FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
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SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 1995
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
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SECURITIES ACT OF 1934
For the transition period from to
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Commission File Number 033-17921
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Air & Water Technologies Corporation
__________________________________________________________
(Exact Name of Registrant as Specified in its Charter)
Delaware 13-3418759
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(State or other Jurisdiction (I.R.S. Employer Identification
of Corporation) Number)
U.S. Highway 22 West and Station Road, Branchburg, NJ 08876 ---------------
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(Address of Principal Executive Offices)
Telephone: (908) 685-4600
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No .
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Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of July 31, 1995.
Class A
$.001 Par Value Common Stock 32,018,004
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(Title of Class) (Number of Shares
Outstanding)
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
AIR & WATER TECHNOLOGIES CORPORATION
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CONSOLIDATED BALANCE SHEETS AS OF JULY 31, 1995 AND OCTOBER 31, 1994
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(in thousands , except share data)
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[CAPTION]
ASSETS 1995 1994
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(unaudited)
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CURRENT ASSETS:
Cash and cash equivalents $ 9,060 $ 11,021
Accounts receivable, net 87,743 80,534
Costs and estimated earnings in excess of
billings on uncompleted contracts 53,332 59,250
Inventories 17,426 20,405
Prepaid expenses and other current assets 9,228 7,281
Net current assets of discontinued operations 1,449 9,825
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Total current assets 178,238 188,316
PROPERTY, PLANT AND EQUIPMENT, net 40,370 43,013
INVESTMENTS IN ENVIRONMENTAL TREATMENT FACILITIES 22,745 23,343
DEFERRED DEBT ISSUANCE COSTS 3,379 3,507
GOODWILL 278,622 283,638
NET NON-CURRENT ASSETS OF DISCONTINUED OPERATIONS 883 6,295
OTHER ASSETS 36,624 54,826
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Total assets $560,861 $602,938
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term borrowings $ - $ 29,000
Current installments of long-term debt 402 533
Accounts payable 42,710 50,988
Accrued expenses 109,149 126,158
Billings in excess of costs and estimated earnings on
uncompleted contracts 24,819 30,840
Income taxes payable 2,800 2,003
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Total current liabilities 179,880 239,522
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NON-CURRENT LIABILITIES 6,700 42,700
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LONG-TERM DEBT 313,206 245,984
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MINORITY INTEREST IN AFFILIATES - 351
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COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, par value $.01 authorized, 2,500,000 shares;issued
1,200,000 shares in 1994; liquidation
value $60,000 12 12
Common stock par value $.001 authorized 100,000,000 shares;
issued 32,107,906 shares in 1995 and 1994 32 32
Additional paid-in capital 427,028 427,028
Accumulated deficit (365,924) (352,580)
Common stock in treasury, at cost (108) (108)
Cumulative currency translation adjustment 35 (3)
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Total stockholders' equity 61,075 74,381
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Total liabilities and stockholders' equity $560,861 $602,938
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The accompanying notes are an integral part of these statements.
AIR & WATER TECHNOLOGIES CORPORATION
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CONSOLIDATED STATEMENTS OF OPERATIONS
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FOR THE THREE AND NINE MONTH PERIODS ENDING JULY 31, 1995 AND 1994
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(in thousands, except share data)
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(unaudited)
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Three Months Nine Months
Ending July 31 Ending July 31
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1995 1994 1995 1994
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SALES $146,174 $135,774 $450,457 $378,184
COST OF SALES 103,704 104,310 332,929 301,356
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Gross margin 42,470 31,464 117,528 76,828
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 33,525 33,647 102,196 97,209
AMORTIZATION OF GOODWILL 2,060 1,873 6,166 5,293
UNUSUAL CHARGES - 107,000 - 121,500
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Operating income (loss) 6,885 (111,056) 9,166 (147,174)
INTEREST EXPENSE (6,263) (5,974) (18,310) (18,950)
INTEREST INCOME 315 183 647 825
OTHER EXPENSE, NET (228) (1,208) (1,110) (2,539)
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Income (loss) from continuing
operations before income taxes
and minority interest 709 (118,055) (9,607) (167,838)
INCOME TAX PROVISION 604 716 1,164 757
MINORITY INTEREST - 20 98 (239)
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Income (loss) from continuing
operations 105 (118,791) (10,869) (168,356)
LOSS FROM DISCONTINUED OPERATIONS - (1,010) - (42,589)
EXTRAORDINARY ITEM - (8,000) - (8,000)
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NET INCOME (LOSS) $ 105 $(127,801) $(10,869) $(218,945)
======= ======= ======= =======
LOSS PER COMMON SHARE:
(AFTER PREFERRED STOCK DIVIDEND)
Continuing operations $ (.02) $ (4.15) $ (.42) $ (6.44)
Discontinued operations - (.04) - (1.63)
Extraordinary item - (.28) - (.30)
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LOSS PER COMMON SHARE $ (.02) $ (4.47) $ (.42) $ (8.37)
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Weighted average number of
shares outstanding 32,018 28,710 32,018 26,210
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The accompanying notes are an integral part of these statements.
