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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 September 30, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF
THE EXCHANGE ACT OF 1934
Commission file number: 333-42201
BEAR ISLAND PAPER COMPANY, L.L.C.
(Exact name of registrant as specified in its charter)
Virginia 06-0980835
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification Number)
10026 Old Ridge Road
Ashland, VA
(Address of Principal Executive Offices)
23005
(Zip Code)
(804) 227-3394
(Registrant's telephone number, including area code)
Former Name, Former Address and Former Fiscal Year, if
Changed Since Last Report: Not Applicable
Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file
such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date: Not Applicable.
BEAR ISLAND PAPER COMPANY, L.L.C.
INDEX
Page(s)
Part I. Financial Information
Item 1 Financial Statements
Condensed Balance Sheets 1
Condensed Statements of Operations 2
Condensed Statements of Cash Flows 3
Notes to Condensed Financial Statements 4
Item 2
Management's Discussion and Analysis of Financial Condition
and Results of Operations 6
Item 4
Controls and Procedures 8
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K 9
Signatures 10
Certifications 11
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
BEAR ISLAND PAPER COMPANY, L.L.C.
CONDENSED BALANCE SHEETS
September 30, December 31,
ASSETS 2002 2001
---------------- -----------------
(Unaudited)
Current assets:
Cash and short-term investments $ 2,201,558 $ 886,300
Accounts receivable, net 9,624,800 8,662,832
Inventories 11,694,628 12,665,519
Other current assets 711,159 659,848
---------------- -----------------
Total current assets 24,232,145 22,874,499
Property, plant and equipment 220,092,218 218,595,176
Less accumulated depreciation (52,487,994) (43,562,514)
---------------- -----------------
Net property, plant and equipment 167,604,224 175,032,662
---------------- -----------------
Deferred financing costs 4,949,298 5,502,064
---------------- -----------------
Total assets $ 196,785,667 $ 203,409,225
================ =================
LIABILITIES AND MEMBER'S EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 10,323,533 $ 14,443,843
Accrued interest payable 3,449,902 934,005
Debt 37,444,121 32,444,121
---------------- -----------------
Total current liabilities 51,217,556 47,821,969
Brant-Allen subordinated note 5,000,000 -
Long-term debt 100,000,000 100,000,000
---------------- -----------------
Total liabilities 156,217,556 147,821,969
---------------- -----------------
Member's equity:
Contributed capital 79,581,074 79,581,074
Accumulated deficit (39,012,963) (23,993,818)
---------------- -----------------
Total member's equity 40,568,111 55,587,256
---------------- -----------------
Total liabilities and member's equity $ 196,785,667 $ 203,409,225
================ =================
See accompanying notes to the condensed financial statements.
1
BEAR ISLAND PAPER COMPANY, L.L.C.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three months ended September 30, Nine months ended September 30,
----------------------------------- -----------------------------------
2002 2001 2002 2001
Net sales $ 24,655,802 $ 30,043,564 $ 76,454,133 $ 91,930,626
Cost of sales 25,952,737 26,131,261 81,197,432 78,761,052
--------------- ---------------- ---------------- ----------------
Gross profit (loss) (1,296,935) 3,912,303 (4,743,299) 13,169,574
Selling, general and administrative expenses:
Management fees to Brant-Allen (231,471) (285,979) (719,044) (874,592)
Other (2,272) (101,769) (86,597) (207,435)
--------------- ---------------- ---------------- ----------------
Income (loss) from operations (1,530,678) 3,524,555 (5,548,940) 12,087,547
Other income (deductions):
Interest expense (3,180,739) (3,219,735) (9,498,507) (9,937,650)
Other income 14,273 28,953 28,302 87,248
--------------- ---------------- ---------------- ----------------
Net income (loss) $ (4,697,144) $ 333,773 $ (15,019,145) $ 2,237,145
=============== ================ ================ ================
See accompanying notes to the condensed financial statements.
