<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[Mark one]
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended SEPTEMBER 30, 1997
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: 0-14675
CAMERA PLATFORMS INTERNATIONAL, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 95-4024550
- --------------------------------- ---------------------------------
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
10909 Vanowen Street, North Hollywood, California, 91605
------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(818) 623-1700
----------------------------------------------------
(Registrant's 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 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 [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of November 3, 1997.
Common Stock $.0005 par value 12,418,228
----------------------------- ------------------
(Class) (Number of shares)
<PAGE> 2
CAMERA PLATFORMS INTERNATIONAL, INC.
INDEX
<TABLE>
<CAPTION>
Page
Number
------
<S> <C>
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements:
Condensed Consolidated Statement of Financial Position
at September 30, 1997, and December 31, 1996 3
Condensed Consolidated Statement of Operations for the
Three Months ended September 30, 1997 and 1996, and
the Nine Months ended September 30, 1997 and 1996 4
Condensed Consolidated Statement of Cash Flows for the
Nine Months ended September 30, 1997 and 1996 5
Notes to Condensed Consolidated Unaudited Financial
Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II. OTHER INFORMATION 11
Item 1. Legal Proceedings 11
Signature Page 11
</TABLE>
- 2 -
<PAGE> 3
CAMERA PLATFORMS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(Unaudited)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
SEPTEMBER 30, December 31,
1997 1996
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 18,000 $ 181,000
Accounts receivable, less allowance for doubtful accounts
of $8,000 in 1997 and $34,000 in 1996 323,000 283,000
Inventories 258,000 269,000
Prepaid expenses 98,000 82,000
----------- ----------
TOTAL CURRENT ASSETS 697,000 815,000
Property and equipment, net of accumulated depreciation
and a $542,000 rental asset valuation allowance 1,664,000 1,498,000
Deposits and other noncurrent assets 40,000 118,000
----------- ----------
$2,401,000 $2,431,000
===============================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 687,000 $ 565,000
Revolving credit facility 347,000 170,000
Current portion of long-term debt 250,000 --
Customer deposits 25,000 95,000
Other current liabilities 55,000 60,000
------------ ------------
TOTAL CURRENT LIABILITIES 1,364,000 890,000
Long-term debt, net of current maturities -- 250,000
SHAREHOLDERS' EQUITY
Common stock-$.0005 par value; 15,000,000 shares authorized; shares
issued and outstanding: 12,418,228 in 1997 and 1996 6,000 6,000
Additional paid-in capital 22,792,000 22,792,000
Accumulated deficit (21,761,000) (21,507,000)
------------ ------------
TOTAL SHAREHOLDERS' EQUITY 1,037,000 1,291,000
------------- -----------
$ 2,401,000 $ 2,431,000
===============================================================================================
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
- 3 -
<PAGE> 4
CAMERA PLATFORMS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
Three months ended Nine months ended
September 30, September 30,
1997 1996 1997 1996
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUES
Sales $ 309,000 $ 588,000 $ 1,486,000 $1,439,000
--------- --------- ----------- ----------
Rentals 495,000 464,000 1,308,000 1,186,000
--------- --------- ----------- ----------
804,000 1,052,000 2,794,000 2,625,000
--------- --------- ----------- ----------
EXPENSES
Cost of sales 188,000 484,000 967,000 1,275,000
Cost of rentals 408,000 362,000 1,128,000 1,082,000
Selling, general and administrative 189,000 352,000 986,000 1,331,000
--------- --------- ----------- ----------
785,000 1,198,000 3,081,000 3,688,000
--------- --------- ----------- ----------
Operating income (loss) 19,000 (146,000) (287,000) (1,063,000)
Foreign currency exchange income 17,000 -- 40,000 17,000
Other income (expense) (26,000) (43,000) (7,000) (59,000)
--------- --------- ----------- ----------
NET INCOME (LOSS) $ 10,000 ($ 189,000) ($ 254,000) ($1,105,000)
===========================================================================================
NET INCOME (LOSS)
PER SHARE OF COMMON STOCK $0.01 ($0.01) ($0.02) ($0.09)
===========================================================================================
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 12,418,228 12,418,228 12,418,228 12,418,228
===========================================================================================
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
- 4 -
<PAGE> 5
CAMERA PLATFORMS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
Nine months ended SEPTEMBER 30, 1997 September 30, 1996
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net loss ($ 254,000) ($ 1,105,000)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 305,000 265,000
Gain on sale of equipment (174,000) --
Provision (credit) for doubtful accounts (26,000) (17,000)
Changes in assets and liabilities:
