<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) October 28, 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 2. ACQUISITION OR DISPOSITION OF ASSETS
On July 17, 1998, certain assets and inventory of the Northeast Region
of Petroleum Services Division were sold to Wayne Division of Dresser
Industries for $409,565. In addition, a public auction of Northeast
vehicles was held on July 30, 1998 and raised proceeds of $52,040
which were deposited in August 1998.
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 October 28, 1998, the Registrant filed unaudited financial
statement information as of and for each of the months ended July 31,
1998 and June 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 July 31, 1998 and June 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: October 28, 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)
JULY 31, 1998 JUNE 30, 1998 JULY 31, 1998 JUNE 30, 1998
ESD ESD CHANGE PSD PSD CHANGE
----------------------------------------- ----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash 45,203 19,894 25,309 46,635 39,782 6,853
Restricted cash held in escrow 2,722,946 2,723,423 (477) -
Accounts receivable
A/R--trade 11,699,795 11,817,986 (118,191) 1,415,173 1,582,281 (167,108)
A/R--interco 969 751 218 - 5,820 (5,820)
A/R--employees 5,990 8,547 (2,557) 9,699 12,051 (2,352)
A/R--supplemental 1,839,165 1,843,275 (4,110) -
A/R--misc 51,691 10,078 41,613 - - -
Allowance for doubtful accounts (2,278,440) (2,420,388) 141,948 (78,712) (75,409) (3,303)
----------------------------------------- -----------------------------------------
Accounts receivable, net 11,319,170 11,260,249 58,921 1,346,160 1,524,743 (178,583)
----------------------------------------- -----------------------------------------
Costs and earnings in excess
of billings 4,654,544 4,797,457 (142,913) -
Prepaid expenses 43,432 2,192 41,240 100,476 68,762 31,714
Inventory - 2,108,472 3,211,140 (1,102,668)
Inventory reserve - (968,129) (1,265,876) 297,747
----------------------------------------- -----------------------------------------
Inventory, net - - - 1,140,343 1,945,264 (804,921)
----------------------------------------- -----------------------------------------
Other current assets - -
----------------------------------------- -----------------------------------------
TOTAL CURRENT ASSETS 18,785,295 18,803,215 (17,920) 2,633,614 3,578,551 (944,937)
----------------------------------------- -----------------------------------------
PROPERTY AND EQUIPMENT
Field equipment 2,283,334 2,249,482 33,852 571,342 677,216 (105,874)
Automotive equipment 1,026,959 1,026,959 - 97,371 459,649 (362,278)
Office furniture and equipment 835,678 839,643 (3,965) 39,750 307,139 (267,389)
Leasehold improvements 93,223 93,223 - 30,895 94,106 (63,211)
----------------------------------------- -----------------------------------------
TOTAL PROPERTY & EQUIP., AT COST 4,239,194 4,209,307 29,887 739,358 1,538,110 (798,752)
Accum. Depreciation (2,912,839) (2,852,761) (60,078) (372,470) (906,961) 534,491
----------------------------------------- -----------------------------------------
TOTAL PROPERTY & EQUIP., NET 1,326,355 1,356,546 (30,191) 366,888 631,149 (264,261)
----------------------------------------- -----------------------------------------
Long-term accounts receivable -
Other (Texas) 1,053,883 1,053,883 - - - -
Reserve for Long-term accounts
receivable (200,000) (400,000) 200,000 -
----------------------------------------- -----------------------------------------
Long-term accounts receviable -
Other (Texas), net 853,883 653,883 200,000 - - -
Other Assets 207,486 201,533 5,953 - - -
Investment & Intercompany
