SALT LAKE CITY, UT--(Marketwire - May 12, 2008) - 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 first quarter ended
March 31, 2008.
First Quarter 2008 Results
Revenues for the quarter ended March 31, 2008 were $502 million, compared
to $114 million for the same quarter in 2007. Gross profit for the first
quarter of 2008 was $73.0 million, compared to gross profit of $30.8
million for the quarter ended March 31, 2007. Selling, general and
administrative expenses for the current quarter were $28.6 million,
compared to $28.3 million in the same quarter last year.
The Company generated cash flow from operations of $25.7 million during the
quarter, enabling it to repay $20 million of long-term debt. This
repayment, together with repayments of debt from the proceeds of its
initial public offering in November 2007, has contributed to the reduction
of the Company's interest expense, which was $11.7 million for the quarter
ended March 31, 2008, compared to $15.4 million in the same period last
year.
Net income for the quarter ended March 31, 2008 was $19.3 million, or $0.22
per share, compared to a loss of $10.3 million for the same quarter in
2007. EBITDA for the quarter was $54.0 million compared to EBITDA of $12.0
million for the prior year, and net income before the non-cash impact of
amortization of intangible assets for the quarter ended March 31, 2008 was
$23.8 million, or $0.27 per share, based on 88.3 million fully-diluted
shares outstanding. The Company defines EBITDA as earnings before interest
expense, income taxes, depreciation and amortization. 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. The reconciliation of EBITDA, and net income before the
impact of amortization of intangible assets to the most directly comparable
GAAP measure is set forth in table 4 in the accompanying tables.
"This has been an excellent start to 2008 for EnergySolutions," said R
Steve Creamer, the Company's Chief Executive Officer. "All of our business
segments performed well during the quarter. In particular we benefited
from early substantial completion of two of our Commercial Services
projects and the expected first quarter margin increase from our
international operations. We see this strong first quarter largely as a
shift in timing of some of our commercial business rather than any change
from our original full year expectations."
Business Segments - First 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 first quarter of 2008 were $44.6 million,
up from revenues of $34.9 million in the same quarter in the prior year.
Segment income from operations for the first quarter of 2008 was $6.3
million, compared to $6.2 million in the same quarter last year. The
operating margin for the first quarter of 2008 was 14%, compared to 18% in
the same quarter 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 in the first quarter this year,
adding approximately $13 million to revenues at an approximate 3% operating
margin. Partially offsetting this lower margin business was lower selling,
general and administrative expenses due to lower labor expenses.
Commercial Services revenues for the first quarter of 2008 were $30.6
million, up from $25.3 million in the same quarter in the prior year.
Segment income from operations for the first quarter of 2008 was $9.6
million, compared to $0.1 million in the same quarter last year. The
operating margin for the first quarter of 2008 was 32%, compared to 0.2% in
the same quarter last year. The improvement of the segment's performance
was primarily due to the early substantial completion of two large
high-margin projects, and lower due diligence costs on licensed stewardship
opportunities when compared to the same quarter last year.
Logistics, Processing and Disposal revenues for the first quarter of 2008
were $54.1 million, up from $53.9 million in the same quarter in the prior
year. Segment income from operations for the first quarter of 2008 was
$16.3 million, up from $15.1 million in the same quarter last year. The
operating margin for the first quarter of 2008 was 30%, compared to 28% in
same quarter last year. The increase in this segment's operating margin
was primarily the result of decreased equipment maintenance, demurrage and
labor expenses.
International revenues for the first quarter of 2008 were $372.5 million.
Last year the Company did not report its international operations, which
were immaterial, as a separate segment. In June 2007, the Company acquired
RSMC, a reactor operator and manager of multiple nuclear sites in the
United Kingdom, which significantly expanded the Company's international
capabilities. As a result of its acquisition of RSMC, the Company began to
report its international operations in a separate segment in the second
quarter of 2007. Segment income from operations for the first quarter of
2008 was $30.1 million, and operating margin for the first quarter of 2008
was 8%. The operating margin is typically higher in the first quarter of
the year than the Company expects it to be in other quarters due to the
recognition of efficiency fees under its contract with the United Kingdom's
Nuclear Decommissioning Authority.
Outlook for 2008
The Company affirms its full year guidance of revenues in the range of $1.8
billion to $1.9 billion and earnings per share in the range of $0.69 to
$0.74. Earnings per share before the impact of non-cash amortization of
intangible assets, which is calculated as earnings per share plus the per
share impact of amortization expense of intangible assets, net of related
income tax expense, is expected to be in the range of $0.89 to $0.94. When
calculating per share amounts, in its guidance, 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. 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, primarily relating to the one-time purchases of
equipment for the Company's Atlas mill tailings contract as well as the
general maintenance of the Company's facilities.
Based on the expected timing of key contracts, including the license
transfer of the Zion license stewardship contract, the large U.S. DOE
contract awards and the NRC rulemaking change for major components, the
Company continues to expect revenues and earnings for 2008 to be weighted
toward the second half of the year.
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 the Company's
filings with the Securities and Exchange Commission, including its annual
report on Form 10-K for the fiscal year ended December 31, 2007. 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 10:00 a.m. EDT on Tuesday,
May 13, 2008, to discuss financial results for the first quarter ended
March 31, 2008.
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 (888) 713-4216 five
to 10 minutes prior to the start time (to allow time for registration) and
reference the conference passcode 74566781. International callers should
dial (617) 213-4868 and use the same passcode.
A replay of the call will be available on Tuesday, May 13, 2008, at 12:00
p.m. EDT through Tuesday, May 20, 2008, at 2:00 pm EDT. To access the
replay, dial (888) 286-8010 and enter passcode 17911522. 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.
