<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
Commission File Number: 0-17493
OMNI U.S.A., INC.
(Exact name of registrant as specified in its charter)
Nevada 88-0237223
---------------- ----------------------
(State of Incorporation) (IRS Employer Identification No.)
7502 Mesa Road, Houston, Texas 77028
(Address of principal executive offices)
(713) 635-6331
(Issuer's Telephone Number)
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 ____
At November 14, 1996, there were 2,067,350 shares of common stock $.004995 par
value outstanding.
<PAGE> 2
OMNI U.S.A., INC. AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets
September 30, 1996 and June 30, 1996
Condensed Consolidated Statements of Operations
For the Three Months Ended September 30, 1996 and September 30, 1995
Condensed Consolidated Statements of Cash Flows
For the Three Months Ended September 30, 1996 and September 30, 1995
Notes to Condensed Consolidated Financial Statements
Management's Discussion and Analysis of Financial Condition and Results
of Operations
<PAGE> 3
OMNI U.S.A INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months ended September 30, 1996 and 1995
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C>
NET SALES $2,854,959 $1,717,576
COST OF SALES 2,127,264 1,247,369
---------- ----------
Gross Profit 727,695 470,207
---------- ----------
OPERATING EXPENSES
Selling, general and administrative 715,688 662,488
715,688 662,488
---------- ----------
Operating income (loss) 12,007 (192,281)
---------- ----------
OTHER INCOME (EXPENSE)
Commission income -0- 3,985
Interest expense (30,670) (4,470)
Other, net 18,704 23,195
---------- ----------
(11,966) 22,710
---------- ----------
NET INCOME (LOSS) $ 41 $ (169,571)
========== ==========
NET LOSS PER COMMON SHARE $ (0.02) $ (0.11)
========== ==========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 1,810,827 1,635,486
========== ==========
</TABLE>
The accompanying notes are an integral part of the
consolidated financial statements.
<PAGE> 4
OMNI U.S.A INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30, 1996 and JUNE 30, 1996
<TABLE>
<CAPTION>
ASSETS
September 30, 1996 June 30, 1996
------------------ -------------
<S> <C> <C>
CURRENT ASSETS
Cash $ 612,538 $ 494,681
Accounts receivable, trade, net 1,746,377 1,700,753
Accounts receivable, related parties 86,603 86,808
Inventories 1,851,220 1,760,643
Tooling advance 120,000 120,000
Prepaid expenses 244,786 198,360
---------- ----------
TOTAL CURRENT ASSETS 4,661,524 4,361,245
---------- ----------
PROPERTY AND EQUIPMENT, net of
accumulated depreciation and amortization 799,105 762,541
---------- ----------
OTHER ASSETS
Organizational cost 48,300 51,195
Intangible assets 125,387 132,600
Note receivable, affiliate 853,397 853,397
Prepaid royalties 199,376 199,376
Long term deposits 60,559 60,559
TOTAL OTHER ASSETS 1,287,019 1,297,127
---------- ----------
TOTAL ASSETS $6,747,648 $6,420,913
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $1,517,000 $1,746,005
Line of credit 1,306,652 1,505,635
Accrued expenses 681,150 452,724
Current portion of long-term debt 199,032 215,868
---------- ----------
TOTAL CURRENT LIABILITIES 3,703,834 3,920,232
---------- ----------
LONG-TERM DEBT 19,919 26,230
---------- ----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock 101 101
Common stock 9,326 9,020
Equity contract notes 918,304 918,304
Subordinated convertible debentures 453,293 -0-
Additional paid-in capital 4,520,088 4,391,171
Retained earnings (deficit) (2,973,419) (2,942,176)
Foreign currency translation adjustment 96,202 98,031
---------- ----------
TOTAL STOCKHOLDERS' EQUITY 3,023,895 2,474,451
---------- ----------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $6,747,648 $6,420,913
========== ==========
</TABLE>
The accompanying notes are an integral part of the
consolidated financial statements.
