-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, L2GFR4l6xsayMeZ7od/XOZWpL6QyETIw06K3HkVNowurKE/Pm2VI88h/TB+47x5K 1qn14PjY15ff3XwKrlGQkw== 0000950152-96-004156.txt : 19960816 0000950152-96-004156.hdr.sgml : 19960816 ACCESSION NUMBER: 0000950152-96-004156 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960814 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: OHM CORP CENTRAL INDEX KEY: 0000788964 STANDARD INDUSTRIAL CLASSIFICATION: HAZARDOUS WASTE MANAGEMENT [4955] IRS NUMBER: 341503050 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09654 FILM NUMBER: 96613221 BUSINESS ADDRESS: STREET 1: 16406 US RTE 224 EAST CITY: FINDLAY STATE: OH ZIP: 45840 BUSINESS PHONE: 4194233529 MAIL ADDRESS: STREET 1: P.O. BOX 551 CITY: FINDLAY STATE: OH ZIP: 45839-0551 FORMER COMPANY: FORMER CONFORMED NAME: ENVIRONMENTAL TREATMENT & TECHNOLOGIES CORP DATE OF NAME CHANGE: 19890209 FORMER COMPANY: FORMER CONFORMED NAME: ENVIRONMENTAL TREATMENT & TECHNOLOGY CORP DATE OF NAME CHANGE: 19880816 10-Q 1 OHM CORPORATION 10-Q 1 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 AND EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 1-9654 OHM CORPORATION (Exact name of registrant as specified in its charter) OHIO 34-1503050 (State of Incorporation) (I.R.S. Employer Identification Number) 16406 U.S. ROUTE 224 EAST, FINDLAY, OH. 45840 (Address of principal executive offices) (Zip Code) (419) 423-3529 (Registrant's telephone number, including area code) Indicate by check 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 requirement for the past 90 days. Yes [X] No [ ] The number of shares of Common Stock, par value $0.10 per share, outstanding on July 31, 1996 was 26,830,218. 2 OHM CORPORATION INDEX TO QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1996
PART I FINANCIAL INFORMATION Page Number ------ Item 1. Financial Statements Consolidated Balance Sheets as of June 30, 1996 (Unaudited) and December 31, 1995.......................................................................... 1 Consolidated Statements of Income (Unaudited) for the Three and Six Months Ended June 30, 1996 and 1995................................................................... 2 Consolidated Statements of Cash Flows (Unaudited) for the Six Months Ended June 30, 1996 and 1995................................................................... 3 Notes to Consolidated Financial Statements (Unaudited)........................................... 4 Independent Accountants' Review Report........................................................... 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations............ 8 PART II OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders.............................................. 11 Item 6. Exhibits and Reports on Form 8-K................................................................. 11 Signatures................................................................................................ 12
3 PART I -- FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS OHM CORPORATION CONSOLIDATED BALANCE SHEETS (In Thousands, Except Share Data)
June 30, December 31, 1996 1995 ---------- ----------- ASSETS (Unaudited) Current Assets: Cash and cash equivalents........................................................... $ 4,413 $ 11,205 Accounts receivable................................................................. 88,863 100,291 Costs and estimated earnings on contracts in process in excess of billings.......... 71,828 77,156 Materials and supply inventory, at cost............................................. 12,304 11,831 Receivable from affiliated company.................................................. -- 15,000 Prepaid expenses and other assets................................................... 7,174 7,621 Deferred income taxes............................................................... 15,526 16,600 Refundable income taxes............................................................. 352 401 -------- -------- 200,460 240,105 -------- -------- Property and Equipment, net............................................................ 79,021 81,107 -------- -------- Other Noncurrent Assets: Investments in affiliated company................................................... 23,487 23,038 Intangible assets relating to acquired businesses, net.............................. 34,029 21,613 Deferred debt issuance and financing costs.......................................... 1,644 1,779 Deferred income taxes............................................................... 1,337 1,440 Other assets........................................................................ 6,705 7,424 -------- -------- 67,202 55,294 -------- -------- Total Assets.................................................................... $346,683 $376,506 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable.................................................................... $ 49,077 $ 65,233 Billings on contracts in process in excess of costs and estimated earnings.......... 562 1,387 Accrued compensation and related taxes.............................................. 7,590 6,174 Federal, state and local taxes...................................................... 23 200 Other accrued liabilities........................................................... 31,821 33,538 Current portion of noncurrent liabilities........................................... 4,174 4,417 -------- -------- 93,247 110,949 -------- -------- Noncurrent Liabilities: Long-term debt...................................................................... 87,097 104,111 Capital leases...................................................................... 45 53 Pension agreement................................................................... 884 901 -------- -------- 88,026 105,065 -------- -------- Commitments and Contingencies Shareholders' Equity: Preferred stock, $10.00 par value, 2,000,000 shares authorized; none issued and outstanding........................................... -- -- Common stock, $.10 par value, 50,000,000 shares authorized; Shares issued: 1996 - 26,804,569; 1995 - 26,647,077............................. 2,680 2,664 Additional paid-in capital.......................................................... 137,622 136,428 Retained earnings................................................................... 25,108 21,400 -------- -------- 165,410 160,492 -------- -------- Total Liabilities and Shareholders' Equity........................................ $346,683 $376,506 ======== ========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS. 1 4 OHM CORPORATION CONSOLIDATED STATEMENTS OF INCOME (In Thousands, Except Per Share Data)
Three Months Ended Six Months Ended June 30, June 30, ----------------------- ---------------------- 1996 1995 1996 1995 -------- -------- -------- -------- (Unaudited) (Unaudited) Revenue....................................................... $129,177 $ 99,501 $248,140 $179,718 Cost of services .......................................... 111,617 83,357 215,550 150,664 -------- -------- -------- -------- Gross Profit.................................................. 17,560 16,144 32,590 29,054 Selling, general and administrative expenses............. 11,943 13,285 23,119 20,966 -------- -------- -------- -------- Operating Income.............................................. 5,617 2,859 9,471 8,088 -------- -------- -------- -------- Other (Income) Expenses: Investment income.......................................... (4) (13) (15) (23) Interest expense........................................... 1,970 2,832 3,878 6,071 Equity in net earnings of affiliate........................ (224) (198) (449) (281) Miscellaneous expense, net................................. 314 7 543 39 -------- -------- -------- -------- 2,056 2,628 3,957 5,806 -------- -------- -------- -------- Income Before Income Taxes (Benefit).......................... 3,561 231 5,514 2,282 Income taxes (benefit)..................................... 1,182 (3) 1,805 761 -------- -------- -------- -------- Net Income.................................................... $ 2,379 $ 234 $ 3,709 $ 1,521 ======== ======== ======== ======== Net Income Per Share.......................................... $ 0.09 $ 0.01 $ 0.14 $ 0.08 ======== ======== ======== ======== Weighted average number of common and common equivalent shares outstanding....................... 26,830 20,593 26,757 18,135 ======== ======== ======== ========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS. 2 5 OHM CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands)
Six Months Ended June 30, ----------------------- 1996 1995 --------- -------- (Unaudited) Cash flows from operating activities: Net income............................................................................. $ 3,709 $ 1,521 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization..................................................... 8,016 3,780 Amortization of other noncurrent assets........................................... 1,699 1,400 Deferred income taxes............................................................. 1,177 (239) Loss/(gain) on sale of property and equipment..................................... 296 (22) Equity in net earnings of affiliate............................................... (449) (281) Deferred translation adjustments and other........................................ 49 59 Changes in current assets and liabilities: Accounts receivable............................................................... 10,879 (10,905) Costs and estimated earnings on contracts in process in excess of billings........ 475 7,209 Materials and supply inventory, at cost........................................... (473) (1,698) Prepaid expenses and other assets................................................. 447 (48) Refundable income taxes and other adjustments..................................... 49 68 Accounts payable.................................................................. (16,156) (14,161) Billings on contracts in process in excess of costs and estimated earnings........ (825) 2,376 Accrued compensation and related taxes............................................ 550 (148) Federal, state and local income taxes............................................. (177) 159 Other accrued liabilities......................................................... (5,222) (748) -------- --------- Net cash flows provided by/(used in) operating activities....................... 4,044 (11,678) -------- ---------- Cash flows from investing activities: Purchases of property and equipment............................................... (11,221) (7,148) Proceeds from sale of property and equipment...................................... 2,075 872 Increase in other noncurrent assets............................................... (562) (1,144) Decrease in receivable from related party......................................... 15,000 -- Cash acquired from purchase of business, net of acquisition cost.................. -- 13,527 -------- -------- Net cash provided by investing activities....................................... 5,292 6,107 -------- -------- Cash flows from financing activities: Increase in long term debt........................................................ -- 1,945 Payments on long-term debt and capital leases..................................... (2,372) (1,646) Proceeds from borrowing under revolving credit agreement.......................... 