American Ecology Second Quarter Operating Income up 41% to $3.8 Million; Sale of Oak Ridge and Tax Benefit Push Quarterly Net Income to $16.0 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:ECOL ECOL es.comp.os.linux.* (newsgroups) ECOL Emmanuel Church of Lakewood (San Francisco, CA) ), today announced financial results for the three and six months ending June 30, 2004. Second Quarter Results For the quarter ending June 30, 2004, the Company reported net income of $16.0 million or $0.90 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 $2.0 million or $0.11 per diluted share for the quarter ending June 30, 2003. The large increase in net income was primarily attributable to an $11.3 million tax benefit recognized during the quarter. 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 $2.7 million for the second quarter last year to $3.8 million for the second quarter this year. "The growth in quarterly operating income highlights the continued strength of our 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. operation and also reflects a significant increase in waste volumes shipped to our 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," Baumgardner stated, adding "American Ecology's business plan, built on increased waste 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. at our disposal facilities, expanded delivery of niche services and a lean overhead structure is working." Revenue during the second quarter of 2004 reached $13.8 million, a 15% increase over the $12.0 million reported for the same quarter last year. Significant increases in waste throughput at the Company's Idaho and Nevada disposal facilities were partially offset by lower average selling prices The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. at both facilities. For the quarter just ended, total waste volume increased 26% over the same quarter last year. Selling, General and Administrative expenses ("SG&A") dropped 22% to $2.6 million from the same period last year. SG&A as a percent of revenue also continued to improve, dropping to 19% of revenue in the second quarter of 2004, down from 27% of revenue in the second quarter of 2003. The reduction in SG&A primarily resulted from lower legal and administrative expenses. Higher revenue and lower spending produced operating income of $3.8 million, an increase of 41% over the $2.7 million in operating income posted in the second quarter of 2003. On June 30, 2004 the Company sold principally all of the assets of 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: 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 operation 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. to Toxco Inc. Toxco received all of the land, buildings, equipment and licenses of the facility and $1.65 million in cash. In exchange, Toxco assumed all environmental obligations, including the costs for future closure and decommissioning Decommissioning is a general term for a formal process to remove something from operational status. Some specific instances include:
Divisions of a business that have been sold or written off and that no longer are maintained by the business. . In addition, management believes it is now more likely than not that the Company will fully utilize its tax benefits, including net-operating loss carry-forwards. Consequently, the Company reversed the valuation allowance previously held against its deferred tax assets, generating a $11.3 million tax benefit in the quarter. "Our 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 and related transfer of liabilities completes American Ecology's successful campaign to exit all non-core businesses," President and Chief Executive Officer Stephen Romano noted, adding "Our energy and resources are now fully focused on our core waste treatment and disposal business." 6 Months Year-to-Date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. Revenue for the first six months of 2004 reached $27.7 million or 22% higher than the $22.8 million posted for the first six months of 2003. For the six months ending June 30, 2004, total waste volume was up 15% over the same six-month period last year. For the six months ending June 30, 2004 SG&A dropped 30% to $5.5 million. This $2.3 million reduction in SG&A over the same period last year was principally the result of $1.8 million of non-recurring legal expenses for 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 in 2003 and continued 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. . Consistent with second quarter results, higher revenue combined with lower spending generated first half operating income of $7.2 million compared to the $3.0 million reported in the first half of 2003. For the first half of 2004, the Company reported net income of $18.5 million or $1.04 per fully diluted share, compared to a net loss of $15.2 million or ($0.94) per diluted share for the same period last year. The large increase in net income was primarily attributable to an $11.3 million tax benefit recognized during the quarter. A series of one-time events in the first half of both years accounted for the large swing in reported net income. In the first half of 2003, the Company wrote off $21 million following an adverse trial court ruling in the Ward Valley damages claim, 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, municipal waste landfill, and expensed $2 million for the former Oak Ridge operation. As noted above, the Oak Ridge, Tennessee facility was sold in the second quarter of 2004, resulting in a $0.9 million gain and allowing management to reevaluate its tax assets and record a tax benefit of $11.3 million. "Aggressive execution of our business plan combined with a strong balance sheet positions American Ecology to continue generating solid cash flows and consistent earnings," Baumgardner concluded. Update on Texas Facility As previously reported, 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. treatment operations 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 were suspended sus·pend v. sus·pend·ed, sus·pend·ing, sus·pends v.tr. 1. To bar for a