Duratek (NASDAQ:DRTK)
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Duratek, Inc. (NASDAQ:DRTK) today reported net income of
$2.8 million, or $0.18 per diluted share, for the three-month period
ended September 30, 2005, as compared to net income of $9.3 million,
or $0.63 per diluted share, for the comparable period in 2004.
Revenues were $67.1 million for the three months ended September 30,
2005 compared to $77.4 million in the same period in 2004. The
decrease in net income was primarily the result of losses incurred on
two Federal Services contracts, lower margins realized in Commercial
Services and Commercial Processing related to product mix changes, and
lower revenues in Commercial Services due largely to the lower than
anticipated level of new Commercial work required to offset projects
completed during the year. In addition, a number of items favorably
impacted the prior year third quarter net income such as higher
incentive fees and equitable adjustments on certain Federal Services
contracts, as well as additional revenues realized on the early
termination of a Commercial Services fixed price contract. The
decrease in revenues of $10.3 million for the quarter was primarily
due to lower revenues generated by the Commercial Services and Federal
Services businesses.
For the nine month period ended September 30, 2005, net income was
$13.0 million, or $0.85 per diluted share, as compared to net income
of $18.0 million, or $1.23 per diluted share, for the comparable
period in 2004. Revenues were $212.7 million for the nine months ended
September 30, 2005 compared to revenues of $215.1 million for the same
period in 2004. The decrease in the year-to-date net income of $5.0
million was due to the items discussed previously. The decrease in
year-to-date revenues of $2.4 million was due primarily to lower
revenues generated by the Commercial Services business segment offset
partially by higher revenues from Federal Services.
Robert E. Prince, President and CEO said, "Over the past four
years we have realized continuous improvement of our financial results
and achieved relatively consistent results when viewed on an annual
basis. During this same period we have been positioning the company
for improving markets for our services. Large upcoming projects
supporting the Department of Energy cleanup, emerging international
markets, and broadening of services we can provide to domestic
commercial nuclear licensees all should present us with attractive
long-term growth opportunities. Unfortunately, the timing for
capturing these new federal and commercial opportunities is difficult
to predict, contributing to the lower performance achieved during the
third quarter and expected for the full year."
Robert F. Shawver, Executive Vice President and CFO added, "Some
major swing items explain the contrast between the record third
quarter of 2004 results and this year's performance. The combination
of a number of items that significantly added to last year's income,
the current quarter losses incurred on two of our Federal Services
projects, as well as the lower revenues overall account for most of
the decrease in income. We continue to work on recovering claims on
the contracts that experienced the losses as well as adding new
business to increase revenues in higher margin areas."
A conference call will be held today at 10:00 a.m. Eastern Time.
Investors can listen to the conference call by logging into
www.duratekinc.com or by calling 1-800-857-4830, pass code Duratek. In
addition to the web cast and teleconference, the Company will be
placing a presentation of the data on its website under investor
relations financial report 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 November 17, 2005 by dialing 1-866-415-3313. The web
cast will be archived on the Duratek website for at least 30 days.
Consolidated balance sheet, statement of operations, and statement
of cash flows are attached.
Duratek provides safe, secure radioactive materials disposition
and nuclear facility operations for commercial and government
customers.
Certain statements contained in this press release may constitute
"forward-looking statements" within the meaning of Section 21E(i)(1)
of the Securities Exchange Act of 1934. Such forward-looking
statements involve known and unknown risks, uncertainties and other
factors that may cause Duratek's actual results to be materially
different from any future results expressed or implied by these
statements. Such factors include the following: the Company's ability
to manage its commercial waste processing operations, the timing and
award of contracts by the U.S. Department of Energy for the cleanup of
waste sites administered by it; the acceptance and implementation of
the Company's waste treatment technologies in the government and
commercial sectors; and other large technical support services
projects; the Company's ability to successfully add revenues from new
contracts; and the timing of completing existing contracts. 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.
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DURATEK, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands of dollars, except per share amounts)
September 30, December 31,
2005 2004
------------- -------------
Assets (unaudited) (1)
Current assets:
Cash and cash equivalents $ 19 $ 23,296
Accounts receivable, net of allowance
for doubtful accounts of $100 in
2005 and $158 in 2004 44,428 30,997
Cost and estimated earnings in excess
of billings on uncompleted contracts 18,906 16,715
Prepaid expenses and other current
assets 9,669 13,708
------------- -------------
Total current assets 73,022 84,716
Retainage 526 1,257
Property, plant and equipment, net 63,761 66,151
Goodwill 72,129 72,129
Other intangible assets 2,953 3,747
Decontamination and decommissioning
trust fund 19,375 19,050
Other assets 31,494 21,487
------------- -------------
Total assets $ 263,260 $ 268,537
============= =============
Liabilities and Stockholders' Equity
Current liabilities:
Short-term borrowings $ 1,750 $ -
Current portion of long-term debt 859 858
Accounts payable 6,675 15,643
Due to State of South Carolina 3,743 6,073
Accrued expenses and other current
liabilities 20,304 24,646
Unearned revenues 9,510 14,694
Waste processing and disposal
liabilities 5,005 6,980
------------- -------------
Total current liabilities 47,846 68,894
Long-term debt, less current portion 83,497 84,142
Facility and equipment decontamination
and decommissioning liabilities 41,478 40,419
Other noncurrent liabilities 7,541 6,756
------------- -------------
Total liabilities 180,362 200,211
------------- -------------
Stockholders' equity:
Preferred stock - $0.01 par value;
authorized 4,740,000 shares; none
issued - -
Series B junior participating
preferred stock, $0.01 par value;
100,000 shares authorized; none
issued - -
Common stock - $0.01 par value;
authorized 35,000,000 shares; issued
16,463,407 shares at September 30,
2005 and 16,236,781 shares at
December 31, 2004 165 162
Capital in excess of par value 88,379 86,784
Deferred compensation employee stock
trust 1,323 1,323
Retained earnings (accumulated
deficit) 3,931 (9,043)
Treasury stock at cost, 1,770,306
shares at September 30, 2005 and
December 31, 2004 (10,900) (10,900)
------------- -------------
Total stockholders' equity 82,898 68,326
------------- -------------
Total liabilities and
stockholders' equity $ 263,260 $ 268,537
============= =============
(1) The Consolidated Balance Sheet as of December 31, 2004 has been
derived from our audited Consolidated Balance Sheet included in
our Annual Report on Form 10-K for the year ended December 31,
2004.
