1
US SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended 9-30-03
( ) TRANSITION REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE EXCHANGE ACT
For the transition period from _________________ to __________________
Commission file number _______________2-97210-NY______________________
CVD EQUIPMENT CORPORATION
(Exact name of small business issuer as specified in its charter)
NEW YORK
(State or other jurisdiction of incorporation or organization)
11-2621692
(IRS Employer Identification Number)
1860 SMITHTOWN AVENUE, RONKONKOMA, NY 11779
(Address of principal executive offices)
631-981-7081
(Issuers Telephone Number)
(Former name, former address, and former fiscal year, if changed since
last report)
Check whether the issuer (1) filed all reports required to be filed by
section 13 or 15 (d) of the Exchange Act during the past 12 months (or for
such shorter periods 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 ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15 (d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court. Yes 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:
3,039,100 SHARES OF COMMON STOCK, $.01 PAR VALUE AS OF 11-12-03
2
CVD EQUIPMENT CORPORATION
NOTE TO FINANCIAL STATEMENTS
FOR THE QUARTER ENDING
SEPTEMBER 30, 2003
BASIS OF FINANCIAL STATEMENTS
The accompanying unaudited financial statements have been prepared in
accordance with the instructions to Form 10-QSB and Item 310(b) of
Regulation S-B and, therefore, do not include all information and footnotes
necessary for a complete presentation of financial position, results of
operations, cash flows, and stockholders' equity in conformity with
generally accepted accounting principles. In the opinion of management, all
adjustments considered necessary for a fair presentation of the results of
operations and financial position have been included and all such
adjustments are of a normal recurring nature. Operating results for the nine
months ended September 30, 2003 are not necessarily indicative of the
results that can be expected for the year ending December 31, 2003.
3
MANAGEMENT'S DISCUSSION
INTRODUCTION
Statements contained in this Report on Form 10-QSB that are not
historical facts are forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended, including
without limitation, statements regarding industry trends, strategic business
development, pursuit of new markets, competition, results from operations,
and are subject to the safe harbor provisions created by that statute. A
forward-looking statement may contain words such as "intends", "plans",
"anticipates", "believes", "expect to", or words of similar import.
Management cautions that forward-looking statements are subject to risks and
uncertainties that could cause the Company's actual results to differ
materially from those projected. These risks and uncertainties include, but
are not limited to, marketing success, product development, production,
technological difficulties, manufacturing costs, and changes in economic
conditions in the markets the Company serves. The Company undertakes no
obligation to release revisions to forward-looking statements to reflect
subsequent events, changed circumstances, or the occurrence of unanticipated
events.
FORWARD LOOKING STATEMENTS
Certain statements in this Management's Discussion and Analysis of
Financial Condition and Results of Operations constitute "forward looking
statements" within the meaning of the Private Securities Litigation Reform
Act of 1995. Such forward looking statements involve known and unknown
risks, uncertainties and other factors which may cause the actual results,
performance, or achievements of the Company to be materially different from
any future results, performance, or achievements expressed or implied by
such forward looking statements. These forward looking statements were
based on various factors and were derived utilizing numerous important
assumptions and other important factors that could cause actual results to
differ materially from those in the forward looking statements. Important
assumptions and other factors that could cause actual results to differ
materially from those in the forward looking statements, include, but are
not limited to: competition in the Company's existing and potential future
product lines of business; the Company's ability to obtain financing on
acceptable terms if and when needed; uncertainty as to the Company's future
profitability, uncertainty as to the future profitability of acquired
businesses or product lines, uncertainty as to any future expansion of the
Company. Other factors and assumptions not identified above were also
involved in the derivation of these forward looking statements, and the
failure of such assumptions to be realized as well as other factors may also
cause actual results to differ materially from those projected. The Company
assumes no obligation to update these forward looking statements to reflect
actual results, changes in assumptions or changes in other factors affecting
such forward looking statements.
4
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The Company considers certain accounting policies related to revenue
recognition and bad debts to be critical policies due to the estimation
processes involved in each.
