February
February 21, 2006 | February 17, 2006 | February 7, 2006
February 21, 2006
Contact: Alison Ziegler, Cameron Associates 212.554.5469
alison@cameronassoc.com
AMERICAN ECOLOGY ANNOUNCES 2006 DIVIDEND PLANS AND DIRECTOR SLATE
Company Also Provides Update on Chief Financial Officer Succession Plan
BOISE, Idaho, February 21, 2006 – American Ecology Corporation [NASDAQ:ECOL] today announced that the Company intends to pay a $0.15 per common share quarterly dividend in 2006. The next quarterly dividend is expected to be paid on April 21, 2006 to stockholders of record on April 14, 2006.
"Management and the Board of Directors are confident that American Ecology can continue to deliver earnings growth and pay this quarterly dividend in 2006," stated Stephen Romano, American Ecology Chief Executive Officer and Director. "Our free cash flow is sufficient to fund the dividend while also funding all currently planned capital projects and ongoing growth initiatives," Romano noted.
The Company intends that shareholders of record on July 14, 2006 and October 13, 2006 will also receive a $0.15 per share dividend.
At December 31, 2005 the Company reported 17,742,420 shares outstanding and $19.9 million in cash and short-term investments on hand. The Company estimates that approximately $2.7 million in cash will be paid out for each declared quarterly dividend.
Director Slate Announced
Seven members of the current Board of Directors will stand for re-election at the annual shareholders meeting in Chicago, Illinois on May 25, 2006. The slate, to be presented in the Company’s forthcoming proxy statement, will include Edward F. Heil, Roy C. Eliff, Kenneth C. Leung, Richard Riazzi, Jimmy D. Ross, Richard T. Swope and Romano. Current Director Rotchford L. Barker has decided not to stand for re-election.
Chief Financial Officer Succession Plan
On February 17, 2006 the Company announced the resignation of Senior Vice President and Chief Financial Officer Jim Baumgardner effective March 24, 2006. Romano, in coordination with the Chairman of the Board’s Audit Committee, will bring a recommendation to the Board for the position consistent with a Board-adopted executive succession plan.
“American Ecology is in a different, much better position than when Jim Baumgardner joined the Company six years ago,” Romano commented, adding “We are approaching this succession process in a disciplined, organized manner based on the Company’s present strengths, needs and strategic objectives.”
Outlook
Management today reaffirms the Company’s previous earnings per share outlook of $0.72 to $0.82 per fully diluted share in 2006.
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 management’s current expectations, beliefs, plans, 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. 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, and the Board of Director’s approval of any such dividend declaration or payment. No assurance can be given that the Company will timely locate a successor Chief Financial Officer, successfully implement its business plan, meet its earnings guidance, generate future earnings, increase its cash flow, comply with its bank covenants 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 Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission.
February 17, 2006
Contact: Alison Ziegler, Cameron Associates 212.554.5469
alison@cameronassoc.com
AMERICAN ECOLOGY ANNOUNCES RESIGNATION OF CHIEF FINANCIAL OFFICER
Orderly Transition Underway Based on Existing Succession Plan
BOISE, Idaho, February 17, 2006 – American Ecology Corporation [NASDAQ: ECOL], today announced that Senior Vice President and Chief Financial Officer Jim Baumgardner has resigned to accept the position of Senior Vice President and Chief Financial Officer with SECOR International Inc., a national environmental engineering and consulting firm headquartered in Redmond, Washington.
Baumgardner will stay with American Ecology through March 24, 2006 to help ensure an orderly transition of his current duties. In keeping with an executive succession plan previously adopted by the Company’s Board of Directors, Vice President and Controller Michael Gilberg will be designated the Company’s principal accounting officer.
“During his six years with American Ecology Jim made a huge contribution to the Company’s successful turnaround effort and its subsequent outstanding financial performance,” commented American Ecology President and Chief Executive Officer Stephen Romano.
For 2005, American Ecology posted $19.4 million in income from operations, its strongest financial performance since becoming an independent public company twenty two years ago. Management also today reaffirms its 2006 guidance calling for the Company to generate net earnings between $0.72 and $0.82 per fully diluted share.
“While Jim will be missed, we have a solid organization, excellent business systems, an experienced senior management team, and a proven growth strategy,” Romano added, concluding “The American Ecology team looks forward to another strong year in 2006."
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.
This press release contains forward-looking statements that are based on our current expectations, beliefs, estimates and assumptions about American Ecology Corporation’s industry, markets and circumstances. Actual results may differ materially from what is expressed herein and no assurance can be given that the company will timely locate a successor Chief Financial Officer, successfully implement its business plan, meet its earnings guidance, generate future earnings or increase cash flow. For 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 most recent Form 10-Q filed with the Securities and Exchange Commission.
