-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KlBHcsLzKaMeDFLJbeLnNdrTCBOAP4401BptsOuuCCE8+PC04JYTfXZAkoT6Oaqw zZGARMeAFLPlRbtgWluuGA== 0001116502-03-001439.txt : 20030811 0001116502-03-001439.hdr.sgml : 20030811 20030811155431 ACCESSION NUMBER: 0001116502-03-001439 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20030628 FILED AS OF DATE: 20030811 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DECORATOR INDUSTRIES INC CENTRAL INDEX KEY: 0000027613 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS FABRICATED TEXTILE PRODUCTS [2390] IRS NUMBER: 251001433 STATE OF INCORPORATION: PA FISCAL YEAR END: 0102 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07753 FILM NUMBER: 03834606 BUSINESS ADDRESS: STREET 1: 10011 PINES BLVD SUITE 201 CITY: PEMBROKE PINES STATE: FL ZIP: 33024 BUSINESS PHONE: 3054368909 10-Q 1 decortor-10q.txt QUARTERLY REPORT SECURITIES AND EXCHANGE COMMISSION Washington, 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 June 28, 2003 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 1-7753 DECORATOR INDUSTRIES, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Pennsylvania 25-1001433 ------------ ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 10011 Pines Blvd., Suite #201, Pembroke Pines, Florida 33024 - ------------------------------------------------------ ----- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (954) 436-8909 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Title of each class Outstanding at August 8, 2003 ------------------- ----------------------------- Common Stock, Par Value $.20 Per Share 2,794,880 PART I - FINANCIAL INFORMATION Item 1. Financial Statements. - ------- --------------------- DECORATOR INDUSTRIES, INC BALANCE SHEETS
ASSETS June 28, December 28, 2003 2002 ----------- ----------- (UNAUDITED) CURRENT ASSETS: Cash and Cash Equivalents $ 3,626,412 $ 2,117,762 Accounts Receivable, less allowance for doubtful accounts ($223,869 and $202,933) 4,341,699 3,414,629 Inventories 4,038,626 4,388,070 Other Current Assets 306,006 419,620 ----------- ----------- TOTAL CURRENT ASSETS 12,312,743 10,340,081 ----------- ----------- Property and Equipment Land, Buildings & Improvements 5,048,858 5,043,458 Machinery, Equipment, Furniture & Fixtures 5,855,754 5,585,401 ----------- ----------- Total Property and Equipment 10,904,612 10,628,859 Less: Accumulated Depreciation and Amortization 4,880,568 4,640,040 ----------- ----------- Net Property and Equipment 6,024,044 5,988,819 ----------- ----------- Goodwill, less accumulated Amortization of $1,348,569 2,731,717 2,731,717 Other Assets 500,514 419,517 ----------- ----------- TOTAL ASSETS $21,569,018 $19,480,134 =========== =========== LIABILITIES & STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts Payable $ 3,077,945 $ 2,059,871 Current Maturities of Long-term Debt 170,109 126,750 Accrued Expenses: Income taxes 106,742 -- Compensation 757,038 856,786 Other 891,049 1,105,646 ----------- ----------- TOTAL CURRENT LIABILITIES 5,002,883 4,149,053 ----------- ----------- Long-Term Debt 2,011,736 1,477,973 Deferred Income Taxes 548,000 505,000 ----------- ----------- TOTAL LIABILITIES 7,562,619 6,132,026 ----------- ----------- Stockholders' Equity Common Stock $.20 par value: Authorized shares, 10,000,000; Issued shares, 4,485,728 897,146 897,127 Paid-in Capital 1,426,121 1,425,826 Retained Earnings 19,988,275 19,349,984 ----------- ----------- 22,311,542 21,672,937 Less: Treasury stock, at cost: 1,690,848 and 1,694,856 shares 8,305,143 8,324,829 ----------- ----------- TOTAL STOCKHOLDERS' EQUITY 14,006,399 13,348,108 ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $21,569,018 $19,480,134 =========== ===========
The accompanying notes are an integral part of the financial statements. 1 DECORATOR INDUSTRIES, INC STATEMENTS OF EARNINGS (UNAUDITED)
