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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-KA-1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) May 6, 1996
--------------------------------
ERD WASTE CORP.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 33-76200 13-3121813
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
937 East Hazelwood Avenue, Rahway, New Jersey 07065
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (908) 381-9226
------------------------------
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION, EXHIBITS
(b) Pro forma financial information.
Pro Forma Consolidated Balance Sheet at April 30, 1996 and Statement
of Operations as of April 30, 1996 for ERD Waste Corp. and
Subsidiaries.
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.
ERD WASTE CORP.
BY: /S/ JOSEPH WISNESKI
--------------------
NAME: JOSEPH WISNESKI
TITLE: PRESIDENT
DATE: July 8, 1996
2
<PAGE>
<TABLE>
<CAPTION>
ERD WASTE CORP. AND SUBSIDIARIES
PRO-FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
HISTORICAL
-------------------------------------------------
Environmental
ERD Waste Corp. Services of
And Subsidiary America, Inc. Pro-Forma Adjustments
Year ended Year ended ---------------------
January 31, 1996 December 31, 1995 Combined DR CR Pro-Forma
---------------- ----------------- ----------- ---------- ------- -----------
REVENUES
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 12,016,098 $ 36,559,170 $48,575,268 $48,575,268
Insurance proceeds 3,200,000 0 3,200,000 3,200,000
------------ ----------- ---------- ----------
TOTAL REVENUES 15,216,098 36,559,170 51,775,268 51,775,268
COST OF SALES 6,098,030 23,571,670 29,669,700 29,669,700
------------ ----------- ---------- ----------
GROSS PROFIT 9,118,068 12,987,500 22,105,568 22,105,568
SELLING, GENERAL and
ADMINISTRATIVE EXPENSES 5,455,197 14,075,773 19,530,970 (5) 327,000 (4) 150,000 19,707,970
------------ ----------- ---------- ----------
INCOME (LOSS) FROM OPERATIONS 3,662,871 (1,088,273) 2,574,598 2,397,598
------------ ----------- ---------- ----------
OTHER INCOME (EXPENSES):
Interest and dividend income 100,370 0 100,370 100,370
Interest expense (71,015) (555,743) (626,758) (6) 675,000 (1,301,758)
0
Other, net 16,651 73,776 90,427 90,427
------------ ----------- ---------- ----------
TOTAL OTHER INCOME
(EXPENSES) 46,006 (481,967) (435,961) (1,110,961)
------------ ----------- ---------- ----------
INCOME (LOSS) BEFORE TAXES 3,708,877 (1,570,240) 2,138,637 1,286,637
PROVISION (BENEFIT) FOR
INCOME TAXES 1,481,246 (588,000) 893,246 (11) 378,591 514,655
------------ ----------- ---------- --------- ------- ----------
NET INCOME $ 2,227,631 $ (982,240) $ 1,245,391 $1,002,000 528,591 $ 771,982
============ =========== ========== ========= ======= ==========
INCOME PER SHARE:
NET INCOME (LOSS) PER
COMMON SHARE $ 0.14
===========
WEIGHTED AVERAGE NUMBER
OF SHARES 5,490,487
===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ERD WASTE CORP. AND SUBSIDIARIES
PRO-FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
HISTORICAL
--------------------------------
Environmental
ERD Waste Corp. Services of
And Subsidiary America, Inc.
