SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-1363
ENVIROSOURCE, INC.
(Exact name of Registrant as specified in its charter)
Delaware 34-0617390
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Five High Ridge Park, P.O. Box 10309, Stamford, CT 06904-2309
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(203) 322-8333
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 for such shorter period 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
The number of shares outstanding of the Registrant's Common
Stock as of the close of business on August 4, 1994 was
40,055,759.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
EnviroSource, Inc.
CONSOLIDATED CONDENSED BALANCE SHEET
(Dollars in thousands)
June 30, December 31,
1994 1993
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 1,589 $ 10,582
Accounts receivable, less allowance
for doubtful accounts of $1,026
and $944 37,385 36,196
Other current assets 7,243 8,093
--------- ---------
Total current assets 46,217 54,871
Property, plant and equipment, at cost 269,630 248,785
Less allowance for depreciation 117,437 107,241
--------- ---------
152,193 141,544
Goodwill, less amortization 169,659 172,166
Landfill permits, less amortization 23,919 24,661
Closure trust funds and deferred
charges, less amortization 18,330 14,909
Debt issuance costs, less amortization 9,117 9,061
Other assets 13,185 10,033
--------- ---------
$ 432,620 $ 427,245
========= =========
See Notes to Consolidated Condensed Financial Statements.
<PAGE>
EnviroSource, Inc.
CONSOLIDATED CONDENSED BALANCE SHEET -- Continued
(Dollars in thousands)
June 30, December 31,
1994 1993
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade payables $ 14,258 $ 13,607
Salaries, wages and related benefits 9,686 9,075
Insurance 6,996 7,217
Interest 1,141 1,072
Estimated restructuring costs 7,806 10,900
Other current liabilities 20,555 21,904
Current portion of debt and in 1993
redeemable preferred stock 5,022 8,492
-------- ---------
Total current liabilities 65,464 72,267
Long-term debt 246,922 235,842
Other liabilities 66,459 66,208
Class G redeemable preferred stock 38,603 38,711
Commitments and contingencies (Note D)
Stockholders' equity:
Common stock, par value $.05 per
share, 60,000,000 shares author-
ized, 40,055,759 shares issued and
outstanding in 1994 and 40,052,259
shares in 1993 2,003 2,003
Capital in excess of par value 162,469 162,461
Accumulated deficit (147,453) (148,605)
Stock purchase loans receivable from
officers (840) (840)
Canadian translation adjustment (1,007) (802)
-------- ---------
Total stockholders' equity 15,172 14,217
-------- ---------
$432,620 $ 427,245
======== =========
See Notes to Consolidated Condensed Financial Statements.
<PAGE>
EnviroSource, Inc.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS (UNAUDITED)
(Dollars in thousands, except per share amounts)
Three months ended Six months ended
June 30, June 30,
1994 1993 1994 1993
Revenues $63,458 $ 77,902 $121,881 $137,766
Cost of revenues 45,735 59,894 90,109 105,607
Selling, general and
administrative expenses 8,448 9,246 16,242 18,052
------- -------- -------- --------
Operating income 9,275 8,762 15,530 14,107
Interest income 235 211 541 437
Interest expense (6,176) (8,051) (12,498) (16,282)
------- -------- -------- --------
Income (loss) before income
taxes 3,334 922 3,573 (1,738)
Income tax expense 1,018 1,050 1,727 1,585
------- -------- -------- --------
Income (loss) before extraordi-
nary loss and cumulative
effect of accounting change 2,316 (128) 1,846 (3,323)
Extraordinary loss from extin-
guishment of debt, reduced by
$434 income tax benefit (21,496) (21,496)
Cumulative effect of income
tax accounting change (2,302)
------- -------- -------- --------
Net income (loss) 2,316 (21,624) 1,846 (27,121)
Preferred stock dividend
requirements, reduced by
retirement gains of $158
and $523 in 1994 (431) (841) (694) (1,894)
------- -------- -------- --------
Income (loss) applicable
to common shares $ 1,885 $(22,465) $ 1,152 $(29,015)
======= ======== ======== ========
Income (loss) per share:
Before extraordinary loss
and cumulative effect of
accounting change $ .05 $ (.03) $ .03 $ (.19)
Extraordinary loss (.66) (.77)
Cumulative effect of income
tax change (.08)
------- -------- -------- --------
Net income (loss) $ .05 $ (.69) $ .03 $ (1.04)
======= ======== ======== ========
See Notes to Consolidated Condensed Financial Statements.
<PAGE>
EnviroSource, Inc.
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS (UNAUDITED)
(Dollars in thousands)
Six months ended
June 30,
1994 1993
OPERATING ACTIVITIES
Income (loss) before extraordinary loss and
cumulative effect of accounting change $ 1,846 $ (3,323)
Adjustments to reconcile income (loss) to
cash provided by operations:
Charge in lieu of income taxes 507 434
Depreciation 11,895 13,719
Amortization 4,053 6,525
Closure cost amortization and accruals 1,213 1,813
Restructuring costs (2,601)
Other changes in working capital (2,177) (1,566)
Other 2,282 (1,044)
-------- ---------
Cash provided by operating activities 17,018 16,558
-------- ---------
INVESTING ACTIVITIES
Property, plant and equipment:
Additions (22,800) (15,493)
Proceeds from dispositions 153 73
Purchase of intangibles (2,948)
Landfill permit additions and closure
expenditures (160) (344)
Closure trust fund payments (4,178) (285)
Ongoing net cash flows related to
IU acquisition 616 (1,400)
Other (2,894) (191)
-------- ---------
Cash used by investing activities (32,211) (17,640)
-------- ---------
FINANCING ACTIVITIES
Sale of common stock 8 42,900
Issuance of debt 17,500 18,500
Debt issuance costs (579) (780)
Debt repayments (6,521) (50,183)
Cash portion of extraordinary loss (738)
Retirement of preferred stock (4,208) (5,148)
-------- ---------
Cash provided by financing activities 6,200 4,551
-------- ---------
CASH AND CASH EQUIVALENTS
Increase (decrease) during the period (8,993) 3,469
Beginning of year 10,582 10,695
-------- ---------
End of period $ 1,589 $ 14,164
======== =========
See Notes to Consolidated Condensed Financial Statements.
