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Securities and Exchange Commission
Washington, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2004
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 0-19761
OP-TECH Environmental Services, Inc.
(Exact name of registrant as specified in its charter)
Delaware 91-1528142
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6392 Deere Road, Syracuse, NY 13206
(Address of principal executive offices) (Zip Code)
(315) 463-1643
(Registrant's 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 or No
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act)
Yes or No X
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of April 30, 2004: 11,609,378
1.
OP-TECH Environmental Services, Inc. and Wholly-Owned Subsidiaries
INDEX
PART I. FINANCIAL INFORMATION Page No.
Item 1. Financial Statements
Consolidated Balance Sheets
-March 31, 2004 (Unaudited) and December 31, 2003 (Audited) 3
Consolidated Statements of Operations
-Three months ended March 31, 2004 and March 31, 2003 (Unaudited) 4
Consolidated Statements of Cash Flows
-Three months ended March 31, 2004 and March 31, 2003 (Unaudited) 5
Notes to Consolidated Financial Statements (Unaudited) 6-9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10-13
Item 3. Quantitative and Qualitative Disclosure About Market Risk 14
Item 4. Controls and Procedures 15
PART II. OTHER INFORMATION 16
SIGNATURES 17
CERTIFICATIONS 18
2.
ITEM #1 FINANCIAL STATEMENTS PART I FINANCIAL INFORMATION
OP-TECH ENVIRONMENTAL SERVICES, INC. AND WHOLLY-OWNED SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
March 31, December 31,
2004 2003
---------- ------------
ASSETS
Current Assets:
Cash $- $58,073
Accounts receivable (net of allowance for
doubtful accounts of approximately $180,000
and $187,000, respectively) 2,851,620 3,386,795
Costs on uncompleted projects applicable
to future billings 632,603 638,513
Inventory 177,377 219,568
Current portion of deferred tax asset 45,500 45,500
Prepaid expenses and other current assets, net 291,215 281,110
--------- ---------
Total Current Assets 3,998,315 4,629,559
Property and equipment, net 3,265,848 2,989,827
Deferred tax asset 1,525,500 1,473,500
Other assets 28,919 31,419
--------- ---------
Total Assets $8,818,582 $9,124,305
========== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $630,100 $864,484
Billings in excess of costs and estimated profit
on uncompleted projects 644,212 716,351
Accrued expenses and other current liabilities 196,890 368,006
Current portion of long-term debt 920,114 901,336
-------- ----------
Total Current Liabilities 2,391,316 2,850,177
Long-term debt, net of current portion 1,916,220 1,510,547
Note payable to bank under line of credit 1,836,503 1,744,473
--------- ----------
Total Liabilities 6,144,039 6,105,197
--------- ----------
Shareholders' Equity:
Common stock, par value $.01 per share;
authorized 20,000,000 shares; 11,609,378
and 12,606,045 shares issued and outstanding
as of March 31, 2004 and December 31, 2003,
respectively 116,094 126,060
Additional paid-in capital 6,814,147 7,053,848
Accumulated deficit (4,255,698) (4,160,800)
----------- -----------
Total Shareholders' Equity 2,674,543 3,019,108
----------- -----------
Total Liabilities and Shareholders' Equity $8,818,582 $9,124,305
========== ===========
The accompanying notes are an integral part of the consolidated financial
statements.
3.
ITEM #1 FINANCIAL STATEMENTS PART I FINANCIAL INFORMATION
OP-TECH ENVIRONMENTAL SERVICES, INC. AND WHOLLY-OWNED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED
March 31, March 31,
2004 2003
------------ ------------
Project billings and services $3,262,062 $3,316,218
Project costs 2,167,776 2,271,679
---------- ----------
Gross margin 1,094,286 1,044,539
---------- ----------
Operating expenses:
Payroll expense and related payroll taxes
and benefits 637,226 589,404
Depreciation 133,574 101,509
Professional Services 104,877 97,168
Occupancy 98,108 97,377
Office Expense 74,369 70,258
Business Insurance 66,285 52,933
Telephone 39,669 36,343
Other expenses, net 44,965 36,052
---------- ----------
1,199,073 1,081,044
---------- ----------
Operating income (loss) (104,787) (36,505)
---------- ----------
Other income and (expense):
Interest expense (42,103) (45,068)
Other, net (8) (3,194)
---------- ----------
(42,111) (48,262)
---------- ----------
Net income (loss) before income taxes (146,898) (84,767)
Income tax benefit (expense) 52,000 -
---------- ----------
Net income (loss) $(94,898) $(84,767)
========== ===========
Earnings per common share:
Basic and diluted $(0.008) $(0.006)
Weighted average shares outstanding:
Basic 12,419,305 15,318,787
Diluted 12,419,305 15,318,787
The accompanying notes are an integral part of the consolidated financial
statements.
