United States Securities and Exchange Commission
Washington, D.C. 20549
Form 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the Quarterly Period Ended September 30, 1999.
Or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Commission File Number 000-23851
CENTENARY INTERNATIONAL CORP
(formerly, R&R Resources, Inc.)
(Exact name of registrant as specified in its charter)
Nevada 86-0874841
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
692 Madison Avenue, Third Floor, New York, NY 10021
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 644-2113
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 of 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Applicable Only to Corporate Issuers
As of November 30, 1999, there were outstanding 19,356,200 shares of the
registrant's $.001 par value Common Stock.
<PAGE>
Table of Contents
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of September 30, 1999 (unaudited)
and December 31, 1998 (audited)
Consolidated Statements of Operations for the three
months and nine months ended September 30, 1999 and 1998 (unaudited)
Consolidated Statements of Cash Flows for the three
months and the nine months ended September 30, 1999 and 1998 (unaudited)
Selected Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis
Item 3. Quantitative and Qualitative Disclosures About Market Risk
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The information required hereunder is included in the Company's
Consolidated Financial Statements and the Notes thereto as set forth beginning
on page F-1.
1
<PAGE>
<TABLE>
<CAPTION>
CENTENARY INTERNATIONAL CORP.
-----------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
(Stated in US Dollars)
(UNAUDITED)
September 30, December 31,
1999 1998
------------------ -----------------
ASSETS
- ------
<S> <C> <C>
CURRENT ASSETS
- ----------------------------------------------------------
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 71,710 $ 37,336
Accounts receivable, net of allowance for doubtful
accounts of 448,024 and 291,868 in 1999 and 1998
respectively . . . . . . . . . . . . . . . . . . . . . . 21,687,047 8,731,673
Other receivables (note 5) . . . . . . . . . . . . . . . . 9,602,530 5,580,157
Deferred tax asset (note 11) . . . . . . . . . . . . . . . 142,224 102,153
Notes receivable - related party (note 6). . . . . . . . . 2,000,000 -
---------------- ---------------
Total current assets . . . . . . . . . . . . . . . . . . . 33,503,511 14,451,319
---------------- ---------------
Notes receivable - related party (note 6). . . . . . . . . 2,000,000 -
Property, plant and equipment. . . . . . . . . . . . . . . 10,835,872 10,687,036
Goodwill (note 4). . . . . . . . . . . . . . . . . . . . . 1,014,514 -
------------------ -----------------
13,850,386 10,687,036
------------------ -----------------
Total assets . . . . . . . . . . . . . . . . . . . . . $ 47,353,897 $ 25,138,355
================== =================
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Pre-petition liabilities
- ----------------------------------------------------------
Accounts payable . . . . . . . . . . . . . . . . . . . . . $ 5,708,287 $ 2,102,548
Debt (note 7). . . . . . . . . . . . . . . . . . . . . . . 32,979,880 14,785,785
Accrued payroll and related expenses . . . . . . . . . . . 151,145 129,895
Taxes payable. . . . . . . . . . . . . . . . . . . . . . . 637,644 458,417
Customer advances. . . . . . . . . . . . . . . . . . . . . - 360,050
Other liabilities. . . . . . . . . . . . . . . . . . . . . - 143,906
Minority interest. . . . . . . . . . . . . . . . . . . . . - 71,578
------------------ -----------------
Total liabilities pre-petition. . . . . . . . . . . . . 39,476,956 18,052,179
------------------ -----------------
Post-petition liabilities
- ----------------------------------------------------------
Accounts payable . . . . . . . . . . . . . . . . . . . . . 576,975 -
Accrued payroll and related expenses . . . . . . . . . . . 58,061 -
Customer advances. . . . . . . . . . . . . . . . . . . . . 477,020 -
Other liabilities. . . . . . . . . . . . . . . . . . . . . 96,405 -
Minority interest. . . . . . . . . . . . . . . . . . . . . 69,334 -
------------------ -----------------
Total liabilities post-petition. . . . . . . . . . . . . . 1,277,795 -
------------------ -----------------
Total liabilities. . . . . . . . . . . . . . . . . . . 40,754,751 18,052,179
------------------ -----------------
SHAREHOLDERS' EQUITY
- ----------------------------------------------------------
Common stock, $.001 per value, 50,000,000 shares
authorized; 19,356,200 and 18,963,500 shares issued and
outstanding in 1999 and 1998 respectively (note 8). . . 19,356 18,963
Paid in capital. . . . . . . . . . . . . . . . . . . . . . 8,340,873 7,981,037
Retained earnings (deficit). . . . . . . . . . . . . . . . (1,585,083) (737,824)
Receivable from sale of stock. . . . . . . . . . . . . . . (176,000) (176,000)
------------------ -----------------
Total shareholders' equity . . . . . . . . . . . . . . 6,599,146 7,086,176
------------------ -----------------
Total liabilities and shareholders' equity . . . . . . $ 47,353,897 $ 25,138,355
================== =================
</TABLE>
The accompanying notes are an integral part of these statements.
F-1
<PAGE>
<TABLE>
<CAPTION>
CENTENARY INTERNATIONAL CORP.
-----------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
FOR THE PERIODS OF NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
----------------------------------------------------------------
(Stated in US Dollars)
(UNAUDITED)
1999 1998
------------ -----------
<S> <C> <C>
Net sales . . . . . . . . . . . . . . . . . . $45,310,533 $99,304,358
Cost of goods sold. . . . . . . . . . . . . . 35,132,493 78,815,963
------------ -----------
Gross profit. . . . . . . . . . . . . . . 10,178,040 20,488,395
Selling expenses. . . . . . . . . . . . . . . 8,481,480 14,801,257
Administrative expenses . . . . . . . . . . . 2,229,079 3,222,920
------------ -----------
Operating income (loss). . . . . . . . . (532,519) 2,464,218
Other income and loss, net. . . . . . . . . . 740,622 237,837
Interest expense. . . . . . . . . . . . . . . 1,162,120 1,003,594
------------ -----------
Income (loss) before income taxes and
minority interest . . . . . . . . . . . . (954,017) 1,222,787
Income taxes (benefit) (note 11). . . . . . . (104,514) 77,237
Minority interest in earnings of subsidiary . 2,244 -
------------ -----------
Net income (loss) . . . . . . . . . . . . $ (847,259) $ 1,145,550
============ ===========
Earnings (loss) per share, basic and diluted. $ ( .045) $ .060
============ ===========
</TABLE>
The accompanying notes are an integral part of these statements.
