D uratek has just completed the first year of a three-year - - PDF document

uratek has just completed the first year of a three-year subcontract to provide waste collec- tion, characterization, packaging, transportation, treatment, and disposal services for hazardous, low- level radioactive, chemical, and mixed wastes at the U.S. Department of Energy’s (DOE) Los Alamos National Laboratory (LANL). On July 2, Duratek received notice that the project had earned an “excel- lent” award fee rating—the highest possible—for the period September 1, 2000 to April 1, 2001. The numeri- cal score of 96 qualifies Duratek to receive 100 percent

• f the award fee available under the subcontract.

The following quotations from Duratek’s award fee report highlight some of the accomplishments that went into this outstanding performance rating. Transportation/Compliance: [The customer] “was impressed with the overall caliber of Duratek personnel….The waste transportation crews have avoided transportation violations by asking questions and rejecting non-conforming waste. Off-site shipments have been well planned and without incident.” Training: “The performance of Duratek has been professional, cooperative, and

• immediate. Em-

ployees take training seriously and attendance and completion has been excellent. Duratek’s internal training is over and above what the Laboratory re-

• quires. This makes

their personnel more capable to perform their mission.”

v o l u m e 2 9 v o l u m e 2 9

W o r k i n g T o g e t h e r f o r a C l e a n e r , S a f e r W o r l d

Duratek Earns “Excellent” Performance Rating at Los Alamos National Laboratory

by Leila Crawford

D

Our LANL customer noted that Duratek personnel are “highly skilled and motivated to perform each task in the shortest amount of time with a high degree of quality.”

OSHA Logs: “Duratek did not have any recordable or reportable incidents. Duratek has endorsed the Zero Accident Policy and is concerned with the safety of its workers.” Management Satisfaction: “During this six-month period, Duratek has performed its contract responsibilities in an

• utstanding manner. When Duratek was requested to provide

additional services, they performed admirably. The individuals provided by Duratek were highly skilled and very motivated. This allowed each task to be performed in the shortest amount of time with a high degree of quality.” Duratek also received kudos for sponsoring, organizing, and carrying out a very successful Household Hazardous Waste Disposal event in Espanola, New Mexico, in April. The customer stated that “this event truly helped Northern New Mexico at the grass roots level.” Duratek commends the LANL Waste Management Project, including former Project Manager Troy Eshleman, current Project Manager John Kelly, and the entire project staff, for their excellent performance.

What’s Inside:

2 Exelon Presents Certificate of Appreciation to Duratek 2 Hittman Safely Transports 110,000-Pound Reactor Coolant Pump Motor 3 Oak Ridge Landfill Operations Project Receives Safety Award 3 Safety Is Lookin’ Good! 3 Chem-Nuclear/Duratek Named “Best Industry” 4 Recent Duratek Contract Awards 5 Duratek Donates Robotics System to University 5 Duratek Raises Money for United Way 6 Financial Highlights

aSalle County Generating Station is a two-reactor (two-unit) nuclear power plant located in rural northern

• Illinois. Together, the units can produce
• ver 2,000 megawatts, enough power

to support the electricity needs of over two million average American homes. At the end of last year, LaSalle per- formed an aggressive Unit 2 refueling

• utage. During the outage, a contractor

team of workers cutting pipes along the main condenser accidentally allowed oil to get into the condenser. This oil made its way through all of the plant systems and eventually back into the radwaste processing systems. Organics rapidly

2

Exelon Presents Certificate of Appreciation to Duratek

by Joe Amico spread throughout all of the processing

• tanks. Oil transients overloaded

Duratek’s on-site Advanced Liquid Waste Processing System (ALPS); yet it continued to function flawlessly. However, it needed immediate service in

• rder to process the large volumes of

water required to restart the reactor. ComEd, an Exelon company, which runs the nuclear plant, contacted Duratek and requested technician staffing support and accelerated ship- ments of filters and resin for the ALPS

• system. Project Manager, Tony

Didgeon, and other Duratek personnel, were on-site immediately, working through logistics issues and supporting the needs of our client. The focused efforts of ComEd/Exelon and Duratek resulted in being able to meet all of the needs for restart without impacting the aggressive schedule. Exelon sent a certificate of appreciation to Tony and the entire Duratek radwaste team for going the “extra mile” to ensure both a successful completion of the outage and a timely restart. The Unit 2 nuclear reactor returned to service on schedule and resumed supplying much needed electricity to customers.

