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SERV-TECH ANNOUNCES YEAR END 1991 RESULTS

 SERV-TECH ANNOUNCES YEAR END 1991 RESULTS
 HOUSTON, March 5 /PRNewswire/ -- Serv-Tech, Inc. (NASDAQ: STEC)


announced today that revenues for the year ended Dec. 31, 1991, were a record $88.3 million, more than double 1990 revenues of $42.3 million.
 Net income for the year was $3.1 million, or 59 cents per share, compared to $3.3 million for 1990, or 75 cents per share. The lag in earnings was caused by higher than anticipated start-up costs for European operations, extraordinary legal expenses, increased general and administrative expenses, lower profit margins on the company's turnaround maintenance work, and an increase in effective federal and state income tax rates to 42 percent in 1991, up from 36 percent in 1990. Average shares outstanding for 1991 were 5,184,004, 17 percent higher than 1990's average shares outstanding of 4,428,397.
 "We aren't satisfied with the earnings results for 1991," said Richard W. Krajicek, chairman of the board of Serv-Tech. "But, we also believe they reasonably reflect the costs of decisions made by management in 1991 that will have a positive effect on the company both near term and long term."
 The company's fourth quarter 1991 revenues of $28.1 million, also a record, resulted in part from the acquisition of SECO Industries, Inc., which was completed in September 1991. Earnings before income taxes were $359,000, compared to $1.1 million in the fourth quarter of 1990. Net income for fourth quarter 1991, adversely affected by an accounting adjustment in the treatment of foreign taxes, was $83,000, or 1 cent per share, down from $662,000, or 15 cents per share, in 1990.
 "Fourth quarter earnings were most heavily impacted by the cost implications cited above," said Krajicek. "It's important to bear in mind that Serv-Tech's base revenues, excluding acquisitions, have grown at a compounded annual rate of 68 percent over the past five years. Revenue growth in 1991 exceeded our expectations, and we brought in the management team required to manage this growth and the growth we see ahead of us. There has been a conscious decision to take Serv-Tech from a small, niche-oriented business to a major player in the industrial maintenance field."
 Krajicek also pointed out that the company had incurred substantial legal expenses in an effort to protect its proprietary technology. A major part of this cost is non-recurring. In addition, a recent agreement with Thyssen Handelsunion AG is expected to reduce the cost of Serv-Tech's expansion into Europe and at the same time speed up penetration of that market.
 "I'm optimistic that the actions we've taken will produce results in 1992," Krajicek said. "Our turnaround maintenance services in the U.S. continue to expand and the electrical and instrumentation business of SECO has a strong backlog of work. Furthermore, we have already contracted for over $40 million of this work, nearly 50 percent of 1991's total revenues. We anticipate a resumption in our earnings growth."
 Following are unaudited operating results for the three- and 12-month periods ended Dec. 31, 1991 and 1990.
 SERV-TECH, INC.
 (In thousands, except per-share amounts)
 Periods ended Three Months Year
 Dec. 31 1991 1990 1991 1990
 Revenues $28,064 $12,292 $88,341 $42,378
 Income before
 income taxes 359 1,052 5,343 5,194
 Net income 83 662 3,091 3,316
 Earnings per share $.01 $.15 $.59 $.75
 Weighted average
 shares outstanding 5,662 4,430 5,184 4,428
 -0- 3/5/92
 /CONTACT: John M. Slack of Serv-Tech, 713-644-9974/
 (STEC) CO: Serv-Tech, Inc. ST: Texas IN: SU: ERN


CK -- NY080 -- 5646 03/05/92 17:21 EST
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Date:Mar 5, 1992
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