Back to GetFilings.com
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 quarterly period ended March 31, 2003
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: 000-21724
-----------------------
FUEL-TECH N.V.
(Exact name of registrant as specified in its charter)
Netherlands Antilles N.A.
-------------------- ----------------
(State of Incorporation) (I.R.S. Employer
Identification No.)
Fuel-Tech N.V. Fuel Tech, Inc.
(Registrant) (U.S. Operating Subsidiary)
Castorweg 22-24 Suite 703, 300 Atlantic Street
Curacao, Netherlands Antilles Stamford, CT 06901
(599) 9-461-3754 (203) 425-9830
(Address and telephone number of principal executive offices)
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 X No
--- ---
Indicate by check mark whether the registrant is an accelerated filer (as
defined in rule 12b-2 under the Securities Exchange Act of 1934).
Yes X No
--- ---
As of May 1, 2003, there were outstanding 19,683,642 shares of Common Stock, par
value $0.01 per share, of the registrant.
===========================================================================
FUEL-TECH N.V.
Form 10-Q for the three-month period ended March 31, 2003
INDEX
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets as of March 31, 2003 1
and December 31, 2002
Condensed Consolidated Statements of Operations for the Three 2
Month Periods Ended March 31, 2003 and 2002
Condensed Consolidated Statements of Cash Flows for the Three 3
Month Periods Ended March 31, 2003 and 2002
Notes to the Condensed Consolidated Financial Statements 4
Item 2. Management's Discussion and Analysis of 9
Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures about Market Risk 11
Item 4. Controls and Procedures 11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES AND CERTIFICATIONS 13
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
FUEL-TECH N.V.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands of U.S. dollars, except share data)
March 31, December 31,
2003 2002
--------------- ---------------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 8,328 $ 10,939
Accounts receivable, net 8,496 8,849
Prepaid expenses and other current assets 1,267 1,164
--------------- ---------------
Total current assets 18,091 20,952
Equipment, net of accumulated depreciation of
$5,336 and $5,118, respectively 2,223 2,123
Goodwill, net of accumulated amortization of
$924 2,119 2,119
Other 675 675
--------------- ---------------
Total assets $ 23,108 $ 25,869
=============== ===============
Liabilities and stockholders' equity
Current liabilities:
Accounts payable 3,649 5,065
Accrued expenses 1,260 1,940
--------------- ---------------
Total current liabilities 4,909 7,005
Long-term debt 1,575 1,800
Other liabilities 257 259
--------------- ---------------
Total liabilities 6,741 9,064
Stockholders' equity:
Common stock, par value $0.01 per share,
authorized 40,000,000 shares, 19,683,642
and 19,613,817 shares issued, respectively 197 196
Additional paid-in capital 90,424 90,315
Accumulated deficit (73,669) (73,150)
Accumulated other comprehensive income 16 10
Treasury stock (1,133) (1,098)
Nil coupon perpetual loan notes 532 532
--------------- ---------------
Total stockholders' equity 16,367 16,805
--------------- ---------------
Total liabilities and stockholders' equity $ 23,108 $ 25,869
=============== ===============
See notes to condensed consolidated financial statements.
1
FUEL-TECH N.V.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands of U.S. dollars, except share data)
Three Months Ended
March 31
2003 2002
---------- --------
Net sales $ 8,036 $ 5,221
Costs and expenses:
Cost of sales 5,409 2,583
Selling, general and administrative 2,854 2,355
Research and development 311 293
---------- --------
Operating loss (538) (10)
Income from equity interest in affiliates - 238
Interest expense (16) (43)
Other income, net 37 77
---------- --------
(Loss) income before taxes (517) 262
Income tax benefit - 50
---------- --------
Net (loss) income $ (517) $ 312
========== ========
Net (loss) income per common share:
Basic $ (.03) $ .02
========== ========
Diluted $ (.03) $ .01
========== ========
Average number of common shares outstanding:
Basic 19,552,000 19,177,000
========== ==========
Diluted 19,552,000 22,632,000
========== ==========
See notes to condensed consolidated financial statements.
