U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 2000
[ ] 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 0-21946
HI-RISE RECYCLING SYSTEMS, INC.
-------------------------------
(Exact Name of Registrant as Specified in Its Charter)
FLORIDA 65-0222933
------- -----------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
8505 NW 74TH STREET, MIAMI, FLORIDA 33166
-----------------------------------------
(Address of Principal Executive Offices)
(305) 597-0243
--------------
(Registrant's Telephone Number, Including Area Code)
Indicate by check 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 [ ]
The number of shares outstanding of the Issuer's Common Stock, $.01 Par Value,
as of May 12, 2000 was 15,094,493.
Transitional small business disclosure format:
Yes [X] No [ ]
<PAGE>
INDEX
PART I FINANCIAL INFORMATION
PAGE
Item 1. Consolidated Financial Statements (unaudited) ................... 3
Consolidated Balance Sheets as of March 31,
2000 and December 31, 1999 .................................. 3
Consolidated Statements of Operations for the three months
ended March 31, 2000 and 1999 ............................... 4
Consolidated Statement of Changes in Shareholders' Equity ....... 5
for the three months ended March 31, 2000
Consolidated Statements of Cash Flows for the three
months ended March 31, 2000 and 1999 ........................ 6
Notes to Consolidated Financial Statements ...................... 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations ......................... 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings ............................................... 13
Item 2. Changes in Securities ........................................... 13
Item 3. Defaults Upon Senior Securities ................................. 13
Item 4. Submission of Matters to a Vote of Security Holders ............. 13
Item 5. Other Information ............................................... 13
Item 6. Exhibits and Reports on Form 8-K ................................ 13
SIGNATURES ...................................................... 14
2
<PAGE>
HI-RISE RECYCLING SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2000 AND DECEMBER 31, 1999
(UNAUDITED)
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
-------- --------
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 379 $ 194
Investments 179 170
Accounts receivable, net of allowance for doubtful accounts
of $358 and $293 in 2000 and 1999, respectively 16,846 14,620
Inventories 11,872 10,519
Deferred tax asset 700 189
Other assets, net 1,902 1,955
-------- --------
Total current assets 31,878 27,647
Property and equipment, net 5,842 5,779
Net investment in sales type leases 10,402 10,108
Prepaid financing costs 2,349 2,440
Deferred acquisition costs 76 280
Deferred tax asset 326 326
Other assets 465 451
Goodwill 47,741 47,683
-------- --------
Total assets $ 99,079 $ 94,714
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 5,833 $ 5,671
Cash overdrafts 1,215 739
Income taxes payable -- 461
Current portion of long-term debt 21,515 17,975
-------- --------
Total current liabilities 28,563 24,846
Long-term debt 32,705 33,401
-------- --------
Total liabilities 61,268 58,247
Commitments and contingencies
Shareholders' equity:
Preferred stock, $.01 par value per share; 1,000,000 shares authorized;
200 shares issued and outstanding, liquidation preference of $2,000 -- --
Common stock, $.01 par value per share; 50,000,000 shares authorized;
15,094,493 and 13,757,472 shares issued and outstanding at
March 31, 2000 and December 31, 1999, respectively 150 137
Additional paid-in capital 39,465 37,482
Accumulated deficit (1,804) (1,152)
-------- --------
Total shareholders' equity 37,811 36,467
-------- --------
Total liabilities and shareholders' equity $ 99,079 $ 94,714
======== ========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
3
<PAGE>
HI-RISE RECYCLING SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(UNAUDITED)
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS
ENDED ENDED
MARCH 31, 2000 MARCH 31, 1999
------------ ------------
<S> <C> <C>
Total Revenues $ 15,845 $ 12,267
Operating Expenses
Cost of equipment sold, including direct costs of service/parts 11,454 8,368
