<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) November 9, 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 November 9, 1998, the Registrant filed unaudited financial
statement information as of and for each of the months ended August
31, 1998 and July 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
August 31, 1998 and July 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)
Date: November 9, 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)
AUGUST 31, 1998 JULY 31, 1998 AUGUST 31, 1998 JULY 31, 1998
ESD ESD CHANGE PSD PSD CHANGE
----------------------------------------- -----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash 37,113 45,203 (8,090) 47,778 46,635 1,143
Restricted cash held in escrow 2,723,179 2,722,946 233 -
Accounts receivable
A/R--trade 11,868,790 11,699,795 168,995 1,248,363 1,415,173 (166,810)
A/R--interco 13,062 969 12,093 - - -
A/R--employees 11,372 5,990 5,382 9,809 9,699 110
A/R--supplemental 1,839,165 1,839,165 - -
A/R--misc. 12,078 51,691 (39,613) - - -
Allowance for doubtful accounts (2,200,810) (2,278,440) 77,630 (59,648) (78,712) 19,064
----------------------------------------- -----------------------------------------
Accounts receivable, net 11,543,657 11,319,170 224,487 1,198,524 1,346,160 (147,636)
----------------------------------------- -----------------------------------------
Costs and earnings in excess of
billings 4,991,375 4,654,544 336,831 -
Prepaid expenses 74,815 43,432 31,383 80,719 100,476 (19,757)
Inventory - 1,949,845 2,108,472 (158,627)
Inventory reserve - (872,335) (968,129) 95,794
----------------------------------------- -----------------------------------------
Inventory, net - - - 1,077,510 1,140,343 (62,833)
----------------------------------------- -----------------------------------------
Other current assets - -
----------------------------------------- -----------------------------------------
TOTAL CURRENT ASSETS 19,370,139 18,785,295 584,844 2,404,531 2,633,614 (229,083)
----------------------------------------- -----------------------------------------
PROPERTY AND EQUIPMENT
Field equipment 2,289,840 2,283,334 6,506 547,106 571,342 (24,236)
Automotive equipment 1,026,959 1,026,959 - 111,546 97,371 14,175
Office furniture and equipment 842,562 835,678 6,884 38,329 39,750 (1,421)
Leasehold improvements 93,223 93,223 - 30,895 30,895 -
----------------------------------------- -----------------------------------------
TOTAL PROPERTY & EQUIP., AT COST 4,252,584 4,239,194 13,390 727,876 739,358 (11,482)
Accum. Depreciation (2,972,713) (2,912,839) (59,874) (381,408) (372,470) (8,938)
----------------------------------------- -----------------------------------------
TOTAL PROPERTY & EQUIP., NET 1,279,871 1,326,355 (46,484) 346,468 366,888 (20,420)
----------------------------------------- -----------------------------------------
Long-term accounts receivable -
Other (Texas) 1,072,065 1,053,883 18,182 - - -
Reserve for Long-term accounts receivable (218,182) (200,000) (18,182) -
----------------------------------------- -----------------------------------------
Long-term accounts receviable -
Other (Texas), net 853,883 853,883 - - - -
Other Assets 222,080 207,486 14,594 - - -
Investment & Intercompany in Subsidiaires - - - -
----------------------------------------- -----------------------------------------
TOTAL ASSETS 21,725,973 21,173,019 552,954 2,750,999 3,000,502 (249,503)
----------------------------------------- -----------------------------------------
----------------------------------------- -----------------------------------------
POST PETITION CURRENT LIABILITIES
Accounts payable 589,597 397,425 192,172 46,625 57,690 (11,065)
Line of Credit -
Accrued expenses, excluding
bankruptcy costs 540,680 495,319 45,361 287,939 259,726 28,213
Accrued bankruptcy costs -
Estimated claims against cash
held in escrow 2,553,723 2,563,555 (9,832) -
Intercompany - BNYFC 8,045,592 7,721,859 323,733 8,078,438 8,087,408 (8,970)
Intercompany payables - - - - 969 (969)
----------------------------------------- -----------------------------------------
TOTAL POST PETITION CURRENT LIABILITIES 11,729,592 11,178,158 551,434 8,413,002 8,405,793 7,209
Intercompany Notes Payable 8,741,768 8,741,768 - -
Pre Petition Liabilities 1,648,776 1,643,247 5,529 1,098,449 1,091,756 6,693
Pre Petition Estimated Construction Claims -
----------------------------------------- -----------------------------------------
TOTAL LIABILITIES 22,120,136 21,563,173 556,963 9,511,451 9,497,549 13,902
