Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

~~Table~~UNITED ofSTATES ~~Contents~~

~~UNITED~~SECURITIES ~~STATES~~AND EXCHANGE COMMISSION

~~SECURITIES~~Washington, ~~AND~~D.C. ~~EXCHANGE~~20549 ~~COMMISSION~~

~~Washington,~~FORM ~~D.C.~~10-Q ~~20549~~

~~Form~~QUARTERLY ~~10-Q~~REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

~~QUARTERLY~~SECURITIES ~~REPORT~~EXCHANGE ~~PURSUANT~~ACT ~~TO SECTION 13 OR 15(d)~~ OF ~~THE~~1934

~~SECURITIES~~For ~~EXCHANGE~~the ~~ACT~~Quarter OFended ~~1934~~May 31, 2003

~~For~~Commission ~~the Quarter~~File ~~ended~~No. ~~November~~0-10823 ~~30, 2002~~

~~Commission~~BCT ~~File~~INTERNATIONAL, NoINC. ~~0-10823~~

~~BCT~~(Exact ~~INTERNATIONAL,~~name ~~INC.~~of Registrant as specified in its Charter)

(Exact name of Registrant as specified in its Charter)

Delaware

22-2358849

(State of Incorporation)

(I.R.S. Employer

Identification Number)

Delaware		22-2358849
3000 NE 30th Place, 5th Floor, Fort Lauderdale, FL		33306
(State of Incorporation)		(I.R.S. Employer Identification Number)
(Address of principal executive offices)		(Zip Code)

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’s ~~telephone~~(1) ~~number,~~has ~~including~~filed ~~area~~all reports required to be filed by Section 13 or 15 (d) of the ~~code:~~ Securities Exchange Act of 1934 during the preceding 12 months (~~954~~or for such shorter period that the Registrant was required to file such reports), ~~563-1224~~and (2) has been subject to such filing requirements for the past 90 days. YES x NO ¨.

~~Indicate~~Number byof ~~check~~shares ~~mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15 (d)~~ of ~~the~~common ~~Securities~~stock ~~Exchange~~outstanding ~~Act~~as of ~~1934~~July ~~during~~14, ~~the~~2003: ~~preceding 12 months (or for such shorter period that the Registrant was required to file such reports)~~5,121,471 ~~and (2) has been subject to such filing requirements for the past 90 days. YES x NO ¨.~~

~~Number~~BCT ofINTERNATIONAL, ~~shares~~INC. ~~of common stock outstanding as of~~

~~January~~ INDEX ~~14, 2003: 5,828,458~~

		PAGE NUMBER

PART I. FINANCIAL INFORMATION

	ITEM 1—Financial Statements

	CONDENSED CONSOLIDATED BALANCE SHEETS—May 31, 2003 and February 28, 2003	2

	CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS—for the three months ended May 31, 2003 and 2002	3

	CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY—for the three months ended May 31, 2003	4

	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS—for the three months ended May 31, 2003 and 2002	5

	Notes to Condensed Consolidated Financial Statements	6-7

	ITEM 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations	8

	ITEM 3—Quantitative and Qualitative Disclosures About Market Risk	8

	ITEM 4—Controls and Procedures	8

PART II. OTHER INFORMATION AND SIGNATURES

	ITEM 6—Exhibits and Reports on Form 8-K	9

	Signatures	9

	Certifications	10-11

	Exhibits	12-13

~~BCT~~PART ~~INTERNATIONAL, INC~~I. FINANCIAL STATEMENTS

~~INDEX~~BCT INTERNATIONAL, INC.

		PAGE NUMBER
PART I.	FINANCIAL INFORMATION
	CONDENSED CONSOLIDATED BALANCE SHEETS–November 30, 2002 and February 28, 2002	2
	CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS–for the three months ended November 30, 2002 and November 30, 2001 and the nine months ended November 30, 2002 and November 30, 2001	3
	CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY–for the nine months ended November 30, 2002	4
	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS–for the nine months ended November 30, 2002 and November 30, 2001	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
	Certifications	11-12
	Exhibits	13-14

