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 BRANCHBURG, N.J., Jan. 14 /PRNewswire/ -- Air & Water Technologies Corporation (AMEX: AWT), a leading environmental treatment and services company, today reported income from continuing operations of $4.6 million or 18 cents per share for its fiscal year ending Oct. 31, 1993, compared with a loss from continuing operations of $14.0 million or 56 cents per share in fiscal 1992. SG&A costs were reduced significantly in fiscal 1993, $139.0 million compared to $153.8 million in fiscal 1992. The SG&A reductions contributed, in part, to the positive earnings performance of the company's continuing operations. Revenues for the 1993 fiscal year were $630.4 million compared to $672.9 million in 1992, reflecting greater selectivity in bidding higher margin business. Discontinued operations contributed a loss of $10.1 million or 40 cents per share in fiscal 1993 (further described below). Including the loss from discontinued operations, the fiscal 1993 year closed at a net loss of $5.6 million or 22 cents per share compared to a net loss of $10.0 million or 40 cents per share in fiscal 1992. The 1992 full year results reflect a $7.0 million pre-tax charge (28 cents per share) for costs associated with the company's litigation with the Puerto Rico Aqueduct and Sewer Authority (PRASA). The full year per share results in both years include 27 cents of non-cash charges related to goodwill amortization.
 For the fourth quarter ending Oct. 31, 1993, the company reported net income of 9 cents per share from continuing operations compared to a fourth quarter fiscal 1992 loss of 33 cents per share for continuing operations. The loss from discontinued operations noted previously represented a fourth quarter fiscal 1993 loss of 53 cents per share. Total fiscal 1993 fourth quarter results netted to a loss of 44 cents per share compared to a 30 cents per share loss for the same period in 1992. The PRASA $7.0 million pre-tax charge to earnings was recorded in the fourth quarter of fiscal 1992.
 Fiscal year 1993 showed continued improvement in earnings from ongoing operations. According to Eckardt C. Beck, chairman and chief executive officer of AWT, "we are encouraged by the substantial increase achieved in operating earnings for 1993, going from $17.1 million before the PRASA litigation charge in 1992 to $30.6 million in 1993, and believe this reflects the positive effects from actions taken in early 1993 to reduce SG&A costs and to focus the business on more profitable product segments. We also made the strategic decision to divest and/or discontinue some of the less-profitable, non-strategic businesses."
 The business segment falling into the category of less-profitable, non-strategic businesses was the company's asbestos abatement business, which had been exhibiting rapid deterioration and negative cash flow. A portion of the fourth quarter loss incurred by that discontinued operation was attributed to accounting irregularities discovered by the company in the reporting period. "We found it necessary to take strong and immediate action with our asbestos business given the poor market outlook, the highly competitive nature of the asbestos market and the high cash demands of the business" stated Beck. The asbestos abatement business will be considered a discontinued operation going forward.
 Cost reduction have been and will continue to be an area of management focus for the company. Arthur L. Glenn, president and chief operating officer of AWT has noted that "we are pleased with the progress made on SG&A cost reductions in 1993 having reduced SG&A costs by $14.8 million over 1992, ($139 million down from $153.8 million). We are currently taking actions to remove an additional $6.0 million of SG&A costs going into 1994. While these cost reductions will result in a direct enhancement to company earnings, we caution you that there will be a one time expense in the form of employee benefits associated with this most recent $6.0 million reduction which will off-set income gains in the first quarter of 1994." Glenn went on to say "although we have made great strides in removing excess overhead costs, we must be continually vigilant in pursuing even further cost reductions which will keep us competitive in the marketplace."
 The environmental markets in which AWT participates continued to experience pricing pressures in 1993 in certain product lines. "The key to success in the current marketplace is to focus on niche segments where the clients have immediate needs, such as the Continuous Emissions Monitoring market." The company benefited in 1993 from the strong market in CEMS, produced by AWT's KVB/Analect subsidiary, where KVB achieved over 30% share of the Phase II Utility CEMS requirements. "CEMS will continue to be a strong product line for us as we follow the CEMS market shift from utilities to industry in 1994 and beyond," added Beck. Additionally, the company sees additional growth markets in the areas of service and maintenance and contract operations for government and even more importantly for industry.
 Looking forward, Beck noted that "the company is well-positioned for the growth market areas and will be introducing a range of new products and services in 1994 such as VOC-control processes, NOxOUT, Predictive Maintenance, Environmental Software, and gamma radiation products, to enhance its established positions in air pollution products and services and water/wastewater treatment and engineering design.
 Air & Water Technologies Corporation, through its operating units, provides a broad range of environmental services and technologies in the areas of air pollution control, water resource management, and waste by-product disposal and reuse. Through its AWT Capital group, the company also provides services relating to the financing of environmental facilities and systems.
 Consolidated Statements of Operations

For the Three and Twelve Month Periods Ending Oct. 31, 1993 and 1992
 (in thousands, except share data)
 Three Months Twelve Months
 Ending Oct. 31, Ending Oct. 31,
 1993 1992 1993 1992
 Sales $156,165 $193,772 $630,377 $672,949
 Cost of sales 111,240 145,537 453,898 495,292
 Gross margin 44,925 48,235 176,479 177,657
 SG&A expenses 34,416 41,935 139,047 153,801
 Amort. of goodwill 1,708 1,691 6,835 6,745
 PRASA Litigation --- 7,000 --- 7,000
 Operating income (loss)
 from cont. opers. 8,801 (2,391) 30,597 10,111
 Interest expense (6,510) (6,103) (24,589) (22,680)
 Interest income 247 678 852 1,335
 Other income (expense),
 net (980) (630) (2,218) (1,712)
 Inc. (loss) from cont.
 opers. before inc.
 taxes and minority
 interest 1,558 (8,446) 4,642 (12,946)
 Inc. tax provision
 (benefit) (547) (277) 68 819
 Minority interest (60) 68 21 265
 Inc. (loss) from
 cont. opers. 2,165 (8,237) 4,553 (14,030)
 Inc. (loss) from
 discont. opers. (13,064) 711 (10,108) 3,994
 Net loss $(10,899) $(7,526) $(5,555) $(10,036)
 Net income (loss)
 per share:
 Cont. opers. 9 cents (33 cents) 18 cents (56 cents)
 Discont. opers. (53 cents) 3 cents (40 cents) 16 cents
 Net loss per share (44 cents) (30 cents)(22 cents) (40 cents)
 Weighted avg. number
 of shares outstng. 24,818 24,814 24,815 24,812
 -0- 1/14/94
 /CONTACT: Tony DiMichele of Air & Water Technologies, 908-685-4000/

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

CM-DD -- NE003 -- 2071 01/14/94 09:55 EST
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Publication:PR Newswire
Date:Jan 14, 1994

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