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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 29, 2003

Commission file number 0-6072

EMS TECHNOLOGIES, INC.

(770) 263-9200
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 [X] No [  ]

     The number of shares outstanding of each of the issuer’s classes of common stock, as of the close of business on May 13, 2003:

AVAILABLE INFORMATION

     EMS Technologies, Inc. makes available free of charge, on or through its website at www.ems-t.com, its annual, quarterly and current reports, and any amendments to those reports, as soon as reasonably practicable after electronically filing such reports with the Securities and Exchange Commission. Information contained on the Company’s website is not part of this report.

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PART I

FINANCIAL INFORMATION

ITEM 1.       Financial Statements

EMS Technologies, Inc. and Subsidiaries
Consolidated Statements of Earnings (Unaudited)
(In thousands, except net earnings per share data)

See accompanying notes to interim consolidated financial statements.

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EMS Technologies, Inc. and Subsidiaries
Consolidated Balance Sheets (Unaudited)
(in thousands)

See accompanying notes to interim consolidated financial statements.

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EMS Technologies, Inc. and Subsidiaries
Consolidated Balance Sheets (Unaudited), continued
(in thousands, except share data)

See accompanying notes to interim consolidated financial statements.

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EMS Technologies, Inc. and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)
(in thousands)

See accompanying notes to interim consolidated financial statements.

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EMS Technologies, Inc. and Subsidiaries
Notes to Interim Consolidated Financial Statements (Unaudited)

1.

Basis of Presentation

The interim consolidated financial statements include the accounts of EMS Technologies, Inc. and its wholly-owned subsidiaries LXE Inc. and EMS Technologies Canada, Ltd. (collectively, “the Company”). In the opinion of management, the interim consolidated financial statements reflect all normal and recurring adjustments necessary for a fair presentation of results for such periods. The results of operations for any interim period are not necessarily indicative of results for the full year. Certain prior period financial statement balances have been reclassified to conform to the current period’s classification. These consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002.

— Stock Option Plans

Prior to January 1, 1996, the Company accounted for its stock option plans in accordance with the provisions of Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations. As such, compensation expense would be recorded on the date of grant only if the current market price of the underlying stock exceeded the exercise price. On January 1, 1996, the Company adopted Statement of Financial Accounting Standards (“SFAS”) No. 123, “Accounting for Stock-Based Compensation,” which permits entities to recognize as expense, over the vesting period, the fair value of all stock-based awards on the date of grant. Alternatively, SFAS No. 123 also allows entities to continue to apply the provisions of APB Opinion No. 25 and provide pro forma net earnings and pro forma earnings per share disclosures for employee stock option grants made in 1995 and future years as if the fair-value-based method defined in SFAS No. 123 had been applied. The Company has elected to continue to apply the provisions of APB Opinion No. 25 and provide the pro forma disclosure required by SFAS No. 123.

The Company has adopted SFAS No. 148, “Accounting for Stock-Based Compensation – Transition and Disclosure,” including the interim reporting requirements. The following table illustrates the effect on net earnings and earnings per share if the Company had applied the fair value method to measure stock-based compensation (in thousands, except net earnings per share):

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2.

Derivative Financial Instruments

The Company uses derivative financial instruments (forward exchange contracts) to hedge currency fluctuations in future cash flows denominated in foreign currencies, thereby limiting the Company’s risk that would otherwise result from changes in exchange rates. The Company has established policies and procedures for risk assessment and the approval, reporting and monitoring of derivative financial instrument activities. The Company does not enter into derivative financial instruments for trading or speculative purposes.

SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” requires the Company to recognize all derivatives on the balance sheet at fair value. Under SFAS No. 133, certain of the Company’s routine long-term contracts to deliver Space & Technology products are considered to be derivative instruments, because these contracts create long-term obligations for non-U.S. customers to pay the Company’s Canadian subsidiary in U.S. dollars. Changes in the fair values of these embedded derivatives are included in current earnings.

The derivative activity as reported in the Company’s financial statements during the quarters was (in thousands):

All of the foreign currency contracts currently in place will expire by the end of the third quarter of 2003.

3.

