<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1999
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________________ to _____________________
Commission File Number 0-11688
AMERICAN ECOLOGY CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 95-3889638
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
805 W. Idaho
Suite #200
Boise, Idaho 83702-8916
(Address of principal executive offices) (Zip Code)
(208) 331-8400
(Registrants telephone number, including area code)
Indicate by a check mark whether Registrant (1) has filed all reports required
to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
YES [ ] NO [X]
At August 13, 1999, Registrant had outstanding 13,557,875 shares
of its Common Stock.
<PAGE> 2
AMERICAN ECOLOGY CORPORATION
QUARTERLY REPORT FORM 10-Q FOR THE
THREE MONTHS ENDED JUNE 30, 1999
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Item 1. Consolidated Financial Statements PAGE
<S> <C>
Consolidated Balance Sheet
(Unaudited) 4
Consolidated Statements of Operations
(Unaudited) 5
Consolidated Statements of Cash Flows
(Unaudited) 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations 10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 2. Changes in Securities 16
Item 3. Defaults upon Senior Securities 16
Item 4. Submission of Matters to a Vote of Security Holders 16
Item 5. Other Information 17
Item 6. Exhibits and Reports on Form 8-K 17
Signatures 20
</TABLE>
2
<PAGE> 3
<TABLE>
<CAPTION>
DIRECTORS OFFICERS
- ------------------------------------------- --------------------------------------------
<S> <C>
Jack K. Lemley Jack K. Lemley
Chairman of the Board Chairman and Chief Executive Officer
American Ecology Corporation
Joseph J. Nagel
Rotchford L. Barker President and Chief Operating Officer
Independent Businessman
Robert S. Thorn
Paul C. Bergson Vice President and Chief Accounting Officer
Principal
Bergson & Company L. Gary Davis
Vice President and Controller
Keith D. Bronstein
President Stephen A. Romano
Tradelink, LLC Vice President
Patricia M. Eckert Richard F. Paton
Principal Vice President
Patricia M. Eckert & Associates
Phillip K. Chattin
Edward F. Heil General Counsel and Secretary
Chairman of the Board
American Environmental Construction Company FINANCIAL REPORTS
Paul F. Schutt A copy of the American Ecology Corporation
Chief Executive Officer Financial Reports, filed with the
Nuclear Fuel Services, Inc. Securities and Exchange Commission, may be
obtained by writing to:
John J. Scoville
President American Ecology Corporation
J.J. Scoville & Associates, Inc. 805 W. Idaho, Suite 200
Boise, Idaho 83702
CORPORATE OFFICE TRANSFER AGENT
American Ecology Corporation Chasemellon Shareholder Services, LLC
805 W. Idaho, Suite 200 Overpeck Centre
Boise, Idaho 83702 85 Challenger Road
(208)331-8400 Ridgefield Park, New Jersey 07660
(201) 296-4000
COMMON STOCK www. Chasemellon.com
American Ecology Corporation's common stock AUDITOR
trades on the NASDAQ Stock Market under the
symbol ECOL. Balukoff, Lindstrom & Co., P.A..
877 West Main Street, Suite 805
Boise, Idaho 83702
</TABLE>
3
<PAGE> 4
PART 1 FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
AMERICAN ECOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
($ IN 000'S EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
-------- ------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 2,040 $ 4,442
Receivables (trade and other), net of allowance for
Doubtful accounts of $1,150 and $1,047, respectively 6,981 9,506
Income tax receivable 740 740
Prepayments and other 741 1,023
-------- --------
Total current assets 10,502 15,711
Cash and investment securities, pledged 5,136 5,405
Property and equipment, net 9,482 11,145
Deferred site development costs 27,450 26,909
Intangible assets relating to acquired businesses, net 402 414
Other assets 2,576 2,216
-------- --------
Total assets $ 55,548 $ 61,800
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long term debt $ 72 $ 119
Accounts payable 3,247 5,101
Accrued liabilities 11,600 17,267
Deferred site maintenance, current portion 700 700
Income taxes payable 69 91
-------- --------
Total current liabilities 15,688 23,278
Long term debt, excluding current portion 2,439 2,223
Deferred site maintenance, excluding current portion 18,630 18,839
Commitments and contingencies
Shareholders' equity:
Convertible preferred stock, $.01 par value,
1,000,000 shares authorized -- --
Series D cumulative convertible preferred stock, $.01 par value,
105,264 authorized, 105,264 shares issued and outstanding 1 1
Common stock, $.01 par value, 50,000,000 authorized, 13,557,875
13,557,275 shares issued and outstanding, respectively 136 136
Additional paid-in capital 54,382 54,385
Retained earnings (deficit) (35,728) (37,062)
-------- --------
Total shareholders' equity 18,791 17,460
-------- --------
Total Liabilities and Shareholders' Equity $ 55,548 $ 61,800
======== ========
</TABLE>
See notes to consolidated financial statements
4
<PAGE> 5
AMERICAN ECOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
($ IN 000'S EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1999 1998 1999 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues $ 8,907 $ 10,230 $ 18,086 $ 19,874
Operating costs 4,197 5,787 9,020 11,867
-------- -------- -------- --------
Gross profit 4,710 4,443 9,066 8,007
Selling, general and administrative expenses 4,372 4,800 8,745 8,844
Income (loss) from operations 338 (357) 321 (837)
Investment income 269 84 313 394
Gain on sale of assets 663 37 663 72
Other income 196 499 294 698
-------- -------- -------- --------
Net income before income taxes 1,466 263 1,591 327
Income tax expense 40 37 47 181
-------- -------- -------- --------
Net income 1,426 226 1,544 146
Preferred stock dividends 107 107 210 212
-------- -------- -------- --------
Net income (loss) available to common
Shareholders $ 1,319 $ 119 $ 1,334 $ (66)
======== ======== ======== ========
Basic earnings per share $ .10 $ .01 $ .10 $ (.01)
======== ======== ======== ========
Diluted earnings per share $ .08 $ .01 $ .08 $ (.01)
======== ======== ======== ========
Dividends paid per common share $ -- $ -- $ -- $ --
======== ======== ======== ========
</TABLE>
See notes to consolidated financial statements.
