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DRAVO CORPORATION REPORTS EARNINGS

 PITTSBURGH, July 22 /PRNewswire/ -- Dravo Corporation (NYSE: DRV) today announced second-quarter earnings of $3.7 million, or 21 cents per share, on revenue of $70.2 million, compared to earnings of $4.4 million, or 25 cents per share, on revenue of $70.6 million during the same period a year ago.
 For the first six months of the year, Dravo reported earnings of $4.1 million, or 19 cents per share, on revenue of $132 million. This compares to earnings of $5.3 million, or 27 cents per share, on revenue of $132 million during the first half of 1992.
 Results for the first and second quarters of 1992 included gains of 1 cent and 6 cents, respectively, from the use of tax loss carryforwards which reduce tax liabilities. In applying Financial Accounting Standard 109 at the beginning of 1993, Dravo offset a net tax asset of $45 million attributable substantially to operating loss carryforwards with a valuation reserve, and adopted a policy of fully reserving against this tax asset as long as substantial uncertainty exists regarding the company's discontinued operations. The effect of this accounting change has been to reduce the tax provision to only state income taxes. As a result, Dravo's reported earnings no longer include an extraordinary item from the use of tax loss carryforwards.
 "The decline in our quarterly performance is largely the result of longer-than-anticipated outages at several utility lime customer locations, as well as the persistence of difficult conditions in our construction aggregates markets," commented Carl A. Torbert Jr., Dravo's president and chief executive officer.
 "For the year as a whole, we expect to see a continuation of prevailing business conditions, with softness in construction aggregates markets in the lower Mississippi River-Gulf Coast region offset to some extent by strong conditions in the Ohio Valley. Our lime plants remain fully committed, but pricing in selected lime markets reflects the limited effects of the current recovery on a number of important industrial segments. Our expectation for the year as a whole, barring any unforeseen developments, is an outcome similar to our results for 1992.
 "The most important event during the second quarter was our success in securing a contract to supply the total lime requirements of the sulfur-dioxide control system being constructed at the General James M. Gavin Station of Ohio Power Company. We expect to provide approximately 450,000 tons of material per year under this contract for a period of 15 years. Initial deliveries are scheduled for the first quarter of 1995.
 "This contract serves as the cornerstone for the long-anticipated expansion of our utility lime business in the Ohio Valley. We are moving forward with a $60 million expansion project to meet our production commitment under this agreement. We will enlarge the scope of this expansion project if we are successful in obtaining orders for additional tonnage in connection with several other lime-based scrubbers currently under construction in our market area."
 Torbert also updated several developments related to Dravo's discontinued operations. "Earlier this month we completed another round of meetings with representatives from the City of Long Beach, Calif., as part of our effort to mediate our dispute with them regarding the waste-to-energy plant which we built for that city. We expect to continue the mediation process.
 "More recently the Supreme Court of Venezuela has rejected our appeal of a judgment awarded last year by a lower Venezuelan court to Meladuras Portuguesa, C.A. (Melaport) and its principal, Alberto Caldera, related to liability for damages in connection with engineering and procurement services rendered between 1973 and 1978 for a sugar cane processing facility. According to Venezuelan law, the damages recognized by this judgment must now be established on the basis of an appraisal process. While opposing counsel has asserted the damages to be in excess of $35 million, we cannot at this time predict the results of the appraisal proceedings.
 "In addition to vigorously contesting the asserted damages, we are also considering other legal actions to challenge what we believe to be an incorrect Venezuelan court ruling. In any event, we have no assets in Venezuela, and will challenge any effort to enforce the judgment in the United States.
 "Also during the second quarter, we received a $5.5 million damage award following a non-jury trial held to adjudicate claims arising from the construction of a steam plant for the U.S. Navy in Norfolk, Va. The court's ruling in this matter will have no effect on our income performance, because the judgment will be treated as a gain to our discontinued operations provision," Torbert said.
 During its regular July meeting, Dravo's board of directors declared a dividend of 61-7/8 cents per share on the $2.475 cumulative convertible Series B preference stock, and a dividend of $3.0875 per share on the cumulative convertible exchangeable Series D preference stock, both payable Oct. 1, 1993, to shareholders of record Sept. 17, 1993.
 DRAVO CORPORATION AND SUBSIDIARIES
 Consolidated Statements of Operations
 (Unaudited; $ in 000s, except per share data)
 Quarters Ended Periods Ended
 June 30 June 30
 1993 1992 1993 1992
 Revenue $70,192 $70,620 $132,003 $132,070
 Earnings before taxes and
 extraordinary item 3,972 4,770 4,392 5,814
 Provision for income taxes 277 1,288 306 1,570
 Earnings before extraordinary
 item 3,695 3,482 4,086 4,244
 Extraordinary item -- 880 -- 1,072
 Net earnings 3,695 4,362 4,086 5,316
 Shares used in computation
 of earnings per share 14,870 14,827 14,864 14,825
 Earnings per share:
 Continuing operations $0.21 $0.19 $0.19 $0.20
 Extraordinary item -- $0.06 -- $0.07
 Total $0.21 $0.25 $0.19 $0.27
 -0- 7/22/93
 /CONTACT: Ron Sommer of Dravo, 412-566-5597/
 (DRV)


CO: Dravo Corporation ST: Pennsylvania IN: CST SU: ERN

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Date:Jul 22, 1993
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