UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
* Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Quarterly period ended September 30, 1998
or
Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 For the transition period to
COMMISSION FILE NUMBER 0-23383
OMNI ENERGY SERVICES CORP.
(Exact name of registrant as specified in its charter)
LOUISIANA 72-1395273
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4500 N.E. EVANGELINE THRUWAY 70520
CARENCRO, LOUISIANA (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (318) 896-6664
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 * No
As of November 13, 1998 there were 15,948,627 shares of the Registrant's
common stock, $0.01 par value per share, outstanding.
<PAGE>
Item 1.
- -------
OMNI ENERGY SERVICES CORP.
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1998 AND DECEMBER 31, 1997
(Thousands of dollars)
<TABLE>
<CAPTION>
ASSETS September 30, December 31,
1998 1997
------------- ------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 2,324 $ 8,723
Accounts receivable, net 18,348 11,958
Parts and supplies inventory 7,382 2,988
Deferred tax asset 212 212
Prepaid expenses and other 2,496 1,753
-------- --------
Total current assets 30,762 25,634
======== ========
PROPERTY AND EQUIPMENT:
Land 359 359
Building and improvements 6,212 3,949
Drilling, field and support equipment 28,693 21,940
Shop equipment 712 408
Office equipment 1,239 582
Aircraft 10,670 9,266
Vehicles 4,045 3,448
Construction in progress 1,608 800
-------- --------
53,538 40,752
Less: accumulated depreciation 5,467 2,909
-------- --------
Total property and equipment 48,071 37,843
-------- --------
OTHER ASSETS:
Goodwill, net 15,115 10,680
Other 937 756
Total other assets 16,052 11,436
--------- ----------
Total assets $ 94,885 $ 74,913
========= ==========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
OMNI ENERGY SERVICES CORP.
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1998 AND DECEMBER 31, 1997
(Thousands of dollars)
<TABLE>
<CAPTION>
<S> <C> <C>
LIABILITIES AND EQUITY September 30, December 31,
1998 1997
------------- ------------
CURRENT LIABILITIES:
Current maturities of long-term debt $ 5,094 $ 5,713
Accounts payable 7,776 5,998
Accrued expenses 551 2,409
Due to joint venture 4,414 ---
----------- -----------
Total current liabilities 17,835 14,120
----------- -----------
LONG-TERM LIABILITIES:
Long-term debt, less current maturities 16,426 14,558
Line of credit 10,000 ---
Deferred taxes 570 1,650
----------- -----------
Total long-term liabilities 26,996 16,208
----------- -----------
MINORITY INTEREST 636 ---
----------- -----------
EQUITY:
Common Stock, $.01 par value, 45,000,000 159 157
shares authorized; 15,948,627 and 15,726,282
issued and outstanding 46,826 44,038
Additional paid-in capital
Retained earnings 2,487 390
Cumulative translation adjustment (54) ---
----------- -----------
Total equity 49,418 44,585
----------- -----------
Total liabilities and equity $ 94,885 $ 74,913
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial
consolidated statements.
<PAGE>
OMNI ENERGY SERVICES CORP.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------- -------------------------------
<S> <C> <C> <C> <C>
1998 1997 1998 1997
-------- ---------- ------- -----------
Operating revenue $ 19,905 $ 16,976 $ 62,483 $ 33,989
Operating expenses 17,016 12,515 45,374 25,017
--------- ---------- -------- ----------
Gross profit 2,889 4,461 17,109 8,972
General and administrative expense $ 4,378 1,816 9,214 3,090
Asset impairment and other charges 3,379 --- 3,379 ---
----------- ---------- -------- ---------
Operating income (loss) (4,868) 2,645 4,516 5,882
Interest expense 474 604 1,211 1,226
Other income (expense) (81) (4) 200 12
----------- ----------- ------- ---------
555 608 1,011 1,214
----------- ----------- ------- ---------
Income (loss) before taxes (5,423) 2,037 3,505 4,668
Income tax expense (benefit) (2,180) --- 1,391 ---
----------- ---------- ------ ---------
Net income (loss) including
minority interest $ (3,243) $ 2,037 $ 2,114 $ 4,668
Minority interest 17 --- 17 ---
------------ ----------- ----- ---------
Net income (loss) $ (3,260) $ 2,037 $ 2,097 $ 4,668
Pro forma tax provision ============ 815 ===== 1,867
----------- ---------
Pro forma net income $ 1,222 2,801
=========== =========
Net income per share:
Basic $ (0.20) $ 0.17 $ 0.13 $ 0.42
Diluted $ (0.20) $ 0.17 $ 0.13 $ 0.42
Pro forma income per share:
Basic $ 0.10 $ 0.25
Diluted(a) $ 0.09 $ 0.21
Weighted average shares outstanding:
Basic 15,946 11,789 15,815 11,073
Diluted 15,946 11,907 16,019 11,126
</TABLE>
(a)Gives effect to the payment of dividends on the outstanding preferred units
of OMNI Geophysical, L.L.C. of approximately $137,500 and $412,500,
respectively, for the three and nine month periods ended September 30, 1997.
