UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------
FORM 10-Q
(Mark One)
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended June 30, 2003
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the transition period from ____________ to
________________
Commission File No. 0-10634
---------------------------
Nevada Chemicals, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Utah 87-0351702
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9149 So. Monroe Plaza Way, Suite B
Sandy, Utah 84070
(Address of principal executive offices, zip code)
(801) 984-0228 (Registrant's
telephone number, including area code)
Indicate by check mark whether the registrant (1) filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
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 ]
The number of shares outstanding of the registrant's par value $0.001
Common Stock as of July 24, 2003 was 6,807,919.
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Nevada Chemicals, Inc.
Form 10-Q
Table of Contents
Page No.
--------
Part I Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of June 30, 2003
and December 31, 2002 1
Condensed Consolidated Statements of Income for the Three
Months Ended June 30, 2003 and June 30, 2002 2
Condensed Consolidated Statements of Income for the Six
Months Ended June 30, 2003 and June 30, 2002 3
Condensed Consolidated Statements of Cash Flows for the Six
Months Ended June 30, 2003 and June 30, 2002 4
Notes to Condensed Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 6
Item 3. Quantitative and Qualitative Disclosure About Market Risk 9
Item 4. Controls and Procedures 10
Part II Other Information
Item 4. Submission of Matters to a Vote of Security Holders 10
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
Certifications 13
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
NEVADA CHEMICALS, INC.
Condensed Consolidated Balance Sheets
(In Thousands)
June 30, 2003 December 31,
ASSETS (Unaudited) 2002
-----------------------------------
Current assets:
Cash and cash equivalents $ 8,343 $ 6,612
Short-term investments 1,681 4,026
Receivables 109 99
Prepaid expenses 42 41
Current portion of notes receivable 281 319
-----------------------------------
Total current assets 10,456 11,097
Investment in and advances to joint venture 12,792 12,919
Property and equipment, net 33 38
Notes receivable 386 407
Other assets 232 231
-----------------------------------
$ 23,899 $ 24,692
===================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities - accounts payable and accrued expenses $ 951 $ 1,097
Deferred income taxes 1,524 1,584
-----------------------------------
Total liabilities 2,475 2,681
-----------------------------------
Stockholders' Equity:
Common stock 7 7
Capital in excess of par value 3,512 4,295
Accumulated other comprehensive (loss) income (30) 13
Retained earnings 17,935 17,696
-----------------------------------
Total stockholders' equity 21,424 22,011
-----------------------------------
$ 23,899 $ 24,692
===================================
See accompanying notes to condensed consolidated financial statements
1
NEVADA CHEMICALS, INC.
Condensed Consolidated Statements of Income
(In Thousands, Except Share and Per Share Amounts)
(Unaudited)
Three Months Ended June 30
2003 2002
-----------------------------------
Revenues:
Equity in earnings of joint venture $ 390 $ 698
Other 204 239
-----------------------------------
Total revenues 594 937
General and administrative expenses 194 346
-----------------------------------
Operating income 400 591
Other income - gain on sale of assets - 460
-----------------------------------
Income before provision for income taxes 400 1,051
Provision for income taxes 140 375
-----------------------------------
Net income $ 260 $ 676
===================================
Earnings per common share:
Basic $ 0.04 $ 0.09
===================================
Diluted $ 0.04 $ 0.09
===================================
Weighted average number of shares outstanding
Basic 6,843,000 7,208,000
Diluted 6,972,000 7,409,000
See accompanying notes to condensed consolidated financial statements
2
NEVADA CHEMICALS, INC.
Condensed Consolidated Statements of Income
(In Thousands, Except Share and Per Share Amounts)
(Unaudited)
Six Months Ended June 30
2003 2002
-----------------------------------
Revenues:
Equity in earnings of joint venture $ 873 $ 1,047
Other 391 432
-----------------------------------
Total revenues 1,264 1,479
General and administrative expenses 373 561
-----------------------------------
Operating income 891 918
Other income - gain on sale of assets - 460
-----------------------------------
Income before provision for income taxes 891 1,378
Provision for income taxes 312 494
-----------------------------------
Net income $ 579 $ 884
===================================
Earnings per common share:
Basic $ 0.08 $ 0.12
===================================
Diluted $ 0.08 $ 0.12
===================================
Weighted average number of shares outstanding
Basic 6,951,000 7,209,000
Diluted 7,078,000 7,361,000
See accompanying notes to condensed consolidated financial statements
3
NEVADA CHEMICALS, INC.
