UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly period ended March 31, 2005
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number: 0-18299
NEWS COMMUNICATIONS, INC.
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(Name of Small Business Issuer in Its Charter)
Nevada 13-3346991
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(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
2 Park Avenue, Suite 1405
New York, New York 10016
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (212) 689-2500
Securities Registered Pursuant to Section 12(g) of the Act:
Common Stock, $0.01 par value
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 ___
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The number of shares of common stock outstanding as of May 11, 2005 was
12,024,597.
Transitional Small Business Disclosure Format (check one) Yes No X
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NEWS COMMUNICATIONS, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
PAGE
PART I. Financial Information
Item 1. Financial Statements
Unaudited Consolidated Balance Sheet at March 31, 2005.............................3
Unaudited Consolidated Statements of Operations
for the three months ended March 31, 2005 and 2004................................4
Unaudited Consolidated Statements of Cash Flows
for the three months ended March 31, 2005 and 2004................................5
Notes to Unaudited Consolidated Financial Statements...............................6
Item 2. Management's Discussion and Analysis or Plan of Operation..........................7
Item 3. Controls and Procedures...........................................................11
PART II. Other Information
Item 6. Exhibits ............... .........................................................11
Signatures..................................................................................12
Certifications
31.1 Chief Executive Officer's Certificate, pursuant to Section 302
of the Sarbanes-Oxley Act of 2002
31.2 Chief Financial Officer's Certificate, pursuant to Section 302
of the Sarbanes-Oxley Act of 2002
32.1 Chief Executive Officer's Certificate, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
32.2 Chief Financial Officer's Certificate, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
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PART I
Financial Information
ITEM 1 - Financial Statements
News Communications, Inc. and Subsidiaries
Consolidated Balance Sheet as of March 31, 2005
(Unaudited)
Assets
Current:
Cash and cash equivalents $ 74,206
Accounts receivable - net of allowance for doubtful accounts of $182,397 973,559
Notes receivable 10,000
Other 151,936
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Total current assets 1,209,701
Restricted cash 34,102
Notes receivable, net of current portion 80,000
Property and equipment at cost- net 226,290
Goodwill 314,809
Trade names, net 456,096
Other - net 39,779
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Total assets $ 2,360,777
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Liabilities and Stockholders' deficit
Current liabilities:
Accounts payable $ 749,942
Accrued expenses 1,143,667
Income taxes payable 16,077
Notes payable and capital leases, current portion 17,411
Unearned revenue 776,358
Due to related parties 304,274
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Total current liabilities 3,007,729
Due to related parties 355,143
Notes payable and capital leases, net of current portion 34,415
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Total liabilities 3,397,287
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Commitments
Stockholders' deficit:
Preferred stock, $1.00 par value; 500,000 shares authorized: 177,529 shares issued and
outstanding: $1,864,000 aggregate liquidation value 177,529
Common stock, $.01 par value; authorized 100,000,000 shares; 12,682,931 shares
issued and 12,024,597 outstanding 126,829
Paid-in-capital preferred stock 1,568,320
Paid-in-capital common stock 27,429,323
Deficit (29,436,782)
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(134,781)
Less: Treasury stock, (658,334 common shares) - at cost (901,729)
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Total stockholders' deficit (1,036,510)
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Total liabilities and stockholder's deficit $ 2,360,777
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See accompanying notes to unaudited consolidated financial statements.
3
News Communications, Inc. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
Three Months ended March 31, 2005 2004
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Net revenues $ 2,058,264 $ 1,883,410
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Expenses:
Editorial 449,144 475,627
Production and distribution 564,568 548,600
Selling 676,560 589,034
General and administrative 1,074,189 912,384
Depreciation and amortization 34,464 46,441
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Total expenses 2,798,925 2,572,086
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Loss from operations (740,661) (688,676)
Interest expense, net (15,618) (15,992)
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Loss before provision for income taxes (756,279) (704,668)
Provision for income taxes 6,000 -
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Net loss (762,279) (704,668)
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Less: preferred dividends 282 282
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Net loss available for common stockholders $ (762,561) $ (704,950)
Loss per common share:
Basic and diluted $ (0.06) $ (0.06)
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Weighted-average number of common shares outstanding:
Basic and diluted 11,736,990 11,628,691
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See accompanying notes to unaudited consolidated financial statements.
