UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 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 1-13792
Systemax Inc.(Exact name of registrant as specified in its charter)
11 Harbor Park DrivePort Washington, New York 11050(Address of registrant's principal executive offices)(516) 608-7000(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.
[X] Yes [ ] No
Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes [ ] No [X]
The number of shares outstanding of the registrant's Stock as of November 7, 2003 was 34,282,268.
PART I - FINANCIAL INFORMATIONItem 1. Financial Statements
Systemax Inc.Condensed Consolidated Balance Sheets(In Thousands, except share data)
September 30, December 31, 2003 2002 ------------- ------------ (Unaudited) ASSETS: CURRENT ASSETS: Cash and cash equivalents $45,481 $62,995 Accounts receivable, net 150,515 148,554 Inventories 111,154 98,401 Prepaid expenses and other current assets 30,421 31,343 Deferred income tax benefits 9,718 9,073 --------- --------- Total current assets 347,289 350,366 PROPERTY, PLANT AND EQUIPMENT, net 68,729 71,133 DEFERRED INCOME TAX BENEFITS 13,897 15,100 OTHER ASSETS 1,815 1,305 --------- --------- TOTAL $431,730 $437,904 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY: CURRENT LIABILITIES: Short-term borrowings, including current portions of long-term debt $15,730 $21,211 Accounts payable 131,095 131,510 Accrued expenses and other current liabilities 53,330 64,349 --------- --------- Total current liabilities 200,155 217,070 --------- --------- LONG-TERM DEBT 17,899 17,519 OTHER LIABILITIES 2,125 1,398 SHAREHOLDERS' EQUITY: Preferred stock, par value $.01 per share, authorized 25 million shares, issued none Common stock, par value $.01 per share, authorized 150 million shares, issued 38,231,990 shares; outstanding 34,278,953 and 34,104,290 shares 382 382 Additional paid-in capital 176,009 176,743 Accumulated other comprehensive income (loss) 1,108 (2,130) Retained earnings 80,489 75,411 --------- --------- 257,988 250,406 --------- --------- Less: common stock in treasury at cost - 3,953,037 and 4,127,700 shares 46,437 48,489 --------- --------- Total shareholders' equity 211,551 201,917 --------- --------- TOTAL $431,730 $437,904 ========= =========
See notes to condensed consolidated financial statements.
Systemax Inc.Condensed Consolidated Statements of Operations (Unaudited)(In Thousands, except per share amounts)
Nine Months Ended Three Months Ended September 30, September 30, --------------------------- --------------------------- 2003 2002 2003 2002 ------------ ------------- ------------- ------------ Net sales $1,220,270 $1,148,170 $405,011 $372,139 Cost of sales 1,017,156 949,657 337,900 309,413 ------------ ------------- ------------- ------------ Gross profit 203,114 198,513 67,111 62,726 Selling, general & administrative expenses 190,305 194,440 64,822 60,032 Restructuring and other expenses (1,160) 15,846 (1,272) 1,110 Goodwill impairment 2,560 ------------ ------------- ------------- ------------ Income (loss) from operations 11,409 (11,773) 3,561 1,584 Interest and other expense, net 1,075 921 542 681 ------------ ------------- ------------- ------------ Income (loss) before income taxes 10,334 (12,694) 3,019 903 Provision (benefit) for income taxes 5,256 (3,725) 1,112 1,630 ------------ ------------- ------------- ------------ Income (loss) before cumulative effect of change 5,078 (8,969) 1,907 (727) in accounting principle, net of tax Cumulative effect of change in accounting principle, net of tax (50,971) ------------ ------------- ------------- ------------ Net income (loss) $5,078 $(59,940) $1,907 $(727) ============ ============= ============= ============ Net income (loss) per common share, basic: Before cumulative effect of change in accounting principle, net of tax $.15 $(.26) $.06 $(.02) Cumulative effect of change in accounting principle, net of tax (1.50) ------------ ------------- ------------- ------------ Net income (loss) $.15 $(1.76) $.06 $(.02) ============ ============= ============= ============ Net income (loss) per common share, diluted: Before cumulative effect of change in accounting principle, net of tax $.15 $(.26) $.05 $(.02) Cumulative effect of change in accounting principle, net of tax (1.50) ------------ ------------- ------------- ------------ Net income (loss) $.15 $(1.76) $.05 $(.02) ============ ============= ============= ============ Weighted average common and common equivalent shares: Basic 34,124 34,104 34,159 34,104 ============ ============= ============= ============ Diluted 34,672 34,104 35,128 34,104 ============ ============= ============= ============
