(Source: MARKETWIRE)
EnergySolutions, Inc. (NYSE: ES), a leading provider of specialized,
technology-based nuclear services to government and commercial
customers, today announced financial results for the Company's third
quarter ended September 30, 2009.
Q3 2009 Highlights
-- GAAP EPS of $0.15 per share
-- Net income attributable to EnergySolutions before non-cash impact of
amortization of intangible assets of $17.6 million, or $0.20 per share
-- EBITDA of $31.8 million
-- Strengthened balance sheet by paying down $35.9 million in long-term
debt
Third Quarter 2009 Results
Revenues for the third quarter of 2009 were $364.9 million, compared
with $419.5 million in the third quarter of 2008. Gross profit for the
third quarter of 2009 was $43.9 million, compared with $56.5 million
for the third quarter of 2008. Selling, general and administrative
expenses for the third quarter of 2009 were $25.6 million, compared
with $30.7 million for the third quarter of 2008.
Net income attributable to EnergySolutions for the third quarter of
2009 was $12.9 million, or $0.15 per share, compared with $10.9
million, or $0.12 per share, for the third quarter of 2008. Net
income attributable to EnergySolutions before the non-cash impact of
amortization of intangible assets for the third quarter of 2009 was
$17.6 million, or $0.20 per share, compared with the third quarter of
2008 of $15.6 million, or $0.18 per share. EBITDA for the third
quarter of 2009 was $31.8 million, compared with $36.8 million for
the third quarter of 2008. A reconciliation of EBITDA and of net
income attributable to EnergySolutions before the non-cash impact of
amortization of intangible assets to net income attributable to
EnergySolutions is provided in the attached Table 4.
During the third quarter ended September 30, 2009, the Company
determined that it had inappropriately applied authoritative guidance
related to intangible assets and goodwill denominated in foreign
currencies. As such, the Company recorded an entry during the
quarter ended September 30, 2009 for $1.8 million to reduce
amortization expense recorded in previous periods. Of this $1.8
million, $1.2 million related to the first and second quarters of
2009 and $0.6 million related to periods prior to 2009.
CEO Commentary
Commenting on the quarter, Steve Creamer, EnergySolutions CEO, said,
"Our overall level of commercial business activity remained lower than
normal as customers continued to remain cautious in moving forward on
planned projects. In addition, projects funded by the American
Recovery and Reinvestment Act continued to be slow in progressing.
However, as commercial customers gain further confidence in the
stability of the recovering economy and as more stimulus dollars are
deployed, I am optimistic that we will see improving trends in 2010."
Business Segments - Third Quarter 2009
The results of the Company's four business segments, on a GAAP basis,
are presented in Table 5 in the accompanying financial tables.
Federal Services
Federal Services revenues for the third quarter of 2009 were $77.0
million, compared with $84.3 million in the third quarter of 2008.
The decline in revenue is primarily attributable to lower revenue at
one of the Company's consolidated joint ventures due to substantial
completion of the construction phase of the project. This was
partially offset by increased revenues at the Moab Atlas mill
tailings project due a higher level of activity and increased
revenues at the Isotek waste remediation project at the Oak Ridge
National Laboratory.
Income from operations for the third quarter of 2009 was $5.9
million, compared with $10.9 million for the third quarter of 2008.
Operating margin was 7.6% for the third quarter of 2009, compared to
12.9% for the third quarter of 2008. Operating margin declined
primarily due to an unfavorable shift in project mix, with increased
activity on lower margin contracts and decreased activity on higher
margin projects including the Savannah River and Hanford sites.
Operating margin also declined due to increased bid and contract
proposal expenses incurred for the submission of bids on two large
federal proposals.
The Company's proportional share of income from its joint ventures in
which it has noncontrolling interests is included in Other Income and
was $2.8 million for the third quarter of 2009, compared with $0.9
million for the third quarter of 2008. This increase was due to the
Company's proportional share of income from its joint venture that
won the Hanford Tank contract in July 2008.
Commercial Services
Commercial Services revenues for the third quarter of 2009 were $21.3
million, compared with $19.2 million for the third quarter of 2008.
The increase in revenue is primarily due to large component operations
related to the Duke McGuire project.
Income from operations for the third quarter of 2009 was $4.7
million, compared with $4.7 million in the third quarter of 2008.
Operating margin was 22.1% for the third quarter of 2009, compared to
24.4% for the third quarter of 2008. The decline in operating margin
is primarily due to lower margins on commercial decommissioning
projects.