2
FUEL-TECH N.V.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands of U.S. dollars)
Three Months Ended
March 31
2003 2002
-----------------------------
Operating activities
Net cash used in
operating activities $ (2,137) $ (195)
------------- ------------
Investing activities
Repayment from affiliate - 250
Proceeds from sale of equipment - 17
Purchases of equipment and patents (328) (277)
------------- ------------
Net cash used in investing activities (328) (10)
------------- ------------
Financing activities
Exercise of stock options 108 230
Purchase of treasury shares (35) -
Repayment of borrowings (225) (225)
------------- ------------
Net cash (used in) provided by
financing activities (152) 5
------------- ------------
Effect of exchange rate fluctuations on cash 6 2
------------- ------------
Net decrease in cash and
cash equivalents (2,611) (198)
Cash and cash equivalents at beginning
of period 10,939 9,338
------------- ------------
Cash and cash equivalents at
end of period $ 8,328 $ 9,140
============= ============
See notes to condensed consolidated financial statements.
3
FUEL-TECH N.V.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2003
(Unaudited)
Note A: Basis of Presentation
The accompanying unaudited, 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 adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation of the results of operations for the periods covered have been
included. Operating results for the three-month period ended March 31, 2003, are
not necessarily indicative of the results that may be expected for the year
ending December 31, 2003.
The balance sheet at December 31, 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 Fuel-Tech N.V.'s annual report on Form 10-K
for the year ended December 31, 2002.
Fuel-Tech N.V. through its subsidiaries (the "Company"), is a technology
company active in the business of air pollution control. The Company,
incorporated in 1987 under the laws of the Netherlands Antilles, is registered
at Castorweg 22--24 in Curacao under No. 1334/N.V.
4
Note B: Earnings Per Share Data
Basic earnings per share excludes the dilutive effects of stock options
and warrants and of the nil coupon non-redeemable convertible unsecured loan
notes. Diluted earnings per share includes the dilutive effect of stock options
and warrants and of the nil coupon non-redeemable convertible unsecured loan
notes for the three-month period ended March 31, 2002. Such amounts have been
excluded for the three months ended March 31, 2003 as they are antidilutive due
to the net loss for the three months. The following table sets forth the
weighted-average shares (in thousands) used in calculating the earnings per
share for the three-month periods ended March 31, 2003 and 2002:
Three months ended
2003 2002
---------------------
Basic weighted-average shares 19,552 19,177
Conversion of unsecured loan notes - 86
Unexercised options and warrants - 3,369
---------------------
Diluted weighted-average shares 19,552 22,632
=====================
Note C: Total Comprehensive (Loss) Income
Total comprehensive (loss) income for the Company is comprised of net
(loss) income, the impact of foreign currency translation, and the change in
fair value of the interest rate swap for the three-month periods ended March 31,
2003 and 2002. Total comprehensive (loss) income was $(511,000) and $328,000 for
the three-month periods ended March 31, 2003 and 2002, respectively.
For the three months ended
March 31
--------------------------------------
2003 2002
-------------- --------------
Comprehensive (loss) income:
Net (loss) income $ (517,000) $ 312,000
Foreign currency translation 6,000 2,000
Change in fair value of interest
rate swap - 14,000
-------------- --------------
$ (511,000) $ 328,000
============== ==============
5
Note D: Derivative Financial Instruments
Interest Rate Risk Management:
The Company is exposed to interest rate risk due to its long-term debt
arrangement. The Company does not currently use any derivative instruments to
manage exposure to interest rate changes.
Foreign Currency Risk Management:
The Company's earnings and cash flow are subject to fluctuations due to
changes in foreign currency exchange rates. The Company does not enter into
foreign currency forward contracts or into foreign currency option contracts to
manage this risk due to the immaterial nature of the transactions involved.
6
Note E: Stock-Based Compensation
Fuel Tech accounts for stock option grants in accordance with Accounting
Principles Board (APB) Opinion No. 25, "Accounting for Stock Issued to
Employees." Under Fuel Tech's current plans, options may be granted at not less
than the fair market value on the date of grant, and therefore, no compensation
expense is recognized for the stock options granted.
