EX-99.1 2 a4818359ex991.txt DURATEK, INC. EXHIBIT 99.1 Exhibit 99.1 Duratek Announces 2004 Year-End Results COLUMBIA, Md.--(BUSINESS WIRE)--Feb. 9, 2005--Duratek, Inc. (NASDAQ:DRTK) today announced it achieved record income from operations of $40.6 million for the year ended December 31, 2004 as compared to $34.9 million in 2003, an increase of 16%. Net income for the year ended December 31, 2004 was $21.0 million as compared to net income excluding the effects of the preferred stock repurchase, related write-off of deferred financing costs, and the cumulative effect of a change in accounting principle(1) of $18.2 million for 2003, or an increase of $2.8 million. This improvement was primarily due to the improved performance in the Federal Services Segment. Diluted earnings per share for the year-ended December 31, 2004 was $1.44 as compared to $0.94 excluding the effects of the preferred stock repurchase, the related write-off of deferred financing costs, and the cumulative effect of the change in accounting principle for 2003. The Company reported diluted earnings per share of $0.20 and $1.44 for the quarter and year ended December 31, 2004 as compared to a net loss per diluted share of ($2.46) and ($1.62) for the comparable periods in 2003, respectively. Revenues for 2004 of $286.2 million were comparable to the $285.9 million achieved in 2003. Revenues and income from operations for the fourth quarter 2004 were $71.1 million and $6.2 million as compared to $72.8 million and $7.5 million, respectively, for the comparable periods in 2003. The decrease in income from operations of $1.3 million for the fourth quarter was due to lower revenues, partially offset by lower operating costs. Robert E. Prince, President and CEO said, "2004 was a record year for the Company and the third year in a row of improving profits and margins. We believe this has been the direct result of a strategy to focus on safety, quality, innovation, and excellence in customer care. Looking ahead, we feel we are well positioned to realize some promising growth opportunities emerging in the marketplace." Robert F. Shawver, Executive Vice President and CFO said, "The strong results made it possible for the Company to pay down $30 million in term debt during the year. Not only did this reduce the overall leverage of the business, but it also will reduce interest costs in the coming year. In addition, we are pleased that shareholders were able to realize higher earnings per share as a result of the refinancing transaction completed in December 2003 whereby the Company purchased the equivalent of 26% of the shares of the total outstanding common stock from The Carlyle Group by borrowing $52 million on its new senior credit facility." (1) 2003 net income excluding the effects of the preferred stock repurchase, related write off of deferred financing costs, and the cumulative effect of a change in accounting principle does not reflect preferred stock dividends and repurchase of $36.2 million, write-off of deferred financing costs net of taxes of $1.5 million and cumulative effect of change in accounting principle net of tax of $2.4 million. The earnings per share calculation of $0.94 was based on 19.4 million diluted shares. 2003 reported net loss attributable to common stockholders was ($21.9) million or ($1.62) per diluted share. An unaudited comparative summary of Duratek's results of operations for the fourth quarter and year ended December 31, 2004 and 2003 is as follows (in thousands, except per share data): Three Months Ended Year Ended ------------------ ------------------- Dec. 31, Dec. 31, Dec. 31, Dec. 31, 2004 2003 2004 2003 -------- --------- --------- --------- Revenues $71,073 $ 72,764 $286,213 $285,901 Income from operations $ 6,156 $ 7,527 $ 40,592 $ 34,946 Income taxes $ 1,631 $ 1,923 $ 13,098 $ 11,671 Income before cumulative effect of a change in accounting principle $ 3,005 $ 1,843 $ 21,046 $ 16,650 Preferred stock repurchase, dividends, and charges for accretion $ (3) $(35,209) $ (63) $(36,154) Net income (loss) attributable to Common Stockholders $ 3,002 $(33,366) $ 20,983 $(21,918) Net income (loss) per share: Basic Before cumulative effect of a change in accounting principle $ 0.21 $ (2.46) $ 1.50 $ (1.44) Cumulative effect of a change in accounting principle - - - (0.18) ======== ========= ========= ========= $ 0.21 $ (2.46) $ 1.50 $ (1.62) ======== ========= ========= ========= Diluted Before cumulative effect of a change in accounting principle $ 0.20 $ (2.46) $ 1.44 $ (1.44) Cumulative effect of a change in accounting principle - - - (0.18) -------- --------- --------- --------- $ 0.20 $ (2.46) $ 1.44 $ (1.62) ======== ========= ========= ========= 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 1-888-820-8951, 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 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 2, 2005 at 5:00 p.m. by dialing 1-866-346-1330. 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 December 31, 2004 and 2003 (in thousands of dollars, except per share amounts) 2004 2003 --------- --------- Assets Current assets: Cash $ 23,296 $ 35,174 Accounts receivable, less allowance for doubtful accounts of $158 in 2004 and $842 in 2003 30,997 38,378 Cost and estimated earnings in excess of billings on uncompleted contracts 16,715 15,464 Prepaid expenses and other current assets 13,708 7,760 --------- --------- Total current assets 84,716 96,776 Retainage 1,257 6,685 Property, plant and equipment, net 66,151 69,416 Goodwill 72,129 70,797 Other intangible assets 3,747 4,718 Decontamination and decommissioning trust fund 19,050 20,767 Other assets 21,487 13,985 --------- --------- Total assets $268,537 $283,144 ========= ========= Liabilities and Stockholders' Equity Current liabilities: Current portion of long-term debt $ 858 $ 1,150 