-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TIL/xnIygAMo52FYGMvm8s6gPYx7wfFp6PObG1KKdorm7fMICnFCvRNVvG8hET4t qid5RjjuJcoCQMWucT0Bfw== /in/edgar/work/0000928385-00-002795/0000928385-00-002795.txt : 20001017 0000928385-00-002795.hdr.sgml : 20001017 ACCESSION NUMBER: 0000928385-00-002795 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000831 FILED AS OF DATE: 20001016 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BCT INTERNATIONAL INC / CENTRAL INDEX KEY: 0000351541 STANDARD INDUSTRIAL CLASSIFICATION: [5110 ] IRS NUMBER: 222358849 STATE OF INCORPORATION: DE FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-10823 FILM NUMBER: 740396 BUSINESS ADDRESS: STREET 1: 3000 NE 30TH PL 5TH FL CITY: FT LAUDERDALE STATE: FL ZIP: 33306 BUSINESS PHONE: 3055631224 MAIL ADDRESS: STREET 1: 3000 NE 30TH PL STREET 2: 5TH FL CITY: FORT LAUDERDALE STATE: FL ZIP: 33306 FORMER COMPANY: FORMER CONFORMED NAME: BUSINESS CARDS TOMORROW INC DATE OF NAME CHANGE: 19881017 FORMER COMPANY: FORMER CONFORMED NAME: GOOD TACO CORP DATE OF NAME CHANGE: 19860318 10-Q 1 0001.txt FORM 10Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter ended August 31, 2000 Commission File No. 0-10823 ------- BCT INTERNATIONAL, INC. ----------------------- (Exact name of Registrant as specified in its Charter) Delaware 22-2358849 -------- ---------- (State of Incorporation) (I.R.S. Employer Identification Number) 3000 NE 30th Place, 5th Floor, Fort Lauderdale, FL 33306 - -------------------------------------------------- ----- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (954) 563-1224 -------------- 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 ____. ------- Number of shares of common stock outstanding as of October 9, 2000: 5,822,208 BCT INTERNATIONAL, INC. INDEX
PAGE NUMBER PART I. FINANCIAL INFORMATION CONDENSED CONSOLIDATED BALANCE SHEETS- August 31, 2000 and February 29, 2000............................... 2 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - for the three months ended August 31, 2000 and August 31, 1999 and the six months ended August 31, 2000 and August 31, 1999............ 3 CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - for the six months ended August 31, 2000..................................................... 4 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - for the six months ended August 31, 2000 and August 31, 1999........ 5 Notes to Condensed Consolidated Financial Statements................ 6-7 Management's Discussion and Analysis of Financial Condition and Results of Operations............................................... 8-9 PART II. OTHER INFORMATION AND SIGNATURES Signatures.......................................................... 10
PART I. FINANCIAL STATEMENTS BCT INTERNATIONAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (000's omitted)
ASSETS August 31, 2000 February 29, 2000 - ------ ----------------- ------------------ Current assets: Cash and cash equivalents $ 1,316 $ 1,906 Accounts and notes receivable, net 3,100 3,293 Inventory, net 2,648 2,359 Assets held for sale, net 167 268 Prepaid expenses and other current assets 184 140 Deferred income taxes 408 482 -------- -------- Total current assets 7,823 8,448 Accounts and notes receivable, net 7,635 7,275 Property and equipment at cost, net 571 529 Deferred income taxes 819 722 Deposits and other assets 24 89 Trademark and other intangible assets, net 245 258 -------- -------- Total assets $ 17,117 $ 17,321 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY - ------------------------------------ Current liabilities: Accounts payable $ 950 $ 1,111 Notes payable 104 104 Accrued liabilities 604 1,349 Deferred revenue 218 218 -------- -------- Total current liabilities 1,876 2,782 Deferred revenue 372 453 Notes payable 271 330 -------- -------- Total liabilities 2,519 3,565 -------- -------- Stockholders' equity: Common stock, $.04 par value, 25,000 shares authorized, 5,822 shares issued 233 233 Paid in capital 12,597 12,597 Retained earnings 3,176 2,334 -------- -------- 16,006 15,164 Less: Treasury stock, at cost, 591 shares ( 1,408) ( 1,408) -------- -------- Total stockholders' equity 14,598 13,756 -------- -------- Total liabilities and stockholders' equity $ 17,117 $ 17,321 ======== ========
See notes to condensed consolidated financial statements. 2 BCT INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended Six Months Ended August 31, August 31, 2000 1999 2000 1999 ------ ------ ------ ------- Revenues: Royalties and franchise fees $1,286 $1,317 $2,757 $ 2,774 Paper and printing sales 3,314 3,591 6,911 7,136 Sales of Franchises 9 15 24 15 Interest and other 147 75 269 139 ------ ------ ------ ------- 4,756 4,998 9,961 10,064 ------ ------ ------ ------- Expenses: Cost of paper and printing sales 2,798 2,923 5,877 5,883 Selling, general and administrative 1,287 1,998 2,553 3,025 Depreciation and amortization 54 45 101 90 ------ ------ ------ ------- 4,139 4,966 8,531 8,998 ------ ------ ------ ------- Income from continued operations before legal settlement and income taxes 617 32 1,430 1,066 Income from legal settlement --- 941 --- 941 ------ ------ ------ ------- Income from continued operations before income taxes 617 973 1,430 2,007 Provision for income taxes 240 340 557 702 ------ ------ ------ ------- Income from continued operations 377 633 873 1,305 Discontinued operations: Loss from company owned franchises operated under a plan of disposition net of tax benefit (31) (10) (31) (38) ------ ------ ------ ------- Net income $ 346 $ 623 $ 842 $ 1,267 ====== ====== ====== ======= Earnings per share: Income from continued operations $ .07 $ .12 $ .17 $ .25 Loss from discontinued operations (.01) --- (.01) (.01) ------ ------ ------ ------- Basic $ .07 $ .12 $ .16 $ .24 ====== ====== ====== ======= Income from continued operations $ .07 $ .11 $ .17 $ .25 Loss from discontinued operations (.01) ---. (.01) (.01) ------ ------ ------ ------- Diluted $ .07 $ .11 $ .16 $ .24 ====== ====== ====== =======
See notes to condensed consolidated financial statements. 3 BCT INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY SIX MONTHS ENDED AUGUST 31, 2000 (UNAUDITED) 000's omitted -------------
Common Stock Less: --------------------- Number of Par Paid In Retained Treasury Shares Value Capital Earnings Stock Total ----------------------------------------------------------------------------------- Balance February 29, 2000 5,822 $ 233 $12,597 $2,334 $ (1,408) $13,756 Net income --- --- --- 842 --- 842 ----- ----- ------- ------ -------- ------- Balance August 31, 2000 5,822 $ 233 $12,597 $3,176 $ (1,408) $14,598 ===== ===== ======= ====== ======== =======
See notes to condensed consolidated financial statements. 4 BCT INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (000's omitted)
Six months ended August 31, 2000 1999 ---------- ----------- Cash flows from operating activities: Net income $ 842 $ 1,267 Plus loss from discontinued operations 31 38 ------ -------- Income from continued operations 873 1,305 Adjustments to reconcile net income to net cash (used) provided by operating activities: Depreciation and amortization 101 90 Provision for doubtful accounts 50 687 Other adjustments 11 8 Changes in operating assets and liabilities: Accounts and notes receivable (217) (1,591) Inventory (304) (231) Assets held for sale 101 658 Prepaid expenses and other assets 21 (656) Deferred income taxes (23) 84 Accounts payable and accrued liabilities (906) 122 Deferred revenue (81) 402 ------ -------- Net cash (used) provided by continued operations (374) 878 Net cash used by discontinued operations (25) (58) ------ -------- Net cash (used) provided by operating activities (399) 820 ------ -------- Cash flows from investing activities: Capital expenditures (132) (50) ------ -------- Net cash (used in) investing activities (132) (50) ------ -------- Cash flows from financing activities: Principal payments on notes payable (59) (55) Exercise of warrants/options for common stock --- 31 Treasury stock purchases --- (130) ------ -------- Net cash (used in) financing activities (59) (154) ------ -------- Net (decrease) increase in cash and cash equivalents (590) 616 Cash and cash equivalents at beginning of period 1,906 1,143 ------ -------- Cash and cash equivalents at end of period $1,316 $ 1,759 ====== ========
See notes to condensed consolidated financial statements. 5 BCT INTERNATIONAL, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (000's omitted) August 31, 2000 --------------- 1. In the opinion of management, the foregoing unaudited condensed consolidated financial statements contain all normal recurring adjustments necessary to present fairly the financial position of the Company as of August 31, 2000. 2. The results for the three and six month periods August 31, 2000 and 1999, are not necessarily indicative of results that may be expected for the fiscal year. 3. For the three and six months ended August 31, 2000 and 1999, basic earnings per common share are calculated by dividing net earnings applicable to common stock by the weighted average number of shares of common stock outstanding. Diluted earnings per common share are calculated by dividing net earnings applicable to common stock by the weighted average number of shares of common stock outstanding and common stock equivalents which consist of stock options and warrants and convertible preferred stock. 4. The Company utilizes an asset and liability approach in accounting for income taxes that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company's financial statements or tax return. In estimating future tax consequences, consideration is given to all expected future events other than enactments of changes in the tax law or rates. 