<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 12, 1998
OMEGA ENVIRONMENTAL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Commission File Number 0-20267
DELAWARE 91-1499751
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
19805 NORTH CREEK PARKWAY, PO BOX 3005
BOTHELL, WASHINGTON 98041-3005
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
425-486-4800
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
----------------------------------------------------------------------------
(FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE LAST
REPORT)
<PAGE>
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Since May 2, 1997, Registrant is operating under the protection of the
United States Bankruptcy Code as a debtor-in-possession.
ITEM 5. OTHER EVENTS
UNAUDITED FINANCIAL STATEMENT INFORMATION
On May 12, 1998, the Registrant filed unaudited financial statement
information as of and for each of the months ended February 28, 1998
and January 31, 1998 with related notes with the United States
Bankruptcy Court. Attached as an exhibit is the balance sheet
information, statement of operations information, statement of cash
flows information and related notes to financial statement information
which was included in the bankruptcy filing referred to above.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
c) EXHIBITS
99.1 Unaudited Comparative Balance Sheet Information, Comparative
Statement of Operations Information and Comparative Statement
of Cash Flow Information as of and for each of the months ended
February 28, 1998 and January 31, 1998 with related Notes to
Financial Statement Information.
<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 hereunto duly authorized.
OMEGA ENVIRONMENTAL, INC.
(Registrant)
/s/ Bradley S. Powell
Date: May 12, 1998 -------------------------------
Bradley S. Powell
Controller
<PAGE>
OMEGA ENVIRONMENTAL, INC. EXHIBIT 99.1
DEBTOR IN POSESSION CASE #97-06084
COMPARATIVE BALANCE SHEET INFORMATION
<TABLE>
<CAPTION>
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
FEB 28, 1998 JAN 31, 1998 FEB 28, 1998 JAN 31, 1998
ESD ESD CHANGE PSD PSD CHANGE
----------- ----------- -------- ---------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash 61,449 - 61,449 41,994 32,427 9,567
Restricted cash held in escrow 2,615,152 2,615,035 117 - - -
Accounts receivable - - - -
A/R--trade 11,744,735 12,212,079 (467,344) 2,125,704 2,165,575 (39,871)
A/R--interco 11,057 2,797 8,260 3,147 600 2,547
A/R--employees 5,996 13,540 (7,544) 19,397 20,483 (1,086)
A/R--supplemental 1,867,550 1,831,118 36,432 -
A/R--misc. 18,214 114 18,100 - - -
Allowance for doubtful accounts (2,508,835) (2,485,969) (22,866) (126,921) (156,734) 29,813
----------- ----------- -------- ---------- ----------- --------
Accounts receivable, net 11,138,717 11,573,679 (434,962) 2,021,327 2,029,924 (8,597)
----------- ----------- -------- ---------- ----------- --------
Costs and earnings in excess
of billings 5,997,717 5,801,236 196,481 - - -
Prepaid expenses 11,949 15,254 (3,305) 114,466 147,870 (33,404)
Inventory - 6,575 (6,575) 4,079,356 3,843,274 236,082
Inventory reserve - - - (1,713,671) (1,475,823) (237,848)
----------- ----------- -------- ---------- ----------- --------
Inventory, net - 6,575 (6,575) 2,365,685 2,367,451 (1,766)
----------- ----------- -------- ---------- ----------- --------
Other current assets - - - - - -
----------- ----------- -------- ---------- ----------- --------