Selling and marketing 914 595
General and administrative 3,222 2,012
------------ ------------
Total Operating Expenses 15,590 10,975
------------ ------------
Operating income 255 1,292
Other income (expense):
Interest income 205 365
Interest expense (1,447) (681)
------------ ------------
Total other expense (1,242) (316)
------------ ------------
(Loss) income before taxes (987) $ 976
Taxes (375) -
------------ ------------
Net (loss) income $ (612) $ 976
Basic (loss) income per share ($ 0.05) $ 0.08
Diluted (loss) income per share ($ 0.05) $ 0.07
============ ============
Weighted average common shares outstanding used in
basic calculation 14,439,141 11,901,152
============ ============
Weighted average common shares outstanding used
in diluted calculation 14,439,141 14,435,080
============ ============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
4
<PAGE>
HI-RISE RECYCLING SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2000
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
SHARES OF ADDITIONAL TOTAL
COMMON PREFERRED COMMON PAID-IN ACCUMULATED SHAREHOLDERS
STOCK STOCK STOCK CAPITAL DEFICIT EQUITY
---------- -------- --------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1999 13,757,472 $ -- $ 137 $ 37,482 $ (1,152) $ 36,467
Issuance of common stock (unaudited) 1,337,021 $ 13 $ 1,943 $ 1,956
Dividend requirement on preferred stock $ 40 $ (40) $ --
Net loss (unaudited) $ (612) $ (612)
Balance at March 31, 2000 15,094,493 $ -- $ 150 $ 39,465 $ (1,804) $ 37,811
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
5
<PAGE>
HI-RISE RECYCLING SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS
ENDED ENDED
MARCH 31, MARCH 31,
2000 1999
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES:
Net (loss) income $ (612) $ 976
Adjustments to reconcile net income
to net cash (used in) provided by operating activities:
Depreciation and amortization 717 321
Bad Debt Expense 65 --
Prior year costs in connection with uncompleted acquisition 280 --
Changes in assets and liabilities, net of acquisitions:
Accounts receivable (2,291) (1,771)
Inventory (1,353) (838)
Other assets 30 (116)
Net investments in sales type leases (294) (762)
Deferred taxes (511) --
Accounts payable and accrued liabilities 162 127
Deferred acquisition costs (150)
Income Tax Payable (461) 687
-------- --------
Net cash used in operating activities (4,268) (1,526)
INVESTING ACTIVITIES:
Purchase of business net of cash acquired -- (569)
Increase Deferred Acquisition Cost (76) --
Purchase of property and equipment (345) (138)
-------- --------
Net cash used in investing activities (421) (707)
-------- --------
FINANCING ACTIVITIES:
Draws from line of credit 5,094 2,250
Payment of long-term debt (696) --
Cash Over Draft 476 --
-------- --------
Net cash provided by financing activities 4,874 2,250
-------- --------
Net increase in cash and cash equivalents 185 17
Cash and cash equivalents, beginning of period 194 325
-------- --------
Cash and cash equivalents, end of period $ 379 $ 342
-------- --------
Purchase of business, net of cash acquired:
Working capital, other than cash -- $ (1,831)
Property, plant and equipment -- (1,635)
Cost in excess of net assets acquired, net -- (11,636)
Revolving line of credit -- --
Current portion of long term debt -- --
Long term debt -- 11,583
Common stock issued -- 2,950
-------- --------
Net cash used to acquire business $ -- $ (569)
======== ========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
6
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(UNAUDITED)
1. The accompanying unaudited consolidated financial statements, which are for
interim periods, do not include all disclosures provided in the annual
consolidated financial statements. These unaudited consolidated financial
statements should be read in conjunction with the consolidated financial
statements and the footnotes thereto contained in the Annual Report on Form
10-KSB for the year ended December 31, 1999 of Hi-Rise Recycling Systems, Inc.
(the "Company"), as filed with the Securities and Exchange Commission. The
December 31, 1999 balance sheet was derived from audited consolidated financial
statements, but does not include all disclosures required by generally accepted
accounting principles.
