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WAHLCO ENVIRONMENTAL REPORTS FOURTH QUARTER AND YEAR-END RESULTS

 SANTA ANA, Calif., Feb. 16 /PRNewswire/ -- Wahlco Environmental Systems Inc. (NYSE: WAL) today reported results for the fourth quarter and twelve months ended Dec. 31, 1992. Revenue for the quarter declined to $17.4 million versus $27.5 million in the fourth quarter of 1991. The company reported a net loss of $4.8 million, or 27 cents per share versus net income $3.7 million, or 21 cents per share for the fourth quarter of 1991. The primary factors leading to this quarterly loss were lower revenues from flue gas conditioning (FGC) systems, product redesign costs at Wahlco Engineered Products and additional restructuring costs.
 For the twelve-month period, revenue totaled $81.9 million versus $88.8 million and the net loss was $12.8 million, or 72 cents per share versus net income during 1991 of $11.6 million, or 66 cents per share. The loss in 1992 included 16 cents per share restructuring and product redesign charges. Delays by utility customers in complying with the 1990 Clean Air Act and the worldwide recession were major factors contributing to the company's 1992 loss.
 "Revenue from FGC systems decreased 63 percent in 1992, versus 1991," stated Henry N. Huta, president and chief executive officer. "In addition, margins on FGC revenues were down because installations, rather than equipment sales, dominated the product mix.
 "Our recent restructuring and reduction of operating costs should enhance our profit potential," continued Huta. "Even though FGC revenues were down this year, we are cautiously optimistic about 1993 and 1994. With the strategic acquisitions we completed over the last several years, and internal product development, we now provide a broad spectrum of solutions which are an integral part of helping customers optimize their power production processes. We are encouraged by an increased level of bidding activity, recent environmental strategies by the new administration and the fact that all utilities affected by the Clean Air Act's Phase I deadline of Jan. 1, 1995, must submit compliance plans to the Environmental Protection Agency in February 1993. We have also seen our backlog increase from $35.4 million at Sept. 30, 1992, to $39.2 million at December 31, 1992, with FGC backlog doubling to $12 million during that same period."
 Wahlco Environmental Systems Inc. designs and manufactures air pollution control and power efficiency equipment and provides related services to electric utilities, cogeneration plants, petrochemical refineries and industrial manufacturers worldwide. More than 50 percent of the company's manufacturing capacity and sales are outside the United States. The company serves customers in more than 62 countries. Wahlco Environmental is 80-percent-owned by San Diego Gas & Electric Co.
 WAHLCO ENVIRONMENTAL SYSTEMS INC.
 (Unaudited, in thousands, except per share amounts)
 4th Quarter 4th Quarter Percent
 1992 1991 Change
 Revenues $ 17,419 $ 27,471 (37)
 Gross profit $ 2,128 $ 12,115 (82)
 Selling expenses $ 2,350 $ 1,617 45
 General, administrative
 and other expenses $ 6,383 $ 5,946 7
 Income (loss) before
 income taxes $ (6,605) $ 4,552 (245)
 Net income (loss) $ (4,846) $ 3,687 (231)
 Average common shares
 outstanding 17,649 17,649 ---
 Earnings (loss) per
 common share $ (0.27) $ 0.21 (229)
 12 Months 12 Months Percent
 Ended Dec. 31: 1992 1991(A) Change
 Revenues $ 81,877 $ 88,789 (8)
 Gross profit $ 16,869 $ 36,929 (54)
 Selling expenses $ 9,132 $ 4,346 110
 General, administrative
 and other expenses $ 24,563 $ 17,748 38
 Income (loss) before
 income taxes $(16,826) $ 14,835 (213)
 Net income (loss) $(12,788) $ 11,594 (210)
 Average common shares
 outstanding 17,649 17,649 ---
 Earnings (loss) per
 common share $ (0.72) $ 0.66 (209)
 (A) 1992 results include European and other operations acquired after June 30, 1991.
 -0- 2/16/93
 /CONTACT: Doug Sherk or Ken Dennard, 415-296-7383, or JoAnn Horne or Miriam Adler, 212-986-5900, all of Morgen-Walke Associates for Wahlco/
 (WAL)


CO: Wahlco Environmental Systems Inc.; San Diego Gas & Electric Co. ST: California IN: UTI SU: ERN

GT-BU -- SF003 -- 6659 02/16/93 06:31 EST
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Date:Feb 16, 1993
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