July
July 6, 2005 | July 19, 2005 | July 20, 2005 | July 28, 2005
July 6, 2005
Contact: Chad Hyslop 208.331.8400
chyslop@americanecology.com
AMERICAN ECOLOGY ANNOUNCES SCHEDULE FOR 2nd QUARTER 2005 RESULTS
Results Released July 19, 2005 Followed By Investor Call July 20
BOISE, Idaho July 6, 2005 –American Ecology Corporation [NASDAQ: ECOL], today announced that the Company will release second quarter 2005 financial results at 2pm Mountain Time on Tuesday, July 19, 2005. The company’s investor conference call will follow on Wednesday, July 20 at 10:00am Mountain Time.
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 877.331.8343. 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 19, 2005
Contact: Chad Hyslop 208.331.8400
chyslop@americanecology.com
AMERICAN ECOLOGY SECOND QUARTER OPERATING INCOME UP 56 PERCENT TO $5.9 MILLION
Quarterly Revenue Increases 36 Percent
BOISE, Idaho July 19, 2005 – American Ecology Corporation [NASDAQ: ECOL] today reported net income of $3.7 million, or $0.21 per fully diluted share for the quarter ended June 30, 2005, compared to net income of $16 million, or $0.90 per fully diluted share a year ago. Included in last year’s results are non-operating gains of $12.2 million. Operating income for the quarter increased to $5.9 million versus $3.8 million for the second quarter of 2004.
Second Quarter Results
Revenue for the second quarter increased $5.0 million, or 36 percent, from $13.8 million a year ago to $18.8 million in 2005. The increase in revenue was primarily attributable to a 25 percent increase in disposal volume and an eight percent increase in average selling price. Revenue for all four of the Company’s operating sites increased over both the same quarter last year and the first quarter of 2005. The Company’s Idaho site experienced the largest increase, posting a 45 percent increase in quarterly disposal volume and a like increase in revenue.
“During the second quarter, a number of previously delayed clean-up projects began shipping in earnest,” stated Stephen Romano, President and Chief Executive Officer. “These shipments, combined with our ongoing business, allowed us to take advantage of the largely fixed cost nature of the disposal business,” he explained.
Increased shipments under bundled rail transportation and disposal contracts significantly improved utilization of the Company’s railcar assets, further contributing to profitability. “Our transportation and disposal price bundling strategy is proving a successful platform for growth,” continued Romano, adding “Based on ongoing projects and our current sales outlook, we are confident that American Ecology will achieve 15 percent growth in 2005 operating income over 2004.”
The combined result of higher revenue and a relatively smaller increase in direct costs was a 45 percent increase in gross profit from $6.3 million, or 46 percent of revenue, in the second quarter of 2004 to $9.2 million, or 49 percent of revenue in the second quarter of 2005.
Selling, general & administrative expenses (SG&A) for the second quarter increased to $3.4 million, or 18 percent of revenue, compared to SG&A of $2.6 million, or 19 percent of revenue in the second quarter last year. The dollar increase in SG&A was principally attributable to increased legal fees associated with the Honeywell contract and other legal matters, higher accounting fees associated with Sarbanes-Oxley internal controls compliance, higher director fees and expenses and a management incentive plan accrual.
The increase in disposal revenue more than outweighed the increased costs, pushing operating income higher by $2.1 million to $5.9 million, compared to $3.8 million in the second quarter of 2004.
“The combination of higher waste volumes and a more profitable service mix pushed our gross margin to almost 50 percent during the quarter,” stated Senior Vice President and Chief Financial Officer, Jim Baumgardner, adding, “All four of the Company’s operating disposal sites were profitable for the quarter, and all four showed improvement over results for the first quarter of 2005.”
For the quarter just ended, the Company reported after-tax net income of $3.7 million, or $0.21 per fully diluted share, compared to after-tax net income of $16 million, or $0.90 per fully diluted share a year ago. Quarterly net income in 2004 was positively affected by a $920,000 one time gain on the sale of the Company’s former Oak Ridge, Tennessee processing business and an $11.3 million release of a valuation allowance for deferred tax assets.
