##### Table of Contents




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SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





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FORM 10-Q





xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE


SECURITIES EXCHANGE ACT OF 1934





For the quarterly period ended September 30, 2002





 ̈ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE


SECURITIES EXCHANGE ACT OF 1934





For the transition period from  to





Commission file number 0-23489





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Access Worldwide Communications, Inc.


(Exact Name of Registrant as Specified in its Charter)





Delaware

52-1309227(State or Jurisdiction of

(I.R.S. EmployerIncorporation or Organization)

Identification No.)





4950 Communication Avenue, Suite 300Boca Raton, Florida

33431(Address of Principal Executive Offices)

(Zip Code)





(561) 226-5000


Registrants telephone number, including area code





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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 as 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 the number of shares outstanding of each of the registrants classes of common stock, as of the latest practicable date.





9,740,001 shares of Common Stock, $.01 par value, as of November 5, 2002





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##### Table of Contents




ACCESS WORLDWIDE COMMUNICATIONS, INC.





INDEX





PagesPart IFinancial InformationItem 1.

Financial StatementsConsolidated Balance SheetsSeptember 30, 2002 (unaudited) and December 31, 2001

1Consolidated Statements of Operations (unaudited)Three and Nine Months Ended September 30, 2002 and September 30, 2001

2Consolidated Statements of Cash Flows (unaudited)Nine Months Ended September 30, 2002 and September 30, 2001

3Notes to Consolidated Financial Statements

4-8Item 2.

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

9-12Item 3.

Quantitative and Qualitative Disclosures About Market Risk

12Item 4.

Controls and Procedures

12Part IIOther InformationItem 6.

Exhibits and Reports on Form 8-K

14Signatures

14Certifications

15-16







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##### Table of Contents




PART IFINANCIAL INFORMATION





ITEM 1.    FINANCIAL STATEMENTS





ACCESS WORLDWIDE COMMUNICATIONS, INC.





CONSOLIDATED BALANCE SHEETS





September 30, 2002


December 31, 2001(Unaudited)ASSETSCurrent assets:Cash and cash equivalents

$
1,216,258


$
3,373,422Accounts receivable, net of allowance for doubtful accounts of $153,019 and $80,723, respectively


11,706,869



15,358,920Unbilled receivables


3,653,678



3,795,943Other assets, net


2,090,206



2,286,600Total current assets


18,667,011



24,814,885Property and equipment, net


4,453,243



10,114,449Intangible assets, net


9,123,434



21,420,624Other assets, net


53,677



1,181,570Total assets

$
32,297,365


$
57,531,528LIABILITIES, MANDATORILY REDEEMABLE PREFERRED STOCK AND COMMON STOCKHOLDERS EQUITY (DEFICIT)Current liabilities:Current portion of indebtedness

$
5,071,527


$
30,471,375Current portion of indebtednessrelated parties


2,121,113



1,543,079Accounts payable and accrued expenses


10,311,452



10,215,514Accrued interest and other related party expenses


27,544



32,253Accrued salaries, wages and related benefits


1,968,506



2,573,213Deferred revenue


2,147,915



2,635,890Warrant payable






1,321,326Total current liabilities


21,648,057



48,792,650Long-term portion of indebtedness


47,641



3,951,973Long-term portion of indebtednessrelated parties


6,485



1,724,292Other long-term liabilities


341,834



350,405Mandatorily redeemable preferred stock, $.01 par value:2,000,000 shares authorized, 40,000 shares issued and outstanding


4,000,000



4,000,000Total liabilities and mandatorily redeemable preferred stock


26,044,017



58,819,320Commitments and contingenciesCommon stockholders equity (deficit):Common stock, $.01 par value: voting: 20,000,000 shares authorized; 9,740,001 shares issued and outstanding


97,400



97,400Additional paid-in capital


63,636,632



63,636,069Accumulated deficit


(57,480,684
)


(65,021,261
)Total common stockholders equity (deficit)


6,253,348



(1,287,792
)Total liabilities, mandatorily redeemable preferred stock and common stockholders equity (deficit)

$
32,297,365


$
57,531,528





The accompanying notes are an integral part of these financial statements.




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##### Table of Contents




ACCESS WORLDWIDE COMMUNICATIONS, INC.





CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)





Three Months Ended September
30,


Nine Months Ended September
30,2002


2001


2002


2001Revenues

$
11,246,562


$
9,781,348


$
35,510,638


$
39,791,912Cost of revenues


6,849,312



6,551,901



22,474,875



27,371,753Gross profit


4,397,250



3,229,447



13,035,763



12,420,159Selling, general and administrative expenses


4,321,703



3,402,360



12,889,203



10,972,474Amortization expense


60,534



532,489



181,602



1,598,529Income (loss) from operations


15,013



(705,402
)


(35,042
)


(150,844
)Interest income


9,532



9,923



26,189



37,707Interest incomerelated parties






317,331



197,484



1,019,100Interest expenserelated parties


(66,091
)


(115,714
)


(230,556
)


(359,791
)Interest expense


(107,397
)


(1,645,995
)


(401,420
)


(4,048,728
)Other expense






(60,000
)






(60,000
)Loss before income tax benefit


(148,943
)


(2,199,857
)


(443,345
)


(3,562,556
)Income tax benefit






(387,796
)






(704,078
)Loss from continuing operations


(148,943
)


(1,812,061
)


(443,345
)


(2,858,478
)Discontinued operations (Note 8):(Loss) income from discontinued operations, net of income tax (benefit) expense of $0, $(71,040), $(107,873) and
$17,178, respectively






(222,128
)


(467,838
)


69,742Gain on disposal of segments, net of income tax expense of $45,458 and $1,594,638 for the three and nine month periods
ended September 30, 2002, respectively


97,543







8,451,760



97,543



(222,128
)


7,983,922



69,742Net (loss) income

$
(51,400
)

$
(2,034,189
)

