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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: January 25, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number 0-15046
Westerbeke Corporation
- ---------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 04-1925880
- --------------------------------- ---------------------
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) Identification No.)
Myles Standish Industrial Park
Taunton, Massachusetts 02780
- ----------------------------------------- ------------
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (508) 823-7677
----------------
No Change
- ---------------------------------------------------------------------------
(Former name, former address and former fiscal year if
changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was to file such reports.) and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Outstanding at
Class February 7, 2003
----- ----------------
Common Stock, $.01 par value 1,954,809
1
WESTERBEKE CORPORATION AND SUBSIDIARY
INDEX
Page
Part I - Financial Information
Item 1 - Consolidated Financial Statements
Consolidated Balance Sheets as
of January 25, 2003 and
October 26, 2002 3
Consolidated Statements of
Operations for the three
months ended January 25, 2003
and January 26, 2002 4
Consolidated Statements of
Comprehensive Income for the
three months ended January 25, 2003
and January 26, 2002, respectively 5
Consolidated Statements of
Cash Flows for the three
months ended January 25, 2003
and January 26, 2002 6
Notes to Consolidated
Financial Statements 7-11
Item 2 -
Management's Discussion and
Analysis of Financial Condition
and Results of Operations 12-14
Item 3 -
Quantitative and Qualitative Disclosures
About Market Risk 15
Item 4 -
Controls and Procedures 15
Part II - Other Information 16
Signatures 17
Certifications 18-22
2
WESTERBEKE CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
January 25, October 26,
2003 2002
----------- -----------
(Unaudited) Audited
ASSETS
Current assets:
Cash and cash equivalents $ 1,711,800 $ 4,471,100
Accounts receivable, net of allowance
for doubtful accounts and price
allowances of $556,200 at January 25,
2003 and $480,000 at October 26, 2002 2,847,900 2,114,500
Inventories (Note 2) 5,447,900 5,048,300
Prepaid expenses and other assets 505,900 456,800
Prepaid income taxes - 267,800
Deferred income taxes 1,179,800 951,700
----------- -----------
Total current assets 11,693,300 13,310,200
----------- -----------
Property, plant and equipment, net (Note 4) 8,179,900 8,348,600
Split dollar premiums (Note 5) 1,022,600 1,068,300
Other assets, net 165,400 170,300
Investments in marketable securities 111,000 109,900
Note receivable - related party 30,900 36,200
Deferred income taxes 66,100 46,400
----------- -----------
$21,269,200 $23,089,900
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt (Note 3) $ 346,200 $ 340,300
Accounts payable 1,381,800 1,385,600
Accrued expenses and other liabilities 1,028,100 1,237,400
Accrued income taxes 1,317,700
----------- -----------
Total current liabilities 2,756,100 4,281,000
----------- -----------
Long-term debt, net of current portion
(Note 3) 4,341,300 4,430,100
----------- -----------
Total liabilities 7,097,400 8,711,100
----------- -----------
Stockholders' equity:
Preferred stock, $1.00 par value;
authorized 1,000,000 shares;
none issued or outstanding
Common stock, $.01 par value; authorized
5,000,000 shares; issued 2,244,682 at
January 25, 2003 and October 26, 2002 22,400 22,400
Additional paid-in-capital 6,126,700 6,126,700
Accumulated other comprehensive loss (498,100) (468,600)
Retained earnings 9,328,100 9,505,600
----------- -----------
14,979,100 15,186,100
Less - Treasury shares at cost, 289,873
shares at January 25, 2003 and
October 26, 2002 807,300 807,300
----------- -----------
Total stockholders' equity 14,171,800 14,378,800
----------- -----------
$21,269,200 $23,089,900
=========== ===========
The accompanying notes are an integral part of the consolidated financial
statements.