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News Communications, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
Three Months ended March 31, 2005 2004
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Cash flows from operating activities:
Net loss $ (762,279) $ (704,668)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 34,464 46,441
Provision for doubtful accounts 8,200 16,000
Debt conversion expense related party debt 84,406 -
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable 33,538 179,166
Other current assets 66,295 (34,059)
Other assets (16,253) (9,696)
Increase (decrease) in:
Accounts payable and accrued expenses (61,388) (283,745)
Income taxes payable 6,000 -
Other liabilities 247,458 (18,750)
Related party payable 10,864 (654,938)
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Net cash used in operating activities (348,695) (1,464,249)
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Cash flows from investing activities:
Capital expenditures (10,334) (21,313)
Collection of notes receivable - 661,000
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Net cash provided by (used in) investing activities (10,334) 639,687
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Cash flows from financing activities:
Proceeds from related party notes payable 350,000 -
Payment of related party notes payable (331,418) -
Dividends on preferred stock (282) (282)
Payments of notes payable and capital lease obligations (6,320) (9,720)
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Net cash provided by (used in) financing activities 11,980 (10,002)
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Net decrease in cash (347,049) (834,564)
Cash, beginning of quarter 421,255 1,166,895
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Cash, end of quarter $ 74,206 $ 332,331
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Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 36,648 $ 76,018
Income taxes - 8,462
Non-cash activities:
Conversion of related party notes payable
to common stock 261,150 -
See accompanying notes to unaudited consolidated financial statements.
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NEWS COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. Basis of Presentation:
In the opinion of News Communications, Inc.'s ("NCI" or "the Company")
management, the accompanying unaudited consolidated financial statements contain
all adjustments (consisting of only normal recurring adjustments) necessary to
present fairly the information set forth therein. These consolidated financial
statements are condensed and, therefore, do not include all of the information
and footnotes required by generally accepted accounting principles in the United
States of America for complete financial statements. The results for the interim
periods are not necessarily indicative of the results for a full year. Certain
prior period amounts have been reclassified to conform to the current period
presentation.
These consolidated financial statements should be read in conjunction with NCI's
Annual Report on Form 10-KSB for the twelve months ended December 31, 2004 and
the related audited financial statements included therein.
B. Earnings (Loss) per Share:
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 128, "Earnings per Share" ("SFAS No. 128"), which
provides for the calculation of "basic" and "diluted" earnings per share. Basic
earnings per share include no dilution and are computed by dividing income
available to common stockholders by the weighted average number of shares of
common stock outstanding for the period. Diluted earnings per share reflect, in
periods in which they have a dilutive effect, the effect of shares of common
stock issuable upon exercise of common stock equivalents. The assumed conversion
of the options and warrants would have been anti-dilutive and, therefore, were
not considered in the computation of diluted earnings per share for the three
months ended March 31, 2005 and 2004.
For the three months ended March 31, 2005, options to purchase 219,821 shares of
common stock, warrants to purchase 3,315,873 shares of common stock, $10
convertible preferred shares convertible into 767,376 shares of common stock,
and convertible notes convertible into 507,347 shares of common stock were not
included in the computation of diluted loss per share because the effect would
be anti-dilutive. These options and warrants, which expire from July 5, 2005
through November 28, 2015, were all outstanding at March 31, 2005.
C. Accounting for Stock-Based Compensation:
The Company has several stock-based employee compensation plans in effect that
were entered into in 1987, 1993, and 1999. The Company accounts for all
transactions under which employees receive shares of stock or other equity
instruments in the Company based on the price of its stock in accordance with
the provisions of Accounting Principles Board Opinion No. 25 "Accounting for
Stock Issued to Employees." No stock-based employee compensation cost is
reflected in net loss, as all options granted under the plan had an exercise
price equal to the market value of the underlying common stock on the date of
grant. There were no options granted and no options were vested during the
quarters ended March 31, 2005 and 2004.
