10QSB 1 d55424_10qsb.txt QUARTERLY REPORT FORM 10-QSB SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended: MARCH 31, 2003 |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934 For the transition period from ______________ to ______________ Commission File Number: 0-14786 AUTOINFO, INC. (Exact name of Registrant as specified in its charter) DELAWARE 13-2867481 (State or other jurisdiction of (I.R.S. Employer Identification number) incorporation or organization) 6401 Congress Ave., Suite 230, Boca Raton, FL 33487 (Address of principal executive office) (561) 988-9456 (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 |_| Number of shares outstanding of the Registrant's common stock as of April 28, 2003: 27,347,923 shares of common stock, $.001 par value. Indicate by check mark whether the Registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. YES |X| NO |_| AUTOINFO, INC. AND SUBSIDIARIES INDEX Part I. Financial Information: Item 1. Consolidated Financial Statements: Page Balance Sheets March 31, 2003 (unaudited) and December 31, 2002 (audited)..... 3 Statements of Income (unaudited) Three months ended March 31, 2003 and 2002..................... 4 Statements of Cash Flows (unaudited) Three months ended March 31, 2003 and 2002..................... 5 Notes to Unaudited Consolidated Financial Statements........... 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations............................ 9 Item 3. Controls and Procedures........................................ 12 Part II. Other Information.................................................. 12 Signatures.................................................................. 13 Certifications.............................................................. 14 2 AUTOINFO, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS March 31, December 31, 2003 2002 ------------ ------------ Unaudited Audited ASSETS Current assets: Cash and cash equivalents $ 771,000 $ 684,000 Accounts receivable 2,928,000 2,996,000 Other current assets 256,000 197,000 ------------ ------------ Total current assets 3,955,000 3,877,000 Fixed assets, net of accumulated depreciation 68,000 67,000 ------------ ------------ $ 4,023,000 $ 3,944,000 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Loan payable $ 500,000 $ 500,000 Convertible subordinated debentures 575,000 575,000 Accounts payable and accrued liabilities 2,281,000 2,281,000 ------------ ------------ Total current liabilities 3,356,000 3,356,000 ------------ ------------ Stockholders' Equity Common stock - authorized 100,000,000 shares $.001 par value; issued and outstanding - 27,348,000 shares as of March 31, 2003 and December 31, 2002 27,000 27,000 Additional paid-in capital 18,019,000 18,019,000 Deficit (17,379,000) (17,458,000) ------------ ------------ Total stockholders' equity 667,000 588,000 ------------ ------------ $ 4,023,000 $ 3,944,000 ============ ============ The accompanying notes are an integral part of these consolidated financial statements. 3 AUTOINFO, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended March 31, 2003 2002 ------------ ------------ Gross revenues $ 5,141,000 $ 3,560,000 Cost of transportation 4,142,000 2,878,000 ------------ ------------ Net revenues 999,000 682,000 ------------ ------------ Commissions 577,000 348,000 Operating expenses 303,000 235,000 ------------ ------------ 880,000 583,000 ------------ ------------ Income from operations 119,000 99,000 ------------ ------------ Other charges (credits): Investment income (3,000) (7,000) Interest expense 38,000 38,000 ------------ ------------ 35,000 31,000 ------------ ------------ Income before income taxes 84,000 68,000 Income taxes (Note 2) 5,000 3,000 ------------ ------------ Net income $ 79,000 $ 65,000 ============ ============ Basic and diluted net income per share $ .00 $ .00 ============ ============ Weighted average number of common and common equivalent shares 28,347,000 27,694,000 ------------ ------------ The accompanying notes are an integral part of these consolidated financial statements. 4 AUTOINFO, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended March 31, 2003 2002 --------- --------- Cash flows from operating activities: Net income $ 79,000 $ 65,000 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 9,000 3,000 Changes in assets and liabilities: Accounts receivable 68,000 (803,000) Other current assets (59,000) (11,000) Accounts payable and accrued liabilities -- 573,000 --------- --------- Net cash provided by (used in) operating activities 97,000 (173,000) --------- --------- Cash flows from investing activities: Capital expenditures (10,000) (7,000) Proceeds from sale of short-term investments -- 15,000 --------- --------- Net cash provided by (used in) investing activities (10,000) 8,000 --------- --------- Net change in cash and cash equivalents 87,000 (165,000) Cash and cash equivalents at beginning of period 684,000 885,000 --------- --------- Cash and cash equivalents at end of period $ 771,000 $ 720,000 ========= ========= The accompanying notes are an integral part of these consolidated financial statements. 5 AUTOINFO, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS Forward Looking Statements Certain statements made in this Quarterly Report on Form 10-QSB are "forward-looking statements"(within the meaning of the Private Securities Litigation Reform Act of 1995) regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause our 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. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. Our plans and objectives are based, in part, on assumptions involving judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that our assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance that the forward-looking statements included in this report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein particularly in view of the current state of our operations, the inclusion of such information should not be regarded as a statement by us or any other person that our objectives and plans will be achieved. Factors that could cause actual results to differ materially from those expressed or implied by forward-looking statements include, but are not limited to, the factors set forth under the headings "Business," and "Risk Factors" in our Annual Report on Form 10-KSB for the year ended December 31, 2002 as filed with the Securities and Exchange Commission. Note 1. - Business and Summary of Significant Accounting Policies Business As a result of our acquisition of Sunteck Transport Co., Inc. ("Sunteck") in December 2000, we are a full service third party transportation logistics provider. Our services include ground transportation coast to coast, local pick up and delivery, warehousing, air freight and ocean freight. We have strategic alliances with less than truckload (LTL), truckload, air, rail and ocean common carriers to service our customers' needs. We have five regional operating centers and representatives in 12 states and Canada. As of April 18, 2003, we had 42 sales agents. Our services include arranging for the transport of customers' freight from a shipper's location to the designated destination. We do not own any trucking equipment and rely on independent carriers for the movement of customers' freight. We seek to establish long-term relationships with our customers and provide a variety of logistics services and solutions to eliminate inefficiencies in our customers' supply chain management. Summary of Significant Accounting Policies Basis of Presentation The financial statements of the Company have been prepared using the accrual basis of accounting under accounting principles generally accepted in the United States of America (GAAP). The consolidated financial statements, which are unaudited, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). In management's opinion, these financial statements include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the results of 6 operations for the interim periods presented. The results of operations for the three months ended March 31, 2003 and 2002 are not necessarily indicative of results to be expected for the entire year. Pursuant to SEC rules and regulations, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted from these statements. The consolidated financial statements and notes thereto should be read in conjunction with the financial statements and notes included in our Annual Report on Form 10-KSB. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary Sunteck Transport Co., Inc. All significant intercompany balances and transactions have been eliminated in consolidation. Revenue Recognition As a third party transportation logistics provider, the Company acts as the shippers' agent and arranges for a carrier to handle the freight. Gross revenues consist of the total dollar value of services purchased by shippers. Revenue is recognized upon the delivery of freight, at which time the related transportation cost, including commission, is also recognized. At that time, the Company's obligations are completed and collection of receivables is reasonably assured. Provision For Doubtful Accounts The Company continuously monitors the creditworthiness of its customers and has established an allowance for amounts that may become uncollectible in the future based on current economic trends, historical payment trends and bad debt write-off experience, and any specific customer related collection issues. The provision for doubtful accounts was $61,000 and $60,000 as of March 31, 2003 and December 31, 2002, respectively. Cash and Cash Equivalents Cash and cash equivalents consist of cash in banks and investments in short-term, highly liquid securities having original maturities of three months or less. From time to time, the Company has on deposit at financial institutions cash balances which exceed federal deposit insurance limitations. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents. Fixed Assets Fixed assets as of December 31, 2002 and 2001, consisting primarily of furniture, fixtures and equipment, were carried at cost, net of accumulated depreciation. Depreciation of fixed assets was provided on the straight-line method over the estimated useful lives of the related assets which range from three to five years. Income Per Share Basic income per share is based on net income divided by the weighted average number of common shares outstanding. Common stock equivalents outstanding were 999,000 and 396,000 for the three months ended March 31, 2003 and 2002, respectively. Use of Estimates The preparation of these financial statements in conformity with GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets, liabilities and 7 contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the periods presented. The Company believes that all such assumptions are reasonable and that all estimates are adequate, however, actual results could differ from those estimates. Income Taxes The Company utilizes the asset and liability method for accounting for income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and future benefits to be recognized upon the utilization of certain operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Stock-Based Compensation The Company has adopted Statement of Financial Accounting Standards No. 123, "Accounting for Stock Based Compensation" (SFAS 123). As permitted by SFAS 123, the Company has chosen to continue to apply Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" (APB 25) and, accordingly, no compensation cost has been recognized for stock options in the financial statements. New Accounting Pronouncements In April 2002, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB No. 13, and Technical Corrections" (SFAS 145), which rescinds the indicated statements and amends other existing authoritative pronouncements to make various technical corrections, clarify meanings, or describe their applicability under changed conditions. In June 2002, the FASB issued SFAS 146, "Accounting for Costs Associated with Exit or Disposal Activities," which requires that a liability for a cost associated with an exit or disposal activity be recognized and measured at fair value when the liability is incurred. In October 2002, the FASB issued SFAS 147, "Acquisitions of Certain Financial Institutions," which requires that transactions involving the acquisition of financial institutions, except for transactions between two or more mutual enterprises, be accounted for in accordance with SFAS 141, "Business Combinations," and SFAS 142, "Goodwill and Other Intangible Assets." In December 2002, the FASB issued SFAS 148, "Accounting for Stock-Based Compensation - Transition and Disclosure," which amends SFAS 123, "Accounting for Stock-Based Compensation," by providing alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. SFAS 148 also amends the disclosure requirements of SFAS 123 by requiring 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. Adoption of these statements did not have a material impact on the Company's financial position or results of operations. 