-----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, CgB/2olfhlzIm6B2SzlfpRtOo8QD4fHFC4Ib0jels9j39b0U5eE50VAZwKYcTO17 QrwOAUsZhy1V0aQBY8siDg== 0000889812-99-003182.txt : 19991104 0000889812-99-003182.hdr.sgml : 19991104 ACCESSION NUMBER: 0000889812-99-003182 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991103 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN CLAIMS EVALUATION INC CENTRAL INDEX KEY: 0000774517 STANDARD INDUSTRIAL CLASSIFICATION: INSURANCE AGENTS BROKERS & SERVICES [6411] IRS NUMBER: 112601199 STATE OF INCORPORATION: NY FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-14807 FILM NUMBER: 99740222 BUSINESS ADDRESS: STREET 1: 375 N BROADWAY STREET 2: ONE JERICHO PLAZA CITY: JERICHO STATE: NY ZIP: 11753 BUSINESS PHONE: 5169388000 MAIL ADDRESS: STREET 1: ONE JERICHO PLAZA CITY: JERICHO STATE: NY ZIP: 11753 10QSB 1 QUARTERLY REPORT SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB {X} QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 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: 0-14807 AMERICAN CLAIMS EVALUATION, INC. (Exact name of Registrant as specified in its charter) New York 11-2601199 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) One Jericho Plaza, Jericho New York 11753 (Address of principal executive offices) (Zip Code) (516) 938-8000 (Registrant's telephone number, including area code) Not applicable (Former name, former address and former fiscal year, if changed since last report) 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 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 ----- ------ APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock, par value $.01 per share 4,273,500 shares outstanding at October 29, 1999 AMERICAN CLAIMS EVALUATION, INC. INDEX
Page No. -------- PART I - FINANCIAL INFORMATION Item 1. Consolidated Financial Statements Consolidated Balance Sheets as of September 30, 1999 (unaudited) and March 31, 1999 3 Consolidated Statements of Operations for the Three Months and Six Months ended September 30, 1999 and 1998 (unaudited) 4 Consolidated Statements of Cash Flows for the Six Months ended September 30, 1999 and 1998 (unaudited) 5 Notes to Consolidated Financial Statements (unaudited) 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 - 8 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 9 SIGNATURES 10
2 PART I. FINANCIAL INFORMATION Item 1 - Consolidated Financial Statements AMERICAN CLAIMS EVALUATION, INC. AND SUBSIDIARY Consolidated Balance Sheets
Sep.30,1999 Mar.31,1999 ----------- ----------- (Unaudited) Assets Current Assets: Cash and cash equivalents $8,177,219 8,209,421 Accounts receivable, net 81,955 88,991 Prepaid expenses 16,406 19,380 Deferred tax asset 1,527 1,527 --------- --------- Total current assets 8,277,107 8,319,319 Property and equipment, net 42,869 54,756 Excess cost over fair value of net assets acquired, net 452,599 468,811 --------- --------- $8,772,575 8,842,886 ========= ========= Liabilities and Stockholders' Equity Current liabilities: Accounts payable 34,869 50,122 Accrued expenses 69,514 97,801 Income taxes payable 30,275 50,775 --------- --------- Total current liabilities 134,658 198,698 --------- --------- Stockholders' equity: Common stock, $.01 par value; 10,000,000 shares authorized; 4,450,000 shares issued; 4,273,500 shares outstanding 44,500 44,500 Additional paid-in capital 3,515,699 3,515,699 Retained earnings 5,375,935 5,382,206 --------- --------- 8,936,134 8,942,405 Treasury shares, at cost, 176,500 shares (298,217) (298,217) --------- --------- Total stockholders' equity 8,637,917 8,644,188 --------- --------- $8,772,575 8,842,886 ========= =========
See accompanying notes to consolidated financial statements. 3 AMERICAN CLAIMS EVALUATION, INC. AND SUBSIDIARY Consolidated Statements of Operations (Unaudited)
Three months ended Six months ended ------------------------------- ------------------------------- Sep. 30, 1999 Sep. 30, 1998 Sep. 30, 1999 Sep. 30, 1998 ------------- ------------- ------------- ------------- Revenues $282,103 300,074 549,147 601,226 Cost of services 133,019 130,793 252,172 265,873 ------- ------- ------- ------- Gross margin 149,084 169,281 296,975 335,353 Selling, general and administrative expenses 279,607 292,285 546,000 578,649 ------- ------- ------- ------- Operating loss (130,523) (123,004) (249,025) (243,296) Other income: Interest income 115,977 115,176 219,640 230,407 Miscellaneous income 11,284 38,613 25,114 63,926 -------- -------- -------- -------- Earnings (loss) before provision for income taxes (3,262) 30,785 (4,271) 51,037 Provision for income taxes 1,000 5,000 2,000 10,000 --------- --------- --------- -------- Net earnings (loss) $ (4,262) 25,785 (6,271) 41,037 ======== ======== ======== ======== Net earnings (loss) per share: Basic $ .00 .01 .00 .01 =========== =========== =========== =========== Diluted $ .00 .01 .00 .01 =========== =========== =========== =========== Weighted average common shares outstanding: Basic 4,273,500 4,273,500 4,273,500 4,273,500 ========= ========= ========= ========= Diluted 4,273,500 4,406,490 4,273,500 4,386,561 ========= ========= ========= =========
See accompanying notes to consolidated financial statements. 4 AMERICAN CLAIMS EVALUATION, INC. AND SUBSIDIARY Consolidated Statements of Cash Flows (Unaudited)
Six months ended ---------------- Sep.30,1999 Sep.30,1998 ----------- ----------- Cash flows from operating activities: Net earnings (loss) from continuing operations $ (6,271) 41,037 --------- --------- Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 28,099 45,167 Changes in assets and liabilities: Accounts receivable 7,036 16,273 Prepaid expenses 2,974 7,275 Accounts payable (15,253) (15) Accrued expenses (28,287) 24,454 Income taxes payable (20,500) 7,921 --------- ---------- (25,931) 101,075 --------- ---------- Net cash provided by (used in) operating activities of continuing operations (32,202) 142,112 --------- ---------- Net cash flows used in discontinued operations - (86,204) --------- ---------- Net increase (decrease) in cash and cash equivalents (32,202) 55,908 Cash and cash equivalents at beginning of period 8,209,421 8,105,960 --------- --------- Cash and cash equivalents at end of period $8,177,219 8,161,868 ========= ========= Supplemental Disclosure of Cash Flow Information: Income taxes paid $ 22,500 2,079 ========= =========
See accompanying notes to consolidated financial statements. 5 AMERICAN CLAIMS EVALUATION, INC. AND SUBSIDIARY Notes to Consolidated Financial Statements (Unaudited) General The accompanying unaudited financial statements and footnotes have been condensed and therefore do not contain all disclosures required by generally accepted accounting principles. Reference should be made to the Company's Annual Report to Shareholders for the year ended March 31, 1999. In the opinion of management, all adjustments (consisting of normal recurring accruals) have been made to present fairly the financial position, results of operations and cash flows as of and for the periods shown. Earnings (Loss) Per Share The following table sets forth the computation of basic and diluted net earnings (loss) per share for the three and six months ended September 30, 1999 and 1998:
Three months ended Six months ended 9/30/99 9/30/98 9/30/99 9/30/98 Numerator: Net earnings (loss) $ (4,262) 25,785 (6,271) 41,037 ========= ========= ========= ========= Denominator: Denominator for basic earnings (loss) per share - weighted average shares 4,273,500 4,273,500 4,273,500 4,273,500 Effect of dilutive securities: Stock options - 132,990 - 113,061 --------- --------- --------- --------- Denominator for diluted earnings (loss) per share 4,273,500 4,406,490 4,273,500 4,386,561 ========= ========= ========= ========= Basic earnings (loss) per share $ .00 .01 .00 .01 ========= ========= ========= ========= Diluted earnings (loss) per share $ .00 .01 .00 .01 ========= ========= ========= =========
Employee stock options totaling 595,500 and 249,167 for the three months ended September 30 ,1999 and 1998, respectively, were not included in the net earnings (loss) per share calculations because their effect would have been anti-dilutive. 6 Item 2 -Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations - Three Months and Six Months ended September 30, 1999 and 1998 Revenues for the three months ended September 30, 1999 totaled $282,103 as compared with the $300,074 reported for the corresponding period ended September 30, 1998. This represents a decrease of approximately 6.0%. Revenues for the six month period ended September 30, 1999 decreased approximately 8.7% from the comparable period ended September 30, 1998. During the period from March 1999 through May 1999, RPM Rehabilitation & Associates, Inc. ("RPM"), a wholly-owned subsidiary, experienced a substantial decrease in new case referrals received from the Washington State Department of Labor & Industries ("L&I") due to L&I's implementation of a new performance-based vocational referral program ("the referral program"). RPM's performance rating was deemed to be below L&I's required rating to receive new case referrals. Updated ratings were subsequently released by L&I in May 1999 which reported a qualifying rating for RPM. L&I began sending new case referrals shortly thereafter. It cannot be predicted whether or not RPM will continue to receive a favorable rating under the referral program as it currently exists. Cost of services increased to 47.2% of revenues for the quarter ended September 30, 1999, as compared to 43.6% of revenues in the same period last year due to a larger percentage of cases being completed by higher priced rehabilitation consultants. During the six months ended September 30, 1999, the cost of services as a percentage of revenues increased to 