**U.S. Securities and Exchange Commission**

**Washington,D.C. 20549**

 

**FORM 10-Q/A**

**(Amendment No. 1)**

 

**ý****                                ****QUARTERLYREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

 

**Forthe quarterly period ended**

 

**November 30, 2002**

 

**o****                                ****TRANSITIONREPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

 

**Forthe transition period from  N/A to N/A**

 

**Commissionfile no. 1-7755**

 

**Summa Industries**

(Name ofregistrant as specified in its charter)

 

| **Delaware**                                                     |   | **95-1240978**                           |
|------------------------------------------------------------------|--------|------------------------------------------|
| (State or other  jurisdiction of  incorporation or organization) |   | (I.R.S. employer  identification number) |

 

**21250 Hawthorne Boulevard, Suite 500,Torrance, California 90503**

(Address ofprinciple executive offices, including zip code)

 

Registrant’stelephone number:  **(310) 792-7024**

 

Indicate by check mark whether the registrant (1) has filed all reportsrequired to be filed by Section 13 or 15(d) of the Exchange Act during thepreceding 12 months (or for such shorter period that the registrant wasrequired to file such reports), and (2) has been subject to such filingrequirements for the past 90 days.

Yes **ý**    No o

 

Indicate by check mark whether the registrant is an accelerated filer(as defined in Rule 12b-2 of the Exchange Act).

Yes o    No**ý**

 

The number of shares ofcommon stock outstanding as of December 20, 2002 was 4,471,592.

 

 

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**EXPLANATORY NOTE**

 

Summa Industries herebyamends its Quarterly Report on Form 10-Q for the fiscal quarter ended November30, 2002 (the “Form 10-Q”) (filed on December 24, 2002) as set forth in thisQuarterly Report on Form 10-Q/A (Amendment No. 1) (the “Form 10-Q/A”).  The purpose of this amendment to the Form10-Q is to report five business segments instead of the one segment previouslyreported.  This Form 10-Q/A includesamendments for segment disclosure to the following sections of the Form 10-Q:Management’s Discussion and Analysis of Financial Condition and Results ofOperations; Note 3 (Cumulate Effect of a Change in Accounting Principle) andNote 7 (Segment Information) of the Notes to Condensed Consolidated FinancialStatements.

 

**Summa Industries**

 

**INDEX**

 
| PART I - FINANCIAL  INFORMATION |
|---------------------------------|
|                            |   |
| Item 1.                         | Financial Statements: |
|                            |   |
|                            | Condensed Consolidated Balance Sheets -  November 30, 2001 (unaudited), August 31, 2002 and November 30, 2002 |
|                            |   |
|                            | Condensed  Consolidated Statements of Operations (unaudited) -  three months ended November 30, 2001 and 2002 |
|                            |   |
|                            | Condensed Consolidated Statements of Cash  Flows (unaudited) -  three months ended November 30, 2001 and 2002 |
|                            |   |
|                            | Notes to Condensed Consolidated Financial  Statements (unaudited) |
|                            |   |
| Item 2.                         | Management’s Discussion and Analysis of  Financial Condition and Results of Operations |
|                            |   |
| Item 3.                         | Quantitative and Qualitative Disclosure  about Market Risk. |
|                            |   |
| Item 4.                         | Disclosure Controls and Procedures. |
|                            |   |
| PART II - OTHER INFORMATION     |
|                            |   |
| Item 1.                         | Legal Proceedings |
| Item 2.                         | Changes in Securities and Use of Proceeds |
| Item 3.                         | Defaults upon Senior Securities |
| Item 4.                         | Submission of Matters to a Vote of Security  Holders |
| Item 5.                         | Other Information |
| Item 6.                         | Exhibits and Reports on Form 8-K |
|                            |   |
| Signature Page                  |

 

2

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**Summa Industries**

CONDENSED CONSOLIDATED BALANCESHEETS

(unaudited)

 
|                                                                                                                                                                                          |   | **November  30, 2001** |       | **August 31,  2002** |   | **November  30, 2002** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|------------|----------------------|--------|------------------------|--------|
|                                                                                                                                                                                          |   |                   |       |                 |   |                   |   |
| Current  assets:                                                                                                                                                                              |   |                   |       |                 |   |                   |   |
| Cash  and cash equivalents                                                                                                                                                                    |   | $                      | 208,000    |                 | $      | 690,000                |   | $ | 1,170,000 |   |
| Accounts  receivable                                                                                                                                                                          |   | 15,105,000             |       | 17,594,000           |   | 16,825,000             |   |
| Inventories                                                                                                                                                                                   |   | 14,056,000             |       | 12,313,000           |   | 12,178,000             |   |
| Prepaid  expenses and other                                                                                                                                                                   |   | 3,502,000              |       | 3,181,000            |   | 3,352,000              |   |
| Total  current assets                                                                                                                                                                         |   | 32,871,000             |       | 33,778,000           |   | 33,525,000             |   |
| Property,  plant and equipment                                                                                                                                                                |   | 51,186,000             |       | 51,845,000           |   | 52,840,000             |   |
| Less  accumulated depreciation                                                                                                                                                                |   | (22,108,000            | )          | (25,025,000          | )      | (26,195,000            | )      |
| Net  property, plant and equipment                                                                                                                                                            |   | 29,078,000             |       | 26,820,000           |   | 26,645,000             |   |
| Other  assets                                                                                                                                                                                 |   | 167,000                |       | 124,000              |   | 2,899,000              |   |
| Goodwill  and other intangibles, net                                                                                                                                                          |   | 34,864,000             |       | 36,843,000           |   | 9,625,000              |   |
| Total  assets                                                                                                                                                                                 |   | $                      | 96,980,000 |                 | $      | 97,565,000             |   | $ | 72,694,000 |   |
| Current  liabilities:                                                                                                                                                                    |   |                   |       |                 |   |                   |   |
| Accounts  payable                                                                                                                                                                             |   | $                      | 5,264,000  |                 | $      | 6,410,000              |   | $ | 5,264,000 |   |
| Accrued  liabilities                                                                                                                                                                          |   | 4,704,000              |       | 6,001,000            |   | 5,043,000              |   |
| Current  maturities of long-term debt                                                                                                                                                         |   | 7,653,000              |       | 5,066,000            |   | 5,062,000              |   |
| Total  current liabilities                                                                                                                                                                    |   | 17,621,000             |       | 17,477,000           |   | 15,369,000             |   |
| Long-term  debt, net of current maturities                                                                                                                                                    |   | 28,300,000             |       | 19,845,000           |   | 19,641,000             |   |
| Other  long-term liabilities                                                                                                                                                                  |   | 4,259,000              |       | 4,658,000            |   | 2,641,000              |   |
| Total  long-term liabilities                                                                                                                                                                  |   | 32,559,000             |       | 24,503,000           |   | 22,282,000             |   |
| Mandatorily  redeemable convertible  preferred  stock, par value $.001, 5,000 shares authorized, issued and outstanding                                                                  |   | —                 |       | 5,366,000            |   | 5,551,000              |   |
| Stockholders’  equity:                                                                                                                                                                   |   |                   |       |                 |   |                   |   |
| Common  stock,  par value $.001; 10,000,000  shares authorized; issued and outstanding: 4,368,836 at November 30, 2001,  4,401,769 at August 31, 2002 and 4,474,492 at November 30, 2002 |   | 18,512,000             |       | 18,894,000           |   | 19,540,000             |   |
| Retained  earnings                                                                                                                                                                            |   | 29,392,000             |       | 31,325,000           |   | 9,952,000              |   |
| Cumulative  other comprehensive (loss)                                                                                                                                                        |   | (104,000               | )          | —               |   | —                 |   |
| Total  stockholders’ equity                                                                                                                                                              |   | 46,800,000             |       | 50,219,000           |   | 29,492,000             |   |
| Total  liabilities and stockholders’ equity                                                                                                                                              |   | $                      | 96,980,000 |                 | $      | 97,565,000             |   | $ | 72,694,000 |   |

