SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB/A
(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, 1997
--------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT
For the transition period from _________ to ___________
Commission file number 0-18109
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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 ___ No ___
State the number of shares outstanding of each of the issuer's classes of
common equity as of the latest practicable date: 15,954,733
----------
Transitional Small Business Disclosure Format (check one): Yes ____ No X
<PAGE>
FORM 10-QSB/A
BCAM INTERNATIONAL, INC.
PART I. FINANCIAL INFORMATION:
- -------------------------------
Item 1. Financial Statements
Condensed Consolidated Balance Sheet--March 31, 1997 (Unaudited)...............3
Condensed Consolidated Statements of Operations - Three Months
Ended March 31, 1997 and 1996 (Unaudited)...................................4
Condensed Consolidated Statements of Cash Flows - Three Months Ended
March 31, 1997 and 1996 (Unaudited).........................................5
Notes to Condensed Consolidated Financial Statements - March 31, 1997
(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, 1997
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 912,325
Accounts receivable, less allowance for doubtful accounts of $11,245 75,524
Prepaid expenses and other current assets 547,536
--------------------
Total current assets 1,535,385
Property, plant, and equipment, at cost:
Furniture and fixtures 220,318
Equipment 595,812
Leasehold improvements 50,519
--------------------
866,649
Less accumulated depreciation and amortization (687,566)
--------------------
179,083
Other assets, principally patents and capitalized software
(net of accumulated amortization of $97,229) 316,422
--------------------
Total assets $ 2,030,890
====================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 218,079
Accrued expenses and other current liabilities 159,566
--------------------
Total current liabilities 377,645
Other liabilities 4,289
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,
16,717,915 shares issued and 15,954,733 shares outstanding 167,179
Paid-in surplus 16,000,408
Deficit (13,619,531)
--------------------
2,548,056
Less 763,182 treasury shares (899,100)
--------------------
1,648,956
--------------------
Total liabilities and shareholders' equity $ 2,030,890
====================
See accompanying notes
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
BCAM INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
THREE MONTHS ENDED MARCH 31
----------------------------------------------
1997 1996
------------------- ----------------------
<S> <C> <C>
Net revenue $ 71,371 $ 102,495
Costs and expenses:
Direct costs of revenue 79,171 44,745
Selling, general and administrative 408,935 507,656
Research, development and engineering 8,109 27,227
------------------- ----------------------
Total operating expenses 496,215 579,628
------------------- ----------------------
Net loss from operations (424,844) (477,133)
Interest income (expense), net 6,603 24,812
------------------- ----------------------
Net loss $ (418,241) $ (452,321)
=================== ======================
Net loss per share $ (0.03) $ (0.03)
=================== ======================
Weighted average number of common
shares outstanding 15,407,511 14,857,233
=================== ======================
See accompanying notes
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
BCAM INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
THREE MONTHS ENDED MARCH 31
------------------------------------------
1997 1996
------------------ -----------------
<S> <C> <C>
OPERATING ACTIVITIES
Net loss $ (418,241) $ (452,321)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation 16,975 36,415
Amortization 6,467 -
Accrued interest on held to maturity securities - (13,941)
Changes in operating assets and liabilities:
Accounts receivable (52,987) (111,622)
Prepaid expenses and other current assets (214,059) 124,910
Accounts payable, accrued expenses and sundry liabilities 92,580 (156,474)
Other liabilities - 2,354
------------------ -----------------
Net cash (used in) operating activities (569,265) (570,679)
------------------ -----------------
INVESTING ACTIVITIES
Purchase of property, plant and equipment (2,270) -
Investment in software technology (94,354) 3,740
Proceeds from sale of held to maturity securities - 1,521,113
------------------ -----------------
Net cash (used in) provided by investing activities (96,624) 1,524,853
------------------ -----------------
FINANCING ACTIVITIES
Net proceeds from sale of common stock 1,075,000 -
Net proceeds from exercise of options - -
Payment of stock registration and issuance costs (23,130) (51,780)
------------------ -----------------
Net cash provided by (used in) financing activities 1,051,870 (51,780)
------------------ -----------------
Increase in cash and cash equivalents 385,981 902,394
Cash and cash equivalents at beginning of period 526,344 701,686
================== =================
Cash and cash equivalents at end of period $ 912,325 $ 1,604,080
================== =================
See accompanying notes
</TABLE>
5
<PAGE>
BCAM INTERNATIONAL, INC.
("THE COMPANY")
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
MARCH 31, 1997
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, 1997 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1997. 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, 1996.
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
stock equivalents have been excluded since their effect is antidilutive.
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, 1997 and the three months ended March 31, 1996, 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>
BCAM INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
4. PRIVATE PLACEMENT
On January 15, 1997, the Company offered a minimum of 400,000 units, each
consisting of one share of the Company's common stock and a non-redeemable Class
AA warrant which entitles the holder to purchase one share of the Company's
Common Stock at a price of $1.10 per share, until March 31, 1999. The offering
was completed on March 28, 1997, and the Company sold 1,075,000 units for
$1,075,000. The funds will be used for the advancement of various technologies
as well as for working capital.
