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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 March 31, 2003
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 May 5, 2003: 1,020,043.
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 [_]
ESPEY MFG. & ELECTRONICS CORP.
I N D E X
PART I FINANCIAL INFORMATION PAGE
Item 1 Financial Statements:
Consolidated Balance Sheets -
March 31, 2003 and June 30, 2002 1
Consolidated Statements of Income -
Three and Nine Months Ended
March 31, 2003 and 2002 3
Consolidated Statements of Cash Flows -
Nine Months Ended March 31, 2003 and 2002 4
Notes to Consolidated Financial Statements 5
Item 2 Management's Discussion and Analysis of
Financial Condition and Results of Operations. 6
Item 4 Controls and Procedures 8
PART II OTHER INFORMATION 9
SIGNATURES 9
ESPEY MFG. & ELECTRONICS CORP.
Consolidated Balance Sheets
March 31, 2003 and June 30, 2002
------------------------------------
A S S E T S
Unaudited
2003 2002
March 31 June 30
------------ -----------
CURRENT ASSETS:
Cash and cash equivalents $ 9,068,096 $ 9,192,962
Investment securities - 368,000
Trade accounts receivable, net 5,262,417 2,409,706
Other receivables 3,719 13,413
----------- -----------
Total Receivables 5,266,136 2,423,119
----------- -----------
Inventories:
Raw materials and supplies 1,561,529 1,424,278
Work-in-process 2,662,125 4,298,988
Costs relating to contracts in
process, net of advance payments of
$2,754,528 at March 31, 2003 and
$2,194,269 at June 30, 2002 7,192,896 7,017,529
----------- -----------
Total Inventories 11,416,550 12,740,795
----------- -----------
Deferred income taxes 63,849 85,773
Prepaid expenses and other current assets 169,663 198,061
----------- -----------
Total Current Assets 25,984,294 25,008,710
----------- -----------
Net property, plant and equipment 3,341,554 3,324,252
----------- -----------
Total Assets $29,325,848 $28,332,962
=========== ===========
See accompanying notes to the consolidated financial statements
(Continued)
1
ESPEY MFG. & ELECTRONICS CORP.
Consolidated Balance Sheets, Continued
March 31, 2003 and June 30, 2002
------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Unaudited
2003 2002
March 31 June 30
------------ -----------
CURRENT LIABILITIES:
Accounts payable $ 912,936 $ 497,454
Accrued expenses:
Salaries, wages and commissions 86,062 86,881
Employees' insurance costs 5,241 6,887
Vacation 434,669 398,898
ESOP payable 409,542 -
Other 41,785 41,410
Payroll and other taxes withheld and accrued 44,846 37,943
Income taxes payable 243,899 88,966
Deferred income taxes 120,081 120,081
------------ -----------
Total Current Liabilities 2,299,061 1,278,520
STOCKHOLDERS' EQUITY:
Common stock, par value .33-1/3 per share.
Authorized 10,000,000 shares; issued 1,514,937
shares on March 31, 2003 and June 30, 2002.
Outstanding 1,020,043 and 1,034,561 on
March 31, 2003 and June 30, 2002, respectively 504,979 504,979
Accumulated other comprehensive loss - (29,079)
Capital in excess of par value 10,459,279 10,465,878
Retained earnings 25,083,061 24,848,858
------------ -----------
Less: Common stock subscribed (1,117,325) (1,117,325)
Cost of 494,894 and 480,376 shares on
March 31, 2003 and June 30, 2002
respectively of common stock in treasury (7,903,207) (7,618,869)
------------ -----------
Total Stockholders' Equity 27,026,787 27,054,442
------------ -----------
Total Liabilities And
Stockholders' Equity $29,325,848 $28,332,962
============ ===========
2
See accompanying notes to the consolidated financial statements
ESPEY MFG. & ELECTRONICS CORP.
