<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 23, 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 ADDRESS IN LAST REPORT WAS 19805 NORTH CREEK PARKWAY,
BOTHELL, WASHINGTON 98041-3005
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On June 12, 1998, the assets of PSD's Mid Atlantic offices were sold
to JTM Services and Construction for cash of $86,500.
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 23, 1998, the Registrant filed unaudited financial
statement information as of and for each of the months ended June 30,
1998 and May 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
June 30, 1998 and May 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: October 23, 1998 /s/ Donald E. Condit
-----------------------------------
Donald E. Condit,
Chief Financial Officer
<PAGE>
OMEGA ENVIRONMENTAL, INC. EXHIBIT 99.1
DEBTOR IN POSSESSION CASE #97-06084
COMPARATIVE BALANCE SHEET INFORMATION
<TABLE>
<CAPTION>
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
JUNE 30, 1998 MAY 31, 1998 JUNE 30, 1998 MAY 31, 1998
ESD ESD CHANGE PSD PSD CHANGE
------------------------------------------ --------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash 19,894 25,102 (5,208) 39,782 70,858 (31,076)
Restricted cash held in escrow 2,723,423 2,615,491 107,932 -
Accounts receivable
A/R--trade 11,817,986 11,618,772 199,214 1,582,281 1,634,696 (52,415)
A/R--interco 751 4,719 (3,968) 5,820 433 5,387
A/R--employees 8,547 8,517 30 12,051 13,183 (1,132)
A/R--supplemental 1,843,275 1,881,922 (38,647) -
A/R--misc. 10,078 10,078 - - - -
Allowance for doubtful accounts (2,420,388) (3,059,815) 639,427 (75,409) (71,974) (3,435)
------------------------------------------- ------------------------------------
Accounts receivable, net 11,260,249 10,464,193 796,056 1,524,743 1,576,338 (51,595)
------------------------------------------- ------------------------------------
Costs and earnings in excess of billings 4,797,457 5,254,860 (457,403) -
Prepaid expenses 2,192 1,757 435 68,762 69,262 (500)
Inventory - 3,211,140 3,807,915 (596,775)
Inventory reserve - (1,265,876) (1,573,649) 307,773
------------------------------------------- ------------------------------------
Inventory, net - - - 1,945,264 2,234,266 (289,002)
------------------------------------------- ------------------------------------
Other current assets - -
------------------------------------------- ------------------------------------
TOTAL CURRENT ASSETS 18,803,215 18,361,403 441,812 3,578,551 3,950,724 (372,173)
------------------------------------------- ------------------------------------
PROPERTY AND EQUIPMENT
Field equipment 2,249,482 2,230,731 18,751 677,216 458,990 218,226
Automotive equipment 1,026,959 1,031,192 (4,233) 459,649 755,795 (296,146)
Office furniture and equipment 839,643 831,634 8,009 307,139 759,734 (452,595)
Leasehold improvements 93,223 93,223 - 94,106 94,106 -
------------------------------------------- ------------------------------------
TOTAL PROPERTY & EQUIP., AT COST 4,209,307 4,186,780 22,527 1,538,110 2,068,625 (530,515)
Accum. Depreciation (2,852,761) (2,780,813) (71,948) (906,961) (1,290,130) 383,169
------------------------------------------- ------------------------------------
TOTAL PROPERTY & EQUIP., NET 1,356,546 1,405,967 (49,421) 631,149 778,495 (147,346)
------------------------------------------- ------------------------------------
Long-term accounts receivable - Other (Texas) 1,053,883 1,053,883 - - - -
Reserve for Long-term accounts receivable (400,000) (350,000) (50,000) -
------------------------------------------- ------------------------------------
Long-term accounts receviable - Other
(Texas), net 653,883 703,883 (50,000) - - -
Other Assets 201,533 177,975 23,558 - - -
Investment & Intercompany in Subsidiaires - - - -
------------------------------------------- ------------------------------------
