UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[xx] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended SEPTEMBER 30, 1997
-------------------------------------------------
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: 0-26262
U.S. BRIDGE OF N.Y., INC.
(Exact name of registrant as specified in its charter)
New York 11-3032277
(State or other jurisdiction of
incorporation (I.R.S. Employer Identification No.)
or organization)
53-09 97th Place, Corona, New York 11368
(Address of principal executive offices) (Zip Code)
(718) 699-0100
(Registrant's telephone number, including area code)
N/A (Former name, former address and former fiscal year, if changed since
last report)
Check whether the issuer (1) has 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 [ ] No
[X]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares of each of the issuer's classes of common equity
outstanding as of the latest practicable date: Common stock, par value $.001 per
share: 2,302,515 shares outstanding as of November 10, 1997.
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
<PAGE>
U.S. BRIDGE OF N.Y., INC.
INDEX
<TABLE>
<CAPTION>
PART 1 - FINANCIAL INFORMATION:
ITEM 1 - FINANCIAL STATEMENTS
<S> <C> <C> <C>
Balance Sheets September 30, 1997 (Unaudited)
and June 30, 1997 3
Statements of Operations (Unaudited)
for the Three Months ended September 30, 1997 and 1996 4
Statement of Stockholders' Equity (Unaudited)
for the Three Months ended September 30, 1997 5
Statements of Cash Flows (Unaudited)
for the Three Months ended September 30, 1997 and 1996 6
Notes to Financial Statements 7-10
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 11-13
Part II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS 13
Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS 15
Item 3. DEFAULTS UPON SENIOR SECURITIES 15
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 15
Item 5. OTHER INFORMATION 15
Item 6. EXHIBITS AND REPORTS ON FORM 8-K 15
</TABLE>
<PAGE>
U.S. BRIDGE OF N.Y., INC.
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
(Unaudited)
September June
30, 1997 30, 1997
----------------- ------------
Current assets:
<S> <C> <C>
Cash ................................................................. $ 459,426 $ 554,025
Cash, restricted ..................................................... 216,949 214,001
Contracts and retainage receivable, net .............................. 10,904,882 8,943,147
Costs and estimated earnings in excess of billings
on uncompleted contracts ............................................ 2,426,790 2,225,723
Deferred tax asset ................................................... 236,475 239,750
Other current assets ................................................. 239,144 80,727
----------- -----------
Total current assets ............................................. 14,483,666 12,257,373
Other assets .............................................................. 23,743 21,445
----------- -----------
Total assets .............................................................. $14,507,409 $12,278,818
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable, including cash overdraft
of $115,806 and $119,658, respectively .............................. $ 3,725,982 3,392,317
Accrued expenses ..................................................... 1,441,994 915,016
Payroll taxes payable (Note 5) ....................................... 2,042,336 1,349,225
Due to related parties ............................................... 223,016 321,894
Income taxes payable ................................................. 731,054 507,379
Billings in excess of costs and estimated earnings
on uncompleted contracts ............................................ 113,984 126,455
----------- -----------
Total current liabilities ........................................ 8,278,366 6,612,286
----------- -----------
Commitments and contingencies (Note 3) .................................... -- --
Stockholders' equity:
Preferred stock $.01 par value, authorized 500,000 shares,
issued and outstanding -0- .......................................... -- --
Common stock $.001 par value, authorized 10,000,000 shares,
issued and outstanding 2,302,515 .................................... 504,047 504,047
Additional paid in capital ........................................... 4,459,906 4,459,906
Retained earnings .................................................... 1,265,090 702,579
----------- -----------
Total stockholders' equity ....................................... 6,229,043 5,666,532
----------- -----------
Total liabilities and stockholders' equity ................................ $14,507,409 $12,278,818
=========== ===========
</TABLE>
<PAGE>
U.S. BRIDGE OF N.Y., INC.
