===============================================================================
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: September 30, 2000
[ ] 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: 11,229,779 shares of its
$0.001 par value common stock as of November 7, 2000.
Transitional Small Business Disclosure Format (check one) Yes [ ] No [x]
<PAGE> 2
CGI HOLDING CORPORATION
FORM 10-QSB
For the Quarter Ended September 30, 2000
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements Page
a) Balance Sheet
as of September 30, 2000, December 31, 1999
and September 30, 2000 3
b) Statement of Stockholders' Equity
for the Nine Months Ended September 30, 2000 4
c) Statement of Operations
for the Nine and Three Months Ended
September 30, 2000 and 1999 5
d) Statement of Cash Flows
for the Nine Months Ended
September 30, 2000 and 1999 6
e) Footnotes 7,8,9
Item 2. Management's Discussion and Analysis of Financial
Conditions and Results of Operations 10,11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Signature 12
PART I-FINANCIAL INFORMATION
ITEM I- FINANCIAL STATEMENTS
<PAGE> 3
CGI HOLDING CORPORATION, INC.
COMPARATIVE CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2000, DECEMBER 31, 1999 AND SEPTEMBER 30, 1999
(UNAUDITED)
SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30,
2000 1999 1999
------------- ------------ --------------
CURRENT ASSETS
Cash 44,387 90,631 209,645
Accounts Receivable 2,711,727 2,609,637 2,828,011
Allowance for Bad Debts (67,483) (167,489) (75,216)
Inventory 623,284 588,856 637,133
Other Current Assets 234,976 174,173 451,535
Costs and Estimated Earnings in
Excess of Billings - 74,154 82,501
Refundable Income Taxes - 211,029 166,561
Deferred Tax Asset 164,098 377,767 74,500
Current Assets of
Discontinued Operations-Note 1 660,595 697,368 676,066
------------- ------------ --------------
Total Current Assets 4,371,584 4,656,126 5,050,736
------------- ------------ --------------
PROPERTY, PLANT AND EQUIPMENT
Property, Plant and Equipmet 1,595,490 1,587,841 1,536,092
Less:Accumulated Depreciation (372,057) (213,294) (160,995)
------------- ------------ --------------
Subtotal 1,223,433 1,374,547 1,375,097
Fixed Assets of Discontinued
Operations(Net)-Note 1 152,382 171,969 179,827
------------- ------------ --------------
NET PROPERTY,
PLANT AND EQUIPMENT 1,375,815 1,546,516 1,554,924
------------- ------------ --------------
OTHER ASSETS
Goodwill 488,877 522,032 538,927
Other Assets 91,746 98,251 65,428
------------- ------------ --------------
TOTAL OTHER ASSETS 580,623 620,283 604,355
------------- ------------ --------------
TOTAL ASSETS 6,328,022 6,822,925 7,210,015
============= ============ ==============
CURRENT LIABILITIES
Current Portion of Long Term Debt 625,988 592,160 354,709
Notes Payable-Line of Credit 1,581,992 2,168,000 2,050,000
Accounts Payable 630,721 649,075 610,840
Short-Term Borrowings 152,050 152,050 221,278
Accrued Liabilities 126,099 160,245 48,917
Loan Payable- Shareholders 300,000 315,000 270,000
Current Liabilities of
Discontinued Operations-Note 1 383,011 454,308 428,482
------------- ----------- --------------
TOTAL CURRENT LIABILITIES 3,799,861 4,490,838 3,984,226
------------- ----------- --------------
LONG TERM LIABILITIES
Long-Term Debt,
Net of Current Portion 546,986 856,657 1,150,623
Deferred Income Tax 22,665 22,665 22,665
Loan Payable-Shareholders 180,000 300,000 -
Long Term Liabilities of
Discontinued Operations-Note 1 91,743 111,077 118,183