D. Common Stock
On February 3, 2005, pursuant to a letter agreement with the holder of one of
the Company's convertible promissory notes in the principal amount of $200,000,
the Company agreed to prepay the principal amount plus accrued interest thereon
of $62,597. In lieu of cash payment of such amount, the principal and accrued
interest was satisfied by issuing 375,139 shares of common stock at a price of
$0.70 per share. As required by FAS 84: Induced Conversions of Convertible
Debt, the Company was required to record a non-recurring and non-cash debt
conversion charge of $84,406.
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E. Related Parties
On January 20 and 31, 2005, NCI borrowed an aggregate of $350,000 and issued 8%
convertible notes in the principal amounts of $224,000 and $126,000,
respectively, due July 20, 2006, to Kinder Investments LP and Rosalind
Davidowitz, respectively. In the event that the notes are not paid in full on or
prior to the due date, the unpaid balance shall accrue interest at the maximum
legally permitted interest rate until the notes are paid in full. Prior to the
Company's payment in full of the interest and principal on the notes, the
principal amounts of the notes and accrued but unpaid interest thereon is
convertible into shares of common stock of the Company at a price equal to $0.70
per share, subject to customary anti-dilution adjustments.
ITEM 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The information contained in this Item 2, Management's Discussion and Analysis
or Plan of Operation ("MD&A"), 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. Actual results may
materially differ from those projected in the forward-looking statements as a
result of certain risks and uncertainties set forth in this report. Although
management believes that the assumptions made and expectations reflected in the
forward looking statements are reasonable, there is no assurance that the
underlying assumptions will, in fact, prove to be correct or that actual future
results will not be different from the expectations expressed in this report.
News Communications, Inc. is an established publisher of various
advertiser-supported newspapers and magazines. As of March 31, 2005, we
published three newspapers (The Hill, Dan's Papers, and Montauk Pioneer), two
magazines (Dan's Hampton Style and Dan's Hampton Sports, the latter of which was
introduced in 2004), and a guide (Dan's Hampton Style Insider Guide which was
also introduced in 2004). In 2004 Dan's Hampton Style (also called Dan's
Magazine Hampton Style),which was first introduced in 2003, was published six
times in July and August and seven times during the rest of the year. It is
distributed to oceanfront estates from East Hampton to Westhampton Beach, New
York, to boutiques and restaurants, and a special distribution to exclusive
addresses in New York City. In 2005, the magazine will be published on
approximately the same schedule as 2004.
Dan's Papers Inc. introduced Dan's Hampton Sports in June 2004, an expansion of
the Dan's Magazines brand. The Hamptons have long been known as the "playground
of the rich and famous." It was published three times during the summer months
of 2004 and chronicled the activities that have contributed to the Hamptons'
reputation as the place to vacation and play. In 2005, Dan's Hampton Sports will
be published on approximately the same schedule as 2004.
Also introduced in 2004 was Dan's Hampton Style Insider Guide. The Guide is
published for those people who choose to make the Hamptons and environs their
year-round homes or visit throughout the year. The Guide focuses on operating
hours and contact information for many businesses and services including
restaurants, shops, gyms, fitness centers, spas and emergency services
throughout the East End of Long Island. The Guide was published and distributed
in December. In 2005, The Guide will be published approximately three times.
In April 2005, The Hill introduced The Hill Health Watch, an online subscription
service covering health legislation issues.
The following discussion and analysis of the financial condition and operating
results are based upon the consolidated financial statements of the Company,
which have been prepared in accordance with generally accepted accounting
principles ("GAAP") in the United States of America.
Results of Operations:
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Three Months Ended March 31, 2005 Compared With Three Months Ended March 31,
2004
Revenue
Overall revenues for the three months ended March 31, 2005 increased $174,854 or
9% to $2,058,264 compared with $1,883,410 for the three months ended March 31,
2004. Variances in specific revenue categories for the first three months of
2005 were as follows: display advertising, which represented 72% of total
revenues, increased 6% to $1,480,898 in 2005 compared with $1,397,502 in 2004,
and classified advertising increased 23% to $453,749 compared to $369,057 in
2004. Other revenue, primarily management fees from Marquis Who's Who LLC and
subscription revenue, increased $6,766 to $123,617 for the three months ended
March 31, 2005 compared with $116,851 for the same period in 2004.
