UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[xx] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 1997
----------------------------
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: O-28140
U.S. Bridge Corp.
(Exact name of registrant as specified in its charter)
Delaware 11-2974406
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
53-09 97th Place, Corona, New York 11368
(Address of principal executive offices) (Zip Code)
(718) 699-0100
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) has 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 registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [xx] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
Common stock, par value $.001 per share: 6,527,147 shares outstanding as of
March 31, 1997.
<PAGE>
U.S. BRIDGE CORP.
INDEX
<TABLE>
<CAPTION>
PART 1 - FINANCIAL INFORMATION:
ITEM 1 - Financial Statements
<S> <C>
Consolidated Balance Sheets (Unaudited)
March 31, 1997 and June 30, 1996 2
Consolidated Statements of Operations (Unaudited)
for the Three Months Ended March 31, 1997 and 1996 3
Consolidated Statements of Operations (Unaudited)
for the Nine Months Ended March 31, 1997 and 1996 4
Consolidated Statement of Stockholders' Equity (Unaudited)
for the Nine Months Ended March 31, 1997 5
Consolidated Statements of Cash Flows (Unaudited)
for the Nine Months Ended March 31, 1997 and 1996 6
Notes to Consolidated Financial Statements 7 - 10
ITEM 2 - Management's Discussion And Analysis Of Financial
Condition And Results Of Operations 11 - 12
PART 2 - OTHER INFORMATION
ITEM 1 - Legal Proceedings 13
ITEM 2 - Other Information 13
ITEM 6 - Exhibits 14
</TABLE>
1
<PAGE>
U.S. BRIDGE CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(Unaudited)
March 31, June 30,
1997 1996
ASSETS
Current assets:
<S> <C> <C>
Cash $347,287 $399,652
Contracts and retainage receivable, net 7,255,253 3,613,665
Costs and estimated earnings in excess of billings
on uncompleted contracts 1,388,696 2,433,524
Other current assets 35,569 55,116
------ ------
Total current assets 9,026,805 6,501,957
Property and equipment, net 2,909,277 3,042,090
Deferred Compensation, net 6,875 33,000
Deferred consulting costs, net 158,333 239,583
------- -------
Total assets $ 12,101,290 $ 9,816,630
= ========== = =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable, including cash overdrafts of $123,427
and $63,274, respectively $ 2,375,468 $ 936,445
Accrued expenses 586,351 397,729
Payroll taxes payable 665,240 382,135
Income taxes payable 301,000 -
Mortgage payable 2,735,531 2,735,531
Notes payable 145,358 145,837
Due to officer and related parties 453,311 358,779
Billings in excess of costs and estimated earnings
on uncompleted contracts 29,459 16,567
------ ------
Total current liabilities 7,291,718 4,973,023
--------- ---------
Minority interest 2,633,959 2,409,028
Commitments and contingencies (Note 6) - -
Stockholders' equity:
Preferred stock, authorized 10,000,000, issued and outstanding -0- shares - -
Common stock, $.001 par value, authorized 50,000,000 shares,
issued and outstanding 6,527,147 and 6,162,530, respectively 6,131 5,766
Additional paid-in capital 2,898,090 2,641,002
Accumulated deficit (728,608) (212,189)
-------- --------
Total stockholders' equity 2,175,613 2,434,579
--------- ---------
Total liabilities and stockholders' equity $ 12,101,290 $ 9,816,630
= ========== = =========
</TABLE>
See notes to consolidated financial statements (unaudited).
<PAGE>
U.S. BRIDGE CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31,
(UNAUDITED)
<TABLE>
<CAPTION>
1997 1996
---------- ----
Revenue:
<S> <C> <C>
Contract revenues $ 1,915,553 $ 1,457,636
- --------- - ---------
Total revenue 1,915,553 1,457,636
--------- ---------
Costs and expenses:
Cost of contract revenues 1,156,070 769,880
General and administrative expenses 743,692 884,820
------- -------
Total costs and expenses 1,899,762 1,654,700
--------- ---------
Loss from operations before interest expense,
minority interest and provision for income taxes 15,791 (197,064)
Interest expense 77,368 132,263
------ -------
Loss from operations before minority interest
and provision for income taxes (61,577) (329,327)
Minority interest in net (income) loss (57,219) 73,907
------- ------
Loss before provision for income taxes (118,796) (255,420)
Provision for income taxes 76,445 -
------ -
Net loss $ (195,241) $ (255,420)
= ======== = ========
Net loss per common equivalent share:
Loss from operations before minority interest
and provision for income taxes $ (.01) $ (.05)
------------------- -------------------
Minority interest in net (income) loss $ (.01) $ .01
------------------- - ---
Provision for income taxes (.01) $ -
---- - -
Net loss $ (.03) $ (.04)
= ==== = ====
Weighted average number of common shares outstanding $ 6,527,147 6,145,867
= ========= =========
</TABLE>
See notes to consolidated financial statements (unaudited).