5
<PAGE> 6
AMERICAN ECOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
($ in 000's)
<TABLE>
<CAPTION>
Six Months Ended June 30,
1999 1998
------- -------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 1,544 $ 146
Adjustments to reconcile net income (loss) to net cash Provided by
operating activities:
Depreciating and amortization 1,181 1,564
Deferred income tax provision (22) --
(Gain) on sale of assets (663) (72)
Changes in assets and liabilities:
Receivables 2,525 447
Investment securities classified as trading 269 (1,126)
Other assets (171) (450)
Accounts payable and accrued liabilities (6,479) (2,770)
Deferred site maintenance 175 (201)
------- -------
Total adjustments (3,185) (2,608)
------- -------
Net cash provided by (used in) operating activities (1,641) (2,462)
------- -------
Cash flows from investing activities:
Capital expenditures (384) (522)
Site development costs, including capitalized interest (927) (919)
Proceeds from sales of property and equipment 1910 --
Proceeds from sales of investment securities -- 2,309
Transfers from cash and investment securities, pledged -- --
------- -------
Net cash used in investing activities 599 868
------- -------
Cash flows from financing activities:
Proceeds from issuance of indebtedness (1,300) 8,690
Proceeds from rights offering -- 1,996
Repayments of indebtedness (60) (9,212)
------- -------
Net cash provided by (used in) financing activities (1,360) 1,474
------- -------
Increase (decrease) in cash and cash equivalents (2,402) (120)
Cash and cash equivalents at beginning of period 4,442 366
------- -------
Cash and cash equivalents at end of period $ 2,040 $ 246
======= =======
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest, net of amounts capitalized $ 58 $ 109
Income taxes 53 184
</TABLE>
See notes to consolidated financial statements.
6
<PAGE> 7
AMERICAN ECOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. BASIS OF PRESENTATION.
The accompanying unaudited financial statements have been prepared by the
Company pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations. In the opinion of management, all adjustments and disclosures
necessary to a fair presentation of these financial statements have been
included. These financial statements should be read in conjunction with the
financial statements and notes thereto included in the Company's 1998 Annual
Report on Form 10-K for the year ended December 31, 1998, as filed with the
Securities and Exchange Commission.
Certain reclassifications and other corrections for rounding have been made in
prior period financial statements to conform to the current period presentation.
The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiaries. All significant inter-company transactions and
balances have been eliminated in consolidation.
NOTE 2. LONG-TERM DEBT.
Long term debt at June 30, 1999 and March 31, 1999 consisted of the following
(in thousands):
<TABLE>
<CAPTION>
June 30, March 31,
1999 1999
------- ---------
<S> <C> <C>
Notes Payable $ 1,300 $ 1,300
Capital lease obligations and other 1,210 1,038
------- -------
2,510 2,338
Less: Current maturities (72) (96)
------- -------
Long-term debt $ 2,438 $ 2,242
</TABLE>
Aggregate maturities of long-term debt and the future minimum payments under
capital leases are as follows (in thousands):
<TABLE>
<CAPTION>
June 30,
--------
<S> <C>
1999 $ 72
2000 871
2001 868
2002 700
TOTAL $ 2,510
</TABLE>
The company borrowed $1.3 million from two of its board members as notes payable
in March 1999. The notes are due in November 2000, are unsecured, bear interest
of 9%, and prohibit the Company from paying dividends on common or preferred
shares while they are outstanding.
7
<PAGE> 8
NOTE 3. DEFERRED SITE DEVELOPMENT COSTS.
The Company has been licensed to construct and operate the low-level radioactive
waste ("LLRW") facility for the Southwestern Compact ("Ward Valley facility"),
and has been selected to obtain a license to develop and operate the Central
Interstate Compact ("Butte facility").
The Company currently holds a license from the California Department of Health
Services to construct and operate the Ward Valley LLRW facility to serve the
Southwestern Compact region. However, California has been unable to persuade the
U.S. Department of the Interior to transfer title to the site-land to California
so construction for the facility may proceed. In the first quarter of 1997, the
Company filed two lawsuits against the United States. The first was filed in the
Court of Federal Claims, seeking monetary damages of more than $73 million. The
second case was filed in the Federal District Court in Washington D.C. seeking
injunctive relief and a writ of mandamus ordering the land transferred to
California. The trial court rendered an adverse judgement in the mandamus action
March 31, 1999, which the Company has appealed.
All costs related to the development of the Ward Valley facility have been
capitalized. After adjusting for the bank settlement in November 1998, and as of
June 30, 1999, the Company had deferred $20,944,000 (37% of total assets) of
pre-operational facility development costs of which $895,000 represents
capitalized interest. These deferred costs are to be recovered during the
facilities first 20 years of operation from disposal fees approved by the
Department of Health Services (DHS) in accordance with existing state
regulations. The approval process is to include a prudency review of
pre-operational costs incurred by the Company. The Company expects all costs
that it has deferred for this facility, and unrecognized project interest costs,
to be included in the rate-base. However, there can be no assurance that all of
these costs will be approved by the DHS, or that the facility will ever be
constructed.
The Company had incurred reimbursable costs for the development of the Butte,
Nebraska facility under a contract with the Central Interstate LLRW Compact
Commission ("CIC"). These revenues declined substantially since April 1999.
Major generators of waste within the CIC's five-state region have provided
substantially all funding to develop the Butte facility. As of June 30, 1999,
the Company has contributed and deferred approximately $6,478,000 (12% of total
assets), $386,000 of which is capitalized interest, toward the development of
the Butte facility. In December 1998, the State of Nebraska denied US Ecology's
license application to build and operate the facility. The CIC directed US
Ecology to submit and vigorously prosecute a Petition for a Contested Case
challenging the State's denial. Accordingly, US Ecology filed its Petition
pursuant to the Nebraska Administrative Procedure Act on January 15, 1999.
The Major Generators filed suit in federal court for Nebraska on December 30,
1998, seeking to recover certain costs expended on the Nebraska licensing
process and prevent the State of Nebraska from proceeding with the license
review process. US Ecology has intervened as a plaintiff to protect the
Company's interest and is seeking similar relief from Nebraska. The contested
case is currently stayed by a federal judge's preliminary injunction order
sought in this court action.
While US Ecology has a minor equity position in the Butte, Nebraska project, it
has acted principally as a contractor to the Central Interstate Low-Level
Radioactive Waste Commission. As such, U.S. Ecology continues to execute
contractually with the Commission's requests and expects to be reimbursed for
all CIC approved activities undertaken pursuant to the contract.
Although the timing and outcome of the matters referred to above are unknown,
the Company continues to pursue the conveyance of the land from the federal
government to California, so that facility construction may begin, and to pursue
licensing of the Butte facility. The Company believes that the Butte facility
license will be granted, operations of both facilities will commence and that
the deferred site development costs for both facilities will be realized. In the
event the Butte facility license is not granted, operations of either facility
do not commence or the Company is unable to recoup its investments through legal
recourse, the Company would suffer losses that would have a material adverse
effect on its financial position.
8
<PAGE> 9
The following table shows the ending capitalized balances for the periods ended
June 30, 1999 and December 31, 1998 in thousands of dollars:
<TABLE>
<CAPTION>
June 30, Capitalized Capitalized
1999 Costs Interest Total
---- ----------- ----------- --------
<S> <S> <C> <C>
Ward Valley Project $ 20,049 $ 895 $ 20,944
Butte, Nebraska Project 6,092 386 6,478
<CAPTION>
December 31,
1998
----
<S> <S> <C> <C>
Ward Valley Project $ 19,536 $ 896 $ 20,431
Butte, Nebraska Project 6,092 386 6,478
</TABLE>
In 1994, the Company began to capitalize interest in accordance with Statement
of Financial Accounting Standards (SFAS) No. 34, Capitalization of Interest
Cost, on the site development projects while facilities being developed are
undergoing activities to ready them for their intended use. Because of the bank
settlement in November 1998, the Company eliminated $12,461,000 of capitalized
interest leaving only $1,282,000 of capitalized interest at June 30, 1999.
