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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 10-K
(Mark One)
( X ) Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 (Fee Required)
For the fiscal year ended August 25, 1995
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or
( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
(No Fee Required)
For the transition period from ____________________
to ____________________
Commission File Number 33-16098
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THE EARTH TECHNOLOGY CORPORATION (USA)
(Exact name of registrant as specified in its charter)
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Delaware 33-0244112
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 West Broadway, Suite 5000
Long Beach, California 90802
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(Address of principal executive offices) (Zip Code)
Registrant's tel. number, including area code: (310) 495-4449
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Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock $.10 Par Value
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(Title of Class)
Indicate by checkmark 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 for 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 by checkmark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the registrant's voting stock held by
nonaffiliates of the registrant as of November 8, 1995, was approximately
$23,245,000, based upon published closing prices for that date. As of
November 8, 1995, the registrant had issued and outstanding 8,697,869 shares of
common stock.
Documents Incorporated by Reference
Certain portions of the registrant's ANNUAL REPORT to stockholders for the
fiscal year ended August 25, 1995 are incorporated by reference into Part II
hereof.
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THE EARTH TECHNOLOGY CORPORATION (USA)
1995 Form 10-K Annual Report
TABLE OF CONTENTS
Item No. Description Page
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PART I
1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . 9
4. Submission of Matters to a Vote of Security Holders. . . . . . . . 10
5. Market for Registrant's Common Equity and Related Stockholder
Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6. Selected Consolidated Financial Data (In thousands, except per
share amounts) . . . . . . . . . . . . . . . . . . . . . . . . . . 11
7. Management's Discussion and Analysis of Financial Condition and
Results of Operations. . . . . . . . . . . . . . . . . . . . . . . 11
8. Financial Statements and Supplementary Data. . . . . . . . . . . . 11
9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure . . . . . . . . . . . . . . . . . . . . . . . 11
10. Directors and Executive Officers of the Registrant . . . . . . . . 12
11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . 12
12. Security Ownership of Certain Beneficial Owners and
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
13. Certain Relationships and Related Transactions . . . . . . . . . . 12
14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K . 13
PART I
ITEM 1. BUSINESS
GENERAL
The Earth Technology Corporation (USA) (the "Company") provides a
broad range of environmental, consulting, and engineering services through a
nationwide network of 38 offices in 18 states. Earth Technology was
incorporated in Delaware in August 1987 as a holding company and operated
primarily through its subsidiary company EARTH TECH, Inc., a California
corporation, which, with its predecessors, has conducted the business of Earth
Technology since its formation in 1970. On May 23, 1994, Earth Technology
merged with Summit Environmental Group, Inc. (Summit), a Delaware corporation,
in a pooling of interests transaction. Summit was a holding company which
operated primarily through its subsidiary companies, WW Engineering & Science,
Inc., a Michigan corporation, and HMM Associates, Inc., an Ohio corporation. On
February 23, 1995, Earth Technology merged with HazWaste Industries, Inc.(HWI),
a Virginia corporation operating principally through its subsidiary company,
Environmental Technology of North America, Inc. Summit, HazWaste, and HMM were
merged into EARTH TECH, Inc. in August 1995. WW Engineering & Science now does
business under the name of EARTH TECH, Inc. Environmental Technology of North
America, Inc. has been re-named EARTH TECH Remediation Services, Inc.
Principal services of Earth Technology consist of: (1) full-spectrum
Environmental and Hazardous Waste Management services, encompassing remedial
investigation through turnkey remediation, environmental planning and analysis,
compliance assessment, pollution prevention, and air quality assessment and
pollution control; (2) Infrastructure design and construction services, which
rely on the firm's engineering and geotechnical capabilities for transportation,
water/wastewater, solid waste, and other public works projects; (3) Facilities
Engineering and Construction Management services for institutional, civic,
commercial, and industrial clients; and (4) Contract Operations and management
services for water, wastewater, and remediation treatment facilities for
municipal and industrial clients. In 1995, Earth Technology adopted a plan to
dispose of its analytical laboratory services and, accordingly, has treated them
as discontinued operations. Our services are provided to a variety of
commercial and industrial clients, state and local governments, and the federal
government. In fiscal 1995, 35% of the Company's gross revenues were provided
from commercial and industrial clients, 17% were from municipal and other local
government agencies, and 48% were derived from the federal government.
Earth Technology believes the market for environmental and engineering
services increasingly favors larger nationwide companies who can provide a full
range of technical services, from investigation, to design, to construction and
operation, across the nation. Accordingly, the Company's strategy is to
continue to increase its geographic diversity and technical depth through both
internal growth and acquisitions.
1
SERVICES
The primary services provided by Earth Technology are outlined below.
Earth Technology's principal strategy is to market its services on an integrated
basis, although it often enters into contracts requiring only one of it
services.
ENVIRONMENTAL AND HAZARDOUS WASTE MANAGEMENT SERVICES. Earth
Technology assists federal, state and local governmental agencies as well as
commercial, industrial, and institutional clients with hazardous waste site
investigation, cleanup, hazardous materials management, pollution prevention,
and regulatory compliance support related to hazardous waste issues. The
Company provides full turnkey services, from initial site assessment to
characterization of the sources and extent of contamination of various
environmental media (soil, water, and air), to analysis of feasible cleanup
alternatives, to development of engineering designs for and implementation of
appropriate corrective actions. Earth Technology's remediation specialists have
applied traditional as well as leading edge technologies to effect the cleanup
of soils and groundwater impacted by a variety of contaminants, and have
provided short- and long-term operation and maintenance services for treatment
systems. Often, these services have been used to enable clients to obtain
regulatory approval for site "closure" and to proceed with alternate land use
plans. In addition, Earth Technology derives 14% of its revenues from emergency
response contracts with the U.S. Environmental Protection Agency ("EPA").
Earth Technology's full range of air quality assessment, modeling,
permitting, and control technology evaluation and design services have helped
clients achieve and sustain compliance with requirements of the 1990 Clear Air
Act Amendments and local regulations. Air engineering specialists, primarily
chemical, mechanical and environmental engineers, assist industrial and
governmental clients by recommending possible ways to reduce or eliminate
emissions, guiding clients through the Title V Operating Permit process, and
performing state-of-the-art air quality modeling for planning and permitting
purposes.
Earth Technology also provides services to assist clients in
regulatory compliance and pollution prevention. The Company conducts
comprehensive environmental compliance assessments for government, commercial,
and industrial clients to assist them in achieving and maintaining positive
environmental compliance postures. These assessments evaluate facility
operations and processes, materials handling, waste generation and management
practices, and compliance with any regulatory permit requirements. Earth
Technology identifies and recommends pollution prevention and waste reduction
opportunities and may design solutions and help oversee the planning or
implementation of facility or operational modifications to achieve regulatory
compliance or facilitate pollution prevention.
2
Additional hazardous waste management services also include due
diligence assessments for land transfer, as well as asbestos and lead
inspections, management and abatement services. These services have been
provided to industrial, real estate and government clients for a variety of
office, industrial, retail, residential and public facilities. In asbestos and
lead abatement projects, Earth Technology does not directly perform abatement
services, but operates in a supervisory or quality control role.
The Company offers a full range of environmental planning and analysis
services to support the National Environmental Policy Act ("NEPA") and various
other federal, state, and local government regulations. Since the passage of
NEPA in 1969, the role of environmental resource analysis and evaluation has
become critical in project planning and permitting of major projects,
particularly for DOD clients. This process includes resource analysis and
related services, including reviewing system requirements and translating them
into action planning; evaluating the potential for action plans to affect the
environment; identifying issues and concerns; and developing solutions.
For more than 23 years, Earth Technology has been engaged in
scientific and engineering analysis to support major defense acquisition and
testing programs. More recently, the Company has been providing environmental
compliance, planning, and documentation support for military sites nationwide
faced with responding to Base Realignment and Closure ("BRAC") related issues.
These services have included the development of environmental impact statements,
performing socioeconomic impact analyses, development of environmental baseline
surveys at bases scheduled for closure to document the condition of the
property, and development of BRAC Cleanup Plans that included strategies and
schedules for integrated management of cleanup, compliance, resource
conservation, and reuse and disposal planning at closing installations.
INFRASTRUCTURE SERVICES. Earth Technology provides a broad range of
engineering, geotechnical, and construction services to governmental units for
public works projects and infrastructure development and improvements. The
Company's civil, environmental, transportation, and geotechnical engineers,
geologists, and urban planners provide planning, engineering design and
analysis, permitting, and construction management services to public and private
clients for water treatment, storage, and distribution systems; wastewater
treatment plants; solid waste landfills; roads, bridges and rail systems;
airports; ports and harbors; as well as a variety of related projects and
improvements.
In the area of water resources management services range from studies
for alternative sources of water supply to the design of intakes, production
wells, treatment plants, water mains, and storage tanks. In water treatment,
Earth Technology's technical staff carefully monitors new safe drinking water
regulations and the more stringent treatment requirements that they impose on
municipal water systems for both organic and inorganic constituents. The
Company has served nearly 100 municipal water utilities, and has won many awards
for its innovative and cost-effective designs.
3
Geotechnical engineering and geological assessment services are
applied to: solid waste management; earthquake hazard assessment and
mitigation; transportation facilities; power, utilities, and public works
projects; ports and harbors; water resources development and management;
facility siting; and residential, commercial, and industrial land development.
Transportation services offered by Earth Technology include: corridor
selection studies, traffic impact analyses, capacity analyses, infrastructure
analyses, as well as assistance with transit facilities, equipment, and
operation. These services have been provided to villages, townships, cities,
regional transit agencies, and state departments of transportation across the
country.
FACILITIES ENGINEERING AND CONSTRUCTION MANAGEMENT SERVICES. Earth
Technology provides professional engineering and construction management
services for the design and construction of new or retrofitted industrial and
institutional facilities. The Company specializes in chemical process as well
as HVAC system designs for the chemical, pharmaceutical, and medical industries.
Other services include mechanical-hydraulics, electrical, instrument and
control, and civil/structural engineering, architecture, and construction
management. Earth Technology has provided full-service design/build services in
addition to more specific process and system design and construction management
services offered as part of a larger design team. Facilities engineers also
work closely with its environmental engineers, providing integrated detailed
engineering and construction management services for remedial action treatment
systems.
CONTRACT OPERATIONS SERVICES. Earth Technology provides a full range
of contract operation and management services for environmental and
infrastructure systems. Contract operation services include technical
assistance programs, troubleshooting, plant start-ups, preventive maintenance
programs, training, facility evaluations, and hands-on operation. The company
employs licensed treatment plant operators, maintenance specialists, electrical
technicians, operations specialists, and engineering support staff necessary to
provide complete on-site operation of environmental and infrastructure systems.
Earth Technology is currently operating more than 75 water and wastewater
treatment facilities, in addition to providing operations services for
groundwater remediation systems and landfills. While the primary client base
for these services has historically consisted of municipalities, Earth
Technology has been successful at expanding these services to private industrial
and federal government clients.
MARKETS AND COMPETITION
Earth Technology competes primarily in the continental U.S. market
against numerous competitors including small local firms, medium-size regional
and a smaller number of large national and international competitors whose
resources are substantially greater than the Company's. The various firms
compete on the basis of technical excellence, quality of service, local
presence, and price. There are few barriers to entry into these markets other
than technical qualifications.
4
Much of the demand for Earth Technology's services is derived from
governmental regulations concerning environmental quality and standards. While
these regulations number in the thousands at all levels of government, among the
most influential of these regulations at the federal government level are the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
(Superfund), the Resource Conservation and Recovery Act ("RCRA"), NEPA and the
Clean Air Act. With regard to seasonality, while demand for Earth Technology's
services are not strictly seasonal, winter time weather often prevents
construction and field service projects from being performed at a rate
commensurate with the other periods of the year, often resulting in a
"seasonally" weaker second quarter for Earth Technology's fiscal year.
CLIENTS
Services are provided to clients in both the public and private
sectors, including the DOD, EPA, and other federal agencies, state and local
departments of public works, port authorities, state environmental agencies,
manufacturers, chemical companies, utilities and other commercial companies.
Earth Technology's contract with the Air Force Center for Environmental
Excellence ("AFCEE") to provide services related to Base Closure and Realignment
activities provided 4% of gross revenues in fiscal 1995; and a separate contract
with AFCEE for services related to the Installation Restoration Program provided
an additional 11% of consolidated gross revenues. Emergency response contracts
with the EPA provided 14% of consolidated gross revenues. In fiscal 1995, the
Company was awarded three additional contracts with the U.S. Air Force: (1) a
$78-million, 5-year AFCEE contract to provide environmental services, primarily
environmental compliance, pollution prevention, and environmental and land use
planning, at Air Force sites worldwide; (2) a $50 million, 5-year contract to
perform a broad spectrum of occupational and environmental health assessments
for Armstrong Laboratory at Brooks Air Force Base in Texas, and (3) a 5-year,
$38.5 million contract with Wright-Patterson Air Force Base to provide
environmental and engineering services related primarily to environmental
compliance, pollution prevention, and environmental and land use planning.
In addition to its Air Force and EPA work, Earth Technology has a
number of major contracts with the U.S. Army. For the U.S. Army Corps of
Engineers ("USACE") Huntsville Division, Earth Technology is providing
facilities engineering and construction management services for renovation and
retrofit projects at medical facilities across the country as well as in the
Caribbean under a 5-year contract. In fiscal 1995 Earth Technology was awarded
a 5-year, $50 million contract from the USACE Huntsville Division to provide
remedial investigation, design, and construction oversight services at formerly
used ordnance sites on U.S. Army facilities in the western United States. Under
a USACE Fort Worth District contract, Earth Technology is providing
environmental compliance assessment services at a number of Army installations.
Earth Technology was also awarded a 5-year, $12.5 million contract by the Fort
Worth District in fiscal 1995 to perform cultural resources services at military
sites worldwide. Underground storage tank removal and site cleanup services are
being provided under contracts with the USACE Savannah District and Norfolk
District. A wide range of environmental
5
engineering and hazardous waste management services are being conducted at Army
bases nationwide for the Army Environmental Center under contract to the USACE
Baltimore District. Earth Technology is also a primary subcontractor on several
Army contracts including two Total Environmental Restoration Contracts (TERCs)
through the USACE Omaha District, as subcontractor to RUST International.
In fiscal 1995, Earth Technology was awarded a 10-year, $200 million
contract, the largest award in the Company's history, to support the U.S. Navy's
Comprehensive Long-term Environmental Action Navy (CLEAN) program in the
Pacific. Under this contract, the Company will provide a full range of site
characterization, risk assessment, remedial design, and emergency cleanup
services for Navy and Marine Corps activities in Hawaii, Guam, Midway Island,
and other areas of the Pacific Rim. Earth Technology is also a primary
subcontractor to Foster-Wheeler Environmental on a remedial action contract with
the Naval Facilities Engineering Command, Northern Division.
Earth Technology's commercial and industrial client base includes
clients from the automotive, pharmaceutical, chemical, pulp and paper products,
food, electronics, oil and gas, aerospace, and industrial manufacturing
industries. In addition, Earth Technology's clients include major utilities,
financial institutions and property management companies, and industry
associations. Earth Technology has master service agreements in place with
more than 60 major clients, including numerous Fortune 500 businesses.
Earth Technology's contractual fee arrangements vary among clients and
projects and include cost plus award or fixed fees, time and materials fee
structures based on hourly fee schedules and a schedule of costs for certain
purchased services and materials, to fixed price arrangements. Earth Technology
bills substantially all of its clients on a monthly basis. The following table
sets forth the percentages of total revenues represented by the broad contract
type categories for each of the three years ended August 25, 1995:
FY95 FY94 FY93
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Cost plus 15% 24% 19%
Time and materials 80% 67% 74%
Fixed price 5% 9% 7%
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Totals 100% 100% 100%
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6
RELIANCE ON GOVERNMENT CONTRACTS
Earth Technology traditionally has pursued multiyear contracts with U.S.
government agencies. During fiscal 1995, U.S. Government contracts accounted
for approximately 48% of Earth Technology's gross revenues. Reliance on major
government contracts subjects Earth Technology to risks associated with public
budgetary restrictions and uncertainties, discrepancies between awarded contract
amounts and actual revenues, and cancellation at the option of the government.
Earth Technology attempts to mitigate these risks by staffing only to meet
reasonably anticipated average workloads, by using subcontractors to handle peak
workloads, and by obtaining termination benefit contract provisions.
Cancellation of any of the Company's major government contracts, however, could
have a material adverse effect.
BACKLOG
The following table shows Earth Technology's backlog in millions of dollars
as of the end of the following periods:
August 25, August 26, August 27,
1995 1994 1993
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Amounts funded $173 $146 $135
Additional contract space
available under signed 658 302 258
contracts ---------- ---------- ----------
Total contract backlog $831 $448 $393
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Approximately 48% of the funded backlog and 89% of the total contract
backlog as of August 25, 1995 was attributable to U.S. government contracts. An
additional 27% of the funded backlog and 5% of the total contract backlog was
comprised of multiyear contracts for the operation of environmental and
infrastructure systems. Of the total backlog of funded commitments at August
25, 1995, Earth Technology estimates approximately $25 million will be utilized
in fiscal 1996. There can be no assurance that Earth Technology will actually
obtain revenues equal to the full amount of this backlog.
PERSONNEL
Earth Technology has a staff of more than 1,600 professional and support
personnel in a variety of technical disciplines, including civil, environmental,
chemical, mechanical and electrical engineering, geology, hydrology,
environmental science, computer science, environmental science, chemistry, and
construction management. Approximately 350 employees have advanced
7
technical degrees. Professional staff includes more than 100 registered
engineers, 40 registered geologists, and several hundred other employees with
various professional registrations, certifications, and specialty licenses.
There is one collective bargaining agreement relating to six employees employed
at the Berkeley Heights, New Jersey, wastewater treatment facility who are
presently represented by International Brotherhood of Teamsters, Local 866.
None of the other employees is represented by a labor union and management
considers its relations with all its employees to be good.
POTENTIAL LIABILITY AND INSURANCE
The Company derives a substantial portion of its revenues from waste
management services. Such services involve hazardous materials, toxic
substances, and other pollutants that, if not handled or stored properly, can
cause significant personal injury and property damage. As a result, the Company
is exposed to the risk of civil liability for personal injury and property
damages and to the imposition of substantial fines by federal, state, and local
authorities.
