Date: February 27, 2008
Source: Waste Services, Inc.
- Record Revenue and Adjusted EBITDA.
- Record Adjusted EBITDA margins.
- Internal revenue growth from price and volume for the quarter of 6.8%.
- Record pre-tax income and net income from continuing operations.
Waste Services, Inc. (Nasdaq: WSII) today announced financial results for the three months ended December 31, 2007. The quarter was highlighted by strong top line growth and continued margin expansion:
-- Revenue growth of 30.5% to $130.1 million compared to $99.7 million in 2006.
-- Internal revenue growth was 6.8%, made up of 4.3% price, 1.4% fuel surcharge, 1.1% volume.
-- Acquisitions net of divestitures added $21.0 million of revenue or 21.1%, while the net expiration of municipal contracts accounted for a $4.3 million reduction or 4.3%.
-- Operating income and Adjusted EBITDA expanded to $13.8 million and $28.9 million with margins of 10.6% and 22.2%, respectively.
The December 31, 2007 fiscal year results are highlighted by:
-- Revenue growth of 24.8% to $488.3 million compared to $391.4 million in 2006.
-- Internal revenue growth was 5.5%, made up of 4.7% price, 0.5% fuel surcharge, 0.3% volume.
-- Acquisitions net of divestitures added $72.8 million of revenue or 18.6%, while the expiration of low margin municipal contracts net of new higher margin municipal contracts accounted for a $8.9 million reduction or 2.3%.
-- Operating income and Adjusted EBITDA expanded to $44.7 million and $110.3 million with margins improving to 9.2% and 22.6%, respectively.
David Sutherland-Yoest, Waste Services Chairman and Chief Executive Officer, stated, "The company continues to reach new important milestones, reporting record financial results for the 16th consecutive quarter and positive free cash flow and record operating income and EBITDA for the full year. Our strong internal revenue growth results demonstrate the power of our assets to grow revenue throughout our operational footprint. We look forward to continued success as our prior achievements and investments begin to reflect in our operating results in 2008 and beyond."
2008 Outlook
Waste Services also announced today the following guidance for 2008:
-- Revenue in the range of $480 million to $500 million (excluding Jacksonville; as compared to pro forma 2007 revenue of $461 million).
-- Organic revenue growth of 5% to 6%.
-- EBITDA in the range of $110 million to $115 million (excluding Jacksonville; as compared to pro forma 2007 EBITDA of $96 million).
-- Adjusted EBITDA in the range of $115 million to $120 million.
-- Operating income in the range of $55 million to $65 million.
-- Pre-tax income in the range of $20 million to $25 million.
-- Normalized EPS(1) from continuing operations in the range of $0.30 to $0.35 per share.
-- Reported EPS from continuing operations in the range of $0.10 to $0.15 per share.
-- Capital spending is expected to be in the range of $55 million to $60 million.
This guidance assumes: (i) the completion of the Jacksonville divestiture and no further acquisitions or divestitures, (ii) no significant deterioration in economic conditions in Florida or Canada, and (iii) no significant change in exchange rates. Guidance will be adjusted upon announcement of any unusual or non-recurring items as the year progresses.
(1) Normalized EPS is defined as earnings per share as adjusted to reflect the average statutory income tax rate estimated at 36%.
Reconciliation of Non-GAAP Measures:
The following table reconciles the differences between net loss, as
determined under US GAAP, and EBITDA from continuing operations, a non-GAAP
financial measure (in thousands) (unaudited):
For The Three Months For The Year
Ended December 31, Ended December 31,
2007 2006 2007 2006
Net income (loss) from
continuing operations $ 143 $(9,611) $(10,377) $(46,749)
Income tax provision 3,819 4,435 14,437 12,820
Preferred stock dividends and
amortization of issue costs - 4,860 - 19,653
Interest expense 9,861 8,104 40,679 30,981
Depreciation, depletion and
amortization 14,809 11,491 58,044 41,185
EBITDA from continuing
operations (1) $28,632 $19,279 $ 102,783 $57,890
The following table reconciles the differences between EBITDA and
Adjusted EBITDA, as defined in our credit agreement, for the three and
twelve months ended December 30, 2007 and 2006 (in thousands) (unaudited):
For The Three Months For The Year
Ended December 31, Ended December 31,
2007 2006 2007 2006
EBITDA from continuing
operations (1) $28,632 $19,279 $102,783 $57,890
Adjustments to EBITDA from
continuing operations (as
defined per credit agreement):
Non-cash items (2) 418 (242) 3,131 10,276
Other excludable expenses (3) (130) 2,037 4,347 7,369
Adjusted EBITDA from continuing
operations (1) $28,920 $21,074 $110,261 $75,535
(2) EBITDA from continuing operations and EBITDA from continuing
operations as defined in our credit agreement ("Adjusted EBITDA from
continuing operations") are non-GAAP measures used by management to
measure performance. We also believe that EBITDA from continuing
operations and Adjusted EBITDA from continuing operations may be used
by certain investors to analyze and compare our operating performance
between accounting periods and against the operating results of other
companies that have different financing and capital structures or tax
rates and to measure our ability to service our debt. In addition,
management uses EBITDA from continuing operations, among other things,
as an internal performance measure. Our lenders also use Adjusted
EBITDA from continuing operations to measure our ability to service
and/or incur additional indebtedness under our credit facilities.
