UNITED STATES ~~SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549~~

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)
ý	~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 25, 2002
		For the quarterly period ended April 25, 2003
OR
o	~~TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~	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 0-14429

For the transition period from to to

Commission file number 0-14429

Isco, Inc.

(Exact name of registrant as specified in its charter)

Nebraska (State of Incorporation)		47-0461807 (I.R.S. Employer Identification No)
Nebraska		47-0461807
4700 Superior Street, Lincoln, Nebraska (Address of principal executive offices)		68504-1398 (Zip Code)
(State of Incorporation)		(I.R.S. Employer Identification No)
4700 Superior Street, Lincoln, Nebraska		68504-1398
(Address of principal executive offices)		(Zip Code)
(402) 464-0231
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (~~402~~1) ~~464-0231~~has filed all reports required to be filed by Sections 13 or 15(~~Registrant's~~d) ~~telephone~~of ~~number,~~the ~~including~~Securities ~~area~~Exchange ~~code~~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.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 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 ý No o

Indicate ~~the~~ ~~number~~by ofcheck ~~shares~~mark whether ~~outstanding~~the ofregistrant ~~each~~is ofan ~~the~~accelerated ~~issuer's~~filer ~~classes~~(as ofdefined ~~common~~in ~~stock~~Rule as12b-1 of ~~November 29,~~the Exchange ~~2002~~Act). Yes o No ý

~~Common~~Indicate the ~~Stock,~~number ~~$0.10~~of ~~par~~shares ~~value~~outstanding ~~Class~~of ~~5,676,971~~each ~~Number~~of the issuer’s classes of ~~Shares~~common stock as of May 23, 2003.

ISCO, INC. AND SUBSIDIARIES TABLE OF CONTENTS

Common Stock, $0.10 par value		5,724,338
Class		Number of Shares

			Page Number
PART I. FINANCIAL INFORMATION
	Item 1.	Financial Statements
		Condensed Consolidated Statements of Operations	3
		Condensed Consolidated Balance Sheets	4
		Condensed Consolidated Statements of Cash Flows	5
		Notes to Condensed Consolidated Financial Statements	6
	Item 2.	Management's Discussion and Analysis	9
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	13
	Item 4.	Controls and Procedures	13
PART II. OTHER INFORMATION
	Item 3.	Legal Proceedings	15
	Item 6.	Exhibits and Reports on Form 8-K	15
SIGNATURES			16
CERTIFICATIONS			17

ISCO, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

	Item 1.	Financial Statements

		Condensed Consolidated Statements of Operations

		Condensed Consolidated Balance Sheets

		Condensed Consolidated Statements of Cash Flows

		Notes to Condensed Consolidated Financial Statements

	Item 2.	Management’s Discussion and Analysis

	Item 3.	Quantitative and Qualitative Disclosures about Market Risk

	Item 4.	Controls and Procedures

PART II. OTHER INFORMATION

	Item 3.	Legal Proceedings

	Item 6.	Exhibits and Reports on Form 8-K

SIGNATURES

CERTIFICATIONS

ISCO, INC. AND SUBSIDIARIES ~~CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)~~

		Three months ended
		Oct 25 2002			Oct 26 2001
		(Amounts in thousands, except per share data)
Net sales		$	15,494		$	15,426
Cost of sales			6,945			7,187
			8,549			8,239
Operating expenses:
	Selling, general, & administrative		6,403			5,381
	Research and engineering		1,665			1,376
			8,068			6,757
Income from operations			481			1,482
Other income (expense):
	Investment income		169			179
	Interest expense		(59	)		(78	)
	Other, net		53			(63	)
			163			38
Income before income taxes			644			1,520
Provision for income taxes			213			490
Net income		$	431		$	1,030
Basic earnings per share		$	0.08		$	0.18
Diluted earnings per share		$	0.07		$	0.18
Dividends declared per share		$	0.06		$	—
Weighted average number of shares outstanding-basic			5,673			5,656
Additional shares assuming exercise of common stock equivalents and dilutive stock options			253			185
Weighted average number of shares outstanding-diluted			5,926			5,841

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Amounts in thousands, except per share data)

	Three months ended						Nine months ended
	Apr 25 2003			Apr 26 2002			Apr 25 2003			Apr 26 2002

Net sales	$	15,057		$	14,139		$	44,813		$	44,105
Cost of sales	7,358			6,865			21,048			21,272
	7,699			7,274			23,765			22,833
Operating expenses:
Selling, general and administrative (Note 8)	5,975			5,568			18,512			16,472
Research and engineering	1,602			1,460			4,837			4,073
	7,577			7,028			23,349			20,545

Income from operations	122			246			416			2,288

Other income (expense):
Investment income	108			171			440			524
Interest expense	(52		)	(65		)	(179		)	(215		)
Other, net	50			158			136			79
	106			264			397			388

Income before income taxes	228			510			813			2,676

Provision for income taxes	6			203			170			978

Net income	$	222		$	307		$	643		$	1,698

Basic earnings per share	$	0.04		$	0.05		$	0.11		$	0.30

Diluted earnings per share	$	0.04		$	0.05		$	0.11		$	0.29

Cash dividends per share	$	0.06		$	0.05		$	0.18		$	0.10

Weighted average number of shares outstanding-basic	5,704			5,667			5,686			5,663

Additional shares assuming exercise of common stock equivalents and dilutive stock options	139			262			158			233

Weighted average number of shares outstanding-diluted	5,843			5,929			5,844			5,896

The accompanying notes are an integral part of the condensed consolidated financial statements.

ISCO, INC. AND SUBSIDIARIES ~~CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)~~

				Oct 25 2002		Jul 26 2002
				(Columnar amounts in thousands)
Assets
	Current assets:
		Cash and cash equivalents		$	1,424	$	633
		Short-term investments			5,506		5,646
		Accounts receivable — trade, net of allowance for doubtful accounts of $143,000 and $144,000			10,249		9,901
		Inventories			9,079		9,046
		Refundable income taxes			65		—
		Deferred income taxes			1,222		1,345
		Other current assets			1,439		1,136
			Total current assets		28,984		27,707
		Property and equipment, net of accumulated depreciation of $16,580,000 and $16,091,000			14,342		14,535
		Long-term investments			7,334		9,334
		Other assets			4,369		4,302
			Total assets	$	55,029	$	55,878
Liabilities and Shareholders' Equity
	Current liabilities:
		Accounts payable		$	1,425	$	1,303
		Accrued expenses			3,707		4,057
		Income taxes payable			—		176
		Short-term borrowing			1,651		1,909
		Current portion of long-term debt			1,149		1,131
			Total current liabilities		7,932		8,576
		Deferred income taxes			660		720
		Long-term debt, less current portion			712		1,006
		Shareholders' equity
			Preferred stock, $.10 par value, authorized 5,000,000 shares; issued none		—		—
			Common stock, $.10 par value, authorized 15,000,000 shares; issued and outstanding 5,673,971 and 5,672,346		567		567
			Additional paid-in capital		38,427		38,371
			Retained earnings		6,691		6,602
			Accumulated other comprehensive income (loss)		40		36
			Total shareholders' equity		45,725		45,576
			Total liabilities and shareholders' equity	$	55,029	$	55,878

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Columnar amounts in thousands)

	Apr 25 2003		Jul 26 2002

Assets
Current assets:
Cash and cash equivalents	$	1,687	$	633
Short-term investments	4,237		5,646
Accounts receivable - trade, net of allowance for doubtful accounts of $130,000 and $144,000	9,640		9,901
Inventories (Note 3)	9,925		9,046
Refundable income taxes	204		—
Deferred income taxes	1,224		1,345
Other current assets	1,323		1,136

Total current assets	28,240		27,707

Property and equipment, net of accumulated depreciation of $17,681,000 and $16,091,000	14,172		14,535
Long-term investments	7,114		9,334
Other assets (Note 4)	4,382		4,302

Total assets	$	53,908	$	55,878

Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	1,358	$	1,303
Accrued expenses	3,316		4,057
Income taxes payable	—		176
Short-term borrowing	2,035		1,909
Current portion of long-term debt	785		1,131

Total current liabilities	7,494		8,576

Deferred income taxes	373		720
Long-term debt, less current portion	547		1,006

Commitments and contingencies

Shareholders’ equity
Preferred stock, $.10 par value, authorized 5,000,000 shares; issued none	—		—
Common stock, $.10 par value, authorized 15,000,000 shares; issued and outstanding 5,724,338 and 5,672,346	572		567
Additional paid-in capital	38,687		38,371
Retained earnings	6,220		6,602
Accumulated other comprehensive income (Note 5)	15		36

Total shareholders’ equity	45,494		45,576

Total liabilities and shareholders’ equity	$	53,908	$	55,878

The accompanying notes are an integral part of the condensed consolidated financial statements.

