<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
May 28, 1998
------------------------------------------------
Date of Report (Date of earliest event reported)
INTERNATIONAL TECHNOLOGY CORPORATION
------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 1-9037 33-0001212
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(State of other (Commission (IRS Employer
jurisdiction of File Number) ID Number)
incorporation)
2790 Mosside Boulevard
Monroeville, Pennsylvania 15146-2792
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(Address of principal offices)
(412) 372-7701
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(Registrant's telephone number, including area code)
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Item 5. Other Events.
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International Technology Corporation (the "Company") announced today
its financial results for the fourth fiscal quarter and the year ended
March 27, 1998 and its intention to divest itself of certain non-core
assets. A copy of the Press Release dated May 28, 1998 is attached
hereto as Exhibit 99.1 and a Revised Condensed Consolidated State-
ments of Operations dated June 2, 1998 is attached hereto as
Exhibit 99.2.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits .
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(c) Exhibits
--------
99.1 Press release dated May 28, 1998
99.2 Revised Condensed Consolidated Statements of Operations dated
June 2, 1998
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SIGNATURE
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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.
INTERNATIONAL TECHNOLOGY CORPORATION
Dated: May 28, 1998
/s/ HARRY SOOSE
-------------------------------------
Harry Soose
Vice President and Controller
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EXHIBIT INDEX
Sequentially
No. Exhibit Numbered Page
--- ------- -------------
99.1 Press Release dated May 28, 1998 ---
99.2 Revised Condensed Consolidated Statements
of Operations dated June 2, 1998 ---
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Exhibit 99.1
Release Date: FOR IMMEDIATE RELEASE
Contact: Richard R. Conte
Harry J. Soose
(412) 372-7701
INTERNATIONAL TECHNOLOGY CORPORATION
REPORTS FOURTH QUARTER AND FISCAL YEAR 1998 RESULTS
---- Operating Results in Line With Expectations -
Takes Special Charges Related to OHM Merger ----
Contract Awards Build Backlog to Record Level $3.5 Billion
OHM Merger Closing Scheduled for Mid-June
Pittsburgh, Pennsylvania --- May 28, 1998 --- International Technology
Corporation (NYSE:ITX) ("IT" or the "Company") today reported financial results
for the fourth fiscal quarter and the year ended March 27, 1998. Revenues for
the quarter were $136.0 million, an increase of 42% over the $95.7 million for
the prior year's fourth quarter. Revenues for the fiscal year ended March 27,
1998 were $442.2 million, up 22% over the $362.1 million for the prior fiscal
year. Fiscal year 1998 includes the results of OHM Corporation ("OHM") since
February 25, 1998, the date on which IT acquired a 54% controlling interest.
Revenues related to OHM in the fourth quarter were $42.1 million.
Net income for the quarter ended March 27, 1998 (excluding special charges,
merger related expenses and the results of OHM) was $0.7 million, or $0.07 per
share, compared with a net loss of $0.2 million, or $(0.02) per share, for the
fourth quarter of the prior year. Excluding special charges, merger related
expenses and the results of OHM, net income for the year ended March 27, 1998
was $1.8 million, or $0.19 per share, compared to a net loss of $5.3 million or
$(0.57) per share, for the prior fiscal year. Net loss (including special
charges, merger related expenses and the results of OHM) for the fourth quarter
and fiscal year 1998 was $15.7 million, or $(1.62) per share, and $23.2 million,
or $(2.38) per share, respectively, compared to a net loss of $0.2 million, or
$(0.02) per share, and $13.7 million, or $(1.48) per share, for the comparable
periods of the prior year, respectively.
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The merger related charges in the current quarter include $5.7 million of OHM
integration costs, primarily related to severance and office consolidations,
and $3.4 million of additional financing costs in connection with the tender
offer for OHM shares. The quarter also includes a $5.7 million (net of tax), or
$(0.59) per share, charge related to the early extinguishment of IT's $65
million senior debt which was refinanced in connection with the OHM merger. In
addition, as previously announced, the quarter includes a charge of $5.0 million
(net of tax), or $(0.51) per share, related to additional site closure costs
primarily related to the discontinued operations Panoche disposal facility.
OHM Integration Plan Substantially Complete
Anthony J. DeLuca, IT's chief executive officer and president, stated "The
integration of OHM is ahead of schedule and substantially complete. We have
taken the actions necessary to ensure that we will achieve our $25 million
synergy target. Our organization is stabilizing with increased focus on serving
clients and pursuing our markets."