CONDENSED CONSOLIDATED BALANCE SHEETS

~~Table~~(000’s ofomitted) ~~Contents~~

PART I. FINANCIAL STATEMENTS

	May 31, 2003			February 28, 2003
	(UNAUDITED)
ASSETS
Current assets:
Cash	$	4,893		$	4,276
Accounts and notes receivable, net		3,089			3,117
Inventory, net		2,369			2,735
Assets held for sale, net		90			85
Prepaid expenses and other current assets		331			314
Deferred income taxes		419			406

Total current assets		11,191			10,933
Accounts and notes receivable, net		4,568			4,721
Property and equipment at cost, net		988			1,034
Deferred income taxes		1,067			919
Deposits and other assets		43			48
Trademark and other intangible assets, net		174			180

Total assets	$	18,031		$	17,835

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	610		$	901
Notes payable		113			113
Accrued liabilities		671			462
Deferred revenue		55			55

Total current liabilities		1,449			1,531
Notes payable, less current maturities		390			410
Deferred revenue		314			335

Total liabilities		2,153			2,276

Minority interest		25			18

Stockholders’ equity:
Common stock, $.04 par value, 25,000 shares authorized, 5,828 shares issued		233			233
Paid in capital		12,605			12,605
Retained earnings		4,587			4,275

		17,425			17,113
Less: Treasury stock, at cost, 707 shares		(1,572	)		(1,572	)

Total stockholders’ equity		15,853			15,541

Total liabilities and stockholders’ equity	$	18,031		$	17,835

~~BCT~~The ~~INTERNATIONAL,~~accompanying ~~INC~~notes are an integral part of the condensed consolidated financial statements.

~~CONDENSED~~2 ~~CONSOLIDATED BALANCE SHEETS~~

~~(UNAUDITED)~~BCT INTERNATIONAL, INC.

~~(000’s~~ CONDENSED ~~omitted)~~CONSOLIDATED STATEMENTS OF OPERATIONS

	November 30, 2002			February 28, 2002
ASSETS
Current assets:
Cash	$	4,805		$	4,819
Accounts and notes receivable, net		2,386			2,889
Inventory, net		2,697			1,887
Assets held for sale, net		173			105
Prepaid expenses and other current assets		326			154
Deferred income taxes		419			419
Total current assets		10,806			10,273
Accounts and notes receivable, net		5,186			5,170
Property and equipment at cost, net		963			435
Deferred income taxes		1,001			970
Deposits and other assets		43			24
Trademark and other intangible assets, net		186			206
	$	18,185		$	17,078
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	789		$	432
Notes payable		294			560
Accrued liabilities		938			871
Deferred revenue		125			125
Total current liabilities		2,146			1,988
Deferred revenue		214			334
Notes payable		534			—
Total liabilities		2,894			2,322
Stockholders’ equity:
Common stock, $.04 par value, 25,000 shares authorized, 5,828 shares issued		233			233
Paid in capital		12,605			12,605
Retained earnings		4,025			3,490
		16,863			16,328
Less: treasury stock, at cost, 707 shares		(1,572	)		(1,572	)
Total stockholders’ equity		15,291			14,756
Total liabilities and stockholders’ equity	$	18,185		$	17,078

(UNAUDITED)

See notes to condensed consolidated financial statements.

	Three Months Ended May 31
	2003		2002
Revenues:
Royalties and franchise fees	$	1,389	$	1,380
Paper and printing sales		3,084		3,242
Sales of Franchises		9		1
Sales Company-owned Franchises		743		—
Interest and other		195		217

		5,420		4,840

Expenses:
Cost of paper and printing sales		2,667		2,763
Cost of sales Company-owned Franchises		166		—
Selling, general and administrative		2,008		1,535
Depreciation and amortization		77		56

		4,918		4,354

Income before provision for income taxes		502		486
Income tax provision		190		184

Net income	$	312	$	302

Net income per common share:
Basic	$	.06	$	.06

Diluted	$	.06	$	.06

2The accompanying notes are an integral part of the condensed consolidated financial statements.

~~Table~~3 ~~of Contents~~

BCT INTERNATIONAL, INC.

