Exhibit 99.1
![(WSI Logo)](https://capedge.com/proxy/8-K/0000950123-09-053719/g20961g20961e01.gif)
PRESS RELEASE
WASTE SERVICES ANNOUNCES RECORD EPS, MARGINS AND FREE CASH FLOW
EPS ALMOST DOUBLES FROM $0.08 IN 2008 TO $0.15 IN THE THIRD QUARTER OF 2009
EPS ALMOST DOUBLES FROM $0.08 IN 2008 TO $0.15 IN THE THIRD QUARTER OF 2009
• | Adjusted EBITDA margin of 25.4% for the quarter as compared to 23.0% in 2008. | ||
• | Strong core price growth of 5.0%. | ||
• | Adjusted EBITDA of $28.5 million for the quarter. | ||
• | Free cash flow of $16.5 million. | ||
• | SG&A reduced by $2.0 million from the comparative quarter in 2008. |
BURLINGTON, Ontario, October 27, 2009, PRNewswire-FirstCall — Waste Services, Inc. (Nasdaq: WSII) today announced financial results for the third quarter ended September 30, 2009. Fully diluted earnings per share from continuing operations were $0.15 for the quarter as compared to $0.08 in the third quarter of 2008. Revenue for the quarter was $112.5 million compared to $125.7 million for the same quarter in 2008. Income from continuing operations for the quarter was $6.7 million as compared to income in the comparative period of $3.5 million. The results for the quarter are highlighted by:
• | Excluding recycled commodity sales, net of commodity surcharges, core internal revenue growth from price was 5.0%. | ||
• | Internal revenue relating to volume declined by $7.1 million or 5.7%. | ||
• | Foreign currency translation accounted for $4.2 million or a 3.4% reduction in revenue and the net expiration of municipal contracts accounted for a decline of $2.5 million or 2.0% of revenue. |
For the nine month period ended September 30, 2009, fully diluted earnings per share from continuing operations were $0.31 as compared to $0.28 in the corresponding period of 2008. Revenue for the period was $315.7 million compared to $370.6 million in 2008. Income from continuing operations for the period was $14.2 million as compared to income in the comparative period of $12.8 million. The results for the nine month period ended September 30, 2009 are highlighted by:
• | Excluding recycled commodity sales, net of commodity surcharges, core internal revenue growth from price was 4.3%. | ||
• | Internal revenue relating to volume declined by $19.3 million or 5.2%. | ||
• | Foreign currency translation accounted for $24.4 million or a 6.6% reduction in revenue and the net expiration of municipal contracts accounted for a decline of $10.6 million or 2.9% of revenue. | ||
• | Foreign currency translation unfavorably impacted EPS by approximately $0.03 per share. |
David Sutherland-Yoest, Waste Services President and Chief Executive Officer, stated, “We are pleased to report record financial results for the third quarter and continued success in executing the strategy we laid out in the beginning of the year. Our progress this year is highlighted by our substantially reduced SG&A expense, significant pricing improvement in all markets, improved margins and record free cash flow. We are also reporting that we have been successful in managing our tax rate to allow us to eliminate our reconciliation of our GAAP earnings to reflect a normal tax charge and we are adjusting our guidance for the year to a range of $0.43 to $0.45 cents per share. Our recently announced strategic acquisitions in Miami and increased internalization of waste volumes into our Alberta landfill position the company for continued record results. The excellent results are a result of fine tuning the company’s administrative and operating costs to adjust to the decline in revenue in the past year.”
Reconciliation of Non-GAAP Measures:
The following table reconciles the differences between income from continuing operations, 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, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Income from continuing operations | $ | 6,717 | $ | 3,469 | $ | 14,173 | $ | 12,830 | ||||||||
Income tax provision | 3,682 | 5,322 | 8,837 | 6,927 | ||||||||||||
Change in fair value of warrants | (688 | ) | — | (2,103 | ) | — | ||||||||||
Interest expense | 7,528 | 7,730 | 22,418 | 25,770 | ||||||||||||
Depreciation, depletion and amortization | 10,940 | 11,503 | 32,016 | 34,826 | ||||||||||||
EBITDA from continuing operations(1) | $ | 28,179 | $ | 28,024 | $ | 75,341 | $ | 80,353 | ||||||||
The following table reconciles the differences between EBITDA from continuing operations and Adjusted EBITDA from continuing operations for the three and nine months ended September 30, 2009 and 2008 (in thousands) (unaudited).