For the Thirteen Weeks Ended For the Twenty-Six Weeks Ended ---------------------------- ------------------------------ June 28, 2003 June 29, 2002 June 28, 2003 June 29, 2002 ------------- ------------- -------------- ------------- Net Sales $ 10,767,015 100.00% $ 10,363,395 100.00% $ 20,546,768 100.00% $ 19,281,528 100.00% Cost of Products Sold 8,316,549 77.24% 7,917,272 76.40% 16,026,250 78.00% 14,930,671 77.44% ------------- ------------- -------------- ------------- Gross Profit 2,450,466 22.76% 2,446,123 23.60% 4,520,518 22.00% 4,350,857 22.56% Selling and Administrative Expenses 1,640,167 15.23% 1,607,431 15.51% 3,200,891 15.58% 3,011,949 15.62% ------------- ------------- -------------- ------------- Operating Income 810,299 7.53% 838,692 8.09% 1,319,627 6.42% 1,338,908 6.94% Other Income (Expense) Interest and Investment Income 14,254 0.13% 12,410 0.12% 23,735 0.12% 25,105 0.13% Interest Expense (1,625) -0.02% (7,080) -0.07% (5,559) -0.03% (14,850) -0.08% ------------- ------------- -------------- ------------- Earnings Before Income Taxes 822,928 7.64% 844,022 8.14% 1,337,803 6.51% 1,349,163 7.00% Provision for Income Taxes 325,000 3.02% 335,000 3.23% 532,000 2.59% 535,000 2.77% ------------- ------------- -------------- ------------- NET INCOME $ $ 497,928 4.62% $ 509,022 4.91% $ 805,803 3.92% $ 814,163 4.22% ============= ============= ============== ============= EARNINGS PER SHARE BASIC $ 0.18 $ 0.18 $ 0.29 $ 0.29 ============= ============= ============== ============= DILUTED $ 0.18 $ 0.18 $ 0.29 $ 0.29 ============= ============= ============== ============= Weighted Average Number of Shares Outstanding Basic 2,793,229 2,787,800 2,792,228 2,800,313 Diluted 2,796,524 2,845,348 2,802,086 2,832,971
The accompanying notes are an integral part of the financial statements. 2 DECORATOR INDUSTRIES, INC STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Twenty-six Weeks Ended ------------------------------ June 28, 2003 June 29, 2002 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $ 805,803 $ 814,163 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities Depreciation and Amortization 350,305 323,344 Provision for Losses on Accounts Receivable 20,000 33,131 Deferred Taxes 38,000 16,000 Loss on Disposal of Assets 10,767 19 Increase (Decrease) from Changes in: Accounts Receivable (947,070) (817,817) Inventories 349,444 (426,897) Prepaid Expenses (23,384) (39,190) Other Assets (80,997) (1,858) Accounts Payable 1,018,074 1,379,826 Accrued Expenses (65,605) 333,342 ----------- ----------- NET CASH PROVIDED BY OPERATING ACTIVITIES 1,475,337 1,614,063 ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital Expenditures (397,197) (384,302) Proceeds from Property Dispositions 900 150 ----------- ----------- NET CASH USED IN INVESTING ACTIVITIES (396,297) (384,152) ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Long-term Debt Payments (62,878) (52,381) Dividend Payments (167,512) (167,885) Issuance of Stock for Directors Trust 20,000 20,000 Proceeds on Debt from Building 640,000 -- Purchase of Common Stock for Treasury -- (210,376) ----------- ----------- NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 429,610 (410,642) Net Increase in Cash and Cash Equivalents 1,508,650 819,269 Cash and Cash Equivalents at Beginning of Year 2,117,762 2,319,568 ----------- ----------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 3,626,412 $ 3,138,837 =========== =========== Supplemental Disclosures of Cash Flow Information: Cash Paid for: Interest $ 12,898 $ 16,575 Income Taxes $ 245,259 $ 267,425
The accompanying notes are an integral part of the financial statements. 3 DECORATOR INDUSTRIES, INC. NOTES TO FINANCIAL STATEMENTS TWENTY-SIX WEEKS ENDED JUNE 28, 2003 AND JUNE 29, 2002 (UNAUDITED) NOTE 1. In the opinion of management, the accompanying unaudited financial statements contain all adjustments necessary to present fairly the Company's financial position as of June 28, 2003, the changes therein for the twenty-six week period then ended and the results of operations for the twenty-six week periods ended June 28, 2003 and June 29, 2002. NOTE 2. The financial statements included in the Form 10-Q are presented in accordance with the requirements of the form and do not include all of the disclosures required by accounting principles generally accepted in the United States of America. For additional information, reference is made to the Company's annual report on Form 10-K for the year ended December 28, 2002. The results of operations for the twenty-six week periods ended June 28, 2003 and June 29, 2002 are not necessarily indicative of operating results for the full year. NOTE 3. INVENTORIES ----------- Inventories at June 28, 2003 and December 28, 2002 consisted of the following: June 28, 2003 December 28, 2002 ------------- ----------------- Raw Material and supplies $3,593,742 $3,944,768 In Process and Finished Goods 444,884 443,302 ---------- ---------- Total Inventory $4,038,626 $4,388,070 ========== ========== NOTE 4. EARNINGS PER SHARE ------------------ Basic earnings per share is computed by dividing net income by weighted-average number of shares outstanding. Diluted earnings per share includes the dilutive effect of stock options. In accordance with SFAS No. 128, the following is a reconciliation of the numerators and denominators of the basic and diluted EPS computations. 4 DECORATOR INDUSTRIES, INC. NOTES TO FINANCIAL STATEMENTS TWENTY-SIX WEEKS ENDED JUNE 28, 2003 AND JUNE 29, 2002 (UNAUDITED)
