Date: October 28, 2009
Source: WCA Waste Corporation
WCA Waste Corporation (Nasdaq: WCAA) announced today financial results for the third quarter ended September 30, 2009. Revenue for the quarter was $49.5 million compared to $52.8 million for the same period last year. Operating income was $7.0 million or 14.1% of revenue compared to $7.0 million or 13.2% of revenue for the comparable quarter last year. For the quarter ended September 30, 2009, net loss available to common stockholders was $0.3 million, or $0.02 per share. Excluding the non-operational impact of the interest rate swap and the non-cash tax impact of vested restricted shares, net income available to common stockholders would have been $0.4 million, or $0.02 per share, for the three months ended September 30, 2009. For the same period last year, the Company reported a net loss available to common stockholders of $0.3 million, or $0.02 per share. Excluding the non-operational impact of the interest rate swap and the non-cash tax impact of vested restricted shares, net income available to common shareholders would have been $0.4 million, or $0.02 per share, for the three months ended September 30, 2008. Our adjusted EBITDA was $13.7 million, or 27.7% of revenue, for the third quarter of 2009 as compared to $13.8 million, or 26.2% of revenue, for the same period in 2008. Please refer to the attached tables below for a reconciliation of net loss available to common stockholders to adjusted net income (loss) available to common stockholders and a reconciliation of net loss available to common stockholders to adjusted EBITDA.
For the nine months ended September 30, 2009, revenue was $147.9 million compared to $154.4 million for the same period last year. Implementation of cost reduction measures combined with lower fuel costs increased operating income by 8.8% over the same period last year. Operating income was $20.2 million, or 13.7% of revenue, for the nine months ended September 30, 2009 compared to $18.6 million, or 12.0% of revenue, for the nine months ended September 30, 2008.
Tom Fatjo, Chairman of WCA Waste Corporation, stated, "We continue to be pleased with our operating performance. We achieved higher operating and adjusted EBITDA margins this quarter despite lower revenues. The Company has recently been awarded several new city contracts and we are in various stages of negotiations on acquisitions. There continue to be numerous opportunities in our existing footprint and new markets."
WCA Waste Corporation is an integrated company engaged in the transportation, processing and disposal of non-hazardous solid waste. The Company's operations currently consist of 24 landfills, 23 transfer stations/material recovery facilities and 26 collection operations located throughout Alabama, Arkansas, Colorado, Florida, Kansas, Missouri, New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee and Texas. The Company's common stock is traded on the NASDAQ Global Market under the symbol "WCAA."
RISK FACTORS AND CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS
This press release and other communications, such as conference calls, presentations, statements in public filings, other press releases, include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. Forward-looking statements generally include discussions and descriptions other than historical information. The forward-looking statements made herein are only made as of the date of this press release and we undertake no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.
Our results will be subject to a number of operational and other risks, including the following: general economic conditions have impacted and may continue to impact our business; we may not be successful in expanding the permitted capacity of our current or future landfills; our business is capital intensive, requiring ongoing cash outlays that may strain or consume our available capital; increases in the costs of disposal, labor and fuel could reduce operating margins; increases in costs of insurance or failure to maintain full coverage could reduce operating income; we may be unable to obtain financial assurances necessary for our operations; we are subject to environmental and safety laws, which restrict our operations and increase our costs, and may impose significant unforeseen liabilities; we compete with large companies and municipalities with greater financial and operational resources, and we also compete with alternatives to landfill disposal; covenants in our credit facilities and the instruments governing our other indebtedness may limit our ability to grow our business and make capital expenditures; changes in interest rates may affect our results of operations; a downturn in U.S. economic conditions or the economic conditions in our markets may have an adverse impact on our business and results of operations; our success depends on key members of our senior management, the loss of any of whom could disrupt our customer and business relationships and our operations; and we are subject to risks with respect to our acquisition activities.
We describe these and other risks in greater detail in the sections entitled "Risk Factors" and "Cautionary Statement about Forward-Looking Statements" included in our Form 10-K for the year ended December 31, 2008, to which we refer you for additional information.