<PAGE>
NOTE A. BASIS OF PRESENTATION
The accompanying unaudited consolidated condensed financial
statements have been prepared in accordance with generally
accepted accounting principles for interim financial information.
In the opinion of management, all adjustments (consisting only of
normal recurring accruals) necessary for a fair presentation have
been included. Operating results for the three and six month
periods ended June 30, 1994 are not necessarily indicative of the
results that may be expected for the year ending December 31,
1994. The consolidated condensed balance sheet at December 31,
1993 has been derived from audited financial statements at that
date. For further information, refer to the consolidated
financial statements and notes thereto included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1993.
Per share amounts are based on the weighted average number of
common shares outstanding plus in 1994 the dilutive effect of
stock options and warrants: 40,357,000 and 32,422,000 for the
three months ended June 30, 1994 and 1993; 40,447,000 and
28,007,000 for the six months then ended. Class G preferred
stock had no dilutive effects.
NOTE B. DEBT
On June 14, 1994, the Company completed an $8.5 million
Industrial Revenue Bond financing, due in 2002. Interest is at
8.25% (9.2% effective rate including amortization of issuance
costs). The proceeds are being used to expand the Company's
Idaho landfill.
At June 30, 1994, $5 million of revolving credit borrowings and
$12.2 million of standby letters of credit were outstanding.
The Company paid interest of $11.8 million and $13.3 million
during the six months ended June 30, 1994 and 1993, excluding $.4
million and $.3 million capitalized in these periods.
NOTE C. INCOME TAXES
Income tax expense consists primarily of state and foreign income
taxes plus charges in lieu of federal taxes. The 1994 effective
tax rate contemplates recognition of federal tax benefits
resulting from estimated costs included in the 1993 restructuring
charge that will become deductible and reduce taxable income in
the 1994 tax return. Such benefits reduced the six month 1994
federal tax expense by $1.2 million.
The Company paid income taxes, net of refunds, of $1.1 million
and $.7 million for the six months ended June 30, 1994 and 1993.
NOTE D. COMMITMENTS AND CONTINGENCIES
As of June 30, 1994 the Company is committed to spend $16 million
for equipment additions, a dross processing plant that is under
construction and landfill development and treatment facilities.
To secure its obligations to close its Idaho landfill and perform
post-closure monitoring and maintenance procedures for 30 years,
the Company must deposit into a closure trust fund approximately
$1.1 million annually through 1998. The Company is also
obligated to make nonrefundable payments into Ohio closure trust
funds of approximately $3.7 million in late 1994, $7.6 million in
1995 and $3.9 million in 1996 to fund the latter stages of Ohio
landfill closure and all post-closure procedures in perpetuity.
The Company believes these payments together with those
previously made will satisfy substantially all of its closure and
post-closure obligations, based on current regulations and
permitted capacity.
At June 30, 1994, the Company was contingently liable for $12.2
million of letters of credit outstanding under its bank credit
agreement, approximately $5 million of which were issued to
secure liabilities already reflected in the consolidated
condensed balance sheet.
In connection with IU International Corporation's ("IU's") 1985
disposition of P-I-E Nationwide, Inc. ("PIE"), IU guaranteed
bonds or undertakings made to surety companies and/or states of
the United States in connection with PIE's self-insurance
programs for workers' compensation and other losses arising
through 1987. PIE commenced bankruptcy proceedings in 1990 and
ceased making payments in respect of its self-insured claims.
The Company's obligations for these claims aggregate an estimated
$17.3 million at June 30, 1994, and currently require the Company
to make payments averaging $.5 million per quarter. Although the
Company has the right to receive proceeds from the liquidation of
various classes of PIE assets, the timing and amount of receipt,
if any, cannot be predicted. However, because sufficient
liabilities are reflected in the consolidated condensed balance
sheet and the Company's estimates do not assume any such
liquidation proceeds, the Company's financial condition as
reported at June 30, 1994 will not be adversely affected if IU
receives no proceeds from such liquidation.
PIE's bankruptcy has triggered withdrawal liabilities to certain
multi-employer pension plans estimated by PIE to aggregate $58
million. Early in 1991 the trustee of the largest plan sought
information from the Company for the stated purpose of
determining whether the circumstances of IU's 1985 sale of PIE
would justify a claim against IU for any deficiencies in PIE's
payment of such withdrawal liabilities. However, no such claim
has been asserted. The Company believes no such claim would be
warranted. Also in 1991, the same pension plan trustee demanded
payment of approximately $38 million from a more recent owner of
most of PIE's capital stock and such owner in turn demanded an
identical amount from IU. Such owner has made no attempt to
pursue its demand. The Company believes the ultimate outcome of
these matters will not have a material adverse effect on its
financial condition or results of operations.