 

See accompanying notes tocondensed consolidated financial statements*.*

 

3

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**SummaIndustries**

CONDENSED CONSOLIDATED STATEMENTSOF OPERATIONS

(unaudited)

 
|                                                                                           |   | **Three  months ended November 30** |       |
|------------------------------------------------------------------------------------------------|--------|-------------------------------------|------------|
|                                                                                           |   | **2001**                            |       | **2002** |   |
| Net  sales                                                                                     |   | $                                   | 25,181,000 |   | $ | 28,548,000 |   |
| Cost  of sales                                                                                 |   | 18,280,000                          |       | 20,890,000 |   |
| Gross  profit                                                                                  |   | 6,901,000                           |       | 7,658,000 |   |
| Selling,  general, administrative and other expenses                                           |   | 5,381,000                           |       | 5,499,000 |   |
| Operating  income                                                                              |   | 1,520,000                           |       | 2,159,000 |   |
| Interest  expense                                                                              |   | 735,000                             |       | 405,000 |   |
| Income  before income taxes and cumulative effect of a change in accounting principle          |   | 785,000                             |       | 1,754,000 |   |
| Provision  for income taxes                                                                    |   | 280,000                             |       | 599,000 |   |
| Income  before cumulative effect of a change in accounting principle                           |   | 505,000                             |       | 1,155,000 |   |
| Cumulative  effect of a change in accounting principle                                         |   | —                              |       | (22,343,000 | ) |
| Net  income (loss)                                                                             |   | $                                   | 505,000    |   | $ | (21,188,000 | ) |
| Preferred  stock accretion                                                                     |   | —                              |       | $ | 184,000 |   |
| Net  income (loss) available to common stockholders:                                           |   |                                |       |   |   |
| Before  cumulative effect of a change in accounting principle                                  |   | $                                   | 505,000    |   | $ | 971,000 |   |
| After  cumulative effect of a change in accounting principle                                   |   | $                                   | 505,000    |   | $ | (21,372,000 | ) |
| Earnings  per common share before cumulative effect of a change in accounting principle        |   |                                |       |   |   |
| Basic                                                                                          |   | $                                   | .12        |   | $ | .22 |   |
| Diluted                                                                                        |   | $                                   | .11        |   | $ | .21 |   |
| Earnings  (loss) per common share after cumulative effect of a change in accounting  principle |   |                                |       |   |   |
| Basic                                                                                          |   | $                                   | .12        |   | $ | (4.82 | ) |
| Diluted                                                                                        |   | $                                   | .11        |   | $ | (4.70 | ) |

 

See accompanying notes tocondensed consolidated financial statements.

 

4

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**Summa Industries**

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

 
|                                                                               |   | **Three  months ended November 30** |    |
|------------------------------------------------------------------------------------|--------|-------------------------------------|---------|
|                                                                               |   | **2001**                            |    | **2002** |   |
| Operating  activities:                                                             |   |                                |    |   |   |
| Net  income (loss)                                                                 |   | $                                   | 505,000 |   | $ | (21,188,000 | ) |
| Adjustments  to reconcile net income to net cash provided by operating activities: |   |                                |    |   |   |
| Depreciation                                                                       |   | 1,316,000                           |    | 1,189,000 |   |
| Amortization                                                                       |   | 298,000                             |    | 63,000 |   |
| Cumulative  effect of a change in accounting principle                             |   | —                              |    | 22,343,000 |   |
| Net  change in assets and liabilities, net of effects of acquisitions:             |   |                                |    |   |   |
| Accounts  receivable                                                               |   | 1,408,000                           |    | 769,000 |   |
| Inventories                                                                        |   | (673,000                            | )       | 135,000 |   |
| Prepaid  expenses and other assets                                                 |   | (261,000                            | )       | (147,000 | ) |
| Accounts  payable                                                                  |   | (330,000                            | )       | (1,146,000 | ) |
| Accrued  liabilities                                                               |   | (792,000                            | )       | (533,000 | ) |
| Total  adjustments                                                                 |   | 966,000                             |    | 22,673,000 |   |
| Net  cash provided by operating activities                                         |   | 1,471,000                           |    | 1,485,000 |   |
| Investing  activities:                                                             |   |                                |    |   |   |
| Purchases  of property and equipment                                               |   | (827,000                            | )       | (1,014,000 | ) |
| Net  cash (used in) investing activities                                           |   | (827,000                            | )       | (1,014,000 | ) |
| Financing  activities:                                                             |   |                                |    |   |   |
| Net  proceeds from line of credit                                                  |   | 1,497,000                           |    | 1,055,000 |   |
| Payments  on long-term debt                                                        |   | (2,404,000                          | )       | (1,263,000 | ) |
| Proceeds  from the exercise of stock options                                       |   | 225,000                             |    | 227,000 |   |
| Purchase  of common stock                                                          |   | —                              |    | (10,000 | ) |
| Net  cash provided by (used in) financing activities                               |   | (682,000                            | )       | 9,000 |   |
| Net  increase (decrease) in cash and cash equivalents                              |   | (38,000                             | )       | 480,000 |   |
| Cash  and cash equivalents, beginning of period                                    |   | 246,000                             |    | 690,000 |   |
| Cash  and cash equivalents, end of period                                          |   | $                                   | 208,000 |   | $ | 1,170,000 |   |