Consolidated Statements of Income
Three and Nine Months Ended March 31, 2003 and 2002
------------------------------------------------------
Unaudited Unaudited
Three Months Nine Months
2003 2002 2003 2002
----------------------------- -------------------------------
Net sales $ 5,707,503 $ 4,616,587 $ 15,573,319 $ 14,401,620
Cost of sales 4,484,397 3,916,571 13,636,246 12,500,450
----------- ----------- ----------- -----------
Gross profit 1,223,106 700,016 1,937,073 1,901,170
Selling, general and
administrative expenses 479,353 408,350 1,446,007 1,329,484
----------- ----------- ----------- -----------
Operating income 743,753 291,666 491,066 571,686
----------- ----------- ----------- -----------
Other income
Interest and
dividend income 29,639 38,179 113,006 153,385
Other (5,944) (26,061) 15,658 (13,167)
----------- ----------- ----------- -----------
23,695 12,118 128,664 140,218
----------- ----------- ----------- -----------
Income before income taxes 767,448 303,784 619,730 711,904
Provision for income taxes 191,862 91,140 154,933 213,571
----------- ----------- ----------- -----------
Net Income $ 575,586 $ 212,644 $ 464,797 $ 498,333
=========== =========== =========== ===========
Income per share:
Basic and diluted
income per share $ .56 $ .20 $ .45 $ .48
----------- ----------- ----------- -----------
Weighted average number
of shares outstanding
Basic 1,020,032 1,029,850 1,026,945 1,029,589
Diluted 1,022,742 1,034,961 1,029,706 1,034,083
=========== =========== =========== ===========
See accompanying notes to the consolidated financial statements
3
ESPEY MFG. & ELECTRONICS CORP.
Consolidated Statements of Cash Flows
Nine Months Ended March 31, 2003 and 2002
Unaudited
March 31,
2003 2002
----------- -----------
Cash Flows From Operating Activities:
Net income $ 464,797 $ 498,333
Adjustments to reconcile net income to net cash provided by
(used in)operating activities:
Depreciation 372,722 392,422
Loss on disposal of assets - 27,082
Loss on sale of investment securities 15,817 -
Deferred income tax benefit - 872
Changes in assets and liabilities:
(Increase)Decrease in receivables (2,843,018) 140,292
Decrease in inventories 1,324,246 2,728,387
Decrease (Increase) in prepaid expenses
and other current assets 28,398 (95,138)
Increase in accounts payable 415,482 227,803
Decrease in accrued salaries, wages
and commissions (819) (39,777)
Decrease in accrued employee
insurance costs (1,646) (55,432)
Increase (Decrease) in other accrued expenses 375 (3,689)
Increase in vacation accrual 35,771 3,329
Increase (Decrease) in payroll & other
taxes withheld and accrued 6,903 (8,974)
Increase in income taxes payable 154,933 171,334
Increase in ESOP contributions 409,541 404,814
----------- -----------
Net cash provided by
operating activities 383,502 4,391,658
----------- -----------
Cash Flows From Investing Activities:
Proceeds from sale of investment securities 403,188 399,128
Additions to property, plant & equipment (390,024) (330,975)
Proceeds on sale of assets, net - 11,950
----------- -----------
Net cash provided by
investing activities 13,164 80,103
----------- -----------
Cash Flows From Financing Activities:
Dividends on common stock (230,594) (230,888)
Purchase of treasury stock (304,188) -
Proceeds from exercise of stock options 13,250 33,126
----------- -----------
Net cash used in
financing activities (521,532) (197,762)
----------- -----------
(Decrease) Increase in cash and cash equivalents (124,866) 4,273,999
Cash and cash equivalents, beginning of period 9,192,962 5,200,735
----------- -----------
Cash and cash equivalents, end of period 9,068,096 9,474,734
----------- -----------
Income Taxes Paid $ - $ 42,238
=========== ===========
Noncash Financing Activities
Dividends Payable $ - $ 77,209
=========== ===========
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 for 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 generally accepted in the United States of America 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 equity securities.
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. Basic earnings per share excludes dilution and is computed by dividing
income available to common stockholders by the weighted average number of
common shares outstanding for the period. Diluted earnings per share
reflects the potential dilution that could occur if securities or other
contracts to issue Common Stock were exercised or converted into Common
Stock or resulted in the issuance of Common Stock that then shared in the
Income of the Company.
5. In fiscal 1989 the Company established an Employee Stock Ownership Plan
(ESOP) for eligible non-union employees. The ESOP used the proceeds of a
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 March 31, 2003 there were 209,550 shares allocated to participants.
