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Form 10-Q

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934

|                       |  |               
|---------------------- |  | --------------
|For The Quarter Ended  |  | March 31, 2003
|                       |  |               
|Commission file number |  | 0-7024        

The First Years Inc.

(Exact name of registrant as specified in its charter)


|                                                                             |  |                                                
|---------------------------------------------------------------------------- |  | -----------------------------------------------
|Massachusetts
(State or other jurisdiction of
incorporation or organization) |  | 04-2149581
(I.R.S. Employer
Identification No.)

One Kiddie Drive, Avon, Massachusetts 02322-1171

(Address of principal executive offices)


(Zip Code)


(508) 588-1220

(Registrants telephone number, including area code)


n/a

(Former name, former address and former fiscal year,
if changed since last report)


Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes
[X].     No [   ].

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

Yes
[   ].     No [X].

The number of shares of Registrants common stock outstanding on April 30,
2003 was 8,226,430.





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|                                                 |                                                                                               |                                                      |  |  |  |  |  | 
|------------------------------------------------ | --------------------------------------------------------------------------------------------- | ---------------------------------------------------- |  |  |  |  |  | 
|                                                 |                                                                                               | CONDENSED CONSOLIDATED BALANCE SHEETS               
|                                                 |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF INCOME         
|                                                 |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS     
|                                                 |                                                                                               | NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|Part I                                          
|                                                 | 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. Controls and Procedures                                                              
|PART II  OTHER INFORMATION                     
|SIGNATURES                                      
|CERTIFICATIONS                                  
|EXHIBIT INDEX                                   
|Ex-99.1 Certification of Chief Executive Officer
|Ex-99.2 Certification of Chief Financial Officer



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THE FIRST YEARS INC.

INDEX

|                                                                                      |  |      |       | 
|------------------------------------------------------------------------------------- |  | ---- | ----- | 
|                                                                                      |  | Page
|PART I  FINANCIAL INFORMATION:                                                       |  |      |       | 
|Condensed Consolidated Balance Sheets                                                 |  |      | 1     | 
|Condensed Consolidated Statements of Income                                           |  |      | 2     | 
|Condensed Consolidated Statements of Cash Flows                                       |  |      | 3     | 
|Notes to Condensed Consolidated Financial Statements                                  |  |      | 4-6   | 
|Managements Discussion and Analysis of Financial Condition and
Results of Operations |  |      | 7-9   | 
|Quantitative and Qualitative Disclosure about Market Risk                             |  |      | 10    | 
|Controls and Procedures                                                               |  |      | 10    | 
|PART II  OTHER INFORMATION                                                           |  |      |       | 
|Other Information                                                                     |  |      | 11    | 
|SIGNATURES                                                                            |  |      | 12    | 
|CERTIFICATIONS                                                                        |  |      | 13-14 | 
|EXHIBIT INDEX                                                                         |  |      | 15    | 





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THE FIRST YEARS INC.




CONDENSED CONSOLIDATED BALANCE SHEETS

|                                           |                                                                                                                      |                                      |                            |             |             |            |              |             |            |            | 
|------------------------------------------ | -------------------------------------------------------------------------------------------------------------------- | ------------------------------------ | -------------------------- | ----------- | ----------- | ---------- | ------------ | ----------- | ---------- | ---------- | 
|                                           |                                                                                                                      |                                      |                            |             | March 31,   |            | December 31,
|                                           |                                                                                                                      |                                      |                            |             | 2003        |            | 2002        
|                                           |                                                                                                                      |                                      |                            |             |             |            |             
|                                           |                                                                                                                      |                                      |                            |             | (Unaudited) |            |              |             |           
|ASSETS:                                    |                                                                                                                      |                                      |                            |             |             |            |              |            
|CURRENT ASSETS:                            |                                                                                                                      |                                      |                            |             |             |            |              |            
|                                           | Cash and cash equivalents                                                                                            |                                      | $                          | 19,839,828  |             |            | $            | 21,989,782  |           
|                                           | Accounts receivable, net                                                                                             |                                      |                            | 22,976,045  |             |            |              | 21,995,564  |           
|                                           | Inventories                                                                                                          |                                      |                            | 15,721,718  |             |            |              | 16,171,842  |           
|                                           | Prepaid expenses and other assets                                                                                    |                                      |                            | 880,162     |             |            |              | 1,631,942   |           
|                                           | Deferred tax assets                                                                                                  |                                      |                            | 2,251,758   |             |            |              | 2,196,400   |           
|                                           |                                                                                                                      |                                      |                            |             |             |            |              |             |           
|                                           |                                                                                                                      | Total current assets                 |                            |             | 61,669,511  |            |              |             | 63,985,530 |           
|                                           |                                                                                                                      |                                      |                            |             |             |            |              |             |           
|PROPERTY, PLANT, AND EQUIPMENT:            |                                                                                                                      |                                      |                            |             |             |            |              |            
|                                           | Land                                                                                                                 |                                      |                            | 167,266     |             |            |              | 167,266     |           
|                                           | Building and improvements                                                                                            |                                      |                            | 6,692,722   |             |            |              | 6,692,722   |           
|                                           | Machinery and molds                                                                                                  |                                      |                            | 9,722,052   |             |            |              | 9,395,859   |           
|                                           | Furniture and equipment                                                                                              |                                      |                            | 8,545,342   |             |            |              | 8,478,858   |           
|                                           |                                                                                                                      |                                      |                            |             |             |            |              |             |           
|                                           |                                                                                                                      | Total                                |                            |             | 25,127,382  |            |              |             | 24,734,705 |           
|                                           | Less accumulated depreciation                                                                                        |                                      |                            | 13,666,418  |             |            |              | 12,968,335  |           
|                                           |                                                                                                                      |                                      |                            |             |             |            |              |             |           
|                                           |                                                                                                                      | Property, plant, and equipment  net |                            |             | 11,460,964  |            |              |             | 11,766,370 |           
|                                           |                                                                                                                      |                                      |                            |             |             |            |              |             |           
|TOTAL ASSETS                               |                                                                                                                      | $                                    | 73,130,475                 |             |             | $          | 75,751,900   |            
|                                           |                                                                                                                      |                                      |                            |             |             |            |              |            
|LIABILITIES AND STOCKHOLDERS EQUITY       |                                                                                                                      |                                      |                            |             |             |            |              |            
|CURRENT LIABILITIES:                       |                                                                                                                      |                                      |                            |             |             |            |              |            
|                                           | Accounts payable and accrued expenses                                                                                |                                      | $                          | 13,122,255  |             |            | $            | 15,259,792  |           
|                                           | Accrued royalty expenses                                                                                             |                                      |                            | 405,559     |             |            |              | 1,361,836   |           
|                                           | Accrued selling expenses                                                                                             |                                      |                            | 1,464,578   |             |            |              | 3,251,482   |           
|                                           |                                                                                                                      |                                      |                            |             |             |            |              |             |           
|                                           |                                                                                                                      | Total current liabilities            |                            |             | 14,992,392  |            |              |             | 19,873,110 |           
|                                           |                                                                                                                      |                                      |                            |             |             |            |              |             |           
|DEFERRED TAX LIABILITY                     |                                                                                                                      |                                      | 1,262,200                  |             |             |            | 1,262,200    |            
|                                           |                                                                                                                      |                                      |                            |             |             |            |              |             |           
|STOCKHOLDERS EQUITY:                      |                                                                                                                      |                                      |                            |             |             |            |              |            
|                                           | Common stock                                                                                                         |                                      |                            | 1,083,405   |             |            |              | 1,081,846   |           
|                                           | Paid-in-capital                                                                                                      |                                      |                            | 9,993,304   |             |            |              | 9,854,632   |           
|                                           | Retained earnings                                                                                                    |                                      |                            | 76,096,195  |             |            |              | 73,804,237  |           
|                                           | Less treasury stock at cost, 2,607,620 and 2,599,420 shares as of
March 31, 2003 and December 31, 2002, respectively |                                      |                            | (30,217,359 | )           |            |              | (30,124,125 | )         
|                                           | Accumulated other comprehensive loss                                                                                 |                                      |                            | (79,662     | )           |            |              | 0           |           
|                                           |                                                                                                                      |                                      |                            |             |             |            |              |             |           
|                                           |                                                                                                                      |                                      | Total stockholders equity |             |             | 56,875,883 |              |             |            | 54,616,590 | 
|                                           |                                                                                                                      |                                      |                            |             |             |            |              |             |           
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY |                                                                                                                      | $                                    | 73,130,475                 |             |             | $          | 75,751,900   |            
|                                           |                                                                                                                      |                                      |                            |             |             |            |              |             |           