Accounts receivable (14,000) 156,000
Inventories 11,000 (22,000)
Prepaid expenses (16,000) (41,000)
Deposits and noncurrent assets 78,000 4,000
Accounts payable and accrued expenses 122,000 96,000
Other current liabilities (75,000) 20,000
- ----------------------------------------------------------------------------------------------
NET CASH USED IN OPERATING ACTIVITIES (43,000) (644,000)
- ----------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Purchases of property and equipment (673,000) (106,000)
Proceeds from sale of equipment 376,000 226,000
- ----------------------------------------------------------------------------------------------
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES (297,000) 120,000
- ----------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Proceeds from borrowings of short-term debt 330,000 746,000
Principal payment on note payable (153,000) (379,000)
- ----------------------------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 177,000 367,000
- ----------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH (163,000) (157,000)
Cash at beginning of year 181,000 190,000
CASH AT END OF PERIOD $ 18,000 $ 33,000
==============================================================================================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ 31,000 $ 21,000
Income taxes 1,000 2,000
==============================================================================================
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
- 5 -
<PAGE> 6
CAMERA PLATFORMS INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 -- BASIS OF PRESENTATION
The accompanying unaudited condensed 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
Rule 10-01 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. In the opinion of management, all normal
recurring adjustments considered necessary for a fair presentation have been
included. Operating results for the nine month period ended September 30, 1997
are not necessarily indicative of the results that may be expected for the year
ending December 31, 1997. For further information refer to the financial
statements and footnotes thereto included in the Company's annual report on Form
10-K for the year ended December 31, 1996.
NOTE 2 -- INVENTORIES
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
------------- ------------
<S> <C> <C>
Raw materials........................................ $ -- $ --
Work in process...................................... 19,000 --
Finished goods....................................... 239,000 269,000
---------- ----------
$ 258,000 $ 269,000
========== =========
</TABLE>
<TABLE>
<CAPTION>
NOTE 3 -- PROPERTY AND EQUIPMENT
September 30, December 31,
1997 1996
------------- ------------
<S> <C> <C>
Rental equipment.......................................... $5,098,000 $4,770,000
---------- ----------
Machinery and equipment................................... 325,000 314,000
Leasehold improvements.................................... 57,000 15,000
Furniture and fixtures.................................... 62,000 60,000
Automobiles and trucks.................................... 57,000 57,000
Construction in progress.............................. -- 23,000
---------- ----------
5,599,000 5,239,000
Less accumulated depreciation and amortization............ 3,393,000 3,199,000
Less rental asset valuation allowance..................... 542,000 542,000
---------- ----------
$1,664,000 $1,498,000
</TABLE>
Accumulated depreciation and amortization pertaining to rental equipment
amounted to $2,997,000 in 1997 and $2,832,000 in 1996.
- 6 -
<PAGE> 7
CAMERA PLATFORMS INTERNATIONAL, INC.
NOTE 4 -- REVOLVING CREDIT FACILITY
The Company has an $850,000 revolving credit facility with interest at reference
rate plus 4% (effective rate of 14.9% at September 30, 1997) and monthly
principal reductions of $17,000, which matured at October 15, 1997. The Company
is currently operating under a sixty day extension while it negotiates a new
credit facility. Advances under the credit facility totaled $347,000 at
September 30, 1997 and $170,000 at December 31, 1996 and are secured by
substantially all the assets of the Company.
<TABLE>
<CAPTION>
NOTE 5 -- LONG-TERM DEBT
Long-term debt consisted of the following:
September 30, December 31,
1997 1996
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Du to former shareholder, unsecured, interest accruing
at Bank of Boston reference rate (8.5%) at
September 30, 1997), principal and interest due
April 11, 1998. $ 250,000 $250,000
- ----------------------------------------------------------------------------------------------
250,000 250,000
Less current maturities (250,000) --
--------- --------
$ -- $250,000
========
</TABLE>
NOTE 6 -- CONTINGENCIES
Purchase Commitments
In 1993, the Company entered into a five-year distribution agreement with
Panther GmbH. This agreement may be extended to eight years if certain
conditions are met at the end of the distribution term and subsequent annual
extension periods. Pursuant to the agreement, the Company has been granted
exclusive distribution rights for all Panther products in North and South
America. The distribution agreement has certain minimum purchase requirements.
