ENCORE WIRE CORP /DE/ - 10-Q Quarterly Report

Back to GetFilings.com

================================================================================

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended
SEPTEMBER 30, 2002

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to _________

Commission file number: 0-20278

ENCORE WIRE CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE 75-2274963
(State of Incorporation) (I.R.S. employer identification number)

1410 MILLWOOD ROAD
MCKINNEY, TEXAS 75069
(Address of principal executive offices) (Zip code)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (972) 562-9473

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 [ ]

Number of shares of Common Stock outstanding as of
September 30, 2002: 15,119,065

Page 1 of 21 Sequentially Numbered Pages
Index to Exhibits on Page 20

FORM 10-Q

================================================================================

ENCORE WIRE CORPORATION

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2002

2

FORM 10-Q

PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

ENCORE WIRE CORPORATION

CONSOLIDATED BALANCE SHEETS

See accompanying notes

3

FORM 10-Q

ENCORE WIRE CORPORATION

CONSOLIDATED BALANCE SHEETS (continued)

Note 1: The consolidated balance sheet at December 31, 2001, as presented, is
derived from the audited consolidated financial statements at that
date.

See accompanying notes

4

FORM 10-Q

ENCORE WIRE CORPORATION

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

See accompanying notes

5

FORM 10-Q

ENCORE WIRE CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

See accompanying notes

6

FORM 10-Q

ENCORE WIRE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 1 - BASIS OF PRESENTATION

The unaudited consolidated financial statements of Encore Wire Corporation have
been prepared in accordance with generally accepted accounting principles for
interim information and the instructions to Form 10-Q and Rule 10-01 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 adjustments considered necessary for a fair
presentation, have been included. Results of operations for interim periods
presented do not necessarily indicate the results that may be expected for the
entire year. These financial statements should be read in conjunction with the
audited consolidated financial statements and notes thereto included in the
Company's Annual Report on Form 10-K for the year ended December 31, 2001.

NOTE 2 - INVENTORIES

Inventories are stated at the lower of cost, determined by the last-in,
first-out (LIFO) method, or market.

Inventories (in thousands) consisted of the following:

An actual valuation of inventory under the LIFO method can be made only at the
end of each year based on the inventory levels and costs at that time.
Accordingly, interim LIFO calculations must necessarily be based on management's
estimates of expected year-end inventory levels and costs. Because these are
subject to many forces beyond management's control, interim results are subject
to the final year-end LIFO inventory

7

FORM 10-Q

valuation. The Company increased the lower of cost or market reserve by $3.1
million in the quarter, to $4.0 million, to reflect the fact that the LIFO cost
basis, as currently calculated, exceeded the current market value by that amount
as of September 30, 2002.

NOTE 3 - NET INCOME PER SHARE

Net income (loss) per common and common equivalent share is computed using the
weighted average number of shares of common stock and common stock equivalents
outstanding during each period. If dilutive, the effect of stock options,
treated as common stock equivalents, is calculated using the treasury stock
method.

The following table sets forth the computation of basic and diluted net income
per share for the quarters ended September 30, 2002 and September 30, 2001:

The following table sets forth the computation of basic and diluted earnings per
share for the nine month periods ended September 30,2002 and September 30, 2001:

8

FORM 10-Q

NOTE 4 - LONG TERM NOTE PAYABLE

Effective August 31, 1999, the Company, through its indirectly wholly owned
subsidiary Encore Wire Limited, a Texas limited partnership, completed an
unsecured loan facility with a group of banks (the "Financing Agreement"). The
Financing Agreement replaced the Company's existing credit facility, and the
Company is a guarantor of the indebtedness. The Financing Agreement has been
amended twice since August 31, 1999, to extend the term to May 31, 2003 and then
again to May 31, 2005. The second amendment was executed in June 2002, on
substantially the same terms and conditions as the original agreement. The
Financing Agreement provides for maximum borrowings of the lesser of $65.0
million or the amount of eligible accounts receivable plus the amount of
eligible finished goods and raw materials, less any available reserves
established by the banks. The calculated maximum borrowing amount available at
September 30, 2002, as computed under the Financing Agreement, was $65.0
million. The Financing Agreement is unsecured and contains customary covenants
and events of default. The Company was in compliance with these covenants, as
amended, as of September 30, 2002. Pursuant to the Financing Agreement, the
Company is prohibited from declaring, paying or issuing cash dividends. At
September 30, 2002, the balance outstanding under the Financing Agreement was
$51.0 million. Amounts outstanding under the Financing Agreement are payable on
May 31, 2005, with interest due quarterly based on the bank's prime rate or
LIBOR rate options, at the Company's election.