ISCO, INC. AND SUBSIDIARIES ~~CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)~~

				Three Months Ended
				Oct 25 2002			Oct 26 2001
				(Columnar amounts in thousands)
Cash flows from operating activities:
	Net income (loss)			$	431		$	1,030
	Adjustments to reconcile net income (loss) to net cash flows from operating activities:
		Depreciation and amortization			628			580
		Stock-based compensation			49			16
		Deferred income taxes			47			(90	)
		Gain on sale of property and equipment			(125	)		(69	)
		Provision for doubtful accounts			13			10
		Undistributed (income) losses of AFTCO			(18	)		65
		Change in operating assets and liabilities:
			Accounts receivable-trade		(369	)		(304	)
			Inventories		(46	)		28
			Refundable income taxes		(65	)		460
			Other current assets		(301	)		(97	)
			Accounts payable		123			326
			Accrued expenses		(346	)		(605	)
			Income taxes payable		(176	)		97
		Other			(83	)		(41	)
	Total adjustments				(669	)		376
		Cash flows from operating activities			(238	)		1,406
Cash flows from investing activities:
	Proceeds from maturities of available-for-sale securities				2,750			—
	Proceeds from maturity of held-to-maturity securities				2,130			4,000
	Purchase of held-to-maturity securities				(497	)		(2,411	)
	Purchase of available-for-sale securities				(2,264	)		(2,752	)
	Proceeds from sale of property and equipment				174			132
	Purchase of property and equipment				(446	)		(740	)
	Other				22			190
		Cash flows from investing activities			1,869			(1,581	)
Cash flows from financing activities:
	Cash dividends paid				(341	)		—
	Net change in short-term borrowings				(237	)		(48	)
	Repayment of long-term debt				(269	)		(252	)
	Issuance of common stock and exercise of stock options				7			47
		Cash flows from financing activities			(840	)		(253	)
Cash and cash equivalents:
	Net increase (decrease)				791			(428	)
	Balance at beginning of year				633			2,675
	Balance at end of year			$	1,424		$	2,247

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

~~See Note 6 for supplemental cash flow information.~~ (Unaudited)

(Columnar amounts in thousands)

	Nine Months Ended
	Apr 25 2003			Apr 26 2002

Cash flows from operating activities:
Net income	$	643		$	1,698
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization	1,875			1,828
Stock-based compensation	100			321
Deferred income taxes	(210		)	293
Gain on sale of property and equipment	(310		)	(154		)
Provision for doubtful accounts	23			22
Undistributed (income) losses of AFTCO	18			(39		)
Change in operating assets and liabilities:
Accounts receivable-trade	302			(94		)
Inventories	(730		)	(195		)
Refundable income taxes	(204		)	460
Other current assets	(165		)	(48		)
Accounts payable	314			683
Accrued expenses	(770		)	195
Income taxes payable	(176		)	178
Other	(392		)	(134		)
Total adjustments	(325		)	3,316
Cash flows from operating activities	318			5,014

Cash flows from investing activities:
Proceeds from maturities of available-for-sale securities	7,350			700
Proceeds from maturity of held-to-maturity securities	2,630			9,750
Purchase of held-to-maturity securities	(497		)	(4,654		)
Purchase of available-for-sale securities	(5,934		)	(10,606		)
Proceeds from sale of property and equipment	422			331
Purchase of property and equipment	(1,504		)	(1,420		)
Other	(50		)	185
Cash flows from investing activities	2,417			(5,714		)

Cash flows from financing activities:
Cash dividends paid	(1,025		)	(566		)
Net change in short-term borrowings	(30		)	137
Repayment of long-term debt	(848		)	(790		)
Issuance of common stock and exercise of stock options	222			75
Cash flows from financing activities	(1,681		)	(1,144		)

Cash and cash equivalents:
Net increase (decrease)	1,054			(1,844		)
Balance at beginning of year	633			2,675
Balance at end of period	$	1,687		$	831

See Note 7 for supplemental cash flow information.

The accompanying notes are an integral part of the condensed consolidated financial statements.

ISCO, INC. AND SUBSIDIARIES ~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS October 25, 2002 (Unaudited) (Columnar amouts in thousands, except per share data)~~

~~Note 1: In~~NOTES ~~the~~TO ~~opinion~~CONDENSED ofCONSOLIDATED ~~management,~~FINANCIAL the accompanying unaudited condensed consolidated financial statements contain all of the adjustments necessary for a fair presentation of the financial position of the Company and the results of operations and cash flows for the interim periods presented herein. All such adjustments are of a normal recurring nature. Results of operations and cash flows for the current unaudited interim period are not necessarily indicative of the results that may be expected for the entire fiscal year. Inter-company transactions and accounts have been eliminated. STATEMENTS

~~While the~~April ~~Company believes that the disclosures presented are adequate to make the information not misleading~~25, it is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes to the consolidated financial statements included in the Annual Report on Form 10-K for the year ended July 26, 2002. 2003

~~Note 2: Certain reclassifications have been made to the prior period's financial statements to conform to the current period's presentation.~~ (Unaudited)

~~Note 3: Inventories~~(Columnar ~~are~~amounts ~~valued at the lower of cost or market, principally on the last-~~in thousands, ~~first-out~~except ~~(LIFO) basis.~~per ~~The~~share ~~composition of inventories was as follows:~~ data)

	Oct 25, 2002		Jul 26, 2002
Raw Materials	$	3,230	$	3,076
Work-in-process		3,023		3,173
Finished goods		2,826		2,797
	$	9,079	$	9,046

Note 1: In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all of the adjustments necessary for a fair presentation of the financial position of the Company and the results of operations and cash flows for the interim periods presented herein. All such adjustments are of a normal recurring nature. Results of operations and cash flows for the current unaudited interim period are not necessarily indicative of the results that may be expected for the entire fiscal year. Inter–company transactions and accounts have been eliminated.

~~Had~~While ~~inventories~~ the ~~been~~Company ~~valued~~believes onthat the ~~first-in,~~disclosures ~~first-out~~presented ~~(FIFO)~~are ~~basis~~adequate to make the information not misleading, ~~they~~it ~~would~~is ~~have~~suggested ~~been~~that ~~approximately~~these ~~$2,244,000~~condensed ~~and~~consolidated financial ~~$2,307,000~~statements ~~higher~~be ~~than~~read ~~reported~~in onconjunction with the ~~LIFO~~consolidated financial ~~basis~~ statements atand ~~October 25,~~notes ~~2002~~to ~~and~~the ~~July 26,~~consolidated ~~2002,~~financial ~~respectively.~~statements included in the Annual Report on

Form 10-K for the year ended July 26, 2002.

Note 2: The Company adopted Statement of Financial Accounting Standards (“SFAS”) No. 142, Goodwill and Other Intangible Assets, on July 27, 2002. SFAS No. 142 provides that goodwill and other intangible assets with indefinite lives shall not be amortized and shall be tested for impairment on an annual basis. There was no impairment that resulted from adoption of this standard. The Company discontinued the amortization of equity method goodwill relating to the AFTCO joint venture upon adoption of this standard. Goodwill and other identifiable intangible assets with indefinite lives are not amortized and are tested annually for impairment. Impairment occurs when the fair value of the asset is less than its carrying amount. Identifiable intangible assets with definite lives are amortized over their estimated useful lives and tested for impairment whenever events or changes in circumstances indicate the carrying amount of the asset may be impaired. Impairment occurs when the fair value of the asset is less than its carrying amount. If impaired, the intangible asset is written down to its fair value. The after tax impact of adopting this standard in fiscal 2002 would have been to increase fiscal 2002 earnings for the three and nine months ended April 26, 2002 by approximately $19,000 and $57,000, respectively. Basic and diluted earnings per share would have increased by $0.0 and $0.1 per share for the three and nine months, respectively.

In December 2002, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 148, Accounting for Stock-Based Compensation — Transition and Disclosure, an amendment of FASB Statement No. 123. SFAS No. 148 provides alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, SFAS No. 148 amends the disclosure requirements of SFAS No. 123, Accounting for Stock-Based Compensation, to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. The disclosure requirements of SFAS No. 148 are effective for fiscal years ending after December 15, 2002 and for interim periods beginning after December 15, 2002. The Company is evaluating whether to adopt the fair value based method of accounting for stock-based compensation, and the alternative methods of transition for such a change. If the Company were to elect to change to the fair value based method using the retroactive restatement alternative under SFAS No. 148, the Company estimates the additional compensation expense associated with stock-based compensation would reduce earnings by approximately $0.05per share for fiscal 2003. Actual results may differ.

Note 4 3: ~~Other~~ Inventories ~~Assets~~are valued at the lower of cost or market, principally on the last–in, first–out (LIFO) basis. The composition of inventories was as follows:

	Oct 25, 2002		Jul 26, 2002
	Apr 25, 2003		July 26, 2002
Intangibles, net of accumulated amortization of $704,000 and $672,000	$	982	$	1,014
Raw Materials	$	3,306	$	3,076
Investment in AFTCO, net of accumulated amortization of $325,000		581		563
Work-in-process	3,222		3,173
Cash value of life insurance		1,354		1,335
Finished goods	3,397		2,797
Note receivable — related party		1,000		1,000
	$	9,925	$	9,046
Other		452		390
	$	4,369	$	4,302

~~Note 5: Comprehensive~~Had inventories ~~income~~been valued on the first–in, first–out (~~loss~~FIFO) basis, they ~~for~~would have been approximately $2,230,000 and $2,307,000 higher than reported on the ~~three~~LIFO ~~month~~basis ~~periods~~at ~~ended~~April ~~October~~ 25, ~~2002~~2003 and ~~October~~ July 26, ~~2001~~2002, ~~was as follows:~~ respectively.