2
BEAR ISLAND PAPER COMPANY, L.L.C.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine months ended September 30,
-----------------------------------
2002 2001
Operating activities:
Net income (loss) $ (15,019,145) $ 2,237,145
Adjustments to reconcile net income
(loss) to net cash (used) provided
by operating activities:
Depreciation and depletion 8,925,480 8,427,831
Amortization of deferred financing
costs 552,766 497,702
Changes in current assets and liabilities:
Accounts receivable (961,968) 2,965,656
Inventory 970,891 (3,310,105)
Other current assets (51,311) (108,442)
Accounts payable and accrued
liabilities (4,120,310) 676,518
Accrued interest payable 2,515,897 2,416,797
---------------- ----------------
Cash (used) provided by
operating activities (7,187,700) 13,803,102
---------------- ----------------
Investment activities:
Purchases of property, plant and
equipment (1,497,042) (6,380,040)
---------------- ----------------
Net cash used in investing
activities (1,497,042) (6,380,040)
---------------- ----------------
Financing activities:
Proceeds from issuance of debt 10,000,000 1,500,000
Principal payments on long-term debt - (4,157,649)
Tax distribution to parent - (1,952,144)
---------------- ----------------
Net cash (used) provided by
financing activities 10,000,000 (4,609,793)
---------------- ----------------
Net increase in cash
and short term investments 1,315,258 2,813,269
Cash and short-term investments, beginning
of period 886,300 682,329
----------------- -----------------
Cash and short-term investments, end of
period $ 2,201,558 $ 3,495,598
================ ================
See accompanying notes to the condensed financial statements.
3
BEAR ISLAND PAPER COMPANY, L.L.C.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
1. In the opinion of management, the accompanying condensed financial
statements of Bear Island Paper Company, L.L.C. (the "Company") contain all
adjustments necessary to present fairly, in all material respects, the
Company's financial position as of September 30, 2002 and December 31, 2001
and the Company's condensed results of operations for the three- and
nine-month periods ended September 30, 2002 and 2001 as well as the
Company's condensed cash flows for the nine-month periods ended September
30, 2002 and 2001. All adjustments are of a normal and recurring nature.
These condensed financial statements should be read in conjunction with the
financial statements and notes thereto included in the Company's 2001 Form
10-K filed on March 28, 2002. The December 31, 2001 balance sheet data was
derived from audited financial statements, but does not include all
disclosures required by generally accepted accounting principles.
The results of operations for the nine-month period ended September 30,
2002 should not be regarded as necessarily indicative of the results that
may be expected for the entire year.
2. The Company incurred net losses of $15,019,145 and $5,722,211 for the nine
months ended September 30, 2002 and year ended December 31, 2001,
respectively, and had an accumulated deficit of $39,012,963 at September
30, 2002. Management also anticipates a loss for the year ending December
31, 2002. Because of these recurring losses the Company continues to not be
in compliance with certain financial debt covenants under its Credit
Agreement (which relates to the Company's $70 million 8-year Senior Secured
Term Loan Facility (the "Term Loan Facility") and the Company's $50 million
6-year Senior Secured Revolving Credit Facility (the " Revolving Credit
Facility") (collectively the "Bank Credit Agreement"). Management believes
that the Company will be able to successfully manage through the debt
covenant situation, although the Company's lenders could accelerate the
debt at any time during the period. The acceleration of the Bank Credit
Agreement would permit the holders of the Senior Secured Notes to declare
the Notes immediately due and payable. As a result, some debts not
currently due have been classified as current. These matters raise
substantial doubt about the Company's ability to continue as a going
concern. The accompanying financial statements have been prepared on a
going concern basis that contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business.
At September 30, 2002, the Company had the ability to access approximately
$7.0 million of additional capital equipment financing through the use of
certain leasing options. At September 30, 2002 there was no unused
borrowing capacity available under the Revolving Credit Facility, as a
result of the Company's non-compliance with several financial covenants
under the Bank Credit Agreement for which waivers were obtained through
July 30, 2002 however, such waivers have not been extended. Based on
current market conditions, management anticipates being able to meet
liquidity requirements for 2002; however, there exists a range of
reasonably possible outcomes, which could significantly impact their
ability to achieve the aforementioned.
3. The Company is a wholly owned subsidiary of Brant-Allen Industries, Inc.
("Brant-Allen"), a Delaware corporation.
A component of selling, general and administrative expenses as shown on the
statements of operations includes aggregate management fees charged by
Brant-Allen. The management fees payable to Brant-Allen are calculated
pursuant to the Management Services Agreement and constitute 1% of the
Company's net sales.
There are also certain restrictions on distributions paid to Brant-Allen.
Distributions are allowed for a portion of profits in excess of certain
amounts. In addition, distributions are allowed for amounts necessary to
pay for the tax liabilities of the members resulting from the Company's
operations. Distributions of $0 and $1,952,144 were paid to Brant-Allen
during the nine months ended September 30, 2002 and 2001, to pay such tax
liabilities.
