CHICAGO RIVET & MACHINE CO.
Condensed Consolidated Balance Sheets
March 31, 2013 and December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
March 31,
2013
|
|
|
December 31,
2012
|
|
|
|
(Unaudited)
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
1,755,131
|
|
|
$
|
392,810
|
|
Certificates of deposit
|
|
|
5,385,000
|
|
|
|
7,088,000
|
|
Accounts receivable, net of allowance of $150,000
|
|
|
5,863,016
|
|
|
|
4,577,932
|
|
Inventories, net
|
|
|
5,284,492
|
|
|
|
4,936,372
|
|
Deferred income taxes
|
|
|
428,191
|
|
|
|
416,191
|
|
Other current assets
|
|
|
318,003
|
|
|
|
422,332
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
19,033,833
|
|
|
|
17,833,637
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, Plant and Equipment:
|
|
|
|
|
|
|
|
|
Land and improvements
|
|
|
1,238,150
|
|
|
|
1,238,150
|
|
Buildings and improvements
|
|
|
6,257,974
|
|
|
|
6,244,064
|
|
Production equipment and other
|
|
|
29,564,445
|
|
|
|
29,495,765
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37,060,569
|
|
|
|
36,977,979
|
|
Less accumulated depreciation
|
|
|
29,165,694
|
|
|
|
28,900,113
|
|
|
|
|
|
|
|
|
|
|
Net property, plant and equipment
|
|
|
7,894,875
|
|
|
|
8,077,866
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
26,928,708
|
|
|
$
|
25,911,503
|
|
|
|
|
|
|
|
|
|
|
See Notes to the Condensed Consolidated Financial Statements
2
CHICAGO RIVET & MACHINE CO.
Condensed Consolidated Balance Sheets
March 31, 2013 and December 31, 2012
|
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|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
(Unaudited)
|
|
|
|
|
Liabilities and Shareholders Equity
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
1,534,591
|
|
|
$
|
1,003,647
|
|
Accrued wages and salaries
|
|
|
655,726
|
|
|
|
409,695
|
|
Other accrued expenses
|
|
|
475,072
|
|
|
|
460,245
|
|
Unearned revenue and customer deposits
|
|
|
73,696
|
|
|
|
84,905
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
2,739,085
|
|
|
|
1,958,492
|
|
|
|
|
Deferred income taxes
|
|
|
880,275
|
|
|
|
952,275
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
3,619,360
|
|
|
|
2,910,767
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies (Note 3)
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders Equity:
|
|
|
|
|
|
|
|
|
Preferred stock, no par value, 500,000 shares authorized: none outstanding
|
|
|
|
|
|
|
|
|
Common stock, $1.00 par value, 4,000,000 shares authorized: 1,138,096 shares issued; 966,132 shares outstanding
|
|
|
1,138,096
|
|
|
|
1,138,096
|
|
Additional paid-in capital
|
|
|
447,134
|
|
|
|
447,134
|
|
Retained earnings
|
|
|
25,646,216
|
|
|
|
25,337,604
|
|
Treasury stock, 171,964 shares at cost
|
|
|
(3,922,098
|
)
|
|
|
(3,922,098
|
)
|
|
|
|
|
|
|
|
|
|
Total shareholders equity
|
|
|
23,309,348
|
|
|
|
23,000,736
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders equity
|
|
$
|
26,928,708
|
|
|
$
|
25,911,503
|
|
|
|
|
|
|
|
|
|
|
See Notes to the Condensed Consolidated Financial Statements
3
CHICAGO RIVET & MACHINE CO.
