<PAGE>
FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
X Quarterly report pursuant to Section 13 or 15 (d) of the Securities
- --- Exchange Act of 1934
For the quarterly period ended July 31, 1997.
--------------
Transition report pursuant to Section 13 or 15 (d) of the Securities
- --- Exchange Act of 1934
For the transition period from _______ to _______
Commission File Number 0-14443
WASTE TECHNOLOGY CORP.
- -------------------------------------------------------------------------------
(Exact Name of Small Business Issuer as Specified in its Charter)
Delaware 13-2842053
- -------------------------------------------------------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization)
Identification No.)
5400 Rio Grande Avenue
Jacksonville, Florida 32254
- -------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(904) 355-5558
- -------------------------------------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether 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, and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
----- -----
At August 29, 1997, Registrant had outstanding 4,863,102 shares of its
Common Stock.
Transitional small business disclosure format check one:
Yes No X
----- -----
1
<PAGE>
WASTE TECHNOLOGY CORP.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
o Balance Sheets as of July 31, 1997 and October 31, 1996.........................................3
o Statements of Income for the three months and nine months.......................................5
ended July 31, 1997 and 1996
o Statements of Changes in Stockholders' Equity...................................................7
for the period from October 31, 1995 to July 31, 1997
o Statements of Cash Flows for the three months and nine months...................................8
ended July 31, 1997 and 1996
o Notes to Financial Statements..................................................................10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS..................................................13
OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
PART II. OTHER INFORMATION
o Signatures.....................................................................................16
</TABLE>
2
<PAGE>
WASTE TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
07/31/97 10/31/96
---------- ----------
Unaudited
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 460,130 $ 140,000
Accounts receivable, net of allowance
for doubtful accounts of $91,000 1,254,143 1,410,956
Inventories 3,200,510 3,162,208
Prepaid expense and other current assets 7,370 43,208
Deferred income tax asset -- --
---------- ----------
Total current assets 4,922,153 4,756,372
Property, plant and equipment at cost 3,673,939 3,633,276
Less: accumulated depreciation 1,295,008 1,104,633
---------- ----------
Net property, plant & equipment 2,378,931 2,528,643
Other assets:
Loan to joint venture, including
accrued interest -- --
Intangible assets, net 62,452 67,152
Other assets 15,864 18,049
---------- ----------
Total other assets 78,316 85,201
---------- ----------
TOTAL ASSETS $7,379,400 $7,370,216
</TABLE>
See accompanying notes
3
<PAGE>
WASTE TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
07/31/97 10/31/96
----------- -----------
Unaudited
<S> <C> <C>
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Revolving promissory note $ 971,652 $ 531,652
Current maturities of long-term debt 583,562 663,842
Capital Lease Obligation 15,199 14,281
Accounts payable 1,353,782 1,031,224
Accrued liabilities 427,524 498,284
Customer deposits 684,740 683,324
----------- -----------
Total current liabilities 4,036,459 3,422,607
Accrued legal fees -- 315,696
Long-term debt 185,551 210,324
Capital Lease Obligation, less current maturities 689,931 701,568
Minority interest in equity of subsidiary 509,369 509,369
----------- -----------
Total liabilities 5,421,310 5,159,564
Stockholders' equity
Common stock, par value $.01
25,000,000 shares authorized;
2,763,314 shares issued 27,634 27,634
Preferred stock, par value $.0001,
10,000 shares authorized, none issued -- --
Additional paid-in capital 6,066,356 6,066,356
Accumulated deficit (3,151,311) (2,588,935)
----------- -----------
2,942,679 3,505,055
Less: Treasury stock, 331,763 shares at cost 419,306 419,306
Less: Note receivable from shareholders 565,283 875,097
----------- -----------
