Waste Industries Usa 8-K WASTE INDUSTRIES USA, INC. Reports Third Quarter 2005 Results

Exhibit 99.1

WASTE INDUSTRIES USA, INC. Reports Third Quarter 2005 Results

Raleigh, NC, Tuesday, November 1, 2005 — Waste Industries USA, Inc. (NASDAQ: WWIN), a regional, non-hazardous solid waste services company, today reported unaudited financial results for the third quarter ended September 30, 2005.

In the second quarter of 2005, the Company sold certain operations in the Atlanta, Georgia region that qualified as discontinued operations, impacting the previously reported 2004 and 2005 results. All periods have been restated to present the results for these operations as discontinued operations.

For the quarter ended September 30, 2005, revenue increased 11.9% to $82.9 million, compared to $74.1 million for the quarter ended September 30, 2004. Operating income for the third quarter 2005 decreased 2.6% to $7.4 million, compared to $7.6 million for the same period in 2004. Income from continuing operations for the third quarter 2005 was $3.0 million, or $0.22 per diluted share, a 12.0% decrease from income from continuing operations of $3.5 million, or $0.25 per diluted share, for the third quarter of 2004.

For the nine months ended September 30, 2005, revenue increased 6.6% to $229.5 million, compared to $215.2 million for the same period in 2004. Operating income decreased 4.0% to $20.7 million, compared to $21.6 million for the same period in 2004. Income from continuing operations for the nine months ended September 30, 2005 was $8.1 million, or $0.59 per diluted share, a 12.0% decrease from income from continuing operations of $9.3 million, or $0.68 per diluted share, for the same nine-month period in 2004. Income from discontinued operations for the nine months ended September 30, 2005 was $0.1 million including the effect of a $0.4 million gain (net of income taxes) from the sale of operations.

Jim W. Perry, President and CEO of the Company, stated, “Drastically higher fuel cost and the costs we are incurring to meet Sarbanes-Oxley compliance standards are challenging, but the bright spots include strategic revenue growth and more waste internalization into our landfills.”

The Company will host a conference call to discuss its third quarter results on November 2, 2005 at 2:00 PM (Eastern Time). The call number is (800) 967-7140 and the confirmation number is 4988413. The conference call will also be broadcast live over the Internet athttp://www.waste-ind.com under the “Investor Relations” tab. A replay of the call will be available through November 15, 2005 and may be accessed by calling (888) 203-1112 and using confirmation number 4988413.

Waste Industries USA, Inc. is a vertically integrated solid waste services company that provides collection, transfer, disposal and recycling services to commercial, industrial and residential customer locations in the states of North Carolina, South Carolina, Virginia, Tennessee, Georgia and Florida.

The tables attached to this press release contain references to operating income before depreciation and amortization and free cash flow, which are considered non-GAAP financial measures. Tables reconciling operating income before depreciation and amortization and free cash flow to the appropriate GAAP measures for each period presented are included in the attached supplemental data. The Company defines free cash flow as cash flows from operating activities less capital expenditures plus proceeds from the sale of fixed assets. Operating income before depreciation and amortization and free cash flow do not represent, and should not be considered as, an alternative to net income or cash flows from operating, investing and financing activities, each as determined in accordance with GAAP. The Company’s definitions of operating income before depreciation and amortization and free cash flow might not be comparable to similarly titled measures reported by other companies. The Company has included information concerning operating income before depreciation and amortization and free cash flow because it believes that operating income before depreciation and amortization and free cash flow provide additional information for determining its ability to meet debt service requirements and that these measures are two indicators upon which the Company, its lenders and some investors assess its financial performance and its capacity to service debt. The Company therefore interprets the trends that operating income before depreciation and amortization and free cash flow depict as measures of its liquidity.

This press release contains forward-looking statements under the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified as such because the statement will include words such as the Company “believes,” “anticipates,” “expects” or words of similar import. Similarly, statements that describe the Company’s future plans, objectives or goals are also forward-looking statements. Forward-looking statements are subject to risks and uncertainties, such as fuel prices, weather conditions, managing growth, economic trends and risks in the development and operation of landfills that could cause actual results to differ materially from those currently anticipated. Consider these factors carefully in evaluating the forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in the Company’s SEC filings. The forward-looking statements made herein are only made as of the date of this press release and the Company undertakes no obligation to publicly update such forward-looking statements.

WASTE INDUSTRIES USA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In Thousands, Except Per Share Data)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2004			2005			2004			2005
Revenues:
Service	$	73,806		$	82,727		$	214,544		$	229,018
Equipment		246			150			646			461
Total revenues		74,052			82,877			215,190			229,479
Operating cost and expenses:
Operations		50,235			56,635			143,849			155,321
Equipment sales		138			83			377			287
Selling, general and administrative		9,092			11,180			27,626			31,195
Depreciation and amortization		7,001			7,756			21,859			22,244
Gain on sale of property and equipment		(63	)		(223	)		(313	)		(447	)
Impairment of property and equipment and other assets		1			—			189			143
Total operating costs and expenses		66,404			75,431			193,587			208,743
Operating income		7,648			7,446			21,603			20,736
Interest expense		2,367			2,434			7,313			7,395
Interest income		(32	)		(29	)		(82	)		(61	)
Other income		(95	)		(110	)		(176	)		(191	)
Total other expense (income) net		2,240			2,295			7,055			7,143
Income from continuing operations before income taxes		5,408			5,151			14,548			13,593
Income tax expense		1,953			2,111			5,289			5,446
Income from continuing operations		3,455			3,040			9,259			8,147
Discontinued operations:
Income (loss) from discontinued operations (net of income taxes)		(52	)		—			28			(304	)
Gain on sale of operations (net of income taxes)		—			—			—			389
Net income from discontinued operations		(52	)		—			28			85
Net income	$	3,403		$	3,040		$	9,287		$	8,232
Earnings per share:
Basic:
Income from continuing operations	$	0.25		$	0.22		$	0.69		$	0.60
Discontinued operations		—			—			—			—
Net income	$	0.25		$	0.22		$	0.69		$	0.60
Diluted:
Income from continuing operations	$	0.25		$	0.22		$	0.68		$	0.59
Discontinued operations		—			—			—			0.01
Net income	$	0.25		$	0.22		$	0.68		$	0.60
Weighted-Average Number Of Shares Outstanding:
Basic		13,509			13,706			13,502			13,640
Diluted		13,678			13,852			13,673			13,811