In December 2001, the Company entered into an interest rate swap agreement on
$24.0 million of its variable rate debt under the Financing Agreement in order
to hedge against an increase in variable interest rates. The terms of the
agreement fix the interest rate on $24.0 million of the Company's variable rate
debt under the Financing Agreement to 4.6% per annum plus a variable increment
that is based on certain financial ratios contained in the loan covenants. This
three-year agreement expires in December 2004. For the quarter ended September
30, 2002, the Company recorded an unrealized loss of $647,858, netting to an
unrealized loss of $1,298,562 remaining in the accumulated other comprehensive
income (loss) line in the equity section of the balance sheet.

NOTE 5 - STOCK REPURCHASE AUTHORIZATION

On November 6, 2001, the Board of Directors of the Company approved a new stock
repurchase program covering the purchase of up to 300,000 additional shares of
its common stock dependent upon market conditions. Common stock purchases under
the new program will be made from time to time until December 31, 2002 on the
open market or through privately negotiated transactions at prices determined by
the Chairman of the Board or the President of the Company. As of September 30,
2002, 150,200 shares had been purchased under the new authorization.

9

FORM 10-Q

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

GENERAL

The Company is a low-cost manufacturer of copper electrical building wire and
cable. The Company is a significant supplier of residential wire for interior
wiring in homes, apartments and manufactured housing and commercial wire for
commercial and industrial buildings.

Price competition for electrical wire and cable is intense, and the Company
sells its products in accordance with prevailing market prices. Copper is the
principal raw material used by the Company in manufacturing its products. Copper
accounted for approximately 66.6%, 63.9%, 60.6%, 66.2% and 73.8% of the
Company's cost of goods sold during fiscal 2001, 2000, 1999, 1998 and 1997,
respectively. The price of copper fluctuates, depending on general economic
conditions and in relation to supply and demand and other factors, which has
caused monthly variations in the cost of copper purchased by the Company. The
Company cannot predict copper prices in the future or the effect of fluctuations
in the cost of copper on the Company's future operating results.

The following discussion and analysis relates to factors that have affected the
operating results of the Company for the periods ended September 30, 2002 and
2001. Reference should also be made to the audited financial statements and
notes thereto included in the Company's Annual Report on Form 10-K for the year
ended December 31, 2001.

RESULTS OF OPERATIONS

Quarter Ended September 30, 2002 Compared to Quarter Ended September 30, 2001

Net sales for the third quarter of 2002 amounted to $80.2 million compared with
net sales of $73.0 million for the third quarter of 2001. This dollar increase
was the result of an increase in the unit volume of wire sold, partially offset
by a decrease in the price of wire sold. The average sales price per copper
pound of wire sold was down in the third quarter of 2002, compared to the third
quarter of 2001. Fluctuations in sales prices are primarily a result of changing
copper raw material prices and product price competition.

Inventories are stated at the lower of cost, using the last-in, first-out (LIFO)
method, or market. The Company maintains only one inventory pool for LIFO
purposes as all inventories held by the Company generally relate to the
Company's only business segment, the manufacture and sale of copper building
wire products. As permitted by accounting principles generally accepted in the
United States, the Company maintains its inventory costs and cost of goods sold
on a first-in, first-out (FIFO) basis and makes quarterly adjustments to adjust
total inventory and cost of goods sold from FIFO to LIFO. The Company applies
the lower of cost or market (LCM) test by comparing the LIFO cost of its raw
materials, work-in-process and finished goods inventories to estimated market
values, which are based primarily upon the most recent quoted market price of
copper, in pound quantities, as of the end of each quarterly reporting period.

