October
October 01, 2002 | October 16, 2002 | October 18, 2002 | October 24, 2002 |
October 28, 2002
Contact: Jim Baumgardner 208.331.8400
jbaumgardner@americanecology.com
AMERICAN ECOLOGY ANNOUNCES $1.0 MILLION 3rd QUARTER NET PROFIT
Core Waste Disposal Operations Generate $3.8 Million in Quarterly Operating IncomeBOISE, Idaho – Jim Baumgardner, Senior Vice President and Chief Financial Officer of American Ecology Corporation [NASDAQ: ECOL], today announced financial results for the quarter and nine months ending September 30, 2002. For the quarter ended September 30, 2002, the Company reported net income of $1.0 million, or $0.06 per fully diluted share. This compares to a net loss of $1.2 million, or $0.10 per share loss for the third quarter of 2001. Operating income for the third quarter of 2002 reached $944,000 compared to an operating loss of $928,000 for the same quarter last year, a $1.9 million improvement.
“Our core waste treatment and disposal operations continue to produce solid earnings despite difficult economic conditions, generating over $3.8 million in operating earnings during the quarter, ” Baumgardner commented, adding, “However, overall earnings continued to be negatively impacted by operating losses at the Company’s low-level radioactive waste processing facility in Oak Ridge, Tennessee.”
Consolidated revenue for the third quarter of 2002 reached $15.8 million, a 14% increase over consolidated revenue of $13.9 million reported for the third quarter of 2001. This quarterly increase in revenue reflects record throughput at the Company’s Grand View, Idaho disposal site and improved business at its Beatty, Nevada disposal facility, where revenue increased 33% and 16%, respectively, over the same quarter last year. The Company’s Field Services Division also contributed materially to the increased quarterly revenue.
“Our Idaho facility achieved its highest quarterly waste disposal volume since its acquisition in early 2001”, Baumgardner explained, adding “And our Beatty, Nevada facility posted a solid profit for the quarter, reversing negative trends that had emerged at Beatty early in the year.”
Revenue and earnings growth generated by the Company’s core waste treatment and disposal operations were materially offset by a $1.6 million operating loss for the quarter at the Company’s Oak Ridge Low Level Radioactive Waste (“LLRW”) processing facility. This significant loss for the quarter reversed a trend of improving financial performance by the facility in the first half of 2002.
On October 18, 2002, the Company announced it was marketing Oak Ridge subsidiary American Ecology Recycle Center, Inc. (“AERC”) for sale. AERC operates both the Oak Ridge LLRW processing facility and the Field Services business unit. “Significant resources continued to be devoted to removing non-revenue producing material from the site and preparing the Oak Ridge processing facility for sale,” Baumgardner stated.
For the nine months of 2002, net income reached $22.3 million or $1.39 per fully diluted share, compared to net income of $595,000 or $0.02 per diluted share for the corresponding period in 2001. Implementation of SFAS No. 143, a new accounting standard, during the first quarter of 2002 accounted for a one-time, cumulative effect gain of $16.3 million. Excluding the gain from this change in accounting standards, fully diluted net income from continuing operations reached $6.0 million or $0.36 per share for the nine months ending September 30, 2002. Operating income for the nine months of 2002 reached $6.9 million, substantially better than the $224,000 in operating income posted during the same nine months of 2001. Consolidated revenue for the nine months ending September 30, 2002 reached $50.9 million, a 25% increase over the $40.5 million reported for the same nine months of 2001.
“During 2002, we have felt the affects of a weaker national economy,” stated President and Chief Executive Officer Stephen Romano. “Despite this, American Ecology’s core waste treatment and disposal business has increased both revenue and earnings due primarily to increased business from long-term government contracts, and expansion of our customer base including several large private industry clean-up projects.”
For the three months ending September 30, 2002, Selling, General & Administrative expense (“SG&A”) decreased to $4.0 million, or 25% of revenue, compared to $5.5 million, or 40% of revenue in the same quarter of 2001. This 27% reduction in quarterly SG&A spending reflects overhead spending cuts made in previous quarters. For the nine months ending September 30, 2002, SG&A was $12.3 million or 24% of revenue, compared to the $14.5 million (36% of revenue) SG&A expense recorded in the corresponding period of 2001.
