SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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 May 3, 2003.
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 No. 0-28410
LOEHMANN'S HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-4129380
- ---------------------------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2500 Halsey Street, Bronx, New York 10461
-----------------------------------------
(Address of principal executive offices, including zip code)
(718) 409-2000
--------------
(Registrant's telephone number, including area code)
Indicate by a 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 as 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 X No _
-
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed under Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes X No _
-
Below are indicated the number of shares outstanding of each of the registrant's
classes of common stock.
Class Outstanding at June 16, 2003
------ ----------------------------
Common Stock, $.01 par value per share 6,659,236
Loehmann's Holdings, Inc.
CONTENTS
PART I--FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets--May 3, 2003, February 1, 2003 (Audited), and May 4, 2002................. 2
Consolidated Statements of Operations--Quarters ended May 3, 2003 and May 4, 2002..................... 3
Consolidated Statements of Cash Flows--Quarters ended May 3, 2003 and May 4, 2002..................... 4
Notes to Consolidated Financial Statements........................................................... 5
Item 2. Management's Discussion and Analysis of Results of Operations
and Financial Condition..................................................................... 6
Item 3. Quantitative and Qualitative Disclosures About Market Risk.................................. 8
Item 4. Controls and Procedures..................................................................... 9
PART II--OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K............................................................ 9
Signature............................................................................................ 10
Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act..................................... 11
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Loehmann's Holdings, Inc.
Consolidated Balance Sheets
(In thousands)
MAY 3, February 1, May 4,
2003 2003 2002
---- ---- ----
(Unaudited) (Audited) (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 1,525 $ 11,217 $ 13,545
Accounts receivable and other assets 7,677 5,798 6,482
Merchandise inventory 64,070 51,506 50,927
-------- -------- --------
Total current assets 73,272 68,521 70,954
Property, equipment and leaseholds, net 45,519 45,087 42,446
Deferred financing fees and other assets, net 1,514 1,585 1,293
Deferred tax asset 2,968 2,968 2,357
Reorganization value in excess of identifiable assets, net 15,988 15,988 19,381
-------- -------- --------
Total assets $139,261 $134,149 $136,431
======== ======== ========
LIABILITIES AND COMMON STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 24,370 $ 23,603 $ 20,899
Revolving credit facility 3,573 -- --
Accrued expenses 17,857 19,308 17,439
Current portion of long-term debt 5,700 -- --
Income taxes payable 683 1,351 2,158
-------- -------- --------
Total current liabilities 52,183 44,262 40,496
11% Senior notes due December 2005 5,707 11,407 26,407
Other noncurrent liabilities 6,334 6,195 5,637
Common stockholders' equity:
Common stock, $0.01 par value, 20,000,000 shares authorized and
6,659,236 issued and outstanding 66 66 66
Additional paid-in capital 49,934 49,934 49,934
Retained earnings 25,037 22,285 13,891
-------- -------- --------
Total common stockholders' equity 75,037 72,285 63,891
-------- -------- --------
Total liabilities and common stockholders' equity $139,261 $134,149 $136,431
======== ======== ========
The accompanying notes are an integral part of these financial statements.
2
Loehmann's Holdings, Inc.
Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share data)
QUARTER ENDED MAY Quarter ended May
3, 2003 4, 2002
----------------- -----------------
Net sales $90,428 $93,397
Cost of sales 54,001 56,536
------- -------
Gross profit 36,427 36,861
Revenue from leased departments 329 282
------- -------
Operating profit 36,756 37,143
Selling, general, and administrative expenses 29,246 27,260
Depreciation and amortization 2,345 2,155
------- -------
Operating income 5,165 7,728
Interest expense, net 458 786
------- -------
Income before income taxes 4,707 6,942
Provision for income taxes, net 1,955 2,739
------- -------
Net income applicable to common stock $ 2,752 $ 4,203
======= =======
Earnings per share:
Basic
Earnings per share $ 0.41 $ 0.63
======= =======
Weighted average shares outstanding 6,659 6,664
======= =======
Diluted
Earnings per share $ 0.37 $ 0.60
======= =======
Weighted average shares outstanding 7,510 6,986
======= =======
The accompanying notes are an integral part of these financial statements.