<PAGE>
U.S. BRIDGE CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED MARCH 31,
(UNAUDITED)
<TABLE>
<CAPTION>
1997 1996
---- ----
Revenue:
<S> <C> <C>
Contract revenues $ 7,722,994 $ 4,014,623
Rental income - 82,000
--- ------
Total revenue 7,722,994 4,096,623
--------- ---------
Costs and expenses:
Cost of contract revenues 5,170,187 1,973,327
General and administrative expenses 2,310,929 2,257,106
--------- ---------
Total costs and expenses 7,481,116 4,230,433
--------- ---------
Income (loss) from operations before interest expense, unusual item,
minority interest and provision for income taxes 241,878 (133,810)
Interest expense 232,366 421,938
Unusual financing costs - 441,863
--- -------
Income (loss) from operations before minority interest
and provision for income taxes 9,512 (997,611)
Minority interest in net (income) loss (224,931) 159,975
-------- -------
Loss before provision for income taxes (215,419) (837,636)
Provision for income taxes 301,000 -
------- -
Net loss $ (516,419) $ (837,636)
= ======== = ========
Net (loss) income per common equivalent share:
Income (loss) from operations before minority interest
and provision for income taxes $ Nil $ (.17)
= === = ====
Minority interest in net (income) loss $ (.04) $ .03
= ==== = ===
Provision for income taxes $ (.05) $ -
= ==== = =
Net loss $ (.09) $ (.14)
= ==== = ====
Weighted average number of common shares outstanding 6,499,369 6,145,867
========= =========
</TABLE>
<PAGE>
See notes to consolidated financial statements
<PAGE>
The Company was incorporated on September 4, 1990 and is a 47% owned
subsidiary of U.S. Bridge Corp. ("Bridge Corp."). The Company's President is
also the majority stockholder (69.5%) of Bridge Corp. and may be considered the
beneficial owner of the Company.
The accompanying unaudited financial statements have been
prepared in accordance with generally accepted accounting
principles for interim financial information and with
instructions to Form 10-QSB. 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 the interim financial
statements include all adjustments necessary in order to make
the financial statements not misleading. The results of
operations for the three months ended is not necessarily
indicative of the results to be expected for the full year.
For further information, refer to the Company's audited
financial statements and footnotes thereto at June 30, 1996,
included in the Company's Annual Report Form 10K-SB, filed
with the Securities and Exchange Commission.
NOTE 2 - PAYROLL TAXES
During September 1994, the Company entered into an installment
agreement with the Internal Revenue Service in order to
liquidate delinquent payroll taxes of approximately $231,535
and remove a tax lien filed by such authority. The agreement
required the Company to pay $25,000 per month until such
amount is fully paid. As per the terms of the agreement, the
Company must also pay timely all current payroll taxes. As of
March 31, 1997 the Company has not made all the required
$25,000 monthly payments and has not paid timely all current
payroll taxes. Payroll taxes payable, including accrued
penalties and interest, amounted to $573,633 at March 31,
1997.
NOTE 3 - DUE FROM/TO RELATED PARTIES
As of March 31, 1997, the Company has
advanced $44,124 to related Companies. Such advances are
non-interest bearing and are due on demand.
As of March 31, 1997 the Company's President
has advanced a total of approximately $273,788 to the Company.
The remaining balance amounting to $5,934 represents advances
from other related Companies. Such advances are non-interest
bearing and are due on demand.
NOTE 4 - STOCKHOLDERS EQUITY
a) Issuance of common stock
During February 1997, pursuant to Form S-8
Registration Statement filed with Securities and Exchange
Commission, the Company registered 125,000 common shares
underlying an option to the Company's President pursuant to
the 1994 Senior Management Incentive Plan. The options were
exercisable at $1.10 per share (110% of the bid price on
November 27, 1996) and expire on November 27, 2001. These
options were exercised March 27, 1997 resulting in the
issuance of 125,000 shares of Common Stock.