------------- ----------- --------------
TOTAL LONG TERM LIABILITIES 841,394 1,290,399 1,291,471
------------- ----------- --------------
STOCKHOLDERS' EQUITY
Preferred Stock, $0.001 par value,
5,000,000 shares authorized; no
shares issued or outstanding - - -
Common Stock, $0.001 par value,
100,000,000 shares authorized,
11,229,779 shares issued and
outstanding 11,230 10,230 10,230
Additional Paid In Capital 3,119,381 2,895,381 2,895,381
Retained Earnings (1,443,844) (1,863,923) (971,293)
------------- ----------- --------------
TOTAL STOCKHOLDERS' EQUITY 1,686,767 1,041,688 1,934,318
------------- ----------- --------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY 6,328,022 6,822,925 7,210,015
============= =========== ==============
The accompanying notes are an integral part of these statements
<PAGE> 4
CGI HOLDING CORPORATION, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 2000
(UNAUDITED)
COMMON COMMON PAID-IN RETAINED
SHARES STOCK CAPITAL EARNINGS
---------- ------ ----------- -------------
COMMON SHARES $0.001 PAR VALUE
BALANCE: JANUARY 1, 2000 10,229,779 10,230 2,895,381 (1,863,923)
SOLD 1,000,000 SHARES ON 3/31/00
FOR $0.225/SHARE 1,000,000 1,000 224,000
NET PROFIT 420,079
---------- ------ ---------- -------------
BALANCE:SEPTEMBER 30, 2000 11,229,779 11,230 3,119,381 (1,443,844)
========== ====== ========== =============
The accompanying notes are an integral part of these statements
<PAGE> 5
CGI HOLDING CORPORATION, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
---------------------- -----------------------
2000 1999 2000 1999
--------- ---------- ----------- ------------
SALES 2,055,228 2,370,068 7,897,644 6,515,508
COST OF GOODS SOLD 1,403,991 2,405,714 5,328,961 5,487,495
--------- ---------- ----------- ------------
GROSS PROFIT 651,237 (35,646) 2,568,683 1,028,013
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 501,113 703,008 2,005,783 1,879,296
--------- ---------- ----------- ------------
INCOME FROM OPERATIONS 150,124 (738,654) 562,900 (851,283)
--------- ---------- ----------- ------------
OTHER INCOME (EXPENSES)
Other Income 13,504 (32,296) 83,846 1,334
Interest Income 630 - 630 1,679
Interest Expense (118,587) (86,720) (303,285) (191,988)
--------- ---------- ----------- ------------
TOTAL OTHER INCOME (EXPENSE) (104,453) (119,016) (218,809) (188,975)
--------- ---------- ----------- ------------
INCOME BEFORE CORPORATE
INCOME TAXES 45,671 (857,670) 344,091 (1,040,258)
INCOME TAX PROVISION 16,338 (261,296) 127,314 (374,493)
--------- ---------- ----------- ------------
NET INCOME FROM
CONTINUING OPERATIONS 29,333 (596,374) 216,777 (665,765)
DISCONTINUED OPERATIONS:
Income from operations of
discontinued operations(less
applicable tax expense)-Note 1 53,222 125,151 203,302 269,781
--------- ---------- ----------- ------------
NET INCOME 82,555 (471,223) 420,079 (395,984)
========= ========== =========== ============
NET INCOME PER COMMON SHARE
FROM CONTINUING OPERATIONS 0.003 (0.06) 0.02 (0.07)
========= ========== =========== ============
NET INCOME PER SHARE FROM
DISCONTINUED OPERATIONS 0.004 0.01 0.02 0.03
========= ========== =========== ============
NET INCOME PER COMMON SHARE 0.007 (0.05) 0.04 (0.04)
========== ========== =========== ============
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 11,229,779 10,229,779 10,900,109 9,666,775
========== ========== =========== ============
The accompanying notes are an integral part of these statements.