Logistics, Processing and Disposal
Logistics, Processing and Disposal revenues for the third quarter of
2009 were $52.7 million, compared to $66.2 million in the third
quarter of 2008. The decline in revenue is primarily due to lower
commercial waste volumes at the Clive, Utah facility, as well as
decreased revenue from the Company's manufacturing operations, which
had a significant shipment of product in the third quarter of 2008.
Income from operations for the third quarter of 2009 was $18.2
million, compared with $25.5 million for the third quarter of 2008.
Operating margin was 34.5% for the third quarter of 2009, compared to
38.6% for the third quarter of 2008. The decline in operating margin
is primarily due to lower gross margins at the Clive, Utah facility
and in the Company's manufacturing operations.
International
Excluding the effects of fluctuations in foreign currency exchange
rates, International revenues for the third quarter of 2009 decreased
by $4.0 million, compared with the third quarter of 2008, primarily
due to a lower reimbursable contract cost base of the Company's
Magnox contracts. International revenues were also negatively
impacted by $31.9 million due to foreign currency fluctuations. As a
result, on a GAAP basis, International revenues for the third quarter
of 2009 were $213.9 million, compared to $249.8 million for the third
quarter of 2008.
Income from operations for the third quarter of 2009 was $3.6
million, compared with $3.3 million for the third quarter of 2008.
Operating margin was 1.7% for the third quarter of 2009, compared to
1.3% for the third quarter of 2008. The increase in operating income
and margin was primarily due to decreased amortization expense of
intangible assets, which was partially offset by increased bid and
proposal costs as well as foreign currency fluctuations.
Liquidity and Capital Resources
As of September 30, 2009, EnergySolutions had $21.4 million in cash
and cash equivalents, and $63.1 million of availability under its $75
million revolving line of credit. The decline in cash and cash
equivalents from the end of the prior quarter is primarily due to
cash utilized to pay down long-term debt by approximately $35.9
million during the third quarter of 2009.
Outlook for 2009
Given the year-to-date results, a revised expectation of no
additional large component project in 2009, and the continued slow
pace of projects funded by the American Recovery and Reinvestment
Act, EnergySolutions' revised 2009 EBITDA guidance is $145 million to
$150 million. Previous 2009 GAAP EPS guidance of $0.50 to $0.60 per
share and of net income before the non-cash impact of the
amortization of intangibles of $0.70 to $0.80 per share remains
unchanged.
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, but not limited to: (a) deteriorating economic conditions
globally, including the current financial crisis and decreased credit
availability for our customers, (b) the weakening of the pound
sterling and the related currency translation impact on our business
if the currency continues to weaken, (c) adverse public reaction that
could lead to increased regulation or limitations on our activities,
(d) uncertainty regarding the impact on our business of increased
regulatory scrutiny of the nuclear waste industry in the U.S. and
U.K., (e) decisions by our customers to reduce or halt their spending
on nuclear services, (f) decisions by our commercial customers to
store radioactive materials on-site rather than dispose of radioactive
materials at one of our facilities, (g) the adverse impact of current
or future financial conditions on the value of decommissioning trust
funds, and (h) continued competitive pressures in our markets.
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, 2008 and its most recent quarterly report on
Form 10-Q for the quarter ended June 30, 2009. The Company does not
undertake any obligation to release publicly any revision to any of
these forward-looking statements.
Conference Call Details
The EnergySolutions 2009 third quarter teleconference and webcast are
scheduled to begin at 10:00 a.m. EST, on Thursday, November 5, 2009.
Hosting the call will be Steve Creamer, Chairman and Chief Executive
Officer, and Philip Strawbridge, Chief Financial Officer.
To participate in the event by telephone, please dial (800) 573-4842
five to ten minutes prior to the start time (to allow time for
registration) and reference the conference passcode 61884244.
International callers should dial (617) 224-4327 and enter the same
passcode.
A replay of the call will be available on Thursday, November 5, at
1:00 p.m. EST through Thursday, November 12, 2009. To access the
replay, dial (888) 286-8010 and enter passcode 54942792.
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. An audio replay of the event will be
archived on EnergySolutions' web site for 90 days.
About EnergySolutions, Inc.