		Three months ended
		Oct 25 2002			Oct 26 2001
Net income		$	431		$	1,030
Other comprehensive income (loss), net of income tax (tax benefit):
	Foreign currency translation adjustment		5			(30	)
	Unrealized holding gains (losses) on available-for-sale securities		(1	)		(9	)
Comprehensive income		$	435		$	991

Note 4: Other assets were comprised of the following as of April 25, 2003 and July 26, 2002:

Note 6: Supplemental Cash Flow Information

	Apr 25, 2003		Jul 26, 2002
Intangibles, net of accumulated amortization of $769,000 and $672,000	$	917	$	1,014
Investment in AFTCO	544		563
Cash value of life insurance	1,387		1,335
Notes receivable - related party	1,050		1,000
Other	484		390
	$	4,382	$	4,302

The Company ~~made~~expects ~~income~~amortization ~~tax~~expense ~~payment~~on intangibles, all of ~~$385~~which are subject to amortization,~~000~~ ~~and~~to be approximately $0130,000 ~~during~~for ~~the~~fiscal ~~three-month~~year ~~periods~~2003 ~~ended~~and approximately ~~October 25~~$113,000 ~~2002~~for ~~and~~each ~~October 26,~~of ~~2001,~~the ~~respectively.~~five succeeding years.

The Company made interest payments of $59,000 and $78,000 during the three-month periods ended October 25, 2002 and October 26, 2001, respectively.

Note 7: Legal Proceedings The Company continues its activities related to its SWIFT column products and to the filed lawsuits by and against Cornell Research Foundation, Inc. ("Cornell") All legal actions are in their preliminary stages. The Company intends to pursue these matters very vigorously and believes that it will prevail whether through court action or through any court-ordered or party-agreed-to arbitration. Details on these lawsuits can be found in Isco's annual report on Form 10-K for fiscal year 2002 under Part I, Item 3, Legal Proceedings.

The Company began selling the new SWIFT columns late in the in the fourth quarter of fiscal 2002. At this time, the revenues from SWIFT columns are not material to the overall revenues of the Company. The Company continues to invest in infrastructure to build and expand this column business. Details on the Company's investments in this area can be found in Isco's annual report on Form 10-K for fiscal year 2002 under the section entitled "Factors Affecting Future Results" in Part I, Item 2, Management's Discussion and Analysis of Results of Operations and Financial Condition.

Note 8: New Accounting Pronouncements

The Company adopted Statement of Financial Accounting Standards ("SFAS") No. 142, Goodwill and Other Intangible Assets, as of the beginning of the current fiscal year. SFAS No. 142 provides that goodwill and other intangible assets with indefinite lives shall not be amortized and shall be tested for

~~impairment~~Note ~~of value on an annual basis. There was no impairment that resulted from adoption of this standard. The Company discontinued the amortization of equity method goodwill relating to the AFTCO~~5: ~~joint~~ Comprehensive ~~venture~~income, ~~upon adoption of this standard. Goodwill and other identifiable intangible assets with indefinite lives are not amortized and are tested annually~~ for ~~impairment. Impairment occurs when~~ the ~~fair~~three ~~value~~month ~~of the asset is less than its carrying amount. Identifiable intangible assets with definite lives are amortized over their estimated useful lives~~ and ~~tested~~nine ~~for~~month ~~impairment~~periods ~~whenever~~ended ~~events~~ April or25, ~~changes~~2003 inand ~~circumstances~~April ~~indicate the carrying amount of the asset may be impaired. Impairment occurs when the fair value of the asset is less than its carrying amount. If impaired~~26, ~~the intangible asset is written down to its fair value. The after tax impact of adopting this standard in fiscal~~ 2002 ~~would have been to increase first quarter fiscal 2002 earnings by approximately $19~~,~~000.~~ ~~Basic~~was ~~and~~as ~~diluted earnings per share amounts would not have changed on a pro forma basis.~~ follows:

In June 2002, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 146 (SFAS No. 146), Accounting for Costs Associated with Exit or Disposal Activities. SFAS No. 146 addresses financial accounting and reporting for costs associated with exit or disposal activities. SFAS No. 146 is effective for exit or disposal activities that are initiated after December 31, 2002.

	Three months ended						Nine months ended
	Apr 25 2003			Apr 26 2002			Apr 25 2003			Apr 26 2002

Net income	$	222		$	307		$	643		$	1,698
Other comprehensive income (loss), net of income tax (tax benefit):
Foreign currency translation adjustment	32			7			(2		)	(9		)

Unrealized holding gains (losses) on available-for-sale securities	(9		)	(3		)	(19		)	(13		)
Comprehensive income	$	245		$	311		$	622		$	1,676

Note 6: As permitted by SFAS 123, the Company accounts for its stock-based compensation on the intrinsic-value method in accordance with Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations. For those options granted to employees as fixed award stock options and non-employee directors’ stock options, no stock-based employee compensation expense related to the Company’s stock option plans is reflected in net income, as all options granted as fixed awards or to non-employee directors had an exercise price equal to market value of the underlying common stock on the date of grant. Pro forma information regarding net income and earnings per share is required by SFAS No. 148. This information is presented as if the Company had accounted for all stock-based awards under the fair value method:

	Three months ended						Nine months ended
	Apr 25 2003			Apr 26 2002			Apr 25 2003			Apr 26 2002

Net income, as reported	$	222		$	307		$	643		$	1,698
Less: Stock-based compensation determined under the fair value based method, net of income tax (tax benefit):	(91		)	(25		)	(272		)	(74		)
Add: Stock-based employee compensation expense included in reported net income, net of income tax (tax benefit):	(11		)	67			42			257

Pro forma net income	$	120		$	349		$	413		$	1,881

Earnings per share:
Basic-As Reported	$	0.04		$	0.05		$	0.11		$	0.30
Basic-Pro forma	$	0.02		$	0.06		$	0.07		$	0.33

Diluted-As Reported	$	0.04		$	0.05		$	0.11		$	0.29
Diluted-Pro forma	$	0.02		$	0.06		$	0.07		$	0.32

Note 7: ~~Item~~Supplemental ~~2. MANAGEMENT'S~~Cash ~~DISCUSSION~~Flow ~~AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~ Information

The ~~following~~Company ~~Management's~~made ~~Discussion~~income ~~and~~tax ~~Analysis~~payments of ~~Financial Condition and Results of Operations contain trend analysis and other~~ ~~forward-looking statements within the meaning of Section 27A of the Securities Act of 1933~~ $759,000 asand ~~amended~~$23,000 ~~and~~during ~~Section 21E of~~ the ~~Securities~~nine-month ~~Exchange~~periods ~~Act~~ended ofApril ~~1934~~25, as2003 ~~amended. Actual results~~and ~~could~~ April ~~differ~~26, ~~materially~~2002, ~~from those projected in the forward-looking statements within this document~~respectively.

~~Results~~The Company made interest payments of $179,000 ~~Operations~~ and $215,000 during the nine-month periods ended April 25, 2003 and April 26, 2002, respectively.

~~The~~Note ~~following~~8: Involuntary table sets forth, for the three-month periods indicated, the percentages which certain components of the Condensed Consolidated Statements of Operations bear to net sales and the percentage of change of such components (based on actual dollars) compared with the same periods of the prior year. Terminations

		Three months ended
		Oct 25, 2002		Oct 26, 2001		Change
Net sales		100.0		100.0		0.4
Cost of sales		44.8		46.6		(3.4	)
		55.2		53.4		3.8
Operating expenses:
	Selling, general, & administrative	41.3		34.9		19.0
	Research & engineering	10.7		8.9		21.0
		52.0		43.8		19.4
Income from operations		3.2		9.6		(67.5	)
Other income (expense):
	Investment income	1.1		1.2		(5.6	)
	Interest expense	(0.4	)	(0.5	)	(24.4	)
	Other, net	0.3		(0.4	)	—
		1.0		0.3		328.9
Income before income taxes		4.2		9.9		(57.6	)
Provision for income taxes		1.4		3.2		(56.5	)
Net income		2.8		6.7		(58.2	)

In January 2003, the Company’s Board of Directors eliminated two corporate officer positions: Vice President of Sales and Marketing and Vice President of Corporate Development. In April 2003, an additional reorganization activity occurred resulting in the elimination of approximately 14 operating staff positions. In connection with the involuntary terminations, severance and related costs of approximately $0.2 million and $0.4 million were recorded during the three-month and nine-month periods ended April 25, 2003, respectively. These costs are included in selling, general and administrative expenses and accrued expenses in the condensed consolidated financial statements. The severance costs will be paid within a year from the termination date, with the majority being paid by the end of fiscal year 2003.

