American Ecology Posts $13.1 Million in 2004 Operating Income; Fourth Quarter Operating Income Increases to $3.4 Million.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. -- Jim Baumgardner, Senior Vice President and Chief Financial Officer of American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Ecology ecology, study of the relationships of organisms to their physical environment and to one another. The study of an individual organism or a single species is termed autecology; the study of groups of organisms is called synecology. Corporation (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ECOL ECOL es.comp.os.linux.* (newsgroups) ECOL Emmanuel Church of Lakewood (San Francisco, CA) ), today announced financial results for the three and twelve months ending December December: see month. 31, 2004. For the fourth quarter of 2004, the Company reported net income of $3.2 million or $0.18 per fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share compared to net income of $3.1 million or $0.17 per diluted share for the fourth quarter of 2003. For the twelve months ending December 31, 2004, the Company reported net income of $23.4 million, or $1.32 per share compared to a net loss of $8.7 million or ($0.52) per fully diluted share in 2003. For 2004, the Company reported 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. of $13.1 million or 35% higher than the $9.7 million in operating income posted in 2003. "American Ecology's core hazardous and 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 treatment and disposal business delivered another quarter of strong earnings," Baumgardner stated, adding, "The significant increase in operating income year over year demonstrates that our growth strategy is working." Fourth Quarter 2004 Revenue for the fourth quarter of 2004 decreased to $13.5 million, down $3.4 million from $16.9 million in 2003. This decrease in revenue reflected a large New Jersey clean up project shipped to the Company's Idaho Idaho (ī`dəhō), one of the Rocky Mt. states in the NW United States. It is bordered by Montana and Wyoming (E), Utah and Nevada (S), Oregon and Washington (W), and the Canadian province of British Columbia (N). facility in late 2003 which included a substantial transportation component and was not fully replaced by increased disposal revenue from other customers in 2004. Quarterly revenue was also adversely affected by a July July: see month. 1, 2004 fire at the Company's Robstown, Texas Robstown is a suburb-city in Nueces County, west of Corpus Christi, Texas. It was founded about 1906, and was named for Robert Driscoll, a prominent figure from Corpus Christi. The population was 12,727 at the 2000 census. facility which required the facility to suspend waste treatment operations. On December 1, 2004 the Texas facility resumed limited treatment operations. As previously disclosed, Texas treatment revenue was approximately $1 million per quarter prior to the fire. During the quarter, the Company recognized $431,000 of expected proceeds from business interruption insurance Noun 1. business interruption insurance - insurance that provides protection for the loss of profits and continuing fixed expenses resulting from a break in commercial activities due to the occurrence of a peril which reflects the actual incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. expenses incurred since July 1, 2004 directly resulting from the fire. The Company's total business interruption INTERRUPTION. The effect of some act or circumstance which stops the course of a prescription or act of limitation's. 2. Interruption of the use of a thing is natural or civil. claim is materially larger. Management believes the full amount claimed is valid, and anticipates recognizing additional income when its claim is fully resolved with its insurance carrier. The Company also impaired the assets destroyed by the fire and recognized the insured value of such assets during the quarter, resulting in a $275,000 net gain. "Future reported financial results will be affected until we resume full treatment operations and the business interruption claim is resolved," Baumgardner noted. As reported on December 10, 2004, the Company increased its estimate for closure and post-closure costs at its closed Sheffield, Illinois Sheffield is a village in Bureau County, Illinois, USA. The population was 946 at the 2000 census. Geography Sheffield is located at (41.355915, -89.736672)GR1. facility by $715,000 based on updated analyses. The combination of lower revenue and the increased closure estimate reduced gross profit to $5.1 million compared to gross profit of $5.9 million in the fourth quarter of 2003. While gross profit decreased, it did not decrease as much as revenue, allowing gross margin to increase to 38% of revenue in the fourth quarter of 2004 compared to 35% of revenue in the same