10

FORM 10-Q

Additionally, future reductions in the quantity of inventory on hand could cause
copper that is carried in inventory at costs different from the cost of copper
in the period in which the reduction occurs to be included in costs of goods
sold for that period at the different price.

Primarily as a result of falling copper costs, and also somewhat due to a
decrement in finished goods inventory during the third quarter of 2002, a LIFO
adjustment was recorded decreasing cost of sales by $2.4 million during the
quarter. At September 30, 2002, the LIFO cost basis of the inventory exceeded
the market value by $4.0 million. Thus, at September 30, 2002 a $3.1 million
increase was made to the LCM reserve, which increased cost of sales by $3.1
million. These two adjustments in the LIFO and LCM reserves netted to a net
increase in cost of sales of $.7 million. Future reductions in the price of
copper could require the Company to record a lower of cost or market adjustment
against the related inventory balance, which would result in a negative impact
on net income.

Cost of goods sold increased to $72.2 million in the third quarter of 2002,
compared to $63.1 million in the third quarter of 2001. Gross profit decreased
to $8.0 million, or 10.0% of net sales, in the third quarter of 2002 versus $9.9
million, or 13.6% of net sales, in the third quarter of 2001. The decrease in
gross profit in both dollars and percentage of net sales was primarily the
result of the margin compression the company experienced in the quarter, whereby
wire prices were held down by competitive pressure in a weak economic climate.

Selling expenses for the third quarter of 2002 were $4.8 million, or 6.0% of net
sales, compared to $4.4 million, or 6.0% of net sales, in the third quarter of
2001. General and administrative expenses decreased to $1.4 million, or 1.7% of
net sales, in the third quarter of 2002 compared to $1.7 million, or 2.4% of net
sales, in the third quarter of 2001.

Net interest expense was $367,000 in the third quarter of 2002 compared to
$376,000 in the third quarter of 2001. The decrease was due to lower average
interest rates during the third quarter of 2002 than the comparable period
during 2001.

As a result of the foregoing factors, the Company's net income decreased to
$920,000 in the third quarter of 2002 from $2.1 million in the third quarter of
2001.

Nine months Ended September 30, 2002 compared to Nine months Ended September 30,
2001

Net sales for the first nine months of 2002 amounted to $216.5 million compared
with net sales of $217.8 million for the first nine months of 2001. This dollar
decrease was the result of a decrease in the price of wire sold which more than
offset an increase in the volume of product shipped. The average sales price per
copper pound of product sold was down in the first nine months of 2002, compared
to the first nine months of 2001. Fluctuations in sales prices are primarily a
result of changing copper raw material prices and product price competition.

Primarily as a result of increasing copper costs during the first nine months of
2002, a LIFO adjustment was recorded increasing cost of sales by $.9 million
during the period. At September 30, 2002, the LIFO cost basis of the inventory
exceeded the market value

11

FORM 10-Q

by $4.0 million. Thus, in the first nine months, a $1.4 million increase was
made to the LCM reserve, which increased cost of sales by $1.4 million. Future
fluctuations in the price of copper could require the Company to record a lower
of cost or market adjustment against the related inventory balance, which would
result in a negative impact on net income.

Cost of goods sold increased to $188.7 million in the first nine months of 2002,
compared to $187.8 million in the first nine months of 2001. Gross profit
decreased to $27.8 million, or 12.8% of net sales, in the first nine months of
2002 versus $30.0 million, or 13.8% of net sales, in the first nine months of
2001. The gross profit percentage decrease was primarily attributable to the
margin compression resulting from the competitive pricing and poor overall
economy discussed in the quarter summary.

Selling expenses for the first nine months of 2002 were $13.3 million, or 6.2%
of net sales, compared to $13.2 million, or 6.1% of net sales, in the same
period of 2001. The slight percentage increase was due to a nominal increase in
freight costs as a percentage of net sales. General and administrative expenses
decreased to $4.5 million, or 2.1% of net sales, in the first nine months of
2002 compared to $5.2 million, or 2.4% of net sales, in the same period of 2001.

