<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 June 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 August 1, 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
June 30, 1997, and December 31, 1996 3
Condensed Consolidated Statement of Operations for the
Three Months ended June 30, 1997 and 1996, and the
Six Months ended June 30, 1997 and 1996 4
Condensed Consolidated Statement of Cash Flows for the
Six Months ended June 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
Signature Page 11
</TABLE>
- 2 -
<PAGE> 3
CAMERA PLATFORMS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(Unaudited)
ASSETS
<TABLE>
<CAPTION>
June 30, December 31,
1997 1966
------------ ------------
<S> <C> <C>
Current Assets
Cash $ 117,000 $ 181,000
Accounts receivable, less allowance for doubtful accounts
of $8,000 in 1997 and $34,000 in 1996 501,000 283,000
Inventories 289,000 269,000
Prepaid expenses 113,000 82,000
------------ ------------
Total current assets 1,020,000 815,000
Property and equipment, net of accumulated depreciation
and a $542,000 rental asset valuation allowance 1,435,000 1,498,000
Deposits and other noncurrent assets 40,000 118,000
------------ ------------
$ 2,495,000 $ 2,431,000
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 955,000 $ 565,000
Revolving credit facility 198,000 170,000
Current portion of long-term debt 250,000 --
Customer deposits 18,000 95,000
Other current liabilities 47,000 60,000
------------ ------------
Total current liabilities 1,468,000 890,000
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 (21,771,000) (21,507,000)
------------ ------------
Total shareholders' equity 1,027,000 1,291,000
------------ ------------
$ 2,495,000 $ 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 June 30, Six months ended June 30,
--------------------------------- ---------------------------------
1997 1996 1997 1996
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
Revenues
Sales $ 583,000 $ 425,000 $ 1,177,000 $ 851,000
Rentals 452,000 354,000 813,000 721,000
------------ ------------ ------------ -----------
1,035,000 779,000 1,990,000 1,572,000
------------ ------------ ------------ -----------
Expenses
Cost of sales 371,000 380,000 779,000 791,000
Cost of rentals 390,000 356,000 720,000 719,000
Selling, general and administrative 534,000 528,000 797,000 979,000
------------ ------------ ------------ -----------
1,295,000 1,264,000 2,296,000 2,489,000
------------ ------------ ------------ -----------
Operating loss (260,000) (485,000) (306,000)
(917,000)
Foreign currency exchange gain (loss) 12,000 3,000 23,000 17,000
Other income (expense) (25,000) (1,000) 19,000 (17,000)
------------ ------------ ------------ -----------
Net loss $ (273,000) $ (483,000) $ (264,000) $ (917,000)
============ ============ ============ ============
Net loss per share of common stock $ (0.02) $ (0.04) $ (0.02) $(0.07)
============ ============ ============ ============
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>
June 30, June 30,
Six months ended 1997 1996
- ---------------- --------- ---------
<S> <C> <C>
OPERATING ACTIVITIES
Net loss $(273,000) $(917,000)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 201,000 207,000
(Gain) on sale of equipment (95,000) --
Provision (credit) for doubtful accounts (26,000) (31,000)
Changes in assets and liabilities:
Accounts receivable (192,000) 435,000
Inventories (20,000) (28,000)
Prepaid expenses (31,000) --
Deposits and noncurrent assets 78,000 10,000
Accounts payable 390,000 (64,000)
Other current liabilities (90,000) (10,000)
--------- ---------
Net cash used in operating activities (49,000) (396,000)
--------- ---------
INVESTING ACTIVITIES
Purchases of property and equipment (251,000) (11,000)
Proceeds from sale of equipment 208,000 67,000
--------- ---------
Net cash provided by (used in) investing activities (43,000) 56,000
--------- ---------
FINANCING ACTIVITIES
Proceeds from borrowings of short-term debt 170,000 646,000
Principal payment on short-term debt (142,000) --
Principal payment on note payable -- (379,000)
Net cash provided by financing activities 28,000 267,000
Net (decrease) in cash (64,000) (73,000)
Cash at beginning of year 181,000 190,000
--------- ---------
Cash at end of period $ 117,000 $ 117,000
