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

FORM 10-Q

COMMISSION FILE NUMBER: 0-14818

TRANS WORLD ENTERTAINMENT CORPORATION
(Exact name of registrant as specified in its charter)

38 Corporate Circle
Albany, New York 12203
(Address of principal executive offices, including zip code)

(518) 452-1242
(Registrant's telephone number, including area code)

        Indicate by a check mark whether the Registrant (1) has filed all reports required to be filed by Sections 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 ý    No o

        Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Common Stock, $.01 par value,
39,920,804 shares outstanding as of December 1, 2002

TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES
QUARTERLY REPORT ON FORM 10-Q
INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION
Item 1—Financial Statements
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)

See Notes to Condensed Consolidated Financial Statements.

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TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)

See Notes to Condensed Consolidated Financial Statements.

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TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)

See Notes to Condensed Consolidated Financial Statements.

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TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
November 2, 2002 and November 3, 2001 (unaudited)

Note 1. Basis of Presentation

        The accompanying unaudited condensed consolidated financial statements consist of Trans World Entertainment Corporation (the "Company"), its wholly owned subsidiary Record Town, Inc. ("Record Town"), Record Town's subsidiaries, all of which are wholly owned and Second Spin.com, which is majority owned. All significant inter-company accounts and transactions have been eliminated.

        The interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. The information furnished in these condensed consolidated financial statements reflects all normal, recurring adjustments which, in the opinion of management, are necessary for the fair presentation of such financial statements. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to rules and regulations applicable to interim financial statements.

        These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended February 2, 2002.

        Certain reclassifications of the prior year's condensed consolidated financial statements have been made to conform to the current year presentation.

Note 2. Seasonality

        The Company's business is seasonal in nature, with the highest sales and earnings occurring in the fourth fiscal quarter.

Note 3. Depreciation and Amortization

        Depreciation and amortization of fixed assets for the Company's distribution centers included in cost of sales totaled $0.6 million and $0.4 million for the thirteen weeks ended November 2, 2002 and November 3, 2001, respectively. For the thirty-nine week periods ended November 2, 2002 and November 3, 2001, depreciation and amortization of fixed assets for the Company's distribution centers included in cost of sales totaled $1.7 million and $1.2 million respectively. Depreciation and amortization for the remaining fixed assets included in selling, general and administrative ("SG&A") expenses totaled $10.3 million and $10.9 million in the thirteen week periods ended November 2, 2002 and November 3, 2001, respectively. Depreciation and amortization included in SG&A were $29.7 million and $30.2 million for the thirty-nine week periods ended November 2, 2002 and November 3, 2001, respectively.

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Note 4. Loss Per Share

        Weighted average shares are calculated as follows:

Note 5. Comprehensive Loss

The Company's total comprehensive loss was as follows:

Note 6. Recently Issued Accounting Standards

        Effective February 3, 2002 the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets". Under the provisions of SFAS No. 142, goodwill is no longer amortized. Rather, goodwill is now subject to a periodic impairment test performed, at a minimum, on an annual basis. SFAS No. 142 required the Company to perform a two-step fair-value based goodwill impairment test as of the date of adoption. The first step of the test compared the carrying values of the Company's reporting units to their estimated fair values. The estimated fair values of the reporting units were determined using a discounted cash flow model based upon the estimated future cash flows of the reporting units. The second step of the goodwill impairment test is required only if the carrying amount of a reporting unit exceeds its fair value, as determined in the first step, to measure the amount of impairment, if any. Based upon the impairment test performed by the Company in the first step, the Company has concluded that no impairment of goodwill exists as a result of adoption of SFAS No. 142. Prospectively, the Company will perform this impairment review annually, as required by SFAS No. 142. The Company does not have any other intangible assets subject to the provisions of SFAS No. 142.

