FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
{X} QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period ended September 30, 2002
OR
{ } TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________________ to _________________________
Commission File Number 0-5896
JACO ELECTRONICS, INC.
(Exact name of registrant as specified in its charter)
NEW YORK 11-1978958
-------- ----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
145 OSER AVENUE, HAUPPAUGE, NEW YORK 11788
------------------------------------------
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (631) 273-5500
Indicated 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 report), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO __
-
Number of Shares of Registrant's Common Stock Outstanding as of November 8, 2002
- - 5,791,432 (Excluding 634,300 Shares of Treasury Stock).
FORM 10-Q September 30, 2002
Page 2
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
JACO ELECTRONICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
September 30, June 30,
2002 2002
--------------- -----------
ASSETS
Current Assets
Cash $ 381,702 $ 324,447
Marketable securities 554,205 650,267
Accounts receivable - net 26,237,067 29,095,269
Inventories 42,520,334 42,611,225
Prepaid expenses and other 944,299 1,183,043
Prepaid and refundable income taxes 3,011,205 2,440,055
Deferred income taxes 2,027,000 2,017,000
--------- ---------
Total current assets 75,675,812 78,321,306
Property, plant and equipment - net 6,210,953 6,708,828
Deferred income taxes 436,000 434,000
Excess of cost over net assets acquired - net 22,363,296 22,363,296
Other assets 2,710,810 2,807,451
----------- -----------
$107,396,871 $110,634,881
============ ============
See accompanying notes to condensed consolidated financial statements.
FORM 10-Q September 30, 2002
Page 3
JACO ELECTRONICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
September 30, June 30,
2002 2002
--------------- ------------
LIABILITIES & SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued expenses $ 23,692,646 $ 25,289,554
Current maturities of long term debt and
capitalized lease obligations 873,684 897,419
------------- ------------
Total current liabilities 24,566,330 26,186,973
Long term debt and capitalized lease obligations 34,298,087 34,879,766
Deferred compensation 912,500 900,000
SHAREHOLDERS' EQUITY
Preferred stock - authorized, 100,000 shares,
$10 par value; none issued
Common stock - authorized, 20,000,000,
$.10 par value; 6,425,732 shares issued
and 5,807,432 shares outstanding 642,573 642,573
Additional paid-in capital 25,152,010 25,152,010
Retained earnings 24,115,418 25,102,628
Accumulated other comprehensive loss (85,532) (24,554)
Treasury stock (2,204,515) (2,204,515)
---------- -----------
Total shareholders' equity 47,619,954 48,668,142
---------- ----------
$107,396,871 $110,634,881
============ ============
See accompanying notes to condensed consolidated financial statements.
FORM 10-Q September 30, 2002
Page 4
JACO ELECTRONICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30,
(UNAUDITED)
2002 2001
-------------- -------------
NET SALES $49,043,655 $49,430,523
COST AND EXPENSES
Cost of goods sold 42,696,191 41,415,022
---------- ----------
Gross profit 6,347,464 8,015,501
Selling, general and administrative expenses 7,465,363 9,392,345
------------ ------------
Operating loss (1,117,899) (1,376,844)
Interest expense 401,311 769,704
------------ ------------
Loss before income taxes (1,519,210) (2,146,548)
Income tax benefit (532,000) (644,000)
------------ ------------
NET LOSS $ (987,210) $(1,502,548)
============ ============
Net loss per common share:
Basic $ (0.17) $ (0.26)
============ ============
Diluted $ (0.17) $ (0.26)
============ ============
Weighted average common shares outstanding:
Basic 5,807,432 5,700,937
============ ============
Diluted 5,807,432 5,700,937
============ ============
See accompanying notes to condensed consolidated financial statements.