<PAGE>
NOTE 5 - COMMITMENT AND CONTINGENCIES
a) Lease agreement
The Company leases its administrative offices and storage
space pursuant to a signed lease agreement with an affiliate
owned by the Company's President. Such lease requires monthly
payments of $20,000 and expires on March 31, 1998. Under such
lease agreement, the Company is required to make future
minimum lease payments as follows:
<TABLE>
<CAPTION>
Year Ending
June 30,
<S> <C> <C>
1997 $ 60,000
1998 180,000
--------
Total $ 240,000
= =======
</TABLE>
The Company also leases a yard for storage of material
pursuant to an oral agreement with an unrelated party which
requires monthly payments of $3,500. Accordingly, included in
general and administrative expenses is rent expense which
amounted to $70,500 for the three months ended March 31, 1997
and 1996 and $211,500 for the nine months ended March 31, 1997
and 1996. As of March 31, 1997, $440,000 of rent remains
unpaid and is included in accounts payable.
b) Seasonality
The Company operates in an industry which may be seasonal,
generally due to inclement weather occurring during the winter
months. Accordingly, the Company may experience a seasonal
pattern in its operating results with lower revenue in the
third quarter of each fiscal year. Quarterly results may also
be affected by the timing of bid solicitations by governmental
authorities, the stage of completion of major projects and
revenue recognition policies.
c) Bonding requirements
The Company is required to provide bid and/or performance
bonds in connection with governmental construction projects.
To date, the Company has been able to sufficiently obtain
bonding up to $10,000,000 per job for its private projects.
The Company is continuously pursuing obtaining bonding for its
governmental construction projects. In addition, new or
proposed legislation in various jurisdictions may require the
posting of substantial additional bonds or require other
financial assurances for particular projects.
d) Mechanic's lien
During December 1996, the Company filed four separate mechanic's liens
aggregating $3,044,491 against two of its customers for non payment. Such amount
is included in the contracts and retainage receivable amount. As of June 30,
1996 the Company recorded an allowance against the accounts of these customers
of approximately $1,000,000. No additional allowances have been recorded as of
March 31, 1997. During, the three months ended March 31, 1997, three actions
seeking to foreclose on the mechanics liens previously
<PAGE>
filed were commenced.
e) Legal Proceedings
During January 1997, an action was commenced by the Ohio Bridge Corporation
("Ohio") against the Company. Ohio claims that the Company has infringed its
trademark "U.S. Bridge". In February 1997, the Company filed an answer to the
complaint. The action is presently in the discovery stage. Ohio seeks injunctive
relief, profits obtained by the Company as a result of its use of the name, and
compensatory damages. The Company's defense is based upon its belief that the
two companies do not compete against each other in the same industry and that
Ohio does not use the trademark in order to sell, market, or advertise its
products.
NOTE 6 -RELATED PARTY TRANSACTIONS
a) Purchase of material and labor
For the three months ended March 31, 1997 and 1996, the Company paid
$33,500 and $310,767, respectively to U.S. Bridge of Maryland, Inc. ("US Bridge
MD") for certain materials and labor necessary to perform steel erection
services. Amounts payable related to all of such transactions and included in
accounts payable total $152,571 at March 31, 1997. Such amounts are non-interest
bearing obligations. Said vendors are under the common control of the Company's
majority stockholder.
b) Rent expense
Included in general and administrative expenses is rent expense paid
pursuant to a signed lease agreement with a Company owned by the Company's
majority stockholder. Such rent amounted to $60,000 and $180,000 for the three
and nine months ended March 31, 1997 and 1996. Included in accounts payables as
of March 31, 1997 is $440,000 representing unpaid rent to such affiliated
entity.
c) Due to/from related parties
As of March 31, 1997, the Company has advanced $44,124 to related
Companies. Such advances are non-interest bearing and are due on demand.
As of March 31, 1997 the Company's President has advanced a total of
approximately $273,788 to the Company. The remaining balance amounting to $5,934
represents advances from other related Companies. Such advances are non-interest
bearing and are due on demand.
<PAGE>
ITEM 2 - Management's Discussion And Analysis Of Financial Condition And
Results Of Operations
RESULTS OF OPERATIONS
The Company recognizes revenue under the percentage of completion method.
Cost of contract revenues include all direct material and labor costs and those
indirect costs related to contract performance. The asset, costs and estimated
earnings in excess of billings on uncompleted contracts, represents costs and
estimated earnings in excess of amounts billed through March 31, 1997. Billings
in excess of costs and estimated earnings on uncompleted contracts, represents
billings which exceed costs and estimated earnings on individual uncompleted
contracts through March 31, 1997.
