x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES
|
|
EXCHANGE
ACT OF 1934
|
||
For
the quarterly period ended September 30, 2008
|
||
OR
|
||
¨
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
|
|
EXCHANGE
ACT OF 1934
|
||
For
the transition period from ________________ to
________________
|
Delaware
|
13-3475943
|
|
(State
or other jurisdiction of
|
(I.R.S.
Employer
|
|
incorporation
or organization)
|
Identification
No.)
|
|
Three
University Plaza
|
07601
|
|
Hackensack,
New Jersey
|
(Zip
Code)
|
|
(Address
of principal executive offices)
|
Page
No.
|
||
Part
I – Financial Information
|
||
Item
1.
|
Condensed
Consolidated Financial Statements (Unaudited):
|
|
Condensed
Consolidated Balance Sheets as of September 30, 2008 and December
31,
2007
|
3
|
|
Condensed
Consolidated Statements of Operations for the three months ended
September
30, 2008 and 2007
|
4
|
|
Condensed
Consolidated Statements of Operations for the nine months ended September
30, 2008 and 2007
|
5
|
|
Condensed
Consolidated Statements of Cash Flows for the nine months ended September
30, 2008 and 2007
|
6
|
|
Condensed
Consolidated Statement of Stockholders’ Equity for the nine months ended
September 30, 2008 and 2007
|
7
|
|
Notes
to Condensed Consolidated Financial Statements
|
8
|
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
19
|
Item
3.
|
Quantitative
and Qualitative Disclosures about Market Risks
|
28
|
Item
4.
|
Controls
and Procedures
|
29
|
Part
II – Other Information
|
||
Item
1.
|
Legal
Proceedings
|
30
|
Item
1A.
|
Risk
Factors
|
30
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
30
|
Item
3.
|
Defaults
Upon Senior Securities
|
31
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
31
|
Item
5.
|
Other
Information
|
31
|
Item
6.
|
Exhibits
|
32
|
Signatures
|
33
|
September 30,
2008
|
December 31,
2007
|
||||||
(Unaudited)
|
|||||||
ASSETS
|
|||||||
Current
assets:
|
|||||||
Cash
and cash equivalents
|
$
|
14,060
|
$
|
14,751
|
|||
Accounts
receivable, net
|
10,881
|
10,673
|
|||||
Prepaid
expenses and other current assets
|
2,988
|
2,117
|
|||||
Refundable
income taxes
|
4
|
453
|
|||||
Deferred
income taxes
|
237
|
202
|
|||||
Total
current assets
|
28,170
|
28,196
|
|||||
Property
and equipment, net
|
6,968
|
7,160
|
|||||
Other
assets
|
2,844
|
2,037
|
|||||
Deferred
income taxes
|
455
|
381
|
|||||
Goodwill
|
675
|
675
|
|||||
Total
assets
|
$
|
39,112
|
$
|
38,449
|
|||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|||||||
Current
liabilities:
|
|||||||
Accounts
payable
|
$
|
927
|
$
|
1,973
|
|||
Accrued
expenses
|
3,008
|
2,227
|
|||||
Accrued
salaries, wages and related benefits
|
4,992
|
5,244
|
|||||
Income
and other taxes
|
1,889
|
2,053
|
|||||
Current
portion of long-term obligations
|
913
|
370
|
|||||
Total
current liabilities
|
11,729
|
11,867
|
|||||
Deferred
income taxes
|
1,171
|
1,224
|
|||||
Long-term
obligations, net of current portion
|
2,896
|
2,128
|
|||||
Commitments
and contingencies
|
|||||||
STOCKHOLDERS’
EQUITY
:
|
|||||||
Serial
preferred stock, $.01 par value; 5,000,000 shares authorized, none
issued
|
-
|
-
|
|||||
Common
stock, $.01 par value; 75,000,000 shares authorized; 24,907,000 issued
and
24,119,000
outstanding at September 30, 2008; and 24,881,000 shares issued and
24,699,000 outstanding at December 31, 2007
|
249
|
249
|
|||||
Additional
paid-in capital
|
16,530
|
16,323
|
|||||
Retained
earnings
|
9,165
|
7,188
|
|||||
Accumulated
other comprehensive loss
|
(439
|
)
|
(211
|
)
|
|||
25,505
|
23,549
|
||||||
Less:
treasury stock; 788,000 shares at September 30, 2008 and 182,000
shares at
December 31, 2007, at cost
|
(2,189
|
)
|
(319
|
)
|
|||
Total
stockholders’ equity
|
23,316
|
23,230
|
|||||
Total
liabilities and stockholders’ equity
|
$
|
39,112
|
$
|
38,449
|
Three Months Ended
|
|||||||
September 30,
|
|||||||
2008
|
2007
|
||||||
Revenues
|
$
|
18,333
|
$
|
18,138
|
|||
Operating
costs and expenses
|
|||||||
Direct
operating costs
|
13,219
|
12,508
|
|||||
Selling
and administrative expenses
|
3,564
|
3,553
|
|||||
Interest
(income), net
|
(61
|
)
|
(205
|
)
|
|||
Total
|
16,722
|
15,856
|
|||||
Income
before provision for income taxes
|
1,611
|
2,282
|
|||||
Provision
for income taxes
|
503
|
167
|
|||||
Net
income
|
$
|
1,108
|
$
|
2,115
|
|||
Income
per share:
|
|||||||
Basic:
|
$
|
.05
|
$
|
.09
|
|||
Diluted:
|
$
|
.05
|
$
|
.08
|
|||
Weighted
average shares outstanding:
|
|||||||
Basic:
|
24,124
|
24,122
|
|||||
Diluted:
|
24,565
|
25,559
|
Nine Months Ended
|
|||||||
September 30,
|
|||||||
2008
|
2007
|
||||||
Revenues
|
$
|
54,603
|
$
|
47,214
|
|||
Operating
costs and expenses
|
|||||||
Direct
operating costs
|
40,460
|
34,522
|
|||||
Selling
and administrative expenses
|
11,781
|
10,547
|
|||||
Interest
(income), net
|
(167
|
)
|
(467
|
)
|
|||
Total
|
52,074
|
44,602
|
|||||
Income
before provision for income taxes
|
2,529
|
2,612
|
|||||
Provision
for income taxes
|
552
|
278
|
|||||
Net
income
|
$
|
1,977
|
$
|
2,334
|
|||
Income
per share:
|
|||||||
Basic:
|
$
|
.08
|
$
|
.10
|
|||
Diluted:
|
$
|
.08
|
$
|
.09
|
|||
Weighted
average shares outstanding:
|
|||||||
Basic:
|
24,481
|
23,994
|
|||||
Diluted:
|
25,391
|
25,118
|
Nine Months Ended
September 30,
|
|||||||
2008
|
2007
|
||||||
Cash
flow from operating activities:
|
|||||||
Net
income
|
$
|
1,977
|
$
|
2,334
|
|||
Adjustments
to reconcile net income to net cash
|
|||||||
provided
by operating activities:
|
|||||||
Depreciation
and amortization
|
2,811
|
2,326
|
|||||
Stock-based
compensation
|
136
|
112
|
|||||
Deferred
income taxes
|
(169
|
)
|
41
|
||||
Pension
cost
|
505
|
443
|
|||||
Changes
in operating assets and liabilities:
|
|||||||
Accounts
receivable
|
(208
|
)
|
(4,817
|
)
|
|||
Prepaid
expenses and other current assets
|
(522
|
)
|
(740
|
)
|
|||
Refundable
income taxes
|
449
|
1,047
|
|||||
Other
assets
|
(102
|
)
|
35
|
||||
Accounts
payable and accrued expenses
|
(555
|
)
|
(5
|
)
|
|||
Payment
of minimum withholding taxes on net settlement of stock
options
|
-
|
(1,523
|
)
|
||||
Accrued
salaries and wages and related benefits
