American Ecology Posts $3.4 Million First Quarter Operating Income; Company Upgrades 2004 Outlook.Business Editors BOISE Boise, city, United States Boise (boi`sē, –zē), city (1990 pop. 125,738), state capital and seat of Ada co., SW Idaho, on the Boise River; inc. 1864. , Idaho--(BUSINESS WIRE)--April 20, 2004 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: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, 2004. American Ecology posted net income of $2.4 million or $0.14 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 a net loss of $17.2 million, or $1.11 per fully diluted share for the quarter ending March 31, 2003. 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. , a key measure of financial performance, increased from $290,000 for the first quarter last year to $3.4 million for the first quarter of 2004. The results marked the ninth consecutive quarter of positive operating income. For the second consecutive quarter, each of the Company's four disposal facilities posted positive operating income and showed improved operating income over the same quarter last year. First quarter 2004 revenue reached $13.9 million or 29% higher than the $10.8 million in revenue for the first quarter of 2003. A combination of higher waste volumes and higher average selling prices The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. yielded the increase in quarterly revenue. At 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). site, a slightly lower average selling price was more than offset by higher volume, allowing the site to increase revenue by almost 30%. At the Company's Nevada and Texas facilities, average selling prices increased due to a more favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. mix of higher-priced niche services generating increased revenue from the first quarter of last year at both sites. The Company's rate-regulated Washington facility also posted another strong quarter. "Increased waste volume and a higher overall average selling price produced higher revenue," stated Baumgardner, adding, "Given the largely fixed cost nature of our business, this higher revenue produced improved fall through to the bottom line and another solid quarter of 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 ." Selling, general & administrative expenses (SG&A) for the first quarter decreased to $2.9 million, or 21% of revenue, compared to SG&A of $4.5 million or 42% of revenue in the first quarter last year. The decrease was primarily due to $1.5 million in 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. expenses in 2003 which did not reoccur in 2004. The Company recognized $149,000 of income at its 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. This gain reflected collection of aged accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying in excess 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'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. . During the quarter, the Company entered into a non-binding letter of intent with a potential new buyer for the Oak Ridge facility. Although no assurance can be given that a transaction will be consummated con·sum·mate tr.v. con·sum·mat·ed, con·sum·mat·ing, con·sum·mates 1. a. To bring to completion or fruition; conclude: consummate a business transaction. b. , disposing of the Oak Ridge asset remains a top management priority. "Solid operating income and cash flow in the first quarter of 2004 continued to strengthen the Company's overall financial condition," Baumgardner concluded. During the first quarter of 2004, the Company redeemed re·deem tr.v. re·deemed, re·deem·ing, re·deems 1. To recover ownership of by paying a specified sum. 2. To pay off (a promissory note, for example). 3. a warrant to purchase 1,349,843 shares of common stock for $5.5 million or an equivalent of $4.07 per underlying common share. The redeemed warrant represented approximately 8% of the Company's outstanding shares and eliminated the Company's sole outstanding warrant to acquire common stock. At quarter end the Company had $10.8 million of cash on hand. Also during the quarter, the Company recognized $1.2 million of non-cash income tax expense as it utilized the benefit of its net 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. carry-forwards and reduced the related deferred tax asset. The Company did not recognize tax expense in 2003 due to the tax loss resulting from the $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 its Ward Valley asset. At March 31, 2004 the Company had an approximately $16 million valuation allowance against $23 million of gross deferred tax assets, consisting primarily of net operating loss carry-forwards, resulting in a $7 million net deferred tax asset. The Company reviews the deferred tax asset and related valuation allowance for appropriateness at least annually. "The first quarter of 2004 highlights the underlying strength of our core disposal assets," stated President and Chief Executive Officer Stephen Romano. "By combining our high throughput The speed with which a computer processes data. It is a combination of internal processing speed, peripheral speeds (I/O) and the efficiency of the operating system and other system software all working together. 