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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarterly Period Ended February 29, 2004
Commission File Number 0-9599
HIA, INC.
(Exact name of Registrant as specified in its charter)
New York 16-1028783
State or other jurisdiction of I.R.S. Employer
incorporation or organization Identification Number
4275 Forest Street
Denver, Colorado 80216
(Address of principal executive offices, zip code)
(303) 394-6040
(Registrant's telephone number, including area code)
_______________________________________________________________________________
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 such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes__x__ No___
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date: 9,289,935 shares of
the Registrant's $.01 par value common stock were outstanding at February 29,
2004.
HIA, INC.
INDEX
Part I. Financial Information
Item 1. Consolidated Financial Statements . . . . . . . . . . . . . . 3
Item 2. Management's Discussion and Analysis or Financial
Condition and Results of Operation. . . . . . . . . .10
Item 3. Quantitative and Qualitative Disclosures about
Market Risk . . . . . . . . . . . . . . . . . . . . .13
Item 4. Controls and Procedures . . . . . . . . . . . . . . . . . . .13
Part II. Other Information
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . .14
Item 2. Changes in Securities and Use of Proceeds . . . . . . . . . .14
Item 3. Defaults upon Senior Securities . . . . . . . . . . . . . . .14
Item 4. Submission of Matters to a Vote of Security Holders . . . . .14
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . .14
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . .14
SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Part 1.
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets as of February 29, 2004
and November 30, 2003 . . . . . . . . . . . . . . . . . . . . . . . . 4
Consolidated Statements of Operations for the three months
ended February 29, 2004 and 2003. . . . . . . . . . . . . . . . . . . 6
Consolidated Statements of Cash Flows for the three months
ended February 29, 2004 and 2003. . . . . . . . . . . . . . . . . . . 7
Notes to Consolidated Financial Statements. . . . . . . . . . . . . . 8
Forward Looking Statements
- --------------------------
Statements made in this Form 10-Q that are historical or current facts are
"forward-looking statements" made pursuant to the safe harbor provisions of
Section 27A of the Securities Act of 1933 ("The ACT") and Section 21E of the
Securities Exchange Act of 1934. These statements often can be identified by
the use of terms such as "may," "will," "expect," "believes," "anticipate,"
"estimated," "approximate," or "continue," or the negative thereof. The Company
intends that such forward-looking statements be subject to the safe harbors for
such statements. The Company wishes to caution readers not to place undue
reliance on any such forward-looking statements, which speak only as of the
date made. Any forward-looking statements represent management's best
judgements as to what may occur in the future. However, forward-looking
statements are subject to risks, uncertainties and important factors beyond the
control of the Company that could cause actual results and events to differ
materially from historical results of operations to revise any forward-looking
statements to reflect events or circumstances after the date of such statement
or to reflect the occurrence of anticipated or unanticipated events.
Page 3
HIA, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Information as of November 30, 2003 is based upon an audited balance sheet.
All other information is unaudited.)
February 29, November 30,
2004 2003
------------ ------------
ASSETS
Current Assets:
Cash $ 3,000 $ 1,000
Accounts receivable, net of allowance for
doubtful accounts of $117,000 and $107,000 2,581,000 3,612,000
Inventories 5,608,000 4,079,000
Other current assets 273,000 270,000
------------ ------------
Total current assets 8,465,000 7,962,000
------------ ------------
Property and equipment, at cost:
Leasehold Improvements 357,000 349,000
Equipment 977,000 1,405,000
------------ ------------
1,334,000 1,754,000
Less accumulated depreciation 1,175,000 1,594,000
------------ ------------
Net property and equipment 159,000 160,000
Other assets 512,000 211,000
Goodwill, net of amortization
of $383,000 and $383,000 1,151,000 1,151,000
Non-compete agreement, net of amortization
of $71,000 and $67,500 79,000 83,000
------------ ------------
TOTAL ASSETS $ 10,366,000 $ 9,567,000
============ ============
The accompanying notes are an integral part of the consolidated financial
statements.