$
7,540,577


$
(2,788,736
)Basic (loss) earnings per share of common stock:Continuing operations

$
(0.02
)

$
(0.19
)

$
(0.05
)

$
(0.29
)Discontinued operations


0.01



(0.02
)


0.82



0.01Net (loss) income

$
(0.01
)

$
(0.21
)

$
0.77


$
(0.29
)Weighted average common shares outstanding


9,740,001



9,740,001



9,740,001



9,740,001Diluted (loss) earnings per share of common stock:Continuing operations

$
(0.02
)

$
(0.19
)

$
(0.05
)

$
(0.29
)Discontinued operations


0.01



(0.02
)


0.82



0.01Net (loss) income

$
(0.01
)

$
(0.21
)

$
0.77


$
(0.29
)Weighted average common shares outstanding


9,740,001



9,740,001



9,740,001



9,740,001





The accompanying notes are an integral part of these financial statements.




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ACCESS WORLDWIDE COMMUNICATIONS, INC.





CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)





FOR THE NINE MONTHS ENDED SEPTEMBER 30,





2002


2001Cash flows from operating activities:Net income (loss)

$
7,540,577


$
(2,788,736
)Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:Depreciation and amortization


1,365,057



2,686,841Amortization of deferred financing costs


229,966



937,371Gain on disposition of discontinued operations


(10,046,398
)


Changes in discontinued operations


(694,922
)


2,903,221Allowance for doubtful accounts


117,029



202,439Changes in operating assets and liabilities:Accounts receivables


(2,077,459
)


(3,934,044
)Unbilled receivables


55,475



(2,725,496
)Other assets


2,104,750



222,660Accounts payable and accrued expenses


(1,891,347
)


5,265,248Accrued interest and other related party expenses


(4,707
)


(1,030,336
)Accrued salaries, wages and related benefits


527,683



(1,029,508
)Deferred revenue


(43,945
)


(700,541
)Net cash (used in) provided by operating activities


(2,818,241
)


9,119Cash flows from investing activities:Additions to property and equipment, net


(577,653
)


(847,943
)Additions to property and equipment from discontinued operations, net


(267,830
)


(1,062,934
)Net proceeds from sale of discontinued operations


31,832,681



Net cash provided by (used in) investing activities


30,987,198



(1,910,877
)Cash flows from financing activities:Loan origination fees






(134,957
)Payments on capital leases


(20,607
)


(25,462
)Net (payments) borrowings under Credit Facility


(29,165,741
)


1,997,137Payments on related party debt


(1,139,773
)


(1,011,473
)Net cash (used in) provided by financing activities


(30,326,121
)


825,245Net decrease in cash and cash equivalents


(2,157,164
)


(1,076,513
)Cash and cash equivalents, beginning of period


3,373,422



1,926,140Cash and cash equivalents, end of period

$
1,216,258


$
849,627





The accompanying notes are an integral part of these financial statements.




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##### Table of Contents




ACCESS WORLDWIDE COMMUNICATIONS, INC.





NOTES TO CONSOLIDATED FINANCIAL STATEMENTS





1.    BASIS OF PRESENTATION





The accompanying unaudited consolidated financial statements of Access Worldwide Communications, Inc.
(Access Worldwide, we, our, us, or the Company) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial
information and pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, we do not include therein all of the information and footnotes required by accounting principles generally accepted in the United States of
America for a complete set of consolidated financial statements. For further information, refer to our consolidated financial statements and footnotes included in our Annual Report on Form 10-K.





The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make
estimates and assumptions that affect reported amounts included in the consolidated financial statements. In our opinion, all adjustments necessary for a fair presentation of this interim financial information have been included. Such adjustments
consisted only of normal recurring items. The results of operations for the nine months ended September 30, 2002 are not necessarily indicative of the results to be expected for the year ending December 31, 2002.





2.    RECLASSIFICATIONS





Certain reclassifications have been made to the September 30, 2001 consolidated financial statements to conform to the September 30, 2002 presentation. Such reclassifications did not change our net loss or total common
stockholders equity as previously reported.





3.    INCOME TAXES





The effective tax rate used by us to record the income tax expense for the nine months ended September 30, 2002 differs from the federal
statutory rate primarily due to a change in the New Jersey Corporation Business Tax (The Business Tax Reform Act, PL 22002, c40). The new law defers the utilization of net operating losses (these losses) generated in 2001 and prior
years. These losses cannot be used in 2002 or 2003 but instead are to be carried forward to 2004 and beyond. The impact of this change was $195,559 after taking into account a federal benefit on discontinued operations. The effective tax rate for
the nine months ended September 30, 2001 differs from the federal statutory tax rate due primarily to state income taxes and non-deductible goodwill amortization.





4.    SEVERANCE ACCRUAL





During the
first quarter of 2002, we recorded a severance accrual of $957,436 to accrue salaries, wages and related benefits for certain management employees, as the Company realigned its management team to reflect its existing business subsequent to the sale
of its Phoenix Marketing Group (Phoenix) and its Cultural Access Group (CAG) divisions (see Note 8). Such amount was included in selling, general and administrative expenses for the three months ended March 31, 2002 and the
nine months ended September 30, 2002.





5.    NEW ACCOUNTING PRONOUNCEMENTS





In June 2001, the Financial Accounting Standards Board (FASB or the Board) issued Statement of Financial
Accounting Standards No. 141 (SFAS 141), Business Combinations, and No. 142 (SFAS 142), Goodwill and Other Intangible Assets, collectively referred to as the Standards. SFAS 141 supersedes Accounting Principles
Board Opinion (APB) No. 16, Business Combinations. The provisions of SFAS 141 (1) require that the purchase method of accounting be used for all business combinations initiated after June 30, 2001, (2) provide specific criteria for the
initial recognition and measurement of intangible assets apart from goodwill, and (3) require that unamortized negative goodwill be written off immediately as an extraordinary gain instead of being deferred and amortized. SFAS 141 also requires
that, we reclassify the carrying amounts of certain intangible assets into or out of goodwill, based on certain criteria. SFAS 142 supersedes APB 17, Intangible Assets, and is effective for fiscal years beginning after December 15, 2001.




