EX-99 3 a4580526ex991.txt DURATEK, INC. PRESS RELEASE Exhibit 99.1 Duratek Announces 2003 Year-End Results COLUMBIA, Md.--(BUSINESS WIRE)--Feb. 25, 2004--Duratek, Inc. (NASDAQ:DRTK) today announced it achieved record income from operations of $34.9 million for the year ended December 31, 2003 as compared to $28.8 million in 2002, an increase of 21%. Net income excluding the effects of the previously announced preferred stock repurchase, write-off of deferred financing costs, and the cumulative effect of a change in accounting principle was $18.2 million for 2003, an increase of 32% as compared to $13.8 million in the prior year. This improvement was primarily due to the strong performance in the Commercial Services Segment, particularly on certain higher margin projects. Earnings per share for the year-ended December 31, 2003, excluding the effects of the preferred stock repurchase, the write-off of deferred financing costs, and the cumulative effect of the change in accounting principle was $0.94 as compared to $0.72 in 2002. The Company reported a net loss per diluted share for the quarter and year ended December 31, 2003 of ($2.46) and ($1.62) as compared to net income per diluted share of $0.17 and $0.72 for the comparable periods in 2002, respectively. The table below summarizes the results described above and the effect of the preferred stock repurchase on the 2003 year-end results. Year Ended December 31, ------------------ ($000's) 2003 2002 Reported net income (loss) attributable to common shareholders $(21,918) $ 12,486 Plus: Preferred stock dividends and repurchase $ 36,154 $ 1,279 Plus: Write-off of deferred financing costs associated with terminated credit facility $ 2,546 $ - Less: Tax benefit of deferred financing costs written off $ (1,019) $ - Plus: Cumulative effect of change in accounting principle, net of tax $ 2,414 $ - Equals: Net income excluding effects of preferred stock repurchase, write-off of deferred financing, and cumulative effect of change in accounting principle $ 18,177 $ 13,765 Diluted weighted average common shares outstanding excluding effect of preferred stock repurchase 19,372 19,110 Earnings per share excluding effects of preferred stock repurchase, write-off of deferred financing, and cumulative effect of change in accounting principle $ 0.94 $ 0.72 ========= ======== Revenues decreased 2% in 2003 to $285.9 million as compared to $291.5 million in 2002, reflecting the Company's strategic shift to emphasize higher margin projects. Income from operations and revenues for the fourth quarter 2003 were $7.5 million and $72.8 million as compared to $7.0 million and $77.2 million, respectively, for the comparable period in 2002. Robert E. Prince, President and CEO said, "We are pleased with the progress made in strengthening our position as a U.S. leader in radioactive materials management and disposition. In 2003, we saw growth in profitability primarily due to our focus on higher margin opportunities where the Company has distinct advantages. In addition, we added new work in exciting areas that present good prospects for future growth." On December 17, 2003 the Company announced that it repurchased substantially all of the its 8% Cumulative Convertible Redeemable Preferred Stock beneficially owned by the Carlyle Group for $51.6 million in cash which included $2.4 million for dividends in arrears. The purchase price was based on a price of $9.74 per share of Common Stock. As a result of this transaction, the Company recognized a charge of $35.2 million, which represented the differential between the book value of the preferred shares and the repurchase price plus related transaction costs. A new $145 million credit facility was put in place to finance the preferred shares, refinance the existing indebtedness, and fund the working capital requirements of the Company. The Carlyle Group originally invested in the Company nine years ago and continues to be the largest stockholder with approximately 23% of the Company's outstanding Common Stock. Additionally, a non-cash charge of $1.5 million net of income taxes was recorded for the write-off of the unamortized deferred financing costs related to the credit facility, which was terminated. All of these charges were recognized in the fourth quarter of 2003. Robert F. Shawver, Executive Vice President and CFO said, "The Company's solid financial performance and strong cash generation allowed us to complete the preferred stock repurchase and put in a new credit facility at the end of 2003. This resulted in retiring the equivalent of 26% of the diluted shares, establishing a new $115 million term debt facility, positioning the Company with cash on hand and a line of credit sufficient to meet the future operating needs of the business." An unaudited comparative summary of Duratek's results of operations for the fourth quarter and year ended December 31, 2003 and 2002 is as follows (in thousands, except per share data): Three Months Ended Year Ended ------------------ ------------------- December December December December 31 31 31 31 2003 2002 2003 2002 --------- -------- --------- --------- Revenues $72,764 $77,175 $285,901 $291,536 Income from operations $7,527 $7,036 $34,946 $28,819 Income taxes $1,924 $2,455 $11,671 $9,673 Net income before cumulative effect of a change in accounting principle $1,842 $3,271 $16,650 $13,765 Net income $1,842 $3,271 $14,236 $13,765 Preferred stock repurchase, dividends, and charges for accretion $(35,209) $(315) $(36,154) $(1,279) Net income (loss) per share: Basic Before cumulative effect of a change in accounting principle $(2.46) $0.21 $(1.44) $0.92 Cumulative effect of a change in accounting principle - - $(0.18) - ========= ======== ========= ========= $(2.46) $0.21 $(1.62) $0.92 ========= ======== ========= ========= Diluted Before cumulative effect of a change in accounting principle $(2.46) $0.17 $(1.44) $0.72 Cumulative effect of a change in accounting principle - - $(0.18) - --------- -------- --------- --------- $(2.46) $0.17 $(1.62) $0.72 ========= ======== ========= ========= A conference call will be held today at 11:00 a.m. Eastern Time. Investors can listen to the conference call by logging into www.duratekinc.com or by calling 1-888-928-9510, pass code Duratek. In addition to the webcast and teleconference, the Company will be placing a presentation of the data on its website under the investor relations financial reports section. We encourage investors to listen to the call in addition to viewing the presentation. A replay of the call will be available at approximately 1:00 p.m. today through March 5, 2004 at 4:00 p.m. by dialing 1-800-873-2169. The webcast will be archived on the Duratek website for at least 30 days. Duratek provides safe, secure radioactive materials disposition. Certain statements contained in this press release may constitute "forward-looking statements" within the meaning of Section 21E(i)(1) of the Securities Exchange Act of 1934. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Duratek's actual results to be materially different from any future results expressed or implied by these statements. Such factors include the following: the Company's ability to manage its commercial waste processing operations, including obtaining commercial waste processing contracts and processing waste under such contracts in a timely and cost-effective manner; the timing and award of contracts by the U.S. Department of Energy for the cleanup of waste sites administered by it; the Company's ability to integrate acquired companies; the acceptance and implementation of the Company's waste treatment technologies in the government and commercial sectors; and other large technical support services projects. All forward-looking statements are also expressly qualified in their entirety by the cautionary statements included in the Company's SEC filings, including its quarterly reports on Form 10-Q and its annual report on Form 10-K. DURATEK, INC. AND SUBSIDIARIES Consolidated Balance Sheets December 31, 2003 and 2002 (in thousands of dollars, except per share amounts) 2003 2002 --------- --------- Assets Current assets: Cash $35,174 $2,323 Accounts receivable, less allowance for doubtful accounts of $842 in 2003 and $2,694 in 2002 38,378 48,420 Cost and estimated earnings in excess of billings on uncompleted contracts 15,464 12,828 Prepaid expenses and other current assets 5,778 9,055 Deferred income taxes 1,112 2,168 --------- --------- Total current assets 95,906 74,794 Retainage 7,555 4,969 Property, plant and equipment, net 69,416 69,287 Goodwill 70,797 70,797 Other intangible assets 4,718 5,675 Decontamination and decommissioning trust fund 20,767 19,693 Other assets 15,043 8,917 --------- --------- Total assets $284,202 $254,132 ========= ========= Liabilities and Stockholders' Equity Current liabilities: Current portion of long-term debt $1,150 $10,400 Accounts payable 12,851 13,911 Accrued expenses and other current liabilities 39,592 41,147 Unearned revenues 21,410 16,476 Waste processing and disposal liabilities 8,001 9,936 --------- --------- Total current liabilities 83,004 91,870 Long-term debt, less current portion 114,825 50,749 Facility and equipment decontamination and decommissioning liabilities 40,855 28,778 Other noncurrent liabilities 1,860 4,472 Deferred income taxes 4,434 2,649 --------- --------- Total liabilities 244,978 178,518 --------- --------- 8% Cumulative Convertible Redeemable Preferred Stock, $.01 par value; 160,000 shares authorized, 3,002 shares issued and outstanding at December 31, 2003, 157,525 shares issued and outstanding at December 31, 2002 300 15,752 --------- --------- Stockholders' equity: Preferred stock - $0.01 par value; authorized 4,840,000 shares; none issued - - Common stock - $0.01 par value; authorized 35,000,000 shares; issued 15,229,100 shares in 2003 and 15,142,419 shares in 2002 152 151 Capital in excess of par value 78,375 77,715 Accumulated deficit (30,026) (8,108) Treasury stock at