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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 January 31, 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 Number: 0-16787
YOCREAM INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Oregon 91-0989395
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
5858 N.E. 87th Avenue
Portland, Oregon 97220
(Address of Principal Executive (Zip Code)
Office)
(503) 256-3754
(Registrants Telephone number, including area code)
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
The number of shares outstanding of the registrant's common stock, as of
the latest practicable date is:
Class: Common stock outstanding at
March 13, 2003: 2,252,178 shares
YOCREAM INTERNATIONAL, INC.
CONTENTS
Page
PART I FINANCIAL INFORMATION:
Item 1. Financial Statements 3-7
Balance Sheets as of January 31, 2003, 3
(unaudited) and October 31, 2002
Statements of Income for the 4
Three Months ended January 31, 2003
and 2002 (all unaudited)
Statements of Cash Flows for the 5
Three Months ended January 31, 2003
and 2002 (all unaudited)
Notes to Financial Statements 6-7
Item 2. Management's Discussion and Analysis of 7-12
Financial Condition and Results of
Operations
Item 3. Quantitative and Qualitative Disclosures 12
About Market Risk
Item 4. Controls and Procedures 12
PART II OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 13
Item 3. Defaults upon Senior Securities 13
Item 4. Submission of Matters to a Vote of 13
Security Holders
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 13
CERTIFICATIONS 14-15
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
YOCREAM INTERNATIONAL, INC.
BALANCE SHEETS
January 31, October 31,
2003 2002
ASSETS (unaudited)
------------- ------------
Current assets
Cash and cash equivalents $1,247,791 $ 1,528,818
Accounts receivable, net 872,727 900,996
Inventories 2,364,629 2,654,432
Other current assets 436,750 311,227
Income tax receivable 93,591 -
Deferred tax asset 34,600 34,600
---------- -----------
Total current assets 5,050,088 5,430,073
Fixed assets, net 4,297,911 4,385,900
Intangible and other long-term assets, net 563,904 408,964
---------- -----------
$9,911,903 $10,224,937
========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current portion of long-term debt $ 357,831 $ 360,358
Accounts payable 733,409 1,083,954
Income taxes payable - 31,709
Other accrued liabilities 97,555 143,754
--------- -----------
Total current liabilities 1,188,795 1,619,775
Long-term debt, less current portion 956,666 858,167
Deferred tax liability 244,600 243,800
--------- -----------
Total liabilities 2,390,061 2,721,742
--------- -----------
Shareholders' equity
Preferred stock, no par value,
5,000,000 shares authorized
none issued or outstanding - -
Common stock, no par value,
30,000,000 shares authorized;
2,252,178 shares outstanding at
January 2003, and 2,250,178
outstanding at October 2002 4,633,981 4,625,981
Retained earnings 2,887,861 2,877,214
---------- -----------
Net shareholders' equity 7,521,842 7,503,195
---------- -----------
$9,911,903 $10,224,937
========== ===========
The accompanying notes are an integral part of the financial statements.
YOCREAM INTERNATIONAL, INC.
STATEMENTS OF INCOME
(unaudited)
For the three months ended January 31, 2003 and 2002
2003 2002
---------- ----------
Sales $3,869,008 $3,361,716
Cost of sales 2,897,099 2,344,704
---------- ----------
Gross profit 971,909 1,017,012
Selling and marketing expenses 473,156 407,783
General and administrative expenses 474,814 430,883
---------- ----------
Income from operations 23,939 178,346
Other income (expenses)
Interest income 2,164 4,061
Interest expense (9,056) (14,306)
---------- ----------
Income before income taxes 17,047 168,101
Income tax provision 6,400 64,600
---------- ----------
Net income $ 10,647 $ 103,501
========== ==========
Earnings per common share - basic $ .00 $ .05
========== ==========
Earnings per common share - diluted $ .00 $ .05
========== ==========
Shares used in basic earnings per share 2,250,311 2,259,101
========== ==========
Shares used in diluted earnings per share 2,293,806 2,264,281
========== ==========
The accompanying notes are an integral part of the financial statements.
YOCREAM INTERNATIONAL, INC.
