EXHIBIT 99.1
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PRESS RELEASE
WASTE SERVICES ANNOUNCES RECORD THIRD QUARTER RESULTS
• | Record Revenue and Adjusted EBITDA. | ||
• | Record Adjusted EBITDA margins. | ||
• | Internal revenue growth from price and volume for the quarter of 4.4%. |
BURLINGTON, Ontario, October 30, 2007, PRNewswire-FirstCall — Waste Services, Inc. (Nasdaq: WSII) today announced financial results for the three months ended September 30, 2007. The quarter was highlighted by strong top line growth and continued margin expansion:
• | Revenue growth of 25.9% to $130.6 million compared to $103.7 million in 2006. | ||
• | Internal revenue growth was 4.4%, made up of 4.1% price, 0.3% volume. | ||
• | Acquisitions net of divestitures added $22.1 million of revenue or 21.3%, while the net expiration of municipal contracts accounted for a $2.9 million reduction or 2.8%. | ||
• | Operating income and Adjusted EBITDA expanded to $9.9 million and $31.2 million with margins of 7.6% and 23.9%, respectively. |
David Sutherland-Yoest, Waste Services Chairman and Chief Executive Officer, stated, “We are pleased with our record quarterly results as we continue to execute our strategic initiatives both domestically and in Canada. While certain economic conditions in the Florida housing market continue to be challenging, we are well positioned for earnings and revenue growth both in the U.S. and Canada. Our Canadian based operations continue to exceed expectations and we are well poised to finish the year strongly.”
The September 30, 2007 year-to-date results are highlighted by:
• | Revenue growth of 22.8% to $358.2 million compared to $291.7 million in 2006. | ||
• | Internal revenue growth was 5.1 %, made up of 5.0% price, 0.1% volume. | ||
• | Acquisitions net of divestitures added $51.7 million of revenue or 17.7%, while the expiration of low margin municipal contracts net of new higher margin municipal contracts accounted for a $4.6 million reduction or 1.6%. | ||
• | Operating income and Adjusted EBITDA expanded to $30.9 million and $81.3 million with margins improving to 8.6% and 22.7%, respectively. |
Reconciliation of Non-GAAP Measures:
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):
For The Three Months | For The Nine Months | |||||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Net loss from continuing operations | $ | (4,826 | ) | $ | (8,133 | ) | $ | (10,520 | ) | $ | (37,138 | ) | ||||
Income tax provision | 4,474 | 4,045 | 10,618 | 8,386 | ||||||||||||
Preferred stock dividends and amortization of issue costs | — | 4,256 | — | 14,793 | ||||||||||||
Interest expense | 10,243 | 7,996 | 30,818 | 22,876 | ||||||||||||
Depreciation, depletion and amortization | 16,143 | 10,602 | 43,234 | 29,694 | ||||||||||||
EBITDA from continuing operations(1) | $ | 26,034 | $ | 18,766 | $ | 74,150 | $ | 38,611 | ||||||||
The following table reconciles the differences between EBITDA and Adjusted EBITDA, as defined in our credit agreement, for the three and nine months ended September 30, 2007 and 2006 (in thousands) (unaudited):
For The Three Months | For The Nine Months | |||||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
EBITDA from continuing operations(1) | $ | 26,034 | $ | 18,766 | $ | 74,150 | $ | 38,611 | ||||||||
Adjustments to EBITDA from continuing operations (as defined per credit agreement): | ||||||||||||||||
Non-cash items(2) | 1,949 | 1,254 | 2,713 | 10,518 | ||||||||||||
Other excludable expenses(3) | 3,252 | 2,002 | 4,477 | 5,332 | ||||||||||||
Adjusted EBITDA from continuing operations(1) | $ | 31,235 | $ | 22,022 | $ | 81,340 | $ | 54,461 | ||||||||
(1) | EBITDA from continuing operations and EBITDA from continuing operations as defined in our credit agreement (“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 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. |
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We will host an investor and analyst conference call on Wednesday, October 31, 2007 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 866-761-0749 (US and Canada) or 617-614-2707 (International) and enter passcode number 49978114. 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 November 14, 2007 by phoning 888-286-8010 (US and Canada) or 617-801-6888 (International) and entering passcode number 97716015. 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, 2006. 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 http://www.wasteservicesinc.com. Information on the company’s website does not form part of this press release.
For information contact:
Edwin D. Johnson
Executive Vice President and Chief Financial Officer
Waste Services, Inc.
561-237-3400
Executive Vice President and Chief Financial Officer
Waste Services, Inc.