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ACCESS WORLDWIDE COMMUNICATIONS, INC.





NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)





5.    NEW ACCOUNTING PRONOUNCEMENTS (Continued)





SFAS 142 requires that
goodwill be tested annually for impairment using a two-step process. The first step is to identify a potential impairment and, in transition, this step must be measured as of the beginning of the fiscal year. However, a company has six months from
the date of adoption to complete the first step. The second step of the goodwill impairment test measures the amount of the impairment loss (measured as of the beginning of the year of adoption), if any, and must be completed by the end of our
fiscal year. Intangible assets deemed to have an indefinite life will be tested for impairment using a one-step process, which compares the fair value to the carrying amount of the asset as of the beginning of the fiscal year, and pursuant to the
requirements should be completed by the end of the second quarter of 2002. Any impairment loss resulting from the transitional impairment tests would be reflected as the cumulative effect of a change in accounting principle. The second step of the
transitional goodwill impairment test must be completed prior to the end of the year of initial application.





Effective January 1, 2002, we adopted SFAS 141, which had no effect on our accounting for prior business combinations.





Effective January 1, 2002, we adopted SFAS 142 which required companies to stop amortizing goodwill and requires an annual or when events or circumstance dictate more frequent, impairment review of goodwill. Accordingly, we
no longer record amortization expense on goodwill as of January 1, 2002. Assuming the Company adopted the provision of SFAS 142 effective January 1, 2001 and ceased amortization of goodwill, we would have reported net loss and basic and diluted loss
per share, on a proforma basis as follows:





Three Months Ended September
30, 2001


Nine Months Ended September
30, 2001As Reported


Proforma


As Reported


ProformaContinuing operations

$
(1,812,061
)

$
(1,107,485
)

$
(2,858,478
)

$
(1,282,738
)Discontinued operations


(222,128
)


51,559



69,742



262,706Net loss

$
(2,034,189
)

$
(1,055,926
)

$
(2,788,736
)

$
(1,020,032
)Basic and diluted loss per common share:Continuing operations

$
(0.19
)

$
(0.11
)

$
(0.29
)

$
(0.13
)Discontinued operations

$
(0.02
)

$
0.01


$
0.01


$
0.03Net loss

$
(0.21
)

$
(0.11
)

$
(0.29
)

$
(0.10
)Weighted average common stock outstanding


9,740,001



9,740,001



9,740,001



9,740,001





During the three months ended June 30, 2002, we completed the
transitional impairment test of our existing goodwill as of January 1, 2002 and determined that such goodwill was not impaired.





In October 2001, the Board issued SFAS No. 144 Accounting for the Impairment or Disposal of Long-Lived Assets (SFAS 144). SFAS 144 addresses (i) the recognition and measurement of the impairment of long-lived assets to be
held and used and (ii) the measurement of long-lived assets to be disposed of by sale. In addition, SFAS 144 supersedes the accounting and reporting provisions of APB No. 30 (APB 30), Reporting the Results of Operations, Reporting the
Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions, for segments of a business to be disposed of. However, SFAS 144 retains APB 30s requirement that entities report
discontinued operations separately from continuing operations and extends that reporting requirement to a component of an entity that either has been disposed of (by sale, abandonment, or in a distribution to owners) or is classified as
held for sale. SFAS 144 is effective for fiscal years beginning after December 15, 2001. The Company implemented SFAS 144 in the first quarter of 2002 (see Note 8).





In addition, in May 2002, the Board issued SFAS No. 145, Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections
(SFAS 145). SFAS 145 rescinds the automatic treatment of gains or losses from extinguishment of debt as extraordinary unless they meet the criteria for extraordinary items as outlined in APB 30. SFAS 145 also requires sale-leaseback
accounting for certain lease modifications that have economic effects that are similar to sale-leaseback transactions and makes various technical corrections to existing pronouncements. The provisions of SFAS 145 related to the rescission of FASB
Statement 4 are effective for fiscal years beginning after May 15, 2002, with early adoption encouraged. All other provisions of SFAS 145 are effective for transactions occurring after May 15, 2002, with early adoption encouraged. We do not
anticipate that adoption of SFAS 145 will have a material effect on our earnings or financial position.




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ACCESS WORLDWIDE COMMUNICATIONS, INC.





NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)





6.    (LOSSES) EARNINGS PER COMMON SHARE





The computation of weighted average number of common and common equivalent shares used in the calculation of basic and diluted (losses) earnings per share is as follows:





For the Three Months Ended September 30, Shares

For the Nine Months Ended September 30, Shares2002:Weighted average number of common shares outstandingbasic

9,740,001

9,740,001Weighted average number of common and common equivalent shares outstandingdilutive*

9,740,001

9,740,0012001:Weighted average number of common shares outstandingbasic

9,740,001

9,740,001Weighted average number of common and common equivalent shares outstandingdilutive*

9,740,001

9,740,001


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|* |  | Since the effects of the stock options and earn-out contingencies are anti-dilutive for the three and nine months ended September 30, 2002 and 2001, the effect
has not been included in the calculation of dilutive (losses) earnings per common share. The effects of stock issued pursuant to earn-out contingencies have not been included for any of the periods presented as such earn-out contingencies have not
been met.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




The computation of (losses) earnings per share was calculated based on the separate
components in our statements of operations, including net (loss) income, loss from continuing operations and (loss) income from discontinued operations. Differences in total are attributed to rounding.





7.    COMMITMENTS AND CONTINGENCIES





We are involved in legal actions arising in the ordinary course of our business. We believe that the ultimate resolution of these matters will not have a material adverse effect on our financial
position, results of operation or cash flow except as described below.





