Global Village Reports Fiscal Third Quarter Results
SUNNYVALE, Calif.--Jan. 21, 1997--Global Village Communication Inc.
(NASDAQ:GVIL) today reported financial results for its third quarter of
fiscal 1997, ended December 31, 1996.
Net revenue was $10.5 million, compared with $39.5 million for the same
period of 1996. Net loss was $40.7 million, or $2.44 per share. This
compared to net income of $2.3 million, or 12 cents per share for the same
period a year ago. Included in this quarter's results is a $9.8 million loss
from discontinued operations, including a deferred tax asset adjustment of
$9.0 million. The net loss from continuing operations was $30.9 million.
"As we reported last December, we are obviously disappointed with our
results, and have taken the difficult steps necessary to streamline the
company and position Global Village for a return to profitability and
growth," said Neil Selvin, president and chief executive officer.
Included in the results are the following charges: -0- -- An $11.8 million
write-down of inventory to better match expected sales of various products
in future quarters, and to reflect a refocusing on core product lines.
-- A charge of $6.6 million for actual and anticipated product returns for
certain products from resellers and distributors.
-- A charge of $3.9 million related to restructuring and other expenses
associated with the resizing of the business.
-- A $9.8 million loss from discontinued operations, including a tax
adjustment of $9.0 million.
Without these adjustments, revenues for the third quarter of fiscal 1997
would have been $17.1 million and the net loss would have been $8.6
million.
"Despite introducing several exciting new products during the quarter, sales
were down for both our PC and Macintosh-related products," said Selvin.
"Slow PowerBook sales in particular continue to impact our PowerPort
business. In addition, the weakness in demand for Performa product sales
had a negative impact on our Apple OEM business. On the PC side, a soft
retail environment during the holiday season for many computer products,
combined with the slow acceptance of a new product category, affected
sales of our NewsCatcher wireless Internet communications product.
"As we move forward with a more focused business model, we will
continue to focus on creating innovative personal communications products
that deliver unique value to the personal computer user," Selvin said. "This
philosophy has served us well in the past, and will be the cornerstone of our
turnaround in the future."
For the first nine months of fiscal 1997, revenues were $71.2 million,
compared with $97.8 million for the same period a year ago. Net loss,
including one time charges, was $45.4 million, or $2.71 per share,
compared with net income of $6.2 million, or $0.34 per share, for the same
period last year.
About Global Village Communication
With nearly eight million customers, Global Village Communication
(NASDAQ:GVIL) is a leading supplier of integrated communication
solutions for personal computer users. The company sells its products
directly and through leading VARs, retailers and distributors worldwide.
For more information about Global Village, please visit "The Village" web
site at http://www.globalvillage.com.
Portions of this news release contain forward-looking statements. Investors
are cautioned that all forward-looking statements involve risks and
uncertainties, including, without limitation, announcements by the company's
customers and competitors, product returns. Risks related to delays in
product development and new product introductions, rapidly changing
technology an intensely competitive market, market acceptance of new
products, foreign operation, and general economic conditions. Each of these
factors, and others, are discussed more fully in the company's last filed
Form 10K, Form 10Q and the company's other filings with the Securities
and Exchange Commission. -0- *T
GLOBAL VILLAGE COMMUNICATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months
Ended
December 31,
1996 % 1995
%
(unaudited)
(unaudited)
Net revenue $10,466 00.0%
$39,517 100.0%
Cost of revenue 25,451 243.2%
22,504 56.9%
Gross profit (deficit) (14,985) -143.2%
17,013 43.1%
Operating expenses:
Research and development 3,132 29.9%
4,190 10.6%
Marketing and sales 11,653 111.3%
