SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K/A
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR FISCAL YEAR ENDED DECEMBER 31, 2004 COMMISSION FILE NUMBER 0-11688
AMERICAN ECOLOGY CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 95-3889638
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
300 E. MALLARD, SUITE 300, BOISE, IDAHO 83706
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (208) 331-8400
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
Common Stock, $.01 par value per share
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [_]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [_].
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act).
Yes [X] No [_]
The aggregate market value of the Registrant's voting stock held by
non-affiliates on June 30, 2004 was approximately $134,800,000 based on the
closing price of $11.98 per share as reported on the NASDAQ Stock Market, Inc.'s
National Market System.
At March 1, 2005, Registrant had outstanding 17,411,294 shares of its Common
Stock.
Documents Incorporated by Reference
Portions of the Proxy Statement for the Annual Meeting of Stockholders to be
held May 25, 2005. Part III
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EXPLANATORY NOTE
This Amendment No. 1 to American Ecology Corporation's Form 10-K for the year
ended December 31, 2004 is being filed to report the results of Management's
Assessment of Internal Control over Financial Reporting as well as the results
of the Company's Independent Registered Public Accounting Firm's audit of
Internal Controls over Financial Reporting.
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TABLE OF CONTENTS
PART II
Item 9A. Controls and Procedures. . . . . . . . . . . . . . . . . .
PART IV
Item 15. Exhibits, Financial Statement Schedules. . . . . . . . . .
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ITEM 9A. CONTROLS AND PROCEDURES
As of the end of the quarter prior to the filing of this report, Company
management, under the direction of the Chief Executive Officer and Chief
Financial Officer, carried out an evaluation of the effectiveness of the design
and operation of the Company's disclosure controls and procedures pursuant to
Rule 13a-14 of the Securities Exchange Act of 1934 (Exchange Act). Based upon
that evaluation, the Chief Executive Officer and Chief Financial Officer believe
that the Company's disclosure controls and procedures are effective in alerting
them timely to material information required to be disclosed in the Company's
Exchange Act filings.
During the year ending December 31, 2004, there were improvements to the
Company's systems used to record and summarize transactions. The improvements
have enabled the Company to identify and modify internal controls, operational
procedures and environmental compliance programs.
MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROLS OVER FINANCIAL REPORTING.
Management is responsible for and maintains a system of internal controls over
financial reporting that is designed to provide reasonable assurance that its
records and filings accurately reflect the transactions engaged in Section 404
of Sarbanes-Oxley Act of 2002 and related rules issued by the Securities and
Exchange Commission require managementto issue a report onits internal controls
over financial reporting.
Management has conducted an assessment of its internal controlsover financial
reporting utilizing the criteria set forth by the Committee of Sponsoring
Organizations ("COSO") of the Treadway Commission in Internal Control -
Integrated Framework and concluded that, as of December 31, 2004, the internal
controls over financial reporting were operating effectively.
The Company's independent registered public accounting firm, Moss Adams LLP, has
audited management's assessment of the effectiveness of internal control over
financial reporting and has expressed unqualified opinions on management's
assessment and on the effectiveness of the Company's internal control over
financial reporting as of December 31, 2004.
While both Management and the Company's independent registered public accounting
firm have concluded that the Company's internal control over financial reporting
were effective at December 31, 2004, there were two areas, one involving
revenue, and one involving financial reporting, that were identified by the
Company's independent registered public accounting firm as containing
"significant deficiencies," as defined by Public Company Accounting Oversight
Board Auditing Standard No. 2 ("AS 2). As required by AS 2, the Company's
independent registered public accounting firm reported these significant
deficiencies to the Company's Audit Committee.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors
American Ecology Corporation
We have audited management's assessment, included in the accompanying
Management's Report on Internal Control over Financial Reporting that American
Ecology Corporation maintained effective internal control over financial
reporting as of December 31, 2004, based on criteria set forth by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO) in Internal
Control - Integrated Framework. American Ecology Corporation's management is
responsible for maintaining effective internal control over financial reporting
and for its assessment of the effectiveness of internal control over financial
reporting. Our responsibility is to express an opinion on management's
assessment and an opinion on the effectiveness of the company's internal control
over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether effective
internal control over financial reporting was maintained in all material
respects. Our audit included obtaining an understanding of internal control over
financial reporting, evaluating management's assessment, testing and evaluating
the design and operating effectiveness of internal control, and performing such
other procedures as we considered necessary in the circumstances. We believe
that our audit provides a reasonable basis for our opinion.
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A company's internal control over financial reporting is a process designed to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with accounting principles generally accepted in the United States of America.
A company's internal control over financial reporting includes those policies
and procedures that (1) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that
receipts and expenditures of the company are being made only in accordance with
authorizations of management and directors of the company; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company's assets that could have a
material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
In our opinion, management's assessment that American Ecology Corporation
maintained effective internal control over financial reporting as of December
31, 2004, is fairly stated, in all material respects, based on criteria set
forth by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO) in Internal Control - Integrated Framework. Also in our opinion,
American Ecology Corporation maintained, in all material respects, effective
internal control over financial reporting as of December 31, 2004, based on
criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) in Internal Control - Integrated Framework.
We have also audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the consolidated financial
statements of American Ecology Corporation as of and for the year ended December
31, 2004, and our report dated January 28, 2005 expressed an unqualified opinion
on those financial statements and financial statement schedule.
