<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) February 23, 1999
-----------------------
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
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
550 KIRKLAND WAY, SUITE 200, KIRKLAND, WASHINGTON 98033
PO BOX 3005 BOTHELL, WASHINGTON 98041-3005
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
425-739-2072
(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 February 23, 1999, the Registrant filed unaudited financial
statement information as of and for each of the months ended
December 31, 1998 and November 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 December 31, 1998
and November 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: February 23, 1999 /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)
DEC. 31, 1998 NOV. 30, 1998 DEC. 31, 1998 NOV. 30, 1998
ESD ESD CHANGE PSD PSD CHANGE
----------------------------------------- --------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash - 42,977 (42,977) 28,386 61,764 (33,378)
Restricted cash held in escrow 2,738,168 2,732,721 5,447 -
Accounts receivable
A/R--trade 11,898,612 12,044,307 (145,695) 524,421 624,537 (100,116)
A/R--interco - 865 (865) - - -
A/R--employees 6,803 4,883 1,920 2,400 9,450 (7,050)
A/R--supplemental 1,727,115 1,727,115 - -
A/R--misc. 12,078 12,078 - - - -
Allowance for doubtful accounts (2,123,075) (2,128,460) 5,385 (54,298) (54,240) (58)
----------------------------------------- --------------------------------------
Accounts receivable, net 11,521,533 11,660,788 (139,255) 472,523 579,747 (107,224)
----------------------------------------- --------------------------------------
Costs and earnings in excess of billings 5,442,514 5,809,441 (366,927) -
Prepaid expenses 61,045 58,078 2,967 48,028 58,823 (10,795)
Inventory - 1,006,203 1,824,979 (818,776)
Inventory reserve - (497,620) (800,414) 302,794
----------------------------------------- --------------------------------------
Inventory, net - - - 508,583 1,024,565 (515,982)
----------------------------------------- --------------------------------------
Other current assets - -
----------------------------------------- --------------------------------------
TOTAL CURRENT ASSETS 19,763,260 20,304,005 (540,745) 1,057,520 1,724,899 (667,379)
PROPERTY AND EQUIPMENT ----------------------------------------- --------------------------------------
Field equipment 2,352,810 2,352,810 - 166,580 547,106 (380,526)
Automotive equipment 1,124,549 1,124,549 - 10,871 44,973 (34,102)
Office furniture and equipment 967,334 966,762 572 7,793 38,329 (30,536)
Leasehold improvements 107,729 107,729 - 30,895 30,895 -
----------------------------------------- --------------------------------------
TOTAL PROPERTY & EQUIP., AT COST 4,552,422 4,551,850 572 216,139 661,303 (445,164)
Accum. Depreciation (3,346,117) (3,282,510) (63,607) (111,738) (356,015) 244,277
----------------------------------------- --------------------------------------
TOTAL PROPERTY & EQUIP., NET 1,206,305 1,269,340 (63,035) 104,401 305,288 (200,887)
----------------------------------------- --------------------------------------
Long-term accounts receivable - Other (Texas) 2,426 2,426 - - - -
Reserve for Long-term accounts receivable - - - -
----------------------------------------- --------------------------------------
Long-term accounts receviable - Other
(Texas), net 2,426 2,426 - - - -
Other Assets 223,609 220,483 3,126 - - -
Investment & Intercompany in Subsidiaires - - - -
----------------------------------------- --------------------------------------
TOTAL ASSETS 21,195,600 21,796,254 (600,654) 1,161,921 2,030,187 (868,266)
----------------------------------------- --------------------------------------
----------------------------------------- --------------------------------------
POST PETITION CURRENT LIABILITIES
Accounts payable 542,204 850,822 (308,618) 27,276 103,986 (76,710)
Line of Credit -
Accrued expenses, excluding bankruptcy costs 717,531 723,180 (5,649) 144,894 312,595 (167,701)
