<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, 2000
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 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 14, 2000.
Common Stock $.0005 par value 13,768,228
----------------------------- ----------
(Class) (Number of shares)
(See Note 2 to the Company's Financial Statements)
<PAGE> 2
INDEX
<TABLE>
<CAPTION>
Page
Number
------
<S> <C> <C>
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements:
Condensed Consolidated Statements of Financial Position
at June 30, 2000, and December 31, 1999 3
Condensed Consolidated Statements of Operations for the
Three Months ended June 30, 2000 and 1999 and the
Six Months ended June 30, 2000 and 1999 4
Condensed Consolidated Statements of Cash Flows for the
Six Months ended June 30, 2000 and 1999 5
Notes to Condensed Consolidated Unaudited Financial
Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 12
PART II OTHER INFORMATION 13
Signature Page 13
</TABLE>
2
<PAGE> 3
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Unaudited)
----------------------------------------------------
<TABLE>
<CAPTION>
JUNE 30, December 31,
2000 1999
ASSETS
<S> <C> <C>
CURRENT ASSETS
Cash $ 5,000 $ 9,000
Accounts receivable, less allowance for doubtful accounts
of $5,000 in 2000 and $87,000 in 1999 93,000 102,000
Current maturities of net investment in sales-type lease
and installment sale 0 34,000
Inventories 821,000 819,000
Prepaid expenses 246,000 230,000
------------ ------------
TOTAL CURRENT ASSETS 1,165,000 1,194,000
Property and equipment, net of accumulated depreciation
and a $542,000 rental asset valuation allowance 1,485,000 1,799,000
Deposits and other noncurrent assets 30,000 21,000
------------ ------------
$ 2,680,000 $ 3,014,000
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ 5,000 $ 9,000
Accrued Liabilities 94,000 94,000
Debtor-in-Possession Loan 93,000
Deferred Revenue 0 6,000
------------ ------------
TOTAL CURRENT ASSETS 192,000 109,000
LIABILITIES SUBJECT TO COMPROMISE 6,407,000 6,415,000
SHAREHOLDERS' EQUITY
Common Stock $.0005 par value; 15,000,000 shares authorized;
shares issued and outstanding: 13,768,228 in 2000 and 1999 7,000 7,000
Additional paid-in capital 23,549,000 23,549,000
Accumulated deficit (27,475,000) (27,066,000)
TOTAL SHAREHOLDERS' EQUITY (3,919,000) (3,510,000)
------------ ------------
$ 2,680,000 $ 3,014,000
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
3
<PAGE> 4
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended June 30, Six months ended June 30,
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
REVENUES
Net product sales $ 2,000 $ 240,000 $ 2,000 $ 292,000
Revenues from rental operations 262,000 296,000 542,000 601,000
------------ ------------ ------------ ------------
264,000 536,000 544,000 893,000
------------ ------------ ------------ ------------
EXPENSES
Cost of sales 1,000 124,000 1,000 151,000
Cost of rental operations 300,000 365,000 602,000 726,000
Selling, general and administrative 90,000 211,000 185,000 531,000
------------ ------------ ------------ ------------
391,000 700,000 788,000 1,408,000
Operating loss (127,000) (164,000) (244,000) (515,000)
Interest expense, net 58,000 148,000 122,000 290,000
Other income (expense), net (40,000) 17,000 (43,000) 45,000
Net loss from discontinued operations 0 0 0 0
------------ ------------ ------------ ------------
NET LOSS $ (225,000) $ (295,000) $ (409,000) $ (812,000)
BASIC AND DILUTED LOSS PER SHARE $ (0.02) $ (0.02) $ (0.03) $ (0.06)
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 13,768,228 13,768,228 13,768,228 13,768,228
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
4
<PAGE> 5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six months ended
---------------------------------------------------------------------------------------------
JUNE 30, 2000 June 30, 1999
<S> <C> <C>
OPERATING ACTIVITIES
Net loss $ (409,000) $ (812,000)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 323,000 336,000
(Gain) on sale of equipment 0 (32,000)
Provision (credit) for doubtful accounts 0 (39,000)
Changes in assets and liabilities:
Accounts receivable 9,000 65,000
Inventories (2,000) 91,000
Installment sales 34,000 27,000
Prepaid expenses (16,000) (49,000)
Deposits and other assets (9,000) 24,000
Accounts payable (4,000) (34,000)
Accrued liabilities (14,000) 233,000
NET CASH USED IN OPERATING ACTIVITIES (88,000) (190,000)
--------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Purchases of property and equipment (9,000) 0
Proceeds from sale of equipment 0 182,000
Purchase of goodwill and covenant not to compete 0 0
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (9,000) 182,000
--------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Proceeds from borrowings of short-term debt 93,000 0
Principal payment on short-term debt 0 0
Proceeds from borrowing of long-term debt 0 0
Principal payment on long-term debt 0 (4,000)
Proceeds from issuance of stock 0 2,000
NET CASH PROVIDED BY FINANCING ACTIVITIES 93,000 (2,000)
NET INCREASE (DECREASE) IN CASH (4,000) (10,000)
Cash at beginning of year 9,000 26,000
CASH AT END OF PERIOD $ 5,000 $ 16,000
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ 122,000 $ 23,000
Income taxes 0 0
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
5
<PAGE> 6
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, 2000 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2000. 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, 1999.