See notes to condensed consolidated financial statements
Systemax Inc.Condensed Consolidated Statement of Shareholders' Equity (Unaudited)(In Thousands)
Common Stock Accumulated ------------------- Other Additional Comprehensive Treasury Comprehensive Number of Paid-in Retained Income (Loss), Stock, Income, Shares Amount Capital Earnings Net of Tax At Cost Net of Tax ------------------- ----------- --------- -------------- ---------- ---------------- Balances January 1, 2003 34,104 $382 $176,743 $75,411 $(2,130) $(48,489) Exercise of stock options 175 (734) 2,052 Change in cumulative translation 3,238 $3,238 adjustment Net income 5,078 5,078 ------ ----- ------- ------- -------- -------- -------- Total comprehensive income $8,316 ======== Balances September 30, 2003 34,279 $382 $176,009 $80,489 $ 1,108 $(46,437) ====== ==== ======== ======= ======= =========
Systemax Inc.Condensed Consolidated Statements of Cash Flows (Unaudited)(In Thousands)
Nine Months Ended September 30, -------------------------------- 2003 2002 --------------- --------------- CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES: Net income (loss) $5,078 $(59,940) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Cumulative effect of change in accounting principle, net of tax 50,971 Goodwill impairment 2,560 Provision for deferred income taxes (1,941) (2,931) Depreciation and amortization 9,995 10,194 Provisions for returns and doubtful accounts 3,627 3,718 Loss on dispositions 132 14,280 Changes in certain assets and liabilities: Accounts receivable 764 (12,210) Inventories (10,509) 1,246 Prepaid expenses and other current assets 6,378 (12,031) Accounts payable, accrued expenses and other current liabilities (15,695) (6,146) --------------- --------------- Net cash provided by (used in) operating activities 389 (12,849) --------------- --------------- CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES: Investments in property, plant and equipment (6,597) (14,084) Proceeds from disposals of property, plant and equipment 90 434 Purchase of minority interest (2,560) --------------- --------------- Net cash used in investing activities (9,067) (13,650) --------------- --------------- CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES: Proceeds (repayments) of borrowings from banks (6,263) 19,044 Issuance of long-term borrowings and capital lease obligations 1,330 8,500 Repayments of long-term debt and capital lease obligations (938) Exercise of stock options 1,318 --------------- --------------- Net cash provided by (used in) financing activities (4,553) 27,544 --------------- --------------- EFFECTS OF EXCHANGE RATES ON CASH (4,283) 4,031 --------------- --------------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (17,514) 5,076 CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 62,995 36,464 --------------- --------------- CASH AND CASH EQUIVALENTS - END OF PERIOD $45,481 $41,540 =============== ===============
Systemax Inc.Notes to Condensed Consolidated Financial Statements (unaudited)
Nine Months Ended Sept. 30, Three Months Ended Sept. 30, --------------------------- ---------------------------- 2003 2002 2003 2002 ---- ---- ---- ---- 702,000 1,075,000 683,000 1,416,000
Nine Months Ended Three Months Ended September 30, September 30, ------------------- ------------------ 2003 2002 2003 2002 ---- ---- ---- ---- Net income (loss) - as reported $5,078 $(59,940) $1,907 $(727) Stock-based employee compensation expense determined under fair value based method, net of related tax effects 387 535 129 179 ------ -------- ------ ------ Pro forma net income (loss) $4,691 $(60,475) $1,778 $(906) ====== ======== ====== ====== Net income (loss) per common share: Basic: Net income (loss) - as reported $.15 $(1.76) $.06 $(.02) ====== ======== ====== ====== Net income (loss) - pro forma $.14 $(1.77) $.05 $(.03) ====== ======== ====== ====== Diluted: Net income (loss) - as reported $.15 $(1.76) $.05 $(.02) ====== ======== ====== ====== Net income (loss) - pro forma $.14 $(1.77) $.05 $(.03) ====== ======== ====== ======
