FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
ý Quarterly Report Pursuant to
Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the quarterly period ended September 27, 2003
or
o Transition Report Pursuant to
Section 13 or 15(d) of
the Securities Exchange Act of 1934
Commission file number 0-4090
ANALYSTS INTERNATIONAL CORPORATION
Minnesota 41-0905408
3601
West 76th Street
Minneapolis, MN 55435
(952) 835-5900
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 and (2) has been subject to such filing requirements for the past 90 days.
Yes ý No o
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
Yes ý No o
As of November 4, 2003, 24,211,807 shares of the Registrant’s Common Stock were outstanding.
ANALYSTS INTERNATIONAL CORPORATION
INDEX
2
Analysts International Corporation
Condensed Consolidated Balance Sheets
|
(In thousands) |
|
September
27, |
|
December
28, |
|
||
|
|
|
(Unaudited) |
|
|
|
||
|
|
|
|
|
|
|
||
|
ASSETS |
|
|
|
|
|
||
|
Current assets: |
|
|
|
|
|
||
|
Cash and cash equivalents |
|
$ |
8,114 |
|
$ |
54 |
|
|
Accounts receivable, less allowance for doubtful accounts |
|
54,517 |
|
59,776 |
|
||
|
Prepaid expenses and other current assets |
|
4,352 |
|
8,848 |
|
||
|
Total current assets |
|
66,983 |
|
68,678 |
|
||
|
|
|
|
|
|
|
||
|
Property and equipment, net |
|
6,559 |
|
7,071 |
|
||
|
Intangible assets other than goodwill |
|
11,442 |
|
12,022 |
|
||
|
Goodwill |
|
16,460 |
|
16,460 |
|
||
|
Other assets |
|
2,203 |
|
2,513 |
|
||
|
|
|
$ |
103,647 |
|
$ |
106,744 |
|
|
|
|
|
|
|
|
||
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
Current liabilities: |
|
|
|
|
|
||
|
Accounts payable |
|
$ |
13,080 |
|
$ |
18,966 |
|
|
Line of credit |
|
— |
|
324 |
|
||
|
Salaries and vacations |
|
11,148 |
|
6,036 |
|
||
|
Deferred revenue |
|
3,355 |
|
4,340 |
|
||
|
Self-insured health care reserves and other amounts |
|
2,748 |
|
2,659 |
|
||
|
Restructuring accruals, current portion |
|
403 |
|
648 |
|
||
|
Total current liabilities |
|
30,734 |
|
32,973 |
|
||
|
|
|
|
|
|
|
||
|
Restructuring accruals, non-current portion |
|
306 |
|
550 |
|
||
|
Deferred compensation accrual |
|
3,484 |
|
3,055 |
|
||
|
Shareholders’ equity |
|
69,123 |
|
70,166 |
|
||
|
|
|
$ |
103,647 |
|
$ |
106,744 |
|
Note: The balance sheet at December 28, 2002 has been taken from the audited financial statements at that date, and condensed.
See notes to condensed consolidated financial statements.
3
Analysts International Corporation
Condensed Consolidated Statements of Operations
(Unaudited)
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
||||||||
|
(In thousands except per share amounts) |
|
September
27, |
|
September
30, |
|
September
27, |
|
September 30, |
|
||||
|
Professional services revenue: |
|
|
|
|
|
|
|
|
|
||||
|
Provided directly |
|
$ |
69,432 |
|
$ |
85,245 |
|
$ |
210,510 |
|
$ |
252,788 |
|
|
Provided through subsuppliers |
|
10,604 |
|
22,169 |
|
38,177 |
|
80,054 |
|
||||
|
Total revenue |
|
80,036 |
|
107,414 |
|
248,687 |
|
332,842 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Expenses: |
|
|
|
|
|
|
|
|
|
||||
|
Salaries, contracted services and direct charges |
|
65,406 |
|
88,715 |
|
203,601 |
|
276,401 |
|
||||
|
Selling, administrative and other operating costs |
|
15,035 |
|
19,380 |
|
45,662 |
|
57,988 |
|
||||
|
Amortization of intangible assets |
|
193 |
|
193 |
|
580 |
|
591 |
|
||||
|
Loss on sale of corporate headquarters building |
|
— |
|
— |
|
— |
|
1,860 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Operating loss |
|
(598 |
) |
(874 |
) |
(1,156 |
) |
(3,998 |
) |
||||
|
Non-operating income |
|
39 |
|
53 |
|
64 |
|
119 |
|
||||
|
Interest expense |
|
— |
|
(86 |
) |
(8 |
) |
(997 |
) |
||||
|
Loss on debt extinguishment |
|
— |
|
— |
|
— |
|
(744 |
) |
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Loss before income taxes and cumulative effect of change in accounting principle |
|
(559 |
) |
(907 |
) |
(1,100 |
) |
(5,620 |
) |
||||
|
Income tax benefit |
|
— |
|
(224 |
) |
(57 |
) |
(1,059 |
) |
||||
|
Net loss before cumulative effect of change in accounting principle |
|
(559 |
) |
(683 |
) |
(1,043 |
) |
(4,561 |
) |
||||
|
Cumulative effect of change in accounting for goodwill |
|
— |
|
— |
|
— |
|
(16,389 |
) |
||||
|
Net loss |
|
$ |
(559 |
) |
$ |
(683 |
) |
$ |
(1,043 |
) |
$ |
(20,950 |
) |
|
|
|
|
|
|
|
|
|
|
|
||||
|
Per common share: |
|
|
|
|
|
|
|
|
|
||||
|
Basic and diluted loss: |
|
|
|
|
|
|
|
|
|
||||
|
Loss before cumulative effect of change in accounting principle |
|
$ |
(.02 |
) |
$ |
(.03 |
) |
$ |
(.04 |
) |
$ |
(.19 |
) |
|
Cumulative effect of change in accounting for goodwill |
|
— |
|
— |
|
— |
|
(.68 |
) |
||||
|
Net loss: |
|
$ |
(.02 |
) |
$ |
(.03 |
) |
$ |
(.04 |
) |
$ |
(.87 |
) |
|
|
|
|
|
|
|
|
|
|
|
||||
|
Average common shares outstanding |
|
24,199 |
|
24,198 |
|
24,199 |
|
24,197 |
|
||||
|
Average common and common equivalent shares outstanding |
|
24,199 |
|
24,198 |
|
24,199 |
|
24,197 |
|
||||
See notes to condensed consolidated financial statements.