FORM 10-Q September 30, 2002
Page 5
JACO ELECTRONICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES
IN SHAREHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2002
(UNAUDITED)
Additional
paid-in Retained
Shares Amount capital earnings
--------------- -------------- ---------------- -------------------
Balance at July 1, 2002 6,425,732 $ 642,573 $ 25,152,010 $ 25,102,628
Net loss (987,210)
Unrealized loss on marketable
securities, net of deferred taxes
--------------- -------------- ---------------- -------------------
Balance at September 30, 2002 6,425,732 $ 642,573 $ 25,152,010 $ 24,115,418
=============== ============== ================ ===================
Accumulated
other Total
comprehensive Treasury shareholders'
loss stock equity
-------------- ---------------- -----------------
Balance at July 1, 2002 $ (24,554) $ (2,204,515) $ 48,668,142
Net loss (987,210)
Unrealized loss on marketable
securities, net of deferred taxes (60,978) (60,978)
-------------- ---------------- -----------------
Balance at September 30, 2002 $ (85,532) $ (2,204,515) $ 47,619,954
============== ================ =================
See accompanying notes to condensed consolidated financial statements.
FORM 10-Q September 30, 2002
Page 6
JACO ELECTRONICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED SEPTEMBER 30,
(UNAUDITED)
2002 2001
------------------ -----------------
Cash flows from operating activities
Net loss $ (987,210) $ (1,502,548)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities
Depreciation and amortization 559,246 592,139
Deferred compensation 12,500 12,500
Deferred income tax expense 25,000 41,032
Provision for doubtful accounts 192,500 176,900
Changes in operating assets and liabilities,
Decrease in operating assets - net 2,424,187 12,225,238
Increase (decrease) in operating liabilities - net 502,655 (7,027,767)
------------------ -----------------
Net cash provided by operating activities 2,728,878 4,517,494
------------------ -----------------
Cash flows from investing activities
Capital expenditures (27,121) (69,723)
Purchase of marketable securities (1,916) (1,987)
Business acquisitions - deferred payments (2,099,563)
Decrease (increase) in other assets 62,391 (329,542)
------------------ -----------------
Net cash used in investing activities (2,066,209) (401,252)
------------------ -----------------
Cash flows from financing activities
Borrowings under line of credit 46,162,798 44,782,170
Payments under line of credit (46,545,132) (48,241,778)
Principal payments under equipment financing
and term loans (223,080) (253,217)
Proceeds from exercise of stock options 25,000
------------------ -----------------
Net cash used in financing activities (605,414) (3,687,825)
------------------ -----------------
NET INCREASE IN CASH 57,255 428,417
------------------ -----------------
Cash at beginning of period 324,447 89,523
------------------ -----------------
Cash at end of period $ 381,702 $ 517,940
================== =================
Supplemental schedule of non-cash financing and
investing activities:
Equipment acquired under capital lease obligations $ 396,685
See accompanying notes to condensed consolidated financial statements.
FORM 10-Q September 30, 2002
Page 7
JACO ELECTRONICS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A - BASIS OF PRESENTATION
1) The accompanying condensed consolidated financial statements reflect all
adjustments, consisting only of normal recurring accrual adjustments, which are
in the opinion of management, necessary for a fair presentation of the
consolidated financial position and the results of operations at and for the
periods presented. Such financial statements do not include all the information
or footnotes necessary for a complete presentation. Therefore, they should be
read in conjunction with the Company's audited consolidated statements for the
year ended June 30, 2002 and the notes thereto included in the Company's annual
report on Form 10-K. The results of operations for the interim periods are not
necessarily indicative of the results for the entire year.
2) The Company's agreement with its banks, as amended, provides the Company with
a $45,000,000 revolving line of credit facility. The credit facility is based
principally on eligible accounts receivable and inventories of the company as
defined in the agreement. The agreement was amended to (i) extend the maturity
date to March 14, 2004, (ii) reduce the credit facility line from $70 million to
$45 million, and (iii) change the requirements of certain financial covenants.
The agreement also requires the Company to establish a compensating balance
arrangement with its banks. The interest rate was based on the average 30-day
LIBOR plus 1% to 2.25% depending on the Company's performance for the
immediately preceding four fiscal quarters measured by a certain financial
ratio. Effective October 1, 2002, the rate converted to the average 30-day LIBOR
plus 2.25% to 2.75%. Borrowings under this facility are collateralized by
substantially all of the assets of the Company.
