EXHIBIT 99
NEWS RELEASE
For Immediate Release / April 28, 2003
Contact: Chad Hyslop or Jim Baumgardner (208) 331-8400
info@americanecology.com www.americanecology.com
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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.
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"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,
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dial 1-877-679-9055. Participants will be asked to provide their name and
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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.
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AMERICAN ECOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
($ IN 000'S EXCEPT PER SHARE AMOUNTS)
Three Months Ended
MARCH 31, 2003 March 31, 2002
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Revenue $ 10,771 $ 13,424
Direct operating costs 5,984 6,175
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Gross profit 4,787 7,249
Selling, general and administrative expenses 4,497 3,541
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Income from operations 290 3,708
Investment income -- 11
Interest income (expense) (121) (265)
Other income (loss) -- (465)
Write Down of Ward Valley Assets (20,951) --
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Income (loss) before income tax, discontinued operations and cumulative effect
of change in accounting principle (20,782) 2,989
Income tax expense (benefit) (8) --
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Income (loss) before discontinued operations and cumulative effect of change
in accounting principle (20,774) 2,989
Gain from discontinued operations - El Centro Landfill 4,944 190
(Loss) from discontinued operations - Oak Ridge LLRW Facility (1,337) (401)
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Income (loss) before cumulative effect of change in accounting principle (17,167) 2,778
Cumulative effect of accounting change -- 13,141
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Net income (loss) (17,167) 15,919
Preferred stock dividends 64 98
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Net income (loss) available to common shareholders ($17,231) $ 15,821
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Basic (loss) earnings from continuing operations (1.34) .22
Basic (loss) earnings from discontinued operations .23 (.02)
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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Diluted (loss) earnings from continuing operations (1.34) .17
Diluted (loss) earnings from discontinued operations .23 (.02)
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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Dividends paid per common share $ -- $ --
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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.
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AMERICAN ECOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
($ IN 000'S EXCEPT PER SHARE AMOUNTS)
MARCH 31, 2003 DECEMBER 31, 2002
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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
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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
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Total Assets $ 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
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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
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Total liabilities 36,272 41,177
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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,
0 and 100,001 shares issued and outstanding; -- 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)
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Total shareholders' equity 27,617 45,948
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Total Liabilities and Shareholders' Equity $ 63,889 $ 87,125
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