FOLSOM, CA — (Marketwire) — 07/19/11 — Waste Connections, Inc. (NYSE: WCN)
Waste Connections, Inc. (NYSE: WCN) today announced its results for the
second quarter of 2011. Revenue totaled $390.2 million, an 18.1% increase
over revenue of $330.5 million in the year ago period. Operating income
was $84.8 million, or 21.7% of revenue, up 22.3% over operating income of
$69.4 million in the second quarter of 2010. Net income attributable to
Waste Connections in the quarter was $44.4 million, or $0.39 per share on a
diluted basis of 114.3 million shares. In the year ago period, the Company
reported net income attributable to Waste Connections of $30.4 million, or
$0.26 per share on a diluted basis of 117.5 million shares.
Adjusted net income attributable to Waste Connections in the quarter was
$44.8 million*, or $0.39 per share*, adjusting primarily for
acquisition-related costs expensed during the period. Adjusted net income
attributable to Waste Connections in the prior year period was $37.2
million*, or $0.32 per share*, adjusting primarily for costs associated
with the early redemption of the Company–s 2026 Notes.
Non-cash costs for equity-based compensation, amortization of
acquisition-related intangibles, loss on the early redemption of the 2026
Notes (net of make-whole payment), and amortization of debt discount
related to convertible debt instruments were $8.6 million ($5.4 million net
of taxes, or approximately $0.05 per share) in the quarter compared to $8.5
million ($5.3 million net of taxes, or approximately $0.05 per share) in
the year ago period.
“2011 continues to play out well for us. Core pricing, increasing disposal
volumes and record recycling commodity values once again contributed to
solid results in the quarter. These factors, together with better than
expected contribution from recent acquisitions, enabled us to exceed the
upper end of our outlook. Adjusted operating income before depreciation
and amortization* as a percentage of revenue in the second quarter expanded
30 basis points over the prior year period despite a 100 basis point
increase in fuel expense as a percentage of revenue, and adjusted EPS*
increased more than 20%,” said Ronald J. Mittelstaedt, Chairman and Chief
Executive Officer. “Our strong free cash flow, low leverage and more than
$600 million of available capacity under our new credit facility provide
tremendous flexibility to fund our growth strategy and return of capital to
shareholders.”
For the six months ended June 30, 2011, revenue was $721.7 million, a 13.1%
increase over revenue of $638.0 million in the year ago period. Operating
income was $153.4 million, or 21.3% of revenue, up 18.9% over operating
income of $129.0 million for the same period in 2010. Net income
attributable to Waste Connections for the six months ended June 30, 2011,
was $81.0 million, or $0.71 per share on a diluted basis of 114.4 million
shares. In the year ago period, the Company reported net income
attributable to Waste Connections of $58.0 million, or $0.49 per share on a
diluted basis of 117.7 million shares. Adjusted net income attributable to
Waste Connections for the six months ended June 30, 2011, was $81.7
million*, or $0.71 per share*, up 22.1% and 24.6%, respectively, compared
to $66.9 million*, or $0.57 per share* in the year ago period.
For the six months ended June 30, 2011, non-cash costs for equity-based
compensation, amortization of acquisition-related intangibles, loss on the
early redemption of the 2026 Notes (net of make-whole payment), and
amortization of debt discount related to convertible debt instruments were
$15.6 million ($9.7 million net of taxes, or approximately $0.08 per
share), compared to $16.3 million ($10.1 million net of taxes, or
approximately $0.09 per share) in the year ago period.
Waste Connections, Inc. is an integrated solid waste services company that
provides solid waste collection, transfer, disposal and recycling services
in mostly exclusive and secondary markets. The Company serves more than
two million residential, commercial and industrial customers from a network
of operations in 29 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.
Waste Connections will be hosting a conference call related to second
quarter earnings and third quarter outlook on July 20th at 8:30 A.M. Eastern
Time. The call will be broadcast live over the Internet at
or through a link on our website at
. A playback of the call will be available at both
of these websites.
For more information, visit the Waste Connections web site at
. Copies of financial literature, including this
release, are available on the Waste Connections website or through
contacting us directly at (916) 608-8200.
* A non-GAAP measure; see accompanying Non-GAAP Reconciliation Schedule.
Information Regarding Forward-Looking Statements
Certain statements contained in this release are forward-looking in nature,
including statements related to expected performance of our base business,
expected share repurchases and dividend payments, expected contribution
from closed acquisitions, and future acquisition activity and growth
strategy. These statements can be identified by the use of forward-looking
terminology such as “believes,” “expects,” “may,” “will,” “should,” or
“anticipates,” or the negative thereof or comparable terminology, or by
discussions of strategy. Our business and operations are subject to a
variety of risks and uncertainties and, consequently, actual results may
differ materially from those projected by any forward-looking statements.