NOTE 2 - PROCEEDINGS UNDER CHAPTER 11 OF THE BANKRUPTCY CODE
On September 24, 1999, the Company was served with a notice by the clerk of the
United States Bankruptcy Court Central District of California ("Bankruptcy
Court") that, on September 17, 1999, a petition under Title 11, United States
Code, was filed against the Company by certain creditors for an order for relief
under Title 11, Chapter 7 or 11 of the United States Code.
On October 14, 1999, the Company filed an answer in the Court in the form of a
Debtor's Consent to Entry of an Order for Relief Under Chapter 11 of Title 11 of
the Untied States Code, and the Order was entered by the Bankruptcy Court, on
October 25, 1999, under case number SV-99-20947 GM ("Bankruptcy Case"). On
February 21, 2000, the Company filed a reorganization plan. On June 13, 2000, in
the Bankruptcy Court, an order was entered confirming the Company's Second
Amended Plan of Reorganization ("the Plan").
In accordance with the Plan:
1. Administrative Claims will be paid, at the option of each such holder in
cash equal to the amount of such claim or one share of the Company's new
common stock for each $.25 in approved administrative claims.
2. Tax liabilities will be paid over a six-year period in equal quarterly
payments.
3. DOOFF, Inc., the successor in interest to Foothill, the Company's
secured lender, shall retain its security interest in all pre-petition
collateral, which included, without limitation, all the Company's
accounts receivable, inventory, equipment and all tangible and
intangible assets. The loan of $1,500,000 will be all due and payable in
ten years with interest only payments due monthly at the reference rate
plus 2% per annum, commencing the first month immediately following the
effective date of reorganization.
4. All unsecured creditors will receive one share of new common stock for
each two dollars of their approved claim.
6
<PAGE> 7
5. Existing common shareholder SAC will transfer ownership representing
4,000,000 shares of the Company's common stock to DOOFF, Inc., the
Company's secured lender.
6. DOOFF, Inc. will be issued new common stock such that it will own 49.9%
of the then outstanding stock of the company.
7. The remaining existing shareholders will retain their shares. Their
interests will be diluted by the shares issued to the unsecured
creditors and to the Company's secured creditor.
Prior to the effective date of the Plan, there were 13,768,228 shares
outstanding. As a result of the issuance of shares to the secured and unsecured
creditors, it is anticipated that there will be approximately 25,861,000 shares
outstanding at the conclusion of the reorganization.
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. On July 1, 1999, the trustee filed a report
recommending to the court a finding of no assets for these debtors. The filing
of the bankruptcies is not expected to impact the operations of the Company.
NOTE 3 - INVENTORIES
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
------------- -------------
<S> <C> <C>
Work in process .............................. $ 320,000 $ 318,000
Finished goods ............................... 501,000 501,000
------------- -------------
$ 821,000 $ 819,000
============= =============
</TABLE>
NOTE 4 - PROPERTY AND EQUIPMENT
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
------------- -------------
<S> <C> <C>
Rental equipment ............................... $ 6,262,000 $ 6,262,000
Machinery and equipment ........................ 364,000 355,000
Leasehold improvements ......................... 63,000 63,000
Furniture and fixtures ......................... 62,000 62,000
Automobiles and trucks ......................... 119,000 119,000
------------- -------------
$ 6,870,000 $ 6,861,000
Less accumulated depreciation and amortization.. 4,843,000 4,520,000
Less rental asset valuation allowance .......... 542,000 542,000
------------- -------------
$ 1,485,000 $ 1,799,000
============= =============
</TABLE>
7
<PAGE> 8
NOTE 5 - LIABILITIES SUBJECT TO COMPROMISE
Liabilities subject to compromise refer to liabilities incurred prior to the
commencement of the Chapter 11 case. These liabilities consist primarily of
amounts outstanding under long-term debt, and also include accounts payable,
accrued interest, customer deposits and other accrued expenses. These amounts
represented the Company's best estimate of known or potential claims to be
resolved in connection with the Chapter 11 Case. See Note 2 above.