Among our individual operating units, revenues for Dan's Papers increased
$82,915 or 11% for the three months ended March 31, 2005, compared to the
three months ended March 31, 2004, primarily due to an increase in classified
advertising revenues of $61,850 or 19% and display advertising increased
$20,038 or 5%. Revenues for The Hill increased $91,939 or 9% for the
three months ended March 31, 2005, due largely to the gains in display
revenue of $63,359 or 7% and classified revenue increased $22,841 or 49%
compared with the same period in 2004.
Operating Expenses
Operating expenses for the first quarter of 2005 were $2,798,925, an increase of
9%, compared with operating expenses of $2,572,086 in 2004. This was largely
attributed to higher display selling expenses that were driven by the increase
in revenues and to higher general and administrative expenses.
Variances in specific expense categories were as follows: editorial, production,
and distribution decreased $10,515 or 1% for the three months ended March 31,
2005, compared to the three months ended March 31, 2004. Selling expenses
increased $87,526, or 15%, for the three months ended March 31, 2005
compared to the three months ended March 31, 2004, primarily due to higher
sales commissions on the display revenue gains in the quarter, higher sales
salaries, and to the addition of sales staff for Dan's Hampton Style;
general and administrative expenses increased $161,805, or 18%, for the
three months ended March 31, 2005 compared to March 31, 2004 due largely
to the overhead costs associated with the establishment of offices for Dan's
Hampton Style and Dan's Hampton Sports, and also due largely to a debt
conversion charge upon conversion of notes payable, and in part to a smaller
reduction of corporate liability reserves in 2005 and to salary costs associated
with accounting staff changes.
Income
Net loss for the three months ended March 31, 2005 increased by $57,611 to a net
loss of $762,279 from a net loss of $704,668 for the same period in 2004. Net
loss available for common stockholders increased to $762,561 from $704,950. The
loss from operations before interest and taxes increased $51,985 for the three
months ended March 31, 2005. Additionally, depreciation and amortization expense
decreased $11,977, interest expense (net of interest income) decreased $374, and
the provision for income taxes increased $6,000.
The net loss for the three months ended March 31, 2005, was affected by the
recording of a non-recurring and non-cash debt conversion charge as a result of
the issuance of shares of common stock in satisfaction of certain convertible
debt. Excluding the non-recurring charge, the net loss for the three months
ended March 31, 2005 improved by $26,795 to a net loss of $677,873 from a net
loss of $704,668 for the same period in 2004. Excluding the non-recurring
charge, the net loss available for common stockholders improved to $678,155
from $704,950. Additionally, excluding the non-recurring charge, the loss from
operations before interest and taxes improved $32,421 for the three months
ended March 31, 2005.
Income Taxes
The Company currently has net operating loss (NOL) carryforwards for federal
income tax purposes of approximately $18.6 million, which is available to offset
federal taxable income through the 2024 fiscal year. The Company has provided a
100% valuation allowance on deferred tax assets substantially resulting from the
NOL carryforwards discussed above. The Company recorded a provision of
approximately $6,000 for state and local income taxes for the three months ended
March 31, 2005.
EBITDA
The Company believes that EBITDA (earnings before interest, taxes, depreciation
and amortization), a non-GAAP financial measure widely used among media related
businesses, is a useful metric for evaluating its
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financial performance because of its focus on the Company's results from
operations before depreciation and amortization.
EBITDA is a common alternative measure of performance used by investors,
financial analysts and rating agencies. These groups use EBITDA, along with
other measures, to estimate the value of a company and evaluate a company's
ability to meet its debt service requirements. The EBITDA presented may not be
comparable to similarly titled measures reported by other companies. The Company
believes that EBITDA, while providing useful information, should not be
considered in isolation or as an alternative to other financial measures
determined under GAAP.
