SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of
The Securities Exchange Act of 1934
Date of Report (date of earliest event reported): June 1, 1999
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KTI, INC.
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(Exact Name of Registrant as specified in its Charter)
New Jersey
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(State or Other Jurisdiction of Incorporation)
33-85234 22-2665282
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(Commission File Number) (IRS Employer Identification No.)
(201)854-7777
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(Registrant's Telephone Number, including Area Code)
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
Item 2. Acquisition or Disposition of Assets
On June 1, 1999, the Registrant entered into an agreement with Loop Paper
Recycling, Inc., an Illinois corporation to sell substantially all the assets of
the Registrant's commercial recycling facility located in Franklin Park,
Illinois for an aggregate consideration of approximately $1,757,000. The
Registrant recorded a loss before income taxes of approximately $444,000 as a
result of this transaction.
Item 7. Financial Statements and Exhibits
(b) Unaudited Pro Forma Financial Information
The KTI, Inc. unaudited pro forma historical statements of operations for the
six months ended June 30, 1999 and the twelve months ended December 31, 1998
include the effect of KTI's sale of substantially all assets of KTI Recycling of
Illinois, Inc. on June 1, 1999, as if the sale had occurred on January 1, 1998.
The KTI unaudited pro forma historical financial statements are not necessarily
indicative of the results of operations which would have been achieved had this
transaction been completed at January 1, 1998 and should not be construed as
representative of future operations.
KTI, INC.
UNAUDITED PRO FORMA HISTORICAL STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED
JUNE 30, 1999
(IN THOUSANDS, EXCEPT PER SHARE DATA)
COMPLETED SALE KTI
RECYCLING PRO FORMA
KTI, INC. OF ILLINOIS KTI, INC.
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Revenues $130,921 $(792) $130,129
Cost of operations 109,246 (986) 108,260
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Gross Profit 21,675 194 21,869
Selling, general and administrative 12,181 (91) 12,090
Restructuring charge 3,719 3,719
Asset impairment charge 3,000 3,000
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Income from operations 2,775 285 3,060
Interest expense, net 9,053 9,053
Loss on sale of business 444 (444) -
Equity loss in subsidiary 294 294
Other charges 131 131
Other expenses, net 123 123
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Loss from continuing operations before minority
interest, benefit for income taxes, extraordinary item,
and cumulative effect of change in accounting principle (7,270) 729 (6,541)
Minority interest 1,176 1,176
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Loss from continuing operations
before benefit for income taxes extraordinary item,
and cumulative effect of change in accounting principle (8,446) 729 (7,717)
Benefit for income taxes (2,565) 291 (2,274)
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Loss from continuing operations
before extraordinary item and cumulative effect
of change in accounting principle $ (5,881) $438 $(5,443)
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Pro forma loss per share from continuing operations before
extraordinary item and cumulative effect of change in
accounting principle:
Basic $(0.43) $ (0.40)
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Diluted $(0.43) $ (0.40)
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Weighted average common shares outstanding:
Basic 13,818,290 13,818,290
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Diluted 13,818,290 13,818,290
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KTI, INC.
UNAUDITED PRO FORMA HISTORICAL STATEMENT OF OPERATIONS FOR THE TWELVE MONTHS ENDED
DECEMBER 31, 1998
(IN THOUSANDS, EXCEPT PER SHARE DATA)
COMPLETED SALE KTI
RECYCLING PRO FORMA
KTI, INC. OF ILLINOIS KTI, INC.
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Revenues $179,007 $(2,491) $176,516
Cost of operations 156,664 (3,053) 153,611
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Gross Profit 22,343 562 22,905
Selling, general and administrative 7,947 (15) 7,932
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Income from operations 14,396 577 14,973
Interest expense, net (10,667) 3 (10,664)
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Income from continuing operations
before minority interest, benefit for
income taxes and extraordinary item 3,729 580 4,309
Minority interest 3,702 3,702
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Income from continuing operations
before benefit for income taxes
and extraordinary item 27 580 607
Benefit for income taxes (3,023) 232 (2,791)
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Income from continuing operations
before extraordinary item $3,050 $348 $3,398
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Pro forma earnings per share from continuing
operations before extraordinary item:
Basic $0.29 $0.32
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Diluted $0.27 $0.30
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Weighted average common shares outstanding:
Basic 10,548,570 10,548,570
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Diluted 11,398,151 11,398,151
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KTI, INC.
NOTES TO UNAUDITED PRO FORMA HISTORICAL FINANCIAL STATEMENTS
1. DESCRIPTION OF TRANSACTION
On June 1, 1999, KTI sold substantially all the assets of KTI Recycling of
Illinois, Inc. ("Illinois") for approximately $1.8 million in cash.
The KTI unaudited pro forma historical financial statements are not necessarily
indicative of the results of operations which would have been reported if the
sale of Illinois had occurred on January 1, 1998 nor are they necessarily
indicative of the future operating results of KTI. In the opinion of management,
all adjustments necessary to present fairly such pro forma historical statement
of operations have been made.
The KTI unaudited pro forma historical financial statements should be read in
conjunction with the historical consolidated financial statements of KTI.
2. EARNINGS PER SHARE
The pro forma earnings per share calculations are based on the historical basic
and diluted weighted average number of shares outstanding as of December 31,
1998.
3. IMPACT ON BALANCE SHEET AS OF MARCH 31, 1999
The impact of this transaction on the balance sheet as of March 31, 1999 would
be to decrease property, equipment and leasehold improvements by approximately
$2.2 million, accounts payable by approximately $1.8 million, and stockholders'
equity by approximately $0.4 million.
(c) Exhibits
Exhibit No. Description
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99.1 Agreement for the Purchase of Assets dated June 1, 1999, by
and between KTI Recycling of Illinois, Inc. and Loop Paper
Recycling, Inc. The schedules to this Exhibit 99.1 do not
contain information which is material to an investment
decision. The Registrant hereby agrees to furnish a copy of
any omitted schedule to the Commission upon request.
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 hereto duly authorized.
Date: November 5, 1999 KTI, INC.
(Registrant)
By: /s/ Martin J. Sergi
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Martin J. Sergi
President