 

See accompanying notes tocondensed consolidated financial statements*.*

 

5

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**Summa Industries**

**NOTES****TOCONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

November 30, 2002

(unaudited)

 

**1.****                                      Basisof presentation**

 

The accompanying condensed consolidated financial statements of SummaIndustries (the “Company”) have been condensed in certain respects and should,therefor, be read in conjunction with the audited consolidated financialstatements and notes related thereto contained in the Company’s Annual Reporton Form 10-K for the year ended August 31, 2002.  In the opinion of the Company, the accompanying unaudited interimcondensed consolidated financial statements contain all adjustments necessaryfor a fair presentation for the interim period, all of which were normalrecurring adjustments.  The results ofoperations for the three months ended November 30, 2002 are not necessarilyindicative of the results to be expected for the full year ending August 31,2003.

 

**Recent accounting pronouncements**

 

The Company adoptedFinancial Accounting Standards Board (“FASB”) Statement of Financial AccountingStandards No. 142 (“SFAS 142”) “Goodwill and Other Intangible Assets” as ofSeptember 1, 2002, the beginning of its current fiscal year.  The effect of the adoption of SFAS 142 isdescribed in Note 3, below.

 

The Company adopted FASBStatement of Accounting Standards No. 143 (“SFAS 143”) “Accounting for AssetRetirement Obligations” as of September 1, 2002, the beginning of its currentfiscal year.  SFAS 143 addressesfinancial accounting and reporting for obligations associated with theretirement of tangible long-lived assets and the associated asset retirementcosts. The adoption of SFAS 143 had no effect on the Company’s financialposition or results of operations.

 

The Company adopted FASBStatement of Accounting Standards No. 144 (“SFAS 144”) “Accounting for the Impairment or Disposal of Long-LivedAssets” as of September 1, 2002, the beginning of its current fiscal year.  The adoption of SFAS 144 had no effect onthe Company’s financial position or results of operations.

 

The Company adopted FASB Statement of Accounting Standards No. 145(“SFAS 145”) “Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASBStatement No. 13, and Technical Corrections” as of September 1, 2002, thebeginning of its current fiscal year. The adoption of SFAS 145 had no effect on the Company’s financialposition or results of operation.

 

In July 2002, the FASB issued Statement of Financial AccountingStandards No. 146 (“SFAS 146”) “Accounting for Costs Associated with Exit orDisposal Activities” which nullifies EITF Issue No. 94-3 “Liability Recognitionfor Certain Employee Termination Benefits and Other Costs to Exit an Activity(including Certain Costs Incurred in a Restructuring).”  SFAS 146 requires that costs associated withan exit or disposal activity be recognized only when the liability is incurred(that is, when it meets the definition of a liability in the FASB’s conceptualframework). SFAS 146 also establishes fair value as the objective for initialmeasurement of liabilities related to exit or disposal activities.  SFAS 146 is effective for exit or disposalactivities that are initiated after December 31, 2002. The adoption of SFAS 146is not expected to have a material impact on the Company’s financial positionor results of operation.

 

**2.****                                      Inventories**

 

Inventories were as follows:

 
|                 |   | **November  30, 2001** |       | **August 31,  2002** |   | **November  30, 2002** |   |
|----------------------|--------|------------------------|------------|----------------------|--------|------------------------|--------|
| Finished  goods      |   | $                      | 6,875,000  |                 | $      | 5,457,000              |   | $ | 5,102,000 |   |
| Work  in process     |   | 363,000                |       | 290,000              |   | 288,000                |   |
| Materials  and parts |   | 6,818,000              |       | 6,566,000            |   | 6,788,000              |   |
|                 |   |                   |       |                 |   |                   |   |
|                 |   | $                      | 14,056,000 |                 | $      | 12,313,000             |   | $ | 12,178,000 |   |

 

6

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**3.****                                      Cumulativeeffect of a change in accounting principle**

 

The Company adoptedStatement of Financial Accounting Standards No. 142, “Goodwill and OtherIntangible Assets” (SFAS No. 142), effective September 1, 2002.  As a result, the Company discontinued theamortization of goodwill arising from business combinations consummated priorto June 30, 2001 that have been accounted for using the purchase method ofaccounting.  Such goodwill aggregated toa net amount of $35,190,000 at August 31,2002 and goodwill amortization for thethree months ended November 30, 2001 was $274,000.

 

SFAS No. 142 alsorequires the Company to assess the recoverability of recorded goodwill at theadoption date.  Impairments of goodwillthat are identified as a result of the assessment, if any, are to be reportedas a cumulative change in accounting principle as of the adoption date.  SFAS No. 142 requires that assessment to becompleted within six months of the date of adoption and to be reportedretroactively to the beginning of the year adopted.

 

The Company performed atransitional fair value based impairment test on its goodwill as of September1, 2002.  As a result, an impairmentcharge of $22,343,000 was recorded as of September 1, 2002.  The charge is presented as the cumulativeeffect of a change in accounting principle in the accompanying CondensedConsolidated Statements of Operations. The charge is net of an income tax benefit of $4,812,000.