----------------------------------------- -----------------------------------------
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 (3,930,334) (3,926,325) (4,009) (5,858,697) (5,595,292) (263,405)
----------------------------------------- -----------------------------------------
TOTAL SHAREHOLDERS' EQUITY (394,163) (390,154) (4,009) (6,760,452) (6,497,047) (263,405)
----------------------------------------- -----------------------------------------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY 21,725,973 21,173,019 552,954 2,750,999 3,000,502 (249,503)
----------------------------------------- -----------------------------------------
----------------------------------------- -----------------------------------------
</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) AUGUST 31, 1998 JULY 31, 1998
AUGUST 31, 1998 JULY 31, 1998 CONTINUING CONTINUING
CORPORATE CORPORATE CHANGE OPERATIONS OPERATIONS CHANGE
----------------------------------------- -----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash 51,748 32,186 19,562 136,639 124,024 12,615
Restricted cash held in escrow - 2,723,179 2,722,946 233
Accounts receivable
A/R--trade 144,431 144,431 - 13,261,584 13,259,399 2,185
A/R--interco - 13,062 969 12,093
A/R--employees - 21,181 15,689 5,492
A/R--supplemental - 1,839,165 1,839,165 -
A/R--misc. 1,076,094 1,076,094 - 1,088,172 1,127,785 (39,613)
Allowance for doubtful accounts (1,138,467) (1,138,467) - (3,398,925) (3,495,619) 96,694
----------------------------------------- -----------------------------------------
Accounts receivable, net 82,058 82,058 - 12,824,239 12,747,388 76,851
----------------------------------------- -----------------------------------------
Costs and earnings in excess of billings - 4,991,375 4,654,544 336,831
Prepaid expenses 387,625 382,830 4,795 543,159 526,738 16,421
Inventory - 1,949,845 2,108,472 (158,627)
Inventory reserve - (872,335) (968,129) 95,794
----------------------------------------- -----------------------------------------
Inventory, net - - - 1,077,510 1,140,343 (62,833)
----------------------------------------- -----------------------------------------
Other current assets - - - -
----------------------------------------- -----------------------------------------
TOTAL CURRENT ASSETS 521,431 497,074 24,357 22,296,101 21,915,983 380,118
----------------------------------------- -----------------------------------------
PROPERTY AND EQUIPMENT
Field equipment - 2,836,946 2,854,676 (17,730)
Automotive equipment - 1,138,505 1,124,330 14,175
Office furniture and equipment 310,472 310,472 - 1,191,363 1,185,900 5,463
Leasehold improvements 21,780 21,780 - 145,898 145,898 -
----------------------------------------- -----------------------------------------
TOTAL PROPERTY & EQUIP., AT COST 332,252 332,252 - 5,312,712 5,310,804 1,908
Accum. Depreciation (288,808) (286,739) (2,069) (3,642,929) (3,572,048) (70,881)
----------------------------------------- -----------------------------------------
TOTAL PROPERTY & EQUIP., NET 43,444 45,513 (2,069) 1,669,783 1,738,756 (68,973)
----------------------------------------- -----------------------------------------
Long-term accounts receivable -
Other (Texas) - - - 1,072,065 1,053,883 18,182
Reserve for Long-term accounts receivable - (218,182) (200,000) (18,182)
----------------------------------------- -----------------------------------------
Long-term accounts receviable -
Other (Texas), net - - - 853,883 853,883 -
Other Assets 129,907 129,907 - 351,987 337,393 14,594
Investment & Intercompany in Subsidiaires 74,485,283 74,785,283 (300,000) 74,485,283 74,785,283 (300,000)
----------------------------------------- -----------------------------------------
TOTAL ASSETS 75,180,065 75,457,777 (277,712) 99,657,037 99,631,298 25,739
----------------------------------------- -----------------------------------------
----------------------------------------- -----------------------------------------
POST PETITION CURRENT LIABILITIES
Accounts payable 38,485 69,135 (30,650) 674,707 524,250 150,457
Line of Credit 21,924,239 21,284,866 639,373 21,924,239 21,284,866 639,373
Accrued expenses, excluding
bankruptcy costs 402,355 435,920 (33,565) 1,230,974 1,190,965 40,009
Accrued bankruptcy costs 1,602,726 1,998,094 (395,368) 1,602,726 1,998,094 (395,368)
Estimated claims against cash
held in escrow - 2,553,723 2,563,555 (9,832)
Intercompany - BNYFC (19,222,533) (19,175,590) (46,943) (3,098,503) (3,366,323) 267,820
Intercompany payables 13,062 13,062 13,062 969 12,093
----------------------------------------- -----------------------------------------