Accrued bankruptcy costs -
Estimated claims against cash held in escrow 2,578,438 2,572,992 5,446 -
Intercompany - BNYFC 7,658,341 7,725,526 (67,185) 7,817,780 7,845,978 (28,198)
Intercompany payables - - - - - -
----------------------------------------- --------------------------------------
TOTAL POST PETITION CURRENT LIABILITIES 11,496,514 11,872,520 (376,006) 7,989,950 8,262,559 (272,609)
Intercompany Notes Payable 8,741,768 8,741,768 - -
Pre Petition Liabilities 1,620,428 1,625,500 (5,072) 951,742 1,081,518 (129,776)
Pre Petition Estimated Construction Claims -
----------------------------------------- --------------------------------------
TOTAL LIABILITIES 21,858,710 22,239,788 (381,078) 8,941,692 9,344,077 (402,385)
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 (4,199,281) (3,979,705) (219,576) (6,878,016) (6,412,135) (465,881)
----------------------------------------- --------------------------------------
TOTAL SHAREHOLDERS' EQUITY (663,110) (443,534) (219,576) (7,779,771) (7,313,890) (465,881)
----------------------------------------- --------------------------------------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY 21,195,600 21,796,254 (600,654) 1,161,921 2,030,187 (868,266)
----------------------------------------- --------------------------------------
----------------------------------------- --------------------------------------
</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) DEC. 31, 1998 NOV. 30, 1998
DEC. 31, 1998 NOV. 30, 1998 CONTINUING CONTINUING
CORPORATE CORPORATE CHANGE OPERATIONS OPERATIONS CHANGE
-------------------------------------- ------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash 49,850 223,615 (173,765) 78,236 328,356 (250,120)
Restricted cash held in escrow - 2,738,168 2,732,721 5,447
Accounts receivable
A/R--trade 28,029 116,924 (88,895) 12,451,062 12,785,768 (334,706)
A/R--interco - - 865 (865)
A/R--employees - 9,203 14,333 (5,130)
A/R--supplemental - 1,727,115 1,727,115 -
A/R--misc. 1,219,094 1,076,094 143,000 1,231,172 1,088,172 143,000
Allowance for doubtful accounts (1,104,123) (1,138,466) 34,343 (3,281,496) (3,321,166) 39,670
-------------------------------------- ------------------------------------------
Accounts receivable, net 143,000 54,552 88,448 12,137,056 12,295,087 (158,031)
-------------------------------------- ------------------------------------------
Costs and earnings in excess of billings - 5,442,514 5,809,441 (366,927)
Prepaid expenses 120,175 360,919 (240,744) 229,248 477,820 (248,572)
Inventory - 1,006,203 1,824,979 (818,776)
Inventory reserve - (497,620) (800,414) 302,794
-------------------------------------- ------------------------------------------
Inventory, net - - - 508,583 1,024,565 (515,982)
-------------------------------------- ------------------------------------------
Other current assets - - - -
-------------------------------------- ------------------------------------------
TOTAL CURRENT ASSETS 313,025 639,086 (326,061) 21,133,805 22,667,990 (1,534,185)
PROPERTY AND EQUIPMENT -------------------------------------- ------------------------------------------
Field equipment - 2,519,390 2,899,916 (380,526)
Automotive equipment - 1,135,420 1,169,522 (34,102)
Office furniture and equipment 41,050 125,959 (84,909) 1,016,177 1,131,050 (114,873)
Leasehold improvements - - - 138,624 138,624 -
-------------------------------------- ------------------------------------------
TOTAL PROPERTY & EQUIP., AT COST 41,050 125,959 (84,909) 4,809,611 5,339,112 (529,501)
Accum. Depreciation (32,643) (109,176) 76,533 (3,490,498) (3,747,701) 257,203
-------------------------------------- ------------------------------------------
TOTAL PROPERTY & EQUIP., NET 8,407 16,783 (8,376) 1,319,113 1,591,411 (272,298)
-------------------------------------- ------------------------------------------
Long-term accounts receivable - Other (Texas) - - - 2,426 2,426 -
Reserve for Long-term accounts receivable - - - -
