<PAGE>
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 March 31, 2000
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 May 12, 2000 there were 3,623,092 shares of common stock $.004995 par value
outstanding.
1
<PAGE>
OMNI U.S.A., INC. AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Independent Accountant's Report
Condensed Consolidated Balance Sheets
March 31, 2000 and June 30, 1999
Condensed Consolidated Statements of Operations
Three Months and Nine Months Ended March 31, 2000 and March 31, 1999
Condensed Consolidated Statements of Cash Flows
Three Months and Nine Months Ended March 31, 2000 and March 31, 1999
Notes to Condensed Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
2
<PAGE>
INDEPENDENT ACCOUNTANT'S REPORT
To the Stockholders and
Board of Directors of
Omni U.S.A., Inc. and Subsidiaries
We have reviewed the accompanying condensed consolidated balance sheet as of
March 31, 2000 of Omni U.S.A., Inc. and Subsidiaries and the related condensed
consolidated statements of operations and the condensed consolidated statements
of cash flows for the three month and nine month periods ended March 31, 2000 of
Omni U.S.A., Inc. and Subsidiaries, in accordance with Statements on Standards
for Accounting and Review Services issued by the American Institute of Certified
Public Accountants. All information included in these financial statements is
the representation of the management of Omni U.S.A., Inc. and Subsidiaries.
A review of interim financial information consists principally of inquiries of
Company personnel and analytical procedures applied to financial data. It is
substantially less in scope than an audit in accordance with generally accepted
auditing standards, the objective of which is the expression of an opinion
regarding the financial statements taken as a whole. Accordingly, we do not
express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements in order for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Omni U.S.A., Inc. and Subsidiaries
as of June 30, 1999, and the related consolidated statements of income,
stockholder's equity and cash flows for the year then ended (not presented
herein); and in our report dated September 16, 1999, we expressed an unqualified
opinion on those consolidated financial statements. In our opinion, the
information set forth in the accompanying condensed consolidated balance sheet
as of June 30, 1999 is fairly stated, in all material respects, in relation to
the consolidated balance sheet from which it has been derived.
We have not audited or reviewed the related condensed consolidated statements of
operations nor the related condensed consolidated statements of cash flows for
the three month and nine month periods ended March 31, 1999 of Omni U.S.A., Inc.
and Subsidiaries and, accordingly, we do not express an opinion or any other
form of assurance on them.
Harper & Pearson Company
May 4, 2000
3
<PAGE>
OMNI U.S.A., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, 2000 (UNAUDITED) AND JUNE 30, 1999
<TABLE>
<CAPTION>
ASSETS
March 31, 2000 June 30, 1999
------------------------- ------------------------
<S> <C> <C>
CURRENT ASSETS
Cash $ 444,220 $ 292,903
Accounts receivable, trade, net 2,457,087 2,920,896
Accounts receivable, related parties 29,340 12,069
Inventories 4,517,791 3,207,542
Prepaid expenses 72,616 69,693
------------------------- ------------------------
TOTAL CURRENT ASSETS 7,521,054 6,503,103
------------------------- ------------------------
PROPERTY AND EQUIPMENT, NET 2,215,213 2,158,715
------------------------- ------------------------
OTHER ASSETS, NET 212,029 265,103
------------------------- ------------------------
TOTAL ASSETS $ 9,948,296 $ 8,926,921
========================= ========================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 2,171,611 $ 2,672,455
Line of credit 2,578,977 2,088,917
Accrued expenses 441,608 486,205
Current portion of long-term debt 363,125 230,502
------------------------- ------------------------
TOTAL CURRENT LIABILITIES 5,555,321 5,478,079
------------------------- ------------------------
LONG-TERM DEBT 1,575,175 646,776
------------------------- ------------------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock 18,384 17,885
Additional paid-in capital 5,360,457 5,248,560
Treasury Stock (57,141) (57,141)
Retained earnings (deficit) (2,601,931) (2,505,269)
Foreign currency translation adjustment 98,031 98,031
------------------------- ------------------------
TOTAL STOCKHOLDERS' EQUITY 2,817,800 2,802,066
------------------------- ------------------------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 9,948,296 $ 8,926,921
========================= ========================
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements.
See accompanying independent accountant's report.