TOTAL CURRENT ASSETS 19,824,984 20,011,779 (186,795) 4,543,472 4,577,672 (34,200)
----------- ----------- -------- ---------- ----------- --------
PROPERTY AND EQUIPMENT
Field equipment 2,090,125 2,085,155 4,970 323,298 323,298 -
Automotive equipment 939,324 939,324 - 619,625 619,625 -
Office furniture and equipment 798,850 790,707 8,143 1,106,027 1,094,950 11,077
Equipment under capital leases - -
Leasehold improvements 93,223 90,823 2,400 89,040 89,040 -
----------- ----------- -------- ---------- ----------- --------
TOTAL PROPERTY & EQUIP., AT COST 3,921,522 3,906,009 15,513 2,137,990 2,126,913 11,077
Accum. Depreciation (2,413,423) (2,360,432) (52,991) (1,151,620) (1,129,350) (22,270)
----------- ----------- -------- ---------- ----------- --------
TOTAL PROPERTY & EQUIP., NET 1,508,099 1,545,577 (37,478) 986,370 997,563 (11,193)
----------- ----------- -------- ---------- ----------- --------
Long-term accounts receivable -
Other (Texas) 1,031,421 1,031,768 (347) - - -
Other Assets 177,425 177,425 - - - -
Investment & Intercompany in
Subsidiaires - - - - - -
----------- ----------- -------- ---------- ----------- --------
TOTAL ASSETS 22,541,929 22,766,549 (224,620) 5,529,842 5,575,235 (45,393)
----------- ----------- -------- ---------- ----------- --------
----------- ----------- -------- ---------- ----------- --------
POST PETITION CURRENT LIABILITIES
Accounts payable 329,889 248,234 81,655 165,005 170,356 (5,351)
Line of Credit - - - - - -
Accrued expenses, excluding
bankruptcy costs 564,358 521,158 43,200 388,623 558,013 (169,390)
Accrued bankruptcy costs - - - - - -
Estimated claims against cash held
in escrow 2,560,602 2,560,602 - - - -
Billings in excess of costs &
earnings - - - - - -
Current portion of long term debt - - - - - -
Intercompany - BNYFC 8,393,348 8,568,693 (175,345) 8,245,943 7,960,560 285,383
Intercompany payables 1,783 4,411 (2,628) 2,774 959 1,815
----------- ----------- -------- ---------- ----------- --------
TOTAL POST PETITION CURRENT
LIABILITIES 11,849,980 11,903,098 (53,118) 8,802,345 8,689,888 112,457
Intercompany - BNYFC - - - - - -
Intercompany Notes Payable 8,741,768 8,741,768 - - -
Pre Petition Liabilities 2,342,693 2,379,450 (36,758) 1,127,055 917,214 209,841
Pre Petition Estimated Construction
Claims - - - - - -
----------- ----------- -------- ---------- ----------- --------
TOTAL LIABILITIES 22,934,442 23,024,316 (89,875) 9,929,400 9,607,102 322,298
----------- ----------- -------- ---------- ----------- --------
SHAREHOLDERS' EQUITY
Common stock at par 3,371,172 3,371,172
Additional paid in capital 17,791,864 17,791,864 10,742,189 10,742,189
Treasury Stock A-P-I-C
Retained earnings - prior (15,563,780) (15,563,780) (14,767,222) (14,767,222)
Y-T-D net income pre petition (26,496) (26,496) (247,894) (247,894)
Y-T-D net income post petition (2,594,101) (2,459,356) (134,745) (3,497,803) (3,130,112) (367,691)
----------- ----------- -------- ---------- ----------- --------
TOTAL SHAREHOLDERS' EQUITY (392,513) (257,767) (134,745) (4,399,558) (4,031,867) (367,691)
----------- ----------- -------- ---------- ----------- --------
TOTAL LIABILITIES & SHAREHOLDERS'
EQUITY 22,541,929 22,766,549 (224,620) 5,529,842 5,575,235 (45,393)
----------- ----------- -------- ---------- ----------- --------
----------- ----------- -------- ---------- ----------- --------
</TABLE>
See accompanying notes to financial statement information
<PAGE>
OMEGA ENVIRONMENTAL, INC.
