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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 10-Q

 

 

(Mark One)

 

[X]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE PERIOD ENDED December 31, 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 0-3821

 

 

GENCOR INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

 

 

Delaware

  

59-0933147

(State or other jurisdiction of

  

(I.R.S. Employer

incorporated or organization)

  

Identification No.)

 

 

5201 North Orange Blossom Trail, Orlando, Florida 32810

            (Address of principal executive offices)             (Zip Code)

 

 

(407) 290-6000

(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 and 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 number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date.

 

Class


  

Outstanding at January 31, 2003


Common stock, $.10 par value

  

6,884,070 shares

Class B stock, $.10 par value

  

1,798,398 shares

 


Table of Contents

 

GENCOR INDUSTRIES, INC.

 

Index

 

              

Page


Part I.

  

Financial Information

    
    

Item 1.

  

Financial Statements

    
         

Condensed consolidated balance sheets – December 31, 2002 (Unaudited)
and September 30, 2002

  

3

         

Unaudited condensed consolidated income statements – Three months ended
December 31, 2002 and 2001

  

4

         

Unaudited condensed consolidated statements of cash flows – Three months ended
December 31, 2002 and 2001

  

5

         

Notes to condensed consolidated financial statements

  

6

    

Item 2.

  

Management’s Discussion and Analysis of Financial Position and Results of Operations

  

8

    

Item 3.

  

Quantitative and Qualitative Disclosure About Market Risk

  

10

    

Item 4.

  

Controls and Procedures

  

11

Part II.

  

Other Information

    
    

Item 6.

  

Exhibits and Reports on Form 8-K

  

12

Signatures

            

13

 

 

2


Table of Contents

 

Part I.    Financial Information

 

Item 1.    Financial Statements

 

GENCOR INDUSTRIES, INC.

Condensed Consolidated Balance Sheets

In thousands, except share amounts

    

December 31

2002


    

September 30

2002


 

ASSETS

  

(Unaudited)

        

Current assets:

                 

Cash and cash equivalents

  

$

14,957

 

  

$

12,305

 

Accounts receivable, less allowance for doubtful accounts of $1,337 ($1,234 at September 30, 2002)

  

 

9,062

 

  

 

8,512

 

Inventories

  

 

19,098

 

  

 

19,012

 

Prepaid expenses

  

 

1,690

 

  

 

1,938

 

    


  


Total current assets

  

 

44,807

 

  

 

41,767

 

    


  


Property and equipment, net

  

 

15,486

 

  

 

15,693

 

Goodwill

  

 

364

 

  

 

364

 

Other assets

  

 

4,264

 

  

 

4,360

 

    


  


Total assets

  

$

64,921

 

  

$

62,184

 

    


  


LIABILITIES AND SHAREHOLDERS’ EQUITY

                 

Current liabilities:

                 

Notes payable

  

$

196

 

  

$

196

 

Current portion of long-term debt

  

 

5,226

 

  

 

6,068

 

Accounts payable

  

 

9,293

 

  

 

9,000

 

Customer deposits

  

 

1,946

 

  

 

498

 

Income and other taxes payable

  

 

5,103

 

  

 

3,534

 

Accrued expenses

  

 

10,362

 

  

 

9,947

 

    


  


Total current liabilities

  

 

32,126

 

  

 

29,243

 

Long-term debt

  

 

22,535

 

  

 

24,337

 

Other liabilities

  

 

3,309

 

  

 

3,309

 

    


  


Total liabilities

  

 

57,970

 

  

 

56,889

 

    


  


Shareholders’ equity:

                 

Preferred stock, par value $.10 per share; authorized 300,000 shares; none issued

  

 

—  

 

  

 

—  

 

Common stock, par value $.10 per share; 15,000,000 shares authorized; 6,971,470 shares issued

  

 

697

 

  

 

697

 

Class B stock, par value $.10 per share; 6,000,000 shares authorized:
1,890,398 shares issued

  

 

189

 

  

 

189

 

Capital in excess of par value

  

 

11,343

 

  

 

11,343

 

Retained Earnings

  

 

2,454

 

  

 

883

 

Accumulated other comprehensive loss

  

 

(5,933

)

  

 

(6,018

)

Subscription receivable from officer

  

 

(95

)

  

 

(95

)

Common stock in treasury, 179,400 shares at cost

  

 

(1,704

)

  

 

(1,704

)

    


  


    

 

6,951

 

  

 

5,295

 

    


  


Total liabilities and shareholders’ equity

  

$

64,921

 

  

$

62,184

 

    


  


 

See notes to condensed consolidated financial statements.

