<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
- --- Act of 1934 for the twelve weeks ended September 10, 1994.
___ Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from ________ to _________.
Commission File #1-8513
SAFETY-KLEEN CORP.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Wisconsin 39-6090019
- ------------------------------- --------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1000 North Randall Road, Elgin, Illinois 60123-7857
- --------------------------------------------------------------------------------
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code 708/697-8460
------------
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 that 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
--- ---
Shares of common stock outstanding at September 10, 1994 were 57,754,963.
<PAGE>
SAFETY-KLEEN CORP. AND SUBSIDIARIES
-----------------------------------
PART I. FINANCIAL STATEMENTS
-----------------------------
The condensed financial statements included herein have been prepared by the
Company, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures are adequate to
make the information presented not misleading. In the opinion of management,
these statements contain all adjustments, consisting of only normal recurring
adjustments, necessary to present fairly the financial position as of September
10, 1994 and January 1, 1994, cash flows for the thirty-six-week periods ended
September 10, 1994 and September 11, 1993, and the results of operations for the
twelve-week and thirty-six-week periods ended September 10, 1994 and September
11, 1993. The 1994 interim results reported herein may not necessarily be
indicative of the results of operations for the full year 1994.
2
<PAGE>
SAFETY-KLEEN CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLAR AMOUNTS ARE IN THOUSANDS EXCEPT PER SHARE DATA)
ASSETS
<TABLE>
<CAPTION>
Current assets: Sept. 10, 1994 Jan. 1, 1994
-------------- ------------
<S> <C> <C>
Cash and cash equivalents $ 24,210 $ 17,375
Trade accounts receivable, less
allowances of $8,991 and $8,432,
respectively 98,576 98,678
Inventories 32,066 34,362
Prepaid expenses and other 40,934 43,309
---------- --------
Total current assets $ 195,786 $ 193,724
---------- --------
Equipment at customers and components,
at cost, less accumulated depreciation
of $30,637 and $30,922, respectively 90,066 63,026
Property, plant and equipment, at cost,
less accumulated depreciation of
$263,264 and $233,971, respectively 539,048 553,219
Intangible assets, at cost, less
accumulated amortization of $47,532
and $37,254, respectively 111,198 106,714
Other Assets 75,628 78,695
---------- --------
$1,011,726 $995,378
========== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Dividends payable $ 5,193 $ --
Current portion of long-term debt 10 888
Trade accounts payable 56,378 58,417
Accrued expenses 76,241 56,285
Restructure liability 12,720 21,742
Income taxes payable 12,540 1,347
Accrued environmental liabilities 7,695 10,736
---------- --------
Total current liabilities 170,777 149,415
---------- --------
Long-term debt, less current portion 276,460 288,633
---------- --------
Deferred income taxes 58,646 61,540
---------- --------
Restructure liability 54,247 62,431
---------- --------
Accrued environmental liabilities 46,825 55,768
---------- --------
Other Liabilities 18,170 14,927
---------- --------
Shareholders' equity
Preferred stock ($.10 par value;
authorized 1,000,000 shares; none
issued) $ -- $ --
Common stock ($.10 par value;
authorized 300,000,000 shares; issued
and outstanding 57,754,963 and
57,683,756 shares, respectively) 5,775 5,768
Additional paid-in capital 184,791 183,612
Retained earnings 212,067 194,261
Cumulative translation adjustments (16,032) (20,977)
---------- --------
$ 386,601 $362,664
---------- --------
$1,011,726 $995,378
========== ========
</TABLE>
The accompanying notes are an integral part of these balance sheets.