|
(417
|
)
|
2,125
|
||||
Income
and other taxes
|
(164
|
)
|
373
|
||||
Net
cash provided by operating activities
|
3,741
|
1,751
|
|||||
Cash
flow from investing activities:
|
|||||||
Capital
expenditures
|
(1,980
|
)
|
(2,884
|
)
|
|||
Cash
flow from financing activities:
|
|||||||
Payment
of long-term obligations
|
(653
|
)
|
(525
|
)
|
|||
Purchase
of treasury stock
|
(1,870
|
)
|
-
|
||||
Proceeds
from exercise of stock options
|
71
|
194
|
|||||
Net
cash used in financing activities
|
(2,452
|
)
|
(331
|
)
|
|||
Decrease
in cash and cash equivalents
|
(691
|
)
|
(1,464
|
)
|
|||
Cash
and cash equivalents, beginning of period
|
14,751
|
13,597
|
|||||
Cash
and cash equivalents, end of period
|
$
|
14,060
|
$
|
12,133
|
|||
Supplemental
disclosures of cash flow information:
|
|||||||
Cash
paid for interest
|
$
|
43
|
$
|
21
|
|||
Cash
paid for income taxes
|
$
|
703
|
$
|
46
|
|||
Non-cash
investing and financing activities:
|
|||||||
Vendor
financed software licenses acquired
|
$
|
1,650
|
$
|
-
|
|||
Acquisition
of equipment utilizing capital leases
|
$
|
43
|
$
|
819
|
Accumulated
|
||||||||||||||||||||||
Additional
|
Other
|
|||||||||||||||||||||
Common Stock
|
Paid-in
|
Retained
|
Comprehensive
|
Treasury
|
||||||||||||||||||
Shares
|
Amount
|
Capital
|
Earnings
|
Loss
|
Stock
|
Totals
|
||||||||||||||||
January
1, 2008
|
24,699
|
$
|
249
|
$
|
16,323
|
$
|
7,188
|
$
|
(211
|
)
|
$
|
(319
|
)
|
$
|
23,230
|
|||||||
Net
income
|
-
|
-
|
-
|
1,977
|
-
|
-
|
1,977
|
|||||||||||||||
Issuance
of common stock upon exercise of stock options
|
26
|
-
|
71
|
-
|
-
|
-
|
71
|
|||||||||||||||
Non-cash
equity compensation
|
-
|
-
|
136
|
-
|
-
|
-
|
136
|
|||||||||||||||
Change
in transitional projected benefit obligation, net of taxes
|
-
|
-
|
-
|
-
|
62
|
-
|
62
|
|||||||||||||||
Purchase
of treasury stock
|
(606
|
)
|
-
|
-
|
-
|
-
|
(1,870
|
)
|
(1,870
|
)
|
||||||||||||
Change
in fair value of derivatives, net of taxes
|
-
|
-
|
-
|
-
|
(290
|
)
|
-
|
(290
|
)
|
|||||||||||||
|
||||||||||||||||||||||
September
30, 2008
|
24,119
|
$
|
249
|
$
|
16,530
|
$
|
9,165
|
$
|
(439
|
)
|
$
|
(2,189
|
)
|
$
|
23,316
|
|||||||
January
1, 2007
|
23,905
|
$
|
241
|
$
|
17,225
|
$
|
2,622
|
$
|
(760
|
)
|
$
|
(319
|
)
|
$
|
19,009
|
|||||||
Net
income
|
-
|
-
|
-
|
2,334
|
-
|
-
|
2,334
|
|||||||||||||||
Issuance
of common stock upon exercise of stock options
|
632
|
6
|
188
|
-
|
-
|
-
|
194
|
|||||||||||||||
Non-cash
equity compensation
|
-
|
-
|
112
|
-
|
-
|
-
|
112
|
|||||||||||||||
Change
in transitional projected benefit obligation, net of taxes
|
-
|
-
|
-
|
-
|
(24
|
)
|
-
|
(24
|
)
|
|||||||||||||
Payment
of minimum withholding taxes on net settlement of stock
options
|
-
|
-
|
(1,523
|
)
|
-
|
-
|
-
|
(1,523
|
)
|
|||||||||||||
|
||||||||||||||||||||||
September
30, 2007
|
24,537
|
$
|
247
|
$
|
16,002
|
$
|
4,956
|
$
|
(784
|
)
|
$
|
(319
|
)
|
$
|
20,102
|
2008
|
2007
|
||||||
Vendor
obligations
|
|||||||
Capital
lease obligations
(1)
|
$
|
495
|
$
|
659
|
|||
Deferred
lease payments
|
