UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 28, 2005
WCA Waste Corporation
(Exact name of registrant as specified in its charter)
Delaware 000-50808 20-0829917
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
One Riverway, Suite 1400
Houston, Texas 77056
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 292-2400
NOT APPLICABLE
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
On April 28, 2005 (the "Closing Date"), WCA Waste Systems, Inc. ("WSI"),
the primary operating subsidiary of WCA Waste Corporation ("WCA Waste"),
replaced its Fourth Amended and Restated Credit Agreement, dated as of December
21, 2004 (the "Fourth Restated Credit Agreement"), by entering into a First Lien
Credit Agreement (the "First Lien Credit Agreement") with Wells Fargo Bank,
National Association ("Wells Fargo"), as administrative agent, Comerica Bank, as
syndication agent, and the lenders party thereto. On the Closing Date, WSI also
entered into a Second Lien Credit Agreement (the "Second Lien Credit Agreement"
and together with the First Lien Credit Agreement, the "Credit Agreements") with
Wells Fargo, as administrative agent, and Ares Capital Corporation, as the
primary lender. The following is a summary description of the material terms of
the Credit Agreements and, as such, is not complete. The Credit Agreements will
be filed as exhibits to WCA Waste's Quarterly Report on Form 10-Q for the
quarter ended March 31, 2005 which will be filed in the next two weeks.
The aggregate revolving credit commitments available under the First Lien
Credit Agreement total $175 million, consisting of a $75 million revolving line
of credit and a $100 million Term B loan (the "Term B Loan"). The Second Lien
Credit Agreement provides for a second lien term loan in the amount of $25
million (the "Second Lien Term Loan"). Accordingly, the total credit available
immediately under the Credit Agreements is $200 million. The proceeds of the
Credit Agreements will be used for acquisitions, equipment purchases, landfill
construction and development, standby letters of credit and general corporate
purposes. Subcategories under the revolving line of credit include a subfacility
for standby letters of credit in the aggregate principal amount of up to $30
million and a swing line feature for up to $10 million for same day advances.
WSI has the right to increase either the revolving or the Term B commitment
under the First Lien Credit Agreement by an additional $20 million ($25 million
if Wells Fargo, as administrative agent, in its sole discretion, approves of the
last $5 million), provided that one or more lenders party to the First Lien
Credit Agreement or one or more new lenders approved by WSI provides such
increase and certain other conditions are satisfied.
As of the April 29, 2005, WSI had fully drawn down the Term B Loan and the
Second Lien Term Loan and had utilized approximately $26.9 million of the
revolving facility for letters of credit, leaving it with $48.1 million in
availability under the First Lien Credit Agreement revolving credit loan.
Additionally, the Company has approximately $30 million in cash on hand.
WSI must make mandatory prepayments of outstanding indebtedness under the
First Lien Credit Agreement in the amount of:
(i) 100% of the net cash proceeds received from the sale of certain assets
that are not replaced;
(ii) 50% of the net cash proceeds from the issuance of any subordinated
debt (the terms of which must be satisfactory to Wells Fargo and a majority of
the lenders);
(iii) 50% of the net cash proceeds from the sale of any common stock of WCA
Waste; and
(iv) 100% of the net cash proceeds from the sale of any preferred stock or
other non-common stock equity offering of WCA Waste.
These payments are applied, first, to amounts owing on the Term B loan in the
inverse order of maturity. WSI must make comparable paydowns on the Second Lien
Credit Agreement after payment in full of the First Lien Credit Agreement.
The revolving credit loan under the First Lien Credit Agreement will mature
on April 28, 2010 and the Term B Loan will mature on April 28, 2011 unless the
commitments thereunder are terminated or prepaid in full at an earlier date. The
Second Lien Credit Agreement will mature on October 28, 2011. WSI's obligations
under the Credit Agreements are secured by essentially the same assets that
secured obligations under the Fourth Restated Credit Agreement (such assets are
generally described in the section entitled "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and Capital
Resources--Credit Facility" in WCA Waste's Annual Report on Form 10-K as filed
with the Securities and Exchange Commission on March 24, 2005, which description
is incorporated herein by reference), plus all significant assets acquired since
that time and most of its and its subsidiaries' real estate holdings. The
obligations are also guaranteed by certain material subsidiaries of WCA Waste.
Obligations under the Credit Agreements are recourse obligations and are subject
to cancellation and/or acceleration upon the occurrence of certain events,
including, among other things, a change of control (as defined in the Credit
Agreements), nonpayment, breaches of representations, warranties and covenants
(subject to cure periods in certain instances), bankruptcy or insolvency,
defaults under other debt arrangements, failure to pay certain judgments and the
occurrence of events creating material adverse effects.