CONDENSED CONSOLIDATED ~~STATEMENTS~~STATEMENT OF ~~OPERATIONS~~CHANGES IN STOCKHOLDERS’ EQUITY

~~(UNAUDITED)~~THREE MONTHS ENDED MAY 31, 2003

(~~000’s omitted, except per share amounts~~UNAUDITED)

	Three Months Ended				Nine Months Ended
	November 30,				November 30,
	2002		2001		2002		2001
Revenues:
Royalties and franchise fees	$	1,273	$	1,230	$	3,894	$	3,844
Paper and printing sales		2,935		2,912		9,080		9,297
Company-owned franchise sales		452		—		528		—
Sales of franchises		1		67		3		89
Interest and other		181		181		592		493
		4,842		4,390		14,097		13,723
Expenses:
Cost of paper and printing sales		2,536		2,546		7,822		8,073
Cost of Company-owned franchise sales		100		—		119		—
Selling, general and administrative		1,947		1,305		5,102		4,545
Depreciation and amortization		66		56		177		170
		4,649		3,907		13,220		12,788
Income before provision for
income taxes		193		483		877		935
Provision for income taxes		75		192		342		368
Net income	$	118	$	291	$	535	$	567
Earnings per share:
Basic	$	0.02	$	0.06	$	0.10	$	0.11
Diluted	$	0.02	$	0.06	$	0.10	$	0.11

000’s omitted

See notes to condensed consolidated financial statements.

	Common Stock			Paid In Capital		Retained Earnings		Less: Treasury Stock			Total
	Number of Shares	Par Value		Paid In Capital		Retained Earnings		Less: Treasury Stock			Total
Balance February 28, 2002	5,828	$	233	$	12,605	$	4,275	$	(1,572	)	$	15,541
Net income	—		—		—		312		—			312

Balance May 31, 2002	5,828	$	233	$	12,605	$	4,587	$	(1,572	)	$	15,853

3The accompanying notes are an integral part of the condensed consolidated financial statements.

~~Table~~4 ~~of Contents~~

BCT INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF ~~CHANGES~~CASH INFLOWS ~~STOCKHOLDERS’ EQUITY~~

~~NINE~~(UNAUDITED) ~~MONTHS ENDED NOVEMBER 30, 2002~~

(~~UNAUDITED~~000’s omitted)

(000’s omitted)

	Three months ended May 31
	2003			2002
Cash flows from operating activities:
Net income	$	312		$	302
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		77			56
Provision for doubtful accounts		225			350
Provision for inventory obsolescence		25			25
Changes in operating assets and liabilities:
Accounts and notes receivable		27			438
Inventory		341			(847	)
Assets held for sale		(5	)		15
Prepaid expenses and other assets		(17	)		9
Deferred income taxes		(161	)		(105	)
Accounts payable and accrued liabilities		(82	)		(86	)
Deferred revenue		(21	)		(93	)

Net cash provided by operating activities		721			64

Cash flows from investing activities:
Capital expenditures		(84	)		(15	)

Net cash (used) in investing activities		(84	)		(15	)

Cash flows from financing activities:
Principal payments on notes payable		(20	)		(252	)

Net cash (used) in financing activities		(20	)		(252	)

Net increase (decrease) in cash		617			(203	)
Cash at beginning of period		4,276			4,819

Cash at end of period	$	4,893		$	4,616

	Common Stock							Less:
	Number of Shares	Par Value		Paid In Capital		Retained Earnings		Treasury Stock			Total
Balance February 28, 2002	5,828	$	233	$	12,605	$	3,490	$	(1,572	)	$	14,756
Net income	—		—		—		535		—			535
Balance November 30, 2002	5,828	$	233	$	12,605	$	4,025	$	(1,572	)	$	15,291

The accompanying notes are an integral part of the condensed consolidated financial statements.

~~See~~5 ~~notes to condensed consolidated financial statements.~~

4BCT INTERNATIONAL, INC.

~~Table~~ NOTES ofTO ~~Contents~~CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~BCT~~(UNAUDITED) ~~INTERNATIONAL, INC.~~

~~CONDENSED~~(000’s ~~CONSOLIDATED~~omitted, ~~STATEMENTS~~except OFper ~~CASH~~share ~~FLOWS~~data)

~~(UNAUDITED)~~May 31, 2003

~~(000’s~~1. ~~omitted)~~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 May 31, 2003.

