UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended March 31, 1999
---------------------------------------------
Commission file number 0-19170
JUNIPER GROUP, INC.
-------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
New York 11-2866771
- -------------------------------------------------------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
111 Great Neck Road, Suite 604, Great Neck, New York 11021
- --------------------------------------------------------------------------------
(Address of principal executive offices)
(516) 829-4670
- --------------------------------------------------------------------------------
(Issuer's telephone number)
- --------------------------------------------------------------------------------
(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 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
--- ---
The number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date, May 14, 1999, was 3,197,720 shares of
common stock - $.001 par value.
Transitional Small Business Disclosure Format: Yes No X
--- ---
1
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1: Financial Statements
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
March December
Assets 31, 1999 31, 1998
----------- -----------
Current Assets
Cash ........................................... $ 6,769 $ 48,925
Accounts receivable - trade .................... 705,942 788,410
Due from affiliates ............................ 7,305 8,085
Investment in Nuclear Cardiac Imaging .......... 228,296 152,879
Prepaid expenses and other current assets ...... 217,704 215,764
Due from officer ............................... 124,194 101,755
----------- -----------
Total current assets ....................... 1,290,210 1,315,818
Film licenses .................................. 2,939,960 2,939,960
Property and equipment net of accumulated
depreciation of $92,564 and $85,554
respectively ................................. 137,053 141,677
Other assets ................................... 166,935 167,540
----------- -----------
$ 4,534,158 $ 4,564,995
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses .......... $ 1,086,660 $ 1,023,541
Notes payable - current ........................ 146,407 168,725
Due to producers - current ..................... 15,780 47,178
Due to shareholders ............................ 7,000 7,000
----------- -----------
Total current liabilities ................. 1,255,847 1,246,444
Notes payable - long term 166,667 166,667
Due to producers - long term ..................... 11,094 17,692
----------- -----------
Total liabilities ......................... 1,433,608 1,430,803
----------- -----------
Shareholders' Equity
12% Non-voting convertible redeemable
preferred stock: $.10 par value, 875,000
shares authorized, 233,900 shares issued
and outstanding at March 31, 1999, and
December 31, 1998: aggregate liquidation
preference, $467,800 at March 31, 1999
and December 31, 1998 ......................... 23,390 23,390
Common Stock - $.001 par value, 75,000,000
shares authorized, 3,525,293 and 3,072,204
issued and outstanding at March 31, 1999
and December 31, 1998 respectively ........... 3,525 3,072
Capital contributions in excess of par:
Attributed to preferred stock ................. 208,523 208,523
Attributed to common stock .................... 10,092,004 9,855,404
Retained earnings (deficit) .................... (7,226,892) (6,956,197)
----------- -----------
Total shareholders' equity .................... 3,100,550 3,134,192
----------- -----------
$ 4,534,158 $ 4,564,995
=========== ===========
See Notes to Consolidated Financial Statements
2
<PAGE>
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
March 31, March 31,
1999 1998
------------ ------------
Revenues:
Healthcare .............................. $ 153,929 $ 208,435
Entertainment ........................... -- -
------------ ------------
153,929 208,435
------------ ------------
Operating Costs:
Healthcare .............................. 31,886 21,775
Entertainment ........................... - -
Selling, general and administrative expenses . 324,307 420,263
------------ ------------
356,193 442,038
------------ ------------
Net income (loss) before income (loss)from
minority interest........................... (202,264) (233,603)
Income (loss) from minority interest......... (68,431) -
------------ ------------
Net income (loss)............................ $ (270,695) $ (233,603)
Weighted average number of shares outstanding 3,368,323 947,733
============ ============
Net income (loss) per common share........... $ (0.08) $ (0.26)
============ ============
See Notes to Consolidated Financial Statements
3
<PAGE>
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended
March 31, March 31,
1999 1998
------------ ------------
Operating Activities
Net income (loss) ............................ $ (270,695) $(233,603)
Adjustments to reconcile net cash provided
by operating activities:
Amortization expense.........................
