# **SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON,D.C. 20549**

 

 

 

 

**FORM 10-Q**

 

 

 

**QUARTERLYREPORT PURSUANT TO SECTION 13**

**OF THESECURITIES EXCHANGE ACT OF 1934**

 

 

 

| **For  quarter ended September 30, 2002** |   | **Commission  File Number 1-7256** |
|-------------------------------------------|--------|------------------------------------|

 

 

 

**INTERNATIONAL ALUMINUM CORPORATION**

(Exactname of Registrant as specified in its charter)

 

 

 

| **California**            |   | **95-2385235**         |
|---------------------------|--------|------------------------|
| (State  of incorporation) |   | (I.R.S.  Employer No.) |

 

 

 

 

| **767  Monterey Pass Road**          |
|--------------------------------------|
| **Monterey  Park, California 91754** |
| **(323)  264-1670**                  |
| (Principal  executive office)        |

 

 

 

Indicate by check mark whether the Registrant (1) has filed all reportsrequired to be filed by Section 13 of the Securities Exchange Act of 1934during the preceding 12 months and (2) has been subject to such filingrequirements for the past 90 days. Yes  ý  No  o

 

At November 1, 2002 there were 4,244,794 shares of Common Stockoutstanding.

 

 

 

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INTERNATIONAL ALUMINUMCORPORATION

AND SUBSIDIARIES

 

INDEX

 

 

 

 

 

 

 

 
| PART  I.  Financial Information |                                                                                         |
|--------------------------------------|----------------------------------------------------------------------------------------------|
|                                 |                                                                                         |   |
|                                 | Consolidated Balance Sheets  - September 30, 2002 and June  30, 2002                         |   |
|                                 |                                                                                         |   |
|                                 | Consolidated  Statements of Income - three  months ended September 30, 2002 and 2001         |   |
|                                 |                                                                                         |   |
|                                 | Consolidated  Statements of Cash Flows - three  months ended September 30, 2002 and 2001     |   |
|                                 |                                                                                         |   |
|                                 | Notes  to Consolidated Financial Statements                                                  |   |
|                                 |                                                                                         |   |
|                                 | Management’s Discussion and  Analysis of Financial  Condition and Results of Operations |   |
|                                 |                                                                                         |   |
|                                 | Signatures                                                                                   |   |
|                                 |                                                                                         |   |
|                                 | Certifications                                                                               |   |
|                                 |                                                                                         |
|                                 | Exhibit                                                                                      |
|                                 | 99.                                                                                          | Certifications Pursuant to 18 U.S.C. Section 1350as Adopted Pursuant to Section 906 of  theSarbanes-Oxley  Act of 2002 |
|                                      |                                                                                              |  |  |

 

 

 

2

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PART I

 

INTERNATIONALALUMINUM CORPORATION

AND SUBSIDIARIES

 

CONSOLIDATED BALANCESHEETS

 