The Company carries a $15 million professional liability claims made
insurance policy, which includes certain coverages for claims related to
hazardous materials, toxic substances, and other pollutants and an $11 million
comprehensive general liability insurance policy. The self-insured retention on
the professional liability insurance policy is $1,500,000. The Company attempts
to reduce its liability risks by including contract provisions by which clients
indemnify the Company against all claims not resulting from willful actions or
negligence on the part of the Company. Not all clients, however, have accepted
such broad indemnification clauses, and there can be no assurance that clients
that have accepted such clauses will have the financial resources or legal
authority necessary to indemnify the Company against actual judgments that may
be rendered against it. A substantial damage award, if not covered by the
indemnification or if not covered or only partially covered by insurance, could
have a material adverse effect on the Company.
PATENTS AND SERVICE MARKS
The Company owns one patent covering certain design features of onsite
testing equipment. In addition, the Company has registered the name "The Earth
Technology Corporation". A service mark for "EARTH TECH" is pending with the
United States Patent and Trademark office. The expiration of the patent and
service mark would not have a material adverse impact on the Company.
RESEARCH AND DEVELOPMENT
The Company's expenditures for research and development are not material.
8
REGULATORY MATTERS
In the ordinary course of its business, the Company and certain members of
its professional staff become subject to a variety of state and local licensing
and permit requirements. The Company believes that it and its staff are in
substantial compliance with such requirements.
The Company is ordinarily not a generator of pollution and hazardous
materials. As an inherent result of its business, the Company may, however,
have some liability associated with its environmental work. In response to this
risk potential, the Company has implemented a professional liability insurance
program and contracting practices to offset this risk (see "Potential Liability
and Insurance"). Accordingly, the Company does not anticipate any material
adverse effects upon capital expenditures, earnings or the competitive position
of the Company associated with compliance with Federal, State and local
provisions regulating the discharge of materials into the environment or
protecting the environment.
ITEM 2. PROPERTIES
The Company occupies approximately 447,000 square feet of office facilities
in 38 cities across the nation. The Company's principal office is located in a
six-story office building at 100 West Broadway, Long Beach, California. The
facility includes 43,000 square feet of office space. The Company has signed a
15-year lease, with two five-year options to extend, which commenced January 15,
1989 for this space. In Concord, Massachusetts, the Company leases
approximately 45,000 square feet of office space under a ten year lease which
commenced July, 1989. In Grand Rapids, Michigan, the Company owns, subject to a
mortgage, a 62,000 square foot facility housing office space and an analytical
laboratory. The Company has sublet the laboratory space. The Company leases an
additional 28,800 square feet of office space in Grand Rapids. All other office
locations are leased, primarily under three to five year lease agreements.
ITEM 3. LEGAL PROCEEDINGS
As a professional services firm engaged in engineering, environmental
safety matters, the Company encounters potential claims, including claims for
environmental damage, in the normal course of business. The Company practices a
vigorous response to such claims including a legal defense when necessary.
To minimize its risk against these claims, the Company promotes risk
management techniques when providing professional services. The Company also
maintains an insurance program which includes coverage for environmental and
asbestos claims related to its business.
Certain pending legal actions, which are described below, make claims for
substantial damages which, if awarded, would have a material adverse effect on
the Company's financial position and the results of its operations.
9
(1) One of the Company's subsidiaries, Alternative Ways, Inc. (AWI)
has been named a co-defendant in certain action filed on October 9, 1990 in
the Supreme Court for the State of New York, County of New York. Other
defendants in the lawsuit include Madison Square Garden Corporation,
Paramount Communications, Inc. and Herbert Construction Company/HRH
Construction Corporation. Plaintiff, an asbestos abatement contractor,
seeks $20 million in compensatory damages and up to $100 million in
punitive damages. While this dispute involved asbestos removal, Plaintiff
makes no environmental claim related to asbestos. Plaintiff rather alleges
that defendants misrepresented the job and underpaid for the work. AWI
vigorously denies these assertions and had no contractual relationship with
the Plaintiff.
(2) A California, nonprofit homeowners association, Canyon Estates
Community Association, commenced on November 25, 1992 a civil action for
negligence in Superior Court for the County of Orange California against
the company and twenty-two other defendants including certain soils
engineering firms, certain land developers and certain home builders. As
to the Company, the suit challenges certain preliminary soils engineering
work completed in the mid-1980s. In December, 1994, Plaintiff presented
the Defendants with an expert witness report which asserts corrective
remedies will cost more than $140 million. The Company vigorously disputes
this opinion and any claim of liability against it.
