-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KNmZkmzRaWO9VaGSk16DrvRpjqxPGO2LY86+ttalmPe2tTmgbRK6MsG2y/CpzuWf hvIWfnXiIwFog0SqbfBNHg== 0000910647-03-000074.txt : 20030219 0000910647-03-000074.hdr.sgml : 20030219 20030219121611 ACCESSION NUMBER: 0000910647-03-000074 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030125 FILED AS OF DATE: 20030219 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WESTERBEKE CORP CENTRAL INDEX KEY: 0000796502 STANDARD INDUSTRIAL CLASSIFICATION: MOTORS & GENERATORS [3621] IRS NUMBER: 041925880 STATE OF INCORPORATION: DE FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-15046 FILM NUMBER: 03572073 BUSINESS ADDRESS: STREET 1: AVON INDUSTRIAL PARK STREET 2: 41 LEDIN DRIVE CITY: AVON STATE: MA ZIP: 02322 BUSINESS PHONE: 5085887700 MAIL ADDRESS: STREET 1: AVON INDUSTRIAL PARK CITY: AVON STATE: MA ZIP: 02322 10-Q 1 west-q3.txt FORM 10-Q FOR JANUARY 25, 2003 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 EX-99 3 west3-991.txt EXHIBIT 99.1 Exhibit 99.2 CERTIFICATION PURSUANT TO 18 U.S.C SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Westerbeke Corporation (the "Company") on Form 10-Q for the period ended January 25, 2003, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Gregory Haidemenos, Chief Financial Officer and Treasurer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge: 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. By: /s/ Gregory Haidemenos ---------------------------- Gregory Haidemenos Chief Financial Officer and Treasurer February 18, 2003 EX-99 4 west3-992.txt EXHIBIT 99.2 Exhibit 99.1 CERTIFICATION PURSUANT TO 18 U.S.C SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Westerbeke Corporation (the "Company") on Form 10-Q for the period ended January 25, 2003, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, John H. Westerbeke, Jr., Chairman of the Board, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge: 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. By: /s/ John H. Westerbeke, Jr. ---------------------------- John H. Westerbeke, Jr. Chairman of the Board, President and Chief Executive Officer February 18, 2003 -----END PRIVACY-ENHANCED MESSAGE-----