February 7, 2006
Contact: Alison Ziegler, Cameron Associates 212.554.5469
alison@cameronassoc.com
AMERICAN ECOLOGY REPORTS 2005 REVENUE AND OPERATING INCOME THE HIGHEST IN COMPANY HISTORY
Strong Fourth Quarter Generates 57 Percent Increase in Operating Income Over Fourth Quarter 2004
BOISE, Idaho February 7, 2006 – American Ecology Corporation [NASDAQ: ECOL] today reported 2005 full year net income of $15.4 million or $0.86 per fully diluted share, compared to $23.4 million in net income or $1.32 per fully diluted share for 2004. 2005 annual operating income reached $19.4 million, a 48 percent increase over the $13.1 million operating income posted in 2004.
For the quarter ending December 31, 2005, net income was $3.1 million or $0.17 per fully diluted share, compared to net income of $3.2 million or $0.18 per fully diluted share for the same quarter a year ago. Operating income for the quarter reached $5.3 million, a 57 percent increase over the $3.4 million posted for the same quarter last year.
“In 2005, American Ecology delivered its strongest financial performance since becoming an independent public company twenty two years ago,” stated Stephen Romano, President and Chief Executive Officer, adding “Our high-volume, low-overhead growth strategy combined with expanded niche service delivery and our organization-wide focus on customer service excellence continues to increase shareholder value.”
Full Year 2005 Results
Revenue for the twelve months ended December 31, 2005, reached a
record $79.4 million, up $25.3 million or 47 percent over 2004. In
2005, waste disposed at the Company's three hazardous waste facilities
increased to 791,000 tons, a 35 percent increase over 2004. Higher
volume reflected increased waste shipments under the Idaho facility's
long-term contract with the U.S. Army Corps of Engineers, full
resumption of treatment services at the Company's Texas facility,
expanded permit capabilities at the Company's Nevada facility and
increased shipments from clean up projects at all three hazardous
disposal sites. Revenue also increased at the Company's low-level
radioactive waste facility in Washington due to significant growth in
the Company's non rate-regulated business. In 2005, the average
selling price for the Company's treatment and disposal services
increased 3 percent.
Higher revenue was partially offset by higher volume-related direct costs, including higher labor costs, depreciation and disposal cell amortization, waste treatment additive costs and other consumables. Transportation costs more than doubled to $22.3 million in 2005, up from $10.1 million in 2004, as the Company continued to execute its growth strategy based on bundling rail transportation and disposal services.
Selling, general and administrative expenses (SG&A) for 2005 increased 19 percent to $12.5 million from $10.6 million reported in 2004. Over half of this increase reflected higher payroll, employee bonuses, accounting fees, director fees, bank fees and site security costs. 2004 SG&A was positively affected by a reduction in the Company's allowance for doubtful accounts. This 2004 non-recurring adjustment accounted for much of the remaining increase in SG&A for 2005.
Revenue growth at all four operating disposal facilities produced 2005 operating income of $19.4 million, 48 percent higher than the $13.1 million in operating income posted for 2004. All four operating facilities increased operating income year over year.
Reported 2005 net income was $15.4 million, or $0.86 per fully diluted share, compared to net income of $23.4 million, or $1.32 per fully diluted share for the twelve months ended 2004. 2004 results benefited from a $920,000 one time gain on the sale of the Company's former Oak Ridge, Tennessee low-level radioactive waste processing business and an $11.3 million release of a valuation allowance for deferred tax assets. 2005 results were positively affected by receipt of an $11.8 million payment from the Central Interstate Low-Level Radioactive Waste Compact, which produced a pre-tax gain of $5.3 million.
At December 31, 2005 the Company reported $19.8 million in cash and investments on hand. Working capital was $32 million at year end, an increase of more than $15 million from the end of 2004, with no borrowings on the Company's line of credit or any other sources.
Pro-Forma Results
Since 2002 the Company has reported various cash and non-cash
events that have materially affected reported net income presented in
accordance with Generally Accepted Accounting Principles (GAAP). These
events complicate comparisons of GAAP net income and earnings per
share (EPS). Management also evaluates pro forma or non-GAAP financial
information that excludes certain items from net income. This
information should be reviewed in conjunction with GAAP information,
and the reconciliation of non-GAAP items to GAAP financial results
included at the end of this release.