Company Background
The Company's operations are substantially controlled by Mr. Polito since
he owns approximately 69.5% of the outstanding shares of U.S. Bridge Corp.
("Bridge") and may be considered the beneficial owner of the shares of the
Company owned by Bridge. Mr. Polito is also a 100% shareholder of R.S.J.J.
Realty Corp. ("RSJJ"). RSJJ leases the administrative offices and storage space
to the Company at a cost of $20,000 per month pursuant to a signed lease
agreement expiring on March 31, 1998. Lastly, Mr. Polito has ownership interests
in Waldorf Steel Fabricators, Inc. (which ceased operations on August 1, 1995),
Crown Crane, Inc., Atlas Gem Leasing, Inc., Atlas Gem Erectors Co., Inc. and Gem
Steel Erectors.
Three months ended March 31, 1997 as compared to three months ended March
31, 1996
Contract revenues have increased by $518,634 or 37% to $1,915,553 from
$1,396,919 for the three months ended March 31, 1997 as compared to the three
months ended March 31, 1996. This material increase is due to new contracts
commencing toward the first and second quarter of the Company's fiscal year.
The Company's gross profits for the three months ended March 31, 1997 is
41% as compared to the three months ended March 31, 1996 which was 33%. This
increase in gross profit amounting 8% is primarily due to the Company revising
its contract cost estimates.
For the three months ended March 31, 1997 and 1996, the Company paid
$33,500 and $310,767, respectively to U.S. Bridge of Maryland, Inc. ("US Bridge
MD") for certain materials and labor necessary to perform steel erection
services. US Bridge MD is a wholly owned subsidiary of Bridge. Amounts payable
related to all of such transactions and included in accounts payable total
$152,571 at March 31, 1997. Such amounts are non-interest bearing obligations.
Said vendors are under the common control of the Company's majority stockholder.
General and administrative expenses include salaries, office overhead and
costs associated with estimating and bidding activities. General and
administrative expenses have decreased minimally by $25,194 or 4% to $593,958
for the three months March 31, 1997 from $619,152 for the three months ended
March 31, 1996.
<PAGE>
Nine months ended March 31, 1997 as compared to nine months ended March 31,
1996
Contract revenues have increased by $3,821,136 or 99% for the nine months
ended March 31, 1997 to $7,691,412 as compared to the contract revenue for the
nine months ended March 31, 1996 of $3,870,276. This increase is a direct result
of the company obtaining additional contracts during the year. Towards the
latter part of the year ended June 30, 1996 the Company obtained new contracts
and additional change orders to previous contracts amounting to approximately
$22,500,000.
The Company's gross profits for the nine months ended March 31, 1997 is 32%
as compared to the nine months ended March 31, 1996 which was 35%. The decrease
in gross profit is due to the Company revising its contract cost estimates for
jobs coming to an end in the current period, pursuant to the percentage of
completion method. In addition, the Company did not recognize revenue related to
profit sharing on certain projects during the nine months ended March 31, 1997.
General and administrative expenses have decreased by $63,500 or 4% to
$1,665,197 for the nine months ended March 31, 1997 from $1,728,697 for the nine
months ended March 31, 1996. The total decrease amounting to $63,500 is mainly
attributable to decrease in office overhead.
As of March 31, 1997, the Company has a backlog of approximately
$13,273,000. Backlog represents the amount of revenue the Company expects to
realized from work to be performed on uncompleted contracts in progress and from
contractual agreements which work has not yet begun.
Liquidity and Capital Resources
At March 31, 1997, the Company has working capital of $5,089,553.
As of March 31, 1997, the Company's accounts receivable amounted to
$7,140,332 of which approximately $886,000 or 12% has been collected through May
7, 1997. During December 1996, the Company filed three separate mechanic's liens
aggregating $3,044,491 against two of its customers for non payment. Such amount
is included in the contracts and retainage receivable amount. As of June 30,
1996 the Company recorded an allowance against the accounts of these customers
of approximately $1,000,000. No additional allowance has been recorded as of
March 31, 1997.
Net cash used for operating activities amounted to $97,083 for the nine
months ended March 31, 1997 as compared to a use of cash of $1,804,451 for the
nine months ended March 31, 1996. With regards to financing activities, the
Company provided $224,963 of cash for the nine months ended March 31, 1997. Such
cash was provided primarily by loans from stockholder and other related parties.
During September 1994, the Company entered into an installment agreement
with the I Internal Revenue Service in order to liquidate delinquent payroll
taxes of approximately $231,535 and remove a tax lien filed by such authority.