Page 4
HIA, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS (Continued)
(Information as of November 30, 2003 is based upon an audited balance sheet.
All other information is unaudited.)
February 29, November 30,
2004 2003
------------ ------------
LIABILITIES
Current Liabilities:
Note payable to bank $ 2,062,000 $ 1,288,000
Current maturities of long-term obligations 169,000 215,000
Accounts payable 2,311,000 974,000
Checks written in excess of deposits 261,000 342,000
Accrued expenses and other current liabilities 336,000 963,000
------------ ------------
Total current liabilities 5,139,000 3,782,000
------------ ------------
Long-term Obligations:
Notes payable, less current maturities 618,000 646,000
------------ ------------
Total long-term obligations 618,000 646,000
------------ ------------
TOTAL LIABILITIES 5,757,000 4,428,000
------------ ------------
COMMITMENTS
STOCKHOLDERS' EQUITY
Common stock of $.01 par value; authorized
20,000,000 shares: issued 13,108,196;
outstanding 9,289,935 and 9,303,310 131,000 131,000
Additional paid-in capital 3,109,000 3,109,000
Retained earnings 2,724,000 3,247,000
------------ ------------
5,964,000 6,487,000
Less treasury stock: 3,818,261 and
3,804,886 shares at cost (1,355,000) (1,348,000)
------------ ------------
Total stockholders' equity 4,609,000 5,139,000
------------ ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 10,366,000 $ 9,567,000
============ ============
The accompanying notes are an integral part of the consolidated financial
statements.
Page 5
HIA, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
For the Three Months Ended
Feb 29, 2004 Feb 28, 2003
------------ ------------
Net sales $ 3,563,000 $ 3,523,000
Cost of sales 2,298,000 2,345,000
------------ ------------
Gross profit 1,265,000 1,178,000
Selling, general
and administrative
expenses 2,088,000 2,041,000
------------ ------------
Operating loss (823,000) (863,000)
Other income (expense):
Interest income 21,000 19,000
Interest expense (32,000) (41,000)
Miscellaneous income 8,000 12,000
------------ -----------
Total other expense (3,000) (10,000)
Loss before income taxes (826,000) (873,000)
Tax benefit 303,000 320,000
------------ -----------
NET LOSS ($ 523,000) ($ 553,000)
============ ===========
Basic and diluted loss
per share ($ .06) ($ .06)
Weighted average common shares outstanding:
Basic 9,309,164 9,932,593
Dilutive 9,309,164 9,932,593
The accompanying notes are an integral part of the consolidated financial
statements.
Page 6
HIA, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
For the Three Months Ended
Feb 29, 2004 Feb 28, 2003
------------ ------------
Increase (decrease) in cash
OPERATING ACTIVITIES:
Net loss ($ 523,000) ($553,000)
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation and amortization 31,000 42,000
Deferred income taxes (301,000) (319,000)
Inventory Reserve 12,000 (67,000)
Changes in current assets and
current liabilities:
Accounts receivable 1,031,000 247,000
Inventories (1,541,000) (1,415,000)
Other current assets (3,000) (45,000)
Accounts payable 1,337,000 1,938,000
Accrued expenses and other
current liabilities (627,000) (816,000)
------------ -----------
NET CASH USED IN
OPERATING ACTIVITIES (584,000) (988,000)
------------ -----------
INVESTING ACTIVITIES:
(Purchases) Disposals of
property and equipment (26,000) (20,000)
Decrease (increase) in other assets - 0 - - 0 -
------------ -----------
NET CASH USED IN
INVESTING ACTIVITIES (26,000) (20,000)
------------ -----------
FINANCING ACTIVITIES:
Proceeds from note payable to bank (1,304,000) 1,878,000
Payments on borrowings on note payable to bank 2,078,000 (1,130,000)
Repayments of debt (74,000) (75,000)
Payments on capital lease obligations - 0 - - 0 -
Increase in checks written in excess of deposits (81,000) 293,000
Purchase of treasury stock (7,000) - 0 -
Sale of treasury stock - 0 - 37,000
------------ -----------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 612,000 1,003,000
------------ -----------
NET DECREASE IN CASH 2,000 (5,000)
CASH, BEGINNING OF PERIOD 1,000 7,000
------------ -----------
CASH, END OF PERIOD $ 3,000 $ 2,000
============ ===========
The accompanying notes are an integral part of the consolidated financial
statements.
