Exhibit 99.1
WCA Waste Corporation Announces Fourth
Quarter and 2004 Full Year Results
HOUSTON--(BUSINESS WIRE)--Feb. 28, 2005--WCA Waste Corporation
(Nasdaq:WCAA) announced today financial results for the fourth quarter
and full year ended December 31, 2004. Revenue for the fourth quarter
of 2004 was $20.6 million, a 28.5% increase over the $16.0 million
reported for the same period in 2003. Operating income for the fourth
quarter of 2004 was $2.3 million. This compares to operating income of
$1.9 million, for the same period last year.
Adjusted net income (a non-GAAP measure) for the fourth quarter of
2004, was $1.1 million, or $0.07 per share. Net income for the quarter
was $692,000, or $0.05 per share on 14.9 million diluted shares
outstanding. Net income was $320,000, or $0.04 per share on 8.0
million diluted shares outstanding, for the same period last year.
For the full year ended December 31, 2004, the Company reported
revenue of $73.5 million, a 14.4% increase over the $64.2 million
reported for the full year in 2003. Adjusted operating income (a
non-GAAP measure) for the full year ended December 31, 2004 was $9.5
million, resulting in adjusted net income (a non-GAAP measure) of $3.5
million, or $0.30 per share (on 11.6 million diluted shares
outstanding). For the year ended December 31, 2004, the Company had an
operating loss of $2.0 million, resulting in a net loss of $4.4
million, or a loss of $0.38 per share (on 11.6 million diluted shares
outstanding). For the full year ended December 31, 2003, adjusted
operating income (a non-GAAP measure) was $10.8 million, resulting in
adjusted net income (a non-GAAP measure) of $3.5 million, or $0.43 per
share (on 8.0 million diluted shares outstanding). For the full year
ended December 31, 2003, operating income was $9.6 million, resulting
in net income of $5.1 million, or $0.63 per share (on 8.0 million
diluted shares outstanding).
Tom J. Fatjo, Jr., Chairman and Chief Executive Officer, stated,
"We are pleased with our financial and operational results for the
year ended December 31, 2004. Our acquisition program has remained
active. We are planning on closing the previously announced
acquisition of two landfills in North Carolina in the near future.
After closing this transaction, the Company will have completed nine
acquisitions totaling $34 million in annual "run rate" revenue since
completing its initial public offering in June 2004. We have entered
into letters of intent with two separate companies that collectively
have estimated annualized "run rate" revenue of approximately $10
million and we have several ongoing negotiations with other waste
companies concerning potential acquisitions. We expect that our
acquisition program will significantly increase revenue and profit
over the long-term. In the short-term, as expected, the cost of
acquiring and integrating companies will continue to put pressure on
operating results. Some synergies from tuck-in acquisitions can take
as long as twelve-months to be realized. As we have stated, the
additional cost of being a public company is approximately $500,000 a
quarter or $2 million annually." The Company will be providing more
detailed guidance on our conference call scheduled for 8:30 a.m. (EST)
tomorrow.
"Run rate" determinations are made based on estimations from
information provided to the Company by the acquisition candidates and
"run rate" measures are not audited or based on GAAP. Management
determines the period over which to calculate a run rate based on
factors it deems to be reasonable. Actual revenues may or may not
equal the estimated run rate. For a description of the Company's
general acquisition strategy and goals, please refer to the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30,
2004, available through the Company's website at www.wcawaste.com.
This press release contains certain non-GAAP financial measures as
mentioned above. "Adjusted operating income" and "adjusted net income"
both exclude a one-time reorganization charge that occurred as a
result of the cancellation of options and warrants prior to the
Company's initial public offering; "adjusted net income" also excludes
write-offs of deferred financing costs, discontinued operations, and
cumulative effect of change in accounting principle. A description of
these measures, a reconciliation of the non-GAAP financial measures to
their most directly comparable GAAP financial measure and a statement
disclosing the reasons why management believes the presentation of the
non-GAAP financial measures provide useful information to investors
regarding the Company's financial condition and results of operations
are set forth below under "Non-GAAP Financial Measures."
