10-Q 1 b44552wge10vq.txt FORM 10-Q DATED 09/30/02 UNITED STATES SECURITIES AND EXCHANGE COMMISSION FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended SEPTEMBER 30, 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: 0-1590 ------ THE WESTWOOD GROUP, INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) DELAWARE 04-1983910 ------------------------------- -------------------------------- (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization) 190 V.F.W. PARKWAY, REVERE, MASSACHUSETTS 02151 --------------------------------------------------- (Address of principal executive offices) (Zip Code) 781-284-2600 ---------------------------------------------------- (Registrant's telephone number, including area code) NOT APPLICABLE ------------------------------------------ (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (l) 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 [ ] As of November 1, 2002, 351,210 shares of the Registrant's common stock, par value $.01 per share, and 912,015 shares of the Registrant's Class B common stock, par value $.01 per share, were outstanding PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS THE WESTWOOD GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

The accompanying notes are an integral part of these consolidated financial statements. THE WESTWOOD GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

The accompanying notes are an integral part of these consolidated financial statements. THE WESTWOOD GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS

The accompanying notes are an integral part of these consolidated financial statements. THE WESTWOOD GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS

The accompanying notes are an integral part of these consolidated financial statements. THE WESTWOOD GROUP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

The accompanying notes are an integral part of these consolidated financial statements. THE WESTWOOD GROUP, INC. AND SUBSIDIARIES SEPTEMBER 30, 2002 (Unaudited) 1. BASIS OF PRESENTATION INTERIM RESULTS In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair statement of results of operations for the interim periods presented. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Operating results for interim periods are not necessarily indicative of results that may be expected for an entire fiscal year. Accordingly, these interim consolidated financial statements should be read in conjunction with the consolidated financial statements contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2001. PRINCIPLES OF CONSOLIDATION The accompanying consolidated financial statements as of September 30, 2002 and December 31, 2001 and for the three and nine month periods ended September 30, 2002 and 2001 include the accounts of the Company and its wholly-owned subsidiaries. All material inter-company accounts and transactions have been eliminated in consolidation. INCOME (LOSS) PER COMMON SHARE The Company follows Statement of Financial Accounting Standards (SFAS) No. 128, Earnings per Share, issued by the Financial Accounting Standards Board. Under SFAS No. 128, the basic and diluted net income (loss) per share of common stock is computed by dividing the net income (loss) by the weighted average number of common shares outstanding during the period, including potentially dilutive stock options. Stock options were not considered in 2002 since the Company had a net loss and their effect would be antidilutive. The Company's stock options did not have a dilutive effect in 2001 since the option prices per share were deemed to be equal to or higher than the estimated average per share market price of the Company's common stock. The amount of potentially dilutive common shares issuable under the Company's stock options, if any, are determined based on the treasury stock method. 2. DEBT Long-term debt consisted of the following:

The maximum borrowings under the Boston Federal Savings Bank loan are $6.5 million which includes $500,000 to be used in the going private transaction and $600,000 for corporate purposes. The Loan, Reimbursement, and Security Agreement, dated as of September 3, 2002, by and between Wonderland Greyhound Park Realty, LLC and Boston Federal Savings Bank, contains certain restrictive covenants including the maintenance of certain financial ratios and debt coverage requirements. The note is collateralized by a mortgage and security interest in all real estate and personal property at Wonderland Greyhound Park. The proceeds from the new Boston Federal Savings Bank loan were used to pay off the Century Bank and Trust Company loan. THE WESTWOOD GROUP, INC. AND SUBSIDIARIES SEPTEMBER 30, 2002 (Unaudited) ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL During 2001, the Company and the owners of other area racetracks worked to enact legislation which would permit the Company and the other greyhound track to continue to provide simulcast broadcasting of thoroughbred racing on a more frequent basis, as well as providing for a decrease in the pari-mutuel taxes paid to the Commonwealth and that the funds available from the pari-mutuel tax decrease be made available for increases in purses and the Greyhound Capital Improvement and Promotional Trust Funds as well as the establishment of a Greyhound Adoption Fund and the implementation of an off-track betting system. On November 17, 2001, the "Act Providing for Improvements to the Horse and Greyhound Racing Industry in the Commonwealth and the Regulation Thereof" was signed into law by the acting governor of Massachusetts. Under this new statute, the Company and the other area racetracks are permitted to continue to provide simulcast broadcasting of thoroughbred racing to their patrons until December 2005. This legislation also provides that the Company is to pay premiums for the right to simulcast interstate thoroughbred and harness racing ranging from 3% to 7% for the benefit of the purse accounts at the Commonwealth's two commercial horse racetracks. In addition, to the extension and expansion of simulcast broadcasting, this statute provides for a "purse pool," which will be funded by taxes, fees and assessments with a minimum of $400,000 being credited to the purse accounts of each racetrack with any remaining portion being apportioned among the racetracks pursuant to a formula to be devised by the State Racing Commission. All unclaimed simulcast wagers collected at each racetrack are to be deposited with the Massachusetts State Racing Commission for payment to the purse account of the individual racetracks responsible for such unclaimed wagers. The Westwood Group also received a one-time grant of $300,035 during 2000 from the Commonwealth for the purpose of funding capital improvements and repairs to its facility and equipment. Finally, the new statute authorizes account wagering at each of the individual racetracks and establishes a nine member special commission to study the feasibility of an off-track betting program in Massachusetts. Despite the enactment of this legislation and the initial potential for an increase in cash flow from such legislation, management does not believe that this new legislation has materially benefited the Company's overall racing operations since November 2001. Management has worked diligently over the past decade in attempting to convince the Governor and the Massachusetts state legislature of the need to allow the Commonwealth's commercial recetracks to offer their patrons expanded gaming opportunities. The Massachusetts state legislature took no action on gaming in the years 2000 and 2001, and no gaming legislation is anticipated in 2002. On October 3, 2002, the Governor of Massachusetts issued an executive order establishing a commission to study the potential expansion of legalized gaming in Massachusetts. This commission is to report its findings to the Governor by no later than December 31, 2002. The Westwood Group cannot predict the final recommendations of this commission and/or whether legislation expanding legalized gaming will ever be enacted or if enacted, will be on favorable terms. On October 25, 2002, the Company filed a preliminary proxy statement and an accompanying Schedule 13E-3 with the Securities and Exchange Commission in order to effectuate a 1,500 for 1 reverse stock split of its capital stock. If the proposed reverse stock split is approved by a majority of the Company's stockholders, then holders of less than 1,500 shares immediately prior to such meeting will be cashed out at a per share purchase price equal to $4.00, thereby reducing the number of its stockholders to under 300 and, consequently, allowing the Company to change its status from a public to a private company and to relieve the Company of the administrative burden and cost and competitive disadvantages associated with filing reports and otherwise complying with the requirements of registration under the federal securities laws and to permit small stockholders to receive a fair price for their shares without having to pay brokerage commission. The reverse stock split will (i) cause the Westwood Group to redeem shares held by approximately 400 holders of record of Common Stock, (ii) not eliminate record holders who hold 1,500 or more shares of Common Stock and Class B Common Stock, (iii) reduce the number of shares, on a pro-rata basis, held by the holders of record who hold 1,500 or more shares of Common Stock and Class B Common Stock, and (iv) change the percent of Common Stock held by the remaining stockholders to 100%. Assuming the completion of the reverse stock split and change in its status from a public to a private company, the Company will promptly thereafter initiate a tender offer for additional shares of its capital stock in order to provide those stockholders who did not receive a cash payment in connection with the proposed reverse stock split the opportunity to tender one share in return for $6,000, which amount reflects the highest payment to be received by any stockholder as a result of the consummation of the proposed reverse stock split. 