Total stockholders' equity 1,958,090 2,210,652
----------- -----------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 7,379,400 $ 7,370,216
</TABLE>
See accompanying notes
4
<PAGE>
WASTE TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
UNAUDITED
<TABLE>
<CAPTION>
Three months ended: 07/31/97 07/31/96
----------- -----------
<S> <C> <C>
Net Sales $ 2,401,082 $ 3,821,563
Cost of Sales 1,898,754 2,969,457
----------- -----------
Gross Profit 502,328 852,106
Operating Expenses:
Selling 303,445 423,044
General and Administrative 427,125 474,626
----------- -----------
Total operating expenses 730,570 897,670
Operating Income (228,242) (45,564)
Other Income (Expense):
Interest & Dividends 16,039 12,107
Interest Expense (59,473) (47,099)
Other Income 1,940 829
Other Expense -- (9,159)
Net Gain on Disposal of Fixed Assets -- 9,159
----------- -----------
Total Other Income (Expense) (41,494) (34,163)
Less minority interest in income of
consolidated subsidiary 4,334 --
----------- -----------
Income before income taxes (274,070) (79,727)
Income Tax Provision (benefit)
Current -- 12,900
Deferred -- --
----------- -----------
NET INCOME (LOSS) ($ 274,070) ($ 92,627)
Earnings per share (0.06) (0.02)
Average number of shares and equivalent 4,863,102 4,863,102
</TABLE>
See accompanying notes
5
<PAGE>
WASTE TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
UNAUDITED
<TABLE>
<CAPTION>
Nine months ended: 07/31/97 07/31/96
------------ ------------
<S> <C> <C>
Net Sales $ 8,049,203 $ 10,950,940
Cost of Sales 6,410,542 8,212,659
------------ ------------
Gross Profit 1,638,661 2,738,281
Operating Expenses:
Selling 805,248 1,197,190
General and Administrative 1,277,427 1,484,168
------------ ------------
Total operating expenses 2,082,675 2,681,358
Operating Income (444,014) 56,923
Other Income (Expense):
Interest income 45,317 39,359
Interest Expense (154,918) (98,546)
Other Income 6,239 7,529
Other Expense -- (17,637)
Net Gain on Disposal of Fixed Assets -- 23,785
------------ ------------
Total Other Income (Expense) (103,362) (45,240)
Less minority interest in income of
consolidated subsidiary -- 4,000
------------ ------------
Income before income taxes (547,376) 7,683
Income tax provision (benefit)
Current 15,000 38,700
Deferred -- (80,000)
------------ ------------
NET INCOME (LOSS) ($ 562,376) $ 48,983
Earnings per share (0.12) 0.01
Average number of shares and equivalent 4,863,102 5,390,020
</TABLE>
6
<PAGE>
WASTE TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
October 31, 1995 to July 31, 1997
<TABLE>
<CAPTION>
Common Stock
Par Value $.01 Authorized
25,000,000
NUMBER ADDITIONAL
OF SHARES PAR PAID-IN ACCUMULATED
ISSUED VALUE CAPITAL DEFICIT
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Balance at October 31, 1995 2,763,314 $ 27,634 $ 6,069,995 ($2,027,894)
Adjustment of Note Receivable from
shareholder as a reduction of
stockholder's equity -- -- -- --
Dissolution of non-operating subsidiaries -- -- (3,639) 4,639
Net income (loss) -- -- -- (565,680)
----------- ----------- ----------- -----------
Balance at October 31, 1996 2,763,314 $ 27,634 $ 6,066,356 ($2,588,935)
2 for 1 Stock Split June 16, 1997 2,763,314
Adjustment of Note Receivable from
shareholder as a reduction of
stockholder's equity -- -- -- --
Net income (loss) -- -- -- (562,376)
----------- ----------- ----------- -----------
Balance at July 31, 1997 5,526,628 $ 27,634 $ 6,066,356 ($3,151,311)
=========== =========== =========== ===========
<CAPTION>
Treasury Stock
NUMBER TOTAL
OF STOCKHOLDERS'
SHARES COST OTHER EQUITY
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Balance at October 31, 1995 331,763 ($ 419,306) ($ 663,011) $ 2,987,418
Adjustment of Note Receivable from
shareholder as a reduction of
stockholder's equity -- -- (212,086) (212,086)
Dissolution of non-operating subsidiaries -- -- -- 1,000
Net income (loss) -- -- -- (565,680)
----------- ----------- ----------- -----------
Balance at October 31, 1996 331,763 ($ 419,306) ($ 875,097) $ 2,210,652
331,763
2 for 1 Stock Split June 16, 1997
Adjustment of Note Receivable from
shareholder as a reduction of
stockholder's equity -- -- 309,814 309,814
Net income (loss) -- -- -- (562,376)
----------- ----------- ----------- -----------
Balance at July 31, 1997 663,526 ($ 419,306) ($ 565,283) $ 1,958,090
=========== =========== =========== ===========
</TABLE>