4. No provision for income taxes is required in the financial statements since
each member of the parent Company is individually liable for any income tax
that may be payable on the Company's taxable income.
5. Finished goods and raw materials inventories are valued at the lower of
cost or market, with cost determined on the first-in, first-out ("FIFO")
basis. Stores inventories are valued at the lower of average cost or
market.
Inventories consisted of:
September 30, 2002 December 31, 2001
------------------ -----------------
Raw materials $ 1,849,171 $ 2,153,044
Stores 7,080,534 7,686,207
Finished goods 2,764,923 2,826,268
--------------- -----------------
$ 11,694,628 $ 12,665,519
=============== =================
4
BEAR ISLAND PAPER COMPANY, L.L.C.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
6. The Company has a purchase commitment, made in the ordinary course of
business, to purchase $4.2 million of manufacturing equipment from a
vendor. Through September 30, 2002, the Company has paid $1.7 million of
the total due under the commitment, with the remainder due as follows: $0.3
million in 2002, $1.6 million in 2003 and $0.6 million in 2004. The
purchase commitment is guaranteed by Brant-Allen.
7. Long-term debt consisted of:
September 30, 2002 December 31, 2001
------------------ -----------------
Senior Secured Notes $ 100,000,000 $ 100,000,000
Term Loan Facility 17,444,121 17,444,121
Revolving Credit Facility 20,000,000 15,000,000
Brant-Allen Subordinated Note 5,000,000 -
---------------- -----------------
142,444,121 132,444,121
Less amounts classified as current 37,444,121 32,444,121
---------------- -----------------
Total long-term debt $ 105,000,000 $ 100,000,000
================ =================
During the second quarter of 2002, the Company borrowed $5.0 million from
Brant-Allen to meet various cash flow requirements. The note bears no
interest and includes terms for repayment in its entirety in December 2007.
The note is subordinated to all other debt of the Company.
8. The Company's receivables and payables with their affiliates were as follow:
September 30, 2002 December 31, 2001
------------------ -----------------
Due to Brant-Allen $ (1,277,646) $ (508,773)
Due from Newsprint Sales 921,606 530,039
Due from F.F. Soucy, Inc. and Partners 75,363 18,787
Due from F.F. Soucy, Inc. - 7,604
Due to F.F. Soucy, Inc. (174,674) -
Due to Timberlands Company, L.L.C. (353,427) (361,406)
5
ITEM II.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain significant
factors affecting the results of operations of the Company during the periods
included in the accompanying condensed statements of operations and the changes
in the Company's financial condition since December 31, 2001.
General:
The Company manufactures and is dependent on one product, newsprint, which is
used in general printing and the newspaper publishing industry and for
advertising circulars. Accordingly, demand for newsprint fluctuates with the
economy, newspaper circulation and purchases of advertising lineage which
significantly impacts the Company's selling price of newsprint and, therefore,
its revenues and profitability. In addition, variation in the balance between
supply and demand as a result of global capacity additions have an increasing
impact on both selling prices and inventory levels in the North American
markets. Capacity is typically added in large blocks because of the scale of new
newsprint machines.
As a result, the newsprint market is highly cyclical, depending on changes in
global supply, demand and inventory levels. These factors significantly impact
the Company's sales volume and newsprint prices and, therefore, the Company's
revenues and profitability. Given the commodity nature of newsprint, the
Company, like other suppliers to this market, has little influence over the
timing and extent of price changes. Sales are recognized at the time of shipment
from the Company's mill. However, significant fluctuations in revenue can and do
occur as a result of the timing of shipments caused by increases and decreases
in mill inventory levels.
THREE MONTHS ENDED SEPTEMBER 30, 2002, COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 2001
Net sales decreased by $5.3 million, or 18%, to $24.7 million in the third
quarter of 2002, from $30.0 million in the third quarter of 2001. This decrease
was attributable to a 23% decrease in the average net selling price of the
Company's products and offset by a 6% increase in sales volumes to approximately
57,550 metric tons ("tonnes") in the third quarter of 2002, from approximately
54,050 tonnes in the third quarter of 2001. The Company's net selling price for
newsprint decreased to an average of $429 per tonne in the third quarter of 2002
from an average of $555 per tonne in the third quarter of 2001.
