10-Q 1 irm16.txt FORM 10-Q UNITED STATES 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 period ended October 31, 2002 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 0-14812 EDISON CONTROL CORPORATION -------------------------- (Exact name of registrant as specified in its charter) New Jersey 22-2716367 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 777 Maritime Drive PO Box 308 Port Washington, WI 53074-0308 (Address of principal executive offices) (Zip Code) (262) 268-6800 (Registrant's telephone number, including area code) (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 required 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. Common Stock, $.01 par value: 1,689,728 as of October 31, 2002 -------------------------------------------------------------- EDISON CONTROL CORPORATION INDEX Form 10-Q Page Number ----------- Part I Financial Information ---------------------------- Item 1 Financial Statements Condensed Consolidated Balance Sheets Pages 2-3 October 31, 2002 and January 31, 2002 (Unaudited) Condensed Consolidated Statements of Income Page 4 and Comprehensive Income Three and nine months ended October 31, 2002 and 2001 (Unaudited) Condensed Consolidated Statements of Cash Flows Pages 5-6 Nine months ended October 31, 2002 and 2001 (Unaudited) Notes to Condensed Consolidated Financial Statements Pages 7-11 (Unaudited) Item 2 Management's Discussion and Analysis of Pages 11-13 Financial Condition and Results of Operations Item 3 Quantitative and Qualitative Disclosures Page 14 About Market Risk Item 4 Controls and Procedures Page 14 Part II Other Information ------------------------- Item 6 Exhibits and Reports on Form 8-K Pages 14-15 1 PART I. Item 1 Financial Statements -------------------- EDISON CONTROL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS October 31, 2002 and January 31, 2002 (Unaudited)

(Continued) See Accompanying Notes. 2 EDISON CONTROL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS October 31, 2002 and January 31, 2002 (Unaudited) (Continued)

See Accompanying Notes. 3 EDISON CONTROL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME THREE AND NINE MONTHS ENDED OCTOBER 31, 2002 AND 2001 (Unaudited)

See Accompanying Notes. 4 EDISON CONTROL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS NINE MONTHS ENDED OCTOBER 31, 2002 AND 2001 (Unaudited) 2002 2001 OPERATING ACTIVITIES: ---- ---- Net income $1,199,856 $2,241,119 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 757,762 914,163 Provision for doubtful accounts 207,606 164,830 Noncash compensation expense on stock options 77,500 0 Realized loss on sales of trading securities 0 169,919 Unrealized loss (gain) on trading securities 35,255 (25,545) Purchases of trading securities (1,778) 0 Proceeds from the sale of trading securities 0 236,526 Equity in earnings of affiliate 0 (77,414) Changes in assets and liabilities: Accounts receivable (509,802) (715,829) Receivable from affiliate 0 49,285 Inventories 322,655 262,680 Prepaid expenses and other assets 29,695 39,324 Trade accounts payable (180,555) (174,924) Accrued compensation (373,655) 18,264 Taxes other than income taxes (37,186) (6,753) Other accrued expenses 122,456 120,432 Deferred income taxes (45,000) 10,876 Income taxes payable (225,278) 110,938 --------- ------- Total adjustments 179,675 1,096,772 ------- --------- NET CASH PROVIDED BY OPERATING ACTIVITIES 1,379,531 3,337,891 --------- --------- INVESTING ACTIVITIES: Payments received from note receivable 0 164,155 Additions to plant and equipment (483,988) (163,946) Maturity of certificate of deposit 0 95,000 - ------ NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES (483,988) 95,209 --------- ------ (Continued) See Accompanying Notes. 5 EDISON CONTROL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS NINE MONTHS ENDED OCTOBER 31, 2002 AND 2001 (Unaudited) (Continued) 2002 2001 FINANCING ACTIVITIES: ---- ---- Proceeds from issuance of long-term debt $ 2,700,000 $ 0 Principal payments on long-term debt (2,957,100) (3,156,821) Purchases of treasury stock (810,194) 0 Stock options exercised 0 30,000 - ------ NET CASH USED IN FINANCING ACTIVITIES (1,067,294) (3,126,821) ----------- ----------- EFFECT OF EXCHANGE RATE CHANGES ON CASH 158,351 (37,190) ------- -------- NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (13,400) 269,089 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 472,352 305,337 ------- ------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 458,952 $ 574,426 ========== ============ Supplemental disclosure of cash flow information: Cash paid during the period for income taxes $1,053,254 $1,337,146 Cash paid during the period for interest 164,768 172,790 See Accompanying Notes. 6 EDISON CONTROL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) Note 1 - Basis of Presentation ------------------------------- The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal, recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three- and nine-month periods ended October 31, 2002 are not necessarily indicative of the results that may be expected for other interim periods or the fiscal year ended January 31, 2003. For further information, refer to the financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2002. Note 2 - Accounting Policies ---------------------------- Principles of Consolidation - The condensed consolidated financial statements include the accounts of Edison Control Corporation ("Edison") and subsidiaries, all of which subsidiaries are wholly owned by Edison (collectively, the "Company"). All material intercompany accounts and transactions