AIR & WATER TECHNOLOGIES ANNOUNCES FIRST QUARTER RESULTS; EBITDA MORE THAN DOUBLES

BRANCHBURGH, N.J., Feb. 20 /PRNewswire/ -- Air & Water Technologies Corporation (AMEX: AWT) announced today that it had reduced its net loss for the first quarter ended January 31, 1996, to $2.9 million, or $0.12 per common share, from $7.4 million, or $0.26 per share, for the prior year. Earnings before interest, taxes, depreciation and amortization (EBITDA) for the period more than doubled to $7.8 million, from $3.2 million in the first quarter of fiscal 1995. Sales for the fiscal first quarter were $159.2 million, a 7% increase from last year's first quarter sales of $148.5 million.

"Our progress continued in the first quarter, with sales gains at our Professional Services Group subsidiary and enhanced operating profitability driven by successful cost control efforts and improvements in our product and service mix," said Claudio Elia, Chairman and Chief Executive Officer. "While the full impact of the improvements were somewhat masked by the seasonality of our business and the Federal Government shutdown which halted work on several Metcalf & Eddy projects during the quarter, we continue to be on plan for a profitable 1996 fiscal year."

Professional Services Group achieved a $.6 million increase in EBITDA on a 53% increase in sales, driven principally by its contract with the Puerto Rico Aqueduct and Sewer Authority for the management and operation of Puerto Rico's water and wastewater treatment facilities. The Company expects the profitability of this contract to increase over its life, and continues to pursue new business opportunities to further expand its leadership in the U.S. water and wastewater management industry, and increase its contributions to AWT's sales and earnings.

Metcalf & Eddy's EBITDA increased almost threefold to $3.7 million for the first fiscal quarter of 1996, attributable to overhead reductions during the latter half of the 1995 fiscal year. Sales showed a small decrease in the quarter due to delays in the release of certain task orders and the effects of severe winter weather, with these factors being somewhat offset by favorable pricing on certain contracts.

Research-Cottrell reported a $.7 million increase in EBITDA, due to a transition to a more favorable product mix and improved project execution.

The Company also achieved reductions in corporate level general and administrative expenses of approximately $1 million, or 38%, versus last year's comparable quarter, as a result of overhead reductions and other initiatives.

Air & Water Technologies Corporation, through its operating units -- Research-Cottrell, Metcalf & Eddy and Professional Services Group -- provides a broad range of environmental and productivity improvement services and technologies to utility, industrial and governmental clients.

                  AIR & WATER TECHNOLOGIES CORPORATION
                 CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTH PERIODS ENDING JANUARY 31, 1996 AND 1995

                 (in thousands, except per share data)
                              (unaudited)
                                                        Three Months
                                                      Ending January 31
                                                     1996        1995
    SALES                                         $159,206     $148,451
    COST OF SALES                                  122,351      112,239
     Gross margin                                   36,855       36,212

SELLING, GENERAL AND

     ADMINISTRATIVE EXPENSES                        29,063       33,008

Earnings before, interest, taxes,

    depreciation & amortization (EBITDA)             7,792        3,204
    DEPRECIATION AND AMORTIZATION                    4,929        4,329
    Operating income (loss)                          2,863       (1,125)
    INTEREST EXPENSE                                (5,614)      (5,722)
    INTEREST INCOME                                    260          121
    OTHER EXPENSE, NET                                (131)        (358)

Loss before, income taxes

    and minority interest                           (2,622)      (7,084)
    INCOME TAXES                                       323          293
    MINORITY INTEREST                                   --           16
    NET LOSS                                       $(2,945)     $(7,393)

LOSS PER COMM0N SHARE

    (AFTER PREFERRED STOCK DIVIDENDS)                 (.12)        (.26)
    Weighted average number of shares outstanding    32,018       32,018
     -0-                            2/20/96

/CONTACT: Robert S. Volland of Air & Water Technologies Corporation, 908-685-4600/

(AWT)

CO: Air & Water Technologies Corporation ST: New Jersey IN: ENV SU: ERN

NT-SR -- NYTU105 -- 8622 02/20/96 17:56 EST