3) For interim financial reporting purposes, the Company uses the gross profit
method for computing inventories, which consists principally of goods held for
resale.
4) On September 18, 2001, the Company announced that its Board of Directors
authorized the repurchase of up to 250,000 shares of its outstanding common
stock. Purchases may be made from time to time in market or private transactions
at prevailing market prices.
5) In June 2002, the FASB issued Statement of Financial Accounting Standards No.
146 ("SFAS No. 146"), "Accounting for Costs Associated with Exit or Disposal
Activities," which addresses accounting for restructuring and similar costs.
SFAS No. 146 supersedes previous accounting guidance, principally Emerging
Issues Task Force Issue No. 94-3. SFAS No. 146 requires that the liability for
costs associated with an exit or disposal activity be recognized when the
liability is incurred. SFAS No. 146 also establishes that the liability should
initially be measured and recorded at fair value. Accordingly SFAS No. 146 may
affect the timing of recognizing future restructuring costs as well as the
amount recognized. SFAS no. 146 is effective for exit or disposal activities
that are initiated after December 31, 2002. Management believes that the
adoption of SFAS No. 146 will not have a material impact on its results of
operations or financial position.
6) On June 6, 2000, the Company acquired all of the issued and outstanding
shares of common stock, no par value, of Interface Electronics Corp.
("Interface"), a distributor of electronic parts, components and equipment,
located in Massachusetts. The purchase price was $15,400,000 payable in cash at
the closing, plus the assumption of certain liabilities and a deferred payment
of $5,002,860, which has been fully satisfied as of September 30, 2002. The
acquisition has been accounted for as a purchase and the operations of Interface
have been included in the Company's Statement of Operations since the date of
acquisition. Included in other assets are the costs of the identifiable
intangible assets acquired, principally an employment agreement which is being
amortized on a straight-line basis over five years, and a franchise agreement
which was being amortized on a straight-line basis over fifteen years until the
Company's adoption of SFAS No. 142. The excess of the purchase price and related
expenses over
FORM 10-Q September 30, 2002
Page 8
the net tangible and identifiable intangible assets acquired amounted to
approximately $19,703,000 at September 30, 2002, and was being amortized on a
straight-line basis over twenty years until the Company's adoption of SFAS No.
142.
7) Total comprehensive loss and its components for the three months ended
September 30, 2002 and 2001 are as follows:
Three Months Ended
September 30,
--------------------------------
2002 2001
-------------- -------------
Net loss $ (987,210) $ (1,502,548)
Unrealized loss
on marketable securities (97,978) (109,033)
Deferred tax benefit 37,000 39,032
-------------- -------------
Comprehensive loss $ (1,048,188) $ (1,572,549)
============== =============
Accumulated other comprehensive income is comprised of unrealized gains
and losses on marketable securities, net of the related tax effect.
8) The weighted average common shares outstanding net of treasury shares, used
in the Company's basic and diluted earnings per share computations were
5,807,432 and 5,700,937 for the three months ended September 30, 2002 and 2001,
respectively. Excluded from the calculation of earnings per share are options to
purchase 844,548 and 948,920 shares of the Company's common stock for the three
months ended September 30, 2002 and 2001, respectively, as their inclusion would
have been antidilutive. Common stock equivalents for stock options are
calculated using the treasury stock method.
9) The Company has two reportable segments: electronics parts distribution and
contract manufacturing. The Company's primary business activity is conducted
with small and medium size manufacturers, located in North America, that produce
electronic equipment used in a variety of industries. Information pertaining to
the Company's operations in different geographic areas for the three months
ended September 30, 2002 and 2001 is not considered material to the financial
statements.
The Company's chief operating decision maker utilizes net sales and
net earnings information in assessing performance and making overall operating
decisions and resource allocations. The accounting policies of the operating
segments are the same as those described in the summary of significant
accounting policies included in the Company's annual report to shareholders.