6. Total comprehensive income consists of:
Three Months Ended Nine Months Ended
March 31, March 31,
2003 2002 2003 2002
-------- -------- ------ ------
Net income $575,586 $212,644 $464,797 $498,333
Accumulated other comprehensive income:
Unrealized gain (loss) on
available for sale securities - (11,440) - 9,360
-------- -------- --------- --------
Total comprehensive income $575,586 $201,204 $464,797 $507,693
======== ======== ========= ========
7. In December 2002, the FASB issued Statement of Financial Accounting
Standards No. 148 (FAS 148) "Accounting for Stock-Based Compensation -
Transition and Disclosure." FAS 148 amends SFAS No. 123, "Accounting for
Stock-Based Compensation." The Company has elected to apply Accounting
Principles Board Opinion No. 25 "Accounting for Stock Issued to Employees,"
in accounting for the Plan. Under APB 25, the Company uses the intrinsic
value method of accounting for stock options. The initial impact of FAS 148
on pro forma earnings per share may not be representative of the effect on
income in future years because options vest over several years and
additional option grants may be made each year.
The following table illustrates the effect on net income and earnings per
share if the Company had applied the fair value recognition provisions of
FASB Statement No. 123, "Accounting for Stock-Based Compensation," to
stock-based employee compensation.
3 Months Ended 9 Months Ended
March 31 March 31
2003 2002 2003 2002
----------------------- ----------------------
Net income as reported $ 575,586 $ 212,644 $ 464,797 $ 498,333
Deduct: Total stock-based
employee compensation
expense determined under
fair value based method
for all awards, net of
related tax effects (9,176) (8,479) (27,216) (24,893)
---------- ---------- ---------- -----------
Pro forma net income $ 566,410 $ 204,165 $ 437,581 $ 473,440
========== ========== ========== ===========
Earnings per share:
Basic-as reported $ .56 $ .20 $ .45 $ .48
========== ========== ========== ===========
Basic-pro forma $ .55 $ .20 $ .43 $ .46
========== ========== ========== ===========
Diluted-as reported $ .56 $ .20 $ .45 $ .48
========== ========== ========== ===========
Diluted-pro forma $ .55 $ .20 $ .43 $ .46
========== ========== ========== ===========
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, based on
changes in circumstances, in the estimation of cost at completion. When a change
in contract value or estimated cost is determined, changes are reflected in
current period earnings.
Results of Operations
Net sales for the nine months ended March 31, 2003, (fiscal 2003) were
$15,573,319 as compared to $14,401,620 for the same period in 2002, an 8%
increase. Net sales for the three months ended March 31, 2003 were $5,707,503 as
compared to $4,616,587 for the same period in 2002, a 24% increase. The
Company's increase in sales for the three and nine month periods ended March 31,
2003, as compared to March 31, 2002, is due to an increase in power supply,
transmitter, and transformer component shipments.
During the first nine months of fiscal 2003 gross profits increased to
$1,937,073 as compared with $1,901,170 for the first nine months of fiscal 2002.
The increase in gross profit for the nine-month period ended March 31, 2003, as
compared to the nine months ended March 31, 2002, was the result of an 8%
increase in sales partially offset by higher cost of sales as a percentage of
total sales for the period. The cost of sales increase was primarily due to
higher engineering and prototype development costs.
Net income for the nine months ended March 31, 2003 was $464,797 or $.45 per
share compared to $498,333 or $.48 per share for the corresponding period ended
March 31, 2002. The decrease in net income for the nine-month period was caused
by an increase of $117,000 in selling, general and administrative expenses
partially offset by the slight increase in gross profit. (See discussion below
on selling, general and administrative costs)
For the three months ended March 31, 2003 gross profit increased to $1,223,106
as compared to $700,016 for the same period in 2002. For the three months ended
March 31, 2003 net income increased to $575,586 as compared to $212,644 for the
same period in 2002. The increase in gross profit and net income for the
three-month period ended March 31, 2003 as compared to the same period last year
was the result of a 24% increase in sales and a favorable mix of product
shipments. The favorable product mix occurred as the Company, during this
three-month period, shipped more production orders, which normally have higher
profit margins, than engineering design and prototype development orders.
6
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 in a cost effective manner.
Employment at March 31, 2003 was 192 people compared to March 31, 2002 when 189
people were employed.
