April
April 16, 2003 | April 28, 2003
April 16, 2003
Contact: Chad Hyslop 208.331.8400
chyslop@americanecology.com
AMERICAN ECOLOGY ANNOUNCES FIRST QUARTER 2003 INVESTOR CONFERENCE CALL
Interested Parties Invited to Call in on Monday, April 28, 2003 at 10:00 am Mountain Time
BOISE, Idaho –American Ecology Corporation [NASDAQ: ECOL], today announced that the Company’s first quarter investor conference call will be held Monday, April 28, 2003 at 10:00 am Mountain Time.
Chief Executive Officer Stephen Romano, Chief Financial Officer James Baumgardner, and Corporate Controller Michael Gilberg will present first quarter financial results, discuss operations, discontinued operations in Oak Ridge, Tennessee, the adverse Ward Valley state court decision in California, 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, American Ecology is the oldest radioactive and hazardous waste services company in the United States.
April 28, 2003
Contact: Chad Hyslop or Jim Baumgardner 208.331.8400
chyslop@americanecology.com
AMERICAN ECOLOGY POSTS $17.2 MILLION FIRST QUARTER LOSS
$21 Million Ward Valley Write-Off and Increased Oak Ridge Reserve
Outweigh Gain on Sale and Operating Earnings
BOISE, Idaho – Jim Baumgardner, Senior Vice President and Chief Financial Officer of American Ecology Corporation [NASDAQ: ECOL], today announced consolidated financial results for the quarter ending March 31, 2003. American Ecology posted a net loss of $17.2 million or $1.11 per fully diluted share, compared to net income of $15.9 million, or $1.11 per fully diluted share for the quarter ending March 31, 2002. First quarter 2002 results reflect a $13.1 million one-time gain from the cumulative effect of a change in accounting principle. In the first quarter of 2002, the Company adopted Financial Accounting Standard No. 143, Accounting for Asset Retirement Obligations, which resulted in a one-time gain caused by a reduction in the Company’s closure and post-closure liabilities and an increase in certain assets.
During the first quarter of 2003, several unusual charges negatively impacted reported financial results. The greatest impact was a $21 million write-off of site development assets following an adverse state court decision in litigation seeking recovery of the Company’s investment in the Ward Valley, California disposal project. The Company filed a motion with the trial court to vacate this decision on April 25, 2003. The outcome of this motion or any subsequent appeal is sufficiently uncertain to warrant the asset write-down. In addition, the Company’s discontinued Oak Ridge, Tennessee operation took a $1.3 million charge for increased liability reserves; higher waste removal, processing and disposal costs; and impairment of certain equipment. These charges were partially offset by a gain of approximately $5 million on the February 2003 sale of the El Centro municipal solid waste landfill in Texas.
The Company recorded first quarter 2003 revenue from continuing operations of $10.8 million, a 19% decrease from the $13.4 million in revenue from continuing operations for the first quarter last year. The Company’s Grand View, Idaho facility continued to deliver growth, increasing revenue by 24% in the first quarter of 2003 over the same quarter last year. Higher first quarter 2002 revenue was primarily attributable to a $3.85 million waste packaging and disposal project performed at the Company’s Richland, Washington facility.
During the first quarter of 2003, the Company generated $290,000 of operating income from continuing operations, compared to $3.7 million of operating income for the same quarter last year. Like revenue, first quarter 2002 income materially benefited from completion of the large project at the Richland facility.
First quarter 2003 earnings were also depressed by higher selling, general & administrative expenses (SG&A), which increased to $4.5 million, or 42% of revenue. This compared to $3.5 million, or 26% of revenue in the same quarter last year. This increase is the direct result of $1.5 million in legal fees expended on the Ward Valley litigation in 2003, compared to $147,000 spent on Ward Valley litigation in the first quarter of 2002.
“A number of significant, unusual events dominated American Ecology’s first quarter 2003 financial results” commented Baumgardner, adding, “Also, the first quarter of 2002 included a large project and the positive effect of a change in accounting standards, making comparison of the two quarters difficult.”
“Our core waste treatment and disposal business, particularly at the Grand View Idaho facility, delivered solid performance and is expected to do so for the balance of 2003,” Baumgardner concluded.
