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, 1997
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, 1997, there were 3,523,092 shares of common stock $.004995 par
value outstanding.
<PAGE>
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, 1997 and June 30, 1997
Condensed Consolidated Statements of Operations
Three Months Ended September 30, 1997 and September 30, 1996
Condensed Consolidated Statements of Cash Flows
Three Months Ended September 30, 1997 and September 30, 1996
Notes to Condensed Consolidated Financial Statements
Management's Discussion and Analysis of Financial Condition and Results
of Operations
<PAGE>
OMNI U.S.A., INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1997 AND JUNE 30, 1997
ASSETS
September 30, June 30,
1997 1997
----------- -----------
CURRENT ASSETS
Cash ........................................ $ 536,870 $ 279,756
Accounts receivable, trade, net ............. 1,732,144 2,060,436
Accounts receivable, related parties ........ 56,194 60,654
Inventories ................................. 2,539,101 2,243,751
Prepaid expenses ............................ 135,549 130,457
Notes Receivable ............................ 53,336 66,668
----------- -----------
TOTAL CURRENT ASSETS ............ 5,053,194 4,841,722
----------- -----------
PROPERTY AND EQUIPMENT, net of
accumulated depreciation and amortization ... 1,816,282 1,846,332
----------- -----------
OTHER ASSETS
Organizational cost ......................... 39,615 39,615
Intangible assets ........................... 302,886 318,345
Long term deposits .......................... 60,559 60,559
----------- -----------
TOTAL OTHER ASSETS ............... 403,060 418,519
----------- -----------
TOTAL ASSETS ................................... $ 7,272,536 $ 7,106,573
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable ............................ $ 1,621,460 $ 1,562,493
Line of credit .............................. 1,902,125 1,677,969
Accrued expenses ............................ 957,100 941,947
Current portion of long-term debt ........... 226,151 226,151
----------- -----------
TOTAL CURRENT LIABILITIES ....... 4,706,836 4,408,560
----------- -----------
LONG-TERM DEBT ................................. 728,364 753,854
----------- -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock ................................ 17,885 17,885
Additional paid-in capital .................. 5,248,560 5,248,560
Treasury Stock .............................. (55,016) (48,641)
Retained earnings (deficit) ................. (3,472,124) (3,371,676)
Foreign currency translation adjustment ..... 98,031 98,031
----------- -----------
TOTAL STOCKHOLDERS' EQUITY ...... 1,837,336 1,944,159
----------- -----------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY ...... $ 7,272,536 $ 7,106,573
=========== ===========
The accompanying notes are an integral part
of the consolidated financial statements.
1
<PAGE>
OMNI U.S.A., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
1997 1996
----------- -----------
NET SALES .................................... $ 3,331,051 $ 2,854,959
COST OF SALES ................................ 2,538,025 2,127,264
----------- -----------
Gross Profit ............................ 793,026 727,695
----------- -----------
OPERATING EXPENSES
Selling, general and administrative ....... 821,727 715,688
----------- -----------
Operating income (loss) ................ (28,701) 12,007
----------- -----------
OTHER INCOME (EXPENSE)
Interest expense ......................... (70,954) (30,670)
Other, net ............................. (793) 18,704
----------- -----------
(71,747) (11,966)
----------- -----------
NET INCOME (LOSS) ............................ $ (100,448) $ 41
=========== ===========
NET LOSS PER COMMON SHARE .................... $ (0.03) $ (0.02)
=========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING ................. 3,527,119 1,810,827
=========== ===========
The accompanying notes are an integral part of
the consolidated financial statements.
2
<PAGE>
OMNI U.S.A., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
<TABLE>
<CAPTION>
30-Sep-97 30-Sep-96
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) ....................................... $ (100,448) $ 41
----------- -----------
Adjustments to reconcile net income (loss) to
net cash
(used) provided by operating activities:
Depreciation and amortization ..................... 45,509 36,375
Changes in operating assets and
liabilities:
Accounts receivable ............................ 332,752 (45,420)
Inventories .................................... (295,350) (90,577)
Prepaid expenses ............................... (5,092) (46,426)
Notes Receivable ............................... 13,332 --
Accounts payable and accrued expenses .......... 74,120 (33,693)
----------- -----------
Total adjustments ........................... 165,271 (179,741)
----------- -----------
Net cash (used) provided by
operating activities ...................... 64,823 (179,700)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment ..................... -- (62,831)
----------- -----------
Net cash used by investing
activities .................................. -- (62,831)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings on line of credit ............................ 3,224,000 2,564,990
Payments on line of credit .............................. (2,999,844) (2,763,974)
Payments on long-term debt .............................. (25,490) (23,147)
Purchase of Treasury Stock .............................. (6,375) --
Proceeds from issuance of stock and debentures .......... -- 582,516
----------- -----------
Net cash provided by financing
activities ............................. 192,291 360,385
----------- -----------
NET INCREASE(DECREASE) IN CASH ............................. 257,114 117,854
CASH AT BEGINNING OF PERIOD ................................ 279,756 494,681
----------- -----------
CASH AT END OF PERIOD ...................................... $ 536,870 $ 612,535
=========== ===========
</TABLE>
The accompanying notes are an integral part of the
consolidated financial statements.