Condensed Consolidated Statements of Income
For the Three Months Ended March 31, 2013 and 2012
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
Net sales
|
|
$
|
9,125,736
|
|
|
$
|
9,200,318
|
|
Cost of goods sold
|
|
|
7,115,475
|
|
|
|
7,122,029
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
2,010,261
|
|
|
|
2,078,289
|
|
Selling and administrative expenses
|
|
|
1,351,814
|
|
|
|
1,391,598
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit
|
|
|
658,447
|
|
|
|
686,691
|
|
|
|
|
Other income:
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
8,485
|
|
|
|
8,852
|
|
Gain from the disposal of equipment
|
|
|
|
|
|
|
30,000
|
|
Other income
|
|
|
3,600
|
|
|
|
4,191
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
670,532
|
|
|
|
729,734
|
|
Provision for income taxes
|
|
|
217,000
|
|
|
|
236,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
453,532
|
|
|
$
|
493,734
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average common shares outstanding
|
|
|
966,132
|
|
|
|
966,132
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share data:
|
|
|
|
|
|
|
|
|
Net income per share
|
|
$
|
0.47
|
|
|
$
|
0.51
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends declared per share
|
|
$
|
0.15
|
|
|
$
|
0.15
|
|
|
|
|
|
|
|
|
|
|
See Notes to the Condensed Consolidated Financial Statements
4
CHICAGO RIVET & MACHINE CO.
Condensed Consolidated Statements of Retained Earnings
For the Three Months Ended March 31, 2013 and 2012
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
Retained earnings at beginning of period
|
|
$
|
25,337,604
|
|
|
$
|
24,461,381
|
|
|
|
|
Net income
|
|
|
453,532
|
|
|
|
493,734
|
|
|
|
|
Cash dividends declared in the period; $.15 per share in 2013 and 2012
|
|
|
(144,920
|
)
|
|
|
(144,920
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Retained earnings at end of period
|
|
$
|
25,646,216
|
|
|
$
|
24,810,195
|
|
|
|
|
|
|
|
|
|
|
See Notes to the Condensed Consolidated Financial Statements
5
CHICAGO RIVET & MACHINE CO.
Condensed Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 2013 and 2012
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
453,532
|
|
|
$
|
493,734
|
|
Adjustments to reconcile net income to net cashused in operating activities:
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
265,581
|
|
|
|
243,996
|
|
Gain on disposal of equipment
|
|
|
|
|
|
|
(30,000
|
)
|
Deferred income taxes
|
|
|
(84,000
|
)
|
|
|
(14,000
|
)
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts receivable, net
|
|
|
(1,285,084
|
)
|
|
|
(1,811,766
|
)
|
Inventories, net
|
|
|
(348,120
|
)
|
|
|
146,594
|
|
Other current assets
|
|
|
104,329
|
|
|
|
24,428
|
|
Accounts payable
|
|
|
499,342
|
|
|
|
282,297
|
|
Accrued wages and salaries
|
|
|
246,031
|
|
|
|
278,469
|
|
Other accrued expenses
|
|
|
14,827
|
|
|
|
78,395
|
|
Unearned revenue and customer deposits
|
|
|
(11,209
|
)
|
|
|
(61,549
|
)
|
|
|
|
|
|
|
|
|
|
Net cash used in operating activities
|
|
|
(144,771
|
)
|
|
|
(369,402
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(50,988
|
)
|
|
|
(102,156
|
)
|
Proceeds from the sale of equipment
|
|
|
|
|
|
|
30,000
|
|
Proceeds from certificates of deposit
|
|
|
2,450,000
|
|
|
|
1,147,000
|
|
Purchases of certificates of deposit
|
|
|
(747,000
|
)
|
|
|
(1,065,000
|
)
|
|
|
|
|
|
|
|
|
|
Net cash provided by investing activities
|
|
|
1,652,012
|
|
|
|
9,844
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
Cash dividends paid
|
|
|
(144,920
|
)
|
|
|
(144,920
|
)
|
|
|
|
|
|
|
|
|
|
Net cash used in financing activities
|
|
|
(144,920
|
)
|
|
|
(144,920
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
1,362,321
|
|
|
|
(504,478
|
)
|
Cash and cash equivalents at beginning of period
|
|
|
392,810
|
|
|
|
704,345
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
1,755,131
|
|
|
$
|
199,867
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental schedule of non-cash investing activities:
|
|
|
|
|
|
|
|
|
Capital expenditures in accounts payable
|
|
$
|
31,602
|
|
|
$
|
34,609
|
|
See Notes to the Condensed Consolidated Financial Statements
6
CHICAGO RIVET & MACHINE CO.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. In the opinion of the Company, the accompanying unaudited interim financial statements contain all adjustments necessary to present
fairly the financial position of the Company as of March 31, 2013 (unaudited) and December 31, 2012 (audited) and the results of operations and changes in cash flows for the indicated periods. Certain information and note disclosures
normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted from these unaudited financial statements in accordance with applicable rules. Please
refer to the financial statements and notes thereto included in the Companys Annual Report on Form 10-K for the year ended December 31, 2012.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates. The results of operations for the three month period ended March 31, 2013 are not necessarily indicative of the results to be expected for the year.
