After Restructuring, American Ecology Posts 2nd Profitable Quarter in a Row : Waste disposal: The company earns $498,000 during the same period in which it lost $1.79 million a year ago. It is still seeking investors despite a recent $28.5-million infusion.

American Ecology Corp., an Agoura Hills waste disposal services concern, has posted its second consecutive profitable quarter, showing the benefits of restructuring and a much-needed $28.5-million investment by Browning-Ferris Industries, Inc.

American Ecology said it earned $498,000 in its third quarter, which ended Sept. 30, with a 14% increase in revenue to $13 million. A year ago, the company lost $1.79 million on revenues of $11.4 million. For the first nine months of the year, American Ecology has earned $1.9 million on sales of $36.9 million, compared with a loss of $4.3 million on sales of $31.4 million during the same period in 1989.

“A year ago we were coming out of the throes of a tough restructuring,” said William E. Prachar, American Ecology’s chief executive. “Now we’re showing what we can do.”

But American Ecology still has some worries. In August, 1989, Browning-Ferris, the big Houston waste disposal company, invested $28.5 million in American Ecology by purchasing preferred stock, bonds and warrants to buy additional common stock. Then in April Browning-Ferris announced that it wanted to sell its hazardous-waste disposal interests, including its stake in American Ecology.

That leaves uncertain the question of where American Ecology will get about $10 million in funding it needs in the next year and a half, mostly to help it build a low-level radioactive-waste dump in the California desert.

“We need more cash,” Prachar said. But he added that the company could raise money for the California site through a bond issue or from institutional investors.

The need for cash is not as severe as it was last year when Browning-Ferris got American Ecology out of a cash pinch. After setting up a $23.5-million fund in 1988 for settling lawsuits stemming from problems at some of its waste sites, American Ecology found itself without enough working capital.

Now Browning-Ferris will probably have to sell its stake for a big discount. That’s because, due to American Ecology’s falling stock price, the warrants to buy more stock are “useless,” Prachar said. Still, Prachar said he thinks Browning-Ferris and American Ecology are close to finding a buyer for the stake--one interested in making more investments in his company.

Much of the improvement this year is due to the fact that American Ecology shut down or sold some of its unprofitable businesses. The company sold its National Ecology subsidiary to Babcock & Wilcox, a subsidiary of McDermott International, for $750,000 in November, 1989. National Ecology operated a municipal waste processing plant in Maryland and was going to operate another one in Florida. But the subsidiary lost $2.5 million in the second quarter of 1989 alone. “We were too small to be a viable competitor” in that business, Prachar said.

The company also consolidated some of its East Coast operations into an office in Louisville, Ky., and stopped its processing of low-level nuclear waste at a plant in Charlotte, N.C.

Now American Ecology mainly gets its revenues from disposing of chemical waste at sites in Nevada and Texas. But Prachar is hoping American Ecology will start making money at the planned California Low Level Radioactive Waste (LLRW) site near Needles, in the California desert, where American has already spent about $15 million just to perform tests.

The state should decide whether to give American Ecology a license to build the site by early next year, said Don Womeldorf, chief of the environmental management branch of the California Department of Health Services. “So far, nothing has happened that makes us think that the license will not be granted,” Womeldorf said.

After getting a license, it should take American Ecology six or seven months to build the waste site, Womeldorf added.

Another small bit of good news came when the federal Environmental Protection Agency last week agreed to a plan for cleaning up a hazardous-waste site in Sheffield, Ill. The EPA said the cleanup would cost American Ecology $13 million over 30 years. But the company had been counting on spending that much, and the EPA announcement cleared up fears it would face even higher costs.