3
<PAGE>
SAFETY-KLEEN CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(AMOUNTS ARE IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Twelve Weeks Ended Thirty-Six Weeks Ended
------------------------------- -------------------------------
Sept. 10, 1994 Sept. 11, 1993 Sept. 10, 1994 Sept. 11, 1993
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Revenue $182,149 $182,047 $542,295 $553,179
-------- -------- -------- --------
Costs and expenses:
Operating costs and expenses 133,505 138,656 399,271 419,012
Selling and admin expenses 24,634 27,698 76,606 82,847
Interest income (133) (186) (390) (646)
Interest expense 3,657 2,734 9,879 7,526
-------- -------- -------- --------
161,663 168,902 485,366 508,739
-------- -------- -------- --------
Earnings before income taxes 20,486 13,145 56,929 44,440
Income taxes 8,274 7,336 23,544 19,509
-------- -------- -------- --------
Net earnings $ 12,212 $ 5,809 $ 33,385 $ 24,931
======== ======== ======== ========
Earnings per common and common
equivalent share: $ 0.21 $ 0.10 $ 0.58 $ 0.43
======== ======== ======== ========
Average number of common and common
equivalent shares outstanding 57,847 57,681 57,738 57,696
======== ======== ======== ========
Cash dividends per common share $ 0.09 $ 0.09 $ 0.27 $ 0.27
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
SAFETY-KLEEN CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLAR AMOUNTS ARE IN THOUSANDS)
<TABLE>
<CAPTION>
Thirty-Six Weeks Ended
-------------------------------
Sept. 10, 1994 Sept. 11, 1993
-------------- --------------
<S> <C> <C>
Net cash provided by operating activities $ 92,199 $ 83,788
-------- --------
Cash flows used in investing activities:
Equipment at customers and component
additions (33,534) (12,770)
Property, plant and equipment additions (27,430) (55,601)
Other (2,428) (2,615)
-------- --------
Net cash used in investing activities (63,392) (70,986)
-------- --------
Cash flows from (used in) financing activities:
Net borrowings (payments) (13,050) (2,135)
Dividends (10,387) (10,382)
Other 1,186 325
-------- --------
Net cash provided from (used in)
financing activities (22,251) (12,192)
-------- --------
Effect of exchange rate changes on cash 279 (178)
-------- --------
Net increase (decrease) in cash and cash
equivalents 6,835 432
Cash and cash equivalents at beginning of
year 17,375 30,565
-------- --------
Cash and cash equivalents at end of the
reporting period $ 24,210 $ 30,997
======== ========
Supplemental disclosures of cash paid
during the reporting period:
Interest (net of amount capitalized) $ 7,600 $ 2,653
======== ========
Income tax paid (net of refunds received) $ (4) $ 17,434
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
SAFETY-KLEEN CORP. AND SUBSIDIARIES
-----------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
1. INVENTORIES
The Company's inventories consist primarily of solvent, oil and supplies.
LIFO inventories at September 10, 1994 and January 1, 1994 were $4.9 and
$4.7 million, respectively. Under the FIFO method of accounting (which
approximates current or replacement cost), inventories would have been $1.1
million and $1.8 million higher at September 10, 1994 and January 1, 1994,
respectively.
2. PROPERTY
During the fourth interim period of 1993, the Company implemented a
restructuring plan in conjunction with its decision to convert a
substantial portion of its existing parts cleaner machine customers to new
cyclonic technology. As part of this restructuring plan, the Company wrote
down assets associated with the planned reduction of recycling capacity and
shut-down of certain facilities. As of September 10, 1994 and January 1,
1994, the net book value of property intended for sale as a result of such
planned recycling capacity reductions, facility shut-downs and other
restructuring actions was $15.8 million and $16.6 million, respectively.
3. INCOME TAXES
During the third interim reporting period of 1993 the Company recorded an
additional income tax expense of $2.2 million or $0.04 per share primarily
due to an increase in the statutory income tax rate in the United States.
Approximately $1.5 million of this additional income tax expense was a
result of revaluing the Company's fiscal year end 1992 deferred-tax
balances to reflect the tax rate changes. The balance of the increased
income tax expenses of $0.2 million and $0.5 million was related to the
third interim reporting period and the first twenty-four weeks of 1993,
respectively.
4. INTERIM REPORTING PERIODS
The Company's interim reporting periods are twelve weeks each for the first
three reporting periods of the year, and sixteen weeks for the fourth
reporting period.