4.
ITEM #1 FINANCIAL STATEMENTS PART I FINANCIAL INFORMATION
OP-TECH ENVIRONMENTAL SERVICES, INC. AND WHOLLY-OWNED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
THREE MONTHS ENDED
March 31, March 31,
2004 2003
----------- -----------
Operating activities:
Net income (loss) $(94,898) $(84,767)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Bad debt expense 1,875 26,311
Depreciation and amortization 136,075 107,958
Provision for deferred income taxes (52,000) -
(Increase) decrease in operating assets and
increase (decrease) in operating liabilities:
Accounts receivable 533,300 1,205,368
Costs on uncompleted projects applicable to
future billings 5,910 (1,538)
Billings and estimated profit in excess of costs
on uncompleted contracts (72,139) (42,219)
Prepaid expenses, inventory and other assets 32,086 45,511
Accounts payable and accrued expenses (405,500) (1,076,093)
----------- -----------
Net cash provided by operating activities 84,709 180,531
----------- -----------
Investing activities:
Purchase of property and equipment (409,595) (138,850)
----------- -----------
Net cash used in investing activities (409,595) (138,850)
----------- -----------
Financing activities:
Proceeds from issuance of common stock 333 -
Purchase of common stock (250,000) -
Proceeds from note payable to bank and current
and long-term borrowings, net of financing costs 2,525,204 2,376,000
Principal payments on current and long-
term borrowings (2,008,723) (2,417,681)
----------- -----------
Net cash provided by (used in)
financing activities 266,813 (41,681)
----------- -----------
Increase (decrease) in cash (58,073) -
Cash at beginning of period 58,073 -
---------- -----------
Cash at end of period $- $-
========== ===========
Non-cash item
Equipment purchased through bank and other
financing sources $- $104,777
The accompanying notes are an integral part of the consolidated financial
statements.
5.
PART I - FINANCIAL INFORMATION
SPECIAL NOTICE REGARDING FORWARD-LOOKING STATEMENTS
The Company is including the following cautionary statement in this Form 10-Q
to make applicable and take advantage of the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995 for any forward-looking
statement made by, or on behalf of, the Company. This 10-Q, press releases
issued by the Company, and certain information provided periodically in
writing and orally by the Company's designated officers and agents contain
statements which constitute forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. The words expect, believe, goal, plan, intend,
estimate, and similar expressions and variations thereof used are intended to
specifically identify forward-looking statements. Where any such forward-
looking statement includes a statement of the assumptions or basis underlying
such forward-looking statement, the Company cautions that, while it believes
such assumptions or basis to be reasonable and makes them in good faith,
assumed facts or basis almost always vary from actual results, and the
differences between assumed facts or basis and actual results can be material,
depending on the circumstances. Where, in any forward-looking statement, the
Company, or its management, expresses an expectation or belief as to future
results, such expectation or belief is expressed in good faith and believed to
have a reasonable basis, but there can be no assurance that the statement of
expectation or belief will result or be achieved or accomplished.
6.
OP-TECH ENVIRONMENTAL SERVICES, INC.
AND WHOLLY-OWNED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
1. Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America 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 accounting
principles generally accepted in the United States of America for complete
financial statements. In the opinion of management, quarterly results include
all adjustments (consisting of only normal recurring adjustments) that the
Company considers necessary for a fair presentation of such information for
interim periods.