~~Net~~Note ~~Sales~~9: Legal ~~Analysis and Review~~ Proceedings

~~Our~~The Company ~~net~~continues ~~sales~~its ~~for~~activities ~~the~~related ~~first~~to ~~quarter~~its ofSWIFT ~~fiscal~~column ~~2003~~products ofand ~~$15.5 million~~to the ~~were~~filed ~~slightly~~lawsuits ~~above~~by ~~first~~and ~~quarter~~against ~~fiscal~~Cornell ~~2002~~Research ~~net~~Foundation, ~~sales~~Inc. The offinal ~~$15.4 million. Revenues~~hearing related to ~~our~~the ~~core~~scope ~~products lines (wastewater samplers, flow~~of ~~meters,~~ the ~~and~~Company’s ~~liquid~~license ~~chromatography)~~was ~~were~~held ~~$12.0 million~~in ~~for~~early ~~the~~April ~~first~~and ~~quarter~~post ofhearing ~~fiscal~~and ~~2003~~reply ~~compared~~briefs were ~~with~~filed ~~$11~~in May.~~6 million~~ A ~~for~~decision on the scope ~~same~~of ~~period~~Isco’s ~~last~~license ~~year,~~is anexpected ~~increase~~in ~~of 3~~June.0 ~~percent.~~ ~~Revenues~~ All ~~from~~other ~~our~~legal ~~liquid~~actions ~~chromatography~~remain ~~line~~in ~~continue~~their topreliminary ~~provide~~stages. ~~double~~The ~~digit~~Company intends ~~growth~~to ~~and~~pursue ~~accounted~~these ~~for~~matters ~~the~~vigorously ~~year-over-year~~and ~~increase,~~believes ~~while~~that ~~revenues~~it ~~from~~will ~~samplers and flow meters~~prevail ~~were~~ whether ~~down~~through ~~slightly~~court ~~from~~action ~~the~~or ~~first~~through ~~quarter~~any ofcourt-ordered ~~fiscal~~or ~~2002~~party-agreed-to arbitration. Details ~~Our~~on ~~major~~these ~~product~~lawsuits can ~~lines of samplers and flow meters continue to~~ be ~~negatively~~found ~~affected~~in byIsco’s ~~the~~annual ~~continuing~~report ~~economic~~on ~~and~~Form ~~competitive~~10-K ~~conditions that~~for ~~were present in the prior~~ fiscal year. ~~Revenues~~2002 ~~outside~~under Part ofI, ~~our~~Item ~~core product lines (including the product lines of process monitoring~~3, Legal Proceedings.

The Company began selling the new SWIFT columns late in the fourth quarter of fiscal 2002. At this time, the revenues from SWIFT columns are not material to the overall revenues of the Company. The Company continues to invest in infrastructure to build and expand this business. Details on the Company’s investments in this area can be found in Isco’s annual report on Form 10-K for fiscal year 2002 under the section entitled “Factors Affecting Future Results” in Part I, Item 2, Management’s Discussion and Analysis of Results of Operations and Financial Condition.

Note 10: New Accounting Pronouncements

In November 2002, the Financial Accounting Standards Board issued Financial Accounting Standards Board Interpretation No. 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees of Indebtedness of Others (FIN 45). The initial recognition and measurement provisions of FIN 45 are effective for guarantees issued or modified after December 31, 2002. The disclosure requirements of FIN 45 are effective for interim and annual periods ending after December 15, 2002. There was no significant impact on the Company’s consolidated financial statements as a result of adopting FIN 45.

~~supercritical~~Item ~~fluid extraction (SFE), syringe pumps, along with revenues related to equipment repairs and billed freight) were $3~~2.~~5 million~~ ~~for~~MANAGEMENT’S ~~the~~DISCUSSION ~~current~~AND ~~fiscal~~ANALYSIS ~~year~~OF ~~compared~~FINANCIAL ~~with $3.8 million for the same period last year, a 7.4 percent decrease. While syringe pump revenues increased, revenues from all other areas were either flat or lower than the prior year.~~ CONDITION

~~Domestic revenues~~AND ~~for~~RESULTS ~~the~~OF first quarter of fiscal 2003 of $11.8 million were 2.7 percent above first quarter fiscal 2002 revenues of $11.5 million. Domestic revenues related to our core product lines for the three months were up 2.0 percent from last year, with liquid chromatography revenues accounting for the increase, offset by declines in sampler and flow meter revenues. Domestic revenues outside of our core product lines were up 6.4 percent compared with the same period last year. Revenues from the syringe pump line accounted for the year-over-year improvement. OPERATIONS

~~International revenues~~The ~~for~~following ~~the~~Management’s ~~first~~Discussion ~~quarter~~and ofAnalysis ~~fiscal 2003~~ of Financial ~~$3.7 million~~Condition ~~were~~and ~~6.0 percent~~Results ~~below~~of ~~first~~Operations ~~quarter~~contain ~~fiscal~~trend ~~2002~~analysis ~~revenues~~and ~~of $4.0 million. First quarter~~other ~~revenues~~ forward-looking ~~from~~statements ~~our~~within ~~core~~the ~~product~~meaning ~~lines~~of ~~increased~~Section by27A ~~8.1 percent~~of ~~compared~~the ~~with~~Securities Act ~~last~~of ~~year's~~1933, ~~first~~as ~~quarter.~~amended, ~~The~~and ~~sampler~~Section ~~product~~21E ~~line~~of ~~accounted~~the ~~for~~Securities ~~this~~Exchange ~~revenue~~Act ~~increase~~of 1934, ~~partially~~as ~~offset~~amended. Actual byresults acould ~~decline~~ differ inmaterially ~~liquid~~from ~~chromatography~~those ~~related~~projected ~~sales.~~in ~~International~~the ~~revenues~~forward-looking ~~outside~~statements ofwithin this ~~our core product lines were down 19~~document.~~4 percent, with all areas contributing to the decrease.~~

~~Net orders~~Results of $15.1 million were received during the first quarter of fiscal 2003, a decrease of 1.0 percent from the first quarter of fiscal 2002. The order backlog at October 25, 2002 was $4.9 million, down approximately eight percent from the beginning of the fiscal year. Operations

~~Net~~The ~~Income~~following ~~Analysis~~table sets forth, for the three-month and ~~Review~~ nine-month periods indicated, the percentages which certain components of the Condensed Consolidated Statements of Operations bear to net sales and the percentage of change of such components (based on actual dollars) compared with the same periods of the prior year.

Our net income for the first quarter of fiscal 2003 was $0.4 million, down approximately $0.6 million or 58 percent from the prior year. The primary factor in the decline was lower income from operations. Income from operations for the first quarter of fiscal 2003 was $0.5 million, down approximately $1.0 million or 68 percent compared with the first quarter of fiscal 2002. Positive shifts in the mix of our product lines resulted in a gross margin, as a percentage of sales, of 55.2 percent compared with 53.4 percent for the same period last year, and provided additional gross margin dollars of $0.3 million. This benefit was offset by operating expenses which increased by approximately $1.3 million.

	Three months ended						Nine months ended
	Apr 25 2003		Apr 26 2002		Change		Apr 25 2003		Apr 26 2002		Change
Net sales	100.0		100.0		6.5		100.0		100.0		1.6
Cost of sales	48.9		48.6		7.2		47.0		48.2		(1.1	)
	51.1		51.4		5.8		53.0		51.8		4.1
Operating expenses:
Selling, general, & administrative	39.7		39.4		7.3		41.3		37.4		12.4
Research & engineering	10.6		10.3		9.7		10.8		9.2		18.8
	50.3		49.7		7.8		52.1		46.6		13.6

Income from operations	0.8		1.7		(50.4	)	0.9		5.2		(81.8	)

Other income (expense):
Investment income	0.7		1.2		(36.8	)	1.0		1.2		(16.0	)
Interest expense	(0.3	)	(0.5	)	(20.0	)	(0.4	)	(0.5	)	(16.7	)
Other, net	0.3		1.2		(68.4	)	0.3		0.2		72.2
	0.7		1.9		(59.8	)	0.9		0.9		2.3

Income before income taxes	1.5		3.6		(55.3	)	1.8		6.1		(69.6	)

Provision for income taxes	0.0		1.4		(97.0	)	0.4		2.2		(82.6	)

Net income	1.5		2.2		(27.7	)	1.4		3.9		(62.1	)

The increaseNet inSales operatingAnalysis expenses was driven by increases in both sales, general and administrative (SG&A) expenses and engineering expenses. The majority of the increase was in SG&A, which increased by approximately $1.0 million from the prior year. Increased staffing for the chromatography line, general wage increases, increased exhibition expenses, and the replacement of an international dealer were drivers in the SG&A increase. Approximately $300,000 of the increase is attributed to marketing, sales, and legal expenditures for the new SWIFT chromatography media. Beginning in the second quarter of the prior fiscal year, and continuing through the first quarter of fiscal 2003, we increased the expenditure level for SG&A. This was due to our commitment to build the marketing and sales infrastructure to capitalize on market and technology opportunities in process monitoring, SWIFT columns, and drug discover applications of liquid chromatography. These commitments are discussed in detail in our annual report on Form 10-K under the section titled "Factors affecting future results." Engineering expenses increased by $0.3 million primarily from higher levels of outsourced product development activities. Review

