10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended December 31, 2002
Commission File Number I-4383
ESPEY MFG. & ELECTRONICS CORP.
-----------------------------------------------------------
(Exact name of registrant as specified in charter)
NEW YORK 14-1387171
- ---------------------------- ------------------------------------
(State of Incorporation) (I.R.S. Employer's Identification No.)
233 Ballston Avenue, Saratoga Springs, New York 12866
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 518-584-4100
-----------------------
Number of shares outstanding of issuer's class of common stock $.33-1/3 par
value as of February 10, 2003: 1,019,861.
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES [X] NO [ ]
Indicate by check mark whether the registrant is an acelerated filer (as defined
in Rule 12B-2 of the Exchange Act)
YES [ ] NO [X]
ESPEY MFG. & ELECTRONICS CORP.
I N D E X
PART I FINANCIAL INFORMATION PAGE
Item 1 Financial Statements:
Consolidated Balance Sheets -
December 31, 2002 and June 30, 2002 1
Consolidated Statements of Operations -
Three and Six Months Ended
December 31, 2002 and 2001 3
Consolidated Statements of Cash Flows -
Six Months Ended December 31,2002 and 2001 4
Notes to Consolidated Financial Statements 5
Item 2 Management's Discussion and Analysis of 6
Financial Condition and Results of Operations.
Item 4 Controls and Procedures 7
PART II OTHER INFORMATION 8
SIGNATURES 8
ESPEY MFG. & ELECTRONICS CORP.
Consolidated Balance Sheets
December 31, 2002 and June 30, 2002
--------------------------------------------------
Unaudited
2002 2002
December 31 June 30
-------------- --------------
ASSETS:
Cash and cash equivalents $ 8,374,183 $ 9,192,962
Investments securities 372,400 368,000
Trade accounts receivable, net 5,006,276 2,409,706
Other receivables 2,052 13,413
Inventories:
Raw materials and supplies 1,613,089 1,424,278
Work-in-process 2,561,104 4,298,988
Costs relating to contracts in process, net of advance
payments of $2,984,771 at December 31, 2002 and
$2,194,269 at June 30, 2002 7,100,164 7,017,529
----------- -----------
Total inventories 11,274,357 12,740,795
----------- -----------
Deferred income taxes 84,394 85,773
Prepaid expenses and other current assets 174,035 198,061
----------- -----------
Total current assets 25,287,697 25,008,710
----------- -----------
Property, Plant and Equipment, net 3,320,988 3,324,252
----------- -----------
Total assets $28,608,685 $28,332,962
============ ============
See accompanying notes to the consolidated financial statements.
(Continued)
1
ESPEY MFG. & ELECTRONICS CORP.
Consolidated Balance Sheets, Continued
December 31, 2002 and June 30, 2002
-------------------------------------------------------------
Unaudited
2002 2002
December 31 June 30
---------------- ----------------
LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable $ 1,060,646 $ 497,454
Accrued expenses:
Salaries, wages and commissions 100,495 86,881
Vacation 394,434 398,898
Employees' insurance costs 6,351 6,887
ESOP payable 273,028 --
Other 36,999 41,410
Payroll and other taxes withheld and accrued 63,155 37,943
Income taxes payable 52,037 88,966
Deferred income taxes 120,081 120,081
------------ ------------
Total current liabilities 2,107,226 1,278,520
------------ ------------
Common stock, par value .33-1/3 per share.
Authorized 10,000,000 shares;
Issued 1,514,937 shares on December 31, 2002 and June 30, 2002,
outstanding 1,019,861 on December 31, 2002 and June 30, 2002 504,979 504,979
Capital in excess of par value 10,463,239 10,465,878
Accumulated other comprehensive loss (26,060) (29,079)
Retained earnings 24,584,010 24,848,858
------------ -------------
35,526,168 35,790,636
Less common stock subscribed (1,117,325) (1,117,325)
Cost of 495,076 shares on December 31, 2002 and 480,376
on June 30, 2002 of common stock in treasury (7,907,384) (7,618,869)
------------ ------------
Total stockholder's equity 26,501,459 27,054,442
------------ ------------
Total liabilities and
stockholders' equity $ 28,608,685 $ 28,332,962
============ ============
See accompanying notes to the consolidated financial statements.