4
Analysts International Corporation
Condensed Consolidated Statements of Cash Flows
(Unaudited)
|
|
|
Nine Months Ended |
|
||||
|
(In thousands) |
|
September
27, |
|
September
30, |
|
||
|
|
|
|
|
|
|
||
|
Net cash provided by operating activities |
|
$ |
9,948 |
|
$ |
3,948 |
|
|
|
|
|
|
|
|
||
|
Cash flows from investing activities: |
|
|
|
|
|
||
|
Property and equipment additions |
|
(1,586 |
) |
(1,469 |
) |
||
|
Proceeds from property and equipment sales |
|
22 |
|
16,445 |
|
||
|
Net cash (used in) provided by investing activities |
|
(1,564 |
) |
14,976 |
|
||
|
|
|
|
|
|
|
||
|
Cash flows from financing activities: |
|
|
|
|
|
||
|
Net change in Working Capital Line of Credit |
|
(324 |
) |
5,608 |
|
||
|
Proceeds from borrowings |
|
— |
|
29,525 |
|
||
|
Repayment of borrowings |
|
— |
|
(70,525 |
) |
||
|
Proceeds from exercise of stock options |
|
— |
|
8 |
|
||
|
Net cash used in financing activities |
|
(324 |
) |
(35,384 |
) |
||
|
|
|
|
|
|
|
||
|
Net increase (decrease) in cash and equivalents |
|
8,060 |
|
(16,460 |
) |
||
|
|
|
|
|
|
|
||
|
Cash and cash equivalents at beginning of period |
|
54 |
|
18,204 |
|
||
|
|
|
|
|
|
|
||
|
Cash and cash equivalents at end of period |
|
$ |
8,114 |
|
$ |
1,744 |
|
See notes to condensed consolidated financial statements.
5
Analysts International Corporation
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. Summary of Significant Accounting Policies
Condensed Consolidated Financial Statements - The condensed consolidated balance sheet as of September 27, 2003, the condensed consolidated statements of operations for the three- and nine-month periods ended September 27, 2003 and September 30, 2002, and the condensed consolidated statements of cash flows for the nine-month periods ended September 27, 2003 and September 30, 2002 have been prepared by the Company, without audit. In the opinion of management, all adjustments necessary to present fairly the financial position at September 27, 2003 and the results of operations and the cash flows for the periods ended September 27, 2003 and September 30, 2002 have been made.
Effective December 28, 2002, the Company changed its fiscal year to end on the Saturday closest to December 31. Subsequent to this change, the Company’s fiscal quarters will end on the Saturday closest to the end of the calendar quarter. This change in year and quarter end did not have a material impact on the Company’s operations.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. The Company suggests reading these condensed consolidated financial statements in conjunction with the financial statements and notes thereto included in the Company’s December 28, 2002 annual report to shareholders.
Comprehensive loss (i.e. net loss plus available-for-sale securities valuation adjustments) for the three and nine months ended September 27, 2003 was $559,000 and $1,043,000, respectively, and for the three and nine months ended September 30, 2002 was $685,000 and $20,959,000, respectively.
Effective January 1, 2002, the Company fully adopted the provisions of Statement of Financial Accounting Standards (SFAS) No. 141, “Business Combinations” and SFAS No. 142, “Goodwill and Other Intangible Assets.” SFAS No. 141 requires business combinations initiated after June 30, 2001 to be accounted for using the purchase method of accounting, and broadens the criteria for recording intangible assets other than goodwill.
SFAS No. 142 no longer allows the amortization of purchased goodwill and certain indefinite-lived intangible assets. Instead, companies must test such assets for impairment at least annually. The Company evaluated its intangible assets as of January 1, 2002 and again at January 1, 2003 and determined that the customer list had a determinable life while the tradename did not. Effective January 1, 2002 the Company ceased amortization of the tradename asset.
SFAS No. 142 prescribes a two-phase process for impairment testing of goodwill. The first phase screens for the existence of impairment, while the second phase (if necessary) measures the impairment. The Company completed its first phase impairment analysis for 2003 during the first quarter and found no indication of impairment of its recorded goodwill, although the valuation determined the fair value of the Infrastructure and Solutions reporting units to approximate their carrying value.
Upon the initial adoption of SFAS No. 142 during the first quarter of 2002, there was an indication of impairment of our goodwill found in the first phase testing. Accordingly, we completed the second phase testing in June 2002. Based on the impairment tests, we recognized a transitional impairment of $16,389,000 in the first quarter of 2002 to reduce the carrying value of goodwill for our Infrastructure reporting unit to its implied fair value. We did not record a tax benefit for this adjustment, as our current operating performance requires the establishment of a reserve against the deferred tax asset created by this impairment. The transition impairment was required because economic conditions at the time of testing
6
(including declining operating margins and lower demand for our services) reduced the estimated future expected performance for this operating unit. Under SFAS 142, the impairment adjustment recognized at adoption of the new rules was reflected as a cumulative effect of accounting change in our first quarter 2002 statement of operations. Impairment adjustments recognized after adoption, if any, generally are required to be recognized as operating expenses.