Depreciation expense ........................ 7,010 10,211
Gain on disposition of assets ............... -- (6,362)
Expense from minority interest............... 68,431 --
Payment of officer's compensation with equity 34,563 209,724
Payment of various liabilities with equity .. 38,627 3,950
Payment of employees compensation with equity 19,000 --
Changes in assets and liabilities:
Accounts receivable ......................... 82,468 (39,693)
Prepaid expenses and other current assets ... (1,940) (7,916)
Other assets ................................ 605 --
Due to/from officers ........................ (22,439) (189,662)
Due from affiliates ......................... 780 4,104
Accounts payable and accrued expenses ....... 63,119 (38,470)
---------- ---------
Net cash provided from (used for)
operating activities ...................... 19,529 (287,717)
---------- ---------
Investing activities:
Sale (purchase) of equipment ................ (2,386) (5,250)
--------- ---------
Financing activities:
Investment in Nuclear Cardiac Imaging........ (125,686) --
Reduction in borrowings ..................... (22,317) (90,794)
Proceeds from borrowings .................... 100,000 400,000
Payments to and on behalf of producers ...... (11,296) (6,408)
Proceeds from private placements ............ -- 145,894
---------- ---------
Net cash provided from (used for)
financing activities ...................... (59,299) 448,692
---------- ---------
Net increase (decrease in cash) ............. (42,156) 155,725
Cash at beginning of period ................. 48,925 30,187
---------- ---------
Cash at end of period ....................... $ 6,769 $ 185,912
========== =========
Supplemental cash flow information:
Interest paid .............................. $ 5,830 $ 6,340
---------- ---------
See Notes to Consolidated Financial Statements
4
<PAGE>
JUNIPER GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - Basis of Presentation:
The interim consolidated financial statements included herein have been
prepared without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission ("SEC"). Certain information and footnote disclosures,
normally included in the financial statements prepared in accordance with
generally accepted accounting principles, have been condensed or omitted
pursuant to SEC rules and regulations; nevertheless, management of the Company
believes that the disclosures herein are adequate to make the information
presented not misleading. The consolidated financial statements and notes should
be read in conjunction with the audited consolidated financial statements and
notes thereto as of December 31, 1998 included in the Company's Form 10-KSB
filed with SEC.
In the opinion of management, all adjustments consisting only of normal
recurring adjustments necessary to present fairly the consolidated financial
position of the Company with respect to the interim consolidated financial
statements have been made. The results of operations for the interim periods are
not necessarily indicative of the results to be expected for the full year.
5
<PAGE>
Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion and analysis of financial condition and results of
operations should be read in conjunction with the Company's consolidated
financial statements and notes thereto included elsewhere herein. The statements
disclosed herein include forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended and Section 21E of the
Securities Exchange Act of 1934, as amended. The Company's actual results could
differ materially from those projected in the forward-looking statements as a
result of certain risks and uncertainties, including, but not limited to, the
Company's historical lack of profitability, the Company's need for additional
financing, competition in the managed health care industry, and other risks
detailed from time to time in the Company's filings with the Securities and
Exchange Commission.
OVERVIEW
- --------
Juniper Group, Inc. (the "Company")is a Nevada Corporation. Its principal
businesses are composed of two segments, healthcare and entertainment: (i) the
healthcare operations are conducted through two subsidiaries of Juniper Medical
Systems, Inc. ("JMSI"), which is a wholly owned subsidiary of the Company: (a)
PartnerCare, Inc. ("PCI"), a managed care revenue enhancement company providing
various types of services such as: Accounts Receivable Management, Regulatory
reimbursement compliance, charge-off reviews, revenue collections, hospital and
physician accounts receivable financing and other related business office
outsourcing services to newly evolved integrated hospital and physician markets;
and (b) Juniper Healthcare Containment Systems, Inc. ("Containment"), which
develops and provides full service healthcare networks for insurance companies
and managed care markets in the Northeast U.S.; and (ii) the entertainment
segment is conducted principally through Juniper Pictures, Inc. ("Pictures"), a
wholly owned subsidiary of Juniper Entertainment, Inc. ("JEI"), a wholly owned
subsidiary of the Company, which engages in the acquisition, exploitation and
distribution of rights to films to the various media (i.e., home video, pay-per
view, pay television, cable television, networks and independent syndicated
television stations) in the domestic and foreign marketplace. The Company's
operations are based at 111 Great Neck Road, Suite 604, Great Neck, New York
11021.
RESULTS OF OPERATIONS
- ---------------------
Three Months Ended March 31, 1999 vs Three Months Ended March 31, 1998
- ---------------------------------------------------------------------------
Revenue related to the Healthcare segment decreased to $154,000 in the
first quarter of 1999 from $208,000 in the first quarter of 1998, representing a
26% decrease. The decrease in revenue during the first quarter of 1999 was
predominately attributed to Containment, which had no revenue in 1999, compared
to approximately $108,000 in the first quarter of 1998. This is a result of
changes instituted in December 1997, whereby Containment discontinued a joint
venture arrangement and its arrangement with the Guardian Insurance Company
("The Guardian"). The loss of this business was temporarily replaced with a
settlement agreement which generated revenue with no corresponding expense
throughout 1998. Since revenue from the Guardian's business diminished largely
to the increase in managed care penetration in the North East U.S. region, the
business with The Guardian decreased and the relationship with the Joint Venture
terminated. PCI's revenue increased to $154,000 in 1998, from $100,000 in 1998.