 

The carrying amount ofgoodwill and the impairment charge with respect to the Company’s reportablesegments is as follows:

 
| **Segment**                   |   | **Balance at    August 31, 2002** |       | **Impairment  Charges (Pre-tax)** |   | **Balance at  November 30, 2002** |   |
|-------------------------------|--------|-----------------------------------|------------|-----------------------------------|--------|-----------------------------------|--------|
| Optical  components           |   | $                                 | 8,867,000  |                              | $      | 5,953,000                         |   | $ | 2,914,000 |   |
| Material  handling components |   | 5,095,000                         |       | —                            |   | 5,095,000                         |   |
| Electrical  components        |   | 12,689,000                        |       | 12,663,000                        |   | 26,000                            |   |
| Irrigation  components        |   | 6,831,000                         |       | 6,831,000                         |   | —                            |   |
| Misc.  plastic components     |   | 1,708,000                         |       | 1,708,000                         |   | —                            |   |
|                          |   |                              |       |                              |   |                              |   |
| Consolidated                  |   | $                                 | 35,190,000 |                              | $      | 27,155,000                        |   | $ | 8,035,000 |   |

 

A reconciliation ofpreviously reported net income and earnings per share to the amounts adjustedfor the exclusion of goodwill amortization follows:

 
|                                                |   | **Three  Months Ended November 30** |    |
|-----------------------------------------------------|--------|-------------------------------------|---------|
|                                                |   | **2001**                            |    | **2002** |   |
|                                                |   |                                |    |   |   |
| Reported net  income                                |   | $                                   | 505,000 |   | $ | 1,155,000 |   |
| Add back:  Goodwill amortization, net of taxes |   | 222,000                             |    | — |   |
| Adjusted net  income                                |   | $                                   | 727,000 |   | $ | 1,155,000 |   |
|                                                |   |                                |    |   |   |
| Basic earnings  per share:                          |   |                                |    |   |   |
|                                                |   |                                |    |   |   |
| Reported net  income                                |   | $                                   | .12     |   | $ | .22 |   |
| Goodwill  amortization                              |   | .05                                 |    | — |   |
| Adjusted net  income                                |   | $                                   | .17     |   | $ | .22 |   |
|                                                |   |                                |    |   |   |
| Diluted earnings  per share:                        |   |                                |    |   |   |
|                                                |   |                                |    |   |   |
| Reported net  income                                |   | $                                   | .11     |   | $ | .21 |   |
| Goodwill  amortization                              |   | .05                                 |    | — |   |
| Adjusted net  income                                |   | $                                   | .16     |   | $ | .21 |   |

** **

**4.****                                      Earningsper share**

 

Basic earnings per share (“EPS”) was computed by dividing net incomeavailable to common stockholders by the weighted average number of commonshares outstanding during each period. The Company has 5,000 shares ofconvertible

 

7

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preferred stock outstanding with an original issue price of$5,000,000.  No dividends are requiredto be paid on the stock, but the preferred stockholders have the right,provided the preferred stock has not been converted to common shares, to requirethe Company to repurchase the stock during a one year period beginning December14, 2004 at an aggregate price which increases daily from $7,025,000 onDecember 14, 2004 to $7,868,000 on December 13, 2005.  The net income available to common stockholders used in the EPScalculations is the net income less the reported accretion in the value of thepreferred stock for that period.

 

Diluted EPS reflects the potential dilution that could occur ifsecurities or other contracts to issue common stock were exercised or convertedinto common stock.  Diluted EPS wascalculated using the “treasury stock” method as if dilutive options had beenexercised and the funds were used to purchase common shares at the averagemarket price during the period.  Optionsto purchase 624,634 common shares as of November 30, 2001 and 397,940 commonshares as of November 30, 2002 were excluded from the calculation of equivalentshares, as they would have been anti-dilutive. The 5,000 shares of outstanding preferred stock, convertible into625,000 shares of common stock, were excluded from the calculation ofequivalent shares for the three months ended November 30, 2002, as they wouldhave been anti-dilutive.

 

The following is a reconciliation of the numerators and denominators ofthe basic and diluted EPS computations for “income available to commonstockholders” and other disclosures required by Statement of AccountingStandards No. 128, “Earnings per Share”:

** **
|                                                           |   | **Three  months ended November 30** |    |
|----------------------------------------------------------------|--------|-------------------------------------|---------|
|                                                           |   | **2001**                            |    | **2002** |   |
| Numerators:                                                    |   |                                |    |   |   |
|                                                           |   |                                |    |   |   |
| Before  cumulative effect of a change in accounting principle: |   |                                |    |   |   |
| Net  income                                                    |   | $                                   | 505,000 |   | $ | 1,155,000 |   |
| Preferred  stock accretion                                     |   | —                              |    | (184,000 | ) |
| Income  available to common stockholders                       |   | $                                   | 505,000 |   | $ | 971,000 |   |
|                                                           |   |                                |    |   |   |
| After  cumulative effect of a change in accounting principle:  |   |                                |    |   |   |
| Net income  (loss)                                             |   | $                                   | 505,000 |   | $ | (21,188,000 | ) |
| Preferred  stock accretion                                     |   | —                              |    | (184,000 | ) |
| Income  (loss) available to common stockholders                |   | $                                   | 505,000 |   | $ | (21,372,000 | ) |
|                                                           |   |                                |    |   |   |
| Denominators:                                                  |   |                                |    |   |   |
|                                                           |   |                                |    |   |   |
| Weighted  average shares outstanding – basic              |   | 4,336,000                           |    | 4,437,000 |   |
| Impact  of common shares to be issued under stock option plans |   | 117,000                             |    | 115,000 |   |
| Weighted  average shares outstanding – diluted            |   | 4,453,000                           |    | 4,552,000 |   |

 

**5.****                                      Supplementalcash flow information**

 
|                                    |   | **Three  months ended November 30** |    |
|-----------------------------------------|--------|-------------------------------------|---------|
|                                    |   | **2001**                            |    | **2002** |   |
| Cash  paid during the period:           |   |                                |    |   |   |
| Interest                                |   | $                                   | 694,000 |   | $ | 369,000 |   |
| Income  taxes                           |   | $                                   | 9,000   |   | $ | 741,000 |   |
| Non-cash  financing activity:           |   |                                |    |   |   |
| Common  stock issued to ESOP and 401(k) |   |                                |    |   |   |
| Savings  and Retirement Plan            |   | $                                   | 240,000 |   | $ | 429,000 |   |

 

**6.****                                      Comprehensiveincome (loss)**

 

As part of its interest rate management program, the Companyperiodically enters into interest rate swap agreements with respect to portionsof its outstanding debt.  The purpose ofthese swaps is to mitigate the adverse effect on cash flows of an increase ininterest rates.  There was no swapagreement in place as of November 30, 2002.

