareholders' equity:

   For the three and nine months ended September 30, 2003 and 2002, comprehensive income totaled $1,536,000, $2,016,000, $8,938,000 and $6,904,000 respectively. Comprehensive income includes net income, foreign currency translation gains or losses, unrealized appreciation (depreciation) on marketable securities and pension liability adjustments.

 5.

Environmental Matters:

   During the third quarter of 2002, the Company received notice of potential additional environmental contaminates at two facilities formerly owned by the Company, and settled a claim related to contaminates at an offsite disposal location formerly used by the Company. For the three and nine months ended September 30, 2002, the Company accrued $733,000 and $1,113,000, respectively, related to the foregoing matters. At September 30, 2003, the environmental liability is approximately $500,000, which represents the Company's estimate of its remaining cost of remediation for these properties. The Company pays for these expenses as incurred.

 6.

Warranty Reserve:

   The Company maintains a reserve for costs that it estimates will be needed to cover future product warranty obligations for products sold. Estimates are based upon the Company's historical experience as well as current production techniques.

   For the year ended December 31, 2002, the beginning warranty reserve was $998,000, reduced by charges incurred of $553,000, resulting in an ending balance of $445,000. For the nine months ended September 30, 2003, the beginning and ending balance of the warranty reserve is $445,000. The Company charges warranty expenses as incurred and there have been no significant claims made as of September 30, 2003.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

CRITICAL ACCOUNTING ESTIMATES

   The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in the consolidated condensed financial statements and the related notes. Actual results could differ from those estimates.
    

   The accounting policies discussed below are considered by management to be critical to an understanding of the Company's financial statements as their application places the most significant demands on management's judgment. Due to the inherent uncertainties involved with this type of judgment, actual results could differ significantly from estimates and have a material adverse impact on the Company's results of operations or equity.

Allowance for Doubtful Accounts

   Sales are recognized upon shipment of products to customers since title passes upon shipment. Allowances for estimated uncollectible accounts, discounts and returns and allowances are provided when sales are recorded and adjusted for market and customer conditions as necessary based upon historical experience and current trends.

Inventory Reserve

   The Company has established a reserve against inventory in order to report it at the lower of cost or market. The cost of inventory is determined on a first-in, first out basis. In determining the value of inventory, management considers sales history of the individual product, current consumer purchasing trends, secondary distribution channels as well as overall sales activity.
     

Warranty Reserve

   The Company maintains a reserve for costs that it estimates will be needed to cover future product warranty obligations for products sold during the year. This estimate is based upon the Company's historical experience as well as current production techniques.

Reserve for Environmental Matters

   The Company has established a reserve for the expected costs of remediation relating to environmental contaminates at various manufacturing facilities formerly owned by the Company. These estimates are periodically reviewed and adjusted to reflect the current remediation progress, estimates of required activity and other relevant factors including technological or regulatory changes.

Pension and Other Postretirement Benefits

   The Company's pension and other postretirement benefit costs are developed from actuarial valuations. Inherent in these valuations are key assumptions provided by the Company to our actuaries, including the discount rate and expected long-term rate of return on plan assets. Management is required to consider current market conditions, including changes in interest rates, in making these assumptions. The expected long-term rate of return on pension plan assets is selected by taking into account historical trends, the expected duration of the projected benefit obligation for the plans, the asset mix of the plans, and known economic and market conditions at the time of valuation. Material changes in the Company's pension and postretirement benefit costs may occur in the future due to changes in these assumptions.

LIQUIDITY AND CAPITAL RESOURCES

   Net cash utilized by operating activities was $9,920,000 and $7,094,000 for the nine months ended September 30, 2003 and 2002, respectively. The increase in the utilization of net cash flow in 2003, as compared to the corresponding period of the prior year, is attributable to the increase of inventory purchases related to anticipated sales for European operations and the grandfather clock business, as well as providing for the growth of the Mexican operations. The Company will adjust its inventory purchases, as appropriate, based upon customer product demand for the upcoming spring season.

   The Company and Loews have a credit agreement (the "Credit Agreement") which provides for unsecured loans to be made by Loews from time to time, in principal amounts aggregating up to $50,000,000. In September of 2003, the Company borrowed $8,000,000 which is currently outstanding. The interest rate for amounts outstanding under the Credit Agreement is a fixed rate equal to the Six-Month London Interbank Offered Rate ("LIBOR") in effect on the date the Company requests the loan, plus 250 basis points (2.5%). The effective rate for the balance outstanding at September 30, 2003 was 3.68%. The Credit Agreement has been periodically extended and currently expires on December 31, 2005. Funds from the Credit Agreement have been utilized to fund working capital requirements, related primarily to inventory purchases. The Company may require additional working capital advances under this agreement for its international expansion efforts.

