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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
For Quarter End March 31, 2003 Commission file number: 0-17824
REXHALL INDUSTRIES, INC.
(Exact name of Registrant as specified in its charter)
California 95-4135907
(State of Incorporation) (IRS Employer Identification No.)
46147 7th Street West, Lancaster, California 93534
(Address of principal executive offices) (Zip Code)
(661) 726-0565
(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
--- ---
Applicable only to Corporate Issuers
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 5,912,700 as of April 25, 2003.
-------------------------------
1
REXHALL INDUSTRIES, INC.
INDEX
-----
PART I - FINANCIAL INFORMATION PAGE NUMBER
Item 1.
-------
Condensed Consolidated Financial Statements (Unaudited): 3
Condensed Consolidated Balance Sheets at March 31, 2003
and December 31, 2002 3
Condensed Consolidated Statements of Operations for the
three months ended March 31, 2003 and March 31, 2002 (Restated) 4
Condensed Consolidated Statements of Cash Flows for the
three months ended March 31, 2003 and March 31, 2002 (Restated) 5
Notes to Condensed Consolidated Financial Statements 6-7
Item 2.
-------
Management's Discussion and Analysis of Financial Condition
and Results of Operations 7-11
Item 3.
-------
Quantitative and Qualitative Disclosure about Market Risks 11
Item 4.
-------
Controls and Procedures 11
PART II - OTHER INFORMATION
Repurchase Agreements 11
Legal Proceedings 12
Item 5.
-------
Reports on Form 8K 12
Signatures 13
Certifications 14-15
2
PART I - FINANCIAL INFORMATION
---------------------
Item 1. - Condensed Consolidated Financial Statements
- -------
REXHALL INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
March 31, 2003 December 31, 2002
-------------- -----------------
ASSETS
CURRENT ASSETS
Cash $ 5,021,000 $ 5,757,000
Accounts Receivables, net 2,409,000 2,251,000
Income Tax Receivable 360,000 360,000
Inventories (Note 2) 15,056,000 15,049,000
Deferred Income Taxes (Note 3) 850,000 1,003,000
Other Current Assets 250,000 139,000
Current Assets of Discontinued Operations 182,000 182,000
----------- -----------
TOTAL CURRENT ASSETS 24,128,000 24,741,000
Property and Equipment at Cost Net
of Accumulated Depreciation (Notes 2 & 7) 5,841,000 5,021,000
Property Held for Sale --- ---
Other Assets 152,000 152,000
Non-Current Assets of Discontinued Operations 37,000 37,000
----------- -----------
TOTAL ASSETS $30,158,000 $29,951,000
=========== ===========
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ 3,674,000 $ 1,622,000
Chassis Vendor Line of Credit 2,032,000 3,381,000
Notes Payable and Current Portion
of Long-Term Debt 36,000 36,000
Accrued Warranty 1,008,000 991,000
Accrued Legal 1,018,000 1,250,000
Accrued Dealer Incentives 527,000 638,000
Other Accrued Liabilities 1,565,000 1,750,000
Accrued Compensation and Benefits 499,000 472,000
Current Liabilities of Discontinued Operations 20,000 20,000
----------- -----------
TOTAL CURRENT LIABILITIES 10,379,000 10,160,000
Long-Term Debt, less Current Portion 926,000 634,000
----------- -----------
TOTAL LIABILITIES 11,305,000 10,794,000
----------- -----------
STOCKHOLDERS' EQUITY
Preferred Stock - no par value,
Authorized, 1,000,000 shares;
No shares outstanding at March 31, 2003
and December 31, 2002 --- ---
Common Stock - no par value,
Authorized, 10,000,000 shares;
issued and outstanding
5,912,700 at March 31, 2003
and 6,038,000 at December 31, 2002 5,659,000 5,906,000
Retained Earnings 13,194,000 13,251,000
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 18,853,000 19,157,000
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $30,158,000 $29,951,000
=========== ===========
See accompanying notes to condensed consolidated financial statements
3
REXHALL INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended
March 31, 2003 March 31, 2002
-------------- --------------
(RESTATED)
Net Revenues $12,946,000 $17,407,000
Cost of Sales 11,344,000 16,084,000
------------ -----------
Gross Profit 1,602,000 1,323,000
Operating Expenses:
Selling, General, Administrative Expenses
and Other Expenses 1,691,000 1,741,000
------------ -----------
Income (Loss) from Continuing Operations
before Income Taxes (89,000) (418,000)