For the Thirteen Weeks Ended For the Twenty-Six Weeks Ended June 28, 2003 June 29, 2002 June 28, 2003 June 29, 2002 ------------- ------------- ------------- ------------- Numerator: Net income $ 497,928 $ 509,022 $ 805,803 $ 814,163 ========== ========== ========== ========== Denominator: Weighted-average number of common shares outstanding 2,793,229 2,787,800 2,792,228 2,800,313 Dilutive effect of stock options on net income 3,295 57,548 9,858 32,658 ---------- ---------- ---------- ---------- 2,796,524 2,845,348 2,802,086 2,832,971 ========== ========== ========== ========== Diluted earnings per share: $ 0.18 $ 0.18 $ 0.29 $ 0.29 ========== ========== ========== ==========
NOTE 5. COMMITMENTS ----------- On July 29, 2003, the Company extended the employment agreement with its President (the "Employee") through December 31, 2007. As of January 1, 2008, the Employee shall be employed as a consultant for a period of five years terminating on December 31, 2012. For further information see Exhibit 10T.1 to this Form 10-Q. 5 Item 2. Management's Discussion and Analysis of Financial Condition and - ------- --------------------------------------------------------------- Results of Operations. ---------------------- CAUTIONARY STATEMENT: THIS QUARTERLY REPORT ON FORM 10-Q MAY CONTAIN STATEMENTS RELATING TO FUTURE EVENTS, INCLUDING RESULTS OF OPERATIONS, THAT ARE CONSIDERED "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. FORWARD-LOOKING STATEMENTS REPRESENT THE COMPANY'S EXPECTATIONS OR BELIEF AS TO FUTURE EVENTS AND, BY THEIR VERY NATURE, ARE SUBJECT TO RISKS AND UNCERTAINTIES WHICH MAY RESULT IN ACTUAL EVENTS DIFFERING MATERIALLY FROM THOSE ANTICIPATED. IN PARTICULAR, FUTURE OPERATING RESULTS AND FUTURE LIQUIDITY WILL BE AFFECTED BY THE LEVEL OF DEMAND FOR RECREATIONAL VEHICLES, MANUFACTURED HOUSING AND HOTEL/MOTEL ACCOMMODATIONS AND MAY BE AFFECTED BY CHANGES IN ECONOMIC CONDITIONS, INTEREST RATE FLUCTUATIONS, COMPETITIVE PRODUCTS AND PRICING PRESSURES WITHIN THE COMPANY'S MARKETS, THE COMPANY'S ABILITY TO CONTAIN ITS MANUFACTURING COSTS AND EXPENSES, AND OTHER FACTORS. FORWARD-LOOKING STATEMENTS BY THE COMPANY SPEAK ONLY AS OF THE DATE MADE, AND THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE OR REVISE SUCH STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER SUCH DATE OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS. FINANCIAL CONDITION - ------------------- The Company's financial condition, as measured by the following ratios, continues to be strong at the end of the Second Quarter 2003. June 28, 2003 December 28, 2002 -------------- ----------------- Current Ratio 2.46 2.49 Quick Ratio 1.65 1.43 LT Debt to Total Capital 12.56% 9.97% Working Capital $7,309,860 $6,191,028 Days sales outstanding in accounts receivable were 35.8 days at June 28, 2003 compared to 37.1 days at June 29, 2002 At June 28, 2003, net accounts receivable increased by 0.7% and inventories decreased by 4.2% compared to the balance at June 29, 2002. Cash increased by $1,508,650 for the first half of fiscal 2003. Management does not foresee any events which will adversely affect its liquidity during 2003. At the quarter end, the Company had no borrowings against its $5,000,000 revolving line of credit. During the quarter ended June 28, 2003, the Company received proceeds of $640,000 from a borrowing secured by a mortgage on its Elkhart, Indiana facility. The borrowing is at a fixed annual rate of 4.39%, with a 5 year term and a 15 year amortization. The proceeds are intended to finance an addition to this building. With the available borrowing capacity and the Company's cash balances, the financial condition is more than adequate to finance internal growth and the acquisitions of businesses. 6 Item 2. Management's Discussion and Analysis of Financial Condition and - ------- --------------------------------------------------------------- Results of Operations. (continued) ---------------------------------- RESULTS OF OPERATIONS - --------------------- The following tables show the percentage relationship to net sales of certain items in the Company's Statements of Earnings:
