<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 MARCH 31, 1998
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 May 15, 1998.
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 Balance Sheets
at March 31, 1998, and December 31, 1997 3
Condensed Consolidated Statements of Operations for the
Three Months ended March 31, 1998 and 1997 4
Condensed Consolidated Statement of Cash Flows for the
Three Months ended March 31, 1998 and 1997 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 8
PART II. OTHER INFORMATION 9
Signature Page 12
</TABLE>
-2-
<PAGE> 3
CAMERA PLATFORMS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
MARCH 31, December 31,
1998 1997
(Unaudited) (Note)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 70,000 $ 77,000
Accounts receivable, less allowance for doubtful accounts
of $46,000 in 1998 and 1997 330,000 309,000
Inventories 581,000 322,000
Prepaid expenses and other current assets 124,000 98,000
------------ ------------
TOTAL CURRENT ASSETS 1,105,000 716,000
Property and equipment, net 1,835,000 1,446,000
Deposits and other assets 103,000 246,000
------------ ------------
$ 3,043,000 $ 2,498,000
===============================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 692,000 $ 478,000
Accrued liabilities 54,000 52,000
Current maturities of long-term debt 560,000 560,000
Note payable 30,000 --
Convertible promissory note 150,000 --
Customer deposits 57,000 31,000
Deferred revenue 19,000 12,000
------------ ------------
TOTAL CURRENT LIABILITIES 1,562,000 1,133,000
Long-term debt, net of current maturities 1,418,000 811,000
Commitments and contingencies
SHAREHOLDERS' EQUITY
Common stock - $.0005 par value; 15,000,000 shares authorized; shares
issued and outstanding: 12,418,228 6,000 6,000
Additional paid-in capital 22,792,000 22,792,000
Accumulated deficit (22,735,000) (22,244,000)
------------ ------------
TOTAL SHAREHOLDERS' EQUITY 63,000 554,000
------------ ------------
$ 3,043,000 $ 2,498,000
===============================================================================================================
</TABLE>
Note: The balance sheet at December 31, 1997 was derived from the audited
financial statements at that date.
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
-3-
<PAGE> 4
CAMERA PLATFORMS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended MARCH 31, 1998 March 31, 1997
- -------------------------------------------------------------------------------------
<S> <C> <C>
REVENUES
Net product sales $ 61,000 $ 686,000
Revenues from rental operations 532,000 361,000
------------ ------------
593,000 1,047,000
------------ ------------
EXPENSES
Cost of sales 35,000 506,000
Cost of rental operations 498,000 331,000
Selling, general and administrative 491,000 262,000
Interest 65,000 11,000
------------ ------------
1,089,000 1,110,000
------------ ------------
Operating loss (496,000) (63,000)
Other income, net 5,000 72,000
------------ ------------
NET INCOME (LOSS) $ (491,000) $ 9,000
====================================================================================
BASIC AND DILUTED INCOME (LOSS) PER SHARE ($0.04) $ 0.00
====================================================================================
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 12,418,228 12,418,228
====================================================================================
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
-4-
<PAGE> 5
CAMERA PLATFORMS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended MARCH 31, 1998 March 31, 1997
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) ($491,000) $ 9,000
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 97,000 98,000
Gain on sale of equipment -- (20,000)
Provision (credit) for doubtful accounts -- (28,000)
Changes in assets and liabilities:
Accounts receivable (21,000) (117,000)
Inventories (259,000) 86,000
Prepaid expenses and other current assets (26,000) 7,000
Deposits and other assets (15,000) 32,000
Accounts payable 214,000 6,000
Accrued liabilities 2,000 (67,000)
Customer deposits 26,000 (44,000)
Deferred revenue 7,000 --
NET CASH USED IN OPERATING ACTIVITIES (466,000) (38,000)
INVESTING ACTIVITIES
Purchases of property and equipment (337,000) (138,000)
Net proceeds from sale of equipment 9,000 56,000
NET CASH USED IN INVESTING ACTIVITIES (328,000) (82,000)
FINANCING ACTIVITIES
Proceeds from borrowings from short-term debt 190,000 79,000
Proceeds from borrowings under long-term credit facility 707,000 --
Repayment of borrowings from short-term debt (10,000) --
Repayment of borrowings under long-term credit facility (100,000) --
NET CASH PROVIDED BY FINANCING ACTIVITIES 787,000 79,000
NET DECREASE IN CASH (7,000) (41,000)
Cash at beginning of period 77,000 181,000
CASH AT END OF PERIOD $ 70,000 $ 140,000
=============================================================================================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ 34,000 $ 10,000
Income taxes -- --
In January 1998 deposits totaling $144,000 were used to acquire Third Encore
=============================================================================================
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
-5-
<PAGE> 6
CAMERA PLATFORMS INTERNATIONAL, INC.