<PAGE> 5
OMNI U.S.A INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended September 30, 1996 and 1995
<TABLE>
<CAPTION>
30-Sep-96 30-Sep-95
--------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 41 $(169,571)
----------- ---------
Adjustments to reconcile net income (loss) to net cash
(used) provided by operating activities:
Depreciation and amortization 51,229 48,626
Gain on sale of property and equipment -0- -0-
Non cash expenses 83,465 -0-
Changes in operating assets and liabilities:
Accounts receivable (1,139,758) (69,746)
Inventories (756,863) 58,541
Prepaid expenses (25,395) (55,413)
Long term deposits (60,559) -0-
Accounts payable and accrued expenses 2,180,394 256,243
----------- ---------
Total adjustments 332,514 238,250
----------- ---------
Net cash (used) provided by operating
activities 332,555 68,679
----------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (327,592) (45,575)
Proceeds from sale of property and equipment -0- -0-
Purchase of intangible assets and organization cost 40,012 (62,958)
----------- ---------
Net cash used by investing activities (287,580) (108,533)
----------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on long-term debt (34,166) 36,575
Net proceeds from issuance of stock and debentures 451,860 -0-
----------- ---------
Net cash provided by financing
activities 417,694 36,575
----------- ---------
NET INCREASE(DECREASE) IN CASH 462,670 (3,279)
CASH AT BEGINNING OF YEAR 149,867 153,146
----------- ---------
CASH AT END OF YEAR $ 612,538 $ 149,867
=========== =========
</TABLE>
The accompanying notes are an integral part of the
consolidated financial statements.
<PAGE> 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The consolidated financial statements have been prepared by the Company,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations. The Company believes that the disclosures made in this report are
adequate to make the information presented not misleading. It is suggested
that these condensed financial statements be read in conjunction with the
financial statements and the notes thereto included in the Company's latest
annual report on Form 10-KSB. In the opinion of the Company, all adjustments,
consisting only of normal recurring adjustments, necessary to present fairly
the financial position of Omni U.S.A., Inc. and subsidiaries as of September
30, 1996, and the results of their operations and cash flows for the three
month periods ended September 30, 1996, and September 30, 1995, have been
included. The results of operations for such interim periods are not
necessarily indicative of the results for the full year.
2. Primary and fully diluted income (loss) per share are based on the weighted
average number of shares of common stock outstanding. For the periods ended
September 30, 1996, and September 30, 1995, the Company's common stock
equivalents were antidilutive and therefore were not included in the
computation of primary and fully diluted income (loss) per share.
3. Interest paid on debt for the three months ended September 30, 1996 and
1995, was $30,670 and $4,470, respectively. No interest was paid on equity
contract notes for the periods ended September 30, 1996 or September 30, 1995.
No income taxes were paid during the three months ended September 30, 1996 and
1995, respectively.
4
<PAGE> 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
This report has been prepared pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information normally included
in annual reports has been condensed or omitted pursuant to such rules and
regulations. This report should be read in conjunction with the Company's
latest Form 10-KSB, a copy of which may be obtained by writing to the Investor
Relations Department, Omni U.S.A., Inc., 7502 Mesa Road, Houston, Texas
77028.
Liquidity and Capital Resources
The Company had a working capital balance of $957,690 as of September
30, 1996. This balance represents a increase of $516,677 from working capital
of $441,013 at June 30, 1996. The increase in working capital was due to
decreased current liabilities of $216,398, offset by increased current assets
of $300,279, particularly cash, inventory and prepaid expenses ($254,860).
Current ratio increased from 1.1 at June 30, 1996 to 1.3 at September 30, 1996.
The cash balance was $612,538 as of September 30, 1996, an increase of
$117,857 compared with June 30, 1996. Accounts receivable were $45,624 greater
than June 30, 1996, and the receivable collection period decreased from 60 days
to 56 days from June 30, 1996 to September 30, 1996, respectively.
The Company's inventories increased by $90,577 or approximately 5%
during the quarter. At September 30, 1996, the Company had 80 days cost in
inventory compared to 85 days cost in inventory at June 30, 1996. The Company
reduces inventory purchases as current inventory levels are adequate to support
Company sales.
During the quarter, the Company issued $500,000 of subordinated
convertible debentures in a private transaction. The Company believes that
between its access to the revolving credit facility and its ability to generate
funds internally, it has adequate capital resources to meet its working capital
requirements for the foreseeable future, given its current working capital
requirements and known obligations, and assuming current levels of operations.
