UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 10, 2009
WASTE CONNECTIONS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
COMMISSION FILE NO. 1-31507
94-3283464
(I.R.S. Employer Identification No.)
35 Iron Point Circle, Suite 200, Folsom, CA 95630
(Address of principal executive offices) (Zip code)
(916) 608-8200
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 7.01 Regulation FD Disclosure.
During our earnings conference call on February 10, 2009, we highlighted the following outlook for the first quarter and full year 2009.
(Dollar amounts are approximations)
For the first quarter of the year, we estimate our revenue to be approximately $264 million to $266 million. We expect all-in pricing growth of approximately 4%, with core pricing between 5.5% and 6%, and surcharges between negative 1.5% and negative 2%. Volume growth is estimated to be approximately negative 5%. Recycling, intermodal, and other growth is expected to be approximately negative 4%. Operating income before depreciation and amortization expense is estimated to be approximately 29% of revenue, or between $76.5 million to $77.5 million. Depreciation and amortization expense is estimated to be approximately 10% of revenue. Operating income is estimated to be approximately 19% of revenue. We estimate interest expense to be approximately $12.5 million and interest income to be approximately $1.2 million. We expect our fully diluted share count to be approximately 81 million shares.
These estimates exclude the impact of any additional acquisitions that may close and any expensing of related transaction costs resulting from the adoption of Statement of Financial Accounting Standards No. 141(R), “Business Combinations.”
For the full year, in addition to the outlook provided in our Current Report on Form 8-K filed with the Securities and Exchange Commission on February 9, 2009, we expect core pricing between 4.5% and 5%, and surcharges between negative 1.5% and negative 2%. Volume growth is estimated between negative 3% and negative 4%. Recycling, intermodal and other growth is expected to be approximately negative 2.5%. Our operating income before depreciation, amortization and accretion expense is estimated to be approximately 31% of revenue. Our effective tax rate is estimated to be 38% for the full year with the following quarterly breakdown: first quarter, second quarter, and fourth quarter are estimated to be about 38.8%.
These estimates include the contribution from the Republic Services, Inc. divestitures as we have assumed that transaction will close April 1, 2009. These estimates exclude the impact of any other acquisitions that may close and any expensing of related transaction costs resulting from the adoption of Statement of Financial Accounting Standards No. 141(R), “Business Combinations.”
Operating income before depreciation, amortization and accretion is considered a non-GAAP financial measure, and is provided supplementally because it is widely used by investors as a valuation and liquidity measure in the solid waste industry. It should be used in conjunction with GAAP financial measures. Management uses operating income before depreciation, amortization and accretion as a principal measure to evaluate and monitor the ongoing financial performance of our operations. Other companies may calculate this measure differently.
Safe Harbor for Forward-Looking Statements
Certain statements contained in this report are forward-looking in nature, including statements regarding our expected 2009 outlook. 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) a portion of our growth and future financial performance depends on our ability to integrate acquired businesses into our organization and operations; (2) our acquisitions may not be successful, resulting in changes in strategy, operating losses or a loss on sale of the business acquired; (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 unable to compete effectively with larger and better capitalized companies and governmental service providers; (6) we may lose contracts through competitive bidding, early termination or governmental action; (7) price increases may not be adequate to offset the impact of increased costs or may cause us to lose volume; (8) increases in the price of fuel may adversely affect our business and reduce our operating margins; (9) increases in labor and disposal and related transportation costs could impact our financial results; (10) we could face significant withdrawal liability if we withdraw from participation in one or more multiemployer pension plans in which we participate; (11) efforts by labor unions could divert management attention and adversely affect operating results; (12) increases in insurance costs and the amount that we self-insure for various risks could reduce our operating margins and reported earnings; (13) competition for acquisition candidates, consolidation within the waste industry and economic and market conditions may limit our ability to grow through acquisitions; (14) our indebtedness could adversely affect our financial condition; we may incur substantially more debt in the future; (15) each business that we acquire or have acquired may have liabilities that we fail or are unable to discover, including environmental liabilities; (16) liabilities for environmental damage may adversely affect our
financial condition, business and earnings; (17) our accruals for our landfill site closure and post-closure costs may be inadequate; (18) we may be subject in the normal course of business to judicial, administrative or other third party proceedings that could interrupt our operations, require expensive remediation, result in adverse judgments, settlements or fines and create negative publicity; (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) 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; (23) we may incur additional charges related to capitalized expenditures, which would decrease our earnings; (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 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 and health and safety laws and regulations may restrict our operations and growth and increase our costs; (30) extensive regulations that govern the design, operation and closure of landfills may restrict our landfill operations or increase our costs of operating landfills; and (31) 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.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| WASTE CONNECTIONS, INC. | |||
| BY: | /s/ Worthing F. Jackman | ||
| Date: February 10, 2009 | Worthing F. Jackman, | ||
| Executive Vice President and Chief Financial Officer | |||