UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
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(Mark one)
XX QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
- -------- ACT OF 1934
For the quarterly period ended March 31, 1998
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934
For the transition period from ______________ to _____________
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Commission File Number: 333-39629
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OMNI DOORS, INC.
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(Exact name of small business issuer as specified in its charter)
Florida 59-2549529
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(State of incorporation) (IRS Employer ID Number)
16910 Dallas Parkway, Suite 100, Dallas TX 75248
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(Address of principal executive offices)
(972) 248-1922
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(Issuer's telephone number)
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Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. YES X NO
State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date: May 12, 1998: 11,400,000
Transitional Small Business Disclosure Format (check one): YES NO X
<PAGE>
OMNI DOORS, INC.
Form 10-QSB for the Quarter ended March 31, 1998
Table of Contents
Page
Part I - Financial Information
Item 1 Financial Statements 3
Item 2 Management's Discussion and Analysis or Plan of Operation 9
Part II - Other Information
Item 1 Legal Proceedings 10
Item 2 Changes in Securities 10
Item 3 Defaults Upon Senior Securities 10
Item 4 Submission of Matters to a Vote of Security Holders 10
Item 5 Other Information 10
Item 6 Exhibits and Reports on Form 8-K 10
2
<PAGE>
Part 1 - Item 1 - Financial Statements
<TABLE>
<CAPTION>
OMNI DOORS, INC.
BALANCE SHEETS
March 31, 1998 and June 30, 1997
ASSETS
(Unaudited) (Audited)
March 31, June 30,
1998 1997
------------- -----------
<S> <C> <C>
Current Assets
Cash on hand and in bank $ 29,837 $ 40,367
Accounts receivable, net of allowance for doubtful
accounts of $25,000 and $25,000, respectively 61,313 69,483
Inventory 84,851 106,440
Prepaid expenses and other 2,201 583
--------- ---------
Total current assets 178,202 216,873
--------- ---------
Property & equipment
Vehicle 19,635 19,635
Machinery and equipment 14,025 13,034
Leasehold improvements 4,193 4,193
--------- ---------
37,853 36,862
Accumulated depreciation (29,070) (25,432)
--------- ---------
Net property and equipment 8,783 11,430
--------- ---------
Other assets 6,811 6,107
--------- ---------
Total Assets $ 193,796 $ 234,410
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable - trade $ 25,987 $ 33,673
Accrued liabilities 7,690 5,558
Current maturities of note payable to affiliate 4,876 4,876
--------- ---------
Total current liabilities 38,553 44,107
--------- ---------
Long-term liabilities
Note payable to affiliate, net of current maturities 813 4,063
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Commitments and Contingencies
Stockholders' Equity
Common stock - no par value. 25,000,000 shares
authorized. 11,400,000 issued and outstanding, respectively 55,767 55,767
Additional paid-in capital 172,463 172,463
Retained earnings (73,800) (41,990)
--------- ---------
Total stockholders' equity 154,430 186,240
--------- ---------
Total Liabilities and Stockholders' Equity $ 193,796 $ 234,410
========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements. The financial information presented herein has been prepared by
management without audit by independent certified public accountants.
3
<PAGE>
<TABLE>
<CAPTION>
OMNI DOORS, INC.
STATEMENTS OF OPERATIONS
Nine and Three months ended March 31, 1998 and 1997
(Unaudited)
Nine months Nine months Three months Three months
ended ended ended ended
March 31, March 31, March 31, March 31,
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C>
Net Revenues $ 377,574 $ 410,563 $ 119,969 $ 139,891
Cost of Sales 313,565 309,768 96,608 108,318
------------ ------------ ------------ ------------
64,189 100,797 23,361 31,573
------------ ------------ ------------ ------------
Operating Expenses
Selling expenses 42,809 41,111 14,681 13,316
General and administrative expenses 49,552 51,654 15,619 15,038
Depreciation 3,638 3,638 1,212 1,212
------------ ------------ ------------ ------------
Total operating expenses 95,999 96,403 31,512 29,566
------------ ------------ ------------ ------------
Income (Loss) from Operations (31,810) 4,394 (8,151) 2,007
Provision for Income Taxes -- -- -- --
------------ ------------ ------------ ------------
Net Income (Loss) $ (31,810) $ 4,394 $ (8,151) $ 2,007
============ ============ ============ ============
Earnings (loss) per weighted-
average share of common
stock outstanding nil nil nil nil
=== === === ===
Weighted-average number of shares
of common stock outstanding 11,400,000 11,400,000 11,400,000 11,400,000
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements. The financial information presented herein has been prepared by
management without audit by independent certified public accountants.
