<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD TO
--------------- ------------
COMMISSION FILE NUMBER 0-9278
--------------
GEOWASTE INCORPORATED
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
-------------
STATE OF INCORPORATION: DELAWARE I.R.S. EMPLOYER ID. NO. 36-2751684
SUITE 208, 24 CATHEDRAL PLACE
ST. AUGUSTINE, FL 32084
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(904) 824-0201
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes |X| No | |
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Common Stock, $0.10 Par Value, 21,011,967 shares outstanding as of
November 8, 1996.
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<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
PART I: FINANCIAL INFORMATION
<S> <C>
ITEM I: FINANCIAL STATEMENTS (Unaudited)
Consolidated Balance Sheets.....................................................2
Consolidated Statements of Operations...........................................3
Consolidated Statements of Cash Flows...........................................4
Notes to Consolidated Financial Statements......................................5-7
ITEM 2: Management's Discussion and Analysis of Financial
Condition and Results of Operations...........................8-11
PART II: OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS.............................................12
ITEM 2: CHANGES IN SECURITIES.........................................12
ITEM 3: DEFAULTS UPON SENIOR SECURITIES...............................12
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...........12
ITEM 5: OTHER INFORMATION.............................................12
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K..............................12
Signatures......................................................................13
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
GEOWASTE INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30,
Assets 1996 December 31,
(unaudited) 1995
------------ ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 2,349,592 $ 3,985,459
Accounts receivable, net 2,526,387 871,968
Prepaid expense & other 367,559 182,132
Deferred tax asset 161,165 134,000
------------ ------------
Total current assets 5,404,703 5,173,559
------------ ------------
Property and equipment:
Land, primarily disposal site 12,551,741 11,337,667
Building and improvements 340,341 150,793
Vehicles and equipment 8,409,611 3,105,178
------------ ------------
21,301,693 14,593,638
Less: accumulated depreciation (7,880,545) (6,224,889)
------------ ------------
Net property and equipment 13,421,148 8,368,749
------------ ------------
Other assets:
Cost in excess of net assets of
acquired businesses, net of
amortization 9,653,166 1,067,701
Covenants not to compete, net of
amortization 98,333
Funds held in escrow 300,000 985,535
Other 45,594 41,772
------------ ------------
Total other assets 10,097,093 2,095,008
------------ ------------
Total assets $ 28,922,944 $ 15,637,316
============ ============
<CAPTION>
September 30,
Liabilities and stockholders' equity 1996 December 31,
(unaudited) 1995
<S> <C> <C>
Current liabilities:
Current maturities of long-term obligations $ 471,000 $ 151,019
Accounts payable 976,490 137,308
Accrued payroll 165,056 79,235
Accrued fees 241,690 143,582
Accrued taxes 427,334 149,318
Accrued other 667,383 113,045
Deferred revenue 589,926 441,200
------------ ------------
Total current liabilities 3,538,879 1,214,707
Long-term obligations, less current
maturities 6,540,817 4,094,450
Accrued Royalties 1,029,281 1,207,591
Closure obligations 1,715,608 1,511,647
Deferred tax liability 561,648 161,000
Minority interest 61,632 61,564
------------ ------------
Total liabilities 13,447,865 8,250,959
------------ ------------
Stockholders' equity:
Preferred stock, authorized 5,000,000
shares, $.01 par value; none issued
or outstanding
Common stock, authorized 50,000,000 shares,
$.10 par value; issued and outstanding
21,011,967 shares in 1996 and 18,662,605
shares in 1995 2,101,196 1,866,260
Additional paid-in capital 12,648,485 6,191,110
Change in unrealized value 0 67,046
Accumulated earnings (deficit) 725,398 (738,059)
------------ ------------
Total stockholders' equity 15,475,079 7,386,357
------------ ------------
Total liabilities & stockholders' equity $ 28,922,944 $ 15,637,316
============ ============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
2
<PAGE> 4
GEOWASTE INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------- ----------------------------
1996 1995 1996 1995
----------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net revenues $ 3,776,099 $ 2,176,717 $ 9,014,790 $ 6,845,734
Cost and expenses:
Operating 2,281,633 1,307,592 4,959,409 4,024,080
Selling, general & administrative 723,445 386,488 1,687,245 1,112,251
------------ ------------ ------------ ------------