DEBTOR IN POSESSION CASE #97-06084
COMPARATIVE BALANCE SHEET INFORMATION
<TABLE>
<CAPTION>
(UNAUDITED) (UNAUDITED)
(UNAUDITED) (UNAUDITED) FEB 28, 1998 JAN 31, 1998
FEB 28, 1998 JAN 31, 1998 CONTINUING CONTINUING
CORPORATE CORPORATE CHANGE OPERATIONS OPERATIONS CHANGE
----------------------------------------- -----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash 282,512 32,102 250,410 385,955 64,529 321,426
Restricted cash held in escrow - - - 2,615,152 2,615,035 117
Accounts receivable - -
A/R--trade 144,431 144,431 - 14,014,870 14,522,085 (507,215)
A/R--interco - 249,398 (249,398) 14,204 252,795 (238,591)
A/R--employees - - - 25,393 34,023 (8,630)
A/R--supplemental - 1,867,550 1,831,118 36,432
A/R--misc. 1,076,470 1,076,170 300 1,094,684 1,076,284 18,400
Allowance for doubtful accounts (1,138,467) (1,138,467) - (3,774,223) (3,781,170) 6,947
----------------------------------------- -----------------------------------------
Accounts receivable, net 82,434 331,532 (249,098) 13,242,478 13,935,135 (692,657)
----------------------------------------- -----------------------------------------
Costs and earnings in excess of
billings - - - 5,997,717 5,801,236 196,481
Prepaid expenses 363,827 592,451 (228,624) 490,242 755,575 (265,333)
Inventory - - - 4,079,356 3,849,849 229,507
Inventory reserve - - - (1,713,671) (1,475,823) (237,848)
----------------------------------------- -----------------------------------------
Inventory, net - - - 2,365,685 2,374,026 (8,341)
----------------------------------------- -----------------------------------------
Other current assets - - - - - -
----------------------------------------- -----------------------------------------
TOTAL CURRENT ASSETS 728,773 956,085 (227,312) 25,097,229 25,545,536 (448,307)
----------------------------------------- -----------------------------------------
PROPERTY AND EQUIPMENT
Field equipment - - - 2,413,423 2,408,453 4,970
Automotive equipment - - - 1,558,949 1,558,949 -
Office furniture and equipment 311,292 311,292 - 2,216,169 2,196,949 19,220
Equipment under capital leases - - - -
Leasehold improvements 21,780 21,780 - 204,043 201,643 2,400
----------------------------------------- -----------------------------------------
TOTAL PROPERTY & EQUIP., AT COST 333,072 333,072 - 6,392,584 6,365,994 26,590
Accum. Depreciation (276,565) (274,334) (2,231) (3,841,608) (3,764,116) (77,492)
----------------------------------------- -----------------------------------------
TOTAL PROPERTY & EQUIP., NET 56,507 58,738 (2,231) 2,550,976 2,601,878 (50,902)
----------------------------------------- -----------------------------------------
Long-term accounts receivable -
Other (Texas) - - - 1,031,421 1,031,768 (347)
Other Assets 359,717 469,516 (109,799) 537,142 646,941 (109,799)
Investment & Intercompany in
Subsidiaires 74,785,282 74,785,282 - 74,785,282 74,785,282 -
----------------------------------------- -----------------------------------------
TOTAL ASSETS 75,930,279 76,269,621 (339,342) 104,002,050 104,611,405 (609,355)
----------------------------------------- -----------------------------------------
----------------------------------------- -----------------------------------------
POST PETITION CURRENT LIABILITIES
Accounts payable 74,638 69,347 5,291 569,532 487,937 81,595
Line of Credit 20,196,803 20,076,141 120,662 20,196,803 20,076,141 120,662
Accrued expenses, excluding
bankruptcy costs 500,352 632,291 (131,939) 1,453,333 1,711,462 (258,129)
Accrued bankruptcy costs 2,489,639 2,232,839 256,800 2,489,639 2,232,839 256,800
Estimated claims against cash
held in escrow - - - 2,560,602 2,560,602 -
Billings in excess of costs &