(3) Various property owners, merchants, residents, and tenants located
on Hollywood Boulevard in Los Angeles, California have filed on April 28,
1985 a multi-count civil action in Superior Court for the County of Los
Angeles against the Los Angeles County Metropolitan Transportation
Authority and approximately 50 contractors associated with the Metro Rail
project, including the Company. The legal action seeks unspecified damages
and other judicial relief for damages arising out of the construction of
the Metro Rail red line along Hollywood Boulevard. Given the recent
commencement of this action, the Company believes it is premature to
venture any reasonable evaluation of the outcome of this matter or
reasonable estimate of damages. The Company intends, however, to
vigorously dispute any claim of liability against it.
Because the three cases are at an early stage in the legal process, the
ultimate outcome or the range of costs, if any, cannot be determined at this
time.
There are other claims and suits pending against the Company for alleged
damages to persons and property and for alleged liabilities arising out of
matters occurring during the normal operation of the Company's business. In the
opinion of management, the uninsured liability, if any, of these other claims
and suits would not materially affect the financial position or results of
operations of the company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
10
No matters were submitted to a vote of the Security Holders during the
fourth quarter of fiscal 1995.
11
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Reference is made to the paragraphs under the captions "Stock Information",
"Dividend Policy", and "Holders of Stock" on page 22 of the Company's Annual
Report to Stockholders for fiscal year August 25, 1995 ("Annual Report"), which
are incorporated herein by reference.
ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA (IN THOUSANDS, EXCEPT PER SHARE
AMOUNTS)
Reference is made to the Selected Consolidated Financial Data (for the five
years ended August 25, 1995) set forth on page 1 of the Annual Report and
incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Reference is made to Management's Discussion and Analysis of Financial
Condition and Results of Operations set forth on pages 2, 3, 4 and 5 of the
Annual Report and incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
(a) The report of Ernst & Young LLP, Independent Auditors, the Consolidated
Statements of Income for the years ended August 25, 1995, August 26, 1994, and
August 27, 1993; Consolidated Balance Sheets as of August 25, 1995 and August
26, 1994; Consolidated Statements of Stockholders' Equity and of Cash Flows for
the years ended August 25, 1995, August 26, 1994, and August 27, 1993; and Notes
to Consolidated Financial Statements set forth on pages 6 through 21 of the
Annual Report, are incorporated by reference herein.
(b) Quarterly Results of Operations (Unaudited) are set forth on page 22 of
the Annual Report, and are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There were none.
12
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
DIRECTORS
The sections entitled "Election of Directors" and "Executive Officers and
Significant Employees of Earth Technology" in the registrants definitive proxy
statement to be filed with the Securities and Exchange Commission for the Annual
Meeting of the Stockholders of the Company (the "proxy Statement") is
incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
The sections entitled "Executive Compensation" and "Management of Earth
Technology" in the registrant's Proxy Statement is incorporated herein by
reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The section entitled "Security Ownership" in the registrant's Proxy
Statement is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There have been no transactions that are required to be disclosed under
Item 404 of Regulation S-K.
13
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) Financial Statements, Schedules and Exhibits
I. FINANCIAL STATEMENTS INCORPORATED HEREIN BY REFERENCE TO THE
COMPANY'S ANNUAL REPORT.
Except for the following which are specifically incorporated by this
reference, the Company's Annual Report to stockholders is not deemed to be
filed with the Securities and Exchange Commission.
(i) Report of Ernst & Young LLP, Independent Auditors;
(ii) Consolidated Statements of Income for the years ended August
25, 1995, August 26, 1994 and August 27, 1993.
(iii) Consolidated Balance Sheets, as of August 25, 1995 and
August 26, 1994.
(iv) Consolidated Statements of Stockholders' Equity for the
years ended August 25, 1995, August 26, 1994, and August 27,
1993.
(v) Consolidated Statements of Cash Flows for the years ended
August 25, 1995, August 26, 1994, and August 27, 1993.
(vi) Notes to Consolidated Financial Statements.
II. SCHEDULES
Schedules not filed herein are omitted because of the absence of
conditions under which they are required or because the information called
for is shown in the consolidated financial statements or notes thereto.
14
III. EXHIBITS
The following exhibits are filed as part of this report.