“Operational efficiency and overhead cost containment continue to be high priorities,” stated Romano, concluding, “While we expect continued profitability in the fourth quarter, the outlook for the fourth quarter is difficult to forecast in light of uncertainties regarding future disposition of the Oak Ridge business.”
The Company’s third quarter 2002 investor conference call will be held Monday, October 28, 2002 at 10:00 am Mountain Time. President and Chief Executive Officer Stephen Romano, Senior Vice-President and Chief Financial Officer James 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 1.877.679.9055. Participants will be asked to provide their name and affiliation.
American Ecology Corporation, through its subsidiaries, provides radioactive, PCB, hazardous, and non-hazardous waste services to commercial and government customers throughout the United States, 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, including statements regarding expected profitability, 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 future earnings, successfully market or reduce losses its Oak Ridge subsidiary, or prevail in any pending 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 and Quarterly Reports on Form 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 Nine Months Ended
September 30, September 30,
------------------ ------------------
2002 2001 2002 2001
-------- --------- -------- ---------
Revenue $15,774 $ 13,896 $50,932 $ 40,493
------- -------- ------- --------
Direct operating costs 10,848 9,326 31,789 25,775
------- -------- ------- --------
Gross profit 4,926 4,570 19,143 14,718
------- -------- ------- --------
Selling, general an
administrative expenses 3,982 5,498 12,261 14,494
------- -------- ------- --------
Income (loss) from operations 944 (928) 6,882 224
Investment income 7 24 23 231
Interest expense 227 294 751 898
Gain on a sale of assets 43 50 126 162
Other income (expense> 39 (34) (545) 990
------- -------- ------- --------
Net income (loss> before
income taxes 806 (1,182) 5,735 709
Income tax expense (benefit) (226) 30 (226) 114
------- -------- ------- --------
Net income (loss) before
cumulative effect of
accounting change 1,032 (1,212) 5,961 595
Cumulative effect of
accounting change -- -- 16,323 --
------- -------- ------- --------
Net income (loss) 1,032 (1,212) 22,284 595
Preferred stock dividends 100 99 297 295
------- -------- ------- --------
Net income (loss) available
to common shareholders $932 $(1,311) $21,987 $300
Basic earning from
continuing operations .06 (.10) .40 .02
Basic earning from
cumulative effect of
accounting change -- -- 1.14 --
------- -------- ------- --------
Basic earnings per share $ .06 $ (.10) $ 1.54 $ .02
Diluted earnings from
continuing operations .06 (.10) .36 .02
Diluted earnings from
cumulative effect of
accounting change -- -- 1.03 --
------- -------- ------- --------
Diluted earnings per share $ .06 $ (.10) $ 1.39 $ .02
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Dividends paid per
common share $ -- $ -- $ -- $ --
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Contact: Jim Baumgardner 208.331.8400
jbaumgardner@americanecology.com
AMERICAN ECOLOGY SECURES IDAHO INDUSTRIAL REVENUE BOND REFINANCING
$7.0 Million Wells Fargo Bank Term Loan Replaces Bond
BOISE, Idaho – Jim Baumgardner, Senior Vice President and Chief Financial Officer of American Ecology Corporation [NASDAQ: ECOL], today announced the Company has secured refinancing for a large part of the $8.5 million Industrial Revenue Bond for subsidiary US Ecology Idaho, Inc. that comes due on November 1, 2002. With funding scheduled for October 28, 2002, Wells Fargo Bank, N.A. has agreed to provide a senior, secured, $7.0 million fully amortizing term loan expiring in 2007. The Company will fund the remaining $1.5 million principal balance owing on the Bond from cash on hand.
“We are pleased that Wells Fargo, the Company’s long-time relationship bank, has strengthened its commitment to American Ecology by extending this new loan under favorable terms,” Baumgardner stated, adding, “We believe that securing this term loan, especially under present market conditions, is indicative of the Company’s improved financial condition.”
The Bond, which was assumed as part of the February 2001 acquisition of Envirosafe Services of Idaho, Inc. (now US Ecology Idaho), was issued in 1994 and bears an interest rate of 8.25%. The interest rate on the term loan is floating based on either Wells Fargo Bank’s prime rate or an offshore rate, at the Company’s election, plus a margin that is based on the Company’s financial performance. At Closing, the floating rates available to the Company ranged from approximately 4.1% to 4.9%.