	Nine months ended November 30,
	2002			2001
Cash flows from operating activities:
Net income	$	535		$	567
Adjustments to reconcile net income to net cash provided by operating activities:
Inventory provision		75			75
Depreciation and amortization		177			170
Provision for doubtful accounts		1,050			675
Other adjustments		—			3
Changes in operating assets and liabilities:
Accounts and notes receivable		(660	)		1,212
Inventory		(885	)		(138	)
Assets held for sale		(68	)		—
Prepaid expenses and other assets		(191	)		(77	)
Deferred income taxes		31			116
Accounts payable and accrued liabilities		506			357
Deferred revenue		(120	)		(231	)
Net cash provided by operating activities		450			2,729
Cash flows from investing activities:
Capital expenditures		(124	)		(144	)
Net cash (used in) investing activities		(124	)		(144	)
Cash flows from financing activities:
Principal payments on notes payable		(340	)		(64	)
Exercise of options for common stock		—			8
Net cash (used in) financing activities		(340	)		(56	)
Net (decrease) increase in cash		(14	)		2,529
Cash at beginning of period		4,819			1,799
Cash at end of period	$	4,805		$	4,328

The results for the three month periods ended May 31, 2003 and 2002, are not necessarily indicative of results that may be expected for the fiscal year.

~~Noncash~~3. ~~Activities:~~For the three months ended May 31, 2003 and 2002, 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.

InFor ~~July~~the three months ended May 31, 2003 and 2002, the ~~Company~~number ~~entered~~of ~~into~~shares aused ~~capital~~for ~~lease~~both in the ~~amouunt~~basic and diluted earnings per share calculations were 5,121. All of ~~$231~~the stock options outstanding for ~~the~~both ~~equipment~~periods ~~acquired~~were toexcluded ~~operate~~from the ~~Company~~diluted earnings per share calculation as their impact was anti-~~owned~~dilutive. ~~franchise~~In in2003 ~~San~~and ~~Carlos~~2002, ~~California~~814 options and 885 options, respectively, were excluded.

In4. ~~September~~The ~~2002,~~Company ~~the~~utilizes ~~Company~~an ~~acquired~~asset aand ~~37.15%~~liability ~~interest~~approach in accounting for income taxes that requires the ~~BCT~~recognition ~~Tampa~~of ~~franchise,~~deferred intax ~~addition~~assets toand liabilities for the ~~19%~~expected ~~interest~~future ~~already~~tax ~~held~~consequences byof itevents that have been recognized in the Company’s financial statements or tax return. ~~No additional~~In estimating future tax consequences, consideration ~~was~~is given to all expected future events other than enactments of changes in ~~exchange~~the ~~for~~tax ~~this~~law ~~acquisition.~~or rates.

~~See~~5. ~~notes~~The toCompany ~~condensed~~has ~~consolidated~~four ~~financial~~reporting ~~statements~~segments (1) Franchisor Operations, (2) Pelican Paper Products (3) Other Operations and (4) Company-owned Franchises. The Company evaluates the performance of its segments based on earnings before income taxes.

5The Company is organized on the basis of business activity units. The table below presents information about reported segments for the three months ended May 31:

2003	Franchisor			Pelican Paper		Other		Company Owned Franchises			Total
Revenues	$	1,398		$	3,084	$	195	$	743		$	5,420
Cost of sales		—			2,667		—		166			2,833
Operating expenses		1,267			155		—		663			2,085

Income (loss) before income taxes	$	131		$	262	$	195	$	(86	)	$	502

Depreciation and amortization	$	31		$	22	$	—	$	24		$	77

Income tax provision (benefit)	$	50		$	99	$	74	$	(33	)	$	190

Capital expenditures	$	8		$	2	$	—	$	74		$	84

2002
Revenues	$	1,381		$	3,242	$	217	$	—		$	4,840
Cost of sales		—			2,763		—		—			2,763
Operating expenses		1,436			155		—		—			1,591

Income before income taxes	$	(55	)	$	324	$	217	$	—		$	486

Depreciation and amortization	$	32		$	24	$	—	$	—		$	56

Income tax provision	$	(21	)	$	123	$	82	$	—		$	184

Capital expenditures	$	11		$	4	$	—	$	—		$	15

~~BCT~~6 ~~INTERNATIONAL, INC.~~

~~NOTES~~BCT TOINTERNATIONAL, ~~CONDENSED~~INC. ~~CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(~~000’s omitted,~~UNAUDITED)

~~November~~(000’s 30omitted, ~~2002~~except per share data)

1.May ~~In the opinion of management~~31, ~~the~~2003 ~~foregoing unaudited condensed consolidated financial statements contain all normal recurring adjustments necessary to present fairly the financial position of the Company as of November 30, 2002.~~