Income from operations 771,021 482,637 2,368,136 1,709,403
Other income (expense):
Other income, primarily interest 41,252 30,422 224,697 114,766
Interest expense (109,002) (95,280) (307,445) (279,479)
------------ ------------ ------------ ------------
Income from operations
before income taxes 703,271 417,779 2,285,388 1,544,690
Income tax provision (benefit) 240,139 (58,043) 821,931 486,000
------------ ------------ ------------ ------------
Net income $ 463,132 $ 475,822 $ 1,463,457 $ 1,058,690
============ ============ ============ ============
Earnings per common
and common equivalent share $ 0.02 $ 0.02 $ 0.07 $ 0.05
============ ============ ============ ============
Weighted average common and
common equivalent shares 21,536,696 20,176,613 21,162,328 19,591,254
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
3
<PAGE> 5
GEOWASTE INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30, September 30,
-------------------------------
1996 1995
------------- -------------
<S> <C> <C>
Cash Flows from operating activities:
Net income $ 1,463,457 $ 1,058,690
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 1,748,495 1,884,180
Non cash interest expense -- 80,823
Non cash closure costs 203,961 479,467
Gain on sale of equipment (1,179) (3,208)
Deferred taxes 141,931 352,000
Changes in assets and liabilities:
Accounts receivable (787,105) 28,998
Prepaid expenses (115,346) (63,866)
Accounts payable & accrued liabilities 536,525 (82,847)
Deferred revenue (82,838) 309,030
------------- -------------
Net cash provided by operating activities 3,107,901 4,043,267
------------- -------------
Cash flows from investing activities:
Additions to property and equipment (2,657,247) (1,733,597)
Proceeds from the sale of equipment 11,000 13,170
Funds held in escrow and other 690,010 (744)
Purchase of business (2,064,922) --
------------- -------------
Net cash used in investing activities (4,021,159) (1,721,171)
------------- -------------
Cash flows from financing activities:
Payment of debt and capital lease obligations (722,609) (318,684)
------------- -------------
Net cash used in financing activities (722,609) (318,684)
------------- -------------
Increase in cash and cash equivalents (1,635,867) 2,003,412
Cash and cash equivalents, beginning of period 3,985,459 1,633,398
------------- -------------
Cash and cash equivalents, end of period $ 2,349,592 $ 3,636,810
============= =============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
4
<PAGE> 6
GEOWASTE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1) BASIS OF PRESENTATION
In the opinion of management, the unaudited consolidated financial
statements for the interim periods ended September 30, 1996 and September 30,
1995 reflect all adjustments, including normally recurring accruals, necessary
to present fairly the financial condition and results of operations of the
Company for and as of the periods and dates indicated. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted in accordance with the rules of the Securities and Exchange Commission.
Operating results for interim periods are not necessarily indicative of the
results that can be expected for a full year. These statements should be read in
conjunction with the Company's Annual Report for 1995 on Form 10-K dated March
29, 1996.
2) SIGNIFICANT ACCOUNTING POLICIES
Earnings Per Common Share
Earnings per common and common equivalent share is computed using the
weighted average number of common and common equivalent shares (stock options,
warrants and conversion of subordinated notes) outstanding during each period.
Consolidated Statements of Cash Flows
For purposes of reporting cash flows, the Company considers all
certificates of deposit and time deposits with original maturities of three
months or less to be cash equivalents.
The Company paid approximately $445,000 and $152,000 for income taxes
and $198,000 and $194,000 for interest during the nine months ended September
30, 1996 and September 30, 1995, respectively.
<TABLE>
<CAPTION>
9 MONTHS ENDED SEPTEMBER 30,
SIGNIFICANT NON-CASH TRANSACTIONS: 1996 1995
---- ----
<S> <C> <C>
Purchase of equipment and vehicles
financed by notes payable. $104,118
Assumption of debt associated with
purchase of business $3,310,647
</TABLE>
Income Taxes
The total provision for income taxes at September 30, 1996 is $822,000.
The current portion of the provision for income taxes at September 30, 1996
consists of Federal income tax expense of $550,000 and state income tax expense
of $147,000. The deferred income tax provision of $125,000 primarily represents
the utilization of AMT tax credits and depreciation differences.
5
<PAGE> 7
The net deferred tax liability at September 30, 1996 consists primarily
of basis differences in fixed assets caused by accelerated depreciation used for
tax purposes.
