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 SEPTEMBER 30, 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: 0-28140
U.S. Bridge Corp.
(Exact name of registrant as specified in its charter)
Delaware 11-2974406
(State or other jurisdiction of
incorporation (I.R.S. Employer Identification No.)
or organization)
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)
N/A (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 [ ] No
[X]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares of each of the issuer=s classes of common equity
outstanding as of the latest practicable date: Common stock, par value $.001 per
share: 7,402,148 shares outstanding as of November 10, 1997.
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
<PAGE>
U.S. BRIDGE CORP.
INDEX
<TABLE>
<CAPTION>
PART 1. FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
<S> <C> <C> <C>
Consolidated Balance Sheets September 30, 1997
(unaudited) and June 30, 1997 ........................... 3
Consolidated Statements of Operations (unaudited)
for the Three Months ended September 30, 1997 and 1996 .. 4
Consolidated Statement of Stockholders' Equity (unaudited)
for the Three Months ended September 30, 1997 .......... 5
Consolidated Statements of Cash Flows (unaudited)
for the Three Months ended September 30, 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 - 13
PART II ..........OTHER INFORMATION
Item 1 LEGAL PROCEEDINGS 13
Item 2 CHANGES IN SECURITIES AND USE OF PROCEEDS 15
Item 3 DEFAULTS UPON SENIOR SECURITIES 15
Item 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY 15
HOLDERS
Item 5 OTHER INFORMATION 15
Item 6 EXHIBITS AND REPORTS ON FORM 8-K 15
</TABLE>
<PAGE>
U.S. BRIDGE CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
(Unaudited)
September June
30, 1997 30, 1997
---------------- ------------
Current assets:
<S> <C> <C>
Cash .................................................................... $ 458,778 $ 555,435
Cash - restricted ....................................................... 216,949 214,001
Contracts and retainage receivable, net ................................. 10,924,032 8,962,297
Costs and estimated earnings in excess of billings
on uncompleted contracts ............................................... 2,426,790 2,225,723
Deferred tax asset ...................................................... 347,900 304,225
Other current assets .................................................... 202,386 186,499
------------ ------------
Total current assets ................................................ 14,576,835 12,448,180
Assets of discontinued operations ............................................ -- 2,889,999
Deferred tax asset - non current ............................................. 30,200 74,575
Other assets ................................................................. 92,493 87,500
------------ ------------
Total assets ................................................................. $ 14,699,528 $ 15,500,254
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable, including cash overdrafts of $121,934 and
$149,290, respectively .................................................. $ 3,752,122 $ 3,495,492
Accrued expenses ........................................................ 1,473,714 964,236
Payroll taxes payable (Note 6) .......................................... 2,158,598 1,441,589
Note payable ............................................................ 145,358 145,358
Billings in excess of costs and estimated earnings
on uncompleted contracts ............................................... 113,984 126,455
Due related parties ..................................................... 83,013 166,540
Income taxes payable .................................................... 648,837 522,379
Liabilities of discontinued operations .................................. 150,000 3,039,999
------------ ------------
Total current liabilities ........................................... 8,525,626 9,902,048
------------ ------------
Minority interest ............................................................ 3,092,681 2,828,301
------------ ------------
Commitments and contingencies (Note 4) ....................................... -- --
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 7,402,148 ............................... 7,006 7,006
Additional paid-in capital .............................................. 3,756,589 3,756,589
Accumulated deficit ..................................................... (441,749) (753,065)
------------ ------------
Sub-total stockholders= equity ...................................... 3,321,846 3,010,530
Less: Note receivable - stockholder ................................. (240,625) (240,625)
------------ ------------
Total stockholders' equity 3,081,221 2,769,905
---------------- ---------------
Total liabilities and stockholders' equity $ 14,699,528 $ 15,500,254
=============== ===================
</TABLE>
4
See accompanying notes to consolidated financial statements
<PAGE>
U.S. BRIDGE CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30,
(UNAUDITED)
<TABLE>
<CAPTION>
1997 1996
------------- ----------
Revenue:
<S> <C> <C>
Contract revenue .................................... $ 8,918,385 $ 3,176,051
----------- ----
Costs and expenses:
Cost of contract revenues ........................... 7,536,092 2,169,713
General and administrative expenses ................. 678,487 623,411
----------- ----
Total costs and expenses ....................... 8,214,579 2,793,124
----------- ----
Income from operations before other income (expense),