in Subsidiaires - - - - - -
----------------------------------------- -----------------------------------------
TOTAL ASSETS 21,173,019 21,015,177 157,842 3,000,502 4,209,700 (1,209,198)
----------------------------------------- -----------------------------------------
----------------------------------------- -----------------------------------------
POST PETITION CURRENT LIABILITIES
Accounts payable 397,425 351,613 45,812 57,690 98,859 (41,169)
Line of Credit -
Accrued expenses, excluding
bankruptcy costs 495,319 620,505 (125,186) 259,726 361,886 (102,160)
Accrued bankruptcy costs -
Estimated claims against
cash held in escrow 2,563,555 2,563,555 - -
Intercompany - BNYFC 7,721,859 7,376,889 344,970 8,087,408 8,466,374 (378,966)
Intercompany payables - 5,820 (5,820) 969 751 218
----------------------------------------- -----------------------------------------
TOTAL POST PETITION
CURRENT LIABILITIES 11,178,158 10,918,382 259,776 8,405,793 8,927,870 (522,077)
Intercompany Notes Payable 8,741,768 8,741,768 - -
Pre Petition Liabilities 1,643,247 1,650,561 (7,314) 1,091,756 1,099,919 (8,163)
Pre Petition Estimated
Construction Claims -
----------------------------------------- -----------------------------------------
TOTAL LIABILITIES 21,563,173 21,310,711 252,462 9,497,549 10,027,789 (530,240)
----------------------------------------- -----------------------------------------
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 (3,926,325) (3,831,705) (94,620) (5,595,292) (4,916,334) (678,958)
----------------------------------------- -----------------------------------------
TOTAL SHAREHOLDERS' EQUITY (390,154) (295,534) (94,620) (6,497,047) (5,818,089) (678,958)
----------------------------------------- -----------------------------------------
TOTAL LIABILITIES &
SHAREHOLDERS' EQUITY 21,173,019 21,015,177 157,842 3,000,502 4,209,700 (1,209,198)
----------------------------------------- -----------------------------------------
----------------------------------------- -----------------------------------------
</TABLE>
<PAGE>
OMEGA ENVIRONMENTAL, INC.
DEBTOR IN POSESSION CASE #97-06084
COMPARATIVE BALANCE SHEET INFORMATION
<TABLE>
<CAPTION>
(UNAUDITED) (UNAUDITED)
(UNAUDITED) (UNAUDITED) JULY 31, 1998 JUNE 30, 1998
JULY 31, 1998 JUNE 30, 1998 CONTINUING CONTINUING
CORPORATE CORPORATE CHANGE OPERATIONS OPERATIONS CHANGE
------------------------------------------ ------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash 32,186 272,689 (240,503) 124,024 332,365 (208,341)
Restricted cash held in escrow - 2,722,946 2,723,423 (477)
Accounts receivable
A/R--trade 144,431 144,431 - 13,259,399 13,544,698 (285,299)
A/R--interco - 969 6,571 (5,602)
A/R--employees - 15,689 20,598 (4,909)
A/R--supplemental - 1,839,165 1,843,275 (4,110)
A/R--misc 1,076,094 1,076,094 - 1,127,785 1,086,172 41,613
Allowance for doubtful accounts (1,138,467) (1,138,467) - (3,495,619) (3,634,264) 138,645
------------------------------------------ ------------------------------------------
Accounts receivable, net 82,058 82,058 - 12,747,388 12,867,050 (119,662)
------------------------------------------ ------------------------------------------
Costs and earnings in excess
of billings - 4,654,544 4,797,457 (142,913)
Prepaid expenses 382,830 421,158 (38,328) 526,738 492,112 34,626
Inventory - 2,108,472 3,211,140 (1,102,668)
Inventory reserve - (968,129) (1,265,876) 297,747
------------------------------------------ ------------------------------------------
Inventory, net - - - 1,140,343 1,945,264 (804,921)
------------------------------------------ ------------------------------------------
Other current assets - - - -
