Waste Industries Usa 8-K WASTE INDUSTRIES USA, INC. Reports Fourth Quarter and Full Year 2005 Results

EXHIBIT 99.1

WASTE INDUSTRIES USA, INC. Reports Fourth Quarter and Full Year 2005 Results

Raleigh, NC, Tuesday, February 28, 2006 — Waste Industries USA, Inc. (NASDAQ: WWIN), a regional, non-hazardous solid waste services company, today reported preliminary financial results for the fourth quarter and year ended, December 31, 2005. In the second and fourth quarters 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 December 31, 2005, revenue increased 14.2% to $80.8 million, compared to $70.7 million for the quarter ended December 31, 2004. Operating income for the fourth quarter 2005 increased 36.2% to $9.0 million, compared to $6.6 million for the same period in 2004. Income from continuing operations for the fourth quarter 2005 was $3.9 million, or $0.28 per diluted share, a 55.5% increase from income from continuing operations of $2.5 million, or $0.18 per diluted share, for the fourth quarter of 2004. Loss from discontinued operations for the fourth quarter 2005 was $0.2 million (net of income taxes) due primarily to a loss from the sale of operations.

For the twelve months ended December 31, 2005, revenue increased 8.5% to $310.2 million, compared to $285.9 million for the same period in 2004. Operating income increased 5.4% to $29.7 million, compared to $28.2 million for the same period in 2004. Income from continuing operations for the twelve months ended December 31, 2005 was $12.1 million, or $0.88 per diluted share, a 2.5% increase from income from continuing operations of $11.8 million, or $0.86 per diluted share, for the same twelve-month period in 2004. Loss from discontinued operations for the twelve months ended December 31, 2005 was $0.1 million including the effect of a $0.2 million gain (net of income taxes) from the sale of operations.

Jim W. Perry, President and CEO of the Company, stated, “Our ongoing initiatives to achieve productivity gains, improve pricing, internalize more of our waste, and execute a disciplined growth strategy are showing positive results. And we believe the momentum achieved in 2005 will help to strengthen our performance in 2006.”

The Company will host a conference call to discuss its fourth quarter results on March 1, 2006 at 2:00 PM (Eastern Time). The call number is (800) 262-1292 and the confirmation number is 3994388. 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 March 15, 2006 and may be accessed by calling (888) 203-1112 and using confirmation number 3994388.

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, Mississippi, Georgia and Florida.

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 performance 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.

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WASTE INDUSTRIES USA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In Thousands, Except Per Share Data)

(Unaudited)

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2004			2005			2004			2005
Revenues:
Service revenues	$	70,471		$	80,573		$	285,015		$	309,591
Equipment revenues		215			180			861			641
Total revenues		70,686			80,753			285,876			310,232
Operating cost and expenses:
Operations		47,712			53,099			191,559			208,421
Equipment sales		93			97			470			384
Selling, general and administrative		11,824			11,244			39,449			42,439
Depreciation and amortization		7,390			8,257			29,249			30,501
Gain on sale of property and equipment and other assets		(903	)		(926	)		(1,274	)		(1,372	)
Gain on sale of collection and hauling operations		(3,541	)		—			(3,482	)		(2	)
Impairment of property and equipment and other assets		1,518			—			1,707			143
Total operating costs and expenses		64,093			71,771			257,678			280,514
Operating income		6,593			8,982			28,198			29,718
Interest expense		2,618			2,438			9,931			9,833
Interest income		(47	)		(35	)		(128	)		(96	)
Other		(128	)		(40	)		(304	)		(231	)
Total other expense, net		2,443			2,363			9,499			9,506
Income from continuing operations before income taxes		4,150			6,619			18,699			20,212
Provision for income taxes		1,616			2,679			6,906			8,125
Income from continuing operations		2,534			3,940			11,793			12,087
Discontinued operations:
(Loss) income from discontinued operations, net of income taxes		(24	)		(9	)		4			(312	)
(Loss) gain on sale of operations, net of income taxes		—			(205	)		—			184
(Loss) income from discontinued operations		(24	)		(214	)		4			(128	)
Net income	$	2,510		$	3,726		$	11,797		$	11,959
Earnings per share:
Basic:
Income from continuing operations	$	0.19		$	0.29		$	0.87		$	0.88
Discontinued operations		—			(0.02	)		—			(0.01	)
Net income	$	0.19		$	0.27		$	0.87		$	0.87
Diluted:
Income from continuing operations	$	0.18		$	0.28		$	0.86		$	0.88
Discontinued operations		—			(0.01	)		—			(0.01	)
Net income	$	0.18		$	0.27		$	0.86		$	0.87
Weighted-Average Number Of Shares Outstanding:
Basic		13,492			13,723			13,497			13,661
Diluted		13,672			13,871			13,665			13,821

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WASTE INDUSTRIES USA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands)

(Unaudited)