4
<PAGE>
OMNI U.S.A., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS AND THE NINE MONTHS ENDED MARCH 31, 2000 AND 1999
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS NINE MONTHS NINE MONTHS
ENDED ENDED ENDED ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
2000 1999 2000 1999
------------------ ----------------- ----------------- ----------------
<S> <C> <C> <C> <C>
NET SALES $ 5,489,702 $ 4,794,259 $ 14,383,670 $ 12,009,907
COST OF SALES 4,193,852 3,705,364 10,902,346 9,001,190
------------------ ----------------- ----------------- ----------------
GROSS PROFIT 3,008,717
1,295,850 1,088,895 3,481,324
OPERATING EXPENSES
Selling, general and administrative 961,547 1,026,050 3,244,760 3,074,907
------------------ ----------------- ----------------- ----------------
OPERATING INCOME (LOSS) 334,303 62,845 236,564 (66,190)
OTHER INCOME (EXPENSE)
Interest expense (109,277) (68,245) (272,109) (242,371)
Other, net 2,999 21,446 (61,117) 61,529
------------------ ----------------- ----------------- ----------------
TOTAL OTHER EXPENSE (106,278) (46,799) (333,226) (180,842)
------------------ ----------------- ----------------- ----------------
NET AND COMPREHENSIVE INCOME (LOSS) $ 228,025 $ 16,046 $ (96,662) $ (247,032)
================== ================= ================= ================
BASIC AND FULLY DILUTED EARNINGS (LOSS) PER SHARE $ 0.06 $ 0.00 $ (0.03) $ (0.07)
================== ================= ================= ================
DILUTED EARNINGS (LOSS) PER SHARE $ 0.06 $ 0.00 $ (0.03) $ (0.07)
================== ================= ================= ================
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements.
See accompanying independent accountant's report.
5
<PAGE>
OMNI U.S.A., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS AND THE NINE MONTHS ENDED MARCH 31, 2000 AND 1999
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS NINE MONTHS NINE MONTHS
ENDED ENDED ENDED ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
2000 1999 2000 1999
----------------- ----------------- ----------------- ----------------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (loss) $ 228,025 $ 16,046 $ (96,662) $ (247,032)
Adjustments to reconcile net income (loss) to net
cash (used) provided by operating activities:
Depreciation and amortization 93,623 92,073 276,334 289,546
Changes in operating assets and liabilities:
Accounts receivable 525,907 (726,244) 446,538
175,820
Inventories (390,702) 223,541 (1,059,259) (220,310)
Prepaid expenses 130 29,049 (2,923) (14,915)
Other assets 8,064 38,502 8,064
Accounts payable and accrued expenses (580,061) 296,784 (545,442) 539,077
----------------- ----------------- ----------------- ----------------
Total adjustments (351,103) (76,733) (846,250) 777,282
----------------- ----------------- ----------------- ----------------
Net cash (used) provided by operating (123,078) (60,687) (942,912) 530,250
activities ----------------- ----------------- ----------------- ----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of Piecemaker, Inc. (350,990)
Capital expenditures (69,689) (39,615) (105,863) (80,174)
----------------- ----------------- ----------------- ----------------
Net cash used by investing activities (69,689) (39,615) (456,853) (80,174)
----------------- ----------------- ----------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds of borrowing on long-term debt 1,000,000
Proceeds of Piecemaker acquisition financing 200,000
Net borrowings/(payments) on line of credit 307,676 483,470 490,060 (123,880)
Repayments of long-term debt (30,376) (44,619) (138,978) (101,008)
----------------- ----------------- ----------------- ----------------
Net cash provided (used) by financing 277,300 438,851 1,551,082 (224,888)
activities ----------------- ----------------- ----------------- ----------------
NET INCREASE IN CASH 84,533 338,549 151,317 225,188
CASH AT BEGINNING OF PERIOD 359,687 164,936 292,903 278,297
----------------- ----------------- ----------------- ----------------
CASH AT END OF PERIOD $ 444,220 $ 503,485 $ 444,220 $ 503,485
================= ================= ================= ================
Supplemental disclosure of non-cash investing activities
Common stock issued for purchase of inventory and
assets $ $ $ 112,396 $
================= ================= ================= ===============
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements. See accompanying independent accountant's report.