3) ISSUANCE OF DEBT
On March 5, 1992, the Company completed a private placement of $3
million in Convertible Subordinated Debentures due March 31, 1997 (the
"Debentures"). The Debentures have a term of five years and bear interest at the
rate of 8.5% per annum, payable quarterly. Interest is payable in either cash or
additional Debentures at the Company's option. The Company utilized the feature
of issuing additional Debentures in payment of interest for each quarter since
the issuance of the Debentures up to and, including the quarter ended March 31,
1995. Beginning with the second quarter of 1995, the Company chose to pay
interest of $82,500 per quarter rather than issue additional Debentures. Total
interest paid this year through September 30, 1996 on the Debentures amounts to
$245,000. The Debentures are convertible into the Company's common stock at a
conversion rate of $1.40 per share. Pursuant to the terms of the Debentures, the
Company is obligated to subordinate certain subsequent issuance's of debt to the
rights of the holders of the Debentures. The Debentures subject the Company to
certain covenants, certain prepayment and conversion obligations and certain
restrictions with respect to the declaration and payment of dividends.
4) ACQUISITIONS
(a) On March 21, 1996 the Company acquired North Florida Sweeping
Inc., ("NFS"), street sweeping and solid waste roll off
collection company located in Jacksonville, Florida. The
consideration given of $1,349,000 consisted of $280,000 worth of
stock (233,946 shares valued at 1.197 per share), cash of
$355,000, assumption of debt in the amount of $614,000 and 75,000
exercisable at $1.25 per share. The Company also extended the
exercise date for 2,000,000 warrants previously issued to Allen &
Company incorporated from August 2, 1996 to February 2, 1998 as
consideration for investment advisory services provided to the
Company in connection with the purchase of NFS. The Company
assigned a value of $100,000 to this modification in accordance
with FASB 123 (accounting for stock based compensation).
The acquisition was accounted for by the purchase method of
accounting, and accordingly, the consideration given has been
allocated to the assets acquired and the liabilities assumed
based on the estimated fair values at the date of acquisition.
The excess of the purchase price over the fair value of the
assets acquired was approximately $257,000 and has been recorded
as goodwill, which is being amortized on a straight line basis
over 40 years.
(b) On August 12, 1996, the Company acquired all of the outstanding
capital stock of Spectrum Group, Inc. (d/b/a United Sanitation
"United"), a collection, recycling and transfer company located
in Ocala, Florida, for cash of approximately $1,000,000 and
2,000,000 shares of common stock valued at $3.125 per share. The
acquisition was accounted for using the purchase method.
Accordingly, the purchase price was allocated to assets acquired
based on their estimated fair values. This allocation has
resulted in cost in excess of net assets acquired of
approximately $7,500,000, which is being amortized over 40 years
on a straight line basis. United's results of operations have
been included in the consolidated results of operations since the
date of acquisition.
6
<PAGE> 8
(c) On August 30, 1996 the Company, through its wholly-owned
subsidiary, Spectrum Group, Inc., acquired certain solid waste
collection assets of Standard Disposal Services of Florida, Inc.
The consideration was comprised of $700,000 in cash, assumption
of $580,000 of debt and the issuance of 48,571 shares of common
stock, the issuance of said shares being contingent upon, and
subject to, reduction if certain revenue projections are not met
through November 30, 1996. This acquisition was also accounted
for by the purchase method of accounting. The excess of the
purchase price over the fair value of the assets acquired was
approximately $700,000 and has been recorded as goodwill, which
is being amortized on a straight line basis over 40 years.
The following summarized, unaudited pro forma results of
operations for the nine months ended September 30, 1996 and 1995,
assume the acquisitions above occurred as of the beginning of the
respective periods:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Net revenues $12,578,000 $9,913,500
Net income 1,507,500 974,300
Net income per common share $ 0.07 $ 0.05
</TABLE>
7
<PAGE> 9
ITEM 2 GEOWASTE INCORPORATED AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Net revenues for the quarter ended September 30, 1996 consisted of
collection/recycling revenues of $1,829,000, disposal revenues of $1,207,000,
transfer revenues of $217,000 and sweeping revenues of $522,000. Of the
collection/recycling revenues, $873,000 is attributed to the contribution made
by United which was acquired on August 12, 1996, (please refer to the discussion
under "Acquisitions"). Collection/recycling revenues increased 178% over third
quarter 1995 results (with 133% being attributable to United), disposal revenues
decreased 8% and transfer revenues increased 5%. There were no related sweeping
revenues for the third quarter of 1995. Sweeping operations commenced on March
22, 1996 with the acquisition of North Florida Sweeping, Inc. ("NFS"). Net sales
for the nine months ended September 30, 1996 consisted of collection and
recycling revenues of $3,607,000 ($873,000 for United), disposal revenues of
$3,641,000, transfer revenues of $663,000 and sweeping revenues of $1,103,000.