 

 

3


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GENCOR INDUSTRIES, INC.

Unaudited Condensed Consolidated Income Statements

In thousands, except per share amounts

 

    

Three Months Ended December 31


 
    

2002


    

2001


 

Net sales

  

$

13,274

 

  

$

10,872

 

Costs and expenses:

                 

Costs of products sold

  

 

10,424

 

  

 

8,860

 

Product engineering and development

  

 

410

 

  

 

421

 

Selling, general and administrative

  

 

3,111

 

  

 

3,033

 

Restructuring costs

  

 

—  

 

  

 

302

 

    


  


    

 

13,945

 

  

 

12,616

 

    


  


Operating loss

  

 

(671

)

  

 

(1,744

)

Other income (expense):

                 

Interest income

  

 

28

 

  

 

41

 

Interest expense

  

 

(492

)

  

 

(630

)

Income from investees

  

 

4,239

 

  

 

465

 

Miscellaneous

  

 

(55

)

  

 

(17

)

    


  


    

 

3,720

 

  

 

(141

)

    


  


Income (loss) from continuing operations before income taxes

  

 

3,049

 

  

 

(1,885

)

Income tax expense (benefit)

  

 

1,478

 

  

 

(599

)

    


  


Income (loss) from continuing operations

  

 

1,571

 

  

 

(1,286

)

    


  


Discontinued operations

                 

Income from discontinued operations, net of income taxes

  

 

—  

 

  

 

161

 

    


  


Net income (loss)

  

$

1,571

 

  

$

(1,125

)

    


  


Basic and diluted net income (loss) per common share:

                 

Income (loss) from continuing operations

  

$

0.18

 

  

$

(0.15

)

Discontinued operations

  

$

—  

 

  

$

0.02

 

    


  


Net income (loss)

  

$

0.18

 

  

$

(0.13

)

    


  


 

See notes to condensed consolidated financial statements.

 

4


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GENCOR INDUSTRIES, INC.

Unaudited Condensed Consolidated Statements of Cash Flows

In thousands

 

    

Three Months Ended

December 31


 
    

2002


    

2001


 

Cash flows from operations:

                 

Net income (loss)

  

$

1,571

 

  

$

(1,125

)

Adjustments to reconcile net income (loss) to cash provided by (used for) operations:

                 

Depreciation and amortization

  

 

237

 

  

 

450

 

Write-off deferred loan costs

  

 

—  

 

  

 

43

 

Bad debt expense

  

 

108

 

  

 

118

 

Change in assets and liabilities net of disposed business

                 

Accounts receivable

  

 

(655

)

  

 

242

 

Inventories

  

 

(89

)

  

 

(2,440

)

Prepaid expenses

  

 

257

 

  

 

887

 

Other assets

  

 

74

 

  

 

(111

)

Accounts payable

  

 

257

 

  

 

(2,213

)

Customer deposits

  

 

1,458

 

  

 

2,728

 

Income and other taxes payable

  

 

1,569

 

  

 

(465

)

Accrued expenses

  

 

416

 

  

 

301

 

    


  


Total adjustments

  

 

3,632

 

  

 

(460

)

    


  


Cash provided (used) by operations

  

 

5,203

 

  

 

(1,585

)

    


  


Cash flows from investing activities:

                 

Capital expenditures

  

 

(7

)

  

 

(38

)

    


  


Cash used for investing activities

  

 

(7

)

  

 

(38

)

    


  


Cash flows from financing activities:

                 

Repayment of debt

  

 

(2,644

)

  

 

(640

)

    


  


Cash used for financing activities

  

 

(2,644

)

  

 

(640

)

    


  


Effect of exchange rate changes on cash and cash equivalents

  

 

100

 

  

 

(42

)

    


  


Increase (decrease) in cash and cash equivalents

  

 

2,652

 

  

 

(2,305

)

Cash and cash equivalents at beginning of quarter

  

 

12,305

 

  

 

14,158

 

    


  


Cash and cash equivalents at end of quarter

  

$

14,957

 

  

$

11,853

 

    


  


 

See notes to condensed consolidated financial statements.

