Date: May 4, 2006
Source: PR Newswire
Diluted EPS of $0.08 Adjusted EBITDA $112 million - increase of 11% Company Reaffirms 2006 Guidance
Covanta Holding Corporation (NYSE: CVA) ("Covanta" or the "Company") reported financial results today for the quarter ended March 31, 2006. The Company is presenting financial results on an as reported and pro forma basis to assist investors in assessing its financial performance. The pro forma information was prepared as if the acquisition of Covanta ARC Holdings, Inc. formerly American Ref-Fuel Holdings Corp., ("Ref-Fuel") was consummated on January 1, 2005.
First Quarter 2006 Results
For the 2006 first quarter, total revenues as reported in accordance with GAAP were $305.4 million, versus $174.8 million for the same period of 2005. This increase is the result of the Ref-Fuel acquisition during the second quarter last year. Net income for the 2006 first quarter was $11.4 million, or $0.08 per diluted share. This compares with 2005 first quarter net income of $10.3 million which included a one-time after-tax investment gain of $2.1 million.
The Company believes a comparison between the 2005 pro forma financial information and the 2006 actual results will assist in assessing Covanta's first quarter performance. On that basis, total revenues climbed from $288.5 million to $305.4 million, a 6% increase. Net income doubled from $5.7 million for the quarter on a pro forma basis for 2005 to $11.4 million for the first quarter of 2006. Excluding the one-time investment gain in the first quarter of 2005, net income increased $7.8 million and diluted EPS increased from $0.03 to $0.08.
Continuing the comparison to the prior year pro forma results, for the Company's principal subsidiary, Covanta Energy Corporation, ("Covanta Energy"), adjusted EBITDA for the first quarter of 2006 was $111.7 million versus $100.4 million on a pro forma basis for the first quarter of 2005, an increase of 11%. This was primarily driven by revenue growth relating to improved pricing while also managing expense increases.
For the 2006 first quarter, domestic waste and energy business revenues were $262.6 million compared to pro forma prior year revenues of $248.5 million, an increase of $14.1 million, or 6%, driven primarily by higher energy rates and contractual service fee escalation. International revenues for the 2006 first quarter were $38.8 million compared to pro forma prior year revenues of $36.0 million, an increase of $2.8 million, or 8%, primarily due to higher energy prices.
Anthony J. Orlando, President and Chief Executive Officer, said, "We are very pleased with our first quarter results. With most of our revenue under contract and so many talented employees working to safely provide outstanding client service, we continue to deliver predictable financial results."
Mr. Orlando continued, "During this first quarter, we experienced favorable market conditions. Notably, energy prices continued trending higher, boosting our current revenue and creating greater opportunities to grow the business by leveraging our expertise in waste-to-energy."
2006 Guidance Reaffirmed - On Target to Achieve Key Financial Metrics
The Company is on track to achieve its key metrics and reaffirmed its 2006 guidance of Adjusted EBITDA in the range of $515 million to $525 million, free cash flow of approximately $225 million and diluted earnings per share of approximately $0.50. In addition, the Company reaffirmed that, when combined with the $220 million already repaid in 2005 on a pro forma basis, total debt reduction of approximately $700 million is planned by the end of 2007. Note: Diluted earnings per share is provided for Covanta while all of the other performance metrics discussed above relate to Covanta Energy.
Conference Call Information
Covanta Holding Corporation will host a conference call at 11:00 am (Eastern) on Friday, May 5, 2006 to discuss its 2006 first quarter results. Prepared remarks will be followed by a question-and-answer session. To participate, please dial 800-475-3716 approximately 10 minutes prior to the scheduled start of the call. If you are calling from outside of the United States, please dial 719-457-2728. The conference call will also be webcast live on the Investor Relations section of the Covanta website at www.covantaholding.com.
A replay of the conference call will be available from 2:00 pm (Eastern) Friday, May 5, 2006 through midnight (Eastern) Friday, May 12, 2006. To access the replay, please dial 888-203-1112 or 719-457-0820 and use the replay passcode: 9054160. The webcast will also be archived on www.covantaholding.com.
More information: www.covantaholding.com.
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