Earnings per Share

Basic earnings per share is the per share allocation of income available to common stockholders based only on the weighted average number of common shares actually

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outstanding during the period. Diluted earnings per share represents the per share allocation of income attributable to common stockholders based on the weighted average number of common shares actually outstanding plus all dilutive potential common shares outstanding during the period.

The Company has granted stock options that are potentially dilutive to basic earnings per share, summarized as follows (shares in thousands):

For each earnings per share calculation reported for the first quarter of 2003 and 2002, the numerators were the same as reported in the income statement. Following is a reconciliation of the denominator for basic and diluted earnings per share calculations for the first quarter (in thousands):

4.

Comprehensive Income (Loss)

Following is a summary of comprehensive income (loss) (in thousands):

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5.

Inventories

Inventories included the following (in thousands):

6.

Interim Segment Disclosures

The Company is organized into five reportable segments: Space & Technology/Atlanta, Space & Technology/Montreal, LXE, EMS Wireless and SATCOM. Each segment is separately managed and comprises a range of products and services that share distinct operating characteristics. The Company evaluates each segment primarily upon operating profit.

The Space & Technology segments manufacture custom-designed, highly engineered hardware for use in advanced communications. The Space & Technology/Atlanta segment primarily serves the defense market, while the Space & Technology/Montreal segment provides products for the commercial satellite market. Orders in both these segments typically involve development and production schedules that can extend a year or more, and most revenues are recognized under percentage-of-completion long-term contract accounting. Hardware is sold to prime contractors or systems integrators rather than to end-users.

The LXE segment manufactures wireless local area networks (“LAN”) products for use mainly in logistics. The manufacturing cycle for each order is generally just a few days, and revenues are recognized upon shipment of hardware. Hardware is marketed to end-users and to third parties that incorporate their products and services with the Company’s hardware for delivery to end-users.

The EMS Wireless segment manufactures antennas and repeaters for PCS/cellular communications systems. The manufacturing cycle for each order is generally just a few days, and revenues are generally recognized upon shipment of hardware. Hardware is marketed to wireless service providers and to original equipment manufacturers (“OEMs”) for mobile voice/paging services, as well as for other emerging high-speed wireless systems.

The SATCOM segment manufactures antennas and other hardware for satellite communications systems. The manufacturing cycle for most orders is generally just a few days, and revenues are recognized upon shipment of hardware. The SATCOM segment also has orders that involve development and production schedules that can extend a year or more, and these revenues are recognized under percentage-of-completion long-term contract accounting. Hardware is marketed to third parties that incorporate their products and services with the Company’s hardware for delivery to end-users.

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Following is a summary of the Company’s interim segment data (in thousands):

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ITEM 2.       Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis should be read in conjunction with the Company’s consolidated financial statements and related notes included in Item 1 of Part 1 of this quarterly report and the audited consolidated financial statements and notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, 2002.

Critical Accounting Policies

Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, which often require the judgment of management in the selection and application of certain accounting principles and methods. We consider the following to be critical to an understanding of our financial statements because their application requires significant judgment, and because differences, between actual future events and the expectations on which these judgments were based, can have significant effects on our financial results reported for future periods.

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Revenue recognition on long-term contracts

Revenue recognition for fixed-price, long-term contracts in the two Space & Technology segments, and in the SATCOM segment, is a critical accounting policy involving significant management estimates. These segments’ long-term contracts use the ratio of cost-incurred to total-estimated-cost, as the measure of performance that determines how much revenue should be recognized. The calculation of total-estimated-cost relies on engineering estimates of the cost to complete the contract, with allowances for identifiable risks and uncertainties. These engineering estimates are frequently reviewed and updated. However, unforeseen problems can occur to substantially reduce the rate of future revenue recognition in relation to costs incurred.

Most of the Space & Technology segments’ contracts involve development of new or unproven applications of technology. Due to technological uncertainties, a contract may be broadly defined in its early stages, with a structure to accommodate future changes in the scope of work or contract value as technical development progresses. In such cases, management must estimate the future expected levels of scope of work and likely contract value changes to determine the appropriate level of current revenue associated with current costs incurred. Actual future changes may vary from expected changes, resulting in a reduction (or increase) in revenues recognized in future periods.

