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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
MARCH 23, 1998
Date of Report
(Date of earliest event reported)
UTILX CORPORATION
COMMISSION FILE NUMBER 0-16821
DELAWARE 91-1171716
(State of Incorporation) (I.R.S. Identification Number)
P. O. BOX 97009
KENT, WASHINGTON 98064-9709 (253) 395-0200
(Address of Principal Executive Offices) (Telephone Number)
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The total number of pages in this Form 8-K is 4.
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ITEM 5. OTHER EVENTS
UTILX Corporation announced on March 20, 1998 that primarily due to unusually
heavy rain in the Southeastern United States, attributed to "El Nino," it
expected to report a significant loss for the three months ended March 31, 1998,
the fourth quarter of fiscal 1998. Actual results for the fourth quarter are
scheduled to be released in May after completion of the Company's annual audit.
The Company also announced the termination of its contract with Washington Gas
Light Company ("Washington Gas"), which had not been profitable in the last
year.
"We had expected excellent results this quarter because of the large amount of
work scheduled for our crews in the Southeastern part of the country, away from
the kind of severe winter weather that has impacted our fourth quarter results
in prior years," commented Craig E. Davies, UTILX President & CEO.
"Unfortunately, due to the unusual weather, constant heavy rains have impacted
the ability of both FlowMole and CableCure crews to work. Over three quarters of
our crews are working in the Southeast region and most of those crews have lost
thirty percent of their possible workdays so far this quarter. While it's too
early to predict specific results for the quarter, it is clear that we will
report a loss for the quarter in excess of $.10 per share."
"All of the projects being delayed due to weather are expected to be completed
in the first quarter of our next fiscal year, and we are looking forward to a
solidly profitable fiscal 1999," concluded Davies. "Weather permitting, the
adverse effects of the significant events impacting our current quarter should
be behind us as we enter the new fiscal year."
"We have been focusing heavily on profitability of individual contracts,"
continued Davies. "While our primary focus is on continuing productivity
improvements, we have been working with some of our customers on pricing and the
mix of work released to us, with much success. However, with one of our largest
customers, Washington Gas, we have been receiving an unprofitable mix of work
for a year. We have mutually agreed to terminate work for Washington Gas, and
began downsizing our office in North Virginia this month to concentrate on the
profitable work we do have in that area. Some small expenses will be incurred
this quarter to complete the downsizing, but we actually expect improved
profitability next year from that office on our remaining contracts. And,
although Washington Gas has represented about 10% of our total revenues this
fiscal year, we expect that growth from other customers will offset the lost
revenue from this contract in the next year."
The Company previously disclosed that it would also incur an anticipated high
level of corporate operating expenses in the fourth quarter, associated with the
installation of a new enterprise wide computer system. "This new system,
scheduled for installation in the summer of 1998, will aid us tremendously in
managing our growing, diverse field operations," added Davies. "The up-front
design costs will be approximately $350,000, all incurred and expensed in this
quarter."
UTILX Corporation provides critical services for the installation and renovation
of underground utilities in the U.S. and Canada through a network of regional
sales and service centers. The Company also conducts service operations
throughout Europe through its wholly-owned subsidiary in the United Kingdom.
-2-
<PAGE>
The Company's discussion of its future performance in the remarks above contains
forward looking statements that are subject to risks and uncertainties which may
cause actual results to differ materially, such as sudden changes in utilities'
demand for the Company's services due to budgetary or other factors. The
Company's contracts typically allow for cancellation on short notice. Such risks
are detailed in the Company's reports filed with the Securities and Exchange
Commission (SEC).
ITEM 7. EXHIBITS
99.1 Press Release.
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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.
UTILX CORPORATION
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(Registrant)
Date: March 20, 1998 By: /s/ Larry D. Pihl
-----------------------------
Larry D. Pihl, Vice President/Chief
Financial Officer
-4-
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EXHIBIT 99.1
[LOGO]
UTILX Corporation
22404 66th Avenue South Larry D. Pihl
P.O. Box 97009 Vice President & CFO
Kent, Washington 98064-9709 (253) 395-0200
Tel: 206/395-0200
Fax: 206/395-1040 PRESS RELEASE
Heavy Rains to Impact UTILX Fourth Quarter Results
Kent, WA - March 20, 1998 -- UTILX Corporation (NASDAQ: UTLX) announced today
that, primarily due to unusually heavy rain in the Southeastern United States,
attributed to "El Nino," it expected to report a significant loss for the three
months ended March 31, 1998, the fourth quarter of fiscal 1998. Actual results
for the fourth quarter are scheduled to be released in May after completion of
the Company's annual audit. The Company also announced the termination of its
contract with Washington Gas Light Company ("Washington Gas"), which had not
been profitable in the last year.
"We had expected excellent results this quarter because of the large amount of
work scheduled for our crews in the Southeastern part of the country, away from
the kind of severe winter weather that has impacted our fourth quarter results
in prior years," commented Craig E. Davies, UTILX President & CEO.
"Unfortunately, due to the unusual weather, constant heavy rains have impacted
the ability of both FlowMole and CableCure crews to work. Over three quarters of
our crews are working in the Southeast region and most of those crews have lost
thirty percent of their possible workdays so far this quarter. While it's too
early to predict specific results for the quarter, it is clear that we will
report a loss for the quarter in excess of $.10 per share."
"All of the projects being delayed due to weather are expected to be completed
in the first quarter of our next fiscal year, and we are looking forward to a
solidly profitable fiscal 1999," concluded Davies. "Weather permitting, the
adverse effects of the significant events impacting our current quarter should
be behind us as we enter the new fiscal year."
"We have been focusing heavily on profitability of individual contracts,"
continued Davies. "While our primary focus is on continuing productivity
improvements, we have been working with some of our customers on pricing and the
mix of work released to us, with much success. However, with one of our largest
customers, Washington Gas, we have been receiving an unprofitable mix of work
for a year. We have mutually agreed to terminate work for Washington Gas, and
began downsizing our office in North Virginia this month to concentrate on the
profitable work we do have in that area. Some small expenses will be incurred
this quarter to complete the downsizing, but we actually expect improved
profitability next year from that office on our remaining contracts. And,
although Washington Gas has represented about 10% of our total revenues this
fiscal year, we expect that growth from other customers will offset the lost
revenue from this contract in the next year."
The Company previously disclosed that it would also incur an anticipated high
level of corporate operating expenses in the fourth quarter, associated with the
installation of a new enterprise wide computer system. "This new system,
scheduled for installation in the summer of 1998, will aid us tremendously in
managing our growing, diverse field operations," added Davies. "The up-front
design costs will be approximately $350,000, all incurred and expensed in this
quarter."
<PAGE>
(more)
UTILX Corporation
March 20, 1998
Page 2
UTILX Corporation provides critical services for the installation and renovation
of underground utilities in the U.S. and Canada through a network of regional
sales and service centers. The Company also conducts service operations
throughout Europe through its wholly-owned subsidiary in the United Kingdom.
The Company's discussion of its future performance in the remarks above contains
forward looking statements that are subject to risks and uncertainties which may
cause actual results to differ materially, such as sudden changes in utilities'
demand for the Company's services due to budgetary or other factors. The
Company's contracts typically allow for cancellation on short notice. Such risks
are detailed in the Company's reports filed with the Securities and Exchange
Commission (SEC).
###
Note: Transmitted on Business Wire on March 20, 1998, at 2:15pm (PST)
