Well, fuck me with a garden weasel.
American Eco Reports Second Quarter Results
HOUSTON--(BUSINESS WIRE)--July 6, 1998--American Eco Corporation (NASDAQ
NMS:ECGOF, TSE:ECX) announced today US dollar results for the fiscal second quarter and six
months ended May 31, 1998.
For the second quarter, revenue rose to $59,461,000 from $56,362,000 in the second quarter of
fiscal 1997. The Company had a net, after-tax loss of $1,630,000, after a non-recurring, non-cash
charge of $2,400,000 for the early extinguishment of debt, versus net income of $4,438,000 in the
same period a year earlier. During the second quarter, American Eco used proceeds from the sale
of $120 million of Senior Notes for prepayment of $71.2 million of bank debt. Basic per-share
results for the second quarter amounted to a loss of ($0.08) compared to net income of $0.30 per
share in the prior year.
For the first six months of fiscal 1998, revenue rose to $117,896,000 from $101,599,000 in the first
half a year earlier. Net income declined to $530,000, or $0.03 basic earnings per share, from
$7,982,000, or $0.55 basic earnings per share. The 1997 numbers for the quarter and first half did
not include a provision for taxes as the Company was using a tax-loss carryforward.
Commenting on the second quarter results, Michael E. McGinnis, CEO of American Eco, said
"Revenue for the second quarter did not meet our projections for the period. This shortfall,
particularly in our higher margin specialty fabrication services business, severely impacted bottom
line results. We expect, the specialty fabrication business to rebound in the second half of the year
as work has already begun on schedule for two joint venture contracts in Canada with subsidiaries
of Dominion Bridge Corporation. These contracts, with a total value of $103 million to American
Eco, are expect to be booked over the next 12 to 18 months." American Eco's total current backlog
for the coming 12-to-18 months is a record $345.5 million, up from backlog of $245 million
reported in March.
Revenue increases in the second quarter were generated from lower margin maintenance and
engineering businesses. "The continued deferral of work from energy customers and a loss of
contract awards as our units attempted to gain higher margins on maintenance bids were additional
factors contributing to the revenue shortfall in the second quarter of 1998," Mr. McGinnis
continued.
"Looking ahead, we are committed to returning American Eco to profitable growth. We are
currently undergoing a division-by-division review of all our operations and overhead expenses. A
main strategic priority is to concentrate on higher margin specialty fabrication services. In addition,
we will reduce the amount of time spent assessing acquisitions until this review is completed and
the findings are in the process of being implemented," Mr. McGinnis said.
Because of the operating problems experienced this quarter and the need to review all division's
profitability, American Eco is unable to forecast earnings for the remainder of the year. American
Eco is a leading North American provider of single-source industrial support and specialty
fabrication services in the energy, pulp & paper, and power generating industries.
This release includes forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although the
company believes that its expectations are based on reasonable assumptions, it can give no
assurance that such expectations will be achieved. important factors that could cause actual results
to differ materially from those in the forward looking statements made herein include the ability of
the company to continue to expand through acquisitions, the availability of capital to fund the
company's expansion program, the ability of the company to manage its expansion effectively,
economic conditions that could affect demand for the company's services, the ability of the
company to complete projects profitably and severe weather conditions that could delay projects.
Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such
forward-looking statements, which speak only as of the date on which such statements are made.
The company does not undertake to update any forward-looking statement that may be made
from time to time by or on behalf of the company.
(Tables Follow)
American Eco Corporation
Summary of Operations
(Unaudited)
(in thousands of US dollars)
Three Months Ended Six Months Ended
May 31, May 31,
1998 1997 1998 1997
Revenue $ 59,461 $ 56,362 $ 117,896 $ 101,599
Direct costs
of revenue $ 49,025 $ 41,407 $ 94,477 $ 78,265
SG&A $ 8,443 $ 8,113 $ 16,312 $ 11,626
Interest expense, net $ 910 $ 1,448 $ 1,670 $ 1,864
Loss on early
extinguishment of debt $ 2,400 $ - $ 2,400 $ -
Depreciation and
amortization $ 1,190 $ 956 $ 2,222 $ 1,862
Provision for
(recovery of)
income taxes $ (877) $ - $ 285 $ -
Net Income (loss) $ (1,630) $ 4,438 $ 530 $ 7,982
Earnings (loss)
per share - basic $ (0.08) $ 0.30 $ 0.03 $ 0.55
Weighted Average
Number of Shares
Outstanding - basic 20,604,111 14,816,802 20,295,522 14,624,864
American Eco Corporation
Summary Balance Sheet
(Unaudited)
(in thousands of US dollars)
May 31, November 30,
1998 1997
Assets
Current Assets
Cash $ 37,618 $ 1,259
Accounts receivable 53,750 50,349
Current portion of notes receivable 16,102 17,757
Costs and estimated earnings in
excess of billings 20,922 13,145
Inventory 19,526 18,079
Deferred income tax 1,338 1,133
Prepaid expenses and other current
assets 6,911 6,920
Total Current Assets 156,167 108,642
Property, plant & equipment 44,403 33,023
Other Assets
Goodwill 31,357 30,484
Notes receivable 27,312 28,578
Investments 15,444 9,142
Other assets 5,018 1,917
Total Assets $ 279,701 $ 211,786
Liabilities & Shareholders' Equity
Current liabilities
Accounts payable and accrued
liabilities $ 31,441 $ 28,400
Notes payable - 8,904
Current portion of long-term debt 594 8,081
Billings in excess of costs and
estimated earnings 3,023 3,350
Total Current Liabilities 35,058 48,735
Long-Term Liabilities
Long-term debt 120,779 51,722
Deferred income tax liability 3,196 3,144
Other liabilities 814 1,086
Total Long-Term Liabilities 124,789 55,952
Shareholders' Equity 119,854 107,099
Total Liabilities &
Shareholders' Equity $ 279,701 $ 211,786
CONTACT: American Eco
Bruce Tobecksen
888/774-3246
www.americaneco.com
or
Cindy Jackson
888/774-3246
or
VMW Inc.
Sylvia Dresner
212/605-3140
VMWeiner@aol.com |
