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, 1996
--------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT
For the transition period from to
Commission file number 0-18109
BCAM INTERNATIONAL, INC.
(Exact name of small business issuer as specified in its charter)
New York 13-3228375
-------- ----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1800 Walt Whitman Road, Melville, New York 11747
(Address of principal executive offices)
(516) 752-3550
(Issuer's telephone number)
Not applicable
(Former name, former address and former fiscal year,
if changed since last report.)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities 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 X No
--- ---
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes X No
--- ---
State the number of shares outstanding of each of the issuer's classes of
common equity as of the latest practicable date: 14,857,233
----------
Transitional Small Business Disclosure Format (check one): Yes No X
--- ---
1
<PAGE>
FORM 10-QSB
BCAM INTERNATIONAL, INC.
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Condensed Consolidated Balance Sheet--March 31, 1996 (Unaudited)..............3
Condensed Consolidated Statements of Operations - Three Months
Ended March 31, 1996 and 1995 (Unaudited)..................................4
Condensed Consolidated Statements of Cash Flows - Three Months Ended
March 31, 1996 and 1995 (Unaudited)........................................5
Notes to Condensed Consolidated Financial Statements - March 31, 1996
(Unaudited)...................................................................6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations........................................8
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K....................................10
SIGNATURES...................................................................11
INDEX OF EXHIBITS............................................................12
2
<PAGE>
<TABLE>
<CAPTION>
BCAM International, Inc.
Condensed Consolidated Balance Sheet (Unaudited)
March 31, 1996
<S> <C>
Assets
Current assets:
Cash and cash equivalents $ 1,604,080
Accounts receivable, less allowance for doubtful accounts of $34,334 247,617
Prepaid expenses and other current assets 108,675
------------
Total current assets 1,960,372
Property, plant, and equipment, at cost:
Furniture and fixtures 220,318
Equipment 587,511
Leasehold improvements 50,519
------------
858,348
Less accumulated depreciation and amortization (605,925)
------------
252,423
Other assets, principally patents (net of accumulated amortization of $174,840) 163,211
------------
Total assets $ 2,376,006
============
Liabilities and shareholders' equity Current liabilities:
Accounts payable $ 69,026
Accrued expenses and other current liabilities 197,171
------------
Total current liabilities 266,197
Other liabilities 10,197
Commitments and contingencies -
Acquisition preferred stock, par value $.01 per share:
Authorized 750,000 shares, no shares issued or outstanding -
Common shareholders' equity:
Common stock, par value $.01 per share; authorized 40,000,000 shares,
15,620,415 shares issued and 14,857,233 shares outstanding 156,204
Paid-in surplus 14,981,979
Deficit (12,139,471)
------------
2,998,712
Less 763,182 treasury shares (899,100)
------------
2,099,612
------------
Total liabilities and shareholders' equity $ 2,376,006
============
See accompanying notes
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
BCAM International, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
Three months ended March 31
------------------------------------------
1996 1995
------------------- -------------------
<S> <C> <C>
Net revenue $ 102,495 $ 114,765
Costs and expenses:
Direct costs of revenue 44,745 194,143
Selling, general and administrative 507,656 367,687
Research, development and engineering 27,227 62,163
------------------- -------------------
Total operating expenses 579,628 623,993
------------------- -------------------
Net loss from operations (477,133) (509,228)
Interest and other income 24,812 53,811
------------------- -------------------
Net loss $ (452,321) $ (455,417)
=================== ===================
Net loss per share $ (0.03) $ (0.03)
=================== ===================
Weighted average number of common
shares outstanding 14,857,233 14,757,233
=================== ===================
See accompanying notes
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
BCAM International, Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
Three months ended March 31
---------------------------
1996 1995
----------- -----------
<S> <C> <C>
Operating activities
Net loss $ (452,321) $ (455,417)
Reconciliation of net cash provided by (used in) operating activities:
Depreciation and amortization 36,415 39,238
Accrued interest on held to maturity (13,941) (47,863)
securities
Changes in operating assets and liabilities:
Accounts receivable (111,622) 100,161
Prepaid expenses and other current assets 124,910 (44,493)
Other assets 3,740 (16,257)
Accounts payable, accrued expenses and sundry liabilities (156,474) (92,739)
Other liabilities 2,354 (8,186)
----------- -----------
Net cash (used in) operating activities (566,939) (525,556)
----------- -----------
Investing activities
Purchase of property, plant and equipment - (1,800)
Purchase of held to maturity securities - (1,299,782)
Proceeds from sale of held to maturity securities 1,521,113 1,100,000
----------- -----------
Net cash provided by (used in) investing activities 1,521,113 (201,582)
----------- -----------
Financing activities
Payment of stock registration and issuance costs (51,780) (38,932)
----------- -----------
Net cash (used in) financing activities (51,780) (38,932)
----------- -----------
Increase (decrease) in cash and cash equivalents 902,394 (766,070)
Cash and cash equivalents at beginning of period 701,686 1,040,101
----------- -----------
Cash and cash equivalents at end of period $1,604,080 $274,031
=========== ===========
See accompanying notes
</TABLE>
5
<PAGE>
BCAM International, Inc.