Page 7
HIA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. Basis for Presentation
----------------------
The accompanying unaudited consolidated financial statements have been prepared
in accordance with the instructions of Form 10-Q and do not include all the
information and footnotes required by generally accepted accounting principles
for complete financial statement. In the opinion of management, all adjustments
(consisting of normal recurring adjustments) considered necessary for fair
presentation have been included. Operating results for the three months ended
February 29, 2004 are not necessarily indicative of the results that may be
obtained for the year ending November 30, 2004. These statements should be read
in conjunction with the consolidated financial statements and notes thereto
included in the Registration's Form 10-K for the year ended November 30, 2003
filed with the Securities and Exchange Commission on February 25, 2004.
B. Net Loss Per Common Share
-------------------------
Statement of Financial Accounting Standards No. 128, "Earnings Per Share",
provides for the calculation of "Basic" and "Diluted" earnings per share. Basic
earnings per share includes no dilution and is computed by dividing income
available to common stockholders by the weighted-average number of shares
outstanding during the period (9,309,164 and 9,932,593 for 2004 and 2003).
Diluted earnings per share reflect the potential of securities that could share
in the earnings of the Company, similar to fully diluted earnings per share.
For the periods ended February 29, 2004 and February 28, 2003, total stock
options in the amount of 750,000 and 750,000 are not considered in the
computation of diluted earnings per share as their inclusion would be
anti-dilutive.
C. Stockholders' Equity
--------------------
Purchase of Treasury Stock
On September 15, 2003, the Company sent a tender offer to all its shareholders
which offered to re-purchase up to 1 million shares of HIA, Inc. common stock,
for $.50 per share. The expiration date of the offer was October 13, 2003. On
October 10, 2003 the Company sent a letter to all its shareholders amending
the original expiration date from October 13, 2003 to October 31, 2003 at 5:00
p.m., Mountain Time. On October 16, 2003 the Company sent a letter to all its
shareholders amending the original offer to re-purchase 1 million shares of its
common stock to 1.5 million shares of its common stock (an increase of 500,000
shares) at the same purchase price and the same expiration date.
A preliminary accounting was made by the Company's transfer agent during January
of 2004 whereby the Company was issued a certificate for 1,430,390 shares of
common stock (treasury stock). The Company paid a total of $735,000 (including
$20,000 of legal and transfer fees) for the 1,430,390 shares of common stock at
an average price of $.51 per share. At the time of reconciliation in January
there still remained 14,224 shares of stock, representing 13 shareholders, for
which the proper documentation had not been completed by the representative
shareholders per the requirements of the tender offer. A final settlement of
those outstanding shares are expected to be made during the second quarter of
2004.
Page 8
On January 8, 2004, the Board of Directors granted common stock options to the
officers of the Company and 3 senior managers to purchase a total of 750,000
shares of treasury stock at $.50 per share to expire December 31, 2005. As of
February 29, 2004, none of the shares have been subscribed to by the officers
or senior management. The options' exercise price was equal to or greater than
the common stock market price at the date of grant.
During the first quarter of fiscal 2004, the Company purchased 13,375 shares
of common stock from non-affiliated stockholders for $.50 per share, a total
purchase price of $6,688.
Stock Option Plans - The Company applies Accounting Principles Board ("APB")
Opinion 25, "Accounting for Stock Issued to Employees," and the related
interpretations in accounting for all stock option plans. Under APB Opinion 25,
no compensation cost has been recognized for stock options issued to employees
as the exercise price of the Company's stock options granted equals or exceeds
the market price of the underlying common stock on the date of grant.