105,400 73,800 Payments on revolving credit agreement............................................ (120,300) (77,900) Payments on pension agreement..................................................... (66) (55) Common stock issued for 401k funding and stock options........................... 1,210 -- Proceeds from private placement of common stock................................... -- 10,000 Reissuance of treasury stock...................................................... -- 1,425 -------- -------- Net cash (used in)/provided by financing activities............................. (16,128) 7,569 -------- -------- Net (decrease)/increase in cash and cash equivalents............................ (6,792) 1,998 Cash and cash equivalents at beginning of period....................................... 11,205 4,930 -------- -------- Cash and cash equivalents at end of period............................................. $ 4,413 $ 6,928 ======== ========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS. 3 6 OHM CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 1996 (Unaudited) NOTE 1 -- BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements have been prepared by OHM Corporation (the "Company") and reflect all adjustments of a normal recurring nature which are, in the opinion of management, necessary for a fair presentation of financial results for the three and six months ended June 30, 1996 and 1995, in accordance with generally accepted accounting principles for interim financial reporting and pursuant to Article 10 of Regulation S-X. 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. These interim consolidated financial statements should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 1995. The results of operations for the three and six months ended June 30, 1996 and 1995 are not necessarily indicative of the results for the full year. The unaudited consolidated financial statements include the accounts of the Company and its subsidiaries. The Company's 40% owned asbestos abatement affiliate, NSC Corporation ("NSC"), has been accounted for using the equity method. All material intercompany transactions and balances have been eliminated in consolidation. The consolidated financial statements at June 30, 1996, and for the three and six months then ended, have been reviewed, prior to filing, by Ernst & Young LLP, the Company's independent accountants, and their report is included herein. NOTE 2 -- SUPPLEMENTARY CASH FLOW INFORMATION Cash paid for interest was $4,222,000 and $5,952,000 and cash paid for income taxes was $327,000 and $330,000 for the six months ended June 30, 1996 and 1995, respectively. NOTE 3 -- ACQUISITION On May 30, 1995, the Company completed the acquisition of substantially all of the assets and certain liabilities of the hazardous and nuclear waste remediation service business (the "Division") of Rust International Inc. ("Rust") in exchange for 9,668,000 shares of the common stock of the Company, or approximately 37% of the outstanding shares of the Company's common stock. Such shares issued to Rust are subject to a number restrictions set forth in a Standstill and Non-competition Agreement that was entered into pursuant to the Agreement and Plan of Reorganization dated December 5, 1994, as amended (the "Reorganization Agreement"), among the Company, Rust and certain of their subsidiaries. In addition to the net assets of the Division, the Company received $16,636,000 in cash pursuant to provisions of the Reorganization Agreement that provided for an adjustment based on the average share price of the Company's common stock for a 20 trading day period prior to closing. Also, under terms of the Reorganization Agreement, as amended on March 22, 1996, the Company received an additional $15,000,000 on March 25, 1996. For purposes of calculating the consideration given by the Company for the Division, such 20 trading day average per share price of $11.25 was used, adjusted to reflect a 40% discount for the restricted nature of the common stock issued. Consideration for the Division aggregated $65,259,000. The acquisition of the Division has been accounted for using the purchase method and, accordingly, the acquired assets and assumed liabilities, including goodwill of $34,183,000, have been recorded at their estimated fair values as of May 30, 1995. The acquired operations of the Division included contracts in process for which the Company recognizes revenue using the percentage of completion method of accounting. The valuation of the contracts in process require estimates relating to the costs to complete certain large contracts in process which require provisions for losses. The Company has estimated the fair value of contracts acquired at amounts which will allow the Company to achieve reasonable operating margins on the effort it expends to complete these contracts. The Company's consolidated financial statements for the year ended December 31, 1995, include the results of operations for the Division since May 30, 1995. 4 7 The estimated fair value of the assets acquired and liabilities assumed at the date of acquisition are as follows (in thousands): Current assets.........................................................$59,805 Property and equipment..................................................21,523 Goodwill................................................................34,183 Current liabilities.....................................................50,252
NOTE 4 -- INCOME TAXES The reasons for differences between the provisions for income taxes and the amount computed by applying the statutory federal income tax rate to income before income taxes are as follows:
Three Months Ended Six Months Ended June 30, June 30, ------------------- ------------------ 1996 1995 1996 1995 ------ ------ ------ ------ Federal statutory rate........................... 34.0 % 34.0 % 34.0 % 34.0 % Add (deduct): State income taxes, net of federal benefit.. 4.7 % 1.7 % 4.7 % 4.5 % Equity in net earnings of affiliate......... (1.7)% (23.3)% (2.2)% (3.3)% Other, net.................................. (3.8)% (13.7)% (3.8)% (1.9)% ---- ----- ---- ---- 33.2 % (1.3)% 32.7 % 33.3 % ==== ===== ==== ====
NOTE 5 -- SEASONALITY The timing of revenue recognition is dependent on the Company's backlog, contract awards and the performance requirements of each contract. The Company's revenue are also affected by the timing of its clients' planned remediation work which generally increases during the third and fourth quarters. Because of this variability in demand, the Company's quarterly revenue can fluctuate, and revenue for the first and second quarters of each year can normally be expected to be lower than the third and fourth quarters. Although the Company believes that the historical trend in quarterly revenue for the third and fourth quarters of each year are generally higher than the first and second quarters, there can be no assurance that this will occur in future periods. Accordingly, quarterly or other interim results should not be considered indicative of results to be expected for any quarter or for the full year. NOTE 6 -- LITIGATION AND CONTINGENCIES The Company's accounts receivable at June 30, 1996 include a claim receivable aggregating approximately $26,438,000 in direct and other costs relating to a major remediation project which was performed by the Company for Citgo Petroleum Corporation ("Citgo") at its Lake Charles, Louisiana refinery during 1993 and 1994. This claim receivable represents direct and other costs to date for activities which the Company's management believed exceeded the scope of the existing contract due to deficient project specifications provided by Citgo and Oxy USA, Inc. ("Oxy") as well as differing site conditions. In addition, at June 30, 1996, the Company has recorded in its financial statements approximately $5,381,000 of accounts receivable that are in dispute for work performed under the terms of the Company's base contract with Citgo. In April 1994, Citgo filed an action in the U.S. District Court for the Western District of Louisiana seeking a declaratory judgment that the Company is not entitled to additional compensation under the contract and certain other relief. The Company's answer to the declaratory judgment action was filed in July 1994, together with counterclaims against Citgo for negligent misrepresentation, breach of contract and quantum meruit seeking damages in excess of $35,000,000. In August 1994, Citgo amended its complaint seeking damages under the contract for production shortfalls, which Citgo has asserted in answer to the Company's interrogatories to be approximately $27,600,000. The Company believes that such assertion of damages is totally without merit since the contract expressly provides that Citgo's sole remedy for production shortfalls by the Company is liquidated damages not to exceed $500,000. In January 1995, Citgo filed a third party complaint against Occidental Oil and Gas Corporation and Oxy in such litigation because of their prior involvement with the Citgo site and preparation of the contract specifications. Additionally, in July 1995, the Company also filed a third party complaint against Oxy for negligent misrepresentation as a result of its involvement with the development of sampling and analytical data relied upon by the Company in preparation of its bid and cost estimates for work at the site. The Company has also become involved in litigation with Occidental Chemical Corporation ("Occidental") relating to a separate project performed in 1993 and 1994 for Occidental. The Company's accounts receivable at June 30, 1996 include a claim receivable of $8,562,000 in direct and other costs relating to this project. The litigation arises from an October 1993 5 8 contract between the Company and Occidental for work at a contaminated site in North Tonawanda, New York. The Company's work was substantially delayed and its costs of performance were substantially increased as a result of conditions at the site which the Company's management believes were materially different than as represented by Occidental. The Company believes that Occidental has implicitly acknowledged the existence of differing conditions at the site through its previous execution and partial payment of a change order relating to the Company's position. In October 1994, Occidental issued a deductive change order deleting substantially all remaining work from the contract. On December 30, 1994, while the Company was in the process of developing a comprehensive request for equitable adjustment, Occidental filed suit against the Company in U.S. District Court for the Western District of New York alleging damages in excess of $50,000, the jurisdictional minimum. On March 3, 1995, Occidental filed an amended complaint seeking $8,806,000 in damages primarily for alleged costs incurred as a result of project delays and added volumes of incinerated wastes. On April 6, 1995, the Company filed its answer and counterclaim denying any liability to Occidental and seeking an amount in excess of $9,200,000 for damages arising from Occidental's breach of contract, misrepresentation and failure to pay outstanding contract amounts. Management believes that it has established adequate reserves should the resolution of the above accounts receivable be lower than the amounts recorded and such resolution should not have a material adverse impact upon the Company's consolidated results of future operations or