See accompanying notes to condensed consolidated financial statements.

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THE FIRST YEARS INC.




CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31, 2003 AND 2002
(Unaudited)

|                                             |  |      |            |      |  |   |            | 
|-------------------------------------------- |  | ---- | ---------- | ---- |  | - | ---------- | 
|                                             |  | 2003 |            | 2002
|                                             |  |      |            |     
|NET SALES                                    |  | $    | 33,886,704 |      |  | $ | 33,310,840 | 
|COST OF PRODUCTS SOLD                        |  |      | 21,672,950 |      |  |   | 21,682,131 | 
|                                             |  |      |            |      |  |   |            | 
|GROSS PROFIT                                 |  |      | 12,213,754 |      |  |   | 11,628,709 | 
|SELLING, GENERAL AND ADMINISTRATIVE EXPENSES |  |      | 8,381,837  |      |  |   | 8,009,856  | 
|                                             |  |      |            |      |  |   |            | 
|OPERATING INCOME                             |  |      | 3,831,917  |      |  |   | 3,618,853  | 
|INTEREST INCOME                              |  |      | 52,741     |      |  |   | 23,227     | 
|                                             |  |      |            |      |  |   |            | 
|INCOME BEFORE INCOME TAXES                   |  |      | 3,884,658  |      |  |   | 3,642,080  | 
|PROVISION FOR INCOME TAXES                   |  |      | 1,592,700  |      |  |   | 1,493,300  | 
|                                             |  |      |            |      |  |   |            | 
|NET INCOME                                   |  | $    | 2,291,958  |      |  | $ | 2,148,780  | 
|                                             |  |      |            |      |  |   |            | 
|BASIC EARNINGS PER SHARE                     |  | $    | 0.28       |      |  | $ | 0.26       | 
|                                             |  |      |            |      |  |   |            | 
|DILUTED EARNINGS PER SHARE                   |  | $    | 0.28       |      |  | $ | 0.25       | 
|                                             |  |      |            |      |  |   |            | 

See accompanying notes to condensed consolidated financial statements.

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THE FIRST YEARS INC.




CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE
THREE MONTHS ENDED MARCH 31, 2003 AND 2002
(Unaudited)

