Printer Friendly

CANONIE ENVIRONMENTAL SERVICES CORP. ANNOUNCES RESTRUCTURING PLANS AND SECOND QUARTER RESULTS

 DALLAS, Oct. 12 /PRNewswire/ -- Canonie Environmental Services Corp. (NASDAQ: CANO), a leading provider of services for the remediation of hazardous waste sites, announced a loss of $7,643,000 (or $1.34 per share) for the quarter ended Aug. 31, 1993, including a primarily non cash, special charge of $7,386,000 (or $1.30 per share) for a restructuring plan being implemented by the company. The restructuring plan includes seeking partners for Canonie's non core businesses, a further reduction in overhead expenses and the approval by the board to seek certain acquisitions.
 "The benefits of this restructuring plan," according to Canonie's President, Richard Zartler, "coupled with two recent awards totalling over $23 million using our SoilTech subsidiary's processor, and lower debt, which was cut in half during the second quarter to $4 million, is expected to enable Canonie to earn a profit in the last half of the year."
 The net loss of $7,643,000 compares to a net loss of $1,199,000 ($0.21 per share) in the prior year period. The current quarter special charge includes adjustments to the carrying value of non core business assets and other assets whose future values are impaired or substantially delayed, provisions for implementing the cost reduction program, and additions to earlier provisions for the settlement of disputes arising from prior year contracts. The prior year period contained special charges for severance and contract losses of $2,056,000 pretax or $1,225,000 ($0.21 per share) after tax. Excluding these special charges, Canonie's second quarter loss would have been $257,000 ($0.04 per share) versus an income of $26,000 ($0.01 per share) in the prior years' period. Interest charges and losses at Canonie's SoilTech ATP Systems, Inc. subsidiary account for most of the differences between the periods. Second quarter results exclusive of the special charge were positive, before SoilTech losses, state taxes and interest expenses.
 Second quarter revenues were $13,882,000, $6,081,000 less than prior period, reflecting completion of several large jobs during the second quarter of the prior year. Current second quarter revenues were essentially unchanged from the first quarter.
 The restructuring plan includes Canonie seeking partners to assist with the cash needs of its non core businesses, principally a recycling center and a land development project. These projects are facing increasing regulatory hurdles, including, on one, an EPA imposed 18 month permitting moratorium, and correspondingly increasing cash needs. "We have more critical uses for our cash," Zartler indicated. "In spite of the cash drains of these projects, we reduced our debt during the quarter and we would like to get it lower. Also we want to make investments to enhance our core businesses including selected acquisitions."
 Although Canonie reported a $1 million or 14 percent overhead reduction for the six months ended Aug. 31, 1993, when compared to the prior year's period, Canonie believes further reductions are necessary to ensure profitable operations. The company has targeted an additional $1 million annual overhead cost reduction from its current spending levels. These reductions will come from projects already being implemented as well as projects to be initiated over the next few months. "Streamlining the way we do our business and the consolidation of certain offices and functions are on the top of our list," Zartler added.
 "For the longer term," Zartler stated, "the recognized trend toward on-site remediation, which is Canonie's expertise, should benefit the company significantly."
 Canonie Environmental Services Corp. provides comprehensive, hazardous waste remediation services. The firm has over 14 years of experience in site investigation and characterization, strategic planning, engineering, construction, and operation and maintenance. The company has developed and applied practical, yet innovative technology to meet clients' needs. It is one of the few firms capable of providing such a broad range of services.
 CANONIE ENVIRONMENTAL SERVICES CORP.
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (in thousands, except per share data)
 Six Months Ended Aug. 31,
 1993 1992(A)
 (Unaudited)
 REVENUES $28,040 $43,862
 COSTS AND EXPENSES:
 COST OF REVENUES 21,615 36,310
 SELLING, GENERAL, AND
 ADMINISTRATIVE EXPENSES 6,078 7,095
 INTEREST EXPENSE (INCOME) 212 (33)
 MINORITY INTEREST OF
 CONSOLIDATED SUBSIDIARY --- (15)
 SPECIAL ITEMS (NOTE B) 7,386 2,036
 TOTAL 35,291 45,393
 LOSS BEFORE TAXES 7,251 1,531
 TAXES ON INCOME (TAX
 BENEFIT FROM LOSS) 135 (611)
 LOSS BEFORE LOSSES OF
 UNCONSOLIDATED AFFILIATES 7,386 920
 SHARE IN LOSSES OF
 UNCONSOLIDATED AFFILIATES 325 76
 NET LOSS $7,711 $996
 WEIGHTED AVERAGE NUMBER OF
 COMMON SHARES OUTSTANDING 5,701 5,701
 EARNINGS (LOSS) PER SHARE
 OF COMMON STOCK $(1.35) $(0.17)
 Three Months Ended Aug. 31,
 1993 1992(A)
 (Unaudited)
 REVENUES $13,882 $19,963
 COSTS AND EXPENSES:
 COST OF REVENUES 10,780 16,289
 SELLING, GENERAL, AND
 ADMINISTRATIVE EXPENSES 2,897 3,593
 INTEREST EXPENSE (INCOME) 119 (21)
 MINORITY INTEREST OF
 CONSOLIDATED SUBSIDIARY --- (7)
 SPECIAL ITEMS (NOTE B) 7,386 2,036
 TOTAL 21,182 21,890
 LOSS BEFORE TAXES 7,300 1,927
 TAXES ON INCOME (TAX
 BENEFIT FROM LOSS) 135 (767)
 LOSS BEFORE LOSSES OF
 UNCONSOLIDATED AFFILIATES 7,435 1,160
 SHARE IN LOSSES OF
 UNCONSOLIDATED AFFILIATES 208 39
 NET LOSS $7,643 $1,199
 WEIGHTED AVERAGE NUMBER OF
 COMMON SHARES OUTSTANDING 5,701 5,701
 EARNINGS (LOSS) PER SHARE
 OF COMMON STOCK $(1.34) $(0.21)
 (A) -- Classifications conform to the current period presentation.
 (B) -- In the current year second quarter, the company recorded a special charge of $7.4 million. Of the total charge, $3.7 million is associated with writedowns reflecting the decline in the value of certain business assets, mainly related to investments in a recycling center project and a land development project; $2.6 million is primarily related to the settlement of disputes arising from prior period contracts; and $1.1 million reflects the anticipated costs of scaling back overhead and overhauling project management, procurement and financial control systems.
 In the prior year second quarter, a $2.0 million special charge was recorded, which includes a $1.5 million provision for anticipated project cost overruns and a $.5 million charge for restructuring.
 -0- 10/12/93
 /CONTACT: Calvin B. Massmann, chief financial officer, of Canonie Environmental Services, 214-770-0244/
 (CANO)


CO: Canonie Environmental Services Corp. ST: Texas IN: ENV SU: ERN RCN

BM-KL -- CL004 -- 0960 10/12/93 09:19 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Oct 12, 1993
Words:1055
Previous Article:SONOCO PROMOTES THREE IN SENIOR MANAGEMENT
Next Article:FIRST EMPIRE RELEASES THIRD QUARTER RESULTS
Topics:

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters