-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, P/Om3vLaLf9nqKMMsXpP84OsZPUcU8RXvhPxqchdbwzE56A4M//Gcwqbx1MtGW/M 81KBU8CKkmRXi9VseI6tuQ== 0001015402-03-000357.txt : 20030213 0001015402-03-000357.hdr.sgml : 20030213 20030213170741 ACCESSION NUMBER: 0001015402-03-000357 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030213 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030213 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN ECOLOGY CORP CENTRAL INDEX KEY: 0000742126 STANDARD INDUSTRIAL CLASSIFICATION: REFUSE SYSTEMS [4953] IRS NUMBER: 953889638 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-11688 FILM NUMBER: 03560796 BUSINESS ADDRESS: STREET 1: 805 W IDAHO STREET 2: STE 200 CITY: BOSIE STATE: ID ZIP: 83702 BUSINESS PHONE: 2083318400 MAIL ADDRESS: STREET 1: 805 W IDAHO STREET 2: STE 200 CITY: BOISE STATE: ID ZIP: 83702 8-K 1 doc1.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): February 13, 2003 AMERICAN ECOLOGY CORPORATION ------------------------------------------------------ (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 0-11688 95-3889638 -------- ------- ---------- (State or other jurisdiction of (Commission File Number) (I.R.S. Employer incorporation or organization) Identification Number) Lakepointe Centre I, 300 E. Mallard, Suite 300 Boise, Idaho 83706 ------------ ----- (Address of principal executive (Zip Code) offices) (208) 331-8400 -------------- (Registrant's telephone number, including area code) ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. On February 13, 2003, American Ecology Corporation issued a press release to announce that its wholly owned subsidiary, Texas Ecologists, Inc. sold the El Centro municipal waste landfill in Robstown, Texas to a subsidiary of Allied Waste Industries, Inc. The press release, dated February 13, 2003, is attached as Exhibit 99 and incorporated by reference herein. The El Centro Landfill had revenues of $2,563,000 and net income of $466,000 for the year ending December 31, 2002. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits. The following exhibit is filed as part of this report: Exhibit 10.70 Royalty Provisions of Purchase Agreement for El Centro Landfill Dated February 13, 2003 Exhibit 99 Press Release, dated February 13, 2003, entitled "AMERICAN ECOLOGY SELLS TEXAS MUNICIPAL WASTE LANDFILL TO ALLIED WASTE FOR $10 MILLION, FUTURE ROYALTIES" This Form 8-K contains forward-looking statements related to unknown risks and uncertainties. These risks include, but are not limited to access to capital, as well as compliance with and changes to applicable laws and regulations, exposure to litigation, access to insurance and financial assurances, new technologies, competitive environment, labor issues, and loss of major contracts. The audited consolidated financial statements and the notes thereto filed on Form 10-K for the year ending December 31, 2001 contains additional risk factors and an expanded disclosure of these risks. When the Company uses words like "may," "believes," "expects," "anticipates," "should," "estimate," "project," "plan," their opposites and similar expressions, the Company is making forward-looking statements. These terms are most often used in statements relating to business plans, strategies, anticipated benefits or projections about the anticipated revenues, earnings or other aspects of our operating results. The Company makes these statements in an effort to keep stockholders and the public informed about our business based on our current expectations about future events. Such statements should be viewed with caution and are not guarantees of future performance or events. Our business is subject to uncertainties, risks and other influences, many of which the Company has no control over. Additionally, these factors, either alone or taken together, could have a material adverse effect on the Company and could change whether any forward-looking statement ultimately turns out to be true. The Company undertakes no obligation to publicly release updates or revisions to these statements. The above discussion should be read in conjunction with the audited consolidated financial statements and the notes thereto filed on Form 10-K for the year ending December 31, 2001. SIGNATURES - ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. 2 AMERICAN ECOLOGY CORPORATION (Registrant) Date: February 13, 2003 By: /S/ James R. Baumgardner James R. Baumgardner Senior Vice President and Chief Financial Officer 3 EX-10.70 3 doc2.txt EXHIBIT 10.70 ROYALTY PROVISIONS OF PURCHASE AGREEMENT FOR EL CENTRO LANDFILL DATED FEBRUARY 13, 2003 After the Closing, (Allied Waste Landfill Holdings, Inc., a Delaware corporation ("AWLH"), and Allied Waste Systems Holdings, Inc., a Delaware corporation ("AWSH" and collectively with AWLH, "Buyers")); Buyers shall cause the Partnership to pay to (American Ecology Holdings Corporation, a Delaware corporation ("AEHC"), and American Ecology Services Corporation, a Delaware corporation ("AESC" and collectively with AEHC, "Sellers")) Sellers a royalty (the "Royalty") for all volumes of waste (excluding Texas Class I industrial waste which, if accepted, shall be subject to a separate royalty payment