minority interest and provision for income taxes ....... 703,806 382,927
Other income (expenses):
Interest expense and financing costs ................ (3,900) (1,246)
Interest income ..................................... 2,948 --
----------- ----
Total other (expense) .......................... (952) (1,246)
----------- ----
Income before minority interest and provision
for income taxes ....................................... 702,854 381,681
Minority interest in net income ......................... (264,380) (203,020)
----------- ----
Loss before provision for income taxes .................. 438,476 178,661
Provision for income taxes (Note 2) ..................... 127,158 --
----------- ----
Net income before loss from discontinued operations ..... 311,316 178,661
Loss from discontinued operations ....................... -- 120,000
----------- ----
Net income .............................................. $ 311,316 $ 58,661
=========== ====
Net income per common equivalent share:
Income from operations before other income (expense),
minority interest and provision for income taxes .. $ .10 $ .06
=========== ====
Income before minority interest and provision for
income taxes ....................................... $ .10 $ .06
=========== ====
Provision for income taxes .......................... $ .02 $ --
=========== ====
Net income .......................................... $ .08 $ .01
=========== ====
Weighted average number of common shares outstanding .... 7,402,148 6,429,197
=========== ====
</TABLE>
6
See accompanying notes to consolidated financial statements
<PAGE>
U.S. BRIDGE CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
Common
stock
Additional Total
paid-in Accumulated Stockholders'
Shares Amount capital Deficit equity
<S> <C> <C> <C> <C> <C> <C>
Balances at July 1, 1997 ...... 7,402,148 $ 7,006 $3,756,589 $ (753,065) $3,010,530
Net income for the three months
ended September 30, 1997 ..... -- -- -- 311,316 311,316
---------- ---------- ---------- ---------- ----------
Balances at September 30, 1997 7,402,148 $ 7,006 $3,756,589 $ (441,749) $3,321,846
========== ========== ========== ========== ==========
</TABLE>
8
See accompanying notes to consolidated financial statements
<PAGE>
U.S. BRIDGE CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED SEPTEMBER 30,
(UNAUDITED)
<TABLE>
<CAPTION>
1997 1996
------------- --------------
Operating activities:
<S> <C> <C>
Net income ................................................................. $ 311,316 $ 58,661
Adjustments to reconcile net income to net
cash provided by (used for) operating activities:
Depreciation and amortization ......................................... 22,875 113,750
Minority interest in net income (loss) ................................ 264,380 203,020
Deferred income tax expense ........................................... 700 --
Decrease (increase) in:
Contracts and retainage receivable .................................... (1,961,735) (762,802)
Costs and estimated earnings in excess of
billings on uncompleted contracts .................................... (201,067) (491,109)
Other current assets ................................................ (110,887) (76,712)
Increase (decrease) in:
Accounts payable ...................................................... 256,630 515,614
Accrued expenses ...................................................... 509,478 55,000
Payroll taxes payable ................................................. 717,009 64,429
Billings in excess of costs and estimated
earnings on uncompleted contracts .................................... (12,471) (16,567)
Income taxes payable .................................................. 126,458 --
----------- -----------
Net cash used for operating activities .............................. (77,314) (336,716)
----------- -----------
Financing activities:
Net repayments to related parties .......................................... (16,395) 219,500
----------- -----------
Net cash (used for) provided by financing activities ................ (16,395) 219,500
----------- -----------
Net decrease in cash ........................................................... (93,709) (117,216)
Cash, beginning ................................................................ 769,436 399,652
----------- -----------
Cash, ending ................................................................... $ 675,727 $ 282,436
=========== ===========
Supplemental disclosure of cash flow information: Cash paid during the year for:
Interest .............................................................. $ 3,900 $ 1,246
=========== ===========
Taxes ................................................................. $ -- $ --
=========== ===========
Supplemental disclosure of non-cash financing activities:
In connection with the issuance of common stock, 400,000 shares
were issued in repayment of a note payable ................................ $ -- $ 400,000
=========== ===========
</TABLE>
10
See accompanying notes to consolidated financial statements
<PAGE>
U.S. BRIDGE CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
NOTE 1 - GENERAL
The accompanying unaudited financial statements have
been prepared in accordance with generally accepted accounting
principles for interim financial information and 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 September 30, 1997 are 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,
1997, included in the Company=s Annual Report Form 10-KSB,
filed with the Securities and Exchange Commission.