5. STOCK PURCHASE AGREEMENT
On March 19, 1997 the Company entered into an agreement with another
company (the "acquiree") to purchase all of the common stock of the acquiree for
approximately $4,600,000. This commitment is contingent upon the Company
obtaining the necessary financing to fund the purchase. The Company does not
have any obligations under this agreement should management be unable to obtain
this financing.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
------------------------------------------------------------------------
OF OPERATIONS
-------------
The March 31, 1997 Form 10-QSB/A (which amends the March 31, 1997 Form
10-QSB to correct typographical errors) represents the first quarterly report
after the Form 10-KSB and Form 10-KSB/A for the year ended December 31, 1996.
The 10-QSB/A should be read in conjunction with the aforementioned document, and
represents a comparison between the quarter ended March 31, 1997 and the quarter
ended March 31, 1996.
RESULTS OF OPERATIONS
Net revenue is recognized based on the percentage of completion method as
costs are incurred, no significant obligations remain outstanding and collection
of the accounts receivable, in management's estimation, is deemed probable.
Net revenue decreased by $31,124, to $71,371, during the three months ended
March 31, 1997, as compared to the same period in 1996. The decrease was
primarily due to a decline of approximately $36,000 in Ergonomic Workplace
Assessment service revenue.
Direct costs include salaries, equipment purchases for contracts,
consulting fees and certain other costs. Gross profit 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
experience, efficiencies and meeting customer demands.
Direct costs in total increased by $34,427, to $79,172, in the quarter
ended March 31, 1997, as compared to the same period in 1996. The reason for the
increase in total is that 1996 direct costs were offset by a $63,750 reduction
in a reserve established in 1994. Excluding this item, direct costs were $29,323
lower in 1997 than in 1996.
As a result of the above, gross profit, as set forth in the table below,
decreased by $65,551 for the quarter ended March 31, 1997, as compared to the
comparable period in 1996.
Three Months Ended March 31
---------------------------
1997 1996
---- ----
Net revenue $71,371 $102,495
Direct costs 79,172 44,745
------- --------
Gross profit ($7,801) $57,750
Gross profit % (11%) 56%
8
<PAGE>
Selling, general and administrative expenses decreased by $98,721 for the
three months ended March 31, 1997, as compared to the same period in 1996. This
decrease was primarily attributable to a reduction in salaries, benefits and
related expenses, as a result of the elimination of two sales and marketing
positions. In addition, insurance costs were reduced due to the negotiation of
more favorable rates on certain policies.
Research, development and engineering costs decreased by $19,118 to $8,109
for the quarter ended March 31, 1997 from $27,227 for the same period in 1996.
Net interest income decreased by $18,209 for the three months ended March
31, 1997 compared to the three months ended March 31, 1996. 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,
1997, was $418,241, as compared to a net loss of $452,321 for the comparable
period in 1996.
There was no tax benefit for the three months ended March 31, 1997 and the
three months ended March 31, 1996, 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 held-to-maturity securities were $912,325 as of
March 31, 1997, compared to $526,344 as of December 31, 1996. Net cash used in
operating activities, mainly to cover the net loss, was $569,265 for the period
ended March 31, 1997. Investing activities used $96,624 in the three months
ended March 31, 1997, primarily for investment in software technology. Financing
activities, primarily the proceeds from a private placement completed on March
28, 1997 provided $1,051,870 in cash for the period ended March 31, 1997.
Working capital was $1,157,740 as of March 31, 1997, compared to $597,293
as of December 31, 1996. The increase of $560,447 or 93.8% in working capital
was primarily attributable to the proceeds from the private placement, reduced
by the net loss incurred in the three months ended March 31, 1997.
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 1997.
9
<PAGE>
On March 19, 1997, the Company entered into an agreement with the owners of
Drew whereby, the Company will purchase all of the Common Stock of Drew for
$4,600,000 subject to financing. Drew, of Lancaster Ohio, is a 125 year-old
leading designer, manufacturer and distributor of medical footwear and orthotic
products. This acquisition will complete the Company's restructuring. Drew
represents an opportunistic and synergistic vehicle for the Company to
incorporate IST into medical footwear and orthotic products, for diabetics,
arthritics, and the aging population.
The Company has committed to spend $230,000 during the remainder of 1997
for the development of the Microvalve.
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, 1997.
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 20, 1997 By: /s/ Michael Strauss
------------ --------------------
Michael Strauss
Chairman of the Board of Directors
Chief Executive Officer
Dated: May 20, 1997 By: /s/ Robert P. Wong
------------ ------------------
Robert P. Wong
Vice Chairman of the Board of Directors
Chief Technology Officer
Acting 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-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<EXCHANGE-RATE> 1.000
<CASH> 912,325
<SECURITIES> 0
<RECEIVABLES> 75,524
<ALLOWANCES> 11,245
<INVENTORY> 0
<CURRENT-ASSETS> 1,535,385
<PP&E> 866,649
<DEPRECIATION> 687,566
<TOTAL-ASSETS> 2,030,890
<CURRENT-LIABILITIES> 377,645
<BONDS> 0
0
0
<COMMON> 167,179
<OTHER-SE> 1,481,777
<TOTAL-LIABILITY-AND-EQUITY> 2,030,890
<SALES> 0
<TOTAL-REVENUES> 71,371
<CGS> 0
<TOTAL-COSTS> 79,171
<OTHER-EXPENSES> 417,044
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (418,241)
<INCOME-TAX> 0
<INCOME-CONTINUING> (418,241)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (418,241)
<EPS-PRIMARY> (0.03)
<EPS-DILUTED> (0.03)
</TABLE>