<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) December 16, 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 IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
11818 NORTH CREEK PARKWAY NORTH, SUITE 105, 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 OR FORMER ADDRESS, 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 December 16, 1998, the Registrant filed unaudited financial
statement information as of and for each of the months ended October
31, 1998 and September 30, 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
October 31, 1998 and September 30, 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)
Date: December 16, 1998 /s/ Donald E. Condit
------------------------------
Donald E. Condit
Chief Financial Officer
<PAGE>
OMEGA ENVIRONMENTAL, INC. EXHIBIT 99.1
DEBTOR IN POSESSION CASE #97-06084
COMPARATIVE BALANCE SHEET INFORMATION
<TABLE>
<CAPTION>
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
OCT. 31, 1998 SEPT. 30, 1998 OCT. 31, 1998 SEPT. 30, 1998
ESD ESD CHANGE PSD PSD CHANGE
---------------------------------------- -----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash 51,514 9,629 41,885 33,400 35,386 (1,986)
Restricted cash held in escrow 2,732,634 2,729,555 3,079 -
Accounts receivable
A/R--trade 12,095,191 12,229,388 (134,197) 678,513 947,480 (268,967)
A/R--interco 865 168 697 - 11,672 (11,672)
A/R--employees 8,551 9,332 (781) 9,561 10,003 (442)
A/R--supplemental 1,727,115 1,729,432 (2,317) -
A/R--misc. 12,078 12,078 - - - -
Allowance for doubtful accounts (2,272,144) (2,214,480) (57,664) (64,359) (60,105) (4,254)
---------------------------------------- -----------------------------------------
Accounts receivable, net 11,571,656 11,765,918 (194,262) 623,715 909,050 (285,335)
---------------------------------------- -----------------------------------------
Costs and earnings in excess of billings 5,609,819 5,259,905 349,914 -
Prepaid expenses 57,420 84,755 (27,335) 64,085 66,885 (2,800)
Inventory - 1,853,020 1,868,762 (15,742)
Inventory reserve - (782,690) (775,755) (6,935)
---------------------------------------- -----------------------------------------
Inventory, net - - - 1,070,330 1,093,007 (22,677)
---------------------------------------- -----------------------------------------
Other current assets - -
---------------------------------------- -----------------------------------------
TOTAL CURRENT ASSETS 20,023,043 19,849,762 173,281 1,791,530 2,104,328 (312,798)
---------------------------------------- -----------------------------------------
PROPERTY AND EQUIPMENT
Field equipment 2,435,403 2,435,403 - 547,106 547,106 -
Automotive equipment 1,026,959 1,026,959 - 44,973 111,546 (66,573)
Office furniture and equipment 981,944 961,223 20,721 38,329 38,329 -
Leasehold improvements 93,223 93,223 - 30,895 30,895 -
---------------------------------------- -----------------------------------------
TOTAL PROPERTY & EQUIP., AT COST 4,537,529 4,516,808 20,721 661,303 727,876 (66,573)
Accum. Depreciation (3,224,889) (3,166,180) (58,709) (345,710) (392,021) 46,311
---------------------------------------- -----------------------------------------
TOTAL PROPERTY & EQUIP., NET 1,312,640 1,350,628 (37,988) 315,593 335,855 (20,262)
---------------------------------------- -----------------------------------------
Long-term accounts receivable - Other (Texas) 2,426 11,426 (9,000) - - -
Reserve for Long-term accounts receivable - - - -
---------------------------------------- -----------------------------------------
Long-term accounts receviable -
Other (Texas), net 2,426 11,426 (9,000) - - -
Other Assets 225,549 222,360 3,189 - - -
Investment & Intercompany in Subsidiaires - - - -
---------------------------------------- -----------------------------------------
TOTAL ASSETS 21,563,658 21,434,176 129,482 2,107,123 2,440,183 (333,060)
---------------------------------------- -----------------------------------------
---------------------------------------- -----------------------------------------
POST PETITION CURRENT LIABILITIES
