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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 quarter ended September 30, 2002
----------------------------------------------------------
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
---------------- ----------------
Commission file number 0-6169
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WOLOHAN LUMBER CO.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Michigan 38-1746752
- ----------------------------------- ---------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1740 Midland Road, Saginaw, Michigan 48603
- --------------------------------------------------------------------------------
(Address of principal executive offices)
(989) 793-4532
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
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 accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [X]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.
Common stock, $1 par value -- 2,073,195 shares as of October 31, 2002
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL INFORMATION
WOLOHAN LUMBER CO.
CONSOLIDATED BALANCE SHEETS
(in thousands)
SEPT. 30, DEC. 31,
2002 2001
---- ----
(Unaudited) (Note)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 11,979 $ 4,798
Trade receivables, net 19,623 18,796
Inventories - at average cost 22,376 25,667
Reduction to LIFO cost (7,643) (8,168)
-------- --------
Inventories at the lower of LIFO cost or market 14,733 17,499
Other current accounts 1,919 2,048
-------- --------
TOTAL CURRENT ASSETS 48,254 43,141
NET PROPERTIES AND EQUIPMENT 19,341 25,477
OTHER ASSETS 18,914 15,397
-------- --------
TOTAL ASSETS $ 86,509 $ 84,015
======== ========
LIABILITIES AND SHAREOWNERS' EQUITY
CURRENT LIABILITIES
Trade accounts payable $ 11,187 $ 7,431
Employee compensation and accrued expenses 10,798 12,476
Short-term debt 1,003 --
Current portion of long-term debt 103 2,104
-------- --------
TOTAL CURRENT LIABILITIES 23,901 22,011
LONG-TERM DEBT, net of current portion 227 307
-------- --------
TOTAL LIABILITIES 23,318 22,318
SHAREOWNERS' EQUITY
Common stock 2,073 2,027
Additional capital 392 --
Retained earnings 60,726 59,670
-------- --------
TOTAL SHAREOWNERS' EQUITY 63,191 61,697
-------- --------
TOTAL LIABILITIES AND SHAREOWNERS' EQUITY $ 86,509 $ 84,015
======== ========
Note: The consolidated balance sheet at December 31, 2001, has been derived from
the audited financial statements at that date but does not include all of the
information and footnotes required by accounting principles generally accepted
in the United States of America for complete financial statements.
See notes to condensed consolidated financial statements.
2
WOLOHAN LUMBER CO.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per-share amounts)
THREE MONTHS ENDED
------------------
SEPT. 30, SEPT. 30,
2002 2001
---- ----
NET SALES $ 59,580 $ 72,278
Cost of sales 45,657 55,585
-------- --------
Gross profit 13,923 16,693
Other operating income 522 800
-------- --------
Total operating income 14,445 17,493
OPERATING EXPENSES
Selling, general and administrative 10,979 12,854
Store closing costs 360 356
Depreciation and amortization 1,098 1,497
-------- --------
Total operating expenses 12,437 14,707
-------- --------
INCOME FROM OPERATIONS 2,008 2,786
OTHER INCOME (EXPENSE)
Interest expense (7) (87)
Interest income 36 108
Gain on sale of properties 198 308
-------- --------
Other income, net 227 329
-------- --------
INCOME BEFORE INCOME TAXES 2,235 3,115
Income taxes 759 1,059
-------- --------
NET INCOME $ 1,476 $ 2,056
======== ========
Average shares outstanding 2,092 3,175
Net income per share, basic $ .71 $ .63
Net income per share, assuming dilution $ .64 $ .60
Dividends per share $ .07 $ .07
See notes to condensed consolidated financial statements.