For The Three Months | For The Nine Months | |||||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
EBITDA from continuing operations(1) | $ | 28,179 | $ | 28,024 | $ | 75,341 | $ | 80,353 | ||||||||
Adjustments to EBITDA from continuing operations (as defined per credit agreement): | ||||||||||||||||
Loss (gain) on sale of assets | (78 | ) | (8 | ) | (2,430 | ) | (522 | ) | ||||||||
Non-cash items(2) | 412 | 938 | 1,901 | 2,995 | ||||||||||||
Other excludable expenses(3) | — | — | 88 | — | ||||||||||||
Adjusted EBITDA from continuing operations(1) | $ | 28,513 | $ | 28,954 | $ | 74,900 | $ | 82,826 | ||||||||
(1) | EBITDA from continuing operations and Adjusted EBITDA from continuing operations (“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 stock-based compensation expense and gains and losses on foreign exchange. | |
(3) | Other excludable expenses adjustments includes other non-recurring costs. |
We will host an investor and analyst conference call on Wednesday, October 28, 2009 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 866-831-6267 (US and Canada) or 617-213-8857 (International) and enter passcode number 79761628. To hear a web cast of the call over the Internet, access the home page of our website at www.wasteservicesinc.com. A replay of the call will be available until November 10, 2009 by phoning 888-286-8010 (US and Canada) or 617-801-6888 (International) and entering passcode number 12206233. 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, 2008. 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.
For information contact:
Edwin D. Johnson | J. Todd Atenhan | |
Waste Services, Inc. | Investor Relations | |
Executive Vice President and Chief Financial Officer | +1-888-917-5105 | |
+1-905-319-1237 |
WASTE SERVICES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Revenue | $ | 112,461 | $ | 125,745 | $ | 315,738 | $ | 370,635 | ||||||||
Operating and other expenses: | ||||||||||||||||
Cost of operations (exclusive of depreciation, depletion and amortization) | 71,204 | 82,512 | 203,896 | 242,661 | ||||||||||||
Selling, general and administrative expense (exclusive of depreciation, depletion and amortization) | 13,085 | 15,074 | 39,034 | 47,943 | ||||||||||||
Depreciation, depletion and amortization | 10,940 | 11,503 | 32,016 | 34,826 | ||||||||||||
Loss (gain) on sale of property and equipment, foreign exchange and other | (7 | ) | 135 | (2,533 | ) | (322 | ) | |||||||||
Income from operations | 17,239 | 16,521 | 43,325 | 45,527 | ||||||||||||
Interest expense | 7,528 | 7,730 | 22,418 | 25,770 | ||||||||||||
Change in fair value of warrants | (688 | ) | — | (2,103 | ) | — | ||||||||||
Income from continuing operations before income taxes | 10,399 | 8,791 | 23,010 | 19,757 | ||||||||||||
Income tax provision | 3,682 | 5,322 | 8,837 | 6,927 | ||||||||||||
Income from continuing operations | 6,717 | 3,469 | 14,173 | 12,830 | ||||||||||||
Income from discontinued operations, net of income tax provision of $266 for the nine months ended September 30, 2008 | — | — | — | 409 | ||||||||||||
Gain on sale of discontinued operations, net of income tax provision of $4,485 for the nine months ended September 30, 2008 | — | — | — | 6,869 | ||||||||||||
Net income | $ | 6,717 | $ | 3,469 | $ | 14,173 | $ | 20,108 | ||||||||
Basic and diluted earnings per share: | ||||||||||||||||
Earnings per share — continuing operations | $ | 0.15 | $ | 0.08 | $ | 0.31 | $ | 0.28 | ||||||||
Earnings per share — discontinued operations | — | — | — | 0.16 | ||||||||||||
Earnings per share — basic and diluted | $ | 0.15 | $ | 0.08 | $ | 0.31 | $ | 0.44 | ||||||||
Weighted average common shares outstanding: | ||||||||||||||||
Basic | 46,253 | 46,079 | 46,206 | 46,076 | ||||||||||||
Diluted | 46,302 | 46,088 | 46,231 | 46,085 |
WASTE SERVICES, INC.