-------------------------------------- ------------------------------------------
Long-term accounts receviable - Other
(Texas), net - - - 2,426 2,426 -
Other Assets 129,907 129,907 - 353,516 350,390 3,126
Investment & Intercompany in Subsidiaires 74,399,948 74,399,948 - 74,399,948 74,399,948 -
-------------------------------------- ------------------------------------------
TOTAL ASSETS 74,851,287 75,185,724 (334,437) 97,208,808 99,012,165 (1,803,357)
-------------------------------------- ------------------------------------------
-------------------------------------- ------------------------------------------
POST PETITION CURRENT LIABILITIES
Accounts payable 57,417 18,120 39,297 626,897 972,928 (346,031)
Line of Credit 22,534,478 22,168,024 366,454 22,534,478 22,168,024 366,454
Accrued expenses, excluding bankruptcy costs 293,190 418,996 (125,806) 1,155,615 1,454,771 (299,156)
Accrued bankruptcy costs 1,739,109 1,975,104 (235,995) 1,739,109 1,975,104 (235,995)
Estimated claims against cash held in escrow - 2,578,438 2,572,992 5,446
Intercompany - BNYFC (18,296,028) (18,391,915) 95,887 (2,819,907) (2,820,411) 504
Intercompany payables - 865 (865) - 865 (865)
-------------------------------------- ------------------------------------------
TOTAL POST PETITION CURRENT LIABILITIES 6,328,166 6,189,194 138,972 25,814,630 26,324,273 (509,643)
Intercompany Notes Payable - 8,741,768 8,741,768
Pre Petition Liabilities 2,637,103 2,530,451 106,652 5,209,273 5,237,469 (28,196)
Pre Petition Estimated Construction Claims - - - -
-------------------------------------- ------------------------------------------
TOTAL LIABILITIES 8,965,269 8,719,645 245,624 39,765,671 40,303,510 (537,839)
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 (11,660,794) (11,080,733) (580,061) (22,738,091) (21,472,573) (1,265,518)
-------------------------------------- ------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 65,886,018 66,466,079 (580,061) 57,443,137 58,708,655 (1,265,518)
-------------------------------------- ------------------------------------------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY 74,851,287 75,185,724 (334,437) 97,208,808 99,012,165 (1,803,357)
-------------------------------------- ------------------------------------------
-------------------------------------- ------------------------------------------
</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)
DEC. 31, 1998 NOV. 30, 1998 DEC. 31, 1998 NOV. 30, 1998
DISCONTINUED DISCONTINUED COMBINED COMBINED
OPERATIONS OPERATIONS CHANGE FINAL FINAL CHANGE
--------------------------------------- ------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash - - - 78,236 328,356 (250,120)
Restricted cash held in escrow - 2,738,168 2,732,721 5,447
Accounts receivable
A/R--trade 5,068,213 5,073,027 (4,814) 17,519,275 17,858,795 (339,520)
A/R--interco - - - - - -
A/R--employees - 9,203 14,333 (5,130)
A/R--supplemental - 1,727,115 1,727,115 -
A/R--misc. 33,806 33,806 - 1,264,978 1,121,978 143,000
Allowance for doubtful accounts (3,263,839) (3,263,817) (22) (6,545,335) (6,584,983) 39,648
--------------------------------------- ------------------------------------------
Accounts receivable, net 1,838,180 1,843,016 (4,836) 13,975,236 14,137,238 (162,002)
--------------------------------------- ------------------------------------------
Costs and earnings in excess of billings - 5,442,514 5,809,441 (366,927)
Prepaid expenses - 229,248 477,820 (248,572)
Inventory - 1,006,203 1,824,979 (818,776)
Inventory reserve - (497,620) (800,414) 302,794
--------------------------------------- ------------------------------------------
Inventory, net - - - 508,583 1,024,565 (515,982)
--------------------------------------- ------------------------------------------
Other current assets 10,000 10,000 - 10,000 10,000 -
--------------------------------------- ------------------------------------------
TOTAL CURRENT ASSETS 1,848,180 1,853,016 (4,836) 22,981,985 24,520,141 (1,538,156)
PROPERTY AND EQUIPMENT --------------------------------------- ------------------------------------------
