SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
October 6, 1999 (October 5, 1999)
Safety-Kleen Corp.
(Exact name of registrant as specified in its charter)
Delaware 1-8368 51-0228924
(State or other (Commission (IRS Employer
jurisdiction File Number) Identification
of incorporation) Number)
1301 Gervais Street, Columbia, South Carolina 29201
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (803)933-4200
<PAGE>
ITEM 5. OTHER EVENTS
On October 5, 1999, Safety-Kleen Corp.(NYSE: SK) announced operating results for
the fourth quarter and fiscal year ended August 31, 1999. Sections of this
report constitute forward-looking statements that involve a number of risks and
uncertainties. Many factors could cause actual results to differ materially from
our expected results. The full text of the announcement is reproduced below.
For Immediate Release
SAFETY-KLEEN CORP.
ANNOUNCES FISCAL 1999 OPERATING RESULTS;
27% INCREASE IN EARNINGS PER SHARE
Columbia, S.C., -- October 5, 1999 -- Safety-Kleen Corp. (NYSE: SK) today
announced operating results for the fourth quarter and fiscal year ended August
31, 1999.
Revenue for the fourth quarter totaled $415.9 million compared to $435.0 million
for the similar quarter one year ago. Revenue for the fourth quarter last year
included $27.9 million of revenue from the Company's deconsolidated European
operations and $10.7 million from harbor dredging and placement related
projects, neither of which contributed to the fourth quarter's revenue this
year.
Operating income for the fourth quarter increased 14.5% to $90.6 million for an
operating margin of 21.8%. This compares with operating income of $79.1 million
and a margin of 18.2% in the same quarter of fiscal 1998.
Earnings before interest, taxes, depreciation and amortization ("EBITDA") for
the quarter totaled $122.4 million for an EBITDA margin of 29.4%, up from $116.2
million or a 26.7% margin in the fourth quarter one year ago.
An extraordinary charge of $15.0 million was recorded in the fourth quarter
related to the write-off of a deferred tax asset associated with the Company's
previously announced repurchase of the subordinated convertible pay-in-kind
debenture on August 27, 1999.
Net income before restructuring charges and extraordinary items for the fourth
quarter of fiscal 1999 was $28.2 million, up 29.4% compared with $21.8 million
in the same quarter in the prior year. On a diluted basis, net income before
restructuring charges and extraordinary items was $0.28 per share for the
quarter, an increase of 27.3% over $0.22 per share reported in the prior year.
Average shares outstanding for the fourth quarters of fiscal 1999 and 1998 on a
diluted basis were 111.8 million and 111.1 million, respectively.
For the twelve months ended August 31, 1999, revenues totaled $1,685.9 million,
an increase of 42.2% over $1,185.5 million reported in the prior year. Net
income before restructuring charges and extraordinary items increased 103.7% to
$103.9 million from $51.0 million in the prior year. On a diluted basis, net
income before restructuring charges and extraordinary items rose to $1.03 per
share for the year, an increase of 43.1% over $0.72 per share in the prior year.
<PAGE>
In addition, on the recommendation of the Special Committee of the Board of
Directors, the Board of Safety-Kleen has determined to take the necessary steps
to re-adopt the Shareholder Rights Plan which had expired in June of 1999.
Further, the Board authorized Raymond James & Associates, Inc. to explore
strategic alternatives in response to Laidlaw Inc.'s previously announced
intention to sell its approximate 44% interest in the Company.
Commenting on the results, President and Chief Executive Officer, Kenneth W.
Winger noted, "The aggressive goals we set for the Company in fiscal 1999 were
met. Dramatic cost savings were achieved. The integration of our revenue
generating services, our staff and our business procedures have been largely
completed. We have continued to build upon the positive aspects of last year's
merger. The result is the most efficient and focused company in the industrial
services marketplace today. We are now beginning to see the growth that
Safety-Kleen can produce. Specifically, we are encouraged by growth of more than
5% from the core components of our current business. Our leading position and
continued commitment to providing effective solutions to customer needs will
provide for continued progress in fiscal 2000."
Safety-Kleen Corp. is the leading industrial waste service company for both
hazardous and non-hazardous waste streams. From collection through recycle and
disposal, the Company provides comprehensive waste management services to over
400,000 customers in North America.
For further information contact:
- ---------------------------------
Kenneth W. Winger, President and Chief Executive Officer - (803) 933-4212
Paul R. Humphreys, Senior Vice President, Finance and Chief Financial Officer -
(803) 933-4261
Safety-Kleen Investor Relations - (803) 933-4285
Private Securities Litigation Reform Act:
- -----------------------------------------
Sections of this release constitute forward-looking statements that involve a
number of risks and uncertainties. Many factors could cause actual results to
differ materially from our expected results. These factors include risks
associated with acquisitions; achievement of synergy objectives; the attainment
of revenue growth targets; the adoption of new environmental laws and
regulations and how they are interpreted and enforced; changes in demand for the
Company's services; competition; and prices for petroleum-based products.
-END-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SAFETY-KLEEN CORP.
