DRTK Duratek (MM)

Duratek, Inc. (NASDAQ:DRTK) today announced it achieved net income of $18.4 million or $1.21 per diluted share for the year ended December 31, 2005 as compared to $21.0 million or $1.42 per diluted share in 2004. Revenues for 2005 of $281.2 million were 2% lower than 2004 revenues of $286.2 million. The revenue decrease was primarily due to lower Commercial Services revenues, as there was insufficient new project work to replace projects that were completed during 2004. Net income decreased primarily due to lower revenues achieved by the Commercial Services business and losses incurred, primarily in the third quarter, on two Federal Services contracts. In the fourth quarter of 2005, the Company achieved net income of $5.4 million, or $.36 per diluted share as compared to net income of $3.0 million, or $.20 per diluted share for the comparable period in 2004. Revenues were $68.5 million for the three months ending December 31, 2005 and were 4% lower than the $71.1 million for the same period in 2004. The increase in net income was primarily due to improved performance by the Commercial Processing and Disposal business due to higher volumes of higher margin materials processed and a lowering of the facility decommissioning estimate during the quarter. The revenue decrease for the quarter was due to lower revenues in the Federal Services business primarily as a result of a decrease in work scope on several existing contracts. Robert E. Prince, President and CEO said, "We are pleased with our strong finish for the year. In the fourth quarter our margins, profits, and cash position all showed solid improvements. In addition to delivering on our existing business base, we continue to focus our energies heavily towards growth opportunities." Robert F. Shawver, Executive Vice President and CFO said, "The Company significantly improved its cash position during the fourth quarter. We finished the year with $18 million in cash even after making a voluntary debt prepayment of $15 million in December. We continue to make consistent progress each year generating cash and prepaying our term debt." A conference call will be held today at 10:00 a.m. Eastern Time. Investors can listen to the conference call by logging into www.duratekinc.com or by calling 1-800-857-4830, passcode Duratek. In addition to the webcast and teleconference, the Company will be placing a presentation of the data on its website under the investor relations section. We encourage investors to listen to the call in addition to viewing the presentation. A replay of the call will be available at approximately 12:00 noon today through March 1, 2006 at 10:00 p.m. by dialing 1-866-457-5505. The webcast will be archived on the Duratek website for at least 30 days. Consolidated balance sheet, statement of operations, and summary statement of cash flows are attached. About Duratek, Inc. Duratek provides safe, secure radioactive materials disposition. On February 7, 2006, Duratek announced it had entered into a merger agreement with EnergySolutions LLC, formerly known as Envirocare of Utah LLC. Important Additional Information and Where to Find It Duratek will file with the Securities and Exchange Commission a proxy statement and other documents regarding the proposed business combination referred to in the foregoing information. Investors are urged to read the proxy statement when it becomes available because it will contain important information. A definitive proxy statement will be sent to Duratek's stockholders seeking their approval of the transaction. Investors may obtain a free copy of the proxy statement and other documents filed by Duratek with the Commission at the Commission's website at www.sec.gov, or by directing a request to: Diane Brown, Corporate Secretary, Duratek Inc., 10100 Old Columbia Road, Columbia, Maryland 21046. Duratek, its directors, and its executive officers may be considered participants in the solicitation of proxies in connection with the proposed transaction. Information about the directors and executive officers of Duratek and their ownership of Duratek stock is set forth in the proxy statement for Duratek's 2005 annual meeting of stockholders. Investors may obtain additional information regarding the interests of such participants by reading the proxy statement when it becomes available. Certain statements contained in this press release may constitute "forward-looking statements" within the meaning of Section 21E(i)(1) of the Securities Exchange Act of 1934. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Duratek's actual results to be materially different from any future results expressed or implied by these statements. Such factors include the following: the Company's ability to manage its commercial waste processing operations, the timing and award of contracts by the U.S. Department of Energy for the cleanup of waste sites administered by it; the acceptance and implementation of the Company's waste treatment technologies in the government and commercial sectors; and other large technical support services projects; the Company's ability to successfully add revenues from new contracts; and the timing of completing existing contracts. Additionally, risks and uncertainties about the pending merger of the Company with EnergySolutions, LLC include the satisfaction of the conditions to closing, including receipt of stockholder and regulatory approval; general industry and market conditions; the ability of either company to achieve