UNITED STATES
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 March 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to _________
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.)
1155 Business Center Drive, Horsham, Pennsylvania 19044-3454
(Address of principal executive offices) (Zip Code)
(215) 956-5500
Registrant's telephone number, including area code
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 May 2, 1997 was 40,351,446.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements.
---------------------
ENVIROSOURCE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
March 31, December 31,
1997 1996
--------- ------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 5,155 $ 9,678
Accounts receivable, less allowance
for doubtful accounts of $1,268
and $1,220 34,861 31,550
Net assets of discontinued
IMSAMET operations 34,864
Net deferred income taxes 3,900 15,200
Other current assets 4,610 4,686
----- -----
Total current assets 48,526 95,978
Property, plant and equipment, at cost 278,765 270,857
Less allowance for depreciation (134,331) (128,392)
-------- --------
144,434 142,465
Goodwill, less amortization 137,426 138,635
Closure trust funds and deferred
charges, less amortization 33,871 34,139
Landfill permits, less amortization 23,216 23,064
Net deferred income taxes 12,790 10,800
Debt issuance costs, less amortization 8,102 8,442
Other assets 6,896 6,386
----- -----
$ 415,261 $ 459,909
========= =========
See notes to condensed consolidated financial statements.
<PAGE>
ENVIROSOURCE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS -- Continued
(Dollars in thousands)
March 31, December 31,
1997 1996
--------- ------------
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 9,017 $ 9,302
Salaries, wages and related benefits 7,894 7,253
Insurance obligations 5,828 6,187
Estimated reorganization and
restructuring costs 1,704 2,207
Interest 7,133 2,487
Other current liabilities 14,022 12,800
Current portion of debt 4,638 64,504
----- ------
Total current liabilities 50,236 104,740
Long-term debt 271,503 268,424
Other liabilities 47,443 47,688
Stockholders' equity:
Common stock, par value $.05 per
share, shares authorized-60,000,000,
shares issued and outstanding-
40,351,446 shares in 1997 and 1996 2,018 2,018
Capital in excess of par value 173,476 173,472
Accumulated deficit (127,669) (134,631)
Stock purchase loans receivable from
officers (690) (810)
Canadian translation adjustment (1,056) (992)
------ ----
Total stockholders' equity 46,079 39,057
------ ------
$415,261 $459,909
======== ========
See notes to condensed consolidated financial statements.
<PAGE>
ENVIROSOURCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in thousands)
Three months ended
March 31,
------------------
1997 1996
---- ----
Revenues $54,597 $52,958
Cost of revenues 43,778 40,913
Selling, general and
administrative expenses 6,751 6,191
Unusual charges 3,400
----- -----
Operating income 4,068 2,454
Interest income 262 256
Interest expense (7,320) (6,521)
------ ------
Loss before income taxes (2,990) (3,811)
Income tax benefit (expense):
Current (338) 18
Deferred 1,990 1,337
----- -----
Loss from continuing operations (1,338) (2,456)
Income (loss) from discontinued
IMSAMET operations 8,300 (92)
----- ---
Net income (loss) 6,962 (2,548)
Preferred stock dividend requirements,
reduced by retirement gain of $250 (148)
---- ----
Income (loss) applicable to common shares $ 6,962 $ (2,696)
======= ========
Income (loss) per share:
Continuing operations $ (.03) $ (.07)
Discontinued operations .20
--- ---
Net income (loss) $ .17 $ (.07)
======= ========
Weighted average shares 40,351 40,577
See notes to condensed consolidated financial statements.
<PAGE>
ENVIROSOURCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in thousands)
Three months ended
March 31,
------------------
1997 1996
---- ----
OPERATING ACTIVITIES
Net income (loss) $ 6,962 $ (2,548)
Adjustments to reconcile net income (loss)
to cash provided by operations:
Deferred income taxes 9,310 (1,337)
Gain from sale of IMSAMET (19,600)
Depreciation 6,503 6,196
Amortization 2,666 2,129
Unusual charges, net of payments (853) 1,641
Changes in working capital 3,144 2,366
Other 420 43
--- --
Cash provided by operating activities 8,552 8,490
INVESTING ACTIVITIES
Net proceeds from sale of IMSAMET 54,464
Property, plant and equipment:
Additions (8,684) (5,392)
Proceeds from dispositions 50 56
Landfill permit additions and closure
expenditures (908) (983)
Closure trust fund payments (184) (214)
Ongoing net cash flows related to
IU acquisition (486) (688)
Other (540) 642
------ ---
Cash provided (used) by investing activities 43,712 (6,579)
FINANCING ACTIVITIES
Debt issuance 6,000 33,000
Debt repayment (62,787) (6,319)
Debt issuance costs (18)
Retirement of preferred stock (33,056)
Sale of common stock 14
------ --
Cash used by financing activities (56,787) (6,379)
------- ------
CASH AND CASH EQUIVALENTS
Decrease during the period (4,523) (4,468)
Beginning of year 9,678 8,367
----- -----
End of period $ 5,155 $ 3,899
======= =======
See notes to condensed consolidated financial statements.