earnings - - - - - -
Current portion of long term debt - - - - - -
Intercompany - BNYFC (19,578,681) (19,415,129) (163,552) (2,939,390) (2,885,876) (53,514)
Intercompany payables - - - 4,557 5,370 (813)
----------------------------------------- -----------------------------------------
TOTAL POST PETITION CURRENT
LIABILITIES 3,682,751 3,595,489 87,262 24,335,076 24,123,375 146,601
Intercompany - BNYFC - - - - - -
Intercompany Notes Payable - - - 8,741,768 8,741,768
Pre Petition Liabilities 2,534,371 2,536,070 (1,699) 6,004,119 5,832,734 171,384
Pre Petition Estimated Construction
Claims - - - - - -
----------------------------------------- -----------------------------------------
TOTAL LIABILITIES 6,217,122 6,131,559 85,563 39,080,964 38,762,977 317,986
----------------------------------------- -----------------------------------------
SHAREHOLDERS' EQUITY
Common stock at par 121,289 121,289 3,492,461 3,492,461
Additional paid in capital 128,204,630 128,204,630 156,738,683 156,738,683
Treasury Stock A-P-I-C (562,506) (562,506) (562,506) (562,506)
Retained earnings - prior (49,321,103) (49,321,103) (79,652,105) (79,652,105)
Y-T-D net income pre petition (895,498) (895,498) (1,169,888) (1,169,888)
Y-T-D net income post petition (7,833,655) (7,408,750) (424,905) (13,925,559) (12,998,218) (927,341)
----------------------------------------- -----------------------------------------
TOTAL SHAREHOLDERS' EQUITY 69,713,157 70,138,062 (424,905) 64,921,086 65,848,428 (927,341)
----------------------------------------- -----------------------------------------
TOTAL LIABILITIES & SHAREHOLDERS'
EQUITY 75,930,279 76,269,621 (339,342) 104,002,050 104,611,405 (609,355)
----------------------------------------- -----------------------------------------
----------------------------------------- -----------------------------------------
</TABLE>
<PAGE>
OMEGA ENVIRONMENTAL, INC.
DEBTOR IN POSSESSION CASE #97-06084
COMPARATIVE BALANCE SHEET INFORMATION
<TABLE>
<CAPTION>
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
FEB 28, 1998 JAN 31, 1998 FEB 28, 1998 JAN 31, 1998
DISCONTINUED DISCONTINUED COMBINED COMBINED
OPERATIONS OPERATIONS CHANGE FINAL FINAL CHANGE
------------------------------------------- -----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash - 3,602 (3,602) 385,955 68,131 317,824
Restricted cash held in escrow - - - 2,615,152 2,615,035 117
Accounts receivable
A/R--trade 6,190,228 6,485,992 (295,764) 20,205,098 21,008,077 (802,979)
A/R--interco 3,043 3,811 (768) - - -
A/R--employees - 4,400 (4,400) 25,393 38,423 (13,030)
A/R--supplemental - 1,867,550 1,831,118 36,432
A/R--misc. 143,449 152,384 (8,935) 1,238,133 1,228,668 9,465
Allowance for doubtful accounts (3,202,774) (3,243,198) 40,424 (6,976,997) (7,024,368) 47,371
------------------------------------------- -----------------------------------------
Accounts receivable, net 3,133,945 3,403,389 (269,444) 16,359,177 17,081,918 (722,741)
------------------------------------------- -----------------------------------------
Costs and earnings in excess of
billings - - - 5,997,717 5,801,236 196,481
Prepaid expenses - - - 490,242 755,575 (265,333)
Inventory - - - 4,079,356 3,849,849 229,507
Inventory reserve - - - (1,713,671) (1,475,823) (237,848)
------------------------------------------- -----------------------------------------
Inventory, net - - - 2,365,685 2,374,026 (8,341)
------------------------------------------- -----------------------------------------
Other current assets 83,773 94,078 (10,305) 83,773 94,078 (10,305)
------------------------------------------- -----------------------------------------
