Waste Services Announces Record EPS, Margins and Free Cash Flow


    
    EPS Almost Doubles From $0.08 in 2008 to $0.15 in the Third Quarter of
2009

    - Adjusted EBITDA margin of 25.4% for the quarter as compared to 23.0% in
    2008.

    - Strong core price growth of 5.0%.

    - Adjusted EBITDA of $28.5 million for the quarter.

    - Free cash flow of $16.5 million.

    - SG&A reduced by $2.0 million from the comparative quarter in 2008.




    
</pre>
<p><location>BURLINGTON</location>, Ontario, <chron>Oct. 27</chron> /CNW/ -- Waste Services, Inc. (Nasdaq:   WSII) today announced financial results for the third quarter ended <chron>September 30, 2009</chron>.  Fully diluted earnings per share from continuing operations were <money>$0.15</money> for the quarter as compared to <money>$0.08</money> in the third quarter of 2008.  Revenue for the quarter was <money>$112.5 million</money> compared to <money>$125.7 million</money> for the same quarter in 2008.  Income from continuing operations for the quarter was <money>$6.7 million</money> as compared to income in the comparative period of <money>$3.5 million</money>.  The results for the quarter are highlighted by:</p>
<pre>
    

    --  Excluding recycled commodity sales, net of commodity surcharges, core
        internal revenue growth from price was 5.0%.
    --  Internal revenue relating to volume declined by $7.1 million or 5.7%.

    --  Foreign currency translation accounted for $4.2 million or a 3.4%
        reduction in revenue and the net expiration of municipal contracts
        accounted for a decline of $2.5 million or 2.0% of revenue.

    
</pre>
<p>For the nine month period ended <chron>September 30, 2009</chron>, fully diluted earnings per share from continuing operations were <money>$0.31</money> as compared to <money>$0.28</money> in the corresponding period of 2008.  Revenue for the period was <money>$315.7 million</money> compared to <money>$370.6 million</money> in 2008.  Income from continuing operations for the period was <money>$14.2 million</money> as compared to income in the comparative period of <money>$12.8 million</money>.  The results for the nine month period ended <chron>September 30, 2009</chron> are highlighted by:</p>
<pre>
    

    --  Excluding recycled commodity sales, net of commodity surcharges, core
        internal revenue growth from price was 4.3%.
    --  Internal revenue relating to volume declined by $19.3 million or 5.2%.
    --  Foreign currency translation accounted for $24.4 million or a 6.6%
        reduction in revenue and the net expiration of municipal contracts
        accounted for a decline of $10.6 million or 2.9% of revenue.

    --  Foreign currency translation unfavorably impacted EPS by approximately
        $0.03 per share.


    
</pre>
<p>David Sutherland-Yoest, Waste Services President and Chief Executive Officer, stated, "We are pleased to report record financial results for the third quarter and continued success in executing the strategy we laid out in the beginning of the year.  Our progress this year is highlighted by our substantially reduced SG&A expense, significant pricing improvement in all markets, improved margins and record free cash flow.  We are also reporting that we have been successful in managing our tax rate to allow us to eliminate our reconciliation of our GAAP earnings to reflect a normal tax charge and we are adjusting our guidance for the year to a range of <money>$0.43 to $0.45</money> cents per share.  Our recently announced strategic acquisitions in <location>Miami</location> and increased internalization of waste volumes into our Alberta landfill position the company for continued record results.  The excellent results are a result of fine tuning the company's administrative and operating costs to adjust to the decline in revenue in the past year."</p>
<pre>
    

    Reconciliation of Non-GAAP Measures:

    
</pre>
<p>The following table reconciles the differences between income from continuing operations, as determined under US GAAP, and EBITDA from continuing operations, a non-GAAP financial measure (in thousands) (unaudited):</p>
<pre>
    


