OHM EXPECTS 1ST QUARTER EPS IN LINE WITH STREET EXPECTATIONS DESPITE LOWER RESULTS REPORTED TODAY BY ITS NSC SUBSIDIARY; CITES IMPROVED PROFITABILITY IN ON-SITE HAZARDOUS WASTE CLEAN-UP BUSINESS
FINDLAY, Ohio, April 28 /PRNewswire/ -- OHM Corporation (NYSE: OHM), a leading on-site hazardous waste remediation services firm, expects first quarter earnings per share to be up to 3 cents compared with earnings from continuing operations of 1 cent in last year's first quarter. Net revenues for the period are expected to be down from the $47.7 million reported a year ago. The company plans to report final, consolidated results early next week. Commenting on the anticipated results, James L. Kirk, chairman, president and chief executive officer, said, "The first quarter of the year has traditionally been our seasonally weakest period. We are pleased that improved gross margins in our remediation business and cost controls will permit us to report both improved operating earnings from remediation and a consolidated earnings gain despite a smaller earnings per share contribution from our asbestos abatement subsidiary. "We are optimistic about revenue growth and further improvements in profitability for the full year. Based on large, long-term projects currently underway, and our term contracts with various federal agencies, we expect significant earnings momentum particularly in the second half of the year."
MOMENTUM BEING GENERATED IN REMEDIATION BUSINESS
Kirk added, "We expect revenues from our remediation services to grow 20-25 percent annually for the next several years, with our growth in 1993 largely from the public sector. We began 1993 with a record backlog of obligated projects, including several large cleanup projects at Superfund sites that will commence field work this year, and term contracts, which we expect will be directed to cleanup of military bases." Commenting on the company's ability to bring higher revenues to the bottom line, Kirk noted, "over the past three years we made significant investments in the infrastructure necessary to deliver our services in the sunbelt region. We expect operating margins to continue to expand in this region as incremental revenues are added. "Further, we are benefitting from our investment in technical capabilities. In the past two years, we have been awarded both private and public sector contracts of significant size based on our technical capabilities, rather than price. This trend also bodes well for our future profitability."
ASBESTOS SUBSIDIARY REPORTS SLIGHTLY LOWER EARNINGS
In a separate announcement, OHM's 70 percent owned asbestos abatement subsidiary, NSC Corporation, today reported earnings per share for its first quarter of 10 cents as compared to 13 cents a year ago. NSC's results will be included on a fully consolidated basis with those of OHM for the first quarter.
NSC/BRAND TRANSACTION PART OF OHM LONG-TERM STRATEGY
The previously announced transaction between NSC and The Brand Companies, Inc. is expected to be completed early next week. As a result of the transaction, OHM's ownership interest in NSC will decline to 41 percent from 70 percent. During the second quarter of this year, OHM will begin to account for NSC through the equity method. Kirk said, "We expect NSC's contribution will be additive to earnings for the remainder of this year." Kirk stated, "Several years ago, OHM determined that the on-site hazardous waste clean-up business held the greatest potential for the company's long-term growth and profitability and we have pursued a strategic plan to focus on and strengthen our remediation business." In a series of transactions since 1991, OHM sold its commercial environmental testing labs, reduced its ownership interest in Concord Resources Group, a joint venture, and sold its hazardous waste treatment and storage facility. The reduction in its ownership interest in NSC is the final step in its efforts. Kirk added, "OHM will have generated a cumulative $42 million in cash through these transactions, including approximately $14 million in intercompany loans to be repaid by NSC when its transaction with Brand is completed. These funds have been, and will continue to be, used to invest in our on-site remediation business." With 24 years experience and the successful completion of more than 16,000 projects, OHM Corporation is a leading nationwide environmental remediation firm and a major emergency response contractor, providing a broad range of physical, chemical and biological treatment technologies to clean up hazardous waste through its 30 locations in the United States. OHM provides its services to a diverse client base in the private sector, including petroleum, chemical, transportation, general manufacturing firms and conglomerates as well as the public sector including the U.S. Army Corps of Engineers, the U.S. Department of the Air Force, the U.S. Department of the Navy, the U.S. EPA and at U.S. Department of Energy facilities. -0- 4/28/93 /CONTACT: Sam Iapalucci, 419-424-4924, or Pamela K. M. Beall, 419-425-6002 (investor); or Cheryl Rectorschek, 419-424-4929 (media); all of OHM Corporation/ (OHM)
CO: OHM Corporation ST: Ohio IN: ENV SU: ERP
BM -- CL016 -- 2016 04/28/93 12:15 EDT
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|Date:||Apr 28, 1993|
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