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 March 30, 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 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) 435-6831
(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
Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act)
Yes [ ] No [X]
As of May 9, 2003, the number of shares outstanding of Registrant's Common
Stock, par value $.05 was 4,184,815.
1
Valpey-Fisher Corporation
INDEX PAGE
----- ----
PART I. FINANCIAL INFORMATION
ITEM 1. - Financial Statements
Consolidated Condensed Balance Sheets - March 30, 2003 and December 31, 2002 ..............
3
Consolidated Statements of Operations -
Three Months Ended March 30, 2003 and March 31, 2002......................................... 4
Consolidated Condensed Statements of Cash Flows -
Three Months Ended March 30, 2003 and March 31, 2002......................................... 5
Notes to Consolidated Condensed Financial Statements................................................ 6-9
ITEM 2. - Management's Discussion and Analysis of Financial Condition and
Results of Operations............................................................................ 10-12
ITEM 3. - Quantitative and Qualitative Disclosures About Market Risk............................ 12
ITEM 4. - Controls and Procedures....................................................................... 12
PART II. OTHER INFORMATION
ITEM 6. - Exhibits and Reports on Form 8-K............................................................ 13
SIGNATURES................................................................................................ 14
CERTIFICATIONS.......................................................................................... 15-16
2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Valpey-Fisher Corporation and Subsidiaries
Consolidated Condensed Balance Sheets
(In thousands, except share data)
3/30/03 12/31/02
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 3,856 $ 5,758
Receivables, net 2,792 2,175
Inventories, net 1,633 2,028
Deferred income taxes and other current assets 1,096 1,110
Total current assets 9,377 11,071
Property, plant and equipment, at cost 10,190 10,165
Less accumulated depreciation 6,433 6,231
3,757 3,934
Other assets 149 146
$13,283 $15,151
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ - $ 1,277
Accounts payable 249 270
Accrued liabilities 641 701
Income taxes 117 117
Total current liabilities 1,007 2,365
Deferred income taxes 678 704
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: 4,193,515 and 4,207,115 shares 210 210
Capital surplus 5,038 5,080
Retained earnings 6,610 7,067
Less unearned compensation (260) (275)
Total stockholders' equity 11,598 12,082
$13,283 $15,151
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
3/30/03 3/31/02
Net sales $1,711 $2,353
Cost of sales 1,663 2,190
Gross profit 48 163
Operating expenses:
Selling and advertising 375 353
General and administrative 373 305
748 658
Operating (loss) (700) (495)
Other income (expense):
Interest income 20 28
Interest expense (12) (27)
Gain on sale of investment - 155
8 156
(Loss) from continuing operations before income taxes (692) (339)
Income tax benefit 235 136
(Loss) from continuing operations (457) (203)
(Loss) from discontinued operations, net of taxes - (45)
Net (loss) $ (457) $ (248)
===== =====
Basic (loss) per share:
Continuing operations $ (.11) $ (.05)
Discontinued operations - (.01)
$ (.11) $ (.06)
Diluted (loss) per share:
Continuing operations $ (.11) $ (.05)
Discontinued operations - (.01)
===== =====
$(.11) $(.06)
Weighted average shares:
Basic 4,197 4,149
Diluted 4,197 4,149
Cash dividends per share $ - $ -
===== =====
See notes to consolidated condensed financial statements.