101
|
131
|
|||||
Microsoft
license
(2)
|
1,238
|
4
|
|||||
Pension
obligations
|
|||||||
Accrued
pension liability
|
1,975
|
1,704
|
|||||
$
|
3,809
|
$
|
2,498
|
||||
Less:
Current portion of long-term obligations
|
913
|
370
|
|||||
Totals
|
$
|
2,896
|
$
|
2,128
|
Prepaid
expenses and other current assets
|
$
|
496
|
||
Other
assets
|
992
|
|||
Property
and equipment
|
162
|
|||
$
|
1,650
|
Amount
|
||||
As
of September 30, 2009
|
$
|
306
|
||
2010
|
209
|
|||
2011
|
23
|
|||
Total
minimum lease payments
|
538
|
|||
Less:
Amount representing interest
|
43
|
|||
Present
value of net minimum lease payments
|
495
|
|||
Less:
Current maturities of capital lease obligations
|
274
|
|||
Long-term
capital lease obligations
|
$
|
221
|
|
Unrecognized
tax
benefits
|
|||
Balance
- January 1, 2008
|
$
|
740
|
||
Interest
accrual
|
93
|
|||
Balance
– September 30, 2008
|
$
|
833
|
Number
of Shares
|
Weighted-Average
Exercise Price
|
Weighted-Average
Remaining Contractual Term (years)
|
Aggregate
Intrinsic
Value
|
||||||||||
Outstanding
at January 1, 2008
|
3,168,263
|
$
|
2.69
|
||||||||||
Granted
|
112,000
|
2.89
|
|||||||||||
Exercised
|
(26,318
|
)
|
2.69
|
||||||||||
Forfeited/Expired
|
(10,834
|
)
|
|
3.38
|
|||||||||
Outstanding
at September 30, 2008
|
3,243,111
|
$
|
2.70
|
4.99
|
$
|
915,160
|
|||||||
Exercisable
at September 30, 2008
|
3,091,693
|
$
|
2.68
|
4.77
|
$
|
915,160
|
Nine
months ended
|
|||||||
September
30,
|
|||||||
2008
|
2007
|
||||||
Weighted
average fair value of options granted
|
$
|
2.46
|
$
|
2.98
|
|||
Risk-free
interest rate
|
3.61
|
%
|
4.61
|
%
|
|||
Expected
life (years)
|
8.00
|
8.00
|
|||||
Expected
volatility factor
|
97
|
%
|
123
|
%
|
|||
Expected
dividends
|
None
|
None
|
|
Shares
|
Weighted-Average
Grant-Date
Fair Value
|
|||||
Non-vested
at January 1, 2008
|
78,928
|
$
|
3.56
|
||||
Granted
|
112,000
|
2.46
|
|||||
Forfeited
|
-
|
-
|
|||||
Vested
|
39,510
|
2.92
|
|||||
Non-vested
at September 30, 2008
|
151,418
|
$
|
2.91
|
Three months ended September 30,
|
Nine months ended September 30,
|
||||||||||||
2008
|
|
2007
|
|
2008
|
|
2007
|
|||||||
Cost
of sales
|
$
|
12
|
$
|
4
|
$
|
43
|
$
|
51
|
|||||
Selling
and adminstrative expenses
|
51
|
13
|
93
|
61
|
|||||||||
Total
stock-based compensation
|
$
|
63
|
$
|
17
|
$
|
136
|
$
|
112
|
Three
months ended
|
Nine
months ended
|
||||||||||||
September
30,
|
September
30,
|
||||||||||||
2008
|
2007
|
2008
|
2007
|
||||||||||
Net
income
|
$
|
1,108
|
$
|
2,115
|
$
|
1,977
|
$
|
2,334
|
|||||
Pension
liability adjustment
|
21
|
(55
|
)
|
62
|
(24
|
)
|
|||||||
Change
in fair value of derivatives, including
|
|||||||||||||
reclassifications
|
659
|
—
|
(290
|
)
|
—
|
||||||||
Comprehensive
income
|
$
|
1,788
|
$
|
2,060
|
$
|
1,749
|
$
|
2,310
|
Three
months ended
|
Nine
months ended
|
||||||||||||
September
30,
|
September
30,
|
||||||||||||
2008
|
2007
|
2008
|
2007
|
||||||||||
Unites
States
|
$
|
14,117
|
$
|
14,021
|
$
|
42,569
|
$
|
36,126
|
|||||
The
Netherlands
|
1,861
|
2,465
|
5,702
|
6,617
|
|||||||||