Second Second Quarter Quarter YTD YTD Earnings Ratios 2003 2002 2003 2002 --------------- ------------ ------------ ------------ ------------ Net sales 100.0% 100.0% 100.0% 100.0% Cost of products sold 77.24 76.40 78.00 77.44 Selling and administrative 15.23 15.51 15.58 15.62 Interest and investment income (0.13) (0.12) (0.12) (0.13) Interest expense 0.02 0.07 0.03 0.08 Income taxes 3.02 3.23 2.59 2.77 Net income 4.62 4.91 3.92 4.22
THIRTEEN WEEK PERIOD ENDED JUNE 28, 2003, (SECOND QUARTER 2003) COMPARED TO THIRTEEN WEEK PERIOD ENDED JUNE 29, 2002, (SECOND QUARTER 2002) - --------------------------------------------------------------- Net sales for the Second Quarter 2003 were $10,767,015, compared to $10,363,395 for the same period in the previous year, a 3.9% increase. The Company experienced increased sales in the recreational vehicle market, while sales decreased in the manufactured housing market. Cost of products sold increased to 77.2% in the Second Quarter 2003 compared to 76.4% a year ago, due to a negative impact from product mix and higher labor costs. Selling and administrative expenses were $1,640,167 in the Second Quarter 2003 versus $1,607,431 in the Second Quarter 2002. This increase resulted primarily from charges related to the ongoing implementation of an Enterprise-Resource-Planning system. Interest expense decreased to $1,625 in the Second Quarter 2003 from $7,080 in the Second Quarter 2002 because of lower interest rates. Net income decreased slightly to $497,928 in the Second Quarter of 2003 compared to $509,022 in the Second Quarter of 2002. This decrease is largely the result of increased administrative expenses, partially offset by increased sales. Net income per diluted share remained unchanged at $0.18 for the quarter. TWENTY-SIX WEEK PERIOD ENDED JUNE 28, 2003, (FIRST SIX MONTHS 2003) COMPARED TO TWENTY-SIX WEEK PERIOD ENDED JUNE 29, 2002, (FIRST SIX MONTHS 2002) - ------------------------------------------------------------------- Net sales for the First Six Months 2003 were $20,546,768, compared to $19,281,528 for the same period in the previous year, a 6.6% increase. The Company experienced increased sales in the recreational vehicle market, while sales decreased in the manufactured housing market. The Manufactured Housing (MH) Institute indicated that industry wide shipments declined about 26% in the first six months of this year. The 7 Company's sales to MH customers declined about 18%. The Recreational Vehicle (RV) Industry Association reported that for the first six months of this year travel trailer shipments increased about 12% while shipments of motor homes were almost flat compared to a year ago. Our sales to RV customers increased about 21%. Hospitality sales were comparable to last year's sales. Cost of products sold increased to 78.0% in the First Six Months 2003 compared to 77.4% a year ago, due to a negative impact from product mix and higher labor costs. Selling and administrative expenses were $3,200,891 in the First Six Months 2003 versus $3,011,949 in the First Six Months 2002. This increase resulted from higher accruals for performance bonuses and charges related to the ongoing implementation of an Enterprise-Resource-Planning system. Interest expense decreased to $5,559 in the First Six Months 2003 from $14,850 in the First Six Months 2002 because of reduced borrowings and lower interest rates. Net income decreased slightly to $805,803 in the First Six Months of 2003, compared to $814,163 in the First Six Months of 2002. This decrease is largely the result of increased administrative expenses, partially offset by increased sales. Net income per diluted share remained unchanged at $0.29 for the six months. Item 3. Controls and Procedures. - ------- ------------------------ (a) The Company's Chief Executive Officer and Chief Financial Officer have reviewed the effectiveness of the Company's disclosure controls and procedures as defined in Exchange Act Rules 13a-14(c) and 15d-14(c) within 90 days of the date of this report. These officers have concluded that the Company's disclosure controls and procedures were adequate and effective to ensure that material information relating to the financial statements has been disclosed. (b) There were no significant changes in the Company's internal controls or in other factors that could significantly affect the Company's internal controls and procedures subsequent to the review date, nor any significant deficiencies or material weaknesses in such internal controls and procedures requiring corrective actions. PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K. - ------- --------------------------------- (a) Exhibits filed herewith: 10T.1 - Amendment dated July 29, 2003 to Employment Agreement between the registrant and William Bassett 31.1 - Certification of President 31.2 - Certification of Treasurer 32 - Certificate required by 18 U.S.C.ss.1350. (b) No reports on Form 8-K were filed by the Company during the quarterly period ended June 28, 2003. 