Field equipment
Automotive equipment 1,000 1,000 - 2,520,390 2,900,916 (380,526)
Office furniture and equipment - - - 1,135,420 1,169,522 (34,102)
Leasehold improvements - - - 1,016,177 1,131,050 (114,873)
- - - 138,624 138,624 -
--------------------------------------- ------------------------------------------
TOTAL PROPERTY & EQUIP., AT COST 1,000 1,000 - 4,810,611 5,340,112 (529,501)
Accum. Depreciation - - - (3,490,498) (3,747,701) 257,203
--------------------------------------- ------------------------------------------
TOTAL PROPERTY & EQUIP., NET 1,000 1,000 - 1,320,113 1,592,411 (272,298)
--------------------------------------- ------------------------------------------
Long-term accounts receivable - Other (Texas) - - - 2,426 2,426 -
Reserve for Long-term accounts receivable - - - -
--------------------------------------- ------------------------------------------
Long-term accounts receviable - Other
(Texas), net - - - 2,426 2,426 -
Other Assets - - - 353,516 350,390 3,126
Investment & Intercompany in Subsidiaires - 39,665 39,665 -
--------------------------------------- ------------------------------------------
TOTAL ASSETS 1,849,180 1,854,016 (4,836) 24,697,705 26,505,033 (1,807,328)
--------------------------------------- ------------------------------------------
--------------------------------------- ------------------------------------------
POST PETITION CURRENT LIABILITIES
Accounts payable - - - 626,897 972,928 (346,031)
Line of Credit 22,534,478 22,168,024 366,454
Accrued expenses, excluding bankruptcy costs - - - 1,155,615 1,454,771 (299,156)
Accrued bankruptcy costs 1,739,109 1,975,104 (235,995)
Estimated claims against cash held in escrow 2,578,438 2,572,992 5,446
Intercompany - BNYFC 2,819,907 2,820,411 (504) - - -
Intercompany payables - - - - - -
--------------------------------------- ------------------------------------------
TOTAL POST PETITION CURRENT LIABILITIES 2,819,907 2,820,411 (504) 28,634,537 29,143,819 (509,282)
Intercompany Notes Payable 2,535,455 2,535,455 -
Pre Petition Liabilities 10,814,353 10,814,353 - 16,023,626 16,051,822 (28,196)
Pre Petition Estimated Construction Claims 2,000,000 2,404,000 (404,000) 2,000,000 2,404,000 (404,000)
--------------------------------------- ------------------------------------------
TOTAL LIABILITIES 18,169,715 18,574,219 (404,504) 46,658,163 47,599,641 (941,478)
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 (9,410,143) (9,809,811) 399,668 (32,148,234) (31,282,384) (865,850)
--------------------------------------- ------------------------------------------
TOTAL SHAREHOLDERS' EQUITY (16,320,535) (16,720,203) 399,668 (21,960,458) (21,094,608) (865,850)
--------------------------------------- ------------------------------------------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY 1,849,180 1,854,016 (4,836) 24,697,705 26,505,033 (1,807,328)
--------------------------------------- ------------------------------------------
--------------------------------------- ------------------------------------------
</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
DEC. 31, 1998 NOV. 30, 1998 DEC. 31, 1998 NOV. 30, 1998
ESD ESD CHANGE PSD PSD CHANGE
------------------------------------------ -------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales 1,307,449 1,458,584 (151,135) 126,569 272,586 (146,017)
Cost of Sales 1,052,980 930,730 122,250 131,792 297,623 (165,831)
------------------------------------------ -------------------------------------------
Gross Profit 254,469 527,854 (273,385) (5,223) (25,037) 19,814
Selling, General, and Administrative 406,988 380,772 26,216 59,372 124,707 (65,335)
------------------------------------------ -------------------------------------------
Income (Loss) From Operations (152,519) 147,082 (299,601) (64,595) (149,744) 85,149
Other Income(Expense):
I/C Interest Income (Expense) (67,611) (67,030) (581) (70,415) (68,369) (2,046)
Interest Expense (74) - (74) -