7
<PAGE>
WASTE TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
<TABLE>
<CAPTION>
For Three Months Ended
07/31/97 07/31/96
--------- ---------
<S> <C> <C>
Cash flow from operating activities:
Net (loss)income ($274,070) ($ 92,627)
Adjustments to reconcile net income to net cash (used in) provided
by operating activities:
Gain from sale of equipment -- --
Dissolution of non-operating subsidiaries -- --
Depreciation and amortization 65,043 58,998
Provision for doubtful accounts -- --
Insurance premiums paid on behalf of Company president -- --
Minority interest in income of subsidiary 4,334 --
Deferred income taxes -- --
Increase (decrease) from changes in:
Accounts receivable 125,169 (605,206)
Inventories (260,110) 290,525
Prepaid expenses and other current assets (1,141) 26,139
Other assets 729 (11,441)
Accounts payable 325,427 (69,205)
Accrued liabilities and legal fees (55,182) 20,231
Customer deposits 305,890 116,041
Reserve for legal settlement -- --
--------- ---------
Total adjustments 510,159 (173,918)
--------- ---------
Net cash (used in) provided by operating activities 236,089 (266,545)
Cash flows from investing activities:
Increase in notes receivable from shareholders (13,200) (10,088)
Purchase of property and equipment (17,198) (106,077)
--------- ---------
Net cash used in investing activities (30,398) (116,165)
Cash flows from financing activities:
Increase (decrease) in Debt 161,253 491,614
Issuance of common stock -- --
--------- ---------
Cash flows used in financing activities 161,253 491,614
Net (decrease) increase in cash 366,944 108,904
Cash at beginning of period 93,186 6,633
Cash at end of period 460,130 115,537
Supplemental schedule of disclosure of cash flow information
Cash paid during period for:
Interest 53,221 49,671
Income taxes -- 13,500
</TABLE>
8
<PAGE>
WASTE TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
<TABLE>
<CAPTION>
For Nine Months Ended
07/31/97 07/31/96
----------- -----------
<S> <C> <C>
Cash flow from operating activities:
Net (loss)income ($ 562,376) $ 48,983
Adjustments to reconcile net income to net cash (used in) provided
by operating activities:
Gain from sale of equipment -- --
Dissolution of non-operating subsidiaries -- 1,000
Depreciation and amortization 195,075 145,896
Provision for doubtful accounts -- --
Insurance premiums paid on behalf of Company president -- --
Minority interest in income of subsidiary -- 4,000
Deferred income taxes -- (80,000)
Increase (decrease) from changes in:
Accounts receivable 156,813 (1,102,649)
Inventories (38,302) (616,868)
Prepaid expenses and other current assets 35,838 12,678
Other assets 2,185 (19,635)
Accounts payable 322,558 420,832
Accrued liabilities and legal fees (17,652) (22,881)
Customer deposits 1,416 (399,238)
Reserve for legal settlement -- --
----------- -----------
Total adjustments 657,931 (1,656,865)
----------- -----------
Net cash (used in) provided by operating activities 95,555 (1,607,882)
Cash flows from investing activities:
Increase in notes receivable from shareholders (58,990) (9,266)
Purchase of property and equipment (40,663) (1,091,393)
----------- -----------
Net cash used in investing activities (99,653) (1,100,659)
Cash flows from financing activities:
Increase (decrease) in Debt 324,228 1,709,736
Issuance of common stock -- --
----------- -----------
Cash flows used in financing activities 324,228 1,709,736
Net (decrease) increase in cash 320,130 (998,805)
Cash at beginning of period 140,000 1,114,342
Cash at end of period 460,130 115,537
Supplemental schedule of disclosure of cash flow information
Cash paid during period for:
Interest 148,666 101,118
Income taxes -- 39,500
</TABLE>
9
<PAGE>
Waste Technology Corp. and Subsidiaries
Notes to Consolidated Financial Statements
1. Basis of Presentation:
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-QSB and
Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the
information footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation have been included. Operating results for the
three-month period and nine-month period ended July 31, 1997 are not
necessarily indicative of the results that may be expected for the year
ending October 31, 1997. For further information, refer to the Company's
Annual Report on form 10KSB/A for the year ended October 31, 1996 and the
Management Discussion included in this form 10QSB.
