American Ecology Posts Solid Fourth Quarter Earnings of $3.1 Million; Strong Performance Marks Eighth Consecutive Quarter of Operating Profit.Business Editors BOISE, Idaho--(BUSINESS WIRE)--Feb. 17, 2004 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 financial results for the three and twelve months ending December 31, 2003. For the quarter ended December 31, 2003, the Company reported net income of $3.1 million or $0.17 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 $415 thousand or ($0.03) per diluted share for the fourth quarter of 2002. For the twelve months ending December 31, 2003, the Company reported a net loss of $8.6 million, or ($0.52) per share, reflecting 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 assets in the first quarter of 2003. This compared to net income of $18.8 or $1.15 per fully diluted share in 2002. 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 $9.7 million for 2003 compared to $8.9 million operating income posted in 2002. "The continuing, strong performance of our core disposal business demonstrates the Company's ability to grow operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. year to year." Baumgardner stated. "Net earnings for 2003 were adversely affected by a large one-time write-off in the first quarter, higher legal expenses, and significant expenditures 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. that we do not expect to recur in 2004," Baumgardner added. Fourth Quarter 2003 Revenue for the fourth quarter of 2003 increased 45%, reaching $16.9 million compared to the $11.7 million reported for the same quarter last year. A large soil remediation project shipped to 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 facility, and improved performance 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. , 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. and 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. disposal facilities accounted for the fourth quarter revenue increase. "Each of the Company's four disposal facilities closed the year with increasing revenue and a profitable quarter," Baumgardner noted. Quarterly gross profit increased 19%, reaching $5.9 million or 35% of revenue compared to gross profit of $4.9 million or 42% of revenue in the fourth quarter of 2002. The decline in gross margin reflects a larger percentage of quarterly revenue from low-margin transportation services on shipments to the Company's Idaho site. Selling, general & administrative expenses (SG&A) for the fourth quarter decreased to $2.7 million or 16% of revenue, compared to $4.2 million, or 36% of revenue in the same quarter last year. This decrease reflects reduced 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 and continuing efforts to reduce overhead. The combination of higher revenue, higher gross profit and lower SG&A allowed the Company to post an operating profit 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 $3.1 million, a 331% increase above the $730,000 operating profit posted for the same quarter last year. Twelve Months 2003 During 2003, revenue increased 22% to $57.0 million compared to $46.8 million for 2002. The increase in revenue was directly attributable to increases in disposal volume and revenue at the Company's Idaho disposal site. While down year over year, the Company's Robstown, Texas and Beatty, Nevada facilities each increased revenue during the last six months of 2003 over the first six months. 2003 gross profit reached $23.6 million or 41% of revenue compared to gross profit of $21.6 million or 46% of revenue for 2002. The decline in gross margin reflects a larger percentage of revenue from low-margin transportation services during the second half of 2003. For the year, SG&A increased to $13.8 million, or $1.2 million higher than in 2002. This increase was due to $1.8 million in first half expenses for litigation 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). damages claim, higher insurance premiums, and one-time costs of implementing centralized cen·tral·ize v. cen·tral·ized, cen·tral·iz·ing, cen·tral·iz·es v.tr. 1. To draw into or toward a center; consolidate. 2. accounting and information systems partially offset by cost control initiatives. As noted, for the year ending December 31, 2003, the Company reported operating income of $9.7 million, or 9% growth over the $8.9 million operating income posted in 2002. Large one-time events in the first half of both years produced large swings in reported net earnings. In 2002, the Company recognized a cumulative effect gain of $13.1 million to implement Financial Accounting Standard No. 143, a new accounting standard governing gov·ern v. gov·erned, gov·ern·ing, gov·erns v.tr. 1. To make and administer the public policy and affairs of; exercise sovereign authority in. 2. disposal site closure obligations. In 2003, the Company wrote off a $21 million deferred site development asset following an adverse trial court ruling in the Ward Valley litigation. In 2003, the Company also expensed $1.8 million in fees associated with the Ward Valley trial, expensed an additional $2.5 million for discontinued operations 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. , and posted a $5 million gain on the sale of its former 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, , Texas municipal waste landfill. Other Financial Information At December 31, 2003, the Company reported $6.7 million in cash on hand, $12.8 million of working capital, and a zero balance on its $8 million line of credit. During 2003, the Company retired all remaining preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. and reduced total liabilities by $10.9 million, eliminating $400,000 in annual dividends and decreasing annual interest expense by $554,000, respectively. "We exited 2003 financially stronger, more liquid and less leveraged than we have been in a decade," Baumgardner stated, concluding, "Management believes our strong financial condition and low cost structure provide us a significant competitive advantage." At the Company's discontinued operations in Oak Ridge, Tennessee, activities continue to