<PAGE>
ENVIROSOURCE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE A. BASIS OF PRESENTATION
- ------------------------------
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information. In the opinion of management, all adjustments (consisting
of normal recurring accruals and the unusual charges discussed in Note B)
necessary for a fair presentation have been included. Operating results for the
three month period ended March 31, 1997 are not necessarily indicative of the
results that may be expected for the year ending December 31, 1997. The
condensed consolidated balance sheet at December 31, 1996 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, 1996.
Certain amounts reported in the prior year have been reclassified for
comparative purposes.
In February 1997, the Financial Accounting Standards Board issued Statement No.
128, Earnings per Share, which will change the method for computing earnings per
share starting in the fourth quarter of 1997. The new method would have resulted
in the same per share amounts in both the 1997 and 1996 quarters.
NOTE B. UNUSUAL CHARGES
- ------------------------
In the first quarter of 1996, the Company initiated a reorganization to improve
productivity and reduce costs. The reorganization consisted principally of
consolidating all the Company's headquarters functions in a single office. The
Company's corporate headquarters in Stamford, Connecticut and the Treatment &
Disposal Services segment's headquarters in Horsham, Pennsylvania were closed by
mid-1996 and their activities moved to the International Mill Service
headquarters building, also in Horsham. Approximately 50 positions were
eliminated, mostly in the Treatment & Disposal Services segment. To cover the
cost of these and related changes, the Company provided $4.4 million in 1996, of
which $2.5 million was provided in the first quarter.
First quarter 1996 unusual charges also included $.9 million to settle the last
disputed matter from the Company's 1993 restructuring.
First quarter 1996 unusual charges, together with the gain from retiring Class G
preferred stock (Note E), amounted to a net $.05 loss per share.
<PAGE>
NOTE C. SALE OF IMSAMET
- ------------------------
In January 1997 the Company sold the capital stock of IMSAMET, Inc., a
wholly-owned subsidiary that performed recycling and waste management services
for the aluminum industry, for $58 million realizing a pre-tax gain of $19.6
million. After a deferred income tax charge, the gain amounted to $8.3 million
or $.20 per share. The proceeds from the sale were used to repay $56 million of
revolving credit borrowings and expenses related to the transaction. The gain
from the sale in 1997 and IMSAMET's 1996 results have been classified as
discontinued operations.
NOTE D. ALEXANDER MILL SERVICES ACQUISITION
- --------------------------------------------
The Company purchased Alexander Mill Services, Inc., a metal reclamation company
serving the mini-mill sector of the steel industry, in May 1996. Pro forma
results of operations, as if this transaction occurred at the beginning of 1996,
are as follows (in thousands, except per share amounts):
Three months ended
March 31, 1996
--------------
Pro forma revenues $ 55,724
Pro forma net loss (2,481)
Pro forma net loss per share $ (.06)
The pro forma information is not necessarily indicative of the results that
would have occurred had the transaction taken place at the beginning of 1996.
NOTE E. OTHER INFORMATION
- --------------------------
As of March 31, 1997, $35 million of revolving credit borrowings and $7.3
million of standby letters of credit were outstanding under the Company's $65
million bank credit facility.
During the three months ended March 31, 1997 and 1996, the Company paid interest
of $2.3 million and $.5 million and made cash income tax payments, net of
refunds, of $.3 million and $.1 million.
In the first quarter of 1996, the Company retired 236,120 shares of Class G
redeemable preferred stock for $33.1 million, resulting in a $250,000 retirement
gain.