future business objectives; and the risk that the perceived advantages of the transaction, if consummated, may not be achieved. All forward-looking statements are also expressly qualified in their entirety by the cautionary statements included in the Company's SEC filings, including its quarterly reports on Form 10-Q and its annual report on Form 10-K. -0- *T DURATEK, INC. AND SUBSIDIARIES Consolidated Balance Sheets December 31, 2005 and 2004 (in thousands of dollars, except share amounts) 2005 2004 ----------- ----------- Assets Current assets: Cash and cash equivalents $ 18,440 $ 23,296 Accounts receivable, net of allowance for doubtful accounts of $18 in 2005 and $158 in 2004 36,247 30,997 Cost and estimated earnings in excess of billings on uncompleted contracts 14,417 16,715 Prepaid expenses and other current assets 5,694 13,708 ----------- ----------- Total current assets 74,798 84,716 Retainage 1,039 1,257 Property, plant and equipment, net 61,802 66,151 Goodwill 72,129 72,129 Other intangible assets 2,708 3,747 Decontamination and decommissioning trust fund 19,295 19,050 Other assets 32,143 21,487 ----------- ----------- Total assets $ 263,914 $ 268,537 =========== =========== Liabilities and Stockholders' Equity Current liabilities: Current portion of long-term debt $ 708 $ 858 Accounts payable 11,894 15,643 Due to the State of South Carolina 6,911 6,073 Accrued expenses and other current liabilities 21,783 24,646 Unearned revenues 13,359 14,694 Waste processing and disposal liabilities 4,300 6,980 ----------- ----------- Total current liabilities 58,955 68,894 Long-term debt, less current portion 68,648 84,142 Facility and equipment decontamination and decommissioning liabilities 38,927 40,419 Other noncurrent liabilities 7,525 6,756 ----------- ----------- Total liabilities 174,055 200,211 ----------- ----------- Stockholders' equity: Preferred stock - $0.01 par value; authorized 4,740,000 shares; none issued - - Series B junior participating preferred stock, $0.01 par value; 100,000 shares authorized; none issued - - Common stock - $0.01 par value; authorized 35,000,000 shares; issued 16,470,624 shares in 2005 and 16,236,781 shares in 2004 165 162 Capital in excess of par value 89,891 86,784 Deferred compensation employee stock trust 1,323 1,323 Retained earnings (accumulated deficit) 9,380 (9,043) Treasury stock at cost, 1,771,306 shares in 2005 and 2004 (10,900) (10,900) ----------- ----------- Total stockholders' equity 89,859 68,326 ----------- ----------- Total liabilities and stockholders' equity $ 263,914 $ 268,537 =========== =========== DURATEK, INC. AND SUBSIDIARIES Consolidated Statements of Operations Years ended December 31, 2005, 2004 and 2003 (in thousands of dollars, except per share amounts) 2005 2004 2003 ----------- ----------- ----------- Revenues $ 281,212 $ 286,213 $ 285,901 Cost of revenues 211,299 211,315 217,493 ----------- ----------- ----------- Gross profit 69,913 74,898 68,408 Selling, general and administrative expenses 34,516 34,306 33,462 ----------- ----------- ----------- Income from operations 35,397 40,592 34,946 Interest expense (6,539) (6,970) (6,903) Other income, net 31 398 76 ----------- ----------- ----------- Income before income taxes, equity in income of joint ventures, and cumulative effect of a change in accounting principle 28,889 34,020 28,119 Income taxes 10,651 13,098 11,671 ----------- ----------- ----------- Income before equity in income of joint ventures and cumulative effect of a change in accounting principle 18,238 20,922 16,448 Equity in income of joint ventures 185 124 202 ----------- ----------- ----------- Income before cumulative effect of a change in accounting principle 18,423 21,046 16,650 Cumulative effect of a change in accounting principle, net of taxes - - (2,414) ----------- ----------- ----------- Net income 18,423 21,046 14,236 Preferred stock repurchase premium, dividends and charges for accretion - (63) (36,154) ----------- ----------- ----------- Net income (loss) attributable to common stockholders $ 18,423 $ 20,983 $ (21,918) =========== =========== =========== Income (loss) per share: Basic: Before cumulative effect of a change in accounting principle $ 1.25 $ 1.48 $ (1.44) Cumulative effect of a change in accounting principle - - (0.18) ----------- ----------- ----------- $ 1.25 $ 1.48 $ (1.62) =========== =========== =========== Diluted: Before cumulative effect of a change in accounting principle $ 1.21 $ 1.42 $ (1.44) Cumulative effect of a change in accounting principle - - (0.18) ----------- ----------- ----------- $ 1.21 $ 1.42 $ (1.62) =========== =========== =========== DURATEK, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows Years ended December 31, 2005 and 2004 (in thousands of dollars) 2005 2004 ----------- ----------- Cash flows from operating activities: Net income $ 18,423 $ 21,046 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 9,847 10,639 Other non-cash charges 1,200 3,165 Changes in operating assets and liabilities (14,818) (14,323) ----------- ----------- Net cash provided by operating activities 14,652 20,527 ----------- ----------- Net cash used in investing activities (4,749) (6,357) ----------- ----------- Net cash used in financing activities (14,759) (26,048) ----------- ----------- Net decrease in cash and cash equivalents (4,856) (11,878) Cash and cash equivalents, beginning of year 23,296 35,174 ----------- ----------- Cash and cash equivalents, end of year $ 18,440 $ 23,296 =========== =========== *T