Item 1 and 2. Business and Properties
General
Omega Protein Corporation is a Nevada corporation organized in 1998. As used herein, the term "Omega" or the "Company" refers to Omega Protein Corporation or to Omega Protein Corporation and its consolidated subsidiaries, as applicable. Because the Company changed its Fiscal year end from September 30 to December 31, a three-month transition period from October 1, 1998 through December 31, 1998 (the "Transition Period") precedes the start of the Fiscal 1999 year. "Fiscal 1998" refers to the year ended September 30. "Fiscal 1999" and "Fiscal 2000" refers to the twelve months ended December 31, 1999 and December 31, 2000, respectively. The Company's principal executive offices are at 1717 St. James Place, Suite 550, Houston, Texas 77056 (Telephone: (713) 623-0060).
The Company is the successor by merger to Marine Genetics Corporation (formerly known as Zapata Protein, Inc.), a Delaware corporation, which was formed in March 1994 to act as the holding company for Omega Protein, Inc. (formerly known as Zapata Protein (USA), Inc.). Omega Protein, Inc., which is the operating entity for the Company's current business, was formed in Virginia in October 1986, and is the successor to a business conducted since 1913. The Company has a number of direct and indirect subsidiaries.
Until April 1998, the Company, including its predecessors, was a wholly- owned subsidiary of Zapata Corporation ("Zapata"), a New York Stock Exchange, Inc. ("NYSE") company, since 1973 when Zapata acquired the Company's operations. In April 1998, the Company completed an initial public offering (the "Offering") of 8,500,000 shares of its Common Stock at a price to the public of $16.00 per share. In May 1998, the Underwriters exercised their option to acquire 1,275,000 additional shares at the same price. Of the 9,775,000 total shares sold in the Offering, the Company issued and sold 4,600,000 shares, and Zapata sold 5,175,000 shares to the public. Immediately following the Offering, Zapata owned approximately 59.7% of the Company's outstanding Common Stock. The Company used a portion of the net proceeds of the Offering to repay amounts due Zapata and a bank; the balance of the proceeds was invested in certificates of deposits and A2P2 rated or better commercial paper. See Note 1 (Concentrations of Credit Risk) to the Company's Consolidated Financial Statements in Item 8 of this Report.
To concentrate on and enhance its core business, the Company sold a marginally profitable business in late Fiscal 1997 and acquired certain assets in early Fiscal 1998 to increase the Company's harvesting and production capabilities.
On November 3, 1997, the Company acquired for $14.5 million in cash, the fishing and processing assets of American Protein, Inc. ("American Protein"), which operated ten fishing vessels and a menhaden processing
plant in the Chesapeake Bay area (the "American Protein Acquisition"). American Protein's facilities were located in close proximity to the Company's Reedville, Virginia facility. Shortly after closing this acquisition, the Company closed the American Protein plant and began integrating its assets into the Company's existing operations.
On November 25, 1997, the Company purchased the fishing and processing assets of Gulf Protein, Inc. ("Gulf Protein"), which included six fishing vessels, five spotter planes and the processing equipment at the Gulf Protein plant located near Morgan City, Louisiana, for $13.6 million in cash and the assumption of $883,000 in long-term liabilities (the "Gulf Protein Acquisition" and together with the American Protein Acquisition, the "Acquisitions"). In connection with the Gulf Protein Acquisition, the Company also entered into a five-year lease for the Gulf Protein plant at a $220,000 annual rental rate. The Company began operations at the Morgan City, Louisiana plant at the start of the 1998 fishing season, which began in April, 1998. Due to the decline in the average per-ton prices for the Company's products which occurred in Fiscal 1999 and continued throughout Fiscal 2000 (see Item 7 - - Management's Discussion and Analysis of Financial Condition and Results of Operations--Results of Operations--Fiscal 2000--1999 and Fiscal 1999-1998), the Company elected to discontinue in-line processing operations at its Morgan City plant for the 2000 and 2001 fishing season. Warehousing operations are being conducted at the facility until market conditions improve or other opportunities develop for the property.
Financial Information About Industry Segments
The Company operates within one industry segment, menhaden fishing. Information concerning export sales and geographical distribution of revenues based on location of customers is incorporated by reference from Note 15 of Notes to the Company's Consolidated Financial Statements in Item 8 of this Report.
Company Overview
The Company's marine protein operations involve the production and sale of a variety of protein products derived from menhaden, a species of fish found along the Gulf of Mexico and Atlantic coasts. Omega is the largest processor, marketer and distributor of marine products (fish meal) and fats (fish oil) in the United States. The Company processes several grades of fish meal (regular or "FAQ" meal and specialty meals), as well as fish oil and fish solubles. The Company's fish meal products are primarily used as a protein ingredient in animal feed for poultry, swine, cattle, aquaculture and household pets. The Company's fish oil is primarily used as an ingredient in margarine and shortening. The Company's fish solubles are sold primarily to livestock feed manufacturers and for use as an organic fertilizer.
Fishing. During Fiscal 2000, the Company owned a fleet of 65 fishing vessels and 33 spotter aircraft for use in its fishing operations and also leased additional aircraft where necessary to facilitate operations. During the 2000 fishing season in the Gulf of Mexico, where the fishing season runs from mid-April through October, the Company operated 30 fishing vessels and 28 spotter aircraft. The fishing area in the Gulf is generally located along the Gulf Coast, with a concentration off the Louisiana and Mississippi coasts. The fishing season along the Atlantic coast begins in early May and usually extends into December. The Company operated 10 fishing vessels and 8 spotter aircraft along the Mid-Atlantic coast, concentrated primarily in and around the Chesapeake Bay. In Fiscal 2000, the Company converted four of its former fishing vessels to "carry vessels" which did not engage in active fishing but instead carried fish catch from the Company's offshore fishing vessels to its plants.
Menhaden usually school in large, tight clusters and are commonly found in warm, shallow waters. Spotter aircraft locate the schools and direct the fishing vessels to them. The principal fishing vessels transport two 40-foot purse boats, each carrying several fishermen and one end of a 1,500-foot net. The purse boats encircle the school and capture the fish in the net. The fish are then pumped from the net into refrigerated holds of the fishing vessel or on the carry vessel, and then are unloaded at the Company's processing plants.