The calculation of net earnings or loss per common share as in accordance with
SFAS No. 128 for the three and six months ended June 30, 1999 and 1998, on basic
and diluted earnings per share respectively:
<TABLE>
<CAPTION>
(000'S EXCEPT PER SHARE AMOUNTS)
Three Months Ended Six months ended
June 30, June 30,
1999 1998 1999 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net earnings (loss) available to common shareholders $ 1,319 $ 119 $ 1,344 $ (66)
======== ======== ======== ========
Weighted average shares outstanding: 13,557 13,498 13,557 11,768
Common shares outstanding at end of period-basic
Shares used in computing dilutive potential earnings 17,334 13,498 17,334 11,768
(loss) per share
Basic EPS $ .10 $ .01 $ .10 $ (.01)
======== ======== ======== ========
Diluted EPS $ .08 $ .01 $ .08 $ .00
======== ======== ======== ========
</TABLE>
9
<PAGE> 10
NOTE 5. COMMITMENTS AND CONTINGENCIES.
Other than the information set forth in Part II, Item 1, herein, there have been
no other significant changes to any commitments and contingencies as described
in Note 13 to the financial statements included in the Company's 1998 Annual
Report on Form 10-K.
NOTE 6. PREFERRED STOCK.
The Company issued Series E preferred stocks in November 1996 and retired these
shares after the rights offering in February 1998. The 300,000 shares of Series
E bore an 11.25% annual dividend, which was paid quarterly in shares of the
Company's common stock. There were no voting rights or powers attached to this
11.25% Series E Preferred Stock. There are 3,000,000 warrants for common stock
exercisable at $1.50 per share.
In September 1995, the Company sold 105,264 shares of 8 3/8% Series D Cumulative
Convertible Preferred Stock (8 3/8% Preferred Stock"). Warrants were included
with the 105,264 shares to purchase 1,284,221 shares of the Company's common
stock at $4.75 per share. Each 8 3/8% Preferred Stock share is convertible at
any time, at the option of the holder, into 15.88 shares of the Company's common
stock. This is the equivalent to the conversion price of $5.50 on the $47.50
total per share offering price. Dividends on the 8 3/8% Preferred Stock is
cumulative from the date of issuance and payable quarterly since October 15,
1995. Accrued unpaid dividends totaled $210,000 and $1,351,000 at June 30, 1999
and December 31, 1998 respectively. The 8 3/8% Preferred Stock shares are not
redeemable. The liquidation preference is $47.50 per share plus unpaid
dividends. Each share of the 8 3/8% Preferred Stock issued includes ten warrants
to purchase one share of common stock for an exercise price of $4.75. The $4.75
warrants can be exercised at any time and expires September 12, 1999. No value
was assigned to the warrants in the accompanying consolidated financial
statements as the value is deemed to be de minimus.
At the July 9, 1999 directors meeting, the Company's board authorized the
extension of Series D Warrants expiration from September 12, 1999 to September
12, 2002. These Series D stock must be converted into common stock on or before
September 12, 1999.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion contains trend information and other forward-looking
statements that involve a number of risks and uncertainties. The Company's
actual results could differ materially from the Company's historical results of
operations and those discussed in the forward-looking comments. Factors that
could cause actual results to differ materially are included, but are not
limited to, those identified in the Notes to the Consolidated Financial
Statements above herein, and the discussion below. These statements should be
read in conjunction with the Company's annual report on Form 10-K for the year
ended December 31, 1998.
Introduction
American Ecology Corporation is the oldest radioactive and hazardous chemical
waste company in the United States. Incorporated in 1952 as Nuclear Engineering
Company, it has operated commercial radioactive and chemical waste disposal and
treatment facilities nationwide longer than any other company.
The Company is organized into two market-focused divisions: the Chemical
Division and the Nuclear LLRW Division. In 1998, and the first six months of
1999, approximately 40% of revenues were derived from the Chemical Division. The
Nuclear Division generated approximately 60% of revenues.
Several under-performing acquisitions completed in 1994 interrupted the
Company's financial growth in the early 1990's. This situation was intensified
by a severe unforeseen downturn in the chemical waste disposal industry.
Revenues and earnings peaked in 1994, and write-down of acquired assets resulted
in large losses in 1995 and 1996. Since 1995, both gross profit and net income
has improved steadily. This is due to the implementation of strategies developed
by the new management team installed in 1995. The Company has redeployed certain
assets to improve market position and sold its transportation division in the
second quarter, 1999.
10
<PAGE> 11
CAPITAL RESOURCES AND LIQUIDITY
The Company has improved its cash position, reduced the working capital deficit,
and improved certain aspects of operations. The six months ending June 30, 1999,
the Company had a working capital deficit of $5,186,000, reduced from
$14,663,000 one year earlier. Management has improved financial performance
since 1995 and plans to continue reducing the working capital deficit. The
Company intends to finance further capital expenditures through cash from
operations.
The Company sold its Houston-based hazardous and non hazardous waste
transportation service provider, (formerly WPI) and Surecycle(R), a business
division that operated a containerized hazardous waste collection service in the
Gulf coast market to Boston-based Clean Harbors Environmental Services, Inc.
Sale of the two operations and related facilities produced capital of $1.9
million and a gain on the sale over remaining book value of $663,000. The
transportation fleet included approximately 800 pieces of transportation and
storage equipment. The transaction also included waste transfer facilities in
Pasadena and Robstown, Texas, and a leased facility near Dallas.
MEASURES TO REDUCE COSTS
Management has continued to implement an aggressive financial and operating plan
since 1995. The Company has evaluated its market position and measured customer
potentials. Operating results have improved as a result. The Company continues
to evaluate the viability of certain other operations and their current
potential to perform at an acceptable level of profitability.
The Company believes its plan will continue to improve both cost structure and
operating results. However, given the previous year losses and insufficient cash
flow from operations, there can be no assurance that the plan will resolve the
Company's liquidity challenges in a timely fashion. The Company continues to
review opportunities to improve the liquidity position and to further reduce the
working capital deficit. The Company may experience cash flow shortages that
could cause the Company to materially reduce its current level of operations.
CASH FLOW
For the six months ended June 30, 1999, the Company had a cash deficit from
operations of $1,641,000. The Company used $6,479,000 of cash to reduce
outstanding accounts payable and for payment of burial fees and Washington State
fee rebates. The Company continues to have difficulty meeting its obligations as
they become due.
The Company spent $384,000 for capital expenditures, excluding site development
costs, and has invested $573,000 in site development costs for the Ward Valley
facility compared to $4.1 million in 1998. For the three and six months ended
June 30, 1999, the Company did not incur any interest related to the Ward Valley
and Butte facilities.