========= =========
Supplemental disclosure of cash flow information
Cash paid during the period for:
Interest $ 21,000 $ 19,000
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 six month period ended June 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>
June 30, December 31,
1997 1996
-------- --------
<S> <C> <C>
Raw materials $ -- $ --
Work in process 43,000 --
Finished goods 246,000 269,000
-------- --------
$289,000 $269,000
======== ========
</TABLE>
NOTE 3 PROPERTY AND EQUIPMENT
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
---------- ----------
<S> <C> <C>
Rental equipment............................... $4,836,000 $4,770,000
Machinery and equipment........................ 318,000 314,000
Leasehold improvements......................... 43,000 15,000
Furniture and fixtures......................... 62,000 60,000
Automobiles and trucks......................... 57,000 57,000
Construction in progress....................... -- 23,000
---------- ----------
5,316,000 5,239,000
Less accumulated depreciation and
amortization 3,339,000 3,199,000
Less rental asset valuation allowance 542,000 542,000
---------- ----------
$1,435,000 $1,498,000
========== ==========
</TABLE>
Accumulated depreciation and amortization pertaining to rental equipment
amounted to $2,955,000 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 12.25 % at June 30, 1997) and monthly principal
reductions of $17,000, maturing October 15, 1997. Advances under the credit
facility totaled $198,000 at June 30, 1997 and $170,000 at December 31, 1996 and
are secured by substantially all the assets of the Company.
NOTE 5 LONG-TERM DEBT Long-term debt consisted of the following:
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
--------- ---------
<S> <C> <C>
Due to former shareholder, unsecured, interest accruing
at Bank of Boston reference rate (8.5% at June 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.
At June 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
- 7 -
<PAGE> 8
CAMERA PLATFORMS INTERNATIONAL, INC.
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 June 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 June 30, 1997.
The Company had outstanding balances under the Foothill Credit Line of
$198,000 and $170,000 as of June 30, 1997 and December 31, 1996, respectively.
The Company believes that working capital generated by operations, along
with the remaining availability 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 June 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 June 30, 1997, with
the three months ended June 30, 1996, and the six months ended June 30, 1997,
with the six months ended June 30, 1996.
The Company's revenue for the second quarter and first six months of 1997
increased by 33% and 27%, respectively, as compared with the corresponding
periods of the prior year. Second quarter sales revenue increased by 37% over
the comparative period of 1996. Year-to-date sales revenue increased by 38%.
These increases came despite the sale of the Lightmaker division in December,
1996. For the second quarter of 1996, Lightmaker sales represented 43% of the
Company's sales revenue. The year-to-date increase compared with 1996, despite
the loss of the Lightmaker revenues, was due to substantial across-the-board
increases in dolly, crane, track, accessory and remote head sales.
International customers accounted for 72% of sales for the second quarter,
as compared with 45% in the second quarter of 1995. Year-to-date, international
customers accounted for 66% of sales, as compared with 44% in the corresponding
period of 1996. The percentage of international sales increased during 1996 as a
result of strong Canadian and South American demand for dollies, cranes and
remote heads.
- 9 -
<PAGE> 10
CAMERA PLATFORMS INTERNATIONAL, INC.
Rental revenue for the second quarter and six months increased by 28% and
13%, respectively, as compared with the corresponding periods in the prior year.
These increases resulted from (1) the availability in 1997 of three camera cars
that had been removed from the rental fleet during the 1996 reporting period due
to their non compliance with California emission control requirements, (2)
rentals of remote heads and track systems, and (3) increases in crane rentals.