Without giving effect to the acquisition of United, collection/recycling
revenues increased 32% over prior year levels due principally to the obtaining
of two new contracts in the first quarter of 1996. Disposal revenues have
decreased approximately 12% due to decreased volumes at the Pecan Row Landfill.
All intercompany activity has been excluded.
Operating expenses related to collection/recycling, disposal, transfer
and sweeping for the quarter ended September 30, 1996, consisted of
collection/recycling expenses of $1,014,000 ($609,000 for United), disposal
expenses of $756,000, transfer expenses of $90,000 and sweeping expenses of
$421,000. Costs and expenses for collection/recycling operations increased 243%
over the third quarter of 1995 (with 206% being attributed to United). Disposal
operating costs decreased 18% from the third quarter of 1996. The increases in
collection costs were principally related to expenses associated with the two
new contracts referred to above and generally higher operating levels in 1996.
The decrease in disposal costs resulted from 1) increased volumes compared to
the third quarter of 1996 and 2) a reduction in cell related amortization rates
due to the Company's obtaining a permit modification for a vertical expansion of
the landfill. The Company's cell related amortization rates decreased by $3.40
per ton or $218,000 for the third quarter of 1996. Transfer station costs
increased 2% due to a moderate increase in volumes.
Selling, general and administrative expenses for collection/recycling,
disposal and transfer activities in the third quarter ended September 30, 1996
were $241,000 ($139,000 for United), $99,000, and $2,000, respectively, as
compared to $71,000, $73,000, and $1,000, for the third quarter of 1995.
Sweeping administration expenses for the third quarter of 1996 were $99,000 with
no comparable expenses in 1995. Corporate overhead for the most recent three
months was $223,000 as compared to $242,000 in the third quarter of 1995. The
decrease in corporate overhead resulted primarily from the classification of
certain professional fees of $33,000 as costs of acquisitions.
Net income for the quarter ended September 30, 1996 was $463,000. Net
income for the related quarter in 1995 was $476,000. During the third quarter of
1995 the Company reflected a benefit derived from electing to adopt Section 468
of the Internal Revenue Code (which allows for current deductibility of closure
costs subject to certain limitations). Last year's tax provision was adjusted in
the third quarter to reflect this election. There was no corresponding benefit
for the third quarter of 1996. Year to date net income for 1996 has increased
$405,000, over 1995 year to date amounts, due to increased operating levels, the
effects of growth through new business and acquisitions and decreased cell
related amortization costs.
8
<PAGE> 10
SELECTED FINANCIAL DATA OF THE REGISTRANT'S OPERATIONS
The table below sets forth certain financial data of the Company's
collection/recycling, transfer and disposal operations in Georgia and Florida.
These operating results do not include the corporate overhead expenses of the
parent, which are associated with the operation of the Company as a public
entity and the pursuit of the Company's business strategy of acquiring
additional solid waste management and related sanitation and infrastructure
maintenance businesses. The Company believes that the operating information set
forth below is an accurate representation of the operating results of such
collection/recycling, transfer and disposal operations on a stand-alone basis.
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
Revenues: Sept 30, 1996 Sept 30, 1995
------------- -------------
<S> <C> <C>
Disposal $ 1,207,340 $ 1,312,976
Collection/Recycling 1,829,490 658,128
Transfer 217,300 205,613
Sweeping 521,969 --
------------ ------------
Total 3,776,099 2,176,717
Operating Expenses (1) 1,570,439 559,624
------------ ------------
Gross Margin before non-cash items 2,205,660 1,617,093
Selling, General and Administrative (2) 442,099 136,840
------------ ------------
Operating Cash Flow from disposal,
collection, transfer and sweeping companies (3) $ 1,763,561 $ 1,480,253
============ ============
</TABLE>
1. Excludes depreciation and non-cash closure costs of $711,194 and $747,968
for the period ending September 30, 1996 and 1995, respectively.
2. Excludes amortization expense of $57,631. No corporate overhead for the
periods has been allocated. Actual corporate overhead was $223,715 and
$241,866 for the period ending September 30, 1996 and 1995, respectively.
3. Capital expenditures were $1,218,158 and $194,059 for the periods ending
September 30, 1996 and 1995, respectively which resulted in free cash flow
of $545,403 and $1,286,194 in the related quarters.