|                                                       |                                                                                |                                                 |                             |                                           |            |      |            |           |            |         |            |  
|------------------------------------------------------ | ------------------------------------------------------------------------------ | ----------------------------------------------- | --------------------------- | ----------------------------------------- | ---------- | ---- | ---------- | --------- | ---------- | ------- | ---------- | -
|                                                       |                                                                                |                                                 |                             |                                           |            | 2003 |            | 2002     
|                                                       |                                                                                |                                                 |                             |                                           |            |      |            |          
|CASH FLOWS FROM OPERATING ACTIVITIES:                  |                                                                                |                                                 |                             |                                           |            |      |            |          
|                                                       | Net income                                                                     |                                                 | $                           | 2,291,958                                 |            |      | $          | 2,148,780 |           
|                                                       | Adjustments to reconcile net income to net cash used for operating activities: |                                                 |                             |                                           |            |      |            |           |           
|                                                       |                                                                                | Depreciation                                    |                             |                                           | 698,083    |      |            |           | 597,247    |        
|                                                       |                                                                                | Provision for doubtful accounts                 |                             |                                           | 7,477      |      |            |           | 7,718      |        
|                                                       |                                                                                | Write-down of equipment                         |                             |                                           | 0          |      |            |           | 710        |        
|                                                       | Increase (decrease) arising from working capital items:                        |                                                 |                             |                                           |            |      |            |           |           
|                                                       |                                                                                | Accounts receivable                             |                             |                                           | (987,958   | )    |            |           | (6,158,009 | )      
|                                                       |                                                                                | Inventories                                     |                             |                                           | 450,124    |      |            |           | (66,977    | )      
|                                                       |                                                                                | Prepaid expenses and other assets               |                             |                                           | 770,180    |      |            |           | 358,927    |        
|                                                       |                                                                                | Accounts payable and accrued expenses           |                             |                                           | (2,272,557 | )    |            |           | (3,129,140 | )      
|                                                       |                                                                                | Accrued royalties                               |                             |                                           | (956,277   | )    |            |           | (568,778   | )      
|                                                       |                                                                                | Accrued selling expense                         |                             |                                           | (1,786,904 | )    |            |           | (1,677,901 | )      
|                                                       |                                                                                |                                                 |                             |                                           |            |      |            |           |           
|                                                       |                                                                                |                                                 |                             | Net cash used for operating activities    |            |      | (1,785,874 | )         |            |         | (8,487,423 | )
|                                                       |                                                                                |                                                 |                             |                                           |            |      |            |           |           
|CASH FLOWS FROM INVESTING ACTIVITIES:                  |                                                                                |                                                 |                             |                                           |            |      |            |          
|                                                       |                                                                                | Expenditures for property, plant, and equipment |                             |                                           | (392,677   | )    |            |           | (1,577,198 | )      
|                                                       |                                                                                |                                                 |                             |                                           |            |      |            |           |           
|CASH FLOWS FROM FINANCING ACTIVITIES:                  |                                                                                |                                                 |                             |                                           |            |      |            |          
|                                                       |                                                                                | Common stock issued under stock option plans    |                             |                                           | 121,831    |      |            |           | 90,153     |        
|                                                       |                                                                                | Purchase of treasury stock                      |                             |                                           | (93,234    | )    |            |           | (7,380     | )      
|                                                       |                                                                                |                                                 |                             |                                           |            |      |            |           |           
|                                                       |                                                                                |                                                 |                             | Net cash provided by financing activities |            |      | 28,597     |           |            |         | 82,773     |  
|                                                       |                                                                                |                                                 |                             |                                           |            |      |            |           |           
|DECREASE IN CASH AND CASH EQUIVALENTS                  |                                                                                |                                                 | (2,149,954                  | )                                         |            |      | (9,981,848 | )        
|                                                       |                                                                                |                                                 |                             |                                           |            |      |            |           |           
|CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD         |                                                                                |                                                 | 21,989,782                  |                                           |            |      | 13,310,004 |          
|                                                       |                                                                                |                                                 |                             |                                           |            |      |            |           |           
|CASH AND CASH EQUIVALENTS, END OF PERIOD               |                                                                                | $                                               | 19,839,828                  |                                           |            | $    | 3,328,156  |          
|                                                       |                                                                                |                                                 |                             |                                           |            |      |            |           |           
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:      |                                                                                |                                                 |                             |                                           |            |      |            |          
|                                                       |                                                                                | Cash paid for:                                  |                             |                                           |            |      |            |           |            |        
|                                                       |                                                                                |                                                 |                             | Income taxes                              |            | $    | 2,059,627  |           |            | $       | 11,147     |  
|                                                       |                                                                                |                                                 |                             |                                           |            |      |            |           |           
|SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING ACTIVITIES: |                                                                                |                                                 |                             |                                           |            |      |            |          
|                                                       |                                                                                |                                                 | Treasury stock transactions |                                           | $          | 0    |            |           | $          | 266,063 |           
|                                                       |                                                                                |                                                 |                             |                                           |            |      |            |           |           

See accompanying notes to condensed consolidated financial statements.

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THE FIRST YEARS INC.




NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.   Basis
of Presentation Amounts in the accompanying balance sheet
as of December 31, 2002 are condensed from the Companys audited balance sheet
as of that date. All other condensed financial statements are unaudited but, in
the opinion of the Company, contain all normal recurring adjustments necessary
to present fairly the financial position as of March 31, 2003 and the results
of operations and cash flows for the periods ended March 31, 2003 and 2002.
Certain reclassifications were made to prior year amounts in order to conform
to the current year presentation. The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
The results of operations for the three-month period ended March 31, 2003 are
not necessarily indicative of the results to be expected for the full year.

Stock-Based Compensation Pursuant to Statement of Financial Accounting
Standards (SFAS) No. 123, Accounting for Stock-Based Compensation, the
Company applies the recognition and measurement principles of Accounting
Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to
Employees, to its stock options and other stock-based compensation plans.

In accordance with APB No. 25, compensation cost for stock options is
recognized in income based on the excess, if any, of the quoted market price of
the stock at the grant date of the award or other measurement date over the
amount an employee must pay to acquire the stock. Generally, the exercise price
for stock options granted to employees equals or exceeds the fair market value
of the Companys common stock at the date of grant, thereby resulting in no
recognition of compensation expense by the Company.

