RALEIGH, N.C., Feb. 17 /PRNewswire-FirstCall/ -- Waste Industries USA,
Inc. (Nasdaq: WWIN), a regional, non-hazardous solid waste services company,
today reported unaudited financial results for the fourth quarter and year
ended December 31, 2003.
For the quarter ended December 31, 2003, revenue increased 12.3% to $70.9
million, compared to $63.2 million for the quarter ended December 31, 2002.
Net income was $0.9 million, or $0.07 per share, compared to $2.8 million, or
$0.21 per share for the quarters ended December 31, 2003 and 2002,
respectively.
For the year ended December 31, 2003, revenue increased 7.4% to $270.5
million, compared to $251.8 million for the year ended December 31, 2002. For
the year ended December 31, 2003, income before a cumulative effect of a
change in accounting principle was $8.9 million, or $0.66 per share, compared
to $11.0 million, or $0.82 per share, for the year ended 2002. Net income,
after considering the cumulative effect of a change in accounting principle,
was $7.8 million, or $0.58 per share, compared to $11.0 million, or $0.82 per
share for 2002.
Results of operations for the three- and twelve-month periods ended
December 31, 2003 were adversely impacted by the following items:
* A charge of $1.8 million (or $0.08 per share) related to the
restructuring of officer split-dollar life insurance arrangements and
related expenses as a result of the impact of the Sarbanes-Oxley Act
and recent tax law changes on the funding requirements of these
arrangements;
* An increase in the Company's effective tax rate from approximately
36.7% to 63.5% (or $0.05 per share) and 41.0% (or $0.05 per share) for
the three- and twelve-month periods ended December 31, 2003,
respectively, related to the sales of certain collection and hauling
operations that included the write-off of recorded goodwill not
deductible for tax purposes.
The cumulative effect of a change in accounting principle of ($0.08) per
share was related to the Company's adoption, effective January 1, 2003, of
Statement of Financial Accounting Standards No. 143, Accounting for Asset
Retirement Obligations ("SFAS 143"), and is presented as a non-cash charge in
the statement of cash flows. If the accounting change for SFAS 143 had been
effective in 2002, earnings per share in 2002 would have been lower than
reported amounts by ($0.02) for the fourth quarter and ($0.05) for the full
year.
Commenting on the Company's performance, Jim W. Perry, President and CEO
of Waste Industries USA, said, "We are very pleased with the progress we have
made in 2003 in a number of areas. We completed the year with strong revenue
growth of 12% in the quarter, lead by our third quarter acquisition in
Tidewater, Virginia. We also had positive pricing and internal volume growth.
In spite of a sluggish economy, a wet start and the effects of a major
hurricane in North Carolina and Virginia, we posted sound revenue growth and
were particularly pleased to see a moderate improvement in our prices to
offset higher fuel, insurance and disposal costs. On a comparable basis net
of accounting changes, one time charges and the adverse impact of the tax
rate, our earnings for 2003 were up slightly over the prior year in spite of
higher costs to deliver our services."
The Company also provided its outlook for 2004, which is based on current
economic conditions and does not assume any deterioration or improvement in
the overall economy. Guidance is as follows:
* Internal growth of 2.0% to 2.5%;
* Total revenue is projected to be in the range of $283.0 million to
$286.0 million;
* Earnings per share range of $0.86 to $0.89;
* Capital expenditures of $24.0 million to $25.0 million;
* Free cash flow of $20.0 million to $21.0 million.
The Company will host a conference call to discuss its fourth quarter
results on Wednesday, February 18, 2004 at 2:00 PM (EST). The call number is
(800) 967-7185 and the confirmation number is 355427. The conference call will
also be broadcast live over the Internet at http://www.waste-ind.com under the
"Investor Relations" tab.
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.
The tables attached to this press release contain references to EBITDA and
free cash flow, which are considered non-GAAP financial measures. Tables
reconciling EBITDA and free cash flow to the appropriate GAAP measures for
each period presented are included in the attached supplemental data. The
Company defines EBITDA as income before income taxes plus interest expense
(net of interest income), depreciation and amortization and cumulative effect
of change in accounting principle. The Company defines free cash flow as cash
flows from operating activities less capital expenditures and plus proceeds
from the sale of fixed assets. EBITDA 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. Our definitions of EBITDA and free cash flow might not
be comparable to similarly titled measures reported by other companies. The
Company has included information concerning EBITDA and free cash flow because
it believes that EBITDA and free cash flow provide additional information for
determining its ability to meet debt service requirements and that they are
two indicators upon which the Company, its lenders and certain investors
assess its financial performance and its capacity to service debt. The
Company therefore interprets the trends that EBITDA and free cash flow depict
as measures of its liquidity.
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 plans,
objectives or goals are also forward-looking statements. Forward-looking
statements are subject to risks and uncertainties, such as 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. 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.
