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 OAK BROOK, Ill,, Sept. 30 /PRNewswire/ -- Responding to recent changes in the hazardous waste services industry, Chemical Waste Management, Inc. (NYSE: CHW) today announced that it had completed a study of its business and is undertaking a strategic reconfiguration of its operations to meet current market demand. The company indicated that it would record a special asset revaluation and restructuring charge in the third quarter of $363 million (after-tax) primarily related to a revaluation of its thermal treatment businesses, including incinerators and fuels blending operations. This charge translates into $1.74 per share.
 Among the actions the company plans to take as part of an extensive program to reduce costs and improve efficiency are:
 -- The elimination of approximately 1,200 positions by year-end 1994 through consolidations and asset sales.
 -- Consolidating operations in its treatment and land disposal group.
 -- Restructuring its sales and service regions.
 -- Selling selected service centers in marginal service lines and geographies.
 -- Seeking joint venture partners and reviewing other strategic alternatives for its Port Arthur, Texas incinerator.
 -- Centralizing nationally several functions to improve efficiencies.
 "The actions we are announcing today reflect recent changes in our industry and will enable us to continue to provide our core customers with the quality services, speed and reliability they need for safe management of their wastes," said Pat Payne, president and chief executive officer of Chemical Waste Management.
 "We are taking these steps to size our company appropriately to serve our core customers' needs and to organize our operations to more efficiently serve those regions where waste production is the greatest. We expect these changes to drive down our costs, improve profitability and provide value to our stockholders. Our goal is to align the Company's cost structure with its base business revenues. We will not be dependent on remediation projects with off-site disposal.
 "We intend to remain a leader of our industry, an industry that is a critical part of our nation's environmental infrastructure and its ability to safely manage the byproducts of our modern society. Our Company's network will continue to meet the needs of industry and government.
 "Today marks the culmination of a comprehensive strategic review we announced in July. Based on our study of the marketplace, we know that we must reshape and downsize our company. The marketplace in which we operate poses new realities," Mr. Payne said. "Among these are fewer remediation projects which require off-site hazardous waste disposal; an uncertain regulatory direction related to hazardous waste management, Superfund and other special cleanup requirements for industry; the efforts of American industry in reducing and managing its waste on site; overcapacity of treatment and disposal facilities, especially incinerators; and continued sluggishness in the American economy."
 Mr. Payne said the key environmental regulations, or "hammers", which fueled much of the hazardous waste industry's growth in the 1980s, are in place and are no longer creating incremental demand for hazardous waste disposal services. He said industry capacity created as a result of the 1980s regulatory requirements and with the encouragement of the U.S. EPA exceeds current demand, especially for hazardous waste incinerators. He said when the U.S. EPA encourages private industry to establish treatment technologies, such as incineration, to safely treat the byproducts of America's manufacturing and processing industries, it is also necessary for the government to match the resulting capacity with regulatory support and enforcement.
 Mr. Payne noted that some of the company's competitors had also been adversely affected by changes in the industry. He said that several major companies which provide hazardous waste services had recently cautioned that they would report declining earnings and not pursue the development of new facilities.
 Mr. Payne said the review announced on July 19 included an assessment of opportunities in various markets, an evaluation of demand for landfills and incinerators and a thorough review of the company's strengths and weaknesses.
 He said Chemical Waste Management was reconfiguring its treatment and disposal network. Among the steps are:
 -- A suspension of stabilization operations and most disposal activity at its CID hazardous waste landfill in Chicago.
 -- The consolidation of six drum processing facilities into three locations.
 -- A suspension of aqueous waste treatment operations in Newark, N.J.
 -- The sale of selected assets.
 -- And the commencement of efforts to seek joint venture partners for the Port Arthur incinerator facility and to assess the company's other strategic alternatives for the facility.
 The company announced recently that, due to lack of market demand, it would not seek to develop a hazardous waste incinerator at its Kettleman City, Calif. facility.
 Among other actions, Chemical Waste Management said it would:
 -- Reduce its trucking operations and personnel by making greater use of railroads and contract transporters for intra-company and long-haul shipments of waste.
 -- Consolidate sales and customer service departments, making greater use of electronic communications to serve customers. This action would improve the speed and reliability of services and reduce the number of outside sales and support personnel.
 -- Centralize customer scheduling functions, computer data systems and long-distance transportation coordination in its Oak Brook headquarters.
 -- Consolidate regional laboratories into a single national waste approvals network.
 "One of the primary goals of this reconfiguration is to anticipate continuing market changes and to be in a more competitive position. Sluggishness may continue in the hazardous waste services industry, but Chem Waste is focused on emerging stronger and more profitable," Mr. Payne noted.
 Mr. Payne said the company is looking to Rust International Inc., in which it owns a 56 percent interest, for continued growth. Rust is engaged in environmental engineering, construction, consulting, project management, remediation and industrial services.
 Rust has been selected by the Army Corps of Engineers to negotiate two total environmental restoration contracts, or TERCs, for the remediation of Department of Defense facilities. Rust, which is expected to contribute approximately $1.6 billion in revenue to Chemical Waste Management in 1993, had more than $1 billion in contract backlog at the end of the second quarter.
 The company anticipates that revenues for the third quarter from its core business (which excludes Rust) will be flat to up slightly from the second quarter. Fourth quarter core business revenues are expected to be down slightly from the third quarter, resulting in total core business revenues of approximately $660 million in 1993. On this basis, management expects a marginal loss in the company's core business for the third quarter and marginal profitability in the fourth quarter. Assuming no further deterioration in the company's core business revenues in 1994, management expects 1994 earnings per share to range between $.20 and $.30 excluding the company's share of Rust's net income.
 Chemical Waste Management, Inc. is a leading provider of hazardous waste management services in North America, including waste reduction, recycling and resource recovery and collection, treatment and disposal services.
 -0- 9/30/93
 /CONTACT: William J. Plunkett, 708-572-8898, or (investors) James E. Koenig, 708-572-8822, both of Chemical Waste Management/

CO: Chemical Waste Management, Inc. ST: Illinois IN: CHM SU: RCN

TS -- NY016 -- 7129 09/30/93 08:56 EDT
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Publication:PR Newswire
Date:Sep 30, 1993

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