45.9% from 44.2% in the six months ended September 30, 1998. Selling, general and administrative expenses decreased $12,678 to $279,607 in the quarter ended September 30, 1999, from $292,285 in the quarter ended September 30, 1998. Selling, general and administrative expenses for the six months ended September 30, 1999 decreased to $546,000 from $578,649 for the six months ended September 30, 1998. Liquidity and Capital Resources At September 30, 1999, the Company had working capital of $8,142,449 as compared to working capital of $8,120,621 at March 31, 1999. The Company believes that it has sufficient cash resources and working capital to meet its present cash requirements. The Company continues its review of strategic alternatives for maximizing shareholder value. Potential acquisitions will be evaluated based on their merits within its remaining line of business, as well as other fields. Year 2000 This issue affects computer systems that have time-sensitive programs that may not properly recognize the Year 2000. Such programs may interpret the Year 2000 to mean some other year or not interpret it at all. If not corrected, those programs could cause date-related transaction failures. 7 Assessment of both Company and client information systems is ongoing. The Company believes that the Year 2000 issue will not pose significant operational problems for its computer systems. Communications continue with all significant clients and vendors to determine the extent to which the Company's systems are vulnerable to such third parties' failure to remediate their own Year 2000 issues. The Company can provide no assurance that such clients and vendors will complete their respective Year 2000 solutions in time for the Company to fully test interfaces with them. Although the Company does not have a formal Year 2000 contingency plan, it will respond to any disruption in service from a Year 2000 compliance problem in its systems and software or in a client's or vendor's system. There is no assurance, however, that the Company will be able to remedy any disruption in service, in particular any disruption from a client's or vendor's failure to be Year 2000 compliant. Based on current plans and efforts to date, management expects that there will be no material adverse effect on operations and the associated costs to be incurred are not considered to be material. There is no guarantee, however, that all problems will be foreseen and corrected. In the event that any such problems are not foreseen and corrected, the Company could be unable to receive new case referrals, invoice clients and collect payments electronically. Forward Looking Statements Except for the historical information contained herein, the matters discussed in this report on Form 10-QSB may contain forward-looking statements that involve risks and uncertainties. The Company's actual results may differ materially from the results discussed in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, general economic and market conditions, the potential loss or termination of existing clients and contracts and the ability of the Company to successfully identify and thereafter consummate one or more acquisitions. 8 PART II. OTHER INFORMATION Item 4 - Submission of Matters to a Vote of Security Holders - ------ The Annual Meeting of Shareholders of American Claims Evaluation, Inc. was held on October 12, 1999. One proposal, subject to shareholder approval, was approved at the Annual Meeting by a vote of shareholders. Under this proposal, management nominees for election to the Board of Directors, Messrs. Gelman, Elkin and Gutmann, were reelected as directors of the Company to serve until their respective successors are duly elected and qualified. Item 6 - Exhibits and Reports on Form 8-K (a) The following exhibits are filed with this Quarterly Report on Form 10-QSB. 27 Financial Data Schedule (filed with electronically filed copy only). (b) None 9 SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereto duly authorized. AMERICAN CLAIMS EVALUATION, INC. Date: October 27, 1999 By: /s/ Gary Gelman ---------------------------------------- Gary Gelman Chairman of the Board, President and Chief Executive Officer (Principal Executive Officer) Date: October 27, 1999 By: /s/ Gary J. Knauer ---------------------------------------- Gary J. Knauer Chief Financial Officer and Treasurer (Principal Financial Officer) 10 EX-27 2 FINANCIAL DATA SCHEDULE
5 The schedule contains summary financial information extracted from the consolidated financial statements and is qualified in its entirety by reference to such financial statements. 1 6-MOS MAR-31-2000 SEP-30-1999 8,177,219 0 82,955 1,000 0 8,277,107 362,580 319,711 8,772,575 134,658 0 44,500 0 0 3,515,699 8,772,575 549,147 549,147 252,172 252,172 546,000 0 0 (4,271) 2,000 (6,271) 0 0 0 (6,271) 0.00 0.00
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