October
October 3, 2005 | October 18, 2005 | October 27, 2005
October 3, 2005
Contact: Chad Hyslop 208.331.8400
chyslop@americanecology.com
AMERICAN ECOLOGY ANNOUNCES $0.15 PER SHARE QUARTERLY DIVIDEND
Third Quarter Results To Be Released October 18, 2005
BOISE, Idaho, October 3, 2005 – American Ecology Corporation [NASDAQ:ECOL] today announced that shareholders of record October 3, 2005 will receive a $0.15 per common share dividend paid on October 15, 2005.
The Company paid a $0.15 per share dividend in July 2005, and a $0.25 per share dividend in October 2004. The Company presently intends that shareholders of record on January 2, 2006 will also receive a $0.15 per share dividend.
On September 30, 2005 the Company reported approximately 17,636,000 common shares outstanding. The Company estimates that approximately $2.6 million in cash will be paid out for the declared quarterly dividend. At June 30, 2005 the Company reported $13.1 million in cash and short-term investments on hand. On August 2, 2005 the Company reported that it had received $11.8 million in litigation settlement proceeds.
Third Quarter Results
The Company will announce financial results for the quarter ending September 30, 2005 after the stock market closes on Tuesday, October 18, 2005. Management will host an investor conference call on Wednesday, October 19, 2005 at 10 a.m. mountain time to discuss the financial results for the quarter and the dividend. Chief Executive Officer Stephen Romano, Chief Financial Officer James Baumgardner, Vice President of Sales and Marketing Steve Welling, and Controller Michael Gilberg will also discuss operations and answer questions during the call. Interested parties may send questions in advance to info@americanecology.com, or by facsimile to 208.331.7900. Questions will also be invited during the call following management presentations. To join the call, dial 877.331.8343. 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, refineries and chemical manufacturing facilities. Headquartered in Boise, Idaho, American Ecology is the oldest radioactive and hazardous waste services company in the United States.
This press release contains forward-looking statements that are based on management’s 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 will successfully implement its growth plan or declare or pay future quarterly dividends. While the Company intends to pay quarterly dividends, payment of any future dividend is contingent upon the Company’s continued compliance with all terms and conditions of the Amended and Restated Credit Agreement with its primary bank. No assurance can be given that the Company will continue to comply with this Agreement in order to pay dividends in future periods. 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.
October 18, 2005
Contact: Chad Hyslop 208.331.8400
chyslop@americanecology.com
AMERICAN ECOLOGY THIRD QUARTER OPERATING INCOME INCREASES TO $6.9 MILLION, UP 168 PERCENT
Quarterly Revenue Increases 92 Percent on Higher Waste Receipts
BOISE, Idaho October 18, 2005 – American Ecology Corporation [NASDAQ: ECOL] today reported net income of $7.7 million or $0.43 per fully diluted share for the quarter ended September 30, 2005, compared to net income of $1.7 million or $0.10 per fully diluted share a year ago. Included in third quarter results is a $5.3 million pre-tax gain in other income associated with litigation settlement proceeds. Operating income for the quarter increased to $6.9 million, a 168 percent increase over the $2.6 million in operating income posted in the third quarter of 2004.
Third Quarter Results
Revenue for the third quarter increased to $24.8 million, an $11.9 million or 92 percent increase from the $12.9 million in revenue recognized a year ago. The increase in revenue reflects a 71 percent increase in disposal volume and slightly lower average selling price. Revenue and volume increased at all four of the Company’s operating disposal sites over the same quarter last year. The Company’s Idaho disposal site delivered the largest increase, posting a 95 percent increase in quarterly disposal volume and an 80 percent increase in disposal revenue.
“During the third quarter American Ecology continued to grow, receiving and disposing record waste volumes,” stated Stephen Romano, President and Chief Executive Officer, adding “Our focused, high-volume, low-overhead strategy is working. We are securing large clean-up jobs, continuing to provide quality service, and retaining key customers.”
