Weekly News Bulletin: Jul. 30-Aug. 5, 2008


Republic Adopts Poison Pill Defense Against Waste Management

Republic Services adopted a so-called "poison pill" measure apparently intended to thwart Waste Management's takeover attempt. Addressing what they called "disruptive and coercive" acquisition tactics, Republic's board of directors adopted a measure that penalizes purchasers of more than 10 percent of the common stock without board approval. However, the board did make an exception for Cascade Investment LLC, Microsoft Chief Executive Bill Gates' investment vehicle, and the Bill & Melinda Gates Foundation Trust which already own 15 percent. They have permission to acquire up to 20 percent. Waste Management recently affirmed its intent to acquire Republic despite these actions. On July 24, Waste Management filed papers seeking federal approval of its proposed $6.2 billion takeover of Republic...Read More »



Waste Management Will Not Rule Out Hostile Bid for Republic

Without giving specific details, Waste Management reiterated its offer to purchase Republic Services and would not rule out the possibilities of a new offer or hostile takeover. After Republic rejected its $34-per-share ($6.2 billion) all-cash purchase offer, Waste Management filed the necessary Notification and Report Form under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976 in order to purchase a controlling interest through transactions on the market. Waste Management also said that it is in the process of notifying certain states' attorneys general of its HSR filing and of its intent to purchase Republic Services' stock. In response, Republic issued a statement emphasizing that it plans to proceed with its proposed merger with Allied Waste Industries, and that the firm "continues to believe that the merger between Republic and Allied will create significant value-generating opportunities, including significant cost-saving synergies, and is in the best interests of Republic stockholders." Republic added that Waste Management "can only acquire up to $63.1 million worth of Republic common stock without first receiving antitrust clearance from the federal government. "While Republic is aware of our fiduciary duties and will respond to Waste's antitrust notices as appropriate, Republic will continue to guard against opportunistic attempts to disrupt our strategic plans through open market activity or otherwise."...Read More »



Waste Management Posts Slight Decline in Second Quarter Earnings

Waste Management said that one-time items and rising fuel costs caused second quarter earnings to dip slightly. Nevertheless, the company managed to beat analysts' expectations with earnings of $318 million, or $0.64 per share, on revenue of $3.49 billion compared with earnings of $338 million, or $0.64 per share, on revenue of $3.36 billion in last year's second quarter. Fuel costs rose faster than the company's surcharges to customers creating a lag effect that hurt short-term cash flow. Without the unusual items, earnings would have been up by 12.5 percent. Even so, CEO David P. Steiner said that he is confident the company will meet the upper end of the range its full-year earnings guidance of $2.19 to $2.23 per share announced on April 29...Read More »



Allied Waste Pricing Helps Boost Profits 22% in 2Q

Allied Waste Industries reported a 20% rise in net income of $111.4 million or $0.25 per share for the second quarter, from $81.9 million or $0.21 per share in the previous year's quarter. Total revenue for the second quarter was $1.58 billion, an increase of 2.2% from $1.55 billion in the second quarter 2007. The results include a $0.02 per share charge in merger-related costs. Higher pricing and renewed focus on higher margin business more than offset rising fuel costs...Read More »



Republic Services 2Q Earnings Off 29% Related to Ohio Landfill

Republic Services reported a 29 percent decline in second-quarter earnings owing to environmental remediation costs associated with its Countywide landfill in Ohio. The company earned $62.3 million, or $0.34 per share, on revenue of $827.5 million compared with earnings of $87.2 million, or $0.45 per share, on revenue of $808.4 million in the second quarter of last year. During the quarter, the company recorded an after tax charge of $21.8 million, or $0.12 per share related to the landfill project. Without it, the results would have been inline with analysts' expectations. Moreover, the company remains optimistic and is backing its earlier forecast for annual earnings of $1.78 per share to $1.82 per share, excluding the charge for the Countywide facility...Read More »



Covanta Sees 19% Gain in 2Q on Higher Energy Revenues

Covanta Holding Corp. is benefiting from rising landfill tipping fees, especially in the Northeast where many of its projects are located, and from higher revenues from the electricity produced. That helped increase revenues and earnings by 19% in the second quarter. Net income climbed to $44.9 million, or $0.29 a share, from $37.7 million, or $0.24 a share, in the year-ago period. Revenue increased to $423 million. Revenues also were helped by acquisitions and higher prices for recycled metal...Read More »