EnergySolutions is a global leader in nuclear waste management,
remediation, and disposal. The Company 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.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in thousands, except per share data)
For the Quarter For the Nine Months
Ended September 30, Ended September 30,
2009 2008 2009 2008
----------- ----------- ----------- -----------
Revenues $ 364,853 $ 419,453 $ 1,175,547 $ 1,381,551
Cost of revenues 320,910 362,962 1,034,678 1,189,557
----------- ----------- ----------- -----------
Gross profit 43,943 56,491 140,869 191,994
Selling, general and
administrative
expenses 25,631 30,705 86,730 88,992
----------- ----------- ----------- -----------
Income from
operations 18,312 25,786 54,139 103,002
Interest expense (6,368) (9,778) (21,789) (34,250)
Other income
(expenses), net 2,988 (72) 5,215 (1,891)
----------- ----------- ----------- -----------
Income before income
taxes and
noncontrolling
interests 14,932 15,936 37,565 66,861
Income tax expense (1,742) (4,827) (8,367) (23,164)
----------- ----------- ----------- -----------
Net income 13,190 11,109 29,198 43,697
Less: Net income
attributable to
noncontrolling
interests (334) (207) (885) (907)
----------- ----------- ----------- -----------
Net income
attributable to
EnergySolutions $ 12,856 $ 10,902 $ 28,313 $ 42,790
=========== =========== =========== ===========
Net income attributable
to EnergySolutions per
share:
Basic $ 0.15 $ 0.12 $ 0.32 $ 0.48
Diluted $ 0.15 $ 0.12 $ 0.32 $ 0.48
Number of shares used
in per share
calculations:
Basic 88,315,158 88,303,500 88,308,870 88,303,500
Diluted 88,557,831 88,312,311 88,390,569 88,310,791
Table 2
ENERGYSOLUTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
September 30, December 31,
ASSETS 2009 2008
------------- -------------
Current assets:
Cash and cash equivalents $ 21,392 $ 48,448
Accounts receivable, net of allowance for
doubtful accounts 275,239 213,037
Other current assets 120,301 129,772
------------- -------------
Total current assets 416,932 391,257
Property, plant & equipment, net 115,047 114,021
Goodwill 518,751 528,254
Other intangible assets,net 326,316 357,100
Other noncurrent assets 207,512 160,080
------------- -------------
Total assets $ 1,584,558 $ 1,550,712
============= =============
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 1,392 $ 2,954
Accounts payable 117,917 89,513
Accrued expenses and other current
liabilities 178,021 177,439
Other current liabilities 22,370 28,801
------------- -------------
Total current liabilities 319,700 298,707
Long-term debt, less current portion 517,719 563,803
Other noncurrent liabilities 266,782 219,383
------------- -------------
Total liabilities 1,104,201 1,081,893
------------- -------------
EnergySolutions stockholders' equity 479,210 467,786
Noncontrolling interests 1,147 1,033
------------- -------------
Total equity 480,357 468,819
------------- -------------
Total liabilities and equity $ 1,584,558 $ 1,550,712
============= =============
Table 3
ENERGYSOLUTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in thousands)
For the Nine Months Ended
September 30,
2009 2008
------------ ------------
Cash Provided by Operating Activities $ 55,833 $ 86,973
------------ ------------
Investing Activities
Purchases of property, plant and equipment (15,059) (9,731)
Purchases of intangible assets (558) (351)
Proceeds from sale of property, plant and
equipment 22 33
------------ ------------
Cash Used in Investing Activities (15,595) (10,049)
------------ ------------
Financing Activities
Repayments of long-term debt (47,646) (30,210)
Dividends to stockholders (6,623) (6,623)
Other items (12,243) (9,649)
------------ ------------
Cash Used in Financing Activities (66,512) (46,482)
------------ ------------
Effect of Exchange Rate on Cash (782) (6,908)
------------ ------------
Increase (Decrease) in Cash and Cash
Equivalents $ (27,056) $ 23,534
============ ============
Amortization of Intangible Assets $ 18,728 $ 21,308
============ ============
Depreciation $ 15,168 $ 13,380
============ ============
Table 4
ENERGYSOLUTIONS, INC.