financial condition. The Company was named in April 1994 as one of 33 third party defendants in a case titled UNITED STATES OF AMERICA V. AMERICAN CYANAMID COMPANY, INC., ET AL., pending in the United States District Court for the Southern District of West Virginia (the "U.S. District Court"). This litigation (the "Cost Recovery Litigation") arises out of claims made against several potentially responsible parties ("PRPs") by the Environmental Protection Agency ("EPA") for amounts in excess of $24,000,000 for response costs arising out of releases and threatened releases of hazardous waste at the Fike Chemical, Inc. Superfund site ("Fike") in Nitro, West Virginia (the "Site"). The Company was retained as a response action contractor for the site under contracts with the United States Army Corps of Engineers ("USACE") and the EPA. The third party complaint alleges that the Company was an operator of the Site during the remediation and that the Company caused releases or threatened releases of hazardous substances at the Site as a result of allegedly negligent conduct, grossly negligent conduct or intentional misconduct. The third party complaint seeks to recover clean-up costs from the Company and the other third party defendants. The Company has submitted claims for indemnification related to the lawsuit under its contract with the USACE and the EPA, has notified its contractors pollution liability insurance carrier and has impleaded the United States. Those PRP's also filed a suit in the U.S. District Court against the Company on behalf of the United States under the QUI TAM provisions of the False Claims Act (the "QUI TAM suit") and caused the United States to conduct an investigation of the accuracy of the Company's billings to the EPA. The Company cooperated fully with the investigation and has been informed that the government will not be proceeding criminally against the Company. The Company signed a Settlement Agreement, pursuant to which the Company agreed to pay $589,000, disposing of any civil liability relating to the QUI TAM suit and the government investigation with respect to Fike. The Settlement Agreement has been approved by the U.S. District Court. The Company also executed a Consent Decree settling the Cost Recovery Litigation without any costs to the Company. The Consent Decree is subject to U.S. District Court approval. In addition to the above, the Company is subject to a number of claims and lawsuits in the ordinary course of its business. In the opinion of management, the outcome of these actions, which are not clearly determinable at the present time, are either adequately covered by insurance, or if not insured, will not, in the aggregate, have a material adverse impact upon the Company's consolidated financial position or the results of future operations. 6 9 INDEPENDENT ACCOUNTANTS' REVIEW REPORT Board of Directors and Shareholders OHM Corporation We have reviewed the accompanying consolidated balance sheet of OHM Corporation and subsidiaries as of June 30, 1996, and the related consolidated statements of income for the three and six month periods ended June 30, 1996 and 1995 and the consolidated statements of cash flows for the six month periods ended June 30, 1996 and 1995. These financial statements are the responsibility of the Company's management. We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data, and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, which will be performed for the full year with the objective of expressing an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our reviews, we are not aware of any material modifications that should be made to the accompanying consolidated financial statements referred to above for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet of OHM Corporation and subsidiaries as of December 31, 1995, and the related consolidated statements of operations, changes in shareholders' equity, and cash flows for the year then ended, not present herein, and in our report dated February 13, 1996, except for Notes 2 and 10, as to which the date is March 25, 1996, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 1995, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. ERNST & YOUNG LLP Columbus, Ohio July 26, 1996 7 10 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL The Company provides a broad range of environmental and hazardous waste remediation services to its clients located primarily in the United States. The timing of the Company's revenue is dependent on its backlog, contract awards and the performance requirements of each contract. The Company's revenue is also affected by the timing of its clients' planned remediation activities which generally increase during the third and fourth quarters. Because of this change in demand, the Company's quarterly revenue can fluctuate, and revenue for the first and second quarters of each year have historically been lower than for the third and fourth quarters, although there can be no assurance that this will occur in future years. Accordingly, quarterly or other interim results should not be considered indicative of results to be expected for any quarter or full fiscal year. On May 30, 1995, the Company completed the acquisition of substantially all of the assets and certain liabilities of the hazardous and nuclear waste remediation service business (the "Division") of Rust International Inc. ("Rust") in exchange for 9,668,000 shares of common stock of the Company, or approximately 37% of the outstanding shares of the Company's common stock. In exchange for a warrant to purchase up to 700,000 shares of the Company's common stock at an exercise price of $15.00 per share during the five years following the closing date, Rust's parent Company, WMX Technologies, Inc. ("WMX"), provides the Company with a credit enhancement in the form of guarantees, issued from time to time upon request of the Company, of up to $62,000,000 of the Company's indebtedness, which will increase proportionately up to $75,000,000 upon issuance of shares under the warrant. The acquisition of the Division has been accounted for using the purchase method and, accordingly, the acquired assets and assumed liabilities, including goodwill, have been recorded at their estimated fair values as of May 30, 1995. The Company's consolidated statements of income include the results of the division since May 30, 1995. The Company's consolidated statements of income for the three and six months ended June 30, 1995, include expenses of $3,854,000 or $2,312,000 after-tax, for integration costs related to the acquisition of the Division. The costs were recorded in selling, general and administrative expenses and were primarily for severance and relocation costs for certain of the Company's personnel and the closing of certain of the Company's offices as a result of combining the operations of the Division and the Company. RESULTS OF OPERATIONS REVENUE. The following table sets forth the Company's revenue by client type for the three and six months ended June 30, 1996 and 1995 (in thousands, except percentages):
Three Months Ended June 30, Six Months Ended June 30, ------------------------------- -------------------------------- 1996 1995 1996 1995 ------------- --------------- --------------- --------------- Federal, State, and Local Government $ 96,802 75% $ 75,907 76% $187,374 76% $137,715 77% Industrial 32,375 25% 23,594 24% 60,766 24% 42,003 23% -------- --- -------- --- -------- --- --------- --- Total Revenue $129,177 100% $ 99,501 100% $248,140 100% $179,718 100% ======== === ======== === ======== === ======== ===
Revenue increased during the three and six months ended June 30, 1996 by $29,676,000 or 30% and $68,422,000 or 38%, respectively, when compared to the same periods in 1995. Such improvement resulted primarily from increased revenue from federal government agencies and the acquisition of the Division, of which only one month's results were included in the Company's consolidated statements of income during the three and six month periods in 1995. Revenue from government agencies for the three and six months ended June 30, 1996 increased $20,895,000 or 28% and $49,659,000 or 36%, respectively, when compared to the same periods in 1995. This improvement resulted primarily from an increase in revenue from the Company's term contracts with the United States Navy, the United States Army Corps of Engineers ("USACE") and the United States Air Force. Such increases were partially offset by a decrease in revenue from state and local governments and the Environmental Protection Agency ("EPA") during the 1996 when compared to the same periods in 1995. The federal government shutdown during the first quarter of 1996 negatively impacted the Company's revenue from the EPA and delayed delivery orders issued under the Company's existing federal term contracts. The Company expects to receive funding under its federal contracts into the foreseeable future and is experiencing a significant amount of proposal activity for new contracts with the various Department of Defense agencies, as well as the Department of Energy. However, reductions by Congress in future environmental remediation budgets of government agencies may have a material adverse impact upon future revenue from such agencies and the funding of the Company's government term contracts included in contract backlog. 8 11 The Company experienced a $8,781,000 or 37% increase in revenue from industrial clients for the three months ended June 30, 1996 when compared to the same period in 1995. For the six months ended June 30, 1996, revenue from industrial clients increased $18,763,000 or 45% when compared to the same period in 1995. Such increases are primarily a result of the acquisition of the Division during May 1995. The Company believes that revenue from the industrial sector has been negatively impacted due to anticipated changes in the Superfund law pending its reauthorization as well as current economic conditions in certain industry and geographic sectors. Although the Company cannot predict the impact upon the environmental industry of the failure of Congress to reauthorize the Superfund law, further delays in Superfund reauthorization may have a material impact upon the demand for the Company's services in the form of project delays as clients and potential clients wait for and anticipate changes in these regulations. In addition, demand for the Company's services from the industrial sector will also remain dependant on general economic and market conditions. COST OF SERVICES AND GROSS PROFIT. Cost of services and gross profit for the three and six months ended June 30, 1996 increased when compared to the same periods in 1995 primarily as a result of increased revenue. Gross profit as a percent of revenue for the three and six months ended June 30, 1996 decreased to 14% and 13%, respectively, from 16% in each of the same periods in 1995. The Company's gross profit on its fixed-price contracts has been negatively impacted by competitive market conditions and, during the first quarter of 1996, by the severe winter weather in the midwest and northeast regions of the country. In addition, the Company has experienced a decrease in the overall gross margin it has received on its government projects than it has historically experienced. Such decrease is due to the nature of the projects that have been awarded to the Company under its term contracts which has required an increase in the use of subcontracted services and materials over levels historically experienced. Under the terms of such contracts, the Company receives minimal markups on such subcontracted services and materials. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and administrative ("SGA") expenses for the three and six months ended June 30, 1995 included a charge for integration expenses of $3,854,000 related to the acquisition of the Division. Without such charge, SGA expenses would have increased 26% and 35% during the three and six months ended June 30, 1996, respectively, when compared to the same periods in 1995. Such increase in SGA expenses was primarily as a result of the acquisition of the Division and increased revenue. In addition, the Company has made a substantial investment in personnel and systems in support of its government contracts and related compliance issues. SGA expense as a percent of revenue, excluding the aforementioned charge, was 9% and 10% for the three months ended June 30, 1996 and 1995, respectively. For the six months ended June 30, 1996 and 1995, SGA expense as a percent of revenue was 9% and 10%, respectively, exclusive of the intergration expense charge. INTEREST EXPENSE. Interest expense decreased 30% and 36% during the three and six months ended June 30, 1996 when compared to the same periods in 1995. The decrease in interest expense was a result of a decrease in the average borrowings outstanding, as well as interest rates charged, under the Company's revolving credit agreement during 1996 when compared to the same periods in 1995. The decrease in interest rates charged under the revolving credit agreement is a result of the WMX guarantee of the Company's debt in exchange for the warrant described above. EQUITY IN NET EARNINGS OF AFFILIATE. The Company's equity interest in NSC's net earnings increased $26,000 and $168,000 for the three and six months ended June 30, 1996, respectively, when compared to the same periods in 1995. NET INCOME. Net income for the three months ended June 30, 1996 was $2,379,000 or $0.09 per share compared to $234,000 or $0.01 per share for the same period in 1995. For the six months ended June 30, 1996, net income was $3,709,000 or $0.14 per share compared to $1,521,000 or $0.08 per share for the same period in 1995. Net income increased primarily as a result of the charge for integration expenses recorded in the second quarter of 1995, as well as other factors described above. The effective income tax rate was 33% and (1)% for the three months ended June 30, 1996 and 1995, respectively. For each six month period ending June 30, 1996 and 1995, the effective income tax rate was 33%. See "Note 4 to the Consolidated Financial Statements" for a reconciliation of the statutory federal income tax rate to the effective income tax rate. LIQUIDITY AND CAPITAL RESOURCES On May 31, 1995, the Company entered into a $150,000,000 revolving credit agreement with a group of banks (the "Bank Group") to provide letters of credit and cash borrowings. The agreement has a five year term and is scheduled to expire on May 30, 2000. WMX has issued a guarantee of up to $62,000,000 outstanding under the credit agreement in favor of the Bank Group. Under the terms of the agreement the entire credit facility can be used for either cash borrowings or letters of credit. Cash borrowings bear interest at either the prime rate plus a percentage up to 0.625% or, at the Company's option, the Eurodollar market rate plus a percentage ranging from 0.325% to 1.625%. The percentage 9 12 over the prime rate or the Eurodollar market rate is based on the aggregate amount borrowed under the facility, the presence of the guarantee, and the Company's financial performance as measured by an interest coverage ratio and a total funded debt ratio. The agreement provides the participating banks with a security interest in the Company's equipment, inventories, accounts receivable, general intangibles and in the Company's investment in the common stock of NSC as well as the Company's other subsidiaries. The agreement also imposes, among other covenants, a minimum tangible net worth covenant, a restriction on all of the Company's retained earnings including the declaration and payment of cash dividends and a restriction on the ratio of total funded debt to earnings before income taxes, depreciation and amortization. The amounts outstanding for cash borrowing under the revolving credit facility at June 30, 1996 and December 31, 1995 were $27,200,000 and $42,100,000, respectively, and aggregate letters of credit outstanding at June 30, 1996 and December 31, 1995 were $14,823,000 and $14,655,000, respectively. Capital expenditures for the six months ended June 30, 1996 and 1995, were $11,221,000 and $7,148,000, respectively. The Company's capital expenditures are primarily related to the installation of computer systems and related equipment, the purchase of heavy equipment and the fabrication of custom equipment by the Company for the execution of remediation projects. Capital expenditures for fiscal year 1996 are expected to range between $15,000,000 and $18,000,000. The Company's long-term capital expenditure requirements are dependent upon the type and size of future remediation projects awarded to the Company. The Company believes that the government sector will continue to be its primary source of revenue for the foreseeable future in light of its contract backlog with federal government agencies. Revenue from government agencies historically has required greater working capital, the major component of which is accounts receivable, than revenue from industrial sector clients. In addition, the Company is bidding on a number of large, long-term contract opportunities which, if awarded to the Company, would also increase working capital needs and capital expenditures. The Company believes it will be able to finance its increased working capital needs and capital expenditures in the short term through a combination of cash flows from operations, borrowing under its revolving credit facility, proceeds from permitted asset sales and other external sources. In addition, in connection with the acquisition of the Division, Rust's parent company, WMX, has provided the Company with a credit guarantee of up to $62,000,000 of the Company's indebtedness outstanding until May 30, 2000. Such credit guarantee has allowed the Company to expand its borrowing capacity and lower its cost of capital under its new credit facility entered into on May 31, 1995. The Company's identified long-term capital needs consist of payments due upon the maturity of the Company's revolving credit facility in 2000 and sinking fund payments commencing in 1996 of 7.5% of the principal amount as well as payments due upon maturity of its 8% Subordinated Convertible Debentures in 2006. The Company purchased and retired $5,000,000 of the outstanding 8% Subordinated Convertible Debentures during October 1995, sufficient to meet its first annual sinking fund obligation due October 1, 1996. The Company believes that it will be able to refinance the remaining indebtedness as necessary. ENVIRONMENTAL MATTERS AND GOVERNMENT CONTRACTING Although the Company believes that it generally benefits from increased environmental regulations and from enforcement of those regulations, increased regulation and enforcement also create significant risks for the Company. The assessment, remediation, analysis, handling and management of hazardous substances necessarily involve significant risks, including the possibility of damages or injuries caused by the escape of hazardous materials into the environment, and the possibility of fines, penalties or other regulatory action. These risks include potentially large civil and criminal liabilities for violations of environmental laws and regulations, and liabilities to customers and to third parties for damages arising from performing services for clients, which could have a material adverse effect on the Company. The Company does not believe there are currently any material environmental liabilities which should be recorded or disclosed in its financial statements. The Company anticipates that its compliance with various laws and regulations relating to the protection of the environment will not have a material effect on its capital expenditures, future earnings or competitive position. Because of its dependence on government contracts, the Company also faces the risks associated with such contracting, which could include civil and criminal fines and penalties. As a result of its government contracting business, the Company has been, is, and may in the future be subject to audits and investigations by government agencies. The fines and penalties which could result from noncompliance with the Company's government contracts or appropriate standards and regulations, or the Company's suspension or debarment from future government contracting, could have a material adverse effect on the Company's business. 10 13 PART II -- OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders a) The Annual Meeting of the Company's shareholders was held on May 9, 1996. At the Annual Meeting, the following persons were elected as directors of the Company, to serve until the next Annual Meeting of Shareholders, with the votes for and withheld with respect to each person, respectively, set forth after such name:
For Withheld Victor J. Barnhart 25,751,170 414,996 Herbert A. Getz 25,760,949 405,217 Ivan W. Gorr 25,779,188 386,978 Charles D. Hollister 25,776,698 389,468 James L. Kirk 25,774,445 391,721 Joseph R. Kirk 25,773,792 392,374 James E. Koenig 25,768,236 397,930 Richard W. Pogue 25,774,350 391,816 Charles W. Schmidt 25,776,492 389,674
(b) A proposal to increase the number of shares available under the Company's 1986 Stock Option Plan was approved by 89.8% of the Company's Common Stock present and voting at the meeting. The results of the vote on the proposal were: For 23,498,305 Against 2,574,867 Abstain 92,994
The total number of shares of the Registrant's Common Stock outstanding as of March 19, 1996, the record date for the Annual Meeting, was 26,718,097. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 10.33* OHM Corporation Retirement and Incentive Compensation Plan 10.34* OHM Corporation Incentive Stock Plan 11 Statement Re Computation of Per Share Earnings 15 Letter Re Unaudited Financial Information 27 Financial Data Schedule (b) No reports on Form 8-K were filed during the quarter ended June 30, 1996. - -------------------------------------------------------------------------------- *Indicates a management contract or compensatory plan or arrangement required to filed pursuant to Item 6 of Form 10Q. 11 14 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. OHM CORPORATION Date: August 14, 1996 By /s/ James L. Kirk ---------------------------------------- James L. Kirk Chairman of the Board President and Chief Executive Officer (Duly Authorized Officer) Date: August 14, 1996 By /s/ Kris E. Hansel ---------------------------------------- Kris E. Hansel Vice President and Controller (Principal Accounting Officer) 12 15 EXHIBIT INDEX
Exhibit Exhibit Number Description - ------ ----------- 10.33 Retirement and Incentive Compensation Plan 10.34 Incentive Stock Plan 11 Statement Re Computation of Per Share Earnings 15 Letter Re Unaudited Financial Information 27 Financial Data Schedule