2. Accounting Policies:
Stock-Based Compensation - In 1997, the Company will adopt SFAS No. 123,
"Accounting for Stock-Based Compensation." This standard establishes a
fair value method for accounting for stock-based compensation plans either
through recognition or disclosure. The Company intends to adopt this
standard by disclosing the pro forma net income and earnings per share
amounts assuming the fair value method was adopted on November 1, 1996.
The adoption of this standard will not impact its results of operations,
financial position or cash flows.
3. Earnings (Loss) Per Common and Common Equivalent Share:
Earnings (loss) per common and common equivalent share are calculated
using the weighted average number of common share outstanding during each
year and on the net additional number of shares which would be issuable
upon the exercise of stock options, assuming that the Company used the
proceeds received to purchase additional shares at market value in the
case of income. Options are not considered in loss periods as they would
be antidilutive.
4. Long-Term Debt:
Long-term debt consists of the following:
<TABLE>
<CAPTION>
July 31, 1997 1996
<S> <C> <C>
Term note payable to bank at prime rate plus, due
in equal monthly installments of $9,028, plus
interest through August 2002. $550,694 $275,833
</TABLE>
10
<PAGE>
Notes to Consolidated Financial Statements, Continued
4. Long-Term Debt, Continued:
<TABLE>
<CAPTION>
July 31, 1997 1996
<S> <C> <C>
Revolving promissory note payable to bank in the
amount of $1,000,000. Interest at prime payable
monthly. All amounts borrowed are due in full
November 7, 1997 971,652 990,000
Term note payable to Appling County, Georgia at
4.0% due in equal monthly installments of $3,417,
including interest through July 2003 218,419 250,000
---------- ----------
1,740,765 1,515,833
Amounts classified as current 1,555,214 1,211,581
---------- ----------
$ 185,551 $ 304,252
========== ==========
</TABLE>
The bank's prime rate at July 31, 1997 was 8.25%. The carrying value of
the Company's debt approximates fair value.
The term note payable to bank and the revolving promissory note contain
certain covenants, whereby the Company must maintain, among other things,
specified levels of minimum net worth and working capital, and maintain a
specified ratio of maximum debt to worth, and current ratio. The term note
payable contains cross default provisions as related to the revolving
promissory note and other debt agreements.
The Company did not meet all covenants related to minimum net worth and
maximum debt to worth. As of the date of issuance of these financial
statements, the lender has waived these covenant violations through
November 7, 1997. The revolving debt has been extended to November 7,
1997. Management plans to negotiate an extension of the revolving debt and
covenant requirements prior to the expiration date of the debt or obtain
alternative financing. However, no assurance can be given that the Company
will be successful. If the Company were unable to negotiate an extension
or obtain alternative financing and the lender called the debt, management
could be required to sell certain assets of the Company. Management
believes its available collateral to be sufficient so that acceptable
financing can be obtained.
The Company has pledged substantially all of its assets as collateral
under the term loan and revolving loan agreement.
11
<PAGE>
Notes to Consolidated Financial Statements, Continued
5. Capital Lease:
During 1996, the International Press and Shear (IPS) subsidiary entered
into a lease agreement for its manufacturing facility, which has been
accounted for as a capital lease, as the ownership of the facility is
transferred to IPS when the lease obligation is satisfied. Lease payments
of $6,135 per month are based on a note with an interest rate of 8.25%.
