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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(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
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
Commission File Number: 33-19980-D
CGI HOLDING CORPORATION
-----------------------------
(Exact name of small business issuer as specified in its charter)
Nevada 87-0450450
- --------------------- ------------------------------
State or other jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization
8400 Brookfield Avenue, Brookfield, Illinois 60513
- -------------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code (708) 387-9200
---------------
Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the Company was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes [x] No [ ] Yes [ ] No [x]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 8,272,779 shares of its
$0.001 par value common stock as of May 12,1998.
Transitional Small Business Disclosure Format (check one) Yes [ ] No [x]
PART I-FINANCIAL INFORMATION
ITEM I- FINANCIAL STATEMENTS
<PAGE> 2
CGI HOLDING CORPORATION, INC.
CONDENSED COMPARATIVE CONSOLIDATED BALANCE SHEET
MARCH 31, 1998 AND 1997
(UNAUDITED)
MARCH 31, MARCH 31,
1998 1997
------------- --------------
CURRENT ASSETS
Cash $152,301 $59,705
Accounts Receivable 1,210,763 1,931,512
Inventory 219,082 221,037
Unexpired Insurance 96,506 109,982
Negotiation Deposit 100,000 0
Other Assets 0 99,616
------------- --------------
TOTAL CURRENT ASSETS $1,778,652 $2,421,852
------------- --------------
PROPERTY, PLANT AND EQUIPMENT
Leasehold Improvements $28,262 $28,262
Fixtures and Equipment 447,825 369,332
Vehicles 147,804 144,930
Contracting Equipment 426,827 386,832
------------- --------------
1,050,718 929,356
Less: Accumulated Depreciation 686,191 614,343
------------- --------------
NET PROPERTY, PLANT AND EQUIPMENT 364,527 315,013
------------- --------------
OTHER ASSETS 3,552 2,977
------------- --------------
TOTAL ASSETS $2,146,731 $2,739,842
============= ==============
CURRENT LIABILITIES
Current Portion of Long-Term Debt $234,317 $380,017
Accounts Payable 258,691 406,869
Short-Term Borrowings 156,102 224,917
Accrued Corporate Income Taxes 71,960 158,937
Accrued Liabilities 46,996 161,530
Loan Payable-Shareholder 0 286,953
------------- --------------
TOTAL CURRENT LIABILITIES $768,066 $1,619,223
------------- --------------
LONG TERM LIABILITIES
Long-Term Debt, Net of Current Portion $128,851 $258,097
Deferred Income Tax 9,822 9,822
------------- --------------
TOTAL LONG-TERM LIABILITIES 138,673 267,919
------------- --------------
STOCKHOLDERS' EQUITY
Preferred Stock, $0.001 par value,
5,000,000 shares authorized; no
shares issued or outstanding $0 $0
Common Stock, $0.001 par value,
100,000,000 shares authorized;
8,272,779 shares issued and
outstanding 8,273 4,961
Additional Paid-In Capital 363,674 281,136
Retained Earnings 868,045 566,603
------------- --------------
TOTAL STOCKHOLDERS' EQUITY 1,239,992 852,700
------------- --------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $2,146,731 $2,739,842
============= ==============
The accompanying notes are an integral part of these statements.
<PAGE> 3
CGI HOLDING CORPORATION, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
THREE MONTHS ENDED MARCH 31, 1998
(UNAUDITED)
COMMON COMMON PAID-IN RETAINED TREASURY
SHARES STOCK CAPITAL EARNINGS STOCK
--------- ------ -------- --------- ---------
COMMON SHARES $0.001 PAR VALUE
STOCK ACCOUNTS REFLECTED AT
POST REORGANIZATION UNIT SHARES
BALANCE: JANUARY 1, 1998 8,272,779 $8,273 $363,674 $750,367 $0
NET PROFIT 117,678
--------- ------ -------- --------- ---------
BALANCE: MARCH 31, 1998 8,272,779 $8,273 $363,674 $868,045 $0
========= ====== ======== ========= =========
The accompanying notes are an integral part of these statements.
<PAGE> 4
CGI HOLDING CORPORATION, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(UNAUDITED)
MARCH 31, 1998 MARCH 31, 1997
-------------- --------------
SALES $1,692,403 $2,376,841
COST OF GOODS SOLD 993,780 1,440,091
-------------- --------------
GROSS PROFIT $698,623 $936,750
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSE 488,366 471,887
-------------- --------------
INCOME FROM OPERATIONS $210,257 $464,863
-------------- --------------
OTHER INCOME (EXPENSE)
Other $0 $21,390
Interest Income 0 529
Interest Expense (20,619) (10,589)
--------------- --------------
TOTAL OTHER INCOME ($20,619) $11,330
--------------- --------------
INCOME BEFORE CORPORATE
INCOME TAXES $189,638 $476,193
INCOME TAX PROVISION 71,960 158,937
-------------- --------------
NET INCOME $117,678 $317,256
============== ==============
NET INCOME PER
COMMON SHARE $0.01 $0.06
============== ==============
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 8,272,777 4,961,056
============== ==============
The accompanying notes are an integral part of these statements.