TOTAL ASSETS 21,015,177 20,649,228 365,949 4,209,700 4,729,219 (519,519)
------------------------------------------- ------------------------------------
------------------------------------------- ------------------------------------
POST PETITION CURRENT LIABILITIES
Accounts payable 351,613 202,999 148,614 98,859 59,429 39,430
Line of Credit -
Accrued expenses, excluding bankruptcy costs 620,505 504,938 115,567 361,886 428,443 (66,557)
Accrued bankruptcy costs -
Estimated claims against cash held in escrow 2,563,555 2,455,730 107,825 -
Intercompany - BNYFC 7,376,889 7,983,004 (606,115) 8,466,374 8,386,196 80,178
Intercompany payables 5,820 433 5,387 751 4,719 (3,968)
------------------------------------------- ------------------------------------
TOTAL POST PETITION CURRENT LIABILITIES 10,918,382 11,147,104 (228,722) 8,927,870 8,878,787 49,083
Intercompany Notes Payable 8,741,768 8,741,768 - -
Pre Petition Liabilities 1,650,561 2,192,548 (541,987) 1,099,919 1,041,017 58,902
Pre Petition Estimated Construction Claims -
------------------------------------------- ------------------------------------
TOTAL LIABILITIES 21,310,711 22,081,420 (770,709) 10,027,789 9,919,804 107,985
------------------------------------------- ------------------------------------
SHAREHOLDERS' EQUITY
Common stock at par 3,371,172 3,371,172 -
Additional paid in capital 14,557,677 17,791,864 (3,234,187) 10,742,189 10,742,189 -
Treasury Stock A-P-I-C -
Retained earnings - prior (11,012,975) (15,563,780) 4,550,805 (14,767,222) (14,767,222) -
Y-T-D net income pre petition (8,531) (26,496) 17,965 (247,894) (247,894) -
Y-T-D net income post petition (3,831,705) (3,633,780) (197,925) (4,916,334) (4,288,830) (627,504)
------------------------------------------- ------------------------------------
TOTAL SHAREHOLDERS' EQUITY (295,534) (1,432,192) 1,136,658 (5,818,089) (5,190,585) (627,504)
------------------------------------------- ------------------------------------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY 21,015,177 20,649,228 365,949 4,209,700 4,729,219 (519,519)
------------------------------------------- ------------------------------------
------------------------------------------- ------------------------------------
</TABLE>
See accompanying notes to financial statement information.
<PAGE>
OMEGA ENVIRONMENTAL, INC.
DEBTOR IN POSSESSION CASE #97-06084
COMPARATIVE BALANCE SHEET INFORMATION
<TABLE>
<CAPTION>
(UNAUDITED) (UNAUDITED)
(UNAUDITED) (UNAUDITED) June 30, 1998 May 31, 1998
JUNE 30, 1998 MAY 31, 1998 CONTINUING CONTINUING
CORPORATE CORPORATE CHANGE OPERATIONS OPERATIONS CHANGE
----------------------------------------- ------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash 272,689 566,783 (294,094) 332,365 662,743 (330,378)
Restricted cash held in escrow - 2,723,423 2,615,491 107,932
Accounts receivable
A/R--trade 144,431 144,431 - 13,544,698 13,397,899 146,799
A/R--interco - 6,571 5,152 1,419
A/R--employees - 20,598 21,700 (1,102)
A/R--supplemental - 1,843,275 1,881,922 (38,647)
A/R--misc. 1,076,094 1,076,094 - 1,086,172 1,086,172 -
Allowance for doubtful accounts (1,138,467) (1,138,467) - (3,634,264) (4,270,256) 635,992
------------------------------------------- ------------------------------------
Accounts receivable, net 82,058 82,058 - 12,867,050 12,122,589 744,461
------------------------------------------- ------------------------------------
Costs and earnings in excess of billings - 4,797,457 5,254,860 (457,403)
Prepaid expenses 421,158 479,480 (58,322) 492,112 550,499 (58,387)
Inventory - 3,211,140 3,807,915 (596,775)
Inventory reserve - (1,265,876) (1,573,649) 307,773
------------------------------------------- ------------------------------------
Inventory, net - - - 1,945,264 2,234,266 (289,002)
------------------------------------------- ------------------------------------
Other current assets - - - -
