Envirotest: EPA Moves to Enable Commercialization of Remote Sensing Technology
12 May 1998
Envirotest Says EPA Takes Important Step to Enable Commercialization of Company's Remote Sensing Technology in 1998Remote Sensing Has Potential to Substantially Add to Envirotest's Long Term Growth Potential in Vehicle Emissions Testing Envirotest Sees Financial Performance Momentum Continuing in Second Half of Fiscal 1998 Company Reaffirms it Will Explore Possible Sale or Merger BETHESDA, Md., May 12 -- "The EPA has taken another important step which should lead to Envirotest Systems Corp.'s (Amex: ENR) beginning commercialization of its proprietary, cutting-edge, Remote Sensing Technology this year, possibly as early as this summer. By commercializing Remote Sensing, which is a consumer-friendly and non-obtrusive vehicle emissions testing process that would provide many vehicle owners with an alternative to taking their vehicles to vehicle emissions testing stations, Envirotest would be in a position to substantially expand its vehicle emissions testing business and revenue potential," Chester Davenport, Chairman, today announced here at the company's Annual Meeting of Shareholders. "Specifically," Mr. Davenport stated, "The EPA this past Friday issued draft guidelines detailing how states can use Envirotest's Remote Sensing to identify clean emissions vehicles and exempt such vehicles from their next regularly scheduled emissions inspection. The EPA estimates that up to 50% of vehicles can be tested through Clean-Screening, which utilizes Remote Sensing. Moreover, the EPA guidelines advise states how Clean-Screening can be incorporated into their existing or planned vehicle emissions testing programs and be approved by EPA. The EPA has indicated that its final guidance to states can be expected this fall. "We are very optimistic about the potential of Remote Sensing. We have pilot tests underway domestically in New York City and internationally in Taiwan. Furthermore, Colorado, where Envirotest conducts that state's vehicle emissions testing, has just recently passed legislation, which has been sent to the Governor for signature, authorizing the use of Clean-Screening as an appropriate vehicle emissions testing process. Our ability to use Remote Sensing in Colorado will be in addition to our existing centralized vehicle emissions testing operation. "There is no doubt that there is tremendous upside in Remote Sensing for Envirotest. It is a highly attractive, very cost effective tool for this company to use to expand and grow its presence in the enormous $800 million decentralized testing market in the U.S., a market which is approximately three times the size of the centralized vehicle emissions testing market in which Envirotest already has a 70% market share. It also is a way for us to expand into international markets where clean air and vehicle emissions testing are becoming priorities. "Envirotest's potential in vehicle emissions testing, both domestically and internationally, we believe, is very attractive. With our company now having in place a sound organization, both operationally and financially; with our momentum in both profits and revenues continuing; with our leadership position in the growing business of vehicle emissions testing; and with our potential to expand into ancillary businesses, as a result, Envirotest's Board has determined that it is in both the business and shareholders best interests to explore all strategic alternatives so to assure the company's business structure is most appropriate for the long term. Accordingly, Envirotest has retained Credit Suisse First Boston to assist in this effort, which could include a sale or merger of Envirotest. The priority of the Board in determining the appropriate course of action will be to enhance Envirotest's business potential, and at the same time, assure maximum value to shareholders. With this in mind, Envirotest's results continue strong in its third fiscal quarter which will end on June 30 and, we are confident that our profit and revenues momentum will continue to build through the second-half of this fiscal year," Mr.Davenport said. Envirotest Systems Corp. is the largest provider of vehicle inspection services in the country and the only domestic company that provides vehicle inspection services outside the United States. This press release contains statements that are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, which represent the Company's expectations or beliefs concerning future events. The Company cautions that these statements are further qualified by important factors that could cause actual results to differ materially from those in the forward-looking statements. A number of such factors are set forth in the Company's filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. SOURCE Envirotest Systems Corp.