Notes to Condensed Consolidated Financial Statements (continued)
BCAM International, Inc.
("the Company")
Notes to Condensed Consolidated Financial Statements
(Unaudited)
March 31, 1996
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to
Form 10-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, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three-month
period ended March 31, 1996 are not necessarily indicative of the results
that may be expected for the year ending December 31, 1996. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Company's annual report on Form 10-KSB for the year
ended December 31, 1995.
2. Per Share Data
Net loss per share has been computed on the basis of the weighted
average number of common shares outstanding for each of the periods
presented. Common share equivalents have been excluded since their effect
is anti-dilutive.
3. Income Taxes
The Company accounts for income taxes in accordance with Financial
Accounting Standards Board ("FASB") Statement No. 109, "Accounting for
Income Taxes". The Company has not reflected a benefit for income taxes in
the accompanying Condensed Consolidated Statements of Operations for the
three months ended March 31, 1996 and the three months ended March 31,
1995, since the future availability of net operating loss carryforwards
have been offset in full by valuation allowances in accordance with FASB
Statement No. 109.
6
<PAGE>
4. Reclassifications
Certain reclassifications have been made to the consolidated financial
statements for the three months ended March 31, 1995 in order to conform to
the classifications used in the current period.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The March 31, 1996 Form 10-QSB represents the first quarterly report
after the Form 10-KSB for the year ended December 31, 1995. The 10-QSB
should be read in conjunction with the aforementioned document, and
represents a comparison between the quarter ended March 31, 1996 and the
quarter ended March 31, 1995.
Results of Operations
Net revenue is derived from services rendered and the sale of products
that are adjunct to services, generally pursuant to fixed price contracts
with terms of less than one year. The Company's policy is to recognize
revenue when services are rendered or when the related products are
shipped.
Direct costs, that include salaries, equipment purchases for
contracts, consulting fees and certain other costs, may fluctuate from
period to period. Factors influencing fluctuations include the nature and
volume of services provided to individual customers which affect contract
pricing, the Company's success in estimating contract costs (principally
professional time), the timing of hiring new professionals who may require
training before gaining certain efficiencies and customer demands.
The following is a summary of net revenue, direct costs, and gross
profit for the periods indicated.
<TABLE>
<CAPTION>
Three Months Ended March 31
1996 1995
<S> <C> <C>
Net revenue $102,495 $114,765
Direct costs 44,745 194,143
Gross profit $57,750 ($79,378)
Gross profit % 56% (69%)
</TABLE>
Net revenue decreased by $12,270, to $102,495, during the three months
ended March 31, 1996, as compared to the same period in 1995. The decrease
was primarily due to a different mix of business in 1996 as 1995 included a
non-core sale of computer systems. Excluding this item, net revenue
increased by $22,730, primarily due to Ergonomic Consulting Services.