6
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION
OVERVIEW
--------
In 1993, the Company introduced a new cyclonic parts cleaner service. The
cyclonic parts cleaner machine is designed to continuously remove dirt particles
from the solvent during use using a built in cyclonic separator. The cyclonic
parts cleaner service is aimed at replacing the Company's existing Model 16 and
30 red sink-on-a-drum parts cleaners in the United States. With the cyclonic
parts cleaner service, customers need service less frequently and generate less
waste on an annual basis, which should reduce the cost for the parts cleaner
service to both the customer and Safety-Kleen. At September 10, 1994, the
Company had placed 73,400 cyclonic units with customers. At September 10, 1994,
there were approximately 184,000 Model 16 and 30 parts cleaners in service with
customers in the United States, which represents approximately 50% of the total
installed base of Company-owned parts cleaners in the United States.
The Company believes that the new cyclonic parts cleaner service will
reduce the turnover rate from existing customers and result in faster
penetration of the market for new customers. The Company expects that the
annual gross profit margins as a percent of revenue on the cyclonic service will
ultimately be approximately 10 percentage points higher than on the comparable
red machine service. Although the margins on the cyclonic service are currently
not at this level, the Company anticipates its margins will improve as it gains
efficiencies associated with a growing base of cyclonic service customers.
However, no assurance can be given as to the ultimate impact the conversion to
the cyclonic technology will have on the Company's profitability or net machine
growth at this stage of the rollout.
The Company has also developed a proprietary filtration device which can be
added to larger Safety-Kleen machines and a substantial portion of customer-
owned parts cleaners. The Company believes this filtration device should provide
customers with the opportunity to receive waste minimization and cost reduction
benefits similar to the cyclonic parts cleaner service. The Company has
manufactured approximately 1,000 of these units, and is currently placing them
with customers on a test basis. If the test is successful, the Company intends
to offer this service throughout the United States.
During the fourth interim period of 1993, the Company announced that it had
developed a restructuring plan based on the conversion of its existing parts
cleaning machines to the new cyclonic units and certain other actions intended
to better focus the Company's operations on core environmental services. As
part of the Company's restructuring plan, it recorded a special pre-tax charge
of $179 million. This $179 million charge included $93 million to write down
assets and $86 million for anticipated cash expenditures related to actions the
Company has taken or intends to take as part of its restructuring plan.
During the first thirty-six weeks of 1994, the Company's restructure
reserves declined $17.2 million from $84.2 million to $67.0 million. The
Company incurred year-to-date after tax cash expenditures of $13.0 million
associated with the restructuring. In addition, the Company received a $10.8
million refund of estimated tax payments made in 1993 in the second interim
reporting period of 1994 as a result of the restructuring.
During the fourth interim period of 1993, the Company also recorded a $50
million pre-tax special charge for a change in estimate for remediation costs
relating to all operating and previously-closed sites. Primarily as a result of
this special charge, the Company's expenses for environmental remediation
declined $3.3 million and $7.5 million in the current twelve and thirty-six week
reporting periods, respectively, from the comparable periods of 1993.
7
<PAGE>
The Company continues to experience net earnings benefits from the
restructuring plan and change in accounting estimate in line with its previously
announced expected net earnings benefit from these actions of $12 million to $15
million ($20 million to $25 million pre-tax) for the full year 1994.
8
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FINANCIAL CONDITION
- -------------------
The Company's working capital decreased from $44.3 million at January 1,
1994 to $25.0 million at September 10, 1994. The Company incurred year-to-date
cash expenditures of $61.0 million in capital spending for equipment at
customers and property acquisitions and improvements. These expenditures were
financed by internally generated cash. The Company's long term debt decreased
by $12.2 million during the first thirty-six weeks of 1994.
The Company's long term debt to total capital ratio was 42% and 44% at
September 10, 1994 and January 1, 1994, respectively. The Company does not
expect its long-term debt to total capital ratio to change significantly during
the balance of 1994.
9
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RESULTS OF OPERATION
--------------------
COMPARISON OF THE TWELVE WEEK PERIODS ENDED
-------------------------------------------
SEPTEMBER 10, 1994 AND SEPTEMBER 11, 1993
-----------------------------------------
REVENUE
- -------
Revenue for the twelve weeks ended September 10, 1994 was $182 million,
virtually flat with the comparable period last year.
