UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1999
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: 0-19472
CPX Corp.
(Exact name of registrant as specified in its charter)
Delaware 94-3087971
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
150 East 52nd Street 21st Floor,
New York, New York 10022
(Address of registrant's principal executive offices) (Zip Code)
(877) 431-2942
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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 [ ]
Outstanding at February 14, 2000
Common Stock, $0.001 par value 14,633,985
<PAGE>
INDEX
Page No.
PART I FINANCIAL INFORMATION
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets as of
December 31, 1999 (unaudited) and March 31, 1999 3
Condensed Consolidated Statements of Operations for the
Three Months ended December 31, 1999 and 1998 (unaudited) 4
Condensed Consolidated Statements of Operations for the
Nine Months ended December 31, 1999 and 1998 (unaudited) 5
Condensed Consolidated Statements of Cash Flows for the
Nine months ended December 31, 1999 and 1998 (unaudited) 6
Notes to Condensed Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 10
Signatures 11
<PAGE>
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CPX CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1999 (Unaudited) AND MARCH 31, 1999
<TABLE>
<CAPTION>
ASSETS
<S> <C> <C>
December 31, March 31,
1999 1999
(Unaudited)
Cash and cash equivalents ......................... $ 1,263,000 $ 17,061,000
Accounts receivable, net of allowance for
doubtful accounts of $0 & $13,491 ......... -- 214,000
Marketable securities ............................. -- 1,368,000
Prepaid expenses .................................. -- 222,000
Equipment ......................................... -- 3,000
Investment in and receivable from subsidiary ...... -- 370,000
------------- -------------
Total assets .............................................. $ 1,263,000 $ 19,238,000
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable .................................. $ -- $ 6,000
Pre-petition debt ................................. -- 12,683,000
Other liabilities ................................. -- 1,521,000
------------- -------------
Total liabilities ......................................... -- 14,210,000
Stockholders' equity:
Common stock, $.001 par value; 25,000,000
shares authorized; 14,633,985 shares issued
and outstanding ........................... 15,000 15,000
Additional paid-in capital ........................ 165,271,000 169,908,000
Accumulated deficit ............................... (164,023,000) (164,895,000)
------------- -------------
Total stockholders' equity ................................ 1,263,000 5,028,000
------------- -------------
Total liabilities and stockholders' equity ................ $ 1,263,000 $ 19,238,000
============= =============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
CPX CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED DECEMBER 31, 1999 AND 1998
(Unaudited)
<TABLE>
<CAPTION>
Three months ended December 31,
1999 1998
<S> <C> <C>
Product sales ........................................... $ -- $ 3,255,000
------------ ------------
Total revenues .......................................... -- 3,255,000
Costs and expenses:
Cost of product sales ........................... -- 1,435,000
Selling, general and administrative ............. 48,000 1,897,000
------------ ------------
Total costs and expenses ................ 48,000 3,332,000
------------ ------------
Loss from operations ............. (48,000) (77,000)
Other income (expense):
Interest income ................................. 29,000 --
Other, net ...................................... 13,000 (9,085,000)
------------ ------------
Total other income/(expense) ............ 42,000 (9,085,000)
------------ ------------
Net income/(loss) ............... $ (6,000) $ (9,162,000)
============ ============
Net income/(loss) per share - basic and diluted ......... $ (.00) $ (.63)
Weighted average number of common shares
outstanding during the period - basic and diluted 14,634,000 14,621,000
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
CPX CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
NINE MONTHS ENDED DECEMBER 31, 1999 AND 1998
(Unaudited)
<TABLE>
<CAPTION>
Nine months ended December 31,
1999 1998
<S> <C> <C>
Product sales ........................................... $ -- $ 9,912,000
------------ ------------
Total revenues .......................................... -- 9,912,000
Costs and expenses:
Cost of product sales ........................... -- 12,209,000
Research and development ........................ -- 6,030,000
Selling, general and administrative ............. 873,000 8,803,000
------------ ------------
Total costs and expenses ................ 873,000 27,042,000
------------ ------------
Loss from operations ............ (873,000) (17,130,000)
Other income (expense):
Interest income ................................. 197,000 350,000
Interest expense ................................ (117,000) (6,000)
Legal settlement ................................ 1,400,000 --