The principal categories of claims classified as liabilities subject to
compromise under reorganization proceedings are identified below.
<TABLE>
<CAPTION>
June 30, 2000
-------------
<S> <C>
Accounts payable $ 1,131,000
Customer deposits 48,000
Accrued expenses 317,000
Long-term debt 4,911,000
-------------
$ 6,407,000
</TABLE>
NOTE 6 - DEBTOR-IN-POSSESSION FINANCING
On March 8, 2000, a hearing was held on a debtor's emergency motion to approve
debtor-in-possession ("DIP") financing to allow the Company to meet immediate
working capital requirements. The motion was granted by Judge Mund in an amount
not to exceed $250,000. The financing was being provided by DOOFF, LLC., the
Company's secured lender. The balance outstanding at August 10, 2000 was $0.
NOTE 7 - LITIGATION
All pending litigation is subject to an automatic stay as a result of the
bankruptcy filing (Note 2).
Based upon negotiation, adjudication or other action by the Bankruptcy Court,
amounts with respect to disputed claims may increase the amounts of liabilities
subject to compromise recorded by the Company. Amounts past due which have been
subject to litigation are included in the amounts recorded as of June 30, 2000.
NOTE 8 - 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, 2000, the Company had net operating loss carry forwards of
approximately $23 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 is subject to significant annual
limitations. The Company has California net operating loss carry
8
<PAGE> 9
forwards of approximately $3.5 million for tax purposes, which expire from 2000
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 June 30, 2000, 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.
The tax loss carryforwards are subject to the limitations set forth in the
Internal Revenue Code.
9
<PAGE> 10
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Unaudited)
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995.
This Quarterly Report on Form 10-Q includes certain forward-looking
statements based upon management's beliefs, as well as assumptions made by and
data currently available to management. This information has been, or in the
future, may be included in reliance on the "safe harbor" provision of the
Private Securities Litigation Reform Act of 1995. These statements are subject
to a number of risks and uncertainties including, but not limited to, the
following: the ability of the Company to continue as a going concern; the
ability of the Company to generate sufficient cash revenue from operations to
pay current operating obligations, including its occupancy costs; the ability of
the Company to operate pursuant to the terms and conditions of the agreement for
the interim use of cash collateral with its primary secured lender; the adverse
developments with respect to the Company's liquidity or results of operations;
the ability of the Company to obtain products and services and negotiate terms
with vendors and service providers for current orders; the ability to develop,
fund and execute an operating plan for the Company; the ability of the Company
to attract and retain employees; competitive pressures from other camera car
companies and grip equipment rental companies which may affect the nature and
viability of the Company's business strategy; the ability of the Company to
attract and retain customers; and the absence of an active public trading market
for the Company's common stock.
Actual results may differ materially from those anticipated in any such
forward-looking statements. The Company undertakes no obligation to update or
revise any forward-looking statements to reflect subsequent events or
circumstances.
OVERVIEW
The Notes to Consolidated Financial Statements are an integral part of
Management's Discussion and Analysis of Financial Condition and Results of
Operations and should be read in conjunction herewith.
On September 24, 1999, the Company was served with a notice by the clerk of the
United States Bankruptcy Court Central District of California ("Bankruptcy
Court") that, on September 17, 1999, a petition under Title 11, United States
Code, was filed against the Company by certain creditors for an order for relief
under Title 11, Chapter 7 or 11 of the United States Code.
On October 14, 1999, the Company filed an answer in the Court in the form of a
Debtor's Consent to Entry of an Order for Relief Under Chapter 11 of Title 11 of
the Untied States Code, and the Order was entered by the Bankruptcy Court, on
October 25, 1999, under case number SV-99-20947 GM ("Bankruptcy Case"). On
February 21, 2000, the Company filed a reorganization plan. On June 13, 2000, in
the Bankruptcy Court, an order was entered confirming the Company's Second
Amended Plan of Reorganization ("the Plan").