TOTAL POST PETITION CURRENT LIABILITIES 4,758,334 4,612,424 145,909 24,900,928 24,196,376 704,552
Intercompany Notes Payable - 8,741,768 8,741,768
Pre Petition Liabilities 2,530,451 2,530,451 - 5,277,676 5,265,454 12,222
Pre Petition Estimated Construction Claims - - - -
----------------------------------------- -----------------------------------------
TOTAL LIABILITIES 7,288,785 7,142,875 145,909 38,920,372 38,203,598 716,774
----------------------------------------- -----------------------------------------
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 (9,655,532) (9,231,911) (423,621) (19,444,563) (18,753,528) (691,035)
----------------------------------------- -----------------------------------------
TOTAL SHAREHOLDERS' EQUITY 67,891,280 68,314,901 (423,621) 60,736,665 61,427,700 (691,035)
----------------------------------------- -----------------------------------------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY 75,180,065 75,457,777 (277,712) 99,657,037 99,631,298 25,739
----------------------------------------- -----------------------------------------
----------------------------------------- -----------------------------------------
</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)
AUGUST 31, 1998 JULY 31, 1998 AUGUST 31, 1998 JULY 31, 1998
DISCONTINUED DISCONTINUED COMBINED COMBINED
OPERATIONS OPERATIONS CHANGE FINAL FINAL CHANGE
----------------------------------------- ------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash - - - 136,639 124,024 12,615
Restricted cash held in escrow - 2,723,179 2,722,946 233
Accounts receivable
A/R--trade 5,379,087 5,692,972 (313,885) 18,640,671 18,952,371 (311,700)
A/R--interco - - - - - -
A/R--employees - 21,181 15,689 5,492
A/R--supplemental - 1,839,165 1,839,165 -
A/R--misc. 39,461 39,461 - 1,127,633 1,167,246 (39,613)
Allowance for doubtful accounts (3,269,472) (3,315,537) 46,065 (6,668,397) (6,811,156) 142,759
----------------------------------------- ------------------------------------------
Accounts receivable, net 2,149,076 2,416,896 (267,820) 14,960,253 15,163,315 (203,062)
----------------------------------------- ------------------------------------------
Costs and earnings in excess of billings - 4,991,375 4,654,544 336,831
Prepaid expenses - 543,159 526,738 16,421
Inventory - 1,949,845 2,108,472 (158,627)
Inventory reserve - (872,335) (968,129) 95,794
----------------------------------------- ------------------------------------------
Inventory, net - - - 1,077,510 1,140,343 (62,833)
----------------------------------------- ------------------------------------------
Other current assets 94,078 94,078 - 94,078 94,078 -
----------------------------------------- ------------------------------------------
TOTAL CURRENT ASSETS 2,243,154 2,510,974 (267,820) 24,526,193 24,425,988 100,205
----------------------------------------- ------------------------------------------
PROPERTY AND EQUIPMENT
Field equipment 1,000 1,000 - 2,837,946 2,855,676 (17,730)
Automotive equipment - - - 1,138,505 1,124,330 14,175
Office furniture and equipment - - - 1,191,363 1,185,900 5,463
Leasehold improvements 154,773 154,773 - 300,671 300,671 -
----------------------------------------- ------------------------------------------
TOTAL PROPERTY & EQUIP., AT COST 155,773 155,773 - 5,468,485 5,466,577 1,908
Accum. Depreciation (89,929) (89,929) - (3,732,858) (3,661,977) (70,881)
----------------------------------------- ------------------------------------------
TOTAL PROPERTY & EQUIP., NET 65,844 65,844 - 1,735,627 1,804,600 (68,973)
----------------------------------------- ------------------------------------------
Long-term accounts receivable -
Other (Texas) - - - 1,072,065 1,053,883 18,182
Reserve for Long-term accounts receivable - (218,182) (200,000) (18,182)
----------------------------------------- ------------------------------------------
Long-term accounts receviable -
Other (Texas), net - - - 853,883 853,883 -
Other Assets 100 100 - 352,087 337,493 14,594
Investment & Intercompany in Subsidiaires - 125,000 425,000 (300,000)
----------------------------------------- ------------------------------------------
TOTAL ASSETS 2,309,098 2,576,918 (267,820) 27,592,790 27,846,964 (254,174)
----------------------------------------- ------------------------------------------
----------------------------------------- ------------------------------------------
POST PETITION CURRENT LIABILITIES
Accounts payable - - - 674,707 524,250 150,457
Line of Credit 21,924,239 21,284,866 639,373
Accrued expenses, excluding
