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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 Quarter Ended September 30, 2002 Commission File Number 0-4539
TRANS-INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-2598139
-------- ----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2637 S. Adams Road, Rochester Hills, MI 48309
---------------------------------------------
(Address) (Zip Code)
Registrant's Telephone Number, including Area Code (248) 852-1990
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 and Exchange Act
of 1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days. YES X NO
--- ---
The number of shares outstanding of registrant's Common stock, par value $.10
per share, at September 30, 2002 was 3,139,737.
1
TRANS-INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
FORM 10-Q - FOR THE QUARTER ENDED SEPTEMBER 30, 2002
INDEX
PART I. Financial Information
Item 1. FINANCIAL STATEMENTS
A. Consolidated Statements of Operations ---
Three months ended September 30, 2002 and 2001.
Nine months ended September 30, 2002 and 2001.
B. Consolidated Statements of Comprehensive Loss ---
Nine months ended September 30, 2002 and 2001.
C. Consolidated Balance Sheets ---
September 30, 2002 and December 31, 2001.
D. Consolidated Statements of Cash Flows ---
Nine months ended September 30, 2002 and 2001.
E. Notes to Consolidated Financial Statements.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Item 4. CONTROLS AND PROCEDURES
EXHIBITS
EX-99.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
2
TRANS-INDUSTRIES, INC. AND SUBSIDIARIES
A.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
For 3 Months Ended: For 9 Months Ended:
------------------- -------------------
9/30/02 9/30/01 9/30/02 9/30/01
------- ------- ------- -------
1. Gross sales less discounts, returns and allowances $ 7,603,082 $ 8,317,115 $ 24,658,201 $ 27,370,879
2. Cost of goods sold 5,592,213 6,293,859 17,452,601 20,873,716
------------ ------------ ------------ ------------
3. Gross Profit 2,010,869 2,023,256 7,205,600 6,497,163
4. Selling, general and administrative exp. 2,518,781 2,414,991 7,307,764 7,508,996
5. Restructuring costs (note 8) 0 0 0 700,457
------------ ------------ ------------ ------------
6. Operating income/(loss) (507,912) (391,735) (102,164) (1,712,290)
7. Other (income)/expense
Interest expense 163,743 296,310 596,253 946,104
Other income (13,663) (6,567) (26,793) (59,125)
------------ ------------ ------------ ------------
Total other expense 150,080 289,743 569,460 886,979
------------ ------------ ------------ ------------
8. Loss before income taxes (657,992) (681,478) (671,624) (2,599,269)
9. Income tax benefit (166,000) (143,000) (532,000) (490,000)
------------ ------------ ------------ ------------
10. Net Loss $ (491,992) $ (538,478) $ (139,624) $ (2,109,269)
============ ============ ============ ============
11. Loss per share: (note 6)
Basic $ (.16) $ (.17) $ (.04) $ (.67)
Diluted $ (.16) $ (.17) $ (.04) $ (.67)
============ ============ ============ ============
12. Dividends per share $ .00 $ .00 $ .00 $ .00
============ ============ ============ ============
See Notes to Financial Statements
3
TRANS-INDUSTRIES, INC. AND SUBSIDIARIES
B.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited)
NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
2002 2001
---------- ----------
Net Loss $ (139,624) $ (2,109,269)
Other comprehensive loss:
Equity adjustment from foreign
currency translation. (24,200) (7,192)
------------ ------------
Comprehensive loss $ (163,824) $ (2,116,461)
============ ============
See Notes to Financial Statements
4
TRANS-INDUSTRIES, INC. AND SUBSIDIARIES
C.