Principal balance and accrued interest are due on the 15th anniversary of
the note.
6. Other:
On May 21, 1997 the Board of Directors of the Company approved a
two-for-one split of the Waste Technology common stock effective June 16,
1997. The Company has been authorized by the Company's corporate counsel,
Robson & Miller, LLP, to set off legal fees owed by the Company against
the note due from Morton S. Robson, the senior partner of Robson &
Miller, LLP.
12
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations: Three Month Comparisons
For the third quarter of fiscal 1997 the Company had net sales of $2,401,082 as
compared to $3,821,563 for the third quarter of 1996, a decrease of 37.2%. The
decrease in sales was caused by lower shipments at all operating units of the
Company and was directly related to weakness in the corrugated board and paper
markets for recycled materials. Corrugated and paper market prices have
recently shown substantial increases.
Consolidated net income was a loss in the third quarter of $274,070 versus a
loss of $92,627 in the same quarter in the prior year. Earnings per share was
$(.06) and $(.02), adjusted for the 2 for 1 stock split, for the third quarter
1997 and 1996 respectively. The loss in the third quarter was the result of the
lower shipments mentioned above.
Due to the lower shipments experienced in fiscal 1997, the Company has taken
actions which have reduced controllable selling and administrative costs. For
the quarter ending July 31, 1997, selling expense and administration costs are
$119,599, 28.3% and $47,501, 10.0% below the same quarter in the prior year
respectively.
Results of Operations: Nine Month Comparisons
Net sales decreased from $10,950,940 in the first nine months of 1996 to
$8,049,203 in the first nine months of 1997, a decrease of 26.5%. All operating
divisions of the Company had lower shipments in the first nine months of 1997
versus the same period in 1996.
Net income for the first nine months of 1997 was a loss of $562,376 versus a
profit of $48,983 in the corresponding period in 1996. The loss is primarily
the result of the lower shipments in 1997 versus 1996. For the year to date
results, the Company's Baxley, Georgia subsidiary, International Press and
Shear Corporation (IPS), was the cause of the overall loss for the period. The
losses incurred by the new subsidiary were the result of costs related to a
start-up operation and the continuing weakness in the corrugated board and
paper prices in the recycled products markets. Also, the first half results for
1996 included income of $80,000 due to the recording of a deferred tax asset
which was reversed in the fourth quarter of 1996. The deferred tax asset was
reversed due to the results of operations in 1996 and current short-term
expectations.
The IPS operations have been pared down to a level which is commensurate with
the current corrugated and paper recycling market conditions. This subsidiary
is now running efficiently and it is the objective of the Company to get IPS to
a profitable or break-even level in the near future. The Company has
accelerated its product development time in order to include new products which
are not affected by significant price fluctuations. The Company has also
experienced an increase in export sales.
13
<PAGE>
Results of Operations: Nine Month Comparisons, Continued:
The backlog as of August 31, 1997 was $3,831,000 as compared with $3,144,000 as
of August 31, 1996, an increase of 21.9%. Therefore, with this backlog, the
fourth quarter of fiscal 1997 and first half of fiscal 1998 are anticipated to
show improved results over the corresponding prior periods.
Financial Condition:
Net working capital decreased from $1,333,765 at October 31, 1996 to $885,694
at July 31, 1997. This decrease in working capital is considered to be
temporary and should be reversed in the fourth quarter of 1997 based on
Management's expectations from the previously mentioned backlog increase.
The term note with SouthTrust Bank which was renewed in August 1996 and is due
in equal monthly installments of $9,018, plus interest at the prime rate. The
entire balance of this term note was classified as a current liability because
the term loan has callable provisions relating to the revolving note described
below.
