UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended March 31, 2003
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from __________ to __________
Commission File No. 000-26408
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Programmer's Paradise, Inc.
- ---------------------------
(Name of issuer in its charter)
Delaware 13-3136104
- ---------------------------- -----------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or organization)
1157 Shrewsbury Avenue, Shrewsbury, New Jersey 07702
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(Address of principal executive offices)
Issuer's Telephone Number (732) 389-8950
--------------
Check whether the registrant (1) filed all reports required to be filed
by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the
past 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]
There were 3,745,205 outstanding shares of Common Stock, par value $.01
per share, as of April 25, 2003, not including 1,485,045 shares classified as
Treasury Stock.
Page 1
PART I - FINANCIAL INFORMATION
PROGRAMMER'S PARADISE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, December 31,
2003 2002
---- ----
(Unaudited) (Audited)
ASSETS
Current assets
Cash and cash equivalents $ 5,307 $ 6,072
Marketable Securities 5,474 5,110
Accounts receivable, net 6,224 6,342
Inventory - finished goods 1,002 1,151
Prepaid expenses and other current assets 196 264
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Total current assets 18,203 18,939
Equipment and leasehold improvements, net 432 460
Other assets 64 69
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Total assets $ 18,699 $ 19,468
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses $ 7,034 $ 7,772
Dividend payable 375 -
------------- -------------
Total current liabilities 7,409 7,772
Commitments and contingencies
Stockholders' equity
Common stock, $.01 par value:
authorized, 10,000,000 shares; issued 5,203,250 shares 52 52
Additional paid-in capital 35,109 35,484
Treasury stock, at cost, 1,485,045 shares and 1,389,576
shares, respectively (4,375) (4,184)
Retained earnings (19,470) (19,511)
Accumulated other comprehensive loss (26) (145)
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Total stockholders' equity 11,290 11,696
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Total liabilities and stockholders' equity $ 18,699 $ 19,468
============= =============
The accompanying notes are an integral part of these consolidated financial statements.
Page 2
PROGRAMMER'S PARADISE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME
(Unaudited)
(In thousands, except per share data)
Three months ended
March 31,
---------
2003 2002
---- ----
Net sales $ 15,198 $ 17,445
Cost of sales 13,210 15,173
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Gross profit 1,988 2,272
Selling, general and administrative expenses 1,978 2,168
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Income from operations 10 104
Interest income, net 31 52
Unrealized foreign exchange gain/(loss) 22 (10)
----------- ------------
Income before income tax provision 63 146
Provision for income taxes 22 48
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Net income $ 41 $ 98
=========== ============
Net income per common share-Basic $ 0.01 $ 0.02
----------- ------------
Net income per common share-Diluted $ 0.01 $ 0.02
----------- ------------
Weighted average common shares outstanding-Basic 3,745 4,919
----------- ------------
Weighted average common shares outstanding-Diluted 3,754 4,928
----------- ------------
Reconciliation to comprehensive income:
---------------------------------------
Net Income $ 41 $ 98
----------- ------------
Other comprehensive income (loss), net of tax:
Unrealized loss on available-for-sale securities (5) -
Foreign currency translation adjustments 124 (43)
----------- ------------
Total comprehensive income $ 160 $ 55
=========== ============
The accompanying notes are an integral part of these condensed consolidated financial statements.
Page 3
PROGRAMMER'S PARADISE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Three Months Ended
March 31,
2003 2002
---- ----
Cash flows from operating activities
Net income $ 41 $ 98
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization 89 104
Changes in operating assets and liabilities:
Accounts receivable 117 (137)
Inventory 149 (548)
Prepaid expenses and other current assets 68 65
Accounts payable and accrued expenses (738) 94
Net change in other assets and liabilities (1) (2)
--------- --------
Net cash used for operating activities (275) (326)
--------- --------
Cash flows from investing activities:
Purchases of available-for-sale securities (1,369) -
Redemptions of available-for-sale securities 1,000 -
Increase in cash held in escrow - 43
Capital expenditures (55) (10)
--------- --------
Net cash (used for) provided by investing activities (424) 33
--------- --------
Cash flows from financing activities:
Purchase of treasury stock (190) (161)
--------- --------
Net cash used for financing activities (190) (161)
--------- --------
Effect of foreign exchange rate on cash 124 (43)
--------- --------
Net decrease in cash and cash equivalents (765) (497)
Cash and cash equivalents at beginning of period 6,072 11,425
--------- --------
Cash and cash equivalents at end of period $ 5,307 $ 10,928
========= ========
The accompanying notes are an integral part of these condensed consolidated financial statements.