4
Valpey-Fisher Corporation and Subsidiaries
Consolidated Condensed Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended
3/30/03 3/31/02
----------------
Cash flows from operating activities:
Net (loss) from continuing operations $(457) $(203)
Adjustments to reconcile net (loss) to net cash
provided (used)
by operating activities:
Depreciation and amortization 202 219
Deferred income taxes 16 (13)
Net non-cash stock compensation 9 -
Gain on sale of investment - (155)
Changes in operating assets and liabilities (330) 897
Net cash provided (used) by operating activities (560) 745
Cash flows from investing activities:
Capital expenditures (25) (27)
Collection of note receivables 5 47
Proceeds from sale of investment - 155
Other, net (8) (8)
Net cash provided (used) by investing activities (28) 167
Cash flows from financing activities:
Payments on long-term debt (1,277) (101)
Purchases of common stock (37) (25)
Net cash (used) by financing activities (1,314) (126)
Net cash (used) by discontinued operations - (45)
Net increase (decrease) in cash and cash equivalents (1,902) 741
Cash and cash equivalents:
Beginning of period 5,758 5,960
----------------
End of period $3,856 $6,701
================
See notes to consolidated condensed financial statements.
5
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 2002
Annual Report on Form 10-K as filed with the Securities and Exchange Commission.
2. Stock Compensation Plans:
The Company applies the intrinsic value method, Accounting
Principles Board Opinion No. 25 "Accounting for Stock Issued to Employees" and
related interpretations in accounting for its stock option plans. The Company
provides the disclosure requirements of Statement of Financial Accounting
Standards Nos. 123 and 148, "Accounting for Stock-Based Compensation," and
related interpretations and amendments.
The Company adopted the disclosure-only option under SFAS No.123
"Accounting for Stock-Based Compensation." The following table illustrates the
effect on net (loss) per share if the Company had applied the fair value
recognition provisions of SFAS No.123 to stock-based compensation.
Three Months Ended
(in thousands, except per share amounts) 3/30/03 3/31/02
(unaudited)
Net (loss), as reported $(457) $(248)
Deduct: Total stock-based employee compensation expense determined
under
the fair value based method for all awards, net of
related tax benefit. (35) (23)
----------------
Pro forma net (loss) $(492) $(271)
================
Basic (loss) per share, as reported $(.11) $(.06)
================
Basic (loss) per share, pro forma $(.12) $(.07)
================
Diluted (loss) per share, as reported $(.11) $(.06)
================
Diluted (loss) per share, pro forma $(.12) $(.07)
================
3. Comprehensive Income (Loss):
During the three months ended March 30, 2003 and March 31, 2002, there were
no differences between comprehensive (loss) and net loss.
6
4. Receivables, net:
Receivables, net of allowances, consist of the following:
(in thousands) 3/30/03 12/31/02
(unaudited)
Accounts receivable, less allowance for doubtful accounts of $112 and $200 .. $ 1,147 $ 776
Refundable income taxes 1,621 1,375
Other 24 24
----------- ------------
$ 2,792 $ 2,175
=========== ============
5. Inventories, net:
Inventories, net of reserves, consist of the following:
(in thousands) 3/30/03 12/31/02
(unaudited)
Raw materials $ 1,216 $ 1,560
Work in process. 295 153
Finished goods 122 315
-------------- -----------
$ 1,633 $ 2,028
============== ===========
6. 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. This after-tax expense
of $45,000 is presented in the Consolidated Statements of Operations under the
caption "(Loss) from discontinued operations". For the three months ended March
30, 2003, $9,000 has been paid for the cleanup and accrued liabilities include
$116,000 for future payments. These costs represent the Company's best estimate,
but the ultimate costs will not be known until the remediation is complete.
7. Gain on Sale of Investment:
In the first quarter of 2002, the Company received $155,000 in cash and
reported this amount as a gain on sale of investment. This cash represented the
Company's share of the net escrow balance from the sale of its common stock
investment in Bergen Cable Technology, Inc. The Company sold this common stock
investment in 2000 and the gain recognized on the sale in 2000 did not include
its share of the sale escrow balance, less any claims for indemnity thereon, if
any.
7
8. (Loss) Per Share:
The computation of basic and diluted (loss) per share from continuing
operations is computed using the weighted average number of common shares
outstanding during the three months ended March 30, 2003 and March 31, 2002.
During the three months ended March 30, 2003 and March 31, 2002, 509,938 and
314,438, respectively of common shares issuable under stock options have not
been included in the computation of "Diluted (Loss) per Share" because of the
antidilutive effect of the options since the Company reported a loss from
continuing operations in these periods.