 
|                                                  |   | **Unaudited**                |        | **Audited**                 |   |
|-------------------------------------------------------|--------|------------------------------|-------------|-----------------------------|--------|
| Assets                                                |   | **Sept. 30, 2002** |        | **June 30, 2002** |   |
|                                                  |   |                         |        |                        |   |
| Current assets:                                       |   |                         |        |                        |   |
| Cash and cash equivalents                             |   | $                            | 8,132,000   |                        | $      | 3,495,000 |   |
| Accounts receivable, net                              |   | 32,961,000                   |        | 31,811,000                  |   |
| Inventories                                           |   | 31,932,000                   |        | 33,401,000                  |   |
| Prepaid expenses and deposits                         |   | 3,512,000                    |        | 3,665,000                   |   |
| Future income tax benefits                            |   | 1,661,000                    |        | 1,675,000                   |   |
|                                                  |   |                         |        |                        |   |
| Total current assets                                  |   | 78,198,000                   |        | 74,047,000                  |   |
|                                                  |   |                         |        |                        |   |
| Property, plant and equipment, at cost                |   | 120,661,000                  |        | 122,759,000                 |   |
| Accumulated depreciation                              |   | (66,631,000                  | )           | (65,466,000                 | )      |
|                                                  |   |                         |        |                        |   |
| Net property, plant and equipment                     |   | 54,030,000                   |        | 57,293,000                  |   |
|                                                  |   |                         |        |                        |   |
| Other assets:                                         |   |                         |        |                        |   |
| Costs in excess of net assets of purchased businesses |   | 1,016,000                    |        | 1,030,000                   |   |
| Other                                                 |   | 368,000                      |        | 354,000                     |   |
|                                                  |   |                         |        |                        |   |
| Total other assets                                    |   | 1,384,000                    |        | 1,384,000                   |   |
|                                                  |   |                         |        |                        |   |
|                                                  |   | $                            | 133,612,000 |                        | $      | 132,724,000 |   |
|                                                  |   |                         |        |                        |   |
| Liabilities and Shareholders’ Equity             |   |                         |        |                        |   |
|                                                  |   |                         |        |                        |   |
| Current liabilities:                                  |   |                         |        |                        |   |
| Accounts payable                                      |   | $                            | 7,878,000   |                        | $      | 6,575,000 |   |
| Accrued liabilities                                   |   | 8,879,000                    |        | 8,295,000                   |   |
| Advances payable to banks                             |   | 662,000                      |        | 1,034,000                   |   |
| Income taxes payable                                  |   | 356,000                      |        | 86,000                      |   |
|                                                  |   |                         |        |                        |   |
| Total current liabilities                             |   | 17,775,000                   |        | 15,990,000                  |   |
|                                                  |   |                         |        |                        |   |
| Deferred income taxes                                 |   | 5,929,000                    |        | 5,929,000                   |   |
|                                                  |   |                         |        |                        |   |
| Total liabilities                                     |   | 23,704,000                   |        | 21,919,000                  |   |
|                                                  |   |                         |        |                        |   |
| Shareholders’ equity                             |   | 109,908,000                  |        | 110,805,000                 |   |
|                                                  |   |                         |        |                        |   |
|                                                  |   | $                            | 133,612,000 |                        | $      | 132,724,000 |   |

 

 

See accompanying notes to consolidated financial statements.

 

 

3

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|   |   |      |
|--------|--------|-----------|
|   |   | Unaudited |

 

INTERNATIONALALUMINUM CORPORATION

AND SUBSIDIARIES

 

CONSOLIDATED STATEMENTSOF INCOME

 

 
|                                                  |   | **Three  Months Ended**          |       |
|-------------------------------------------------------|--------|----------------------------------|------------|
|                                                  |   | **September  30,**               |       |
|                                                  |   | **    2002** |       | **2001** |   |
|                                                  |   |                             |       |   |   |
| Net sales                                             |   | $                                | 49,728,000 |   | $ | 53,264,000 |   |
| Cost of sales                                         |   | 40,366,000                       |       | 43,591,000 |   |
| Gross profit                                          |   | 9,362,000                        |       | 9,673,000 |   |
| Selling, general and administrative expenses          |   | 8,254,000                        |       | 7,950,000 |   |
| Income from operations                                |   | 1,108,000                        |       | 1,723,000 |   |
| Interest (income) expense, net                        |   | (1,000                           | )          | (21,000 | ) |
| Income from continuing operations before income taxes |   | 1,109,000                        |       | 1,744,000 |   |
| Provision for income taxes                            |   | 410,000                          |       | 636,000 |   |
| Income from continuing operations                     |   | 699,000                          |       | 1,108,000 |   |
| Income (loss) from discontinued operations            |   | —                           |       | (176,000 | ) |
| Cumulative effect of accounting change                |   | —                           |       | (7,935,000 | ) |
| Net income (loss)                                     |   | $                                | 699,000    |   | $ | (7,003,000 | ) |
|                                                  |   |                             |       |   |   |
| Earnings per share — Basic and Diluted:          |   |                             |       |   |   |
| Continuing operations                                 |   | $                                | .16        |   | $ | .26 |   |
| Discontinued operations                               |   | —                           |       | (.04 | ) |
| Cumulative effect of accounting change                |   | —                           |       | (1.87 | ) |
| Total                                                 |   | $                                | .16        |   | $ | (1.65 | ) |
|                                                  |   |                             |       |   |   |
| Shares used to compute EPS:                           |   |                             |       |   |   |
| Basic and Diluted                                     |   | 4,244,794                        |       | 4,244,794 |   |
|                                                  |   |                             |       |   |   |
| Cash dividends per share                              |   | $                                | .30        |   | $ | .30 |   |

 

 

 

See accompanying notes to consolidated financial statements.

