EX-99.1 2 a4745869ex991.txt PRESS RELEASE EXHIBIT 99.1 Duratek Reports Third Quarter 2004 Results COLUMBIA, Md.--(BUSINESS WIRE)--Oct. 20, 2004--Duratek, Inc. (NASDAQ:DRTK) today announced net income of $9.3 million, or $0.63 per diluted share, for the three-month period ended September 26, 2004, as compared to net income of $5.6 million, or $0.29 per diluted share, for the comparable period in 2003. Revenues were $77.4 million for the three months ended September 26, 2004 compared to $72.5 million in the same period in 2003. The increase in net income of $3.7 million for the quarter was primarily due to strong performance in the Federal Services and the Commercial Processing and Disposal Segments. For the nine month period ended September 26, 2004, net income was $18.0 million, or $1.24 per diluted share, as compared to net income of $12.4 million, or $0.64 per diluted share, for the comparable period in 2003. Revenues were $215.1 million for the nine months ended September 26, 2004 compared to revenues of $213.1 million for the same period in 2003. The increase in the year-to-date net income of $5.6 million was due primarily to the strong performance by the Federal Services Segment as described above. Net income per diluted share increased by approximately 94% for the first nine months of the year as compared to the same period in 2003. Operating margins improved for the first nine months to 16.0% as compared to 12.9% for the same period last year. Based on this solid performance, the Company made a debt pre-payment of $10 million in September 2004 resulting in a total of $25 million in debt reduction in 2004 year-to-date. Robert E. Prince, President and CEO said, "We are very pleased with our achievements in the third quarter. Our focus on services that we believe emphasize the Company's unique combination of assets, technologies, people, and experience has been a key driver of our improving performance. We will continue to work to expand this strategy to new growth opportunities." Robert F. Shawver, Executive Vice President and CFO added, "The Company generated record income during the third quarter due to a number of factors. While typically, the second and third quarters are our strongest, the reported results for the third quarter in 2004 include approximately $0.20 a share of additional profits due to special items. These items included higher incentive fees, rate recoveries, and equitable adjustments recognized on certain Federal Services contracts; a reduction in the reserve for doubtful accounts; and additional revenue realized as a result of an early termination of a fixed priced Commercial Services contract." An unaudited comparative summary of the third quarter results and year-to-date of operations for 2004 and 2003 is as follows (in thousands of dollars, except per share data): Three Months Ended Nine Months Ended --------------------------------------- September September September September 26, 2004 28, 2003 26, 2004 28, 2003 --------------------------------------- Revenues $77,403 $72,517 $215,140 $213,137 Income from operations $16,836 $10,168 $34,436 $27,419 Income taxes $5,941 $3,731 $11,467 $9,748 Net income before cumulative effect of a change in accounting principle $9,318 $5,632 $18,041 $14,807 Net income attributable to common stockholders $9,310 $5,317 $17,981 $11,448 Net income (loss) per share: Basic before cumulative effect of a change in accounting principle $0.66 $0.39 $1.29 $1.02 Cumulative effect of a change in accounting principle - - - $(0.18) --------------------------------------- $0.66 $0.39 $1.29 $0.84 ======================================= Diluted before cumulative effect of a change in accounting principle $0.63 $0.29 $1.24 $0.77 Cumulative effect of a change in accounting principle - - - $(0.13) --------------------------------------- $0.63 $0.29 $1.24 $0.64 ======================================= 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 1-888-730-9137, pass code Duratek. In addition to the webcast and teleconference, the Company will be placing a presentation of the data on its website under "Investors". 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 November 5, 2004 by dialing 1-888-437-4645. 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 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) September December 26, 2004 31, 2003 --------------------- (unaudited) Assets Current assets: Cash $5,576 $35,174 Accounts receivable, less allowance for doubtful accounts of $176 in 2004 and $842 in 2003 36,163 38,378 Cost and estimated earnings in excess of billings on uncompleted contracts 20,410 15,464 Prepaid expenses and other current assets 6,271 7,760 --------------------- Total current assets 68,420 96,776 Retainage 6,979 6,685 Property, plant and equipment, net 65,886 69,416 Goodwill 70,797 70,797 Other intangible assets 3,992 4,718 Decontamination and decommissioning trust fund 19,242 20,767 Other assets 19,678 13,985 --------------------- Total assets $254,994 $283,144 ===================== Liabilities and Stockholders' Equity Current liabilities: Current portion of long-term debt $1,957 $1,150 Accounts payable 5,900 12,851 Due to State of South Carolina 3,765 12,634 Accrued expenses and other current liabilities 26,215 26,958 Unearned revenues 14,249 21,410 Waste processing and disposal liabilities 8,005 8,001 --------------------- Total current liabilities 60,091 83,004 Long-term debt, less current portion 89,018 114,825 Facility and equipment decontamination and decommissioning liabilities 40,004 40,855 Other noncurrent liabilities 6,806 6,294 --------------------- Total liabilities 195,919 244,978 --------------------- 8% Cumulative Convertible Redeemable Preferred