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 September 30, 1999
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 November 10, 1999 was 5,813,394.
<PAGE>
PART I. - FINANCIAL INFORMATION
ITEM 1. Financial Statements.
---------------------
<TABLE>
<CAPTION>
ENVIROSOURCE, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(Dollars in thousands)
September 30, December 31,
1999 1998
------------ ------------
(Unaudited)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 2,743 $ 5,134
Accounts receivable, less allowance
for doubtful accounts 36,375 32,305
Other current assets 3,770 3,520
------------ ------------
Total current assets 42,888 40,959
Property, plant and equipment, at cost 286,933 304,324
Less accumulated depreciation (149,404) (157,387)
------------ ------------
137,529 146,937
Goodwill, less accumulated amortization 119,327 127,931
Closure trust funds and deferred charges,
less accumulated amortization 31,796 33,205
Landfill permits, less accumulated
amortization 21,224 22,974
Other assets 13,428 15,450
------------ ------------
$ 366,192 $ 387,456
============ ============
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
Current liabilities:
Accounts payable $ 16,511 $ 10,949
Accrued interest 8,105 1,412
Other accruals and current liabilities 26,479 23,493
Current portion of debt 3,225 5,549
------------ ------------
Total current liabilities 54,320 41,403
Long-term debt:
9 3/4% Senior Notes due 2003 270,000 270,000
Other long-term debt 8,684 28,023
------------ ------------
Total long-term debt 278,684 298,023
Other long-term liabilities 36,885 38,187
Stockholders' (deficit) equity:
Common stock 291 291
Capital in excess of par value 175,969 175,969
Accumulated deficit (178,556) (164,771)
Accumulated other comprehensive losses (1,311) (1,556)
Stock purchase loan receivable from officer (90) (90)
------------ ------------
Total stockholders' (deficit) equity (3,697) 9,843
------------ ------------
$ 366,192 $ 387,456
============ ============
</TABLE>
See accompanying notes.
2
<PAGE>
<TABLE>
<CAPTION>
ENVIROSOURCE, INC.
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
(Dollars and shares in thousands, except per share amounts)
Three Months Nine Months
Ended September 30, Ended September 30,
--------------------------- ---------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues $ 55,584 $ 57,710 $ 157,704 $ 180,252
------------ ------------ ------------ ------------
Expenses:
Cost of revenues 36,284 37,809 105,418 118,288
Selling, general and
administrative 3,393 3,551 12,122 12,532
Depreciation and amortization
(less interest amortization) 10,040 9,530 27,771 28,948
Unusual charges -- 526 2,964 4,426
------------ ------------ ------------ ------------
Total expenses 49,717 51,416 148,275 164,194
------------ ------------ ------------ ------------
Operating income 5,867 6,294 9,429 16,058
Interest income 338 376 687 895
Interest expense (7,571) (7,683) (23,096) (22,790)
------------ ------------ ------------ ------------
Loss before income taxes (1,366) (1,013) (12,980) (5,837)
Income tax expense:
Current (267) (278) (805) (881)
Deferred -- (2,968) -- --
------------ ------------ ------------ ------------
Total income tax expense (267) (3,246) (805) (881)
------------ ------------ ------------ ------------
Net loss $ (1,633) $ (4,259) $ (13,785) $ (6,718)
============ ============ ============ ============
Net loss per share $ (0.28) $ (0.73) $ (2.37) $ (1.16)
============ ============ ============ ============
Weighted average shares 5,813 5,813 5,813 5,813
============ ============ ============ ============
</TABLE>
See accompanying notes.