Accounts payable 819,921 874,613 (54,692) 38,437 58,632 (20,195)
Line of Credit -
Accrued expenses, excluding bankruptcy costs 775,452 689,875 85,577 310,493 302,595 7,898
Accrued bankruptcy costs -
Estimated claims against cash held in escrow 2,572,905 2,569,825 3,080 -
Intercompany - BNYFC 7,542,932 7,445,963 96,969 7,762,701 7,961,732 (199,031)
Intercompany payables 4,919 11,672 (6,753) 865 - 865
---------------------------------------- -----------------------------------------
TOTAL POST PETITION CURRENT LIABILITIES 11,716,129 11,591,948 124,181 8,112,496 8,322,959 (210,463)
Intercompany Notes Payable 8,741,768 8,741,768 - -
Pre Petition Liabilities 1,628,694 1,637,118 (8,424) 1,087,170 1,089,536 (2,366)
Pre Petition Estimated Construction Claims -
---------------------------------------- -----------------------------------------
TOTAL LIABILITIES 22,086,591 21,970,834 115,757 9,199,666 9,412,495 (212,829)
---------------------------------------- -----------------------------------------
SHAREHOLDERS' EQUITY
Common stock at par 3,371,172 3,371,172 -
Additional paid in capital 14,557,677 14,557,677 - 10,742,189 10,742,189 -
Treasury Stock A-P-I-C -
Retained earnings - prior (11,012,975) (11,012,975) - (14,767,222) (14,767,222) -
Y-T-D net income pre petition (8,531) (8,531) - (247,894) (247,894) -
Y-T-D net income post petition (4,059,104) (4,072,829) 13,725 (6,190,788) (6,070,557) (120,231)
---------------------------------------- -----------------------------------------
TOTAL SHAREHOLDERS' EQUITY (522,933) (536,658) 13,725 (7,092,543) (6,972,312) (120,231)
---------------------------------------- -----------------------------------------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY 21,563,658 21,434,176 129,482 2,107,123 2,440,183 (333,060)
---------------------------------------- -----------------------------------------
---------------------------------------- -----------------------------------------
</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) OCT. 31, 1998 SEPT. 30, 1998
OCT. 31, 1998 SEPT. 30, 1998 CONTINUING CONTINUING
CORPORATE CORPORATE CHANGE OPERATIONS OPERATIONS CHANGE
---------------------------------------- -----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash 207,659 73,857 133,802 292,573 118,872 173,701
Restricted cash held in escrow - 2,732,634 2,729,555 3,079
Accounts receivable
A/R--trade 144,431 144,431 - 12,918,135 13,321,299 (403,164)
A/R--interco 4,919 4,919 5,784 11,840 (6,056)
A/R--employees - 18,112 19,335 (1,223)
A/R--supplemental - 1,727,115 1,729,432 (2,317)
A/R--misc. 1,076,094 1,076,094 - 1,088,172 1,088,172 -
Allowance for doubtful accounts (1,138,466) (1,138,467) 1 (3,474,969) (3,413,052) (61,917)
---------------------------------------- -----------------------------------------
Accounts receivable, net 86,978 82,058 4,920 12,282,349 12,757,026 (474,677)
---------------------------------------- -----------------------------------------
Costs and earnings in excess of billings - 5,609,349 5,259,905 340,914
Prepaid expenses 407,576 298,366 109,210 529,081 450,006 79,075
Inventory - 1,853,020 1,868,762 (15,742)
Inventory reserve - (782,690) (775,755) (6,935)
---------------------------------------- -----------------------------------------
Inventory, net - - - 1,070,330 1,093,007 (22,677)
---------------------------------------- -----------------------------------------
Other current assets - - - -
---------------------------------------- -----------------------------------------
TOTAL CURRENT ASSETS 702,213 454,281 247,932 22,516,786 22,408,371 108,415
---------------------------------------- -----------------------------------------
PROPERTY AND EQUIPMENT
Field equipment - 2,982,509 2,982,509 -
Automotive equipment - 1,071,932 1,138,505 (66,573)
Office furniture and equipment 125,959 192,606 (66,647) 1,146,232 1,192,158 (45,926)
Leasehold improvements - - - 124,118 124,118 -
---------------------------------------- -----------------------------------------
TOTAL PROPERTY & EQUIP., AT COST 125,959 192,606 (66,647) 5,324,791 5,437,290 (112,499)