For the nine months ended September 27, 2003, no goodwill or other intangibles were acquired, impaired or disposed. Other intangibles consisted of the following:
|
|
|
September 27, 2003 |
|
December 28, 2002 |
|
||||||||||||||
|
(In thousands) |
|
Gross |
|
Accumulated Amortization |
|
Other |
|
Gross |
|
Accumulated |
|
Other |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Customer list |
|
$ |
12,270 |
|
$ |
(2,415 |
) |
$ |
9,855 |
|
$ |
12,270 |
|
$ |
(1,835 |
) |
$ |
10,435 |
|
|
Tradename |
|
1,720 |
|
(133 |
) |
1,587 |
|
1,720 |
|
(133 |
) |
1,587 |
|
||||||
|
|
|
$ |
13,990 |
|
$ |
(2,548 |
) |
$ |
11,442 |
|
$ |
13,990 |
|
$ |
(1,968 |
) |
$ |
12,022 |
|
The customer list is scheduled to be fully amortized by 2015 with corresponding amortization estimated to be approximately $800,000 per year.
We adopted SFAS 145, “Recission of Financial Accounting Standards Board (FASB) Statements No. 4, 44 and 64, Amendments of FASB Statement No. 13 and Technical Corrections” as of December 28, 2002. Upon the adoption of SFAS 145, we reclassified the loss resulting from the exinguishment of debt as a separate component in income from continuing operations.
Effective December 29, 2002, the Company adopted the disclosure provisions of SFAS No. 148, “Accounting for Stock-Based Compensation – Transition and Disclosure”, which amends SFAS No. 123, “Accounting for Stock-Based Compensation”. We have continued to apply Accounting Principles Board (APB) Opinion No. 25 and related interpretations in accounting for our four stock-based compensation plans. SFAS 148 provides alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, SFAS 148 amends the disclosure requirements of SFAS 123 to require more prominent and more frequent disclosures in financial statements of the effects of stock-based compensation.
Had compensation cost for our stock-based compensation plans been determined based on the fair value at the grant dates as calculated in accordance with SFAS No. 148, our pro forma net loss and loss per share for the three and nine months ended September 27, 2003 and September 30, 2002 would have been the amounts indicated below:
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
||||||||
|
|
|
September
27, |
|
September
30, |
|
September
27, |
|
September
30, |
|
||||
|
Net loss (in thousands): |
|
|
|
|
|
|
|
|
|
||||
|
As reported |
|
$ |
(559 |
) |
$ |
(683 |
) |
$ |
(1,043 |
) |
$ |
(20,950 |
) |
|
Pro forma |
|
(741 |
) |
(998 |
) |
(1,589 |
) |
(21,873 |
) |
||||
|
Net loss per share (basic): |
|
|
|
|
|
|
|
|
|
||||
|
As reported |
|
$ |
(.02 |
) |
$ |
(.03 |
) |
$ |
(.04 |
) |
$ |
(.87 |
) |
|
Pro forma |
|
(.03 |
) |
(.04 |
) |
(.07 |
) |
(.90 |
) |
||||
|
Net loss per share (diluted): |
|
|
|
|
|
|
|
|
|
||||
|
As reported |
|
$ |
(.02 |
) |
$ |
(.03 |
) |
$ |
(.04 |
) |
$ |
(.87 |
) |
|
Pro forma |
|
(.03 |
) |
(.04 |
) |
(.07 |
) |
(.90 |
) |
||||
7
2. Long-term Debt
Effective April 11, 2002, the Company consummated an asset-based revolving credit facility with up to $55,000,000 of availability. The Company reduced the level of availability to $45,000,000 following the sale of its corporate headquarters building on May 15, 2002. Borrowings under this credit agreement are secured by all of the Company’s assets. Under the revolving credit agreement, which matures on April 10, 2005, the Company must take advances or pay down the outstanding balance daily. The Company can, however, choose to request fixed-term advances of one, two, or three months for a portion of the outstanding balance on the line of credit. Daily advances on the line of credit bear interest at the Wall Street Journal’s “Prime Rate” plus ..75% (4.75% on September 27, 2003) while the fixed-term advances bear interest at the LIBOR rate plus 3.0%. The credit agreement requires the payment of a commitment fee of .50% of the unused portion of the line plus an annual administration fee of $50,000. The agreement restricts, among other things, the payment of dividends, establishes limits on capital expenditures and requires the Company to maintain a minimum accounts payable turnover ratio. The Company believes it will be able to continue to meet the requirements of the new agreement for the foreseeable future and as of September 27, 2003 did not have any borrowings under this agreement.
3. Shareholders’ Equity
|
|
|
Nine
Months Ended |
|
|
|
|
|
(In thousands) |
|
|
|
|
|
|
|
|
|
Balance at beginning of period |
|
$ |
70,166 |
|
|
Comprehensive loss |
|
(1,043 |
) |
|
|
Balance at end of period |
|
$ |
69,123 |
|
4. Net Income Per Common Share
Basic and diluted earnings (loss) per share (EPS) are presented in accordance with SFAS No. 128, “Earnings per Share.” Basic EPS excludes dilution and is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. The difference between weighted-average common shares and average common and common equivalent shares used in computing diluted EPS is the result of outstanding stock options. Options to purchase 1,983,000 and 2,181,000 shares of common stock were outstanding at the end of the periods ended September 27, 2003 and September 30, 2002, respectively, but were excluded from the computation of common stock equivalents because they were anti-dilutive.
5. Restructuring
In December 2000, the Company recorded a restructuring charge of $7,000,000. Of this charge, $2,600,000 related to workforce reductions (primarily non-billable staff), and $4,400,000 related to lease termination and abandonment costs (net of sub-lease income), including an amount for assets to be disposed of in conjunction with this consolidation. The restructuring accrual for workforce reductions has been fully used as of December 28, 2002. A summary of activity with respect to the restructuring charge for the nine-month period ended September 27, 2003 is as follows:
|
(In thousands) |
|
Office
Closure/ |
|
|
|
|
|
|
|
|
|
Balance at December 28, 2002 |
|
$ |
1,198 |
|
|
|
|
|
|
|
|
Cash expenditures |
|
489 |
|
|
|
|
|
|
|
|
|
Balance at September 27, 2003 |
|
$ |
709 |
|
The remaining balance in this accrual is to cover the ongoing lease payments for properties abandoned as a part of the restructuring. The last of these lease obligations is expected to terminate in September 2006.