Processing. During Fiscal 2000, the Company operated four processing plants, two in Louisiana, one in Mississippi and one in Virginia, where the menhaden are processed into fish meal, fish oil and fish solubles. The fish are unloaded from the fishing vessels into storage boxes and then conveyed into steam cookers. The fish are then passed through presses to remove most of the oil and water. The solid portions of the fish are dried and then ground into fish meal. The liquid that is produced in the cooking and pressing operations contains oil, water, dissolved protein and some fish solids. This liquid is decanted to remove the solids and is then put through a centrifugal oil and water separation process. The separated fish oil is a finished product. The separated water and protein mixture is further processed through evaporators to remove the soluble protein, which can be sold as a finished product or added to the solid portions of the fish for processing into fish meal.
Fish meal, the principal product made from menhaden, is sold primarily as a high-protein feed ingredient. It is used as a protein supplement in feed formulated for pigs and other livestock. Each use requires certain standards to be met regarding quality and protein content, which are determined by the freshness of the fish and by processing conditions such as speed and temperatures. Fish solubles are a liquid protein product used as an additive in fish meal and also marketed as an independent product to animal feed formulators and the fertilizer industry.
Fish oil from menhaden is widely used for human consumption as an edible fat in Europe. Refined and hydrogenated menhaden oils have a wide variety of applications as ingredients of margarine, cooking oil and solid cooking fats used in baked goods. In June 1997, the U.S. Food and Drug Administration approved the use of refined non-hydrogenated menhaden oil, a natural source of Omega-3 fatty acids, for human consumption in the United States. Ongoing scientific studies continue to link consumption of Omega-3-rich fish oil to a number of nutritional and health benefits.
Customers and Marketing. Most of the Company's marine protein products are sold directly to about 400 customers by the Company's marketing department, while a smaller amount is sold through independent sales agents. Product inventory was $28.0 million as of December 31, 2000 versus $34.1 million on December 31, 1999.
The Company's fish meal is sold primarily to domestic feed producers for utilization as a high-protein ingredient for the poultry, swine, aquaculture and pet food industries. Fish oil sales primarily involve export markets where the fish oil is refined for use as an edible oil.
The Company's products are sold both in the U.S. and internationally. International sales consist mainly of fish oil sales to Canada, Japan, Mexico and The Netherlands. The Company's sales in these foreign markets are denominated in U.S. dollars and not directly affected by currency fluctuations. Such sales could be adversely affected by changes in demand resulting from fluctuations in currency exchange rates.
A number of countries in which the Company currently sells products impose various tariffs and duties, none of which have a significant impact on the Company's foreign sales. Certain of these duties are being reduced annually under the North American Free Trade Agreement in the case of Mexico and Canada and under the Uruguay Round Agreement of the General Agreement on the Trade and Tariffs in the case of Japan. In all cases, the Company's products are shipped to its customers either by F.O.B. shipping point or CIF terms and therefore the customer is responsible for any tariffs, duties or other levies imposed on the Company's products sold into these markets.
Insurance. The Company maintains insurance against physical loss and damage to its assets, coverage against liabilities to third parties it may incur in the course of its operations, as well as workers' compensation, United States Longshoremen and Harbor Workers' Act and Jones Act coverage. Assets are insured at replacement cost, market value or assessed earning power. The Company's limits for liability coverage are statutory or $50.0 million. The $50.0 million limit is comprised of several excess liability policies, which are subject to deductibles, underlying limits and exclusions. The Company believes its insurance coverage to be in such form, against such risks, for such amounts and subject to such deductibles as are prudent and normal for its operations.
Competition. Omega competes on price, quality and performance characteristics of its products, such as protein level and amino acid profile in the case of fish meal. The principal competition for the Company's fish meal and fish solubles is from other protein sources such as soybean meal and other vegetable or animal protein products. The Company believes, however, that these other sources are not complete substitutes because fish meal offers nutritional values not contained in such sources. Vegetable fats and oils, such as soybean and palm oils, provide the primary market competition for fish oil. In addition, the Company competes against domestic, privately owned menhaden fishing companies as well as domestic and international producers of fish meal and fish oil derived from species such as anchovy and horse mackerel.
Fish meal prices have historically borne a relationship to prevailing soybean meal prices, while prices for fish oil are generally influenced by prices for vegetable fats and oils, such as soybean and palm oils. Thus, the prices for the Company's products are established by worldwide supply and demand relationships over which the Company has no control and tend to fluctuate to a significant extent over the course of a year and from year to year.
Regulation. The Company's operations are subject to federal, state and local laws and regulations relating to the location and periods in which fishing may be conducted as well as environmental and safety matters. At the state and local level, certain state and local government agencies have either enacted legislation and regulations or have the authority to enact with legislation and regulation to prohibit, restrict or regulate menhaden fishing within their jurisdictional waters. The Company, through its operation of fishing vessels, is subject to the jurisdiction of the U.S. Coast Guard, the National Transportation Safety Board and the U.S. Customs Service. The U.S. Coast Guard and the National Transportation Safety Board set safety standards and are authorized to investigate vessel accidents and recommend improved safety standards. The U.S. Customs Service is authorized to inspect vessels at will.
The Company's operations are subject to federal, state and local laws and regulations relating to the protection of the environment, including the federal Water Pollution Control Act of 1972, which was significantly modified in 1977 to deal with toxic water pollutants and re-named as the Clean Water Act, and which imposes strict controls against the discharge of pollutants in reportable quantities, and along with the Oil Pollution Act of 1990, imposes substantial liability for the costs of oil removal, remediation and damages. The Company's marine protein operations also are subject to the federal Clean Air Act, as amended; the federal Resource Comprehensive Environmental Response, Compensation, and Liability Act, which imposes liability, without regard to fault, on certain classes of persons that contributed to the release of any "hazardous substances" into the environment; and the federal Occupational Safety and Health Act ("OSHA"). The OSHA hazard communications standard, the Environmental Protection Agency community right-to-know regulations under Title III of the federal Superfund Amendment and Reauthorization Act and similar state statutes require the Company to organize information about hazardous materials used or produced in its operations. Certain of this information must be provided to employees, state and local governmental authorities and local citizens. Numerous other environmental laws and regulations, along with similar state laws, also apply to the operations of the Company, and all such laws and regulations are subject to change.
