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Safety-Kleen Corp.
1000 N. Randall Road
Elgin, IL 60123
(847) 697-8460
For further information:
FOR IMMEDIATE RELEASE CONTACT: MAUREEN FISK
(847) 468-2452
SAFETY-KLEEN CORP. ANNOUNCES
FIRST QUARTER 1997 RESULTS
Elgin, Illinois -- April 11, 1997 -- Safety-Kleen Corp. (NYSE/SK) today
announced results for the first quarter ended March 22, 1997. Consolidated
revenue for the period was $220.2 million, up 9.2% compared with $201.7 million
for the first quarter in 1996. Net earnings were $11.8 million, or $.20 per
share, compared with $13.1 million, or $0.23 per share reported in the same
quarter one year ago.
Revenue from the Company's Automotive/Retail Repair Services, which
includes its newly-introduced Vacuum Service, was up 9% compared with the prior
year, while Industrial Services revenue grew 10% . The Company's tolling
operations reported stronger first quarter 1997 results, while in Europe,
revenue was up 4% with solid improvement in after tax earnings. President and
Chief Executive Officer, John G. Johnson, Jr., noted, "We are pleased to
announce that our established businesses performed within our expectations from
a revenue standpoint. We remain confident in our ability to produce top line
revenue growth but also recognize our earnings performance will be adversely
impacted in view of the unique oil situation as well as the costs associated
with starting and growing several new business opportunities."
As expected and announced in a Company release issued March 11, 1997, the
Company's Oil Recovery Services ("ORS") earnings decreased reflecting the
continued depressed pricing in the lube oil market. ORS reported a revenue
increase of 8% compared with one year ago, however it posted an after tax loss
of approximately $730,000 compared to after tax earnings of $860,000 reported in
the first quarter of 1996. The current trend of lube oil pricing has impacted
the profitability of the approximately 60 million gallons of re-refined base oil
that it sells annually. Safety-Kleen sold approximately 12 million gallons of
re-refined base lube in the first quarter of 1997. Johnson added, "The average
selling price for re-refined lube oil in the first quarter of 1997 was $0.865
per gallon, compared with $0.994 per gallon in the first quarter of 1996. We
believe that there is still excess capacity in the market and therefore do not
expect prices to return to historic levels in the near future," Johnson said.
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SAFETY-KLEEN CORP.
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Johnson further added, "Our new businesses are producing consistent top
line growth for the Company. We are on an aggressive rollout of our Vacuum
Service program which reported revenue of just under $3 million in the first
quarter of 1997. Our Imaging Service also continues to show revenue growth
through the addition of customers. We expect this business to improve from a
profitability standpoint as the efficiency of our Branch Imaging Specialists
increases. As each of our new businesses progress from the startup phase, they
will make measurable contributions to the earnings line," Johnson concluded.
Safety-Kleen is an environmental and industrial service company
dedicated to helping businesses recycle and process their waste streams. Its
stock is traded on the New York Stock Exchange under the symbol "SK". For
further information, contact Safety-Kleen via e-mail:
FINANCE@SAFETY-KLEEN.COM.
PRIVATE SECURITIES LITIGATION REFORM ACT DISCLOSURE
This press release contains various forward-looking statements, including
revenue and operating projections. There are many factors that could cause
actual results to differ materially, such as: adoption of new environmental laws
and regulations and changes in the ways such laws and regulations are
interpreted and enforced; general business conditions, such as the level of
competition, changes in demand for the Company's services and the strength of
the economy in general; and prices for petroleum based products.
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CONSOLIDATED STATEMENT OF EARNINGS
(thousands, except per share amounts)
TWELVE
WEEKS ENDED
Mar. 22,1997 Mar. 23, 1996
Revenue
North America
Automotive/Retail Repair Services $ 59,317 $ 54,609
Industrial Services
Parts Cleaner ................. 31,029 28,763
Fluid Recovery ................ 34,357 30,448
Total Industrial .............. 65,386 59,211
Oil Recovery Services ........... 32,858 30,399
Other ........................... 37,249 33,034
Total North America ............. 194,810 177,253
Europe ............................. 25,420 24,470
Consolidated Revenue ................. 220,230 201,723
Operating costs and expenses ......... 164,084 145,823
Selling and administrative expenses .. 32,575 29,728
Operating income ..................... 23,571 26,172
Interest income ...................... 227 180
Interest expense ..................... (4,361) (4,264)
Earnings before income taxes ......... 19,437 22,088
Income taxes ......................... 7,599 9,011
Net earnings ......................... $ 11,838 $ 13,077
Earnings per common and common
equivalent share ................... $ 0.20 $ 0.23
Average number of common and common
equivalent shares outstanding ...... 58,420 57,903
Cash dividends per common share ...... $ 0.09 $ 0.09
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1. The Company's interim reporting periods are twelve weeks each
for the first three reporting periods of the year
and seventeen and sixteen weeks for the fourth
interim period of 1997 and 1996, respectively.