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July July 16, 20022 AMERICAN ECOLOGY SETS SECOND QUARTER 2002 INVESTOR CONFERENCE CALL Interested Parties Invited to Call in on Monday, July 29, 2002 at 10:00 am Mountain Time 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. July 29, 2002 AMERICAN ECOLOGY POSTS $2.2 MILLION 2nd QUARTER PROFIT Best First Half Financial Results in Company History Revenue for the second quarter of 2002 reached $16.8 million, a 23% increase over the $13.7 million reported for the second quarter of 2001. This increase primarily reflects higher revenue from the Company's Robstown, Texas hazardous waste disposal facility and its Field Services division.
For the first half of 2002, net income reached $21.3 million or $1.34 per fully diluted share, compared to net income of $1.8 million or $0.09 per diluted share for the same six month period last year. Implementation of SFAS No. 143, a new accounting standard, during the first quarter of 2002 resulted in a one-time, cumulative effect gain of $16.3 million. Large one-time disposal projects at the Company's Richland, Washington and Robstown, Texas disposal facilities contributed materially to its record first half results. Completion of these projects and ongoing operational challenges at the Oak Ridge, Tennessee and Beatty, Nevada facilities led Baumgardner to conclude, "While we fully expect continued profitability from operations in the second half of the year, earnings will likely be lower than in the first half of the year." Excluding the impact of the new accounting standard, American Ecology realized net income of almost $5.0 million or $0.30 per fully diluted share for the six months ending June 30, 2002. "Excluding the cumulative effect of the mandatory accounting change, American Ecology achieved its highest first half operating and net income since becoming a publicly traded company in 1984," stated Baumgardner. Operating income for the first six months of 2002 increased to $5.9 million, a 390% increase over the $1.2 million posted during the same six months of 2001. Revenue for the first six months of 2002 reached $35.2 million, a 32% increase over the $26.6 million recorded in the first half of 2001. During the second quarter of 2002, Selling, General & Administrative expense (SG&A) decreased to $3.4 million, or 20% of sales, compared to $4.9 million, or 36% of sales in the same quarter of 2001. This 30% reduction in SG&A spending in the quarter primarily resulted from cost control measures implemented by new management during the fourth quarter of 2001. For the six months year-to-date, SG&A was $8.3 million or 24% of sales, which was 8% lower than the $9.0 million (39% of sales) in SG&A posted during the same six months last year. "Increasing operational efficiency and sales productivity while aggressively controlling costs is central to our growth strategy," stated President and Chief Executive Officer Stephen Romano adding, "Our efforts to reduce expense have focused on eliminating unnecessary and redundant corporate overhead expenses, which have been cut by more than 40% compared to the same period last year." The Company's Oak Ridge, Tennessee low-level radioactive waste processing facility continued to operate at a loss for the second quarter, though results improved over the first quarter. During the second quarter, the Company resolved a long-standing labor dispute and paid more than $1.0 million in a back-pay settlement to union employees, which had been substantially accrued in prior years. The Company is currently negotiating with its union employees in Oak Ridge on a new collective bargaining agreement. At the Company's Beatty, Nevada hazardous waste facility, second quarter revenue was higher than in the first quarter of 2002, but was offset by higher operational expenses, resulting in a small loss for the quarter. "We have implemented an aggressive new business strategy at Beatty that focuses on increased waste throughput and operational excellence." Romano stated. "Consistent with previous periods, operations at the Company's disposal facilities in Idaho, Texas and Washington generated strong cash flow and earnings for the quarter." Baumgardner stated, continuing, "When combined with the significant growth in Field Services and lower SG&A spending, the Company as a whole exceeded management's expectations." The Company's second quarter 2002 investor conference call will be held Monday, July 29, 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 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, achieve profitability at its Oak Ridge or Beatty facilities, reach agreement with its union employees at Oak Ridge 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 Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission. |
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AMERICAN ECOLOGY CORPORATION CONSOLIDATED STATEMENTS
OF OPERATIONS |
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Three Months Ended June 30 |
Six Months Ended June 30, |
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2002 |
2001 |
2002 |
2001 |
|
Revenue |
$16,781 |
$13,731 |
$35,158 |
$26,597 |
Direct operating costs |
10,858 |
8,974 |
20,941 |
16,449 |
Gross profit |
5,923 |
4,757 |
14,217 |
10,148 |
Selling, general and administrative expenses |
3,441 |
4,935 |
8,279 |
8,996 |
Income (loss) from operations |
2,482 |
(178) |
5,938 |
1,152 |
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|
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Investment income |
5 |
34 |
16 |
208 |
Interest income (expense) |
(236) |
(346) |
(524) |
(604) |
Gain on sale of assets |
43 |
66 |
83 |
112 |
Other income (loss) |
(119) |
788 |
(584) |
1,024 |
Net income before income taxes |
2,175 |
364 |
4,929 |
1,892 |
Income tax expense |
-- |
38 |
-- |
84 |
Net income before cumulative effect of accounting change |
2,175 |
326 |
4,929 |
1,808 |
| Cumulative effect of accounting change |
-- |
-- |
16,323 |
-- |
Net income |
2,175 |
326 |
21,252 |
1,808 |
Preferred stock dividends |
99 |
99 |
197 |
196 |
Net income available to common shareholders |
$ 2,076 |
$ 227 |
$ 21,055 |
$ 1,612 |
Basic earnings from continuing operations |
.14 |
.02 |
.34 |
.12 |
Basic earnings from cumulative effect of accounting change |
-- |
-- |
1.15 |
-- |
Basic earnings per share |
$ .14 |
$ .02 |
$ 1.49 |
$ .12 |
Diluted earnings from continuing operations |
.12 |
.01 |
.30 |
.09 |
Diluted earnings from cumulative effect of accounting change |
-- |
-- |
$ 1.04 |
-- |
Diluted earnings per share |
$ .12 |
$ .01 |
$ 1.34 |
$ .09 |
Dividends paid per common share |
$ -- |
$ -- |
$ -- |
$ -- |
Note: Certain reclassifications of prior quarter and previous year-to-date amounts have been made to conform to current quarter and year-to-date presentation, none of which affect previously reported net income.