Page 4
PROGRAMMER'S PARADISE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
March 31, 2003
1. The accompanying unaudited condensed 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 Article 10 of
Regulation S-X. Accordingly, they do not include all of the information
and footnotes required for complete financial statements.
The preparation of these financial statements requires the Company to
make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses, and related disclosure of
contingent assets and liabilities. On an on-going basis, the Company
evaluates its estimates, including those related to product returns,
bad debts, inventories, investments, intangible assets, income taxes,
restructuring and contingencies and litigation. The Company bases its
estimates on historical experience and on various other assumptions
that are believed to be reasonable under the circumstances, the results
of which form the basis for making judgments about the carrying values
of assets and liabilities that are not readily apparent from other
sources. In the opinion of Management all adjustments that are of a
normal recurring nature, considered necessary for fair presentation,
have been included. Actual results may differ from these estimates
under different assumptions or conditions. Operating results for the
three months ended March 31, 2003, are not necessarily indicative of
the results that may be expected for the year ended December 31, 2003.
For further information, refer to the consolidated financial statements
and notes thereto included in the Company's annual report on Form 10-K
for the year ended December 31, 2002.
2. Assets and liabilities of the Company's Canadian Subsidiary have been
translated at current exchange rates, and related revenues and expenses
have been translated at average rates of exchange in effect during the
year. The revenue for our Canadian operations in the first quarter of
2003 remained flat at $2.7 million, as compared to the first quarter of
2002. Cumulative translation adjustments have been classified within
other comprehensive income (loss), which is a separate component of
stockholders equity in accordance with FASB Statement No. 130.
"Reporting Comprehensive Income".
3. The Company records revenues from sales transactions when title to
products sold passes to the customer. The Company's shipping terms
dictate that the passage of title occurs upon receipt of products by
the customer. The majority of the Company's revenues relates to
physical products and is recognized on a gross basis with the selling
price to the customer recorded as net sales with the acquisition cost
of the product to the Company recorded as cost of sales. At the time of
sale, the Company also records an estimate for sales returns based on
historical experience. Software maintenance products, third party
services and extended warranties sold by the Company (for which the
Company is not the primary obligor) are recognized on a net basis in
accordance with SAB 101, "Revenue Recognition" and EITF 99-19,
"Reporting Revenue Gross as a Principal versus Net as an Agent".
Accordingly, such revenues are recognized in net sales either at the
time of sale or over the contract period, based on the nature of the
contract, at the net amount retained by the Company, with no cost of
goods sold.
In accordance with EITF 00-10, "Accounting for Shipping and Handling
Fees and Costs", the Company records freight billed to its customers as
net sales and the related freight costs as a cost of sales.
Page 5
In accordance with EITF 02-16, "Accounting for Consideration Received
from a Vendor by a Customer (Including a Reseller of the Vendor's
Products)," consideration from vendors, such as advertising support
funds, are accounted for as a reduction to cost of sales unless certain
requirements are met showing that the vendor receives an identifiable
fair value in exchange for the consideration. If these specific
requirements related to individual vendors are met, the consideration
is accounted for as revenue.
4. In December 2002, the FASB issued Statement of Financial Accounting
Standards No. 148, "Accounting for Stock-Based Compensation -
Transition and Disclosure" ("SFAS No. 148"). SFAS No. 148 amends FASB
Statement No. 123, "Accounting for Stock-Based Compensation", to
provide alternative methods of transition for a voluntary change to the
fair value method of accounting for stock-based employee compensation.