2. In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments (which are of a normal recurring
nature) necessary for a fair presentation of the financial statements. The
results of operations for the three months ended March 31, 2000 are not
necessarily indicative of the results to be expected for the full year.
3. For financial reporting purposes, the Company reports revenues from sales
type leases as equipment sales. Revenue from sales and sales type equipment
leases is generally recognized when equipment is installed.
4. Net investment in sales type leases consists of the following at March 31,
2000 (amounts in thousands):
Minimum Lease Payments 11,345
Unearned Income (1,987)
Estimated Residual Value on Leased Equipment 1,044
------
10,402
5. Inventories as of March 31, 2000 consisted of the following (amounts in
thousands):
Raw materials 5,265
Work in process 422
Finished goods 6,185
------
11,872
6. Acquisitions made by the Company have been accounted for using the purchase
method of accounting. Accordingly, the results of operations of the acquired
companies are included in the Company's consolidated results of operations from
the respective dates of acquisition.
The following information presents the unaudited pro forma condensed results of
operations for the period January 1, 1999 through March 31, 1999, as if the
Company's acquisitions of De-Vivo and Ecological Technologies, Kohlman
Engineering and American Gooseneck had occurred on January 1, 1999. The pro
forma results are presented for informational purposes only and are not
necessarily indicative of the future results of operation of the Company or the
results of operation of the Company had the acquisitions occurred on January 1,
1999.
The unaudited results of operations on a pro forma basis as if each of the
acquisitions had been made as of January 1, 1999 is as follows (amounts in
thousands, except share data):
THREE MONTHS
ENDED MARCH 31,
1999
--------
Revenues $ 16,921
Income from operations 1,562
Net (loss) income 659
Earnings per share of common stock
Basic 0.04
Diluted 0.04
7
<PAGE>
7. SEGMENTS OF THE BUSINESS:
The Company operates in the United States and Canada in two primary
industry segments: (1) Architectural Specified Services which
involves complete handling of hi-rise systems, compactors and
chutes in high-rise buildings and (2) Solid Waste Equipment
Division which involves the construction, repair and maintenance of
waste handling equipment, trucks and transfer station. The
following is a summary of selected data for these business
segments:
<TABLE>
<CAPTION>
ARCHITECTURAL SOLID WASTE EQUIPMENT CONSOLIDATED
SPECIFIED SERVICES DIVISION TOTAL
------------------ -------- -----
Three Months Ended
March 31, 2000
--------------
<S> <C> <C> <C>
Revenues $ 3,505 $ 12,340 $ 15,845
Operating Income (463) 718 255
Total assets 66,590 32,489 99,079
Three Months Ended
March 31, 1999
--------------
Revenues $ 9,319 $ 2,948 $ 12,267
Operating Income 82 1,210 1,292
Total assets 24,807 48,681 73,489
</TABLE>
8. The Company's credit facility with GECC and the other participating lenders
contains a number of covenants, including financial covenants that require the
Company to meet certain financial ratios and tests. At March 31, 2000, the
Company was not in compliance with the maximum leverage ratio, which
non-compliance has been waived by the lenders. The Company is currently
negotiating with the lenders to modify the financial covenants so that the
Company may be in compliance in future periods.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
GENERAL
Hi-Rise Recycling Systems, Inc. (the "Company") was incorporated in May 1990 and
was engaged principally in product development until January 1991, when it
installed the first Hi-Rise System, on a shared savings basis. The Company only
began to generate significant revenues in 1998, the first year in which the
Company was profitable.
The Company is primarily engaged in manufacturing, distributing, marketing and
selling solid waste handling equipment. Until February 1997, the Company was
primarily engaged in distributing, marketing and selling the Hi-Rise System, a
proprietary automated system designed to collect source-separated recyclables
and other solid waste in multi-story residential buildings. Subsequent to such
time, the Company has made a number of acquisitions of businesses in its solid
waste equipment and architectural specified services segments. In 1999, the
Company acquired DeVivo Industries, Inc. ("DeVivo"), Kohlman Engineering Corp.