2003 2002 ------ ----- Expected dividend yield 0% 0% Risk-free interest rate 5.0% 5.6% Expected volatility 68.0% 71.0% Expected life in years 2.42 2.52
Nine Months Ended Three Months Ended September 30, September 30, ------------------------ --------------------- 2003 2002 2003 2002 ---- ---- ---- ---- Net Sales (in thousands): North America $761,092 $712,728 $260,092 $228,124 Europe 459,178 435,442 144,919 144,015 ---------- ---------- -------- --------- Consolidated $1,220,270 $1,148,170 $405,011 $372,139 ========== ========== ======== =========
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Three Months Ended September 30, 2003 Compared to Three Months Ended September 30, 2002
Net sales for the three months ended September 30, 2003 were $405.0 million, an increase of 8.8% compared to $372.1 million in the year-ago quarter. North American sales increased 14.0%, to $260.1 million, from $228.1 million in the prior year. European sales increased 0.6% to $144.9 million (representing 35.8% of worldwide sales) compared to $144.0 million (38.7% of worldwide sales) in the year-ago quarter. Movements in foreign exchange rates positively impacted the European sales comparison by approximately $12.1 million in 2003. Excluding the movements in foreign exchange rates, European sales would have decreased 7.8% from the prior year. Sales in Europe continue to be adversely affected by weak local economies. North American sales benefited from increased sales to consumers, which were partially offset by decreased sales to corporate customers as a result of continued sluggish economic conditions.
Gross profit was $67.1 million, or 16.6% of net sales, compared to $62.7 million, or 16.9% of net sales, in the year-ago quarter, an increase of $4.4 million. As a result of adopting Emerging Issues Task Force (“EITF”) Issue No. 02-16, “Accounting by a Customer (Including a Reseller) for Certain Consideration Received from a Vendor”, $5.2 million of vendor consideration (in the form of rebates, co-op advertising support and similar arrangements) was recorded as a reduction of cost of sales in the third quarter of 2003. Excluding the impact of EITF 02-16, and therefore on a non-GAAP basis, the gross profit margin would have been 15.3% in the third quarter of 2003 compared to 16.9% in the prior year. This decline in gross profit was due to continued pricing pressure resulting from weak market demand and a change in the mix of products sold. The non-GAAP gross profit margin has been included here to provide comparability to the prior year.
Selling, general and administrative expenses for the quarter were $64.8 million, a $4.8 million increase from the third quarter of 2002. Reduced advertising expenses were offset by increased bad debt expense, increased European-based costs resulting from the effects of changes in foreign exchange rates and the $5.2 million effect of adopting EITF 02-16. As a percentage of net sales, selling, general and administrative expenses were 16.0% of sales (14.7% on a non-GAAP basis before the adoption of EITF 02-16) compared to 16.1% in the year-ago quarter.
In August 2003 the Company settled its litigation with a software developer and reversed a previously recorded liability of $1.3 million which was no longer required.
During 2002, in connection with the completion of construction of a new facility in the United Kingdom, the Company implemented a plan to consolidate the activities of its three United Kingdom locations into the new facility. The Company incurred $1.1 million of costs associated with the plan during the third quarter of 2002.
The Company had income from operations for the third quarter of 2003 of $3.6 million compared to $1.6 million in the third quarter of 2002. In North America, the Company had income from operations of $4.8 million in the current quarter compared $3.1 million last year. In Europe, the Company had a loss from operations of $1.2 million in the current quarter compared to a loss from operations of $1.5 million in the third quarter of 2002.
Interest and other expense - net consists principally of interest expense. Interest expense of $0.6 million for the current quarter was slightly lower than the $0.7 million in the third quarter of 2002.