The unaudited financial statements include the accounts of the Company and its
two wholly-owned subsidiaries; OP-TECH Environmental Services, Ltd, an
inactive Canadian company, and OP-TECH AVIX, Inc., a company formed in January
2002 for purposes of pursuing and engaging in diversified lines of business
including asset management services. All material intercompany transactions
and balances have been eliminated in consolidation.
The balance sheet at December 31, 2003 has been derived from the audited
balance sheet included in the Company's annual report on Form 10-K for the
year ended December 31, 2003.
2. Revenue Recognition
The timing of revenues is dependent on the Company's backlog, contract awards,
and the performance requirements of each contract. The Company's revenues are
also affected by the timing of its clients planned remediation work as well as
the timing of unplanned emergency spills. Historically, planned remediation
work generally increases during the third and fourth quarters. Although the
Company believes that the historical trend in quarterly revenues for the third
and fourth quarters of each year are generally higher than the first and
second quarters, there can be no assurance that this will occur in future
periods. Accordingly, quarterly or other interim results should not be
considered indicative of results to be expected for any quarter or for the
full year.
3. Related Party Transactions
The Company purchases subcontract labor services from St. Lawrence Industrial
Services, Inc., which is owned by a director of the Company. The costs for
these services amounted to approximately $133,000 and $361,000 for the three
months ended March 31, 2004 and 2003, respectively.
7.
4. Earnings per Share
Basic earnings per share are computed by dividing net income by the weighted
average shares outstanding. Diluted earnings per share includes the
potentially dilutive effect of common stock equivalents, which include
outstanding options under the Company's Stock Option Plan and warrants that
were issued to a financial advisor in May 2002 to purchase 480,000 shares of
common stock at $0.066 per share, expiring in May 2007.
5. Common Stock
On March 16, 2004 the Company purchased and retired 1,000,000 shares of common
stock from O'Brien & Gere Limited for $.25 per share, or $250,000.
6. Stock Based Compensation
The Company applies APB Opinion 25 and related interpretations in accounting
for its stock option plan. Accordingly no compensation cost was recognized
for non-qualified stock options issued in 2002 and 2003. Had compensation
cost for these options been determined based on their fair value at the grant
date consistent with the method proscribed under Financial Accounting
Standards Board ('FASB') Statement No. 123 'Accounting For Stock-Based
Compensation', the Company's net income (loss) and per share amounts reported
for the quarters ended March 31, 2004 and 2003 would not be materially
different. The Company does not intend to adopt the fair value accounting for
stock based compensation in accordance with FASB Statement No. 148 'Accounting
for Stock-Based Compensation - Transition and Disclosure, an Amendment of FASB
Statement No. 123'.
In March 2004 a holder of options to purchase common stock at $.10 per share
exercised those options resulting in the issuance of 3,333 shares of common
stock.
7. Income Taxes
The Company has recognized a tax benefit of $52,000 in the quarter ended March
31, 2004 as the benefit is expected to be realized during the current year.
8.
8. Financial Information Concerning Segment Reporting
The Company reports its operations principally in two business segments, as
follows:
(1) OP-TECH Environmental Services, Inc. ("OP-TECH") engages in diversified
and comprehensive environmental remediation services for customers located
primarily in the northeastern United States.
(2) OP-TECH AVIX, Inc. ("AVIX"), a subsidiary of OP-TECH, was formed in
January 2002 to pursue and engage in diversified lines of business including
asset management services.
Period ended March 31, 2004
OP-TECH AVIX Total
Project billings and services to
external customers $3,227,640 $34,422 $3,262,062
Intersegment project billings and services - - -
---------- ------- ----------
Total Project billings and services $3,227,640 $34,422 $3,262,062
---------- ------- ----------
Operating earnings (loss) $(110,061) $5,274 $(104,787)
Interest expense (42,103) - (42,103)
Other income (expense), net (8) - (8)
--------- ------ ----------
Earnings (loss) before income taxes $(152,172) $5,274 $(146,898)
---------- ------ ----------
Period ended March 31, 2003
OP-TECH AVIX Total
Project billings and services to
external customers $3,308,362 $7,856 $3,316,218
Intersegment project billings and services - - -
---------- ------- ----------
Total Project billings and services $3,308,362 $7,856 $3,316,218
---------- ------- ----------
Operating earnings (loss) $(25,912) $(10,593) $(36,505)
Interest expense (44,022) (1,046) (45,068)
Other income (expense), net (3,194) - (3,194)
--------- ------ ----------
Earnings (loss) before income taxes $(73,128) $(11,639) $(84,767)
---------- ------- ----------
9.