2. The Company extends credit on the basis of terms that are customary within our markets to various companies doing business primarily
in the automotive industry. The Company has a concentration of credit risk primarily within the automotive industry and in the Midwestern United States.
3. The Company is, from time to time, involved in litigation, including environmental claims and contract disputes, in the normal course
of business. While it is not possible at this time to establish the ultimate amount of liability with respect to contingent liabilities, including those related to legal proceedings, management is of the opinion that the aggregate amount of any such
liabilities, for which provision has not been made, will not have a material adverse effect on the Companys financial position.
4. The Companys effective tax rates were approximately 32.4% and 32.3% for the first quarter of 2013 and 2012, respectively. Rates
were lower than the U.S. federal statutory rate primarily due to the Domestic Production Activities Deduction allowed under Internal Revenue Code Section 199.
The Companys federal income tax returns for the 2010, 2011 and 2012 tax years are subject to examination by the Internal Revenue
Service (IRS). While it may be possible that a reduction could occur with respect to the Companys unrecognized tax benefits as an outcome of an IRS examination, management does not anticipate any adjustments that would result in a
material change to the results of operations or financial condition of the Company. No statutes have been extended on any of the Companys federal income tax filings. The statute of limitations on the Companys 2010, 2011 and 2012 federal
income tax returns will expire on September 15, 2014, 2015 and 2016, respectively.
The Companys state income tax returns for the
2010 through 2012 tax years remain subject to examination by various state authorities with the latest closing period on October 31, 2016. The Company is not currently under examination by any state authority for income tax purposes and no
statutes for state income tax filings have been extended.
5. Inventories are stated at the lower of cost or net realizable value, cost being
determined by the first-in, first-out method. A summary of inventories is as follows:
|
|
|
|
|
|
|
|
|
|
|
March 31,
2013
|
|
|
December 31,
2012
|
|
|
|
|
Raw material
|
|
$
|
2,095,188
|
|
|
$
|
2,009,691
|
|
Work-in-process
|
|
|
2,263,903
|
|
|
|
1,869,830
|
|
Finished goods
|
|
|
1,485,401
|
|
|
|
1,606,851
|
|
|
|
|
|
|
|
|
|
|
Inventory, gross
|
|
|
5,844,492
|
|
|
|
5,486,372
|
|
Valuation reserves
|
|
|
560,000
|
|
|
|
550,000
|
|
|
|
|
|
|
|
|
|
|
Inventory, net
|
|
$
|
5,284,492
|
|
|
$
|
4,936,372
|
|
|
|
|
|
|
|
|
|
|
7
CHICAGO RIVET & MACHINE CO.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
6. Segment InformationThe Company operates in two business segments as determined by its products. The fastener segment includes
rivets, cold-formed fasteners and screw machine products. The assembly equipment segment includes automatic rivet setting machines and parts and tools for such machines. Information by segment is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assembly
|
|
|
|
|
|
|
|
|
|
Fastener
|
|
|
Equipment
|
|
|
Other
|
|
|
Consolidated
|
|
Three Months Ended March 31, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
8,302,744
|
|
|
$
|
822,992
|
|
|
$
|
|
|
|
$
|
9,125,736
|
|
|
|
|
|
|
Depreciation
|
|
|
232,479
|
|
|
|
14,050
|
|
|
|
19,052
|
|
|
|
265,581
|
|
|
|
|
|