Increased waste volumes reflect a combination of ongoing base business, a strong spring-summer clean-up project season, initiation of the Honeywell project and receipt of waste shipments from several large clean-up projects that were delayed in late 2004 and early 2005 by weather and other factors outside the Company’s control. Waste shipments under bundled rail transportation and disposal contracts continued to result in high utilization of the Company’s railcar assets, further contributing to the increased quarterly profitability.
Higher revenue was slightly offset by higher transportation and other direct costs. However, the Company still increased gross profit from $5.5 million, or 43 percent of revenue, in the third quarter of 2004 to $10.0 million, or 40 percent of revenue in the third quarter of 2005.
In dollars, selling, general & administrative expenses (SG&A) for the third quarter increased slightly to $3.1 million compared to SG&A of $3.0 million in the third quarter of 2004. However, SG&A dropped to 13 percent of revenue from 23 percent of revenue in the same quarter last year.
The substantially increased disposal revenue drove operating income to $6.9 million, $4.3 million higher than the $2.6 million of operating income posted in the third quarter of 2004.
Increased waste volumes combined with a favorable service mix and controlled spending were again key drivers in the Company’s financial results for the quarter.
“High volume throughput and the largely fixed cost nature of the disposal business drove our revenue and earnings growth,” stated Senior Vice President and Chief Financial Officer Jim Baumgardner, adding “All four of American Ecology’s operating disposal sites were profitable for the quarter and delivered improved results over the same quarter last year.”
During the quarter, the Company received an $11.8 million payment from the Central Interstate Low-Level Radioactive Waste Compact. This payment fully resolved the Company’s claim on proceeds from a settled lawsuit brought against the State of Nebraska for bad faith in the licensing process for a formerly proposed low-level radioactive waste disposal facility near Butte, Nebraska. The Company had previously recognized a $6.5 million deferred asset for its investment in the Nebraska project. Consequently, a pre-tax gain of $5.3 million was recognized in the third quarter as Other Income.
For the quarter just ended, the Company reported after-tax net income of $7.7 million, or $0.43 per fully diluted share, compared to after-tax net income of $1.7 million, or $0.10 per fully diluted share a year ago.
Year-to-Date Results
Revenue for the nine months ended September 30, 2005 reached $56.1 million, up $15.5 million or 38 percent over the first nine months of 2004. Waste receipts year-to-date increased 33 percent over 2004, and have already exceeded total 2004 waste receipts. The volume-driven increase in revenue was partially offset by higher costs, including underutilized transportation assets in the first quarter of 2005, and certain volume-related variable costs in the second and third quarters. However, growth in revenue at all four operating disposal facilities produced operating income of $14.1 million, 44 percent higher than the $9.8 million of operating income posted for the first nine months last year.
For the first nine months of 2005, the Company reported net income of $12.3 million, or $0.68 per fully diluted share, compared to net income of $20.2 million, or $1.14 per fully diluted share for the first nine months of 2004. Financial results for the first nine months of 2004 were positively affected by a $920,000 one time gain on the sale of the Company’s former Oak Ridge, Tennessee processing business and an $11.3 million release of a valuation allowance for deferred tax assets.
At September 30, 2005 the Company reported $23.8 million in cash and investments on hand. At quarter-end, working capital was $33.3 million, up from $19.3 million at the end of the previous quarter.
Outlook
“Management expects to exceed its target of 15 percent annual growth in operating income in 2005,” Romano noted, concluding, “While we expect a solid fourth quarter, we have now received and disposed of much of the waste from previously delayed clean-up projects.”
Other Updates
American Ecology Corporation declared a $0.15 per common share quarterly dividend for stockholders of record on October 3, 2005. The Company paid $2.6 million for the declared quarterly dividend on October 14, 2005. The Company presently intends that shareholders of record on January 2, 2006 will also receive a $0.15 per share dividend subject to ongoing compliance with applicable bank covenants.
Management will host an investor conference call on Wednesday, October 19, 2005 at 10 a.m. mountain time to discuss financial results for the quarter. Chief Executive Officer Stephen Romano, Chief Financial Officer James Baumgardner, Vice President of Sales and Marketing Steve Welling, and Controller Michael Gilberg will present information and answer questions during the call. Interested parties may send questions in advance to info@americanecology.com, or by facsimile to 208.331.7900. Questions will also be invited during the call following presentations. To join the call, dial 877.331.8343. 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, refineries and chemical manufacturing facilities. Headquartered in Boise, Idaho, American Ecology is the oldest radioactive and hazardous waste services company in the United States, having operated for more than fifty years.