561-237-3400
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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 | Twelve Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Revenue | $ | 130,605 | $ | 103,739 | $ | 358,158 | $ | 291,703 | ||||||||
Operating and other expenses: | ||||||||||||||||
Cost of operations (exclusive of depreciation, depletion and amortization) | 85,346 | 70,312 | 235,478 | 201,373 | ||||||||||||
Selling, general and administrative expense (exclusive of depreciation, depletion and amortization) | 18,587 | 14,753 | 48,479 | 44,083 | ||||||||||||
Deferred acquisition costs | — | — | — | 5,612 | ||||||||||||
Depreciation, depletion and amortization | 16,143 | 10,602 | 43,234 | 29,694 | ||||||||||||
Foreign exchange loss (gain) and other | 638 | (92 | ) | 51 | 2,024 | |||||||||||
Income from operations | 9,891 | 8,164 | 30,916 | 8,917 | ||||||||||||
Interest expense | 10,243 | 7,996 | 30,818 | 22,876 | ||||||||||||
Cumulative mandatorily redeemable preferred stock dividends and amortization of issue costs | — | 4,256 | — | 14,793 | ||||||||||||
Income (loss) from continuing operations before income taxes | (352 | ) | (4,088 | ) | 98 | (28,752 | ) | |||||||||
Income tax provision | 4,474 | 4,045 | 10,618 | 8,386 | ||||||||||||
Net loss from continuing operations | (4,826 | ) | (8,133 | ) | (10,520 | ) | (37,138 | ) | ||||||||
Net loss from discontinued operations, net of tax of $0 | — | (460 | ) | (1,130 | ) | (1,297 | ) | |||||||||
Loss on sale of discontinued operations, net of tax of $0 | (198 | ) | — | (11,452 | ) | — | ||||||||||
Net loss | $ | (5,024 | ) | $ | (8,593 | ) | $ | (23,102 | ) | $ | (38,435 | ) | ||||
Basic and diluted loss per share: | ||||||||||||||||
Loss per share — continuing operations | $ | (0.11 | ) | $ | (0.23 | ) | $ | (0.23 | ) | $ | (1.08 | ) | ||||
Loss per share — discontinued operations | — | (0.01 | ) | (0.27 | ) | (0.03 | ) | |||||||||
Basic and diluted loss per share | $ | (0.11 | ) | $ | (0.24 | ) | $ | (0.50 | ) | $ | (1.11 | ) | ||||
Weighted average common shares outstanding — basic and diluted | 46,007 | 36,066 | 45,984 | 34,534 | ||||||||||||
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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, | |||||||
2007 | 2006 | |||||||
Balance Sheet Data: | ||||||||
Cash | $ | 15,998 | $ | 8,532 | ||||
Current assets | $ | 97,318 | $ | 71,119 | ||||
Total assets | $ | 938,042 | $ | 865,063 | ||||
Current liabilities | $ | 98,395 | $ | 86,358 | ||||
Debt: | ||||||||
Senior secured credit facilities: | ||||||||
Revolver | $ | — | $ | — | ||||
Term loan | 273,910 | 245,260 | ||||||
Senior subordinated notes | 160,000 | 160,000 | ||||||
Other notes | 10,827 | 4,828 | ||||||
Total debt | $ | 444,737 | $ | 410,088 | ||||
Shareholders’ equity | $ | 349,230 | $ | 339,357 |
Period Ended September 30, | ||||||||
2007 | 2006 | |||||||
Cash Flow Data: | ||||||||
Cash flows provided by continuing operations | $ | 45,786 | $ | 24,700 | ||||
Cash flows used in investing activities for continuing operations | $ | (72,901 | ) | $ | (61,980 | ) | ||
Cash flows from financing activities of continuing operations | $ | 33,961 | $ | 28,608 | ||||
Capital expenditures from continuing operations | $ | 48,624 | $ | 37,007 |
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WASTE SERVICES, INC.
SUPPLEMENTAL UNAUDITED INTERNAL GROWTH RATES AND COUNTRY DATA
(In thousands)
SUPPLEMENTAL UNAUDITED INTERNAL GROWTH RATES AND COUNTRY DATA
(In thousands)
Waste Services, Inc.
Internal Revenue Growth
For The Quarter Ended September 30, 2007
(in thousands)
Internal Revenue Growth
For The Quarter Ended September 30, 2007
(in thousands)
Total Revenue, September 30, 2006 | $ | 103,739 | ||||||
Impact on revenue from changes in: | ||||||||
Price | 4,252 | 4.1 | % | |||||
Volume | 327 | 0.3 | % | |||||
Acquisition / Disposition | 22,100 | 21.3 | % | |||||
Gain / Loss of Contracts | (2,933 | ) | -2.8 | % | ||||
Other | (461 | ) | -0.4 | % | ||||
Foreign currency impact | 3,581 | 3.5 | % | |||||
Total Revenue, September 30, 2007 | $ | 130,605 | ||||||
Waste Services, Inc.