Income Tax Expense (Benefit) (32,000) (165,000)
------------ -----------
Income (Loss) from Continuing Operations (57,000) (253,000)
Loss from Discontinued Operations --- ---
Net Income (Loss) ($ 57,000) ($ 253,000)
============= ============
Basic and Diluted Income (Loss)
from Continuing Operations - Per Share ($ .01) ($ .04)
Basic and Diluted Loss
from Discontinued Operations - Per Share ($ .00) ($ .00)
------------ -----------
Basic and Diluted Income (Loss) - Per Share (Note 5) ($ .01) ($ .04)
============= ============
Weighted Average Shares Outstanding
Basic and Diluted (Note 4) 5,997,700 6,115,000
============= ============
See accompanying notes to condensed consolidated financial statements
4
REXHALL INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months Ended
March 31, 2003 March 31, 2002
-------------- --------------
(Restated)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (Loss) (57,000) ($ 253,000)
Adjustments to reconcile net income (loss)
to net cash provided by (used in)
Operating Activities:
Net loss from discontinued operations --- ---
Depreciation and amortization 90,000 95,000
Gain on sale of property, plant and equipment --- (34,000)
Provision for deferred income taxes --- ---
(Increase) decrease in:
Accounts receivable (158,000) (2,291,000)
Inventories (7,000) 1,650,000
Income tax receivable --- (165,000)
Increase (decrease) in:
Accounts payable 2,052,000 (60,000)
Accrued Warranty 17,000 118,000
Accrued legal (232,000) (81,000)
Accrued dealer incentives (111,000) (38,000)
Other assets and liabilities (116,000) 743,000
----------- -----------
Net cash provided by (used in) operating activities 1,478,000 (316,000)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment (910,000) (129,000)
Proceeds from sale of property and equipment --- 159,000
----------- -----------
Net cash provided by (used in) investing activities (910,000) 30,000
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments on long-term debt (9,000) (9,000)
Repayments on short-term notes --- (105,000)
Repayments on line of credit (1,349,000) (2,859,000)
Proceeds from redevelopment agency 300,000 ---
Proceeds from loan receivable on exercise of stock options --- 3,000
Repurchase and retirement of stock (247,000) ---
----------- -----------
Net cash used in financing activities (1,305,000) (2,970,000)
----------- -----------
NET CASH FLOWS FROM DISCONTINUED OPERATIONS --- 130,000
NET INCREASE (DECREASE) IN CASH (737,000) (3,126,000)
BEGINNING CASH BALANCE 5,757,000 8,662,000
----------- -----------
ENDING CASH BALANCE $5,020,000 $5,536,000
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid during the period $ 52,000 $ 18,000
See accompanying notes to condensed consolidated financial statements
5
REXHALL INDUSTRIES, INC.
Notes to the Condensed Consolidated Financial Statements
March 31, 2003 and 2002
1. Basis of Presentation
The accompanying unaudited Condensed Consolidated Financial Statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America for interim financial information and with the
instructions to Form 10-Q. Accordingly, they do not include all of the
information and disclosures required by generally accepted accounting principles
for complete financial statements. However, in the opinion of management, they
include all adjustments, consisting of normal accruals, necessary to present
fairly the information set forth herein in accordance with accounting principles
generally accepted in the United States of America for interim reporting.
For further information refer to the Financial Statements and footnotes included
in the Registrant's Annual Report on Form 10-K for the year ended December 31,
2002.
The results of operations for any interim period are not necessarily indicative
of the results to be expected for the full year.
2. Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
Significant estimates include the valuation of inventory at the lower of cost or
market, the allowance for doubtful accounts, deferred income tax asset valuation
allowances, and the valuation of the company's long lived assets. Considerable
management judgment is necessary to estimate these and other amounts.
Accordingly, actual results could vary significantly from management estimates.