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        The following table provides a reconciliation of the reported net loss for the thirteen weeks ended November 3, 2001 and the net loss for the thirty-nine weeks ended November 3, 2001 to net loss that would have been reported had SFAS 142 been applied as of February 4, 2001:

        In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement Obligations", which addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. SFAS No. 143 requires the Company to record the fair value of an asset retirement obligation that results from the acquisition, construction, development and (or) normal use of the assets as a liability in the period in which it is incurred if a reasonable estimate of fair value can be made. The standard also requires the Company to record a corresponding asset which is depreciated over the life of the asset. Subsequent to the initial measurement of the asset retirement obligation, the obligation will be adjusted at the end of each period to reflect the passage of time and changes in the estimated future cash flows underlying the obligation. The Company is required to adopt SFAS No. 143 for the quarter ending May 3, 2003. The Company is currently assessing SFAS No. 143 and the impact that adoption will have on the consolidated financial statements.

        In July 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities". SFAS No. 146 requires the Company to recognize costs associated with exit or disposal activities when they are incurred rather than at the date of a commitment to an exit or disposal plan. SFAS No. 146 is to be applied prospectively to exit or disposal activities initiated after December 31, 2002. The Company is currently evaluating SFAS No. 146 and the impact that its adoption will have on the consolidated financial statements. The Company does not expect the adoption of SFAS No.146 to have a material impact on the Company's results of operations and financial condition.

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Note 7. Legal Proceedings

        On October 16, 2000, the United States District Court for the District of Delaware issued an opinion in favor of the Internal Revenue Service ("IRS") in the case IRS vs. CM Holdings Inc., a wholly-owned subsidiary of the Company. The case was brought against CM Holdings Inc. by the IRS to challenge the deduction of interest expense related to corporate-owned life insurance policies held by Camelot Music Inc., a subsidiary of CM Holdings Inc., for certain tax years that ended on or before February 1994. The court ruled that interest deductions on policy loans should not be allowed and the Company is responsible for the taxes and related interest and penalties. As a result of the District Court decision, the Company accrued $11.0 million during 2000, which is reflected in other (long-term) liabilities in the condensed consolidated balance sheets as of November 2, 2002, February 2, 2002, and November 3, 2001. The Company filed an appeal in response to the decision. On August 16, 2002, the Third Circuit Court of Appeals affirmed the District Court's decision. The Company has the option to appeal to the United States Supreme Court by January 13, 2003. However, discussions are in process with the IRS to resolve this matter without further legal action. This recent decision does not impact the initial reserve which remains accrued as of November 2, 2002.

        In its second quarter ended August 3, 2002, the Company took a charge of $0.8 million for the settlement of claims made by the Attorneys General of 30 states for alleged anti-trust and price-fixing violations. The claims were settled without the admission of wrongdoing by the Company.

        The Company was named in a lawsuit filed in the US District Court in the State of Florida that was filed against a vendor the Company uses to produce its Listening and Viewing Stations ("LVS") which are used in the Company's stores. The suit alleges the LVS infringes upon the plaintiff's patents. The Company has reviewed the plaintiff's patent and is confident that there is no infringement.

        The Company is subject to other legal proceedings and claims that have arisen in the ordinary course of its business and have not been finally adjudicated. Although there can be no assurance as to the ultimate disposition of these matters, it is management's opinion, based upon the information available at this time, that the expected outcome of these matters, individually or in the aggregate, will not have a material adverse effect on the results of operations and financial condition of the Company.

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TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION
Item 2—Management's Discussion and Analysis of Financial Condition and
Results of Operations

        The following is an analysis of the Company's results of operations, liquidity and capital resources. To the extent that such analysis contains statements which are not of a historical nature, such statements are forward-looking statements, which involve risks and uncertainties. These risks include, but are not limited to, changes in the competitive environment for the Company's products, including the entry or exit of non-traditional retailers of the Company's products to or from its markets; the release by the music industry of an increased or decreased number of "hit releases"; general economic factors in markets where the Company's products are sold; and other factors discussed in the Company's filings with the Securities and Exchange Commission.

Critical Accounting Policies and Estimates

        The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires that management apply accounting policies and make estimates and assumptions that affect results of operations and the reported amounts of assets and liabilities in the financial statements. Management continually evaluates its estimates and judgments including those related to revenue recognition, merchandise inventory and return costs, useful lives of fixed assets, the value of long-lived assets and goodwill, store opening and closing costs, and provision for income taxes. Management bases its estimates and judgments on historical experience and other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. We believe that of our significant accounting policies, the following may involve a higher degree of judgment or complexity:

        Revenue Recognition:    The Company's revenue is primarily from retail sales of merchandise comprised of prerecorded music (including compact discs and audio cassettes), video (including DVD and prerecorded videocassettes), video games and other complementary products (including electronics, accessories, blank tapes and CD-Rs). Revenue is recognized at the point of sale to the consumer, at which time payment is tendered. There are no provisions for uncollectible amounts since payment is received at the time of sale. Reductions of revenue for returns by customers are generally provided at the point of return due to infrequency and occurrence within short intervals of the sale and immateriality to the financial statements.