2002 2003 2004 2005
---------- ---------- ---------- -----------
Pro-Forma Net Income $4,781,000 $6,271,000 $8,525,000 $12,466,000
Pro-Forma Diluted EPS $ 0.30 $ 0.36 $ 0.48 $ 0.69
Year over Year Change
in Pro-Forma Diluted
EPS - 20% 33% 44%
Fourth Quarter Results
Revenue for the fourth quarter of 2005 increased to $23.3 million,
a $9.8 million or 72 percent increase above the $13.5 million in
revenue reported for the same quarter a year ago. This reflected a 42
percent increase in disposal volume and a 12 percent increase in
average selling price at the Company's three hazardous waste
facilities over the same quarter last year. Quarterly revenue
increased at all four operating disposal sites over the same quarter
last year.
While this significant increase in revenue was largely offset by higher transportation costs, labor and waste treatment additive costs, the Company posted a gross profit of $8 million, a 57 percent increase over the fourth quarter of 2004. A $542,000 increase in estimates for closure and post-closure costs at the Company's formerly operated hazardous waste facility near Winona, Texas partially offset strong performance at its four operating facilities.
SG&A for the fourth quarter increased $1.4 million to $3.5 million, compared to SG&A of $2.1 million in the fourth quarter of 2004. Higher SG&A primarily reflected employee bonuses and sales commissions recognized in the fourth quarter of 2005, and the lack of a reduction in the Company's allowance for doubtful accounts which (as noted above) benefited 2004 results.
During the quarter, the Company recognized $860,000 of proceeds from business interruption insurance. The Company continues to assert business interruption claims larger than the amount recognized. The claims remain under review by its insurer.
Increased revenue and additional insurance proceeds offset most of the higher costs and increased Winona reserve, allowing the Company to post operating income of $5.3 million, a 57 percent increase over the $3.4 million of operating income posted in the fourth quarter of 2004.
"Fourth quarter results highlight the sustained earning power of American Ecology's ongoing business irrespective of the delayed Honeywell project," commented Senior Vice President and Chief Financial Officer Jim Baumgardner.
For the fourth quarter, the Company reported after-tax net income of $3.1 million, or $0.17 per fully diluted share, compared to after-tax net income of $3.2 million, or $0.18 per fully diluted share a year ago.
Outlook
The Company reaffirms its 2006 guidance, first provided on
December 5, 2005, and calling for the Company to generate net earnings
between $0.72 and $0.82 per fully diluted share for 2006. Capital
spending in 2006 is expected to reach $12 million, principally for
construction of a new waste treatment building at the Nevada facility,
new disposal cell permitting and construction of a rail transfer
station at the Texas facility, the purchase of fifty additional
railcars, and construction of a second waste transload building and
additional track to increase waste throughput at the Idaho rail
transfer facility.
"American Ecology entered 2006 well poised for continued growth and strong cash flow," Romano concluded.
Dividend Payment
On January 2, 2006, the Company declared a $0.15 per common share
quarterly dividend for stockholders of record on that day. This $2.6
million dividend was paid using cash on hand on January 13, 2006.
Honeywell Project Update
In June 2005, the Company entered into a Contract that commits
Honeywell International to provide American Ecology 99 percent of the
chromite ore processing residues removed from a site in Jersey City,
New Jersey. Total waste volumes at the site have been estimated at
approximately one million tons. On October 6, 2005, Honeywell filed a
motion with the U.S. District Court for the District of New Jersey
(the "Court") to reduce the amount of material removed from the site
by 53 percent. On January 3, 2006, the Court disqualified a Honeywell
expert witness and certain attorneys in relation to this motion. This
disqualification ruling is under judicial review.
On November 17, 2005, the Company announced that Honeywell had notified it that waste shipments from the main excavation at the Jersey City site would be delayed until March 2006. On December 30, 2005, the Court issued a Stipulation and Order Regarding Barrier Wall Repair and Modified Excavation Schedule setting a new main excavation commencement date of April 3, 2006. The delays are unrelated to American Ecology's performance under its contract with Honeywell, which remains in full force and effect.
To minimize Honeywell project delay impacts, American Ecology has repositioned railcars and worked with its subcontractors to reduce standby costs. American Ecology will continue to assess Honeywell certain fees for not meeting minimum weekly shipment requirements as specified in the contract unless other arrangements are agreed to. These fees may or may not be sufficient to fully cover costs incurred by the Company prior to resumption of waste shipments.