Accounting for government research incentives

Our accrual of research incentives from the Canadian government is a critical accounting policy involving management estimates for our Space & Technology/Montreal segment. These incentives are in the form of a cash reimbursement for a portion of certain qualified research expenditures. Incentives are recorded as a reduction of cost of sales, because the underlying research efforts primarily apply to development of technological capabilities for specific business opportunities. For the quarter ended March 29, 2003, total incentives earned were approximately $621,000, compared with $685,000 for the quarter ended March 30, 2002. We have established procedures to identify qualified costs and to submit appropriate claims for reimbursement; all of these claims are subject to financial and scientific audits by the Canadian government concerning whether certain expenses qualified for incentive programs. Although there have historically been no significant disallowances of previously accrued incentives that resulted from these audits, such disallowances in the future would have an unfavorable effect on our statement of earnings.

Evaluation of long-lived assets for impairment

All long-lived assets on the balance sheet are periodically reviewed for impairment. The most significant long-lived asset is a less-than-5% equity investment in a limited partnership, SkyBridge LLP, with a carrying value on the balance sheet of $17.9 million at March 29, 2003. The goal of this investment is to enable us to participate in the development and implementation of a satellite network to provide high-data-rate wireless services. The partnership is an active and financially viable entity, and management representatives attend partners’ meetings to receive updates on the entity’s progress. Since we acquired our equity investment four years ago, new equity partners have invested in the partnership at a higher subscription price than we paid. As a result, we believe that the asset is not impaired and that it is appropriately accounted for as of March 29, 2003. However, due to current difficult economic conditions in the commercial space market, the partnership has delayed construction of its satellite network and is instead developing a new business strategy based

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on an architecture with GEO (“geosynchronous earth orbit”) satellites rather than LEO (“low earth orbit”) satellites. If the current difficult market conditions persist for commercial space ventures, we may determine at some future date that the asset has become impaired, which would require a charge to non-operating income.

Establishment of reserves for deferred income tax assets

It is management’s expectation that in the future our Canadian operations will earn more than enough research-related tax benefits each year to offset any Canadian federal tax liability for any given year. As a result, we have reserved substantially all the net deferred tax assets associated with these research-related tax benefits (totaling approximately $17 million at March 29, 2003), because they are unlikely to be realized. However, this reserve may be reduced, resulting in an income tax benefit to a future statement of earnings, if (1) the level of our qualified research in Canada decreases, which would lower the tax benefits earned in future years, or (2) our profitability in Canada increases, which would increase the tax liability incurred in future years.

Results of Operations

Net Sales

Consolidated net sales decreased to $66.5 million in the first quarter of 2003, compared with $70.4 million in the first quarter of 2002. The most significant decrease was in our Space & Technology/Montreal (“S&T/Montreal”) segment. S&T/Montreal mainly serves the commercial space markets, which are currently experiencing very difficult conditions. This segment’s revenues decreased $8.0 million from the same period in the prior year. Sales at the EMS Wireless segment decreased by $3.9 million from the prior year due to the slowdown in capital spending in the telecommunications market. The Space & Technology/ Atlanta, LXE and SATCOM segments experienced increases in revenue from the prior year.

Net Sales and Operating Income by Segment

Our segment net sales and operating income (loss) were as follows (in thousands):

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Space & Technology/Atlanta: Sales in our Space & Technology/Atlanta (“S&T/Atlanta”) segment, which primarily serves the defense markets, increased by $381,000 from the same quarter last year. We expect that defense markets will continue to improve during the current fiscal year.

Space & Technology/Montreal: Sales in our S&T/Montreal segment, which primarily serves the commercial space markets, decreased by $8.0 million from the first quarter of last year. Increasingly difficult market conditions caused commercial space orders to decline over the last three years, with the result that commercial space revenues and profits peaked in 2001 and decreased significantly in 2002 and in the first quarter of 2003. We expect that difficult market conditions in commercial space will persist in 2003. We also believe that we have reduced our continuing financial risk on most of the large long-term contracts that over recent years have presented serious technical, schedule and contractual challenges. However, on a small number of relatively large programs, we continue to address technical, schedule and contractual issues that, if not satisfactorily resolved, would materially affect our 2003 S&T/Montreal revenues under the percentage-completion method of accounting described in our critical accounting policies.

