<PAGE> 1
FORM 10-Q. - QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10Q
(x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1997
Commission File No. 0-25490
KTI, INC.
(Exact name of registrant as specified in its charter)
New Jersey 22-2665282
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
7000 Boulevard East
Guttenberg, New Jersey 07093
(Address of principal executive offices) (Zip code)
(201) 854-7777
(Registrants 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 registrant's classes of
common stock, as of the latest practicable date:
Common Stock, No Par Value 6,907,262 Shares as of May 12, 1997
<PAGE> 2
TABLE OF CONTENTS
Item Number and Caption Page Number
- ----------------------- -----------
PART I
Item 1. Financial Statements 2
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 9
PART II
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 8K 12
1
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
KTI, INC.
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
-------------------- ---------------------
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 2,914,087 $ 5,227,381
Restricted funds - current portion 6,200,392 5,163,965
Accounts receivable, net of allowances of
$295,844 and $291,939 4,675,423 4,080,503
Management fees receivable - current portion 566,634 566,634
Consumables and spare parts 2,810,575 2,100,311
Notes receivable--officers/shareholders and affiliates - current 263,204 57,629
Other receivables 347,487 398,320
Other current assets 1,260,223 480,034
-------------------- ---------------------
Total current assets 19,038,025 18,074,777
Restricted funds 2,863,168 2,903,761
Management fees receivable--affiliates 2,269,672 2,175,203
Notes receivable - officers/shareholders and affiliates - 212,835
Other receivables 463,406 711,783
Investment in PERC 3,826,480 3,792,429
Deferred costs, net of accumulated amortization
of $234,080 and $208,096. 1,141,400 1,020,120
Goodwill and other intangibles, net of accumulated amortization
of $340,699 and $297,941. 2,136,708 2,179,466
Deferred project development costs 1,039,027 909,998
Other assets 215,989 238,893
Property, equipment and leasehold improvements, net of
accumulated depreciation of $13,805,436 and $12,671,949 90,764,297 90,855,366
-------------------- ---------------------
Total assets $ 123,758,172 $ 123,074,631
==================== =====================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 2,972,732 $ 2,371,430
Accrued expenses 1,860,887 1,829,959
Current portion of long-term debt 3,864,105 4,123,840
Income taxes payable 200,000 200,000
Other current liabilities 416,135 465,585
-------------------- ---------------------
Total current liabilities 9,313,859 8,990,814
Other liabilities 1,308,382 1,308,199
Long-term debt, less current portion 34,287,467 34,949,148
Minority interest 11,226,982 10,871,852
Deferred revenue 40,312,500 41,250,000
Commitments and contingencies
Stockholders' equity
Preferred stock; 10,000,000 shares authorized,
no shares issued or outstanding
Common stock, no par value (stated value $.01 per share);
authorized 13,333,333; issued and outstanding
6,879,399 at March 31, 1997 and 6,836,766 at December 31, 1996 68,794 68,368
Additional paid-in capital 38,821,036 38,575,892
Accumulated (deficit) (11,580,848) (12,939,642)
-------------------- ---------------------
Total stockholders' equity 27,308,982 25,704,618
-------------------- ---------------------
Total liabilities and stockholders' equity $ 123,758,172 $ 123,074,631
==================== =====================
</TABLE>
See accompanying notes.
2
<PAGE> 4
KTI, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Three months ended March 31,
1997 1996
----------- -----------
(Unaudited)
<S> <C> <C>
Revenues:
Electric power revenues $ 5,476,510 $ 7,401,470
Waste processing revenues 3,996,037 2,090,460
Other materials handling revenues 2,293,578 715,787
----------- -----------
Total revenues 11,766,125 10,207,717
----------- -----------
Costs and expenses:
Electric power and waste processing
operating costs 8,742,512 6,487,045
Selling, general and administrative 890,804 859,386
Interest - net 474,872 2,032,103
----------- -----------
Total costs and expenses 10,108,188 9,378,534
Equity in net income of PERC 55,987 25,572
----------- -----------
Income from continuing operations
before minority interest 1,713,924 854,755
Minority interest 355,130 831,253
----------- -----------
Income from continuing operations 1,358,794 23,502
Loss from discontinued operations -- 1,372
----------- -----------
Net income $ 1,358,794 $ 22,130
=========== ===========
Earnings per common share and
common share equivalent: $ .19 $ 0.00
=========== ===========
Weighted average number of common shares and
common share equivalents outstanding 7,138,448 5,938,682
=========== ===========
</TABLE>
See accompanying notes.
