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, 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 November 14, 2000, there were 3,623,092 shares of common stock $.004995 par
value outstanding.
<PAGE>
OMNI U.S.A., INC. AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
INDES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
Condensed Consolidated Balance Sheets
September 30, 2000 and June 30, 2000
Condensed Consolidated Statements of Operations
Three Months Ended September 30, 2000 and September 30, 1999
Condensed Consolidated Statements of Cash Flows
Three Months Ended September 30, 2000 and September 30, 1999
Notes to Condensed Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
2
<PAGE>
OMNI U.S.A., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
------
<TABLE>
<CAPTION>
September 30, 2000 June 30, 2000
(unaudited)
-------------------- ----------------
<S> <C> <C>
CURRENT ASSETS
Cash $ 379,813 $ 587,044
Accounts receivable, trade, net 2,732,382 3,151,091
Accounts receivable, related parties 23,465 27,613
Inventories 4,293,887 4,103,840
Prepaid expenses 218,513 51,964
------------ ------------
TOTAL CURRENT ASSETS 7,648,060 7,921,552
------------ ------------
PROPERTY AND EQUIPMENT, net of
Accumulated depreciation and amortization 2,064,240 2,103,603
------------ ------------
OTHER ASSETS
Primarily intangible assets, net 217,517 215,822
------------ ------------
TOTAL ASSETS $ 9,929,817 $ 10,240,977
============== =============
</TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 2,137,679 $ 1,895,015
Line of credit 2,435,795 2,626,457
Accrued expenses 275,959 474,758
Current portion of long-term debt 399,137 425,369
--------------- --------------
TOTAL CURRENT LIABILITIES 5,248,570 5,421,599
--------------- --------------
LONG-TERM DEBT 1,447,165 1,462,236
--------------- --------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock 18,384 18,384
Additional paid-in capital 5,360,560 5,360,560
Treasury Stock (57,141) (57,141)
Retained earnings (deficit) (2,185,752) (2,062,692)
Foreign currency translation adjustment 98,031 98,031
--------------- --------------
TOTAL STOCKHOLDERS' EQUITY 3,234,082 3,357,142
--------------- --------------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 9,929,817 $ 10,240,977
=============== ==============
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements.
3
<PAGE>
OMNI U.S.A., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
For the three months For the three months
ended ended
September 30, 2000 September 30, 1999
------------------------ ------------------------
<S> <C> <C>
NET SALES $4,905,641 $3,840,448
COST OF SALES 3,934,882 2,988,712
----------- -----------
Gross Profit 970,759 851,736
----------- -----------
OPERATING EXPENSES
Selling, general and administrative 989,109 1,105,141
----------- -----------
Operating loss (18,350) (253,405)
----------- -----------
OTHER INCOME (EXPENSE)
Interest expense (119,352) (74,866)
Other, net 14,642 (58,631)
----------- -----------
OTHER INCOME (EXPENSE) (104,710) (133,497)
----------- -----------
NET AND COMPREHENSIVE LOSS $(123,060) $(386,902)
=========== ===========
BASIC AND COMPREHENSIVE LOSS PER SHARE $(0.03) $(0.11)
=========== ===========
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements.
4
<PAGE>
OMNI U.S.A., INC. AND SUBSIDIARIES
CONDENDSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
For the three months For the three months
ended ended
September 30, 2000 September 30, 1999
------------------- --------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (123,060) $ (386,902)
------------- ------------
Adjustments to reconcile net income (loss) to net cash
provided (used) by operating activities:
Depreciation and amortization 101,090 100,042
Changes in operating assets and liabilities:
Accounts receivable 422,857 596,780
Inventories (190,047) (351,620)
Prepaid expenses (166,549) (48,164)
Other Assets -- 38,502
Accounts payable and accrued expenses 43,865 (160,905)
------------- ------------
Total adjustments 212,216 174,635
------------- ------------
Net cash provided (used) by operating
Activities 88,156 (212,267)
------------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of Piecemaker, Inc. -- (350,990)
Acquisition of other assets (5,975) --
Capital Expenditures (57,447) (29,078)
------------- ------------
Net cash used by investing activities (63,422) (380,068)
------------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds of PACCAR, Inc. loan -- 1,000,000
Proceeds of Piecemaker financing loan -- 200,000
Net Borrowings/(Payments) on line of credit (190,662) 217,981
Payments on long-term debt (41,303) (49,184)
------------- ------------
Net cash provided/(used) by financing (231,965) 1,368,797
activities
------------- ------------
NET INCREASE (DECREASE) IN CASH (207,231) 776,462
CASH AT BEGINNING OF PERIOD 587,044 292,903
------------- ------------
CASH AT END OF PERIOD $ 379,813 $ 1,069,365
------------- ============
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements.