F-2
<PAGE>
<TABLE>
<CAPTION>
CENTENARY INTERNATIONAL CORP.
-----------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
FOR THE PERIODS OF THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
-----------------------------------------------------------------
(Stated in US Dollars)
(UNAUDITED)
1999 1998
------------ ------------
<S> <C> <C>
Net sales . . . . . . . . . . . . . . . . . . . . $ 1,348,402 $23,370,306
Cost of goods sold. . . . . . . . . . . . . . . . 851,430 17,365,492
------------ ------------
Gross profit. . . . . . . . . . . . . . . . . 496,972 6,004,814
Selling expenses. . . . . . . . . . . . . . . . . 897,621 4,727,637
Administrative expenses . . . . . . . . . . . . . 891,506 1,254,198
------------ ------------
Operating income (loss) . . . . . . . . . . . (1,292,155) 22,979
Other income and loss, net. . . . . . . . . . . . 49,087 88,602
Interest expense. . . . . . . . . . . . . . . . . 367,636 75,991
------------ ------------
Income (loss) before income taxes and
minority interest . . . . . . . . . . . . . . (1,610,704) 35,590
Income taxes (benefit). . . . . . . . . . . . . . (436,894) (416,620)
Minority interest in earnings of subsidiary . . . 8,288 -
------------ ------------
Net income (loss) . . . . . . . . . . . . . . $(1,165,522) $ 452,210
============ ============
Earnings (loss) per share, basic and diluted. $ ( .062) $ .023
============ ============
</TABLE>
The accompanying notes are an integral part of these statements.
F-3
<PAGE>
<TABLE>
<CAPTION>
CENTENARY INTERNATIONAL CORP.
-----------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
FOR THE PERIOD OF NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
---------------------------------------------------------------
(Stated in US Dollars)
(UNAUDITED)
1999 1998
------------- ------------
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
- ------------------------------------------------------
Net income (loss). . . . . . . . . . . . . . . . . . . $ (847,259) $ 1,145,550
------------- ------------
Adjustments to reconcile net income to net cash:
Amortization of intangible assets . . . . . . . . . . - 304,771
Depreciation of fixed assets . . . . . . . . . . . . . 185,606 143,712
Amortization of goodwill . . . . . . . . . . . . . . . 34,983 -
Minority interest in earnings of subsidiary. . . . . . (2,244) -
Changes in assets and liabilities:
Accounts receivables . . . . . . . . . . . . . . . . . (12,955,374) (6,954,710)
Other receivables. . . . . . . . . . . . . . . . . . . (4,022,373) 7,831,994
Notes receivables. . . . . . . . . . . . . . . . . . . (2,000,000) -
Inventories. . . . . . . . . . . . . . . . . . . . . . - 523,359
Deferred taxes . . . . . . . . . . . . . . . . . . . . (40,071) (136,363)
Accounts payable . . . . . . . . . . . . . . . . . . . 4,182,714 (6,856,677)
Accrued payroll and related expenses . . . . . . . . . 79,311 (41,895)
Taxes payable. . . . . . . . . . . . . . . . . . . . . 179,227 184,962
Advances of customers. . . . . . . . . . . . . . . . . 116,970 680,883
Other liabilities. . . . . . . . . . . . . . . . . . . (47,501) 305,367
------------- ------------
(14,288,752) (4,014,597)
------------- ------------
INVESTING ACTIVITIES
- ------------------------------------------------------
Notes receivable - related party . . . . . . . . . . . (2,000,000) -
Purchase of Platafreight . . . . . . . . . . . . . . . (1,049,497) -
Purchase of fixed assets . . . . . . . . . . . . . . . (454,364) (1,779,451)
Proceeds of sale of fixed assets . . . . . . . . . . . 119,922 117,000
Purchase of intangible assets. . . . . . . . . . . . . - (1,171)
Proceeds of sale of property held for sale . . . . . . - 1,100,000
------------- ------------
(3,383,939) (563,622)
------------- ------------
FINANCING ACTIVITIES
- ------------------------------------------------------
Net borrowings (repayments) of short term debt . . . . 3,438,265 (4,237,570)
Borrowings under long term debt. . . . . . . . . . . . 1,885,156 7,169,394
Repayments - long term debt. . . . . . . . . . . . . . (1,138,632) (1,142,016)
Letters of Credit. . . . . . . . . . . . . . . . . . . 14,009,306 -
Issuance of common stock . . . . . . . . . . . . . . . 360,229 5,500,000
Advanced capital contribution. . . . . . . . . . . . . - (4,000,000)
------------- ------------
Net cash provided (used in) financing activities . . . 18,554,324 3,289,808
------------- ------------
NET INCREASE (DECREASE) IN CASH. . . . . . . . . . . . 34,374 (142,861)
- ------------------------------------------------------
CASH AT THE BEGINNING OF THE PERIOD. . . . . . . . . . 37,336 1,168,099
- ------------------------------------------------------ ------------- ------------
CASH AT THE END OF THE PERIOD. . . . . . . . . . . . . $ 71,710 $ 1,025,238
- ------------------------------------------------------ ============= ============
Supplemental cash flow information:
Cash paid for incomes taxes. . . . . . . . . . . . . . $ 45,154 $ 279,930
============= ============
Cash paid for interest . . . . . . . . . . . . . . . . $ 820,911 $ 1,436,950
============= ============
</TABLE>
The accompanying notes are an integral part of these statements.
F-4
<PAGE>
<TABLE>
<CAPTION>
CENTENARY INTERNATIONAL CORP.