Stock, $.01 par value; 160,000 shares authorized, none issued and outstanding at September 26, 2004 and 3,002 shares issued and outstanding at December 31, 2003 - 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 15,957,456 shares in 2004 and 15,229,100 shares in 2003 158 152 Capital in excess of par value 81,862 78,375 Accumulated deficit (12,045) (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 59,075 37,866 --------------------- Total liabilities and stockholders' equity $254,994 $283,144 ===================== DURATEK, INC. AND SUBSIDIARIES Consolidated Statements of Operations (in thousands of dollars, except per share amounts) Three months ended Nine months ended ------------------------------------------ September September September September 26, 2004 28, 2003 26, 2004 28, 2003 ------------------------------------------ (unaudited) (unaudited) Revenues $77,403 $72,517 $215,140 $213,137 Cost of revenues 52,561 53,577 156,659 161,673 ------------------------------------------ Gross profit 24,842 18,940 58,481 51,464 Selling, general and administrative expenses 8,006 8,772 24,045 24,045 ------------------------------------------ Income from operations 16,836 10,168 34,436 27,419 Interest expense (1,733) (912) (5,295) (3,103) Other income, net 129 71 261 54 ------------------------------------------ Income before income taxes, equity in income of joint ventures, and cumulative effect of a change in accounting principle 15,232 9,327 29,402 24,370 Income taxes 5,941 3,731 11,467 9,748 ------------------------------------------ Income before equity in income of joint ventures and cumulative effect of a change in accounting principle 9,291 5,596 17,935 14,622 Equity in income of joint ventures 27 36 106 185 ------------------------------------------ Net income before cumulative effect of a change in accounting principle 9,318 5,632 18,041 14,807 Cumulative effect of a change in accounting principle, net of taxes - - - (2,414) ------------------------------------------ Net income 9,318 5,632 18,041 12,393 Preferred stock dividends (8) (315) (60) (945) ------------------------------------------ Net income attributable to common stockholders $9,310 $5,317 $17,981 $11,448 ========================================== Weighted average common stock outstanding: Basic 14,143 13,568 13,944 13,551 ========================================== Diluted 14,686 19,373 14,504 19,341 ========================================== Income per share: Basic: Before cumulative effect of a change in accounting principle $0.66 $0.39 $1.29 $1.02 Cumulative effect of a change in accounting principle - - - (0.18) ------------------------------------------ $0.66 $0.39 $1.29 $0.84 ========================================== Diluted: Before cumulative effect of a change in accounting principle $0.63 $0.29 $1.24 $0.77 Cumulative effect of a change in accounting principle - - - (0.13) ------------------------------------------ $0.63 $0.29 $1.24 $0.64 ========================================== DURATEK, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows (in thousands of dollars) Nine months ended -------------------- September September 26, 2004 28, 2003 -------------------- (Unaudited) Cash flows from operating activities: Net income $18,041 $12,393 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 8,036 8,991 Cumulative effect of a change in accounting principle, net of taxes - 2,414 Stock compensation expense - 239 Equity in (income) loss of joint ventures, net of distributions 86 (116) Changes in operating assets and liabilities: Accounts receivable 2,215 (344) Costs and estimated earnings in excess of billings on uncompleted contracts (9,739) (9,729) Prepaid expenses and other current assets 1,547 1,111 Accounts payable, and accrued expenses and other current liabilities (7,652) (1,015) Due to State of South Carolina (8,869) (9,203) Unearned revenues (7,161) 9,954 Waste processing and disposal liabilities 4 (2,102) Facility and equipment decontamination and decommissioning liabilities 673 663 Retainage 282 (1,980) Other (989) (821) -------------------- Net cash provided by (used in) operating activities (3,526) 10,455 -------------------- Cash flows from investing activities: Additions to property, plant and equipment (3,605) (3,643) Other (205) (183) -------------------- Net cash used in investing activities (3,810) (3,826) -------------------- Cash flows from financing activities: Repayments of long-term debt (25,000) (5,200) Proceeds from issuance of common stock 3,099 205 Repayments of capital lease obligations (220) (325) Preferred stock dividends paid (114) (630) Deferred financing costs (27) (413) -------------------- Net cash used in financing activities (22,262) (6,363) -------------------- Net increase (decrease) in cash (29,598) 266 Cash, beginning of period 35,174 2,323 -------------------- Cash, end of period $5,576 $2,589 ==================== Supplemental disclosure of non-cash financing activities: During the nine months ended September 26, 2004, we converted 3,002 shares of the 8% Cumulative Convertible Redeemable Preferred Stock into 100,067 shares of common stock valued at $300. During the nine months ended September 26, 2004, we contributed restricted stock units, representing the outstanding units that vested in 2004, to the Duratek, Inc. Deferred Compensation Plan. All restricted stock units were exchanged for our common stock, and increased treasury stock by $265. During the nine months ended September 26, 2004, we entered into $174 in capital lease agreements to finance the purchase of machinery and equipment. CONTACT: Duratek, Inc. Investor Relations Diane R. Brown, 410-312-5100 or Robert F. Shawver, 410-312-5100 www.duratekinc.com