have been eliminated in consolidation. Nature of Operations - The Company is currently comprised of the following operations. Construction Forms ("ConForms") is a leading manufacturer and distributor of systems of pipes, couplings, hoses and other equipment used for the pumping of concrete. ConForms manufactures a wide variety of finished products which are used to create appropriate configurations of systems for various concrete pumps. Ultra Tech manufactures abrasion resistant piping systems for use in industries such as mining, pulp and paper, power and waste treatment. South Houston Hose ("S.H.H.") is a distributor of industrial hose and fittings. Trading Securities - Debt and equity securities purchased and held principally for the purpose of sale in the near term are classified as "trading securities" and reported at fair value with unrealized gains and losses included in earnings. The cost of individual securities sold is based on the first-in, first-out method. Deferred compensation - Deferred compensation of $666,752 relating to stock options was reclassified from a current liability to additional paid-in capital during the quarter ended October 31, 2002. Translation of Foreign Currencies - Assets and liabilities of foreign operations are translated into United States dollars at current exchange rates. Income and expense accounts are translated into United States dollars at average rates for the periods and 7 capital accounts have been translated using historical rates. The resulting translation adjustments are recorded as other comprehensive income or loss. New Accounting Standards -In June 2001, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 141, "Business Combinations" and No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 eliminates the use of the pooling-of-interests method of accounting for business combinations and requires that all such transactions be accounted for by the purchase method. In addition SFAS No. 141 requires that intangible assets be recognized as assets apart from goodwill and that they meet specific criteria in the Standard. This standard is applicable to all business combinations initiated after June 30, 2001 and accordingly, the Company adopted this standard with the acquisition of South Houston Hose Company, Inc. ("South Houston Hose") and for all future business combinations. SFAS No. 142 is effective for the Company beginning February 1, 2002, and applies to goodwill and other intangible assets recognized in the Company's consolidated balance sheet as of that date, regardless of when those assets were initially recognized. SFAS No. 142 requires that upon adoption, amortization of goodwill will cease and instead, the carrying value of goodwill will be evaluated for impairment on an annual basis. Accordingly, the Company discontinued amortization of goodwill effective February 1, 2002. The Company completed the transitional impairment test during the quarter ended July 31, 2002 and determined that no impairment of goodwill exists. A reconciliation of previously reported net income and net income per share to the amounts adjusted for the exclusion of goodwill amortization follows: Three Months Ended Nine Months Ended October 31, October 31, ----------- ----------- 2002 2001 2002 2001 ---- ---- ---- ---- Reported net income $ 105,468 $ 823,946 $1,199,856 $ 2,241,119 Add goodwill amortization 0 98,463 0 216,693 --------- --------- ---------- ------------ Adjusted net income $ 105,468 $ 922,409 $1,199,856 $ 2,457,812 ========= ========= ========== =========== Net income per share-Basic: Reported net income $ .06 $ .35 $ .69 $ .95 Add goodwill amortization .00 .04 .00 .09 ----- ----- ----- ----- Adjusted net income $ .06 $ .39 $ .69 $1.04 ===== ===== ===== ===== Net income per share-Diluted: Reported net income $ .05 $ .30 $ .53 $ .81 Add goodwill amortization .00 .04 .00 .08 ----- ----- ----- ----- Adjusted net income $ .05 $ .34 $ .53 $ .89 ===== ===== ===== ===== In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," which addresses the financial accounting for and reporting of the impairment of long-lived assets and long-lived assets to be disposed of. This statement supersedes SFAS No. 121, among other items. The Company was 8 required to adopt SFAS No. 144 on February 1, 2002. The adoption of SFAS No. 144 had no impact on the Company's financial statements. In June 2002 the FASB issued SFAS No. 146, "Accounting for Exit or Disposal Activities". SFAS No. 146 addresses significant issues regarding the recognition, measurement, and reporting of costs that are associated with exit and disposal activities, including restructuring activities that are currently accounted for pursuant to the guidance that the Emerging Issues Task Force ("EITF") set forth in EITF Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)". The scope of SFAS No. 146 also includes (i) costs related to terminating a contract that is not a capital lease and (ii) termination benefits that employees who are involuntarily terminated receive under the terms of a one-time benefit arrangement that is not an ongoing benefit arrangement or an individual deferred-compensation contract. SFAS No. 146 is effective for exit or disposal activities that are initiated after December 31, 2002 with early adoption allowed. Net Income Per Share - Reconciliation of the numerator and denominator of the basic and diluted per share computations for the three and nine-month periods ended October 31, 2002 and 2001 are summarized as follows:

9 Note 3 - Acquisitions --------------------- On November 1, 2001 the Company purchased the remaining 50% of the outstanding common stock of South Houston Hose from the seller for $800,000, which consisted of a cash payment of $300,000 and a note payable in the principal amount of $500,000. Prior to November 1, 2001, the Company owned 50% of the outstanding common stock of South Houston Hose and accounted for the investment by the equity method. South Houston Hose is a distributor of industrial hose and fittings. The acquisition was accounted for as a purchase transaction with the purchase price allocated to the fair value of specific assets acquired and liabilities assumed. Accordingly, the results of operations have been included since the date of acquisition. Note 4 - Segment Information ---------------------------- The Company's operating segments are organized based on the nature of products and services provided. A description of the nature of the segment's operations and their accounting policies is contained in Note 2. Segment information for the three- and nine-month periods ended October 31, 2002 and 2001 follows: Three Months Ended October 31, 2002 2001 ---- ---- Net Operating Net Operating Sales Income (Loss) Sales Income (Loss)(1) ----- ------------- ----- ---------------- ConForms $ 5,435,552 $ 995,758 $ 5,433,977 $ 1,184,409 Ultra Tech 1,220,420 224,712 1,448,978 251,608 S.H.H. 633,938 9,526 0 0 Edison 0 (988,689) 0 (74,888) - --------- - -------- Total $ 7,289,910 $ 241,307 $ 6,882,955 $ 1,361,129 Nine Months Ended October 31, 2002 2001 ---- ---- Net Operating Net Operating Sales Income (Loss) Sales Income (Loss)(1) ----- ------------- ----- ---------------- ConForms $16,268,411 $3,138,683 $17,504,074 $3,753,350 Ultra Tech 3,286,263 404,376 3,170,164 474,660 S.H.H. 1,868,199 (46,917) 0 0 Edison 0 (1,305,650) 0 (302,551) - ----------- - --------- Total $21,422,873 $2,190,492 $20,674,238 $3,925,459 (1) All goodwill amortization for the three- and nine-month periods ended October 31, 2001 is included in ConForms' operating income. 10 Note 5 - Inventories -------------------- Inventories consisted of the following: October 31, January 31, 2002 2002 ---- ---- Raw Materials $ 3,565,431 $ 3,713,552 Work-in-process 1,268,167 1,412,263 Finished Goods 2,162,638 2,148,076 --------- --------- 6,996,236 7,273,891 Less-reserve to reduce carrying value to LIFO cost (68,000) (23,000) ------- ------------ Net inventories $ 6,928,236 $ 7,250,891 ============ ============ Note 6 - Employee Stock Option Plans ------------------------------------ In May 2002, the Company repurchased 25,000 common shares issued pursuant to a stock option exercise. The repurchase price was in excess of the market price at that time. As a result, the Company recorded compensation expense of $87,500 during the quarter ended July 31, 2002. In August 2002, the Company executed an agreement with the Company's former President and Chief Executive Officer to terminate an option agreement to purchase 200,000 shares of common stock at an exercise price of $4.00 per share. The Company paid $800,000 to the former officer to terminate this agreement and, accordingly, recorded this amount as compensation expense during the quarter ended October 31, 2002. In October 2002, the Company extended the term of an option agreement granted to a member of the Board of Directors from five years to seven years. As a result of this extension, the Company recorded compensation expense of $77,500 during the quarter ended October 31, 2002. Item 2. Management's Discussion and Analysis of Financial Condition and Results ----------------------------------------------------------------------- of Operations ------------- Forward Looking Statements -------------------------- Certain matters discussed in this Quarterly Report on Form 10-Q are "forward-looking statements" intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified as such because the context of the statement will include words such as the Company "believes", "anticipates", "expects", or words of similar import. Similarly, statements that describe the Company's future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties, including, but not limited to, new product advancements by competition, significant changes in industry technology, economic or political conditions in the countries in which the Company does business, the continued availability of sources of supply, the availability and consummation of favorable 11 acquisition opportunities, increasing competitive pressures on pricing and other contract terms, economic factors affecting the Company's customers and stock price variations affecting the Company's securities trading portfolio. These factors could cause actual results to differ materially from those anticipated as of the date of this report. Shareholders, potential investors and other readers are urged to consider these factors in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included herein are only made as of the date of this report and the Company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances. Results of Operations --------------------- Net sales for the three months ended October 31, 2002 increased $406,955 (5.9%) to $7,289,910 compared with net sales for the same period of the prior year. For the first nine months of this year, net sales increased $748,635 (3.6%) to $21,422,873 compared with net sales for the same period of the prior year. The acquisition of South Houston Hose on November 1, 2001 accounted for increased sales of $633,938 and $1,868,199 for the three and nine months ended October 31, 2002, respectively. Ultra Tech net sales decreased by $228,558 during the