3
WESTERBEKE CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended
----------------------------
January 25, January 26,
2003 2002
----------- -----------
(Unaudited)
Net sales $4,495,800 $4,674,500
Cost of sales 3,548,900 3,719,500
---------- ----------
Gross profit 946,900 955,000
Selling, general and administrative expense 1,058,900 1,094,900
Research and development expense 310,800 304,300
---------- ----------
Loss from operations (422,800) (444,200)
---------- ----------
Other income (expense):
Interest expense, net (60,500) (103,600)
---------- ----------
Other expense, net (60,500) (103,600)
---------- ----------
Loss before income taxes (483,300) (547,800)
Provision for income taxes (benefit) (Note 6) (305,800) (219,100)
---------- ----------
Net loss $ (177,500) $ (328,700)
========== ==========
Loss per common share, basic $ (.09) $ (.17)
========== ==========
Loss per common share, diluted $ (.09) $ (.17)
========== ==========
Weighted average common shares, basic 1,954,809 1,935,477
========== ==========
Weighted average common shares, diluted 1,954,809 1,935,477
========== ==========
The accompanying notes are an integral part of the consolidated financial
statements.
4
WESTERBEKE CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Three Months Ended
-------------------------------------
January 25, 2003 January 26, 2002
---------------- ----------------
(Unaudited)
Net loss $(177,500) $(328,700)
Unrealized gain (loss) on marketable
securities, net of income taxes of,
$19,700 at January 25, 2003 and
$13,800 at January 26, 2002 (29,500) 20,700
--------- ---------
Comprehensive loss $(207,000) $(308,000)
========= =========
The accompanying notes are an integral part of the consolidated financial
statements.
5
WESTERBEKE CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended
-----------------------------
January 25, January 26,
2003 2002
----------- -----------
(Unaudited)
Cash flows from operating activities:
Net loss $ (177,500) $ (328,700)
Reconciliation of net loss to net cash
provided (used) by operating activities:
Depreciation and amortization 198,600 197,200
Deferred income taxes (228,100) -
Changes in operating assets and liabilities:
Accounts receivable (733,400) 136,700
Inventories (399,600) 7,700
Prepaid expenses and other assets (49,100) (44,000)
Accounts payable (3,800) (33,400)
Accrued expenses and other liabilities (209,300) (117,400)
Prepaid income taxes 267,800 -
Accrued income taxes payable (1,317,700) (219,500)
----------- -----------
Net cash used by operating activities (2,652,100) (401,400)
----------- -----------
Cash flows used in investing activities:
Purchase of property, plant and equipment (24,900) (54,200)
Purchase of marketable securities (4,700) (13,300)
Proceeds from payment of note receivable -
related party 5,300 4,900
----------- -----------
Net cash used in investing activities (24,300) (62,600)
----------- -----------
Cash flows from financing activities:
Exercise of stock options - 1,100
Net borrowings under revolving demand note - 500,000
Principal payments on long-term debt and
capital leases (82,900) (77,400)
----------- -----------
Net cash provided by (used in) financing
activities (82,900) 423,700
----------- -----------
Decrease in cash and cash equivalents (2,759,300) (40,300)
Cash and cash equivalents, beginning of period 4,471,100 40,300
----------- -----------
Cash and cash equivalents, end of period $ 1,711,800 $
=========== ===========
Supplemental cash flow disclosures:
Interest paid $ 78,600 $ 125,600
Income taxes paid 1,352,500 -
Supplemental disclosures of non-cash items:
Decrease in unrealized gains on marketable
securities, net of income taxes (2,100) (9,800)
Unrealized gain (loss) in split-dollar life
insurance investments, net of income taxes (27,400) 30,500
The accompanying notes are an integral part of the consolidated financial
statements.
6
WESTERBEKE CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Summary of Significant Accounting Policies:
-------------------------------------------
A. Financial Statements
The condensed consolidated financial statements included herein have been
prepared by Westerbeke Corporation (the "Company"), without audit, pursuant
to the rules and regulations of the Securities and Exchange Commission.
While certain information and footnote disclosures normally included in
financial statements prepared in accordance with accounting principles
generally accepted in the United States of America have been condensed or
omitted pursuant to such rules and regulations, the Company believes that
the disclosures made herein are adequate to make the information presented
not misleading. It is recommended that these condensed financial statements
be read in conjunction with the consolidated financial statements and notes
thereto included in the Company's Annual Report on Form 10-K for the fiscal
year ended October 26, 2002.