YEAR 2000 COSTS
The Year 2000 (Y2K) issue involves potential problems with computer systems or
any equipment with computer chips using dates where the year is stored as two
characters (e.g. 98 for 1998). These systems may incorrectly evaluate dates
beyond the year 1999, potentially causing system failures, which could affect
our business. The Company believes that its computer systems comply with the Y2K
requirement for date changes, but retains some concern that certain companies we
do business with may not comply. The Company has implemented a Y2K Plan that
addresses traditional hardware and software systems, embedded systems, and
service providers. The plan includes identification and coordination with
external interfacing systems. The Company does not expect the expenses
associated with compliance to have a material affect on its financial position,
operations or cash flows.
11
<PAGE> 12
STATE OF READINESS
The Company is organized with the two operating divisions, Chemical and Nuclear
LLRW. Each division has prepared a plan for Y2K compliance, as described below:
Chemical Division:
The Chemical Division has locations in Texas and Nevada. Each site location
reviewed and analyzed its own obligations as well as those of its vendors and
customers to meet Y2K compliance requirements. All locations contacted local
power companies to arrange contingency plans for power interruptions. Each
location has diesel generators that are capable of supplying adequate power in
case of an outage. Compliance and regulatory calendars will be reviewed and any
reports that can be completed in December for January 2000 will be done early.
The Company has received compliance certification for critical groundwater and
certain other compliance reports. Personnel will review all safety equipment to
ensure it is in good working order and stock extra supplies. All laboratory
equipment used for stabilization and fingerprint analysis has been reviewed and
is Y2K compliant. The Company will maintain maximum inventories of
solidification and stabilization reagents.
Nuclear LLRW Division:
The LLRW Division has limited vulnerability to Y2K problems. All critical
services have been evaluated and contingencies developed where needed. The
Company has reviewed each critical service and has a contingency plan where
applicable. A review has been made of radiation detection equipment, security
systems, fire alarms, and power and heating supplies.
The Company has requested written assurance from its principal suppliers and
service providers that they will be Year 2000 compliant. The majority of these
suppliers have responded favorably. No significant supplier problems have been
discovered to date. There can be no assurances; however, that the systems or
products of third parties, which the Company relies upon, will be properly
converted. The Company does not expect any material disruption in operation or
losses in revenue due to Y2K problems.
12
<PAGE> 13
RESULTS OF OPERATIONS
THREE AND SIX MONTHS ENDED JUNE 30, 1999 AND 1998.
The following table presents, for the periods indicated, the percentage of
operating line items in the consolidated income statement to operating revenues:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended Three Months Ended Six Months Ended
June 30, 1999 June 30, 1999 June 30, 1998 June 30, 1998
----------------- ----------------- ----------------- -----------------
$ % $ % $ % $ %
<S> <C> <C> <C> <C>
Revenue 8,907 18,086 10,230 19,874
Operating Costs 4,197 47.1 9,020 49.9 5,787 56.6 11,867 59.7
Gross Profit 4,710 52.9 9,066 50.1 4,443 43.4 8,007 40.3
Selling, G and A Costs 4,372 49.1 8,745 48.4 4,800 46.9 8,844 44.5
(Loss) from Operations 338 3.8 321 1.8 (357) (3.5) (837) (4.2)
Investment Income 269 3.0 313 1.7 84 .8 394 2.0
Gain on sale of assets 663 7.4 663 3.7 37 .4 72 .4
Other (income) expense 196 2.2 294 1.6 499 4.9 698 3.5
Net Income
Before income taxes 1,466 16.5 1,591 8.8 263 2.6 327 1.6
Income tax expense
(benefit) (40) (.4) (47) (.3) (37) (.4) 181 .9
Net Income 1,426 16.0 1,544 8.5 226 2.2 146 .7
Preferred stock
dividends 107 1.2 210 1.2 107 1.0 212 1.1
Net Income (loss)
Available to common
shareholders 1,319 14.8 1,334 7.4 119 1.2 (66) (.3)
</TABLE>
<TABLE>
<CAPTION>
Period to Period Change For Period to Period Change For
The Three Months Ended The Six Months Ended
June 30, 1999 and 1998 June 30, 1999 and 1998
--------------------------- ---------------------------
$ % $ %
<S> <C> <C> <C> <C>
Statement of Operations Revenues
Chemical Division (650) (18.0) (757) (.10)
LLRW Division (673) (.10) (1,031) (.08)
EBINT (1)
Chemical Division 696 (4.7) 976 (5.4)
LLRW Division 1,042 .8 1,229 .55
Consolidated Net Income 1,200 10.1 1,400 21.2
EBITDA (2)
Consolidated 967 1.1 1,017 (.67)
</TABLE>
1) EBINT represents income from operations before deducting interest and taxes.
2) EBITDA represents income from operations plus depreciation and amortization
expense.
13
<PAGE> 14
REVENUES
For the three and six months ended June 30, 1999, the Company reported revenue
of $8,907,000 or a 12.9% decrease, and $18,086,000 or an 8.9% decrease to the
corresponding prior year period. Management is focusing on the Company's need to
increase sales at all operating facilities. In the Chemical Division, all
experienced revenues have declined. In May 1999, the Company concluded the sale
of both the transportation division and Surecycle(R) for $1.9 million. Because
of this sale, there will be a loss in revenue but an increase in future
profitability since neither of these operations was profitable. Revenue declines
have been offset by increased sales at the Beatty, Nevada landfill. At Richland,
Washington, the Company operates a LLRW disposal site charging rates set by the
Washington Utility and Transportation Commission (WUTC). By the third quarter,
the annual revenue requirement set by the WUTC had already been collected. There
will be a prorated decline in recorded revenues for the balance of the year.
This will be partially offset by revenues derived from services provided to an
electric utility customer in preparation for disposal of a decommissioned
nuclear reactor.
The condensed statement of operations allows for a comparison of the two service
groups without inter-company or consolidated corporate costs or the captive
insurance company, ALEX.
CONDENSED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Reported in $000 June 30, 1999 June 30, 1998
Chemical LLRW Chemical LLRW
-------- ------- -------- -------
<S> <C> <C> <C> <C>
Operating revenues $ 6,656 $11,430 $ 7,413 $12,461
Operating costs 4,258 5,323 5,441 7,284
Gross Profit $ 2,672 $ 6,301 $ 2,687 $ 5,315
Selling, G & A 2,587 3,044 3,222 3,127
Income (loss) from
operations $ 85 $ 3,257 $ (535) $ 2,188
Other income
(expense) $ 0 $ 1,101 $ (521) $ 1,256
Net income (loss) $ 85 $ 2,156 $(1,056) $ 932
</TABLE>
The Chemical division for the three and six months ended June 30, 1999, reported
revenues of $2,960,000, an 18% decrease, and $6,656,000, a 10% decrease to the
corresponding prior year period. The LLRW division for the three and six months
ended June 30, 1999, reported revenues of $5,947,000, a 10% decrease and
$11,430,000, an 8% decrease to the corresponding prior year period. The Oak
Ridge, Tennessee facility has undergone a series of events that have had a
cumulative negative impact on operating performance. Those events have included
a labor union strike, lost work in the motor rebuild facility (some of which was
attributable to the strike) and a downturn in the waste processing business. The
Company is making efforts to restore this to a profitable operation, and seek
out new business opportunities.