3 THE WESTWOOD GROUP, INC. AND SUBSIDIARIES SEPTEMBER 30, 2002 (Unaudited) Wonderland currently conducts live racing six nights per week. Wonderland also offers simulcast wagering afternoons and evenings throughout the year. The table below illustrates certain key statistics for Wonderland Park, the Company's greyhound racing operation, for the three months ended September 30, 2002 and 2001. 2002 2001 ------------------------------------- Performances 84 88 Simulcast days 92 92 Pari-mutuel handle (thousands) Live-on track $4,228 $5,610 Live-simulcast 7,256 8,724 Guest-simulcast 12,237 11,703 ------------------------------------- $23,721 $26,037 ------------------------------------- Total attendance 67,489 76,762 Average per capita on site wagering $244 $226 OPERATING REVENUE Total operating revenue declined by $428,000 to $3.82 million in the quarter ended September 30, 2002 as compared to the quarter ended September 30, 2001. Parimutuel commissions declined by 10% from $3.40 million to $3.07 million during the same period. Total handle in the third quarter of 2002 was approximately $23.7 million as compared to $26.0 million in 2001, a decline of 9%. Live-on track handle decreased 24.6% or about $1.38 million for the same period from $5.61 million to $4.23 million in the third quarter of 2002, with an average daily attendance of approximately 803 persons in the third quarter of such periods compared to 872 persons in the third quarter of 2001. Live-simulcast handle decreased by $1.47 million or 16.8% in the third quarter of 2002 compared to the third quarter of 2001. However, guest-simulcast handle increased by $534,000 or 4.6% from the 2001 amount. Net admissions revenue decreased by 15.3%. Most of this decrease is associated with decreased attendance, and the remainder with increased promotional discounts. Other operating revenue consists of food and beverage, program sales, lottery, parking and gift shop sales and was approximately $702,000 for the three months ended September 30, 2002 decreasing by approximately $88,000 from approximately $790,000 for the three months ended September 30, 2001. Parimutuel commissions for the three months ended September 30, 2002 included approximately $38,000 deposited into the Greyhound Capital Improvements Trust Fund, $51,000 into the Greyhound Adoption Fund, and $50,000 into the Greyhound Promotional Trust Fund. During same period of 2001 such amounts were $57,000, $0, and $57,000 respectively. OPERATING EXPENSES Operating expenses of approximately $4.02 million for the three months ended September 30, 2002 decreased by approximately $58,000 from approximately $4.08 million for the three months ended September 30, 2001. The decrease is mainly the result of the decline in purse expense related to handle decline. A decline in food and beverage costs of approximately $49,000 is the result of admission declines during the third quarter. 4 THE WESTWOOD GROUP, INC. AND SUBSIDIARIES SEPTEMBER 30, 2002 (Unaudited) INTEREST EXPENSE Interest expense decreased by approximately $15,000 for the three months ended September 30, 2002 from $92,000 in the three months ended September 30, 2001 to approximately $77,000 in the three months ended September 30, 2002. This decrease is the result more favorable financing terms and the discharge of certain liabilities resulting from the loan refinancing transaction. DEPRECIATION AND AMORTIZATION Depreciation and amortization increased approximately $77,000 to $178,000 in the three months ended September 30, 2002, from approximately $101,000 in the comparable period in 2001. The increase was the result of increased investment in the track facility during this period, writeoff of deferrred financing fees related to the Century Bank debt and amortization of new deferred finance costs. INCOME TAX PROVISION The Company's provision for income taxes was less than the statutory federal tax rate of 34% during the first nine months of 2002 and 2001 primarily due to the net loss in 2002 and the utilization of available net operating loss carryforwards in 2001. The provision for taxes of $1,035 and $19,100 in the three months ended September 30, 2002 and 2001, respectively, represents state taxes. The table below illustrates certain key statistics for Wonderland Greyhound Park, the Company's greyhound racing operation, for the nine months ended September 30, 2002 and 2001. 