If compensation expense for Fuel Tech's plans had been determined based
on the fair value at the grant dates for awards under its plans, consistent with
the method described in SFAS No. 123, Fuel Tech's net income (loss) and income
(loss) per share would have been adjusted as follows for the three-month periods
ended March 31, 2003 and 2002:
---------------------------- ---------------------------- ----------------- ------------------
(in thousands) 2003 2002
---------------------------- ---------------------------- ----------------- ------------------
Net income (loss)
As reported $(517) $312
As adjusted (673) 164
Basic and diluted income
(loss) per share:
Basic - as reported $(.03) $.02
Basic - as adjusted $(.03) $.01
Diluted - as reported $(.03) $.01
Diluted - as adjusted $(.03) $.01
In accordance with the provisions of SFAS No. 123, the "As adjusted"
disclosures include only the effect of stock options granted after 1994. The
application of the "As adjusted" disclosures presented above are not
representative of the effects SFAS No. 123 may have on such operating results in
future years due to the timing of stock option grants and considering that
options vest over a period of immediately to five years.
Note F: Debt
Fuel Tech, Inc. (FTI) has a $10.0 million revolving credit facility
expiring July 31, 2004, which is collateralized by all personal property owned
by FTI. FTI can use this facility for cash advances and standby letters of
credit. Cash advances under this facility bear interest at the bank's prime
rate, or at an optional rate that can be selected by FTI which is based on the
bank's Interbank Offering Rate plus 2.25%. The borrowings under this facility
are collateralized by all personal property owned by FTI.
FTI also had a term loan agreement with the same bank for a total
principal balance of $4.5 million. The principal balance was to be repaid in
quarterly installments of $225,000 commencing on December 31, 1999, with a final
principal payment of $1,575,000 due on January 31, 2003. Further, FTI entered
into an interest rate swap transaction that fixed the rate of interest at 8.91%
on approximately 50% of the outstanding principal balance during the term of the
loan. This swap expired on October 22, 2002. The remaining principal balance
bore interest at the bank's prime rate, or an optional rate that can be selected
by FTI, and was based on the bank's Interbank Offering Rate plus 2.25%. The
borrowings under this facility were collateralized by all personal property
owned by FTI.
The $10.0 million revolving credit facility was obtained via an
amendment, effective December 31, 2002, that increased the then existing credit
facility from $6.0 million to $10.0 million and extended the agreement until
July 31, 2004. The term loan was paid in full on January 31, 2003 using proceeds
from the line of credit.
7
Note G: Business Segment and Geographic Disclosures
The Company operates in one business segment providing air pollution
control chemicals and equipment.
Information concerning the Company's operations by geographic area is
provided below. Operating earnings represent sales less cost of products sold
and operating expenses. Foreign operating expenses include direct expenses
incurred outside of the United States by foreign corporations controlled by the
Company plus an allocation of selling and general expenses incurred in the
United States that are directly related to the foreign operations. Assets are
those directly associated with operations in the geographic area.
For the three months ended
March 31
----------------------------------------
2003 2002
---------------- ------------------
Revenues:
United States $ 6,879,000 $ 4,603,000
Foreign 1,157,000 618,000
---------------- ------------------
$ 8,036,000 $ 5,221,000
================ ==================
Operating Earnings:
United States $ (585,000) $ 4,000
Foreign 47,000 (14,000)
---------------- ------------------
$ (538,000) $ (10,000)
================ ==================
March 31, December 31,
2003 2002
---------------- ------------------
Assets:
United States $21,707,000 $24,393,000
Foreign 1,401,000 1,476,000
---------------- ------------------
$23,108,000 $25,869,000
================ ==================
8
FUEL-TECH N.V.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
Net sales for the three months ended March 31, 2003 and 2002 were
$8,036,000 and $5,221,000, respectively. The improvement is attributable to an
increase in domestic NOx reduction utility project revenues as project bookings
from 2002 continue to generate revenues from their various phases of completion.