 

 

5


Table of Contents

GENCOR INDUSTRIES, INC.

 

Notes to Condensed Consolidated Financial Statements

All amounts in thousands, except per share amounts

 

Note 1 – Basis of Presentation

 

The accompanying 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 material adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended December 31, 2002 are not necessarily indicative of the results that may be expected for the year ended September 30, 2003.

 

The balance sheet at September 30, 2002 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

 

For further information, refer to the consolidated financial statements and footnotes thereto included in the Gencor Industries, Inc. Annual Report on Form 10-K for the year ended September 30, 2002.

 

Note 2 – Reorganization and Restructuring Costs

 

On December 31, 2001 the Amended Plan of Reorganization of Gencor Industries, Inc. became effective and the Company emerged from Chapter 11 in accordance with its earlier confirmed plan of reorganization.

 

As part of its planned reorganization, the Company announced its intent to dispose of its food segment. Accordingly, the Company reported the results of the remaining food processing equipment manufacturing business as discontinued operations. Most of the food processing equipment manufacturing operations were sold in May 2001. During September 2001, the Company’s Swedish food processing operation was placed into receivership and subsequently disposed of during the first quarter of fiscal 2002. The Company provided a loss contingency for the net assets of the Swedish operations during fiscal 2001. During the first quarter of fiscal 2002, the Company wrote off the remaining net assets of the Swedish operations against the loss reserve. The Company does not anticipate the realization of any significant proceeds or significant economic benefit from this transaction in the immediate future.

 

Restructuring costs consist of nonrecurring legal and professional fees relating to the bankruptcy filing and amending the Company’s credit agreements.

 

6


Table of Contents

 

Note 3 – Inventories

 

The components of inventory consist of the following:

 

    

December 31 2002


  

September 30 2002


Raw materials

  

$

8,933

  

$

9,235

Work in process

  

 

4,120

  

 

3,267

Finished goods

  

 

4,935

  

 

4,261

Used equipment

  

 

1,110

  

 

2,249

    

  

    

$

19,098

  

$

19,012

    

  

 

Note 4 – Earnings Per Share Data

 

The following table sets forth the computation of basic and diluted earnings per share for the periods indicated.

 

    

Three Months Ended

December 31


 
    

2002


  

2001


 

Basic and diluted:

               

Income (loss) from continuing operations

  

$

1,571

  

$

(1,286

)

Income from discontinued operations

  

 

—  

  

 

161

 

    

  


Net income

  

$

1,571

  

$

(1,125

)

    

  


Average outstanding shares

  

 

8,682

  

 

8,682

 

    

  


Basic and diluted EPS:

               

Continuing operations

  

$

0.18

  

$

(0.15

)

Discontinued operations

  

 

—  

  

 

0.02

 

    

  


Basic and diluted EPS

  

$

0.18

  

$

(0.13

)

    

  


 

Approximately 1,600,000 and 1,700,000 options to purchase common stock have not been included as common stock equivalents in the 2002 and 2001, respectively, per share calculations since the effect would not be dilutive or would be antidilutive.

 

Note 5 – Comprehensive Income (Loss)

 

The total comprehensive income (loss) for the three-months ended December 31, 2002 and 2001 was $1,656 and ($542), respectively. Total comprehensive income (loss) differs from net income (loss) due to gains and losses resulting from foreign currency translation, which are reflected separately in the shareholders’ equity section of the balance sheet under the caption “Accumulated other comprehensive loss.” Gains and losses resulting from foreign currency transactions are included in income.

 

Note 6 – Income From Investees

 

During the first quarter of fiscal 2003, the Company received cash distributions of $4,239 from its 45% interest in Carbontronics LLC and 25% interest in Carbontronics II LLC and Carbontronics Fuels LLC. These interests were obtained as part of contracts to build four synthetic fuel production plants during 1998. The Company has no basis in these investments nor requirement to provide future funding. Any income

 

7


Table of Contents

 

arising from these investments is dependent upon tax credits (adjusted for operating losses at the fuel plants) being generated as a result of synthetic fuel production, which will be recorded as received. During the first quarter of fiscal 2002, the Company received a distribution of $465.