<PAGE> 6
CGI HOLDING CORPORATION, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(UNAUDITED)
SEPTEMBER 30, 2000 SEPTEMBER 30, 1999
------------------ ------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Profit 420,079 (395,984)
Non-Cash Items Included In Net Profit
Depreciation 158,763 113,697
Amortization 37,659 25,741
Allowance for Doubtful Accounts (100,006) 75,216
Change in Accounts Receivable (102,090) (448,885)
Change in Inventory (34,428) (146,877)
Change in Refundable Income Taxes 211,029 (166,561)
Change in Other Current Assets (60,803) (365,331)
Change in Costs and Estimated Earnings
Over Billings 74,154 181,274
Change in Other Assets 2,001 (30,428)
Change in Assets of Discontinued Operations 36,773 (187,781)
Change in Accounts Payable (18,354) (21,866)
Change in Accrued Expenses (34,146) 15,270
Change in Accrued Income Taxes - (34,761)
Change in Deferred Tax Asset 213,669 (74,500)
Change in Liabilities of
Discontinued Operations (46,297) 28,405
------------------ ------------------
NET CASH CHANGE FROM OPERATING
ACTIVITIES 758,003 (1,433,371)
------------------ ------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Fixed Assets Acquired (7,649) (250,953)
Fixed Assets of Dicontinued Operations(net) 19,587 (58,776)
------------------ ------------------
NET CASH CHANGE FROM INVESTING ACTIVITIES 11,938 (309,729)
------------------ ------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Change in Debt (996,851) 1,543,812
Proceeds from Sale of Stock 225,000 81,000
Change in Debt of Discontinued Operations (44,334) 191,888
------------------ ------------------
NET CASH CHANGE PROVIDED BY FINANCING
ACTIVITIES (816,185) 1,816,700
------------------ ------------------
NET CASH CHANGE (46,244) 73,600
CASH BALANCE: JANUARY 1 90,631 136,045
------------------ ------------------
CASH BALANCE: SEPTEMBER 30 44,387 209,645
================== ==================
Supplemental Information
Interest Paid 293,285 194,758
Income Taxes Paid (156,672) 49,102
Supplemental Schedule of Noncash Investing and Financiang Activities
On March 5, 1999, the Company issued 1,600,000 shares of common stock with a par
value of $.001 and market value of 368,000 plus assumed debt of $951,171 in
connection with the purchase of the assets of Personal Care Products, Inc.
In January of 1999, the Company assumed certain debt in the amount of $400,000
to purchase contracting equipment.
The accompanying notes are an integral part of these statements.
<PAGE> 7
CGI HOLDING CORPORATION, INC.
FOOTNOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
NOTE 1
Pursuant to a plan approved by the board of directors, management elected to
sell its wholly owned subsidiary, Roli Ink Corporation for approximately
$2,500,000.
The closing documents, it is anticipated, will be executed prior to November 30,
2000. The actual selling price will be based on balances to be computed as of
November 11, 2000. The selling price is $1,700,000 plus accounts receivable,
inventory and assumption of certain liabilities. Please refer to the 8KA to be
filed subsequent to the closing.
In accordance with APB 30, the financial statement activities of Roli Ink
Corporation are reported as discontinued operations.
The estimated gain on this transaction is $1,800,000 less applicable federal and
state taxes. Due to availability of a federal net operating loss in the amount
of $1,200,000 from the tax year 1999, it is expected the company will owe
approximately $420,000 in federal and state income taxes. The actual estimated
gain, net of current and deferred taxes will be $1,100,000.
The following summarizes Roli Ink Corporations results for the nine and three
months ended September 30, 2000 and 1999.
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
---------------------- -----------------------
2000 1999 2000 1999
--------- ---------- ----------- ------------
Net Profit 84,479 194,033 322,702 418,494
Income Tax Expense 31,257 68,882 119,400 148,713
--------- ---------- ----------- ------------
Net Income from Discontinued
Operations 53,222 125,151 203,302 269,781
========= ========== =========== ============
NOTE 2 - The company purchased the assets of Salle International on March 5,
1999 for $1,319,171. The purchase was accomplished through the issuance of
1,600,000 shares of its common stock and debt assumption of $951,171. The
company changed its name to Trifinity Inc. The nature of its business is
specializing in the manufacture and marketing of fragrance candles and liquid
fills. Please refer to 8 K/A filed on June 19, 1999 for details.