3
<PAGE>
<TABLE>
<CAPTION>
ENVIROSOURCE, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
(Dollars in thousands)
Nine Months Ended
September 30,
---------------------------
1999 1998
------------ ------------
OPERATING ACTIVITIES:
<S> <C> <C>
Net loss $ (13,785) $ (6,718)
Adjustments to reconcile net loss
to cash provided by operating activities:
Depreciation 20,085 20,922
Amortization 9,189 9,339
Unusual charges, net of payments (66) 1,793
Changes in operating working capital 9,151 69
Other 404 1,261
------------ ------------
Cash provided by operating activities 24,978 26,666
------------ ------------
INVESTING ACTIVITIES:
Property, plant and equipment:
Additions (12,484) (28,459)
Proceeds from dispositions 1,544 1,326
Landfill permit additions and closure
expenditures (223) (1,582)
Closure trust fund recovery (payments), net 198 (904)
Ongoing net cash flows related to
IU International acquisition 5,407 (1,722)
Other (148) (552)
------------ ------------
Cash used for investing activities (5,706) (31,893)
------------ ------------
Cash provided (used) before
financing activities 19,272 (5,227)
------------ ------------
FINANCING ACTIVITIES:
Revolving credit facility:
Borrowings 53,000 46,000
Repayments (73,000) (43,000)
------------ ------------
(20,000) 3,000
Other debt repayment (1,663) (5,381)
------------ ------------
Cash used for financing activities (21,663) (2,381)
------------ ------------
CASH AND CASH EQUIVALENTS:
Decrease during the period (2,391) (7,608)
Beginning of year 5,134 9,942
------------ ------------
End of period $ 2,743 $ 2,334
============ ============
</TABLE>
See accompanying notes.
4
<PAGE>
ENVIROSOURCE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE A -- BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements are unaudited, and
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. Quarterly operating results are not necessarily indicative
of the results that may be expected for the year ending December 31, 1999. The
condensed consolidated balance sheet at December 31, 1998 has been derived from
audited financial statements at that date. Quarterly financial statements should
be read in conjunction with the consolidated financial statements and notes
thereto included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1998, as filed with the Securities and Exchange Commission.
NOTE B -- COMPREHENSIVE LOSS
The following table presents total comprehensive losses for the three-and
nine-month periods ended September 30, 1999 and 1998 (dollars in thousands):
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------- ---------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
Net loss $ (1,633) $ (4,259) $ (13,785) $ (6,718)
Canadian currency
translation
adjustment 19 (248) 245 (335)
------------ ------------ ------------ ------------
Comprehensive loss $ (1,614) $ (4,507) $ (13,540) $ (7,053)
============ ============ =========== ============
NOTE C -- UNUSUAL CHARGES
The Company initiated in the first quarter of 1998 a profit improvement program.
Costs for the nine months ended September 30, 1999 (incurred entirely during the
1999 first quarter) totaled $3 million and consisted of $2.3 million of employee
severance and $.7 million of program consulting fees and expenses. Costs
incurred during the nine months ended September 30, 1998, most of which were
incurred during the 1998 second quarter, totaled $4.4 million and consisted of
$2.3 million related to excess equipment, $1.6 million of program consulting and
$.5 million of severance.
NOTE D -- SEGMENT DISCLOSURE
Operating information for the Company's reportable segments for the three-and
nine-month periods ended September 30, 1999 and 1998 can be found in the tables
on pages 7 and 8 of this Report. At September 30, 1999, there were no
significant changes in identifiable assets of the Company's reportable segments
from the amounts disclosed at December 31, 1998, nor were there any changes in
the basis of segmentation or in the measurement of segment operating results.
5
<PAGE>
ENVIROSOURCE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE E -- OTHER INFORMATION
The Company currently has a $43.8 million bank credit facility that declines to
$38.3 million by January 2000, and declines further in subsequent periods until
its termination in January 2001. At September 30, 1999, $2 million of borrowings
were outstanding, an additional $5.7 million was dedicated to cover standby
letters of credit, and the remaining $36.1 million of the revolving credit
facility was unused and available.
Third quarter 1998 operating results include a charge totaling $3 million to
reverse certain deferred tax benefits previously recognized by the Company. The
reversal was made when management determined that the Company might not earn
sufficient taxable income to realize the deferred tax benefits.
NOTE F -- COMMITMENTS AND CONTINGENCIES
The Company is required to maintain trust funds to secure its obligations to
close its landfills and perform post-closure monitoring and maintenance
procedures. Based on current regulations, planned improvements to waste
treatment facilities and permitted capacity, such trust funds are adequately
funded and currently require only the reinvestment of Idaho trust fund earnings
that the Company includes in interest income. In the nine months ended September
30, 1999, the Company recovered from the Idaho trust fund $790,000 that was in
excess of current requirements.
