Date: May 2, 2006
Source: PR Newswire
Allied Waste Reports First Quarter 2006 Results
Record Internal Revenue Growth of 7.7% Is Driven by Strong Price and Volume
Net Income Increases Despite Rise in Fuel Costs
Q1 2006 EPS Increases to $0.08 From $0.05 in 2005
Allied Waste Industries, Inc. (NYSE: AW), a leading waste services company, today reported financial results for the first quarter ended March 31, 2006. Allied Waste highlighted the following information from its reported financial results:
Diluted earnings per share increased to $0.08 compared to $0.05 for the first quarter 2005;
Internal revenue growth increased 7.7% over the prior year, driven by average price increases of 5.5% and average volume increases of 2.2%;
Operating income increased to $209 million compared to $203 million for the first quarter 2005;
Operating income before depreciation and amortization* increased to $350 million compared to $337 million for the first quarter 2005; and
Cash flow from operations increased to $172 million compared to $87 million for the first quarter 2005.
"Allied Waste's performance in the first quarter demonstrated the continued success of our pricing initiatives, steady volume growth and progress in executing operations effectiveness programs," said John Zillmer, Chairman and Chief Executive Officer. "With the results from the first quarter exceeding our internal projections, we continue to be confident in our full year outlook for 2006."
Revenue for the first quarter ended March 31, 2006 increased by $97 million, or 7.3%, to $1.439 billion from $1.341 billion in the first quarter 2005. The increase in revenue resulted from internal growth of 7.7% reflecting increases in all core lines of business. Core internal revenue growth was comprised of a $69 million, or 5.5%, increase in same store average unit price, which includes a 2.5% increase associated with a fuel recovery fee, and a $27 million, or 2.2%, increase in same-store volumes. Non-core revenue decreased by approximately $1 million, primarily due to an $8 million decrease in recycling revenue offset by a $7 million increase in other revenue.
Operating income for the first quarter 2006 increased to $209 million from $203 million for the first quarter 2005 and operating income before depreciation and amortization* increased to $350 million, from $337 million in the first quarter of 2005. The increase in operating income was driven primarily by price and volume increases that more than compensated for:
cost inflation, including a $17.6 million increase in diesel fuel costs;
increases in subcontractor costs associated with growth in the national accounts business; and
organization development costs including investments in supply chain and market sales strategy development.
Net income for the first quarter increased to $41 million, or $0.08 per share from $25 million, or $0.05 per share, due to improved operating results and lower interest expense offset by increased income tax provision.
Cash flow from operations in the first quarter 2006 increased to $172 million from $87 million in the first quarter 2005. The increase in cash flow from operations was driven primarily by the increase in pre-tax income. During the first quarter 2006, free cash flow* resulted in a net use of $91 million, comparable to the $91 million net use of cash in the first quarter 2005. The net use of cash in 2006 compared to 2005 was comprised of significantly higher cash flow from operations plus a decline in the use of cash from working capital changes, offset by significantly higher capital expenditures. The increase in capital expenditures in 2006 compared to 2005 was due to the capital reinvestment program for 2006 being more heavily weighted toward expenditures in the first half of the year compared to 2005. Total capital expenditures for the first quarter 2006 were $196 million compared to $86 million in the first quarter 2005.
Conference Call to be Held Today at 5:00 p.m. ET
Allied Waste will host a conference call related to the first quarter results on Tuesday, May 2nd at 5:00 p.m. ET. The call will be broadcast live over the Internet on the Company's website: www.alliedwaste.com. A replay of the call will be available on the site after the call. In addition, the Company has filed supplemental data on Form 8-K that is accessible on the Company's website or through the SEC EDGAR System.
More information: www.alliedwaste.com.
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