("Kohlman") and American Gooseneck, Inc. ("American Gooseneck"). DeVivo and
American Gooseneck are engaged in the business of manufacturing, marketing and
selling solid waste handling equipment. Kohlman manufactures, markets, sells and
services waste compactors and trash chutes. The Company anticipates that in the
future the Hesco Sales, Inc. ("Hesco"), Bes-Pac, Inc. ("Bes-Pac"), DeVivo and
American Gooseneck product lines will be the Company's single largest source of
revenue. In addition, the Company expects that its other principal sources of
revenue will be sales of rubbish and linen chutes, trash compaction systems and
the Hi-Rise System and sales-types leases of the Hi-Rise System.
The Company's results of operation for the three months ended March 31, 1999
include the results of Hesco, Bes-Pac and Acme Chute Company ("Acme Chute"),
each of which was acquired in 1998, for the full three months and the results of
DeVivo from February 1999. The Company's results of operations for the three
months ended March 31, 2000 also include the results of DeVivo, Kohlman and
American Gooseneck for the full three months. Accordingly, the Company's results
of operations for the three months ended March 31, 1999 and 2000 are not
comparable in certain material respects.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2000 COMPARED TO THREE MONTHS ENDED MARCH 31, 1999.
Total revenue during the three months ended March 31, 2000 was $15,845,000, an
increase of $3,578,000 compared to total revenue of $12,267,000 during the prior
comparable three-month period. The primary source of the increase is the
inclusion of DeVivo and American Gooseneck in this quarter in the aggregate
amount of $4,564,000 compared to only $1,110,000 for one month of DeVivo sales
in 1999.
During the three months ended March 31, 2000, the Company had interest income of
$205,000, a decrease of $160,000 compared to $365,000 during the prior
comparable three-month period. The decrease in interest income is primarily
attributable to decreased interest realized from investments and fewer leases in
2000 as compared to 1999 due to the sale of a portion of its net investment in
sales-type leases to Western Finance in December 1999.
Total operating expenses during the three months ended March 31, 2000 were
$15,590,000 an increase of $4,615,000 compared to total operating expenses of
$10,975,000 during the prior comparable three-month period. A primary reason for
the increase was the inclusion in the three months ended March 31, 2000 of
additional cost of sales for DeVivo and American Gooseneck of $3,379,000. Cost
of equipment sold increased by $3,086,000 from $8,368,000 during the three
months ended March 31, 1999 to $11,454,000 during the three months ended March
31, 2000. As a percentage of revenue, cost of equipment sold increased to 72%
during the three months ended March 31, 2000 compared to 68% during the prior
comparable three-month period. The main reason for the increase is the increase
in raw materials costs particularly steel. In addition, the sales prices of the
Company's containers were lower, particularly those of Hesco, due to volume
discounts. Selling and marketing expenses during the three months ended March
31, 2000 were $914,000, an increase of $319,000 compared to selling and
marketing expenses of $595,000 during the prior comparable three-month period.
General and administrative expenses during the three months ended March 31, 2000
were $3,222,000 an increase of $1,210,000 compared to general and administrative
expenses of $2,012,000 during the prior comparable three-month period. General
and administrative expenses for the three months ended March 31, 2000 include
approximately $510,000 of such expenses for American Gooseneck and DeVivo. In
addition general and administrative expenses included $617,000 of expenses
related to unsuccessful acquisitions and a financing which were not consummated.
These costs included legal costs, accounting fees, travel and reimbursements to
banks and investment bankers. Interest expense increased by $766,000 to
$1,447,000 as compared to the prior comparable three-month period, as a result
of increased borrowings under the Company's lines of credit to finance the
acquisitions in 1999.
As a result, the Company realized a net loss of $612,000 during the three months
ended March 31, 2000, compared to net income of $976,000 during the three months
ended March 31, 1999.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 2000, the Company had working capital of $3,315,000 and cash and
cash equivalents aggregating $379,000, compared to working capital of $2,801,000
and cash and cash equivalents of $194,000 at December 31, 1999.