STATEMENTS OF CASH FLOWS
For the three months ended January 31, 2003 and 2002
(Unaudited)
2003 2002
---------- -----------
Cash flows from operating activities:
Net income $ 10,647 $ 103,501
Adjustments to reconcile net
income to net cash provided by
(used in) operating activities:
Depreciation and amortization 129,006 132,868
Deferred income taxes 800 15,500
Change in assets and liabilities
Accounts receivable 28,269 353,534
Inventories 289,803 (95,306)
Other assets (281,631) (138,180)
Accounts payable (350,545) (383,145)
Income taxes payable (125,300) (116,260)
Other accrued liabilities (46,199) (43,616)
----------- -----------
Net cash used in
operating activities (345,150) (171,104)
----------- -----------
Cash flows from investing activities:
Expenditures for plant and equipment (39,849) (400,189)
----------- -----------
Net cash used in investing
activities (39,849) (400,189)
----------- -----------
Cash flows from financing activities:
Proceeds from issuance of long-term debt 168,500 156,500
Principal payments on long-term debt (72,528) (85,787)
Proceeds from exercise of stock options 8,000 11,380
Repurchase of common stock - (26,051)
----------- -----------
Net cash provided financing
activities 103,972 56,042
----------- -----------
Net decrease in cash and
equivalents (281,027) (515,251)
Cash and equivalents, beginning of period 1,528,818 1,161,661
----------- -----------
Cash and equivalents, end of period $1,247,791 $ 646,410
=========== ===========
The accompanying notes are an integral part of the financial statement.
YOCREAM INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
Note A - Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Rule 10-01 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments, which consist of
normal recurring accruals, considered necessary for a fair presentation have
been included. Operating results for the quarter ended January 31, 2003 are not
necessarily indicative of the results that may be expected for the year ending
October 31, 2003. For further information, refer to the financial statements
and related footnotes included in the Corporation's annual report on Form 10-K
for the year ended October 31, 2002.
Note B - Change in Accounting Policy - Adoption of SFAS No. 142
In July 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) SFAS No. 142, Goodwill
and Other Intangible Assets. SFAS No. 142 changes the accounting for
goodwill and other identifiable intangibles with indefinite lives from an
amortization method to an impairment-only approach. The Company adopted SFAS
No. 142 and, as a result, amortization of intangibles ceased in the first
quarter of fiscal 2003. Had SFAS No. 142 been applied in the three months
ended January 31, 2002, depreciation and amortization would have been
reduced by approximately $2,500 and net income would have been increased to
approximately $105,000, with no change in earnings per share of $.05 per
share.
Note C - Inventories
Inventories consist of the following:
January 31, October 31,
2003 2002
---------- ----------
Finished goods $1,658,715 $1,996,415
Raw materials 498,059 412,345
Packaging materials and supplies 207,855 245,672
---------- ----------
$2,364,629 $2,654,432
========== ==========
Note D - Note Payable to Bank
The Company has an uncollateralized bank line of credit, which permits
borrowings of up to $2,000,000. The line bears interest at the banks
commercial lending rate. The line is subject to renewal by July 2003.
There were no borrowings outstanding at January 31, 2003 or October 31, 2002.
During the three months ended January 31, 2003, the Company borrowed the
remaining $168,500 under a $350,000 term loan facility with its bank. The
agreement provides for payments over five years with interest payable at a rate
equal to the 30-day LIBOR rate plus 200 basis points, and is secured by the
related equipment.
Note E - Earnings per share
Earnings per share are calculated as follows for the three months ended
January 31, 2003 and 2002:
Three Months Ended January 31, 2003
-----------------------------------
Net Earnings Shares Per-Share
(Numerator) (Denominator) Amount
------------ ------------- ---------
Basic earnings per share:
Net earnings $ 10,647 2,250,311 $ .00
Effect of dilutive securities 43,495 -
-------- --------- -------
Diluted earnings per share $ 10,647 2,293,806 $ .00
======== ========= =======
Three Months Ended January 31, 2002
-----------------------------------
Net Earnings Shares Per-Share
(Numerator) (Denominator) Amount
------------ ------------- ---------
Basic earnings per share:
Net earnings $103,501 2,259,101 $ .05
Effect of dilutive securities 5,180 -
-------- --------- -------
Diluted earnings per share $103,501 2,264,281 $ .05
======== ========= =======
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The following discussion includes forward-looking statements within the meaning
of the "safe-harbor" provisions of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements are based on the beliefs of the
Company's management and on assumptions made by and information currently
available to management. All statements other than statements of historical
fact, regarding the Company's financial position, business strategy and plans
and objectives of management for future operations of the Company are forward-
looking statements. When used herein, the words "anticipate," "believe,"
"estimate," "expect," and "intend" and words or phrases of similar meaning, as
they relate to the Company or management, are intended to identify forward-
looking statements. Although the Company believes that the expectations
reflected in such forward-looking statements are reasonable, it can give no
assurance that such expectations will prove to have been correct. Forward-
looking statements are subject to certain risks and uncertainties, which could
cause actual results to differ materially from those, indicated by the forward-
looking statements. These risks and uncertainties include the Company's
ability to maintain or expand its distribution abilities, including the risk of
disruptions in the transportation system and relationships with brokers and
distributors. Further, actual results may be affected by the Company's ability
to compete on price and other factors with other manufacturers and distributors
of frozen dessert products; customer acceptance of new products; general trends
in the food business as they relate to customer preferences for the Company's
products; and the Company's ability to obtain raw materials and produce
finished products in a timely manner, as well as its ability to develop and
maintain its co-packing relationships and strategic alliances. In addition,
there are risks inherent in dependence on key customers, the loss of which
could materially adversely affect the Company's operations. The reader is
advised that this list of risks is not exhaustive and should not be construed
as any prediction by the Company as to which risks would cause actual results
to differ materially from those indicated by the forward-looking statements.