The Company has made, and anticipates that it will make in the future, expenditures in the ordinary course of its business in connection with environmental matters. Such expenditures have not been material in the past and are not expected to be material in the future. However, there is no assurance that environmental laws and regulations enacted in the future will not adversely affect the Company's operations.
The Company's harvesting operations are subject to certain federal maritime laws and regulations which require, among other things, that the Company be incorporated under the laws of the U.S. or a state, the Company's chief executive officer be a U.S. citizen, no more of the Company's directors be non-citizens than a minority of the number necessary to constitute a quorum and at least 75% of the Company's outstanding capital stock (including a majority of the Company's voting capital stock) be owned by U.S. citizens. If the Company fails to observe any of these requirements, it will not be eligible to conduct its harvesting activities in U.S.
jurisdictional waters. Such a loss of eligibility would have a material adverse affect on the Company's business, results of operations and financial condition.
The Company believes that during the past five years it has substantially complied with all material statutes and regulations applicable to its operations, the failure to comply with which would have had a material adverse impact on its operations.
Employees
At December 31, 2000, during the Company's off-season, the Company employed approximately 441 persons. At August 31, 2000, during the peak of the Company's 2000 fishing season, the Company employed approximately 1,044 persons. Approximately 83 employees at the Company's Virginia facility are represented by an affiliate of the United Food and Commercial Workers Union. During the past five years Omega has not experienced any strike or work stoppage which has had a material impact on its operations. The Company considers its employee relations to be generally satisfactory.
Geographical Information
Certain geographical information with respect to the Company's business is set forth in Note 15 of the Company's Consolidated Financial Statements included in Item 8 of this report.
Executive Officers of the Registrant
The names, ages and current offices of the executive officers of the Company, who are to serve until their successors are elected and qualified, are set forth below. Also indicated is the date when each such person commenced serving as an executive officer of the Company.
A description of the business experience during the past five years for each of the executive officers of Omega is set forth below.
Joseph L. von Rosenberg III is President, Chief Executive Officer and Director of the Company. He has served in these positions since July 1997. Prior to serving in these positions Mr. von Rosenberg served as Executive Vice President of Zapata from November 1995 until April 1998. Prior to becoming Executive Vice President of Zapata, Mr. von Rosenberg served as General Counsel of Zapata from August 1994 to July 1997 and Corporate Secretary of Zapata from June 1993 to July 1997. From August 1994 through November 1995, Mr. von Rosenberg also held the position of Vice President of Zapata.
Robert W. Stockton is Executive Vice President, Chief Financial Officer and Secretary of the Company. He has served as Executive Vice President and Chief Financial Officer since July 1997 and as Secretary since December 1999. For the five years prior to joining the Company in July 1997, Mr. Stockton was Vice President and Chief Financial Officer of The Simmons Group and also served as Corporate Controller of Proler International Corp.
Bernard H. White was named CorporateVice President in March 1998. From 1994 to 1998, Mr. White worked as a Public Affairs and Investor Relations Consultant. Prior to that Mr. White served as Vice President--Corporate Affairs of Zapata Corporation.
Jonathan Specht was named Vice President--Operations in June 1999. From June 1997 through June 1999, Mr. Specht was the General Manager of the Company's Cameron, Louisiana facility. Prior thereto, he was General Manager of a facility operated by Golden Valley Meat.
Michael E. Wilson is President of the Company's wholly-owned subsidiary, Omega Shipyard, Inc., a position he has held since June 1997. Since July 1998, he has also served as the Company's Vice President--Marine Operations and prior thereto, served as the Company's Coordinator of Marine Engineering & Maintenance. Mr. Wilson joined the Company in 1985 and served in various operating capacities until 1996.
Properties
The Company owns the Reedville, Virginia, Moss Point, Mississippi and Abbeville, Louisiana plants and the real estate on which they are located (except for a small leased parcel comprising a portion of the Abbeville facility). The Company leases from unaffiliated third parties the real estate on which the Cameron, Louisiana and Morgan City, Louisiana plants are located. The Cameron plant lease provides for a 10 year term ending on June 30, 2002 (with two successive 10 year options) and annual rent of $56,000. The Morgan City plant lease provides for a 5 year term beginning on November 25, 1997 at an annual rent of $220,000. The Company has an option under the Morgan City lease to purchase the plant for $656,000 during the last month of the lease or earlier if all rent through the end of the term is paid.
As of December 31, 2000, the Company's four processing plants had an aggregate capacity to process approximately 950,000 tons of fish annually. The Company's processing plants are located in coastal areas near the Company's fishing fleet. Annual volume processed varies depending upon menhaden catch and demand. Each plant maintains a dedicated dock to unload fish, fish processing equipment and storage capacity. The Reedville, Virginia facility contains an oil refining plant and net making facility. The Company periodically reviews possible application of new processing technologies in order to enhance productivity and reduce costs.
In July 1997, the Company commenced construction of a dry dock facility in Moss Point, Mississippi to address the shortage of shoreside maintenance in the U.S. Gulf coast and the increasing costs of these services. The facility was completed in March 1998. The Company is using this facility and other outside facilities to perform routine maintenance to its fishing fleet. The Company also provides shoreside maintenance services to third party vessels if excess capacity exists.
The Company also leases office space in Houston, Texas for its executive offices pursuant to a sublease with Zapata. The Company believes its facilities are adequate and suitable for its current level of operations. The Company maintains customary workers' compensation insurance, as well as liability, property and marine insurance for all of its operations.
Item 3.
Item 3. Legal Proceedings
The Company is defending various claims and litigation arising from operations which arise in the ordinary course of the Company's business. In the opinion of management, any losses resulting from these matters will not have a material adverse affect on the Company's results of operations, cash flows or financial position.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders
No matter was submitted to a vote of Omega's stockholders during the fourth quarter of Fiscal 2000.
PART II
Item 5.