On May 29, 2001, Douglas Rebak and Joseph
Macaluso filed suit against the Company in Federal District Court for the district of New Jersey. The lawsuit seeks enforcement of an alleged amendment to an earn-out agreement between the Company and Messrs. Rebak and Macaluso relating to our
acquisition of Phoenix in 1997. Messrs. Rebak and Macaluso were two primary shareholders of Phoenix prior to the acquisition and became officers of the Company after Phoenix became a subsidiary of Access Worldwide. The suit alleges that we agreed to
amend the earn-out agreement. The lawsuit seeks actual damages of $850,000 plus additional unspecified punitive damages. We have denied the allegations of the complaint, and are defending the Company vigorously. While we believe the claim has no
legal basis, we cannot provide assurances as to the outcome of the litigation.





8.    DISCONTINUED OPERATIONS





In accordance with SFAS 144, we have reclassified as discontinued operations, the operations of our (a) CAG
division, which provided in-language, in-culture market research services and consulting services to Fortune 500 companies in a variety of industries, and which was sold on January 31, 2002 to LuminaAmericas, Inc., a provider of integrated marketing
solutions for the US-Hispanic and Latin America markets, for $1.2 million in cash, plus the assumption of certain liabilities, and (b) Phoenix, which provided pharmaceutical sample distribution services, and which was sold on February 25, 2002 to
Express Scripts, Inc., a pharmacy benefit management company, for $33.0 million in cash, plus the assumption of certain liabilities. We realized a net gain of $8.4 million on the disposal of the segments, net of income tax (benefit) expense, and
expenses incurred in connection with the transactions during the first quarter of 2002.




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ACCESS WORLDWIDE COMMUNICATIONS, INC.





NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)





8.    DISCONTINUED OPERATIONS (Continued)





During the second quarter of
2002, we agreed to the final working capital settlement in connection with the sale of our CAG division and paid $122,500 to LuminaAmericas. Such amount reduced the gain originally recorded on the disposal of segments during the three month period
ended March 31, 2002. In addition, during the second quarter of 2002, the New Jersey Corporation Business Tax authority changed its tax law regarding the utilization of net operating losses. The new law defers the utilization of net operating losses
(these losses) generated in 2001 and prior years. These losses cannot be used in 2002 or 2003 but instead are carried to 2004 and beyond. This change resulted in an increase in income tax expense of $195,559 after taking into account a
federal benefit on discontinued operations, which was recorded by the Company during the three month period ended June 30, 2002.





During the third quarter of 2002, we received notification from Express Scripts, Inc. that we would be receiving cash totaling approximately $143,000 which was remaining in our cash accounts at the time of the sale. This cash
increased the gain originally recorded and was recorded in the third quarter of 2002. As of September 30, 2002, we have received approximately $127,000.





In addition to the classification of the gain on the disposal of the segments as discontinued operations, we reclassified the (loss) income from the operations of the segments, net of the related
income tax (benefit) expense, for the period from January 1, 2002 until the date of the transactions and for the nine month period ended September 30, 2002 and the three and nine month periods ended September 30, 2001 to discontinued operations in
the accompanying statements of operations. Revenues and operating (loss) income for these two divisions were:





For the Three Months
Ended September 30,


For the Nine Months
Ended September 30,2002

2001


2002


2001Cultural Access GroupRevenues

$

$1,171,183


$358,008


$3,206,316Operating loss



(91,117
)

(370,998
)

(425,920
)Phoenix Marketing GroupRevenues



6,544,444


4,207,194


21,335,151Operating income (loss)



107,490


(7,189
)

1,504,408





9.    INDEBTEDNESS





On January 29, 2002, we entered into a purchase and sale agreement for CAG, which closed on January 31, 2002. The sale of Phoenix was
approved by the stockholders and the Bank Group on February 22, 2002, and closed shortly thereafter (see Note 8). On February 22, 2002, we repaid approximately $28.9 million outstanding pursuant to the Credit Facility from the net proceeds of these
transactions and executed the Fifth Amendment and Waiver Agreement (the Fifth Amendment). The Fifth Amendment (a) provided that the Bank Group waive the Acknowledged Events of Default under the Credit Facility and amended
certain provisions of the Credit Facility and its accompanying amendments, including requiring us to meet new financial covenants, and (b) limited the revolving committed amount, as defined in the Fifth Amendment.





On April 5, 2002, we entered into the Sixth Amendment and Waiver Agreement (the Sixth Amendment) to the Credit Facility, which
amends certain provisions of the Credit Facility, as amended, including requiring us to pay an additional $1.5 million from the remaining Phoenix transaction proceeds, to repay such amount outstanding under the Credit Facility and limiting the
revolving committed amount thereunder to (i) $5.5 million through May 31, 2002; (ii) $6.5 million from June 1, 2002 though March 31, 2003, and (iii) $5.7 million from April 1, 2003 through June 30, 2003. The stated interest rate on the outstanding
Credit Facility remained at prime plus 3%. The Sixth Amendment expires on July 1, 2003, at which time all amounts outstanding pursuant to the Credit Facility are to be paid in full.




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ACCESS WORLDWIDE COMMUNICATIONS, INC.





NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)





10.    WARRANT PAYABLE





The warrant that was issued to the Bank Group
in connection with the Credit Facility (the Warrant), that entitled the Bank Group to purchase approximately 1.5 million shares of our common stock at an exercise price of $0.01 per share, and which was scheduled to expire on April 3,
2011, was cancelled in connection with the repayment of approximately $28.9 million on the Credit Facility in connection with the execution of the Fifth Amendment.





11.    SEGMENTS





In accordance with
Statement of Financial Accounting Standards No. 131, Disclosures about Segments of an Enterprise and Related Information, our reportable segments are strategic business units that offer various products and services to different
industries principally in the United States.