Results of Operations
The primary business of the Company is the manufacture, marketing and sales of
superior quality frozen yogurt, frozen custard, sorbet, smoothie, coffee latte
and ice cream products in a variety of premium, low-fat, and nonfat flavors in
either non-organic or organic formulations. The Company also copacks similar
products for other companies. Because of the nature of these products, sales
are subject to seasonal fluctuations, with the summer months normally being the
busiest season. The introduction and roll out of new products has tended to
level the seasonal fluctuations.
Sales
For the three months ended January 31, 2003, sales increased 15.1% over the
same period in 2002 primarily as a result of increased sales of new products,
which include a soft frozen custard, a gourmet ice cream, and an aseptic coffee
latte` freeze product. The breakdown of sales by product for both periods is
as follows:
% % Dollar %
Category 2003 Total 2002 Total Increase Increase
- -------- ---------- ----- ---------- ----- -------- --------
Yogurt $1,856,000 48.0% $1,791,000 53.3% $ 65,000 3.6%
Smoothies 1,321,000 34.1% 1,365,000 40.6% (44,000) (3.2)%
Coffee Latte 361,000 9.3% 132,000 3.9% 229,000 173.5%
Custard and 272,000 7.0% 19,000 .6% 253,000 NA
Ice Cream
Copacking 59,000 1.5% 55,000 1.6% 4,000 7.3%
---------- ---- --------- ------ ------- ------
Total $3,869,000 100% $3,362,000 100% $507,000 15.1%
========== ==== ========== ====== ======== ======
Sales of frozen yogurt and smoothie products were affected by the severe
weather conditions that dominated the eastern and mid western portions of the
country during the first quarter of fiscal 2003. Sales are expected to
increase as the busier summer season approaches and as weather improves. The
movement of troops to the Middle East also impacted foodservice yogurt product
sales to military installations in the United States during that period.
Comparatively, these mature products have higher gross margins than our newer
products, and therefore, the lack of normal sales growth from these products
during the first quarter of 2003 impacted our gross margins for the quarter.
Coffee latte` freeze is an aseptic product developed for Costco Wholesale. The
dramatic increase in sales of this product relates its accelerated rollout.
The Company first introduced this product as a frozen liquid mix. Because of
the significant demand for this product, the Company responded to the needs of
its customer and developed its current aseptically packaged product in the
third quarter 2002. Since its inception, the rollout progressed, at a slower
rate than originally expected, but gained substantial momentum in the first
quarter of 2003. In addition to the expensive ingredients in this high quality
product, the Company has also incurred a significant level of additional
production costs to provide the aseptic product, without the ability to pass
these costs on to the customer. To improve operating results, the Company is
currently analyzing its costs to identify savings opportunities. Furthermore
as the demand for the aseptic product increases, the Company expects its cost
of producing this product to decrease, thus increasing its gross margin on this
product.
Soft frozen custard and gourmet softened ice cream represent new products that
were introduced last year. In June 2002, the Company began shipments of a new
soft frozen custard product to Runza Restaurants, which is a Nebraska-based
chain of 64 restaurants. In the third quarter of 2002, the Company also began
supplying gourmet softened ice cream, which was developed especially for
Tullys Coffee a Seattle based chain of 63 specialty coffee shops. To respond
to the demand for frozen novelty products, the Company has also developed a
line of custard cups available in a 4-ounce hard pack single serving size. In
the first quarter of 2003, the Company began initial distribution of this new
product to distributors that supply the military, which should augment sales on
military installations during fiscal 2003.