NOTE 2 - NOTES PAYABLE
a) Line of credit
In August 1994, the Company secured a $250,000 credit
line with a bank at an interest rate of one and one half
percent (11/2%) above the prime rate. The security for the
line of credit is in the form of a certificate of deposit in
the amount of $200,000 provided by U.S. Bridge of N.Y., Inc.
(AUS Bridge NY@). Interest is payable on the first day of each
month as of October 1, 1994. The credit line is payable on
demand. At September 30, 1997, the balance was $145,358.
NOTE 3 - MINORITY INTEREST
In connection with US Bridge NY's private placement
on March 9, 1995 and its Initial Public Offering (AIPO@), the
Company's interest in US Bridge NY was reduced to 49.95%
before its exercise of the special warrant. On September 9,
1995, the Company purchased, at $2.50 per share, 5,665 shares
of US Bridge NY=s common stock by exercising its right
pursuant to the terms of a special warrant issued only to the
Company. As a result, the Company increased its ownership in
US Bridge NY to 50.1% from 49.95%. During the year ended
September 30, 1997, certain US Bridge NY stock transactions
resulted in an increase in the Company=s ownership of US
Bridge NY to 53.23%. As of September 30, 1997, the minority
interest balance, amounting to $3,028,841, is a result of all
of the above transactions and the proportionate share of
income and losses attributable to the minority stockholders.
11
<PAGE>
U.S. BRIDGE CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
NOTE 4 - COMMITMENT AND CONTINGENCIES
a) Disclosure of significant estimates - revenue recognition
The Company=s construction revenue is recognized on
the percentage of completion basis. Consequently, construction
revenue and gross margin for each reporting period is
determined on a contract by contract basis by reference to
estimates by the Company=s management and engineers of
expected costs to be incurred to complete each project. These
estimates include provisions for known and anticipated cost
overruns, if any exist or are expected to occur. These
estimates may be subject to revision in the normal course of
business.
b) Leases
US Bridge NY leases its administrative offices
pursuant to a signed lease agreement with an affiliated entity
which requires monthly payments of $20,000. Such lease expires
on March 31, 1998. Under such lease agreement, US Bridge NY is
required to make future minimum lease payments as follows:
Year Ending
June 30,
1998 $ 120,000
==========
Total $ 120,000
==========
Accordingly, included in selling and general and
administrative expenses is rent expense which amounted to
$60,000 for each of the three months ended September 30, 1997
and 1996. US Bridge NY also leases a yard for storage material
pursuant to a oral agreement which requires monthly payments
of $3,500. As of September 30, 1997, $77,000 of yard rent
remains unpaid and is included in accounts payable.
c) Significant customers and vendors
For the three months ended September 30, 1997 and 1996,
the Company had two and three unrelated customers
respectively, which accounted for approximately 99% of total
revenues. As of September 30, 1997 and 1996, approximately 79%
and 53% of contracts and retainage receivables are due from
three customers.
d) Seasonality
US Bridge NY operates in an industry which may be
seasonal, generally due to inclement weather occurring during
the winter months. Accordingly, US Bridge NY 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
13
<PAGE>
U.S. BRIDGE CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
governmental authorities or the stage of completion of major projects.
