<PAGE>
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 NOVEMBER 30, 2000 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 0-22907
WHITNEY AMERICAN CORPORATION
(Exact name of registrant as specified in charter)
<TABLE>
<S> <C>
DELAWARE 54-1956957
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number)
8150 Leesburg Pike, Suite 1200, Vienna, Virginia 22182
(Address of Principal Executive Offices) (Zip Code)
</TABLE>
(703) 893-0582
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) filed all reports required to
be filed by Section 13 or15(d) of the Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such report), and (2) has been subject to such filing requirements for the past
90 days.
Yes ____X______ No __________
-
The aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
sold, or the average bid and asked prices of such common equity, was not
determinable.
At November 30, 2000, a total of 4,417,830 shares of common stock were
outstanding.
<PAGE>
Whitney American Corporation and Subsidiary
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
November 30, May 31,
2000 2000
---- ----
<S> <C> <C>
ASSETS (unaudited)
-----------
CURRENT ASSETS
Cash $ 121,398 $ 1,000
Accounts receivable, net of allowance 4,189,155 3,600,834
Prepaid expenses and other assets 98,643 88,336
Deferred tax asset, current 42,416 42,416
----------- -----------
Total Current Assets 4,451,612 3,732,586
PROPERTY AND EQUIPMENT, cost
Leasehold improvements 315,234 270,137
Equipment 3,493,146 3,176,169
Automobiles 420,932 360,309
Furniture and fixtures 108,468 50,803
----------- -----------
4,337,780 3,857,418
Accumulated depreciation (2,733,563) (2,425,397)
----------- -----------
Net Property and Equipment 1,604,217 1,432,021
OTHER ASSETS
Accounts receivable, long term portion 176,341 143,804
Deferred tax asset 44,882 44,882
Deposits 89,096 67,975
Note receivable 5,352 352
----------- -----------
Total Other Assets 315,671 257,013
----------- -----------
Total Assets $ 6,371,500 $ 5,421,620
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Line of credit $ 1,220,673 $ 703,848
Note payable, current maturities 4,446 4,225
Notes payable - equipment, current maturities 97,884 101,600
Capital lease liability, current maturities 361,865 316,584
Accounts payable and accrued expenses 702,777 1,048,361
Accrued payroll and related liabilities 494,789 409,774
Due to related party 175,431 105,745
Income taxes payable, current 192,974 33,336
----------- -----------
Total Current Liabilities 3,250,839 2,723,473
LONG-TERM DEBT
Notes payable, net of current maturities 12,272 14,747
Notes payable - equipment, net of current maturities 56,562 70,553
Capital lease liability, net of current maturities 550,970 541,319
Deferred income taxes payable 24,647 24,647
----------- -----------
Total Long-term Liabilities 644,451 651,266
----------- -----------
Total Liabilities 3,895,290 3,374,739
STOCKHOLDERS' EQUITY
Preferred stock, $.00001 par value, 5,000,000 shares
authorized, none issued and outstanding -- --
Common Stock, at November 30, 2000, $.00001 par
value, 50,000,000 shares authorized, 4,417,830
and 4,266,020 shares issued and outstanding 44 42
Additional paid-in capital 1,683,250 1,658,684
Accumulated earnings 792,916 388,155
----------- -----------
Total Stockholders' Equity 2,476,210 2,046,881
----------- -----------
Total Liabilities and Stockholders' Equity $ 6,371,500 $ 5,421,620
=========== ===========
</TABLE>
See notes to financial statements
<PAGE>
Whitney American Corporation and Subsidiary
CONSOLIDATED STATEMENTS OF OPERATION
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
November 30, November 30, November 30, November 30,
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUE FROM SERVICES $ 3,334,077 $ 3,190,204 $ 7,402,600 $ 6,502,096
COST OF SERVICES 2,317,083 2,392,883 4,820,948 4,611,741
----------- ----------- ----------- -----------
GROSS PROFIT 1,016,994 797,321 2,581,652 1,890,355
----------- ----------- ----------- -----------
OPERATING EXPENSES
Overhead 488,381 406,164 994,420 776,898
General and administrative 342,029 289,515 717,779 620,706
Bad debt expense 18,571 15,474 38,421 34,879
----------- ----------- ----------- -----------
Total Operating Expenses 848,981 711,153 1,750,620 1,432,483
----------- ----------- ----------- -----------
INCOME FROM OPERATIONS 168,013 86,168 831,032 457,872
OTHER INCOME
Other 30 3,785 30 31,612
OTHER EXPENSES
Interest (57,734) (33,711) (118,294) (65,285)
----------- ----------- ----------- -----------
INCOME BEFORE INCOME TAXES 110,309 56,242 712,768 424,199
INCOME TAXES 50,449 33,285 308,007 33,285
----------- ----------- ----------- -----------
NET INCOME $ 59,860 $ 22,957 $ 404,761 $ 390,914
=========== =========== =========== ===========
Basic net income per common share $ 0.01 $ 0.01 $ 0.09 $ 0.09
=========== =========== =========== ===========
Weighted average common share outstanding 4,386,008 4,217,020 4,386,008 4,217,020
=========== =========== =========== ===========
Diluted net income per common share $ 0.01 $ 0.00 $ 0.08 $ 0.08
=========== =========== =========== ===========
Weighted average common share outstanding 4,786,008 4,665,020 4,786,008 4,665,020
=========== =========== =========== ===========
</TABLE>
See notes to financial statements.