6,365 16.1%
General and administrative 2,564 24.5%
1,528 3.9%
Restructuring costs 1,297 12.4%
-- 0.0%
Loss from investment in
Global Center -- 0.0%
-- 0.0%
Total operating expenses 18,646 178.2%
12,083 30.6%
Income/(loss) from continuing
operations (33,631) -321.3%
4,930 12.5% Other income, net 80
0.8% 247 0.6%
Income before income
taxes (33,551) -320.6%
5,177 13.1%
Income taxes (2,605) -24.9%
1,655 4.2%
Net income/(loss) from
continuing operations ($30,946) -295.7%
$3,522 8.9%
Discontinued operations:
Loss from operations
of discontinued Global Village
Communication, Ltd. -- 0.0%
($1,272) -3.2%
Loss on disposal of Global Village
Communication, Ltd., (Including a
tax adjustment of $9.0 million
for the three months ended
December 31, 1996) (9,800) -93.6%
-- 0.0%
Net income/(loss) ($40,746)
$2,250
Net income/(loss) per share from
continuing operations $ (1.85) $
0.19
Net income/(loss) per share from
discontinuing operations $ (0.59) $
(0.07)
Net income/(loss) per share $ (2.44) $
0.12
Shares used in computing net income
(loss) per share 16,725
18,070
GLOBAL VILLAGE COMMUNICATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Nine Months Ended
December 31,
1996 % 1995
%
(unaudited)
(unaudited)
Net revenue $71,207 100.0%
$97,764 100.0% Cost of revenue 68,939
96.8% 54,644 55.9%
Gross profit (deficit) 2,268 3.2%
43,120 44.1%
Operating expenses:
Research and development 9,575 13.4%
10,549 10.8% Marketing and sales 25,234
35.4% 16,434 16.8% General and
administrative 5,930 8.3% 4,066 4.2%
Restructuring costs 1,297 1.8% --
0.0% Loss from investment in
Global Center 2,191 3.1% --
0.0%
Total operating
expenses 44,227 62.1% 31,049
31.8%
Income/(loss) from
continuing operations (41,959) -58.9% 12,071
12.3%
Other income, net 633 0.9%
731 0.7%
Income before income
taxes (41,326) -58.0% 12,802
13.1%
Income taxes (5,401) -7.6%
4,053 4.1%
Net income/(loss)
from continuing
operations ($35,925) -50.5% $8,749
8.9%
Discontinued operations:
Loss from operations of
discontinued Global Village
Communication, Ltd. ($1,822) -2.6%
($2,592) -2.7%
Loss on disposal of Global Village
Communication, Ltd.,
(Including a tax adjustment
of $9.0 million for the
three months ended
December 31, 1996) ($7,667) -10.8% --
0.0%
Net income/(loss) ($45,414)
$6,157
Net income/(loss) per share
from continuing
operations $ (2.14) $
0.48
Net income/(loss) per share
from discontinued
operations $ (0.57) $
(0.14)
Net income/(loss) per
share $ (2.71) $
0.34
Shares used in computing
net income/(loss) per
share 16,771
18,044
GLOBAL VILLAGE COMMUNICATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31,
March 31,
1996
1996
ASSETS (unaudited)
(audited)
Current assets:
Cash and short-term investments $17,387
$37,719 Accounts receivable, net
5,220 12,449 Inventories, net
7,693 5,779 Income tax
receivable 8,344
0 Deferred income taxes 0
2,384 Other current assets
572 1,998 Net assets of
discontinued operations 0 277
Total current assets 39,216
60,606
Property and equipment, net 8,181
10,055 Other assets
4,209 1,374
Total Assets $51,606
$72,035
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $31,711
$18,046 Accrued and other liabilities
5,564 5,823 Income taxes payable
0 335 Line of credit
borrowings 8,000 0
Net liabilities of discontinued
operations 4,537
0
Total current liabilities 49,812
24,204
Stockholders' equity 1,794
47,831
Total Liabilities and
Stockholders' $51,606
$72,035
CONTACT: Global Village (Media Contact) Kevin Burr, 408/523-2260
kevin_burr@globalvillage.com Heidi Palmer, 408/523-2204
heidi_palmer@globalvillage.com or Demer IR (Analyst Contact) Marianne
Baldrica, 510/938-2678 baldrica@demer-ir.com
International Technology Corporation Announces Third Quarter Results
Operating Income Increases Substantially Over Previous Quarter
TORRANCE, Calif., Jan. 21, 1997 - International Technology Corporation
(NYSE: ITX) (IT) today reported its financial results for the third fiscal
quarter ended December 27, 1996, which included a significant increase in
operating income over the previous quarter, indicating continued
operational improvements based on the Company's recent restructuring. IT
also said that its previously announced investment in a Taiwan-based
wastewater treatment design/build firm represents a substantial first step in
the Company's growth and diversification plan.