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 will meet or exceed its 2005 earnings estimates, receive projected waste shipments, continue to increase earnings through the bundling of transportation and disposal services, collect on pending insurance claims, or declare or pay future dividends. 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 and Quarterly Report 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,
2005 2004 2005 2004
------- ------- ------- -------
Revenue $24,791 $12,929 $56,124 $40,629
Direct operating costs 14,822 7,396 33,094 22,457
------- ------- ------- -------
Gross profit 9,969 5,533 23,030 18,172
Selling, general and
administrative expenses 3,103 2,967 8,975 8,417
Business interruption insurance
claim -- -- (41) --
------- ------- ------- -------
Operating income 6,866 2,566 14,096 9,755
Interest income 164 52 342 133
Interest expense 45 48 140 146
Gain on settlement of Nebraska
litigation 5,327 -- 5,327 --
Other income (loss) (31) 9 8 74
------- ------- ------- -------
Income before income tax and
discontinued operations 12,281 2,579 19,633 9,816
Income tax (benefit) expense 4,545 884 7,335 (9,290)
------- ------- ------- -------
Income before discontinued
operations 7,736 1,695 12,298 19,106
Gain (loss) from discontinued
operations - Oak Ridge Facility -- (1) -- 1,068
------- ------- ------- -------
Net income $ 7,736 $ 1,694 $12,298 $20,174
======= ======= ======= =======
Basic earnings from continuing
operations .44 .10 .70 1.12
Basic earnings from discontinued
operations -- .00 -- .06
------- ------- ------- -------
Basic earnings per share $ .44 $ .10 $ .70 $ 1.18
======= ======= ======= =======
Diluted earnings from continuing
operations .43 .10 .68 1.08
Diluted earnings from
discontinued operations -- .00 -- .06
------- ------- ------- -------
Diluted earnings per share $ .43 $ .10 $ .68 $ 1.14
======= ======= ======= =======
Dividends paid per common share $ .15 $ -- $ .15 $ --
======= ======= ======= =======
AMERICAN ECOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
($ in 000's except per share amounts)
September 30, December 31,
2005 2004
-------------- ------------
ASSETS
Current Assets:
Cash and cash equivalents $ 2,808 $ 2,160
Short term investments 20,971 10,967
Receivables, net 15,866 8,963
Insurance receivable 636 1,285
Prepayments and other 2,311 1,469
Deferred income taxes 5,613 5,613
------- -------
Total current assets 48,205 30,457
Property and equipment, net 35,274 27,363
Facility development costs -- 6,478
Other assets 956 462
Deferred income taxes 6,595 12,473
------- -------
Total assets $91,030 $77,233
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long term debt $ 1,460 $ 1,457
Accounts payable 3,385 3,022
Deferred revenue 1,684 724
State burial fees payable 1,698 1,446
Management incentive plan payable 995 934
Customer advances 1,784 --
Customer refunds 657 2,512
Accrued liabilities 1,690 725
Accrued closure and post closure
obligation, current portion 1,577 2,323
------- -------
Total current liabilities 14,930 13,143
Long term debt 1,638 2,734
Long term customer advances 1,574 --
Long term accrued liabilities 498 441
Accrued closure and post closure
obligation, excluding current portion 9,421 9,304
------- -------
Total liabilities 28,061 25,622
------- -------
Commitments and contingencies
Shareholders' equity:
Convertible preferred stock, 1,000,000
shares authorized, Common stock,
$.01 par value, 50,000,000 authorized,
17,635,919 and 17,398,494 shares issued
and outstanding 176 174
Additional paid-in capital 52,718 51,015
Retained earnings 10,075 422
------- -------
Total shareholders' equity 62,969 51,611
------- -------
Total Liabilities and Shareholders' Equity $91,030 $77,233
======= =======
AMERICAN ECOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, $ in 000's)
Nine Months Ended
September 30,
------------------
2005 2004
-------- -------
Cash flows from operating activities:
Net income $ 12,298 $20,174
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, amortization, and accretion 4,851 4,508
Gain on settlement of Nebraska litigation (5,327) --
Income from discontinued operations -- (1,068)
Income tax benefit on exercise of stock options 654 --
Deferred tax asset 5,878 (9,323)
Stock compensation 180 --