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements of
Camera Platforms International Inc. (the "Company" or "Shotmaker") 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. In the opinion of management, all normal recurring
adjustments considered necessary for a fair presentation have been included.
Operating results for the three month period ended March 31, 1998, are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1998. 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, 1997.
NOTE 2 - INVENTORIES
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
--------- ------------
<S> <C> <C>
Work in progress ..................... $319,000 $185,000
Finished goods ....................... 262,000 137,000
-------- --------
$581,000 $322,000
======== ========
</TABLE>
NOTE 3 - PROPERTY AND EQUIPMENT
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
---------- ----------
<S> <C> <C>
Equipment available for sale ................. $5,240,000 $4,930,000
Machinery and equipment ...................... 518,000 350,000
Leasehold improvements ....................... 63,000 60,000
Furniture and fixtures ....................... 73,000 62,000
Vehicles ..................................... 57,000 57,000
---------- ----------
5,951,000 5,459,000
Less accumulated depreciation and amortization 3,574,000 3,471,000
Less rental asset valuation allowance ........ 542,000 542,000
---------- ----------
$1,835,000 $1,446,000
========== ==========
</TABLE>
NOTE 4 - LONG TERM DEBT
The Company has an $2.5 million credit facility with Foothill Capital
Corporation ("Foothill"), consisting of (1) $1,250,000 term loan, (2) $750,000
revolving line of credit, and (3) $500,000 inventory equipment line of credit,
with interest at reference rate plus 2% (effective rate of 10.5 % at March 31,
1998) and monthly principal reductions of $25,000, maturing January 2000.
Advances under the credit facility totaled $1,732,000 and $1,100,000 at March
31, 1998 and December 31, 1997. Loans under the credit facility are
cross-collateralized and are
-6-
<PAGE> 7
CAMERA PLATFORMS INTERNATIONAL, INC.
secured by substantially all the assets of the Company.
The Company is financing its remaining obligation on its purchase of the
worldwide rights to the "Enlouva" patents and trademark over thirty-five equal
monthly installments of $1,000, including interest at 10%. The note matures
December 1999. In the event of default, the seller is entitled to collect money
damages, restoration to the right of the name "Enlouva", the right to
manufacture and sell cranes under the "Enlouva" name, and the restoration of
parts shipped.
The Company also issued a $150,000 convertible promissory note with
interest accruing at prime plus 2% (10 1/2% at March 31, 1998) payable
monthly. Under the terms of the note, the principal amount is convertible into
up to 600,000 shares of the Company's stock. Proceeds from the note were used to
finance the Company's acquisition of Third Encore. See Note 6.
As part of a stock purchase agreement entered into with the former
majority shareholders of the Company, the Company is obligated to pay UST Inc.
and UST Enterprises $250,000 plus interest accrued thereon, all of which was due
and payable April 11, 1998. The obligation is unsecured. The Company is in
negotiations to extend the term of the loan.
NOTE 5 - CONTINGENCIES
In 1993, the Company entered into a five-year distribution agreement
with Panther GmbH ending in July 1998. 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 through the 1997 contract year. The minimum purchase commitment for
1998 contract year is $660,000.