Accounts payable 15,643 12,851 Due to the State of South Carolina 6,073 12,634 Accrued expenses and other current liabilities 24,646 26,518 Unearned revenues 14,694 21,410 Waste processing and disposal liabilities 6,980 8,001 --------- --------- Total current liabilities 68,894 82,564 Long-term debt, less current portion 84,141 114,825 Facility and equipment decontamination and decommissioning liabilities 40,419 41,180 Other noncurrent liabilities 8,080 6,409 --------- --------- Total liabilities 201,534 244,978 --------- --------- 8% Cumulative Convertible Redeemable Preferred Stock, $.01 par value; 160,000 shares authorized, no shares issued and outstanding at December 31, 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 16,236,781 shares in 2004 and 15,229,100 shares in 2003 162 152 Capital in excess of par value 86,784 78,375 Accumulated deficit (9,043) (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 67,003 37,866 Commitments and contingencies --------- --------- Total liabilities and stockholders' equity $268,537 $283,144 ========= ========= DURATEK, INC. AND SUBSIDIARIES Consolidated Statements of Operations Years ended December 31, 2004 and 2003 (in thousands of dollars, except per share amounts) 2004 2003 --------- --------- Revenues $286,213 $285,901 Cost of revenues 211,315 217,493 --------- --------- Gross profit 74,898 68,408 Selling, general and administrative expenses 34,306 33,462 --------- --------- Income from operations 40,592 34,946 Interest expense (6,970) (6,903) Other income, net 398 76 --------- --------- Income before income taxes, equity in income (loss) of joint ventures, and cumulative effect of a change in accounting principle 34,020 28,119 Income taxes 13,098 11,671 --------- --------- Income before equity in income (loss) of joint ventures and cumulative effect of a change in accounting principle 20,922 16,448 Equity in income (loss) of joint ventures 124 202 --------- --------- Income before cumulative effect of a change in accounting principle 21,046 16,650 Cumulative effect of a change in accounting principle, net of taxes - (2,414) --------- --------- Net income 21,046 14,236 Preferred stock repurchase premium, dividends and charges for accretion (63) (36,154) --------- --------- Net income (loss) attributable to common stockholders $ 20,983 $(21,918) ========= ========= Income (loss) per share: Basic: Before cumulative effect of a change in accounting principle $ 1.50 $ (1.44) Cumulative effect of a change in accounting principle - (0.18) --------- --------- $ 1.50 $ (1.62) ========= ========= Diluted: Before cumulative effect of a change in accounting principle $ 1.44 $ (1.44) Cumulative effect of a change in accounting principle - (0.18) --------- --------- $ 1.44 $ (1.62) ========= ========= DURATEK, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows Years ended December 31, 2004 and 2003 (in thousands of dollars) 2004 2003 -------- -------- Cash flows from operating activities: Net income $21,046 $14,236 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 10,639 15,279 Deferred income taxes (83) 4,445 Cumulative effect of a change in accounting principle, net of taxes - 2,414 Stock compensation expense - 319 Income tax benefit from exercise of non- qualified stock options 2,641 196 Allowance for doubtful accounts (558) 46 Equity in (income) loss of joint ventures, net of distributions 109 (46) Changes in operating assets and liabilities: Accounts receivables 7,939 10,151 Costs and estimated earnings in excess of billings on uncompleted contracts (8,191) (6,830) Prepaid expenses and other current assets 1,486 871 Accounts payable, and accrued expenses and other current liabilities (8,610) (2,188) Unearned revenues (6,716) 4,934 Waste processing and disposal liabilities (1,021) (1,935) Facility and equipment decontamination and decommissioning liabilities 956 959 Retainage 1,781 (1,582) Other (891) (598) -------- -------- Net cash provided by operating activities 20,527 40,671 -------- -------- Cash flows from investing activities: Additions to property, plant and equipment (6,242) (4,839) Advances to employees, net (27) 71 Other (88) (449) -------- -------- Net cash used in investing activities (6,357) (5,217) -------- -------- DURATEK, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows Years ended December 31, 2004 and 2003 (in thousands of dollars) 2004 2003 ---------- ---------- Cash flows from financing activities: Net repayments of borrowings under revolving credit facility $ - $ - Net proceeds from (repayments of) short-term borrowings - - Proceeds from long-term debt - 115,000 Repayments of long-term debt (30,975) (61,149) Repayments of capital lease obligations (282) (388) Preferred stock dividends paid (123) (3,101) Deferred financing costs (27) (4,209) Preferred stock repurchase - (49,176) Treasury stock purchases - - Proceeds from issuance of common stock 5,359 420 ---------- ---------- Net cash used in financing activities (26,048) (2,603) ---------- ---------- Net increase in cash (11,878) 32,851 Cash, beginning of year 35,174 2,323 ---------- ---------- Cash, end of year $ 23,296 $ 35,174 ========== ========== Supplemental disclosure of non-cash financing activities: During 2004, the holders of our 8% Cumulative Convertible Redeemable Preferred Stock converted 3,002 shares of the 8% Cumulative Convertible Redeemable Preferred Stock into 100,067 shares of common stock valued at $300. During 2004, we contributed restricted stock unit, 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 2004, we entered into $189 in capital lease agreements to finance the purchase of machinery and equipment. During 2003, we entered into $343 in capital lease agreements to finance the purchase of computer equipment. CONTACT: Duratek, Inc., Columbia Diane R. Brown, 410-312-5100 www.duratekinc.com