Year-to-Date Results
Revenue for the six months ended June 30, 2005 reached $31.3 million, up 13 percent from the first six months of 2004. Waste volumes year-to-date increased 14 percent over 2004. This increase in revenue was substantially offset by higher costs, including underutilized transportation assets in the first quarter and volume-related variable costs in the second quarter, resulting in operating income of $7.2 million, identical to the same period last year. For the first six months of 2005, the Company reported net income of $4.6 million, or $.26 per fully diluted share, compared to net income of $18.5 million, or $1.04 per fully diluted share for the first half of 2004.
At June 30, the Company reported $12.6 million in cash and investments on hand and working capital of $19.3 million.
Other Updates
On June 8, 2005, the Company announced the award of a contract to transport, treat and dispose of contaminated soils from a Honeywell International Inc. site in Jersey City, New Jersey. Depending on the volume of waste shipped off-site, which has been estimated at one million tons, and the Company’s ability to successfully perform under the contract, management estimates revenue in the range of $175 to $240 million over a four to five year period. The Company began receiving initial waste shipments under this contract in July 2005.
A significant portion of the revenue derived from the Honeywell contract will include value added transportation services. As a result, management expects that while revenue dollars will increase, the Company’s gross margin relative to revenue will decrease.
As previously announced, the Company may invest up to $12 million in capital expenditures to support the Honeywell contract. Management currently estimates that total capital spending in 2005 may reach $20 million principally for railcars, disposal capacity expansion in Idaho, and new treatment buildings in Texas and Nevada. The new treatment building in Texas is expected to be completed in the next 30-45 days, allowing for the resumption of full waste treatment services.
On May 26, 2005 the Company declared a $0.15 per common share quarterly dividend for stockholders of record on July 1, 2005. The Company paid $2.6 million for the declared quarterly dividend on July 15, 2005. The Company intends that shareholders of record on October 3, 2005 and January 2, 2006 will also receive a $0.15 per share dividend, subject to ongoing compliance with applicable bank covenants.
The Company’s second quarter 2005 investor conference call will be held Wednesday, July 20, 2005 at 10:00 am Mountain Time. President and Chief Executive Officer Stephen Romano, Senior Vice President and Chief Financial Officer Jim Baumgardner, Vice President and Controller Michael Gilberg and Vice President for Sales and Marketing Steve Welling will host the call. Interested parties are invited to submit questions in advance to info@americanecology.com, or by facsimile to 208.331.7900. To join the call, dial 1.877.331.8343. 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, refineries and chemical manufacturing facilities. Headquartered in Boise, Idaho, the Company is the oldest radioactive and hazardous waste services company in the United States, having operated for more than fifty years.
