FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 1995
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
ACT OF 1934
For the transition period from _______________ to
Commission File Number 033-17921
Air & Water Technologies Corporation
__________________________________________________________
(Exact Name of Registrant as Specified in its Charter)
Delaware 13-3418759
(State or other Jurisdiction (I.R.S. Employer Identification Number)
of Corporation)
U.S. Highway 22 West and Station Road, Branchburg, NJ 08876
(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 .
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of April 30, 1995.
Class A
$.001 Par Value Common Stock 32,018,004
(Title of Class) (Number of Shares Outstanding)
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AIR & WATER TECHNOLOGIES CORPORATION
CONSOLIDATED BALANCE SHEETS AS OF APRIL 30, 1995 AND OCTOBER 31, 1994
(in thousands , except share data)
ASSETS 1995 1994
------ ---- ----
(unaudited)
CURRENT ASSETS:
Cash and cash equivalents $10,620 $11,021
Accounts receivable, net 99,302 80,534
Costs and estimated earnings in excess of
billings on uncompleted contracts 57,390 59,250
Inventories 16,895 20,405
Prepaid expenses and other current assets 7,401 7,281
Net current assets of discontinued operations 1,691 9,825
------- -------
Total current assets 193,299 188,316
------- -------
PROPERTY, PLANT AND EQUIPMENT, net 41,699 43,013
INVESTMENTS IN ENVIRONMENTAL TREATMENT FACILITIES 22,855 23,343
DEFERRED DEBT ISSUANCE COSTS 3,423 3,507
GOODWILL 278,983 283,638
NET NON-CURRENT ASSETS OF DISCONTINUED OPERATIONS 883 6,295
OTHER ASSETS 33,370 54,826
------- -------
Total assets $ 574,512 $ 602,938
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term borrowings $ 888 $29,000
Current installments of long-term debt 461 533
Accounts payable 48,955 50,988
Accrued expenses 119,524 126,158
Billings in excess of costs and estimated
earnings on uncompleted contracts 24,669 30,840
Income taxes payable 1,833 2,003
------- -------
Total current liabilities 196,330 239,522
------- -------
NON-CURRENT LIABILITIES 6,700 42,700
------- -------
LONG-TERM DEBT 309,348 245,984
------- -------
MINORITY INTEREST IN AFFILIATES - 351
------- -------
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 (365,204) (352,580)
Common stock in treasury, at cost (108) (108)
Cumulative currency translation adjustment 374 (3)
------- -------
Total stockholders' equity 62,134 74,381
------- -------
Total liabilities and stockholders' equity $ 574,512 $ 602,938
======= =======
The accompanying notes are an integral part of these statements.
AIR & WATER TECHNOLOGIES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTH PERIODS ENDING APRIL 30, 1995 AND 1994
(in thousands, except share data)
(unaudited)
Three Months Six Months
Ending April 30 Ending April 30
---------------------- --------------------
1995 1994 1995 1994
---------- --------- -------- ---------
SALES $ 155,832 $ 119,657 $304,283 $242,410
COST OF SALES 116,045 96,667 229,225 197,046
------- ------- ------- -------
Gross Margin 39,787 22,990 75,058 45,364
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 34,325 33,084 68,671 63,562
AMORTIZATION OF GOODWILL 2,056 1,713 4,106 3,420
UNUSUAL CHARGES - - - 14,500
------- ------- ------- -------
Operating Income (loss) 3,406 (11,807) 2,281 (36,118)
INTEREST EXPENSE (6,325) (6,713) (12,047) (12,976)
INTEREST INCOME 211 249 332 642
OTHER EXPENSE, NET (524) (578) (882) (1,331)
------- ------- ------- -------
Loss from continuing
operations before
income taxes and
minority interest (3,232) (18,849) (10,316) (49,783)
INCOME TAX PROVISION 267 63 560 41
MINORITY INTEREST 82 (121) 98 (259)
------- ------- ------- -------
Loss from continuing
operations (3,581) (18,791) (10,974) (49,565)
LOSS FROM DISCONTINUED
OPERATIONS - (34,956) - (41,579)
------- ------- ------- -------
NET LOSS $(3,581) $(53,747) $(10,974) $ (91,144)
======= ======= ======= =======
LOSS PER SHARE:
Continuing operations $ (.14) $ (.75) $ (.39) $ (1.99)
======= ======= ======= =======
Discontinued operations = (1.39) = (1.66)
LOSS PER SHARE $ (.14) $ (2.14) $ (.39) $ (3.65)
Weighted average number of
shares outstanding 32,018 25,065 32,018 24,940
======= ======= ======= =======
The accompanying notes are an integral part of these statements.