WASTE INDUSTRIES USA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Data)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2002 2003 2002 2003
Revenues:
Service $62,925 $70,649 $250,543 $269,208
Equipment 259 297 1,285 1,257
Total revenues 63,184 70,946 251,828 270,465
Operating cost and expenses:
Operations 40,511 47,088 161,165 176,160
Equipment sales 367 236 842 1,130
Selling, general and
administrative (A) 8,224 10,570 33,832 38,114
Depreciation and amortization 7,130 7,631 27,855 30,730
Loss (gain) on sale of collection
and hauling operations 121 (100) 121 (720)
Impairment of fixed assets 316 494 316 517
Total operating costs and
expenses 56,669 65,919 224,131 245,931
Operating income 6,515 5,027 27,697 24,534
Interest expense (net) 2,662 2,576 11,006 9,569
Other income (523) (39) (588) (96)
Total other expense
(income) net 2,139 2,537 10,418 9,473
Income before income taxes and
cumulative effect of a change
in accounting principle 4,376 2,490 17,279 15,061
Income tax expense (B) 1,607 1,582 6,317 6,171
Income before cumulative effect
of a change in accounting
principle 2,769 908 10,962 8,890
Cumulative effect of a change
in accounting principle net of
tax benefit of $614 - - - (1,067)
Net Income $2,769 $908 $10,962 $7,823
Earnings per share basic and diluted:
Before cumulative effect of a
change in accounting principle $0.21 $0.07 $0.82 $0.66
Cumulative effect of a change
in accounting principle, net
of tax - - - (0.08)
Net Income $0.21 $0.07 $0.82 $0.58
Cash Dividends $- $1,077 $- $1,077
Weighted-Average Number Of
Shares Outstanding:
Basic 13,337 13,468 13,336 13,439
Diluted 13,355 13,635 13,351 13,558
(A) Includes a charge of $1.8 million (or $0.08 per share) for the fourth
quarter and total year 2003 related to the restructuring of officer
split-dollar insurance arrangements and related expenses as a result
of the impact of the Sarbanes-Oxley Act and recent tax law changes
on the funding requirements of these arrangements.
(B) Reflects an increase in the Company's effective tax rate from
approximately 36.7% to 63.5% (or $0.05 per share) and 41.0% (or
$0.05 per share) for the three- and twelve-month periods ended
December 31, 2003, respectively, related to the sale of certain
collection and hauling operations that included the write-off of
recorded goodwill not deductible for tax purposes.
Three Months Ended Twelve Months Ended
December 31, December 31,
2002 2003 2002 2003
EBITDA $14,168 $12,697 $56,140 $55,360
CASH FLOWS FROM:
Operating Activities $12,546 $9,716 $40,817 $37,749
Investing Activities (6,176) (5,609) (22,222) (47,597)
Financing Activities $(9,575) $(189) $(18,748) $12,241
EBITDA CALCULATION
Net Income $2,769 $908 $10,962 $7,823
Add back:
Income tax expense 1,607 1,582 6,317 6,171
Interest expense (net) 2,662 2,576 11,006 9,569
Depreciation and amortization 7,130 7,631 27,855 30,730
Cumulative effect of a change in
accounting principle - - - 1,067
$14,168 $12,697 $56,140 $55,360
RECONCILIATION OF EBITDA
EBITDA $14,168 $12,697 $56,140 $55,360
Income tax expense (1,607) (1,582) (6,317) (6,171)
Interest expense (net) (2,662) (2,576) (11,006) (9,569)
Adjustments to reconcile net
income to net cash provided by
operating activities (other than
depreciation and amortization)
Loss (gain) loss on sale of
property and equipment 191 29 (49) 350
Impairments of property and
equipment 316 494 316 517
Loss (gain) on sale of
collection and hauling
operations 121 (100) 121 (720)
Provision (benefit) for
deferred income taxes 4,496 (700) 4,304 (1,564)
Stock compensation expense 10 102 28 120
Forgiveness of officer loans - 1,118 - 1,118
Changes in operating assets and
liabilities (2,487) 234 (2,720) (1,692)
Net cash provided by operating
activities $12,546 $9,716 $40,817 $37,749
FREE CASH FLOW AND RECONCILIATION
OF FREE CASH FLOW TO NET CASH PROVIDED
BY OPERATING AND INVESTING ACTIVITIES
Net cash provided by operating
activities $12,546 $9,716 $40,817 $37,749
Capital Expenditures (4,637) (6,414) (18,178) (29,557)
Proceeds from sale of property and
equipment 931 422 1,925 2,510
Free cash flow 8,840 3,724 24,564 10,702
Acquisitions of business (2,744) - (6,093) (38,410)
Acquisition liabilities 274 - 124 1,784
Proceeds from disposal of operations - 383 - 16,076
Net cash provided by operating
activities and investing
activities $6,370 $4,107 $18,595 $(9,848)
WASTE INDUSTRIES USA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Data)
(Unaudited)
December 31, December 31,
2002 2003
ASSETS
Current assets:
Cash and cash equivalents $1,734 $4,127
Accounts receivable - trade, less
allowance for uncollectible accounts