8 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. DECORATOR INDUSTRIES, INC. (Registrant) Date: August 8, 2003 By: /s/ William A. Bassett ------------------------------ William A. Bassett, President Date: August 8, 2003 By: /s/ Michael K. Solomon ------------------------------ Michael K. Solomon, Treasurer 9 EX-10.T.1 3 bassetemployment.txt BASSETT EMPLOYMENT AGREEMENT Exhiit 10T.1 AMENDMENT TO EMPLOYMENT AGREEMENT MADE AND ENTERED INTO this 29th day of July, 2003, by and between DECORATOR INDUSTRIES, INC., a Pennsylvania corporation, with offices at Suite 201, 10011 Pines Boulevard, Pembroke Pines, Florida 33024 (hereinafter called "Decorator" or "Employer") and WILLIAM BASSETT, residing at 1167 N.W. 97th Drive, Coral Springs, Florida 33071 (hereinafter called the "Employee"). W I T NE S S E T H: WHEREAS, the parties hereto entered into an employment agreement dated August 2, 1994 (hereinafter called the "Employment Agreement"); and WHEREAS, the parties desire to amend the Employment Agreement as hereinafter provided. NOW, THEREFORE, in consideration of the mutual covenants, promises, warranties and agreements hereinafter set forth, the parties, intending to be legally bound hereby, each for themselves and their respective heirs, successors and assigns, covenant, warrant, promise and agree as follows: 1. The term set forth in paragraph 1 of the Employment Agreement is extended to December 31, 2007 (hereinafter the "1st Term"). Commencing January 1, 2008, for a period of five (5) years terminating December 31, 2012, the Employee shall be employed as an employee/consultant and adviser to devote such time and perform such duties requested by the Board of Directors as he deems reasonably necessary for the benefit of the Employer (hereinafter the "2nd Term"). Included in Employee's duties during the 2nd Term shall be assistance and advice to his successor; search for acquisitions; and as reasonably requested by the Board of Directors, negotiate the terms of such purchase and aid in the due diligence in connection therewith, and review financial reports of the Employer. 2. Paragraph 3 of the Employment Agreement pertaining to compensation is deleted in its entirety and the following paragraphs are agreed upon, adopted and inserted in lieu thereof: "3. Compensation During the 1st Term. The Employee shall receive remuneration for his services during the 1st Term at an annual base salary of at least Three Hundred Thirty-Six Thousand Dollars ($336,000) per annum, payable not less frequently than in equal monthly installments commencing January 1, 2003. The Employee will be eligible for annual increases and bonuses commensurate with his and the Employer's performance during the preceding year, the payment and amount of which is to be at the discretion of the Employer's Compensation Committee and the Board of Directors. 3.1 Compensation during the 2nd Term. The Employee shall receive remuneration for his services hereunder at an annual base salary of sixty percent (60%) of either the salary paid to the Employee during the year ended December 31, 2007 or the average of such salary for the years 2005, 2006 and 2007, whichever shall be greater, payable not less frequently than in equal monthly installments commencing January 1, 2008." 3. Paragraph 4 is amended by changing the caption to read "Other Benefits During the 1st and 2nd Term." Paragraphs 4C and 4D of the Employment Agreement are deleted in their entirety and Paragraph 4C is inserted in lieu thereof: C. Employer shall continue, maintain and pay the premiums on a long-term care insurance policy covering the Employee and spouse (with the Employee to pay all additional premiums charged in excess of $1,000 annually over the premiums heretofore charged for Employee's disability insurance policies). 