Exhibit 99.1
WASTE INDUSTRIES USA, INC. Reports First Quarter 2008 Financial Results
Raleigh, NC, Thursday, May 1, 2008 — Waste Industries USA, Inc. (NASDAQ: WWIN), a regional, non-hazardous solid waste services company, today reported preliminary financial results for the quarter ended March 31, 2008.
Revenue increased 5.4% to $85.7 million, compared to $81.3 million for the quarter ended March 31, 2007. Operating income for the quarter increased 7.7% to $12.3 million, compared to $11.4 million for the same period in 2007. Operating income as a percentage of revenue increased to 14.4% for the first quarter 2008 from 14.0% for the same period in 2007. The 2008 first quarter results include approximately $0.7 million of fees related to the proposed going private transaction ($0.4 million, net of income taxes, or $0.03 per diluted share).
Income from continuing operations for the quarter was $5.6 million, or $0.39 per diluted share, a 2.8% increase from income from continuing operations of $5.4 million, or $0.39 per diluted share, for the first quarter of 2007. Net income for the quarter was $5.6 million, or $0.39 per diluted share, compared to net income of $5.6 million, or $0.40 per diluted share, for the first quarter of 2007.
Jim W. Perry, President and CEO of the Company, stated, “Keys to our results for the quarter were our continuing efforts to improve operating efficiencies, internalize more of our waste volume and adjust our pricing to meet the changing service requirements of our customers. Our near-term focus will continue to be on ways to improve our productivity, add more customers to existing routes, and leverage our overall cost structure.”
The Company will host a conference call to discuss its first quarter results on May 2, 2008 at 2:00 PM (Eastern Time). The call number is (877) 741-4253 and the confirmation number is 2934131. The conference call will also be broadcast live over the Internet athttp://www.wasteindustries.com under the “Investor Relations” tab. A replay of the call will be available through May 16, 2008 and may be accessed by calling (888) 203-1112 and using confirmation number 2934131.
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 and Georgia.
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, risks in the development and operation of landfills, managing growth, economic trends and weather 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 March 31, | ||||||||
| 2007 | 2008 | |||||||
Revenues: | ||||||||
Service revenues | $ | 81,110 | $ | 85,499 | ||||
Equipment sales | 176 | 187 | ||||||
Total revenues | 81,286 | 85,686 | ||||||
Operating costs and expenses: | ||||||||
Operating (exclusive of depreciation and amortization shown below) | 49,841 | 52,917 | ||||||
Cost of equipment sales | 91 | 102 | ||||||
Selling, general and administrative | 11,795 | 12,101 | ||||||
Depreciation and amortization | 8,137 | 8,584 | ||||||
(Gain) loss on sale of property, equipment and other assets | 2 | (320 | ) | |||||
Total operating costs and expenses | 69,866 | 73,384 | ||||||
Operating income | 11,420 | 12,302 | ||||||
Interest expense | 2,419 | 1,990 | ||||||
Interest income | (28 | ) | (46 | ) | ||||
Other (income) expense | (92 | ) | 92 | |||||
Total other expense, net | 2,299 | 2,036 | ||||||
Income from continuing operations before income taxes | 9,121 | 10,266 | ||||||
Income tax expense | 3,687 | 4,679 | ||||||
Income from continuing operations | 5,434 | 5,587 | ||||||
Discontinued operations: | ||||||||
Income from discontinued operations, net of income taxes | 147 | — | ||||||
Net income | $ | 5,581 | $ | 5,587 | ||||
Earnings per share: | ||||||||
Basic: | ||||||||
Income from continuing operations | $ | 0.39 | $ | 0.39 | ||||
Income from discontinued operations | 0.01 | — | ||||||
Net income | $ | 0.40 | $ | 0.39 | ||||
Diluted: | ||||||||
Income from continuing operations | $ | 0.39 | $ | 0.39 | ||||
Income from discontinued operations | 0.01 | — | ||||||
Net income | $ | 0.40 | $ | 0.39 | ||||
Weighted-Average Number Of Shares Outstanding: | ||||||||
Basic | 13,999 | 14,169 | ||||||
Diluted | 14,123 | 14,265 | ||||||
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WASTE INDUSTRIES USA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
(Unaudited)
| December 31, 2007 | March 31, 2008 | |||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 4,361 | $ | 8,200 | ||
Receivables, net | 35,129 | 34,352 | ||||
Other | 5,942 | 9,149 | ||||
Total current assets | 45,432 | 51,701 | ||||
Property and equipment, net | 234,034 | 240,882 | ||||
Intangible assets, net | 118,766 | 120,495 | ||||
Other noncurrent assets | 10,801 | 7,554 | ||||
Total assets | $ | 409,033 | $ | 420,632 | ||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
Current liabilities: | ||||||
Current maturities of long-term debt | $ | 7,143 | $ | 7,143 | ||
Accounts payable - trade | 15,703 | 14,899 | ||||
Other accrued liabilities and deferred revenues | 28,165 | 33,323 | ||||
Total current liabilities | 51,011 | 55,365 | ||||
Long-term debt, net of current maturities | 157,926 | 158,355 | ||||
Deferred taxes and related contingencies | 27,121 | 27,113 | ||||
Other liabilities | 9,586 | 11,202 | ||||