The following table illustrates the effect on net income and earnings per
share if the Company had applied the fair value recognition provisions of SFAS
No. 123 to stock-based employee compensation. The estimated fair value of each
of the Companys options is calculated using the Binomial option-pricing model.

|                                                                                                     |  |   |           |   |      |   |           |   | 
|---------------------------------------------------------------------------------------------------- |  | - | --------- | - | ---- | - | --------- | - | 
|                                                                                                     |  |   | 2003      |   | 2002
|                                                                                                     |  |   |           |   |     
|Net Income - as reported                                                                             |  | $ | 2,291,958 |   |      | $ | 2,148,780 |  
|Less: Stock-based employee compensation expense
determined under fair value based method, net of tax |  |   | (279,786  | ) |      |   | (344,771  | )
|                                                                                                     |  |   |           |   |      |   |           |  
|Net income  pro forma                                                                               |  | $ | 2,012,172 |   |      | $ | 1,804,009 |  
|                                                                                                     |  |   |           |   |      |   |           |  
|Earnings per share                                                                                   |  |   |           |   |      |   |           |  
|Basic  as reported                                                                                  |  | $ | 0.28      |   |      | $ | 0.26      |  
|Basic  pro forma                                                                                    |  | $ | 0.24      |   |      | $ | 0.22      |  
|Diluted  as reported                                                                                |  | $ | 0.28      |   |      | $ | 0.25      |  
|Diluted  pro forma                                                                                  |  | $ | 0.24      |   |      | $ | 0.22      |  

2.   Common Stock The Company has 50,000,000 authorized shares of $.10
par value common stock with 10,834,050 and 10,818,464 shares issued and
8,226,430 and 8,219,044 shares outstanding as of March 31, 2003 and December
31, 2002, respectively.

3.   Earnings Per Share Computation of earnings per share (EPS) is
as follows:

|                                            |  |                    |           |      |  |   |           | 
|------------------------------------------- |  | ------------------ | --------- | ---- |  | - | --------- | 
|                                            |  | Three Months Ended
|                                            |  | March 31,         
|                                            |  |                   
|                                            |  | 2003               |           | 2002
|                                            |  |                    |           |     
|Weighted Average Shares Outstanding         |  |                    | 8,219,370 |      |  |   | 8,177,564 | 
|Effect of Dilutive
Shares                   |  |                    | 97,672    |      |  |   | 263,816   | 
|                                            |  |                    |           |      |  |   |           | 
|Weighted Average Diluted Shares Outstanding |  |                    | 8,317,042 |      |  |   | 8,441,380 | 
|                                            |  |                    |           |      |  |   |           | 
|Net
Income                                  |  | $                  | 2,291,958 |      |  | $ | 2,148,780 | 
|                                            |  |                    |           |      |  |   |           | 
|Basic Earnings Per Share                    |  | $                  | 0.28      |      |  | $ | 0.26      | 
|                                            |  |                    |           |      |  |   |           | 
|Diluted Earnings Per Share                  |  | $                  | 0.28      |      |  | $ | 0.25      | 
|                                            |  |                    |           |      |  |   |           | 

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Options to purchase 821,493 shares of common stock for the three months
ended March 31, 2003 were not included in the computation of diluted EPS
for that period because the exercise prices of those options were greater than the average
market price of the Companys common stock. Options to purchase 615,973 shares
of common stock for the three months ended March 31, 2002 were not included in
the computation of diluted EPS for that period because the exercise prices of those options
were greater than the average market price of the Companys common stock.

4.   Derivative
Instruments The Company uses derivative financial
instruments in the form of foreign currency forward exchange contracts to
manage foreign currency risks on future cash flows emanating from sales
denominated in foreign currencies and the receipt of cash from such
transactions. It is the Companys policy to execute such instruments with
creditworthy banks and not to enter into derivative financial instruments for
speculative purposes.

Currency contracts are designated as, and are highly effective as, hedges
of anticipated sales in specific currencies. Prior to an anticipated
transaction closing, the gain or loss on the forward exchange contract is
accumulated in other comprehensive income, and reclassified against revenue
when the hedged transaction is recorded. Subsequent changes in the value of the
contract are recorded in the income statement, generally as an offset to gains
or losses on the receivables generated by the sales transactions.

All foreign currency forward exchange contracts are denominated in currencies
of major industrial countries. During the quarter ended March 31, 2003 the
Company entered into forward contracts maturing at various dates
through the end of 2003
to sell the equivalent of approximately $10,713,000 in foreign currencies,
the Euro, the British Pound, and the Canadian Dollar, at contracted
rates. During  the three months ended March 31, 2003, the Company
recorded an unrealized loss of $118,696, net of tax, in other
comprehensive loss for the change in the fair value of these
contracts. This loss will be
recognized in earnings as the hedged instruments affect net income during 2003.

During the three months ended March 31, 2003, the Company reclassified $39,034,
net of tax into results of operations. During 2002 the Company did not
designate the forward exchange contracts it entered into as hedges for
accounting purposes.

5.   Comprehensive Income Comprehensive income for the three months
ended March 31, 2003 and 2002 is as follows:

|                                                |  |      |           |      |  |   |           | 
|----------------------------------------------- |  | ---- | --------- | ---- |  | - | --------- | 
|                                                |  | 2003 |           | 2002
|                                                |  |      |           |     
|Net Income                                      |  | $    | 2,291,958 |      |  | $ | 2,148,780 | 
|Other
comprehensive loss, net of tax:           |  |      |           |      |  |   |           | 
|Net change in fair value of cash flow hedges    |  |      | (118,696  | )    |  |   |          | 
|Amounts reclassified into results of operations |  |      | 39,034    |      |  |   |          | 
|                                                |  |      |           |      |  |   |           | 
|Comprehensive Income                            |  | $    | 2,212,296 |      |  | $ | 2,148,780 | 
|                                                |  |      |           |      |  |   |           | 

6.   Borrowings & Line of Credit During the first three months of
2003 and 2002, the Company did not borrow against its $10,000,000 unsecured
line of credit established with a bank.

