Exhibit 99.1
Waste Connections Reports First Quarter 2004 Results
FOLSOM, Calif.--(BUSINESS WIRE)--April 21, 2004--Waste
Connections, Inc. (NYSE:WCN)
-- Reports earnings per share of $0.53 and free cash flow of
$29.5 million, or 19.8% of revenue
-- First quarter revenue and net income increases 16.2% and
12.4%, respectively
-- Reports internal growth of 2.9% price and 1.0% volume
Waste Connections, Inc. (NYSE:WCN) today announced first quarter
earnings of $0.53 per share on 33.5 million diluted shares, an
increase of 8.2% over diluted earnings per share before a gain
resulting from the cumulative effect of adopting SFAS No. 143 of $0.49
in the first quarter of 2003. Revenue for the first quarter of 2004
was $149.3 million, a 16.2% increase over revenue of $128.5 million in
the first quarter of 2003. Operating income for the first quarter of
2004 was $35.2 million, a 6.0% increase over operating income of $33.2
million in the first quarter of 2003. Net income for the first quarter
of 2004 was $16.2 million, a 12.4% increase over net income of $14.4
million before a gain resulting from the cumulative effect of adopting
SFAS No. 143 in the first quarter of 2003.
Ronald J. Mittelstaedt, Chairman and Chief Executive Officer,
said, "We are very pleased with our first quarter performance.
Internal growth was especially strong, and free cash flow reached a
record level. The underlying performance of our business has been
trending better than expected other than rising medical costs. We are
seeing a pick up in business across all of our regions that suggest to
us that conditions overall are improving, and we believe that the
fundamentals are in place for the sequential margin improvement into
the second quarter that we had previously expected."
Waste Connections will be hosting a conference call related to
first quarter earnings and the second outlook on April 22nd at 8:30
A.M. Eastern Time. The call will be broadcast live over the Internet
at www.streetevents.com and through a link on our web site at
www.wasteconnections.com. A playback of the call will be available at
both of these sites.
Waste Connections, Inc. is an integrated solid waste services
company that provides solid waste collection, transfer, disposal and
recycling services in mostly secondary markets in the Western and
Southern U.S. The Company serves more than one million commercial,
residential and industrial customers from a network of operations in
23 states. Waste Connections, Inc. was founded in September 1997 and
is headquartered in Folsom, California. For more information, visit
the Waste Connections web site at www.wasteconnections.com. Copies of
financial literature, including this release, are available on the
Waste Connections web site or through contacting us directly at (916)
608-8200.
Certain statements contained in this press release are
forward-looking in nature. These statements can be identified by the
use of forward-looking terminology such as "believes," "expects,"
"may," "will," "should," or "anticipates" or the negative thereof or
comparable terminology, or by discussions of strategy. Waste
Connections' business and operations are subject to a variety of risks
and uncertainties and, consequently, actual results may differ
materially from those projected by any forward-looking statements.
Factors that could cause actual results to differ from those projected
include, but are not limited to, the following: (1) difficulties in
making acquisitions, acquiring exclusive contracts and generating
internal growth may cause Waste Connections' growth to be slower than
expected; (2) Waste Connections' growth and future financial
performance depend significantly on its ability to integrate acquired
businesses into its organization and operations; (3) Waste
Connections' acquisitions may not be successful, resulting in changes
in strategy, operating losses or a loss on sale of the business
acquired; (4) Waste Connections competes for acquisition candidates
with other purchasers, some of which have greater financial resources
than it does, and these other purchasers may be able to offer more
favorable acquisition terms, thus limiting Waste Connections' ability
to grow through acquisition; (5) timing of acquisitions may cause
fluctuations in Waste Connections' quarterly results, which may cause
its stock price to decline; (6) rapid growth may strain Waste
Connections' management, operational, financial and other resources;
(7) Waste Connections may be unable to compete effectively with
governmental service providers and larger and better capitalized
companies, which may result in reduced revenues and lower profits; and
(8) Waste Connections may lose contracts through competitive bidding,
early termination or governmental action, which would cause its
revenues to decline. These risks and uncertainties, as well as others,
are discussed in greater detail in Waste Connections' filings with the
Securities and Exchange Commission, including its most recent Annual
Report on Form 10-K. There may be additional risks of which Waste
Connections is not presently aware or that it currently believes are
immaterial which could have an adverse impact on its business. Waste
Connections makes no commitment to revise or update any
forward-looking statements in order to reflect events or circumstances
after the date any such statement is made.