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30,
(UNAUDITED)
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Contract revenue ............................ $8,918,385 $3,147,941
Cost of contract revenue .................... 7,541,175 2,254,387
Gross profit ................................ 1,377,210 893,554
Expenses:
General and administrative ............... 590,697 487,432
Income from operations before other income
and provision for income taxes ............. 786,513 406,122
Other income:
Interest income .......................... 2,948 --
Total other income ................... 2,948 --
Income before provision
for income taxes ........................... 789,461 406,122
Provision for income taxes (See Note 2) ..... 226,950 --
Net income .................................. $ 562,511 $ 406,122
Income per common equivalent share:
Income before provision
for income taxes ........................ $ .34 $ .21
Provision for income taxes ............... $ .10 $ --
Net income ............................... $ .24 $ .21
Weighted average number of shares outstanding 2,302,515 1,907,515
</TABLE>
<PAGE>
U.S. BRIDGE OF N.Y., INC.
STATEMENT OF STOCKHOLDERS EQUITY
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
Common
Sock
Additional Total
paid in Retained stockholders
Shares Amount capital earnings equity
<S> <C> <C> <C> <C> <C> <C>
Balances at July 1, 1997 2,302,515 $ 504,047 $ 4,459,906 $ 702,579 $ 5,666,532
Net income for the three months
ended September 30, 1997 - - - 562,511 562,511
Balance at September 30, 1997 2,302,515 $ 504,047 $ 4,459,906 $ 1,265,090 $ 6,229,043
</TABLE>
See accompanying notes to financial statements
<PAGE>
U.S. BRIDGE OF N.Y., INC.
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED SEPTEMBER 30,
(UNAUDITED)
<TABLE>
<CAPTION>
1997 1996
-------------- ----------
Cash flows from operating activities:
<S> <C> <C>
Net income ....................................... $ 562,511 $ 406,122
Adjustments to reconcile net income to net
provided by (cash used) for operating activities:
Deferred income tax expense .................. 3,275 --
Decrease (increase) in:
Contracts and retainage receivable ........ (1,961,735) (718,577)
Costs and estimated earnings in excess of
billings on uncompleted contracts ....... (201,067) (417,533)
Other current assets ...................... (10,715) (55,793)
Increase (decrease) in:
Accounts payable .......................... 333,665 425,649
Accrued expenses .......................... 526,978 (20,000)
Payroll taxes payable ..................... 693,111 65,544
Income taxes payable ...................... 223,675 --
Billings in excess of costs and estimated
earnings on uncompleted contracts ........ (12,471) --
----------- -----------
Net cash provided by (used for) operating activities 157,227 (314,588)
----------- -----------
Cash flows from financing activities:
Repayments to officers ........................... (142,585) --
Repayment to affiliates .......................... (75,386) --
(Repayments to) proceeds from related parties .... (30,907) 340,579
----------- -----------
Net cash (used for) provided by financing activities (248,878) 340,579
----------- -----------
Net (decrease) increase in cash ..................... (91,651) 25,991
Cash, beginning ..................................... 768,026 223,789
----------- -----------
Cash, ending ........................................ $ 676,375 $ 249,780
=========== ===========
Supplemental disclosure of cash flow information:
Interest paid .............................. $ -- $ --
=========== ===========
Taxes paid ................................. $ -- $ --
=========== ===========
</TABLE>
<PAGE>
U.S. BRIDGE OF N.Y., INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
NOTE 1 - ORGANIZATION
============
U.S. Bridge of N.Y., Inc. ("the Company") is a New York corporation which
provides steel erection for building, roadway, and bridge repair projects for
contractors who have been engaged by private and municipal/governmental clients.
The Company was incorporated on September 4, 1990 and is a 53.23% owned
subsidiary of U.S. Bridge Corp. ("Bridge Corp."). The Company's President is
also the majority stockholder (61%) of Bridge Corp. and may be considered the
beneficial owner of the Company.
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with 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 the interim financial statements include all adjustments necessary in
order to make the financial statements not misleading. The results of operations
for the three months ended September 30, 1997 are not necessarily indicative of
the results to be expected for the full year. For further information, refer to
the Company's audited financial statements and footnotes thereto at June 30,
1997, included in the Company's Annual Report Form 10K-SB, filed with the
Securities and Exchange Commission.