Exhibit
Number Description
- ------ -----------
2.1 Agreement and Plan of Merger, dated as of February 7, 1994 by and
among The Earth Technology Corporation (USA), ET-Sub, Inc. and Summit
Environmental Group, Inc.(5)
2.2 Agreement and Plan of Merger, dated as of October 24, 1994, by and
among The Earth Technology Corporation (USA), ET-Sub. II, Inc. and
HazWaste Industries, Inc. (6)
3.1 Restated Certificate of Incorporation of the Registrant.(5)
3.2 Bylaws of the Registrant.(1)
4.1 Registration Rights Agreement dated as of February 7, 1994 between
certain shareholders and the Registrant.(5)
4.2 Registration Rights Agreement dated as of October 24, 1994 between
certain shareholders and the Registrant.(6)
10.1 Restated Employment Agreement dated as of February 15, 1988, between
Robert A. Colonna and the Registrant.(2)
10.2 Amendment to Restated Employment Agreement dated as of June 10, 1992,
between Robert A. Colonna and the Registrant.(4)
10.3 Employment Agreement dated as of May 15, 1992, between Charles S.
Alpert and the Registrant.(4)
10.4 Employment Agreement dated as of May 15, 1992 between Diane C. Creel
and the Registrant.(4)
10.5 Amendment to Employment Agreement dated as of March 2, 1994 between
Diane C. Creel and the Registrant.(5)
10.6 Employment Agreement dated as of May 15, 1992, between Creighton K.
Early and the Registrant.(4)
15
10.8 Employment Agreement dated as of May 15, 1992 between Steve Scott and
the Registrant.(4)
10.9 Employment Agreement dated as of May 23, 1994, between Theodore A.
Barten and the Registrant.(7)
10.10 Employment Agreement dated as of May 23, 1994, between William J.
Cretens and the Registrant.(7)
10.11 The Earth Technology Corporation (USA) 1987 Stock Plan.(2)
10.11.1 Amendment to the Earth Technology Corporation (USA) 1987 Stock
Plan.(5)
10.12 Commercial lease dated as of August 23, 1988, between IDM Properties
Corporation and a subsidiary of Registrant.(2)
10.13 The Earth Technology Corporation (USA) Director Option Plan, as
amended and restated.(5)
10.14 Agreement dated as of May 24, 1994, between Bank of America-Illinois
(formerly Continental Bank) and the Registrant.(7)
10.15 The Earth Technology Corporation (USA) annual bonus program.(4)
10.16 The Earth Technology Corporation (USA) 1994 Employee Stock Purchase
Plan.(5)
10.17 Amendment dated February 23, 1995 to the Credit Agreement dated as
of May 24, 1994 between Bank of America-Illinois and the
Registrant.(7)
11.1 Statement RE: Computation of per share earnings.(7)
13.1 Registrant's Annual Report to Stockholders for fiscal year ended
August 26, 1994.(7)
22.1 List of Subsidiaries of the Registrant.(7)
23.1 Consent of Ernst & Young LLP, Independent Auditors.(7)
23.2 Consent of Ernst & Young LLP, Independent Auditors.(7)
25.1 Power of Attorney.(7)
- --------------------
(1) Previously filed with the Securities and Exchange Commission as an
exhibit to the Registrant's Registration Statement, as amended, on
Form S-1 (File No. 33-16098) and incorporated herein by reference.
16
(2) Previously filed with the Securities and Exchange Commission as an
exhibit to the Registrant's Annual Report Form 10K for fiscal year
1988 and incorporated herein by reference.
(3) Previously filed with the Securities and Exchange Commission as an
exhibit to the Registrant's Annual Report Form 10K for fiscal year
1989 and incorporated herein by reference.
(4) Previously filed with the Securities and Exchange Commission as an
exhibit to the Registrant's Annual Report Form 10K for fiscal year
1992 and incorporated herein by reference.
(5) Previously filed with the Securities and Exchange Commission as an
exhibit to the Registrant's Registration Statement as amended, on Form
S-4 (File No. 33-77462) and incorporated herein by reference.
(6) Previously filed with the Securities and Exchange Commission as an
exhibit to the Registrant's Registration Statement as amended, on Form
S-4 (File No. 33-86364) and incorporated herein by reference.
(7) Exhibits included herein.
(b) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the fourth
quarter ended August 25, 1995.
17
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
THE EARTH TECHNOLOGY CORPORATION (USA)
By DIANE C. CREEL
----------------------------------
Diane C. Creel
Chief Executive Officer and Director
Date: November 22, 1995
--------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated.