L

Hittman Safely Transports 110,000-Pound Reactor Coolant Pump Motor

by Karen Kirby

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uratek’s wholly owned subsidiary, Hittman Transport Services (HTS), has been successfully hauling large components since 1993. Its expert heavy-haul team has extensive over-the-road and rail experience. Every facet of a project is examined to be sure it is brought to a safe and successful completion. This is especially important with moving large components due to the complexities involved in such an endeavor. HTS recently transported a 110,000-pound reactor coolant pump (RCP) motor, measuring 20’-6” long by 11’-4” wide by 19’-3” high, for U.S. Ecology, a motor refurbishment shop in Oak Ridge, Tennessee. Months of planning were devoted to properly prepare for these shipments. The project’s initial phase involved contracting for crane and rigging services at a local rail siding where HTS coordinated the transfer of the motor— packaged in a U.S. Department of Transportation (DOT)-approved shipping container—to HTS’ seven-axle, 65-ton capacity trailer. The Oak Ridge police force assisted with traffic control as HTS carefully navigated the heavy-haul vehicle. The utility company supported this effort by lifting

• verhead wires. The U.S. Department of Energy (DOE), which permitted

this load to travel through its site, provided the necessary assistance for safe passage. Once the service to the motor was complete, the entire process was repeated in the southbound direction. With flashing blue and orange lights from eight attendant vehicles illuminating the area, the trip to and from U.S. Ecology was completed in less than two hours. Each move was flawlessly

• executed. Both the utility customer and U.S. Ecology were pleased with our

attention to detail and hands-on service. These shipments were successful due to the talent, expertise, and support of Larry Briggs, an HTS driver; Darrel Watkins, who provided the maintenance support; and assistance by the Oak Ridge police, utility districts, DOE, and private escorts. This team emphasized safety and provided a high level of service and efficiency to complete the project within the parameters outlined by the customer.

sizing the Company’s commitment to safety and a safe work environment. At the conclusion of each safety meeting, Jim Salter said, “Be good to somebody and maybe they’ll be good to you.” We might all strive to keep this thought and Jim’s safety philosophy uppermost in our minds—at home and

• n the job.

3

uratek’s Landfill Operations Project at DOE’s Oak Ridge Reservation (ORR) was selected as the May 2001 Safety Subcontractor of the Month by ORR prime contractor Bechtel Jacobs Company (BJC). Sarah Schaefer, Duratek Project Manager, and Kevin Petherick, ES&H Manager, accepted the award from BJC President Joe Nemec on behalf of the 16 Duratek project employees who daily, proudly do what is required to ensure their personal safety and the safety of those with whom they work. The ORR Landfill Operations Project has been nominated for this award 12 times due to its consistently excellent safety

• performance. There have been no OSHA recordables or lost-

time accidents since Duratek took over operations nearly two years ago. How do project personnel operate free of accidents and injuries under unpredictable field conditions? According to Kevin Petherick, the following attributes and activities have been key to the project’s safety performance: “ORR Landfill employees are genuinely concerned about the well being of their work partners. Members of this close-knit group realize that every injury has a name and face, and that teamwork is the key to preventing accidents. These employees have a track record of keeping a lookout for unsafe conditions and

Oak Ridge Landfill Operations Project Receives Safety Award

by Leila Crawford

D

warning others of identified hazards. When working in the field, employees constantly check on their partners. In short, project personnel work together to ensure their own safety and also the safety of all workers and visitors in their work area. “Duratek employees own the subcon- tract safety program through their active participation in job walk-downs, Activity Hazard Assessment development, work completion, and post-job feedback. Duratek management believes that the workers are the experts and includes their input in all work packages. We were able to readily implement DOE’s Integrated Safety Management System on this subcontract since the employees already felt

• wnership of the safety program.

“Finally, when Duratek took over this project in 1999, the zero accident culture was present in the workforce. Duratek management was able to build on the existing safety culture to improve the safety record, meet customer needs, and above all, ensure the continuing safety of all project personnel.” This is the second safety award received by a Duratek project in the past year at Oak Ridge. The Liquid and Gaseous Waste Operations Project was BJC’s September 2000 Safety Subcontractor of the Month.