three months ended October 31, 2002 and increased $116,099 for the nine months ended October 31, 2002. Ultra Tech's sales volume will fluctuate based on its ability to attain project sales in the industries it serves. ConForms U.S. net sales decreased by approximately $100,000 and $1,300,000 during the three and nine months ended October 31, 2002, respectively. The economic slowdown has resulted in a soft concrete pumping accessories market as end users' business levels have decreased and other equipment manufacturers have seen a significant decrease in new equipment sales. This trend is expected to continue at least through late 2003. As a percentage of sales, gross profit margin for the three months ended October 31, 2002 was 35.0% compared to 37.9% for the three months ended October 31, 2001. Gross profit margin for the nine months ended October 31, 2002 decreased to 35.5% from 37.6% for the nine months ended October 31, 2001. The decrease for the nine months ended October 31, 2002 was due largely to lower margins for Ultra Tech due to a higher mix of lower margin project sales compared to the same period of the prior year and the inclusion of South Houston Hose sales which are typically lower margin than ConForms or Ultra Tech. Selling, engineering and administrative expenses for the three and nine-month periods ended October 31, 2002 increased by $1,156,567 (100.4%) to 2,308,367 and $1,778,046 (49.0%) to $5,406,977, respectively. This is due in part to the inclusion of approximately $230,000 and $730,000 of selling, engineering and administrative expenses for South Houston Hose for the three and nine months ended October 31, 2002, respectively, as well as approximately $880,000 and $965,000 of compensation expense relating to stock option activity in the three and nine-month periods ended October 31, 2002, respectively. The Company recorded tax expense of $769,121 for the nine months ended October 31, 2002, which represents the estimated annual effective rate of 39.1% applied to pre-tax income compared to an estimated annual effective tax rate of 39.4% applied to pre-tax income for the nine months ended October 31, 2001. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial statement reporting purposes and the amounts used for income tax purposes. 12 Net income of $105,468, or $.06 and $.05 per share, basic and diluted, respectively, for the three months ended October 31, 2002 was a decrease of $718,478 (87.2%), from net income of $823,946, or $.35 and .30 per share, basic and diluted, respectively, for the comparable period of the prior year. For the nine months ended October 31, 2002, net income decreased $1,041,263 (46.5.%) to $1,199,856, or $.69 and $.53 per basic and diluted share, respectively, compared to net income of $2,241,119, or $.95 and $.81 per basic and diluted share, respectively, in the comparable period of the prior year. The decrease in net income is due to lower ConForms' sales, lower margins on Ultra Tech sales and the inclusion of approximately $880,000 and $965,000 of compensation expense relating to stock option activity in the three and nine-month periods ended October 31, 2002, respectively. Liquidity and Capital Resources ------------------------------- The Company generated $1,379,531 in cash from operations during the first nine months of 2002, compared to cash flow generated by operations of $3,337,891 for the same period last year. This is due largely to a decrease in the net income combined with a decrease in the change in accrued compensation of $391,919 and a decrease in the change in income taxes payable of $336,216. The Company used $483,988 in cash to acquire capital equipment, $810,194 to repurchase its common stock and $257,100 to reduce long-term debt during the nine months ended October 31, 2002. The result was a net decrease in cash and cash equivalents of $13,400 for the nine months ended October 31, 2002 compared to a net increase of $269,089 for the same period of the prior year. The Company believes that it can fund proposed capital expenditures and operational requirements from operations and currently available cash and cash equivalents, investments, trading securities and existing bank credit lines. Proposed capital expenditures for the fiscal year ending January 31, 2003 are expected to total approximately $600,000, compared to $478,872 for the fiscal year ended January 31, 2002. The Company had $3,000,000 outstanding and $3,000,000 available on its master credit agreement as of October 31, 2002. The Company intends to continue to expand its businesses, both internally and through potential acquisitions. The Company currently anticipates that any potential acquisitions would be financed primarily by internally generated funds or additional borrowings or the issuance of the Company's stock. Accounting Policies and Estimates --------------------------------- The preparation of the Company's financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates, assumptions and judgments that affect amounts of assets and liabilities reported in the consolidated financial statements, the disclosure of contingent assets and liabilities as of the date of the financial statements and reported amounts or revenues and expenses during the year. The Company believes its estimates and assumptions are reasonable; however, future results could differ from those estimates under different assumptions or conditions. A discussion of certain accounting policies and estimates deemed to be critical to an understanding of the Company's financial condition and results of operations is contained in the Company's annual report on Form 10-K for the fiscal year ended January 31, 2002. 