SFAS No. 123 requires the Company to provide pro forma information regarding net
income and net income per share as if compensation costs for the Company's stock
option plans and other stock awards had been determined in accordance with the
fair value based method prescribed in SFAS No. 123. The Company estimates the
fair value of each stock award at the grant date by using the Black-Scholes
option-pricing model with the following weighted-average assumptions for quarter
ended February 29, 2004. No options were granted in 2003 and 2002.
2004
----------
Dividend yield 0%
Volatility 75.5%
Risk free interest rate 2.08%
Expected life 2 years
Page 9
Under the accounting provisions of SFAS No. 123, the Company's net income per
share would have been adjusted to the following pro forma amounts for the years
ended November 30, 2003 and the quarter ended February 29, 2004:
2004 2003
---------- ----------
Net income (loss) - as reported $ (523,000) $ 720,000
Effect of employee stock-based
compensation included in
reported net income 0 -
Effect of employee stock-based
compensation per SFAS 123 (101,000) -
---------- ----------
Net income (loss) applicable to
common stock - pro forma $ (624,000) $ 720,000
========== ==========
Basic and diluted:
Income per share - as reported $ (.07) $ .07
Per share effect of employee
stock-based compensation
included in reported net
income - -
Per share effect of employee
stock-based compensation
per SFAS 123 - -
---------- ----------
Income per share applicable to
common stock - pro forma $ (.07) $ .07
========== ==========
D. Supplemental Disclosure of Cash Flow Information
------------------------------------------------
Cash payments for interest were $32,000 and $41,000 for the three months ended
February 29, 2004 and February 28, 2003. There were no cash payments for income
taxes for the three months ended February 29, 2004 and February 28, 2003.
Item 2. Management's Discussion and Analysis of Financial Condition and Result
of Operation
Liquidity and Capital Resources
- -------------------------------
The net cash used in operating activities decreased by $404,000 for the three
months ended February 29, 2004 as compared to the same period last year
primarily due to an increase in accounts receivable of $784,000, an decrease
in accounts payable of $601,000 and a decrease in accrued expenses and other
current liabilities of $189,000. The changes in accounts receivables and
accounts payable were primarily due to the higher outstanding balances at the
end of fiscal 2002 (accounts receivable $2,702,000 and accounts payable
$294,000) as compared to the end of fiscal 2003 (accounts receivable $3,612,000
and accounts payable $974,000) which resulted in a significant variance for the
three months ended February 29, 2004 as compared to February 28, 2003. Accrued
expenses and other current liabilities decreased by $189,000 primarily due to
the increase in the first quarter of 2003 in the amount of accrued payroll of
$68,000.
Page 10
The net cash used in investing activities increased $6,000 for the three months
ended February 29, 2004 as compared to February 28, 2003.
In the first fiscal quarter of 2004 the Company disposed of $446,000 of computer
equipment which was fully depreciated. The reason for the write-off was that the
Company purchased new enterprise software and hardware equipment in the second
quarter of 2000, which replaced equipment previously purchased and completely
disposed of at the end of 2003.
The net cash provided by financing activities decreased as compared to same
period last year by $391,000 primarily as a result of the decrease of $374,000
in checks written in excess of deposits.
On September 15, 2003, the Company sent a tender offer to all its shareholders
which offered to re-purchase up to 1 million shares of HIA, Inc. common stock,
for $.50 per share. The expiration date of the offer was October 13, 2003. On
October 10, 2003 the Company sent a letter to all its shareholders amending the
original expiration date from October 13, 2003 to October 31, 2003 at 5:00 p.m.,
Mountain Time. On October 16, 2003 the Company sent a letter to all its
shareholders amending the original offer to re-purchase 1 million shares of its
common stock to 1.5 million shares of its common stock (an increase of 500,000
shares) at the same purchase price and the same expiration date.
A preliminary accounting was made by the Company's transfer agent during January
of 2004 whereby the Company was issued a certificate for 1,430,390 shares of
common stock (treasury stock). The Company paid a total of $735,000 (including
$20,000 of legal and transfer fees) for the 1,430,390 shares of common stock at
an average price of $.51 per share. At the time of reconciliation in January
there still remained 14,224 shares of stock, representing 13 shareholders, for
which the proper documentation had not been completed by the representative
shareholders per the requirements of the tender offer. A final settlement of
those outstanding shares are expected to be made during the second quarter of
2004.