By: /s/ Kenneth W. Winger
------------------------
Kenneth W. Winger, President
and Chief Executive Officer
Date: October 6, 1999
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
SAFETY-KLEEN CORP.
CONSOLIDATED STATEMENTS OF INCOME
($ in thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
August 31, August 31,
---------- ----------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues $415,859 $435,001 $1,685,948 $1,185,473
Expenses:
Operating 259,377 284,244 1,070,666 797,382
Selling, general and administrative 34,095 34,544 134,497 108,817
Restructuring and other charges -- -- -- 65,831
-------- -------- ---------- ----------
EBITDA 122,387 116,213 480,785 213,443
Depreciation and amortization 31,757 37,124 136,002 93,051
-------- -------- ---------- ----------
Operating income 90,630 79,089 344,783 120,392
Interest expense, net 39,082 41,850 165,014 99,771
Equity in earnings of associated company 604 -- 2,708 --
-------- -------- ---------- ----------
Income before income tax expense 52,152 37,239 182,477 20,621
Income tax expense 23,951 15,415 78,565 9,133
-------- -------- ---------- ----------
Income before extraordinary item 28,201 21,824 103,912 11,448
Extraordinary item, net of applicable income tax (15,036) -- (15,036) (11,283)
--------- -------- ----------- -----------
Net income $ 13,165 $ 21,824 $ 88,876 $ 205
======== ======== ========== ==========
Basic income per share:
Income before extraordinary item $ 0.32 $ 0.25 $ 1.17 $ 0.18
Extraordinary item, net of applicable income tax (0.17) -- (0.17) (0.18)
-------- ------------- ------------- -------------
Net income $ 0.15 $ 0.25 $ 1.00 $ --
======= ============ ============ =============
Weighted average common stock outstanding (000s) 89,441 87,741 88,537 62,322
======== ============= ============= =============
Diluted income per share:
Income before extraordinary item $ 0.28 $ 0.22 $ 1.03 $ 0.18
Extraordinary item, net of applicable income tax (0.13) -- (0.13) (0.18)
-------- ------------- ------------- -------------
Net income $ 0.15 $ 0.22 $ 0.90 $ --
======= ============ ============ =============
Weighted average common stock outstanding and
assumed conversions (000s) 111,790 111,131 111,645 62,322
======== ============= ============= =============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SAFETY-KLEEN CORP. FOURTH QUARTER FISCAL 1999
Components of revenue ($ in millions): Three Months Ended August 31,
-----------------------------
1999 1998
---------------------------- ---------------------
<S> <C> <C> <C> <C>
Collection and Recovery Services
Industrial Services $ 202.3 49% $ 201.2 46%
Commercial and Institutional Services 140.2 34% 132.7 31%
-------- ---- -------- ----
Total Collection and Recovery Services 342.5 83% 333.9 77%
Treatment and Disposal Services 73.4 17% 73.2 17%
European Operations 0.0 0% 27.9 6%
-------- ---- -------- ----
Total revenue $ 415.9 100% $ 435.0 100%
======== ==== ======== ====
Twelve Months Ended August 31,
------------------------------
1999 1998
--------------------------------------------------
Collection and Recovery Services
Industrial Services $ 800.1 47% $ 585.3 50%
Commercial and Institutional Services 540.7 32% 227.7 19%
-------- ---- -------- ----
Total Collection and Recovery Services 1,340.8 79% 813.0 69%
Treatment and Disposal Services 313.4 19% 324.6 27%
European Operations 31.7 2% 47.9 4%
-------- ----- -------- ----
Total revenue $1,685.9 100% $1,185.5 100%
======== ==== ======== ====
</TABLE>
<TABLE>
<CAPTION>
Components of revenue change: Percentage Increase (Decrease)
Three Months Ended August 31,
1999 over 1998
--------------
<S> <C>
Expansion of customer base by acquisition 0.0%
Other, primarily through volume and price changes (Note 1) 2.5%
Divestitures and closures (7.0%)
Foreign exchange rate changes 0.1%
------
Total (4.4%)
======
</TABLE>
Note 1: Prior year revenue included approximately $10.7 million of harbor
dredging and placement project revenues which were not active in the current
period. Excluding revenue from these projects, the price and volume component of
the change in revenue would have been a positive 5.0%.
<PAGE>
SAFETY-KLEEN CORP. FOURTH QUARTER FISCAL 1999
<TABLE>
<CAPTION>
Percentage Increase (Decrease)
Twelve Months Ended August 31,
1999 over 1998
--------------
<S> <C>
Expansion of customer base by acquisition 46.8%
Other, primarily through volume and price changes (Note 2) 1.5%
Divestitures and closures (5.3%)
Foreign exchange rate changes (0.8%)
------
Total 42.2%
=====
</TABLE>
Note 2: Revenue from the Company's harbor dredging and placement projects
declined $31.4 million in the current year compared to the prior year. Excluding
revenue from these projects, the price and volume component of the change in
revenue would have been a positive 4.3%.
(b) Exhibits
None