-----------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
FOR THE PERIOD OF THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
-----------------------------------------------------------------
(Stated in US Dollars)
(UNAUDITED)
1999 1998
------------- ------------
CASH FLOW FROM OPERATING ACTIVITIES
- -------------------------------------------------
<S> <C> <C>
Net income (loss) . . . . . . . . . . . . . . . . $ (1,162,522) $ 452,210
------------- ------------
Adjustments to reconcile net income to net cash:
Amortization of intangibles assets . . . . - 105,513
Depreciation of fixed assets. . . . . . . . . . . 61,849 53,612
Amortization of goodwill. . . . . . . . . . . . . 13,118 -
Minority interest in earnings of subsidiary . . . (8,288) -
Changes in assets and liabilities:
Accounts receivables. . . . . . . . . . . . . . . (9,222,685) 469,452
Other receivables . . . . . . . . . . . . . . . . (899,220) 1,839,160
Inventories . . . . . . . . . . . . . . . . . . . - 101,200
Deferred taxes. . . . . . . . . . . . . . . . . . - (198,560)
Accounts payable. . . . . . . . . . . . . . . . . (3,219,211) (1,286,233)
Accrued payroll and related expenses. . . . . . . 98,211 (302,049)
Taxes payable . . . . . . . . . . . . . . . . . . (114,714) (141,687)
Advances of customers . . . . . . . . . . . . . . 37,399 823,473
Other liabilities . . . . . . . . . . . . . . . . (199,428) 149,489
------------- ------------
(13,452,969) 1,613,370
------------- ------------
INVESTING ACTIVITIES
- -------------------------------------------------
Purchase of fixed assets. . . . . . . . . . . . . (95,141) (195,077)
Proceeds of sale of fixed assets. . . . . . . . . 47,899 -
------------- ------------
(47,242) (195,077)
------------- ------------
FINANCING ACTIVITIES
- -------------------------------------------------
Net borrowings (repayments) of short term debt. . (334,697) (624,266)
Borrowings under long term debt . . . . . . . . . 1,180,125 279,232
Repayments - long term debt . . . . . . . . . . . (398,421) (578,402)
Letters of Credit . . . . . . . . . . . . . . . . 14,009,306 -
Issuance of common stock. . . . . . . . . . . . . 210,229 -
------------- ------------
Net cash provided (used in) financing activities. 14,666,542 (923,436)
------------- ------------
NET INCREASE (DECREASE) IN CASH . . . . . . . . . 809 947,067
- -------------------------------------------------
CASH AT THE BEGINNING OF THE PERIOD . . . . . . . 70,901 78,171
- ------------------------------------------------- ------------- ------------
CASH AT THE END OF THE PERIOD . . . . . . . . . . $ 71,710 $ 1,025,238
- ------------------------------------------------- ============= ============
Supplemental cash flow information:
Cash paid for incomes taxes . . . . . . . . . . . $ 2,191 $ 107,449
============= ============
Cash paid for interest. . . . . . . . . . . . . . $ 398,421 $ 498,114
============= ============
</TABLE>
The accompanying notes are an integral part of these statements.
F-5
<PAGE>
CENTENARY INTERNATIONAL CORP.
-----------------------------
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------
FOR THE PERIOD OF NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
---------------------------------------------------------------
(stated in US Dollars)
(UNAUDITED)
1. Petition for reorganization
-----------------------------
On August 12, 1999, the Board of Directors of Centenary S.A. of Argentina, the
principal subsidiary of Centenary International Corp., filed a petition for
reorganization.
Centenary S.A. filed this petition under the Argentine "concurso de acreedores"
(creditor s committee law). The purpose of this law is to preserve viable
business organizations suffering financial difficulties. The "concurso" process
allows a debtor to issue a formal summons to its creditors and propose a plan to
restructure its short and long-term debt. Until the plan is submitted to and
approved by the creditors, no individual creditor can demand settlement of its
credit and no interest charges can be accrued on unsecured debt. During this
period the directors and officers of the debtor continue to manage its
business normally.
In response to this filing the Company has reflected its liabilities under the
captions, "Pre-petition and Post-petition Liabilities" to distinguish those
liabilities incurred prior to the petition from those incurred after the
petition was filed.
Centenary S.A. expects to submit a plan to its creditors in the first quarter of
2000.
Centenary s ability to continue as a going concern will be dependent on the
development of a viable plan with its creditors.
2. Basis of presentation
-----------------------
The accompanying unaudited consolidated financial statements of CENTENARY
INTERNATIONAL CORP. and its majority owned subsidiary 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-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. The unaudited consolidated financial statements have been prepared
on the same basis as the audited condensed financial statements and, in the
opinion of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the three months and nine months, ended September 30, 1999 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1999. For further information refer to the financial statements and
footnotes included in the company's annual report on Form 10-KSB for the year
ended December 31, 1998.
The consolidated financial statements include the accounts of CENTENARY
INTERNATIONAL CORP. and its majority owned subsidiary, CENTENARY ARGENTINA S.A.
and, PLATAFREIGHT S.A. since February 1, 1999.
F-6
<PAGE>
CENTENARY INTERNATIONAL CORP.
-----------------------------
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------
FOR THE PERIOD OF NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
---------------------------------------------------------------
(stated in US Dollars)
(UNAUDITED)
3. Earnings per share
Basic earnings per share is computed by dividing net income by the weighted
average shares outstanding of 19,023,507 and 18,963,500 at September 30, 1999
and 1998 respectively.
Diluted earnings per share is equivalent to basic earnings per share because
there are no potentially dilutive equivalents.
4. Acquisition of Platafreight S.A. and Pisondix S.A.
-------------------------------------------------------
On February 1, 1999 the Company purchased Platafreight S.A., a private company
in Uruguay in the sea freight business. The purchase price was $ 1,268,000 for
all the issued and outstanding Platafreight stock.
The cost in excess of the fair value of the net assets (goodwill) is $
1,049,497, at the time of purchase.
The transaction is accounted for as a purchase and the net assets and earnings
of Platafreight S.A. are consolidated with Centenary since February 1, 1999.
Goodwill resulting from the transaction is being amortized over 20 years.