NOTE 6 - ACQUISITIONS
Effective January 1, 1998, a wholly owned subsidiary of the Company,
Shotmaker Sound Inc., completed the purchase of the assets and business of Third
Encore ("3E"), a company which provides rehearsal studio, storage and cartage
services to recording artists. The $160,000 acquisition was financed through a
$150,000 loan which bears interest at 10 1/2 percent and which is convertible
into up to 600,000 shares of the commons stock of the Company. In conjunction
with the purchase, the former shareholder of 3E entered into a five year
agreement not to compete with the Company, which requires payments of additional
$30,000, paid quarterly during in 1998. The Company also assumed 3E's existing
building leases which require combined monthly rental payments of $18,400
through January 2003.
The pro forma results of operations for the three months ended March 31,
1998 and 1997, assuming consummation of the purchase as of January 1, 1997, are
as follows:
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<PAGE> 8
CAMERA PLATFORMS INTERNATIONAL, INC.
<TABLE>
<CAPTION>
Three Months Ended
March 31, March 31,
1998 1997
---------- ----------
<S> <C> <C>
Net revenue $ 593,000 $1,147,000
Net income (loss) (491,000) 12,000
Basic and diluted income per share ($0.04) $ 0.00
</TABLE>
The above pro forma information includes the operations of the Company and its
wholly owned subsidiary Shotmaker Sound, Inc. for both periods presented.
NOTE 6 - SUBSEQUENT EVENTS
On April 6, 1998, the Company acquired substantially all the assets of
Production Services - Atlanta ("PSA") a provider of lighting and grip equipment
in Atlanta, GA and Nashville, TN. The $2.1 million acquisition price was paid by
a combination of cash, debt and equity. $1 million was paid at the closing; the
Company issued the former shareholders of PSA a $500,000 promissory note with
interest at 8% payable quarterly and principal due in three years, together with
600,000 shares of the Company's common stock. Financing of the PSA acquisition
was provided through an additional $2.55 million acquisition facility with
Foothill. Advances under this line totaled $1.25 million at March 31, 1998.
Principal is payable in sixty equal monthly installments, with the balance due
in January, 2000. Interest accrues at the reference rate plus 2% (10.5% at March
31, 1998) and is payable monthly. All the Foothill loan facilities (Note 4) are
cross collateralized and are secured by substantially all the assets of the
Company.
-8-
<PAGE> 9
CAMERA PLATFORMS INTERNATIONAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Unaudited)
RESULTS OF OPERATIONS
The following analysis compares the three months ended March 31, 1998,
with the three months ended March 31, 1997.
The Company's revenue for the first quarter of 1998 decreased by
$454,000 or 43% as compared with the corresponding period of the prior year.
First quarter 1998 net product sales decreased by $625,000 or 91% as
compared to the corresponding period of the prior year. This decrease is due
primarily to production delays in the manufacturing of the Shotmaker Blue dolly.
The Company is currently shipping dollies manufactured in Europe and expects
U.S. production to commence in June, 1998.
Gross margin on net product sales for the three month period ended March
31, 1998 increased $26,000 or 43% from the prior comparable period due to higher
profit margin on sales of a new line of dolly track manufactured by the Company.
For the three month period ended March 31, 1998 revenues from rental
operations increased by $171,000 or 47% as compared to the corresponding period
of the prior year. Rentals generated by operations acquired subsequent to the
first quarter of 1997 accounted for $160,000 of revenues from rental operations
for the first quarter 1998. The overall increase in rental revenues was achieved
in spite of the fact that film production in Los Angeles County was down due to
rainy weather and uncertainty surrounding a potential actor's strike. The
uncertainty was resolved by a tentative pact between the Screen Actor's Guild
and Hollywood producers in April 1998.
Gross margin on rental revenues for the three month period ended March
31, 1998 decreased $4,000 or 2% from the prior comparable period. Gross margin
generated by operations acquired subsequent to the first quarter of 1997
accounted for $77,000 or 48% of revenues from rental operations for the first
quarter 1998.
Selling, general and administrative expense for the three month period
ended March 31, 1998 increased by $229,000 or 87% compared to the corresponding
period of the prior year. The increase was required to support the increase in
operations and is due mainly to higher payroll and related costs, insurance and
new sales and marketing programs.