9. Recent accounting pronouncements
In August 2001, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards (SFAS) No. 143, "Accounting
for Asset Retirement Obligations", effective for years beginning after June 15,
2002. SFAS No. 143 addresses financial accounting and reporting for obligations
associated with the retirement of tangible long-lived assets and the associated
asset retirement costs. The Company adopted this SFAS effective January 1, 2003.
The adoption of this standard had no material effect on the Company's financial
position, results of operations and cash flows.
In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated With Exit or Disposal Activities," which addresses accounting for
restructuring and similar costs. SFAS No. 146 supersedes previous accounting
guidance, is effective for exit activities initiated after December 31, 2002,
and requires that the liability for costs associated with an exit or disposal
activity be recognized when the liability is incurred. SFAS No. 146 also
establishes that the liability should initially be measured and recorded at fair
value. Previous accounting guidance recognized a liability for an exit at the
date of a commitment to an exit plan. The Company adopted this SFAS effective
January 1, 2003. The adoption of this standard had no material effect on the
Company's financial position, results of operations and cash flows.
In November 2002, the FASB issued Interpretation No. (FIN) 45,
"Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others". The interpretation expands on
the accounting guidance of SFAS Nos. 5, 57, and 107 and incorporates without
change the provisions of FASB FIN 34, which is being superseded. FIN 45
elaborates on the existing disclosure requirements for most guarantees,
including loan guarantees, such as standby letter of credit. It also clarifies
that at the time a company issues a guarantee, the company must recognize an
initial liability for the fair value, or market value, of the obligations it
assumes under that guarantee and must disclose that information in its interim
and annual financial statements. FIN 45 is effective on a prospective basis to
guarantees issued or modified after December 31, 2002, regardless of the
guarantor's fiscal year-end. The disclosure requirements are effective for
interim or annual periods ending after December 15, 2002. The Company adopted
this FIN effective January 1, 2003. The adoption of this standard had no
material effect on the Company's financial position, results of operations and
cash flows.
In January 2003, the FASB issued FIN 46, "Consolidation of Variable
Interest Entities". Many variable interest entities have commonly been referred
to as special-purpose entities or off-balance sheet structures. Under the
interpretation, certain entities known as "Variable Interest Entities" (VIE)
must be consolidated by the primary beneficiary of an entity. The primary
beneficiary is generally defined as having the majority of the risks and rewards
arising from the VIE. For VIE's in which a significant (but not majority)
variable interest is held, certain disclosures are required. The consolidation
requirements of FIN 46 apply immediately to variable interest entities created
after January 31, 2003. The Company adopted this FIN effective January 31, 2003.
The adoption of this standard had no material effect on the Company's financial
position, results of operations and cash flows.
8
10. Subsequent Event:
On April 30, 2003, the Company announced the signing of an Asset
Purchase Agreement to acquire certain assets of MF Electronics Corp. (MFE),
located in New Rochelle, NY. MFE designs and manufactures a wide range of
frequency control products. The transaction is expected to close in 30 days. The
$650,000 cash purchase price, subject to closing adjustments, includes
inventories, machinery and equipment and the customer order backlog. In
addition, the Company will acquire for cash the net of the accounts receivable
less trade accounts payable at closing.
9
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.
Accounts receivable - The Company performs on-going credit evaluations of
its 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 when evaluating the adequacy of
the allowance for doubtful accounts.
Inventory - The Company estimates the carrying value of its inventory based
upon historic usage and management's assumptions relating to projected customer
purchases, product design changes and product obsolescence. The changing
technology markets that we supply also affect these estimates. If actual market
conditions are less favorable than those projected by management, additional
inventory write-downs may be required.