Revenue recognition
The Company derives a significant portion of its revenue from fixed
contracts which require continuing estimations of cots to complete each job.
From time to time due to job conditions, job scheduling and productivity,
the cost to complete estimates are revised upward or downward which
correspondingly increases or decreases both estimated revenues and estimated
gross profit, and earned revenues and gross profits. The Company uses the
percentage of completion method to recognize revenue for certain projects.
When an estimate indicates a significant loss (i.e. estimated costs exceed
estimated revenues) the entire estimated loss is recognized in the Company's
results of operations. Any changes in estimated amounts, including contract
losses, could be material to the Company's results of operations in both
current and future periods, as jobs progress to completion.
Bad Debts
The Company records an allowance for uncollectible amounts based on a
review of the collectibility of its accounts receivable. Management
determines the adequacy of this allowance by analyzing historical bad debts,
continually evaluating individual customer's receivables and considering the
customer's financial condition and current economic conditions. If the
financial condition of the customers were to deteriorate, resulting in an
impairment of their ability to make payments, additional allowances could be
required.
There have been no changes in policies and procedures since the audited
financial statements for the year ended December 31, 2002.
CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures
Within 90 days prior to the filing of this yearly report on Form 10-
QSB, the Company's President and Chief Financial Officer evaluated the
effectiveness of the design and operation of the Company's disclosure
controls and procedures and concluded that the Company's disclosure controls
and procedures are effective to ensure that information require to be
disclosed by the Company in reports that it files or submits under the
Exchange Act is accumulated and communicated to the Company's management,
including its officers, as appropriate to allow timely decisions regarding
required disclosure, and are effective to ensure that such information is
recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's rules and forms.
(b) Changes in Internal Controls
The Company's President and Chief Financial Officer have also concluded
there were no significant changes in the Company's internal controls or in
the factors that could significantly affect these controls subsequent to the
date of their evaluation, including any corrective actions with regard to
significant deficiencies and material weakness.
5
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2003
REVENUE
An decrease in volume resulted in third quarter of 2003 revenue being
$2,092,803, a 27% decrease from third quarter of 2002 revenue of $2,865,581.
The decrease in revenue is mainly attributed to a decrease in shipments in
the Conceptronic division due to the system design improvements implemented
during the third quarter of 2003.
COSTS AND EXPENSES
The cost of revenue decreased to $1,374,686 in third quarter of 2003 as
compared to $1,857,195 in third quarter of 2002. Of this $482,509 decrease,
approximately $294,000 is attributed to material, $8,000 to freight in,
$97,000 to salaries and $14,000 to travel expense. The decrease in material
and freight in is mainly associated with the decrease in revenue. The
decrease in salaries is mainly due to a decrease in staff.
Selling and shipping expenses decreased to $163,339 in third quarter of 2003
from $257,223 in third quarter of 2002. Of this $93,884 decrease,
approximately $49,000 is attributed to commissions, $21,000 to salaries,
$12,000 to royalties and $9,000 to travel expense. The decrease in
commissions and royalties is mainly associated with the decrease in revenue.
The decrease in salaries is mainly due to a decrease in staff.
General and Administrative expenses decreased to $620,529 in third quarter
of 2003 from $674,827 in third quarter of 2002. Of this $54,298 decrease,
approximately $54,000 is attributed to salaries. The decrease in salaries is
mainly due to a decrease in staff.
Interest expense increased to $59,889 in third quarter of 2003 from $29,303
in third quarter of 2002. The increase of $30,586, is mainly attributed to
an increase in the Company's average outstanding debt, as a result of the
mortgage on the new building purchased in March 2002.
Other income decreased to $14,655 in third quarter of 2003 from $382,197 in
third quarter of 2002. This decrease, is mainly attributed to collection of
accounts receivable exceeding the $369,000 booked as part of the purchase of
the assets on June 17, 2002.
CONTINGENCIES
The Company did not renew its product liability insurance on August 11, 2003
due to a significant increase in premium and in light of our historic
experience of not sustaining product liability claims of any consequence.