WCA --- 3rd Quarter 2009 Earnings Release Information
WCA Waste Corporation
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
2009 2008 2009 2008
-------- -------- -------- --------
Revenue $ 49,546 $ 52,782 $147,910 $154,365
Expenses:
Cost of services 32,786 36,060 97,907 106,694
Depreciation and
amortization 6,714 6,738 20,087 20,138
Non-recurring
expenses associated
with a terminated
transaction -- -- 259 --
General and
administrative 3,060 3,019 9,455 8,962
-------- -------- -------- --------
42,560 45,817 127,708 135,794
-------- -------- -------- --------
Operating income 6,986 6,965 20,202 18,571
Other income (expense):
Interest expense,
net (4,511) (4,642) (13,525) (13,785)
Impact of interest
rate swap (905) (962) (1,748) (1,869)
Other 46 127 91 (105)
-------- -------- -------- --------
(5,370) (5,477) (15,182) (15,759)
-------- -------- -------- --------
Income before income
taxes 1,616 1,488 5,020 2,812
Income tax provision (790) (768) (2,797) (1,568)
-------- -------- -------- --------
Net income 826 720 2,223 1,244
Accrued payment-in-kind
dividend on preferred
stock (1,076) (1,025) (3,192) (3,041)
-------- -------- -------- --------
Net loss available to
common stockholders $ (250) $ (305) $ (969) $ (1,797)
======== ======== ======== ========
PER SHARE DATA (Basic
and diluted):
Net loss available to
common stockholders
-- Basic $ (0.02) $ (0.02) $ (0.06) $ (0.11)
======== ======== ======== ========
-- Diluted $ (0.02) $ (0.02) $ (0.06) $ (0.11)
======== ======== ======== ========
WEIGHTED AVERAGE SHARES
OUTSTANDING (Basic) 15,850 16,248 15,801 16,425
-------- -------- -------- --------
WEIGHTED AVERAGE SHARES
OUTSTANDING (Diluted) 15,850 16,248 15,801 16,425
-------- -------- -------- --------
Non-GAAP Financial Measures
--------------------------------------------------------------------
Our management evaluates our performance based on non-GAAP
measures, of which the primary performance measure is adjusted
EBITDA. EBITDA, as commonly defined, refers to earnings before
interest, taxes, depreciation and amortization. Our adjusted
EBITDA consists of earnings (net income or loss) available to
common stockholders before preferred stock dividend, interest
expense (including write-off of deferred financing costs and debt
discount), impact of interest rate swap agreements, income tax
expense, depreciation and amortization, impairment of goodwill,
net (gain) loss on early disposition of notes receivable/payable,
and non-recurring expenses associated with a terminated
transaction. We also use these same measures when evaluating
potential acquisition candidates.
We believe adjusted EBITDA is useful to an investor in evaluating
our operating performance because:
* it is widely used by investors in our industry to measure a
company's operating performance without regard to items such as
interest expense, depreciation and amortization, which can vary
substantially from company to company depending upon accounting
methods and book value of assets, financing methods, capital
structure and the method by which assets were acquired;
* it helps investors more meaningfully evaluate and compare the
results of our operations from period to period by removing the
impact of our capital structure (primarily interest charges from
our outstanding debt and the impact of our interest rate swap
agreements and payment-in-kind dividend) and asset base
(primarily depreciation and amortization of our landfills and
vehicles) from our operating results; and
* it helps investors identify items that are within our operational
control. Depreciation charges, while a component of operating
income, are fixed at the time of the asset purchase in accordance
with the depreciable lives of the related asset and as such are
not a directly controllable period operating charge.
Our management uses adjusted EBITDA:
* as a measure of operating performance because it assists us in
comparing our performance on a consistent basis as it removes the
impact of our capital structure and asset base from our operating
results;
* as one method to estimate a purchase price (often expressed as a
multiple of EBITDA or adjusted EBITDA) for solid waste companies
we intend to acquire. The appropriate EBITDA or adjusted EBITDA
multiple will vary from acquisition to acquisition depending on
factors such as the size of the operation, the type of operation,
the anticipated growth in the market, the strategic location of
the operation in its market as well as other considerations;
* in presentations to our board of directors to enable them to have
the same consistent measurement basis of operating performance
used by management;
* as a measure for planning and forecasting overall expectations
and for evaluating actual results against such expectations;
* in evaluations of field operations since it represents
operational performance and takes into account financial measures
within the control of the field operating units;
* as a component of incentive cash bonuses paid to our executive
officers and other employees;
* to assess compliance with financial ratios and covenants included
in our credit agreements; and
* in communications with investors, lenders, and others concerning
our financial performance.