The table below presents information about our reportable segments
for our continuing operations used by the chief operating decision-maker of the Company for the three and nine months ended September 30, 2002 and 2001. The following information about reportable segments for the three and nine months ended
September 30, 2002 and 2001 excludes the results of Phoenix (previously included in the Pharmaceutical Segment) and CAG (previously included in the Other Segment), as such amounts have been reclassified as discontinued operations (see Note 8):





For the three months ended September 30,





Pharmaceutical

Consumer

Segment Total

Reconciliation


Total2002:Revenues

$
5,730,129

$
5,516,433

$
11,246,562

$



$
11,246,562Gross profit


2,061,476


2,335,774


4,397,250






4,397,250EBITDA


468,646


867,285


1,335,931


(866,688
)


469,243Depreciation expense


110,487


264,396


374,883


18,813



393,696Amortization expense


60,534





60,534






60,5342001:Revenues

$
5,692,388

$
4,088,960

$
9,781,348

$



$
9,781,348Gross profit


1,625,002


1,604,445


3,229,447






3,229,447EBITDA


282,183


138,137


420,320


(208,008
)


212,312Depreciation expense


92,224


278,816


371,040


14,185



385,225Amortization expense


532,489





532,489






532,489





For the nine months ended September 30,





Pharmaceutical

Consumer

Segment Total

Reconciliation


Total2002:Revenues

$
19,661,619

$
15,849,019

$
35,510,638

$



$
35,510,638Gross profit


6,283,881


6,751,882


13,035,763






13,035,763EBITDA


1,680,365


2,069,832


3,750,197


(2,420,182
)


1,330,015Depreciation expense


328,241


800,095


1,128,336


55,119



1,183,455Amortization expense


181,602





181,602






181,6022001:Revenues

$
26,184,321

$
13,607,591

$
39,791,912

$



$
39,791,912Gross profit


6,746,774


5,673,385


12,420,159






12,420,159EBITDA


2,757,460


528,671


3,286,131


(750,134
)


2,535,997Depreciation expense


278,018


768,399


1,046,417


41,895



1,088,312Amortization expense


1,598,529





1,598,529






1,598,529




8




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##### Table of Contents




|ITEM  2. |  | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|-------- |  | -------------------------------------------------------------------------------------




The following discussion of the financial condition and results of operations of the Company should be read in conjunction with the
unaudited financial statements and notes thereto included under Item 1 of this Form 10-Q as well as our Annual Report on Form 10-K for the year ended December 31, 2001.





Critical Accounting Policies





Critical accounting policies are those policies, which require managements highest degree of judgment, estimates, and assumptions. In connection with the preparation of our interim consolidated financial statements for the
three and nine months ended September 30, 2002, we determined that the following additional accounting policy is deemed critical.





Discontinued operations:





We considered the
disposal of our Phoenix Marketing Group division (Phoenix) and Cultural Access Group division (CAG) during the three and nine months ended September 30, 2002 and 2001 to be discontinued operations pursuant to the guidance in
Statement of Financial Accounting Standards No. 144. As a result of the guidance, we determined that such amounts met the criteria established in the literature with respect to presenting such operations from discontinued businesses separately from
continuing operations of the Company.





Three Months Ended September 30, 2002 Compared to Three Months Ended
September 30, 2001





Our revenues increased $1.4 million, or 14.3%, to $11.2 million for the three months ended
September 30, 2002, compared to $9.8 million for the three months ended September 30, 2001. Revenues for the Pharmaceutical Segment remained the same at $5.7 million for the three months ended September 30, 2002 and 2001. Revenues for the Consumer
Segment increased $1.4 million, or 34.1%, to $5.5 million for the three months ended September 30, 2002, compared to $4.1 million for the three months ended September 30, 2001. The increase was attributed to an increase in consumer services programs
from existing clients.





Our cost of revenues increased $0.2 million, or 3.0%, to $6.8 million for the three months
ended September 30, 2002, compared to $6.6 million for the three months ended September 30, 2001. Cost of revenues as a percentage of revenues decreased to 60.7% for the three months ended September 30, 2002, from 67.3% for the three months ended
September 30, 2001. Cost of revenues as a percentage of revenues for the Pharmaceutical Segment for the three months ended September 30, 2002 decreased to 64.9%, compared to 71.9% for the three months ended September 30, 2001. The decrease was
attributed to the recognition of a favorable close out of medical education meeting. Cost of revenues as a percentage of revenues for the Consumer Segment decreased to 58.2% for the three months ended September 30, 2002, compared to 61.0% for the
three months ended September 30, 2001. The decrease was attributed to the increase in revenues from our existing clients.





Our selling, general and administrative expenses increased by $0.9 million, or 26.5%, to $4.3 million for the three months ended September 30, 2002, compared to $3.4 million for the three months ended September 30, 2001. Selling,
general and administrative expenses as a percentage of revenues for the Company increased to 38.4% for the three months ended September 30, 2002, compared to 34.7% for the three months ended September 30, 2001. Selling, general and administrative
expenses as a percentage of revenues for the Pharmaceutical Segment increased to 29.8% for the three months ended September 30, 2002, from 24.6% for the three months ended September 30, 2001. The increase was attributed to an increase in head count
in the information technology department, consulting expenses, bonus accruals and other operating costs. Selling, general and administrative expenses as a percentage of revenues for the Consumer Segment decreased to 30.9% for the three months ended
September 30, 2002, compared to 41.5% for the three months ended September 30, 2001. The decrease was attributed to an increase in revenues and a reduction in head count in the information technology department in the Consumer Segment.





Our amortization expense decreased $471,955, or 88.6%, to $60,534 for the three months ended September 30, 2002, compared to
$532,489 for the three months ended September 30, 2001. The decrease was due to the implementation of Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets, which ceased the amortization of goodwill
effective January 1, 2002.