2 Paragraph 4.1 is added to the Employment Agreement to provide as follows: A. Employer shall continue, maintain and pay the premiums on the $1,000,000 split dollar policy and a $1,000,000 key man insurance policy on the life of the Employee, the proceeds of which key man insurance less the death benefits payable pursuant to Paragraph 5A below, shall be payable to Employee, Employee's personal representative or named beneficiary. 4.2 Other Benefits During the 2nd Term. A. Employer shall provide Employee with a computer for use at his home tied into the Employer's computer network. B. In addition, the Employer shall continue to pay fringe benefits as heretofore but not in excess of $35,000 per annum." Paragraph 4.3 is added to the Employment Agreement to provide as follows: "4.3 Other Benefits after the 2nd Term. During the life of the Employee and his wife, the Employer shall continue, maintain and pay the premiums on their long term care policy (with Employee to pay $1,000 per annum if required per Paragraph 4C) and the cost/premiums for Medicare and Medicare Supplement coverage." 4. Paragraphs 5A and 5B of the Employment Agreement are deleted in their entirety and the following paragraphs are substituted in lieu thereof: "5A. If Employee shall die or be permanently disabled during the 1st Term, the Employer shall pay the Employee, the Employee's personal representative or his named beneficiary, the Employee's then current compensation for the balance of the year in which the 3 Employee's death or disability occurred, plus a benefit equal to two times the annual remuneration paid to the Employee for the year prior to his death or permanent disability. If the Employee shall die or be permanently disabled during the 2nd Term, the Employer shall pay the Employee, the Employee's personal representative or named beneficiary the balance of the compensation due the Employee under the 2nd Term of his employment." 5. Except as provided herein, all the other terms of the Employment Agreement shall remain as heretofore. ATTEST: DECORATOR INDUSTRIES, INC. By: The Compensation Committee /s/ Michael Solomon /s/ Jerome Lieber - ------------------------ ------------------------------------ Vice President /s/ Joseph Ellis ------------------------------------ /s/ Thomas Dusthimer ------------------------------------ /s/ Ellen Downey ------------------------------------ /s/ William Bassett ------------------------------------ WILLIAM BASSETT 4 EX-31.1 4 sect302cert-ceo.txt CEO CERTIFICATION SECT 302 EXHIBIT 31.1 I, William A. Bassett, President, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Decorator 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 officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: (a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; (b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and (c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors: (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 officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: August 8, 2003 By: /s/ William A. Bassett -------------- ------------------------ William A. Bassett, President EX-31.2 5 sect302cert-cfo.txt CFO CERTIFICATION - SECT 302 EXHIBIT 31.2 I, Michael K. Solomon, Treasurer, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Decorator 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 officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: (a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; (b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and (c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors: (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 officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: August 8, 2003 By: /s/ Michael K. Solomon -------------- --------------------------------- Michael K. Solomon, Treasurer EX-32 6 sect906cert.txt SECTION 906 CERTIFICATION EXHIBIT 32 DECORATOR INDUSTRIES, INC. CERTIFICATE REQUIRED BY 18 U.S.C. SS.1350 CERTIFICATION As required by 18 U.S.C. ss.1350, the undersigned certify that this Report on Form 10-Q fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934, as amended, and that the information contained in this Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the registrant. Date: August 8, 2003 By: /s/ William A. Bassett -------------- ---------------------------- William A. Bassett, Chief Executive Officer Date: August 8, 2003 By: /s/ Michael K. Solomon -------------- ---------------------------- Michael K. Solomon, Treasurer -----END PRIVACY-ENHANCED MESSAGE-----