quarter last year. This increase in gross margin reflects a lower percentage of quarterly revenue derived from low-margin transportation services. Selling, general & administrative expenses (SG&A) for the fourth quarter decreased to $2.1 million or 16% of revenue, compared to $2.7 million, or 16% of revenue in the same quarter last year. The decrease in fourth quarter SG&A primarily reflects a $461,000 reduction in the Company's allowance for doubtful accounts Allowance for Doubtful Accounts An estimation made by a company and documented on its balance sheet for receivables that might go uncollected. Notes: It is standard practice for a company to have funds set aside for money that cannot be collected. . "In 2004 the Company improved both the quality and turnover of its accounts and substantially reduced receivable write-offs compared to prior years." Baumgardner stated, adding, "This progress allowed us to materially reduce our allowance for bad debt while maintaining an adequate allowance for the future." The Company's number of days sales outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). , a measure of accounts receivable turnover Accounts receivable turnover The ratio of net credit sales to average accounts receivable, which is a measure of how quickly customers pay their bills. accounts receivable turnover , decreased to an average of 60 days outstanding for 2004, down from 68 days in 2003. In 2004, the Company wrote off $67,000 of bad debt, down from $228,000 in 2003. Despite lower revenue and the charge for the increased Illinois Illinois, river, United States Illinois, river, 273 mi (439 km) long, formed by the confluence of the Des Plaines and Kankakee rivers, NE Ill., and flowing SW to the Mississippi at Grafton, Ill. It is an important commercial and recreational waterway. closed site reserve, lower SG&A and recognition of a portion of the business interruption claim allowed the Company to deliver operating income of $3.4 million, an 8% increase over the $3.1 million posted for the same quarter last year. Twelve Months 2004 Revenue for the twelve months ending December 31, 2004 declined 5% to $54.2 million compared to $57.0 million for 2003. The decrease in revenue was attributable to less transportation revenue, significantly decreased disposal volume at the Company's Texas facility following the July 1 fire, a slight decrease in the Idaho facility's disposal volume as certain projects were delayed into 2005, and a lower average selling price The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. for the Company's disposal services. However, the lower volumes in Texas and Idaho were offset by an 80% increase in volume at the Company's 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. facility. Overall waste volumes were up 2.5% over the previous year. 2004 gross profit dipped only slightly to $23.3 million or 43% of revenue, compared to gross profit of $23.6 million or 42% of revenue for 2003. While revenue decreased, gross profit remained at a similar level due to a higher proportion of treatment and disposal revenue versus lower margin transportation revenue in 2003. In 2004, treatment and disposal revenue represented 81% of total revenue, up from 77% of total revenue in 2003. For the year, SG&A decreased to $10.6 million or $3.3 million lower than 2003. Lower 2004 SG&A costs reflect materially reduced legal spending, a reduction in the allowance for doubtful accounts, and generally lower administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. due to improved business systems and efficiencies. In 2003 SG&A was negatively impacted by $1.8 million in legal expense for the Company's Ward Valley, California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). damages claim. As noted above, for the year ending December 31, 2004, the Company reported operating income of $13.1 million, or a 35% increase over the $9.7 million operating income posted in 2003. Large one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. events in both years contributed to the large swing in 2004 net income. In 2003, the Company wrote off a $21 million deferred site development asset following an adverse trial court ruling in the Ward Valley 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. and expensed an additional $1.8 million for related legal fees. The Company also expensed $2.5 million for discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. at its former 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. facility, and posted a $5 million gain on sale of its Texas sanitary landfill sanitary landfill: see solid waste. in 2003. Following the June June: see month. 