NOTE 2 - PROVISION FOR INCOME TAXES
For the three months ended September 30, 1997, the Company recorded an
estimated income tax expense of $226,950. For the three months ended September
30, 1996, no income tax expense was recorded by the Company as a result of its
then net operating tax carryforward which was subsequently utilized.
NOTE 3 - COMMITMENT AND CONTINGENCIES
a) Disclosure of significant estimates - revenue recognition
The Company's construction revenue is recognized on the percentage of
completion basis. Consequently, construction revenue and gross margin for each
reporting period is determined on a contract by contract basis by reference to
estimates by the Company's management and engineers of expected costs to be
incurred to complete each project. These estimates include provisions for known
and anticipated cost overruns if any exist or are expected to occur. These
estimates may be subject to revision in the normal course of business.
b) Lease agreement
The Company leases its administrative offices and storage space pursuant to
a signed lease agreement with RSJJ. Such lease requires monthly payments of
$20,000 and expires on March 31, 1998. Under such lease agreement, the Company
is required to make future minimum lease payments as follows:
Year Ending
June 30,
1998 $ 120,000
===============
NOTE 3 - COMMITMENT AND CONTINGENCIES (Cont'd)
Included in general and administrative expenses is rent expense which
amounted to $60,000 for the three months ended September 30, 1997 and 1996. In
addition, pursuant to an oral agreement, the Company leases a yard for storage
material with an unrelated party. This agreement requires monthly payments of
approximately $3,500. Accordingly, total rent expense for the three months ended
September 30, 1997 and 1996 amounted to $10,500. As of September 30, 1997,
$77,000 of rent remains unpaid and is included in accounts payable. During June
1997, the Company issued 270,000 shares of its common stock to Bridge Corp.,
which in turn, issued 150,000 shares of its common stock to RSJJ to settle
$480,000 of accrued rent owed.
c) Significant customers and vendors
For the three months ended September 30, 1997 and 1996, the Company had two
and three unrelated customers respectively, which accounted for approximately
99% and 99%, respectively, of total revenues. As of September 30, 1997 and 1996
approximately 79% and 53% of contracts and retainage receivables are due from
three and three customers, respectively.
d) Seasonality
The Company operates in an industry which may be seasonal, generally due to
inclement weather occurring during the winter months. Accordingly, the Company
may experience a seasonal pattern in its operating results with lower revenue in
the third quarter of each fiscal year. Quarterly results may also be affected by
the timing of bid solicitations by governmental authorities, the stage of
completion of major projects, and revenue recognition policies.
e) Bonding requirements
The Company is required to provide bid and/or performance bonds in
connection with governmental construction projects. To date, the Company has
been able to sufficiently obtain bonding for its private projects. The Company
is continuously pursuing the attainment of bonding for its governmental
construction projects. In addition, new or proposed legislation in various
jurisdictions may require the posting of substantial additional bonds or require
other financial assurances for particular projects.
f) Mechanic's liens
As of September 30, 1997, three actions to foreclose upon mechanic's liens
filed during the fiscal year were commenced. Such actions seek relief in the
amount of $3,278,775.
g) Legal Proceedings
i) In January 1997, an action was commenced by the Ohio Bridge Corporation
("Ohio") against the Company. Ohio claims that the Company has infringed its
trademark "U.S. Bridge." In August 1997, the Company agreed to effect a name
change to "USA Bridge Construction of N.Y." before the end of 1997.
NOTE 3 - COMMITMENT AND CONTINGENCIES (Cont'd)
ii) The Company is a party to various claims and legal proceedings
incidental to its business. In management's opinion, the outcome of these claims
and proceedings will not have a material adverse effect on the financial
statements of the Company taken as a whole.
h) Payroll taxes
As of September 30, 1997, the Company owes approximately $2,042,336 of
payroll taxes and related penalties and interest. Although as of September 30,
1997, the Company has not entered into any formal repayment agreements with the
respective tax authorities, it has been making monthly payments based on oral
agreements. (See Note 4 for additional information).