8
Management’s Discussion and Analysis
of Financial Condition and Results of Operations
Nine Months Ended September 27, 2003 and September 30, 2002
The following discussion of the results of our operations and our financial condition should be read in conjunction with our consolidated financial statements and the related notes to consolidated financial statements in this 10-Q, our other filings with the Securities and Exchange Commission and our other investor communications.
Critical Accounting Policies
The discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amount of assets and liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of our financial statements. Actual results may differ from these estimates under different assumptions or conditions.
Critical accounting policies are defined as those that involve significant judgments and uncertainties and potentially result in materially different outcomes under different assumptions and conditions. Application of these policies is particularly important to the portrayal of our financial condition and results of operations. We believe the accounting policies described below meet these characteristics.
Revenue Recognition
We recognize revenue for our staffing business and the majority of our business solutions and infrastructure business as services are performed or products are delivered. Certain of our outsourcing and help desk engagements provide for a specific level of service each month for which we bill a standard monthly fee. We recognize revenue for these engagements in monthly installments over the period of the contract. In some such contracts we invoice in advance for two or more months of service. When we do this, the revenue is deferred and recognized over the term of the invoicing agreement.
In certain client situations, where the nature of the engagement requires, we utilize the services of other companies in our industry. If these services are provided under an arrangement whereby we agree to retain only a fixed portion of the amount billed to the client to cover our management and administrative costs, we classify the amount billed to the client as subsupplier revenue. All revenue derived from services provided by our employees or other independent contractors working directly for us is recorded as direct revenue.
We generally do not enter into fixed price engagements. If, however, we enter into such an engagement, revenue is recognized over the life of the contract based on time and materials input to date and estimated time and materials to complete the project. This method of revenue recognition relies on accurate estimates of the cost, scope, and duration of the engagement. If the Company does not accurately estimate the resources required or the scope of the work to be performed, then future revenues may be negatively affected or losses on existing contracts may need to be recognized. All future anticipated losses are recognized in the period they are identified.
In all of our services, risk associated with client satisfaction exists. Although management feels these risks are adequately addressed by our adherence to proven project management methodologies and other procedures, the potential exists for future revenue charges relating to unresolved issues.
9
Bad Debt
Each accounting period we determine an amount to be set aside to cover potentially uncollectible accounts. Our determination is based upon an evaluation of accounts receivable for risk associated with a client’s ability to make contractually required payments. These determinations require considerable judgment in assessing the ultimate potential for collection of these receivables and include reviewing the financial stability of the client, the clients’ willingness to pay, and current market conditions. If our evaluation of a client’s ability to pay is incorrect, we may incur future charges.
Goodwill and Intangible Impairment
We evaluate goodwill and other intangible assets on a periodic basis. This evaluation relies on assumptions regarding estimated future cash flows and other factors to determine the fair value of the respective assets. If these estimates or related assumptions change, we may be required to recognize impairment charges.
In June 2001, the FASB issued SFAS No. 142 “Goodwill and Other Intangible Assets.” In accordance with the provisions of SFAS No. 142, effective January 1, 2002 we ceased amortization of certain intangible assets including goodwill. Intangible assets with definite useful lives will continue to be amortized over their useful lives and reviewed for impairment in accordance with SFAS No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets.” Also in conjunction with the adoption of the provisions of SFAS No. 142, we recorded a goodwill impairment charge during the first quarter of 2002 of $16.389 million. This impairment was recorded as a cumulative effect of a change in accounting principle as of January 1, 2002, and therefore did not impact operating income. The Company completed its impairment analysis for 2003 during the first quarter and found no indication of impairment of its recorded goodwill although the valuation determined the fair value of the Infrastructure and Solutions reporting units to approximate their carrying value. Additional write-downs of intangible assets may be required if future valuations do not support current carrying value.
Deferred Taxes
We account for income taxes in accordance with SFAS No. 109, “Accounting for Income Taxes,” which requires that deferred tax assets and liabilities be recognized for the effect of temporary differences between reported income and income considered taxable by the taxing authorities. SFAS No. 109 also requires the resulting deferred tax assets to be reduced by a valuation allowance if some portion or all of the deferred tax asset is not expected to be realized. Based upon prior taxable income and estimates of future taxable income, we expect our deferred tax assets, net of the established valuation allowance, will be fully realized in the future. If actual future taxable income is less than we anticipate from our estimates, we may be required to record a valuation allowance against our deferred tax assets resulting in additional income tax expense which will be recorded in our consolidated statement of operations.
Benefit Accruals
Each accounting period we estimate an amount to accrue for medical costs incurred but not yet reported (IBNR) under our self-funded employee medical insurance plans. We base our determination on an evaluation of past rates of claim payouts and trends in the amount of payouts. This determination requires significant judgment and assumes past patterns are indicative of future payment patterns. A significant shift in usage and payment patterns within our medical plans could necessitate significant adjustments to these accruals in future accounting periods.
Restructuring
We recorded a restructuring charge and reserves associated with restructuring plans approved by management in December 2000. The remaining reserve consists of an estimate pertaining to real estate lease obligations. Factors such as the ability to obtain subleases, the creditworthiness of sublessees, and the ability to negotiate early termination agreements with lessors could materially affect this real estate reserve. While we believe our current
10
estimates regarding lease obligations are adequate, our inability to sublet the remaining space or obtain payments from sublessees could necessitate significant adjustments to these estimates in the future.