Item 5. Market for the Registrant's Common Equity and Related Stockholder Matters
Omega's Common Stock is listed on the New York Stock Exchange. The high and low sales prices for the Common Stock, as reported in the consolidated transactions reporting system, as well as the amounts per share of dividends declared during "Fiscal 2000" and "Fiscal 1999", for each quarterly period, are shown in the following table. Prior to the Company's initial public offering in April, 1998, there was no public market for Omega's Common Stock.
On March 7, 2001, the closing price of the common stock, as reported by the NYSE, was $1.85 per share. As of March 7, 2001, there were approximately 54 holders of record of Common Stock. This number does not include any beneficial owners for whom shares may be held in a "nominee" or "street" name.
The Company intends to retain earnings, if any, to support its growth strategy and does not anticipate declaring or paying dividends on its Common Stock in the foreseeable future. Any future determination as to payment of dividends will be made at the discretion of the Board of Directors of the Company and will depend upon the Company's operating results, financial condition, capital requirements, general business conditions and such other factors that the Board of Directors deems relevant. In addition, the payment of cash dividends is not permitted by the terms of the Company's revolving credit agreement with Bank of America, N.A. (the "Credit Facility").
In September 1998, the Company's Board of Directors authorized a program to repurchase up to 4,000,000 shares of its issued and outstanding common stock. Omega repurchased an aggregate of 413,100 shares under this program during Fiscal 1999 and none during Fiscal 2000. The current Credit Facility prohibits common stock repurchases.
Item 6.
Item 6. Selected Financial Data
The following table sets forth certain selected historical consolidated financial information for the periods presented and should be read in conjunction with the Consolidated Financial Statements of the Company included in Item 8 of this Report and the related notes thereto and with "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in Item 7
Item 7.A Quantitative and Qualitative Disclosure About Market Risk.
In the normal course of business, the financial condition of the Company is exposed to minimal market risk associated with interest rate movements on the Company's borrowings. A one percent increase or decrease in the levels of interest rates on variable rate debt would not result in a material change to the Company's results of operations.
Although the Company sells products in foreign countries, all of the Company's revenues are billed and paid for in US dollars. As a result, management does not believe that the Company is exposed to any significant foreign country currency exchange risk, and the Company does not utilize market risk sensitive instruments to manage its exposure to this risk.
Item 8.
Item 8. Financial Statements and Supplementary Data
REPORT OF INDEPENDENT ACCOUNTANTS
To the Stockholders and Board of Directors of Omega Protein Corporation:
In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, cash flows and stockholders' equity present fairly, in all material respects, the financial position of Omega Protein Corporation and its subsidiaries (the "Company") at December 31, 2000 and 1999, and the results of its operations and cash flows for each of the two years in the period ended December 31, 2000, the three month period ended December 31, 1998, and the year ended September 30, 1998, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
New Orleans, Louisiana February 23, 2001
OMEGA PROTEIN CORPORATION
CONSOLIDATED BALANCE SHEETS
The accompanying notes are an integral part of the consolidated financial statements.
OMEGA PROTEIN CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
The accompanying notes are an integral part of the consolidated financial statements.
OMEGA PROTEIN CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
The accompanying notes are an integral part of the consolidated financial statements.
OMEGA PROTEIN CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
The accompanying notes are in integral part of the consolidated financial statements.
OMEGA PROTEIN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES SUMMARY OF OPERATIONS AND BASIS OF PRESENTATION
Business Description
Omega Protein Corporation ("Omega" or the "Company"), produces and markets a variety of products produced from menhaden (a herring-like species of fish found in commercial quantities in the U.S. coastal waters of the Atlantic Ocean and Gulf of Mexico), including regular grade and value added specialty fish meals, crude and refined fish oils and fish solubles. The Company's fish meal products are used in nutritional feed additives by animal feed manufacturers and by commercial livestock producers. The Company's crude fish oil is sold primarily to food producers in Europe, and its refined fish oil products are used in aquaculture feeds and certain industrial applications. Fish solubles are sold as protein additives for animal feed and as organic fertilizers.
On January 26, 1998, Marine Genetics Corporation ("Marine Genetics") merged into Omega, a Nevada corporation wholly owned by Zapata Corporation ("Zapata"), with Omega being the surviving entity. The common control merger was accounted for at historical cost in a manner similar to that of a pooling of interest accounting. In connection with the merger, Marine Genetics outstanding Common Stock was converted into Omega Common Stock at the rate of one share for 19,676 shares of Omega Common Stock and Omega's pre-merger outstanding Common Stock was cancelled and treated as treasury stock.
On April 8, 1998, the Company completed an initial public offering of 8,500,000 of its common stock at a gross price of $16.00 per share. On May 7, 1998, the Underwriters exercised their option to acquire 1,275,000 additional shares at the same gross price. Of the 9,775,000 total shares sold in the offering, the Company issued and sold 4,600,000 shares, and Zapata sold 5,175,000 shares. Immediately following the offering Zapata owned approximately 59.7% of the shares of the Company's outstanding Common Stock.
Change in Fiscal Year
On December 1, 1998 the Company's Board of Directors approved a change in the Company's fiscal year end from September 30 to December 31, effective beginning January 1, 1999. A three month transition period from October 1, 1998 through December 31, 1998 (the "Transition Period") precedes the start of the Fiscal 1999 year. "Fiscal 1998" refers to the year ended September 30, 1998. "Fiscal 1999" and "Fiscal 2000" refer to the twelve months ended on December 31 of each year, respectively.
Consolidation
The consolidated financial statements include the accounts of Omega and its wholly and majority owned subsidiaries. Investments in affiliated companies and joint ventures representing a 20.0% to 50.0% voting interest are accounted for using the equity method. All significant intercompany accounts and transactions have been eliminated in consolidation.
On April 5, 2000, the Company acquired for a nominal amount an additional 1.0% equity interest in a partially owned subsidiary previously accounted for under the equity method. As a result of the transaction, the Company now owns 51.0% of the investment and consolidates its operations.
Revenue Recognition
The Company recognizes revenue for the sale of its products when title and risk of loss to its products are transferred to the customer.
Cash and Cash Equivalents
The Company considers cash in banks and short-term investments with original maturities of three months or less as cash and cash equivalents.