The Company's Ohio and Idaho facilities hold operating permits issued by state
and federal environmental agencies under the Resource Conservation and Recovery
Act 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. 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 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.
At September 30, 1999, the Company is committed to spend approximately $7
million for capital equipment, part of which may be spent after December 31,
1999.
6
<PAGE>
ENVIROSOURCE, INC.
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
-----------------------------------------------------------------------
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30
<TABLE>
<CAPTION>
Three Months Ended 1999
September 30, Increase (decrease)
--------------------------- ---------------------------
1999 1998 Amount %
------------ ------------ ------------ ------------
(Dollars in thousands)
REVENUES
<S> <C> <C> <C> <C>
IMS $ 46,182 $ 47,841 $ (1,659) (3.5)%
Technologies 9,402 9,869 (467) (4.7)%
------------ ------------ ------------
$ 55,584 $ 57,710 $ (2,126) (3.7)%
============ ============ ============
GROSS PROFIT
IMS $ 10,625 $ 11,623 $ (998) (8.6)%
Technologies 323 321 2 0.6 %
------------ ------------ ------------
$ 10,948 $ 11,944 $ (996) (8.3)%
============ ============ ============
OPERATING INCOME (LOSS)
IMS $ 7,054 $ 7,812 $ (758)
Technologies (792) (730) (62)
Corporate headquarters (395) (262) (133)
------------ ------------ ------------
5,867 6,820 (953) (14.0)%
Unusual charges:
IMS ----- (30) 30
Technologies ----- ----- -----
Corporate headquarters ----- (496) 496
------------ ------------ ------------
----- (526) 526
------------ ------------ ------------
CONSOLIDATED OPERATING
INCOME $ 5,867 $ 6,294 $ (427) (6.8)%
============ ============ ============
</TABLE>
Consolidated revenue in the third quarter of 1999 decreased 3.7%
compared with the same quarter of 1998. Both of the Company's operating segments
reported lower revenues in the 1999 third quarter. The IMS segment revenue
decrease was primarily due to the loss of a steel industry customer in late 1998
that had contributed $2.2 million of revenue to the 1998 third quarter. The
Technologies segment revenue decrease was due primarily to a change in the mix
of waste processed. Although the volume of waste processed increased in the 1999
third quarter compared with the same quarter of 1998, a higher proportion of the
material was lower-priced cleanup business.
Consolidated gross profit for the third quarter of 1999 decreased
compared with the same quarter of 1998. The IMS segment's gross profit in the
1999 third quarter decreased from the same quarter a year ago, mostly due to the
lower revenue. The Technologies segment's gross profit for the third quarter of
1999 was essentially unchanged from the 1998 third quarter.
Selling, general and administrative expenses for the 1999 third
quarter were 4.4% lower than the same quarter of 1998, reflecting benefits of
the 1998 profit improvement program.
Included in the 1998 third quarter operating results were unusual
charges related to the profit improvement program totaling $.5 million, which
consisted of program consulting fees and expenses. There were no unusual charges
recorded in the 1999 third quarter.
7
<PAGE>
ENVIROSOURCE, INC.
RESULTS OF OPERATIONS (CONTINUED)
Interest expense for the third quarter of 1999 decreased somewhat from
the same quarter of 1998. Higher interest rates during the 1999 third quarter
were more than offset by reductions in average outstanding borrowings on the
Company's revolving credit facility.
In the 1998 third quarter the Company recorded a charge totaling $3
million to reverse previously recorded deferred tax benefits. The reversal was
made when management determined that the Company might not earn sufficient
taxable income to realize the deferred tax benefits.
As a result of all the items discussed above, the Company recorded a
net loss for the third quarter of 1999 which was $2.6 million less than the 1998
third quarter net loss of $4.3 million.
RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30
<TABLE>
<CAPTION>
Nine Months Ended 1999
September 30, Increase (decrease)
--------------------------- ---------------------------
1999 1998 Amount %
------------ ------------ ------------ ------------
(Dollars in thousands)
REVENUES
<S> <C> <C> <C> <C>
IMS $ 134,743 $ 146,764 $ (12,021) (8.2)%
Technologies 22,961 33,488 (10,527) (31.4)%
------------ ------------ ------------
$ 157,704 $ 180,252 $ (22,548) (12.5)%
============ ============ ============
Gross profit (loss)
IMS $ 29,728 $ 33,356 $ (3,628) (10.9)%
Technologies (299) 4,380 (4,679) (106.8)%
------------ ------------ ------------
$ 29,429 $ 37,736 $ (8,307) (22.0)%
============ ============ ============
Operating income (loss)
IMS $ 17,975 $ 21,209 $ (3,234)
Technologies (4,289) 1,071 (5,360)
Corporate headquarters (1,293) (1,796) 503
------------ ------------ ------------
12,393 20,484 (8,091) (39.5)%
Unusual charges:
IMS (45) (2,184) 2,139
Technologies (530) (135) (395)
Corporate headquarters (2,389) (2,107) (282)
------------ ------------ ------------
(2,964) (4,426) 1,462
------------ ------------ ------------
CONSOLIDATED OPERATING
INCOME $ 9,429 $ 16,058 $ (6,629) (41.3)%
============ ============ ============
</TABLE>
Consolidated revenue for the first nine months of 1999 decreased
compared with the same period of 1998. Both operating segments reported lower
revenues in the 1999 period. Revenues of the IMS segment decreased in part from
the loss of a steel industry customer in late 1998 that had contributed $7.1
million of revenue to the 1998 nine-month period. Lower steel production in
North America by the Company's ongoing steel mill customers also contributed to
the decrease. Technologies segment revenues for the first nine months of 1999
decreased significantly, due in part to an overall reduction in the volume of
waste processed. Technologies' revenues were also negatively affected by a
change in the mix of material processed, as a higher proportion of material was
lower-priced cleanup business, and by overall competition in the waste
processing markets.
8
<PAGE>
ENVIROSOURCE, INC.
RESULTS OF OPERATIONS (CONTINUED)
Consolidated gross profit during the first nine months of 1999
decreased from the same period a year ago. The IMS gross profit decrease was due
to the revenue decrease discussed above. The Technologies segment experienced a
gross loss for the first nine months of 1999, due in part to the revenue
decline, and partly to proportionally higher fixed costs as a result of the
volume decrease.
Selling, general and administrative expenses for the first nine months
of 1999 did not significantly change from the same period of 1998.
Unusual charges of the profit improvement program initiated in 1998
totaled $3 million for the first nine months of 1999, and were incurred entirely
during the first quarter of the year. The charges consisted of $2.3 million for
employee severance and $.7 million of program consulting fees and expenses. For
the first nine months of 1998, such charges totaled $4.4 million, and consisted
of $2.3 million of excess equipment write-downs, $1.6 million of consulting fees
and expenses, and $.5 million of severance costs.
Interest expense for the first nine months of 1999 did not
significantly change from the same period of 1998.
Due to all the factors described above, the net loss for the first
nine months of 1999 was $7.1 million higher than the net loss recorded in the
first nine months of 1998.
LIQUIDITY AND CAPITAL RESOURCES
The Company's liquidity requirements arise primarily from the funding
of capital expenditures, working capital needs and debt service obligations. At
September 30, 1999, the Company had negative working capital of $11.4 million,
compared with negative working capital of $.4 million at December 31, 1998. The
reduction was primarily due to an increase in accrued interest on the Company's
Senior Notes paid semiannually, and an increase in payables.
The Company's capital additions are primarily for equipment
replacements and providing new services, and are not expected to exceed $20
million for all of 1999. Through September 30, 1999, the Company spent $12.5
million for capital additions and had commitments to spend approximately $7
million more, part of which may be expended after year-end 1999.
