Situation . . : :
A new management team has been tasked by the American Ecology Corporation board of directors to turn around the fortunes of the NASDAQ firm, which operates hazardous and low-level radioactive waste disposal facilities under franchise licenses. Performance audits reveal the gravity of the task: multimillion-dollar liabilities are found at disposal facilities in Texas and Tennessee acquired only months earlier. An aggressive response is required from the company's new management team. In this critical atmosphere, Scott Peyron & Associates, Inc. is assigned investor relations and public relations responsibilities in place of a global communications firm.
Strategy . . : :
Develop a fire wall of accurate information to offer investors who have seen the company's share price drop steeply and now fear for its survival.
Prepare senior managers to respond to challenging questions from major investors, analysts, brokers and lenders with comprehensive message points that fully disclose problems but are treated with strategic actions to remedy them.
Serve as the front line investor relations contact for the company. Make certain that the investing public is presented an accurate picture of a company that is financially challenged but is led by a strong new management team that knows exactly what it must do to return the company to profitability.
Develop a public relations plan to help the company address issues presented by a $50-million investment in a California waste facility that has become a political lightning rod dividing a Democratic presidential administration (and a key Senate ally) and a Republican Congress. Develop meaningful relationships with California-based members of national media.
Execute a targeted, cost sensitive public relations program that helps enable the company make deep cuts in expenses but protects a reputation earned over 40 years of providing environmental solutions to industry and government.
Outcome . . : :
American Ecology's board of directors, responding to the measures of the new management team, dramatically increases its level of investment in the company.
In spite of dropping off analysts' "radar screens" during its protracted period of difficulty, the company's share price levels off.
California and American Ecology join in separate lawsuits against the federal government, charging the Clinton administration with abuse of discretion and breach of contract in its handling of the proposed Ward Valley low-level radioactive waste facility.
A California-centered media relations initiative results in a Wall Street Journal editorial calling on the Clinton administration to stop playing politics and transfer its Ward Valley land to California to open the disposal site. CNN shines a light on the haphazard storage conditions of radioactive medical waste in California urban centers as the Clinton administration continues to block Ward Valley politically.
Investors respond to the management team's program by infusing the company with approximately $3 million in a 1998 shareholder rights offering. The success of the offering enables senior management to negotiate a transaction with Chase Bank of Texas that eliminates $40 million in debt and reduces long-term debt to less than $1 million.
