SC - Safety-Kleen Corp. Delays Second Quarter Earnings Report Indefinitely

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Apr 4, 2000 - 10:13 PM

Title: Safety-Kleen Corp. Delays Second Quarter Earnings Report The Associated Press

COLUMBIA, S.C. (AP) - Safety-Kleen Corp. has delayed releasing its second-quarter earnings report indefinitely.

"In light of the company's ongoing investigation of accounting irregularities, we are simply not prepared to issue an earnings statement at this time," Jack McGregor, the company's interim chief financial officer, said Tuesday.

The troubled waste disposal and recycling company announced last month that accounting irregularities would require it to restate earnings for the past three years.

The company also announced Tuesday that David B. McNally was named interim chief information officer. He is a senior executive with Jay Alix & Associates of Southfield, Mich., which specializes in corporate turnarounds.

"McNally has more than 18 years experience in solving complex information technology problems," said David E. Thomas Jr., chairman of Safety-Kleen's executive board.

Safety-Kleen has said it would sell its former headquarters building in Elgin, Ill., and had arranged short-term financing to help it fund continuing operations.

The Columbia-based company operates a landfill at Pinewood near Lake Marion.

Safety-Kleen shares closed down 18 3/4 cents at $1 a share in trading Tuesday on the New York Stock Exchange.

AP-ES-04-04-00 2212EDT ) Copyright 2000 Associated Press.

http://ap.tbo.com/ap/breaking/MGI8GIABO6C.html

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-- (Dee360Degree@aol.com), April 04, 2000

Answers

[Fair use for education and research purpose only]

Safety-Kleen names information officer

Troubled firm also says it will delay indefinitely the release of second-quarter financial results

By SAM GRESOCK Staff Writer

Embattled waste management firm Safety-Kleen Corp. said Tuesday it had named an interim chief information officer to oversee its technology operations.

Safety-Kleen named David B. McNally to the position. McNally is a senior executive with Jay Alix & Associates, a Michigan-based turnaround consulting firm.

Jack McGregor, Safety-Kleen's interim chief financial officer, is a partner with Jay Alix.

McNally has held top information technology positions with Lear Corp. and United Technologies and has more than 18 years of experience in the industry, Safety-Kleen said.

In a statement issued Tuesday, McNally said he was confident Safety- Kleen "can develop an effective IT program to address our short-term needs and provide for the company's long-term stability."

Computer system difficulties led to lower-than-expected financial results in three consecutive quarters last year, Safety-Kleen said.

More severe problems emerged in March, when Safety-Kleen suspended chief executive Ken Winger, chief financial officer Paul Humphreys and chief operating officer Michael Bragagnolo as it began an internal investigation into accounting irregularities.

Safety-Kleen said preliminary results of the investigation revealed several misdeeds, including improper statement of revenues and inappropriate recording of costs. It also said that the Securities and Exchange Commission had begun an investigation and that the company was cooperating.

On March 16, Safety-Kleen secured a $20 million line of credit with a group of banks and announced plans to sell its former headquarters facility in Illinois so it could continue operating.

Also Tuesday, Safety-Kleen said it would delay indefinitely the release of second-quarter financial results, pending the outcome of the investigations.

Safety-Kleen was scheduled to release its results for the quarter ended Feb. 29 and hold a conference call with analysts today.

"With the ongoing investigation, we were not ready to put out an earnings report," spokesman John Kyte said.

Safety-Kleen was expected to earn 19 cents a share for the quarter, based on the average estimate of analysts surveyed by Zacks Investment Research as of Monday.

Safety-Kleen made both announcements after the market closed Tuesday.

Shares in Safety-Kleen's stock closed Tuesday at $1, down 19 cents from Monday's trading on the New York Stock Exchange. Earlier in the day, the stock hit its 52-week low of 94 cents.

http://www.thestate.com/business/docs/sk05.htm

-- (Dee360Degree@aol.com), April 05, 2000.


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