26. ~~The~~On ~~results~~March ~~for~~31, 2003, BCT Enterprises of Tampa, Inc., wholly owned by the ~~three~~Company, acquired certain assets of TBDS, Inc., the entity that operates the Company’s 56% Company-owned franchise in Tampa, Florida. Those assets, consisting primarily of receivables, inventory and ~~nine~~equipment, ~~month~~were ~~periods~~acquired ~~ended~~in ~~November~~exchange 30for the assumption of certain of TBDS, ~~2002~~Inc.’s liabilities in the amount of $345 and ~~2001~~the Company’s assignment to TBDS, ~~are~~Inc. ~~not~~of ~~necessarily~~a ~~indicative~~receivable due the Company from the minority shareholder of TBDS, Inc. in the amount of $181. The results ~~that~~of ~~may~~operations beof ~~expected~~BCT Enterprises of Tampa, Inc. since March 31, 2003 (a loss of $4) have been included in the condensed statement of operations for the ~~fiscal~~period ~~year~~ended May 31, 2003. On June 2, 2003 the minority shareholder exercised his right of dissent and sold his remaining 44% interest in TBDS, Inc. to the Company for $1.

37. ~~For~~On May 28, 2003, the ~~three~~Company’s ~~and~~Board ~~nine~~of ~~months~~Directors ~~ended~~approved ~~November~~a 30Definitive Merger Agreement dated May 29, ~~2002~~2003 between the Company and ~~2001,~~Phoenix ~~basic~~Acquisition ~~earnings~~Group ~~per~~of ~~common~~Florida ~~share~~(Phoenix), ~~are~~a ~~calculated~~Company owned by ~~dividing~~the ~~net~~Company’s ~~earnings~~Chairman ~~applicable~~and Chief Executive Officer, whereby Phoenix has agreed to acquire all the shares of the Company’s common stock not currently held by Phoenix or the ~~weighted~~Chairman, ~~average~~in ~~number~~exchange offor ~~shares~~the payment of ~~common~~$2.00 ~~stock~~per ~~outstanding~~share. ~~Diluted~~The ~~earnings~~Company’s ~~per~~preliminary ~~common~~proxy ~~share~~statement ~~are~~relating ~~calculated~~to bythe ~~dividing~~merger ~~net~~has ~~earnings~~been ~~applicable~~submitted to ~~common~~the ~~stock~~Securities byand Exchange Commission (the ~~weighted~~SEC) ~~average~~for ~~number~~its review. Closing of ~~shares~~the merger is conditional upon, among other things, SEC clearance for dissemination of ~~common~~the ~~stock~~definitive ~~outstanding~~proxy statement and ~~common~~approval ~~stock~~by ~~equivalents~~holders ~~which~~of ~~consist~~a majority of ~~stock~~the ~~options~~Company’s shares not owned by the acquisition group.

~~For~~7 the three and nine months ended November 30, 2002 and 2001, the number of shares used for both the basic and diluted earnings per share calculations were 5,121 and 5,123 respectively. All of the stock options outstanding for both periods were excluded from the diluted earnings per share calculation as their impact was anti-dilutive. In 2002, and 2001, 885 options and 1,093 options, respectively, were excluded.

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 MANAGEMENT’sS ~~financial~~DISCUSSION ~~statements~~AND orANALYSIS ~~tax~~OF ~~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.FINANCIAL OnCONDITION ~~September~~AND ~~19,~~RESULTS ~~2002,~~OF ~~the~~OPERATIONS Company exercised its option to acquire an additional 37.15% interest in TBDS, Inc., the BCT franchise in Tampa, Florida. After exercising its option, the Company owns 56.15% of TBDS, Inc. Under the option agreement, as a result of the poor performance of the franchise, no further consideration was given for the additional ownership interest . The Company intends to operate the BCT Tampa franchise as a Company-owned franchise. The results of operations of TBDS, Inc. since September 19, 2002, income of $1, are included in the condensed consolidated statement of operations.

6.Results ~~The~~of ~~Company has four reporting segments (1) Franchisor~~ Operations, (2) Pelican Paper Products, (3) Company-owned franchises and (4) Other Operations (consisting primarily of interest income and internet software fees). The Company evaluates the performance of its segments based on earnings before income taxes.