For the third quarter of 2003, the income tax provision was $1.1 million, an effective rate of 36.8%. The income tax provision for the three months ended September 30, 2002 consisted of U.S. income taxes payable reduced by an income tax benefit for losses in certain foreign tax jurisdictions. The income tax provision in 2002 was greater than the income before tax as a result of estimated annual losses in certain tax jurisdictions for which the Company did not recognize a benefit for the tax loss carryforwards.
As a result of the above, net income for the third quarter was $1.9 million, or $.06 per basic and $.05 per diluted share, compared to a net loss of $727,000, or $.02 per basic and diluted share, in the third quarter of 2002.
Nine Months Ended September 30, 2003 Compared to Nine Months Ended September 30, 2002
Net sales for the nine months ended September 30, 2003 were $1.22 billion, an increase of 6.3% from $1.15 billion for the first nine months of 2002. North American sales were $761.1 million, a 6.8% increase from last year’s $712.7 million. European sales increased 5.5% to $459.2 million for the first nine months of 2003 (representing 37.6% of worldwide sales) compared to $435.4 million (representing 37.9% of worldwide sales) in the year-ago nine-month period. Movements in foreign exchange rates positively impacted European sales for the first nine months of 2003 by approximately $59.4 million. Excluding the movements in foreign exchange rates, European sales would have decreased 8.2% from the prior year. North American sales increased as a result of increased sales to consumer customers, which was partially offset by continued weakness in demand for information technology products from corporate customers. Lower demand in the Company’s European markets resulted in the decreased sales.
Gross profit was $203.1 million, or 16.6% of net sales, compared to $198.5 million, or 17.3% of net sales, in the year-ago period, an increase of $4.6 million. As a result of adopting EITF 02-16, $10.9 million of vendor consideration was recorded as a reduction of cost of sales in the first nine months of 2003. Excluding the impact of EITF 02-16, and therefore on a non-GAAP basis, the gross profit margin would have been 15.8% in the first nine months of 2003 compared to 17.3% in the first nine months of 2002. The decline in gross profit was due to continued pricing pressure resulting from weak market demand and changes in the mix of products sold. The non-GAAP gross profit margin has been included here to provide comparability to the prior year.
Selling, general and administrative expenses for the first nine months of 2003 were $190.3 million compared to $194.4 million in the first nine months of 2002, a decrease of $4.1 million or 2.1%. This decrease resulted from decreased television advertising expenses related to sales of the Company’s PCs, reductions in catalog spending and lower costs associated with e-commerce and information system applications. These decreases were partially offset by increased Europe-based costs resulting from the effects of changes in foreign exchange rates and the effects of the adoption of EITF 02-16, which resulted in the reclassification of $10.9 million of vendor consideration as a reduction of cost of sales, which would previously have been recorded as a reduction of advertising expense. As a percentage of sales, these expenses were 15.6% (14.7% on a non-GAAP basis before the adoption of EITF 02-16) compared to 16.9% in the year-ago period.
During the second quarter of 2003, the Company purchased the minority ownership of its Netherlands subsidiary for $2.6 million, pursuant to the terms of the original purchase agreement. All of the purchase price was attributable to goodwill and, as a result of an impairment analysis, was written off in accordance with Statement of Financial Accounting Standards 142, “Goodwill and Other Intangible Assets." During the second quarter of 2002 the Company recorded a non-recurring write-off of $13.2 million resulting from the Company’s decision to discontinue development of internal-use computer software. Also during 2002, in connection with the completion of construction of a new facility in the United Kingdom, the Company implemented a plan to consolidate the activities of its three United Kingdom locations into the new facility. The Company incurred $2.6 million of costs associated with the plan during the first nine months of 2002.
The Company had income from operations for the current nine month period of $11.4 million compared to a loss from operations of $11.8 million in the year-ago period. The Company had income from operations of $11.9 million in its North American operations in the current nine month period compared to a loss from operations of $13.6 million last year. In Europe, the Company had a loss from operations of $0.5 million, a decrease of $2.3 million from income from operations of $1.8 million recorded for the first nine months of 2002.