6
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. The condensed consolidated financial statements have been prepared by the
Company, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission. The Company believes that the disclosures made in this
report are adequate to make the information presented not misleading. These
condensed financial statements should 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 March 31, 2000, and the
results of their operations and cash flows for the three month and nine month
periods ended March 31, 2000, and March 31, 1999, have been included. The
results of operations for such interim periods are not necessarily indicative of
the results for the full year.
2. During the fiscal quarter ended September 30, 1999, the Company acquired
$212,000 of machinery and equipment and $250,000 of inventory from Piecemaker,
Inc., a Madill, Oklahoma manufacturer of horse, livestock and utility trailer
component parts, in exchange for 100,000 shares of Omni U.S.A., Inc. common
stock and $350,990 in cash. The Company also entered into a $200,000 loan
agreement to help finance this acquisition.
3. During the quarter ended September 30, 1999, the Company entered into a
$1,000,000 loan agreement with PACCAR Inc. (PACCAR). Loan proceeds are to be
used to support Shanghai Omni Gear's manufacturing of planetary geardrives,
which will be sold by PACCAR under the September 9, 1999 distribution agreement.
Quarterly payments of principle and interest of 8% commence in December 2000 and
continue for a five-year period. Under the terms of the loan, PACCAR will be
issued between 350,000 and 500,000 warrants to purchase shares of the Company's
common stock. The warrants may be exercised through September 2009 at $2.00 per
share.
4. Basic, comprehensive and diluted earnings (loss) per share is based on the
weighted average number of shares of common stock outstanding. For the three
month and nine month periods ended March 31, 2000, and March 31, 1999, the
Company's weighted average shares outstanding are calculated as follows:
<TABLE>
<CAPTION>
Quarter Quarter Nine Months Nine Months
Ended Ended Ended Ended
March 31, March 31, March 31, March 31,
2000 1999 2000 1999
----------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
Weighted average common shares 3,623,092 3,523,903 3,623,092 3,523,903
Conversion of dilutive stock options 339,567 296,260
------------ ------------- ------------- ------------
Dilutive weighted average common shares 3,962,659 3,820,163 3,623,092 3,523,903
============ ============= ============= ============
</TABLE>
5. Interest paid on debt for the three months ended March 31, 2000 and 1999, was
$109,277 and $68,245 respectively. Interest paid on debt for the nine months
ended March 31, 2000 and March 31, 1999 was $272,109 and $242,371, respectively.
No income taxes were paid during the three months or nine months ended March 31,
2000 and 1999, respectively.
6. During the quarter ended September 30, 1999, the Company expensed $38,502 of
unamortized organizational cost relating to the implementation of Financial
Accounting Standards Board SOP 98-5, "Reporting on the Costs of Start-Up
Activities."
7
<PAGE>
7. MAJOR CUSTOMERS AND VENDORS: During the nine months ended March 31, 2000, the
Company and its subsidiaries had consolidated sales of $2,828,487 to a domestic
customer for a total of 19% of consolidated sales. During the nine months ended
March 31, 2000, the Company and its subsidiaries had consolidated purchases of
$6,950,428 from two vendors for a total of 63% of consolidated purchases.
8. SEGMENT INFORMATION: The Company and its subsidiaries are engaged in the
business of designing, developing and distributing power transmissions and
trailer and implement components used for agricultural, construction and
industrial equipment.