NOTE F. COMMITMENTS AND CONTINGENCIES
- --------------------------------------
As of March 31, 1997, the Company has commitments to spend $8.9 million for
equipment additions and improvements to waste treatment facilities.
<PAGE>
To secure its obligations to close its landfills and perform post-closure
monitoring and maintenance procedures, the Company must make payments into
closure trust funds. Based on current regulations, planned improvements to waste
treatment facilities and permitted capacity, such payments are expected to
amount to approximately $2.8 million in 1997 and $2.4 million in 1998, including
the reinvestment of Idaho trust fund earnings that the Company includes in
interest income. Thereafter, such payments are not expected to exceed the
reinvestment of trust fund earnings, based on current requirements.
At March 31, 1997, the Company was contingently liable for $7.3 million of
letters of credit outstanding under its bank credit agreement, including
approximately $5.3 million that secure liabilities already reflected in the
condensed consolidated balance sheet.
IU International Corporation ("IU International") sold P-I-E Nationwide, Inc.
("PIE") in 1985. PIE commenced bankruptcy proceedings in 1990 and ceased
operations, which 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 International'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 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 any such claim is unwarranted and, if such claim
were asserted, would contest any such claim vigorously. The Company believes it
would ultimately prevail on the merits. However, under the Multiemployer Pension
Plan Amendments Act of 1980, the federal statute governing such plans, the plan
trustees could require the Company to make substantial monthly payments before
any issues are arbitrated or litigated. 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. However, the
resolution of such matters, which potentially could take place in the current
fiscal year, could result in a charge that is material to results of operations
and cash flows in a single accounting period.
<PAGE>
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, 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 and
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 additional environmental compliance requirements
could have a material adverse effect on the Company's results of operations or
financial condition, but the Company is unable to predict any such future
requirements. The Company believes that the consolidated financial statements
appropriately reflect all presently known compliance costs in accordance with
generally accepted accounting principles.
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
<TABLE>
<CAPTION>
Three months 1997
ended better/(worse)
March 31, than 1996
------------ --------------
1997 1996 Amount %
---- ---- ------ -
(Dollars in millions)
Revenues
<S> <C> <C> <C> <C>
Industrial Environmental Services $ 43,978 $ 45,310 $ (1,332) (2.9)%
Treatment & Disposal Services 10,619 7,648 2,971 38.8 %
------ ----- -----
$ 54,597 $ 52,958 $ 1,639 3.1 %
======== ======== ========
Gross Profit
Industrial Environmental Services $ 9,519 $ 11,957 $ (2,438) (20.4)%
Treatment & Disposal Services 1,300 88 1,212 1377.3 %
----- -- -----
$ 10,819 $ 12,045 $ (1,226) (10.2)%
======== ======== ========
Operating Income
Industrial Environmental Services $ 5,636 $ 8,079 $ (2,443) (30.2)%
Treatment & Disposal Services (59) (1,423) 1,364 95.9 %
Corporate headquarters (1,509) (802) (707) (88.2)%
Unusual charges (3,400) 3,400 -
----- ------ -----
$ 4,068 $ 2,454 $ 1,614 65.8 %
======== ======== ========
</TABLE>
Industrial Environmental Services revenues declined as compared to the 1996
first quarter. While conditions in the steel industry remained strong, revenues
and earnings continued to be adversely affected by a strike commenced by a major
steel industry customer's employees at the beginning of the 1996 fourth quarter
and the rearrangement of production facilities due to an ownership change at
another customer's steel mill. The Company's May 1996 acquisition of Alexander
Mill Services, Inc. contributed $2.5 million to revenues in the current quarter,
but the increase was largely offset by the mid-1996 loss of a steel industry
customer that accounted for $2.2 million of revenues in the 1996 first quarter.
Treatment & Disposal Services revenues increased significantly in the 1997 first
quarter as compared to the same quarter of 1996. The increase is attributable to
additional contracts obtained to stabilize electric arc furnace dust (a
hazardous waste produced by steel mini-mills).
Industrial Environmental Services gross profit decreased primarily due to
the strike, the temporary impact of the ownership change and the difference
between the gross profit from the Alexander Mill Services sites and the prior
year gross profit from the customer that was lost in mid-1996. Treatment &
Disposal Services gross profit increased due to the increase in treatment and
disposal volumes, primarily electric arc furnace dust.
