|
July July 1, 2004 | July 14, 2004 | July 20, 2004
July 1, 2004 AMERICAN ECOLOGY ANNOUNCES SALE OF OAK RIDGE, TENNESSEE ASSETS TO TOXCO, INC. Company Announces July 21 Second Quarter Investor Conference Call “This transaction concludes a successful 2 and ½ year effort by American Ecology to exit this and other non-core businesses, allowing us to focus on our core hazardous and radioactive waste treatment and disposal business,” Romano said, continuing “The 16 acre, State-licensed Oak Ridge facility provides Toxco with an excellent location and the infrastructure to expand their existing business.” Under the terms of the transaction, Toxco received all of the facility’s land, buildings, equipment and licenses, plus $1.65 million in cash in exchange for assuming all environmental obligations, including the costs for future closure and decommissioning of the facility at the end of its operational life. The transaction relieved $4.6 million of environmental liabilities from American Ecology’s balance sheet and will result in a gain on sale of approximately $1.0 million, which will be reflected in the Company’s financial statements as of June 30, 2004. American Ecology acquired the Oak Ridge low-level radioactive waste processing facility in 1994 and operated the business through subsidiary American Ecology Recycle Center Inc. Commercial operations were discontinued in December 2002, followed by reductions in the facility’s labor force. All customer waste was removed from the facility by July, 2003. “We’re very pleased to close this chapter in American Ecology’s history,” Romano concluded. With the sale complete, the Company will re-evaluate its valuation allowance against its deferred tax asset and its expected ability to utilize those net operating loss carry-forwards specifically related to past operation of the Oak Ridge facility. This re-evaluation should result in a significant tax benefit, which will be addressed in the Company’s financial results for the quarter ending June 30, 2004. American Ecology Corporation will announce financial results for the quarter ending June 30, 2004 on Tuesday, July 20 at the close of trading on the Nasdaq National Stock Market. Company management will host an investor conference call on Wednesday, July 21 at 10:00 a.m. Mountain Time to discuss second quarter results and the financial impact of the Oak Ridge asset sale. Interested parties may participate in the investor conference by calling 1.888.747.3446. American Ecology Corporation, through its subsidiaries, provides radioactive, PCB, hazardous and non-hazardous waste treatment and disposal 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 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 generate future earnings, prevail in pending litigation, or remain free of liability for its retained Oak Ridge obligations. 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.
July 14, 2004 AMERICAN ECOLOGY ANNOUNCES SCHEDULE FOR RELEASE OF 2nd QUARTER RESULTS AND INVESTOR CONFERENCE CALL Results Released July 20, 2004 Followed By Investor Call July 21 Chief Executive Officer Stephen Romano, Chief Financial Officer James Baumgardner, and Controller Michael Gilberg will present second quarter financial results, 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 after the presentations. To join the call, dial 888.747.3446. 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.
July 20, 2004 AMERICAN ECOLOGY SECOND QUARTER OPERATING INCOME UP 41% TO $3.8 MILLION Sale of Oak Ridge and Tax Benefit Push Quarterly Net Income to $16.0 million Second Quarter Results “The growth in quarterly operating income highlights the continued strength of our Grand View, Idaho operation and also reflects a significant increase in waste volumes shipped to our Beatty, Nevada facility,” Baumgardner stated, adding “American Ecology’s business plan, built on increased waste throughput at our disposal facilities, expanded delivery of niche services and a lean overhead structure is working.” Revenue during the second quarter of 2004 reached $13.8 million, a 15% increase over the $12.0 million reported for the same quarter last year. Significant increases in waste throughput at the Company’s Idaho and Nevada disposal facilities were partially offset by lower average selling prices at both facilities. For the quarter just ended, total waste volume increased 26% over the same quarter last year. Selling, General and Administrative expenses (“SG&A”) dropped 22% to $2.6 million from the same period last year. SG&A as a percent of revenue also continued to improve, dropping to 19% of revenue in the second quarter of 2004, down from 27% of revenue in the second quarter of 2003. The reduction in SG&A primarily resulted from lower legal and administrative expenses. Higher revenue and lower spending produced operating income of $3.8 million, an increase of 41% over the $2.7 million in operating income posted in the second quarter of 2003. On June 30, 2004 the Company sold principally all of the assets of its discontinued low-level radioactive waste processing operation in Oak Ridge, Tennessee to Toxco Inc. Toxco received all of the land, buildings, equipment and licenses of the facility and $1.65 million in cash. In exchange, Toxco assumed all environmental obligations, including the costs for future closure and decommissioning of the facility at the end of its operational life. As a result of the transaction, $4.6 million of future closure liabilities were relieved from American Ecology’s balance sheet and a gain on sale of $0.9 million was recognized in discontinued operations. In addition, management believes it is now more likely than not that the Company will fully utilize its tax benefits, including net-operating loss carry-forwards. Consequently, the Company reversed the valuation allowance previously held against its deferred tax assets, generating a $11.3 million tax benefit in the quarter. “Our sale of the Oak Ridge facility and related transfer of liabilities completes American Ecology’s successful campaign to exit all non-core businesses,” President and Chief Executive Officer Stephen Romano noted, adding “Our energy and resources are now fully focused on our core waste treatment and disposal business.” 6 Months Year-to-Date For the six months ending June 30, 2004 SG&A dropped 30% to $5.5 million. This $2.3 million reduction in SG&A over the same period last year was principally the result of $1.8 million of non-recurring legal expenses for the Ward Valley, California damages claim in 2003 and continued cost containment. Consistent with second quarter results, higher revenue combined with lower spending generated first half operating income of $7.2 million compared to the $3.0 million reported in the first half of 2003. For the first half of 2004, the Company reported net income of $18.5 million or $1.04 per fully diluted share, compared to a net loss of $15.2 million or ($0.94) per diluted share for the same period last year. The large increase in net income was primarily attributable to an $11.3 million tax benefit recognized during the quarter. A series of one-time events in the first half of both years accounted for the large swing in reported net income. In the first half of 2003, the Company wrote off $21 million following an adverse trial court ruling in the Ward Valley damages claim, posted a $5 million gain on the sale of its former El Centro municipal waste landfill, and expensed $2 million for the former Oak Ridge operation. As noted above, the Oak Ridge, Tennessee facility was sold in the second quarter of 2004, resulting in a $0.9 million gain and allowing management to reevaluate its tax assets and record a tax benefit of $11.3 million. “Aggressive execution of our business plan combined with a strong balance sheet positions American Ecology to continue generating solid cash flows and consistent earnings,” Baumgardner concluded. Update on Texas Facility “While the precise costs of the fire and regulatory enforcement actions cannot yet be estimated, we are working hard to return the Texas treatment and containment building to service with expanded capabilities and address regulatory compliance matters as soon as practical.” Romano stated, adding “This event does not alter our previous guidance of greater than 15% growth in operating income for 2004.” Investor Call About American Ecology This press release contains forward-looking statements that are based on our current expectations, beliefs, and assumptions about the industry and markets in which American Ecology Corporation and its subsidiaries operate. Actual results may differ materially from what is expressed herein and no assurance can be given that the Company can successfully generate improved earnings, timely return the Texas treatment facility to service, or prevail in pending litigation. For information on other factors that could cause actual results to differ from expectations, please refer to American Ecology Corporation’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission. AMERICAN ECOLOGY CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) ($ in 000’s except
per share amounts)
AMERICAN ECOLOGY CORPORATION CONSOLIDATED BALANCE SHEETS (Unaudited) ($ in 000’s except per share
amounts)
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||