3
WOLOHAN LUMBER CO.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per-share amounts)
NINE MONTHS ENDED
-----------------
SEPT. 30, SEPT. 30,
2002 2001
---- ----
NET SALES $ 154,140 $ 184,905
Cost of sales 118,807 142,239
--------- ---------
Gross profit 35,333 42,666
Other operating income 1,750 2,146
--------- ---------
Total operating income 37,083 44,812
OPERATING EXPENSES
Selling, general and administrative 31,216 36,513
Store closing costs 568 855
Depreciation and amortization 3,540 4,760
--------- ---------
Total operating expenses 35,324 42,128
--------- ---------
INCOME FROM OPERATIONS 1,759 2,684
OTHER INCOME (EXPENSE)
Interest expense (89) (378)
Interest income 94 375
Gain on sale of properties 497 1,464
--------- ---------
Other income, net 502 1,461
--------- ---------
INCOME BEFORE INCOME TAXES 2,261 4,145
Income taxes 768 1,409
--------- ---------
NET INCOME $ 1,493 $ 2,736
========= =========
Average shares outstanding 2,082 3,285
Net income per share, basic $ .72 $ .83
Net income per share, assuming dilution $ .65 $ .80
Dividends per share $ .21 $ .21
See notes to condensed consolidated financial statements.
4
WOLOHAN LUMBER CO.
CONSOLIDATED STATEMENT OF SHAREOWNERS' EQUITY
(UNAUDITED)
(in thousands)
COMMON STOCK TOTAL
------------ ADDITIONAL RETAINED SHAREOWNERS'
SHARES AMOUNT CAPITAL EARNINGS EQUITY
-------- -------- -------- -------- --------
Balances at Dec. 31, 2001 2,027 $ 2,027 $ -- $ 59,670 $ 61,697
Net loss (875) (875)
Cash dividends--$.07 per share (145) (145)
Shares issued under Long-Term
Incentive Plan 15 15 209 224
Shares issued related to stock
options 65 65 813 878
Shares repurchased and retired (9) (9) (160) -- (169)
-------- -------- -------- -------- --------
Balances at Mar. 31, 2002 2,098 2,098 862 58,650 61,610
Net income 892 892
Cash dividends--$.07 per share -- -- -- (145) (145)
-------- -------- -------- -------- --------
Balances at June 30, 2002 2,098 2,098 862 59,397 62,357
Net income 1,476 1,476
Cash dividends $.07 per share (147) (147)
Shares repurchased and retired (25) (25) (470) -- (495)
-------- -------- -------- -------- --------
Balances at Sept. 30, 2002 2,073 $ 2,073 $ 392 $ 60,726 $ 63,191
======== ======== ======== ======== ========
See notes to condensed consolidated financial statements.
5
WOLOHAN LUMBER CO.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
NINE MONTHS ENDED
-----------------
SEPT. 30, SEPT. 30,
2002 2001
---- ----
OPERATING ACTIVITIES
Net income $ 1,493 $ 2,736
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation 3,390 4,531
Amortization 150 229
Provision for losses on accounts receivable 283 225
Effect of LIFO (525) --
Gain on sale of properties (497) (1,464)
Gain on sale of equipment (270) (176)
Common stock based compensation 51 172
Changes in operating assets and liabilities
Accounts receivable (1,110) (4,586)
Builder Finance Program receivables -- 1,421
Other assets 247 381
Inventories 3,291 3,331
Accounts payable and accrued expenses 2,370 6,011
-------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 8,873 12,811
-------- --------
INVESTING ACTIVITIES
Proceeds from maturities of certificates of deposit, net -- 10,000
Purchases of property and equipment (1,933) (425)
Proceeds from the sale of properties and equipment 1,539 4,373
-------- --------
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES (394) 13,948
-------- --------
FINANCING ACTIVITIES
Net credit-line borrowings 1,003 --
Payments on long-term debt (2,081) (8,557)
Repurchases of common stock (664) (963)
Proceeds from exercise of stock options 878 117
Dividends paid (434) (788)
-------- --------
NET CASH USED IN FINANCING ACTIVITIES (1,298) (10,191)
-------- --------
INCREASE IN CASH AND CASH EQUIVALENTS 7,181 16,568
Cash and cash equivalents at beginning of period 4,798 1,705
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 11,979 $ 18,273
======== ========
See notes to condensed consolidated financial statements.
6
WOLOHAN LUMBER CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SEPTEMBER 30, 2002
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions
to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In
the opinion of management, all adjustments (consisting only of normal
recurring accruals) considered necessary for a fair presentation have
been included.