The U.S. Environmental Protection Agency and applicable state
agencies have issued "Part B" permits under the Resource
Conservation and Recovery Act, as amended ("RCRA"), to the
Company's Ohio and Idaho landfills. These permits are subject to
regulatory review five years after issuance and may be modified
by the applicable government agencies at any time.
The Company and its competitors and customers are subject to a
complex, evolving array of federal, state and local environmental
laws and regulations. In particular, such regulations can affect
the demand for Treatment and Disposal Services, and could also
require this segment to incur significant costs for such matters
as facility upgrading, remediation or other corrective action and
landfill closure and post-closure maintenance and monitoring.
Any such cost increases would normally affect all hazardous waste
landfills, so the Company would expect to be able to offset
increased operating compliance costs by increasing prices charged
to customers.
The City of Oregon, Ohio determined not to appeal the Ohio State
Environmental Board of Review's April 1994 dismissal of the
City's April 1993 appeal of a determination by the Ohio
Environmental Protection Agency ("OEPA") not to modify or revoke
the Company's Ohio landfill permit. In March 1993, the City had
requested that the OEPA Director modify or revoke the permit,
alleging that the Ohio Hazardous Waste Facility Board would not
have approved the May 1991 issuance of the permit if it had been
aware of certain scientific and technical data developed by the
Company. The City's decision not to appeal concludes this
matter.
In several instances the Company has been named as a potentially
responsible party regarding properties that could be subject to
remedial action under RCRA or the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended. As
to such matters, the Company is not subject to any administrative
or judicial order requiring material expenditures, and the
Company has determined that it is not likely to be subject to
sanctions or held responsible for material remediation
expenditures. In the opinion of management, the outcome of the
matters described in this paragraph will not have a material
adverse effect on the Company's financial condition or results of
operations.
The Company is a party to litigation, proceedings and other
contested matters, arising in the normal course of its present or
former businesses, for which it is possible that the Company's
exposure could exceed by as much as $3 million the amounts
currently recorded. In the opinion of management, the amounts
recorded adequately reflect the expected outcomes of such matters
and the final outcome of all such matters will not have a
material adverse effect on the Company's financial condition or
results of operations.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30
Revenues were $14.4 million (19%) lower in 1994, reflecting a
reduction of $15.7 million (56%) for Treatment and Disposal
Services partially offset by an increase of $1.3 million (3%) for
Industrial Environmental Services. The Treatment and Disposal
Services decrease was largely the result of a $13.1 million
decline in revenues from long-term contracts to design, supply
and construct scrubber sludge stabilization systems for electric
utilities, due to the timing of billings for major 1993 equipment
installations. Also, hazardous waste landfilling revenues
declined due to a substantial reduction in disposal volumes and
somewhat lower prices. The reduced volumes are caused by
continued weak demand, which is attributed primarily to slowdowns
in cleanup projects. The Industrial Environmental Services
revenues increase is attributable to increased production volumes
at steel mill customers, partially offset by the absence of
revenue ($.9 million in 1993) from two flue dust recycling units
that were terminated as a part of the Company's 1993
restructuring.
Gross profit decreased $.3 million (2%) reflecting a $1.5 million
(31%) reduction for Treatment and Disposal Services offset by a
$1.2 million (9%) improvement at Industrial Environmental
Services. The Treatment and Disposal Services shortfall resulted
from the reduced landfilling revenues mentioned above, partially
offset by positive results from other services and the absence of
losses ($.2 million in 1993) from operations that were terminated
as a part of the 1993 restructuring. The decline in long-term
contract revenues had a minimal effect on the 1994 versus 1993
gross profit comparison. 1994 gross profits during the higher-
margin design and testing phases of long-term contracts,
including work on a new contract during the quarter, were
slightly higher than 1993 gross profits during lower-margin
equipment installation phases. Industrial Environmental Services
gross profit increased due to the higher production volumes of
its steel mill customers and the absence of losses ($.5 million
in 1993) from the flue dust recycling units that were terminated
as a part of the 1993 restructuring.
Selling, general and administrative costs decreased $.8 million,
primarily due to savings resulting from headcount reductions and
other steps taken in the 1993 restructuring.
Due to the factors described above, operating income increased
$.5 million (6%). The increase includes a $1 million increase
for Industrial Environmental Services and a $.5 million reduction
in corporate headquarters costs, offset by a $1 million Treatment
and Disposal Services shortfall.
Interest expense decreased $1.9 million, primarily due to the
1993 recapitalization. The recapitalization also increased by
24% the average shares of common stock outstanding.
Due to the factors described above, 1994 net income was $2.3
million compared with a 1993 net loss of $21.6 million, which
included a $21.5 million extraordinary loss from extinguishment
of debt.
Preferred stock dividend requirements were lower in 1994 than in
1993 due to the 1993 exchange of the Class H preferred stock for
common stock and a small 1994 gain from retiring 7,500 shares of
Class G preferred stock.
RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30
Revenues were $15.9 million (12%) lower in 1994, reflecting a
reduction of $18.2 million (45%) for Treatment and Disposal
Services partially offset by an increase of $2.3 million (2%) for
Industrial Environmental Services. The Treatment and Disposal
Services decrease was largely the result of a $13 million decline
in revenues from long-term contracts to design, supply and
construct scrubber sludge stabilization systems for electric
utilities, due to the timing of billings for major 1993 equipment
installations. Also, hazardous waste landfilling revenues
declined as a result of a substantial reduction in disposal
volumes. The reduced volumes are caused by continued weak
demand, which is attributed primarily to slowdowns in cleanup
projects, particularly during the severe winter weather of the
first quarter. The Industrial Environmental Services revenues
increase is attributable to increased production volumes at steel
mill customers, partially offset by the absence of revenue ($2
million in 1993) from two flue dust recycling units that were
terminated as a part of the Company's 1993 restructuring.
Gross profit decreased $.4 million (1%) reflecting a $3.2 million
(38%) reduction for Treatment and Disposal Services offset by a
$2.8 million (12%) improvement at Industrial Environmental
Services. The Treatment and Disposal Services shortfall resulted
from the reduced landfilling revenues mentioned above, partially
offset by positive results from other services and the absence of
losses ($.6 million in 1993) from operations that were terminated
as a part of the 1993 restructuring. The decline in long-term
contract revenues had a negligible effect on the gross profit
comparison for the reasons discussed in the three month
comparison. Industrial Environmental Services gross profit
increased due to the higher production volumes of its steel mill
customers and the absence of losses ($.9 million in 1993) from
the flue dust recycling units that were terminated as a part of
the 1993 restructuring.
Selling, general and administrative costs decreased $1.8 million,
primarily due to savings resulting from headcount reductions and
other steps taken in the 1993 restructuring.
Due to the factors described above, operating income increased
$1.4 million (10%). The increase includes a $2.6 million
increase for Industrial Environmental Services and a $.8 million
reduction in corporate headquarters costs, offset by a $2 million
Treatment and Disposal Services shortfall.
Interest expense decreased $3.8 million, primarily due to the
1993 recapitalization. The recapitalization also increased by
43% the average shares of common stock outstanding.
Due to the factors described above, 1994 net income was $1.8
million compared with a 1993 net loss of $27.1 million, which
included both the $21.5 million extraordinary loss from
extinguishment of debt and a $2.3 million charge for the
cumulative effect of a change in accounting for income taxes.
Preferred stock dividend requirements were lower in 1994 than in
1993 due to the 1993 exchange of the Class H preferred stock for
common stock and a $.5 million gain from retiring 37,500 shares
of Class G preferred stock.
LIQUIDITY AND CAPITAL RESOURCES
The Company's liquidity requirements arise primarily from the
funding of its capital expenditures, Treatment and Disposal
Services trust fund payments, working capital needs and debt
service obligations. The Company must also fund obligations
resulting from its 1993 restructuring. Historically, the Company
has met such requirements with cash flows generated by operations
and with additional debt financing.
The Company expects to spend approximately $40 million for
capital additions in 1994, primarily for Industrial Environmental
Services equipment additions and an aluminum dross processing
plant in Utah and for Treatment and Disposal Services landfill
development and treatment facilities at both the Ohio and Idaho
landfills. $22.8 million was spent through June 30, 1994.
Treatment and Disposal Services' landfill permits require it to
fund closure and post-closure monitoring and maintenance
obligations by making essentially nonrefundable trust fund
payments. The Company estimates its future trust fund payments
as follows: for the Idaho landfill, approximately $1.1 million
annually through 1998, and for the Ohio landfill, approximately
$3.7 million in late 1994, $7.6 million in 1995 and $3.9 million
in 1996.
In the fourth quarter of 1993, the Company recorded a $22 million
restructuring charge, primarily to (i) terminate two unprofitable
flue dust recycling units and other unprofitable units, (ii)
discontinue efforts to obtain a Pennsylvania hazardous waste
landfill permit, and (iii) reorganize its Envirosafe and
Conversion Systems units into the Treatment and Disposal Services
business segment. Approximately $10 million of the total
restructuring charge consists of non-cash losses resulting
primarily from the write-off of property, plant and equipment.
The other $12 million was provided for cash costs. Most of the
changes contemplated in the 1993 restructuring have been
completed, and $2.6 million of the cash costs were incurred in
the first six months of 1994, primarily for employee severance
and terminating operations. An additional $3 million of such
cash costs are expected in the second half of 1994 with the
remaining cash expenditures carrying over into 1995.
The consolidated balance sheet reflects negative working capital
of $19.2 million at June 30, 1994, including $7.8 million of
estimated restructuring costs and $13.3 million of estimated IU
acquisition obligations, which are unrelated to ongoing
operations.
The Company has not paid dividends on its Class G preferred stock
since July 1990 and is prohibited from paying dividends by its
bank credit facility. The facility permits the Company to redeem
(including accumulated dividends) or retire shares of its Class G
preferred stock with up to $5 million in cash at any time. In
the first half of 1994, the Company used $4.2 million of this
capacity to retire 37,500 shares of Class G preferred stock.
Subject to a test that requires improved financial performance,
the amount of additional allowable Class G retirements
progressively increases to $30.8 million by July 1995. The
facility also permits the Company to redeem shares of its Class G
preferred stock with the net cash proceeds from future issuances
of certain capital stock and debt. Redemption of the remaining
outstanding shares of Class G preferred stock, assuming no
dividends are paid earlier, would require $43.2 million in 1996.
Cash on hand, funds from operations and borrowing capacity under
the bank credit facility are expected to satisfy the Company's
operating and debt service requirements through the term of the
bank facility, as well as provide funds to retire a portion of
the Company's Class G preferred stock. The Company may be
required to issue additional capital stock or debt to redeem the
balance of the Class G preferred stock.