 

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

 

Results of Operations

 

Net sales for the quarters ended December 31, 2002 and 2001 were $13.3 million and $10.9 million, respectively. Domestic sales during the first quarter of fiscal 2003 were $8.8 million reflecting an increase of $3.8 million from year ago levels. The increase in domestic sales is primarily due to the stalling of our industry in the first quarter of 2002, attributable to the September 11 events and the prevailing national economic conditions. This uncertainty was combined with the typical seasonal slowdown (see Seasonality).

 

Gross margins as a percent of net sales increased by 3.0% during the quarter ended December 31, 2002 from year ago levels. Gross margins on domestic sales increased by 8.0% as compared to the previous year. This reflects the increase in domestic orders. Gross margins from foreign sales declined 9.1% during the quarter from year ago levels resulting from the decline in foreign sales.

 

Product engineering and development costs along with selling and administrative expenses have remained relatively constant from year ago levels, reflecting the companies efforts to maintain the cost savings initiatives instituted during the first quarter of fiscal 2002.

 

Restructuring costs, primarily legal and professional fees relating to the reorganization were $302 for the first quarter of fiscal 2002. There were no restructuring costs for the first quarter of fiscal 2003.

 

Other Income (Expense)

 

Interest expense for the first quarter of fiscal 2003 decreased by $138 from the first quarter of fiscal 2002, reflecting a decrease in the prime lending rate and a reduction in the debt balance.

 

Distributions from investments in Carbontronics LLC, Carbontronics II LLC, and Carbontronics Fuels LLC, were $4,239 in the first quarter of 2003 versus $465 for the same period of fiscal 2002.

 

Income tax expense increased by $2.1 million from year ago levels, reflecting the increase in pre-tax income.

 

Liquidity and Capital Resources

 

On December 27, 2001, the Company and its Senior Secured Lenders signed an Amended and Restated Senior Secured Credit Agreement, which specifies monthly principal payments of $320 beginning December 2001 and continuing through July 2002, then increasing to $400 in August 2002 and continuing to August 2005, with the remaining balance due September 6, 2005. It is management’s intention to refinance any remaining balance. The interest rate during the term of the loan is based upon the prime rate plus 2%. The Company may elect to defer the first thirteen (13) monthly principal payments and if so incur an additional 5% interest premium on the total deferred principal payments until such time the deferred principal payments are paid. The Credit Agreement also provides for quarterly supplemental principal payments if certain operating levels are surpassed. During fiscal 2002, the Company paid $4,000 in principal and in November

 

8


Table of Contents

 

2002, paid an additional $1,500 in principal. As of December 31, 2002, there are no deferred principal payments. The Credit Agreement includes certain other financial and restrictive covenants. Pursuant to the terms of the amended and restated credit agreement, the Company will not be paying dividends for the foreseeable future.

 

Pursuant to its Amended Plan of Reorganization, on January 29, 2002, the Company made a principal payment of $488 on the industrial revenue bond. Monthly principal and interest payments of $38 are required to be made until the balance is paid off in March 2005.

 

With the Amended and Restated Credit Agreement in place, the Company’s capital structure, liquidity and working capital have significantly improved. The current ratio of 1.39:1.00 and working capital of $13 million at December 31, 2002 compares to a current ratio of 1.66:1.00 and working capital of $18 million a year ago, which reflects the requirement to classify $5.2 million of debt as current maturities, based upon terms of the Amended and Restated Credit Agreement.

 

Cash provided (used) by operations increased from ($1.6 million) during the first quarter of fiscal 2002 to $5.2 million for the same period of fiscal 2003. The $6.8 million improvement reflects favorable net cash inflows primarily from increases in income from investees and customer deposits. Cash used in financing activities reflected principal payments of $2,502 against the secured loan agreements, and $142 against the Industrial Revenue Bond.

 

Seasonality

 

The Company is concentrated in the asphalt-related business and is subject to a seasonal slow-down during the third and fourth quarters of the calendar year. Traditionally, the Company’s customers do not purchase new equipment for shipment during the summer and fall months to avoid disrupting their peak season for highway construction and repair work. This slow-down often results in lower reported sales and earnings and or losses during the first and fourth quarters of the Company’s fiscal year ended September 30.