The Company's business is seasonal in nature, subject to general
economic conditions and outside factors, and the timing of store
closings, and accordingly, its operating results for the three months
and nine months ended September 30, 2002 are not necessarily indicative
of the results that may be expected for the entire year ending December
31, 2002.
The Company recognizes revenues when products, ordered by the customer,
are either delivered to the customer or the customer picks up the
products at one of the Company's retail locations.
For further information, refer to the consolidated financial statements
and footnotes included in the Company's annual report on Form 10-K for
the year ended December 31, 2001.
NOTE B - NEW ACCOUNTING PRONOUNCEMENTS
The Company adopted Statement of Financial Accounting Standards (SFAS)
No. 142, Goodwill and Other Intangible Assets, in the first quarter of
2002. The Company no longer amortizes goodwill and intangible assets
with indefinite useful lives and has completed its initial impairment
tests in accordance with the provisions of Statement No. 142. No
adjustments resulted from this analysis. Amortization expense reported
during the quarter ended September 30, 2001 was $26,000 ($78,000 for
the nine-month period of 2001).
The FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets", in August 2001. This statement
supercedes Statement No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of", and the
accounting and reporting provisions of APB Opinion No. 30, "Reporting
Results of Operations - Reporting the Effects of Disposal of a Segment
of a Business, and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions". Statement No. 144 requires that one
accounting model be used for long-lived assets to be disposed of by
sale, whether previously held and used or newly acquired, and it
broadens the presentations of discontinued operations to include more
disposal transactions. The Company adopted the provisions of Statement
No. 144 on January 1, 2002. The Company reports store-closing costs as
operating expenses and plans to continue to do so. As of September 30,
2002, the Company determined that no long-lived assets are impaired.
7
In June of 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities". This Statement addresses
financial accounting and reporting for costs associated with exit or
disposal activities and nullifies EITF 94-3, "Liability Recognition for
Certain Employee Termination Benefits and Other Costs to Exit an
Activity (including Certain Incurred Costs in a Restructuring)". SFAS
No. 146 requires that a liability for costs associated with an exit or
disposal activity be recognized only when the liability is incurred.
This differs from the guidance in EITF 94-3, which required that a
liability for costs associated with an exit plan or disposal activity
be recognized at the date management committed to an exit plan for an
entity. The provisions of the Statement are effective for exit or
disposal activities that are initiated after December 31, 2002, with
early application encouraged. The Company has not adopted SFAS No. 146
as of September 30, 2002. The adoption of SFAS No. 146 will have an as
yet undetermined impact on the timing of recognition of liabilities on
stores closed or severance arrangements entered into after the adoption
date, but will have no impact on the liabilities recorded by the
Company for stores already closed and severance arrangements already
entered into.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
Certain information contained in Management's Discussion and Analysis
of Financial Condition and Results of Operations and elsewhere in this
report may be deemed to be forward-looking statements within the
meaning of The Private Securities Litigation Reform Act of 1995 and are
subject to the Act's safe harbor provisions. These statements are based
on current expectations and involve a number of risks and
uncertainties. Actual results could differ materially from the results
expressed in forward-looking statements. Factors that might cause such
a difference include: fluctuations in customer demand and spending,
expectations of future volumes and prices for the Company's products,
prevailing economic conditions affecting the retail lumber and building
materials markets and seasonality of operating results and other
factors, including risk factors, referred to from time to time in
filings made by the Company with the Securities and Exchange
Commission. The Company undertakes no obligation to update or clarify
forward-looking statements, whether as a result of new information,
future events or otherwise.
Results Of Operations
Net income was $1.48 million (71 cents per share basic; 64 cents per
share fully diluted) for the third quarter ended September 30, 2002.
This compares with net income of $2.06 million (63 cents per share
basic; 60 cents per share fully diluted) for the same period of 2001.
For the nine-month period, net income totaled $1.49 million (72 cents
per share basic; 65 cents per share fully diluted) for 2002, compared
with $2.74 million (83 cents per share basic; 80 cents per share fully
diluted) for the similar period of 2001.
The 2002 third quarter net income per share and the net income per
share for the nine-month period then ended was impacted by a
significant reduction in average shares outstanding from the same
periods in 2001. Average shares outstanding were 2.1 million for the
third quarter and nine-month periods of 2002, compared with 3.2 million
and 3.3 million shares, respectively, for the same periods in 2001. The
8
reduction in average shares outstanding was primarily a result of
repurchasing 1.3 million shares in a stock tender offer in September
2001 at a price of $15 per share.