The following presents a reconciliation of net loss available to
common stockholders to our adjusted EBITDA (in thousands):
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
2009 2008 2009 2008
-------- -------- -------- --------
Net loss available to
common stockholders $ (250) $ (305) $ (969) $ (1,797)
Accrued payment-in-kind
dividend on preferred
stock 1,076 1,025 3,192 3,041
Depreciation and
amortization 6,714 6,738 20,087 20,138
Interest expense, net 4,511 4,642 13,525 13,785
Impact of interest
rate swap 905 962 1,748 1,869
Income tax provision 790 768 2,797 1,568
Non-recurring expenses
associated with a
terminated transaction -- -- 259 --
Loss on early
disposition of note
receivable -- -- -- 326
-------- -------- -------- --------
Adjusted EBITDA $ 13,746 $ 13,830 $ 40,639 $ 38,930
======== ======== ======== ========
Adjusted EBITDA as a
percentage of revenue 27.7% 26.2% 27.5% 25.2%
The following table presents a reconciliation of net loss available to common stockholders to adjusted net income (loss) available to common stockholders to exclude impact of interest rate swap agreements, non-recurring expenses associated with a terminated transaction, loss on early disposition of note receivable, and tax impact of vested restricted shares (in thousands, except per share amounts). Management believes that this non-GAAP measure is useful to an investor because the excluded items are not representative of our on-going operational performance. Per share information of the adjusted net income (loss) available to common stockholders is also shown below:
Adjusted net income (loss) available to common stockholders to exclude impact of interest rate swap agreements, non-recurring expenses associated with a terminated transaction, loss on early disposition of note receivable, tax impact of vested restricted shares:
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
2009 2008 2009 2008
-------- -------- -------- --------
Net loss available to
common stockholders $ (250) $ (305) $ (969) $ (1,797)
Impact of interest
rate swap, net of tax 596 621 1,100 1,155
Non-recurring expenses
associated with a
terminated transaction,
net of tax -- -- 157 --
Loss on early
disposition of note
receivable, net of
tax -- -- -- 194
Tax impact of vested
restricted shares 9 51 479 209
-------- -------- -------- --------
Adjusted net income
(loss) available to
common stockholders $ 355 $ 367 $ 767 $ (239)
======== ======== ======== ========
PER SHARE DATA (Basic
and diluted):
Net loss available to
common stockholders $ (0.02) $ (0.02) $ (0.06) $ (0.11)
Impact of interest
rate swap, net of tax 0.04 0.04 0.07 0.07
Non-recurring expenses
associated with a
terminated
transaction, net of
tax -- -- 0.01 --
Loss on early
disposition of note
receivable, net of
tax -- -- -- 0.01
Tax impact of vested
restricted shares 0.00 0.00 0.03 0.01
-------- -------- -------- --------
Adjusted net income
(loss) available to
common stockholders
to exclude impact of
interest rate swap
agreements,
non-recurring expenses
associated with a
terminated
transaction, loss on
early disposition of
note receivable, tax
impact of vested
restricted shares:
-- Basic $ 0.02 $ 0.02 $ 0.05 $ (0.02)
======== ======== ======== ========
-- Diluted $ 0.02 $ 0.02 $ 0.05 $ (0.02)
======== ======== ======== ========
WEIGHTED AVERAGE SHARES
OUTSTANDING (Basic) 15,850 16,248 15,801 16,425
-------- -------- -------- --------
WEIGHTED AVERAGE SHARES
OUTSTANDING (Diluted) 16,036 16,399 15,897 16,425
-------- -------- -------- --------
These non-GAAP measures may not be comparable to similarly titled
measures employed by other companies and are not measures of
performance calculated in accordance with GAAP. They should not
be considered in isolation or as substitutes for operating
income, net income or loss, cash flows provided by operating,
investing and financing activities, or other income or cash flow
statement data prepared in accordance with GAAP.
Supplemental Disclosures
---------------------------------------------------------------------
(Dollars in millions unless otherwise indicated)
Nine Months Ended Nine Months Ended
September 30, September 30,
2009 2008
------------------- -------------------
Revenue Breakdown:
Collection $ 95.3 54.2% $ 96.8 51.6%
Disposal 53.2 30.3% 55.7 29.7%
Transfer 20.5 11.6% 23.4 12.5%
Other 6.8 3.9% 11.7 6.2%
-------- -------- -------- --------
Total 175.8 100.0% 187.6 100.0%
Intercompany
eliminations (27.9) (33.2)
-------- -------- -------- --------
Total reported
revenue $ 147.9 $ 154.4
======== ========
Internalization of
Disposal:
Nine months ended
September 30, 2009 68.5%
---------------------------------------------------------------------
Three Months Ended Nine Months Ended
September 30, September 30,
2009 vs. 2008 2009 vs. 2008
------------------- --------------------
Revenue Growth
(Decline):
Volume $ (2.8) -5.3%(a) $ (10.1) -6.5%(a)
Price 0.0 -0.1%(a) 3.1 2.0%(a)
Fuel surcharge (1.9) -3.6%(a) (4.0) -2.6%(a)
Acquisitions 1.5 2.9%(a) 4.5 2.9%(a)
-------- -------- -------- --------
Total revenue
growth
(decline) $ (3.2) -6.1%(a) $ (6.5) -4.2%(a)
======== ========
(a) Percentages are calculated based on dollar amounts rounded in
thousands.
---------------------------------------------------------------------
September 30, 2009
--------------------
Debt-to-Capitalization:
Long-term debt including current maturities $ 201.0
Total equity including preferred stock 142.9
-------
Total capitalization $ 343.9
=======
Debt-to-total
capitalization 58.5%
Net Debt-to-Capitalization:
Long-term debt including current maturities $ 201.0
Cash on hand (7.5)
-------
Net debt 193.5
Total equity including preferred stock 142.9
-------
Total capitalization $ 336.4
=======
Net debt-to-total capitalization 57.5%
For more information, contact:
WCA Waste Corporation
Tommy Fatjo
713-292-2400
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