7.   New Accounting Pronouncements In July 2002, FASB issued SFAS No.
146, Accounting For Costs Associated with Exit or Disposal Activities. The
statement requires costs associated with exit or disposal activities to be
recognized when they are incurred rather than at the date of a commitment to an
exit or disposal plan. The requirements of SFAS No. 146 are effective for exit
or disposal activities initiated after January 1, 2003. The Company has not
initiated any restructuring activity subsequent to January 1, 2003.

In December 2002, the FASB issued SFAS No. 148, Accounting for
Stock-Based Compensation-Transition and Disclosurean amendment of SFAS No.
123, which provides optional transition guidance for those companies electing
to voluntarily adopt the accounting provisions of SFAS No. 123. In addition,
the statement mandates certain new disclosures that are incremental to those
required by SFAS No. 123. We will continue to account for stock-based
compensation in accordance with APB No. 25. As such, we do not expect this
standard to have a material impact on our consolidated financial position or
results of operations. We have adopted the disclosure-only provisions of SFAS
No. 148 for the quarter ended March 31, 2003.

In January 2003, the FASB issued Interpretation No. 46, Consolidation for
Variable Interest Entities, an Interpretation of ARB No. 51 which requires all
variable interest entities (VIEs) to be consolidated by the primary
beneficiary. The primary beneficiary is

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##### Table of Contents



the entity that holds the majority of the beneficial interest in the VIE. In
addition, the interpretation expands the disclosure requirements for both
variable interest entities that are consolidated as well as VIEs of which the
entity is the holder of a significant amount of beneficial interests, but not
the majority. FIN 46 is effective for all new VIEs created or acquired after
January 31, 2003. For VIEs created or acquired prior to February 1, 2003, the
provisions of FIN 46 must be applied for the first interim or annual period
beginning after June 15, 2003. We are evaluating the effect that the adoption
of FIN 46 will have on our results of operations and financial condition.
However, as we are not involved in any special purpose entities, we do not
anticipate that the effect of adopting this interpretation will be material to
our consolidated statements of income, consolidated financial position or
results of operations.

9.   Concentrations & Export Sales The Company derives sales from
products carrying The First Years brand as well as products sold under
licensing agreements. During the first three months of 2003 and 2002, net sales
of The First Years brand products were approximately $22,578,000 and
$23,473,000, respectively, while net sales derived from license and specialty
products amounted to approximately $11,309,000 and $9,838,000 in the first
three months of 2003 and 2002, respectively. Net export sales, primarily to
Europe, Canada, South America, and the Pacific Rim, were approximately
$4,660,000 and $4,061,000 during the first three months of 2003 and 2002,
respectively.

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##### Table of Contents



THE FIRST YEARS INC.




Part I, Item 2.




Managements Discussion and Analysis of Financial Condition and Results of Operations

Statements in this Quarterly Report on Form 10-Q that are not strictly
historical are forward looking statements, as defined in the Private
Securities Litigation Reform Act of 1995. Forward-looking statements are
typically identified by the words: believe, expect, anticipate, intend, are
confident, estimate and similar expressions, which by their nature refer to
future events. Actual future results may differ materially from those
anticipated depending on a variety of factors which include, but are not
limited to, trends in sales of The First Years Brand® and licensed products
including the effect of reduced economic activity, continued success of new
Disney character refreshed graphics, continued maintenance of favorable license
arrangements, continued success of market research identifying new product
opportunities, successful introduction of new products, continued product
innovation, the success of new enhancements to the Companys brand image,
growth in domestic and international sales, ability to attract and retain key
personnel, sales and earnings results, and general economic conditions
affecting consumer spending, including uncertainties relating to global
political conditions, such as terrorism and the conflict with Iraq. Information
with respect to risk factors is contained in the Companys most recent Annual
Report on Form 10-K as filed with the Securities and Exchange Commission.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. The Company does not intend
to update any of the forward looking statements after the date of this Report
to conform these statements to actual results or changes in our expectations,
except as required by law.

Critical Accounting Policies and Estimates

This discussion and analysis of our financial condition and results of
operations are based upon our consolidated financial statements, which have
been prepared in accordance with accounting principles generally accepted in
the United States. The preparation of these financial statements requires
management to make estimates and assumptions that affect the reported amounts
of assets, liabilities, revenues, expenses and related notes. Some of these
estimates require difficult, subjective and/or complex judgments about matters
that are inherently uncertain, and, as a result, actual results may differ from
those estimates. Due to the judgment and estimation involved, the following
summarized accounting policies and their application are considered to be
critical to understanding the business operations, financial condition, and
results of operations of The First Years Inc.

Revenue Recognition In accordance with Staff Accounting Bulletin No.
101, we recognize revenue when products are shipped or delivered and
substantial risks of ownership transfer to the customer, a firm sales
agreement is in place, and collectibility of the fixed or determinable sales
price is reasonably assured. Common to our industry, customers may be
authorized to return selected products and we reduce sales and accounts
receivable for actual returns and estimate future returns based on historical
trends and information available to us, including the pattern of returns
immediately following the reporting period. We also maintain allowances for
doubtful accounts for estimated losses resulting from the inability of our
customers to make required payments. If the financial condition of our
customers deteriorates, resulting in an impairment of their ability to make
payments, additional allowances may be required.

Inventories Inventories, consisting of finished goods, unpackaged
components, and supplies, are stated at the lower of cost or market with cost
determined using the first-in, first-out method. We make certain obsolescence
and other assumptions to adjust inventory based on historical experience and
current information. We write down inventory for estimated obsolete or
unmarketable inventory equal to the difference between the costs of inventory
and estimated market value, based upon assumptions about future demand and
market conditions. In the event of a write down of inventory, we also review
molds associated with those products to determine whether there has been a
significant impairment to the carrying value of the asset. If the carrying
value of these assets is considered not to be recoverable, such assets are
written down as appropriate. These assumptions, although consistently applied,
can have a significant impact on current and future operating results and
financial position.

