CPS TECHNOLOGIES CORP/DE/ — Interim / Quarterly Report 2004

Aug 6, 2004

10-Q 1 q20410q.htm UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q

(Mark One) [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the period ended June 26, 2004 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 0-16088

CERAMICS PROCESS SYSTEMS CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Delaware (State or Other Jurisdiction of Incorporation or Organization	04-2832409 (I.R.S. Employer Identification No.)
111 South Worcester Street P.O. Box 338 Chartley MA (Address of principal executive offices)	02712-0338 (Zip Code)

(508) 222-0614

Registrants 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 (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period than the registrant was required to file such reports), and (2) has been subject to the filing requirements for the past 90 days. [X] Yes [ ] No

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date. Number of shares of common stock outstanding as of June 26, 2004: 12,293,209.

PART I FINANCIAL INFORMATION ITEM 1 FINANCIAL STATEMENTS (Unaudited) CERAMICS PROCESS SYSTEMS CORPORATION Consolidated Balance Sheets (Unaudited) (continued on next page)

	June 26,	December 27,
	2004	2003
	(unaudited)
ASSETS	-------------	-------------
Current assets:
Cash and cash equivalents	$ 363,023	$ 189,533
Accounts receivable-trade, net of allowance
for doubtful accounts of $1,100 as of
June 26, 2004 and December 27, 2003	783,373	659,318
Inventories	403,191	347,695
Prepaid expenses	41,919	45,184
	-------------	-------------
Total current assets	1,591,506	1,241,730
Property and equipment:
Production equipment	2,781,410	2,613,235
Furniture and office equipment	200,852	197,311
Accumulated depreciation	(2,279,182)	(2,135,095)
and amortization	--------------	--------------
Property and equipment, net	703,080	675,451
	-------------	-------------
Total assets	$ 2,294,586	$ 1,917,181
	=============	=============

See accompanying notes to consolidated financial statements.

CERAMICS PROCESS SYSTEMS CORPORATION Consolidated Balance Sheets (Unaudited) (continued)

	June 26,	December 27,
LIABILITIES AND STOCKHOLDERS'	2004	2003*
EQUITY	(unaudited)
	-------------	-------------
Current liabilities:
Accounts payable	$ 222,528	$ 173,302
Accrued expenses	180,438	115,792
Current portion of obligations
under capital leases	96,492	96,649
	-------------	-------------
Total current liabilities	499,458	385,743
Deferred revenue	133,884	133,884
Obligations under capital
Leases, less current portion	149,057	195,794
	-------------	-------------
Total liabilities	782,399	715,421
	-------------	-------------
Stockholders' equity:
Common stock, $0.01 par value,
authorized 15,000,000 shares;
issued 12,316,092 shares
at June 26, 2004 and December 27, 2003	123,161	123,161
Additional paid-in capital	32,657,584	32,657,584
Accumulated deficit	(31,207,723)	(31,518,150)
Less treasury stock, at cost,
22,883 common shares	(60,835)	(60,835)
	-------------	-------------
Total stockholders' equity	1,512,187	1,201,760
	-------------	=============
Total liabilities and stockholders'
equity	$ 2,294,586	$ 1,917,181
	=============	=============

*The balance sheet at December 27, 2003 has been derived from the audited consolidated financial statements at that date.

See accompanying notes to consolidated financial statements.

CERAMICS PROCESS SYSTEMS CORPORATION Consolidated Statements of Operations (Unaudited)