SUPPLEMENTAL UNAUDITED BALANCE SHEET AND CASH FLOW DATA
(In thousands)
SUPPLEMENTAL UNAUDITED BALANCE SHEET AND CASH FLOW DATA
(In thousands)
September 30, | December 31, | |||||||
2009 | 2008 | |||||||
Balance Sheet Data: | ||||||||
Cash | $ | 3,209 | $ | 7,227 | ||||
Current assets | $ | 70,548 | $ | 72,961 | ||||
Total assets | $ | 870,792 | $ | 840,927 | ||||
Current liabilities | $ | 99,070 | $ | 93,245 | ||||
Debt: | ||||||||
Senior secured credit facilities: | ||||||||
US Revolver | $ | — | $ | 34,600 | ||||
Canadian Revolver | 5,604 | 27,699 | ||||||
US Term loan | 36,902 | 38,125 | ||||||
Canadian Term Loan | 113,962 | 103,505 | ||||||
Senior subordinated notes | 208,520 | 158,854 | ||||||
Other notes | 8,291 | 9,286 | ||||||
Total debt | $ | 373,279 | $ | 372,069 | ||||
Shareholders’ equity | $ | 356,732 | $ | 335,018 |
Nine Months Ended September 30, | ||||||||
2009 | 2008 | |||||||
Cash Flow Data: | ||||||||
Net cash flows provided by continuing operations | $ | 47,154 | $ | 48,923 | ||||
Net cash flows provided by (used in) investing activities for continuing operations | $ | (34,761 | ) | $ | 14,619 | |||
Net cash flows used in financing activities of continuing operations | $ | (17,903 | ) | $ | (43,537 | ) | ||
Capital expenditures from continuing operations | $ | 24,413 | $ | 39,220 |
WASTE SERVICES, INC.
SUPPLEMENTAL UNAUDITED GROWTH RATES AND COUNTRY DATA
(In thousands)
SUPPLEMENTAL UNAUDITED GROWTH RATES AND COUNTRY DATA
(In thousands)
Waste Services, Inc.
Revenue Growth
For The Three Months Ended September 30, 2009
(in thousands)
Revenue Growth
For The Three Months Ended September 30, 2009
(in thousands)
Total Revenue, September 30, 2008 | $ | 125,745 | ||||||
Impact on revenue from changes in: | ||||||||
Price | 5,981 | 4.8 | % | |||||
Fuel Surcharge | (5,279 | ) | -4.2 | % | ||||
Volume | (7,130 | ) | -5.7 | % | ||||
Acquisition / Disposition | 188 | 0.1 | % | |||||
Gain / Loss of Contracts | (2,496 | ) | -2.0 | % | ||||
Other | (322 | ) | -0.2 | % | ||||
Foreign currency impact | (4,226 | ) | -3.4 | % | ||||
Total Revenue, September 30, 2009 | $ | 112,461 | ||||||
Waste Services, Inc.
Revenue Growth
For The Nine Months Ended September 30, 2009
(in thousands)
Revenue Growth
For The Nine Months Ended September 30, 2009
(in thousands)
Total Revenue, September 30, 2008 | $ | 370,635 | ||||||
Impact on revenue from changes in: | ||||||||
Price | 13,641 | 3.7 | % | |||||
Fuel Surcharge | (14,840 | ) | -4.0 | % | ||||
Volume | (19,293 | ) | -5.2 | % | ||||
Acquisition / Disposition | 1,168 | 0.3 | % | |||||
Gain / Loss of Contracts | (10,634 | ) | -2.9 | % | ||||
Other | (583 | ) | -0.1 | % | ||||
Foreign currency impact | (24,356 | ) | -6.6 | % | ||||
Total Revenue, September 30, 2009 | $ | 315,738 | ||||||
COUNTRY DATA
(In thousands)
(In thousands)
Three Months Ended September 30, 2009 | ||||||||||||||||||||||||
US | Canada | Total | ||||||||||||||||||||||
Revenue | $ | 50,821 | 100.0 | % | $ | 61,640 | 100.0 | % | $ | 112,461 | 100.0 | % | ||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Cost of operations | 30,833 | 60.7 | % | 40,371 | 65.5 | % | 71,204 | 63.3 | % | |||||||||||||||