CONSOLIDATED BALANCE SHEETS
ASSETS
------
Current Assets 9/30/02 12/31/01
- -------------- (Unaudited) (Audited)
----------- ---------
Cash $ 72,970 $ 161,782
Accounts receivable, Net 8,253,308 8,856,017
Inventories (Note 2) 11,437,945 11,306,388
Prepaid expenses 310,597 392,703
Deferred income taxes 997,000 997,000
Refundable Income tax 0 764,606
------------ ------------
Total current assets 21,071,820 22,478,496
Property, Plant & Equipment, at Cost
- ------------------------------------
Land 220,564 306,881
Land Improvements 126,660 126,660
Buildings 6,027,355 6,019,461
Machinery & equipment 10,850,803 10,441,646
------------ ------------
17,225,382 16,894,648
Less: accumulated
depreciation (12,789,169) (12,156,127)
------------ ------------
Net plant and equipment 4,436,213 4,738,521
Other Assets
- ------------
Investments in affiliates 68,484 68,484
Patents, licenses & trademarks,
net of accumulated amortization 17,566 21,468
Excess of cost of investment in
stock of subsidiary over equity in
underlying net assets of acquisition 150,369 150,369
Deferred income taxes 0 824,000
------------ ------------
Total assets $ 25,744,452 $ 28,281,338
------------ ------------
LIABILITIES AND STOCKHOLDERS EQUITY
-----------------------------------
Current Liabilities 9/30/02 12/31/01
- ------------------- (Unaudited) (Audited)
----------- ---------
Notes Payable (Note 5) $ 6,339,520 $ 7,669,746
Current installments
- Long term debt (Note 5) 986,667 1,077,112
Accounts payable - trade 3,432,808 3,526,513
Accrued liabilities 1,316,439 1,529,727
Income taxes 0 0
------------ ------------
Total current liabilities 12,075,434 13,803,098
Deferred income taxes - Non-current 57,000 0
Long term debt
- --------------
Current installments shown above (Note 5) 3,333,186 4,044,584
Other non-current liabilities 258,248 249,248
Stockholders' Equity
- --------------------
Preferred stock of $1.00 par value
per share - authorized 500,000
shares; 19,000 shares issued and
outstanding at 9/30/02 19,000 19,000
Common stock of $.10 par value per
share - authorized 10,000,000 shares;
3,139,737 shares issued and 3,139,737
outstanding at 9/30/02 313,974 313,974
Additional paid-in capital 5,953,081 5,953,081
Retained earnings 3,735,489 3,875,113
Foreign currency translation (960) 23,240
------------ ------------
10,020,584 10,184,408
------------ ------------
Total liabilities and stockholders' equity $ 25,744,452 $ 28,281,338
------------ ------------
See Notes to Financial Statements.
5
TRANS-INDUSTRIES, INC.
Consolidated Statements of Cash Flows
D. For the Nine Months Ended September 30, 2002 and 2001
2002 2001
---- ----
(Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $ (139,624) $(2,109,269)
Adjustments to reconcile net loss
to net cash used by operations:
Depreciation/Amortization 704,981 1,004,281
Decrease (increase) in accts. receiv. 602,709 1,453,856
Decrease (increase) in refundable income tax 764,606 -0-
Decrease (increase) in deferred income taxes 1,017,000 -0-
Decrease (increase) in inventory (131,557) 1,170,665
Decrease (increase) in prepaid exp. 82,106 (37,766)
Increase (decrease) in accts. payable (93,705) (2,704,563)
Increase (decrease) in accr. liab. (213,288) (305,845)
Increase (decrease) in income taxes (136,000) (475,233)
(Gain) Loss on sale of Property and Equipment (18,212) 649,244
Other 692 14,525
----------- -----------
Net Cash Provided (Used) by Operations 2,439,708 (1,340,105)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment (487,702) (398,756)
Proceeds from sale of Property & Equip. 106,451 1,010,611
----------- -----------
Net Cash Provided (Used) by Investing (381,251) 611,855
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance preferred stock -0- 1,900,000
Net increase (repayment) of long-term
borrowing. (792,843) (644,186)
Net proceeds (payment) of credit line (1,330,226) (716,504)
----------- -----------
Net Cash Provided (Used) by Financing (2,123,069) 539,310
Foreign currency translation (24,200) (7,192)
----------- -----------
Net increase (decrease) in cash (88,812) (196,132)
Cash at beginning of year 161,782 317,754
----------- -----------
Cash at end of quarter $ 72,970 $ 121,622
=========== ===========
Supplemental Disclosures:
Interest paid $ 549,315 $ 896,944
Income taxes paid $ -0- $ -0-
See Notes to Financial Statements
6
TRANS-INDUSTRIES, INC. AND SUBSIDIARIES
E. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
The financial information presented as of any date other than December 31
has been prepared from the Company's books and records without audit.
