UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 29, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 1-4184
Valpey-Fisher Corporation
(Exact name of registrant as specified in its charter)
Maryland 06-0737363
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
75 South St., Hopkinton, Massachusetts 01748
(Address of principal executive offices) (Zip Code)
(508) 435-9039
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities 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 --- ---
As of November 1, 2002, the number of shares outstanding of Registrant's
Common Stock, par value $.05 was 4,134,615.
1
Valpey-Fisher Corporation
INDEX
Page
----
PART I. FINANCIAL INFORMATION
ITEM 1. - FINANCIAL STATEMENTS
Consolidated Condensed Balance Sheets -
September 29, 2002 and December 31, 2001 ................... 3
Consolidated Statements of Operations - Three Months and
Nine Months Ended September 29, 2002 and September 30, 2001 4
Consolidated Condensed Statements of Cash Flows -
Nine Months Ended September 29, 2002 and September 30, 2001 5
Consolidated Statements of Comprehensive Income (Loss) -
Three Months and Nine Months ended September 29, 2002
and September 30, 2001 ..................................... 6
Notes to Consolidated Condensed Financial Statements ......... 7-10
ITEM 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS ........................ 11-14
ITEM 3. - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK ................................................ 14
ITEM 4. - CONTROLS AND PROCEDURES ............................... 15
PART II. OTHER INFORMATION
ITEM 6. - EXHIBITS AND REPORTS ON FORM 8-K ...................... 15
SIGNATURES ........................................................ 16
CERTIFICATIONS ................................................... 17-20
2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Valpey-Fisher Corporation and Subsidiaries
Consolidated Condensed Balance Sheets
(In thousands, except share data) (Unaudited)
9/29/02 12/31/01
-------- --------
ASSETS
Current assets:
Cash and cash equivalents ......................... $ 6,131 $ 5,960
Receivables, net ................................. 2,272 2,307
Inventories, net .................................. 2,667 4,469
Deferred income taxes and other current assets .... 1,589 1,469
------- -------
Total current assets ....................... 12,659 14,205
------- -------
Property, plant and equipment, at cost ............. 10,046 9,910
Less accumulated depreciation ..................... 6,033 5,383
------- -------
4,013 4,527
------- -------
Other assets......................................... 72 109
------- -------
$16,744 $18,841
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt.................. $ 403 $ 403
Accounts payable .................................. 350 475
Accrued liabilities ............................... 1,143 957
------- -------
Total current liabilities ................. 1,896 1,835
------- -------
Long-term debt ...................................... 975 1,278
Deferred income taxes ............................... 714 754
Stockholders' equity:
Preferred stock, $1.00 par value-
Authorized 1,000,000 shares; issued none ......... - -
Common stock, $.05 par value-
Authorized 10,000,000 shares;Issued and outstanding:
4,134,615 and 4,152,515 shares .............. 207 208
Capital surplus ................................... 4,754 4,810
Retained earnings ................................. 8,198 9,956
------- -------
Total stockholders' equity ................ 13,159 14,974
------- -------
$16,744 $18,841
======= =======
See notes to consolidated condensed financial statements
3
Valpey-Fisher Corporation and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share data) (Unaudited)
Three Months Ended Nine Months Ended
9/29/02 9/30/01 9/29/02 9/30/01
------- ------- ------- -------
Net sales .................... $ 1,617 $ 3,007 $ 5,692 $14,921
Cost of sales ................ 2,688 2,599 6,624 11,272
------- ------- ------- -------
Gross profit (loss) ........ (1,071) 408 (932) 3,649
Operating expenses:
Selling and advertising ..... 389 508 1,129 2,034
General and administrative... 281 320 874 1,140
------- ------- ------- -------
670 828 2,003 3,174
Operating profit (loss) ...... (1,741) (420) (2,935) 475
Other income (expense):
Interest income ............. 28 6 83 40
Interest expense............. (17) (31) (66) (65)
