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October October 13, 2003 | October 23, 2003
October 13, 2003 AMERICAN ECOLOGY ANNOUNCES EARNINGS RELEASE, THIRD QUARTER 2003 INVESTOR CONFERENCE CALL Earnings Release Scheduled October 23, 2003; Investor Conference Call to be held October 27, 2003 BOISE, Idaho –American Ecology Corporation [NASDAQ: ECOL], today announced that the Company will release third quarter 2003 earnings before the NASDAQ National stock market opens on Thursday, October 23, 2003 followed by an investor conference call on Monday, October 27 at 10:00 am Mountain Time. On the conference call Monday, October 27 at 10:00 am Mountain Time, Chief Executive Officer Stephen Romano, Chief Financial Officer James Baumgardner, and Corporate Controller Michael Gilberg will present third quarter financial results, discuss operations, discontinued operations in Oak Ridge, Tennessee, 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.
October 23, 2003 STRONG OPERATING PERFORMANCE DRIVES AMERICAN ECOLOGY THIRD QUARTER EARNINGS Quarterly Net Profit Reaches $3.5 Million BOISE, Idaho – Jim Baumgardner, Senior Vice President and Chief Financial Officer of American Ecology Corporation [NASDAQ: ECOL], today announced financial results for the three and nine months ending September 30, 2003. For the quarter ended September 30, 2003, the Company reported net income of $3.5 million or $0.20 per fully diluted share, a 218% increase over net income of $1.1 million or $0.06 per diluted share for the quarter ending September 30, 2002. “The significant growth in quarterly earnings reflects continued strong performance at our Grand View, Idaho disposal facility and improved disposal volumes shipped to our other disposal facilities,” Baumgardner stated. Third Quarter 2003 Gross profit increased 52%, reaching $7.0 million or 40% of revenue compared to a gross profit of $4.6 million or 42% of revenue in the third quarter of 2002. The slight decline in gross margin reflects a larger percentage of quarterly revenue from low-margin transportation services on the large remedial project shipped to Grand View, Idaho during the quarter. Selling, general & administrative expenses (SG&A) for the third quarter increased to $3.3 million or 19% of revenue, compared to $2.7 million, or 25% of revenue in the same quarter last year. This increase primarily reflects higher insurance and personnel costs. Despite higher quarterly SG&A costs, higher revenue and gross profit allowed the Company to post an operating profit from continuing operations of $3.6 million during the quarter compared to the $1.9 million operating profit posted during the same quarter last year, an 89% increase. At the Company’s Oak Ridge facility, $400,000 of additional expense was incurred during the quarter for final settlement with the Company’s local union, a 1998 workers compensation claim and an ongoing contract dispute. As previously announced, the Company has entered into a non-binding letter of intent with a prospective buyer who has continued to perform due diligence during the third quarter. This due diligence is taking place concurrently with radiation survey work at the site following removal of all customer waste during the first half of the year. 9 Months Year-to-Date 2003 Year-to-date gross profit reached $17.7 million or 44% of revenue compared to a gross profit of $16.6 million or 47% of revenue for the first nine months of 2002. For the nine months ending September 30, 2003, the Company reported a net loss of $11.7 million or ($0.71) per share, compared to net income of $19.2 million or $1.19 per diluted share for the same nine months last year. A series of large one-time events in the first half of both years caused this large swing in reported earnings. In 2002, the Company recognized a cumulative effect gain of $13.1 million in implementing a new standard governing accounting for disposal site closure obligations. In 2003, the Company wrote off $21 million following an adverse trial court ruling in its Ward Valley, California damages claim. The Company also expensed $1.8 million in legal fees associated with the Ward Valley litigation, posted a $5 million gain from the sale of its former El Centro, Texas municipal waste landfill, and expensed an additional $2.4 million for discontinued operations in Oak Ridge, Tennessee. For the nine months ending September 30, 2003, SG&A increased to $11.1 million or $2.7 million higher than the nine months in 2002. This was primarily due to $1.8 million in Ward Valley legal expenses, higher insurance premiums, and costs associated with implementing centralized accounting and information systems. Financial Metrics and Other Financial Information At September 30, 2003, the Company reported $6.5 million in cash on hand, $7.3 million of working capital, and no balance on its $6 million line of credit. During 2003, the Company has proactively managed its capital structure by retiring preferred stock, and refinancing and reducing debt. As a result, the Company has reduced its borrowed funds by $4.8 million, reduced interest expense by $507,000, and reduced the Company’s weighted average cost of debt from 8.0% to 3.7% since September 30, 2002. During the third quarter of 2003, the Company completed construction of a new $4.5 million disposal cell at its Grand View, Idaho facility as well as smaller capital projects at other facilities. Through September 30, 2003 the Company has spent $5.1 million on capital projects, primarily on development of the new Idaho disposal capacity. “We have successfully executed our financial strategy of growing earnings by leveraging the fixed costs of our disposal facilities, controlling spending, reducing debt, and focusing on cash flow,” Baumgardner concluded. “While it is too early to conclude that disposal volumes are increasing nationally, American Ecology captured significant additional disposal volume and revenue in the quarter just ended,” stated President and Chief Executive Officer Stephen Romano, concluding, “We believe our market position and cost structure will allow us to compete effectively and generate solid earnings in future periods” The Company’s third quarter 2003 investor conference call will be held Monday, October 27, 2003 at 10:00 am Mountain Time. President and Chief Executive Officer Stephen Romano, Senior Vice President and Chief Financial Officer Jim Baumgardner, and Vice President 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 continued or improved earnings, exit or sell its Oak Ridge facility without incurring additional unreserved costs, 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)
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. AMERICAN ECOLOGY CORPORATION CONSOLIDATED BALANCE SHEET (Unaudited) ($ in 000’s except per share amounts)
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. |
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