bankruptcy costs - - - 1,230,974 1,190,965 40,009
Accrued bankruptcy costs 1,602,726 1,998,094 (395,368)
Estimated claims against cash
held in escrow 2,553,723 2,563,555 (9,832)
Intercompany - BNYFC 3,098,503 3,366,323 (267,820) - - -
Intercompany payables - - - - - -
----------------------------------------- ------------------------------------------
TOTAL POST PETITION CURRENT LIABILITIES 3,098,503 3,366,323 (267,820) 27,986,369 27,561,730 424,639
Intercompany Notes Payable 2,535,455 2,535,455 -
Pre Petition Liabilities 10,814,353 10,814,353 - 16,092,029 16,079,807 12,222
Pre Petition Estimated Construction Claims 2,404,000 2,404,000 - 2,404,000 2,404,000 -
----------------------------------------- ------------------------------------------
TOTAL LIABILITIES 18,852,311 19,120,131 (267,820) 46,482,398 46,045,537 436,861
----------------------------------------- ------------------------------------------
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) (9,632,821) - (29,077,384) (28,386,349) (691,035)
----------------------------------------- ------------------------------------------
TOTAL SHAREHOLDERS' EQUITY (16,543,213) (16,543,213) - (18,889,608) (18,198,573) (691,035)
----------------------------------------- ------------------------------------------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY 2,309,098 2,576,918 (267,820) 27,592,790 27,846,964 (254,174)
----------------------------------------- ------------------------------------------
----------------------------------------- ------------------------------------------
</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
AUGUST 31, 1998 JULY 31, 1998 AUGUST 31, 1998 JULY 31, 1998
ESD ESD CHANGE PSD PSD CHANGE
----------------------------------------- ----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales 1,712,957 1,479,199 233,758 330,370 452,120 (121,750)
Cost of Sales 1,221,871 1,079,514 142,357 344,567 493,752 (149,185)
--------------------------------------- --------------------------------------
Gross Profit 491,086 399,685 91,401 (14,197) (41,632) 27,435
Selling, General, and Administrative 414,529 426,593 (12,064) 146,250 169,802 (23,552)
--------------------------------------- --------------------------------------
Income (Loss) From Operations 76,557 (26,908) 103,465 (160,447) (211,434) 50,987
Other Income(Expense):
I/C Interest Income (Expense) (68,054) (67,997) (57) (70,582) (73,021) 2,439
Interest Expense - (365) 365 -
Interest Income - - - -
Gain (loss) on Asset Disposition (3,100) - (3,100) (25,112) (382,580) 357,468
Other Expense (9,412) 650 (10,062) (7,264) (11,923) 4,659
--------------------------------------- --------------------------------------
Total Other (Expense) (80,566) (67,712) (12,854) (102,958) (467,524) 364,566
Net Income (Loss) Before Bankruptcy
Administrative Expenses (4,009) (94,620) 90,611 (263,405) (678,958) 415,553
Bankruptcy Administrative Expenses -
--------------------------------------- --------------------------------------
Net Income (Loss) (4,009) (94,620) 90,611 (263,405) (678,958) 415,553
--------------------------------------- --------------------------------------
--------------------------------------- --------------------------------------
</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 AUGUST 31, 1998 JULY 31, 1998
AUGUST 31, 1998 JULY 31, 1998 CONTINUING CONTINUING
CORPORATE CORPORATE CHANGE OPERATIONS OPERATIONS CHANGE
---------------------------------------- ----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales - - - 2,043,327 1,931,319 112,008
Cost of Sales - - - 1,566,438 1,573,266 (6,828)
-------------------------------------- --------------------------------------
Gross Profit - - - 476,889 358,053 118,836
Selling, General, and Administrative 139,957 139,318 639 700,736 735,713 (34,977)
-------------------------------------- --------------------------------------
Income (Loss) From Operations (139,957) (139,318) (639) (223,847) (377,660) 153,813
Other Income(Expense):
I/C Interest Income (Expense) 138,636 141,018 (2,382) - - -
Interest Expense (204,238) (191,146) (13,092) (204,238) (191,511) (12,727)
Interest Income - - - -
Gain (loss) on Asset Disposition - (28,212) (382,580) 354,368
Other Expense (338,545) (32,000) (306,545) (355,221) (43,273) (311,948)
-------------------------------------- --------------------------------------
Total Other (Expense) (404,147) (82,128) (322,019) (587,671) (617,364) 29,693
Net Income (Loss) Before Bankruptcy
Administrative Expenses (544,104) (221,446) (322,658) (811,518) (995,024) 183,506