Cost of sales decreased by $0.1 million, or 0.4%, to $26.0 million in the third
quarter of 2002 from $26.1 million in the third quarter of 2001. This decrease
was attributable primarily to a 7% decrease in unit manufacturing costs per
tonne offset by the 6% increase in sales volumes as stated above. The decrease
in unit manufacturing cost per tonne was the result of a 9% decrease in energy
costs, a 15% decrease in departmental costs (wages, fringe benefits, maintenance
and repairs) and a 24% decrease in total chemical costs. Cost of sales as a
percentage of net sales increased to 105% in the third quarter of 2002, from 87%
in the third quarter of 2001, due to a net decrease in newsprint selling prices
in the third quarter of 2002 partially offset by the decrease in unit costs of
manufacturing as noted above.
The Company's selling, general and administrative expenses decreased by $0.2
million or 50%, to $0.2 million in the third quarter of 2002 from $0.4 million
in the third quarter of 2001 primarily due to a decrease in consulting fees.
As a result of the above factors, income from operations decreased by $5.0
million to a net loss from operations of $1.5 million in the third quarter of
2002 from a operating profit of $3.5 million in the third quarter of 2001.
The Company's interest expense for the third quarters 2002 and 2001 was
unchanged at $3.2 million, primarily due to reductions in floating interest
rates and offset partially by additional borrowings outstanding under the
Revolving Credit Facility.
As a result of the above factors, the Company reported a net loss of $4.7
million in the third quarter of 2002 compared to net income of $0.3 million in
the third quarter of 2001.
NINE MONTHS ENDED SEPTEMBER 30, 2002, COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 2001
Net sales decreased by $15.4 million, or 17%, to $76.5 million in the first nine
months of 2002, from $91.9 million in the first nine months of 2001. This
decrease was primarily attributable to a 25% decrease in the average net selling
price of the Company's products. This was mitigated by an 11% increase in sales
volumes to approximately 176,450 tonnes in the first nine months of 2002, from
approximately 158,950 tonnes in the first nine months of 2001. The Company's net
selling price for newsprint decreased to an average of $434 per tonne in the
first nine months of 2002 from an average of $578 per tonne in the first nine
months of 2001.
Cost of sales increased by $2.4 million, or 3%, to $81.2 million in the first
nine months of 2002 from $78.8 million in the first nine months of 2001. This
increase was attributable primarily to the increase in sales volumes mentioned
above and was offset by a 7% decrease in unit manufacturing costs per tonne. The
decrease in unit manufacturing cost per tonne was a result of a 4% decrease in
energy costs, a 7% decrease in departmental costs (wages, fringe benefits and
maintenance and repairs) and a 26% decrease in total chemical costs. Cost of
sales as a percentage of net sales increased to 106% in the first nine months of
2002, from 86% in the first nine months of 2001, primarily due to a net decrease
in newsprint selling prices in the first nine months of 2002 which was offset,
in part, by the decrease in per tonne unit costs of manufacturing as noted
above.
6
The Company's selling, general and administrative expenses decreased by $0.3
million, or 27%, to $0.8 million in the first nine months of 2002 from $1.1
million in the first nine months of 2001 primarily due to a decrease in
consulting fees.
As a result of the above factors, income from operations decreased by $17.6
million to a net loss of $5.5 million in the first nine months of 2002 from a
profit of $12.1 million in the first nine months of 2001.
The Company's interest expense decreased $0.4 million, or 4%, to $9.5 million in
the first nine months of 2002 compared to $9.9 million in the first nine months
of 2001, primarily due to reductions in floating interest rates and repayments
of the Company's Term Loan Facility which was partially offset by additional
borrowings under the Revolving Credit Facility.
As a result of the above factors, the Company reported a net loss of $15.0
million in the first nine months of 2002 compared to net profit of $2.2 million
in the first nine months of 2001.
Liquidity and Capital Resources.
The Company's principal liquidity requirements have been for working capital,
capital expenditures and debt service under the Company's Loan Agreements. These
requirements have been met through cash flows from operations, loans under the
Company's Revolving Credit Facility and/or additional borrowings from
Brant-Allen.
The Company's cash and short-term investments at September 30, 2002 were $2.2
million, representing an increase of $1.3 million from $0.9 million at December
31, 2001. Net cash used by operating activities was $7.2 million for the first
nine months ended September 30, 2002. Cash provided by financing activities was
$10.0 million and cash used in investing activities was $1.5 million for the
nine months ended September 30, 2002. The Company anticipates that cash provided
from operations in the future combined with borrowings under the Revolving
Credit Facility and from Brant-Allen will be sufficient to pay its operating
expenses, satisfy debt-service obligations and fund capital expenditures.