Selling, general and administrative expenses increased as compared to the
1996 first quarter. Cost savings realized as a result of the 1996 reorganization
(discussed in the next paragraph) were more than offset by a $1 million increase
in legal fees and expenses that are expected to decline in future periods.
Unusual charges of $3.4 million in first quarter of 1996 included $2.5
million for the Company's 1996 headquarters reorganization (see Note B for a
description) and $.9 million to settle the last disputed matter from the
Company's 1993 restructuring.
Average first quarter debt levels in 1997 were comparable to 1996.
Approximately $.3 million of 1997 interest expense was due to the timing of the
closing of the sale of the Company's IMSAMET subsidiary. Interest expense was
lower in 1996 because $.8 million was allocated to the discontinued IMSAMET
operations.
In 1997 current income tax expense relates to state and foreign income
taxes payable. In 1996 state income tax benefits more than offset foreign income
taxes payable.
The Company sold its IMSAMET subsidiary in January 1997 for an after-tax
gain of $8.3 million or $.20 per share. Accordingly, the gain from the sale in
1997 and IMSAMET's 1996 results have been classified as discontinued operations.
Due to the factors described above, including discontinued operations, 1997
net income was $7 million compared with the 1996 net loss of $2.5 million.
Class G preferred stock dividend requirements in 1996 were reduced due to
the retirement of almost all of the outstanding shares in the 1996 quarter,
which resulted in a $.3 million retirement gain.
DEFERRED INCOME TAXES
The Company has determined that it is more likely than not that it will
earn enough taxable income to realize the $16.7 million of deferred tax assets
in its balance sheet over the next several years. Realization of this amount
will require cumulative taxable earnings of approximately $48 million. When the
consolidated results of continuing operations for the three most recent fiscal
years are adjusted by (1) excluding unusual items, and (2) adding back goodwill
amortization (which is not deductible for tax purposes), the pre-tax earnings,
as adjusted, total over $33 million and average $11 million annually. On this
basis, the Company would realize $16.7 million of deferred tax assets within
approximately four and one-half years. On the other hand, because its net
operating loss carryforwards expire well into the future, the Company would also
realize $16.7 million of deferred tax assets if, counting only profitable years,
it earns $48 million of taxable income during the fifteen year period ending in
2012, so long as the cumulative amount of such earnings reaches at least $15
million by 2005, $26 million by 2006, $35 million by 2008 and $44 million by
2009, and $47 million by 2010.
<PAGE>
In making its determination that it is more likely than not that it will
earn enough taxable income to realize $16.7 million of net deferred tax assets,
the Company considered (1) its cumulative consolidated results of operations for
the three most recent fiscal years and the first quarter of 1997, (2) the
reduction in interest expense obtained by applying the IMSAMET net proceeds to
reduce debt, (3) ongoing cost savings achieved with its 1996 reorganization, and
(4) profit improvements from treating increased volumes of electric arc furnace
dust with its proprietary Super Detox(R) technology. Factors which could
negatively affect this determination would include (1) loss of a major customer
or customers, (2) prolonged work stoppages at major customers, (3) a major
decline in United States steel industry production, and (4) a material decrease
in the level of electric arc furnace dust currently treated with the Company's
proprietary Super Detox(R) technology.
LIQUIDITY AND CAPITAL RESOURCES
The Company's liquidity requirements arise primarily from the funding of
capital expenditures, Treatment & Disposal Services trust fund payments, working
capital needs and debt service obligations. Historically, the Company has met
such requirements with cash flows generated by operations and with additional
debt financing.
The Company expects 1997 capital expenditures of $25 to $30 million,
primarily for equipment replacements, development of additional landfill
capacity and improvements to waste treatment facilities. Through March 31, 1997,
the Company spent $8.7 million for capital additions and is committed for an
additional $8.9 million.
Treatment & Disposal Services' landfill permits require it to fund closure
and post-closure monitoring and maintenance obligations by making essentially
non-refundable trust fund payments. Based on current regulations, planned
improvements to waste treatment facilities and permitted capacity, such payments
are expected to be approximately $2.8 million in 1997 and $2.4 million in 1998,
including the reinvestment of Idaho trust fund earnings that the Company
includes in interest income. Thereafter, such payments are not expected to
exceed the reinvestment of trust fund earnings, based on current requirements.