NOTE 4- COMMITMENT AND CONTINGENCIES (Cont=d)
e) Bonding requirements
US Bridge NY is required to provide bid and/or
performance bonds in connection with governmental construction
projects. To date, US Bridge NY has been able to sufficiently
obtain bonding for its private projects. US Bridge NY 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.
f) Mechanic=s liens
As of September 30, 1997, three actions to foreclose
upon mechanic=s liens filed during the fiscal year were
commenced. Such actions seek relief in the approximate amount
of $3,278,775.
g) Payroll taxes
As of September 30, 1997, the Company owes approximately
$2,158,598 in payroll taxes and related penalties and
interest. Although as of September 30, 1997 the Company has
not entered into any formal repayment agreements with the
respective tax authorities, it has been making monthly
payments based on oral agreements. (See Note 6).
h) Legal proceedings
i) In January 1997, an action was commenced
by The Ohio Bridge Corporation (AOhio@) against US
Bridge NY. Ohio claims that US Bridge NY has infringed
its trademark AU.S. Bridge.@ In August 1997, the
Company, US Bridge NY, and US Bridge Corp. (Maryland)
(AUS Bridge MD@) agreed to change their names to the
following: USA Bridge Construction Corp., USA Bridge
Construction of N.Y., Inc., and USA Bridge Construction
Corp. (Maryland).
ii) The Company is a party to various
claims and legal proceedings incidental to its business.
In management=s opinion, the outcome of these claims and
proceedings will not have a material adverse effect on
the financial statements of the Company taken as a
whole.
14
<PAGE>
U.S. BRIDGE CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
NOTE 5 - RELATED PARTY TRANSACTIONS
a) Due to related parties
As of September 30, 1997, the Company owes approximately
$83,013 for advances made by affiliates and related parties on
its behalf. Such advances are non-interest bearing and are due
on demand.
b) Due from related parties
i) During the three months ended September
30, 1997 and 1996, the Company paid certain expenses on
behalf of an affiliate. These advances are non-interest
bearing and are due on demand. As of September 30, 1997;
such advances amounted to $80,000 and are included in
other current assets.
c) Rental expense
Included in general and administrative expenses is rent
expense paid by US Bridge NY pursuant to a signed lease
agreement with R.S.J.J. Realty Corp. (ARSJJ@), a company owned
by the Company's majority stockholder. The lease expires March
31, 1998. Rent expense for the three months ended September
30, 1997 and 1996 amounted to $60,000 and $60,000,
respectively.
NOTE 6 - SUBSEQUENT EVENTS
In November 1997, the Company paid approximately
$755,000 towards its September 30, 1997 payroll tax liability.
16
<PAGE>
ITEM 2. MANAGEMENT=S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
General
The following management=s discussion and analysis for the three months
ended September 30, 1997 and 1996 is a discussion of U.S. Bridge Corp.=s (Athe
Company@) subsidiaries since the Company did not have any material operations of
its own except for primarily stock-related transactions.
U.S. Bridge of N.Y., Inc. (AUS Bridge NY@), the primary operating
entity, recognizes revenue and costs for all contracts under the percentage of
completion method. Cost of contract revenues includes, all direct material and
labor costs and those indirect costs related to contract performance. General
and administrative expenses are accounted for as period costs and are,
therefore, not included in the calculation of the estimates to complete
construction contracts in progress. Material project losses are provided for in
their entirety without reference to the percentage of completion. As contracts
can extend over one or more accounting periods, revisions in costs and earnings
estimated during the course of the work are reflected during the accounting
period in which the facts become known. An amount equal to the costs
attributable to unapproved change orders and claims is included in the total
estimated revenue when realization is probable.
The current asset, "costs and estimated earnings in excess of billings
on uncompleted contracts," represents costs and estimated earnings in excess of
amounts billed on respective uncompleted contracts at the end of each period.
The current liability, "billings in excess of costs and estimated
earnings on uncompleted contracts," represents billings which exceed costs and
estimated earnings on respective uncompleted contracts at the end of each
period.
US Bridge NY's operations are substantially controlled by Mr. Polito
since he owns approximately 61% of the outstanding shares of the Company, which
owns 53.23% of the common stock of U.S. Bridge NY and may be considered the
beneficial owner of US Bridge NY. Mr. Polito is also a 100% shareholder of
R.S.J.J. Realty Corp. ("RSJJ"). RSJJ leases the administrative office space to
US Bridge NY at a cost of $20,000 per month pursuant to a signed lease agreement
expiring on March 31, 1998. US Bridge NY purchased from U.S. Bridge Corp.