The Company has met its minimum purchase commitments under the agreement. The
minimum purchase commitment for 1997 is DM 1,200,000 ($706,000).
NOTE 7 -- INCOME TAXES
The Company utilizes the liability method to account for income taxes. Under
this method, deferred tax assets and liabilities are determined based on
differences between financial reporting and tax bases of assets and liabilities
and are measured using the enacted tax rates and laws expected to apply when the
differences are expected to reverse.
- 7 -
<PAGE> 8
CAMERA PLATFORMS INTERNATIONAL, INC.
At September 30, 1997, the Company has federal net operating loss carry forwards
of approximately $22 million for tax purposes, which expire from 2000 to 2011.
Because of statutory ownership changes, the amount of net operating losses which
may be utilized in future years is subject to significant annual limitations.
The Company has California net operating loss carry forwards of approximately $7
million for tax purposes, which expire from 1997 to 2001. The Company also has
federal research and development credits of approximately $64,000, expiring in
2001 and 2002, which may be used to offset future tax liabilities. At September
30, 1997, total deferred tax assets, consisting principally of net operating
loss carry forwards, amounted to approximately $8 million. For financial
reporting purposes, a valuation allowance has been recognized in an amount equal
to such deferred tax assets due to the uncertainty surrounding their ultimate
realization.
The effective tax rate differs from the U.S. Federal statutory rate principally
due to the valuation allowance recognized due to the uncertainty surrounding the
ultimate realization of deferred tax assets.
- 8 -
<PAGE> 9
CAMERA PLATFORMS INTERNATIONAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Unaudited)
LIQUIDITY AND CAPITAL RESOURCES
In October, 1996, the Company obtained a line of credit from Foothill
Capital Corporation in the amount of $850,000 (the "Foothill Credit Line"). The
Foothill Credit Line has a term of one year and operates as a revolving line of
credit. The Foothill Credit Line requires monthly principal pay downs in the
amount of $17,000, together with a monthly interest payment, all of which were
current at September 30, 1997.
The Company had outstanding balances under the Foothill Credit Line of
$347,000 and $170,000 as of September 30, 1997 and December 31, 1996,
respectively.
The Foothill Credit Line matured on October 14, 1997, and the Company is
currently operating under a sixty day extension while it negotiates the terms of
a new credit facility. The Company believes that working capital generated by
operations, along with availability of credit under the Foothill Credit Line or
a successor credit line, will continue to provide sufficient funds to meet the
Company's operating cash requirements for the next twelve months. Based on the
Company's performance as of September 30, 1997, the Company believes that it
will not have difficulty either renewing the Foothill Credit Line or obtaining a
comparable line of credit from another lending institution on similar or more
favorable terms.
RESULTS OF OPERATIONS
The following analysis compares the three months ended September 30,
1997, with the three months ended September 30, 1996, and the nine months ended
September 30, 1997, with the nine months ended September 30, 1996.
Third quarter 1997 results compared with third quarter 1996
The Company's revenue for the third quarter decreased by 24% compared
with the same period of 1996. Excluding revenue for the Lightmaker division
which was sold in December, 1996, total sales and rental revenues were
essentially unchanged. Dolly, crane and accessory rentals were down 17% compared
with the same period last year. Camera car rentals increased by 33%.
The gross margin increased from 20% of revenues to 26% of revenues due
to the sale of the Lightmaker division, which had a 13% gross margin for the
third quarter of 1996. The gross margin on dolly, crane and accessory sales
increased to 39% in 1997 from 11% in 1996, primarily through sales of the
Enlouva crane and used rental equipment. The gross margin on camera car rentals
- 9 -
<PAGE> 10
CAMERA PLATFORMS INTERNATIONAL, INC.
increased from 18% to 35%, as a result of increased revenues.
Selling, general and administrative expenses decreased primarily due to
an agreement by Cinemeccanica Italiana, Srl. to recompense the Company for 50%
of the costs (approximately $190,000 at September 30, 1997) associated with the
Company's successful defense of the contempt proceeding brought against
Cinemeccanica Italiana, Srl. by Leonard Studio Equipment, Inc. (see
"litigation"). The credit against legal fees offset expenses accrued by the
Company for the second quarter of 1997.
The Company continued to experience foreign currency exchange gains
because of the strength of the U.S. Dollar against European currencies.
