[LETTERHEAD OF OGDEN CORPORATION]
EXHIBIT A
CONTACT: Adam Weiner
Eric Berman
David Lilly
Kekst and Company
212-521-4800
or:
Raymond Dombrowski
Ogden Corporation
212-868-6000
FOR IMMEDIATE RELEASE
OGDEN CORPORATION REPORTS RESULTS FOR FIRST QUARTER 2000
-- RECURRING BASE EBIT FROM CONTINUING ENERGY OPERATIONS IS $14.9 MILLION--
NEW YORK, MAY 17, 2000 - Ogden Corporation (NYSE: OG) today reported results for
the first quarter ended March 31, 2000. Recurring base earnings before interest
and taxes (EBIT) from the Company's continuing Energy operations were $14.9
million for the quarter. Including losses from discontinued operations of $25.3
million, the Company had a net loss of $29.5 million, or $0.59 per diluted
share. Consolidated revenues from Energy operations for the three months ended
March 31, 2000, were $222.2 million. Consolidated total revenues from continuing
operations for the three months ended March 31, 2000, were $236.0 million.
"The performance of our Energy business exceeded expectations by approximately
$2 million in the first quarter and is consistent with our overall expectations
of $95 million in recurring base EBIT for the full year," said Scott G. Mackin,
President and Chief Executive Officer of Ogden Corporation.
As previously announced, Ogden is pursuing the disposition of its non-core
Aviation and Entertainment assets, as well as certain other non-core businesses,
to ensure a solid financial platform for its Energy business. The Aviation and
Entertainment business segments are being reported as discontinued operations.
The loss from discontinued operations of $25.3 million includes an Entertainment
business loss before interest and taxes of $31.3 million, reflecting an $18.7
million accrual for operating losses estimated to be incurred until dates of
disposition of the businesses, $2.8 million of start-up costs at water and theme
parks and $5.2 million in increased overhead costs mainly associated with
discontinuance of the Entertainment businesses.
FIRST QUARTER RESULTS FOR ENERGY
For the 2000 first quarter, Ogden reported EBIT from its Energy business of
$11.9 million, on revenues of $222.2 million, compared to EBIT for the
comparable period in the prior year of $18.1 million on revenues of $217.1
million. The 2000 first quarter EBIT included $3.5 million
in losses at its Ogden Environmental and Energy Services (OEES) subsidiary and
$1.8 million in additional depreciation in connection with shortened estimated
useful lives of certain air pollution control equipment resulting from the Clean
Air Act Amendments. In addition, the Company recorded $2.3 million in
nonrecurring income associated with its Waste to Energy business in the 2000
first quarter. As previously announced, the Company is currently winding down
OEES' construction operations and is in the process of exploring sales
possibilities for its consulting operations. Results for the Company's Energy
operations for the 1999 first quarter included $3.1 million in losses at OEES, a
one-time gain of $4.9 million from the sale of the Company's interest in an
independent power production (IPP) joint venture in Maine and $1.6 million in
nonrecurring income associated with the settlement of a domestic IPP contract.
Adjusting for these items, the recurring base Energy EBIT for the 2000 first
quarter was $14.9 million, compared to $14.7 million for the comparable period
of 1999.
Revenues from continuing Energy operations for the first quarter 2000 reflect an
increase of $5.1 million over the first quarter 1999. The increase in Energy
segment revenues includes $12.9 million in new revenues associated with plants
in Thailand and The Philippines that commenced operations for Ogden subsequent
to the first quarter of 1999, $4.3 million due to the June 1999 acquisition of
an additional 50% interest in a power plant the Company operates in California,
and $5.4 million in increased revenues at several waste-to-energy facilities
primarily attributed to improved performance and pricing. These increases were
offset in part by reduced construction revenues from Waste to Energy and OEES,
and the one-time gain of $4.9 million in 1999 from the sale of the Maine IPP
joint venture mentioned above.
NON-CORE ASSET SALES
Mr. Mackin continued, "We have made significant progress with the disposition of
our major non-core Entertainment businesses as well as certain Aviation
privatization assets, in addition to other miscellaneous non-core assets. We
expect to close the previously announced Food and Beverage Concessions and Venue
Management division transaction within the next thirty days. At this point, it
appears likely that the two remaining Entertainment venue management sales,
Anaheim and Corel, could extend into the fall. The water and theme parks
division transaction closed last Friday for all assets except for the Jazzland
Theme Park. Jazzland remains on schedule for its grand opening this weekend, and
we anticipate closing that transaction within the next thirty days. In addition,
we have also recently completed transactions related to our Argentine and
Dominican airport privatizations. We have received second round bids for our
Aviation services division, and we are currently evaluating how to maximize the
sales proceeds of these assets."