OMEGA PROTEIN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Inventories
The Company's fishing season runs from mid-April to the end of October in the Gulf of Mexico and from the beginning of May to the end of December in the Atlantic. Government regulations preclude the Company from fishing during the off-seasons. During the off-seasons, the Company incurs costs (i.e., plant and vessel related labor, utilities, rent and depreciation) that are directly related to the Company's infrastructure that will be used in the upcoming fishing season. Costs that are incurred subsequent to a fish catch are deferred until the next season and are included with inventory. Fishing product inventories and materials, parts and supplies are stated at the lower of cost (average cost) or market.
The Company's inventory cost system considers all costs, both variable and fixed, associated with an annual fish catch and its processing. The Company's costing system allocates cost to inventory quantities on a per unit basis as calculated by a formula that considers total estimated inventoriable costs for a fishing season (including off-season costs) to total estimated fish catch and the relative fair market value of the individual products produced. The Company adjusts the cost of sales, off-season costs and inventory balances at the end of each quarter based on revised estimates of total inventoriable costs and fish catch.
Accounting for the Impairment of Long-Lived Assets
The Company accounts for impairment of long-lived assets in accordance with Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of" which was issued in March 1995. SFAS No. 121 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the book value of the asset may not be recoverable. The Company evaluates at each balance sheet date whether events and circumstances have occurred that indicate possible operational impairment. In accordance with SFAS No. 121, the Company uses an estimate of the future undiscounted net cash flows of the related asset or asset grouping over the remaining life in measuring whether its operating assets are recoverable. During Fiscal 1999, the Company wrote down approximately $2.3 million of impaired long-lived assets. The $2.3 million impairment of certain of the Company's Morgan City in-line processing equipment was recorded to reduce the value of the assets to their estimated salvage value. The company has temporarily closed the in-line processing facilities at the plant and management has concluded that the affected damaged equipment will not be repaired but instead will be permanently removed from service.
Income Taxes
The Company utilizes the liability method to account for income taxes. This method requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of existing temporary differences between the financial reporting and tax reporting basis of assets and liabilities, and operating loss and tax credits carryforwards for tax purposes. Prior to the completion of the Company's public offering in April 1998, the Company was included in Zapata's consolidated U.S. federal income tax return and its income tax effects reflected on a separate return basis for financial reporting purposes.
Property, Equipment and Depreciation
Property and equipment additions are recorded at cost. Depreciation of property and equipment is computed by the straight-line method at rates expected to amortize the cost of property and equipment, net of salvage value, over their estimated useful lives. Estimated useful lives of assets acquired new, determined as of the date of acquisition are as follows:
OMEGA PROTEIN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) Replacements and major improvements are capitalized; maintenance and repairs are charged to expense as incurred. Upon sale or retirement, the costs and related accumulated depreciation are eliminated from the accounts. Any resulting gains or losses are included in the statement of operations.
Pension Plans
Annual costs of pension plans are determined actuarially based on SFAS No. 87, "Employers' Accounting for Pensions". The Company's policy is to fund U.S. pension plans at amounts not less than the minimum requirements of the Employee Retirement Income Security Act of 1974 and generally for obligations under its foreign plans to deposit funds with trustees under insurance policies. In Fiscal 1999, the Company adopted SFAS No. 132, "Employers' Disclosures about Pensions and Other Postretirement Benefits". SFAS No. 132 revised and standardized the disclosure requirements for pensions and other postretirement benefit plans to the extent practicable. It does not change the measurement or recognition of these plans.
Concentrations of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and trade accounts receivable. The Company's customer base generally remains consistent from year to year. The Company performs ongoing credit evaluations of its customers and generally does not require material collateral. The Company maintains reserves for potential credit losses and such losses have historically been within management's expectations.
At December 31, 2000 and 1999, the Company had cash deposits concentrated primarily in one major bank. In addition, the Company had Certificates of Deposit and commercial quality grade A2P2 rated or better with companies and financial institutions. As a result of the foregoing, the Company believes that credit risk in such investments is minimal.
Earnings per Share
Basic earnings per share was computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share was computed by dividing net income by the sum of the weighted average number of common shares outstanding and the effect of any dilutive stock options.
Recently Issued Accounting Standards
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities", which, as amended, is effective for fiscal years beginning after June 15, 2000. SFAS 133 establishes standards requiring all derivatives to be recognized in the statement of financial position as either assets or liabilities and measured at fair value. The Company will adopt the provisions of the statement in Fiscal 2001. The Company has completed its analysis the provisions of SFAS 133 and has concluded that the implementation does not presently have a significant impact on the Company's results of operations or financial position.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
OMEGA PROTEIN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Reclassification
During Fiscal 2000, certain reclassifications of prior year information have been made to conform to the current year presentation. These reclassifications had no effect on net income or stockholders' equity reported for prior periods.
NOTE 2.ASSET ACQUISITIONS
On November 3, 1997, the Company acquired the fishing and processing assets of American Protein, Inc. ("American Protein") which operated ten fishing vessels and a menhaden processing plant in the Chesapeake Bay area, for $14.5 million in cash (the "American Protein Acquisition"). American Protein's facilities were located in close proximity to the Company's Reedville, Virginia facility. Shortly after completing this transaction, the Company closed the American Protein processing plant and began integrating its assets into the Company's existing operations.
On November 25, 1997, the Company purchased the fishing and processing assets of Gulf Protein, Inc. ("Gulf Protein"), which included six fishing vessels, five spotter planes, and the processing equipment located at the Gulf Protein plant near Morgan City, Louisiana for $13.6 million in cash and the assumption of $883,000 in liabilities (the "Gulf Protein Acquisition"). The Company accounted for both acquisitions as purchases, thus, the results of operations began being included in the Company's Statement of Operations beginning November 25, 1997. In connection with the Gulf Protein Acquisition, the Company also entered into a five-year lease for the Gulf Protein plant at a $220,000 annual rental rate. Due to the decline in the average per-ton prices for the Company's products, which occurred in Fiscal 1999, the Company elected to discontinue processing operations at its Morgan City plant for the 2000 fishing season and again for the 2001 fishing season. An impairment of long-lived assets in the amount of $2.3 million has been recorded in Fiscal 1999 to reduce the cost of this impairment in-line equipment to its current salvage value. Warehousing operations are being conducted at this facility until market conditions improve or other opportunities develop for the property.
