-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Wn94t0g62mAaz96muRZ3DFslSFIPe6tUlUeCWVOGhD3y4Xg6ivPWboUigEFDRBrP 2lAEKdDCpmCe4yrpc8/ipQ== 0000950123-98-000665.txt : 19980130 0000950123-98-000665.hdr.sgml : 19980130 ACCESSION NUMBER: 0000950123-98-000665 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971112 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980129 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: KTI INC CENTRAL INDEX KEY: 0000931581 STANDARD INDUSTRIAL CLASSIFICATION: COGENERATION SERVICES & SMALL POWER PRODUCERS [4991] IRS NUMBER: 222665282 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-25490 FILM NUMBER: 98516172 BUSINESS ADDRESS: STREET 1: 7000 BLVD E CITY: GUTTENBERG STATE: NJ ZIP: 07093 BUSINESS PHONE: 2018547777 MAIL ADDRESS: STREET 1: 7000 BOULEVARD EAST CITY: GUTTENBERG STATE: NJ ZIP: 07093 8-K/A 1 KTI, INC. 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 -------------------------------------- FORM 8-KA CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): November 12, 1997 KTI, INC. (Exact name of Registrant as specified in Charter) New Jersey 33-85234 22-2665282 (State or other juris- (Commission (IRS Employer diction of incorporation) File Number) Identification Number) 7000 Boulevard East, Guttenberg, New Jersey 07093 (Address of principal executive office) (Zip Code) Registrant's telephone number including area code- (201) 854-7777 Not Applicable (Former name and former address, as changed since last report) 2 ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. On September 30, 1997, KTI, Inc., a New Jersey corporation (the Company or the Registrant), exercised its option to purchase an additional 14.8% limited partnership interest in Penobscot Energy Recovery Company, Limited Partnership, a Maine limited partnership ("PERC") from the Prudential Insurance Company of America ("Prudential") for $2.1 million in cash. With this purchase, the Company's interest in PERC has increased to 71.3%. Energy National, Inc., a subsidiary of NRG Energy, holds the remaining 28.7% interest in PERC, 3% as a general partner and 25.7% as a limited partner. PERC is located in Orrington, Maine and owns a 25 megawatt waste-to-energy power generating plant. Power is produced by processing approximately 250,000 tons of municipal solid waste received from 230 communities in Maine. The power is sold to Bangor Hydro-Electric Company under a long-term power supply contract. PERC had $30.3 million of revenue and $6.1 million of net income in 1996. For the nine months ended on September 30, 1997, PERC had revenue of $23.8 million and net income of $5.2 million. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial Statements of the business acquired. The audited balance sheet of Penobscot Energy Recovery Company, Limited Partnership, as of December 31, 1996 and 1995 and the related statements of income, changes in partners' capital and cash flow for each of the three years in the period ended December 31, 1996 were included in the Registrant's Form 10-K for the fiscal year ended December 31, 1996. (b) Pro Forma Financial information. The following pro forma condensed combined financial statements are based on the historical financial statements of the company and of PERC at December 31, 1996 and September 30, 1997. The pro forma condensed combined statement of operations assumes that the Company purchased PERC at the beginning of the stated period. The Company's financial statements on Form 10-Q for the quarterly period ended September 30, 1997 consolidate PERC for balance sheet purposes. Accordingly, no pro forma balance sheet is included herein. The pro forma condensed combined statements of operations are not necessarily indicative of operating results which would have been achieved had this transaction been completed at the beginning of the respective periods and should not be construed as representative of future operations. 3