2
ESPEY MFG. & ELECTRONICS CORP.
Consolidated Statements of Operations
Three and Six Months Ended December 31, 2002 and 2001
--------------------------------------------------------------------------
Unaudited Unaudited
Three Months Six Months
2002 2001 2002 2001
--------------------------- -------------------------
Net Sales $ 5,374,456 $ 5,199,517 $ 9,865,815 $ 9,785,032
Cost of sales 5,449,710 4,605,948 9,151,848 8,583,878
----------- ------------ ----------- -----------
Gross profit (loss) (75,254) 593,569 713,967 1,201,154
Selling, general and
administrative expenses 537,346 527,101 966,653 921,134
----------- ------------ ----------- -----------
Operating income (loss) (612,600) 66,468 (252,686) 280,020
----------- ------------ ----------- -----------
Other income
Interest and dividend income 38,097 48,726 83,366 115,205
Sundry income 18,058 1,940 21,602 12,895
----------- ------------ ----------- -----------
56,155 50,666 104,968 128,100
----------- ------------ ----------- -----------
Income (loss) before income taxes (556,445) 117,134 (147,718) 408,120
Provision (benefit) for income taxes (139,111) 35,135 (36,929) 122,431
----------- ------------ ----------- -----------
Net Income (loss) $ (417,334) $ 81,999 $ (110,789) $ 285,689
=========== =========== =========== ===========
Income per share:
Basic and dilutive
income (loss) per share $ ( .41) $ .08 $ (.11) $ .28
----------- ------------ ----------- -----------
Weighted average common
shares outstanding
Basic 1,026,090 1,029,461 1,030,326 1,029,461
Diluted 1,028,748 1,034,640 1,033,104 1,033,658
========= ========= ========= =========
See accompanying notes to the consolidated financial statements
3
ESPEY MFG. & ELECTRONICS CORP.
Consolidated Statements of Cash Flows
Six Months Ended December 31, 2002 and 2001
Unaudited
December 31,
2002 2001
---------------- ----------------
Cash flows from operating activities:
Net income (loss) $ (110,789) $ 285,689
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation 250,381 247,505
(Gain)/Loss on disposal of assets -- 250
Deferred Income Tax Benefit -- 872
Changes in assets and liabilities:
Increase in receivables (2,585,209) (625,180)
Decrease in inventories 1,466,438 1,389,143
Decrease (Increase) in prepaid expenses and other current assets 24,026 (81,292)
Increase in accounts payable 563,191 868,933
Increase (Decrease) in accrued salaries, wages and commissions 13,614 (5,338)
Decrease in accrued employee insurance costs (536) (61,527)
Decrease in other accrued expenses (4,411) (16,470)
Decrease in vacation accrual (4,464) (23,448)
Increase in payroll & other taxes withheld and accrued 25,212 24,916
Increase (Decrease) in income taxes payable (36,929) 80,193
Increase in ESOP contributions 273,028 269,876
----------- -----------
Net cash provided by (used in)
operating activities (126,448) 2,354,122
----------- -----------
Cash flows from investing activities:
Proceeds from maturity of investment securities -- 399,128
Additions to property, plant & equipment (247,117) (238,448)
Proceeds on sale of assets -- 50
----------- -----------
Net cash provided by (used in)
investing activities (247,117) 160,730
----------- -----------
Cash flows from financing activities:
Dividends paid on common stock (154,059) (153,678)
Purchase of treasury stock (296,455) --
Proceeds from exercise of stock options 5,300 --
----------- -----------
Net cash used in
financing activities (445,214) (153,678)
----------- -----------
Increase (Decrease) in cash and cash equivalents (818,779) 2,361,174
Cash and cash equivalents, beginning of period 9,192,962 5,200,736
----------- -----------
Cash and cash equivalents, end of period 8,374,183 $ 7,561,910
----------- -----------
Income taxes paid $ -- $ 2,238
=========== ===========
Noncash financing activities:
Dividend Payable $ -- $ 154,419
=========== ===========
See accompanying notes to the consolidated financial statements
4
ESPEY MFG. & ELECTRONICS CORP.