        Merchandise Inventory and Return Costs:    Inventory is stated at the lower of cost or market as determined by the average cost method. The Company is entitled to return merchandise purchased from major vendors for credit against other purchases from these vendors. These vendors often reduce the credit with a merchandise return charge ranging from 0% to 20% of the original merchandise purchase price depending on the type of merchandise being returned. The Company records actual and estimated merchandise return charges in cost of sales.

        Fixed Assets and Depreciation:    Fixed assets are stated at cost. Major improvements and betterments to existing facilities and equipment are capitalized. Expenditures for maintenance and repairs that do not extend the life of the applicable asset are charged to expense as incurred. Buildings are depreciated over a 30-year term. Fixtures and equipment are depreciated using the straight-line method over their estimated useful lives, which range from three to seven years. Leasehold improvements are amortized using the straight-line method over the shorter of their estimated useful lives or the related lease term. A majority of the Company's operating leases are ten years in term. Amortization of capital lease assets is included in depreciation and amortization expense.

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        The Company records software developed for internal use in accordance with Statement of Position (SOP) 98-1, "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use". Accordingly, software developed internally for the use by the Company is capitalized only during the application development stage and only certain costs are capitalized.

        Impairment of Long-Lived Assets:    Fixed assets and other long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted future net cash flows expected to be generated by the asset over its remaining useful life. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Fair value is generally measured based on discounted estimated future cash flows.

        Goodwill:    Goodwill represents the adjusted amount of the cost of acquisitions in excess of fair value of net assets acquired in purchase transactions, and is subject to a periodic impairment test, performed, at a minimum, on an annual basis (see note 6 of the notes to the condensed consolidated financial statements). The Company performs an analysis of the recoverability of goodwill using a discounted cash flow approach consistent with recently issued accounting standards.

        Store Opening and Closing Costs:    Costs associated with opening a store are expensed as incurred. When it is determined that a store will be closed, estimated unrecoverable costs are charged to expense. Such costs include the net book value of abandoned fixtures, equipment, leasehold improvements and a provision for lease obligations, less estimated sub-rental income. The residual value of any fixed asset moved to a store as part of a relocation is transferred to the relocated store.

        Income Taxes:    Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and tax loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are subject to valuation allowances based upon management's estimates of realizability.

RESULTS OF OPERATIONS

Thirteen Weeks Ended November 2, 2002
Compared to the Thirteen Weeks Ended November 3, 2001

        Sales.    The Company's total sales decreased 8.1% to $251.2 million for the thirteen weeks ended November 2, 2002 compared to $273.4 million for the thirteen weeks ended November 3, 2001. The decrease was due to a combination of reduction in the number of stores in operation and a comparable store sales decrease of 5.4%.

        For the quarter, comparable store sales decreased 5.8% for mall stores and decreased 4.0% for freestanding stores. By merchandise category, comparable store sales decreased 20.1% in music; increased 35.3% in home video and video games; and increased 4.7% in the electronics, accessories and boutique categories.

        Gross Profit.    Gross profit, as a percentage of sales, increased to 32.9% in the thirteen weeks ended November 2, 2002 from 32.5% in the thirteen weeks ended November 3, 2001. The increase is due to margin improvements in the music category offset by a shift in the product mix towards lower margin categories including DVD and video games.

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        Selling, General and Administrative Expenses.    Selling, general and administrative ("SG&A") expenses were lower by $1.5 million or 1.3%, versus the prior year, due to lower store count and lower overhead costs, partially offset by a $5.5 million pre-tax write-down of an investment in Data Play, an unconsolidated affiliate. Data Play is a digital content recording and distribution media company that filed for bankruptcy under Chapter 11 during the quarter. SG&A expenses as a percentage of sales, increased to 43.1% for the thirteen weeks ended November 2, 2002 from 40.1% for the thirteen weeks ended November 3, 2001.