These two acquisitions were financed by a $28.1 million intercompany loan from Zapata. The interest rate on this loan was 8.5% and was repayable in quarterly installments beginning May 1, 1998. The loan, which was to mature on August 1, 2002, was prepaid in May 1998 with a portion of the proceeds from the Company's initial public offering described in Note 1.
NOTE 3.ACCOUNTS RECEIVABLE
Accounts receivable as of December 31, 2000 and 1999 are summarized as follows:
OMEGA PROTEIN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
NOTE 4.INVENTORY
Inventory as of December 31, 2000 and 1999 is summarized as follows:
During Fiscal 2000 and 1999, the Company provided $18.1 million and $18.2 million, respectively, in write-downs of the value of its fish meal and fish oil product inventories. The inventory write-downs were made necessary due to market prices the Company either has received or expects to receive for its products had declined to a level below the Company's cost basis in those products. The resultant net basis of $28.0 million and $34.1 million for the fish meal, oil and soluble products approximates current market value, less estimated selling costs, at December 31, 2000 and 1999, respectively.
NOTE 5.OTHER ASSETS
Other assets as of December 31, 2000 and 1999 are summarized as follows:
Amortization expense for fishing nets amounted to $720,000 and $874,000 for the years ended December 31, 2000 and 1999, respectively, $195,000 for the three months ended December 31, 1998 and $879,000 for the year ended September 30, 1998.
OMEGA PROTEIN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
NOTE 6.PROPERTY AND EQUIPMENT
Property and equipment as of December 31, 2000 and 1999 are summarized as follows:
Depreciation expense for the year ended December 31, 2000 and 1999 was $8.4 million and $7.9 million, respectively, $1.8 million for the three months ended December 31, 1998, and $5.5 million for the year ended September 30, 1998. During Fiscal 1999 the Company wrote-down approximately $2.3 million of impaired in-line processing assets in accordance with SFAS No. 121.
NOTE 7.NOTES PAYABLE AND LONG-TERM DEBT
At December 31, 2000 and 1999, the Company's long-term debt consisted of the following:
At December 31, 2000 and 1999, the estimated fair value of debt obligations approximated book value.
On December 22, 1999 the Company closed on its Fiscal 1999 Title XI application and received $5.6 million of Title XI borrowings for qualified Title XI projects. Originally the Company was authorized to receive up to $20.6 million in loans under the Title XI program, and has used the entire amount authorized under such program. The Title XI loans are secured by liens on certain of the Company's fishing vessels and mortgages on the Company's Reedville, Virginia and Abbeville, Louisiana plants. Loans are now available under similar terms pursuant to the Title XI program without intervening lenders. The Company has made application for loans under this new program but has not yet closed on such applications.
OMEGA PROTEIN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
On December 20, 2000 the Company entered into a three year $20.0 million revolving credit agreement with Bank of America, N.A. (the "Credit Facility"). Borrowings under this facility may be used for working capital and capital expenditures. The Credit Facility bears interest at a rate equal to (i) LIBOR plus 250 basis points or (ii) at the Company's option, the Bank's prime rate. The Credit Facility requires a per annum commitment fee of one-half of a percent (0.5%) on the daily average unused portion of the commitment of the Lender. The Credit Facility is collateralized by all of the Company's trade receivables, inventory and equipment. The Company and its subsidiaries are required to comply with certain financial covenants, including maintenance of a minimum tangible net worth and minimum EBITDA. In addition, the Credit Facility does not allow for the payment of cash dividends or stock repurchases and also limits capital expenditures and investments. As of December 31, 2000 the Company had no borrowings outstanding under the Credit Facility. The Credit Facility expires on December 20, 2003.
Annual Maturities
The annual maturities of long-term debt for the five years ending December 31, 2005 are as follows (in thousands):
NOTE 8.CASH FLOW AND EARNINGS PER SHARE INFORMATION
For purposes of the statement of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents.
Net cash provided by operating activities reflects cash payments of interest and income taxes.
In Fiscal 2000 and Fiscal 1999, 28,000 and 26,000 shares, respectively, of the Company's common stock were issued to Directors as fees in a non cash transaction as payment in lieu of Board retainer and per diem fees.
For the Fiscal years ended December 31, 2000 and 1999 and the three months ended December 1998, there were no effects of dilutive stock options. The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations (in thousands except share and per share data) for the year ended September 30, 1998.
OMEGA PROTEIN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
NOTE 9.INCOME TAXES
The Company's provision (benefit) for income taxes consisted of the following:
As of December 31, 2000 for federal income tax purposes, the Company has $31,557,000 in net operating losses expiring in 2006-2021, and approximately $1,226,000 in alternative minimum tax credit carryforward.
The following table reconciles the income tax provisions computed using the U.S. statutory rate of 34.0% to the provisions reflected in the financial statements.
Temporary differences and tax credit carryforwards that gave rise to significant portions of deferred tax assets and liabilities as of December 31, 2000 and 1999 are as follows:
OMEGA PROTEIN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
The Company's ability to realize the entire benefit of its deferred tax asset requires that the Company achieve certain future earning levels prior to the expiration of its NOL carryforwards. The Company could be required to record a valuation allowance for a portion or all of its deferred tax asset if market conditions deteriorate and future earnings are below, or projected to be below, its current estimates.
NOTE 10. ACCRUED LIABILITIES
Accrued liabilities as of December 31, 2000 and 1999 are summarized as follows:
NOTE 11. EMPLOYEE 401(k) PLAN
All qualified employees of the Company are covered under the Omega Protein 401(k) Savings and Retirement Plan (the "Plan"). The Company contributes matching contributions to the Plan based on employee contributions and compensation. Contributions to the plan totaled approximately $816,000 in Fiscal 2000, $1,004,000 in Fiscal 1999, $298,000 in the Transition Period and $502,000 in Fiscal 1998. The Company has elected to suspend its matching contributions to the Plan for Fiscal 2001 and will evaluate its position concerning the matching contributions prior to the Fiscal 2002 Plan year.
