American Ecology Announces $1.0 Million 3rd Quarter Net Profit; Core Waste Disposal Operations Generate $3.8 Million in Quarterly Operating Income.Business Editors/Energy Editors/Environment Writers BOISE, Idaho--(BUSINESS WIRE)--Oct. 28, 2002 Jim Baumgardner, Senior Vice President and Chief Financial Officer of American Ecology Corporation (Nasdaq:ECOL ECOL es.comp.os.linux.* (newsgroups) ECOL Emmanuel Church of Lakewood (San Francisco, CA) ), today announced financial results for the quarter and nine months ending September 30, 2002. For the quarter ended September 30, 2002, the Company reported net income of $1.0 million, or $0.06 per fully diluted share. This compares to a net loss of $1.2 million, or $0.10 per share loss for the third quarter of 2001. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for the third quarter of 2002 reached $944,000 compared to an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $928,000 for the same quarter last year, a $1.9 million improvement. "Our core waste treatment and disposal operations continue to produce solid earnings despite difficult economic conditions, generating over $3.8 million in operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before during the quarter," Baumgardner commented, adding, "However, overall earnings continued to be negatively impacted by operating losses at the Company's low-level radioactive waste Noun 1. low-level radioactive waste - (medicine) radioactive waste consisting of objects that have been briefly exposed to radioactivity (as in certain medical tests) processing facility in Oak Ridge, Tennessee Oak Ridge is an incorporated city in Anderson and Roane Counties in East Tennessee, about 25 miles northwest of Knoxville. Oak Ridge's population was 27,387 people at the 2000 census. ." Consolidated revenue for the third quarter of 2002 reached $15.8 million, a 14% increase over consolidated revenue of $13.9 million reported for the third quarter of 2001. This quarterly increase in revenue reflects record throughput at the Company's Grand View, Idaho Grand View is a city in Owyhee County, Idaho, United States. The population was 470 at the 2000 census. Geography Grand View is located at (42.984803, -116.093277)GR1. disposal site and improved business at its Beatty, Nevada Beatty is a census-designated place and town located on the Amargosa River in Nye County in the U.S. state of Nevada. The population was 1,154 at the 2000 census. Wired telephone service numbers for the Beatty central office follow the format: (775) 553-xxxx. disposal facility, where revenue increased 33% and 16%, respectively, over the same quarter last year. The Company's Field Services Division also contributed materially to the increased quarterly revenue. "Our Idaho facility achieved its highest quarterly waste disposal volume since its acquisition in early 2001", Baumgardner explained, adding "And our Beatty, Nevada facility posted a solid profit for the quarter, reversing negative trends that had emerged at Beatty early in the year." Revenue and earnings growth generated by the Company's core waste treatment and disposal operations were materially offset by a $1.6 million operating loss for the quarter at the Company's Oak Ridge Oak Ridge, city (1990 pop. 27,310), Anderson and Roane counties, E Tenn., on Black Oak Ridge and the Clinch River; founded by the U.S. government 1942, inc. as an independent city 1959. Low Level Radioactive Waste radioactive waste, material containing the unusable radioactive byproducts of the scientific, military, and industrial applications of nuclear energy. Since its radioactivity presents a serious health hazard (see radiation sickness), disposing of such material is a ("LLRW LLRW Low-Level Radioactive Waste ") processing facility. This significant loss for the quarter reversed a trend of improving financial performance by the facility in the first half of 2002. On October 18, 2002, the Company announced it was marketing Oak Ridge subsidiary American Ecology Recycle Center, Inc. ("AERC AERC African Economic Research Consortium AERC Adult Education Research Conference AERC American Endurance Ride Conference AERC Alcohol Education and Research Council (UK) AERC Association of European Rarities Committees ") for sale. AERC operates both the Oak Ridge LLRW processing facility and the Field Services business unit. "Significant resources continued to be devoted to removing non-revenue producing material from the site and preparing the Oak Ridge processing facility for sale," Baumgardner stated. For the nine months of 2002, net income reached $22.3 million or $1.39 per fully diluted share, compared to net income of $595,000 or $0.02 per diluted share for the corresponding period in 2001. Implementation of SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 143, a new accounting standard, during the first quarter of 2002 accounted for a one-time, cumulative effect gain of $16.3 million. Excluding the gain from this change in accounting standards, fully diluted net income from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the reached $6.0 million or $0.36 per share for the nine months ending September 30, 2002. Operating income for the nine months of 2002 reached $6.9 million, substantially better than the $224,000 in operating income posted during the same nine months of 2001. Consolidated revenue for the nine months ending September 30, 2002 reached $50.9 million, a 25% increase over the $40.5 million reported for the same nine months of 2001. "During 2002, we have felt the affects of a weaker national economy," stated President and Chief Executive Officer Stephen Romano. "Despite this, American Ecology's core waste treatment and disposal business has increased both revenue and earnings due primarily to increased business from long-term government contracts, and expansion of our customer base including several large