AIR & WATER TECHNOLOGIES CORPORATION
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CONSOLIDATED STATEMENTS OF CASH FLOWS
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FOR THE NINE MONTH PERIODS ENDING JULY 31, 1995 AND 1994
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(in thousands)
(unaudited)
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1995 1994
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(10,869) $(218,945)
Adjustments to reconcile net income (loss)
to net cash provided by
(used for) continuing operations -
Discontinued operations - 42,589
Depreciation and amortization 13,602 13,606
Minority interest 98 (239)
Other, net (438) -
Extraordinary item - 8,000
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2,393 (154,989)
Changes in assets and liabilities -
(Increase) decrease in assets -
Accounts receivable 9,084 20,079
Costs and estimated earnings in excess
of billings on uncompleted contracts 5,804 15,318
Inventories (222) 1,856
Prepaid expenses and other current assets (1,707) 7,724
Other assets (3,352) 2,635
Increase (decrease) in liabilities -
Accounts payable (5,398) (11,371)
Accrued expenses (21,841) 57,144
Billings in excess of costs and estimated
earnings on uncompleted contracts (5,849) (6,753)
Income taxes 944 (2,950)
Other liabilities - 28,000
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Net cash used for continuing operations (20,144) (43,307)
Net cash provided by (used for)
discontinued operations 861 (20,211)
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Net cash used for operating activities (19,283) (63,518)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of business 12,962 -
Capital expenditures (5,140) (2,808)
Investment in environmental treatment facilities 598 304
Other, net (4,387) (2,149)
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Net cash provided by (used for)
investing activities 4,033 (4,653)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common and
preferred stock - 64,598
Proceeds from issuance of notes payable and
long-term debt - 125,000
Payment of notes payable and long-term debt (532) (109,968)
Net borrowings under credit facilities 38,500 (13,471)
Accounts receivable sold (repurchased) (20,000) -
Cash dividends paid (2,475) (145)
Other, net (2,204) 573
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Net cash provided by financing activities 13,289 66,587
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Net decrease in cash and cash equivalents (1,961) (1,584)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 11,021 7,624
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CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 9,060 $ 6,040
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SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest $ 19,599 $ 21,217
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The accompanying notes are an integral part of these statements.
AIR & WATER TECHNOLOGIES CORPORATION
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NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
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JULY 31, 1995
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(unaudited)
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The interim consolidated financial statements and the
following notes should be read in conjunction with the
notes to the consolidated
financial statements of Air & Water Technologies
Corporation and its consolidated subsidiaries (the "Company")
as included in its Form 10-K filed with the Securities and
Exchange Commission for the fiscal year ended October 31, 1994. The
interim information reflects all adjustments, including normal
recurring accruals, which are, in the opinion of
management, necessary for a fair presentation of the results
for the interim period. Results for the interim period
are not necessarily indicative of results to be expected for
the full year.