5
<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. 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 of
normal recurring adjustments, necessary to present fairly the financial position
of Omni U.S.A., Inc. and subsidiaries as of September 30, 2000, and the results
of their operations and cash flows for the three month periods ended September
30, 2000, and September 30, 1999, in accordance with generally accepted
accounting principles have been included.
2. Basic and diluted loss per share is based on the weighted average number of
shares of common stock outstanding. For the periods ended September 30, 2000 and
September 30, 1999, the Company's weighted average shares are calculated as
follows:
<TABLE>
<CAPTION>
September 30, 2000 September 30, 1999
--------------------- ---------------------
<S> <C> <C>
Weighted average common shares outstanding 3,623,092 3,606,425
</TABLE>
As the Company is in a net loss position, all common stock equivalents are
considered anti-dilutive and are therefore not included in the calculation of
earnings per share.
3. Interest paid on debt for the three months ended September 30, 2000 and
1999, was $119,352 and $74,866 respectively. No income taxes were paid during
the three months ended September 30, 2000 and 1999, respectively.
4. MAJOR CUSTOMERS AND VENDORS: During the fiscal quarter ended September 30,
2000 and September 30, 1999, the Company and its subsidiaries had consolidated
sales of $809,883 and $389,088 and to a domestic customer for a total of 17% and
10% of consolidated sales. During the three months ended September 30, 2000 and
September 30, 1999, the Company and its subsidiaries had consolidated purchases
of $2,130,148 to one vendor and $2,069,888 to two vendors for a total of 55% and
69% of consolidated purchases.
6
<PAGE>
5. 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.
SEGMENT INFORMATION
<TABLE>
<CAPTION>
Three months ended Net Sales Income from Interest Identifiable Capital Depreciation/
September 30, 2000 Operations Expense Assets Expenditures Amortization
------------------ ---------- ----------- -------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Power Transmission
Components $3,772,227 $ 25,211 $ 87,470 $7,553,254 $ 13,609 $ 68,001
---------- -------- -------- ---------- -------- --------
Trailer and Implement
Components 1,133,414 54,744 20,250 2,376,563 43,838 33,089
---------- -------- -------- ---------- -------- --------
Corporate and Eliminations (98,305) 11,632
---------- -------- -------- ---------- -------- --------
Total Omni, U.S.A., Inc. $4,905,641 $(18,350) $119,352 $9,929,817 $ 57,447 $101,090
========== ======== ======== ========== ======== ========
</TABLE>
<TABLE>
<CAPTION>
Three months ended Net Sales Property and
September 30, 2000 Equipment
------------------ ---------- ------------
<S> <C> <C>
Domestic $4,280,573 $ 830,983
---------- -----------
Foreign 625,068 1,233,221
---------- -----------
Total Omni, U.S.A., Inc. $4,905,641 $ 2,064,204
========== ===========
</TABLE>
<TABLE>
<CAPTION>
Three months ended Net Sales Income from Interest Identifiable Capital Depreciation/
September 30, 1999 Operations Expense Assets Expenditures Amortization
------------------ ---------- ----------- -------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Power Transmission
Components $2,849,130 $(158,351) $ 54,227 $6,898,042 $ 16,477 $ 89,902
---------- --------- -------- ---------- -------- --------
Trailer and Implement
Components 991,318 24,582 10,640 2,962,369 12,601 10,140
---------- --------- -------- ---------- -------- --------
Corporate and Eliminations (119,636) 9,999
---------- --------- -------- ---------- -------- --------
Total Omni, U.S.A., Inc. $3,840,448 $(253,405) $ 74,866 $9,860,411 $ 29,078 $ 100,042
========== ========= ======== ========== ======== =========
</TABLE>
<TABLE>
<CAPTION>
Three months ended Net Sales Property and
September 30, 1999 Equipment
------------------ ---------- ------------
<S> <C> <C>
Domestic $3,567,063 $ 905,889
---------- -----------
Foreign 273,385 1,402,194
---------- -----------
Total Omni, U.S.A., Inc. $3,840,448 $ 2,308,083
========== ===========
</TABLE>
7
<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 that are generally met through a combination of internally
generated funds, a revolving line of credit facility and credit terms from
suppliers. The Company's $4,000,000 credit facility had an outstanding balance
of $2,435,795 at September 30, 2000. The Company had working capital of
$2,399,490 as of September 30, 2000 and working capital of $2,499,953 as of June
30, 2000, a decrease of $100,463 from June 30, 2000. The decrease in working
capital from June 30, 2000 was due primarily to the seasonal increase in
inventories and accounts payable together with a decrease in accounts
receivable, revolving line of credit and cash, in addition to other nominal
changes in working capital.