DURATEK, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(in thousands, except per share amounts)
Three months ended Nine months ended
----------------------- -----------------------
September September September September
30, 2005 26, 2004 30, 2005 26, 2004
----------- ----------- ----------- -----------
(unaudited) (unaudited)
Revenues $ 67,113 $ 77,403 $ 212,683 $ 215,140
Cost of revenues 52,706 52,561 162,442 156,659
----------- ----------- ----------- -----------
Gross profit 14,407 24,842 50,241 58,481
Selling, general and
administrative
expenses 8,405 8,006 24,702 24,045
----------- ----------- ----------- -----------
Income from
operations 6,002 16,836 25,539 34,436
Interest expense (1,624) (1,741) (4,768) (5,295)
Other income, net 13 129 54 261
----------- ----------- ----------- -----------
Income before
income taxes and
equity in income
of joint ventures 4,391 15,224 20,825 29,402
Income taxes 1,690 5,941 8,030 11,467
----------- ----------- ----------- -----------
Income before
equity in income
of joint ventures 2,701 9,283 12,795 17,935
Equity in income of
joint ventures 119 27 179 106
----------- ----------- ----------- -----------
Net income 2,820 9,310 12,974 18,041
Preferred stock
dividends - - - (60)
----------- ----------- ----------- -----------
Net income
attributable to
common
stockholders $ 2,820 $ 9,310 $ 12,974 $ 17,981
=========== =========== =========== ===========
Weighted average
common stock
outstanding:
Basic 14,838 14,301 14,749 14,099
=========== =========== =========== ===========
Diluted 15,344 14,844 15,294 14,659
=========== =========== =========== ===========
Income per share:
Basic $ 0.19 $ 0.65 $ 0.88 $ 1.28
=========== =========== =========== ===========
Diluted $ 0.18 $ 0.63 $ 0.85 $ 1.23
=========== =========== =========== ===========
DURATEK, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(in thousands of dollars)
Nine months ended
----------------------------
September 30, September 26,
2005 2004
------------- -------------
(Unaudited)
Cash flows from operating activities:
Net income $ 12,974 $ 18,041
Adjustments to reconcile net income
to net cash used in operating
activities:
Depreciation and amortization 7,910 8,036
Stock compensation expense 74 85
Equity in income of joint
ventures, net of distributions (360) 86
Changes in operating assets and
liabilities:
Accounts receivable, net (13,442) 2,215
Costs and estimated earnings in
excess of billings on
uncompleted contracts (10,102) (9,739)
Prepaid expenses and other
current assets 1,632 1,547
Accounts payable and accrued
expenses and other current
liabilities (13,554) (7,652)
Due to State of South Carolina (2,330) (8,869)
Unearned revenues (5,184) (7,161)
Waste processing and disposal
liabilities (1,975) 4
Facility and equipment
decontamination and
decommissioning liabilities 734 673
Retainage 2,707 282
Other (1,216) (1,074)
------------- -------------
Net cash used in operating
activities (22,132) (3,526)
------------- -------------
Cash flows from investing activities:
Additions to property, plant and
equipment (3,191) (3,605)
Other (61) (205)
------------- -------------
Net cash used in investing
activities (3,252) (3,810)
------------- -------------
Cash flows from financing activities:
Proceeds from borrowings under
revolving credit facility 1,750 -
Proceeds from issuance of common
stock 1,524 3,099
Repayments of long-term debt (644) (25,000)
Deferred financing costs paid (127) (27)
Repayments of capital lease
obligations (396) (220)
Preferred stock dividends paid - (114)
------------- -------------
Net cash provided by (used in)
financing activities 2,107 (22,262)
------------- -------------
Net decrease in cash (23,277) (29,598)
Cash, beginning of period 23,296 35,174
------------- -------------
Cash, end of period $ 19 $ 5,576
============= =============
Supplemental disclosure of non-cash financing activities:
During the nine months ended September 30, 2005, we entered into
$1,068 in capital lease agreements to finance the purchase of
machinery and computer equipment. During the nine months ended
September 26, 2004, we entered into $174 in capital lease agreements
to finance the purchase of machinery and equipment.
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