(1) New Credit Facility:
-------------------
On March 10, 1995, the Company entered into a new three
year $130 million Senior Secured Credit Facility (the
"New Credit Facility") with First Chicago and Societe
Generale acting as co-agents for a syndicate which
includes seven additional banks. Of the total
commitment, borrowings are limited to the sum of a
percentage of certain eligible receivables, inventories,
net property, plant and equipment and costs and
estimated earnings in excess of billings and bear
interest at LIBOR (currently 6%), as defined, plus
.725% or at a defined bank rate approximating
prime
(currently 8.75). Under the New Credit Facility at July
31, 1995 the Company had outstanding borrowings of $67.5
million (capacity of $75.3 million) and issued and
outstanding letters of credit of $17.4 million
(capacity of $54.7 million).
(2) Commitments and Contingencies:
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On May 26, 1995, Metcalf & Eddy settled the litigation
with the Puerto Rico Aqueduct and Sewer Authority (PRASA)
that it initiated in September 1990. Pursuant to the
terms of the settlement, Metcalf & Eddy will receive
aggregate payments of $17.5 million, plus interest.
Metcalf & Eddy received payment of $4.5 million on June
26, 1995, at which time a Stipulation of Dismissal with
Prejudice was filed with the United States District
Court for the District of Puerto Rico formally
terminating the lawsuit. Metcalf & Eddy also
received two $6.5 million negotiable promissory notes
which bear interest at market rates and mature in May
1998 and August 2000, respectively. On September 1,
1995, Metcalf & Eddy sold the two notes and received net
proceeds of $12.8 million of cash, after applicable fees
and expenses.
The Company and its subsidiaries are parties to
various other legal actions arising in the normal course
of their businesses, some of which involve claims for
substantial sums. The Company believes that the
disposition of such actions, individually or in the
aggregate, will not have a material adverse effect
on the consolidated financial position or results of
operations of the Company taken as a whole. Reference
is made to the Company's quarterly report on Form 10-Q
for the period ended January 31, 1995 for information
regarding a demand by Texas Electric Utilities Company
against the Company and certain subsidiaries for
alleged damages.
(3) Reclassifications:
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Certain reclassifications have been made to conform the
1994 consolidated financial statements to the 1995
presentation.
ITEM II.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
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FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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The following information should be read in conjunction with
the unaudited interim consolidated financial statements and the
notes thereto included in this Quarterly Report and the
audited financial statements and Management's Discussion and
Analysis of Financial Condition and Results of Operations
contained in the Company's Form 10-K filed with the
Securities and Exchange Commission for the fiscal year ended
October 31, 1994.
Results of Operations
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Summarized below is certain financial information relating to the
core segments of the Company (in thousands):
Three Months Ended July 31 Nine Months Ended July 31
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1995 1994 1995 1994
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Sales:
Research - Cottrell $ 50,174 $ 58,144 $163,553 $161,427
Metcalf & Eddy 53,580 51,365 160,353 163,948
PSG (Contract Operations) 42,321 24,756 123,920 8,323
Other and Eliminations 99 1,509 2,631 4,486
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$146,174 $135,774 $450,457 $378,184
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Cost of Sales:
Research - Cottrell $ 37,119 $ 49,808 $129,145 $151,486
Metcalf & Eddy 30,686 31,413 96,948 105,786
PSG (Contract Operations 36,451 22,221 106,232 41,666
Other and Eliminations (552) 868 604 2,418
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$103,704 $104,310 $332,929 $301,356
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Selling, General and Administrative Expenses:
Research - Cottrell $ 9,392 $ 10,075 $ 28,319 $ 31,056
Metcalf & Eddy 18,210 17,866 55,013 52,386
PSG (Contract Operations) 3,161 2,325 9,811 3,914
Other and Eliminations 705 634 2,073 1,967
Corporate (unallocated) 2,057 2,747 6,980 7,886
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$ 33,525 $ 33,647 $102,196 $ 97,209
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Amortization of Goodwill:
Research - Cottrell $ 809 $ 817 $ 2,436 $ 2,449