AIR & WATER TECHNOLOGIES CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTH PERIODS ENDING APRIL 30, 1995 AND 1994
(in thousands)
(unaudited)
1995 1994
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(10,974) $ (91,144)
Adjustments to reconcile net
income (loss) to net cash provided by
(used for) continuing operations -
Discontinued operations - 41,579
Depreciation and amortization 9,123 8,173
Minority interest 98 (259)
Other, net (438) -
------- -------
(2,191) (41,651)
Changes in assets and liabilities -
(Increase) decrease in assets -
Accounts receivable (2,475) 804
Costs and estimated earnings
in excess of billings on
uncompleted contracts 1,860 4,991
Inventories 309 (778)
Prepaid expenses and other current
assets (308) (878)
Other assets (1,761) 541
Increases (decrease) in liabilities
Accounts payable 724 281
Accrued expenses (11,565) 20,648
Billings in excess of costs and
estimated earnings on
uncompleted contracts (5,999) 2,041
Income taxes 118 138
------- -------
Net cash used for continuing
operations (21,288) (13,863)
Net cash provided by (used for)
discontinued operations 1,208 (14,773)
------- -------
Net cash used for operating
activities (20,080) (28,636)
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of business 12,338 -
Capital expenditures (3,255) (1,628)
Investment in environmental treatment facilities 488 (1,907)
Other, net (2,245) (2,222)
------- -------
Net cash provided by (used for) investing
activities 7,326 (5,757)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock - 5,000
Payment of notes payable and longterm debt (195) (2,181)
Net borrowings under credit facilities 35,388 21,966
Accounts receivable sold (repurchased) (20,000) 5,000
Cash dividends paid (1,650)
Other, net (1,190) 157
------- -------
Net cash provided by financing activities 12,353 29,942
------- -------
Net decrease in cash and cash equivalents (401) (4,451)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 11,021 7,624
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 10,620 $3,173
======= =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest $ 11,900 $ 12,566
======= =======
The accompanying notes are an integral part of these statements.
AIR & WATER TECHNOLOGIES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 1995
(unaudited)
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 10K 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 threeyear $130
million Senior Secured Credit Facility (the "New Credit Facility") with
First Chicago and Societe Generale acting as coagents 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 9%). 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 Compagnie General des Eaux ("CGE") to maintain a
minimum 40% ownership interest in the Company.
(2) Commitments and Contingencies:
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 will receive a payment of $4.5 million not later than
June 26, 1995, at which time a Stipulation of Dismissal with Prejudice
will be 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. The payment obligations of PRASA under the settlement
agreement and the negotiable promissory notes are guaranteed by the
Government Development Bank of Puerto Rico. Metcalf & Eddy intends to
sell the two PRASA notes in the near future.
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 Companys quarterly report on Form 10Q 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:
Certain reclassifications have been made to conform the 1994
consolidated financial statements to the 1995 presentation.
ITEM II.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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 10K filed with the Securities
and Exchange Commission for the fiscal year ended October 31, 1994.
Results of Operations
Summarized below is certain financial information relating to the core
environmental segments of the Company (in thousands):
Three Months Ended Six Months Ended
April 30, April 30,
1995 1994 1995 1994
Sales: -------- -------- -------- --------
Research - Cottrell $ 59,307 $ 48,733 $113,379 $103,283
Metcalf & Eddy 55,588 57,434 106,773 112,583
PSG (Contract Operations) 39,814 11,930 81,599 23,567
Other and Eliminations 1,123 1,560 2,532 2,977
-------- -------- -------- --------
$155,832 $119,657 $304,283 $242,410
======== ======== ======== ========
Cost of Sales:
Research - Cottrell $ 47,194 $ 48,779 $ 92,026 $101,678
Metcalf & Eddy 34,383 37,081 66,262 74,373
PSG (Contract Operations) 34,026 10,021 69,781 19,445
Other and Eliminations 442 786 1,156 1,550
-------- -------- -------- --------
$116,045 $ 96,667 $229,225 $197,046
======== ======== ======== ========
Selling, General and
Administrative Expenses:
Research - Cottrell $ 10,085 $ 11,241 $ 18,927 $ 20,981
Metcalf & Eddy 18,337 17,181 36,803 34,520
PSG (Contract Operations) 3,104 978 6,650 1,589
Other and Eliminations 706 703 1,368 1,333
Corporate (unallocated) 2,093 2,981 4,923 5,139
-------- -------- -------- --------
$ 34,325 $ 33,084 $ 68,671 $ 63,562
======== ======== ======== ========
Amortization of Goodwill:
Research - Cottrell $ 814 $ 816 $ 1,627 $ 1,632
Metcalf & Eddy 776 781 1,547 1,556
PSG (Contract Operations) 466 116 932 232
-------- -------- -------- --------
$ 2,056 $ 1,713 $ 4,106 $ 3,420
======== ======== ======== ========
Unusual Charges:
Research - Cottrell $ - $ - $ - $ 8,000
Metcalf & Eddy - - - -
PSG (Contract Operations) - - - -
Other - - - 4,200
Corporate - - - 2,300
-------- -------- -------- --------
$ - $ - $ - $ 14,500
======== ======== ======== ========
Operating Income (Loss):
Research - Cottrell $ 1,214 $(12,103) $ 799 $(29,008)
Metcalf & Eddy 2,092 2,391 2,161 2,134
PSG (Contract Operations) 2,218 815 4,236 2,301
Other (25) 71 8 (4,106)
Corporate (2,093) (2,981) (4,923) (7,439)
-------- -------- -------- --------
$ 3,406 $(11,807) $ 2,281 $(36,118)
======== ======== ======== ========
Three Months Ended April 30, 1995 Compared to
Three Months Ended April 30, 1994
Sales of $155,832,000 for the three months ended April 30, 1995
increased from $119,657,000 in the prior comparable period. PSG (Contract
Operations) sales increased by $27,884,000 of which the additional sales
resulting from the June 1994 acquisition of PSG represented $27,902,000.