RESULTS OF OPERATIONS, THREE- AND NINE-MONTH PERIODS ENDED SEPTEMBER 27, 2003 VS. SEPTEMBER 30, 2002
The following tables illustrate the relationship between revenue and expense categories along with a count of employees and technical consultants for the three- and nine-month periods ended September 27, 2003 and September 30, 2002. The tables provide guidance in our explanation of our operations and results.
|
|
|
Three Months Ended September 27, 2003 |
|
Three Months Ended September 30, 2002 |
|
Increase (Decrease) |
|
|||||||||||
|
(dollars in thousands) |
|
Amount |
|
% of |
|
Amount |
|
% of |
|
Amount |
|
% |
|
As % |
|
|||
|
Professional services revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Provided directly |
|
$ |
69,432 |
|
86.8 |
% |
$ |
85,245 |
|
79.4 |
% |
$ |
(15,813 |
) |
(18.6 |
)% |
7.4 |
% |
|
Provided through subsuppliers |
|
10,604 |
|
13.2 |
|
22,169 |
|
20.6 |
|
(11,565 |
) |
(52.2 |
) |
(7.4 |
) |
|||
|
Total revenue |
|
80,036 |
|
100.0 |
|
107,414 |
|
100.0 |
|
(27,378 |
) |
(25.5 |
) |
.0 |
|
|||
|
Salaries, contracted services and direct charges |
|
65,406 |
|
81.7 |
|
88,715 |
|
82.5 |
|
(23,309 |
) |
(26.3 |
) |
(.8 |
) |
|||
|
Selling, administrative and other operating costs |
|
15,035 |
|
18.8 |
|
19,380 |
|
18.0 |
|
(4,345 |
) |
(22.4 |
) |
.8 |
|
|||
|
Amortization of intangible assets |
|
193 |
|
.2 |
|
193 |
|
.2 |
|
— |
|
.0 |
|
.0 |
|
|||
|
Non-operating income |
|
(39 |
) |
(.0 |
) |
(53 |
) |
(.0 |
) |
14 |
|
(26.4 |
) |
.0 |
|
|||
|
Interest Expense |
|
— |
|
.0 |
|
86 |
|
.1 |
|
(86 |
) |
(100.0 |
) |
(.1 |
) |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Loss before income taxes |
|
(559 |
) |
(.7 |
) |
(907 |
) |
(.8 |
) |
348 |
|
38.4 |
|
.1 |
|
|||
|
Income tax benefit |
|
— |
|
.0 |
|
(224 |
) |
(.2 |
) |
224 |
|
100.0 |
|
.2 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Net loss |
|
$ |
(559 |
) |
(.7 |
)% |
$ |
(683 |
) |
(.6 |
)% |
$ |
124 |
|
18.2 |
% |
(.1 |
)% |
|
|
|
Nine
Months Ended |
|
Nine
Months Ended |
|
Increase (Decrease) |
|
|||||||||||
|
(dollars in thousands) |
|
Amount |
|
% of |
|
Amount |
|
% of |
|
Amount |
|
% |
|
As % |
|
|||
|
Professional services revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Provided directly |
|
$ |
210,510 |
|
84.6 |
% |
$ |
252,788 |
|
75.9 |
% |
$ |
(42,278 |
) |
(16.7 |
)% |
8.7 |
% |
|
Provided through subsuppliers |
|
38,177 |
|
15.4 |
|
80,054 |
|
24.1 |
|
(41,877 |
) |
(52.3 |
) |
(8.7 |
) |
|||
|
Total revenue |
|
248,687 |
|
100.0 |
|
332,842 |
|
100.0 |
|
(84,155 |
) |
(25.3 |
) |
.0 |
|
|||
|
Salaries, contracted services and direct charges |
|
203,601 |
|
81.9 |
|
276,401 |
|
83.0 |
|
(72,800 |
) |
(26.3 |
) |
(1.1 |
) |
|||
|
Selling, administrative and other operating costs |
|
45,662 |
|
18.3 |
|
57,988 |
|
17.4 |
|
(12,326 |
) |
(21.3 |
) |
.9 |
|
|||
|
Amortization of intangible assets |
|
580 |
|
.2 |
|
591 |
|
.2 |
|
(11 |
) |
(1.9 |
) |
.0 |
|
|||
|
Loss on sale of corporate headquarters building |
|
— |
|
— |
|
1,860 |
|
.6 |
|
(1,860 |
) |
(100.0 |
) |
(.6 |
) |
|||
|
Non-operating income |
|
(64 |
) |
(.0 |
) |
(119 |
) |
(.0 |
) |
55 |
|
(46.2 |
) |
.0 |
|
|||
|
Interest Expense |
|
8 |
|
.0 |
|
997 |
|
.3 |
|
(989 |
) |
(99.2 |
) |
(.3 |
) |
|||
|
Loss on debt extinguishment |
|
— |
|
— |
|
744 |
|
.2 |
|
(744 |
) |
(100.0 |
) |
(.2 |
) |
|||
|
Cumulative effect of change in accounting for goodwill |
|
— |
|
— |
|
16,389 |
|
4.9 |
|
(16,389 |
) |
(100.0 |
) |
(4.9 |
) |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Loss before income taxes |
|
(1,100 |
) |
(.4 |
) |
(22,009 |
) |
(6.6 |
) |
20,909 |
|
95.0 |
|
6.2 |
|
|||
|
Income tax benefit |
|
(57 |
) |
(.0 |
) |
(1,059 |
) |
(.3 |
) |
1,002 |
|
94.6 |
|
.3 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Net loss |
|
$ |
(1,043 |
) |
(.4 |
)% |
$ |
(20,950 |
) |
(6.3 |
)% |
$ |
19,907 |
|
95.0 |
% |
5.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Personnel: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Management and Administrative |
|
460 |
|
|
|
525 |
|
|
|
(65 |
) |
(12.4 |
)% |
|
|
|||
|
Technical Consultants |
|
2,590 |
|
|
|
2,785 |
* |
|
|
(195 |
) |
(7.0 |
)% |
|
|
|||
*Technical Consultant total restated for nine months ended September 30, 2002 due to a change in the way the Comapny counts consultants who are between projects or have left the company but not yet been terminated in the accounting systems.
Revenue provided directly for the three- and nine-month periods ended September 27, 2003 decreased 18.6% and 16.7%, respectively, from the comparable quarter a year ago. We derived a substantially greater percentage of our total revenue from direct billings during these periods in 2003 as compared to the same periods last year. This increase in the percentage of direct revenue was due principally to the decrease in revenue from certain Managed Services clients, most of which had been provided through subsuppliers. Our subsupplier revenue is mainly pass-through revenue with associated fees providing minimal profit.
