SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2000
Commission File Number: 0-17493
OMNI U.S.A., INC.
(Exact name of registrant as specified in its charter)
NEVADA 88-0237223
(State of Incorporation) (IRS Employer Identification No.)
7502 MESA ROAD, HOUSTON, TEXAS 77028
(Address of principal executive offices)
(713) 635-6331
(Issuer's Telephone Number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports) and (2) has been
subject to such filing requirements for the past 90 days. Yes X No ____
At February 14, 2001, there were 3,623,092 shares of common stock $.004995 par
value outstanding.
OMNI U.S.A., INC. AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets
December 31, 2000 and June 30, 2000
Condensed Consolidated Statements of Operations
Three Months and Six Months Ended December 31, 2000 and
December 31, 1999
Consolidated Statements of Changes in Stockholders' Equity and Accumulated Other
Comprehensive Income
Condensed Consolidated Statements of Cash Flows
Three Months and Six Months Ended December 31, 2000 and
December 31, 1999
Notes to Condensed Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
OMNI U.S.A., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
December 31, 2000 June 30, 2000
(unaudited)
--------------------- --------------------
CURRENT ASSETS
Cash $358,192 $587,044
Accounts receivable, trade, net 3,531,557 3,151,091
Accounts receivable, related parties 28,507 27,613
Inventories 4,180,503 4,103,840
Prepaid expenses 117,726 51,964
--------------------- -------------------
TOTAL CURRENT ASSETS 8,216,485 7,921,552
--------------------- --------------------
PROPERTY AND EQUIPMENT, net of
Accumulated depreciation and amortization 2,285,235 2,103,603
--------------------- --------------------
OTHER ASSETS
Primarily intangible assets, net 214,639 215,822
--------------------- --------------------
TOTAL ASSETS $10,716,359 $10,240,977
===================== ====================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $2,510,726 $1,895,015
Line of credit 2,694,142 2,626,457
Accrued expenses 314,399 474,758
Current portion of long-term debt 492,590 425,369
--------------------- --------------------
TOTAL CURRENT LIABILITIES 6,011,857 5,421,599
--------------------- --------------------
LONG-TERM DEBT 1,486,656 1,462,236
--------------------- --------------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock 18,384 18,384
Additional paid-in capital 5,360,560 5,360,560
Treasury stock (57,141) (57,141)
Retained earnings (deficit) (2,201,759) (2,062,692)
Accumulated other comprehensive income - foreign
currency translation adjustment 97,802 98,031
--------------------- --------------------
TOTAL STOCKHOLDERS' EQUITY 3,217,846 3,357,142
--------------------- --------------------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $10,716,359 $10,240,977
===================== ====================
The accompanying notes are an integral part of the condensed consolidated
financial statements.
OMNI U.S.A., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS AND THE SIX MONTHS ENDED DECEMBER 31, 2000 AND 1999
THREE MONTHS THREE MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMER 31, DECEMER 31,
2000 1999 2000 1999
------------------ ----------------- ----------------- ----------------
NET SALES $6,290,169 $5,053,520 $11,195,810 $8,893,968
COST OF SALES 5,052,667 3,719,782 8,987,549 6,708,494
------------------ ----------------- ----------------- ----------------
GROSS PROFIT 1,237,502 1,333,738 2,208,261 2,185,474
OPERATING EXPENSES
Selling, general and administrative 1,133,848 1,178,072 2,122,957 2,283,213
------------------ ----------------- ----------------- ----------------
OPERATING INCOME (LOSS) 103,654 155,666 85,304 (97,739)
OTHER INCOME (EXPENSE)
Interest expense (138,691) (87,966) (258,043) (162,832)
Other,net 19,030 (5,485) 33,672 (64,116)
------------------ ----------------- ----------------- ----------------
TOTAL OTHER INCOME (EXPENSE) (119,661) (93,451) (224,371) (226,948)
------------------ ----------------- ----------------- ----------------
NET INCOME (LOSS) $(16,007) $62,215 $(139,067) $(324,687)
================== ================= ================= ================
BASIC EARNINGS (LOSS) PER SHARE $0.00 $0.02 $(0.04) $(0.09)
================== ================= ================= ================
FULLY DILUTED EARNINGS (LOSS) PER SHARE $0.00 $0.02 $(0.04) $(0.09)
================== ================= ================= ================
The accompanying notes are an integral part of the consolidated financial
statements.