Net sales in 2002 were $59.6 million for the third quarter and $154.1
million for the first nine months, compared with $72.3 million and
$184.9 million for the comparable periods of 2001. Compared with 2001,
same-store sales declined 7 percent for the third quarter and 3 percent
for the nine-month period.
Third quarter sales and gross margin dollars were negatively impacted
by significant price deflation in lumber and structural panel products
as well as a reduction in the number of operating stores compared with
2001. At September 30, 2002, the Company had 26 stores in operation
compared with 30 at the end of the third quarter of 2001. In addition,
due to the Company's strategic focus on the professional builder and
the large project-oriented consumer, management continues to eliminate
or reduce certain products previously sold to the do-it-yourself
home-improvement market, which in turn, has a negative impact on sales
comparisons.
The lower net income in the third quarter and nine month-period of
2002, compared with similar periods in 2001 reflects:
1) Lower net gains recorded on the sale of real estate properties in
2002 versus 2001 ($110,000 less for the third quarter and $967,000
less for the nine-month period).
2) Inventory shrinkage recorded at one store negatively impacted
gross margins for the nine-month period of 2002, compared with
2001.
3) LIFO credits of $300,000 in the third quarter of 2002 and $525,000
for the nine-month period, compared with no LIFO adjustments
recorded in the first nine months of 2001.
4) Store closing costs of $360,000 in third quarter 2002, compared
with $356,000 in third quarter 2001 and $568,000 for the
nine-month period of 2002, compared with $855,000 for the same
period of 2001. These costs represent expenses incurred to
transition a store from normal operations to a liquidation mode
and final closing. Other store closing costs related to stores
closed in the first nine months of both years have been accrued in
the corresponding prior year.
Gross margins for the third quarter of 2002 were 23.4 percent, compared
with 23.1 percent for the comparable period in 2001. For the nine-month
period of 2002, gross margins were 22.9 percent compared with 23.1
percent for the same period of 2001.
The operating expense ratio, excluding store-closing costs, was 20.3
percent for the third quarter of 2002, compared with 19.9 percent for
the same period in 2001. For the 2002 nine-month period, the ratio was
22.5 percent compared with 22.3 percent in 2001.
In the Company's continuing effort to redeploy investments which do not
meet its strategic profit model, the Company has closed four stores in
the first nine months of 2002 (eight stores were closed during the
first nine months of 2001).
The expansion of the Company's Marne, Michigan facility to include a
new showroom, an enlarged lumber yard area and improvements to increase
manufacturing capabilities for wall-panelization, roof trusses and
millwork will be completed in the fourth quarter 2002. This facility
will serve professional builders and project-oriented consumers in the
greater Grand Rapids, Michigan market.
9
The effective federal income tax rate for the third quarter and
nine-month period of 2002 and 2001 was 34 percent.
Financial Condition
At Sept. 30, 2002, the Company's balance sheet remained strong. Net
working capital at Sept. 30, 2002, totaled $24.4 million, compared with
$17.9 million at Sept. 30, 2001, and $21.1 million at Dec. 31, 2001.
The current ratio at Sept. 30, 2002, was 2.1 to 1, compared with 1.4 to
1 at Sept. 30, 2001, and 2.0 to 1 at Dec. 31, 2001. The balance sheet
at Sept. 30, 2001 reflects the Company's repurchase of 1.3 million
shares of its common stock on Sept. 21, 2001 in a stock tender offer at
a price of $15 per share. Payment for the tender offer ($18.9 million)
was made on Oct. 3, 2001 from available cash on hand of $16.4 million
plus utilization of a bank line of credit for $2.5 million.
Cash and cash equivalents totaled $12.0 million at Sept. 30, 2002,
compared with $18.3 million at Sept. 30, 2001, and $4.8 million at Dec.