3
<PAGE> 5
KTI, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three months ended March 31,
1997 1996
----------- -----------
(Unaudited)
<S> <C> <C>
OPERATING ACTIVITIES $ 1,358,794 $ 22,130
Net income
Adjustments to reconcile net income to net cash
(used in) provided by operating activities:
Depreciation and amortization 1,202,229 1,833,962
Minority interest 355,130 831,253
Amortization of deferred revenue (937,500) --
Provision for losses on accounts receivable 3,905 2,729
Interest accrued and capitalized on debt 428,687 183,892
Equity in net income of PERC, net of distributions (55,987) (25,572)
(Gain) loss on sale of assets (547) 19,290
Changes in operating assets and liabilities
Increasing (decreasing) cash:
Accounts receivable (598,825) 394,898
Management fees receivable (94,469) (117,022)
Other receivables 299,210 65,407
Consumables and spare parts (710,264) --
Other assets (757,285) (2,119,326)
Accounts payable 601,302 1,060,832
Accrued expenses 30,928 (303,801)
Other liabilities (49,267) 87,478
----------- -----------
Net cash provided by operating activities 928,777 1,564,139
INVESTING ACTIVITIES
Additions to property, equipment and leasehold improvements (1,049,371) (1,702,912)
Proceeds from sale of assets 7,500 42,500
Increase in restricted cash and cash equivalents (995,834) (741,619)
Deferred project costs (129,029) --
Notes receivable--officers/shareholders and affiliates 7,260 95,548
----------- -----------
Net cash (used in) provided by investing activities (2,159,474) (2,306,483)
FINANCING ACTIVITIES
Proceeds from issuance of debt 423,795 1,034,314
Deferred financing costs (147,264) (372,011)
Proceeds from sale of common stock 245,570 7,648
Principal payments on debt (1,751,962) (340,301)
----------- -----------
Net cash provided by (used in) financing activities (1,082,597) 701,661
----------- -----------
Increase (decrease) in cash and cash equivalents (2,313,294) (40,683)
Cash and cash equivalents at beginning of period 5,227,381 6,454,558
----------- -----------
Cash and cash equivalents at end of period $ 2,914,087 $ 6,413,875
=========== ===========
-Continued-
</TABLE>
4
<PAGE> 6
KTI, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS--(CONTINUED)
<TABLE>
<CAPTION>
<S> <C> <C>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid $ 318,006 $ 2,093,724
================== ==================
NON CASH INVESTING AND FINANCING ACTIVITIES - $ 500,000
Conversion of debt to equity
</TABLE>
See accompanying notes.
5
<PAGE> 7
<TABLE>
<CAPTION>
KTI, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
COMMON STOCK ADDITIONAL
------------------------- PAID-IN ACCUMULATED
SHARES AMOUNT CAPITAL DEFICIT TOTAL
------ ------ ------- ------- -----
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1995 5,946,973 $ 59,470 $33,427,091 $(26,605,994) $ 6,880,567
Net income 13,666,352 13,666,352
Issuance of common stock
under exercise of stock options 55,346 553 280,107 280,660
Issuance of common stock
from exercise of warrants 41,183 412 225,114 225,526
Issuance of common stock
upon conversion of debt 725,015 7,250 4,044,697 4,051,947
Issuance of stock purchase warrants 143,738 143,738
Issuance of common stock
in connection with
business combination 68,249 683 455,145 455,828
---------- ---------- ----------- ------------ -----------
Balance at December 31, 1996 6,836,766 $ 68,368 $38,575,892 $(12,939,642) $25,704,618
Net Income 1,358,794 1,358,794
Issuance of common stock
from exercise of stock warrants 42,633 426 245,144 245,570
---------- ---------- ----------- ------------ -----------
Balance at March 31, 1997 6,879,399 $ 68,794 $38,821,036 $(11,580,848) $27,308,982
========== ========== =========== ============ ===========
</TABLE>
See accompanying notes.