OMNI U.S.A., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
AND ACCUMULATED OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED JUNE 30, 2000 AND THE SIX MONTHS ENDED DECEMBER 31, 2000
Common Stock Accumulated
Number Additional Other
Of Shares Paid-in Treasury Retained Comprehensive
Outstanding Amount Capital Stock Deficit Income Total
---------------------------------------------------------------------------------------------------
Balance, June 30, 1999 3,523,092 17,885 5,248,560 (57,141) (2,505,269) 98,031 2,802,066
Issuance of common shares 100,000 499 112,000 112,499
Net Income $ 442,577 442,577
---------------------------------------------------------------------------------------------------
Balance, June 30, 2000 3,623,092 $ 18,384 $ 5,360,560 $ (57,141) $(2,062,692) $ 98,031 $3,357,142
Net Income six months ended
December 31, 2000 (139,067) (139,067)
Other comprehensive income -
loss on foreign currency
translation adjustment (229) (229)
---------------------------------------------------------------------------------------------------
Balance, December 31, 2000 3,623,092 $ 18,384 $ 5,360,560 $ (57,141) $(2,201,759) $ 97,802 $3,217,846
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the consolidated
financial statements.
OMNI U.S.A., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS AND THE SIX MONTHS ENDED DECEMBER 31, 2000 AND 1999
THREE MONTHS THREE MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMER 31, DECEMER 31,
2000 1999 2000 1999
----------------- ----------------- ----------------- -----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (loss) $ (16,007) $ 62,215 $ (139,067) $ (324,687)
Adjustments to reconcile net income (loss) to net
cash used by operating activities:
Depreciation and amortization 90,857 82,669 191,947 182,711
Changes in operating assets and liabilities:
Accounts receivable (804,217) (676,149) (381,360) (79,369)
Inventories 113,384 (316,937) (76,663) (668,557)
Prepaid expenses 100,787 45,111 (65,762) (3,053)
Intangible assets - - - 38,502
Accounts payable and accrued expenses 411,257 195,515 455,122 34,610
----------------- ----------------- ----------------- -----------------
Total adjustments (87,932) (669,791) 123,284 (495,156)
----------------- ----------------- ----------------- -----------------
Net cash used by operating activities (103,939) (607,576) (15,783) (819,843)
----------------- ----------------- ----------------- -----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of Piecemaker, Inc. - - - (350,990)
Acquisition of other assets - - (5,975) -
Capital expenditures (65,815) (7,096) (123,262) (36,174)
----------------- ----------------- ----------------- -----------------
Net cash used by investing activities (65,815) (7,096) (129,237) (387,164)
----------------- ----------------- ----------------- -----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds of PACCAR, Inc. loan - - - 1,000,000
Proceeds of Piecemaker financing loan - - - 200,000
Borrowings on line of credit 3,521,092 3,763,096 7,244,193 7,259,289
Payments on line of credit (3,262,745) (3,798,693) (7,176,508) (7,076,905)
Payments on long-term debt (110,214) (59,418) (151,517) (108,602)
----------------- ----------------- ----------------- -----------------
Net cash provided (used) by financing activities 148,133 (95,015) (83,832) 1,273,782
----------------- ----------------- ----------------- -----------------
NET INCREASE (DECREASE) IN CASH (21,621) (709,687) (228,852) 66,775
CASH AT BEGINNING OF PERIOD 379,813 1,069,365 587,044 292,903
----------------- ----------------- ----------------- -----------------
CASH AT END OF PERIOD $ 358,192 $ 359,678 $ 358,192 $ 359,678
================= ================= ================= =================
Supplemental disclosure of non-cash investing activities
Capital expenditures financed by debt $ 243,159 $ _ $ 243,159 $ _
_
================= ================= ================= =================
The accompanying notes are an integral part of the consolidated financial
statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The consolidated financial statements have been prepared by the Company,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. The Company believes that the disclosures made in this
report are adequate to make the information presented not misleading. These
condensed financial statements should be read in conjunction with the financial
statements and the notes thereto included in the Company's latest annual report
on Form 10-KSB. In the opinion of the Company, all adjustments, consisting of
normal recurring adjustments, necessary to present fairly the financial position
of Omni U.S.A., Inc. and subsidiaries as of December 31, 2000, and the results
of their operations and cash flows for the six month and three month periods
ended December 31, 2000, and December 31, 1999, in accordance with generally
accepted accounting principles have been included.