TOTAL CURRENT ASSETS 3,217,719 3,501,069 (283,350) 28,297,701 28,789,999 (492,298)
------------------------------------------- -----------------------------------------
PROPERTY AND EQUIPMENT
Field equipment 117,978 187,180 (69,202) 2,531,401 2,595,633 (64,232)
Automotive equipment 118,074 118,074 (0) 1,677,023 1,677,023 (0)
Office furniture and equipment 23,796 23,796 - 2,239,965 2,220,745 19,220
Leasehold improvements 130,767 136,072 (5,305) 334,810 337,715 (2,905)
------------------------------------------- -----------------------------------------
TOTAL PROPERTY & EQUIP., AT COST 390,615 465,122 (74,507) 6,783,199 6,831,116 (47,917)
Accum. Depreciation (274,524) (325,334) 50,810 (4,116,132) (4,089,450) (26,682)
------------------------------------------- -----------------------------------------
TOTAL PROPERTY & EQUIP., NET 116,091 139,788 (23,697) 2,667,067 2,741,666 (74,599)
------------------------------------------- -----------------------------------------
Long-term accounts receivable -
Other (Texas) - - - 1,031,421 1,031,768 (347)
Other Assets 20,815 20,815 0 557,957 667,756 (109,799)
Investment & Intercompany in
Subsidiaires - - - 425,000 425,000 -
------------------------------------------- -----------------------------------------
TOTAL ASSETS 3,354,625 3,661,672 (307,047) 32,979,146 33,656,189 (677,043)
------------------------------------------- -----------------------------------------
------------------------------------------- -----------------------------------------
POST PETITION CURRENT LIABILITIES
Accounts payable 30,803 48,549 (17,746) 600,335 536,486 63,849
Accrued expenses, excluding
bankruptcy costs 21,396 2,220 19,176 1,474,729 1,713,681 (238,952)
Accrued bankruptcy costs 2,489,639 2,232,839 256,800
Estimated claims against cash
held in escrow 2,560,602 2,560,602 -
Intercompany - BNYFC 2,939,390 2,885,876 53,514 - -
Intercompany payables 12,689 251,236 (238,547) - -
------------------------------------------- -----------------------------------------
TOTAL POST PETITION CURRENT
LIABILITIES 3,004,278 3,187,881 (183,603) 27,322,108 27,054,650 202,359
Intercompany Notes Payable 2,535,455 2,535,455
Pre Petition Liabilities 10,662,721 10,673,184 (10,463) 16,666,840 16,505,918 160,922
Pre Petition Estimated Construction
Claims 2,904,000 2,904,000 - 2,904,000 2,904,000 -
------------------------------------------- -----------------------------------------
TOTAL LIABILITIES 19,106,454 19,300,518 (194,066) 46,892,949 46,529,670 363,279
------------------------------------------- -----------------------------------------
SHAREHOLDERS' EQUITY
Common stock at par 2,082,948 2,082,948 121,289 121,289
Additional paid in capital 25,370,631 25,370,631 124,480,374 124,480,374
Treasury Stock A-P-I-C - - (562,506) (562,506)
Retained earnings - prior (32,353,339) (32,353,339) (112,005,444) (112,005,444)
Y-T-D net income pre petition (676,048) (676,048) (1,845,936) (1,845,936)
Y-T-D net income post petition (10,176,020) (10,063,039) (112,981) (24,101,579) (23,061,257) (1,040,322)
------------------------------------------- -----------------------------------------
TOTAL SHAREHOLDERS' EQUITY (15,751,829) (15,638,846) (112,981) (13,913,802) (12,873,477) (1,040,322)
------------------------------------------- -----------------------------------------
TOTAL LIABILITIES & SHAREHOLDERS'
EQUITY 3,354,625 3,661,672 (307,047) 32,979,146 33,656,189 (677,043)
------------------------------------------- -----------------------------------------
------------------------------------------- -----------------------------------------
</TABLE>
See accompanying notes to financial statement information
<PAGE>
OMEGA ENVIRONMENTAL, INC.