EX-10.33 2 EXHIBIT 10.33 1 OHM CORPORATION RETIREMENT AND INCENTIVE COMPENSATION PLAN 2 OHM CORPORATION RETIREMENT AND INCENTIVE COMPENSATION PLAN (Amended and Restated as of August 15, 1996) PURPOSE AND EFFECTIVE DATE The OHM Corporation (the "Company") Retirement and Incentive Compensation Plan (the "Plan"), is intended to be a nonqualified deferred compensation plan exempt from the provisions of the Employee Retirement Income Security Act of 1974, as amended. This Plan is an amendment and restatement of the Company's Executive Retirement Plan adopted effective as of January 1, 1996. The purpose of the Plan is to provide a mechanism to allow officers and other key employees of the Company to defer compensation and thereby accumulate funds for retirement, and to retain such individuals, make their compensation competitive with other opportunities, and cause them to strive to increase the Company's cumulative returns to its shareholders. ARTICLE I PARTICIPATION 1.1 ELIGIBILITY Participation in the Plan is limited to the Company's officers designated as Participants by the Company's Compensation and Stock Option Committee of the Board of Directors (the "Compensation Committee) and other key employees who are not officers of the Company as may be designated from time to time by the Compensation Committee under the Plan. In designating an officer or other key employee as a Participant in the Plan, the Compensation Committee may limit an individual's participation in the Plan to either the Retirement Deferral Account or the OHM Common Stock Deferral Account (as such terms are defined Section 2.3 hereof). 1.2 CONDITIONS OF PARTICIPATION An eligible employee may participate in the Plan after the employee has completed and returned to the Administrative Committee a "Deferral Election Form" (as described in Section 2.1), and any other information or documents that the Administrative Committee deems necessary to administer the Plan. ARTICLE II DEFERRAL OF COMPENSATION 2.1 DEFERRAL AMOUNTS; DEFERRAL LIMITATIONS As a condition of participation, each Participant must complete and return to the Administrative Committee a Deferral Election Form in which the Participant specifies the portion of the Participant's Compensation (as defined below) that is to be deferred under the Plan during the following calendar year (the "Plan Year"). A Participant may defer in any Plan Year up to 50% of the Participant's Compensation, provided that a Participant shall not defer more than 30% of the Participant's Compensation in any Plan Year to the Participant's "Retirement Deferral Account" (as described in Section 2.3). The Deferral Election Form shall be delivered to the Administrative Committee prior to the beginning of each Plan Year. If an officer or key employee first becomes eligible to participate during the 3 2 Plan Year, the Participant may file a Deferral Election Form within thirty (30) days of becoming eligible to participate in the Plan. Amounts deferred under the Plan will be credited to the Participant's designated Deferral Account (as described in Section 2.3) no later than the first day of the calendar month following the calendar month during which the amount deferred otherwise would have been paid to the Participant. The term "Compensation" means base salary and annual or other cash compensation earned by a Participant within a Plan Year, excluding contributions to or amounts paid to the Participant pursuant to this Plan or any other employee benefit plan or stock option or restricted stock plan, except deferred Compensation or any other contributions made by the Company on behalf of the Participant pursuant to the Plan. 2.2 MATCHING CONTRIBUTIONS; VESTING The Participant's designated Deferral Account shall be credited with Company "Matching Contributions" each month in an amount equal to (i) fifty percent (50%) of the amount of the Participant's Compensation which is deferred by the Participant and credited to the Participant's Retirement Deferral Account; and (ii) one hundred percent (100%) of the amount of the Participant's Compensation which is deferred by the Participant and credited to the Participant's "OHM Common Stock Deferral Account". The Compensation Committee may reduce or eliminate the amount of Company Matching Contributions under the Plan for any Plan Year, provided that any such reduction is made prior to the beginning of such Plan Year. Participants shall be vested in Matching Contributions (i) one year after the amounts are credited to the Participant's Retirement Deferral Account; or (ii) two years after the amounts are credited to the Participant's OHM Common Stock Deferral Account; provided that a Participant shall be fully vested in Matching Contributions and any Interest (as defined in Section 2.4) or Dividends (as defined in Section 2.4) thereon upon attaining Early or Normal Retirement (as defined in Section 3.2), upon the Participant's death or Disability (as defined in Section 3.2) or in the event of a Change in Control (as defined in Section 5.6). If the Participant terminates employment prior to the vesting of any Matching Contributions, such non-vested amounts and any Interest or Dividends with respect to the Matching Contributions shall be forfeited. 2.3 DEFERRAL ACCOUNTS The Company will establish a "Retirement Deferral Account" and an "OHM Common Stock Deferral Account" for each Participant (sometimes individually referred to as a "Deferral Account" and collectively as "Deferral Accounts"). Each Participant's Deferral Accounts will be credited with: (a) Compensation that the Participant elects to defer under Section 2.1; (b) Company Matching Contributions credited under Section 2.2; (c) "Interest" calculated and credited under Section 2.4(a); and (d) "Dividends" calculated and credited under Section 2.4(b). 4 3 Each Participant's Deferral Accounts will be debited by: (a) Amounts distributed under Article III. The Participant shall designate, prior to the beginning of each Plan Year, the amounts and percentages to be contributed to the Participant's Retirement Deferral Account and OHM Common Stock Deferral Account. A Participant's Deferral Accounts may be segregated into one or more sub-accounts as may be deemed necessary by the Administrative Committee to administer the Plan. 2.4 DEEMED INVESTMENT (a) RETIREMENT DEFERRAL ACCOUNT. As of the first day of each calendar month, a Participant's Retirement Deferral Account shall be credited with "Interest" at the rate equal to the prime rate (as published by The Wall Street Journal-Midwest Edition on the first business day of the month), and such Interest shall be compounded monthly on the balance credited to the Participant's Retirement Deferral Account as of the first business day of that month. As of the first day of each Plan Year, the balance of each Participant's Retirement Deferral Account as of such date will be credited with additional "Interest" in the amount by which the percent of net increase in the Standard and Poor's 500 Index (calculated from the first business day of the Plan Year to the last business day of the Plan Year (or the business day preceding the date of distribution in the event of a distribution prior to the end of a Plan Year), as published by The Wall Street Journal-Midwest Edition as of such dates) exceeds the Interest credited during the Plan Year to the Participant's Retirement Deferral Account in accordance with the preceding sentence. (b) OHM COMMON STOCK DEFERRAL ACCOUNT. As of the first day of each calendar month, each Participant's OHM Common Stock Deferral Account shall be credited in Units (as defined below) on the basis of the average of the Market Value (as defined below) of the Company's Common Stock (as defined below) during the preceding calendar month. Each Participant's OHM Common Stock Deferral Account shall be credited after the end of each calendar quarter with additional Units equal in value to the amount of dividends or other distributions ("Dividends") paid by the Company during such calendar quarter on the Common Stock equivalent to the average daily balance of Units in such OHM Common Stock Deferral Account during such calendar quarter. The Units allocated from time to time to the Participant's OHM Common Stock Deferral Account shall reflect any subsequent appreciation or depreciation in the Company's Common Stock based upon the average of the Market Value of the Common Stock during the preceding month. The term "Market Value" means the closing price of the Common Stock on the New York Stock Exchange on the specified date (or, if Common Stock was not traded on such date, on the next preceding date on which it was traded) as reported in The Wall Street Journal -Midwest Edition. The term "Common Stock" means the Company's common stock, par value $.10 per share, or such other security as may at the applicable time be represented by the Units. The term "Units" means an accounting unit equal in value to one share of Common Stock. 2.5 TRANSFER OF DEFERRAL ACCOUNT. Upon a Participant becoming vested in the Company's Matching Contribution made with respect to the Participant's Retirement Deferral Account, during the Plan Year (but not more than once each calendar quarter), a Participant may transfer all or any portion of the balance of the Participant's Retirement 5 4 Deferral Account to the Participant's OHM Common Stock Deferral Account. Upon a Participant becoming vested in the Company's Matching Contribution made with respect to the Participant's OHM Common Stock Deferral Account, during the Plan Year (but not more than once each calendar quarter), a Participant may transfer all or any portion of the balance of the Participant's OHM Common Stock Deferral Account representing the amount of the Participant's deferred Compensation (but excluding the Company Matching Contribution and dividends and distributions thereon) to the Participant's Retirement Deferral Account. ARTICLE III DISTRIBUTIONS 3.1 FORMS OF DISTRIBUTION Subject to other provisions of this Article and Section 5.6, all distributions will be made in cash by the Company at the time and in the manner elected by the Participant, subject to such uniform procedures and rules as established by the Administrative Committee from time to time. All payments from a Participant's Deferral Accounts shall reduce allocation to the Participant's Retirement Deferral Account and OHM Common Stock Deferral Account equally, unless otherwise specified by the Participant in accordance with procedures established by the Administrative Committee. 