Revenues for the third quarter were $92.5 million compared with $104.9
million for the same quarter in the prior year. Loss for the quarter was
$924,000, or $0.10 per share, compared with prior year income of $1.4
million, or $0.15 per share, excluding a net charge of $7.1 million related to
the recapitalization of Quanterra and certain tax benefits. The current
quarter includes a non-cash imputed dividend of $245,000, or $0.03 per
share, related to the newly-issued preferred stock purchased by The Carlyle
Group.
For the nine months ended December 27, 1996, revenues were $266.4
million compared with $311.5 million for the same period in the prior year.
The Company reported a loss of $13.5 million, or $1.48 per share,
compared with a loss of $3.1 million, or $0.35 per share, for the
comparable period last year. Excluding a restructuring charge of $8.4
million in the second quarter of the current fiscal year, the loss for the nine
months ended December 27, 1996 was $5.1 million, or $0.56 per share,
while income in the prior year was $4.0 million, or $0.44 per share,
excluding the $7.1 million charge noted above.
The Company noted that operating income for the quarter was $2.1 million,
compared to $506,000 for the second quarter of fiscal 1997 (excluding a
restructuring charge of $8.4 million) and an operating loss of $1.3 million
for the first quarter of fiscal 1997.
Anthony J. DeLuca, president and acting chief executive officer, stated,
"The significant increase in operating income during the current fiscal year
is driven by overhead cost efficiencies generated by the restructuring
successfully completed by the Company during the second quarter of this
year, combined with a more focused and disciplined approach to the market.
Overhead costs in the current quarter declined by over $2 million from the
September quarter, and by over $4 million from the June quarter, and our
new market and client focused organization should provide additional
efficiencies in our delivery system."
Mr. DeLuca added, "With ongoing constraints on revenues and contract
margins brought about by competitive market conditions, our goal is to
improve operations. We are taking a more selective and disciplined
approach to the market by focusing on higher margin value-added services
for our clients, while lowering marketing and proposal costs. Using this
strategy, we expect further improvements in our business consistent with the
progress that has been made over the past two quarters."
"With the completion of the Carlyle transaction, we believe we are now
sufficiently capitalized to aggressively move forward with our plan for
growth and diversification while taking advantage of continued
consolidation in the environmental services industry. IT received
approximately $41 million in net proceeds from the Carlyle transaction
which closed in November 1996. The cash proceeds from Carlyle
combined with aggressive receivables and cash management improved the
Company's cash position as of December 27, 1996 to approximately $70
million.
"Carlyle is proving to be the strategic partner we anticipated. In addition to
providing funds for acquisitions, we are greatly benefitting from Carlyle's
international presence, its strong government acumen and its experience in
its successful acquisition strategies. Our recent Taiwan investment
represents a major step in this strategy," Mr. DeLuca concluded.
The Company said that backlog at December 27, 1996 was approximately
$1.193 billion compared with $975 million at March 29, 1996. These
amounts include $811 million and $598 million, respectively, of project
work the Company estimates receiving under existing government indefinite
delivery order contracts. Revenues from backlog and delivery order
contracts are expected to be earned over the next one to five years.
Statements made in this news release that state the Company's or
management's intentions, beliefs, expectations or predictions for the future
are forward-looking statements that involve risk and uncertainties. It is
important to note that the Company's actual results could differ materially
from those projected in such forward- looking statements. In addition to the
factors set forth above, other important factors that could cause actual
results to differ materially include, but are not limited to, projected financial
results, funding of backlog, the effects of the Company's restructuring and
industry-wide market factors.
