EXHIBIT 99
NEWS RELEASE
For Immediate Release / October 23, 2003
Contact: Chad Hyslop or Jim Baumgardner (208) 331-8400
info@americanecology.com www.americanecology.com
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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
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Revenue for the third quarter of 2003 increased 57%, reaching $17.3 million
compared to the $11.0 million reported for the same quarter last year. A large
remediation project shipped to the Company's Grand View, Idaho disposal facility
and revenue increases at the Company's Richland, Washington and Robstown, Texas
disposal facilities accounted for the quarterly increase in revenue.
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
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Revenue for the first nine months of 2003 reached $40.1 million compared to
$35.1 million for the first nine months of
2002. The increase in nine month revenue resulted from the strong third quarter
performance, overcoming lower year-to-date revenue in the first half of 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
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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,
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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
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.
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AMERICAN ECOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
($ in 000's except per share amounts)
Three Months Ended Sept 30, Nine Months Ended Sept 30,
2003 2002 2003 2002
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(Restated) (Restated)
Revenue $ 17,324 $ 11,048 $ 40,115 $ 35,077
Direct operating costs 10,383 6,417 22,423 18,433
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Gross profit 6,941 4,631 17,692 16,644
Selling, general and administrative expenses 3,302 2,691 11,088 8,439
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Income from operations 3,639 1,940 6,604 8,205
Interest income 312 7 334 31
Interest expense 60 221 219 726
Loss on write off of Ward Valley facility development costs -- -- 20,951 --
Other income (loss) 20 35 113 (290)
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Net income (loss) before income tax, discontinued operations,
and cumulative effect of change in accounting principal 3,911 1,761 (14,119) 7,220
Income tax expense (benefit) 18 (226) 73 (226)
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Net income (loss) before discontinued operations and cumulative
effect of change in accounting principal 3,893 1,987 (14,192) 7,446
Gain (loss) from discontinued operations - El Centro Landfill (15) 178 4,945 497
(Loss) from discontinued operations - Oak Ridge LLRW Facility (400) (1,099) (2,429) (1,898)
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Net Income (loss) before cumulative effect of change in
accounting principle 3,478 1,066 (11,676) 6,045
Cumulative effect of change in accounting principle -- -- -- 13,141
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Net income (loss) 3,478 1,066 (11,676) 19,186
Preferred stock dividends -- 100 64 297
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Net income (loss) available to common shareholders $ 3,478 $ 966 $ (11,740) $ 18,889
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Basic earnings (loss) from continuing operations .23 .12 (.86) .51
Basic earnings (loss) from discontinued operations (.02) (.06) .15 (.10)
Basic earnings from cumulative effect of accounting change -- -- -- .92
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Basic earnings (loss) per share $ .21 $ .06 $ (.71) $ 1.33
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Diluted earnings (loss) from continuing operations .22 .12 (.86) .45
Diluted earnings (loss) from discontinued operations (.02) (.06) .15 (.09)
Diluted earnings from cumulative effect of accounting change -- -- -- .83
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Diluted earnings (loss) per share $ .20 $ .06 $ (.71) $ 1.19
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Dividends paid per common share $ -- $ -- $ -- $ --
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<FN>
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 SHEETS
(Unaudited) ($ in 000's except per share amounts)
September 30, 2003 December 31, 2002
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ASSETS
Current Assets:
Cash and cash equivalents $ 6,503 $ 135
Receivables, net 13,425 10,460
Income taxes receivable 1 740
Prepayments and other 1,257 498
Deferred income taxes -- 2,745
Assets held for sale or closure 1,845 10,722
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Total current assets 23,031 25,300
Cash and investment securities, pledged 244 244
Property and equipment, net 28,017 26,998
Facility development costs 6,478 27,430
Deferred income taxes 8,284 5,539
Other assets 53 129
Assets held for sale or closure 2,254 1,485
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Total Assets $ 68,361 $ 87,125
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long term debt $ 1,494 $ 1,985
Accounts payable 3,599 2,192
Accrued liabilities 6,080 4,166
Accrued closure and post closure obligation, current portion 882 882
Income taxes payable -- 23
Current liabilities of assets held for sale or closure 3,662 7,965
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Total current liabilities 15,717 17,213
Revolving line of credit -- 603
Long term accrued liabilities 470 2,372
Long term debt 4,567 5,972
Accrued closure and post closure obligation, excluding current portion 9,364 9,318
Liabilities of assets held for sale or closure, excluding current portion 5,114 5,699
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Total liabilities 35,232 41,177
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Commitments and contingencies
Stockholders' 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, 16,967,946
and 14,539,264 shares issued and outstanding 170 145
Additional paid-in capital 54,686 55,789
Accumulated deficit (21,727) (9,987)
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Total stockholders' equity 33,129 45,948
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Total Liabilities and Stockholders' Equity $ 68,361 $ 87,125
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<FN>
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.