    
</pre>
<p> </p>
<pre>
    
                                  For The Three     For The Nine
                                  Months Ended      Months Ended
                                  September 30,     September 30,
                                  -------------     -------------
                                  2009     2008     2009     2008
                                  ----     ----     ----     ----
      Income from continuing
       operations               $6,717   $3,469  $14,173  $12,830
      Income tax provision       3,682    5,322    8,837    6,927
      Change in fair
       value of warrants          (688)       -   (2,103)       -
      Interest expense           7,528    7,730   22,418   25,770
      Depreciation, depletion
       and amortization         10,940   11,503   32,016   34,826
                                ------   ------   ------   ------
      EBITDA from continuing
       operations (1)          $28,179  $28,024  $75,341  $80,353
                               =======  =======  =======  =======

    
</pre>
<p>The following table reconciles the differences between EBITDA from continuing operations and Adjusted EBITDA from continuing operations for the three and nine months ended <chron>September 30, 2009</chron> and 2008 (in thousands) (unaudited).</p>
<p/>
<p> </p>
<pre>
    
                                           For The Three     For The Nine
                                           Months Ended      Months Ended
                                           September 30,     September 30,
                                           -------------     -------------
                                            2009     2008     2009     2008
                                            ----     ----     ----     ----
    EBITDA from continuing
     operations (1)                      $28,179  $28,024  $75,341  $80,353
    Adjustments to EBITDA from
     continuing operations
     (as defined per credit agreement):
        Loss (gain) on sale of assets        (78)      (8)  (2,430)    (522)
        Non-cash items (2)                   412      938    1,901    2,995
        Other excludable expenses (3)          -        -       88        -
                                         -------  -------  -------  -------
    Adjusted EBITDA from continuing
     operations (1)                      $28,513  $28,954  $74,900  $82,826
                                         =======  =======  =======  =======
    
</pre>
<p> </p>
<pre>
    
    (1) EBITDA from continuing operations and Adjusted EBITDA from continuing
        operations ("Adjusted EBITDA from continuing operations") are non-GAAP
        measures used by management to measure performance. We also believe
        that EBITDA from continuing operations and Adjusted EBITDA from
        continuing operations may be used by certain investors to analyze and
        compare our operating performance between accounting periods and
        against the operating results of other companies that have different
        financing and capital structures or tax rates and to measure our
        ability to service our debt.  In addition, management uses EBITDA from
        continuing operations, among other things, as an internal performance
        measure.  Our lenders also use Adjusted EBITDA from continuing
        operations to measure our ability to service and/or incur additional
        indebtedness under our credit facilities.  However, EBITDA from
        continuing operations and Adjusted EBITDA from continuing operations
        should not be considered in isolation or as a substitute for net
        income, cash flows or other financial statement data prepared in
        accordance with US GAAP or as a measure of our performance,
        profitability or liquidity.  EBITDA from continuing operations and
        Adjusted EBITDA from continuing operations are not calculated under US
        GAAP and therefore are not necessarily comparable to similarly titled
        measures of other companies.
    (2) Non-cash adjustments primarily include stock-based compensation
        expense and gains and losses on foreign exchange.
    (3) Other excludable expenses adjustments includes other non-recurring
        costs.

    
</pre>
<p>We will host an investor and analyst conference call on <chron>Wednesday, October 28, 2009</chron> at <chron>8:30 a.m. (ET</chron>) to discuss the results of today's earnings announcement.  If you wish to participate in this call, please phone 866-831-6267 (US and <location>Canada</location>) or 617-213-8857 (International) and enter passcode number 79761628.  To hear a web cast of the call over the Internet, access the home page of our website at <a href="http://www.wasteservicesinc.com">www.wasteservicesinc.com</a>.  A replay of the call will be available until <chron>November 10, 2009</chron> by phoning 888-286-8010 (US and <location>Canada</location>) or 617-801-6888 (International) and entering passcode number 12206233.  The web cast will also be available on our website.</p>
<pre>
    