DEBTOR IN POSSESSION CASE #97-06084
COMPARATIVE STATEMENT OF
OPERATIONS INFORMATION
<TABLE>
<CAPTION>
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
MONTH ENDED MONTH ENDED MONTH ENDED MONTH ENDED
FEB 28, 1998 JAN 31, 1998 FEB 28, 1998 JAN 31, 1998
ESD ESD CHANGE PSD PSD CHANGE
------------ ------------ -------- ------------ ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
Sales 1,188,730 1,234,139 (45,409) 652,211 761,231 (109,020)
Cost of Sales 809,442 814,305 (4,863) 667,932 697,734 (29,802)
----------------------------------------------------------------------------------------
Gross Profit 379,288 419,834 (40,546) (15,721) 63,497 (79,218)
Selling, General, and
Administrative 373,755 383,461 (9,706) 244,381 232,383 11,998
----------------------------------------------------------------------------------------
Income (Loss) From Operations 5,533 36,373 (30,840) (260,102) (168,886) (91,216)
Other Income(Expense):
I/C Interest Income (Expense) (74,601) (85,543) 10,942 (71,024) (75,117) 4,093
Interest Expense (1,119) (1,671) 552 - - -
Interest Income 117 126 (9) - - -
Gain (loss) on Asset Disposition (1,824) - (1,824) - - -
Amortization / Write-off of
Goodwill - - - - - -
Other Expense (62,851) (100,175) 37,324 (36,565) (1,448) (35,117)
Other Income - - - - - -
----------------------------------------------------------------------------------------
Total Other (Expense) (140,278) (187,263) 46,985 (107,589) (76,565) (31,024)
Net Loss Before Bankruptcy
Administrative Expenses (134,745) (150,890) 16,145 (367,691) (245,451) (122,240)
Bankruptcy Administrative Expenses
----------------------------------------------------------------------------------------
Net Loss (134,745) (150,890) 16,145 (367,691) (245,451) (122,240)
----------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statement information
<PAGE>
OMEGA ENVIRONMENTAL, INC.
DEBTOR IN POSSESSION CASE #97-06084
COMPARATIVE STATEMENT OF
OPERATIONS INFORMATION
<TABLE>
<CAPTION>
(UNAUDITED) (UNAUDITED)
(UNAUDITED) (UNAUDITED) MONTH ENDED MONTH ENDED
MONTH ENDED MONTH ENDED FEB 28, 1998 JAN 31, 1998
FEB 28, 1998 JAN 31, 1998 CONTINUING CONTINUING
CORPORATE CORPORATE CHANGE OPERATIONS OPERATIONS CHANGE
------------ ------------ -------- ------------ ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
Sales - - - 1,840,941 1,995,370 (154,429)
Cost of Sales - - - 1,477,374 1,512,039 (34,665)
--------------------------------------------------------------------------------------
Gross Profit - - - 363,567 483,331 (119,764)
Selling, General, and
Administrative 244,153 256,975 (12,822) 862,289 872,819 (10,530)
--------------------------------------------------------------------------------------
Income (Loss) From Operations (244,153) (256,975) 12,822 (498,722) (389,488) (109,234)
Other Income(Expense):
I/C Interest Income (Expense) 145,625 160,629 (15,004) - (31) 31
Interest Expense (166,397) (181,391) 14,994 (167,516) (183,062) 15,546
Interest Income - 1,716 (1,716) 117 1,842 (1,725)
Gain (loss) on Asset Disposition - - - (1,824) - (1,824)
Amortization / Write-off of Goodwill - - - - - -
Other Expense (6,980) (10,813) 3,833 (106,396) (112,436) 6,040
Other Income - (1,038) 1,038 - (1,038) 1,038
--------------------------------------------------------------------------------------
Total Other (Expense) (27,752) (30,897) 3,145 (275,619) (294,725) 19,106
Net Loss Before Bankruptcy
Administrative Expenses (271,905) (287,872) 15,967 (774,341) (684,213) (90,128)
Bankruptcy Administrative Expenses (153,000) (150,000) (3,000) (153,000) (150,000) (3,000)
--------------------------------------------------------------------------------------
Net Loss (424,905) (437,872) 12,967 (927,341) (834,213) (93,128)
--------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statement information
<PAGE>
OMEGA ENVIRONMENTAL, INC.