In the opinion of management of the Company, all adjustments, consisting
only of normal recurring adjustments necessary to present fairly the
financial position of Westerbeke Corporation and Subsidiary as of January
25, 2003, and the results of their operations and their cash flows, for the
three-month period then ended, have been included.
The results disclosed in the condensed consolidated financial statements are
not necessarily indicative of the results expected for the full fiscal year.
B. Basis of Presentation
The condensed consolidated financial statements include the accounts of the
Company and its wholly owned subsidiary, Westerbeke International, Inc. (a
Foreign Sales Corporation). All inter-company transactions and accounts are
eliminated in consolidation.
Continued
7
WESTERBEKE CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
(Unaudited)
C. Earnings per Share
Basic income (loss) per common share is computed by dividing income (loss)
available to common stockholders by the weighted average number of shares
outstanding for the period. Diluted income (loss) per share reflects the
maximum dilution that would have resulted from the exercise of stock
options. Diluted income (loss) per share is computed by dividing net income
(loss) by the weighted average number of common shares and all dilutive
securities, except when the effect would be antidilutive.
For the three months ended:
--------------------------------------------------------------------------------
January 25, 2003 January 26, 2002
------------------------------------- --------------------------------------
Loss Net Loss Net
per share Shares Loss per share Shares Loss
--------- ------ ---- --------- ------ ----
Basic $(.09) 1,954,809 $(177,500) $(.17) 1,935,477 $(328,700)
Effect of
Stock options - - - - - -
----- --------- --------- ----- --------- ---------
Diluted $(.09) 1,954,809 $(177,500) $(.17) 1,935,477 $(328,700)
At January 25, 2003, there were 183,300 exercisable options outstanding,
which were convertible into 183,300 common shares. These shares were
excluded from the earnings per share calculation since their inclusion would
have been antidilutive.
D. Split-Dollar Life Insurance Agreement
The Company has a split dollar life insurance agreement with John H.
Westerbeke, Jr., Chairman, President and Chief Executive Officer of the
Company. This agreement allows the premiums paid to be invested in a select
group of mutual funds thus subjecting the total cash value of premiums paid
to market risk.
The cash proceeds the Company would receive depends upon the method of
termination. If termination is initiated by death, the Company would
receive the cumulative value of the premiums paid. If the policy is
terminated for other reasons, the Company would receive the lesser of the
fair value of the mutual funds in which the premiums are invested or the
cumulative value of the premiums paid. The Company accounts for this
arrangement in accordance with SFAS No. 115, Accounting for Certain
Investments in Debt and Equity Securities. The investments are classified
as available for sale and unrealized gains and losses are reflected as a
component of other comprehensive income net of tax. Pursuant to the
requirements of the Sarbanes-Oxley Act of 2002, the Company has stopped
paying premiums in connection with such agreement.
Continued
8
WESTERBEKE CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
(Unaudited)
2. Inventories
-----------
The Company uses the last-in, first-out (LIFO) method to value inventory.
Inventories are comprised of the following:
January 25, October 26,
2003 2002
----------- -----------
Raw materials $4,319,100 $3,808,400
Work-in-process 465,700 614,000
Finished goods 663,100 625,900
---------- ----------
$5,447,900 $5,048,300
========== ==========
The Company has estimated the fiscal year-end 2003 inventory levels and the
inflation/deflation that will occur during the fiscal year in determining
their effect on the LIFO reserve at January 25, 2003. As a result, the
Company anticipates an increase in its LIFO valuation account as of October
25, 2003. Accordingly, the Company has recorded an increase of $22,500, on
a pro rata basis, in the LIFO reserve during the first three months of
fiscal 2003. During the first three months of 2002, the Company also
recorded, on a pro rata basis, an increase of $22,500 in the LIFO reserve.
Inventories would have been $1,054,000 higher at January 25, 2003 and
$1,031,500 higher as of October 26, 2002, if the first-in, first-out (FIFO)
method had been used. Inventory cost determination on the FIFO method
approximates replacement or current cost.
