US ECOLOGY ANNOUNCES CAPITAL PRESERVATION INITIATIVES
March 31 2020 - 4:30PM
US Ecology, Inc. (NASDAQ-GS: ECOL) (“US Ecology” or “the Company”)
today announced several capital preservation initiatives in
response to current market volatility and economic uncertainty as a
consequence of the COVID-19 pandemic.
While it remains too early to quantify the
potential impact on the Company’s financial performance, in
response to these market circumstances, the Company is proactively
implementing cost control initiatives that are expected to generate
approximately $15 million to $20 million of annual savings. The
Company also intends to reduce its planned 2020 capital
expenditures by approximately 30%, which is expected to save up to
$30 million in cash.
Additionally, US Ecology’s Board of Directors
has approved a plan to suspend quarterly cash dividends at this
time, beginning with the second quarter of 2020 that was expected
to be declared in April 2020. This prudent suspension will preserve
approximately $6 million in cash per quarter until restored.
“We are in an unprecedented time in our history,
with limited clarity on the duration or impact of the COVID-19
virus to the industrial sector,” commented Jeff Feeler, Chairman
and CEO. “Our suite of environmental services remains essential as
determined by the United States Department of Homeland Security as
they are critical to protect human health and safety and the
environment. We are taking proactive and prudent actions to enhance
our already strong liquidity until there is more clarity. Cost
control actions, capital deferment and the dividend suspension will
generate significant cash savings, providing us flexibility to
preserve our talented workforce and take advantage of opportunities
as the market rebounds.”
“To date, our core environmental services
business has not been significantly impacted and is showing strong
volumes and service revenue. However, as industrial
facilities are forced to temporarily close and the labor force is
reduced, we could see a downturn in 2020. Our services-based
business is expected to remain stable and is showing growth as a
result of our small quantity generation services and our leading
emergency response business that has seen a significant uptick in
COVID-19 decontamination services. Our energy waste disposal
services business, however, will be impacted as energy companies
reduce capital expenditures by up to 50% as a result of
seventeen-year lows in oil prices.”
As a result of uncertainty surrounding the
magnitude and duration of the COVID-19 pandemic, the Company is
withdrawing its previously issued guidance for the year ended
December 31, 2020. The Company will provide an update during
its first quarter earnings call based on the information management
has available at that time.
The actions announced today are expected to
allow the Company to continue to generate positive cash flow even
at lower than expected adjusted EBITDA levels. When combined with
strong liquidity provided by cash on hand and available capacity on
the Company’s line of credit, these actions position the Company to
quickly capitalize on opportunities for growth and recovery as
business conditions begin to return to normal levels.
ABOUT US ECOLOGY, INC.US
Ecology, Inc. is a leading provider of environmental services to
commercial and government entities. The company addresses the
complex waste management and response needs of its customers
offering treatment, disposal and recycling of hazardous,
non-hazardous and radioactive waste, leading emergency response and
standby services, and a wide range of complementary field and
industrial services. US Ecology’s focus on safety, environmental
compliance, and best-in-class customer service enables us to
effectively meet the needs of US Ecology’s customers and to build
long lasting relationships. US Ecology has been protecting the
environment since 1952. For more information, visit
www.usecology.com.
This press release contains forward looking
statements relating to the Company’s future performance that are
based on the Company’s current expectations, forecasts, and
assumptions that involve risks and uncertainties. Forward looking
statements are only predictions and are not guarantees of
performance. These statements are based on management’s beliefs and
assumptions, which in turn are based on currently available
information. Forward looking statements also involve known and
unknown risks and uncertainties, which could cause actual results
to differ materially from those contained in any forward-looking
statement. Many of these factors, including the impact of the
COVID-19 pandemic on the Company’s business, are beyond the
Company’s ability to control or predict. Except as required by
applicable law, including the securities laws of the United States
and the rules and regulations of the U.S. Securities and Exchange
Commission (the “SEC”), the Company is under no obligation to
publicly update or revise any forward looking statements, whether
as a result of new information, future events or otherwise. You
should not place undue reliance on the Company’s forward looking
statements. Although the Company believes that the expectations
reflected in the forward-looking statements are reasonable, the
Company cannot guarantee future results or performance.
Contact: Alison Ziegler, Darrow Associates (201)
220-2678aziegler@darrowir.com www.usecology.com
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