Duratek’s Landfill Operations Project was selected from approximately 140 Oak Ridge subcontractors as the May 2001 Safety Subcontractor of the Month.

afety Is Lookin’ Good!” If you have ever attended Chem- Nuclear Systems (CNS) monthly safety meeting, you would recognize these words as a motto, a creed, and a way

• f life. Jim Salter, CNS’ long-time

Safety and Loss Control Manager,

• pened each meeting with this concise

summary of our safety performance. Duratek and its wholly owned subsidiary, CNS, who operates the Barnwell Low-Level Radioactive Waste Disposal Facility, held a Safety Recogni- tion Luncheon on July 26, 2001. Over 90 employees attended, some of whom received 19 safety awards from the South Carolina Department of Labor, Licensing, and Regulation (SCDLLR). Rita McKinney, Director of the SCDLLR, praised the Company’s safety record in South Carolina. In a heart-felt speech, Ms. McKinney fondly remem-

“S

bered Jim Salter, who passed away unexpectedly on June 23, 2001. She remembered his love for CNS employ- ees, dedication to the Company, com- munity involvement, and devotion to his church and family as all parts of a man who set an example for others to

• emulate. In April 2001, Jim received the

Distinguished Service Award from the South Carolina Occupational Safety Council for his many years of leadership and direction of safety activities in the Company, the community, and the state. Jim’s concentration on safety and his enthusiasm caused everyone to “think safely” and “act safely” throughout his 20 years with CNS. After Ms. McKinney’s moving speech, which included some of Jim’s own words about safety, she assisted Regan Voit, President of CNS, in presenting safety awards and commendations to indi- vidual departments and work groups. Bob Prince, President of Duratek, closed the event with remarks empha-

Safety Is Lookin’ Good!

by Emily Wiilliams

Chem-Nuclear/Duratek Named “Best Industry”

In The People-Sentinel’s “Best of the Best Winners”, Chem-Nuclear (CNS) was named Best Industry in Barnwell County, South

• Carolina. The “Best of the Best” were selected

based on votes from the weekly newspaper’s

• readers. CNS has operated the disposal site for

30 years with an excellent record of regulatory compliance and with no interruptions in

• peration. Furthermore, it has operated for

more than one million work hours (over seven years) without a lost-time accident. Health physics controls are well established at the Barnwell site, resulting in employee exposures that are less than 10 percent of the limits established by the South Carolina Department

• f Health and Environmental Control and the

U.S. Nuclear Regulatory Commission (NRC).

Recent Duratek Contract Awards

by Leila Crawford and Steve Horvath

4 DOE Work

In June and July, Duratek was awarded four new environmental remediation and waste management subcontracts that expand our presence at U.S. Department of Energy (DOE) sites where we are already working. The contracts are expected to be worth at least $70 million in additional revenue over the next five years. Together with work already in progress at Oak Ridge, Hanford, and Rocky Flats, these awards provide a firm base for continuing and expanding Duratek’s presence at these key DOE sites throughout this decade. Rocky Flats Waste Management: Duratek and a joint venture partner, Los Alamos Technical Associates (LATA), won one of three major waste management subcontracts awarded by Kaiser Hill Company at the Rocky Flats Environmental Technology Site (RFETS), DOE’s former weapons manufacturing complex located near Denver, Colorado. This subcontract authorizes Duratek-LATA to compete for about $67 million worth of waste management tasks to be performed in the next four years. These tasks are a follow-on and expansion of work that has been done by approximately 40 Duratek employees at RFETS since 1995. In July, Duratek-LATA was awarded the first task under this subcontract, development of a disposal strategy for RFETS low-level/mixed waste. Over the next year, bids will be prepared for approximately 40 additional tasks. Hanford Waste Treatment Plant Support: The 10-year, $4 billion Hanford Waste Treatment Plant (WTP) project will provide final treatment and disposal of 53 million gallons of radioactive waste currently stored in underground tanks at the DOE’s Hanford Site in Washington State. The project calls for designing, constructing, and commis- sioning a large complex of first-of-a-kind

• facilities. Duratek has supported the WTP effort

since 1997 by providing the vitrification technology and systems to be used for waste

