<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 1, 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 1, 1998, the Registrant filed unaudited financial
statement information as of and for each of the months ended September
30, 1998 and August 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
September 30, 1998 and August 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: December 1, 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)
SEPT. 30, 1998 AUGUST 31, 1998 SEPT. 30, 1998 AUGUST 31, 1998
ESD ESD CHANGE PSD PSD CHANGE
------------------------------------------- -------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash 9,629 37,113 (27,484) 35,386 47,778 (12,392)
Restricted cash held in escrow 2,729,555 2,723,179 6,376 -
Accounts receivable
A/R--trade 12,229,388 11,868,790 360,598 947,480 1,248,363 (300,883)
A/R--interco 168 13,062 (12,894) 11,672 - 11,672
A/R--employees 9,332 11,372 (2,040) 10,003 9,809 194
A/R--supplemental 1,729,432 1,839,165 (109,733) -
A/R--misc. 12,078 12,078 - - - -
Allowance for doubtful accounts (2,214,480) (2,200,810) (13,670) (60,105) (59,648) (457)
------------------------------------------- -------------------------------------------
Accounts receivable, net 11,765,918 11,543,657 222,261 909,050 1,198,524 (289,474)
------------------------------------------- -------------------------------------------
Costs and earnings in excess of billings 5,259,905 4,991,375 268,530 -
Prepaid expenses 84,755 74,815 9,940 66,885 80,719 (13,834)
Inventory - 1,868,762 1,949,845 (81,083)
Inventory reserve - (775,755) (872,335) 96,580
------------------------------------------- -------------------------------------------
Inventory, net - - - 1,093,007 1,077,510 15,497
------------------------------------------- -------------------------------------------
Other current assets - -
------------------------------------------- -------------------------------------------
TOTAL CURRENT ASSETS 19,849,762 19,370,139 479,623 2,104,328 2,404,531 (300,203)
------------------------------------------- -------------------------------------------
PROPERTY AND EQUIPMENT
Field equipment 2,435,403 2,289,840 145,563 547,106 547,106 -
Automotive equipment 1,026,959 1,026,959 - 111,546 111,546 -
Office furniture and equipment 961,223 842,562 118,661 38,329 38,329 -
Leasehold improvements 93,223 93,223 - 30,895 30,895 -
------------------------------------------- -------------------------------------------
TOTAL PROPERTY & EQUIP., AT COST 4,516,808 4,252,584 264,224 727,876 727,876 -
Accum. Depreciation (3,166,180) (2,972,713) (193,467) (392,021) (381,408) (10,613)
------------------------------------------- -------------------------------------------
TOTAL PROPERTY & EQUIP., NET 1,350,628 1,279,871 70,757 335,855 346,468 (10,613)
------------------------------------------- -------------------------------------------
Long-term accounts receivable - Other
(Texas) 11,426 1,072,065 (1,060,639) - - -
Reserve for Long-term accounts receivable - (218,182) 218,182 -
------------------------------------------- -------------------------------------------
Long-term accounts receviable - Other
(Texas), net 11,426 853,883 (842,457) - - -
Other Assets 222,360 222,080 280 - - -
Investment & Intercompany in Subsidiaires - - - -
------------------------------------------- -------------------------------------------
TOTAL ASSETS 21,434,176 21,725,973 (291,797) 2,440,183 2,750,999 (310,816)
------------------------------------------- -------------------------------------------
------------------------------------------- -------------------------------------------