~~Other~~Our sales for the three-month and nine-month ~~income~~ periods ~~increased~~ended byApril 25, 2003 were $~~125~~15.1 million and $44.8 million,~~000~~ respectively. For the periods under review, ~~for~~our ~~the~~sales ~~first~~were ~~quarter~~6 ofpercent ~~fiscal~~and ~~2003~~2 ~~compared~~percent ~~with~~higher ~~the~~than ~~same~~for ~~period~~the respective periods of last year. ~~This~~Sales ~~improvement~~of ~~was~~core ~~driven~~products by(wastewater ~~improved~~samplers, ~~earnings~~flow ~~from AFTCO~~meters, ~~Isco's~~ ~~joint~~ and ~~venture~~liquid chromatography products) of $11.3 ~~While~~million ~~our~~for ~~average~~the ~~investment~~quarter ~~balances~~and $34.3 million for the nine-month period, were ~~higher~~up in4 percent and 3 percent, respectively, as compared to the ~~current~~same periods of last year. In each of the periods, ~~lower~~liquid chromatography ~~yield~~and ~~rates~~sampler ~~resulted~~products inprovided aincreased ~~slight~~sales ~~decrease~~over the prior year, offset by a reduction in ~~investment~~sales ~~income~~of ~~for~~flow ~~the~~meters. Sales ~~three~~of our non-~~month~~core ~~period~~products ~~compared~~(process ~~with~~monitoring, ~~last~~supercritical ~~year~~ fluid extraction (SFE) and syringe pump products) of $2.8 ~~Interest~~million ~~expense~~for ~~also~~the quarter ~~decreased~~and ~~slightly~~$7.9 million for the ~~three~~nine-month ~~comparison~~period ~~due~~were toup ~~our~~24 ~~continued~~percent ~~ability~~and down 3 percent, respectively, compared to ~~drive~~the ~~down~~same ~~our~~periods ~~outstanding~~of ~~fixed~~last ~~debt~~year. ~~Our~~The quarterly ~~effective~~improvement ~~income~~was ~~tax~~due ~~rate~~to ~~for~~the timing of shipments between quarters. For the ~~first~~nine-month ~~quarter~~period, the strong increase in sales of ~~fiscal~~syringe ~~2003~~pumps was offset by declines in SFE and process monitoring product sales.

U.S. sales for the three months and nine ~~was~~ months 33were up 2 percent in each period.1 U.S. sales of our core products for the same periods increased 3 percent and ~~compared~~2 ~~with~~percent, anrespectively, ~~effective~~over ~~income~~the ~~tax~~comparable ~~rate~~periods of fiscal 2002. Samplers and liquid chromatography products posted increases offset by a decrease in flow meter sales for both the three-month and nine-month periods. U.S. sales of our non-core products were up 10 percent and 4 percent, respectively, as compared to the same period of last year. SFE ofand 32syringe pump sales increased for the quarter, while process monitoring sales were down.~~2 percent.~~ For the nine-month period, sales of syringe pumps accounted for the increase offset by declines in process monitoring and SFE product sales.

~~Financial~~International ~~Condition~~sales for the three months were up 17 percent over the prior year while sales for the nine-month period were at the same level as the previous year. Sales of our core products for the same periods were up 8 percent and ~~Liquidity~~ 6 percent, respectively, over last year. The increase for the three month period was driven by increased sales of liquid chromatography products while the increase in the nine-month sales was driven by increased sales of samplers. International sales of our non-core products for the three months and nine months increased by 35 percent and decreased by 7 percent, respectively. Sales of process monitoring and SFE products drove the increased sales for the three-month period while the decline for the nine-month period was driven by decreases in sales of SFE and syringe pump products.

~~Our~~During ~~overall~~the ~~cash~~three months and ~~investments~~nine ~~decreased to $14.3 million at October 25~~months, ~~2002~~we received ~~from~~net ~~$15.6 million~~orders ~~at the end~~ of ~~fiscal year 2002, a decrease of~~ $114.3 8 million. ~~Operating~~and ~~activities utilized~~ $043.2 9 million, ofrespectively. ~~cash~~Net orders ~~during~~received ~~the~~were ~~first~~up ~~quarter~~3 ofpercent ~~fiscal~~and ~~2003~~up ~~compared~~2 ~~with~~percent ~~generating~~compared ~~$1.4 million~~to ~~during~~ the same ~~period~~ periods last year. The ~~major~~order ~~factor~~backlog inat ~~the~~April 25, ~~decline~~2003 was ~~a change in operating assets and liabilities that resulted in a net reduction of approximately~~ $14.~~1 million~~4 ~~in operating cash flow~~million, ~~primarily~~down ~~driven~~approximately by17 ~~a change~~percent infrom ~~income taxes. During fiscal 2002, we received~~ the ~~benefits~~beginning of ~~net operating loss carry forwards to offset that year's tax liabilities. These benefits were fully utilized in fiscal 2002. The~~ ~~decline in net income accounted for approximately $0.6 million of the $1.6 million decline, with the adjustments for depreciation and amortization and other non operating assets and~~ ~~liabilities being at approximately~~ the ~~same~~fiscal ~~level~~year.

We investedNet theIncome cashAnalysis generated from maturities of investments of $4.9 million into long-term and short-term investments of $2.8 million. We utilized the remaining cash available from investment maturities to fund the cash required for operations, purchase a net of $0.3 million in equipment, used cash of $0.5 million for the repayment of long and short term bank obligations and used $0.3 million for dividends. Our net cash and cash equivalents position increased by $0.8 million for the first quarter of fiscal 2003 compared to a net decrease of $0.4 million in the first quarter of fiscal 2002. Review

~~At October 25,~~We ~~2002,~~generated wenet ~~had~~income ~~working capital~~ of $~~21.1 million and a current ratio of 3.7:1. At period-end~~222,000 ~~our total long-term debt was~~and $~~1.9 million~~643,000, ~~with~~respectively, ~~$1.1 million~~for ~~payable within~~ the ~~next~~three ~~year.~~months Inand ~~addition,~~nine wemonths ~~had~~ended ~~lines~~April of25, 2003 ~~credit~~compared with ~~various~~net ~~banks~~income ~~totaling~~of $~~7.0 million~~307,000 ofand ~~which approximately~~ $~~5.0 million~~1,698,000, ~~was~~respectively, ~~available~~ for ~~future~~the same ~~business~~periods ~~needs.~~last year.

~~New~~Our ~~Accounting~~net ~~Pronouncements~~ income for the third quarter and nine months of fiscal 2003 was down approximately $0.1 million and $1.1 million, respectively from the prior year. Our income from operations for the third quarter and nine months of fiscal 2003 was down approximately $0.1 and $1.9 million, respectively, compared with the same periods of fiscal 2002. The primary factor in both of these declines was due to increased operating expenses in both dollars and as a percentage of sales. For the quarter, the primary source of increased revenues were our international sales, which carry lower margins and resulted in a slight decline in the gross margin as a percentage of sales compared to the prior year. Positive shifts in the mix of our product lines resulted in gross margins, as a percentage of sales, of 53.0 percent for the nine-month period compared with 51.8 percent for the same period last year and provided additional gross margin dollars of $0.6 million.

InThe ~~June 2002~~increase in operating expenses was driven by increases in both sales, ~~the~~general ~~Financial~~and ~~Accounting~~administrative ~~Standards~~(SG&A) ~~Board~~expenses ~~issued~~and engineering ~~Statement~~expenses. The majority of the ~~Financial~~increase ~~Accounting~~was ~~Standards~~in NoSG&A, which increased by approximately $0. ~~146~~4 ~~(SFAS~~million Noand $2. ~~146), Accounting~~0 million for the quarter and nine-month periods, respectively, over the ~~Costs~~ prior ~~Associated~~year. The three and nine-month results were impacted by severance costs associated with ~~Exit~~organizational restructuring orof ~~Disposal~~approximately ~~Activities~~$0.2 ~~SFAS~~million Noand $0. ~~146~~4 ~~addresses~~million, respectively. Note 8 to the consolidated financial ~~accounting~~statements contains details on the recent restructuring. In addition, our expenses, including legal fees, related to SWIFT increased by approximately $0.3 million and ~~reporting~~$1.0 million of the three-month and nine-month periods, respectively. The remainder of the SG&A increase, for the ~~costs~~nine-month period, was due to the increased expenditure levels associated with ~~exit~~our orcommitment ~~disposal~~to ~~activities~~build the marketing and sales infrastructure to capitalize on market and technology opportunities in process monitoring and the drug discovery applications of liquid chromatography as well as increases in general wages, increased benefit costs, and the replacement of an international dealer. Our ~~SFAS~~commitment Noto build the marketing and sales infrastructure to capitalize on market and technology opportunities in process monitoring, columns and drug discovery applications of liquid chromatography and SWIFT are discussed in detail in our annual report on Form 10-K under the section titled “Factors Affecting Future Results. ~~146~~” Engineering isexpenses ~~effective~~increased for ~~exit~~the quarter orand ~~disposal~~nine ~~activities~~months ~~that~~by ~~are~~$0.1 ~~initiated~~and ~~after~~$0.8 ~~December 31~~million, ~~2002.~~respectively, primarily from higher levels of outsourced product development activities.