However, EBITDA from continuing operations and Adjusted EBITDA from
continuing operations should not be considered in isolation or as a
substitute for net income, cash flows or other financial statement
data prepared in accordance with US GAAP or as a measure of our
performance, profitability or liquidity. EBITDA from continuing
operations and Adjusted EBITDA from continuing operations are not
calculated under US GAAP and therefore are not necessarily comparable
to similarly titled measures of other companies.
(3) Non-cash adjustments primarily include impairment of deferred
acquisition costs, stock-based compensation expense and gains and
losses on foreign exchange and asset sales.
(4) Other excludable expenses adjustments include professional fees for
certain litigation, severance and other non-recurring costs.
We will host an investor and analyst conference call on Thursday, February 28, 2008 at 8:30 a.m. (EST) to discuss the results of today's earnings announcement. If you wish to participate in this call, please phone 800-901-5231 (US and Canada) or 617-786-2961 (International) and enter passcode number 88969942. To hear a web cast of the call over the Internet, access the Home page of our website at www.wasteservicesinc.com. A post-view of the call will be available until March 13, 2008 by phoning 888-286-8010 (US and Canada) or 617-801-6888 (International) and entering passcode number 74513469. The web cast will also be available on our website.
Safe Harbor for Forward-Looking Statements
Certain matters discussed in this press release are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements describe the company's future plans, objectives and goals. These forward- looking statements involve risks and uncertainties which could cause actual results to differ materially from the plans, objectives and goals set forth in this press release. Factors which could materially affect such forward- looking statements can be found in the company's periodic reports filed with the Securities and Exchange Commission, including risk factors detailed in the company's Form 10-K for the year ended December 31, 2007. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements.
The forward-looking statements made in this press release are only made as of the date hereof and Waste Services undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.
This release does not constitute an offer to sell or the solicitation of any offer to buy any securities. The company's securities may not be offered or sold in the United States absent a registration or applicable exemption from registration requirements under applicable state and federal securities laws.
Waste Services, Inc., a Delaware corporation, is a multi-regional, integrated solid waste services company that provides collection, transfer, disposal and recycling services in the United States and Canada. The company's website is www.wasteservicesinc.com. Information on the company's website does not form part of this press release.
WASTE SERVICES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended Year Ended
December 31, December 31,
2007 2006 2007 2006
Revenue $130,136 $99,706 $488,294 $391,409
Operating and other expenses:
Cost of operations (exclusive
of depreciation, depletion
and amortization) 84,262 66,228 319,740 267,601
Selling, general and
administrative expense
(exclusive of depreciation,
depletion and amortization) 17,373 14,280 65,852 58,362
Deferred acquisition costs - - - 5,612
Depreciation, depletion and
amortization 14,809 11,491 58,044 41,185
Foreign exchange loss (gain)
and other (131) (81) (81) 1,944
Income from operations 13,823 7,788 44,739 16,705
Interest expense 9,861 8,104 40,679 30,981
Cumulative mandatorily redeemable
preferred stock dividends and
amortization of issue costs - 4,860 - 19,653
Income (loss) from continuing
operations before income taxes 3,962 (5,176) 4,060 (33,929)
Income tax provision 3,819 4,435 14,437 12,820
Net income (loss) from continuing
operations 143 (9,611) (10,377) (46,749)
Net loss from discontinued
operations, net of tax of $0 (155) (485) (1,130) (1,782)
Loss on sale of discontinued
operations, net of tax of $0 - - (11,607) -
Net loss $(12) $(10,096) $(23,114) $(48,531)
Basic and diluted loss per share:
Income (loss) per share -
continuing operations $- $(0.25) $(0.22) $(1.32)
Loss per share -
discontinued operations - (0.02) (0.28) (0.05)
Basic and diluted loss per share $- $(0.27) $(0.50) $(1.37)
Weighted average common shares
outstanding
Basic 46,075 37,788 46,007 35,354
Diluted 46,163 37,788 46,007 35,354
WASTE SERVICES, INC.