On January 8, 2004, the Board of Directors granted common stock options to the
officers of the Company and 3 senior managers to purchase a total of 750,000
shares of treasury stock at $.50 per share to expire December 31, 2005. As of
February 29, 2004, none of the shares have been subscribed to by the officers
or senior management. The options' exercise price was equal to or greater than
the common stock market price at the date of grant.
During the first quarter of fiscal 2004, the Company purchased 13,375 shares of
common stock from non-affiliated stockholders for $.50 per share, a total
purchase price of $6,688.
The following is a summary of working capital and current ratio for the periods
presented:
February 29, 2004 November 30, 2003
----------------- -----------------
Working Capital $ 3,326,000 $ 4,180,000
Current Ratio 1.65 to 1 2.11 to 1
The Company's working capital decreased by $854,000 during the three months
ended February 29, 2004 as compared to November 30, 2003 primarily as a result
of an increase in inventories of $1,529,000 offset substantially by a decrease
in accounts receivable of $1,031,000 and an increase in accounts payable of
$1,337,000.
Page 11
The Company's current ratio decreased by .46 during the three months ended
February 29, 2004 as compared to November 30, 2003 primarily as a result of
current assets increasing by $503,000 and current liabilities increasing by
$1,357,000.
Management believes that the present working capital is adequate to conduct its
present operations. The Company does not anticipate any additional material
capital expenditures for fiscal 2004. As of February 29, 2004, the Company and
its subsidiary have an available line-of-credit of $5,750,000. As of February
29, 2004, $4,462,000 is unused under the line of credit. The line of credit
expires on June 30, 2004. The line-of-credit agreement limits the payment of
dividends by CPS Distributors, Inc. and its subsidiaries ("CPS") to HIA, Inc.
CPS is the wholly-owned subsidiary of HIA, Inc. The line-of-credit agreement
also limits the payment of any expenses of HIA, Inc by CPS in excess of $50,000
during any twelve-month period. This restriction does not have a significant
impact on HIA, Inc's ability to meet its cash needs as its cash needs are
minimal. On June 17, 2003, the Company executed an amendment to the loan
agreement with Wells Fargo Bank regarding a change in the debt covenants. The
bank agreed to waive the minimum debt service covenant for the 2nd quarter of
fiscal 2003 and decrease the covenant restrictions for the remainder of the term
of the agreement. The Company is currently renegotiating with its current bank
to extend the line of credit for an additional 2 years at a lower interest rate.
Income Taxes
- ------------
As of February 29, 2004, the Company has recorded a current net deferred tax
asset totaling $138,000 and has recorded a noncurrent net deferred tax asset
totaling $365,000. Based upon the Company's recent history of taxable income
and its projections for future earnings, management believes that it is more
likely than not that sufficient taxable income will be generated in the near
term to utilize the net deferred tax assets.
Results of Operations
- ---------------------
Three Months Ended February 29, 2004 Compared to Three Months Ended February 28,
2003.
Net sales increased $39,000 for the three months ended February 29, 2004 as
compared to February 28, 2003.
Cost of Sales decreased by $47,000 for the three months ended February 29, 2004
as compared to February 28, 2003.
Gross profit for the three months ended February 29, 2004 were 35.50% as
compared to 33.40% during the three months ended February 28, 2003 (an increase
of 2.10%). This was primarily due to the continuing purchasing and pricing
efforts instituted by management beginning the second quarter of 2003.
Selling, general and administrative expenses increased by $47,000 during the
three months ended February 29, 2004 as compared to the three months ended
February 28, 2003 primarily due to an increase of $59,000 in the accrual of
profit sharing contributions and bonuses expected to be paid after the end of
the fiscal year.