10
<PAGE> 11
In accordance with the Plan:
1. Administrative Claims will be paid, at the option of each such
holder in cash equal to the amount of such claim or one share of
the Company's new common stock for each $.25 in approved
administrative claims.
2. Tax liabilities will be paid over a six-year period in equal
quarterly payments.
3. DOOFF, Inc., the successor in interest to Foothill, the Company's
secured lender, shall retain its security interest in all
pre-petition collateral, which included, without limitation, all
the Company's accounts receivable, inventory, equipment and all
tangible and intangible assets. The loan of $1,500,000 will be
all due and payable in ten years with interest only payments due
monthly at the reference rate plus 2% per annum, commencing the
first month immediately following the effective date of
reorganization.
4. All unsecured creditors will receive one share of new common
stock for each two dollars of their approved claim.
5. Existing common shareholder SAC will transfer ownership
representing 4,000,000 shares of the Company's common stock to
DOOFF, Inc., the Company's secured lender.
6. DOOFF, Inc. will be issued new common stock such that it will
own 49.9% of the then outstanding stock of the company.
7. The remaining existing shareholders will retain their shares.
Their interests will be diluted by the shares issued to the
unsecured creditors and to the Company's secured creditor.
LIQUIDITY AND CAPITAL RESOURCES
The Company has been able to secure up to $250,000 in
debtor-in-possession ("DIP") financing provided by its secured lender, DOOFF
LLC. Even with this financing, however, there remains a serious question as to
the Company's ability to generate sufficient cash to continue operations. The
Company is seeking additional funds in the form of its debt, equity or a
combination thereof. No assurance can be given that the Company will be
successful in obtaining such funds, or what the terms of any financing might be.
RESULTS OF OPERATIONS
The following analysis compares the three months ended June 30, 2000, with the
three months ended June 30, 1999, and the six months ended June 30, 2000, with
the six months ended June 30, 1999.
The Company's revenue for the second quarter and first six months of 2000
decreased by 51% and 39%, respectively, as compared with the corresponding
periods of the prior year. Both second quarter and year-to-date sales revenue
decreased by 99% over the comparative periods of
11
<PAGE> 12
1999. Revenue decreases were primarily associated with the SAG strike, run-away
production, the Company's bankruptcy proceedings, and the failure of the Company
to successfully bring the blue dolly to the marketplace.
The Company's camera car rental revenue decreased by 13%, and the dolly and
crane rental revenue decreased by 10% compared with the same quarter of 1999.
Year to date, camera car revenue decreased by 7%, while dolly and crane rentals
decreased by 12%.
Rental gross margins increased from -69% in the second quarter of 1999 to -38%
in the current quarter. Year-to-date rental gross margins increased from -60% to
-125%. The increases in gross margin are due to lower personnel costs associated
with layoffs in May, 1999 and decreases in all variable expense categories.
These decreases in costs were associated with a substantial decrease in
revenues, modifying the effect on the gross margins.
Selling expense for the second quarter decreased by approximately 57% over 1999.
Year-to-date, the decrease was 52%. The decrease was attributable to decreased
advertising and payroll. General and administrative expenses decreased 57% in
the current quarter as compared with the corresponding quarter of 1999.
Year-to-date, the decrease was 67%. The decreases are a result of substantial
layoffs in May, 1999.
Interest expense decreased by 61% from the second quarter of 1999, and 58%
year-to-date compared with 1999. The decrease is a result of the companies
bankruptcy filing in September of 1999 thus halting interest accrual.
The Company's net loss decreased $70,000 (24%) in the second quarter, and
$403,000 (50%) year-to-date. The decreases are a result of employee layoffs and
expense reductions in all areas. The net loss per share for the quarter remains
the same at $0.02, and the net loss per share for the six months decreased from
$0.06 to $0.03.
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.
12
<PAGE> 13
PART II - OTHER INFORMATION
Items 1, 2, 3 and 5
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
During the quarter, the Company distributed to its shareholders a
Disclosure Statement with respect to the Company's Second Amended Plan
of Reorganization.
Item 6. Exhibits and Reports on Form 8-K.
(a) 2.1 Second Amended Plan of Reorganization.
27 Financial Data Schedule
(b) Reports on Form 8-K. On June 15, 2000, the Company filed a Form 8-K
with respect to the entry of an order confirming the Company's Second Amended
Plan of Reorganization.
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/ MARTIN PERELLIS
------------------------------------
Date: August 17, 2000 Martin Perellis
President and Principal Financial
and Accounting Officer
13