    Safe Harbor for Forward-Looking Statements
    
</pre>
<p>Certain matters discussed in this press release are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  These statements describe the company's future plans, objectives and goals.  These forward-looking statements involve risks and uncertainties which could cause actual results to differ materially from the plans, objectives and goals set forth in this press release.  Factors which could materially affect such forward-looking statements can be found in the company's periodic reports filed with the Securities and Exchange Commission, including risk factors detailed in the company's Form 10-K for the year ended <chron>December 31, 2008</chron>.  Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements.</p>
<p/>
<p>The forward-looking statements made in this press release are only made as of the date hereof and Waste Services undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.</p>
<p/>
<p>This release does not constitute an offer to sell or the solicitation of any offer to buy any securities.  The company's securities may not be offered or sold in the <location>United States</location> absent a registration or applicable exemption from registration requirements under applicable state and federal securities laws.</p>
<p/>
<p>Waste Services, Inc., a Delaware corporation, is a multi-regional, integrated solid waste services company that provides collection, transfer, disposal and recycling services in the <location>United States</location> and <location>Canada</location>.  The company's website is <a href="http://www.wasteservicesinc.com">www.wasteservicesinc.com</a>.  Information on the company's website does not form part of this press release.</p>
<pre>
    



    
</pre>
<p> </p>
<p> </p>
<pre>
    
                               WASTE SERVICES, INC.
             UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                        (In thousands, except per share data)
    
</pre>
<p> </p>
<pre>
    
                                         Three Months Ended  Nine Months Ended
                                           September 30,       September 30,
                                           -------------       -------------
                                           2009      2008     2009      2008
                                           ----      ----     ----      ----
    
</pre>
<p> </p>
<p>Revenue                            <money>$112,461</money>  <money>$125,745</money> <money>$315,738</money>  <money>$370,635</money></p>
<p> </p>
<pre>
    
    Operating and other expenses:
      Cost of operations
       (exclusive of
       depreciation,
        depletion and amortization)      71,204    82,512  203,896   242,661
      Selling, general and
       administrative expense
       (exclusive of
        depreciation,
         depletion and
         amortization)                   13,085    15,074   39,034    47,943
      Depreciation,
       depletion and
       amortization                      10,940    11,503   32,016    34,826
      Loss (gain) on sale of property
       and equipment, foreign exchange
       and other                             (7)      135   (2,533)     (322)
                                             --       ---   ------      ----
    
</pre>
<p> </p>
<p>Income from operations               17,239    16,521   43,325    45,527</p>
<p> </p>
<pre>
    
    Interest expense                      7,528     7,730   22,418    25,770
    Change in fair value of
     warrants                              (688)        -   (2,103)        -
                                           ----      ----   ------      ----
    
</pre>
<p> </p>
<pre>
    
    Income from continuing
     operations before income taxes      10,399     8,791   23,010    19,757
    Income tax provision                  3,682     5,322    8,837     6,927
                                          -----     -----    -----     -----
    
</pre>
<p> </p>
<pre>
    
    Income from continuing
     operations                           6,717     3,469   14,173    12,830
    Income from discontinued
     operations, net of income
     tax provision of $266 for
     the nine months ended
     September 30, 2008                       -         -        -       409
    Gain on sale of discontinued
     operations, net of income tax
     provision of $4,485 for the
     nine months ended September
     30, 2008                                 -         -        -     6,869
                                          -----     -----    -----     -----
    
</pre>
<p> </p>
<pre>
    
    Net income                           $6,717    $3,469  $14,173   $20,108
                                         ======    ======  =======   =======
    
</pre>
<p> </p>
<pre>
    
    Basic and diluted
     earnings per
     share:
      Earnings per share -
       continuing operations              $0.15     $0.08    $0.31     $0.28
      Earnings per share -
       discontinued
       operations                             -         -        -      0.16
                                          -----     -----    -----     -----
    Earnings per share -
      basic and diluted                   $0.15     $0.08    $0.31     $0.44
                                          =====     =====    =====     =====
    
</pre>
<p> </p>
<pre>
    
        Weighted average common
         shares outstanding:
          Basic                          46,253    46,079   46,206    46,076
          Diluted                        46,302    46,088   46,231    46,085
    