<PAGE>
WHITNEY AMERICAN CORPORATION
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOW
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
November 30, November 30, November 30, November 30,
CASH FLOWS FROM OPERATIONS: 2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Income $ 59,860 $ 22,957 $ 404,761 $ 390,914
Adjustments to reconcile net income to net cash:
Depreciation and amortization 147,215 120,847 308,166 245,573
Gain on sale of assets -- (1,849) -- (31,554)
Allowance for doubtful accounts 18,419 15,474 38,501 34,879
Changes in operating assets and liabilities net of effects
from purchase of Kiber Environmental Services, Inc.:
(Increase) decrease in accounts receivable 570,085 145,412 (318,084) (157,679)
(Increase) decrease in prepaid expenses and other assets 19,604 (3,901) (2,506) (2,455)
Increase in deposits (2,760) (1,242) (11,062) (3,971)
Decrease in accounts payable and accrued expenses (470,720) (102,014) (368,638) (542,021)
Increase (decrease) in accrued payroll and related liabilities 95,152 (20,296) 62,425 (104,206)
Increase (decrease) in income taxes payable (97,921) -- 159,638 --
--------- --------- --------- ---------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 338,934 175,388 273,201 (170,520)
========= ========= ========= =========
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (84,021) (103,619) (143,099) (311,003)
Purchase of Kiber Environmental Services -- -- (300,000) --
Payment received on note receivable 5,000 5,000
Proceeds received from sale of fixed assets -- 2,879 -- 38,514
--------- --------- --------- ---------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (79,021) (100,740) (438,099) (272,489)
========= ========= ========= =========
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) on line of credit (16,091) (1,650) 516,825 548,350
Payment of note payable (1,148) (1,033) (2,259) (2,048)
Payment of notes payable - equipment (36,942) (26,801) (67,320) (37,926)
Proceeds of note payable - equipment -- -- -- 19,314
Principal payments under capital lease obligations (85,334) (45,164) (161,950) (84,681)
--------- --------- --------- ---------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (139,515) (74,648) 285,296 443,009
========= ========= ========= =========
NET INCREASE IN CASH 120,398 -- 120,398 --
CASH, BEGINNING 1,000 1,000 1,000 1,000
--------- --------- --------- ---------
CASH, END $ 121,398 $ 1,000 $ 121,398 $ 1,000
========= ========= ========= =========
Supplemental disclosure of cash flows information:
Cash paid during the year for interest $ 57,734 $ 33,711 $ 118,294 $ 65,285
========= ========= ========= =========
Liabilities for equipment under capital leases $ 81,831 $ 73,723 $ 216,880 $ 196,266
========= ========= ========= =========
Income taxes paid $ 148,369 $ -- $ 148,369 $ --
========= ========= ========= =========
Supplemental disclosure of noncash transactions:
Acquisition of Kiber Environmental Services, Inc.:
Fair value of assets acquired -- -- 488,984 --
Liabilities assumed -- -- 164,416 --
Common stock issued -- -- 24,568 --
--------- --------- --------- ---------
$ -- $ -- $ 677,968 $ --
========= ========= ========= =========
</TABLE>
See notes to financial statements.