The consolidated balance sheet reflects negative working capital of $1.9
million at March 31, 1997, including a $1.7 million accrued liability for
estimated reorganization and restructuring costs. Scheduled debt repayments in
the last three quarters of 1997 are $3.8 million.
<PAGE>
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 International
Corporation prior to the Company's acquisition of IU International in 1988. The
Company believes any such claim is unwarranted and, if such claims were
asserted, would contest any such claim vigorously. The Company believes it would
ultimately prevail on the merits. However, under the Multiemployer Pension Plan
Amendments Act of 1980, the federal statute governing such plans, the plan
trustees could require the Company to make substantial monthly payments before
any issues are arbitrated or litigated. 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. However, the
resolution of such matters, which potentially could take place in the current
fiscal year, could result in a charge that is material to results of operations
and cash flows in a single accounting period.
Upon the sale of IMSAMET, the Company applied the net proceeds to pay down
bank borrowings, and also reduced the amount of its bank credit facility to $65
million of revolving credit borrowing and letter of credit capacity. As of March
31, 1997, revolving credit borrowings amounted to $35 million and $7.3 million
of standby letters of credit were outstanding. The bank facility was amended to
accommodate the sale of IMSAMET, including changes to the financial covenants
that require the Company to meet certain financial ratios and tests during 1997.
Although improved operating results will be required during the remainder of
1997, the Company believes that it will be able to meet its financial covenant
requirements. To remain in compliance during 1998 and thereafter, the Company
will need to obtain further adjustments to the required financial ratios and
tests throughout the remaining term of the facility. The Company and the banks
that are parties to the facility intend to further amend such ratios and tests.
The $65 million amount of the credit facility declines by 12.5% in each of
January 1999 and 2000 and the credit facility terminates in January 2001.
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.
Because its businesses are environmentally-oriented, and therefore highly
regulated, the Company is subject to violations alleged by environmental
regulators and, occasionally, fines. Such violations and fines have not had, and
are not expected to have, a material impact on the Company's business. It is
possible that the future imposition of additional environmental compliance
requirements could have a material adverse effect on the Company's results of
operations or financial condition, but the Company is unable to predict any such
future requirements.
<PAGE>
PART II - OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K.
---------------------------------
(a) Exhibits.
--------
3.1 - Amended and Restated Certificate of Incorporation of the Company
(incorporated herein by reference to Appendix A (pages A-1 to A-3) to
the Company's Proxy Statement filed April 29, 1996, in respect of its
1996 Annual Meeting of Stockholders (File No. 1-1363)).
3.2 - 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)).
3.3 - 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 - 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).
4.2 - Agreement Amending Loan and Security Agreement and Corporate
Guarantee Agreement, dated as of December 8, 1995, between FINOVA
Capital Corporation (formerly known as Greyhound Financial
Corporation), IMS Funding Corporation, and International Mill Service,
Inc. (The Company agrees to furnish a copy of such agreement to the
Commission upon request).
4.3 - 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)).
4.4 - First Supplemental Indenture, dated as of November 2, 1995, 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 (incorporated
herein by reference to Exhibit 4.15 to the Company's Quarterly Report
on Form 10-Q for the fiscal quarter ended September 30, 1995 (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 - Warrant to purchase shares of Common Stock of the Company issued to
FS Equity Partners II, L.P., dated as of 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 as of 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 as of 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 - Loan Agreement, dated as of June 1, 1994, 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. (The Company agrees to furnish a copy of such
agreement to the Commission upon request).
4.10 - Credit Agreement, dated as of December 19, 1995, among the Company,
International Mill Service, Inc., the lenders parties thereto,
NationsBank, N.A., as Administrative Agent, and Credit Lyonnais as
Syndication Agent (incorporated herein by reference to Exhibit 4.14 to
the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995 (File No. 1-1363)).
4.11 - Assignment and Acceptance, dated as of February 8, 1996, between
NationsBank, N.A. and Banque Paribas; and Assignment and Acceptance,
dated as of February 8, 1996, between Credit Lyonnais New York Branch
and Banque Paribas (incorporated herein by reference to Exhibit 4.13
to the Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1996 (File No. 1-1363)).