POST PETITION CURRENT LIABILITIES
Accounts payable 874,613 589,597 285,016 58,632 46,625 12,007
Line of Credit -
Accrued expenses, excluding bankruptcy
costs 689,875 540,680 149,195 302,595 287,939 14,656
Accrued bankruptcy costs -
Estimated claims against cash held in
escrow 2,569,825 2,553,723 16,102 -
Intercompany - BNYFC 7,445,963 8,045,592 (599,629) 7,961,732 8,078,438 (116,706)
Intercompany payables 11,672 - 11,672 - - -
-------------------------------------------- ---------------------------------------------
TOTAL POST PETITION CURRENT LIABILITIES 11,591,948 11,729,592 (137,644) 8,322,959 8,413,002 (90,043)
Intercompany Notes Payable 8,741,768 8,741,768 - -
Pre Petition Liabilities 1,637,118 1,648,776 (11,658) 1,089,536 1,098,449 (8,913)
Pre Petition Estimated Construction
Claims -
-------------------------------------------- ---------------------------------------------
TOTAL LIABILITIES 21,970,834 22,120,136 (149,302) 9,412,495 9,511,451 (98,956)
-------------------------------------------- ---------------------------------------------
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 (4,072,829) (3,930,334) (142,495) (6,070,557) (5,858,697) (211,860)
-------------------------------------------- ---------------------------------------------
TOTAL SHAREHOLDERS' EQUITY (536,658) (394,163) (142,495) (6,972,312) (6,760,452) (211,860)
-------------------------------------------- ---------------------------------------------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY 21,434,176 21,725,973 (291,797) 2,440,183 2,750,999 (310,816)
-------------------------------------------- ---------------------------------------------
-------------------------------------------- ---------------------------------------------
</TABLE>
See accompanying notes to financial information.
<PAGE>
OMEGA ENVIRONMENTAL, INC.
DEBTOR IN POSESSION CASE #97-06084
COMPARATIVE BALANCE SHEET INFORMATION
<TABLE>
<CAPTION>
(UNAUDITED) (UNAUDITED)
(UNAUDITED) (UNAUDITED) SEPT. 30, 1998 AUGUST 31, 1998
SEPT. 30, 1998 AUGUST 31, 1998 CONTINUING CONTINUING
CORPORATE CORPORATE CHANGE OPERATIONS OPERATIONS CHANGE
------------------------------------------- -------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash 73,857 51,748 22,109 118,872 136,639 (17,767)
Restricted cash held in escrow - 2,729,555 2,723,179 6,376
Accounts receivable
A/R--trade 144,431 144,431 - 13,321,299 13,261,584 59,715
A/R--interco - 11,840 13,062 (1,222)
A/R--employees - 19,335 21,181 (1,846)
A/R--supplemental - 1,729,432 1,839,165 (109,733)
A/R--misc. 1,076,094 1,076,094 - 1,088,172 1,088,172 -
Allowance for doubtful accounts (1,138,467) (1,138,467) - (3,413,052) (3,398,925) (14,127)
------------------------------------------- -------------------------------------------
Accounts receivable, net 82,058 82,058 - 12,757,026 12,824,239 (67,213)
------------------------------------------- -------------------------------------------
Costs and earnings in excess of billings - 5,259,905 4,991,375 268,530
Prepaid expenses 298,366 387,625 (89,259) 450,006 543,159 (93,153)
Inventory - 1,868,762 1,949,845 (81,083)
Inventory reserve - (775,755) (872,335) 96,580
------------------------------------------- -------------------------------------------
Inventory, net - - - 1,093,007 1,077,510 15,497
------------------------------------------- -------------------------------------------
Other current assets - - - -
------------------------------------------- -------------------------------------------
TOTAL CURRENT ASSETS 454,281 521,431 (67,150) 22,408,371 22,296,101 112,270