Income Taxes - The Company has recorded deferred tax assets and liabilities
resulting from differing treatment of items for tax and financial statement
reporting purposes. The Company must estimate its income tax valuation allowance
by assessing which deferred tax assets are more likely than not to be recovered
in the future. Based on our assessment of the realization of these assets, the
Company has recorded a valuation allowance of $700,000 at March 30, 2003. In
reaching our conclusion, we evaluated the existence of deferred tax liabilities
that can be used to absorb deferred tax assets, the deductibility of the
disposal of scrap and worthless inventory, taxable income in prior carryback
years and taxable income by jurisdiction in which we operate and the period over
which the deferred tax assets would be recoverable. In the event that actual
results differ from these estimates in future periods, the Company may need to
establish an additional valuation allowance or reduce the valuation allowance,
which could materially impact our financial position and results of operations.
Liquidity and Capital Resources
Cash and cash equivalents decreased $1,902,000 during the three
months ended March 30, 2003. During this period, the Company's continuing
operations used cash of $560,000, investing activities used cash of $28,000 and
financing activities used cash of $1,314,000.
The net loss of $457,000 and the increase in operating assets and
liabilities of $330,000, partially offset by the non-cash effect of depreciation
of $202,000 were the main reasons for the operations use of cash. The net
increase in working capital was mainly due to an increase in receivables of
$617,000 and a $60,000 reduction in accrued liabilities partially offset by a
$395,000 decrease in inventory. The increase in receivables was attributable to
a net increase in trade receivables of $371,000 and a $246,000 increase in
refundable income taxes. The increase in trade receivables resulted mainly from
the higher sales level over the previous quarter and an increase in the days
sales outstanding. The decrease in accrued liabilities is due
10
primarily to the payment of the 401(k) match. The 19% decrease in inventory
was mainly due to orders being filled from existing inventory and a continuing
control of inventory levels.
The Company used $1,277,000 of cash during the three months ended March 30,
2003 to pay-off the remaining balance on its term note.
While the Company is projecting a loss in 2003 based on the current
conditions in the telecom market, management believes that based on its current
working capital and the expected cash flows from operations, the Company's
resources are sufficient to meet its financial needs in 2003 including a
remaining capital expenditures budget of approximately $230,000.
Results of Operations
For the quarter ended March 30, 2003, net sales from continuing
operations decreased $642,000 or 27% from the comparable quarter in 2002. The
quarter ended March 31, 2002, net sales amount includes sales cancellation
charges of approximately $723,000 from two customers. Excluding the effect on
net sales from these sales cancellation charges, current quarter sales increased
$81,000 or 5% over the 2002 period. The book-to-bill ratio during the quarter
ended March 30, 2003 was 1.10 versus .98 during the quarter ended March 31,
2002. The Company's backlog amounted to $1.2 million at March 30, 2003 compared
to $1.3 million at March 31, 2002. Management believes that the market
conditions for our products, in particular those for the telecom market, have
not bottomed out, and our near-term visibility continues to be poor. The Company
continues to see customer orders for smaller quantities with near-term delivery
dates. Management is not sure of the potential impact on its future operations
from the current continuing telecom market uncertainties.
The Company reported $48,000 in gross profit (3%) in the current
quarter versus $163,000 in gross profit (7%) in the 2002 quarter. Without the
effect of the gross profit generated by the sales cancellation charge, the
Company would have reported a $54,000 gross loss on sales in the 2002 quarter.
During these periods raw material and direct labor costs, as a percentage of
sales remained fairly consistent. Overhead expenses decreased approximately 11%
from the 2002 level mainly as a result of lower personnel and supply expenses.
During the quarter ended March 30, 2003, selling and advertising
expenses increased $22,000 (6%) over the comparable period in 2002. Higher
personnel expense, offset in part by lower advertising and bad debt expense,
were the main reasons for the overall expense increase.
General and administrative expenses during the quarter ended March 30,
2003, increased $68,000 (22%) over 2002 mainly as a result of increased
personnel expense.