WASTE CONNECTIONS, INC.
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31, 2003 AND 2004
(Unaudited)
(in thousands, except share and per share amounts)
Three months ended
March 31,
-----------------------
2003 2004
----------- -----------
Revenues $128,454 $149,258
Operating expenses:
Cost of operations 71,821 85,063
Selling, general and administrative 12,881 15,595
Depreciation and amortization 10,580 13,443
----------- -----------
Operating income 33,172 35,157
Interest expense (8,050) (6,823)
Minority interests (2,282) (2,631)
Other income 38 76
----------- -----------
Income before income tax provision and
cumulative effect of change
in accounting principle 22,878 25,779
Income tax provision (8,465) (9,577)
----------- -----------
Income before cumulative effect of change in
accounting principle 14,413 16,202
Cumulative effect of change in accounting
principle, net of tax expense of $166 282 -
----------- -----------
Net income $14,695 $16,202
=========== ===========
Basic earnings per common share:
Income before cumulative effect of change in
accounting principle $ 0.51 $ 0.56
Cumulative effect of change in accounting
principle 0.01 -
----------- -----------
Net income per common share $0.52 $0.56
=========== ===========
Diluted earnings per common share(a):
Income before cumulative effect of change in
accounting principle $ 0.49 $ 0.53
Cumulative effect of change in accounting
principle 0.01 -
----------- -----------
Net income per common share $0.50 $0.53
=========== ===========
Shares used in the per share calculations:
Basic 28,080,260 28,856,746
=========== ===========
Diluted 32,656,498 33,456,468
=========== ===========
Supplemental information:
Operating income before depreciation and
amortization(b) $43,752 $48,600
(a) Diluted earnings per share assumes conversion of the 5.5%
Convertible Subordinated Notes due 2006. The interest expense
related to these notes, net of tax effects, for the three months
ended March 31, 2003 and 2004 was $1,476 and $1,476, respectively.
(b) A non-GAAP measure; see accompanying Non-GAAP Reconciliation
Schedule.
WASTE CONNECTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except share and per share amounts)
December 31, March 31,
2003 2004
----------- -----------
ASSETS
Current assets:
Cash and equivalents $5,276 $4,911
Accounts receivable, less allowance for
doubtful accounts of $2,570 and $2,440 at
December 31, 2003 and March 31, 2004,
respectively 72,474 70,049
Prepaid expenses and other current assets 11,270 10,719
----------- -----------
Total current assets 89,020 85,679
Property and equipment, net 613,225 620,257
Goodwill, net 590,054 599,713
Intangible assets, net 64,784 69,012
Restricted cash 17,734 16,537
Other assets, net 21,135 20,418
----------- -----------
$1,395,952 $1,411,616
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $38,682 $37,320
Accrued liabilities 31,920 35,866
Deferred revenue 23,738 25,329
Current portion of long-term debt and notes
payable 9,740 9,674
----------- -----------
Total current liabilities 104,080 108,189
Long-term debt and notes payable 601,891 580,770
Other long-term liabilities 8,400 8,752
Deferred income taxes 120,162 125,800
----------- -----------
Total liabilities 834,533 823,511
Commitments and contingencies
Minority interests 23,925 23,617
Stockholders' equity:
Preferred stock: $0.01 par value; 7,500,000
shares authorized; none issued and
outstanding - -
Common stock: $0.01 par value; 50,000,000
shares authorized; 28,666,788 and 29,086,180
shares issued and outstanding at December 31,
2003 and March 31, 2004, respectively 287 291
Additional paid-in capital 348,146 362,818
Deferred stock compensation (436) (2,468)
Retained earnings 189,094 205,296
Accumulated other comprehensive income (loss) 403 (1,449)
----------- -----------
Total stockholders' equity 537,494 564,488
----------- -----------
$1,395,952 $1,411,616
----------- -----------
WASTE CONNECTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2003 AND 2004
(Unaudited)
(Dollars in thousands)
Three months ended
March 31,
-----------------
2003 2004
-------- --------