The Company's EBITDA, as well as a reconciliation of EBITDA to net income for
the three months ended March 31, 2005 and 2004 is provided below:
Three Months ended March 31, 2005 2004
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EBITDA $ (706,197) $ (642,235)
Less: Depreciation and amortization (34,464) (46,441)
Less: Interest expense, net (15,618) (15,992)
Less: Income taxes (6,000) -
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Net loss $ (762,279) $ (704,668)
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EBITDA, as adjusted $ (621,791) $ (642,235)
Less: Non-recurring & non-cash charge (84,406)
Less: Depreciation and amortization (34,464) (46,441)
Less: Interest expense, net (15,618) (15,992)
Less: Income taxes (6,000) -
---------- ----------
Net loss $ (762,279) $ (704,668)
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EBITDA decreased by $63,962 for the three months ended March 31, 2005 from a
loss of $642,235 for the three months ended March 31, 2004 to a loss of $706,197
for the three months ended March 31, 2005. This was primarily due to higher
revenues, which were partially offset by higher expenses as previously discussed
under revenue and operating expenses.
EBITDA, as adjusted, improved $20,444 to a loss of $621,791, compared with a
loss of $642,235 for the same period in 2004. The EBITDA loss from the
non-recurring and non-cash charge was $84,406 for the three months ended
March 31, 2005.
Liquidity and Capital Resources
Cash as of March 31, 2005 was $74,206, excluding restricted cash of $34,102,
compared with $332,331, excluding restricted cash of $34,102, for the same
period in 2004. For the three months ended March 31, 2005, total cash used in
operating activities was $348,695, compared to cash used in operating activities
of $1,464,249 for the same period in 2004. This was primarily attributable to
the net loss of $762,279 for the three months ended March 31, 2005.
Additionally, accounts receivable and other assets decreased $33,538 and
$50,042, respectively. The decrease in accounts receivable was due largely
to collection of display accounts receivable. Other assets are primarily
prepaid expenses and security deposits on office leases. Prepaid expenses
decreased and lease deposits increased due primarily to leases that were
signed in the third quarter for new offices for Dan's Hampton Style and
Dan's Hampton Sports and The Hill.
As of March 31, 2005, depreciation and amortization was $34,464 which was
$11,977 less than $46,441 in 2004. The provision for bad debts as of March 31,
2005 was approximately $8,200, which is less than the provision as of
March 31, 2004 of $16,000, due to lower reserve requirements attributed
to improved realization of receivables.
As of March 31, 2005, accounts payable and accrued expenses decreased $61,388
due primarily to payment of production expenses for the issues produced in the
fourth quarter of 2004, which were higher due to the seasonality of our
business than the first quarter of 2005, and to lower accrued professional
fees. Other liabilities, which consist primarily of prepaid display
advertising for future issues, increased $247,458 due primarily to the
increase in volume of prepaid advertisements for our publications that were
received in the first quarter of 2005 compared to the first quarter of 2004.
This was partially offset by an increase of income taxes payable, and related
party payable of $6,000 and $10,864, respectively. State and local corporate
tax provision for minimum taxes was accrued to the first quarter 2005. The
increase in related party payable is due primarily to accrued interest
expense on notes payable to related parties.
As of March 31, 2005, cash used in investing activities was for capital
expenditures of $10,334 to upgrade or replace obsolete computer hardware
and software at our business units and the corporate office.
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As of March 31, 2005, cash provided by financing activities totaled $11,980
and was primarily attributed to proceeds from issuance of 8% convertible
notes payable to related parties that totaled $350,000 and to payment of
related party notes payable of $331,418. Payments on notes payable and
capital lease obligations were $6,320. Dividends on preferred stock
totaling $282 were accrued.
As of March 31, 2005, the Company had current assets of $1,209,701, including
cash of $74,206. At March 31, 2005, the Company had an excess of current
liabilities over current assets in the amount of $1,798,028. Included in the
current liabilities is $300,000 due to the former minority stockholder of Dan's
Papers, which amount can be paid in 2005 or 2006 without violating the terms of
the agreement.
In recent years, the Company has relied on financing in the form of sales of
equity securities and issuance of convertible notes, to meet its working capital
requirements. The Company also generated cash from the sale of subsidiaries.
On January 20 and January 31, 2005, the Company issued 8% convertible notes in
the face amounts of $224,000 and $126,000, respectively, due July 20, 2006, to
related parties. In the event that the notes are not paid in full on or prior to
the due date, the unpaid balance shall accrue interest at the maximum legally
permitted interest rate until the notes are paid in full. Prior to the Company's
payment in full of the interest and principal on the notes, the principal
amounts of the notes and accrued but unpaid interest thereon is convertible into
shares of common stock of the Company at a price equal to $0.70 per share,
subject to customary anti-dilution adjustments.
