EX-99 3 doc2.txt EXHIBIT 99 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 ------------------------ ----------------------- 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 ------------------ 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 -------------------------- 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 ------------------------------------------------- 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, ------------------------ dial 1-877-679-9055. 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, 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. ###
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 -------------- -------------- -------------- -------------- (Restated) (Restated) Revenue $ 17,324 $ 11,048 $ 40,115 $ 35,077 Direct operating costs 10,383 6,417 22,423 18,433 -------------- -------------- -------------- -------------- Gross profit 6,941 4,631 17,692 16,644 Selling, general and administrative expenses 3,302 2,691 11,088 8,439 -------------- -------------- -------------- -------------- 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) -------------- -------------- -------------- -------------- 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) -------------- -------------- -------------- -------------- 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) -------------- -------------- -------------- -------------- 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 -------------- -------------- -------------- -------------- Net income (loss) 3,478 1,066 (11,676) 19,186 Preferred stock dividends -- 100 64 297 -------------- -------------- -------------- -------------- Net income (loss) available to common shareholders $ 3,478 $ 966 $ (11,740) $ 18,889 ============== ============== ============== ============== 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 -------------- -------------- -------------- -------------- Basic earnings (loss) per share $ .21 $ .06 $ (.71) $ 1.33 ============== ============== ============== ============== 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 -------------- -------------- -------------- -------------- Diluted earnings (loss) per share $ .20 $ .06 $ (.71) $ 1.19 ============== ============== ============== ============== Dividends paid per common share $ -- $ -- $ -- $ -- ============== ============== ============== ============== 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 -------------------- ------------------- 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 -------------------- ------------------- 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 -------------------- ------------------- Total Assets $ 68,361 $ 87,125 ==================== =================== 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 -------------------- ------------------- 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 -------------------- ------------------- Total liabilities 35,232 41,177 -------------------- ------------------- 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) -------------------- ------------------- Total stockholders' equity 33,129 45,948 -------------------- ------------------- Total Liabilities and Stockholders' Equity $ 68,361 $ 87,125 ==================== =================== 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.