Sales at Research - Cottrell increased $10,574,000 compared to the prior
comparable period. The increase was principally attributable to higher
volumes of approximately $7,870,000 in international sales of particulate
and acid gas control systems. Metcalf & Eddy sales decreased $1,846,000
primarily from lower Peace Shield passthrough sales representing direct
project costs passed through to the client. The higher margin labor based
sales increased $1,200,000 during the period.
Cost of sales of $116,045,000 for the three months ended April 30, 1995
increased from $96,667,000 in the prior comparable period. The increase is
attributable to the acquisition of PSG offset by lower costs within Metcalf
& Eddy and Research - Cottrell. Of the $24,005,000 increase in PSG (Contract
Operations) cost of sales, $24,391,000 resulted from the PSG acquisition
with the remainder primarily due to additional costs related to a
composting facility and favorable change order settlements reflected in the
prior period. Research - Cottrell cost of sales decreased by $1,585,000 to
$47,194,000 primarily as a result of lower costs related to its cooling
tower business and acid gas control systems and installation and
construction costs associated with particulate control systems, and chimney
product lines. Metcalf & Eddy costs of sales decreased $2,698,000 to
$34,383,000 primarily due to lower sales volume described above.
Selling, general and administrative expenses of $34,325,000 increased
from $33,084,000 in the prior period. Selling general and administrative
expense in the PSG (Contract Operations) segment increased $2,126,000
primarily due to the PSG acquisition. Selling, general and administrative
expenses at Research - Cottrell decreased $1,156,000 due to cost reductions
within its particulate and acid gas control equipment and cooling tower
product lines partially offset with higher costs related to international
activities. Selling general and administrative expenses in the Metcalf &
Eddy segment increased by $1,156,000 due to higher bid and proposal and
other related selling costs and higher litigation costs compared to the
prior period. Selling, general and administrative expense in corporate
decreased significantly due to cost reduction efforts including unallocated
promotional and facility related costs.
In light of improvements in its current market climate and anticipated
financial performance management has decided to retain the Companys 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 managements 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
backcharges 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 Companys cooling tower, heat transfer and emissions monitoring
operations are adequate in the aggregate, therefore these issues have not
had a significant effect on the Companys consolidated financial position or
results of its operations, taken as a whole as of April 30, 1995.
Interest expense decreased $388,000 although borrowings increased
primarily due to lower interest rates during the current period compared to
the prior period.
During the second quarter of fiscal 1994, a $35,000,000 charge was
recorded to liquidate the Companys discontinued asbestos abatement
operations.
Six Months Ended April 30, 1995 Compared to
Six Months Ended April 30, 1994
Sales of $304,283,000 for the six months ended April 30, 1995
increased from $242,410,000 in the prior comparable period. PSG (Contract
Operations) sales increased by $58,032,000 of which the additional sales
resulting from the June 1994 acquisition of PSG represented $57,520,000.
Sales at Research - Cottrell increased $10,096,000 compared to the prior
comparable period. The increase was principally attributable to higher
volumes of approximately $10,397,000 in international particulate and acid
gas control equipment product lines. Metcalf & Eddy sales decreased
$5,810,000 primarily from lower Peace Shield passthrough sales representing
direct project costs passed through to the client. The higher margin labor
based sales increased $1,600,000 during the period.
