-----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, T9vvZ9Rb6aM187fygfqJvAQ63iv6ZzlJr+J0Yx/mV8scbOSmY1cb8VRW0JGWd8Mw q0iETU+1TvH2MiUazIgBWw== 0001015402-05-000587.txt : 20050209 0001015402-05-000587.hdr.sgml : 20050209 20050209114521 ACCESSION NUMBER: 0001015402-05-000587 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050208 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050209 DATE AS OF CHANGE: 20050209 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: 05587286 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 body.txt AMERICAN ECOLOGY CORP. 8-K 02-08-2005 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 8, 2005 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 ----- offices) (Zip Code) (208) 331-8400 -------------- (Registrant's telephone number, including area code) 1 ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION On February 8, 2005, the Company issued a press release entitled "AMERICAN ECOLOGY POSTS $13.1 MILLION IN 2004 OPERATING INCOME". The press release, dated February 8, 2005, is attached as Exhibit 99 and incorporated by reference herein. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS The following exhibit is filed as part of this report: Exhibit 99 Press Release, dated February 8, 2005, entitled "AMERICAN ECOLOGY POSTS $13.1 MILLION IN 2004 OPERATING INCOME" 2 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. AMERICAN ECOLOGY CORPORATION (Registrant) Date: February 8, 2005 By: /S/ James R. Baumgardner ------------------------- James R. Baumgardner Senior Vice President, Chief Financial Officer, Secretary and Treasurer 3 EXHIBIT INDEX Exhibit Description - ------- ----------- Exhibit 99 Press Release, dated February 8, 2005, entitled "AMERICAN ECOLOGY POSTS $13.1 MILLION IN 2004 OPERATING INCOME" 4 EX-99.1 2 ex99_1.txt EXHIBIT 99.1 EXHIBIT 99 NEWS RELEASE For Immediate Release / February 8, 2005 Contact: Chad Hyslop or Jim Baumgardner (208) 331-8400 info@americanecology.com www.americanecology.com - ------------------------ ----------------------- AMERICAN ECOLOGY POSTS $13.1 MILLION IN 2004 OPERATING INCOME FOURTH QUARTER OPERATING INCOME INCREASES TO $3.4 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 twelve months ending December 31, 2004. For the fourth quarter of 2004, the Company reported net income of $3.2 million or $0.18 per fully diluted share compared to net income of $3.1 million or $0.17 per diluted share for the fourth quarter of 2003. For the twelve months ending December 31, 2004, the Company reported net income of $23.4 million, or $1.32 per share compared to a net loss of $8.7 million or ($0.52) per fully diluted share in 2003. For 2004, the Company reported operating income of $13.1 million or 35% higher than the $9.7 million in operating income posted in 2003. "American Ecology's core hazardous and radioactive waste treatment and disposal business delivered another quarter of strong earnings," Baumgardner stated, adding "The significant increase in operating income year over year demonstrates that our growth strategy is working." FOURTH QUARTER 2004 - ------------------- Revenue for the fourth quarter of 2004 decreased to $13.5 million, down $3.4 million from $16.9 million in 2003. This decrease in revenue reflected a large New Jersey clean up project shipped to the Company's Idaho facility in late 2003 which included a substantial transportation component and was not fully replaced by increased disposal revenue from other customers in 2004. Quarterly revenue was also adversely affected by a July 1, 2004 fire at the Company's Robstown, Texas facility which required the facility to suspend waste treatment operations. On December 1, 2004 the Texas facility resumed limited treatment operations. As previously disclosed, Texas treatment revenue was approximately $1 million per quarter prior to the fire. During the quarter, the Company recognized $431,000 of expected proceeds from business interruption insurance which reflects the actual incremental expenses incurred since July 1, 2004 directly resulting from the fire. The Company's total business interruption claim is materially larger. Management believes the full amount claimed is valid, and anticipates recognizing additional income when its claim is 1 fully resolved with its insurance carrier. The Company also impaired the assets destroyed by the fire and recognized the insured value of such assets during the quarter, resulting in a $275,000 net gain. "Future reported financial results will be affected until we resume full treatment operations and the business interruption claim is resolved," Baumgardner noted. As reported on December 10, 2004, the Company increased its estimate for closure and post-closure costs at its closed Sheffield, Illinois facility by $715,000 based on updated analyses. The combination of lower revenue and the increased closure estimate reduced gross profit to $5.1 million compared to gross profit of $5.9 million in the fourth quarter of 2003. While gross profit decreased, it did not decrease as much as revenue, allowing gross margin to increase to 38% of revenue in the fourth quarter of 2004 compared to 35% of revenue in the same quarter last year. This increase in gross margin reflects a lower percentage of quarterly revenue derived from low-margin transportation services. Selling, general & administrative expenses (SG&A) for the fourth quarter decreased to $2.1 million or 16% of revenue, compared to $2.7 million, or 16% of revenue in the same quarter last year. The decrease in fourth quarter SG&A primarily