3. Long-Term Debt
--------------
January 25, 2003 October 26, 2002
---------------- ----------------
Term Loan with an interest rate
of 6.46%, with repayment terms
through April 2015, secured by
the Company's facility located
at 150 John Hancock Road. $4,052,500 $4,106,400
Term Loan with an interest rate
of 6.46%, with repayment terms
through April 2007, secured by
certain equipment. 263,900 277,300
Term Loan with an interest rate
of 8.50%, with repayment terms
through October 2007, secured
by certain equipment. 371,100 386,700
---------- ----------
4,687,500 4,770,400
Less current portion 346,200 340,300
---------- ----------
Long term debt, net of current
portion $4,341,300 $4,430,100
========== ==========
Continued
9
WESTERBEKE CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
(Unaudited)
4. Property, Plant and Equipment
-----------------------------
January 25, 2003 October 26, 2002
---------------- ----------------
Land $ 921,500 $ 921,500
Building and building improvements 5,658,300 5,658,300
Furniture and fixtures 711,300 711,300
Machinery, patterns and equipment 5,116,900 5,092,000
Transportation equipment 80,400 80,400
Leasehold improvements 20,400 20,400
Equipment under capital lease 769,200 769,200
----------- -----------
13,278,000 13,253,100
Less accumulated depreciation 5,098,100 4,904,500
----------- -----------
$ 8,179,900 $ 8,348,600
=========== ===========
5. Split-Dollar Premiums
---------------------
As discussed in more detail in note 1, the Company has a split dollar life
insurance agreement with John H. Westerbeke, Jr., Chairman, President and
Chief Executive Officer of the Company. At January 25, 2003 the Company had
an unrealized accumulated loss of $847,000, net of taxes of $338,800,
included in accumulated other comprehensive income. Pursuant to the
requirements of the Sarbanes-Oxley Act of 2002, the Company has stopped
paying premiums in connection with such agreement.
6. Taxes on Income
---------------
Taxes (benefit) on income (loss) for the three-months ended January 25, 2003
includes a $108,500 credit received for research and development
expenditures. The credits relate to the years ended October 1999 and
October 2000. The Company took the position that income should not have
been recognized until the IRS approved such refund credits.
7. Major Customer
--------------
The Company had sales to one major customer, which represented 24% or
approximately $1,234,000 of total sales for the three-months ended January
26, 2002. Sales to this customer amounted to $3,000 for the three-months
ended January 25, 2003. On April 19, 2002, the Company announced that its
exclusive agreement with this customer would not be extended. The agreement
expired on June 30, 2002.
Continued
10
WESTERBEKE CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
(Unaudited)
8. Revolving Demand Note Payable
-----------------------------
The Company has a $6,000,000 Credit Agreement with Brown Brothers Harriman &
Co., collateralized by inventory, accounts receivable and general
intangibles. The actual amount available for borrowing is based on a
calculation of eligible accounts receivable and eligible inventory. Based
on this calculation, at January 25, 2003, the Company had approximately
$4,685,600 available for borrowing. As of January 25, 2003, the Company had
approximately $4,494,800 in unused borrowing capacity under the Credit
Agreement and approximately $151,100 committed to cover the Company's
reimbursement obligations under certain open letters of credit and bankers'
acceptances. The Agreement does not have an expiration date, but is payable
on written demand.
11
Item 2 - Management's Discussion and Analysis
- ---------------------------------------------
Of Financial Condition and Results Of Operations
- ------------------------------------------------
Forward Looking Information
- ---------------------------
This Quarterly Report on Form 10-Q contains forward-looking information
about the Company. In addition to the historical information contained
herein, the discussions contained in this document include statements that
constitute forward-looking statements under the Safe Harbor provisions of
the Private Securities Litigation Reform Act of 1995, including with respect
to the Company's expected cash flow from operations and borrowings under the
Credit Agreement, and its listing on NASDAQ. The Company is hereby setting
forth statements identifying important factors that may cause the Company's
actual results to differ materially from those set forth in any forward-
looking statements made by the Company. Some of the most significant
factors include: an unanticipated down-turn in the recreational boating
industry resulting in lower demand for the Company's products; the
unanticipated loss of, or decline in sales to, a major customer; the
inability to replace revenues and/or profits associated with the loss of the
exclusive agreement with its largest customer; the unanticipated loss of a
major supplier; the unanticipated required repayment in full of outstanding
amounts under the Company's demand credit facility; changes in laws and
regulations applicable to the Company; the impact of pending or threatened
litigation; the inability of the Company to effect required modifications of
its products to meet governmental regulations with respect to emission
standards; general economic and business conditions; financial market
volatility; and foreign currency fluctuations resulting in cost increases to
the Company for its foreign supplied components. Management believes these
forward-looking statements are reasonable. However, caution should be taken
not to place undue reliance on any such forward-looking statements since
such statements speak only as of the date when made. Accordingly, there can
be no assurances that any anticipated future results will be achieved and
the forward-looking statements contained herein should not be relied upon as
predictions of future results. Furthermore, the Company undertakes no
obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
Results of Operations
- ---------------------
Net sales decreased by $178,700, or 4%, during the first quarter of fiscal
2003 as compared to the same period in fiscal 2002. The decrease in net
sales was primarily from the loss of the Company's major customer
substantially offset by increases in net sales to others.