Notes to Consolidated Financial Statements
---------------------------------------------------------
1. In the opinion of management the accompanying unaudited consolidated
financial statements contain all adjustments (consisting of only normal
recurring adjustments) necessary for a fair presentation of the results for
such periods. The results for any interim period are not necessarily
indicative of the results to be expected for the full fiscal year. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. These financial statements
should be read in conjunction with the Company's most recent audited
financial statements included in its 2002 Form 10-K.
2. Other income consists principally of interest on money market accounts and
dividends on an equity security.
3. For purposes of the statements of cash flows, the Company considers all
liquid debt instruments with original maturities of three months or less to
be cash equivalents.
4. In fiscal 1989 the Company established an Employee Stock Ownership Plan
(ESOP) for eligible non-union employees. The ESOP used the proceeds of loan
from the Company to purchase 316,224 shares of the Company's common stock
for approximately $8.4 million and the Company contributed approximately
$400,000 to the ESOP which was used by the ESOP to purchase an additional
15,000 shares of the Company's common stock. As of December 31, 2002 there
were 216,477 shares allocated to participants.
5. Total comprehensive income consists of:
Three Months Ended Six Months Ended
December 31, December 31,
2002 2001 2002 2001
------------ ------------ --------- ---------
Net income (loss) $(417,334) $ 81,999 $(110,789) $ 285,689
Accumulated other comprehensive income 4,160 9,880 3,019 20,800
------------ ------------ --------- ---------
Total comprehensive income (loss) $(413,174) $ 91,879 $(107,770) $ 306,489
========= ======== ========= =========
5
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Critical Accounting Policies and Estimates
We believe our most critical accounting policies include revenue recognition and
cost estimation on our contracts.
Revenue recognition and cost estimation
A significant portion of our business is comprised of development and production
contracts which are accounted for under the provisions of the American Institute
of Certified Public Accountants (AICPA) Statement of Position No. 81-1,
"Accounting for Performance of Construction-Type and Certain Production-Type
Contracts." Generally revenue on long-term fixed-price contracts are recorded on
a percentage of completion basis using units of delivery as the measurement
basis for progress toward completion.
Contract accounting requires judgment relative to estimating costs and making
assumptions related to technical issues and delivery schedule. Contract costs
include material, subcontract costs, labor and an allocation of indirect costs.
The estimation of cost at completion of a contract is subject to numerous
variables involving contract costs and estimates as to the length of time to
complete the contract. Given the significance of the estimation processes and
judgments described above, it is possible that materially different amounts of
contract costs could be recorded if different assumptions were used in the
estimation of cost at completion. When a change in contract value, contract
performance status, or estimated cost is determined, changes are reflected in
current period earnings.
Results of Operations
Net sales for the six months ended December 31, 2002 were $ 9,865,815 as
compared to $9,785,032 for the same period in 2001, a .8% increase. Net sales
for the three months ended December 31, 2002 were $5,374,456 as compared to
$5,199,517 for the same period in 2001, a 3% increase. The Company's increase in
sales for the three and six month periods ended December 31, 2002, as compared
to December 31, 2001, is due primarily to an increase in radar transmitter
component shipments.
During the first six months of fiscal 2003 gross profits decreased to $713,967
as compared with $1,201,154 for the first six months of fiscal 2002. For the
three months ended December 31, 2002 gross profit (loss) decreased to $(75,254)
as compared to $593,569 for the same period in 2001.