</pre>
<p> </p>
<p> </p>
<p> </p>
<pre>
    
                               WASTE SERVICES, INC.
                SUPPLEMENTAL UNAUDITED BALANCE SHEET AND CASH FLOW DATA
                                  (In thousands)
    
</pre>
<p> </p>
<pre>
    
    Balance Sheet Data:                       September 30,  December 31,
                                                      2009          2008
                                                      ----          ----
    
</pre>
<p> </p>
<pre>
    
      Cash                                          $3,209        $7,227
      Current assets                               $70,548       $72,961
      Total assets                                $870,792      $840,927
      Current liabilities                          $99,070       $93,245
      Debt:
        Senior secured credit facilities:
            US Revolver                                 $-       $34,600
            Canadian Revolver                        5,604        27,699
            US Term loan                            36,902        38,125
            Canadian Term Loan                     113,962       103,505
        Senior subordinated notes                  208,520       158,854
        Other notes                                  8,291         9,286
                                                     -----         -----
                  Total debt                      $373,279      $372,069
                                                  --------      --------
      Shareholders' equity                        $356,732      $335,018
    
</pre>
<p> </p>
<p> </p>
<pre>
    
    Cash Flow Data:
                                                      Nine Months Ended
                                                        September 30,
                                                      -----------------
                                                      2009          2008
                                                      ----          ----
    
</pre>
<p> </p>
<pre>
    
      Net cash flows provided by continuing
       operations                                  $47,154       $48,923
      Net cash flows provided by (used in)
       investing activities for continuing
       operations                                 $(34,761)      $14,619
      Net cash flows used in financing
       activities of continuing operations        $(17,903)     $(43,537)
      Capital expenditures from continuing
       operations                                  $24,413       $39,220
    
</pre>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<pre>
    
                              WASTE SERVICES, INC.
                SUPPLEMENTAL UNAUDITED GROWTH RATES AND COUNTRY DATA
                                 (In thousands)
    
</pre>
<p> </p>
<pre>
    
        Waste Services, Inc.                     Waste Services, Inc.
           Revenue Growth                          Revenue Growth
     For The Three Months Ended               For The Nine Months Ended
         September 30, 2009                      September 30, 2009
           (in thousands)                           (in thousands)
    
</pre>
<p> </p>
<pre>
    
    Total Revenue,                     Total Revenue,
     September 30,                      September 30,
     2008             $125,745          2008              $370,635
    
</pre>
<p> </p>
<pre>
    
     Impact on                         Impact on
      revenue from                      revenue from
      changes in:                       changes in:
    
</pre>
<p> </p>
<pre>
    
       Price             5,981   4.8%    Price              13,641   3.7%
       Fuel Surcharge   (5,279) -4.2%    Fuel Surcharge    (14,840) -4.0%
       Volume           (7,130) -5.7%    Volume            (19,293) -5.2%
       Acquisition /                     Acquisition /
        Disposition        188   0.1%     Disposition        1,168   0.3%
       Gain / Loss of                    Gain / Loss of
        Contracts       (2,496) -2.0%     Contracts        (10,634) -2.9%
       Other              (322) -0.2%    Other                (583) -0.1%
       Foreign                           Foreign
        currency                          currency
        impact          (4,226) -3.4%     impact           (24,356) -6.6%
    
</pre>
<p> </p>
<pre>
    
    Total Revenue,                       Total Revenue,
     September 30,    --------            September 30,   --------
     2009             $112,461            2009            $315,738
                      ========                            ========
    
</pre>
<p> </p>
<p> </p>
<p> </p>
<pre>
    
                                   COUNTRY DATA
                                  (In thousands)
    
</pre>
<p> </p>
<pre>
    
                                   Three Months Ended September 30, 2009
                                  ---------------------------------------
                                 US            Canada          Total
                                 --            ------         -------
    