Cost of sales of $229,225,000 for the six months ended April 30, 1995
increased from $197,046,000 in the prior comparable period. The increase
is attributable to the acquisition of PSG offset by lower costs within
Metcalf & Eddy and Research - Cottrell. Of the $50,336,000 increase in PSG
(Contract Operations) cost of sales, $49,987,000 resulted from the PSG
acquisition with the remainder primarily due to additional costs related to
a composting facility and favorable change order settlements reflected in
the prior period. Research - Cottrell cost of sales decreased by $9,652,000
to $92,026,000 primarily as a result of lower costs related to its
emissions monitoring equipment and installation and construction costs
associated with particulate and acid gas control systems, cooling tower and
chimney product lines. Metcalf & Eddy costs of sales decreased $8,111,000
to $66,262,000 primarily due to lower sales volume described above and a
$1,000,000 charge recorded in the prior period related to claims and asset
valuations.
Selling, general and administrative expenses of $68,671,000 increased
from $63,562,000 in the prior period. Selling, general and administrative
expenses in the PSG (Contract Operations) segment increased $5,061,000
primarily due to the PSG acquisition. Selling, general and administrative
expenses at Research - Cottrell decreased $2,054,000 due to cost reductions
within its particulate and acid gas control equipment and cooling tower
product lines partially offset with higher costs related to international
activities. Selling, general and administrative expenses in the Metcalf &
Eddy segment increased by $2,283,000 due to higher bid and proposal and
other related selling costs partially offset by lower litigation costs
compared to the prior period. Selling, general and administrative expenses
in corporate decreased due to cost reduction efforts, including unallocated
promotional and facility related costs.
During the six months ended April 30, 1994, the Company recorded an
unusual charge primarily related to certain businesses that no longer met
strategic objectives and were anticipated to be divested. These businesses
primarily consisted of certain manufacturing operations and properties
which diverted management attention from the Companys core products and
services provided by Research - Cottrell, Metcalf & Eddy and PSG. As a result
of the contemplated divestitures, the Company recorded a $14,500,000 charge
representing the difference between the carrying value of these operations
and management's estimate of the anticipated net sales proceeds.
Interest expense decreased $929,000 although borrowings increased
primarily due to lower interest rates during the current period compared to
the prior period. Interest income decreased $310,000 primarily as a result
of interest on a favorable tax settlement in the prior period.
During fiscal 1994, a $38,229,000 charge was recorded to liquidate the
Companys discontinued asbestos abatement operations.
Financial Condition
Cash used by continuing operations for the six months ended April 30,
1995 amounted to $21.3 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 $5.0
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 Companys Credit
Facilities discussed below.
On March 10, 1995, the Company entered into a new threeyear $130
million Senior Secured Credit Facility (the "New Credit Facility") with
First Chicago and Societe Generale acting as coagents 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 9%). 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 April 30, 1995 the Company had
outstanding borrowings of $63.5 million (capacity of $80.1 million) and
issued and outstanding letters of credit of $18.1 million (capacity of
$49.9 million). The Company expects its operations to continue to use cash
during the next six months but it anticipates a reduction in the cash
requirements for its emissions monitoring operations and cash outlays for
reserves established in connection with the prior years 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 May 1995 related to the Companys 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 $6.0 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. In addition, the Company intends to sell the negotiable notes
obtained in conjunction with the PRASA settlement.
The businesses of the Company have not historically required
significant ongoing capital expenditures. For the six months ended April
30, 1995 and the years ended October 31, 1994 and 1993, total capital
expenditures were $3,255,000, $5,523,000 and $3,880,000, respectively. At
April 30, 1995, the Company had no material outstanding purchase
commitments for capital expenditures.
As a result of the Company entering into the New Credit Facility, the
Companys existing performance and surety bond agreements with Reliance
Surety Company will terminate on July 14, 1995, absent an extension by
Reliance. The Company is negotiating a new bond underwriting agreement
with Reliance and expects to enter into a new arrangement by July 14, 1995
or shortly thereafter.
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
Reference is made to Part I Item 1 (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 Companys quarterly report on Form 10Q
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.
ITEMS 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 1. Secured Guaranteed Credit Agreement dated as of
March 10, 1995.
Exhibit 2. Settlement Agreement dated May 26, 1995 by and
between Metcalf & Eddy, Inc. et al. and Puerto
Rico Aqueduct and Sewer Authority.
Exhibit 11. Computation of per share earnings.
Exhibit 27. Financial Data Schedule
(b) On June 2, 1995, the Company filed a report on Form 8K reporting
the settlement of the PRASA litigation. See Part I Item 1 -- 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 June 14, 1995 /s/ Alain Brunais
-----------------------------------
Alain Brunais
Chief Financial Officer