On July 9, 1999 Centenary International Corp. acquired a Panamanian shell
corporation Pisondix for $ 10,000. Pisondix holds an option to purchase two bulk
carrier vessels of 27,000 M.T. of DWT for a price of $ 13,500,000 each. The
vessels are presently under construction. The first one will be ready for
launching on February, 2000; and the second one will be completed by June, 2001.
This option can be exercised by depositing 5% of the total purchase price of the
vessels on December 15, 1999. The historic value for newly constructed vessels
of this kind in the international market is between $ 15,000,000 and
$ 22,000,000 each.
F-7
<PAGE>
CENTENARY INTERNATIONAL CORP.
-----------------------------
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------
FOR THE PERIOD OF NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
---------------------------------------------------------------
(stated in US Dollars)
(UNAUDITED)
5. Other receivables
------------------
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
------------- ------------
<S> <C> <C>
Related party (note 9). . . . . . . $ 5,853,574 $ 1,790,859
Receivables from sale of trademark. 1,530,000 1,530,000
Refundable tax credits. . . . . . . 1,321,501 1,251,148
Other receivables . . . . . . . . . 540,138 279,375
Receivable, Sale of Marigold Plant. 212,284 271,000
Advances to directors . . . . . . . 145,033 142,233
Receivable, Platafreight S. A.. . . - 291,986
Notes receivable. . . . . . . . . . - 23,556
------------- ------------
$ 9,602,530 $ 5,580,157
============= ============
</TABLE>
6. Note receivable - related party
-----------------------------------
The Company has a receivable in the amount of $ 4 million from a company under
common control.
The note receivable bears interest at 12% and is payable in 2 annual
installments of $ 2,000,000 due June 30, 2000 and 2001. The note is
collateralized by 2,000,000 shares of stock in the Company.
7. Debt
----
As described in note 1, the due dates for loan repayments which have been set
prior to the creditors' meeting filing (concurso) are being stayed until the
company makes a payment proposal, which includes new amounts and payment time
periods to be submitted at the creditors' meeting and gets the approval of
creditors at said meeting and ratification on the part of the judge acting on
the matter.
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
-------------- -------------
<S> <C> <C>
Letters of credit . . 14,009,306 -
Bank loans. . . . . . 11,910,267 8,024,213
Vendor loans. . . . . 5,913,065 5,909,432
Bank notes. . . . . . 685,686 -
Office purchase loans 380,191 536,463
Bank overdraft. . . . 81,365 315,677
-------------- -------------
$ 32,979,880 $ 14,785,785
============== =============
</TABLE>
F-8
<PAGE>
CENTENARY INTERNATIONAL CORP.
-----------------------------
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------
FOR THE PERIOD OF NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
---------------------------------------------------------------
(stated in US Dollars)
(UNAUDITED)
The Company holds several letters of credit drawn on various banks in the amount
of $ 14,009,306 earned through export operations, which mature between
September 1999 and May 2000.
The Company has a bank loan of $ 970,659 for the financing of exports. The
interest rate is LIBOR (London Interbank Offered Rate) (5.97% at September 30,
1999) plus 3%.
The Company has a bank loan of $ 2,709,830 for prefinancing of exports. The loan
is collateralized by the ranch. The interest rate was LIBOR (London Interbank
Offered Rate) (5.97% at September 30, 1999) plus 2%.
The Company has bank loans of $ 5,103,195 for the prefinancing of exports. The
loans are collateralized by the ranch. One loan requires repayment of $
3,051,144 and the interest rate is 14%. The other loan requires repayment of $
2,052,051 and the interest rate is LIBOR (London Interbank Offered Rate) (5.97%
at September 30, 1999) plus 2%.
The Company also has a bank loan of $ 3,126,583 for financing the development of
the olive grove. The loan is collateralized by the ranch. The interest rate is
LIBOR (London Interbank Offered Rate) (5.97% at September 30, 1999) plus 4.5%.
The Company has a vendor loan of $ 5,913,065 for commodities purchases. The loan
is collateralized by the ranch. The interest rate is 12%.
The Company has bank notes of $ 685,686 for prefinancing of exports. One of the
notes requires repayments of $ 522,500 -the discount fee totaling $ 22,500-. The
other notes require repayments of $163,186 with an interest rate of 12%.
The Company has an office purchase loan of $ 380,191 for the purchase of the
administrative office. The loan is collateralized by the office. The interest
rate is 10%.
F-9
<PAGE>
CENTENARY INTERNATIONAL CORP.
-----------------------------
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------
FOR THE PERIOD OF NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
---------------------------------------------------------------
(stated in US Dollars)
(UNAUDITED)
8. Common stock
-------------
During the current period, the Company raised $ 214,890 through issuances of
242,700 shares of common stock.
The Company raised $ 150,000 through a private placement of common stock at $
1.00 per share, which was approved by the Board of Directors on June 22, 1999
and the shares were issued June 28, 1999.
The Company raised $ 64,890 through a private placement of common stock at $ .7
per share. This transaction was approved by the Board of Directors on August
26, 1999 and the shares were issued September 7,1999.
On September 30, under the terms of an employment agreement, the Company issued
150,000 shares at a market value of $ .969 per share to an officer of the
Company. Compensation expense in the amount of $ 145,350 as a result of this
issuance is included in administrative expenses.
9. Related party transactions
----------------------------
Other receivables include amounts due from affiliated companies of $ 5,853,574
and $ 693,478 in 1999 and 1998 respectively.
The Company purchased $ 2,123,139 and $ 19,545,139 of products and $ 1,790,570
and $ 4,971,995 of services from affiliated companies, during 1999 and 1998. In
addition, the Company provides certain administrative services and pays certain
expenses for an affiliated company. The affiliated company reimbursed the
Company for these costs totaling $ 3,157,907 during 1999 and $ 210,540 during
1998.
10. Restricted retained earnings
------------------------------
According to the Argentine laws, 5% of the net earnings of CENTENARY S.A.,
calculated in accordance with generally accepted accounting principles in
Argentina, for the year should be appropriated to increase the legal reserve up
to 20% of common stock. At December 31, 1998, the legal reserve amounted to $
47,681.
In previous years the shareholders assigned $ 95,057 of retained earnings as a
general reserve.
Retained earnings related to the legal and general reserves are not available
for dividends.