3. Income Taxes
Income tax expense is based upon the estimated effective tax rate for the entire
fiscal year. The effective tax rate is subject to on going evaluation by
management.
4. Stock Split
In July of 2002 the Company carried out a 2-for-1 split. All historical share
and per share data are presented on a post-split basis.
5. Earnings Per Share
Basic earnings per share represent net earnings divided by the weighted-average
number of common shares outstanding for the period. Basic and diluted earnings
per share are the same for all periods presented as the company has no
potentially dilutive securities outstanding.
6
6. Inventory
March 31, 2003 March 31, 2002
-------------- --------------
(RESTATED)
Raw Materials $ 8,561,000 $ 4,635,000
Work-in-Progress 2,253,000 2,111,000
Finished Goods 4,255,000 4,150,000
------------ ------------
Total $15,069,000 $10,896,000
=========== ===========
7. Property & Equipment
In January 2003, the Company completed the purchase of 12.48 acres of land
adjacent to its headquarters in Lancaster, California. The Company paid $564,448
in cash and issued a promissory note for $300,000, for a total of $864,448. The
agreement with the City of Lancaster will allow the promissory note to be
forgiven in total or in part based upon a formula for providing jobs. The
Company plans to build a new facility on this land so that it can produce its
own diesel chassis with a new motorhome concept to be built on that chassis.
Item 2. - Management Discussion and Analysis of Financial Condition and Results
- ------- of Operations.
All statements in this discussion and analysis which relate to future sales,
costs, capital expenditures or earnings are "Forward-Looking Statements" and
should be read subject to the assumptions contained in the section
"Forward-Looking Statements".
Critical Accounting Policies
- ----------------------------
In the ordinary course of business, management has made a number of estimates
and assumptions relating to the reporting of results of operations and financial
condition in the preparation of its financial statements in conformity with
accounting principles generally accepted in the United States of America. Actual
results could differ significantly from those estimates under different
assumptions and conditions. Management believes that the following discussion
addresses our most critical accounting policies, which are those that are most
important to the portrayal of our financial condition and results and require
the most difficult, subjective and complex judgments, often as a result of the
need to make estimates about the effect of matters that are inherently
uncertain.
Valuation of Inventory
The Company values inventories at the lower-of-cost or market using the
first-in, first-out (FIFO) method. Adjustments to the value of inventory are
recorded based upon damage, deterioration, obsolescence and changes in market
value. In determining market value, management has considered its current
replacement cost ensuring it does not exceed net realizable value (i.e.,
estimated selling price in the ordinary course of business less estimated costs
of completion and disposal). Management has evaluated the current level of
inventories considering the order backlog and other factors in assessing
estimated selling prices and made adjustments to cost of goods sold for
estimated decrease in the net realizable value of inventory. These adjustments
are estimates, which could vary significantly, either favorably or unfavorably,
from actual results.
8
Revenue Recognition
The Company derives revenue primarily from the sale of motorhomes to dealers
across the United States. Revenue is recognized when title of the motorhome
transfers to the dealer. This generally occurs upon shipment. Most dealers have
floor plan financing arrangements with banks or other financing institutions
under which the lender advances all, or substantially all, of the purchase price
of the motorhome. The loan is collateralized by a lien on the purchased
motorhome. As is customary in the industry, the Company has entered into
repurchase agreements with these lenders. In general, the repurchase agreements
provide that in the event of default by the dealer on its agreement to the
lending institution, the Company will repurchase the financed motorhome.
Revenues are shown net of repurchases. The Company specifically reserves the
gross margin for known repurchase obligations quarterly and at fiscal year end.
Revenues are also generated from the service of motorhomes and from shipment or
installation of parts and accessories.
Legal Accrual
The Company's current estimated range of liability related to some of the
pending litigation is accrued based on claims for which it is probable that a
liability has been incurred and the amount of the loss can be reasonably
estimated. Because of the uncertainties related to both the amount and range of
loss on the remaining pending litigation, management is unable to make a
reasonable estimate of the liability that could result from an unfavorable
outcome. As additional information becomes available, management will assess the
potential liability related to the pending litigation and revise the estimates.