<TABLE>
<CAPTION>
SEGMENT INFORMATION
FOR OMNI USA, INC. AND SUBSIDIARIES
- --------------------------------------------------------------------------------------------------------------
THREE MONTHS ENDED NET SALES INCOME FROM INTEREST IDENTIFIABLE CAPITAL DEPRECIATION/
MARCH 31, 2000 OPERATIONS EXPENSE ASSETS EXPENDITURES AMORTIZATION
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Power Transmission $4,254,664 $ 352,166 $ 91,879 $ 7,372,112 $ 69,689 $ 64,434
Components
- --------------------------------------------------------------------------------------------------------------
Trailer and Implement 1,235,038 88,072 17,398 2,576,184 - 29,189
Components
- --------------------------------------------------------------------------------------------------------------
Corporate and Eliminations (105,935)
- --------------------------------------------------------------------------------------------------------------
Total $5,489,702 $ 334,303 $ 109,277 $ 9,948,296 $ 69,689 $ 93,623
- --------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
THREE MONTHS ENDED NET SALES INCOME FROM INTEREST IDENTIFIABLE CAPITAL DEPRECIATION/
MARCH 31, 1999 OPERATIONS EXPENSE ASSETS EXPENDITURES AMORTIZATION
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Power Transmission $ 3,752,903 $ 17,536 $53,525 $ 6,105,205 $ 3,922 $ 55,002
Components
- --------------------------------------------------------------------------------------------------------------
Trailer and Implement 1,041,356 77,616 14,720 2,286,929 35,693 37,071
Components
- --------------------------------------------------------------------------------------------------------------
Corporate and Eliminations (32,307)
- --------------------------------------------------------------------------------------------------------------
Total $ 4,794,259 $ 62,845 $68,245 $ 8,392,134 $ 39,615 $ 92,073
- --------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
NINE MONTHS ENDED NET SALES INCOME FROM INTEREST IDENTIFIABLE CAPITAL DEPRECIATION/
MARCH 31, 2000 OPERATIONS EXPENSE ASSETS EXPENDITURES AMORTIZATION
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Power Transmission $11,121,692 $487,440 $227,018 $ 7,372,112 $ 93,762 $ 190,489
Components
- --------------------------------------------------------------------------------------------------------------
Trailer and Implement 3,261,978 108,601 45,091 2,576,184 12,101 85,845
Components
- --------------------------------------------------------------------------------------------------------------
Corporate and Eliminations (359,477)
- --------------------------------------------------------------------------------------------------------------
Total $14,383,670 $236,564 $272,109 $ 9,948,296 $ 105,863 $ 276,334
- --------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
NINE MONTHS ENDED NET SALES LOSS FROM INTEREST IDENTIFIABLE CAPITAL DEPRECIATION/
MARCH 31, 1999 OPERATIONS EXPENSE ASSETS EXPENDITURES AMORTIZATION
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Power Transmission $ 9,125,012 $ (57,343) $181,447 $6,105,205 $ 44,481 $ 220,641
Components
- --------------------------------------------------------------------------------------------------------------
Trailer and Implement 2,884,895 173,460 60,924 2,286,929 35,693 68,905
Components
- --------------------------------------------------------------------------------------------------------------
Corporate and Eliminations (182,307)
- --------------------------------------------------------------------------------------------------------------
Total $12,009,907 $ (66,190) $242,371 $8,392,134 $ 80,174 $ 289,546
- --------------------------------------------------------------------------------------------------------------
</TABLE>
8
<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. This report should be read in
conjunction with the Company's latest Form 10-KSB, a copy of which may be
obtained by visiting the Company's home page at WWW.OUSA.COM, or by writing to
the Investor Relations Department, Omni U.S.A., Inc., 7502 Mesa Road, Houston,
Texas 77028.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary capital requirements are for working capital and
acquisitions which are generally met through a combination of internally
generated funds, a revolving credit line and credit terms from suppliers. The
Company had working capital of $1,965,733 as of March 31, 2000 and working
capital of $1,025,024 as of June 30, 1999. This represents an increase of
$940,709 from June 30, 1999. The change in working capital was due to the
funding of the PACCAR loan (see Note 3) and increase in inventory, partly due to
the acquisition of Piecemaker, Inc. inventory (see Note 2), in addition to other
changes in working capital.
The cash balance was $444,220 as of March 31, 2000; representing
positive cash flow of $151,317 compared to the June 30, 1999 cash balance of
$292,903. The positive cash flow was generated primarily as a result of
financing activities for the period. Accounts receivable balance of $2,486,427
as of March 31, 2000 decreased $446,538 compared to June 30, 1999 accounts
receivable balance of $2,932,965 which contributed to the cash utilized by
operating activities in addition to the increase in inventory and a reduction in
accounts payable.
The inventory balance as of March 31, 2000 was $4,517,791; an increase
of $1,372,733 compared to March 31, 1999 inventory of $3,145,058. Inventory
increased as a result of the acquisition of Piecemaker, Inc. inventory (see Note
2), to support increased fourth quarter sales, additional product lines and the
increased activity within the Shanghai Omni Gear manufacturing facility.
Net cash used for investing activities for the nine months ended March
31, 2000 of $456,853 consisted of the Piecemaker, Inc. acquisition (see Note 2)
and capital expenditures of $105,863 compared to capital expenditures of $80,174
for the nine months ended March 31, 1999.