------------------------------------------- ------------------------------------
TOTAL CURRENT ASSETS 775,905 1,128,321 (352,416) 23,157,671 23,440,448 (282,777)
------------------------------------------- ------------------------------------
PROPERTY AND EQUIPMENT
Field equipment - 2,926,698 2,689,721 236,977
Automotive equipment - 1,486,608 1,786,987 (300,379)
Office furniture and equipment 310,472 310,472 - 1,457,254 1,901,840 (444,586)
Leasehold improvements 21,780 21,780 - 209,109 209,109 -
------------------------------------------- ------------------------------------
TOTAL PROPERTY & EQUIP., AT COST 332,252 332,252 - 6,079,669 6,587,657 (507,988)
Accum. Depreciation (284,671) (282,439) (2,232) (4,044,393) (4,353,382) 308,989
------------------------------------------- ------------------------------------
TOTAL PROPERTY & EQUIP., NET 47,581 49,813 (2,232) 2,035,276 2,234,275 (198,999)
------------------------------------------- ------------------------------------
Long-term accounts receivable - Other (Texas) - - - 1,053,883 1,053,883 -
Reserve for Long-term accounts receivable - (400,000) (350,000) (50,000)
------------------------------------------- ------------------------------------
Long-term accounts receviable - Other
(Texas), net - - - 653,883 703,883 (50,000)
Other Assets 129,907 129,907 - 331,440 307,882 23,558
Investment & Intercompany in Subsidiaires 74,785,282 74,785,282 - 74,785,282 74,785,282 -
------------------------------------------- ------------------------------------
TOTAL ASSETS 75,738,675 76,093,323 (354,648) 100,963,552 101,471,770 (508,218)
------------------------------------------- ------------------------------------
------------------------------------------- ------------------------------------
POST PETITION CURRENT LIABILITIES
Accounts payable 31,845 8,544 23,301 482,317 270,972 211,345
Line of Credit 20,657,990 20,521,323 136,667 20,657,990 20,521,323 136,667
Accrued expenses, excluding bankruptcy costs 490,448 465,177 25,271 1,472,839 1,398,558 74,281
Accrued bankruptcy costs 2,708,275 2,968,800 (260,525) 2,708,275 2,968,800 (260,525)
Estimated claims against cash held in escrow - 2,563,555 2,455,730 107,825
Intercompany - BNYFC (19,240,465) (18,969,927) (270,538) (3,397,202) (2,600,727) (796,475)
Intercompany payables - 6,571 5,152 1,419
------------------------------------------- ------------------------------------
TOTAL POST PETITION CURRENT LIABILITIES 4,648,093 4,993,917 (345,824) 24,494,345 25,019,808 (525,463)
Intercompany Notes Payable - 8,741,768 8,741,768
Pre Petition Liabilities 2,533,181 2,533,443 (262) 5,283,661 5,767,008 (483,347)
Pre Petition Estimated Construction Claims - - - -
------------------------------------------- ------------------------------------
TOTAL LIABILITIES 7,181,274 7,527,360 (346,086) 38,519,774 39,528,584(1,008,810)
------------------------------------------- ------------------------------------
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 - 153,504,496 156,738,683(3,234,187)
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) (79,652,105)4,550,805
Y-T-D net income pre petition (895,498) (895,498) - (1,151,923) (1,169,888) 17,965
Y-T-D net income post petition (8,989,411) (8,980,849) (8,562) (17,737,450) (16,903,459) (833,991)
------------------------------------------- ------------------------------------
TOTAL SHAREHOLDERS' EQUITY 68,557,401 68,565,963 (8,562) 62,443,778 61,943,186 500,592
------------------------------------------- ------------------------------------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY 75,738,675 76,093,323 (354,648) 100,963,552 101,471,770 (508,218)
------------------------------------------- ------------------------------------
------------------------------------------- ------------------------------------
</TABLE>
See accompanying notes to financial statement information.
<PAGE>
OMEGA ENVIRONMENTAL, INC.