(Maryland) (AUS Bridge MD@), a wholly-owned subsidiary of the Company, certain
materials and labor to perform steel erection service. For the three months
ended September 30, 1997 and 1996, purchases by US Bridge NY from US Bridge MD
amounted to $35,000 and $166,000, respectively. US Bridge MD ceased
substantially all of its operations in November 1996. Since then, US Bridge NY
has purchased its steel from unrelated parties.
US Bridge NY plans to continue to undertake projects as a
subcontractor, but will focus on obtaining projects as a general contractor in
both the public and private sectors. For those general contracting projects it
undertakes, US Bridge NY will be responsible for the performance of the entire
contract, including the work to be performed by subcontractors. Accordingly, US
Bridge NY may be subject to substantial liability if a subcontractor fails to
perform as required.
Though US Bridge NY does not believe its business is seasonal, its
operations are generally slow in the winter months due to the decrease in worker
productivity because of weather conditions. Accordingly,
17
<PAGE>
US Bridge NY may experience a seasonal pattern in its operating results with
lower revenue in the third quarter of each fiscal year. Interim results may also
be affected by the timing of bid solicitation, the stage of completion of major
projects, and revenue recognition policies.
In determining whether to issue a bond, surety companies perform credit
checks and other due diligence disclosure requirements and require the Company
to maintain certain amounts of capital and liquid assets. Each company bases the
amount of bonding it will issue on a formula (devised individually) which takes
into account, inter alia, a company=s capital and liquid assets. In order for
the Company to obtain and maintain bonding, it must adhere to the requirements
stipulated in the bonding agreements, which agreements vary with each bonding
company. The bonding costs for each bond are incorporated in the contract price
of each job. These costs are carried as a line item in the requisition and are
paid by the customer. Any monies taken from the working capital for this purpose
will be replaced as monthly requisition payments are received from the customer.
Bonding requirements vary depending upon the nature of the projects to be
performed. The Company anticipates paying a fee to bonding companies of between
1 3% to 3 2% of the amount of the contracts to be performed. Since these fees
generally are payable at the beginning of a project, the Company must maintain
sufficient working capital to satisfy the fee prior to receiving revenue from
the project.
Three months ended September 30, 1997 as compared to the three months ended
September 30, 1996
Contract revenues for the three months ended September 30, 1997 and
1996 amounted to $8,918,385 and $3,176,051, respectively. This net increase
amounting to $5,742,334 (or approximately 280%) is a direct result of US Bridge
NY=s backlog, which amounted to $6,088,000 as of June 30, 1997. This backlog
amount represents the contracts US Bridge NY entered into during the latter part
of its June 30, 1997 fiscal year. During the three months ended September 30,
1997, US Bridge NY obtained no new contracts but did obtain additional change
orders to previous contracts amounting to approximately $5,827,000. As of
September 30, 1997, US Bridge NY=s backlog amounted to approximately $3,133,000.
Backlog represents the amount of revenue US Bridge NY expects to realize from
work to be performed on uncompleted contracts in progress and from contractual
agreements for which work has not yet begun.
The Company=s gross profit for the three months ended September 30,
1997 amounted to 15%, whereas for the three months ended September 30, 1996,
gross profit amounted to 28%. Gross profit decreased by 13% as a result of the
Company revising its contract cost estimates for jobs coming to an end in the
current period.
For the three months ended September 30, 1997 and 1996, US Bridge NY
paid $35,000 and $166,000, respectively, to US Bridge MD for materials and labor
necessary to perform steel erection services. In November 1996, US Bridge MD
ceased substantially all of its operations, and US Bridge NY began purchasing
material and labor from unrelated third party steel fabricators. At September
30, 1997, US Bridge NY owed US Bridge MD $57,220, principally for advances in
connection with the above services. Such amounts are non-interest bearing and
due on demand.
