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, 1995
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 July 31, 1995 was
40,194,244
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
EnviroSource, Inc.
CONSOLIDATED CONDENSED BALANCE SHEET
(Dollars in thousands)
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
----------- -------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 6,381 $ 8,389
Accounts receivable, less allowance
for doubtful accounts of $748
and $616 38,121 45,865
Other current assets 6,790 7,635
--------- ---------
Total current assets 51,292 61,889
Property, plant and equipment, at cost 294,542 282,594
Less allowance for depreciation 137,696 127,124
---------- ---------
156,846 155,470
Goodwill, less amortization 162,981 165,458
Landfill permits, less amortization 22,500 22,739
Closure trust funds and deferred
charges, less amortization 25,152 25,573
Debt issuance costs, less amortization 8,084 8,679
Other assets 11,795 10,370
---------- ----------
$ 438,650 $ 450,178
========== ==========
</TABLE>
Notes to Consolidated Condensed Financial Statements.
<PAGE>
EnviroSource, Inc.
CONSOLIDATED CONDENSED BALANCE SHEET -- Continued
(Dollars in thousands)
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
----------- ------------
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current liabilities:
Trade payables $ 10,527 $ 15,713
Salaries, wages and related benefits 9,011 12,268
Insurance obligations 8,123 8,113
Estimated restructuring costs 4,114 6,337
Interest 1,338 1,543
Other current liabilities 15,357 17,146
Current portion of debt 5,205 9,044
--------- ---------
Total current liabilities 53,675 70,164
Long-term debt 259,847 260,423
Other liabilities 64,261 63,674
Class G redeemable preferred stock 32,255 31,396
Commitments and contingencies (Note C)
Stockholders' equity:
Common stock, par value $.05 per
share, 60,000,000 shares author-
ized, 40,168,905 shares issued and
outstanding in 1995 and 40,093,759
shares in 1994 2,008 2,005
Capital in excess of par value 162,582 162,573
Accumulated deficit (134,162) (138,148)
Stock purchase loans receivable from
officers (840) (840)
Canadian translation adjustment (976) (1,069)
----------- -----------
Total stockholders' equity 28,612 24,521
----------- -----------
$ 438,650 $ 450,178
=========== ===========
See Notes to Consolidated Condensed Financial Statements.
<PAGE>
EnviroSource, Inc.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS (UNAUDITED)
(Dollars in thousands, except per share amounts)
</TABLE>
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
------------------ ----------------
1995 1994 1995 1994
-------- -------- ------- ------
<S> <C> <C> <C> <C>
Revenues $66,533 $63,458 $137,356 $121,881
Cost of revenues 49,393 45,735 103,146 90,109
Selling, general and
administrative expenses 5,957 8,448 13,416 16,242
-------- ------- -------- --------
Operating income 11,183 9,275 20,794 15,530
Interest income 295 235 577 541
Interest expense (6,792) (6,176) (13,775) (12,498)
--------- ------- -------- --------
Income before income taxes 4,686 3,334 7,596 3,573
Income tax expense:
Taxes payable (326) (603) (689) (1,220)
Federal taxes not
payable in cash (1,047) (415) (2,019) (507)
-------- ------- -------- -------
Net income 3,313 2,316 4,888 1,846
Preferred stock dividend
requirements, reduced by
retirement gains of $158
and $523 in 1994 (454) (431) (902) (694)
------- ------- -------- -------
Income applicable
to common shares $ 2,859 $ 1,885 $ 3,986 $ 1,152
======= ======= ======== ========
Net income per share $ .07 $ .05 $ .10 $ .03
======= ======= ======== ========
</TABLE>
See Notes to Consolidated Condensed Financial Statements.
<PAGE>
EnviroSource, Inc.