11
The decrease in revenue resulted primarily from the decrease in the number of consultants we had billable during these periods, which is reflective of an overall reduction in spending for the IT services we provide and significant pricing pressures imposed by our clients. Our technical consultant staff has decreased by 195 consultants from September 30, 2002. We continue to experience decreasing average bill rates due to pricing pressures imposed by our clients. These pressures have resulted in a 10% reduction in average bill rates within our staffing business thus far this year. As demand for the services our industry provides has declined, many clients have taken the opportunity to demand pricing concessions, and we have had to concede lower prices to retain our relationships with these clients.
Salaries, contracted services and direct charges primarily represent our payroll and benefit costs associated with billable consultants. Comparing the 2003 periods to the 2002 periods, these expenses decreased slightly as a percentage of revenue. We have been successful at managing our direct labor rates downward in response to decreasing bill rates. We have been able to do this by passing billing rate decreases through to our consultants in the form of labor rate decreases where possible and increasing productivity levels of our billable technical staff. The shifting of our revenue mix to include more direct revenue, with better margins, and less low margin subsupplier revenue also played a role in decreasing this category of expense as a percentage of revenue. Although we continuously attempt to control the factors which affect this category of expense, there can be no assurance we will be able to maintain or improve this level.
Selling, administrative and other operating (SG&A) costs include commissions paid to sales representatives and recruiters, location costs, and other administrative costs. This category of costs represented 18.8% of total revenue for the three-month period and 18.3% for the nine-month period ended September 27, 2003, up from 18.0% and 17.4% for the three-and nine-month periods in 2002, respectively. While the significant decline in our total revenue, especially subsupplier revenue, has caused these costs to increase as a percentage of total revenue, the actual amounts of these costs have decreased considerably during these periods. These decreases are the result of our ongoing efforts to manage costs downward as demand for our services and our average billing rates decline. We have managed these costs downward primarily by reducing discretionary spending for non-billable travel, imposing wage controls on administrative and management personnel, eliminating office space where possible, and by reducing the number of non-technical personnel we employ. We are committed to continuing to manage this category of expense to the right level for our company; however, there can be no assurance this category of cost will not increase as a percentage of income if our revenue continues to decline.
Amortization of intangible assets remained the same in the three-month period and decreased slightly in the nine-month period ended September 27, 2003 compared to the same periods last year.
In the second quarter of 2002 we sold our corporate headquarters building, incurring a loss of $1.9 million. Net proceeds of $16.4 million were used to reduce the balance on our line of credit. The Company remains a major tenant in the building following the sale.
Non-operating income, consisting primarily of interest income, declined slightly during the three months ended September 27, 2003 compared to the same quarter a year ago. While invested cash balances were higher during the 2003 period, rates of return were lower than in the prior year. Non-operating income declined during the nine months ended September 27, 2003 compared to the same period a year ago. The higher level of interest income in the 2002 period resulted from significant cash investments during the early part of the nine months ended September 30, 2002. The cash invested during this time was then used to reduce outstanding debt.
Interest expense during the three- and nine-month periods ended September 27, 2003 decreased significantly from the same periods last year. The reduction in interest expense is the result of lower levels of borrowing and reduced interest rates subsequent to the April 11, 2002 debt restructuring. During the third quarter of 2003 we maintained a zero balance on our line of credit. Debt levels have declined to zero primarily as a result of using cash invested during the first quarter of 2002 and proceeds from the sale of our corporate headquarters building in May 2002 to reduce debt. We are also experiencing a decreased need to borrow to support accounts receivable. As our revenue, and accordingly, our receivable balance declined throughout 2002 and the first half of 2003, the cash collected from accounts receivable was used to reduce debt. If the trend of declining accounts receivable balances
12
is reversed as a result of increasing headcount and revenue, we may need to utilize borrowings under our line of credit in future periods.
We completed the restructuring of our credit facility with GE Capital in the second quarter of 2002. Upon the refinancing of our debt, we recorded a loss on extinguishment of debt of $744,000 primarily related to make-whole payments associated with our 1998 Note Purchase Agreement and the write-off of costs associated with previous financings.
We adopted the full provisions of SFAS No. 142 in the first quarter of 2002 and recorded an impairment charge of approximately $16.4 million. SFAS No. 142 no longer allows the amortization of purchased goodwill and certain indefinite-lived intangible assets instead companies must test such assets for impairment at least annually. Based on the impairment tests, during the nine months ended September 30, 2002, we reduced the carrying value of goodwill for our Infrastructure reporting unit to its implied fair value. The impairment was required because economic conditions at the time of testing reduced the estimated future expected performance for this reporting unit. Following the initial adoption of SFAS No. 142, at least annually, we are required to test our remaining goodwill for impairment. We performed these tests as of January 1, 2003 and found no indication of impairment although the carrying value of the Infrastructure and the Solutions reporting units approximated their fair values. Any significant deterioration in the outlook for these reporting units could result in future impairment of the associated goodwill.
We recorded no income tax benefit during the three months ended September 27, 2003 as non-deductible items (primarily travel meals and entertainment) negated the tax benefit of our operating loss. During the nine months ended September 27, 2003 we recorded an income tax benefit of $57,000. This is reflective of an overall tax benefit rate of 5.2% compared to a statutory tax benefit rate of 35%. This reduced rate results primarily from non-deductible meals and entertainment expenses.
As a result of the factors discussed above, we reported a net loss in the three- and nine-month periods ended September 27, 2003 of $559,000 and $1,043,000, respectively, compared with a net loss of $683,000 and $21.0 million, respectively, for the comparable periods of 2002.
The decrease in technical consultants is reflective of the overall slowness in the economy which has resulted in an overall reduction in spending for the IT services we provide. Administrative and management personnel decreased as a result of our continuing efforts to contain our operating costs.