The accompanying notes are an integral part of these financial consolidated
statements.
<PAGE>
OMNI ENERGY SERVICES CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
<S> <C> <C>
1998 1997
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 2,097 $ 4,668
Adjustments to reconcile net income to net cash provided by (used
in) operating activities-
Depreciation 3,274 1,509
Amortization 498 130
Loss on fixed asset disposition 103 28
Deferred compensation 108 48
Provision for bad debts 1,061 150
Asset impairment and other charges 3,379 ---
Changes in operating assets and liabilities-
Decrease (increase) in assets-
Receivables-
Trade (4,421) (5,985)
Other 622 (190)
Inventory (3,329) (1,426)
Prepaid expenses 523 (271)
Other (2,949) (705)
Increase (decrease) in liabilities-
Accounts payable (1,665) 5,025
Unearned revenue (638) ---
Due to affiliates and stockholders/members --- (29)
------- ------
Net cash provided by (used in) operating activities (1,337) 2,952
------- ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from disposal of fixed assets 2,984 543
Purchase of fixed assets (16,482) (10,142)
Acquisitions, net of cash received (2,856) (1,948)
-------- -------
Net cash used in investing activities (16,354) (11,547)
-------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt 7,883 23,209
Principal payments on long-term debt (8,236) (8,976)
Net borrowings on line of credit 10,000 5,884
Capital contributions 1,650 1,078
Distributions to members --- (5,321)
Retirement of preferred units --- (5,000)
------- -------
Net cash provided by financing activities 11,297 10,874
------- ------
Effect of exchange rate changes in cash (5) ---
NET INCREASE (DECREASE) IN CASH (6,399) 2,279
CASH, at beginning of period 8,723 39
------- ------
CASH, at end of period $ 2,324 $ 2,318
======= ======
SUPPLEMENTAL CASH FLOW DISCLOSURES:
CASH PAID FOR INTEREST $ 1,258 $ 1,131
======= ======
CASH PAID FOR TAXES $ 2,270 $ ---
======= ======
</TABLE>
The accompanying notes are an integral part of these financial consolidated
statements.
<PAGE>
OMNI ENERGY SERVICES CORP.
NOTES TO FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
These financial statements have been prepared without audit as permitted by the
rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in the financial
statements have been condensed or omitted pursuant to such rules and
regulations. However, the management of OMNI Energy Services Corp. (the
"Company") believes that this information is fairly presented. These unaudited
condensed consolidated financial statements and notes thereto should be read in
conjunction with the financial statements contained in the Company's Annual
Report on Form 10-K for the year ended December 31, 1997 and "Management's
Discussion and Analysis of Financial Condition and Results of Operations."
Certain reclassifications have been made to the prior year's financial
statements in order to conform with the classifications adopted for reporting
in fiscal 1998.
In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments, consisting of only normal,
recurring adjustments, necessary to fairly present the financial results for
the interim periods presented.
IMPAIRMENT OF LONG-LIVED ASSETS
During 1995, the Company adopted the Statement of Financial Accounting
Standards (SFAS) No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed Of." Under the provisions of this
statement, the Company has evaluated its long-lived assets for financial
impairment, and will continue to evaluate them as events or changes in
circumstances indicate that the carrying amount of such assets may not be fully
recoverable.
The Company evaluates the recoverability of long-lived assets not held for sale
by measuring the carrying amount of the assets against the estimated
undiscounted future cash flows associated with them. At the time such
evaluations indicate that the future undiscounted cash flows of certain long-
lived assets are not sufficient to cover the carrying value of such assets, the
assets are adjusted to their fair values. Based on these evaluations, there
have been no adjustments to the carrying value of long-lived assets in previous
periods.
During the third quarter of 1998, the Company evaluated the recoverability of
certain long-lived assets by comparing the assets carrying amounts with their
fair value less cost to sell. In September 1998, the Company recorded a charge
of $3.1 million as a result of its decision to write-down and write-off these
assets (see Note 5).
SEASONALITY AND WEATHER RISKS
Results of operations for interim periods are not necessarily indicative of the
operating results that may be expected for the full fiscal year. The Company's
operations are subject to seasonal variations in weather conditions and
daylight hours. Since the Company's activities take place outdoors, on average,
fewer hours are worked per day and fewer holes are generally drilled or
surveyed per day in winter months than in summer months, due to an increase in
rainy, foggy, and cold conditions and a decrease in daylight hours.
Furthermore, demand for seismic data acquisition activity by oil and gas
companies in the first quarter is generally lower than at other times of the
year. As a result, the Company's revenue and gross profit during the first
quarter of each year are typically low as compared to the other quarters.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and the disclosure
of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenue and expenses during the reporting period.
Actual results could differ from those estimates.
NOTE 2. EARNINGS PER SHARE
In 1997, the Company adopted Statement of Financial Accounting Standards No.