Metcalf & Eddy 774 765 2,321 2,321
PSG (Contract Operations) 477 291 1,409 523
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$ 2,060 $ 1,873 $ 6,166 $ 5,293
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Unusual Charges:
Research - Cottrell $ - $ 63,800 $ - $71,800
Metcalf & Eddy - 30,800 - 30,800
PSG (Contract Operations) - 1,000 - 1,000
Other - - - 4,200
Corporate - 11,400 - 13,700
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$ - $107,000 $ - $121,500
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Operating Income (Loss):
Research - Cottrell $ 2,854 $(66,356) $ 3,653 $(95,364)
Metcalf & Eddy 3,910 (29,479) 6,071 (27,345)
PSG (Contract Operations) 2,232 (1,081) 6,468 1,220
Other (54) 7 (46) (4,099)
Corporate (2,057) (14,147) (6,980) (21,586)
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$ 6,885 $(111,056) $ 9,166 $(147,174)
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Research-Cottrell
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Excluding the impact of the prior period unusual charges
discussed below, operating income increased by $5.4
million and $27.2 million during the three and nine
month periods ended July 31, 1995. The increase in these
periods resulted from higher gross margins of $4.7
million and $24.5 million primarily due to additional
costs required in the prior periods to complete
particulate and acid gas control systems, chimneys
and emissions monitoring systems($1.4 million and
$15.2 million, respectively) as well as higher gross
margins within the international and cooling tower
operations primarily due to higher sales volumes and to
a lesser extent improved execution ($2.6 million and
$6.6 million, respectively). Also impacting the favorable
results were lower SGA ($.7 million and $2.7
million, respectively) due to cost reductions in
substantially all product lines primarily within the
particulate and acid gas control equipment, emissions
monitoring systems and cooling tower product lines which
were only partially off-set with higher costs within the
international activities.
Sales decreased by $8.0 million and increased by
$2.1 million during the three and nine month periods
ended July 31, 1995, respectively. The changes in these periods
resulted from higher international sales of
international particulate and acid gas control systems
due to better geographical market penetration in Europe
and the Far East ($6.3 million and $16.7 million,
respectively) and higher sales from the cooling tower
operations driven by higher orders ($4.7 million and
$8.0 million, respectively). Also
contributing to the increase in the nine month period
were higher sales of VOC control systems due to higher
demands driven by the requirements under the 1990 Clean
Air Act Amendments ($7.9 million). Partially
offsetting these increases during the periods were
lower sales of emission monitors ($16.6 million and
$19.1 million, respectively) and chimney products and
services ($6.2 million and $12.2 million,
respectively) primarily due to the timing of the demand
requirements under the 1990 Clean Air Act Amendments.
In light of improvements in its current market climate
and anticipated financial performance, management has
decided to retain the Company's cooling tower and
heat transfer operations. The Company had previously
contemplated selling
these businesses and had recorded a charge for the
difference between their net carrying value and
management's estimate of the anticipated net sales
proceeds. The Company continues to experience
difficulties in resolving software issues related to
its emissions monitoring systems
previously shipped to utilities. The software issues
are creating problems in collecting receivables due to
claims and back-charges from certain utilities. Also,
the Company will incur additional software, warranty and
project closeout costs in resolving this situation.
Management believes that the previously provided
reserves for the Company's cooling tower, heat
transfer and emissions monitoring operations are
adequate in the aggregate, therefore these issues have
not had a significant effect on the Company's
consolidated financial position or results of its
operations, taken as a whole as of July 31, 1995.
The unusual charges reflected in the prior periods
were primarily related to certain contemplated business
divestitures ($36.0 million), costs and asset
writedowns associated primarily with warranty and other
claims in the electrostatic precipitators and
continuous emissions
monitoring product lines ($22.5 million), write-off
of substantially all of the capitalized software
costs reflecting a shift in focus to a standard
industrial continuous emission monitor ($9.0 million) and
other charges including lease terminations, litigation
costs, insurance claims and severance ($4.3 million).