 

 

 

4

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| Unaudited |
|-----------|

 

 

INTERNATIONALALUMINUM CORPORATION

AND SUBSIDIARIES

 

CONSOLIDATED STATEMENTS OF CASHFLOWS

 

 
|                                                |   | **Three  Months Ended** |      |
|-----------------------------------------------------|--------|-------------------------|-----------|
|                                                |   | **September  30,**      |      |
|                                                |   | **2002**                |      | **2001** |   |
|                                                |   |                    |      |   |   |
| Cash flows from operating activities:               |   |                    |      |   |   |
| Net income                                          |   | $                       | 699,000   |   | $ | (7,003,000 | ) |
| Adjustments for noncash transactions:               |   |                    |      |   |   |
| Depreciation and amortization                       |   | 1,735,000               |      | 1,785,000 |   |
| Change in deferred income taxes                     |   | —                  |      | 1,000 |   |
| Gain on sale of fixed assets                        |   | —                  |      | (631,000 | ) |
| Cumulative effect of accounting change              |   | —                  |      | 7,935,000 |   |
| Changes in assets and liabilities:                  |   |                    |      |   |   |
| Receivables                                         |   | (1,222,000              | )         | (1,871,000 | ) |
| Inventories                                         |   | 915,000                 |      | (152,000 | ) |
| Prepaid expenses and deposits                       |   | 135,000                 |      | (117,000 | ) |
| Accounts payable                                    |   | 1,350,000               |      | 1,316,000 |   |
| Accrued liabilities                                 |   | 267,000                 |      | (49,000 | ) |
| Income taxes payable                                |   | 273,000                 |      | 314,000 |   |
|                                                |   |                    |      |   |   |
| Net cash provided by operating activities           |   | 4,152,000               |      | 1,528,000 |   |
|                                                |   |                    |      |   |   |
| Cash flows from investing activities:               |   |                    |      |   |   |
| Capital expenditures                                |   | (391,000                | )         | (3,655,000 | ) |
| Proceeds from sales of capital assets               |   | 2,497,000               |      | 1,652,000 |   |
|                                                |   |                    |      |   |   |
| Net cash provided by (used in) investing activities |   | 2,106,000               |      | (2,003,000 | ) |
|                                                |   |                    |      |   |   |
| Cash flows from financing activities:               |   |                    |      |   |   |
| Dividends paid to shareholders                      |   | (1,273,000              | )         | (1,273,000 | ) |
| Net borrowing under lines of credit                 |   | (333,000                | )         | 868,000 |   |
|                                                |   |                    |      |   |   |
| Net cash used in financing activities               |   | (1,606,000              | )         | (405,000 | ) |
|                                                |   |                    |      |   |   |
| Effect of exchange rate changes                     |   | (15                     | )         | (6 | ) |
|                                                |   |                    |      |   |   |
| Net change in cash and cash equivalents             |   | 4,637,000               |      | (886,000 | ) |
|                                                |   |                    |      |   |   |
| Cash and cash equivalents at beginning of period    |   | 3,495,000               |      | 5,915,000 |   |
|                                                |   |                    |      |   |   |
| Cash and cash equivalents at end of period          |   | $                       | 8,132,000 |   | $ | 5,029,000 |   |

 

 

 

See accompanying notes to consolidated financial statements.

 

 

5

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|      |
|-----------|
| Unaudited |

 

INTERNATIONALALUMINUM CORPORATION

AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

 

 

Basis of Presentation

 

    In the opinion ofmanagement, the accompanying unaudited consolidated financial statementscontain all adjustments (which consist solely of normal recurring adjustmentsunless otherwise disclosed) necessary to present fairly, in all materialrespects, its financial position as of September 30, 2002 and June 30,2002, and the results of operations and cash flows for the three month periodsended September 30, 2002 and 2001.  Theresults of operations for the three month periods ended September 30, 2002 and2001 are not necessarily indicative of the results to be expected for the fullyear.

 

    The financial statementsincluded herein have been prepared by the Company pursuant to the rules andregulations of the Securities and Exchange Commission.  Certain information and footnote disclosuresnormally included in financial statements prepared in accordance with generallyaccepted accounting principles have been condensed or omitted pursuant to suchrules and regulations, although the Company believes that the disclosures areadequate to make the information presented not misleading.  It is suggested that these financialstatements be read in conjunction with the financial statements and the notesthereto included in the Company’s latest annual report on Form 10-K.