------------------------------------------- -------------------------------------------
PROPERTY AND EQUIPMENT
Field equipment - 2,982,509 2,836,946 145,563
Automotive equipment - 1,138,505 1,138,505 -
Office furniture and equipment 192,606 310,472 (117,866) 1,192,158 1,191,363 795
Leasehold improvements - 21,780 (21,780) 124,118 145,898 (21,780)
------------------------------------------- -------------------------------------------
TOTAL PROPERTY & EQUIP., AT COST 192,606 332,252 (139,646) 5,437,290 5,312,712 124,578
Accum. Depreciation (154,805) (288,808) 134,003 (3,713,006) (3,642,929) (70,077)
------------------------------------------- -------------------------------------------
TOTAL PROPERTY & EQUIP., NET 37,801 43,444 (5,643) 1,724,284 1,669,783 54,501
------------------------------------------- -------------------------------------------
Long-term accounts receivable - Other
(Texas) - - - 11,426 1,072,065 (1,060,639)
Reserve for Long-term accounts
receivable - - (218,182) 218,182
------------------------------------------- -------------------------------------------
Long-term accounts receviable - Other
(Texas), net - - - 11,426 853,883 (842,457)
Other Assets 129,907 129,907 - 352,267 351,987 280
Investment & Intercompany in
Subsidiaires 74,399,948 74,485,283 (85,335) 74,399,948 74,485,283 (85,335)
------------------------------------------- -------------------------------------------
TOTAL ASSETS 75,021,937 75,180,065 (158,128) 98,896,296 99,657,037 (760,741)
------------------------------------------- -------------------------------------------
------------------------------------------- -------------------------------------------
POST PETITION CURRENT LIABILITIES
Accounts payable 36,205 38,485 (2,280) 969,450 674,707 294,743
Line of Credit 21,988,501 21,924,239 64,262 21,988,501 21,924,239 64,262
Accrued expenses, excluding bankruptcy
costs 315,928 402,355 (86,427) 1,308,398 1,230,974 77,424
Accrued bankruptcy costs 1,168,073 1,602,726 (434,653) 1,168,073 1,602,726 (434,653)
Estimated claims against cash held in
escrow - 2,569,825 2,553,723 16,102
Intercompany - BNYFC (18,698,232) (19,222,533) 524,301 (3,290,537) (3,098,503) (192,034)
Intercompany payables 168 13,062 (12,894) 11,840 13,062 (1,222)
------------------------------------------- -------------------------------------------
TOTAL POST PETITION CURRENT LIABILITIES 4,810,643 4,758,334 52,309 24,725,550 24,900,928 (175,378)
Intercompany Notes Payable - 8,741,768 8,741,768
Pre Petition Liabilities 2,530,451 2,530,451 - 5,257,105 5,277,676 (20,571)
Pre Petition Estimated Construction
Claims - - - -
------------------------------------------- -------------------------------------------
TOTAL LIABILITIES 7,341,094 7,288,785 52,309 38,724,423 38,920,372 (195,949)
------------------------------------------- -------------------------------------------
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 (9,865,969) (9,655,532) (210,437) (20,009,355) (19,444,563) (564,792)
------------------------------------------- -------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 67,680,843 67,891,280 (210,437) 60,171,873 60,736,665 (564,792)
------------------------------------------- -------------------------------------------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY 75,021,937 75,180,065 (158,128) 98,896,296 99,657,037 (760,741)
------------------------------------------- -------------------------------------------
------------------------------------------- -------------------------------------------
</TABLE>
See accompanying notes to financial information.
<PAGE>
OMEGA ENVIRONMENTAL, INC.