<PAGE> 5
CGI HOLDING CORPORATION, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(UNAUDITED)
MARCH 31, 1998 MARCH 31, 1997
--------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Profit $117,678 $317,256
Non-Cash Items Included In Net Loss
Depreciation 26,327 16,783
Change in Accounts Receivable 302,516 (256,618)
Change in Inventory 19,175 (25,900)
Change in Loans Receivable 0 (1,110)
Change in Prepaid Insurance (14,244) (30,328)
Change in Costs and Estimated Earnings
Over Billings 45,000 (24,811)
Change in Deposits (100,000) 1,516
Change in Accounts Payable (182,050) (296,210)
Change in Accrued Expenses (20,609) 44,698
Change in Inter-Company Receivable 0 (2,624)
Change in Accrued Income Taxes (259,694) 65,855
Change in Billings in Excess of Costs and
Estimated Earnings (52,461) (101,182)
--------------- --------------
NET CASH CHANGE FROM OPERATING
ACTIVITIES ($118,362) ($292,675)
--------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES
Fixed Assets Acquired ($800) $0
Proceeds from Sale of Fixed Assets 0 3,041
--------------- --------------
NET CASH CHANGE FROM INVESTING ACTIVITIES ($800) $3,041
--------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES
Change in Loan Payable $75,926 $169,663
Change in Notes Payable 21,270 139,788
Change in Treasury Stock 0 (81,500)
Proceeds from Sale of Stock 0 48,510
--------------- --------------
NET CASH CHANGE PROVIDED BY FINANCING
ACTIVITIES $97,196 $276,461
--------------- --------------
NET CASH CHANGE ($21,966) ($13,173)
CASH BALANCE: JANUARY 1 174,267 72,878
--------------- --------------
CASH BALANCE: MARCH 31 $152,301 $59,705
=============== ==============
Supplemental Information
Interest Paid $20,619
Income Taxes Paid $251,449
The accompanying notes are an integral part of these statements.
<PAGE> 6
CGI Holding Corporation
Notes for Financial Statements
March 31, 1998
(Unaudited)
Note 1 - Condensed Consolidated Financial Statements
The accompanying condensed consolidated financial statements have been prepared
by the Company, and are not audited. All adjustments necessary for fair
presentation have been included. All inter-company transactions have been
eliminated. These financial statements are condensed and, therefore do not
include all the disclosures normally required by generally accepted accounting
principles.
The consolidated financial statements include the accounts of Safe Environment
Corporation, Roli Ink Corporation and CGI Holding Corporation.
Item 2-Management's Discussion and Analysis of Financial
Condition and Results of Operation
Financial Condition
Total assets at March 31, 1998 were $2,146,731. Working capital at the end of
the first quarter was $1,010,586 compared to $802,629 at the end of the first
quarter of 1997. Long-term debt decreased $129,246 for the twelve month period
ended March 31, 1998.
Results of Operations
The net (after tax) profit for the first quarter of 1998 was $117,678 or .01
per share compared to $317,256 for the first quarter of 1997 or .04 per share
stated in common equivalent shares outstanding. The earnings for the operating
subsidiaries for the first quarters were: Safe Environment Corporation (SECO)
1998, $89,029; 1997, $226,760 and Roli Ink Corporation (Roli) 1998 $36,141;
1997, $90,496.
The holding business of CGI, namely SECO and Roli Ink have historically
experienced earning swings from one quarter to the next. This is primarily due
to outstanding competitive bids being awarded at varying times throughout the
year, and the completion of awarded bids in varying quarterly periods.
With a significant log of outstanding bids, management forecasts the earnings
for the calendar year of 1998 to exceed 1997 actuals.
Future Plans
Reflected on the balance sheet on March 31, 1998 is a `Negotiation Deposit'
in the amount of $100,000. These funds represent "good faith deposit" to a
successful acquisition of a manufacturing concern.
The Company is in active negotiation phase to acquire a manufacturing concern.
Preliminary due diligence has resulted in the company engaging in final
negotiations to purchase the assets and long term non-cancelable contracts of
the said manufacturing concern. Talks are underway to secure long term
equity/debt financing to facilitate a successful acquisition of the same.
The "good faith deposit" of $100,000.00 will be refunded to the Company in it's
entirety upon closing or upon CGI Holding Corporation foregoing the said
acquisition at its option. The conclusion of the said acquisition is estimated
at six to eight weeks.
<PAGE> 7
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
---------
None
(b) Reports on Form 8-K
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CGI HOLDING CORPORATION
Dated: May 12, 1998 By: /S/ John Giura
------------ -------------------
John Giura, President and Director
(Principal Executive Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
condensed consolidated balance sheet as of March 31, 1998 and condensed
consolidated statements of operations for the three months ended March 31, 1998,
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 152,301
<SECURITIES> 0
<RECEIVABLES> 1,210,763
<ALLOWANCES> 0
<INVENTORY> 219,082
<CURRENT-ASSETS> 1,778,652
<PP&E> 1,050,718
<DEPRECIATION> (686,191)
<TOTAL-ASSETS> 2,146,731
<CURRENT-LIABILITIES> 768,066
<BONDS> 128,851
0
0
<COMMON> 8,273
<OTHER-SE> 1,231,719
<TOTAL-LIABILITY-AND-EQUITY> 2,146,731
<SALES> 1,692,403
<TOTAL-REVENUES> 1,692,403
<CGS> 993,780
<TOTAL-COSTS> 993,780
<OTHER-EXPENSES> 488,366
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 20,619
<INCOME-PRETAX> 189,638
<INCOME-TAX> 71,960
<INCOME-CONTINUING> 117,678
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 117,678
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