as described in Section 3.4.2) disposed of at the Landfill after the Closing. The Royalty shall be due throughout the life of the Landfill, and shall survive any subsequent transfers of the Landfill or of any ownership interest therein. The Royalty amount to be paid shall be (a) $1.50 per ton for the first 35,750 tons delivered during each Reporting Quarter, (b) $1.00 per ton for the next 35,750 tons delivered during each Reporting Quarter, and (c) $2.00 per ton for each additional ton delivered during any Reporting Quarter. If, after the Closing, the Partnership or any successor, in its sole discretion, obtains a permit to accept Texas Class I (also known as "Class 1") industrial waste at the Landfill, Buyers shall cause the Partnership to pay Sellers a royalty payment of $15.00 per ton (the "Class I Royalty") on all such Texas Class I industrial waste disposed of at the Landfill during each Reporting Quarter. The Class I Royalty shall be due throughout the life of the Landfill, and shall survive the transfer of the Landfill or of any ownership interest therein. No payment other than the Class I Royalty shall be due on any such Texas Class I industrial waste. Notwithstanding the actual volume of waste disposed of at the Landfill during any calendar year, if the total amount of all Royalty payments and Class I Royalty payments by the Partnership to Sellers for any calendar year is less than $215,000 (the "Minimum Royalty"), Buyers shall cause the Partnership to pay Sellers an amount such that the total payments to Sellers for such calendar year equals $215,000; provided, however, if the Landfill is unable or restricted in its ability to receive waste as the result of legal or regulatory circumstances beyond the reasonable control of the Partnership or acts of God ("Acts of Force Majeure"), the amount of the Minimum Royalty shall be reduced pro rata for each day that the Landfill is subject to such limitations. The obligation to pay the Minimum Royalty shall terminate after the aggregate amount of all Royalty payments, Class I Royalty payments and Minimum Royalty payments equals $14,000,000. The obligation to pay the Minimum Royalty shall survive any subsequent transfers of the Landfill or of any ownership interest therein. The Minimum Royalty shall be adjusted once annually, commencing on January 1st of each year, by the percentage increase or decrease, if any, in the consumer price index published by the Bureau of Labor Statistics of the United States Department of Labor, All Items, for all South urban consumers, 1982-84 = 100 based on the most recent month for which the index has been published before such January 1st. In the event that the specified index ceases to be available, the parties shall use the most closely comparable index then available. For the avoidance of doubt, Buyers acknowledge and agree that their obligation to continue paying Royalties under Section 3.4.1 and Class I Royalties under Section 3.4.2 shall not be affected or terminated by the termination of Buyers' Minimum Royalty requirement once the aggregate amount of all Royalty payments and Class I Royalty payments equals $14,000,000. The parties acknowledge and agree that from and after the Closing, cubic yards of both compacted and uncompacted waste may be received at the Landfill, and it is the intention of the parties that all such waste accepted at the Landfill shall be weighed. If the Landfill scales are unavailable, Sellers and the Partnership shall use the conversion factor described in this Section 3.4.4 to convert the volume into tons. Therefore, the parties agree that for purposes of computing the Royalty and the Class I Royalty, waste that is received at the Landfill and not weighed by the Landfill scales shall be converted to tons by applying a conversion factor of 3 to 1 (i.e., 3 cubic yards is equal to 1 ton). No Royalty, Class I Royalty or other payment of any type shall be due on materials received at the Landfill and diverted to another facility for disposal, recycling or other disposition or for materials received at the Landfill for which the Partnership does not receive a transportation or disposal fee to accept and does not pay any taxes that are used as alternative daily cover. Sellers and Parent acknowledge and agree that: (a) other than with respect to the Minimum Royalty, the Partnership shall be obligated to pay the Royalty and Class I Royalty only if, as and when the Landfill accepts for disposal the 4 applicable type of waste after the Closing; and (b) the Partnership shall have the sole and absolute discretion to operate the Landfill and Assets in any manner whatsoever, or not at all, to accept or not accept waste, and shall have no obligation to operate the Landfill or Assets in order to maximize the amount of any Royalty, Class I Royalty or other payment due to Sellers. Sellers and Parent further acknowledge and agree that the Royalty, the Class I Royalty and the Minimum Royalty shall only be payable with respect to the 160 acres of real property that as of the Closing constitute the boundary of the Landfill, and that no Royalty, Class I Royalty, Minimum Royalty or other payment shall be payable on any future Landfill