This was the result of an increase in market penetration and a wider array of
managed care clients.
The entertainment segment recognized no revenue in the first quarter of
1999, or the first quarter of 1998. Certain of the Company's films that
generated revenue when the contracts were signed are still under license, and
are currently being aired by the licensees. The Company is currently utilizing
its resources to build the healthcare segment of its business, and has not
devoted resources toward the promotion and solicitation of the films in 1999.
However, the Company has begun looking for outside salesmen to help market and
marchandise the films that are not currently under license.
Healthcare operating costs increased to $32,000 in the first quarter of
1999 from $22,000 in the first quarter of 1998, a 45% increase. As a percentage
of revenue, operating costs of the healthcare operations increased to 21% in the
first quarter of 1999 from 11% in the first quarter of 1998. The increase is due
to the fact that Containment reflected no revenue in 1999, while it reflected
revenue in 1998 with no related operating costs.
6
<PAGE>
Selling, general and administrative expenses decreased to $324,000 in the
first quarter of 1999 from $420,000 in the first quarter of 1998, a 23%
decrease. This decrease is primarily due to decreases in salaries of $66,000,
bad debt expenses of $42,000 and public relations expenses of $31,000, offset by
increases in legal expenses of $40,000. The decrease in salaries (as well as
other overhead expenses to a lesser extent), was attributable to the allocation
of cerain expenses to NCI during its start up and organizational period. Such
allocations are charged to NCI as part the Company's investment in that entity.
The Company reflects its proportionate share of these expenses in the income
statement as losses from minority interests. The decrease in bad debt expense
was due to a change in 1998 to a more conservative evaluation than in previous
periods of the Company's accounts receivable. This conservative evaluation has
continued in 1999 causing the Company to record a greater allowance for certain
types of accounts receivable related to its heathcare business.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Working capital at March 31, 1999 was $34,000, compared to working capital
of $69,000 at December 31, 1998. The ratio of current assets to current
liabilities was 1.03:1 at March 31, 1999 and 1.06:1 at December 31, 1998. Cash
flow provided from operations during the first quarter of 1999 was $20,000,
compared to cash flow used for operations during the first quarter of 1998, of
$288,000.
Accounts receivable - trade decreased to $706,000 at March 31, 1999 from
$788,000 at December 31, 1998.
Accounts payable increased to $1,087,000 at March 31, 1999 from $1,024,000
at December 31, 1998.
Although the Company plans to continue to expand its healthcare business to
the extent that resources are available, the Company has no firm material
commitments for capital expenditures in other areas of its business and has no
plans to acquire additional films.
The Company believes that it may not have sufficient liquidity to meet its
operating cash requirements for the current level of operations during the
remainder of 1999. The Company will require additional financing. There can be
no assurance that financing will be available, or if available, on terms
acceptable to the Company. If the Company is unable to fund its operating cash
flow needs, the Company may be required to substantially curtail operations.
The Company currently does not have any bank lines of credit.
7
<PAGE>
PART II: OTHER INFORMATION
Item 2. Changes in Securities
-----------------------
(a) The information disclosed in Item 4 below is incorporated herein by
reference.
(b) N/A
(c) Shares of Common Stock, $0.001 par value, sold in the first quarter of 1999
were as follows:
<TABLE>
<CAPTION>
Date Purchaser No. of Shares Consideration Exemption
- -------------------- ------------------ ------------------- -------------------------------------- ---------
<S> <C> <C> <C> <C> <C>
3/31/99 Officers 142,835 The President and CEO of the Company
accepted common stock in lieu of accrued
salary and other amounts owed to him in
the amount of $53,563. 4(2)
3/31/99 Vendors 126,254 Vendors accepted common stock in lieu of 4(2)
unpaid fees in the amount of $64,489.
3/31/99 Employees 50,667 An employee accepted common stock in lieu 4(2)
of accrued salary in the amount of $19,000.