Net cash provided from financing activities for the nine months ended
March 31, 2000 of $1,551,082 consisted of borrowings on the revolving line of
credit of $490,060, proceeds of the Piecemaker, Inc. financing (see Note 2) and
the PACCAR loan (see Note 3) offset by payments on long-term debt of $138,978.
The Company's current ratio was 1.35 as of March 31, 2000, which is a
13% increase over the June 30, 1999 current ratio of 1.19. Days sales
outstanding for the period ending March 31, 2000 were approximately 47 compared
to the period ending March 31, 1999 days sales outstanding of 55.
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 and operations, if required.
9
<PAGE>
RESULTS FOR THE QUARTER ENDED MARCH 31, 2000 COMPARED WITH THE QUARTER ENDED
MARCH 31, 1999
The Company had net sales of $5,489,702 for the quarter ended March 31,
2000. This represents an increase of 15% from the quarter ended March 31, 1999
net sales of $4,794,259. The following table indicates the Company's net sales
comparison and percentage of change for periods ending March 31, 2000 and March
31, 1999:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
QUARTER ENDED % QUARTER ENDED % DOLLAR %
NET SALES 3/31/00 OF TOTAL 3/31/99 OF TOTAL CHANGE CHANGE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Power Transmission Components $ 4,254,664 78% $ 3,752,903 78% $ 501,761 13%
- ------------------------------------------------------------------------------------------------------------
Trailer and Implement Components 1,235,038 22% 1,041,356 22% 193,682 19%
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
Consolidated $ 5,489,702 100% $ 4,794,259 100% $ 695,443 15%
- ------------------------------------------------------------------------------------------------------------
</TABLE>
Selling, general and administrative expenses decreased 6.3% to $961,547
for the quarter ended March 31, 2000 over the quarter ended March 31, 1999
expenses of $1,026,050. These expenses were approximately 18% of net sales
compared to 21% for the quarter ended March 31, 1999. As a result, the Company
had an operating income of $334,303 for the quarter ended March 31, 2000
compared to operating income of $62,845 for the quarter ended March 31, 1999.
Interest expense increased $41,032, to $109,277 in the quarter ended
March 31, 2000 from $68,245 in the quarter ended March 31, 1999. Interest
expense as a percentage of sales increased to 1.9% in the quarter ended March
31, 2000 from 1.4% in the quarter ended March 31, 1999. The increase resulted
primarily from an increased level of debt associated with the Company's line of
credit to meet current inventory and working capital needs and interest on the
PACCAR (see Note 3) and Piecemaker, Inc. financing (see Note 2).
The Company had net income of $228,025 ($0.06 per share) for the
quarter ended March 31, 2000, compared with a net income of $16,046 ($0.00 per
share) for the quarter ended March 31, 1999, an increase of $211,979.
10
<PAGE>
RESULTS FOR THE NINE MONTHS ENDED MARCH 31, 2000 COMPARED WITH THE NINE MONTHS
ENDED MARCH 31, 1999
The Company had net sales of $14,383,670 for the nine months ended
March 31, 2000. This represents and increase of 20% from the nine months ended
March 31, 1999 net sales of $12,009,907. The following table indicates the
Company's net sales comparison and percentage of change for the nine month
periods ending March 31, 2000 and March 31, 1999:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
NINE MONTHS NINE MONTHS
ENDED % ENDED % DOLLAR %
NET SALES 3/31/00 OF TOTAL 3/31/99 OF TOTAL CHANGE CHANGE
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
Power Transmission Components $ 11,121,692 77% $ 9,125,012 76% $1,996,680 22%
- -------------------------------------------------------------------------------------------------------------
Trailer and Implement Components 3,261,978 23% 2,884,895 24% 377,083 13%
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
Consolidated $ 14,383,670 100% $ 12,009,907 100% $2,373,763 20%
- -------------------------------------------------------------------------------------------------------------
</TABLE>
Selling, general and administrative expenses were $3,244,760 for the
nine months ended March 31, 2000, an increase of $169,853 or approximately 5.5%
over the nine months ended March 31, 1999 expenses of $3,074,907. These expenses
were approximately 23% of net sales compared to 26% for the nine months ended
March 31, 1999. Included in the selling, general and administrative expenses for
the period ended March 31, 2000 were $240,839 of expenses attributable to the
operations of the Piecemaker, Inc. (see Note 2) division.