OUTLOOK
Mr. Mackin said, "In sum, we are very pleased that our first quarter Energy
results are in line with expectations for the year. Additionally, our
large-scale, coal-fired Quezon facility in The Philippines is now in acceptance
testing and performing well, which indicates that it will soon be in commercial
operation and contributing to the growth of our earnings. We are also pleased
with the Entertainment and Aviation privatization asset sales that have occurred
so far, and we look forward to completing the sales of the remaining Aviation
and Entertainment assets. During this transition period, we will continue to
invest in Energy projects to which we have
committed and also develop our pipeline of opportunities. However, at this time
it appears that new Energy investments may depend upon our ability to bring
additional sources of funds into the Company until we complete the sales
process. The Company remains focused upon completing these asset sales in as
timely a manner as possible."
* * *
On September 17, 1999, Ogden announced its intent to sell its Entertainment and
Aviation businesses to focus exclusively on its role as a leading energy
company.
Ogden Energy group is a global developer/owner and operator of independent power
projects and provides related infrastructure services.
Additional information about Ogden can be obtained via the Internet at
www.ogdencorp.com, or through our automated information system at (888)
643-3612.
Any statements in this communication which may be considered to be "forward
looking statements," as that term is defined in the Private Securities
Litigation Reform Act of 1995, are subject to certain risk and uncertainties.
The factors that could cause actual results to differ materially from those
suggested by any such statements include, but are not limited to, those
discussed or identified from time to time in the Company's public filings with
the Securities and Exchange Commission and more generally, general economic
conditions, including changes in interest rates and the performance of the
financial markets; changes in domestic and foreign laws, regulations, and taxes;
changes in competition and pricing environments; and regional or general changes
in asset valuations.
- Tables Follow -
OGDEN CORPORATION
EARNINGS
(000'S OMITTED)
THREE MONTHS ENDED MARCH 31,
---------------------------
2000 1999
--------- -----------
ENERGY SEGMENT:
REVENUE
Energy Operations $ 191,624 $ 179,293
OEES 30,544 37,775
--------- -----------
TOTAL ENERGY REVENUE 222,168 217,068
--------- -----------
DIRECT COSTS
Energy Operations 164,294 148,528
OEES 31,799 37,342
--------- -----------
TOTAL ENERGY DIRECT COSTS 196,093 185,870
--------- -----------
GROSS MARGIN
Energy Operations 27,330 30,765
OEES (1,255) 433
--------- -----------
TOTAL ENERGY GROSS MARGIN 26,075 31,198
% of Revenue 11.74% 14.37%
S.G.& A.
Energy Operations 13,567 10,792
OEES 2,290 3,592
--------- -----------
TOTAL ENERGY S.G.& A. 15,857 14,384
--------- -----------
ENERGY OPERATING INCOME 10,218 16,814
% of Revenue 4.60% 7.75%
ENERGY EQUITY INCOME 3,010 3,470
Minority interests (1,324) (2,216)
--------- -----------
ENERGY EBIT 11,904 18,068
OTHER SEGMENT:
Revenue 13,838 17,756
Operating income (loss) (2,611) (1,275)
Equity income -- --
--------- -----------
Unallocated corporate overhead (5,585) (3,857)
Interest-Net (8,485) (5,873)
--------- -----------
Pre-tax income (loss) (4,777) 7,063
Income taxes 603 (3,004)
--------- -----------
INCOME (LOSS) FROM CONTINUING OPERATIONS (4,174) 4,059
--------- -----------
OGDEN CORPORATION
EARNINGS
(000'S OMITTED)
THREE MONTHS ENDED MARCH 31,
----------------------------
2000 1999
--------- ----------
DISCONTINUED OPERATIONS
EBIT-Aviation $ (641) $ 10,648
EBIT-Entertainment (31,250) 1,000
Interest-Net (1,096) (544)
Income taxes 7,677 (4,642)
--------- ----------
INCOME (LOSS) FROM DISCONTINUED OPERATIONS (25,310) 6,462
Cumulative effect of change in accounting principle -- (3,820)
--------- ----------
COMPANY NET INCOME (LOSS) $ (29,484) $ 6,701
========= ==========
EPS-Continuing operations
Basic $ (0.08) $ 0.08
Fully Diluted $ (0.08) $ 0.08
EPS-Discontinued operations
Basic $ (0.51) $ 0.13
Fully Diluted $ (0.51) $ 0.13
EPS-Cumulative effect of change in accounting principle
Basic $ (0.08)
Fully Diluted $ (0.08)