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS (UNAUDITED)
(Dollars in thousands)
<TABLE>
<CAPTION>
Six months ended
June 30,
---------------------
1995 1994
-------- ---------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 4,888 $ 1,846
Adjustments to reconcile net income to
cash provided by operations:
Income tax expense not payable in cash 2,019 507
Depreciation 12,597 11,895
Amortization 4,015 4,053
Closure cost amortization and accruals 1,078 1,213
Restructuring costs (2,077) (2,601)
Changes in working capital (262) (2,177)
Other 98 2,282
-------- --------
Cash provided by operating activities 22,356 17,018
-------- --------
INVESTING ACTIVITIES
Property, plant and equipment additions (14,577) (22,800)
Purchase of intangibles (2,948)
Landfill permit additions and closure
expenditures (189) (160)
Closure trust fund payments (282) (4,178)
Ongoing net cash flows related to
IU acquisition (3,768) 616
Other (1,043) (2,741)
---------- ---------
Cash used by investing activities (19,859) (32,211)
---------- ---------
FINANCING ACTIVITIES
Issuance of debt 11,100 17,500
Debt issuance costs (579)
Debt repayment (15,551) (6,521)
Retirement of preferred stock (42) (4,208)
Sale of common stock 12 8
Other (24)
---------- ---------
Cash (used) provided by financing activities (4,505) 6,200
---------- ---------
CASH AND CASH EQUIVALENTS
Decrease during the period (2,008) (8,993)
Beginning of year 8,389 10,582
---------- ---------
End of period $ 6,381 $ 1,589
========== =========
See Notes to Consolidated Condensed Financial Statements.
</TABLE>
<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, 1995 are not necessarily indicative
of the results that may be expected for the year ending December
31, 1995. The consolidated condensed balance sheet at December
31, 1994 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, 1994.
NOTE B. OTHER INFORMATION
Per share amounts are based on the weighted average number of
common shares outstanding and the dilutive effect of stock
options and warrants: 40,668,000 and 40,357,000 for the three
months ended June 30, 1995 and 1994, 40,566,000 and 40,447,000
for the six months then ended. The Class G preferred stock was
not dilutive.
At June 30, 1995, $22 million of revolving credit borrowings were
outstanding. In the six months ended June 30, 1995, the Company
repaid $4 million of revolving credit borrowings that was
classified as a December 31, 1994 current liability.
The Company paid interest of $13.3 million and $11.8 million
during the six months ended June 30, 1995 and 1994, excluding $.4
million capitalized in 1994.
Income tax expense payable for the six months ended June 30, 1995
and 1994 consists of state and foreign income taxes. In the six
months ended June 30, 1995 and 1994, the Company made cash income
tax payments, net of refunds, of $.8 million and $1.1 million.
<PAGE>
NOTE C. COMMITMENTS AND CONTINGENCIES
As of June 30, 1995, the Company has commitments to spend $9
million for equipment additions. 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 $1.2 million annually
through 1998. The Company is also obligated to make
nonrefundable payments into Ohio closure trust funds of
approximately $3.4 million in late 1995 and $4 million in early
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, 1995, the Company was contingently liable for $8.9
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
$12 million at June 30, 1995, and currently require the Company
to make payments of about $2 million annually. Although the
Company has the right to receive proceeds from the liquidation of
various classes of PIE assets, the amounts and timing are
uncertain. 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, 1995 will not be
adversely affected if the Company receives no proceeds from such
liquidation.
PIE's bankruptcy triggered withdrawal liabilities to certain
multiemployer pension plans, estimated by PIE in 1990 to
aggregate $58 million. In 1991 the trustees 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 the Company for any deficiencies in
PIE's payment of withdrawal liabilities to such plan. Such plan
<PAGE>
NOTE C. COMMITMENTS AND CONTINGENCIES -- Continued
did not again contact the Company concerning this matter until
March 15, 1995, when the Company was advised that such plan's
consideration as to whether it would assert a claim is ongoing.