6
<PAGE> 8
KTI, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
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-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of Management, all adjustments (consisting
only of normal recurring accruals) considered necessary for a fair presentation
have been included. Operating results for the three months ended March 31, 1997
are not necessarily indicative of the results that may be expected for the year
ending December 31, 1997. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Company's annual
report on Form 10-K for the year ended December 31, 1996. Certain 1996 financial
information contained herein has been reclassified to conform with the 1997
presentation.
2. EARNINGS PER SHARE
Earnings per share have been computed based on the weighted average
number of shares outstanding as well as the dilutive effect of outstanding
options and warrants during the periods presented.
3. INFORMATION REGARDING PENOBSCOT ENERGY RECOVERY COMPANY
The following financial information of Penobscot Energy Recovery
Company is provided in accordance with Article 10.01(b)(1) of Regulation S-X:
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
1997 1996
<S> <C> <C>
Revenues $6,664,819 $6,877,317
Operating expenses 4,018,932 4,100,031
Net income 956,058 581,902
</TABLE>
7
<PAGE> 9
4. DEBT AND ACCRUED INTEREST
The Company's debt consists of the following:
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
--------------------------------
1997 1996
----------- -----------
<S> <C> <C>
8% convertible subordinated note payable $ 5,000,000 $ 5,000,000
12% term note payable to bank 607,448 1,657,448
10% note payable to Energy National, Inc. 1,353,479 1,353,479
$1,000,000 bank line of credit at bank prime rate plus .25% 914,904 589,904
$300,000 bank line of credit at bank prime rate plus 1.5% -- 220,000
9.94% secured term notes payable 649,931 780,357
Notes payable to limited partners of Maine Energy 374,324 490,063
8.63% secured term note payable 383,819 400,000
9.9% secured term notes payable to GE Capital 139,469 190,368
10.13% secured term notes payable 160,955 179,997
Note payable to former shareholder 112,330 127,137
Other 72,177 108,250
----------- -----------
9,768,836 11,097,003
Resource Recovery Revenue Bonds Payable 13,400,000 13,400,000
12% Subordinated Notes Payable to Maine Energy Limited Partners 14,982,736 14,575,985
----------- -----------
38,151,572 39,072,988
Less current portion 3,864,105 4,123,840
----------- -----------
$34,287,467 $34,949,148
=========== ===========
</TABLE>
5. CONTINGENCIES
The Company is a defendant in certain law suits alleging various claims
incurred in the ordinary course of business. Management of the Company does not
believe that the outcome of these matters, individually or in the aggregate,
will have a material effect on the Company's financial condition, cash flows or
results of operations.
8
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
REVENUES
Electric power revenues decreased $1,925,000 or 26% for the quarter
compared to the same period in 1996. The decrease results from a 4.4% decrease
in electric power produced at Maine Energy and a 54.6% decrease in the contract
rate paid per kilowatt hour. The contract rate reduction is a result of the
Maine Energy restructured PPA contract with Central Maine Power Company which
closed May 3, 1996. These decreases were partially offset by amortization of
$937,500 of the deferred revenue and electric power revenues from Timber Energy
of $1,344,000 which was acquired on November 22, 1996.
Revenues from waste processing increased $1,906,000 or 91.2% compared
to the 1996 quarter. The increase resulted from a 136.2% increase in tons of
specialty waste processed which increased revenue by $106,000, SEMCO revenues of
$145,000 from 4,947 tons brokered into PERC, AAR of Tennessee revenues of
$635,000 from 20,256 tons of ash processed and $995,000 of revenues from
tipping and processing fees at Timber Energy. Specialties Environmental
Management Company, LLC ("SEMCO"), American Ash Recycling of Tennessee, Ltd.