 

 

Comprehensive Income

 

    Comprehensive income,defined as net income and other comprehensive income, for the first quartersended September 30, 2002 and 2001 was $376,000 and $(7,209,000),respectively.  Other comprehensiveincome includes foreign currency translation adjustments recorded directly inshareholders’ equity.

 

 
| **Balance  Sheet Components**             |   | **Sept. 30,  2002** |        | **June 30,  2002** |   |
|-------------------------------------------|--------|---------------------|-------------|--------------------|--------|
|                                      |   |                |        |               |   |
| Inventories, lower of FIFO Cost or Market |   |                |        |               |   |
| Raw materials                             |   | $                   | 27,247,000  |               | $      | 28,576,000 |   |
| Work in process                           |   | 447,000             |        | 560,000            |   |
| Finished goods                            |   | 4,238,000           |        | 4,265,000          |   |
|                                      |   | $                   | 31,932,000  |               | $      | 33,401,000 |   |
|                                      |   |                |        |               |   |
| Shareholders’ Equity                 |   |                |        |               |   |
| Common stock                              |   | $                   | 4,765,000   |               | $      | 4,765,000 |   |
| Paid-in capital                           |   | 4,123,000           |        | 4,123,000          |   |
| Retained earnings                         |   | 101,367,000         |        | 101,941,000        |   |
| Accumulated other comprehensive income    |   | (347,000            | )           | (24,000            | )      |
|                                      |   | $                   | 109,908,000 |               | $      | 110,805,000 |   |

 

 

6

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|      |
|-----------|
| Unaudited |

 

Segment Information

 

    The following presents theCompany’s net sales, operating income and total assets by operating segment,reconciling to the Company’s totals. All data presented in thousands of dollars.

 

 

 
| Net Sales:         |   | **Three  Months Ended** |   |
|--------------------|--------|-------------------------|--------|
|               |   | **September  30,**      |   |
|               |   | **2002**                |   | **2001** |   |
|               |   |                    |   |   |   |
| Commercial         |   | $                       | 25,571 |   | $ | 29,636 |   |
| Residential        |   | 13,545                  |   | 13,608 |   |
| Aluminum Extrusion |   | 21,114                  |   | 25,705 |   |
| Total Segments     |   | 60,230                  |   | 68,949 |   |
| Eliminations       |   | (10,502                 | )      | (15,685 | ) |
| Total              |   | $                       | 49,728 |   | $ | 53,264 |   |

 

 

 

 
| Operating Income (Loss): |   | **Three  Months Ended** |   |
|--------------------------|--------|-------------------------|--------|
|                     |   | **September  30,**      |   |
|                     |   | **2002**                |   | **2001** |   |
|                     |   |                    |   |   |   |
| Commercial               |   | $                       | 2,433  |   | $ | 2,491 |   |
| Residential              |   | 824                     |   | 129 |   |
| Aluminum Extrusion       |   | (121                    | )      | 343 |   |
| Total Segments           |   | 3,136                   |   | 2,963 |   |
| Eliminations             |   | (60                     | )      | 157 |   |
| Corporate                |   | (1,968                  | )      | (1,397 | )* |
| Total                    |   | $                       | 1,108  |   | $ | 1,723 |   |

 

 

 

 
| Total Assets:      |   | **Sept. 30,** |    | **June 30,** |   |
|--------------------|--------|---------------|---------|--------------|--------|
|               |   | **2002**      |    | **2002**     |   |
|               |   |          |    |         |   |
| Commercial         |   | $             | 63,594  |         | $      | 63,537 |   |
| Residential        |   | 26,175        |    | 28,776       |   |
| Aluminum Extrusion |   | 35,003        |    | 34,915       |   |
| Total Segments     |   | 124,772       |    | 127,228      |   |
| Corporate          |   | 8,840         |    | 5,496        |   |
| Total              |   | $             | 133,612 |         | $      | 132,724 |   |

----

*Net of $631 gain on sale of former operating facility

 

 

 

7

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|      |
|-----------|
| Unaudited |

 

Change In Accounting

 

   The Company adopted SFAS No. 142, “Goodwill and Other Intangible Assets”effective July 1, 2001, which required that existing goodwill be reviewed forimpairment using a revised methodology. The Company completed the transitional impairment test and determinedthat a $7,935,000 non-cash transition charge was required to reducegoodwill.  The transition charge isreflected as a cumulative effect of an accounting change effective July 1, 2001and the previously reported results for the quarter ended September 30, 2001were retroactively adjusted.