Gross margin on sales increased from 11% in the second quarter of 1996 to
36% in the current quarter. Year-to-date sales gross margins increased from 7%
in 1996 to 34% in 1997. The higher margins in the current year are due primarily
to new sales policies regarding discounts and the poor margins reported in
previous periods on Lightmaker sales. Rental gross margins increased from 0% in
the second quarter of 1996 to 14% in the current quarter. Year-to-date rental
gross margins increased from 0% to 11%. The increases in gross margin are due to
lower operating overhead in the rental departments together with lower truck
maintenance expenses.
Selling, general and administrative expense for the second quarter
increased by approximately 1%. This is due primarily to the professional,
freight and travel expenses associated with the Company's successful defense of
the Leonard Chapman Studio's suit (see "litigation") regarding the Company's new
line of "blue" dollies. Expenses associated with the litigation totaled $227,000
during the quarter. The Company believes that the money expended to prevail in
the court action will be recouped during this fiscal year, and that subsequent
sales and rentals of the dollies will significantly enhance the Company's
performance and market penetration. Other significant changes were a $111,000
reduction in trade show and advertising expense, and a $24,000 reduction in
corporate maintenance and repairs.
Foreign currency exchange gains were due to the record value of the dollar
against the Deutsche mark, decreasing the cost of products purchased for resale
from Panther GmbH.
The Company's net loss decreased $210,000 (44%) in the second quarter, and
$653,000 (71%) year-to-date. The net loss per share for the quarter decreased
$0.04 to $0.02, and the net loss per share for the six months decreased from
$0.07 to $0.02.
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.
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.
PART II - OTHER INFORMATION
Item 1. Litigation.
On August 9, 1996, the Company was served with a complaint in an action
entitled Fred Neva et al. v. Camera Platforms International, Inc., et al., which
was filed in the United States District Court, District of Minnesota, 4th
Division (Case Number 4-96 Civ. 776). The complaint was filed by a number of
shareholders of the Company against the Company and certain of its former
officers and directors. On May 30, 1997, the complaint was dismissed with
prejudice by the Court.
On April 4, 1997, Leonard Studio Equipment, Inc., (manufacturers of the
Chapman dolly line) filed a contempt action in New Jersey against Cinemeccanica
Italiana, Srl., designers of the Company's "Blue" dollies introduced at its
March, 1997 open house. Leonard Studio Equipment claimed that the dollies were
in contempt of a 1991 permanent injunction that protected Chapman from copycat
products. On July 10, 1997, the court found that the Company is free to market
the "Blue" dollies in the United States, as the dollies are significantly
different from the products involved in the 1991 case, and therefore are not
subject to the injunction.
Item 6. Exhibits and Reports on Form 8-K.
There were no reports on Form 8-K for the three months ended June 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: August 1, 1997 Roy Atlas
President and Chief Operating Officer
/s/ RONALD J. RIDDLE
----------------------------------------
Date: August 1, 1997 Ronald J. Riddle
Chief Financial Officer
- 11 -
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S CONSOLIDATED STATEMENTS OF EARNINGS AND CONSOLIDATED BALANCE SHEETS
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> APR-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 117,000
<SECURITIES> 0
<RECEIVABLES> 509,000
<ALLOWANCES> (8,000)
<INVENTORY> 289,000
<CURRENT-ASSETS> 1,020,000
<PP&E> (4,774,000)
<DEPRECIATION> (3,339,000)
<TOTAL-ASSETS> 2,495,000
<CURRENT-LIABILITIES> 1,468,000
<BONDS> 0
0
0
<COMMON> 6,000
<OTHER-SE> 1,021,000
<TOTAL-LIABILITY-AND-EQUITY> 2,495,000
<SALES> 583,000
<TOTAL-REVENUES> 1,035,000
<CGS> 371,000
<TOTAL-COSTS> 1,303,000
<OTHER-EXPENSES> (9,000)
<LOSS-PROVISION> (8,000)
<INTEREST-EXPENSE> 21,000
<INCOME-PRETAX> (272,000)
<INCOME-TAX> 1,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (273,000)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
</TABLE>