Interest expense for the three month period ended March 31, 1998
increased by $54,000 or 491% compared to the corresponding period of the prior
year. The increase in interest costs is
-9-
<PAGE> 10
CAMERA PLATFORMS INTERNATIONAL, INC.
mainly due to additional debt incurred related to the Company's acquisition in
January 1998 and to the Company's continued capital investment in existing
operations.
Other income for the three month period ended March 31, 1998 decreased
by $67,000 or 93% as compared to the corresponding period of the prior year. The
large amount in 1997 was associated with the one-time sale of certain
crab-to-steer technology developed by the Company to Panther GmbH, increased by
strong foreign currency translation gains and offset by higher interest expense.
The net loss for the three month period ended March 31, 1998 was
($491,000) compared with net income of $9,000 in the first quarter of 1997.
Basic and diluted loss per share of common stock decreased to ($0.04) loss per
share in the first quarter of 1998 from $0.00 in first quarter of 1997.
LIQUIDITY AND CAPITAL RESOURCES
In November 1997 the Company renewed its credit facility with Foothill
and expanded its borrowing ability from $850,000 to $2,500,000. The expanded
credit facility consists of (1) $1,250,000 term loan, (2) $750,000 revolving
line of credit, and (3) $500,000 inventory equipment line of credit, which
matures in January 2000. At March 31, 1998, outstanding balances under the
credit facility total $825,000, $750,000 and $343,000, respectively.
During the first quarter 1998 the Company financed its operations from
internally generated cash flow and bank borrowings.
At March 31, 1998 the Company's working capital deficit was $407,000
which represents a slight decrease of $10,000 from its working capital deficit
at December 31, 1997.
Net cash used in operating activities for the three month period ended
March 31, 1998 totaled $436,000 which was primarily attributed to the Company's
first quarter 1998 operating loss, before depreciation and amortization, of
$394,000. Operating cash flow decreased $398,000 compared to the corresponding
period in 1997. This decrease is largely due to delays in production of the
Shotmaker "Blue Dolly," resulting in postponement of sales of these dollies.
Management believes these production delays will be resolved in the second
quarter 1998 enabling the sale of significant quantities of Blue Dollies at that
time. Based upon revised sales projections, operating cash flow should be
sufficient to meet current operating requirements for the remainder of 1998. The
Company has been able to meet its working capital requirements through
additional borrowings from its credit facility which totaled $766,000 during the
first quarter 1998. The Company believes it will have sufficient funds from
operations and bank borrowings to meet its anticipated requirements for working
capital during the next twelve months.
-10-
<PAGE> 11
CAMERA PLATFORMS INTERNATIONAL, INC.
PART II - OTHER INFORMATION
Items 1,2,3 and 5
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 6. Exhibits and Reports on Form 8-K.
The Company filed a report on Form 8-K dated March 17, 1998 disclosing
its agreement to acquire substantially all of the assets and business of
Production Services Atlanta, Inc. No financial statements were included
in the filing.
-11-
<PAGE> 12
CAMERA PLATFORMS INTERNATIONAL, INC.
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.
By: S/Roy Atlas
-----------------------------------
Date: May 15, 1998 Roy Atlas
President and Chief Operating Officer
By: S/James P. Robinson
-------------------------------------
James P. Robinson
Chief Financial Officer
-12-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 70,000
<SECURITIES> 0
<RECEIVABLES> 376,000
<ALLOWANCES> (46,000)
<INVENTORY> 581,000
<CURRENT-ASSETS> 124,000
<PP&E> 5,951,000
<DEPRECIATION> (3,116,000)
<TOTAL-ASSETS> 3,043,000
<CURRENT-LIABILITIES> 1,562,000
<BONDS> 0
0
0
<COMMON> 6,000
<OTHER-SE> 57,000
<TOTAL-LIABILITY-AND-EQUITY> 3,043,000
<SALES> 61,000
<TOTAL-REVENUES> 593,000
<CGS> 35,000
<TOTAL-COSTS> 1,089,000
<OTHER-EXPENSES> (5,000)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 65,000
<INCOME-PRETAX> (491,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (491,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (491,000)
<EPS-PRIMARY> (.04)
<EPS-DILUTED> (.04)
</TABLE>