1. commodity business with increased delivery of higher margin niche services, American Ecology simultaneously increased waste volumes as well as overall average selling price." The Company previously reported that it expected 2004 operating income to exceed the 9% growth in operating income achieved in 2003. Management is upgrading its 2004 outlook and now expects 2004 operating income to increase by more than 15% over 2003 results. "Efficient performance by all four American Ecology disposal facilities combined with a favorable sales outlook and improving national economy lead us to upgrade our operating income forecast," Romano stated, concluding, "We now believe greater than 15% growth in operating income for 2004 is achievable." The Company's first quarter 2004 investor conference call will be held Wednesday, April 21, 2004 (tomorrow) at 10:00 am Mountain Time. Mr. 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 1-888-747-3446. 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, meet its 2004 operating income forecast, prevail in pending litigation to recover monetary damages Monetary damages, in civil law, refers to compensation given to an injured party by a liable party. Monetary damages may be restitution, a penalty, or both. , 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 facility within established reserves. For information on factors that could cause actual results to differ from expectations, or regarding income taxes, 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, March 31,
2004 2003
-----------------------------
Revenue $ 13,905 $ 10,771
Direct operating costs 7,612 5,984
----------- -----------
Gross profit 6,293 4,787
Selling, general and administrative
expenses 2,872 4,497
----------- -----------
Operating income 3,421 290
Interest income 36 --
Interest expense 49 121
Loss on write off of Ward Valley facility
development costs -- 20,951
Other income 45 --
----------- -----------
Income (loss) before income tax and
discontinued operations 3,453 (20,782)
Income tax expense (benefit) 1,164 (8)
----------- -----------
Income (loss) before discontinued
operations 2,289 (20,774)
Gain from discontinued operations - El
Centro Landfill -- 4,944
Gain (loss) from discontinued operations
- Oak Ridge LLRW Facility 149 (1,337)
----------- -----------
Net income (loss) 2,438 (17,167)
Preferred stock dividends -- 64
----------- -----------
Net income (loss) available to common
shareholders $ 2,438 $ (17,231)
=========== ===========
Basic earnings(loss) from continuing
operations .13 (1.34)
Basic earnings from discontinued
operations .01 .23
----------- -----------
Basic earnings (loss) per share $ .14 $ (1.11)
=========== ===========
Diluted earnings (loss) from continuing
operations .13 (1.34)
Diluted earnings from discontinued
operations .01 .23
----------- -----------
Diluted earnings (loss) per share $ .14 $ (1.11)
=========== ===========
Dividends paid per common share $ -- $ --
=========== ===========
AMERICAN ECOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
($ in 000's except per share amounts)
March 31, 2004 December 31, 2003
---------------------------------
ASSETS
Current Assets:
Cash and cash equivalents $ 10,771 $ 6,674
Receivables, net 8,576 12,596
Income taxes receivable 52 2
Prepayments and other 861 1,049
Deferred income taxes 2,057 3,222
Assets held for sale or closure 735 938
------------- ----------------
Total current assets 23,052 24,481
Cash and investment securities,
pledged 131 170
Property and equipment, net 27,500 28,317
Facility development costs 6,478 6,478
Other assets 565 561
Deferred income taxes 5,062 5,062
Assets held for sale or closure 1,557 1,557
------------- ----------------
Total assets $ 64,345 $ 66,626
============= ================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long term
debt $ 1,474 $ 1,475
Accounts payable 1,605 1,678
Accrued liabilities 6,501 4,788
Accrued closure and post closure
obligation, current portion 1,828 1,828
Current liabilities of assets held
for sale or closure 928 1,907
------------- ----------------
Total current liabilities 12,336 11,676
Long term debt 3,835 4,200
Long term accrued liabilities 513 454
Accrued closure and post closure
obligation, excluding current
portion 9,405 9,296
Liabilities of assets held for sale
or closure, excluding current
portion 4,608 4,649
------------- ----------------
Total liabilities 30,697 30,275
------------- ----------------
Commitments and contingencies
Shareholders' equity:
Convertible preferred stock,
1,000,000 shares authorized
Common stock, $.01 par value,
50,000,000 authorized, 17,175,150
and 17,033,118 shares issued and
outstanding 172 170
Additional paid-in capital 49,681 54,824
Accumulated deficit (16,205) (18,643)
------------- ----------------
Total shareholders' equity 33,648 36,351
------------- ----------------
Total Liabilities and Shareholders'
Equity $ 64,345 $ 66,626
============= ================
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