Hurt by Slump in Orders, Wahlco Predicts $12-Million Loss for 1992

Wahlco Environmental Systems Inc., hurt by a slowdown in orders and increased costs from the restructuring of its manufacturing operations, said Thursday that it will post a loss of at least $12 million for 1992.

The company, which provides pollution control equipment to electric power plants and industries, also announced that its chief financial officer, Charles F. Wilson, has resigned to pursue other interests. Henry N. Huta, who is president and chief executive, and treasurer Michael J. Lowell will take over his duties for now, the company said.

Wahlco, based in Irvine, blamed the annual loss--estimated to be about the same amount as the company’s profit for the previous year--mainly on a big drop in orders for gas-flow control products, which direct exhaust gases through a boiler during power production. The company, which is 80% owned by San Diego Gas & Electric Co., also said that a redesign of its product line cut into profit.

Annual sales are expected to be between $81.5 million and $84.5 million, compared with $88.8 million for all of 1991.

The company noted that the figures are only estimates. Final results will be released the second week of February.

For the fourth quarter, Wahlco officials estimated, the company will post a loss of $4.5 million to $5 million, contrasted with a profit of $3.7 million for the same period a year earlier. Revenue is estimated to be 30% to 35% lower: between $17 million and $20 million, down from $27.5 million.

In September, the company said that it would combine 10 subsidiaries that made the gas-flow control products into one unit, Wahlco Engineered Products. The presidents of three of those units had resigned several months before the restructuring was announced.

Orders for the company’s flue-gas systems, which have accounted for half of the company’s sales, fell about 60% during the year to an estimated $16.5 million, spokeswoman Anne Anderson said. Sales of the products apparently stalled after customers put orders on hold in the hope that President Bush would relax federal clean air standards, Anderson said. Orders have picked up since the election of Bill Clinton, who is expected to keep the standards in place, she said. Manufacturers must conform to the the new standards by 1995.

“They still had time to comply, and they were putting it off. Now we’re seeing an accelerated schedule from the utilities.”

The company now has about $12.5 million in orders for the gas-flue systems, which should show up as sales in the first half of this year, Anderson said.

To save money, the company also is moving its headquarters from Irvine to Santa Ana, where its Wahlco Inc. subsidiary is located. The move is expected to be completed in the next few weeks.

In Thursday’s trading on the New York Stock Exchange, Wahlco’s stock closed at $7 a share, unchanged.