DEBTOR IN POSSESSION CASE #97-06084
COMPARATIVE BALANCE SHEET INFORMATION
<TABLE>
<CAPTION>
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
JUNE 30, 1998 MAY 31, 1998 JUNE 30, 1998 MAY 31, 1998
DISCONTINUED DISCONTINUED COMBINED COMBINED
OPERATIONS OPERATIONS CHANGE FINAL FINAL CHANGE
---------------------------------------- ------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash - - - 332,365 662,743 (330,378)
Restricted cash held in escrow - 2,723,423 2,615,491 107,932
Accounts receivable
A/R--trade 5,692,755 5,189,987 502,768 19,237,453 18,587,886 649,567
A/R--interco - - - - - -
A/R--employees - 20,598 21,700 (1,102)
A/R--supplemental - 1,843,275 1,881,922 (38,647)
A/R--misc. 40,641 40,641 - 1,126,813 1,126,813 -
Allowance for doubtful accounts (3,315,537) (2,807,723) (507,814) (6,949,801) (7,077,979) 128,178
------------------------------------------ -------------------------------------
Accounts receivable, net 2,417,859 2,422,905 (5,046) 15,278,338 14,540,342 737,996
------------------------------------------ -------------------------------------
Costs and earnings in excess of billings - 4,797,457 5,254,860 (457,403)
Prepaid expenses - 492,112 550,499 (58,387)
Inventory - 3,211,140 3,807,915 (596,775)
Inventory reserve - (1,265,876) (1,573,649) 307,773
------------------------------------------ -------------------------------------
Inventory, net - - - 1,945,264 2,234,266 (289,002)
------------------------------------------ -------------------------------------
Other current assets 94,078 94,078 - 94,078 94,078 -
------------------------------------------ -------------------------------------
TOTAL CURRENT ASSETS 2,511,937 2,516,983 (5,046) 25,663,037 25,952,279 (289,242)
------------------------------------------ -------------------------------------
PROPERTY AND EQUIPMENT
Field equipment 1,000 1,000 - 2,927,698 2,690,721 236,977
Automotive equipment - - - 1,486,608 1,786,987 (300,379)
Office furniture and equipment - - - 1,457,254 1,901,840 (444,586)
Leasehold improvements 154,773 154,773 - 363,882 363,882 -
------------------------------------------ -------------------------------------
TOTAL PROPERTY & EQUIP., AT COST 155,773 155,773 - 6,235,442 6,743,430 (507,988)
Accum. Depreciation (89,929) (89,929) - (4,134,322) (4,443,311) 308,989
------------------------------------------ -------------------------------------
TOTAL PROPERTY & EQUIP., NET 65,844 65,844 - 2,101,120 2,300,119 (198,999)
------------------------------------------ -------------------------------------
Long-term accounts receivable - Other (Texas) - - - 1,053,883 1,053,883 -
Reserve for Long-term accounts receivable - (400,000) (350,000) (50,000)
------------------------------------------ -------------------------------------
Long-term accounts receviable - Other
(Texas), net - - - 653,883 703,883 (50,000)
Other Assets 100 100 - 331,540 307,982 23,558
Investment & Intercompany in Subsidiaires - 425,000 425,000 -
------------------------------------------ -------------------------------------
TOTAL ASSETS 2,577,881 2,582,927 (5,046) 29,174,580 29,689,263 (514,683)
------------------------------------------ -------------------------------------
POST PETITION CURRENT LIABILITIES
Accounts payable - - - 482,317 270,972 211,345
Line of Credit 20,657,990 20,521,323 136,667
Accrued expenses, excluding bankruptcy costs - - - 1,472,840 1,398,558 74,282
Accrued bankruptcy costs 2,708,275 2,968,800 (260,525)
Estimated claims against cash held in escrow 2,563,555 2,455,730 107,825
Intercompany - BNYFC 3,397,202 2,600,727 796,475 - - -
Intercompany payables - - - - - -
------------------------------------------ -------------------------------------
TOTAL POST PETITION CURRENT LIABILITIES 3,397,202 2,600,727 796,475 27,884,977 27,615,384 269,594
Intercompany Notes Payable 2,535,455 2,535,455 -
Pre Petition Liabilities 10,814,353 10,276,211 538,142 16,098,014 16,043,219 54,795
Pre Petition Estimated Construction Claims 2,404,000 2,404,000 - 2,404,000 2,404,000 -
------------------------------------------ -------------------------------------
TOTAL LIABILITIES 19,151,010 17,816,393 1,334,617 46,386,991 46,062,603 324,388
------------------------------------------ -------------------------------------