The bank credit facility provides $60 million of revolving credit
borrowing and letter of credit capacity, declining by $5 million
on each of July 15, 1996 and 1997 and terminating on July 15,
1998. At June 30, 1994, $5 million of revolving credit
borrowings and $12.2 million of standby letters of credit were
outstanding.
The Company has substantial deferred tax assets arising from
federal income tax net operating loss carryforwards. The Company
also has substantial additional deferred tax assets that will
become available to reduce future federal income taxes as the
underlying book/tax differences become deductible for tax
purposes. Consequently, the Company does not expect to pay any
federal income taxes for 1994, and thereafter the Company expects
to utilize its deferred tax assets to reduce substantially its
federal income tax payments over the next several years.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
On March 11, 1993, the City of Oregon, Ohio requested
that the Director of the Ohio Environmental Protection Agency
("OEPA") modify or revoke Envirosafe Services, Inc.'s
("Envirosafe") Ohio landfill permit, alleging that if the Ohio
Hazardous Waste Facility Board ("HWFB") had been aware of certain
scientific and technical data developed by Envirosafe, HWFB would
not have approved the issuance of the permit in May 1991. On
April 12, 1993, the OEPA Director determined not to modify or
revoke the permit, concluding that the data in question presented
no new or meaningful information in light of other data already
in the record and the final design of the disposal cell
authorized by the permit. On May 12, 1993, the City of Oregon
filed a notice of appeal before the Ohio State Environmental
Board of Review ("EBR") seeking review of the OEPA Director's
April 12, 1993 decision.
On April 21, 1994, the EBR dismissed the City of
Oregon's appeal. The City determined not to appeal the EBR's
order thus concluding this matter.
Item 3. Defaults Upon Senior Securities.
The Company's bank credit facility prohibits the
Company from declaring and paying dividends on its Class G $7.25
Cumulative Convertible Preferred Stock (the "Class G Stock")
until July 15, 1998. The Company has omitted regular quarterly
dividends since October 1990 on the Class G Stock. The total
amount of unpaid dividends on the outstanding shares of the Class
G Stock is currently approximately $9 million.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
2.1 - Second Modified Plan of Reorganization of the Company
(incorporated herein by reference to Exhibits 1, 2
and 3 to the Company's Current Report on Form 8-K
dated November 30, 1983 (File No. 1-1363)).
2.2 - Order, dated January 13, 1984, of the United States
District Court for the Northern District of Ohio
(modifying the Second Modified Plan of Reorganization
of the Company) (incorporated herein by reference to
Exhibit 2.2 to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1983
(File No. 1-1363)).
4.1 - Term Loan Agreement, dated as of December 28, 1990,
between West One Bank, N.A., Imsamet of Idaho, Inc.,
the Company and International Mill Service, Inc.
(The Company agrees to furnish a copy of such
agreement to the Commission upon request).
4.2 - Letter Amendment, effective January 28, 1992, to the
Term Loan Agreement to which reference is made in
Exhibit 4.1 to this Quarterly Report on Form 10-Q.
(The Company agrees to furnish a copy of such
agreement to the Commission upon request.)
4.3 - Loan and Security Agreement, dated as of April 6,
1993, between IMS Funding Corporation and Greyhound
Financial Corporation. (The Company agrees to
furnish a copy of such agreement to the Commission
upon request.)
4.4 - Indenture, dated as of July 1, 1993, between the
Company and United States Trust Company of New York,
as Trustee, relating to the Company's 9-3/4% Senior
Notes due 2003, including the form of such Notes
attached as Exhibit A thereto (incorporated herein by
reference to Exhibit 4.10 to the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended June
30, 1993 (File No. 1-1363)).
4.5 - Registration Rights Agreement, dated as of May 13,
1993, among the Company, FS Equity Partners II, L.P.,
The IBM Retirement Plan Trust Fund and Enso Partners,
L.P. (incorporated herein by reference to Exhibit
4.29 to Amendment No. 1 to the Company's Registration
Statement on Form S-1, filed June 14, 1993 (File No.
33-62050)).
4.6 - Warrants to purchase shares of Common Stock of the
Company issued to FS Equity Partners II, L.P.,
pursuant to the Stock Purchase Agreement, dated as of
April 16, 1993, among the Company, The Dyson-Kissner-
Moran Corporation, WM Financial Corporation and FS
Equity Partners II, L.P., as amended (incorporated
herein by reference to Exhibit 4.30 to Amendment No.
1 to the Company's Registration Statement on Form S-
1, filed June 14, 1993 (File No. 33-62050)).
4.7 - Warrants to purchase shares of Common Stock of the
Company issued to The IBM Retirement Plan Trust Fund,
pursuant to the Purchase Agreement and Assignment and
Assumption Agreement, dated as of May 13, 1993, among
the Company, FS Equity Partners II, L.P. and The IBM
Retirement Plan Trust Fund (incorporated herein by
reference to Exhibit 4.31 to Amendment No. 1 to the
Company's Registration Statement on Form S-1, filed
June 14, 1993 (File No. 33-62050)).
4.8 - Warrants to purchase shares of Common Stock of the
Company issued to Enso Partners, L.P., pursuant to
the Stock Purchase Agreement, dated as of May 13,
1993, among the Company, The Dyson-Kissner-Moran
Corporation, WM Financial Corporation and Enso
Partners, L.P. (incorporated herein by reference to
Exhibit 4.32 to Amendment No. 1 to the Company's
Registration Statement on Form S-1, filed June 14,
1993 (File No. 33-62050)).