4
<PAGE>
<TABLE>
<CAPTION>
OMNI DOORS, INC.
STATEMENTS OF CASH FLOWS
Nine months ended March 31, 1998 and 1997
(Unaudited)
1998 1997
-------- --------
<S> <C>
Cash Flows from Operating Activities
Net income (loss) $(31,810) $ 4,394
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating activities
Depreciation 3,638 3,638
Provision for doubtful accounts -- 14,500
(Increase) decrease in:
Accounts receivable 8,170 (22,505)
Inventory 21,589 (1,563)
Prepaid expenses and other (2,322) 1,079
Increase (decrease) in:
Accounts payable and other accrued liabilities (5,554) 5,895
-------- --------
Net cash provided by (used in) operating activities (6,289) (5,438)
-------- --------
Cash Flows from Investing Activities
Purchase of property and equipment (991) --
-------- --------
Net cash provided by (used in) investing activities (991) --
-------- --------
Cash Flows from Financing Activities
Principal payments on note to affiliate (3,250) (5,808)
-------- --------
Net cash used in financing activities (3,250) (5,808)
-------- --------
Increase (decrease) in Cash and Cash Equivalents (10,530) (370)
Cash and cash equivalents at beginning of period 40,367 33,836
-------- --------
Cash and cash equivalents at end of period $ 29,837 $ 33,466
======== ========
Supplemental Disclosures of
Interest and Income Taxes Paid
Interest paid during the period $ 394 $ 770
======== ========
Income taxes paid (refunded) $ -- $ --
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements. The financial information presented herein has been prepared by
management without audit by independent certified public accountants.
5
<PAGE>
OMNI DOORS, INC.
Notes to Financial Statements
March 31, 1998
Note 1 - Organization and Description of Business
Omni Doors, Inc. (the Company) was incorporated on July 19, 1985 as a
wholly-owned subsidiary of Millennia, Inc. (Parent) under the laws of the State
of Florida. The Company assembles and distributes industrial metal doors in the
South Florida region of the United States. On April 3, 1998, the US Securities
and Exchange Commission declared a Form SB-2 Registration Statement to be
effective. This action allowed the Parent to distribute approximately 570,000
shares of the Company's common stock to the stockholders of Millennia, Inc. and
established the Company as a separate publicly-owned entity. After the stock
distribution by the Parent, the Parent owns approximately 95.0% of the Company.
During interim periods, the Company follows the accounting policies set forth in
its audited financial statements contained elsewhere within this Registration
Statement filed on Form SB-2 with the Securities and Exchange Commission. The
June 30, 1997 consolidated balance sheet data was derived from audited financial
statements of the Company, but does not include all disclosures required by
generally accepted accounting principles. Users of financial information
provided for interim periods should refer to the annual financial information
and footnotes contained within this document when reviewing the interim
financial results presented herein.
The accompanying interim financial statements are unaudited and, in the opinion
of management, are prepared in accordance with the instructions for Form 10-QSB,
are unaudited and contain all material adjustments, consisting only of normal
recurring adjustments necessary to present fairly the financial condition,
results of operations and cash flows of the Company for the respective interim
periods presented. The current period results of operations are not necessarily
indicative of results which ultimately will be reported for the full fiscal year
ending June 30, 1998.
The costs of the Company's products are subject, from time-to-time, to
inflationary pressures and commodity price fluctuations. In addition, the
Company from time-to-time experiences increases in costs of materials and labor,
as well as other manufacturing and operating expenses. The Company's ability to
pass along such increased costs through increased prices is contingent upon
various economic and competitive pressures. The Company attempts to minimize any
effects of inflation on its operations by monitoring and controlling costs and
effecting price increases where and as possible.
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 disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
The Company is dependent upon its parent company for nominal working capital
support. The parent company intends to continue providing the necessary working
capital support for foreseeable future periods.