 

Forward-Looking Information

 

This Form 10-Q contains certain “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which represent the Company’s expectations and beliefs, including, but not limited to, statements concerning gross margins, sales of the Company’s products and future financing plans. These statements by their nature involve substantial risks and uncertainties, certain of which are beyond the Company’s control. Actual results may differ materially depending on a variety of important factors, including the financial condition of the Company’s customers, changes in the economic and competitive environments and demand for the Company’s products.

 

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Table of Contents

 

Item 3.    Quantitative and Qualitative Disclosures About Market Risk

 

The Company operates manufacturing facilities and sales offices principally located in the United States and the United Kingdom. The Company is subject to business risks inherent in non-U.S. activities, including political and economic uncertainty, import and export limitations, and market risk related to changes in interest rates and foreign currency exchange rates. The Company’s principal currency exposure against the U.S. dollar is the British pound. Periodically, the Company has used derivative financial instruments consisting primarily of interest rate hedge agreements to manage exposures to interest rate changes. The Company’s objective in managing its exposure to changes in interest rates on its variable rate debt is to limit the impact of such changes on earnings and cash flow and to reduce its overall borrowing costs.

 

At December 31, 2002, the Company had approximately $28 million of debt outstanding. Under the Amended and Restated Secured Credit Agreement, substantially all of the Company’s borrowings will bear interest at variable rates based upon the prime rate plus 2%. The Company performed a sensitivity analysis assuming a hypothetical 1% adverse movement in the interest rates on the debt outstanding at the end of December 2002. Such a movement in interest rates would cause the Company to recognize additional quarterly interest expense of approximately $70 along with a corresponding decrease in cash flows.

 

The above sensitivity analysis for interest rate risk excludes accounts receivable, accounts payable and accrued liabilities because of the short-term maturity of such instruments. The analysis does not consider the effect on other variables such as changes in sales volumes or management’s actions with respect to levels of capital expenditures, future acquisitions or planned divestitures, all of which could be significantly influenced by changes in interest rates and cause the results to differ significantly from those indicated by the sensitivity analysis.

 

10


Table of Contents

 

Item 4.    Controls and Procedures

 

The Company’s President and Chief Financial Officer evaluated the Company’s disclosure controls and procedures within 90 days of the filing date of this quarterly report. Based upon this evaluation, the Company’s President and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective in ensuring that material information required to be disclosed is included in the reports that it files with the Securities and Exchange Commission.

 

There were no significant changes in the Company’s internal controls or, to the knowledge of the management of the Company, in other factors that could significantly affect internal controls subsequent to the evaluation date.

 

11


Table of Contents

Part II.    Other Information

 

 

Item 6.    Exhibits and Reports on Form 8-K

 

(a)   Exhibits

 

  99.1   Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by E.J. Elliott and Scott W. Runkel.

 

(b)   Reports on Form 8-K.

 

None.

 

 

12


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SIGNATURES

 

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

 

 

   

GENCOR INDUSTRIES, INC.

February 14, 2003

 

By:

 

/s/    E.J. ELLIOTT

           
           

E.J. Elliott, Chairman and President

February 14, 2003

 

By:

 

/s/    SCOTT W. RUNKEL

           
           

Scott W. Runkel, Chief Financial Officer

 

 

13


Table of Contents

CERTIFICATIONS

 

I, Mr. E.J. Elliott, certify that:

 

1.   I have reviewed this quarterly report on Form 10-Q of Gencor Industries, Inc.

 

2.   Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

 

3.   Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

 

4.   The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a – 14 and 15d – 14) for the registrant and we have:

 

  a)   designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
 
  b)   evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and
 
  c)   presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

 

5.   The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

 

  a)   all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
 
  b)   any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

 

6.   The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

 

Date:

 

February 14, 2003


 

/s/    E.J. ELLIOTT


       

E.J. Elliott

Chairman and President

 

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CERTIFICATIONS

 

I, Mr. Scott W. Runkel

 

1.   I have reviewed this quarterly report on Form 10-Q of Gencor Industries, Inc.

 

2.   Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

 

3.   Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

 

4.   The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a – 14 and 15d – 14) for the registrant and we have:

 

  a)   designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
 
  b)   evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and
 
  c)   presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

 

5.   The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

 

  a)   all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
 
  b)   any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

 

6.   The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

 

Date:

 

February 14, 2003


 

/s/    SCOTT W. RUNKEL


       

Scott W. Runkel

Chief Financial Officer

 

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