The backlog at March 31, 2003 was approximately $ 22.6 million a decrease of
approximately $3.6 million from the prior year. Management continues to market
the engineering capabilities and products of the Company. Currently,
approximately $30 million in quotations are outstanding to various customers of
the Company. New orders for the quarter totaled approximately $2.8 million.
Selling, general and administrative expenses were $1,446,007 for the nine months
ended March 31, 2003, an increase of $116,523, or 8.8%, as compared to the nine
months ended March 31, 2002. Selling, general and administrative expenses were
$479,353 for the three months ended March 31, 2003, an increase of $71,003, or
17.4%, compared to the three months ended March 31, 2002. The increase is
primarily due to an increase in selling, energy, and insurance costs.
Other income for the nine months ended March 31, 2003 decreased as compared to
the nine months ended March 31, 2002 due to lower interest income for both
periods associated with lower interest rates. Other income for the three months
ended March 31, 2003 increased to $23,695 as compared to $12,118 for the three
months ended March 31, 2002. This increase is due to a loss on disposal of fixed
assets during the 2002 third quarter. The Company does not believe there is
significant risk associated with its investment policy, since a majority of the
investments are preferred equity securities and a money market account.
Liquidity and Capital Resources
As of March 31, 2003, the Company had working capital of $ 23.7 million compared
to $23.0 million at March 31, 2002. The Company meets its short-term financing
needs through cash from operations and when necessary, from its existing cash
and cash equivalents.
The table below presents the summary of cash flow for the periods indicated:
Nine Months Ended March 31,
-----------------------------
2003 2002
-------- --------
Net cash provided by operating activities $383,502 $4,391,658
Net cash provided by investing activities 13,164 80,103
Net cash used in financing activities (521,532) (197,762)
Net cash provided by operating activities fluctuates between periods primarily
as a result of differences in net income, the timing of the collection of
accounts receivable, purchase of inventory, level of sales and payment of
accounts payable. The decrease in net cash provided by investing activities is
due to the increase in additions to plant, property and equipment. The increase
in net cash used in financing activities is due to increased treasury stock
purchases.
The Company currently believes that the cash generated from operations and when
necessary, from cash and cash equivalents or advance payments from customers,
will be sufficient to meet its long-term funding requirements. Management if
necessary, has at its disposal an uncommitted $3,000,000 line of credit to help
fund further growth. For the first nine months of fiscal 2003 capital
expenditures were approximately $390,000.
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 expense relating to ESOP.
7
During the nine months ended March 31, 2003 and 2002, the Company repurchased
15,518 shares of its common stock from the Company's ESOP and through other
public transactions for a total of $303,188. As of March 31, 2003, under
existing Board authorization, $992,267 could be utilized to repurchase shares of
company stock. As of March 31, 2003, 1,000 stock options were exercised under
the Company's existing stock option plan.
New Accounting Standards
In December 2002, the FASB issued SFAS No. 148, Accounting for Stock Based
Compensation--Transition and Disclosure, an amendment to FASB Statement No. 123.
This Statement amends SFAS No. 123, Accounting for Stock-Based Compensation, to
provide alternative methods of transition for a voluntary change to the fair
value based method of accounting for stock-based employee compensation. In
addition, this Statement amends the disclosure requirements of Statement No. 123
to require 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. Finally, SFAS No. 148 amends APB
Opinion No. 28, Interim Financial Reporting, to require disclosure about those
effects in interim financial reporting. For entities that voluntarily change to
the fair value based method of accounting for stock-based employee compensation,
the transition provisions are effective for fiscal years ending after December
15, 2002. For all other companies, the disclosure provisions and the amendment
to APB No. 28 are effective for interim periods beginning after December 15,
2002. The Company does not intend to adopt the transition provisions of the
Statement and has made all required disclosures as of March 31, 2003.
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.
8
ESPEY MFG. & ELECTRONICS CORP.
PART II: Other Information and Signatures
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
None
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
May 7, 2003
- ---------------
Date
9
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 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: May 7, 2003
/s/Howard Pinsley
----------------------------------
Howard Pinsley,
President and
Chief Executive Officer
10
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: May 7, 2003
/s/David A. O'Neil
----------------------------------
David A. O'Neil,
Treasurer and
Principal Financial Officer
11
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 Pinsley, 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: May 7, 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: May 7, 2003
/s/David A. O'Neil
----------------------------------
David A. O'Neil,
Treasurer and
Principal Financial Officer
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