In addition, SFAS No. 148 amends the prior disclosure guidance and
requires prominent disclosures in both annual and interim financial
statements about the method of accounting for stock-based employee
compensation and the effect of the method used on reported results. The
provisions of SFAS No. 148 are generally effective for fiscal years
ending after December 15, 2002. The adoption of SFAS 148 had no effect
on our financial position or results of operations for the quarter
ended March 31, 2003.
In January 2003, the FASB issued Interpretation 46 - "Consolidation of
Variable Interest Entities" ("FIN 46"). FIN 46 requires that companies
that control another entity through interests other than voting
interests should consolidate the controlled entity. FIN 46 applies to
variable interest entities created after January 31, 2003, and to
variable interest entities in which an enterprise obtains an interest
in after that date. The related disclosure requirements are effective
immediately. The adoption of FIN 46 had no effect on financial position
or results of operations for the quarter ended March 31, 2003.
In January 2003, the EITF reached a consensus on Issue No. 02-16, "
Accounting by a Reseller for Cash Consideration Received From a Vendor
." EITF Issue No. 02-16 provides guidance on how resellers of vendors'
products should account for cash consideration received from their
vendors. The provisions of EITF Issue No. 02-16 will apply to
arrangements, including modifications of existing arrangements, entered
into after December 31, 2002. The adoption of EITF 02-16 had no effect
on our financial position or results of operations for the quarter
ended March 31, 2003.
5. Basic EPS is computed by dividing net earnings (loss) by the weighted
average number of shares outstanding during the period. Diluted EPS is
computed considering the potentially dilutive effect of outstanding
stock options. A reconciliation of the numerator and denominators of
the basic and diluted per share computations follows (in thousands,
except per share data):
Three months ended
March 31,
---------
2003 2002
---- ----
Numerator:
Net Income $ 41 $ 98
Denominator:
Weighted average shares (Basic) 3,745 4,919
Dilutive effect of outstanding options 9 9
--------- ---------
Weighted average shares including assumed conversions (Diluted) 3,754 4,928
Basic net income per share $ 0.01 $ 0.02
Diluted net income per share $ 0.01 $ 0.02
Page 6
6. On March 28, 2003 our Board of Directors declared a quarterly dividend
of $.10 per share on our common stock payable April 25, 2003 to
shareholders of record on April 7, 2003. Our Board intends to
periodically review the amount and frequency of future payments in the
light of the Company's operations and need for capital. The dividend is
reflected as a reduction of Additional Paid in Capital.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Overview
Programmer's Paradise, Inc. operates in one primary business segment: the
marketing of technical software and hardware for microcomputers, servers and
networks in the United States and Canada.
We offer a wide variety of technical and general business application software
and PC hardware and components from a broad range of publishers and
manufacturers. We market our products through our catalogs, direct mail programs
and advertisements in trade magazines as well as through Internet and e-mail
promotions. Through our wholly owned subsidiary, Lifeboat Distribution Inc., we
distribute marketed products to dealers and resellers in the United States and
Canada.
The Company's sales and results of operations have fluctuated and are expected
to continue to fluctuate on a quarterly basis as a result of a number of
factors, including: the condition of the software industry in general; shifts in
demand for software products; industry shipments of new software products or
upgrades; the timing of new merchandise and catalog offerings; fluctuations in
response rates; fluctuations in postage, paper, shipping and printing costs and
in merchandise returns; adverse weather conditions that affect response,
distribution or shipping; shifts in the timing of holidays; and changes in the
Company's product offerings. The Company's operating expenditures are based on
sales forecasts. If revenues do not meet expectations in any given quarter,
operating results may be materially adversely affected.
Results of Operations
The following table sets forth for the periods indicated certain financial
information derived from the Company's consolidated statement of operations
expressed as a percentage of net sales.