SUPPLEMENTAL UNAUDITED BALANCE SHEET AND CASH FLOW DATA
(In thousands)
Balance Sheet Data: December 31, December 31,
2007 2006
Cash $20,706 $8,532
Current assets $99,406 $71,119
Total assets $938,488 $865,063
Current liabilities $95,375 $86,358
Debt:
Senior secured credit facilities:
Revolver $- $-
Term loan 273,910 245,260
Senior subordinated notes 160,000 160,000
Other notes 10,530 4,828
Total debt $444,440 $410,088
Shareholders' equity $350,595 $339,357
Cash Flow Data: Year Ended December 31,
2007 2006
Cash flows provided by continuing
operations $61,760 $34,005
Cash flows used in investing activities
for continuing operations $82,925 $144,676
Cash flows from financing activities of
continuing operations $33,608 $109,804
Capital expenditures from continuing
operations $60,949 $44,662
WASTE SERVICES, INC.
SUPPLEMENTAL UNAUDITED GROWTH RATES AND COUNTRY DATA
(In thousands)
Waste Services, Inc.
Revenue Growth
For The Quarter Ended December 31, 2007
(in thousands)
Total Revenue, December 31, 2006 $99,706
Impact on revenue from changes in:
Price 5,695 5.7%
Volume 1,060 1.1%
Acquisition / Disposition 21,021 21.1%
Gain / Loss of Contracts (4,310) -4.3%
Other (810) -0.8%
Foreign currency impact 7,774 7.8%
Total Revenue, December 31, 2007 $130,136
Waste Services, Inc.
Revenue Growth
For The Year Ended December 31, 2007
(in thousands)
Total Revenue, December 31, 2006 $391,409
Impact on revenue from changes in:
Price 20,402 5.2%
Volume 1,211 0.3%
Acquisition / Disposition 72,755 18.6%
Gain / Loss of Contracts (8,875) -2.3%
Other (209) -0.1%
Foreign currency impact 11,601 3.0%
Total Revenue, December 31, 2007 $488,294
COUNTRY DATA
(In thousands)
Three Months Ended December 31, 2007
US Canada Total
Revenue $68,721 100.0% $61,415 100.0% $130,136 100.0%
Operating expenses:
Cost of operations 44,013 64.0% 40,249 65.5% 84,262 64.7%
Selling, general and
administrative
expense 9,027 13.1% 8,346 13.6% 17,373 13.3%
Depreciation,
depletion and
amortization 9,256 13.6% 5,553 9.1% 14,809 11.5%
Foreign exchange
gain and other (67) -0.1% (64) -0.1% (131) -0.1%
Income from continuing
operations $6,492 9.4% $7,331 11.9% $13,823 10.6%
Three Months Ended December 31, 2006
US Canada Total
Revenue $50,441 100.0% $49,265 100.0% $99,706 100.0%
Operating expenses:
Cost of operations 33,229 65.8% 32,999 67.0% 66,228 66.4%
Selling, general and
administrative
expense 8,331 16.5% 5,949 12.1% 14,280 14.3%
Depreciation,
depletion and
amortization 6,827 13.5% 4,664 9.5% 11,491 11.5%
Foreign exchange
(gain) loss and other 416 1.0% (497) -1.0% (81) -0.1%
Income from continuing
operations $1,638 3.2% $6,150 12.5% $7,788 7.8%
WASTE SERVICES, INC.
UNAUDITED COUNTRY DATA- (Continued)
(In thousands)
Year Ended December 31, 2007
US Canada Total
Revenue $266,231 100.0% $222,063 100.0% $488,294 100.0%
Operating expenses:
Cost of operations 172,417 64.8% 147,323 66.3% 319,740 65.5%
Selling, general and
administrative
expense 33,707 12.7% 28,150 12.7% 61,857 12.7%
Severance and
related costs 3,995 1.5% - 0.0% 3,995 0.8%
Depreciation,
depletion and
amortization 38,415 14.4% 19,629 8.8% 58,044 11.9%
Foreign exchange
(gain) loss and other 270 0.1% (351) -0.1% (81) -0.1%
Income from continuing
operations $17,427 6.5% $27,312 12.3% $44,739 9.2%
Year Ended December 31, 2006
US Canada Total
Revenue $203,381 100.0% $188,028 100.0% $391,409 100.0%
Operating expenses:
Cost of operations 139,425 68.6% 128,176 68.2% 267,601 68.4%
Selling, general and
administrative
expense 34,946 17.2% 23,416 12.5% 58,362 14.9%
Deferred acquisition
costs 439 0.2% 5,173 2.8% 5,612 1.4%
Depreciation,
depletion and
amortization 23,803 11.7% 17,382 9.1% 41,185 10.5%
Foreign exchange loss
and other 445 0.2% 1,499 0.8% 1,944 0.5%
Income from continuing
operations $4,323 2.1% $12,382 6.6% $16,705 4.3%
Sign up to receive our free Weekly News Bulletin