3.2 METHODS OF DISTRIBUTION Plan benefits will be paid in a lump sum of the entire amount then credited to the Participant's Deferral Accounts, unless the Participant's termination is a result of retirement on or after the date the Participant attains the age of 65 ("Normal Retirement") or upon the Participant reaching age 55 with ten years or more of service ("Early Retirement") with the Company or its Subsidiaries (as defined below), or in the event the Participant dies or becomes "Disabled" (as defined below). Any amount distributed from a Participant's Deferral Accounts in a lump sum shall be credited with Interest or Dividends through the last day of the month preceding the month in which the distribution is made. In the case of Early or Normal Retirement, death or Disability, one or both of the Participant's Deferral Accounts will be paid in a lump sum, or in substantially equal annual payments over a period not greater than 15 years beginning on the one year anniversary of the Participant's retirement, as elected by the Participant. If benefits under the Retirement Deferral Account are to be paid annually, Interest will continue to be credited on the unpaid balance of the Participant's Retirement Deferral Account at the rate specified in Section 2.4, or at such lesser rate as may be specified by the Compensation Committee in its sole discretion at any time prior to the Participant's retirement. A distribution of Participant's OHM Common Stock Deferral Account shall be based upon the average Market Value of the Company's Common Stock during the month preceding the date of distribution and, if benefits are to be paid annually from the OHM Common Stock Deferral Account, Dividends will be credited on the unpaid balance of Participant's OHM Common Stock Deferral Account. A Participant shall be deemed to be "Disabled" or subject to a "Disability" if he or she is unable to perform the normal duties of his or her employment by reason of a medically determinable physical or mental impairment which in the opinion of a physician acceptable to the Administrative Committee can be expected to result in death or to be of a long-continual or indefinite duration. 6 5 The term "Subsidiary" means any corporation in which at the time the Company owns or controls, directly or indirectly, not less than 50% of the total combined voting power represented by all classes of shares owned by such corporation. 3.3 TIME OF DISTRIBUTION Plan benefits will be paid one year after the Participant's termination of employment with the Company or any Subsidiary thereof, unless the Participant is terminating employment as a result of Early, Normal Retirement, death or Disability, or as otherwise approved by the Compensation Committee in its sole discretion. The Participant's election of the form of payment shall be made by written notice filed with the Committee at least one year prior to the Participant's termination of employment with, or retirement from, the Company and any Subsidiary thereof. Any such election may be changed by the Participant at any time and from time to time without the consent of any other person by filing a later signed written election with the Administrative Committee; provided that any election made less than one year prior to the Participant's termination of employment or retirement shall not be valid, and in such case payment shall be made in accordance with the Participant's prior election. Notwithstanding any other provision of this Article III, in the event of a Participant's Early or Normal Retirement, death or Disability, a Participant may elect to receive a distribution of part or all of his or her Deferral Accounts in one or more distributions if the amount in such Deferral Accounts subject to such distribution is reduced by ten percent. Any distribution made pursuant to such an election shall be made within sixty days from the date such election is submitted to the Administrative Committee. The portion of the electing Participant's Deferral Accounts subject to such reduction shall be forfeited. 3.4 DISTRIBUTIONS TO BENEFICIARIES If a Participant's Deferral Accounts have not been fully distributed at the time of the Participant's death, the unpaid balance will be paid to the Participant's Beneficiary (as defined below) at the time the amount would have been paid to the Participant. However, the Compensation Committee, in its sole discretion, may direct such benefits be paid at an earlier date. The term "Beneficiary" means the person(s) named by the Participant to receive any Plan benefits that are unpaid at the Participant's death. Unless changed, the Participant's Beneficiary will be the person named on the first Deferral Election Form that the Participant files. However, a Participant may change the Beneficiary designation at any time by completing and delivering to the Administrative Committee a subsequent Beneficiary designation form. If the Participant dies without naming a Beneficiary or if there is no Beneficiary that survives the Participant, any unpaid Plan benefits will be paid to the Participant's surviving spouse or, if there is no surviving spouse, to the Participant's surviving children in equal shares or, if there are no surviving children, to the Participant's estate. 3.5 WITHHOLDING; PAYROLL TAXES Each benefit payment will be reduced by any amount required under applicable law to be withheld in advance payment of the recipient's income or other taxes. If the Company is required to withhold any 7 6 current taxes on Compensation when it is deferred under the Plan, the deduction will be taken against compensation paid by the Company to the Participant that is not deferred under this Plan. The determination by the Company of the amount to be withheld is binding on the Participant and the Beneficiary. 3.6 NONCOMPETITION Notwithstanding any other provision of this Plan, if, within one year after terminating employment with the Company, a Participant is engaged in any Competitive Activity (as defined below) without the prior consent of the Company, all Matching Contributions, Interest and Dividends credited thereon will be forfeited. For purposes of the Plan, the term "Competitive Activity" means the Participant's employment or the Participant's engagement, directly or indirectly, whether as an officer, employee, agent, consultant, partner, financier, or otherwise, in any business activity in competition with any business activity of the Company or its affiliates or subsidiaries in any geographic area in which the Participant provided or attempted to provide any products or services for the Company. "Competitive Activity" shall not include the mere ownership of not more than 2% of the securities in any such publicly-traded enterprise. If requested by the Participant, the Compensation Committee shall inform the Participant in advance whether any prospective employment or engagement shall constitute "Competitive Activity." 3.7 MISCONDUCT Notwithstanding any other provision of this Plan, the Compensation Committee may direct that a Participant forfeit the balance of all Matching Contributions, Interest and Dividends and direct that a Participant's Deferral Accounts not be credited with Matching Contributions, Interest or Dividends after the Compensation Committee concludes that any Participant has engaged in or is engaging in (i) any intentional or willful conduct that is detrimental to the Company's best interests, (ii) any conduct involving dishonesty or moral turpitude that is detrimental to or causes any financial loss to the Company, (iii) the malicious destruction of any Company property, (iv) is convicted of a felony committed during and arising out of the Participant's employment with the Company. ARTICLE IV ADMINISTRATION 4.1 APPOINTMENT OF ADMINISTRATIVE COMMITTEE The Administrative Committee to administer the Plan shall consist of the Company's Chief Operating Officer, Chief Administrative Officer and General Counsel. The members of the Administrative Committee shall serve at the Compensation Committee's pleasure and may be removed or may resign at any time. Successor members of the Administrative Committee shall be appointed by the Compensation Committee and shall have all of the rights, powers, privileges and immunities given to the original members. Except as required by law, the members of the Administrative Committee will not be required to give any bond or other security for the faithful performance of their duties. 4.2 COMMITTEE PROCEDURES 8 7 The Compensation Committee will be principally responsible for establishing Plan policy and resolving inconsistencies in the Plan or its administration and establishing rules and procedures not included in this document. The Compensation Committee may delegate to the Administrative Committee the power to establish any rules and procedures consistent with the provisions of the Plan. In addition, the Committee may, from time to time, employ other agents and delegate to them such administrative duties as it sees fit, and may from time to time consult with counsel who may be counsel to the Company. The Administrative Committee shall be entitled to rely conclusively upon all tables, valuations, certificates, opinions, and reports furnished by any actuary, accountant, controller, counsel or other person employed or engaged by the Compensation Committee or Administrative Committee. The Administrative Committee will be principally responsible for implementing the Compensation Committee's decisions. All determinations made under this Plan by the Compensation Committee and the Administrative Committee may be made in their sole and absolute discretion. Any disputed matter arising under this Plan will be resolved by the Compensation Committee. All Compensation Committee decisions will be final and binding on all persons. The Compensation Committee may act at a meeting or by written resolution signed by a majority of Compensation Committee members. 4.3 CLAIMS PROCEDURE (a) If a Participant or other person believes that he is entitled to benefits under the Plan, the Participant may file a claim for benefits in writing with the Administrative Committee. If a claim for benefits is wholly or partially denied, the Administrative Committee shall give the claimant written notice of the denial within a reasonable period of time after receipt of the claim by the Administrative Committee. Such notice shall set forth: (i) the specific reason or reasons for the denial, (ii) specific reference to pertinent provisions of the Plan on which the denial is based, (iii) a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary, and (iv) an explanation of the claim review procedure. (b) A claimant whose claim is denied, or his duly authorized representative, may request a review upon written application to the Compensation Committee within 60 days after receiving notice of the denial. In connection with such request, the claimant or his authorized representative may review pertinent documents and may submit issues and comments in writing. If such a request is made, the Compensation Committee shall make a full and fair review of the denial of the claim and shall make a decision not later than 60 days after receipt of the application, unless special circumstances (such as the need to hold a hearing) require an extension of time for processing, in which case a decision shall be rendered as soon as possible, but not later than 120 days after receipt of the request. The decision on review shall be in writing and shall include specific reasons for the decision and specific references to the pertinent provisions of the Plan on which the decision is based. 4.4 LEGAL COMPETENCY 9 8 Any Plan benefits payable to any person who is legally incompetent to receive them will be paid to the guardian of the incompetent person or to the person having custody of the disabled person without any further liability by the Company, the Compensation Committee or the Administrative Committee. 