Metcalf & Eddy
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Excluding the impact of the prior period unusual
charges discussed below, the operating income increased
by $2.6 million during the three and nine month periods
ended July 31, 1995. The improved performance
resulted from the incremental margin related to the
increased labor based sales and other favorable mix
impacts as well as improved execution on several
projects as a result of obtaining contractual
amendments and lower than previously anticipated direct
project costs. Partially off-setting the improved
margins were higher SG&A ($.3 million and $2.6
million). These changes were primarily due to
increased bid and proposal and other related selling
costs as well as higher fringe benefits which were
partially off-set by various cost reductions including
facility related costs.
Sales increased by $2.2 million and decreased by
$3.6 million during the three and nine months ended July
31, 1995 primarily due to changes in pass-through
sales volume, Peace Shield, representing direct project
costs passed through to the client. The higher margin labor
based sales increased by $2.8 million and $5.3 million
during the periods.
The unusual charges reflected in the prior periods
were primarily related to the PRASA litigation ($11.2
million), estimated costs to settle pending litigation ($10.6
million), the termination of certain leases and closing
of certain facilities ($6.1 million) and other items
including insurance claims and severance ($2.9 million).
PSG (Contract Operations)
-------------------------
Excluding the impact of a $1.0 million prior period
unusual charge related to asset valuations, and the
proforma operating income impact assuming the June
1994 PSG acquisition occurred on November 1, 1993 ($.4 million
and $1.5 million, respectively) operating income
increased during the three and nine month periods ended
July 31, 1995 by $1.9 million and $2.8 million. The
increase in operating income during the periods were
primarily due to new business development which resulted
in additional service contracts and cost reductions
attained in connection with the
consolidation of the Metcalf & Eddy Services
and Professional Services Group operations.
Sales increased by $17.6 million and $75.6 million
during the three and nine month periods ended July 31,
1995. The increases during the periods are attributable to
the aforementioned proforma sales impact of the PSG
acquisition ($10.9 million and $55.6 million,
respectively) and new business development which
resulted in additional service contract revenues
($6.7 million and $20.0 million, respectively).
Corporate and Other
-------------------
The corporate (unallocated) selling, general and
administrative expenses decreased by $.7 million and
$.9 million during the three and nine month periods ended
July 31, 1995 due to cost reduction efforts,
including unallocated promotional and facility related
costs.
The unusual charges reflected in the prior periods
were primarily related to severance ($8.3 million),
certain contemplated business divestitures ($6.5) and
other charges including lease terminations and pending
litigation costs ($3.1). Additional charges reflected
in the prior period include losses from the
discontinued asbestos abatement operations ($38.2
million) and PAMCO operations ($4.4 million) and an
$8.0 million extraordinary loss on the early retirement
of the 11.18% Senior Notes with the Prudential Insurance
Company of America.
Financial Condition
-------------------
Cash used by continuing operations for the nine month
period ended July 31, 1995 amounted to $20.1 million
primarily due to the emissions monitoring operations and
cash outlays for reserves established in connection with
the unusual charges recorded in the prior year. The
Company also utilized $8.9 million of cash for capital
expenditures, investments in environmental treatment
facilities, software development and other investment
activities during the period. These cash requirements
were funded principally through proceeds from the sale
of Pamco and borrowings under the Company's Credit
Facilities discussed below.
On March 10, 1995, the Company entered into a new three-
year $130 million Senior Secured Credit Facility (the "New
Credit Facility") with First Chicago and Societe Generale
acting as co-agents for a syndicate which includes seven
additional banks. The New Credit Facility replaces at a
reduced cost the previous $70 million Credit Agreement
(which provided for $40 million of borrowings and $30
million of letters of credit) and the $20 million
Accounts Receivable Purchase
Agreement (which was fully utilized at October 31,
1994). It is primarily designed to finance working
capital requirements and allow for the issuance of
letters of credit, both subject to limitations and
secured by a first security interest in substantially all
of the assets of the Company.