Divestiture of Non-Core Assets
IT's Board of Directors considered and approved at it's May 27, 1998 meeting the
divestiture of certain non-core assets. The non-core assets primarily include
IT's 19% interest in Quanterra, Inc., an environmental laboratory business, and
the assets associated with IT's thermal incineration business. As a result of
this Board action, the Company anticipates recording a non-cash charge of
approximately $25 million in the quarter ending June 26, 1998.
Mr. DeLuca commented, "The divestiture of these non-core assets will allow
management to focus its full efforts on our core business growth and
diversification plan. The Company anticipates receiving cash proceeds of $7
million from the ultimate sale of these non-core assets which will provide
additional capital for our acquisition program."
Recent Project Wins Enhance Backlog to Record Level
Mr. DeLuca continued, "Since the announcement of the OHM merger on January 15,
1998, we have been awarded strategically important contracts with a total value
in excess of $800 million which clearly reflect the confidence our clients have
in the expertise and abilities of the combined
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companies. Backlog at March 27, 1998 reached a new record high of $3.5 billion."
Diversification Plan Continues
Mr. DeLuca added, "IT continued to implement its diversification plan during the
quarter, announcing on January 21, 1998 completion of its acquisition of
Jellinek, Schwartz and Connolly, Inc., a company providing economically driven,
science-based environmental consulting and advocacy services and on February 27,
1998 the acquisition of Landbank, Inc., a real estate acquisition and
restoration company focusing on environmentally impaired properties."
Statements of the Company's or management's intentions, beliefs, expectations
or predictions for the future, denoted by the words "anticipate", "believe",
"estimate", "expect", "project" and similar expressions are forward-looking
statements that reflect the current views of the Company and its management
about future events and are subject to certain risk, uncertainties and
assumptions. The Company's actual results could differ materially from those
projected in such forward-looking statements as a result of a number of factors
including competitive factors and pricing pressures, funding of backlog, the
effects of the integration of OHM and the Company and achievement of expected
synergies therefrom and industry-wide market factors.
International Technology Corporation is a leading global environmental
infrastructure solutions firm. The Company's common stock and depositary shares
are traded on the New York Stock Exchange under the symbols ITX and ITXpr,
respectively.
- Financial Table to Follow -
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INTERNATIONAL TECHNOLOGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
<TABLE>
<CAPTION>
Quarter Ended Fiscal Year Ended
------------------------------------ -------------------------------
March 27, March 28, March 27, March 28,
1998 1997 1998 1997
----------------- ---------------- -------------- ------------
(Unaudited)
<S> <C> <C> <C> <C>
Revenues $ 136,038 $ 95,712 $442,216 $362,131
---------- --------- --------- ---------
Operating income
excluding special charges $ 6,608 $ 3,405 $ 20,032 $ 4,707
Special charges (5,694)(a) - (14,248)(b) (8,403)(c)
---------- --------- --------- ---------
Income (loss) before interest and taxes 914 3,405 5,784 (3,696)
Interest expense, net (4,583) (1,155) (7,969) (5,260)
---------- --------- --------- ---------
Income (loss) before income taxes (3,669) 2,250 (2,185) (8,956)
(Provision) benefit for income taxes 141 (967) (4,175) 179
---------- --------- --------- ---------
Income (loss) from continuing
operations before extraordinary item (3,528) 1,283 (6,360) (8,777)
Extraordinary item-early extinguishment
of debt (net of $3,497 tax benefit) 5,706(d) - 5,706(d) -
---------- --------- --------- ---------
Income (loss) from continuing operations (9,234) 1,283 (12,066) (8,777)
Discontinued Operations: transportation, treatment
and disposal business (net of $3,040 tax benefit) 4,960(e) - 4,960(e) -
---------- --------- --------- ---------
Net income (loss) (14,194) 1,283 (17,026) (8,777)
Less preferred stock dividends (1,558)(f) (1,521) (6,167)(f) (4,916)
---------- --------- --------- ---------
Net income (loss) applicable to common stock $ (15,752) $ (238) $(23,193) $(13,693)
========== ========= ========= =========
Net income (loss) per common share: (g)
Earnings from continuing operations
(net of preferred stock dividends) $ (0.52) $ (0.02) $ (1.28) $ (1.48)
Extraordinary item-early extinguishment of debt (0.59) - (0.59) -
Earnings from discontinued operations (0.51) - (0.51) -
---------- --------- --------- ---------
$ (1.62) $ (0.02) $ (2.38) $ (1.48)
========== ========= ========= =========
Average common and common equivalent shares outstanding 9,733 9,606 9,737 9,227
</TABLE>
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INTERNATIONAL TECHNOLOGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Notes:
(a) Represents the OHM integration costs primarily severance and office
consolidations.