Revenue derived from the Company's North American and European operations
during the twelve weeks ended September 10, 1994 and September 11, 1993 was as
follows:
<TABLE>
<CAPTION>
Thousands of Dollars
------------------------------
Percentage
Sept. 10, 1994 Sept. 11, 1993 Increase (Decrease)
-------------- -------------- -------------------
<S> <C> <C> <C>
North America
Automotive/Retail Repair Services $ 53,796 $ 56,798 (5.3)%
Industrial Services 51,525 49,412 4.3%
Oil Recovery Services 27,535 26,221 5.0%
Other Services 29,726 31,977 (7.0)%
-------- --------
Total North America 162,582 164,408 (1.1)%
Europe 19,567 17,639 10.9%
-------- --------
Consolidated $182,149 $182,047 0.1%
======== ========
</TABLE>
NORTH AMERICAN AUTOMOTIVE/RETAIL REPAIR SERVICES: $1.5 million of the
$3.0 million revenue decline in the Company's North American Automotive/Retail
Repair Services can be attributed to the lack of sales from discontinued allied
products. Most of the remaining $1.5 million revenue decline is due to lower
parts cleaner service volume.
NORTH AMERICAN INDUSTRIAL SERVICES: The Company's North American
Industrial Services revenue for the current reporting period includes
approximately $25.7 million from the Fluid Recovery Service, which represents a
15% increase over the comparable period of 1993. Virtually all of this revenue
increase is due to higher volume experienced by the Company during the current
interim period. This increased volume was partially offset by a 9% decline in
the average revenue per drum collected, primarily due to quantity discounts.
The North American Industrial Parts Cleaner Service accounts for the
remaining $25.8 million of revenue, which represents a decrease of $1.2 million,
or 4%, from the comparable period of 1993. Lower allied product sales resulting
from the discontinuance of certain allied product lines accounted for $0.7
million of this decrease. The remaining $0.5 million decrease in revenue
resulted from lower parts cleaner service volume.
10
<PAGE>
NORTH AMERICAN OIL RECOVERY SERVICES: Revenue from North American Oil
Recovery Services was up $1.3 million, or 5%, during the current interim period
compared to 1993. This revenue improvement was largely due to a 21% increase in
the volume of base lube oil sold. This was partially offset by a 4% lower
average base lube oil selling price and a weaker Canadian dollar against the
U.S. dollar.
NORTH AMERICAN OTHER SERVICES: Revenue from Other Services during the
current reporting period was down $2.2 million, or 7%, from the comparable
period of 1993. The lack of sales caused by the planned discontinuance of Paint
Refinishing allied products accounts for $2.0 million of the decrease.
EUROPE: European current period revenues of $19.6 million were up $1.9
million or 11% from the comparable period of 1993. Foreign exchange increased
U.S. dollar European revenues by approximately 7%.
OPERATING COSTS AND EXPENSES
- ----------------------------
Operating costs and expenses as a percentage of revenue declined from 76.2%
in 1993 to 73.3% in the current reporting period. This gross profit margin
improvement is primarily attributable to the Company's lower cost structure
which resulted from its restructuring plan and to the change in accounting
estimate for remediation costs implemented in 1993.
SELLING AND ADMINISTRATIVE EXPENSES
- -----------------------------------
Selling and administrative expenses declined 11% from $27.7 million
during the twelve weeks ended September 11, 1993 to $24.6 million during the
current period. This reduction in selling and administrative expenses is
primarily due to the work force reductions implemented as part of the Company's
restructuring plan.
INTEREST EXPENSE
- ----------------
Interest expense increased $0.9 million to $3.7 million during the current
reporting period versus the comparable period of 1993, due primarily to
increased interest rates.
INCOME TAXES
- ------------
The Company's effective income tax rate was 40.4% for the twelve weeks
ended September 10, 1994, and 55.8% for the comparable period of 1993. The
decrease in the effective tax rate is primarily due to additional income tax
expense of $2.0 million incurred in the third interim reporting period of 1993
to revalue the Company's prior period deferred tax balances due primarily to an
increase in the statutory income tax rate in the United States.
