Unusual transportation and waste-burial costs in its commercial waste-processing division contributed to a $1.6 million first-quarter loss for Columbia-based Duratek Inc.
The loss amounts to 15 cents per share in the quarter ended March 31, compared with net income of $1.5 million, or 8 cents per share, in the first quarter of 2000. Revenue for the quarter was $66.5 million, up from $41 million in the same quarter last year, thanks in large part to last year's acquisition of Waste Management Nuclear Services for $65 million.
Company officials said they are correcting problems at their commercial waste-processing facilities in Tennessee and should return to profitability later this year.
"We're not certainly back to where we believe we want to be, or ought to be, but we think we have turned the corner," said Robert Shawver, executive vice president and chief operating officer of the company, which disposes of radioactive and hazardous wastes.
The trouble started in the fourth quarter of 2000, when Duratek's Bear Creek and Memphis facilities in Tennessee began disposing of steam generators from nuclear power plants and launched new processes for handling contaminated metals. Delays implementing the new processes led to a backlog of waste stored at the facilities, forcing the company to spend more than usual to transport and dispose of the material in a timely fashion.
Since then, the company has signed new rail transportation contracts and implemented other measures to boost the bottom line at the troubled division. Meanwhile, Duratek's other two divisions - Federal Services Group and Commercial Services Group - continue to post gains.
"The issue we have with profitability is exclusively and only in our commercial processing group," said Robert E. Prince, president and chief executive of Duratek.
News of the operational difficulties forced the company to postpone the release of its fourth-quarter and year-end results in March, sending Duratek shares plunging 53 percent March 14. In April, Duratek reported a fourth-quarter loss of $12.5 million, or 95 cents per share. The losses forced the company to renegotiate certain terms with its lenders.
Duratek shares closed down 19 cents yesterday to $4.45 per share.