2
Indebtedness under any base rate loans (as defined in the First Lien Credit
Agreement) carries interest at the higher of (i) the effective federal funds
rate (as defined in the First Lien Credit Agreement) plus 1/2 of 1% or (ii) the
rate of interest from time to time announced publicly by Wells Fargo, in San
Francisco, California as its prime rate, plus the applicable margin for base
rate loans (ranging from 0.75% to 2.00% depending on the leverage ratio).
Indebtedness under any LIBOR loans (as defined in the First Lien Credit
Agreement) carries interest at a rate per year (rounded upwards, if necessary,
to the nearest 1/100 of 1%) determined by the administrative agent to be equal
to the quotient of (a) LIBOR (as defined in the First Lien Credit Agreement)
divided by (b) one minus the reserve requirement (as defined in the First Lien
Credit Agreement), plus the applicable margin for LIBOR loans (ranging from
1.75% to 3.00% depending on the leverage ratio). The commitment fee payable by
WSI to the administrative agent for the benefit of the lenders on the daily
average unused amount of the aggregate revolving credit commitment under the
First Lien Credit Agreement ranges from 0.250% to 0.500% depending on WSI's
leverage ratio.
The First Lien Credit Agreement contains numerous covenants with which WSI
and the subsidiaries consolidated with it must comply, including several
financial covenants and ratios. These include a leverage test, a senior leverage
test, a net worth requirement and an adjusted EBIT test. The maximum leverage
ratio (the ratio of funded debt to pro forma adjusted EBITDA) under the First
Lien Credit Agreement must be not more than 5.00 to 1.00 until March 31, 2007,
and 4.75 to 1.00 or less thereafter. The maximum senior funded debt leverage
ratio under the First Lien Credit Agreement (the ratio of funded senior debt
(all funded debt other than subordinated debt) to pro forma adjusted EBITDA)
must be 4.25 to 1.0 or less from the Closing Date through the quarter ending
March 31, 2007, decreasing in stages to a maximum of 3.25 to 1.0 or less for the
quarter ending September 30, 2008 and for all quarters thereafter. The minimum
net worth (as defined in the First Lien Credit Agreement) under the First Lien
Credit Agreement is 85% of net worth on June 30, 2004, plus 50% of positive net
income, plus 100% of the increase to net worth from the net cash proceeds from
equity offerings, in each case, since June 30, 2004.
The adjusted EBIT debt service ratio is the ratio of (i) adjusted EBIT (as
defined in the First Lien Credit Agreement) for the four fiscal quarters ending
on such date to (ii) (w) cash interest expense, plus (x) the current portion of
capitalized leases for the following four fiscal quarters, plus (y) the current
portion of principal payments of debt (as defined in the First Lien Credit
Agreement) (excluding payments under the revolving credit notes under the First
Lien Credit Agreement), required to be paid for the following four fiscal
quarters plus (z) dividends paid by WSI to or for the benefit of WCA Waste to be
used to pay the debt of WCA Waste. The required minimum adjusted EBIT debt
service ratio under the First Lien Credit Agreement starts at a minimum of 1.25
to 1.00 from the Closing Date until the fiscal quarter ending September 30, 2007
and must be at least 1.50 to 1.00 at all times thereafter. The leverage ratio is
measured at the level of WCA Waste and all of its subsidiaries, while the senior
debt leverage ratio, Adjusted EBIT debt service ratio and all other financial
ratios and tests are measured only from the level of WSI and its subsidiaries
and exclude WCA Waste and other entities above WSI.
Under the First Lien Credit Agreement, there is no limit for acquisition or
expansion capital expenditures provided that the leverage ratio remains below
3.75 to 1.00 and $10 million is available under the revolving credit facility
after the applicable expenditure. However, if the leverage ratio exceeds 3.75 to
1.00, the amount of an acquisition expenditure shall be limited to 20% of WCA
Waste's net worth unless expenditures above that amount are approved by a
majority of the lenders.
The Second Lien Credit Agreement contains obligations, covenants and
restrictions similar to the First Lien Credit Agreement, and the same are
designed to work together, provided, the financial ratios and tests in the
Second Lien Credit Agreement are slightly more favorable to WSI, meaning that
any violation of these tests or ratios would, in all probability, result in a
default under the First Lien Credit Agreement before a default occurs under the
Second Lien Credit Agreement.