PART I FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 2004 and 2003, the Company had cash of $0. The Company
voluntarily applies all available cash in the Company's operating account to
pay down the Company's note payable to bank under line of credit.
At March 31, 2004, the Company had working capital of $1,658,999 compared to
$1,779,382 at December 31, 2003, with a current ratio of 1.69 to 1 at March
31, 2004 and 1.62 to 1 at December 31, 2003.
For the three months ended March 31, 2004, the Company's net cash provided by
operations was $84,709 compared to net cash provided by operations of $180,531
during the three months ended March 31, 2003. The cash provided by operations
for the three months ended March 31, 2004 was primarily a result of a net
collection of accounts receivable, partially offset by a paydown of accounts
payable.
The Company's net cash used in investing activities of $409,595 during the
first three months of the year was attributable to the purchase of various
field equipment.
The Company's net cash provided by financing activities was $266,813, which
was primarily due to the net proceeds from the Company's long-term debt as a
result of the financing of the cash used in investing activities.
As of March 31, 2004, the Company had a loan agreement that provided for
borrowings up to $2,200,000 on a revolving basis, collateralized by all
accounts receivable, inventory and equipment now owned or acquired later.
$200,000 of the loan is payable on May 31, 2004 and $2,000,000 of the loan is
payable on May 31, 2005. The loan bears interest at a rate of prime plus 1.25
percent, is subject to certain restrictive financial covenants, and is subject
to default if there is a material adverse change in the financial or economic
condition of the Company. As of March 31, 2004, borrowing against the
revolving loan aggregated $1,836,503.
During the first quarter of 2004, all principal payments on the Company's debt
were made within payment terms.
The Company expects, based on its operating results and the continued
availability of its line of credit, that it will be able to meet obligations
as they come due.
10
RESULTS OF OPERATIONS
BILLINGS
The Company's project billings for the first quarter of 2004 decreased 2% to
$3,262,062 from $3,316,218 for the first quarter of 2003.
When comparing the first three months of 2004 to the same period in 2003, the
slight
decrease in billings is due primarily to one large, $460,000, asbestos
remediation project in the Buffalo, NY area in March 2003, partially offset by
several smaller projects in the first quarter of 2004.
PROJECT COSTS AND GROSS MARGIN
Project costs for the first quarter of 2004 decreased 5% to $2,167,776 from
$2,271,679 for the same period in 2003. Project costs as a percentage of
revenues were 67% and 69% for the three months ended March 31, 2004 and 2003,
respectively. Gross margin for the first quarter of 2004 increased to 33%
from 31% for the same period in 2003.
Both billings and project costs decreased. The increase in the gross margin
is due to improved project management as well as a vendor consolidation
program that has resulted in volume discounts on project material purchases.
OPERATING EXPENSES
Operating expenses for the quarter ended March 31, 2004 increased 11% to
$1,199,073 from $1,081,044 for the same period in 2003. Operating expenses as
a percentage of revenues was 37% and 33% for each of the three month periods
ended March 31, 2004 and 2003, respectively.
When comparing the first quarter of 2004 to 2003, the overall increase in
operating expenses is due primarily to three factors:
- -Payroll expense and related payroll taxes and benefits increased to 20% of
sales during the first quarter of 2004 from 18% of sales in the same period in
2003. During the fourth quarter of 2003 and the first quarter of 2004, new
employees were added in the Cleveland, Albany, Syracuse and Massena
branch offices. Each of these offices added new employees as a result of
increased sales volume and long-term growth plans. As is customary in
adding new employees, it takes approximately six months for a new employee
to meet the company's chargeability goals as set forth in the operating budget.
