WCA Waste Corporation Announces Second Quarter 2006 Results

Date: August 1, 2006

Source: WCA Waste Corporation

  • Second Quarter Revenue Increased 31.5%
    * Second Quarter Operating Income Increased 29.9%
    * Company Completes New Capital Plan

WCA Waste Corporation (Nasdaq:WCAA) announced today financial results for the second quarter ended June 30, 2006. For the second quarter of 2006, revenue increased 31.5% to $38.2 million over the $29.1 million that was reported for the same period last year. Operating income increased 29.9% to $6.8 million over the $5.3 million that was reported for the quarter ended June 30, 2005. Net income for the quarter was $3.8 million, or $0.23 per share compared to $0.9 million, or $0.06 per share for the second quarter last year. During the quarter we recognized $3.7 million ($2.2 million net of tax, or $0.13 per share) of income related to the unrealized gain on our interest rate swap that was terminated on July 5, 2006. During the same quarter last year we wrote off $1.3 million ($0.8 million net of tax, or $0.05 per share) of deferred financing costs.

For the six months ended June 30, 2006, revenue increased 40.4% to $72.9 million over the $51.9 million for the same period last year. Operating income increased 53.7% to $11.9 million over the $7.8 million for the six months ended June 30, 2005. Net income for the six months ended June 30, 2006 was $4.5 million, or $0.27 per share compared to $1.6 million, or $0.10 per share for the same period in 2005.

Tom Fatjo, Chairman of WCA Waste Corporation, stated, "We are pleased with the operational results for the second quarter of 2006. We are confident with our target forecast for 2006, which does not include the impact of potential acquisitions:

  • Revenue in excess of $140 million, a 23% increase over 2005;
    * Operating income in excess of $21 million, a 24% increase over 2005; and
    * EBITDA in excess of $40 million, a 25% increase over 2005."

We have completed our strategic review, which was a primary focus of certain members of management and the Board during the quarter. The capital plan that resulted from this review and was completed in July 2006 includes:

  • The private placement of $150 million of 9.25% senior unsecured notes due 2014, which closed on July 5, 2006. The proceeds from this offering were utilized to retire or pay down our existing borrowings;

  • A new $175 million senior secured credit facility led by Comerica Bank, which included the exercise of $75 million of the $100 million accordion on July 28, 2006, in addition to the original $100 million underwritten commitment; and

  • The purchase by Ares Corporate Opportunities Fund II, L.P. of $75 million in convertible preferred stock. The preferred stock is convertible into our common stock at $9.60 per share and carries a 5% payment-in-kind (PIK) dividend. This transaction closed on July 27, 2006.

As a result of completing this capital plan, we will write off $2.9 million (approximately $1.7 million net of tax) of deferred financing costs associated with debt under our previous capital structure during the third quarter of 2006.

Compared to financial information as of March 31, 2006, the results of the capital plan are as follows:

  • Improves ratio of debt (net of cash) to total capitalization from 66.1% to 39.5%;

  • Increases equity from $94 million to approximately $169 million;

  • Reduces interest rates on senior secured debt, when outstanding, from LIBOR plus 300 basis points to LIBOR plus 175 basis points at our current targeted debt levels;

  • Fixes interest rates on substantially all of our debt including:
    - $150 million in senior unsecured notes at 9.25%; and

  • Up to $150 million on the revolving senior credit facility at 5.64% (plus the applicable margins), after consideration of our previously announced new interest rate swap agreement.

  • We will have approximately $225 million in unused available capital.

The following tables provide more detailed information about our second quarter earnings. In these tables, EBITDA, our non-GAAP measure, is reconciled to our net income. WCA Waste Corporation will be hosting a conference call to discuss the second quarter 2006 earnings at 8:30 am Eastern Time on August 2, 2006.

WCA Waste Corporation is an integrated company engaged in the transportation, processing and disposal of non-hazardous solid waste. The Company's operations consists of twenty landfills, twenty-one transfer stations/material recovery facilities and twenty-four collection operations located throughout Alabama, Arkansas, Colorado, Florida, Kansas, Missouri, New Mexico, North Carolina, South Carolina, Tennessee and Texas. The Company's common stock is traded on the NASDAQ National Market System under the symbol "WCAA."

For more information visit: www.wcawaste.com.

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