Date: May 1, 2007
Source: Waste Industries USA, Inc.
- Reports revenue of $81.3 million and earnings per share from continuing operations of $0.39
- Operating income increases 47.3%
Waste Industries USA, Inc. (Nasdaq: WWIN), a regional, non-hazardous solid waste services company, today reported preliminary financial results for the first quarter ended March 31, 2007.
Revenue increased 2.7% to $81.3 million, compared to $79.1 million for the quarter ended March 31, 2006. Operating income for the quarter increased 47.3% to $11.4 million, compared to $7.8 million for the same period in 2006. Operating income as a percentage of revenue increased to 14.0% for the first quarter 2007 from 9.8% for the same period in 2006.
Income from continuing operations for the quarter was $5.4 million, or $0.39 per diluted share, a 61.7% increase from income from continuing operations of $3.4 million, or $0.24 per diluted share, for the first quarter of 2006. Net income for the quarter was $5.6 million, or $0.40 per diluted share, a 64.6% increase from net income of $3.4 million, or $0.24 per diluted share, for the first quarter of 2006.
Jim W. Perry, President and CEO of the Company, stated, "Our results for the first quarter reflect our on-going initiatives to improve operating efficiencies, internalize more of our waste volume and achieve reasonable pricing for the services we provide to our customers. We are continuing to look for ways to improve our service delivery cost by achieving productivity gains and by leveraging our existing overhead structure."
The Company will host a conference call to discuss its first quarter results on May 2, 2007 at 2:00 PM (Eastern Time). The call number is (866) 550-6338 and the confirmation number is 6184173. The conference call will also be broadcast live over the Internet at www.wasteindustries.com under the "Investor Relations" tab. A replay of the call will be available through May 16, 2007 and may be accessed by calling (888) 203-1112 and using confirmation number 6184173.
Waste Industries USA, Inc. is a vertically integrated solid waste services company that provides collection, transfer, disposal and recycling services to commercial, industrial and residential customer locations in the states of North Carolina, South Carolina, Virginia, Tennessee, Mississippi and Georgia.
This press release contains forward-looking statements under the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified as such because the statement will include words such as the Company "believes," "anticipates," "expects" or words of similar import. Similarly, statements that describe the Company's future performance plans, objectives or goals are also forward-looking statements. Forward- looking statements are subject to risks and uncertainties, such as fuel prices, risks in the development and operation of landfills, managing growth, economic trends and weather that could cause actual results to differ materially from those currently anticipated. Consider these factors carefully in evaluating the forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in the Company's SEC filings.
WASTE INDUSTRIES USA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Data)
(Unaudited)
Three Months Ended
March 31,
2006 2007
Revenues:
Service revenues $78,959 $81,110
Equipment sales 188 176
Total revenues 79,147 81,286
Operating costs and expenses:
Operating (exclusive of
depreciation and amortization
shown below) 51,590 49,841
Cost of equipment sales 129 91
Selling, general and administrative 11,675 11,795
Depreciation and amortization 8,049 8,137
(Gain) loss on sale of property
and equipment and other assets (50) 2
Total operating costs and
expenses 71,393 69,866
Operating income 7,754 11,420
Interest expense 2,548 2,419
Interest income (46) (28)
Other (88) (92)
Total other expense, net 2,414 2,299
Income from continuing operations
before income taxes 5,340 9,121
Income tax expense 1,979 3,687
Income from continuing operations 3,361 5,434
Discontinued operations:
Income from discontinued operations,
net of income taxes 29 147
Net income $3,390 $5,581
Earnings per share:
Basic:
Income from continuing operations $0.25 $0.39
Income from discontinued operations - 0.01
Net income $0.25 $0.40
Diluted:
Income from continuing operations $0.24 $0.39
Income from discontinued operations - 0.01
Net income $0.24 $0.40
Weighted-Average Number Of Shares
Outstanding:
Basic 13,761 13,999
Diluted 13,911 14,123
WASTE INDUSTRIES USA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
(Unaudited)
December 31, March 31,
2006 2007
ASSETS
Current assets:
Cash and cash equivalents $1,656 $1,366
Receivables, net 36,408 35,590
Other 5,013 9,064
Total current assets 43,077 46,020
Property and equipment, net 218,039 218,526
Intangible assets, net 104,950 106,042
Other noncurrent assets 4,213 4,357
Total assets $370,279 $374,945
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt 7,143 10,021
Accounts payable - trade 13,318 13,137
Other accrued liabilities and
deferred revenues 22,725 28,322
Total current liabilities 43,186 51,480