Net interest expense was $1.24 million in the first nine months of 2002 compared
to $1.52 million in the first nine months of 2001. The decrease was due to lower
average interest rates during the first nine months of 2002 than the comparable
period during 2001. The other income and expense category contributed a net loss
of $100,000 resulting from losses on the sales of assets.

As a result of the foregoing factors, the Company's net income decreased to $5.5
million in the first nine months of 2002 from $6.4 million in the first nine
months of 2001.

LIQUIDITY AND CAPITAL RESOURCES

The Company maintains a substantial inventory of finished products to satisfy
customer's prompt delivery requirements. As is customary in the industry, the
Company provides payment terms to most of its customers that exceed terms that
it receives from its suppliers. Therefore, the Company's liquidity needs have
generally consisted of operating capital necessary to finance these receivables
and inventory. Capital expenditures have historically been necessary to expand
the production capacity of the Company's manufacturing operations. The Company
has historically satisfied its liquidity and capital expenditure needs with cash
generated from operations, borrowings under its revolving credit facilities and
sales of its common stock.

Effective August 31, 1999, the Company through its indirectly wholly owned
subsidiary, Encore Wire Limited, a Texas limited partnership, completed an
unsecured loan facility with a group of banks (the "Financing Agreement"). The
Financing Agreement replaced the Company's existing credit facility, and the
Company is a guarantor of the indebtedness. Obligations under the Financing
Agreement are the only contractual obligations or commercial commitments of the
Company. The Financing Agreement has been amended twice since August 31, 1999,
to extend the term to May 31, 2003 and then again to May 31, 2005. The second
amendment was executed in June 2002, on substantially the same terms and
conditions as the original agreement. The Financing Agreement provides for
maximum borrowings of the lesser of $65.0 million or the

12

FORM 10-Q

amount of eligible accounts receivable plus the amount of eligible finished
goods and raw materials, less any available reserves established by the banks.
The calculated maximum borrowing amount available at September 30, 2002, as
computed under the Financing Agreement, was $65.0 million. The Financing
Agreement is unsecured and contains customary covenants and events of default.
The Company was in compliance with these covenants, as amended, as of September
30, 2002. Pursuant to the Financing Agreement, the Company is prohibited from
declaring, paying or issuing cash dividends. At September 30, 2002, the balance
outstanding under the Financing Agreement was $51.0 million. Amounts outstanding
under the Financing Agreement are payable on May 31, 2005, with interest due
quarterly based on the bank's prime rate or LIBOR rate options, at the Company's
election.

In December 2001, the Company entered into an interest rate swap agreement on
$24.0 million of its variable rate debt in order to hedge against an increase in
variable interest rates. The terms of the agreement fix the interest rate on
$24.0 million of the Company's variable rate, long-term note payable to 4.6% per
annum plus a variable increment that is based on certain financial ratios
contained in the loan covenants. This three-year agreement expires in December
2004. For the nine months ended September 30, 2002 the Company recorded an
unrealized loss of $1,035,681 netting to an unrealized loss of $1,298,562
remaining in the accumulated other comprehensive income line in the equity
section of the balance sheet.

Cash used by operations was $4.0 million in the first nine months of 2002
compared to $22.5 million of cash provided by operations in the first nine
months of 2001. This decrease in cash provided by operations primarily resulted
from an increase in accounts receivable of $12.1 million in the first nine
months of 2002 versus an increase of $.6 million in the first nine months of
2001, a $3.6 million decrease in the value of inventory in the first nine months
of 2002 versus a $9.2 million decrease in the value of inventory in the first
nine months of 2001, and a $7.1 million decrease in accounts payable in the
first nine months of 2002 versus a smaller $1.7 million decrease in 2001. The
accounts receivable increase in 2002 is a result of the increased sales volume
in the third quarter. Cash used in investing activities increased to $16.7
million in the first nine months of 2002 from $5.7 million in the first nine
months of 2001. In 2002, these funds were used primarily for the construction of
the new 192,000 square foot "Plant 3" and the purchase of associated
manufacturing equipment that has been discussed in prior quarters. The $19.7
million of cash provided by financing activities in the first nine months of
2002 was used primarily to fund the building and equipment expansion project as
well as the working capital increase described above.