There are significant operations in Mainland China; however, the functional
exchange rate for those operations is the U.S. dollar. The foreign currency
translation adjustment primarily arises from the translation of amounts from
operations in Hong Kong and Japan in which the functional currency is that of
the foreign location.
NEW ACCOUNTING PRONOUNCEMENT - In December 1999, the Securities and Exchange
Commission ("SEC") issued Staff Accounting Bulletin No. 101, "Revenue
Recognition in Financial Statements"("SAB 101"), which clarifies certain
existing accounting principles for the timing of revenue recognition and its
classification in the financial statements. The SEC delayed the required
implementation date of SAB 101 by issuing Staff Accounting Bulletins No. 101A,
"Amendment: Revenue Recognition in Financial Statements" and 101B, "Second
Amendment: Revenue Recognition in Financial Statements" in March and June 2000,
respectively. The Company believes its current revenue recognition policies are
in accordance with SAB 101 and that there will be no material adverse impact, if
any, upon future operations and financial condition of the Company.
2. Basic and diluted loss per share is based on the weighted average number of
shares of common stock outstanding. For the six month and three month periods
ended December 31, 2000 and December 31, 1999, the Company's weighted average
shares are calculated as follows:
Six Months Six Months
Quarter Ended Quarter Ended Ended Ended
December 31, December 31, December 31, December 31,
2000 1999 2000 1999
--------------------------------------------------------------
Weighted average common shares outstanding 3,623,092 3,606,425 3,623,092 3,615,706
Effect of dilution of securities: conversion
of stock options - 50,990 - -
--------------------------------------------------------------
Denominator for dilutive earnings per share 3,623,092 3,657,415 3,623,092 3,615,706
==============================================================
When the Company is in a net loss position, all common stock equivalents are
considered anti-dilutive and are therefore not included in the calculation of
earnings per share.
3. Interest paid on debt for the three months ended December 31, 2000 and 1999,
was $138,691 and $87,966 respectively. Interest paid on debt for the six months
ended December 31, 2000 and 1999 was $258,043 and $162,832 respectively. No
income taxes were paid during the three months or six months ended December 31,
2000 and 1999, respectively.
4. MAJOR CUSTOMERS AND VENDORS: During the six months ended December 31, 2000
and December 31, 1999, the Company and its subsidiaries had consolidated
sales of $1,898,426 and $1,862,203 to a domestic customer for a total of 17%
and 21% of consolidated sales. During the quarters ended December 31, 2000
and December 31, 1999, the Company and its subsidiaries had consolidated
sales of $1,088,543 and $1,473,115 to a domestic customer for a total of 17%
and 29% of consolidated sales. During the six months and three months ended
December 31, 2000 and December 31, 1999, the Company and its subsidiaries had
consolidated purchases of $4,084,128 from one vendor and $4,906,963 from two
vendors for a total of 45% and 73% of consolidated purchases. During the
quarters ended December 31, 2000 and December 31, 1999, the Company and its
subsidiaries had consolidated purchases of $1,953,980 from one vendor and
$2,837,075 from two vendors for a total of 39% and 76% of consolidated
purchases.
