EXHIBIT 99
NEWS RELEASE
For Immediate Release / February 17, 2004
Contact: Chad Hyslop or Jim Baumgardner (208) 331-8400
info@americanecology.com www.americanecology.com
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AMERICAN ECOLOGY POSTS SOLID FOURTH
QUARTER EARNINGS OF $3.1 MILLION
STRONG PERFORMANCE MARKS EIGHTH CONSECUTIVE QUARTER OF OPERATING PROFIT
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 twelve months ending December 31, 2003. For
the quarter ended December 31, 2003, the Company reported net income of $3.1
million or $0.17 per fully diluted share compared to a net loss of $415 thousand
or ($0.03) per diluted share for the fourth quarter of 2002. For the twelve
months ending December 31, 2003, the Company reported a net loss of $8.6
million, or ($0.52) per share, reflecting the $21 million write-off of its Ward
Valley assets in the first quarter of 2003. This compared to net income of $18.8
or $1.15 per fully diluted share in 2002. The Company reported operating income
of $9.7 million for 2003 compared to $8.9 million operating income posted in
2002.
"The continuing, strong performance of our core disposal business
demonstrates the Company's ability to grow operating profit year to year."
Baumgardner stated. "Net earnings for 2003 were adversely affected by a large
one-time write-off in the first quarter, higher legal expenses, and significant
expenditures for discontinued operations that we do not expect to recur in
2004," Baumgardner added.
FOURTH QUARTER 2003
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Revenue for the fourth quarter of 2003 increased 45%, reaching $16.9
million compared to the $11.7 million reported for the same quarter last year. A
large soil remediation project shipped to the Company's Grand View, Idaho
disposal facility, and improved performance at the Company's Richland,
Washington, Beatty, Nevada and Robstown, Texas disposal facilities accounted for
the fourth quarter revenue increase.
"Each of the Company's four disposal facilities closed the year with
increasing revenue and a profitable quarter," Baumgardner noted.
Quarterly gross profit increased 19%, reaching $5.9 million or 35% of
revenue compared to gross profit of $4.9 million or 42% of revenue in the fourth
quarter of 2002. The decline in gross margin reflects a larger percentage of
quarterly revenue from low-margin transportation services on shipments to the
Company's Idaho site.
Selling, general & administrative expenses (SG&A) for the fourth quarter
decreased to $2.7 million or 16% of revenue, compared to $4.2 million, or 36% of
revenue in the same quarter last year. This decrease reflects reduced litigation
expenses and continuing efforts to reduce overhead. The combination of higher
revenue, higher gross profit and lower SG&A allowed the Company to post an
operating profit from continuing operations of $3.1 million, a 331% increase
above the $730,000 operating profit posted for the same quarter last year.
TWELVE MONTHS 2003
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During 2003, revenue increased 22% to $57.0 million compared to $46.8
million for 2002. The increase in revenue was directly attributable to increases
in disposal volume and revenue at the Company's Idaho disposal site. While down
year over year, the Company's Robstown, Texas and Beatty, Nevada facilities each
increased revenue during the last six months of 2003 over the first six months.
2003 gross profit reached $23.6 million or 41% of revenue compared to gross
profit of $21.6 million or 46% of revenue for 2002. The decline in gross margin
reflects a larger percentage of revenue from low-margin transportation services
during the second half of 2003.
For the year, SG&A increased to $13.8 million, or $1.2 million higher than
in 2002. This increase was due to $1.8 million in first half expenses for
litigation in the Ward Valley, California damages claim, higher insurance
premiums, and one-time costs of implementing centralized accounting and
information systems partially offset by cost control initiatives.
As noted, for the year ending December 31, 2003, the Company reported
operating income of $9.7 million, or 9% growth over the $8.9 million operating
income posted in 2002.
Large one-time events in the first half of both years produced large swings
in reported net earnings. In 2002, the Company recognized a cumulative effect
gain of $13.1 million to implement Financial Accounting Standard No. 143, a new
accounting standard governing disposal site closure obligations. In 2003, the
Company wrote off a $21 million deferred site development asset following an
adverse trial court ruling in the Ward Valley litigation. In 2003, the Company
also expensed $1.8 million in fees associated with the Ward Valley trial,
expensed an additional $2.5 million for discontinued operations in Oak Ridge,
Tennessee, and posted a $5 million gain on the sale of its former El Centro,
Texas municipal waste landfill.
OTHER FINANCIAL INFORMATION
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At December 31, 2003, the Company reported $6.7 million in cash on hand,
$12.8 million of working capital, and a zero balance on its $8 million line of
credit. During 2003, the Company retired all remaining preferred stock and
reduced total liabilities by $10.9 million, eliminating $400,000 in annual
dividends and decreasing annual interest expense by $554,000, respectively.
"We exited 2003 financially stronger, more liquid and less leveraged than
we have been in a decade," Baumgardner stated, concluding, "Management believes
our strong financial condition and low cost structure provide us a significant
competitive advantage."
