Exhibit 99
NEWS RELEASE
For Immediate Release / 2:01 pm MTN April 20, 2004
Contact: Chad Hyslop or Jim Baumgardner (208) 331-8400
info@americanecology.com www.americanecology.com
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AMERICAN ECOLOGY POSTS $3.4 MILLION
FIRST QUARTER OPERATING INCOME
COMPANY UPGRADES 2004 OUTLOOK
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, 2004. American
Ecology posted net income of $2.4 million or $0.14 per fully diluted share,
compared to a net loss of $17.2 million, or $1.11 per fully diluted share for
the quarter ending March 31, 2003.
Operating income, a key measure of financial performance, increased from
$290,000 for the first quarter last year to $3.4 million for the first quarter
of 2004. The results marked the ninth consecutive quarter of positive operating
income. For the second consecutive quarter, each of the Company's four disposal
facilities posted positive operating income and showed improved operating income
over the same quarter last year.
First quarter 2004 revenue reached $13.9 million or 29% higher than the
$10.8 million in revenue for the first quarter of 2003. A combination of higher
waste volumes and higher average selling prices yielded the increase in
quarterly revenue. At the Company's Idaho site, a slightly lower average selling
price was more than offset by higher volume, allowing the site to increase
revenue by almost 30%. At the Company's Nevada and Texas facilities, average
selling prices increased due to a more favorable mix of higher-priced niche
services generating increased revenue from the first quarter of last year at
both sites. The Company's rate-regulated Washington facility also posted another
strong quarter.
"Increased waste volume and a higher overall average selling price produced
higher revenue," stated Baumgardner, adding, "Given the largely fixed cost
nature of our business, this higher revenue produced improved fall through to
the bottom line and another solid quarter of operating earnings."
Selling, general & administrative expenses (SG&A) for the first quarter
decreased to $2.9 million, or 21% of revenue, compared to SG&A of $4.5 million
or 42% of revenue in the first quarter last year. The decrease was primarily due
to $1.5 million in Ward Valley litigation expenses in 2003 which did not reoccur
in 2004.
The Company recognized $149,000 of income at its discontinued Oak Ridge,
Tennessee operation. This gain reflected collection of aged accounts receivable
in excess of the Oak Ridge facility's allowance for doubtful accounts. During
the quarter, the Company entered into a non-binding letter of intent with a
potential new buyer for the Oak Ridge facility. Although no assurance can be
given that a transaction will be consummated, disposing of the Oak Ridge asset
remains a top management priority.
"Solid operating income and cash flow in the first quarter of 2004
continued to strengthen the Company's overall financial condition," Baumgardner
concluded.
During the first quarter of 2004, the Company redeemed a warrant to
purchase 1,349,843 shares of common stock for $5.5 million or an equivalent of
$4.07 per underlying common share. The redeemed warrant represented
approximately 8% of the Company's outstanding shares and eliminated the
Company's sole outstanding warrant to acquire common stock. At quarter end the
Company had $10.8 million of cash on hand.
Also during the quarter, the Company recognized $1.2 million of non-cash
income tax expense as it utilized the benefit of its net operating loss
carry-forwards and reduced the related deferred tax asset. The Company did not
recognize tax expense in 2003 due to the tax loss resulting from the $21 million
write-off of its Ward Valley asset. At March 31, 2004 the Company had an
approximately $16 million valuation allowance against $23 million of gross
deferred tax assets, consisting primarily of net operating loss carry-forwards,
resulting in a $7 million net deferred tax asset. The Company reviews the
deferred tax asset and related valuation allowance for appropriateness at least
annually.
"The first quarter of 2004 highlights the underlying strength of our core
disposal assets" stated President and Chief Executive Officer Stephen Romano.
"By combining our high throughput commodity business with increased delivery of
higher margin niche services, American Ecology simultaneously increased waste
volumes as well as overall average selling price."