	December 31, 2004		December 31, 2005
ASSETS
Current assets:
Cash and cash equivalents	$	2,445	$	1,575
Receivables, net		31,602		36,193
Other		7,028		4,136
Total current assets		41,075		41,904
Property and equipment, net		198,551		216,390
Intangible assets, net		92,702		105,925
Other noncurrent assets		4,720		3,952
Total assets	$	337,048	$	368,171
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt		10,733		10,733
Accounts payable - trade		14,627		16,579
Other accrued liabilities and deferred revenues		22,570		28,929
Total current liabilities		47,930		56,241
Long-term debt, net of current maturities		145,930		155,212
Other liabilities		25,477		27,219
Total liabilities		219,337		238,672
Shareholders’ equity:		117,711		129,499
Total liabilities and shareholders’ equity	$	337,048	$	368,171

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WASTE INDUSTRIES USA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

(Unaudited)

	Twelve Months Ended December 31,
	2004			2005
Operating Activities:
Net income	$	11,797		$	11,959
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization		29,450			30,720
Amortization of debt issuance costs		744			967
Impairment of property and equipment and other assets		1,707			143
Gain on sale of property and equipment and other assets		(1,274	)		(1,372	)
Gain on sale of collection and hauling operations		(3,482	)		(182	)
Stock compensation expense		48			79
Provision for deferred income taxes		2,525			332
Provision for doubtful accounts		3,687			2,091
Changes in assets and liabilities, net of effects from acquisition and disposition of related businesses		1,679			1,633
Net cash provided by operating activities		46,881			46,370
Investing Activities:
Acquisitions of related business, net of cash acquired		(21,785	)		(31,937	)
Settlement of acquisition liabilities		(1,537	)		(297	)
Proceeds from insurance		—			290
Increase in restricted cash		—			(175	)
Proceeds from sale of property and equipment		3,220			3,415
Purchases of property and equipment		(32,199	)		(34,264	)
Proceeds from sale of collection and hauling operations		17,694			7,988
Net cash used in investing activities		(34,607	)		(54,980	)
Financing Activities:
Proceeds from issuance of long-term debt		19,010			47,697
Principal payments of long-term debt		(30,727	)		(38,415	)
Principal payments of capital lease obligations		(160	)		(212	)
Financing costs		(39	)		(68	)
Payment of dividends		(2,161	)		(3,290	)
Net proceeds from exercise of stock options		121			2,028
Net cash (used in) provided by financing activities		(13,956	)		7,740
Decrease in cash and cash equivalents		(1,682	)		(870	)
Cash and cash equivalents, beginning of period		4,127			2,445
Cash and cash equivalents, end of period	$	2,445		$	1,575

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EARNINGS RELEASE - SUPPLEMENTAL DATA (dollars in thousands)

	YEAR ENDED
REVENUE MARGINS	12/31/04			12/31/05
Cost of operations		67.2	%		67.3	%
S G & A		13.8	%		13.7	%
Depreciation and amortization		10.2	%		9.8	%
Interest expense, (net)		3.4	%		3.1	%
Income from continuing operations (pre-tax)		6.5	%		6.5	%
Income tax expense		2.4	%		2.6	%
Income from continuing operations		4.1	%		3.9	%
OPERATING INCOME BEFORE DEPRECIATION AND AMORTIZATION *
Operating income	$	28,198		$	29,718
Depreciation and amortization		29,249			30,501
Operating income before depreciation and amortization	$	57,447		$	60,219
CAPITAL EXPENDITURES DETAIL
Collection & Transportation	$	20,782		$	21,493
Landfill Development		11,417			12,771
Total capital expenditures	$	32,199		$	34,264
FREE CASH FLOW RECONCILIATION *
Net cash provided by operating activities	$	46,881		$	46,370
Less: Capital expenditures		(32,199	)		(34,264	)
Plus: Proceeds from disposal of assets		3,220			3,415
Free cash flow	$	17,902		$	15,521
DEBT TO TOTAL CAPITAL		57.2	%		56.3	%
(includes capital leases)
TOTAL LIABILITIES TO EQUITY		1.9			1.8
DAYS SALES OUTSTANDING		36			34
SERVICE REVENUE MIX
Collection:
Industrial		30.6	%		27.9	%
Commercial		26.9	%		27.2	%
Residential		19.5	%		21.1	%
Disposal and transfer		15.7	%		16.3	%
Recycling service		1.8	%		1.6	%
Recycled commodity sales		1.7	%		1.5	%
Other		3.8	%		4.4	%
Total Service Revenue		100.0	%		100.0	%
SERVICE REVENUE GROWTH
Price		0.8	%		0.8	%
Volume		3.2	%		1.9	%
Energy surcharge		0.2	%		1.0	%
Total internal growth		4.2	%		3.7	%
Recycling commodities		0.4	%		-0.1	%
Acquisitions		3.4	%		5.0	%
Total service revenue growth		8.0	%		8.6	%

* Operating income before depreciation and amortization and free cash flow are considered non-GAAP financial measures. 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 believes that the presentation of operating income before depreciation and amortization is useful to investors because it provides important information of the Company’s operating performance exclusive of certain non-cash costs. The Company has included information concerning free cash flow because it believes it provides additional information for determining its ability to meet debt service requirements and that this measure is an indicator upon which the Company, its lenders and some investors assess its financial performance and its capacity to service debt. The Company therefore interprets free cash flow trends as a measure of its liquidity.

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