	Fiscal Quarters Ended — June 26,	June 28,	Six month Periods Ended — June 26,	June 28,
	2004	2003	2004	2003
	------------	------------	------------	------------
Product sales	$ 1,417,219	$ 1,106,713	$ 3,081,609	$ 1,702,178
	=======	=======	=======	=======
Operating expenses:
Cost of product sales	973,663	823,659	2,204,018	1,429,824
Selling, general, and
administrative	293,807	244,929	550,442	429,809
	------------	------------	------------	------------
Total operating expenses	1,267,470	1,068,588	2,754,460	1,859,633
	------------	------------	------------	------------
Operating income (loss)	149,749	38,125	327,149	(157,455)
Other expenses, net	(8,011)	(9,106)	(16,722)	(19,762)
	------------	------------	------------	------------
Net income (loss)	$ 141,738	$ 29,019	$ 310,427	$ (177,217)
	=======	=======	=======	=======
Net income (loss) per
basic common share	$ 0.01	$ -	$ 0.03	$ (0.01)
	------------	------------	------------	------------
Weighted average number of
basic common shares
outstanding	12,293,209	12,293,209	12,293,209	12,293,209
	========	========	========	========
Net income (loss) per
diluted common share	$ 0.01	$ -	$ 0.02	$ (0.01)
	------------	------------	------------	------------
Weighted average number of
diluted common shares
outstanding	12,723,096	12,484,200	12,723,389	12,293,209
	========	========	========	========

See accompanying notes to consolidated financial statements.

CERAMICS PROCESS SYSTEMS CORPORATION Consolidated Statements of Cash Flows (Unaudited)

	Six-Month Period Ended — June 26,	June 28,
	2004	2003
	---------	---------
Cash flows from operating activities:
Net income (loss)	$ 310,427	$ (177,217)
Adjustments to reconcile net income
(loss) to cash provided by (used in)
used in operating activities:
Depreciation & amortization	147,845	199,608
Gain on sale of property and
equipment	(158)	0
Changes in assets and liabilities:
Accounts receivable - trade	(124,056)	(191,926)
Inventories	(55,496)	18,165
Prepaid expenses	3,265	(29,547)
Accounts payable	49,226	60,625
Accrued expenses	64,646	7,050
	---------	---------
Net cash provided (used) by	$ 395,699	$ (113,242)
operating activities
	---------	---------
Cash flows from investing activities:
Additions to property and equipment	(177,816)	0
Proceeds from sale of property and equipment	2,500	0
	---------	---------
Net cash used in investing
activities	(175,316)	0
	---------	---------
Cash flows from financing activities:
Payment of capital lease obligations	(46,893)	(25,859)
Proceeds from note payable-related party	0	40,000
	---------	---------
Net cash provided (used) by
financing activities	$ (46,893)	$ 14,141
	---------	---------
Net increase (decrease) in cash and cash equivalents	173,490	(99,101)
Cash and cash equivalents at beginning of period	189,533	150,772
	---------	---------
Cash and cash equivalents at end of period	$ 363,023	$ 51,671
	=========	=========

See accompanying notes to consolidated financial statements.

CERAMICS PROCESS SYSTEMS CORPORATION Notes to Consolidated Financial Statement (Unaudited)

(1) Nature of Business

Ceramics Process Systems Corporation (the Company or CPS) serves the wireless communications infrastructure market, high-performance microprocessor market, motor controller market, and other microelectronic markets by developing, manufacturing, and marketing advanced metal-matrix composite components to house, interconnect and thermally manage microelectronic devices. The Company`s products are typically in the form of housings, packages, lids, substrates, thermal planes, or heat sinks, and are used in applications where thermal management and/or weight are important considerations.

The Companys products are manufactured by proprietary processes the Company has developed including the QuicksetTM Injection Molding Process (Quickset Process) and the QuickCastTM Pressure Infiltration Process (QuickCast Process`).

The Company was incorporated on June 19, 1984. The Company continues to sell to a limited number of customers and the loss of any one of these customers could cause the Company to require external financing. Failure to generate sufficient revenues, raise additional capital or reduce certain discretionary spending could have a material adverse effect on the Company`s ability to achieve its business objectives.

(2) Interim Consolidated Financial Statements

As permitted by the rules of the Securities and Exchange Commission applicable to quarterly reports on Form 10-Q, these notes are condensed and do not contain all disclosures required by accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements for the fiscal quarters ended June 26, 2004 and June 28, 2003 are unaudited. In the opinion of management, the unaudited consolidated financial statements of CPS reflect all adjustments necessary to present fairly the financial position and results of operations for such periods.