Accum. Depreciation (108,233) (154,805) 46,572 (3,678,832) (3,713,006) 34,174
---------------------------------------- -----------------------------------------
TOTAL PROPERTY & EQUIP., NET 17,726 37,801 (20,075) 1,645,959 1,724,284 (78,325)
---------------------------------------- -----------------------------------------
Long-term accounts receivable - Other (Texas) - - - 2,426 11,426 (9,000)
Reserve for Long-term accounts receivable - - - -
---------------------------------------- -----------------------------------------
Long-term accounts receviable -
Other (Texas), net - - - 2,426 11,426 (9,000)
Other Assets 129,907 129,907 - 355,456 352,267 3,189
Investment & Intercompany in Subsidiaires 74,399,948 74,399,948 - 74,399,948 74,399,948 -
---------------------------------------- -----------------------------------------
TOTAL ASSETS 75,249,794 75,021,937 227,857 98,920,575 98,896,296 24,279
---------------------------------------- -----------------------------------------
---------------------------------------- -----------------------------------------
POST PETITION CURRENT LIABILITIES
Accounts payable 73,209 36,205 37,004 931,567 969,450 (37,883)
Line of Credit 21,760,531 21,988,501 (227,970) 21,760,531 21,988,501 (227,970)
Accrued expenses, excluding bankruptcy costs 401,369 315,928 85,441 1,487,314 1,308,398 178,916
Accrued bankruptcy costs 1,832,562 1,168,073 664,489 1,832,562 1,168,073 664,489
Estimated claims against cash held in escrow - 2,572,905 2,569,825 3,080
Intercompany - BNYFC (18,134,797) (18,598,232) 563,435 (2,829,164) (3,290,537) 481,373
Intercompany payables - 168 (168) 5,784 11,840 (6,056)
---------------------------------------- -----------------------------------------
TOTAL POST PETITION CURRENT LIABILITIES 5,932,874 4,810,643 1,122,231 25,761,499 24,725,550 1,035,949
Intercompany Notes Payable - 8,741,768 8,741,768
Pre Petition Liabilities 2,530,451 2,530,451 - 5,246,315 5,257,105 (10,790)
Pre Petition Estimated Construction Claims - - - -
---------------------------------------- -----------------------------------------
TOTAL LIABILITIES 8,463,325 7,341,094 1,122,231 39,749,582 38,724,423 1,025,159
---------------------------------------- -----------------------------------------
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 - 153,504,496 153,504,496 -
Treasury Stock A-P-I-C (562,506) (562,506) - (562,506) (562,506) -
Retained earnings - prior (49,321,103) (49,321,103) - (75,101,300) (75,101,300) -
Y-T-D net income pre petition (895,498) (895,498) - (1,151,923) (1,151,923) -
Y-T-D net income post petition (10,760,343) (9,865,969) (894,374) (21,010,235) (20,009,355) (1,000,880)
---------------------------------------- -----------------------------------------
TOTAL SHAREHOLDERS' EQUITY 66,786,469 67,680,843 (894,374) 59,170,993 60,171,873 (1,000,880)
---------------------------------------- -----------------------------------------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY 75,249,794 75,021,937 227,857 98,920,575 98,896,296 24,279
---------------------------------------- -----------------------------------------
---------------------------------------- -----------------------------------------
</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)
OCT. 31, 1998 SEPT. 30, 1998 OCT. 31, 1998 SEPT. 30, 1998
DISCONTINUED DISCONTINUED COMBINED COMBINED
OPERATIONS OPERATION CHANGE FINAL FINAL CHANGE
---------------------------------------- -----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash - - - 292,573 118,872 173,701
Restricted cash held in escrow - 2,732,634 2,729,555 3,079
Accounts receivable
A/R--trade 5,082,108 5,379,087 (296,979) 18,000,243 19,026,146 (1,025,903)
A/R--interco - - - - - -
A/R--employees - 18,112 19,335 (1,223)
A/R--supplemental - 1,727,115 1,729,432 (2,317)
A/R--misc. 33,806 33,806 - 1,121,978 1,121,978 -
Allowance for doubtful accounts (3,263,817) (3,263,817) - (6,738,786) (6,676,869) (61,917)
---------------------------------------- -----------------------------------------