LXE: LXE net sales increased to $22.1 million for the first quarter of 2003 compared with $19.9 million in the same period last year. The increase is due to higher international revenues, particularly from increased capital spending in our European markets and a stronger euro.

EMS Wireless: Net sales in our EMS Wireless segment decreased by $3.9 million from the first quarter of 2002 due to slowdown in capital spending in the telecommunications markets. Despite the slowdown, the EMS Wireless segment was able to report a modest profit. We are uncertain whether the market for base-station antennas will significantly improve during the remainder of 2003, but we are seeking to generate additional revenues through introduction of new products and broader market acceptance of our repeater products.

SATCOM: Net sales in our SATCOM segment increased $4.3 million from the first quarter of 2002, primarily from sales of our high-speed-data products. We expect that our corporate jet sales will significantly slow in 2003, but SATCOM’s overall sales should continue to grow based on defense and security opportunities for both our land-mobile and aeronautical products.

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Cost of Sales

Cost of sales, as a percentage of consolidated net sales, was 67.3% in the first quarter of 2003 compared with 64.3% in the first quarter of 2002. The increase in the cost of sales percentage was mostly in the S&T/Montreal and SATCOM segments. The increase in the S&T/Montreal segment was due to supplier delays and technical difficulties on commercial space contracts. The increase in the SATCOM segment was due to the effect of the strengthening Canadian dollar against the U.S. dollar.

Selling, General and Administrative Expenses

Selling, general and administrative expenses (“SG&A”) were $14.8 million and $14.9 million for the first quarters of 2003 and 2002, respectively. The increase in SG&A expenses in the LXE segment from increased international expenses and in the SATCOM segment from the introduction of new products, was more than offset by the reduction in SG&A expenses in the S&T/Atlanta, S&T/Montreal and EMS Wireless segments due to cost-control measures.

Research and Development Expenses

Research and development expenses (“R&D”) represent the cost of our internally funded efforts. Significant R&D efforts also occur under specific customer orders in the Space & Technology segments and, accordingly, are reflected in cost of sales. Consolidated R&D decreased to $6.3 million in the first quarter of 2003 from $6.7 million in the first quarter of 2002. The decrease is due to reductions in internally funded R&D, as development was completed on a high-speed aeronautical terminal for SATCOM, and certain repeater products for EMS Wireless.

Foreign Exchange Gain (Loss)

We recognize foreign exchange gains and losses related to an asset or liability denominated in a foreign currency, and if applicable, any embedded derivatives. We use foreign currency forward contracts to hedge our exposure to fluctuations in the foreign currency exchange rates.

Because of U.S. dollar-denominated contracts from customers of our Canadian subsidiary, a stronger U.S. dollar against the Canadian dollar usually results in foreign exchange gains. Due to our Canadian subsidiary’s operations in the United Kingdom, a stronger Canadian dollar against the British pound usually results in foreign exchange gains. We also recognize net gains and losses from translation of the LXE European subsidiaries’ short-term intercompany liabilities (payable in U.S. dollars). These liabilities arise when the subsidiaries buy LXE products from the parent for resale in Europe. A weaker U.S. dollar against the euro usually results in foreign exchange gains.

In the first quarter of 2003, the net foreign currency gain of $272,000 was a result of the weaker U.S. dollar against the euro and the stronger Canadian dollar against the British pound. In the first quarter of 2002, the net foreign currency gain of $284,000 was a result of the stronger U.S. dollar against the Canadian dollar.

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Interest Expense

Interest expense decreased to $796,000 in 2003 compared with $837,000 in 2002. The decrease in 2003 was due to decreased average debt levels that resulted from positive cash flow and to lower interest rates.