In October 2001, the Company announced that the alliance with The Dannon
Company was expanded, beyond merely selling yogurt to Dannons foodservice
customers, to include a co-branded line of soft serve frozen yogurt. This top-
quality product line carries the Dannon / YoCream label and includes more than
forty flavors of soft serve frozen yogurt. This co-branded line using YoCream
formulas that include nonfat, lowfat, and no-sugar-added flavors, was made
available through food service distributors in mid-2002. The strength of the
Dannon name along with YoCreams concentration on the foodservice or on-premise
marketplace is expected to offer significant opportunities for increased sales
and market share. Management believes that the two companies are similar in
philosophy, and both companies yogurt products are known for their high live
culture count, with an emphasis on product quality and appeal to consumers with
concerns for health and nutrition.
Another important step was recently taken with the Dannon/Yocream alliance.
The sales teams, while remaining distinct, have bundled the products of both
companies for a unified presentation to the away from home (food service)
marketplace. Management believes that this unique arrangement will offer
significant competitive advantages to both companies.
Following the Companys historical trend of developing innovative, high quality
products that are designed to delight the consumer, the Company recently
announced its newest product line of soy based frozen desserts. These unique
products are dairy free, all natural, vegan and cultured. The positive
response to initial sampling has been outstanding, and the line is scheduled
for distribution this spring.
Gross Profit
The gross profit margin, as a percentage of sales, was 25.1% and 30.3% for the
first quarter of 2003 and 2002, respectively. The first quarter 2003 gross
profit margin was approximately the same as the 25.7% margin for the fourth
quarter 2002 and slightly less than the 28.3% margin for the fiscal year 2002.
The decrease in the gross profit margin was due to several factors, including
the increased costs associated with introducing the new aseptic coffee latte`
freeze product and the effects of the severe weather conditions in certain
parts of the United States on the sales of higher gross margin products.
Margins are expected to improve for various reasons, including the effect of
volume increases during the busier season of the year. The Company continues to
analyze its costs to identify savings opportunities and is aggressively
pursuing opportunities to reduce ingredient, packaging, logistics, and
production costs, which will improve margins. Progress has already been made
in reducing some ingredient and logistics costs. The Company is also involved
in implementing a federally funded total quality management program, which is
expected to further improve the skills of its workforce and generate operating
efficiencies.
Selling and Marketing Expenses
Selling and marketing expenses for the first quarter of 2003 remained
approximately the same, as a percentage of sales, increasing minimally from
12.1% to 12.2% of sales. The dollar increase was primarily due to additional
personnel and promotional expenses.
General and Administrative Expenses
General and administrative expenses for the first quarter of 2003 decreased as
a percentage of sales from 12.8% to 12.3% of sales for the quarter. The
decrease as a percentage of sales was primarily due to sales growth.
Income from Operations
As a percentage of sales, income from operations was .6% for the first quarter
of 2003 compared to 5.3% for the same period in 2002. This is primarily due to
the increase in sales during the quarter of new products as explained above,
and the weather related impact on sales of the higher margin products sold in
certain parts of the country.
Provision for Income Taxes
The effective tax rate was 37.4% and 38.4% for the first quarter of 2003 and
2002, respectively. The effective rate in 2003 is the same as the rate for the
full year 2003, and reflects a similar level of research and development
activity.
Net Income
Although net income in the current quarter was substantially less than in the
same period last year, as explained above, management expects that net income
will increase over the prior year as sales volumes of the higher margin
products increase to normal levels with warmer weather, and as more of the
benefits of the Companys cost reduction measures are realized.
Liquidity and Capital Resources
In recent years, the Company has financed its operations and expansion from
bank loans, operating leases, capital leases, stock sales, and internally
generated funds.
As of January 31, 2003, there were no borrowings under the Companys $2 million
bank line of credit. The line of credit remains in place and permits
borrowings subject to the Company being in compliance with certain ratios and
negative covenants. Interest on the line of credit is at the bank's basic
commercial lending rate. During the first quarter of 2003 the Company
completed borrowings of $168,500 under the terms of a secured term loan
agreement.
EBITDA (earnings before interest, taxes and depreciation) was approximately
$153,000 in the first quarter of 2003 compared with $311,000 in the first
quarter of 2002, as a result of the decrease in income from operations
explained above.
Expenditures for plant and equipment of approximately $40,000 in the first
quarter of 2003 were significantly less than the $400,000 spent in the same
period last year.