|
Segment profit
|
|
|
996,164
|
|
|
|
212,416
|
|
|
|
|
|
|
|
1,208,580
|
|
Selling and administrative expenses
|
|
|
|
|
|
|
|
|
|
|
(546,533
|
)
|
|
|
(546,533
|
)
|
Interest income
|
|
|
|
|
|
|
|
|
|
|
8,485
|
|
|
|
8,485
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
670,532
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
48,979
|
|
|
|
29,547
|
|
|
|
4,064
|
|
|
|
82,590
|
|
|
|
|
|
|
Segment assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable, net
|
|
|
5,481,700
|
|
|
|
381,316
|
|
|
|
|
|
|
|
5,863,016
|
|
Inventories, net
|
|
|
4,485,868
|
|
|
|
798,624
|
|
|
|
|
|
|
|
5,284,492
|
|
Property, plant and equipment, net
|
|
|
6,179,780
|
|
|
|
1,121,815
|
|
|
|
593,280
|
|
|
|
7,894,875
|
|
Other assets
|
|
|
|
|
|
|
|
|
|
|
7,886,325
|
|
|
|
7,886,325
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
26,928,708
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
8,334,120
|
|
|
$
|
866,198
|
|
|
$
|
|
|
|
$
|
9,200,318
|
|
|
|
|
|
|
Depreciation
|
|
|
211,914
|
|
|
|
14,125
|
|
|
|
17,957
|
|
|
|
243,996
|
|
|
|
|
|
|
Segment profit
|
|
|
1,050,436
|
|
|
|
201,332
|
|
|
|
|
|
|
|
1,251,768
|
|
Selling and administrative expenses
|
|
|
|
|
|
|
|
|
|
|
(560,886
|
)
|
|
|
(560,886
|
)
|
Gain from the disposal of equipment
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
|
|
30,000
|
|
Interest income
|
|
|
|
|
|
|
|
|
|
|
8,852
|
|
|
|
8,852
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
729,734
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
136,765
|
|
|
|
|
|
|
|
|
|
|
|
136,765
|
|
|
|
|
|
|
Segment assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable, net
|
|
|
5,806,019
|
|
|
|
404,173
|
|
|
|
|
|
|
|
6,210,192
|
|
Inventories, net
|
|
|
4,306,404
|
|
|
|
759,042
|
|
|
|
|
|
|
|
5,065,446
|
|
Property, plant and equipment, net
|
|
|
6,078,245
|
|
|
|
1,083,189
|
|
|
|
626,860
|
|
|
|
7,788,294
|
|
Other assets
|
|
|
|
|
|
|
|
|
|
|
6,740,367
|
|
|
|
6,740,367
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
25,804,299
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8
CHICAGO RIVET & MACHINE CO.
Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
Revenues for the first quarter of 2013 were $9,125,736 compared to $9,200,318 in the first quarter of 2012. The less than 1% decline was
primarily due to there being fewer shipping days in the current year quarter. This decline in revenues resulted in net income of $453,532, or $0.47 per share, in the first quarter of this year compared to $493,734, or $0.51 per share, in the first
quarter of 2012.
Fastener segment revenues were $8,302,744 in the first quarter of 2013, declining fractionally from
$8,334,120 reported in the first quarter of 2012. This ends a string of quarterly increases in sales over the previous year quarter that extended more than three years. The decline was primarily due to fewer shipping days in the current year as well
as a slowdown in the increase in domestic automotive production, upon which we rely for the majority of our fastener segment sales. Tooling costs increased $186,000 in the quarter, largely due to the introduction of new parts. These higher costs
were offset by reductions in the price of certain raw materials, principally steel, in the first quarter of this year compared to last year. Our cost control efforts were successful in keeping other cost of sales items little changed as a percentage
of net sales. The net result of these factors was a decline in fastener segment gross margin of approximately $79,000.