Condensed Consolidated Statements of Cash Flows
(In Thousands)
(Unaudited)
Six Months Ended June 30
2003 2002
-----------------------------------
Cash flows from operating activities:
Net income $ 579 $ 884
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation and amortization 5 21
Equity in earnings of joint venture (873) (1,047)
Gain on sale of assets - (460)
Bad debt expense - 125
Changes in assets and liabilities:
Receivables (10) 466
Prepaid expenses (1) -
Other assets (1) (35)
Accounts payable and accrued expenses (206) (186)
-----------------------------------
Net cash used in operating activities (507) (232)
-----------------------------------
Cash flows from investing activities:
Distributions from joint venture 1,000 1,000
Net sales (purchases) of short-term investments 2,302 (2,719)
Increase in note receivable - related party - (1,000)
Payments of notes receivable 59 733
Proceeds from sale of assets - 460
-----------------------------------
Net cash provided by (used in)
investing activities 3,361 (1,526)
-----------------------------------
Cash flows from financing activities:
Purchase of treasury stock (783) (3)
Cash dividends paid (340) -
-----------------------------------
Net cash used in financing activities (1,123) (3)
-----------------------------------
Net increase (decrease) in cash 1,731 (1,761)
Cash and cash equivalents, beginning of period 6,612 7,011
-----------------------------------
Cash and cash equivalents, end of period $ 8,343 $ 5,250
===================================
See accompanying notes to condensed consolidated financial statements
4
NEVADA CHEMICALS, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
NOTE 1. BASIS OF PRESENTATION
The interim financial information of Nevada Chemicals, Inc. (the
"Company") for the three-month and six-month periods ended June 30, 2003 and
June 30, 2002 included herein is unaudited, and the balance sheet as of December
31, 2002 is derived from audited financial statements. These condensed
consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in the United States for interim
financial statements. Accordingly, they do not include all the information and
disclosures normally required by accounting principles generally accepted in the
United States for complete financial statements. Such financial information
reflects all adjustments, which are, in the opinion of management, necessary for
a fair presentation of results for the interim periods. These adjustments are of
a normal recurring nature.
The results of operations for the six-month period ended June 30, 2003
are not necessarily indicative of the results to be expected for the full year.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
Cash and Cash Equivalents - For purposes of the statement of cash
flows, cash includes all cash and investments with original maturities to the
Company of three months or less.
Short-Term Investments - Investments with scheduled maturities greater
than three months but not greater than one year are recorded as short-term
investments. These investments at June 30, 2003 consisted primarily of
certificates of deposit classified by management as available for sale, and are
recorded at fair value with net unrealized gains or losses reported within
stockholders' equity. Realized gains and losses are included in the statements
of income.
NOTE 3. INVESTMENT IN JOINT VENTURE
The Company, through its wholly owned subsidiary, Winnemucca Chemicals,
Inc., has a fifty percent interest in Cyanco Company ("Cyanco"), a non-corporate
joint venture engaged in the manufacture and sale of liquid sodium cyanide. The
Company accounts for its investment in Cyanco using the equity method of
accounting. Summarized financial information for Cyanco is as follows (amounts
in thousands):
Three Months Ended Six Months Ended
June 30 June 30
2003 2002 2003 2002
---- ---- ---- ----
Revenues $ 6,417 $ 7,415 $ 12,870 $ 13,311
Costs and expenses 5,637 6,018 11,124 11,217
Net income before taxes 779 1,397 1,746 2,094
Company's equity in earnings 390 698 873 1,047
5
NOTE 4. PURCHASE AND RETIREMENT OF COMMON STOCK
In November 2001, the Company's Board of Directors authorized a stock
repurchase plan that provides for the purchase of up to 500,000 shares of the
Company's currently issued and outstanding shares of common stock. Purchases
under the stock repurchase plan may be made from time to time at various prices
in the open market, through block trades or otherwise. These purchases may be
made or suspended by the Company from time to time, without prior notice, based
on market conditions or other factors.
During the six-month period ended June 30, 2003, the Company purchased
and retired 251,224 shares of its common with a total cost basis to the Company
of $783,000. During the six month period ended June 30, 2002, the Company
purchased and retired 1,800 shares of its common stock with a total cost basis
to the Company of $3,000.
During the six-month period ended June 30, 2002, the Company retired
101,411 shares of treasury stock with a cost basis to the Company of $571,000.
These shares had been acquired in November 2001 from former employees in
connection with the sale of the Company's explosives business.