DEBTOR IN POSSESSION CASE #97-06084
COMPARATIVE STATEMENT OF
OPERATIONS INFORMATION
<TABLE>
<CAPTION>
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
MONTH ENDED MONTH ENDED MONTH ENDED MONTH ENDED
FEB 28, 1998 JAN 31, 1998 FEB 28, 1998 JAN 31, 1998
DISCONTINUED DISCONTINUED COMBINED COMBINED
OPERATIONS OPERATIONS CHANGE FINAL FINAL CHANGE
-------------------------------------------- -------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales - - - 1,843,738 1,998,167 (154,429)
Cost of Sales - - - 1,480,171 1,514,836 (34,665)
-------------------------------------------- -------------------------------------------
Gross Profit - - - 363,567 483,331 (119,764)
Selling, General, and
Administrative 363 1,904 (1,541) 862,652 874,723 (12,071)
-------------------------------------------- -------------------------------------------
Income (Loss) From Operations (363) (1,904) 1,541 (499,085) (391,392) (107,693)
Other Income(Expense):
I/C Interest Income (Expense) - 155 (155) - 124 (124)
Interest Expense - - - (167,516) (183,062) 15,546
Interest Income 12 - 12 129 1,842 (1,713)
Gain (loss) on Asset Disposition 12,082 9,609 2,473 10,258 9,609 649
Amortization / Write-off of
Goodwill - - - - - -
Other Expense (132,485) (316,498) 184,013 (238,881) (428,934) 190,053
Other Income 7,773 - 7,773 7,773 (1,038) 8,811
-------------------------------------------- -------------------------------------------
Total Other (Expense) (112,618) (306,734) 194,116 (388,237) (601,459) 213,222
Net Loss Before Bankruptcy
Administrative Expenses (112,981) (308,638) 195,658 (887,322) (992,851) 105,529
Bankruptcy Administrative Expenses - (153,000) (150,000) (3,000)
-------------------------------------------- -------------------------------------------
Net Loss (112,981) (308,638) 195,658 (1,040,322) (1,142,851) 102,529
-------------------------------------------- -------------------------------------------
</TABLE>
See accompanying notes to financial statement information
<PAGE>
OMEGA ENVIRONMENTAL, INC.