 

8

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The reconciliation of net income to total comprehensive income for thethree months ending November 30, 2001 and 2002 was as follows:

 
|                                     |   | **Three  months ended November 30** |    |
|------------------------------------------|--------|-------------------------------------|---------|
|                                     |   | **2001**                            |    | **2002** |   |
| Net  income (loss)                       |   | $                                   | 505,000 |   | $ | (21,188,000 | ) |
| Changes  in value of interest rate swaps |   | 24,000                              |    | — |   |
|                                     |   |                                |    |   |   |
| Total  comprehensive income (loss)       |   | $                                   | 529,000 |   | $ | (21,188,000 | ) |

 

**7.****                                      Segmentinformation**

 

Financial information byreportable business segment is reported in the following tables:

 
|                              |   | **Three  months ended November 30** |       |
|-----------------------------------|--------|-------------------------------------|------------|
|                              |   | **2001**                            |       | **2002** |   |
| External  sales                   |   |                                |       |   |   |
| Optical  components               |   | $                                   | 13,431,000 |   | $ | 16,115,000 |   |
| Material  handling components     |   | 5,724,000                           |       | 5,861,000 |   |
| Electrical  components            |   | 3,156,000                           |       | 3,274,000 |   |
| Irrigation  components            |   | 2,327,000                           |       | 2,760,000 |   |
| Miscellaneous  plastic components |   | 543,000                             |       | 538,000 |   |
| Other                             |   | —                              |       | — |   |
| Consolidated                      |   | $                                   | 25,181,000 |   | $ | 28,548,000 |   |
|                              |   |                                |       |   |   |
| Inter-segment  sales              |   |                                |       |   |   |
| Optical  components               |   | $                                   | —     |   | $ | — |   |
| Material  handling components     |   | —                              |       | — |   |
| Electrical  components            |   | —                              |       | — |   |
| Irrigation  components            |   | —                              |       | — |   |
| Miscellaneous  plastic components |   | 494,000                             |       | 652,000 |   |
| Other                             |   | (494,000                            | )          | (652,000 | ) |
| Consolidated                      |   | $                                   | —     |   | $ | — |   |
|                              |   |                                |       |   |   |
| Total  sales                      |   |                                |       |   |   |
| Optical  components               |   | $                                   | 13,431,000 |   | $ | 16,115,000 |   |
| Material  handling components     |   | 5,724,000                           |       | 5,861,000 |   |
| Electrical  components            |   | 3,156,000                           |       | 3,274,000 |   |
| Irrigation  components            |   | 2,327,000                           |       | 2,760,000 |   |
| Miscellaneous  plastic components |   | 1,037,000                           |       | 1,190,000 |   |
| Other                             |   | (494,000                            | )          | (652,000 | ) |
| Consolidated                      |   | $                                   | 25,181,000 |   | $ | 28,548,000 |   |
|                              |   |                                |       |   |   |
| Operating  income (loss)          |   |                                |       |   |   |
| Optical  components               |   | $                                   | 1,762,000  |   | $ | 2,371,000 |   |
| Material  handling components     |   | 479,000                             |       | 508,000 |   |
| Electrical  components            |   | (20,000                             | )          | 150,000 |   |
| Irrigation  components            |   | (201,000                            | )          | (69,000 | ) |
| Miscellaneous  plastic components |   | (230,000                            | )          | (401,000 | ) |
| Other                             |   | (270,000                            | )          | (400,000 | ) |
| Consolidated                      |   | $                                   | 1,520,000  |   | $ | 2,159,000 |   |

 

9

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|                              |   | **November  30  2001** |       | **August 31  2002** |   | **November  30  2002** |   |
|-----------------------------------|--------|------------------------|------------|---------------------|--------|------------------------|--------|
| Assets                            |   |                   |       |                |   |                   |   |
| Optical  components               |   | $                      | 35,512,000 |                | $      | 38,643,000             |   | $ | 32,286,000 |   |
| Material  handling components     |   | 17,697,000             |       | 17,063,000          |   | 16,822,000             |   |
| Electrical  components            |   | 21,681,000             |       | 20,973,000          |   | 8,268,000              |   |
| Irrigation  components            |   | 14,794,000             |       | 13,679,000          |   | 7,008,000              |   |
| Miscellaneous  plastic components |   | 4,525,000              |       | 4,583,000           |   | 2,526,000              |   |
| Other                             |   | 2,771,000              |       | 2,624,000           |   | 5,784,000              |   |
|                              |   |                   |       |                |   |                   |   |
| Consolidated                      |   | $                      | 96,980,000 |                | $      | 97,565,000             |   | $ | 72,694,000 |   |

 

Interest expense andincome taxes are not shown in the above table, as they are not fully allocatedby segment.  “Other” includesinter-company eliminations and corporate and other expenses not allocated bysegment.  The impairment chargedescribed in footnote 3 to these interim financial statements was comprised ofthe following charges by segment: $5,953,000 in Optical Components, $7,851,000,net of an income tax benefit of $4,812,000, in Electrical Components,$6,831,000 in Irrigation Components and $1,708,000 in Miscellaneous PlasticComponents.

 

10

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**MANAGEMENT’S****DISCUSSIONAND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

 

Statements contained in this Quarterly Report on Form 10-Q/A, which arenot purely historical, are forward-looking statements within the meaning ofSection 27A of the Securities Act of 1933 and Section 21E of the SecuritiesExchange Act of 1934, including but not limited to statements regarding Summa’sexpectations, hopes, beliefs, intentions or strategies regarding the future,such as those set forth in Part II, Item 1 “Legal Proceedings” below.  Actual results could differ materially fromthose projected in any forward-looking statements as a result of a number offactors, including those detailed in this “Management’s Discussion andAnalysis” section and elsewhere herein and in the Company’s Annual Report onForm 10-K for the fiscal year ended August 31, 2002.  The forward-looking statements are made as of the date hereof,and the Company assumes no obligation to update the forward-looking statements,or to update the reasons why actual results could differ materially from thoseprojected in the forward-looking statements.

 

Summa manufacturesplastic products for diverse commercial and industrial markets. Through itsfive reportable segments, Summa designs and manufactures injection-molded andthermo-formed plastic optical components for OEM customers in the lightingindustry; modular plastic conveyor belt and chain for the food processingindustry; engineered plastic fittings, valves, filters and tubing for theagricultural irrigation industry; molded plastic coil forms (“bobbins”) for usein transformers, motors, relays and switches; and other molded and extruded plasticcomponents for diverse industries.

