Revenues of $460 Million; EBITDA of $41.9 Million; Net Income Before the Non-Cash Impact of Amortization of Intangible Assets of $17.2 Million, or $0.19 per Share
SALT LAKE CITY, UT -- (Marketwire) -- 08/11/08 -- EnergySolutions, Inc. (NYSE: ES)
("EnergySolutions" or the "Company"), a leading provider of specialized,
technology-based nuclear services to government and commercial customers,
today announced financial results for the Company's second quarter ended
June 30, 2008.
Second Quarter 2008 Results
Revenues for the quarter ended June 30, 2008 were $460 million, compared to
$162 million for the same quarter in 2007. Gross profit was $61.1 million,
compared to gross profit of $45.7 million for the quarter ended June 30,
2007. Selling, general and administrative expenses were $29.9 million,
compared to $23.0 million in the same quarter of the prior year. Included
in these expenses was $0.5 million related to the Company's secondary
offering of 40.25 million shares, on behalf of its majority shareholder,
which was completed in July. It is estimated that an additional $1.1
million of expenses related to the secondary offering will be incurred in
the third quarter.
The Company generated cash flow from operations of $20.8 million during the
quarter, which enabled it to repay $10 million of long-term debt. This
repayment, together with the effect of lower interest rates and repayments
of debt from the proceeds of the Company's initial public offering in
November 2007, have contributed to the reduction of interest expense, which
was $11.2 million in the second quarter of 2008, compared to $15.3 million
in the same quarter of last year.
Net income for the quarter ended June 30, 2008 was $12.6 million, or $0.14
per diluted share, compared to $6.0 million for the same quarter a year
ago. EBITDA during the quarter was $41.9 million, up from $32.3 million for
the same quarter in the prior year, and net income before the non-cash
impact of amortization of intangible assets was $17.2 million, or $0.19 per
diluted share, based on 88.3 million fully diluted shares outstanding.
"In this, our second full quarter as a public company, I am very pleased
with the performance of each of our business units and the progress each
has made in executing our long-term strategic goals," said R Steve Creamer,
the Company's Chief Executive Officer. "We had a strong second quarter,
particularly in our international operations, where we exceeded our
performance targets on our Magnox contracts in the United Kingdom,
resulting in increased efficiency fees earned by the Company during the
quarter."
Business Segments - Second Quarter 2008
The results of the Company's four business segments, on a GAAP basis, are
presented in Table 5 in the accompanying schedules.
Federal Services revenues for the second quarter of 2008 were $73.1
million, up from revenues of $37.2 million in the same quarter last year.
Segment income from operations for the second quarter of 2008 was $6.3
million, compared to $7.6 million in the same quarter last year. The
operating margin was 8.6%, compared to 20.4% in the same quarter of last
year. During the fourth quarter 2007 and the first quarter 2008, the
Company, at the request of its customer, the Department of Energy, assumed
voting control over two joint ventures. As a result, these joint ventures
were consolidated this year, adding approximately $36.0 million to revenues
during the second quarter at a lower operating margin.
Commercial Services revenues for the second quarter of 2008 were $26.2
million, compared to $38.6 million in the same quarter of last year.
Segment income from operations was $6.2 million, up from $5.6 million in
the same quarter last year. The operating margin was 23.8%, up from 14.4%
in the same quarter last year. The improvement in the segment's income from
operations was primarily due to increased revenues from the Company's spent
fuel operations, which have higher margins, and decreased revenues from
engineering projects, which have lower margins.
Logistics, Processing and Disposal revenues for the second quarter of 2008
were $63.0 million, compared to $69.3 million in the same quarter of last
year. Segment income from operations was $22.7 million, compared to $26.0
million in the same quarter last year. The operating margin for the second
quarter of 2008 was 36.0%, compared to 37.5% in the same quarter of last
year. The decreased revenues were primarily the result of lower volumes of
waste disposed by the Company's federal customers at its facility in Clive,
Utah.
International revenues for the second quarter of 2008 were $298.0 million,
compared to $16.7 million in the same quarter of last year. Segment income
from operations was $13.8 million, compared to an operating loss of $2.0
million in the same quarter last year. The operating margin was 4.6%
compared to a negative 11.7% in the same quarter of last year. The
substantial increase in international revenues and segment operating income
resulted from the acquisition of RSMC in June 2007. The operating profit
for the quarter included $8.5 million of efficiency fees earned from its
Magnox contracts.