The revolving note payable to SouthTrust in the amount of $1,000,000 was
renewed in August 1997 at the prime rate. Interest is payable monthly and all
amounts borrowed are due in full on November 7, 1997. The balance due at April
30, 1997 was $771,652 and increased to $971,652 at July 31, 1997. At July 31,
1997, the Company did not meet certain covenants of the loan agreement related
to minimum net worth and maximum debt to worth. The lender has waived these
covenant requirements through November 7, 1997. While no assurance can be
given, management believes its available collateral to be sufficient to allow
the Company to renegotiate an extension of the revolving debt and its covenant
requirements prior to its expiration date or obtain alternative financing. It
is anticipated that the note will be renewed in November 1997.
For the nine months ended July 31, 1997 the Company had $95,555 cash flow from
operations while in the same period in fiscal 1996 the Company had negative
operating cash flow of $1,607,882. The negative cash flow in fiscal 1996 was
due to the start-up operations, IPS, cash requirements for inventory and
accounts receivable and which have not continued at the same rate in fiscal
1997.
14
<PAGE>
Financial Condition, Continued:
Our auditors, Coopers & Lybrand, have stated in the "Report of Independent
Accountants" for October 31, 1996 to the shareholders of Waste Technology
Corporation that there is "substantial doubt" about the Company's ability to
continue as a going concern. While the Company understands why the accountants
report had to include the explanatory paragraph, (the absence of a loan default
waiver), and though the Company's Management and Board of Directors has
substantial concern, it believes that it has several viable options to continue
as a going concern for the following reasons:
1. The Company has the ability to take actions to reduce the operating and
carrying costs of its IPS subsidiary to a level which will not further
jeopardize the liquidity of the company.
2. The Company did not meet covenants related to minimum net worth and
maximum debt to worth. As of the date of issuance of this report, the
lender has waived these covenant requirements through November 7, 1997.
Management plans to negotiate an extension of the revolving debt and
covenant requirements prior to the expiration date of the debt or obtain
alternative financing. However, no assurance can be given that the Company
will be successful. If the Company were unable to negotiate an extension
or obtain alternative financing and the lender called the debt, Management
could be required to sell certain assets of the Company. Management
believes its available collateral to be sufficient so as acceptable
financing can be obtained.
The Company has no commitments for any material capital expenditures. Other
than as set forth above, there are no unusual or infrequent events or
transactions or significant economy changes which materially effect the amount
of reported income from continuing operations.
Inflation:
The costs of the Company and its subsidiaries are subject to the general
inflationary trends existing in the general economy. The Company believes that
expected pricing by its subsidiaries for balers will be able to include
sufficient increases to offset any increase in costs due to inflation.
15
<PAGE>
PART II-OTHER INFORMATION
None.
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
undersigned hereto duly authorized.
Dated: September 12, 1997 WASTE TECHNOLOGY CORPORATION
BY: /s/Ted C. Flood
-----------------------------
Ted C. Flood, President
(Chief Executive Officer)
BY: /s/William E. Nielsen
-----------------------------
William E. Nielsen
Chief Financial Officer
(Principal Financial and
Accounting Officer)
16
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from the
financial statements and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> JUL-31-1997
<CASH> 460,130
<SECURITIES> 0
<RECEIVABLES> 1,345,143
<ALLOWANCES> 91,000
<INVENTORY> 3,200,510
<CURRENT-ASSETS> 4,922,153
<PP&E> 3,673,939
<DEPRECIATION> 1,295,008
<TOTAL-ASSETS> 7,379,400
<CURRENT-LIABILITIES> 4,036,459
<BONDS> 0
0
0
<COMMON> 27,634
<OTHER-SE> 1,930,456
<TOTAL-LIABILITY-AND-EQUITY> 7,379,400
<SALES> 2,401,082
<TOTAL-REVENUES> 2,401,082
<CGS> 1,898,754
<TOTAL-COSTS> 2,629,324
<OTHER-EXPENSES> (13,645)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 59,473
<INCOME-PRETAX> (274,070)
<INCOME-TAX> 0
<INCOME-CONTINUING> (274,070)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (274,070)
<EPS-PRIMARY> (.06)
<EPS-DILUTED> (.06)
</TABLE>