Total liabilities | 245,644 | 252,035 | ||||
Shareholders’ equity: | 163,389 | 168,597 | ||||
Total liabilities and shareholders’ equity | $ | 409,033 | $ | 420,632 | ||
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WASTE INDUSTRIES USA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
| Three Months Ended March 31, | ||||||||
| 2007 | 2008 | |||||||
Operating Activities: | ||||||||
Net income | $ | 5,581 | $ | 5,587 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 8,137 | 8,584 | ||||||
Landfill accretion expense | 130 | 132 | ||||||
Amortization of debt issuance costs | 102 | 104 | ||||||
(Gain) loss on sale of property and equipment and other assets | 2 | (320 | ) | |||||
Stock compensation expense | 158 | 137 | ||||||
Deferred income taxes | 253 | 215 | ||||||
Change in fair value of commodity hedges | 1,070 | 388 | ||||||
Provision for doubtful accounts | 412 | 717 | ||||||
Changes in operating assets and liabilities, net of effects from acquisition and disposition of related businesses | 4,766 | 3,187 | ||||||
Net cash provided by operating activities | 20,611 | 18,731 | ||||||
Investing Activities: | ||||||||
Acquisitions of operations | (5,746 | ) | (4,531 | ) | ||||
Purchases of property and equipment | (4,538 | ) | (13,886 | ) | ||||
Proceeds from sale of property and equipment and other assets | 417 | 475 | ||||||
Other | (173 | ) | 2,660 | |||||
Net cash used in investing activities | (10,040 | ) | (15,282 | ) | ||||
Financing Activities: | ||||||||
Proceeds from issuance of long-term debt | 8,000 | 18,000 | ||||||
Principal payments of long-term debt | (19,674 | ) | (17,571 | ) | ||||
Principal payments of capital lease obligations | (85 | ) | (47 | ) | ||||
Excess tax benefit from stock option exercises | 91 | 2 | ||||||
Net proceeds from exercise of stock options | 807 | 6 | ||||||
Net cash (used in) provided by financing activities | (10,861 | ) | 390 | |||||
(Decrease) increase in cash and cash equivalents | (290 | ) | 3,839 | |||||
Cash and cash equivalents, beginning of period | 1,656 | 4,361 | ||||||
Cash and cash equivalents, end of period | $ | 1,366 | $ | 8,200 | ||||
Supplemental disclosures of cash flow information: | ||||||||
Cash paid for interest | $ | 2,846 | $ | 2,221 | ||||
Cash paid for taxes | $ | 154 | $ | 663 | ||||
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EARNINGS RELEASE - SUPPLEMENTAL DATA (dollars in thousands)
| QUARTER ENDED | ||||||||
| 3/31/07 | 3/31/08 | |||||||
| REVENUE MARGINS | ||||||||
Operating expenses including cost of equipment sales | 61.4 | % | 61.9 | % | ||||
S G & A | 14.5 | % | 14.1 | % | ||||
Depreciation and amortization | 10.0 | % | 10.0 | % | ||||
Interest expense, (net) | 2.9 | % | 2.3 | % | ||||
Income from continuing operations (pre-tax) | 11.2 | % | 12.0 | % | ||||
Income tax expense | 4.5 | % | 5.5 | % | ||||
Income from continuing operations | 6.7 | % | 6.5 | % | ||||
| SERVICE REVENUE MIX | ||||||||
Collection: | ||||||||
Industrial | $ | 21,824 | $ | 20,069 | ||||
Commercial | 23,159 | 24,965 | ||||||
Residential | 19,803 | 21,084 | ||||||
Disposal and transfer | 11,549 | 10,853 | ||||||
Recycling service | 1,102 | 1,122 | ||||||
Recycled commodity sales | 318 | 1,278 | ||||||
Convenience sites | 1,652 | 1,401 | ||||||
Other | 1,703 | 4,727 | ||||||
Total Service Revenue | $ | 81,110 | $ | 85,499 | ||||
| OPERATING INCOME BEFORE DEPRECIATION, AMORTIZATION AND ACCRETION* | ||||||||
Operating income | $ | 11,420 | $ | 12,302 | ||||
Accretion | 130 | 132 | ||||||
Depreciation and amortization | 8,137 | 8,584 | ||||||
Operating income before depreciation, amortization and accretion | $ | 19,687 | $ | 21,018 | ||||
| CAPITAL EXPENDITURES DETAIL | ||||||||
Collection & Transportation | $ | 3,732 | $ | 8,784 | ||||
Landfill Development | 806 | 5,102 | ||||||
Total capital expenditures | $ | 4,538 | $ | 13,886 | ||||
| FREE CASH FLOW RECONCILIATION * | ||||||||
Net cash provided by operating activities | $ | 20,611 | $ | 18,731 | ||||
Less: Capital expenditures | (4,538 | ) | (13,886 | ) | ||||
Plus: Proceeds from disposal of assets | 417 | 475 | ||||||
Free cash flow | $ | 16,490 | $ | 5,320 | ||||
| 12/31/07 | 3/31/08 | |||||||
| DEBT TO TOTAL CAPITAL | ||||||||
(includes capital leases) | 50.3 | % | 50.0 | % | ||||
| TOTAL LIABILITIES TO EQUITY | 1.5 | 1.5 | ||||||
| DAYS SALES OUTSTANDING | 32 | 31 | ||||||
| Q1 2008 | |||
| SERVICE REVENUE GROWTH | |||
Price | 1.0 | % | |
Volume | -2.3 | % | |
Energy surcharge | 2.3 | % | |
Total internal growth | 1.0 | % | |
Recycling commodities | 1.2 | % | |
Acquisitions | 3.2 | % | |
Total service revenue growth | 5.4 | % |
| * | Operating income before depreciation, amortization and accretion 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 property and equipment and other assets. Operating income before depreciation, amortization and accretion 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 definition of operating income before depreciation, amortization and accretion 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, amortization and accretion 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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