2004 sale of the 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. facility, the Company recognized approximately $1 million of income and adjusted its valuation allowance on its deferred tax assets. This produced an $11.3 million tax benefit in the second quarter of 2004. Lastly, the July 1, 2004 fire at the Texas facility had a material adverse impact on net income for the year. "For the first time in over a decade, American Ecology entered the new year fully focused on its core waste treatment and disposal business," stated President and Chief Executive Officer Stephen Stephen, 1097?–1154, king of England (1135–54). The son of Stephen, count of Blois and Chartres, and Adela, daughter of William I of England, he was brought up by his uncle, Henry I of England, who presented him with estates in England and France and Romano Ro·ma·no n. A hard, sharp, dry cheese of Italian origin that is made from cow's milk and usually served grated as a garnish. [Italian, short for (pecorino) romano, Roman (sheep's milk cheese) , adding, "With full resumption RESUMPTION. To reassume; to promise again; as, the resumption of payment of specie by the banks is general. It also signifies to take things back; as the government has resumed the possession of all the lands which have not been paid for according to the requisitions of the law, and the of treatment services in Texas, continued efficient operation of all four of our disposal facilities and a solid sales outlook, management is targeting operating income growth of 15% for 2005." Conference Call The Company's fourth quarter and full year 2004 investor conference call will be held Wednesday Wednesday: see week. , February February: see month. 9, 2005 at 10:00 a.m. Mountain Time. President and Chief Executive Officer Stephen Romano, Senior Vice President and Chief Financial Officer Jim Baumgardner, and Vice President and Controller Michael Gilberg will host the call. Interested parties are invited to submit questions in advance to info@americanecology.com, or by facsimile to 208-331-7900. To join the call, dial 1-877-331-8343. Participants will be asked to provide their name and affiliation. American Ecology Corporation, through its subsidiaries, provides radioactive ra·di·o·ac·tive adj. Of or exhibiting radioactivity. radioactive characterized by radioactivity. radioactive decay , 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, refineries and chemical manufacturing facilities. Headquartered in Boise, Idaho, 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. 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 meet its 2005 earnings estimates, succeed in its business strategy, prevail in pending litigation, or collect insurance claims. For information on other factors that could cause actual results to differ from expectations, please refer to American Ecology Corporation's most recent 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 Report 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 Year Ended
Ended Dec. 31, Dec. 31,
2004 2003 2004 2003
--------------------------------
Revenue $13,538 $16,932 $54,167 $57,047
Direct operating costs 8,440 11,056 30,897 33,479
--------------------------------
Gross profit 5,098 5,876 23,270 23,568
Selling, general and administrative
expenses 2,136 2,731 10,553 13,819
Business interruption insurance claim (431) -- (431) --
--------------------------------
Operating income 3,393 3,145 13,148 9,749
Interest income 70 13 203 347
Interest expense 48 47 194 266
Fire related property insurance claims
net of impairment 275 -- 275 --
Loss on write off of Ward Valley
facility development costs -- -- -- 20,951
Other income 25 11 99 124
--------------------------------
Income (loss) before income tax and
discontinued operations 3,715 3,122 13,531 (10,997)
Income tax expense (benefit) 458 (1) (8,832) 72
--------------------------------
Income (loss) before discontinued
operations 3,257 3,123 22,363 (11,069)
Gain from discontinued operations - El
Centro Landfill -- 49 -- 4,994
Gain (loss) from discontinued
operations - Oak Ridge Facility (21) (88) 1,047 (2,517)
--------------------------------
Net income (loss) 3,236 3,084 23,410 (8,592)
Preferred stock dividends -- -- -- 64
--------------------------------
Net income (loss) available to common
shareholders $3,236 $3,084 $23,410 $(8,656)
================================
Basic earnings (loss) from continuing
operations .19 .18 1.30 (.67)
Basic earnings (loss) from
discontinued operations (.00) (.00) .06 .15
--------------------------------
Basic earnings (loss) per share $.19 $.18 $1.36 $(.52)
================================
Diluted earnings (loss) from
continuing operations .18 .17 1.26 (.67)
Diluted earnings (loss) from
discontinued operations (.00) (.00) .06 .15
--------------------------------
Diluted earnings (loss) per share $.18 $.17 $1.32 $(.52)
================================
Dividends paid per common share $.25 $-- $.25 $--
================================
AMERICAN ECOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited) ($ in 000's except per share amounts)
Dec. Dec.