NOx reduction utility revenue in 2002 was favorably impacted by the
Environmental Protection Agency's (EPA) SIP (State Implementation Plan) Call
regulation (discussed further below) that requires 19 states to reduce NOx
emissions by May 31, 2004, and the Company expects to be impacted favorably by
this regulation throughout 2003 and beyond. Fuel treatment chemical revenue for
the three-month period ended March 31, 2003 was favorably impacted by shipments
to utilities burning western coals and by the acquisition of new oil-fired
business outside of the continental U.S. The Company believes that utilities
burning Western coals represent the largest market opportunity for its fuel
treatment chemical business and that penetration into this market remains a
priority. The investment in new personnel in 2002 to address this opportunity
has begun to pay off, as demonstrations are expected to commence in the second
quarter of 2003 at several new utilities. All of these utilities will be using
the Company's patented Targeted-In-Furnace-Injection (TIFI) process to control
the formation of slag deposits in boilers burning western coals.
The "SIP Call" is the federal mandate that, when introduced in 1998,
required 22 states to reduce NOx emissions by May 2003. This mandate was an
extension of Phase II of Title I of the CAAA. In May 1999 a stay was imposed on
this regulation. On March 3, 2000, an appellate court of the D.C. Circuit upheld
the validity of the SIP Call for 19 of the 22 states and, on June 22, 2000, the
same court made a final ruling upholding the EPA's SIP call regulation and
denying the appeal of the states and utilities. Subsequent to this court ruling,
the stay on the SIP Call was lifted. Although the NOx reduction requirement date
was moved back one year to May of 2004, nineteen states were required to
complete and issue their State Implementation Plans for NOx reduction by October
of 2000. These plans, which the EPA had until October 2001 to approve, will
potentially impact 700 to 800 utility boilers and 400 to 500 large industrial
units.
In February 2001, the United States Supreme Court, in a unanimous
decision, upheld EPA's authority to revise the National Ambient Air Quality
Standard for ozone to 0.080 parts per million averaged through an eight-hour
period from the current 0.120 parts per million for a one-hour period. This more
stringent standard provides clarity and impetus for air pollution control
efforts well beyond the current ozone attainment requirement of 2007. In keeping
with this trend, the Supreme Court, only days later, denied industry's attempt
to again stay the SIP Call, effectively exhausting all means of appeal.
Based on these regulatory developments, the Company is enjoying
accelerated interest in its programs that have led to significant project
bookings in 2002, and anticipates strong demand for its air pollution control
technologies over the next several years.
Cost of sales as a percentage of net sales for the three-month period
ended March 31, 2003 increased to 67% versus 49% in the same period of the prior
year. This increase reflects a change in product mix, as a larger percentage of
revenues was realized from lower margin NOx reduction project business versus
the FUEL CHEM(R) business relative to the prior year. Additionally, within the
NOx reduction project business, a significantly larger percentage of the
revenues for the first quarter of 2003 was generated by turnkey projects versus
the comparable period in 2002. When the Company is responsible for the turnkey
installation of the equipment as part of the project scope, overall project
revenues and margin dollars increase, however, the overall project margin
becomes diluted. Installation scope is not afforded the same margin in the
market place as is the sale of the Company's patented technology.
Selling, general and administrative expenses were $2,854,000 and
$2,355,000, respectively, for the three months ended March 31, 2003 and 2002.
The increase is due primarily to the addition of sales resources for the fuel
treatment chemical business and, to a lesser degree, to the addition of
resources in support of the marketing and development of the Company's
ACUITIV(TM) advanced visualization software. As noted above, market penetration
of the Company's TIFI technology is a strategic priority.
9
Research and development expenses for the three-months ended March 31,
2003 increased marginally over the similar period of 2002. The Company continues
to pursue commercial applications for its technologies outside of its
traditional markets, with a particular focus on its ACUITIV advanced
visualization software. The ACUITIV software product was commercially introduced
on June 6, 2002, and the Company recently received its second commercial order
for the software. The software is currently being demonstrated at 12 additional
sites. In addition, ACUITIV version 3.2 was released during the first quarter of
2003, with the primary enhancement being compatibility with Windows(R) 2000.
Although the validity of the product has been confirmed, the Company does not
expect revenues related to this product to be material for the remainder of the
year.