cost, 1,612,376 shares in 2003 and 2002 (9,577) (9,577) Deferred compensation - (319) --------- --------- Total stockholders' equity 38,924 59,862 --------- --------- --------- --------- Total liabilities and stockholders' equity $284,202 $254,132 ========= ========= DURATEK, INC. AND SUBSIDIARIES Consolidated Statements of Operations Years ended December 31, 2003, 2002 and 2001 (in thousands of dollars, except per share amounts) 2003 2002 2001 --------- --------- --------- Revenues $285,901 $291,536 $279,173 Cost of revenues 217,493 229,134 237,454 --------- --------- --------- Gross profit 68,408 62,402 41,719 Selling, general and administrative expenses 33,462 33,583 34,991 --------- --------- --------- Income from operations 34,946 28,819 6,728 Interest expense (6,903) (5,518) (10,606) Other income, net 76 285 191 --------- --------- --------- Income (loss) before income taxes (benefit), proportionate share of income (loss) of joint ventures, and cumulative effect of a change in accounting principle 28,119 23,586 (3,687) Income taxes (benefit) 11,671 9,673 (729) --------- --------- --------- Income (loss) before proportionate share of income (loss) of joint ventures and cumulative effect of a change in accounting principle 16,448 13,913 (2,958) Proportionate share of income (loss) of joint ventures 202 (148) (148) --------- --------- --------- Net income (loss) before cumulative effect of a change in accounting principle 16,650 13,765 (3,106) Cumulative effect of a change in accounting principle, net of tax (2,414) - - --------- --------- --------- Net income (loss) 14,236 13,765 (3,106) Preferred stock repurchase, dividends and charges for accretion (36,154) (1,279) (1,495) --------- --------- --------- Net income (loss) attributable to common stockholders $(21,918) $12,486 $(4,601) ========= ========= ========= Net income (loss) per share: Basic Before cumulative effect of a change in accounting principle $(1.44) $0.92 $(0.34) Cumulative effect of a change in accounting principle (0.18) - - --------- --------- --------- $(1.62) $0.92 $(0.34) ========= ========= ========= Diluted Before cumulative effect of a change in accounting principle $(1.44) $0.72 $(0.34) Cumulative effect of a change in accounting principle (0.18) - - --------- --------- --------- $(1.62) $0.72 $(0.34) ========= ========= ========= DURATEK, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows Years ended December 31, 2003, 2002 and 2001 (in thousands of dollars) 2003 2002 2001 -------- -------- -------- Cash flows from operating activities: Net income (loss) $14,236 $13,765 $(3,106) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 15,279 11,850 14,428 Deferred income taxes 4,445 5,038 36 Cumulative effect of a change in accounting principle 2,414 - - Stock compensation expense 318 318 318 Income tax benefit from exercise of non-qualified stock options 196 63 - Allowance for doubtful accounts 46 458 981 Proportionate share of (income) loss of joint ventures (45) 148 148 Gain on settlement, net of settlement expenses - - (4,182) Changes in operating assets and liabilities: Accounts receivables 10,151 (844) 1,059 Income taxes recoverable - (1,140) 6,516 Costs and estimated earnings in excess of billings on uncompleted contracts (6,830) 12,711 (1,103) Prepaid expenses and other current assets 871 1,504 2,998 Accounts payable, and accrued expenses and other current liabilities (2,188) (3,258) (2,757) Unearned revenues 4,934 2,984 (2,254) Waste processing and disposal liabilities (1,935) (4,226) 2,267 Facility and equipment decontamination and decommissioning liabilities 959 943 176 Retainage (1,582) (2,932) (2,496) Other (593) (261) 296 -------- -------- -------- Net cash provided by operating activities 40,676 37,121 13,325 -------- -------- -------- Cash flows from investing activities: Additions to property, plant and equipment (4,839) (2,649) (4,211) Advances to employees, net 71 (85) 79 Other (449) (79) 1,711 -------- -------- -------- Net cash used in investing activities (5,217) (2,813) (2,421) -------- -------- -------- Cash flows from financing activities: Net repayments of borrowings under revolving credit facility - (12,500) (6,000) Net proceeds from (repayments of) short- term borrowings - (7,763) 7,763 Proceeds from long-term debt 115,000 - - Repayments of long-term debt (61,149) (10,651) (10,400) Preferred stock repurchase (49,181) - - Deferred financing costs (4,209) (1,098) (1,246) Preferred stock dividends paid (3,101) - (267) Repayments of capital lease obligations (388) (442) (790) Proceeds from issuance of common stock 420 330 70 Treasury stock purchases - (302) (24) -------- -------- -------- Net cash provided used in financing activities (2,608) (32,426) (10,894) -------- -------- -------- Net increase in cash 32,851 1,882 10 Cash, beginning of year 2,323 441 431 -------- -------- -------- Cash, end of year $35,174 $2,323 $441 ======== ======== ======== CONTACT: Duratek, Inc., Columbia Diane R. Brown, 410-312-5100 www.duratekinc.com