SMITH PRESS RELEASE
ENVIRONMENTAL TECHNOLOGIES CORPORATION
____________________________________________________________________________
FOR IMMEDIATE RELEASE
For: Contact:
Smith Environmental Technologies Corporation E. Brian Smith
Two Galleria Tower Chief Executive Officer
13455 Noel Road, Suite 1500 (214) 770-1800
Dallas, Texas 75240
John W. Poling
Vice President - Treasurer
(214) 770-0223
SMITH ENVIRONMENTAL TECHNOLOGIES CORPORATION
ANNOUNCES IMPROVED OPERATING RESULTS AND RECORD BACKLOG
FOR FISCAL YEAR ENDED FEBRUARY 28, 1995
DALLAS, TEXAS, May 10,1995--Smith Environmental Technologies Corporation,
(NASDAQ-SMTH), announced today improved operating results and record backlog
for the fourth quarter and fiscal year ended February 28, 1995.
Net income for the year ended February 28,1995 was $2,555,000 or $.44 per
share, compared with a loss of $9,999,000 or ($1.75) per share in fiscal year
1994. The prior year included special items related to restructuring,
provisions for contract overruns and uncollectible claims, and an investment
write-off. Net income for the fourth quarter ended February 28,1995 was
$382,000 or $.06 per share compared with a loss of $2,167,000 or ($.38) per
share for the same period in 1994. The fourth quarter includes the operating
results of BCM Engineers Inc. and Riedel Environmental Services, Inc. which
were acquired during 1994.
Revenues for the year ended February 28,1995 were $104.7 million compared
with $59.5 million for the year ended February 28, 1994, a 76% increase.
Revenues for the fourth quarter were $40.8 million compared with $18.8
million for the same period last year, a 172% increase. The Company's funded
backlog at February 28, 1995 increased to $105 million from $75 million at
November 30, 1994, and $60 million at February 28,1994. The Company's total
contract backlog at February 28, 1995, including BCM, Riedel and RESNA was
approximately $275 million, which includes approximately $170 million of
unfunded, multi-year, indefinite delivery order contracts. This compares with
$255 million at November 30,1994, which included $180 million of unfunded
contract provisions. There was no significant unfunded backlog at February
28,1994.
Net income, revenues and contract backlog increased in the quarter and year
primarily as a result of the acquisition of BCM and Riedel. Adding to the
improved operating results were accelerated project schedules on several
major remediation contracts, reductions in indirect costs and SG&A, and
improved earnings by the Company's SoilTech affiliate.
-MORE-
_______________________________________________________________________________
ENGINEERING - CONSULTING - REMEDIATION - CONSTRUCTION EXHIBIT 5.2
SMITH Page 2
Noting the dramatic increases in revenues and income, E. Brian Smith,
Chairman and Chief Executive Officer, stated, "Our initial strategy to
combine several fine regional firms like BCM, Riedel and Canonie has been
accomplished. The integration of the three companies into a combined national
environmental services firm is well underway. l am very pleased with the
performance within each of our operating groups. We have spent a great deal
of energy and resources identifying opportunities which have resulted in
increased backlog and revenues. The challenge ahead of us is to continue to
produce better earnings." Smith added, "The Company's entrance into the
federal market continues to improve with the recent awards of projects from
the DOD, DOE and the Corps of Engineers."
The Company reported it signed an amendment to its Loan and Security
Agreement with LaSalle Business Credit, Inc. on May 5, 1995, temporarily
increasing the eligible borrowing base by $4,000,000. The proceeds of the
financing were used to partially offset increased working capital
requirements primarily resulting from reductions in the eligible borrowing
base. A significant portion of the reduction in borrowing base under the
credit facility is related to accounts receivable acquired in the acquisition
of Riedel Environmental Services, Inc., which have subsequently been
determined ineligible. The Company is pursuing resolution of the accounts
receivable eligibility issue with Riedel Environmental Technologies, Inc.
under the purchase price adjustment provisions of the acquisition agreement.
"While we believe that the Company has adequate working capital for the near
term," Smith added, "We are actively looking at other sources of capital to
provide for additional working capital and expected growth."
Smith Environmental Technologies Corporation, formerly Canonie Environmental
Services Corp., acquired BCM Engineers Inc. and Riedel Environmental
Services, Inc. during 1994. It also acquired certain assets and contracts
from RESNA Industries, Inc. in January, 1995. The Company changed its name to
Smith Environmental Technologies Corporation on February 28,1995.
Smith Environmental Technologies Corporation is a leading provider of
comprehensive engineering, construction and hazardous waste remediation
services with over 30 offices and 1,200 employees throughout the United
States.
-MORE-
SMITH
SMITH ENVIRONMENTAL TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS EXCEPT PER SHARE DATA)
YEAR ENDED THREE MONTHS ENDED
FEBRUARY 28, FEBRUARY 28,
1995 1994* 1995 1994*
---- ----- ---- -----
(unaudited)
Revenues $104,738 $59,461 $40,803 $18,783
Cost of Revenues 89,922 56,020 35,220 17,711
-------- ------- ------- -------
Gross Profit 14,816 3,441 5,583 1,072
Selling, general and administrative
expense 10,795 5,754 4,077 1,239
Special charges 4,263 1,914
-------- ------- ------- -------
Income (loss) from operations 4,021 (6,576) 1,506 (2,081)
Interest expense 1,229 412 927 115
-------- ------- ------- -------
Income (loss) before taxes on income 2,792 (6,988) 579 (2,196)
Taxes on income 558 135 116
-------- ------- ------- -------
Income (loss) before earnings (loss)
of unconsolidated affiliates 2,234 (7,123) 463 (2,196)
Share in earnings (losses) of
unconsolidated affiliates
Operating 539 (221) 50 29
Investment write-off (2,655)
-------- ------- ------- -------
Net income (loss) 2,773 (9,999) 513 (2,167)
Dividends and accretion on
preferred stock 218 131
-------- ------- ------- -------
Income (loss) applicable to
common stock $2,555 ($9,999) $382 ($2,167)
-------- ------- ------- -------
-------- ------- ------- -------
Weighted average number of common
and common equivalent shares
outstanding 5,866 5,701 5,967 5,701
Earnings (loss) per share of common
and common equivalent share $0.44 ($1.75) $0.06 ($0.38)
-------- ------- ------- -------
-------- ------- ------- -------
*Classifications conform to the current period presentation