<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, 1999
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, 1999.
Common Stock $.0005 par value 13,768,228
(Class) (Number of shares)
<PAGE> 2
CAMERA PLATFORMS INTERNATIONAL, INC.
INDEX
<TABLE>
<CAPTION>
Page Number
<S> <C>
PART 1. FINANCIAL INFORMATION:
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets
at March 31, 1999, and December 31, 1998 3
Condensed Consolidated Statements of Operations for the
Three Months ended March 31, 1999 and 1998 4
Condensed Consolidated Statements of Cash Flows for the
Three Months ended March 31, 1999 and 1998 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II. OTHER INFORMATION 10
Signature Page 11
</TABLE>
<PAGE> 3
CAMERA PLATFORMS INTERNATIONAL, INC
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
-------- ---------
<S> <C> <C>
ASSETS
Current Assets
Cash $ 33,000 $ 26,000
Accounts receivable, less allowance
for doubtful accounts of $7,000
in 1999 and $89,000 in 1998 114,000 153,000
Current maturities of net investment
in sales-type lease and installment sale 43,000 43,000
Inventories 981,000 964,000
Prepaid expenses and other current assets 229,000 191,000
_________ _________
Total current assets 1,400,000 1,377,000
Property and equipment, net of depreciation,
amortization and rental asset
valuation allowance 2,327,000 2,644,000
Net investment in sales-type lease and installment
sale,net of current maturities 26,000 38,000
Deposits and other assets 12,000 56,000
---------- ----------
Total current and long term assets $ 3,765,000 $ 4,115,000
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 1,216,000 $ 1,220,000
Current maturities of long-term debt 1,195,000 1,195,000
Customer deposits 151,000 19,000
Deferred revenue 51,000 29,000
Other current liabilities 209,000 192,000
--------- ---------
Total current liabilities 2,822,000 2,655,000
Long-term debt, net of current maturities 3,744,000 3,747,000
Commitments and contingencies
Shareholders' Equity
Common stock - $.0005 par value; 15,000,000
shares authorized; 13,768,228 shares issued
and outstanding 7,000 7,000
Additional paid-in capital 23,550,000 23,547,000
Accumulated deficit (26,358,000) (25,841,000)
----------- ------------
Total shareholders' deficit (2,801,000) (2,287,000)
----------- ------------
$ 3,765,000 $ 4,115,000
=========== ===========
</TABLE>
Note: The balance sheet at December 31, 1998 was derived from the unaudited
financial statements at that date.
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE> 4
CAMERA PLATFORMS INTERNATIONAL, INC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
March 31, 1999 March 31, 1998
------------- -------------
<S> <C> <C>
Revenues
Net product sales $ 52,000 $ 61,000
Revenues from rental operations 305,000 532,000
-------- -------
357,000 593,000
Expenses
Cost of sales 27,000 35,000
Cost of rental operations 361,000 498,000
Selling, general and administrative 320,000 491,000
------- -------
708,000 1,024,000
------- ---------
Operating loss (351,000) (431,000)
Interest expense, net (142,000) (65,000)
Other income (expenses), net 28,000 5,000
Net loss from discontinued operations (52,000) ---
--------- --------
NET LOSS $ ($517,000) $ ($491,000)
============= =============
BASIC AND DILUTED LOSS PER SHARE $ (0.04) $ (0.04)
============= =============
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 13,768,228 12,418,228
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE> 5
CAMERA PLATFORMS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
March 31, 1999 March 31, 1998
--------------- --------------
<S> <C> <C>
OPERATING ACTIVITIES
Net loss ($517,000) ($491,000)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 171,000 97,000
Gain on sale of equipment (2,000) (15,000)
Credit for doubtful accounts (82,000) ---
Changes in assets and liabilities:
Accounts receivable 121,000 (21,000)
Inventories (17,000) (259,000)
Installment sales 12,000 ---
Prepaid expenses and other
current assets (38,000) (26,000)
Deposits and other assets 44,000 ---
Accounts payable (4,000) 214,000
Accrued liabilities 17,000 2,000
Customer deposits 132,000 26,000
Deferred revenue 22,000 7,000
--------- ---------
NET CASH USED IN OPERATING ACTIVITIES (141,000) (466,000)
--------- ---------
INVESTING ACTIVITIES
Purchases of property and equipment --- (337,000)
Net proceeds from sale of equipment 148,000 9,000
-------- ---------
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES 148,000 (328,000)
-------- --------
FINANCING ACTIVITIES
Proceeds from borrowings from
short-term debt --- 190,000
Proceeds from borrowings under long-term
credit facility --- 707,000
Repayment of borrowings from
short-term debt (2,000) (10,000)
Repayment of borrowings under long-term
credit facility --- (100,000)
Proceeds from issuance of stock options 2,000 ---
------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES --- 787,000
------- -------
NET INCREASE (DECREASE) IN CASH 7,000 (7,000)
CASH AT BEGINNING OF PERIOD 26,000 77,000
CASH AT END OF PERIOD $ 33,000 $ 70,000
======== =========
SUPPLEMENTAL DISCLUSURE OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest $147,000 $ 34,000
Income taxes --- ---
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE> 6
CAMERA PLATFORM INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
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, 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 thereto included in the Company's annual
report on Form 10-K for the year ended December 31, 1998.