Investor Conference Call
The Company will host an investor conference call on Wednesday,
February 8, 2006 at 10 a.m. mountain time to discuss financial results
for the quarter and year. Chief Executive Officer Stephen Romano,
Chief Financial Officer James Baumgardner and Controller Michael
Gilberg will participate. Those interested are invited to 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 866.261.3296. Participants will
be asked to provide their name and affiliation.
About American Ecology
American Ecology Corporation, through its subsidiaries, provides
radioactive, PCB, hazardous and non-hazardous industrial 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 plants.
Headquartered in Boise, Idaho, American Ecology is the oldest
radioactive and hazardous waste services company in the United States,
having operated for fifty three years.
Safe Harbor
This press release contains forward-looking statements that are
based on our current expectations, beliefs, estimates 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 its 2006 earnings estimates, receive projected waste
shipments from Honeywell or other customers, increase earnings through
the bundling of transportation and disposal services, collect
additional funds 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 has filed a registration statement on Form S-3 containing information regarding the Company's common stock and certain shareholders. Investors and security holders are strongly encouraged to read this filing, as well as all of the Company's current SEC filings.
Non-GAAP financial measures help management and investors analyze the financial condition and operating performance of the Company and facilitate more meaningful period-to-period comparisons of key operating trends. The Non-GAAP data contained in this press release should only be used in conjunction with results reported in accordance with Generally Accepted Accounting Principles, or GAAP. While management believes these non-GAAP measures are useful to investors, they are not a replacement for GAAP results. Also, the method used by the Company to produce non-GAAP results may materially differ from methods used by other companies, investors or analysts to produce non-GAAP measures. Non-GAAP results presented in this release or the related investor conference call presentation exclude reported tax expense and benefits, non-operating settlement gains or losses, gains or losses associated with the Company's discontinued Tennessee operations, the Company's write off of the Ward Valley, California asset and a gain on settlement with the Central Interstate Compact, and apply a normalized estimated tax rate. A detailed reconciliation of the adjustments between results calculated using GAAP and Non-GAAP in this release is contained in the attached financial summary.
AMERICAN ECOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) ($ in 000's except per share amounts)
Three Months Ended Year Ended
December 31, December 31,
2005 2004 2005 2004
------- ------- ------- -------
Revenue $23,263 $13,538 $79,387 $54,167
Transportation costs 6,831 2,678 22,302 10,124
Other direct operating costs 8,425 5,762 26,048 20,773
------- ------- ------- -------
Gross profit 8,007 5,098 31,037 23,270
Selling, general and
administrative expenses 3,531 2,136 12,506 10,553
Business interruption insurance
claims (860) (431) (901) (431)
------- ------- ------- -------
Operating income 5,336 3,393 19,432 13,148
Interest income 222 70 564 203
Interest expense 33 48 173 194
Fire related property impairment
and insurance claims (49) 275 (49) 275
Gain on settlement of Nebraska
Litigation -- -- 5,327 --
Other income 5 25 13 99
------- ------- ------- -------
Income before income tax and
discontinued operations 5,481 3,715 25,114 13,531
Income tax expense (benefit) 2,341 458 9,676 (8,832)
------- ------- ------- -------
Income before discontinued
operations 3,140 3,257 15,438 22,363
Gain (loss) from discontinued
operations - Oak Ridge Facility -- (21) -- 1,047
------- ------- ------- -------
Net income $ 3,140 $ 3,236 $15,438 $23,410
======= ======= ======= =======
Basic earnings from continuing
operations .18 .19 .88 1.30
Basic earnings (loss) from
discontinued operations -- (.00) -- .06
------- ------- ------- -------
Basic earnings per share $ .18 $ .19 $ .88 $ 1.36
======= ======= ======= =======
Diluted earnings from continuing
operations .17 .18 .86 1.26
Diluted earnings (loss) from
discontinued operations -- (.00) -- .06
------- ------- ------- -------
Diluted earnings per share $ .17 $ .18 $ .86 $ 1.32
======= ======= ======= =======
Dividends paid per common share $ .15 $ .25 $ .30 $ .25
======= ======= ======= =======
AMERICAN ECOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited) ($ in 000's)
As of December 31,