Accounts receivable, net 1,852,097 2,149,076 (296,979) 14,128,662 15,220,022 (1,091,360)
---------------------------------------- -----------------------------------------
Costs and earnings in excess of billings - 5,609,819 5,259,905 349,914
Prepaid expenses - 529,081 450,006 79,075
Inventory - 1,853,020 1,868,762 (15,742)
Inventory reserve - (782,690) (775,755) (6,935)
---------------------------------------- -----------------------------------------
Inventory, net - - - 1,070,330 1,093,007 (22,677)
---------------------------------------- -----------------------------------------
Other current assets 10,000 94,078 (84,078) 10,000 94,078 (84,078)
---------------------------------------- -----------------------------------------
TOTAL CURRENT ASSETS 1,862,097 2,243,154 (381,057) 24,373,099 24,965,445 (592,346)
---------------------------------------- -----------------------------------------
PROPERTY AND EQUIPMENT
Field equipment 1,000 1,000 - 2,983,509 2,983,509 -
Automotive equipment - - - 1,071,932 1,138,505 (66,573)
Office furniture and equipment - - - 1,146,232 1,192,158 (45,926)
Leasehold improvements - - - 124,118 124,118 -
---------------------------------------- -----------------------------------------
TOTAL PROPERTY & EQUIP., AT COST 1,000 1,000 - 5,325,791 5,438,290 (112,499)
Accum. Depreciation - - - (3,678,832) (3,713,006) 34,174
---------------------------------------- -----------------------------------------
TOTAL PROPERTY & EQUIP., NET 1,000 1,000 - 1,646,959 1,725,284 (78,325)
---------------------------------------- -----------------------------------------
Long-term accounts receivable - Other (Texas) - - - 2,426 11,426 (9,000)
Reserve for Long-term accounts receivable - - - -
---------------------------------------- -----------------------------------------
Long-term accounts receviable -
Other (Texas), net - - - 2,426 11,426 (9,000)
Other Assets - 100 (100) 355,456 352,367 3,089
Investment & Intercompany in Subsidiaires - 39,665 39,665 -
---------------------------------------- -----------------------------------------
TOTAL ASSETS 1,863,097 2,244,254 (381,157) 26,417,605 27,094,187 (676,582)
---------------------------------------- -----------------------------------------
---------------------------------------- -----------------------------------------
POST PETITION CURRENT LIABILITIES
Accounts payable - - - 931,567 969,450 (37,883)
Line of Credit 21,760,531 21,988,501 (227,970)
Accrued expenses, excluding bankruptcy costs - - - 1,487,314 1,308,398 178,916
Accrued bankruptcy costs 1,832,562 1,168,073 664,489
Estimated claims against cash held in escrow 2,572,905 2,569,825 3,080
Intercompany - BNYFC 2,829,164 2,964,777 (135,613) - - -
Intercompany payables - - - - - -
---------------------------------------- -----------------------------------------
TOTAL POST PETITION CURRENT LIABILITIES 2,829,164 2,964,777 (135,613) 28,584,879 28,004,247 580,632
Intercompany Notes Payable 2,535,455 2,535,455 -
Pre Petition Liabilities 10,814,353 10,814,353 - 16,060,668 16,071,458 (10,790)
Pre Petition Estimated Construction Claims 2,404,000 2,404,000 - 2,404,000 2,404,000 -
---------------------------------------- -----------------------------------------
TOTAL LIABILITIES 18,582,972 18,718,585 (135,613) 47,049,547 46,479,705 569,842
---------------------------------------- -----------------------------------------
SHAREHOLDERS' EQUITY
Common stock at par 2,082,948 2,082,948 - 121,289 121,289 -
Additional paid in capital 28,604,818 28,604,818 - 124,480,374 124,480,374 -
Treasury Stock A-P-I-C - (562,506) (562,506) -
Retained earnings - prior (36,904,145) (36,904,145) - (112,005,445) (112,005,445) -
Y-T-D net income pre petition (694,013) (694,013) - (1,845,936) (1,845,936) -
Y-T-D net income post petition (9,809,483) (9,563,939) (245,544) (30,819,718) (29,573,294) (1,246,424)
---------------------------------------- -----------------------------------------
TOTAL SHAREHOLDERS' EQUITY (16,719,875) (16,474,331) (245,544) (20,631,942) (19,385,518) (1,246,424)
