<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[x] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended September 30, 1998
[ ] Transition Report Pursuant to Section 13 of 15(d) of the
Securities Exchange Act of 1934
Commission file number 0-5667
Seal Holdings Corporation
(Exact name of registrant as specified in its charter)
Delaware 64-0769296
(State of Incorporation) (IRS Employer ID No.)
125 Worth Avenue, Suite 314, Palm Beach, Florida 33480
(Address of principal executive offices) (Zip Code)
(561) 833-5111
(issuer's telephone number)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the
preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes (X) No ( )
Class A common stock, par value $.20 per share, 1,193,601 shares
outstanding as of November 10, 1998
Class B common stock, par value $.20 per share, 25,000 shares
outstanding as of November 10, 1998
Transitional Small Business Disclosure Format (Check one):
Yes ( ) No (X)
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INDEX
Page
PART I. FINANCIAL INFORMATION
Consolidated Balance Sheets 3
Consolidated Statements of Operations 5
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 7
Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 9
Item 4. Results of Votes of Security Holders 9
Item 6. Exhibits and reports on Form 8-K 9
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
SEAL HOLDINGS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
September 30, December 31,
1998 1997
(Unaudited) (Audited)
----------- -----------
ASSETS
Current Assets:
Cash, includes $960 of cash $ 258 $ 1,037
equivalents at December 31, 1997
Other receivables 5 8
Prepaid Expenses 20 7
Net assets of discontinued operations (3) 64
-------- --------
Total current assets 280 1,116
Furniture and Equipment
Furniture and equipment 126 118
Less accumulated depreciation (72) (61)
-------- --------
Furniture and equipment, net 54 57
Other Assets
Other assets 25 16
-------- --------
TOTAL ASSETS $ 359 $ 1,189
======== ========
See notes to consolidated financial statements.
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SEAL HOLDINGS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
September 30, December 31,
1998 1997
(Unaudited) (Audited)
----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Trade accounts payable and
accrued expenses $ 159 $ 304
Other current liabilities 15 15
-------- -------
Total current liabilities 174 319
-------- --------
TOTAL LIABILITIES 174 319
Shareholders' Equity
Preferred Stock, $.001 par value;
3,000,000 shares authorized; no
shares issued or outstanding.
Class A common stock, $.20 par
value; 14,975,000 shares
authorized and 1,193,601 shares
issued and outstanding at September
30, 1998 and December 31, 1997. 267 267
Class B common stock, $.20 par
value; 25,000 shares authorized,
issued and outstanding at September
30, 1998 and December 31, 1997. 5 5
Additional paid-in capital 4,571 4,571
Retained deficit (4,443) (3,758)
Treasury stock, at cost, 117,522
shares at September 30, 1998 and
December 31, 1997 (95) (95)
Note receivable - shareholder (120) (120)
-------- --------
Total Shareholders' Equity 185 870
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 359 $ 1,189
======== ========
See notes to consolidated financial statements.
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SEAL HOLDINGS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands, except Per Share Amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- ----------------
1998 1997 1998 1997
------ ------ ------ ------
Revenue
Miscellaneous Income (Monsanto) $ 315 $ 0 $ 315 $ 0
Interest and dividend income 3 27 17 83
Expenses
Salaries and benefits 123 62 395 140
General and administrative 119 ( 3) 313 271
Professional fees 90 29 308 181
------ ------ ------ ------
Loss from continuing operations ( 14) ( 61) (684) (509)
Discontinued operations (Note B) - - - -
Net gain (loss) from discontinued
operations - - - -
------ ------ ------ ------
Net loss $ ( 14) $ ( 61) $ (684) $ (509)
------ ------ ------ ------
Net income (loss) per share - basic
and dilutive:
From continuing operations $ (.01) $ (.05) $ (.56) $ (.42)
From discontinued operations - - - -
From extraordinary item - - - -
------ ------ ------ ------
$ (.01) $ (.05) $ (.56) $ (.42)
See notes to consolidated financial statements.
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SEAL HOLDINGS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
Nine Months Ended
September 30,
1998 1997
------ ------
Operating Activities:
Net income (loss) from continuing operations $ (684) $ (509)
Net income (loss) from discontinued operations - -
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization 10 5
Changes in operating assets and liabilities
Accounts and notes receivable - ( 80)
Other assets (27) (178)
Accounts payable - trade (145) 24
Changes in net assets of discontinued
operations 67 86
------ ------
Net cash provided (required) by operating
activities (779) (652)
INVESTING ACTIVITIES
Purchase of property and equipment - (52)
------ ------
Net cash provided (required) by investing
activities - (52)
FINANCING ACTIVITIES
Purchase of treasury stock - (44)
------ ------
Net cash required by financing activities - (44)
DECREASE IN CASH AND CASH EQUIVALENTS (779) (748)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 1,037 2,437
------ ------
CASH AND CASH EQUIVALENTS AT SEPTEMBER 30, 1998
AND 1997 $ 258 $1,689
======= ======
See notes to consolidated financial statements.