Gain on sale of investment... - - 155 152
Other, net .................. - 36 - 108
------- ------- ------- -----
11 11 172 235
Earnings (loss) from continuing
operations before income taxes (1,730) (409) (2,763) 710
Income tax benefit (expense) . 638 164 1,050 (284)
------- ------- ------- -------
Earnings (loss) from continuing
operations ................... (1,092) (245) (1,713) 426
(Loss) from discontinued
operations, net of taxes ..... - - (45) -
------- ------- ------- -------
Net earnings (loss) ........... $(1,092) $ (245) $(1,758) $ 426
======== ======= ======= =======
Basic earnings (loss) per share:
Continuing operations........ $(.26) $(.06) $(.41) $ .10
Discontinued operations...... - - (.01) -
----- ----- ----- -----
$(.26) $(.06) $(.42) $ .10
===== ===== ===== =====
Diluted earnings (loss) per share:
Continuing operations........ $(.26) $(.06) $(.41) $ .10
Discontinued operations...... - - (.01) -
----- ----- ----- -----
$(.26) $(.06) $(.42) $ .10
===== ===== ===== =====
Weighted average shares:
Basic....................... 4,140 4,136 4,144 4,134
Diluted .................... 4,140 4,136 4,144 4,295
Cash dividends per share ..... $ - $ - $ - $ -
===== ===== ===== =====
4
Valpey-Fisher Corporation and Subsidiaries
Consolidated Condensed Statements of Cash Flows
(In thousands)
(Unaudited)
Nine Months Ended
9/29/02 9/30/01
-------- ----------
Cash flows from operating activities:
Net earnings (loss) from continuing operations $ (1,713) $ 426
Adjustments to reconcile net earnings to net cash
provided (used) by operating activities:
Depreciation and amortization 650 585
Deferred income taxes (217) (144)
Gain on sale of investment (155) (152)
Changes in operating assets and liabilities 1,863 (1,176)
-------- ----------
Net cash provided (used) by operating activities 428 (461)
- ---------------------------------------------------------------------------
Cash flows from investing activities:
Proceeds from sale of investment 155 183
Capital expenditures (136) (2,043)
Collection of note receivables 137 169
Other, net (8) (8)
-------- ----------
Net cash provided (used) by investing activities 148 (1,699)
- ---------------------------------------------------------------------------
Cash flows from financing activities:
Proceeds from long-term debt - 2,000
Payments on long-term debt (303) (218)
Purchases of common stock (57) (32)
Stock options exercised - 81
--------- ----------
Net cash provided (used) by financing activities (360) 1,831
- ---------------------------------------------------------------------------
Net cash (used) by discontinued operations (45) -
- ---------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents 171 (329)
Cash and cash equivalents:
Beginning of period 5,960 1,627
-------- ----------
End of period $ 6,131 $ 1,298
======== ==========
See notes to consolidated condensed financial statements.
5
Valpey-Fisher Corporation and Subsidiaries
Consolidated Statements of Comprehensive Income (Loss)
(In thousands)
(Unaudited)
Three Months Ended
9/29/02 9/30/01
------- -------
Net (loss) ......................................... $(1,092) $ (245)
Other comprehensive income, net of tax:
Unrealized gain on marketable equity
securities, net of tax expense of $21 in 2001 ..... - 32
------- -------
Comprehensive (loss) ............................... $(1,092) $ (213)
======= =======
Nine Months Ended
9/29/02 9/30/01
------- -------
Net earnings (loss) .................................. $(1,758) $ 426
Other comprehensive income, net of tax:
Unrealized gain on marketable equity
securities, net of tax expense of $1,160 in 2001 ... - 1,740
-------- -------
Comprehensive income (loss) ......................... $(1,758) $ 2,166
======== =======
See notes to consolidated condensed financial statements.
6
Valpey-Fisher Corporation and Subsidiaries
Notes to Consolidated Condensed Financial Statements
1. Financial Presentation:
The interim financial statements are unaudited but, in the opinion of
management, reflect all adjustments necessary for fair presentation of results
for such periods. The results of operations for any interim period are not
necessarily indicative of results for the full year.
These interim financial statements should be read in conjunction with the
financial statements and related notes thereto included in the Company's 2001
Annual Report on Form 10-K as filed with the Securities and Exchange Commission.