Information about the Company's segments is as follows:
FORM 10-Q September 30, 2002
Page 9
Three Months Ended
September 30,
-------------
2002 2001
--------- -------
(in thousands)
Net sales from external customers
Electronics components distribution $46,086 $42,438
Contract manufacturing 2,958 6,993
------- -------
$49,044 $49,431
====== ======
Intersegment net sales
Electronics components distribution $ 40 $ 114
Contract manufacturing _____ _____
$ 40 $ 114
======== =========
Operating (loss) profit
Electronics components distribution $ (819) $ (1,574)
Contract manufacturing (299) 197
--------- -------
$ (1,118) $ (1,377)
======= =======
Interest expense
Electronics components distribution $ 288 $ 604
Contract manufacturing 113 166
-------- --------
$ 401 $ 770
====== =======
(Loss) earnings before income taxes
Electronics components distribution $ (1,107) $ (2,178)
Contract manufacturing (412) 31
----------- --------
$ (1,519) $ (2,147)
=========== ===========
Identifiable assets
Electronics components distribution $ 94,884 $107,552
Contract manufacturing 12,513 16,884
-------- --------
$107,397 $124,436
======= =======
Capital expenditures
Electronics components distribution $ 27 $ 70
Contract manufacturing _____ _____
$ 27 $ 70
====== ======
Depreciation and amortization
Electronics components distribution $ 353 $ 369
Contract manufacturing 206 223
-------- --------
$ 559 $ 592
======= =======
FORM 10-Q September 30, 2002
Page 10
Item 2.
JACO ELECTRONICS, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995:
Except for the historical information, this filing includes
forward-looking statements that involve risks and uncertainties, including, but
not limited to, general industry and economic conditions, the impact of
competitive products, product demand and market acceptance risks, fluctuations
in operating results, delays in development of highly-complex products, the
ability of the Company to continue to expand its operations, the level of costs
incurred in connection with the Company's expansion efforts and the financial
strength of the Company's customers and suppliers and other risks detailed from
time to time in the Company's Securities and Exchange Commission filings. The
forward-looking statements in this filing involve risks and uncertainties which
could cause actual results, performance or trends, including margins, SG&A
expenses as a percentage of revenues and earnings per diluted share, to differ
materially from those expressed in the forward-looking statements. The Company
believes that all forward-looking statements made by it have a reasonable basis,
but there can be no assurance that management's expectations, beliefs or
projections as expressed in the forward-looking statements will actually occur
or prove to be correct. Actual results may differ materially from such
information set forth herein.
GENERAL
Jaco is a distributor of electronic components, provider of contract
manufacturing and value-added services. Products distributed by Jaco include
semiconductors, capacitors, resistors, electromechanical devices, flat panel
displays and monitors, and power supplies used in the assembly and manufacturing
of electronic equipment.
The Company's customers are primarily small and medium sized
manufacturers. The trend for these customers has been to shift certain
manufacturing functions to third parties (outsourcing). The Company intends to
seek to capitalize on this trend toward outsourcing by increasing sales of
products enhanced by value-added services. Value-added services currently
provided by Jaco consist of automated inventory management services, kitting
(e.g. supplying sets of specified quantities of products to a customer that are
prepackaged for ease of feeding the customer's production lines), and contract
manufacturing through Nexus Custom Electronics, Inc., a wholly owned subsidiary
of the Company. The Company is also expanding in the flat panel display
value-added market, which includes full system integration, kitting and the
implementation of touch technologies.
FORM 10-Q September 30, 2002
Page 11
Results of Operations
The following table sets forth certain items in the Company's statements of
operations as a percentage of net sales for the periods shown:
Three Months Ended
September 30,
----------------------------------
2002 2001
--------------- ---------------
Net sales 100.0% 100.0%
Cost of goods sold 87.1 83.8
--------------- ---------------
Gross profit 12.9 16.2
Selling, general and
administrative expenses 15.2 19.0
--------------- ---------------
Operating loss (2.3) (2.8)
Interest expense 0.8 1.5
--------------- ---------------
Loss before income taxes (3.1) (4.3)
Income tax benefit (1.1) (1.3)
--------------- ---------------
NET LOSS (2.0)% (3.0)%
==== ====
COMPARISON OF THE THREE MONTHS ENDED SEPTEMBER 30, 2002 AND SEPTEMBER 30, 2001
- -------------------------------------------------------------------------------
Net sales for the three months ended September 30, 2002 were $49.0
million, a decrease of 0.8%, as compared from $49.4 million for the three months
ended September 30, 2001.The electronics industry continues to be impacted by
weak demand for components throughout most sectors. Additionally, there has been
downward pressure on unit pricing at the time of procurement. We anticipate
pricing will stabilize when demand picks up. For the current quarter, flat panel
display (FPD) sales represented approximately 10% of our distribution sales.