Interest Income - - - -
Gain (loss) on Asset Disposition - (909) 909 (331,087) (3,014) (328,073)
Other Expense 628 256 372 216 (220) 436
------------------------------------------ -------------------------------------------
Total Other (Expense) (67,057) (67,683) 626 (401,286) (71,603) (329,683)
Net Income (Loss) Before Bankruptcy
Administrative Expenses (219,576) 79,399 (298,975) (465,881) (221,347) (244,534)
Bankruptcy Administrative Expenses -
------------------------------------------ -------------------------------------------
Net Income (Loss) (219,576) 79,399 (298,975) (465,881) (221,347) (244,534)
------------------------------------------ -------------------------------------------
</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 DEC. 31, 1998 NOV. 30, 1998
DEC. 31, 1998 NOV. 30, 1998 CONTINUING CONTINUING
CORPORATE CORPORATE CHANGE OPERATIONS OPERATIONS CHANGE
------------------------------------------- ------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales - - - 1,434,018 1,731,170 (297,152)
Cost of Sales - - - 1,184,772 1,228,353 (43,581)
------------------------------------------- ------------------------------------------
Gross Profit - - - 249,246 502,817 (253,571)
Selling, General, and Administrative 134,494 107,235 27,259 600,854 612,714 (11,860)
------------------------------------------- ------------------------------------------
Income (Loss) From Operations (134,494) (107,235) (27,259) (351,608) (109,897) (241,711)
Other Income(Expense):
I/C Interest Income (Expense) 138,026 135,399 2,627 - - -
Interest Expense (197,626) (190,675) (6,951) (197,700) (190,675) (7,025)
Interest Income - - - -
Gain (loss) on Asset Disposition (8,376) - (8,376) (339,463) (3,923) (335,540)
Other Expense (173,176) - (173,176) (172,332) 36 (172,368)
------------------------------------------- ------------------------------------------
Total Other (Expense) (241,152) (55,276) (185,876) (709,495) (194,562) (514,933)
Net Income (Loss) Before Bankruptcy
Administrative Expenses (375,646) (162,511) (213,135) (1,061,103) (304,459) (756,644)
Bankruptcy Administrative Expenses (204,415) (157,879) (46,536) (204,415) (157,879) (46,536)
------------------------------------------- ------------------------------------------
Net Income (Loss) (580,061) (320,390) (259,671) (1,265,518) (462,338) (803,180)
------------------------------------------- ------------------------------------------
</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
DEC. 31, 1998 NOV. 30, 1998 DEC. 31, 1998 NOV. 30, 1998
DISCONTINUED DISCONTINUED COMBINED COMBINED
OPERATIONS OPERATIONS CHANGE FINAL FINAL CHANGE
-------------------------------------- -----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales - 1,434,018 1,731,170 (297,152)
Cost of Sales - 1,184,772 1,228,353 (43,581)
-------------------------------------- -----------------------------------------
Gross Profit - - - 249,246 502,817 (253,571)
Selling, General, and Administrative - 600,854 612,714 (11,860)
-------------------------------------- -----------------------------------------
Income (Loss) From Operations - - - (351,608) (109,897) (241,711)
Other Income(Expense):
I/C Interest Income (Expense) - - - -
Interest Expense - (197,700) (190,675) (7,025)
Interest Income - - - -
Gain (loss) on Asset Disposition - (339,463) (3,923) (335,540)
Other Expense 399,668 (327) 399,995 227,336 (291) 227,627
-------------------------------------- -----------------------------------------
Total Other (Expense) 399,668 (327) 399,995 (309,827) (194,889) (114,938)
Net Income (Loss) Before Bankruptcy
Administrative Expenses 399,668 (327) 399,995 (661,435) (304,786) (356,649)
Bankruptcy Administrative Expenses - (204,415) (157,879) (46,536)
-------------------------------------- -----------------------------------------
Net Income (Loss) 399,668 (327) 399,995 (865,850) (462,665) (403,185)
-------------------------------------- -----------------------------------------
</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