In addition to the $7 million term loan, on October 15, 2002 the Company entered into an amendment of its existing line of credit agreement, also with Wells Fargo Bank, extending the credit facility to June 2004. The amendment improves the structure, terms and cost of the revolving credit facility, and reduces the maximum borrowing limit from $8.0 million to $6.0 million. The Company’s line of credit has not been utilized since April 2002.
“We believe this lower cost, more flexible line of credit, combined with the low cost term loan, will have a positive impact on the Company’s near-term financial performance and condition,” Baumgardner commented adding, “We also believe that this refinancing and the liquidity provided by the line of credit provide us with a firm foundation to continue growing the business and delivering shareholder value.”
The Company’s third quarter 2002 investor conference call will be held Monday, October 28, 2002 at 10:00 am Mountain Time. President and Chief Executive Officer Stephen Romano, Senior Vice-President and Chief Financial Officer James 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 1.877.679.9055. Participants will be asked to provide their name and affiliation.
American Ecology Corporation, through its subsidiaries, provides radioactive, PCB, hazardous, and non-hazardous waste services to commercial and government customers throughout the United States, 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, including statements about anticipated financing costs and the Company’s future financial performance, 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, secure additional financing, or that financing costs will not increase as interest rates increase or if the Company’s financial performance declines. 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 and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission.
Contact: Chad Hyslop 208.331.8400
chyslop@americanecology.com
AMERICAN ECOLOGY ANNOUNCES PLANS TO SELL OAK RIDGE, TENNESSEE SUBSIDIARY
Company To Focus on Expanding Its Core Waste Treatment and Disposal Business
BOISE, Idaho – Stephen Romano, President and Chief Executive Officer of American Ecology Corporation [NASDAQ: ECOL], today announced that subsidiary American Ecology Recycle Center, Inc. ("AERC") is being offered for sale. AERC provides low-level radioactive waste processing and environmental remediation services to government and industry.
"American Ecology’s profitable, core business is the safe management of hazardous, PCB and radioactive wastes at our strategically located disposal sites in Idaho, Nevada, Texas and Washington," Romano explained, adding "Our Oak Ridge processing plant does not fit into our business model since the majority of wastes processed by AERC are not eligible for burial at our disposal facilities."
AERC provides low-level radioactive waste survey, decontamination and volume reduction services, primarily to electric utility companies, at a state permitted facility in Oak Ridge, Tennessee. Field Services, a separate AERC business unit, utilizes a mobile permit to deliver building decontamination and demolition, site characterization and waste removal services at sites nationwide.
A series of initiatives were undertaken in the past year to prepare AERC for prospective sale. "American Ecology has committed significant time and resources to removing large volumes of legacy waste and other contaminated materials from our Oak Ridge site over the past year," Romano commented, adding, "We also resolved a long-standing Department of Justice investigation, entered a new collective bargaining agreement with our union, purchased an adjacent rail siding to increase transportation efficiency, and significantly expanded AERC’s profitable Field Services business."
The Company indicated that financial, regulatory and other information on the two AERC business units was being provided on a confidential basis to a number of prospective buyers, and that expressions of interest were being accepted from other qualified parties.
This marketing initiative is in response to a fundamental 'business model' issue and does not reflect any lack of effort by our dedicated and hardworking Oak Ridge employees," Romano emphasized. "In fact, were it not for the substantial site improvements achieved by our Oak Ridge team this past year, we would probably not be in a position today to attract qualified buyers."
The AERC offering will be discussed during the Company’s third quarter 2002 investor conference call on Monday, October 28, 2002 at 10:00 am Mountain Time. Romano, Chief Financial Officer James 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 1.877.679.9055. Participants will be asked to provide their name and affiliation.
American Ecology Corporation, through its subsidiaries, provides radioactive, PCB, hazardous, and non-hazardous waste services to commercial and government customers throughout the United States, 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 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, or conclude an agreement for the sale of subsidiary American Ecology Recycle Center, Inc. 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 and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission.