Long-term debt, net of current
maturities 150,069 139,498
Deferred taxes and related
contingencies 23,513 26,349
Other liabilities 7,640 9,254
Total liabilities 224,408 226,581
Shareholders' equity: 145,871 148,364
Total liabilities and
shareholders' equity $370,279 $374,945
WASTE INDUSTRIES USA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Three Months Ended
March 31,
2006 2007
Operating Activities:
Net income $3,390 $5,581
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 8,187 8,137
Landfill accretion expense 416 130
Amortization of debt issuance costs 204 102
(Gain) loss on sale of property
and equipment and other assets (50) 2
Stock compensation expense 95 158
Provision for deferred income taxes 25 253
Change in fair value of
commodity hedges 696 1,070
Provision for doubtful accounts 574 412
Changes in assets and liabilities,
net of effects from acquisition and
disposition of related businesses (2,103) 4,766
Net cash provided by
operating activities 11,434 20,611
Investing Activities:
Acquisitions of related business,
net of cash acquired (2,397) (5,746)
Purchases of property and equipment (9,914) (4,538)
Proceeds from sale of property and
equipment and other assets 252 417
Other (252) (173)
Net cash used in investing activities (12,311) (10,040)
Financing Activities:
Proceeds from issuance of long-term debt 10,000 8,000
Principal payments of long-term debt (10,571) (19,674)
Principal payments of capital lease
obligations (327) (85)
Debt issuance costs (491) -
Excess tax benefit from stock option
exercises 36 91
Net proceeds from exercise of stock
options 720 807
Net cash used in financing activities (633) (10,861)
Decrease in cash and cash equivalents (1,510) (290)
Cash and cash equivalents,
beginning of period 1,575 1,656
Cash and cash equivalents, end of period $65 $1,366
Supplemental disclosures of cash flow information:
Cash paid for interest $2,648 $2,846
Cash paid for taxes $4,234 $154
EARNINGS RELEASE - SUPPLEMENTAL DATA (dollars in thousands)
QUARTER ENDED
REVENUE MARGINS 3/31/06 3/31/07
Operating expenses including cost of
equipment sales 65.3 % 61.4 %
S G & A 14.8 % 14.5 %
Depreciation and amortization 10.2 % 10.0 %
Interest expense, (net) 3.2 % 2.9 %
Income from continuing operations (pre-tax) 6.7 % 11.2 %
Income tax expense 2.5 % 4.5 %
Income from continuing operations 4.2 % 6.7 %
SERVICE REVENUE MIX
Collection:
Industrial $22,136 $21,824
Commercial 22,290 23,159
Residential 18,450 19,803
Disposal and transfer 11,043 11,549
Recycling service 1,234 1,102
Recycled commodity sales 307 318
Convenience sites 1,599 1,652
Other 1,900 1,703
Total Service Revenue $78,959 $81,110
OPERATING INCOME BEFORE DEPRECIATION,
AMORTIZATION AND ACCRETION*
Operating income $7,754 $11,420
Accretion 416 130
Depreciation and amortization 8,049 8,137
Operating income before depreciation,
amortization and accretion $16,219 $19,687
CAPITAL EXPENDITURES DETAIL
Collection & Transportation $8,232 $3,732
Landfill Development 1,682 806
Total capital expenditures $9,914 $4,538
FREE CASH FLOW RECONCILIATION*
Net cash provided by operating activities $11,434 $20,611
Less: Capital expenditures (9,914) (4,538)
Plus: Proceeds from disposal of assets 252 417
Free cash flow $1,772 $16,490
DEBT TO TOTAL CAPITAL 12/31/06 3/31/07
(includes capital leases) 51.9 % 50.2 %
TOTAL LIABILITIES TO EQUITY 1.5 1.5
DAYS SALES OUTSTANDING 34 33
SERVICE REVENUE GROWTH Q1 2007
Price 3.7 %
Volume -3.2 %
Energy surcharge -0.1 %
Total internal growth 0.4 %
Recycling commodities 0.0 %
Acquisitions 2.3 %
Total service revenue growth 2.7 %
* Operating income before depreciation, amortization and accretion and free cash flow are considered non-GAAP financial measures. The Company defines free cash flow as cash flows from operating activities less capital expenditures plus proceeds from the sale of property and equipment and other assets. Operating income before depreciation, amortization and accretion and free cash flow do not represent, and should not be considered as, an alternative to net income or cash flows from operating, investing and financing activities, each as determined in accordance with GAAP. The Company's definitions of operating income before depreciation, amortization and accretion and free cash flow might not be comparable to similarly titled measures reported by other companies. The Company believes that the presentation of operating income before depreciation, amortization and accretion is useful to investors because it provides important information of the Company's operating performance exclusive of certain non-cash costs. The Company has included information concerning free cash flow because it believes it provides additional information for determining its ability to meet debt service requirements and that this measure is an indicator upon which the Company, its lenders and some investors assess its financial performance and its capacity to service debt. The Company therefore interprets free cash flow trends as a measure of its liquidity.
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