DEBTOR IN POSESSION CASE #97-06084
COMPARATIVE BALANCE SHEET INFORMATION
<TABLE>
<CAPTION>
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
SEPT. 30, 1998 AUGUST 31, 1998 SEPT. 30, 1998 AUGUST 31, 1998
DISCONTINUED DISCONTINUED COMBINED COMBINED
OPERATIONS OPERATIONS CHANGE FINAL FINAL CHANGE
------------------------------------------- -------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash - - - 118,872 136,639 (17,767)
Restricted cash held in escrow - 2,729,555 2,723,179 6,376
Accounts receivable
A/R--trade 5,379,087 5,379,087 - 19,026,146 18,640,671 385,475
A/R--interco - - - - - -
A/R--employees - 19,335 21,181 (1,846)
A/R--supplemental - 1,729,432 1,839,165 (109,733)
A/R--misc. 33,806 39,461 (5,655) 1,121,978 1,127,633 (5,655)
Allowance for doubtful accounts (3,263,817) (3,269,472) 5,655 (6,676,869) (6,668,397) (8,472)
------------------------------------------- -------------------------------------------
Accounts receivable, net 2,149,076 2,149,076 - 15,220,022 14,960,253 259,769
------------------------------------------- -------------------------------------------
Costs and earnings in excess of billings - 5,259,905 4,991,375 268,530
Prepaid expenses - 450,006 543,159 (93,153)
Inventory - 1,868,762 1,949,845 (81,083)
Inventory reserve - (775,755) (872,335) 96,580
------------------------------------------- -------------------------------------------
Inventory, net - - - 1,093,007 1,077,510 15,497
------------------------------------------- -------------------------------------------
Other current assets 94,078 94,078 - 94,078 94,078 -
------------------------------------------- -------------------------------------------
TOTAL CURRENT ASSETS 2,243,154 2,243,154 - 24,965,445 24,526,193 439,252
------------------------------------------- -------------------------------------------
PROPERTY AND EQUIPMENT
Field equipment 1,000 1,000 - 2,983,509 2,837,946 145,563
Automotive equipment - - - 1,138,505 1,138,505 -
Office furniture and equipment - - - 1,192,158 1,191,363 795
Leasehold improvements - 154,773 (154,773) 124,118 300,671 (176,553)
------------------------------------------- -------------------------------------------
TOTAL PROPERTY & EQUIP., AT COST 1,000 155,773 (154,773) 5,438,290 5,468,485 (30,195)
Accum. Depreciation - (89,929) 89,929 (3,713,006) (3,732,858) 19,852
------------------------------------------- -------------------------------------------
TOTAL PROPERTY & EQUIP., NET 1,000 65,844 (64,844) 1,725,284 1,735,627 (10,343)
------------------------------------------- -------------------------------------------
Long-term accounts receivable - Other
(Texas) - - - 11,426 1,072,065 (1,060,639)
Reserve for Long-term accounts
receivable - - (218,182) 218,182
------------------------------------------- -------------------------------------------
Long-term accounts receviable - Other
(Texas), net - - - 11,426 853,883 (842,457)
Other Assets 100 100 - 352,367 352,087 280
Investment & Intercompany in
Subsidiaires - 39,665 125,000 (85,335)
------------------------------------------- -------------------------------------------
TOTAL ASSETS 2,244,254 2,309,098 (64,844) 27,094,187 27,592,790 (498,603)
------------------------------------------- -------------------------------------------
------------------------------------------- -------------------------------------------
POST PETITION CURRENT LIABILITIES
Accounts payable - - - 969,450 674,707 294,743
Line of Credit 21,988,501 21,924,239 64,262
Accrued expenses, excluding bankruptcy
costs - - - 1,308,398 1,230,974 77,424
Accrued bankruptcy costs 1,168,073 1,602,726 (434,653)
Estimated claims against cash held in
escrow 2,569,825 2,553,723 16,102
Intercompany - BNYFC 2,964,777 3,098,503 (133,726) - - -
Intercompany payables - - - - - -
------------------------------------------- -------------------------------------------
TOTAL POST PETITION CURRENT LIABILITIES 2,964,777 3,098,503 (133,726) 28,004,247 27,986,369 17,878
Intercompany Notes Payable 2,535,455 2,535,455 -
Pre Petition Liabilities 10,814,353 10,814,353 - 16,071,458 16,092,029 (20,571)
Pre Petition Estimated Construction
Claims 2,404,000 2,404,000 - 2,404,000 2,404,000 -
------------------------------------------- -------------------------------------------
TOTAL LIABILITIES 18,718,585 18,852,311 (133,726) 46,479,705 46,482,398 (2,693)