4.9 - Credit Agreement, dated as of June 24, 1993, among
the Company, International Mill Service, Inc., the
banks parties thereto, Chemical Bank, Banque Paribas
and Credit Lyonnais New York Branch, as Co-Agents,
and Chemical Bank, as Administrative Agent
(incorporated herein by reference to Exhibit 28.3 to
the Company's Current Report on Form 8-K, dated July
1, 1993 (File No. 1-1363)).
4.10 - First Amendment to the Credit Agreement, dated as of
December 23, 1993, among the Company, International
Mill Service, Inc., the banks parties thereto,
Chemical Bank, Banque Paribas and Credit Lyonnais New
York Branch, as Co-Agents, and Chemical Bank, as
Administrative Agent (incorporated herein by
reference to Exhibit 4.10 to the Company's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1993 (File No. 1-1363)).
4.11 - Warrants to purchase 300,000 shares of Common Stock
issued to Chemical Bank, NCNB Texas National Bank,
Banque Paribas, National Bank of Canada and Royal
Bank of Canada (incorporated herein by reference to
Exhibit 10.24 to Amendment No. 2 to the Company's
Registration Statement on Form S-1, filed October 31,
1991 (File No. 33-42381)).
4.12 - Loan Agreement between the Industrial Development
Corporation of Owyhee County, Idaho and Envirosafe
Services of Idaho, Inc. relating to $8,500,000
Industrial Revenue Bonds, Series 1994, dated as of
June 1, 1994, and related agreements. (The Company
agrees to furnish a copy of such agreements to the
Commission upon request).
10.1 - Restated Incentive Stock Option Plan of the Company,
as amended (incorporated herein by reference to
Exhibit A to the Company's Registration Statement on
Form S-8, filed January 17, 1989 (File No. 33-
26633)).
10.2 - Stock Purchase Agreement, dated as of April 16, 1993,
among the Company, The Dyson-Kissner-Moran
Corporation, WM Financial Corporation and FS Equity
Partners II, L.P. (incorporated herein by reference
to Exhibit 4.21 to the Company's Form 8 Amendment to
Annual Report on Form 10-K for the fiscal year ended
December 31, 1992 (File No. 1-1363)).
10.3 - First Amendment to the Stock Purchase Agreement,
dated as of May 13, 1993, among the Company, The
Dyson-Kissner-Moran Corporation, WM Financial
Corporation and FS Equity Partners II, L.P.
(incorporated herein by reference to Exhibit 28.2 to
the Company's Current Report on Form 8-K, dated May
27, 1993 (File No. 1-1363)).
10.4 - Purchase Agreement and Assignment and Assumption
Agreement, dated as of May 13, 1993, among the
Company, FS Equity Partners II, L.P. and The IBM
Retirement Plan Trust Fund (incorporated herein by
reference to Exhibit 28.4 to the Company's Current
Report on Form 8-K, dated May 27, 1993 (File No. 1-
1363)).
10.5 - Stock Purchase Agreement, dated as of May 13, 1993,
among the Company, The Dyson-Kissner-Moran
Corporation, WM Financial Corporation and Enso
Partners, L.P. (incorporated herein by reference to
Exhibit 28.3 to the Company's Current Report on Form
8-K, dated May 27, 1993 (File No. 1-1363)).
10.6 - Promissory Note of Louis A. Guzzetti, Jr., dated
March 31, 1993, amending and replacing the Promissory
Notes dated October 15, 1987, March 31, 1991 and
March 31, 1992 and the Letter Amendments dated April
13, 1991 and May 12, 1992, payable to the Company in
the principal amount of $432,678.50 (incorporated
herein by reference to Exhibit 10.13 to Post-
Effective Amendment No. 1 to the Company's
Registration Statement on Form S-1, filed September
16, 1993 (File No. 33-46930)).
10.7 - Promissory Notes of Aarne Anderson, Jerrold I.
Dolinger, George E. Fuehrer, George T. Milano and Mr.
Guzzetti, dated as of April 1, 1993, amending and
replacing the Promissory Notes dated January 13,
1989, April 1, 1991 and April 1, 1992, payable to the
Company in the aggregate principal amount of
$1,058,158 (incorporated herein by reference to
Exhibit 10.17 to Post-Effective Amendment No. 1 to
the Company's Registration Statement on Form S-1,
filed September 16, 1993 (File No. 33-46930)).
10.8 - Stock Option Agreement, dated March 18, 1992, between
the Company and Raymond P. Caldiero (incorporated
herein by reference to Exhibit 10.20 to the Company's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1992 (File No. 1-1363)).
10.9 - Stock Option Agreement, dated March 18, 1992, between
the Company and Jeffrey G. Miller (incorporated
herein by reference to Exhibit 10.21 to the Company's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1992 (File No. 1-1363)).
10.10 - Amendment, dated August 5, 1993, to the Stock Option
Agreement, dated March 18, 1992, between the Company
and Jeffrey G. Miller, to which reference is made in
Exhibit 10.9 to this Quarterly Report on Form 10-Q
(incorporated herein by reference to Exhibit 10.22 to
Post-Effective Amendment No. 1 to the Company's
Registration Statement on Form S-1, filed September
16, 1993 (File No. 33-46930)).