• treatment. Last month, Duratek signed two

multi-year subcontracts with Bechtel National,

• Inc. (BNI), DOE’s prime contractor for the

design and construction of the WTP, to continue research, development, and testing for the pilot- scale, high-level and low-level radioactive waste vitrification systems and design support for the full-scale systems. The two subcontracts are valued at $18.6 million over the next six months, and will continue on a task order basis for up to five years. ! In July, BNI also awarded a subcontract to CH2M Hill Construc- tors to support commissioning of the WTP, which is scheduled to begin radioactive

• perations in 2007. Duratek, as a member of the

CH2M Hill team, will supply experts to help develop procedures, training, and testing

• programs. The subcontract is for one year with

possible future extensions and the volume of work will vary year by year. Oak Ridge K-25/27 D&D: Duratek recently received its fourth major subcontract at DOE’s Oak Ridge Reservation when the Company was selected by Bechtel Jacobs Company to perform the first phase of decontamination and decom- missioning (D&D) of the K-25/K-27 Buildings. The 4.5 million square-foot K-25/K-27 Building complex was constructed in the 1940s to support the nation’s uranium enrichment program and at that time was the largest building under a single roof in the world. Duratek’s subcontract is valued at approximately $22 million over three years and covers characteriza- tion and removal of hazardous materials in the buildings prior to demolition, followed by packaging and transportation of these materials for disposal. Government estimates for the complete D&D effort, which will be subcon- tracted in phases, exceed $200 million. Duratek plans to bid on future phases of the D&D work. Hanford Soils D&D: Based on the Company’s excellent performance on other Hanford subcontracts, Duratek was selected by Bechtel Hanford, Inc. (BHI) to remove 150,000 tons of radioactively contaminated soils from an abandoned reactor area near the Columbia River and haul it to the Environmental Restoration Disposal Facility (ERDF). On July 2, BHI asked Duratek to take over the project for three to six months pending re-bid of the entire subcontract due to nonperformance of the former subcontractor. Duratek has started strong, beating the three-week milestone for completion of the operational readiness review and initiating soil hauling to ERDF (which is also operated by Duratek) a week earlier than

• scheduled. The value of this work is $1.7 to

$3.7 million, depending on the duration. Duratek will also bid on the continuation subcontract, projected to be a four-year, $12 million effort.

Commercial Services Projects

Decommissioning cost estimate for a nuclear research reactor. Duratek was recently notified in July 2001 of an impending award to develop a decommissioning study for a nuclear research reactor facility planning their

• decommissioning. Duratek continues to win

recognition and awards associated with assisting the Test, Research, and Training Reactor community with decommissioning of their

• facilities. The project value is approximately

$17,000. Remediation planning and radioactive waste support for a Superfund site with a radioactively contaminated area. Duratek was awarded a contract in May 2001 to work with the site contractor and the U.S. Environmental Protection Agency (EPA) to remove and dispose

• f soil with radioactive contaminants. The first

planning phase of the project is valued at $150,000 and the total project scope has the potential to generate revenue of up to $5.5 million. Decommissioning services to a major pharmaceutical firm. Duratek was awarded a contract in July 2001 to provide characterization, remediation, and release services for laboratory buildings contaminated from radiopharmaceutical

• perations. The total project value is estimated at

approximately $200,000.

Waste Processing Projects

Radioactive waste processing contract extension from Exelon Corporation. In July, Duratek was awarded a five-year contract renewal for low-level radioactive waste process- ing services to Exelon’s Illinois nuclear plants, worth approximately $12.5 million. Process spent fuel racks from Limerick Nuclear Power Plant. Duratek was notified in July 2001 of an award by Exelon Corporation for the transportation, processing, and disposal of radioactively contaminated fuel racks from the Limerick station, during an outage in Spring

• 2002. Duratek will process the racks at Duratek’s

Memphis, Tennessee, facility. The total project value is estimated at $300,000. Additional scope awarded at Connecti- cut Yankee decommissioning project. Duratek was notified of additional work scope in July 2001 by Bechtel Power Corporation at the Connecticut Yankee decommissioning project. The scope of work is to provide radioactive waste transportation, processing, and disposition of large metal components from the turbine building at the Haddam Neck nuclear plant in Connecticut, which is undergoing decommissioning. The waste will be processed at Duratek’s facilities in

• Tennessee. This additional scope is valued at

approximately $3.5 million and the work will commence in August 2001.