Our net interest expense decreased $1.2 million, or 85.7%, to $0.2 million for
the three months ended September 30, 2002, compared to $1.4 million for the three months ended September 30, 2001. The decrease was primarily due to a pay down of approximately $30.4 million of outstanding debt obtained from the proceeds of the sale
of Phoenix and CAG, as well as, interest income from Phoenix and CAG intercompany loans for which the corresponding interest expense has been classified as discontinued operations and a lower prime rate of interest.




9




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##### Table of Contents




Nine Months Ended September 30, 2002 Compared to Nine Months Ended September
30, 2001





Our revenues decreased $4.3 million, or 10.8%, to $35.5 million for the nine months ended September
30, 2002, compared to $39.8 million for the nine months ended September 30, 2001. Revenues for the Pharmaceutical Segment decreased $6.5 million, or 24.8%, to $19.7 million for the nine months ended September 30, 2002, compared to $26.2 million for
the nine months ended September 30, 2001. The decrease was attributed to reduced or delayed scheduling of medical education meetings as our clients took a more cautious approach to meeting planning as a result of the slow-down in the economy and the
events of September 11, 2001. Revenues for our medical education business are recorded using a percentage of completion methodology whereby a portion of revenues are recorded over the life of the project including a percentage of the total projected
costs at scheduling. Revenues for the Consumer Segment increased by $2.2 million, or 16.2%, to $15.8 million for the nine months ended September 30, 2002, compared to $13.6 million for the nine months ended September 30, 2001. The increase was due
to an increase in consumer services programs from existing clients.





Our cost of revenues decreased $4.9 million,
or 17.9%, to $22.5 million for the nine months ended September 30, 2002, compared to $27.4 million for the nine months ended September 30, 2001. Cost of revenues as a percentage of revenues decreased to 63.4% for the nine months ended September 30,
2002, from 68.8% for the nine months ended September 30, 2001. Cost of revenues as a percentage of revenues for the Pharmaceutical Segment for the nine months ended September 30, 2002 decreased to 68.0%, compared to 74.0% for the nine months ended
September 30, 2001. The decrease was attributed to the recognition of a favorable close out of medical education meeting. Cost of revenues as a percentage of revenues for the Consumer Segment decreased to 57.6% for the nine months ended September
30, 2002, from 58.1% for the nine months ended September 30, 2001. The decrease was attributed to the increase in revenues from our existing clients.





Our selling, general and administrative expenses increased by $1.9 million, or 17.3%, to $12.9 million for the nine months ended September 30, 2002, compared to $11.0 million for the nine months ended
September 30, 2001. Selling, general and administrative expenses as a percentage of revenues for the Company increased to 36.3% for the nine months ended September 30, 2002, compared to 27.6% for the nine months ended September 30, 2001. Selling,
general and administrative expenses as a percentage of revenues for the Pharmaceutical Segment increased to 24.9% for the nine months ended September 30, 2002, from 16.4% for the nine months ended September 30, 2001. The increase was attributed to a
decrease in revenues at our medical education division, an increase in head count in the information technology department, severance expense recorded for certain management personnel, an increase in consulting expenses, bonus accruals and other
operating costs. Selling, general and administrative expenses as a percentage of revenues for the Consumer Segment decreased to 34.8% for the nine months ended September 30, 2002, compared to 43.4% for the nine months ended September 30, 2001. The
decrease was attributed to an increase in revenues at our Florida communication center while continuing to manage cost levels.





Our amortization expense decreased $1.4 million, or 87.5%, to $0.2 million for the nine months ended September 30, 2002, compared to $1.6 million for the nine months ended September 30, 2001. The decrease was due to the
implementation of Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets, which ceased the amortization of goodwill effective January 1, 2002.





Our net interest expense decreased $3.0 million, or 88.2%, to $0.4 million for the nine months ended September 30, 2002, compared to $3.4 million for the nine months ended
September 30, 2001. The decrease was due primarily to a pay down of approximately $30.4 million of outstanding debt from the proceeds of the sale of Phoenix and CAG, as well as, a cancellation of the Warrant, interest income from Phoenix and CAG
intercompany loans for which the corresponding interest expense has been classified as discontinued operations and a lower prime rate of interest.





Discontinued Operations





In accordance with Statement of
Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, we have reclassified as discontinued operations, the operations of our (a) CAG division, which provided in-language, in-culture
market research services and consulting services to Fortune 500 companies in a variety of industries, and which was sold on January 31, 2002 to LuminaAmericas, Inc., a provider of integrated marketing solutions for the US-Hispanic and Latin America
markets, for $1.2 million in cash, plus the assumption of certain liabilities and (b) Phoenix division, which provided pharmaceutical sample distribution services, and which was sold on February 25, 2002 to Express Scripts, Inc., a pharmacy benefit
management company, for $33.0 million in cash, plus the assumption of certain liabilities. We realized a net gain of $8.4 million on the disposal of the segments, net of income tax (benefit) expense and expenses incurred in connection with the
transactions during the first quarter of 2002.





During the second quarter of 2002, we agreed to the final working
capital settlement in connection with the sale of our CAG division and paid $122,500 to LuminaAmericas. In addition, during the second quarter of 2002, the New Jersey Corporation




10




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##### Table of Contents

Business Tax authority changed its tax law (The Business Tax Reform Act, PL 22002, c40) regarding the utilization of net operating losses. The
new law defers the utilization of net operating losses (these losses) generated in 2001 and prior years. These losses cannot be used in 2002 or 2003 but instead are carried to 2004 and beyond. This change resulted in an increase in
income tax expense of $195,559 after taking into account a federal benefit on discontinued operations.





During the
third quarter of 2002, we received notification from Express Scripts, Inc. that we would be receiving cash totaling approximately $143,000 which remained in our cash accounts at the time of the sale. This cash increased the gain on the Phoenix
transaction. As of September 30, 2002, we have received approximately $127,000.





