RALEIGH, N.C., Nov. 1 /PRNewswire-FirstCall/ -- Waste Industries USA, Inc.
(Nasdaq: WWIN), a regional, non-hazardous solid waste services company, today
reported unaudited financial results for the third quarter ended September 30,
2005.
In the second quarter of 2005, the Company sold certain operations in the
Atlanta, Georgia region that qualified as discontinued operations, impacting
the previously reported 2004 and 2005 results. All periods have been restated
to present the results for these operations as discontinued operations.
For the quarter ended September 30, 2005, revenue increased 11.9% to
$82.9 million, compared to $74.1 million for the quarter ended September 30,
2004. Operating income for the third quarter 2005 decreased 2.6% to
$7.4 million, compared to $7.6 million for the same period in 2004. Income
from continuing operations for the third quarter 2005 was $3.0 million, or
$0.22 per diluted share, a 12.0% decrease from income from continuing
operations of $3.5 million, or $0.25 per diluted share, for the third quarter
of 2004.
For the nine months ended September 30, 2005, revenue increased 6.6% to
$229.5 million, compared to $215.2 million for the same period in 2004.
Operating income decreased 4.0% to $20.7 million, compared to $21.6 million
for the same period in 2004. Income from continuing operations for the nine
months ended September 30, 2005 was $8.1 million, or $0.59 per diluted share,
a 12.0% decrease from income from continuing operations of $9.3 million, or
$0.68 per diluted share, for the same nine-month period in 2004. Income from
discontinued operations for the nine months ended September 30, 2005 was
$0.1 million including the effect of a $0.4 million gain (net of income taxes)
from the sale of operations.
Jim W. Perry, President and CEO of the Company, stated, "Drastically
higher fuel cost and the costs we are incurring to meet Sarbanes-Oxley
compliance standards are challenging, but the bright spots include strategic
revenue growth and more waste internalization into our landfills."
The Company will host a conference call to discuss its third quarter
results on November 2, 2005 at 2:00 PM (Eastern Time). The call number is
(800) 967-7140 and the confirmation number is 4988413. The conference call
will also be broadcast live over the Internet at http://www.waste-ind.com
under the "Investor Relations" tab. A replay of the call will be available
through November 15, 2005 and may be accessed by calling (888) 203-1112 and
using confirmation number 4988413.
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, Georgia and Florida.
The tables attached to this press release contain references to operating
income before depreciation and amortization and free cash flow, which are
considered non-GAAP financial measures. Tables reconciling operating income
before depreciation and amortization and free cash flow to the appropriate
GAAP measures for each period presented are included in the attached
supplemental data. The Company defines free cash flow as cash flows from
operating activities less capital expenditures plus proceeds from the sale of
fixed assets. Operating income before depreciation and amortization 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 definitions of
operating income before depreciation and amortization and free cash flow might
not be comparable to similarly titled measures reported by other companies.
The Company has included information concerning operating income before
depreciation and amortization and free cash flow because it believes that
operating income before depreciation and amortization and free cash flow
provide additional information for determining its ability to meet debt
service requirements and that these measures are two indicators upon which the
Company, its lenders and some investors assess its financial performance and
its capacity to service debt. The Company therefore interprets the trends
that operating income before depreciation and amortization 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 fuel prices,
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 Nine Months Ended
September 30, September 30,
2004 2005 2004 2005
Revenues:
Service $73,806 $82,727 $214,544 $229,018
Equipment 246 150 646 461
Total revenues 74,052 82,877 215,190 229,479
Operating cost and expenses:
Operations 50,235 56,635 143,849 155,321
Equipment sales 138 83 377 287
Selling, general and
administrative 9,092 11,180 27,626 31,195
Depreciation and amortization 7,001 7,756 21,859 22,244
Gain on sale of property and
equipment (63) (223) (313) (447)
Impairment of property and
equipment and other assets 1 - 189 143
Total operating costs and
expenses 66,404 75,431 193,587 208,743
Operating income 7,648 7,446 21,603 20,736
Interest expense 2,367 2,434 7,313 7,395
Interest income (32) (29) (82) (61)
Other income (95) (110) (176) (191)
Total other expense
(income) net 2,240 2,295 7,055 7,143
Income from continuing
operations before income taxes 5,408 5,151 14,548 13,593
Income tax expense 1,953 2,111 5,289 5,446
Income from continuing
operations 3,455 3,040 9,259 8,147