Contact: Chad Hyslop 208.331.8400
chyslop@americanecology.com
AMERICAN ECOLOGY ANNOUNCES THIRD QUARTER 2002 INVESTOR CONFERENCE CALL
Interested Parties Invited to Call in on Monday, October 28, 2002 at 10:00 am Mountain Time
BOISE, Idaho –American Ecology Corporation [NASDAQ: ECOL], today announced that the Company’s third quarter 2002 investor conference call will be held Monday, October 28, 2002 at 10:00 am Mountain Time. Chief Executive Officer Stephen Romano, Chief Financial Officer James Baumgardner, and Corporate Controller Michael Gilberg will present third quarter financial results, discuss operations and respond to questions. Interested parties may submit questions in advance to info@americanecology.com, or by facsimile to 208.331.7900. Questions will also be invited after the presentations. 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, PCB, hazardous, and non-hazardous waste services to commercial and government customers throughout the United States, 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.
Contact: Chad Hyslop 208.331.8400
chyslop@americanecology.com
COURT RULES AGAINST NEBRASKA IN RADIOACTIVE WASTE LAWSUIT, AMERICAN ECOLOGY TO PURSUE $12.2 MILLION IN DAMAGES
Nebraska Ordered to Pay Total of $151 Million
American Ecology Corporation (NASDAQ:ECOL) today announced that on September 30th, U.S. District Court Judge Richard G. Kopf entered judgment in favor of the Central Interstate Low-Level Radioactive Waste Commission ("CIC") against the State of Nebraska for $151,408,240 plus post-judgment interest in a lawsuit involving American Ecology subsidiary US Ecology, Inc. and three electric utility companies. The ruling followed closely on the heels of a two month trial that concluded in August, 2002.
The Court found that Nebraska breached its good faith obligation to the CIC when processing a license application for a proposed low-level radioactive waste disposal facility in Nebraska. US Ecology submitted the license application as the CIC's contractor and developer. "Governor Nelson, either directly or though his subordinates, influenced the process in order to fulfill a campaign promise which required that the license be denied without regard to the technical merits," Judge Kopf declared in a lengthy Memorandum and Order accompanying the judgment, adding, “Frankly, I cannot conceive of a stronger case of bad faith in the performance of a contract".
"We are pleased with the Court's expeditious ruling, and its well documented findings that Nebraska officials acted improperly in processing our license application," stated American Ecology President and Chief Executive Officer Stephen Romano.
As part of its damages determination, the Memorandum and Order found that US Ecology contributed $6,247,920 to the Commission in the form of work intended to achieve a license. "The Commission lost the entire value of these contributions as a direct result of Nebraska’s bad faith conduct” the Court concluded. Adding simple interest from the time of the Company’s equity contributions up to the time of the ruling, the Court identified total US Ecology damages of $12,260,460.
Today, counsel for Nebraska filed a motion to stay the judgment pending appeal. "We believe the case against Nebraska is strong, and we will remain closely involved in the appeals process to protect the interests of our shareholders," Romano concluded.
US Ecology submitted its application to construct and operate the proposed Butte, Nebraska disposal site in 1990. In December of 1998, the State of Nebraska denied the license. Four electric utility companies that substantially funded the project sued Nebraska alleging bad faith. One of the utilities subsequently withdrew. The CIC was originally joined in the suit as a defendant, but was later realigned as a plaintiff. US Ecology intervened to recover its contributions to the project. Prior to trial, Nebraska unsuccessfully pursued a series of motions to dismiss the case.
A full copy of the Court's ruling is available at www.ned.uscourts.gov.
American Ecology Corporation, through its subsidiaries, provides radioactive, PCB, hazardous and non-hazardous waste services to commercial and government customers throughout the United States, 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 that are based on our current expectations, beliefs, and assumptions about legal and other matters that could materially impact American Ecology Corporation and its subsidiaries. Actual results or outcomes may differ materially from what is expressed herein and no assurance can be given that the Company will ultimately prevail in this or any lawsuit or recover any damages. For additional information on factors that could cause actual results to differ from expectations, please refer to American Ecology Corporation’s Report on Form 10-K and its most recent Form 10-Q filed with the Securities and Exchange Commission.