Internal Revenue Growth
For The Nine Months Ended September 30, 2007
(in thousands)
Internal Revenue Growth
For The Nine Months Ended September 30, 2007
(in thousands)
Total Revenue, September 30, 2006 | $ | 291,703 | ||||||
Impact on revenue from changes in: | ||||||||
Price | 14,706 | 5.0 | % | |||||
Volume | 240 | 0.1 | % | |||||
Acquisition / Disposition | 51,734 | 17.7 | % | |||||
Gain / Loss of Contracts | (4,558 | ) | -1.6 | % | ||||
Other | 514 | 0.2 | % | |||||
Foreign currency impact | 3,819 | 1.3 | % | |||||
Total Revenue, September 30, 2007 | $ | 358,158 | ||||||
COUNTRY DATA
(In thousands)
(In thousands)
Three Months Ended September 30, 2007 | ||||||||||||||||||||||||
US | Canada | Total | ||||||||||||||||||||||
Revenue | $ | 70,616 | 100.0 | % | $ | 59,989 | 100.0 | % | $ | 130,605 | 100.0 | % | ||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Cost of operations | 45,701 | 64.7 | % | 39,645 | 66.1 | % | 85,346 | 65.3 | % | |||||||||||||||
Selling, general and administrative expense | 7,720 | 10.9 | % | 6,872 | 11.5 | % | 14,592 | 11.2 | % | |||||||||||||||
Severance and related costs | 3,995 | 5.7 | % | — | 0.0 | % | 3,995 | 3.1 | % | |||||||||||||||
Depreciation, depletion and amortization | 11,004 | 15.6 | % | 5,139 | 8.6 | % | 16,143 | 12.4 | % | |||||||||||||||
Foreign exchange gain and other | 672 | 0.9 | % | (34 | ) | -0.1 | % | 638 | 0.4 | % | ||||||||||||||
Income from continuing operations | $ | 1,524 | 2.2 | % | $ | 8,367 | 13.9 | % | $ | 9,891 | 7.6 | % | ||||||||||||
Three Months Ended September 30, 2006 | ||||||||||||||||||||||||
US | Canada | Total | ||||||||||||||||||||||
Revenue | $ | 51,910 | 100.0 | % | $ | 51,829 | 100.0 | % | $ | 103,739 | 100.0 | % | ||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Cost of operations | 35,122 | 67.6 | % | 35,190 | 67.9 | % | 70,312 | 67.8 | % | |||||||||||||||
Selling, general and administrative expense | 9,088 | 17.5 | % | 5,665 | 10.9 | % | 14,753 | 14.2 | % | |||||||||||||||
Depreciation, depletion and amortization | 6,103 | 11.8 | % | 4,499 | 8.7 | % | 10,602 | 10.2 | % | |||||||||||||||
Foreign exchange (gain) loss and other | (62 | ) | -0.1 | % | (30 | ) | -0.1 | % | (92 | ) | -0.1 | % | ||||||||||||
Income from continuing operations | $ | 1,659 | 3.2 | % | $ | 6,505 | 12.6 | % | $ | 8,164 | 7.9 | % | ||||||||||||
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WASTE SERVICES, INC.
COUNTRY DATA- (Continued)
(In thousands)
COUNTRY DATA- (Continued)
(In thousands)
Nine Months Ended September 30, 2007 | ||||||||||||||||||||||||
US | Canada | Total | ||||||||||||||||||||||
Revenue | $ | 197,510 | 100.0 | % | $ | 160,648 | 100.0 | % | $ | 358,158 | 100.0 | % | ||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Cost of operations | 128,404 | 65.0 | % | 107,074 | 66.7 | % | 235,478 | 65.7 | % | |||||||||||||||
Selling, general and administrative expense | 24,680 | 12.5 | % | 19,804 | 12.3 | % | 44,484 | 12.4 | % | |||||||||||||||
Severance and related costs | 3,995 | 2.0 | % | — | 0.0 | % | 3,995 | 1.1 | % | |||||||||||||||
Depreciation, depletion and amortization | 29,158 | 14.8 | % | 14,076 | 8.8 | % | 43,234 | 12.1 | % | |||||||||||||||
Foreign exchange gain and other | 338 | 0.2 | % | (287 | ) | -0.2 | % | 51 | 0.1 | % | ||||||||||||||
Income from continuing operations | $ | 10,935 | 5.5 | % | $ | 19,981 | 12.4 | % | $ | 30,916 | 8.6 | % | ||||||||||||
Nine Months Ended September 30, 2006 | ||||||||||||||||||||||||
US | Canada | Total | ||||||||||||||||||||||
Revenue | $ | 152,940 | 100.0 | % | $ | 138,763 | 100.0 | % | $ | 291,703 | 100.0 | % | ||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Cost of operations | 106,196 | 69.4 | % | 95,177 | 68.6 | % | 201,373 | 69.0 | % | |||||||||||||||
Selling, general and administrative expense | 26,616 | 17.4 | % | 17,467 | 12.6 | % | 44,083 | 15.1 | % | |||||||||||||||
Deferred acquisition costs | 439 | 0.3 | % | 5,173 | 3.7 | % | 5,612 | 1.9 | % | |||||||||||||||
Depreciation, depletion and amortization | 16,976 | 11.1 | % | 12,718 | 9.2 | % | 29,694 | 10.2 | % | |||||||||||||||
Foreign exchange (gain) loss and other | 28 | 0.0 | % | 1,996 | 1.4 | % | 2,024 | 0.7 | % | |||||||||||||||
Income (loss) from continuing operations | $ | 2,685 | 1.8 | % | $ | 6,232 | 4.5 | % | $ | 8,917 | 3.1 | % | ||||||||||||
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