Income Tax Expense

The effective income tax rate was 35% for the first quarter of 2003 compared with 30% for the first quarter of 2002. The effective income tax rate increased because management expected that, for the year 2003, a higher portion of pre-tax profits would derive from the Company’s U.S. operations. The U.S. operations have an effective income tax rate of approximately 38%, as compared with the Company’s Canadian operations that have a much lower effective income tax rate due to research-related tax credits. The interim effective income tax rate is based upon management’s expectations for the full year. This rate could increase in subsequent interim periods if the Company earns more profits than expected in the U.S. or fewer profits than expected in Canada.

New Accounting Pronouncements

In April 2002, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 145, “Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections.” SFAS No. 145 rescinds SFAS No. 4, “Reporting Gains and Losses from Extinguishment of Debt,” and an amendment of that statement, SFAS No. 64, “Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements.” This statement also amends SFAS No. 13, “Accounting for Leases,” to eliminate an inconsistency between the required accounting for sale-leaseback transactions and the required accounting for certain lease modifications that have economic effects that are similar to sale-leaseback transactions. In addition, this statement amends other existing authoritative pronouncements to make various technical corrections, clarify meanings, or describe their applicability under changed conditions. SFAS No. 145 is effective for the Company’s fiscal year beginning in 2003 with earlier application encouraged. Adoption did not have a material impact on the consolidated financial statements of the Company.

In November 2002, the FASB issued Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others,” which requires the guarantor to: (1) recognize a liability for the fair value of the “obligation to stand ready to perform” under a guarantee, and (2) provide disclosure information concerning specified other guarantees, such as product warranties. The recognition and measurement provisions of Interpretation No. 45 apply to guarantees entered into or modified after December 31, 2002, and the implementation of these provisions did not have a material impact on the Company’s consolidated financial statements. The Company has adopted the disclosure requirements of Interpretation No. 45 for specified guarantees, including product warranties, contingent consideration from a business combination, and a parent’s guarantee of a portion of a subsidiary’s debt to a third party.

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In December 2002, the FASB issued SFAS No. 148, “Accounting for Stock-Based Compensation – Transition and Disclosure.” SFAS No. 148 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, SFAS No. 148 amends the disclosure requirements of SFAS No. 123 to require prominent disclosure 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 reporting results. The transition guidance and annual disclosure provisions of SFAS No. 148 are effective for fiscal years ending after December 15, 2002. The interim disclosure provisions are effective for financial reports containing financial statements for interim periods beginning after December 15, 2002. The disclosures required by SFAS No. 148 are included above in Note 1 of the Notes to Interim Consolidated Financial Statements.

In January 2003, the FASB issued Interpretation No. 46, “Consolidation of Variable Interest Entities.” The interpretation provides guidance on consolidating variable interest entities and applies immediately to variable interests created after January 31, 2003. The interpretation requires variable interest entities to be consolidated if the equity investment at risk is not sufficient to permit an entity to finance its activities without support from other parties, or if the equity investors lack certain specified characteristics. Adoption of Interpretation No. 46 did not have a material impact on the Company’s consolidated financial statements.

In April 2003, the FASB issued SFAS No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities”, which amends SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”, to address decisions reached by the Derivatives Implementation Group, developments in other Board projects that address financial instruments, and implementation issues related to the definition of a derivative. The Company is currently evaluating the impact that SFAS No. 149 will have on the Company’s consolidated financial statements.

Liquidity and Capital Resources

Net cash provided by operating activities was $397,000 in the first quarter of 2003, compared with net cash used in operating activities of $3.8 million in the first quarter of 2002. The main source of cash in the first quarter of 2003 was the reduction in accounts receivable which includes cash receipts from large contracts in S&T/Atlanta. This was partially offset by the use of cash to decrease accounts payable and to increase inventories.

During 2003, the net repayment of long-term debt was $575,000. This change included a $121,000 net decrease in the balances due under revolving credit arrangements and net repayments of term debt of approximately $454,000.

At March 29, 2003, the Company had $8.6 million available for borrowing under its U.S. revolving credit agreement and $2.5 million available for borrowing under its Canadian revolving credit agreement. At March 29, 2003, the Company was either in compliance with or had received a bank waiver of compliance relating to all covenants. These credit agreements mature in 2003, and the Company expects to renew these agreements on terms that are comparable with the existing terms.