</pre>
<p> </p>
<pre>
    
    Revenue                   $50,821  100.0% $61,640 100.0% $112,461  100.0%
    Operating expenses:
       Cost of operations      30,833   60.7%  40,371  65.5%   71,204   63.3%
       Selling, general and
        administrative
        expense                 6,155   12.1%   6,930  11.2%   13,085   11.6%
       Depreciation,
        depletion and
        amortization            6,317   12.4%   4,623   7.5%   10,940    9.8%
       Foreign exchange
        (gain) loss and
        other                     (76)  -0.1%      69   0.1%       (7)   0.0%
                                  ---              --              --
    Income from continuing
     operations                $7,592   14.9%  $9,647  15.7%  $17,239   15.3%
                               ======          ======         =======
    
</pre>
<p> </p>
<p> </p>
<pre>
    
                                   Three Months Ended September 30, 2008
                                  ---------------------------------------
                                 US            Canada          Total
                                 --            ------         -------
    
</pre>
<p> </p>
<pre>
    
    Revenue                   $58,468  100.0% $67,277 100.0% $125,745  100.0%
    Operating expenses:
       Cost of operations      38,114   65.2%  44,398  66.0%   82,512   65.6%
       Selling, general and
        administrative
        expense                 7,647   13.1%   7,427  11.0%   15,074   12.0%
       Depreciation,
        depletion and
        amortization            6,509   11.1%   4,994   7.4%   11,503    9.1%
       Foreign exchange
        gain and other             20    0.0%     115   0.2%      135    0.2%
                                   --             ---             ---
    Income from continuing
     operations                $6,178   10.6% $10,343  15.4%  $16,521   13.1%
                               ======         =======         =======
    
</pre>
<p> </p>
<p> </p>
<p> </p>
<pre>
    
                               WASTE SERVICES, INC.
                              UNAUDITED COUNTRY DATA
                                  (In thousands)
    
</pre>
<p> </p>
<pre>
    
                                 Nine Months Ended September 30, 2009
                                --------------------------------------
                             US             Canada            Total
                             --             ------           -------
    
</pre>
<p> </p>
<pre>
    
    Revenue               $151,801  100.0% $163,937  100.0% $315,738  100.0%
    Operating
     expenses:
        Cost of
         operations         94,348   62.2%  109,548   66.8%  203,896   64.6%
        Selling,
         general and
         adminis-
         trative
         expense            18,922   12.5%   20,112   12.3%   39,034   12.4%
        Depreciation,
         depletion and
         amortization       19,039   12.5%   12,977    7.9%   32,016   10.1%
        Gain on sale
         of property
         and equipment,
         foreign
         exchange and
         other             (2,273)  -1.5%     (260)  -0.2%   (2,533)  -0.8%
                            ------             ----           ------
    Income from
     continuing
     operations            $21,765   14.3%  $21,560   13.2%  $43,325   13.7%
                           =======          =======          =======
    
</pre>
<p> </p>
<p> </p>
<p> </p>
<pre>
    
                                 Nine Months Ended September 30, 2008
                                --------------------------------------
                             US             Canada            Total
                             --             ------           -------
    
</pre>
<p> </p>
<pre>
    
    Revenue               $179,331  100.0% $191,304  100.0% $370,635  100.0%
    Operating
     expenses:
                           116,497   65.0%  126,164   65.9%  242,661   65.5%
         Selling,
          general and
          adminis-
          trative
          expense           24,055   13.4%   23,888   12.5%   47,943   12.9%
         Depreciation,
          depletion and
          amortization      19,903   11.1%   14,923    7.8%   34,826    9.4%
         Foreign
          exchange
          (gain) loss
          and other           (463)  -0.3%      141    0.1%     (322)  -0.1%
                              ----              ---             ----
    Income from
     continuing
     operations            $19,339   10.8%  $26,188   13.7%  $45,527   12.3%
                           =======          =======          =======


    

For further information: For further information: Edwin D. Johnson, Waste Services, Inc., Executive Vice President and Chief Financial Officer, +1-905-319-1237, or J. Todd Atenhan, Investor Relations, +1-888-917-5105 Web Site: http://www.wasteservicesinc.com

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