The Company’s first quarter 2003 investor conference call will be held Monday, April 28, 2003 at 10:00 am Mountain Time. President and Chief Executive Officer Stephen Romano, Mr. 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, prevail in pending litigation, or complete its discontinued operation obligations at the Oak Ridge facility within established reserves. For information on 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)
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Three Months Ended |
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March 31, 2003 |
March 31, 2002 |
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|
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Revenue |
$ 10,771 |
$ 13,424 |
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Direct operating costs |
5,984 |
6,175 |
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|
|
|
||
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Gross profit |
4,787 |
7,249 |
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Selling, general and administrative expenses |
4,497 |
3,541 |
||
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Income from operations |
290 |
3,708 |
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|
|
|
||
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Investment income |
-- |
11 |
||
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Interest income (expense) |
(121) |
(265) |
||
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Other income (loss) |
-- |
(465) |
||
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Write Down of Ward Valley Assets |
(20,951) |
-- |
||
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|
|
|
||
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Income (loss) before income tax, discontinued operations and cumulative effect of change in accounting principle |
(20,782) |
2,989 |
||
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Income tax expense (benefit) |
(8) |
-- |
||
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|
|
|
||
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Income (loss) before discontinued operations and cumulative effect of change in accounting principle |
(20,774) |
2,989 |
||
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Gain from discontinued operations – El Centro Landfill |
4,944 |
190 |
||
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(Loss) from discontinued operations – Oak Ridge LLRW Facility |
(1,337) |
(401) |
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|
|
|
||
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Income (loss) before cumulative effect of change in accounting principle |
(17,167) |
2,778 |
||
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Cumulative effect of accounting change |
-- |
13,141 |
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|
|
|
||
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Net income (loss) |
(17,167) |
15,919 |
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Preferred stock dividends |
64 |
98 |
||
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|
|
|
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Net income (loss) available to common shareholders |
($ 17,231) |
$ 15,821 |
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|
|
|
||
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Basic (loss) earnings from continuing operations |
(1.34) |
.22 |
||
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Basic (loss) earnings from discontinued operations |
.23 |
(.02) |
||
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Basic earnings from cumulative effect of accounting change |
-- |
.95 |
||
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Basic (loss) earnings per share |
$ (1.11) |
$ 1.15 |
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|
|
|
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Diluted (loss) earnings from continuing operations |
(1.34) |
.17 |
||
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Diluted (loss) earnings from discontinued operations |
.23 |
(.02) |
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Diluted earnings from cumulative effect of accounting change |
-- |
.92 |
||
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Diluted (loss) earnings per share |
$ (1.11) |
$ 1.11 |
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|
|
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Dividends paid per common share |
$ -- |
$ -- |
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|
|
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Note: Certain reclassifications of prior quarter and previous year-to-date amounts have been made to conform to current quarter presentation and discontinued operations.
AMERICAN ECOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS (unaudited)
($ in 000’s except per share amounts)
|
|
March 31, 2003 |
December 31, 2002 |
|
ASSETS |
|
|
|
Current Assets: |
|
|
|
Cash and cash equivalents |
$ 7,134 |
$ 135 |
|
Receivables, net |
7,306 |
10,460 |
|
Income taxes receivable |
742 |
740 |
|
Prepayments and other |
368 |
498 |
|
Deferred income taxes |
-- |
2,745 |
|
Assets held for sale or closure |
3,542 |
10,722 |
|
Total current assets |
19,092 |
25,300 |
|
|
|
|
|
Cash and investment securities, pledged |
244 |
244 |
|
Property and equipment, net |
27,488 |
26,998 |
|
Facility development costs |
6,478 |
27,430 |
|
Other assets |
66 |
129 |
|
Assets held for sale or closure |
2,237 |
1,485 |
|
Deferred income taxes |
8,284 |
5,539 |
|
$ 63,889 |
$ 87,125 |
|
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|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
Current Liabilities: |
|
|
|
Current portion of long term debt |
$ 1,719 |
$ 1,985 |
|
Accounts payable |
2,568 |
2,192 |
|
Accrued liabilities |
4,462 |
4,166 |
|
Accrued closure and post closure obligation, current portion |
882 |
882 |
|
Income taxes payable |
15 |
23 |
|
Current liabilities of assets held for sale or closure |
5,715 |
7,965 |
|
Total current liabilities |
15,361 |
17,213 |
|
|
|
|
|
Long term accrued liabilities |
526 |
2,372 |
|
Long term debt |
5,310 |
5,972 |
|
Revolving line of credit |
-- |
603 |
|
Liabilities of assets held for sale or closure, excluding current portion |
5,590 |
5,699 |
|
Accrued closure and post closure obligation, excluding current portion |
9,485 |
9,318 |
|
Total liabilities |
36,272 |
41,177 |
|
|
|
|
|
Commitments and contingencies |
|
|
|
Shareholders’ equity: |
|
|
|
Convertible preferred stock, 1,000,000 shares authorized, |
|
|
|
Designated as follows: |
|
|
|
Series D cumulative convertible preferred stock, $.01 par value, |
|
|
|
-- |
1 |
|
|
Common stock, $.01 par value, 50,000,000 authorized, 16,960,901 |
|
|
|
and 14,539,264 shares issued and outstanding |
170 |
145 |
|
Additional paid-in capital |
54,665 |
55,789 |
|
Accumulated deficit |
(27,218) |
(9,987) |
|
Total shareholders’ equity |
27,617 |
45,948 |
|
|
|
|
|
$ 63,889 |
$ 87,125 |