NOTE 4 - RELATED PARTY TRANSACTIONS
a) Purchase of material and labor
For the three months ended September 30, 1997 and 1996, the Company paid
$35,000 and $166,000, respectively, to U.S. Bridge Corp. (Maryland) ("US Bridge
MD") for materials and labor necessary to perform steel erection services. US
Bridge MD is a wholly-owned subsidiary of Bridge Corp. In November 1996, US
Bridge MD ceased substantially all of its operations, and the Company began
purchasing material and labor from unrelated third party steel fabricators. At
September 30, 1997, the Company owed US Bridge MD $57,220 principally for
advances in connection with above services and such amounts are non-interest
bearing and due on demand.
b) Rent expense
Included in general and administrative expenses is rent expense paid
pursuant to a signed lease agreement with a company wholly-owned by the
Company's President. Such rent amounted to $60,000 for the three months ended
September 30, 1997 and 1996.
c) Employment agreement
On April 4, 1995, the Company entered into an employment agreement with its
President and Director for a term of approximately three (3) years expiring on
June 30, 1998. The employment agreement provides for an annual salary of
$300,000 with 10% annual escalations. In addition, the President and Director
has been granted options to purchase 25,000 shares of the Company's common
stock, all of which options shall vest through April 1998. The exercise price of
the options shall be equal to the 110% of the stock price in the initial public
offering. The foregoing options are intended to qualify as incentive stock
options.
NOTE 4 - RELATED PARTY TRANSACTIONS (Cont'd)
d) Due from related parties
During the three months ended September 30, 1997 and 1996, the Company paid
certain expenses on behalf of Bridge Corp. These advances are non-interest
bearing and are due on demand. As of September 30, 1997, such advances to Bridge
Corp. amounted to $88,566 and are included in other current assets.
e) Due to related parties
(i) Since June 1995, the President of the Company has advanced the Company
certain funds. The advances are non-interest bearing and are due on demand. At
September 30, 1997, amounts due to the President amounted to $82,783.
(ii) As of September 30, 1997, the Company owes approximately $140,233 for
advances made by affiliates and related parties on its behalf. Such advances are
non-interest bearing and are due on demand.
NOTE 5 - SUBSEQUENT EVENT
In November 1997, the Company paid approximately $755,000 of payroll taxes
towards its September 30, 1997 liability.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
General
The Company recognizes revenue and costs for all contracts under the
percentage of completion method. Cost of contract revenues includes all direct
material and labor costs and those indirect costs related to contract
performance. General and administrative expenses are accounted for as period
costs and are, therefore, not included in the calculation of the estimates to
complete construction contracts in progress. Material project losses are
provided for in their entirety without reference to the percentage of
completion. As contracts can extend over one or more accounting periods,
revisions in costs and earnings estimated during the course of the work are
reflected during the accounting period in which the facts become known. An
amount equal to the costs attributable to unapproved change orders and claims is
included in the total estimated revenue when realization is probable.
The current asset, "costs and estimated earnings in excess of billings on
uncompleted contracts," represents costs and estimated earnings in excess of
amounts billed on respective uncompleted contracts at the end of each period.
The current liability, "billings in excess of costs and estimated earnings
on uncompleted contracts," represents billings which exceed costs and estimated
earnings on respective uncompleted contracts at the end of each period.
The Company's operations are substantially controlled by Mr. Polito since
he owns approximately 61% of the outstanding shares of U.S. Bridge Corp.
("Bridge Corp."), the parent company who owns 53.23% of the common stock of U.S.
Bridge of N.Y., Inc. ("the Company") and may be considered the beneficial owner
of the Company. Mr. Polito is also a 100% shareholder of R.S.J.J. Realty Corp.
("RSJJ"). RSJJ leases the administrative office space to the Company at a cost
of $20,000 per month pursuant to a signed lease agreement expiring on March 31,
1998. Mr. Polito also has ownership interests in Waldorf Steel Fabricators, Inc.
("Waldorf") (which ceased operations on August 1, 1995), Crown Crane, Inc., and
Atlas Gem Leasing, Inc., all of which provided services to the Company for the
three months ended September 30, 1997 and 1996. Lastly, the Company purchased
from U.S. Bridge of Maryland, Inc. ("US Bridge MD"), a wholly-owned subsidiary
of Bridge Corp., certain materials and labor to perform steel erection service.