Technologies' landfill permits require the Company to fund closure and
post-closure monitoring and maintenance obligations by maintaining trust funds,
or other financial assurances. Based on current regulations, planned
improvements to waste treatment facilities and permitted capacity, such trust
funds are adequately funded.
At September 30, 1999, the Company had $36.1 million available under
its current $43.8 million bank credit facility. During the first nine months of
1999, the Company made net repayments totaling $20 million on the facility,
compared with net borrowings of $3 million during the same period of 1998.
Management intends to continue using cash flow from operations to further reduce
its outstanding borrowings.
9
<PAGE>
ENVIROSOURCE, INC.
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
As of mid-November 1999, management has substantially completed
negotiations to obtain a new bank credit facility to replace the existing one.
It is intended that the new agreement would provide the Company with funding
into the year 2003. Once the new agreement becomes effective, the Company
expects to write-off, with no anticipated tax benefit, debt issuance costs
related to the previous revolving credit facility. Such issuance costs were
approximately $1 million at September 30, 1999. Cash on hand, funds from
operations, and borrowing capacity under the current bank credit facility, or
any subsequent facility, are expected to be sufficient to satisfy the Company's
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 effect on the Company's results of operations
or financial condition, but the Company is unable to predict any such future
requirements.
YEAR 2000 READINESS DISCLOSURE
The Year 2000 issue is the result of computer programs being written
using two digits rather than four to define applicable years. Computer programs
that have date-sensitive software may recognize a date coded "00" as the year
1900 rather than the year 2000. This could result in system failures or
miscalculations that could cause disruptions of operations, including temporary
inability to process transactions.
The Company has completed an assessment of its computer information
systems. In the normal course of business, the Company has purchased new
software packages for most of its computer systems. The Company has also
implemented Year 2000-compliant upgrades to its core financial and operational
software. Most of the Company's other software has been upgraded, through
routine software releases from reliable software suppliers, to accommodate the
Year 2000 transition. All of the remaining software applications are
insignificant to the Company's operations and any such software applications
that require upgrades to accommodate the Year 2000 transition will receive such
upgrades prior to the end of 1999.
The Company has not incurred and does not anticipate incurring material
incremental costs for Year 2000 issues relating to its computer information
systems since all updates or replacements of such systems to date have occurred
in the ordinary course of business.
The Company has also substantially completed an assessment of its
non-information technology systems, including telecommunications and embedded
systems. The Company has identified certain non-core systems that, in current
operating form, may not accommodate the Year 2000 transition. These systems, and
any others identified as possibly not being Year 2000 compliant, will be
upgraded or replaced prior to December 31, 1999, and such upgrades or
replacements are expected to accommodate the Year 2000 transition. The costs of
compliance for non-information technology systems that would not otherwise be
replaced or upgraded in the ordinary course of business were insignificant for
the nine months ended September 30, 1999, and are not expected to be material
through year-end 1999.
10
<PAGE>
ENVIROSOURCE, INC.
YEAR 2000 READINESS DISCLOSURE (CONTINUED)
The Company is also addressing the Year 2000 activities of its
suppliers and customers. The Company has contacted its significant suppliers and
customers, either directly or by reviewing their Year 2000 Readiness
Disclosures, to determine if they are Year 2000 compliant, and if they are not,
to inquire when such compliance is expected to occur. This information is used
to assess the extent of interruption that could occur in the Company's
operations if a supplier or customer were non-compliant. The Company has not
received information from any of its significant suppliers or customers
regarding Year 2000 readiness that would indicate the possibility of a material
interruption of the Company's operations. There can be no guarantee that failure
to address Year 2000 issues by a third party would not have a material adverse
effect on the Company. However, the Company believes that its continuing
communications with its suppliers and customers will minimize these risks.
The Company's Year 2000 program is based on management's best estimates
of the Company's requirements. However, there can be no guarantee of the success
of the Company's Year 2000 program and actual results could differ materially
from the Company's plans. Factors that could impact implementation of this
program include, but are not limited to, the availability of trained personnel,
the ability to identify and correct all affected applications, and the failure
of third parties on which the Company relies to resolve their Year 2000 issues.