8 Management's Discussion and Analysis of Financial Condition And Results of Operations Cautionary statement identifying important factors that could cause our actual results to differ from those projected in forward looking statements. Pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, readers of this report are advised that this document contains both statements of historical facts and forward looking statements. Forward looking statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from those indicated by the forward looking statements. Examples of forward looking statements include, but are not limited to (i) projections of revenues, income or loss, earnings per share, capital expenditures, dividends, capital structure and other financial items, (ii) statements of our plans and objectives with respect to business transactions and enhancement of shareholder value, (iii) statements of future economic performance, and (iv) statements of assumptions underlying other statements and statements about our business prospects. The following Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our consolidated financial statements and the notes thereto appearing elsewhere in this report. General As a result of our acquisition of Sunteck Transport Co., Inc. ("Sunteck") in December 2000, we are a full service third party transportation logistics provider. Our services include ground transportation coast to coast, local pick up and delivery, warehousing, air freight and ocean freight. We have strategic alliances with less than truckload (LTL), truckload, air, rail and ocean common carriers to service our customers' needs. We have five regional operating centers and representatives in 12 states and Canada. As of April 18, 2003, we had 42 sales agents. Our services include arranging for the transport of customers' freight from a shipper's location to the designated destination. We do not own any trucking equipment and rely on independent carriers for the movement of customers' freight. We seek to establish long-term relationships with our customers and provide a variety of logistics services and solutions to eliminate inefficiencies in our customers' supply chain management. Results of Operations In the transportation industry, results of operations generally show a seasonal pattern as customers reduce shipments during and after the winter months. This industry trend has not had a significant impact on our results of operations or our cash flows in recent years. Also, inflation has not materially affected our operations due to the short-term transactional basis of our business. However, we cannot fully predict the impact seasonality and inflation may have in the future. Three Months Ended March 31, 2003 and 2002 During the quarter ended March 31, 2003, we continued to implement our strategic growth business plan consisting primarily of the expansion of client services, the opening of regional operations centers in key geographical markets and the addition of independent sales agents. As a result of this, our number of sales agents has increased to 42 at March 31, 2003 as compared with 35 at March 31, 2002. Our net revenues (gross revenues less cost of transportation) are the primary indicator of our ability to source, add value and resell service that are provided by third parties and are considered to be the primary measurement of growth. Therefore, the discussion of the results of operations below focuses 9 on the changes in our net revenues. The increases in net revenues and all related cost and expense categories are the direct result of our business expansion. The following table represents certain statement of operation data as a percentage of net revenues: 2003 2002 ------ ------ Net revenues 100.0% 100.0% ------ ------ Commissions 57.8% 51.0% Operating expenses 30.3% 34.5% Other charges 3.5% 4.5% ------ ------ Income from before income taxes 8.4% 10.0% ------ ------ Revenues Gross revenues consisting of freight fees and other related services revenue totaled $5,141,000 for the period ended March 31, 2003, as compared with $3,560,000 in the prior year period. Net revenues were $999,000 for the period ended March 31, 2003, as compared with $682,000 in the prior year period. Costs and expenses Commissions totaled $577,000 for the period ended March 31, 2003, as compared with $348,000 in the prior year period. As a percentage of net revenues, commissions were 57.8% for the period ended March 31, 2003 as compared with 51% in the prior year period. This increase is the direct result of higher commission rates related to the addition of independent sales agents at higher commission rates than historically experienced. We expect commission rates to be consistent with the current period for the foreseeable future. Operating expenses totaled $303,000 for the period ended March 31, 2003, as compared with $235,000 in the prior year period. As a percentage of net revenues, operating expenses were 30.3% for the period ended March 31, 2003 as compared with 34.5% in the prior year period. This decrease is the direct result of management's ability to leverage selling, general and administrative expenses in connection with our business expansion. Investment income, primarily consisting of dividend and interest income, was $3,000 for the period ended March 31, 2003 as compared with $7,000 in the prior year period. Interest expense totaled $38,000 for the three month periods ended March 31, 2003 and 2002. Income taxes Income taxes were $5,000 for the period ended March 31, 2003 as compared with $3,000 in the prior year period. Net income (loss) Net income totaled $79,000 for the period ended March 31, 2003, as compared with a loss of $65,000 in the prior year period. 