11
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COMPARISON OF THE THIRTY-SIX WEEKS PERIOD ENDED
-----------------------------------------------
SEPTEMBER 10, 1994 AND SEPTEMBER 11, 1993
-----------------------------------------
REVENUE
- -------
Revenue for the thirty-six weeks ended September 10, 1994 was $542 million,
down $11 million, or 2%, from last year. This decline in revenue is primarily
attributable to a reduction in parts cleaner service volume and decreased allied
product sales due to the planned discontinuance of allied products.
Revenue derived from the Company's North American and European operations
during the thirty-six weeks ended September 10, 1994 and September 11, 1993 was
as follows:
<TABLE>
<CAPTION>
Thousands of Dollars
------------------------------
Percentage
Sept. 10, 1994 Sept. 11, 1993 Increase (Decrease)
-------------- -------------- -------------------
<S> <C> <C> <C>
North America
Automotive/Retail Repair Services $164,331 $172,346 (4.6)%
Industrial Services 151,821 147,462 2.9 %
Oil Recovery Services 79,585 79,687 (0.1)%
Other Services 88,536 97,959 (9.6)%
-------- --------
Total North America 484,273 497,454 (2.6)%
Europe 58,022 55,725 4.1 %
-------- --------
Consolidated $542,295 $553,179 (2.0)%
======== ========
</TABLE>
NORTH AMERICAN AUTOMOTIVE RETAIL/REPAIR SERVICES: Lower allied product
sales resulting from the discontinuance of certain allied product lines
accounted for $4.3 million of the $8.0 million year-to-date decline in revenue
from the Company's North American Automotive/Retail Repair Parts Cleaner
Services. Most of the remaining $3.7 million decline in revenue is due to lower
parts cleaner service volume.
NORTH AMERICAN AUTOMOTIVE INDUSTRIAL SERVICES: Revenue from the Company's
North American Automotive Industrial Services includes $78.1 million from the
Industrial Parts Cleaner Service and $73.7 million from the Fluid Recovery
Service.
Revenue from the Industrial Parts Cleaner Service decreased $2.5 million,
or 3%, from 1993. $1.8 million of this decrease resulted from the lack of sales
from discontinued allied products. Most of the remaining $0.7 million decline in
revenue is due to lower parts cleaner service volume.
Fluid Recovery Service revenue increased 10% over the comparable period of
1993, due to increased volume. This higher volume was offset by a 7% decline in
the average price per drum collected, primarily due to quantity discounts.
12
<PAGE>
NORTH AMERICAN OIL RECOVERY SERVICES: Revenue from North American Oil
Recovery Services was virtually flat with the comparable period of 1993. A 21%
increase in the volume of base lube oil sold offset by an 11% lower average lube
oil selling price increased revenue by $2.5 million. A weakening in the value
of the Canadian dollar and a 9% lower average used automotive oil collection
charge reduced revenue by $1.0 million and $0.9 million, respectively.
NORTH AMERICAN OTHER SERVICES: Revenue from Other Services during the
current reporting period was down $9.4 million, or 9.6%, from the comparable
period of 1993. The lack of sales caused by the planned discontinuance of Paint
Refinishing allied products accounts for $5.5 million of this decline.
EUROPE: European revenues of $58.0 million year-to-date were up $2.3
million, or 4.1%, during the thirty-six weeks ended September 10, 1994, versus
the comparable period of 1993.
OPERATING COSTS AND EXPENSES
- ----------------------------
Year-to-date operating costs and expenses as a percentage of revenue
declined from 75.8% during 1993 to 73.6% during 1994. This gross profit margin
improvement is primarily attributable to the Company's lower cost structure
which resulted from its restructuring plan and to the change in accounting
estimate for remediation costs implemented in 1993.
SELLING AND ADMINISTRATIVE EXPENSES
- -----------------------------------
Selling and administrative expenses totaled $76.6 million during the
thirty-six weeks ended September 10, 1994, down $6.2 million, or 8%, from the
prior year. This reduction in selling and administrative expenses is primarily
due to the work force reductions implemented as part of the Company's
restructuring plan.