Other covenants in the Credit Agreements are comparable to the covenants in
the Fourth Restated Credit Agreement as described in the section entitled
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources--Credit Facility" in WCA Waste's
Annual Report on Form 10-K as filed with the Securities and Exchange Commission
on March 24, 2005, which description is incorporated herein by reference.
Included in such covenants is a prohibition against the payment of cash
dividends by WSI to WCA Waste (or any intermediary) except for the limited
purposes of debt repayment described above, meaning WCA Waste has very limited
sources of cash. WCA Waste's only source of cash to pay dividends is
distributions from its subsidiaries and, therefore, its ability to declare or
pay future cash dividends on its common stock would be subject to, among other
factors, a relaxation of this prohibition.
3
Some of the lenders under the Credit Agreements and their affiliates have
performed investment banking, financial advisory and other commercial services
(including serving as agents and lenders under prior credit agreements) for WCA
Waste and its affiliates in the ordinary course of business from time to time
for which they have received customary fees and expenses. The lenders and their
affiliates may, from time to time in the future, engage in transactions with and
perform such services for WCA Waste and its affiliates in the ordinary course of
business for which they will receive customary fees.
In addition, on the Closing Date, WSI and its affiliate, WCA Waste
Corporation of Texas, L.P. ("WCA Waste Texas") , entered into the First
Amendment to Reimbursement Agreement with Wells Fargo. WSI and WCA Waste Texas
are obligated in connection with an outstanding direct pay letter of credit
previously issued by Wells Fargo pursuant to a Reimbursement Agreement dated
August 30, 2002. The direct pay letter of credit is used to secure the debt
associated with WCA Waste's tax-exempt environmental facility revenue bonds. As
of the Closing Date, the amount available to be drawn under the direct pay
letter of credit was approximately $22.8 million. The First Amendment to
Reimbursement Agreement obligates WCA Waste and WCA Waste Texas to redeem the
tax-exempt environmental facility revenue bonds generally in amounts of $300,000
quarterly, beginning with the quarter ending June 1, 2005 through the quarter
ending March 1, 2010.
Item 1.02 Termination of a Material Definitive Agreement.
In connection with the execution of the Credit Agreements discussed above,
the Fourth Restated Credit Agreement between WSI, Wells Fargo, as administrative
agent, Comerica Bank, as syndication agent, and the lenders party thereto was
terminated and replaced with the Credit Agreements. For a description of the
material terms and conditions of the Fourth Restated Credit Agreement, please
read the section entitled "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Liquidity and Capital Resources--Credit
Facility" in WCA Waste's Annual Report on Form 10-K filed on March 24, 2005,
which description is incorporated herein by reference.
Item 2.02 Results of Operation and Financial Condition.
On April 28, 2005, WCA Waste issued a press release announcing its
financial results for the first quarter ended March 31, 2005. A copy of the
press release is furnished and attached hereto as Exhibit 99.1 and is
incorporated herein by reference.
In addition to disclosing financial results in accordance with generally
accepted accounting principles ("GAAP"), the press release presents for the
three months ended March 31, 2005 and 2004 the non-GAAP financial measure of
EBITDA. EBITDA consists of earnings (net income) before interest expense, net,
depreciation and amortization and tax expense. The attached press release also
contains a reconciliation of EBITDA to net income, which is the nearest
comparable GAAP financial measure. The reasons why WCA Waste's management
believes that the presentation of EBITDA provides useful information to
investors regarding WCA Waste's financial condition and results of operations
and the additional purposes for which WCA Waste's management uses EBITDA are
included under the heading "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Executive Overview--General Overview of Our
Business--Non-GAAP Measures" in WCA Waste's Annual Report on Form 10-K for the
fiscal year ended December 31, 2004, which discussions are incorporated herein
by reference.
In accordance with General Instruction B.2 of Form 8-K, the information in
this report and Exhibit 99.1 attached hereto is being furnished and is not
deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act
of 1934, as amended, and is not otherwise subject to the liabilities of that
section. Accordingly, the information in this report and Exhibit 99.1 attached
hereto will not be incorporated by reference into any filing made by WCA Waste
under the Securities Act of 1933, as amended, or the Securities Exchange Act of
1934, as amended, unless specifically identified therein as being incorporated
therein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The description of the Credit Agreements contained in Item 1.01 of this
report is hereby incorporated by reference into this Item 2.03.
4
Item 3.03 Material Modifications to Rights of Security Holders.
