Date: April 24, 2006
Source: PR Newswire
Revenue rises 15.6% to $190.2 million - Reports internal growth of 8.1% - Repurchases over $80 million of common stock
Waste Connections, Inc. (NYSE: WCN) today announced its results for the first quarter 2006. Revenue totaled $190.2 million, a 15.6% increase over revenue of $164.4 million in the year ago period. Operating income was $39.2 million versus operating income of $38.7 million in the first quarter of 2005.
Net income in the quarter was $15.7 million, or $0.33 per share on a diluted basis of 47.6 million shares. Net income and earnings per share were $18.4 million and $0.39, respectively, each a non-GAAP measure, excluding a $4.2 million non-cash, pre-tax expense ($2.6 million net of taxes) for the write-off of unamortized debt issuance costs associated with convertible notes that have been called for redemption. Stock-based compensation costs in the quarter were $0.6 million ($0.4 million net of taxes), or approximately $0.01 per share. In the year ago period, the Company reported income from continuing operations of $19.6 million and diluted earnings per share from continuing operations of $0.40.
Ronald J. Mittelstaedt, Chairman and Chief Executive Officer, said, "We are very pleased with our performance in the quarter. Pricing growth accelerated to 4.8% and volume growth increased to 3.8%, each above the high end of our expectations for the full year. Operating income as a percentage of revenue was 20.6%, consistent with our guidance for the quarter. As we have previously communicated, operating margins for the year reflect increased fuel costs resulting from the expiration of our fixed-price fuel supply contract at the end of 2005, increased equity compensation costs, and lower margin acquisitions completed since the year ago period. During the quarter, we repurchased more than $80 million of common stock, putting us well on our way to repurchasing at least $100 million during the year."
Waste Connections will be hosting a conference call related to first quarter earnings and second quarter outlook on April 25th at 8:30 A.M. Eastern Time. The call will be broadcast live over the Internet at www.streetevents.com and through a link on the Company's web site at www.wasteconnections.com. A playback of the call will be available at both of these sites.
For non-GAAP measures, see accompanying Non-GAAP Reconciliation Schedule.
In the second quarter of 2005, Waste Connections classified as discontinued operations the results of certain operations in Utah and California that were exited during that quarter. Results for the first quarter of 2005 have been reclassified to present the results for these operations as discontinued operations.
In accordance with the Company's adoption of SFAS 123R at the beginning of the first quarter of 2006, excess tax benefits on the exercise of stock options, which totaled $3.4 million in the first quarter of 2006, are now classified as a cash flow from financing activities, rather than as a cash flow from operating activities as classified in prior year periods. This requirement will reduce the amounts recorded as net cash provided by operating activities, and will increase the amount recorded as net cash provided by financing activities. In order to improve comparability to prior periods, the Company's definition of free cash flow, a non-GAAP financial measure, has been expanded to include the excess tax benefits on the exercise of stock options. Total cash flow will remain unchanged from what would have been reported under prior accounting rules.
Waste Connections, Inc. is an integrated solid waste services company that provides solid waste collection, transfer, disposal and recycling services in mostly secondary markets in the Western and Southern U.S. The Company serves more than one million residential, commercial and industrial customers from a network of operations in 23 states. The Company also provides intermodal services for the movement of containers in the Pacific Northwest. Waste Connections, Inc. was founded in September 1997 and is headquartered in Folsom, California.
For more information, visit the Waste Connections web site at www.wasteconnections.com. Copies of financial literature, including this release, are available on the Waste Connections web site or through contacting us directly at (916) 608-8200.