The Company believes no such claim would be warranted and, if
asserted, would contest any such claim vigorously. However,
under the Multiemployer Pension Plan Amendments Act of 1980, a
federal statute governing such plans, the plan trustees could
require the Company to make substantial monthly payments before
any issues are arbitrated or litigated. The Company believes it
will ultimately prevail on the issues. If onerous monthly
payments are imposed by the plan, the Company will take any and
all actions it deems necessary and appropriate to protect itself
until the matter can be arbitrated and/or litigated on its
merits. The Company continues to believe that the underlying
facts and circumstances support a conclusion that these matters
will be resolved with no material adverse effect on its financial
condition.
The Company's Ohio and Idaho facilities hold operating permits
issued by state and federal environmental agencies under the
Resource Conservation and Recovery Act, as amended ("RCRA"), that
require renewal and modification from time to time. The Company
expects that it will obtain the renewals and modifications to its
permits that it requires to continue to provide landfill capacity
in its approved disposal cells well into the next decade.
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 requirements not only
can affect the demand for Treatment & Disposal Services, but
could also require the Company to incur significant costs for
such matters as facility upgrading, remediation or other
corrective action, facility closure and post-closure maintenance
and monitoring. It is possible that the future imposition of
such requirements could have a material adverse effect on the
Company's results of operations or financial condition, but the
Company believes that the consolidated condensed financial
statements appropriately reflect all presently known compliance
costs in accordance with generally accepted accounting
principles. Under normal circumstances, the Company would expect
to be able to absorb increased operating compliance costs by
increasing prices charged to customers.
The Company is a party to litigation and proceedings arising in
the normal course of its present or former businesses. In the
opinion of management, the outcome of such matters will not have
a material adverse effect on the Company's financial condition or
results of operations.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Results of Operations for the Three Months Ended June 30
<TABLE>
<CAPTION>
Three months 1995
ended higher (lower)
June 30, than 1994
--------------- ----------------
1995 1994 Amount %
-------- ------ -------- ------
(Dollars in thousands)
<S> <C> <C> <C> <C>
Revenues
Industrial Environmental
Services $ 57,000 $ 51,210 $ 5,790 11%
Treatment & Disposal
Services 9,533 12,248 (2,715) -22
-------- -------- --------
$ 66,533 $ 63,458 $ 3,075 5
======== ======== ========
Gross Profit
Industrial Environmental
Services $ 15,677 $ 14,351 $ 1,326 9%
Treatment & Disposal
Services 1,463 3,372 (1,909) -57
-------- -------- --------
$ 17,140 $ 17,723 $ (583) -3
======== ======== ========
Operating Income
Industrial Environmental
Services $ 11,931 $ 9,919 $ 2,012 20%
Treatment & Disposal
Services 135 869 (734) -84
Corporate headquarters (883) (1,513) 630 42
-------- -------- --------
$ 11,183 $ 9,275 $ 1,908 21
======== ======== ========
</TABLE>
Industrial Environmental Services revenues increased
primarily due to the start-up of a new dross plant in Utah and
high production volumes resulting from generally favorable
conditions in the aluminum and steel industries. Treatment &
Disposal Services revenue decreased due to a reduction in
landfill disposal volume, particularly from hazardous waste
clean-up projects, and to a lesser extent reduced pricing for
such clean-up projects.
Industrial Environmental Services' gross profit improvements
paralleled the revenue increases except for a modest start-up
loss at the new Utah plant. Treatment & Disposal Services' gross
profit decline was due to the lower landfill volume and prices,
partially offset by increased profits from a long-term contract
to design and supply a scrubber sludge stabilization system for
an electric utility, which is in its final stages. Continuation
of current profit levels from such long-term contracts will
depend upon the Company's ability to secure additional contracts
in the second half of 1995 and beyond.
<PAGE>
Selling, general and administrative expenses were $2.5
million lower in 1995. Industrial Environmental Services' costs
were down by $.7 million in 1995 due primarily to headcount
reductions in the second half of 1994. Treatment & Disposal
Services' $1.2 million improvement resulted from headcount
reductions, lower sales commissions and marketing costs, and the
reduction of an allowance for collectability of a receivable.