3
Loehmann's Holdings, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
QUARTER ENDED Quarter ended
MAY 3, 2003 May 4, 2002
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Net income $ 2,752 $ 4,203
Adjustments to reconcile net income to net cash
(used in) provided by operating activities:
Depreciation and amortization 2,345 2,155
Gain on disposal of assets (5) --
Changes in current assets and liabilities:
Accounts receivable and other assets (1,879) (1,697)
Merchandise inventory (12,564) (6,955)
Accounts payable 767 1,472
Accrued expenses (1,451) 218
Income taxes payable (668) 1,271
-------- --------
Net changes in current assets and liabilities (15,795) (5,691)
Net change in other noncurrent assets and liabilities 139 174
-------- --------
Total adjustments, net (13,316) (3,362)
-------- --------
Net cash (used in) provided by operating activities (10,564) 841
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (2,701) (1,178)
-------- --------
Net cash used in investing activities (2,701) (1,178)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under the credit facility 3,573 --
-------- --------
Net cash provided by financing activities 3,573 --
-------- --------
Net decrease in cash and cash equivalents (9,692) (337)
Cash and cash equivalents at beginning of period 11,217 13,882
-------- --------
Cash and cash equivalents at end of period $ 1,525 $ 13,545
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash interest paid during period $ 752 $ 1,572
======== ========
Cash taxes paid during period $ 2,622 $ 1,466
======== ========
The accompanying notes are an integral part of these financial statements.
4
Loehmann's Holdings, Inc.
Notes to Consolidated Financial Statements
1. BASIS OF PRESENTATION
The balance sheet at May 3, 2003 and the statements of operations and
cash flows for the quarter ended May 3, 2003 include, in the opinion of
management, all adjustments (consisting of only normal recurring adjustments)
considered necessary for a fair presentation.
The accompanying financial statements have been prepared in accordance
with accounting principles generally accepted in the United States for interim
financial information. Certain information and footnote disclosure normally
included in financial statements required by generally accepted accounting
principles have been omitted. Operating results for the quarter ended May 3,
2003 are not necessarily indicative of the results that may be expected for the
fiscal year ending January 31, 2004. It is suggested that these unaudited
financial statements be read in conjunction with the financial statements and
notes for the fiscal year ended February 1, 2003 included in the Company's
Annual Report on Form 10-K for such year.
2. RECLASSIFICATION
Certain items in fiscal year 2002 have been reclassified to present
them on a basis consistent with later periods.
3. INCOME TAXES
Income taxes are provided for under the liability method using an
effective tax rate of 41%.
4. USE OF ESTIMATES
The preparation of the financial statements in conformity with
accounting principles generally accepted in the United States for interim
financial information requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual amounts could differ from the estimates.
5. SUBSEQUENT EVENT
On June 9, 2003, the Company redeemed $5.7 million of its 11% Senior
Notes due December 2005. These notes have been reclassified as current portion
of long-term debt on the Company's balance sheet at May 3, 2003.
6. STOCK-BASED COMPENSATION
In December 2002, the FASB issued SFAS No. 148, "Accounting for
Stock-Based Compensation - Transition and Disclosure" ("SFAS" 148), which amends
SFAS No. 123, "Accounting for Stock-Based Compensation" ("SFAS 123"), to provide
alternative methods of transition for a voluntary change to the fair value based
method of accounting for stock-based employee compensation. The Company has not
adopted a method under SFAS 148 to expense stock options but rather continues to
follow APB 25 and related interpretations in accounting for stock options and
5
accordingly, has recognized no compensation expense with respect to options
granted to key employees or options granted to non-employee directors. Had
compensation cost been determined based upon the fair value at grant date for
awards consistent with the methodology prescribed by SFAS 123, "Accounting for
Stock-Based Compensation", the Company's net income and net income per share
would have been the pro forma amounts indicated below:
May 3, 2003 May 4, 2002
------------- ---------------
(In thousands, except per share data)
Net income - as reported $ 2.8 $ 4.2
-------- --------
Less total stock-based employee
compensation expense under the fair
value method, net of tax 0.6 0.2
-------- --------
Net income - pro forma 2.2 4.0
======== ========
Net income per share:
Basic - as reported $ 0.41 $ 0.63
Basic - pro forma 0.33 0.60
Diluted - as reported 0.37 0.60
Diluted - pro forma 0.29 0.57
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS - COMPARISON OF THE QUARTERS ENDED MAY 3, 2003 AND MAY 4,
2002
Comparable store sales (stores that were in operation for both periods)
decreased by 7.7 % for the quarter ended May 3, 2003 compared to the same period
in fiscal 2002. Net sales for the quarter ended May 3, 2003 were $90.4 million
as compared to $93.4 million for the comparable period in the prior year. Sales
for the quarter were adversely impacted by a reduction in customer traffic
prompted primarily by unseasonably cold weather (particularly in the Northeast
which accounts for approximately 45% of our business), a weak economy and the
war in Iraq. The decrease of $3.0 million is attributable to (i) the comparable
store sales decrease of $7.0 million, (ii) an increase of $6.4 million in sales
related to five new stores and (iii) a decrease of $2.4 million in sales related
to three closed stores.