------------------------------------------ ------------------------------------------
TOTAL CURRENT ASSETS 497,074 775,905 (278,831) 21,915,983 23,157,671 (1,241,688)
------------------------------------------ ------------------------------------------
PROPERTY AND EQUIPMENT
Field equipment - 2,854,676 2,926,698 (72,022)
Automotive equipment - 1,124,330 1,486,608 (362,278)
Office furniture and equipment 310,472 310,472 - 1,185,900 1,457,254 (271,354)
Leasehold improvements 21,780 21,780 - 145,898 209,109 (63,211)
------------------------------------------ ------------------------------------------
TOTAL PROPERTY & EQUIP., AT COST 332,252 332,252 - 5,310,804 6,079,669 (768,865)
Accum. Depreciation (286,739) (284,671) (2,068) (3,572,048) (4,044,393) 472,345
------------------------------------------ ------------------------------------------
TOTAL PROPERTY & EQUIP., NET 45,513 47,581 (2,068) 1,738,756 2,035,276 (296,520)
------------------------------------------ ------------------------------------------
Long-term accounts receivable -
Other (Texas) - - - 1,053,883 1,053,883 -
Reserve for Long-term accounts
receivable - (200,000) (400,000) 200,000
------------------------------------------ ------------------------------------------
Long-term accounts receviable -
Other (Texas), net - - - 853,883 653,883 200,000
Other Assets 129,907 129,907 - 337,393 331,440 5,953
Investment & Intercompany in
Subsidiaires 74,785,282 74,785,282 - 74,785,282 74,785,282 -
------------------------------------------ ------------------------------------------
TOTAL ASSETS 75,457,776 75,738,675 (280,899) 99,631,297 100,963,552 (1,332,255)
------------------------------------------ ------------------------------------------
------------------------------------------ ------------------------------------------
POST PETITION CURRENT LIABILITIES
Accounts payable 69,135 31,845 37,290 524,250 482,317 41,933
Line of Credit 21,284,866 20,657,990 626,876 21,284,866 20,657,990 626,876
Accrued expenses, excluding
bankruptcy costs 435,919 490,448 (54,529) 1,190,964 1,472,839 (281,875)
Accrued bankruptcy costs 1,998,094 2,708,275 (710,181) 1,998,094 2,708,275 (710,181)
Estimated claims against cash held
in escrow - 2,563,555 2,563,555 -
Intercompany - BNYFC (19,175,590) (19,240,465) 64,875 (3,366,323) (3,397,202) 30,879
Intercompany payables - 969 6,571 (5,602)
------------------------------------------ ------------------------------------------
TOTAL POST PETITION CURRENT LIABILITIES 4,612,424 4,648,093 (35,669) 24,196,375 24,494,345 (297,970)
Intercompany Notes Payable - 8,741,768 8,741,768
Pre Petition Liabilities 2,530,451 2,533,181 (2,730) 5,265,454 5,283,661 (18,207)
Pre Petition Estimated
Construction Claims - - - -
------------------------------------------ ------------------------------------------
TOTAL LIABILITIES 7,142,875 7,181,274 (38,399) 38,203,597 38,519,774 (316,177)
------------------------------------------ ------------------------------------------
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 (9,231,911) (8,989,411) (242,500) (18,753,528) (17,737,450) (1,016,078)
------------------------------------------ ------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 68,314,901 68,557,401 (242,500) 61,427,700 62,443,778 (1,016,078)
------------------------------------------ ------------------------------------------
TOTAL LIABILITIES &
SHAREHOLDERS' EQUITY 75,457,776 75,738,675 (280,899) 99,631,297 100,963,552 (1,332,255)
------------------------------------------ ------------------------------------------
------------------------------------------ ------------------------------------------
</TABLE>
<PAGE>
OMEGA ENVIRONMENTAL, INC.