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 will successfully meet its 2005 earnings estimates, receive projected waste shipments, resume full treatment services in Texas, increase earnings through the bundling of transportation and disposal services, prevail in pending litigation, collect 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
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
($ in 000's except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2005 2004 2005 2004
-------- --------- -------- ---------
Revenue $18,779 $ 13,795 $31,333 $ 27,700
Direct operating costs 9,559 7,449 18,272 15,061
------- -------- ------- --------
Gross profit 9,220 6,346 13,061 12,639
Selling, general and
administrative expenses 3,358 2,578 5,872 5,450
Business interruption insurance
claim -- -- (41) --
------- -------- ------- --------
Operating income 5,862 3,768 7,230 7,189
Interest income 93 45 178 81
Interest expense 48 49 95 98
Other income 22 20 39 65
------- -------- ------- --------
Income before income tax and
discontinued operations 5,929 3,784 7,352 7,237
Income tax (benefit) expense 2,223 (11,338) 2,790 (10,174)
------- -------- ------- --------
Income before discontinued
operations 3,706 15,122 4,562 17,411
Gain from discontinued
operations - Oak Ridge Facility -- 920 -- 1,069
------- -------- ------- --------
Net income $ 3,706 $ 16,042 $ 4,562 $ 18,480
======= ======== ======= ========
Basic earnings from continuing
operations .21 .88 .26 1.02
Basic earnings from discontinued
operations -- .05 -- .06
------- -------- ------- --------
Basic earnings per share $ .21 $ .93 $ .26 $ 1.08
======= ======== ======= ========
Diluted earnings from continuing
operations .21 .85 .26 .98
Diluted earnings from
discontinued operations -- .05 -- .06
------- -------- ------- --------
Diluted earnings per share $ .21 $ .90 $ .26 $ 1.04
======= ======== ======= ========
Dividends paid per common share $ -- $ -- $ -- $ --
======= ======== ======= ========
AMERICAN ECOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
($ in 000's except per share amounts)
June 30, Dec. 31,
2005 2004
--------- ---------
ASSETS
Current Assets:
Cash and cash equivalents $ 1,685 $ 2,160
Short term investments 10,960 10,967
Receivables, net 13,636 8,963
Insurance receivable 636 1,285
Prepayments and other 2,616 1,469
Deferred income taxes 5,613 5,613
-------- --------
Total current assets 35,146 30,457
Property and equipment, net 32,008 27,363
Facility development costs 6,478 6,478
Other assets 1,136 462
Deferred income taxes 10,338 12,473
-------- --------
Total assets $ 85,106 $ 77,233
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long term debt $ 1,459 $ 1,457
Accounts payable 3,176 3,022
Dividends payable 2,645 --
Deferred revenue 1,248 724
State burial fees payable 1,541 1,446
Management incentive plan payable 630 934
Customer advances 1,364 --
Customer refunds -- 2,512
Accrued liabilities 1,443 725
Accrued closure and post closure obligation,
current portion 2,323 2,323
-------- --------
Total current liabilities 15,829 13,143
Long term debt 2,004 2,734
Long term customer advances 2,136 --
Long term accrued liabilities 522 441
Accrued closure and post closure obligation,
excluding current portion 9,385 9,304
-------- --------
Total liabilities 29,876 25,622
-------- --------
Commitments and contingencies
Shareholders' equity:
Convertible preferred stock, 1,000,000
shares authorized,
Common stock, $.01 par value, 50,000,000
authorized, 17,635,709 and 17,398,494
shares issued and outstanding 176 174
Additional paid-in capital 52,715 51,015
Retained earnings 2,339 422
-------- --------
Total shareholders' equity 55,230 51,611
-------- --------
Total Liabilities and Shareholders' Equity $ 85,106 $ 77,233
======== ========
AMERICAN ECOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
($ in 000's except per share amounts)
Six Months Ended
June 30,
------------------
2005 2004
------- --------
Cash flows from operating activities:
Net income $ 4,562 $ 18,480
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, amortization, and accretion 3,066 3,029
Income from discontinued operations -- (1,069)
Income tax benefit on exercise of stock options 652 --
Deferred tax asset 2,135 (10,171)
Stock compensation 180 --
Changes in assets and liabilities:
Receivables (4,673) 3,059
Other assets (1,874) (685)
Closure and post closure obligation (460) (382)
Income taxes payable/receivable -- (201)
Accounts payable and accrued liabilities 2,256 1,494
------- --------
Net cash provided by operating activities 5,844 13,554
Cash flows from investing activities:
Capital expenditures (7,217) (2,394)
Proceeds from sale of assets 749 106
Transfers from cash to short term investments, net 7 (6,398)
------- --------
Net cash used by investing activities (6,461) (8,686)
Cash flows from financing activities:
Payments of indebtedness (728) (758)
Retirement of common stock warrants -- (5,500)
Stock options exercised 870 511
------- --------
Net cash provided (used) by financing activities 142 (5,747)
------- --------
Increase (decrease) in cash and cash equivalents (475) (879)
Net cash used in discontinued operations -- (2,594)
Cash and cash equivalents at beginning of period 2,160 6,674
------- --------
Cash and cash equivalents at end of period $ 1,685 $ 3,201
======= ========
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest $ 95 $ 98
Income taxes paid 4 201
Non-cash investing and financing activities:
Common stock dividends accrued 2,645 --
Common stock issued for director compensation 180 --
July 20, 2005
Contact: Chad Hyslop 208.331.8400
chyslop@americanecology.com
AMERICAN ECOLOGY REGISTERS STOCK FOR RESALE
BOISE, Idaho, July 20, 2005 – American Ecology Corporation [NASDAQ:ECOL] today announced it has filed a stock registration statement with the Securities and Exchange Commission on behalf of certain stockholders of the Company. The registration was declared effective by the Securities and Exchange Commission on July 20, 2005.