   As discussed below in Results of Operations, the Company's principal license agreement expired on December 31, 2002, and the Company has signed new distribution agreements for Italy, Germany, Poland, the Netherlands, Greece, Australia and New Zealand. The Company is focusing on direct sales and distribution agreements in most overseas countries through its Swiss subsidiary that was established in January of 2003. The operating results of the European operations are dependent upon economic conditions which, if weak, could negatively impact liquidity and future cash flows.

   The Company has no material commitments for capital expenditures as of September 30, 2003.

RESULTS OF OPERATIONS

   Net sales decreased $3,784,000 or 9.2% and $2,154,000 or 1.9%, for the three and nine months ended September 30, 2003, as compared to the corresponding periods of prior year.

   The decrease in sales for the quarter ended September 30, 2003 is primarily attributable to a 2.7% and 33.6% decline in watch and clock unit volume, respectively, and a 9.7% decrease in watch unit selling prices, partially offset by an increase in clock unit selling prices of 34.3%, as compared to the corresponding period of the prior year. The decline in watch unit volume and selling prices was partially offset by the quarter over quarter improvement in watch unit selling prices and unit sales volume for the Accutron and Harley Davidson product lines.
    

   The decrease in sales for the nine months ended September 30, 2003 is attributable to lower watch and clock sales volume of 5.3% and 12.2%, partially offset by higher watch and clock unit selling prices of 2.9% and 5.9%, as compared to the corresponding period of the prior year. The decline in watch unit volume was partially offset by the improvement within the Accutron collections for Breckenridge, Lucerne and Barcelona, as well as the Harley Davidson product lines. The increase in watch unit selling prices for the nine months ended September 30, 2003, as compared to 2002, is attributable to higher unit prices in the Wittnauer, Caravelle and Harley Davidson product lines. Additionally, the grandfather clock business has reported stronger unit sales volume and selling prices as compared to 2002. The Company believes that operations have been negatively impacted by the weak economy and consumer's reluctance to make discretionary expenditures.

   Gross profit as a percentage of net sales for the three and nine months ended September 30, 2003 was 51.0% and 52.7%, as compared to 57.6% and 53.8% for the corresponding periods of the prior year. The Company's overall gross margins are primarily affected by three major factors: sales mix, product pricing strategy and efficient procurement practices. For the three and nine months ended September 30, 2003, the decline in gross profit is a function of sales mix within the brands.

   The Company's operating expenses as a percentage of net sales for the three and nine months ended September 30, 2003 was 45.8% and 44.8% as compared to 46.9% and 44.5% for the corresponding periods of the prior year. Management continues to invest in marketing and selling expenses it believes are necessary to support its current market position; as well as incurring additional operating expenses related to the commencement of European operations and the addition of the grandfather clock operations.

   Royalty income has increased by $157,000 for the three months ended September 30, 2003 and decreased $508,000 for the nine months ended September 30, 2003, as compared to the corresponding periods of the prior year. Royalty income for the three and nine months ended September 30, 2002 included the final minimum royalty payments received from the Company's principal European and Asian licensees. In anticipation of the expiration of the European license agreement on December 31, 2002, the Company established a Swiss subsidiary in the third quarter of 2002, Bulova Swiss SA, to handle sales and distribution throughout Europe and in certain other countries. Bulova Swiss SA operations commenced in January of 2003. Royalty income is likely to continue to be lower in the future due to lower minimums and the Company's decision not to renew certain licensing arrangements overseas, but rather to focus on direct sales and distribution arrangements in most overseas countr ies. The operating results of the European operations are dependent upon economic conditions which, if weak, could negatively impact liquidity and cash flows.

   Interest income -- net decreased by $5,000 and $92,000 for the three and nine months ended September 30, 2003, as compared to 2002, due to a lower level of invested assets as well as lower interest rates.

   Income Taxes -- The effective income tax rate for the three and nine months ended September 30, 2003 decreased 18.1% and 14.2% respectively, as compared to the corresponding periods of the prior year. The decrease is attributable to state, city and franchise tax settlements of $407,000 and $1,202,000 for the three and nine months ended September 30, 2003, respectively.