Financial information as of December 31 has been derived from the audited
financial statements of the Company. In the opinion of management, all
adjustments consisting of normal recurring adjustments, necessary for a
fair presentation of the financial information for the periods indicated,
have been included. For further information regarding the Company's
accounting policies, refer to the consolidated financial statements and
related notes included in the Company's annual report on form 10-K for the
year ended December 31, 2001.
2. Inventories
The major components of inventories are:
9/30/02 12/31/01
------- --------
Raw Materials $ 5,315,968 $ 5,283,603
Work in Process 4,487,191 4,444,531
Finished Goods 1,634,786 1,578,254
----------- -----------
$11,437,945 $11,306,388
=========== ===========
3. Principles of Consolidation
There have been no significant changes in the principles of consolidation
since our most recent audited financial statements.
4. Significant Accounting Policies
Except for the adoption of SFAS 142, there have been no significant changes
in accounting policies since our most recent audited financial statements
(See note 9).
7
TRANS-INDUSTRIES, INC. AND SUBSIDIARIES
E. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5. Long-Term Debt
Long-term debt at September 30, 2002 consisted of the following:
Trans-Industries, Inc., $3,840,000 term note, payable in $2,362,994
monthly installments of $35,607 which includes interest at
bank's prime lending rate, plus 1.75% (effective rate of 6.5%
at September 30, 2002) with a balloon payment of $1,706,921
in January 2005. The note is secured by substantially all
the assets of the Company.
Term note, payable in monthly installments of $50,965.
Interest is payable monthly at the bank's prime lending
rate plus 1.75% (effective rate 6.5% at September 30,
2002) with a balloon payment of $509,652. The note is
due January 2005 and is secured by substantially all the
assets of the Company. 1,885,712
Other 71,147
----------
4,319,853
Less current installments (986,667)
----------
Long-term debt $3,333,186
==========
The Company also has a secured $13,000,000 line of credit, in the form of a
demand note, of which $6,339,520 was utilized at September 30, 2002.
Interest is charged at the bank's prime lending rate, plus 1.75% and is
payable monthly.
The line of credit agreement requires the company to earn $1.00 pre tax per
month. The agreement also restricts the payments of dividends, repurchase
of common stock, and acquisition of property and equipment. At September
30, 2002 the company was not in compliance with the earnings covenant and
obtained a waiver for such non-compliance from its lender. The waiver was
issued subject to management's agreement to seek alternate financial
arrangements and provide the bank with a commitment letter, by February 3,
2003, to take out all of the bank's debt. If the Company fails to provide a
commitment letter by this date, the Company is required to pay the bank a
fee. Alternatively, the bank has indicated its willingness to reconsider
its position if the Company presents the bank with an acceptable
independent analysis detailing revenue opportunities and cost reduction
initiatives associated with the Company's information product's line. It is
the Company's belief that they will be able to provide the bank with an
acceptable analysis and cost reduction plan, so that the bank will forego
its requirement for the Company to seek alternate financing arrangements.
The Company has also initiated discussions with several other financial
institutions regarding the complete financing needs of the Company which
would include retiring the entire debt with its present bank.
8
TRANS-INDUSTRIES, INC. AND SUBSIDIARIES
E. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6. Loss Per Share
For the three and nine months ended September 30, 2001 and 2002 all options
outstanding have been excluded from the computation of diluted loss per
share as the effect would be anti-dilutive.
7. Segment Information
The Company operates in one market segment, the transportation industry,
with products directed towards customers in the mass transit, highway,
airline and rental car segments. Financial information summarized by
geographic area is as follows:
9/30/02 9/30/01
---------------------------------------- ----------------------------------------
LONG- LONG-
----- -----
LIVED LIVED
----- -----
REVENUES ASSETS REVENUES ASSETS
-------- ------ -------- ------
United States $18,795,944 $4,410,183 $22,165,491 $6,329,632
United Kingdom 1,254,076 193,965 1,132,731 242,934
Canada 4,406,257 - 0 - 3,659,943 - 0 -
Other 201,924 - 0 - 412,714 - 0 -
----------- ---------- ----------- ----------
Total $24,658,201 $4,604,148 $27,370,879 $6,572,566
=========== ========== =========== ==========
8. Restructuring Costs
The Company, in June 2001, reported restructuring charges relating to the
consolidation of manufacturing facilities in England of approximately
$700,000. A major portion of this charge, $648,000, relates to the disposal
of redundant property and equipment. Also included in the restructuring
charge is $21,000 for severance pay and approximately $31,000 for the
cancellation of leases and miscellaneous fees.