<PAGE>
Whitney American Corporation and Subsidiary
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Common stock Additional Retained
------------------------
Shares Amount paid-in capital earnings Total
---------- ---------- --------------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Balance, May 31, 1999 4,266,020 $ 42 $1,658,684 $ 160,424 $1,819,150
Stock cancellation (49,000) -- -- -- --
Net income -- -- -- 390,914 390,914
---------- ---------- ---------- ---------- ----------
Balance, November 30, 1999 (unaudited) 4,217,020 $ 42 $1,658,684 $ 551,338 $2,210,064
========== ========== ========== ========== ==========
Balance, May 31, 2000 4,217,020 $ 42 $1,658,684 $ 388,155 $2,046,881
Stock issuance - Kiber purchase 200,810 2 24,566 -- 24,568
Net income -- -- -- 404,761 404,761
---------- ---------- ---------- ---------- ----------
Balance, November 30, 2000 (unaudited) 4,417,830 $ 44 $1,683,250 $ 792,916 $2,476,210
========== ========== ========== ========== ==========
</TABLE>
<PAGE>
WHITNEY AMERICAN CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 2000
(UNAUDITED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
Basis of Presentation and Consolidation
---------------------------------------
The accompanying unaudited condensed consolidated financial statements of
Whitney American Corporation (the "Company") and its wholly owned
subsidiary, Kemron Environmental Services, Inc. ("Kemron") have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q. In
the opinion of management, all adjustments necessary for a fair
presentation of such financial statements have been included. Such
adjustments consisted only of normal recurring items. The company acquired
Kemron during fiscal year 1998 (see NOTE 2) and began presenting results on
a consolidated basis. All significant intercompany balances and
transactions have been eliminated in consolidation. Operating results for
the six months ended November 30, 2000 are not necessarily indicative of
the results that may be expected for the fiscal year ending May 31, 2001 or
for any other future period. Additional information is contained in the
Annual Report on Form 10-KSB for the year ended May 31, 2000, which should
be read in conjunction with this quarterly report.
Use of Estimates
----------------
Management uses estimates and assumptions in preparing financial statements
in accordance with generally accepted accounting principles. Those
estimates and assumptions affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities, and the
reported revenues and expenses. Actual results could vary from the
estimates that were assumed in preparing the financial statements.
Federal Income Taxes
--------------------
Federal income tax has been provided for the six months ended November 30,
2000 based on estimates that include the timing difference attributed to
the provision for bad debt and difference in depreciation of property and
equipment for book versus tax methods.
Property and Equipment
----------------------
Property and equipment is stated at cost. Depreciation is computed using
the straight-line method based on the estimated useful lives of the asset.
Amortization of leasehold improvements is computed on the term of the lease
or its useful life, whichever is less.
Revenue Recognition
-------------------
The Company recognizes revenue generally at the time services are
performed. On fixed price contracts, revenue is recognized on the basis of
the estimated percentage of completion of services rendered. On cost
reimbursement contracts, revenue is recognized as costs are incurred and
includes applicable fees earned essentially in the proportion that costs
incurred bear to total estimated final costs. Materials and subcontract
costs reimbursed by client are included in gross revenue. Anticipated
losses are recognized in the period in which the losses are reasonably
determinable. Substantially all unbilled receivables are expected to be
collected within the next 12 months and retention balances to be collected
at the close of the respective project.
A portion of contracts with the United States Government and State
Agencies, are subject to audit and adjustment. Revenue has been recorded
in amounts expected to be realized on final
<PAGE>
settlement. Included in accounts receivable are revenues from claims where
recovery is probable in the opinion of management.
NOTE 2 - MERGER AND SUBSEQUENT UNWINDING AGREEMENT
On March 10, 1998, Kemron Environmental Services, Inc. ("Kemron") merged
with and into Whitney American Corporation (the "Company"). Pursuant to
the merger agreement, each outstanding share of Kemron common stock was
converted into shares of the outstanding common stock of the Company. Upon
consummation of the Merger, the stockholders of Kemron became the owners in
the aggregate of approximately 86% of the outstanding common stock of the
Company; and the directors and officers of Kemron became directors and
officers of the Company. Prior to the Merger, the Company had no operating
activities.