NOTE 2 - BANKRUPTCY OF SUBISIDIARIES
On April 2, 1999, the Company's wholly owned subsidiaries Shotmaker Dollies,
Inc. and Shotmaker Sound, Inc. filed for protection under Chapter 7 of the
federal bankruptcy code. Neither Shotmaker Dollies nor Shotmaker Sound have
substantial assets. The filing of the bankruptcies is not expected to impact
the operations of the Company.
NOTE 3 - INVENTORIES
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
---------- ----------
<S> <C> <C>
Work in progress $ 454,000 $ 454,000
Finished goods 527,000 510,000
---------- ----------
$ 981,000 $ 964,000
========== ==========
</TABLE>
NOTE 4 - PROPERTY AND EQUIPMENT
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
------------ -----------
<S> <C> <C>
Equipment available for lease $ 6,395,000 $ 6,523,000
Machinery and equipment 351,000 390,000
Leasehold improvements 63,000 73,000
Furniture and fixtures 77,000 94,000
Vehicles 132,000 143,000
----------- -----------
$ 7,018,000 $ 7,223,000
Less accumulated depreciation
and amortization 4,151,000 4,037,000
Less rental asset valuation allowance 542,000 542,000
----------- -----------
$ 2,325,000 $ 2,644,000
=========== ===========
</TABLE>
<PAGE> 7
CAMERA PLATFORMS INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
NOTE 5 - LONG TERM DEBT
In October, 1997 the Company secured a $2.5 million credit facility,
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, 1999), with
Foothill. The original maturity of the loan was January 15, 2000. The term
loan required monthly principal reductions of $25,000. The loans refinanced
an earlier credit facility totaling $850,000 which matured October 15, 1997.
Subsequently, Foothill advanced $1 million for the purchase of Production
Services - Atlanta ("PSA") and $1.25 million for the purchase of Fluid
Images, Inc.
On December 22, 1998, the Company entered into a forbearance agreement with
Foothill. The agreement called for $37,959 to be paid to Foothill upon the
sale of the assets of Shotmaker Sound to be applied against past due
interest; no further advances under any of the notes; and an extension of the
due date of all the notes to February 15, 2001. As part of the agreement,
past due interest of $92,000 together with an annual renewal fee of $32,000,
was added to principal. The agreement called for interest only payments for
ninety days, with monthly principal payments of $45,200 plus interest
commencing with the April 15, 1999 payment. As of May 15, 1999 the Company
had not paid the interest or principal due April 15 or May 15.
The Company is obligated under a promissory note due to the former
shareholders of PSA of $500,000, bearing interest at 8% payable quarterly,
principal all due and payable April, 2001. The note is unsecured. At March
31, 1999, the Company was in default of interest payments under the note.
The Company is obligated under a promissory note due to the former
shareholders of Fluid Images, Inc. of $750,000, bearing interest at 10%,
interest payable quarterly, with annual principal payments of $250,000. The
note is unsecured. At March 31, 1999, the Company was in default of interest
payments under the note.
The Company has a $250,000 unsecured obligation to the former majority
shareholder of the Company, bearing interest at the Bank of Boston reference
rate (7.75% at March 31, 1999) which was due and payable together with
accrued interest thereon on April 11, 1998. Demand has been made on the
note, but no further action or discussions have taken place.
The Company has a $150,000 unsecured obligation to an unrelated third party
which is convertible to 600,000 shares of common stock, interest payable
monthly at reference rate plus
<PAGE> 8
CAMERA PLATFORMS INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
2% (9.75% at March 31, 1999). Principal together with unpaid interest was
due January, 1999. The Company failed to pay the note upon maturity, demand
was made, and litigation commenced. On May 11, 1999, the obligee was granted
a judgment by the United States District Court, Northern District of
Illinois, in the amount of $168,819.
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. As of May 15, 1999, the Company was in
arrears six payments.
NOTE 6 - DISPOSITIONS
On February 1, 1999, Shotmaker Sound, Inc. ("Sound"), the Company's wholly
owned subsidiary sold the assets and business of Third Encore ("3E"). Terms
of the sale were $133,050 and the execution of a consulting agreement with
the Company through December 31, 1999 for $55,000, both payable in cash at
the closing.
