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U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
{X} QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
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{ } TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from to
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Commission File Number: 0-14807
AMERICAN CLAIMS EVALUATION, INC.
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(Exact name of small business issuer as specified in its charter)
New York 11-2601199
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Jericho Plaza, Jericho New York 11753
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(Address of principal executive offices) (Zip Code)
(516) 938-8000
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(Issuer's telephone number)
Not applicable
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(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for 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
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APPLICABLE ONLY TO CORPORATE ISSUERS:
The number of shares outstanding of the issuer's common stock, par value $.01,
was 4,273,500 as of July 31, 2000.
Transitional Small Business Disclosure Format (check one): Yes No X
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AMERICAN CLAIMS EVALUATION, INC.
INDEX
<TABLE>
<CAPTION>
Page No.
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets as of June 30, 2000
(unaudited) and March 31, 2000 3
Consolidated Statements of Operations for the Three Months
ended June 30, 2000 and 1999 (unaudited) 4
Consolidated Statements of Cash Flows for the Three Months
ended June 30, 2000 and 1999 (unaudited) 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis or Plan of Operation 8
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 9
SIGNATURES 10
</TABLE>
2
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PART I. FINANCIAL INFORMATION
Item 1 - Consolidated Financial Statements
AMERICAN CLAIMS EVALUATION, INC. AND SUBSIDIARY
Consolidated Balance Sheets
<TABLE>
<CAPTION>
Jun.30,2000 Mar.31,2000
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(Unaudited)
<S> <C> <C>
Assets
Current Assets:
Cash and cash equivalents $7,393,204 7,452,395
Marketable securities 478,581 644,240
Accounts receivable, net 93,529 88,429
Prepaid expenses 22,199 21,886
Deferred tax asset 51,127 15,677
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Total current assets 8,038,640 8,222,627
Property and equipment, net 36,310 40,079
Excess cost over fair value of net assets acquired, net 428,280 436,386
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$8,503,230 8,699,092
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Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 18,905 18,503
Accrued expenses 80,674 78,691
Income taxes payable 32,310 31,386
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Total current liabilities 131,889 128,580
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Stockholders' equity:
Common stock, $.01 par value;
10,000,000 shares authorized;
4,450,000 shares issued; 4,273,500
shares outstanding 44,500 44,500
Additional paid-in capital 3,515,699 3,515,699
Accumulated other comprehensive loss (269,600) (68,600)
Retained earnings 5,378,959 5,377,130
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8,669,558 8,868,729
Treasury shares, at cost, 176,500 shares (298,217) (298,217)
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Total stockholders' equity 8,371,341 8,570,512
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$8,503,230 8,699,092
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</TABLE>
See accompanying notes to consolidated financial statements.
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AMERICAN CLAIMS EVALUATION, INC. AND SUBSIDIARY
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
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Jun. 30, 2000 Jun. 30, 1999
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<S> <C> <C>
Revenues $ 270,342 267,044
Cost of services 127,457 119,153
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Gross margin 142,885 147,891
Selling, general and administrative expenses 262,208 266,393
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Operating loss (119,323) (118,502)
Other income:
Interest income 122,152 103,663
Miscellaneous income 1,000 13,830
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Earnings (loss) before provision
for income taxes 3,829 (1,009)
Provision for income taxes 2,000 1,000
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Net earnings (loss) $ 1,829 (2,009)
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Net earnings (loss) per share:
Basic $ .00 .00
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Diluted $ .00 .00
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Weighted average common shares outstanding:
Basic 4,273,500 4,273,500
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Diluted 4,423,134 4,273,500
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</TABLE>
See accompanying notes to consolidated financial statements.
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AMERICAN CLAIMS EVALUATION, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
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Jun.30,2000 Jun.30,1999
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<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) $ 1,829 (2,009)
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Adjustments to reconcile net earnings (loss)
to net cash provided by (used in) operating activities:
Depreciation and amortization 11,875 14,276
Changes in assets and liabilities:
Accounts receivable (5,100) (676)
Prepaid expenses (313) (1,554)
Accounts payable 402 2,735
Accrued expenses 1,983 (24,665)
Income taxes payable 924 (21,500)
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9,771 (31,384)
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Net cash provided by (used in) operating activities 11,600 (33,393)
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Cash flows from investing activities:
Purchases of marketable securities (70,791) -
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Net decrease in cash and cash equivalents (59,191) (33,393)
Cash and cash equivalents at beginning of period 7,452,395 8,209,421
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Cash and cash equivalents at end of period $7,393,204 8,176,028
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Supplemental disclosure of cash flow information:
Income taxes paid $ 1,076 22,500
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</TABLE>
See accompanying notes to consolidated financial statements.