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SEAL HOLDINGS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A -- Basis of Presentation
The accompanying unaudited consolidated financial statements have
been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions
to Form 10-Q and Article 10 of Regulation S-B. Accordingly, they do
not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In
the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have
been included. All data in the financial statements is in thousands
of dollars except share quantities and per-share amounts.
These financial statements, footnotes and discussions should be read in
conjunction with audited financial statements and related footnotes in the
Seal Holdings Corporation annual report on Form 10-K for the year ended
December 31, 1997 filed with the Securities and Exchange Commission.
Operating results for the nine month period ended September 30,1998 are not
necessarily indicative of the results that may be expected for the
year ending December 31, 1998.
NOTE B -- Discontinued operations relates to the Company's prior principal
business of owning and operating offshore supply vessels.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
The Company, through its wholly-owned subsidiary, Primary Care Medical
Centers of America, Inc. ("PCMC") continued to develop its business plan
within the healthcare industry as more fully described on Form 10-KSB dated
March 31, 1998, and on Form 8-K dated June 2, 1998.
On Form 8-K filed November 6, 1998, and in a press release of the same date,
Seal announced that on October 30, 1998, the Company had combined its
physician practice management business with that of Camber Companies, LLC,
a Delaware limited liability company with a majority interest held by
Kohlberg & Company, a private investment firm based in Mt. Kisco, New York.
As a result of the transaction, Seal received 694,680 Class A Units and
72,363 Class B Units, or 767,043 total Units in Camber valued at $2.50 per
Unit for a total investment of $1,917,608. Monsanto Company, which had
joined Seal in a Joint Development Agreement as of June 1, 1998, also
received interest in Camber. For its part, Kohlberg will contribute to
Camber in excess of $20 million, or such other amount that is required to
fund Camber's capital needs following the combination with PCMC, as suggested
by a joint Camber and PCMC business plan.
Seal's Chairman, Thomas M. Ferguson, will serve as a Director of Camber.
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There can be no assurance that the Company's investment in Camber will
result in successful implementation of the PCMC business plan or that Camber
will be successful in operating any business which it may develop.
RESULTS OF THE QUARTER AND YEAR-TO-DATE ENDED SEPTEMBER 30, 1998
The major elements of expense, offset by contributions from Monsanto under
the Joint Development Agreement and interest income from short-term
investments, reflected in the net loss for the quarter and year-to-date
of $14 and $684 respectively, are as follows:
QTR YTD
------ ------
Salaries and Benefits $ 123 $ 395
Contract Labor 47 115
Legal and Audit 43 193
Business Travel & Entertainment 38 86
Shareholder Relations 7 27
Office Rent and Supplies 20 58
Other 50 138
------ ------
Sub-Total $ 328 $1,012
Income from Operations:
Miscellaneous Revenue - from
Monsanto Company 315 315
Income from Operations - 6
Interest and Dividend Income 3 17
Other Non-operating Items (4) (10)
------ ------
Net Loss $ ( 14) $ (684)
There was no impact on earnings from discontinued operations in that the
allowance for discontinued operations, originally set up at December 31,
1996, continues to cover any expected impact of discontinued operations.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not party to any material pending legal proceeding other
than ordinary routine litigation incidental to the discontinued
business.
Item 4. Results of Votes of Security Holders
None
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
27 Financial Data Statement
(b) Reports on Form 8-K.
None for the Period. Subsequent to September 30, 1998, the Company
filed one report on Form 8-K, more fully described under "Overview"
above.
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.
SEAL HOLDINGS CORPORATION (Registrant)
Date: November 13, 1998 By /s/ James S. Goodner
- - - - - - - - - - - - - -
James S. Goodner
Vice President and
Chief Financial Officer
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EXHIBIT INDEX
Exhibit Description
- -------- -----------
27 Financial Data Schedule
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<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 258
<SECURITIES> 0
<RECEIVABLES> 6
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 280
<PP&E> 126
<DEPRECIATION> (72)
<TOTAL-ASSETS> 359
<CURRENT-LIABILITIES> 174
<BONDS> 0
<COMMON> 185
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 359
<SALES> 0
<TOTAL-REVENUES> 332
<CGS> 0
<TOTAL-COSTS> 1,012
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (684)
<INCOME-TAX> 0
<INCOME-CONTINUING> (684)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (684)
<EPS-PRIMARY> (.56)
<EPS-DILUTED> (.56)
</TABLE>