F-10
<PAGE>
CENTENARY INTERNATIONAL CORP.
-----------------------------
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------
FOR THE PERIOD OF NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
---------------------------------------------------------------
(stated in US Dollars)
(UNAUDITED)
11. Income taxes
-------------
The components of income tax expense are as follows:
<TABLE>
<CAPTION>
Nine months ended September 30,
-------------------------------
1999 1998
---------- -------
<S> <C> <C>
Current
Federal . . . . . . . . . . $ (64,443) $15,040
State and local . . . . . . - -
---------- -------
Total income taxes current. (64,443) 15,040
Deferred tax benefit. . . . (40,071) 62,197
---------- -------
Income taxes (benefit). . . $(104,514) $77,237
========== =======
</TABLE>
The income tax provision reconciled to the tax computed at the Statutory Federal
rate is:
<TABLE>
<CAPTION>
Nine months ended September 30,
1999 1998
------- --------
<S> <C> <C>
Taxes / (benefit) at statutory rate. . . . . . . . . . . (35 %) 33 %
Non deductible allowance for doubtful accounts . . . . . 0.9% -
Non deductible board remuneration. . . . . . . . . . . . 4.8 % -
Profit of Platafreight and Centenary International Corp. 22.9 % -
Amortization of intangible assets. . . . . . . . . . . . - 8.2 %
Other deductions . . . . . . . . . . . . . . . . . . . . (4.6 %) (34.9 %)
------- --------
(11 %) 6.3 %
======= ========
</TABLE>
Significant components of the Company's deferred tax assets are as follows:
<TABLE>
<CAPTION>
September 30, December, 31,
1999 1998
<S> <C> <C>
Deferred tax assets due to:
Allowance for doubtful accounts. $ 137,154 $ 102,153
Provision for severance payments 5,070 -
-------------- --------------
$ 142,224 $ 102,153
============== ==============
</TABLE>
F-11
<PAGE>
CENTENARY INTERNATIONAL CORP.
-----------------------------
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------
FOR THE PERIOD OF NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
---------------------------------------------------------------
(stated in US Dollars)
(UNAUDITED)
12. Geographical information
-------------------------
The Company's operations involve, basically, a single industry segment, trading
commodities and agriproducts internationally. In the future when the olive grove
has been developed there will be an additional segment. The geographic areas in
which the Company operates are Pacific, Europe, Mercosur, Russia and ex -
Soviet, China and Far East, Africa, Middle East and Caribbean. Net sales by
geographical area were as follows:
<TABLE>
<CAPTION>
Nine months ended September 30,
-------------------------------
1999 1998
----------- -----------
<S> <C> <C>
Middle East. . . . . . . . . . . $17,477,897 $12,439,968
South American Pacific . . . . . 17,206,818 38,847,788
Caribbean. . . . . . . . . . . . 9,069,069 30,561,932
Mercosur . . . . . . . . . . . . 945,603 2,050,412
Russia and ex - Soviet Countries 275,118 10,291,249
Africa . . . . . . . . . . . . . 229,058 2,053,009
Mediterranean. . . . . . . . . . 106,970 -
China and Far East . . . . . . . - 3,060,000
----------- -----------
$45,310,533 $99,304,358
=========== ===========
</TABLE>
The Company has no identificable assets in other countries than Argentina.
F-12
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
The following Management Discussion, Analysis of Financial Condition and
Results of Operations are qualified by reference to, and should be read in
conjunction with the Company's Consolidated Financial Statements (unaudited )
and the Notes thereto as forth set beginning on page F-1, and in the audited
consolidated Financial Statements, Management Discussion, Analysis of Financial
Condition and Results of Operations contained in the Company's 10-KSB for the
year ended December 31, 1998.
INFORMATION REGARDING AND FACTORS AFFECTING FORWARD LOOKING STATEMENTS
The Company is including the following cautionary statement in this Report
on Form 10-Q; to make applicable and take advantage of the safe harbor provision
of the Private Securities Litigation Reform Act of 1995, for any forward-looking
statements made by, or on behalf of the Company.
Forward-looking statements include statements concerning plans, objectives,
goals, strategies, future events or performance and underlying assumptions and
other statements that are other than statements of historical facts. Certain
statements contained in this Report on Form 10-Q are forward-looking statements,
and the matters discussed in these forward-looking statements are subject to
risks and uncertainties, which could cause actual results or outcomes to differ
materially from those expressed in the forward-looking statements.
The Company's forward-looking statements are expressed in good faith, and
are believed by the Company to have a reasonable basis, based on management
examination of historical operating trends, data contained in the Company's
records and other data available from third parties. But no assurance can be
made that any matter discussed in a forward-looking statement will ultimately be
achieved, or if achieved, will have the same impact on the Company as discussed
in the forward-looking statement.
2
<PAGE>
In addition to those factors already mentioned, other factors which could
effect forward looking statements are the ability of the Company to obtain
financing on favorable terms, the success of the Company's olive oil, animal
feed, cattle feeding and meat processing operations, demand and supply factors,
competitive factors, weather conditions, crop yield and failures, crop
oversupply, geopolitical changes, import restrictions in countries of customers,
the effect of inflation and government regulations. The Company has no
obligation to update or revise any forward-looking statement to reflect future
events.