Of the total commitment, borrowings are limited to the
sum of a percentage of certain eligible receivables,
inventories, net property, plant and equipment and costs
and estimated earnings in excess of billings and bear
interest at LIBOR (currently 6%), as defined, plus .725%
or at a defined bank rate approximating prime
(currently 8.75%). The New Credit Facility also allows
for certain additional borrowings, including, among other
things, project financing and foreign borrowing
facilities, subject to limitations. The New Credit
Facility contains certain financial and other restrictive
covenants with respect to the Company,
including, among other things, the maintenance of
certain financial ratios, and restrictions on the
incurrence of additional indebtedness, acquisitions, the
sale of assets and the payment of dividends and
the repurchase of subordinated debt. In addition, the agreement requires
CGE to maintain a minimum 40% ownership interest in the
Company.
Under the New Credit Facility at July 31, 1995 the
Company had outstanding borrowings of $67.5 million
(capacity of $75.3 million) and issued and outstanding
letters of credit of $17.4 million (capacity of $54.7
million). The Company expects its operations to continue
to use cash during the next three months due to cash
requirements for its emissions monitoring operations
and cash outlays for reserves
established in connection with the prior year's
unusual charges. The Company believes that it has the
ability to manage its cash needs and is currently
continuing its efforts to control its expenses as well
as reducing its working capital requirements.
Proceeds of $13.0 million were received through
September 1995 related to the
Company's sale of substantially all of the net assets of
its Pamco operations. Further negotiations are continuing
to be pursued with potential buyers of certain Company
businesses no longer meeting strategic objectives. While
the Company currently anticipates additional net proceeds of
approximately $3.0 million upon the sale of those
businesses no assurance can be given that such
negotiations will result in the successful disposition
of any of these businesses. On September 1, 1995,
Metcalf & Eddy sold the two notes obtained in
conjunction with the PRASA settlement and received
net proceeds of $12.8 million of cash, after
applicable fees and expenses.
The businesses of the Company have not historically
required significant ongoing capital expenditures. For
the nine months ended July 31, 1995 and the years ended
October 31, 1994 and 1993 total capital expenditures
were $5,140,000, $5,523,000 and $3,880,000, respectively.
At July 31, 1995, the Company had no material outstanding
purchase commitments for capital expenditures.
Historically, AWT and its subsidiaries obtained bid
and performance bonds pursuant to agreements with
Reliance Insurance Company and certain of its affiliates
(collectively, "Reliance"). On June 27, 1995, AWT and
its subsidiaries entered into an agreement with United States
Fidelity and Guaranty Company and certain of its
affiliates (collectively, "USF&G") pursuant to which USF&G
also agreed to issue bid and performance bonds on behalf
of AWT and its subsidiaries. In subsequent
discussions between representatives of AWT and
Reliance, Reliance indicated that it did not wish to act
as a co-surety or shared-surety with respect to AWT's
bonding requirements. As a result of such decision by
Reliance, AWT anticipates that its bonding
requirements will be provided by USF&G in the
foreseeable future.
PART II. OTHER INFORMATION
ITEM I. Legal Proceedings
Reference is made to Part I, Item I (Note 2 to the
Interim Consolidated Financial Statements) for a
discussion of the resolution of the Company's lawsuit
against the Puerto Rico Aqueduct and Sewer Authority.
Reference is made to the Company's quarterly report on Form 10-
Q for the three-months ended January 31, 1995 for
information regarding a demand by Texas Electric Utilities
Company against the Company and certain subsidiaries for
alleged damages.
The Company and its subsidiaries are parties to various
other legal actions arising in the normal course of their
businesses, some of which involve claims for substantial
sums. The Company believes that the disposition of such
actions, individually or in the aggregate, will not have a
material adverse effect on the consolidated financial position
or results of operations of the Company taken as a whole.
ITEM 2-5
There are no reportable items under Part II, items 2 through 5.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
Exhibit 11. Computation of per share earnings.
Exhibit 27. Financial Data Supplement
(b) On June 2, 1995, the Company filed a report on Form 8-K
reporting the settlement of the PRASA litigation. See Part
I, Item I -- Note 2 to the Interim Consolidated
Financial Statements.
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf, by the undersigned thereunto duly authorized.
AIR & WATER TECHNOLOGIES CORPORATION
-----------------------------------
(registrant)
Date September 13, 1995 /s/ Alain Brunais
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Alain Brunais
Chief Financial Officer