---------------------------------------- -----------------------------------------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY 1,863,097 2,244,254 (381,157) 26,417,605 27,094,187 (676,582)
---------------------------------------- -----------------------------------------
---------------------------------------- -----------------------------------------
</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
OCT. 31, 1998 SEPT. 30, 1998 OCT. 31, 1998 SEPT. 30, 1998
ESD ESD CHANGE PSD PSD CHANGE
------------------------------------------ -----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales 1,673,351 1,655,398 17,953 286,854 271,203 15,651
Cost of Sales 1,186,905 1,171,058 15,847 267,859 281,551 (13,692)
------------------------------------------ -----------------------------------------
Gross Profit 486,446 484,340 2,106 18,995 (10,348) 29,343
Selling, General, and Administrative 405,170 395,718 9,452 104,348 129,818 (25,470)
------------------------------------------ -----------------------------------------
Income (Loss) From Operations 81,276 88,622 (7,346) (85,353) (140,166) 54,813
Other Income(Expense):
I/C Interest Income (Expense) (66,974) (65,656) (1,318) (68,167) (70,049) 1,882
Interest Expense - - - -
Interest Income - - - -
Gain (loss) on Asset Disposition - - - 32,534 (7,891) 40,425
Other Expense (577) (165,461) 164,884 755 6,246 (5,491)
------------------------------------------ -----------------------------------------
Total Other (Expense) (67,551) (231,117) 163,566 (34,878) (71,694) 36,816
Net Income (Loss) Before Bankruptcy
Administrative Expenses 13,725 (142,495) 156,220 (120,231) (211,860) 91,629
Bankruptcy Administrative Expenses -
------------------------------------------ -----------------------------------------
Net Income (Loss) 13,725 (142,495) 156,220 (120,231) (211,860) 91,629
------------------------------------------ -----------------------------------------
</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 OCT. 31, 1998 SEPT. 30, 1998
OCT. 31, 1998 SEPT. 30, 1998 CONTINUING CONTINUING
CORPORATE CORPORATE CHANGE OPERATIONS OPERATIONS CHANGE
------------------------------------------ -----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales - - - 1,960,205 1,926,601 33,604
Cost of Sales - - - 1,454,764 1,452,609 2,155
------------------------------------------ -----------------------------------------
Gross Profit - - - 505,441 473,992 31,449
Selling, General, and Administrative 100,017 107,057 (7,040) 609,535 632,593 (23,058)
------------------------------------------ -----------------------------------------
Income (Loss) From Operations (100,017) (107,057) 7,040 (104,094) (158,601) 54,507
Other Income(Expense):
I/C Interest Income (Expense) 135,141 135,705 (564) - - -
Interest Expense (199,659) (210,203) 10,544 (199,659) (210,203) 10,544
Interest Income - - - -
Gain (loss) on Asset Disposition (19,487) (19,487) 13,047 (7,891) 20,938
Other Expense (25,000) (25,000) - (24,822) (184,215) 159,393
------------------------------------------ -----------------------------------------
Total Other (Expense) (109,005) (99,498) (9,507) (211,434) (402,309) 190,875
Net Income (Loss) Before Bankruptcy
Administrative Expenses (209,022) (206,555) (2,467) (315,528) (560,910) 245,382
Bankruptcy Administrative Expenses (685,352) (3,882) (681,470) (685,352) (3,882) (681,470)
------------------------------------------ -----------------------------------------
Net Income (Loss) (894,374) (210,437) (683,937) (1,000,880) (564,792) (436,088)
------------------------------------------ -----------------------------------------
</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
OCT. 31, 1998 SEPT. 30, 1998 OCT. 31, 1998 SEPT. 30, 1998
DISCONTINUED DISCONTINUED COMBINED COMBINED
OPERATIONS OPERATIONS CHANGE FINAL FINAL CHANGE
------------------------------------------ -----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales - 1,960,205 1,926,601 33,604
Cost of Sales - 1,454,764 1,452,609 2,155
------------------------------------------ -----------------------------------------