KTI, INC. PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS (UNAUDITED) YEAR ENDED DECEMBER 31, 1996 KTI, INC. PERC PRO FORMA PRO FORMA ADJUSTMENTS KTI, INC. ------------ ------------ ------------ ------------ REVENUES Electric Power Revenues $ 20,820,860 $ 18,478,405 $ 39,299,265 Gain on Sale of Capacity 33,203,252 33,203,252 Waste Processing Revenues 11,024,265 11,807,454 (530,786)(1) 22,300,933 Other Waste Handling Revenues 3,459,546 3,459,546 ------------ ------------ ------------ ------------ Total Revenues 68,507,923 30,285,859 (530,786) 98,262,996 COSTS AND EXPENSES Electric power and waste processing operating costs 26,453,290 15,660,582 (319,685)(2) 41,263,401 (530,786)(1) Selling, general, and administrative expenses 2,389,008 5,353,385 7,742,393 Interest, net 4,463,873 3,170,785 7,634,658 ------------ ------------ ------------ ------------ Total Costs and Expenses 33,306,171 24,184,752 (850,471) 56,640,452 Equity in net income (loss) of partnerships PERC 332,655 (332,655)(3) -- Loss of Sale of Investment (296,459) (296,459) ------------ ------------ ------------ ------------ Income from continuing operations before minority interest 35,237,948 6,101,107 (12,970) 41,326,085 Minority Interest 18,609,797 1,751,018(4) 20,360,815 ------------ ------------ ------------ ------------ Income from continuing operations available for Shareholders 16,628,151 6,101,107 (1,763,988) 20,965,270 Preferred Dividends 1,198,750(5) 1,198,750 ------------ ------------ ------------ ------------ Income from continuing operations for Common Shareholders $ 16,628,151 $ 6,101,107 $ (2,962,738) $ 19,766,520 ============ ============ ============ ============ Income from continuing operations per common share and common share equivalent: Primary: ------------ ------------ Income from continuing operations $ 2.61 $ 3.11 ============ ============ Weighted average number of common shares 6,359,593 6,359,593 and common share equivalents outstanding Fully Diluted: ------------ ------------ Income from continuing operations $ 2.40 $ 2.59 ============ ============ Weighted average number of common shares 6,925,976 1,165,957(6) 8,091,933 and common share equivalents outstanding
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KTI, INC. PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS (UNAUDITED) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 PRO FORMA PRO FORMA KTI, INC. ADJUSTMENTS KTI INC. ------------ ------------ ------------ REVENUES Electric Power Revenues $ 30,389,250 $ 30,389,250 Waste Processing Revenues 19,513,711 19,513,711 Other Waste Handling Revenues 16,096,812 16,096,812 ------------ ------------ Total Revenues 65,999,773 65,999,773 COSTS AND EXPENSES Electric Power and Waste Processing 50,180,577 $ (239,764)(a) 49,940,813 Operating Costs Selling, General, and Administrative 2,375,680 2,375,680 Interest, Net 3,699,876 3,699,876 ------------ ------------ ------------ Total Costs and Expenses 56,256,133 (239,764) 56,016,369 ------------ ------------ ------------ Income from Continuing Operations before Minority 9,743,640 239,764 9,983,404 Interest Pre-acquisition Earnings Minority Interest (3,983,766) 3,983,766 (b) Minority Interest in Subsidiaries (1,229,287) (1,229,399)(c) (2,458,686) ------------ ------------ ------------ Income from continuing operations 4,530,587 2,994,131 7,524,718 Preferred Dividends 896,599(d) 896,599 ------------ ------------ ------------ Income from continuing operations available to Common Shareholders $ 4,530,587 $ 2,097,532 $ 6,628,119 ============ ============ ============ Income from continuing operations per common share and common share equivalent Primary: ------------ ------------ Income from continuing operations $ 0.59 $ 0.86 ============ ============ Weighted Average number of common shares and 7,726,900 7,726,900 common share equivalents outstanding Fully diluted: ------------ ------------ Income from continuing operations $ 0.59 $ 0.85 ============ ============ Weighted Average number of common shares and 7,726,900 1,165,957(e) 8,892,857 common share equivalents outstanding