In addition to the classification
of the gain on the disposal of the segments as discontinued operations, we reclassified the (loss) income from the operations of the segments, net of the related income tax (benefit) expense, for the period from January 1, 2002 until the closing
date of the transactions and for the nine month period ended September 30, 2002 and the three and nine month periods ended September 30, 2001 as discontinued operations in the accompanying statements of operations. Revenues and operating (loss)
income for these two divisions were:





For the Three Months Ended September 30,


For the Nine Months Ended September 30,2002

2001


2002


2001Cultural Access GroupRevenues

$


$
1,171,183


$
358,008


$
3,206,316Operating loss





(91,117
)


(370,998
)


(425,920
)Phoenix Marketing GroupRevenues





6,544,444



4,207,194



21,335,151Operating income (loss)





107,490



(7,189
)


1,504,408





Liquidity and Capital Resources





At September 30, 2002, we had negative working capital of $(2.9) million, as compared to $(24.0) million at December 31, 2001. The
negative working capital at September 30, 2002 was attributed to the Credit Facility being classified as current portion of indebtedness due to its maturity date of July 1, 2003, in accordance with generally accepted accounting principles. In
addition, a promissory note to a prior owner of an acquired business was also classified as current portion of indebtednessrelated parties due to its repayment being contingent on the repayment of the Credit Facility, in accordance with
generally accepted accounting principles. Cash and cash equivalents were $1.2 million at September 30, 2002, compared to $3.4 million at December 31, 2001.





Net cash used in operating activities during the first nine months of 2002 was $2.8 million, compared to $9,119 provided by operating activities during the first nine months of 2001. The increase in
net cash used in operating activities was due principally to an increase in accounts receivable offset by a decrease in other assets and accounts payable and accrued expenses.





Net cash provided by investing activities was $31.0 million for the first nine months of 2002, compared to net cash used in investing activities of $1.9 million for the
first nine months of 2001. The increase in cash provided by investing activities was due principally to net proceeds received from the sale of our Phoenix and CAG divisions.





Net cash used in financing activities was $30.3 million for the first nine months of 2002, compared to net cash provided by financing activities of $0.8 million for the
first nine months of 2001. The increase in net cash used in financing activities was due principally to the pay down of our Credit Facility with the net proceeds received from the sale of our Phoenix and CAG divisions.





Our capital expenditures for continuing operations for the nine months ended September 30, 2002 were approximately $578,000, and for the
nine months ended September 30, 2001 were approximately $848,000. The decrease is a result of capital expenditures incurred during 2001 due to the build-out of our Maryland communication center. All planned capital expenditures are expected to be
funded by the cash flow from operations and/or the Credit Facility. The exact amount of our future capital expenditures will depend on a number of factors including the availability under our Credit Facility.




11




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##### Table of Contents




At December 31, 2001, we were in default on all of our financial covenants under
the Credit Facility with the Bank Group. On February 22, 2002 and April 5, 2002, we renegotiated the Credit Facility with the Bank Group and entered into the Fifth and Sixth Amendment and Waiver agreements, respectively, in connection with the
Credit Facility (the Amendments). As a result of the renegotiations, the sale of our divisions and the repayment of approximately $30.4 million of the outstanding bank debt subsequent to December 31, 2001 pursuant to the Amendments, we
are now required to repay the outstanding balance on the revolving credit in full on July 1, 2003, rather than January 2, 2003, as previously provided under the Credit Facility. As of September 30, 2002, we had $5.1 million outstanding and $0.5
million available on our Credit Facility.





We believe that we will be able to maintain compliance with the
financial covenants established by the Amendments during 2002, which compliance would allow us to maintain sufficient liquidity in 2002 to fund operations. However, failure to achieve our revenue and income projections as a result of the loss of a
key customer or other factors could result in us not being able to maintain compliance with such covenants. Such non-compliance would result in an event of default, which, if not waived by the Bank Group, would result in the acceleration of the
amounts due under the Credit Facility. We would be unable to make such accelerated repayment of amounts due on the Credit Facility. Such acceleration would likely have an adverse effect on the Company.





We continue to work towards identifying new sources of financing in order to replace the existing Credit Facility and reduce our interest
rate that is presently at prime plus three percent. We believe that to the extent that our outstanding balance on the Credit Facility is not refinanced prior to maturity, we will be required to find sources other than operations to repay the
outstanding balance on the Credit Facility at maturity. If we are unable to refinance the Credit Facility on acceptable terms or find another source of repayment for the Credit Facility other than operations, then our business and financial
condition could be materially and adversely impacted. We cannot assure our stockholders that we will be able to obtain any such refinancing on terms acceptable to us or at all, or that we would otherwise be able to obtain funds to repay the Credit
Facility when due. In order to manage our indebtedness, we may from time to time consider selling divisions and/or assets, issue equity, restructure or refinance some or all of our indebtedness under the Credit Facility. Our ability to comply with
the financial covenants under the Credit Facility, repay the outstanding balance due under the Credit Facility at maturity, restructure or refinance the Credit Facility and fund planned capital expenditures will depend on our future performance,
which, to a certain extent is subject to general economic, financial, competitive, regulatory and other factors that are beyond our control.





ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





We are exposed to market risks from changes in interest rates and are subject to interest rate risks on our Credit Facility caused by changes in interest rates. Our ability to limit our exposure to market risk and interest rate risk
is restricted as a result of our current cash management arrangement under the Credit Facility. Accordingly, we are unable to enter into any derivative or similar transactions that could limit our exposure to market risk and interest rate risks. Our
Credit Facility is currently at an interest rate of prime plus 3%. The prime rate is the prime rate published by Bank of America, N.A. A one percent increase in the prime interest rate would result in a pre-tax impact to our earnings of
approximately $51,000 per year.





