Date: April 22, 2008
Source: Waste Services, Inc.
Record first quarter EBITDA.
Record first quarter EBITDA margin.
Record pre-tax income and net income from continuing operations.
EPS from continuing operations of $0.12.
Waste Services, Inc. (Nasdaq: WSII) today announced financial results for the three months ended March 31, 2008. The quarter was highlighted by strong top line growth and continued margin expansion:
Revenue growth of 22.7% to $116.6 million compared to $95.0 million in 2007.
Internal revenue growth was 0.8%, made up of 3.9% price, 1.9% fuel surcharge, (5.0)% volume.
Acquisitions net of divestitures added $18.2 million of revenue or 19.1%, while the net expiration of municipal contracts accounted for a $3.8 million reduction or 4.0%.
Operating income and Adjusted EBITDA expanded to $12.1 million and $24.6 million with margins of 10.4% and 21.1%, respectively.
David Sutherland-Yoest, Waste Services Chairman and Chief Executive Officer, stated, "The company has completed another successful quarter of increasing EBITDA and EBITDA margins. We have also reduced debt, improved intrinsic shareholder value, and produced positive earnings per share both on a reported and normalized basis. We are happy to report that pricing remains strong in the current environment and all of our regions are on track to meet expectations going into our seasonally strong second quarter."
Waste Services confirmed the following guidance for 2008:
Revenue in the range of $480 million to $500 million.
Organic revenue growth is expected to be from 3% to 4%.
EBITDA in the range of $110 million to $115 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.
Capital spending is expected to be in the range of $55 million to $60 million.
This guidance assumes: (i) no significant deterioration in economic conditions in Florida or Canada, and (ii) 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%.
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):
Reconciliation of Non-GAAP Measures: For The Three Months Ended March 31, 2008 2007 Net income (loss) from continuing operations $5,278 $(4,243) Income tax (benefit) provision (3,433) 1,364 Interest expense 10,238 9,745 Depreciation, depletion and amortization 11,790 11,358 EBITDA from continuing operations (1) $23,873 $18,224
The following table reconciles the differences between EBITDA and Adjusted EBITDA, as defined in our credit agreement, for the three months ended March 31, 2008 and 2007 (in thousands) (unaudited):
For The Three Months Ended March 31, 2008 2007 EBITDA from continuing operations (1) $23,873 $18,224 Adjustments to EBITDA from continuing operations (as defined per credit agreement): Non-cash items (2) 718 325 Other excludable expenses (3) - 1,225 Adjusted EBITDA from continuing operations (1) $24,591 $19,774 (1) EBITDA from continuing operations and Adjusted EBITDA from continuing operations as defined in our credit agreement ("Adjusted EBITDA") 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, April 23, 2008 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 866-713-8565 (US and Canada) or 617-597-5324 (International) and enter passcode number 26455361. 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 May 7, 2008 by phoning 888-286-8010 (US and Canada) or 617-801-6888 (International) and entering passcode number 23519314. 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 March 31, 2008 2007 Revenue $116,609 $94,999 Operating and other expenses: Cost of operations (exclusive of depreciation, depletion and amortization) 76,544 62,767 Selling, general and administrative expense (exclusive of depreciation, depletion and amortization) 16,365 14,431 Depreciation, depletion and amortization 11,790 11,358 Foreign exchange gain and other (173) (423) Income from operations 12,083 6,866 Interest expense 10,238 9,745 Income (loss) from continuing operations before income taxes 1,845 (2,879) Income tax (benefit) provision (3,433) 1,364 Net income (loss) from continuing operations 5,278 (4,243) Net income from discontinued operations, net of tax provision of $301 and $2 for the three months ended March 31, 2008 and 2007, respectively 461 3 Gain on sale of discontinued operations, net of tax provision of $4,549 and $371 for the three months ended March 31, 2008 and 2007, respectively 6,969 567 Net income (loss) $12,708 $(3,673) Basic and diluted earnings (loss) per share: Earnings (loss) per share - continuing operations $0.12 $(0.09) Earnings per share - discontinued operations 0.16 0.01 Basic and diluted earnings (loss) per share $0.28 $(0.08) Weighted average common shares outstanding Basic 46,075 45,972 Diluted 46,093 45,972 WASTE SERVICES, INC. SUPPLEMENTAL UNAUDITED BALANCE SHEET AND CASH FLOW DATA (In thousands) Balance Sheet Data: March 31, December 31, 2008 2007 Cash $32,286 $20,706 Current assets $101,664 $99,406 Total assets $892,404 $938,488 Current liabilities $88,170 $95,375 Debt: Senior secured credit facilities: Revolver $- $- Term loan 231,410 273,910 Senior subordinated notes 160,000 160,000 Other notes 10,228 10,530 Total debt $401,638 $444,440 Shareholders' equity $356,883 $350,595 Cash Flow Data: Period Ended March 31, 2008 2007 Cash flows provided by continuing operations $8,334 $8,954 Cash flows provided by (used in) investing activities for continuing operations $45,209 $(34,221) Cash flows provided by (used in) financing activities of continuing operations $(42,859) $23,687 Capital expenditures from continuing operations $10,407 $7,403 WASTE SERVICES, INC. SUPPLEMENTAL UNAUDITED GROWTH RATES AND COUNTRY DATA (In thousands) Waste Services, Inc. Revenue Growth For The Quarter Ended March 31, 2008 (in thousands) Total Revenue, March 31, 2007 $94,999 Impact on revenue from changes in: Price 5,489 5.8% Volume (4,791) -5.0% Acquisition / Disposition 18,181 19.1% Gain / Loss of Contracts (3,822) -4.0% Other (1,505) -1.6% Foreign currency impact 8,058 8.5% Total Revenue, March 31, 2008 $116,609 COUNTRY DATA (In thousands) Three Months Ended March 31, 2008 US Canada Total Revenue $60,090 100.0% $56,519 100.0% $116,609 100.0% Operating expenses: Cost of operations 38,916 64.8% 37,628 66.6% 76,544 65.6% Selling, general and administrative expense 8,100 13.5% 8,265 14.6% 16,365 14.0% Depreciation, depletion and amortization 6,847 11.4% 4,943 8.8% 11,790 10.1% Foreign exchange (gain) loss and other (200) -0.4% 27 0.0% (173) -0.1% Income from continuing operations $6,427 10.7% $5,656 10.0% $12,083 10.4% Three Months Ended March 31, 2007 US Canada Total Revenue $50,198 100.0% $44,801 100.0% $94,999 100.0% Operating expenses: Cost of operations 31,935 63.6% 30,832 68.8% 62,767 66.1% Selling, general and administrative expense 8,128 16.2% 6,303 14.1% 14,431 15.2% Depreciation, depletion and amortization 7,390 14.7% 3,968 8.9% 11,358 12.0% Foreign exchange gain and other (208) -0.4% (215) -0.5% (423) -0.5% Income from continuing operations $2,953 5.9% $3,913 8.7% $6,866 7.2%
For more information, contact:
Edwin D. Johnson
Executive Vice President and Chief Financial Officer
Waste Services, Inc.