Factors that could cause actual results to differ from those projected
include, but are not limited to, the following: (1) our acquisitions may
not be successful, resulting in changes in strategy, operating losses or a
loss on sale of the business acquired; (2) a portion of our growth and
future financial performance depends on our ability to integrate acquired
businesses into our organization and operations; (3) downturns in the
worldwide economy adversely affect operating results; (4) our results are
vulnerable to economic conditions and seasonal factors affecting the
regions in which we operate; (5) we may be subject in the normal course of
business to judicial, administrative or other third party proceedings that
could interrupt or limit our operations, require expensive remediation,
result in adverse judgments, settlements or fines and create negative
publicity; (6) we may be unable to compete effectively with larger and
better capitalized companies and governmental service providers; (7) we may
lose contracts through competitive bidding, early termination or
governmental action; (8) price increases may not be adequate to offset the
impact of increased costs or may cause us to lose volume; (9) increases in
the price of fuel may adversely affect our business and reduce our
operating margins; (10) increases in labor and disposal and related
transportation costs could impact our financial results; (11) efforts by
labor unions could divert management attention and adversely affect
operating results; (12) we could face significant withdrawal liability if
we withdraw from participation in one or more underfunded multiemployer
pension plans in which we participate; (13) increases in insurance costs
and the amount that we self-insure for various risks could reduce our
operating margins and reported earnings; (14) competition for acquisition
candidates, consolidation within the waste industry and economic and market
conditions may limit our ability to grow through acquisitions; (15) our
indebtedness could adversely affect our financial condition; we may incur
substantially more debt in the future; (16) each business that we acquire
or have acquired may have liabilities or risks that we fail or are unable
to discover, including environmental liabilities; (17) liabilities for
environmental damage may adversely affect our financial condition, business
and earnings; (18) our accruals for our landfill site closure and
post-closure costs may be inadequate; (19) the financial soundness of our
customers could affect our business and operating results; (20) we depend
significantly on the services of the members of our senior, regional and
district management team, and the departure of any of those persons could
cause our operating results to suffer; (21) our decentralized
decision-making structure could allow local managers to make decisions that
adversely affect our operating results; (22) we may incur charges related
to capitalized expenditures of landfill development projects, which would
decrease our earnings; (23) because we depend on railroads for our
intermodal operations, our operating results and financial condition are
likely to be adversely affected by any reduction or deterioration in rail
service; (24) our financial results are based upon estimates and
assumptions that may differ from actual results; (25) the adoption of new
accounting standards or interpretations could adversely affect our
financial results; (26) our financial and operating performance may be
affected by the inability to renew landfill operating permits, obtain new
landfills and expand existing ones; (27) future changes in laws or renewed
enforcement of laws regulating the flow of solid waste in interstate
commerce could adversely affect our operating results; (28) fluctuations in
prices for recycled commodities that we sell and rebates we offer to
customers may cause our revenues and operating results to decline; (29)
extensive and evolving environmental, health, safety and employment laws
and regulations may restrict our operations and growth and increase our
costs; (30) climate change regulations may adversely affect operating
results; (31) extensive regulations that govern the design, operation and
closure of landfills may restrict our landfill operations or increase our
costs of operating landfills; (32) alternatives to landfill disposal may
cause our revenues and operating results to decline; and (33) unusually
adverse weather conditions may interfere with our operations, harming our
operating results. These risks and uncertainties, as well as others, are
discussed in greater detail in our filings with the Securities and Exchange
Commission, including our most recent Annual Report on Form 10-K. There
may be additional risks of which we are not presently aware or that we
currently believe are immaterial which could have an adverse impact on our
business. We make no commitment to revise or update any forward-looking
statements in order to reflect events or circumstances that may change.
– financial tables attached –
Reconciliation of Adjusted Operating Income before Depreciation and
Amortization:
Adjusted operating income before depreciation and amortization, a non-GAAP
financial measure, is provided supplementally because it is widely used by
investors as a performance and valuation measure in the solid waste
industry. Waste Connections defines adjusted operating income before
depreciation and amortization as operating income, plus depreciation and
amortization expense, plus closure and post-closure accretion expense, plus
or minus any gain or loss on disposal of assets. The Company further
adjusts this calculation to exclude the effects of items management
believes impact the ability to assess the operating performance of our
business. This measure is not a substitute for, and should be used in
conjunction with, GAAP financial measures. Management uses adjusted
operating income before depreciation and amortization as one of the
principal measures to evaluate and monitor the ongoing financial
performance of the Company–s operations. Other companies may calculate
adjusted operating income before depreciation and amortization differently.
Reconciliation of Net Income to Adjusted Net Income and Adjusted Net Income
per diluted share:
Adjusted net income and adjusted net income per diluted share, both
non-GAAP financial measures, are provided supplementally because they are
widely used by investors as a valuation measure in the solid waste
industry. The Company provides adjusted net income to exclude the effects
of items management believes impact the comparability of operating results
between periods. Adjusted net income has limitations due to the fact that
it may exclude items that have an impact on the Company–s financial
condition and results of operations. Adjusted net income and adjusted net
income per diluted share are not a substitute for, and should be used in
conjunction with, GAAP financial measures. Management uses adjusted net
income and adjusted net income per diluted share as one of the principal
measures to evaluate and monitor ongoing financial performance of the
Company–s operations. Other companies may calculate adjusted net income
and adjusted net income per diluted share differently.
Reconciliation of Free Cash Flow:
Free cash flow, a non-GAAP financial measure, is provided supplementally
because it is widely used by investors as a valuation and liquidity measure
in the solid waste industry. Waste Connections defines free cash flow as
net cash provided by operating activities, plus proceeds from disposal of
assets, plus or minus change in book overdraft, plus excess tax benefit
associated with equity-based compensation, less capital expenditures for
property and equipment and distributions to noncontrolling interests. This
measure is not a substitute for, and should be used in conjunction with,
GAAP liquidity or financial measures. Management uses free cash flow as
one of the principal measures to evaluate and monitor the ongoing financial
performance of the Company–s operations. Other companies may calculate
free cash flow differently.
CONTACT:
Worthing Jackman
(916) 608-8266