------------------------------------------- -------------------------------------------
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 (9,563,939) (9,632,821) 68,882 (29,573,294) (29,077,384) (495,910)
------------------------------------------- -------------------------------------------
TOTAL SHAREHOLDERS' EQUITY (16,474,331) (16,543,213) 68,882 (19,385,518) (18,889,608) (495,910)
------------------------------------------- -------------------------------------------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY 2,244,254 2,309,098 (64,844) 27,094,187 27,592,790 (498,603)
------------------------------------------- -------------------------------------------
------------------------------------------- -------------------------------------------
</TABLE>
See accompanying notes to financial 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
SEPT. 30, 1998 AUGUST 31, 1998 SEPT. 30, 1998 AUGUST 31, 1998
ESD ESD CHANGE PSD PSD CHANGE
------------------------------------------- -------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales 1,655,398 1,712,957 (57,559) 271,203 330,370 (59,167)
Cost of Sales 1,171,058 1,221,871 (50,813) 281,551 344,567 (63,016)
------------------------------------------- -------------------------------------------
Gross Profit 484,340 491,086 (6,746) (10,348) (14,197) 3,849
Selling, General, and Administrative 395,718 414,529 (18,811) 129,818 146,250 (16,432)
------------------------------------------- -------------------------------------------
Income (Loss) From Operations 88,622 76,557 12,065 (140,166) (160,447) 20,281
Other Income(Expense):
I/C Interest Income (Expense) (65,656) (68,054) 2,398 (70,049) (70,582) 533
Interest Expense - - - -
Interest Income - - - -
Gain (loss) on Asset Disposition - (3,100) 3,100 (7,891) (25,112) 17,221
Other Expense (165,461) (9,412) (156,049) 6,246 (7,264) 13,510
------------------------------------------- -------------------------------------------
Total Other (Expense) (231,117) (80,566) (150,551) (71,694) (102,958) 31,264
Net Income (Loss) Before Bankruptcy
Administrative Expenses (142,495) (4,009) (138,486) (211,860) (263,405) 51,545
Bankruptcy Administrative Expenses -
------------------------------------------- -------------------------------------------
Net Income (Loss) (142,495) (4,009) (138,486) (211,860) (263,405) 51,545
------------------------------------------- -------------------------------------------
------------------------------------------- -------------------------------------------
</TABLE>
See accompanying notes to financial 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 SEPT. 30, 1998 AUGUST 31, 1998
SEPT. 30, 1998 AUGUST 31, 1998 CONTINUING CONTINUING
CORPORATE CORPORATE CHANGE OPERATIONS OPERATIONS CHANGE
------------------------------------------- -------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales - - - 1,926,601 2,043,327 (116,726)
Cost of Sales - - - 1,452,609 1,566,438 (113,829)
------------------------------------------- -------------------------------------------
Gross Profit - - - 473,992 476,889 (2,897)
Selling, General, and Administrative 107,057 139,957 (32,900) 632,593 700,736 (68,143)
------------------------------------------- -------------------------------------------
Income (Loss) From Operations (107,057) (139,957) 32,900 (158,601) (223,847) 65,246
Other Income(Expense):
I/C Interest Income (Expense) 135,705 138,636 (2,931) - - -
Interest Expense (210,203) (204,238) (5,965) (210,203) (204,238) (5,965)
Interest Income - - - -
Gain (loss) on Asset Disposition - (7,891) (28,212) 20,321
Other Expense (25,000) (338,545) 313,545 (184,215) (355,221) 171,006
------------------------------------------- -------------------------------------------
Total Other (Expense) (99,498) (404,147) 304,649 (402,309) (587,671) 185,362
Net Income (Loss) Before Bankruptcy
Administrative Expenses (206,555) (544,104) 337,549 (560,910) (811,518) 250,608
Bankruptcy Administrative Expenses (3,882) 120,483 (124,365) (3,882) 120,483 (124,365)
------------------------------------------- -------------------------------------------
Net Income (Loss) (210,437) (423,621) 213,184 (564,792) (691,035) 126,243
------------------------------------------- -------------------------------------------
------------------------------------------- -------------------------------------------