Such revisions in the estimates of the potential liability could materially
impact the results of operation and financial position.
Results of Operations
- ---------------------
Comparison of the three months ended March 31, 2003 to the three months ended
March 31, 2002.
Revenues - 2003 compared with 2002
- ----------------------------------
Net revenues from continuing operations for the first quarter ended March 31,
2003 were $12,946,000 as compared to $17,407,000 for the first quarter in 2002.
This represents a 26% decrease from the prior year. Net units sold for the
quarter ended March 31, 2003 were 152 compared to 216 for the quarter ended
March 31, 2002, a 30% decrease. The decrease in net revenues is primarily
attributed to the failure of the Company to secure new retail dealers for the
product line and lagging sales in the gas unit product.
Gross Profit - 2003 compared with 2002
- --------------------------------------
Gross profit from continuing operations increased to $1,602,000 from $1,323,000
for the same quarter in 2002, which is an increase of $279,000 or 21%. Gross
margin was 12.4% in 2003 as compared to 7.6% in 2002. The increase in gross
margin was primarily attributable to decreases in labor and material costs for
the period. Management views this increased margin as a positive sign, but there
are no assurances due to the uncertain direction of the RV industry fundamentals
and competition within the industry.
9
Selling, General, Administrative and Other Expenses - 2003 compared with 2002
- -----------------------------------------------------------------------------
Selling, General, Administrative and Other Expenses from continuing operations
decreased by approximately $50,000 from the first quarter of 2002 to the first
quarter of 2003. Selling, general, administrative and other expenses increased
to 13.1% as a percentage of sales when compared to 10.0% for the quarter ended
March 31, 2002. The increase is primarily related to continued increases in
warranty expense.
Income Taxes - 2003 compared to 2002
- ------------------------------------
Income tax benefit from continuing operations was $32,000 for the quarter ended
March 31, 2003 as compared to income tax benefit of $165,000 in the first
quarter of 2002. Income taxes are provided based upon the estimated effective
tax rate for the entire fiscal year applied to the pre-tax income for the
period. The effective tax rate is subject to ongoing evaluation by management.
Financial Condition, Capital Resources and Liquidity
- ----------------------------------------------------
The Company has relied primarily on internally generated funds, trade credit and
debt to finance its operations and expansions. As of March 31, 2003, the Company
had working capital of $13,749,000, compared to $14,580,000 at December 31,
2002. The $831,000 decrease in working capital is primarily due to a $736,000
decrease in cash and $703,000 increase in accounts payable partially offset by a
$484,000 decrease in accrued liabilities.
Capital expenditures during the first quarter of 2003 were $910,000. This number
includes the property purchased in Note 7. Management anticipates lower levels
of capital expenditures for the remaining quarters of 2002 related to efficiency
improvement initiatives and refurbishment of the production facilities and
related production equipment. Significant increases are expected to be incurred
when the Company begins construction of the new facility, which is anticipated
in the fourth quarter of this year.
As of March 31, 2003 the Company has a $2,500,000 line of credit with a bank
that can be used for working capital purposes secured by equipment, inventory
and receivables. The interest rate is the prime rate (4.25% at March 31, 2003).
The line expires on September 27, 2003. Under this line of credit, $711,000 has
been set aside as an irrevocable standby letter of credit for the Company to
meet the requirements for self-insurance established by the Department of
Industrial Relations which regulates worker's compensation insurance in
California. At March 31, 2003, no amounts were outstanding under the line of
credit agreement. The line of credit contains various covenants. The Company was
in compliance with such covenants as of March 31, 2003.
The Company has a line of credit with a chassis vendor, Ford Motor Credit
Company ("FMCC"), with a $5,000,000 limit. Borrowings under the line bear
interest at an annual rate of prime plus 1% (5.25% at March 31, 2003). All
borrowings are secured by the Ford merchandise. The outstanding balance at March
31, 2003 was $2,032,000.
The Company anticipates that it will be able to satisfy its ongoing cash
requirements through 2003, including payments related to the expansion plans at
the California facility, primarily with cash flows from operations,
supplemented, if necessary, by borrowings under its revolving credit agreement.