The Company previously reported that it expected 2004 operating income to
exceed the 9% growth in operating income achieved in 2003. Management is
upgrading its 2004 outlook and now expects 2004 operating income to increase by
more than 15% over 2003 results.
"Efficient performance by all four American Ecology disposal facilities
combined with a favorable sales outlook and improving national economy lead us
to upgrade our operating income forecast," Romano stated, concluding, "We now
believe greater than 15% growth in operating income for 2004 is achievable."
The Company's first quarter 2004 investor conference call will be held
Wednesday, April 21, 2004 (tomorrow) at 10:00 am Mountain Time. Mr. Romano, Mr.
Baumgardner, and Controller Michael Gilberg will host the call. Interested
parties may submit questions in advance to INFO@AMERICANECOLOGY.COM, or by
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facsimile to 208-331-7900. To join the call, dial 1-(888) 747-3446.
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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, meet its 2004 operating income forecast, prevail in pending litigation
to recover monetary damages, 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, or
regarding income taxes, 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, 2004 March 31, 2003
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Revenue $ 13,905 $ 10,771
Direct operating costs 7,612 5,984
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Gross profit 6,293 4,787
Selling, general and administrative expenses 2,872 4,497
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Operating income 3,421 290
Interest income 36 --
Interest expense 49 121
Loss on write off of Ward Valley facility development costs -- 20,951
Other income 45 --
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Income (loss) before income tax and discontinued operations 3,453 (20,782)
Income tax expense (benefit) 1,164 (8)
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Income (loss) before discontinued operations 2,289 (20,774)
Gain from discontinued operations - El Centro Landfill -- 4,944
Gain (loss) from discontinued operations - Oak Ridge LLRW Facility 149 (1,337)
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Net income (loss) 2,438 (17,167)
Preferred stock dividends -- 64
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Net income (loss) available to common shareholders $ 2,438 $ (17,231)
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Basic earnings(loss) from continuing operations .13 (1.34)
Basic earnings from discontinued operations .01 .23
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Basic earnings (loss) per share $ .14 $ (1.11)
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Diluted earnings (loss) from continuing operations .13 (1.34)
Diluted earnings from discontinued operations .01 .23
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Diluted earnings (loss) per share $ .14 $ (1.11)
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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)
MARCH 31, 2004 December 31, 2003
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ASSETS
Current Assets:
Cash and cash equivalents $ 10,771 $ 6,674
Receivables, net 8,576 12,596
Income taxes receivable 52 2
Prepayments and other 861 1,049
Deferred income taxes 2,057 3,222
Assets held for sale or closure 735 938
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Total current assets 23,052 24,481
Cash and investment securities, pledged 131 170
Property and equipment, net 27,500 28,317
Facility development costs 6,478 6,478
Other assets 565 561
Deferred income taxes 5,062 5,062
Assets held for sale or closure 1,557 1,557
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Total assets $ 64,345 $ 66,626
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long term debt $ 1,474 $ 1,475
Accounts payable 1,605 1,678
Accrued liabilities 6,501 4,788
Accrued closure and post closure obligation, current portion 1,828 1,828
Current liabilities of assets held for sale or closure 928 1,907
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Total current liabilities 12,336 11,676
Long term debt 3,835 4,200
Long term accrued liabilities 513 454
Accrued closure and post closure obligation, excluding current portion 9,405 9,296
Liabilities of assets held for sale or closure, excluding current portion 4,608 4,649
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Total liabilities 30,697 30,275
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Commitments and contingencies
Shareholders' equity:
Convertible preferred stock, 1,000,000 shares authorized
Common stock, $.01 par value, 50,000,000 authorized, 17,175,150
and 17,033,118 shares issued and outstanding 172 170
Additional paid-in capital 49,681 54,824
Accumulated deficit (16,205) (18,643)
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Total shareholders' equity 33,648 36,351
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Total Liabilities and Shareholders' Equity $ 64,345 $ 66,626
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