Sales Incentives Sales incentives offered to customers to promote the
sales of our products include costs related to cooperative advertising
programs, promotions, slotting fees or buydowns, and certain rebates. In
determining these costs, we reflect activity and make estimates of certain
costs of promotional activity based on historical arrangements and information
available to us. Costs associated with sales incentives are reflected as a
reduction of revenue when recognized.

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##### Table of Contents



A. Results of Operations  First Quarter of 2003 Compared with First Quarter of 2002

Net income for the first quarter of 2003 was $2.3 million or $0.28 per
diluted share, compared with $2.1 million or $0.25 per diluted share in 2002.
Net sales for the first quarter of 2003 were $33.9 million, compared with $33.3
million in the comparable period in 2002. In spite of continued economic
weakness, net sales for the quarter ended March 31, 2003 increased modestly by
2% over the prior year comparable period. Net sales of licensed and specialty
products increased as a result of increased distribution and new product
introductions and packaging refreshing of certain existing products. These
increases were partially offset by a decrease in The First Years brand sales
resulting primarily from inventory management actions taken by several
customers.

Cost of products sold in both the first quarter of 2003 and 2002 was $21.7
million. As a percentage of sales, cost of products sold for the first quarter
of 2003 decreased to 64% from 65% in the comparable period of 2002, principally
due to product mix and planned product cost savings.

Selling, general, and administrative expenses for the first quarter of
2003 were $8.4 million, an increase of $0.4 million from the comparable period
in 2002. The increase is primarily attributable to increased payroll and
payroll-related costs associated with infrastructure improvements, mainly in
marketing and product development. As a percentage of net sales, selling,
general, and administrative expenses for the first quarter of 2003 increased to
25% from 24% in the comparable period of 2002.

In accordance with generally accepted accounting principles, the Company
provides for income taxes on an interim basis using its anticipated effective
income tax rate.

B. Financial Condition

Consolidated assets of $73.1 million at March 31, 2003 were $2.6 million
lower than at December 31, 2002.

Our cash and cash equivalents decreased to $19.8 million at March 31,
2003, from $22.0 million at December 31, 2002. The decrease resulted primarily
from $1.8 million and $0.4 million used in operating and investing activities,
respectively, offset by $0.03 million provided by financing activities.

Net cash of $1.8 million used for operating activities consisted primarily
of $2.3 million from net income adjusted for non-cash items, offset by $4.8
million used in working capital and other activities. Net cash used in working
capital and other activities resulted primarily from an increase in accounts
receivables along with decreases in accounts payables and accrued royalty and
selling expenses, which were partially offset by decreases in inventories and
prepaid expenses and other assets. Days sales outstanding were 61 for the
quarter ended March 31, 2003 and 53 for the year ended December 31, 2002. The
increase in days sales outstanding is primarily attributable to an increase in
net sales for the quarter ended March 31, 2003 as compared to the quarter ended
December 31, 2002. Inventory turns were 1.4 for the quarter ended March 31,
2003 and 1.1 for the comparable period in 2002.

Net cash of $0.4 million used in investing activities resulted from
capital expenditures. Capital expenditures in 2003 consisted primarily of
additions to machinery and molds for new production molds.

Net cash of $0.03 million was provided by financing activities consisting
of proceeds on the issuance of common stock under our stock option plans less
treasury stock purchases.

Estimated uses of cash in 2003 include capital expenditures for building
and improvements, machinery and molds, and equipment of approximately $4 - 5
million. We expect to fund expenditures for capital requirements as well as
liquidity needs from available cash balances and internally generated funds. We
have an unsecured line of credit of $10 million, which is subject to annual
renewal at the option of the bank. Any amounts outstanding under the line are
payable upon demand by the bank. For the quarter ended March 31, 2003 we had no
borrowings under the line of credit and as of December 31, 2002 there were no
balances outstanding.

Recent Accounting Pronouncements

In July 2002, FASB issued SFAS No. 146, Accounting For Costs Associated
with Exit or Disposal Activities. The statement requires costs associated with
exit or disposal activities to be recognized when they are incurred rather than
at the date of a commitment to an exit or disposal plan. The requirements of
SFAS No. 146 are effective for exit or disposal activities initiated after
January 1, 2003. We have not initiated any restructuring activity subsequent to
January 1, 2003.

In December 2002, the FASB issued SFAS No. 148, Accounting for
Stock-Based Compensation-Transition and Disclosurean amendment of SFAS No.
123, which provides optional transition guidance for those companies electing
to voluntarily adopt the accounting provisions of SFAS No. 123. In addition,
the statement mandates certain new disclosures that are incremental to those
required by SFAS No. 123. We will continue to account for stock-based
compensation in accordance with APB No. 25. As such,

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##### Table of Contents



we do not expect this standard to have a material impact on our consolidated
financial position or results of operations. We have adopted the
disclosure-only provisions of SFAS No. 148 for the quarter ended March 31,
2003.

In January 2003, the FASB issued Interpretation No. 46, Consolidation for
Variable Interest Entities, an Interpretation of ARB No. 51 which requires all
variable interest entities (VIEs) to be consolidated by the primary
beneficiary. The primary beneficiary is the entity that holds the majority of
the beneficial interest in the VIE. In addition, the interpretation expands the
disclosure requirements for both variable interest entities that are
consolidated as well as VIEs of which the entity is the holder of a
significant amount of beneficial interests, but not the majority. FIN 46 is
effective for all new VIEs created or acquired after January 31, 2003. For VIEs
created or acquired prior to February 1, 2003, the provisions of FIN 46 must be
applied for the first interim or annual period beginning after June 15, 2003.
We are evaluating the effect that the adoption of FIN 46 will have on our
results of operations and financial condition. However, as we are not involved
in any special purpose entities, we do not anticipate that the effect of
adopting this interpretation will be material to our consolidated statements of
income, consolidated financial position or results of operations.