Corporate headquarters costs were reduced by $.6 million,
including $.8 million due to favorable settlements of obligations
related to the 1988 acquisition of IU International Corporation
("IU"), principally $2.6 million of insurance obligations,
partially offset by additional provisions for other disputed
matters related to the IU acquisition. After taxes, the $.8
million of IU acquisition liability adjustments amounted to $.01
per share.
Interest expense increased $.6 million, primarily due to
higher average debt levels and because $.2 million of interest
was capitalized in 1994 with no comparable amount in 1995.
Income tax expense increased $.4 million because of higher
earnings at the incremental 35% federal tax rate, partially
offset by lower state taxes payable.
Due to the factors described above, 1995 net income was $3.3
million compared with $2.3 million in 1994.
Class G preferred stock dividend requirements in 1995 were
$.2 million lower than in 1994, due to the retirement of 63,300
shares in the second half of 1994. The 1994 second quarter
benefited from a $.2 million gain from retiring 7,500 shares of
Class G preferred stock.
Results of Operations for the Six Months Ended June 30
<TABLE>
<CAPTION>
Six months 1995
ended higher (lower)
June 30 than 1994
------------------ ---------------
1995 1994 Amount %
--------- -------- ------ ------
(Dollars in thousands)
<S> <C> <C> <C> <C>
Revenues
Industrial Environmental
Services $113,182 $ 99,711 $ 13,471 14%
Treatment & Disposal
Services 24,174 22,170 2,004 9
-------- -------- --------
$137,356 $121,881 $ 15,475 13
======== ======== ========
Gross Profit
Industrial Environmental
Services $ 30,388 $ 26,746 $ 3,642 14%
Treatment & Disposal
Services 3,822 5,026 (1,204) -24
-------- -------- --------
$ 34,210 $ 31,772 $ 2,438 8
======== ======== ========
Operating Income
Industrial Environmental
Services $ 22,473 $ 18,139 $ 4,334 24%
Treatment & Disposal
Services 659 327 332 102
Corporate headquarters (2,338) (2,936) 598 20
-------- -------- --------
$ 20,794 $ 15,530 $ 5,264 34
======== ======== ========
</TABLE>
<PAGE>
Industrial Environmental Services revenues increased for the
reasons outlined in the three month discussion above. Treatment
& Disposal Services revenues increased primarily because of 1995
billings for equipment installations under a long-term contract
to design and supply a scrubber sludge stabilization system for
an electric utility. This increase was partially offset by
reduced landfilling prices for hazardous waste clean-up projects.
Industrial Environmental Services' gross profit improvements
paralleled the revenue increases except for a modest start-up
loss at the new Utah plant. Treatment & Disposal Services' gross
profit reduction was due to lower landfilling prices, partially
offset by improved profits from other services and the long-term
stabilization system contract, as set forth in the three month
discussion above.
Selling, general and administrative expenses were $2.8
million lower in 1995 for the reasons outlined in the three month
discussion. These reductions and the net improvements in gross
profit resulted in $5.3 million higher operating income. A $.4
million first quarter 1995 provision for additional Industrial
Environmental Services severance costs was offset by a Treatment
& Disposal Services gain resulting from the sale of its
prospective Pennsylvania landfill site, designated for disposal
as part of the Company's 1993 restructuring, for more than
previously estimated.
Interest expense increased $1.3 million, primarily due to
higher average debt levels and because $.4 million of interest
was capitalized in 1994 with no comparable amount in 1995.
Income tax expense increased $1 million because of higher
earnings at the incremental 35% federal tax rate, partially
offset by lower state taxes payable.
Due to the factors described above, 1995 net income was $4.9
million compared with $1.8 million in 1994.
Class G preferred stock dividend requirements in 1995 were
$.3 million lower than in 1994, due to the retirement of 63,300
shares in the second half of 1994. The 1994 period benefited
from a $.5 million gain from retiring 37,500 shares of Class G
preferred stock.
<PAGE>
Federal Taxes Not Payable in Cash
Income tax expense for the first six months of 1995 includes
$2 million of federal tax expense that will never be paid in
cash. This unusual situation occurs because of the origins of
most of the Company's tax loss carryforwards and other deferred
tax assets.