Liquidity and Capital Resources
The Company is in a service industry and has neither significant
inventory nor seasonal variations in receivables. At September 30, 1996, the
Company had positive working capital of $1,865,824 as compared with $3,958,852
at December 31, 1995. The decrease in working capital resulted primarily from
amounts expended for acquisitions and capital expenditures and was partially
offset by increased revenues and improved operating efficiencies at the
Company's operating entities in Georgia.
The Company's operating performance is expected to be sufficient to
support corporate overhead and other expenses during 1996. Management believes
that current working capital and internally generated funds will be sufficient
to meet the Company's working capital requirements during 1996.
Ongoing Capital Requirements and Expansion
Historically, the Company has relied primarily on the private placement
of debt and equity securities in order to provide it with the cash required for
capital expenditures, acquisitions, and to partially fund operating activities.
Set forth below is a discussion of the Company's primary ongoing cash
requirements and the means by which it expects to meet these requirements in the
future.
9
<PAGE> 11
Operating Activities
The Company anticipates that the cash generated from operating
activities will be sufficient to provide the cash required for these activities.
Capital Expenditures
The Company expects to make capital expenditures on an ongoing basis
for improvements to, and expansion of, its landfill and for equipment purchases.
The Company estimates that the capital expenditures required for its existing
operations will amount to $2,900,000 in 1996. The Company expects that it will
fund such estimated capital expenditures from existing cash, cash generated from
operations and equipment lease financing.
Acquisitions
The Company's business strategy includes the acquisition, on
financially attractive terms, of additional solid waste management companies as
well as related sanitation and infrastructure maintenance businesses. Such
acquisitions may be accomplished through the issuance of the Company's common
stock, cash on hand, or may require cash in excess of the Company's current cash
available. Although GeoWaste's improved operating results and financial
performance are expected to improve its access to any financing which may be
necessary to acquire such businesses, there can be no assurance that such
additional financing can be obtained on terms acceptable to the Company.
The development and permitting of new disposal facilities requires
significant capital expenditures over an extended period. Any growth of the
Company through the permitting of new disposal facilities or the lateral
expansion of its existing disposal facility would require substantial capital
expenditures. The Company intends to pursue the further expansion of the Pecan
Row Landfill through the permitting of a new facility near or adjacent to the
existing site.
On March 21, 1996 the Company acquired North Florida Sweeping Inc.,
("NFS"), a street sweeping and solid waste roll off collection company located
in Jacksonville, Florida. The consideration given of $1,349,000 consisted of
$280,000 worth of stock (233,946 shares valued at 1.197 per share), cash of
$355,000, assumption of debt in the amount of $614,000 and 75,000 warrants
exercisable at $1.25 per share. The Company also extended the exercise date for
2,000,000 warrants previously issued to Allen & Company Incorporated from August
2, 1996 to February 2, 1998 as consideration for investment advisory services
provided to the Company in connection with the purchase of NFS. The Company
assigned a value of $100,000 to this modification in accordance with FASB 123
(accounting for stock based compensation).
On August 12, 1996, the Company acquired all of the outstanding capital
stock of Spectrum Group, Inc. (d/b/a United Sanitation "United"), a collection,
recycling and transfer company located in Ocala, Florida, for cash of
approximately $1,000,000 and 2,000,000 shares of common stock valued at $3.125
per share. The acquisition was accounted for using the purchase method.
Accordingly, the purchase price was allocated to assets acquired based on their
estimated fair values. This allocation has resulted in cost in excess of net
assets acquired of approximately $7,500,000, which is being amortized over 40
years on a straight line basis. United's results of operations have been
included in the consolidated results of operations since the date of
acquisition.
10
<PAGE> 12
On August 30, 1996 the Company, through its wholly-owned subsidiary,
Spectrum Group, Inc., acquired certain solid waste collection assets of Standard
Disposal Services of Florida, Inc. The consideration was comprised of $700,000
in cash, assumption of $580,000 of debt and the issuance of 48,571 shares of
common stock, the issuance of said shares being contingent upon, and subject to,
reduction if certain revenue projections are not met through November 30, 1996.
This acquisition was also accounted for by the purchase method of accounting.
The following summarized, unaudited pro forma results of operations for the nine
months ended September 30, 1996 and 1995, assume the acquisitions above occurred
as of the beginning of the respective periods:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Net revenues $ 12,578,000 $ 9,913,500
Net income 1,507,500 974,300
Net income per common share $ 0.07 $ 0.05
</TABLE>
11
<PAGE> 13
PART II: OTHER INFORMATION
Item 1. Legal Proceedings:
Not applicable.