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##### Table of Contents



Part I, Item 3.




Quantitative and Qualitative Disclosure about Market Risk

We are exposed to certain market risks, which include changes in United
States and international interest rates as well as changes in currency exchange
rates as measured against the United States dollar and each other. We attempt
to reduce material risks by using foreign currency forward exchange contracts
and managing our working capital to minimize currency and interest rate
exposure.

Foreign Currency Market Risk

Our international operations are subject to certain opportunities and
risks, including currency fluctuations. In the quarter ended March 31, 2003,
our international sales accounted for 14% of total net sales. The value of the
United States dollar affects our financial results, and changes in exchange
rates may affect our revenues, gross margins, operating expenses, and retained
earnings as expressed in United States dollars. At times, we use forward
exchange contracts to hedge cash flows arising from sales denominated in
foreign currencies to limit the impact of currency fluctuations. Principal
currencies hedged include the Euro, the British Pound, and the Canadian Dollar.
We also attempt to minimize currency exposure risk through working capital
management. At March 31, 2003, we held foreign currency contracts with a bank
whereby we are committed to deliver foreign currency at predetermined rates.
The contacts expire within one year. Based upon a sensitivity analysis, a 10%
deterioration in foreign exchange rates would cause the fair value of the
Companys financial instruments to decrease by approximately $0.9 million at
March 31, 2003. Our future commitment under these contracts totaled
approximately $8.6 million as of March 31, 2003. See also Note 4 of
the accompanying notes to our condensed consolidated financial statements for a further
description of these foreign currency contracts.

Interest Rate Risks

Changes in interest rates affect interest income earned on the Companys
cash equivalents and short-term investments, composed primarily of U.S.
treasury obligations and short-term money market instruments. We do not attempt
to reduce or eliminate our market exposure to changes in interest rates in the
U.S. or in international operations.

Also see the Companys disclosure regarding Market Risk in Item 7A of its
Annual Report on Form 10-K for the fiscal year ended December 31, 2002, as filed
with the SEC.

Part I, Item 4.




Controls and Procedures



| | (a) |  | Within the 90-day period prior to the filing of this quarterly report
on Form 10-Q, an evaluation was carried out under the supervision and
with the participation of our management, including our Chief
Executive Officer (CEO) and Chief Financial Officer (CFO), of the
effectiveness of the design and the operation of our disclosure
controls and procedures. Based on that evaluation, our CEO and CFO
have concluded that our disclosure controls and procedures are
designed to ensure that information required to be disclosed by us in
reports that we file or submit under the Securities Exchange Act of
1934 is recorded, processed, summarized and reported within the time
periods specified in SEC rules and forms and are operating in an
efficient manner.
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | There were no significant changes in our internal controls or other
factors that could significantly affect these controls,
including any corrective actions with regard to significant
deficiencies and material weaknesses, subsequent to the date
of their most recent evaluation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

-10-





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##### Table of Contents



THE FIRST YEARS INC.




PART II  OTHER INFORMATION

Item 1: Legal Proceedings

We are not involved in any legal proceedings that are material to our
business or financial condition.

Item 2: Changes in Securities and Use of Proceeds

Not Applicable

Item 3: Defaults Upon Senior Securities

Not Applicable

Item 4: Submission of Matters to a Vote of Securityholders.

No matters were submitted to a vote of security holders, through
solicitation of proxies or otherwise, during the three months ended March 31,
2003.

Item 5: Not Applicable

Item 6: Exhibits and Reports on Form 8-K

(a)  Exhibits  The following exhibits are filed as part of this Report:

| |      |  |                                                                                                                                                                                                                                           
| | ---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 3.1  |  | Restated Articles of Organization of the Company. Filed as Exhibit
3.1 to the Companys Registration Statement on Form S-1 on October 5,
1995 (File No. 33-62673) and incorporated herein by reference.                                   
|
| | 3.2  |  | By-laws of the Company. Filed as Exhibit (3)(ii) to the Companys
annual report on Form 10-K for the period ended December 31, 1999 and
incorporated herein by reference.                                                                 
|
| | 4.1  |  | Specimen certificate for shares of Common Stock of the Company. Filed
as Exhibit 4.1 to the Companys Registration Statement on Form S-1
(File No. 33-62673) and incorporated herein by reference.                                        
|
| | 4.2  |  | Rights Agreement, dated as of November 19, 2001, between the Company
and EquiServe Trust Company, N.A. Filed as Exhibit 4.1 to the
Companys Registration Statement on Form 8-A on November 20, 2001 and
incorporated herein by reference.
|
| | 99.1 |  | Certification of Chief Executive Officer pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.                                                                                                               
|
| | 99.2 |  | Certification of Chief Financial Officer pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.                                                                                                               

(b)  Reports on Form 8-K:

|                                                                                          
|------------------------------------------------------------------------------------------
|During the first quarter of 2003, the Company filed a report on Form 8-K on March 6, 2003.
|                                                                                          
|Item 5. Other Items: Press release issued by the Company on March 6, 2003.                

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---



##### Table of Contents



THE FIRST YEARS INC.