5. SEGMENT INFORMATION: The Company and its subsidiaries are engaged in the
business of designing, developing and distributing power transmissions and
trailer and implement components used for agricultural, construction and
industrial equipment.
SEGMENT INFORMATION
- --------------------------------------------------------------------------------------------------------------
THREE MONTHS ENDED NET SALES INCOME FROM INTEREST IDENTIFIABLE CAPITAL DEPRECIATION/
DECEMBER 31, 2000 OPERATIONS EXPENSE ASSETS EXPENDITURES AMORTIZATION
- --------------------------------------------------------------------------------------------------------------
Power Transmission $5,350,040 $308,521 $122,692 $8,630,201 $302,974 $60,204
Components
- --------------------------------------------------------------------------------------------------------------
Trailer and Implement 940,129 (71,089) 6,598 2,086,158 6,000 30,653
Components
- --------------------------------------------------------------------------------------------------------------
Corporate and Eliminations (133,778) 9,401
- --------------------------------------------------------------------------------------------------------------
Total Omni, U.S.A., Inc. $6,290,169 $103,654 $138,691 $10,716,359 $308,974 $90,857
==============================================================================================================
- -----------------------------------------------------------
THREE MONTHS ENDED NET SALES PROPERTY AND
DECEMBER 31, 2000 EQUIPMENT
- -----------------------------------------------------------
Domestic Customers $5,981,697 $ 804,518
- -----------------------------------------------------------
Foreign Customers 308,472 1,480,717
- -----------------------------------------------------------
Total Omni, U.S.A., Inc. $6,290,169 $ 2,285,235
===========================================================
- --------------------------------------------------------------------------------------------------------------
THREE MONTHS ENDED NET SALES INCOME FROM INTEREST IDENTIFIABLE CAPITAL DEPRECIATION/
DECEMBER 31, 1999 OPERATIONS EXPENSE ASSETS EXPENDITURES AMORTIZATION
- --------------------------------------------------------------------------------------------------------------
Power Transmission $4,060,481 $ 283,036 $ 70,643 $ 7,164,718 $ 4,457 $ 69,979
Components
- --------------------------------------------------------------------------------------------------------------
Trailer and Implement 993,039 5,730 17,323 2,858,408 2,639 12,690
Components
- --------------------------------------------------------------------------------------------------------------
Corporate and Eliminations (133,100)
- --------------------------------------------------------------------------------------------------------------
Total Omni, U.S.A., Inc. $5,053,520 $ 155,666 $ 87,966 $10,023,126 $ 7,096 $ 82,669
==============================================================================================================
- -----------------------------------------------------------
THREE MONTHS ENDED NET SALES PROPERTY AND
DECEMBER 31, 1999 EQUIPMENT
- -----------------------------------------------------------
Domestic Customers $4,721,197 $ 865,302
- -----------------------------------------------------------
Foreign Customers 332,323 1,369,974
- -----------------------------------------------------------
Total Omni, U.S.A., Inc. $5,053,520 $ 2,235,276
===========================================================
SEGMENT INFORMATION
(CONTINUED)
- --------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED NET SALES INCOME FROM INTEREST IDENTIFIABLE CAPITAL DEPRECIATION/
DECEMBER 31, 2000 OPERATIONS EXPENSE ASSETS EXPENDITURES AMORTIZATION
- --------------------------------------------------------------------------------------------------------------
Power Transmission $ 9,122,267 $ 333,732 $ 210,162 $ 8,630,201 $ 316,583 $ 128,205
Components
- --------------------------------------------------------------------------------------------------------------
Trailer and Implement 2,073,543 (16,345) 26,848 2,086,158 49,838 63,742
Components
- --------------------------------------------------------------------------------------------------------------
Corporate and Eliminations (232,083) 21,033
- --------------------------------------------------------------------------------------------------------------
Total Omni, U.S.A., Inc. $11,195,810 $ 85,304 $ 258,043 $10,716,359 $ 366,421 $ 191,947
==============================================================================================================