 

 

 

 

 

 

 

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OFOPERATIONS

 

 

Significant Changes in Results of Operations

 

    Net sales for the first quarter endedSeptember 30, 2002 decreased by $3,536,000 or 6.6% from the comparable quarterof the prior year. Sales of the Commercial Products Group declined by$4,175,000 or 14.1% reflective of the continued soft commercial constructionmarket coupled with increased competitive conditions.  Partially offsetting this decrease is an increase of $565,000 or5.5% by the Aluminum Extrusion Group. Although net tonnage shipped, particularly in the area served by ourTexas facility, increased by 12.7% compared to the same period last year thereis continued pressure on pricing.  Salesof Residential Products increased marginally compared to the prior yearperiod.  This increase reflects theircontinuing efforts to replace sales lost due to last year’s trade union strikeat our South Gate, California facility as well as volume formerly contributedby a big-box store, amounting to 11.3% of sales last year compared to only 2.8%this year.

 

 

   Cost of sales as a percentage of net sales was 81.2% for the quarterended September 30, 2002 as opposed to 81.8% for the comparable prior yearperiod. This decrease is attributable to several somewhat offsetting factors.All segments of our business achieved decreases in their material costs.  In addition, the Residential Products Groupdecreased their labor and overhead costs reflecting their continued recoveryfrom prior year’s strike related inefficiencies.  Partially offsetting these gains were increased labor andoverhead cost percentages in the Commercial Products Group resulting fromnormal production costs being spread over significantly diminished salescoupled with increased costs associated with the start up of two new horizontalpaint lines.  Higher labor costpercentages were also incurred in our Extrusion Group as their decline inoverall volume increased unit cost of production.

 

 

8

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|      |
|-----------|
| Unaudited |

 

   Selling, general and administrative expenses increased by $304,000 fromthe prior year.  Excluding the $631,000profit on the sale of a former operating facility recorded as an offset toexpenses last year this comparison would have shown a net decrease of $327,000or 3.8%. The decrease reflects reduced employment costs in the current year aswell as the prior year containing some additional costs for strike relatedsecurity and legal services.

 

 

    The effective tax rate forthe quarter ended September 30, 2002 was 37.0% whereas the comparable period ofthe prior year was 35.8%.

 

 

 

Liquidity and Capital Resources

 

    Working capital at September30, 2002 stood at $60,423,000, an increase of $2,366,000 from June 30,2002.  The ratio of current assets tocurrent liabilities is currently 4.4 as compared to 4.6 as of the beginning ofthe year.

 

    The Company’s projected net capitalexpenditures for fiscal 2003 and related financing remain unchanged from thosedescribed in the June 30, 2002 Annual Report. The Company’s domestic line of credit remains unchanged from thatdescribed in the June 30, 2002 Annual Report to Shareholders.

 

 

 

Forward-Looking Information

 

    This report contains forward-lookingstatements with respect to the financial condition, results of operations andbusiness of the Company.  Such items aresubject to certain risks and uncertainties that could cause actual results todiffer materially from those set forth in such statements.  Readers are cautioned not to place unduereliance on these forward-looking statements, which speak only as of the datethe statement was made.  The Companyundertakes no obligation to publicly update or revise any forward-lookingstatements, whether as a result of new information, future events or otherwise.

 

 

 

Controls and Procedures

 

    Within 90 days prior to thefiling date of this report, a review was performed under the supervision andwith the participation of the Company’s management, including the ChiefExecutive Officer (“CEO”) and the Chief Financial Officer (“CFO”), of theeffectiveness of the design and operation of the Company’s disclosure controlsand procedures.  Based on that review,the Company’s management, including the CEO and CFO, concluded that theCompany’s disclosure controls and procedures were effective.  There have been no significant changes inthe Company’s internal controls or in other factors that could significantlyaffect these controls subsequent to the completion of their review.