In the first nine months of 2002, the Company's operating cash flow decreased by
$21.0 million to a negative $7.2 million of cash which was used in operations
during the first nine-months of 2002 as compared to $13.8 million provided by
operations in the first nine months of 2001, primarily due to lower selling
prices of the Company's products resulting in a net loss in first nine months of
2002 of $15.0 million compared to net income of $2.2 million in the first nine
months of 2001.
The Company made capital expenditures of $1.5 million and $6.4 million in the
first nine months of 2002 and 2001, respectively, in connection with upgrading
and maintaining its manufacturing facility. Management anticipates that the
Company's total capital expenditures for the balance of 2002 and 2003 will
primarily relate to existing capital projects in progress and maintenance of its
newsprint facilities.
At September 30, 2002, the Company had approximately $142.4 million of
indebtedness, consisting of borrowings of $20.0 million under the Revolving
Credit Facility, $17.4 million under the Term Loan Facility, $100 million under
the Notes and $5.0 million under a subordinated note from Brant-Allen. At
September 30, 2002, there was no unused borrowing capacity under the Revolving
Credit Facility as a result of the Company's non-compliance with several
financial covenants under the Bank Credit Agreement for which waivers were
obtained through July 30, 2002, see footnote 2 however, such waivers have not
been extended. The Company also has a purchase commitment to purchase $4.2
million of manufacturing equipment from a vendor, see footnote 6.
7
Item 4. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures. The Company's
Chief Executive Officer and Chief Financial Officer have evaluated the
effectiveness of the Company's disclosure controls and procedures (as such term
is defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of
1934, as amended (the "Exchange Act")) as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"). Based on such
evaluation, such officers have concluded that, as of the Evaluation Date, the
Company's disclosure controls and procedures are effective in alerting them on a
timely basis to material information relating to the Company required to be
included in the Company's reports filed or submitted under the Exchange Act.
(b) Changes in Internal Controls. Since the Evaluation Date, there have
not been any significant changes in the Company's internal controls or in other
factors that could significantly affect such controls.
8
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 99-1 - Certificate Pursuant to 18 U.S.C. Section 1350
Exhibit 99-2 - Certificate Pursuant to 18 U.S.C. Section 1350
(b) No reports on Form 8-K have been filed during the quarter for
which this report is filed.
9
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, there unto duly authorized.
BEAR ISLAND PAPER COMPANY, L.L.C.
By: /s/ Peter M. Brant
Peter M. Brant
President, Chairman of the Board and
Chief Executive Officer
By: /s/ Edward D. Sherrick
Edward D. Sherrick
Vice President of Finance
(Principal Financial Officer and
Chief Accounting Officer)
Dated November 12, 2002
10
CERTIFICATIONS
In connection with the Quarterly Report of Bear Island Paper Company LLC (the
"Company") on Form 10-Q for the period ended September 30, 2002 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), and
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, I, Peter M. Brant,
Chief Executive Officer of the Company, certify that:
(1) I have reviewed the Report;
(2) Based on my knowledge, this 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 Report;
(3) Based on my knowledge, the financial statements and other financial
information included in this Report fairly present in all material
respects the financial condition, results of operations and cash flows
of the Company as of, and for, the periods presented in this 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 is made known to us
by others within those entities, particularly during the period in
which this Report is 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 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 (or persons performing
the equivalent function):
(a) all significant deficiencies in 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
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.
By: /s/ Peter M. Brant
Peter M. Brant
Chief Executive Officer
November 12, 2002
11
CERTIFICATIONS
In connection with the Quarterly Report of Bear Island Paper Company LLC (the
"Company") on Form 10-Q for the period ended September 30, 2002 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), and
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, I, Edward D.
Sherrick, Vice President of Finance (Chief Financial Officer of the Company),
certify that:
(1) I have reviewed the Report;
(2) Based on my knowledge, this 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 Report;
(3) Based on my knowledge, the financial statements and other financial
information included in this Report fairly present in all material
respects the financial condition, results of operations and cash flows
of the Company as of, and for, the periods presented in this 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 is made known to us
by others within those entities, particularly during the period in
which this Report is 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 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 (or persons performing
the equivalent function):
(a) all significant deficiencies in 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
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.
By: /s/ Edward D. Sherrick
Edward D. Sherrick
Vice President of Finance
(Chief Financial Officer)
November 12, 2002
12