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Monday June 28, 8:31 am Eastern Time
Company Press Release
Waterlink Revises Third and Fourth Quarter
Expectations
CANTON, Ohio--(BUSINESS WIRE)--June 28, 1999--Waterlink Inc. (NYSE:WLK - news) announced today that
backlog levels have not increased sufficiently enough to support earnings expectations for the third and fourth quarter of its
fiscal year ending September 30, 1999.
Record inquiry and proposal levels have not yet translated to firm purchase orders and as a result the Company is expected to
break even, before charges, in the third quarter ending June 30, 1999. The fourth quarter is expected to return to a range of
earnings levels recorded in the first and second quarter of four and seven cents per share, respectively.
Scott King, President and Chief Executive Officer stated, ''We have worked hard to show significant earnings improvement in
the third and fourth quarter but it now appears that fiscal year 2000 will be the beneficiary of our organizational efforts and
sales and marketing initiatives that we implemented this fiscal year.''
In addition, the Company is expected to take additional charges of $3.5 million to $4.5 million in the third quarter ending June
30, 1999 in order to complete its previously announced 1999 Strategic Operating Plan. The Operating Plan called for a
reorganization from a holding company structure with 23 operating units into five integrated divisions that focus on market
segments with a goal to eliminate redundant facilities and functions and improve operating efficiencies. The additional third
quarter charges are necessary to complete the exit of the Great Lakes facility and the sale of the Bioclear facility, which are the
final steps required to accomplish the Operating Plan. The charges primarily relate to the write-down of certain assets to their
realizable value as well as additional subcontracting costs necessary to complete a certain contractual obligation entered into
before the announcement of the 1999 Plan at the Great Lakes facility. With these charges the Company is expected to record
a loss in the third quarter ended June 30, 1999 of $.25 to $.31 per share.
The Company further announced that it is in preliminary discussions with equity investors to raise additional capital and expects
to conclude this process during fiscal 1999. As a result of its lower than expected earnings for the third and fourth quarter,
Waterlink will need to raise additional capital outside of its credit facilities and/or renegotiate certain borrowing parameters with
its existing lenders.
This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform
Act of 1995, including cost savings, sales growth, backlog, the ability to raise additional capital and predictability of results.
These forward-looking statements are subject to certain risks, uncertainties and other factors that could cause actual results to
differ materially. Such factors include, but are not limited to, economic and competitive pressures in certain market segments,
improvement in order intake and revenue growth, changes in operating costs, access to capital, unanticipated liabilities and the
success of the company's 1999 strategic operating plan. Additional information on factors that could potentially affect the
company or its financial results may be found in the company's filings with the Securities and Exchange Commission, including
the risk factor section (beginning on page 21) of the company's annual report on Form 10-K for its fiscal year ended
September 30, 1998.
Waterlink is an international provider of integrated water purification and wastewater treatment solutions, treating process
water and wastewater for its industrial customers and drinking water and wastewater for its municipal customers. Waterlink's
operating divisions offer its solutions, equipment and services throughout a network of approximately 250 independent sales
organizations. Waterlink's executive offices are located in Canton, Ohio, USA.
More information about Waterlink can be obtained on the internet at www.waterlink.com, by e-mail inquiry to
waterlink@waterlink.com, or by contacting Mike Vantusko, Waterlink, Inc., 4100 Holiday Street NW, Canton, Ohio 44718
USA at 330/649-4000.
Contact:
Waterlink Inc.
Mike Vantusko, 330/649-4000
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Waterlink Inc (NYSE:WLK - news)
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