3/31/99 Debentures 133,333 A debenture for $100,000 was converted to 4(2)
common stock
</TABLE>
_______________________
Item 3. Defaults Upon Senior Securities
-------------------------------
Preferred Stockholders are entitled to receive out of assets legally
available for payment a dividend at a rate of 12% per annum of the Preferred
Stock liquidation preference of $2.00 (or $.24 per annum) per share, payable
quarterly on March 1, June 1, September 1 and December 1, in cash or in shares
of Common Stock having an equivalent fair market value. Unpaid dividends on the
Company's Preferred Stock cumulate. The quarterly payments due on September 1
and December 1, 1992, and all payments due in 1993, in 1994, in 1995, in 1996,
in 1997, in 1998 and the payment due on March 1, 1999 have not yet been paid
and are accumulating. These dividends have not been declared because earned
surplus is not available to pay a cash dividend. Accordingly, dividends will
accumulate until such time as earned surplus is available to pay a cash dividend
or until a post effective amendment to the Company's registration statement
covering a certain number of common shares reserved for the payment of Preferred
Stock dividends is filed and declared effective, or if such number of common
shares are insufficient to pay cumulative dividends, then until additional
common shares are registered with the Securities and Exchange Commission (SEC).
No dividends shall be declared or paid on the Common Stock (other than a
dividend payable solely in shares of Common Stock) and no Common Stock shall be
purchased, redeemed or acquired by the Company unless full cumulative dividends
on the Preferred Stock have been paid or declared, or cash or shares of Common
Stock have been set apart which is sufficient to pay all dividends accrued on
the Preferred Stock for all past and then current dividend periods.
As stated above, pursuant to the terms of the Preferred Stock, the Company
has the option of making quarterly dividend payments in cash or shares of Common
Stock. The Company does not intend to make any Preferred Stock dividends in cash
in the foreseeable future. Prospectively, subject to the Company's Prospectus
being current, and a sufficient number of common shares being registered with
the SEC, the Company anticipates making quarterly dividend payments in shares of
Common Stock for the foreseeable future including the payments which have not
yet been made. The total cash value of the arrearage of unpaid dividends at
March 31, 1999, was $378,918.
During the first quarter of 1999, the Company made an offer to holders of
Preferred Stock to tender their shares. The offer provided for 1.65 shares of
common stock in exchange for each share of preferred stock tendered.
Accordingly, the rights to the unpaid dividends of the holders of preferred
stock will be eliminated. On May 10, 1999, the offer was terminated and
approximately 191,153 of the 233,900 shares were tendered. Accordingly, 42,747
shares of Preferred Stock remain outstanding. The arrearage of unpaid dividends
for these shares is $69,250 at March 31, 1999.
8
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
Exhibit Description
3.1 Certificate of Incorporation of the Registrant, as amended (1)
3.2 Amendment to the Certificate of Incorporation of the Registrant, filed
March 7, 1998 (2)
3.3 Certificate of Incorporation of Juniper Group, Inc., a Nevada
corporation.(3)
3.4 By-Laws of the Registrant (1)
3.5 Amendment to the By-Laws of the Registrant approved by the shareholders
of the Registrant on February 12, 1998 (3)
3.6 By-Laws of Juniper Group, Inc., a Nevada corporation (3)
27.1 Financial Data Schedule
- ---- -----------------------
(1) Incorporated by reference to the Company's Annual Report on Form 10-KSB
for the fiscal year ended December 31, 1995
(2) Incorporated by reference to the Company's Annual Report on Form 10-KSB
for the fiscal year ended December 31, 1997
(3) Incorporated by reference to the Company's Proxy Statement for its
Annual Meeting held in February 1998
(b) Reports on Form 8-K.
NONE
9
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
caused this report to be signed by the undersigned, thereunto duly authorized.
JUNIPER GROUP, INC.
Date: May 17, 1999
By:/s/ Vlado P. Hreljanovic
------------------------
Vlado P. Hreljanovic
Chairman of the Board, President,
Chief Executive Officer and Acting
Chief Financial Officer
10
<PAGE>
EXHIBIT INDEX
Exhibit Description
27.1 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF INCOME FOUND ON PAGES
3 & 4 OF THE COMPANY'S FORM 10-QSB FOR THE THREE MONTHS ENDED MARCH 31, 1999.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> Mar-31-1999
<CASH> 6,769
<SECURITIES> 0
<RECEIVABLES> 705,942
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,290,210
<PP&E> 229,617
<DEPRECIATION> 92,564
<TOTAL-ASSETS> 4,534,158
<CURRENT-LIABILITIES> 1,225,847
<BONDS> 0
0
23,390
<COMMON> 3,525
<OTHER-SE> 3,073,635
<TOTAL-LIABILITY-AND-EQUITY> 4,534,158
<SALES> 0
<TOTAL-REVENUES> 153,929
<CGS> 0
<TOTAL-COSTS> 356,193
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (270,695)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (270,695)
<EPS-PRIMARY> (0.08)
<EPS-DILUTED> (0.08)
</TABLE>