ITEM 4.    CONTROLS AND PROCEDURES





The Companys Chief
Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Companys disclosure controls and procedures (as such term is defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934, as amended
(the Exchange Act)) as of a date within 90 days prior to the filing date of this quarterly report (the Evaluation Date). Based on such evaluation, such officers have concluded that, as of the Evaluation Date, the
Companys disclosure controls and procedures are effective in alerting them on a timely basis to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Companys periodic
filings under the Exchange Act.





Since the Evaluation Date, there have not been any significant changes in the
Companys internal controls or in other factors that could significantly affect such controls.





Disclosure
Regarding Forward-Looking Statements





This report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Those statements represent our current expectations, beliefs, future plans and strategies, anticipated events or trends
concerning matters that are not historical facts.




12




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##### Table of Contents




Such statements involve known and unknown risks, uncertainties and other factors
that may cause the actual results to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from those expressed or implied by such forward-looking
statements include, but are not limited, to the following:





| |  |  | Our ability to pay the outstanding balance due under the Credit Facility at maturity;
| | - |  | -------------------------------------------------------------------------------------




| |  |  | Our ability to maintain sufficient liquidity in 2002 to fund our operations;
| | - |  | ----------------------------------------------------------------------------




| |  |  | Our ability to continue to comply with the financial covenants contained under the Credit Facility;
| | - |  | ---------------------------------------------------------------------------------------------------




| |  |  | Our ability to refinance or replace the Credit Facility or to find sources other than our operations to repay the outstanding balance due on the Credit Facility
at maturity;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| |  |  | The impact of our discontinued operations, particularly the sale of our Phoenix and CAG divisions, on our future financial performance, growth and liquidity;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------




| |  |  | Competition from other third-party providers and those of our clients and prospects who may decide to do the work that we do in-house;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------




| |  |  | Consolidation in the pharmaceutical, medical, telecommunications and consumer products industries which reduces the number of clients that we are able to serve;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------




| |  |  | Potential consumer saturation reducing the need for our services;
| | - |  | -----------------------------------------------------------------




| |  |  | Our ability and our clients ability to comply with state, federal and industry regulations;
| | - |  | --------------------------------------------------------------------------------------------




| |  |  | Our reliance on a limited number of major customers;
| | - |  | ----------------------------------------------------




| |  |  | Our ability to develop or fund the operations of new products or service offerings;
| | - |  | -----------------------------------------------------------------------------------




| |  |  | Our reliance on technology;
| | - |  | ---------------------------




| |  |  | Our reliance on key personnel and our labor force;
| | - |  | --------------------------------------------------




| |  |  | The possible prolonged impact of the events of September 11 and the general downturn in the U.S. economy;
| | - |  | ---------------------------------------------------------------------------------------------------------




| |  |  | The volatility of our stock price; and
| | - |  | --------------------------------------




| |  |  | The unpredictability of the outcome of litigation in which we are involved.
| | - |  | ---------------------------------------------------------------------------




The Company assumes no duty to update any forward-looking statements. For a more detailed discussion of these risks and others that could affect the Companys results,
see the Companys filings with the Securities and Exchange Commission, including the risk factors section of Access Worldwides Annual Report on Form 10-K for the year ended December 31, 2001 filed with the Securities and Exchange
Commission.




13




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##### Table of Contents




PART IIOTHER INFORMATION





ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K





(a)  Exhibits





99.1

Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002Shawkat Raslan, Chief Executive Officer.99.2

Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002John Hamerski, Chief Financial Officer.





(b)  Reports on Form 8-K





None





SIGNATURES





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





ACCESS WORLDWIDE COMMUNICATIONS, INC.





By:

/s/    SHAWKAT
RASLANShawkat Raslan, Chairman of
the Board, President, and Chief Executive Officer (principal
executive officer)





Date:  November 5, 2002





By:

/s/    JOHN
HAMERSKIJohn Hamerski, Executive Vice
President and Chief Financial Officer (principal financial
and accounting officer)





Date:  November 5, 2002




14




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##### Table of Contents




CERTIFICATIONS





I, Shawkat Raslan, certify that:





1.  I have reviewed this quarterly report on Form 10-Q of Access Worldwide Communications, Inc.;





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





3.  Based on my knowledge, the financial statements, and other financial information included in this quarterly
report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;





4.  The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:





a.  designed such disclosure controls and procedures to ensure that material information related to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;





b.  evaluated the
effectiveness of the registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the Evaluation Date); and





c.  presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;





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





a.  all significant deficiencies in the design or operation of internal controls which could adversely affect
the registrants ability to record, process, summarize and report financial data and have identified for the registrants auditors any material weaknesses in internal controls; and





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





6.  The registrants other certifying officers and I have indicated
in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions
with regard to significant deficiencies and material weaknesses.





Signature:

/s/    SHAWKAT
RASLANShawkat Raslan, Chairman of
the Board, President, and Chief Executive Officer (principal
executive officer)





Date:  November 5, 2002




15




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##### Table of Contents




CERTIFICATIONS (Continued)





I, John Hamerski, certify that:





1.  I have reviewed this quarterly report on Form 10-Q of Access Worldwide Communications, Inc.;





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





3.  Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this quarterly report;





4.  The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:





a.  designed such disclosure controls and procedures to ensure that material
information related to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;





b.  evaluated the effectiveness of the registrants disclosure controls and procedures as of a date within
90 days prior to the filing date of this quarterly report (the Evaluation Date); and





c.  presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;





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





a.  all significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability to
record, process, summarize and report financial data and have identified for the registrants auditors any material weaknesses in internal controls; and





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





6.  The registrants other certifying officers and I have indicated
in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions
with regard to significant deficiencies and material weaknesses.





Signature:

/s/    JOHN
HAMERSKIJohn Hamerski, Executive Vice
President and Chief Financial Officer (principal financial
and accounting officer)





Date:  November 5, 2002




16




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##### Table of Contents




EXHIBIT INDEX





Exhibit Number

Description99.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF
2002Chief Executive Officer99.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF
2002Chief Financial Officer