10.11 - Stock Option Agreement, dated August 5, 1993, between
the Company and Wallace B. Askins (incorporated
herein by reference to Exhibit 10.23 to Post-
Effective Amendment No. 1 to the Company's
Registration Statement on Form S-1, filed September
16, 1993 (File No. 33-46930)).
10.12 - Stock Option Agreement, dated November 1, 1993,
between the Company and Arthur R. Seder, Jr.
(incorporated herein by reference to Exhibit 10.12 to
the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1993 (File No. 1-
1363)).
10.13 - 1993 Stock Option Plan of the Company (incorporated
herein by reference to Exhibit 10.21 to Amendment No.
1 to the Company's Registration Statement on Form S-
1, filed June 14, 1993 (File No. 33-62050)).
(b) Reports on Form 8-K.
During the quarter ended June 30, 1994, the Company
filed no Current Reports on Form 8-K.
<PAGE>
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 thereunto duly authorized.
EnviroSource, Inc.
Dated: August 9, 1994 /s/ James C. Hull
James C. Hull
Vice President and Chief
Financial Officer
(Duly Authorized Officer
and Principal Financial
and Accounting Officer)
<PAGE>
EXHIBIT INDEX
Number Exhibit Page
2.1 - Second Modified Plan of Reorganization of
the Company (incorporated herein by
reference to Exhibits 1, 2 and 3 to the
Company's Current Report on Form 8-K
dated November 30, 1983 (File No. 1-
1363)).
2.2 - Order, dated January 13, 1984, of the
United States District Court for the
Northern District of Ohio (modifying the
Second Modified Plan of Reorganization of
the Company) (incorporated herein by
reference to Exhibit 2.2 to the Company's
Annual Report on Form 10-K for the fiscal
year ended December 31, 1983 (File No. 1-
1363)).
4.1 - Term Loan Agreement, dated as of December
28, 1990, between West One Bank, N.A.,
Imsamet of Idaho, Inc., the Company and
International Mill Service, Inc. (The
Company agrees to furnish a copy of such
agreement to the Commission upon
request).
4.2 - Letter Amendment, effective January 28,
1992, to the Term Loan Agreement to which
reference is made in Exhibit 4.1 to this
Quarterly Report on Form 10-Q. (The
Company agrees to furnish a copy of such
agreement to the Commission upon
request.)
4.3 - Loan and Security Agreement, dated as of
April 6, 1993, between IMS Funding
Corporation and Greyhound Financial
Corporation. (The Company agrees to
furnish a copy of such agreement to the
Commission upon request.)
4.4 - Indenture, dated as of July 1, 1993,
between the Company and United States
Trust Company of New York, as Trustee,
relating to the Company's 9-3/4% Senior
Notes due 2003, including the form of
such Notes attached as Exhibit A thereto
(incorporated herein by reference to
Exhibit 4.10 to the Company's Quarterly
Report on Form 10-Q for the fiscal
quarter ended June 30, 1993 (File No. 1-
1363)).
4.5 - Registration Rights Agreement, dated as
of May 13, 1993, among the Company, FS
Equity Partners II, L.P., The IBM
Retirement Plan Trust Fund and Enso
Partners, L.P. (incorporated herein by
reference to Exhibit 4.29 to Amendment
No. 1 to the Company's Registration
Statement on Form S-1, filed June 14,
1993 (File No. 33-62050)).
4.6 - Warrants to purchase shares of Common
Stock of the Company issued to FS Equity
Partners II, L.P., pursuant to the Stock
Purchase Agreement, dated as of April 16,
1993, among the Company, The Dyson-
Kissner-Moran Corporation, WM Financial
Corporation and FS Equity Partners II,
L.P., as amended (incorporated herein by
reference to Exhibit 4.30 to Amendment
No. 1 to the Company's Registration
Statement on Form S-1, filed June 14,
1993 (File No. 33-62050)).
4.7 - Warrants to purchase shares of Common
Stock of the Company issued to The IBM
Retirement Plan Trust Fund, pursuant to
the Purchase Agreement and Assignment and
Assumption Agreement, dated as of May 13,
1993, among the Company, FS Equity
Partners II, L.P. and The IBM Retirement
Plan Trust Fund (incorporated herein by
reference to Exhibit 4.31 to Amendment
No. 1 to the Company's Registration
Statement on Form S-1, filed June 14,
1993 (File No. 33-62050)).
4.8 - Warrants to purchase shares of Common
Stock of the Company issued to Enso
Partners, L.P., pursuant to the Stock
Purchase Agreement, dated as of May 13,
1993, among the Company, The Dyson-
Kissner-Moran Corporation, WM Financial
Corporation and Enso Partners, L.P.
(incorporated herein by reference to
Exhibit 4.32 to Amendment No. 1 to the
Company's Registration Statement on Form
S-1, filed June 14, 1993 (File No. 33-
62050)).
4.9 - Credit Agreement, dated as of June 24,
1993, among the Company, International
Mill Service, Inc., the banks parties
thereto, Chemical Bank, Banque Paribas
and Credit Lyonnais New York Branch, as
Co-Agents, and Chemical Bank, as
Administrative Agent (incorporated herein
by reference to Exhibit 28.3 to the
Company's Current Report on Form 8-K,
dated July 1, 1993 (File No. 1-1363)).
4.10 - First Amendment to the Credit Agreement,
dated as of December 23, 1993, among the
Company, International Mill Service,
Inc., the banks parties thereto, Chemical
Bank, Banque Paribas and Credit Lyonnais
New York Branch, as Co-Agents, and
Chemical Bank, as Administrative Agent
(incorporated herein by reference to
Exhibit 4.10 to the Company's Annual
Report on Form 10-K for the fiscal year
ended December 31, 1993 (File No. 1-
1363)).