The agreement required the Company to pay $25,000 per month until such amount is
fully paid. As per the terms of the agreement, the Company must also pay timely
all current payroll taxes. As of March 31, 1997 the Company has not made all the
required $25,000 monthly payments and has not paid timely all current payroll
taxes. Payroll taxes payable, including accrued penalties and interest, amounted
to $573,633 as of March 31, 1997.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1 - Legal Proceedings:
In January 1997, an action was commenced (by the filing of a complaint)
by The Ohio Bridge Corporation ("Ohio") against the Company. Ohio claims that
the Company has infringed its trademark "U.S. Bridge." In February 1997, the
Company filed an answer to the complaint. The Company continues to defend
against the action, which is now in the discovery phase. Ohio seeks injunctive
relief, profits obtained by the Company as a result of the use of its name, and
compensatory damages. The Company's defense is based upon its belief that the
two companies do not compete against each other in the same industry and that
Ohio does not use the trademark in order to sell, market, or advertise its
products.
Three actions seeking to foreclose on four mechanics liens (three of
which were previously filed by the Company, the fourth of which was filed by
McKay Enterprises, Inc., a general contractor for whom the Company was a
subcontractor) were commenced by the Company within the last three months. On
February 25, 1997, the first such action was commenced in New York State Supreme
Court, Kings County. The action names the Company and Metro Steel Structures,
Ltd. as plaintiffs and Perini Corporation, Metropolitan Transportation
Authority, New York City Transportation Authority, and Fidelity and Deposit
Company of Maryland as defendants.
The second action was commenced in New York State Supreme Court, Queens
County on February 26, 1997. It names the Company, Metro Steel Structures, Ltd.,
and McKay Enterprises, Inc. as plaintiffs and Perini Corporation, Department of
Transportation of the City of New York, and Fidelity and Deposit Company of
Maryland as defendants.
The third action was commenced on or about May 13, 1997 in New York
State Supreme Court, Suffolk County and names the Company as plaintiff and Kiska
Construction Corp., the State of New York, acting through the New York State
Comptroller, the New York State Department of Transportation, and Seaboard
Surety Company as defendants.
Counsel retained to handle this matter, Congdon, Flaherty, O'Callahan,
Reid, Donlon, Travis & Fishlinger, advises that Perini, against whom the Company
filed three liens, has not as yet interposed answers to the aforesaid actions.
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
Upon unanimous written consent of the Company's Board of Directors, the
Company authorized the issuance to its President, Joseph M. Polito, of options
to purchase 125,000 shares of the Company's Common Stock. Mr. Polito purchased
the shares on March 25, 1997, pursuant to an Option Agreement authorized by the
Company's 1994 Senior Management Incentive Plan, for $1.10 per share (110% of
the bid price on November 27, 1996). Pursuant to Form S-8, Registration
Statement filed with the Securities Exchange Commission in February, 1997, the
Company registered the sale by Mr. Polito of these shares. The shares were sold
in two transactions (one consisting of the sale of 65,000 shares; the other of
60,000 shares) on March 31, 1997.
ITEM 6 - Exhibits and Reports on Form 8-K: None
<PAGE>
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.
U.S. Bridge of N.Y., Inc..
(Registrant)
Dated: May 15, 1997 /s/ Joseph Polito
Joseph Polito
President
/s/ Ronald Polito
Ronald Polito
Treasurer
<PAGE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information extracted from Balance
Sheet, Statement of Operations, Statements of Cash Flows and Notes thereto
incorporated in this Form 10-QSB and is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> jun-30-1997
<PERIOD-END> mar-31-1996
<CASH> 347,287
<SECURITIES> 0
<RECEIVABLES> 7,255,253
<ALLOWANCES> 0
<INVENTORY> 1,388,698
<CURRENT-ASSETS> 9,026,805
<PP&E> 2,909,277
<DEPRECIATION> 0
<TOTAL-ASSETS> 12,101,290
<CURRENT-LIABILITIES> 7,291,718
<BONDS> 0
0
0
<COMMON> 6,016
<OTHER-SE> 2,169,597
<TOTAL-LIABILITY-AND-EQUITY> 12,101,290
<SALES> 1,915,553
<TOTAL-REVENUES> 1,915,553
<CGS> 1,156,070
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 743,692
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 77,368
<INCOME-PRETAX> (118,796)
<INCOME-TAX> 76,445
<INCOME-CONTINUING> (195,241)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (195,241)
<EPS-PRIMARY> (.03)
<EPS-DILUTED> 0
</TABLE>