International Technology Corporation, based in Torrance, California, is a
leading environmental management company providing services to
government and industry. The Company's common stock and depositary
shares are traded on the New York Stock Exchange under the symbols ITX
and ITX pr, respectively.
International Technology Corporation Condensed Consolidated Statements
Of Operations (In thousands, except per share data)
Quarter ended
Three quarters ended
December 27, December 29, December
27, December 29,
1996 1995
1996 1995
Revenues $92,513 $104,912
$266,419
$311,463
Operating income
(loss) $2,097 $5,629
$(7,101)(a) $17,708(b)
Equity in net loss
of Quanterra -- (24,595)(c)
-- (26,416)(c)
Other income
-- -- -- 1,090(d)
Interest expense,
net (1,446) (1,529)
(4,105) (5,172)
Income (loss) before
income taxes 651 (20,495)
(11,206) (12,790)
(Provision) benefit
for income taxes (280) 15,808(e)
1,146 12,803(e)
Net income (loss) 371 (4,687)
(10,060)
13
Less preferred stock
dividends (1,295)(g) (1,050)
(3,395) (3,150)
Net loss applicable
to common stock $(924) $(5,737)(f)
$(13,455) $(3,137)(f)
Net loss per
common share (h) $(.10) $(.64)
$(1.48) $(.35)
Average common and
common equivalent
shares outstanding 9,048 9,011
9,100 8,983
(a) Includes $8,403 restructuring charge in the
quarter ended
September 27, 1996.
(b) Operating income is net of $1,040 of
severance costs
incurred during the quarter ended September 29,1995.
(c) Includes charge of $24,595 related to the
recapitalization
of Quanterra.
(d) Other income includes a gain on the
settlement of the
Motco litigation net of costs related to certain
incineration equipment specially constructed for the
Motco project which has been idle since ceasing work
on the project, and legal and other expenses.
(e) Includes $7,500 tax credit resulting from
the adjustment
of IT's deferred tax asset valuation allowance and
$9,970 tax benefit related to the loss on
recapitalization of Quanterra.
(f) Includes net charge of $7,125 ($.79 per
share) related to
the recapitalization of Quanterra and adjustment of
deferred tax asset valuation allowance.
(g) Includes $245,000 or $.03 per share related
to non-cash
imputed dividend related to the newly-issued preferred
stock purchased by The Carlyle Group.
(h) Net loss per common share is computed by
dividing net loss
applicable to common stock by the weighted average
number of common and common equivalent shares
outstanding. For all periods above, net loss per
common share, computed based upon the assumption that
all of the Company's convertible exchangeable
preferred stock is converted into common shares, is
antidilutive and therefore not presented.
SOURCE International Technology Corporation /CONTACT: Philip H.
Ockelmann of International Technology Corp., 310-378-9933; Jody Martin
of Sitrick And Company, 310-788-2850/
NCR Reports Fourth-Quarter and Full-Year 1996 Financial Results
DAYTON, Ohio, Jan. 21, 1997 - NCR Corporation (NYSE: NCR) reported
fourth-quarter net income of $7 million, or $.07 per share, compared to a net
loss of $305 million, or $3.01 per share, in the comparable period last year.
In the fourth quarter, NCR completed a review of its remaining business
restructuring reserves. This review resulted in a favorable adjustment of
$55 million to operating income. A concurrent review of the tax benefit of
restructuring reserves recorded in the third quarter of 1995 resulted in a
one-time unfavorable adjustment to the fourth-quarter 1996 provision for
income taxes of $82 million. The net effect of restructuring- related
adjustments in the fourth quarter of 1996 reduced net income by $27 million
or $0.27 per share.
Revenue in the quarter was $2.04 billion, a decline of 10 percent from the
$2.27 billion reported in the year ago period. The decline in revenue was
primarily due to the company's decision to discontinue the sale of PCs and
entry-level servers through high- volume indirect channels.