As described further in the Company's 1994 Annual Report on
Form 10-K, the Company has substantial federal income tax net
operating loss carryforwards, together with additional deferred
tax assets, that will become available to reduce future income
taxes as the underlying book/tax differences become deductible
for tax purposes. To the extent that the Company's deferred tax
assets arose either prior to its 1983 reorganization or from its
1988 IU acquisition, the Company is required to charge income tax
expense and credit the tax benefits from utilizing these deferred
tax assets to either capital in excess of par value or goodwill.
However, the resulting income tax expense will never be paid in
cash; this amounted to $2 million or $.05 per share in the first
six months of 1995.
Because it has very substantial federal income tax net
operating loss carryforwards and other deferred tax assets, the
Company expects to pay only federal alternative minimum tax, at
an effective rate of approximately 2%, through 1998. In
addition, it expects to utilize its remaining deferred tax assets
to reduce substantially its federal income tax payments for
several years thereafter.
Liquidity and Capital Resources
The Company's liquidity requirements arise primarily from
the funding of its capital expenditures, Treatment & Disposal
Services trust fund payments, working capital needs and debt
service obligations. The Company must also fund the remaining
costs of 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 $30 million for
capital expenditures in 1995, primarily for equipment additions.
$14.6 million was spent through June 30, 1995 and the Company is
committed for an additional $9 million.
Treatment & 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 $1.2 million
annually through 1998; and for the Ohio landfill, approximately
$3.4 million in late 1995 and $4 million in early 1996.
<PAGE>
The consolidated condensed balance sheet reflects negative
working capital of $2.4 million at June 30, 1995, due entirely to
$4.1 million of estimated restructuring costs and $10.1 million
of estimated IU acquisition obligations, both of which are
unrelated to ongoing operations. After payment of approximately
$8 million in the second half of 1995, estimated annual IU
payments are expected to decline to approximately $3 million in
1996 and gradually thereafter to less than $2 million by 1999.
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 bank credit facility, as amended,
permits the Company to redeem (including accumulated dividends)
or retire additional shares of its Class G preferred stock with
up to $2.4 million in cash at any time. Subject to a test that
requires improved financial performance, this limit on additional
Class G retirements increases to $23.7 million. 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 Class G
preferred stock outstanding at June 30, 1995 would require $34.1
million in 1996, assuming no dividends are paid earlier.
On March 15, 1995, a multiemployer pension plan contacted
the Company concerning a potential claim against the Company for
deficiencies in the payment of withdrawal liabilities by a
subsidiary that was sold by IU prior to the Company's acquisition
of IU in 1988 (see Note C). The Company believes no such claim
would be warranted and, if asserted, would contest any such claim
vigorously. However, under the Multiemployer Pension Plan
Amendments Act of 1980, a federal statute governing such plans,
the plan trustees could require the Company to make substantial
monthly payments before any issues are arbitrated or litigated.
The Company believes it will ultimately prevail on the issues.
If onerous monthly payments are imposed by the plan, the Company
will take any and all actions it deems necessary and appropriate
to protect itself until the matter can be arbitrated and/or
litigated on its merits. The Company continues to believe that
the underlying facts and circumstances support a conclusion that
these matters will be resolved with no material adverse effect on
its financial condition. The ultimate outcome could, however,
result in a charge that is material to results of operations or
cash flows in a single accounting period.
Cash on hand, funds from operations and borrowing capacity
under the bank credit facility are expected to satisfy the
Company's normal 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
expects to refinance 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, 1995, $22 million of revolving credit
borrowings and $8.9 million of standby letters of credit were
outstanding.
<PAGE>
Because its businesses are environmentally-oriented, and
therefore highly regulated, the Company is subject to violations
alleged by environmental regulators and, occasionally, fines.
Such matters have not had and are not expected to have a material
impact on the Company's business. Environmental compliance is
discussed in Note C.