~~Critical Accounting Policies~~ 11

~~Accounts~~Other ~~Receivable~~ income decreased by $158,000 and increased by $9,000, for the three-month and nine-month periods ended April 25, 2003, respectively, as compared to the same periods of the previous year. The decline for the quarter was due to significantly lower operating results from AFTCO, Isco’s joint venture and from reduced investment returns. While our average investment balances were higher in the current year, lower yield rates resulted in a decrease in investment income for the three-month and nine-month periods as compared with last year. Interest expense also decreased slightly for the three month and nine month comparison due to our continued ability to reduce our outstanding fixed debt.

~~Accounts~~Our ~~receivable~~effective ~~consist~~income ~~primarily~~tax ofrate ~~amounts~~for ~~due~~the tothree months usand ~~from~~nine ~~normal~~months ~~business~~ended ~~activities.~~April We25, ~~maintain~~2003 anwas ~~allowance~~2.3 ~~for~~percent ~~doubtful~~and ~~accounts~~20.9 topercent, respectively. ~~reflect~~For the ~~expected~~same periods last year our effective income tax rates ~~uncollectibility~~ were of39.8 ~~accounts~~percent ~~receivable~~and ~~based~~36.5 percent, respectively.The largest impacts on the effective tax rate changes from the prior comparative periods were a ~~combination~~result of exchange ~~past~~rate ~~collection~~changes ~~history,~~on ~~aging~~foreign ofnet ~~outstanding~~operating ~~accounts~~loss ~~receivables,~~carryforwards and ~~specific~~the minimal ~~risks~~absolute ~~identified~~dollar inamount of net income for the ~~portfolio.~~quarter and nine months ended April 25, 2003.

~~Inventories~~ Financial Condition and Liquidity

~~Inventories~~Our ~~consist~~overall ofcash ~~purchased~~and ~~materials,~~investments ~~raw~~decreased ~~materials,~~to $13.0 ~~in-process~~million ~~subassemblies~~at April 25, ~~and~~2003 ~~finished~~from ~~goods~~$15.6 ~~Inventory~~million ~~obsolescence~~at ~~cost~~the ~~has~~end ~~not historically~~of ~~been~~fiscal ~~material~~year 2002, ~~and as~~ a ~~result~~decrease weof do$2.6 ~~not~~million. Operating ~~carry~~activities agenerated ~~reserve~~$0.3 ~~for~~million ~~obsolescence~~of ~~for~~cash during the ~~majority~~first nine months of ~~our~~fiscal ~~inventory.~~2003 Wecompared ~~review~~with ~~our~~generating ~~inventory~~$5.0 ~~balances~~million toduring ~~determine~~the same ifperiod ~~inventories~~last ~~can~~year. The bedecline ~~sold at~~in ~~amounts~~ net ~~equal~~income tofor orthe ~~greater~~nine-month ~~than~~period ~~their~~accounted ~~carrying~~for ~~amounts~~approximately $1.1 ~~The~~million of ~~review~~the ~~includes~~$4.7 ~~identification~~million ofdecline, ~~slow-moving~~with ~~inventories,~~the ~~obsolete~~adjustments ~~inventories,~~for depreciation and amortization ~~discontinued~~and ~~products~~other ornon ~~lines~~operating ofassets and liabilities declining ~~products~~ slightly. The ~~identification~~change ~~process~~in ~~includes~~operating assets and liabilities resulted in a ~~review~~net reduction of ~~historical~~approximately ~~performance~~$2.7 million ofin operating cash flow, primarily driven by changes in the ~~inventory~~level of accounts payable and ~~current~~accrued ~~operational~~balances ~~plans~~and ~~for~~increases in income tax payments. During fiscal 2002, we received the ~~inventory~~benefits of U.S. Ifnet ~~our~~operating ~~actual~~loss ~~results~~carry ~~differ~~forwards ~~from~~to ~~our~~offset that year’s income tax liabilities. These benefits were fully utilized in fiscal 2002.

11We invested the cash generated from maturities of investments of $10.0 million into long-term and short-term investments of $6.4 million. We utilized the remaining cash available from investment maturities to purchase a net of $1.1 million in equipment, used cash of $0.9 million for the repayment of long and short term bank obligations and used $1.0 million for dividends. Our net cash and cash equivalents position increased by $1.1 million for the first nine months of fiscal 2003 compared to a net decrease of $1.8 million in the first nine months of fiscal 2002.

~~expectations~~At ~~with~~April ~~respect~~25, to2003, ~~the~~we ~~inventory~~had ~~sales~~working atcapital ~~amounts~~of $20.7 ~~equal~~million toand ora ~~greater~~current ~~than~~ratio ~~their~~of ~~carrying~~3.8:1. At ~~amounts~~period-end, weour ~~would~~total belong-term ~~required~~debt towas ~~adjust~~$1.3 ~~our~~million ~~inventory~~with ~~balances accordingly~~$0.8 million Wepayable ~~use~~within the ~~link-chain~~ ~~method~~next ~~for~~year. In ~~valuing~~addition, ~~the~~we ~~majority~~had lines of ~~our~~credit ~~inventory~~with onvarious abanks ~~LIFO~~totaling ~~basis~~$7.0 million of which approximately $4.8 million was available for future business needs.

~~Revenue Recognition~~ 12

~~Revenues~~New ~~are~~Accounting recorded when products are shipped to customers or, in instances where service is performed to customer requirements, upon the successful completion of such service. We are generally not contractually obligated to accept returns, except for defective products. Sales are shown net of returns and discounts. Pronouncements

In December 2002, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 148, Accounting for Stock-Based Compensation — Transition and Disclosure, an amendment of FASB Statement No. 123. SFAS No. 148 provides alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, SFAS No. 148 amends the disclosure requirements of SFAS No. 123, Accounting for Stock-Based Compensation, to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. The disclosure requirements of SFAS No. 148 are effective for fiscal years ending after December 15, 2002 and for interim periods beginning after December 15, 2002. The Company is evaluating whether to adopt the fair value based method of accounting for stock-based compensation, and the alternative methods of transition for such a change. If the Company were to elect to change to the fair value based method using the retroactive restatement alternative under SFAS No. 148, the Company estimates the additional compensation expense associated with stock-based compensation would reduce earnings by approximately $0.05 per share for fiscal 2003. Actual results may differ.

WeIn ~~have~~November ~~elected~~2002, tothe ~~account~~Financial ~~for~~Accounting Standards ~~fixed~~Board ~~award~~issued ~~stock~~Financial ~~options~~Accounting Standards Board Interpretation No. 45, Guarantor’s Accounting and ~~nonemployee~~Disclosure ~~directors'~~Requirements ~~options~~for ~~under~~Guarantees ~~the~~of ~~provisions~~Indebtedness of ~~APB~~Others (FIN No45). 25 The ~~"Accounting~~initial recognition and measurement provisions of FIN 45 are effective for ~~Stock~~guarantees ~~Issued~~issued or to modified ~~Employees".~~after AsDecember ~~such~~31, no2002. The disclosure ~~compensation~~requirements ~~cost~~of ~~has~~FIN ~~been~~45 ~~recorded~~are ineffective ~~the~~for ~~financial~~interim ~~statements~~and ~~relative~~annual toperiods ending ~~these~~after ~~options.~~December We15, ~~utilize~~2002. There was ~~the~~no ~~Black-Scholes~~significant ~~option~~impact ~~pricing~~on ~~model~~the toCompany’s ~~estimate~~consolidated ~~the~~financial ~~fair~~statements ~~value of~~as ~~these~~ a ~~options~~result ~~for~~of ~~disclosure~~adopting ~~purposes.~~FIN 45.

~~We account~~Critical ~~for~~Accounting performance based awards granted under our employee stock option plans in accordance with the provisions of APB 25. Options granted under the performance based awards are subject to variable accounting treatment until the number of options that will vest is known. Options not vested at the end of each performance year are cancelled. Compensation expense is recorded based on difference between the closing market price at the date the shares vest and the exercise price as determined at the date the shares were granted. Policies

~~Deferred stock~~Accounts units granted to nonemployee directors are accounted for in accordance with Statement of Financial Accounting Standards No. 123 "Accounting for Stock-Based Compensation." Accordingly, directors deferred stock units are recorded as compensation expense at estimated fair value on the date the units are earned by the director. Receivable

~~Joint~~Accounts ~~Venture~~ receivable consist primarily of amounts due to us from normal business activities. We maintain an allowance for doubtful accounts to reflect the expected uncollectibility of accounts receivable based on a combination of past collection history, aging of outstanding accounts receivables, and specific risks identified in the portfolio.