2. Name Change:
On May 31, 2002, under an Agreement of Merger and Plan of Liquidation Under
Section 368(a)(1)(A) and Section 332 of the Internal Revenue Code of 1986, as
amended, ("IRC") Valpey-Fisher Corporation ("VFC"), a wholly owned subsidiary of
MATEC Corporation ("MATEC") was merged with and into MATEC and the separate
corporate existence of VFC ceased. The parties intend that the Merger qualify as
a reorganization described in Section 368(a)(1)(A) and a Plan of Liquidation
described in Section 332 of the IRC. MATEC changed its name to Valpey-Fisher
Corporation effective June 3, 2002.
3. Receivables, net:
Receivables, net of allowances, consist of the following:
9/29/02 12/31/01
------- --------
(in thousands)
Accounts receivable, less allowance for doubtful
accounts of $317 and $396 .......................... $ 973 $ 1,909
Refundable income taxes ............................. 1,275 282
Amounts due from the sale of discontinued operations
and assets ......................................... 24 116
------- -------
$ 2,272 $ 2,307
======= =======
7
4. Inventories, net:
Inventories, net of reserves, consist of the following:
9/29/02 12/31/01
------- --------
(in thousands)
Raw materials ............................ $ 1,939 $ 3,573
Work in process .......................... 419 306
Finished goods ........................... 309 590
------- -------
$ 2,667 $ 4,469
======= =======
5. Discontinued Operations:
During 1998, the Company sold the assets of its Bergen Cable Technologies,
Inc. subsidiary. As a result of the sale, the company is performing
environmental cleanup at the site. During the first quarter of 2002, the Company
expensed $75,000 to increase the environmental expense accrual to reflect the
revised estimate to complete the remediation. As of September 29, 2002, $875,000
has been expensed for the cleanup and $44,000 is accrued for future payments.
6. Gain on Sale of Investment:
In the first quarter of 2000, the Company sold its common stock interest in
Bergen Cable Technology, Inc., received $1,319,000 in cash after estimated
expenses and recorded a pre-tax gain of $1,226,000 on the sale. The above gain
did not include the Company's share of the sale escrow balance, less any claims
for indemnity thereon, if any, to be distributed on or before January 4, 2002.
In the first quarter of 2002, the Company received $155,000 in cash as its
estimated share of the escrow balance, less estimated claims thereon and
reported this amount as a gain on sale of investment.
In the second quarter of 2001, the real estate owned by Bergen Real Estate
L.L.C. was sold. The Company had retained a 10% ownership interest in the L.L.C.
and as a result, received $183,000 in cash after estimated expenses and recorded
a pre-tax gain of $152,000 on the sale. The Company acquired its interest in
this L.L.C. as part of the purchase price for the sale of its Bergen Cable
Technologies, Inc. subsidiary.
8
7. Earnings (loss) Per Share:
The computation of basic and diluted earnings (loss) per share from
continuing operations is as follows:
THREE MONTHS ENDED
In thousands, except per share amounts 9/29/02 9/30/01
- --------------------------------------------------- --------- ----------
BASIC
Earnings (loss) from continuing operations $ (1,092) $ (245)
========= ==========
Weighted average shares outstanding 4,140 4,136
========= ==========
Basic earnings (loss) per share from
continuing operations $ (.26) $ (.06)
========= ==========
DILUTED
Earnings (loss) from continuing operations $ (1,092) $ (245)
========= ==========
Weighted average shares outstanding 4,140 4,136
========= ==========
Diluted weighted average shares outstanding 4,140 4,136
========= ==========
Diluted earnings (loss) per share from
continuing operations $ (.26) $ (.06)
========= ==========
NINE MONTHS ENDED
9/29/02 9/30/01
--------- ----------
BASIC
Earnings (loss) from continuing operations $ (1,713) $ 426
========= ==========
Weighted average shares outstanding 4,144 4,134
========= ==========
Basic earnings (loss) per share from
continuing operations $ (.41) $ .10
========= ==========
DILUTED
Earnings (loss) from continuing operations $ (1,713) $ 426
========= ==========
Weighted average shares outstanding 4,144 4,134
Increase from the assumed exercise of stock options - 161
---------- ----------
Diluted weighted average shares outstanding 4,144 4,295
========= ==========
Diluted earnings (loss) per share from
continuing operations $ (.41) $ .10
During the three and nine months ended September 29, 2002, options to
purchase 314,438 shares of common stock were not considered in the computation
of diluted earnings per share since the Company reported a loss from continuing
operations.