SIGNATURES

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

|             |  |                                                                                                              
|------------ |  | -------------------------------------------------------------------------------------------------------------
|             |  | THE FIRST YEARS INC.
Registrant                                                                              
|             |  |                                                                                                              
|Date 5/15/03 |  |                                                                                                              
|             |  |                                                                                                              
|             |  | By: /s/ John R. Beals                                                                                        
|             |  |                                                                                                              
|             |  | John R. Beals,
Senior Vice President and Treasurer,
(Duly Authorized Officer and Principal Financial Officer)

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##### Table of Contents






CERTIFICATIONS

I, Ronald J. Sidman, certify that:



| | 1. |  | I have reviewed this quarterly report on Form 10-Q of The First Years Inc.;                                                                                                                                                                                                                                                   
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 2. |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
|
| | 3. |  | Based on my knowledge, the financial statements, and other financial information
included in this quarterly report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this quarterly report;                   
|
| | 4. |  | The registrants other certifying officer and I are responsible for establishing
and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and have:                                                                                                         

| |    |  |                                                                                                                                                                                                                                                                                                
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) |  | designed such disclosure controls and
procedures to ensure that material
information relating to the
registrant, including its
consolidated subsidiaries, is made
known to us by others within those
entities, particularly during the
period in which this quarterly report
is being prepared;
|
| | b) |  | evaluated the effectiveness of the
registrants disclosure controls and
procedures as of a date within 90
days prior to the filing date of this
quarterly report (the Evaluation
Date); and                                                                                                  
|
| | c) |  | presented in this quarterly report
our conclusions about the
effectiveness of the disclosure
controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        



| | 5. |  | The registrants other certifying officer and I have disclosed, based on our most
recent evaluation, to the registrants auditors and the audit committee of
registrants board of directors (or persons performing the equivalent functions):
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |    |  |                                                                                                                                                                                                                                                                                               
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) |  | all significant deficiencies in the
design or operation of internal
controls which could adversely affect
the registrants ability to record,
process, summarize and report
financial data and have identified
for the registrants auditors any
material weaknesses in internal
controls; and
|
| | b) |  | any fraud, whether or not material,
that involves management or other
employees who have a significant role
in the registrants internal
controls; and                                                                                                                                        



| | 6. |  | The registrants other certifying officer and I have indicated in this quarterly
report whether there were significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|              |  |     |  |                                                                   
|------------- |  | --- |  | ------------------------------------------------------------------
|Date 05/15/03 |  |     |  |                                                                   
|              |  |     |  |                                                                   
|              |  | By: |  | /s/ Ronald J. Sidman                                              
|              |  |     |  |                                                                   
|              |  |     |  | Ronald J. Sidman,
Chairman, President, and Chief
Executive Officer

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##### Table of Contents



CERTIFICATIONS

I, John R. Beals, certify that:



| | 1. |  | I have reviewed this quarterly report on Form 10-Q of The First Years Inc.;                                                                                                                                                                                                                                                   
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 2. |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
|
| | 3. |  | Based on my knowledge, the financial statements, and other financial information
included in this quarterly report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this quarterly report;                   
|
| | 4. |  | The registrants other certifying officer and I are responsible for establishing
and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and have:                                                                                                         

| |  |    |  |                                                                                                                                                                                                                                                                                                
| |  | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | a) |  | designed such disclosure controls and
procedures to ensure that material
information relating to the
registrant, including its
consolidated subsidiaries, is made
known to us by others within those
entities, particularly during the
period in which this quarterly report
is being prepared;
| |  |    |  |                                                                                                                                                                                                                                                                                                
| |  | b) |  | evaluated the effectiveness of the
registrants disclosure controls and
procedures as of a date within 90
days prior to the filing date of this
quarterly report (the Evaluation
Date); and                                                                                                  
| |  |    |  |                                                                                                                                                                                                                                                                                                
| |  | c) |  | presented in this quarterly report
our conclusions about the
effectiveness of the disclosure
controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        



| | 5. |  | The registrants other certifying officer and I have disclosed, based on our most
recent evaluation, to the registrants auditors and the audit committee of
registrants board of directors (or persons performing the equivalent functions):
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |    |  |                                                                                                                                                                                                                                                                                               
| |  | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | a) |  | all significant deficiencies in the
design or operation of internal
controls which could adversely affect
the registrants ability to record,
process, summarize and report
financial data and have identified
for the registrants auditors any
material weaknesses in internal
controls; and
| |  |    |  |                                                                                                                                                                                                                                                                                               
| |  | b) |  | any fraud, whether or not material,
that involves management or other
employees who have a significant role
in the registrants internal
controls; and                                                                                                                                        



| | 6. |  | The registrants other certifying officer and I have indicated in this quarterly
report whether there were significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date 05/15/03

|    |  |                                                                                                                     
|--- |  | --------------------------------------------------------------------------------------------------------------------
|By: |  | /s/ John R. Beals                                                                                                   
|    |  |                                                                                                                     
|    |  | John R. Beals,
Senior Vice President  Finance and
Treasurer,
(Chief Financial Officer and Chief
Accounting Officer)

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THE FIRST YEARS INC.




EXHIBIT INDEX

|        |      |             |                                                                                                                                                                                                                                            |      | 
|------- | ---- | ----------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ---- | 
|Exhibit |      | Description |                                                                                                                                                                                                                                            | Page
|        |      |             |                                                                                                                                                                                                                                            |     
|        | 3.1  |             | Restated Articles of Organization of the Company. Filed as Exhibit
3.1 to the Companys Registration Statement on Form S-1 on October 5,
1995 (File No. 33-62673) and incorporated herein by reference.                                    |      | 
|       
|        | 3.2  |             | By-laws of the Company. Filed as Exhibit (3)(ii) to the Companys
annual report on Form 10-K for the period ended December 31, 1999 and
incorporated herein by reference.                                                                  |      | 
|       
|        | 4.1  |             | Specimen certificate for shares of Common Stock of the Company. Filed
as Exhibit 4.1 to the Companys Registration Statement on Form S-1
(File No. 33-62673) and incorporated herein by reference.                                         |      | 
|       
|        | 4.2  |             | Rights Agreement, dated as of November 19, 2001, between the Company
and EquiServe Trust Company, N.A. Filed as Exhibit 4.1 to the
Companys Registration Statement on Form 8-A on November 20, 2001 and
incorporated herein by reference. |      | 
|       
|        | 99.1 |             | Certification of Chief Executive Officer pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.                                                                                                                |      | 
|       
|        | 99.2 |             | Certification of Chief Financial Officer pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.                                                                                                                |      | 

-15-