Net income for the quarter was $10,000 compared with a $189,000 loss for the
same period of 1996.
Nine months ended September 30, 1997 compared with nine months ended September
30, 1996
The Company's year-to-date revenues were 6% greater than 1996. Excluding
the Lightmaker division from the third quarter of 1996, revenues on the
Company's remaining lines of business increased 43% from a year ago.
Year-to-date sales of dollies, cranes and accessories increased $657,000, or
79%. Camera car rentals increased $175,000, or 29%. Year-to-date, cost of sales
of dollies, cranes and accessories decreased from 85% of revenues in 1996 to 65%
in 1997. Cost of camera car rentals decreased from 90% of revenues in 1996 to
68% in 1997.
Selling expenses were $110,000 lower than the same period in 1997.
General and administrative expenses decreased by $200,000, primarily through
lower payroll and legal and accounting expenses.
The year-to-date net loss of $254,000 compares favorably with the
$1,105,000 loss experienced by the Company for the first nine months of 1996.
International Sales
International customers accounted for 90% of sales for the third
quarter, as compared with 12% in the third quarter of 1996. Year-to-date,
international customers accounted for 71% of sales, as compared with 31% in the
corresponding period of 1996. The percentage of international sales increased
during 1997 as a result of strong Canadian and South American demand for
dollies, cranes and remote heads and lower domestic sales.
All international sales are denominated and remitted in U.S. dollars,
and foreign transactions are generally settled within a short period of time.
Accordingly, the Company does not anticipate that foreign currency fluctuations
will have a material effect on operations in the next twelve months.
- 10 -
<PAGE> 11
CAMERA PLATFORMS INTERNATIONAL, INC.
Inflation
Inflation has not had a material impact on the Company's operations to
date, and the Company believes it will not have a material effect on operations
in the next twelve months.
PART II - OTHER INFORMATION
Item 1. Litigation.
As previously reported, the Company prevailed on July 10, 1997 in an
action brought by Leonard Studio Equipment, Inc (manufacturers of the Chapman
dolly line) against Cinemeccanica Italiana, Srl., designers of the Company's
"Blue" line of dollies. Leonard Studio Equipment, Inc. has filed an appeal in
the matter. Based on the opinion of counsel, the Company believes Leonard Studio
Equipment's appeal will be unsuccessful.
On July 2, 1997, the platform of a Panther Pegasus crane which had been
leased by the Company to Mighty Joe Young Productions, Inc. ("MJY") fell,
injuring the two operators who were on the platform. The Company's insurance
carrier has assumed the defense of the matter, which is in the preliminary
stages of litigation. The Company intends to vigorously defend against the
claims, and believes that the cause of the accident was due to operator error.
In addition to its own insurance policies, the Company is an additional named
insured on the policies of MJY with respect to the lease of the crane.
Management believes that exposure, if any, is fully covered by insurance.
Item 6. Exhibits and Reports on Form 8-K.
There were no reports on Form 8-K for the three months ended September
30, 1997.
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.
CAMERA PLATFORMS INTERNATIONAL, INC.
/s/ ROY ATLAS
---------------------------------------
Date: November 3, 1997 Roy Atlas
President and Chief Operating Officer
/s/ RONALD J. RIDDLE
---------------------------------------
Date: November 3, 1997 Ronald J. Riddle
Chief Financial Officer
- 11 -
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET, THE CONSOLIDATED STATEMENT OF INCOME AND THE
CONSOLIDATED STATEMENTS OF CASH FLOW AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<EXCHANGE-RATE> 1
<CASH> 18,000
<SECURITIES> 0
<RECEIVABLES> 331,000
<ALLOWANCES> (8,000)
<INVENTORY> 258,000
<CURRENT-ASSETS> 697,000
<PP&E> 5,057,000
<DEPRECIATION> (3,393,000)
<TOTAL-ASSETS> 2,401,000
<CURRENT-LIABILITIES> 1,364,000
<BONDS> 0
0
6
<COMMON> 6,000
<OTHER-SE> 1,031,000
<TOTAL-LIABILITY-AND-EQUITY> 2,401,000
<SALES> 309,000
<TOTAL-REVENUES> 821,000
<CGS> 188,000
<TOTAL-COSTS> 785,000
<OTHER-EXPENSES> 11,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 15,000
<INCOME-PRETAX> 10,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 10,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,000
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