Attention Duratek Investors:

The Investor Information section of the Duratek website (www.duratekinc.com) has an

• ption to sign up for e-mail alerts for news

and events. Sign up today for your alerts to news on Duratek (Nasdaq: DRTK). For calendar alerts, click on the Calendar button and enter your preferences where instructed. For news alerts, click on Information Request, then click on E-Mail Alerts.

5

his summer, Duratek will com- plete the donation of a Remotely Operated Manipulator Arm (ROMA) System to the University of Texas at Arlington (UTA). It is a Shilling Devel-

• pment, Inc. Titan 7F Remote Manipu-

lator System, having a reach of 78 inches and the capacity to lift 250

• pounds. UTA was chosen as the

recipient based on the University’s response to an inquiry of interest that Duratek sent to several universities and research institutions across the country in April of this year.

! UTA’s robotics program will benefit undergraduate, as well

as graduate, students.

! UTA has a Distance Education program on the Internet,

which will be open to Duratek participation.

! UTA will develop nuclear waste course studies. ! UTA wants to cooperate with Duratek on future DOE

programs. UTA is a 100-year-old, research, teaching, and nonprofit public service institution located in the Dallas-Fort Worth

• area. It is the second largest of the 15 institutions that make

up the world-renowned University of Texas system, with an enrollment of more than 20,000 students. UTA has the largest College of Engineering (COE) in north Texas with more than 3,100 students. The Department of Mechanical and Aero- space Engineering (MAE) at UTA has a strong robotics program under the supervision of Dr. Tachung C. Yih. The ROMA system will replace older-generation robotics in Dr. Yih’s Mechatronics and BioElectromechanical Systems

• Laboratory. Dr. Yih has 18 years of experience in teaching

and research in the fields of design/analysis/simulation/control

• f robots and mechanisms, CAD/CAE/CAM, Mechatronics,

and Bioengineering. Since 1990, he has been collaborating with the U.S. Department of Energy’s (DOE) Oak Ridge National Laboratory on the design, analysis, and virtual reality simulation of redundant, long-reach manipulator (LRM)

• systems. These efforts are part of the DOE’s ongoing Tank

Waste Retrieval and Remediation mission to extract and treat wastes stored in underground tanks on DOE sites across the country. The ROMA system will be utilized for both teaching and

• research. New laboratory and course projects—with applica-

tion to the nuclear industry—will be developed using it. Students will learn the structure of robotic systems, control systems and strategies, power systems, and actuating

• systems. Dr. Yih plans to collaborate with faculty in other

departments as well as educators and researchers in other institutions and industries to develop new robotic curriculum and research projects using the ROMA system.

Duratek Donates Robotics System to University

by Tom Schietinger The acquisition of the ROMA system fits into the COE’s strategic planning for e-education. The COE is actively expanding its Distance Education programs and web-based laboratory (e-laboratory) courses, and the ROMA system will be available for on-line access, monitoring, and control. Duratek will have access to the ROMA systems over the Internet, as well. Duratek will be acknowledged in future publications based

• n results generated from the ROMA system and also on the

website of UTA’s Distance Education courses in which the ROMA system is utilized. The equipment, estimated to be worth more than $250,000, is currently being inventoried and packaged for shipment in August. This donation creates enormous potential that will provide long-term benefits to UTA, Duratek, and the nuclear industry.

T

The Duratek-United Way Golf Tournament raised $22,000 to begin the 2001 United Way Campaign Drive. A check from Duratek to United Way was presented at the conclusion of the round of golf on Thursday, July 12 at Canyon Lakes Golf

• Course. In the photo, from left to right are: Bud Knore, Board

Chair of United Way; Tom Halazon, President of United Way; Joel Eacker, President of Duratek Northwest; and Ed Aromi, President and General Manager of Duratek Hanford. Mr. Aromi is also Fundraising Chair for United Way for 2001.