 

Growth has been achievedby acquisition, development of new products and expansion of the Company’ssales organization.  There can be noassurance that Summa will be able to continue to consummate acquisitions, developnew products or expand sales to sustain rates of revenue growth andprofitability in future periods comparable to those experienced in the pastseveral years.  Any future success thatthe Company may achieve will depend upon many factors including factors whichmay be beyond the control of Summa or which cannot be predicted at thistime.  See “Risk Factors” in the“Management’s Discussion and Analysis of Financial Condition and Results ofOperations” section of the Company’s Annual Report on Form 10-K for the fiscalyear ended August 31, 2002.

 

***Critical AccountingPolicies and Estimate***s

 

The following discussion and analysis of theCompany’s financial condition and results of operations are based upon theconsolidated financial statements of the Company, which have been prepared inaccordance with accounting principles generally accepted in the United Statesof America. The preparation of such financial statements requires management tomake estimates and assumptions in applying certain critical accounting policies.Certain accounting estimates are particularly sensitive because of theirsignificance to the Company’s condensed consolidated financial statements andbecause of the possibility that future events affecting the estimates coulddiffer markedly from current expectations. The Company believes that thefollowing are some of the more critical judgment areas in the application ofits accounting policies that affect the Company’s financial statements.

 

**Impairmentof Long-Lived Assets and Long-Lived Assets to be Disposed of.**  The Company reviews itslong-lived assets and certain identifiable intangibles for impairment wheneverevents or changes in circumstances indicate that the carrying amount of anasset may not be recoverable. Recoverability of assets to be held and used ismeasured by a comparison of the carrying amount of an asset to the undiscountedfuture operating cash flows expected to be generated by the asset. If suchassets are considered to be impaired, the impairment to be recognized is measuredby the amount by which the carrying amount of the assets exceeds the fair valueof the assets. Assets to be disposed of by sale are reported at the lower ofthe carrying amount or fair value less costs to sell.

 

The Company has a significant amount of property and equipment andintangible assets. The determination as to whether events or changes incircumstances indicate that the carrying amount of an asset may not berecoverable involves management’s judgment. In addition, should the Companyconclude that recoverability of an asset is in question, the estimate ofundiscounted future operating cash flows to determine whether an asset isrecoverable and, if not, the final determination of the fair value of the assetare also based on the judgment of management. These judgments can be impactedby a variety of underlying assumptions, such as the general business climate,effectiveness of competition and supply and cost of resources.  Accordingly, actual results can differsignificantly from the assumptions made by management in making its estimates.Future changes in management’s estimates could result in indicators ofimpairment and future impairment charges.

 

New accounting standards adopted by the Companyeffective September 1, 2002 eliminated the impairment recoverability tests forgoodwill and certain other intangible assets with indefinite lives and requirethat such assets be valued at the lower of their carrying value or fairvalue.  For a summary of the impairmentcharge to goodwill taken by the Company effective September 1, 2002, see Note 3in the “Notes to Condensed Consolidated Financial Statements”, above.

 

11

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Significant management judgment is involved indetermining the fair value of assets. Accordingly, future changes inmanagement’s estimates could result in additional impairment charges ofgoodwill and indefinite lived intangible assets.

 

**Valuation of Inventory. **The Company valuesits inventories at the lower of cost or market using the first-in, first-out(FIFO) method. Accordingly, the Company records adjustments to the value ofinventory based upon obsolescence and changes in market value as permanentchanges in the carrying amount ofsuch inventory until its ultimate sale or other disposition. The Company hasevaluated the current level of inventories considering planned sales volume andother factors and, based on this evaluation, has recorded adjustments to costof goods sold to adjust inventory to lower of cost or market.  These adjustments are estimates, which couldvary significantly, either favorably or unfavorably, from actual requirementsif future economic conditions, customer demand or competition differ fromexpectations.

 

***Results of Operations***

 

The following table sets forth certain information, derived fromSumma’s unaudited condensed consolidated statements of income, as a percent ofsales for the three month periods ended November 30, 2002 and the Company’seffective income tax rate during those periods:

 
|                                                                         |   | **Three  months ended November 30** |   |
|------------------------------------------------------------------------------|--------|-------------------------------------|--------|
|                                                                         |   | **2001**                            |   | **2002** |   |
| Net  sales                                                                   |   | 100.0                               | %      | 100.0 | % |
| Cost  of sales                                                               |   | 72.6                                | %      | 73.2 | % |
| Gross  profit                                                                |   | 27.4                                | %      | 26.8 | % |
| S,G  & A and other expenses, net                                         |   | 21.4                                | %      | 19.3 | % |
| Operating  income                                                            |   | 6.0                                 | %      | 7.5 | % |
| Interest  expense, net                                                       |   | 2.9                                 | %      | 1.4 | % |
| Income  before tax and cumulative effect of a change in accounting principle |   | 3.1                                 | %      | 6.1 | % |
| Provision  for income taxes                                                  |   | 1.1                                 | %      | 2.1 | % |
| Income  before cumulative effect of a change in accounting principle         |   | 2.0                                 | %      | 4.0 | % |
|                                                                         |   |                                |   |   |   |
| Effective  tax rate                                                          |   | 35.7                                | %      | 34.2 | % |

 

Sales for the firstquarter ended November 30, 2002 increased $3,367,000, or 13%, compared to thesame period in the prior year, primarily due to the inclusion of sales of$2,750,000 from newly acquired operations in the Optical Componentssegment.  Sales of previously ownedbusinesses increased 2% overall, were flat in the Optical Components segment;increased   2% in the Material HandlingComponents segment; increased 4% in  theElectrical Components segment; grew  19%in the Irrigation Components segment, primarily due to off-season salespromotions; and were flat in the Miscellaneous Plastic Components segment.

 

Gross profit for the first quarter increased $757,000, or 11%, from thecomparable prior year period, primarily due to the inclusion of $568,000 ofgross profit from recently acquired operations in the Optical Componentssegment.  Gross margin decreased from27.4% to 26.8% overall, due primarily to the inclusion of newly acquiredoperations with historically lower margins.

 

Operating expenses for the three months ended November 30, 2002increased $118,000, or 2%, from the comparable prior year period, primarily dueto the inclusion of the operating expenses of recently acquired operations inthe Optical Components segment, partially off-set by the elimination ofgoodwill amortization in the quarter ended November 30, 2002.  As a percentage of sales, operating expensesdecreased from 21.4% to 19.3%, primarily as a result of the inclusion ofrecently acquired operations with historically lower operating expenses, theelimination of goodwill amortization and increased sales levels.

