American Ecology Posts Record Operating Income of $7.5 Million in 2Q

Date: July 18, 2006

Source: American Ecology Corporation

All Four Operating Facilities Continue Strong Financial Performance

BOISE, Idaho July 18, 2006 - American Ecology Corporation [Nasdaq: ECOL] today announced net income of $4.9 million, or $.27 per diluted share, for the quarter ended June 30, 2006 compared to net income of $3.7 million, or $.21 per diluted share, in the second quarter of 2005.

Second Quarter Results

Operating income was $7.5 million for the quarter, 27 percent higher than operating income of $5.9 million posted in the second quarter of 2005 and $58,000 higher than the previous record quarter of $7.4 million posted by American Ecology in the fourth quarter of 1992. All four operating facilities were profitable for the quarter.

Revenue for the second quarter of 2006 increased 96 percent to $29.9 million, up from $18.8 million a year ago. This improvement reflects a 6 percent increase in average selling price, a two percent increase in the volume of waste disposed at the Company's hazardous waste facilities in Idaho, Nevada and Texas and an increase in rail transportation and disposal services.

"Our record quarterly financial performance was driven by strong operating results at all four American Ecology disposal facilities," stated Stephen Romano, President and Chief Executive Officer. "We are particularly pleased with the growth at our Nevada and Texas facilities, which both made significant contributions during the second quarter," Romano noted.

Other direct operating costs for the quarter increased to $7.9 million, up from $5.7 million in the second quarter of 2005. This reflected increased labor and waste treatment additive costs to handle increased waste throughput and treatment volumes. The Company continues to incur higher costs for its railcar fleet as well as project-specific railroad charges. Due to higher revenue, other direct operating costs declined to 27 percent of revenue in the second quarter of 2006 down from 31 percent a year ago.

Higher railcar utilization helped push gross profit from $9.2 million, or 49 percent of revenue, in the second quarter of 2005 to $10.5 million, or 35 percent of revenue, in the second quarter of 2006. Shipments from the Honeywell, New Jersey project resumed in April 2006 in compliance with a court order and have continued as scheduled since then.

Selling, general & administrative expenses (SG&A) for the second quarter of 2006 were $3.1 million, or 10 percent of revenue. This compared to SG&A of $3.4 million, or 18 percent of revenue, in the second quarter last year.

At quarter end the Company had $10.8 million of cash and investments and $25.5 million of working capital. The Company's $15 million line of credit was unused at quarter end.

Year-to-Date Results

Revenue for the six months ended June 30, 2006 reached $51.4 million, up 64 percent from the first six months of 2005. Year-to-date waste volumes increased 18 percent over 2005 with the majority of this increase occurring during the first quarter of 2006. The increase in revenue was substantially due to increased rail transportation services provided to Honeywell and other customers. Operating income rose to $13.7 million, up 89 percent from the $7.2 million posted for the same period last year. For the first six months of 2006, the Company reported net income of $9.1 million, or $.50 per diluted share compared to net income of $4.6 million, or $.26 per diluted share for the first half of 2005.

Outlook for 2006

The Company continues to project that net earnings for 2006 will be in the upper end of its previously announced guidance range of $0.72 to $0.82 per diluted share. Management expects softer third quarter financial performance due to pending completion of an event project shipping to its Washington facility as well as reduced waste shipments under the Company's multi-year contract with the U.S. Army Corps of Engineers. The expected reduction in Army Corps of Engineers work reflects delays in shipments from several ongoing remediation projects pending appropriation of funds for the next federal fiscal year. Management expects shipments from these ongoing projects to resume during the fourth quarter.

Other Updates

On July 3, 2006, the Company declared a $0.15 per common share quarterly dividend for stockholders of record on July 14, 2006. This $2.7 million dividend will be paid using cash on hand on July 21, 2006.

On July 3, 2006, the Company announced an approximately $6 million increase in its 2006 capital budget to $18 million to purchase approximately 80 additional railcars with cash. The new railcars will service existing rail transportation and disposal projects as well as recently awarded work expected to commence in the first quarter of 2007.

On April 3, 2006, the Company self funded $4.5 million of non-operating disposal site closure and post-closure obligations, replacing the insurance policy which previously provided financial assurance for those sites. The insurance policy remains in effect, at a reduced premium, for financial assurance obligations at operating facilities.

The Company's second quarter 2006 investor conference call will be held Wednesday, July 19, 2006 at 9:00 am Mountain Time. President and Chief Executive Officer Stephen Romano, incoming Vice President and Controller Jeff Feeler, outgoing Vice President and Controller Michael Gilberg and Vice President of Sales and Marketing Steven Welling will host the call. Interested parties are invited to submit questions in advance to, or by facsimile to 208-331-7900. To join the call, dial 866-261-3296. A replay will be available at following the call.

American Ecology Corporation, through its subsidiaries, provides radioactive, PCB, hazardous and non-hazardous waste services to commercial and government customers throughout the United States, such as steel mills, medical and academic institutions, refineries and chemical manufacturing facilities, and the nuclear industry. Headquartered in Boise, Idaho, the Company is the nation's oldest radioactive and hazardous waste services provider, having operated for more than fifty years.


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