Date: October 30, 2007
Source: Waste Services, Inc.
-- Record Revenue and Adjusted EBITDA.
-- Record Adjusted EBITDA margins.
-- Internal revenue growth from price and volume for the quarter of 4.4%.
Waste Services, Inc. today announced financial results for the three months ended September 30, 2007. The quarter was highlighted by strong top line growth and continued margin expansion:
* Revenue growth of 25.9% to $130.6 million compared to $103.7 million in
2006.
* Internal revenue growth was 4.4%, made up of 4.1% price, 0.3% volume.
* Acquisitions net of divestitures added $22.1 million of revenue or
21.3%, while the net expiration of municipal contracts accounted for a
$2.9 million reduction or 2.8%.
* Operating income and Adjusted EBITDA expanded to $9.9 million and $31.2
million with margins of 7.6% and 23.9%, respectively.
David Sutherland-Yoest, Waste Services Chairman and Chief Executive Officer, stated, "We are pleased with our record quarterly results as we continue to execute our strategic initiatives both domestically and in Canada. While certain economic conditions in the Florida housing market continue to be challenging, we are well positioned for earnings and revenue growth both in the U.S. and Canada. Our Canadian based operations continue to exceed expectations and we are well poised to finish the year strongly."
The September 30, 2007 year-to-date results are highlighted by:
* Revenue growth of 22.8% to $358.2 million compared to $291.7 million
in 2006.
* Internal revenue growth was 5.1 %, made up of 5.0% price, 0.1%
volume.
* Acquisitions net of divestitures added $51.7 million of revenue or
17.7%, while the expiration of low margin municipal contracts net of
new higher margin municipal contracts accounted for a $4.6 million
reduction or 1.6%.
* Operating income and Adjusted EBITDA expanded to $30.9 million and
$81.3 million with margins improving to 8.6% and 22.7%, respectively.
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 Nine Months
Ended September 30, Ended September 30,
2007 2006 2007 2006
Net loss from continuing
operations $(4,826) $(8,133) $(10,520) $(37,138)
Income tax provision 4,474 4,045 10,618 8,386
Preferred stock dividends
and amortization of issue
costs - 4,256 - 14,793
Interest expense 10,243 7,996 30,818 22,876
Depreciation, depletion
and amortization 16,143 10,602 43,234 29,694
EBITDA from continuing
operations (1) $26,034 $18,766 $74,150 $38,611
The following table reconciles the differences between EBITDA and Adjusted EBITDA, as defined in our credit agreement, for the three and nine months ended September 30, 2007 and 2006 (in thousands) (unaudited):
For The Three Months For The Nine Months
Ended September 30, Ended September 30,
2007 2006 2007 2006
EBITDA from continuing
operations (1) $26,034 $18,766 $74,150 $38,611
Adjustments to EBITDA from
continuing operations
(as defined per credit
agreement):
Non-cash items (2) 1,949 1,254 2,713 10,518
Other excludable
expenses (3) 3,252 2,002 4,477 5,332
Adjusted EBITDA from
continuing operations (1) $31,235 $22,022 $81,340 $54,461
(1) 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.
(2) Non-cash adjustments primarily include impairment of deferred
acquisition costs, stock-based compensation expense and gains and
losses on foreign exchange and asset sales.
(3) 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 Wednesday, October 31, 2007 at 8:30 a.m. (ET) to discuss the results of today's earnings announcement. If you wish to participate in this call, please phone 866-761- 0749 (US and Canada) or 617-614-2707 (International) and enter passcode number 49978114. 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 November 14, 2007 by phoning 888-286-8010 (US and Canada) or 617-801-6888 (International) and entering passcode number 97716015. 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, 2006. 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 http://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 Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
Revenue $130,605 $103,739 $358,158 $291,703
Operating and other expenses:
Cost of operations
(exclusive of depreciation,
depletion and amortization) 85,346 70,312 235,478 201,373
Selling, general and
administrative expense
(exclusive of depreciation,
depletion and amortization) 18,587 14,753 48,479 44,083
Deferred acquisition costs - - - 5,612
Depreciation, depletion and
amortization 16,143 10,602 43,234 29,694
Foreign exchange loss (gain)
and other 638 (92) 51 2,024
Income from operations 9,891 8,164 30,916 8,917
Interest expense 10,243 7,996 30,818 22,876
Cumulative mandatorily
redeemable preferred stock
dividends and amortization
of issue costs - 4,256 - 14,793
Income (loss) from continuing
operations before income taxes (352) (4,088) 98 (28,752)
Income tax 4,474 4,045 10,618 8,386
Net loss from continuing
operations (4,826) (8,133) (10,520) (37,138)
Net loss from discontinued
operations, net of tax of $0 - (460) (1,130) (1,297)
Loss on sale of discontinued
operations, net of tax of $0 (198) - (11,452) -
Net loss $(5,024) $(8,593) $(23,102) $(38,435)
Basic and diluted loss
per share:
Loss per share -
continuing operations$ (0.11) $(0.23) $(0.23) $(1.08)
Loss per share -
discontinued operations - (0.01) (0.27) (0.03)
Basic and diluted loss
per share $(0.11) $(0.24) $(0.50) $(1.11)
Weighted average common
shares outstanding -
basic and diluted 46,007 36,066 45,984 34,534
"WASTE SERVICES, INC.