DEBTOR IN POSSESSION CASE # 97 - 06084
COMPARATIVE COMBINED STATEMENT OF CASH FLOWS INFORMATION
<TABLE>
<CAPTION>
(UNAUDITED) (UNAUDITED)
MONTH ENDED MONTH ENDED
FEB 28, 1998 JAN 31, 1998 CHANGE
-------------- -------------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss ($1,040,322) ($1,142,851) $102,529
Adjustments to reconcile net loss to net cash
(used in) provided by operating activities:
Depreciation 84,896 85,232 (336)
Additional costs in excess of billings reserves 62,851 100,175 (37,324)
(Gain) Loss on sale of property and equipment (10,258) (9,609) (649)
Change in certain assets & liabilities:
(Increase) decrease in:
Receivables 722,741 661,969 60,772
Costs in excess of billings (259,332) 159,712 (419,044)
Inventory 8,341 (15,062) 23,403
Prepaids & other assets 275,638 95,404 180,234
Increase (decrease) in:
Accounts payable 63,849 (70,458) 134,306
Accrued expenses 17,845 (58,708) 76,553
Other net changes in assets and liabilities 110,030 (42,220) 152,249
-------------- -------------- -----------
Total adjustments 1,076,600 906,436 170,164
-------------- -------------- -----------
Net cash provided by operating activities 36,278 (236,415) 272,693
Cash flows from investing activities:
Proceeds from sale of equipment 3,675 10,433 (6,758)
Additions to property and equipment (3,714) (2,519) (1,195)
-------------- -------------- -----------
Net cash provided by (used in) investing activities (39) 7,914 (7,953)
Cash flows from financing and other activities:
Net proceeds (repayments) from revolver credit loan 120,662 (20,962) 141,624
Increase (decrease) in pre petition liabilities 160,922 (201,547) 362,469
-------------- -------------- -----------
Net cash provided by (used in) financing activities 281,584 (222,509) 504,093
-------------- -------------- -----------
Net increase in cash 317,824 (451,010) 768,833
CASH AT BEGINNING OF PERIOD 68,131 519,141 (451,010)
-------------- -------------- -----------
CASH AT END OF PERIOD $385,955 $68,131 $317,823
-------------- -------------- -----------
-------------- -------------- -----------
</TABLE>
See accompanying notes to financial statement information
<PAGE>
EXHIBIT 99.1
Omega Environmental, Inc.
Debtor in Possession Case # 97-06084
February 28, 1998 Financial Reporting Information
Notes to Financial Statement Information
Basis of Presentation
The financial statement information presented is unaudited and does not
comply with generally accepted accounting principles. Additionally,
significant estimates were used in the preparation of this financial
statement information and actual results may vary significantly from these
estimates.
BNY Financial Corporation
According to BNY Financial Corporation ("BNYFC") as of February 28, 1998, the
Company's borrowings from BNYFC were $20,196,803. The debtor-in-possession
financing agreement expired December 31, 1997 and was extended through
January 31, 1998. As of the end of February, the Company was negotiating
with BNYFC for additional debtor-in-possession financing. The negotiations
were not successful as of the end of February and were not successful as of
the filing of this report.
Costs and earnings in excess of billing
The asset, "Costs and earnings in excess of billings" recorded on the
Environmental Services Division's balance sheet, represents estimated
revenues recognized in excess of amounts billed using the percentage of
completion method of contract accounting. In the past, as projects were
completed and billed significant write-offs of this asset were recorded in
excess of reserves provided. Management is in the process of instituting new
procedures for earlier identification of potential write-offs and is
analyzing current fixed-price contracts and related costs incurred to
determine estimated profitability. The results of these new procedures and
analysis are not complete and any adjustment to this asset may have a
material adverse effect on the financial statements.
Accounts receivable
Accounts receivable recorded on the Environmental Services Division's balance
sheet are primarily due from various State reimbursement programs for clean
up of leaking underground storage tanks. Management is in the process of
analyzing the collectability of these accounts and estimated bad debts may be
significantly in excess of established reserves. The results of this
analysis are not complete at this time and any adjustment may have a material
adverse effect on the financial statements.
<PAGE>
Accounts receivable recorded on the Discontinued Operation's balance sheet
represents amounts recorded as due from customers in the company's
discontinued construction activities. The amounts ultimately collected by
the company will be significantly less than net recorded amounts in part
because of set-offs, liens, bonding issues and customer disputes which may
result in refusal to pay receivable amounts or require payment or set-off of
pre-petition liabilities and claims. The amount ultimately collectible is
not determinable at this time.
Inventory
Inventory recorded on the Petroleum Services Division's balance sheet
consists primarily of component parts for servicing retail and commercial
fueling facilities. The use of these parts has decreased significantly due
to the decline in the level of business activity from prior periods.
Management is in the process of selling excess parts. Losses on sale of
these excess parts may exceed recorded reserves. The amount of loss can not
be determined at this time.