Assembly equipment segment revenues were $822,992 in the first quarter of 2013 compared to $866,198 in the first quarter of 2012. The 5%
revenue decline was due to fewer machines being shipped in the current year quarter and lower machine tool sales. Despite the decline in revenues, assembly equipment segment margins improved over the first quarter of 2012 by approximately $11,000
due to lower material costs and reductions in certain variable overhead expenses. Machine orders as of March 31, 2013 exceeded the level recorded one year earlier.
Selling and administrative expenses during the first quarter of 2013 were $1,351,814, a decline of 2.9% compared to $1,391,598 recorded in the first quarter of 2012. Sales commissions increased by
approximately $18,000 for the quarter compared to the first quarter of 2012, but that increase was more than offset by a reduction in payroll and related expenses of approximately $37,000 and various smaller items. Compared to net sales, selling and
administrative expenses declined to 14.8% for the current year quarter compared to 15.1% in the first quarter of 2012.
Working capital amounted to $16.3 million as of March 31, 2013, an increase of approximately $.4 million from the beginning of the
current year. The largest component of the net change in the first quarter was accounts receivable, which increased by $1.3 million due to greater sales activity during the quarter, compared to the fourth quarter of 2012. Partially offsetting this
change was an increase of $.8 million in accounts payable and accrued expenses since the beginning of the year. These balances are consistent with the level of activity during the quarter. The net result of these changes and other cash flow items on
cash and certificates of deposit was a decrease of $.3 million, to $7.1 million, as of March 31, 2013. After the end of the quarter, $1.3 million of cash was invested in the purchase of equipment for the production of cold-formed parts.
Management believes that current cash, cash equivalents and operating cash flow will provide adequate working capital for the foreseeable future.
We are pleased to report positive results for the first quarter of 2013. With an improved order backlog compared to a year ago, as well as forecasted growth in domestic automotive sales, our outlook for
the near-term remains positive. Although overall economic growth has remained slow, our sound financial condition has allowed us to invest in our operations in an effort to remain competitive, as well as pursue opportunities to profitably grow our
revenues and improve our bottom line. We will continue to make adjustments to our activities which we feel are necessary based on conditions in our markets, while maintaining the high level of quality and reliability of service our customers demand.
This discussion contains certain forward-looking statements which are inherently subject to risks and uncertainties that may
cause actual events to differ materially from those discussed herein. Factors which may cause such differences in events include, those disclosed under Risk Factors in our Annual Report on Form 10-K and in the other filings we make with
the United States Securities and Exchange Commission. These factors, include among other things: conditions in the domestic automotive industry, upon which we rely for sales revenue, the intense competition in our markets, the concentration of our
sales to two major customers, the price and availability of raw materials, labor relations issues, losses related to product liability, warranty and recall claims, costs relating to environmental laws and regulations, the loss of the services of our
key employees and difficulties in achieving cost savings. Many of these
9
factors are beyond our ability to control or predict. Readers are cautioned not to place undue reliance on these forward-looking statements. We undertake no obligation to publish revised
forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
10
CHICAGO RIVET & MACHINE CO.
Item 4. Controls and Procedures.
(a) Disclosure Controls and Procedures. The Companys management, with the participation of the Companys Chief Executive Officer and President, Chief Operating Officer and Treasurer (the
Companys principal financial officer), has evaluated the effectiveness of the Companys disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended
(the Exchange Act)) as of the end of the period covered by this report. Based on such evaluation, the Companys Chief Executive Officer and President, Chief Operating Officer and Treasurer have concluded that, as of the end of such
period, the Companys disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the
Exchange Act.
(b) Internal Control Over Financial Reporting. There have not been any changes in the Companys internal
control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect,
the Companys internal control over financial reporting.
11