- -----------------------------------------------------------
SIX MONTHS ENDED NET SALES PROPERTY AND
DECEMBER 31, 2000 EQUIPMENT
- -----------------------------------------------------------
Domestic Customers $ 10,262,270 $ 804,518
- -----------------------------------------------------------
Foreign Customers 933,540 1,480,717
- -----------------------------------------------------------
Total Omni, U.S.A., Inc. $ 11,195,810 $ 2,285,235
===========================================================
- --------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED NET SALES INCOME FROM INTEREST IDENTIFIABLE CAPITAL DEPRECIATION/
DECEMBER 31, 1999 OPERATIONS EXPENSE ASSETS EXPENDITURES AMORTIZATION
- --------------------------------------------------------------------------------------------------------------
Power Transmission $ 6,909,611 $ 131,658 $ 135,139 $ 7,164,718 $ 23,573 $ 159,881
Components
- --------------------------------------------------------------------------------------------------------------
Trailer and Implement 1,984,357 30,312 27,693 2,858,408 12,601 22,830
Components
- --------------------------------------------------------------------------------------------------------------
Corporate and Eliminations (259,709)
- --------------------------------------------------------------------------------------------------------------
Total Omni, U.S.A., Inc. $ 8,893,968 $ (97,739) $ 162,832 $10,023,126 $ 36,174 $ 182,711
==============================================================================================================
- -----------------------------------------------------------
SIX MONTHS ENDED NET SALES PROPERTY AND
DECEMBER 31, 1999 EQUIPMENT
- -----------------------------------------------------------
Domestic Customers $8,288,260 $ 865,302
- -----------------------------------------------------------
Foreign Customers 605,708 1,369,974
- -----------------------------------------------------------
Total Omni, U.S.A., Inc. $8,893,968 $ 2,235,276
===========================================================
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
This report has been prepared pursuant to the rules and regulations
of the Securities and Exchange Commission. This report should be read in
conjunction with the Company's latest Form 10-KSB, a copy of which may be
obtained by visiting the Company's home page at www.ousa.com, or by writing
to the Investor Relations Department, Omni U.S.A., Inc., 7502 Mesa Road,
Houston, Texas 77028.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary capital requirements are for working capital and
acquisitions that are generally met through a combination of internally
generated funds, a revolving line of credit facility and credit terms from
suppliers. The Company's $4,000,000 credit facility had an outstanding balance
of $2,694,142 at December 31, 2000. The Company had working capital of
$2,204,628 as of December 31, 2000 and working capital of $2,499,953 as of June
30, 2000, a decrease of $295,325 from June 30, 2000. The decrease in working
capital from June 30, 2000 was due primarily to an increase in accounts payable
offset by an increase in accounts receivable.
Accounts receivable balance of $3,560,064 as of December 31, 2000
increased $381,360 compared to June 30, 2000 accounts receivable balance of
$3,178,704. Inventory balance as of December 31, 2000 was $4,180,503; an
increase of $76,663 compared to June 30, 2000. Accounts receivable and inventory
increased during the period to support additional sales levels in both business
segments.
The Company had a cash balance of $358,192 as of December 31, 2000;
reflecting a negative cash flow of $228,852 compared to the June 30, 2000 cash
balance of $587,044. The Company's cash used by operating activities for the 6
months ended December 31, 2000 of $15,783 consisted of the net loss for the
period of $139,067 plus non cash expenses, combined with an increase in accounts
receivable, accounts payable and inventories.
The Company's cash used in investing activities for the six months
ended December 31, 2000 of $129,237 consisted of capital expenditures for the
period primarily in support of the power transmission component segment.
Net cash used by financing activities for the six months ended
December 31, 2000 of $88,832 was due to net additional borrowings on the line
of credit and repayments on long-term debt.
The Company's current ratio was 1.37 as of December 31, 2000, compared
to the June 30, 2000 current ratio of 1.46.