Others
- principally Europe
|
2,355
|
1,652
|
6,332
|
4,471
|
|||||||||
$
|
18,333
|
$
|
18,138
|
$
|
54,603
|
$
|
47,214
|
2008
|
2007
|
||||||
(in
thousands)
|
|||||||
United
States
|
$
|
1,313
|
$
|
1,643
|
|||
Foreign
countries:
|
|||||||
Philippines
|
3,657
|
3,785
|
|||||
India
|
1,703
|
1,886
|
|||||
Sri
Lanka
|
710
|
509
|
|||||
Other
|
260
|
12
|
|||||
Total
foreign
|
6,330
|
6,192
|
|||||
$
|
7,643
|
$
|
7,835
|
Three
months ended
|
Nine
months ended
|
||||||||||||
September
30,
|
September
30,
|
||||||||||||
2008
|
2007
|
|
2008
|
|
2007
|
||||||||
Service
cost
|
$
|
102
|
$
|
101
|
$
|
317
|
$
|
303
|
|||||
Interest
cost
|
36
|
30
|
113
|
91
|
|||||||||
Actuarial
loss recognized
|
22
|
24
|
75
|
49
|
|||||||||
Net
periodic pension cost
|
$
|
160
|
$
|
155
|
$
|
505
|
$
|
443
|
Three
months ended
|
Nine
months ended
|
||||||||||||
September
30,
|
September
30,
|
||||||||||||
2008
|
2007
|
2008
|
2007
|
||||||||||
(in
thousands, except per share amounts
|
|||||||||||||
Net
income
|
$
|
1,108
|
$
|
2,115
|
$
|
1,977
|
$
|
2,334
|
|||||
Weighted
average common shares outstanding
|
24,124
|
24,122
|
24,481
|
23,994
|
|||||||||
Dilutive
effect of outstanding options
|
441
|
1,437
|
910
|
1,124
|
|||||||||
Adjusted
for dilutive computation
|
24,565
|
25,559
|
25,391
|
25,118
|
Level
1
|
Level
2
|
Level
3
|
||||||||
Assets
|
$
|
—
|
$
|
—
|
$
|
—
|
||||
Liabilities
|
$
|
—
|
$
|
290
|
$
|
—
|
September 30, 2008
|
December 31, 2007
|
||||||
Cash
and Cash Equivalents
|
$
|
14,060
|
$
|
14,751
|
|||
Working
Capital
|
16,441
|
16,329
|
Payments Due by Period
|
||||||||||||||||
Contractual Obligations
|
Total
|
Less than
1 year
|
1-3 years
|
4-5 years
|
After
5 years
|
|||||||||||
Capital
lease obligations
|
$
|
495
|
$
|
274
|
$
|
221
|
$
|
-
|
$
|
-
|
||||||
Non-cancelable
operating leases
|
1,792
|
834
|
801
|
157
|
-
|
|||||||||||
Long-term
vendor obligations
|
1,238
|
550
|
688
|
-
|
-
|
|||||||||||
Total
contractual cash obligations
|
$
|
3,525
|
$
|
1,658
|
$
|
1,710
|
$
|
157
|
$
|
-
|
Period
|
Total Number of
Shares
Purchased
|
Average Price Paid
per Share
|
Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs
|
Maximum Value of
Shares Available for
Repurchase
|
|||||||||
July
1-31, 2008
|
176,635
|
$
|
2.82
|
176,635
|
$
|
130,000
|
|||||||
August
1-31, 2008
|
—
|
—
|
—
|
$
|
130,000
|
||||||||
September
1-30, 2008
|
—
|
—
|
—
|
$
|
130,000
|
Date:
November
6, 2008
|
/s/
Jack Abuhoff
|
||
Jack
Abuhoff
|
|||
Chairman
of the Board,
|
|||
Chief
Executive Officer and President
|
|||
Date:
November
6, 2008
|
/s/
Steven L. Ford
|
||
Steven
L. Ford
|
|||
Executive
Vice President,
|
|||
Chief
Financial Officer
|
Very
truly yours,
|
Jack
Abuhoff
|
Chairman
and CEO
|
1.
|
I
have reviewed this quarterly report on Form 10-Q of Innodata Isogen,
Inc.;
|
2.
|
Based
on my knowledge, this 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
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this 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
report;
|
4.
|
The