expansion outside the existing 160 acres of real property. Buyers acknowledge and agree that any Landfill expansion within the existing 160 acres shall be subject to the Royalty and Class I Royalty, as applicable. The Royalty and Class I Royalty shall be paid to Sellers within 45 days after the end of each Reporting Quarter. Any amount due to meet the Minimum Royalty shall be paid to Sellers within 45 days after the end of each calendar year. From and after the Closing, Buyers shall cause the Partnership to maintain true and correct books and records of account in connection with the operation of the Landfill. Parent, at its expense (except as hereinafter provided) shall have the right to review or audit (in Parent's discretion) the books and records of the Partnership that are directly relevant to determining compliance with the provisions of this Section 3.4. Such review or audit shall be upon at least 10 days' prior notice, at reasonable times, and no more than once per calendar year during the period when the Partnership's royalty obligations under this Section 3.4 are in effect. Upon completion of the review or audit, the results shall be presented to Buyers and Parent, and, subject to the provisions of Article 16, Buyers shall promptly pay to Sellers the amount of any Royalty payments or Class I Royalty payments shown to be due. Subject to the provisions of Article 16, any amount as shown by the review or audit by which the total amount of Royalty payments and/or Class I Royalty payments for any period exceeds the amount due shall be promptly returned to Buyers. If the review or audit determines that the shortfall in Royalty payments and/or Class I Royalty payments exceeds by 10% or more the amount due, the cost of such review or audit shall be borne by Buyers. 5 EX-99 4 doc3.txt EXHIBIT 99 [GRAPHIC OMITTED] NEWS RELEASE FOR IMMEDIATE RELEASE / THURSDAY, FEBRUARY 13, 2003 Contact: Chad Hyslop (208) 331-8400 chyslop@americanecology.com www.americanecology.com --------------------------- ----------------------- AMERICAN ECOLOGY SELLS TEXAS MUNICIPAL WASTE LANDFILL TO ALLIED WASTE FOR $10 MILLION, FUTURE ROYALTIES COMPANY RETAINS OWNERSHIP OF TEXAS ECOLOGISTS HAZARDOUS WASTE DISPOSAL SITE BOISE, Idaho - Stephen Romano, President and Chief Executive Officer of American Ecology Corporation [NASDAQ: ECOL], today announced the sale of the Company's El Centro municipal and industrial waste landfill located near Corpus Christi, Texas to a subsidiary of Allied Waste Industries, Inc. ("Allied") for $10 million cash at closing and future volume-based royalty payments. "Monetizing this non-core asset provides capital for continued expansion of our core hazardous, industrial and radioactive waste disposal business," Romano stated, continuing, "And allows us the opportunity to improve our capital structure by retiring or repaying relatively high cost capital and/or debt instruments." "Allied is well positioned to grow El Centro revenue and earnings through integration with its substantial existing municipal and industrial waste collection operation, so this is a good deal for both companies," Romano added. Under the Agreement, the purchase agreement also provides incentives for Allied to bring certain industrial waste to the Texas Ecologists hazardous waste facility, and for the Company to utilize the El Centro landfill. Opened in July 2002, the El Centro solid waste landfill was carried on the Company's books at approximately $7 million prior to sale and, when combined with reduction in liabilities and the recognition of certain future minimum royalties, should result in a pre-tax gain on sale of approximately $5 million, which will be recognized during the first quarter of 2003. "While we are no longer in the municipal waste services business, the Company will remain an active member of the local community through our Texas Ecologists hazardous waste facility," Romano noted, concluding "We look forward to focusing future efforts on growth of our core business." Conference Call - --------------- The fourth quarter and 2002 full year investor conference call will be held Thursday, February 20, 2002 at 10:00 am Mountain Time. Interested parties may submit questions in advance to info@americanecology.com, or by facsimile at ------------------------ 208-331-7900. To join the call, dial 1-877-679-9055. Participants will be asked -------------- to provide their name and affiliation prior to joining the call. American Ecology Corporation, through its subsidiaries, provides radioactive, PCB, hazardous and non- 6 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. 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 core business growth strategy, generate future earnings, record a $5 million pre-tax gain on the sale, or realize all possible royalty payments under the El Centro sale agreement. For information on factors that could cause actual results to differ from expectations and financial information regarding the classification of the El Centro assets, please refer to American Ecology Corporation's Report on Form 10-K, which will be filed with the Securities and Exchange Commission on February 18, 2003. 7 -----END PRIVACY-ENHANCED MESSAGE-----