During the three months ended September 30, 2001, options to purchase
429,438 shares of common stock were not considered in the computation of diluted
earnings per share since the Company reported a loss from continuing operations.
9
8. Recent Accounting Pronouncements:
In June 2002, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 146 (SFAS 146), "Accounting for Costs
Associated with Exit or Disposal Activities," SFAS No. 146, which addresses
accounting for restructuring and similar costs, becomes effective for exit or
disposal activities initiated after December 31, 2002. SFAS supersedes previous
accounting guidance, principally Emerging Issues Task Force Issue (EITF) No.
94-3. SFAS No. 146 requires companies to recognize costs associated with exit or
disposal activities when they are incurred rather than at the date of
commitment. SFAS No. 146 also establishes that the liability should initially be
measured and recorded at fair value. Accordingly, SFAS No. 146 may affect the
timing of recognizing future restructuring costs as well as the amounts
recognized.
10
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Critical Accounting Policies
Our discussion and analysis of our financial condition and results of
operations are based upon our consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States. The preparation of these financial statements requires us to make
estimates, judgments, and assumptions that affect the reported amounts of
assets, liabilities, revenues and expenses and the related disclosure of
contingent assets and liabilities. Actual results may differ from these
estimates under different assumptions or conditions.
Management believes that judgments and estimates related to the following
critical accounting policies could materially affect its consolidated financial
statements. The Company performs on-going credit evaluations of customers and
assesses the collectibility of its accounts receivable based on a number of
factors including the customer's financial condition and collection history, and
current economic trends. Similarly, the Company estimates the carrying value of
its inventory based upon historic and projected usage, product design changes
and projected customer purchases. The constant changing technology markets that
we supply also affect these estimates.
Liquidity and Capital Resources
Cash and cash equivalents increased $171,000 during the nine months ended
September 29, 2002. During this period, the Company's continuing operations and
investing activities generated cash of $428,000 and $148,000,respectively, and
financing activities used cash of $360,000.
The cash provided by operations was mainly the result of a decrease in
working capital of $1,863,000 and depreciation of $650,000 partially offset by
the net loss of $1,713,000. Reductions in inventory of $1,802,000 and trade
receivables of $936,000 were the main reasons for the improved working capital
position. The decrease in inventory was mainly due to orders being filled from
existing inventory, a continuing control on inventory purchases and an
additional inventory reserve provision of $900,000 for excess inventory. The
decrease in trade receivables resulted mainly from increased collections of
outstanding balances and the lower sales levels. These working capital
reductions were partially offset by an increase in refundable income taxes of
$993,000.
11
During the nine months ended September 29, 2002, the Company received
$155,000 in cash from the sale of an investment. These proceeds represented the
Company's share of the escrow balance; less estimated claims thereon, relating
to the Company's sale of its common stock interest in Bergen Cable Technology,
Inc., in the first quarter of 2000. In the second quarter of 2001, the real
estate owned by Bergen Real Estate L.L.C. was sold. The Company had retained a
10% ownership interest in the L.L.C. and as a result, received $183,000 in cash
after estimated expenses and recorded a pre-tax gain of $152,000 on the sale.
The Company used $303,000 of cash during the nine months ended September
29, 2002 to make regularly scheduled payments on its $2 million term note.
Management believes that based on its current working capital, the expected
cash flows from operations, and its $1,250,000 revolving line of credit, the
Company's resources are sufficient to meet its financial needs in 2002 including
a remaining capital expenditures budget of approximately $300,000.