Study Says Livestock Manure Could Meet 3% of North American Energy Needs

A new paper by researchers at the University of Texas postulates that converting livestock manure into biogas has the potential to meet 3% of North America's entire energy needs while greatly helping to reduce greenhouse gas emissions. The researchers argue that by employing anaerobic digestion to manure, similar to the way in which compost is created, could generate energy-rich biogas. Hundreds of millions of livestock inhabiting the US could produce approximately 100 billion KW hours of electricity, enough to power millions of homes. Processing the manure rather than allowing it to decompose naturally would avoid emissions of the highly potent greenhouse gases nitrous oxide and methane...Read More »



Landfill Gas will Help Brew Budweiser

Allied Waste Industries, working with Ameresco, will sell biogas from the company's McCarty Road Landfill in Houston, TX to Anheuser-Busch's brewery there. Gas from the landfill will be used to convert brewing wastewater into fuel. Construction of a pipeline from the landfill is underway and expected to operational later this year. The project represents part of a larger Anheuser-Busch initiative to derive 15% of its energy needs from renewable sources by 2010...Read More »



Smurfit-Stone 2Q Earnings Lower on Higher Commodity Costs

Packaging and recycler, Smurfit-Stone Container Corp. said it lost $31 million during the second quarter due to higher energy, freight and chemical costs. The loss amounted to $0.12 per share on revenue of $1.84 billion compared with earnings of $15 million, or $0.06 per share on revenue of $1.87 billion in last year's second quarter. According to CEO Patrick J. Moore, "We are seeing unprecedented cost inflation. As a result, our second quarter earnings were negatively impacted by higher-than-expected commodity costs including energy, freight and chemicals. We are raising our selling prices to offset this higher cost inflation, restore profit margins, and improve cash flow in the second half of 2008."...Read More »



Veolia and Energy Systems Develop Indiana Landfill Gas-to-Energy Project

Veolia Environmental Services is working with Energy Systems Group (ESG) to develop a 3.2 Megawatt landfill gas-to-electricity at its Blackfoot Landfill near Winslow in southwestern Indiana. At least two planned expansions over the next five years will increase capacity to 5 megawatts. ESG, which is owned by energy holding company Vectron Corp., will design, build, own and operate the power generation facility on the site of the landfill. ESG is involved with two other landfill gas projects: one in Johnson City, TN, and one in development near Atlanta, GA. Allied Waste is working with Mass.-based Ameresco to develop gas-to-energy project at its nearby Laubscher Meadows Landfill...Read More »



Stericycle Turns Medical Waste Into Solid Profit

Medical waste company Stericycle, Inc. said second quarter earnings rose 37% to $38.7 million or $0.44 per share compared with net income of $32 million or $0.36 per share in the same period last year. Revenues grew by 19.3% to $277.8 million from $232.8 million in the same quarter last year. Acquisitions less than 12 months old contributed about $18 million to the growth. Some of those acquisitions have helped Stericycle diversify into other countries, including the U.K. and in Latin America. In 2007, the US accounted for 77% of sales, Europe 16% and others 7%...Read More »



BlueFire Wins LA Approval for Commercial Cellulosic Ethanol Production Plant

BlueFire Ethanol Fuels, Inc. says that it won Los Angeles county approval to build the nation's first commercial ethanol production plant using yard trimmings, paper, wheat straws and other green wastes. The $30 million facility is to be built in Lancaster, north of Los Angeles, near a landfill which already receives about 170 tons of biowaste material, including woodchips, grass cuttings and other organic waste each day. Once operational in late 2009, the plant is expected to produce 3.2 million gallons of cellulosic ethanol per year. The company wants to build 20 plants across the country in the next seven years, which would altogether produce more than 1 billion gallons of ethanol each year...Read More »



McNeilus Will Supply 58 CNG-Powered Garbage Trucks for New York Contract

McNeilus Companies said it had won a contract from the town of Brookhaven, NY to supply them with 58 compressed natural gas (CNG) powered garbage trucks among 11 haulers. The rising cost of oil along with the tax benefits of using green energy is making CNG a more economically compelling alternative. It burns 90% cleaner than standard diesel fuel...Read More »



Babcock & Wilcox Wins $30 Million to Refurbish Boilers at Florida Facility

Babcock & Wilcox Power Generation Group says it won a $30 million contract with the Solid Waste Authority (SWA) of Palm Beach County to refurbish two of the boilers at the North County Resource Recovery Facility (NCRRF) waste-to-energy plant in West Palm Beach, FL. The refurbished boilers are scheduled to online in August 2010 and January 2011. They will supply 320,000 pounds-per-hour of steam to generate a combined 65 megawatts (MW) of electricity at the plant which currently processes about 2,600 tons of waste per day...Read More »


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