GTS Duratek's quarter comes in at 14 cent a share

Reduced costs fuel turnaround from loss

Waste disposal

August 05, 1999|By Kristine Henry | Kristine Henry,SUN STAFF

Reduced operating costs helped GTS Duratek Inc.'s results improve dramatically in the second quarter, the company said yesterday, reporting a net income of $2.7 million, or 14 cents a share, compared with a loss of $387,000, or 6 cents a share, posted for the second quarter of 1998.

Revenue in the three months that ended June 30 grew 7 percent to $41.7 million compared with $38.8 million in the quarter last year.

In the 1998 quarter, the Columbia-based hazardous-waste disposal company booked about $2 million in higher-than-expected costs related to putting together proposals to decommission two nuclear power plants and to restructuring one of its facilities in Oak Ridge, Tenn.

"We have focused our efforts on continually trying to reduce operating costs and streamline operations," Treasurer Craig Bartlett said of yesterday's numbers.

Said Robert E. Prince, president and chief executive, said new work won by the company will improve future earnings.

"We have won over the past 12 months more than $110 million in radioactive-waste-processing contracts for decommissioning the Big Rock [Michigan], Maine Yankee and Connecticut Yankee nuclear power plants and two university research reactors," Prince said. "Better yet, most of the financial benefit of this new work will be realized in future quarters."

In the first six months of the year, Duratek had net income of $4.5 million on revenue of $80.6 million compared with a net loss of $706,000 on revenue of $76 million in the corresponding period of 1998.

For the first six months of last year, Duratek had reported net income of $924,000. The company has since restated its 1998 earnings, due to a change in accounting rules related to start-up activity cost.

"Operating margins for the first six months of 1999 were 10.2 percent, up from 2.6 percent over the same period in the prior year," said Robert F. Shawver, executive vice president and chief financial officer. "This is primarily the beneficial result of strong operating leverage and increased volumes at our waste-processing facilities."

The company reported two new contracts in the past several weeks. Duratek won a contract to process metal from a decommissioned steam generator at a nuclear plant in Wisconsin that will bring in a little over $2 million. Another contract to take a New England nuclear power plant out of service will bring in up to $50 million.

Shares of Duratek closed at $6.75 yesterday, up 12.5 cents.

Pub Date: 8/05/99

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