11
- -Depreciation expense increased 32% to $133,574 when comparing the first
quarter of 2004 to the same period in 2003. This increase in depreciation
expense is due to field equipment additions totaling $950,339 from April 1,
2003 through March 31, 2004.
- -Business insurance increased 25% to $66,285 when comparing the first
quarter of 2004 to the same period in 2003. This increase in insurance
expense is due to the extreme tightening of the insurance market in the United
States that has resulted in large premium increases.
INTEREST EXPENSE
Interest expense for the three months ended March 31, 2004 decreased 7% to
$42,103 from $45,068 for the same period in 2003. Rates paid and average
balances outstanding did not materially change.
NET LOSS BEFORE INCOME TAXES
Due to the factors discussed above, net loss before income taxes amounted to
$146,898 for the three months ended March 31, 2004 compared to a net loss
before income taxes of $84,767 for the same period in 2003.
INCOME TAX BENEFIT
Due to the net loss, the Company recorded an income tax benefit of $52,000 for
the quarter ended March 31, 2004 The Company believes it will realize this
benefit during the current year.
NET LOSS
Net loss for the quarter ended March 31, 2004 and 2003 was $94,898 or $.008
per share basic and diluted, and $84,767, or $.006 per share basic and
diluted, respectively.
12.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Management has identified the following critical accounting policies that
affect the Company's more significant judgments and estimates used in the
preparation of the Company's consolidated financial statements. The
preparation of the Company's financial statements in conformity with
accounting principles generally accepted in the United States of America
requires the Company's management to make estimates and judgments that affect
the reported amounts of assets and liabilities, revenues and expenses, and
related disclosures of contingent assets and liabilities. On an on-going
basis, management evaluates those estimates, including those related to assets
held for sale, revenue recognition, allowance for doubtful accounts and
contingencies and litigation. The Company states these accounting policies in
the notes to the consolidated financial statements and in relevant sections in
this discussion and analysis. These estimates are based on the information
that is currently available to the Company and on various other assumptions
that management believes to be reasonable under the circumstances. Actual
results could vary from those estimates.
The Company believes that the following critical accounting policies affect
significant judgments and estimates used in the preparation of its
consolidated financial statements:
Contracts are predominately short-term in nature (less than three months) and
revenue is recognized as costs are incurred and billed. Income on long-term
fixed-priced contracts greater than three months is recognized on the
percentage-of-completion method. Project costs are generally billed in the
month they are incurred and are shown as current assets. Revenues recognized
in excess of amounts billed are recorded as an asset. In the event interim
billings exceed costs and estimated profit, the net amount of deferred revenue
is shown as a current liability. Estimated losses are recorded in full when
identified.
The Company maintains an allowance for doubtful accounts for estimated losses
resulting from the inability of its customers to make required payments, which
results in bad debt expense. Management determines the adequacy of this
allowance by continually evaluating individual customer receivables,
considering the customer's financial condition, credit history and current
economic conditions. If the financial condition of customers were to
deteriorate, resulting in an impairment of their ability to make payments,
additional allowances may be required.
13.
Item 3. Quantitative and Qualitative Disclosure About Market Risk.
There were no material changes in the Company's market risk or market risk
strategies during the quarter ended March 31, 2004.
14.
Item 4. Controls and Procedures
(a) Disclosure Controls and Procedures.
Within the 90 days before the date of this Form 10-Q, we evaluated the
effectiveness of the design and operation of our "disclosure controls and
procedures". OP-TECH conducted this evaluation under the supervision and with
the participation of management, including our Chief Executive Officer and
Chief Financial Officer.
(i) Definition of Disclosure Controls and Procedures.
Disclosure controls and procedures are controls and other procedures that are
designed with the objective of ensuring that information required to be
disclosed in our periodic reports filed under the Exchange Act, such as this
report, is recorded, processed, summarized and reported within the time
periods specified in the SEC's rules and forms. As defined by the SEC, such
disclosure controls and procedures are also designed with the objective of
ensuring that such information is accumulated and communicated to our
management, including the Chief Executive Officer and Chief Financial Officer,
in such a manner as to allow timely disclosure decisions.