RESULTS OF OPERATIONS
General. The following sets forth, for the periods presented, the percentage of
net sales represented by certain items in the Company's Consolidated Statements
of Operations:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
September 30,
1999 1998
<S> <C> <C>
Net Sales. . . . . . . . . . . . . . . 100.0 % 100.0 %
Cost of goods sold . . . . . . . . . . 63.1 % 74.3 %
--------- --------
Gross profit . . . . . . . . . . . . . 36.9 % 25.7 %
Selling expenses . . . . . . . . . . . 66.6 % 20.2 %
Administrative expenses. . . . . . . . 66.1 % 5.4 %
--------- --------
Operating income (loss). . . . . . . . (95.8 %) 0.1 %
Other Income (Expense), Net. . . . . . 3.6 % 0.4 %
Interest expense . . . . . . . . . . . 27.3 % 0.3 %
--------- --------
Income (loss) before income taxes and
minority interests . . . . . . . . . . (119.5 %) 0.2 %
Income taxes (benefit) . . . . . . . . (32.4 %) (1.8 %)
Minority interest in subsidiary. . . . 0.6 % - %
--------- --------
Net income (loss). . . . . . . . . . . (86.5 %) 2.0 %
</TABLE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED
September 30,
1999 1998
<S> <C> <C>
Net Sales. . . . . . . . . . . . . . . 100.0% 100.0%
Cost of goods sold . . . . . . . . . . 77.5% 79.4%
--------- --------
Gross profit . . . . . . . . . . . . . 22.5% 20.6%
Selling expenses . . . . . . . . . . . 18.7% 14.9%
Administrative expenses. . . . . . . . 4.9% 3.3%
--------- --------
Operating income (loss). . . . . . . . (1.1%) 2.4%
Other Income (Expense), Net. . . . . . 1.6% (0.2%)
Interest expense . . . . . . . . . . . 2.6% 1.0%
--------- --------
Income (loss) before income taxes and
minority interests . . . . . . . . . . (2.1%) 1.2%
Income taxes (benefit) . . . . . . . . (0.2%) 0.1%
Minority interest in subsidiary. . . . 0.0% 0.0%
--------- --------
Net income (loss). . . . . . . . . . . (1.9%) 1.1%
</TABLE>
3
<PAGE>
The following table sets forth-sales revenues by region for the nine months
ended September 30, 1999 and 1998:
<TABLE>
<CAPTION>
NINE MONTHS ENDED
September 30,
1999 1998
(STATED IN US DOLLARS)
Geographical Information
----------- -----------
<S> <C> <C>
Middle East . . . . . . . . . . $17,477,897 $12,439,968
South American Pacific. . . . . 17,206,818 38,847,788
Caribbean . . . . . . . . . . . 9,069,069 30,561,932
Mercosur. . . . . . . . . . . . 945,603 2,050,412
Russia & ex - Soviet Countries. 275,118 10,291,249
Africa. . . . . . . . . . . . . 229,058 2,053,009
Mediterranean . . . . . . . . . 106,970 -
China and Far East. . . . . . . - 3,060,000
----------- -----------
$45,310,533 $99,304,358
</TABLE>
The Three Months Ended September 30, 1999 Compared to the Three Months Ended
September 30, 1998:
Revenues: - Net revenues decreased 94.2 % from $ 23.4 million in the
three months ended September 30, 1998 to $ 1.3 million in the three months
ended September 30, 1999. During the three months ended September 30, 1999,
the Company shipped 41,770 metric tons of food commodities compared to
179,806 metric tons in the three months ended September 30, 1998. The
decrease in sales was attributable primarily to the lack of working capital,
which limited the Company to trading on letters of credit rather than on cash
against documents or clean credit and the uncompetitive prices of Argentine
products during the last three months.
Cost of sales: - The cost of sales decreased from $ 17.4 million in the
three months ended September 30, 1998 to $ .9 million in the three months
ended September 30, 1999 due to the decrease in sales. The cost of
sales as a percentage of revenues decreased in 1999 due to mix of products sold
in 1999 in comparison to 1998. The cost of sales was 63.1 % for the three
months ended September 30, 1999 and 74.3 % for the three months ended
September 30, 1998.
4
<PAGE>
Selling expenses: - Selling expenses decreased from $ 4.7 million in
the three months ended September 30, 1998 to $ .9 million in the three months
ended September 30, 1999. As a percentage of revenues, selling expenses
increased from 20.2 % in the three months ended September 30, 1998 to 66.6 %
in the three months ended September 30, 1999. Selling expenses include freight
charges, importation fees, bank charges and sales commissions. Selling expenses
in the three months ended September 30, 1999 increased primarily because of
an increase of the sales with importation fees included. Freight charges
declined due to a global decrease in freight charges.
Administrative expenses: - Administrative expenses decreased $362,692 in
the three months ended September 30, 1999 compared to the three months ended
September 30, 1998. As a percent of sales, administrative expenses increased
from 5.4 % in the three months ended September 30, 1998 to 66.1 % in three
months ended September 30, 1999 primarily because of a decrease in the
amortization of the trademark which was sold during 1998 and other
nonrecurring expenses.
5
<PAGE>
Interest expense: - Interest expense increased $ 291,645 in the
three months ended September 30, 1999 compared to the three months ended
September 30, 1998. The increase in interest expense was attributable to the $
10.5 million increase in debt.
Other Income. Other income in 1999 was attributable primarily to the sale
of the breeding livestock and services performed by Platafreight.
Income taxes: - Income taxes decreased in the three months ended
September 30, 1999 compared to the same period in 1998 due primarily to a
decrease in 1999 income.
The Nine Months Ended September 30, 1999 Compared to the Nine Months Ended
September 30, 1998:
Revenues: - Net revenues decreased 54.4 % from $ 99.3 million in the
nine months ended September 30, 1998 to $ 45.3 million in the nine
months ended September 30, 1999. During the nine months ended September 30,
1999, the Company shipped 340,640 metric tons of food commodities compared to
536,003 metric tons in the nine months ended September 30, 1998. The decrease
in sales was attributable primarily to the impact of lower commodity prices,
and lack of working capital.
Cost of sales: - The cost of sales decreased from $ 78.8 million in
the nine months ended September 30, 1998 to $ 35.1 million in the nine months
ended September 30, 1999 due to the decrease in sales. The cost of sales as
a percentage of revenues remained relatively stable in 1999 in comparison to
1998. The cost of sales was 77.5 % for the nine months ended September 30,
1999 and 79.4 % for the nine months ended September 30, 1998.
Selling expenses: - Selling expenses decreased from $ 14.8 million in the
nine months ended September 30, 1998 to $ 8.5 million in the nine months
ended September 30, 1999. As a percent of revenues, selling expenses increased
from 14.9 % in the nine months ended September 30, 1998 to 18.7 % in the nine
months ended September 30, 1999. Selling expenses include freight charges,
importation fees, bank charges and sales commissions. Selling expenses in
the nine months ended September 30, 1999 decreased primarily because of a
decrease of sales of cargo. Freight charges declined due to a global
decrease.