SUPPLEMENTAL UNAUDITED BALANCE SHEET AND CASH FLOW DATA
(In thousands)
Balance Sheet Data: September 30, December 31,
2007 2006
Cash $15,998 $8,532
Current assets $97,318 $71,119
Total assets $938,042 $865,063
Current liabilities $98,395 $86,358
Debt:
Senior secured credit facilities:
Revolver $- $-
Term loan 273,910 245,260
Senior subordinated notes 160,000 160,000
Other notes 10,827 4,828
Total debt $444,737 $410,088
Shareholders' equity $349,230 $339,357
Cash Flow Data:
Period Ended September 30,
2007 2006
Cash flows provided by
continuing operations $45,786 $24,700
Cash flows used in
investing activities for
continuing operations $(72,901) $(61,980)
Cash flows from financing
activities of continuing
operations $33,961 $28,608
Capital expenditures from
continuing operations $48,624 $37,007
WASTE SERVICES, INC.
SUPPLEMENTAL UNAUDITED INTERNAL GROWTH RATES AND COUNTRY DATA
(In thousands)
Waste Services, Inc.
Internal Revenue Growth
For The Quarter Ended September 30, 2007
(in thousands)
Total Revenue, September 30, 2006 $103,739
Impact on revenue from changes in:
Price 4,252 4.1%
Volume 327 0.3%
Acquisition / Disposition 22,100 21.3%
Gain / Loss of Contracts (2,933) -2.8%
Other (461) -0.4%
Foreign currency impact 3,581 3.5%
Total Revenue, September 30, 2007 $130,605
Waste Services, Inc.
Internal Revenue Growth
For The Nine Months Ended September 30, 2007
(in thousands)
Total Revenue, September 30, 2006 $291,703
Impact on revenue from changes in:
Price 14,706 5.0%
Volume 240 0.1%
Acquisition / Disposition 51,734 17.7%
Gain / Loss of Contracts (4,558) -1.6%
Other 514 0.2%
Foreign currency impact 3,819 1.3%
Total Revenue, September 30, 2007 $358,158
COUNTRY DATA
(In thousands)
Three Months Ended September 30, 2007
US Canada Total
Revenue $70,616 100.0% $59,989 100.0% $130,605 100.0%
Operating expenses:
Cost of operations 45,701 64.7% 39,645 66.1% 85,346 65.3%
Selling, general and
administrative
expense 7,720 10.9% 6,872 11.5% 14,592 11.2%
Severance and related
costs 3,995 5.7% - 0.0% 3,995 3.1%
Depreciation,
depletion and
amortization 11,004 15.6% 5,139 8.6% 16,143 12.4%
Foreign exchange gain
and other 672 0.9% (34) -0.1% 638 0.4%
Income from continuing
operations $1,524 2.2% $8,367 13.9% $9,891 7.6%
Three Months Ended September 30, 2006
US Canada Total
Revenue $51,910 100.0% $51,829 100.0% $103,739 100.0%
Operating expenses:
Cost of operations 35,122 67.6% 35,190 67.9% 70,312 67.8%
Selling, general and
administrative
expense 9,088 17.5% 5,665 10.9% 14,753 14.2%
Depreciation,
depletion and
amortization 6,103 11.8% 4,499 8.7% 10,602 10.2%
Foreign exchange
(gain) loss and
other (62) -0.1% (30) -0.1% (92) -0.1%
Income from continuing
operations $1,659 3.2% $6,505 12.6% $8,164 7.9%
Nine Months Ended September 30, 2007
US Canada Total
Revenue $197,510 100.0% $160,648 100.0% $358,158 100.0%
Operating expenses:
Cost of operations 128,404 65.0% 107,074 66.7% 235,478 65.7%
Selling, general
and administrative
expense 24,680 12.5% 19,804 12.3% 44,484 12.4%
Severance and
related costs 3,995 2.0% - 0.0% 3,995 1.1%
Depreciation,
depletion and
amortization 29,158 14.8% 14,076 8.8% 43,234 12.1%
Foreign exchange
gain and other 338 0.2% (287) -0.2% 51 0.1%
Income from
continuing
operations $10,935 5.5% $19,981 12.4% $30,916 8.6%
Nine Months Ended September 30, 2006
US Canada Total
Revenue $152,940 100.0% $138,763 100.0% $291,703 100.0%
Operating expenses:
Cost of operations 106,196 69.4% 95,177 68.6% 201,373 69.0%
Selling, general
and administrative
expense 26,616 17.4% 17,467 12.6% 44,083 15.1%
Deferred
acquisition costs 439 0.3% 5,173 3.7% 5,612 1.9%
Depreciation,
depletion and
amortization 16,976 11.1% 12,718 9.2% 29,694 10.2%
Foreign exchange
(gain) loss and
other 28 0.0% 1,996 1.4% 2,024 0.7%
Income (loss) from
continuing
operations $2,685 1.8% $6,232 4.5% $8,917 3.1%
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