------------------
2005 2004
------- -------
ASSETS
Current Assets:
Cash and cash equivalents $ 3,641 $ 2,160
Short term investments 16,214 10,967
Receivables, net 13,573 8,963
Insurance receivable 157 1,285
Prepayments and other 3,183 1,469
Income tax receivable 1,248 185
Deferred income taxes 6,714 5,428
------- -------
Total current assets 44,730 30,457
Property and equipment, net 40,896 27,363
Facility development costs -- 6,478
Other assets 822 462
Deferred income taxes 3,021 12,473
------- -------
Total assets $89,469 $77,233
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long term debt $ -- $ 1,457
Accounts payable 3,665 3,022
Deferred revenue 1,261 724
State burial fees payable 1,454 1,446
Management incentive plan payable 1,272 934
Customer advances 1,535 --
Customer refunds 1,062 2,512
Accrued liabilities 1,337 725
Accrued closure and post closure obligation,
current portion 1,127 2,323
------- -------
Total current liabilities 12,713 13,143
Long term debt -- 2,734
Long term customer advances 1,752 --
Long term accrued liabilities 485 441
Accrued closure and post closure obligation,
excluding current portion 10,560 9,304
------- -------
Total liabilities 25,510 25,622
------- -------
Commitments and contingencies
Shareholders' equity:
Convertible preferred stock, 1,000,000 shares
authorized,
Common stock, $.01 par value, 50,000,000
authorized, 17,742,420 and 17,398,494 shares
issued and outstanding 177 174
Additional paid-in capital 53,213 51,015
Retained earnings 10,569 422
------- -------
Total shareholders' equity 63,959 51,611
------- -------
Total Liabilities and Shareholders' Equity $89,469 $77,233
======= =======
AMERICAN ECOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) ($ in 000's)
For the Year Ended
December 31,
2005 2004
-------- --------
Cash flows from operating activities:
Net income $ 15,438 $ 23,410
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation, amortization, and accretion 6,775 5,957
Income from discontinued operations -- (1,047)
(Gain) loss on disposal of property and
equipment and on property claim, net 49 (204)
Income tax benefit on exercise of stock options 767 634
Loss on write off of Ward Valley facility
development costs -- --
Gain on settlement of Nebraska Litigation (5,327) --
Deferred income taxes 7,103 (9,800)
Stock compensation 180 --
Changes in assets and liabilities:
Receivables (4,610) 3,633
Other assets (2,138) (605)
Closure and post closure obligation (1,018) (526)
Income taxes payable/receivable -- --
Accounts payable and accrued liabilities 4,019 2,884
-------- --------
Net cash provided by operating activities 21,238 24,336
Cash flows from investing activities:
Capital expenditures (19,426) (4,984)
Proceeds from the sale of assets 1,339 383
Proceeds from the settlement of Nebraska
Litigation 11,805 --
Transfers between cash and short term
investments, net (5,247) (10,967)
-------- --------
Net cash used by investing activities (11,529) (15,568)
Cash flows from financing activities:
Dividends paid (5,291) (4,345)
Payments of indebtedness (4,191) (1,484)
Warrants purchased and canceled -- (5,500)
Stock purchased and canceled -- --
Retirement of Series D Preferred Stock -- --
Stock options and warrants exercised 1,254 1,061
-------- --------
Net cash used by financing activities (8,228) (10,268)
-------- --------
Increase (decrease) in cash and cash equivalents 1,481 (1,500)
Net cash used by discontinued operations -- (3,014)
Cash and cash equivalents at beginning of year 2,160 6,674
-------- --------
Cash and cash equivalents at end of year $ 3,641 $ 2,160
======== ========
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest expense $ 173 $ 194
Income taxes paid 1,806 335
Non-cash investing and financing activities:
Acquisition of equipment with notes/capital
leases -- --
Impairment of assets involved in July 1, 2004
fire -- 679
Recognition of insurance proceeds for assets
involved in July 1, 2004 fire -- 854
AMERICAN ECOLOGY CORPORATION
RECONCILIATION OF NON-GAAP INFORMATION
(Unaudited) ($ in 000's except per share amounts)
For the Year Ended December 31,
--------------------------------
2002 2003 2004 2005
-------- ------- ------- -------
Reported GAAP Net Income 18,771 (8,592) 23,410 15,438
Addback:
Loss from Discontinued Operations 10,464 - - -
Write Off Ward Valley - 20,951 - -
Tax Expense - 72 - 9,676
Subtract:
Cumulative Effect of Change of
Acctg Prin. (13,141) - - -
Tax Benefits (8,505) - (8,832) -
Gain from Discontinued Operations - (2,477) (1,047) -
Gain on NE Settlement - - - (5,327)
Pro-Forma Pre-Tax Income 7,589 9,954 13,531 19,787
Pro Forma Tax Expense at 37% (2,808) (3,683) (5,006) (7,321)
Pro Forma Net Income 4,781 6,271 8,525 12,466
Pro Forma Basic After-Tax EPS 0.33 0.38 0.49 0.71
Pro Forma Diluted After-Tax EPS 0.30 0.36 0.48 0.69