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Exhibit 99.1
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OHM CORPORATION NEWS RELEASE
164106 U.S. ROUTE 224 EAST
P. O. BOX 551
FINDLAY, OH 45839-0551
FINANCIAL CONTACTS: PHILIP O. STRAWBRIDGE
SENIOR VICE PRESIDENT, CHIEF FINANCIAL AND ADMINISTRATIVE OFFICER
770-453-7613
PAMELA K.M. BEALL
VICE PRESIDENT AND TREASURER
419-425-6002
MEDIA CONTACT: CHERYL B. RECTORSCHEK
CORPORATE COMMUNICATIONS
703-522-5796
FOR IMMEDIATE RELEASE
O OHM ENTERS GOVERNMENT OUTSOURCING MARKET WITH ACQUISITION OF BENECO
ENTERPRISES, INC.
O SETTLEMENT AND RESOLUTION OF PREVIOUSLY DISCLOSED CLAIMS AND
LITIGATION EXPECTED TO PROVIDE OHM $12 MILLION OF CASH AND RESULT IN A
$20 MILLION CHARGE
O WRITE-DOWN OF INVESTMENT IN NSC CORPORATION CONTEMPLATED WHICH WOULD
RESULT IN A $12 MILLION NON-CASH CHARGE
FINDLAY, OHIO, JUNE 18, 1997 - OHM CORPORATION (NYSE:OHM), today
announced that it has entered the government outsourcing market for operations,
maintenance and construction at federal facilities with its acquisition of
Beneco Enterprises Inc., (Beneco) a privately held company with annual revenue
in excess of $70 million. Beneco is a leading provider of project, program and
construction management services to the Department of Defense (DOD) and other
government agencies throughout the United States. The acquisition, which was
consummated for aggregate consideration at closing of $15 million, is expected
to be immediately accretive.
James L. Kirk, Chairman, President and Chief Executive Officer,
commented, "The Beneco acquisition is the first step to leverage our core
competencies into new, high growth service areas, in this case taking advantage
of the outsourcing and privatization trend occurring across federal, state and
local levels of government. The acquisition also satisfies
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our criteria for a service related business of a recurring nature that is not
dependent on regulatory enforcement. Expansion of our portfolio of services
should allow us to continue to grow revenue and deliver increased shareholder
value."
Kirk noted that the government outsourcing market for target areas of
operations, maintenance and construction for the DOD is over $6 billion per year
and is expected to grow at 10 percent per year as the military reduces civilian
payroll to reinvest its budget in strategic defense initiatives.
Beneco has significant experience, with a strong reputation for
project performance and client satisfaction and was awarded one of the largest
Job Order Contract (JOC) procurements to date, by the DOD - the five year, $150
million Naval District D.C. JOC, which includes 19 sites in the Washington D.C.
area. Beneco's seasoned management team, Bennie Smith, Jr., President, Robert
Newberry, Vice President and Scott Doxey, Controller, will continue to direct
the operations of Beneco as a subsidiary of OHM Corporation.
"Beneco provides a foundation from which OHM can pursue other
outsourcing acquisitions and serve the DOD and Department of Energy (DOE) in
areas that extend beyond environmental cleanup. With Beneco, we will be able to
maintain or expand our presence at more than 350 military bases at which OHM
already has provided remediation services," Kirk added. "Beneco and OHM, working
together, will enter new market segments for the Army, Navy, Air Force and DOE,"
he said.
SETTLEMENT AND RESOLUTION OF PREVIOUSLY DISCLOSED CLAIMS AND LITIGATION EXPECTED
TO GENERATE $12 MILLION OF CASH AND $20 MILLION CHARGE
Separately, the Company also announced that it had reached a
settlement in principle with Citgo Petroleum Corporation, Oxy USA Inc., and
Occidental Oil and Gas Corporation of litigation concerning work in the Lake
Charles, Louisiana area undertaken by the Company in 1993. The Company has also
written down receivables against Separation and Recovery Systems, Inc. ("SRS")
for work performed by SRS under contract for the Company that was entered into
in January, 1995 and receivables against Occidental Chemical Corporation for
work performed in the Buffalo, New York area in 1993 and 1994. These matters
were discussed in the Company's 10-K. The settlement and write-down of claims
and litigation together with other receivables could result in an approximate
$20 million after-tax, second quarter charge, of which $18.5 million is
non-cash. These moves will generate approximately $12 million in cash and
significantly reduce on-going legal and administrative expenses.
WRITE-DOWN OF INVESTMENT IN NSC CORPORATION CONTEMPLATED WHICH WOULD RESULT IN A
$12 MILLION NON-CASH CHARGE
In addition to the charge for claims and litigation, the Company is
contemplating a divestiture of its 40% investment in NSC Corporation, which
would result in an approximate
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$12 million after-tax charge. The write-down would reflect the likely value to
be realized by OHM given its current intentions for this investment.
SUMMARY
James L. Kirk, Chairman, President and Chief Executive Officer,
stated, "We continuously look for ways to improve our competitive position and
profitability. The dynamic nature of this industry requires that we reduce our
overall costs and realign our resources to be successful in our growth markets
like the Department of Energy and outsourcing. At the same time, we are
investing in the people and systems required to meet the needs of our target
government clients."
He added, "In view of the opportunity to generate cash through the
settlement of a number of claims and litigation and the potential to liquidate
our investment in NSC, we decided to post a special charge in the quarter that
will allow us to eliminate the impact of these issues on future results and
further strengthen the balance sheet to support our entry into new markets."
FORWARD LOOKING STATEMENTS
Statements contained in this press release which are not historical
facts are forward-looking statements as that term is defined in the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements are
subject to risks and uncertainties which could cause actual results to differ
materially from those projected. Such risks and uncertainties include, the
Company's ability to win contracts in its target markets, industry-wide market
factors, economic conditions, and regulatory enforcement, as well as other risks
detailed in the Company's filings with the Securities and Exchange Commission.
The Company undertakes no obligation to publicly revise these forward-looking
statements to reflect events or circumstances that arise after the date of this
release.
OHM is a leading firm providing environmental and other services to
government and private industry clients and provides a broad range of services,
equipment and treatment technologies for decontamination and cleanup operations.
OHM has over 28 years experience in the environmental remediation business, has
completed over 31,000 projects, and pioneered the emergency environmental
response segment. The Company's public sector client base includes the U.S. Army
Corps of Engineers, the U.S. Departments of the Navy and the Air Force, the U.S.
EPA and work at the U.S. Department of Energy facilities, as well as private
sector clients in the petroleum, chemical, transportation and general
manufacturing industries.
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