~~The~~Total revenues increased $580,000 or 12% for the quarter ended May 31, 2003, as compared to the corresponding period in the prior fiscal year. Royalty revenues increased $9,000 or 1% due to an increase in sales by the BCT network of franchises. Sales of Company-owned isFranchises ~~organized~~increased on$743,000 or 100% as there were no Company-owned Franchises in the ~~basis~~first quarter of ~~business~~the ~~activity~~prior ~~units~~fiscal year. ~~The~~These ~~table~~increases ~~below~~were ~~presents~~offset ~~information~~by ~~about~~decreases ~~reported~~in ~~segments~~paper ~~for~~and ~~the~~printing ~~three~~sales of $158,000 or 5% and ~~nine~~interest ~~months~~and ~~ended~~other ~~November~~revenue ~~30:~~of $22,000 or 10% as a result of a decrease in interest income due to the maturing of the notes receivable portfolio.

6Cost of paper and printing sales as a percentage of paper and printing sales was 86% and 85%, respectively, for the quarters ended May 31, 2003 and 2002. Fluctuations in this percentage result primarily from changes in the sales mix.

~~Table~~Selling, general and administrative expenses represented 37% and 32% of ~~Contents~~gross revenues for the quarters ended May 31, 2003 and 2002, respectively. These expenses were higher in fiscal 2003 primarily as a result of expenses related to Company-owned Franchises which amounted to $663,000 for the three month period indeed May 31, 2003. This increase was offset by a decrease in the provision for bad debts of $125,000.

~~BCT~~Liquidity ~~INTERNATIONAL,~~and ~~INC.~~Capital Resources

~~NOTES~~Cash resources TOincreased ~~CONDENSED~~$617,000 ~~CONSOLIDATED~~during ~~FINANCIAL~~the ~~STATEMENTS~~first ~~Continued~~quarter …of fiscal 2004. The Company generated $721,000 from operations. The Company made debt payments totaling $20,000.

~~(UNAUDITED)~~The ~~(000~~Company believes current cash reserves and internally generated funds will be sufficient to satisfy the Company’s ~~omitted)~~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.

~~November~~Certain 30information contained in this report, ~~2002~~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.

	Franchiser			Pelican Paper		Company owned Franchises			Other		Total
For the Three Months Ended November 30,
2002
Revenues	$	1,274		$	2,935	$	452		$	181	$	4,842
Cost of sales		—			2,536		100			—		2,636
Operating expenses		1,404			152		457			—		2,013
Income (loss) before income taxes	$	(130	)	$	247	$	(105	)	$	181	$	193
Depreciation and amortization	$	31		$	22	$	13		$	—	$	66
Income tax (benefit) provision	$	(51	)	$	96	$	(41	)	$	71	$	75
Capital expenditures	$	54		$	—	$	28		$	—	$	82
2001
Revenues	$	1,297		$	2,912	$	—		$	181	$	4,390
Cost of sales		—			2,546		—			—		2,546
Operating expenses		1,215			146		—			—		1,361
Income before income taxes	$	82		$	220	$	—		$	181	$	483
Depreciation and amortization	$	31		$	25	$	—		$	—	$	56
Income tax provision	$	31		$	89	$	—		$	72	$	192
Capital expenditures	$	82		$	11	$	—		$	—	$	93

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

	Franchiser			Pelican Paper		Company owned Franchises			Other		Total
For the Nine Months Ended November 30,
2002
Revenues	$	3,897		$	9,080	$	528		$	592	$	14,097
Cost of sales		—			7,822		119			—		7,941
Operating expenses		4,255			461		563			—		5,279
Income (loss) before income taxes	$	(358	)	$	797	$	(154	)	$	592	$	877
Depreciation and amortization	$	93		$	71	$	13		$	—	$	177
Income tax (benefit) provision	$	(140	)	$	311	$	(60	)	$	231	$	342
Capital expenditures	$	80		$	16	$	286		$	—	$	382
2001
Revenues	$	3,933		$	9,297	$	—		$	493	$	13,723
Cost of sales		—			8,073		—			—		8,073
Operating expenses		4,283			432		—			—		4,715
Income (loss) before income taxes	$	(350	)	$	792	$	—		$	493	$	935
Depreciation and amortization	$	91		$	79	$	—		$	—	$	170
Income tax (benefit) provision	$	(138	)	$	312	$	—		$	194	$	368
Capital expenditures	$	126		$	18	$	—		$	—	$	144

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 LIBOR + 2.35%.

