SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of earliest event reported): MAY 13, 1994
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AIR & WATER TECHNOLOGIES CORPORATION
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(Exact name of registrant as specified in its charter)
DELAWARE 033-17921 13-3418759
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
P.O. BOX 1500, SOMERVILLE, NEW JERSEY 08876
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (908) 685-4600
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ITEM 5. OTHER EVENTS.
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On May 13, 1994, the Registrant publicly disseminated a press release
announcing that the Registrant has determined to liquidate its asbestos
abatement business and in connection therewith will take a charge for the second
quarter ended April 30, 1994 of approximately $35 million. The Registrant also
announced that it anticipates having a loss from continuing operations of
approximately $18 million for the quarter. The information contained in the
press release is incorporated herein by reference and filed as Exhibit 99.1
hereto.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
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(c) Exhibits.
99.1 The Registrant's Press Release dated May 13, 1994.
SIGNATURES
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 hereunto duly authorized.
Air & Water Technologies Corporation
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(Registrant)
Date: May 13, 1994 /s/ Eckardt C. Beck
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Eckardt C. Beck, Chairman and
Chief Executive Officer
EXHIBIT INDEX
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Exhibit Sequential
Number Description Page Number
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99.1 The Registrant's Press Release 5
dated May 13, l994.
Exhibit 99.1
TEXT OF PRESS RELEASE
AIR & WATER TECHNOLOGIES CORPORATION
U.S. HIGHWAY 22 WEST AND STATION ROAD
BRANCHBURG, NEW JERSEY 08876
FOR IMMEDIATE RELEASE CONTACT: DOUGLAS A. SATZGER
SENIOR VICE PRESIDENT AND GENERAL
COUNSEL
(908) 685-4677
AIR & WATER TECHNOLOGIES ANNOUNCES FURTHER
CHARGE, ANTICIPATED SECOND
QUARTER OPERATING LOSS
BRANCHBURG, NJ, MAY 13, 1994 - Air & Water Technologies Corporation
(AMEX symbol: AWT) announced today that it has determined to liquidate its
asbestos abatement business and in connection therewith will take a charge for
the second quarter ended April 30, 1994 of approximately $35 million. The
Company also announced that it anticipates reporting a loss from continuing
operations for the quarter of approximately $18 million. Results for the
quarter are expected to be finalized and announced during the first week of
June.
The Company has apprised Compagnie Generale des Eaux (CGE), its
largest shareholder and a party to the Investment Agreement dated as of March
30, 1994 previously announced, of its decision to liquidate the asbestos
abatement business and the anticipated operating loss for the second quarter,
and CGE has informed the Company of its intention to proceed with the
transactions contemplated by the Investment Agreement, subject to approval by
the Company's shareholders and other conditions set forth in the Investment
Agreement. The Company has also notified its institutional lenders of these
developments and is seeking from them any waivers or amendments that are
required under applicable loan documentation.
The Company previously reported in January 1994 that it would
discontinue its asbestos abatement operations and that these operations, which
it would seek to sell, had been considered a discontinued operation for
financial reporting purposes as of the Company's 1993 fiscal year. The Company
made its determination to discontinue this business after an operational review,
initiated in the fourth quarter of its 1993 fiscal year, that was prompted by
increasing negative cash flows during fiscal 1993. The operational review led to
a more extensive investigation of, among other things, recorded financial
results and internal operating controls within the asbestos abatement operations
after the
discovery of accounting irregularities. The Company further reported
that certain members of senior management of the asbestos abatement operations
had been replaced. Subsequently, for the first quarter of fiscal 1994, the
Company reported that the asbestos abatement operations incurred a loss of
$3,229,000 primarily due to revisions of estimates of costs to complete existing
contracts.
The Company's determination to liquidate its asbestos abatement
business and take the additional write-off is based upon consideration of a
number of factors occurring in fiscal 1994 that have caused the Company to
conclude that it will be unable to realize value through the sale of the
business and associated assets. The Company's efforts to sell the business on a
reasonable basis have been unsuccessful and, since the announcement of the
Company's plans to discontinue the business, the operations' performance has
continued to deteriorate. Factors that have contributed to the declining
performance include the loss of management and other personnel with the
experience and skill necessary for the business to be operated profitably and
without continuing negative cash flows, deteriorating margins both with respect
to new project contracts and existing backlog, greater difficulties in obtaining
change orders from clients, and the likelihood of further erosion of margins due
to substantial increases in required workers' compensation contributions for a
significant percentage of the business's employees.