Other expenses decreased $7,000 during the three months ended February 29, 2004
as compared to the three months ended February 28, 2003 primarily due to the
decrease in interest expense of $9,000. The decrease in interest expense was
primarily due to a lower average line-of-credit balance ($1,701,000 for first
quarter 2004 compared to $1,376,000 for first quarter 2003).
Page 12
Net loss decreased $30,000 during the three months ended February 29, 2004 as
compared to the three months ended February 28, 2003 primarily due to an
increase in gross profit of $87,000 offset by the additional increases in
selling, general and administrative of $47,000 and a net adjustment in the
income tax benefit of $17,000. The Company is currently renegotiating with its
current bank to extend the line of credit for an additional 2 years at a lower
interest rate.
The operating results for the three months ended February 29, 2004 as compared
to the three months ended February 28, 2003 were substantially similar in
almost all regards with the exception in the increase of gross profit of 2.1%.
The current market conditions under which the company operates has remained
substantially unchanged and water restrictions are expected to continue in 2004
similar to conditions experienced in 2003.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Company is exposed to market risk through interest rates related to its
investment of current cash and cash equivalents. These funds are generally
highly liquid with short-term maturities, and the related market risk is not
considered material. The Company's note payable to bank has a variable
interest rate equal to Wells Fargo's existing bank prime rate (4% as of
February 29, 2004). A 10% increase in short-term interest rates on the note
payable to bank of $1,288,000 would increase the Company's yearly interest
expense by approximately $5,000, assuming borrowed amounts remain outstanding
at current levels. The Company's management believes that fluctuation in
interest rates in the near term will not materially affect the Company's
consolidated operating results, financial position or cash flow.
Item 4. Controls and Procedures
The Company maintains a set of disclosure controls and procedures that are
designed to ensure that information required to be disclosed in the reports
filed by the Company under the Securities Exchange Act of 1934, as amended is
recorded, processed, summarized and reported within the time periods specified
in the SEC's rules and forms. As of the end of the quarterly period covered by
this report, the Company carried out an evaluation, under the supervision of
the President and Chief Financial Officer, of the effectiveness of the design
and operation of our disclosure controls and procedures pursuant to Rule 13a-14
of the Exchange Act. Based on that evaluation, the President and Chief Financial
Officer concluded that our disclosure controls and procedures are effective.
There have been no significant changes in the Company's internal controls or
other factors that could significantly affect those controls subsequent to the
date of their evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Page 13
Part II
Item 1. Legal Proceedings
NONE
Item 2. Changes in Securities and Use of Proceeds
NONE
Item 3. Defaults Upon Senior Securities
NONE
Item 4. Submission of Matters to a Vote of Security Holders
NONE
Item 5. Other Information
NONE
Item 6. Exhibits and Reports on Form 8-K
a. The following documents are filed as exhibits to this Form 10Q:
Exhibit (32) Section 1350 Certification
Exhibit (31) Rule 13a-14(a)/15d-14(a) Certification
b. Reports of Form 8-K
NONE
Page 14
Exhibit 32
Certification Pursuant to Section 1350 of Chapter 63
Of Title 18 of the United States Code
I, Alan C. Bergold the President and Chief Financial Officer of HIA, Inc.,
certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002 that: (i) the report fully complies with the
requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934
and (ii) the information contained in the report fairly presents, in all
material respects, the financial condition and results of operations of HIA,
Inc.
__________/s/______________________
Alan C. Bergold
President & Chief Financial Officer
- -------------------------------------------------------------------------------
Exhibit 31
CERTIFICATION
I, Alan C. Bergold certify that:
1. I have reviewed this report on Form 10-Q of HIA, 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(s) 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 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;
Page 15
(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 (the registrant's fourth
fiscal quarter in the case of an annual report) 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(s) and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent
functions):
(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.
Date: __April 12, 2004__ ________/s/__________________
Alan C. Bergold, President and
Treasurer and Director
Page 16
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 hereunto duly authorized.
HIA, INC.
Date:_____April 12, 2004___________ ______/s/______________
Alan C. Bergold
President &
Chief Financial Officer
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