At the Company's discontinued operations in Oak Ridge, Tennessee,
activities continue to prepare the site for sale. The Company completed
radiation surveys following removal of all customer waste during the first half
of the year and is actively marketing the facility's assets for resale.
"We made tremendous progress in 2003 cleaning up and preparing the Oak
Ridge facility for sale," stated President and Chief Executive Officer Stephen
Romano, adding, "Final disposition of this discontinued operation is a major
objective."
The Company previously entered a non-binding letter of intent with a
potential Oak Ridge buyer that expired on December 5, 2003 without being
exercised. Although no assurance can be given that the Company can be
successful, the Company is in active discussions with third parties interested
in acquiring the facility and its assets.
"With our departure from non-core businesses, implementation of
significantly improved centralized information and accounting systems and what
we consider the best set of specialized treatment and disposal assets in the
industry, we expect to deliver solid earnings growth and cash flow going
forward," Romano commented, concluding "During 2004, the Company fully expects
to exceed the 9% growth in operating earnings achieved in 2003."
CONFERENCE CALL
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The Company's fourth quarter and full year 2003 investor conference call
will be held Friday, February 20, 2004 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 are invited to submit questions
in advance to INFO@AMERICANECOLOGY.COM, or by facsimile to 208-331-7900. To
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join the call, dial 1-888-747-3526. Participants will be asked to provide their
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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 meet its growth
targets, generate continued or improved earnings, dispose of its Oak Ridge
facility without incurring additional 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 most recent Annual
Report on Form 10-K and Quarterly Report 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)
3 Months Ended Dec. 31 Year Ended Dec. 31
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2003 2002 2003 2002
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Revenue $ 16,932 $ 11,712 $57,047 $ 46,789
Direct operating costs 11,056 6,790 33,479 25,223
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Gross profit 5,876 4,922 23,568 21,566
Selling, general and administrative expenses 2,731 4,192 13,819 12,631
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Income from operations 3,145 730 9,749 8,935
Interest income 13 -- 347 31
Interest expense 47 94 266 820
Loss on write off of Ward Valley facility development costs -- -- 20,951 --
Other income (expense) 11 (267) 124 (557)
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Income (loss) before income tax, discontinued operations and
cumulative effect of change in accounting principle 3,122 369 (10,997) 7,589
Income tax expense (benefit) (1) (8,279) 72 (8,505)
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Income (loss) before discontinued operations and cumulative effect
of change in accounting principle 3,123 8,648 (11,069) 16,094
Income (loss) from discontinued operations (net of tax of $0) (39) ( 9,063) 2,477 (10,464)
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Income (loss) before cumulative effect of change in accounting 3,084 (415) (8,592) 5,630
principle
Cumulative effect of change in accounting principle (net of tax of $0) -- -- -- 13,141
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Net income (loss) 3,084 (415) (8,592) 18,771
Preferred stock dividends -- 99 64 398
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Net income (loss) available to common shareholders $ 3,084 $ (514) $(8,656) $ 18,373
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Basic earnings (loss) per share $ .18 $ (.03) $ (.52) $ 1.28
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Diluted earnings (loss) per share $ .17 $ (.03) $ (.52) $ 1.15
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Dividends paid per common share $ -- $ -- $ -- $ --
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AMERICAN ECOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
($ IN 000'S EXCEPT PER SHARE AMOUNTS)
As of December 31,
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2003 2002
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ASSETS
Current Assets:
Cash and cash equivalents $ 6,674 $ 135
Receivables, net 12,596 10,460
Income taxes receivable 2 740
Prepayments and other 1,049 498
Deferred income taxes 3,222 2,745
Assets held for sale or closure 938 10,722
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Total current assets 24,481 25,300
Cash and investment securities, pledged 170 244
Property and equipment, net 28,317 26,998
Facility development costs 6,478 27,430
Other assets 561 129
Deferred income taxes 5,062 5,539
Assets held for sale or closure 1,557 1,485
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Total Assets $ 66,626 $87,125
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long term debt $ 1,475 $ 1,985
Accounts payable 1,678 2,192
Accrued liabilities 4,968 4,166
Accrued closure and post closure obligation, current portion 1,828 882
Income taxes payable -- 23
Current liabilities of assets held for sale or closure 1,727 7,965
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Total current liabilities 11,676 17,213
Long term debt 4,200 5,972
Long term accrued liabilities 454 2,372
Revolving line of credit -- 603
Accrued closure and post closure obligation, excluding current portion 9,296 9,318
Liabilities of assets held for sale or closure, excluding current portion 4,649 5,699
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Total liabilities 30,275 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, 17,033,118
and 14,539,264 shares issued and outstanding 170 145
Additional paid-in capital 54,824 55,789
Accumulated deficit (18,643) (9,987)
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Total shareholders' equity 36,351 45,948
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Total Liabilities and Shareholders' Equity $ 66,626 $87,125
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