Three Months Three Months
Ended Ended Pro-Forma Adjustments
April 30, 1996 March 31, 1996 Combined DR CR Pro-Forma
-------------- -------------- ---------------- -------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
NET SALES $ 3,929,405 $ 6,973,925 $ 10,903,330 (3) 375,000 $ 10,528,330
COST OF SALES 1,966,215 4,832,709 6,798,924 6,798,924
--------- --------- --------- ---------
GROSS PROFIT 1,963,190 2,141,216 4,104,406 3,729,406
SELLING, GENERAL and
ADMINISTRATIVE EXPENSES 1,229,206 3,366,700 4,595,906 (5) 82,000 (4) 37,500 9,044,406
--------- --------- --------- ---------
(7) 650,000 (3) 250,000
(8) 425,000
(9) 500,000
(10) 3,079,000
INCOME (LOSS) FROM OPERATIONS 733,984 (1,225,484) (491,500) (5,315,000)
--------- --------- --------- ---------
OTHER INCOME (EXPENSES):
Interest expense 0 (138,371) (138,371)(6) 168,750 (307,121)
0
Other, net (5,049) 14,926 9,877 9,877
--------- --------- --------- ---------
TOTAL OTHER INCOME
(EXPENSES) (5,049) (123,445) (128,494) (297,244)
--------- --------- --------- ---------
INCOME (LOSS) BEFORE TAXES 728,935 (1,348,929) (619,994) (5,612,244)
PROVISION (BENEFIT) FOR
INCOME TAXES 295,000 (565,471) (270,471) (11) 1,974,427) (2,244,898)
--------- ------------ ------------- ------------ ----------- -------------
NET INCOME $ 433,935 $ (783,458) $ (349,523) $ 5,279,750 $2,261,927 $ (3,367,346)
============ ============= ============== ============ ========== ============
INCOME PER SHARE:
NET INCOME (LOSS) PER
COMMON SHARE $ (0.14)
============
WEIGHTED AVERAGE NUMBER
OF SHARES 5,907,782
===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ERD WASTE CORP. AND SUBSIDIARIES
PRO-FORMA CONSOLIDATED BALANCE SHEET
(Unaudited)
HISTORICAL
--------------------------------------------
ERD Waste Environmental
Corp. and Services of Pro-Forma Adjustments
Subsidiary America, Inc. --------------------------
April 30, 1996 March 31, 1996 Combined DR CR Pro-Forma
------------ ------------ ----------- -------------- --------- ----------
ASSETS
CURRENT ASSETS:
<S> <C> <C> <C> <C> <C> <C>
Cash and cash equivalents $257,838 $522,536 $ 780,374 (2) 7,500,000 (1) 7,791,610 $488,764
Restricted certificates of deposit 800,000 0 800,000 800,000
Accounts receivable 3,542,127 7,135,002 10,677,129 (3) 375,000 9,652,129
(1) 650,000
Inventory 250,240 0 250,240 250,240
Prepaid expenses and deposits 0 875,748 875,748 875,748
Prepaid and refundable income taxes 0 373,881 373,881 373,881
Other 274,319 198,639 472,958 472,958
------------ ------------ ----------- -----------
TOTAL CURRENT ASSETS 5,124,524 9,105,806 14,230,330 12,913,720
------------ ------------ ----------- -----------
PROPERTY AND EQUIPMENT, net of
accumulated depreciation 12,201,280 6,678,505 18,879,785 18,879,785
------------ ------------ ----------- -----------
OTHER ASSETS:
Restricted certificates of deposit 795,922 0 795,922 795,922
Goodwill, net of accumulated
amortization 1,022,848 1,486,363 2,509,211 (19,815,978)(1) 1,486,363 10,838,826
Covenant not to compete, net of
accumulated amortization 287,619 0 287,619 287,619
Deferred permit costs 0 218,831 218,831 (1) 218,831 0
Customer lists 0 101,587 101,587 (1) 101,587 0
Deferred income taxes 0 991,361 991,361 991,361
Loans receivable - ENSA 500,000 0 500,000 (1) 500,000 0
Other 626,076 296,691 922,767 (1) 405,848 516,919
------------ ------------ ----------- -----------
TOTAL OTHER ASSETS 3,232,465 3094,833 6,327,298 13,430,647
------------ ------------ ----------- -----------
$ 20,558,269 $ 18,879,144 $39,437,413 $45,224,152
============ ============ =========== ===========
</TABLE>
See notes to pro-forma financial statements
<PAGE>
<TABLE>
<CAPTION>
ERD WASTE CORP. AND SUBSIDIARIES
PRO-FORMA CONSOLIDATED BALANCE SHEET
(Unaudited)
HISTORICAL
-----------------------------------------
ERD Waste Environmental
Corp. and Services of
Subsidiary America, Inc. Pro-Forma Adjustments
April 30, March 31, ------------------------------
1996 1996 Combined DR CR Pro-Forma