4.12 - First Amendment, dated as of May 15, 1996, to the Credit Agreement,
dated as of December 19, 1995, among the Company, International Mill
Service, Inc., the lenders parties thereto, NationsBank, N.A., as
Administrative Agent, and Credit Lyonnais as Syndication Agent
(incorporated herein by reference to Exhibit 4.15 to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30,
1996 (File No. 1-1363)).
4.13 - Second Amendment, dated as of December 23, 1996, to the Credit
Agreement, dated as of December 19, 1995, among the Company,
International Mill Service, Inc., the lenders parties thereto,
NationsBank, N.A., as Administrative Agent, and Credit Lyonnais as
Syndication Agent (incorporated herein by reference to Exhibit 4.13 to
the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996 (File No. 1-1363)).
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 - Promissory Note of Louis A. Guzzetti, Jr., dated March 31, 1993,
payable to the Company, 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 (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)).
10.3 - Promissory Notes of Aarne Anderson, George E. Fuehrer and Mr.
Guzzetti, dated as of April 1, 1993, payable to the Company, amending
and replacing the Promissory Notes dated January 13, 1989, April 1,
1991 and April 1, 1992(incorporated herein by reference to Exhibit
10.17 to Post-Effective Amendment No. to the Company's Registration
Statement on Form S-1, filed September 16, 1993 (File No. 33-46930)).
<PAGE>
10.4 - 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)).
10.5 - 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)).
10.6 - Amendment, dated August 5, 1993, to the Stock Option Agreement,
dated March 18, 1992, between the Company and Jeffrey G. Miller
(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)).
10.7 - 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)).
10.8 - 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)).
10.9 - 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)).
10.10 - EnviroSource, Inc. Stock Option Plan for Non- Affiliated 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)).
10.11 - 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)).
10.12 - Employment Agreement, dated November 5, 1996, between the Company
and Aarne Anderson (incorporated herein by reference to Exhibit 10.12
to the Company's Quarterly Report on Form 10-Q for the period ended
September 30, 1996 (File No. 1-1363)).
<PAGE>
10.13 - Employment Agreement, dated November 5, 1996, between the Company
and William B. Davis (incorporated herein by reference to Exhibit
10.13 to the Company's Quarterly Report on Form 10-Q for the period
ended September 30, 1996 (File No. 1-1363)).
10.14 - Employment Agreement, dated November 5, 1996, between the Company
and James C. Hull (incorporated herein by reference to Exhibit 10.14
to the Company's Quarterly Report on Form 10-Q for the period ended
September 30, 1996 (File No. 1-1363))
10.15 - Stock Purchase Agreement, dated November 26, 1996, by and among
IMCO Recycling Inc., IMSAMET, Inc. and EnviroSource, Inc.
(incorporated herein by reference to Exhibit 10.1 to the Company's
Form 8-K filed January 21, 1997(File No. 1-1363)).
10.16 - Amendment No. 1, dated as of January 21, 1997, to Stock Purchase
Agreement, dated November 26, 1996, by and among IMCO Recycling Inc.,
IMSAMET, Inc. and EnviroSource, Inc.(incorporated herein by reference
to Exhibit 10.2 to the Company's Form 8-K filed January 21, 1997 (File
No. 1-1363))
(b) Reports on Form 8-K.
--------------------
On February 5, 1997, the Company filed a Current Report 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: May 5, 1997
ENVIROSOURCE, INC.
By:/s/ James C. Hull
-----------------
Vice President and
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements included in EnviroSource's Form 10-Q for the quarterly
period ended March 31, 1997 and is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 5,155
<SECURITIES> 0
<RECEIVABLES> 36,129
<ALLOWANCES> 1,268
<INVENTORY> 0
<CURRENT-ASSETS> 48,526
<PP&E> 278,765
<DEPRECIATION> 134,331
<TOTAL-ASSETS> 415,261
<CURRENT-LIABILITIES> 50,431
<BONDS> 271,503
0
0
<COMMON> 2,018
<OTHER-SE> 44,061
<TOTAL-LIABILITY-AND-EQUITY> 415,261
<SALES> 0
<TOTAL-REVENUES> 54,597
<CGS> 0
<TOTAL-COSTS> 43,778
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,320
<INCOME-PRETAX> (2,990)
<INCOME-TAX> (1,652)
<INCOME-CONTINUING> (1,338)
<DISCONTINUED> 8,300
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,962
<EPS-PRIMARY> .17
<EPS-DILUTED> .17
</TABLE>