The Company anticipates utilizing non-GAAP financial measures in
tomorrow's earnings release conference call. The reconciliations to
the non-GAAP financial measures to be discussed on the conference call
and contained in this press release are set forth below under
"Non-GAAP Financial Measures." This press release and the current
report on Form 8-K that will furnish this press release with the
Securities and Exchange Commission will be posted on the Investor
Relations portion of the Company's website at www.wcawaste.com.
WCA Waste Corporation is an integrated company engaged in the
transportation, processing and disposal of non-hazardous solid waste.
The Company's operations consists of fifteen landfills, twelve
transfer stations and twenty collection operations located throughout
Alabama, Arkansas, Kansas, Missouri, South Carolina, Tennessee and
Texas. The Company's common stock is traded on the NASDAQ National
Market System under the symbol "WCAA."
The Company will host a conference call tomorrow at 8:30 a.m.
(EST). The call-in number is (800) 561-2693 and the pass code is
23318759. The call is also being broadcasted through a link on the
Company's website at www.wcawaste.com.
RISK FACTORS AND CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING
STATEMENTS
This press release and other communications, such as conference
calls, presentations, statements in public filings, other press
releases, include forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the
Securities and Exchange Act of 1934. Forward-looking statements
generally include discussions and descriptions other than historical
information. These statements can generally be identified as such
because the context of the statement will include words such as "may,"
"will," "should," "outlook," "project," "intend," "seek," "plan,"
"believe," "anticipate," "expect," "estimate," "potential,"
"continue," or "opportunity," the negatives of these words, or similar
words or expressions. Similarly, statements that describe our plans,
objectives, goals, expectations or intentions and other statements
that are not historical facts are forward-looking statements.
Descriptions of strategy and "run rates" are also forward-looking
statements. This is true of our description of our acquisition
strategy and the benefits of any acquisition or potential acquisition,
for example. 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 to
reflect subsequent events or circumstances.
Forward-looking statements are based upon the current beliefs and
expectations of WCA's management and are subject to significant risks
and uncertainties. Since WCA's business, operations and strategies are
subject to a number of risks, uncertainties and other factors, actual
results may differ materially from those described in the
forward-looking statements. Some of the risks and uncertainties have
been more fully described in "Risk Factors and Cautionary Statement
about Forward-Looking Statements" in our Quarterly Report on Form 10-Q
with respect to the quarterly period ended September 30, 2004.
As to acquisitions and acquisition strategies, on which our future
financial performance will significantly depend, risks and
uncertainties include, without limitation: we may be unable to
identify, complete or integrate future acquisitions successfully; we
compete for acquisition candidates with other purchasers, some of
which have greater financial resources and may be able to offer more
favorable terms; revenue and other synergies from acquisitions may not
be fully realized or may take longer to realize than expected; we may
not be able to improve internalization rates by directing waste
volumes from acquired businesses to our landfills for regulatory,
business or other reasons; businesses that we acquire may have unknown
liabilities and require unforeseen capital expenditure; changes or
disruptions associated with making acquisitions may make it more
difficult to maintain relationships with customers of the acquired
businesses; in connection with financing acquisitions, we may incur
additional indebtedness, or may issue additional shares of our common
stock which would dilute the ownership percentage of existing
stockholders; and rapid growth may strain our management, operational,
financial and other resources.
Moreover, our results will be subject to a number of operational
and other risks, including the following: we may not be successful in
expanding the permitted capacity of our current or future landfills;
our business is capital intensive, requiring ongoing cash outlays that
may strain or consume our available capital; increases in the costs of
disposal, labor and fuel could reduce operating margins; increases in
costs of insurance or failure to maintain full coverage could reduce
operating income; we may be unable to obtain financial assurances
necessary for our operations; we are subject to environmental and
safety laws, which restrict our operations and increase our costs, and
may impose significant unforeseen liabilities; we compete with large
companies and municipalities with greater financial and operational
resources, and we also compete with alternatives to landfill disposal;
covenants in our credit facilities and the instruments governing our
other indebtedness may limit our ability to grow our business and make
capital expenditures; changes in interest rates may affect our results
of operations; a downturn in U.S. economic conditions or the economic
conditions in our markets may have an adverse impact on our business
and results of operations; and our success depends on key members of
our senior management, the loss of any of whom could disrupt our
customer and business relationships and our operations.