Direct costs decreased by $149,398, to $44,745, in the quarter ended
March 31, 1996, as compared to the same period in 1995. The decrease was
primarily due to a more favorable mix of internal versus outside resources
in 1996 versus 1995, and, in 1996, a reduction of a reserve established in
1994.
8
<PAGE>
As a result of the above, gross profit increased by $137,128 to
$57,750 for the quarter ended March 31, 1996, as compared to the comparable
period in 1995.
Selling, general and administrative expenses increased by $139,969 for
the three months ended March 31, 1996, as compared to the same period in
1995. This increase was primarily attributable to a growth in salaries,
benefits and related expenses, as a result of the addition of three sales
and marketing positions. Also contributing to the increase were severance
costs which were one-time in nature.
Research, development and engineering costs decreased by $34,936 to
$27,227 for the quarter ended March 31, 1996 from $62,163 for the same
period in 1995. This was primarily due to projects in 1995 relating to
Intelligent Surface Technology, which have been completed, as well as the
capitalization of software development costs in 1996.
Interest and other income decreased by $28,999 for the three months
ended March 31, 1996 compared to the three months ended March 31, 1995.
This was due to a decrease in assets available for investment.
Net loss, as a result of the above, for the three months ended March
31, 1996, was $452,321, as compared to a net loss of $455,417 for the
comparable period in 1995.
There was no tax benefit for the three months ended March 31, 1996 and
the three months ended March 31, 1995, due to losses which have increased
the future availability of the net operating loss carryforward which has
been offset by valuation allowances.
Liquidity and Capital Resources
Cash, cash equivalents and marketable securities were $1,604,080 as of
March 31, 1996, compared to $2,208,858 as of December 31, 1995. Working
capital was $1,694,175 as of March 31, 1996, compared to $2,155,767 as of
December 31, 1995. The decrease of $461,592 or 27.2% in working capital was
primarily attributable to the net loss incurred in the three months ended
March 31, 1996.
The Company expects that its working capital, together with revenue
from operations will be more than sufficient to meet any liquidity and
capital requirements for the remainder of 1996.
The Company has no material commitments for any future capital
expenditures. .
9
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
27 Financial Data Schedule
(b) Reports on Form 8-K
No reports were filed on Form 8-K during the three month
period ended March 31, 1996..
10
<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.
BCAM INTERNATIONAL, INC.
Dated: May 15, 1996 By: /s/ Michael Strauss
------------ --------------------
Michael Strauss
Chairman of the Board of Directors
Chief Executive Officer
Dated: May 15, 1996 By: /s/ Allan Tepper
------------ -----------------
Allan Tepper
VP of Finance
Chief Financial Officer
11
<PAGE>
INDEX OF EXHIBITS
Exhibit No. Exhibit
27 Financial Data Schedule, Unaudited
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted
from the Condensed Consolidated Balance Sheet, Condensed
Consolidated Statements of Operations and Condensed Consolidated
Statements of Cash Flows, and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<CIK> 0000856143
<NAME> BCAM International, Inc.
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<EXCHANGE-RATE> 1.000
<CASH> 1,604,080
<SECURITIES> 0
<RECEIVABLES> 281,951
<ALLOWANCES> 34,434
<INVENTORY> 0
<CURRENT-ASSETS> 1,960,372
<PP&E> 858,348
<DEPRECIATION> 605,925
<TOTAL-ASSETS> 2,376,006
<CURRENT-LIABILITIES> 266,197
<BONDS> 0
0
0
<COMMON> 156,204
<OTHER-SE> 1,943,408
<TOTAL-LIABILITY-AND-EQUITY> 2,376,006
<SALES> 0
<TOTAL-REVENUES> 127,307
<CGS> 0
<TOTAL-COSTS> 44,745
<OTHER-EXPENSES> 534,883
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (452,321)
<INCOME-TAX> 0
<INCOME-CONTINUING> (452,351)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (452,321)
<EPS-PRIMARY> (0.03)
<EPS-DILUTED> (0.03)
</TABLE>