 

Operating income increased $639,000, or 42%, from the comparable prioryear period, due primarily to the inclusion of $301,000 from recently acquiredoperations,  the elimination of goodwillamortization of $274,000 and improvement in operations of previously ownedbusinesses of $64,000.  By segment,operating income increased $609,000 in the Optical Components segment, dueprimarily to the inclusion of recently acquired operations; increased $29,000in the Material

 

12

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Handling Components segment; increased $170,000 in the ElectricalComponents segment, primarily due to decreased goodwill amortization andoperating efficiencies; increased $132,000 in the Irrigation Componentssegment, primarily due to operating efficiencies; and decreased $171,000 in theMiscellaneous Plastic Components segment, primarily due to a continued shifttoward inter-company molding as well as inefficiencies created by the repatriationof Company tools from third party molders . Operating margin for the quarter increased from 6.0% in the firstquarter of fiscal 2001 to 7.5% in the first quarter of fiscal 2002, as a resultof the changes in gross margin and operating expenses discussed above.

 

Net interest expense for the first quarter ended November 30, 2002decreased $330,000 from the prior year first quarter, due to decreased averagedebt levels and decreased interest rates.

 

The decrease in theeffective tax rate in the first quarter of fiscal 2003 versus fiscal 2002, from35.7% to 34.2%, was primarily due to the elimination of the amortization ofgoodwill, a substantial portion of which was not tax deductible, partiallyoff-set by an adverse change in the distribution of earnings among various taxjurisdictions.

 

The Company’s backlog of unfilled orders, believed to be firm, was$8,205,000 at November 30, 2001, $9,225,000 at August 31, 2002 and $8,594,000at November 30, 2002.  Because the timebetween entering an order and shipping the product and recording a sale istypically shorter than one month, backlog levels are not a reliable indicatorof future sales volume.

 

***Liquidity and Capital Resources***

 

*Working Capital. *TheCompany’s working capital was $15,250,000 at November 30, 2001, $16,301,000 atAugust 31, 2002 and $18,156,000 at November 30, 2002.  The increase in working capital during the first quarter offiscal 2003 was primarily due to a seasonal decrease in accounts payable and accruedliabilities and an increase in cash.

 

*Financing Arrangements.*  The Company has several debt relationshipsas described below.  Substantially allof the Company’s assets are pledged to secure debt.  The term debt and revolving line of credit require compliancewith financial and operating covenants.

 

Summary of the Company’sdebt at November 30, 2002:

 
| **Description  of Debt**     |   | **Balance** |       | **Weighted  Average  Interest  Rate** |   | **Additional  Availability** |      | **Due**    |      |
|------------------------------|--------|-------------|------------|---------------------------------------|--------|------------------------------|-----------|------------|-----------|
| Revolving  line of credit    |   | $           | 6,565,000  |                                  | 3.5    | %                            | $         | 8,941,000  |      | 2004 |   |
| Bank  term loans             |   | 9,284,000   |       | 7.9                                   | %      | —                       |      | 2002-2005  |      |
| Real  estate and other loans |   | 8,854,000   |       | 4.2                                   | %      | $                            | 2,000,000 |       | 2002-2007 |   |
|                         |   |        |       |                                  |   |                         |      |       |      |
| Total  debt                  |   | $           | 24,703,000 |                                  | 5.4    | %                            | $         | 10,941,000 |      |   |   |

 

Interest rates on most ofthe bank term loans are fixed for periods of four months to four years.  Interest rates on the bank line of creditare subject to market fluctuation and are subject to reduction as the Companyachieves certain financial milestones. Interest rates on most of the real estate and other loans are subject tomarket fluctuation.

 

Summary of the Company’s contractual obligations at November 30, 2002:

 
| **Contractual Obligations**    |   | **Balance**   |       | **Obligations  Due** |   |
|--------------------------------|--------|---------------|------------|----------------------|--------|
| **Within  1 year**             |   | **1-3 years** |       | **3-5 years**        |   | **After 5  years** |   |
| Long-term debt                 |   | $             | 18,138,000 |                 | $      | 5,041,000 |   | $ | 4,566,000 |   | $ | 8,531,000  |   | $ | — |   |
| Line of credit                 |   | 6,565,000     |       |                 |   | 6,565,000 |   | — |   | — |   |
| Operating leases               |   | 5,127,000     |       | 1,306,000            |   | 2,496,000 |   | 957,000 |   | 368,000 |   |
| Other long-term  obligations   |   | 2,255,000     |       | 183,000              |   | 385,000 |   | 403,000 |   | 1,284,000 |   |
| Total  contractual obligations |   | $             | 32,085,000 |                 | $      | 6,530,000 |   | $ | 14,012,000 |   | $ | 9,891,000 |   | $ | 1,652,000 |   |
|                                |        |               |            |                      |        |  |  |  |  |  |  |  |  |  |  |  |  |

 

Operating leases are primarily for manufacturing plants not owned bythe Company.

 

Summary of the Company’s contingent liabilities at November 30, 2002:

 

13

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| **Contingent Liabilities**                   |   | **Maximum  Amount** |      | **Estimated  Period of Occurrence** |   |
|----------------------------------------------|--------|---------------------|-----------|-------------------------------------|--------|
| **Within  1 year**                           |   | **1-3 years**       |      | **3-5 years**                       |   | **After 5  years** |   |
| Preferred stock  redemption                  |   | $                   | 7,868,000 |                                | $      | — |   | $ | 7,868,000 |   | — |   | — |   |
| Obligations  under standby letters of credit |   | 116,000             |      |                                | 75,000 |   |   | 41,000 |   | — |   | — |   |
| Other contingent  liabilities                |   | 1,799,000           |      | —                              |   | — |   | $ | 450,000 |   | $ | 1,349,000 |   |
| Total contingent  liabilities                |   | $                   | 9,783,000 |                                | $      | 75,000 |   | $ | 7,909,000 |   | $ | 450,000 |   | $ | 1,349,000 |   |

 

For details on the contingent preferred stock redemption obligation,see Note 4 in the “Notes to Condensed Consolidated Financial Statements” above.

 

The Company previously announced a plan to repurchase up to $2,000,000of its common stock with no time limit. As of November 30, 2002, the Company had purchased 1,000 shares at anaverage cost of $9.73 per share pursuant to this buy-back plan.