Outlook for 2008
"Stronger than expected performance this quarter, together with accelerated
performance of commercial service contracts during the first quarter, will
level out our earnings between the first half and second half of the year,"
Mr. Creamer added. "This is contrary to our forecasts at the beginning of
the year, when we expected greater sales and earnings in the second half.
We still estimate our full year revenues should be in the range of $1.8
billion to $1.9 billion and earnings per share should be in the range of
$0.69 to $0.74, excluding approximately $1.6 million of expenses related to
the Company's secondary offering completed on July 31, 2008. We expect
earnings per share before the impact of non-cash amortization of intangible
assets should be in the range of $0.89 to $0.94, excluding offering
expenses," concluded Mr. Creamer. When calculating per share amounts, the
Company assumes a weighted-average fully diluted share count for the year
of 89 million shares. EBITDA for the year ending December 31, 2008 is
expected to be between $195 million and $205 million, excluding offering
expenses. Amortization expense of intangible assets, net of related income
tax expense, is expected to be $17.8 million. Compensation expense related
to stock option grants is expected to be $9.1 million for 2008. Capital
expenditures for the year are expected to be approximately $37 million, of
which approximately $17 million relates to one-time purchases of equipment
for the Company's Atlas mill tailings contract.
Forward-Looking Statements
Statements in this news release regarding future financial and operating
results and any other statements about the Company's future expectations,
beliefs or prospects expressed by management constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform
Act of 1995. There are a number of important factors that could cause
actual results or events to differ materially from those indicated by such
forward-looking statements, including economic conditions generally.
Additional information on potential factors that could affect the Company's
results and other risks and uncertainties are set forth in EnergySolutions,
Inc. filings with the Securities and Exchange Commission including its
annual report on Form 10-K for the fiscal year ended December 31, 2007 and
the prospectus for its secondary offering, filed with the Securities and
Exchange Commission on July 25, 2008. The Company does not undertake any
obligation to release publicly any revision to any of these forward-looking
statements.
Conference Call
The Company will conduct a conference call at 12:00 p.m. EDT on Monday,
August 11, 2008, to discuss financial results for the second quarter ended
June 30, 2008.
Hosting the call will be R Steve Creamer, Chairman and Chief Executive
Officer, and Philip Strawbridge, Chief Financial Officer.
To participate in the event by telephone, please dial (866) 770-7125 five
to ten minutes prior to the start time (to allow time for registration) and
reference the conference passcode 26372089. International callers should
dial (617) 213-8066 and use the same passcode.
A replay of the call will be available on Monday, August 11, 2008, at 2:00
p.m. EDT through Monday, August 18, 2008, at 2:00 pm EDT. To access the
replay, dial (888) 286-8010 and enter passcode 59034960. International
callers should dial (617) 801-6888 and enter the same passcode.
The conference call will be broadcast live over the Internet and can be
accessed by all interested parties through the Company's Web site at
www.energysolutions.com by clicking on the "investor relations" tab at the
top of the home page. To listen to the live call, please visit the Web site
at least 15 minutes prior to the start of the call to register, download
and install any necessary audio software. An audio replay of the event will
be archived on EnergySolutions' Web site for 90 days.
About EnergySolutions
EnergySolutions offers customers a full range of integrated services and
solutions, including nuclear operations, characterization, decommissioning,
decontamination, site closure, transportation, nuclear materials
management, the safe, secure disposition of nuclear waste, and research and
engineering services across the fuel cycle.