Selling, general and administrative expense | 6,155 | 12.1 | % | 6,930 | 11.2 | % | 13,085 | 11.6 | % | |||||||||||||||
Depreciation, depletion and amortization | 6,317 | 12.4 | % | 4,623 | 7.5 | % | 10,940 | 9.8 | % | |||||||||||||||
Foreign exchange (gain) loss and other | (76 | ) | -0.1 | % | 69 | 0.1 | % | (7 | ) | 0.0 | % | |||||||||||||
Income from continuing operations | $ | 7,592 | 14.9 | % | $ | 9,647 | 15.7 | % | $ | 17,239 | 15.3 | % | ||||||||||||
0.0 | % | 0.0 | % | 0.0 | % |
Three Months Ended September 30, 2008 | ||||||||||||||||||||||||
US | Canada | Total | ||||||||||||||||||||||
Revenue | $ | 58,468 | 100.0 | % | $ | 67,277 | 100.0 | % | $ | 125,745 | 100.0 | % | ||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Cost of operations | 38,114 | 65.2 | % | 44,398 | 66.0 | % | 82,512 | 65.6 | % | |||||||||||||||
Selling, general and administrative expense | 7,647 | 13.1 | % | 7,427 | 11.0 | % | 15,074 | 12.0 | % | |||||||||||||||
Depreciation, depletion and amortization | 6,509 | 11.1 | % | 4,994 | 7.4 | % | 11,503 | 9.1 | % | |||||||||||||||
Foreign exchange gain and other | 20 | 0.0 | % | 115 | 0.2 | % | 135 | 0.2 | % | |||||||||||||||
Income from continuing operations | $ | 6,178 | 10.6 | % | $ | 10,343 | 15.4 | % | $ | 16,521 | 13.1 | % | ||||||||||||
WASTE SERVICES, INC.
UNAUDITED COUNTRY DATA
(In thousands)
UNAUDITED COUNTRY DATA
(In thousands)
Nine Months Ended September 30, 2009 | ||||||||||||||||||||||||
US | Canada | Total | ||||||||||||||||||||||
Revenue | $ | 151,801 | 100.0 | % | $ | 163,937 | 100.0 | % | $ | 315,738 | 100.0 | % | ||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Cost of operations | 94,348 | 62.2 | % | 109,548 | 66.8 | % | 203,896 | 64.6 | % | |||||||||||||||
Selling, general and administrative expense | 18,922 | 12.5 | % | 20,112 | 12.3 | % | 39,034 | 12.4 | % | |||||||||||||||
Depreciation, depletion and amortization | 19,039 | 12.5 | % | 12,977 | 7.9 | % | 32,016 | 10.1 | % | |||||||||||||||
Gain on sale of property and equipment, foreign exchange and other | (2,273 | ) | -1.5 | % | (260 | ) | -0.2 | % | (2,533 | ) | -0.8 | % | ||||||||||||
Income from continuing operations | $ | 21,765 | 14.3 | % | $ | 21,560 | 13.2 | % | $ | 43,325 | 13.7 | % | ||||||||||||
0.0 | % | 0.0 | % | 0.0 | % |
Nine Months Ended September 30, 2008 | ||||||||||||||||||||||||
US | Canada | Total | ||||||||||||||||||||||
Revenue | $ | 179,331 | 100.0 | % | $ | 191,304 | 100.0 | % | $ | 370,635 | 100.0 | % | ||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Cost of operations | 116,497 | 65.0 | % | 126,164 | 65.9 | % | 242,661 | 65.5 | % | |||||||||||||||
Selling, general and administrative expense | 24,055 | 13.4 | % | 23,888 | 12.5 | % | 47,943 | 12.9 | % | |||||||||||||||
Depreciation, depletion and amortization | 19,903 | �� | 11.1 | % | 14,923 | 7.8 | % | 34,826 | 9.4 | % | ||||||||||||||
Foreign exchange (gain) loss and other | (463 | ) | -0.3 | % | 141 | 0.1 | % | (322 | ) | -0.1 | % | |||||||||||||
Income from continuing operations | $ | 19,339 | 10.8 | % | $ | 26,188 | 13.7 | % | $ | 45,527 | 12.3 | % | ||||||||||||