In our filings with the Securities and Exchange Commission
(including the registration statement on Form S-1 that we filed in
connection with our initial public offering and our quarterly report
on Form 10-Q for the quarter ended September 30, 2004) we describe the
foregoing risks and uncertainties, along with others, in greater
detail.
WCA Waste Corporation
Condensed Consolidated Statement of Operations
(Unaudited)
Three Months Ended Fiscal Year Ended
December 31, December 31,
------------------- ------------------
2004 2003 2004 2003
--------- --------- --------- --------
(In thousands, except per share amounts)
Revenue $20,614 $16,039 $73,461 $64,226
Expenses:
Cost of services 14,646 10,405 50,130 41,459
Depreciation and amortization 2,460 2,148 8,828 7,812
Accretion expense 65 52 257 207
General and administrative:
Stock-based compensation - 623 11,532 1,220
Other general and
administrative 1,118 934 4,751 3,922
--------- --------- --------- --------
18,289 14,162 75,498 54,620
--------- --------- --------- --------
Operating income (loss) 2,325 1,877 (2,037) 9,606
Other income (expense):
Interest expense, net (1,059) (1,313) (4,453) (5,220)
Write-off of deferred
financing costs (618) - (618) -
Other 1 (4) 268 28
--------- --------- --------- --------
(1,676) (1,317) (4,803) (5,192)
--------- --------- --------- --------
Income (loss) from continuing
operations before income taxes
and cumulative effect of change
in accounting principle 649 560 (6,840) 4,414
Income tax (provision) benefit 43 (225) 2,476 (1,753)
--------- --------- --------- --------
Income (loss) from continuing
operations before cumulative
effect of change in
accounting principle 692 335 (4,364) 2,661
Loss from discontinued
operations, net of tax - (2) - (156)
Gain (loss) on disposal of
discontinued operations, net
of tax - (13) - 249
--------- --------- --------- --------
Income (loss) before cumulative
effect of change in accounting
principle 692 320 (4,364) 2,754
Cumulative effect of change in
accounting principle, net of
tax - - - 2,324
--------- --------- --------- --------
Net income (loss) $692 $320 $(4,364) $5,078
========= ========= ========= ========
PER SHARE DATA (Basic and
diluted):
Income (loss) from continuing
operations before cumulative
effect of change in
accounting principle $0.05 $0.04 $(0.38) $0.33
Loss from discontinued
operations, net of tax - (0.00) - (0.02)
Gain (loss) on disposal of
discontinued operations, net
of tax - (0.00) - 0.03
--------- --------- --------- --------
Income (loss) before cumulative
effect of change in accounting
principle 0.05 0.04 (0.38) 0.34
Cumulative effect of change in
accounting principle, net of
tax - - - 0.29
--------- --------- --------- --------
Net income (loss) $0.05 $0.04 $(0.38) $0.63
========= ========= ========= ========
WEIGHTED AVERAGE SHARES
OUTSTANDING (Basic) 14,853 8,000 11,599 8,000
--------- --------- --------- --------
WEIGHTED AVERAGE SHARES
OUTSTANDING (Diluted) 14,862 8,000 11,599 8,000
--------- --------- --------- --------
Non-GAAP Financial Measures
- ----------------------------------------------------------------------
Three Months Ended Fiscal Year Ended
December 31, December 31,
------------------- -------------------
(a) Adjusted net income to
exclude stock-based
compensation charge, write-
off of deferred financing
costs, discontinued
operations and cumulative
effect of change in
accounting principle 2004 2003 2004 2003
--------- --------- --------- ---------
Net income (loss) in
accordance with GAAP $692 $320 $(4,364) $5,078
Stock-based compensation,
net of tax - 405 7,496 793
Write-off of deferred
financing costs, net of
tax 383 - 383 -
Discontinued operations,
net of tax - 15 - (93)
Cumulative effect of change
in accounting principle,
net of tax - - - (2,324)
--------- --------- --------- ---------
Adjusted net income $1,075 $740 $3,515 $3,454
========= ========= ========= =========
PER SHARE DATA (Basic and
diluted):
Adjusted net income to
exclude stock-based
compensation charge, write-
off of deferred financing
costs, discontinued
operations and cumulative
effect of change in
accounting principle $0.07 $0.09 $0.30 $0.43
========= ========= ========= =========
WEIGHTED AVERAGE SHARES
OUTSTANDING (Basic) 14,853 8,000 11,599 8,000
--------- --------- --------- ---------
WEIGHTED AVERAGE SHARES
OUTSTANDING (Diluted) 14,862 8,000 11,601 8,000
--------- --------- --------- ---------
- ----------------------------------------------------------------------
Three Months Ended Fiscal Year Ended
December 31, December 31,