"Traditional quarterly comparisons, which include results from businesses
discontinued as part of our restructuring, tend to mask the solid operational
achievements we made during the year in turning the business around," said
NCR Chairman & CEO Lars Nyberg. "This marks the third consecutive
quarter that we have generated an operating profit. The performance of the
businesses that are the foundation for the new NCR indicates the scope of
our turnaround, which may be the fastest ever for a company of our size and
complexity."
Total orders in the fourth quarter were above the comparable period last
year. However, for its "core operations," which exclude PCs and
entry-level servers, NCR posted very good gains over the comparable
period last year. Orders for computer products showed substantial gains
while financial products, retail products and professional services all
posted growth in the quarter. For core operations geographically, fourth
quarter order increases were led by substantial gains in the Asia/Pacific
region and by very good gains in the Americas region.
Revenue in the quarter from core operations increased three percent over
the comparable period a year ago and five percent on a local currency
basis. On a product line basis, revenue for computer products increased 25
percent in the quarter and revenue for financial products increased 12
percent over year ago levels. For core operations on a geographic basis, the
Americas region had a revenue gain of nine percent over the prior year
quarter, driven primarily by financial and computer products. Revenue in
the Europe/Middle East/Africa region was down one percent compared
with last year's fourth quarter. The Asia/Pacific region reported a decline in
revenue of three percent for the quarter principally due to the strengthening
of the U. S. dollar against the Japanese yen.
Gross margins increased 7.2 percentage points in the quarter to 30.1
percent. This year-to-year increase was favorably impacted by a provision
for restructuring in the fourth quarter of 1995 and the release of restructuring
reserves in the fourth quarter of 1996. Excluding these restructuring amounts
from both periods, gross margins in the fourth quarter of 1996 reached 29.6
percent, an increase of 5.6 percentage points of revenue over the
comparable period last year.
Operating expenses in the fourth quarter were $488 million compared to
$706 million in the year ago period, a decrease of $218 million. When the
impact of restructuring is excluded from both periods, expenses declined by
$149 million, a decrease of 22 percent, or 3.9 percentage points of revenue
from the prior year period.
NCR reported operating income of $127 million in the fourth quarter
compared to an operating loss of $187 million in the year- ago period.
Excluding the impact of restructuring, operating income was $72 million in
the 1996 fourth quarter as contrasted to a loss of $135 million in 1995.
"Our performance in the fourth quarter helped to put us ahead of our
objective for the year which was for break-even operating results on flat
revenues in our core operations," said Nyberg. "The challenge for NCR is
very clear now; we must achieve growth in revenue and gross margins."
Full-Year Financial Results For the full year, NCR reported a net loss of
$109 million, or $1.07 per share, compared to a loss of $2.28 billion, or
$22.49 per share, in 1995. Revenue for the year was $6.96 billion, a
decline of 15 percent from the $8.16 billion reported in 1995. The revenue
decline was primarily due to the company's decision to discontinue the sale
of PCs and entry-level servers through high-volume indirect channels and
from businesses sold. Excluding these factors, revenue increased one
percent on a reported basis and increased three percent on a local currency
basis. Excluding restructuring and other charges;
.. the gross margin percentage improved to 28.1 percent from 21.8 percent a
year ago,
.. expenses were down $619 million, exceeding the company's target by
three percent, and
.. an operating profit of $75 million was posted in 1996 compared to an
operating loss of $722 million in 1995.
Orders for the year were below the prior year level due to the restructuring
of NCR's PC and entry-level server business. Orders for NCR's core
operations, however, showed very good gains over the prior year.
NCR ended the year in a strong financial position with $1.2 billion in cash,
debt of $76 million and shareholders' equity of $1.4 billion. As of
December 31, 1996, NCR employed 38,600 people worldwide, including
contractors.
Detailed financial information regarding NCR's fourth quarter and full- year
results is available on the Internet: http://www.ncr.com.NCR's senior
vice president and Chief Financial Officer, John Giering, will discuss the
company's financial performance in a taped broadcast. Access is available
beginning at 12:00 noon (EST) today and will run until 8:00 P.M. (EST)
tomorrow. The phone number for access to this broadcast is 402-220-6021.