At March 31, 2005 the Company had certain cash obligations, which are due as
follows:
Less than After
Total 1 year 1-3 years 4-5 years 5 years
--------------------------------------------------------------------
Due to related parties $ 659,417 $304,274 $ 355,143
Notes payable and capital lease obligations 51,826 17,411 34,415
Interest expense 68,103 47,252 19,679 1,172
Operating leases 2,875,398 284,147 769,461 563,360 1,258,430
--------------------------------------------------------------------
Total $3,654,744 $653,084 $1,178,698 $564,532 $1,258,430
====================================================================
The Company is not a party to any off-balance sheet arrangements.
The Company is continuing to grow the operations of its core publications: Dan's
Papers, Dan's Hampton Style and The Hill. The investments in operating costs
during the three months ended March 31, 2005 were self-funded, in part, by the
growth in advertising revenues. Dan's Hampton Style was originally introduced in
2003 to compliment Dan's Papers, its weekly newspaper. During the second quarter
of 2004, the Company continued the expansion of the publication of Dan's Hampton
Style and introduced Dan's Hampton Sports. Additionally, Dan's Hampton Style
Insider Guide was introduced in December 2004 and an increase to the publication
frequency of the Guide is contemplated for 2005. In April 2005, The Hill
introduced The Hill Health Watch, an online subscription service covering health
legislation issues.
The Company intends to continue to finance these business initiatives and its
existing liabilities from working capital, from additional sales of equity
securities, from borrowings or by a sale of assets. The Company's individual
subsidiaries will generate positive cash flow but not necessarily enough to meet
all capital obligations through December 31, 2005. The Company intends to meet
those capital obligations through additional financing or sale of assets.
Payments due the Company from the sale of publications were received in the
amounts of $661,000, $175,000, and $10,000 in the first, second, and third
quarters of 2004, respectively. One
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such payment of $10,000 is due the Company in the third quarter of 2005.
The Company expects to cover working capital needs. The seasonality of Dan's
Papers traditionally generates stronger third quarter results. In the event of a
shortfall, a principal stockholder has committed, between April 15, 2005 and
April 30, 2006, to cover such shortfall in an amount not to exceed $700,000 on
terms to be negotiated with the Board of Directors of the Company.
ITEM 3. CONTROLS AND PROCEDURES
As of March 31, 2005 (the end of the period covered by this report), the
Company's management carried out an evaluation, with the participation of the
Company's Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the Company's disclosure controls and procedures. Based upon
that evaluation, the Chief Executive Officer and Chief Financial Officer
concluded that the Company's disclosure controls and procedures are effective in
timely alerting them to material information relating to the Company (including
the Company's consolidated subsidiaries) required to be included in periodic
reports filed under the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
In designing and evaluating the Company's disclosure controls and procedures (as
defined in Rules 13a-15(e) or 15d-15(e) of the Exchange Act), management
recognized that any controls and procedures, no matter how well designed and
operated, can provide only reasonable assurances of achieving the desired
control objectives, as ours are designed to do, and management necessarily was
required to apply its judgment in evaluating the cost-benefit relationship of
possible controls and procedures. We believe that our disclosure controls and
procedures provide such reasonable assurance.
During the quarter ended March 31, 2005, there have been no significant changes
in the Company's internal controls or in other factors that could significantly
affect these controls, nor were any corrective actions required with regard to
significant deficiencies and material weaknesses.
PART II
OTHER INFORMATION
ITEM 6. EXHIBITS
(a) Exhibits:
31.1+ Chief Executive Officer's Certificate, pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
31.2+ Chief Financial Officer's Certificate, pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
32.1+ Chief Executive Officer's Certificate, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
32.2+ Chief Financial Officer's Certificate, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
+ Indicates that exhibit is attached hereto.
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Date: May 20, 2005 /s/ James A. Finkelstein
------------------------
James A. Finkelstein
President and Chief Executive Officer
Date: May 20, 2005 /s/ E. Paul Leishman
--------------------
E. Paul Leishman
Chief Financial Officer
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