Net income (loss) for the six months ended December 31, 2002 was $(110,789) or
$(.11) per share compared to $285,689 or $.28 per share for the corresponding
period ended December 31, 2001. For the three months ended December 31, 2002 the
net loss was $(417,334) or $(.41) as compared to net income of $81,999 or $.08
per share for the same period in 2001.
The decrease in gross profit and net income for the three and six-month periods
ended December 31, 2002, was primarily the result of higher than expected
product development costs associated with a new customer specific product. We
expect the investment in this product to be successful and improve the operating
results of the Company future production orders are received. Management
continues to evaluate the Company's workforce to ensure that production and
overall execution of the backlog orders and additional anticipated orders are
successfully performed. Employment at December 31, 2002 and 2001 was 190 people.
The backlog at December 31, 2002 was approximately $25.5 million as compared to
$25.9 at December 31, 2001. New orders for the six-month period ended December
31, 2002 were approximately $10.7 million.
Selling, general and administrative expenses were $966,653 for the six months
ended December 31, 2002, an increase of $45,520 as compared to the six months
ended December 31, 2001. Selling, general and administrative expenses were
$537,346 for the three months ended December 31, 2002, an increase of $10,245 as
compared to the three months ended December 31, 2001. The increase is primarily
due to an increase in Director's fees, professional fees and selling expenses.
Other income for the six months ended December 31, 2002 decreased compared to
the corresponding period ended December 31, 2001. The decrease is primarily due
to lower interest rates on the Company's money market accounts. For the three
months ended December 31, 2002 other income remained relatively consistent as
compared to the same period in 2001. The Company does not believe there is any
significant risk associated with its investment policy, since a majority of the
investments are represented by preferred equity securities and a money market
account.
6
Liquidity and Capital Resources
As of December 31, 2002, the Company had working capital of $23.2 million
compared to $22.7 million at December 31, 2001. The Company meets its short-term
financing needs through cash from operations and when necessary, from its
existing cash and short term investments.
The table below presents the summary of cash flow for the periods indicated:
Six Months Ended December 31,
2002 2001
------------- -------------
Net cash provided by (used in) operating activities $(126,447) $ 2,354,122
Net cash provided by (used in) investing activities (247,117) 160,730
Net cash used in financing activities (445,214) (153,678)
Net cash provided by operating activities fluctuates between periods primarily
as a result of differences in net income, the timing of shipments and the
collection of accounts receivable, changes in inventory, level of sales and
payment of accounts payable. The decrease in net cash provided by (used in)
investing activities is due to the sale of an investment security in 2001. The
increase in net cash used in financing activities is due to an increase in
treasury stock purchases.
The Company currently believes that the cash generated from operations and when
necessary, from cash and cash equivalents, will be sufficient to meet its
long-term funding requirements. Management, if necessary, has at its disposal a
$3,000,000 line of credit to help fund further growth. For the first half of
fiscal 2003 capital expenditures were approximately $247,000.
Since the debt of the Company's ESOP is not to an outside party the Company has
eliminated from the Consolidated Statements of Income the offsetting items of
interest income and interest expenses relating to the ESOP.
During the six months ended December 31, 2002 the Company repurchased 15,000
shares of common stock for $296,455. Under existing Board authorizations, as of
December 31, 2002, $1,000,000 could be utilized to repurchase the Company's
common stock.
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995
It should be noted that in this Management's Discussion and Analysis of
Financial Condition and Results of Operations are "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, and are made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. The terms "believe," "anticipate," "intend," "goal,"
"expect," and similar expressions may identify forward-looking statements. These
forward-looking statements represent the Company's current expectations or
beliefs concerning future events. The matters covered by these statements are
subject to certain risks and uncertainties that could cause actual results to
differ materially from those set forth in the forward-looking statements,
including the Company's dependence on timely development, introduction and
customer acceptance of new products, the impact of competition and price
erosion, as well as supply and manufacturing constraints and other risks and
uncertainties. The foregoing list should not be construed as exhaustive, and the
Company disclaims any obligation subsequently to revise any forward-looking
statements to reflect events or circumstances after the date of such statements
or to reflect the occurrence of anticipated or unanticipated events. The Company
wishes to caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made.