In the first quarter of 2002, the Company recognized income of $250,000
on its equity investment in Clean Diesel Technologies, Inc. (CDT), its 15
percent-owned affiliate, which was partially offset by a loss of $12,000 that
was realized on its 49 percent ownership interest in Fuel Tech CS Gmbh. The
income in 2002's first quarter from CDT resulted from CDT's repayment of loans
made by the Company to CDT in 2000 and 2001. Because the Company's pro-rata
share of CDT's losses reduced the carrying value of the loans to zero at
December 31, 2001, the entire loan repayment was recorded as equity income in
the first quarter of 2002. In the first quarter of 2003, the Company did not
realize any income or loss from its equity investments.
Interest expense for the three months ended March 31, 2003 was reduced
from the comparable period in 2002 due to a reduction in the Company's average
outstanding debt balance, as well as to a reduction in short term interest
rates.
The decline in other income and (expense) for the quarter ended March 31,
2003 versus the prior year was due primarily to a reduction in interest income
resulting from the decrease in short-term rates noted above.
No provision for federal or state income taxes was recorded during the
quarter ended March 31, 2003 due to the existence of net operating loss
carryforwards. In the first quarter of 2002, an income tax benefit of $50,000
was recorded which represented a reduction in the reserve for prior years' state
income tax refunds receivable.
Liquidity and Sources of Capital
For the three months ended March 31, 2003, the Company used cash for
operating activities in the amount of $2,137,000, while $195,000 was used in
operating activities for the same period in 2002. The use of cash for operating
activities in 2003 stems largely from a reduction in accounts payable and
accrued expenses, and to a lesser extent, the first quarter's operating loss.
At March 31, 2003 and December 31, 2002, the Company had cash and cash
equivalents of $8,328,000 and $10,939,000, respectively, while working capital
for the same two periods of time was $13,182,000 and $13,947,000, respectively.
10
Forward-Looking Statements
Statements in this Form 10-Q that are not historical facts, so-called
"forward-looking statements," are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. Investors are cautioned
that all forward-looking statements involve risks and uncertainties, including
those detailed in the Company's filings with the Securities and Exchange
Commission. See "Risk Factors of the Business" in Item 1, "Business," and also
Item 7, "Management's Discussion and Analysis of Financial Condition and Results
of Operations" in the Company's Form 10-K for the year ended December 31, 2002.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Please refer to Note D.
Item 4. Controls and Procedures
Within 90 days prior to the filing date of this report, the Company's
certifying officers performed an evaluation of the effectiveness of the
Company's disclosure controls and procedures. The disclosure controls and
procedures were determined to be sufficient to ensure that material information
relating to the Company, including its consolidated subsidiaries, is made known
to the certifying officers by others within those entities, particularly during
the period in which this quarterly report is being prepared.
There were no significant changes in the registrant's internal controls
or in other factors that could significantly affect these controls subsequent to
the date of their evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
Additional Exhibits 99.1 and 99.2 are furnished herewith
b. Reports on Form 8-K
None
12
FUEL-TECH N.V.
SIGNATURES AND CERTIFICATIONS
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.
The undersigned in their capacities as Chief Executive Officer and
Chief Financial Officer of the Registrant do hereby certify that:
(i) this report fully complies with the requirements of Section 13(a)
or 15(d) of the Securities Exchange Act of 1934; and
(ii) information contained in the report fairly presents, in all
material respects, the financial condition and results of operations of the
Registrant as of, and for, the periods presented in the report.
Date: May 10, 2003 By: /s/ Ralph E. Bailey
-------------------
Ralph E. Bailey
Chairman, Managing Director
and Chief Executive Officer
Date: May 10, 2003 By: /s/ Scott M. Schecter
---------------------
Scott M. Schecter
Chief Financial Officer,
Vice President and
Treasurer
13
I, Ralph E. Bailey, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Fuel-Tech N.V.;
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 l3a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: May 10, 2003 By: /s/ Ralph E. Bailey
-------------------
Ralph E. Bailey
Chairman, Managing Director
and Chief Executive Officer
I, Scott M. Schecter, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Fuel-Tech N.V.;
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 l3a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: May 10, 2003 By: /s/ Scott M. Schecter
---------------------
Scott M. Schecter
Chief Financial Officer,
Vice President and
Treasurer