For the three months ended September 30, 1997 and 1996, purchases by the Company
from US Bridge MD amounted to $35,000 and $166,000, respectively. US Bridge MD
ceased substantially all of its operations in November 1996 and, accordingly,
the Company purchased its steel from unrelated parties.
The Company plans to continue to undertake projects as a subcontractor, but
will focus on obtaining projects as a general contractor in both the public and
private sectors. For those general contracting projects it undertakes, the
Company will be responsible for the performance of the entire contract,
including the work to be performed by subcontractors. Accordingly, the Company
may be subject to substantial liability if a subcontractor fails to perform as
required.
Though the Company does not believe its business is seasonal, its
operations are generally slow in the winter months due to the decrease in worker
productivity because of weather conditions. Accordingly, the Company may
experience a seasonal pattern in its operating results with lower revenue in the
third quarter of each fiscal year. Interim results may also be affected by the
timing of bid solicitation, the stage of completion of major projects, and
revenue recognition policies.
In determining whether to issue a bond, surety companies perform credit
checks and other due diligence disclosure requirements and require the Company
to maintain certain amounts of capital and liquid assets. Each company bases the
amount of bonding it will issue on a formula (devised individually) which takes
into account, inter alia, a company's capital and liquid assets. In order for
the Company to obtain and maintain bonding, it must adhere to the requirements
stipulated in the bonding agreements, which agreements vary with each bonding
company. The bonding costs for each bond are incorporated in the contract price
of each job. These costs are carried as a line item in the requisition and are
paid by the customer. Any monies taken from the working capital for this purpose
will be replaced as monthly requisition payments are received from the customer.
Bonding requirements vary depending upon the nature of the projects to be
performed. The Company anticipates paying a fee to bonding companies of between
1 1/4% to 3 1/2% of the amount of the contracts to be performed. Since these
fees generally are payable at the beginning of a project, the Company must
maintain sufficient working capital to satisfy the fee prior to receiving
revenue from the project.
Three months ended September 30, 1997 as compared to the three months ended
September 30, 1996
Contract revenues for the three months ended September 30, 1997 and 1996
amounted to $8,919,385 and $3,147,941, respectively. This net increase amounting
to $5,770,444 (or approximately 183%) is a direct result of the Company's
backlog as of June 30, 1997 which amounted to approximately $6,088,000. This
backlog amount represents the contracts the Company entered into during the
latter part of its June 30, 1997 fiscal year. During the three months ended
September 30, 1997, the Company obtained no new contracts but obtained
additional change orders to previous contracts amounting to approximately
$5,827,000. As of September 30, 1997, the Company's backlog amounted to
approximately $3,133,000. Backlog represents the amount of revenue the Company
expects to realize from work to be performed on uncompleted contracts in
progress and from contractual agreements for which work has not yet begun.
The Company's gross profit for the three months ended September 30, 1997
and 1996 decreased from 28% to 15%, primarily due to estimated cost adjustments
decreasing previously recognized gross profit.
For the three months ended September 30, 1997 and 1996, the Company paid
$35,000 and $166,000, respectively, to US Bridge MD for materials and labor
necessary to perform steel erection services. During November 1996, US Bridge MD
ceased substantially all of its operations, and the Company began purchasing
material and labor from unrelated third party steel fabricators. At September
30, 1997 the Company owed US Bridge MD $57,220, principally for advances in
connection with above services and such amounts are non-interest bearing and due
on demand.
General and administrative expenses have increased by $103,265 (or 21%) to
$590,697 for the three months ended September 30, 1997, from $487,432 for the
three months ended September 30, 1996. The increase in general administration
costs is mainly attributable to an overall increase in the Company's
administrative salaries associated with the increase in contract revenue and
general corporate overhead.