Moss Adams LLP
Los Angeles, California
April 15, 2005
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PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
1. Financial statements and reports of Independent Auditors
Independent Auditors' Reports
Consolidated Balance Sheets - December 31, 2004 and
2003
Consolidated Statements of Operations for the years
ended December 31, 2004, 2003 and 2002
Consolidated Statements of Shareholders' Equity for the
years ended December 31, 2004, 2003 and 2002
Consolidated Statements of Cash Flows for the years
ended December 31, 2004, 2003, and 2002
Notes to Consolidated Financial Statements
2. Financial statement schedules
Other schedules are omitted because they are not
required or because the information is included in the
financial statements or notes thereto
3. Exhibits
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Exhibit Description Incorporated by Reference from
No. Registrant's
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3.1 Restated Certificate of Incorporation, as amended 1989 Form 10-K
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3.2 Certificate of Amendment to Restated Certificate of Incorporation dated Form S-4 dated 12-24-92
June 4, 1992
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3.3 Amended and Restated Bylaws dated February 28, 1995 1994 Form 10-K
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10.1 Sublease dated February 26, 1976, between the State of Washington, the Form 10 filed 3-8-84
United States Dept. of Commerce and Economic Development, and
Nuclear Engineering Company with Amendments dated January 11,
1980, and January 14, 1982.
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10.2 Lease Agreement as amended between American Ecology Corporation 2002 Form 10-K
and the State of Nevada
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10.6 State of Washington Radioactive Materials License issued to US 1986 Form 10-K
Ecology, Inc. dated January 21, 1987
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10.11 Agreement between the Central Interstate Low-Level Radioactive 2nd Quarter 1988 10-Q
Waste Compact Commission and US Ecology, Inc. for the development
of a facility for the disposal of low-level radioactive waste dated
January 28, 1988 ("Central Interstate Compact Agreement")
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10.12 Amendment to Central Interstate Compact Agreement May 1, 1990 1994 Form 10-K
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10.13 Second Amendment to Central Interstate Compact Agreement dated 1994 Form 10-K
June 24, 1991
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10.14 Third Amendment to Central Interstate Compact Agreement dated July 1994 Form 10-K
1, 1994
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10.18 Memorandum of Understanding between American Ecology 1989 Form 10-K
Corporation and the State of California dated August 15, 1988
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10.35 Lease Agreement for Corporate Office Space between American 2nd Qtr 2002 Form 10-Q filed 8-14-02
Ecology Corporation and M&S Prime Properties dated April 18, 2002
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10.50a First Security Bank Credit Agreement 3rd Qtr 2000 Form 10-Q filed 11-13-00
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10.50c Term Loan Agreement between American Ecology Corporation and Form 8-K filed 10-25-02
Wells Fargo Bank dated October 22, 2002
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10.50d Sixth Amendment to Credit Agreement between American Ecology Form 8-K filed 12-16-03
Corporation and Wells Fargo Bank dated December 16, 2003
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10.50e Seventh Amendment to Credit Agreement between American Ecology Form 8-K filed 8-31-04
Corporation and Wells Fargo Bank dated August 30, 2004
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10.50f First Amendment to Term Loan Agreement between American Ecology Form 8-K filed 8-31-04
Corporation and Wells Fargo Bank dated August 30, 2004
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10.50g Eighth Amendment to Credit Agreement between American Ecology Form 8-K filed 12-16-04
Corporation and Wells Fargo Bank dated December 16, 2004
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10.52 *Amended and Restated American Ecology Corporation 1992 Director Proxy Statement dated 3-28-01
Stock Option Plan
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10.53 *Amended and Restated American Ecology Corporation 1992 Proxy Statement dated 4-16-03
Employee Stock Option Plan
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10.55 *Management Incentive Plan Effective January 1, 2003 2002 Form 10-K
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10.56 *Form of Management Incentive Plan Participation Agreement Dated 2002 Form 10-K
February 11, 2003
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10.57 *Form of Executive Employment Agreement Dated February 11, 2003 2002 Form 10-K
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10.58 *Form of Stock Option Agreement Dated February 11, 2003 2002 Form 10-K
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10.70 Form of Royalty Agreement for El Centro Landfill Dated February 13, Form 8-K filed 2-13-03
2003
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14.1 Code of Ethics for Chief Executive and Senior Financial Officers Proxy Statement dated 4-2-04
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14.2 Code of Ethics for Directors 2004 Form 10-K
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21 List of Subsidiaries 2004 Form 10-K
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23.1 Consent of Moss Adams LLP
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31.1 Certifications of December 31, 2003 Form 10-K by Chief Executive
Officer dated March 1, 2005
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31.2 Certifications of December 31, 2003 Form 10-K by Chief Financial
Officer dated March 1, 2005
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32.1 Certifications of December 31, 2003 Form 10-K by Chief Executive
Officer dated March 1, 2005
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32.2 Certifications of December 31, 2003 Form 10-K by Chief Financial
Officer dated March 1, 2005
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*Management contract or compensatory plan.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Registrant has duly caused this annual report to be signed
on its behalf by the undersigned, thereunto duly authorized.
AMERICAN ECOLOGY CORPORATION
SIGNATURE TITLE DATE
--------- ----- ----
/s/ James R. Baumgardner Senior Vice President, Chief Financial April 22, 2005
------------------------ Officer, Treasurer and Secretary --------------
JAMES R. BAUMGARDNER
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