The Merger was structured as a tax-free reorganization and was accounted
for using the pooling-of-interest method.
On November 29, 1999, the Company entered into an unwinding and stock
exchange agreement with Kemron, subject to the approval of the
shareholders, that called for the shareholders to surrender the Company
shares acquired in the March 10, 1998 merger agreement. These shares would
then be cancelled in exchange for the returned shares of Kemron stock to
the rescinding shareholders. Ultimately, the Company and Kemron would
substantively return to the ownership position that existed prior to the
original merger agreement. The approval for the unwinding and stock
exchange agreement was scheduled for vote at a special stockholder meeting
on January 20, 2000 in order to finalize the agreement. The stockholder
vote was postponed indefinitely until an acceptable resolution could be
reached on the tax implications identified to the former shareholders of
Kemron. Subsequent to the November 29, 1999 unwinding agreement, it was
determined through tax research that the treatment of this stock exchange
would differ from the original structure of the March 10, 1998 agreement
which was a tax-free exchange. A significant tax liability is believed to
result with the execution of the unwinding agreement such that the
substance of the agreement would be materially altered. The agreement
continues to be evaluated and it is uncertain as to the probability of
achieving a mutually acceptable agreeement.
NOTE 3 - SEGMENT INFORMATION
The Company's reportable segments are strategic business units that offer
different services. The Company has two reportable segments: analytical and
consulting services. Analytical services include lab testing services for
varying analytical programs such as NPDES, RCRA, CERCLA and OSHA. Consulting
services provide investigations and assessment services at non-regulated
contaminated sites and at sites covered by RCRA and CERCLA regulations, which
investigations may include preliminary assessments, site investigations,
groundwater assessments, remedial investigations, feasibility studies, and
remedial action plans. The accounting policies of the segments are the same as
those described in the summary of significant accounting policies (note 1).
Sales, operating income and identifiable assets by reportable segment for the
six months ended November 30, 2000 and November 30, 1999 are as follows:
(Dollars in thousands)
--------------------------
2000 1999
----------- ----------
Sales to unaffiliated customers:
Analytical services $ 4,431 $ 3,842
Consulting services 2,612 2,660
Other 360 N/A
---------- ----------
Total $ 7,403 $ 6,502
========== ==========
<PAGE>
Operating income:
Analytical services $ 773 $ 349
Consulting services 56 109
Other 2 N/A
---------- ----------
Total $ 831 $ 458
========== ==========
Identifiable Assets:
Analytical services $ 3,413 $ 2,512
Consulting services 1,422 1,543
Other 370 N/A
---------- ----------
Total $ 5,205 $ 4,055
========== ==========
NOTE 4 - ACQUISITION OF KIBER ENVIRONMENTAL SERVICES, INC.
On June 29, 2000, The Company entered into a merger agreement ("Agreement") with
Kiber Environmental Services, Inc. ("Kiber"), effective June 1, 2000. The
Agreement provided for a tax-free merger of Kiber with and into Kemron in a
reorganization described in section 368(a) and 368(a)(i)(D) of the Internal
Revenue Code of 1986, as amended (the "Code"). The shareholders of Kiber receive
a total of 200,810 shares of capital stock of Whitney and $450,000 in exchange
for all of the capital stock of Kiber. The $450,000, paid at closing, consisted
of $300,000 in cash and a promissory note for $150,000, payable in twelve months
and earning interest at ten percent (10%). The promissory note is personally
guaranteed by the CEO. Additionally, the Company's purchase price of Kiber may
be reduced, if certain Kiber receivables are not realized within a 12 month
period following the date of the merger.
The merger was accounted for under the purchase method and the consolidated
financial statements include the earnings of Kiber for the full six months of
the reporting period ending November 30, 2000. The assets and liabilities of
Kiber have been recorded in the consolidated financial statements at their fair
market value.
Based on the fair market value of assets and liabilities of Kiber and the market
value of Kemron's shares issued as of the effective date June 1, 2000, no
goodwill has been reflected on the balance sheet as of November 30, 2000. The
cost of acquisition was equal to that of the fair market value of Kiber's assets
and liabilities.