Changes in assets and liabilities:
Receivables (6,903) 4,268
Other assets (1,398) (152)
Closure and post closure obligation (1,440) (773)
Income taxes payable/receivable -- (226)
Accounts payable and accrued liabilities 4,161 2,016
-------- -------
Net cash provided by operating activities 12,954 19,424
Cash flows from investing activities:
Capital expenditures (12,118) (2,964)
Proceeds from sale of assets 878 116
Proceeds from settlement of Nebraska litigation 11,805 --
Transfers from cash to short term investments,
net (10,004) (4,989)
-------- -------
Net cash used by investing activities (9,439) (7,837)
Cash flows from financing activities:
Payments of indebtedness (1,093) (1,120)
Retirement of common stock warrants -- (5,500)
Dividends paid (2,645) --
Stock options exercised 871 996
-------- -------
Net cash provided (used) by financing
activities (2,867) (5,624)
-------- -------
Increase in cash and cash equivalents 648 5,963
Net cash used in discontinued operations -- (2,925)
Cash and cash equivalents at beginning of period 2,160 6,674
-------- -------
Cash and cash equivalents at end of period $ 2,808 $ 9,712
======== =======
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest $ 140 $ 146
Income taxes paid 804 274
Non-cash investing and financing activities:
Common stock dividends accrued -- 4,345
Common stock issued for director compensation 180 --
October 27, 2005
Contact: Chad Hyslop 208.331.8400
chyslop@americanecology.com
AMERICAN ECOLOGY ANNOUNCES WASTE SHIPMENTS DELAYED AT NEW JERSEY SITE
Shipments Expected to Resume In 3 Months or Less
BOISE, Idaho, October 27, 2005 – Stephen Romano, President and Chief Executive Officer of American Ecology Corporation [NASDAQ:ECOL] today announced that waste shipments under the Company’s transport, treatment and disposal contract with Honeywell International Inc. for a site in Jersey City, New Jersey have been delayed.
Honeywell recently notified the Company that waste excavation associated with construction of a subsurface barrier wall surrounding the site is complete. Material from this initial excavation phase has been shipped off-site for disposal. Honeywell further notified the Company that shipments from the main, multi-year excavation would be delayed for up to 90 days, although shipments could resume earlier.
"Like other large remedial projects, the pace and timing of on-site excavation work and the availability of waste for shipment to American Ecology are beyond our control,” stated Romano, adding, “Our contract with Honeywell remains in full effect and we look forward to receiving substantially all of the waste removed from the Jersey City site once the main excavation resumes.”
American Ecology will assess Honeywell certain fees for not meeting minimum weekly shipment requirements as provided for under the Contract. The Company will also pay certain fees to its New Jersey subcontractor. Management is presently working with Honeywell and its subcontractors to minimize delay costs.
Awarded in June 2005, the contract commits Honeywell to provide American Ecology 99% of the chromite ore processing residues removed from the site during the upcoming main excavation phase.
Total waste volumes at the site have been estimated at approximately one million tons. On October 6, 2005 Honeywell filed a motion in U.S. District Court, District of New Jersey to reduce the amount of material removed from the site by 53%. The motion is presently under judicial review.
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 has disposal facilities in Idaho, Nevada, Washington and Texas, and is the oldest radioactive and hazardous waste services company in the United States.
This press release contains forward-looking statements that are based on management’s 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. No assurance can be given that Honeywell will timely resume off-site shipments, ship volumes originally projected, or that the fees being assessed will cover all project delay costs. Nor can the Company provide assurances it will satisfactorily perform under the terms of the contract, meet its profitability objectives for the project, or successfully execute its overall business plan going forward. 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.