5
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AMERICAN CLAIMS EVALUATION, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Unaudited)
General
The accompanying unaudited consolidated financial statements and footnotes have
been condensed and therefore do not contain all disclosures required by
generally accepted accounting principles. Reference should be made to the
Company's Annual Report to Shareholders for the year ended March 31, 2000. In
the opinion of management, all adjustments (consisting of normal recurring
accruals) have been made to present fairly the financial position, results of
operations and cash flows as of and for the periods shown.
Earnings (Loss) Per Share
The following table sets forth the computation of basic and diluted net earnings
(loss) per share for the three months ended June 30, 2000 and 1999:
<TABLE>
<CAPTION>
Three months Three months
ended 06/30/00 ended 06/30/99
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<S> <C> <C>
Numerator:
Net earnings (loss) $ 1,829 (2,009)
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Denominator:
Denominator for basic earnings (loss)
per share - weighted average shares 4,273,500 4,273,500
Effect of dilutive securities:
Stock options 149,634 -
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Denominator for diluted earnings (loss)
per share 4,423,134 4,273,500
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Basic earnings (loss) per share $ .00 $ .00
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Diluted earnings (loss) per share $ .00 $ .00
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</TABLE>
Employee stock options totaling 229,000 and 570,500 for the three months ended
June 30, 2000 and 1999, respectively, were not included in the net earnings
(loss) per share calculations because their effect would have been
anti-dilutive.
6
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Marketable Securities
Marketable securities at June 30, 2000 consist of equity securities which have
been classified as available for sale securities. As a result, they are recorded
at fair value which is determined based on quoted market prices. Unrealized
losses, net of taxes, are reported as accumulated other comprehensive loss as a
separate component of stockholders' equity.
Comprehensive Loss
Statement of Financial Accounting Standards (SFAS) No. 130, Reporting
Comprehensive Income, establishes standards for reporting and presentation of
comprehensive income and its components. SFAS No. 130 requires unrealized losses
on the Company's available for sale marketable securities to be included in
other comprehensive loss. Comprehensive loss for the three months ended June 30,
2000 and 1999 was $199,171 and $2,009, respectively.
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Item 2 - Management's Discussion and Analysis or Plan of Operations
Results of Operations - Three Months ended June 30, 2000 and 1999
Revenues for the three months ended June 30, 2000 totaled $270,342 as compared
with the $267,044 reported for the corresponding period ended June 30, 1999.
This represents an increase of approximately 1.2%.
The cost of services was 47.1% of revenues for the three months ended June 30,
2000, as compared to 44.6% of revenues in the same period last year due to a
larger percentage of cases being completed by higher priced rehabilitation
consultants.
Selling, general and administrative expenses for the quarter ended June 30, 2000
decreased slightly to $262,208 from $266,393 for the three months ended June 30,
1999.
Liquidity and Capital Resources
At June 30, 2000, the Company had working capital of $7,906,751 as compared to
working capital of $8,094,047 at March 31, 2000. The Company believes that it
has sufficient cash resources and working capital to meet its present cash
requirements.
The cost of marketable securities held at June 30, 2000 was $795,781. The fair
value of these equity securities is based on quoted market prices. Accordingly,
unrealized losses (net of applicable deferred taxes) of $269,600 have been
recorded to reduce the carrying value of these securities to market value and
are reported in accumulated other comprehensive loss as a separate component of
stockholders' equity.
During the three months ended June 30, 2000, cash flows used in investing
activities consisted of purchases of marketable securities totaling $70,791.
Subsequent to June 30, 2000, the Company purchased additional marketable
securities at a cost of $360,500.
The Company continues its review of strategic alternatives for maximizing
shareholder value. Potential acquisitions will be evaluated based on their
merits within its current line of business, as well as other fields.
Forward Looking Statements
Except for the historical information contained herein, the matters discussed in
this report on Form 10-QSB may contain forward-looking statements that involve
risks and uncertainties. The Company's actual results may differ materially from
the results discussed in the forward-looking statements. Factors that might
cause such a difference include, but are not limited to, general economic and
market conditions, the potential loss or termination of existing clients and
contracts and the ability of the Company to successfully identify and thereafter
consummate one or more acquisitions.
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PART II. OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K
(a) The following exhibits are filed with this Quarterly
Report on Form 10-Q.
27 Financial Data Schedule (filed with
electronically filed copy only).
(b) None.
9
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
AMERICAN CLAIMS EVALUATION, INC.
Date: July 31, 2000 By: /s/ Gary Gelman
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Gary Gelman
Chairman of the Board,
President and Chief Executive Officer
(Principal Executive Officer)
Date: July 31, 2000 By: /s/ Gary J. Knauer
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Gary J. Knauer
Chief Financial Officer, Treasurer
(Principal Financial and Accounting
Officer) and Secretary
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