<PAGE> 8
Note 3- Notes Payable
Current Long Term
----------------------------
a.)CIB BANK - Line of Credit
Interest rate of 10.50% and maturity date
of January 31, 2001. This note is secured by
general asstes of SECO. 787,192 -
b.)Marine Bank - Line of Credit
Note due on 1/31/2001 with an interest
rate of 9.00%. The total amount available
is $500,000. 384,709 -
c.)CIB Bank - Line of Credit
Interest rate is 10.00% and is due
on 1/31/2001. Total amount available
is $500,000. 410,091 -
------------- ---------------
TOTAL LINE OF CREDIT 1,581,992 -
d.)Union Federal Savings - Equipment Loan
Note dated 8/20/99 with a 6 year
amortization and interest rate of 11.25% 76,808 399,137
e.)Clara Bendersky - Note Payable due
April 1, 2001 with interest rate of 10.00% 150,000 -
f.)Otto Barth - Note Payable due
June 30, 2001 with interest rate of 8.5% 50,000 -
g.)Audrey Love - Note Payable due
January 31, 2001 with interest rate of 8.5% 100,000 -
h.)George Kouronos - Note payable due
December 31, 2000 with interest rate of 8.5% 100,000 -
I.)Paul Doll - Note payable due June 30, 2001
with interest rate of 10.00% 35,000 -
j.) Vehicle Loan - 60 month note dated 4/3/99
with interest rate of 7.59% 4,640 13,260
k.)CIB Bank - Installment Loan
Payable for 60 months at $4,091.97
per month with interest rate of 8.50%.
Maturity date is 2/29/04 38,176 107,619
l.)Equipment Loan - 48 month note dated
December 1999 7,395 13,334
m.)Equipment Loan - 48 month note dated
11/28/99 with interest rate of 5.9% 10,009 11,360
n.)Vehicle-payment is $303.05/month
Note is secured by the vehicle and has
an interest rate of 7.65% 3,360 1,778
o.)Computer Loan
36 month note dated September 1999 with
interest rate of 15.99% 600 498
p.)John English - Note dated 7/1/99 50,000 -
with interest rate of 8.00%
------------- ---------------
SUBTOTAL 625,988 546,986
------------- ---------------
TOTALS 2,207,980 546,986
============= ===============
<PAGE> 9
NOTE 4 - LOAN FROM SHAREHOLDERS
The Company and SECO-Illinois borrowed funds from shareholders throughout the
year to cover operating expenses. The total outstanding principal balance due as
of September 30, 2000 was $480,000. The detail of this principal balance as of
September 30, 2000 is as follows:
Jaime Bendersky $300,000 - Principal balance due on April 1, 2001.
Interest paid quarterly at a rate of 10%
(loan to the Company).
Jim Spachman $115,000 - No repayment terms. Interest paid
quarterly at 10.00% (loan to the Company).
John Giura $65,000 - No repayment terms. No interest paid
or accrued.
NOTE 5 - The financial statements reflect all adjustments which are, in the
opinion of management, necessary to present a fair statement of the results for
the nine months ended September 30, 2000 and 1999.
NOTE 6 - The results of "Trifinity" only reflect operations from the date of
acquisition, March 5, 1999. No pro-forma results of operations are reflected for
this subsidiary due to lack of financial information of prior management.
<PAGE> 10
ITEM 2
CGI HOLDING CORPORATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Financial Conditions
The company's total assets at September 30, 2000 were $6,328,022, which
represents decreases of $494,903 from December 31, 1999 and $881,993 from
September 30, 1999. Conversely, total liabilities decreased $1,139,982 from
December 31, 1999 and $634,442 from September 30, 1999. Short-term debt at
September 30, 2000 was $2,660,030 compared to December 31, 1999 of $3,227,210
representing a decrease of $567,180.
As discussed in Note 1 to the financial statements, proceeds from sale of Roli
Ink Corp will be used to reduce debt approximately $875,000.
Liquidity and Capital Resources
Cash flow from operations for the nine months ended September 30, 2000 was
$758,003 compared to ($1,433,371) for the same period last year.
Working capital at September 30, 2000 was $571,723. This represents an increase
of $406,435 from December 31, 1999.
The sale of Roli will enhance the liquidity portion of the Company.
Results of Operations
Sales for first nine months of 2000 were $7,897,644 compared to $6,515,483 for
the same period last year, an increase of $1,382,161 or 21.21% increase. The
increase is mainly attributable to 'Trifinity' whereby its sales increased
$911,271. Whereas sales increased $1,382,161, cost of sales decreased $158,534.
This decrease in cost of sales is attributable to 'SECO's' more profitable
contracting operations in 2000. Its gross profit in 2000 was 31% versus 15% in
1999. Its concentration in 2000 was directed more to the private sector as
opposed to last year when many of its contracts were with the Chicago Public
Schools.