Passive components represented approximately 34% of our distribution sales and
active components, including FPD, represented approximately 66% of our
distribution sales.
Gross profit was $6.3 million, or 12.9% for the three months ended
September 30, 2002, as compared to $8.0 million, or 16.2% for the three months
ended September 30, 2001. The margin decrease is a result of a higher percentage
of sales of active components, which historically sell for lower margins and the
continued pressure on pricing due to weak demand for components. We do not
anticipate gross profit margins to materially improve for the foreseeable
future.
Selling, general and administrative ("SG&A") expenses were $7.5 million
for the three months ended September 30, 2002, a decrease of $1.9 million, or
20.8%, as compared to $9.4 million for the three months ended September 30,
2001. The decrease is the result of reduced staffing levels, elimination of
discretionary costs, and variable costs such as commissions paid to sales
personnel. Commissions are paid as a percentage of either net sales or gross
profit. Management is continuing to review SG&A expenses and will continue to
reduce costs that are deemed discretionary.
FORM 10-Q September 30, 2002
Page 12
Interest expense decreased 48% to $0.4 million for the three months
ended September 30, 2002, as compared to $0.8 million for the comparable period
last year. Bank borrowings declined approximately $19 million compared to last
year and interest rates declined slightly. Management does not expect any
material increase in borrowings at the current level of net sales.
Net loss for the three months ended September 30, 2002 was $1.0
million, or $0.17 per diluted share as compared to $1.5 million, or $0.26 per
diluted share for the three months ended September 30, 2001. The net loss was
primarily attributable to the decrease in gross profit margin. As a result of
reducing SG&A and interest expenses, the net loss for the current quarter was
reduced by 34% compared to the comparable quarter during the last fiscal year.
LIQUIDITY AND CAPITAL RESOURCES
Our agreement with our banks, as amended, expires on March 14, 2004.
The agreement provides us with a $45 million revolving line of credit facility
based principally on eligible accounts receivable and inventories as defined in
the agreement. The agreement also requires the Company to establish a
compensating balance arrangement with its banks. The interest rate of the credit
facility was based on the average 30-day LIBOR rate plus 1% to 2.25% depending
on our performance for the immediately preceding four fiscal quarters measured
by a certain financial ratio. Effective October 1, 2002, the rate converted to
the average 30-day LIBOR plus 2.25% to 2.75%. The outstanding balance on the
revolving line of credit facility was $33.4 million at September 30, 2002.
Borrowings under this facility are collateralized by substantially all of our
assets. The agreement contains provisions for maintenance of certain financial
ratios, all of which we were in compliance with at September 30, 2002, and
prohibits the payment of cash dividends.
For the three months ended September 30, 2002, our cash provided by
operating activities was approximately $2.7 million, as compared to $4.5 million
for the same period last fiscal year. The decrease in net cash provided is
primarily attributable to a smaller decrease in accounts receivable and
inventory for the three months ended September 30, 2002, as compared to the same
period last fiscal year. This was partially offset by an increase in accounts
payable and accrued expenses for the three months ended September 30, 2002, as
compared to a decrease in accounts payable and accrued expenses for the three
months ended September 30, 2001. The decrease in accounts receivable and
inventory was the result of the decrease in net sales for the three months ended
September 30, 2002, as compared to the same period last year. Net cash used in
investing activities increased to $2.1 million for the three months ended
September 30, 2002, as compared to $0.4 million for the three months ended
September 30, 2001. The increase is primarily attributable to deferred payments
related to the acquisition of Interface Electronics Corp. of $2.1 million for
the three months ended September 30, 2002. Net cash used in financing activities
was $0.6 million for the three months ended September 30, 2002 as compared to
$3.7 million for the comparable period last fiscal year. The decrease in net
cash used is primarily attributable to the increase in net borrowings under the
line of credit of approximately $3.1 million.