---------- ------------- ------------ ------------ ------------- ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and
<S> <C> <C> <C> <C> <C> <C>
accrued expenses $ 2,767,101 $ 5,984,106 $ 8,751,207 (1) 650,000 $ 9,401,207
Accrued income taxes 1,083,169 15,620 1,098,789 1,098,789
Notes payable - bank 2,470,000 2,470,000 2,470,000
Notes payable - current
portion 1,269,784 2,498,931 3,768,715 (1) 500,000 3,018,715
------------ ------------ ------------ ------------
(3) 250,000
TOTAL CURRENT LIABILITIES 5,120,054 10,968,657 16,088,711 15,988,711
------------ ------------ ------------ ------------
LONG TERM DEBT, net of
current portion1 1,339,857 875,226 2,215,083 (2) 7,500,000 9,715,083
------------ ------------ ------------ ------------
OTHER LIABILITIES:
Deferred income taxes 250,000 0 250,000 250,000
Other 0 273,000 273,000 (1) 1,075,000 5,647,000
------------ ------------ ------------ ------------
(1) 4,299,000
TOTAL OTHER LIABILITIES 250,000 273,000 523,000 5,897,000
------------ ------------ ------------ ------------
STOCKHOLDERS' EQUITY:
Preferred stock 0 135 135 135 0
Common stock 5,833 86,135 91,968 (1) 86,135 5,833
Additional paid in capital 10,356,651 5,828,079 16,184,730 (1) 5,828,079 10,356,651
Retained earnings 3,485,874 847,912 4,333,786 (1) 847,912 3,260,874
------------ ------------ ------------ ------------
(1) 100,000
(3) 375,000 (3) 250,000
TOTAL STOCKHOLDERS' EQUITY $ 13,848,358 6,762,261 20,610,619 13,623,358
------------ ------------ ------------ ------------
$ 20,558,269 $ 18,879,144 $ 39,437,413 $ 25,303,239 $ 25,303,239 $ 45,224,152
============ ============ ============ ============ ============= ============
</TABLE>
See notes to pro-forma financial statements
<PAGE>
ERD WASTE CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED PRO-FORMA CONSOLIDATED FINANCIAL
STATEMENTS
The accompanying unaudited pro-forma consolidated financial
information of ERD Waste Corporation and Subsidiaries ("the Company") as of
April 30, 1996, and for the three months ended April 30, 1996 and the year ended
January 31, 1996 is derived from the Company's historical financial statements
at those dates, and gives pro-forma effect to the acquisition of Environmental
Services of America, Inc. ("ENSA") as if the acquisition took place on February
1, 1995. The financial data for ENSA is for the year ended December 31, 1995 and
as of March 31, 1996 and for the three months ended March 31, 1996,
respectively.
The unaudited pro-forma consolidated financial information does not
necessarily represent actual results that would have been achieved had the
companies been together for the period indicated, nor are they necessarily
indicative of future operating results.
The acquisition of ENSA will be accounted as a purchase. Pro-forma
adjustments were recorded as follows:
PRO-FORMA CONSOLIDATED BALANCE
SHEET ADJUSTMENTS:
(1) To record the acquisition of ENSA,
(2) To record proceeds of acquisition financing provided
by the Company's commercial lender
(3) To record the elimination of intercompany balances
<TABLE>
<CAPTION>
PRO-FORMA CONSOLIDATED STATEMENT Three months Year Ended
OF OPERATIONS ADJUSTMENTS: ended April 30, January 31,
1996 1996
--------------- ------------
<S> <C> <C>
(4) To record the elimination of the salary of terminated
officer $ 37,500 $150,000
(5) To record amortization of goodwill over 30 years 82,000 327,000
(6) To record interest on the acquisition line of credit at
prime plus 1% 168,750 675,000
(7) To record an increase in ENSA's allowance for
doubtful accounts 650,000 -
(8) To record estimated costs associated with
restructuring of certain operations 425,000 -
(9) To record estimated costs of litigation 500,000 -
(10) To record estimated costs of property remediation
and clean-up 3,079,000 -
(11) To record issuance of common shares in connection
with $4,000,000 refinancing of ENSA debt 200,000 800,000
(12) To record income taxes (benefit) at 40% of pretax
income (2,054,427) (698,591)
</TABLE>
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