EX-99.1 2 a4684412ex991.txt PRESS RELEASE EXHIBIT 99.1 Duratek Reports Second Quarter 2004 Results COLUMBIA, Md.--(BUSINESS WIRE)--July 21, 2004--Duratek, Inc. (NASDAQ:DRTK) today announced net income of $5.6 million, or $0.39 per diluted share, for the three-month period ended June 27, 2004, as compared to net income of $6.6 million, or $0.34 per diluted share, for the comparable period in 2003. Revenues were $73.6 million for the three months ended June 27, 2004 as compared to $76.8 million for the comparable period in 2003. The decrease in revenues of $3.2 million, for the quarter, was primarily due to an anticipated and planned reduction in work performed by the Company on a project to stabilize radioactive waste stored in tanks at the Department of Energy's Hanford site as the current efforts are focused more on construction where the company plays a smaller role. For the six month period ended June 27, 2004, net income was $8.7 million, or $0.60 per diluted share, as compared to net income before cumulative effect of change in accounting principle of $9.2 million, or $0.47 per diluted share, for the comparable period in 2003. Revenues were $137.7 million for the six months ended June 27, 2004 as compared to $140.6 million during the comparable period in 2003. The slight decrease in revenues of $2.9 million, or 2%, for the first six months of the year was primarily due to the reasons expressed above. Net income per diluted share increased by approximately 28% for the first six months of the year as compared to the same period in 2003. Operating margins improved for the first half to 12.8% as compared to 12.3% for the same period last year. Based on this solid performance, the Company made an accelerated debt pay down of $15 million in June. Robert E. Prince, President and CEO said, "The Company remains on course, focusing on higher margin work and on cash generation while at the same time positioning itself to capture some exciting new growth opportunities. We are very pleased with our progress on both of these important efforts." Robert F. Shawver, Executive Vice President and CFO added, "We are particularly pleased with the results as compared to last year considering the fact that in 2003 we had a record quarter due to the completion of two very high margin Commercial Services projects. Our consistent income from operations performance along with the reduction in the number of shares outstanding due to the retirement of the preferred stock in December 2003 resulted in per share earnings growth and a $15 million accelerated debt pay down." An unaudited comparative summary of the three and six month results of operations for 2004 and 2003 is as follows (in thousands of dollars, except per share data): Three Months Ended Six Months Ended ------------------- ------------------- June 27, June 29, June 27, June 29, 2004 2003 2004 2003 --------- --------- --------- --------- Revenues $ 73,555 $ 76,790 $137,737 $140,620 Income from operations $ 10,315 $ 12,015 $ 17,600 $ 17,251 Income before income taxes $ 9,169 $ 10,983 $ 14,170 $ 15,043 Income taxes $ 3,526 $ 4,393 $ 5,526 $ 6,017 Net income before cumulative effect of a change in accounting principle $ 5,638 $ 6,583 $ 8,723 $ 9,175 Net income attributable to common stockholders $ 5,598 $ 6,268 $ 8,671 $ 6,131 Net income (loss) per share: Basic: Before cumulative effect of a change in accounting principle $ 0.40 $ 0.46 $ 0.63 $ 0.63 Cumulative effect of a change in accounting principle - - - $ (0.18) --------- --------- --------- --------- $ 0.40 $ 0.46 $ 0.63 $ 0.45 ========= ========= ========= ========= Diluted: Before cumulative effect of a change in accounting principle $ 0.39 $ 0.34 $ 0.60 $ 0.47 Cumulative effect of a change in accounting principle - - - $ (0.12) --------- --------- --------- --------- $ 0.39 $ 0.34 $ 0.60 $ 0.35 ========= ========= ========= ========= Consolidated balance sheets, statements of operations and statements of cash flows are attached. 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 888-913-9967, passcode Duratek. In addition to the webcast and teleconference, the Company will be placing a presentation of the data on its website under 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 August 11, 2004 by dialing 866-487-7596. The webcast will be archived on the Duratek website for at least 30 days. Duratek provides safe, secure radioactive materials disposition and nuclear facility operations for commercial and government customers. 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, the timing and award of contracts by the U.S. Department of Energy for the cleanup of waste sites administered by it; 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 (in thousands of dollars, except per share amounts) June 27, December 31, 2004 2003 ------------ ------------ Assets (unaudited) (1) Current assets: Cash $ 27,765 $ 35,174 Accounts receivable, less allowance for doubtful accounts of $843 in 2004 and $842 in 2003 49,160 38,378 Cost and estimated earnings in excess of billings on uncompleted contracts 19,824 15,464 Prepaid expenses and other current assets 6,684 7,760 ------------ ------------ Total current assets 103,433 96,776 Retainage 6,861 6,685 Property, plant and equipment, net 67,879 69,416 Goodwill 70,797 70,797 Other intangible assets 4,237 4,718 Decontamination and decommissioning trust fund 19,175 20,767 Other assets 15,191 13,985 ------------ ------------ Total assets $ 287,573 $ 283,144 ============ ============ Liabilities and Stockholders' Equity Current liabilities: Current portion of long-term debt $ 1,171 $ 1,150 Accounts payable 9,131 12,851 Accrued expenses and other current liabilities 47,090 39,592 Unearned revenues 26,277 21,410 Waste processing and disposal liabilities 8,305 8,001 ------------ ------------ Total current liabilities 91,974 