Administrative expenses: - Administrative expenses decreased $ 993,841
in the nine months ended September 30, 1999 compared to the nine months
ended September 30, 1998. As a percentage of sales, administrative expenses
increased from 3.3 % in the nine months ended September 30, 1998 to 4.9 % in
nine months ended September 30, 1999.
6
<PAGE>
Interest expense: - Interest expense increased $ 158,526 in the nine
months ended September 30, 1999 compared to the nine months ended
September 30, 1998. The increase in interest expense was attributable to
the increase in the debt.
Other Income. Other income in 1999 was attributable primarily to the sale
of the breeding livestock and services performed by Platafreight.
Income taxes:- Income taxes decreased in the nine months ended September
30, 1999 compared to the same period in 1998 due primarily to the decrease
in 1999 income.
Liquidity and Capital Resources
Operating activities consumed $ 14.3 in the nine months ended
September 30, 1999 in comparison to $ 4.0 million in the nine months ended
September 30, 1998. The increase in cash used in the nine months ended
September 30, 1999 was primarily attributable to an increase in the current
portion of a related party receivable of $ 2 million, an increase in other
receivables of $ 4.0 million, a decrease in accounts payable and accrued
expenses of $ 4.3 million, and an increase in accounts receivable of $ 13
million. The increase in accounts receivable was related to the $ 14.0 million
in letters of credit opened prior to the petition, which was partially offset by
a decrease in accounts receivable of $ 1.0 million. The above mentioned letters
of credit were drawn prior to the petition and are due after the petition date.
Due to the petition the Company is required to record approximately
$14.0 million of accounts receivable and payables related to trades under
letters of credit.
Investing activities utilized $ 3.4 million in the nine months ended
September 30, 1999 and provided $ 563,622 in the nine months ended September
30, 1998. During the nine months ended September 30, 1999, the Company
used $ 2 million for a note receivable from a related party. The Company
expended $ 1.1 million for the purchase of Platafreight S. A., a sea freight
company. The company also purchased 0.5 million of fixed assets.
Financing activities provided $ 18.6 million in the nine months ended
September 30, 1999 and utilized $ 3.3 million in the nine months ended
September 30, 1998. In the nine months ended September 30, 1999, cash was
provided by 14 million in letters of credit an additional $ 3.4 million of
short-term debt, and $ 1.9 million of long-term debt. During the nine months
ended September 30, 1999, the Company used $ 1.1 million for repayment
of long-term debt. During the nine months ended September 30, 1998, the
Company repaid $ 4.2 million of short term debt. In the nine months
ended September 30, 1999, the capital was increased by $ 214,890 through a
242,700 shares issuance.
The Company contemplates raising capital through a private or public
placement of equity or debt. If such an offering is successful, the Company
anticipates that the primary uses of this capital would be to expand the food
commodities trading business first, and then to develop the olive grove and
olive oil production facility. The Company's growth, expansion, and liquidity
and capital resources will be significantly affected by its ability to raise
additional capital.
During the nine months ended September 30, 1999, the Company raised $
214,890 through an issuance of 242,700 shares of common stock. The Company
raised $ 150,000 through a private placement of common stock at $1.0 per
share, which was approved by the Board of Directors on June 22, 1999. The
Company raised $ 64,890 through a private placement of common stock at $ .7 per
share, this transaction was approved by the Board of Directors on August 26,
1999.
In August 1999, the company sought financial relief by filing a petition
for reorganization in Argentina (see Legal Proceeding). The due dates for the
loan repayment which has been granteed prior to the creditors' meeting filing
(concurso) are being interrupted until the company makes a payment proposal,
which includes new amounts and payment time periods to submit to the creditors'
meeting and gets the approval of the creditors at said meeting and the approval
of the judge acting on the matter.
7
<PAGE>
The Company does not currently have material commitments for capital
expenditures and does not anticipate entering into any such commitments during
the next twelve months unless it is able to raise additional capital.
Until the Company achieves its goal of increasing its capital, and
improving its profitability, international trading activities will be limited
to the high return niches only. With the same aim we will enhance the
manufacturing of food products and export activities that, in spite of being
highly profitable, require less working capital than international
trading.
On July 9, 1999 Centenary International Corp. acquired a Panamanian
shell Corporation which holds a purchase option for two 27,000 MT DWT bulk
carrier vessels, presently under construction in argentine shipyard, at a
price of $13.5 million each. The first one will be ready for launching on
February, 2000; and the second one will be completed by September 2001. This
option can be exercised by depositing 5% of the total value of the vessels
on December 15, 1999. The historic value for vessels of this kind in the
international market is between $15.0 and $22.0 million each.
Inflation:
The Company operates in certain countries that have experienced high rates
of inflation and hyper-inflation in the past. However, the Company's
transactions are denominated in U.S. Dollars. Therefore, local inflation has
not had a material impact on the Company's results of operations during the
periods presented herein. Further, the Company does not expect inflation to
have a material impact on the Company in the future. However, the future impact
of inflation on the Company is unknown.
Impact of Year 2000
The Year 2000 issue is the result of computer programs being written using
two digits rather than four to define the applicable year. Any of the Company's
computer programs that have time sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. This could result in a system
failure or miscalculation causing disruption of business activities.
Based on ongoing assessments, the Company believes that no significant
modifications of existing computer software will be required. The Company
believes that its computer systems will function properly with respect to dates
in the year 2000 and thereafter. The Company also believes that costs related
to the Year 2000 issue have not and will not be significant and will not exceed
$10,000.
The Company has assessed its relationships with significant suppliers and
major customers to determine the extent to which the Company is vulnerable to
any third party's failure to remedy their own Year 2000 issues. Based on these
assessments, management believes that significant exposure does not exist with
respect to third parties. Management is developing a contingency plan to
address potential Year 2000 problems that could arise. This plan includes
identification of alternatives to mitigate the possibility of interruptions in
business operations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is subject to market risk exposure related to changes in
interest rates on its debt facilities. These instruments carry interest at a
pre-agreed upon percentage point spread from the Libor interest rate. These
debt facilities are in U.S. dollars. At September 30, 1999, the Company had $
7.7 million outstanding under these facilities. Based on this balance, an
immediate change of one percent in the interest rate would cause a change in
interest expense of approximately $77,000 on an annual basis. However, in
August, 1999, the Company sought financial relief by filing a petition for
reorganization in Argentina. See Legal Proceedings.