Three months ended
March 31,
---------
2003 2002
---- ----
Net sales 100.0% 100.0%
Cost of sales 86.9 87.0
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Gross profit 13.1 13.0
Selling, general and administrative expenses 13.0 12.4
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Income from operations 0.1 0.6
Interest income, net 0.2 0.3
Unrealized foreign exchange gain (loss) 0.1 (0.1)
-------- --------
Income before income taxes 0.4 0.8
Income taxes 0.1 0.2
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Net income 0.3% 0.6%
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Page 7
Net Sales
Net sales in the first quarter of 2003 decreased 12.9% or $2.2 million to $15.2
million compared to $17.4 million for the same period in 2002. The quarter over
quarter revenue decline reflects the continued difficult business environment.
On a forward-looking basis, the overall market demand for the software we sell
continues to be volatile with the timing and extent of the market's recovery
remaining uncertain.
Gross Profit
Gross profit as a percentage of net sales increased to 13.1% for the quarter
ended March 31, 2003, compared to 13.0% for the same period in 2002. Gross
profit in absolute dollars for the three-month period ended March 31, 2003 was
$2.0 million as compared to $2.3 million in 2002.
The slight increase in Gross Profit Margin reflects a minor shift in the mix of
sales. The decrease in gross profit dollars is a result of our lower sales.
On a forward-looking basis, gross profit margin in future periods may be less
than the 13.1% achieved in the first quarter of 2003. Gross profit margin
depends on various factors, including the continued participation by vendors in
inventory price protection and rebate programs, product mix, including software
maintenance and third party services, pricing strategies, market conditions and
other factors, any of which could result in a reduction of gross margins below
those realized in the first quarter of 2003.
Selling, General and Administrative Expenses
SG&A expenses for the quarter ended March 31, 2003 were $2.0 million as compared
to $2.2 million for the same period in 2002, a decrease of $0.2 million or 9%.
This decrease was primarily due to lower personnel-related expenses, cost
containment initiatives and improved cost control policies and procedures.
In light of current business conditions, we will continue to review our
organization and cost structure in an effort to further reduce operating
expenses and improve efficiencies.
Foreign currency transactions Gain (Loss)
The unrealized foreign exchange gain for the quarter ended March 31, 2003 was
$22,000 compared to a loss of $10,000 for the same period in 2002. This gain in
the first three months of 2003 is primarily due to the trade activity with our
Canadian subsidiary. Although the Company does maintain bank accounts in
Canadian currencies to reduce currency exchange fluctuations, the Company is,
nevertheless, subject to risks associated with such fluctuations.
Income Taxes
For the quarter ended March 31, 2003, the Company recorded a provision for
income taxes of approximately $ 22,000, which consists of a provision for
Canadian taxes.
The loss carry forwards offset the provision for income taxes for our U.S.
operations. As per March 31, 2003, the Company had recorded a U.S. deferred tax
asset of approximately $6.5 million reflecting, in part, a benefit of $3 million
in federal and state tax loss carry forwards, which will expire in varying
amounts between 2003 and 2022. As a result of the current uncertainty of
realizing the benefits of the tax loss carry forward, valuation allowances equal
to the tax benefits for the U.S. deferred taxes have been established.
Page 8
The full realization of the tax benefit associated with the carry forward
depends predominantly upon the Company's ability to generate taxable income
during the carry forward period. The valuation allowance will be evaluated at
the end of each reporting period, considering positive and negative evidence
about whether the deferred tax asset will be realized. At that time, the
allowance will either be increased or reduced; reduction could result in the
complete elimination of the allowance if positive evidence indicates that the
value of the deferred tax assets is no longer impaired and the allowance is no
longer required. The Company's ability to utilize certain net operating loss
carry forwards is restricted to approximately $1.5 million per year
cumulatively, as a result of an ownership change pursuant to Section 382 of the
Internal Revenue Code.
Liquidity and Capital Resources
Our cash and cash equivalents decreased by $0.8 million to $5.3 million at March
31, 2003, from $6.1 million at December 31, 2002.
Net cash used for operating activities for the quarter ended March 31, 2003 was
$0.3 million and primarily resulted from a $0.7 million decrease in accounts
payable and accrued expenses. This decrease was partly offset by a $117,000
decrease in accounts receivable and a $149,000 decrease in inventory. The
decrease in accounts receivable relates primarily to improvement in collection
and the decrease in sales. The decrease in accounts payable is primarily due to
our decreased revenue as well as using our cash to pay vendors promptly in order
to obtain more favorable conditions.