        Interest Expense.    Interest expense was $0.5 million for the thirteen weeks ended November 2, 2002 compared to $0.4 million for the thirteen weeks ended November 3, 2001.

        Income Tax Benefit.    The Company's income tax benefit was $11.9 million for the thirteen weeks ended November 2, 2002, compared to an income tax benefit of $9.5 million for the thirteen weeks ended November 3, 2001. The increase was due to an increase in the effective tax rate to 45.9% from 44.9% for the comparable period. The increased rate is due to an increase in the valuation allowance for deferred taxes related to loss on investments and state net operating losses and an increase in the Company's loss before income taxes.

        Net Loss.    The Company's net loss was $14.1 million for the thirteen weeks ended November 2, 2002, compared to a net loss of $11.6 million for the same period last year. The higher net loss is attributable to lower sales and to the write-down of an investment.

Thirty-nine Weeks Ended November 2, 2002
Compared to the Thirty-nine Weeks Ended November 3, 2001

        Sales.    The Company's total sales decreased 9.0% to $798.2 million for the thirty-nine weeks ended November 2, 2002 compared to $877.0 million for the thirty-nine weeks ended November 3, 2001. Comparable store sales decreased 6.0% for the period.

        For the thirty-nine weeks ended November 2, 2002, comparable store sales decreased by 6.2% in mall stores and 5.3% in free standing stores. By merchandise category, comparable store sales decreased 18.6% in music; increased 34.4% in home video and video games; and decreased 0.8% in the electronics, accessories and boutique categories.

        Gross Profit.    Gross profit, as a percentage of sales, was 33.1% for the thirty-nine week periods ended November 2, 2002 and November 3, 2001.

        Selling, General and Administrative Expenses.    Selling, general and administrative ("SG&A") expenses for the thirty-nine weeks ended November 2, 2002 were lower by $9.7 million or 3.0%, versus the prior year, due to lower store count, partially offset by a $5.5 million write-down of an investment in Data Play, an unconsolidated affiliate. SG&A expenses as a percentage of sales, increased to 39.0% for the thirty-nine weeks ended November 2, 2002 from 36.6% for the thirty-nine weeks ended November 3, 2001 due to loss of leverage resulting from lower sales.

        Interest Expense.    Interest expense was $0.8 million for the thirty-nine weeks ended November 2, 2002, as compared to $0.5 million for the thirty-nine weeks ended November 3, 2001.

        Income Tax Benefit.    The Company's income tax benefit was $21.0 million for the thirty-nine weeks ended November 2, 2002, compared to an income tax benefit of $13.2 million for the thirty-nine weeks ended November 3, 2001. The increase was due to an increase in the effective tax rate to 43.9% from 42.7% in the comparable period. The increased rate is due to an increase in the valuation allowance for deferred taxes related to loss on investments and state net operating losses and an increase in the Company's loss before income taxes.

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        Net Loss.    The Company's net loss was $26.8 million for the thirty-nine weeks ended November 2, 2002, compared to a net loss of $17.7 million for the same period last year. The higher net loss is attributable to lower sales and the effect of the write-down of an investment.

LIQUIDITY AND CAPITAL RESOURCES

        Liquidity.    The Company's primary sources of working capital are cash flows from operations and borrowings under its revolving credit facility. The Company had cash balances of $20.6 million on November 2, 2002, compared to $254.9 million at the end of fiscal 2001.

        Cash used by operating activities was $216.7 million for the thirty-nine weeks ended November 2, 2002. The primary uses of cash were a $114.9 million seasonal reduction of accounts payable, and a $78.1 million increase in merchandise inventory. The Company's inventory and accounts payable are heavily influenced by the seasonality of its business, as further explained in Note 2 to the condensed consolidated financial statements. The reduction of accounts payable occurs annually in the first quarter, reflecting payments for inventory sold during the prior year's holiday season. Similarly, the increase in inventory occurs each year throughout the fall season and peaks during the holiday selling season. These cash uses are offset by a significant cash source in the fourth quarter from the increase in accounts payable and sales of inventory during the holiday season.