General and administrative expenses have increased by $55,076 (or 9%)
to $678,487 for the three months ended September 30, 1997, from $623,411 for the
three months ended September 30, 1996. The increase in general administration
costs is mainly attributable to general corporate overhead. As of September 30,
1997, US Bridge NY has an allowance for doubtful accounts of $2,287,000 against
its contracts receivables. In management=s opinion, the allowance for doubtful
accounts at September 30, 1997
18
<PAGE>
will be sufficient to absorb any losses that may be sustained from a settlement
with this and other customers. For the three months ended September 30, 1997 and
1996, US Bridge NY had two and three unrelated customers, respectively, which
accounted for approximately 99% of total revenues. As of September 30, 1997 and
1996, approximately 79% and 53% of contracts and retainage receivables are due
from three customers.
Liquidity and Capital Resources
At September 30, 1997, the Company's working capital amounted to
$6,051,209. The working capital increase is principally attributable to US
Bridge NY=s contracts receivable. As of September 30, 1997, US Bridge NY's net
contracts receivable amounted to $10,924,032, approximately $2,833,000 or (26%)
of which has been collected through November 5, 1997.
Net cash used for operating activities amounted to $77,314 for the
three months ended September 30, 1997. For the three months ended September 30,
1996, the net cash used for operating activities amounted to $336,716 which was
principally attributable to increases in accounts receivable, costs and
estimated earnings in excess of billings on uncompleted contracts, and accounts
payable.
With regards to financing activities, the Company used $16,395 of cash
for the three months ended September 30, 1997. Such cash was used primarily for
repayments to affiliates and related parties.
As of September 30, 1997, the Company owes approximately $2,158,598 of
payroll taxes and related penalties and interest. Although as of September 30,
1997 the Company has not entered into any formal repayment agreements with the
respective tax authorities, it has been making monthly payments based on oral
agreements. Subsequent to September 30, 1997, the Company paid approximately
$755,000 towards its payroll tax liabilities as of September 30, 1997.
PART II
Item 1. Legal Proceedings
Three actions to foreclose upon mechanic=s liens were commenced by NY
in the last fiscal year. The first action was commenced in New York State
Supreme Court, Kings County on February 25, 1997. The action names NY and Metro
Steel Structures, Ltd. as plaintiffs and the Perini Corporation, Metropolitan
Transportation Authority, New York City Transportation Authority, and Fidelity
and Deposit Company of Maryland as defendants. NY=s claim for relief in this
action is $2,199,560. The claim is based upon filed mechanic=s liens and general
contract law. The claim is for labor performed and materials supplied including
money owed under the contract and money due for Aextra@ work with regard to the
Rehabilitation of the Viaduct at the Stillwell Avenue Station of the Coney
Island Line in Brooklyn, New York. This action is still in the discovery phase.
The second action was filed on February 26, 1997 in New York State
Supreme Court, Queens County. It names NY, 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. NY=s claim for relief in this action is $844,932. This
claim is based upon filed
19
<PAGE>
mechanic=s liens and general contract law. The claim is for labor performed and
materials supplied including money owed under the contract regarding the
rehabilitation of the 39th Street Bridge over the Long Island Rail Road and
Amtrak in Queens, New York. This action is still in the discovery phase.
On February 7, 1997, Perini Corporation filed a related action against
NY and Metro Steel Structures, Ltd. in New York State Supreme Court, Kings
County. Perini=s claims against NY total $1,140,560 and allege defective work on
the Stillwell Avenue project and upon a loss/profit agreement for both the
Stillwell Avenue project and the 39th Street Bridge project. NY has
counterclaimed for the amounts set forth in the above discussion of the two
actions involving Perini Corporation, and its claims are based upon the same
theories as those set forth above.
NY filed its third action in the New York Supreme Court, Suffolk County
on or about May 13, 1997. The action names Kiska Construction, the State of New
York, acting through the New York State Comptroller, the New York State
Department of Transportation, and the Seaboard Surety Company as defendants.
NY=s claim for relief in this action is $279,346. This claim is based upon filed
mechanic=s liens and general contract law. The claim is for labor performed and
materials supplied including money owed under the contract and money due for
Aextra@ work regarding the rehabilitation of the Robert Moses Causeway
Northbound Bridge over the State Boat Channel, in Suffolk County, New York. This
action is still in the discovery phase.