Table 1
ENERGYSOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in thousands, except per share data)
For the Quarter For the Six Months
Ended June 30, Ended June 30,
2008 2007 2008 2007
---------- ---------- ---------- ----------
Revenues $ 460,345 $ 161,707 $ 962,098 $ 275,858
Cost of revenues 399,234 116,012 828,004 199,369
---------- ---------- ---------- ----------
Gross profit 61,111 45,695 134,094 76,489
Selling, general and
administrative expenses 29,921 23,012 58,511 51,340
---------- ---------- ---------- ----------
Income from operations 31,190 22,683 75,583 25,149
Interest expense (11,179) (15,341) (22,839) (30,711)
Other income (expenses), net 242 410 (1,819) 558
---------- ---------- ---------- ----------
Income (loss) before
minority interests and
income taxes 20,253 7,752 50,925 (5,004)
Minority interests (505) - (700) -
Income tax (expense) benefit (7,153) (1,760) (18,337) 652
---------- ---------- ---------- ----------
Net income (loss) $ 12,595 $ 5,992 $ 31,888 $ (4,352)
========== ========== ========== ==========
Net income per share:
Basic $ 0.14 $ 0.36
Diluted $ 0.14 $ 0.36
Number of shares used in
per share calculations:
Basic 88,303,500 88,303,500
Diluted 88,310,022 88,310,022
Table 2
ENERGYSOLUTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
ASSETS June 30, 2008 December 31, 2007
---------------- ----------------
Current assets:
Cash and cash equivalents $ 42,242 $ 36,366
Accounts receivable, net of
allowance for doubtful accounts 422,579 366,083
Other current assets 131,675 103,233
---------------- ----------------
Total current assets 596,496 505,682
Property, plant & equipment, net 107,287 110,688
Goodwill 526,333 526,040
Other intangible assets, net 370,293 383,812
Other noncurrent assets 127,778 98,728
---------------- ----------------
Total assets $ 1,728,187 $ 1,624,950
================ ================
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 1,698 $ 1,557
Accounts payable 187,082 155,663
Accrued expenses and other current
liabilities 269,251 233,588
Other current liabilities 49,918 45,135
---------------- ----------------
Total current liabilities 507,949 435,943
Long-term debt, less current portion 575,270 605,410
Other noncurrent liabilities 205,658 178,206
---------------- ----------------
Total liabilities 1,288,877 1,219,559
---------------- ----------------
Minority interests 899 68
Commitments and contingencies
Stockholders' equity 438,411 405,323
---------------- ----------------
Total liabilities and stockholders'
equity $ 1,728,187 $ 1,624,950
================ ================
Table 3
ENERGYSOLUTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in thousands)
For the Quarter For the Six Months
Ended June 30, Ended June 30,
2008 2007 2008 2007
-------- -------- -------- --------
Cash Provided by Operating
Activities $ 20,767 $ 39,102 $ 46,431 $ 71,564
-------- -------- -------- --------
Investing Activities
Purchases of businesses,
net of cash acquired - (176,376) - (191,486)
Purchases of property,
plant and equipment (4,400) (1,789) (5,680) (3,532)
Other items 27 - 27 -
-------- -------- -------- --------
Cash Used in Investing Activities (4,373) (178,165) (5,653) (195,018)
-------- -------- -------- --------
Financing Activities
Net borrowings (repayments) of
long-term debt (10,000) 176,000 (30,000) 164,000
Dividends/distributions to
shareholders (2,207) (6,264) (4,415) (8,897)
Other items (607) (7,312) (1,134) (10,148)
-------- -------- -------- --------
Cash Provided by (Used in)
Financing Activities (12,814) 162,424 (35,549) 144,955
-------- -------- -------- --------
Effect of Exchange Rate on Cash 576 174 647 240
-------- -------- -------- --------
Increase in Cash and Cash
Equivalents $ 4,156 $ 23,535 $ 5,876 $ 21,741
======== ======== ======== ========
Amortization of Intangible Assets $ 7,181 $ 5,023 $ 14,378 $ 9,826
======== ======== ======== ========
Depreciation $ 4,436 $ 4,530 $ 9,057 $ 9,101
======== ======== ======== ========
Table 4
ENERGYSOLUTIONS, INC.
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA AND NET INCOME (LOSS)
BEFORE THE IMPACT OF AMORTIZATION OF INTANGIBLE ASSETS (UNAUDITED)
(Dollars in thousands, except per share data)
For the Quarter For the Six Months
Ended June 30, Ended June 30,
2008 2007 2008 2007
---------- ---------- ---------- ----------
Reconciliation of net income
(loss) to EBITDA:
Net income (loss) $ 12,595 $ 5,992 $ 31,888 $ (4,352)
Interest expense 11,179 15,341 22,839 30,711
Interest rate swap loss (gain) (629) (308) 2,213 (38)
Income tax expense (benefit) 7,153 1,760 18,337 (652)
Depreciation expense 4,436 4,530 9,057 9,101
Amortization of intangible
assets 7,181 5,023 14,378 9,826
---------- ---------- ---------- ----------
EBITDA $ 41,915 $ 32,338 $ 98,712 $ 44,596
========== ========== ========== ==========
Reconciliation of net income
(loss) to net income (loss)
before the impact of
amortization of intangible
assets:
Net income (loss) $ 12,595 $ 5,992 $ 31,888 $ (4,352)
Amortization of intangible
assets 7,181 5,023 14,378 9,826
Income tax expense related to
amortization of intangible
assets (2,608) (1,140) (5,249) (1,280)
---------- ---------- ---------- ----------
Net income (loss) before
the impact of
amortization of
intangible assets $ 17,168 $ 9,875 $ 41,017 $ 4,194
========== ========== ========== ==========
Net income before the impact of
amortization of intangible
assets per share:
Basic $ 0.19 $ 0.46
Diluted $ 0.19 $ 0.46
Number of shares used in per
share calculations:
Basic 88,303,500 88,303,500
Diluted 88,310,022 88,310,022
The Company defines EBITDA as earnings before interest expense, income
taxes, depreciation and amortization. The Company uses EBITDA to facilitate
a comparison of its operating performance on a consistent basis from period
to period that, when viewed with its GAAP results and the above
reconciliation, management believes it provides a more complete
understanding of factors and trends affecting its business than GAAP
measures alone. EBITDA assists management in comparing its operating
performance on a consistent basis because it removes the impact of its
capital structure (primarily interest charges), asset base (primarily
depreciation and amortization) and items outside the control of its
management team (taxes) from its results of operations. EBITDA should not
be considered as a substitute for net income or income from operations, as
determined in accordance with GAAP. EBITDA is not defined by GAAP, and you
should not consider it in isolation or as a substitute for analyzing the
Company's results as reported under GAAP.