For the three months ended September 30, 2002 and September 30,
2001, our inventory turnover was 4.0x and 2.8x, respectively. The average days
outstanding of our accounts receivable at September 30, 2002 were 51 days, as
compared to 63 days at September 30, 2001.
We believe that cash flow from operations and funds available under our
credit facility will be sufficient to fund our capital needs for the foreseeable
future. However, our cash expenditures may vary significantly from current
levels, based on a number of factors, including, but not limited to future
acquisitions, if any. Historically, we have been able to obtain amendments to
our existing credit facility to satisfy financial covenants. While there can be
no assurances that such financing or future amendment if needed, will be
available, management believes we will be able to continue to obtain financing
on acceptable terms.
Inflation
Inflation has not had a significant impact on the Company's operations
during the last three fiscal years.
FORM 10-Q September 30, 2002
Page 13
Item 3. Quantitative and Qualitative Disclosure about Market Risk
We are exposed to interest rate changes with respect to our credit
facility which bears interest at the higher of the prime rate or the federal
funds rate plus 0.5%, or at our option, at a rate equal to the average 30-day
LIBOR rate plus 2.25% to 2.75% depending on our performance for the immediately
preceding four fiscal quarters measured by a certain financial ratio, and may be
adjusted quarterly. At October 31, 2002, $30.1 million was outstanding under the
credit facility. Changes in the LIBOR interest rate during the fiscal year will
have a positive or negative effect on our interest expense. Each 1.0%
fluctuation in the LIBOR interest rate will increase or decrease interest
expense for us by approximately $0.3 million based on outstanding borrowings at
October 31, 2002.
The impact of interest rate fluctuations on other floating rate
debt is not material.
Item 4. Procedures and Controls
Within the 90 days prior to the date 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 Principal Executive Officer
and Principal Financial Officer, of the effectiveness of the design and
operation of the Company's disclosure controls and procedures pursuant to
Exchange Act Rule 13a-14. Based upon that evaluation, the Principal Executive
Officer and Principal Financial Officer concluded that the Company's disclosure
controls and procedures are effective. There have been no significant changes in
the Company's internal controls or other factors that could significantly affect
those controls since the date of the Company's last evaluation of its internal
controls, and there have been no corrective actions with regard to significant
deficiencies and material weaknesses in such controls.
FORM 10-Q September 30, 2002
Page 14
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Nothing to Report
Item 2. Changes in Securities and Use of Proceeds
Nothing to Report
Item 3. Defaults Upon Senior Securities
Nothing to Report
Item 4. Submission of Matters to a Vote of Security Holders
Nothing to Report
Item 5. Other Information
Nothing to Report
Item 6. Exhibits and Reports on Form 8-K
a) Exhibit 99.9 - Certification pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
Exhibit 99.10 - Certification pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
b) Reports on Form 8-K: None
S I G N A T U R E
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.
JACO ELECTRONICS, INC.
(Registrant)
BY: /s/ Jeffrey D. Gash
---------------------------------------
Jeffrey D. Gash, Executive Vice President,
Finance and Secretary
(Principal Financial Officer)
DATED: November 14, 2002
CERTIFICATION BY JOEL H. GIRSKY PURSUANT TO SECURITIES EXCHANGE ACT RULE 13A-14
I, Joel H. Girsky, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Jaco Electronics, 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 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.
/s/ Joel H. Girsky
------------------
Joel H. Girsky
Chairman, President and Treasurer
(Principal Executive Officer)
DATED: November 14, 2002
CERTIFICATION BY JEFFREY D. GASH PURSUANT TO SECURITIES EXCHANGE ACT RULE 13A-14
I, Jeffrey D. Gash, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Jaco Electronics, 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 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.
/s/ Jeffrey D. Gash
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Jeffrey D. Gash
Executive Vice President, Finance and Secretary
(Principal Financial Officer)
DATED: November 14, 2002