Liquidity and Capital Resources
The following table provides information relative to the liquidity of our business.
|
(dollars in thousands) |
|
September
27, |
|
December
28, |
|
Increase |
|
Percentage |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|||
|
Cash and Cash Equivalents |
|
$ |
8,114 |
|
$ |
54 |
|
$ |
8,060 |
|
14,925.9 |
% |
|
Accounts Receivable |
|
54,517 |
|
59,776 |
|
(5,259 |
) |
(8.8 |
) |
|||
|
Other Current Assets |
|
4,352 |
|
8,848 |
|
(4,496 |
) |
(50.8 |
) |
|||
|
Total Current Assets |
|
$ |
66,983 |
|
$ |
68,678 |
|
$ |
(1,695 |
) |
(2.5 |
) |
|
|
|
|
|
|
|
|
|
|
|
|||
|
Accounts Payable |
|
$ |
13,080 |
|
$ |
18,966 |
|
$ |
(5,886 |
) |
(31.0 |
) |
|
Current Debt |
|
— |
|
324 |
|
(324 |
) |
(100.0 |
) |
|||
|
Other Current Liabilities |
|
17,654 |
|
13,683 |
|
3,971 |
|
29.0 |
|
|||
|
Total Current Liabilities |
|
$ |
30,734 |
|
$ |
32,973 |
|
$ |
(2,239 |
) |
(6.8 |
) |
|
|
|
|
|
|
|
|
|
|
|
|||
|
Working Capital |
|
$ |
36,249 |
|
$ |
35,705 |
|
$ |
544 |
|
1.5 |
|
|
Current Ratio |
|
2.18 |
|
2.08 |
|
.10 |
|
4.8 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|||
|
Total Shareholders’ Equity |
|
$ |
69,123 |
|
$ |
70,166 |
|
$ |
(1,043 |
) |
(1.5 |
)% |
13
Working capital at September 27, 2003 was up slightly from December 28, 2002. During the third quarter of 2003, we have been able to keep our line of credit at zero and maintain cash and cash equivalents in the $5.0 million range. Accounts receivable decreased from December 28, 2002 to September 27, 2003. We continue to devote additional resources to pursue the timely collection of our receivables. The reduction in our accounts receivable balance was offset by the decline in accounts payable, which is reflective of the lower usage of subsuppliers. The ratio of current assets to current liabilities increased at September 27, 2003, compared to December 28, 2002.
Historically, we have been able to support internal growth in our business with internally generated funds. Our primary need for working capital is to support accounts receivable resulting from our business and to fund the time lag between payroll disbursement and receipt of fees billed to clients. Most recently, as revenues and payroll have declined, our need for working capital to support accounts receivable has also declined, resulting in a reduction in our need to borrow. When our revenue and payroll begin to grow again, we would expect our need for working capital to once again increase.
During 2002, reduction of debt and associated borrowing costs was one of our top priorities. In pursuit of this priority, effective April 11, 2002, we consummated an asset-based revolving credit agreement with up to $55.0 million of availability. This borrowing facility reduced our cost of borrowing from 9% to prime plus .75%, or 4.75% currently. To reduce our cost of financing even further, we reduced the level of availability under this credit agreement to $45.0 million following the sale of our corporate headquarters building on May 15, 2002. We have been successful at reducing our borrowings on our line of credit to zero earlier this year and they have remained at zero throughout the quarter ended September 27, 2003. At September 27, 2003 our borrowing capability was at $22.0 million under our credit facility. Borrowings under the credit agreement are secured by all of our assets.
The revolving credit agreement requires us to take advances or pay down the outstanding balance on the line of credit daily. However, we can request fixed-term advances of one, two, or three months for a portion of the outstanding balance on the line of credit. The daily advances on the line of credit bear interest at the Wall Street Journal’s “Prime Rate” plus .75% while the fixed-term advances bear interest at the LIBOR rate plus 3.0%. The credit agreement requires the payment of a commitment fee of .50% of the unused portion of the line plus an annual administration fee of $50,000. The agreement restricts, among other things, the payment of dividends, establishes limits on capital expenditures and requires us to maintain a minimum accounts payable turnover ratio. We believe we will be able to continue to meet the requirements of the agreement. The credit agreement matures on April 10, 2005.
During the three-month period ended September 27, 2003, we made capital expenditures totaling $850,000 compared to $472,000 in the three-month period ended September 30, 2002. These capital expenditures were made primarily to increase the capacity of our internet hosting facilities, and were funded with internally generated funds. We continue to tightly control capital expenditures to preserve working capital.
Commitments and Contingencies
Office facilities are leased under non-cancelable operating leases. Minimum future obligations on these operating leases at September 27, 2003, are as follows (in thousands):
|
|
|
1 Year |
|
2-3 Years |
|
4-5 Years |
|
Over 5 |
|
Total |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Operating Leases |
|
$ |
5,955 |
|
$ |
10,946 |
|
$ |
5,513 |
|
$ |
221 |
|
$ |
22,635 |
|
14
Market Conditions, Business Outlook and Risks to Our Business
Forward Looking Statements
The statements contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” including without limitation, our statements relating to prospects for our business, recovery of the IT services industry, our working capital needs and sufficiency of our working capital, the continued need of current and prospective customers for our services and our ability to win that business, the effects of competition and our ability to respond to competitive conditions, the availability and utilization of qualified professional staff, our ability to increase billing rates as labor and benefit costs increase, our ability to maintain gross margin levels and control operating cost increases, and our ability to achieve and maintain profitability are forward looking statements made under the safe harbor provision of the Private Securities Litigation Reform Act. Words such as “believes,” “intends,” “possible,” “expects,” “estimates,” “anticipates,” or “plans” and similar expressions are intended to identify forward looking statements. Such statements are based on management’s current expectations as of the date of this document but involve risks, uncertainties and other factors which could cause actual results to differ materially from those contemplated by such forward looking statements. Investors are cautioned to consider these forward looking statements in light of important factors which may result in variations from results contemplated by such forward looking statements including, but not limited to, the risk factors discussed below.
