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 June 30, 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: 14,877,233
----------
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--June 30, 1996 (Unaudited)...............3
Condensed Consolidated Statements of Operations - Three Months
and Six Months Ended June 30, 1996 and 1995 (Unaudited)................. ..4
Condensed Consolidated Statements of Cash Flows - Six Months Ended
June 30, 1996 and 1995 (Unaudited).........................................5
Notes to Condensed Consolidated Financial Statements - June 30, 1996
(Unaudited)...................................................................6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations............................................7
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.....................................9
SIGNATURES...................................................................10
INDEX OF EXHIBITS............................................................11
2
<PAGE>
<TABLE>
<CAPTION>
BCAM International, Inc.
Condensed Consolidated Balance Sheet (Unaudited)
June 30, 1996
<S> <C>
Assets
Current assets:
Cash and cash equivalents ................................................. $ 1,604,224
Accounts receivable, less allowance for doubtful accounts of $11,245 ...... 157,845
Prepaid expenses and other current assets ................................. 117,375
------------
Total current assets .......................................................... 1,879,444
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 ............................ (627,481)
------------
230,867
Other assets, principally patents (net of accumulated amortization of $189,709) 229,903
------------
Total assets .................................................................. $ 2,340,214
============
Liabilities and shareholders' equity
Current liabilities:
Accounts payable .......................................................... $ 107,246
Notes payable, at prime ................................................... 400,000
Accrued expenses and other current liabilities ............................ 176,392
------------
Total current liabilities ..................................................... 683,638
Other liabilities ............................................................. 12,550
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,
15,640,415 shares issued and 14,877,233 shares outstanding ................ 156,404
Paid-in surplus ........................................................... 14,992,780
Deficit ................................................................... (12,606,058)
------------
2,543,126
Less 763,182 treasury shares .............................................. (899,100)
------------
1,644,026
------------
Total liabilities and shareholders' equity .................................... $ 2,340,214
============
See accompanying notes
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
BCAM International, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
Three months ended June 30 Six months ended June 30
------------------------------------- ----------------------------------
1996 1995 1996 1995
----------------- ----------------- ---------------- ---------------
<S> <C> <C> <C> <C>
Net revenue $ 108,226 $ 299,631 $ 210,721 $ 414,396
Costs and expenses:
Direct costs of revenue 4,543 194,020 49,288 388,163
Selling, general and administrative 567,659 456,174 1,075,315 823,861
Research, development and engineering 19,333 47,243 46,560 109,406
----------------- ----------------- ---------------- ---------------
Total operating expenses 591,535 697,437 1,171,163 1,321,430
----------------- ----------------- ---------------- ---------------
Net loss from operations (483,309) (397,806) (960,442) (907,034)
Interest and other income 16,722 47,302 41,534 101,113
----------------- ----------------- ---------------- ---------------
Net loss $ (466,587) $ (350,504) $ (918,908) $ (805,921)
================= ================= ================ ===============
Net loss per share $ (0.03) $ (0.02) $ (0.06) $ (0.05)
================= ================= ================ ===============
Weighted average number of common
shares outstanding 14,859,211 14,798,991 14,858,222 14,778,227
================= ================= ================ ===============
See accompanying notes
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
BCAM International, Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
Six months ended June 30
--------------------------
1996 1995
----------- -----------
<S> <C> <C>
Operating activities
Net loss $ (918,908) $ (805,921)
Reconciliation of net cash provided by (used in) operating activities:
Depreciation and amortization 72,840 84,911
Accrued interest on held to maturity securities 7,172 (90,601)
Changes in operating assets and liabilities:
Accounts receivable (21,850) (236,916)
Prepaid expenses and other current assets 116,210 109,643
Other assets (77,821) (7,107)
Accounts payable, accrued expenses and sundry liabilities (139,033) (176,842)
Other liabilities 4,707 (33,162)
----------- -----------
Net cash (used in) operating activities (956,683) (1,155,995)
----------- -----------
Investing activities
Purchase of property, plant and equipment - (3,386)
Proceeds from sale of equipment - 1,200
Purchase of held to maturity securities - (1,299,782)
Proceeds from sale of held to maturity securities 1,500,000 1,818,000
----------- -----------
Net cash provided by investing activities 1,500,000 516,032
----------- -----------
Financing activities
Net proceeds from short-term debt 400,000 -
Net proceeds from sale of common stock and exercise of options 18,440 -
Payment of stock registration and issuance costs (59,219) (77,234)
----------- -----------
Net cash provided by (used in) financing activities 359,221 (77,234)
----------- -----------
Increase (decrease) in cash and cash equivalents 902,538 (717,197)
Cash and cash equivalents at beginning of period 701,686 1,040,101
========== ===========
Cash and cash equivalents at end of period $1,604,224 $ 322,904
=========== ===========
See accompanying notes
</TABLE>
5
<PAGE>
BCAM International, Inc.
("the Company")
Notes to Condensed Consolidated Financial Statements
(Unaudited)
June 30, 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 and six-month periods ended June 30, 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 and six months ended June 30, 1996 and the three months and six months
ended June 30, 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.