2002 2001 ------------------------------------- Performances 251 259 Simulcast days 273 272 Pari-mutuel handle (thousands) Live-on track $12,946 $16,427 Live-simulcast 23,606 26,360 Guest-simulcast 37,548 37,467 ------------------------------------- $74,100 $80,254 ------------------------------------- Total attendance 203,339 224,203 Average per capita on site wagering $248 $240 OPERATING REVENUE Total operating revenue declined by approximately $849,000 to $12.1 million in the nine months ended September 30, 2002 as compared to $12.9 million for the nine months ended September 30, 2001. Parimutuel commissions declined by 6.5% from $10.5 million to $9.8 million during the same period. Total handle in the first nine months of 2002 was approximately $74.1 million as compared to $80.2 million for such period in 2001, a decline of 8%. Live-on track handle decreased 21.2% or about $3.5 million from $16.4 million in the first nine months of 2001 to $12.9 million for such period in 2002, with an average attendance of approximately 810 persons for such period in 2002 compared to 866 persons for such period in 2001. Live-simulcast handle decreased by $2.8 million or 10.4% in the first nine months of 2002. Guest-simulcast handle increased by $81,000 or 0.2% from the first nine months of 2001. THE WESTWOOD GROUP, INC. AND SUBSIDIARIES SEPTEMBER 30, 2002 (Unaudited) Net admissions revenue decreased by 15.3%. Other operating revenue consists of food and beverage, program sales, lottery, parking and gift shop sales was approximately $2.1 million for the nine months ended September 30, 2002 decreasing by approximately $140,000 or 6% from approximately $2.3 million for the nine months ended September 30, 2001. Parimutuel commissions for the nine months ended September 30, 2002 included approximately $106,000 deposited into the Greyhound Capital Improvements Trust Fund, $94,000 into the Greyhound Adoption Fund and $151,000 into the Greyhound Promotional Trust Fund. During same period of 2001 such amounts were $176,000, $0, and $176,000 respectively. OPERATING EXPENSES Operating expenses of approximately $11.9 million for the nine months ended September 30, 2002 decreased by approximately $713,000 from approximately $12.6 million for the nine months ended September 30, 2001. The decrease is the result of cost savings in payroll and operations of approximately $500,000 as well as decreased purses due to handle declines of approximately $6 million. INTEREST EXPENSE Interest expense decreased by approximately $80,000 for the nine months ended September 30, 2002 from $384,000 in the nine months ended September 30, 2001 to approximately $304,000 in the nine months ended September 30, 2002. LIQUIDITY AND CAPITAL RESOURCES At September 30, 2002, the Company had a working capital deficit of approximately $414,000, and a stockholders' deficit of approximately $620,000. Historically, the Company's primary sources of capital to finance its businesses have been its cash flow from operations and credit facilities. The Company's capital needs are primarily for maintenance and enhancement of the racing facility at Wonderland, and for debt service requirements. The Company's cash and cash equivalents totaled approximately $183,000 at September 30, 2002, compared with $12,000 at December 31, 2001. The Company generated a cash deficit from operations of approximately $295,000 during the first nine months of 2002 as compared to a deficit of $33,000 during the corresponding period in 2001. Non-cash items included in the Company's net loss in the first nine months of 2002 consist of depreciation and amortization expense of $467,000. Changes in working capital accounts including restricted cash, accounts payable and other accrued liabilities used approximately $547,000 of cash in the first nine months of 2002. Net cash used in investing activities in 2002 of approximately $555,000 represents additions to property, plant and equipment. On September 3, 2002, Wonderland Greyhound Park Realty, LLC, a subsidiary of the Company, entered into a $6,500,000 Loan, Reimbursement and Security Agreement with Boston Federal Savings Bank. This loan is collateralized by a mortgage on all real and personal property located at Wonderland Greyhound Park. A portion of the proceeds from this loan transaction was used to refinance the Company's then existing credit facility with Century Bank and Trust Company. The Company is the guarantor of the loan from Boston Federal Savings Bank. Financing activities in 2002 generated approximately $1.0 million of cash in the course of the refinancing of the Company's long term debt. The Company is currently undertaking a capital improvements program to improve its track and patron facilities. It is anticipated that these expenditures will be fully funded by the Capital Improvement Trust fund and a grant program contained in the racing legislation enacted in November 2001. The Company received a short-term working capital advance from Charles F. Sarkis, an officer of the Company, of $300,000 in March 2002. This funding accrued interest at a rate of 12% and was repaid with a portion of the proceeds received in connection with the loan transaction with Boston Federal Savings Bank. 7 THE WESTWOOD GROUP, INC. AND SUBSIDIARIES SEPTEMBER 30, 2002 (Unaudited) The Company believes that it will generate enough cash from operations to satisfy its anticipated obligations during 2003. CRITICAL ACCOUNTING POLICIES In accordance with the U.S. Securities and Exchange Commission Release Nos. 33-8040, 34-45149 and R-60, the Company's Critical Accounting Policies are as follows: USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Estimates that could impact on the Company's