NOTE 5. DIVIDENDS
In June 2003, the Company paid a cash dividend of $.05 per share on a
total of 6,807,919 outstanding shares, for an aggregate of $340,000.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Overview
The Company's operations consist primarily of the Company's
proportionate share of the operating results from its 50% interest in Cyanco
Company, a non-corporate joint venture, management fee income from Cyanco,
investment income earned on cash and cash equivalents and short-term
investments, and corporate overhead, costs and expenses. Since the Company does
not own more than 50% of Cyanco, the financial statements of Cyanco are not
consolidated with the financial statements of the Company. Summarized financial
information for Cyanco for the three-month and six-month periods ended June 30,
2003 and 2002 is presented in Note 3 to the Company's unaudited condensed
consolidated financial statements.
In March 2002, Cyanco announced that it had reached an agreement with
FMC Corporation ("FMC") to purchase its customer contracts and certain
distribution and storage assets related to FMC's sodium cyanide business. As a
result of this transaction, FMC exited the business, ending its role as a
supplier of sodium cyanide to the Nevada gold mining industry. Cyanco began
supplying customers under the FMC contracts in April 2002. The results of
operations for the six months ended June 30, 2002 reflect the acquired
operations for the period subsequent to the acquisition.
6
Results of Operations
Three Months Ended June 30, 2003
- --------------------------------
Cyanco revenues decreased $998,000, or 13%, in the three months ended
June 30, 2003 compared to the three months ended June 30, 2002. The decrease in
revenues during the quarter is due to lower sales prices in the current year
resulting from market pressures and due to certain customers decreasing
purchases during scheduled maintenance of mining facilities in 2003. Cyanco
costs and expenses decreased $381,000, or 6%, in the three months ended June 30,
2003 compared to the three months ended June 30, 2002. Total costs and expenses
decreased as a result of lower Cyanco revenues. However, total costs and
expenses increased as a percentage of revenues due to such costs and expenses
being spread over a smaller revenue base and due to the increase in the cost of
certain key raw material costs compared to the same period of last year. As a
result, Cyanco net income before taxes decreased $618,000, or 44%, during the
three months ended June 30, 2003 compared to the three months ended June 30,
2002. Similarly, the Company's equity in earnings of Cyanco decreased $308,000
or 44%.
Other revenues decreased $35,000, or 15%, in the three months ended
June 30, 2003 compared to the three months ended June 30, 2002. The decrease is
due primarily to the sale of the Company's office building in November 2002.
Rental income for the three months ended June 30, 2002 was $35,000.
General and administrative expenses decreased $152,000, or 44%, in the
three months ended June 30, 2003 compared to the three months ended June 30,
2002 primarily due to the bad debt expense recorded by the Company in the three
months ended June 30, 2002. During the second quarter of 2002, the Company
recorded $125,000 in bad debt expense. In the three months ended June 30, 2003,
the Company recovered $16,000 of the bad debts, which was recorded as a
reduction of general and administrative expenses. General and administrative
expenses also decreased in the current year second quarter due to the
elimination of operating expenses and depreciation expense of the office
building sold in November 2002.
Other non-operating income for the three months ended June 30, 2002 of
$460,000 consists of the net cash proceeds to the Company from the sale of the
assets of its West Africa joint venture in June 2002.
Six Months Ended June 30, 2003
- ------------------------------
Cyanco revenues decreased $441,000, or 3%, in the six months ended June
30, 2003 compared to the six months ended June 30, 2002. The decrease in
revenues is due to lower sales prices in the current year resulting from market
pressures and due to certain customers decreasing purchases during scheduled
maintenance of mining facilities in 2003. These decreases in revenues were
partially offset by increased revenues from the additional volume of sodium
cyanide supplied by Cyanco to customers under contracts acquired from FMC in
April 2002. Cyanco costs and expenses remained at essentially the same level in
the six months ended June 30, 2003 compared to the six months ended June 30,
2002. Total costs and expenses increased as a percentage of revenues, however,
due to such costs and expenses being spread over a smaller revenue base and due
to the increase in the cost of certain key raw material costs compared to the
same period of last year. As a result, Cyanco net income before taxes decreased
$348,000 or 17%, during the six months ended June 30, 2003 compared to the six
months ended June 30, 2002. Similarly, the Company's equity in earnings of
Cyanco decreased $174,000 or 17%.
7
Other revenues decreased $41,000, or 9%, in the six months ended June
30, 2003 compared to the six months ended June 30, 2002. The decrease is due
primarily to the reduction in rental income as a result of the sale of the
Company's office building in November 2002. Rental income for the six months
ended June 30, 2002 was $70,000.