As was the case under the Fourth Restated Credit Agreement, the Credit
Agreements include a prohibition against the payment of cash dividends by WSI to
WCA Waste (or any intermediary) except for the limited purposes of debt
repayment described above, meaning WCA Waste has very limited sources of cash.
WCA Waste's only source of cash to pay dividends to its stockholders is
distributions from its subsidiaries and, therefore, its ability to declare or
pay future cash dividends on its common stock would be subject to, among other
factors, a relaxation of this prohibition.
Item 7.01 Regulation FD Disclosure.
On April 29, 2005, WCA Waste held its scheduled conference call with
respect to the results of the first quarter ended March 31, 2005. In addition,
WCA Waste reviewed its business operations and the progress of its acquisition
growth strategy and reiterated certain of its previously issued guidance with
respect to its expected 2005 financial performance. A replay of the entire
conference call is available via webcast at www.wcawaste.com. A summary of
selected discussion topics follows:
Acquisition Program
WCA Waste reiterated that it was on target with its acquisition strategy
and its belief that its acquisition program will significantly increase revenue
and profit in the future, although it also stressed that, in the short-term, as
expected, the cost of acquiring and integrating companies would continue to put
pressure on operating results. In this regard, WCA Waste reiterated estimates
that its costs of operations have increased as much as $500,000 per quarter ($2
million annually) as a result of increased legal, accounting, printing, travel,
insurance and other costs associated with both operating as a public company and
the pursuit of its acquisition strategy. In fact, first quarter 2005 general and
administrative expenses were approximately $494,000 higher than those in the
first quarter of 2004.
WCA Waste also reported that it had integrated all of its completed 2005
acquisitions to date into its existing operations. It also discussed the assets
covered by the recently executed definitive agreements to acquire certain assets
in Chanute, Kansas and El Dorado Springs, Missouri. The execution of, and the
assets covered by, these agreements had previously been described in press
releases dated April 26, 2005 and April 28, 2005 and may be obtained from WCA
Waste's web site at www.wcawaste.com. WCA Waste reported that its
internalization rate for the first quarter of 2005 was 78.8.
WCA Waste reiterated its previously announced goal of making acquisitions
with annualized revenue "run rates" of approximately $50 million by December 31,
2005. WCA Waste also reported that it had entered into two letters of intent for
potential acquisitions in Missouri and Kansas. It reported that its "acquisition
pipeline," including companies that were in "active discussions," was greater
than $130 million in estimated annualized revenue "run rates." WCA Waste's
"acquisition pipeline" includes solid waste companies that might be potential
acquisition candidates in the immediate areas surrounding its current
operations, including those it is in active discussions with. However, WCA Waste
may not complete all or any of the acquisitions that it is in active discussions
with or that it may from time to time report as being in its "acquisition
pipeline." "Run rate" determinations are made based on estimations from
information provided to WCA Waste by the acquisition candidates and from other
sources and estimates developed by WCA Waste. "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 WCA
Waste's general acquisition strategy and goals, please refer to WCA Waste's
Annual Report on Form 10-K for the fiscal year ended December 31, 2004 and its
subsequent Current Reports on Forms 8-K, available through WCA Waste's website
at www.wcawaste.com.
Financial Results
WCA Waste also discussed its financial results for the first quarter ended
March 31, 2005 that were also described in the press release furnished and
attached hereto as Exhibit 99.1.
In addition, WCA Waste provided additional information with respect to its
financial results as follows:
o Of the 44.0% increase in first quarter 2005 revenues over first
quarter 2004, 34.0% of the revenues were derived from acquired
operations, 5.6% from volume increases and 4.4% from price increases.
Internal growth during the first quarter of 2005 was approximately
10%. Including the first quarter acquisitions, WCA Waste's revenue
segmentation (before elimination of intercompany revenue) for the
first quarter of 2005 was 54.2% collection operations, 32.9% disposal,
12.9% transfer and other. This compares to a 51.5% collection
operations, 36.9% disposal and 11.6% transfer and other.
5
o Fuel costs increased approximately $393,000 in the first quarter of
2005 as compared to the same period in 2004. However, WCA Waste
recouped approximately 64% of this increased cost through fuel
surcharges.
o Operating income as a percentage of revenue was 11% for the first
quarter of 2005 and 12.9% for the same period in 2004. The change
between periods was primarily attributable to the revenue mix, but was
also affected by increased fuel costs.
o EBITDA for the first quarter 2005 increased 23% over first quarter
2004.
o The reduction in net income per share from $0.06 per share in the
first quarter of 2004 to the first quarter of 2005 was expected due to
the 6.6 million increase in shares outstanding due to WCA Waste's
initial public offering in June 2004.
o Current day's sales outstanding was 40.0 days as of March 31, 2005.