DEC. 31, 1998 NOV. 30, 1998 CHANGE
------------- ------------- ----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss ($865,850) ($462,665) ($403,185)
Adjustments to reconcile net loss to net cash
(used in) provided by operating activities:
Depreciation 67,459 78,677 (11,218)
Change in estmate of pre-petition construction claims (400,000) 0 (400,000)
Write down of worker's compensation refund 192,660 0 192,660
(Gain) / Loss on sale of property and equipment 339,463 (3,923) 343,386
Change in certain assets & liabilities:
(Increase) decrease in:
Receivables, net 162,002 (8,576) 170,578
Costs in excess of billings 366,927 (199,622) 566,549
Inventory, net 515,982 45,765 470,217
Prepaids & other assets 55,912 51,261 4,651
Increase (decrease) in:
Accounts payable (346,031) 41,361 (387,392)
Accrued expenses (535,151) 110,000 (645,151)
Other net changes in assets and liabilities (3,127) 5,066 (8,193)
Total adjustments 416,096 120,009 296,087
------------- ----------- ------------
Net cash provided by (used in) operating activities (449,754) (342,656) (107,098)
------------- ----------- ------------
Cash flows from investing activities :
Proceeds from sale of equipment (134,053) 0 (134,053)
Additions to property and equipment (571) (20,208) 19,637
------------- ----------- ------------
Net cash provided by (used in) investing activities (134,624) (20,208) (114,416)
------------- ----------- ------------
Cash flows from financing and other activities:
Net proceeds (repayments) from revolver credit loan 366,454 407,493 (41,039)
Reduction of pre-petition liabilities (32,196) (8,846) (23,350)
Net cash provided by (used in) financing activities 334,258 398,647 (64,389)
------------- ----------- ------------
Net increase (decrease) in cash (250,120) 35,783 (285,903)
------------- ----------- ------------
CASH AT BEGINNING OF PERIOD 328,356 292,573 35,783
------------- ----------- ------------
CASH AT END OF PERIOD $78,236 $328,356 ($250,120)
------------- ----------- ------------
------------- ----------- ------------
</TABLE>
See accompanying notes to financial statement information.
<PAGE>
EXHIBIT 99.1
Omega Environmental, Inc.
Debtor in Possession Case # 97-06084
December 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 December 31, 1998, the Company's borrowings from BNY Financial Corporation
("BNYFC") were $22,534,478. On February 9, 1999, the Company successfully
negotiated with BNYFC for continuance of debtor-in-possession financing through
June 30, 1999.
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.
Accounts receivable recorded on the Corporate balance sheet of $143,000
represents funds held in escrow at Debtor's Bankruptcy Counsel as a result of
the Petroleum Services Division (PSD) Houston branch asset sale in December
1998. The funds are held in escrow to pay priority tax lien on such assets to
Texas tax authorities.
Property and Equipment
Property and Equipment recorded on Petroleum Services Division Operation's
balance sheet decreased $445,164 in December 1998 due to the sale of the
Houston branch office. Loss on sale of Houston assets totaled $331,087.
Property and Equipment recorded on Corporate branch's balance sheet decreased
$84,909 in December 1998 due to office relocation and fixed asset equipment
write offs. Loss on disposal of Corporate office equipment totaled $8,376.
Prepaid Assets
Prepaid assets recorded on Corporate branch's balance sheet decreased $240,744
in December 1998 due in large part to a write-off of worker's compensation
refund which was denied to Debtor. The corresponding expense is recorded in
Other Expense on the income statement.
Pre-Petition Construction Claims
Pre-Petition Construction Claims recorded on Discontinued Operations branch's
balance sheet decreased $404,000 in December 1998 due to a revision in the
estimated liability outstanding as of December 31, 1998. The results of this
analysis are not complete at this time and any adjustment may have a material
adverse effect on the financial statements.