prepare the site for sale. The Company completed radiation surveys following removal of all customer waste during the first half of the year and is actively marketing the facility's assets for resale resale n. selling again, particularly at retail. In many states a "resale license" or "resale number" is required so that the state can monitor the collection of sales tax on retail sales. RESALE. . "We made tremendous progress in 2003 cleaning up and preparing 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 for sale," stated President and Chief Executive Officer Stephen Romano, adding, "Final disposition of this 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. is a major objective." The Company previously entered a non-binding letter of intent with a potential Oak Ridge buyer that expired ex·pire v. ex·pired, ex·pir·ing, ex·pires v.intr. 1. To come to an end; terminate: My membership in the club has expired. 2. on December 5, 2003 without being exercised. Although no assurance can be given that the Company can be successful, the Company is in active discussions with third parties interested in acquiring the facility and its assets. "With our departure from non-core businesses, implementation of significantly improved centralized information and accounting systems and what we consider the best set of specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. treatment and disposal assets in the industry, we expect to deliver solid earnings growth and cash flow going forward," Romano commented, concluding "During 2004, the Company fully expects to exceed the 9% growth 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 achieved in 2003." Conference Call The Company's fourth quarter and full year 2003 investor conference call will be held Friday, February 20, 2004 at 10:00 am 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 1-888-747-3526. 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 meet its growth targets, generate continued or improved earnings, dispose of dis·pose v. dis·posed, dis·pos·ing, dis·pos·es v.tr. 1. To place or set in a particular order; arrange. 2. its Oak Ridge facility without incurring in·cur tr.v. in·curred, in·cur·ring, in·curs 1. To acquire or come into (something usually undesirable); sustain: incurred substantial losses during the stock market crash. 2. additional costs, or prevail in pending litigation. 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)
3 Months Ended Year Ended
Dec. 31 Dec. 31
------------------- -------------------
2003 2002 2003 2002
--------- --------- --------- ---------
Revenue $ 16,932 $ 11,712 $ 57,047 $ 46,789
Direct operating costs 11,056 6,790 33,479 25,223
-------- -------- -------- --------
Gross profit 5,876 4,922 23,568 21,566
Selling, general and
administrative expenses 2,731 4,192 13,819 12,631
-------- -------- -------- --------
Income from operations 3,145 730 9,749 8,935
Interest income 13 -- 347 31
Interest expense 47 94 266 820
Loss on write off of Ward
Valley facility development
costs -- -- 20,951 --
Other income (expense) 11 (267) 124 (557)
-------- -------- -------- --------
Income (loss) before income
tax, discontinued operations
and cumulative effect of
change in accounting
principle 3,122 369 (10,997) 7,589
Income tax expense (benefit) (1) (8,279) 72 (8,505)
-------- -------- -------- --------
Income (loss) before
discontinued operations and
cumulative effect of change
in accounting principle 3,123 8,648 (11,069) 16,094
Income (loss) from
discontinued operations (net
of tax of $0) ( 39) ( 9,063) 2,477 (10,464)
-------- -------- -------- --------
Income (loss) before
cumulative effect of change
in accounting principle 3,084 (415) (8,592) 5,630
Cumulative effect of change in
accounting principle (net of
tax of $0) -- -- -- 13,141
-------- -------- -------- --------
Net income (loss) 3,084 (415) (8,592) 18,771
Preferred stock dividends -- 99 64 398
-------- -------- -------- --------
Net income (loss) available to
common shareholders $ 3,084 $ (514) $ (8,656) $ 18,373
======== ======== ======== ========
Basic earnings (loss) per $ .18 $ (.03) $ (.52) $ 1.28
share ======== ======== ======== ========
Diluted earnings (loss) per
share $ .17 $ (.03) $ (.52) $ 1.15
======== ======== ======== ========
Dividends paid per common $ -- $ -- $ -- $ --
share ======== ======== ======== ========
AMERICAN ECOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS (Unaudited)
($ in 000's except per share amounts)
As of December 31,
2003 2002
--------- ---------
ASSETS
Current Assets:
Cash and cash equivalents $ 6,674 $ 135
Receivables, net 12,596 10,460
Income taxes receivable 2 740
Prepayments and other 1,049 498
Deferred income taxes 3,222 2,745
Assets held for sale or closure 938 10,722
-------- --------
Total current assets 24,481 25,300
Cash and investment securities, pledged 170 244
Property and equipment, net 28,317 26,998
Facility development costs 6,478 27,430
Other assets 561 129
Deferred income taxes 5,062 5,539
Assets held for sale or closure 1,557 1,485
-------- --------
Total Assets $ 66,626 $ 87,125
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long term debt $ 1,475 $ 1,985
Accounts payable 1,678 2,192
Accrued liabilities 4,968 4,166
Accrued closure and post closure obligation,
current portion 1,828 882
Income taxes payable -- 23
Current liabilities of assets held for sale or
closure 1,727 7,965
-------- --------
Total current liabilities 11,676 17,213
Long term debt 4,200 5,972
Long term accrued liabilities 454 2,372
Revolving line of credit -- 603
Accrued closure and post closure obligation,
excluding current portion 9,296 9,318
Liabilities of assets held for sale or closure,
excluding current portion 4,649 5,699
-------- --------
Total liabilities 30,275 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, 17,033,118 and 14,539,264 shares
issued and outstanding 170 145
Additional paid-in capital 54,824 55,789
Accumulated deficit (18,643) (9,987)
-------- --------
Total shareholders' equity 36,351 45,948
-------- --------
Total Liabilities and Shareholders' Equity $ 66,626 $ 87,125
======== ========
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