A provision was established for a specific customer account that is deemed
unlikely to be collected as of the date of acquisition. Under the terms of the
Agreement, any portion of this customer account that is not collected will
become a reduction of the note payable due to the Kiber shareholders at the end
of twelve months. The balance of this account as of November 30, 2000 equals
$80,309 and the entire receivable has been adjusted for as a reduction to the
balance due to related party.
The following unaudited pro forma financial information for the period June 1,
1999 through November 30, 1999, assumes the acquisition had occurred on June 1,
1999:
Net Sales $7,190,261
==========
Net Income 448,051
==========
Net Income Per Share .11
==========
<PAGE>
Item 2. Management's Discussion and Analysis
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
FINANCIAL CONDITION
As of November 30, 2000, the Company's working capital balance increased from
$1,009,113 at May 31, 2000 to $1,200,773. This increase was the result of
profits generated during the six month period. The current liabilities increased
by $527,366 while the current accounts receivables increased by $588,321. The
increase in accounts receivable is due to a high volume of billing activity that
took place during the six months ending November 30, 2000, primarily for
analytical services. The increase of current liabilities is the result of the
additional advances from the line of credit amounting to approximately $517,000
and the income tax liabilities that have resulted from strong operating results
in this past quarter. The current income tax liability increased by
approximately $160,000. The Company had a much lower tax liability as of May 31,
2000 mostly because a net operating loss carryforward was still available to
reduce much of the tax liability for the tax reporting period ended May 31,
2000.
The Company maintains a line of credit of $1.8 million with a bank, secured by
the Company's accounts receivable and the personal guaranty of the majority
shareholder and CEO. The line of credit has provided a significant source of the
Company's cash requirements. The actual balance on the line of credit will
fluctuate during the period based on financing activities. There are no
significant working capital requirements pending at November 30, 2000. The
Company's available line of credit is expected to be sufficient to meet the
Company's needs for the foreseeable future.
RESULTS OF OPERATIONS
Three month operating results
-----------------------------
Revenues for the three months ended November 30, 2000 were $3,334,077, which
represents an increase of 4.5% from the last year's three month revenues of
$3,190,204. Service revenue returned to estimated levels after a very active
first quarter of the fiscal year.
Gross profit was 30.5% and 25.0% of revenues for the three months ending
November 30, 2000 and 1999, respectively. The Company considers gross margin of
30.5% to be within the range for normal operations. Net income before income
taxes increased for the three months ended November 30, 2000 with a 3.3% profit
as compared to 1.8% for the same period in the prior year. The improvement of
gross profit is attributed to the increased sales volume generated by the
laboratory operation. The laboratory experiences significant increases in profit
margins from increased sales due to the ability to better optimize the
utilization of the lab's automated instruments.
General and administrative expense was $342,029 for the three months ended
November 30, 2000, an increase of 18.1% from the three months ended November 30,
1999. The increase is attributed to the additional marketing staff brought into
the Company at the beginning of the current fiscal year.
Interest expense was $57,734 for the three months ended November 30, 2000, an
increase of 71.2% as compared to the same period for the prior year. The Company
experienced unusually low borrowing requirements during the quarter ended
November 30, 1999 which had stemmed primarily from very positive collection
results on customer accounts. This same level of success on receivable turnover
has not occurred during the quarter ended November 30, 2000. However, the client
receivables are still considered in favorable condition as of this reporting
date. Also, interest expense is higher because the majority of capital
expenditures over the past fiscal year were acquired under capital lease
obligations and represent a portion of the increase in interest expense.
Six month operating results
---------------------------
<PAGE>
Revenues for the six months ended November 30, 2000 were $7,402,600, which
represents an increase of 13.8% from the last year's six month revenues of
$6,502,096. The revenue increase is the result of a substantial increase in
analytical services for our Ohio laboratory during the first two quarters, much
of which was attributed to several large projects. The laboratory's revenues
increased by approximately $589,000 for the current year's six months ended as
compared to the prior year. The first half of the fiscal year is typically the
strongest for analytical services, as many clients have a high concentration of
project work from the Spring time through Autumn.