 

Net cash provided by operating activities in the first three months offiscal 2003 was $1,485,000, $14,000 more than in the first three months offiscal 2002.  Net cash used in investingactivities was $1,014,000 in the first three months of fiscal 2003, $187,000more than in the first three months of fiscal 2002.  $9,000 in cash was provided by financing activities in the firstthree months of fiscal 2003 versus $682,000 used in fiscal 2002, primarily dueto lower net payments of long-term debt.

 

Summa believes that cash flows from operations and existing creditfacilities will be sufficient to fund working capital requirements, plannedinvestments and debt service for the next twelve months.  The Company has a strategy of growth byacquisition.  In the event anacquisition plan is adopted which requires funds exceeding the availabilitydescribed above, an alternate source of funds to accomplish the acquisitionwould have to be developed.  The Companyhas 10,000,000 shares of common stock authorized, of which 4,474,492 shareswere outstanding at November 30, 2002 and 5,000,000 shares of “blank check”preferred stock authorized, of which 5,000 shares were outstanding at November30, 2002.  The Company could issueadditional shares of common or preferred stock or enter into new or revisedborrowing arrangements to raise funds.

 

**QUANTITATIVE****ANDQUALITATIVE DISCLOSURES ABOUT MARKET RISK**

 

Except for the outstanding debt and related variable interest rates setforth in “Management’s Discussion and Analysis of Financial Condition andResults of Operations — Liquidity and Capital Resources” above, there are nomaterial changes to the disclosure set forth in Item 7A of the Company’s AnnualReport on Form 10-K for the fiscal year ended August 31, 2002.

 

**EFFECTIVENESS OF DISCLOSURECONTROLS AND PROCEDURES**

 

Within the ninety days prior to the date of this report, the Companycarried out an evaluation, under the supervision and with the participation ofthe Company’s management, including the Company’s Chief Executive Officer andChief Financial Officer, of the effectiveness of the design and operation ofthe Company’s disclosure controls and procedures pursuant to Exchange Act Rule13a – 14.  Based upon that evaluation,the Chief Executive Officer and Chief Financial Officer concluded that theCompany’s disclosure controls and procedures are effective.  There were no significant changes in theCompany’s internal controls or in other factors that could significantly affectthese controls subsequent to the date of their evaluation.

 

**PART II****- OTHERINFORMATION**

 

***Item 1******. Legal Proceedings***

 

The Company encounters lawsuits from time to time in the ordinarycourse of business and, at November 30, 2002, the Company and/or its affiliateswere parties to several civil lawsuits. Summa does not expect that the resolution of these lawsuits will have amaterial adverse impact on future results of operations or financialposition.   Certain lawsuits filed againstthe Company from time to time contain claims not covered by insurance, or seekdamages in excess of policy limits, and such claims could be filed in thefuture.  Any losses that Summa maysuffer from such lawsuits, and the effect

 

14

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such litigation may have upon the reputation and marketability ofSumma’s products, could have a material adverse impact on the future results ofoperations, financial condition and/or prospects of the Company.

 

***Item 2.****** Changes in Securities and Use of Proceeds***

 

None.

 

***Item 3.****** Defaults upon Senior Securities***

 

None.

 

***Item 4******. Submission of Matters to a Vote of Security Holders***

 

None.

 

***Item 5.******   Other Information***

 

None.

 

***Item 6******.  Exhibits andReports on Form 8-K***

 

**(a)****                                  Exhibits**

 

99.1 Certification pursuant to 18 U.S.C. Section 1350

 

**(b)****                                  CurrentReports on Form 8-K**

 

None.

 

**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 theundersigned thereunto duly authorized on July 18, 2003.

 

**Summa Industries**

 
| /s/ James R. Swartwout                |                         | /s/ Trygve M. Thoresen |   |
|---------------------------------------|------------------------------|------------------------|--------|
| James R. Swartwout                    | Trygve M. Thoresen           |
| President and Chief Financial Officer | Vice President and Secretary |

 

15

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**CERTIFICATION PURSUANT TO RULE 13a – 14**

**OF THE SECURITIES EXCHANGE ACT OF 1934**

 

I, James R. Swartwout, certify that:

 

1.                                       Ihave reviewed this Quarterly Report on Form 10-Q/A of Summa Industries;

 

2.                                       Basedon my knowledge, this Quarterly Report does not contain any untrue statement ofa material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements weremade, not misleading with respect to the period covered by this QuarterlyReport;

 

3.                                       Basedon my knowledge, the financial statements, and other financial informationincluded in this Quarterly Report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant asof, and for, the periods presented in this Quarterly Report;

 

4.                                       Theregistrant’s other certifying officers and I are responsible for establishingand maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a-14 and 15d-14) for the registrant and we have:

 

(a)                                  designedsuch disclosure controls and procedures to ensure that material informationrelating to the registrant, including its consolidated subsidiaries, is madeknown to us by others within those entities, particularly during the period inwhich this Quarterly Report is being prepared;

 

(b)                                 evaluatedthe effectiveness of the registrant’s disclosure controls and procedures as ofa date within 90 days prior to the filing of this Quarterly Report (the “EvaluationDate”); and

 

(c)                                  presentedin this Quarterly Report our conclusions about the effectiveness of thedisclosure controls and procedures based on our evaluation as of the EvaluationDate;

 

5.                                       Theregistrant’s other certifying officers and I have disclosed, based on our mostrecent evaluation, to the registrant’s auditors and the audit committee ofregistrant’s board of directors (or persons performing the equivalentfunctions):

 

(a)                                  allsignificant deficiencies in the design or operation of internal controls whichcould adversely affect the registrant’s ability to record, process, summarizeand report financial data and have identified for the registrant’s auditors anymaterial weaknesses in internal controls; and

 

(b)                                 anyfraud, whether or not material, that involves management or other employees whohave a significant role in the registrant’s internal controls; and

 

6.                                       Theregistrant’s other certifying officers and I have indicated in this QuarterlyReport whether there were significant changes in internal controls or in otherfactors that could significantly affect internal controls subsequent to thedate of our most recent evaluation, including any corrective actions withregard to significant deficiencies and material weaknesses.

 
|   | /s/ James R. Swartwout  |   |
|--------|-------------------------|--------|
|   | James R. Swartwout      |
|   | Chief Executive Officer |
|   | Chief Financial Officer |
|   | July 18, 2003           |

 

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