Bankruptcy Administrative Expenses 120,483 (21,054) 141,537 120,483 (21,054) 141,537
-------------------------------------- --------------------------------------
Net Income (Loss) (423,621) (242,500) (181,121) (691,035) (1,016,078) 325,043
-------------------------------------- --------------------------------------
-------------------------------------- --------------------------------------
</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
AUGUST 31, 1998 JULY 31, 1998 AUGUST 31, 1998 JULY 31, 1998
DISCONTINUED DISCONTINUED COMBINED COMBINED
OPERATIONS OPERATIONS CHANGE FINAL FINAL CHANGE
-------------------------------------- -----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales - 2,043,327 1,931,319 112,008
Cost of Sales - 1,566,438 1,573,266 (6,828)
------------------------------------ -----------------------------------------
Gross Profit - - - 476,889 358,053 118,836
Selling, General, and Administrative - 700,736 735,713 (34,977)
------------------------------------ ---------------------------------------
Income (Loss) From Operations - - - (223,847) (377,660) 153,813
Other Income(Expense):
I/C Interest Income (Expense) - - - -
Interest Expense - (204,238) (191,511) (12,727)
Interest Income - - - -
Gain (loss) on Asset Disposition - (28,212) (382,580) 354,368
Other Expense 29,916 (29,916) (355,221) (13,357) (341,864)
------------------------------------ ---------------------------------------
Total Other (Expense) - 29,916 (29,916) (587,671) (587,448) (223)
Net Income (Loss) Before Bankruptcy
Administrative Expenses - 29,916 (29,916) (811,518) (965,108) 153,590
Bankruptcy Administrative Expenses - 120,483 (21,054) 141,537
------------------------------------ --------------------------------------
Net Income (Loss) - 29,916 (29,916) (691,035) (986,162) 295,127
------------------------------------ ---------------------------------------
------------------------------------ ---------------------------------------
</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
AUGUST 31, 1998 JULY 31, 1998 CHANGE
--------------- ------------- ---------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss ($691,035) ($986,162) $295,127
Adjustments to reconcile net loss to net cash
(used in) provided by operating activities:
Depreciation 73,499 72,682 817
Additional reserves for costs in excess of billings 10,000 10,000
Reserve for Long-term accounts receivable (200,000) 200,000
Write off of investments in subsidiaries 300,000 300,000
Write down of property and equipment 0 0
(Gain) / Loss on sale of property and equipment 28,212 382,580 (354,368)
Change in certain assets & liabilities:
(Increase) decrease in:
Receivables, net 203,062 115,024 88,038
Costs in excess of billings (346,831) 142,913 (489,744)
Inventory, net 62,833 804,921 (742,088)
Prepaids & other assets (16,421) (34,626) 18,205
Increase (decrease) in:
Accounts payable 150,457 41,933 108,524
Billings in excess of costs 0 0 0
Other net changes in assets and liabilities (24,659) (5,476) (19,183)
--------- --------- ---------
Total adjustments 84,793 327,895 (243,102)
--------- --------- ---------
Net cash provided by (used in) operating activities (606,242) (658,267) 52,025
Cash flows from investing activities :
Proceeds from sale of equipment 0 17,435 (17,435)
Additions to property and equipment (32,738) (176,177) 143,439
--------- --------- ---------
Net cash provided by (used in) investing activities (32,738) (158,742) 126,004
Cash flows from financing and other activities:
Net proceeds (repayments) from revolver credit loan 639,373 626,876 12,497
Reduction of pre-petition liabilities 12,222 (18,208) 30,430
--------- --------- ---------
Net cash provided by (used in) financing activities 651,595 608,668 42,927
--------- --------- ---------
Net increase (decrease) in cash 12,615 (208,341) 220,956
Cash at beginning of period 124,024 332,365 (208,341)
--------- --------- ---------
Cash at end of period 136,639 124,024 12,615
--------- --------- ---------
--------- --------- ---------
</TABLE>
See accompanying notes to financial statement information
<PAGE>
EXHIBIT 99.1
Omega Environmental, Inc.
Debtor in Possession Case # 97-06084
August 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 August 31, 1998, the Company's borrowings from BNY Financial Corporation
("BNYFC") were $21,911,201. 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 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.
Investments & Intercompany in Subsidiaries
In August 1998, an investment in a Mexico subsidiary was written off which
totaled $300,000.