7Item 4. Controls and Procedures.

~~Table~~Evaluation of ~~Contents~~Disclosure Controls and Procedures

~~MANAGEMENT’S~~Our ~~DISCUSSION~~Chief ~~AND~~Executive ~~ANALYSIS~~Officer OFand Chief Financial Officer have evaluated our disclosure controls and procedures as of July 14, 2003 and believe that they are effective.

~~FINANCIAL~~Change ~~CONDITION~~in ~~AND~~Internal ~~RESULTS~~Controls ~~OF OPERATIONS~~

~~November~~Not ~~30,~~applicable. ~~2002~~

~~Results~~8 ~~of Operations~~

~~Total~~Part ~~revenues~~II ~~increased~~OTHER ~~$452,000,~~INFORMATION orAND ~~10%,~~SIGNATURES for the three months ended November 30, 2002 as compared to the corresponding period in the prior fiscal year. The increase in revenue is attributable primarily to increases in (i) Company-owned franchise sales ($452,000); (ii) paper and printing sales ($23,000, or 1%) and (iii) royalty revenue ($43,000, or 3%). These increases were offset by a decrease in revenue from sales of franchises ($66,000 or 99%).

~~The~~Item ~~increase~~6. inExhibits ~~Company-owned franchise sales resulted from the opening of BCT San Carlos, California in July 2002 which succeeded the closing of BCT San Francisco,~~ and ~~the~~Reports ~~Company~~on ~~taking~~Form ~~over majority ownership and operations of BCT Tampa, Florida in September 2002.~~ 8-K

~~In fiscal 2002, the Company recognized deferred revenue from the sale of~~ (a) ~~franchise~~No inexhibits connection with the payoff of the related note receivable. In addition, the Company reached agreement with the franchise in Buenos Aires, Argentina releasing each party of any future contractual obligations, which resulted in the recognition of revenue which was previously deferred due to the uncertainty of related support costs associated with the revenue. The previous two factors resulted in higher revenue related to sales of franchise in the three and nine months ended November 30, 2001.

Total revenues increased $374,000, or 3%, for the nine months ended November 30, 2002, as compared to the corresponding period in the prior fiscal year. The increase in revenue is attributable primarily to (ib) ~~the~~No ~~increase~~reports inon ~~Company-owned~~Form ~~franchise sales of $528,000; (ii) an increase in royalty revenue ($50,000 or 1%) and (iii) an increase in interest and other revenue ($99,000~~8-K ~~or 20%). These increases~~ were ~~offset~~filed by ~~decreases~~the inCompany ~~paper~~during ~~and printing sales ($217,000 or 2%) and revenue from~~ the ~~sales~~period ofended ~~franchises~~May ~~($86~~31,~~000~~ ~~or 97%)~~2003.

Cost of paper and printing sales as a percentage of paper and printing sales was 86.4% and 86.1%, respectively, for the three and nine months ended November 30, 2002, as compared to 87.4% and 86.8%, respectively, for the ~~corresponding~~SIGNATURES ~~periods in fiscal 2002. Although the percentage generally remains stable, it does fluctuate due to periodic changes in the revenue mix.~~

~~Selling~~Pursuant ~~and~~to ~~administrative~~the ~~expenses~~requirements ~~represented 40% and 36%~~ of ~~gross revenues for~~ the Securities ~~three~~Exchange ~~and~~Act ~~nine~~of ~~months ended November 30~~1934, ~~2002 as compared to 30% and 33% for~~ the ~~corresponding~~registrant ~~periods~~has induly ~~fiscal~~caused ~~2002.~~this ~~The~~report ~~year~~ to ~~date~~be ~~fiscal~~signed ~~2003 selling~~on ~~and~~its ~~administrative~~behalf ~~expense percentage was increased~~ by the ~~additional~~undersigned ~~expenses~~thereunto ~~associated~~duly ~~with the Company-owned franchises ($457,000 and $563,000, respectively, for the three and nine months ended November 30, 2002)~~authorized. ~~In addition the Company’s provision for bad debts increased $375,000 for the nine months ended November 30, 2002.~~

Liquidity and Capital Resources

		BCT INTERNATIONAL, INC. (Registrant)

Date:	July 14, 2003	By:	/s/ WILLIAM WILKERSON
			William Wilkerson
			Chief Executive Officer

Cash resources decreased $14,000 during the nine months ended November 30, 2002. The Company made principal payments on debt of $340,000 and capital expenditures of $124,000.