During 1999, the Company increased its facility from GECC and other
participating lenders to $61 million. This facility consists of two revolving
lines of credit totaling $26 million, a $9 million term loan funded at closing,
a $6 million term loan which was funded in connection with the Company's
acquisition of the DeVivo Companies and an $20 million acquisition line.
Accounts receivable and
9
<PAGE>
inventory of the Company and its subsidiaries collateralize one revolving line
of credit in the amount of up to $8 million. The borrowing base is calculated by
taking 80% of the value of eligible receivables and 50% of the value of eligible
inventory. Approximately $14,933,000 was outstanding under this line of credit
as of March 31, 2000 and approximately $500,000 was available for borrowing. The
other revolving line of credit in the amount of up to $9 million is
collateralized by leases entered into by the Company for Hi-Rise systems and
other products manufactured by the Company and its subsidiaries. The borrowing
base is calculated by taking 90% of the value of eligible leases issued by the
Company for its equipment. Approximately $8,850,000 was outstanding under this
line of credit as of March 31, 2000. Both lines of credit bear interest at a
rate per annum equal to the prime rate as announced by THE WALL STREET JOURNAL
plus .5% and are due in October 2003. The term loan funded at closing is for $9
million and bears interest at a fixed rate of 11% for five years. Interest only
on the term loan is payable quarterly for four and one half years with principal
payable for two quarters in the amount of $1.5 million and a $6 million dollar
payment due at October 30, 2003. The $6 million dollar term loan has a six-month
period of interest only and principal payments to be paid on a quarterly basis
until October 30, 2003. The acquisition facility also has a six-month interest
only period and quarterly principal payments due five years from the funding of
the loan. Both the $6 million term loan and the acquisition facility bear
interest at a rate of prime, as announced by THE WALL STREET JOURNAL, plus .5%.
As part of the credit facility provided by GECC and other lenders, the Company
issued warrants to the lenders to purchase an aggregate of 1,476,259 shares of
the Company's Common Stock.
The Company's credit facility with GECC and the other participating lenders
contains a number of covenants, including financial covenants that require the
Company to meet certain financial ratios and tests. At March 31, 2000, the
Company was not in compliance with the maximum leverage ratio, which
non-compliance has been waived by the lenders. The Company is currently
negotiating with the lenders to modify the financial covenants so that the
Company may be in compliance in future periods.
In December 1999, the Company had entered into a lease financing arrangement
with Western Finance and Lease, Inc., formerly known as First Sierra, Inc.
("Western Finance"), pursuant to which Western Finance has agreed to purchase,
from time to time, eligible leases of Hi-Rise Systems from the Company for a
purchase price equal to the discounted present value of the leases purchased.
During 1999, the Company sold the anticipated cash flow relating to twelve (22)
Hi-Rise System leases to Western Finance for an aggregate of $1,706,566.
During the three months ended March 31, 2000, net cash used by operating
activities was $4,268,000, compared to net cash used in operating activities of
$1,526,000 during the three months ended March 31, 1999. Accounts receivable
increased by $2,291,000 as a result of slow payment of customers in the solid
waste equipment part of the business. Days outstanding from these customers
increased from 55 days in March 1999 to 65 days in March 2000. In addition,
inventory increased by $1,353,000 primarily as a result of purchases of
inventory for equipment and material to support the Company's $10 million
backlog. Also net investment in sales type leases increased by $294,000 as a
result of the addition of five leases to the lease portfolio.
Net cash used in investing activities was $421,000 during the three months ended
March 31, 2000. This is the result of the purchases of fixed assets in the first
quarter. Net cash provided by financing activities was $4,874,000 during 1999.
This increase was primarily the result of proceeds from draws under the lines of
credit from the GECC credit facility.