RECONCILIATION OF NET INCOME ATTRIBUTABLE TO ENERGYSOLUTIONS TO
EBITDA AND TO NET INCOME ATTRIBUTABLE TO ENERGYSOLUTIONS BEFORE
THE IMPACT OF AMORTIZATION OF INTANGIBLE ASSETS (UNAUDITED)
(Dollars in thousands, except per share data)
For the Quarter For the Nine Months
Ended September 30, Ended September 30,
2009 2008 2009 2008
---------- ---------- ---------- ----------
Reconciliation of net
income attributable to
EnergySolutions to EBITDA:
Net income attributable
to EnergySolutions $ 12,856 $ 10,902 $ 28,313 $ 42,790
Interest expense 6,368 9,778 21,789 34,250
Interest rate swap loss
(gain) 514 10 1,714 2,223
Income tax expense 1,742 4,827 8,367 23,164
Depreciation expense 5,480 4,323 15,168 13,380
Amortization of
intangible assets 4,821 6,930 18,728 21,308
---------- ---------- ---------- ----------
EBITDA $ 31,781 $ 36,770 $ 94,079 $ 137,115
========== ========== ========== ==========
Reconciliation of net
income attributable to
EnergySolutions to
net income attributable to
EnergySolutions before
the impact of amortization
of intangible assets:
Net income attributable
to EnergySolutions $ 12,856 $ 10,902 $ 28,313 $ 42,790
Amortization of
intangible assets 4,821 6,930 18,728 21,308
Income tax expense
related to amortization
of intangible assets (100) (2,235) (4,272) (7,484)
---------- ---------- ---------- ----------
Net income attributable
to EnergySolutions
before the impact of
amortization of
intangible assets $ 17,577 $ 15,597 $ 42,769 $ 56,614
========== ========== ========== ==========
Net income attributable to
EnergySolutions before the
impact of amortization of
intangible assets per share:
Basic $ 0.20 $ 0.18 $ 0.48 $ 0.64
Diluted $ 0.20 $ 0.18 $ 0.48 $ 0.64
Number of shares used in
per share calculations:
Basic 88,315,158 88,303,500 88,308,870 88,303,500
Diluted 88,557,831 88,312,311 88,390,569 88,310,791
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
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 attributable to
EnergySolutions 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 attributable to EnergySolutions before
the impact of amortization of intangible assets as net income
attributable to EnergySolutions plus amortization expense of
intangible assets, net of the related income tax expense of these
items. Net income attributable to EnergySolutions before the impact
of amortization of intangible assets and net income attributable to
EnergySolutions 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 attributable to EnergySolutions before the impact of
amortization of intangible assets and net income attributable to
EnergySolutions before the impact of amortization of intangible
assets per share should not be considered as a substitute for net
income attributable to EnergySolutions or net income attributable to
EnergySolutions per share, as determined in accordance with GAAP. Net
income attributable to EnergySolutions before the impact of
amortization of intangible assets and net income attributable to
EnergySolutions 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 September 30,
2009 2008
---------- ----------
Revenues
Federal Services $ 77,007 $ 84,346
Commercial Services 21,254 19,175
LP&D 52,681 66,159
International 213,911 249,773
---------- ----------
Total Revenues $ 364,853 $ 419,453
========== ==========
Gross Profit and Margin
Federal Services $ 10,812 14.0% $ 13,269 15.7%
Commercial Services 6,073 28.6% 6,512 34.0%
LP&D 19,505 37.0% 28,175 42.6%
International Operations 7,553 3.5% 8,535 3.4%
---------- ----------
Total Gross Profit $ 43,943 12.0% $ 56,491 13.5%
========== ==========
Income from Operations and Margin
Federal Services $ 5,871 7.6% $ 10,851 12.9%
Commercial Services 4,699 22.1% 4,688 24.4%
LP&D 18,189 34.5% 25,519 38.6%
International 3,631 1.7% 3,330 1.3%
---------- ----------
Total Income from Operations before
corporate unallocated items 32,390 8.9% 44,388 10.6%
Corporate unallocated items (14,078) (18,602)
---------- ----------
Total Income from Operations $ 18,312 $ 25,786
========== ==========
For the Nine Months Ended September 30,
2009 2008
----------- -----------
Revenues
Federal Services $ 217,809 $ 202,057
Commercial Services 66,084 75,995
LP&D 160,299 183,318
International 731,355 920,181
----------- -----------
Total Revenues $ 1,175,547 $ 1,381,551
=========== ===========
Gross Profit and Margin
Federal Services $ 27,833 12.8% $ 30,491 15.1%
Commercial Services 16,663 25.2% 26,077 34.3%
LP&D 59,303 37.0% 73,846 40.3%
International Operations 37,070 5.1% 61,580 6.7%
----------- -----------
Total Gross Profit $ 140,869 12.0% $ 191,994 13.9%
=========== ===========
Income from Operations and Margin
Federal Services $ 16,136 7.4% $ 23,469 11.6%
Commercial Services 11,659 17.6% 20,562 27.1%
LP&D 53,592 33.4% 65,940 36.0%
International 23,272 3.2% 47,258 5.1%
----------- -----------
Total Income from Operations before
corporate unallocated items 104,659 8.9% 157,229 11.4%
Corporate unallocated items (50,520) (54,227)
----------- -----------
Total Income from Operations $ 54,139 $ 103,002
=========== ===========
For more information, please contact:
John Rasmussen
EnergySolutions, Inc.
(801) 649-2000
Email Contact
SOURCE: EnergySolutions
A service of YellowBrix, Inc.