(2002 - $2,237; 2003 -$3,158) 28,200 31,235
Accounts receivable - other 1,395 1,182
Income taxes receivable 919 -
Inventories 1,552 1,427
Prepaid expenses and other current
assets 2,868 3,200
Deferred income taxes 759 1,162
Total current assets 37,427 42,333
Property and equipment, net 189,954 190,871
Intangible assets, net 68,338 90,676
Restricted cash - bonds - 822
Deferred financing costs 771 2,834
Other noncurrent assets 2,083 2,811
Total assets $298,573 $330,347
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $11,710 $10,723
Current maturities of capital lease
obligations 599 160
Accounts payable - trade 10,501 13,299
Income taxes payable - 841
Accrued expenses and other
liabilities 10,434 10,643
Acquisition liabilities 305 2,089
Closure/postclosure liabilities 454 816
Derivative liabilities - 1,212
Deferred revenue 1,997 2,421
Total current liabilities 36,000 42,204
Long-term debt, net of current
maturities 140,875 157,657
Deferred income taxes 18,941 18,052
Closure/postclosure liabilities 3,568 5,348
Derivative liabilities 2,219 260
Shareholders' equity:
Common stock, no par value,
shares authorized - 80,000,000 shares
issued and outstanding:
2002 - 13,338,005;
2003 - 13,442,402 38,116 39,006
Paid-in capital 7,245 7,342
Retained earnings 54,623 62,446
Accumulated other comprehensive loss (1,366) (891)
Shareholders' loans (1,648) -
Dividend paid - (1,077)
Total shareholders' equity 96,970 106,826
Total liabilities and shareholders'
equity $298,573 $330,347
WASTE INDUSTRIES USA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Twelve Months Ended
December 31,
2002 2003
Operating Activities:
Net income $10,962 $7,823
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 27,855 30,730
Impairments of property and equipment 316 517
(Gain) loss on sale of property
and equipment (49) 350
Cumulative effect of accounting
change and accounting principle - 1,067
Loss (gain) on sale of collection
and hauling operations 121 (720)
Stock compensation expense 28 120
Provision (benefit) for deferred
income taxes 4,304 (1,564)
Forgiveness of officer loans - 1,118
Changes in assets and liabilities,
net of effects from acquisition and
disposition of related businesses (2,720) (1,692)
Net cash provided by operating activities 40,817 37,749
Investing Activities:
Acquisitions of related business,
net of cash acquired (6,093) (38,410)
Acquisition liabilities 124 1,784
Proceeds from sale of property and equipment 1,925 2,510
Purchases of property and equipment (18,178) (29,557)
Proceeds from sale of collection
and hauling operations - 16,076
Net cash used in investing activities (22,222) (47,597)
Financing Activities:
Proceeds from issuance of long term debt 4,009 40,176
Principal payments of long-term debt (21,762) (24,381)
Principal payments of capital lease
obligations (729) (439)
Financing costs - (2,373)
Dividends paid - (1,077)
Increase in shareholder loans, net (266) -
Net proceeds from exercised options - 335
Net cash (used in) provided by
financing activities (18,748) 12,241
(Decrease) increase in cash and
cash equivalents (153) 2,393
Cash and cash equivalents,
beginning of period 1,887 1,734
Cash and cash equivalents, end of period $1,734 $4,127
Investing Activity - Restricted Cash - Bonds $- $822
Supplemental disclosures of cash flow
information:
Cash paid for interest $10,238 $9,347
Cash paid for taxes $3,200 $5,513
EARNINGS RELEASE - SUPPLEMENTAL DATA
YEAR ENDED
REVENUE MARGINS 12/31/02 12/31/03
Cost of Operations 64.3% 65.6%
S G & A 13.4% 14.1%
Depreciation and Amortization 11.1% 11.4%
Interest Expense, (Net) 4.4% 3.5%
Income Before Income Tax 6.9% 5.6%
Income Tax Expense 2.5% 2.3%
Net Income 4.4% 2.9%
EBITDA 22.3% 20.5%
CAPITAL EXPENDITURES DETAIL
Collection & Transportation 14,075 17,801
Landfill Development 4,103 11,756
Total Capital Expenditures 18,178 29,557
SERVICE REVENUE GROWTH
Price -1.3% 0.7%
Volume 1.3% 1.1%
Energy surcharge -0.2% 0.6%
Total Internal Growth -0.2% 2.4%
Commodities 0.5% 0.0%
Acquisitions 0.7% 5.0%
Total Service Revenue Growth 1.0% 7.4%
YEAR ENDED
12/31/02 12/31/03
TOTAL DEBT & CAPITAL LEASES $153,184 $168,540
TOTAL EQUITY $96,970 $106,826
DEBT TO TOTAL CAPITAL 61.2% 61.2%
TOTAL LIABILITIES TO EQUITY 2.1 2.1
WORKING CAPITAL $1,427 $129
DAYS SALES OUTSTANDING 37 37
CASH $1,734 $4,127
SERVICE REVENUE MIX
Collection 78.2% 78.7%
Disposal and Transfer 16.1% 15.4%
Recycling and Other 5.7% 5.9%
100.0% 100.0%
SOURCE Waste Industries USA, Inc.
 back to top
Related links:
http://www.waste-ind.com
Company News On-Call:
http://www.prnewswire.com/comp/120685.html
CONTACT:
Carol Dalton of Waste Industries USA, Inc.,
+1-919-325-3000
|