INTEREST EXPENSE
- ----------------
Interest expense increased $2.4 million to $9.9 million during the first
thirty-six weeks of 1994 versus the comparable period of 1993, due primarily to
an increase in interest rates.
INCOME TAXES
- ------------
The Company's effective income tax rate was 41.4% for the current
year-to-date period and 43.9% for the comparable period of 1993. The decrease
in the effective tax rate is primarily due to additional income tax expense of
$1.5 million incurred during the first thirty-six weeks of 1993 to revalue the
Company's prior period deferred tax balances due primarily to an increase in the
statutory income tax rate in the United States.
13
<PAGE>
PART II.
--------
Item 1. LEGAL PROCEEDINGS
-----------------
Although the Company's goal is to fully comply with all environmental
regulations, the nature of the Company's business will likely cause it to incur
governmental fines and penalties from time to time as a consequence of its
business operations. In the majority of situations where proceedings are
commenced by governmental authorities, the matters involved relate to alleged
technical violations of permits or orders under which the Company operates, or
laws and regulations to which its operations are subject, and are often the
result of varying interpretations of the applicable requirements. Generally,
these proceedings result from routine inspections conducted by federal and state
regulatory agencies.
From time to time, the Company becomes subject to claims which allege
more than technical violations or in which the claimant seeks remedies which
involve potentially higher costs than routine technical violation claims. These
claims can be brought by either governmental authorities or private claimants.
The relief sought can involve remediation of the alleged environmental damage,
payment of damages, and (in the case of claims brought by governmental
authorities), fines and penalties.
In some cases of this type, governmental authorities may seek fines
and/or penalties from the Company which exceed $100,000 in each case. Eight such
proceedings against the Company were pending or known to be contemplated by
governmental authorities at September 10, 1994. In these cases, the governmental
authorities may allege, among other things, that the Company is responsible for
releases or threatened releases of hazardous substances, that the Company
engaged in soil excavation or clean-up activities without obtaining requisite
advance approvals and/or that the Company committed certain manifesting, storage
or waste handling violations. During the twelve week period ended September 10,
1994, Safety-Kleen Oil Services, Inc. ("SKOS"), a wholly-owned subsidiary of the
Company, settled a pending criminal investigation concerning the handling of
used oil and oily water from 1989 to 1991 at the Booth Oil Company, Inc. ("Booth
Oil") facility in Buffalo, New York. Booth Oil is not owned by the Company or
any of its subsidiaries. The Company and SKOS used the Booth Oil facility for
the processing of used oil and oily water. Under the settlement, SKOS agreed to
pay a $1.9 million civil forfeiture. The settlement was paid from accruals which
the Company had established previously; therefore, the settlement did not impact
the Company's results of operations. As a further part of the settlement, the
Company agreed to purchase the Booth Oil facility in Buffalo for $2.4 million.
The Company's practice is to attempt to negotiate resolution of claims
against the Company and its facilities. The Company has to date been able to
resolve cases on generally satisfactory terms. The Company is, however,
prepared to contest claims or remedies which the Company believes to be
inappropriate unless and until satisfactory settlement terms can be agreed upon.
Based on its past experience and its knowledge of pending cases, the
Company believes it is unlikely that the Company's actual liability on the cases
now pending will be materially adverse to the Company's financial condition. It
should be noted, however, that many environmental laws are written in a way in
which the Company's potential liability can be large, and it is always possible
that the Company's actual liability on any particular environmental claim will
prove to be larger than anticipated and accrued for by the Company. It is also
possible that expenses incurred in any particular reporting period for
remediation costs or for fines, penalties, or judgments could have a material
impact on the Company's earnings for that period.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
None.
14
<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 on this 25th day of October, 1994.
SAFETY-KLEEN CORP.
/s/ ROBERT W. WILLMSCHEN, JR.
-----------------------------
Robert W. Willmschen, Jr.
Senior Vice President Finance,
and Secretary - Chief Financial Officer
15