The registration statement, filed on July 19, 2005 with the Securities and Exchange Commission on Form S-3, registers 6,117,827 shares of common stock, principally owned by two members of the Board of Directors of the Company and their affiliates, for resale to the public from time to time over a two year period. The Company will not receive any proceeds from the sale of these shares.
These shares of common stock, which may be offered in one or more offerings and in any combination, will in each case be offered pursuant to a separate prospectus, supplemented as needed from time to time. A copy of the prospectus may be obtained by contacting Jim Baumgardner at American Ecology Corporation, 300 Mallard Drive, Suite 300, Boise, Idaho, 83706.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state in which such an offer, solicitation, or sale would be unlawful under the securities laws of any such state.
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 has disposal facilities in Idaho, Nevada, Washington and Texas, and is the nation’s oldest radioactive and hazardous waste services company.
Prospective buyers of the Company’s stock should carefully consider all risk factors and other information in the registration statement and related prospectus before deciding to invest in shares of the Company’s common stock. The risks and uncertainties described in the Company’s filings with the Securities and Exchange Commission are not the only ones faced by the Company. Additional risks and uncertainties not known to the Company or that management may now think are immaterial could also impair our business operations. If any of the risks noted in the registration statement and prospectus actually occur, the business, financial condition and results of operations of the Company could be materially and adversely affected. Under such conditions, the trading price of the Company’s common stock could materially decline.
For information on Risk Factors that could affect the Company’s business or the price of its common stock please refer to American Ecology Corporation’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Form S-3 and Prospectus filed with the Securities and Exchange Commission.
July 28, 2005
Contact: Chad Hyslop 208.331.8400
chyslop@americanecology.com
AMERICAN ECOLOGY ENTERS TEN YEAR SUBLEASE WITH STATE OF WASHINGTON FOR DISPOSAL FACILITY
Sublease Includes Four Ten Year Renewal Options
BOISE, Idaho July 28, 2005 – Stephen Romano, President and Chief Executive Officer of American Ecology Corporation [NASDAQ: ECOL], today announced that subsidiary US Ecology Washington, Inc. has entered into a renewable ten year sublease agreement with the Washington Department of Ecology to continue operating a low-level radioactive waste disposal facility on the U.S. Department of Energy Hanford Reservation near Richland, Washington.
“This renewal allows US Ecology to continue serving the low-level radioactive waste disposal needs of medical and academic institutions, government agencies, electric utilities, biotechnology companies and other industry in the Northwest and Rocky Mountain Compact regions,” Romano stated, adding “US Ecology places great value on its longstanding relationship with the State of Washington and its citizens and we are pleased to have successfully concluded this important agreement.”
Sublease terms include four ten year renewal options and an annual, inflation-adjusted rental payment of approximately $63,000. The sublease is consistent with a prime lease entered between the State of Washington and the federal government in 1964.
“Our Washington team looks forward to continuing to deliver safe, environmentally protective disposal services as we have since opening our Richland facility in 1965,” Romano concluded.
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, 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 fulfill the requirements of the sublease or generate future earnings. 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.