4. Reclassifications
Certain reclassifications have been made to the consolidated financial
statements for the three months and six months ended June 30, 1995 in order to
conform to the classifications used in the current period.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The June 30, 1996 Form 10-QSB represents the second 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 June 30, 1996 and the
quarter ended June 30, 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 June 30 Six Months Ended June 30
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Net revenue $108,226 $299,631 $210,721 $414,396
Direct costs 4,543 194,020 49,288 388,163
Gross profit $103,683 $105,611 $161,433 $26,233
Gross profit % 96% 35% 77% 6%
</TABLE>
Net revenue decreased by $191,405, to $108,226, during the three
months ended June 30, 1996, and by $203,675, to $210,721, for the six
months ended June 30, 1996, as compared to the same periods in 1995. The
decrease was partly due to a decline of $82,500 in Intelligent Surface
Technology revenue which, in 1995, included $95,000 relating to the
completion of several deliverables for two of our licensees.. Also
contributing to the decrease was a decline in Ergonomic Consulting Services
revenue, mostly due to delays in the start date of certain projects. These
projects are expected to begin in the third quarter.
7
<PAGE>
Direct costs decreased by $189,477 and $338,875 for the three months
and six months ended June 30, 1996, respectively, as compared to the same
periods in 1995. The decrease was primarily due to a more favorable mix of
internal versus outside resources in 1996 versus 1995, and the elimination
of a reserve established in 1994.
As a result of the above, gross profit remained virtually unchanged
for the quarter ended June 30, 1996 as compared with the same period in
1995, despite the shortfall in revenue in the current period, and increased
by $135,200 for the six months ended June 30, 1996, as compared to the
comparable period in 1995.
Selling, general and administrative expenses increased by $111,485 for
the three months ended June 30, 1996, as compared to the same period in
1995, and increased by $251,454 for the six months ended June 30, 1996, as
compared with 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 sales and marketing positions. Also contributing
to the increase were recruiting, legal, consulting and severance costs
which were one-time in nature.
Research, development and engineering costs decreased by $27,910 to
$19,333, for the three months ended June 30, 1996, and by $62,846 to
$46,560 for the six months ended June 30, 1996, from the same periods 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 $30,580 for the three months
ended June 30, 1996, as compared to the three months ended June 30, 1995.
Interest and other income decreased by $59,579 for the six months ended
June 30, 1996, as compared to the six months ended June 30, 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 June
30, 1996, was $466,587, as compared to a net loss of $350,504 for the
comparable period in 1995. Net loss for the six months ended June 30, 1996
was $918,908, as compared to a net loss of $805,921 for the same period in
1995.
There was no tax benefit for the three months and six months ended
June 30, 1996 and the three months and six months ended June 30, 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 $1,604,224 as of
June 30, 1996, compared to $2,208,858 as of December 31, 1995. Working
capital was $1,195,806 as of June 30, 1996, compared to $2,155,767 as of
December 31, 1995. The decrease of $959,961 or 44.5% in working capital was
primarily attributable to the net loss incurred in the six months ended
June 30, 1996.
8
<PAGE>
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. .
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
At the Company's 1996 Annual Meeting of Shareholders held on June 18,
1996 votes were cast to: (1) elect five directors of the Company; and (2)
consider and act upon a proposal to ratify the appointment of Ernst & Young
LLP as the Company's independent auditors for the fiscal year ending
December 31, 1996.
With respect to the election of the five nominated directors, the
following were elected: Michael Strauss (chairman), Robert P. Wong, Julian
H. Cherubini, Joel L. Gold, and Glenn Santmire
With respect to the second proposal, the appointment of Ernst & Young
was ratified by the shareholders.
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 six month period
ended June 30, 1996.
9
<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: August 14, 1996 By: /s/ Michael Strauss
Michael Strauss
Chairman of the Board of Directors
Chief Executive Officer
Dated: August 14, 1996 By: /s/ Allan Tepper
Allan Tepper
VP of Finance and Administration
Chief Financial Officer
10
<PAGE>
INDEX OF EXHIBITS
Exhibit No. Exhibit
27 Financial Data Schedule, Unaudited
11
<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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<EXCHANGE-RATE> 1.000
<CASH> 1,604,224
<SECURITIES> 0
<RECEIVABLES> 169,090
<ALLOWANCES> 11,245
<INVENTORY> 0
<CURRENT-ASSETS> 1,879,444
<PP&E> 858,348
<DEPRECIATION> 627,481
<TOTAL-ASSETS> 2,340,214
<CURRENT-LIABILITIES> 683,638
<BONDS> 0
0
0
<COMMON> 156,404
<OTHER-SE> 1,487,622
<TOTAL-LIABILITY-AND-EQUITY> 2,340,214
<SALES> 0
<TOTAL-REVENUES> 210,721
<CGS> 0
<TOTAL-COSTS> 49,288
<OTHER-EXPENSES> 1,121,875
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (918,908)
<INCOME-TAX> 0
<INCOME-CONTINUING> (918,908)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (918,908)
<EPS-PRIMARY> (0.06)
<EPS-DILUTED> (0.06)
</TABLE>