The results reported today by NCR (NYSE: NCR) were its first as an
independent company following its December 31, 1996 spin-off from
AT&T.
NCR Corporation's computer systems, store automation, banking systems,
consulting services, and support services are used by customers in more
than 130 countries.
NCR CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS -
PRELIMINARY
(Dollars in millions)
Quarter Ended
Year Ended
December 31
December
31
1996 1995
1996
1995
Revenue $2,040 $2,269
$6,963 $8,162 Gross Margin
615 519 1,966 846 Operating Expenses
488 706 1,836 3,217
Operating Income 127 (187)
130 (2,371) Income/(Loss) Before Taxes
130 (252) 110 (2,416) Net Income/(Loss)
$7 $(305) $(109) $(2,280)
Net Income/(Loss) per Common Share $0.07 $(3.01)
$(1.07) $(22.49) Weighted average common and common
equivalents shares (millions) 101.4 101.4
101.4 101.4
NCR CORPORATION
CONSOLIDATED REVENUE SUMMARY -
PRELIMINARY
(Dollars in millions)
Quarter
Ended
Year Ended
December
31
December
31
1996
1995
1996
1995
Retail Systems Group $128
$128
$428 $424
Financial Systems Group 341
305
1,007 1,026
Computer Systems Group 453
363
1,398 1,078
PCs / Entry Level Servers 126
415
503 1,724
Systemedia Group 147
159
551 577
Customer Support Services 593
582
2,238 2,174
Professional Services 199
211
616 638
Data Services 30
40
123 167
Other Products 23
66
99 354
Total Revenue $2,040
$2,269
$6,963 $8,162
NCR CORPORATION
CONSOLIDATED BALANCE SHEET -
PRELIMINARY
(Dollars in millions)
At
Dec
emb
er
31
199
6
199
5
Assets
Current Assets:
Cash and Short-term Investments
$1,203 $338 Accounts Receivable, Net
1,457 1,908 Inventories
439 621 Other
Current Assets 219
451
Total Current Assets
3,318 3,318
Property, Plant and Equipment, Net
1,207 1,215 Other Assets
755 723
Total Assets
$5,280 $5,256
Liabilities and Shareholders' Equity
Current Liabilities:
Short-term Borrowings
$28 $45 Accounts Payable
352 478 Taxes Payable
18 118 Other Current
Liabilities 1,569 2,280
Total Current Liabilities
1,967 2,921
Long-term Debt
48 330 Other Long-term Liabilities
1,869 1,647
Total Liabilities
3,884 4,898 Total Shareholders' Equity
1,396 358 Total Liabilities and
Shareholders' Equity
$5,280 $5,256
SOURCE NCR Corporation /CONTACT: Robert Farkas of NCR
Corporation, 937-445-2078, or after hours, 937-434-4927, or
bob.farkasdaytonOH.ncr.com/
EMCON Implements Strategic Restructuring Plan to Re- Focus on Core
Competencies; Will Sell CAS Subsidiary and Recognize $13-$14 Million
in Related Charges; Continuing Operations Enter 1997 with Record Level
of Backlog
SAN MATEO, Calif.--Jan. 21, 1997--EMCON (NASDAQ:MCON)
announced today it is implementing a strategic restructuring plan to re-focus
the company on its core strengths in engineering, design, construction and
O&M.
The restructuring plan is intended to improve margins, enhance
competitiveness and increase shareholder value. As part of the plan, the
Company has signed a binding letter of intent to sell its laboratory division,
Columbia Analytical Services (CAS), to the management of CAS.
The sale is expected to be completed by the end of the first quarter of 1997.
The Company has also successfully negotiated the sale of two of its landfill
gas-to-energy projects which, when completed, will bring in additional cash
proceeds of $1.8 million.
EMCON will recognize pre-tax restructuring and other related charges of
between $13 and $14 million in the fourth quarter of 1996 to account for
costs relating to planned asset and goodwill write- offs, employee
severance, closure and downsizing of several offices and an increase in
reserves relating to pending litigation.