5 KTI, INC. SEPTEMBER 30, 1997 AND DECEMBER 30, 1996 NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED) 1. DESCRIPTION OF TRANSACTION On September 30, 1997, KTI, Inc. (the Company or the Registrant) purchased a 14.8% limited partnership interest in Penobscot Energy Recovery Company, Limited Partnership, a Maine limited partnership ("PERC") from The Prudential Insurance Company of America ("Prudential") for approximately $2.1 million in cash. 2. PRO FORMA ADJUSTMENTS NINE MONTHS ENDING SEPTEMBER 30, 1997. (a) Reduction in depreciation of property, plant, and equipment as a result of the write down of assets in purchase accounting. (b) Elimination of pre-acquisition earnings in PERC (93% of PERC's net income, representing that share of PERC prior to the acquisition which was not owned by the Company) (c) Additional minority interest reflecting the 28.7% of PERC currently not owned by the Company (d) Dividends on $13,700,000 portion of 8.75% Preferred Stock issue, computed from January 1, 1997 (e) Additional shares from Preferred Stock issue at $11.75 per share YEAR ENDED DECEMBER 31, 1996. (1) Management fees charged by the Company to PERC and included as revenue by the Company, but also included as a cost by PERC (2) Reduction in depreciation of property, plant, and equipment as a result of the write down of assets in purchase accounting. (3) Elimination of the Company's equity earnings in PERC, which was 7% of net income. (4) Additional minority interest, reflecting the consolidation of PERC into the Company and the recording of a 28.7% minority interest. (5) Dividends on $13,700,000 portion of 8.75% Preferred Stock issue, computed from January 1, 1996. (6) Additional shares from Preferred Stock issue at $11.75 per share. 6 (c) Exhibits. Exhibit Number Description -------------- ----------- 4.1 News release dated November 13, 1997 7 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. KTI, Inc. (the Registrant) Dated: January 22, 1998 By: /s/ Martin J. Sergi ------------------------------- Name: Martin J. Sergi Title: President EX-99.4.1 2 NEW RELEASE 1 NEWS RELEASE FOR IMMEDIATE RELEASE KTI ACQUIRES ADDITIONAL 14.8% OF PENOBSCOT ENERGY RECOVERY COMPANY RAISING OWNERSHIP TO 71.3% GUTTENBERG, N. J. (NOV. 13, 1997) -- KTI, Inc. (Nasdaq: KTIE) announced today that it has increased its ownership in the Penobscot Energy Recovery Company (PERC) to 71.3% by purchasing the remaining 14.8% limited partner interest held by Prudential Insurance Company of America for $2.1 million. KTI exercised an option granted in September to acquire Prudential's remaining interest. The other 28.7% of PERC is owned by Energy National, Inc. (ENI), a subsidiary of NRG Energy, which is also a general partner of PERC. Located in Orrington, Maine, PERC processes approximately 250,000 tons of municipal solid waste a year from 230 Maine communities and generates 25 megawatts of electricity which is sold to Bangor Hydro Electric Company. PERC generated $30.3 million in revenue and net income of $6.1 million in 1996. For the nine months ended Sept. 30, 1997, PERC had revenues of $23.8 million and $5.2 million of net income. Martin J. Sergi, president of KTI, said, "We're pleased we have been able to further increase our ownership in PERC. This is consistent with our strategy to maximize our ownership of the waste to energy facilities which we operate. This purchase, which is accretive to earnings, will further enhance our operating results." KTI is an award winning environmental company engaged in integrated waste processing and management in diversified services and markets. The company handles over 1.5 million tons of material a year and is best known for its expertise in the waste-to-energy sector. KTI was organized in 1983 to develop and own waste-to-energy facilities with the dual purpose of providing a means of disposal for non-hazardous municipal solid waste and of generating electricity from alternative fuel sources. Since then, KTI's operations have expanded to include the development of an integrated waste management business providing not only municipal solid waste handling and disposal services, but also wood waste processing, ash and municipal waste recycling, specialty waste disposal, transportation facilitation services and transfer station operations. -----END PRIVACY-ENHANCED MESSAGE-----