General and administrative expenses decreased $188,000 or 34%, in the
six months ended June 30, 2003 compared to the six months ended June 30, 2002.
Of this decrease, $125,000 relates to the bad debt expense recorded by the
Company during the six months ended June 30, 2002. In the six months ended June
30, 2003, the Company recovered $28,000 of the bad debts, which was recorded as
a reduction of general and administrative expenses. Also, $32,000 of the
decrease is due to the elimination of operating expenses and depreciation
expense associated with the office building sold in November 2002.
Other non-operating income for the six months ended June 30, 2002 of
$460,000 consists of the net cash proceeds to the Company from the sale of the
assets of its West Africa joint venture in June 2002. After elimination of the
gain associated with the sale of these assets, net of income taxes, the net
income for the six months ended June 30, 2002 is comparable to the net income
for the six months ended June 30, 2003.
Liquidity and Capital Resources
At June 30, 2003, the liabilities of the Company consisted of current
liabilities and deferred income taxes. Current liabilities at June 30, 2003
consisted of accounts payable and accrued expenses totaling $951,000, comprised
primarily of accrued income taxes. These current liabilities compare favorably
to total current assets of $10,456,000 as of June 30, 2003. Current assets are
comprised primarily of cash and cash equivalents of $8,343,000 and short-term
investments that are available for sale of $1,681,000.
Cash in excess of short-term operating needs has been invested
primarily in interest bearing investment accounts with maturities ranging from
30 days to one year. The Board of Directors of the Company is currently
evaluating alternative uses for the cash of the Company, including continuing a
stock buy-back program, optimizing short-term investment results,
diversification of the Company's business, further investment in Cyanco,
dividends to shareholders and other strategies.
Net cash used in operating activities for the six months ended June 30,
2003 was $(507,000) compared to net cash used in operating activities of
$(232,000) for the six months ended June 30, 2002. The increase in cash used in
operating activities during the first six months of 2003 is primarily due to the
collection of receivables during the first six months of 2002 and due to the
decrease in net income for the six months ended June 30, 2003 compared to the
six months ended June 30, 2002 as further discussed above.
Net cash provided by investing activities for the six months ended June
30, 2003 was $3,361,000 compared to net cash used in investing activities of
$(1,526,000) for the six months ended June 30, 2002. During the first six months
of 2003, the Company received a $1,000,000 distribution from Cyanco, $2,302,000
net proceeds from the sale of short-term investments and $59,000 from the
collection of notes receivable. The use of cash in the first six months of 2002
is attributable to purchases of short-term investments of $2,719,000 and an
advance to Cyanco of $1,000,000, offset by the receipt of a $1,000,000
distribution from Cyanco, and $733,000 from the collection of notes receivable
and $460,000 in proceeds from the sale of assets. The advance to Cyanco was
repaid with interest within a period of two months.
8
Net cash used in financing activities for the six months ended June 30,
2003 and 2002 included $(783,000) and $(3,000), respectively, used to purchase
and retire shares of the Company's common stock. Net cash used in financing
activities for the six months ended June 30, 2003 also included $(340,000) used
to pay cash dividends to shareholders.
The Company has retained all contingent liabilities relating to an
ongoing audit by the Canada Customs and Revenue Agency (CCRA) of previously
filed tax returns in Canada. In the initial phase of the audit, CCRA has taken a
position on certain matters different than that taken by the Company. The
Company, based on consultation with its professional tax advisors in Canada,
believes that the facts and circumstances support the position taken by the
Company and continues discussions and negotiations with CCRA. The Company
believes that amounts accrued and included in accounts payable and accrued
expenses at June 30, 2003 are adequate for the resolution of the audit by CCRA.
However, there can be no assurance that such costs will not exceed the current
estimate.
The Company considers its cash resources sufficient to meet the
operating needs of its current level of business for the next twelve months.
Forward Looking Statements
Within this Quarterly Report on Form 10-Q, there are forward-looking
statements made in an effort to inform the reader of management's expectation of
future events. These expectations are subject to numerous factors and
assumptions, any one of which could have a material effect on future results.
The factors which may impact future operating results include, but are not
limited to, decisions made by Cyanco's customers as to the continuation,
suspension or termination of mining activities in the area served by Cyanco,
changes in world supply and demand for commodities, particularly gold and
energy-related raw materials such as natural gas, ammonia, caustic soda and
electricity; the Company's ability to successfully compete in its marketplace;
political, environmental, regulatory, economic and financial risks; major
changes in technology which could affect the mining industry as a whole or which
could affect sodium cyanide specifically; and the continued availability of
qualified technical and other professional employees of the Company and Cyanco.