------------------- -------------------
(b) Adjusted operating income
before stock-based
compensation charge,
depreciation, amortization
and accretion 2004 2003 2004 2003
--------- --------- --------- ---------
Operating income (loss) $2,325 $1,877 $(2,037) $9,606
Stock-based compensation
charge - 623 11,532 1,220
Plus: Depreciation and
amortization 2,460 2,148 8,828 7,812
Plus: Accretion expense 65 52 257 207
--------- --------- --------- ---------
Adjusted operating income
before stock-based
compensation charge,
depreciation, amortization
and accretion $4,850 $4,700 $18,580 $18,845
========= ========= ========= =========
- ----------------------------------------------------------------------
Three Months Ended Fiscal Year Ended
December 31, December 31,
------------------- -------------------
(c) Adjusted Operating Income 2004 2003 2004 2003
--------- --------- --------- ---------
Operating income (loss) $2,325 $1,877 $(2,037) $9,606
Stock-based compensation
charge - 623 11,532 1,220
--------- --------- --------- ---------
Adjusted Operating Income $2,325 $2,500 $9,495 $10,826
========= ========= ========= =========
- ----------------------------------------------------------------------
In addition to disclosing financial results in accordance with
generally accepted accounting principles (GAAP), the Company also
discloses (a) Adjusted net income to exclude stock-based compensation
charge, write-off of deferred financing costs, discontinued operations
and a change in accounting principle and (b) Adjusted operating income
before stock-based compensation charge, depreciation, amortization and
accretion and (c) Adjusted operating income, all of which are non-GAAP
measures.
(a) Net income excluding the tax-effected impact of the stock-based
compensation charge, discontinued operations, write-off of
deferred financing costs and cumulative effect of change in
accounting principle.
(b) Adjusted operating income before depreciation, amortization and
accretion excludes the stock-based compensation charge and
non-cash charges for depreciation, amortization and accretion.
(c) The Company recorded a $11.5 million one-time expense ($7.5
million net of a tax benefit) as a result of its pre-IPO
reorganization whereby substantially all of the Company's
outstanding options and warrants were exchanged for common stock
of the Company.
While these measures are not calculated or presented in accordance
with GAAP, we believe that these supplemental financial measures are
useful in determining:
-- the financial performance of our assets without regard to
financing methods, capital structures or historical cost
basis;
-- the ability of our assets to generate cash sufficient to pay
interest on our credit facilities;
-- operating results without regard to a one-time charge
associated with an internal reorganization preceding our IPO;
-- our operating performance and return on invested capital as
compared to those of other companies in the non-hazardous
solid waste management business, without regard to financing
methods and capital structure; and
-- our compliance with certain financial covenants included in
our debt agreements.
Management uses adjusted operating income before stock-based
compensation charge, depreciation, amortization and accretion to
evaluate the operations of its geographic operating areas.
Furthermore, we believe this information is helpful in evaluating
similar companies with differing capital structures. While
depreciation, amortization and accretion are operating costs under
GAAP, we believe these expenses primarily represent the allocation of
costs associated with long-lived assets acquired or constructed in
prior years. Additionally, while stock-based compensation is an
operating expense under GAAP, the stock-based compensation charge that
we have reflected during the second quarter of 2004 represents the
impact of a one-time conversion of outstanding options and warrants in
connection with a pre-IPO reorganization.
These non-GAAP measures should not be considered an alternative to net
income, net income per share, operating income, cash flow from
operating activities or any other measure of financial performance or
liquidity presented in accordance with GAAP. The measures above
exclude some, but not all, items that affect net income and operating
income, and these measures may vary among other companies. Therefore,
the measures above may not be comparable to similarly titled measures
of other companies.
CONTACT: WCA Waste Corporation, Houston
Tommy Fatjo, 713-292-2400