DEBTOR IN POSESSION CASE #97-06084
COMPARATIVE BALANCE SHEET INFORMATION
<TABLE>
<CAPTION>
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
JULY 31, 1998 JUNE 30, 1998 JULY 31, 1998 JUNE 30, 1998
DISCONTINUED DISCONTINUED COMBINED COMBINED
OPERATIONS OPERATIONS CHANGE FINAL FINAL CHANGE
----------------------------------------- --------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash - - - 124,024 332,365 (208,341)
Restricted cash held in escrow - 2,722,946 2,723,423 (477)
Accounts receivable
A/R--trade 5,692,972 5,692,755 217 18,952,371 19,237,453 (285,082)
A/R--interco - - - - - -
A/R--employees - 15,689 20,598 (4,909)
A/R--supplemental - 1,839,165 1,843,275 (4,110)
A/R--misc 39,461 40,641 (1,180) 1,167,246 1,126,813 40,433
Allowance for doubtful accounts (3,315,537) (3,315,537) - (6,811,156) (6,949,801) 138,645
--------------------------------------- --------------------------------------------
Accounts receivable, net 2,416,896 2,417,859 (963) 15,163,315 15,278,338 (115,023)
--------------------------------------- --------------------------------------------
Costs and earnings in excess of
billings - 4,654,544 4,797,457 (142,913)
Prepaid expenses - 526,738 492,112 34,626
Inventory - 2,108,472 3,211,140 (1,102,668)
Inventory reserve - (968,129) (1,265,876) 297,747
--------------------------------------- --------------------------------------------
Inventory, net - - - 1,140,343 1,945,264 (804,921)
--------------------------------------- --------------------------------------------
Other current assets 94,078 94,078 - 94,078 94,078 -
--------------------------------------- --------------------------------------------
TOTAL CURRENT ASSETS 2,510,974 2,511,937 (963) 24,425,988 25,663,037 (1,237,049)
--------------------------------------- --------------------------------------------
PROPERTY AND EQUIPMENT
Field equipment 1,000 1,000 - 2,855,676 2,927,698 (72,022)
Automotive equipment - - - 1,124,330 1,486,608 (362,278)
Office furniture and equipment - - - 1,185,900 1,457,254 (271,354)
Leasehold improvements 154,773 154,773 - 300,671 363,882 (63,211)
--------------------------------------- --------------------------------------------
TOTAL PROPERTY & EQUIP., AT COST 155,773 155,773 - 5,466,577 6,235,442 (768,865)
Accum. Depreciation (89,929) (89,929) - (3,661,977) (4,134,322) 472,345
--------------------------------------- --------------------------------------------
TOTAL PROPERTY & EQUIP., NET 65,844 65,844 - 1,804,600 2,101,120 (296,520)
--------------------------------------- --------------------------------------------
Long-term accounts receivable -
Other (Texas) - - - 1,053,883 1,053,883 -
Reserve for Long-term
accounts receivable - (200,000) (400,000) 200,000
--------------------------------------- --------------------------------------------
Long-term accounts receviable -
Other (Texas), net - - - 853,883 653,883 200,000
Other Assets 100 100 - 337,493 331,540 5,953
Investment & Intercompany in
Subsidiaires - 425,000 425,000 -
--------------------------------------- --------------------------------------------
TOTAL ASSETS 2,576,918 2,577,881 (963) 27,846,964 29,174,580 (1,327,616)
--------------------------------------- --------------------------------------------
--------------------------------------- --------------------------------------------
POST PETITION CURRENT LIABILITIES
Accounts payable - - - 524,250 482,317 41,933
Line of Credit 21,284,866 20,657,990 626,876
Accrued expenses, excluding
bankruptcy costs - - - 1,190,965 1,472,840 (281,875)
Accrued bankruptcy costs 1,998,094 2,708,275 (710,181)
Estimated claims against cash held
in escrow 2,563,555 2,563,555 -
Intercompany - BNYFC 3,366,323 3,397,202 (30,879) - - -
Intercompany payables - - - - - -
--------------------------------------- -------------------------------------------
TOTAL POST PETITION CURRENT
LIABILITIES 3,366,323 3,397,202 (30,879) 27,561,730 27,884,977 (323,247)
Intercompany Notes Payable 2,535,455 2,535,455 -
Pre Petition Liabilities 10,814,353 10,814,353 - 16,079,807 16,098,014 (18,207)
Pre Petition Estimated
Construction Claims 2,404,000 2,404,000 - 2,404,000 2,404,000 -
--------------------------------------- -------------------------------------------
TOTAL LIABILITIES 19,120,131 19,151,010 (30,879) 46,045,537 46,386,991 (341,454)
--------------------------------------- -------------------------------------------