14
<PAGE> 15
OPERATING COSTS
<TABLE>
<CAPTION>
Period to Period Change Period to Period Change
For the Three Months Ended For the Six Months Ended
June 30, 1999 and 1998 June 30, 1999 and 1998
---------------------- ----------------------
$ % $ %
<S> <C> <C> <C> <C>
Statement of Operations-Direct Operating Costs
Chemical Division (594) (23) (1,183) (21.7)
LLRW Division (1,243) (34.1) (1,961) (26.9)
Selling, General and Administrative Costs
Chemical Division (694) (36.5) (635) (19.7)
LLRW Division (239) (13.9) (83) (2.6)
Other Costs
Chemical Division (395) 182 (355) 10.0
LLRW Division (218) (726.6) (161) 29.3
</TABLE>
Operating costs and expenses have declined overall during 1999, and most of
1998. The Company reported a decrease of $1,590,000 or 27.5%, and a decrease of
$2,847,000 or 23.9%, for the three months ended June 30, 1999, respectively,
compared to the corresponding periods of 1998. As a percentage of operating
revenues, operating costs and expenses decreased from 50% to 47% for the three
months ended June 30, 1999 and 1998, respectively, and decreased from 60% to 57%
for the six months ended June 30, 1999 and 1998. It appears that operating costs
in total decreased proportionally with the decrease in revenues for the three
and six months ended June 30, 1999 and 1998. As explained above, this decline
was largely due to Oakridge, Tennessee facility operations.
Management continues with many efforts to conserve on costs in both Chemical and
LLRW divisions. Both divisions need increased sales, new business
diversification, or derivative lines of business to have continuing growth and
to improve performance in the future, while other items remain constant. The
Company as a whole is demonstrating a positive trend in operating results by
recapturing a portion of the market share. In addition to regaining some market
share, the Company has been making every effort to analyze each aspect of the
two operating divisions to determine how they can best maximize operating
performance and consider new areas for diversifying or expanding the business.
Management continues to explore derivative business lines in the shrinking waste
market.
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
In the ordinary course of business, the Company becomes involved in judicial and
administrative proceedings involving federal, state and local governmental
authorities, citizen groups or individuals in connection with permitting or
repermitting facilities, alleging violations of existing permits, or claiming
damages suffered from alleged exposure to hazardous substances purportedly
released from Company operated sites, and other litigation. The Company
maintains insurance intended to cover property, environmental and personal
injury claims asserted as a result of its operations. Periodically management
reviews and may establish reserves for legal and administrative matters, or fees
expected to be incurred in connection therewith. At this time, management
believes that resolution of pending matters will not have a material adverse
effect on the Company's financial position, results of operations or cash flows.
15
<PAGE> 16
ITEM 2. CHANGES IN SECURITIES.
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Company held its Annual Meeting of Stockholders on May 13, 1999. At the
meeting, Rotchford L. Barker, Paul C. Bergson, Keith D. Bronstein, Patricia M.
Eckert, Edward F. Heil, Jack K. Lemley, Paul F. Schutt, and John J. Scoville
were elected to serve as directors of the Company for the next year. In
addition, the 1992 Employee Stock Option Plan was amended to increase the shares
available for grant, the Company's Restated Certificate of Incorporation was
amended to increase the authorized common stock, and the appointment of
Balukoff, Lindstrom & Co., P.A. as independent public accountants for the year
ending December 31, 1999 was ratified.
The voting on such items was as follows:
(1) Election of Directors
<TABLE>
<CAPTION>
Voted Against or
For Withheld Authority
---------- ------------------
<S> <C> <C>
Rotchford L. Barker 11,398,290 38,952
Paul C. Bergson 11,398,000 39,242
Keith D. Bronstein 11,399,606 37,636
Patricia M. Eckert 11,397,544 39,698
Edward F. Heil 11,398,000 39,242
Jack K. Lemley 11,399,895 37,347
Paul F. Schutt 11,395,396 41,846
John J. Scoville 11,395,397 41,845
</TABLE>
(2) Amend the 1992 Employee Stock Option Plan and increase the shares
available for grant:
<TABLE>
<CAPTION>
For Against Abstain
--- ------- -------
<S> <C> <C> <C>
11,021,301 253,009 39,971
</TABLE>
(3) Amend the Company's Restated Certificate of Incorporation to increase
the authorized common stock from 25,000,000 to 50,000,000 shares:
<TABLE>
<CAPTION>
For Against Abstain
--- ------- -------
<S> <C> <C> <C>
11,190,142 208,617 38,483
</TABLE>
(4) Ratify Appointment of Independent Auditors of Balukoff, Lindstrom &
Co., P.A.
<TABLE>
<CAPTION>
For Against Abstain
--- ------- -------
<S> <C> <C> <C>
11,380,895 35,457 20,890
</TABLE>
16
<PAGE> 17
ITEM 5. OTHER INFORMATION.
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Exhibit Description Incorporated by Reference from
No. Registrant's
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
3.1 Restated Certificate of Incorporation, as amended 1989 Form 10-K
- -------------------------------------------------------------------------------------------------------------------
3.2 Certificate of Amendment to Restated Certificate of Incorporation Form S-4 dated 12-24-92
dated June 4, 1992
- -------------------------------------------------------------------------------------------------------------------
3.3 Amended and Restated Bylaws dated February 28, 1995 1994 Form 10-K
- -------------------------------------------------------------------------------------------------------------------
10.1 Sublease dated February 26, 1976, between the State of Washington, Form 10 filed 3-8-84
the United States Dept. of Commerce and Economic Development, and
Nuclear Engineering Company with Amendments dated January 11, 1980,
and January 14, 1982.