<PAGE>
PART II - OTHER INFORMATION
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").
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 $8.7 million.
Item 4. Matters Submitted to a Vote of Security Holders.
The Company's Annual Meeting of Stockholders was
held at 10:00 a.m. on June 15, 1995. Three matters were acted
upon at such meeting.
a. Four Members of Class C of the Board of Directors were
elected. The tabulation of the votes cast with respect to each
such director is as follows:
<TABLE>
<CAPTION>
Raymond P. Mark J. Charles P. Ronald P.
Caldiero Doran Rullman, Jr. Spogli
<S> <C> <C> <C> <C>
For 35,157,126 35,154,719 35,157,721 35,157,549
Against 0 0 0 0
Withheld 225,825 228,232 225,230 225,402
Abstain 0 0 0 0
Broker
Non-Vote 0 0 0 0
</TABLE>
b. The adoption of the EnviroSource, Inc. Stock Option
Plan for Non-Affiliate Directors was ratified and approved by the
Company's stockholders. The votes cast with respect to this item
were as follows: 34,457,733 for; 794,358 against; 113,999
abstain; 0 broker non-votes.
c. The Company's selection of Ernst & Young as its
independent public accountants for the fiscal year ending
December 31, 1995 was ratified and approved by the Company's
stockholders. The votes cast with respect to this item were as
follows: 35,285,615 for; 49,133 against; 48,203 abstain; 0
broker non-votes.
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)).
<PAGE>
2.3 - Agreement and Plan of Merger, dated as of November
26, 1991, by and among the Company, Envirosafe
Services, Inc. and ESI Merger Co. (incorporated by
reference to Annex A to the Joint Proxy
Statement/Prospectus included in the Company's
Registration Statement on Form S-4, filed on January
24, 1992 (File No. 33-45270).
3.1 - Certificate of Incorporation of the Company
(incorporated herein by reference to Exhibit 3.1 to
the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1989 (File No. 1-
1363)).
3.2 - Certificate of Amendment to the Certificate of
Incorporation of the Company, dated February 26, 1992
(incorporated herein by reference to Exhibit 3.2 to
the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1991 (File No. 1-
1363)).
3.3 - Certificate of Amendment to the Certificate of
Incorporation of the Company, dated August 5, 1993
(incorporated herein by reference to Exhibit 4.9 to
the Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended June 30, 1993 (File No. 1-
1363)).
3.4 - Certificate of Designation of Shares of Class H
Cumulative Preferred Stock of the Company
(incorporated herein by reference to Exhibit 3.2 to
the Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended June 30, 1987 (File No. 1-
1363)).
3.5 - Certificate of Designation of Shares of Class I
Cumulative Redeemable Preferred Stock, Series A,
Increasing Rate of the Company (incorporated herein
by reference to Exhibit 3.5 to the Company's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1987 (File No. 1-1363)).
3.6 - Certificate of Designation of Shares of Class I
Cumulative Redeemable Preferred Stock, Series B,
Exchangeable of the Company (incorporated herein by
reference to Exhibit 3.6 to the Company's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1987 (File No. 1-1363)).
3.7 - Certificate of Designation of Shares of Class I
Preferred Stock, Series C of the Company
(incorporated herein by reference to Exhibit 3.5 to
the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1990 (File No. 1-
1363)).
<PAGE>
3.8 - Certificate of Designation of the Preferences of
Class J Convertible Preferred Stock of the Company
(incorporated herein by reference to Exhibit 3.7 to
Amendment No. 1 to the Company's Registration
Statement on Form S-1, filed June 14, 1993 (File No.
33-62050)).
3.9 - Certificate of Correction to the Certificate of
Designation of the Preferences of Class J Convertible
Preferred Stock of the Company (incorporated herein
by reference to Exhibit 4.8 to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter
ended June 30, 1993 (File No. 1-1363)).
3.10 - By-Laws of the Company (incorporated herein by
reference to Exhibit C (pages C-1 to C-9) to the
Company's Proxy Statement filed April 24, 1987, in
respect of its 1987 Annual Meeting of Stockholders
(File No. 1-1363)).