The consulting services reported modest decrease in revenues of $48,000 for the
first six months of fiscal year 2001, when compared to the same period ended
November 30, 1999. The first quarter of this fiscal year reported an increase of
$90,000 while the second quarter revenues reported a $138,000 decrease, more
than offsetting the first quarter improvements. The remediation project activity
slowed slightly during the second quarter.
Gross profit was 34.8% and 29.1% of revenues for the six months ending November
30, 2000 and 1999, respectively. The Company considers gross margin of 34.8% to
be within the range for normal operations. Net income before income taxes
increased for the six months ended November 30, 2000 with a 9.6% profit as
compared to 6.5% for the same period in the prior year. The improvement of gross
profit is attributed to the increased sales volume generated by the laboratory
operation as discussed in the three month operating results section above. Much
of the increase in gross margin for the current year's first quarter was the
reason for the increase in net income before taxes.
General and administrative expense was $717,779 for the six months ended
November 30, 2000, an increase of 15.6% from the first six months of the prior
year. The increase is attributed to the additional marketing staff brought into
the Company as well as the recognition of the profit sharing plan that was
implemented during fiscal year 1999.
Interest expense was $118,294 for the six months ended November 30, 2000, an
increase of 81.2% as compared to the same period for prior year. The Company
experienced unusually low borrowing requirements during the first six months of
fiscal year 2000 as discussed in the three month operating results.
YEAR 2000
We successfully completed our program to ensure Year 2000 readiness. As a
result, we had no Year 2000 problems that affected our business, results of
operations or financial condition.
FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements and information relating to the
Company that are based on the beliefs of its management as well as assumptions
made by and information currently available to its management. When used in this
report, the words "anticipate", "believe", "estimate", "expect", "intend", plan
and similar expressions, as they relate to the Company or its management, are
intended to identify forward-looking statements. These statements reflect
management's current view of the Company with respect to future events and are
subject to certain risks, uncertainties and assumptions. Should any of these
risks or uncertainties materialize, or should underlying assumptions prove
incorrect, actual results my vary materially from those described in this report
as anticipated, estimated or expected. The Company's realization of its business
aims will depend in the near future principally on the successful completion of
its acquisition of operations as discussed below.
LIQUIDITY AND CAPITAL RESOURCES
During the six months ended November 30, 2000, the Company's line of credit
increased by $516,825 to $1,220,673. This was the result of a slowdown in
customer payment, as a result, accounts receivables have increased by
approximately $621,000 during the first six months of the current year. Some of
this increase in receivables can be attributed to the increased sales achieved
during the six month period. The Company
<PAGE>
generated approximately $7,403,000 in billings for the current fiscal year. The
average billings for a six month period during the fiscal year ended May 31,
2000 was only $6,760,000.
Cash flows provided by operating activities totaled $291,255 for the six months
ended November 30, 2000. Cash outflows consist primarily of the significant
increases in accounts receivable as described in the section above on financial
condition along with the decrease in accounts payable and accrued expenses for
the six months.
Cash used in investing activities totaled $439,099 for the current year's first
six months. The significant cash outflow relates to the acquisition of Kiber
Environmental Services, Inc.
PART II - OTHER INFORMATION
Item 6 - Exhibits and 8-K Filings
(a) The Company had no filings the three months ended November 30, 2000.
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.
WHITNEY AMERICAN CORPORATION
By /s/ JUAN J. GUTIERREZ
----------------------
JUAN J. GUTIERREZ
PRESIDENT AND CEO
DATED: JANUARY 12, 2001
In accordance with the Exchange Act, this Report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
Name Title Date
<S> <C> <C>
/s/ Juan J. Gutierrez Chief Executive Officer, President January 12, 2001
---------------------
Juan J. Gutierrez and Chairman of the Board
/s/ John M. Dwyer Vice President January 12, 2001
-----------------
John M. Dwyer and Director
/s/ Dave Vandenberg Vice President January 12, 2001
-------------------
Dave Vandenberg and Director
/s/ John S. Heishman Secretary, Treasurer January 12, 2001
--------------------
John S. Heishman and Director
/s/ Tracy Bergquist Vice President January 12, 2001
--------------------
Tracy Bergquist and Director
</TABLE>