("AAR of Tennessee") and Timber Energy were all acquired or formed after the
first quarter of 1996.
Other materials handling revenues increased $1,553,000 or 216.9% for
the quarter ended March 31, 1997, compared to the 1996 quarter. The increase in
the quarter resulted principally from an increase in revenues at KTI Bio Fuels
of $416,000 or 152.7% and Manner Resins, Inc.'s sales of recyclable plastics of
$1,273,000. KTI Bio Fuels was shutdown for four weeks during the 1996 quarter as
the result of deminished supply of woodwaste and severe weather conditions.
Manner Resins was acquired on November 24, 1996. These increases were offset by
the reduction of revenues at KTI Transportation as the number of vehicles leased
has been reduced.
COSTS AND EXPENSES
Electric power and waste handling operating costs increased by
$2,255,000 or 34.8% for the quarter ended March 31,1997 compared to the 1996
quarter. The increase in 1997 results principally from the newly acquired
entities of Timber Energy, Manner Resins and AAR of Tennessee which had
operating costs of $1,672,000, $1,235,000 and $432,000, respectively for the
first quarter of 1997. Also, KTI BioFuels increased operating costs by $248,000
or 70% due to the increased production at the site. These increases were offset
by a decrease in operating costs at Maine Energy of $1,350,000 due to the new
operating strategy focusing on reducing marginal production (4.4% decrease in
power this quarter) under the restructured Central Maine PPA. The marginal
production at Maine Energy is the most expensive power to produce.
Selling, general and administrative expenses increased by $31,000 or
3.6% for the quarter ended March 31, 1997 compared to the 1996 quarter
principally as result of increases in overhead items related to the acquisitions
of AAR of Tennessee, Manner Resins and Timber Energy.
INTEREST
Interest expense decreased $1,557,000 or 76.6% principally because of
the retirement of $64,500,000 of the Maine Energy bonds and related letter of
credit, and a decrease in subordinated debt of $29,500,000 in 1996.
9
<PAGE> 11
LIQUIDITY AND CAPITAL RESOURCES
The Company is a holding company and receives cash flow from its
subsidiaries. Receipt of cash flow from its affiliate PERC is currently
restricted by covenants under loan agreements, distribution restrictions under
partnership agreements with its equity investors, and put-or-pay agreements with
municipalities. Maine Energy's cash flow is required to retire the remaining
outstanding balance of $14,982,736 of Subordinated Notes Payable as of March 31,
1997 before partners cash distributions can begin. As a result, the following
discussion is organized to present liquidity and capital resources of the
Company separate from Maine Energy and PERC and liquidity and capital resources
of each of Maine Energy and PERC independently.
THE COMPANY
Through March 31, 1997, the Company has accumulated management fees
receivable from PERC in the amount of $2,374,000. These fees are payable by PERC
only out of cash flow after all current operating costs and debt service
payments of the project. PERC has significant restrictions on the amount of cash
flow that can be distributed to the Company. Also, management fees are only paid
annually and only if the partnership meets certain operating results set forth
in its loan documents.
The Company has pledged to ENI, the other general partner of PERC, a
portion of the Company's share of PERC management fees as a means of repaying a
$1,693,000 advance ENI made on the Company's behalf to PERC to cover the
Company's additional partnership capital requirement in 1989. While no assurance
can be given, based upon current conditions, management of the Company expects
annual management fees to be received on a current basis and accrued management
fees from prior years to be paid from PERC's distributable cash flow as the
project continues its recent trend of distribution of cash to its partners. The
future operating results of PERC will determine the exact term over which the
accrued management fees will be received by the Company. As of March 31, 1997
the Company owed ENI $1,353,479. During 1996, the Company received $691,442 in
current and accrued management fees on account of 1995 operations of which
$298,311 was paid to ENI. The Company also received cash from PERC during May,
1997 on account of 1996 operations of $686,363 of which $389,381 was paid to
ENI.