Interest and other expense - net consists principally of interest expense. Interest expense increased to $1.7 million in 2003 from $1.1 million in 2002 as a result of increased borrowings.
The provision for income taxes was $5.3 million for the first nine months of 2003 compared to a $3.7 million tax benefit for the first nine months of 2002. The effective tax rate was 50.9% for the first nine months of 2003 compared to an effective benefit rate of 29.3% for the first nine months of 2002. The effective income tax rate is based upon expected income or loss for the year and the expected composition of that income or loss in the countries in which the Company has operations. The effective tax rate for the first nine months of 2003 was adversely affected by the goodwill impairment write-off, which is not deductible for tax purposes.
During the first half of 2002, the Company completed the transitional review for goodwill impairment required by SFAS 142. The review indicated that the entire carrying value of the goodwill recorded on the Company’s Consolidated Balance Sheet was impaired as of January 1, 2002. Accordingly, the Company recorded a transitional impairment loss of $68 million ($51 million net of tax or a net loss per share of $1.50) as a cumulative effect of change in accounting principle in its Consolidated Statement of Operations for the year ended December 31, 2002.
As a result of the above, net income for the first nine months of 2003 was $5.1 million, or $.15 per basic and diluted share, compared to a net loss of $59.9 million, or $1.76 per basic and diluted share, in the year ago period.
Liquidity and Capital Resources
The Company's cash and cash equivalents totaled $45.5 million at September 30, 2003, a decrease of $17.5 million since December 31, 2002. For the nine months ended September 30, 2003, $0.4 million of cash was provided by operating activities compared to $12.8 million used in the year-ago period. In the first nine months of 2003, $9.1 million of cash was used in investing activities, principally for the purchase of property, plant and equipment ($6.6 million) and the acquisition of the minority interest in the Company’s Netherlands subsidiary ($2.6 million). In the first nine months of 2002, $13.7 million of cash was used in investing activities, primarily for the purchase of property, plant and equipment. Net cash of $4.6 million was used in financing activities in 2003, including $7.2 million used to repay short and long-term obligations, $1.3 million provided by the issuance of a capital lease and $1.3 million provided by the exercise of stock options. In the first nine months of 2002, $27.5 million of cash was provided by financing activities from short-term bank and mortgage borrowings.
The Company’s working capital at September 30, 2003 was $147 million, an increase of $14 million from $133 million at the end of 2002, due principally to a $13 million increase in inventories, a $2 million increase in accounts receivable, a $5 million decrease in amounts due to banks and an $11 million decrease in accounts payable and accrued expenses, offset by an $18 million decrease in cash.
Under the Company’s $70 million revolving credit agreement, which expires in June 2004, availability as of September 30, 2003 was $50.3 million. There were outstanding letters of credit of $7.6 million and there were no outstanding advances. The Company is currently in discussions with its lenders and expects to either extend the agreement for an additional year or enter into a new agreement. Under the Company’s £15 million ($24.9 million at the September 30, 2003 exchange rate) United Kingdom credit facility, there were £8.5 million ($14.2 million) of borrowings outstanding as of September 30, 2003.
In October 2003, the Company’s Netherlands subsidiary entered into a 5 million Euro credit facility. Borrowings under the facility will be secured by the subsidiary’s accounts receivable and will bear interest at the bank’s base rate plus 1.75%. The facility will expire two years from the date of the first advance.
The Company has certain obligations with various parties that include commitments to make future payments. The Company’s principal commitments at September 30, 2003 consisted of repayments of borrowings under its credit agreements and mortgages and obligations under operating leases for certain of its real property and equipment.
Off-balance Sheet Arrangements
The Company has not created, and is not party to, any special-purpose or off-balance sheet entities for the purpose of raising capital, incurring debt or operating the Company’s business. The Company does not have any arrangements or relationships with entities that are not consolidated into the financial statements that are reasonably likely to materially affect the Company’s liquidity or the availability of capital resources.