(ii) Limitations on the Effectiveness of Disclosure Controls and Procedures
and Internal Controls.
OP-TECH recognizes that a system of disclosure controls and procedures (as
well as a system of internal controls), no matter how well conceived and
operated, cannot provide absolute assurance that the objectives of the system
are met. Further, the design of such a system must reflect the fact that there
are resource constraints, and the benefits of controls must be considered
relative to their costs. Because of the inherent limitations in all control
systems, no evaluation of controls can provide absolute assurance that all
control issues have been detected. These inherent limitations include the
realities that judgments in decision-making can be faulty, and that breakdowns
can occur because of simple error or mistake. Additionally, controls can be
circumvented in a number of ways. Because of the inherent limitations in a
cost-effective control system, system failures may occur and not be detected.
(iii) Conclusions with Respect to Our Evaluation of Disclosure Controls and
Procedures.
Subject to the limitations described above, our Chief Executive Officer and
Chief Financial Officer have concluded that our disclosure controls and
procedures are effective in timely alerting them to material information
relating to OP-TECH required to be included in OP-TECH's periodic SEC filings.
(b) Changes in Internal Controls.
There have been no significant changes in OP-TECH's internal controls or in
other factors that could significantly affect these controls subsequent to the
date of their evaluation.
15.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None
Item 2. Changes in Securities.
During the quarter the issuer had the following transactions related to
purchases of its equity securities
Total number of shares Maximum number of
purchased as part of shares that may
Total number Avg price publicly announced yet be purchased
Period of shares paid per share plans or programs under plans or programs
- ------ ----------- ------------- ------------------ -----------------------
March 16, 2004 1,000,000 $.25 -0- -0-
Item 3. Defaults Upon Senior Securities.
None
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other Information.
None
Item 6. Exhibits and Reports on Form 8-K.
None
16.
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.
OP-TECH Environmental Services, Inc.
(Registrant)
Date: May 3, 2004 /s/ Christopher J. Polimino
Christopher J. Polimino
President and Chief Executive Officer
/s/ Douglas R. Lee
Douglas R. Lee
Treasurer and Chief Financial Officer
17.
CERTIFICATIONS
Certification of Chief Executive Officer
I, Christopher J. Polimino, certify that:
1. I have reviewed this quarterly report on Form 10-Q of OP-TECH Environmental
Services, 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 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 functions):
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 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: May 3, 2004
/s/ Christopher J. Polimino
Christopher J. Polimino
President and Chief Executive Officer
18.
Certification of Chief Financial Officer
I, Douglas R. Lee, certify that:
1. I have reviewed this quarterly report on Form 10-Q of OP-TECH Environmental
Services, 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 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 functions):
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 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: May 3, 2004
/s/ Douglas R. Lee
Douglas R. Lee
Chief Financial Officer
19.
Certification Pursuant to 18 U.S.C. Section 1350 As Adopted Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002
I, Christopher J. Polimino, President and Chief Executive Officer of OP-TECH
Environmental Services, Inc. (the 'Company'), certify, pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:
(1) the Quarterly Report on Form 10-Q of the Company for the quarter ended
March 31, 2004 (the 'Report') fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (15 U.S.C.
78m or 78o(d)); and
(2) the information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
Date: May 3, 2004
/s/ Christopher J. Polimino
Christopher J. Polimino
President and Chief Executive Officer
20.
Certification Pursuant to 18 U.S.C. Section 1350 As Adopted Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002
I, Douglas R. Lee, Chief Financial Officer and Treasurer of OP-TECH
Environmental Services, Inc. (the 'Company'), certify, pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:
(1) the Quarterly Report on Form 10-Q of the Company for the quarter ended
March 31, 2004 (the 'Report') fully complies with the requirements of Section
13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended (15 U.S.C.
78m or 78o(d)); and
(2) the information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
Date: May 3, 2004
/s/ Douglas R. Lee
Douglas R. Lee
Chief Financial Officer and Treasurer
21.