        Cash provided by financing activities was $15.6 million for the thirty-nine weeks ended November 2, 2002. The primary source of cash was $26.3 million in borrowings under the Company's revolving credit facility. The primary use of cash was $7.1 million for the purchase of 1.1 million shares of common stock under a program authorized by the Board of Directors, and $3.9 million for payments under capital leases.

        The Company has a three-year $100 million secured revolving credit facility with Congress Financial Corporation that expires in July 2003 and renews on a year-to-year basis thereafter with the consent of both parties. The revolving credit facility contains certain restrictive provisions, including provisions governing cash dividends and acquisitions, is collateralized by merchandise inventory and contains a minimum net worth covenant. On November 2, 2002, the Company's outstanding balance under the revolving credit facility was $26.3 million, and $73.7 million was available for borrowing. The Company is compliant with all covenants or other requirements set forth in its credit agreements.

        Capital Resources.    During the first thirty-nine weeks ended November 2, 2002, the Company made capital expenditures of $32.4 million. The Company plans to spend between $40 million and $45 million, net of construction allowances, for capital expenditures in fiscal 2002. During the first thirty-nine weeks ended November 2, 2002, the Company opened or relocated 29 stores and closed 29 stores.

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TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES
PART I—FINANCIAL INFORMATION

Item 4—Controls and Procedures

        (a)    Evaluation of disclosure controls and procedures.    Our Chief Executive Officer and our Chief Financial Officer have concluded, based on their evaluation within 90 days before the filing date of this quarterly report, that the Company's "disclosure controls and procedures" (as defined in the Securities Exchange Act of 1934 Rules 13a-14(c) and 15-d-14(c)) are effective for gathering, analyzing and disclosing the information we are required to disclose in our reports filed under the Securities Exchange Act of 1934 to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms..

        (b)    Changes in internal controls.    There have been no significant changes in our internal controls or in other factors that could significantly affect our disclosure controls and procedures subsequent to the date of the previously mentioned evaluation.

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TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES
PART II—OTHER INFORMATION

Item 6—Exhibits and Reports on Form 8-K

(A) Exhibits—

(B) Reports on Form 8-K—

        A Form 8-K was filed on October 30, 2002 incorporating by reference Trans World Entertainment's October 28, 2002 press release announcing that the Company would take a charge in the third quarter on account of investments in an unconsolidated affiliate and setting forth the comments for the third quarter and the outlook for the year-end.

        Omitted from this Part II are items which are not applicable or to which the answer is negative to the periods covered.

SIGNATURES

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

TRANS WORLD ENTERTAINMENT CORPORATION

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CHIEF EXECUTIVE OFFICER CERTIFICATION

I, Robert J. Higgins, Chairman and Chief Executive Officer of Trans World Entertainment Corporation (the "Company"), certify that:

(1)

I have reviewed this quarterly report on Form 10-Q of the Company;



(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 Company as of, and for, the period presented in this quarterly report;



(4)

The Company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the Company and we have:

(a)

designed such disclosure controls and procedures to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report was being prepared;



(b)

evaluated the effectiveness of the Company'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 Company's other certifying officer and I have disclosed, based on our most recent evaluation, to the Company's auditors and the audit committee of the Company's board of directors:

(a)

all significant deficiencies in the design or operation of internal controls which could adversely affect the Company's ability to record, process, summarize and report financial data and have identified for the Company'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 Company's internal controls; and

(6)

The Company's other certifying officer 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.

Dated: December 17, 2002

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CHIEF FINANCIAL OFFICER CERTIFICATION

I, John J. Sullivan, Executive Vice President and Chief Financial Officer of Trans World Entertainment Corporation (the "Company"), certify that:

(1)

I have reviewed this quarterly report on Form 10-Q of the Company;



(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 Company as of, and for, the period presented in this quarterly report;.



(4)

The Company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the Company and we have:

(a)

designed such disclosure controls and procedures to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report was being prepared;



(b)

evaluated the effectiveness of the Company'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 Company's other certifying officer and I have disclosed, based on our most recent evaluation, to the Company's auditors and the audit committee of the Company's board of directors:

(a)

all significant deficiencies in the design or operation of internal controls which could adversely affect the Company's ability to record, process, summarize and report financial data and have identified for the Company'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 Company's internal controls; and

(6)

The Company's other certifying officer 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.

Dated: December 17, 2002

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