Item 4. Controls and Procedures
Within the 90-day period prior to the filing date of this report, an evaluation
was conducted under the supervision of and with the participation of Espey's
management, including the Chief Executive Officer and the Chief Financial
Officer, of the effectiveness of the design and operation of our disclosure
controls and procedures. Based on that evaluation, the Chief Executive Officer
and the Chief Financial Officer have concluded that our disclosure controls and
procedures are effective to ensure that all material information related to the
company and its consolidated subsidiary is made known to them, particularly
during the period when our periodic reports are being prepared. Subsequent to
the date the Chief Executive Officer and Chief Financial Officer completed their
evaluation, there have been no significant changes in our internal controls, or
in other factors that could significantly affect the internal controls,
including any corrective actions with regard to significant deficiencies and
material weaknesses. 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.
7
ESPEY MFG. & ELECTRONICS CORP.
PART II: Other Information and Signatures
Item 4. Submission of Matters to a Vote of Security Holders
a) The Company's Annual Meeting of Shareholders (the "Annual
Meeting") was held on November 22, 2002.
b) Proxies for the Annual Meeting were solicited pursuant to
Regulation 14A under the Securities Exchange Act of 1934,
as amended. There were no solicitations in opposition to
management's nominees listed in the proxy statement. All
three nominees listed in the proxy statement were elected.
c) The following matters were voted upon at the annual
meeting: The election of three Class A directors. The
votes were cast as follows:
Shares Voted Against
Nominee: Shares Voted For: or withheld
-------- ----------------- --------------------
Paul J. Corr 934,935 4,934
Barry Pinsley 934,768 5,101
Michael W. Wool 934,935 4,934
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
None
S I G N A T U R E S
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.
ESPEY MFG. & ELECTRONICS CORP.
/s/ Howard Pinsley
--------------------------------
Howard Pinsley, President and
Chief Executive Officer
/s/ David O'Neil
--------------------------------
David O'Neil, Treasurer and
Principal Financial Officer
10 February 2003
- ----------------
Date
8
Certification of Chief Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Howard Pinsley, certify that:
1. I have reviewed this annual report on Form 10-Q of Espey Mfg. & Electronics
Corp.
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; and
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: February 10, 2003
/s/Howard Pinsley
-----------------------
Howard Pinsley,
President and
Chief Executive Officer
9
Certification of Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, David A. O'Neil, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Espey Mfg. &
Electronics Corp.
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; and
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: February 10, 2003
/s/David A. O'Neil
---------------------------
David A. O'Neil,
Treasurer and
Principal Financial Officer
10
Certification of Chief Executive Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with this quarterly report on Form 10-Q of Espey Mfg. &
Electronics Corp. (the "Company"), I, Howard Pinsely, President and Chief
Executive Officer of the Company, certify , pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:
1. The report fully complies with the requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and
2. The information contained in this report fairly presents, in all material
respects, the financial condition and results of operations of the Company
Date: February 10, 2003
/s/Howard Pinsley
---------------------
Howard Pinsley,
President and
Chief Executive Officer
Certification of Chief Financial Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with this quarterly report on Form 10-Q of Espey Mfg. &
Electronics Corp. (the "Company"), I, David A. O'Neil, Treasurer and
Principal Financial Officer of the Company, certify, pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, that:
1. The report fully complies with the requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and
2. The information contained in this report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
Date: February 10, 2003
/s/David A. O'Neil
---------------------------
David A. O'Neil,
Treasurer and
Principal Financial Officer
11