Duratek Raises Money for United Way

by Bryan Kidder

• r the six month period ended June 30, 2001, net

income was $0.8 million on revenues of $141.1 million as compared to net income of $2.8 million on revenues of $91.9 million for the same six month period in 2000. Revenues increased by $23.7 million or 46.6% for the quarter and $49.2 million or 53.5% for the six months ended June 30, 2001. The revenue increases for the quarter and six months were primarily due to the integration of the Waste Management Nuclear Services business, which was acquired

• n June 8, 2000. Revenues and the results for the three and

six months ended June 30, 2001 also include $4.0 million related to the sale of limited rights on the Company’s waste vitrification (conversion to glass) technology at Hanford. On a per share basis, net earnings after preferred dividends were $0.13 for the quarter and $0.00 for the six months ended June 30, 2001 as compared to $0.07 and $0.15 for the same periods in 2000, respectively.

Duratek 10100 Old Columbia Road Columbia, Maryland 21046

Printed on Recycled Paper

6

President and CEO Robert E. Prince Robert E. Prince Robert E. Prince Robert E. Prince Robert E. Prince Executive V.P. and CFO Robert F. Shawver Robert F. Shawver Robert F. Shawver Robert F. Shawver Robert F. Shawver Investor Relations Diane R. Brown Diane R. Brown Diane R. Brown Diane R. Brown Diane R. Brown Strategic Business Development Regan Voit Regan Voit Regan Voit Regan Voit Regan Voit Marketing William Van Dyke William Van Dyke William Van Dyke William Van Dyke William Van Dyke ES&H / QA

• Dr. Willis Bixby
• Dr. Willis Bixby
• Dr. Willis Bixby
• Dr. Willis Bixby
• Dr. Willis Bixby

Vice President Federal Services Tom Dabrowski Tom Dabrowski Tom Dabrowski Tom Dabrowski Tom Dabrowski Group President Commercial Waste Processing James Van Vliet James Van Vliet James Van Vliet James Van Vliet James Van Vliet Group President Chem-Nuclear Systems, L.L.C. (Barnwell Disposal) Regan Voit Regan Voit Regan Voit Regan Voit Regan Voit President Commercial Services Paul Deltete Paul Deltete Paul Deltete Paul Deltete Paul Deltete Group President C o r p o r a t e C o r p o r a t e C o r p o r a t e C o r p o r a t e C o r p o r a t e H e a d q u a r t e r s H e a d q u a r t e r s H e a d q u a r t e r s H e a d q u a r t e r s H e a d q u a r t e r s 410.312.5100 Federal Services Federal Services Federal Services Federal Services Federal Services 303.542.2800 Processing and Processing and Processing and Processing and Processing and T r a n s p o r t a t i o n T r a n s p o r t a t i o n T r a n s p o r t a t i o n T r a n s p o r t a t i o n T r a n s p o r t a t i o n 877.462.4873 Barnwell Disposal Barnwell Disposal Barnwell Disposal Barnwell Disposal Barnwell Disposal 803.259.1781 www.duratekinc.com www.duratekinc.com www.duratekinc.com www.duratekinc.com www.duratekinc.com InSite is a publication of Duratek Editor Angela M. Roe Angela M. Roe Angela M. Roe Angela M. Roe Angela M. Roe

Financial Highlights

Common Stock Ownership: Market: NASDAQ Symbol: DRTK Shares Outstanding: 13,467,252 (as of 7/24/01) Investor Inquiries: Diane R. Brown Corporate Secretary Investor Relations 10100 Old Columbia Rd. Columbia, MD 21046 (410) 312-5100 FAX (410) 290-9070 Three months Six months ended June 30, ended June 30, 2001 2000 2001 2000 Revenues $74,647 $50,909 $141,102 $ 91,922 Net Income (loss) 2,348 1,269 772 2,816 As of 6/30/01 As of 12/31/00 Cash $ 3,777 $ 431 Current Assets 111,371 102,214 Total Assets 305,823 298,700 Current Liabilities 128,414 97,969 Total Liabilities 239,009 232,116 Preferred Stock and Common 66,814 66,584 Stockholders’ Equity Total Shares Outstanding and 13,506 13,555 Common Stock Equivalents

“The Federal and Commercial Field Services segments continued their strong performance and the Commercial Processing segment improved each month of the quarter returning to profitability in June. We anticipate continued improvements for the remaining quarters of the year.”

Robert E. Prince, President and CEO

F