Several market conditions are affecting our industry. Increased price competition in the area of technical staff augmentation has created pressure on billable hourly rates, and clients have been requesting increasingly lower cost models for staff augmentation services. As a result, we have encountered lower billing rates for quite some time. Management expects that clients will continue, for the foreseeable future, to request lower cost offerings for staff augmentation services through e-procurement systems, extremely competitive bidding processes, the granting of various types of discounts and the use of offshore resources. Our ability to respond to customer requests for lower pricing or to provide other low cost solutions in this area of our business will have a direct effect on our performance. Management expects competitive conditions in the area of technical staff augmentation to continue for the foreseeable future, although it expects that demand for these services will increase as the general economy begins to recover.
We are considering various low-cost staffing model alternatives and have entered into a relationship with an e-procurement software vendor. We have established a relationship with an offshore vendor. We have also implemented new software and internet capabilities in our recruiting function. Although management believes these changes will have a positive effect on our results, there is no guarantee that these changes alone will be successful.
Management continues to concentrate on staff augmentation in Fortune 500 and small and medium-sized businesses, business solutions for small and medium-sized businesses, and business opportunities with its technology and product partners. In addition, we plan to develop a low-cost staffing delievery model, expand our offshore service capabilities and develop relationships with sales channel partners with which we will share sales leads. While we believe these areas of our business present opportunities to grow our business, growth in these areas will depend on improvement in the economy and spending in the overall IT services market, our ability to compete with other vendors and our success in obtaining new clients.
Staff augmentation continues to represent more than half of total revenues (revenue from services provided directly to client (direct revenue) plus revenue from services provided to our clients by subsuppliers (subsupplier revenue)) and over half of our direct revenue. While we saw a slight increase in demand for our services during the third quarter, and we are optimistic this trend will continue through the balance of 2003 and into 2004, there can be no assurance as to when, or if, we will begin to see significant increases in revenue. Our ability to respond to the conditions outlined above will bear directly on our performance.
Our ability to quickly identify, attract and retain qualified technical personnel, especially when recovery begins, will affect our results of operations and ability to grow in the future. Competition for qualified personnel is intense, and if we are unable to hire the talent required by our client in a cost-effective manner, it will affect our
15
ability to grow our business.
In addition to our ability to control labor costs, our ability to control employee benefit costs and other employee-related costs will affect our future performance. In an effort to contain our benefits costs, we implemented substantial changes to our benefits plans in fiscal year 2003, and we continue to adjust our benefit plans to control these costs. While we believe we can effectively manage these costs, actual results may vary due to factors we cannot control such as rising medical costs, the amount of medical services used by our employees and similar factors.
Controlling operating costs while attempting not to impact our ability to respond to our clients also is a factor in our future success. We have streamlined our operations by consolidating offices, reducing administrative and management personnel and continuing to review our company structure for more efficient methods of operating our business and delivering our services. We may not be able to continue to reduce costs without affecting our ability to deliver service to our clients and therefore may choose to forego particular cost reductions if we believe it would be prudent to do so for the future business of the Company.
Terms and conditions standard to computer consulting services contracts also present a risk to our business. In general, our clients can cancel or reduce their contracts on short notice. Loss of a significant client relationship or a significant portion thereof, a significant number of relationships or a major contract could have a material adverse effect on our business.
While we believe our working capital will be sufficient for the foreseeable needs of our business, significant rapid growth in our business could create a need for additional working capital. An inability to obtain additional working capital, should it be required, could have an adverse effect on our ability to grow the business. We expect to be able to comply with the requirements of our credit agreement; however, failure to do so could have a material adverse effect on our business.
Quantitative and Qualitative Disclosures About Market Risk
We are exposed to certain market risks on our line of credit agreement because of the variable interest rate charged. Market risk is the potential loss arising from the adverse changes in market rates and prices, such as interest rates. Market risk is estimated as the potential increase in fair value resulting from a hypothetical one percent increase in interest rates which assuming an average outstanding debt balance of $5.0 million would result in an annual interest expense increase of approximately $50,000.
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Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures.
The Company’s Chief Executive Officer, Michael J. LaVelle, and Interim Chief Financial Officer, David J. Steichen, have reviewed the Company’s disclosure controls and procedures as of September 27, 2003. While there can be no assurance these controls will be effective in all circumstances, based upon their review, these officers believe that the Company’s disclosure controls and procedures are effective in ensuring that material information related to the Company is made known to them by others within the Company.
(b) Changes in Internal Controls
There were no significant changes in the Company’s internal controls or in other factors that could significantly affect these controls during the quarter covered by this report or from the end of the reporting period to the date of this report on Form 10-Q.
Exhibits and Reports on Form 8-K
(a) Exhibits
31.1 Certification of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 Certification of Interim CFO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 Certification of CEO Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 Certification of Interim CFO Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(b) Reports on Form 8-K
A. Form 8-K filed July 29, 2003 providing information pursuant to Item 12, “Disclosure of Results of Operations and Financial Condition,” for 2003 Second Quarter.
B. Form 8-K filed July 31, 2003 providing transcript of publicly available telephone conference held July 29, 2003 concerning 2003 Second Quarter earnings.
C. Form 8-K filed August 28, 2003 announcing Chief Financial Officer, John T. Paprocki, will return to his turnaround consulting practice.
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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 there unto duly authorized.
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ANALYSTS INTERNATIONAL CORPORATION |
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(Registrant) |
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Date: November 11, 2003 |
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By: |
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/s/ David J. Steichen |
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David J. Steichen |
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Interim Chief Financial Officer |
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(Chief Accounting Officer) |
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ANALYSTS INTERNATIONAL CORPORATION
FORM 10-Q
QUARTER ENDED SEPTEMBER 27, 2003
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Exhibit No. |
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Description |
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31.1 |
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Certification of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
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31.2 |
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Certification of Interim CFO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
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32.1 |
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Certification of CEO Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
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32.2 |
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Certification of Interim CFO Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
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