In addition, the Company believes that it has the ability to raise additional
financing in the form of debt or equity to fund additional capital
expenditures.
5
<PAGE> 8
Results of Operations - First Quarter Results
The Company had a net profit of $41 ($.02 loss per share) for the
quarter ended September 30, 1996, compared with net loss of $169,571 ($.11 loss
per share) for the quarter ended September 30, 1995. Earnings per share are
calculated after preferred stock dividends and a provision for interest
(dividends) on equity contract notes (collectively $31,285 in the first quarter
of 1996 and $18,366 in the first quarter of 1995). Operating income was $12,007
for the quarter ended September 30, 1996, compared with an operating loss of
$192,281 for the quarter ended September 30, 1995.
Consolidated net sales were $2,854,959 in the first quarter of fiscal
year 1997, a 66% increase over net sales of $1,717,576 in the first quarter of
fiscal year 1996. This increase resulted primarily from significant increases
in irrigation and planetary gearbox sales during the quarter ended September
30, 1996, compared to the quarter ended September 30, 1995. Gearbox sales
continue to dominate the Company's sales mix during the first quarter
representing 96% of total sales, with towing products representing 4% of total
sales. Omni U.S.A., Inc. contributed 94% of the total sales and Omni
Resources, Ltd., the Company's Hong Kong subsidiary, contributed 6% for the
three months ending September 30, 1996.
Gross profit as a percentage of sales was approximately 25% for the
quarter ended September 30, 1996. This represents an approximate 2% decrease
from the quarter ended September 30, 1995, due primarily to sales mix changes
as well as lower margins generally associated with sales generated by Omni
Resources, Ltd.
Selling, general and administrative expenses were $715,688 for the
quarter ended September 30, 1996, an increase of $50,348 or approximately 7%
over the quarter ended September 30, 1995. The significant changes in selling,
general and administrative expenses were in increased rent, insurance,
production supplies, and professional services, primarily associated with the
Company's Shanghai facility.
6
<PAGE> 9
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
There have been no material changes from the disclosure in the
Company's Form 10- KSB for the fiscal year ended June 30, 1996.
Item 2. Change in Securities.
Not applicable.
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
October 18, 1996 - Acquisition of 100% of Butler Products
Corporation Common Stock.
The following exhibits were filed as part of the exhibit section in
the Company's Form 8-K filed October 18, 1996, and are incorporated
herein by reference:
10.9 Butler Products Corporation Share Purchase Agreement dated
October 1, 1996, together with exhibits as follows:
-Junior Subordinated Promissory Note to Frank E. Jakubec
-Junior Subordinated Promissory Note to Dennis W. Swim
-Employment Agreement between Butler Products Corporation
and Frank E. Jakubec
-Employment Agreement between Butler Products Corporation
and Dennis W. Swim
7
<PAGE> 10
-Noncompetition Agreement between Butler Products
Corporation and Frank E.Jakubec
-Noncompetition Agreement between Butler Products
Corporation and Dennis W. Swim
8
<PAGE> 11
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
OMNI U.S.A., INC.
Date: November 14, 1996
By: /s/ Jeffrey K. Daniel
-------------------------------------
Jeffrey K. Daniel
President and Chief Executive Officer
9
<PAGE> 12
INDEX TO EXHIBITS
Exhibit
No. Description
- ------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM UNAUDITED
FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<CASH> 612,538
<SECURITIES> 0
<RECEIVABLES> 1,746,377
<ALLOWANCES> 0
<INVENTORY> 1,851,220
<CURRENT-ASSETS> 4,661,524
<PP&E> 1,777,665
<DEPRECIATION> 978,560
<TOTAL-ASSETS> 6,747,648
<CURRENT-LIABILITIES> 3,703,834
<BONDS> 19,919
<COMMON> 9,326
0
101
<OTHER-SE> 3,014,468
<TOTAL-LIABILITY-AND-EQUITY> 6,747,648
<SALES> 2,854,959
<TOTAL-REVENUES> 2,854,959
<CGS> 2,127,264
<TOTAL-COSTS> 715,688
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 30,670
<INCOME-PRETAX> 41
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 41
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
</TABLE>