Gross profit decreased $8,100 or 1%, during the first quarter of fiscal 2003
as compared to the same period in fiscal 2002. As a percentage of net
sales, gross profit was 21% during the first quarter of fiscal year 2003 and
20% during the first quarter of fiscal 2002.
Operating expenses, which consist of selling, general and administrative
expenses as well as research and development expenses, decreased $29,500 for
the first quarter of fiscal 2003 as compared to the same period in fiscal
2002. The decrease in operating expenses was primarily from reduced labor
costs resulting from a reduction in personnel from the prior fiscal year.
Net interest expense decreased $43,100 during the first quarter of fiscal
2003 as compared to the same period in fiscal 2002. The reduction in
interest expense is related to lower levels of outstanding debt and reduced
borrowing costs.
During the first quarter ended January 25, 2003, the Company received and
recorded a credit to its tax provision amounting to $108,500 of research and
development credits from the U.S. Department of the Treasury.
12
WESTERBEKE CORPORATION AND SUBSIDIARY
For the first quarter ended January 25, 2003, the Company reported a net
loss of $177,500, as compared to a net loss of $328,700 for the same period
in fiscal 2002. The net loss for the quarter ended January 25, 2003 was
$286,000 prior to the recording of the research and development credits.
On April 19, 2002 the Company announced that its exclusive agreement with
its largest customer would not be extended. The agreement expired on June
30, 2002. The Company had anticipated the loss of this agreement and has
undertaken certain cost reduction programs.
Liquidity and Capital Resources
- -------------------------------
During the first three months of fiscal 2003, net cash used by operating
activities was $2,652,100, compared to net cash used by operations of
$401,400 for the first three months in fiscal 2002. The increase in cash
used by operating activities was primarily the result of increases in
inventory and accounts receivable and from the payment of income taxes. The
accrued income tax payments of $1,317,700 paid during the quarter ended
January 25, 2003, relate to the arbitration award previously discussed in
the Company's Annual Report on Form 10-K for the fiscal year ended October
26, 2002.
During the three months ended January 25, 2003, the Company purchased
machinery and equipment of $24,900. The Company plans additional capital
spending of $200,000 during the remainder of the fiscal year. On April 25,
2000, the Company purchased a 110,000 square foot facility located in
Taunton, Massachusetts. This facility has enabled the Company to
consolidate its operations into one location. The MassDevelopment Financing
Agency approved the Company for a $5,000,000 tax-exempt industrial revenue
bond, which has been financed by GE Capital Public Finance. The real estate
portion of the industrial revenue bond is a 15-year mortgage loan, with
$4,052,500 outstanding at January 25, 2003. The loan agreement requires
monthly payments of $40,000. The equipment portion of the industrial
revenue bond is a 7-year term loan, with $263,900 outstanding at January 25,
2003. The term loan requires monthly payments of $5,900. The Company also
has an additional 7-year equipment loan, with $371,100 outstanding at
January 25, 2003. This loan agreement requires a monthly payment of $7,900.