registrant’s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and we
have:
|
a)
|
designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is
being
prepared;
|
b) |
designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision,
to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness
of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
|
d)
|
disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter that has materially affected, or is reasonably likely
to
materially affect, the registrant’s internal control over financial
reporting; and
|
5. |
The
registrant’s other certifying officer and I have disclosed, based on our
most recent evaluation of internal controls over financial reporting,
to
the registrant’s auditors and the audit committee of registrant’s board of
directors (or persons performing the equivalent
function):
|
a)
|
all
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
b) |
any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|
/s/
Jack Abuhoff
|
Jack
Abuhoff
|
Chairman
of the Board,
|
Chief
Executive Officer and President
|
1. |
I
have reviewed this quarterly report on Form 10-Q of Innodata
Isogen,
Inc.;
|
2.
|
Based
on my knowledge, this 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
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this 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
report;
|
4.
|
The
registrant’s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and we
have:
|
a)
|
designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is
being
prepared;
|
b)
|
designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision,
to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness
of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
|
d)
|
disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter that has materially affected, or is reasonably likely
to
materially affect, the registrant’s internal control over financial
reporting; and
|
5.
|
The
registrant’s other certifying officer and I have disclosed, based on our
most recent evaluation of internal controls over financial reporting,
to
the registrant’s auditors and the audit committee of registrant’s board of
directors (or persons performing the equivalent
function):
|
a)
|
all
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
b)
|
any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|
/s/
Steven L. Ford
|
Steven
L. Ford
|
Executive
Vice President,
|
Chief
Financial Officer
|
1.
|
the
Report fully complies with the requirements of section 13(a) or 15(d)
of
the Securities Exchange Act of 1934; and
|
2.
|
the
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Company.
|
/s/
Jack Abuhoff
|
Jack
Abuhoff
|
Chairman
of the Board,
|
Chief
Executive Officer and President
|
November
6, 2008
|
1.
|
the
Report fully complies with the requirements of section 13(a) or 15(d)
of
the Securities Exchange Act of 1934; and
|
2.
|
the
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Company.
|
/s/
Steven L. Ford
|
Steven
L. Ford
|
Executive
Vice President,
|
Chief
Financial Officer
|
November
6, 2008
|