Since February 28, 1991, the Company has been receiving operating and
management fees from Maine Energy on a current basis. During 1996 the Company
received $548,080 for operating and management fees from Maine Energy on account
of 1996 operations. The Company also received $857,534 for accrued management
fees through February 28, 1990. For the first quarter 1997, the Company received
$145,000 for operating and management fees from Maine Energy.
The Company has financed its operations and capital expenditures
primarily from cash flow from its subsidiaries which are not contractually
restricted from making distributions, collateralized equipment financing,
unsecured subordinated debt, drawings under its lines of credit and proceeds
from the sale of the Company's common stock.
The Company and its subsidiaries, other than Maine Energy and PERC, at
March 31, 1997 had indebtedness maturing in the next year of $3,864,000. During
the first quarter of 1997, the Company, other than Maine Energy and PERC,
incurred additional debt of approximately $424,000, primarily as a result of
drawings under its lines of credit and retired approximately $1,752,000 of debt.
As of March 31, 1997, the Company had cash on hand without regard to
Maine Energy and PERC of approximately $1,319,000 and $385,000 available in
lines of credit from a bank. Management of the Company believes that cash flow
from its subsidiaries and affiliates and unused lines of credit will meet its
current needs for liquidity. Moreover, management believes that the Company has
the ability to access additional borrowing facilities if needed, although no
assurance can be given in this regard.
MAINE ENERGY
10
<PAGE> 12
During the last three years Maine Energy has financed its operations
and capital expenditures from cash flows from operations. Cash provided by
operations was $89,259,000 in 1996, as compared to $8,987,000 in 1995. During
1996 Maine Energy sold its generating capacity to CL One for a period through
May 31, 2007. In exchange CL One has agreed to make a series of quarterly
payments to Maine Energy including an initial payment of $85 million. Maine
Energy capital expenditures were $2,939,000 and $2,121,000 for additions to
property, plant and equipment during 1996 and 1995, respectively.
During May 1996, Maine Energy retired the entire outstanding principal
balance of $64.5 million of its tax exempt variable rate revenue bonds and $29.5
million of its subordinated loan accrued interest and principal from the
proceeds from the sale of capacity.
As of March 31, 1997, in addition to Maine Energy's operating cash of
$1,595,000, Maine Energy, as required under the terms of the credit agreement
with its letter of credit, has on account an additional $3,473,000 of reserves
to be used for capital improvements, debt service, operating shortfalls and
working capital requirements.
Management of the Company believes Maine Energy has adequate cash
resources available to fund its future operations and anticipated capital
expenditures. Capital expenditures for Maine Energy for the year ending December
31, 1997 are expected to be approximately $2,581,000, which has principally been
set aside in the above mentioned reserves accounts.
PERC
PERC has financed its recent operations and capital expenditures
primarily by cash flow from operations. Cash provided by operations was
$8,493,000 in 1996 as compared to $10,328,000 in 1995. PERC's capital
expenditures were $1,192,000 and $1,172,000 for additions to property, plant and
equipment during 1996 and 1995, respectively.
At March 31, 1997, PERC had outstanding tax-exempt, variable rate
revenue bonds backed by bank letters of credit in the aggregate amounts of
$52,300,000. The variable interest rate on the Orrington Bonds at March 31, 1997
was 3.5%. The bonds are payable pursuant to a schedule through May 2003. During
the first quarter of 1997 PERC made principal payments to bondholders of
$1,200,000.
As of March 31, 1997, in addition to PERC's operating cash of
$6,297,000, PERC, as required under the terms of the credit agreement with its
letter of credit banks and the trust indenture governing the Orrington Bonds,
had on account an additional $7,879,000 of cash reserves to be used for capital
improvements, debt service, operating shortfalls and working capital
requirements.