Please use the following link to pre-register for this conference call.
Callers who pre-register will be given a unique PIN to gain immediate
access to the call and bypass the live operator. You should pre-register
prior to the conference call. To pre-register please go to:
https://www.theconferencingservice.com/prereg/key.process?key=P3HGDHLLU
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
Ended March 31,
2008 2007
---------- ----------
Revenues $ 501,753 $ 114,151
Cost of revenues 428,770 83,357
---------- ----------
Gross profit 72,983 30,794
Selling, general and administrative expenses 28,590 28,328
---------- ----------
Income from operations 44,393 2,466
Interest expense (11,660) (15,370)
Other income (expenses), net (2,061) 148
---------- ----------
Income (loss) before minority interests and
income taxes 30,672 (12,756)
Minority interests (195) -
Income tax (expense) benefit (11,184) 2,412
---------- ----------
Net income (loss) $ 19,293 $ (10,344)
========== ==========
Net income per share:
Basic $ 0.22
Diluted $ 0.22
Number of shares used in per share calculations:
Basic 88,303,500
Diluted 88,310,022
Table 2
ENERGYSOLUTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
March 31, December 31,
2008 2007
----------- -----------
Assets
Current assets:
Cash and cash equivalents $ 38,086 $ 36,366
Accounts receivable, net of allowance for
doubtful accounts 369,447 366,083
Other current assets 135,452 103,233
----------- -----------
Total current assets 542,985 505,682
Property, plant and equipment, net 107,230 110,688
Goodwill 526,077 526,040
Other intangible assets, net 377,474 383,812
Other noncurrent assets 111,338 98,728
----------- -----------
Total assets $ 1,665,104 $ 1,624,950
=========== ===========
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $ 1,509 $ 1,557
Accounts payable 138,009 155,663
Accrued expenses and other current
liabilities 271,657 233,588
Other current liabilities 52,184 45,135
----------- -----------
Total current liabilities 463,359 435,943
Long-term debt, less current portion 585,458 605,410
Other noncurrent liabilities 192,678 178,206
----------- -----------
Total liabilities 1,241,495 1,219,559
----------- -----------
Minority interests 604 68
Commitments and contingencies
Stockholders' equity 423,005 405,323
----------- -----------
Total liabilities and stockholders' equity $ 1,665,104 $ 1,624,950
=========== ===========
Table 3
ENERGYSOLUTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in thousands)
For the Quarter
Ended March 31,
2008 2007
---------- ----------
Cash Provided by Operating Activities $ 25,664 $ 32,462
---------- ----------
Investing Activities
Purchases of businesses, net of cash acquired - (15,110)
Purchases of property, plant and equipment (1,280) (1,743)
---------- ----------
Cash Used in Investing Activities (1,280) (16,853)
---------- ----------
Financing Activities
Net borrowings (repayments) of long-term debt (20,000) (12,000)
Dividends/distributions to shareholders (2,208) (2,633)
Other items (527) (2,836)
---------- ----------
Cash Provided by (Used in) Financing Activities (22,735) (17,469)
---------- ----------
Effect of Exchange Rate on Cash 71 66
---------- ----------
Increase (Decrease) in Cash and Cash Equivalents $ 1,720 $ (1,794)
========== ==========
Amortization of Intangible Assets $ 7,197 $ 4,803
========== ==========
Depreciation $ 4,621 $ 4,571
========== ==========
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
Ended March 31,
2008 2007
---------- ----------
Reconciliation of net income (loss) to EBITDA:
Net income (loss) $ 19,293 $ (10,344)
Interest expense 11,660 15,370
Income tax expense (benefit) 11,184 (2,412)
Depreciation expense 4,621 4,571
Amortization of intangible assets 7,197 4,803
---------- ----------
EBITDA $ 53,955 $ 11,988
========== ==========
Reconciliation of net income (loss) to net income
(loss) before the impact of amortization of
intangible assets:
Net income (loss) $ 19,293 $ (10,344)
Amortization of intangible assets 7,197 4,803
Income tax expense related to amortization of
intangible assets (2,641) (908)
---------- ----------
Net income (loss) before the impact of
amortization of intangible assets $ 23,849 $ (6,449)
========== ==========
Net income before the impact of amortization of
intangible assets per share:
Basic $ 0.27
Diluted $ 0.27
Number of shares used in per share calculations:
Basic 88,303,500
Diluted 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 March 31,
2008 2007
--------- ---------
Revenues
Federal Services $ 44,587 $ 34,927
Commercial Services 30,595 25,341
LP&D 54,115 53,883
International 372,456 -
--------- ---------
Total Revenues $ 501,753 $ 114,151
========= =========
Gross Profit and Margin
Federal Services $ 8,116 18.2% $ 8,672 24.8%
Commercial Services 11,580 37.8% 4,821 19.0%
LP&D 19,028 35.2% 17,301 32.1%
International Operations 34,259 9.2% -
--------- ---------
Total Gross Profit $ 72,983 14.5% $ 30,794 27.0%
========= =========
Income from Operations and Margin
Federal Services $ 6,348 14.2% $ 6,220 17.8%
Commercial Services 9,644 31.5% 61 0.2%
LP&D 16,324 30.2% 15,104 28.0%
International 30,105 8.1% -
--------- ---------
Total Income from Operations before
corporate unallocated items 62,421 12.4% 21,385 18.7%
Corporate unallocated items (18,028) (18,919)
--------- ---------
Total Income from Operations $ 44,393 $ 2,466
========= =========
Contact Information: For more information, please contact:
Tim Barney
(801) 649-2233