9
TRANS-INDUSTRIES, INC. AND SUBSIDIARIES
E. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
9. Note-Goodwill
Effective January 1, 2002, the Company adopted the provisions of Statement No.
142, Goodwill and Other Intangible Assets, issued by the Financial Accounting
Standards Board in July 2001 ("SFAS 142"). SFAS 142 addresses how intangible
assets that are acquired individually or with a group of assets should be
accounted for in financial statements upon their acquisition. SFAS 142 specifies
that goodwill is not subject to amortization, but is subject to certain
impairment tests annually.
The Company recorded goodwill in connection with the acquisition of the Lobb
Company, the net amount of goodwill, $150,369 as of January 1, 2002, will not be
amortized.
A reconciliation of net earnings (loss) and earnings (loss) per share reported
in the consolidated statements of operations to the net earnings (loss) and
earnings (loss) per share adjusted for the effect of goodwill amortization for
the nine month periods is as follows:
Nine Months Ended Sept. 30,
--------------------------------------------
2002 2001
---- ----
Net earnings (loss):
Net earnings (loss) as reported $(139,624) $ (2,109,269)
Goodwill amortization -- 121,354
--------------------------------------------
Adjusted net earnings (loss) $(139,624) $ (1,987,915)
============================================
Nine Months Ended Sept. 30,
--------------------------------------------
2002 2001
---- ----
Basic and diluted earnings (loss) per share:
Net earnings (loss) as reported $ (0.04) $ (0.67)
Goodwill amortization -- 0.04
--------------------------------------------
Adjusted net earnings (loss) per share $ (0.04) $ ( 0.63)
============================================
10
TRANS-INDUSTRIES, INC. AND SUBSIDIARIES
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
For Nine Months Ended September 30, 2002
Forward-Looking Statements
This discussion highlights significant factors influencing the financial
condition and results of operations of Trans-Industries, Inc. It should be read
in conjunction with the financial statements and related notes. This discussion
includes certain forward-looking statements based on management's estimate of
trends and economic factors in the markets in which the corporation is active,
as well as the corporation's business plans. In light of recent securities law
developments, including the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, the corporation notes that such forward-looking
statements are subject to risks and uncertainties. Accordingly, the
corporation's actual results may differ from those set forth in such statements.
Significant changes in economic conditions, regulatory or legislative changes
affecting Trans-Industries, Inc., its competitors, or the markets in which it is
active, or changes in other factors may cause future results to vary from those
expected by the corporation.
Sales and Earnings
Sales for the quarter ended September 30, 2002, were $7,603,082 compared to
$8,317,115 for the same period a year ago. This decrease of $714,033 is
primarily attributed to the closing of two operations during 2001. Additionally
demand for the Company's highway information products, was not as strong in the
third quarter of 2002 as it was a year ago. For the nine-month period ending
September 30, 2002 sales were $24.7 million compared with $27.4 million a year
ago. $2.2 million of this $2.7 million decrease is attributable to the closing
of two operations during 2001.
During the third quarter of 2002, the Company recorded a net loss of $491,992 or
$.16 per share on sales of $7,603,082. For the same period last year, sales were
$8,317,115 with a net loss of $538,478 or $.17 per share. For the nine months
ending September 30, 2002, sales were $24,658,201 with a net loss of $139,624.
For the same nine-month period a year ago, sales were $27,370,879 and a net loss
of $2,109,269 was recorded. The 2002 reduction in the nine-month loss on less
sales is primarily attributed to the closing of two unprofitable operations
during 2001.