The Company had an operating income of $236,564 for the nine months
ended March 31, 2000 compared to operating loss of $66,190 for the nine months
ended March 31, 1999.
Interest expense increased $29,738, to $272,109 in the nine months
ended March 31, 2000 from $242,371 in the nine months ended March 31, 1999.
Interest expense as a percentage of sales decreased to 1.9% in the nine months
ended March 31, 2000 from 2.0% in the nine months ended March 31, 1999. The
increase resulted primarily from an increased level of debt associated with the
Company's line of credit to meet current inventory and working capital needs and
interest on the PACCAR loan (see Note 3) and Piecemaker, Inc. financing (see
Note 2).
Other income (expense) was an expense of $61,117 for the nine months
ended March 31, 2000 compared to income of $61,529 for the nine months ended
March 31, 1999. The change relates to expensing unamortized organizational costs
of $38,502 (see Note 6), increased commission expense coupled with a decrease in
commission income for comparable periods and other changes.
The Company had a net loss of $96,662 ($0.03 per share) for the nine
months ended March 31, 2000, compared with a net loss of $247,032 ($0.07 per
share) for the nine months ended March 31, 1999.
Although the Company has been increasing its first and second quarter
sales, the Company historically has experienced its lowest sales in the first
and second quarters, with a significant portion of its sales in the third and
fourth quarters. Management believes that fiscal year 2000 will continue in that
sales pattern.
11
<PAGE>
YEAR 2000
The Company has identified the internal software and imbedded
technology Year 2000 risks. The Company has performed internal test operations
using dates subsequent to Year 2000 (specifically, the Company's financial and
inventory systems) and has tested and evaluated its computer operated machinery
and facilities equipment.
The Company completed its Year 2000 assessment and remediation and
spent approximately $30,000 to assure Year 2000 compliance.
As a result of the Company's year 2000 assessment and remediation, the
Company has not experienced any materially adverse effects on its operations as
a result of the Year 2000 issue. Nevertheless, there is no assurance that the
systems of other companies that interact with the Company are sufficiently Year
2000 compliant so as to avoid any future adverse impact on the Company's
operations, financial condition and results of operations.
CAUTIONARY STATEMENT
The following is a "Safe Harbor" Statement under the Private Securities
Litigation Reform Act of 1995:
With the exception of historical facts, the statements contained in
Item 2 of this form 10-QSB are forward looking statements. Actual results may
differ materially from those contemplated by the forward-looking statements.
These forward looking statements involve risks and uncertainties, including but
not limited to, the following risks: 1) cyclical downturns affecting the markets
for capital goods, 2) substantial increases in interest rates, 3) availability
or material increases in the costs of select raw materials, and 4) actions taken
by competitors with regard to such matters as product offerings pricing, and
delivery. Investors are directed to the Company's documents, such as its Annual
Report on Form 10-KSB, Form 10-QSB's and Form 8-KSB filed with the Securities
and Exchange Commission.
12
<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, 1999.
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.
13
<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: May 15, 2000 OMNI U.S.A., INC.
By: /s/ Jeffrey K. Daniel
-------------------------------------
Jeffrey K. Daniel
President and Chief Executive Officer
By: /s/ David M. Sallean
--------------------------------------
David M. Sallean
Chief Financial Officer
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 444,220
<SECURITIES> 0
<RECEIVABLES> 2,628,395
<ALLOWANCES> 141,968
<INVENTORY> 4,517,791
<CURRENT-ASSETS> 7,521,054
<PP&E> 4,190,414
<DEPRECIATION> 1,975,201
<TOTAL-ASSETS> 9,948,296
<CURRENT-LIABILITIES> 5,555,321
<BONDS> 0
0
0
<COMMON> 18,384
<OTHER-SE> 2,799,416
<TOTAL-LIABILITY-AND-EQUITY> 9,948,296
<SALES> 5,489,702
<TOTAL-REVENUES> 5,489,702
<CGS> 4,193,852
<TOTAL-COSTS> 5,261,677
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 109,277
<INCOME-PRETAX> 228,025
<INCOME-TAX> 0
<INCOME-CONTINUING> 228,025
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 228,025
<EPS-BASIC> 0.06
<EPS-DILUTED> 0.06
</TABLE>