SHAREHOLDERS' EQUITY
Common stock at par 2,082,948 2,082,948 - 121,289 121,289 -
Additional paid in capital 28,604,818 25,370,631 3,234,187 124,480,374 124,480,374 -
Treasury Stock A-P-I-C - (562,506) (562,506) -
Retained earnings - prior (36,904,145) (32,353,340) (4,550,805) (112,005,445) (112,005,445) -
Y-T-D net income pre petition (694,013) (676,048) (17,965) (1,845,936) (1,845,936) -
Y-T-D net income post petition (9,662,737) (9,657,657) (5,080) (27,400,187) (26,561,116) (839,071)
------------------------------------------ -------------------------------------
TOTAL SHAREHOLDERS' EQUITY (16,573,129) (15,233,466) (1,339,663) (17,212,411) (16,373,340) (839,071)
------------------------------------------ -------------------------------------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY 2,577,881 2,582,927 (5,046) 29,174,580 29,689,263 (514,683)
------------------------------------------ -------------------------------------
------------------------------------------ -------------------------------------
</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
JUNE 30, 1998 MAY 31, 1998 JUNE 30, 1998 MAY 31, 1998
ESD ESD CHANGE PSD PSD CHANGE
---------------------------------------- -----------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales 1,413,186 1,022,634 390,552 471,500 614,049 (142,549)
Cost of Sales 930,830 777,840 152,990 517,001 589,834 (72,833)
----------------------------------------- ------------------------------------
Gross Profit 482,356 244,794 237,562 (45,501) 24,215 (69,716)
Selling, General, and Administrative 413,927 386,168 27,759 210,587 196,355 14,232
----------------------------------------- ------------------------------------
Income (Loss) From Operations 68,429 (141,374) 209,803 (256,088) (172,140) (83,948)
Other Income(Expense):
I/C Interest Income (Expense) (71,083) (70,025) (1,058) (73,915) (73,198) (717)
Interest Expense (11) (26) 15 -
Interest Income 7,407 141 7,266 -
Gain (loss) on Asset Disposition (1,499) (7,196) 5,697 (267,660) (9,430) (258,230)
Other Expense (201,168) (233,845) 32,677 (29,841) (13,863) (15,978)
----------------------------------------- ------------------------------------
Total Other (Expense) (266,354) (310,951) 44,597 (371,416) (96,491) (274,925)
Net Income (Loss) Before Bankruptcy
Administrative Expenses (197,925) (452,325) 254,400 (627,504) (268,631) (358,873)
Bankruptcy Administrative Expenses -
----------------------------------------- ------------------------------------
Net Income (Loss) (197,925) (452,325) 254,400 (627,504) (268,631) (358,873)
----------------------------------------- ------------------------------------
</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 JUNE 30, 1998 MAY 31, 1998
JUNE 30, 1998 MAY 31, 1998 CONTINUING CONTINUING
CORPORATE CORPORATE CHANGE OPERATIONS OPERATIONS CHANGE
---------------------------------------- -----------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales - - - 1,884,686 1,636,683 248,003
Cost of Sales - - - 1,447,831 1,367,674 80,157
----------------------------------------- ------------------------------------
Gross Profit - - - 436,855 269,009 167,846
Selling, General, and Administrative 133,716 153,047 (19,331) 758,230 735,570 22,660
----------------------------------------- ------------------------------------
Income (Loss) From Operations (133,716) (153,047) 19,331 (321,375) (466,561) 145,186
Other Income(Expense):
I/C Interest Income (Expense) 144,998 143,223 1,775 - - -
Interest Expense (179,744) (183,992) 4,248 (179,755) (184,018) 4,263
Interest Income - 7,407 141 7,266
Gain (loss) on Asset Disposition - (269,159) (16,626) (252,533)
Other Expense (57,547) 4,073 (61,620) (288,556) (243,635) (44,921)
----------------------------------------- ------------------------------------
Total Other (Expense) (92,293) (36,696) (55,597) (730,063) (444,138) (285,925)
Net Income (Loss) Before Bankruptcy
Administrative Expenses (226,009) (189,743) (36,266) (1,051,438) (910,699) (140,739)
Bankruptcy Administrative Expenses 217,447 (155,211) 372,658 217,447 (155,211) 372,658
----------------------------------------- ------------------------------------
Net Income (Loss) (8,562) (344,954) 336,392 (833,991) (1,065,910) 231,919