10 9 4.5 EXEMPTION FROM LIABILITY/INDEMNIFICATION In addition to any other rights to which they may be entitled under the Plan, the Company will indemnify each member of the Compensation Committee, the Administrative Committee, and any other Company officer, employee or director against any loss, damage, expense or liability, by insurance or otherwise, reasonably incurred by the individual in connection with any action or failure to act by reason of serving on the Compensation Committee, acting as a member of the Administrative Committee or acting pursuant to their direction, to the fullest extent permitted by law. 4.6 NONALIENATION OF BENEFITS Except as otherwise provided by law, no benefit, payment or distribution under this Plan is subject either to the claim of any creditor of a Participant or Beneficiary, or to attachment, garnishment, levy, execution or other legal or equitable process, by any creditor of the Participant or Beneficiary and no Participant or Beneficiary may alienate, commute, anticipate or assign (either at law or in equity) all or any portion of any benefit, payment or distribution under this Plan. The Plan will not in any manner be liable for or subject to the debts, contracts, liabilities, engagements or torts of any person entitled to receive benefit under this Plan. If any Plan benefits or assets are garnished or attached by order of any court, the Administrative Committee may elect to bring an action for a declaratory judgment in a court of competent jurisdiction to determine the proper person to receive Plan benefits. Any benefits that become payable during the pendency of that action will be paid into the court as they become payable to be distributed by the court as it deems proper. ARTICLE V MISCELLANEOUS PROVISIONS 5.1 APPLICATION OF RULE 16B-3 Transactions under the Plan are intended to be governed by Rule 16b-3 as promulgated on May 31, 1996 under the Securities Exchange Act of 1934. 5.2 EMPLOYMENT AND OTHER RIGHTS Nothing in this Plan requires that the Company to employ any Participant or requires any Participant to remain employed with the Company. Nor does the Plan create any rights or obligations other than those specifically set forth in the Plan. The benefits payable under this Plan are independent of, and in addition to, any other employment agreement that may exist from time to time concerning any other compensation or benefits payable by the Company. 11 10 5.3 RIGHT TO BENEFITS The sole interest of each Participant and each Beneficiary is limited to receiving the amounts credited to the Participant's Deferral Accounts when these amounts become due and payable under the terms of the Plan and the Participant's election. Neither the Participant nor a Beneficiary has any right, title or interest (legal or equitable) in or to any property or assets of the Company. Although a Participant's Deferral Accounts may be deemed invested in Common Stock, the Company will not issue any shares or make any investment on behalf of a Participant. All Plan benefits will be paid directly by the Company from its general assets and reflected on the Company's books as a general unsecured and unfunded obligation, provided that the Company may elect from time to time in its sole discretion to fund all or any portion of the Participants' Deferral Accounts by establishing and funding a trust and appointing a trustee to administer the assets in the trust. 5.4 OFFSET TO BENEFITS Regardless of any Plan provision to the contrary, the Company may, if the Compensation Committee in its sole and absolute discretion agrees, offset any amounts to be paid to a Participant or a Beneficiary under the Plan against any amounts that the Participant owes to the Company. 5.5 AMENDMENT AND TERMINATION Although the Company intends to continue this Plan indefinitely, the Board may amend, suspend or terminate the Plan at any time (including the amount and manner in which Matching Contributions and the rate or calculation of Interest are credited to any Participant's Deferral Accounts). However, no Plan amendment, suspension or termination may adversely affect amounts deferred by the Participant to the Plan (other than the amount of Matching Contributions and the rate or calculation of Interest to be credited after the effective date of such action). If it is determined at any time for any reason by any agency of the United States government or by any court of competent jurisdiction that the Plan does not qualify for the exclusions under Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, the Plan will be deemed to have terminated as of the date of the determination unless otherwise provided by the Compensation Committee. 5.6 CHANGE IN CONTROL OF THE COMPANY In the event of a Change in Control of the Company (as defined below), (i) all Matching Contributions, Interest and Dividends thereon shall immediately and fully vest, (ii) the Compensation Committee shall cause the Deferral Accounts payable to Participants to be calculated and paid to Participants as promptly as practicable following the Compensation Committee's determinations, notwithstanding any Plan provisions to the contrary. Payment of the Participant's benefit shall be made by the Company in the event of a Change in Control, or if the Company is not the survivor of such Change in Control, the person acquiring the Company. The amount payable by the Company or the acquiror shall be reduced by any taxes required to be withheld. With respect to the Participant's OHM Common Stock Deferral Account, each Unit representing one share of Company common stock shall be valued at the "fair market value per share". The "fair 12 11 market value per share" shall be determined by the Compensation Committee, as it existed immediately prior to such Change in Control. The "fair market value per share" shall mean, (i) except in the case of a merger, consolidation or reorganization with an acquiror in which the Company is not the survivor (a "Termination Merger"), the average of the highest sales price per share of the Company's common stock on the New York Stock Exchange Composite Tape (as report in The Wall Street Journal - Midwest Edition) (or if the Company's common stock is not then traded on the New York Stock Exchange, as reported on the principal market where such common stock is actively traded) on each of the five trading days immediately preceding the date of the Change of Control, and (ii) in the case of a Termination Merger, the higher of (A) the fair market value of the consideration receivable per share by holders of Common Stock of the Company in such Termination Merger, which fair market value as to any securities included in such consideration shall be the average of the highest sales price per unit of such security on the New York Stock Exchange Composite Tape (as reported in The Wall Street Journal - Midwest Edition) (or if such security is not traded on the New York Stock Exchange, reported on the principal market where such security is actively traded) on each of the five trading days immediately preceding the date of the Termination Merger and as to any such security not actively traded in any market and as to all other property included in such consideration, shall be the amount determined by the Committee in its discretion or (B) the amount determined pursuant to clause (i) of this Section. The term "Change in Control" has the same meaning as ascribed to such term under the Company's Incentive Stock Plan (or any successor plan). 5.7 INTERPRETATION The Compensation Committee will interpret the Plan, and the Administrative Committee will administer the Plan, according to the laws of the State of Ohio and, when applicable, the laws of the United States in a manner that ensures that this Plan will be treated as a nonqualified, unfunded plan of deferred compensation within the meaning of the Employee Retirement Income Security Act of 1974, as amended. The Compensation Committee and the Administrative Committee may adopt any additional rules or interpretative guidelines not specifically mentioned in this Plan if they are needed to administer the Plan and are not inconsistent with its purpose. 5.8 SEVERABILITY Any determination by a court of competent jurisdiction that any part of this Plan is illegal or ineffective will not affect any other provision of the Plan not specifically included in the court's decision. 13 12 5.9 HEADINGS Section headings are for convenience only and do not create any additional rights, privileges or duties. 5.10 GENDER AND NUMBER Except when the context indicates to the contrary, when used herein, masculine terms shall be deemed to include feminine, and singular the plural. The foregoing is the true and complete text of the OHM Corporation Retirement and Incentive Compensation Plan as adopted by the Compensation and Stock Option Committee of the Board of Directors of OHM Corporation as of August 15, 1996. /s/ John J. Ray III ------------------------------- John J. Ray III Vice President, General Counsel and Secretary EX-10.34 3 EXHIBIT 10.34 1 OHM CORPORATION INCENTIVE STOCK PLAN 1. Purpose. The purpose of the OHM Corporation Incentive Stock Plan (the "Plan") is to attract, compensate and retain officers of OHM Corporation (the "Company") and to align the financial interests of the Company's officers with the shareholders of the Company. 2. Definitions. As used in this Plan, (a) The term "Board" means the Board of Directors of the Company. (b) The term "Change in Control" means that any of the following events shall occur: (i) The Company is merged, or consolidated or reorganized into or with another corporation or other legal person, and as a result of such merger, consolidation or reorganization less than a majority of the combined voting power of the then-outstanding securities of such corporation or person immediately after such transaction are held in the aggregate by the holders of Voting Stock (as that term is hereinafter defined) of the Company immediately prior to such transaction; or (ii) The Company sells all or substantially all of its assets to any other corporation or other legal person, and less than a majority of the combined voting power of the then-outstanding securities of such corporation or person immediately after such transaction are held in the aggregate by the holders of Voting Stock of the Company immediately prior to such sale; or (iii) There is a report filed on Schedule 13D or Schedule 14D-1 (or any successor schedule, form or report), each as promulgated pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"), disclosing that any person (as the term "person" is used in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) has become the beneficial owner (as the term "beneficial owner" is defined under Rule 13d-3 or any successor rule or regulation promulgated under the Exchange Act) of securities representing 25% or more of the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors of the Company ("Voting Stock"); or (iv) The Company files a report or proxy statement with the Securities and Exchange Commission pursuant to the Exchange Act disclosing in response to Form 8-K or Schedule 14A (or any successor schedule, form or report or item therein) that a change in control of the Company has or may have occurred or will or may occur in the future pursuant to any then-existing contract or transaction; or (v) If during any period of two consecutive years, individuals who at the beginning of any such period constitute the Directors of the Company cease for any reason to constitute at least a majority thereof, unless the election, or the nomination for election by the Company's shareholders, of each Director of the Company first elected during such 2 period was approved by a vote of at least two-thirds of the Directors of the Company then still in office who were Directors of the Company at the beginning of any such period. (c) The term "Code" means the Internal Revenue Code of 1986, as amended from time to time. (d) The term "Committee" means the committee described in Section 