3
<PAGE>
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, 1997, and the
results of their operations and cash flows for the three month periods ended
September 30, 1997, and September 30, 1996, 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, 1997, and September 30, 1996, 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, 1997 and 1996,
was $60,591 and $30,670, respectively. No interest was paid on equity contract
notes for the period ending September 30, 1996. No income taxes were paid during
the three months ended September 30, 1997 and 1996, respectively.
4
<PAGE>
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 maintained its current ratio of 1.1 at September 30, 1997; the
same current ratio as of June 30, 1997. The Company had working capital of
$346,358 as of September 30, 1997. This balance represents a decrease of $86,804
from working capital of $433,162 at June 30, 1997. The decrease in working
capital was partially due to a decrease in accounts receivable of $332,752 and
an offsetting increase in inventory of $295,350 and increased demand on the line
of credit of $224,156 with a moderate increase in accounts payable of $58,967.
The cash balance was $536,870 as of September 30, 1997, an increase of
$257,114 compared to June 30, 1997. Accounts receivable were $332,752 lower than
June 30, 1997, and the receivable collection period decreased from 52 days to 50
days from June 30, 1997 to September 30, 1997, respectively.
Inventories increased $295,350 during the quarter. At September 30, 1997,
the Company's inventory turnover was 92 days compared to 73 days at June 30,
1997. The Company increased inventory is partially due to prototype and new
product field-testing and introduction. The bulk of the prototype and new
product inventory has been financed with the Company's line of credit, thus
contributing to the increased interest expense.
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.
The Company continues to repurchase Common Stock under a repurchase
program announced in 1996. The repurchase program reaffirms the Boards belief,
in light of the Company's current and expected performance, that the Common
Stock of the Company represents an attractive investment opportunity at
currently depressed prices. The Company monitors its cash position and the share
price in assessing share repurchases. Since announcement and through the quarter
ended September 30, 1997, the Company has repurchased 55,500 shares at an
average cost per share of $.99, including 4,500 shares purchased in the quarter
ended September 30, 1997.
5
<PAGE>
RESULTS OF OPERATIONS - FIRST QUARTER RESULTS
The Company had a net loss $100,448 ($.03 loss per share) for the quarter
ended September 30, 1997, compared with net income of $41 ($.02 loss per share)
for the quarter ended September 30, 1996. For the quarter ended September 30,
1996 only, earnings per share are calculated after preferred stock dividends and
a provision for interest (dividends) on equity contract notes ($31,285 in the
first quarter of 1996). Effective June 30, 1997, all preferred series of stock
under which dividends were being paid was tendered to the Company and the
Company was released from any obligation under Equity Contract Notes, and
therefore no longer provides for such interest and dividends in its earnings per
share calculation. The Company had an operating loss of $28,701 for the quarter
ended September 30, 1997 compared to operating income of $12,007 for the first
quarter ended September 30, 1996.
Consolidated net sales were $3,331,051 in the first quarter of fiscal year
1998; a 17% increase over net sales of $2,854,959 in the first quarter of fiscal
year 1997. This increase resulted primarily from the acquisition of Butler
Products Corporation in October 1996. Since the Butler acquisition, the Company
has become less dependent on sales of Omni Gear(R) product. While sales are less
dominated by Omni Gear(R) product, Omni Gear(R) product sales continue to be
strong during the first quarter representing 72% of total sales compared to 96%
of total sales for the same period last year, with Butler(TM) sales representing
22% of total sales compared to 4% of total sales for the same period last year.
Gross profit, as a percentage of sales, was approximately 24% for the
quarter ended September 30, 1997. This represents an approximate 1% decrease
from the quarter ended September 30, 1996, due primarily to product mix
associated with Butler(TM) sales.
Selling, general and administrative expenses were $821,727 for the quarter
ended September 30, 1997, an increase of $106,039 or approximately 14% over the
quarter ended September 30, 1996. Selling, general and administrative expenses
of Butler Products Corporation represents $79,251 (75%) of the selling, general
and administrative expense increase.
6
<PAGE>
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, 1997.
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.
None.
7
<PAGE>
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.
Date: November 14, 1997 OMNI U.S.A., INC.
By: /s/ JEFFREY K. DANIEL
Jeffrey K. Daniel
President and Chief Executive
Officer
8
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM CONSOLIDATED BALANCE SHEET, STATEMENT OF OPERATIONS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> SEP-30-1997
<CASH> 536,870
<SECURITIES> 0
<RECEIVABLES> 1,788,338
<ALLOWANCES> 0
<INVENTORY> 2,539,101
<CURRENT-ASSETS> 5,053,194
<PP&E> 1,816,282
<DEPRECIATION> 0
<TOTAL-ASSETS> 7,272,536
<CURRENT-LIABILITIES> 4,706,836
<BONDS> 0
0
0
<COMMON> 17,885
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 7,272,536
<SALES> 3,331,051
<TOTAL-REVENUES> 3,331,051
<CGS> 2,538,025
<TOTAL-COSTS> 821,727
<OTHER-EXPENSES> 793
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 70,954
<INCOME-PRETAX> (100,448)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (100,448)
<EPS-PRIMARY> (.03)
<EPS-DILUTED> 0
</TABLE>