10
New Accounting Pronouncements
In April 2002, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 145 (SFAS No. 145), Rescission
of FASB Statements No. 4, 44, and 64, Amendment of FASB No. 13 and Technical
Corrections. The Statement rescinds SFAS No. 4, Reporting Gains and Losses from
Extinguishment of Debt, which required all gains and losses from extinguishment
of debt to be aggregated and classified as an extraordinary item (net of related
income tax effect), if material. The criteria in APB Opinion No. 30 will now be
used to classify those gains and losses. Also SFAS No. 64 amended SFAS No. 4 and
is no longer necessary because of this rescission.
In July 2002, the FASB issued Statement No. 146, Accounting for Exit or Disposal
Activities. The Statement was the second and final phase of the project to
replace SFAS No. 121 and focuses on the accounting for costs associated with a
disposal activity. The first phase was completed in August 2001 with SFAS No.
144, Accounting for the Impairment or Disposal of Long-Lived Assets. The
Statement will be effective for disposal activities initiated after December 31,
2002, with early application encouraged.
In October 2002, the FASB issued Statement No. 147, Acquisitions of Certain
Financial Institution. The Statement applies to all acquisitions except those
between mutual enterprises (which will be a separate project). The guidance
related to (1) the application of the purchase method of accounting, is
effective for acquisitions for which the date of acquisition is on or after
October 1, 2002 and (2) accounting for the impairment or disposal of certain
long-term customer-relationship intangible assets is effective on October 1,
2002.
In November 2002, the FASB issued Interpretation No. 45 (FIN 45), Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others. FIN 45 clarifies the requirements of SFAS
No. 5, Accounting for Contingencies, relating to a guarantor's accounting for,
and disclosure of, the issuance of certain types of guarantees. For certain
guarantees issued after December 31, 2002, FIN 45 requires a guarantor to
recognize, upon issuance of a guarantee, a liability for the fair value of the
obligations it assumes under the guarantee. Guarantees issued prior to January
1, 2003, are not subject to liability recognition, but are subject to expanded
disclosure requirements. The disclosure requirements of FIN 45 are effective
immediately and are included in Note 7. The initial recognition and measurement
provisions are applicable on a prospective basis to guarantees issued or
modified after December 31, 2002. The Company has not yet determined what
effect, if any, the new recognition and measurement provisions will have on the
Company's future financial results.
In December 2002, the FASB issued Statement of Financial Accounting Standards
No. 148 (SFAS No. 148), amending FASB Statement No. 123, Accounting for
Stock-Based Compensation, to provide alternative methods of transition for a
voluntary change to the fair value based method of accounting for stock-based
employee compensation. In addition, this Statement amends the disclosure
requirements of Statement 123 to require prominent disclosures in both annual
and interim financial statements about the method of accounting for stock-based
employee compensation and the effect of the method used on reported results.
The Company is required to adopt SFAS No. 143 and 146 on January 1, 2003.
However, the new pronouncements are not expected to have an effect on the
Company's financial position or operating performance.
11
Forward-Looking Statements
- --------------------------
Our statements of our intentions or expectations are "forward-looking
statements" based on assumptions and on facts known to us today. Those
assumptions will become less valid over time, but we do not intend to update
this report. Rexhall's business is seasonal and cyclical. Recent reports of
decreased consumer confidence may reduce future sales. Most of Rexhall's
competitors are substantially larger, and many of its suppliers and dealers have
greater economic power, so that the volume and prices of both supplies and sales
may be adversely affected by competitive action. The effect of restating the
Company's financial position and results of operations may be adverse for
shareholders, including possible delisting of the shares, which will seriously
limit the marketability of shares and may negatively affect the company's
business. Management intends to remain aware of these factors and react to them,
but cannot predict their timing or significance.
Item 3. - Quantitative and Qualitative Disclosure About Market Risk
- ------- -
In the ordinary course of its business, the Company is exposed to certain market
risks, including changes in interest rates. After an assessment of these risks
to the Company's operations, the Company believes that its primary market risk
exposures relating to interest rates (within the meaning of Regulation S-K Item
305) are not material and are not expected to have any material adverse effect
on the Company's financial condition, results of operations or cash flows for
the next fiscal year.