Administrative reserve .......................... 250,000 --
Other, net ...................................... 15,000 (10,364,000)
------------ ------------
Total other income/(expense) ............ 1,745,000 (10,020,000)
------------ ------------
Net income/(loss) ............... $ 872,000 $(27,150,000)
============ ============
Net income/(loss) per share - basic and diluted.......... $ .06 $ (1.86)
Weighted average number of common shares
outstanding during the period - basic and diluted.... 14,634,000 14,621,000
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
CPX CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED DECEMBER 31, 1999 AND 1998
(Unaudited)
Nine months ended December 31,
1999 1998
Net cash used in operating activities ....... $ (217,000) $(20,880,000)
------------ ------------
Cash flows from investing activities:
Proceeds from sale of subsidiary ............ 370,000 --
Proceeds from sale of equipment ............. 1,000 5,046,000
Proceeds from sales and maturities
of securities available for sale .... -- 7,746,000
Change in restricted cash equivalents ....... -- 9,220,000
------------ ------------
Net cash provided by investing activities 371,000 22,012,000
------------ ------------
Cash flows from financing activities:
Principal payments on long-term debt .... -- (313,000)
Payments on pre petition debt, net ...... (11,315,000) --
Distribution to shareholders ............ (4,637,000) --
Other ................................... -- (1,410,000)
------------ ------------
Net cash used in financing activities ... (15,952,000) (1,723,000)
------------ ------------
Net decrease in cash and cash equivalents ... (15,798,000) (591,000)
Cash and cash equivalents:
Beginning of period ..................... 17,061,000 12,464,000
------------ ------------
End of period ........................... $ 1,263,000 $ 11,873,000
============ ============
See accompanying notes to consolidated financial statements.
<PAGE>
CPX CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED DECEMBER 31, 1999
(Unaudited)
1. Basis of Presentation
The accompanying unaudited consolidated financial statements of CPX Corp.
(the "Company," formerly named Cellpro Corporation) should be read in
conjunction with the audited financial statements and notes there to contained
in the Company's Report on Form 8-K for the year ended March 31, 1999. In the
opinion of management, all adjustments necessary for a fair presentation of the
interim operating results are reflected herein. Results for the three and nine
months ended December 31, 1999 are not necessarily indicative of the results
that may be expected either for any other quarter in the year ending March 31,
2000 or for the entire year ending March 31, 2000.
2. Operations
The Company currently has no operating business. Management is pursuing
various strategic alternatives which include the possible use of the Company's
remaining net assets to acquire, merge, consolidate or otherwise combine with an
operating business or businesses; however, there is no assurance that any such
alternatives will occur.
3. Bankruptcy Plan and Distribution of Funds
On October 28, 1998, CellPro, Incorporated ("CellPro," the former name of
the Company) filed for bankruptcy protection under Chapter 11 of the United
States Bankruptcy Code, Case No. 98-13604 in the United States Bankruptcy Court
for the Western District of Washington, Judge Karen Overstreet presiding (the
"Bankruptcy Court"). On May 21, 1999 the Bankruptcy Court issued an order
confirming CellPro's Second Amended Plan of Reorganization (the "Plan") dated as
of May 10, 1999. The effective date of the Plan occurred on June 1, 1999.
4. Net Income Loss Per Share
Presentation of basic earnings per share ("EPS") and diluted EPS on the
face of the consolidated statements of operations is required for entities with
complex capital structures. Basic EPS is based on the weighted average number of
common shares outstanding during the period. Diluted EPS is based on the
potential dilution that would occur on exercise or conversion of securities into
common stock using the treasury stock method. However, potential common shares
that are considered to be anti-dilutive are excluded from the computation of
diluted EPS. Since the Company had a loss from operations for the three and nine
months ended December 31, 1998, inclusion of potential common shares would be
anti-dilutive. Accordingly, such potential common shares have been excluded from
the computation of diluted EPS resulting in the same amount for both basic and
diluted EPS. Specifically, options to acquire 2.7 million shares have been
excluded from the calculation of diluted EPS for the quarters ended December 31,
1998. Outstanding stock options could potentially dilute EPS in future periods.
For the quarters ending December 31, 1999, there were no options outstanding and
thus no potential dilutive effect.
<PAGE>
5. Comprehensive Income
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS
130"). The Company implemented SFAS 130 during the quarter ended June 30, 1998.