----------------------------------------- ------------------------------------
</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
JUNE 30, 1998 MAY 31, 1998 JUNE 30, 1998 MAY 31, 1998
DISCONTINUED DISCONTINUED COMBINED COMBINED
OPERATIONS OPERATIONS CHANGE FINAL FINAL CHANGE
----------------------------------------- -----------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales - 1,884,686 1,631,964 252,722
Cost of Sales - 1,447,831 1,362,955 84,876
----------------------------------------- ------------------------------------
Gross Profit - - - 436,855 269,009 167,846
Selling, General, and Administrative - 758,230 735,570 22,660
----------------------------------------- ------------------------------------
Income (Loss) From Operations - - - (321,375) (466,561) 145,186
Other Income(Expense):
I/C Interest Income (Expense) - - - -
Interest Expense - (179,755) (184,018) 4,263
Interest Income - 7,407 141 7,266
Gain (loss) on Asset Disposition - (269,159) (16,626) (252,533)
Other Expense (5,080) 515,537 (520,617) (293,636) 252,725 (546,361)
----------------------------------------- ------------------------------------
Total Other (Expense) (5,080) 515,537 (520,617) (735,143) 52,222 (787,365)
Net Income (Loss) Before Bankruptcy
Administrative Expenses (5,080) 515,537 (520,617) (1,056,518) (414,339) (642,179)
Bankruptcy Administrative Expenses - 217,447 (155,211) 372,658
----------------------------------------- ------------------------------------
Net Income (Loss) (5,080) 515,537 (520,617) (839,071) (569,550) (269,521)
----------------------------------------- ------------------------------------
</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
JUNE 30, 1998 MAY 31, 1998 CHANGE
------------- ------------ ----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss ($839,071) ($569,550) ($269,521)
Adjustments to reconcile net loss to net cash
(used in) provided by operating activities:
Depreciation 87,043 102,743 (15,700)
Additional reserves for costs in excess of billings 200,000 225,000 (25,000)
Reserve for Long-term accounts receivable 50,000 50,000
Write down of property and equipment (169,593) (169,593)
(Gain) / Loss on sale of property and equipment 269,159 16,626 252,533
Change in certain assets & liabilities:
(Increase) decrease in:
Receivables, net (687,996) 596,165 (1,284,161)
Costs in excess of billings 257,403 216,913 40,490
Inventory, net 289,002 80,454 208,548
Prepaids & other assets 58,387 (40,215) 98,602
Increase (decrease) in:
Accounts payable 211,345 (171,811) 383,156
Accrued expenses (186,244) 179,717 (365,961)
Other net changes in assets and liabilities (181,490) 20,605 (202,095)
--------- --------- -----------
Total adjustments 304,841 1,226,197 (921,356)
--------- --------- -----------
Net cash provided by (used in) operating activities (534,230) 656,647 (1,190,877)
Cash flows from investing activities :
Proceeds from sale of equipment 39,150 56,100 (16,950)
Additions to property and equipment (26,760) (15,700) (11,060)
--------- --------- -----------
Net cash provided by (used in) investing activities 12,390 40,400 (28,010)
Cash flows from financing and other activities:
Net proceeds (repayments) from revolver credit loan 136,667 (278,374) 415,041
Reduction of pre-petition liabilities 54,795 (540,068) 594,863
--------- --------- -----------
Net cash provided by (used in) financing activities 191,462 (818,442) 1,009,904
--------- --------- -----------
Net increase (decrease) in cash (330,378) (121,395) (208,983)
CASH AT BEGINNING OF PERIOD 662,743 784,138 (121,395)
--------- --------- -----------
CASH AT END OF PERIOD $332,365 $662,743 ($330,378)
--------- --------- -----------
--------- --------- -----------
</TABLE>
See accompanying notes to financial statement information.
<PAGE>
EXHIBIT 99.1
Omega Environmental, Inc.
Debtor in Possession Case # 97-06084
June 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 June 30, 1998, the Company's borrowings from BNY Financial Corporation
("BNYFC") were $20,657,990. 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 $225,000 and $200,000 of write-offs in May and June 1998, respectively. 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.