The Company is preparing contingency plans to address Year 2000 risks
for its most critical applications, though to date the Company is not aware of
any potential Year 2000 failure in these applications, as noted above.
Contingency plans will be developed as needed for other, non-core systems if it
appears that the Company or its significant suppliers or customers will not be
Year 2000 compliant and such noncompliance can be expected to have a material
adverse impact on the Company's operations.
SAFE HARBOR STATEMENT
Some of the statements in Management's Discussion and Analysis of
Financial Condition and Results of Operations are forward-looking statements.
These statements are based on current expectations that involve a number of
risks and uncertainties which could cause actual results to differ materially
from those projected. These forward-looking statements should be read in
conjunction with the financial statements contained herein which include
information describing factors that could cause actual results to differ
materially from those projected in such forward-looking statements.
11
<PAGE>
ENVIROSOURCE, INC.
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 Amendment of Amended and Restated Certificate of Incorporation
(incorporated herein by reference to Page 2 to the Company's Proxy
Statement filed April 30, 1997, in respect of its 1997 Annual Meeting
of Stockholders (File No. 1-1363)).
3.3 Amendment of Amended and Restated Certificate of Incorporation
(incorporated herein by reference to Pages 13 and 14 of the Company's
Proxy Statement filed April 30, 1998, in respect of its 1998 Annual
Meeting of Stockholders (File No. 1-1363)).
3.4 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)).
3.5 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)).
3.6 By-Laws Amendment Adopted March 26, 1997 By Unanimous Written Consent
of the Board of Directors, Effective June 19, 1997 (incorporated by
reference to Exhibit 3.5 to the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended June 30, 1997 (File No. 1- 1363)).
4.1 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)).
4.2 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)).
12
<PAGE>
ENVIROSOURCE, INC.
4.3 Second Supplemental Indenture, dated as of September 24, 1997, 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 4.5 to the Company's Quarterly Report
on Form 10-Q for the fiscal quarter ended September 30, 1997 (File No.
1-1363)).
4.4 Indenture, dated as of September 30, 1997, 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, Series B, including the form
of such Notes attached as Exhibit A thereto (incorporated herein by
reference to Exhibit 4.6 to the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended September 30, 1997 (File No.
1-1363)).
4.5 Registration Rights Agreement, dated as of September 30, 1997, among
the Company and Morgan Stanley Dean Witter, Jeffries & Company, Inc.
and NationsBanc Capital Markets, Inc. (incorporated herein by
reference to Exhibit 4.7 to the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended September 30, 1997 (File No.
1-1363)).
4.6 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)).
4.7 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).
4.8 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)).
4.9 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)).
4.10 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
13
<PAGE>
ENVIROSOURCE, INC.
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)).
4.11 Third Amendment, dated effective as of June 30, 1997, 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 4.14 to
the Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended June 30, 1997 (File No. 1-1363)).
4.12 Fourth Amendment, dated as of September 23, 1997, 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 4.18 to
the Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 1997 (File No. 1-1363)).
4.13 Fifth Amendment, dated as of March 5, 1998, 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
Annual Report on Form 10-K for the fiscal year ended December 31, 1997
(File No. 1-1363)).
4.14 Sixth Amendment, dated as of March 26, 1999, 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 4.14 to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1998
(File No. 1-1363)).
4.15 Seventh Amendment, dated as of April 9, 1999, 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 March 31,
1999 (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, 1998,
payable to the Company, amending and replacing the Promissory Note
dated March 31, 1993 (incorporated herein by reference to Exhibit 10.2
14
<PAGE>
ENVIROSOURCE, INC.
to the Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1998 (File No. 1-1363)).
10.3 Promissory Notes of Aarne Anderson, George E. Fuehrer and Louis A.
Guzzetti, Jr., dated as of March 31, 1998, payable to the Company,
amending and replacing the Promissory Notes dated April 1, 1993
(incorporated herein by reference to Exhibit 10.3 to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended March 31,
1998 (File No. 1-1363)).
