OMEGA PROTEIN CORP - 10-Q Quarterly Report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2004

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-14003

OMEGA PROTEIN CORPORATION

(Exact name of Registrant as specified in its charter)


State of Nevada		76-0562134
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1717 St. James Place, Suite 550 Houston, Texas		77056
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (713) 623-0060

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 ¨.

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act) Yes ¨ No x.

Number of shares outstanding of the Registrant’s Common Stock, par value $0.01 per share, on July 27, 2004: 24,457.209

OMEGA PROTEIN CORPORATION

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements

	Unaudited Condensed Consolidated Balance Sheet as of June 30, 2004 and December 31, 2003	3
	Unaudited Condensed Consolidated Statement of Operations for the three months and six months ended June 30, 2004 and 2003	4
	Unaudited Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2004 and 2003	5
	Unaudited Consolidated Statements of Stockholders’ Equity	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36

Item 4.	Controls and Procedures	36

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	37

Item 2.	Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities	37

Item 3.	Defaults Upon Senior Securities	37

Item 4.	Submission of Matters to a Vote of Security Holders	37

Item 5.	Other Information	38

Item 6.	Exhibits and Reports on Form 8-K	38

Signatures		39

OMEGA PROTEIN CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET

(Dollars in thousands, except per share amounts)

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements and Notes


	June 30, 2004			December 31, 2003
	(in thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	35,625		$	35,374
Receivables, net		13,906			19,860
Amounts due from majority owner		109			108
Inventories		41,891			40,405
Deferred tax assets, net		—			178
Prepaid expenses and other current assets		1,769			1,520

Total current assets		93,300			97,445

Other assets		3,762			3,087

Deferred tax assets, net		996			405

Property and equipment, net		92,781			85,231

Total assets	$	190,839		$	186,168

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt	$	1,617		$	1,566
Accounts payable		1,251			3,384
Deferred tax liabilities, net		1,621			—
Accrued liabilities		14,462			11,558

Total current liabilities		18,951			16,508

Long-term debt		16,783			17,605
Pension liabilities, net		7,186			6,838

Total liabilities		42,920			40,951

Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value; authorized 10,000,000 shares; none issued		—			—
Common stock, $0.01 par value; authorized 80,000,000 shares; 24,863,109 shares and 24,801,549 shares issued and outstanding, respectively		249			248
Capital in excess of par value		113,933			113,690
Retained earnings		41,710			39,237
Accumulated other comprehensive loss		(5,938	)		(5,923	)
Common stock in treasury, at cost – 413,100 shares		(2,035	)		(2,035	)

Total stockholders’ equity		147,919			145,217

Total liabilities and stockholders’ equity	$	190,839		$	186,168

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

OMEGA PROTEIN CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(Dollars in thousands, except per share amounts)


	Three Months Ended June 30,						Six Months Ended June 30,
	2004			2003			2004			2003
	(in thousands, except per share amount)
Revenues	$	26,456		$	27,292		$	51,512		$	52,393
Cost of sales		21,063			21,114			42,445			39,793

Gross profit		5,393			6,178			9,067			12,600
Selling, general, and administrative expense		2,418			2,283			4,880			4,479

Operating income		2,975			3,895			4,187			8,121
Interest expense, net		(184	)		(165	)		(371	)		(319	)
Other expense, net		(50	)		(51	)		(106	)		(30	)

Income before income taxes		2,741			3,679			3,710			7,772
Provision for income taxes		914			1,299			1,237			2,745

Net income	$	1,827		$	2,380		$	2,473		$	5,027

Basic earnings per share	$	0.07		$	0.10		$	0.10		$	0.21

Weighted average common shares outstanding		24,431			24,122			24,418			24,053

Diluted earnings per share	$	0.07		$	0.09		$	0.09		$	0.20

Weighted average common shares and common share equivalents outstanding		26,507			25,655			26,425			25,545

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

OMEGA PROTEIN CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(Dollars in thousands, except per share amounts)


	Six Months Ended June 30,
	2004			2003
	(in thousands)
Cash flows provided by (used in) operating activities:
Net income	$	2,473		$	5,027
Adjustments to reconcile net income to net cash provided by operating activities:
Loss (gain) on disposal of assets, net		4			(77	)
Provision for losses on receivables		15			55
Depreciation and amortization		6,038			5,927
Deferred income taxes		1,237			2,745
Changes in assets and liabilities:
Receivables		5,939			(3,433	)
Amounts due from majority owner		(1	)		2
Inventories		(1,486	)		(4,217	)
Accounts payable and accrued liabilities		2,392			1,643
Other, net		(3,184	)		(689	)

Total adjustments		10,954			1,956

Net cash provided by operating activities		13,427			6,983

Cash flows provided by (used in) investing activities:
Proceeds from sale of assets, net		62			83
Capital expenditures		(12,640	)		(7,265	)

Net cash used in investing activities		(12,578	)		(7,182	)

Cash flows provided by (used in) financing activities:
Principal payments of short and long-term debt obligations		(771	)		(624	)
Proceeds from stock options exercised		188			574

Net cash used in financial activities		(583	)		(50	)

Effect of exchange rate on cash		(15	)		—

Net increase (decrease) in cash and cash equivalents		251			(249	)

Cash and cash equivalents at beginning of year		35,374			33,450

Cash and cash equivalents at end of period	$	35,625		$	33,201

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

OMEGA PROTEIN CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Dollars in thousands, except per share amounts)


	Common Stock			Capital Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss			Treasury Stock Amount			Total Stockholders’ Equity
	Shares	Amount		Capital Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss			Treasury Stock Amount			Total Stockholders’ Equity
Balance at December 31, 2003	24,802	$	248	$	113,690	$	39,237	$	(5,923	)	$	(2,035	)	$	145,217
Issuance of common stock	61		1		243		—					—			244
Comprehensive income:
Net income	—		—		—		2,473		—

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