Note 2 - Summary of Significant Accounting Policies
1. Cash and Cash Equivalents
For purposes of reporting cash flows, the Company considers all cash on
hand and in banks, certificates of deposit and other highly liquid debt
instruments with a maturity of three months or less at the date of
purchase to be cash and cash equivalents.
6
<PAGE>
OMNI DOORS, INC.
Notes to Financial Statements - Continued
March 31, 1998
Note 2 - Summary of Significant Accounting Policies - Continued
2. Accounts Receivable, Credit Risk and Revenue Recognition
The Company recognizes revenue at the time products are shipped to the
Company's customers.
In the normal course of business, the Company extends unsecured credit to
virtually all of its customers, which are principally located in the South
Florida region of the United States. As the Company's products are used
principally in real property construction, the Company has the right to
file materialman's liens against its customers and/or the respective
construction project where the Company's materials are installed in order
to collateralize trade accounts receivable under the pertinent portions of
the Uniform Commercial Code and under the State of Florida laws. Because
of the credit risk involved, management has provided an allowance for
doubtful accounts which reflects its opinion of amounts which will
eventually become uncollectible. In the event of complete non-performance
by entities owing the Company, the maximum exposure to the Company is the
outstanding accounts receivable balance at the date of non-performance.
3. Inventory
Inventory consists of purchased doors, related door parts and other
supplies and raw materials necessary to assemble commercial metal doors
for resale. These items are accounted for at the lower of cost or market
using the first-in, first-out method.
4. Property and Equipment
Property and equipment is recorded at its historical cost. Depreciation is
provided for in amounts sufficient to relate the asset cost to operations
over the estimated useful life (generally five to seven years) using the
straight line method for financial reporting purposes.
Gains and losses from disposition of property and equipment are recognized
as incurred and are included in operations.
Statement of Financial Accounting Standards No. 121 (SFAS 121),
"Accounting for the Impairment of Long- Lived Assets and for Long-Lived
Assets to be Disposed Of" was issued in March 1996 and adopted by the
Company at its inception. SFAS 121 requires that long-lived assets, such
as property and equipment, are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of such assets
may not be recoverable. This accounting standard had no impact on the
financial statements of the Company for the period ended March 31, 1998.
4. Income Taxes
Income taxes are provided for the tax effects of transactions reported in
the financial statements and consist of taxes currently due, if any, plus
net deferred taxes related primarily to differences between the bases of
assets and liabilities for financial and income tax reporting. Deferred
tax assets and liabilities represent the future tax return consequences of
those differences, which will either be taxable or deductible when the
assets and liabilities are recovered or settled. Deferred tax assets
include recognition of operating losses that are available to offset
future taxable income and tax credits that are available to offset future
income taxes. Valuation allowances are recognized to limit recognition of
deferred tax assets where appropriate. The amount of deferred tax assets
and liabilities as of December 31, 1997 and June 30, 1997, respectively,
are immaterial.
7
<PAGE>
OMNI DOORS, INC.
Notes to Financial Statements - Continued
March 31, 1998
Note 2 - Summary of Significant Accounting Policies - Continued
4. Income Taxes - continued
The Company's operating results are included in the consolidated income
tax return of the Company's Parent. The Company calculates income tax
expense or benefits based on the applicable Federal and state income tax
rates in effect at the end of each operating year as a payable to or
receivable from its Parent company.
5. Net Income (loss) per Share
Net loss per share is based on the weighted average number of common
shares and common stock equivalents outstanding during each respective
period. As of March 31, 1998 and 1997 and June 30, 1997 and 1996,
respectively, and subsequent thereto, no common stock equivalents existed.
Note 3 - Inventory
Inventory consists of the following components as of March 31, 1998 and June
30, 1997, respectively:
March 31, June 30,
1998 1997
-------- --------
Finished goods and purchased product $76,366 $99,777
Raw materials and supplies 8,485 6,663
------- ---------
$84,851 $106,440
======= =======
8
<PAGE>
Part I - Item 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(1) Caution Regarding Forward-Looking Information
This quarterly report contains certain forward-looking statements and
information relating to the Company that are based on the beliefs of the Company
or management as well as assumptions made by and information currently available
to the Company or management. When used in this document, the words
"anticipate," "believe," "estimate," "expect" and "intend" and similar
expressions, as they relate to the Company or its management, are intended to
identify forward-looking statements. Such statements reflect the current view of
the Company regarding future events and are subject to certain risks,
uncertainties and assumptions, including the risks and uncertainties noted.
Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially from
those described herein as anticipated, believed, estimated, expected or
intended. In each instance, forward-looking information should be considered in
light of the accompanying meaningful cautionary statements herein.
(2) Results of Operations
For the nine and three months of Fiscal 1998, respectively, Omni experienced
revenues of approximately $378,000 and $120,000 as compared to approximately
$411,000 and $140,000 for the equivalent periods during Fiscal 1997. This
overall decline is nominal and reflective of the highly competitive construction
market in South Florida which can lead to periodic fluctuations which are caused
by price sensitive consumer demands and overall construction activity. During
Fiscal 1997, Omni had an exterior door product approved for installation in Dade
County, Florida. This approval process was initiated at the local governmental
level in response to damages caused by Hurricane Andrew to the South Florida
region. Management is of the opinion that having approved products will enhance
the overall product line and acceptability of Omni in the South Florida
marketplace.
Overall overhead expenses for marketing and general and administrative expenses
remain relatively constant for the nine month periods ended March 31, 1998 and
1997, respectively, at approximately $96,000 and $96,400. Nominal upward
fluctuations in selling expenses were offset by nominal declines in corporate
overhead expenses to contribute to this consistency in expenditure levels. The
Company continues to market itself and its product line within the South Florida
region to the extent that adequate working capital is available. Further,
management constantly and consistently monitors its overhead expenditures to
minimize the utilization of working capital in this area.
Omni experienced a year-to-date net loss from operations of approximately
$32,000 for the first nine months of Fiscal 1998 as compared to a comparable net
income of approximately $4,400 for the same period during Fiscal 1997. The
primary reason for this loss relates to increases in various selling expenses
for increased visibility of Omni and its product lines in the South Florida
region and lower than anticipated product sales in the third quarter in the
South Florida region as a whole. Various weather and other factors contributed
to an overall slow down of building activity during the third quarter of Fiscal
1998 as compared to Fiscal 1997.
(3) Liquidity and Capital Resources
During the first nine months of Fiscal 1998, the Company experienced net cash
requirements for operating activities of approximately $6,200 as compared to
cash provided by operating activities during the first nine months of Fiscal
1997 of approximately $5,400. The primary sources of funding for the operations
of the Company during Fiscal 1998 is cash derived from operating activities and
the utilization of accumulated resources from previous periods.
(4) Other Comments
The Company's door distribution segment's sales levels historically follow the
commercial construction market and activity levels in South Florida. Therefore,
this segment is subject to economic, climatic and other intangible influences
9
<PAGE>
that affect the segment's trade area. The Company's activities have not been,
and in the near term are not expected to be, materially affected by inflation or
changing prices in general.
Part II - Other Information
Item 1 - Legal Proceedings
None
Item 2 - Changes in Securities
None
Item 3 - Defaults on Senior Securities
None
Item 4 - Submission of Matters to a Vote of Security Holders
None
Item 5 - Other Information
None
Item 6 - Exhibits and Reports on Form 8-K
None
10
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
OMNI DOORS, INC.
May 12 , 1998 /s/ Kevin B. Halter
------ -------------------------------
Kevin B. Halter
Chairman and Principal Accounting Officer
11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
</LEGEND>
<CIK> 0001049011
<NAME> Omni Doors, Inc.
<MULTIPLIER> 1
<CURRENCY> US Dollars
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1998
<PERIOD-END> MAR-31-1998
<EXCHANGE-RATE> 1
<CASH> 29837
<SECURITIES> 0
<RECEIVABLES> 86313
<ALLOWANCES> 25000
<INVENTORY> 84851
<CURRENT-ASSETS> 178202
<PP&E> 37853
<DEPRECIATION> 29070
<TOTAL-ASSETS> 193796
<CURRENT-LIABILITIES> 38553
<BONDS> 0
0
0
<COMMON> 55767
<OTHER-SE> 98663
<TOTAL-LIABILITY-AND-EQUITY> 193796
<SALES> 377574
<TOTAL-REVENUES> 377574
<CGS> 313565
<TOTAL-COSTS> 95999
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 394
<INCOME-PRETAX> (31810)
<INCOME-TAX> 0
<INCOME-CONTINUING> (31810)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (31810)
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
</TABLE>