The Company will reinstate product liability insurance when it is determined
to be cost effective to do so.
6
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2003
REVENUE
An increase in volume resulted in nine months of 2003 revenue being
$7,744,394, a 21% increase from nine months of 2002 revenue of $6,396,813.
The increase in revenue is mainly attributed to shipments delayed from the
fourth quarter of 2002 to the first quarter of 2003. This delay resulted
from the reduction in productivity of the CVD and Conceptronic division due
to their relocation to the new facility in the fourth quarter of 2002.
COSTS AND EXPENSES
The cost of revenue increased to $5,899,250 in nine months of 2003 as
compared to $4,408,446 in nine months of 2002. Of this $1,490,804 increase,
approximately $1,120,000 is attributed to material, $233,000 to salaries,
$20,000 to utilities and $56,000 to real estate taxes. The increase in
material is mainly associated with the increase in revenue. The increase in
salaries is mainly due to an increase in additional staff for the
Conceptronic division, which was offset by a decrease in the CVD and SDC
division. The increase in utilities and real estate taxes is mainly due to
the new facility.
Selling and shipping expenses decreased to $589,254 in nine months of 2003
from $634,756 in nine months of 2002. Of this $45,502 decrease,
approximately $33,000 is attributed to salaries. The decrease in salaries is
mainly due to a decrease in staff for the SDC division, which was offset by
an increase in additional staff for the Conceptronic division.
General and Administrative expenses increased to $1,746,942 in nine months
of 2003 from $1,696,089 in nine months of 2002. Of this $50,853 increase,
approximately $81,000 is attributed to salaries, $8,000 to real estate
taxes, which was offset by a decrease of $46,000 to legal fees. The increase
in salaries is mainly related to an increase in additional staff for the
Conceptronic division, which was offset by a decrease in staff for the SDC
and CVD division. The increase in real estate taxes is mainly due to the new
facility.
Interest expense increased to $183,651 in nine months of 2003 from $77,224
in nine months of 2002. This increase of $106,427, is mainly attributed to
an increase in the Company's average outstanding debt, as a result of the
mortgage on the new building purchased in March 2002.
Other income decreased to $278,585 in nine months of 2003 from $404,682 in
nine months of 2002. Of this $126,097 decrease, $267,000 is attributed to
collection of accounts receivable exceeding the $369,000 booked as part of
the purchase of the assets, which is offset by an increase of $150,000
attributed to an insurance reimbursement for legal fees.
7
LIQUIDITY AND CAPITAL RESOURCES
By the end of the third quarter of 2003, the Company's cash position
decreased to $244,648 from $323,537 at the beginning of the year. The
decrease in cash is mainly attributed to the daily operating activities.
At the end of the third quarter of 2003, the Company's account receivable
position increased to $2,025,315 from $ 1,852,794 at the beginning of the
year. This increase was attributable to timing of customer payments and
billings.
At the close of the third quarter of 2003, the Company's backlog decreased
to approximately $2,118,671. This represents the amount of orders not billed
or taken as part of the percentage of completion. This backlog has decreased
from approximately $3,816,877 at the beginning of the year. This decrease is
mainly attributed to a decrease in new orders and to shipments delayed from
the fourth quarter of 2002 to the first quarter of 2003. This delay resulted
from the reduction in productivity of the CVD and Conceptronic divisions due
to their relocation to the new facility in the fourth quarter of 2002. The
$2,118,671 backlog is actively being worked on.
The Company has a line of credit facility with a bank which allows the
Company to borrow up to $750,000 until June 1, 2004. Interest is payable on
any unpaid principal balance at the bank's prime rate plus _ of 1%. As of
September 30, 2003, $536,000 was outstanding on this facility. The Company
has an additional $250,000 credit line that is being utilized to secure a
letter of credit. Borrowings are collateralized by the Company's assets.
The Company believes that its cash, cash equivalents and available credit
facilities will be sufficient to meet its working capital and investment
requirements for the next twelve months. However, future growth, including
potential acquisitions, may require additional funding, and from time to
time the Company may need to raise capital through additional equity or debt
financing.