On June 26, 2000, the Company entered into a $5,000,000 Credit Agreement
with Brown Brothers Harriman & Co. collateralized by inventory, accounts
receivable and general intangibles. The Credit Agreement was increased on
September 25, 2000 to a maximum availability of $6,000,000. The actual
amount available for borrowing is based on a calculation of eligible
accounts receivable and eligible inventory. Based on this calculation at
January 25, 2003, the Company had approximately $4,494,800 available for
borrowing. At January 25, 2003, the Company had no outstanding borrowings
under the Credit Agreement and approximately $151,100 committed to cover the
Company's reimbursement obligations under certain letters of credit and
bankers' acceptances. The Credit Agreement does not have an expiration
date, but is payable on written demand.
Management believes cash flow from operations and borrowings available under
the Credit Agreement will provide for working capital needs, principal
payments on long-term debt, and capital and operating leases through fiscal
2003.
Domestic inflation is not expected to have a material impact on the
Company's operations.
13
WESTERBEKE CORPORATION AND SUBSIDIARY
The cost of engine blocks and other components is subject to foreign
currency fluctuations (primarily the Japanese yen). The value of the U.S.
dollar relative to the yen had no material effect on the cost of the
Company's products during the first three months of fiscal 2003.
14
Item 3 - Quantitative and Qualitative Disclosures About Market Risk
- -------------------------------------------------------------------
There are no material changes to the disclosure made in the Annual Report on
Form 10-K for the year ended October 26, 2002 regarding this matter.
Item 4 - Controls and Procedures
- --------------------------------
(a) Evaluation of disclosure controls and procedures. Based on their
evaluation, as of a date within 90 days prior to the date of the
filing of this Form 10-Q, of the effectiveness of the Company's
disclosure controls and procedures (as defined in Rules 13a-14(c) and
15d-14(c) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), the principal executive officer and the principal
financial officer of the Company have each concluded that such
disclosure controls and procedures are effective and sufficient to
ensure that information required to be disclosed by the Company in the
reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified
by the Securities and Exchange Commission's rules and forms.
(b) Changes in internal controls. Subsequent to the date of their
evaluation, there have not been any significant changes in the
Company's internal controls or in other factors that could
significantly affect these controls, including any corrective action
with regard to significant deficiencies and material weaknesses.
15
Part II. Other Information
Item 1 Legal Proceedings
None to report other than previously discussed in the
Company's Annual Report on Form 10-K for the fiscal year
ended October 26, 2002.
Item 2 Changes in Securities
None to report
Item 3 Default Upon Senior Securities
None to report
Item 4 Submissions of Matters to a Vote of Security Holders
None to report
Item 5 Other Information
(a) Split-Dollar Life Insurance Agreement
The Company has a split-dollar life insurance agreement with
John H. Westerbeke, Jr., Chairman, President and Chief
Executive Officer of the Company. Pursuant to the
requirements of the Sarbanes-Oxley Act of 2002, the Company
has stopped paying premiums in connection with such agreement.
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibits
See Exhibit Index
(b) Reports on Form 8-K
None to report
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 thereunto duly authorized.
WESTERBEKE CORPORATION
(Registrant)
Dated February 18, 2003 /s/ John H. Westerbeke, Jr.
----------------- --------------------------------
John H. Westerbeke, Jr.
Chairman of the Board,
President and Principal
Executive Officer
Dated February 18, 2003 /s/ Gregory Haidemenos
----------------- --------------------------------
Gregory Haidemenos
Principal Financial
and Accounting Officer
17
CERTIFICATIONS
I, John H. Westerbeke, Jr., Chairman of the Board, President and Chief
Executive Officer, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Westerbeke
Corporation.
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information 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 quarterly report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls;
and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.
Date: February 18, 2003
/s/ John H. Westerbeke, Jr.
--------------------------------
John H. Westerbeke, Jr.
Principal Executive Officer
18
I, Gregory Haidemenos, Chief Financial Officer and Treasurer, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Westerbeke
Corporation.
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information 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 quarterly report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls;
and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.
Date: February 18, 2003
/s/ Gregory Haidemenos
--------------------------------
Gregory Haidemenos
Principal Financial Officer
19
EXHIBIT INDEX
Exhibit Description
- ------- -----------
99.1 Certification of Chief Executive Officer pursuant to Section
906 of the Sarbanes-Oxley Act of 2002
99.2 Certification of Chief Financial Officer pursuant to Section
906 of the Sarbanes-Oxley Act of 2002
20