Item 4. - Controls and Procedures
- -------
Within 90 days prior to the date of this report, we carried out an evaluation,
under the supervision and with the participation of our principal executive
officer and principal financial officer, of the effectiveness of the design and
operation of our disclosure controls and procedures. Based on this evaluation,
our principal executive officer and principal financial officer concluded that
our disclosure controls and procedures are effective in timely alerting them to
material information required to be included in our periodic SEC reports. It
should be noted that the design of any system of controls is based in part upon
certain assumptions about the likelihood of future events, and there can be no
assurance that any design will succeed in achieving its stated goals under all
potential future conditions, regardless of how remote.
In addition, we reviewed our internal controls, and there have been no
significant changes in our internal controls or in other factors that could
significantly affect those controls subsequent to the date of their last
evaluation.
PART II - OTHER INFORMATION
-----------------
Repurchase Agreements - Motorhomes purchased by dealers, under financing
agreements with third party lenders are subject to repurchase by the Company
under the terms of the financing, at dealer cost and might include unpaid
interest and other costs in the event of default by the dealer. During the three
months ended March 31, 2003 and 2002, the Company repurchased approximately
$528,000 and $1,266,000 respectively, (wholesale value) of motorhomes under
these agreements. At March 31, 2003 and 2002, approximately $26,950,000 and
$26,400,000, respectively, of dealer inventory was covered by repurchase
agreements. Dealers do not have the contractual right to return motorhomes under
any Rexhall Dealer Agreement. The repurchase agreements require the dealers to
default or file for bankruptcy. There are also a number of state statutes that
require the repurchasing of motorhomes whenever a dealership is terminated.
12
Legal Proceedings - The Company is a defendant in various legal proceedings from
the normal course of business. In the opinion of Company management, the
resolution of such matters should not have a material effect on its financial
statements or results of operations.
The Company has been contacted by the staff of the Securities and Exchange
Commission, which has indicated that it is specifically reviewing the facts
leading up to the Company's restatement of its results of operations for the
first quarter ended March 31, 2002 and generally the accounting procedures and
controls for the Company. The Company is cooperating fully with the staff's
review and hopes to resolve the review in the near future.
Item 5. - Reports on Form 8K
- -------
Dated January 8, 2003: Company disclosed changes in certifying accountant and
Financial Statements & Exhibits.
Dated March 7, 2003: Company disclosed that Beckman Kirkland & Whitney (BKW)
would serve as its new independent public accountants.
REXHALL INDUSTRIES, INC.
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.
Rexhall Industries, Incorporated
(Registrant)
By /S/ William J. Rex
---------------------------------- -----------------------------------------
(Signature and Title)
William J. Rex, President, CEO, Chairman
& Acting CFO
Date: May 14, 2003
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant in capacities and on the dates
indicated.
By /S/ William J. Rex
- ------------------------------------ -----------------------------------------
(Signature and Title)*
William J. Rex
President, CEO & Acting CFO
Chairman of the Board
Date: May 14, 2003
By /S/ Robert A. Lopez
- ----------------------------------- -----------------------------------------
(Signature and Title)*
Robert A. Lopez
Director
Date: May 14, 2003
By /S/ Frank A. Visco
- ------------------------------------ -----------------------------------------
(Signature and Title)*
Frank A. Visco
Director
Date: May 14, 2003
By /S/ Dr. Dennis K. Ostrom
- -------------------------------- -----------------------------------------
(Signature and Title)*
Dr. Dennis K. Ostrom
Director
Date: May 14, 2003
13
CERTIFICATIONS
I, William Rex, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Rexhall
Industries, Inc.;
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 could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether 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 14, 2003
--------------------------------------------------
William Rex
President, Chief Executive Officer, and Acting CFO
14
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 Annual Report of Rexhall Industries, Inc. (the
"Company") on Form 10-Q for the quarter ended March 31, 2003 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), each of
the undersigned, in the capacities and on and on the dates indicated below,
hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his
knowledge:
1. The Report fully complies with the requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
REXHALL INDUSTRIES, INC.
By:
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May 14, 2003 William J. Rex
President and Chief Executive Officer, and Acting CFO