Gross Profit - - - 505,441 473,992 31,449
Selling, General, and Administrative - 609,535 632,593 (23,058)
------------------------------------------ -----------------------------------------
Income (Loss) From Operations - - - (104,094) (158,601) 54,507
Other Income (Expense):
I/C Interest Income (Expense) - - - -
Interest Expense - (199,659) (210,203) 10,544
Interest Income - - - -
Gain (loss) on Asset Disposition 92,627 (92,627) 13,047 84,736 (71,689)
Other Expense (245,544) (23,745) (221,799) (270,366) (207,960) (62,406)
------------------------------------------ -----------------------------------------
Total Other (Expense) (245,544) 68,882 (314,426) (456,978) (333,427) (123,551)
Net Income (Loss) Before Bankruptcy
Administrative Expenses (245,544) 68,882 (314,426) (561,072) (492,028) (69,044)
Bankruptcy Administrative Expenses - (685,352) (3,882) (681,470)
------------------------------------------ -----------------------------------------
Net Income (Loss) (245,544) 68,882 (314,426) (1,246,424) (495,910) (750,514)
------------------------------------------ -----------------------------------------
</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
OCT. 31, 1998 SEPT. 30, 1998 CHANGE
--------------- ---------------- ----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss ($1,246,424) ($495,910) ($750,514)
Adjustments to reconcile net loss to net cash
(used in) provided by operating activities:
Depreciation 71,100 71,095 5
Additional reserves for costs in excess of billings 165,795 (165,795)
Write off of investments in subsidiaries 85,335 (85,335)
Write down of property and equipment 7,606 (7,606)
(Gain) / Loss on sale of property and equipment 13,047 (84,736) 97,783
Change in certain assets & liabilities:
(Increase) decrease in:
Receivables, net 1,091,360 (259,769) 1,351,129
Costs in excess of billings (349,914) (434,325) 84,411
Inventory, net 22,677 (15,497) 38,174
Prepaids & other assets 5,003 93,153 (88,150)
Increase (decrease) in:
Accounts payable (37,883) 294,743 (332,626)
Accrued expenses 843,405 (357,229) 1,200,634
Other net changes in assets and liabilities 5,912 851,903 (845,991)
Total adjustments 1,664,707 418,074 1,246,633
---------- --------- ---------
Net cash provided by (used in) operating activities 418,283 (77,836) 496,119
---------- --------- ---------
Cash flows from investing activities :
Proceeds from sale of equipment 0 157,470 (157,470)
Additions to property and equipment (5,822) (141,092) 135,270
Net cash provided by (used in) investing activities (5,822) 16,378 (22,200)
---------- --------- ---------
Cash flows from financing and other activities:
Net proceeds (repayments) from revolver credit loan (227,970) 64,262 (292,232)
Reduction of pre-petition liabilities (10,790) (20,571) 9,781
Net cash provided by (used in) financing activities (238,760) 43,691 (282,451)
---------- --------- ---------
Net increase (decrease) in cash 173,701 (17,767) 191,468
---------- --------- ---------
CASH AT BEGINNING OF PERIOD 118,872 136,639 (17,767)
---------- --------- ---------
CASH AT END OF PERIOD $292,573 $118,872 $173,701
---------- --------- ---------
---------- --------- ---------
</TABLE>
See accompanying notes to financial statement information.
<PAGE>
EXHIBIT 99.1
Omega Environmental, Inc.
Debtor in Possession Case # 97-06084
October 31, 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
As of October 31, 1998, the Company's borrowings from BNY Financial Corporation
("BNYFC") were $21,760,539. In June, the Company successfully negotiated with
BNYFC for continuance of debtor-in-possession financing through December 31,
1998. Negotiations are soon to commence to extend beyond December 31, 1998.
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 believes that as a result of improvements in project
management and time charging practices no material write-offs in excess of the
normal allocated reserves will be required in the future.
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.
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.