~~We account for our investment in the AFTCO joint venture using the equity method of accounting.~~ Inventories

~~Factors~~Inventories ~~Affecting~~consist ~~Future~~of ~~Results~~ purchased materials, raw materials, in-process subassemblies, and finished goods. Inventory obsolescence cost has not historically been material and as a result we do not carry a reserve for obsolescence for the majority of our inventory. We review our inventory balances to determine if inventories can be sold at amounts equal to or greater than their carrying amounts. The review includes identification of slow-moving inventories, obsolete inventories, and discontinued products or lines of products. The identification process includes a review of historical performance of the inventory and current operational plans for the inventory. If our actual results differ from our expectations with respect to the inventory sales at amounts equal to or greater than their carrying amounts, we would be required to adjust our inventory balances accordingly. We use the link-chain method for valuing the majority of our inventory on a LIFO basis. Our pre-tax earnings were $77,000 higher for the nine months ended April 25, 2003 than if the inventories were carried on a FIFO basis.

AsRevenue stated in our annual report on Form 10-K for fiscal 2002, we expected fiscal year 2003 to be a challenging year related to growth in the areas of net sales, net income, and cash flow. During this first quarter our sales in the area of water quality have been adversely affected by the economic and political conditions we mentioned in our Form 10-K for fiscal 2002. We anticipate that these negative conditions will continue into the next quarter and potentially throughout the fiscal year. In addition, we have begun to see signs that the strong sales growth rate of liquid chromatography products for drug discovery applications will slow due to pressure upon pharmaceutical firms to reduce spending and increase profits. Recognition

~~Our net~~Revenues ~~income~~are ~~will~~recorded ~~also~~when beproducts ~~affected~~are shipped ~~as we maintain the marketing and sales infrastructure~~ to ~~capitalize~~customers onor, ~~market~~in ~~and~~instances ~~technology~~where ~~opportunities~~service inis ~~process~~performed ~~monitoring,~~to ~~SWIFT columns~~customer requirements, ~~and drug~~upon ~~discovery~~the ~~applications~~successful completion of ~~liquid~~such ~~chromatography~~service. We ~~believe~~are wegenerally ~~can~~not ~~deliver~~contractually ~~greater~~obligated to ~~long-term~~accept ~~value~~returns, except for ~~our~~defective ~~shareholders~~products. Sales byare ~~maintaining~~shown ~~these~~net ~~investments~~of ~~rather~~returns ~~than~~and ~~reducing our commitment to strive for a year-over-year increase in net income~~discounts.

~~In addition to the downward pressure from potentially lower net sales and operating income, our cash flows from operations for the year will be negatively impacted by our return to remitting income~~ 13

12Stock-Based Compensation

We ~~taxes.~~ have ~~Cash~~elected ~~flows~~to inaccount ~~the~~for ~~prior~~fixed ~~two~~award ~~fiscal~~stock ~~years~~options ~~benefited~~and ~~from~~nonemployee directors’ options under the ~~utilization~~provisions of ~~net~~APB ~~operating losses carry forwards~~No. ~~While~~25 weAccounting ~~are~~for ~~committed~~Stock Issued to Employees. As ~~improving our working capital management~~such, ~~we do not~~no ~~believe~~ compensation ~~these~~cost ~~improvements~~has ~~will~~been ~~offset~~recorded in the ~~effect~~financial ofstatements ~~the~~relative ~~above~~to these ~~items~~options. We Inutilize the Black-Scholes ~~aggregate,~~option wepricing ~~anticipate~~model ~~that~~to ~~our~~estimate ~~overall cash and investments will remain flat, or decline slightly from~~ the ~~current level,~~fair ~~over~~value ~~the remainder~~ of ~~the~~these ~~fiscal~~options for ~~year.~~disclosure purposes.

~~Market~~We account ~~Risk~~ for performance based awards granted under our employee stock option plans in accordance with the provisions of APB 25. Options granted under the performance based awards are subject to variable accounting treatment until the number of options that will vest is known. Options not vested at the end of each performance year are cancelled. Compensation expense is recorded based on the difference between the closing market price at the date the shares vest and the exercise price as determined at the date the shares were granted.

~~Interest~~Deferred ~~rate~~stock ~~risk~~units ~~and~~granted ~~currency exchange risks are the primary market risks~~ to ~~which we are exposed. We do not use derivative financial or commodity instruments.~~nonemployee ~~Our other financial instruments include cash and cash equivalents, accounts and notes receivable, accounts and notes payable and long-term debt. Our cash and cash equivalents, accounts and~~ ~~notes~~directors ~~receivable, and accounts and notes payable balances~~ are ~~generally~~accounted ~~short-term~~for in ~~nature~~accordance ~~and~~with doStatement ~~not~~of ~~expose our company to material market risk. At October 25, 2002, we had~~Financial ~~approximately~~ Accounting ~~$1.9 million~~Standards ~~of fixed rate debt~~No. In123 ~~addition,~~Accounting wefor ~~had~~Stock-Based $7Compensation.~~0 million of variable rate credit facilities~~ Accordingly, ofdirector’s ~~which~~deferred ~~approximately~~stock ~~$1.7 million was outstanding under these~~units ~~credit~~ are ~~facilities.~~recorded Weas docompensation ~~not~~expense ~~believe~~at ~~that~~estimated ~~changes~~fair invalue ~~interest rates~~ on the ~~debt~~date ~~and~~the ~~credit facilities would have a material effect on our results of operations, given our current obligations under~~units ~~these~~ are ~~debt~~earned ~~and~~by ~~credit~~the ~~facilities~~director.

~~Related to~~Joint currency exchange, international sales of our United States based operations are denominated in U.S. dollars and international sales of our German subsidiary are denominated in Euros. The currency exchange risk at the current level of activity is not material to our operating results or financial position. Our market risk resulting from the translation of the profit and loss of STIP and from our permanent investment in our foreign subsidiaries is not material. Venture

~~There have~~We ~~been~~account nofor ~~material~~our ~~changes~~investment ~~during~~in the ~~first~~AFTCO joint ~~quarter~~venture ofusing ~~fiscal 2003 with respect to~~ the ~~Company's~~equity ~~contractual~~method ~~obligations. Details~~ of the Company's contractual obligations can be found in the Management's Discussion and Analysis of Results of Operations and Financial Condition section of the Company's fiscal 2002 Annual Report on Form 10-Kaccounting.

~~Inflation~~ Factors Affecting Future Results

~~Inflation~~The ~~has~~first ~~not~~nine ~~had,~~months ~~and~~of isfiscal ~~not~~2003 ~~expected~~have been just as challenging as anticipated in our annual report on Form 10-K for fiscal 2002. We were expecting challenges related to ~~have~~growth in the areas of net sales, anet ~~material~~income, ~~impact~~and ~~upon~~cash flow. The third quarter results were consistent with the ~~Company's~~first ~~operations~~part of the fiscal year related to growth in all three areas. Net ~~The~~sales ~~effect~~growth in the area of ~~inflation~~water onquality ~~our~~continues ~~costs~~to ~~and~~be ~~our~~adversely ~~ability~~affected toby ~~pass~~global economic and political conditions. In addition, the reduced sales growth rate of liquid chromatography products focused on ~~cost~~drug discovery ~~increases~~applications that began late in the ~~form~~second ofquarter ~~increased~~continued throughout ~~prices~~the isthird ~~dependent~~quarter due to continued pressure upon ~~market~~pharmaceutical firms ~~conditions~~to reduce spending and increase profits. At this time, we anticipate that all these negative conditions will continue into the ~~competitive~~last ~~environment.~~quarter of the current fiscal year and into next fiscal year.

Our net income continues to be negatively impacted by lower than expected net sales growth coupled with our commitment to ~~Item~~ incur 3expenses related to building and maintaining marketing and sales infrastructure to capitalize on market and technology opportunities in process monitoring, SWIFT media and instruments, and drug discovery applications of liquid chromatography. ~~QUANTITATIVE~~ We ~~AND~~believe ~~QUALITATIVE~~our continued ~~DISCLOSURES~~commitment ~~ABOUT~~to ~~MARKET~~these ~~RISK~~ investments can deliver long-term value for our shareholders, as opposed to reducing our commitment to strive for a year-over-year increase in net income.

~~The~~Our ~~information~~cash ~~required~~flows continue to be impacted by ~~this~~a lower ~~item~~net issales ~~included~~growth inrate and reduced operating income along with the negative ~~section~~impact ~~entitled~~from ~~"Market~~our ~~Risk"~~return into ~~Part I,~~remitting ~~Item~~income 2,taxes. Cash ~~Management's~~flows ~~Discussion~~in ~~and~~the ~~Analysis~~prior oftwo ~~Results~~fiscal years benefited from the utilization of ~~Operations~~net ~~and~~operating ~~Financial~~losses ~~Condition~~carry forwards. While we are committed to improving our working capital management, we do not believe these improvements will offset the effect of the above items.