Item 2. Changes in Securities:
Not applicable.
Item 3. Defaults upon Senior Securities:
Not applicable.
Item 4. Submission of matters to a Vote of Security Holders:
Not applicable.
Item 5. Other Information:
On July 29, 1996 and August 1, 1996, Frederick J. Iseman and Kevin R. Kohn,
respectively, resigned their positions as members of the Board of Directors of
the Company. In connection with the acquisition of Spectrum Group, Inc. (See
"Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations: Acquisitions") Michael D. Paglia has been elected to the Board of
Directors replacing Mr. Kohn. The Company intends to fill the remaining vacant
seat on the Board of Directors at some time in the future.
Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits:
Computation of Net Earnings and Net Loss Per Share:
Three month period ended September 30, 1996 - Exhibit 11.1
Nine month period ended September 30, 1996 - Exhibit 11.2
Financial Data Schedule (for SEC use only) - Exhibit 27
(b) Reports on Form 8-K:
Item 5.
Other Events - August 27,1996
Acquisition of Spectrum Group, Inc.
Filed the financial statements of Spectrum
Groups, Inc. and Proforma Financial Statements
12
<PAGE> 14
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 thereunto duly authorized.
GEOWASTE INCORPORATED
--------------------------------
(Registrant)
/s/ Raymond F. Chase
-------------------------------
Raymond F. Chase
Vice President and Chief Financial Officer
November 14, 1996
13
<PAGE> 15
Exhibit Index
<TABLE>
<CAPTION>
Sequentially
Numbered
Exhibit Pages
- ------- -----
<S> <C>
11.1 Computation of Net Earnings Per Share
for the three month period ended September 30, 1996............. 15
11.2 Computation of Net Earnings Per Share
for the nine month period ended September 30, 1996.............. 16
27 Financial Data Schedule (for SEC use only)......................
</TABLE>
14
<PAGE> 1
EXHIBIT 11.1
GEOWASTE INCORPORATED AND SUBSIDIARIES
COMPUTATION OF NET EARNINGS PER SHARE
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
Fully
Primary Diluted
------- -------
<S> <C> <C>
Weighted Average Common Shares
outstanding .............................................. 19,053,958 19,053,958
Convertible debt ......................................... 2,774,475
Stock options and warrants outstanding ................... 2,482,738 2,482,738
------------ ------------
Weighted average shares of common shares
outstanding .............................................. 21,536,696 24,311,171
============ ============
Net income ............................................... $ 463,132 $ 545,671
============ ============
Earnings per share ....................................... $ .02 $ .02
============ ============
</TABLE>
Note: Primary earnings per common share is used due to the anti dilutive effect
of the convertible debt.
<PAGE> 1
EXHIBIT 11.2
GEOWASTE INCORPORATED AND SUBSIDIARIES
COMPUTATION OF NET EARNINGS PER SHARE
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
Fully
Primary Diluted
------- -------
<S> <C> <C>
Weighted Average Common Shares
outstanding .............................................. 19,053,958 19,053,958
Convertible debt ......................................... 2,774,475
Stock options and warrants outstanding ................... 2,108,370 2,253,057
------------ ------------
Weighted average shares of common shares
outstanding .............................................. 21,162,328 24,081,490
============ ============
Net income ............................................... $ 1,463,457 $ 1,711,074
============ ============
Earnings per share ....................................... $ .07 $ .07
============ ============
</TABLE>
Note: Primary earnings per common share is used due to the anti dilutive
effect of the convertible debt.
16
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 2,349,542
<SECURITIES> 0
<RECEIVABLES> 2,526,387
<ALLOWANCES> 72,667
<INVENTORY> 0
<CURRENT-ASSETS> 5,404,703
<PP&E> 21,301,693
<DEPRECIATION> 7,880,545
<TOTAL-ASSETS> 28,922,944
<CURRENT-LIABILITIES> 3,538,879
<BONDS> 0
0
0
<COMMON> 2,101,196
<OTHER-SE> 13,373,883
<TOTAL-LIABILITY-AND-EQUITY> 28,922,944
<SALES> 9,014,790
<TOTAL-REVENUES> 9,014,790
<CGS> 4,959,409
<TOTAL-COSTS> 4,959,409
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 307,445
<INCOME-PRETAX> 2,285,388
<INCOME-TAX> 821,931
<INCOME-CONTINUING> 1,463,457
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,463,457
<EPS-PRIMARY> .07
<EPS-DILUTED> .07
</TABLE>