Name Title Date
---- ----- ----
DIANE C. CREEL Chairwoman of the Board of November 22, 1995
- ------------------------ Directors, Chief Executive
Diane C. Creel Officer, and President
CREIGHTON K. EARLY Executive Vice President, November, 22, 1995
- ------------------------ Chief Financial
Creighton K. Early Officer, (Principal Financial
and Accounting Officer),
and Director
CHARLES D. APPLEQUIST Director November 22, 1995
- ------------------------
Charles D. Applequist
JAMES E. CLARK Director November 22, 1995
- ------------------------
James E. Clark
RICHARD J. HECKMANN Director November 22, 1995
- ------------------------
Richard J. Heckmann
LARRY J. LAWRENCE Director November 22, 1995
- ------------------------
Larry J. Lawrence
MARTHA L. ROBINSON Director November 22, 1995
- ------------------------
Martha L. Robinson
WARD W. JOHNSON Director November 22, 1995
- ------------------------
Ward W. Johnson
RICHARD H. GUILFORD Director November 22, 1995
- ------------------------
Richard H. Guilford
THE EARTH TECHNOLOGY CORPORATION (USA)
INDEX TO EXHIBITS
Exhibit
Number Description
- ------ -----------
2.1 Agreement and Plan of Merger dated as of February 7, 1994 by and among
The Earth Technology Corporation (USA), ET-Sub, Inc. and Summit
Environmental Group, Inc.(5)
2.2 Agreement and Plan of Merger, dated as of October 24, 1994, by and
among The Earth Technology Corporation (USA), ET-Sub. II, Inc. and
HazWaste Industries, Inc. (6)
3.1 Restated Certificate of Incorporation of the Registrant.(5)
3.2 Bylaws of the Registrant.(1)
4.1 Registration Rights Agreement dated as of February 7, 1994 between
certain shareholders and the Registrant.(5)
4.2 Registration Rights Agreement dated as of October 24, 1994 between
certain shareholders and the Registrant.(6)
10.1 Restated Employment Agreement dated as of February 15, 1988, between
Robert A. Colonna and the Registrant.(2)
10.2 Amendment to Restated Employment Agreement dated as of June 10, 1992,
between Robert A. Colonna and the Registrant.(4)
10.3 Employment Agreement dated as of May 15, 1992, between Charles S.
Alpert and the Registrant.(4)
10.4 Employment Agreement dated as of May 15, 1992, between Diane C. Creel
and the Registrant.(4)
10.5 Amendment to Employment Agreement dated as of March 2, 1994, between
Diane C. Creel and the Registrant.(5)
10.6 Employment Agreement dated as of May 15, 1992, between Creighton K.
Early and the Registrant.(4)
10.8 Employment Agreement dated as of May 15, 1992, between Steve Scott and
the Registrant.(4)
10.9 Employment Agreement dated as of May 23, 1994, between Theodore A.
Barten and the Registrant.(5)
10.10 Employment Agreement dated as of May 23, 1994, between William J.
Cretens and the Registrant.(5)
10.11 The Earth Technology Corporation (USA) 1987 Stock Plan.(2)
10.11.1 Amendment to the Earth Technology Corporation (USA) 1987 Stock
Plan.(5)
10.12 Commercial lease dated as of August 23, 1988, between IDM Properties
Corporation and a subsidiary of Registrant.(2)
10.13 The Earth Technology Corporation (USA) Director Option Plan.(3)
10.14 Agreement dated as of May 24, 1994, between Bank of America-Illinois
(formerly Continental Bank) and the Registrant.(5)
10.15 The Earth Technology Corporation (USA) annual bonus program.(4)
10.16 The Earth Technology Corporation (USA) 1994 Employee Stock Purchase
Plan.(5)
10.17 Amendment dated February 23, 1995 to the Credit Agreement dated as of
May 24, 1994 between Bank of America-Illinois and the Registrant.(7)
11.1 Statement RE: Computation of per share earnings.(7)
13.1 Registrant's Annual Report to Stockholders for fiscal year ended
August 25, 1995.(7)
22.1 List of Subsidiaries of the Registrant.(7)
23.1 Consent of Ernst & Young LLP, Independent Auditors.(7)
23.2 Consent of Ernst & Young LLP, Independent Auditors.(7)
25.1 Power of Attorney.(7)
________________
(1) Previously filed with the Securities and Exchange Commission as an
exhibit to the Registrant's Registration Statement, as amended, on
Form S-1 (File No. 33-16098) and incorporated herein by reference.
(2) Previously filed with the Securities and Exchange Commission as an
exhibit to the Registrant's Annual Report Form 10K for fiscal year
1988 and incorporated herein by reference.
(3) Previously filed with the Securities and Exchange Commission as an
exhibit to the Registrant's Annual Report Form 10K for fiscal year
1989 and incorporated herein by reference.
(4) Previously filed with the Securities and Exchange Commission as an
exhibit to the Registrant's Annual Report Form 10K for fiscal year
1992 and incorporated herein by reference.
(5) Previously filed with the Securities and Exchange Commission as an
exhibit to the Registrant's Registration Statement, as amended, on
Form S-4 (File No. 33-77462) and incorporated herein by reference.
(6) Previously filed with the Securities and Exchange Commission as an
exhibit to the Registrant's Registration Statement as amended, on
Form S-4 (File No. 33-86364) and incorporated herein by reference.
(7) Exhibits included herein.