WASTE INDUSTRIES USA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands)

			(Unaudited)
	December 31, 2004		September 30, 2005
ASSETS
Current assets:
Cash and cash equivalents	$	2,445	$	147
Receivables, net		31,602		37,799
Other		7,028		6,510
Total current assets		41,075		44,456
Property and equipment, net		198,551		212,757
Intangible assets, net		92,702		106,079
Other noncurrent assets		4,720		4,372
Total assets	$	337,048	$	367,664
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt		10,733		10,733
Accounts payable - trade		14,627		13,683
Other accrued liabilities and deferred revenues		22,570		29,522
Total current liabilities		47,930		53,938
Long-term debt, net of current maturities		145,930		158,212
Other liabilities		25,477		28,839
Total liabilities		219,337		240,989
Shareholders’ equity:		117,711		126,675
Total liabilities and shareholders’ equity	$	337,048	$	367,664

WASTE INDUSTRIES USA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

(Unaudited)

		Nine Months Ended September 30,
		2004			2005
Operating Activities:
Net income		$	9,287		$	8,232
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			22,030			22,463
Amortization of debt issuance costs			559			762
Impairment of property and equipment and other assets			189			143
Gain on sale of property and equipment			(313	)		(447	)
Gain on sale of discontinued collection and hauling operations			—			(389	)
Stock compensation expense			21			60
Provision for deferred income taxes			—			2,062
Provision for doubtful accounts			1,492			1,651
Changes in assets and liabilities, net of effects from acquisition and disposition of related businesses			(3,088	)		(1,859	)
Net cash provided by operating activities			30,177			32,678
Investing Activities:
Acquisitions of related business, net of cash acquired			(888	)		(28,618	)
Settlement of acquisition liabilities			(843	)		(655	)
Proceeds from sale of insurance policy			—			164
Increase in restricted cash			—			(148	)
Proceeds from sale of property and equipment			1,550			1,995
Purchases of property and equipment			(20,440	)		(27,382	)
Proceeds from sale of discontinued collection and hauling operations			—			7,913
Net cash used in investing activities			(20,621	)		(46,731	)
Financing Activities:
Proceeds from issuance of long-term debt			15,000			47,697
Principal payments of long-term debt			(23,718	)		(35,415	)
Principal payments of capital lease obligations			(160	)		(150	)
Financing costs			(3	)		(59	)
Payment of dividends	��		(1,080	)		(2,191	)
Net proceeds from exercise of stock options			110			1,873
Net cash provided by (used in) financing activities			(9,851	)		11,755
Decrease in cash and cash equivalents			(295	)		(2,298	)
Cash and cash equivalents, beginning of period			4,127			2,445
Cash and cash equivalents, end of period		$	3,832		$	147
Supplemental disclosures of cash flow information:
Cash paid for interest		$	6,761		$	6,961
Cash paid for taxes		$	3,984		$	3,508

EARNINGS RELEASE - SUPPLEMENTAL DATA (dollars in thousands)

	3 Q 2004			3 Q 2005
REVENUE MARGINS
Cost of operations		68.0	%		68.4	%
S G & A		12.3	%		13.5	%
Depreciation and amortization		9.5	%		9.4	%
Interest expense, (net)		3.2	%		2.9	%
Income from continuing operations (pre-tax)		7.3	%		6.2	%
Income tax expense		2.6	%		2.5	%
Income from continuing operations		4.7	%		3.7	%
OPERATING INCOME BEFORE DEPRECIATION AND AMORTIZATION
Operating income	$	7,648		$	7,446
Depreciation and amortization		7,001			7,756
Operating income before depreciation and amortization	$	14,649		$	15,202
	YTD 04			YTD 05
CAPITAL EXPENDITURES DETAIL
Collection & Transportation	$	18,577		$	20,712
Landfill Development		1,863			6,670
Total capital expenditures	$	20,440		$	27,382
FREE CASH FLOW RECONCILIATION
Net cash provided by operating activities	$	30,177		$	32,678
Less: Capital expenditures		(20,440	)		(27,382	)
Plus: Proceeds from disposal of assets		1,550			1,995
Free cash flow	$	11,287		$	7,291
	12/31/04			9/30/05
DEBT TO TOTAL CAPITAL (includes capital leases)		57.2	%		57.2	%
TOTAL LIABILITIES TO EQUITY		1.9			1.9
DAYS SALES OUTSTANDING		36			34

	3 Q 05
SERVICE REVENUE MIX
Collection:
Industrial	27.9	%
Commercial	26.7	%
Residential	21.8	%
Disposal and transfer	16.3	%
Recycling service	1.5	%
Recycled commodity sales	1.5	%
Other	4.3	%
Total Service Revenue	100.0	%
SERVICE REVENUE GROWTH
Price	1.1	%
Volume	2.1	%
Energy surcharge	1.7	%
Total internal growth	4.9	%
Recycling commodities	-0.3	%
Acquisitions	7.5	%
Total service revenue growth	12.1	%