Results of Operations
For the quarter and nine months ended September 29, 2002, net sales
decreased $1,390,000 (46%) and $9,229,000 (62%) from the comparable periods in
2001. The main reason for the drop in sales from last year was the lower backlog
at the beginning of 2002 ($1.4 million) compared to that at the beginning of
2001 ($16.4 million). Sales recorded during the nine months ended September 29,
2002 include sales cancellation charges of approximately $723,000 from two
customers. The Company began to experience a drop-off in bookings during the
first quarter of 2001. This drop-off continued through the end of 2001 as the
market demand from the telecom, networking and wireless markets dropped
significantly as customers began reporting slower growth rates and excess
inventory levels. During 2001 customers were also requesting order cancellations
and push-out of deliveries. The book-to-bill ratio during the nine months ended
September 29, 2002 was 1.10, with the backlog amounting to $1.9 million at
September 29, 2002. We believe that market conditions for our products, in
particular the telecom market, have not "bottomed out", and near-term visibility
continues to be poor. Our major telecom customers continue to announce plant
closings and work-force reductions. The telecom industry continues to operate at
low levels of production with customers not willing to commit to forecasts and
long-term contracts. Orders for the most part continue to be small with
near-term delivery dates. Over the past several months, the Company has directed
more effort at new products for the medical, military, and instrumentation
markets, as well as the telecom market.
During the quarter ended September 29, 2002, the Company reported a gross
loss on sales of $1,071,000 compared to a gross profit of $408,000 in the
comparable period in 2001. For the nine months ended September 29, 2002, the
gross loss on sales was $932,000 compared to a gross profit of $3,649,000 in the
comparable 2001 period. During the quarter ended September 29, 2002, the Company
recorded a $900,000 inventory provision for excess inventory and a $50,000
provision for employee severance expense. Excluding these charges, the main
reason for the decrease in gross margins during both periods was the unfavorable
effect of allocating the fixed overhead expenses over the lower sales volume.
During these periods raw material and direct labor costs as a percentage of
sales remained fairly equal to those in the 2001 comparable periods.
12
During the quarter and nine months ended September 29, 2002, selling and
advertising expenses decreased $119,000 (23%)and $905,000 (44%), respectively,
from the comparable periods in 2001. Lower sales commission expense to the
Company's outside manufacturers' representatives and a decrease in advertising
and promotion expenses were the main reasons for the expense decreases during
these periods. The quarter and nine months ended September 29, 2002 includes a
$50,000 provision for employee severance expense.
During the quarter ended September 29, 2002, general and administrative
expenses decreased $39,000 (12%) from 2001 mainly as a result of reduced
personnel expense. During the nine months ended September 29, 2002, general and
administrative expenses decreased $266,000 (23%) from the comparable period in
2001 mainly due to reduced personnel expense and a lower provision for the
management incentive bonus.
The increases in interest income during the quarter and nine months ended
September 29, 2002 resulted mainly from the higher cash balances during the
current year. The decrease in interest expense during the quarter ended
September 29, 2002 is mainly due to the lower amount of outstanding debt.
Interest expense during the nine months ended September 29,2002 is fairly
consistent with the prior year amount since the average outstanding debt during
the periods was comparable. During the nine months ended September 29, 2002, the
Company received $155,000 in cash and reported this amount as a gain on sale of
investment. This cash represents the Company's estimated share of the net escrow
balance relating to the sale of the Company's common stock investment in Bergen
Cable Technology, Inc. in 2000. In the second quarter of 2001, the real estate
owned by Bergen Real Estate L.L.C. was sold. The Company realized a pre-tax gain
of $152,000 after estimated expenses for its ownership share in this company.
The estimated effective income tax rate for 2002 is 38% compared to 40% in
2001.
For the quarter ended September 29, 2002, the Company reported an operating
loss of $1,741,000 versus an operating loss of $420,000 in the comparable
quarter of 2001 mainly as a result of the decrease in sales and gross margin, a
$900,000 inventory provision for excess inventory offset in part by lower
operating expenses. Nonoperating income was comparable in both periods. As a
result, the Company reported a net loss from continuing operations of $1,092,000
during the quarter ended September 29, 2002 compared to a net loss of $245,000
in the comparable 2001 period.
