American Ecology Posts $17.2 Million First Quarter Loss; $21 Million Ward Valley Write-Off and Increased Oak Ridge Reserve Outweigh Gain on Sale and Operating Earnings.Business Editors BOISE, Idaho--(BUSINESS WIRE)--April 28, 2003 Jim Baumgardner, Senior Vice President and Chief Financial Officer of American 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:ECOL ECOL es.comp.os.linux.* (newsgroups) ECOL Emmanuel Church of Lakewood (San Francisco, CA) ), today announced consolidated financial results for the quarter ending March 31, 2003. American Ecology posted a net loss of $17.2 million or $1.11 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 $15.9 million, or $1.11 per fully diluted share for the quarter ending March 31, 2002. First quarter 2002 results reflect a $13.1 million one-time gain from the cumulative effect of a change in accounting principle. In the first quarter of 2002, the Company adopted Financial Accounting Standard No. 143, Accounting for Asset Retirement Obligations Asset Retirement Obligations provide for future disposal of assets as required by SFAS 143 [1]. Firms must recognize the ARO liability in the period it was acquired, generally acquisition. , which resulted in a one-time gain caused by a reduction in the Company's closure and post-closure liabilities and an increase in certain assets. During the first quarter of 2003, several unusual charges negatively impacted reported financial results. The greatest impact was a $21 million write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of site development assets following an adverse state court decision in 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. seeking recovery of the Company's investment in the 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). disposal project. The Company filed a motion with the trial court to vacate To annul, set aside, or render void; to surrender possession or occupancy. The term vacate has two common usages in the law. With respect to real property, to vacate the premises means to give up possession of the property and leave the area totally devoid of contents. this decision on April 25, 2003. The outcome of this motion or any subsequent appeal is sufficiently uncertain to warrant the asset write-down. In addition, the Company's discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: 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. operation took a $1.3 million charge for increased liability reserves; higher waste removal, processing and disposal costs; and impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of certain equipment. These charges were partially offset by a gain of approximately $5 million on the February 2003 sale of the El Centro El Centro (ĕl sĕn`trō), city (1990 pop. 31,384), seat of Imperial co., SE Calif., near the Mexican border; inc. 1908. It is a processing and shipping center for a heavily irrigated agricultural region (vegetables, grain, cotton, municipal solid waste “Municipal waste” redirects here. For other uses, see Municipal waste (disambiguation). Municipal solid waste (MSW) is a waste type that includes predominantly household waste (domestic waste) with sometimes the addition of commercial wastes collected by a landfill in Texas. The Company recorded first quarter 2003 revenue 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 of $10.8 million, a 19% decrease from the $13.4 million in revenue from continuing operations for the first quarter last year. 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. facility continued to deliver growth, increasing revenue by 24% in the first quarter of 2003 over the same quarter last year. Higher first quarter 2002 revenue was primarily attributable to a $3.85 million waste packaging and disposal project performed at the Company's Richland, Washington Richland is a city in Benton County in southeastern Washington, at the confluence of the Yakima River and the Columbia River. As of the 2000 census, the city population was 38,708, with a 2005 population estimate of 43,520. facility. During the first quarter of 2003, the Company generated $290,000 of 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. from continuing operations, compared to $3.7 million of operating income for the same quarter last year. Like revenue, first quarter 2002 income materially benefited from completion of the large project at the Richland facility. First quarter 2003 earnings were also depressed by higher selling, general & administrative expenses (SG&A), which increased to $4.5 million, or 42% of revenue. This compared to $3.5 million, or 26% of revenue in the same quarter last year. This increase is the direct result of $1.5 million in legal fees expended ex·pend tr.v. ex·pend·ed, ex·pend·ing, ex·pends 1. To lay out; spend: expending tax revenues on government operations. See Synonyms at spend. 2. on the Ward Valley litigation in 2003, compared to $147,000 spent on Ward Valley litigation in the first quarter of 2002. "A number of significant, unusual events dominated American Ecology's first quarter 2003 financial results." commented Baumgardner, adding, "Also, the first quarter of 2002 included a large project and the positive effect of a change in accounting standards, making comparison of the two quarters difficult." "Our core waste treatment and disposal business, particularly at the Grand View, Idaho facility, delivered solid performance and is expected to do so for the balance of 2003," Baumgardner concluded. The Company's first quarter 2003 investor conference call will be held Monday, April 28, 2003 at 10:00 am Mountain Time. President and Chief Executive Officer Stephen Romano, Mr. 