Cash used for investing activities for the quarter ended March 31, 2003 amounted
to $0.4 million. As a result of the current low interest rates on our short-term
savings accounts we decided to invest an additional $369,000 in US Government
securities, furthermore we invested $55,000 in capital expenditures.
Cash used for financing activities for the quarter ended March 31, 2003 of
$190,000 consisted of the purchase of our own stock under the buyback program
discussed below.
On October 9, 2002, the Company's Board of Directors authorized the purchase of
an additional 500,000 shares of our common stock. On September 16, 2002, the
Company's Board of Directors authorized the purchase of an additional 500,000
shares of our common stock. These two purchase approvals are in addition to
approval of 490,000 shares in June 2002 and 521,013 shares in October 1999 the
company was authorized to buy back in both open market and private transactions,
as conditions warrant.
The repurchase program is expected to remain effective for 2003. We intend to
hold the repurchased shares in treasury for general corporate purposes,
including issuances under various stock option plans. As of March 31, 2003, we
owned approximately 1,485,000 shares purchased at an average cost of $2.95. In
the first quarter of 2003, we repurchased 95,469 shares of company stock at an
average share price of $1.99.
The Company's current and anticipated use of its cash and cash equivalents is,
and will continue to be, to fund working capital, operational expenditures and
the stock buyback program. Our business plan furthermore contemplates to
continue to use our cash to pay vendors promptly in order to obtain more
favorable conditions.
The Company believes that the funds held in cash and cash equivalents will be
sufficient to fund the Company's working capital and cash requirements for at
least the next 12 months. We currently do not have any credit facility and, in
the foreseeable future, we do not plan to enter into an agreement providing for
a line of credit.
Page 9
Critical Accounting Policies and Estimates
The Company's discussion and analysis of its financial condition and results of
operations are based upon the Company's consolidated financial statements that
have been prepared in accordance with accounting principles generally accepted
in the United States of America. The preparation of these financial statements
requires the Company to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenues and expenses, and related disclosure of
contingent assets and liabilities. The Company recognizes revenue from the sale
of software and hardware for microcomputers, servers and networks upon shipment
or upon electronic delivery of the product. The Company expenses the advertising
costs associated with producing its catalogs. The costs of these catalogs are
expensed in the same month the catalogs are mailed.
On an on-going basis, the Company evaluates its estimates, including those
related to product returns, bad debts, inventories, investments, intangible
assets, income taxes, restructuring and contingencies and litigation.
The Company bases its estimates on historical experience and on various other
assumptions that are believed to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying values
of assets and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates under different assumptions or
conditions.
The Company believes the following critical accounting policies used in the
preparation of its consolidated financial statements affect its more significant
judgments and estimates. The Company maintains allowances for doubtful accounts
for estimated losses resulting from the inability of its customers to make
required payments. If the financial condition of the Company's customers were to
deteriorate, resulting in an impairment of their ability to make payments,
additional allowances may be required. The Company writes down its inventory for
estimated obsolescence or unmarketable inventory equal to the difference between
the cost of inventory and the estimated market value based upon assumptions
about future demand and market conditions. If actual market conditions are less
favorable than those projected by management, additional inventory write-offs
may be required.
The Company records a valuation allowance to reduce its deferred tax assets to
the amount that is more likely than not to be realized. While the Company has
considered future taxable income and ongoing prudent and feasible tax planning
strategies in assessing the need for the valuation allowance, in the event the
Company were to determine that it would be able to realize its deferred tax
assets in the future in excess of its net recorded amount, an adjustment to the
deferred tax asset would increase income in the period such determination was
made.
Certain Factors Affecting Operating Results
This report includes "forward-looking statements" within the meaning of Section
21E of the Securities Exchange Act of 1934, as amended. Statements in this
report regarding future events or conditions, including statements regarding
industry prospects and the Company's expected financial position, business and
financing plans, are 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. We strongly urge current and prospective investors to carefully
consider the cautionary statements and risks contained in this Report. Such
risks include, but are not limited to, the continued acceptance of the Company's
distribution channel by vendors and customers, the timely availability and
acceptance of new products, contribution of key vendor relationships and support
programs, as well as factors that affect the software industry in general.