Sales in the third quarter were $2,055,228, a decrease of $314,815. Trifinity
sales increased $184,439 but SECO's sales decreased $499,254. This decrease was
attributable to the fact the Company sought contracts that were more profitable,
which resulted in a gross profit of $524,757 (29%) compared to gross margin loss
($52,151) in 1999.
Selling and Administrative expenses increased for the nine months ended
September 30 in the amount of $126,151, but during the third quarter, the
expenses actually decreased $201,871. This decrease was mainly attributable to
SECO's ability to streamline its administrative activities.
Net income for the nine months was $216,777 from continuing operations and
$203,302 from discontinued operations (Roli) for a total of $420,079 or $0.039
per share compared to the same period last year of ($665,765) loss from
continuing operations and $269,781 from discontinued operations for a total net
loss of $(395,984) or ($0.041) per share.
Operating results for the third quarter of this year were $29,333 net income
from continuing operations and $53,222 from discontinued operations (Roli), for
a total of $82,555 or $0.008 per share. Results for the same quarter last year
were a net loss of ($596,374) from continuing operations and $125,151 for a
total net loss of ($471,223) or ($0.046) per share.
<PAGE> 11
Segment Analysis
INDUSTRY SEGMENT
NINE MONTHS ENDED SEPTEMBER 30, 2000
SECO TRIFINITY CGI CONSOLIDATED ROLI
--------- ---------- ------------ ----------- -----------
SALES 6,780,122 1,117,522 - 7,897,644 2,170,036
COST OF SALES 4,692,036 636,925 - 5,328,961 1,171,391
--------- ---------- ------------ ----------- ------------
GROSS PROFIT 2,088,086 480,597 - 2,568,683 998,645
SELLING AND
ADMINISTRATION 1,450,979 440,705 114,099 2,005,783 656,833
--------- ---------- ------------ ----------- ------------
INCOME FROM
OPERATIONS 637,107 39,892 (114,099) 562,900 341,812
--------- ---------- ------------ ----------- ------------
OTHER INCOME (EXPENSE)
OTHER INCOME 80,321 3,525 - 83,846 -
INTEREST INCOME 630 - - 630 -
INTEREST EXPENSE (158,927) (73,879) (70,479) (303,285) (19,110)
--------- ---------- ------------ ----------- ------------
TOTAL (77,976) (70,354) (70,479) (218,809) (19,110)
--------- ---------- ------------ ----------- ------------
INCOME BEFORE TAXES 559,131 (30,462) (184,578) 344,091 322,702
========= =========== ============ =========== ============
INDUSTRY SEGMENT
NINE MONTHS ENDED SEPTEMBER 30, 1999
SECO TRIFINITY CGI CONSOLIDATED ROLI
--------- ---------- ------------- ----------- ------------
SALES 6,309,232 206,251 - 6,515,483 2,312,878
COST OF SALES 5,380,321 107,174 - 5,487,495 1,192,347
--------- ---------- ------------- ----------- ------------
GROSS PROFIT 928,911 99,077 - 1,027,988 1,120,531
SELLING AND
ADMINISTRATION 1,300,656 405,876 172,740 1,879,272 699,367
--------- ---------- ------------- ----------- ------------
INCOME FROM
OPERATIONS (371,745) (306,799) (172,740) (851,284) 421,164
--------- ---------- ------------- ----------- ------------
OTHER INCOME (EXPENSE)
OTHER INCOME - 3,013 - 3,013 -
INTEREST INCOME - - - - -
INTEREST EXPENSE (118,505) (17,650) (55,832) (191,987) (2,770)
--------- ---------- ------------- ----------- ------------
TOTAL (118,505) (14,637) (55,832) (188,974) (2,770)
--------- ---------- ------------- ----------- ------------
INCOME BEFORE TAXES (490,250) (321,436) (228,572) (1,040,258) 418,394
========= ========== ============= ============ ===========
INDUSTRY SEGMENT
THREE MONTHS ENDED SEPTEMBER 30, 2000
SECO TRIFINITY CGI CONSOLIDATED ROLI
--------- ---------- ------------- ------------ -----------
SALES 1,793,740 261,488 - 2,055,228 706,891
COST OF SALES 1,268,983 135,008 - 1,403,991 395,715
--------- ---------- ------------ ------------ -----------
GROSS PROFIT 524,757 126,480 - 651,237 311,176
SELLING AND
ADMINISTRATION 309,646 142,033 49,434 501,113 221,085
--------- ---------- ------------ ------------ -----------