13 Item 3. Quantitative and Qualitative Disclosures About Market Risk ---------------------------------------------------------- The Company is exposed to interest rate risk, foreign currency risk and equity price risk. These risks include changes in U.S interest rates, changes in foreign currency exchange rates as measured against the U.S. dollar and changes in the prices of stocks traded on the U.S. markets. Interest Rate Risk ------------------ The Company's revolving credit borrowings and variable rate term loans, which totaled $5,200,000 as of October 31, 2002, are subject to interest rate risk. Most of the borrowings float at either the prime rate or LIBOR plus a certain amount of basis points. Based on the October 31, 2002 balance, an increase of one percent in the interest rate on the Company's loans would cause an increase in interest expense of approximately $52,000, or $.01 per diluted share, net of taxes, on an annual basis. The Company currently does not use derivatives to fix variable rate interest obligations. Foreign Currency Risk --------------------- The Company has foreign operations in the United Kingdom and Malaysia. Sales and purchases are typically denominated in the British pound, Malaysian ringgit, German mark, Singapore dollar, the Euro or the U.S. dollar, thereby creating exposures to changes in exchange rates. The changes in exchange rates may positively or negatively affect the Company's sales, gross margins and retained earnings. The Company does not enter into foreign exchange contracts but attempts to minimize currency exposure risk through working capital management. There can be no assurance that such an approach will be successful, especially in the event of a significant and sudden decline in the value of a currency. Item 4. Controls and Procedures ----------------------- The Chief Executive Officer and the Chief Financial Officer of the Company (its principal executive officer and principal financial officer, respectively) have concluded, based on their evaluation as of a date within 90 days prior to the date of the filing of this Report, that the Company's disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports filed or submitted by it 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, and includes controls and procedures designed to ensure that information required to be disclosed by the Company in such reports is accumulated and communicated to the Company's management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. There were no significant changes in the Company's internal controls or in other factors that could significantly affect these controls subsequent to the date of such evaluation. PART II. Item 6. Exhibits -------- There are no exhibits filed or incorporated by reference herein. 14 Reports on Form 8-K ------------------- The Company filed no reports on Form 8-K during the quarter to which the report relates. 15 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. EDISON CONTROL CORPORATION -------------------------- (Registrant) Date: December 10, 2002 /s/ Jay R. Hanamann ------------------------ Jay R. Hanamann (Chief Financial Officer) 16 CERTIFICATION Each of the undersigned hereby certifies in his capacity as an officer of Edison Control Corporation (the "Company") that the Quarterly Report on Form 10-Q of the Company for the period ended October 31, 2002 (the "Report") fully complies with the requirements of Section 13 (a) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition of the Company at the end of such period and the results of operations of the Company for such period. EDISON CONTROL CORPORATION -------------------------- (Registrant) Date: December 10, 2002 /s/ Alan J. Kastelic ------------------------ Alan J. Kastelic (President and Chief Executive Officer) Date: December 10, 2002 /s/ Jay R. Hanamann ----------------------- Jay R. Hanamann (Chief Financial Officer) 17 CERTIFICATIONS UNDER SECTION 302 OF THE SARBANES-OXLEY ACT I, Alan J. Kastelic, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Edison Control 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 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; and 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 Edison Control Corporation as of, and for, the periods presented in this quarterly report. 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for Edison Control Corporation 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 officer 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 officer 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. December 10, 2002 /s/ Alan J. Kastelic -------------------- Alan J. Kastelic President and Chief Executive Officer 18 I, Jay R. Hanamann, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Edison Control 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 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; and 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 Edison Control Corporation as of, and for, the periods presented in this quarterly report. 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for Edison Control Corporation 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 officer 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 officer 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. December 10, 2002 /s/ Jay R. Hanamann ------------------- Jay R. Hanamann Chief Financial Officer 19 Edison Control Corporation Exhibit Index ------------- Exhibit No. Description ----------- ----------- None 20

EDISON CONTROLS CORP 10-Q