The Company believes it is taking appropriate actions in order to address these
and other factors previously disclosed; however, some of the risks are outside
the control of the Company, and the actions taken by the Company may not be
sufficient to avoid the adverse consequences of one or more of the risks.
Consequently, the actual results could differ materially from those indicated in
the statements made.
Item 3. Quantitative and Qualitative Disclosure About Market Risk
A significant portion of the Company's cash equivalents and short-term
investments bear variable interest rates that are adjusted to market conditions.
Changes in market rates will affect interest earned on these instruments.
However, the Company does not utilize derivative instruments to offset the
exposure to interest rates. The cash equivalents and short-term investments are
placed in a variety of products with different institutions. Changes in the
interest rates are not expected to have a material impact on the Company's
consolidated results of operations.
9
Item 4. Controls and Procedures
(a) Evaluation of disclosure controls and procedures
Based on their evaluations as of a date within 90 days of the filing
date of this report, the principal executive officer and principal financial
officer of the Company have concluded that the Company's disclosure controls and
procedures (as defined in Rules 13a-14(c) and 15d-14(c) under the Securities
Exchange Act) are effective to ensure that information required to be disclosed
by the Company in reports that the Company files or submits under the Securities
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the rules and forms of the SEC.
(b) Changes in internal controls
There were no significant changes in the Company's internal controls
or in other factors that could significantly affect these internal controls
subsequent to the date of their most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
On May 24, 2003, the annual meeting of shareholders was held. The
shareholders voted, either in person or by proxy, to elect five directors to
serve until the next annual meeting of shareholders or until their successors
are elected and duly qualified and to ratify the appointment of Tanner + Co. to
be the Company's independent public accountants for the year ending December 31,
2003. Directors nominated were E. Bryan Bagley, Nathan L. Wade, Dr. John T. Day,
James E. Solomon and M. Garfield Cook. The results of the shareholder vote were
as follows:
Five directors receiving most votes:
Dr. John T. Day 5,683,834
E. Bryan Bagley 5,681,378
M. Garfield Cook 5,678,034
James E. Solomon 5,677,034
Nathan L. Wade 5,675,066
For Against Abstain
Ratification of the appointment of Tanner +
Co. as independent public accountants 5,661,961 7,470 17,106
10
Item 6. Exhibits and Reports on Form 8-K
1. Exhibits
Exhibit 99.1 - Certification Pursuant to 18 U.S.C. Section
1350 as adopted pursuant to Section 906 of the Sarbanes -
Oxley Act of 2002
Exhibit 99.2 - Certification Pursuant to 18 U.S.C. Section
1350 as adopted pursuant to Section 906 of the Sarbanes -
Oxley Act of 2002
Exhibit 99.3 - Press Release Dated July 30, 2003
2. Reports on Form 8-K:
The Company filed a report on Form 8-K dated April 17, 2003
reporting its first quarter 2003 financial results as included
in the Company's press release dated April 17, 2003.
The Company filed a report on Form 8-K dated May 9, 2003
reporting the end on May 14, 2003 of the temporary suspension
of trading of the Company's common stock pursuant to the
completion of the change in the outside administration and
record keeping company for the Nevada Chemicals, Inc. Profit
Sharing 401 (k) Plan.
11
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
NEVADA CHEMICALS, INC.
(Registrant)
July 30, 2003 /s/ John T. Day
- ------------------ ---------------------------------
(Date) John T. Day, President (principal
executive officer)
July 30, 2003 /s/ Dennis P. Gauger
- ------------- ----------------------------------
(Date) Dennis P. Gauger,
Chief Financial Officer (principal
financial and accounting officer)
12
CERTIFICATION PURSUANT TO RULE 13A-14
OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES - OXLEY ACT OF 2002
I, John T. Day, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Nevada
Chemicals, 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 officer 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 officer and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit
committee or 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
13
6. The registrant's other certifying officer 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.
July 30, 2003 /s/ John T. Day
- ------------- ---------------------------------
(Date) John T. Day, President (principal
executive officer)
CERTIFICATION PURSUANT TO RULE 13A-14
OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES - OXLEY ACT OF 2002
I, Dennis P. Gauger, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Nevada
Chemicals, 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 officer 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 officer and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit
committee or 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
14
(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 officer 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.
July 30, 2003 /s/ Dennis P. Gauger
- ------------- ----------------------------------
(Date) Dennis P. Gauger,
Chief Financial Officer (principal
financial and accounting officer)
15