Page 10
The Company operates in a rapidly changing business, and new risk factors emerge
from time to time. Management cannot predict every risk factor, nor can it
assess the impact, if any, of all such risk factors on the Company's business or
the extent to which any factor, or combination of factors, may cause actual
results to differ materially from those projected in any forward-looking
statements. Accordingly, forward-looking statements should not be relied upon as
a prediction of actual results and readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of their
dates. The Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.
The statement concerning future sales and future Gross Profit Margin are forward
looking statements involving certain risks and uncertainties such as
availability of products, product mix, market conditions and other factors,
which could result in a fluctuation of sales below recent experience.
Stock Volatility. The technology sector of the United States stock markets has
experienced substantial volatility in recent periods. Numerous conditions, which
impact the technology sector or the stock market in general or the Company in
particular, whether or not such events relate to or reflect upon the Company's
operating performance, could adversely affect the market price of the Company's
Common Stock.
Furthermore, fluctuations in the Company's operating results, announcements
regarding litigation, the loss of a significant vendor, increased competition,
reduced vendor incentives and trade credit, higher postage and operating
expenses, and other developments, could have a significant impact on the market
price of the Company's Common Stock.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
In addition to its activities in the United States, the Company also conducts
business in Canada. We are subject to general risks attendant to the conduct of
business in Canada, including economic uncertainties and foreign government
regulations. In addition, the Company's Canadian business is subject to changes
in demand or pricing resulting from fluctuations in currency exchange rates or
other factors.
The Company's $5.5 million investments in marketable securities are only in
highly rated and highly liquid U.S. government Securities. The remaining cash
balance is invested in short-term savings accounts with our primary bank, The
Bank of New York. As such, the risk of significant changes in the value of our
cash invested is minimal.
Item 4. Controls and Procedures
As required by Rule 13a-15 under the Exchange Act, within the 90-day period
prior to the filing date of this report, the Company carried out an evaluation
of the effectiveness of the design and operation of the Company's disclosure
controls and procedures. This evaluation was carried out under the supervision
and with the participation of the Company's management, including the Company's
Chief Executive Officer and Chief Financial Officer. Based upon that evaluation,
the Company's Chief Executive Officer and Chief Financial Officer concluded that
the Company's disclosure controls and procedures are effective. It should be
noted that the design of any system of controls is based in part upon certain
assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its stated goals under all potential
future conditions, regardless of how remote. In addition, the Company reviewed
its internal controls, and there have been 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 evaluation.
Disclosure controls and procedures are controls and other procedures that are
designed to ensure that information required to be disclosed by the Company in
the reports it files or submits under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the Securities and
Exchange Commission's rules and forms. Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that
information required to be disclosed by the Company in the reports it files or
submits under the Exchange Act is accumulated and communicated to the Company's
management, including the Company's Chief Executive Officer and Chief Financial
Officer, as appropriate, to allow timely decisions regarding required
disclosure.
Page 11
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
None.
(b) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the three
months ended March 31, 2003.
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.
PROGRAMMER'S PARADISE, INC.
May 8, 2003 By: /s/ Simon F. Nynens
- --------------------------------- --------------------------------
Date Simon F. Nynens, Chief Financial
Officer and Vice President
May 8, 2003 By: /s/ William H. Willett
- --------------------------------- -----------------------------------
Date William H. Willett, Chairman of
the Board, President and Chief
Executive Officer
Page 12
PROGRAMMER'S PARADISE, INC.
CERTIFICATIONS PURSUANT TO
SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
CERTIFICATION
- -------------
I, William H. Willett, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Programmer's Paradise,
Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: May 8, 2003
/s/ William H. Willett
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William H.Willett
Chief Executive Officer
Page 13
CERTIFICATION
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I, Simon F. Nynens, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Programmer's Paradise,
Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: May 8, 2003
/s/ Simon F. Nynens
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Simon F. Nynens
Chief Financial Officer
Page 14