As of September 30, 1997, the Company's allowance for doubtful accounts
amounts to $2,287,000 against its contract receivable. In management's opinion,
the allowance for doubtful accounts at September 30, 1997 will be sufficient to
absorb any losses that may be sustained from settlements. For the three months
ended September 30, 1997 and 1996, the Company had two and three unrelated
customers respectively, which accounted for approximately 99% of total revenues.
As of September 30, 1997 and 1996 approximately 79% and 53% of contracts and
retainage receivables are due from three customers.
For the three months ended September 30, 1997, the Company recorded an
estimated income tax expense of $226,950. For the three months ended September
30, 1996, no income tax expense was recorded by the Company as a result of its
then net operating tax carryforward which was subsequently utlized.
Liquidity and Capital Resources
At September 30, 1997, the Company's working capital amounted to
$6,205,300. The working capital increase is principally attributable to the
Company's contracts receivable. As of September 30, 1997, the Company's net
contracts receivable amounted to $10,904,882, approximately $2,832,783 (or 26%)
of which has been collected through November 5, 1997.
Net cash provided by operating activities amounted to $157,227 for the
three months ended September 30, 1997. Such cash provision is directly
attributed to the Company's income amounting to $428,786 and increases in
accounts receivable net of increase of its accounts payable, payroll taxes
payable, and accrued expenses. For the three months ended September 30, 1996,
the net cash used for operating activities amounted to $314,588 which were
principally attributable to increases in account receivable, costs and estimated
earnings in excess of billings on uncompleted contracts and accounts payable.
With regards to financing activities, the Company used $248,878 of cash for
the three months ended September 30, 1997. Such cash was used primarily for
repayment of advances from affiliates and officers.
As of September 30, 1997, the Company owes approximately $2,042,336 of
payroll taxes and related penalties and interest. Although as of September 30,
1997, the Company has not entered into any formal repayment agreements with the
respective tax authorities, it has been making monthly payments based on oral
agreements. Subsequent to September 30, 1997, the Company paid approximately
$755,000 towards its payroll tax liabilities as of September 30, 1997.
PART II
Item 1. Legal Proceedings
Three actions to foreclose upon mechanic's liens were commenced by the
Company in the last fiscal year. The first action was commenced in New York
State Supreme Court, Kings County on February 25, 1997. The action names the
Company and Metro Steel Structures, Ltd. as plaintiffs and the Perini
Corporation, Metropolitan Transportation Authority, New York City Transportation
Authority, and Fidelity and Deposit Company of Maryland as defendants. The
Company's claim for relief in this action is $2,199,560. The claim is based upon
filed mechanic's liens and general contract law. The claim is for labor
performed and materials supplied including money owed under the contract and
money due for "extra" work with regard to the rehabilitation of the Viaduct at
the Stillwell Avenue Station of the Coney Island Line in Brooklyn, New York.
This action is still in the discovery phase.
The second action was filed on February 26, 1997 in New York State Supreme
Court, Queens County. It names the Company, Metro Steel Structures, Ltd., and
McKay Enterprises, Inc. as plaintiffs and Perini Corporation, Department of
Transportation of the City of New York, and Fidelity and Deposit Company of
Maryland as defendants. The Company's claim for relief in this action is
$844,932. This claim is based upon filed mechanic's liens and general contract
law. The claim is for labor performed and materials supplied including money
owed under the contract regarding the rehabilitation of the 39th Street Bridge
over the Long Island Rail Road and Amtrak in Queens, New York. This action is
still in the discovery phase.
On February 7,1997, Perini Corporation filed a related action against the
Company and Metro Steel Structures, Ltd. in New York State Supreme Court, Kings
County. Perini's claims against the Company total $1,140,560 and allege
defective work on the Stillwell Avenue project and upon a loss/profit agreement
for both the Stillwell Avenue project and the 39th Street Bridge project. The
Company has counterclaimed for the amounts set forth above in the discussion of
the two actions involving Perini Corporation, and its claims are based upon the
same theories as are set forth above.