reflects a $461,000 reduction in the Company's allowance for doubtful accounts. "In 2004 the Company improved both the quality and turnover of its accounts and substantially reduced receivable write-offs compared to prior years." Baumgardner stated, adding "This progress allowed us to materially reduce our allowance for bad debt while maintaining an adequate allowance for the future." The Company's number of days sales outstanding, a measure of accounts receivable turnover, decreased to an average of 60 days outstanding for 2004, down from 68 days in 2003. In 2004, the Company wrote off $67,000 of bad debt, down from $228,000 in 2003. Despite lower revenue and the charge for the increased Illinois closed site reserve, lower SG&A and recognition of a portion of the business interruption claim allowed the Company to deliver operating income of $3.4 million, an 8% increase over the $3.1 million posted for the same quarter last year. TWELVE MONTHS 2004 - ------------------ Revenue for the twelve months ending December 31, 2004 declined 5% to $54.2 million compared to $57.0 million for 2003. The decrease in revenue was attributable to less transportation revenue, significantly decreased disposal volume at the Company's Texas facility following the July 1 fire, a slight decrease in the Idaho facility's disposal volume as certain projects were delayed into 2005, and a lower average selling price for the Company's disposal services. However, the lower volumes in 2 Texas and Idaho were offset by an 80% increase in volume at the Company's Beatty, Nevada facility. Overall waste volumes were up 2.5% over the previous year. 2004 gross profit dipped only slightly to $23.3 million or 43% of revenue, compared to gross profit of $23.6 million or 42% of revenue for 2003. While revenue decreased, gross profit remained at a similar level due to a higher proportion of treatment and disposal revenue versus lower margin transportation revenue in 2003. In 2004, treatment and disposal revenue represented 81% of total revenue, up from 77% of total revenue in 2003. For the year, SG&A decreased to $10.6 million or $3.3 million lower than 2003. Lower 2004 SG&A costs reflect materially reduced legal spending, a reduction in the allowance for doubtful accounts, and generally lower administrative costs due to improved business systems and efficiencies. In 2003 SG&A was negatively impacted by $1.8 million in legal expense for the Company's Ward Valley, California damages claim. As noted above, for the year ending December 31, 2004, the Company reported operating income of $13.1 million, or a 35% increase over the $9.7 million operating income posted in 2003. Large one-time events in both years contributed to the large swing in 2004 net income. In 2003, the Company wrote off a $21 million deferred site development asset following an adverse trial court ruling in the Ward Valley litigation and expensed an additional $1.8 million for related legal fees. The Company also expensed $2.5 million for discontinued operations at its former Oak Ridge, Tennessee facility, and posted a $5 million gain on sale of its Texas sanitary landfill in 2003. Following the June 2004 sale of the Oak Ridge facility, the Company recognized approximately $1 million of income and adjusted its valuation allowance on its deferred tax assets. This produced an $11.3 million tax benefit in the second quarter of 2004. Lastly, the July 1, 2004 fire at the Texas facility had a material adverse impact on net income for the year. "For the first time in over a decade, American Ecology entered the new year fully focused on its core waste treatment and disposal business," stated President and Chief Executive Officer Stephen Romano, adding, "With full resumption of treatment services in Texas, continued efficient operation of all four of our disposal facilities and a solid sales outlook, management is targeting operating income growth of 15% for 2005." CONFERENCE CALL - --------------- The Company's fourth quarter and full year 2004 investor conference call will be held Wednesday, February 9, 2005 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 3 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 join the call, dial 1-877-331-8343. 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, refineries and chemical manufacturing 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 2005 earnings estimates, succeed in its business strategy, prevail in pending litigation, or collect insurance claims. 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. 4
AMERICAN ECOLOGY CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) ($ IN 000'S EXCEPT PER SHARE AMOUNTS) Three Months Ended Year Ended December 31, December 31, 2004 2003 2004 2003 -------- -------- -------- --------- Revenue $13,538 $16,932 $54,167 $ 57,047 Direct operating costs 8,440 11,056 30,897 33,479 -------- -------- -------- --------- Gross profit 5,098 5,876 23,270 23,568 Selling, general and administrative expenses 2,136 2,731 10,553 13,819 Business interruption insurance claim (431) -- (431) -- -------- -------- -------- --------- Operating income 3,393 3,145 13,148 9,749 Interest income 70 13 203 347 Interest expense 48 47 194 266 Fire related property insurance claims net of impairment 275 -- 275 -- Loss on write off of Ward Valley facility development costs -- -- -- 20,951 Other income 25 11 99 124 -------- -------- -------- --------- Income (loss) before income tax and discontinued operations 3,715 3,122 13,531 (10,997) Income tax expense (benefit) 458 (1) (8,832) 72 -------- -------- -------- --------- Income (loss) before discontinued operations 3,257 3,123 22,363 (11,069) Gain from discontinued operations - El Centro Landfill -- 49 -- 4,994 Gain (loss) from discontinued operations - Oak Ridge Facility (21) (88) 1,047 (2,517) -------- -------- -------- --------- Net income (loss) 3,236 3,084 23,410 (8,592) Preferred stock dividends -- -- -- 64 -------- -------- -------- --------- Net income (loss) available to common shareholders $ 3,236 $ 3,084 $23,410 $ (8,656) ======== ======== ======== ========= Basic earnings (loss) from continuing operations .19 .18 1.30 (.67) Basic earnings (loss) from discontinued operations (.00) (.00) .06 .15 -------- -------- -------- --------- Basic earnings (loss) per share $ .19 $ .18 $ 1.36 $ (.52) ======== ======== ======== ========= Diluted earnings (loss) from continuing operations .18 .17 1.26 (.67) Diluted earnings (loss) from discontinued operations (.00) (.00) .06 .15 -------- -------- -------- --------- Diluted earnings (loss) per share $ .18 $ .17 $ 1.32 $ (.52) ======== ======== ======== ========= Dividends paid per common share $ .25 $ -- $ .25 $ -- ======== ======== ======== =========
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AMERICAN ECOLOGY CORPORATION CONSOLIDATED BALANCE SHEETS (UNAUDITED) ($ IN 000'S EXCEPT PER SHARE AMOUNTS) December 31, 2004 December 31, 2003 ------------------ ------------------- ASSETS Current Assets: Cash and cash equivalents $ 2,160 $ 6,674 Short term investments 10,967 -- Receivables, net 8,963 12,596 Insurance receivable 1,285 -- Prepayments and other 1,469 1,051 Deferred income taxes 5,613 3,222 Assets held for sale or closure -- 938 ------------------ ------------------- Total current assets 30,457 24,481 Property and equipment, net 27,363 28,317 Facility development costs 6,478 6,478 Other assets 462 731 Deferred income taxes 12,473 5,062 Assets held for sale or closure -- 1,557 ------------------ ------------------- Total assets $ 77.233 $ 66,626 ================== =================== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Current portion of long term debt $ 1,457 $ 1,475 Accounts payable 3,022 1,678 Accrued liabilities 6,341 4,788 Accrued closure and post closure obligation, current portion 2,323 1,828 Current liabilities of assets held for sale or closure -- 1,907 ------------------ ------------------- Total current liabilities 13,143 11,676 Long term debt 2,734 4,200 Long term accrued liabilities 441 454 Accrued closure and post closure obligation, excluding current portion 9,304 9,296 Liabilities of assets held for sale or closure, excluding current portion -- 4,649 ------------------ ------------------- Total liabilities 25,622 30,275 ------------------ ------------------- Commitments and contingencies Shareholders' equity: Convertible preferred stock, 1,000,000 shares authorized Common stock, $.01 par value, 50,000,000 authorized, 17,398,494 and 17,033,118 shares issued and outstanding 174 170 Additional paid-in capital 51,015 54,824 Retained earnings (deficit) 422 (18,643) ------------------ ------------------- Total shareholders' equity 51,611 36,351 ------------------ ------------------- Total Liabilities and Shareholders' Equity $ 77,233 $ 66,626 ================== ===================
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AMERICAN ECOLOGY CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) ($ IN 000'S EXCEPT PER SHARE AMOUNTS) For the Year Ended December 31, ------------------------------- 2004 2003 --------- -------- Cash flows from operating activities: Net income (loss) $ 23,410 $(8,592) Adjustments to reconcile net income (loss)to net cash provided by operating activities: Depreciation, amortization, and accretion 5,957 6,973 (Income) loss from discontinued operations (1,047) (2,477) Income tax benefit on exercise of stock options 634 -- Loss on write off of Ward Valley facility development costs -- 20,951 Reversal of deferred income tax valuation allowance (9,800) -- Stock compensation -- 38 Changes in assets and liabilities: Receivables 3,633 (2,078) Other assets (605) (206) Closure and post closure obligation (526) (537) Income taxes payable/receivable -- 715 Accounts payable and accrued liabilities 2,884 (218) --------- -------- Net cash provided by operating activities 24,540 14,569 Cash flows from investing activities: Capital expenditures (4,984) (6,270) Proceeds from the sale of assets 179 -- Transfers between cash and short term investments (10,967) -- --------- -------- Net cash used by investing activities (15,772) (6,270) Cash flows from financing activities: Dividends paid (4,345) -- Payments of indebtedness (1,484) (3,053) Warrants purchased and canceled (5,500) -- Stock purchased and canceled -- (231) Retirement of Series D Preferred Stock -- (6,406) Stock options and warrants exercised 1,061 4,002 --------- -------- Net cash used by financing activities (10,268) (5,688) --------- -------- Increase (decrease) in cash and cash equivalents (1,500) 2,611 Net cash provided (used) by discontinued operations (3,014) 3,928 Cash and cash equivalents at beginning of year 6,674 135 --------- -------- Cash and cash equivalents at end of year $ 2,160 $ 6,674 ========= ======== Supplemental disclosures of cash flow information: Cash paid during the year for: Interest expense $ 194 $ 266 Income taxes paid 335 93 Non-cash investing and financing activities: Preferred stock dividends accrued -- -- Acquisition of equipment with notes/capital leases -- 168
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