results of operations include those relating to contractual obligations and other accrued expenses. Actual results could differ from those estimates. ESCROWED CASH Escrowed cash is related to the operations of Wonderland and includes amounts held by The Commonwealth of Massachusetts in trust funds (for capital improvements and advertising/promotion). Wonderland funds these costs and requests reimbursements from the trust funds. Wonderland is reimbursed upon approval by the Commonwealth. REVENUE RECOGNITION The Company's annual revenues are mainly derived from the net commission that it receives from wagers made by patrons during its live-on track racing performances, live and guest-simulcast racing performances and from admission and concession charges at such performances. Inter-track receivables and payables are dependent on the accuracy of an independent totalistar vendor. This vendor's system has been independently reviewed and deemed reliable. FORWARD-LOOKING STATEMENTS Certain statements contained throughout this quarterly report constitute "forward-looking statements" as that term is defined under the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from those contemplated or projected, forecasted, estimated or budgeted in or expressed or implied by such foward-looking statements. Such factors include, among others, the following: general economic and business conditions; industry trends, changes in business strategy or development plans; availability and quality of management; and availability, terms and employment of capital. SPECIAL ATTENTION SHOULD BE PAID TO SUCH FORWARD-LOOKING STATEMENTS INCLUDING, BUT NOT LIMITED TO, STATEMENTS RELATING TO (I) THE COMPANY'S ABILITY TO EXECUTE ITS BUSINESS STRATEGY, (II) THE COMPANY'S ABILITY TO OBTAIN SUFFICIENT RESOURCES TO FINANCE ITS WORKING CAPITAL AND CAPITAL EXPENDITURES NEEDS AND PROVIDE FOR ITS OBLIGATIONS, AND (III) THE STATEMENTS CONTAINED IN THIS ITEM. THE WESTWOOD GROUP, INC. AND SUBSIDIARIES SEPTEMBER 30, 2002 (Unaudited) ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company has no material exposure to market risk that could affect its future results of operations and financial condition. Risks and uncertainties, including those not presently known to us or that we currently deem immaterial, may impair our business. The Company does not use derivative products and does not have any material monetary assets. (See Item 2, "Liquidity and Capital Resources"). The preceding discussion of the financial condition and results of operations of the Company should be read in conjunction with the interim consolidated financial statements and the notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q and the consolidated financial statements and notes thereto contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2001. ITEM 4. CONTROLS AND PROCEDURES Within the 90 days prior to the date of this Form 10-Q, the Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer (its principal executive officer and principal financial officer), of the effectiveness of the design and operation of the Company's disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon that evaluation, the Company's Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective in timely alerting them to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Company's periodic SEC filings. There have been no significant changes in the Company's internal controls or in other factors, which could significantly affect internal controls subsequent to the date the Company carried out its evaluation. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS None. ITEM 2. CHANGES IN SECURITIES None. ITEM 3. DEFAULTS UPON SENIOR SECURITIES None ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None ITEM 5. OTHER INFORMATION None ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibit ------------- --------------------------------------------------- Exhibit Number Description ------------- --------------------------------------------------- (99.1) Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes- Oxley Act of 2002. ------------- --------------------------------------------------- (b) Reports on Form 8-K None 7 SIGNATURE Pursuant to the requirement 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. THE WESTWOOD GROUP, INC. Date November 14, 2002 /s/ Richard P. Dalton ------------------------------------------- Richard P. Dalton President, Chief Executive Officer and Director (Principal Financial and Accounting Officer) CERTIFICATIONS I, Richard P. Dalton, certify that: 1. I have reviewed this quarterly report on Form 10-Q of The Westwood Group Inc.; 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; 4. The registrant 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 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 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: November 14, 2002 /s/ Richard P. Dalton ----------------------------- Chief Executive Officer (Principal Executive Officer and Principal Financial Officer) 8

WESTWOOD GROUP INC 10-Q