13
For the nine months ended September 29, 2002, the Company reported an
operating loss of $2,935,000 versus an operating profit of $475,000 in the
comparable period of 2001 mainly as a result of a decrease in sales and gross
margin, a $900,000 inventory provision for excess inventory offset in part by
lower operating expenses. Nonoperating income amounted to $172,000 in 2002
compared to $235,000 of income in the corresponding 2001 period. As a result,
the Company reported a net loss from continuing operations of $1,713,000 during
the nine months ended September 29, 2002 compared to net earnings of $426,000 in
2001. Loss from discontinued operations during the nine months ended September
29, 2002 amounted to $45,000. In total, the Company reported a consolidated net
loss of $1,758,000 during the nine months ended September 29, 2002 versus net
earnings of $426,000 in the comparable period of 2001.
Forward-Looking Statements
Certain statements made herein contain forward-looking statements that
involve risks and uncertainties that could cause actual results to differ
materially from those in the forward-looking statements. Words such as
"expects", "believes", "estimates", "plans" or similar expressions are intended
to identify such forward-looking statements. The forward-looking statements are
based on the Company's current views and assumptions and involve risks and
uncertainties that include, but not limited to: the ability to develop, market
and manufacture new innovative products competitively, the fluctuations in
product demand of the telecommunications industry, the ability of the Company
and its suppliers to produce and deliver materials and products competitively,
and the ability to limit the amount of the negative effect on operating results
caused by pricing pressure.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Company's cash balances in excess of operating requirements are
currently invested in money market accounts. These money market accounts are
subject to interest rate risk and interest income will fluctuate in relation to
general money market rates. Based on the cash and cash equivalent balance at
September 29, 2002, and assuming the balance was totally invested in money
market instruments for the full year, a hypothetical 1% point decline in
interest rates would result in an approximate $61,000 decrease in interest
income.
The Company purchases certain inventory from and sells product in foreign
countries. As these activities are currently transacted in U.S. dollars, they
are not subject to foreign currency exchange risk. However, significant
fluctuation in the currencies where the Company purchases inventory or sells
product could make the U.S. dollar equivalent of such transactions more or less
favorable to the Company and the other involved parties.
14
Item 4. Controls and Procedures
a) Evaluation of disclosure controls and procedures.
Within the 90 days prior to the date of this report, the Company carried
out an evaluation, under the supervision and with the Company's management,
including the Company's Chairman of the Board and the Company's Chief Financial
Officer, of the effectiveness of the design and operation of the Company's
disclosure controls and procedures. Based upon that evaluation, the Chairman of
the Board and Chief Financial Officer concluded that the Company's disclosure
controls and procedures are effective in timely alerting them to material
information relating to the Company (including its consolidated subsidiaries)
required to be included in the Company's periodic SEC filings.
b) Changes in internal control.
There have been no significant changes in the Company's internal controls
or in other factors that could significantly affect these controls subsequent to
the date of their evaluation.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
99.1 Certification of the Chief Executive Officer Pursuant to
18 U.S.C. Section 1350, as Adopted Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
99.2 Certification of the Chief Financial Officer Pursuant to
18 U.S.C. Section 1350, as Adopted Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
(b) Reports on Form 8-K - None
15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Valpey-Fisher Corporation
Date: November 4, 2002 By /s/ Michael J. Kroll
----------------------------
Michael J. Kroll
Vice President, Treasurer and
Chief Financial Officer
16
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Ted Valpey, Jr., certify that:
1. I have reviewed this quarterly report on Form 10-Q of Valpey-Fisher
Corporation;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which would 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
17
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: November 4, 2002
By /s/ Ted Valpey, Jr.
----------------------------
Ted Valpey, Jr.
Chief Executive Officer through
September 29, 2002 and Chairman
18
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Michael J. Kroll, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Valpey-Fisher
Corporation;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which would 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
19
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: November 4, 2002
By /s/ Michael J. Kroll
--------------------------
Michael J. Kroll
Vice President, Treasurer and
Chief Financial Officer
20