Forward Looking Statements - Factors That May Affect Future Results
This report contains forward looking statements within the meaning of that term in the Private Securities Litigation Reform Act of 1995 (Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934). Additional written or oral forward looking statements may be made by the Company from time to time, in filings with the Securities Exchange Commission or otherwise. Statements contained in this report that are not historical facts are forward looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward looking statements may include, but are not limited to, projections of revenue, income or loss and capital expenditures, statements regarding future operations, financing needs, compliance with financial covenants in loan agreements, plans for acquisition or sale of assets or businesses and consolidation of operations of newly acquired businesses, and plans relating to products or services of the Company, assessments of materiality, predictions of future events and the effects of pending and possible litigation, as well as assumptions relating to the foregoing. In addition, when used in this discussion, the words “anticipates”, “believes”, “estimates”, “expects”, “intends”, “plans” and variations thereof and similar expressions are intended to identify forward looking statements.
Forward looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified based on current expectations. Consequently, future events and results could differ materially from those set forth in, contemplated by, or underlying the forward looking statements contained in this report. Statements in this report, particularly in “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations”, and the Notes to Condensed Consolidated Financial Statements describe certain factors, among others, that could contribute to or cause such differences.
Some of the factors that may affect future results are discussed below.
Other factors that could contribute to or cause such differences include, but are not limited to, unanticipated developments in any one or more of the following areas: (i) the effect on the Company of volatility in the price of paper and periodic increases in postage rates, (ii) the operation of the Company's management information systems, (iii) significant changes in the computer products retail industry, especially relating to the distribution and sale of such products, (iv) timely availability of existing and new products, (v) risks involved with e-commerce, including possible loss of business and customer dissatisfaction if outages or other computer-related problems should preclude customer access to the Company, (vi) risks associated with delivery of merchandise to customers by utilizing common delivery services such as the United States Postal Service and United Parcel Service, including possible strikes and contamination, (vii) borrowing costs or availability, (viii) changes in taxes due to changes in the mix of U.S. and non-U.S. revenue, (ix) pending or threatened litigation and investigations and (x) the availability of key personnel, as well as other risk factors which may be detailed from time to time in the Company’s Securities and Exchange Commission filings.
Readers are cautioned not to place undue reliance on any forward looking statements contained in this report, which speak only as of the date of this report. The Company undertakes no obligation to publicly release the result of any revisions to these forward looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unexpected events.
Item 3. Quantitative and Qualitative Disclosure About Market Risk.
The Company is exposed to market risks, which include changes in U.S. and international interest rates as well as changes in currency exchange rates as measured against the U.S. dollar and each other.
The Company has limited involvement with derivative financial instruments and does not use them for trading purposes. Changes in currency exchange rates as measured against the U.S. dollar may positively or negatively affect Systemax’s sales, gross margins, operating expenses and retained earnings as expressed in U.S. dollars. The Company may enter into foreign currency options or forward exchange contracts aimed at limiting in part the impact of certain currency fluctuations, but as of September 30, 2003 the Company had no outstanding forward exchange contracts.
The Company’s exposure to market risk for changes in interest rates relates primarily to the Company’s variable rate debt. In connection with the Company’s United Kingdom term loan agreement, effective April 30, 2002 the Company entered into an interest rate collar agreement to reduce its exposure to market rate fluctuations. At September 30, 2003 the notional amount of the interest rate collar was £5.9 million ($9.9 million) with an interest rate cap of 6.0% and a floor of 4.5%. The interest rate collar expires on April 30, 2005.
Item 4. Controls and Procedures
As of the end of the period covered by this Report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s Disclosure Committee and senior management, including the Company’s 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 pursuant to Exchange Act Rule 13a-15(e). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer believe, as of the end of the period covered by this report, the Company’s disclosure controls and procedures provide reasonable assurances that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms.
The Company has not identified any changes in its internal controls over financial reporting during the quarter ended September 30, 2003 that have materially affected, or are reasonably likely to materially affect, its internal controls over financial reporting.
PART II - OTHER INFORMATION
Item 6. Exhibits
(a) Exhibits.
(b) Reports on Form 8-K.
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.