8
<PAGE>
The Company is subject to market risk related to fluctuations in the value
of the U.S. dollar compared to certain foreign currencies. The Company has
subsidiaries, which operate worldwide. However, the functional currency used by
these operating units is the U.S. dollar. Substantial portions of these
operating units' invoicing, customer receivable, and many operating cost factors
are denominated in dollars.
A hypothetical 10% fluctuation of the U.S. dollar relative to the foreign
currencies of the markets in which the Company operates would not materially
adversely affect the Company's expected 1999 earnings or cash flows regardless
of the direction of the change in relation to the U.S. dollar. The Company's
sensitivity analysis of the effects of changes in foreign currency exchange
rates does not factor in a potential change in sales levels.
9
<PAGE>
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Board of Directors of Centenary S.A. of Argentina, the principal
subsidiary of Centenary International Corp., elected on August 12, 1999 to
seek financial relief by filing a petition for reorganization in Argentina.
The petition in the Court of Salta (Juz . Ira Instancia Civil y Comercial de
Sexta Nominacion) was approved on October 6, 1999.
Centenary S.A. is filing this petition under the Argentine "concurso de
accreedores" (creditor's committee) law. The purpose of this law is to preserve
viable business organizations suffering financial difficulties. The "concurso"
process allows a debtor to issue a formal summons to its creditors and propose
a plan to restructure its short and long-term debt. Until the plan is submitted
to and approved by the creditors, no individual creditor can demand settlement
of its credit, and no interest charges can be accrued on unsecured debt. During
this time, the directors and officers of the debtor continue to manage its
business normally.
Centenary S.A. expects to submit a plan allowing it to honor its
liabilities by extending the repayment schedules of its loans. The Company
expects to submit the plan to its creditors around April 2000 and this
plan would be approved during July 2000.
ITEM 2. CHANGES IN SECURITIES
During the current period, the Company raised $ 214,890 through issuances
of 242,700 shares of common stock. The Company raised $ 150,000 through a
private placement of common stock at $ 1.00 per share, which was approved by the
Board of Directors on June 22, 1999 and the shares were issued June 28, 1999.
The Company raised $ 64,890 through a private placement of common stock at $ .7
per share. This transaction was approved by the Board of Directors on August
26, 1999 and the shares were issued September 7,1999. On September 30, under
the terms of an employment agreement, the Company issued 150,000 shares at a
market value of $ .969 per share to an officer of the Company. Compensation
expense in the amount of $ 145,350.
This transaction was effectuated by the Company in reliance upon exemptions
from registration under the Securities Act of 1933 as amended (the "Act") as
provided in Section 4(2) thereof. Each certificate issued for unregistered
securities contained a legend stating that the securities have not been
registered under the Act and setting forth the restrictions on the
transferability and the sale of the securities. No underwriter participated in,
nor did the Company pay any commissions or fees to any underwriter in connection
with any of these transactions. None of the transactions involved a public
offering. The Company believes that this purchaser had knowledge and experience
in financial and business matters which allowed it to evaluate the merits and
risk of the purchase of these securities of the Company. The Company believes
that this purchaser was knowledgeable about the Company's operations and
financial condition.
10
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27.1 Financial Data Schedule for the quarter ended September 30, 1998.
27.2 Financial Data Schedule for the quarter ended September 30, 1999.
(b) Reports on Form 8-K
The Company filed a report on Form 8-K dated August 12, 1999 reporting Item
3. Bankruptcy or Receivership and Item 5. Other Events.
11
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report on Form 10-Q
to be signed on its behalf by the undersigned, thereunto duly authorized.
CENTENARY INTERNATIONAL CORP.
November 22, 1999 By: /s/ Hector A. Patron Costas
----------------------------------
Hector A. Patron Costas
Director, Chairman, Secretary,
and Chief Financial Officer
12
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANTS [UN] AUDITED CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 1998 AND
[UN] AUDITED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE 9 MONTHS [YEAR] THEN
ENDED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 1025238
<SECURITIES> 0
<RECEIVABLES> 18854323
<ALLOWANCES> 129955
<INVENTORY> 0
<CURRENT-ASSETS> 23743166
<PP&E> 6604431
<DEPRECIATION> 272467
<TOTAL-ASSETS> 31603848
<CURRENT-LIABILITIES> 11732747
<BONDS> 6388718
0
0
<COMMON> 8000000
<OTHER-SE> (373696)
<TOTAL-LIABILITY-AND-EQUITY> 31603848
<SALES> 99304358
<TOTAL-REVENUES> 99304358
<CGS> 78815963
<TOTAL-COSTS> 96720793
<OTHER-EXPENSES> 237837
<LOSS-PROVISION> 119347
<INTEREST-EXPENSE> 1003594
<INCOME-PRETAX> 1222787
<INCOME-TAX> 77237
<INCOME-CONTINUING> 1145550
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1145550
<EPS-BASIC> .06
<EPS-DILUTED> .06
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANTS [UN] AUDITED CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 1999 AND
[UN] AUDITED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE 9 MONTHS [YEAR] THEN
ENDED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 71710
<SECURITIES> 0
<RECEIVABLES> 22135071
<ALLOWANCES> 448024
<INVENTORY> 0
<CURRENT-ASSETS> 33503511
<PP&E> 11334122
<DEPRECIATION> 498250
<TOTAL-ASSETS> 47353897
<CURRENT-LIABILITIES> 40754751
<BONDS> 0
0
0
<COMMON> 8360229
<OTHER-SE> (1761083)
<TOTAL-LIABILITY-AND-EQUITY> 47353897
<SALES> 45310533
<TOTAL-REVENUES> 45310533
<CGS> 35132493
<TOTAL-COSTS> 45686896
<OTHER-EXPENSES> (740622)
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