8
CVD EQUIPMENT CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30 DECEMBER 31
2003 2002
(UNAUDITED) (AUDITED)
------------ ------------
ASSETS
Current Assets
Cash and cash equivalents $ 244,648 $ 323,537
Accounts receivable, net 2,025,315 1,852,794
Cost in excess of billings on ucompleted contracts 1,192,634 783,646
Inventories 1,566,950 2,023,487
Other current assets 89,386 194,232
------------ ------------
Total Current Assets 5,118,933 5,177,696
Property, Plant and Equipment, net 5,456,257 5,630,375
Deferred Income Taxes 280,166 344,074
Other Assets 158,362 138,974
Intangible Assets, net 126,330 136,393
------------ ------------
Total Assets $ 11,140,048 $ 11,427,512
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 756,361 $ 938,056
Accrued expenses 583,169 336,702
Billings in excess of costs on uncompleted contracts 133,321 146,387
Short-term notes payable - 350,000
Short-term borrowings 536,000 -
Current maturities of long-term debt 185,608 177,124
------------ ------------
Total Current Liabilities 2,194,459 1,948,269
Long-term Debt, net of current portion 3,373,496 3,513,783
------------ ------------
Total Liabilities 5,567,955 5,462,052
------------ ------------
Commitments and Contingencies
Stockholders' Equity
Common stock - $0.01 par value -10,000,000 shares authorized;
3,039,100 shares issued & outstanding 30,391 30,391
Additional paid-in capital 2,902,149 2,902,149
Retained earnings 2,639,553 3,032,920
------------ ------------
Total Stockholders' Equity 5,572,093 5,965,460
------------ ------------
Total Liabilities and Stockho $ 11,140,048 $ 11,427,512
============ ============
9
CVD EQUIPMENT CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
2003 2002 2003 2002
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
-------------- -------------- -------------- --------------
Revenue
Revenue on completed contracts $ 1,818,249 $ 2,411,683 $ 5,789,773 $ 5,522,346
Revenue on uncompleted contracts 274,554 453,898 1,954,621 874,467
-------------- -------------- -------------- --------------
Total Revenue 2,092,803 2,865,581 7,744,394 6,396,813
-------------- -------------- -------------- --------------
Costs of Revenue
Cost on completed contracts 1,187,164 1,660,095 4,669,633 3,983,049
Cost on uncompleted contracts 187,522 197,100 1,229,617 425,397
-------------- -------------- -------------- --------------
Total Costs of Revenues 1,374,686 1,857,195 5,899,250 4,408,446
-------------- -------------- -------------- --------------
Gross Profit 718,117 1,008,386 1,845,144 1,988,367
-------------- -------------- -------------- --------------
Operating Expenses
Selling and shipping 163,339 257,223 589,254 634,756
General and administrative 620,529 674,827 1,746,942 1,696,089
-------------- -------------- -------------- --------------
Total Operating Expenses 783,868 932,050 2,336,196 2,330,845
-------------- -------------- -------------- --------------
Operating Income(Loss) (65,751) 76,336 (491,052) (342,478)
-------------- -------------- -------------- --------------
Other Income (Expense)
Interest income 661 3,103 895 22,647
Interest expense (59,889) (29,303) (183,651) (77,224)
Gain on sale of fixed assets - - - 2,500
Other income 14,655 382,197 278,585 404,682
-------------- -------------- -------------- --------------
Total Other Income(Loss) (44,573) 355,997 95,829 352,605
-------------- -------------- -------------- --------------
Income(Loss) Before Taxes (110,324) 432,333 (395,223) 10,127
Income Tax Provision (Benefit) 1,853 (32,582) 1,853 (32,573)
-------------- -------------- -------------- --------------
Net Income(Loss) (108,471) 399,751 (393,370) (22,446)
-------------- -------------- -------------- --------------
Earnings Per Share
Basic $ (0.04) $ 0.13 $ (0.13) $ (0.01)
Diluted $ (0.04) $ 0.13 $ (0.13) $ (0.01)
Weighted Average Shares
Basic 3,039,100 3,037,991 3,039,100 3,035,676
Diluted 3,062,620 3,095,426 3,051,933 3,184,794
10
CVD EQUIPMENT CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
2003 2002 2003 2002
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
-------------- -------------- -------------- --------------
CASH Flows from Operating Activities
Net Income(Loss) $ (108,471) $ 399,751 $ (393,370) $ (22,446)