(b) Special charges relate to (1) $2,811 of costs associated with the
relocation of the Company's corporate headquarters (2) $1,800 from the sale
of a small California based, remediation services business (3) $3,943 non-
cash charge related to the Helen Kramer project claim settlement and (4)
$5,694 of OHM integration costs.
(c) Restructuring charge includes costs for severance, the closing of a number
of the Company's office and related items.
(d) Represents the cost related to the early extinguishment of the Company's
$65,000 senior subordinated debt refinanced in connection with the OHM
merger.
(e) Represents estimated additional closure costs primarily related to the
Panoche disposal facility.
(f) Preferred stock dividend includes an imputed non-cash dividend of $659 for
the quarter and $2,572 for the twelve-month period related to the Carlyle
preferred stock.
(g) Under SFAS No 128, net income (loss) per common share is computed by
dividing net income (loss), adjusted for preferred stock dividends, by the
weighted average number of common shares outstanding for the period. For
all periods presented, the computation of diluted earnings (loss) per
share, assuming conversion into common shares of the Company's convertible
preferred stock, common stock warrants, contingently issuable shares and
common stock equivalents, which are stock options, is antidilutive. The
adoption of SFAS No. 128 had no effect on the net income (loss) and diluted
earnings (loss) per common share for the periods presented.
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Exhibit 99.2
INTERNATIONAL TECHNOLOGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Revised, Dated June 2, 1998)
<TABLE>
<CAPTION>
Quarter Ended Fiscal Year Ended
------------------------------ ------------------------------
March 27, March 28, March 27, March 28,
1998 1997 1998 1997
-------------- ------------ ------------- -------------
(Unaudited)
<S> <C> <C> <C> <C>
Revenues $ 136,038 $ 95,712 $ 442,216 $ 362,131
-------------- ------------ ------------- -------------
Operating income
excluding special charges $ 6,872 * $ 3,405 $ 20,296 * $ 4,707
Special charges (5,694) - (14,248) (8,403)
-------------- ------------ ------------- -------------
Income (loss) before interest and taxes 1,178 3,405 6,048 (3,696)
Interest expense, net (4,583) (1,155) (7,969) (5,260)
Minority interest, net of tax (264) * - (264) * -
-------------- ------------ ------------- -------------
Income (loss) before income taxes (3,669) 2,250 (2,185) (8,956)
(Provision) benefit for income taxes 141 (967) (4,175) 179
-------------- ------------ ------------- -------------
Income (loss) from continuing
operations before extraordinary item (3,528) 1,283 (6,360) (8,777)
Extraordinary item-early extinguishment
of debt (net of $3,497 tax benefit) 5,706 - 5,706 -
-------------- ------------ ------------- -------------
Income (loss) from continuing operations (9,234) 1,283 (12,066) (8,777)
Discontinued Operations: transportation, treatment
and disposal business (net of $3,040 tax benefit) 4,960 - 4,960 -
-------------- ------------ ------------- -------------
Net income (loss) (14,194) 1,283 (17,026) (8,777)
Less preferred stock dividends (1,558) (1,521) (6,167) (4,916)
-------------- ------------ ------------- -------------
Net income (loss) applicable to
common stock $ (15,752) $ (238) $ (23,193) $ (13,693)
============== ============ ============= =============
Net income (loss) per common share:
Earnings from continuing operations
(net of preferred stock dividends) $ (0.52) $ (0.02) $ (1.28) $ (1.48)
Extraordinary item-early extinguishment of debt (0.59) - (0.59) -
Earnings from discontinued operations (0.51) - (0.51) -
-------------- ------------ ------------- -------------
$ (1.62) $ (0.02) $ (2.38) $ (1.48)
============== ============ ============= =============
Average common and common
equivalent shares outstanding 9,733 9,606 9,737 9,227
</TABLE>
* With OHM minority interest separately presented. On the previous Condensed
Consolidated Statement of Operations (as reported in the press release dated
May 28, 1998) the OHM minority interest was presented as part of operating
income.