10 Trends and uncertainties The transportation industry is highly competitive and highly fragmented. Our primary competitors are other non-asset based as well as asset based third party logistics companies, freight brokers, carriers offering logistics services and freight forwarders. We also compete with customers' and shippers internal traffic and transportation departments as well as carriers internal sales and marketing departments directly seeking shippers' freight. We anticipate that competition for our services will continue to increase. Many of our competitors have substantially greater capital resources, sales and marketing resources and experience. We cannot assure you that we will be able to effectively compete with our competitors in effecting our business expansion plans. For the year ended December 31, 2002, we increased gross revenues from $8.0 million to $18.9 million and had net income of $340,000 as compared with a net loss of $15,000 in the prior year. For the three months ended March 31, 2003 revenues were $5,141,000 and net income was $79,000 as compared with revenues of $3,560,000 and net income of $65,000 in the prior year. However, as of March 31, 2003, we had an accumulated deficit of $17.4 million. Factors that could adversely affect our operating results include: o the success of Sunteck in expanding its business operations; and o changes in general economic conditions. Depending on our ability to generate revenues, we may require additional funds to expand Sunteck's business operations and for working capital and general corporate purposes. Any additional equity financing may be dilutive to stockholders, and debt financings, if available, may involve restrictive covenants that further limit our ability to make decisions that we believe will be in our best interests. In the event we cannot obtain additional financing on terms acceptable to us when required, our ability to expand Sunteck's operations may be materially adversely affected. Liquidity and capital resources At March 31, 2003, we had outstanding $575,000 of subordinated convertible debentures and $500,000 pursuant to a line of credit. The debentures are convertible into common stock at the option of the debenture holder at a conversion price of $0.25 per share and are redeemable, at the option of the holder, on or after December 31, 2003. The line of credit, obtained from a related party in August 2001, is secured by accounts receivable and matures in August 2003. We believe that we have sufficient working capital to meet our short-term operating needs and that we will be able to extend or replace the line of credit on terms acceptable to us. At March 31, 2003, we had liquid assets of approximately $771,000. The total amount of debt outstanding as of March 31, 2003 was $1,075,000. This following table presents our debt instruments and their weighted average interest rates as of March 31, 2003: Weighted Balance Average Rate ------------- -------------- Subordinated Debt $ 575,000 12.0% Line of Credit $ 500,000 17.0% Inflation and changing prices had no material impact on revenues or the results of operations for the period ended March 31, 2003. 11 Controls and Procedures (a) Evaluation of Disclosure Controls and Procedures Within the past 90 days, AutoInfo's management, including its Chief Executive Officer and Chief Financial Officer, have conducted an evaluation of the effectiveness of disclosure controls and procedures pursuant to Rule 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as amended. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures are effective in ensuring that all material information required to be filed in this quarterly report has been made known to them in a timely fashion. (b) Changes in Internal Controls There have been no significant changes in internal controls, or in factors that could significantly affect internal controls, subsequent to the date the Chief Executive Officer and Chief Financial Officer completed their evaluation. Part II OTHER INFORMATION Item 1 - 5: Inapplicable Item 6: Exhibits -------- 99.1 Chief Executive Officer Certification 99.2 Chief Financial Officer Certification 12 SIGNATURES Pursuant to the requirements of the Securities Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto authorized. AUTOINFO, INC. By: /s/ William Wunderlich -------------------------------------- William Wunderlich Executive Vice President and Principal Financial Officer Date: April 28, 2003 13 AUTOINFO, INC. CERTIFICATIONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 CERTIFICATION I, Harry Wachtel, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of AutoInfo, 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. /s/ Harry Wachtel ------------------------------------- Harry Wachtel President and Chief Executive Officer Date: April 30, 2003 14 CERTIFICATION I, William Wunderlich, certify that: 7. I have reviewed this quarterly report on Form 10-QSB of AutoInfo, Inc.; 8. 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; 9. 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; 10. 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: (d) 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; (e) 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 (f) 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; 11. 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 12. 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. /s/ William Wunderlich ------------------------------------ William Wunderlich Chief Financial Officer Date: April 30, 2003 15