As a result of these charges, the Company anticipates reporting a pre-tax
loss for the year of between $13 and $14.5 million. The above estimates are
subject to completion of the Company's year-end audit and the expected
release of audited results in March.
Despite the year-end actions, the Company's balance sheet remains very
healthy. Management also announced that as a result of significant marketing
and proposal activity, the continuing operations enter 1997 with a hard
backlog at a record level.
The Strategic Restructuring Plan
Key to the success of the restructuring plan is the Company's decision to
divest its interest in CAS for cash, notes and other consideration valued at
approximately $7.5 million. Subject to CAS management obtaining the
necessary financing, the sale of CAS is expected to close prior to the end of
the first quarter of 1997.
Noted Eugene Herson, EMCON's Chief Executive Officer: "Although we
continue to have the highest regard for CAS and the CAS management team,
the interest of our shareholders are best served by re-focusing our resources
in the areas where we see the greatest synergies and growth potential -- our
continuing Consulting/Professional Services Division and our Construction
and Operations Division."
Within the Professional Services Division (formerly known as the
Consulting Division), the operations have been reorganized around the
Company's core competencies in three critical services areas: solid waste,
site restoration and in-plant facility services.
The new strategic focus has permitted a further streamlining of operations,
resulting in agreements to also sell two of the Company's historic landfill
gas-to-energy projects and the closure or downsizing of several under
performing offices, combined with additional reductions in force of
approximately 10 percent.
At the same time, the Company continues to invest in the growing
Operations and Construction (EOC) Division; capitalizing on the successful
integration of the Organic Waste Technologies acquisition earlier in the
year and the continuing synergies with the Professional Services Division.
The Professional Services Division and EOC enter 1997 with a combined
hard backlog of more than $80 million.
Among the largest and most exciting of these new opportunities are several
that highlight these synergies. Specifically, these include a number of
contracts to develop projects utilizing the Company's proprietary leachate
evaporation system (LES) technology, and a $14.5 million contract to
design and build an 18-acre landfill cell, complete with maintenance
facilities, as well as landfill gas and leachate conveyance, storage and
treatment systems.
In addition to the above operational actions, the Company has implemented
a number of additional steps specifically designed to enhance future
shareholder value. At the end of 1996 the Company bought out, for a
relatively modest investment, nearly all outstanding employee stock options
with an exercise price of $5.00 or more (representing the cancellation of
options for approximately 900,000 shares). Officers and directors of the
Company were not allowed to participate in this program.
Beginning in 1997, the Company also formally terminated its Employee
Stock Purchase Plan, eliminated the Company's guaranteed matching
commitment under its 401(k) plan and adjusted the current make-up of the
Board of Directors to establish a majority of outside directors.
Herson continued: "We strongly believe that these actions, taken together,
will strengthen our competitive position and allow us to respond effectively
and efficiently to opportunities within our most profitable business lines.
Continuing to reduce our cost structure will enable us to invest in areas of
highest growth potential, enhancing our position as an industry leader;
particularly as it relates to the design, construction and maintenance of solid
waste projects of every type."
EMCON is a nationally recognized firm providing services in solid waste,
site restoration and facility engineering -- including research, permitting,
design, construction and operations of related projects. Established in 1971,
EMCON operates from more than 40 offices nationwide providing services
to private and public sector clients in the United States and abroad.
This release contains forward-looking statements regarding continued
growth, ongoing success with the restructuring program, and potential
growth prospects. These statements involve risks and uncertainties,
including but not limited to success of management and demand for
environmental services. Management reminds the reader that market trends
are always subject to changes which could adversely affect expected
growth. For a complete discussion of associated risks, please refer to the
Company's recent forms 10-K and 10-Q.
CONTACT: EMCON, San Mateo R. Michael Momboisse, 415/375-1622 or
Financial Relations Board Catherine Roberts (investors) or Lisa Horn
Chainey (general info), 415/986-1591