Gross profit percentage increased to 40.3% from 39.5% in the prior year
period. The increase in gross profit percentage was due primarily to strong
full-price sell through in the current quarter. Gross profit for the quarter
ended May 3, 2003 was $36.4 million as compared to $36.9 million for the same
period in the prior year.
Selling, general and administrative expenses, as a percentage of net
sales, for the quarter ended May 3, 2003, increased to 32.3% from 29.2% in the
prior period. Selling, general and administrative expenses increased to $29.2
million from $27.3 million in the prior period. The increase of $1.9 million was
primarily due to (i) $2.2 million of expenses related to the five new stores
opened within the past nine months and (ii) an increase of $0.4 million is
advertising expenses incurred at stores open for at least a year. This increase
is partially offset by a $0.5 million reduction in expenses due to the closing
of three stores. Included in the $2.2 million in new store expenses were $0.6
million of one-time pre-opening expenses for the three stores opened in the
current quarter.
Depreciation and amortization expense for the quarter ended May 3,
2003, was $2.3 million as compared to $2.2 million for the same period in the
prior year.
6
As a result of the items explained above, operating income decreased by
$2.6 million to $5.2 million, or 5.7% of sales, in the quarter ended May 3, 2003
as compared to operating income of $7.7 million, or 8.3% of sales, in the
quarter ended May 4, 2002.
Net interest expense for the quarter ended May 3, 2003 was $0.5 million
as compared to $0.8 million for the same period in the prior year. In November
2002, the Company redeemed $15.0 million of its 11% Senior notes due December
2005, resulting in a decrease in interest on the Company's senior notes to $0.3
million from $0.7 million.
Due to the seasonal nature of the Company's business, inventory is
normally at its lowest point at the end of the fiscal year and increases to peak
levels during the first quarter of the fiscal year. Therefore, there will
typically be a large increase in the inventory from the end of a fiscal year to
the end of the first quarter of the following fiscal year. For the first quarter
of fiscal year 2003, inventory increased by $12.6 million to $64.1 million from
$51.5 million at February 1, 2003. The increase of $12.6 million was
attributable to (i) an increase in the Company's pack-away inventory of $4.2
million due to opportunistic purchases of fall season merchandise made during
the period, (ii) an increase in inventory for new stores of $3.5 million and
(iii) an increase in the inventory at stores in operation for at least one year
of $4.9 million.
Inventory at the end of the first fiscal quarter is $13.1 million
higher than one year ago due to (i) an increase in the Company's pack-away
inventory of $7.0 million due to opportunistic purchases of fall season
merchandise made during the period, (ii) inventory for new stores of $4.2
million and (iii) an increase in the inventory at stores in operation for at
least one year of $1.9 million.
Accounts receivable and other current assets for the period ended May
3, 2003, were $7.7 million compared to $5.8 million at February 1, 2003. The
increase of $1.9 million was due primarily to an increase in third-party credit
card sales receivable of $1.2 million and an increase in prepaid insurance
expense of $0.5 million.
Income taxes payable for the period ended May 3, 2003, were $0.7
million compared to $1.4 million at February 1, 2003. The decrease was primarily
due to estimated state and federal taxes payments made during the quarter ended
May 3, 2003.
On June 9, 2003, the Company redeemed $5.7 million of its 11% Senior
notes due December 2005. These notes have been reclassified as current portion
of long-term debt on the Company's balance sheet at May 3, 2003. Consequently,
the long-term balance on the 11% Senior notes due December 2005 decreased by
$5.7 million reflecting the reclassification.
LIQUIDITY AND CAPITAL RESOURCES
The Company has a $60.0 million Credit Facility with Bankers Trust
Company (the "Credit Facility"). The Credit Facility is secured by substantially
all of the Company's assets and expires on September 30, 2005. The availability
of the revolving line of credit under the Credit Facility is subject to certain
inventory-related borrowing base requirements.
The indebtedness under the Credit Facility bears interest at variable
rates based on LIBOR plus 2.5% or the prime rate plus 1.5% on borrowings. There
is an unused line fee of 0.50% per annum on the unused portion of the Credit
Facility.
7
The Credit Facility contains certain customary covenants, including
limitations on indebtedness, liens, and restricted payments. In addition, the
Company is required to satisfy, among other things, certain financial
performance criteria including minimum EBITDA requirements, fixed charge
coverage ratio, inventory turn ratio and maximum capital expenditure costs. The
Company is in compliance with all of its loan covenants.
As of May 3, 2003, the Company had net borrowings of $3.6 million and
documentary letters of credit of $4.6 million outstanding with $41.1 million of
unused availability under the Credit Facility.
Net cash used in operations for the quarter ended May 3, 2003 was $10.6
million compared to $0.8 million provided by operations in the prior year. The
usage was primarily due to an increase in inventory of $12.6 million and a
decrease in accrued expenses and income taxes payable of $1.1 million and $0.7
million, respectively. Capital expenditures for the quarter were $2.7 million.
The new stores in Troy, MI, East Hanover, NJ and Chevy Chase, MD accounted for
$1.6 million of the $2.7 million.
This Quarterly Report on Form 10-Q and, in particular, Management's
Discussion and Analysis of Financial Condition and Results of Operations contain
forward-looking statements within the Securities Exchange Act of 1934. The
Company's actual results of operations and future financial condition may differ
materially from those expressed or implied in any such forward-looking
statements as a result of many factors, including factors that may be beyond the
Company's control. Other factors that may cause actual results of operations and
future financial condition to differ from those expressed or implied in any
forward-looking statements contained herein include adverse changes in
relationships with key vendors and factors, changes in consumer preferences,
competition from existing and potential competitors and general economic
conditions.
The Company cautions that the foregoing list of important factors is
not exclusive. The Company does not undertake to update any forward-looking
statements contained herein or that may be made from time to time by or on
behalf of the Company.
CRITICAL ACCOUNTING POLICIES
Inventory
Merchandise inventory is valued at the lower of cost or market as
determined by the retail inventory method, which the Company believes
approximates fair value. However, certain warehoused inventory, referred to as
pack-away inventory, a portion of which is not immediately available for sale,
is valued on a specific cost basis. The pack-away inventory valued on a specific
cost basis at May 3, 2003 and May 4, 2002 was $21.5 million and $14.4 million,
respectively.
The Company takes permanent markdowns to reduce prices as goods age.
The resulting gross margin reduction is recognized in the period the markdown is
recorded.
Shrinkage is estimated as a percentage of sales for the period from the
last physical inventory date to the end of each reporting period. Such estimates
are based on experience and recent physical inventory results. Physical
inventories are taken twice annually and inventory records are adjusted
accordingly.
8
Revenue Recognition and Leased Sales
The Company recognizes revenue when goods are sold, at retail, to
customers in its stores. The Company adopted SAB 101 in fiscal year 2000 and
sales from fragrances, a leased department, are not reflected in the net sales
reported on the Company's statement of operations. Gross profit from fragrance
sales is shown as revenue from leased departments on the Company's statement of
operations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company has assessed its vulnerability to certain market risks,
including interest rate risk associated with financial instruments included in
cash and cash equivalents. Due to the short-term nature of these investments the
Company has determined that the risks associated with interest rate fluctuations
related to these financial instruments do not pose a material risk to the
Company.
ITEM 4. CONTROLS AND PROCEDURES
Within the 90-day period prior to the filing of this report, an
evaluation was carried out under the supervision and with the participation of
the Company's Chief Executive Officer and Chief Financial Officer of the
effectiveness of the design and operation of the Company's disclosure controls
and procedures, as defined in Rule 13a-14(c) under the Securities Exchange Act
of 1934, as amended. Based upon the evaluation, the Chief Executive Officer and
the Chief Financial Officer have concluded that these disclosure controls and
procedures are effective.
There have been no significant changes in the Company's internal
controls or in other factors that could significantly affect the internal
controls subsequent to the date of the Company's most recent evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits
(a) Exhibits
99.1 Certificate of Chief Executive Officer required by Section 906 of the
Sarbanes-Oxley Act of 2002.
99.2 Certificate of Chief Financial Officer required by Section 906 of the
Sarbanes-Oxley Act of 2002.
(b) Reports on Form 8-K
The Company filed a report on Form 8-K under items 5 and 7 of Form 8-K, dated
May 14, 2003, announcing the Company's intention to redeem $5.7 million of its
outstanding 11% Senior notes.
The Company filed a report on Form 8-K under items 7 and 12 of Form 8-K, dated
May 30, 2003, announcing the Company's financial results for the quarter ended
May 3, 2003.
9
Loehmann's Holdings, Inc.
Signature
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.
Dated: June 17, 2003
Loehmann's Holdings, Inc.
By /s/ Robert Glass
--------------------------------
Robert Glass
Chief Operating Officer, Chief
Financial Officer and Secretary
10
CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Robert N. Friedman, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Loehmann's
Holdings, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee 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 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: June 17, 2003
/s/ Robert N. Friedman
----------------------------------
Name: Robert N. Friedman
Title: President and Chief
Executive Officer
11
CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Robert Glass, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Loehmann's
Holdings, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee 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 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: June 17, 2003
/s/ Robert Glass
----------------------------------------
Name: Robert Glass
Title: Chief Operating Officer, Chief
Financial Officer and Secretary
12