The Company filed its third action in the New York Supreme Court, Suffolk
County on or about May 13, 1997. The action names Kiska Construction, the State
of New York, acting through the New York State Comptroller, the New York State
Department of Transportation, and the Seaboard Surety company as defendants. The
Company's claim for relief in this action is $279,346. This claim is based upon
filed mechanic's liens and general contract law. The claim is for labor
performed and materials supplied including money owed under the contract and
money due for "extra" work regarding the rehabilitation of the Robert Moses
Causeway Northbound Bridge over the State Boat Channel, in Suffolk County, New
York. This action is still in the discovery phase.
In August 1997, the Company entered into an agreement settling the January
1997 trademark infringement claim made by The Ohio Bridge Corporation. The
Company has agreed to effect a name change to USA Bridge Construction of N.Y.,
Inc. before the end of the 1997 calendar year.
In April 1995, the Company (then Metro Steel Structures, Ltd.) commenced an
Article 78 proceeding in the Supreme Court of the State of New York, County of
New York, against the Commissioners of the State Insurance Fund and the State
Insurance Fund to annul the cancellation of the Company's workers' compensation
policy and to annul the rates, classifications, and premiums assigned to the
Company. This action claims that defendants audited the Company's books for
purposes of assigning the workers' compensation rates and premiums to be
assessed against the Company and thereafter (i) "arbitrarily and capriciously
and without any foundation in law or in fact" assigned to the Company's
employees improper job classifications which were then used unlawfully as the
basis for improperly assessing the highest premium rates which could be assessed
against the Company; (ii) improperly applied said premiums retroactively; (iii)
billed the Company for premiums which were improper and excessive; and (iv)
canceled the Company's workers' compensation policy upon the Company's failure
to tender payment in the improper and excessive amount demanded by defendants.
The Company is prosecuting this action to the fullest extent possible. On
October 28, 1997, the Company and defendants were scheduled to appear before the
court for a conference in this matter. This matter was adjourned, however, to
December 1997, pending settlement discussions.
In December 1995, the Commissioners of the State Insurance Fund for and on
behalf of the State Insurance Fund commenced suit against Joseph Polito, Ronald
Polito, Steven Polito, the Company, Metro Steel Structures, Ltd. (now known as
the Company), One Carnegie, and others alleging that certain workers'
compensation insurance policies obtained for various insured defendants were
obtained fraudulently and that the defendant corporations failed to pay the
appropriate premiums. The claims against the Company, amounting to approximately
$3 million, are limited to a policy covering the period April 29, 1993 through
December 1994. The Company, Messrs. Polito, and all other defendants are
defending against this action. The action is in the discovery phase, and
settlement negotiations are currently underway.
In December 1995, the Commissioners of the State Insurance Fund for and on
behalf of the State Insurance Fund commenced suit against Joseph Polito, Ronald
Polito, Steven Polito, the Company, Metro Steel Structures, Ltd. (now known as
U.S. Bridge of N.Y., Inc.), One Carnegie, and others alleging that certain
workers' compensation insurance policies obtained for various insured defendants
were obtained fraudulently and that the defendant corporations failed to pay the
appropriate premiums. The claims against the Company, amounting to approximately
$3 million, are limited to a policy covering the period April 29, 1993 through
December 1994. The Company, Messrs. Polito, and all other defendants are
defending against this action. The action is in the discovery phase, and
settlement negotiations are currently underway.
On October 14, 1997, the Company filed a mechanic's lien in the amount of
$13,640,767 against EklecCo. On October 16, 1997, EklecCo (f/k/a Pyramid Company
of Rockland) commenced suit against the Company in New York State Supreme Court,
Rockland County in connection with the West Nyack, Palisades Power Mall project.
EklecCo seeks to vacate the mechanic's lien and seeks specific enforcement of
the contract and declaratory relief, damages for slander of title, and
approximately $500,000,000 in damages from the Company for breach of contract
and intentional interference with contractual relations. The Company intends to
defend against this action.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS: None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES: None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS: None
ITEM 5. OTHER INFORMATION: None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K: None
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, this 14th day of November, 1997.
U.S. BRIDGE OF N.Y., INC.
By: /s/ Joseph M. Polito
Joseph M. Polito, President