The Company`s consolidated balance sheet at December 27, 2003 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.

For further information, refer to the consolidated financial statements and footnotes thereto included in the Registrant`s Annual Report on Form 10-K for the year ended December 27, 2003.

The consolidated financial statements include the accounts of CPS and its wholly-owned subsidiary, CPS Superconductor Corporation. All significant intercompany balances and transactions have been eliminated. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.

(3) Net Income (Loss) Per Common and Common Equivalent Share

Basic EPS excludes the effect of any dilutive options, warrants or convertible securities and is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. Diluted EPS is computed by dividing net income (loss) by the sum of the weighted average number of common shares and common share equivalents computed using the average market price for the period under the treasury stock method requirements.

The following table presents the calculation of both basic and diluted EPS:

	June 26,	Quarters Ended — June 28,	Six-Month Periods Ended — June 26,	June 28,
	2004	2003	2004	2003
	------------	------------	------------	------------
Basic EPS Computation:
Numerator:
Net income (loss)	$ 141,738	$ 29,019	$ 310,427	$ (177,217)
Denominator:
Weighted average
common shares
outstanding	12,293,209	12,293,209	12,293,209	12,293,209
Basic EPS	$ 0.01	$ -	$ 0.03	$ (0.01)
Diluted EPS Computation:
Numerator:
Net income(loss)	141,738	29,019	310,427	(177,217)
Denominator:
Weighted average
common shares
outstanding	12,293,209	12,293,209	12,293,209	12,293,209
Stock options	429,887	191,862	430,180	-
Total Shares	12,723,096	12,484,200	12,723,389	12,293,209
Diluted EPS	$ 0.01	$ -	$ 0.02	$ (0.01)

Options to purchase 1,156,113 shares of common stock at a weighted-average price of $0.57 were outstanding at June 26, 2004. Options to purchase 1,214,613 shares of common stock at a weighted-average price of $0.57 were outstanding at June 28, 2003. The Company incurred a net loss for the six months ended June 28, 2003, therefore stock options were not used to compute diluted loss per share since the effect would have been antidilutive.

The Company accounts for its stock-based compensation plans under Accounting Principles Board (APB) Opinion No. 25, "Accounting for Stock Issued to Employees". Accordingly, no stock-based employee compensation cost is reflected in net income as all options granted had an exercise price equal to or greater than the market value of the underlying common stock on the date of grant. In accordance with SFAS No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure," the following table illustrates the effect on net income and earnings per share as if the Company had applied the fair value recognition provisions of SFAS No. 123, "Accounting for Stock-based Compensation," to stock-based employee compensation for the fiscal quarter ended June 26, 2004:

Net income, as reported	$ 141,738
Deduct: Total stock-based employee compensation
expense determined under fair value method for rewards	26,500
	--------------
Proforma net income	$ 115,238
	========
Earnings per share:
Basic and diluted - as reported	$ 0.01
Basic and diluted - pro forma	$ 0.01
	========

(4) Inventories

Inventories consist of the following:

	June 26,	December 27,
	2004	2003
	-------------	-------------
Raw materials	$ 12,714	$ 23,413
Work in process	135,202	136,124
Finished goods	265,275	198,158
	-------------	-------------
Subtotal	$ 413,191	$ 357,695
Reserve for obsolete
inventories	(10,000)	(10,000)
	-------------	-------------
Inventories, net	$ 403,191	$ 347,695
	=============	=============

(5) Accrued Expenses

Accrued expenses consist of the following:

	June 26,	December 27,
	2004	2003
	-------------	-------------
Accrued payroll and payroll taxes	$ 137,143	$ 75,815
Accrued legal and accounting	21,825	38,725
Accrued other	21,470	1,252
	-------------	-------------
	$ 180,438	$ 115,792
	=============	=============

In March 2003, the President of the Company executed a line-of-credit agreement with the Company. Such agreement provides for maximum available borrowings of $200,000, with interest on any outstanding borrowings payable monthly at 1.5% above the prime rate, as published in the Wall Street Journal. The note is collateralized by a security interest in the Company`s accounts receivable, and such note expires on February 1, 2005, at which time all unpaid principal and accrued interest is due. There have been no borrowings under such note in fiscal 2004, and there are no borrowings outstanding under the note as of June 26, 2004.