The Company currently has no outstanding material commitments for capital
expenditures. The Company's primary requirements for capital will be the cost of
equipment sold, leased and rented, strategic acquisitions, marketing and sales
costs associated with the Company's national and international expansion into
new target markets, efforts to establish a nationwide distribution network and
general and administrative expenses associated with the Company's business plan.
The Company anticipates, based on currently proposed plans and assumptions
relating to operations (including the anticipated costs associated with, and
timetable for, its proposed expansion), that cash flow from operations and funds
available under the Company's existing credit facilities will be sufficient to
satisfy the Company's contemplated cash requirements for at least 12 months. In
the event that the Company's plans change, its assumptions change or prove to be
inaccurate or if its existing capital and cash flow otherwise prove to be
insufficient (due to unanticipated expenses, delays, problems, difficulties or
otherwise), the Company could be required to seek additional financing or may be
required to curtail its expansion or other activities. In the event that the
Company requires additional financing, the Company may seek to raise capital
through the sale of its equity securities, including at prices, which may
represent significant discounts from the market price of the Common Stock.
10
<PAGE>
CAUTIONARY STATEMENT RELATING TO FORWARD-LOOKING STATEMENTS
The foregoing Management's Discussion and Analysis of Financial Condition and
Results of Operations contains various "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, which represent the
Company's expectations and beliefs concerning future events. The Company
cautions that these statements are further qualified by important factors that
could cause actual results to differ materially from those in the
forward-looking statements, including, without limitation, the following:
decline in demand for the Company's products, increases in costs of sales and
the effect of general economic conditions generally and factors affecting the
waste hauling and construction industries. These statements by their nature
involve substantial risks and uncertainties and actual events or results may
differ as a result of these and other factors.
11
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
As previously reported, On March 10, 1998, World Business Brokers, Inc., a
Florida corporation ("WBB"), filed a lawsuit in the Circuit Court of the
Eleventh Judicial Circuit for Dade County, Florida against the Company. In
general, the lawsuit alleged that the Company entered into an Information
Agreement with WBB pursuant to which the Company agreed to pay a commission
based upon industry standards to WBB in connection with the Company's
acquisition of Hesco. WBB sought damages in excess of $15,000 and attorney's
fees. In May 2000, the Company entered into a settlement agreement with WBB with
respect to this lawsuit under which the Company agreed to pay an amount which is
not material to the Company.
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
Not applicable.
ITEM 6. EXHIBITS AND REPORT ON FORM 8-K
(A) EXHIBITS:
EXHIBITS DESCRIPTION
27 Financial Data Schedule
(B) REPORT ON FORM 8-K:
None
12
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
HI-RISE RECYCLING SYSTEMS, INC.
Date: May 12, 2000 BY: /S/ DONALD ENGEL
---------------------------------------------
Donald Engel, Chairman of the Board and
Chief Executive Officer
(principal executive officer)
Date: May 12, 2000 /S/ BRADLEY HACKER
---------------------------------------------
Bradley Hacker, Chief Financial Officer
(Principal Financial and Accounting Officer)
13
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
- ------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 379,000
<SECURITIES> 179,000
<RECEIVABLES> 16,846,000
<ALLOWANCES> 358,000
<INVENTORY> 11,872,000
<CURRENT-ASSETS> 31,878,000
<PP&E> 9,828,000
<DEPRECIATION> 3,986,000
<TOTAL-ASSETS> 99,079,000
<CURRENT-LIABILITIES> 28,563,000
<BONDS> 0
0
2
<COMMON> 150,000
<OTHER-SE> 39,465,000
<TOTAL-LIABILITY-AND-EQUITY> 99,079,000
<SALES> 15,845,000
<TOTAL-REVENUES> 15,845,000
<CGS> 11,454,000
<TOTAL-COSTS> 15,590,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,447,000
<INCOME-PRETAX> (987,000)
<INCOME-TAX> (375,000)
<INCOME-CONTINUING> (612,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (612,000)
<EPS-BASIC> (.05)
<EPS-DILUTED> (.05)
</TABLE>