- -------------------------------------------------------------------------------------------------------------------
10.2 Lease dated May 1, 1977 ("Nevada Lease"), between the state of Form 10 filed 3-8-84
Nevada, Dept. of Human Resources and Nuclear Engineering Company,
with Addendum thereto, dated December 7, 1982
- -------------------------------------------------------------------------------------------------------------------
10.3 Addendum to Nevada Lease dated March 28, 1988 1989 Form 10-K
- -------------------------------------------------------------------------------------------------------------------
10.4 Nevada State Health Division, Radioactive Material License issued to 1989 Form 10-K
US Ecology, Inc. dated December 29, 1989
- -------------------------------------------------------------------------------------------------------------------
10.5 Administrative Order by Consent between the United States 1985 Form 10-K
Environmental Protection Agency and US Ecology, Inc. ("USE") dated
September 30, 1985
- -------------------------------------------------------------------------------------------------------------------
10.6 State of Washington Radioactive Materials License issued to US 1986 Form 10-K
Ecology, Inc. dated January 21, 1987
- -------------------------------------------------------------------------------------------------------------------
10.11 Agreement between the Central Interstate Low-Level Radioactive Waste 2nd Quarter 1988 10-Q
Compact Commission and US Ecology, Inc. for the development of a
facility for the disposal of low-level radioactive waste dated
January 28, 1988 ("Central Interstate Compact Agreement")
- -------------------------------------------------------------------------------------------------------------------
10.12 Amendment to Central Interstate Compact Agreement dated May 1, 1990 1994 Form 10-K
- -------------------------------------------------------------------------------------------------------------------
10.13 Second Amendment to Central Interstate Compact Agreement dated June 1994 Form 10-K
24, 1991
- -------------------------------------------------------------------------------------------------------------------
10.14 Third Amendment to Central Interstate Compact Agreement dated July 1994 Form 10-K
1, 1994
- -------------------------------------------------------------------------------------------------------------------
10.15 Settlement agreement dated May 25, 1988 among the Illinois Form 8-K dated 6-7-88
Department of Nuclear Safety, US Ecology, Inc. and American
Ecology Corporation of a December 1978 action related to the
closure, care and maintenance of the Sheffield, Illinois LLRW
disposal site
- -------------------------------------------------------------------------------------------------------------------
10.16 Nevada Division of Environmental Protection Permit for Hazardous 1988 Form 10-K
Waste Treatment, Storage and Disposal (Part B) issued to US Ecology,
Inc. dated June 24, 1988
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
17
<PAGE> 18
<TABLE>
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
10.17 Texas Water Commission Permit for Industrial Solid Waste Management 1988 Form 10-K
Site (Part B) issued to Texas Ecologists, Inc. dated December 5,
1988
- -------------------------------------------------------------------------------------------------------------------
10.18 Memorandum of Understanding between American Ecology Corporation and 1989 Form 10-K
the State of California dated August 15, 1988
- -------------------------------------------------------------------------------------------------------------------
10.19 United States Environmental Protection Agency approval to dispose of 1989 Form 10-K
non-liquid polychlorinated biphenyl (PCB) wastes at the Beatty,
Nevada chemical waste disposal facility
- -------------------------------------------------------------------------------------------------------------------
10.20 Employment Agreement between American Ecology Corporation and C. 1993 Form 10-K
Clifford Wright, Jr. dated April 1, 1994 * (terminated in 1995)
- -------------------------------------------------------------------------------------------------------------------
10.21 Employment Agreement between American Ecology Corporation and 1993 Form 10-K
William P. McCaughey dated April 1, 1994 * (terminated in 1995)
- -------------------------------------------------------------------------------------------------------------------
10.22 Employment Agreement between American Ecology Corporation and 1993 Form 10-K
Stephen W. Travers dated April 1, 1994 * (terminated in 1995)
- -------------------------------------------------------------------------------------------------------------------
10.23 Employment Agreement between American Ecology Corporation and Harry 1993 Form 10-K
O. Nicodemus, IV dated April 1, 1994 * (terminated in 1995)
- -------------------------------------------------------------------------------------------------------------------
10.24 Employment Agreement between American Ecology Corporation and Ronald 1993 Form 10-K
K. Gaynor dated April 1, 1994 * (terminated in 1995)
- -------------------------------------------------------------------------------------------------------------------
10.26 Amended and Restated American Ecology Corporation 1992 Stock Option Proxy Statement dated 4-26-94
Plan *
- -------------------------------------------------------------------------------------------------------------------
10.27 Amended and Restated American Ecology Corporation 1992 Outside Proxy Statement dated 4-26-94
Director Stock Option Plan *
- -------------------------------------------------------------------------------------------------------------------
10.28 American Ecology Corporation 401 (k) Savings Plan * 1994 Form 10-K
- -------------------------------------------------------------------------------------------------------------------
10.29 American Ecology Corporation Retirement Plan * 1994 Form 10-K
- -------------------------------------------------------------------------------------------------------------------
10.30 Credit Agreement between American Ecology Corporation, its 1994 Form 10-K
subsidiaries and Texas Commerce Bank National Association dated
December 1, 1994 (terminated by 10.41 below)
- -------------------------------------------------------------------------------------------------------------------
10.31 Security Agreement dated as of December 1, 1994 by American Ecology 1994 Form 10-K
Corporation in favor of Texas Commerce Bank, National Association
(terminated by 10.43 below)
- -------------------------------------------------------------------------------------------------------------------
10.32 Security Agreement by subsidiaries of American Ecology Corporation 1994 Form 10-K
dated as of December 1, 1994 in favor of Texas Commerce Bank,
National Association (terminated by 10.43 below)
- -------------------------------------------------------------------------------------------------------------------
10.33 Lease Agreement between American Ecology Corporation and VPM 1988-1, Form S-4 filed 12-24-92
Ltd. Dated October 14, 1992
- -------------------------------------------------------------------------------------------------------------------
10.34 Rights Agreement dated as of December 7, 1993 between American Form 8-K dated 12-7-93
Ecology Corporation and Chemical Shareholders Services Group, Inc.
as Rights Agent
- -------------------------------------------------------------------------------------------------------------------
10.35 Agreement and Plan of Merger by and between American Ecology Form S-4 dated 12-24-92
Corporation and Waste Processor Industries, Inc.
- -------------------------------------------------------------------------------------------------------------------
10.36 Settlement Agreement dated September 24, 1993 by US Ecology, Inc., 1993 Form 10-K
the State of Nevada, the Nevada State Environmental Commission, and
the Nevada Dept. of Human Resources
- -------------------------------------------------------------------------------------------------------------------
10.37 Settlement Agreement dated as of January 19, 1994 by and among US 1993 Form 10-K
Ecology, Inc., Staff of the Washington Utilities and Transportation
Commission, Precision Castparts Corp., Teledyne Wah Chang, Portland
General Electric Company, the Washington Public Power Supply System
and Public Service Company of Colorado.
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
18
<PAGE> 19
<TABLE>
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
10.38 Agreement dated January 28, 1994 between American Ecology Form 8-K dated 2-3-94
Corporation, Edward F. Heil, Edward F. Heil as trustee for
Edward F. Heil, Jr., Sandra Heil, and Karen Heil Irrevocable
Trust Agreement #2, Thomas W. McNamara and Thomas W. McNamara as
a trustee of the Jenner & Block Profit Sharing Trust No. 082.
- -------------------------------------------------------------------------------------------------------------------
10.39 Agreement of Purchase and Sale dated as of April 7, 1994 by and 1st Quarter 1994 Form 10-Q,
among American Ecology Corp., American Ecology Recycle Center, Inc., 3rd Quarter 1994 Form 10-Q
Quadrex Environmental Company and Quadrex Corporation, as amended by
Amendments dated June 14, 1994 and August 22, 1994.
- -------------------------------------------------------------------------------------------------------------------
10.40 Stock Purchase Agreement dated as of May 10, 1994 by and between 1st Quarter 1994 Form 10-Q,
American Ecology Corporation and Mobley Environmental Services, 3rd Quarter 1994 Form 10-Q
Inc., as amended by Amendment dated September 21, 1994.