ITEM 2 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of financial condition and results of operations is based upon and should be read in conjunction with the consolidated financial statements of the Company and notes thereto included in this report and the Company`s Annual Report on Form 10-K for the year ended December 27, 2003.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements that involve a number of risks and uncertainties. There are a number of factors that could cause the Company`s actual results to differ materially from those forecasted or projected in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date hereof. The Company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements which may be made to reflect events or changed circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Critical Accounting Policies

The critical accounting policies utilized by the Company in preparation of the accompanying consolidated financial statements are set forth in Part I, Item 7 of the Companys Annual Report on Form 10-K for the year ended December 27, 2003, under the heading "Managements Discussion and Analysis of Financial Condition and Results of Operations". There have been no material changes to these policies since December 27, 2003.

Results of Operations for Second Fiscal Quarter of 2004 (Q2 2004) Compared to the Second Fiscal Quarter of 2003 (Q2 2003)

Total revenue was $1,417 thousand in Q2 2004, a 28% increase from total revenue of $1,107 thousand in Q2 2003. The increase in revenues came both from higher demand for existing products and higher demand for new products. The largest increase in demand was for lids and heatspreaders for application-specific integrated circuits.

Total operating expenses in Q2 2004 were $1,267 thousand, a 19% increase from total operating expenses in Q2 2003 of $1,069 thousand. Cost of product sales in Q2 2004 were $974 thousand, an increase of 18% from cost of product sales in Q2 2003 of $824 thousand. Cost of product sales increased as a result of increased shipments. Gross profit on product sales in Q2 2004 was 31% compared to gross profit on products sales in Q2 2003 of 26%. This increase in gross profit is primarily the result of fixed costs being spread over a larger shipment volume.

Selling, general and administrative (SG&A) expenses were $294 thousand in Q2 2004, a 20% increase from SG&A expenses of $244 thousand in Q2 2003. The increase in SG&A expenses is primarily the result of higher commissions paid to sales representatives and higher salary expenses resulting from salary adjustments.

Results of Operations for First Six Months 2004 Compared to First Six Months of 2003

Total revenue was $3,082 thousand in the first six months of 2004, an 81% increase from total revenue of $1,702 thousand in the first six months of 2003. The increase in revenues came both from higher demand for existing products and higher demand for new products. The largest increase in demand was for lids and heatspreaders for application-specific integrated circuits.

Total operating expenses in the first six months of 2004 were $2,754 thousand, a 48% increase from total operating expenses of $1,430 thousand in the first six months of 2003. Cost of product sales in the first six months of 2004 were $2,204 thousand, a 42% increase from cost of product sales in the first six months of 2003 of $1,430 thousand. Cost of product sales increased as a result of increased shipments. Gross profit on product sales in the first six months of 2004 was 28% compared to gross profit on product sales in the first six months of 2003 of 16%. This increase in gross profit is primarily the result fixed costs being spread over a larger shipment volume.

Selling, general and administrative (SG&A) expenses were $550 thousand in the first six months of 2004, a 42% increase from SG&A expenses in the first six months of 2003 of $430 thousand. The increase in SG&A expenses is the result of higher commissions paid to the sales representatives and higher salary expenses resulting from salary adjustments.

Liquidity and Capital Resources

The Company`s cash balance and cash equivalents at June 26, 2004 was $363 thousand compared to cash balance and cash equivalents at December 27, 2003 of $190 thousand, an increase of $173 thousand or 92%. This increase is primarily the result of positive cash flows generated from operations during the first six months of 2004 of approximately $396 thousand. There were approximately $178 thousand of fixed asset additions that were funded by cash generated from operations and approximately $47 thousand was used to pay down existing capital lease obligations.