NOTE 12. PENSION AND STOCK OPTION PLANS
Pension Plan
The Company has a pension plan covering substantially all employees. Plan benefits are generally based on an employee's years of service and compensation level. The plan has adopted an excess benefit formula integrated with covered compensation. Participants are 100% vested in the accrued benefit after five years of service.
Components of net periodic benefit cost:
OMEGA PROTEIN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
The Company's funding policy is to make contributions as required by applicable regulations. No contributions to the plan have been required since 1984. The plan's funded status and amounts recognized in the Company's balance sheet at December 31, 2000 and 1999, are presented below:
The unrecognized transition asset at October 1, 1987, was $5.2 million, which is being amortized over 15 years. For Fiscal 2000 and Fiscal 1999, the actuarial present value of the projected benefit obligation was based on a 4.75% weighted-average annual increase in salary levels and a 7.50% discount rate. Pension plan assets are invested in cash, common and preferred stocks, short-term investments and insurance contracts. The projected long-term rate of return on plan assets was 9.0% in Fiscal 2000 and Fiscal 1999, respectively. The unrecognized net loss of $3.4 million at December 31, 2000 is expected to be reduced by future returns on plan assets and through decreases in future net pension credits.
Stock Option Plans
On January 26, 1998, the 1998 Long-Term Incentive Plan of the Company (the "1998 Incentive Plan") was approved by the Company's Board. The 1998 Incentive Plan provides for the grant of any or all of the following types of awards: stock options, stock appreciation rights, stock awards and cash awards. These options generally vest ratably over three years from the date of grant and expire ten years from the date of grant.
OMEGA PROTEIN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
On January 26, 1998, the Non-Management Director Stock Option Plan (the "Directors Plan") was approved by the Board. The Directors Plan provides that the initial Chairman of the Board be granted options to purchase 568,200 shares of the Common Stock and each other initial non-employee director of the Company will be granted options to purchase 14,200 shares of Common Stock at a price determined by the Board.
On June 27, 2000, the 1998 Incentive Plan and the Director Plan were amended and restated in their entirety and renamed the 2000 Long-Term Incentive Plan ("2000 Incentive Plan"). The substantive changes from the 1998 Incentive Plan and the Directors Plan in the amendment and restatement of the 2000 Incentive Plan were (a) the 2000 Incentive Plan allows annual option grant awards of 10,000 shares to each non-employee Director and (b) the 2000 Incentive Plan allows for the aggregate number of option shares available for issuance under the plan to equal 25.0% of the number of shares of common stock outstanding at any time with an absolute maximum of no more than 15 million shares available for awards at any time. Reference is made to the Company's 2000 proxy statement for a complete summary of all the differences among the three plans.
The Company applies the provisions of APB Opinion 25 and related interpretations in accounting for the Plan. In 1995, the FASB issued SFAS No. 123 "Accounting for Stock-Based Compensation" which, if fully adopted by the Company, would change the methods the Company applies in recognizing the cost of the Plans. Adoption of the cost recognition provisions of SFAS No. 123 is optional and the Company has decided not to elect these provisions of SFAS No. 123. However, pro forma disclosures as if the Company adopted the cost recognition provisions of SFAS No. 123 in 1995 are required by SFAS No. 123 and are presented below.
Had the compensation cost for the Company's stock-based compensation plans been determined consistent with SFAS No. 123, the Company's net income and net income per common share for the periods presented would approximate the pro forma amounts below (in thousands, except per share data):
The effects of applying SFAS 123 in this pro forma disclosure are not indicative of future amounts. SFAS 123 does not apply to awards prior to 1995, and the Company anticipates making awards in the future under its stock-based compensation plans.
Under the 2000 Incentive Plan, the Company is authorized to issue shares of Common Stock pursuant to "Awards" granted in various forms, including incentive stock options (intended to qualify under Section 422 of the Internal Revenue Code of 1986, as amended), non-qualified stock options, and other similar stock-based Awards. The Company granted stock options in Fiscal 1998, 1999 and 2000 under the Plan and its predecessor plans in the form of non- qualified stock options.
In accordance with APB Opinion 25, the Company has not recognized any compensation cost for these stock options granted in Fiscal 2000, Fiscal 1999 or in Fiscal 1998.
OMEGA PROTEIN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
A summary of the status of the Company's stock options granted to employees and directors as of December 31, 2000, 1999, and 1998, and September 30, 1998 and the changes during the years are presented below. Prior to January 1998, there was no Company stock option plan for the Company's employees or directors.
There were 312,750 options granted on October 28, 1999 which had a weighted average exercise price of $3.50 whereas the closing market rate on that date was $2.875. All other options that have been granted were equal to the average of the high and low market prices on the date of grant.
The fair value of each stock option granted is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:
OMEGA PROTEIN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
The following table summarizes information about the 2000 Incentive Plan stock options outstanding at December 31, 2000.
NOTE 13. CERTAIN TRANSACTIONS AND ARRANGEMENTS BETWEEN THE COMPANY AND ZAPATA
The Company provides to Zapata payroll and certain administrative services billed at their approximate cost. During Fiscal 2000, Fiscal 1999, Transition Period, and Fiscal 1998, fees for these services totaled $13,500 $97,000, $68,000, and $156,000, respectively. The cost of such services was based on the estimated percentage of time that employees spend working on Zapata's matters as a percent of total time worked. The Company's management deemed this allocation method to be reasonable.
Upon completion of the Company's initial public offering in 1998 the Company and Zapata entered into certain agreements that included the Separation, Sublease, Registration Rights, Tax Indemnity and Administrative Services Agreements. The Separation Agreement required the Company to repay $33.3 million of indebtedness and current payables owed by the company to Zapata contemporaneously with the consummation of the Company's initial public offering and prohibits Zapata from competing with the Company for a period of five years. The Sublease Agreement provides for the Company to lease its principal corporate offices in Houston, Texas from Zapata and provides the Company with the ability to utilize certain shared office equipment for no additional charge. The Registration Rights Agreement sets forth the rights and responsibilities of each party concerning certain registration filings and provides for the sharing of fees and expenses related to such filings. The Tax Indemnity Agreement requires the Company to be responsible for federal, state and local income taxes from its operations. The Administrative Services Agreement allows the Company to provide certain administrative services to Zapata at the Company's estimated cost.