5. On February 28, 1999, the Company's Board of Directors approved a strategy decision to discontinue the operations comprising its Company owned franchises. The Company owned franchises included the 100% owned franchises in Delray Beach, Florida and Merrimack, New Hampshire and the 70% owned franchise in Louisville, Kentucky. The Company sold the Delray Beach, Florida and Louisville, Kentucky franchises in fiscal 2000. Net assets of the Merrimack, New Hampshire franchise of $150 are included in assets held for sale in the August 31, 2000 condensed consolidated balance sheet. Sales from Company owned franchise discontinued operations were $144 and $353 for the three months ended August 31, 2000 and 1999, respectively, and were $301 and $1,154 for the six months ended August 31, 2000 and 1999, respectively. In a transaction effective September 30, 2000, the Company tranferred the assets of the Merrimack, New Hampshire Franchise in exchange for a promissory note in the amount of $150. The Company recorded an additional loss on discontinued operations of $50 for the period ended August 31, 2000 in anticipation of this transaction. 6 BCT INTERNATIONAL, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Continued ... (UNAUDITED) (000's omitted) August 31, 2000 6. The Company has four reporting segments (1) Franchisor Operations, (2) Pelican Paper Products, (3) Company Owned Franchises and (4) Other Operations. The Company evaluates the performance of its segments based on earnings before income taxes. The Company is organized on the basis of business activity units. Information relating to Company owned franchises is included in Note 5. The table below presents information about reported segments for the three and six months ended August 31:
For the Three Months Ended August 31, Pelican Franchisor Paper Other Total ----------- ------- ------ ------- 2000 Revenues $1,295 $3,314 $ 147 $ 4,756 Cost of sales --- 2,798 --- 2,798 Operating expenses 1,023 318 --- 1,341 ------ ------ ------ ------- Income before income taxes $ 272 $ 198 $ 147 $ 617 ====== ====== ====== ======= Depreciation and amortization $ 33 $ 21 $ --- $ 54 ====== ====== ====== ======= Income tax provision $ 105 $ 77 $ 58 $ 240 ====== ====== ====== ======= Capital expenditures $ 8 $ 80 $ --- $ 88 ====== ====== ====== ======= 1999 Revenues $1,332 $3,591 $1,016 $ 5,939 Cost of sales --- 2,923 --- 2,923 Operating expenses 1,799 244 --- 2,043 ------ ------ ------ ------- Income (loss) before income taxes $ (467) $ 424 $1,016 $ 973 ====== ====== ====== ======= Depreciation and amortization $ 34 $ 11 $ --- $ 45 ====== ====== ====== ======= Income tax (benefit) provision $ (163) $ 148 $ 355 $ 340 ====== ====== ====== ======= Capital expenditures $ 40 $ 12 $ --- $ 52 ====== ====== ====== ======= For the Six Months Ended August 31, Pelican Franchisor Paper Other Total ---------- ------- ----- ----- 2000 Revenues $2,781 $6,911 $ 269 $ 9,961 Cost of sales --- 5,877 --- 5,877 Operating expenses 2,199 455 --- 2,654 ------ ------ ------ ------- Income before income taxes $ 582 $ 579 $ 269 $ 1,430 ====== ====== ====== ======= Depreciation and amortization $ 61 $ 40 $ --- $ 101 ====== ====== ====== ======= Income tax provision $ 226 $ 226 $ 105 $ 557 ====== ====== ====== ======= Capital expenditures $ 20 $ 112 $ --- $ 132 ====== ====== ====== ======= 1999 Revenues $2,789 $7,136 $1,080 $11,005 Cost of sales --- 5,883 --- 5,883 Operating expenses 2,724 391 --- 3,115 ------ ------ ------ ------- Income before income taxes $ 65 $ 862 $1,080 $ 2,007 ====== ====== ====== ======= Depreciation and amortization $ 67 $ 23 $ --- $ 90 ====== ====== ====== ======= Income tax provision $ 23 $ 302 $ 377 $ 702 ====== ====== ====== ======= Capital expenditures $ 50 $ --- $ --- $ 50 ====== ====== ====== =======
7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS --------------------------------------------- August 31, 2000 --------------- Results of Operations - --------------------- Total revenues decreased $242,000, or 4.8%, for the three months ended August 31, 2000 as compared to the corresponding period in the prior fiscal year. The decrease in revenue is attributable primarily to decreases in (i) catalog sales at the Company's printing facility ($186,000, or 73%), (ii) royalty revenue ($31,000, or 2.4%),(iii) sales of paper and supplies ($91,000 or 2.7%). These decreases were offset by increases in (iv) interest income ($15,000 or 18%) and (v) monthly fees charged to franchises for orderprinting.com ($50,000). Catalog sales decreased in fiscal 2001 due to lower demand. During the first and second quarter of fiscal 2000, there was a large backlog of orders for catalogs due to the release of a new catalog design in the fourth quarter of fiscal 1999. This backlog was eliminated in October 1999. Royalties decreased primarily due to the Company's practice begun in July 1999 of providing a reserve for royalties whose collection the Company considers to be doubtful. During the three months ended August 31, 2000 additions to this reserve amounted to $36,000 as compared to $24,000 in the corresponding period in the prior fiscal year. Paper and supplies sales decreased primarily due to holiday greeting card stock sales which occurred in August last year, but were delayed until September this year. Interest income increased due to additional promissory notes signed with franchises during the first quarter of fiscal 2001. Fees charged to franchises for the use of orderprinting.com, the