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 March 31, 1999, the Company has net operating loss carryforwards of
approximately $24 million for federal tax purposes, which expire from 2000 to
2013. Because of statutory "ownership changes" the amount of net operating
losses which may be utilized in future years are subject to significant
annual limitations. The Company also has net operating loss carryforwards of
approximately $6 million for California tax purposes, which expire from 1999
to 2003. 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 March 31, 1999, total deferred tax assets, consisting principally of net
operating loss carryforwards, 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
<PAGE> 9
CAMERA PLATFORMS INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
allowance recognized due to the uncertainty surrounding the ultimate realization
of deferred tax assets.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Unaudited)
LIQUIDITY AND CAPITAL RESOURCES
The Company has incurred net losses of $517,000 in the current quarter,
$3,597,000 in fiscal 1998, $737,000 in 1997, and $1,883,000 in 1996, and now
shows a negative shareholders' equity. The Company also recorded negative
cash flows from operation of $143,000 in the current quarter and $1,552,000
in 1998, and continues to be in default on its borrowing facilities. The
Company has been able to secure financing to support operations to date, but
there is no assurance that funding will be available to support operations
in the future.
The Company's continued ability to operate is dependent on its ability to
either extend or refinance its existing debt forbearance agreement, liquidate
significant assets, or raise additional capital. Management is actively
seeking a potential buyer for its Akela Crane division and other assets, and
is negotiating with its lender to extend the terms of its credit facility.
There can be no assuranced that this sale or any other will occur, or that the
credit facility will be extended in an manner that allows the Company to
continue it operations in its present form. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
RESULTS OF OPERATIONS
The following analysis compares the three months ended March 31, 1999, with the
three months ended March 31, 1998.
The Company's revenue for the first quarter of 1999 decreased by $236,000 or 40%
as compared with the corresponding period of the prior year.
First quarter 1999 net product sales decreased by $9,000 or 15% as compared
to the corresponding period of the prior year. Gross margin on net product
sales for the three month period ended March 31, 1999 increased 5% from the
prior comparable period due to higher profit margins on sales of used
equipment.
For the three month period ended March 31, 1999 revenues from rental
operations decreased by $227,000 or 43% as compared to the corresponding
period of the prior year. Included in the first quarter of 1998 were
rentals from Shotmaker Sound of $161,000, which was sold as of February 1,
1999. Included in March 1999 rental revenue is $85,000 of Akela crane
rentals, which did not commence until June, 1998. Camera car rentals were
down 27% and dolly and crane rentals were down 56% from the prior year period.
Costs of rental operations decreased $137,000, or 27% from the prior period.
$84,000 of that
<PAGE> 10
CAMERA PLATFORMS INTERNATIONAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(unaudited)
decrease is associated with the sale of Shotmaker Sound. An
increase of $118,000 in 1999 is attributable to the Akela crane rental
operations. Excluding Sound and Akela, cost of rental operations decreased
$171,000, primarily due to decreases in payroll, insurance, supplies and
repairs and maintenance expensess.
Selling, general and administrative expense for the three month period ended
March 31, 1999 decreased by $171,000 or 35% compared to the corresponding
period of the prior year due to reductions in payroll, advertising, legal and
accounting and travel expenses.
Interest expense for the three month period ended March 31, 1999 increased by
$77,000 or 118% compared to the corresponding period of the prior year. The
increase in interest costs is mainly due to the Company's increased debt
burden from acquisitions in 1998 and to fund Company's continued operating
losses.
The net loss for the three month period ended March 31, 1999 was $517,000
compared with a loss of $491,000 in the first quarter of 1998. Basic and
diluted loss per share of common stock remained unchanged.
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 10, 1999 reporting a change
in it independent auditors. The filing was amended by Form 8K/A dated March
22, 1999 to provide additional information.
<PAGE> 11
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.
May 15, 1999 S/Edward Carlin
By:
Edward Carlin
Chief Executive Officer
May 15, 1999 S/Scott Haykin
By:
Scott Haykin
Chief Financial Officer
- 11 -
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET, CONDENSED CONSOLIDATED STATEMENT OF
INCOME AND THE CONSOLIDATED STATEMENT OF CASH FLOW AND IS QUALIFITED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 33,000
<SECURITIES> 0
<RECEIVABLES> 121,000
<ALLOWANCES> 7,000
<INVENTORY> 981,000
<CURRENT-ASSETS> 1,400,000
<PP&E> 7,019,000
<DEPRECIATION> 4,692,000
<TOTAL-ASSETS> 3,765,000
<CURRENT-LIABILITIES> 2,822,000
<BONDS> 0
0
0
<COMMON> 7,000
<OTHER-SE> (2,808,000)
<TOTAL-LIABILITY-AND-EQUITY> 3,765,000
<SALES> 52,000
<TOTAL-REVENUES> 357,000
<CGS> 27,000
<TOTAL-COSTS> 708,000
<OTHER-EXPENSES> (28,000)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 142,000
<INCOME-PRETAX> (465,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (465,000)
<DISCONTINUED> (52,000)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (517,000)
<EPS-PRIMARY> (.04)
<EPS-DILUTED> (.04)
</TABLE>