Foreign Currency

   The Company imports most of its watch and clock products. During the first nine months of 2003, approximately 3% and 1% of the Company's purchases were denominated in Japanese yen and the Euro, respectively. The remaining purchases were primarily denominated in U.S. dollars for product acquired from vendors located in Asia, principally Hong Kong, as well as Europe. The Hong Kong dollar is pegged to the U.S. dollar and has not been subject to the fluctuations that have affected other Asian currencies. In the event that the peg between the two currencies is removed, currency fluctuations could have a material impact on the cost of those imported products which ultimately could have a negative impact on the Company's gross profit, operating income and cash flow. Foreign currency fluctuations have not had a material impact on results of operations for the three and nine months ended September 30, 2003 and 2002. Future foreign currency fluctuations, however, could impact gross profit, income and cash flow.
   

Accounting Standards

   In June of 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement Obligations." SFAS No. 143 applies to the accounting and reporting obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. This statement applies to legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development and/or the normal operation of a long-lived asset, except for certain obligations of lessees. Adoption of this statement has not had a material impact on the Company's consolidated financial statements.
   

   In April of 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities." SFAS No. 149 amends and clarifies accounting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities under SFAS No. 133. SFAS No. 149 is effective for contracts entered into or modified after June 30, 2003 and for hedging relationships designated after June 30, 2003. The adoption of this statement did not have a material impact on the Company's consolidated financial statements.

   On May 15, 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial Instruments with characteristics of both Liabilities and Equity." SFAS No. 150 establishes standards for classifying and measuring as liabilities certain financial instruments that embody obligations of the issuer and have characteristics of both liabilities and equity. SFAS No. 150 modifies the accounting and financial statement disclosures of three types of financial instruments that, under previous guidance, issuers could account for as equity. The Company did not have any financial instruments outstanding to which the provisions of SFAS No. 150 apply, therefore the adoption of SFAS No. 150 did not have a material impact on the Company's consolidated financial statements.

Forward-Looking Statements

   When included in this Report, the words "believes," "expects," "intends," "anticipates," "estimates" and analogous expressions are intended to identify forward-looking statements. Such statements inherently are subject to a variety of risks and uncertainties that could cause actual results to differ materially from those projected. Such risks and uncertainties include, among others, general economic and business conditions, changes in financial markets, significant changes in consumer spending patterns, competition in the Company's product areas, changes in foreign currency valuations in relation to the U.S. dollar, changes in foreign, political, social and 

Item 4. Disclosure Controls and Procedures

   The Company maintains a system of disclosure controls and procedures which are designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the federal securities laws, including this report, is recorded, processed, summarized and reported on a timely basis. These disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed under the federal securities laws is accumulated and communicated to the Company's management on a timely basis to allow decisions regarding required disclosure.

   The Company's principal executive officer and principal financial officer have conducted an evaluation of the Company's disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation, the Company's principal executive officer and principal financial officer have each concluded that the Company's disclosure controls and procedures are adequate for their intended purpose.

   There was no change in the Company's internal control over financial reporting identified in connection with the foregoing evaluation that occurred during the Company's last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II. OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K.

    (a)  Exhibits--

Description of Exhibits

Number 

(10) Material Contracts

   Amendment dated September 10, 2003, to the Credit Agreement between Loews Corporation and Registrant dated as of September 19, 1979.

10.1 

   Amendment dated October 28, 2003, to the Credit Agreement between Loews Corporation and Registrant dated as of September 19, 1979.

10.2 

(31) Rule 13a -- 14(a)/15d -- 14(a) Certifications

   Certification dated November 7, 2003, by the Chief Executive Officer of the Company pursuant to Rule 13a-14(a) and Rule 15d-14(a)

31.1 

   Certification dated November 7, 2003, by the Chief Financial Officer of the Company pursuant to Rule 13a-14(a) and Rule 15d-14(a)

31.2 

(32) Section 1350 Certifications

   Certification dated November 7, 2003, by the Chief Executive Officer of the Company pursuant to 18 U.S.C. Section 1350 (as adopted by Section 906 of the Sarbanes-Oxley Act of 2002)

32.1 

   Certification dated November 7, 2003, by the Chief Financial Officer of the Company pursuant to 18 U.S.C. Section 1350 (as adopted by Section 906 of the Sarbanes-Oxley Act of 2002)

32.2 

    (b)  Current 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.

BULOVA CORPORATION

(Registrant)

Dated:  November 7, 2003

By:

          /s/ John T. O'Reilly             

           JOHN T. O'REILLY

         Chief Financial Officer

     (Duly authorized officer and

       principal financial officer)