Company's internet based ordering system, were increased in January 2000, which resulted in higher revenues this fiscal year. Total revenues decreased $103,000, or 1%, for the six months ended August 31, 2000, as compared to the corresponding period in the prior fiscal year. The decrease in revenue is attributable primarily to decreases in (i) catalog sales at the Company's printing facility ($307,000, or 67%), and (ii) royalty revenue ($17,000, or .6%). These decreases were offset by increases in (iii) sales of paper and supplies ($82,000 or 1.2%), (iv) interest income ($35,000 or 22.9%) and (v) monthly fees charged to franchises for orderprinting.com ($93,000). Cost of paper and printing sales as a percentage of paper and printing sales was 84% and 85%, respectively, for the three and six months ended August 31, 2000, as compared to 81% and 82%, respectively, for the corresponding periods in fiscal 2000. Although the percentage generally remains stable, it does fluctuate due to periodic changes in the revenue mix. In addition, the percentage has been impacted in fiscal 2001 by higher freight charges due to fuel surcharges and by increases in the prices charged by paper mills for certain paper stocks. Selling and administrative expenses represented 27% and 26% of gross revenues for the three and six months ended August 31, 2000 as compared to 40% and 30% for the corresponding periods in fiscal 2000. The selling and administrative expense percentage was higher in the prior fiscal year due to an additional $650,000 provision for bad debt, as well as severance and relocation expenses incurred related to changes at the President and CEO position and two other key management positions. Liquidity and Capital Resources - ------------------------------- Cash resources decreased $590,000 during the six months ended August 31, 2000. The Company used cash to make principal payments on debt of $59,000, to make capital expenditures of $132,000 and to reduce accounts payable and accrued liabilities $906,000. The Company plans to continue to improve its working capital and cash positions during fiscal 2001 by continuing its efforts to (i) increase cash collections; and (ii) increase marketing to new customer channels through orderprinting.com, its proprietary internet based ordering system while containing capital expenditures and maintaining inventory levels. The Company believes current cash reserves and internally generated funds will be sufficient to satisfy the Company's working capital and capital expenditure requirements for the foreseeable future; however, there can be no assurance that external financing will not be needed. The Company has available a $2 million line of credit with a bank. No advances have been made on the line. Certain information contained in this report, particularly information regarding future economic performance and finances, plans and objectives of management, constitutes "forward-looking statements" within the meaning of the federal securities laws. In some cases, information regarding certain important factors that could cause actual results to differ materially from any forward-looking statement appear together with such statement. In addition, the following factors, in addition to other possible factors not listed, could affect the Company's actual results and cause such results to differ materially from those expressed in forward-looking statements. These factors include competition within the wholesale printing industry, which is intense; changes in general economic conditions; technological changes; changes in customer tastes; legal claims; the continued ability of the Company and its franchisees to obtain suitable locations and financing for new Franchises as well as expansion of existing Franchises; governmental initiatives, in particular those relating to franchise regulation and taxation; and risk factors detailed from time to time in the Company's filings with the Securities and Exchange Commission. Quantitative and Qualitative Disclosures About Market Risk - ---------------------------------------------------------- The Company had no outstanding balances subject to market risk during the period covered by this report. The Company has a $2 million line of credit with a bank which bears interest at prime + .25%. No advances have been made on the line. 9 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. BCT INTERNATIONAL, INC. (Registrant) Date: October 13, 2000 Peter T. Gaughn ---------------------------- ------------------------------------ Peter T. Gaughn President & Chief Executive Officer Date: October 13, 2000 Michael R. Hull ---------------------------- ------------------------------------ Michael R. Hull Vice President & Chief Financial Officer 10 EX-27 2 0002.txt FINANCIAL DATA SCHEDULE
5 0000351541 BCT INTERNATIONAL, INC. 1,000 3-MOS FEB-28-2001 MAR-01-2000 AUG-31-2000 1,316 0 13,223 (2,488) 2,648 7,823 1,690 (1,119) 17,117 1,876 375 0 0 233 14,365 17,117 6,911 9,961 5,877 5,877 2,583 50 21 1,430 557 873 (31) 0 0 842 .16 .16
-----END PRIVACY-ENHANCED MESSAGE-----