31, 31,
2004 2003
----------------
ASSETS
Current Assets:
Cash and cash equivalents $2,160 $6,674
Short term investments 10,967 --
Receivables, net 8,963 12,596
Insurance receivable 1,285 --
Prepayments and other 1,469 1,051
Deferred income taxes 5,613 3,222
Assets held for sale or closure -- 938
----------------
Total current assets 30,457 24,481
Property and equipment, net 27,363 28,317
Facility development costs 6,478 6,478
Other assets 462 731
Deferred income taxes 12,473 5,062
Assets held for sale or closure -- 1,557
----------------
Total assets $77.233 $66,626
================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long term debt $1,457 $1,475
Accounts payable 3,022 1,678
Accrued liabilities 6,341 4,788
Accrued closure and post closure obligation, current
portion 2,323 1,828
Current liabilities of assets held for sale or
closure -- 1,907
----------------
Total current liabilities 13,143 11,676
Long term debt 2,734 4,200
Long term accrued liabilities 441 454
Accrued closure and post closure obligation, excluding
current portion 9,304 9,296
Liabilities of assets held for sale or closure,
excluding current portion -- 4,649
----------------
Total liabilities 25,622 30,275
----------------
Commitments and contingencies
Shareholders' equity:
Convertible preferred stock, 1,000,000 shares
authorized
Common stock, $.01 par value, 50,000,000 authorized,
17,398,494 and 17,033,118 shares issued and
outstanding 174 170
Additional paid-in capital 51,015 54,824
Retained earnings (deficit) 422 (18,643)
----------------
Total shareholders' equity 51,611 36,351
----------------
Total Liabilities and Shareholders' Equity $77,233 $66,626
================
AMERICAN ECOLOGY CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited) ($ in 000's except per share amounts)
For the Year Ended December 31,
2004 2003
----------------
Cash flows from operating activities:
Net income (loss) $23,410 $(8,592)
Adjustments to reconcile net income (loss)to net
cash provided by operating activities:
Depreciation, amortization, and accretion 5,957 6,973
(Income) loss from discontinued operations (1,047) (2,477)
Income tax benefit on exercise of stock options 634 --
Loss on write off of Ward Valley facility
development costs -- 20,951
Reversal of deferred income tax valuation allowance (9,800) --
Stock compensation -- 38
Changes in assets and liabilities:
Receivables 3,633 (2,078)
Other assets (605) (206)
Closure and post closure obligation (526) (537)
Income taxes payable/receivable -- 715
Accounts payable and accrued liabilities 2,884 (218)
----------------
Net cash provided by operating activities 24,540 14,569
Cash flows from investing activities:
Capital expenditures (4,984) (6,270)
Proceeds from the sale of assets 179 --
Transfers between cash and short term investments (10,967) --
----------------
Net cash used by investing activities (15,772) (6,270)
Cash flows from financing activities:
Dividends paid (4,345) --
Payments of indebtedness (1,484) (3,053)
Warrants purchased and canceled (5,500) --
Stock purchased and canceled -- (231)
Retirement of Series D Preferred Stock -- (6,406)
Stock options and warrants exercised 1,061 4,002
----------------
Net cash used by financing activities (10,268) (5,688)
----------------
Increase (decrease) in cash and cash equivalents (1,500) 2,611
Net cash provided (used) by discontinued operations (3,014) 3,928
Cash and cash equivalents at beginning of year 6,674 135
----------------
Cash and cash equivalents at end of year $2,160 $6,674
================
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest expense $194 $266
Income taxes paid 335 93
Non-cash investing and financing activities:
Preferred stock dividends accrued -- --
Acquisition of equipment with notes/capital leases -- 168
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