During the remainder of 2002, the Company expects its capital expenditures will
consist of additional plant and equipment for its residential and commercial
wire operations including primarily the completion of the building and equipment
expansion project mentioned above. The expenditures for the expansion project
will be virtually complete in the fourth quarter. The Company estimates these
expenditures to total approximately $2 million during the fourth quarter of
2002. The Company will continue to manage its working capital requirements.
These requirements may increase as a result of expected continued sales
increases and will be impacted by the price of copper. The Company believes that
the cash flow from operations and the financing available under the Financing
Agreement will satisfy working capital and capital expenditure requirements for
the next twelve months.

13

FORM 10-Q

INFORMATION REGARDING FORWARD LOOKING STATEMENTS

This report on Form 10-Q contains various "forward-looking statements" (within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934) and information that are based on management's
belief as well as assumptions made by and information currently available to
management. Although the Company believes that the expectations reflected in
such forward-looking statements are reasonable, it can give no assurance that
such expectations will prove to have been correct. Such statements are subject
to certain risks, uncertainties and assumptions. Should one or more of these
risks or uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those expected. Among the key
factors that may have a direct bearing on the Company's operating results are
fluctuations in the economy and in the level of activity in the building and
construction industry, demand for the Company's products, the impact of price
competition and fluctuations in the price of copper.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes from the information provided in Item 7.A of
the Company's Annual Report on Form 10-K for the year ended December 31, 2001.

ITEM 4. CONTROLS AND PROCEDURES

Within the 90 days prior to the date of this report, an evaluation was performed
under the supervision and with the participation of the Company's management,
including the Chief Executive Officer (the "CEO") and the Chief Financial
Officer (the "CFO"), 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 CEO and CFO, concluded that the Company's
disclosure controls and procedures were effective as of September 30, 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
September 30, 2002.

PART II. OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) The information required by this Item 6(a) is set forth in the
Index to Exhibits accompanying this Form 10-Q.

(b) On August 12, 2002, the Company filed a report on Form 8-K to
furnish the CFO's and CEO's certification of the Company's
Quarterly Report on Form 10-Q for the period ended June 30,
2002 as required by 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

14

FORM 10-Q

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on behalf by
the undersigned thereunto duly authorized.

ENCORE WIRE CORPORATION
-------------------------------------------
(Registrant)

Dated: November 13, 2002 /s/ VINCENT A. REGO
-------------------------------------------
Vincent A. Rego, Chairman of the Board and
Chief Executive Officer

Dated: November 13, 2002 /s/ DANIEL L. JONES
-------------------------------------------
Daniel L. Jones, President and
Chief Operating Officer

Dated: November 13, 2002 /s/ FRANK J. BILBAN
-------------------------------------------
Frank J. Bilban, Vice President - Finance,
Treasurer and Secretary
Chief Financial Officer

15

FORM 10-Q

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

ENCORE WIRE CORPORATION

I, Vincent A. Rego, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Encore
Wire Corporation;

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 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 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
functions):

a) all significant deficiencies in the design
or operation of internal controls which
could adversely affect the registrant's
ability to record, process, summarize and
report financial data and have identified
for the registrant's auditors any material
weaknesses in internal controls; and

16

FORM 10-Q

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 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 13, 2002

/s/ VINCENT A. REGO
-------------------------
Vincent A. Rego
Chairman of the Board and
Chief Executive Officer

17

FORM 10-Q

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

ENCORE WIRE CORPORATION

I, Frank J. Bilban, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Encore
Wire Corporation;

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 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 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
functions):

18

FORM 10-Q

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 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 13, 2002

/s/ FRANK J. BILBAN
--------------------------------------------------
Frank J. Bilban
Vice President - Finance, Chief Financial Officer,
Treasurer and Secretary

19

FORM 10-Q

INDEX TO EXHIBITS

20

FORM 10-Q

21.1 Subsidiaries (filed as Exhibit 21.1 to the Company's Annual
Report on Form 10-K for the year ended December 31, 2001, and
incorporated herein by reference).

99.1 Certification of Chief Executive Officer pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.

99.2 Certification of Chief Financial Officer pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.

* Management contract or compensatory plan.