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 (9,632,821) (9,662,737) 29,916 (28,386,349) (27,400,187) (986,162)
--------------------------------------- -------------------------------------------
TOTAL SHAREHOLDERS' EQUITY (16,543,213) (16,573,129) 29,916 (18,198,573) (17,212,411) (986,162)
--------------------------------------- -------------------------------------------
TOTAL LIABILITIES &
SHAREHOLDERS' EQUITY 2,576,918 2,577,881 (963) 27,846,964 29,174,580 (1,327,616)
--------------------------------------- -------------------------------------------
--------------------------------------- -------------------------------------------
</TABLE>
<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
JULY 31, 1998 JUNE 30, 1998 JULY 31, 1998 JUNE 30, 1998
ESD ESD CHANGE PSD PSD CHANGE
--------------------------------------------- ------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales 1,479,199 1,413,186 66,013 452,120 471,500 (19,380)
Cost of Sales 1,079,514 930,830 148,684 493,752 517,001 (23,249)
--------------------------------------------- -------------------------------------
Gross Profit 399,685 482,356 (82,671) (41,632) (45,501) 3,869
Selling, General, and Administrative 426,593 413,927 12,666 169,802 210,587 (40,785)
--------------------------------------------- --------------------------------------
Income (Loss) From Operations (26,908) 68,429 (95,337) (211,434) (256,088) 44,654
Other Income(Expense):
I/C Interest Income (Expense) (67,997) (71,083) 3,086 (73,021) (73,915) 894
Interest Expense (365) (11) (354) -
Interest Income - 7,407 (7,407) -
Gain (loss) on Asset Disposition - (1,499) 1,499 (382,580) (267,660) (114,920)
Other Expense 650 (201,168) 201,818 (11,923) (29,841) 17,918
--------------------------------------------- --------------------------------------
Total Other (Expense) (67,712) (266,354) 198,642 (467,524) (371,416) (96,108)
Net Income (Loss) Before Bankruptcy
Administrative Expenses (94,620) (197,925) 103,305 (678,958) (627,504) (51,454)
Bankruptcy Administrative Expenses -
--------------------------------------------- --------------------------------------
Net Income (Loss) (94,620) (197,925) 103,305 (678,958) (627,504) (51,454)
--------------------------------------------- --------------------------------------
--------------------------------------------- --------------------------------------
</TABLE>
<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 JULY 31, 1998 JUNE 30, 1998
JULY 31, 1998 JUNE 30, 1998 CONTINUING CONTINUING
CORPORATE CORPORATE CHANGE OPERATIONS OPERATIONS CHANGE
------------------------------------------- -------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales - - - 1,931,319 1,884,686 46,633
Cost of Sales - - - 1,573,266 1,447,831 125,435
------------------------------------------- -------------------------------------------
Gross Profit - - - 358,053 436,855 (78,802)
Selling, General, and Administrative 139,318 133,716 5,602 735,713 758,230 (22,517)
------------------------------------------- -------------------------------------------
Income (Loss) From Operations (139,318) (133,716) (5,602) (377,660) (321,375) (56,285)
Other Income(Expense):
I/C Interest Income (Expense) 141,018 144,998 (3,980) - - -
Interest Expense (191,146) (179,744) (11,402) (191,511) (179,755) (11,756)
Interest Income - - 7,407 (7,407)
Gain (loss) on Asset Disposition - (382,580) (269,159) (113,421)
Other Expense (32,000) (57,547) 25,547 (43,273) (288,556) 245,283
------------------------------------------- -------------------------------------------
Total Other (Expense) (82,128) (92,293) 10,165 (617,364) (730,063) 112,699
Net Income (Loss) Before Bankruptcy
Administrative Expenses (221,446) (226,009) 4,563 (995,024) (1,051,438) 56,414
Bankruptcy Administrative Expenses (21,054) 217,447 (238,501) (21,054) 217,447 (238,501)
------------------------------------------- -------------------------------------------
Net Income (Loss) (242,500) (8,562) (233,938) (1,016,078) (833,991) (182,087)
------------------------------------------- -------------------------------------------
------------------------------------------- -------------------------------------------
</TABLE>
<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
JULY 31, 1998 JUNE 30, 1998 JULY 31, 1998 JUNE 30, 1998