Forward-Looking Statements Concerning Expected Financial Performance
WCA Waste reiterated the following previously announced forward-looking
information with respect to expected financial performance during 2005 and
subsequent years. WCA Waste expects that during the three to four years
following its initial public offering completed in June 2004:
o Revenue will grow from approximately $60 million to more than $200
million;
o It will increase owned landfills from 13 to approximately 25; and
WCA Waste also noted that it expected its recently completed North Carolina
acquisition to increase EBITDA margins and reiterated that it expected EBITDA
margins to be approximately 25% for 2005. In this regard, WCA Waste noted that
operating margins will change on a quarterly basis depending on acquisitions
made during a quarter. WCA Waste also indicated that its expected maintenance
capital expenditures for 2005 to be approximately 12% of revenues. Further, WCA
Waste reiterated that it expected 2005 net income to be in the range of $0.38 to
$0.40 per share, depending on the timing of acquisitions and the form of any
capital and related charges that we might obtain to fund acquisitions.
Other Matters
WCA Waste also discussed the terms of its recently announced $200 million
credit facility, which consists of: (i) $75 million in the form of a 5-year
senior secured revolving credit line; (ii) $100 million in the form of a 6-year
senior secured term loan; and (iii) $25 million in the form of a 6.5-year second
lien term loan.
As of March 31, 2005, WCA Waste had $3 million of deferred financing costs.
WCA Waste will have to write-off a portion of these deferred financing costs in
the second quarter of 2005.
Non-GAAP Financial Measures
This report contains certain non-GAAP financial measures as described above
under Item 2.02 and Exhibit 99.1 attached hereto. A description of the non-GAAP
financial measure that WCA Waste uses and a reconciliation of the non-GAAP
financial measure to its most directly comparable GAAP financial measure are set
forth in the press release that is attached as Exhibit 99.1 hereto, which press
release is incorporated herein by reference. Further, the description of
non-GAAP measures set forth in Item 2.02 above is incorporated herein by
reference.
Cautionary Statements Regarding Forward-Looking Statements
`This report 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 WCA Waste's 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 WCA Waste's description of its
acquisition strategy and the benefits of any acquisition or potential
acquisition, for example. Moreover, all of the information set forth under
"Forward-Looking Statements Concerning Expected Financial Performance" above
consists of forward-looking statements. The forward-looking statements made
herein are only made as of the date hereof and WCA Waste undertakes no
obligation to publicly update such forward-looking statements to reflect
subsequent events or circumstances.
6
Forward-looking statements are based upon the current beliefs and
expectations of WCA Waste's management and are subject to significant risks and
uncertainties. Since WCA Waste'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 risks
and uncertainties have been more fully described in "Business-Risk Factors" in
WCA Waste's Annual Report on Form 10-K with respect to the fiscal year ended on
December 31, 2004.
In accordance with General Instruction B.2 of Form 8-K, the information in
this report is being furnished and is not deemed to be "filed" for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended, and is not
otherwise subject to the liabilities of that section. Accordingly, the
information in this report will not be incorporated by reference into any filing
made by WCA Waste under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, unless specifically identified
therein as being incorporated therein by reference.
Item 8.01 Other Events.
On May 2, 2005, WCA Waste issued a press release announcing that its 2005
Annual Meeting of Stockholders will be held on Wednesday, June 1, 2005 at The
Houstonian Hotel, Houston, Texas 77024 at 9:00 a.m. local time. WCA Waste fixed
the close of business on May 3, 2005 as the record date for the determination of
the stockholders entitled to vote at the Annual Meeting. A copy of the press
release is filed as Exhibit 99.2 hereto and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits.
Exhibit Number Description
- --------------------------------------------------------------------------------
99.1 WCA Waste Corporation Press Release, dated April 28,
2005, announcing financial results for the first
quarter ended March 31, 2005.
99.2 WCA Waste Corporation Press Release, dated May 2, 2005.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WCA WASTE CORPORATION
Date: May 4, 2005
/s/ Kevin D. Mitchell
-----------------------------
Kevin Mitchell
Vice President and Controller
EXHIBIT INDEX
Exhibit Number Description
- --------------------------------------------------------------------------------
99.1 WCA Waste Corporation Press Release, dated April 28,
2005, announcing financial results for the first
quarter ended March 31, 2005.
99.2 WCA Waste Corporation Press Release, dated May 2, 2005.