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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
November 14, 1997
KTI, INC.
(Exact name of Registrant as specified in Charter)
New Jersey 33-85234 22-2665282
(State or other juris- (Commission (IRS Employer
diction of incorporation) File Number Identification
Number)
7000 Boulevard East, Guttenberg, New Jersey 07093
(Address of principal executive office) (Zip Code)
Registrant's telephone number including area code- (201) 854-7777
Not Applicable
(Former name and former address, as changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On November 14, 1997, the Company completed the acquisition of three
recycling facilities located in Franklin Park, Illinois, a suburb of Chicago,
Charlestown, Massachusetts, a suburb of Boston, and in Newark, New Jersey. The
facilities will be operated by wholly owned subsidiaries of the Company under
the name of KTI Recycling. The three facilities are capable of processing
approximately 50,000 tons of post consumer and commercial recyclables per month.
The facilities were purchased as part of an asset purchase from Prins
Recycling Corp. and its subsidiaries ("Prins") pursuant to an order of the
Bankruptcy Court for the District of New Jersey entered on November 6, 1997. In
addition to the facilities, the Company purchased substantially all of the
remaining assets of Prins, including cash, accounts receivable and causes of
action. Certain assets and contracts were rejected by Prins as not economically
attractive. Certain causes of action arising under the Bankruptcy Code were not
purchased.
The purchase price was approximately $13.6 million. The purchase was
financed in part by a term loan of $7.5 million provided by Key Bank, National
Association, bearing interest at said Bank's base rate plus 1.25% per annum,
amortized with level monthly principal payments amortized over 60 months. The
term loan is secured by a mortgage on the Franklin Park, Illinois facilities,
all property and equipment at three facilities not pledged to third parties and
the accounts receivable generated by the three facilities. The balance of the
purchase price was paid by internal cash on hand and by a temporary draw of a
portion of the Company's revolving line of credit of $11 million, provided by
Key Bank, National Association.
A subsidiary of the Company had operated Prins from May 1, 1997 until the
closing of the purchase. Pursuant to an agreement with PNC Bank, National
Association, the Company received a one-time management fee of $700,000, paid by
said Bank.
ITEM 5. OTHER EVENTS
The Company completed an amendment to its Amended and Restated Revolving
and Term Loan Agreement with Key Bank, National Association, adding the Term
Loan provision referred to above, effective as of November 14, 1997.
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ITEM 7. EXHIBITS
(a) Financial statements of the business acquired.
It is impractical to provide the required financial statements for Prins
Recycling Corp. as audited financial statements are not available at this time.
The required financial statements will be filed under an amendment to this form
as soon as practical, following receipt of audited financial statements, but not
later than January 16, 1998.
(b) Pro Forma Financial information
It is impractical to provide the required pro forma financial information as
audited financial statements for Prins Recycling Corp. are not available at this
time. The required pro forma financial information will be filed under an
amendment to this form as soon as practical, following receipt of audited
financial statements, but not later than January 16, 1998.
(c) Exhibits
Exhibit Number Description
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4.1 Release dated November 14, 1997
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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 hereunto duly authorized.
KTI, Inc.
(the Registrant)
Dated: December 4, 1997 By: /s/ Martin J. Sergi
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Name: Martin J. Sergi
Title: President
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NEWS RELEASE
FOR IMMEDIATE RELEASE
KTI COMPLETES ACQUISITION OF RECYCLING PLANTS
IN BOSTON, CHICAGO AND NEWARK.
Guttenberg, N. J., (November 14, 1997) -- KTI, Inc. (Nasdaq:KTIE)
announced today it has completed the acquisition of recycling plants in Boston,
Chicago and Newark. The newly acquired facilities, which will operate as KTI
Recycling, are capable of processing and marketing approximately 50,000 tons per
month of post consumer and commercial recyclables at the three state-of-the-art
high capacity plants.
Purchased from a bankruptcy court, the plants are the former assets of
Prins Recycling Corp. The acquisition was valued at $13.6 million. At the height
of operations under the former operators, the facilities generated approximately
$50 million in annual revenue.
KTI President and Chief Financial Officer Martin J. Sergi, said, "This
acquisition is part of our strategy of vertical integration by adding municipal
and commercial recycling programs to our comprehensive solid waste disposal
services. We expect this new operation will be a valuable contributor to KTI's
financial results."
KTI is an award winning environmental company engaged in integrated waste
processing and management in diversified services and markets. The company
handles over two million tons of material a year and is best known for its
expertise in the waste-to-energy sector. KTI was organized in 1983 to develop
and own waste-to-energy facilities with the dual purpose of providing a means of
disposal for non-hazardous municipal solid waste and of generating electricity
from alternative fuel sources. Since then, KTI's operations have expanded to
include the development of an integrated waste management business providing not
only municipal solid waste handling and disposal services, but also wood waste
processing, ash and municipal waste recycling, specialty waste disposal,
transportation facilitation services and transfer station operations.
In Maine, KTI owns and operates two waste-to-energy facilities which
convert non-hazardous solid waste from residential, commercial and industrial
sources into electric power, Maine Energy Recovery Company in Biddeford, and
Penobscot Energy Recovery Company in Orrington. KTI has developed and operates a
wood waste processing and recycling facility in Lewiston, Maine. In Telogia,
Fla., KTI operates a 14-megawatt power plant and in nearby Cairo, Ga. owns a
wood chipping plant. KTI also holds a majority interest in America's only
commercially operational municipal waste ash recycling facility in Nashville,
Tenn., owns a Maryland company specializing in marketing post-industrial
recycled plastics, a paper and metals recycling company in Biddeford, Maine and
a world wide secondary fiber marketing company based in Portland, Ore.
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For further information, contact Marty Sergi at KTI, Inc. (201)
854-7777 or Frank N. Hawkins, Jr. or Julie Marshall at Hawk Associates, Inc.
at (305) 852-2383. Copies of KTI press releases, SEC filings, current price
quotes, stock charts, analysts' comments and other valuable information for
investors may be found on the website http://www.hawkassociates.com.