Accounts receivable increased to $783 thousand at June 26, 2004 from $659 thousand at December 27, 2003. This change reflects differences in timing of shipments in Q2 2004 compared to Q4 2003. The accounts receivable balance at June 26, 2004 and December 27, 2003 is net of allowance for doubtful accounts of $1 thousand.

Inventories increased to $403 thousand at June 26, 2004 from $348 thousand at December 27, 2003; this increase is primarily the result of a large customer implementing a consigned inventory system during Q2 2004, as well as the fact that increased inventory levels are required to meet the future demand of customers.

The Company financed its working capital during Q2 2004 with existing cash balances, and funds generated by operations. The Company expects it will continue to be able to fund its working capital requirements for the remainder of 2004 from these same sources.

The Company continues to sell to a limited number of customers and the loss of any one of these customers could cause the Company to require additional external financing. Failure to generate sufficient revenues, raise additional capital or reduce certain discretionary spending could have a material adverse effect on the Company`s ability to achieve its business objectives.

Contractual Obligations

As of June 26, 2004, there have been no significant changes in the Company`s contractual obligations, consisting principally of various operating and capital leases, as disclosed at December 27, 2003.

ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is not significantly exposed to the impact of interest rate changes and foreign currency fluctuations. The Company has not used derivative financial instruments.

ITEM 4 CONTROLS AND PROCEDURES

(a) The Companys Chief Executive Officer and Principal Financial Officer have evaluated the effectiveness of the Companys disclosure controls and procedures (as such term is defined in Rules 13a-14(c) and 15d - 14(c) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"). Based on such evaluation, such officer has concluded that, as of the Evaluation Date, the Companys disclosure controls and procedures are effective in alerting them, on a timely basis, to material information relating to the Company (included its consolidated subsidiary) required to be included in the Companys periodic filings under the Exchange Act.

(b) Changes in Internal Controls. Since the evaluation date, there have not been any significant changes in the Company`s internal controls or in other factors that could significantly affect such controls.

PART II OTHER INFORMATION

ITEM 1 LEGAL PROCEEDINGS

None.

ITEM 2 CHANGES IN SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES FO EQUITY SECURITIES.

None.

ITEM 3 DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.

ITEM 5 OTHER INFORMATION

Not applicable.

ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K: (a) Exhibits: None

1. Reports on Form 8-K

On August 6, 2004, the Company filed a report on Form 8-K relating to the announcement of its financial results for the fiscal quarter ended June 26, 2004, as presented in a press release dated August 6, 2004.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Ceramics Process Systems Corporation (Registrant)

Date: August 6, 2004 /s/ Grant C. Bennett Grant C. Bennett President

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Grant C. Bennett, certify that:

1. I have reviewed this quarterly report on Form 10-Q;
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 consolidated financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4. The registrant`s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation (the "Evaluation Date"); and

c) Disclosed in this quarterly report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter that has materially affected or is reasonably like to materially affect, the registrant`s internal control over financial reporting; and

1. The registrants other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrant`s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant`s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant`s internal control over financial reporting.

Date: August 6, 2004 /s/ Grant C. Bennett Grant C. Bennett Treasurer

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Grant C. Bennett, certify that:

1. I have reviewed this quarterly report on Form 10-Q;
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 consolidated financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4. The registrant`s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation (the "Evaluation Date"); and

c) Disclosed in this quarterly report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter that has materially affected or is reasonably like to materially affect, the registrant`s internal control over financial reporting; and

1. The registrants other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrant`s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant`s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant`s internal control over financial reporting.

Date: August 6, 2004 /s/ Grant C. Bennett Grant C. Bennett President and Treasurer

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Ceramics Process Systems Corporation (the "Company") on Form 10-Q for the three and six month periods ended June 26, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Grant C. Bennett, President and Treasurer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 6, 2004 /s/ Grant C. Bennett Grant C. Bennett President and Treasurer