Cash flows from operating activities:
Net income $14,695 $16,202
Adjustments to reconcile net income to
net cash provided by operating activities:
Gain on disposal of assets (67) (38)
Depreciation 10,235 12,828
Amortization of intangibles 345 615
Deferred income taxes 4,232 5,495
Minority interests 2,282 2,631
Cumulative effect of change in accounting principle (448) -
Amortization of debt issuance costs 591 625
Stock-based compensation 55 200
Interest income on restricted cash (24) (70)
Closure and post-closure accretion 107 103
Net change in operating assets and liabilities, net
of acquisitions 4,167 9,298
-------- --------
Net cash provided by operating activities 36,170 47,889
-------- --------
Cash flows from investing activities:
Payments for acquisitions, net of cash acquired (3,573) (6,081)
Capital expenditures for property and equipment (11,841) (15,628)
Proceeds from disposal of assets 89 184
Net change in other assets (1,186) 1,326
-------- --------
Net cash used in investing activities (16,511) (20,199)
-------- --------
Cash flows from financing activities:
Proceeds from long-term debt 11,500 21,500
Principal payments on notes payable and long-
term debt (30,344) (56,963)
Distributions to minority interest holders (2,156) (2,940)
Proceeds from option and warrant exercises 2,086 10,585
Debt issuance costs (7) (237)
-------- --------
Net cash used in financing activities (18,921) (28,055)
-------- --------
Net increase (decrease) in cash and equivalents 738 (365)
Cash and equivalents at beginning of period 4,067 5,276
-------- --------
Cash and equivalents at end of period $4,805 $4,911
-------- --------
Non-cash financing activity:
Liabilities assumed and notes payable issued to
sellers $ - $14,105
ADDITIONAL STATISTICS
THREE MONTHS ENDED MARCH 31, 2004
(Dollars in thousands)
Internal Growth
The following table reflects revenue growth for operations owned
for at least 12 months:
Price 2.9%
Volume 1.0%
Recycling 0.7%
------------
Total 4.6%
Uneliminated Revenue Breakdown:
Collection $113,483 66.4%
Disposal and Transfer 49,995 29.2%
Recycling and Other 7,465 4.4%
----------- ----------
Total $170,943 100.0%
Inter-company elimination $21,685
Days Sales Outstanding: 42.2
Internalization: 68.8%
Other Cash Flow Items:
Cash Interest Paid: $3,861
Cash Taxes Paid: $2,475
Debt to Capitalization: 51.1%
Total Debt divided by Total Debt plus Total Stockholders' Equity:
($580,770 + $9,674) / ($580,770 + $9,674 + $564,488) = 51.1%
NON-GAAP RECONCILIATION SCHEDULE
(Dollars in thousands)
Operating income before depreciation and amortization and free cash
flow, each a non-GAAP financial measure, are provided supplementally
because they are widely used by investors as valuation and financial
performance measures in the solid waste industry. These measures
should be used in conjunction with GAAP financial measures. Management
uses operating income before depreciation and amortization and free
cash flow as two of the principal measures to evaluate and monitor the
ongoing financial performance of our operations. Other companies may
calculate operating income before depreciation and amortization and
free cash flow differently.
Operating income before depreciation and amortization reconciliation:
Three Months Ended Three Months Ended
March 31, 2003 March 31, 2004
------------------ ------------------
Operating income $33,172 $35,157
Depreciation and amortization 10,580 13,443
------------------ ------------------
Operating income before
depreciation and amortization $43,752 $48,600
------------------ ------------------
Operating income before
depreciation and amortization
as a % of revenues 34.1% 32.6%
Free cash flow reconciliation:
Three Months Ended
March 31, 2004
-------------------
Net cash provided by operating activities $47,889
Plus: Proceeds from disposal of assets 184
Less: Capital expenditures (15,628)
Less: Distributions to minority interest holders (2,940)
-------------------
Free cash flow $29,505
-------------------
Free cash flow as a % of revenues 19.8%
CONTACT: Waste Connections, Inc.
Worthing Jackman, 916-608-8266
worthingj@wasteconnections.com