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 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 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. 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 improved earnings, prevail in pending litigation, or complete its discontinued operation discontinued operation A segment of a business that has been abandoned or sold or for which plans for one or another of these actions have been approved. See also continuing operations. obligations at 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 within established reserves. For information on 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
March 31, 2003 March 31, 2002
--------------- ---------------
Revenue $10,771 $13,424
Direct operating costs 5,984 6,175
---------- --------
Gross profit 4,787 7,249
Selling, general and administrative
expenses 4,497 3,541
---------- --------
Income from operations 290 3,708
Investment income -- 11
Interest income (expense) (121) (265)
Other income (loss) -- (465)
Write Down of Ward Valley Assets (20,951) --
---------- --------
Income (loss) before income tax,
discontinued operations and
cumulative effect of change in
accounting principle (20,782) 2,989
Income tax expense (benefit) (8) --
---------- --------
Income (loss) before discontinued
operations and cumulative effect of
change in accounting principle (20,774) 2,989
Gain from discontinued operations -
El Centro Landfill 4,944 190
(Loss) from discontinued operations -
Oak Ridge LLRW Facility (1,337) (401)
---------- --------
Income (loss) before cumulative effect
of change in accounting principle (17,167) 2,778
Cumulative effect of accounting change -- 13,141
---------- --------
Net income (loss) (17,167) 15,919
Preferred stock dividends 64 98
---------- --------
Net income (loss) available to common
shareholders ($ 17,231) $15,821
========== ========
Basic (loss) earnings from continuing
operations (1.34) .22
Basic (loss) earnings from
discontinued operations .23 (.02)
Basic earnings from cumulative effect
of accounting change -- .95
---------- --------
Basic (loss) earnings per share $(1.11) $1.15
========== ========
Diluted (loss) earnings from
continuing operations (1.34) .17
Diluted (loss) earnings from
discontinued operations .23 (.02)
Diluted earnings from cumulative
effect of accounting change -- .92
---------- --------
Diluted (loss) earnings per share $(1.11) $1.11
========== ========
Dividends paid per common share $-- $--
========== ========
Note: Certain reclassifications of prior quarter and previous year-to-date amounts have been made to conform to Verb 1. conform to - satisfy a condition or restriction; "Does this paper meet the requirements for the degree?" fit, meet coordinate - be co-ordinated; "These activities coordinate well" current quarter presentation and discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. .
AMERICAN ECOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS (unaudited)
($ in 000's except per share amounts)
March 31, 2003 Dec. 31, 2002
--------------- --------------
ASSETS
Current Assets:
Cash and cash equivalents $7,134 $135
Receivables, net 7,306 10,460
Income taxes receivable 742 740
Prepayments and other 368 498
Deferred income taxes -- 2,745
Assets held for sale or closure 3,542 10,722
-------- --------
Total current assets 19,092 25,300
Cash and investment securities, pledged 244 244
Property and equipment, net 27,488 26,998
Facility development costs 6,478 27,430
Other assets 66 129
Assets held for sale or closure 2,237 1,485
Deferred income taxes 8,284 5,539
-------- --------
Total Assets $63,889 $87,125
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long term debt $1,719 $1,985
Accounts payable 2,568 2,192
Accrued liabilities 4,462 4,166
Accrued closure and post closure
obligation, current portion 882 882
Income taxes payable 15 23
Current liabilities of assets held
for sale or closure 5,715 7,965
-------- --------
Total current liabilities 15,361 17,213
Long term accrued liabilities 526 2,372
Long term debt 5,310 5,972
Revolving line of credit -- 603
Liabilities of assets held for sale or
closure, excluding current portion 5,590 5,699
Accrued closure and post closure
obligation, excluding current portion 9,485 9,318
-------- --------
Total liabilities 36,272 41,177
-------- --------
Commitments and contingencies
Shareholders' equity:
Convertible preferred stock, 1,000,000
shares authorized,
Designated as follows:
Series D cumulative convertible
preferred stock, $.01 par value,
0 and 100,001 shares issued and
outstanding; -- 1
Common stock, $.01 par value,
50,000,000 authorized, 16,960,901
and 14,539,264 shares issued and
outstanding 170 145
Additional paid-in capital 54,665 55,789
Accumulated deficit (27,218) (9,987)
-------- --------
Total shareholders' equity 27,617 45,948
-------- --------
Total Liabilities and Shareholders'
Equity $63,889 $87,125
======== ========
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