Company management believes PERC has adequate cash resources available
to fund its current project operations and currently anticipated capital
expenditures. PERC plans capital expenditures for the year ending December 31,
1997 of approximately $782,000. PERC intends to finance the requirements through
cash flow from operations.
FORWARD LOOKING STATEMENTS
All statements contained herein which are not historical facts
including but not limited to statements regarding the Company's plans for future
cash flow and its uses are based on current expectations. These statements are
forward-looking in nature and involve a number of risks and uncertainties.
Actual results may differ materially. Among the factors that could cause actual
results to vary materially is the availability of sufficient capital to finance
the Company's business plan and other capital needs on terms satisfactory to the
Company. The Company wishes to caution readers not to place undue reliance on
any such forward looking statements, which statements are made pursuant to the
Private Litigation Reform Act of 1995 and as such speak only as of the date
made.
11
<PAGE> 13
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Anthony Buonaguro, a former officer of the Company, has instituted
arbitration proceedings in New York, New York against the Company for alleged
breaches of an employment agreement between Mr. Buonaguro and the Company more
than five years prior to the filing of the arbitration proceedings. The amount
of damages requested is approximately $220,000. The Company believes that it has
meritorious defenses against this claim and will defend the matter.
A fatality of an employee of PERC's operator, ESOCO, occurred when he
was working under a conveyor belt in the plant. His widow has instituted a
lawsuit against various parties. Her lawyer recently has moved to join the
Company to the suit as additional defendants on the basis that the Company is an
owner of PERC. PERC's insurance carrier has accepted the defense of this
lawsuit. All actual owners of record are additional insureds. Under the
operations and maintenance agreement with the operator, ESOCO, such operator is
obligated to defend the Company.
A lawsuit has been filed by David G. Stauffacher against Gerald L. Kuhr,
and others, including the Company and Ross Pirasteh, a Director, Office and
shareholder of the Company, alleging that Mr. Stauffacher purchased 400,000
shares of Company Stock on February 27, 1995 from Mr. Kuhr. Mr. Stauffacher
further alleges that Mr. Kuhr failed to disclose that an agreement with KTI and
Mr. Pirasteh whereby Mr. Kuhr lost the ownership of said stock prior to the date
of such purchase. The plaintiff requests a judgment jointly and severally
against the defendants, including KTI for $1,500,000 or alternately, for 400,000
shares of KTI stock. KTI has meritorious defenses against this claim and has
retained counsel to defend the matter.
The Company is a defendant in certain other law suits alleging various
claims incurred in the ordinary course of business, none of which, either
individually or in the aggregate, the Company believes will have a material
adverse effect on the Company.
Management of the Company does not believe that the outcome of the
foregoing matters, individually or in the aggregate, will have a materially
adverse effect on the Company's financial condition, cash flows or results of
operations.
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 REPORTS ON FORM 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None
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.
KTI, Inc.
(Registrant)
By: /s/ Nicholas Menonna, Jr.
-----------------------------------
Name: Nicholas Menonna, Jr.
Title: Chairman of the Board and
Chief Executive Officer
By: /s/ Martin J. Sergi
-----------------------------------
Name: Martin J. Sergi
Title: President and Chief
Financial Officer
(Principal Accounting
Officer)
Date: May 12, 1997
13
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 2,914,087
<SECURITIES> 0
<RECEIVABLES> 4,675,423
<ALLOWANCES> 295,844
<INVENTORY> 2,810,575
<CURRENT-ASSETS> 19,038,025
<PP&E> 104,569,733
<DEPRECIATION> 123,758,172
<TOTAL-ASSETS> 9,313,859
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 68,794
<OTHER-SE> 27,240,188
<TOTAL-LIABILITY-AND-EQUITY> 123,758,172
<SALES> 11,766,125
<TOTAL-REVENUES> 11,766,125
<CGS> 8,742,512
<TOTAL-COSTS> 10,108,188
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 3,905
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,358,794
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,358,794
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,358,794
<EPS-PRIMARY> .19
<EPS-DILUTED> 0
</TABLE>