In August 1997, the Company, NY, and MD entered into an agreement settling
the January 1997 trademark infringement claim made by The Ohio Bridge
Corporation. The Company has agreed to effect a name change to USA Bridge
Construction Corp.; NY has agreed to effect a name change to USA Bridge
Construction of N.Y., Inc.; and MD has agreed to effect a name change to USA
Bridge Construction Corp. (Maryland) before the end of the 1997 calendar year.
In April 1995, NY (then Metro Steel Structures, Ltd.) commenced an
Article 78 proceeding in the Supreme Court of the State of New York, County of
New York, against the Commissioners of the State Insurance Fund and the State
Insurance Fund to annul the cancellation of NY's workers' compensation policy
and to annul the rates, classifications, and premiums assigned to NY. This
action claims that defendants audited NY's books for purposes of assigning the
workers' compensation rates and premiums to be assessed against NY and
thereafter (i) "arbitrarily and capriciously and without any foundation in law
or in fact" assigned to NY's employees improper job classifications which were
then used unlawfully as the basis for improperly assessing the highest premium
rates which could be assessed against NY; (ii) improperly applied said premiums
retroactively; (iii) billed NY for premiums which were improper and excessive;
and (iv) canceled NY's workers' compensation policy upon NY's failure to tender
payment in the improper and excessive amount demanded by defendants.
NY is prosecuting this action to the fullest extent possible. On
October 28, 1997, NY and defendants were scheduled to appear before the court
for a conference in this matter. This matter was adjourned, however, to December
1997, pending settlement discussions.
In December 1995, the Commissioners of the State Insurance Fund for and
on behalf of the State Insurance Fund commenced suit against Joseph Polito,
Ronald Polito, Steven Polito, NY, Metro Steel Structures, Ltd. (now known as
NY), One Carnegie, and others alleging that certain workers' compensation
insurance policies obtained for various insured defendants were obtained
fraudulently and that the defendant corporations failed to pay the appropriate
premiums. The claims against NY, amounting to
20
<PAGE>
approximately $3 million, are limited to a policy covering the period April 29,
1993 through December 1994. NY, Messrs. Polito, and all other defendants are
defending against this action. The action is in the discovery phase, and
settlement negotiations are currently underway.
On October 14, 1997, NY filed a mechanic=s lien in the amount of
$13,640,767 against EklecCo. On October 16, 1997, EklecCo (f/k/a Pyramid Company
of Rockland) commenced suit against NY in New York State Supreme Court, Rockland
County in connection with the West Nyack, Palisades Power Mall project. EklecCo
seeks to vacate the mechanic=s lien and seeks specific enforcement of the
contract and declaratory relief, damages for slander of title, and approximately
$500,000,000 in damages from NY for breach of contract and intentional
interference with contractual relations. NY intends to defend against this
action.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS: 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: None
21
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, this 14th day of November, 1997.
U.S. BRIDGE CORP.
By: /s/ Joseph M. Polito
Joseph M. Polito, President
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Exhibit 27
U.S. BRIDGE CORP.
FINANCIAL DATA SCHEDULE
This schedule contains summary financial information extracted from Balance
Sheet, Statement of operations, Statement of Cash Flows and Notes thereto
incorporated in Part I, Item 1 of 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> sep-30-1997
<CASH> 675,727
<SECURITIES> 0
<RECEIVABLES> 13,211,032
<ALLOWANCES> 2,287,000
<INVENTORY> 0
<CURRENT-ASSETS> 14,576,835
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 14,699,528
<CURRENT-LIABILITIES> 8,525,626
<BONDS> 0
0
0
<COMMON> 7,006
<OTHER-SE> 3,074,215
<TOTAL-LIABILITY-AND-EQUITY> 14,699,528
<SALES> 8,918,385
<TOTAL-REVENUES> 8,918,385
<CGS> 7,536,092
<TOTAL-COSTS> 7,536,092
<OTHER-EXPENSES> 678,487
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,900
<INCOME-PRETAX> 438,474
<INCOME-TAX> 127,158
<INCOME-CONTINUING> 311,316
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 311,316
<EPS-PRIMARY> 0.08
<EPS-DILUTED> 0.08
</TABLE>