INCOME FROM
OPERATIONS 215,111 (15,553) (49,434) 150,124 90,091
--------- ---------- ------------ ------------ -----------
OTHER INCOME (EXPENSE)
OTHER INCOME 12,454 1,050 - 13,504 -
INTEREST INCOME 630 - - 630 -
INTEREST EXPENSE (62,737) (23,975) (31,875) (118,587) (5,611)
--------- ---------- ------------ ------------ -----------
TOTAL (49,653) (22,925) (31,875) (104,453) (5,611)
--------- ---------- ------------ ------------ -----------
INCOME BEFORE TAXES 165,458 (38,478) (81,309) 45,671 84,480
========= ========== ============ ============ ===========
INDUSTRY SEGMENT
THREE MONTHS ENDED SEPTEMBER 30, 1999
SECO TRIFINITY CGI CONSOLIDATED ROLI
--------- ---------- ------------ ------------ -----------
SALES 2,292,994 77,049 - 2,370,043 819,246
COST OF SALES 2,345,145 60,569 - 2,405,714 427,726
--------- ---------- ------------ ------------ -----------
GROSS PROFIT (52,151) 16,480 - (35,671) 391,520
SELLING AND
ADMINISTRATION 557,653 115,754 29,577 702,984 259,473
--------- ---------- ------------ ------------ -----------
INCOME FROM
OPERATIONS (609,804) (99,274) (29,577) (738,655) 132,047
--------- ---------- ------------ ------------ -----------
OTHER INCOME (EXPENSE)
OTHER INCOME (33,630) 3,013 - (30,617) -
INTEREST INCOME (1,679) - - (1,679) -
INTEREST EXPENSE (49,477) (14,872) (22,370) (86,719) (1,015)
--------- ---------- ------------ ------------ -----------
TOTAL (84,786) (11,859) (22,370) (119,015) (1,015)
--------- ---------- ------------ ------------ -----------
INCOME BEFORE TAXES (694,590) (111,133) (51,947) (857,670) 131,032
========= ========== ============ ============ ===========
<PAGE> 12
Forward-Looking Statements
This report included forward-looking statements made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. These
statements contain information regarding growth and earnings expectations based
on the Company's current assumptions involving a number of risks and
uncertainties. There are certain important factors that can cause actual results
to differ materially from the forward-looking statements, including, without
limitation, adverse business or market conditions; the ability of the Company to
secure and satisfy customers; and adverse competitive developments. Readers are
cautioned not to place undue reliance on forward-looking statements.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
People of the State of Illinois, Plaintiff, v. Robert Larsen, Et. Al.,
Defendants, No. 96 CH 1033.
This action is pending in the Circuit Court of the Nineteen Judicial Circuit,
Lake County, Illinois. The Company is not a party to this action. However,
SECO-Illinois is a defendant. This action, filed in 1996, was brought by the
State of Illinois to compel defendant Larsen to conduct an environmental
clean-up of his property. SECO-Illinois was thereafter named an additional
defendant, from whom the State sought the imposition of unspecified penalties as
the result of certain asbestos removal work which it had conducted on the
subject property. In the summer of 1999, Larsen filed a counterclaim against
SECO-Illinois, seeking unspecified damages against it for sums Larsen was
allegedly caused to expend by reason of improper remediation work performed by
SECO-Illinois. The matter remains pending and undetermined, and currently is in
the process of discovery. Discovery to date has indicated that Larsen is seeking
damages in excess of $200,000.
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
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized
CGI Holding Corporation
Dated: November 14, 2000 By: /s/ John Giura
----------------------------------
John Giura, Director, President
and Chief Financial Officer
Dated: November 14, 2000
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
/s/ Ann K. Knaack
------------------------
Ann K. Knaack, Director and Vice President
Date: November 14, 2000
/s/ Chander Jadhwani
------------------------
Chander Jadhwani, Director
Date: November 14, 2000