DISCONTINUED DISCONTINUED COMBINED COMBINED
OPERATIONS OPERATIONS CHANGE FINAL FINAL CHANGE
---------------------------------------- ----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales - - - 1,931,319 1,884,686 46,633
Cost of Sales - 1,573,266 1,447,831 125,435
---------------------------------------- -----------------------------------------
Gross Profit - - - 358,053 436,855 (78,802)
Selling, General, and Administrative - - - 735,713 758,230 (22,517)
---------------------------------------- -----------------------------------------
Income (Loss) From Operations - - - (377,660) (321,375) (56,285)
Other Income(Expense):
I/C Interest Income (Expense) - - - - - -
Interest Expense - - - (191,511) (179,755) (11,756)
Interest Income - - - - 7,407 (7,407)
Gain (loss) on Asset Disposition - - - (382,580) (269,159) (113,421)
Other Expense 29,916 (5,080) 34,996 (13,357) (293,636) 280,279
---------------------------------------- -----------------------------------------
Total Other (Expense) 29,916 (5,080) 34,996 (587,448) (735,143) 147,695
Net Income (Loss) Before Bankruptcy
Administrative Expenses 29,916 (5,080) 34,996 (965,108) (1,056,518) 91,410
Bankruptcy Administrative Expenses - (21,054) 217,447 (238,501)
---------------------------------------- -----------------------------------------
Net Income (Loss) 29,916 (5,080) 34,996 (986,162) (839,071) (147,091)
---------------------------------------- -----------------------------------------
---------------------------------------- -----------------------------------------
</TABLE>
<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
JULY 31, 1998 JUNE 30, 1998 CHANGE
---------------- --------------- --------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss ($986,162) ($839,071) ($147,091)
Adjustments to reconcile net loss to net cash
(used in) provided by operating activities:
Depreciation 72,682 87,043 (14,361)
Additional reserves for costs in excess of billings 200,000 (200,000)
Reserve for Long-term accounts receivable (200,000) 50,000 (250,000)
Write down of property and equipment 0 (169,593) 169,593
(Gain) / Loss on sale of property and equipment 382,580 269,159 113,421
Change in certain assets & liabilities:
(Increase) decrease in:
Receivables, net 115,024 (687,996) 803,020
Costs in excess of billings 142,913 257,403 (114,490)
Inventory, net 804,921 289,002 515,919
Prepaids & other assets (34,626) 58,387 (93,013)
Increase (decrease) in:
Accounts payable 41,933 211,345 (169,412)
Accrued expenses (992,056) (78,419) (913,637)
Other net changes in assets and liabilities (5,476) (181,490) 176,014
--------- --------- ---------
Total adjustments 327,895 304,841 23,054
--------- --------- ---------
Net cash provided by (used in) operating activities (658,267) (534,230) (124,037)
Cash flows from investing activities :
Proceeds from sale of equipment 17,435 39,150 (21,715)
Additions to property and equipment (176,177) (26,760) (149,417)
--------- --------- ---------
Net cash provided by (used in) investing activities (158,742) 12,390 (171,132)
Cash flows from financing and other activities:
Net proceeds (repayments) from revolver credit loan 626,876 136,667 490,209
Reduction of pre-petition liabilities (18,208) 54,795 (73,003)
--------- --------- ---------
Net cash provided by (used in) financing activities 608,668 191,462 417,206
--------- --------- ---------
Net increase (decrease) in cash (208,341) (330,378) 122,037
CASH AT BEGINNING OF PERIOD 332,365 662,743 (330,378)
--------- --------- ---------
CASH AT END OF PERIOD $ 124,024 $ 332,365 ($208,341)
--------- --------- ---------
--------- --------- ---------
</TABLE>
<PAGE>
EXHIBIT 99.1
Omega Environmental, Inc.
Debtor in Possession Case # 97-06084
July 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 July 31, 1998, the Company's borrowings from BNY Financial Corporation
("BNYFC") were $21,284,866. In June, the Company successfully negotiated with
BNYFC for continuance of debtor-in-possession financing through 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 is in the process of instituting new procedures for earlier
identification of potential write-offs. These new procedures resulted in
$200,000 of write-offs in June 1998. The analysis is largely complete and
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.
<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.