private industry clean-up projects." For the three months ending September 30, 2002, Selling, General & Administrative expense ("SG&A") decreased to $4.0 million, or 25% of revenue, compared to $5.5 million, or 40% of revenue in the same quarter of 2001. This 27% reduction in quarterly SG&A spending reflects overhead spending cuts Noun 1. spending cut - the act of reducing spending cut - the act of reducing the amount or number; "the mayor proposed extensive cuts in the city budget" made in previous quarters. For the nine months ending September 30, 2002, SG&A was $12.3 million or 24% of revenue, compared to the $14.5 million (36% of revenue) SG&A expense recorded in the corresponding period of 2001. "Operational efficiency and overhead cost containment cost containment, n the features of a dental benefits program or of the administration of the program designed to reduce or eliminate certain charges to the plan. continue to be high priorities," stated Romano, concluding, "While we expect continued profitability in the fourth quarter, the outlook for the fourth quarter is difficult to forecast in light of uncertainties regarding future disposition of the Oak Ridge business." The Company's third quarter 2002 investor conference call will be held Monday, October 28, 2002 at 10:00 am Mountain Time. President and Chief Executive Officer Stephen Romano, Senior Vice-President and Chief Financial Officer James Baumgardner, and Controller Michael Gilberg will host the call. Interested parties may submit questions in advance to info@americanecology.com, or by facsimile to 208/331-7900. To join the call, dial 877/679-9055. Participants will be asked to provide their name and affiliation. American Ecology Corporation, through its subsidiaries, provides radioactive, PCB PCB: see polychlorinated biphenyl. PCB in full polychlorinated biphenyl Any of a class of highly stable organic compounds prepared by the reaction of chlorine with biphenyl, a two-ring compound. , hazardous, and non-hazardous waste services to commercial and government customers throughout the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , such as nuclear power plants, steel mills, medical and academic institutions and petro-chemical facilities. Headquartered in Boise, Idaho “Boise” redirects here. For other uses, see Boise (disambiguation). Boise is the capital and most populous city of the U.S. state of Idaho. It is the county seat of Ada County and the principal city of the Boise metropolitan area. , the Company is the oldest radioactive and hazardous waste Hazardous waste Any solid, liquid, or gaseous waste materials that, if improperly managed or disposed of, may pose substantial hazards to human health and the environment. Every industrial country in the world has had problems with managing hazardous wastes. services company in the United States. This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , including statements regarding expected profitability, that are based on our current expectations, beliefs, and assumptions about the industry and markets in which American Ecology Corporation and its subsidiaries operate. Actual results may differ materially from what is expressed herein and no assurance can be given that the Company can successfully implement its growth strategy, generate future earnings, successfully market or reduce losses its Oak Ridge subsidiary, or prevail in any pending litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. . For information on other factors that could cause actual results to differ from expectations, please refer to American Ecology Corporation's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and Quarterly Reports on Form 10-Q Form 10-Q See 10-Q. filed with the Securities and Exchange Commission.
AMERICAN ECOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
($ in 000's except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
2002 2001 2002 2001
--------- -------- -------- --------
Revenue $ 15,774 $13,896 $50,932 $40,493
Direct operating costs 10,848 9,326 31,789 25,775
--------- -------- -------- --------
Gross profit 4,926 4,570 19,143 14,718
Selling, general and
administrative expenses 3,982 5,498 12,261 14,494
--------- -------- -------- --------
Income (loss) from operations 944 (928) 6,882 224
Investment income 7 24 23 231
Interest expense 227 294 751 898
Gain on sale of assets 43 50 126 162
Other income (expense) 39 (34) (545) 990
--------- -------- -------- --------
Net income (loss) before income
taxes 806 (1,182) 5,735 709
Income tax expense (benefit) (226) 30 (226) 114
--------- -------- -------- --------
Net income (loss) before
cumulative effect of accounting
change 1,032 (1,212) 5,961 595
Cumulative effect of accounting
change -- -- 16,323 --
--------- -------- -------- --------
Net income (loss) 1,032 (1,212) 22,284 595
Preferred stock dividends 100 99 297 295
--------- -------- -------- --------
Net income (loss) available to
common shareholders $ 932 $(1,311) $21,987 $ 300
========= ======== ======== ========
Basic earnings from continuing
operations .06 (.10) .40 .02
Basic earnings from cumulative
effect of accounting change -- -- 1.14 --
--------- -------- -------- --------
Basic earnings per share $ .06 $ (.10) $ 1.54 $ .02
========= ======== ======== ========
Diluted earnings from continuing
operations .06 (.10) .36 .02
Diluted earnings from cumulative
effect of accounting change -- -- 1.03 --
--------- -------- -------- --------
Diluted earnings per share $ .06 $ (.10) $ 1.39 $ .02
========= ======== ======== ========
Dividends paid per common share $ -- $ -- $ -- $ --
========= ======== ======== ========
Note: Certain reclassifications of prior quarter and previous
year-to-date amounts have been made to conform to current
quarter and year-to-date presentation, none of which affect
previously reported net income.
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