Accounts receivable balance of $2,755,847 as of September 30, 2000
decreased $422,857 compared to June 30, 2000 accounts receivable balance of
$3,178,704. This is in part due to the receivable collection period which
decreased from 56 days to 52 days from June 30, 2000 to September 30, 2000,
respectively. Inventory balance as of September 30, 2000 was $4,293,887; an
increase of $190,047 compared to June 30, 2000. Inventory increased during the
period to support additional sales levels in both business segments.
The Company had a cash balance of $379,813 as of September 30, 2000;
reflecting a negative cash flow of $207,231 compared to the June 30, 2000 cash
balance of $587,044. The Company's cash provided by operating activities for the
3 months ended September 30, 2000 of $88,156 consisted of the net loss for the
period of $123,060 plus non cash expenses, combined with an decrease in accounts
receivable and an increase accounts payable and inventories.
The Company's cash used in investing activities for the three months ended
September 30, 2000 of $63,422 consisted of capital expenditures for the period
primarily in the trailer and implement component segment.
Net cash used by financing activities for the three months ended September
30, 2000 of $231,965 consisted entirely of payments on the line of credit and
long-term debt.
The Company's current ratio was 1.46 as of September 30, 2000, which is
substantially the same as the June 30, 2000 current ratio of 1.46.
The Company believes that between its access to the line of 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, 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.
8
<PAGE>
Results for the Quarter ended September 30, 2000 compared with the Quarter ended
September 30, 1999
--------------------------------------------------------------------------------
The Company had net sales of $4,905,641 for the three months ended
September 30, 2000. This represents an increase of 28% compared to the three
months ended September 30, 1999 net sales of $3,840,448. The following table
indicates the Company's net sales comparison and percentage of change for the
three months ended September 30, 2000 and 1999:
<TABLE>
<CAPTION>
Quarter Ended % Quarter Ended % Dollar %
Net Sales 9/30/00 of Total 9/30/99 of Total Change Change
----------------------------- ------------- --------- ------------- -------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
Power Transmission Components $ 3,772,227 77% $ 2,849,130 74% $ 923,097 32%
----------- ---- ----------- ---- --------- ---
Trailer and Implement Components 1,133,414 23% 991,318 26% 142,096 14%
----------- ---- ----------- ---- --------- ---
Consolidated $ 4,905,641 100% $ 3,840,448 100% $1,065,193 28%
----------- ---- ----------- ---- --------- ---
</TABLE>
Gross profit for the three months ended September 30, 2000 increased
$119,023 to $970,759, compared to gross profit for the three months ended
September 30, 1999 of $851,736. The increase in sales and gross profit was
primarily attributable to internally generated growth through new and existing
customer relationships and new product development in both business segments.
Gross profit as a percentage of net sales for the three months ended September
30, 2000 decreased to 20% as compared to 22% for the three months ended
September 30, 1999. This decrease was primarily due to the product mix of sales
for the period.
Selling, general and administrative expenses decreased $116,032 to $989,109
in the three months ended September 30, 2000 from $1,105,141 in the three months
ended September 30, 1999. Due to increased sales and internal cost control
efforts, selling, general and administrative expenses as a percentage of sales
decreased to 20% for the three months ended September 30, 2000 from 29% for the
three months ended September 30, 1999.
Loss from operations for the Company decreased $235,055 to $18,350 for the
three months ended September 30, 2000, compared to a loss from operations of
$253,405 for the three months ended September 30, 1999. Loss from operations as
a percentage of sales decreased to (0.3%) in the three months ended September
30, 2000 compared to (6.6%) in the three months ended September 30, 1999. This
increase in both dollars and percentage of sales is the result of sales growth
and cost control efforts.
Interest expense increased $44,486, to $119,352 for the three months ended
September 30, 2000 from $74,866 for the three months ended September 30, 1999.
The increase resulted from an increased borrowing rate and borrowings associated
with the Company's line of credit to meet current inventory and working capital
needs and additional borrowing on other long-term debt.
Other income (expense) was income of $14,642 for the three months ended
September 30, 2000 compared to an expense of $58,631 for the three months ended
September 30, 1999. This change relates primarily to expensing un-amortized
organizational costs of $38,502 (relating to the implementation of Financial
Accounting Standards Board SOP 98-5 "Reporting on the Cost of Start-Up
Activities") in the first fiscal quarter ended September 30, 1999.
The Company's net loss decreased $263,842 to $123,060, or $0.03 per share,
for the three months ended September 30, 2000 compared to $386,902, or $0.11 per
share, for the three months ended September 30, 1999.
9
<PAGE>
Year 2000
---------
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.
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.
10
<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, 2000.
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.
11
<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, 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
12
<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, 2000 OMNI U.S.A., INC.
By:
----------------------
Jeffrey K. Daniel
President and Chief Executive Officer
By:
----------------------
David M. Sallean
Chief Financial Officer
13