Inventories
Inventory valuation is based upon the lower of cost or market. At September 30,
2002, consolidated inventories were $11,437,945 compared to $11,885,436 a year
ago. This decrease of $447,491 reflects the Company's effort to bring its
inventory level more in line with its sales volume. This is particularly the
situation at the information products operation where new software packages are
currently being installed to improve production planning and control as well as
product costing data.
11
TRANS-INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
For Nine Months Ended September 30, 2002
Interest
Interest expense amounted to approximately $164,000 and $296,000 for the third
quarter of 2002 and 2001, respectively. This decrease of $132,000 was the result
of lower interest rates and lower debt levels in 2002.
Financial Condition
Current financial resources coupled with anticipated funds from operations are
expected to meet funding requirements for the remainder of the year, based upon
present needs.
12
TRANS-INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
For Nine Months Ended September 30, 2002
The Company is exposed to the impact of foreign currency fluctuations.
International revenue from the Company's foreign subsidiary was approximately 6%
of total revenues for nine months ended September 30, 2002. The Company's
primary foreign currency exposure is the British Pound. The Company manages its
exposure to foreign currency assets and earnings primarily by funding certain
foreign currency denominated assets with liabilities in the same currency and,
as such, certain exposures are naturally offset.
The Company's financial results are affected by changes in U.S. and foreign
interest rates. The Company does not hold financial instruments that are subject
to market risk (interest rate risk and foreign exchange rate risk).
Item 4. CONTROLS AND PROCEDURES
Our Chief Executive Officer and Chief Financial Officer have concluded, based on
their evaluation within 90 days of the filing date of this report, that our
disclosure controls and procedures are effective for gathering, analyzing and
disclosing the information we are required to disclose in our reports filed
under the Securities Exchange Act of 1934. There have been no significant
changes in our internal controls or in other factors that could significant
affect these controls subsequent to the date of the previously mentioned
evaluation.
13
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.
TRANS-INDUSTRIES, INC.
Date: November 06, 2002 /s/ Kai Kosanke
------------------------- --------------------------------
Kai Kosanke, Treasurer
and Chief Financial Officer
Date: November 06, 2002 /s/ Keith LaCombe
------------------------ --------------------------------
Keith LaCombe
Assistant Treasurer
14
TRANS-INDUSTRIES, INC.
CERTIFICATION
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Dale S. Coenen certify that:
1. I have reviewed this quarterly report on Form 10-Q of Trans-Industries,
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 (herein the "Certifying
Officer") are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a and 14
and 15d-14) for the registrant and we have;
a) designed such internal controls to ensure that material
information relating to the registrant, including its
consolidated subsidiaries, (collectively the "Company") is
made known to the Certifying Officers by others within the
Company, particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's internal
controls 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 the conclusions of the
Certifying Officers about the effectiveness of the disclosure
controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's Certifying Officers have disclosed, based on our most
recent evaluation, to the registrant's auditors and the audit committee
of the registrant's board of directors:
a) all significant deficiencies (if any) 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 Certifying Officers 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: November 6, 2002
/s/ Dale S. Coenen
- --------------------------------------------------------------------------------
Dale S. Coenen
Chief Executive Officer
See also the certification pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, which is also attached to this report.
TRANS-INDUSTRIES, INC.
CERTIFICATION
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Kai Kosanke certify that:
1. I have reviewed this quarterly report on Form 10-Q of Trans-Industries,
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 (herein the "Certifying
Officer") are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a and 14
and 15d-14) for the registrant and we have;
a) designed such internal controls to ensure that material
information relating to the registrant, including its
consolidated subsidiaries, (collectively the "Company") is
made known to the Certifying Officers by others within the
Company, particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's internal
controls 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 the conclusions of the
Certifying Officers about the effectiveness of the disclosure
controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's Certifying Officers have disclosed, based on our most
recent evaluation, to the registrant's auditors and the audit committee
of the registrant's board of directors:
a) all significant deficiencies (if any) 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 Certifying Officers 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: November 6, 2002
/s/ Kai Kosanke
- --------------------------------------------------------------------------------
Kai Kosanke
Chief Financial Officer
See also the certification pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, which is also attached to this report.
10-Q EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
EX-99.1 Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.