American Ecology Announces Second Quarter 2007 Financial Results

American Ecology Corporation (NASDAQ: ECOL) today reported record operating and financial performance for its second quarter and six months ended June 30, 2007.

Second Quarter Results

Net income was $5.1 million, or $0.28 per diluted share, for the second quarter of 2007. This exceeded net income of $4.9 million, or $0.27 per diluted share, reported in the second quarter of 2006. Operating income for the second quarter of 2007 increased 10% to a record $8.2 million, compared to the $7.5 million earned in the second quarter of 2006. All four operating facilities were profitable for the quarter.

Revenue for the second quarter of 2007 increased 38% to a record $41.3 million, up from $29.9 million in the same quarter last year. The growth includes increased revenue for rail shipments from bundled transportation and disposal projects that included the Honeywell International Jersey City project, the Molycorp Pennsylvania project and others. Additionally, the revenue growth in the second quarter of 2007 reflects increased treatment and disposal revenue at our three hazardous waste facilities and a steady flow of low activity radioactive material under our Idaho facility's multi-year contract with the US Army Corps of Engineers. Revenues decreased at our low-level radioactive waste site in Richland, Washington from the second quarter of 2006 consistent with completion of a large, non rate-regulated project in August 2006.

Waste volumes disposed at our Idaho, Nevada and Texas waste facilities increased 29% in the second quarter of 2007 over the second quarter of 2006 to a record 275,000 tons. The resulting operating leverage drove quarterly gross profit to $11.7 million in the second quarter of 2007, an 11% increase over gross profit of $10.5 million posted in the second quarter of 2006.

Direct operating costs for the quarter increased to $29.6 million, up from $19.4 million in the second quarter of last year. The increase reflects higher rail and truck transportation expenses and higher variable costs for increased waste treatment additives, disposal cell space amortization and equipment maintenance.

Selling, general and administrative ("SG&A") expenses for the second quarter of 2007 were $3.5 million, or 8% of revenue, as compared to $3.1 million, or 10% of revenue in the same quarter last year. The $413,000 increase in SG&A was due primarily to increased business activity, higher stock-based compensation expense, sales commissions, incentive compensation and administrative costs in support of the record waste volumes received.

At June 30, 2007, we had $8.0 million of cash and short-term investments and a $15.0 million line of credit. $11.0 million of this line of credit was available for future borrowings and $4.0 million was issued as a standby letter of credit utilized as collateral for financial assurance policies for future closure and post-closure obligations.

Year-To-Date Results

Net income for the first six months of 2007 was $10.0 million, or $0.55 per diluted share, exceeding net income of $9.1 million, or $0.50 per diluted share, in the first six months of 2006. Operating income for the first six months of 2007 was $16.1 million, compared to operating income of $13.7 million in the first half of 2006. All four operating facilities were profitable for the first six months of 2007.

Revenue for the first six months of 2007 was $80.2 million, an increase of 56% from $51.4 million in the first half of 2006. This growth reflects increased revenue from the Honeywell International Jersey City project and other bundled transportation and disposal contracts, as well as higher treatment and disposal revenue at our Idaho, Nevada, and Texas operations. Our Beatty, Nevada facility delivered significant operating income growth over the first six months of 2006 on the strength of two clean-up projects that were substantially completed in the first quarter of 2007. Strong first half growth in revenue in 2007 more than replaced a large non rate-regulated project at our Richland, Washington facility that was completed in August 2006.

Record disposal volumes increased gross profit to $23.2 million in the first half of 2007, up 14% from the $20.2 million earned in the first half of 2006. Direct operating costs for the first half of 2007 were $57.1 million, up from $31.2 million in the first six months last year. This reflects higher rail transportation expenses and higher variable costs for waste treatment additives, cell space amortization and equipment maintenance.

SG&A expenses for the first six months of 2007 were $7.1 million, or 9% of revenue, as compared to $6.5 million, or 13% of revenue for the same period last year.

2007 Earnings Guidance

"Heavy waste volume throughput and a favorable mix of higher margin niche services combined to produce another record quarter for revenue and operating income," said President and Chief Executive Officer Stephen Romano. "Based on our strong financial performance in the first half of 2007, we have narrowed our full year 2007 earnings guidance range to $0.98-$1.02 per share and are on pace to hit the upper end of this range," Romano added.