3.11 - Amendment to the By-Laws of the Company (incorporated
herein by reference to Exhibit 3.4 to the Company's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1987 (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)).
<PAGE>
4.6 - Warrant to purchase shares of Common Stock of the
Company issued to FS Equity Partners II, L.P., dated
May 13, 1993 (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 - Warrant to purchase shares of Common Stock of the
Company issued to The IBM Retirement Plan Trust Fund,
dated May 13, 1993 (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 - Warrant to purchase shares of Common Stock of the
Company issued to Enso Partners, L.P., dated May 13,
1993 (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 - Second Amendment to the Credit Agreement, dated as of
October 20, 1994, 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 4.11 to the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended
September 30, 1994 (File No. 1-1363).
4.12 - Third Amendment to the Credit Agreement, dated as of
January 13, 1995, 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 4.12 to the Company's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1994 (File No. 1-1363)).
<PAGE>
4.13 - Warrants to purchase 244,445 shares of Common Stock
issued to Chemical Bank, NCNB Texas National Bank,
Banque Paribas, and National 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)).
4.14 - Loan Agreement between the Industrial Development
Corporation of Owyhee County, Idaho and Envirosafe
Services of Ohio, 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 - EnviroSource, Inc. Stock Option Plan for Non-
Affiliate Directors, dated as of January 1, 1995
(incorporated herein by reference to Exhibit 10.14 to
the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994 (File No. 1-
1363)).
10.2 - Stock Option Agreement, dated January 1, 1995,
between the Company and Arthur R. Seder, Jr.
(incorporated herein by reference to Exhibit 10.15 to
the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994 (File No. 1-
1363)).
10.3 - Stock Option Agreement, dated January 1, 1995,
between the Company and Wallace B. Askins
(incorporated herein by reference to Exhibit 10.16 to
the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994 (File No. 1-
1363)).
10.4 - Stock Option Agreement, dated January 1, 1995,
between the Company and Raymond P. Caldiero
(incorporated herein by reference to Exhibit 10.17 to
the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994 (File No. 1-
1363)).
10.5 - Stock Option Agreement, dated January 1, 1995,
between the Company and Jeffrey G. Miller
(incorporated herein by reference to Exhibit 10.18 to
the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994 (File No. 1-
1363)).
10.6 - Supplemental Executive Retirement Plan of the
Company, effective January 1, 1995 (incorporated
herein by reference to Exhibit 10.19 to the Company's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1994 (File No. 1-1363)).
<PAGE>
(b) Reports on Form 8-K.
During the quarter ended June 30, 1995, 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.
Dated: August 8, 1995
EnviroSource, Inc.
By: /s/ James C. Hull
James C. Hull
Vice President and
Chief Financial
Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains financial information extracted from EnviroSource, Inc.'s
Form 10-Q for the period ended June 30, 1995 and is qualified in its entirety by
reference to such financial information.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-mos
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-1-1995
<PERIOD-END> JUN-30-1995
<CASH> 6,381
<SECURITIES> 0
<RECEIVABLES> 38,869
<ALLOWANCES> 748
<INVENTORY> 0
<CURRENT-ASSETS> 51,292
<PP&E> 294,542
<DEPRECIATION> 137,696
<TOTAL-ASSETS> 438,650
<CURRENT-LIABILITIES> 53,675
<BONDS> 259,847
<COMMON> 2,008
32,255
0
<OTHER-SE> 26,604
<TOTAL-LIABILITY-AND-EQUITY> 438,650
<SALES> 0
<TOTAL-REVENUES> 137,356
<CGS> 0
<TOTAL-COSTS> 116,562
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13,775
<INCOME-PRETAX> 7,596
<INCOME-TAX> 2,708
<INCOME-CONTINUING> 4,888
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<NET-INCOME> 4,888
<EPS-PRIMARY> .10
<EPS-DILUTED> .10
</TABLE>