The Company defines net income before the impact of amortization of
intangible assets as net income plus amortization expense of intangible
assets, net of the related income tax expense of these items. Net income
before the impact of amortization of intangible assets and net income
before the impact of amortization of intangible assets per share are not
computed in accordance with GAAP. These non-GAAP measures may be useful to
investors seeking to compare the operating performance on a consistent
basis from period to period that, when viewed with its GAAP results and the
above reconciliation, management believes provides a more complete
understanding of factors and trends affecting the Company's business than
GAAP measures alone. Net income before the impact of amortization of
intangible assets and net income before the impact of amortization of
intangible assets per share should not be considered as a substitute for
net income or net income per share, as determined in accordance with GAAP.
Net income before the impact of amortization of intangible assets and net
income before the impact of amortization of intangible assets per share are
not defined by GAAP, and you should not consider them in isolation or as a
substitute for analyzing the Company's results as reported under GAAP.
Table 5
ENERGYSOLUTIONS, INC.
REPORTING SEGMENT INFORMATION (UNAUDITED)
(Dollars in thousands)
For the Quarter Ended June 30, For the Six Months Ended June 30,
2008 2007 2008 2007
-------- -------- -------- --------
Revenues
Federal
Services $ 73,124 $ 37,165 $117,711 $ 72,092
Commercial
Services 26,225 38,606 56,820 63,947
LP&D 63,044 69,263 117,159 123,146
Inter-
national 297,952 16,673 670,408 16,673
-------- -------- -------- --------
Total
Revenues $460,345 $161,707 $962,098 $275,858
======== ======== ======== ========
Gross Profit
and Margin
Federal
Services $ 9,106 12.5% $ 10,678 28.7% $ 17,222 14.6% $ 19,350 26.8%
Commercial
Services 7,985 30.4% 5,944 15.4% 19,565 34.4% 10,765 16.8%
LP&D 25,234 40.0% 28,096 40.6% 44,262 37.8% 45,397 36.9%
International
Operations 18,786 6.3% 977 5.9% 53,045 7.9% 977 5.9%
-------- -------- -------- --------
Total Gross $
Profit $ 61,111 13.3% $ 45,695 28.3% 134,094 13.9% $ 76,489 27.7%
======== ======== ======== ========
Income from
Operations
and Margin
Federal
Services $ 6,270 8.6% $ 7,565 20.4% $ 12,618 10.7% $ 13,785 19.1%
Commercial
Services 6,230 23.8% 5,563 14.4% 15,874 27.9% 5,624 8.8%
LP&D 22,665 36.0% 25,956 37.5% 38,989 33.3% 41,060 33.3%
Inter-
national 13,823 4.6% (1,959) -11.7% 43,928 6.6% (1,959) -11.7%
-------- -------- -------- --------
Total
Income
from
Operations
before
corporate
unallocated
items 48,988 10.6% 37,125 23.0% 111,409 11.6% 58,510 21.2%
Corporate
unallocated
items (17,798) (14,442) (35,826) (33,361)
-------- -------- -------- --------
Total
Income
from
Operations $ 31,190 $ 22,683 $ 75,583 $ 25,149
======== ======== ======== ========
Contact:
For more information, please contact:
Tim Barney
(801) 649-2233
Email Contact