</TABLE>
See accompanying notes to financial 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
SEPT. 30, 1998 AUGUST 31, 1998 SEPT. 30, 1998 AUGUST 31, 1998
DISCONTINUED DISCONTINUED COMBINED COMBINED
OPERATIONS OPERATIONS CHANGE FINAL FINAL CHANGE
------------------------------------------- -------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SALES - 1,926,601 2,043,327 (116,726)
COST OF SALES - 1,452,609 1,566,438 (113,829)
------------------------------------------- -------------------------------------------
GROSS PROFIT - - - 473,992 476,889 (2,897)
SELLING, GENERAL, AND ADMINISTRATIVE - 632,593 700,736 (68,143)
------------------------------------------- -------------------------------------------
INCOME (LOSS) FROM OPERATIONS - - - (158,601) (223,847) 65,246
OTHER INCOME(EXPENSE):
I/C INTEREST INCOME (EXPENSE) - - - -
INTEREST EXPENSE - (210,203) (204,238) (5,965)
INTEREST INCOME - - - -
GAIN (LOSS) ON ASSET DISPOSITION 92,627 92,627 84,736 (28,212) 112,948
OTHER EXPENSE (23,745) (23,745) (207,960) (355,221) 147,261
------------------------------------------- -------------------------------------------
TOTAL OTHER (EXPENSE) 68,882 - 68,882 (333,427) (587,671) 254,244
NET INCOME (LOSS) BEFORE BANKRUPTCY
ADMINISTRATIVE EXPENSES 68,882 - 68,882 (492,028) (811,518) 319,490
BANKRUPTCY ADMINISTRATIVE EXPENSES - (3,882) 120,483 (124,365)
------------------------------------------- -------------------------------------------
NET INCOME (LOSS) 68,882 - 68,882 (495,910) (691,035) 195,125
------------------------------------------- -------------------------------------------
------------------------------------------- -------------------------------------------
</TABLE>
See accompanying notes to financial 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
SEPT. 30, 1998 AUGUST 31, 1998 CHANGE
-------------- --------------- --------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss ($495,910) ($691,035) $195,125
Adjustments to reconcile net loss to net cash
(used in) provided by operating activities:
Depreciation 71,095 73,499 (2,404)
Additional reserves for costs in excess of billings 165,795 10,000 155,795
Write off of investments in subsidiaries 85,335 300,000 (214,665)
Write down of property and equipment 7,606 7,606
(Gain) / Loss on sale of property and equipment (84,736) 28,212 (112,948)
Change in certain assets & liabilities:
(Increase) decrease in:
Receivables, net (259,769) 203,062 (462,831)
Costs in excess of billings (434,325) (346,831) (87,494)
Inventory, net (15,497) 62,833 (78,330)
Prepaids & other assets 93,153 (16,421) 109,574
Increase (decrease) in:
Accounts payable 294,743 150,457 144,286
Accrued expenses (357,229) (355,359) (1,870)
Other net changes in assets and liabilities 851,903 (24,659) 876,562
Total adjustments 418,074 84,793 333,281
-------------- --------------- --------------
Net cash provided by (used in) operating activities (77,836) (606,242) 528,406
-------------- --------------- --------------
Cash flows from investing activities :
Proceeds from sale of equipment 157,470 0 157,470
Additions to property and equipment (141,092) (32,738) (108,354)
Net cash provided by (used in) investing activities 16,378 (32,738) 49,116
-------------- --------------- --------------
Cash flows from financing and other activities:
Net proceeds (repayments) from revolver credit loan 64,262 639,373 (575,111)
Reduction of pre-petition liabilities (20,571) 12,222 (32,793)
Net cash provided by (used in) financing activities 43,691 651,595 (607,904)
-------------- --------------- --------------
Net increase (decrease) in cash (17,767) 12,615 (30,382)
-------------- --------------- --------------
CASH AT BEGINNING OF PERIOD 136,639 124,024 12,615
-------------- --------------- --------------
CASH AT END OF PERIOD $118,872 $136,639 ($17,767)
-------------- --------------- --------------
-------------- --------------- --------------
</TABLE>
See accompanying notes to financial information.
<PAGE>
EXHIBIT 99.1
Omega Environmental, Inc.
Debtor in Possession Case # 97-06084
September 30, 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 September 30, 1998, the Company's borrowings from BNY Financial
Corporation ("BNYFC") were $21,649,400. 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.
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.