 

 

9

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INTERNATIONALALUMINUM CORPORATION

AND SUBSIDIARIES

 

SIGNATURES

 

 

 

 

    Pursuant to the requirementsof the Securities Exchange Act of 1934, the registrant has duly caused this reportto be signed on its behalf by the undersigned thereunto duly authorized.

 
|   |              | International Aluminum  Corporation   |
|--------|-------------------|---------------------------------------|
|   |              | (Registrant)                          |
|   |              |                                  |
|   |              |                                  |
| Date:  | November 13, 2002 | MITCHELL K. FOGELMAN                  |
|   |              | Mitchell K. Fogelman                  |
|   |              | Senior Vice President —  Finance |
|   |              | (Principal Financial  Officer)        |
|   |              |                                  |
|   |              |                                  |
| Date:  | November 13, 2002 | MICHAEL J. NORRING                    |
|   |              | Michael J.  Norring                   |
|   |              | Controller                            |
|   |              | (Principal Accounting  Officer)       |

 

 

 

10

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CERTIFICATION

 

I, Cornelius C. Vanderstar, certify that:

 

1.               I have reviewedthis quarterly report on Form 10-Q of International Aluminum Corporation;

 

2.               Based on myknowledge, this quarterly report does not contain any untrue statement of amaterial fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, notmisleading with respect to the period covered by this quarterly report;

 

3.               Based on myknowledge, the financial statements, and other financial information includedin this quarterly report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, andfor, 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.               designed suchdisclosure controls and procedures to ensure that material information relatingto the registrant, including its consolidated subsidiaries, is made known to usby others within those entities, particularly during the period in which thisquarterly report is being prepared;

b.              evaluated theeffectiveness of the registrant’s disclosure controls and procedures as of adate within 90 days prior to the filing date of this quarterly report (the“Evaluation Date”); and

c.               presented inthis quarterly report our conclusions about the effectiveness of the disclosurecontrols and procedures based on our evaluation as of the Evaluation Date;

 

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

a.               all significantdeficiencies in the design or operation of internal controls which couldadversely affect the registrant’s ability to record, process, summarize andreport financial data and have identified for the registrant’s auditors anymaterial weaknesses in internal controls; and

b.              any fraud,whether or not material, that involves management or other employees who have asignificant role in the registrant’s internal controls; and

 

6.               The registrant’sother certifying officers and I have indicated in this quarterly report whetheror not there were significant changes in internal controls or in other factorsthat could significantly affect internal controls subsequent to the date of ourmost recent evaluation, including any corrective actions with regard tosignificant deficiencies and material weaknesses.

 

 
| Date: November 11, 2002 | CORNELIUS  C. VANDERSTAR   |
|-------------------------|----------------------------|
|                    | Cornelius  C. Vanderstar   |
|                    | Chairman  of the Board and |
|                    | Chief  Executive Officer   |

 

 

11

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CERTIFICATION

 

I, Mitchell K. Fogelman, certify that:

 

1.               I have reviewedthis quarterly report on Form 10-Q of International Aluminum Corporation;

 

2.               Based on myknowledge, this quarterly report does not contain any untrue statement of amaterial fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, notmisleading with respect to the period covered by this quarterly report;

 

3.               Based on myknowledge, the financial statements, and other financial information includedin this quarterly report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, 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.               designed suchdisclosure controls and procedures to ensure that material information relatingto the registrant, including its consolidated subsidiaries, is made known to usby others within those entities, particularly during the period in which thisquarterly report is being prepared;

b.              evaluated theeffectiveness of the registrant’s disclosure controls and procedures as of adate within 90 days prior to the filing date of this quarterly report (the“Evaluation Date”); and

c.               presented inthis quarterly report our conclusions about the effectiveness of the disclosurecontrols and procedures based on our evaluation as of the Evaluation Date;

 

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

a.               all significantdeficiencies in the design or operation of internal controls which couldadversely affect the registrant’s ability to record, process, summarize andreport financial data and have identified for the registrant’s auditors anymaterial weaknesses in internal controls; and

b.              any fraud,whether or not material, that involves management or other employees who have asignificant role in the registrant’s internal controls; and

 

6.               Theregistrant’s other certifying officers and I have indicated in this quarterlyreport whether or not there were significant changes in internal controls or inother factors that could significantly affect internal controls subsequent tothe date of our most recent evaluation, including any corrective actions withregard to significant deficiencies and material weaknesses.

 

 
| Date: November 11, 2002 | MITCHELL  K. FOGELMAN                 |
|-------------------------|---------------------------------------|
|                    | Mitchell  K. Fogelman                 |
|                    | Senior Vice President —  Finance |
|                    | and Chief Financial  Officer          |

 

 

12

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