83,004 Long-term debt, less current portion 99,804 114,825 Facility and equipment decontamination and decommissioning liabilities 39,694 40,855 Other noncurrent liabilities 6,866 6,294 ------------ ------------ Total liabilities 238,338 244,978 ------------ ------------ 8% Cumulative Convertible Redeemable Preferred Stock, $.01 par value; 160,000 shares authorized, 158 shares issued and outstanding at June 27, 2004 and 3,002 shares issued and outstanding at December 31, 2003 16 300 Stockholders' equity: Preferred stock - $0.01 par value; authorized 4,740,000 shares; none issued - - Series B junior participating preferred stock, $.01 par value; 100,000 shares authorized; none issued - - Common stock - $0.01 par value; authorized 35,000,000 shares; issued 15,869,561 shares in 2004 and 15,229,100 shares in 2003 158 152 Capital in excess of par value 81,316 78,375 Accumulated deficit (21,355) (30,026) Treasury stock at cost, 1,770,306 shares in 2004, 1,738,720 shares in 2003 (10,900) (10,635) ------------ ------------ Total stockholders' equity 49,219 37,866 ------------ ------------ Total liabilities and stockholders' equity $ 287,573 $ 283,144 ============ ============ (1) The Consolidated Balance Sheet as of December 31, 2003 has been derived from our audited Consolidated Balance Sheet included in our Annual Report on Form 10-K for the year ended December 31, 2003. DURATEK, INC. AND SUBSIDIARIES Consolidated Statements of Operations (in thousands, except per share amounts) Three months ended Six months ended -------------------- --------------------- June 27, June 29, June 27, June 29, 2004 2003 2004 2003 ----------- -------- ----------- --------- (unaudited) (unaudited) Revenues $ 73,555 $76,790 $ 137,737 $140,620 Cost of revenues 55,848 57,535 104,098 108,096 ----------- -------- ----------- --------- Gross profit 17,707 19,255 33,639 32,524 Selling, general and administrative expenses 7,392 7,240 16,039 15,273 ----------- -------- ----------- --------- Income from operations 10,315 12,015 17,600 17,251 Interest expense (1,160) (1,117) (3,516) (2,191) Other income (loss), net 14 85 86 (17) ----------- -------- ----------- --------- Income before income taxes, equity in income (loss) of joint ventures, and cumulative effect of a change in accounting principle 9,169 10,983 14,170 15,043 Income taxes 3,526 4,393 5,526 6,017 ----------- -------- ----------- --------- Income before equity in income (loss) of joint ventures and cumulative effect of a change in accounting principle 5,643 6,590 8,644 9,026 Equity in income (loss) of joint ventures (5) (7) 79 149 ----------- -------- ----------- --------- Net income before cumulative effect of a change in accounting principle 5,638 6,583 8,723 9,175 Cumulative effect of a change in accounting principle, net of taxes - - - (2,414) ----------- -------- ----------- --------- Net income 5,638 6,583 8,723 6,761 Preferred stock dividends (40) (315) (52) (630) ----------- -------- ----------- --------- Net income attributable to common stockholders $ 5,598 $ 6,268 $ 8,671 $ 6,131 =========== ======== =========== ========= Weighted average common stock outstanding: Basic 13,961 13,552 13,845 13,542 =========== ======== =========== ========= Diluted 14,502 19,375 14,413 19,322 =========== ======== =========== ========= Income (loss) per share: Basic: Before cumulative effect of a change in accounting principle $ 0.40 $ 0.46 $ 0.63 $ 0.63 Cumulative effect of a change in accounting principle - - - (0.18) ----------- -------- ----------- --------- $ 0.40 $ 0.46 $ 0.63 $ 0.45 =========== ======== =========== ========= Diluted: Before cumulative effect of a change in accounting principle $ 0.39 $ 0.34 $ 0.60 $ 0.47 Cumulative effect of a change in accounting principle - - - (0.12) ----------- -------- ----------- --------- $ 0.39 $ 0.34 $ 0.60 $ 0.35 =========== ======== =========== ========= DURATEK, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows (in thousands of dollars) Six months ended ----------------------- June 27, June 29, 2004 2003 ----------- ----------- (Unaudited) Cash flows from operating activities: Net income $ 8,723 $ 6,761 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 5,315 6,097 Cumulative effect of a change in accounting principle, net of taxes - 2,414 Stock compensation expense - 159 Equity in (income) loss of joint ventures, net of distributions 12 (88) Changes in operating assets and liabilities: Accounts receivables (10,782) (5,224) Costs and estimated earnings in excess of billings on uncompleted contracts (6,231) (4,061) Prepaid expenses and other current assets 561 883 Accounts payable, and accrued expenses and other current liabilities 3,813 12,173 Unearned revenues 4,867 1,887 Waste processing and disposal liabilities 304 (413) Facility and equipment decontamination and decommissioning liabilities 430 407 Retainage 907 (1,103) Other 537 153 ----------- ----------- Net cash provided by operating activities 8,456 20,045 ----------- ----------- Cash flows from investing activities: Additions to property, plant and equipment (3,056) (2,491) Other (140) (179) ----------- ----------- Net cash used in investing activities (3,196) (2,670) ----------- ----------- Cash flows from financing activities: Repayments of long-term debt (15,000) (2,600) Deferred financing costs (11) (413) Proceeds from issuance of common stock 2,598 132 Preferred stock dividends paid (106) (315) Repayments of capital lease obligations (150) (217) ----------- ----------- Net cash used in financing activities (12,669) (3,413) ----------- ----------- Net increase (decrease) in cash (7,409) 13,962 Cash, beginning of period 35,174 2,323 ----------- ----------- Cash, end of period $ 27,765 $ 16,285 =========== =========== CONTACT: Duratek, Inc., Columbia Diane R. Brown or Robert F. Shawver 410-312-5100 www.duratekinc.com