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February February 5, 2004 | February 17, 2004 | February 18, 2004 | February 19, 2004
February 5, 2004 AMERICAN ECOLOGY ANNOUNCES EARNINGS RELEASE, FOURTH QUARTER 2003 INVESTOR CONFERENCE CALL Earnings Release Scheduled February 17, 2004; On the conference call Friday, February 20 at 10:00 am Mountain Time, Chief Executive Officer Stephen Romano, Chief Financial Officer James Baumgardner, and Corporate Controller Michael Gilberg will present fourth 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 888.747.3526. 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, American Ecology is the oldest radioactive and hazardous waste services company in the United States.
February 17, 2004 AMERICAN ECOLOGY POSTS SOLID FOURTH QUARTER EARNINGS OF $3.1 MILLION Strong Performance Marks Eighth Consecutive Quarter of Operating Profit “The continuing, strong performance of our core disposal business demonstrates the Company’s ability to grow operating profit 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 that we do not expect to recur in 2004,” Baumgardner added. Fourth Quarter 2003 “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 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 of $3.1 million, a 331% increase above the $730,000 operating profit posted for the same quarter last year. Twelve Months 2003 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 damages claim, higher insurance premiums, and one-time costs of implementing centralized 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 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, and posted a $5 million gain on the sale of its former El Centro, Texas municipal waste landfill. Other Financial Information “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. “We made tremendous progress in 2003 cleaning up and preparing the Oak Ridge facility for sale,” stated President and Chief Executive Officer Stephen Romano, adding, “Final disposition of this discontinued operation is a major objective.” The Company previously entered a non-binding letter of intent with a potential Oak Ridge buyer that expired 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 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 achieved in 2003.” Conference Call 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 meet its growth targets, generate continued or improved earnings, dispose of its Oak Ridge facility without incurring 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 and Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission. CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) ($ in 000’s except per share amounts)
AMERICAN ECOLOGY
CORPORATION CONSOLIDATED BALANCE SHEETS (Unaudited) ($ in 000’s except per share amounts) As of December 31,
February 18, 2004 AMERICAN ECOLOGY REDEEMS COMMON STOCK WARRANT FOR $5.5 MILLION; Company Pays $4.07 per Underlying Common Share Redeemed The redemption eliminated the sole outstanding warrant to acquire shares of the Company's common stock. Issued in November 1998, with a strike price of $1.50 per share, the warrant was a key element of a multi-part settlement with the Company's prior bank. "Elimination of this warrant's potentially dilutive overhang is a continuation of our long term strategy to increase earnings per share." Baumgardner stated, adding, "We were pleased to close the transaction at a discount from where the stock has recently traded with essentially no transaction costs." The terms of the transaction required the warrant holder to surrender its warrant in exchange for $5.5 million in cash paid at closing. Following the transaction, the Company reported more than $7 million of cash on hand and access to an $8 million line of credit with its primary bank. "American Ecology took advantage of a unique opportunity to invest in itself at a substantial discount to market," Baumgardner stated, concluding, "The Company continues to possess sufficient financial wherewithal to fund future business operations and grow earnings." On February 17, 2004 the Company's common stock, which is traded on the NASDAQ Stock Market under the stock symbol ECOL, closed at $6.99. Conference Call 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 meet its growth targets, generate continued or improved earnings, dispose of its Oak Ridge facility without incurring 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 and Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission.
February 19, 2004 U.S. COURT OF APPEALS FOR EIGHTH CIRCUIT AFFIRMS JUDGMENT AGAINST NEBRASKA IN LOW-LEVEL RADIOACTIVE WASTE LAWSUIT American Ecology Subsidiary’s Portion of Judgment $12.3 Million The Court of Appeals opinion concludes that the District Court did not err in finding that Nebraska breached its good faith obligation to the CIC, or in striking Nebraska’s demand for a jury trial, fashioning monetary relief, in its award of damages and interest, or in any other respect relevant to Nebraska’s appeal. The Court of Appeals upheld the District Court damages judgment in the amount of $151,408,240 including prejudgment interest. Of this amount, the Court of Appeals identified US Ecology credits of $6.2 million and upheld prejudgment interest. The District Court set US Ecology’s prejudgment interest at $6.1 million. “We are very pleased with the U.S. Court of Appeals’ judgment, which affirms the District Court judgment in its entirety,” Romano stated, concluding “The Company intends to move forward in coordination with the other plaintiffs to assert its interests in this matter.” US Ecology submitted its application to construct and operate the proposed Butte, Nebraska LLRW disposal facility 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. A copy of the February 18, 2004 opinion and judgment is available online at: http://www.ca8.uscourts.gov/opndir/04/02/023747P.pdf.. Conference Call 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, 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 U.S. Court of Appeals will not be reversed on further appeal, or that the Company will ultimately recover any damages in the case. For this and other 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. |
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