- -------------------------------------------------------------------------------------------------------------------
10.41 Second Amended Restated Credit Agreement between American Ecology 1995 Form 10-K
Corporation , its subsidiaries and Texas Commerce Bank National
Association dated June 30, 1995
- -------------------------------------------------------------------------------------------------------------------
10.42 Security Agreement dated June 30, 1995 by American Ecology 1995 Form 10-K
Corporation in favor of Texas Commerce Bank National Association.
- -------------------------------------------------------------------------------------------------------------------
10.43 Security Agreement dated June 30, 1995 by subsidiaries of American 1995 Form 10-K
Ecology Corporation in favor of Texas Commerce Bank National
Association.
- -------------------------------------------------------------------------------------------------------------------
10.46 Rights Offering and Prospectus with American Ecology Corporation and Form S-3 dated 9-9-97
ChaseMellon Shareholder Services as Rights Agent.
- -------------------------------------------------------------------------------------------------------------------
10.47 Amended Rights Offering and Prospectus with American Ecology Form S-3/A dated 12-30-97
Corporation and ChaseMellon Shareholder Services as Rights Agent.
- -------------------------------------------------------------------------------------------------------------------
10.50 Increase Additional Number of Share Options to Directors Plan Form S-8 dated 12-30-98
of 1992
- -------------------------------------------------------------------------------------------------------------------
21 List of Subsidiaries 1994 Form 10-K
- -------------------------------------------------------------------------------------------------------------------
27 Financial Data Schedule
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
Management contract or compensatory plan.
(b) REPORTS ON FORM 8-K
<TABLE>
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
16.1 Change of Auditors Letter - November 25, 1996 Form 8-K
- -------------------------------------------------------------------------------------------------------------------
10.44 Series E Redeemable Convertible Preferred Stock - November 27, 1996 Form 8-K
- -------------------------------------------------------------------------------------------------------------------
10.45 Third Amended & Restated Credit Agreement - February 18, 1997 Form 8-K
- -------------------------------------------------------------------------------------------------------------------
10.48 Court Judgement Houston 88-January 26, 1998 Form 8-K
- -------------------------------------------------------------------------------------------------------------------
10.49 Bank Restructure-Chase Bank of Texas N.A. November 19, 1998 Form 8-K
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
19
<PAGE> 20
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: August 13, 1999
By: /s/ Jack K. Lemley
-------------------
Jack K. Lemley
Chief Executive Officer
Date: August 13, 1999
By: /s/ R. S. Thorn
---------------
R. S. Thorn
Vice President of Administration
Chief Accounting Officer
20
<PAGE> 21
EXHIBIT INDEX
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Exhibit Description Incorporated by Reference from
No. Registrant's
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
3.1 Restated Certificate of Incorporation, as amended 1989 Form 10-K
- -------------------------------------------------------------------------------------------------------------------
3.2 Certificate of Amendment to Restated Certificate of Incorporation Form S-4 dated 12-24-92
dated June 4, 1992
- -------------------------------------------------------------------------------------------------------------------
3.3 Amended and Restated Bylaws dated February 28, 1995 1994 Form 10-K
- -------------------------------------------------------------------------------------------------------------------
10.1 Sublease dated February 26, 1976, between the State of Washington, Form 10 filed 3-8-84
the United States Dept. of Commerce and Economic Development, and
Nuclear Engineering Company with Amendments dated January 11, 1980,
and January 14, 1982.
- -------------------------------------------------------------------------------------------------------------------
10.2 Lease dated May 1, 1977 ("Nevada Lease"), between the state of Form 10 filed 3-8-84
Nevada, Dept. of Human Resources and Nuclear Engineering Company,
with Addendum thereto, dated December 7, 1982
- -------------------------------------------------------------------------------------------------------------------
10.3 Addendum to Nevada Lease dated March 28, 1988 1989 Form 10-K
- -------------------------------------------------------------------------------------------------------------------
10.4 Nevada State Health Division, Radioactive Material License issued to 1989 Form 10-K
US Ecology, Inc. dated December 29, 1989
- -------------------------------------------------------------------------------------------------------------------
10.5 Administrative Order by Consent between the United States 1985 Form 10-K
Environmental Protection Agency and US Ecology, Inc. ("USE") dated
September 30, 1985
- -------------------------------------------------------------------------------------------------------------------
10.6 State of Washington Radioactive Materials License issued to US 1986 Form 10-K
Ecology, Inc. dated January 21, 1987
- -------------------------------------------------------------------------------------------------------------------
10.11 Agreement between the Central Interstate Low-Level Radioactive Waste 2nd Quarter 1988 10-Q
Compact Commission and US Ecology, Inc. for the development of a
facility for the disposal of low-level radioactive waste dated
January 28, 1988 ("Central Interstate Compact Agreement")
- -------------------------------------------------------------------------------------------------------------------
10.12 Amendment to Central Interstate Compact Agreement dated May 1, 1990 1994 Form 10-K
- -------------------------------------------------------------------------------------------------------------------
10.13 Second Amendment to Central Interstate Compact Agreement dated June 1994 Form 10-K
24, 1991
- -------------------------------------------------------------------------------------------------------------------
10.14 Third Amendment to Central Interstate Compact Agreement dated July 1994 Form 10-K
1, 1994
- -------------------------------------------------------------------------------------------------------------------
10.15 Settlement agreement dated May 25, 1988 among the Illinois Form 8-K dated 6-7-88
Department of Nuclear Safety, US Ecology, Inc. and American Ecology
Corporation of a December 1978 action related to the closure, care
and maintenance of the Sheffield, Illinois LLRW disposal site
- -------------------------------------------------------------------------------------------------------------------
10.16 Nevada Division of Environmental Protection Permit for Hazardous 1988 Form 10-K
Waste Treatment, Storage and Disposal (Part B) issued to US Ecology,
Inc. dated June 24, 1988
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 22
<TABLE>
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
10.17 Texas Water Commission Permit for Industrial Solid Waste Management 1988 Form 10-K
Site (Part B) issued to Texas Ecologists, Inc. dated December 5,
1988
- -------------------------------------------------------------------------------------------------------------------
10.18 Memorandum of Understanding between American Ecology Corporation and 1989 Form 10-K
the State of California dated August 15, 1988
- -------------------------------------------------------------------------------------------------------------------
10.19 United States Environmental Protection Agency approval to dispose of 1989 Form 10-K
non-liquid polychlorinated biphenyl (PCB) wastes at the Beatty,
Nevada chemical waste disposal facility
- -------------------------------------------------------------------------------------------------------------------