period from a privilege, office, or position, usually as a punishment: suspend a student from school. following a July 1, 2004 fire in the facility's permitted containment building A containment building, in its most common usage, is a steel or concrete structure enclosing a nuclear reactor. It is designed to, in any emergency, contain the escape of radiation despite pressures in the range of 60 to 200 psi ( 410 to 1400 kPa). . Treatment performed in the containment building represents approximately 50% of the Texas facility's year-to-date revenue. Direct disposal operations continue without 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. and generate the balance of the facility's revenue. While the Company is insured for property and equipment damage and business interruption, insurance deductibles, operational upgrades, loss of customers and an expected regulatory agency regulatory agency Independent government commission charged by the legislature with setting and enforcing standards for specific industries in the private sector. The concept was invented by the U.S. fine will negatively impact the Texas facility's second half financial performance. "While the precise costs of the fire and regulatory enforcement actions cannot yet be estimated, we are working hard to return the Texas treatment and containment building to service with expanded capabilities and address regulatory compliance matters as soon as practical." Romano stated, adding "This event does not alter our previous guidance of greater than 15% growth in operating income for 2004." Investor Call Company management will host an investor conference call on Wednesday, July 21 at 10:00 a.m. Mountain Time to discuss second quarter and year to date results, sale of its Oak Ridge assets and 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. Interested parties are invited to participate in the investor conference by calling 1-888-747-3446. About American Ecology 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, the Company is the oldest radioactive and hazardous waste 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 generate improved earnings, timely return the Texas treatment facility to service, or prevail in 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 Six Months Ended
June 30, June 30,
2004 2003 2004 2003
-------- ------- -------- --------
Revenue $ 13,795 $12,020 $ 27,700 $ 22,791
Direct operating costs 7,449 6,056 15,061 12,040
-------- ------- -------- --------
Gross profit 6,346 5,964 12,639 10,751
Selling, general and
administrative expenses 2,578 3,289 5,450 7,786
-------- ------- -------- --------
Operating income 3,768 2,675 7,189 2,965
Interest income 45 22 81 22
Interest expense 49 38 98 159
Loss on write off of Ward
Valley facility development
costs -- -- -- 20,951
Other income 20 93 65 93
-------- ------- -------- --------
Income (loss) before income tax
and discontinued operations 3,784 2,752 7,237 (18,030)
Income tax (benefit) expense (11,338) 63 (10,174) 55
-------- ------- -------- --------
Income (loss) before
discontinued operations 15,122 2,689 17,411 (18,085)
Gain from discontinued
operations - El Centro
Landfill -- 16 -- 4,960
Gain (Loss) from discontinued
operations - Oak Ridge
Facility 920 (692) 1,069 (2,029)
-------- ------- -------- --------
Net income (loss) 16,042 2,013 18,480 (15,154)
Preferred stock dividends -- -- -- 64
-------- ------- -------- --------
Net income (loss) available to
common shareholders $ 16,042 $ 2,013 $ 18,480 $(15,218)
======== ======= ======== ========
Basic earnings (loss) from
continuing operations .88 .16 1.02 (1.12)
Basic earnings (loss) from
discontinued operations .05 (.04) .06 .18
-------- ------- -------- --------
Basic earnings (loss) per share $ .93 $ .12 $ 1.08 $ (.94)
======== ======= ======== ========
Diluted earnings (loss) from
continuing operations .85 .15 .98 (1.12)
Diluted earnings (loss) from
discontinued operations .05 (.04) .06 .18
-------- ------- -------- --------
Diluted earnings (loss) per
share $ .90 $ .11 $ 1.04 $ (.94)
======== ======= ======== ========
Dividends paid per common share $ -- $ -- $ -- $ --
======== ======= ======== ========
AMERICAN ECOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
($ in 000's except per share amounts)
June 30, December 31,
2004 2003
------------- -------------
ASSETS
Current Assets:
Cash and cash equivalents $ 3,201 $ 6,674
Short term investments 6,398 --
Receivables, net 9,537 12,596
Prepaid income taxes 53 2
Prepayments and other 1,780 1,049
Deferred income taxes 2,229 3,222
Assets held for sale or closure -- 938
------------ ------------
Total current assets 23,198 24,481
Property and equipment, net 28,102 28,317
Facility development costs 6,478 6,478
Other assets 673 731
Prepaid income taxes 150 --
Deferred income taxes 16,226 5,062
Assets held for sale or closure -- 1,557
------------ ------------
Total assets $ 74,827 $ 66,626
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long term debt $ 1,455 $ 1,475
Accounts payable 2,022 1,678
Accrued liabilities 5,890 4,788
Accrued closure and post closure
obligation, current portion 1,828 1,828
Current liabilities of assets held for
sale or closure 398 1,907
------------ ------------
Total current liabilities 11,593 11,676
Long term debt 3,462 4,200
Long term accrued liabilities 502 454
Accrued closure and post closure
obligation, excluding current portion 9,428 9,296
Liabilities of assets held for sale or
closure, excluding current portion -- 4,649
------------ ------------
Total liabilities 24,985 30,275
------------ ------------
Commitments and contingencies
Shareholders' equity:
Convertible preferred stock, 1,000,000
shares authorized
Common stock, $.01 par value, 50,000,000
authorized, 17,212,218 and 17,033,118
shares issued and outstanding 172 170
Additional paid-in capital 49,833 54,824
Accumulated deficit (163) (18,643)
------------ ------------
Total shareholders' equity 49,842 36,351
------------ ------------
Total Liabilities and Shareholders' Equity $ 74,827 $ 66,626
============ ============
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