The Company is in the process of evaluating its capital expenditure plans for
fiscal 2003, which could include the cost of a high acid aseptic packaging
system for the smoothie product that the Company is currently producing, and
other production equipment purchases.
The Company follows the practice of repurchasing its common stock from time to
time. There were no repurchases in the first quarter of 2003, while
repurchases during the first quarter of 2002 amounted to approximately $26,000.
The Company believes its existing assets, bank lines, and revenues from
operations will be sufficient to fund the Companys operations for at least the
next twelve months.
New Accounting Pronouncements
See Note B of Notes to Financial Statements for a discussion of the adoption of
new accounting pronouncements.
SFAS No. 144
In October 2001, the FASB issued SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets, which addresses financial
accounting and reporting for the impairment or disposal of long-lived
assets. SFAS No. 144 becomes effective for fiscal years beginning after
December 15, 2001. The adoption of SFAS No. 144 in the first quarter of
fiscal 2003 did not have any effect on the Companys financial position,
cash flows or results of operations.
Critical Accounting Policies and Estimates
The critical accounting policies and the use of estimates as reported in the
Companys Form 10-K for the year ended October 31, 2002 are reaffirmed.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Ingredients used in the Companys products are agricultural products subject to
price risk. The Company attempts to minimize this risk by entering into
contracts to cover its annual production requirements. During fiscal year 2001
when certain contracts matured, the Company experienced significant increases
in the costs of vanilla, cocoa, and liquid sugar. Competitive conditions limit
the ability to pass on these costs. However, the Company has embarked upon an
aggressive program to reduce costs and create efficiencies which management
believes will be successful in increasing margins to normal levels.
At January 31, 2003, borrowings outstanding under secured term loan facilities
with its bank amounted to approximately $1,315,000. The facilities bear
interest at a rate equal to the 30-day LIBOR rate plus 200 basis points (3.34%
at January 31, 2003), with the option to fix the rate during the term. A
hypothetical increase of 200 basis points in the interest rate would increase
interest expense by approximately $21,000 in the next year, if the rate were
not fixed by entering into an interest rate swap.
The Company does not currently use derivative securities.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Companys Chief Executive Officer and Chief Financial Officer have
reviewed and evaluated the effectiveness of our disclosure controls and
procedures, as defined in Rules 240.13a-14(c) and 15d-14(c) under the
Securities Exchange Act of 1934 (Exchange Act), as of a date within ninety
days before the filing date of this quarterly report. Based on that
evaluation, the Chief Executive Officer and the Chief Financial Officer have
concluded that the Companys disclosure controls and procedures are adequate
and effective to ensure that information that the Company is required to
disclose under the Exchange Act is recorded, processed, summarized and
reported on a timely basis.
Changes in Internal Controls
There have not been any significant changes in the Companys internal
controls or in other factors that could significantly affect these controls
subsequent to the date of their evaluation, including any corrective actions
with regard to significant deficiencies and material weaknesses.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not involved in any material pending legal proceedings.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to Vote of Security Holders
None.
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
A. Exhibits
99.1 Certification of John N. Hanna pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
99.2 Certification of W. Douglas Caudell pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
B. Reports on Form 8-K - not applicable
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.
Registrant:
YOCREAM INTERNATIONAL, INC.
Date: March 17, 2003 By: /s/ John N. Hanna
-------------------------
John N. Hanna, Chairman of the
Board, and Chief Executive
Officer
Date: March 17, 2003 By: /s/ W. Douglas Caudell
----------------------------
W. Douglas Caudell, Chief
Financial Officer
CERTIFICATION PURSUANT TO
SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002
I, John N. Hanna, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Yocream
International, 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 registrants 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 registrants 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 registrants other certifying officer and I have disclosed, based
on our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to
record, process, summarize and report financial data and have identified
for the registrants 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 registrants
internal controls; and
6. The registrants 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.
Date: March 17, 2003 By: /s/ John N. Hanna
-------------------------
John N. Hanna, Chairman of the
Board, and Chief Executive
Officer
CERTIFICATION PURSUANT TO
SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002
I, W. Douglas Caudell, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Yocream
International, 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 registrants 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 registrants 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 registrants other certifying officer and I have disclosed, based
on our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants 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 registrants internal
controls; and
6. The registrants 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.
Date: March 17, 2003 By: /s/ W. Douglas Caudell
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W. Douglas Caudell, Chief
Financial Officer