~~Item 4. CONTROLS AND PROCEDURES~~ 14

As requiredMarket by Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), within the 90 days prior to the filing date of this report, the Company carried out an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer along with the Company's Chief Financial Officer. Based upon that evaluation, the Chief Executive Officer along with the Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in reports that it files or submits Risk

13Interest rate risk and currency exchange risks are the primary market risks to which we are exposed. We do not use derivative financial or commodity instruments. Our other financial instruments include cash and cash equivalents, accounts and notes receivable, accounts and notes payable and long-term debt. Our cash and cash equivalents, accounts and notes receivable, and accounts and notes payable balances are generally short-term in nature and do not expose our company to material market risk. At April 25, 2003, we had approximately $1.3 million of fixed rate debt. In addition, we had $7.0 million of variable rate credit facilities, of which approximately $2.0 million was outstanding under these credit facilities. We do not believe that changes in interest rates on the debt and credit facilities would have a material effect on our results of operations, given our current obligations under these debt and credit facilities.

Related to currency exchange, international ~~under~~ sales ~~the~~of ~~Exchange~~our ~~Act~~United isStates ~~recorded,~~based ~~processed,~~operations ~~summarized~~are denominated in U.S. dollars and international ~~reported~~sales ~~with~~of ~~the~~our ~~time~~German ~~periods~~subsidiary ~~specified~~are denominated in ~~Securities~~Euros. The currency exchange risk at the current level of activity is not material to our operating results or financial position. Our market risk resulting from the translation of the profit and ~~Exchange~~loss ~~Commission~~of ~~rules~~STIP and ~~forms.~~from our permanent investment in our foreign subsidiaries is not material.

There ~~are~~ have been no ~~significant~~material changes in during the ~~Company's~~first ~~internal~~nine ~~controls~~months ~~or,~~of fiscal 2003 with respect to the Company'’s ~~knowledge,~~contractual obligations. Details inof ~~other~~the ~~factors~~Company’s contractual ~~that~~obligations ~~could~~can ~~significantly~~be ~~affect~~found ~~such~~in ~~internal~~the ~~controls~~Management’s ~~subsequent~~Discussion toand Analysis ~~the~~ of ~~date~~Results of Operations and Financial Condition section of the Company'’s fiscal ~~evaluation~~2002 ofAnnual ~~its~~Report ~~internal~~on ~~controls.~~Form 10-K.

14Inflation

Inflation has not had, and is not expected to have, a material impact upon the Company’s operations. The effect of inflation on our costs and our ~~PART~~ ability ~~II—OTHER~~to ~~INFORMATION~~ pass on cost increases in the form of increased prices is dependent upon market conditions and the competitive environment.

Item 3. ~~Legal~~ ~~Proceedings~~ QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The ~~Company~~information ~~continues~~required ~~its activities related to its SWIFT column products and to the filed lawsuits~~ by ~~and against Cornell Research Foundation, Inc.~~ ~~("Cornell")~~ this ~~All~~item ~~legal~~is ~~actions~~included ~~are~~ in ~~their~~the ~~preliminary~~section ~~stages.~~entitled ~~The~~“Market ~~Company~~Risk” ~~intends~~in toPart ~~pursue~~I, ~~these~~Item ~~matters very vigorously and believes that it will prevail whether through court action or through any~~2, ~~court-ordered or party-agreed-to arbitration. Details on these lawsuits can be found in Isco'~~ Management’s ~~annual~~Discussion ~~report~~and onAnalysis ~~Form 10-K~~of ~~for~~Results ~~fiscal~~of ~~year~~Operations ~~2002~~and ~~under Part I, Item~~Financial ~~3, Legal Proceedings~~ Condition.

Item 64. ~~Exhibits~~ CONTROLS ~~and~~AND ~~Reports on Form 8-K~~ PROCEDURES

~~Exhibit~~(a) ~~99.1~~Evaluation ~~Certification~~ of ~~Chief~~disclosure controls ~~Executive Officer~~ and ~~Chief Financial Officer Pursuant to 18 U~~procedures.~~S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.~~

As required by Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), within the 90 days prior to the filing date of this report, the Company carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer along with the Company’s Chief Financial Officer. Based upon that evaluation, the Chief Executive Officer along with the Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported with the time periods specified in Securities and Exchange Commission rules and forms.

(b) Changes ~~SIGNATURES~~ in Internal Control.

~~Pursuant~~There toare ~~the~~no ~~requirements~~significant changes ofin the ~~Securities~~Company’s ~~Exchange~~internal ~~Act~~controls ~~of 1934~~or, to the ~~registrant~~Company’s ~~has~~knowledge, ~~duly~~in other ~~caused~~factors ~~this~~that ~~report~~could tosignificantly beaffect ~~signed~~such oninternal ~~its~~controls ~~behalf~~subsequent to bythe date of the ~~undersigned thereunto~~Company’s ~~duly~~evaluation ~~authorized.~~of its internal controls.

	ISCO, INC.
Date: December 6, 2002	By:	/s/ ROBERT W. ALLINGTON Robert W. Allington Chairman and Chief Executive Officer
Date: December 6, 2002	By:	/s/ VICKI L. BENNE Vicki L. Benne Chief Financial Officer and Treasurer

PART II - OTHER INFORMATION

16Item 3. Legal Proceedings

~~CERTIFICATIONS~~ The Company continues its activities related to its SWIFT column products and to the filed lawsuits by and against Cornell Research Foundation, Inc. The final hearing related to the scope of the Company’s license was held in early April and post hearing and reply briefs were filed in May. A decision on the scope of Isco’s license is expected in June. All other legal actions remain in their preliminary stages. The Company intends to pursue these matters vigorously and believes that it will prevail whether through court action or through any court-ordered or party-agreed-to arbitration. Details on these lawsuits can be found in Isco’s annual report on Form 10-K for fiscal year 2002 under Part I, Item 3, Legal Proceedings.

~~Pursuant~~The toCompany ~~Section 302~~began ofselling the new SWIFT columns late in the ~~Sarbanes-Oxley~~fourth ~~Act~~quarter of fiscal 2002. At ~~(Public~~this ~~Law Number107-204)~~time, the ~~Chief~~revenues ~~Executive~~from ~~Officer~~SWIFT columns are not material to the overall revenues of the Company. The ~~certifies~~Company continues to invest in ~~that:~~ infrastructure to build and expand this business. Details on the Company’s investments in this area can be found in Isco’s annual report on Form 10-K for fiscal year 2002 under the section entitled “Factors Affecting Future Results” in Part I, Item 2, Management’s Discussion and Analysis of Results of Operations and Financial Condition.

~~By: /s/ ROBERT W. ALLINGTON Robert W. Allington Chief Executive Officer~~16

17Item 6. Exhibits and Reports on Form 8-K

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Public Law Number107-204), the Chief Financial Officer of the Company certifies that:

(a)	Exhibits;
Exhibit 99.1			Certification of Chief Executive Officer and Chief Financial Officer 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: The Company furnished a Current Report on Form 8-K dated June 5, 2003, announcing earnings for the quarter ended April 25, 2003 and attaching a press release related thereto

~~By: /s/ VICKI L. BENNE Vicki L. Benne Chief Financial Officer & Treasurer~~SIGNATURES

18Pursuant 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.

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	ISCO, INC.


Date: June 4, 2003	BY	/s/ Robert W. Allington
			Robert W. Allington
			Chairman and Chief Executive Officer

Date: June 4, 2003	BY	/s/ Vicki L. Benne
			Vicki L. Benne
			Chief Financial Officer and Treasurer

CERTIFICATIONS

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Public Law Number107-204), the Chief Executive Officer of the Company certifies that:

1) I have reviewed the report;

2) Based upon my knowledge, this report does not contain any untrue statement of a material fact, or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3) Based upon my knowledge, the financial statements and other financial information included in this report fairly present in all material respects the financial condition, results of operations, and cash flows of the Company as of, and for, the period presented in this report;

4) The Company’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 Company and have:

a) designed such disclosure controls and procedures to ensure that material information relating to the Company and its consolidated subsidiaries is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) evaluated the effectiveness of the Company’s disclosure controls and procedures within 90 days prior to the filing date of this report (the “Evaluation Date”);

c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5) The Company’s other certifying officers and I have disclosed, based on our most recent evaluation, to the Company’s auditors and the audit committee of the Company board of directors (or persons performing equivalent functions):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the Company’s ability to record, process, summarize, and report financial data and have identified for the Company’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 Company’s internal controls; and

6) The Company’s other certifying officers have indicated in this 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.

By: /s/ Robert W. Allington
Robert W. Allington		Date: June 5, 2003
Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Public Law Number107-204), the Chief Financial Officer of the Company certifies that:

1) I have reviewed the report;

b) evaluated the effectiveness of the Company’s disclosure controls and procedures within 90 days prior to the filing date of this report (the “Evaluation Date”);

c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls; and

By: /s/ Vicki L. Benne
Vicki L. Benne		Date: June 5, 2003
Chief Financial Officer & Treasurer

PART I. FINANCIAL INFORMATION

PART II. OTHER INFORMATION

SIGNATURES

CERTIFICATIONS

PART II - OTHER INFORMATION

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