The Company believes that between its access to the line of credit
facility and its ability to generate funds internally, it has adequate capital
resources to meet its working capital requirements for the foreseeable future,
given its current working capital requirements, known obligations, and assuming
current levels of operations. In addition, the Company believes that it has the
ability to raise additional financing in the form of debt or equity to fund
additional capital expenditures and operations, if required.
RESULTS FOR THE QUARTER ENDED DECEMBER 31, 2000 COMPARED WITH THE QUARTER ENDED
DECEMBER 31, 1999
The Company had net sales of $6,290,169 for the three months ended
December 31, 2000. This represents an increase of 24% compared to the three
months ended December 31, 1999 net sales of $5,053,520. Sales have increased
due to aggressive marketing and pricing incentives to customers for larger
orders. The following table indicates the Company's net sales comparison and
percentage of change for the three months ended December 31, 2000 and 1999:
- ------------------------------------------------------------------------------------------------------------
QUARTER % QUARTER % DOLLAR %
ENDED ENDED
NET SALES 12/31/00 OF TOTAL 12/31/99 OF TOTAL CHANGE CHANGE
- ------------------------------------------------------------------------------------------------------------
Power Transmission Components $5,350,040 85% $4,060,481 80% $1,289,559 32%
- ------------------------------------------------------------------------------------------------------------
Trailer and Implement Components 940,129 15% 993,039 20% (52,910) (5%)
- ------------------------------------------------------------------------------------------------------------
Consolidated $6,290,169 100% $5,053,520 100% $1,236,649 24%
- ------------------------------------------------------------------------------------------------------------
Gross profit for the three months ended December 31, 2000 decreased
$96,236 to $1,237,502, compared to gross profit for the three months ended
December 31, 1999 of $1,333,738. Gross profit as a percentage of net sales for
the three months ended December 31, 2000 decreased to 20% as compared to 26% for
the three months ended December 31, 1999. This decrease in gross profit and
profit margin was primarily due to the product mix of sales for the period and
pricing incentives offered to customers for bulk purchases.
Selling, general and administrative expenses decreased $44,224 to
$1,133,848 in the three months ended December 31, 2000 from $1,178,072 in the
three months ended December 31, 1999. Selling, general and administrative
expenses as a percentage of sales decreased to 18% for the three months ended
December 31, 2000 from 23% for the three months ended December 31, 1999.
Income from operations for the Company decreased $52,012 to $103,654
for the three months ended December 31, 2000, compared to $155,666 for the three
months ended December 31, 1999. This decrease is the result of lower gross
margins during the period.
Interest expense increased $50,725, to $138,691 for the three months
ended December 31, 2000 from $87,966 for the three months ended December 31,
1999. The increase resulted from an increased borrowing rate and borrowings
associated with the Company's line of credit to meet current inventory and
working capital needs and additional borrowing on other long-term debt.
Other income (expense) was income of $19,030 for the three months ended
December 31, 2000 compared to an expense of $5,485 for the three months ended
December 31, 1999. This change is principally from increased VAT refund from
foreign sales.
The Company's net income decreased $78,222 despite increase in sales
due to declining margins to ($16,007), or ($0.00) per share, for the three
months ended December 31, 2000 compared to $62,215, or $0.02 per share, for the
three months ended December 31, 1999.
RESULTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2000 COMPARED WITH THE SIX MONTHS
ENDED DECEMBER 31, 1999
The Company had net sales of $11,195,810 for the six months ended
December 31, 2000. This represents an increase of 26% compared to the six
months ended December 31, 1999 net sales of $8,893,968. Sales have increased
due to aggresive marketing and pricing incentives to customers for larger
orders. The following table indicates the Company's net sales comparison and
percentage of change for the six months ended December 31, 2000 and 1999:
- ------------------------------------------------------------------------------------------------------------
SIX MONTHS % SIX MONTHS % DOLLAR %
ENDED ENDED
NET SALES 12/31/00 OF TOTAL 12/31/99 OF TOTAL CHANGE CHANGE
- ------------------------------------------------------------------------------------------------------------
Power Transmission Components $9,122,267 81% $6,909,611 78% $2,212,656 32%
- ------------------------------------------------------------------------------------------------------------
Trailer and Implement Components 2,073,543 19% 1,984,357 22% 89,186 4%
- ------------------------------------------------------------------------------------------------------------
Consolidated $11,195,810 100% $8,893,968 100% $2,301,842 26%
- ------------------------------------------------------------------------------------------------------------
Gross profit for the six months ended December 31, 2000 increased
$22,787 to $2,208,261, compared to gross profit for the six months ended
December 31, 1999 of $2,185,474. Gross profit as a percentage of net sales for
the six months ended December 31, 2000 decreased to 20% as compared to 25% for
the six months ended December 31, 1999. This decrease in gross profit and profit
margin was primarily due to the product mix of sales for the period and
pricing incentives offered to customers for bulk purchases.
Selling, general and administrative expenses decreased $160,256 to
$2,122,957 in the six months ended December 31, 2000 from $2,283,213 in the six
months ended December 31, 1999. Selling, general and administrative expenses as
a percentage of sales decreased to 19% for the six months ended December 31,
2000 from 26% for the six months ended December 31, 1999.
Income from operations for the Company increased $183,043 to $85,304
for the six months ended December 31, 2000, compared to ($97,739) for the six
months ended December 31, 1999. This increase is the result increased sales for
the period as well as decreased selling, general and administrative expenses.
Interest expense increased $95,211, to $258,043 for the six months
ended December 31, 2000 from $162,832 for the six months ended December 31,
1999. The increase resulted from an increased borrowing rate and borrowings
associated with the Company's line of credit to meet current inventory and
working capital needs and additional borrowing on other long-term debt.
Other income (expense) was income of $33,672 for the six months ended
December 31, 2000 compared to an expense of $64,116 for the six months ended
December 31, 1999. This change relates primarily to expensing un-amortized
organizational costs of $38,502 (relating to the implementation of Financial
Accounting Standards Board SOP 98-5 "Reporting on the Cost of Start-Up
Activities") in the fiscal quarter ended September 30, 1999 as well as an
increase in VAT refunds associated with an increase in foreign sales.
The Company's net loss decreased $185,620 to $139,067, or $0.04 per
share, for the six months ended December 31, 2000 compared to $324,687, or $0.09
per share, for the six months ended December 31, 1999.
YEAR 2000
As a result of the Company's year 2000 assessment and remediation, the
Company has not experienced any materially adverse effects on its operations as
a result of the Year 2000 issue.
CAUTIONARY STATEMENT
The following is a "Safe Harbor" Statement under the Private Securities
Litigation Reform Act of 1995:
With the exception of historical facts, the statements contained in
Item 2 of this form 10-QSB are forward looking statements. Actual results may
differ materially from those contemplated by the forward-looking statements.
These forward looking statements involve risks and uncertainties, including but
not limited to, the following risks: 1) cyclical downturns affecting the markets
for capital goods, 2) substantial increases in interest rates, 3) availability
or material increases in the costs of select raw materials, and 4) actions taken
by competitors with regard to such matters as product offerings pricing, and
delivery. Investors are directed to the Company's documents, such as its Annual
Report on Form 10-KSB, Forms 10-QSB and Forms 8-KSB filed with the Securities
and Exchange Commission.
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS.
There have been no material changes from the disclosure in the
Company's Form 10-KSB for the fiscal year ended June 30, 2000.
Item 2. CHANGE IN SECURITIES.
Not applicable.
Item 3. DEFAULTS UPON SENIOR SECURITIES.
Not applicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
Item 5. OTHER INFORMATION.
None.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
None.
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 thereunto duly authorized.
Date: February 14, 2001 OMNI U.S.A., INC.
By: /s/ Jeffrey K. Daniel
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Jeffrey K. Daniel
President and Chief
Executive Officer
By: /s/ David M. Sallean
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David M. Sallean
Chief Financial Officer