Discontinued operations:
Income (loss) from discontinued
operations (net of income taxes) (52) - 28 (304)
Gain on sale of operations (net
of income taxes) - - - 389
Net income from
discontinued operations (52) - 28 85
Net income $3,403 $3,040 $9,287 $8,232
Earnings per share:
Basic:
Income from continuing operations $0.25 $0.22 $0.69 $0.60
Discontinued operations - - - -
Net income $0.25 $0.22 $0.69 $0.60
Diluted:
Income from continuing operations $0.25 $0.22 $0.68 $0.59
Discontinued operations - - - 0.01
Net income $0.25 $0.22 $0.68 $0.60
Weighted-Average Number of
Shares Outstanding:
Basic 13,509 13,706 13,502 13,640
Diluted 13,678 13,852 13,673 13,811
WASTE INDUSTRIES USA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
(Unaudited)
December 31, September 30,
2004 2005
ASSETS
Current assets:
Cash and cash equivalents $2,445 $147
Receivables, net 31,602 37,799
Other 7,028 6,510
Total current assets 41,075 44,456
Property and equipment, net 198,551 212,757
Intangible assets, net 92,702 106,079
Other noncurrent assets 4,720 4,372
Total assets $337,048 $367,664
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of
long-term debt 10,733 10,733
Accounts payable - trade 14,627 13,683
Other accrued liabilities
and deferred revenues 22,570 29,522
Total current liabilities 47,930 53,938
Long-term debt, net of
current maturities 145,930 158,212
Other liabilities 25,477 28,839
Total liabilities 219,337 240,989
Shareholders' equity: 117,711 126,675
Total liabilities and
shareholders' equity $337,048 $367,664
WASTE INDUSTRIES USA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Nine Months Ended
September 30,
2004 2005
Operating Activities:
Net income $9,287 $8,232
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 22,030 22,463
Amortization of debt issuance costs 559 762
Impairment of property and
equipment and other assets 189 143
Gain on sale of property
and equipment (313) (447)
Gain on sale of discontinued
collection and hauling operations - (389)
Stock compensation expense 21 60
Provision for deferred income taxes - 2,062
Provision for doubtful accounts 1,492 1,651
Changes in assets and liabilities, net
of effects from acquisition and
disposition of related businesses (3,088) (1,859)
Net cash provided by
operating activities 30,177 32,678
Investing Activities:
Acquisitions of related business, net
of cash acquired (888) (28,618)
Settlement of acquisition liabilities (843) (655)
Proceeds from sale of insurance policy - 164
Increase in restricted cash - (148)
Proceeds from sale of property
and equipment 1,550 1,995
Purchases of property and equipment (20,440) (27,382)
Proceeds from sale of discontinued
collection and hauling operations - 7,913
Net cash used in
investing activities (20,621) (46,731)
Financing Activities:
Proceeds from issuance of
long-term debt 15,000 47,697
Principal payments of long-term debt (23,718) (35,415)
Principal payments of capital
lease obligations (160) (150)
Financing costs (3) (59)
Payment of dividends (1,080) (2,191)
Net proceeds from exercise of
stock options 110 1,873
Net cash provided by (used in)
financing activities (9,851) 11,755
Decrease in cash and cash equivalents (295) (2,298)
Cash and cash equivalents,
beginning of period 4,127 2,445
Cash and cash equivalents, end
of period $3,832 $147
Supplemental disclosures of cash
flow information:
Cash paid for interest $6,761 $6,961
Cash paid for taxes $3,984 $3,508
WASTE INDUSTRIES USA, INC. AND SUBSIDIARIES
SUPPLEMENTAL DATA (dollars in thousands)
REVENUE MARGINS 3 Q 2004 3 Q 2005
Cost of operations 68.0% 68.4%
S G & A 12.3% 13.5%
Depreciation and amortization 9.5% 9.4%
Interest expense, (net) 3.2% 2.9%
Income from continuing operations
(pre-tax) 7.3% 6.2%
Income tax expense 2.6% 2.5%
Income from continuing operations 4.7% 3.7%
OPERATING INCOME BEFORE DEPRECIATION
AND
AMORTIZATION
Operating income $7,648 $7,446
Depreciation and amortization 7,001 7,756
Operating income before depreciation
and amortization $14,649 $15,202
CAPITAL EXPENDITURES DETAIL YTD 04 YTD 05
Collection & Transportation $18,577 $20,712
Landfill Development 1,863 6,670
Total capital expenditures $20,440 $27,382
FREE CASH FLOW RECONCILIATION
Net cash provided by operating activities $30,177 $32,678
Less: Capital expenditures (20,440) (27,382)
Plus: Proceeds from disposal of assets 1,550 1,995
Free cash flow $11,287 $7,291
12/31/04 9/30/05
DEBT TO TOTAL CAPITAL 57.2% 57.2%
(includes capital leases)
TOTAL LIABILITIES TO EQUITY 1.9 1.9
DAYS SALES OUTSTANDING 36 34
SERVICE REVENUE MIX 3 Q 05
Collection:
Industrial 27.9%
Commercial 26.7%
Residential 21.8%
Disposal and transfer 16.3%
Recycling service 1.5%
Recycled commodity sales 1.5%
Other 4.3%
Total Service Revenue 100.0%
SERVICE REVENUE GROWTH
Price 1.1%
Volume 2.1%
Energy surcharge 1.7%
Total internal growth 4.9%
Recycling commodities -0.3%
Acquisitions 7.5%
Total service revenue growth 12.1%
SOURCE Waste Industries USA, Inc.
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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
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