During the quarter ended March 30, 2003, interest income decreased
$8,000 from 2002 mainly due to as a result of lower cash balances and lower
interest rates during the current year. The $15,000 decrease in interest expense
from the 2002 amount is mainly due to the lower interest rate and to a lesser
extent the lower amount of outstanding debt. During the quarter ended March 31,
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.
The estimated effective federal and state income tax rate for 2003 is
34% compared to 40% in 2002. The difference in the rates is mainly due to the
Company providing a valuation allowance for the full amount of the state income
tax benefit in 2003 due to the uncertainty of realization.
11
For the quarter ended March 30, 2003, the Company reported an operating
loss of $700,000 compared to an operating loss of $495,000 in comparable quarter
of 2002 mainly as a result of the decrease in sales and gross margin and by
higher operating expenses. Nonoperating income amounted to $8,000 in 2003
compared to $156,000 in the corresponding 2002 period. As a result, the Company
reported a net loss from continuing operations of $457,000 during the quarter
ended March 30, 2003 compared to a net loss of $203,000 in 2002. Loss from
discontinued operations during the quarter ended March 31, 2002 amounted to
$45,000. In total, the Company reported a consolidated net loss of $457,000
during the quarter ended March 30, 2003 versus a consolidated net loss of
$248,000 in the comparable quarter of 2002.
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
March 30, 2003, 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 $38,600 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.
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 President and Chief Executive Officer 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
President and Chief Executive Officer 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.
12
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
On March 27, 2003, the Registrant filed a report on Form 8-K dated
March 27, 2003 reporting under Item 5. Other Events and Item
7.(c) Exhibits
13
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: May 12, 2003 By /s/ Michael J. Ferrantino
----------------------------
Michael J. Ferrantino,
President and Chief Executive Officer
Date: May 12, 2003 By /s/ Michael J. Kroll
-----------------------
Michael J. Kroll
Vice President, Treasurer and Chief Financial Officer
14
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Michael J. Ferrantino, 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 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 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 officer 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
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 officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: May 12, 2003 By /s/ Michael J. Ferrantino
----------------------------
Michael J. Ferrantino
President and Chief Executive Officer
15
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 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 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 officer 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
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 officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: May 12, 2003 By /s/ Michael J. Kroll
-----------------------
Michael J. Kroll
Vice President, Treasurer and Chief Financial Officer
16
Exhibit 99.1
Certification Pursuant to 18 U.S.C Section 1350, As Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report of Valpey-Fisher Corporation (the
Company) on Form 10-Q for the period ending March 30, 2003 as filed with the
Securities and Exchange Commission on the date hereof (the Report), I, Michael
J. Ferrantino, President and Chief Executive Officer of the Company, certify,
pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:
The Report fully complies with the requirements of section 13(a) or 15(d) of the
Securities Exchange Act of 1934; and
The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
Date: May 12, 2003 By /s/ Michael J. Ferratino
---------------------------
Michael J. Ferrantino,
President and Chief Executive Officer
A signed original of this written statement required by Section 906 has been
provided to the Company and will be retained by the Company and furnished to the
Securities and Exchange Commission or its staff upon request.
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Exhibit 99.2
Certification Pursuant to 18 U.S.C Section 1350, As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report of Valpey-Fisher Corporation (the
Company) on Form 10-Q for the period ending March 30, 2003 as filed with the
Securities and Exchange Commission on the date hereof (the Report), I, Michael
J. Kroll, Vice President, Treasurer and Chief Financial Officer of the Company,
certify, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that:
The Report fully complies with the requirements of section 13(a) or 15(d) of the
Securities Exchange Act of 1934; and
The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
Date: May 12, 2003 By /s/ Michael J. Kroll
-----------------------
Michael J. Kroll
Vice President, Treasurer and Chief Financial Officer
A signed original of this written statement required by Section 906 has been
provided to the Company and will be retained by the Company and furnished to the
Securities and Exchange Commission or its staff upon request.
18