DRTK Duratek (MM)

Duratek, Inc. (NASDAQ:DRTK) today announced revenues of $73.4 million for the quarter ended March 31, 2006. This was an increase of $2.8 million, or 4%, over the $70.6 million achieved in the comparable period in 2005. The additional revenues were primarily attributable to increased waste processed for the Big Rock Point nuclear power plant decommissioning project by the Commercial Processing and Disposal business segment. This increase was partially offset by lower revenues achieved by the Federal Services and Commercial Services segments due to decreases in work performed on certain Department of Energy site cleanup contracts and commercial decommissioning projects. Net income was $3.2 million, or $0.21 per diluted share, for the quarter ended March 31, 2006, as compared to net income of $4.9 million, or $0.32 per diluted share, for the same period in 2005. The decrease in net income was due primarily to higher selling, general, and administrative expenses of $2.3 million relating to costs associated with the transaction with EnergySolutions, LLC, announced on February 7, 2006, and to $0.3 million to expense stock options as a result of adopting SFAS 123(R) Share-Based Payment in the first quarter of 2006. Robert E. Prince, President and CEO, said, "Although the core business continued to provide performance at a level comparable to last year, our near term challenge is adding sufficient new business to replace the revenue from major contracts ending in 2006 and provide incremental growth. Over the longer term, we need to expand our service offerings and customer base in order to grow the business. Certainly, we believe that the combination with EnergySolutions, LLC, provides for better growth prospects then we can achieve as a free-standing company." Robert F. Shawver, Executive Vice President and CFO added, "Both the Fernald contract and the Big Rock Point decommissioning contract are scheduled to be completed later in 2006. These two projects generated a combined $21.0 million in high margin revenues in 2005 and are likely to contribute even more in 2006. Replacing these contracts is an important challenge for the near term." The unaudited consolidated balance sheets, consolidated statements of operations, and condensed consolidated statements of cash flows are attached. 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 1-800-857-7001, 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 "presentation" 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 1:00 p.m. Eastern Time today through May 27, 2006 at 5:00 p.m. Eastern Time by dialing 1-800-871-1327. The webcast will be archived on the Duratek website for at least 30 days. About Duratek Duratek provides safe, secure radioactive materials disposition and nuclear facility operations for commercial and government customers. Important Additional Information and Where to Find It Duratek has filed 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 because it contains important information. A definitive proxy statement has been 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. Safe Harbor This press release contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations, forecasts and assumptions that are subject to risks and uncertainties, which could cause actual outcomes and results to differ materially from these statements. All forward-looking statements are expressly qualified in their entirety by the cautionary statements detailed from time to time in Duratek's filings with the Commission, including its quarterly reports on Form 10-Q and its annual report on Form 10-K. The information set forth herein speaks only as of the date hereof, and Duratek disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date hereof. -0- *T DURATEK, INC. AND SUBSIDIARIES Consolidated Balance Sheets (in thousands of dollars, except share amounts) March 31, December 31, 2006 2005 ------------ ------------ Assets (unaudited) (1) Current assets: Cash and cash equivalents $ 8,995 $ 18,440 Accounts receivable, net of allowance for doubtful accounts of $19 in 2006 and $18 in 2005 38,391 36,247 Cost and estimated earnings in excess of billings on uncompleted contracts 34,742 14,417 Prepaid expenses and other current assets 7,439 5,694 ------------ ------------ Total current assets 89,567 74,798 Retainage 76 1,039 Property, plant and equipment, net 60,597 61,802 Goodwill 72,129 72,129 Other intangible assets 2,464 2,708 Decontamination and decommissioning trust fund 19,329 19,295 Other assets 13,048 32,143 ------------ ------------ Total assets $ 257,210 $ 263,914 ============ ============ Liabilities and Stockholders' Equity Current liabilities: Current portion of long-term debt $ 658 $ 708 Accounts payable 9,519 11,894 Due to State of South Carolina 8,264 6,911 Accrued expenses and other current liabilities 19,106 21,783 Unearned revenues 10,382 13,359 Waste processing and disposal liabilities 5,306 4,300 ------------ ------------ Total current liabilities 53,235 58,955 Long-term debt, less current portion 63,698 68,648 Facility and equipment decontamination and decommissioning liabilities 39,166 38,927 Other noncurrent liabilities 7,464 7,525 ------------ ------------ Total liabilities 163,563 174,055 ------------ ------------ 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 16,499,071 shares at March 31, 2006 and 16,470,624 shares at December 31, 2005 165 165 Capital in excess of par value 90,447 89,891 Employee stock trust 1,323 1,323 Retained earnings 12,612 9,380 Treasury stock at cost, 1,770,306 shares at March 31, 2006 and December 31, 2005 (10,900) (10,900) ------------ ------------ Total stockholders' equity 93,647 89,859 ------------ ------------ Total liabilities and stockholders' equity $ 257,210 $ 263,914 ============ ============ (1) The Consolidated Balance Sheet as of December 31, 2005 has been derived from our audited Consolidated Balance Sheet included in our Annual Report on Form 10-K for the year ended December 31, 2005. DURATEK, INC. AND SUBSIDIARIES Consolidated Statements of Operations (in thousands, except per share amounts) Three months ended ----------------------- March 31, April 1, 2006 2005 ----------- ----------- (unaudited) Revenues $ 73,437 $ 70,612 Cost of revenues 54,519 52,880 ----------- ----------- Gross profit 18,918 17,732 Selling, general and administrative expenses 11,908 8,413 ----------- ----------- Income from operations 7,010 9,319 Interest expense (1,685) (1,489) Other income, net 166 73 ----------- ----------- Income before income taxes and equity in income of joint ventures 5,491 7,903 Income taxes 2,350 3,046 ----------- ----------- Income before equity in income of joint ventures 3,141 4,857 Equity in income of joint ventures 91 3 ----------- ----------- Net income $ 3,232 $ 4,860 =========== =========== Weighted average common stock outstanding: Basic 14,866 14,664 =========== =========== Diluted 15,240 15,268 =========== =========== Income per share: Basic $ 0.22 $ 0.33 =========== =========== Diluted $ 0.21 $ 0.32 =========== =========== DURATEK, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (in thousands of dollars) Three months ended ----------------------- March 31, April 1, 2006 2005 ----------- ----------- (Unaudited) Cash flows from operating activities: Net income $ 3,232 $ 4,860 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 2,525 2,613 Other non-cash charges 203 (8) Changes in operating assets and liabilities (9,524) (22,549) ----------- ----------- Net cash used in operating activities (3,564) (15,084) ----------- ----------- Net cash used in investing activities (912) (1,379) ----------- ----------- Net cash (used in) provided by financing activities (4,969) 244 ----------- ----------- Net decrease in cash (9,445) (16,219) Cash and cash equivalents, beginning of period 18,440 23,296 ----------- ----------- Cash and cash equivalents, end of period $ 8,995 $ 7,077 =========== =========== *T