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Deferred Tax (benefit) provision 63,908 - 63,908 -
Depreciation and amortization 90,546 79,740 270,696 216,857
Gain on sale of fixed assets - - - (2,500)
Bad debt provision 7,924 (8,027) 9,282 (13,098)
(Increase) decrease in:
Accounts receivable (339,854) 608,608 (181,804) 236,758
Cost in excess of billings on uncompleted contracts (49,226) (369,482) (408,988) (87,311)
Inventory (49,100) (147,162) 456,538 (1,028,006)
Other current assets 122,770 (36,917) 104,846 (142,667)
Other assets (901) (13,388) (49,700) 151,660
Increase (decrease) in:
Accounts payable (401,673) (31,489) (181,692) 510,929
Accrued expenses 387,444 (170,829) 246,468 (27,294)
Billing in excess of costs on uncompleted contracts 133,321 (2,904) (13,066) -
-------------- -------------- -------------- --------------
Net cash provided by (used in (143,312) 307,901 (76,882) (207,118)
Cash Flows from Investing Activities
Capital expenditures (7,176) (429,447) (56,205) (3,730,039)
Proceeds from sale of fixed assets - - - 2,500
-------------- -------------- -------------- --------------
Net cash provided by (used in (7,176) (429,447) (56,205) (3,727,539)
-------------- -------------- -------------- --------------
Cash Flows from Financing Activities
Proceeds from the exercise of options - 1,500 - 9,801
Proceeds of short-term borrowings 561,000 650,000 876,000 650,000
Payments of short-term borrowings (375,000) - (690,000) -
Proceeds of long-term debt - - - 1,593,750
Payments of long-term debt (44,620) (33,527) (131,802) (82,743)
-------------- -------------- -------------- --------------
Net cash provided by (used 141,380 617,973 54,198 2,170,808
-------------- -------------- -------------- --------------
Net increase(decrease) in cas (9,108) 496,427 (78,889) (1,763,849)
Cash and cash equivalents at 253,756 100,874 323,537 2,361,150
-------------- -------------- -------------- --------------
Cash and cash equivalents at $ 244,648 $ 597,301 $ 244,648 $ 597,301
============== ============== ============== ==============
11
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) 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, this
12th day of November, 2003.
CVD EQUIPMENT CORPORATION
By: /s/ Leonard A. Rosenbaum
Leonard A. Rosenbaum
President, Chief Executive Officer and Director
Pursuant to the requirements of the Securities and Exchange Act of 1934,
this report signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
/s/ Leonard A. Rosenbaum President, Chief Executive Officer and Director
Leonard A. Rosenbaum
/s/ Sharon Canese Chief Financial Officer and Secretary
Sharon Canese
12
Certifications Pursuant to Rule 13A-14 or 15D-14 of the Securities exchange
act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
I, Leonard A. Rosenbaum, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of CVD Equipment
Corporation;
2. Based upon 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 upon 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 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 the registrants' board of directors (or persons performing the
equivalent functions):
a. All significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weakness 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.
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.
Dated: November 12, 2003
/s/ Leonard A. Rosenbaum
----------------------------------------
President, Chief Executive Officer and Director
13
Certifications Pursuant to Rule 13A-14 or 15D-14 of the Securities exchange
act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
I, Sharon Canese, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of CVD Equipment
Corporation;
2. Based upon 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 upon 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 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 the registrants' board of directors (or persons performing the
equivalent functions):
a. All significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weakness 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.
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.
Dated: November 12, 2003
/s/ Sharon Canese
----------------------------------------
Chief Financial Officer and Secretary