10.4 Amendment To Note Related To Stock Purchase, dated as of January 15,
1999, between the Company and Louis A. Guzzetti, Jr. (incorporated
herein by reference to Exhibit 10.4 to the Company's Quarterly Report
on Form 10-Q for the fiscal quarter ended March 31, 1999 (File No.
1-1363)).
10.5 Amendment To Note Related To Stock Purchase, dated as of February 12,
1999, between the Company and George E. Fuehrer (incorporated herein
by reference to Exhibit 10.5 to the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended March 31, 1999 (File No. 1-1363)).
10.6 Promissory Note of Aarne Anderson, dated March 31, 1999, payable to
the Company, amending and replacing the Promissory Note dated March
31, 1998 (incorporated herein by reference to Exhibit 10.6 to the
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended
March 31, 1999 (File No. 1-1363)).
10.7 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)).
10.8 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)).
10.9 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)).
10.10 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)).
15
<PAGE>
ENVIROSOURCE, INC.
10.11 Envirosource, Inc. 1993 Stock Option Plan (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)).
10.12 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)).
10.13 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)).
10.14 Envirosource, Inc. 1999 Stock Option Plan (incorporated herein by
reference to Appendix A to the Company's Proxy Statement filed April
30, 1999, in respect of its 1999 Annual Meeting of Stockholders (File
No. 1-1363)).
10.15 Confidential Severance Agreement, dated as of January 15, 1999,
between the Company and Louis A. Guzzetti, Jr. (incorporated herein by
reference to Exhibit 10.18 to the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended March 31, 1999 (File No. 1-1363)).
10.16 Employment Agreement, dated as of January 20, 1999, between the
Company and John T. DiLacqua (incorporated herein by reference to
Exhibit 10.19 to the Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended March 31, 1999 (File No. 1-1363)).
10.17 Confidential Severance Agreement, dated as of February 12, 1999,
between the Company and George E. Fuehrer (incorporated herein by
reference to Exhibit 10.20 to the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended March 31, 1999 (File No. 1-1363)).
10.18 Letter Agreement, dated February 15, 1999, between the Company and
John C. Heenan (incorporated herein by reference to Exhibit 10.21 to
the Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1999 (File No. 1-1363)).
10.19 Letter Agreement, dated March 23, 1999, between the Company and James
C. Hull (incorporated herein by reference to Exhibit 10.22 to the
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended
March 31, 1999 (File No. 1-1363)).
16
<PAGE>
ENVIROSOURCE, INC.
(b) Reports on Form 8-K.
--------------------
On September 29, 1999 the Company filed a current report on Form 8-K,
dated September 24, 1999, with respect to Item 4, and filed an amended current
report on Form 8-K/A on October 12, 1999.
17
<PAGE>
ENVIROSOURCE, INC.
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: November 12, 1999
ENVIROSOURCE, INC.
By: /s/ John C. Heenan
------------------------
John C. Heenan
Senior Vice President and Chief
Financial Officer
18
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted
from the condensed consolidated balance sheet of Envirosource,
Inc. at September 30, 1999, and from the consolidated statement
of operations of Envirosource, Inc. for the nine months ended
September 30, 1999, and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-Mos
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 2,743
<SECURITIES> 0
<RECEIVABLES> 37,363
<ALLOWANCES> 988
<INVENTORY> 0
<CURRENT-ASSETS> 42,888
<PP&E> 286,933
<DEPRECIATION> 149,404
<TOTAL-ASSETS> 366,192
<CURRENT-LIABILITIES> 54,320
<BONDS> 278,684
0
0
<COMMON> 291
<OTHER-SE> (3,988)
<TOTAL-LIABILITY-AND-EQUITY> 366,192
<SALES> 0
<TOTAL-REVENUES> 157,704
<CGS> 0
<TOTAL-COSTS> 105,418
<OTHER-EXPENSES> 30,735
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 23,096
<INCOME-PRETAX> (12,980)
<INCOME-TAX> 805
<INCOME-CONTINUING> (13,785)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (13,785)
<EPS-BASIC> (2.37)
<EPS-DILUTED> (2.37)
</TABLE>