31, 2001. The liquidity ratio at Sept. 30, 2002, was .52 to 1, compared
to .41 to 1 at Sept. 30, 2001, and .22 to 1 at Dec. 31, 2001. Cash and
cash equivalents increased $7.2 million during the first nine months of
2002. Operating activities provided net cash of $8.9 million during the
first nine months of 2002, primarily from reductions in net working
capital and earnings plus depreciation. Investing activities in the
first nine months of 2002 included $1.9 million in capital
expenditures, primarily related to the expansion of the Company's
Marne, Michigan facility, and were offset in part by $1.5 million of
proceeds from the sale of properties and equipment. Financing
activities in the first nine months of 2002 used net cash of $1.3
million and included $2.1 million for payments on long-term debt, $.7
million used to purchase 34,000 shares of Company common stock and $.4
million for dividend payments, and were offset in part by $.9 million
of proceeds from the exercise of stock options and $1.0 million from
net credit-line borrowings.
The Company expects that net cash from operating activities and
available lines of credit should be adequate to meet working capital
needs for the foreseeable future.
Invested capital (long-term debt and shareowners' equity) was equal to
73% of total assets at Sept. 30, 2002, compared with 74% at year-end
2001. At Sept. 30, 2002, the total long-term debt-to-asset ratio was
.003, versus .004 at year-end 2001 and the ratio of equity to total
assets was .73 to 1, the same as year-end 2001.
Outlook
The Company's strategic direction continues to be: (1) revenue growth
and operating improvement at existing stores through the advancement of
services to its target customers and development of operating
efficiencies, and (2) strengthening its balance sheet by improving
management of working capital at existing operations and redeploying
investments which do not meet its strategic profit model. The Company
has consistently utilized its strategic profit model to evaluate
overall performance of its assets and intends to continue to do so.
Adherence to this model may result in additional store closings or
other asset redeployments.
10
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not Applicable.
ITEM 4. CONTROLS AND PROCEDURES
As of October 22, 2002, an evaluation was performed under the
supervision of and with the participation of the Company's management,
including the President and Chief Executive Officer and the Corporate
Controller, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures. Based on that evaluation,
the Company's management, including the President and Chief Executive
Officer and the Corporate Controller, concluded that the Company's
disclosure controls and procedures were effective as of October 22,
2002. There have been no significant changes in the Company's internal
controls or in other factors that could significantly affect internal
controls subsequent to October 22, 2002.
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, we may be involved in various legal proceedings that
are incidental to our business. In our opinion, we are not a party to
any current legal proceedings that are material to our financial
condition, either individually or in the aggregate.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
EXHIBIT NO. EXHIBIT DESCRIPTION
99.1 Certification of President and Chief Executive
Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
99.2 Certification of Corporate Controller (Chief
Financial Officer) pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
(b) Reports on Form 8-K
The registrant filed no reports on Form 8-K during the quarter for
which this Report is filed.
11
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 thereto duly authorized.
WOLOHAN LUMBER CO.
---------------------------------
Registrant
Date: November 7, 2002 James L. Wolohan
----------------------------------- ---------------------------------
James L. Wolohan
President and Chief Executive
Officer
Date: November 7, 2002 Edward J. Dean
----------------------------------- ---------------------------------
Edward J. Dean
Corporate Controller
(Principal Accounting Officer)
12
CERTIFICATION
I, James L. Wolohan, President and Chief Executive Officer of Wolohan Lumber
Co., certify that:
1. I have reviewed this quarterly report on Form 10-Q of Wolohan Lumber
Co. (the "registrant");
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
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 officer and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of the 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;
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: November 7, 2002 James L. Wolohan
---------------------------------
James L. Wolohan
President and Chief Executive
Officer
13
CERTIFICATION
I, Edward J. Dean, Corporate Controller of Wolohan Lumber Co., certify that:
1. I have reviewed this quarterly report on Form 10-Q of Wolohan Lumber
Co. (the "registrant");
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
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 officer and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of the 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;
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: November 7, 2002 Edward J. Dean
---------------------------------
Edward J. Dean
Corporate Controller (Chief
Financial Officer)
14
EXHIBIT INDEX
EXHIBIT NO. EXHIBIT DESCRIPTION
99.1 Certification of President and Chief Executive Officer
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
99.2 Certification of Corporate Controller (Chief Financial
Officer) pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
15