128, "Earnings Per Share," which simplifies the standards required under
existing accounting rules for computing earnings per share and replaces the
presentation of primary earnings per share and fully diluted earnings per share
with basic earnings per share ("basic EPS") and diluted earnings per share
("diluted EPS"), respectively. Basic EPS excludes dilution and is determined
by dividing income available to common stockholders by the weighted average
number of shares of common stock outstanding during the period. Diluted EPS
reflects the potential dilution that could occur if options and other contracts
to issue shares of common stock were exercised or converted into common stock.
Dilutive common equivalent shares for the three and nine month periods ended
September 30, 1998 are 15,946,428 and, 16,018,590, respectively, and for
three and nine month periods ended September 30, 1997 are 11,906,605 and
11,125,981, respectively, all attributable to stock options.
NOTE 3. LONG-TERM DEBT
On January 20, 1998, the Company restructured its credit arrangements with
Hibernia National Bank. Under the restructured facility (the "Credit
Facility"), the Company refinanced an $11.0 million loan, obtained a $10.0
million revolving line of credit to finance working capital requirements, and
obtained a $9.0 million line of credit to finance capital expenditures and
acquisitions. As of September 30, 1998, the Company had approximately $24.6
million outstanding under the Credit Facility. The Credit Facility has a final
maturity of January 20, 2000, and bears interest at LIBOR plus an applicable
margin, ranging from 1.25% to 2.25% (6.91% at September 30, 1998).
NOTE 4. ACQUISITIONS
In April 1998, the Company acquired Eagle Surveys International, Inc., a
seismic survey support company, headquartered in Houston, Texas. The aggregate
purchase price was $1.8 million consisting of $1.1 million in cash and 53,039
shares of common stock.
In April 1998, the Company acquired the assets of Coastal Turbines, Inc., a
helicopter support company, based in Lafayette, Louisiana. The aggregate
purchase price was approximately $1.2 million consisting of $1.1 million in
cash and 4,546 shares of common stock.
In May 1998, the Company acquired Hamilton Drill Tech, Inc., a specialty
seismic drilling support company, headquartered in Canada. The purchase price
was approximately $0.9 million in cash.
In July 1998, OMNI International Energy Services, Ltd. (a wholly-owned
subsidiary) entered into a joint venture with Edwin Waldman Attie of Bolivia.
The newly formed joint venture company, OMNI International Energy Services -
South America, Ltd. provides seismic line cutting and survey support services
in South America. The aggregate investment was approximately $6.5 million,
consisting of approximately $2.6 million in cash, which was paid in the fourth
quarter, $2.0 million in equipment and 155,947 shares of common stock. In
consolidation, the Company owns an 85% interest in the joint venture.
These acquisitions were accounted for using the purchase method of accounting.
The excess of cost over the estimated fair value of the net assets acquired
resulted in goodwill of approximately $4.6 million. The operating results of
each of the acquired companies have been included in the consolidated
statements of income from the date of acquisition. The pro forma effect of the
acquisitions as though they occurred as of the beginning of each period
presented is not material.
In July 1997, the Company acquired substantially all of the assets and
liabilities of American Aviation Incorporated ("American Aviation") for
approximately $7.9 million in cash and stock and assumed debt of approximately
$6.7 million. The following summarized unaudited income statement data reflects
the Company's results of operations as if the American Aviation transaction
had taken place on January 1, 1997:
UNAUDITED PRO FORMA RESULTS
NINE MONTHS ENDED SEPTEMBER 30, 1997
(Thousands of dollars, except per share amount)
Revenue $ 36,335
Net income $ 2,948
Basic income per share $ 0.27
NOTE 5. ASSET IMPAIRMENT AND OTHER CHARGES
In response to recent market conditions and the resultant decline in certain
asset utilization of the Company's equipment, the Company evaluated certain of
its assets for realizability. The related asset impairment charges relate to a
$1.8 million provision for fixed assets, primarily nine drilling units which
have become impaired, due to recent changes in market conditions; a $1.3
million write-off of an asset held for sale which has become impaired due to
recent price declines; and a $0.6 million additional provision for
uncollectible accounts receivable.
In addition, in response to anticipated future market conditions, the Company's
senior management and its Board of Directors approved a plan to reduce furture
operating costs and improve operating efficiencies. The plan involves several
factors including the restructuring of senior management and the relocation of
certain of its operational facilities. Accordingly, the company has recorded
an accrual of severance and lease exit costs of $0.3 million.
The $0.6 million provision for uncollectible accounts receivable is reported in
general and administrative expenses and the remaining charges are reported as
asset impairment and other charges in the accompanying consolidated Statements
of Income.
NOTE 6. RECENT PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which is effective for fiscal years
beginning after June 15, 1999. Management believes the implementation of this
statement will not have a material effect on its results of operations or
financial statement disclosures.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
OMNI ENERGY SERVICES CORP.
Dated: December 17, 1998 /S/ JOHN H. UNTEREKER
------------------------
John H. Untereker
Executive Vice President
<PAGE>