10.20 Employment Agreement between American Ecology Corporation and C. 1993 Form 10-K
Clifford Wright, Jr. dated April 1, 1994 * (terminated in 1995)
- -------------------------------------------------------------------------------------------------------------------
10.21 Employment Agreement between American Ecology Corporation and 1993 Form 10-K
William P. McCaughey dated April 1, 1994 * (terminated in 1995)
- -------------------------------------------------------------------------------------------------------------------
10.22 Employment Agreement between American Ecology Corporation and 1993 Form 10-K
Stephen W. Travers dated April 1, 1994 * (terminated in 1995)
- -------------------------------------------------------------------------------------------------------------------
10.23 Employment Agreement between American Ecology Corporation and Harry 1993 Form 10-K
O. Nicodemus, IV dated April 1, 1994 * (terminated in 1995)
- -------------------------------------------------------------------------------------------------------------------
10.24 Employment Agreement between American Ecology Corporation and Ronald 1993 Form 10-K
K. Gaynor dated April 1, 1994 * (terminated in 1995)
- -------------------------------------------------------------------------------------------------------------------
10.26 Amended and Restated American Ecology Corporation 1992 Stock Option Proxy Statement dated 4-26-94
Plan *
- -------------------------------------------------------------------------------------------------------------------
10.27 Amended and Restated American Ecology Corporation 1992 Outside Proxy Statement dated 4-26-94
Director Stock Option Plan *
- -------------------------------------------------------------------------------------------------------------------
10.28 American Ecology Corporation 401 (k) Savings Plan * 1994 Form 10-K
- -------------------------------------------------------------------------------------------------------------------
10.29 American Ecology Corporation Retirement Plan * 1994 Form 10-K
- -------------------------------------------------------------------------------------------------------------------
10.30 Credit Agreement between American Ecology Corporation, its 1994 Form 10-K
subsidiaries and Texas Commerce Bank National Association dated
December 1, 1994 (terminated by 10.41 below)
- -------------------------------------------------------------------------------------------------------------------
10.31 Security Agreement dated as of December 1, 1994 by American Ecology 1994 Form 10-K
Corporation in favor of Texas Commerce Bank, National Association
(terminated by 10.43 below)
- -------------------------------------------------------------------------------------------------------------------
10.32 Security Agreement by subsidiaries of American Ecology Corporation 1994 Form 10-K
dated as of December 1, 1994 in favor of Texas Commerce Bank,
National Association (terminated by 10.43 below)
- -------------------------------------------------------------------------------------------------------------------
10.33 Lease Agreement between American Ecology Corporation and VPM 1988-1, Form S-4 filed 12-24-92
Ltd. Dated October 14, 1992
- -------------------------------------------------------------------------------------------------------------------
10.34 Rights Agreement dated as of December 7, 1993 between American Form 8-K dated 12-7-93
Ecology Corporation and Chemical Shareholders Services Group, Inc.
as Rights Agent
- -------------------------------------------------------------------------------------------------------------------
10.35 Agreement and Plan of Merger by and between American Ecology Form S-4 dated 12-24-92
Corporation and Waste Processor Industries, Inc.
- -------------------------------------------------------------------------------------------------------------------
10.36 Settlement Agreement dated September 24, 1993 by US Ecology, Inc., 1993 Form 10-K
the State of Nevada, the Nevada State Environmental Commission, and
the Nevada Dept. of Human Resources
- -------------------------------------------------------------------------------------------------------------------
10.37 Settlement Agreement dated as of January 19, 1994 by and among US 1993 Form 10-K
Ecology, Inc., Staff of the Washington Utilities and Transportation
Commission, Precision Castparts Corp., Teledyne Wah Chang, Portland
General Electric Company, the Washington Public Power Supply System
and Public Service Company of Colorado.
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 23
<TABLE>
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
10.38 Agreement dated January 28, 1994 between American Ecology Form 8-K dated 2-3-94
Corporation, Edward F. Heil, Edward F. Heil as trustee for
Edward F. Heil, Jr., Sandra Heil, and Karen Heil Irrevocable
Trust Agreement #2, Thomas W. McNamara and Thomas W. McNamara as a
trustee of the Jenner & Block Profit Sharing Trust No. 082.
- -------------------------------------------------------------------------------------------------------------------
10.39 Agreement of Purchase and Sale dated as of April 7, 1994 by and 1st Quarter 1994 Form 10-Q,
among American Ecology Corp., American Ecology Recycle Center, Inc., 3rd Quarter 1994 Form 10-Q
Quadrex Environmental Company and Quadrex Corporation, as amended by
Amendments dated June 14, 1994 and August 22, 1994.
- -------------------------------------------------------------------------------------------------------------------
10.40 Stock Purchase Agreement dated as of May 10, 1994 by and between 1st Quarter 1994 Form 10-Q,
American Ecology Corporation and Mobley Environmental Services, 3rd Quarter 1994 Form 10-Q
Inc., as amended by Amendment dated September 21, 1994.
- -------------------------------------------------------------------------------------------------------------------
10.41 Second Amended Restated Credit Agreement between American Ecology 1995 Form 10-K
Corporation , its subsidiaries and Texas Commerce Bank National
Association dated June 30, 1995
- -------------------------------------------------------------------------------------------------------------------
10.42 Security Agreement dated June 30, 1995 by American Ecology 1995 Form 10-K
Corporation in favor of Texas Commerce Bank National Association.
- -------------------------------------------------------------------------------------------------------------------
10.43 Security Agreement dated June 30, 1995 by subsidiaries of American 1995 Form 10-K
Ecology Corporation in favor of Texas Commerce Bank National
Association.
- -------------------------------------------------------------------------------------------------------------------
10.46 Rights Offering and Prospectus with American Ecology Corporation and Form S-3 dated 9-9-97
ChaseMellon Shareholder Services as Rights Agent.
- -------------------------------------------------------------------------------------------------------------------
10.47 Amended Rights Offering and Prospectus with American Ecology Form S-3/A dated 12-30-97
Corporation and ChaseMellon Shareholder
Services as Rights Agent.
- -------------------------------------------------------------------------------------------------------------------
10.50 Increase Additional Number of Share Options to Directors Plan of 1992 Form S-8 dated 12-30-98
- -------------------------------------------------------------------------------------------------------------------
21 List of Subsidiaries 1994 Form 10-K
- -------------------------------------------------------------------------------------------------------------------
27 Financial Data Schedule
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 2,040
<SECURITIES> 0
<RECEIVABLES> 7,067
<ALLOWANCES> 1,150
<INVENTORY> 0
<CURRENT-ASSETS> 10,502
<PP&E> 8,318
<DEPRECIATION> 1,181
<TOTAL-ASSETS> 55,548
<CURRENT-LIABILITIES> 15,688
<BONDS> 0
0
1
<COMMON> 136
<OTHER-SE> 18,654
<TOTAL-LIABILITY-AND-EQUITY> 55,548
<SALES> 18,086
<TOTAL-REVENUES> 18,086
<CGS> 9,020
<TOTAL-COSTS> 8,745
<OTHER-EXPENSES> (1,270)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 73
<INCOME-PRETAX> 1,591
<INCOME-TAX> 47
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,544
<EPS-BASIC> .10
<EPS-DILUTED> .08
</TABLE>
