SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Amendment No. 3 to Current Report
Pursuant to Section 13 or 15 (d) of
the Securities Exchange Act of 1934
Date of Report: August 27, 1997
WASTE RECOVERY, INC.
(Exact name of Registrant as specified in its Charter)
TEXAS 75-1833498
(State or other jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
309 S. PEARL EXPRESSWAY, DALLAS, TX 75201
(Address of principal executive offices) (Zip Code)
(214) 741-3865
(Registrant's Telephone Number, Including Area Code)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
As reported in the Current Report on Form 8-K for Waste Recovery, Inc.
(the "Company") dated December 9, 1996, the Company consummated the
acquisition of U.S. Tire Recycling Partners, L.P. (U.S. Tire) and Waste
Recovery-Illinois general partnership. The consideration paid for these
acquisitions included newly issued unregistered shares of Common Stock of
the Company. In the agreement to acquire U.S. Tire, the Company agreed to
file a registration statement with the Securities and Exchange Commission
to register shares issued to the sellers of U.S. Tire after its 1996 Form
10-K is filed. In connection with the filing of the registration
statement, an updated Pro Forma Consolidated Statement of Operations
(unaudited) for the year ended December 31, 1996, is included in this
Amendment No. 3 to the Company's Current Report on Form 8-K dated December
9, 1996.
ITEM 7. PRO FORMA FINANCIAL INFORMATION.
b. PRO FORMA FINANCIAL INFORMATION.
The pro forma financial information is included on pages P-1 through
P-2 of this document.
[End of Page]
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
WASTE RECOVERY, INC.
DATE: August 27, 1997 /s/THOMAS L. EARNSHAW
-----------------------------------
By: THOMAS L. EARNSHAW
Vice Chairman
(Principal Financial and Accounting Officer)
INDEX TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
WASTE RECOVERY, INC.
Pro Forma Consolidated Statement of Operations for the Year
Ended December 31, 1996 (Unaudited) P-1
Notes to Pro Forma Consolidated Statement of Operations (Unaudited) P-2
WASTE RECOVERY, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
The following unaudited Pro Forma Consolidated Statement of Operations of
Waste Recovery, Inc. (the Company) for the year ended December 31, 1996 has
been prepared as if the acquisitions and related financings had occurred at
the beginning of 1996.
The Pro Forma Consolidated Statement of Operations for the year ended
December 31, 1996 is based upon the historical financial statements of U.S.
Tire Recycling Partners L.P. for the eleven months ended November 30, 1996,
the historical financial statements of Waste Recovery-Illinois, a general
partnership, for the eleven months ended November 30, 1996, and the
historical consolidated financial statements of the Company for the year
ended December 31, 1996.
In the opinion of management, all adjustments have been made that are
necessary to present fairly the pro forma data.
The unaudited Pro Forma Consolidated Statement of Operations data are not
necessarily indicative of the results that would have been reported had such
events occurred on the date specified, nor are they indicative of the
Company's future results.
WASTE RECOVERY, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Year Ended December 31, 1996
Historical Pro Forma
------------------------------------------------ --------------------
Waste U.S. Tire Waste Recovery, Inc.
Recovery - Recycling Waste Recovery-
Waste Illinois Partners, L.P. Illinois
Recovery, Inc. Eleven Months Eleven Months U.S. Tire Recycling
Year Ended Ended Ended Partners, L.P.