4.11 - Warrants to purchase 300,000 shares of
Common Stock issued to Chemical Bank,
NCNB Texas National Bank, Banque Paribas,
National Bank of Canada and Royal Bank of
Canada (incorporated herein by reference
to Exhibit 10.24 to Amendment No. 2 to
the Company's Registration Statement on
Form S-1, filed October 31, 1991 (File
No. 33-42381)).
4.12 - Loan Agreement between the Industrial
Development Corporation of Owyhee County,
Idaho and Envirosafe Services of Idaho,
Inc. relating to $8,500,000 Industrial
Revenue Bonds, Series 1994, dated as of
June 1, 1994, and related agreements.
(The Company agrees to furnish a copy of
such agreements to the Commission upon
request).
10.1 - Restated Incentive Stock Option Plan of
the Company, as amended (incorporated
herein by reference to Exhibit A to the
Company's Registration Statement on Form
S-8, filed January 17, 1989 (File No. 33-
26633)).
10.2 - Stock Purchase Agreement, dated as of
April 16, 1993, among the Company, The
Dyson-Kissner-Moran Corporation, WM
Financial Corporation and FS Equity
Partners II, L.P. (incorporated herein by
reference to Exhibit 4.21 to the
Company's Form 8 Amendment to Annual
Report on Form 10-K for the fiscal year
ended December 31, 1992 (File No. 1-
1363)).
10.3 - First Amendment to the Stock Purchase
Agreement, dated as of May 13, 1993,
among the Company, The Dyson-Kissner-
Moran Corporation, WM Financial
Corporation and FS Equity Partners II,
L.P. (incorporated herein by reference to
Exhibit 28.2 to the Company's Current
Report on Form 8-K, dated May 27, 1993
(File No. 1-1363)).
10.4 - Purchase Agreement and Assignment and
Assumption Agreement, dated as of May 13,
1993, among the Company, FS Equity
Partners II, L.P. and The IBM Retirement
Plan Trust Fund (incorporated herein by
reference to Exhibit 28.4 to the
Company's Current Report on Form 8-K,
dated May 27, 1993 (File No. 1-1363)).
10.5 - Stock Purchase Agreement, dated as of May
13, 1993, among the Company, The Dyson-
Kissner-Moran Corporation, WM Financial
Corporation and Enso Partners, L.P.
(incorporated herein by reference to
Exhibit 28.3 to the Company's Current
Report on Form 8-K, dated May 27, 1993
(File No. 1-1363)).
10.6 - Promissory Note of Louis A. Guzzetti,
Jr., dated March 31, 1993, amending and
replacing the Promissory Notes dated
October 15, 1987, March 31, 1991 and
March 31, 1992 and the Letter Amendments
dated April 13, 1991 and May 12, 1992,
payable to the Company in the principal
amount of $432,678.50 (incorporated
herein by reference to Exhibit 10.13 to
Post-Effective Amendment No. 1 to the
Company's Registration Statement on Form
S-1, filed September 16, 1993 (File No.
33-46930)).
10.7 - Promissory Notes of Aarne Anderson,
Jerrold I. Dolinger, George E. Fuehrer,
George T. Milano and Mr. Guzzetti dated
as of April 1, 1993, amending and
replacing the Promissory Notes dated
January 13, 1989, April 1, 1991 and April
1, 1992, payable to the Company in the
aggregate principal amount of $1,058,158
(incorporated herein by reference to
Exhibit 10.17 to Post-Effective Amendment
No. 1 to the Company's Registration
Statement on Form S-1, filed September
16, 1993 (File No. 33-46930)).
10.8 - Stock Option Agreement, dated March 18,
1992, between the Company and Raymond P.
Caldiero (incorporated herein by
reference to Exhibit 10.20 to the
Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1992
(File No. 1-1363)).
10.9 - Stock Option Agreement, dated March 18,
1992, between the Company and Jeffrey G.
Miller (incorporated herein by reference
to Exhibit 10.21 to the Company's Annual
Report on Form 10-K for the fiscal year
ended December 31, 1992 (File No. 1-
1363)).
10.10 - Amendment, dated August 5, 1993, to the
Stock Option Agreement, dated March 18,
1992, between the Company and Jeffrey G.
Miller, to which reference is made in
Exhibit 10.9 to this Quarterly Report on
Form 10-Q (incorporated herein by
reference to Exhibit 10.22 to Post-
Effective Amendment No. 1 to the
Company's Registration Statement on Form
S-1, filed September 16, 1993 (File No.
33-46930)).
10.11 - Stock Option Agreement, dated August 5,
1993, between the Company and Wallace B.
Askins (incorporated herein by reference
to Exhibit 10.23 to Post-Effective
Amendment No. 1 to the Company's
Registration Statement on Form S-1, filed
September 16, 1993 (File No. 33-46930)).
10.12 - Stock Option Agreement, dated November 1,
1993, between the Company and Arthur R.
Seder, Jr. (incorporated herein by
reference to Exhibit 10.12 to the
Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1993
(File No. 1-1363)).
10.13 - 1993 Stock Option Plan of the Company
(incorporated herein by reference to
Exhibit 10.21 to Amendment No. 1 to the
Company's Registration Statement on Form
S-1, filed June 14, 1993 (File No. 33-
62050)).