Comprehensive income includes net income/(loss) as shown in the consolidated
statement of operations adjusted by certain amounts that are included in
stockholders' equity accounts. Net unrealized gains or losses on securities
available for sale and foreign currency translation adjustments resulting from
the consolidation of foreign operations are the only two adjustments to net loss
to arrive at the Company's comprehensive loss. The table below shows
comprehensive loss for the periods presented:
<TABLE>
<CAPTION>
December 31, 1999 December 31, 1998
Three months Nine months Three months Nine months
<S> <C> <C> <C> <C>
Net Income/(loss) ............... $ (6,000) $ 872,000 $ (9,162,000) $(27,150,000)
Foreign currency translation .... -- -- -- 21,000
Net unrealized gain (loss) on
securities available for sale... -- -- -- (6,000)
------------ ------------ ------------ ------------
Comprehensive Income/(loss) ..... $ (6,000) $ 872,000 $ (9,162,000) $(27,135,000)
============ ============ ============ ============
</TABLE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OVERVIEW
The Company filed a voluntary petition for reorganization under Chapter 11
of the United States Bankruptcy Code on October 28, 1998, and the Company
commenced liquidation shortly thereafter. The Company announced in June 1999
that it has changed its name to CPX Corp. from Cellpro, Incorporated. Also
during June 1999 the Company distributed funds to equity holders and in
September 1999 made final distribution of funds to equity holders having
received the $1.4 million proceeds from a legal settlement.
Except for disclosures that report the Company's historical results, the
statements set forth in this section are forward-looking statements. Actual
results may differ materially from those projected in the forward-looking
statements. Additional information concerning factor that may cause actual
results to differ materially from those in the forward-looking statements are
set forth in the section entitled "Investment Considerations" in the Company's
Annual Report on Form 10-K for the fiscal year ended March 31, 1998," and in the
Company's other filings with the Securities and Exchange Commission. Readers are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date hereof. The Company assumes no obligation to update
any such forward- looking statements or comment on the reasons why actual
results may differ therefrom.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash and cash equivalents totaled approximately $1,263,000 as
of December 31, 1999 and approximately $17,061,000 as of March 31, 1999.
Elimination of virtually all liabilities, loss on operations, and payment to
stockholders combined to account for the decrease in cash. At December 31, 1999,
the Company had no liabilities and consequently the Company's working capital
balance was approximately $1,263,000. While the Company seeks an acquisition or
other business combination, management believes its cash position is sufficient
to cover administrative expenses and current obligations for the foreseeable
future. There can be no assurance that the Company will be able to locate or
purchase an additional business, or that any such business will be profitable.
In order to finance an acquisition, the Company may be required to incur or
assume indebtedness or issue securities.
RESULTS OF OPERATIONS
Income/(loss) from operations for the three and nine months ended December
31, 1999 and 1998 were ($6,000) and $872,000 and ($9,162,000) and ($27,150,000),
respectively. The income during the three and nine months ended December 31,
1999 resulted primarily from no costs of production, interest income and a
favorable legal settlement. Proceeds from the legal settlement were recognized
in income and then distributed to shareholders as return of capital.
Costs and expenses of $873,000 for the nine months ended December 31, 1999
were down significantly from approximately $27,042,000 for the nine months ended
December 31, 1998. The decrease was due to lower administrative demands, no cost
of production, and no research and development expense since there were no
operating activities. Almost all of the $873,000 costs and expenses for the nine
months ended December 31, 1999 were incurred as a result of the restructuring of
the Company and the legal settlement.
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 27 - Financial Data Schedule (filed as part of the
electronic filing only).
(b) Reports on Form 8-K
The Registrant filed the following current report on Form 8-K
during the quarter for which this report is filed.
None
<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.
CPX, CORP. (Registrant)
By /s/Warren G. Lichtenstein
Warren G. Lichtenstein,
President
By /s/Brian Lorber
Brian Lorber,
Secretary/Treasurer
Date: February 14, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000878377
<NAME> CPX Corp.
<MULTIPLIER> 1,000
<CURRENCY> DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-START> APR-1-1999
<PERIOD-END> DEC-31-1999
<EXCHANGE-RATE> 1
<CASH> 1,263
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,263
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 15
<OTHER-SE> 1,263
<TOTAL-LIABILITY-AND-EQUITY> 1,263
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 873
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 872
<INCOME-TAX> 0
<INCOME-CONTINUING> 872
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 872
<EPS-BASIC> .06
<EPS-DILUTED> .06
</TABLE>