The following represents intercompany activity for the periods presented:
OMEGA PROTEIN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
NOTE 14. COMMITMENTS AND CONTINGENCIES
Operating Lease Payable
Future minimum payments under non-cancelable operating lease obligations aggregate $2,138,000, and for the five years ending December 31, 2005 are (in thousands):
Rental expense for operating leases was $760,000, $714,000, $170,000 and $606,000 in Fiscal 2000, Fiscal 1999, the Transition Period and Fiscal 1998, respectively.
Litigation
The Company is defending various claims and litigation arising from its operations which arise in the ordinary course of the Company's business. In the opinion of management, any losses resulting from these matters will not have a material adverse effect on the Company's results of operations, cash flows or financial position.
Environmental Matters
The Company is subject to various possible claims and lawsuits regarding environmental matters. Management believes that costs, if any, related to these matters will not have a material adverse effect on the results of operations, cash flows or financial position of the Company.
NOTE 15. INDUSTRY SEGMENT AND GEOGRAPHIC INFORMATION
The Company operates within one industry segment, menhaden fishing, for the production and sale of fish meal, fish solubles and fish oil. Export sales of fish oil and fish meal were approximately $21.7 million, $38.6 million, $7.9 million and $55.4 million in Fiscal 2000, Fiscal 1999, the Transition Period and Fiscal 1998, respectively. Such sales were made primarily to European markets. In Fiscal 2000, Fiscal 1999, the Transition Period and Fiscal 1998, sales to one customer were approximately $6.3 million, $8.7 million, $3.2 million and $17.0 million, respectively.
The following table shows the geographical distribution of revenues (in millions) based on location of customers:
OMEGA PROTEIN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
NOTE 16. QUARTERLY FINANCIAL DATA (UNAUDITED)
Seasonal and Quarterly Results
The Company's menhaden harvesting and processing business is seasonal in nature. The Company generally has higher sales during the menhaden harvesting season (which includes the second and third quarter of each Fiscal year) due to increased product availability, but prices during the fishing season tend to be lower than during the off-season. As a result, the Company's quarterly operating results have fluctuated in the past and may fluctuate in the future. In addition, from time to time the Company defers sales of inventory based on worldwide prices for competing products that affect prices for the Company's products which may affect comparable period comparisons.
The following table presents certain unaudited operating results for each of the Company's preceding eight quarters. The Company believes that the following information includes all adjustments (consisting only of normal recurring adjustments) that the Company considers necessary for a fair presentation, in accordance with generally accepted accounting principles. The operating results for any interim period are not necessarily indicative of results for any other period.
OMEGA PROTEIN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
The following tables sets forth certain unaudited operations data as a percentage of revenues for each of the Company's preceding eight quarters:
Item 9.
Item 9. Changes in and Disagreements with Accountants and Financial Disclosure.
Not applicable.
PART III
Item 10.
Item 10. Directors and Executive Officers of the Registrant
Pursuant to General Instruction G on Form 10-K, the information called for by Item 10 of Part III of Form 10-K is incorporated by reference to the information set forth in the Company' definitive proxy statement relating to its 2001 Annual Meeting of Stockholders the "2001 Proxy Statement") to be filed pursuant to Regulation 14-A under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), in response to Items 401 and 405 of Regulation S-K under the Securities Act of 1933, as amended, and the Exchange Act ("Regulation S-K"). Reference is also made to the information appearing in Item 1 of Part I of this Annual Report on Form 10-K under the caption "Business and Properties--Executive Officers of the Registrant."
Item 11.
Item 11. Executive Compensation
Pursuant to General Instruction G of Form 10-K, the information called for by Item 11 of Part III of Form 10-K is incorporated by reference to the information set forth in the 2001 Proxy Statement in response to Item 402 of Regulation S-K, excluding the material concerning the report on executive compensation and the performance graph specified by paragraphs (k) and (l) of such Item.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Pursuant to General Instruction G of Form 10-K, the information called for by Item 12 of Part III of Form 10-K is incorporated by reference to the information set forth in the 2001 Proxy Statement in response to Item 403 of Regulation S-K.
Item 13.
Item 13. Certain Relationships and Related Transaction
Pursuant to General Instruction G of Form 10-K, the information called for by Item 13 of Part III of Form 10-K is incorporated by reference to the information set forth in the 2001 Proxy Statement in response to Item 404 of Regulation S-K.
PART IV
Item 14.
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) (1) Consolidated financial statements, Omega Protein Corporation and subsidiary companies
(a) (2) Financial Statement Schedule.
Filed herewith as a financial statement schedule is the schedule supporting Omega's consolidated financial statements listed under paragraph (a) of this Item, and the Report of Independent Accountants' with respect thereto.
(a) (3) Exhibits
* Incorporated by reference + Management Contract or Compensatory Plan or arrangement required to be filed as an exhibit pursuant to the requirements of Item 14 (a) of Form 10-K and Item 601 of Regulation S-K.
(b) Reports on Form 8-K.
None.
OMEGA PROTEIN CORPORATION
SCHEDULE OF VALUATION AND QUALIFYING ACCOUNTS
- -------- (A) Allowance for Doubtful Accounts--uncollectible accounts written off.
REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULE
To the Board of Directors of Omega Protein Corporation:
Our audits of the consolidated financial statements of Omega Protein Corporation referred to in our report dated March 3, 2001, are included in Item 8 of this Form 10-K also included an audit of the financial statement schedule listed in Item 14(a) (2) of this Form 10-K. In our opinion, this financial statement schedule, presents fairly, in all material respects, the information required to be included therein when read in conjunction with the related consolidated financial statements.
PricewaterhouseCoopers LLP
New Orleans, Louisiana February 23, 2001
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on March 20, 2001.
Omega Protein Corporation (Registrant)
/s/ Robert W. Stockton By:__________________________________ Robert W. Stockton Executive Vice President, Chief Financial Officer and Corporate Secretary
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Joseph L. von Rosenberg III or Robert W. Stockton, or either of them, his true and lawful attorney's-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign to the Company's Form 10-K for the year ended December 31, 2000 and any or all statements, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys- in-fact and agents, or either of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
March 20, 2001
Pursuant to the requirements of the Securities Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.