7 of this Plan. (e) The term "Common Stock" means shares of the common stock, par value $.01 per share, of the Company. (f) The term "Date of Grant" means the date specified by the Committee on which a grant of Restricted Stock shall become effective, which shall not be earlier than the date on which the Committee takes action with respect thereto. (g) The term "Disability" means a Participant is unable to perform the normal duties of his or her employment by reason of a medically determinable physical or mental impairment which in the opinion of a physician acceptable to the Committee can be expected to result in death or to be of a long-continual or indefinite duration. (h) The term "Market Value" means the closing price of a share of Common Stock on the New York Stock Exchange on the specified date (or if Common Stock was not traded on such date, on the next preceding date on which it was traded) as reported in The Wall Street Journal Midwest Edition. (i) The term "Participant" means an officer of the Company who is selected by the Committee to receive benefits under the Plan. (j) The term "Subsidiary" means any corporation in which at the time the Company owns or controls, directly or indirectly, not less than 50% of the total combined voting power represented by all classes of stock issued by such corporation. (k) The term "Restricted Stock" means Common Stock granted or sold pursuant to this Plan as to which neither the Substantial Risk of Forfeiture nor the restrictions on transfer referred to in Section 4 hereof have expired. (l) The term "Rule 16b-3" means Rule 16b-3 under the Securities Exchange Act of 1934 or any successor rule to the same effect. (m) The term "Substantial Risk of Forfeiture" shall have the meaning referred to in Section 4(c) hereof. 3. Shares Available under the Plan. The number of shares of Common Stock issued or transferred and released from Substantial Risk of Forfeiture under the Plan shall not in the aggregate exceed 500,000 shares, which may be shares of original issuance or shares held in treasury or a combination thereof. 2 3 4. Restricted Stock. The Committee may authorize grants or sales to Participants of shares of Restricted Stock upon such terms and conditions as the Committee may determine in accordance with the following provisions: (a) Each grant or sale shall result in an immediate transfer of ownership of shares of Common Stock to the Participant, or the Committee may, in its discretion, defer the transfer of ownership of shares of Common Stock until such time as the Committee may specify, provided that in each case such grant or sale shall be made, issued or awarded in consideration of the performance of services and the execution of a non-competition agreement, and shall entitle such Participant to dividend, voting and other ownership rights, subject to the Substantial Risk of Forfeiture. (b) Each grant or sale may be made without any other consideration from the Participant or in consideration of a payment by the Participant that is less than the market value per share of Common Stock on the Date of Grant. (c) Each grant or sale shall provide that the shares of Restricted Stock covered thereby shall be subject to a "Substantial Risk of Forfeiture" within the meaning of Section 83 of the Code for a period to be determined by the Committee on the Date of Grant. (d) Each grant or sale shall provide that, during the period for which such Substantial Risk of Forfeiture is to continue, the transferability of the shares of Restricted Stock shall be prohibited or restricted in the manner and to the extent prescribed by the Committee on the Date of Grant. Such restrictions may include without limitation rights of repurchase or first refusal of the Company, non-competition provisions, or provisions subjecting the shares of Restricted Stock to a continuing Substantial Risk of Forfeiture in the hands of any transferee. (e) Any grant or sale may provide for the payment of dividends, dividend equivalents, or other distributions prior to the issuance of any shares of Restricted Stock and may require that any or all dividends, dividend equivalents, or other distributions paid on the shares of Restricted Stock be automatically sequestered and reinvested on an immediate or deferred basis in additional shares of Common Stock, which may be subject to the same restrictions as the underlying award or such other restrictions as the Committee may determine. 3 4 (f) Each grant or sale shall be evidenced by an agreement, which shall be executed on behalf of the Company by any officer thereof and delivered to and accepted by the Participant and shall contain such terms and provisions consistent with this Plan. Unless otherwise directed by the Committee, all certificates representing shares of Restricted Stock, together with a stock power that shall be endorsed in blank by the Participant with respect to the shares of Restricted Stock, shall be held in custody by the Company until all restrictions thereon lapse. (g) The Committee may provide at or after the Date of Grant of any Restricted Stock, for the payment of a cash bonus intended to offset the amount of tax that the Participant may incur in connection with such Restricted Stock, including tax on the receipt of such bonus. 5. Fractional Shares. The Company shall not be required to issue any fractional shares of Common Stock pursuant to this Plan. The Committee may provide for the elimination of fractions or for the settlement thereof in cash. 6. Withholding Taxes. To the extent that the Company is required to withhold federal, state, local or other taxes in connection with any payment made or benefit realized by a Participant or other person under this Plan, and the amounts available to the Company for the withholding are insufficient, it shall be a condition to the receipt of any such payment or the realization of any such benefit that the participant or such other person make arrangements satisfactory to the Company for payment of the balance of any taxes required to be withheld. The Participant's required tax withholding may be satisfied by a relinquishment of a portion of any such payment or benefit. The Company and any Participant or such other person may also make similar arrangements with respect to the payment of any taxes with respect to which withholding is not required. 7. Administration of the Plan. (a) This Plan shall be administered by the Compensation and Stock Option Committee (the "Committee") of the Board of Directors of the Company. A majority of the members of the Committee shall constitute a quorum, and the acts of the members of the Committee who are present at any meeting thereof at which a quorum is present, or acts unanimously approved in writing by the members of the Committee, shall be the acts of the Committee. (b) The interpretation and construction by the Committee of any provision of this Plan or any agreement, notification or document evidencing a grant of Restricted Stock, and any determination by the Committee pursuant to any provision of this Plan or any such agreement, notification or document, shall be final and conclusive. No member of the Committee shall be liable for any such action taken or determination made in good faith. 8. Amendments, etc. (a) The Committee may amend this Plan from time to time as it deems necessary in its sole discretion. 4 5 (b) This Plan shall not confer upon any Participant any right with respect to continuance of employment or other service with the Company and shall not interfere in any way with any right that the Company would otherwise have to terminate any Participant's employment or other service at any time. (c) In the case of termination of employment by reason of death, Disability or retirement from the Company upon the attainment of age 65 or upon completion of ten years of employment with the Company and the attainment of age 55, or in the event of a Change in Control, a Participant's Restricted Stock shall become fully vested and cease to be subject to a Substantial Risk of Forfeiture. 9. Successors. In the event that another corporation shall become the successor of the Company by reason of the merger, consolidation or acquisition of substantially all of the assets and business of the Company, it shall be a condition to the consummation of such merger, consolidation or acquisition that such successor corporation shall assume and agree to perform all terms, conditions, and obligations of the Company under the Plan. The foregoing is the true and complete text of the OHM Corporation Incentive Stock Plan as adopted by the Compensation and Stock Option Committee of the Board of Directors of OHM Corporation effective as of August 15, 1996. /s/ John J. Ray III --------------------------- John J. Ray III Vice President, General Counsel and Secretary 5 EX-11 4 EXHIBIT 11 1 EXHIBIT 11 Statement Re Computation of Per Share Earnings OHM CORPORATION COMPUTATION OF PER SHARE EARNINGS (In Thousands, Except Per Share Data)
Three Months Ended Six Months Ended June 30, June 30, ------------------------- ---------------------------- 1996 1995 1996 1995 ---- ---- ---- ---- PRIMARY: Average Shares Outstanding 26,772 20,100 26,729 17,903 Net effect of dilutive stock options and warrants-- based on the treasury stock method 58 493 28 232 ------- ------- ------- ------- Total 26,830 20,593 26,757 18,135 ======= ======= ======= ======= Net Income $ 2,379 $ 234 $ 3,709 $ 1,521 ======= ======= ======= ======= Per Share Amount $ 0.09 $ 0.01 $ 0.14 $ 0.08 ======= ======= ======= ======= FULLY DILUTED: (1) Average Shares Outstanding 26,772 20,100 27,729 17,903 Net effect of dilutive stock options and warrants-- based on the treasury stock method 58 623 28 553 ------- ------- ------- ------- Total 26,830 20,723 26,757 18,456 ======= ======= ======= ======= Net Income $ 2,379 $ 234 $ 3,709 $ 1,521 ======= ======= ======= ======= Per Share Amount $ 0.09 $ 0.01 $ 0.14 $ 0.08 ======= ======= ======= ======= (1) Fully dilutive effect of stock options and warrants on per share amounts for the three and six months ended June 30, 1996 and 1995, has not been presented in the statement of income since any reduction of less than 3% in the aggregate need not be considered as dilution.
EX-15 5 EXHIBIT 15 1 EXHIBIT 15 Letter Re Unaudited Financial Information Board of Directors and Shareholders OHM Corporation We are aware of the incorporation by reference into the Registration Statements (Form S-8 No. 33-24953, Form S-8 No. 33-28025, Form S-8 No. 33-55373 and Form S-8 33-63233) of OHM Corporation of our report dated July 26, 1996, relating to the unaudited consolidated interim financial statements of OHM Corporation which are included in its Form 10-Q for the quarter ended June 30, 1996. Pursuant to Rule 436(c) of the Securities Act of 1933, our report is not a part of the registration statement prepared or certified by accountants within the meaning of Section 7 or 11 of the Securities Act of 1933. Ernst & Young LLP Columbus, Ohio July 26, 1996 EX-27 6 EXHIBIT 27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE UNAUDITED CONSOLIDATED BALANCE SHEET AND THE UNAUDITED CONSOLIDATED STATEMENTS OF INCOME AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 6-MOS DEC-31-1996 JAN-01-1996 JUN-30-1996 4,413 0 183,742 23,613 12,304 200,460 126,778 47,757 346,683 93,247 87,142 2,680 0 0 162,730 346,683 0 248,140 0 215,550 23,198 0 3,878 5,514 1,805 3,709 0 0 0 3,709 .14 .14
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