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The Company expects that capital expenditures in 2003 will range from $10 million to $15 million. These expenditures will be used primarily to purchase equipment that increases or enhances capacity and productivity.

The Company’s material contractual cash commitments and material other commercial commitments have not changed significantly from those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2002.

Management believes that cash flows from operations and borrowings available under its credit agreements will provide sufficient liquidity to meet the operating and capital expenditure needs for existing operations during the next twelve months. To fund long-term growth, the Company may consider such measures as offerings of common stock or convertible securities, or revised long-term credit arrangements.

Risk Factors and Forward-Looking Statements

The Company has included forward-looking statements in Management’s Discussion and Analysis of Financial Condition and Results of Operations. Actual results could differ materially from those suggested in any forward-looking statements as a result of a variety of factors. Such factors include, but are not limited to:

•

economic conditions in the U.S. and abroad and their effect on capital spending in the Company’s principal markets;

•

volatility of foreign exchange rates relative to the U.S. dollar and their effect on purchasing power by international customers, as well as the potential for realizing foreign exchange gains or losses associated with net foreign assets held by the Company;

•

successful resolution of technical problems, proposed scope changes, or proposed funding changes that may be encountered on contracts;

•

changes in the Company’s consolidated effective income tax rate caused by the extent to which actual taxable earnings in the U.S., Canada and other taxing jurisdictions may vary from expected taxable earnings;

•

successful completion of technological development programs by the Company and the effects of technology that may be developed by competitors;

•

successful transition of products from development stages to an efficient manufacturing environment;

•

customer response to new products and services, and general conditions in our target markets (such as logistics, PCS/cellular telephony and space-based communications);

•

the availability of financing for satellite data communications systems and for expansion of terrestrial PCS/cellular phone systems;

•

the extent to which terrestrial systems succeed in providing extensive broadband Internet access on a dependable and economical basis;

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•

development of successful working relationships with local business and government personnel in connection with the distribution and manufacture of products in foreign countries;

•

the growth rate of demand for various mobile and high-speed data communications services;

•

the Company’s ability to attract and retain qualified personnel, particularly those with key technical skills; and

•

the availability of sufficient additional credit or other financing, on acceptable terms, to support the Company’s expected growth.

ITEM 3.       Quantitative and Qualitative Disclosures About Market Risk

As of March 29, 2003, the Company had the following market risk sensitive instruments (in thousands):

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As of March 29, 2003, the Company also had intercompany accounts that eliminate in consolidation but that are considered market risk sensitive instruments. Short-Term Due to Parent, payable by European and Australian subsidiaries and arising from purchase of the Parent’s products for sale, were as follows:

The Company has foreign currency risks associated with forward contracts as follows (in thousands, except average contract rate):

The Company enters into foreign currency forward contracts in order to mitigate the risks associated with currency fluctuations on future cash flows.

ITEM 4.       Controls and Procedures

The Company has established and maintains disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14). The objective of these controls and procedures is to ensure that information relating to the Company, including its consolidated subsidiaries, and required to be filed by it in reports under the Securities Exchange Act, as amended, is effectively communicated to the Company’s CEO and CFO, and is recorded, processed, summarized and reported on a timely basis.

The CEO and CFO have evaluated the Company’s disclosure controls and procedures within 90 days prior to the filing date of this quarterly report. Based upon this evaluation, the CEO and CFO have concluded that the Company’s disclosure controls and procedures are adequate to accomplish their objective and are functioning effectively.

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Subsequent to the most recent evaluations by the CEO and CFO, there have been no significant changes in the Company’s internal controls (including corrective actions for significant deficiencies or material weaknesses) or other factors that could significantly affect these internal controls.

PART II

OTHER INFORMATION

ITEM 6.       Exhibits and Reports on Form 8-K

(a)

Exhibits — The following exhibits are filed as part of this report:

(b)

Reports on Form 8-K. On February 25, 2003, the Registrant filed a Report on Form 8-K, reporting with respect to Item 5, Other Events and Required FD Disclosure.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.