December 31, November 30, November 30, Pro Forma Year Ended
1996 1996 1996 Adjustments December 31, 1996
---------------------------------------------------------------------------------
Revenues:
Tire-derived fuel sales $ 1,589,405 $ 989,150 $ 230,226 $ (136,477)(6) $ 2,672,304
Royalties - - 88,005 88,005
Wire sales 397,701 172,275 - 569,976
Disposal fees, hauling, and other
revenues 14,687,426 2,577,006 3,840,105 - 21,104,537
----------- ----------- ---------- ----------- ------------
Total revenues 16,674,532 3,738,431 4,158,336 (136,477) 24,434,822
Operating expenses 11,908,912 3,342,784 2,560,788 (136,477)(6) 17,676,007
(44,000)(6)
25,000 (3)
(31,444)(4)
General and administrative expenses 3,171,418 654,044 631,121 (80,764)(1) 4,325,375
(47,660)(2)
Depreciation and amortization 1,194,450 1,094,070 379,284 (98,214)(6) 2,521,930
----------- ----------- ---------- ----------- ------------
399,752 (1,352,467) 587,143 277,082 (88,490)
Other income (expense):
Other income (expense) 302,306 - - (83,850)(6) 218,456
Interest income 72,083 64,162 6,368 (27,000)(6) 115,613
Interest expense (447,176) (534,058) (127,619) 27,000 (6) (1,081,853)
Grant income - 336,798 - 336,798
Gains on sales of property &
equipment 9,270 - - 9,270
Gain on involuntary conversion
of assets 624,219 - - 624,219
Equity in partnership loss (668,504) - - 668,504 (5) -
Supervisory management fees - - (197,450) 118,680 (1) (78,770)
----------- ----------- ---------- ----------- ------------
(107,802) (133,098) (318,701) 703,334 143,733
----------- ----------- ---------- ----------- ------------
Income (loss) before income taxes 291,950 (1,485,565) 268,442 980,416 55,243
Income tax benefit (expense) (8,850) - (19,904) (28,754)
----------- ----------- ---------- ----------- ------------
Net income (loss) 283,100 (1,485,565) 248,538 980,416 26,489
Undeclared preferred stock dividends 142,896 - - 142,896
----------- ----------- ---------- ----------- ------------
Net income (loss) available to
common shareholders $ 140,204 $(1,485,565) $ 248,538 $ 980,416 $ (116,407)
----------- ----------- ---------- ----------- ------------
----------- ----------- ---------- ----------- ------------
Net income (loss) per share $ .01 $ (.01)
----------- ------------
----------- ------------
Weighted average number of common
and dilutive common equivalent
shares outstanding 11,856,758 15,759,021
----------- ------------
----------- ------------
SEE ACCOMPANYING NOTES.
P-1
WASTE RECOVERY, INC.
NOTES TO PRO FORMA STATEMENT OF OPERATIONS
(Unaudited)
Year Ended December 31, 1996
(1) Cost savings resulting from:
U.S. Tire
---------
Workforce reductions and realignments (a) $ 118,680
Change in worker's compensation insurance (b) 80,764
----------
$ 199,444
----------
----------
(a) Represents workforce reductions and realignments that have occurred.
(b) Represents the difference between the cost for U.S. Tire's worker's
compensation insurance and the actual cost to the Company.
(2) To record the change in depreciation on property, plant, and equipment,
and amortization of intangible assets resulting from the purchase
accounting adjustments, net of the amortization of intangible assets
included in the historical financial statements. Estimated useful lives
used for the major tangible and intangible assets were as follows:
Machinery and equipment 5-10 years
Buildings and leasehold improvements 20 years
Intangible assets 15-20 years
(3) To reflect the increase in corporate overhead costs associated with the
new corporate organization.
(4) To reflect non-recurring acquisition-related expenses.
(5) To eliminate the Company's equity in loss from its original 45% partnership
interest in WR-Illinois.
(6) To eliminate intercompany transactions between the Company and
WR-Illinois. The following intercompany transactions were eliminated:
Intercompany sales (a) $136,477
Administrative fees (b) 44,000
Interest charges (c) 27,000
Deferred construction fees (d) 39,850
Depreciation in construction fees (e) 98,214
--------
Total $345,541
--------
--------
(a) Represents sales of TDF by the Company to WR-Illinois.
(b) Represents administrative fees earned by the Company from WR-Illinois.
(c) Represents interest charges from the Company to WR-Illinois for
interest on intercompany debt.
(d) Represents the portion of deferred construction fee revenue from
Waste Recovery-Illinois which was recognized as revenue for the
period.
(e) Represents depreciation expense recorded by WR-Illinois relating to
the capitalized construction fee paid to the Company.
P-2