Date:	July 14, 2003	By:	/s/ MICHAEL R. HULL
			Michael R. Hull
			Vice President & Chief Financial Officer

~~The~~9 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. The Company has available a $2 million line of credit with a bank. No advances have been made on the line.

8 Certification of Chief Executive Officer

~~Table~~I, William Wilkerson, Chief Executive Officer of ~~Contents~~BCT International, Inc., certify that:

~~Certain~~(1) ~~information~~I ~~contained~~have inreviewed this quarterly report, ~~particularly~~on ~~information~~Form ~~regarding future economic performance and finances, plans and objectives of management, constitutes “forward~~10-~~looking~~Q ~~statements” within the meaning~~ of ~~the~~BCT ~~federal securities laws. In some cases~~International, 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 intenseInc; 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.

~~Item~~(2) 3.Based ~~Quantitative~~on ~~and~~my ~~Qualitative~~knowledge, ~~Disclosures~~this ~~About~~quarterly ~~Market~~report ~~Risk~~dos not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the periods covered by this quarterly report; and

~~The~~(3) ~~Company had~~Based noon ~~outstanding~~my ~~balances~~knowledge, ~~subject~~the tofinancial ~~market~~statements, ~~risk~~and ~~during~~other ~~the~~financial ~~period~~information ~~covered~~included byin this quarterly report., ~~The~~fairly ~~Company~~present ~~has~~in aall $2material ~~million~~respects ~~line~~the offinancial ~~credit~~condition, ~~with~~results aof ~~bank~~operations ~~which~~and ~~bears~~cash ~~interest~~flows atof ~~LIBOR~~the +Registrant ~~2.35%.~~as Noof, ~~advances~~and ~~have~~for, ~~been~~the ~~made~~periods onpresented ~~the~~in ~~line.~~this quarterly report.

Item 4. Controls and Procedures.

~~Evaluation~~10 ~~of Disclosure Controls and Procedures~~

~~Our~~Certification ~~Chief~~of ~~Executive Officer and~~ Chief Financial Officer ~~have evaluated our disclosure controls and procedures as of January 14, 2003 and believe that they are effective.~~

~~Change~~I, ~~in Internal~~Michael ~~Controls~~R. Hull, Chief Financial Officer of BCT International, Inc., certify that:

~~Not~~(1) ~~applicable.~~I have reviewed this quarterly report on Form 10-Q of BCT International, Inc;

~~Part~~(2) ~~II OTHER~~Based ~~INFORMATION~~on ~~AND~~my ~~SIGNATURES~~knowledge, this quarterly report dos not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the periods covered by this quarterly report; and

~~Item~~(3) 6.Based ~~Exhibits~~on my knowledge, the financial statements, and ~~Reports~~other onfinancial ~~Form~~information ~~8-K~~included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this quarterly report.

(a) Exhibits:

99.1		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.2		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(b) No reports on Form 8-K were filed by the Company during the three month period ended November 30, 2002.

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:	January 14, 2003		William A.Wilkerson
			William A.Wilkerson Chairman, President & Chief Executive Officer

Date:		January 14, 2003						Michael R. Hull
								Michael R. Hull Vice President & Chief Financial Officer

Certification of Chief Executive Officer

I, William Wilkerson, Chief Executive Officer of BCT International, Inc., certify that:

(1) I have reviewed this quarterly report on Form 10-Q of BCT International, Inc;

(2) Based on my knowledge, this quarterly report dos not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the periods covered by this quarterly report; and

(3) Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this quarterly report.

January 14, 2003 Date William A. Wilkerson William A. Wilkerson Chief Executive Officer

Certification of Chief Financial Officer

I, Michael R. Hull, Chief Financial Officer of BCT International, Inc., certify that:

(1) I have reviewed this quarterly report on Form 10-Q of BCT International, Inc;

January 14, 2003 Date Michael R. Hull Michael R. Hull Chief Financial Officer

July 14, 2002

/s/ WILLIAM A. WILKERSON

William A. Wilkerson

Chief Executive Officer

Filing Compare · BCT INTERNATIONAL INC /